Mr. BONNER. The letter that has been in discussion, did Mr. Smith to your knowledge, ever receive a reply? Mr. LADD. As to the accounting? Mr. BONNER. The second paragraph. "I, also, wish to have you deliver to me not later than January 14, 1947, a full report of all purchases made on the basis of our permit." Did Mr. Smith get a reply to this letter? Mr. LADD. I questioned him every time. He said he never got a reply, but Mr. Shepler was telling me coming down on the train that Mr. Smith told him one day someone representing the school drove up to his place with a big pile of invoices on the side of the car and said, "Here they are. You can go all through these." And he looked at them. He said he did not have time to go through all of those invoices. But there was never any letter of any sort mailed to him. Mr. BONNER. Do you happen to know where the invoices are now? Mr. LADD. No; the man took them back with him. Mr. BONNER. You did not know who the man was, is that true? Mr. LADD. No. Mr. BROWNSON. I would like to ask some questions based on the testimony that has developed, because I would like to make a point that I have not had access to many of these photostats which seem to be floating around the table from time to time. So I have to operate on the basis of what I hear here. This Bunker Hill Corp. which you founded, leased the land from the town of Bunker Hill, is that right? Mr. LADD. That is right. Mr. BROWNSON. In turn leased it from the Navy? Mr. LADD. That is right. Mr. BROWNSON. Did the town of Bunker Hill, to the best of your knowledge, give to the Navy any consideration for the lease of this land? Mr. LADD. $1. Mr. BROWNSON. $1? Mr. LADD. Per year. Mr. BROWNSON. And what consideration did you give to the town of Bunker Hill? Mr. LADD. $1 per year. Mr. BROWNSON. $1 per year? Mr. LADD. Yes. Mr. BROWNSON. For that dollar per year you got this 2,121 acres plus the buildings on it with the understanding that you were responsible for maintaining that in the same condition as you got it? Mr. LADD. That is right. Mr. BROWNSON. In this corporation as you described its foundation there was a lady by the name of Jane Malaney, is that right? Mr. LADD. Malaney. Mr. BROWNSON. How do you spell that? Mr. LADD. M-a-l-a-n-e-y. Mr. BROWNSON. She was an associate, you said of Mr. Curran? Mr. BROWNSON. When you started out this corporation, was Mr. Curran still on active duty? Mr. LADD. With the Navy. Mr. BROWNSON. He was on an active-duty status with the Navy? Mr. LADD. Yes. Mr. BROWNSON. This Miss or Mrs. Malaney had stock in that corporation. Was that stock later turned over to Curran after he got out of the Navy? Mr. LADD. That is right. Mr. BROWNSON. In other words, she was in the position of holding that stock for Curran until he was relieved from active duty? Mr. LADD. Yes. She owned it, but it was the general agreement that whenever he was permitted to do so, engage in the corporation, that he would buy it. Mr. BROWNSON. In taking over this land from the town of Bunker Hill and in the town of Bunker Hill taking over the land from the Navy in return for this unusually nominal fee of $1 per year, was there any consideration as to the purpose for which the land that constituted this air base and the buildings should be used? Mr. LADD. I am not as clear on your question. Mr. BROWNSON. Let us put it this way. In return for getting this land on the $1 per year lease, did you have any understanding at the time you originally signed what you called your application for the interim permit and later on the lease for the land, did you have any agreement with the town of Bunker Hill or with the Navy as to what purpose you were to use the land for; was that purpose specified? Mr. LADD. The main thing we were interested in was the buildings. We thought that we could rent the buildings and get some industries in our community and get work for people. Right at that time there was a little slump, and the town of Bunker Hill was very much interested in getting some industries. Mr. BROWNSON. But there was no provision on the part of the Navy that this was done in the interests of an educational or training school of any kind? Mr. LADD. No, no. Mr. BROWNSON. You made no representations that a school would be promoted in return for your dollar a year lease? Mr. LADD. No; absolutely not. Mr. BROWNSON. That was not a consideration? Mr. LADD. No. To make this clear, I do not know whether you got it awhile ago, I stated awhile ago that I absolutely would not ever have considered taking over the Bunker Hill Naval Air Base without someone knew all about it from one end to the other, where every valve and light line, sewer and pipeline and pump was. Mr. Curran did not approach me. I approached him. Mr. BROWNSON. You approached Mr. Curran? Mr. LADD. That is right. Mr. BROWNSON. Did Mr. Curran help you to get this interim permit through Bunker Hill and through the Navy? Mr. LADD. None whatever. He