Canal Commercial Trust & Savings Bank (New Orleans, LA)

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RFC officials also hint that Hammond, a former executive of the Hearst newspapers, has enlisted the aid of his former employers in raising a hue and cry over the transaction which, according to the RFC, was entirely normal.

The RFC acquired the $250,000 bonds of the Tennesseean Publishing company, which controls two newspapers, through a loan which it had made to the Canal Bank and Trust company, New Orleans. The bank put up the bonds as a part of the collateral for the loan.

The Canal bank suspended and the RFC became the technical owner of the bonds. Both Hammond and Davis made an offer for them; Hammond's bid of $200,000 came first. Davis, whose American National bank, Nashville, already owned $250,000 worth of the publishing company's bonds, followed with a bid of $250,000. Whether Davis knew of Hammond's bid is not determined.

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Davis To Pay Par for Bonds, Jones Declares

He Bid $50,000 More Than James Hammond, Says R. F. C.

Washington, Oct. 31—(AP)—The R. F. C. is to receive par for the $250,000 worth of bonds of the Tennessee Publishing Company sold to Paul M. Davis, president of the American National Bank of Nashville.

Jesse H. Jones, chairman, said today this was $50,000 more than offered by James Hammond, publisher of the Memphis, Tenn., Commercial Appeal. Hammond has objected to the sale to Davis.

The Tennessee Publishing Company publishes the Nashville Tennessean, and Evening Tennessean, which are in receivership.

The bonds were purchased by the R. F. C. through the Federal Court at New Orleans for $200,000.

Jones said the Canal Bank and Trust Company of New Orleans, which also is in receivership and from which the bonds were purchased, will receive credit for the additional sum.

Jones issued the following statement:

"In handling loans to closed banks it is the custom of the R. F. C. to require approval of our board when a proposed sale of collateral held to secure such loans is less than face. Consequently when the receiver for the Canal Bank and Trust Company of New Orleans, in receivership, submitted a proposal to sell $250,000 par value bonds of the Tennessee Publishing Company, publisher of the Nashville Tennessean (also in receivership) to Mr. James Hammond at 80 per cent of their face of $200,000 we inquired of Mr. Paul Davis, president of the American National Bank at Nashville which holds $210,000 of the Tennessee Publishing Company bonds, there being a total of such bonds outstanding of $750,000, if he thought a better price could be obtained.

"Mr. Davis offered par for the bonds which was $50,000 more than Mr. Hammond's offer and of course we accepted the highest offer and agreed to sell the bonds to Mr. Davis.

"Since both offers were on longtime credit and the bank receiver was willing to sell at $200,000 on credit we offered to accept the bonds from the receiver at $200,000 in part payment of the bank's indebtedness to the R. F. C.

"When Mr. Davis' note is paid we will give the Canal Bank credit for the excess over $200,000 and interest.

"While the R. F. C. under the law can make loans to newspapers, our directors have thought we should not do so and we have made no newspaper loans."

Jones said the Holston-Union National Bank of Knoxville, which is in receivership, owes $28,000 of Tennessean bonds and that the remainder of the issue is held by a half dozen Nashville people.

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TENNESSEAN BONDS BRING PAR VALUE

RFC Chairman Says Paul Davis Outbid Memphis Publisher.

WASHINGTON, Oct. 31.—(AP)—The RFC is to receive par for the $250,000 worth of bonds of the Tennessee Publishing Company sold to Paul Davis, president of the American National bank of Nashville.

Jesse H. Jones, chairman, said today this was $50,000 more than offered by James Hammond, publisher of the Memphis, Tennessee, Commercial Appeal. Hammond has objected to the sale to Davis.

The Tennessee Publishing Company publishes the Nashville Tennessean, which is in receivership.

The bonds were purchased by the RFC through the federal court at New Orleans for $200,000.

Jones said the Canal Bank and Trust Company of New Orleans which also is in receivership and from which the bonds were purchased, will receive credit for the additional sum.

Jones issued the following statement:

"In handling loans to closed banks it is the custom of the RFC to require approval of our board when a proposed sale of collateral held to secure such loans is for less than face. Consequently when the receiver for the Canal Bank and Trust Company of New Orleans, in receivership, submitted a proposal to sell $250,000 par value bonds of the Tennessee Publishing Company, publisher of The Nashville Tennessean (also in receivership), to Mr. James Hammond at 80 per cent of their face of $200,000 we inquired of Mr. Paul Davis, president of the American National Bank at Nashville which holds $210,000 of the Tennessee Publishing Company bonds, there being a total of such bonds outstanding of $750,000, if he thought a better price could be obtained.

