Hoover v. Influences

Without mentioning names but leaving no doubt whatever about whom he was talking. President Hoover picked up a paper and read to an assemblage of White House correspondents. As he read they looked more and more dumbfounded as if they did not believe a President of the United States could be so outspoken. Mr. Hoover read on. with a broad smile at their astonishment. When he had finished reading the correspondents asked whether this statement was for their information or whether they might give him as authority for the sense of it. His answer was that verbatim copies would be given them.

The statement began: "The President said: I have been much interested. . . ." What he was interested in was the disclosure in a New York court that "a naval expert'' had received more than $50,000 from "three naval shipbuilding corporations," for propaganda that he had carried on for a bigger Navy and against naval limitation.

That was clear enough. No one had any doubt that "a naval expert" was William B. Shearer and "three shipbuilding corporations" were Bethlehem Shipbuilding Corp., American Brown Boveri Corp., Newport News Shipbuilding & Dry Dock Co., whom Mr. Shearer has sued for a balance of $257,655 on a claim of $308,885 for propaganda services (TIME, Sept. 2)./-

But the President said yet more:

"A part of this propaganda has been directed to create international distrust and hate.

"I cannot believe that the responsible directors of these shipbuilding corporations have been a party to these transactions as reported in this lawsuit, but their statement of the case is needed. It is due to the public, it is due to the Government, and it is due to the corporations themselves.

"In the meantime, I have directed the Attorney-General to consider what action we can take.

"Unless the companies can show an entirely different situation to that which is purported in this suit, we are compelled to consider what measures can be proposed to free the country of such influences.

"I am making this statement publicly so that there can be no misapprehension of my determination that our present international negotiations shall not be interfered with from such sources and through such methods."

The three shipbuilding companies promptly issued denials. Eugene Gifford Grace, president of Bethlehem Ship-building which built the cruiser Northampton launched last week (see col. 2), said Lobbyist Shearer's suit was "without merit." Homer Lenoir Ferguson, president of Newport News Co. which built the cruiser Houston also launched last week, said that his company had never employed "Shearer or any one else to oppose disarmament." Clinton Lloyd Bardo, president of New York Shipbuilding Co. (subsidiary of American Brown Boveri) said the suit was "wholly unsupported by the facts."

/- For Mr. Shearer's comment on his activities as reported in TIME see Letters, p. 69.