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20X3 & S t r e e t , N . W < W a s h i n g t o n , V . G* J u l y 8 , 1951 The H o n o r a b l e M a r r i n e r S# E c c l e s The Shoreham H o t e l W a s h i n g t o n , D. C• D e a r Mr* E c c l e s : A t t a c h e d i s a c o p y o f a l e t t e r I am s e n d i n g t o newspapers. I b e l i e v e i t may be o f i n t e r e s t t o the you. Since re l v . P . S . You w i l l be i n t e r e s t e d i n t h e e n c l o s e d o n t h e Bank o f A m e r i c a ^ i n f l u e n c e i n Tfashington* 201J 9 Street, 8* vWashington, G. J u l y 8 , 1951 fhe E d i t o r rhe vaasliiagton Poet rashingtsca, D. 0. Dear s i r » Perusing the raorning newspapers I t was rioted how oouplotoly the RFC i n v e s t i g a t i o n has dropped f r o n the news* That, o f course, I s i n e v i t a b l e I n our joveraaent o f p u b l i c i t y and p o l i t i e s * . o w v o r , i n t h i s p a r t i c u l a r ease, t h e r e i s a t l e a s t a b feature o f t h e i n v e s t i g a t i o n which should be o f i n t e r e s t t o a l l levers of juntos t Government end f r e e e n t e r p r i s e * the f a c t t h a t the oasu wfcich caused ;k> i n v e s t i g a t i o n , i«e* the K a i s o r ^ resar loans, has never been explained. I t sitould be o f i n t e r e e t t o the levers o f f r e e o v s r i M w an oxa<\ple o f how ^orvernaent sonsy oan be used f o r poU^jSSjN?urpoees. Ttfssiould be o f i n t e r e s t t o lovers of f r e e enterprise as o f how 5 ovehJhent t&iwy can oaepete w i t h l e g i t i m a t e H fr®o n n a m ^ y ^ J J Xt i s possible t h a t the p u b l i c d & ^ n o t ara<4^iato soras bare Cttote o f the s i t u a t i o n , i n c l u d i n g a f e e recent i d ^ o p ^ f o t o . rote tl*»s» i t e n s t February, 191*6 • Bank o ^ i w s r l ^ ^ l o a ^ i a s ^ ^ i s e r ^ raaar Corporation ( l e a n «as ^aaraataM by Sierry g d g i b ^ a i s e r j secured by the pledgs o f aost fef the Saieer f k i i l y f o r t u n e . ) November, 1&& - a Vm*!*Q0»000 loafcJfrwa the HfC t o $aiser»Fraser was used i n p a r t t o off t h o f M a r l e a lean* ( ^ r s ^ ^ Q ^ ^ ^ t e e ^ f ^ b e ^ n ^ r ^ were apt r e q u i r e d by the tFCi ^ M t o T ooiUbe?sr"$S*dgpd was reduced, even thaqdh t h e And note t . - i ' i 1952 factst ^ f u s b ^ / a sad JJarvey J* Ouaierson beeaoe d i r e c t o r s o f t h e 19i«& - 3am H. Husbands l e f t the 3fO and j o i n e d Tranaaaeriou Corporation which c o n t r o l s t h e Bank o f Araerioa. lie i s now president o f Transsasrioa. iarvey J . Jundsrson i s now eastern ssuagsr f o r Transsaerica w i t h o f f i c e s i n Washington. I t i s apparent free* the t e s t i a e » r d u r i n g the r u l b r i g h t i n v e s t i g a t i o n t h a t JOr. >underscn had considerable to do w i t h p u t t i n g tiarou^i t h e &aiser»?raeer loans. - curing 19tl9 Raiser-Eraser a a i o p u b l i c no I n t e r l a reports o f operations but t h e sntwal r e p o r t f o r t h a t y e a r , published several aonths a f t e r the arc lean was diseleeed an operating loss o f f o r t h e year* mm the 1FC l i i f o i — d o f t h i s operating less before t h e l e a n was granted? • a l a the above there i s e e r t a i n l y l e g i t l i a a t e ground f o r an i n v e s t i g a t i v e oosaaittee t o aak eoae vary p e r t i n e n t question* o f a l l tliose oonoariod i n t i l l s rather mlodorous operatioa. "ay I suggest a fswr? D i d tho Bank o f Aasrioa have odvanoe inforzaation o f t h e losses? a i s e r - r&ser I f tho 1 ossos o f ^aisorofrasor Corporation mors ooroealed, was t h a t not fraud? I f the RFC kasw o f thsra, how oorae the loan? Is the appointment o f ;iarvey J . "undarson t o an ifsponAint p o s i t i o n i n Transataerioe not p r o t t y oloso t o what w i c h t be c a l l e d b r i fcr; Let us note one raore feature o f t h i s s i t u a t i o n * SemLkr Burnet R. aj^bank, Chalrr-ian of the Senate Banking and Currency Cacsaitte% and l i . San H. J'usbands are b o t h Sou% Carolinians* Sow, o f course, i t p ^ B l i fJiT U o r Lien t o l i v e i n the sasa s t a t e and not know eaoh ether* JUL, u u l I s j <^Se cirourastanoes, should not the r e l a t i o n s of these two m n wi£fcfa»v&30ir hcse ft^e be c l a r i f i e d ? For t h e i r own p r o t e c t i o n , i f f o r no o t h e r y M i o E ^ O v V v One nore question* v as I t not o i ^ o r aybantyrmo kopt the s u b - o ^ i i t t e e frora asking a proper and exhaustive l i w t on t h ^ y f a i s e r - ^raser loan? if* ii* A copy o f t h i s letsaT i s being a m * [to the f o l l o w i n g * senators Douglas o f I l l i n o i s , Km. of J i s e o u r i , jyrd of V i r g i n i a , ariotoar^SUuMo, \ 3 s ^ e r ^ > ^ / « b r a s l o a . Con^resa^^Srosse? o f o f Comeotiout, - o l v e r t o n of ;ew J e m y , Spenoe o f . - e n t u o i y , a l t e r o f Pennsylvania, S c o t t , JT. o f #^uiylvania« A Janes Aairrotioe F l y , Est L f o m a r ohainaan o f t h e FCC* ^wurrinW s# r ^ o l e s . j ] n* B. Srans, 3 o v e r a o r / ^ the Federal a — r w e 3o*rd. J . l e o n a ^ s ^ ^ M n ^ y n l i o i t o r , Federal Reserve Board.
