Mr. HARRAH. Closing statement of C. C. Harrah before the subcommittee, at Peru, Ind.

1. It was my impression that Educational Material Disposal Section of War Assets Administration knew-at the time that material was being purchased through the Bunker Hill School-of the pending organization of the nonprofit corporation, and that at the completion of such organization, the transfer of property would be approved. If I had thought anything was inherently wrong with this situation. or that the Educational Material Disposal Section of War Assets Administration was not fully apprised of the situation, I would not have permitted the condition to exist or continue. That the fact that payments were made with my personal checks shows that I in no way was attempting to conceal facts regarding these transactions. 2. I seriously intended to establish an aviation mechanics training school. This has never been disputed by any qualified experienced witness directly connected with an educational program, such as Mr. Heddleston, Mr. McComb, Mr. Heath, or Mr. Gwin. The latter two still have unpaid salary accounts, and would have no reason to testify contrary to facts.

3. There were three or four drafts of leases prepared and presented to the Bunker Hill Corp. by the Bunker Hill School of Aeronautics, the last of which called for rental payments of $1,050 per month for a single building.

4. Also, I am thoroughly convinced that Messrs. Ladd and Curran never did intend to allow the organization of the school for their own personal reasons, and that it is only natural that at this point, they would claim there was no intention to form a school. Further, I feel that Messrs. Curran and Ladd are making these claims in self-defense. 5. There is not and never was any comingling of property of the Bunker Hill School of Aeronautics, either physically or on the books, with my own property.

6. The point had been reached where it was impossible to secure further loans for the school, either from the members or from commercial sources. Certain money had to be advanced to care for, store, and handle this material. My personal saturation point for advances to the school had been reached-on long-time loans. I could only make short-term temporary advances. These were made only with the understanding that certain property would be sold and the money returned to me. These are the only sales which were made. 7. I loaned money to the school for the establishment, and their further needs throughout the attempted organization and period of inactivity. At the present time the school owes me $12,699.79.

8. When it became apparent to me that the majority members of the Bunker Hill Corp. were not primarily interested in aviation activities, and did not intend to lease property to the school on reasonable terms, I ceased active participation in the Bunker Hill Corp., of which I was a one-third owner; because it was operating contrary to its originally stated intent.

9. I further state that all materials sold to schools had been previously screened by the armed services, that practically all material received was in a used or reparable condition only; and that, as testified to by Mr. Heddleston, the material was combat type and not considered commercial. If it had been my intention to attempt to

make a profit, an entirely different category of material would have been purchased from other sources.

10. I have been advised and am presently advised that this property cannot be turned over to the United States Government in disregard to the State of Indiana and the creditors of the school, without the risk of civil and criminal prosecution for violating fiduciary responsibility. I then further say that the directors of the Bunker Hill School of Aeronautics, predecessors to the Indiana School of Aeronautics, are willing and anxious to meet with representatives of the United States Government, the State of Indiana, and the creditors of the school and work out a proper disposition of the material. Mr. BONNER. Any questions, Mr. Hoffman?

Mr. HOFFMAN. I haven't any.

Mr. BROWNSON. I have no questions.
Mr. CURTIS. I have no questions.

Mr. BONNER. Thank you very much, sir.

Mr. HARRAH. Thank you very much Mr. Chairman, I thank your subcommittee

Mr. BONNER. Does the subcommittee desire to hear any further witnesses?

Mr. CURTIS. I don't.

Mr. BONNER. Mr. Ladd is another principal in this matter; Mr. Ladd, do you have any statement you care to make?

Mr. LADD. I just want to answer

Mr. BONNER. Others who have testified have made subsequent statements. Mr. Ladd, do you object to being sworn?

Mr. LADD. I do not.

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. LADD. I do.

FURTHER TESTIMONY OF WAYNE LADD, FARMER AND PRESIDENT OF BUNKER HILL CORP., BUNKER HILL, IND.

Mr. BONNER. Your address Mr. Ladd.

Mr. LADD. Bunker Hill, Route 1.

Mr. BONNER. Your vocation?

