sister's stock and paid her back her total investment of $10,000, plus 25 months' interest at 8 percent simple interest. I paid her $11,833.33 for the reason that I figured I was in a very speculative business and in the event that I lost her interest, I would at least have the feeling in my own heart that I had paid her back her money with 8 percent on it for the 25 months during which she had her investment there. Then I used that stock to sell at the same cost to my associates in business from time to time, always selling it to them at the then book value. That was on the general theory that if the factory manager, say, thus owning 6 percent stock interest, lost 6 cents with it, he would be more careful, that if the chief engineer, thus owning 6 percent stock interest, lost 6 cents with it, he would be more careful, and I admitted stockholders from our executives, perhaps 125 such, during the 18 years and 7 months that I managed the company. Mr. TOLAND. Are you through? Mr. FLEET. You asked my total investment. Then in 1936 it became necessary to double the size of the factory. The company didn't have the money, and therefore we had to put out a stock issue. We couldn't sell our common stock at a fair price, and so we put out a preferred stock issue and raised $1,200,000 and with that we doubled the factory at that time. I took $300,000 of that and paid par for it. I might say, too, that this company, Consolidated, is rather unique in that it has never paid or given any shares of stock to anybody on earth for anything other than par cash; no discounts to anybody, no bonus to me for starting the company, no bonus to anybody for what he knew. There is one more investment in the company. Consolidated bought during its 18 years and 7 months 10 other companies. In several cases it didn't acquire the corporate title of the company but bought either all the assets or certain selected assets. As a rule it paid for those purchases by stock; so we got the assets of those ten companies by paying for them in stock, this in addition to the $25,000 I founded the company on. $1,200,000 was put in for the preferred stock plus the assets of the ten other companies and that is all the money and all the assets that ever were put into Consolidated. Mr. TOLAND. Let me see if this is correct, Major. In 1923 you made an investment of $15,000. At that time the par value of one share of stock was $100. Is that right? Mr. FLEET. That is right. Mr. TOLAND. Then in 1930 to 1934, 2,000 shares of stock, new stock, were issued for each share of old stock. Isn't that right? Mr. FLEET. 1928. Mr. TOLAND. And the stock was changed from $100 par to no par value? Mr. FLEET. That is right. Mr. TOLAND. Then from 1934 to 1941, 2,000 shares of stock were issued for each share of the original stock, with the par value of the stock set at $1 in place of the nonpar value, is that right? Mr. FLEET. You had better state that again. I didn't quite understand it. Mr. TOLAND. In 1934 to 1941, during that period, 2,000 shares of stock were issued for each share of the original stock and the par value was set at $1 in place of no par value. Mr. FLEET. In 1928 we were forced to list our stock on one of the country's recognized exchanges. Since we had only 250 shares prior to that time, none of the country's recognized exchanges would list only 250 shares, so we therefore multiplied our shares by 2,000 for 1 and listed on the New York curb. The reason we listed on the New York curb was because another company had incorporated and taken the name "Consolidated Aircraft Corporation", our exact corporate name; we couldn't get it to let go of our name. Therefore the only way we could protect our name was to enjoin them first, but the courts wouldn't make the injunction permanent, so we had to list-beating them to it, so to speak-on one of the country's recognized exchanges. We did that on the New York curb. Mr. TOLAND. In October 1941 it was 4,000 shares, wasn't it, at no par value? Mr. FLEET. In 1941; $1 par value. Mr. TOLAND. Equivalent to one share of the original stock? Mr. FLEET. In 1941 we multiplied the number of shares that we had in the company by issuing two share for one. Mr. TOLAND. Now isn't it a fact, Major, that on your original investment of each $100 in this company in 1923, that on November 21, 1941, based upon the list price of the stock on the New York Stock Exchange, the actual value of each share of the original 100 no-par value stock of this company on that date was $84,000? November 21, 1941, prior