HIGH TREASON The Plot Against the People by Albert E. Kahn — BOOK 4 — THE NEW INQUISITION. Chapter XIII — DEATH OF THE NEW DEAL — 3. Missouri Gang

HIGH TREASON The Plot Against the People by Albert E. Kahn

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3. Missouri Gang

1952: Maj Gen Harry H Vaughan with Harry Truman

The Missouri Gang was composed of old cronies of President Truman and buddies who had served with him in the First World War. They formed what soon came to be known as the President’s “kitchen cabinet.” *

* A one-time haberdasher in Independence, Missouri, whose business had failed in the early 1920’s, Harry S. Truman had become involved in politics as a protege of the notorious, corrupt Pendergast machine in Missouri. Boss Tom Pendergast obtained a county judgeship for Truman in 1922 and then backed Truman’s election to the Senate in 1934, declaring he wanted “his own emissary” in the Senate.

During the following years, Truman maintained close connections with Pendergast and his political machine. When Pendergast was found guilty of tax evasion in 1939 and sent to jail, Truman remained a staunch supporter of his former political mentor. Later, as President, Truman removed from office the U.S. district attorney who had prosecuted Pendergast.

Truman’s record in the Senate was undistinguished until in 1941 he was appointed chairman of the Senate Committee Investigating National Defense. Largely through the work of capable staff members, this committee achieved considerable prominence.

In 1944, Truman was selected at the Democratic National Convention as a compromise candidate for the vice-presidency, in order to prevent the bolting of the Southern Democrats and rightwingers who opposed the re-nomination of Henry A. Wallace as Roosevelt’s running mate.

One of the most influential members of the Missouri Gang was Harry H. Vaughan, a burly coarse-humored former reserve corps colonel who had been Truman’s secretary in the Senate. Truman and Vaughan had been close friends since the First World War, when both had served as officers in artillery batteries from Missouri. Immediately upon Truman’s inauguration, Vaughan became the President’s military aide and shortly afterwards was promoted to Major General. General Vaughan soon had his hands in the affairs of practically every important government agency and was using his newly acquired influence to benefit various acquaintances. “I’m considered in many circles to be very unethical, and I’m sure I will continue to be,” the General pubUcly replied to critics of his conduct. “There are only two people I have to please —Mr. Truman and Mrs. Vaughan. As long as I please them, I’m satisfied.” *

* In the summer of 1949, acting on disclosures by the New York Herald Tribune a Senate Investigations Subcommittee began hearings on iive percent “kickbacks” to leading officials for the awarding of government contracts. The hearings revealed that one of the central figures in such affairs was Major General Harry H. Vaughan.

In league with John Maragon, another personal friend of the President, and with Col. James V. Hunt, a former War Assets Administration consultant, Vaughan had arranged for the release of rationed building materials for race track construction, obtained special passports to Europe for a perfume manufacturer, and had directed Army contracts to firms for which Maragon was the Washington representative.

In one transaction, Vaughan had received gratis seven deep-freezer units, which he presented to leading Washington personalities, including Mrs. Truman and Supreme Court Justice Vinson.

The New York Herald Tribune editorialized: “. . . the Washington aroma rises from . . . cronyism, the low tone of performance in public office, the apparent moral indifference. Everything is on a practical basis, resolved to the material simplicity of seeing the right party. From matchbooks and deep-freeze to racetracks and Army promotions, the guiding motivations are the same . . . This nation needs relief from intellectual cheapness in the capital.”

Another of the Missouri Gang was James K. Vardaman, Jr., son of the late Senator James K. Vardaman who during World War I had led the fight for a Jim Crow policy in U. S. Government agencies. Like Vaughan, Vardaman had been an artillery officer in the Great War and was an old friend of Truman. A former St. Louis banker and shoe manufacturer, Vardaman had long had a hankering for the life of a sailor and as a young man had sought, unsuccessfully, to qualify for entrance to the Annapolis Naval Academy. President Truman appointed Vardaman as his naval aide with the rank of Commodore. Subsequently made a Governor of the Federal Reserve Board Vardaman told businessmen, as Time put it, “what they like to hear.”

Two other members of the Missouri Gang and “kitchen cabinet” were John W. Snyder and Dr. Wallace H. Graham, both personal friends of the President.

Nicknamed “Donald Duck” by Washington newsmen because of his waddling gait, John Snyder, a former artillery officer and St. Louis banker, was appointed Director of the Office of War Mobilization and Reconversion in July 1945. On taking office Snyder quickly rescinded the order limiting the use of building materials to priority housing and began lifting wartime controls in rapid succession. In June 1946 Snyder was appointed Secretary of the Treasury.

Dr. Wallace Graham, a thirty-five year old doctor from Kansas City, Missouri, was brought into the White House as Truman’s personal physician and appointed Brigadier General. In December 1947, it was disclosed that Dr. Graham was among those speculating on the market in the spiraling prices of grain. Despite this disclosure, the doctor stayed on as the President’s physician . . .

There were several individuals who were accepted in the comradery of the Missouri Gang, even though they themselves were not natives of Truman’s home state. By far the most important of them was the Mississippian, George E. Allen.

A fat hail-fellow-well-met with a rubbery face, George Allen had been one of Truman’s most ardent boosters during the 1944 Democratic National Convention and had accompanied Truman on his subsequent campaign tour. As soon as Allen learned of Roosevelt’s death he had, as he himself later related, hurried to the White House “as fast as possible” to join Truman.

