Miss BOWMAN. Only, perhaps, to take some worries off a person's mind, outside of work.

Mr. TOLAND. May I interrupt? I would like to make one statement for the record, that the records reflect that for the greater part of the year 1941, the salary of the witness was $5,000 per annum. In September of 1941, it was raised to $5,300 per annum. In December it was raised to $25,000 per annum.

Mr. VINCENT. Mr. Chairman, you asked about the bonus in 1941. What was the bonus in 1940?

Mr. TOLAND. The record shows, Mr. Vincent, $132.54, apparently, as a bonus in 1940.

Mr. VINCENT. Did you have it for '39?

Mr. TOLAND. No; because the company was not organized in '39. The CHAIRMAN. So your salary now is $25,000?

Miss BOWMAN. That is right, sir.

The CHAIRMAN. And you got a bonus in March of this year of $13,000?

Miss BOWMAN. That is right, sir.

Mr. Jack is a very, very busy man and he is doing a very big job. The CHAIRMAN. And a rather generous man.

Miss BOWMAN. He always has been.

The CHAIRMAN. And he was rather generous in March when he gave you $13,000.

Miss BOWMAN. He is the most wonderful man in the world.

The CHAIRMAN. I certainly think you should defend him. Any man who takes Government money and gives it away as generously as that should be defended, because that is where he is getting his money from-from the taxpayers of the country. What was the reason he was giving this money away to you employees, to keep down the excess-profits tax?

Miss BOWMAN. No, sir.

The CHAIRMAN. What was the reason he was giving away government money?

Miss BOWMAN. I think you should ask him.

The CHAIRMAN. I certainly will.

Mr. MAAS. Are you certain there was no agreement for you to rebate any of these bonuses you got to Mr. Jack or anybody else? Miss BOWMAN. Positively not, sir.

Mr. MAAS. You weren't planning on doing so this year?

Miss BOWMAN. No, sir, not at all, sir.

Mr. MAAS. When you got these big bonuses and when your salary was raised to $25,000 a year, did it ever occur to you how many school children had to buy 10-cent defense stamps to pay that? (The witness did not answer the question.)

Mr. TOLAND. Miss Bowman, I showed you your bank account, the photostat copy, and there are some entries in December, 1941 and January of 1942, one in the amount of $20,437.08, another which is your salary check of $1,041.66; then on January 2, a deposit in the amount of $10,868.23, and then a deposit of $11,364.86 on January 5. We did not find in the records of the company any withdrawals for those, and I was wondering if you could tell the committee where you received the income, or the money that you deposited, that is represented by those items?

Miss BOWMAN. In 1942, that is the sale of the stock that I had. Mr. TOLAND. Sale of stock?

Miss BOWMAN. Yes, sir; securities that I had.

Mr. TOLAND. You sold all the stock?

Miss BOWMAN. I sold all my securities.

Mr. TOLAND. What about the deposits in September?

Miss BOWMAN. Those are the same thing, sale of securities. You have the complete record in your bag. I turned it all over to you, including the tax transactions. They are all in there.

Mr. TOLAND. Do you have any other income that is reflected other than your salary that you received from the company?

Miss BOWMAN. Yes, I have been receiving dividends, and I also have an annuity.

Mr. TOLAND. From the policy you purchased?

Miss BOWMAN. That is right, sir.

Mr. TOLAND. Which was paid for by money you received by way of bonuses from this company, is that correct?

Miss BOWMAN. No, sir; I have been working for that for 25 years— for those securities.

Mr. TOLAND. But the fact is that the loan that you made was paid back with Government funds that you received through being secretary to the president of this company.

Miss BOWMAN. It was paid back by my salary, sir.

Mr. TOLAND. And bonuses.

The CHAIRMAN. Are you a stockholder in the company now?
Miss BOWMAN. No, sir.

The CHAIRMAN. Have you a list of the stockholders?

Mr. TOLAND. I have it.

The CHAIRMAN. You are not a stockholder?

Miss Bowman. No, sir.

Mr. SUTPHIN. Mr. Toland, what did the bank deposits amount to during those 2 months?

Miss BOWMAN. Don't forget the securities that were sold amounted to quite a bit of money, and he has the records there. If you will take out the tax bill there, it will show it; it will show the sale of those securities.

