THE CONGRESS: Murray Garsson’s Suckers

Many a U.S. businessman has wished that he was big enough to get in to see Elisha Walker in his official habitat: the austere offices of Wall Street’s famed international banking firm of Kuhn, Loeb & Co., of which he is senior partner. Stiff-starched Banker Walker is not an easy man to get at.

But Murray Garsson got in to see Mr. Walker.

Elisha Walker has long been accustomed to dealing in sums ending in six zeroes and with such titans of finance and industry as Harry F. Sinclair (oil), Frederick H. Prince (railroads), Eugene G. Grace (steel), Amadeo P. Giannini (banks), Joseph P. Kennedy (whiskey, real estate), and Bernard M. Baruch (investments and advice to Presidents).

But Murray Garsson (shady deals, racket connections, big-scaled bankruptcies) walked out of Mr. Walker’s office with $5,000 of his personal (not Kuhn, Loeb’s) cash. That was in April 1941.

Last week in Washington dignified Elisha Walker got in to see the Mead Committee, just under the wire of its recess for one month. He informed the war profits investigators that slick Murray Garsson had got the $5,000 on a note signed by Representative Andrew Jackson May, chairman of the House Military Affairs Committee; then both had reneged on paying off the loan.

It was no longer startling news that 56-year-old Murray Garsson and 71-year-old Andy May had been up to their eyeballs together in a sour business deal. The Meadmen had already developed plenty of evidence that Andy May was the busy mentor of the Garsson brothers’ nexus of paper-built munitions companies, that it was fairly common talk around the Gars-sons’ Washington office that packets of $1,000 and $3,000 were sent up The Hill to handy Andy (TIME, July 15 et seq.).

Capone & Colonels. But Elisha Walker’s public admission that he, too, had been made a sucker by Murray Garsson added another intriguing chapter to the story of the Garssons’ bumpy rise to riches and influence.

A Britain-born Brooklyn and Broadway character, Murray Garsson had been arrested half a dozen times for crimes ranging from plain robbery to evasion of corporation laws. His only conviction was for speeding (sentence suspended). He had been a pal of New York City’s gang kingpins Dutch Schultz and Owney Madden, was suspected of being their partner in illicit breweries. The FBI had Garsson down as suspect of arranging protection for big-time bootleggers.

A Jack-of-many-deals, he operated in real estate, films, aircraft promotion. Twice in nine years he put himself through the bankruptcy wringer for a loss to his creditors of more than $600,000. Yet he had been able to worm himself into Government jobs that opened up new fields for his operations.

He had good friends among Hollywood’s starmakers and he knew his wayaround Chicago’s underworld and how to get in to see Al Capone.* Finally, he got on thegood side of the chairman of the House Military Affairs Committee who could get him two major generals (Alden H. Waitt and William N. Porter) to gambol at his daughter’s wedding party, could get Army-Navy “E” awards for his munitions plants, and could give and carry orders that Garsson’s 27-year-old son, Joseph H. (“Bud”) Garsson, was to be taken care of and protected in the Army. Along this shadowy trail Murray Garson had:

¶ Teamed with his late brother George ‘also twice a bankrupt)* in a real estate leal that came under the scrutiny of a graft-hunting investigation in New York City. For $25,000 cash the Garssons got property that was soon condemned for park extension and bought by the city for $761,536.

¶ Got an appointment as a $1-a-year special assistant to Herbert Hoover’s Secretary of Labor William N. Doak (after a few months it turned into a $9,000 job). His sponsor: ex-Congressman Samuel Dickstein, now a New York City judge. Garsson’s chief interest: high-salaried alien cinema stars who might be proved to be in the country illegally. Among his interests: Gilbert Roland, Anna Sten, the Marquis Henri de la Falaise, Maureen O’Sullivan, John Farrow.

¶ Appointed himself an investigator of he Lindbergh kidnaping, working with two Brooklynites who, for a time, were Charles A. Lindbergh’s emissaries to the underworld.

