time. I mean, when I say all the time, very often, pending the granting or refusing to grant this loan. Senator NIXON. What incident occurred, apart from the production of new evidence, new financial statements, or the like, what incident occurred, besides the call that was made to Mr. Hise after Mr. Boyle's intervention, what other incident occurred between February 28 and March the 3d which might have influenced the change in the loan between February 28 and March 3? Mr. TOOLE. That I could not answer you because I don't know of anv. Senator NIXON. Do you know of any incidents that occurred? Senator NIXON. You know of no other incident that occurred, except the call that was made by Mr. Boyle to Mr. Hise and the conference that followed the call by Mr. Boyle? Mr. ToOOLE. No, sir; I do not. Senator MCCLELLAN. Mr. Toole, how many times prior to the occasion that you called on Mr. Boyle to make an appointment with Mr. Hise, how many times prior to that, had you personally seen Mr. Hise regarding this loan? Mr. TOOLE. I couldn't say positively that it was more than once; it might have been twice, but I would not say that definitely under oath because I am not sure about it. I don't think I ever saw Mr. Hise about this loan or any loan, and I only saw him about the American Lithofold loan-I think about three times; I think that was all; I mean a total of three times. Senator MCCLELLAN. And the other two times were prior- Senator MCCLELLAN. To the time that Mr. TOOLE. Mr. Boyle called. Senator MCCLELLAN (continuing). Mr. Boyle made the appoint ment. Mr. TOOLE. I think so. Senator MCCLELLAN. Then, would you say it was necessary to get any outside person, Mr. Boyle or anyone else, to arrange an appointment for you with Mr. Hise? Mr. TOOLE. No, I never found it necessary. The two occasions that I think, as I said there were two, I made an approach to his office, the same as any other man. Senator MCCLELLAN. Had anything developed to indicate that you would not be able to get another appointment if you sought it? Mr. TOOLE. No, sir; I had not conducted business in a way that I could not return, so far as I knew. I thought I could go back the same as usual. Senator MCCLELLAN. Then, what could be the purpose and what did you understand was the purpose of contacting Mr. Boyle at that time to get him to call Mr. Hise? Mr. TOOLE. It was simply a surmise on my part. I didn't know what Mr. Blauner had in mind-Mr. Blauner's thought and his friend's who suggested this interview with Boyle. I never had thought of that, never dreamed of it and didn't like the idea, as I have already said here. Senator MCCLELLAN. And knew it was not necessary so far as making an appointment. Mr. TOOLE. That is right. I knew it was not necessary. Senator MCCLELLAN. So it had to be for some other purpose aside from that. Mr. TOOLE. That is the way it looked to me, sir. Senator MCCLELLAN. According to your judgment at the time and now. Mr. TOOLE. Yes, sir. Senator HOEY. Mr. Toole, I noticed in your conversation with Frank Prince on March 1 that he intimated that he might have a special meeting Mr. TOOLE. Yes, sir. Senator HOEY (continuing). That day. I believe the special meeting was not held. Mr. TOOLE. I believe that is true, although I am not sure about that. There were occasional special meetings, as I understand it, when all directors or, that is, a quorum was present and possible to be heldSenator HOEY. Yes. Mr. TOOLE. Where some urgent matter would come up like that, but I can't say Senator HOEY. Now, the regular meetings were on Monday and Thursday. Mr. TOOLE. That is true. Senator HOEY. Those were the regular Board meetings. Mr. TOOLE. Yes, sir. Senator HOEY. And on this occasion when Mr. Prince mentioned that a special meeting might be held, it was not held, but the matter was brought up and passed on at the meeting on Thursday, the 3d of March. Mr. TOOLE. Yes, sir. Senator HOEY. All right. You may proceed, Mr. Flanagan. Senator UNDERWOOD. Let me ask one question, if I may. You said in your earlier testimony that the operating practices of the company were to be changed, the salaries were to be lowered, or the commissions to be taken out by the family in control were to be lowered. When did that happen, when was an agreement reached on that? Mr. TOOLE. I don't think I testified to that, did I? Wasn't that Mr. Williams? Senator NIXON. Senator, I think it was Mr. Williams. Mr. TOOLE. I had not testified. I had no arrangements about the composition or whatever might be arranged for paying commissionsI had no knowledge