Mr. TOOLE. Yes, sir.

Mr. FLANAGAN (continuing). The record indicates that sometime in June of 1949 your corporation applied for another loan with the RFC

Mr. TOOLE. Yes, sir.

Mr. FLANAGAN (continuing). Of roughly $550,000.

Were you called in to work on that second loan by Mr. Blauner? Mr. TOOLE. Well, I think that would be subject to qualifications because I was not called in to work on it in the same degree and manner that I had customarily worked on previous loans.

I was told about it only in a casual sort of way. I was not asked to participate in it very directly. I might have gone over the application after Mr. Stanhope prepared it, but that application almost from the start to finish, with its varying degrees of changes in amounts, and so forth-in other words, it started out, we will say, at $518,000-I think it did; it was changed probably to suit somebody's idea in the RFC to cover some other items that had not been fully comprehended in the original thought, maybe to $558,000, and then finally down to $500,000, and finally, I think to $600,000, but I am unfamiliar with all of those various processes because, as I say, I was not actually in on that thing in the manner in which I usually worked loans and handled loans.

Mr. FLANAGAN. Were you the only official of the American Lithofold that had any intimate knowledge of the workings of the RFC? Mr. TOOLE. Well, I guess I was the only one that had a real close intimate knowledge, because the others only got it through me. There was nobody there from the RFC.

Mr. FLANAGAN. Do you know why the Corporation did not call upon a man of your background and experience to assist them on this next big loan they were requesting?

Mr. TOOLE. Maybe they thought I could not do as well as somebody else.

Mr. FLANAGAN. Well, let us turn to your diary entry now of June 24. Senator NIXON. Mr. Chairman, may I ask a question?

Mr. Flanagan, would you allow me at this point to interrupt-the diary entry of March 4, I thought, was interesting, and I would like to have Mr. Toole's comment upon it, the second sentence of the entry, which reads:

Had lunch with R. J. Blauner and acquainted him with the strange, strenuous and finally satisfactory solution of our RFC loan application.

Your reference to a strange solution of the RFC loan application, I was wondering what facts you based that conclusion on?

Mr. TOOLE. Well, I think the gentleman who just interrogated me a moment ago had the same idea that I had. It was just a conjecture. I could not tell, there was not any new information, as I say, presented, so that is the reason, as I say, I used the term "strange.

Senator NIXON. In other words, your judgment at the time was that this was a rather unusual action on the application in view of the fact that no evidence had been submitted.

Mr. TOOLE. The way it came out; yes, sir.

Senator HOEY. Proceed, Mr. Flanagan.

Mr. FLANAGAN. Turn to your diary entry of Friday, June 24, 1949

Received air mail special delivery letter from Stanhope at noon saying he had talked with Mr. Leachen about my going to Washington and doing the "ground work" preparatory to applying to RFC to take up the Heller & Co. loans-but he also stated R. J. Blanner

Senator MUNDT. What page is that on?

Mr. FLANAGAN. Page 52.

Senator HOEY. Fifty-two, June 24.

Mr. FLANAGAN (continuing):

had been talking with Jim Finnegan whom he desired to try and influence Manager Alexander of St. Louis RFC agency to get Heller & Co. loans taken up by the RFC.

Who is Mr. Stanhope?

Mr. TOOLE. Stanhope was, and I think still is, controller of the corporation.

Mr. FLANAGAN. He was located in St. Louis, was he not?

Mr. TOOLE. Yes, sir.

Mr. FLANAGAN. Was that the first information you had that they were going to use Finnegan rather than yourself to work on this second loan?

Mr. TOOLE. On this loan, I would not say second, because there were many loans made.

Mr. FLANAGAN. Well, on this loan.

Mr. TOOLE. Yes, sir.

Mr. FLANAGAN. I have here a longhand note which is the letter you are talking about

Mr. TOOLE. Yes, sir.

Mr. FLANAGAN (continuing). Addressed to you, initialed by Mr. Stanhope, and I will read that into the record since it is very short. It is dated June 24, and it is to Mr. Toole.

Mr. R. J. is having J. P. F. work on St. Louis and he also expects him to be in Washington, D. C., to help out there next week re the RFC. Apparently he doesn't want any other help at the present as he is in Washington, D. C., at present. Will keep you advised and sooner or later feel that he will need your assistance. Any suggestions. H. W. S.

