Mr. SOURWINE. Does an inspector usually confine his interviews with respect to a case to people who are known by him or anticipated by him to have complaints? That is, that he looks into only one side of the case, or is he supposed to look into both sides?

Mr. JERVEY. Both sides, of course.

Mr. SOURWINE. And weigh the evidence, perhaps, in a sort of a judicial way?

Mr. JERVEY. I wouldn't say that. He gets all the facts. The United States attorney is our legal adviser.

Mr. SOURWINE. But do you present to the United States attorney all of the facts developed, good and bad, or only one side of the case? Mr. JERVEY. It's our function to present the good and the bad in order that he might reach a proper decision.

Mr. SOURWINE. You do not present him with just the evidence that tends to show a violation?

Mr. JERVEY. No, sir; not necessarily. If there were some features that would have a bearing on it-I don't presume to say that we cover a man's life in discussing one of these reports-but if there is some activity or some information that comes to our attention that would have a bearing on the case, good or bad, that is presented to the United States attorney.

Mr. SOURWINE. If, for instance, you investigate a man who is charged with fraud and you interview 20 witnesses and 12 witnesses say that the man is a crook and 8 witneses say that the man is honest, would you just present the testimony of the 12 witnesses to the United States attorney or would you tell him about the other 8?

Mr. JERVEY. Tell him about the other eight.

Mr. SOURWINE. How far do you generally go, Mr. Jervey-by "you" I mean a postal inspector-in working up a case for the United States attorney?

Mr. JERVEY. Well, if you will tell me what you have in mindMr. SOURWINE. Is your connection with the case terminated when you have submitted all of the facts to the attorney?

Mr. JERVEY. Not always; no, sir. We are instructed to assist the United States attorney. Frequently he will ask for some further information on a certain phase of the case.

Mr. SOURWINE. Do you ever draw indictments?

Mr. JERVEY. No, sir.

Mr. SOURWINE. Do you know of any case in which a postal inspector ever drew an indictment?

Mr. JERVEY. Yes. And I am testifying not from personal knowledge, now. I have heard that some men were required to do that. Mr. SOURWINE. Do you ever look up citations of law and give advice concerning action to be taken ?

Mr. JERVEY. Give advice to whom?

Mr. SOURWINE. To the United State attorney; legal advice.

Mr. JERVEY. I never have. We have-we are furnished with postal decisions, for instance, of interest dealing with postal crimes, and while I don't, offhand, recall having suggested any particular decision, it is possible that I have. But I want to say here that I am no attorney and have very little legal knowledge, other than what I have gained in presenting evidence in court.

Mr. SOURWINE. That would be true of the average postal inspector, would it not?

Mr. JERVEY. I would say "Yes."

Mr. SOURWINE. But assuming that a postal inspector were a good lawyer, would it be a part of his function or of his work to draft an indictment?

Mr. JERVEY. No, sir; postal inspectors are prohibited from drafting indictments. Necessarily, that work would be the job of the United States attorney..

Mr. SOURWINE. You say they are prohibited from doing it?
Mr. JERVEY. Yes, sir.

Mr. SOURWINE. By a regulation of the Department?

Mr. JERVEY. By instructions of the chief post-office inspector.

Mr. SOURWINE. Didn't I understand you to say that occasionally they assisted in drafting an indictment?

Mr. JERVEY. I say, I understood that. I don't know. I don't know of any inspector, now. There was an inspector, years ago, who had apparently some legal knowledge, and I happen to know that this man did aid the United States attorney. That inspector is not in the service now.

Mr. SOURWINE. Who was that?

Mr. JERVEY. Mr.-It's Inspector E. G. Allen.

The CHAIRMAN. May I interrupt just a moment. I think I might clear up the situation. I have had a little bit of experience. Mr. JERVEY. Yes, sir.

The CHAIRMAN. As a matter of fact, when the case reaches the prosecution and trial stage, the postal inspectors give the United States attorney all of the assistance they can?

Mr. JERVEY. Absolutely.

The CHAIRMAN. Such as interviewing witnesses; telling the United States attorney what they will testify to; questions for the prosecution; and even to the extent of going out and finding out what the witnesses for the defense are going to testify to?

Mr. JERVEY. Yes, sir; that has been done.

The CHAIRMAN. Oh, I know it has.

