A Loan from the Grocer

Brigadier General Elliott Roosevelt, who is never out of the news--or hot water--very long, was in both last week. Splenetic Columnist Westbrook Pegler, an old Roosevelt-hater, pulled the cork on a long bottled-up story. There was much of Pegler foam & fume; there was also a muddy brew.

In 1939, young Elliott Roosevelt, who had dabbled in other business ventures, dreamed up a new idea: a "Transcontinental Broadcasting System" big enough to compete with NBC and CBS. Through mutual friends, he appealed to John Hartford, president of the Great Atlantic & Pacific Tea Co., for $200,000 to help finance his radio ventures. Hartford met him, lent him the money, accepting Elliott's six months' note. As collateral, he took something which banks would not accept--shares of stock in some small Texas radio stations (how many shares Hartford could not remember offhand).

Elliott went back to his TBS, bought $75,000 worth of its stock. Hartford went back to his groceries and his worries over an anti-chain-store law which Representative Wright Patman of Texas was trying to push through Congress. If passed, the law would have cost the A. & P. many millions a year.

End of a Dream. In the words of Caruthers Ewing, Hartford's attorney, the situation "rocked along for a while." After several months of confused dickering, Elliott's TBS blew up. It was dumped into receivership.

As owner of 4,000 shares of TBS stock, in February 1941 Elliott filed a claim with the receivers and collected $33,438. A year later, Texas' Jesse Jones, then Secretary of Commerce, called Lawyer Ewing to tell him that (according to Ewing) "the Roosevelt family" wished to settle Elliott's debt. Lawyer Ewing turned over Elliott's note and collateral and Jones gave Ewing a cashier's check for $4,000. Said Ewing: "The whole thing was closed."

Hartford wrote off his loss ($196,000) on his 1942 income tax as a bad debt.

Warm Week. But the whole thing opened again with a bang with Columnist Pegler's disclosures. The almost forgotten rearguard action which A. & P. has been fighting with the U.S. Government became front-page news again. Last week A. & P. and its public relations firm of Carl Byoir & Associates were sweating through a federal trial in Danville, Ill., charged with violation of the Sherman Antitrust Act. John Hartford, home in Valhalla, N.Y., sweated through a golf game, spluttered: "I'll have to talk to my lawyer."

Congressmen wanted a lot of things explained. One thing which needed explaining: why Hartford had dished out $200,000 to Elliott Roosevelt, whom he had never met before. With his sights on Brigadier General Roosevelt, Pegler suggested: "Hartford had a profound respect for the office of President of the U.S. and may have thought it was an honor to be asked to assist the son of a President." With its sights on "all concerned," the Washington Post commented acidly: "The precise nature of Mr. Hartford's interest in making the loan is open to serious question."

This file is automatically generated by a robot program, so reader's discretion is required.