Business: The Peanut Scandal

"This will make the Dixon-Yates deal look like peanuts," cried Massachusetts' Democratic Representative John W. McCormack. What Floor Leader McCormack was shouting about were Air Force contracts to pay $240 million yearly to American Telephone & Telegraph Co. and its manufacturing company. Western Electric, to cover the cost of building and operating a nationwide telephone circuit for the U.S. air defense system. Congress had not been informed of the "secret" deal, said McCormack, and after the contracts were signed. Comptroller General Joseph Campbell refused to approve them.

On closer investigation, McCormack seemed to be talking through his political hat. The Air Force...

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