Mr. JERVEY. Yes, sir.

The CHAIRMAN. You are working every way you can to secure a conviction in a case when it has reached that stage.

Mr. JERVEY. Well, Senator, yes; when it has reached that stage and you are satisfied in your own mind and the grand jury has returned an indictment-that the proper effort is then put forth.

The CHAIRMAN. Absolutely.

Mr. JERVEY. Yes, sir.

The CHAIRMAN. Go ahead, Mr. Sourwine.

Mr. SOURWINE. I have no further questions of this witness.

The CHAIRMAN. Is there anything the witness would like to volunteer? Anything that you may have to say before you leave?

Mr. JERVEY. Senator, the only suggestion I have to offer-may I speak off the record?

The CHAIRMAN. I do not like statements off the record. Let us put it on the record.

Mr. JERVEY. All right; fine. I prefer that, too. You have a copy of a letter of mine, containing a list of individuals, which was produced here by direction of your subpena. I have given my personal reasons for considering that information confidential. I don't want

to be embarrassed, myself, or to embarrass anyone else. Unless it is really necessary-and I am going to leave that to your judgment to decide whether or not that should be made public, sir. You are probably better equipped to decide that than I am

The CHAIRMAN. Is there any special reason, Mr. Sourwine, why you would like to have this made a part of the public record?

Mr. SOURWINE. In this way, Mr. Chairman. This is material furnished to the United States Attorney by the Post Office Department. There is involved in this investigation, a question of whether the activities of either or both of the departments, in any way, exceeded their authority or were, in any sense, in bad faith, and I believe it pertinent for that reason. I have not had an opportunity to examine it. If you care to reserve judgment?

The CHAIRMAN. My thought was this: Instead of making it a part of the printed record, that you have copies made and retain those in the committee files and return the originals to the witness.

Mr. SOURWINE. Yes; surely, sir.

The CHAIRMAN. I think that would take care of the situation.

Mr. JERVEY. Thank you, Senator.

The CHAIRMAN. If there is nothing further and you have no further use for the witness, he may be relieved from further attendance. Mr. Sourwine will return the originals to you.

Mr. SOURWINE. Those will be returned.

Mr. JERVEY. Thank you.

(The witness Jervey was excused).

TESTIMONY OF CLYDE C. PIERCE

Mr. SOURWINE. Mr. Pierce, do you recall testifying before this committee on the occasion of a prior hearing here?

Mr. PIERCE. Yes, sir: I do. I don't remember all the things I said. I never saw a copy of the report.

Mr. SOURWINE. Do you remember testifying that you frequently operated with syndicates, what was known as syndicates, in refunding operations?

Mr. PIERCE. Yes, sir.

Mr. SOURWINE. Do you recall testifying that you had handled many contracts which were financed in whole or in part by Mr. Edward Ball or his associates?

Mr. PIERCE. That's correct.

Mr. SOURWINE. I wonder if you would relate for the committee Mr. PIERCE. I don't know that I said Mr. Ball. Most all of my financings were handled through the Florida National Bank. I don't know just how it was handled after it reached the bank.

Mr. SOURWINE. I will read from the record of the prior hearing, on page 101, where I asked you the question:

Now, have your operations throughout the State, since the crash, involved, always, operations solely on your own account, or have you frequently joined with other bond houses in one refunding or another, or one operation or another?

And you replied:

I have frequently joined with-they are known as "syndicates," in refunding operations. So, I have taken none of it. But, some of the larger ones have joined with others.

I asked you:

Have you ever handled any contracts which were financed in whole or in part by Mr. Edward Ball or his associates?

And you replied:

Yes; quite a number.

Now I wonder if you would tell, for the committee, as many as you can remember of those contracts which you handled, which were financed in whole or in part by Mr. Ball or his associates?

Mr. PIERCE. I think I would have to check back on my records on that, Mr. Sourwine.

Mr. SOURWINE. You mean you do not recall any of them?

Mr. PIERCE. Well, I recall one. Pinellas County, I recall that. Road bonds of Pinellas County.

Mr. SOURWINE. What, in particular, makes you remember that one? Mr. PIERCE. Because it happened to be the largest one we handled. Mr. SOURWINE. You mean the largest that your company handled? Mr. PIERCE. Yes; that's correct. The largest. I had an associate in that also.

