Evening star., 1954-10-23
Gov. Dewey Asserts
Hartman profifed in
Deal. Investors Lost
BY III. Asseeiassd Pres,

NEW YORK, oct. 23.--Gov.
Thomas E. Dewey says Averell
Hartman made millions" as an
insider on a pre-war Silesian
mine deal while what he called
deliberately misinformed" in
vestors lost S. million.
Mr.. Hartman, the Democratic
Liberal candidate to succeed Gov.
Dewey. Immediately replied
Smear and distortion"
Simply not true" added John
P. McGrath, Democratic State
campaign manager.
Second Major Attack.
Gov. Dewey's charges In a ra-
dio-television address last night
were the second major Repub-
lican attack in q week on Mr..
Harriman's financial past. This
now appears to be main target
of the Republican campaign to
hold New York in the November
2 elections.
Gov. Dewey, who is retiring
from Office this year. spoke in
behalf of Senator Irving M. Ives,
the Republican gubernatorial
candidate.
Mr.. Hartman, in describing
the Dewey speech as a smear,
said it was designed to divert
attention from what the Demo-
Gratis consider the issues of the
campaign.
Although he and his aides in
sisted they will stick to these
issues. it was reported at Demo-
cratic, headquarters that MI.
Hartman was becoming increas-
ingly angered by the Republican
attacks. There were indications
he was planning television talk
to deal with the situation, pos
sibly next week.
Called 'Haymaker' Punch.
Gov. Dewey's charge was one
of what Senator Ives calls
"haymaker" punches at Mr.. Har-
riman, who presently is leading
in the race on the basis of news
paper polls.
Senator Ives opened the series
of financial shots by saying in n
TV-radio address earlier in the
week that a shipping company
headed by Mr.. Hartman paid
$250.000 to corrupt Judge in
return for leases on two piers
controlled by Tammany Hall.
Senator Ives is scheduled to
deliver the third in the series in
a CHS TV-radio program to-
night.
Gov. Dewey said that, although
the mine transactions began in
1925. the case presently is in
Federal Court in the form of a
lawsuit to recover millions Of
dollars for the benefit of inves-
tors who lost money.
Quotes Report of 1850.
The Governor quoted the Fed
eral Securities and Exchange
Commission as reporting in 1850
that Mr.. Hartman and fellow
promoters. with substantially no
investment, received stock and
large profits as a result of trans
actions made possible through
funds obtained from deliberately
misinformed investors" Il
Gov. Dewey gave this account:
Back in 1925 Hartman made
a 81 million loan to a company
which operated mines in Polish
"The loan turned sour within
a few months. Harriman-per-
sonally-mind, you. personally
made a quick trip to Berlin to
figure out how to bail himself
out. Out of that trip came a
grandiose scheme to take over
the whole mine.
Says Bonds Were Issued.
Hartman. associated himself
with some of the largest banking
houses and American mining in
terests. They agreed to form
company called the Silesian
American Corp.
"They arranged to have this
new corporation issue SIS million
OF bonds to the American people,
finance the mine with the pub
he's money and take for them
selves the lions share of the
stock for practically nothing.
Then came the war and the
mines were nationalized and
Harriman's great promotion, the
Silesian American Corp. went
into the hands of the bankruptcy
court"
Gov. Dewey said some investors
got so cents on the dollar and
some "a few pennies"
Points to SEC Report.
The Governor said the SEC
reported:
That Mr.. Harriman's pro-
motion enabled him to recover
his So million loan without loss.
That Mr.. Hartman and his
associates got 81 million for SELL
ing the bonds to the public and
a $400, 900 fee in addition.
That, additionally, Mr.. Harri-
man and his associates got 81
million in preferred stock and
81 per cent of the common stock.
That they paid themselves
another SIS million in cash
dividends before the company
went bankrupt.
MIR. Hartman, campaigning in
Buffalo, commented:
This is some more distortion
and smear which the Republic
cans are putting out in despera-
ton to divert attention from the
issues. / shall continue to discuss
the issues"
~