Evening star., 1934-02-01
|5M|LL|ON PROFIT
| Barred TOPROBERS
Senate Mail Committee Told
Of Aviation Financing
y by National City.
By the Associated Press.


By the Associated Press.
Profits of $5,895,l11 made BY the
National City Co. from United Aircraft
d Transport financing from 1929
through 1880 were outlined to the SEN
ate Mail Investigating Committee today
by Joseph P. Ripley, an officer of the
investment concern.
Ripley, now executive vice president
of National City Co., the bank affiliate's
successor formed in May, 1888, said
losses had resulted in United stock op-
erations since 1890
He told of interlocking directorships
of the National City Bank and United
Aircraft & Transport
Gordon S. Rentschler, now president
OF the bank, is a United director. he
said adding that Col E. A. Deeds and
W. E. Boeing also we're directors Of
both organizations.
RentSchler is a brother of F. 3
Rentschler. who testified recently to
having made millions in United stock
from an investment of less than $3.50
IN Pratt & Whitney Aircraft Co.
The total going into the treasures of
Boeing Airplane Co. and United Air
craft from the financing accompany
ing their consolidation was Sl3, ,789 900,
he testified
Meanwhile. Postmaster General Far
ley reiterated at a press conference that
the department was studying existing
air mail contracts TO determine whether
any should be cancelled in view Of
recent disclosures before the Senate
Committee. He indicated a decision
might be reached within a week.
Can Cancel Contracts
The Postmaster General has been ad-
vlsed by his attorneys that he has the
authority to cancel contracts
Boeing and United stocks were first
offered to selected lists, Ripley testi-
fed.
Il was 5000 miles away, in Seattle.
when the names were selected" he
said, adding he thought they were CON-
piled by H. B. Baker, sales manager Of
the company, assisted by Charles E.
Mitchell, then president of the National
City Bank.
The National City profits from the
transaction by which Boeing Airplane
& Transport, having absorbed Pratt g.
Whitney Aircraft Co., became United
Aircraft, amounted TO nearly $4,000, 900,
Ripley said
This, he added, included profits made
from STOCK purchased from F. B. Rent
schler and associates for approximately
$4,000 900. He testified that Rentschler
Is brother of Gordon Rentschler. now
president Of the National City Bank,
and then vice president.
A Lane Cricher, former chief OF
transportation of the Bureau of Foreign
and Domestic Commerce, testified he
could not remember an instance in
which the International Mercantile Ma
rlne failed to obtain a mail contract it
bid on
Crlcher denied he had participated II
conferences to arrange proposed ocean
mail contract awards so as to eliminate
competitive bidding. He had been a
member of a departmental committee
considering contracts.
Black asked if International Mer-
cantlie Marine representatives appeared
before the committee urging an award
to the Philadelphia Mail Steamship Co.
Cricher said he had voted against
the Philadelphia Mails proposed con-
tract, and agreed that it was removed
from the committees consideration.
Among those appearing before the
board was Kermit Roosevelt, he said.
Cricher testined that w. Irving
Glover. former Assistant Postmaster
General, urged mail contract for the
Columbian Line. of which former Sen
ator Edge Of New Jersey was a director.
Black read from committee records,
quoting Glover as saying:
Il think it well to word your adver-
tisement Of a mail contract so that it
will fall into the lap of the Columbian
line"
The United Fruit will be your buga-
BOO, he was quoted as adding.
Black Questions Ripley.
Chairman Black questioned Ripley as
to the extent of the investigation made
by such companies as the National City"
in underwriting a stock to ascertain
whether the public gets its moneys
worth.
Ripley answered that his company
made a more thorough investigation
than any other investment concern.
Black pressed him as to whether he
knew the money paid to Rentschler
and his group was for stock that rep
resented an investment of $1,000.
Answering, Ripley said his company
hadn't been concerned with original
investment, but with current earnings
and assets. Assets were So 900 600 in
excess of the par value of preferred
stock to be issued he said. adding
earnings were ample and increasing.
The National City preferred list for
Boeing Airplane and Transport units,
consisting OF 10 preferred shares.
common and stock warrants, in
cluded according to the testimony. H.
B. Baker, Bernard NJ. Baruch, Gordon
S. Rentschler, Charles E Mitchell, E.
P. Swenson, Col. Sosthenes Behn. Guy
Cary. Percy Rockefeller, James A
Stillman and Col. R. w. Stewart.
McCracken Testifies.
The Senate investigators turned their
attention yesterday to another former
Government official, W. P. McCracken,
one-time Assistant Secretary of Com
merce in charge of aviation, and were
baked at least temporarily when he re-
fused to submit his private files relating
to his representation of companies seek
ing airmail contracts
McCracken, now a WASHINGTON attor-
ney, testified to his solicitation of mail
contracts for numerous well known
aviation concerns both before and after
leaving Office. but insisted correspon-
dence between a lawyer and his client
was privileged"
The former official, who held his
Government position from 1925 to 1929.
said that as an attorney he had repre-
sented Pan-American Airways, National
Aviation, Western Air Express. Colonial
Air Transport, the New York-Buenos
Aires Air Transport. Kohler Aviation
Co, Pan-American Grace Air Lines.
Transcontinental and Western Air ana
Northwest Airways. among others.
Solicited Contracts.
His work for most of them was the
solicitation of airmail contracts. and
the appearance before various Govern
ment bodies, such as the Federal Radio
Commission
After McCracken had asserted he
felt solemn duty" not to divulge the
correspondence which committee in
vestigators had sought in his office ear-