The Farmville herald. (Farmville, Va.) 1957-current, 1963-04-26
WASHINGTON, April "a -

gest bond steal in history is be-
ing extended to Switzerland.
At the request Of the Treasury
and Justice Departments, the
State Department has asked the
Swiss government to ease its
strict banking secrecy to deter
mine whether the missing" SIS
million in U. S. securities is hid
den in an American owned
numbered" account.
The government bonds, seven
OF them of ST million denonaina-
ton, vanished under highly mys-
ferrous circumstances from the
vault of the Federal Reserve
Bank of San Francisco last Au-
gust.
No hint of this was disclosed
until last month, when the Fed
eral Reserve purposely leaked
the story to a hand-picked San
Francisco press source when
Representative Wright Patman,
Dick, chairman OF the House
Banking Committee. got wind of
the big loss and began demand
ing full explanation.
It was this lnsistent prodding
by Patman, a long time critic Of
the Federal Reserve, that forced
this hidden scandal out into the
open.
The government inquiry was
extended to Switzerland after
agents. exploring the Federal
Reserve claim that the bonds
probably had been accidentally
burned, learned that veral
million dollar U. S. bonds" had
been deposited in a Swiss bank
about the time of the Cuban
missile crisis last fall.
If the Swiss cooperate, U. S.
authorities hope to determine u
if there is a link between these
bond deposits and the missing
securities, and ~ whether the
bonds are hidden in a secret &C
count.
INSIDE JOB? Treasury
and Justice probers are now
convinced the bonds were stolen
and not accidentally destroyed
as claimed by Federal Reserve
officials.
That is what the Senate Jul
dietary Committee has been in
formed. It also is digging into
the mysterious affair to deter
mine where certain laws were
violated and by whom.
In the apparent complete alb
sence of concrete evidence to
substantlate the bond burning
theory. investigators are pro
ceeding on the basis that the
huge theft was IAN inside job.
One investigator has told the
senator's he anticipates h G
bonds will eventually be pre-
sented for payment through a
foreign bank. probably one in
Switzerland that is controlled by
Communist agents.
These particular bonds need
not be presented for redemption
on their maturity date May
Is. 1868. They are redeemable
at any time: SO it may be
months or longer before the Sc
curiues reappear.
Thes especial bonds are nego-
table by any holder as they
were not issued to a specific in
dividual and require no endorse
ment. They are short-term obi
cations deposited in the San
Francisco Federal Bank by an
other member bank. Also, while
numbered, the bonds were not
registered and can be passed
from holder to holder without
being sent to the Treasury for
registration.
Further, the bonds can be
used as collateral for loans in
the world market up to eighty
per cent Of their face value.
These disturbing possibilities
and the Federal Reserves
strange attempts to hush up this
scandal were the reasons behind
Representative Patman's deci-
sion to send a House Banking e.
Currency Subcommittee to San
Francisco for an "on-site" scru-
tiny.
STRANGE GOINGS-ON - II
is still very conjectural whether
Federal Reserve officials would
have broken their months-long
silence if Patman hadn't acct
dentally discovered the loss Of
the bonds.
During a routine study of the
minutes Of meetings Of New
York Federal Reserve directors,
Patman came across a notation
that the bank was absorbing
part of a SIS million loss caused
by the destruction of govern
ment securities in the San Fran
cisco Reserve Bank. This write
off was approved by the N W
York directors as Reserve banks
prorate members losses.
Asking questions about this
curious matter, Patman learned
the bonds actually were miss
ing" and that a quiet Treasury
investigation had produced no
evidence to back the claim that
the securities had been "accl-
dentally burned. "