of how that was done. I never was consulted about that. Does that answer the question? Senator UNDERWOOD. Yes. Senator HOEY. Mr. Toole, one further question: I believe when this proposition was submitted, you were asking for $125,000, that much money as a loan. Mr. TOOLE. Yes, sir. Senator HOEY. And finally when they acted on it on Thursday they made an $80,000 loan? Mr. TOOLE. Yes, sir. Senator HOEY. It was approved for $80,000 and not for $125,000. Mr. TOOLE. That is right; yes, sir. Senator HOEY. Was that a customary thing for them to do to modify and change the application or the orders in granting the loans? Mr. TOOLE. Yes, I think that was done frequently. If they didn't believe that a loan of an amount suggested or asked for was commensurate with the situation and was not warranted, they would often give a lesser amount, which was done in that case. Senator HOEY. Yes. Whether there were any changes in the conditions at all, the loan was not approved in the amount that it was declined for before, and that was $125,000, but was approved for $80,000. Mr. TOOLE. That is right; yes, sir. Senator HOEY. Proceed, Mr. Flanagan. Mr. FLANAGAN. Now we go to March 2, Wednesday, March 2 and your diary states this: was at the RFC before 10 o'clock called on Frank Prince and he had a luncheon appointment with Congressman Boykin which prevented our lunching together today. Prince said our loan might be handled by special action of the Board this p. m. Charlie Lewis told me of a talk he had with George Luce, chairman of the review committee. Luce said the Rec. Com.-that looks like it should be review committee had striven to find a way of recommending our loan on my account and all of them wanted to be of help to me, but could not justify such action because of the "record of heavy commissions, extravagant management, etc." Do you recall that conversation with your friend, Mr. Lewis? Mr. TOOLE. Yes; I do. Mr. FLANAGAN. And he was passing on to you information that came from the chairman of the review committee? Mr. TOOLE. You mean Charlie Lewis? Mr. FLANAGAN. Yes. Mr. TOOLE. That is correct. Mr. FLANAGAN. And, as I gather from your diary, Prince had advised you that day, March 2, that your loan was coming up that afternoon for a special meeting. Mr. TOOLE. That is what I remember him having said; yes, sir. Mr. FLANAGAN. I suppose at that time you expected that it would be brought up at that special meeting on Wednesday afternoon? Mr. TOOLE. That is right; yes, sir. Mr. FLANAGAN. Now, as a matter of fact, it never was brought up at that meeting, was it? Mr. TOOLE. I think not, because on the succeeding morning when I met Mr. Dickinson Mr. FLANAGAN. We can bring that out from the diary; we will go to that. Mr. TOOLE. O. K. Mr. FLANAGAN. We will go on to the next day, March 3. When I reached the RFC this a. m. and learned from my old friend, R. C. Dickinson, that our loan had not come before the Board, I nearly "ker flummixed," but quickly recovering my equilibrium I sped to George Luce's office and told him of our keen disappointment, especially considering the practical assurance yesterday by Frank Prince that if our loan did not receive I suppose the word is "receive" there special consideration yesterday p. m. it would surely come before the regular meeting today. Finally I persuaded Chairman Luce of review committee to hurry up to the Chairman of the Board's office, Mr. Harley Hise, and make a real appeal to reassemble the directors and get our case considered. In just 30 to 35 minutes Luce came back with the wonderful news: Chairman Hise did get a quorum together and approved our loan for $80,000. That was the quickest, most fruitful response I ever received from a request of an old friend. Now, do you now recall going to see Mr. Luce on the morning of the 3d and telling him that you were disturbed over the fact that your loan had not been taken up by the Board? Mr. TOOLE. I do. Mr. FLANAGAN. What did Mr. Luce tell you he would do? Mr. TOOLE. Well, he didn't immediately tell me he would do anything, but when I expressed my keen disappointment that it had not come up after having been told the previous day or maybe 2 days previous by two or three reliable friends, like Mr. Prince and maybe Mr. Dodds, I am not sure, but several had said they thought it would come up at the regular meeting, and when I learned it did not come up, of course, I was disappointed. I had been working on the thing a long time, and so I asked him-I heard this news from Dickinson about the thing not coming up just right