"Mr. Davis offered par for the bonds which was $50,000 more than Mr. Hammond's offer and of course we accepted the highest offer and agreed to sell the bonds to Mr. Davis.

"Since both offers were on longtime credit and the bank receiver was willing to sell at $200,000 on credit we offered to accept the bonds from the receiver at $200,000 in part payment of the bank's indebtedness to the RFC.

"When Mr. Davis' note is paid we will give the Canal bank credit for the excess over $200,000 and interest.

"While the RFC under the law can make loans to newspapers our directors have thought we should not do so and we have made no newspaper loans."

Jones said the Holston National Bank of Knoxville, which is in receivership, owns 28,000 of Tennessean bonds and that the remainder of the issue is held by a half dozen Nashville people.

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from which the bonds were purchased will receive credit for the additional sum.

Jones issued the following statement:

"In handling loans to closed banks it is the custom of the RFC to require approval of our board when a proposed sale of collateral held to secure such loans is for less than face. Consequently when the receiver for the Canal Bank and Trust company of New Orleans, in receivership submitted a proposal to sell $250,000 par value bonds of the Tennessee Publishing company, published of The Nashville Tennessean (also in receivership), to Mr. Davis offered par for the bonds which was $50,000 more than Mr. Hammond's offer and of course we accepted the highest offer and agreed to sell the bonds to Mr. Davis.

"Since both offers were on longtime credit and the bank receiver was willing to sell at $200,000 on credit we offered to accept the bonds from the receiver at $200,000 in part payment of the bank's indebtedness to the RFC.

"When Mr. Davis' note is paid we will give the Canal bank credit for the excess over $200,000 and interest.

"While the RFC under the law

First Flood of Literature

The first great flood of literature for the masses was the "chapbooks," which were sold from door to door by chapmen, or peddlers, in England, Scotland and the American colonies during the Eighteenth century. These cheap little pamphlets, which covered a wide variety of popular subjects, were eagerly bought by the common people, who could not afford or understand the expensive and erudite books and magazines of that time—Collier's Weekly.

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SAYS DAVIS BID HIGHER

(Continued From Page One)

it is the custom of the RFC to require approval of our board when a proposed sale of collateral held to secure such loans is for less than face. Consequently when the receiver for the Canal Bank & Trust Company of New Orleans, in receivership, submitted a proposal to sell $250,000 par value bonds of the Tennessee Publishing Company, publisher of the Nashville Tennessean (also in receivership) to Col. James Hammond at 80 per cent of their face of $200,000 we inquired of Paul Davis, president of the American National Bank at Nashville which holds $210,000 of the Tennessee Publishing Company bonds, there being a total of such bonds outstanding of $750,000, if he thought a better price could be obtained.

"Mr. Davis offered par for the bonds which was $50,000 more than Colonel Hammond's offer and of course we accepted the highest offer and agreed to sell the bonds to Mr. Davis.

"Since both offers were on longtime credit and the bank receiver was willing to sell at $200,000 on credit we offered to accept the bonds from the receiver at $200,000 in part payment of the bank's indebtedness to the RFC.

"When Mr. Davis' note is paid we will give the Canal Bank credit for the excess over $200,000 and interest.

"While the RFC under the law can make loans to newspapers our directors have thought we should not do so and we have made no newspaper loans.

Jones said the Holston National Bank of Knoxville, which is in receivership, owns $28,000 of Tennessean bonds and that the remainder of the issue is held by a half dozen Nashville people.

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"No Political Ax to Grind," Says Hammond

HOT SPRINGS, Ark., Oct. 31.—Col. James Hammond, publisher of The Commercial Appeal, today made the following statement with reference to the RFC announcement that $250,000 par value bonds of the Tennessee Publishing Company were sold for par to Paul Davis, president of the American National Bank of Nashville, Tenn.

"Mr. Jesse Jones and the RFC have made several statements regarding the sale of the Nashville Tennessean bonds, no two of which agree. It is hoped that they will finally decide what their story is and stick to it.

"So far as my connection with the matter is concerned there is nothing to conceal. Perhaps I am more fortunately situated, in that I have no political ax to grind, no political friends to reward, and am confronted with no necessity to cover up my tracks.

"Had I understood in the beginning that the RFC, a governmental agency, was disposed to use the vast power of public funds to compete with a free press, I would not have been interested. It was not my idea that the sale of the bonds to me would be regarded as a favor, with the implication that it should be discharged by political fidelity to Mr. Jones or any group of politicians.

