INVESTIGATION OF THE NAVAL DEFENSE PROGRAM FRIDAY, MAY 15, 1942 HOUSE NAVAL AFFAIRS INVESTIGATING COMMITTEE, HOUSE OF REPRESENTATIVES OF THE UNITED STATES, The committee met at 10:14 o'clock, pursuant to adjournment on Thursday, May 14, 1942, in room 313, Old House Office Building, Representative Michael J. Bradley, Pennsylvania, acting chairman, presiding. Present: Representative Michael J. Bradley, Pennsylvania (acting chairman); Thomas A. Flaherty, Massachusetts; Melvin J. Maas, Minnesota; William E. Hess, Ohio; William H. Wheat, Illinois; William H. Sutphin, New Jersey; William S. Jacobsen, Iowa; W. Sterling Cole, New York; James W. Mott, Oregon; George J. Bates, Massachusetts; John Z. Anderson, California. Also present: Edmund M. Toland, general counsel; William J. Shaughnessy, assistant general counsel; Thomas S. Hinkel, assistant general counsel. The ACTING CHAIRMAN. The committee will come to order. Mr. TOLAND. Right. Good morning, Mr. Chairman. Commander Weyerbacher. The ACTING CHAIRMAN. Raise your right hand, Commander. Do you solemnly swear that the evidence you are about to give the Naval Affairs Committee will be the truth, the whole truth, and nothing but the truth, so help you God? Commander WEYERBACHER. I do. TESTIMONY OF COMMANDER RALPH D. WEYERBACHER, VICE PRESIDENT AND GENERAL MANAGER, CRAMP SHIPBUILDING CO., PHILADELPHIA, PA. Mr. TOLAND. Commander, will you give the reporter your full name? Commander WEYERBACHER. Ralph D. Weyerbacher. Mr. TOLAND. You are perfectly willing to testify before the committee? Commander WEYERBACHER. Certainly. Mr. TOLAND. Where do you reside, Commander? Commander WEYERBACHER. Cambridge Apartments, Germantown, Philadelphia. Mr. TOLAND. What is your present business or occupation? Commander WEYERBACHER. Vice president and general manager of the Cramp Shipbuilding Co., Philadelphia, Pa. Mr. TOLAND. What compensation do you receive per annum? Mr. TOLAND. $25,000 a year? Commander WEYERBACHER. Yes, sir. Mr. TOLAND. How long have you received that compensation? Mr. TOLAND. What was your previous business experience prior to your appointment with the Cramp Shipbuilding Co.? Commander WEYERBACHER. I retired from the Navy in May 1937. Mr. TOLAND. Retired as what? Commander WEYERBACHER. Commander. Mr. TOLAND. Commander? Commander WEYERBACHER. Yes. And then I was in consulting business up to the time I received the appointment as vice president and general manager at Cramp. Mr. TOLAND. From 1937 down to and including today you received retired pay, did you not, from the Government? Commander WEYERBACHER. Yes, sir. Mr. TOLAND. How much do you receive per annum as a retired officer? Commander WEYERBACHER. It is under $4,500 a year. Mr. TOLAND. $4,500 a year? Commander WEYERBACHER. Less. It is between 44 and 45. Mr. TOLAND. When were you first connected in any capacity at all with the Cramp Shipbuilding Co.? Commander WEYERBACHER. I was elected vice president and director at its first meeting, as I remember, in August or September 1940. Mr. TOLAND. When were you connected with the old Cramp Shipbuilding Co.? Commander WEYERBACHER. I was never connected with the old shipbuilding company. Mr. TOLAND. Were you connected with any of the parent companies of the old Cramp Shipbuilding Co.? Commander WEYERBACHER. I was not. Mr. TOLAND. Did you ever work for the Merchant-Sterling Corporation? Commander WEYERBACHER. Yes. I was employed through Mr. Smith and received compensation from the Merchant-Sterling for preparing a report on rehabilitation of the William Cramp Ship & Engine Building Co., Philadelphia. Mr. TOLAND. What compensation did you receive there? Commander WEYERBACHER. I received compensation of $500 a month during the period of the report, and expenses. Mr. TOLAND. How