Mr. LADD. Farmer. Now Chairman Bonner, first intention is to answer some questions that were brought up by Mr. Hutchcroft a while ago. I will hurry through these as fast as I can. I can give you the straight of this as to getting back to a meeting that was held in Bunker Hill a few years ago. The reason of this meeting is that two representatives of the school had met with the town board advocating to the town board that they demand that the Bunker Hill Corp. give a lease to the Bunker Hill School of Aeronautics on their terms. They were putting pressure on us. And one of them had met one night and Mr. Heath and Mr. Gwin another. I knew Mr. Gwin was to be there one night. I was courteous enough to not bother his meeting. Then the next week I paid $10 for the Town Hall, this was not an open meeting to the public, and I invited some broad-minded, fair-minded people of the community and we had quite a group there, and the reason I hired the hall I wanted to control it where I had some disgruntled people that I thought would probably come if it was an open meeting and try to do away attend the meeting. Well we had some that weren't invited and Mr. Hutchcroft happened to be one that was not invited.

I knew he would never listen to anything I had to explain and at the close of that meeting I explained the reason of this. I wanted to give people facts in the community, as to what was going on in regard to this lease and the operation of the base for they had been getting abso lutely the wrong information. I explained this as it really was and at the close of the meeting I asked for a vote of confidence and as I remember out of 75 or 80 people that attended there were only 4 or 5 people, Mr. Hutchcroft was one of them, that wouldn't give me a vote of confidence.

Now hurriedly moving on from that he mentioned quite a pile of coal being moved over to the soybean plant. That is so. It was moved to the soybean plant but before I ever negotiated for the base War Assets was over at the base there disposing of surplus property. They had a bunch of coal over there that was unsuitable for use at Great Lakes or it would have been shipped back to Great Lakes. I purchased that coal. I have a bill of sale for 400 tons of coal in my lock box at the Bank of Kokomo that I have kept just for an occasion of this kind. I was afraid somebody would suspect sometime I was hauling things off the base and I will be glad to get those for you the first thing in the morning when the bank opens if you would like to see it.

Mr. BONNER. If you desire just send a certified copy of it.
Mr. LADD. I will be glad of it, I will be glad to.

Also at the same time I bought all of some dirty sand and gravel that was on the base not knowing I was going to lease it. And I have left most of that there to use on the Navy property_to_repair roads for the Navy although it was my property and I charged nothing to the Navy.

Getting back to the electricity there is nothing complicated about that if he will take the bother to go over to the light office they will explain that authoritatively to him. The reason he didn't have lights and we do have, we have a special line out to supply the base and supply the soybean plant. Both of those are big consumers of electricity. They are special lines, he is not on the same line we are on, he knows that, and as to the electric bill I had the soybean plant before we leased the base, and I took it up with the manager of the light plant, Mr. Floyd Kern. "Well," he said, "I know you, I don't know anything about this Mr. Harrah or anyone in this Mullaney that is interested in this corporation." He said, "I know you are responsible, now I will make you a proposition. We want pay for that electricity," was the quotation he made to me, "That is used over at the base. I am going to hold you responsible. I am going to charge you for all electricity on that special line out there, you will use all of it at the base and at the soybean plant." That line is metered here at the plant in Peru. Out there there is a separate meter for what goes out one way out of the transformer over on the base another meter that goes over to the soybean plant so that is absolutely kept separated and always has and the light plant manager here the foreman and president will vertify that and they read the meter, and there is not a thing there but what I can prove.

Mr. BONNER. You have sold the plant at the present time?
Mr. LADD. That is right.

Mr. BONNER. Does that arrangement still hold?

Mr. LADD. No; I am not going to be responsible for theirs. Mr. BONNER. Wait a minute, does the arrangement of the two meters still hold out there?

Mr. LADD. Yes; that is right.

Mr. BONNER. It is the same condition that existed when you owned the plant as exists today?

Mr. LADD. Except for this

Mr. BONNER. I understand you are not responsible for what goes to the plant to the soybean plant?

Mr. LADD. In addition to one more thing, Chairman, when I was responsible for all that it was all figured on one basis. I got the electricity for the air base at a cheaper rate because I paid the entire amount was consumed on that line up here. But now then we have a separate set-up there, that is figured separately entirely. On both meters and the soybean plant pays their portion and we pay ours but it is not all figured in getting us down to the low rate when I was responsible for all of it.

Mr. HOFFMAN. Wait a minute, I don't understand, were you responsible for it, to pay for the current that went into the base?

