BUNKER HILL SCHOOL OF AERONAUTICS, INC. THURSDAY, MARCH 1, 1951 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON INTERGOVERNMENTAL RELATIONS, OF THE COMMITTEE ON EXPENDITURES, IN THE EXECUTIVE DEPARTMENTS, Washington, D. C. The subcommittee met, pursuant to call, in room 1310, New House Office Building, Hon. Herbert C. Bonner (chairman of the subcommittee) presiding. Present: Representatives Bonner, Donohue, Lantaff, Hoffman, Harden, Brownson, and Curtis. Also present: Former Representative Andrew J. Biemiller, of Wisconsin; Thomas A. Kennedy, general counsel; Herbert Small, subcommittee clerk; and William T. Oare, counsel for Bunker Hill School of Aeronautics, Indiana School of Aeronautics, and directors thereof. Mr. BONNER. The subcommittee will come to order. In the previous hearing on the subject matter involved in the Bunker Hill School of Aeronautics on December 7, 1950, we heard from representatives of the General Accounting Office. At the conclusion of that hearing the General Accounting Office was instructed by the subcommittee to continue its inquiry into this subject matter. It is understood that their supplemental report will soon be available to the subcommittee. Mr. Small will call the roll of the subcommittee. (Whereupon, the roll was called by Mr. Small.) Mr. BONNER. A quorum of the subcommittee being present, we shall proceed with the business before the subcommittee. The first witness the subcommittee desires to call is Mr. Clayton C. Harrah, of Niles, Mich. Is Mr. Harrah present? Mr. HARRAH. Yes, sir. Mr. BONNER. Will you be sworn? Mr. HARRAH. Yes, sir. Mr. BONNER. Do you solemnly swear in the evidence you are about to give the subcommittee you will tell the truth, the whole truth in all matters and inquiries pending before this subcommittee? Mr. HARRAH. I do. I so swear. Mr. BONNER. You may be seated, Mr. Harrah. Mr. HARRAH. Thank you. TESTIMONY OF CLAYTON CHARLES HARRAH, PRESIDENT, DUKE HARRAH, INC., NILES, MICH. Mr. BONNER. Mr. Harrah, will you give the reporter your full name? Mr. HARRAH. My name is Clayton Charles Harrah. Mr. BONNER. And your address? Mr. HARRAH. I reside in Niles, Mich., post-office box 225, residence address Berrien Crest. Mr. BONNER. What is your principal business? Mr. HARRAH. My principal business is a dealer in aircraft parts. Mr. BONNER. Are you the president of the Duke Harrah, Inc., of Niles, Mich.? Mr. HARRAH. Yes, sir. Mr. BONNER. What is the character of the business carried on by you in that connection? Mr. HARRAH. The character of the business is that we supply aircraft parts to various other dealers in the same business, to various airlines, airport operators, foreign manufacturers, domestic manufacturers of aircraft, and various foreign governments, either directly or through other dealers. Mr. BONNER. Are you the president of Factors International, Inc., of South Bend, Ind. Mr. HARRAH. Yes, sir; I am. Mr. BONNER. What is the character of that business? Mr. HARRAH. Factors at the present is practically inoperative. It is in the process of closing its business. It was formerly a company that operated, as the name does indicate, primarily as a loaning agency for various enterprises that needed money. Mr. BONNER. What is your relation to the Bunker Hill Corp.? Mr. HARRAH. I have no direct relation with the Bunker Hill Corp. at the present time. I, at one time, was a one-third stockholder in the Bunker Hill Corp. and one of the original incorporators. A year ago or more I transferred my stock in the Bunker Hill Corp. to Factors International in the settlement of some obligations I had with Factors International. Mr. BONNER. What did the Bunker Hill Corp. do? Mr. HARRAH. The Bunker Hill Corp., at the time I was associated with them, leased the base of the Bunker Hill Naval Air Base from the city of Bunker Hill for $1 per year, and proceeded to lease, rent, and so forth, the various buildings on the base and the land that was on the base, either operated it themselves, or to lease it out to various other farmers for agricultural purposes. Mr. BONNER. What is the character of the business carried on by Factors, Inc.? Mr. HARRAH. You mean Factors International, sir? Mr. BONNER, Yes. Mr. HARRAH. As I stated to you previously, Factors International is now inactive. Once upon a time it was primarily a loaning company in various Mr. BONNER. Did I understand you to say it is not in existence any more? Mr. HARRAH. No, sir; I did not. I say it is inactive as far as any active business is concerned at the present time. The corporation is still intact, and it is in process of liquidation. Mr. BONNER. Who are its officers? Mr. HARRAH. At the present time there are