Evening star., 1951-02-24
RFC,
Continued From First Page.)

letters were requested from RFC
in connection with a study o!
President Truman's plans for re.
organization of RFC. Mr.. Tru-
!, man last Monday sent the Senate
a proposal for a single RFC ad.
ministrator instead of the present
five-man Board of Directors.
The subcommittee opened hear.
ings last Wednesday to amplify
statements in its February 2 re.
port that several outsiders. in.
cluding Presidential Assistant
Donald Dawson, influenced some
RFC directors and loans.
The subcommittee will resume
hearings Monday, with witnesses
lined up for the entire week. Mr.
Dawson will not be called unless
he asks to testify, Senator Full
bright said today.
Wife Was Key Witness.
Mr.. Dawson's wife, top super
visor of RFC files, was a key
witness. along with other RFC
officials or employees yesterday
Their testimony about sending
the mountain of Congressional
correspondence to the White House
came as a startling surprise, Sen
ator FulbrighJ declared.
Explaining that the disclosures
were not staged" in advance by
the subcommittee staff, he re-
marked ruefully to reporters that
he had told Mrs. Fulbright the
days session would be too dull fol-
her to attend.
The session was the most ex-
plosive to date. 1t set off a chain
reaction that put a parade oi
RFC officials under a barrage o1
indignant questioning. 1t also
produced a White House an.
nouncement at noon that certain
RFC files had been brought there
at the direction of the President
Senator Fulbright used the wore
retaliation in commenting or
what he said were possible reasons
for collecting SO many congress
sional letters from RFC files.
Retaliation Move Seen.
ut appears to me that the
White House might have been
getting letters for retaliation
against the subcommittee" he
said.
That opinion was strengthened,
he explained, by his experience
late Thursday, when a highly
reputable radio commentator
asked him whether he sought, in
1948. to influence RFC on behalf
of an Arkansas borrower.
Senator Fulbright opened the
hearing yesterday by declaring
that the ''tip" to the commentator
must have come from some one
informed by or within the RFC
He told reporters later that he
wrote a letter in behalf of an
Arkansas tourist camp operator
seeking a $500,000 loan, but that
the letter was for purposes of in
formation rather than influence
Convinced that an attempt wa.
being made "to embarrass me anc
discredit the work of the subcom.
mittee," Senator Fulbright askec
RFC Chairman w. Elmer Harbel
and other RFC officials whether
they had sent any Congressional
letters to the White House.
"Won't Be inundated"
But before Chairman Fulbright
asked the big question and re.
ceived series of answers that lee
to the White House, Senator
Douglas. Democrat, of Illinoi.
pounded the desk and declared
II serve notice here and now thai
I am not going to be intimidatec
in these hearings"
The Illinois Senator confessed
that. early in his Senatorial career
when he was green" he wrote
RFC a letter he now regrets. The
letter urged the agency to ".expe-
dite" action on the loans but die
not pass Judgment on their merits
Senator Douglas added.
Senator Douglas charged that 6
counter offensive had beer
launched in behalf of RFC as 6
result of the subcommittee.
hearings.
RFC Chairman Harber admitted
that the directors last week hiree
Eugene Kelly. former Washington
newspaperman, as $50-a-da,
public relations counselor. MI
Kelly denied on the stand that h
was concerned with the subcom
mittee's inquiry. All he wanted II
do, he said, was to acquaint tn
public and governmental agencie
in general with RFC operation
and "the free flow of loans"
Subsequent admissions by MI
Harder and other RFC director
about the Congressional letter
did not make clear where the re
quest for the letters originated
or how or by whom they were t,
be used at the White House.
Called Frank Witness.
Mrs. Dawson, described later b,
Senator Fulbright as one of thu
frankest witnesses, testified sh'
gathered the letters as far bacl
as 1941 from the files on instruc
tions from higher-ups in th'
agency. She said she assumed
they went to the White Hous'
"for the Presidents USE"
Other RFC witnesses disclosed
that the letters were delivered t.
Mr.. Dawson. Mr.. Harber re-
Iy,@ L.