to the sale of your stock? Mr. FLEET. You asked me whether or not that is a fact. I haven't figured it. Mr. TOLAND. We figured it and I would like for you to see if on the original investment you made in this company, for every $100 you didn't have an actual market value in November of 1941 of $84,000 for each $100 invested by you? Mr. FLEET. I might say to you and to the committee that in my opinion Consolidated Aircraft Corporation is the biggest success in aviation that has been made in the United States since it was organized, and I am very proud of that. The corporation declared in dividends, my money back, my original $25,000 back 318 times, and I sold out at 1,200 times, which together made 1,518 times, ignoring the $300,000 that I invested in the $1,200,000 issue of preferred stock. The CHAIRMAN. How much? Those figures sort of astound me. Tell that over again. Mr. FLEET. Well, sir, if I ignored the $300,000 which I invested in 1936 and considered only the initial investment, I got that back 318 times gross, and then I sold out what stock I had left on the basis of 1,200 times gross-but don't forget I paid over $2,400,000 in taxes. Mr. TOLAND. May I read this statement, Major, and if it is not correct, you check me. This is your income from Consolidated Aircraft Corporation from 1924 to 1941. In 1924 your salary was $10,000, is that right? Mr. FLEET. That is your sheet? Mr. TOLAND. Yes. You can check it against yours and I will find out how good my accountants are. In 1924 your salary was $10,000? Mr. FLEET. In 1923 for the first seven months of the company's history, my salary was at the rate of $10,000 a year, split between Consolidated and Gallaudet 50-50, and for that specific time was $2,916.67. Mr. TOLAND. In 1924? Mr. FLEET. $10,000. Mr. TOLAND. 1925, $10,505.08? Mr. FLEET. $10,000 salary, $500 bonus, and $5 Christmas present. Mr. TOLAND. Now, in 1926 your salary was $10,505.08? Mr. FLEET. Salary was $10,000, bonus $500, and $5 Christmas present. Mr. TOLAND. And $132,000 dividend on common stock? Is that right? Mr. FLEET. Yes. You skipped one dividend, however, if you want to put it in. You skipped the dividend in 1925. The CHAIRMAN. We can overlook that one? Mr. TOLAND. Did you get one in 1925? How much was it? Mr. TOLAND. In 1927 your salary went up to $15,505, without the 8 cents. Mr. FLEET. I might say the 8 cents is due to the fact that the check is issued every 2 weeks. I ignored that and gave you the salary which in 1927 was $15,000; there was a $500 bonus and a $5 Christmas present. Mr. TOLAND. And $214,500 dividends? Mr. FLEET. $213,250. Mr. TOLAND. 1928, $15,500? Mr. FLEET. $15,000 salary and $500 bonus, and $5 Christmas present. Mr. TOLAND. $231,000 dividend? Mr. FLEET. And $231,000 dividend. Mr. BATES. What was that Christmas present for, Major? Was it a little teaser or something? Mr. FLEET. It was the practice of the company, starting in 1925, in order to build up good will, to give a turkey to everybody on Christmas. We found, after doing this 2 years, because unmarried employees didn't want a turkey, we gave $5 instead. Mr. BATES (interposing). A sort of good-will offering? The CHAIRMAN. Being an old company, probably that is where Jack & Heintz got those ideas. Mr. FLEET. Jack & Heintz, according to the papers, gave quite substantial bonuses. Our corporation gave small annual bonuses for 5 years, and for many years we have given this Christmas present. Mr. TOLAND. Can we go ahead, Major, and finish this? Mr. FLEET. $2,300 was my total in annual bonuses-paid over 5 years. Mr. TOLAND. Major, suppose I read these through and you check me, and we will get rid of this. 1928, $15,500, $231,000 dividend; 1929, $18,255 salary. Mr. FLEET. $18,000 salary and $250 bonus, and $5 Christmas present. Mr. TOLAND. 1930, $18,035? Mr. FLEET. $18,000, $20 director's fee and $5 Christmas present. I don't show the other $10. Mr. TOLAND. In 1931, $16,166? Mr. FLEET. In 1931 it is $16,200, or a 10 percent reduction due to the hard times. Mr. TOLAND. 1932? Mr. FLEET. And $20 director's fee. Mr. TOLAND. 1932, $14,605? Mr. FLEET. $14,580, and $16 director's fee. Mr. TOLAND. 1933, $13,548? Mr. FLEET. In 1933 it was another 10 percent reduced, to $13,122, and $48 director's fees. Mr. TOLAND. What do you have for 1934? Mr. FLEET. $15,840. Mr. TOLAND. Any dividend? Mr. FLEET. No, sir. Just one minute-and director's fee, $48. Mr. TOLAND. 1935? Mr. FLEET. 1935, $15,840, and $32 director's fee. No dividends. Mr. TOLAND. What about 1936? Mr. FLEET. 