only three members and they are officers-myself as president, Mr. James E. Short, and L. O. Zick. Mr. BONNER. Are you the vice president of the Indiana School of Aeronautics? Mr. HARRAH. Yes, sir. Mr. BONNER. Was this formerly known as the Bunker Hill School of Aeronautics? Mr. HARRAH. It was, sir. Mr. BONNER. What is the status of the Indiana School of Aeronautics as of this time? Mr. HARRAH. It's inactive and inoperative. Mr. BONNER. It is not being operated as a school at the present time? Mr. HARRAH. No, sir. Mr. BONNER. Has it ever operated as a school? Mr. HARRAH. It never operated as a school, inasmuch as it never had received full certification from the Civil Aeronautics Authority, It actually never had one paid student. Mr. BONNER. Did the Bunker Hill School of Aeronautics ever operate as a school? Mr. HARRAH. No, sir; the situation was exactly the same. Mr. BONNER. Did the Bunker Hill School of Aeronautics ever apply for certification from the Civil Aeronautics Authority? Mr. HARRAH. No, sir. There was relations conducted between the Civil Aeronautics Authority relative to such an application. Formal application was never made for the reason that the school never was completely set up to the point where certification could be made. There was certain equipment that had never been installed that was in the process of being installed at the time that controversy took place between the Bunker Hill School of Aeronautics and the Bunker Hill Corp. and made it impossible for the Bunker Hill School of Aeronautics to acquire a lease. Consequently, that equipment was never procured so that the certification would have been possible to meet the requirements of the Civil Aeronautics Authority. Mr. BONNER. Did the Indiana School of Aeronautics ever apply for certification? Mr. HARRAH. No, sir. Mr. BONNER. Did the Bunker Hill School of Aeronautics or the Indiana School of Aeronautics ever have an enrolled student? Mr. HARRAH. No, sir. Mr. Congressman Mr. BONNER. Did the Bunker Hill School of Aeronautics purchase surplus property from the War Assets Administration and obtain. similar property from the Army Air Forces under the donable. program? Mr. HARRAH. Mr. Chairman, sir, would I be permitted to correct my statement made before? Mr. BONNER. Which statement? Mr. HARRAH. Would you permit me to correct my statement made regarding enrollment? Mr. BONNER. Why, of course. Mr. HARRAH. There were a number of students that we took application from, but actual enrollment and acceptance of any money or payment for such tuition was never made, though we did have students that made application for entrance to the school at the time that the schools would be open. Mr. BONNER. Approximately how many were there? Mr. HARRAH. I would say from memory approximately 25 to 30 formal enrollment blanks were filled out, and there were probably in the neighborhood of 100 cases that as soon as we had Veterans' Administration clearance, that they would enroll. Mr. BONNER. Do you have those records? Mr. HARRAH. I do not have them with me. Mr. BONNER. Are they available? Mr. HARRAH. I believe that we have them in the files; yes. Mr. BONNER. Could you supply the subcommittee the original applications and other matters pertaining to the applications? Mr. HARRAH. I believe we could. (The information referred to is marked "Exhibit 1" and follows:) EXHIBIT 1 To Whom It May Concern: PLAINFIELD PUBLIC SCHOOLS, While registrar of the Bunker Hill School of Aeronautics I made up and had printed a number of the enclosed forms, corresponded with several prospective students (one list attached), and was ready to sign them as students when the school was denied a lease to the buildings. I had visited the county service centers in four counties and was promised students from each. I had my books selected and could have opened with 100 students any time after August 1, 1947, had the Bunker Hill Corp. granted the lease. I had the curriculum for each of the four courses typed and ready to present to the State department of education for approval. I still have this in my possession. (Signed) VIRGIL GWIN, Township principal. Subscribed and sworn to before me this 13th day of March 1951. [SEAL] My commission expires May 22, 1953. FLORENCE M. NUOLIN, Notary Public. Richard Perkins, Rural Route No. 2, New Albany, Ind. Leonard Phillipy Kelsey Aldrich, Route 2, Box 754, Battle Creek, Mich. Warne C. Stewart, Route 4, Logansport, Ind. Layton Birkhold, 415 West Market Street, Logansport, Ind.-Phone 5372 Weldon Rex Engel, Route 4, Peru, Ind. Earl Mohler, 311 Jefferson Avenue, Peru, Ind. Clifford A. McKinzie, Hamlet, Ind. Norman Thompson, 178 East Eighth, Peru-Phone 1987W |