Pay Dirt

Senator Homer Ferguson's War Investigating subcommittee, digging into the wartime contracts of Millionaire Plane-builder Howard Hughes, had turned up some gaudy ore. It glittered with headline names, beautiful girls, fantastic expense accounts (TIME, Aug. 4). Last week, the committee went deep into one of the abandoned mine shafts of history, guided by big-time World War II administrators and brasshats and--somewhat unwillingly--by a Hollywood pressagent and a President's son. It found more ore.

Man of the Hour. In July 1942, the Germans were sweeping unchecked across Russia and Africa. Help from the U.S. was crippled by German submarines, which were knocking off up to 700,000 tons of shipping a month. It was a dark hour for the Allies, and the man of the hour was Henry Kaiser, the miracle shipbuilder and idea man from the west.

Pudgy Henry Kaiser, by his own testimony before the committee, had bustled into Washington with a hatful of ideas. One of them paid off. It was a fleet of baby flattops to extend U.S. air power across the Atlantic. As much as anything, his carriers broke the back of the U-boat campaign. Another Kaiser scheme was a fleet of 500 enormous cargo planes to broad-jump over the subs.

Miracle Man Kaiser had had a little more trouble selling that scheme. The Army & Navy were against it. They needed scarce materials and technicians for their standard combat and transport craft. Planemaker Grover Loening told committeemen how, as a representative of WPB, he looked over Kaiser's plan and reached the same conclusion as the military men. WPB's aviation experts figured Henry Kaiser didn't know an airplane from a Sherman tank and that his promise to get the first model into the air within 20 months only proved it.

But Kaiser had blustered his way to the top, where he convinced WPB Boss Donald Nelson of the worthiness of his idea. Nelson said go ahead, and RFC Chairman Jesse Jones produced the Government cash. Kaiser picked Howard Hughes as his partner in the venture. Witness Merrill C. Meigs, Hearst executive and senior consultant in WPB's aviation division, recalled with awe: "Kaiser is one of the world's greatest salesmen, in a class with Diamond Jim Brady and Bill Sunday."

Bluster & Ballyhoo. What these facts proved was that bluster and ballyhoo had been a big force in wartime Washington. The final super-cargo-plane contract turned out to be for only three 200-ton craft. Kaiser lost interest in the scheme and later bowed out, muttering darkly about a "mysterious kiss-off." With Hughes on his own, the contract shrank to one plane which has never yet flown.

There was no evidence of skulduggery. Builder Hughes had reportedly sunk $7,000,000 of his own cash into the project. The Government money involved was peanuts by wartime standards: $18 million. At worst it was just another wartime idea gone sour, at some cost in time, materials and manpower.

Mother Lode. Then the committee hit the mother lode. Major General Oliver Echols, wartime materiel chief of the A.A.F., set the committee on the track of another Hughes project: the high-speed XF-II photoreconnaissance plane, in which Planemaker Hughes had crashed a year ago. Whooping with delight, the committee learned that the XF-II had been urged on the Air Forces by none other than Colonel (later Brigadier General) Elliott Roosevelt.

This time the committee, in its questioning, plunged gleefully back to the summer of 1943. Colonel Roosevelt, home from duty as operations officer of a photoreconnaissance group in the Mediterranean, had been ordered by the A.A.F.'s General Henry H. Arnold to recommend a new plane to replace the makeshift, reconverted P-38s and B-17s. (Why "Hap" Arnold picked Newcomer Roosevelt to do this job was not made clear.) Over the violent objections of General Echols and his boss, Barney Giles, chief of air staff, Elliott Roosevelt had insisted on the XF-II. "Hap" Arnold put through a $50 million contract for 101 of them, although later he scaled it down to three trial models for $22 million.

Chairman Ferguson promptly summoned Hughes's pressagent, John Meyer, the man with the inexhaustible bank account and all the girl friends. Chairman Ferguson proceeded with loving caution.

It was late in the afternoon when Johnny arrived in the committee room, and he was still groggy from lack of sleep after his flying trip back from France. He was on the stand only 15 minutes the first day, just long enough to admit he had known Elliott Roosevelt. Then he went off to bed. Next day the lid blew off.

"So Charming." His bald pate shining under the committee's klieglights, rubber-faced Johnny Meyer said that he had indeed known Elliott Roosevelt more than somewhat. All the time Roosevelt had been out looking at planes, Hughes's Meyer had been at Elliott's elbow, pouring on the treatment. The night that the final Roosevelt recommendation went to Washington, Johnny had treated Elliott to the tune of $106.50 at Manhattan's swank night clubs.

Nothing was too good for a prospective buyer. Johnny had even introduced Elliott to Movie Actress Faye Emerson, had flown her East for a visit and had presented her with $132 worth of war-scarce nylons because she was "so charming." There were expensive weekends from Palm Springs to Washington. There were other favors too.

Johnny's expense accounts, which Hughes had always demanded and the committee had seized, were spread as evidence. After one dinner for Elliott, Johnny had meticulously jotted down the item of $200 as "presents for four girls." There was another cryptic notation of $50 for "girls at hotel (late)." From the summer of 1943 to the autumn of 1945, Meyer figured, he had spent the whopping sum of $5,083.79 on fun & games for Elliott Roosevelt and his friends. In December 1944, Elliott married Faye.

Nehemiah 6. All in all, Elliott and Johnny had gotten along fine together. Elliott brought Johnny right into the family. At election time in 1944, Johnny Meyer said he was invited up to Hyde Park for a visit. He had been invited to the White House twice, he added, the second time as one of the guests for President Franklin Roosevelt's funeral.

As the investigation proceeded, Howard Hughes in California exchanged long-range insults with Maine's Senator Owen Brewster, chairman of the full senatorial committee. Speaking as chief stockholder of T.W.A., Hughes proclaimed (in a series of signed articles in the Hearst papers) that the real reason behind the investigation was Hughes's refusal to accept an offer of merger with Brewster's good friend Juan Trippe of Pan-American. In Washington, Brewster promptly offered to waive congressional immunity and take the stand. He piously referred newsmen to Nehemiah 6* for his answer to Hughes.

There was still a little difficulty about getting Hughes himself to testify. While a deputy U.S. marshal prowled Los Angeles with a committee subpoena, Hughes announced defiantly from his weekend hideaway he would not appear until midweek.

But the committee hardly missed him. It had Elliott Roosevelt./- Seated before a standing-room-only crowd this week, he announced that he had fought against the orders which brought him back to the U.S., that he had never even heard of the XF-II until "Hap" Arnold put him on to it. As for Johnny Meyer's expense accounts, they were "very largely inaccurate"; he had not even been in the U.S. for several of the shindigs Meyer said he had attended. Said Roosevelt: "If it is true that for the price of entertainment I made recommendations which would have in any way endangered the lives of the men under me . . . that fact should be made known to the public."

No one had suggested that. But it was hard to remove the gamy odor of Johnny Meyer's lavish attentiveness, which Elliott had still not completely explained. This week the committee had a lot more to ask Elliott before it was ready for Hughes.

* As summarized by the American Bible Society: "Sanballat practiseth by craft, by rumors, by hired prophecies, to terrify Nehemiah. The work is finished to the terror of the enemies."

/- At LaGuardia Field, another Roosevelt was asked by newsmen if he was going to Washington. His reply: "I'm Franklin."

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