Natural Royal Pastel Stink

The story of Stenographer Lauretta Young's mink coat was not exactly earthshaking, but at least it was almost understandable. That was more than could be said for the rest of the bewildering array of doubletalk, political shenanigans and obvious perjury inscribed last week on the records of the Senate subcommittee investigating operations of the Reconstruction Finance Corporation.

Mrs. Young, a stenographer in the White House, got the fur coat--a "natural royal pastel" mink, one of "the better" types--because of her husband Merl's vast capacity for making "friends." Merl did not even have to lay out a dollar for the coat. Joseph H. Rosenbaum, a Washington attorney specializing in clients who want RFC funds, paid for it and took Merl's note for the $8,540 purchase price. Had Rosenbaum picked up the tab for the fur coat because of Merl Young's influence at the RFC, the W7hite House and with "many very important people"? Of course not, replied Rosenbaum, righteously. Merl was just a friend.

The Senators brought out that Rosenbaum and others interested in getting RFC loans had lent Young about $135,000 during one period in question. During that period, Young's own insurance business brought him only $1,900, but he bought--in addition to the mink coat--a $52,000 house and pieces of several business deals. Snapped Arkansas' J. William Fulbright, chairman of the investigating subcommittee: "You don't expect this committee to believe that just out of a clear sky you suddenly fell in love with Mr. Young, do you? Do you think we are so naive that we think you did it just because you liked the color of his eyes?" ..Blair Spelled Backwards. From that point on, the week's developments got somewhat hazier. As one witness explained, "There's no law against double-talk." Rosenbaum, blandly talking of his and Young's financial maneuverings, declared that he had been following no less an authority than Federal Judge Learned Hand by obeying the precept: "Every citizen has a duty to minimize his taxes ..."

There was, for example, one incomprehensible deal involving what he called "one-half interest in the down payment on the option of $100,000." Then he mentioned an outfit called the Rialb Corp. "What is that?" asked Fulbright. "That," said Rosenbaum pleasantly, "is Blair spelled backwards." Fulbright, with a gesture that got to be common during the week, shut off the witness and exclaimed: "It's too complicated for us ... It's beyond my comprehension."

Carl G. Strandlund, inventor of the Lustron prefabricated house and one of the most unsuccessful big businessmen in the nation, did little to mend matters. He claimed angrily that RFC Director Walter L. Dunham of Detroit (who said he had a heart condition which would permit his appearing privately, but would kick up if he talked in public) had participated with Young and others in a scheme to seize control of the Lustron Corp. Dunham, said Strandlund, put on pressure to make him sell 60,000 of his shares of Lustron stock "without compensation." Strandlund said he refused, and that soon after, RFC foreclosed and forced Lustron into bankruptcy. At the time, he neglected to emphasize, Lustron was already $37.5 million in hock to the RFC, and had little prospect of making any money to pay it back--a fact which seemed to indicate that RFC was principally derelict in not clamping down on Lustron several millions earlier.

Houses & Horses. So it went. Chunky Roy Fruehauf, the trailer manufacturer, who was worried about $3,000,000 still owed him on a Lustron contract, testified that Rosenbaum had once told him he had RFC Directors Dunham and Willett "in his hip pocket." Rosenbaum bounced back to the stand and denied he had ever said it. Young tried to explain that he is now in the insurance business, claimed he saved one client $40,000 a year on insurance. How? Young couldn't say--he didn't know much about insurance.

But, demanded Young with the sweeping irrelevance of the dormouse at Alice's tea party, what about Strandlund and Senator Joseph McCarthy and their bets at the Pimlico race track? He said, without indicating just where in tarnation McCarthy figured in the RFC hearings, that he had once watched Strandlund cash checks for McCarthy after the Senator had dropped money on the horses, and then tear up the checks. (Strandlund paid McCarthy a hefty $10,000 author's fee for a housing pamphlet in 1948, when McCarthy was vice chairman of Congress' joint housing committee.)

It was left to one of RFC's own harried directors to give the committee one solid bit of testimony to chew on. The whole RFC board had been "bad," declared Director William E. Willett and he guessed that he had been just "as bad as the rest."

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