AMERICAN LITHOFOLD CORP. THURSDAY, SEPTEMBER 13, 1951 UNITED STATES SENATE, COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS, Washington, D. C. Met at 2:40 p. m., pursuant to Senate Resolution 156, agreed to June 14, 1951, first session, Eighty-second Congress, in the office of the Secretary of the Senate, United States Capitol, Senator Clyde R. Hoey (chairman) presiding. Present: Senator Clyde R. Hoey, of North Carolina; Senator John L. McClellan, of Arkansas; Senator Thomas R. Underwood, of Kentucky; Senator Joseph R. McCarthy, of Wisconsin; Senator Karl E. Mundt, of South Dakota; and Senator Richard M. Nixon, of California. Also present: Francis D. Flanagan, chief counsel; Carmine S. Bellino, accounting consultant; and Ruth Young, clerk. Senator HOEY. The committee will come to order. I want to say to the members of the committee that we are holding this executive session because the doctors have certified that certain of those who are to be examined, it would be dangerous to examine them in public if it caused excitement. My thought about it was, if it meets the approval of the committee, that we will examine them this afternoon and then release the testimony in the morning. That would give an opportunity for the testimony to be written up and would save giving out just fragmentary statements about it. It could be made public in the morning and made a part of the regular record. Senator MCCLELLAN. Do you mean by that, Mr. Chairman, that no member of the committee should reveal the testimony this afternoon? Senator HOEY. That is right. Senator MCCLELLAN. Until a full copy is released? Senator HOEY. That is right. I suggest that because they will come to me and want to know what they testified to. I can give a little bit of it, fragmentary. I think it would be better to say that the testimony will be released in the morning, then they can all have it and get the facts about it, instead of just parts of it that might give wrong impressions. Senator MCCLELLAN. I just want to get the correct impression. Senator HOEY. If that meets the approval of the committee, we will follow that course. Now we will have our first witness. 249 Do you solemnly swear that the testimony you are about to give in this case will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. DUNHAM. I do. TESTIMONY OF WALTER L. DUNHAM, WHITTIER HOTEL, DETROIT, MICH. Senator HOEY. Will you please give your name and address to the reporter? Mr. DUNHAM. Walter L. Dunham. I am presently living at the Whittier Hotel in Detroit. Senator HOEY. What position did you formerly hold in Washington? Mr. DUNHAM. My position in Washington started in March 1949, and ended about the 1st of May 1951; and during that time I was a director of the RFC. Senator HOEY. You served then for a little over a year? Senator HOEY. As director of RFC? Mr. DUNHAM. Yes, sir. Senator HOEY. That was from the date you have given? Mr. DUNHAM. Yes, sir. Mr. FLANAGAN. Do you recollect the date that you became Chairman of the RFC, Mr. Dunham? Mr. DUNHAM. I think you have me confused. I never was chair man. Mr. FLANAGAN. I mean director. Mr. DUNHAM. I am not sure. It was about the 24th of March 1949. Mr. FLANAGAN. In any event it was in the latter part of March 1949? Mr. DUNHAM. That is right. Mr. FLANAGAN. Do you now recall the loan of the American Lithofold Corp. which was pending before the RFC at the time you were chairman? Mr. DUNHAM. Yes, sir, I now recall that. Mr. FLANAGAN. Do you recall that that loan came up before the Board of the RFC in the latter part of September 1949? Mr. DUNHAM. When you say "recall," I have refreshed my memory and I now recall that it came up at least three times in 1949, in September and October. Mr. FLANAGAN. Do you recall how you voted on that loan application in September 1949? Mr. DUNHAM. I checked the records and they indicate that I voted against it each time. Mr. FLANAGAN. Could you give the committee the reasons why you voted against that loan? Mr. DUNHAM. I have searched my soul looking for the reason. Without looking at the loan again, sir, I do not know. Senator HOEY. Mr. Dunham, did anybody, other than the people who were interested primarily in the loan, ever discuss the matter with you? Mr. DUNHAM. I have no recollection of anybody, Senator, discussing this loan with me. Senator HOEY. Just to get the record clear, did you ever talk about this loan to Mr. William Boyle? Mr. DUNHAM. Never. May I add that I have never talked to Mr. Boyle about any loan. Senator HOEY. Did you ever talk to anybody else? You are not sure about talking to anybody about the loan, but did you ever talk to anybody, outside of somebody connected with the company, actively representing them? Mr. DUNHAM. May I say it this way: Nothing now within my memory indicates that there was anything special about this loan; no one from the outside ever talked to me about it. The records in my office may show that people came in at that time. I don't know. But I have now no recollection of anybody ever discussing this loan with me. Senator HOEY. As a matter of information for the record, you have a large number of these loans? Mr. DUNHAM. We had 50 to 100 a week. Senator HOEY. And they would come before the Board at different times? Mr. DUNHAM. That is right. Senator HOEY. Sometimes the same loan would be up several different times, with changes or modifications? Mr. DUNHAM. That is right. It is not uncommon. Senator HOEY. You do not remember the details about this one? Mr. DUNHAM. That is perfectly true, sir. Senator HOEY. Proceed, Mr. Flanagan. Mr. FLANAGAN. When you were a Director of the RFC, was it the custom of your secretary to maintain an office diary of the calls you made and the persons that came in to see you? Mr. DUNHAM. Yes, sir. Mr. FLANAGAN. I might state for the record that we have had an opportunity to review that diary. Mr. DUNHAM. Yes, sir. Mr. FLANAGAN. I point out that in that diary, under date of June 27, 1949, there is this entry, and I am reading this thinking that it might refresh your recollection. It says: Mr. Frank Prince called on Mr. Dunham with Mr. Blauner, of the American Lithofold Co., St. Louis, Mo. Do you have any recollection at this time of Mr. Prince coming in with Mr. Blauner to talk about the American Lithofold loan? Mr. DUNHAM. No, I haven't, and I didn't have any recollection