Evening star., 1951-03-07
U. S. Offices Employing 5,183 Director NC
Will Quit D. c. Before Summer;Sar Friends
Defense, Treasury Top List Have Used Him
Dunhum Tells Senators
Dawson and Young
Are Clique Members
By Martin S. Hayden
North American Newspaper Alliance

ibCSOtAotA hSVAOl1 i llldAlSC wi r.
Director Walter L. Dunham today
privately informed a Senate COM
mittee that he felt he had been
used" by group of Washington
friends.
This, the first break in the solid
administration defense against
Fulbright committee charges of
outside influence" in RFC lend
ing, came as Mr.. Dunham gave
the committee a prepared state
ment in closed session.
In his statement, the 69-year-
old retired banker told of coming
to Washington, political novice,
in March. 1949, and being ac-
cepted into a clique of friends. ;"
all of whom are now central fig
ures in the investigation. Those
named by Mr.. Durham as men,
bers of the group were:
Donald Dawson. White House
aide: E. Merl Young, husband OF
a White House secretary and who
has been cited by the committee
as man of influence" in back
stage RFC affairs; Rex C. Jacobs,
Detroit manufacturer, whose in
Movements with Mr.. Young and
in the controversial Lustron and
Kaiser Frazer loans have at
tracted committee interest; RFC
Director William E. Willett, critl-
cized along with Mr.. Dunham as
having been influenced by out
siders, and James o. Windham, a
former RFC official now employed
as treasurer of the F. I. Jacobs Co.
which Rex Jacobs heads.
Before going into the closed
session with the subcommittee,
Mr.. Dunham made the following
comment:
In my own interest must
give up my position in RFC| I
have felt that way for some time.
At RFC we work in an atmos-
phere of influence, some proper
and some not proper. We always
have worked in that atmosphere. l
certainly was not party to any
improper influence and I do not
believe I was a victim of such
influence"
Doubts Success of Efforts.
Mr.. Dunham's signed statement
also said he was positive no one
succeeded in exerting influence
on his official acts and added that
he could recall no incident"
where Mr.. Dawson sought to in
fiuence my judgment on RFC
loans"
Mr.. Dunham does. however, tie
Mr.. Dawson tightly with Mr.. ia
cobs, Mr.. Young, Mr.. Willett and
Mr.. Windham in a group which
discussed RFC affairs at their
frequent social gatherings. He
adds that, when his own doubt
as to my association seemingly
caused a friendship break with
Mr.. Jacobs and Mr.. Young, he
simultaneously stopped getting
White House calls from Mr.. Daw-
son.
Throughout his statement. Mr..
Dunham documents his claims
with names and dates from two
volume diary of his official ac-
tivitieS which, now in committee
hands, records the names of every
telephone caller and visitor and
what was discussed on what have
now become key dates in the in
quiry headed by Senator Full
bright, Democrat, of Arkansas.
With a touch of bitterness. Mr..
Dunham describes his story as
"a sad history of businessman
so naive and uninformed as to
assume that the experience of a
private banker over 80 years was
sufficient to understand and cope
with the political atmosphere of
Washington
Traces Friendship" Clique.
His relationship with the friend
ship" clique he traces back almost
to the day of his RFC appoint
ment. Mr.. Windham, Mr.. Dun
ham says. sought an introduction
through a Detroit business friend
and, in turn, introduced Mr.. ia
cobs. Mr.. Dunham met Mr.. Daw-
son at the White House when he
called prior to announcement of
his appointment. The President s
administrative assistant, in his
turn, brought Mr.. Willett in to
introduce him as a fellow director
in whom "the White House has a
great confidence"
His diary, Mr.. Dunham says,
shows that on March 25, 1949,
four days after he took Office, Mr..
Continued on Page A-4, Col. 2.)