Mr. HERZ. I think the paragraphs which I read, Mr. Berkovitch, indicate that the committee understood that that possibility existed; but the committee wanted to make it perfectly plain that its interest was in the officials responsible for the conduct of the RFC; that its criticism was directed at them; and that the subcommittee made no charges, undertook to make no charges against the other individuals who were named; but it did recognize that some of them might be subjected to public criticism because of the inferences which might be drawn from the circumstances.

Mr. BERKOVITCH. Was it your practice to notify either the officials or individuals who occupied no official capacity-to notify them ahead of time that you were investigating their activities, what the nature of the charges or the nature of the evidence, the derogatory material presented against them, was or would be? Did you notify them before such material was put in the record?

Mr. HERZ. In the case of the officials of the corporation-that is, the directors of the RFC, primarily, and perhaps certain other officials-I think there was very little possibility that they did not understand the full import of our inquiry.

The CHAIRMAN. But you, as a committee, did not notify them of the evidence that you were developing in executive sessions of the staff?

Mr. HERZ. That is correct, sir. We did not undertake to present them with any formal notification.

Judge MORRIS. Do you feel that, if you had notified them in advance, that act might have interfered with the successful prosecution of the investigation?

Mr. HERZ. Well, I think I have no feeling on the subject. The matter was under consideration in the subcommittee. It raised very serious consideration in the subcommittee, and on a number of cccasions; and, just before it was undertaken to publish this report, the matter came under very serious consideration again, and the subcommittee deliberated on it and decided that its report should be published without there being such notifications.

All members of the subcommittee, from both political parties, took part in those discussions, and arrived at that unanimous decision. Judge MORRIS. Do you feel, Mr. Herz, that the facts adduced by the subcommittee actually aided the executive branch of the Government, in the long run?

Mr. HERZ. In the long run? Yes, I think that they did. I think that they did.

Judge MORRIS. You think that, after you uncovered these facts you notified the executive branch in order to avoid open hearings?

Mr. HERZ. Yes. In the winter of 1950, or in the first half of January 1951, a delegation, composed of three members of the subcommittee, called on the President and met with the President, and notified him of the committee's findings, and notified the President of the serious light in which the subcommittee regarded its findings; and also advised him what the subcommittee thought would be the proper steps to take, within the executive branch, to meet the problem which this matter posed.

Judge MORRIS. Do you think that was necessary? Did the Executive act on the basis of that information, or did you find that it was

necessary to have a public hearing in order really to effectuate the reforms that would be necessary?

Mr. HERZ. Well, there was a series of circumstances, which makes it necessary to guess your way through this thing to some extent.

I will try to tell you what happened. After that discussion with the President, the three subcommittee members who had met with him came back encouraged, and thought that they had made a sale. They thought that the President was sympathetic with the problem and would act; and I think they felt that the President would promulgate a reorganization plan replacing the Board of Directors with a single Administrator.

Some time later, in a press conference, the President was asked if he had such a plan under consideration, and his answer was that he did not have. This, naturally, dampened the enthusiasm of the subcommittee members, who thought that they had an agreement—a tentative agreement-on the subject. At still a later date, the President communicated with the chairman of the subcommittee and said that he still had the matter under consideration, and that he had not finally closed his mind on it.

Still later, information came to the subcommittee which established, so far as its members were concerned, conclusively, that there would be no reorganization of the RFC. I believe the President said, up there, that there would be none, and that he would resubmit to the Senate the nominations of the same five men whose names he had submitted before, and whom the subcommittee would not support.

Mr. BERKOVITCH. Was that statement made before the issuance of the interim report entitled "Favoritism and Influence?"

Mr. HERZ. Yes. Yes, it was; and the fact that it had been made. entered into the considerations which led the subcommittee to decide that the report would have to be published. And before publishing the report, of course, the subcommittee submitted it to the full Committee on Banking and Currency, and its publication was voted by that committee.

The CHAIRMAN. Now, for the record, would you give us the ultimate result of what actually happened?

