Senator NIXON. Excuse me, Mr. Flanagan. Was your question whether Trans-World was handled by Mr. Wasson's group? Mr. FLANAGAN. Yes.

Senator HOEY. And American Viking.

Mr. FLANAGAN. I will state for the record that the Oceanic Marine Corp. was incorporated in Delaware on June 14, 1948, and as of that date you, Mr. Casey, were president, and the other members held other offices, and National Tanker held all the stock.

Did you have anything to do with organizing that corporation? Mr. CASEY. I was president of that corporation by virtue of having been president of National Tanker. Oceanic Marine was a wholly owned subsidiary of National Tanker, and it was set up in order to separate the Kettleman Hills from the Meacham.

They wanted to finance each vessel separately, with separate banks. That, again, was just for purposes of financing.

Mr. FLANAGAN. I asked you: Did you have anything to do with setting up or operating that corporation?

Mr. CASEY. NO; I don't think so.

Mr. FLANAGAN. In this corporation you again were merely a figurehead; is that right?

Mr. CASEY. That is right.

This was, as I say, a technical corporation.

Mr. FLANAGAN. And was all of the actual business of the corporation conducted by Mr. Wasson or other members of the United group? Mr. CASEY. I don't know that definitely, but I think that may have been.

Senator NIXON. Did they prepare the papers on this corporation, or did your office prepare them?

Mr. CASEY. I think they did.

Senator NIXON. And the same group, of Trans-World?
Mr. CASEY. Yes.

Senator NIXON. National Tanker you set up yourself?
Mr. CASEY. That is right.

Mr. FLANAGAN. As far as the Oceanic Marine and Trans-World were concerned, while you were president, you were merely a figurehead, and all the business was actually conducted by Mr. Wasson of the United group.

Mr. CASEY. I think that is right. I was a figurehead in corporations that were set up merely to finance these respective tankers, and I was in them by virtue of the fact that National owned the stock in them.

Mr. FLANAGAN. And all of the actual financing in those corporations was conducted by the United group, actually, by Mr. Wasson? Mr. CASEY. That is correct.

Senator NIXON. Mr. Flanagan, do I understand then, that the net result of the operation was this, that American Overseas Tanker had the allocation of the Meacham, the Kettleman Hills, and the Antelope Hills, and that actually, however, in arranging the purchase of the Antelope Hills and the Kettleman Hills, United Tanker which eventually got control of the vessels, conducted financing through a corporation that took title to the Antelope Hills, and a corporation that took title to the Kettleman Hills.

Mr. FLANAGAN. Is that correct?

95335-52--9

Mr. CASEY. Yes.

Senator NIXON. In other words, the people representing the United Tanker Corp. and the Chinese interests financing United Tanker in effect not only put up the money for the purchase of the Antelope Hills and the Kettleman Hills, but also set up the corporations which were used to take the title to the two vessels.

Mr. FLANAGAN. That is correct, is it not?

Mr. CASEY. They were set up by United Tanker, meaning Mr. Wasson and his associates.

Mr. FLANAGAN. Mr. Casey, do you recollect when you gave up your stock interests and your official positions in National Tanker, TransWorld, and Oceanic Marine?

Mr. CASEY. I think it was

Mr. FLANAGAN. Would this help you? The latter part of January 1949?

Mr. CASEY. I was going to say January 1949.

Mr. FLANAGAN. The latter part of that month?
Mr. CASEY. Yes.

Mr. FLANAGAN. Mr. Casey, I notice that when National Tanker was set up there originally were a thousand shares of stock issued, 300 to yourself, 400 to Klein, and 300 to Holmes.

I further notice that when this stock was sold to the United group or finally delivered to them, in January 1949, you delivered only 150 shares. Can you tell me what happened to your other 150 shares? Mr. CASEY. I wish you would repeat that again.

Mr. FLANAGAN. I note that when National Tanker was organized in January 1948 there were 1,000 shares of stock issued, 300 shares to yourself, 400 shares to Klein, and 300 shares to Holmes.

Now, I notice that when this stock was finally delivered to the United Tanker group by yourself you delivered only 150 shares. Somewhere along the line you have lost or dissipated or sold or given away 150 shares. Can you tell us what happened to those 150 shares of stock?

Mr. CASEY. I can't, but I will make a note of that.

Mr. FLANAGAN. You can't.

Mr. CASEY. I can't. I don't remember. I assume that all of my stock was there intact. I don't have any recollection of it being divided.