Mr. SOURWINE. Who was your associate?

Mr. PIERCE. Leedy-Wheeler & Co. of Orlando.

Mr. SOURWINE. Now do you recall any others besides Pinellas County?

Mr. PIERCE. Well, of course, there are undoubtedly a lot of them. Mr. SOURWINE. How big a proportion of your business did that represent?

Mr. PIERCE. Well, we are primarily-in fact almost 99 percent engaged in the municipal bond business. I can't tell you what proportion of the refunding operations. Of course, we would go ahead and handle a refunding deal, and that's buying and selling bonds right on.

Mr. SOURWINE. I meant by that question, this, sir: What percentage of your total business is represented by transactions, shared or financed in whole or in part, by Mr. Ball or his associates?

Mr. PIERCE. I don't get quite what you are driving at. We use the Florida National Bank, and, obviously, you have to do the financing in any type of a bond deal. You can't usually reach in your pocket and get that much money. You have to have a connection with a bank, to go through with your financing. I would say in nearly every instance a loan of some type was made through the bank.

Mr. SOURWINE. They were all commercial bank loans, were they? Mr. PIERCE. Yes; as far as I know, they were.

Mr. SOURWINE. In the Pinellas County case, was that simply a commercial bank loan?

Mr. PIERCE. That's correct.

Mr. SOURWINE. Would you say that neither Mr. Ball nor his associates had any part in any of your transactions, except to supply the commercial loan?

Mr. PIERCE. Certainly not. They had no other part. Applications for loan were made to the bank and granted by the bank.

Mr. SOURWINE. But 99 percent, or thereabouts, of all of your transactions were involved in commercial loans with Mr. Ball and his bank?

Mr. PIERCE. That's correct.

Mr. SOURWINE. You testified that you had been associated with R. J. Van Ingen Co.

Mr. PIERCE. V. J. Ingen Co.

Mr. SOURWINE. Do you recall any of the matters in which you were associated with them?

Mr. PIERCE. No, sir; I can't, just at the moment. In many refunding operations we were associated with V. J. Van Ingen or other houses.

Mr. SOURWINE. You don't recall any one of them in particular?

Mr. PIERCE. Not at the moment. I assume this period of time you are speaking of goes back to about 1933, when Florida bonds were― 1934, 1935, 1936

Mr. SOURWINE. I think it would probably go back to 1931, if you were in business at that time.

Mr. PIERCE. Well, I was. If my memory serves me right, Mr. Sourwine, there were no refunding operations actually started in 1930 and 1931. At that time it was buying and selling. Trading in bonds then existing.

Mr. SOURWINE. Then it started about 1933 ?

Mr. PIERCE. Somewhere between 1934 and 1935.

Mr. SOURWINE. You testified you had often been associated with Leedy-Wheeler and Co.

Mr. PIERCE. That's correct.

Mr. SOURWINE. Can you recall the instances of that association? Mr. PIERCE. Well, I think we were associated in the Seminole County refunding. I don't recall the date. And Orange County refunding; Marion County refunding. They were associated in the Pinellas County refunding. I think we made some unsuccessful bids on practically every issue that was ever advertised for sale. Jointly, I mean.

Mr. SOURWINE. You mean that you and Leedy-Wheeler, jointly, made bids?

Mr. PIERCE. Yes, sir.

Mr. SOURWINE. You cannot recollect all of them? You said LeedyWheeler had been associated in the Pinellas County matter? Mr. PIERCE. Yes, sir.

Mr. SOURWINE. And what was the nature of that association? Was it different from Mr. Ball's association in that same matter?

Mr. PIERCE. We were investment bankers in the case. We made our joint proposals to the county, and it was awarded to us, and after that, of course, on the day we had to take up the securities involved, we had to have financial assistance.

Mr. SOURWINE. And that is where Mr. Ball came in?

Mr. PIERCE. That's where the bank came in.

Mr. SOURWINE. Have you ever handled any contracts or other deals for Mr. Ball's account?

Mr. PIERCE. For his account?

Mr. SOURWINE. Yes.

Mr. PIERCE. No, sir.

Mr. SOURWINE. Did Mr. Ball, or his bank, ever supply you with capital for particular transactions, other than the short-term loan to take up the bonds?

Mr. PIERCE. No. Just in the regular order of banking business. Collateral loans.