was in the employ of the Navy. Mr. BROWNSON. He did not? Mr. LADD. No. Mr. BROWNSON. But you let him know that you would like to have him work for you, once his active duty had been terminated with the Navy? Mr. LADD. That is right. Mr. BROWNSON. You talked a little while ago about another corporation which Duke Harrah mentioned to you at the time he asked you to invest $5,000 in the Bunker Hill School of Aeronautics. You under stood at the time he asked you to invest the $5,000 that the Bunker Hill School of Aeronuatics was a nonprofit corporation. Did he tell you that? Mr. LADD. Well, you can take out expenses of a nonprofit organization. There will be no taxes, but officials and instructors would be well paid, he explained. Mr. BROWNSON. And the directors? Mr. LADD. Yes, directors. I was to be a director of it. Mr. BROWNSON. You were to be a director of this nonprofit corporation, and he led you to believe that there would be certain problems, but that those problems would come out of expenses, would be paid as expenses to keep? Mr. LADD. Yes; that was the natural expense of the school. Mr. BROWNSON. Then he talked to you about another corporation which was, apparently, organized, and that was the corporation which was to be for profit and which was to make its revenue by renting tools and facilities from the Bunker Hill School of Aeronautics at a very nominal fee in order that it might conduct its own operations in the repair of large aircraft for profit? Mr. LADD. That was the proopsition that they made to myself and Mr. Curran. Mr. BROWNSON. And you thought that having been in the aeronautics parts business that that was a very logical type of an operation, maybe even more logical than a school type of operation for Mr. Harrah to be in? Mr. LADD. Yes, but not for me. I have never invested in anything that I knew nothing about. And I knew nothing about a school or airplane repair. I was not interested in any way, neither was Mr. Curran. Mr. BROWNSON. You said a little while after that, we were afraid that they were going to be in trouble with the Navy if we did not get a lease, and then a little while after that, the town of Bunker Hill was after us to get a lease. Why was that pressure applied to you on the part of the Navy on the part of the Bunker Hill to get this lease with the Bunker Hill School of Aeronautics accomplished? Mr. LADD. Can I read you one letter here? Mr. BROWNSON. I would like to have it. Mr. LADD. I would like to give you the trouble we had with those fellows out there. Mr. BROWNSON. Of course, what I want to get at first-I have another question about the difficulty in consummating the lease-what I am interested in is if you know why the Navy and the town of Bunker Hill were interested in your consummating your lease. You told me that you got the land and the base for $1 a year and plus the maintenance. You also told me that there was no specification as to the use you were to make of this facility. So I am just curious as to why the Navy and the town of Bunker Hill were insisting that you, who had already accepted the responsibility for the land, got the lease from the Bunker Hill School Mr. HOFFMAN. Would the gentleman yield, before he answers that. You said in there that you understood that there were no provisions. I wonder if he understands that, about the use of it? Mr. BROWNSON. That was my interpretation. Mr. LADD. Definite, what you have got to do with this building or what you have to put in this building out here, nothing definite about that, but we have pretty good information that the Navy spent over $100,000 there just in maintenance the year previous to our taking it over, after it was inactivated. We feel that we have saved the Navy $100,000 a year. We have kept the building up in better repair than they kept them up the last year. Mr. BROWNSON. The other point I wondered was why the Navy and the town of Bunker Hill were interested in your accomplishing this legal paper, this lease, with the school of aeronautics, where that pressure came from. Mr. LADD. Well, listen, if we did not get some income from all of this, the Navy would kick us out, if we did not keep the buildings up. That is the only means we have of doing all of this maintenance work. And we were not getting a dime out of those fellows. Mr. BROWNSON. Did the Navy inspect it periodically? Mr. LADD. Just a minute. If you have time here. I have something that is self-explanatory. The Navy inspected it quite often. And they expected that property to be really taken care of. Mr. BROWNSON. That answers my question perfectly. If that letter contributes to that and you would like to have it introduced in the record, I will be very glad to ask the chairman to do it, but I am perfectly satisfied with the answer you have given me there. Mr. CURTIS. I would like to have that letter introduced in the record. Mr. BONNER. What is the pleasure of the subcommittee? Mr. LANTAFF. Just