Mr. FLANAGAN. I have a list of the stockholders, which is already in the record, at the time of the sale, and it does not contain any of your nominees as far as I can recollect.

Mr. CASEY. Oh, yes. I can explain that.

Mr. FLANAGAN. All right. Go ahead.

Mr. CASEY. It is a little difficult, but it has come back now. It has been a long time, and it is a little difficult to go into all of these details. I had 20 percent of National. I gave up 5 percent of my stock to Mr. Klein.

Mr. FLANAGAN. Why?

Mr. CASEY. Because I had a very deep appreciation of his work in getting a loan from Metropolitan for American Overseas, and it was purely voluntary and purely an act of appreciation on my part, for which there was no consideration. So that accounts for that difference in the stock.

Mr. FLANAGAN. In other words, you gave him half of your stock.

Mr. CASEY. I had 20 percent. I gave him 5, which left 15.

Mr. FLANAGAN. Well, you only sold 150 of 300 shares. How are there still 50 shares unaccounted for?

Mr. FLY. Isn't that a hundred unaccounted for?

Mr. FLANAGAN. Let's try to straighten this out. It is a bit confusing.

You started out with 300 shares, which is 30 percent of the stock. You sold eventually, when all of your group got out, 150 shares to United, which means that somewhere along the line you have to account for 150 other shares, which would be 15 percent of the thousand total shares of stock.

Now, what did you do with 150 shares?

Mr. CASEY. Well, I have no memory of this stock, of 150 or 300.
Mr. FLANAGAN. You know that you received that at the beginning.
Mr. CASEY. I know that.

Mr. FLANAGAN. And you know you sold 150 at the end.

Mr. CASEY. I don't know about the 150, but I sold a fourth, or rather gave away a fourth, of my interest. And that will be shown in the receipts of the various people who obtained money from National Tankers. You will see that my figures, I think, were 67,000 something, which showed 15 percent. So I am rather surprised that it was any different.

Mr. FLANAGAN. Isn't it a fact that the stock was sold to United in the end for $450 a share? That is correct, isn't it?

Mr. CASEY. I think that is correct; yes.

Mr. FLANAGAN. And the beneficial owners of record, that we obtained from Mr. Hawthorne, indicates that you sold 150 shares, for which you received a total of $67,500.

Mr. CASEY. I think that represents 15 percent of $450,000, which works out exactly as I said. I gave away one-fourth of my interest. I don't recall the number of shares, and so forth, but I know in dollars and cents it came out that I got one-fourth less than I would have goften had I not given this away.

Mr. FLANAGAN. Well, did you give stock in National to anybody but Mr. Klein?

Mr. CASEY. I don't recall.

Mr. FLANAGAN. Will you please check your records and try to find out? Because it gets a little bit more confusing now.

I have here your income-tax returns, which we will not put in the record, because there is other financial information, other than that which has to do with tankers, but I will just refer to them here.

I have here, I believe, the joint returns of yourself and your wife for the years 1948, 1949, and 1950. And I note that in your 1948 return you show the sale of 100 shares of National Tanker stock, which you stated you acquired on January 27, 1948, and sold on October 13, 1948; that you acquired this stock at a cost of $100, or $1 a share, that you disposed of it for $45,000, or $450 a share. That is the hundred shares you disposed of. I notice in your 1949 income tax

Mr CASEY. Oh, yes. That is right.

Mr. FLANAGAN. You indicate that you sold another hundred shares, which makes now 200, and that you acquired this hundred shares on February 27, 1948, and disposed of them on January 19, 1949, having

acquired the stock at $1 a share, or $100, and disposed of it at $225 a share, or $22,500.

Now, can you explain why you sold 200 shares of stock here, some for $450 and some for $225?

Mr. CASEY. Well, if I may, I would like to explain it in the matter of dollars and cents. I was entitled to 20 percent of the stock in National Tankers. I gave away 5 percent, which left me with 15 percent. That was Mr. Klein; yes. The total amount of money which I received from National Tankers was 15 percent of the $450,000. I did not receive it all in 1948, because when the time came for United to exercise its option it didn't have the money to pay all at once. So they made a series of notes, the last one of which came due in 1949. And so that would be on my 1949 income-tax return. But add them all together, and you will find that the 1948 and 1949 returns add up to 15 percent of the $450,000.

Mr. FLANAGAN. It adds up to $67,000, all right.
Mr. CASEY. Yes.