Mr. TOLAND. The following entries appear: $220.83, $300, $100, $252.45, $80, $22,417.59, $10,600, $25 on the 31st of December, $20,437.08 on December 31.

Miss BOWMAN. Let him read the sale of the securities now.

Mr. TOLAND. The salary on January 2, $1,041.66; a deposit of $10,868.23 on January 2; $150 on January 5; $11,364.86 on January 5; $1,031.24 on January 16; and $1,030.86 on January 31, 1942. Now give me the record of the sale of securities.

The CHAIRMAN. What is the total amount?

Mr. TOLAND. We are figuring that up.

Miss BOWMAN. I am pretty sure it is over $45,000, sir.

Mr. TOLAND. On the securities?

Miss BOWMAN. Yes, sir.

Mr. TOLAND. The witness correctly reflects on the income-tax return filed for the calendar year 1941, a salary of the figure I mentioned, $39,356.70. Then she shows a loss in securities sold.

The CHAIRMAN. Find it and put it in the record.

Miss BOWMAN. It must have been around $50,000, the securities that were sold. Of course, that runs into 2 years. There are some in 1941.

Mr. TOLAND. The total amount deposited for the 2 months was $79,919.80, which includes salaries, bonuses, and the sale of stock as reflected by the witness. Of that amount, $79,000, in the month of December, exclusive of salary, she received from the company $33,017.59 in bonuses.

Mr. IzAC. What year?

Mr. TOLAND. 1941.

Mr. JOHNSON. Miss Bowman, did you ask Mr. Jack to increase your salary from $5,000 to $25,000?

Miss BOWMAN. I certainly did not, sir.

Mr. JOHNSON. When did you first know you were going to get that increase?

Miss BOWMAN. When I got my check.

Mr. JOHNSON. He didn't say anything to you about it before?

Miss BOWMAN. No.

The CHAIRMAN. You didn't turn it back to him, did you?

Miss BOWMAN. No, sir; I did not, sir.

Mr. COLE. You have been working for Mr. Jack for 22 years?

Miss BOWMAN. That is right.

Mr. COLE. And has it been his practice back over that period of time to give you bonuses at different times?

Miss BOWMAN. Yes, sir; it has.

Mr. COLE. And have there been some years when you didn't get any bonus at all?

Miss BOWMAN. There were times when times were hard; yes, that is true.

Mr. COLE. And you didn't get any bonus?

Miss BOWMAN. That is right.

Mr. COLE. What was your pay back when times were hard?

Miss BOWMAN. I couldn't tell you. All I remember is a good many years of hard work, that is all.

Mr. COLE. Was any annual bonus that you received prior to 1941 greater than $5,000?

Miss BOWMAN. Oh, yes, sir.

Mr. COLE. Was it in any one year greater than $10,000?

Miss BOWMAN. Yes; it has been.

Mr. COLE. What year was that, do you remember?

Miss BOWMAN. I couldn't tell you when it was, no.

Mr. COLE. You don't remember what kind of work Mr. Jack was engaged in at that time?

Miss BOWMAN. Yes, sir; the same kind of work he is in now.
Mr. COLE. Of building starters?

Miss BOWMAN. Not starters; no, sir.

The CHAIRMAN. Did he have Government contracts in those times? Miss BOWMAN. He has had an awful lot of contracts all those years. He has done an awful lot of work.

The CHAIRMAN. But during the time he has been giving bonuses that you refer to, was that during the time that he had Government contracts?

Miss BOWMAN. Perhaps you had better ask him that; sir.

Mr. TOLAND. I show you your income tax return for the year 1940 and I ask you to tell the committee what you reported as salary received for that year?

Miss BOWMAN. $4,448.38.

Mr. TOLAND. And that correctly reflects the amount that appears on the exhibit that I heretofore showed you, for the amount of money you received from Jack & Heintz, Ltd.?

Miss BOWMAN. It must be, sir. It is reported that way.

Mr. TOLAND. I would like to read into the record the return of Adeline Bowman, 12,900 Forest Hill Avenue, East Cleveland, Ohio, for the year 1940: Salaries and other compensation for personal services, $4,448.38.

Mr. COLE. What was the last year in which you received no bonus while you were employed by Mr. Jack?

Miss BOWMAN. I couldn't tell you.

Mr. COLE. Did you receive any bonus in 1940?