1936, $15,840; $6,750 for dividends on preferred stock, and $16 director's fee. Mr. TOLAND. 1937? Mr. FLEET. 1937, salary $18,000, then the Christmas bonus was resumed. We skipped it for 6 years. The dividend on common stock was $80,020.50, and on preferred stock $18,000. Mr. TOLAND. $98,000 altogether? Mr. FLEET. $116,202.50 altogether, including salary. Mr. TOLAND. 1938? Mr. FLEET. 1938-salary, $19,300. Mr. TOLAND. And the dividends? Mr. FLEET. Christmus bonus $5, dividend $164,241; preferred dividend $18,007.50, and $20 director's fee. Mr. TOLAND. 1939, Major? Mr. FLEET. Salary, $20,000; $5 bonus, no dividend. We had to skip a dividend then; $18,030 dividend on the preferred stock, and no director's fees. Mr. TOLAND. 1940? Mr. FLEET. 1940, $35,937.50. That is the actual amount drawn. It was a salary of $36,000, $5 bonus, dividend $324,782, preferred dividend $18,030. Mr. TOLAND. 1941? Mr. FLEET. 1941, salary $62,500, bonus $5, common dividend $672,104, preferred dividend $9,015. Mr. TOLAND. Now, Major, will you place that in the record? (Document entitled "Major Fleet's Income from Consolidated Aircraft Corporation," prepared by accountants of the investigating committee's staff, was received in evidence, marked "Exhibit No. 171" and is filed with the committee.) (Document entitled "Total Remuneration from Consolidated Aircraft Corporation to R. H. Fleet," furnished by R. H. Fleet, was received in evidence, marked "Exhibit No. 172" and is printed in the appendix of this volume.) Mr. TOLAND. Isn't it a fact that in the fall of 1941 you had acquired considerable stock; namely, 347,622 shares, which you sold for $8,647,097.25? Is that correct? Mr. FLEET. Just let me get my figures. How many shares? Mr. FLEET. Yes; that is correct. Mr. TOLAND. And you received-what did you receive in the sale to the Vultee interests for your stock? Was it $8,647,000? Mr. FLEET. Wait until I add it. It is in two columns. $8,647,097.25? Mr. TOLAND. Right. Now you are employed by the company as a consultant, are you not, and you receive compensation? Mr. FLEET. $60,000 per year. Mr. TOLAND. What is your present holding in the company? Mr. TOLAND. No stock at all? Mr. FLEET. No stock. I want to invite your attention to one thing on the statement I just placed in the record. My average annual salary for the 18 years and 7 months was $18,622. The average bonus per annum was $123.72, including the Christmas bonus. The average director's fees for the 18 years and 7 months was $12. The average dividend on my investment was $98,685, and the average preferred dividend was $4,726.38. The total remuneration, therefore, including return on my investment, per annum, was $122,170.10, and the total amount of money I have ever received from Consolidated for everything, including return on my investment, outside of sales of stock, was $2,270,326.17, and the total income tax that I paid during that time, which includes the tax as I disposed of my stock, including the last sale, was $2,491.776. I want to read into the record the following statement, if I may. Mr. TOLAND. Right. Mr. FLEET (reading): The above includes the entire compensation paid to R. H. Fleet by Consolidated Aircraft Corporation and erstwhile subsidiaries since the company's inception. No commissions, shares of stock, bonds, warrants, promotion fees or organization compensation were ever given to him or to anyone for services rendered or for nothing. The company has never disposed of any stock for anything other than net cash without discount to anyone, or as consideration in acquiring the assets or corporate entities of 10 companies they are listed below which were purchased by it from time to time and which are merged in the company. Consolidated Aircraft Corporation was organized on May 29, 1923, by R. H. Fleet, who, at the company's organization, bought for cash at par 60 percent of its common stock and later for cash at declared value upon issuance 25 percent of its preferred stock. Major Fleet acted as chairman of its board, its president and manager from the company's organization until December 31, 1941. Mr. TOLAND. Did you bring with you a recapitulation of the business of the company for the past 18 years? Will you read that for the record? Mr. FLEET. Yes. The CHAIRMAN. Why not just put it in the record? Mr. TOLAND. I have it here, briefly. Mr. FLEET. It has been the practice of Consolidated Aircraft Corporation to publish in its annual report a recapitulation of all of its delivered business, from the day it first began, down to the end of |