Mr. FLANAGAN. And now you tell me you were dealing in percentages, that you were reporting in stock shares. And we have the very difficult problem of trying to figure out who were the real owners of this stock from the time the corporation was organized; and we find on the books and record of the company, of the National Tanker Co., that the stock was originally issued, and there were 1,000 shares of stock, 300 for you and 300 to Holmes, and 400 to Klein. Now we find that there were never any certificates made out for that stock other than facsimile certificates during the whole period you owned the stock and that those facsimiles were placed in escrow and that stock certificate No. 1 was not issued until January 1949, when it was issued to the National Tanker Corp. We want to know how all these beneficial owners show up as owning this much stock and that much stock, and to handle this transaction.

Mr. CASEY. Well, all I can say is that there were three incorporators necessary to incorporate. That was the formality that was observed. There must have been a reshaping of the stock, because there were not an awful lot, but many more that came that owned the stock besides the original three.

Mr. FLANAGAN. We don't want to confuse the issue any more than it is, Mr. Casey. But you were president of the corporation. Can you just tell us who in the corporation, or what lawyer or accountant, we can go to and get this picture straight? Is there anybody?

Mr. CASEY. I had correspondence with Mr. Mackey about this stock. Mr. FLANAGAN. Who is Mr. Mackey, for the record?

Mr. CASEY. Mr. Mackey was secretary of National Tankers, I think. He was secretary of American Overseas.

Mr. FLANAGAN. James G. Mackey?

Mr. CASEY. Yes. And I would like to set this forth lest there be any misconstruction about it: that in dollars and cents and I can't repeat this too emphatically, regardless of the way the stock went, which I don't recall-but in dollars and cents I ultimately received 15. percent. Is that correct? The $67,000?

Mr. FLANAGAN. I think it is correct; I am not sure.

Mr. CASEY. Fifteen percent of $450,000. Well, I can't figure it out, but I think it is 15 percent.

Mr. FLANAGAN. I will say this, Mr. Casey: Did your income-tax return show that you sold 200 shares of this stock for a total of $6,700? Mr. CASEY. $67,000, wasn't it?

Mr. FLANAGAN. $67,000.

Mr. CASEY. And that I think was 15 percent.

Senator HOEY. Does your company have a stock book that would show to whom the stock, the certificates, were issued?

Mr. CASEY. I think so.

Mr. FLANAGAN. That ought to show the shares of stock that were issued to you and whether you surrendered the certificates and it was issued to others.

Mr. CASEY. I think that is an excellent suggestion.

Mr. FLANAGAN. Will you see if you can find that stock book?
Mr. CASEY. I will.

Mr. FLANAGAN. On that point, Mr. Chairman, we have checked the original stock book, which is still in possession of the United Tanker group in New York; and, as I said before, it shows only that there were three stockholders-Holmes, Casey, and Klein-and they were never issued any stock. They merely had facsimile certificates indicating they owned a thousand shares; 300, 300, and 400.

Senator HOEY. Let me ask in that connection: Does the stock book show where any certificate of stock was issued to anybody else? Mr. FLANAGAN. Yes, when the Casey group sold the corporation, the No. 1 certificate was turned over to United Tanker.

Senator HOEY. Does it show anywhere else, or was that all of it? Mr. FLANAGAN. What is your accountant's name who was here with you? Mr. Hawthorne?

I think if we called Mr. Hawthorne up here he might know something abut it.

Senator HOEY. Mr. Hawthorne?

Will you hold up your hand? Do you solemnly swear that the testimony you give in this hearing shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. HAWTHORNE. I do.

Senator MUNDT. Mr. Chairman, just so we do not have a repetition of the situation which arose in Jackson, Miss., I think it would be well for the record to show the legal basis of administration of the oath.

Senator HOEY. Just enter into the record there that the witness was sworn by the chairman of the committee, who has authority under the law to administer oaths.

Give me your name.

TESTIMONY OF GEORGE D. HAWTHORNE, TREASURER, MARINE TRANSPORT LINES

Senator HOEY. And your connection? What business do you

follow?

Mr. HAWTHORNE. Marine Transport Lines. I am treasurer of Marine Transport Lines.

Senator HOEY. All right.

Mr. Hawthorne, have you any personal recollection of the stock transactions by which the stock of this corporation we are discussing was issued, the certificates were issued; and if so, what can you tell us about it?