Sure Shot Boys

David Meriwether Milton, smart husband of John Davison Rockefeller Jr.'s daughter Abby, has been a very busy man the past fortnight. First he journeyed from Manhattan to Chicago to face sharp questioning by Congressman Adolph Joseph Sabath's investigating committee, which originally started out to investigate real estate bondholders' reorganizations. From Mr. Milton the committee wanted to know all about the acquisition of General American Life Insurance Co. by Southwestern Life Insurance Co. last spring (TIME, April 6).

What happened was that three Dallas lawyers put up a little of their own money, borrowed $2,400,000 from Southwestern Life, bought General American from Mr. Milton's Equity Corp., thereby gaining control of Southwestern Life with its own money--since General American controlled Southwestern. Mr. Milton was unable to satisfy the Committee that there had been no pressure applied by Equity Corp. to make Southwestern make the $2,400,000 loan. Equity's profit in the deal was $425,000. Of the excursion of Investment Truster Milton and his associates into General American, old Congressman Sabath snapped: "They were not speculators. They were sure shot boys." Cried Wisconsin's Congressman Thomas David Patrick O'Malley about apparent discrepancies in testimony: "I think there is perjury going on . . . and, by God, I'm going to get to the bottom of it."

Finished in Chicago for the time being, Mr. Milton last week went to Washington to explain to the Securities & Exchange Commission about the complicated maze of Equity Corp. Before going into the story of each of 44 companies which have been involved in the investment trust's activities, SEC Counsel David Schenker drew from Mr. Rockefeller's son-in-law the story of how he got into Equity Corp. For $41,000 cash and 19,000 shares of an inactive insurance stock, Mr. Milton and Ellery Huntington Jr. eventually acquired control of Equity, which managed companies with assets of $218,000,000. Mr. Milton's cash stake was $13,000.

First he and his associate bought control of Consolidated Funds Corp., an investment trust which controlled Oceanic Insurance Co., which owned a quarter of Equity Corp. Then Underwriters Equities, a trust controlled by Mr. Milton, sold $900,000 worth of insurance stocks to a company managed by Equity, and the proceeds were used to buy control of Equity. Thus, a $13,000 cash buy into Consolidated Funds plus Equity's own money put Mr. Milton into Equity. Said Lawyer Schenker: ''[It's] a Van Sweringen operation in the investment trust field." After detailing various operations of Equity Corp., Mr. Schenker drew from Mr. Milton testimony about the formation of Merton Shares, a Canadian corporation, asked him why he had gone to Canada to insure success in a U. S. transaction. Apologized Mr. Milton: "I don't know, it could perhaps have been done some other way. It was a continual headache."

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