Although Allen at first held no official government post, Time reported on January 7, 1946:

. . no one . . . sees more of the President. No one … is a more intimate confidant. George Allen . . . has a fund of funny stories which HarryTruman likes to hear . . . When Harry Truman takes an afternoon dip in the White House pool, Allen usually splashes around with him . . .

Few Truman statements or speeches reach the mimeograph machine without Allen’s O.K. . . . Allen has been consulted more and more on appointments to important posts.

Made Director of the Reconstruction Finance Corporation in February 1946, Allen quipped, “The RFC is so beautifully organized that even a fellow like me can’t do it any harm.”

In Washington circles, Allen was known as the “court jester.” His actual role was somewhat less innocuous . . .

Besides being Truman’s unofficial adviser, George Allen was a director in the Consolidated Vultee Aircraft Corporation, the Republic Steel Corporation, the General Aniline and Film Corporation — I.G. Farben affiliate — the Hugo Stinnes Corporation and approximately a dozen other giant corporations, many with large holdings throughout Europe and Asia.

In addition, Allen was intimately associated with Victor Emanuel, an enigmatic Wall Street figure who headed the banking firm of Emanuel & Co., had gained control of the Standard Gas and Aviation Corporation with the backing of the J. Henry Schroeder banking house, and maintained close ties with I. G. Farbenindustrie and other members of the international cartel ring. . . .

In October 1946, George E. Allen was made head of the United States Economic Mission to Germany.

On occasion. President Truman’s nominations for important Government posts involved such obvious potential scaifdal that the Senate balked at their endorsement. One such case concerned the California oil magnate, Edwin W. Pauley.

President of the Petroleum Corporation of Los Angeles and other California oil companies, and founder of the People’s Bank of California, Edwin Pauley— like George Allen— had staunchly supported Truman for the vice-presidential nomination. “We’re not nominating the Vice President,” Pauley assured friends. “We’re nominating the next President.”

Fourteen days after Roosevelt’s death, Pauley was named chairman of the U. S. delegation to the Allied Reparations Commission, and on January 18, 1946, President Truman nominated Pauley for the post of Undersecretary of the Navy . . .

Two weeks later the Senate Naval Committee opened hearings in Washington on Pauley’s nomination as Undersecretary of the Navy.

When Pauley appeared before the Committee, Senator Owen Brewster said to the oil tycoon, “I think we ought to have an idea of your sense of proprieties. Is it proper for you to sell oil to any department of the government if you are Undersecretary of the Navy?”

“There is no legal reason why not,” replied Pauley.

Senator Charles Tobey snapped, “My mind goes back to the infamous Teapot Dome investigations!”

Among those called to testify before the Senate Naval Committee was Secretary of the Interior Harold Ickes. Shortly before he was scheduled to appear at the hearings, Ickes was privately advised by President Truman: “You must tell the truth, of course. But be as gentle as you can with Ed Pauley . . .”

The forthright Secretary of the Interior, who was one of the few prominent New Dealers remaining in the Government, proved to be far from “gentle” with Pauley. Referring to a diary he had kept while in office, Ickes told the Senate Committee that on February 2, 1945, Pauley had pointedly mentioned that he had collected $500,000 in contributions toward the 1944 Presidential campaign and that $300,000 of this sum came from California oil interests. “Mr. Pauley,” Ickes had recorded in his diary, “thought it would be a great mistake to disturb those interests.”

Ickes also testified how on the train returning to Washington from Hyde Park after Roosevelt’s funeral, he had chanced upon Democratic National Committee Chairman Robert Hannegan, Truman’s secretary Harry Vaughan and Edwin Pauley huddled in quiet conversation. “All those mentioned,” related Ickes, “drifted away, except Pauley, and he had the hardihood to turn to me and ask me what I proposed to do about offshore oil …”*

* For some time Pauley, together with other leading oil men on the West Coast, had been endeavoring to gain control of the tidelands oil reserves off the coast of California. These oil reserves— which were believed by experts to be the largest undeveloped source of oil in the United States— had long been the issue of court proceedings to decide whether the federal government or the state of California had jurisdiction over the oil. The big oil companies were lobbying for state control, which would enable them to exploit the tidelands oil without government interference.

In the fall of 1945, the St. Louis Post-Dispatch, which had helped expose the notorious Teapot Dome scandal, disclosed that certain oil companies, including Pauley’s Petroleum Corporation, were already tapping the tidelands reserves by the use of wells dug on the beaches. These oil companies were paying the state $5,000,000 annually for the leasing of this property and were extracting a yearly amount of $20,000,000 worth of oil.

Following Ickes’ testimony, President Truman reaffirmed his confidence in Pauley. The President told reporters he thought that Ickes was “possibly mistaken.”

A week later, on February 13, Ickes announced he was resigning as Secretary of the Interior. “I don’t care to stay in an Administration,” he declared, “where I am expected to commit perjury for the sake of a party.”

Protests against Pauley’s appointment continued to mount on every side. Finally, on March 13, after repeatedly asserting that under no circumstances would he revoke the nomination, President Truman reluctantly withdrew Pauley’s name . . .

Soon afterwards, it was announced by the State Department that Edwin Pauley had been appointed chief of the American Reparations Commission and was about to leave for the Far East in order to prepare “a long-range peaceful economic plan.” A few days later, Pauley flew to Tokyo.

As Pauley departed on his mission, there ware those who recalled that before Pearl Harbor Pauley had sold large amounts of oil to Japan.