long a period did that cover? Commander WEYERBACHER. Approximately 3 months. Mr. TOLAND. That is the total actual compensation you received. only $500 for each month? Commander WEYERBACHER. Absolutely. Mr. TOLAND. Were you present yesterday when checks were introduced into the record? Mr. SUTPHIN. Speak a little louder, Mr. Toland, please. Mr. TOLAND. I say, were you present yesterday when checks were introduced through Mr. Masterson? Commander WEYERBACHER. Yes, sir. Mr. TOLAND. Made payable to him and endorsed by him? You heard his testimony? Commander WEYERBACHER. I heard most of it. I was in the back of the room and I didn't hear it all. Mr. TOLAND. Is it a fact that you received from Mr. Masterson cash out of the funds that had been advanced for the purpose of making the survey, in addition to expenses and your salary? Commander WEYERBACHER. No, sir; I received only the $500 and expenses, and my accounts were fully audited. Mr. TOLAND. By whom? Commander WEYERBACHER. By the Merchant-Sterling Corpora tion. Mr. TOLAND. Do you have a report of that audit? Commander WEYERBACHER. I have a report from Mr. FitzGerald. I think he still owes me $5 and something. Mr. TOLAND. Do you know Mr. Work? Commander WEYERBACHER. Who? Mr. TOLAND. Mr. Work. The ACTING CHAIRMAN. How do you spell it? Mr. TOLAND. W-o-r-k. Commander WEYERBACHER. I know a Mr. James Work. Mr. TOLAND. How long have you known him? Commander WEYERBACHER. I knew Mr. Work back in the Philadelphia Navy Yard, back in 1915 or 1916 when I was on duty at the navy yard. Mr. TOLAND. Have you had any business transactions with him. since you retired from the Navy? Commander WEYERBACHER. I have done no work for Mr. Work. I have done some consultation and advised him on certain matters. Mr. TOLAND. Mr. Work is connected with the Brewster Aircraft Corporation now, isn't he? Commander WEYERBACHER. To the best of my knowledge and belief, yes. Mr. TOLAND. One time was he connected with the Detroit Aircraft Corporation? Commander WEYERBACHER. He was general manager of the Detroit Aircraft Corporation. Mr. TOLAND. Were you an employee at any time of the Detroit Aircraft Corporation? Commander WEYERBACHER. I was not. Mr. TOLAND. Were you ever employed by them as a consultant at any time? Commander WEYERBACHER. I was employed as a consultant to the president of that company, D. S. Evans; that is all in the Navy records. Mr. TOLAND. Now, in 1940 did you have any transaction, financial or otherwise, with Mr. Work? Commander WEYERBACHER. I received a $1,500 loan from Mr. Work. Mr. TOLAND. A loan? Commander WEYERBACHER. Yes, sir. Mr. TOLAND. Has that loan ever been repaid? Mr. TOLAND. I show you what purports to be a photostatic copy of a check dated the 26th day of March 1940, paid to your order in the amount of $1,500, deposited by you, endorsed by you, and deposited in the bank in Woodbury, N. J., and ask you if that is the loan you are discussing? Commander WEYERBACHER (examining document). That is correct. Mr. TOLAND. I offer it in evidence. (The check was received in evidence, marked "Exhibit No. 257," and is printed in the appendix of this volume.) Mr. TOLAND. Were there any bank stock shares connected with this transaction? Commander WEYERBACHER. Not to my knowledge and belief. Mr. TOLAND. Did you ever deliver to Mr. Work or did he ever buy for you any stock in any bank in the State of Indiana? Commander WEYERBACHER. No, sir. Mr. TOLAND. How long have you known Mr. Rohleder? Commander WEYERBACHER. I knew Mr. Rohleder beginning about 1921 or '20. Mr. TOLAND. Since when? Commander WEYERBACHER. 