Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1918-02-02
BAKERS BROTHER IN BAD.
Organized Company Which Sought &c
Obtain Valuable War Contracts.

| Washington, Feb. 2-Revelations re-
! garding the remarkable scope and gen.
orally satisfactory progress in the gov
ernment's aviation program for the war
were given to the senate military af-
/ fairs committee. together with a dis
| closure OF a s921,000 contract for air
| plane parts negotiated with a new
manufacturing concern organized by
H. D. Baker, of Cleveland, brother Of
the secretary of war.
Testimony which surprised the COM
mittee, given by Col. E. A. Deeds, in
command of the equipment division of
the signal corps. revealed that the Sc
retary's brother hesieged the signal
corps for an airplane contract as early
as last June. even before he had or
ganized a concern. but that he was not
given a contract until he had organ
lied the F.ngel Aircraft Company of
Cleveland. OF which he is the presi-
dent.
\ report on the company issued by
Bradstreet shows that It was organized
last July with a capital of 100000,
with s3S.61o paid in cash and s2.22o.000
represented by land. plant. machinery.
equipment and good will"
The report shows that s1.00O000 of
common stock was issued for good
WILL" and that another million dollars
of common stock was issued outright
to II. D. Baker. as president of the
company, with the understanding that
one share Of common stock was to be
given free with each share Of preferred
stock sold.
Colonel Deeds testified that the air
craft division would have nothing to do
with Baker until he could show that he
had a plant that could deliver, After
that he is said to have organized the
company and procured plant with n.
]. Engel, formerly of the Curtiss Com
pany, as the practical airplane man.
The Baker company. Colonel Deeds
said. had been doing good work.
Members of the committee proposed
to look into the contract minutely.
Secretary Baker later issued a state
ment announcing that he had caused
his brother to withdraw from the En-
gel Company
The matter Of the Engel Aircraft
Company is of interest only because of
the personal relationship between my
brother and me-" said~the secretary.
Long before America entered the
war my brother told me that he was
interested with a Mr.. Engel, an air.
plane expert, in the development OF
flying boat. He later told me they
were forming a company to nanufac-
ture airplanes.
subsequently. and after our en-
trance into the war, I learned that the
company had contract with the air.
craft production board. I asked Cen
eral Squier about it. and was advised
that they had a small contract for the
manufacture of parts, that the COM
pany was excellently equipped. and was
making good progress.
while on inquiry I learned that the
men in the company with my brother
are men Of the highest business stand
ing and integrity. and that they formed
the company with a view primarily or
aiding the government, and that the
contract under which they were pro-
ceeding was the usual contract entered
into with any persons equipped to fur
nish supplies Of this character. I,
nevertheless. realized that the situation
had inevitable embarrassments in it.
thereupon called in General Squier
and directed him in my name to- can
eel the contract. !
at my request, Eugene Meyer, Jr.,
then went to Cleveland and discussed
the matter with the directors and my
brother. My brother generously re-
signed from the company and arranged
for the termination of his financial in
terest in 1t on the basis of the return
to him Of his actual cash outlay, with
interest, but without profit: his only
compensation being for the time actu-
ally devoted to the affairs Of the COM
pany on a reasonable salary basis His
interest in the common stock OF the
company is returned to the treasury of
the company.
1.-THE company had not begun the de-
livery of its product. My brothers
withdrawal. therefore. takes place be-
fore any actual financial transactions