Bailie Out

Most questions which the Senate Finance Committee asked Henry Morgenthau Jr. last week before confirming his appointment as Secretary of the Treasury were routine. One that was not, involved the status of Mr. Morgenthau's dapper financial adviser, Earle Bailie, of Manhattan. When his name came up, Michigan's Senator James Couzens called Mr. Morgenthau aside, whispered something in his ear. Three days later Adviser Bailie handed in his resignation and when reporters rushed to tell Senator Couzens, the rich Detroiter grinned & beamed.

Earle Bailie had been called from the banking firm of J. & W. Seligman, of which he is the most active partner, to coach Acting Secretary Morgenthau, himself no banker, on large scale bond flotations. Had Senator Couzens been pressed to explain why he wanted Earle Bailie fired, he would have pointed to the Senate's foreign bond investigation which two years ago found some defaulted Peruvian bonds sponsored by J. & W. Seligman, and a $415,000 "commission" paid by the firm to the son of Peru's late President Leguia.

Mr. Bailie's own explanation of his resignation, as contained in a letter to Mr. Morgenthau, was all innocence. Wrote he: "Dear Henry. . . . When you first asked me to come down to Washington ... I told you that I could do so only on a temporary basis; that one of my then senior partners, Mr. Henry Seligman, was not in good health. . . . Needless to say, I regret very much having to pull out. . . . I have had a grand time working with you and it has been a privilege which I shall not forget. ... As you know, when Mr. Seligman died two weeks ago I told you that I must finish up my work here . . . and go back to New York."

Since Partner Seligman was 76 when he died, had been inactive in the firm for years, politicians viewed this reason as polite fiction. Senator Couzens' threats seemed more plausible; proved again that any Wall Streeter is good mincemeat for the Congressional sausage-machine.

A third possibility, unanswered last week, would have been bigger news: was Banker Bailie, like four of his predecessors in the Treasury, unable to stomach the President's fiscal policies?

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