of that in St. Louis. They reminded me; they said Mr. Prince had testified that he brought Mr. Blauner into my office. Mr. Prince, according to their statement, said that Mr. Blauner came in and wanted to talk with some of the Directors. Mr. Prince contacted several Directors, and I think he said I was the only one that he could find. He did come up to my office with Mr. Blauner. Mr. Prince, according to their statement, said that I made the remark that if the facts are borne out as you describe them, I would not be against the loan. I mean that was his recollection of what I said at the time. I didn't commit either way. Mr. FLANAGAN. You yourself now have no independent recollection of even having this meeting with Mr. Blauner, is that true? Mr. DUNHAM. No, I haven't, that is true. I didn't even know Mr. Blauner's name until I read it in a St. Louis paper the other day. That completely escaped my recollection that he called on me. Mr. FLANAGAN. Did Mr. Willett, another RFC Director, discuss this loan with you in any way? Mr. DUNHAM. No, sir, I never remember discussing this loan with Mr. Willett. Mr. FLANAGAN. I have no further questions. Senator MUNDT. Did Mr. Boyle ever call you while you were a Director? Mr. DUNHAM. I am sure he called me. I had lunch with him probably 8 or 10 times. Never, as I remember it, alone. He always seemed to have a group with him. I never have known him very well. He never, in all my association discussed a loan with me, of any kind. I would resent it. I don't know that that would have any influence on my attitude toward it, but I would remember it if he did, and he did not. That I am perfectly willing to testify to. Senator MUNDT. Did he ever call up to make appointments for people to see you? Mr. DUNHAM. Very often. Not particularly Mr. Boyle, because he probably didn't call me over 8 or 10 times in the 2 years that I was there, but his office called me a great deal. Gray Leslie, whom I have never seen but once-and that was a chance acquaintance because I heard someone mention his name and I said, "Is that Gray Leslie? I want to meet him." We at that time. had discussions over the phone time after time. It was not uncommon for them to call up and say: "A friend of ours says he is not getting good attention from the RFC. Look this up and tell us what is going on." That sort of thing, to check with any Director who happened to be there. I think my record of attendance perhaps was a little better than some of the others. For 18 months I didn't leave the office. I was just there every day. It just happened that way. For 10 days, one time, I was the only Director in town from the RFC. Senator MCCARTHY. How often would you say that you received calls from either the Democratic or Republican National Headquar ters. Mr. DUNHAM. Senator, I don't ever remember receiving a call from the Republicans. I may have, but if I did it wasn't over a couple of times. I would think that my calls would have averaged once a week from the Democratic National Committee. Senator MCCARTHY. Do you recall offhand who normally would have been the person from over there who would talk to you? Mr. DUNHAM. Yes. Gray Leslie called me more than anybody else until Turney Gratz, who went over from the RFC to the committee. Because of his personal acquaintance with me-he came from Detroit-I think he kind of took over from there on. Just two men, principally. Senator MCCARTHY. How long were you a Director? Mr. DUNHAM. Two years, just a month or so over two years. Senator MUNDT. I started to interrogate you about how many times he called. You said Mr. Boyle or somebody from his office called quite frequently and would say, "Some of our friends claim they are not getting proper treatment, or favorable treatment, or satisfactory treatment. Look this up and❞—I think you said, do what? Mr. DUNHAM. Let me know. Senator MUNDT. What would be the next step then in the process? Mr. DUNHAM. I would immediately turn that over to my secretary to get all the facts. Perhaps it would come back to me in the form of a memorandum or perhaps in the form of a file. Sometimes I called back and sometimes she called back and said this gentleman told me to say this to you. Or sometimes I would call back. That was just one of the things. It was not uncommon for people from most parts of the United States to come to the Democratic National Committee because they knew somebody there and say: "I have a problem with the RFC. Whom should I see? What should I do?" They might call up and they would ask for the Chairman. If he wasn't in they would ask: "Who is Chairman for the day?" Maybe it would be Dunham. If it was, "We know him, too. Send him over." That was the type of thing. But never-I might say this, sir, for the record-never have they criticized us for not carrying out their wishes regarding a loan, whatever it was. Sometime we were able to say yes, sometimes we had to say no. Senator MCCARTHY. But they would call you and let you know what their wishes were? Mr. DUNHAM. Not particularly in that form of a wish. They would call and say: "We have a friend. We are interested in him and he has a loan. What are the chances? What can we tell him?" They might ask that. We would say: "That loan was received here a week ago, it is now being analyzed by the examiner. I don't know what his report will be. In another week or 10 days we will know all the facts and let you know." We would put it on the docket to call them. Senator MCCARTHY. Did Max Siskind contact your office? Mr. DUNHAM. I have only recently heard that name. No, sir. I didn't rely on my memory, and that is the reason for the record in my office. He may have. But he is not a man that I would know. Senator MCCARTHY. How about Cecil Green? He was Boyle's investigator for a while and worked for the Lithofold Corp. Mr. DUNHAM. I never remember Mr. Green, no, sir. Senator MCCARTHY. As I recall, you kept a diary in your office. Mr. DUNHAM. Yes, sir. Senator MCCARTHY. As I recall you testified before Senator Fulbright's committee. That diary shows a number of calls that you got from various people. Mr. DUNHAM. Yes, sir. Senator MCCARTHY. I assume that that testimony might be valuable as a diary. As I recall your testimony-correct me if I am wrong-I thought it was to the effect that you had calls from Boyle much, much more often than once a week. |