put it in, Mr. Chairman. Mr. BONNER. Have the letter inserted at this point. (The letters marked "Exhibit 29A and 29B" follow :) EXHIBIT 29A TOWN OF BUNKER HILL, IND., Mr. WAYNE LADD, President Bunker Hill Corp., Bunker Hill, Ind. DEAR MR. LADD: Today Capt. R. R. Briner stopped off at the Bunker Hill Air Station and during the short time he was here he went through the different buildings now occupied on the property and expressed his approval of all the different operation now in the buildings with exception of the drill hall and hangar 7-W. Captain Briner was surprised that the heavy engines were placed in the drill hall building saying that the drill hall was not the place for such an operation. We hereby request that you take proper action to eliminate the placing of any more engines in the drill hall building it being apparent that the ones now there will have to be removed. Also there was an automobile parked in the building which should not be permitted. Upon entering the hangar 7-W Captain Briner noticed a bucket of gasoline or kerosene setting just inside the door which apparently had been used to wash parts and also some paint thinner in 5-gallon cans and also some oily engines or parts of airplanes which had oil paper about them. Of course there was an objection to this and the paint sprayer near the west door is still there after previous notice from this board that it be removed and that no more spraying be done in this hangar. Also noticeable was the truck parked along the back side of the hangar 7-W. Trucks are not to be parked next to the hangar in such a manner and this truck must be removed. It is definitely the duty and the intention of this board to comply with the request of the Navy in every detail and we expect the Bunker Hill Corp. to comply with this request. The property around the west side of hangar 7-W is in a deplorable condition and should be cleaned up promptly. It is apparent that the use of the drill hall building as it is now being used cannot be permitted and very probable the material in this building will have to be moved out. In order to eliminate additional labor, etc., in the removal of the engines, etc., from the building you are warned against permitting any more material being moved in. Another inspection trip will be made by some member of this board to see that these requests are carried out. We suggest that you make proper complaint to the Bunker Hill School of Aeronautics asking them to comply promptly to these requests, and orders should ha nromptly issued to the proper officer saying that these requests must be obeyed. Yours very truly, D. C. SHREVE, Secretary, Board of Aviation Commissioners. EXHIBIT 29B AUGUST 7, 1947. BUNKER HILL SCHOOL OF AERONAUTICS, INC., Bunker Hill, Ind. GENTLEMEN: We are enclosing copy of letter received this morning from the Board of Aviation Commissioners, Town of Bunker Hill, Ind., which is selfexplanatory. Captain Briner was very critical of the conditions outlined in the Board of Aviation Commissioners letter of August 6, and directed both Mr. Shreve and the writer to see that same were corrected immediately. In view of the above it is imperative that the Bunker Hill School of Aeronautics, Inc., abide by the requests contained in the enclosed letter at once. Yours very truly, The BUNKER HILL CORP., General Manager. Mr. LADD. I find every letter but the one I want here. We have one here that gives the results of one of the naval officers' inspections made down there. He found things in almost a deplorable condition. Mr. BROWNSON. You can give that to the reporter after the session and he will insert it. There is one point I would like to clear up. What did you understand that you were to use this property for after you had paid the dollar and made the agreement to maintain the base? Mr. LADD. It was our duty to rent the base buildings and farm land and get revenue in to keep all of the Navy's property up. We had a free rein there in trying to work out deals of this kind and that kind, but we could not let anyone have a building without a lease signed and sent in to the Bureau of Yards and Docks, and they would inspect the lease. And we all had very good deals and everything and about always gave us an O. K., but we could not do anything with any tenant without first having a signed lease and sending it in to the Bureau of Yards and Docks. Mr. BROWNSON. They have approved all of the agricultural leases that you have made on the land? Mr. LADD. Yes, that is right. Mr. BROWNSON. And the lease to Ford and General Motors and all of the others, they have been approved by the Bureau of Yards and Docks? Mr. LADD. That is right; yes. Mr. BROWNSON. You mentioned the fact that you were able to arrive at an amount of money which seemed to be satisfactory to the Bunker Hill School of Aeronautics, but that they would not sign the lease because of the restrictions that you wanted to put into it to protect |