¶ Got himself an appointment as an investigator for the House committee inquiring into corporate reorganizations and receiverships. His sponsor: Chicago’s Representative Adolph Sabath, now chairman of the House Rules Committee.* Thus Garsson put himself into a spot where he could choose to report on, or not to report on, receivers, bondholders’ committees, lawyers and others who profited at the expense of investors.

¶ Got himself into the good graces of Hollywood’s Joseph M. Schenck, who once lent him $130,000 worth of stock and, surprisingly enough, got it back.

Paper & Shells. But Murray Garsson’s main chance came with the war and with Brother Henry’s knowledge. Suave, well-tailored, capable brother Henry had a spotless record as a consulting engineer. His personal record was almost pure—he had been indicted and acquitted of a charge of taking a $5,000 bribe while working for the U.S. as an Internal Revenue agent; he had worked for a time with Murray on Congressman Sabath’s investigating committee.

But Henry Garsson is an impressive man. A Jack-of-many-callings, he uses the handle “Doctor” (a doctorate in law from St. Lawrence University) in front of his name. He has called himself an expert on reorganizations. He and Brother Murray, as it turns out, are also experts on organizing large companies out of nothing.

The Mead Committee has not brought out that Statesman Andy May had anything to do with the Garssons’ sudden blossoming as munitions magnates in early 1942. (The Walker loan incident indicates, however, that the May-Garsson tieup existed in early 1941.) It was an extraordinary beginning.

Dr. Henry used the letterhead of a reputable firm which employed him, represented on it to the War Department that he had a company and plant equipped to turn out 4.2-in. mortar shells. This company, the Erie Basin Metal Products Inc., did not then actually exist. But soon after Pearl Harbor the War Department gave Dr. Garsson’s nonmachined firm a whopping order for shells. Meantime Henry Garsson had found two men—Allen B. Gellman and Joseph Weiss of Chicago—who had factories and machines but no war contracts.

The Shell Game. They and the Garsson brothers formed a partnership. Soon the Government’s order was boosted to $2,900,000. The Garssons were in the shell game—with Gellman and Weiss providing the plants and the Government (by advance payments) the capital.

From there on the trail followed by the Meadmen was a maze of 16 interlocked companies whose assets were kited back and forth with the stroke of a pen. Up went the combine’s contracts—at war’s end they had got $78,000,000 worth of business out of the Government.

Up went the Garsson earnings. The Committee has traced more than $500,000 in fees and salaries to the brothers; Gellman and Weiss did even better.

Up went their influence over the Army’s Chemical Warfare Service. The Garsson companies got pretty much whatever they wanted—in manpower, in advances of funds, in contracts for 8-in. shells, mortars, other munitions, in about $1,000,000 of disputed overpayments. They had a powerful friend pressuring the generals and colonels. Bald Andy May made no bones about the fact that the Garssons were his warm friends.

The extraordinary story of the Garssons was far from complete. Murray Garsson, resting in Havana, would add nothing to it other than sobbing cries of “unfairness . . . persecution.” Henry Garsson, busy in Chicago, held hard to his constitutional rights against testifying. Andy May, back in his old Kentucky home, was reportedly a very sick man. To most U.S. citizens it was not so amazing that one high-placed man had engaged in deep connivance with the Garssons. The extraordinary thing about the unsavory mess was the fact that so many high-placed Army officers and Administration leaders had so easily fallen into it.

*Also among Garsson’s friends: an ex-convict named Benjamin FranklinFields, who had blossomed prosperously as a Washington public relations man. Fields was accused by Senator Hugh B. Mitchell, a Mead Committee memberas having offered him $5,000 (as a campaign contribution) to soft-pedal the Garsson case.

* In 1939 George Garsson was found dead in a Manhattan hotel room under circumstances that pointed to suicide. He had just lost a lot of money in a nightclub venture recommended by Murray Garsson.

*Said Congressman Sabath to the Mead Committee: “I found him to be a very capable fellow. Oh, he’s a wonder.”