Evening star., 1952-01-09
House Group Probes
SEC, With Mcdonald
As First Witness
By Robert K. Welsh

A House subcommittee today
plunged into an investigation of
the Securities and Exchange Com
mission, with closed-door ques-
tioning Of the five commissioners
to determine whether past or pres
ent, officials served anything but
the public interest.
SEC Chairman Harry A. Nc
Donald, named by President Tru-
man to succeed w. Stuart SYM
ington as Reconstruction Finance
Corp. administrator, was the first
scheduled witness.
He conferred late yesterday
with Representative Heller, Demo-
crat, of New York. head of the
House Commerce subcommittee
that is making the first full-scale
investigation SEC has had since
its establishment 18 years ago.
Mr.. Mcdonald, it was learned,
also visited Senator Fulbright,
Democrat, of Arkansas, chairman
of the Senate Banking Subcom-
mittee on RFC matters. That
subcommittee has been directed to
hold public hearings, probably
late this month, on the McDon-
aid nomination and on the cur
rent condition of RFC.
The inquiry into SEC activities
and the six statutes administered
by the commission will be thor
oughly objective, Mr.. Heller de-
clared.
No WhitewaSh.
1--WE frankly do not know what
the inquiry will develop" he ex-
planned. But there will be no
whitewash, if we come across evi-
dence indicating thievery, i'm
proper influence, betrayal of pub
lie trust. laxity, inefhciency or any
serious departures from the spirit
as well as letter of the statutes.
IF we find any instance, past
or present, where any one con-
nected with SEC tried to serve two
masters or served anything butt
the public trust. We'll put such al
person on the hot seat promptly
and loudly. On the other hand,
we will not tolerate the type of
testimony that can't be backed upI
and can do unjust damage toI
regulations. There has been tool
much of that sort of thing"
The subcommittee chairman, al
47-year-old Brooklyn attorney, who
for IL years prosecuted many elec-
tion fraud cases as a special as
Sistant attorney general in New
York, emphasized that his group
has no reason to believe Mr.. Nc
Donald and the four other Sec
commissioners have been remissI
in their duties.
Invited in for Talks.
He disclosed, however, that he
was worried when he read in yes
terday'S newspapers that Mr.. Nc
Donald soon will leave SEC forl
RFC, If confirmed by the Senate
He wanted to make certain, heI
said, that the subcommittee
didn't lose a star witness" and,
therefore, invited Mr.. Mcdonald
in for a talk late in the day. /
Besides the five SEC commits
Sioners, others to be called laterl
into the closed session will included
several former SEC officials who
got big jobs in private concerns
after leaving the agency.
Other Cases Contemplated. |
The subcommittee has indicated
1t will look also into some SEC
operations relating to the Tucker
automobile venture and the Kai-
Ser-Fraser-OtiS financing. It may
look into the background of a
never-published SEC report, cri-
tical of the defunct Empire Ord
nance Co. and it's one-tirne pro-
MOCer, FRANK COnen.
Meanwhile, on the RFC front, |
the Senate Investigations subcom-
mittee headed by Senator Hoey
Democrat of North Carolina, will
meet tomorrow to work out al
timetable for at least three sets
of hearings.
Its first move will be to submit
a report on hearings last fall con-
cerning william M. Boyle, ir., for
mer Democratic national chair
man, and Guy G. Gabrielson,
present Republican national chair
man, and their respective dealings
with RFC. The report was to have
come out today, but probably will
be delayed about a week, a sub
committee official said.