Mr. TOOLE. Yes, sir, I remember that very well.

(The document referred to was marked "Exhibit No. 1.") Mr. FLANAGAN. Who is J. P. F. mentioned in here?

Mr. TOOLE. Well, I assume James P. Finnegan, because by that time I had seen him and heard a good deal about him. This was in

1949.

Mr. FLANAGAN. From that time until that loan was approved in September of 1949, were you ever asked by Mr. Blauner or any other official of the company to do any amount of substantial work in connection with the loan?

Mr. TOOLE. No, sir.

Mr. FLANAGAN. In other words, from then on you were left out of the picture?

Mr. TOOLE. Yes, sir. That loan was made absolutely independent of my knowledge, judgment, belief, association, or anything else. I had no part in it whatever.

Mr. FLANAGAN. During the time that that loan was pending at either St. Louis or Washington, did it ever come to your attention who was handling it for your corporation?

Mr. TOOLE. Well, no, I can't say that I knew definitely who was in charge, who was directing it. I can't say that, no; I didn't know it. Mr. FLANAGAN. Did you ever have any indication who was handling

it?

Mr. TOOLE. Well, ostensibly Mr. Stanhope, being controller, and next to me in financial authority there, might have been charged with the responsibility, at least to make an application and in taking or sending papers to the RFC. Mr. Blauner, of course, was the head of the corporation.

Mr. FLANAGAN. Do you know who was discussing it with RFC officials in St. Louis and in Washington?

Mr. TOOLE. Well, through Stanhope, I think I heard, that numerous ones had discussed it with Mr. Alexander, the manager in St. Louis. I think Mr. Finnegan did discuss it with him.

Mr. FLANAGAN. Did Stanhope ever tell you that Finnegan was discussing this loan with officials of the RFC?

Mr. TOOLE. Yes, sir; he did.

Mr. FLANAGAN. What did he say?

Mr. TOOLE. I don't recall anything especially outstanding, anything that he said that would be of any particular interest.

Mr. FLANAGAN. But he did say that Finnegan was handling the loan?

Mr. TOOLE. He was helping in it; yes, sir.

Mr. FLANAGAN. Assisting in it?

Mr. TOOLE. Yes, sir.

Mr. FLANAGAN. Who other than Finnegan was working on it? Mr. TOOLE. I don't know; I don't know of anybody else.

Mr. FLANAGAN. Did he ever state why they were using Finnegan? Mr. TOOLE. No; he made sort of a vague veiled reference, as you read, I think, a moment ago in that memorandum from Finnegan, that Mr. Blauner intended to handle that locally without my help, or some such expression as that, and I could tell from the outset of this beginning of this new loan that they didn't expect to have me to participate in it, and, naturally, I was loath to inject myself into it, and I didn't learn or hear or know too much about what was going on. I might say this, though, on several occasions during the pendency of that application I was in and out of Washington and heard men speak about the case being there, but I don't think they knew much more about it than I did.

Mr. FLANAGAN. But you were not working on the loan?

Mr. TOOLE. No, sir.

Mr. FLANAGAN. The same as you worked on the previous loan?
Mr. TOOLE. No, sir. I never did work on that loan.

Mr. FLANAGAN. After that loan was approved in September, did you ever have occasion to discuss it with any of your old friends in the RFC?

Mr. TOOLE. Well, I don't know about discussing it. I think one of my old friends met me in the corridor one day and said, "Hello, J. E., I see you have got another big loan through the other day." I says, "What do you mean?" And he elaborated by mentioning this

loan you are speaking about now. I said, "Well, I had no part in it." This friend, who customarily and usually had to do with all loans of any large amounts, said, "I didn't either." He said, "It was done up there," pointing toward the Directors' room. So evidently it was unknown to the man in the usual channels that handled the loan as well as it was to me.

Mr. FLANAGAN. When did you have this discussion with that friend, was it shortly after the loan was made?

Mr. TOOLE. I don't recall the month. It is in my diary there, is it not?

Mr. FLANAGAN. No, sir.

Mr. TOOLE. I see. I guess that is another reason it was not in my diary because I was so little acquainted with what was going on, I did not see any significance or set any significance upon it, because I had no part in it.

