The sun., 1919-10-28
FISK is QUESTIONED
IN PLANE INQUIRY
Financier Denies He Played
Into Hands Of Milwaukee
y Railroad.
SPRUCE ROAD DISCUSSED
Representatives Wish to Know
Why Costly Line Was Built
by War Department.
SPRUCE ROAD DISCUSSED


vestigating' fraud and graft charges In
connection with the country's airplano
programme opened hearings yesterday nj
the Federal Building and turned the
searchlight upon dealings relating to
the building Of railroads and develop
ment OF the spruce regions Of the North
west
In its inquiry to find out where $1,-
$50. 100000 went, the committee IL Just
nov concentrating on two questions
why a thirty-eight mile railroad costing
$4.U00.0OO was built instead OF a dfteen
mile road costing S350,000, and why
Secretary of war Baker intervened ana
obstructed the court-martial which the
Hughes report recommended for Col.
Edward A. Deeds. ex-chief signal officer.
Pliny Fisk of Harvey Fisk & Sons
was the chief witness yesterday and
John ID. Ryan will be the principal
witness tomorrow Mr.. Fisk explained
at great length, and not with
out exhibiting more or less I'M
patience, when Meier Steinbrink. as
counsel and EXAMINER, and Repre-
sentative James A. Frear of Wiscon-
sir (chairman). Walter w. Magee
of New York and Clarence f. Lea OF
California (Democrat) inquired why he
was frozen OUT in dealings he had
relative to the Northwest railroad which
was to carry spruce from the rich re-
gions in the State of Washington.
He Withdrew Suddenly.
Mr.. Fish told how John Cain and
Franklin Helm interested him in the
opportunity and how he took prelimi-
nary steps to get War Department
contract to build the railroad and bring
down the spruce. Suddenly, though, he
withdrew from all negotiations and the
Siems-Carey- -Kerbaugh Corporation. en-
gineers, went through with an amended
and far more costly plan. Millions of
dollars were involved. with profits guar
anteed by virtue of the cost-plus con-
tract system of the War Department
system which the Hughes report at
tackled.
But despite the profits assured, Mr.
Fisk said he withdrew when the STEMS
Carey -kerbaugh firm, which originally
was his partner in the financing
scheme, sought to have a bonding COM
pany insure them against losses they
might sustain through Mr. Fisks firm.
II was very much disappointed" said
Mr.. Fisk, implying that that act was an
objectionable violation of business
amenities which led him to end his con-
nections with the contract.
Not satisfied that Mr.. Fisk would drop
so improbable a venture on such slight
provocation Mr.. Steinbrink sought TO
attach to Mr., Fisk's motives a deeper
desire to play into the hands of the
Chicago, Milwaukee and st. Paul Rail-
road-to find some supporting evidence
for a charge that the expensive road
was built so that in time it might be-
come the property OF that railroad Like
wise the examiner endeavored to link
Mr. Flax with Secretary McAdoo and
others influential in Washington. But
Mr.. Fisk's story. repeated over and over
to each committee member. contained
no evidence supporting those charges.
The figures mentioned were large the
division of profits commensurtely large,
AS banker Mr.. Fisk's concern was to
divide with the Stems Carey -Kerbaugh
, company the first 100000 derived, SO
Mr.. Fisk testified. That arrangement
and subsequent ones fell through, lie
pointed out, when he withdrew from the
negotiations.
$4,000 Is Explained.
Mr.. Fisk explained a matter of $40.
| 900 which the Stems company gave him
| 1t was reimbursement for the expenses
| he and Cain and Helm incurred in un-
| dertaking and then Withdrawing from
| the contracts. 1t was divided three
| ways, he said. When the questioners ex.
pressed surprise at the small amount
taken in lieu of the big contracts. Mr.
| Fisk pointed out that legal processes
were expensive and he thought it more
| judicious to close the matter then ano
there at $4,000.
| 81 absolutely repudiate seeking any
influence" he declared emphatically
when testimony of previous hearings il
| the middle West was referred to. Sim
| ilarly he branded as IAN unqualified
malicious and libenous falsehood" for
mer Mayor OF Portland NJ. ]. Carrigan'.
| testimony that Mr.. Fisk had gone t
McAdoo and said BILL am interested
in a railroad and in spruce production
in the West. You've got to help me
I, The skids have been CREASED in favo
of the Milwaukee. You and have livec
and died and been through hell and beer
resurrected together
/ Mr. Fisk left the language of tina
alleged quotation of him as evidence
that he did not utter those sentiments.
Cain and Helm also testified as {,
how the Stems concern finally got tn
contract which they and Mr.. Fisk hat
first sought Helm, a contractor, SAT-
that when Carey OF that concern offere,
him S150.000 for his interest in the con
tract he told Carey TO go to hell" callet
him n yellow dog" and other epithet
(Which were stricken from the recor,
by general consent).
At the end of the session the sharl
eye of Mr.. Steinbrink fell upon a dill
gent shorthand reporter. Under oat1
the shorthand expert said that he ha.
been sent to the hearing by an attorne,
representing Mr.. Ryan, who will testlf
with others prominent in the aircraf
programme and financing. The session
will be resumed to-day.