Tennessee Threat (Cont'd)

When RFChairman Jesse Holman Jones sold $250,000 worth of Nashville Tennessean bonds to Banker Paul Maclin Davis few weeks ago, the deal was loudly decried as a threat to the freedom of the press by Publisher James Hammond of the Memphis Commercial Appeal, who was anxious to have the bonds himself (TIME, Oct. 21). Chairman Jones chose to ignore Publisher Hammond's hoots until last week when he revealed that Banker Davis had bought the bonds at a price $50,000 higher than that offered by the Memphis publisher. Hot-headed Publisher Hammond promptly wired Chairman Jones that he was in effect a liar. Excerpt :

"The statement issued by you . . . is contrary to the facts. The bonds in question were purchased by me on April 18, 1935, from Harry Thompson, liquidator of the Canal Bank & Trust Co. of New Orleans. . . The purchase price agreed to by Mr. Thompson and me [$200,000] represented the amount of Mr. Thompson's investment in the bonds. On June 4, without explanation, the RFC, which held the bonds as collateral, rejected Mr. Thompson's application for permission to sell the bonds to me. . . . On Oct. 8, when your spokesman in Washington was confronted with a Louisiana court order which exposed the [Davis] deal, you announced by telephone from Texas that the deal had in fact taken place. . . . At that time your spokesman in Washington said Mr. Davis had agreed to pay $200,000 for the bonds. Now you tell us that Mr. Davis is going to pay $250,000 for the bonds. . . The American Press and the American people have a right to know whether, through you, the American Government is going to muzzle editors and publishers by use of public funds. . . ."

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