Mr. FLANAGAN. Who was this man who told you that he did not know anything about this loan either, saying it was handled upstairs, meaning the Board of Directors?

Mr. TOOLE. Would I have to say that?

Mr. FLANAGAN. I think it would be helpful.
Mr. TOOLE. I think it was Mr. Howard.

Mr. FLANAGAN. Was it Mr. Ernest Howard?
Mr. TOOLE. I think so.

Senator HOEY. Any further questions?
Thank you, Mr. Toole.

Senator NIXON. I want to ask a question.

Senator MCCLELLAN. Do you know whether Mr. Finnegan was paid anything by the company for his services?

Mr. TOOLE. No, sir; I had no knowledge of that, sir. You see I was, as I think I stated yesterday-I did not have much to do with check writing, so I didn't see the expenditures generally. It was only on exceptional occasions. I think I did mention yesterday about an expense voucher that was shown to me by Mr. Stanhope, and I commented on that, but I didn't know of any pay he was receiving as such as a lawyer or assistant in any way.

Senator MCCLELLAN. Has it since come to your knowledge that he was being paid?

Mr. TOOLE. It has in the papers but not through the company. Senator MCCLELLAN. Through any source that would be authentic, any official source, from the company?

Mr. TOOLE. That is right, no authentic source from the company; no, sir.

Senator NIXON. Mr. Chairman, I have a question.

Senator HOEY. Senator Nixon.

Senator NIXON. Mr. Toole, I wanted to ask about your relationship with Mr. Green, Cecil Green, that is.

Mr. TOOLE. Yes, sir; I know.

Senator NIXON. Not the corporation counsel.

Mr. TOOLE. Yes, I know, but this other man I have only known for a very limited time. I think the first time mentioned in my diary was sometime in 1948, if I am not mistaken. I think you can verify that as good as I, and then at intervals I saw him just infrequently on my trips from working down here, but I didn't know him very well.

Senator NIXON. When he was employed by the company did you have anything to do with the making of the agreement for employ

'ment?

Mr. TOOLE. No, sir; I had nothing to do with the employment of anyone with the corporation.

Senator NIXON. Did Mr. Blauner discuss the fact that Mr. Green was to be put on the payroll?

Mr. TOOLE. No, he did not.

Senator NIXON. You were aware, of course, he had been?

Mr. TOOLE. After I had come into the office on one occasion and was introduced to him and was told he was part of the Washington personnel, that was the first time. I think he had been there probably a couple of months at that time.

Senator NIXON. Do you have any recollection of what Mr. Green did for the company, of your knowledge, other than his activities in regard to this loan?

Mr. TOOLE. No, I don't know personally of anything.

Mr. NIXON. Was he engaged in sales in Washington?

Mr. TOOLE. I heard that he did have to do or tried to have some helpful influence in that way.

Senator NIXON. It is my understanding that you have testified as of yesterday that you do not know that Mr. Finnegan was receiving money from the company.

Mr. TOOLE. That is right.

Senator NIXON. Except the two expense vouchers.

Mr. TOOLE. That is right.

Senator NIXON. Did you know, as I understand, you have already answered this question today, but I want to reiterate it at this point

Mr. TOOLE. Yes, sir.

Senator NIXON. You understood that Mr. Boyle's intervention also was on a voluntary basis rather than on a compensation basis.

Mr. TOCLE. I don't know anything about his real employment, if any at all.

Senator NIXON. You did not know that?

Mr. TOOLE. Sir?

Senator NIXON. You did not know he was on the company's payroll?

Mr. TOOLE. No, sir; never did know that.

Senator NIXON. Do you know Mr. Siskind?

Mr. TOOLE. No, sir; I never knew him. I read about him in the papers about getting subsequent checks, and so forth, but I didn't know anything about it.

Senator NIXON. You never met Mr. Siskind?

Mr. TOOLE. No, sir; I don't think I have; if I have I don't remember it.

Senator NIXON. Do you know of anything Mr. Siskind did for the company from the period, say, March 1948, to date?

Mr. TOOLE. No; I didn't know that he had employment with the company until I read that in the paper.

Senator NIXON. I know you recognize you did not know he had employment with the company

Mr. TOOLE. Yes.