1920 or '21. Mr. TOLAND. You testified previously that you just received $1,500 from Merchant-Sterling in connection with the survey that you made for them. Commander WEYERBACHER. Well Mr. TOLAND (interposing). Three months' salary. Commander WEYERBACHER. I haven't got the detailed audit, but it was approximately that amount. It was at the rate of $500 a month. Mr. TOLAND. I show you what purports to be a complete summary of all the checks drawn on that account and ask you if this, according to your best recollection, reflects the moneys that you received out of that fund? Commander WEYERBACHER (examining document). You show a balance of over $2,000. You will find in the final audit that the balance was paid to the Merchant-Sterling. Mr. TOLAND. Well, that was furnished to us by the MerchantSterling. The exhibit that I will offer in evidence that I handed to the witness shows an advance of $9,000, professional services Weyerbacher $1,375, expenses Weyerbacher $966.66, other expenses $380.98. (The summary of checks was received in evidence, marked "Exhibit No. 258," and is printed in the appendix of this volume.) Mr. TOLAND. Why did you make the payment to the condenser corporation for the people that you employed? Commander WEYERBACHER. Because that was the arrangement Mr. Smith made with the condenser company in order to simplify bookkeeping and accounting. Mr. TOLAND. You never made that arrangement? Commander WEYECBACHER. I confirmed the arrangement after it was made. Mr. TOLAND. You know Mr. Kennedy quite well, don't you? Mr. TOLAND. In fact, didn't you recommend him for a position with the Cramp Shipbuilding Co.? Commander WEYERBACHER. Certainly. Mr. TOLAND. Did you discuss Commander WEYERBACHER (interposing). I would like to make one remark about this audit. I question whether or not this audit is from the Merchant-Sterling Mr. TOLAND. Beg pardon? Commander WEYERBACHER. Was made from the Merchant-Sterling book. Mr. TOLAND. That was furnished to us by Mr. FitzGerald. Mr. VINCENT A. BURNS (staff, Naval Affairs Investigating Committee). Mr. FitzGerald gave us that. Commander WEYERBACHER. I have a letter in my files at Philadelphia where he entered this balance here; I wrote a check for approximately that amount to Merchant-Sterling Corporation. My records will so show it. Mr. TOLAND. There is no inference as to the balance in the statement or any statement that I made that you retained it. The ACTING CHAIRMAN. For the record, Commander, you wish it to show that you did send the check for that balance? Commander WEYERBACHER. Absolutely. Mr. MAAS. When? Commander WEYERBACHER. Around about the middle of May 1941 when I closed out the account. Mr. TOLAND. 1941? Commander WEYERBACHER. No, no. Mr. MAAS. That check would be available, wouldn't it? Commander WEYERBACHER. In May of 1940 in the office of Mr. FitzGerald in New York. Mr. MAAS. You would have the canceled check now, wouldn't you? Commander WEYERBACHER. I have it in my files, or they have it in their own files, because my canceled checks were sent to the MerchantSterling with my bills as evidence of payment and they have all the canceled checks. Mr. MAAS. What is the date Commander WEYERBACHER (interposing). What they found in my files were stubs, and there were two checks not entered in my stubs because I made them out in New York. Mr. MAAS. What is the date of this audit furnished you by the Merchant-Sterling? Mr. TOLAND. That was furnished within the last 60 days. Commander WEYERBACHER. I question this entirely. That is a summary of the checks of my stubs that they got here. The ACTING CHAIRMAN. What does the balance amount to, Mr. Toland? Mr. TOLAND. The balance? The ACTING CHAIRMAN. The unexpended balance. Mr. TOLAND. They have here $2,000. The ACTING CHAIRMAN. And that balance you returned to them? Commander WEYERBACHER. Absolutely. Mr. TOLAND. The statement doesn't say that you didn't and I haven't said that you didn't. |