Son's Scheme

Cynics who believe that every Senate investigation is a scandal hunt, that Senatorial inquisitors miss no opportunity to make a headline, were last week surprised and shocked at the backwardness of Senator Gerald Nye's munitions committee in coming forward with its facts on President Roosevelt's second son. The Nye committee had spent months blackguarding the du Fonts, Britain's late George V, a handful of Latin American dignitaries, Woodrow Wilson and the House of Morgan. But not until last week did the press smoke out of its files a two-year-old secret about Elliott Roosevelt's scheme to sell airplanes to Russia. Even then, Chairman Nye, one of the Senate's smartest hands at investigation publicity, loudly deplored the disclosure as "an attempt to smear the President" and as "not designed for any honest and constructive purpose." Nevertheless, the same public that had watched this North Dakotan "smear" the President's enemies now had a glimpse at the way a President's son may plan to make some quick money.

Origin of last week's to-do was an article signed by Publisher Frank A. Tichenor which appeared in the October issue of his Aero Digest. In it this stern critic of the New Deal told two complicated, interwoven tales of intrigue. The substance of Tale No. 1:

In 1934 Elliott Roosevelt, aided by a business associate named Grenville W. Stratton, made an agreement with Anthony Fokker to sell military planes disguised as commercial types to U. S. S. R. Young Roosevelt was to form a company which was to receive a $25,000 retaining fee from Fokker. Son Elliott personally was handed four $1,000 and two $500 bills as a down payment and gave a receipt for them. The 50 planes which it hoped to sell Russia were to be priced to yield $20,000 profit apiece, half of which was to go to Elliott or his firm. Salesman Roosevelt showed a model of the planes (Lockheed "Electras" modified for easy conversion to military use) to a delegation of Russian aeronautic engineers. Roosevelt, Fokker & friends worked up a telegraphic code in which the President was "Rochelle," Elliott "New Rochelle," military "industrial," Amtorg Trading Corp. "Ruyork," Moscow "Mosely" etc. After the Russians balked at the price (nearly $58,000 per plane, without motors, etc.), the contract was canceled though Elliott Roosevelt was allowed to retain the first $5,000 down payment. The Bureau of Internal Revenue wrote Fokker that Son Elliott denied having received the $5,000, saying that Stratton had received it. Herbert Reed, an associate of Fokker, declared that Stratton had approached him to recover the receipt given by Elliott Roosevelt saying, "I have personally assured the President that all papers involving Elliott have been destroyed." In December 1934 a process server of the Nye committee got from Fokker's agent a file of papers relating to the Roosevelt contract.

Although this tale was documented with photostats of letters and papers, some of them bearing Elliott's purported signature, the daily press regarded it as so "hot" that no paper save the rabidly Republican New York Sun dared to report it at first. Meanwhile newshawks in Washington were hounding Senator Nye for confirmation. To answer charges that the Munitions Committee was concealing facts simply because they touched the President's son, Chairman Nye grudgingly made public a deposition his Committee had obtained in September 1935 from Anthony Fokker. Excerpts:

"Questioned concerning why he signed an agreement which provided for such a large commission, that is $500,000, to Mr. Roosevelt and $500,000 to himself upon the completion of the sale, Mr. Fokker explained that he had not felt that the prices which it was proposed to charge the Russians for these 50 military planes were at all reasonable; in fact, he had thought them notably excessive, but that he had been persuaded by Mr. Roosevelt and Mr. Roosevelt's associate, Mr. Stratton, that Mr. Roosevelt had enough influence with the Import and Export Bank and the Russian purchasing commission then in the country to swing the deal at that excessive price. . . .

"Mr. Fokker stated that before the agreement with Mr. Elliott Roosevelt had been signed, he had desired Mr. Elliott Roosevelt to make a trip abroad with Mr. Fokker to attempt to sell airplanes to various governments, counting on the willingness of high foreign officials to receive Mr. Roosevelt as the son of the American President.

