Torpedo Torpedoed?

The many-armed U.S. Government last week was engaged in a tug-of-war with itself over Preston Tucker, designer of a rear-engined automobile named the Tucker 48 (once the Torpedo). The War Assets Administration had leased Tucker the $70 million surplus Chicago Dodge plant, world's largest. He had promised to have $15 million in cash on hand by July 1 to build cars.

Last week the Securities & Exchange Commission made it hard for Tucker to keep his promise. SEC refused to let Tucker sell $20,000,000 in common stock to finance his car. Said SEC: Tucker's stock-registration statement contained incomplete and false statements. False entries, said SEC, had been made in Tucker Corp. books to conceal payments of cash and promises of stock options to promoters. Tucker said that he could explain everything. This week SEC began a hearing to let him try.

The Tucker in Red. In the nine months that he had been in the Chicago plant, Tucker had displayed remarkable ability to get Government help. His car-making consisted in building one handmade Tucker (see cut) painted a fiery "Tucker red." WAA had leased the plant to Tucker after turning down an offer of $12 million from the Consolidated Grocers Corp. It also contracted to pay Tucker some $75,000 a month to pay a staff to look after the $100 million worth of Government tools and surplus equipment in the plant. In return, Tucker promised to pay $1,000,000 by Oct. 1, 1946, for two years' rent, and $2,400,000 a year thereafter. Then Tucker fought off Wilson Wyatt's attempt to take the plant away from Tucker and use it for Lustron Corp.'s prefabricated housebuilding (TIME, Nov. 11).

As down payment on the rent, he posted a $150,000 check with WAA. WAA phoned the bank, found that Tucker had about $3,000 on deposit. When Tucker pleaded for more time to raise the rent money, WAA obligingly returned his check and gave him an extension to March 1. When Tucker again failed to fulfill the contract, WAA gave him an extension to July 1. However, it insisted that he have at least $15 million on hand then.

Tucker could still float his stock, if he amended his registration to meet SEC's approval. But he had little time--unless WAA gave him another extension. There was little chance of that because Republican Senator Homer Ferguson, whose Michigan automakers regard Tucker as a wishful dreamer, had turned a probing eye on the whole deal. Ferguson said that he "assumed" the plant would revert to WAA if Tucker did not make good on July 1.

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