after the meeting. He had just come out or had been told maybe by Mr. Griffin who had just come from the meeting that it did not come before the Board, so when I hurried up to the Luce office, as reported here, because I thought they might be reached before they adjourned completely, Luce finally was persuaded to go up and talk to Mr. Hise and see if he could get a quorum together and take some action, since it had been promised me all along the line that some action would be taken on it that morning. As he left the office, he said, "You just wait here, J. E., until I come back," which I did; and in the time mentioned he returned with the information that the quorum was gotten together and the loan was approved for $80,000. Mr. FLANAGAN. In other words, he left you and went up to the Board meeting and came back and advised you of the action of the Board? Mr. TOOLE. Yes, sir. Senator MUNDT. Now, the last statement: That was the quickest, most fruitful response I ever received from a request of an old friend I presume you are referring to your request to Luce to go up and see if he could not get Hise to reassemble the Board, is that right? Mr. TOOLE. Yes. Well, those statements are a little-when you are writing a diary-I don't know whether any of you gentlemen have ever kept one, I know I will never keep another one after this. [Laughter.] Senator MUNDT. I might say I do not believe this is damaging— this diary is particularly damaging to your prestige. Mr. TOOLE. I know, but I feel regretful of phases that enter into personal friendships because I had no knowledge or dreamed that it would ever come to the light of public attention. Senator MUNDT. You appeal to me as a good citizen Mr. TOOLE. I try to do that, sir. I don't want to be too good. Senator MUNDT. You may be a reluctant vehicle in this process. Mr. TOOLE. I am trying to do the best I can. Senator MUNDT. Let me see if I can reconstruct the occurrences in the three fast-moving but very important days in the financial experience of the Lithofold Co. At 4:15 on Monday, February 28, you were in Mr. Boyle's office, and he called up and made an appointment for Mr. Hise. At 4:30 you were in Mr. Hise's office for 15 or 20 minutes, restating to him information which you had been giving to him on previous occasions in connection with this loan. At 10 o'clock the next morning Mr. Prince told you that he expected special consideration and special action, I believe he said, at a special meeting that was to be held, yes; and on Wednesday, the next day, Mr. Prince told you that the loan might be handled by special action of the Board that afternoon; and on Thursday, the next morning, or next afternoon it does not say which, Thursday, the next day, you were advised that the Board had not acted. Mr. TOOLE. Yes, sir. Senator MUNDT. And so you sent Mr. Luce up to talk to Mr. Hise who reassembled the Board, in other words, he called them back after they had adjourned. Mr. TOOLE. Well, if you will pardon me for an interruption, I don't know whether they had actually left his office or wherever the meeting was held, but they were able to call the quorum promptly, because it was done. Senator MUNDT. The meeting was over with, and they might have been standing around chatting. Mr. TOOLE. I don't think they had gone to their respective offices. Senator MUNDT. Yes. They reassembled the Board or called the meeting back together, I do not know whether it was formal or not Mr. TOOLE. Yes. Senator MUNDT (continuing). But took this special action which has been stated. Mr. TOOLE. Yes, sir. Senator MUNDT. And at that time in just 35 minutes they were able, because of some new factor in the picture, to approve the loan which had been turned down for these many months, and that concluded you to say that it was the "quickest, most fruitful response I ever received from a request of an old friend," and I assume by that remark you do not mean the request of Hise to the Directors but your request of Luce to go up and have them reassembled, is that the picture? Mr. TOOLE. Yes, sir; that is correct. Senator HOEY. You may resume, Mr. Flanagan. Mr. FLANAGAN. After you obtained this or worked on this loan of 80,000, and it was obtained, I believe the record yesterday will show that sometime in June your corporation applied for another loan, a refunding loan of some $500,000. Were you asked to work on this second loan? Mr. TOOLE. What date are you referring to now, Mr. Flanagan? Mr. FLANAGAN. That after you had completed your work in connection with the $80,000 loan- |