Miss BOWMAN. I couldn't say. It is all in the record. You have all the records.

Mr. COLE. Counsel has just read you your own income tax return in 1940 in which you set forth your income as being $4,400. What amount of that, if any, was represented by a bonus, or was that your salary?

Miss BOWMAN. That was the salary.

Mr. COLE. That was your salary?

Miss BOWMAN. Yes.

Mr. COLE. Then you didn't receive any bonus in the year 1940? Miss BOWMAN. It isn't marked down there.

Mr. COLE. Then apparently, 1940 was one of those lean years that you spoke of, out of the 22. What was Mr. Jack doing in 1940?

Miss BOWMAN. Working.

Mr. COLE. What was his business, what was he making?
Miss BOWMAN. Mr. Jack is a production man.

Mr. COLE. You were working for him as his private secretary just a year and a half ago in 1940. Now, if you are worth $25,000 to him now as secretary, it seems as though you might be able to tell us what he was doing in 1940 in a business way?

Miss BOWMAN. I think perhaps you better ask him.

Mr. COLE. No, you can tell us. Anybody who is worth $25,000 can remember back to 1940.

The CHAIRMAN. What business was he in in 1940?

Miss BOWMAN. Wasn't he in the Jack & Heintz Co.?

Mr. TOLAND. According to the records, November 15 was the first payment from Jack & Heintz that you received, which equalled the amount that appeared in the tax return of $4,400.

Miss BOWMAN. I wish you would ask Mr. Jack that.

Mr. COLE. Did you ever, prior to 1941, receive a bonus from Mr. Jack amounting to $20,000 in any one year?

Miss BOWMAN. I don't remember, sir.

Mr. COLE. You certainly would remember any one year that you received a bonus of $20,000. Don't you think you should remember it?

Miss BOWMAN. No, I don't.

The CHAIRMAN. Thank you, Miss Bowman.

Mr. TOLAND. In connection with Miss Bowman's testimony regarding her sales of securities, I offer in evidence certain documents furnished by her.

(Four documents were received in evidence, marked "Exhibit 27" and are filed with the committee.)

TESTIMONY OF DONALD W. LAKE, COMPTROLLER, JACK & HEINTZ, INC.

Mr. TOLAND. May it be understood, Mr. Chairman, that there are some original records of the company that I have introduced, that are produced under subpena, that they be withdrawn ard photostats substituted in lieu thereof.

The CHAIRMAN. Of course, and I would suggest that you photostat as much of the records as you can and let the records go back.

Mr. TOLAND. Will you tell the reporter your full name?

Mr. LAKE. Donald W. Lake.

Mr. TOLAND. And where do you reside, Mr. Lake?
Mr. LAKE. 6225 Brookside Drive, Cleveland, Ohio.
Mr. TOLAND. What is your present occupation?
Mr. LAKE. Comptroller, Jack & Heintz, Inc.

Mr. TOLAND. How long have you been so employed?
Mr. LAKE. Since September 1939-wait a minute, 1940.
Mr. TOLAND. September 1940?

Mr. LAKE. That is right.

Mr. TOLAND. Tell the committee briefly your previous business experience and the amount of annual compensation that you received up to and including August 1940, prior to your employment with this company.

Mr. LAKE. I was employed as a public accountant for approxi-mately 12 or 15 years.

Mr. TOLAND. With what company?

Mr. LAKE. Ernst & Ernst; and Laubscher & Smith; and Touche, Niven & Co.; and a few others.

Mr. TOLAND. What was your annual compensation?

Mr. LAKE. The annual compensation, as I recall, ran between $2,000 and $2,400.

Mr. TOLAND. And what was the compensation that you were receiving in August 1940?

Mr. LAKE. I believe it was $2,400 a year.

Mr. TOLAND. And what was the compensation that was fixed when you were first employed by Jack & Heintz, Ltd.?

Mr. LAKE. Two and a quarter a month, I believe; two and a half. Mr. TOLAND. And what is your compensation now?

Mr. LAKE. $7,500.

Mr. TOLAND. I show you what purports to be a pay-roll sheet of Jack & Heintz, Ltd., showing the first entry thereon for November 15, 1940, with the total amount received by you of $632.54, and ask you if that is a correct record as to the payment you received from that company?

Mr. LAKE. That is right.

Mr. TOLAND. I offer it in evidence.