WAR INDUSTRY

Wairarapa Times-Age, 10 April 1942, Page 4

WAR INDUSTRY

CHARGE OF CORRUPTION ON HUGE SCALE INVOLVING GOVERNMENT CORPORATION. MADE BY AMERICAN SENATOR. (By Telegraph—Press Association —Copyright) (Received This Day, 1.0 p.m.) WASHINGTON, April 9. Senator Bunker, in the Senate, said an agreement between the Defence Plant Corporation and Basic Magnesium Inc., for the construction of a 63 million dollar magnesite refinery at Las Vega “is so sinister as to indicate that some officials of our Government are guilty of malfeasance.” Senator Bunker demanded a searching investigation and said that if the agreement complained of reflects a cross-section of the Defence Plant Corporation’s conduct, “I can come to only one conclusion —vze are tolerating the existence of a Government agency that is so corrupt that it would make profiteering in the last war look like petty larceny by comparison.” Senator Bunker said 45 per cent of the stock of Basic Magnesium Inc., was owned by Magnesium Elecktron Ltd., England. He added that the English company had obtained that interest by agreeing to furnish a magnesium refining process it obtained under an agreement with I. G. Farben Industrie. Germany. Senator Bunker asserted that neither company—the American Basic Magnesium Inc. nor the English Magnesium Elecktron Ltd. —had sufficient assets or was sufficiently financially responsible to warrant such a large extension of credit on a sound business basis. Senator Bunker added that the terms of the Defence Plant Corporation agreement provided for the payment to Basic Magnesium Inc. of a million dollars in case the plant sold to another company, 300,000 dollars supervising the construction, a 280,000 dollars yearly royalty on ore taken from the public Domain and the company claimed 560,000 dollars for management and operation, a total of 2,140,000 dollars, all on a total capital investment by the company not exceeding 50,000 dollars.