Mr. LADD. I guaranteed the light plant that I would be; yes, sir. Mr. HOFFMAN. Then you bought for yourself and you bought for the base?

Mr. LADD. No, the base has always paid its own share and there is

a meter.

Mr. HOFFMAN. I thought you said you guaranteed it.

Mr. LADD. I did, if it had ever been a time that the base was unable financially to pay it which they have been, I will grant you they have been

Mr. HOFFMAN. But it would go through the same transformer all that current?

Mr. LADD. There is transformers in the base that supplies the greater part of that country out there.

Mr. HOFFMAN. What was the city doing out there recently, the electric light people?

Mr. LADD. I sold the soybean plant, now then they are running me another plant down to the alfalfa dehydrating plant.

Mr. HOFFMAN. And leaving the old lines just as they were?

Mr. LADD. The line between the base and Peru is to be left the same, but they did not have enough voltage on down below and they are running, we have a lot of horsepower and they are running a heavier line now to take care of that.

The base has always paid their share, their part of what electricity they consume.

Mr. HOFFMAN. Do they get a separate bill from the city?

Mr. LADD. Yes, yes.

Mr. HOFFMAN. You didn't have anything to do with that?

Mr. LADD. No, at 4 every last day of the month their reader would come out. He would have the reading of the meter here at the city plant and then he would come out and read the meter at the base, what the base had used and what Ladd Soybean Co. used and they would bill us.

Mr. HOFFMAN. You read a meter, do you read a meter that goes to your place and the one that goes to the base? Why do they read one down here?

Mr. LADD. I had a deal with them or they propositioned me on the deal if I would be responsible they would give us the more current we consumed here, and I suppose in all communities the cheaper it is, he gave us the benefit of that if I would be responsible for the air base and he made this proposition of whatever this meter read up here that would be the total amount of the bill they, he would come out there and read that. If they used over their 2,000 kilowatt-hours and we used 100,000 kilowatt-hours it would be proportioned of the amount right here which was a good deal for the base.

Mr. HOFFMAN. You mean they fixed the rate on the meters down here that carried it?

Mr. LADD. Yes the total amount we used, all that came out on that private line and I have heard so much hashed about the $100,000 bond. We did agree to give the town of Bunker Hill $100,000 bond if at all possible. We tried every bonding company, had Mr. Harrah tried he thought he could secure it and none of us were able to secure any bonding company to give $100,000 bond because they had read the contract and they couldn't figure what we were to be bonded for, there was nothing to be bonded. It was impossible to get a bond. In lieu of this bond the Bunker Hill Corp. took out $300,000 of liability insurance and $50,000 property damage and then every attendant also had to have complete coverage of insurance to protect the town of Bunker Hill. We think we have protected them even better than had we been able to get the $100,000 bond but that was an impossibility. And another think I will just take this up very quickly. Mr. Hutchcroft said that we tied the town up, that they'd have to continue to lease to us. Well after we went into this thing and made quite an investment in order to after another election to get some disgruntled office holder to want to kick us out we did get in our lease with the town of Bunker Hill stated that as long as the Bunker Hill Corp. had created no liability to the town of Bunker Hill they must continue to lease for a period of 5 years. Which we couldn't hardly afford to do because they have an election every year or two and now it is a fact that we absolutely could not agree on the lease with the Bunker Hill School of Aeronautics and it seems to me that they have contended from what I have read in the press all along that they had blamed Mr. Curran and I because we couldn't agree upon a lease was the reason that they couldn't start the school. Well we only had those people with us slightly over a year and they got a lease down at Freeman Field and they got a lease, they have been down there 2 or 3 years and they didn't form a school down there. I don't hear those things referred to after they left us. They had a good lease down there. What happened after they left here? What happened after they left? Why is it Mr. Curran and I altogether? I admit we absolutely couldn't agree on a lease on their terms but I cannot understand when they were only with us about a year and went to Freeman Field and were down there 2 or 3 years why is it our fault they didn't get a certification after they left here in a new field where we never even saw any more of them? That is one thing I would like to

Mr. BONNER. Is Freeman Field leased similar to Bunker Hill! Mr. LADD. I know nothing about the lease but I know they moved their property or I understood it is going. I admit we were unable to get to go on terms of lease on their basis but we had them with us a year and they moved out lock, stock, and barrel except a few big