"In the course of taking the deposition, Mr. Carter Tiffany, in Mr. Fokker's presence, stated that Mr. H. A. Reed had reported to Mr. Tiffany that before the contract was signed with Mr. Fokker Mr. Elliott Roosevelt had telephoned the President of the United States from California concerning the arrangement to travel abroad as Mr. Fokker's agent, and gave the President the main details of his proposed contract with Mr. Fokker, and had been told by the President that he had objection to Mr. Elliott Roosevelt's traveling abroad in this connection, but had approved the contract with Mr. Fokker. Mr. Fokker stated that he had not been told the details himself."

With his political conscience possibly pricking him as this story of the President and his son began to spread through the Republican press. Senator Nye last week tried to put himself right with the White House thus : "My whole purpose in making the Fokker affidavit available was to demonstrate the fact, that, after all, nothing ever came of the tie-up and that there was no pressure on the committee from any source to prevent the development of any part of the story. . . . Since no sales were made, it is obvious that the President's son did nothing illegal, and so far as the Munitions Committee is concerned the incident is closed." In California Mr. Stratton publicly declared that he had received the $5,000 for expenses and had so reported it in his income tax returns.

Meantime, at the Oklahoma Biltmore Hotel in Oklahoma City Elliott Roosevelt was routed out of bed late at night to make indignant denials. His rebuttal: "I have never denied that I discussed with Fokker arrangements for selling planes to the Soviet Government, or that I even entered into a contract with Fokker.

"But the contract was canceled and returned to me. I never received a penny from Fokker for myself. I never acted for Fokker in any such sales. The contract, which subsequently was canceled, had provided specifically that I should not be requested by Fokker or any of his representatives to contact any representative of a European government or of the United States government.

"It is obvious that my father never had any part in my dealings with Fokker and I can see no reason why all of this should be brought out at this time, except a desire on the part of some one to besmirch the name of the President of the United States."

That the politics in this bit of Rooseveltian history were not wholly on the Republican side became evident later in the week when none other than Press-agent Charles Michelson of the Democratic National Committee released extracts from the purported contract to confirm Son Elliott's version of its terms.

Meantime Publisher Tichenor's Tale No. 2 was hardly touched by the press which presumably regarded it as too risky to print. This tale related that at the same time the other venture was going on, just prior to and after the cancelation of the airmail contracts, Elliott Roosevelt and Anthony Fokker had a scheme afoot, supposedly encouraged by the President, to form a great U. S. air transport combine, in which Elliott was to have received 5% of the stock for his efforts; that Herbert Reed went to Manhattan to discuss it with Basil O'Connor, the President's onetime law partner; that Elliott Roosevelt flew to Miami to see his father aboard the Nourmahal and thence to Washington where he told Reed at breakfast in the White House:

"Father thinks your plan is the soundest approach to the problem. Mother agrees. I talked the whole thing over with her last night. She remarked that the proper settlement of the air mail problem and full support of the Subsistence Homestead Projects should be the first order of business with the Administration."

Like the scheme to sell planes to Russia, Herbert Reed's project to gobble up, with the aid of Elliott Roosevelt, the air transport business of the U. S. just when it had been laid low by a White House order, eventually came to nothing.

Nevertheless Publisher Tichenor continued to think that he had a good political thing by the tail. To keep his two stories alive last week he released a telegram he had just received from Herbert Reed: "Elliott Roosevelt's denial ... is not surprising to me. He and his father will probably similarly deny having backed my plan for reorganization of the nation's air lines ... for which Elliott and his associates were to receive an interest estimated at $750,000 per year, because at the time we were dealing I was warned to expect such denials if there was any leak concerning our association. ... I paid that $5,000 cash to Elliott Roosevelt . . . and I still hold his receipt for the money."

When Franklin Roosevelt refused to take any public notice of his troublesome son's troubles, Publisher Tichenor commenced to heckle him by telegraph, demand that he break "the unusual silence in which you have taken refuge."

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