"On April 18, Harry Thompson, liquidator of the Canal Bank & Trust Co., New Orleans, asked the RFC for consent to sell $250,000 par value of Tennessean bonds to me for $200,000, the amount the bank had originally loaned on the bonds.

"On June 4, Mr. Thompson said the RFC rejected the proposal without explanation. The bonds were up as collateral, which was not in default. There has never been any explanation as to why the liquidator was not permitted to sell the bonds for the amount of the loan and pay off the obligation.

Show RFC As Owner

"Early in June officials of the RFC started negotiations with Mr. Thompson to buy the bonds. On Sept. 20, Mr. Thompson sold the bonds to the RFC. The court records in Louisiana and Nashville, Tenn., show that the RFC still owns the bonds.

"On Oct. 8, the RFC announced that authorization had been given for the sale of the bonds to Paul Davis, president of the American National Bank of Nashville. According to the statement of Mr.

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DEFENDS DEAL ON TENNESSEAN

RFC Chairman Says Nashville Banker Offered $50,000 More Than Hammond.

Special To The News-Sentinel WASHINGTON, Nov. 1—Jesse Jones, chairman of the RFC, explained Thursday that $250,000 of bonds of the Nashville Tennessean were sold to Paul Davis, Nashville banker, because he offered $50,000 more than did James Hammond, publisher of the Memphis Commercial Appeal.

The transaction, bitterly criticised in several quarters, has inspired protests that the RFC was putting the Government into the newspaper business, as well as playing politics with newspaper properties.

Jones said that Hammond made the first offer by informing the Canal Bank and Trust Co. of New Orleans, holders of the bonds as collateral for a loan, that he would give 80 per cent of their value, of $200,000.

Consulted Davis' Brother Jones said he immediately consulted Paul Davis, brother of Ambassador Norman Davis, whose bank holds $210,000 of the Tennessean's bonds, as to whether "he thought a better price could be obtained."

The RFC held the bonds in question as part of the collateral put up by the Canal Bank for an RFC loan. Jones said that Davis offered par, or $250,000 for the securities and "of course we accepted the highest offer."

"Since both offers were on longtime credit and the bank receiver was willing to sell at $200,000 on credit, we offered to accept the bonds from the receiver at $200,000 in part payment of the bank's indebtedness to the RFC.

"When Mr. Davis' note is paid, we will give the Canal Bank credit for the excess over $200,000 and interest."

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RFC CHIEF QUERIED ON NEWSPAPER DEAL

Memphis Publisher Wants to Know if Domination of Press is Aim.

USE OF U. S. FUNDS HIT

MEMPHIS, Tenn. — (AP) — Col. James Hammond, publisher of the Memphis Commercial Appeal, asked Jesse Jones, chairman of the RFC, in a telegram Friday "whether through you the American government is going to muzzle editors and publishers by use of public funds".

Col. Hammond referred to the sale of bonds of the Tennessee Publishing Co., Nashville, publishers of the Nashville Tennessean, by the RFC to Paul Davis, president of the American National Bank of Nashville, and a brother of Norman H. Davis, President Roosevelt's "ambassador at large". Col. Hammond sent the telegram from Hot Springs, Ark.

Says Facts 'Obscured'. Hammond had sought to buy the bonds from the liquidator of the Canal Bank and Trust Co., New Orleans, early last summer, offering $200,000. The RFC announced this week that the bonds had been sold to Davis for par, $250,000.

Hammond charged that facts of the sale "have been obscured", declaring:

"The RFC has used funds of the United States government to finance the purchase of a newspaper.

"Until the bonds are paid for, if they ever are paid for, the United States government is in the newspaper business."

"If it is to be assumed that the bonds will be paid for by the designated purchaser," Hammond said, "the RFC through domination of his bank will be in a position to dictate the policies of his newspaper."

Exposed by Phone Call. Hammond declared that his offer to purchase last May was rejected "without explanation"; that the RFC purchased the bonds September 20, but that the purchase was denied by the RFC from Sept. 20 until October 8.

"On October 8," he continued, "when your spokesman in Washington was confronted with a Louisiana court order which exposed the deal you announced by telephone from Texas that the deal had in fact taken place and that the board of directors of the RFC had authorized sale of the bonds to Paul M. Davis * * *"

"You have never answered my inquiries concerning the ownership of the Knoxville, Tenn., Journal, which property is held by the Canal Bank & Trust Co. Am I to assume that your failure to give me an answer means that you want to dominate this newspaper as well as the Nashville Tennessean?

"The American press and the American people have a right to know whether through you the American government is going to muzzle editors and publishers by use of public funds."