Automaker Preston Tucker had known plenty of trouble, but none so serious as this. The Securities & Exchange Commission, which once before looked askance at the financial undercarriage of his snazzy, rear-engined automobile (TIME, July 7, 1947), was at him again. This time it took a dim view of his first annual report (deficit $5,651,208). The report, along with Tucker's stock registration statements, said SEC, "contained untrue statements of material facts and omitted to state material facts." SEC scrutinized everything from payments to officers to the very "nature of the business done and intended to be done."
Hard-pressed Preston Tucker had done his best to squirm out of a full-dress investigation. When SEC first asked for a quiet look at his records, he balked. Then the commission, still preserving a tactful silence in public, subpoenaed him to appear with his books. Tucker took his case to the newspapers and thus broke the news that SEC wanted to see what was going on in Tucker Corp. In full-page ads, with the air of a man whose patience is infinite, he said: "My associates and myself and the Tucker Corp. have been investigated time & again . . . Now once more we are being investigated." But he still refused to open his books.
When SEC carried the case to court, Tucker threw in the sponge. Last week he declared himself ready to open his books to the commission—but not without a final dramatic gesture. The records, said Tucker, "are as vital to the operation as machines along the production line. Tying up such records will make it impossible to continue operating." He laid off 1,100 workers, closed down the plant until the investigation was over. For once Tucker permitted himself a note of pessimism. If the plant remained closed for more than 60 days, he said, the "project . . . might collapse."
Automen wondered whether the lack of ledgers was the only stumbling block to production. Tucker claimed to have built 35 cars, but newsmen counted less than ten. The ruckus over the investigation sent Tucker stock skidding from a June high of 4¼ to 2⅛, and there was further trouble ahead. In New York stockholders charged that the company was headed for insolvency, asked the court to appoint a receiver.
*With Final Assembly Supervisor Kenneth Main.