Mr. HERZ. Some time after the publication of this report on favoritism and influence, and some time after some public reaction had had an opportunity to make itself felt, there was promulgated a reorganization plan. Reorganization Plan No. 1, of 1951, was promulgated by the President, and it eliminated the five-man Board of Directors, and it created the office of Administrator of the RFC; and that plan was submitted to the Congress.

It was opposed in each House. The opposition failed, and the plan, therefore, became effective; and, in the spring of 1951, Mr. W. Stuart Symington was appointed to be the first Administrator of the RFC. Immediately upon his appointment he undertook to cure the defects of which the subcommittee had complained, and I think, to a very considerable extent, did bring about a cure of those defects.

Mr. BERKOVITCH. Mr. Herz, would you venture to say, in your opinion, whether the activities of the subcommittee and the publication of the report that was discussed, were the direct cause of the action which was subsequently taken by the President in the reorganization of the RFC!

Mr. HERZ. I think that the relationship of cause and effect is present, Mr. Berkovitch. I think the President's aide should be felt to have acted on the facts as they finally appeared to him, and as they were brought out in our report and in our hearings.

The CHAIRMAN. Are there any further questions?

Thank you, Mr. Herz, for appearing here to comment on the various procedural matters with which the subcommittee was confronted. Mr. HERZ. Thank you.

Judge MORRIS. In examining the work of the Fulbright committee, in connection with the report of the subcommittee, may we from time to time be in touch with you, to get further advice and further information which you possess?

Mr. HERZ. I would be very happy to be helpful to whatever extent I can.

Judge MORRIS. Thank you very much.

The CHAIRMAN. We again thank you, Mr. Herz.

(The letter from Senator Fulbright and the reprint of an article by him, previously referred to, are as follows:)

Hon. WILLIAM E. JENNER,

UNITED STATES SENATE,
COMMITTEE OF BANKING AND CURRENCY,

Chairman, Committee on Rules and Administration,
United States Senate, Washington, D. C.

July 17, 1954.

DEAR MR. CHAIRMAN: In response to your letter of July 8, I regret that an extremely heavy schedule for next week will prevent my acceptance of your invitation to testify before your committee on the subject of rules of procedure for investigating committees.

I note that you are interested in my views, based upon my experience as chairman of a subcommittee which investigated the RFC in 1950-51. Immediately after the conclusion of that investigation, I wrote an article, based upon my experience, which appeared in the University Chicago Law Review for the spring of 1951 (vol. 18, No. 3). I enclose a reprint of that article, which you may wish to insert in the record of your hearings.

I believe this article fairly well reflects my views now, as it did at the time of writing.

I do have this further thought: that the difficulties which now give rise to concern over the conduct of investigations, do not point so much to the need for new rules, as they do to the exercise of the powers which the Senate now has. The Senate has control over its committees, and their conduct, if it wishes to exercise that control. It selects its own committees and it can select its chairmen. It can withdraw authorization, withhold funds, and it can discipline its members.

Very truly yours,

J. W. FULBRIGHT.

[Reprinted from the University of Chicago Law Review, vol. 18, No. 3, spring 1951] CONGRESSIONAL INVESTIGATIONS: SIGNIFICANCE FOR THE LEGISLATIVE PROCESS

J. W. Fulbright, United States Senator (Democrat, Arkansas) since 1945; lecturer in law, University of Arkansas, 1936-39; president, University of Arkansas, 1939-41.

What is the right way to approach congressional investigations? An old fable tells of six blind men and an elephant. The first to come upon it touched a leg. and to him the elephant resembled nothing so much as a tree. The second blind man, encountered the tail, concluded that the elephant was like a rope. The third, whose groping hand had found the trunk, was convinced that the beast was much the same as a huge snake. To the others the elephant was like a wall, a great leaf, and a sharp spear. Modern "blind men" are still examining and describing "elephants."

The thoughts presented in these paragraphs were influenced most recently by an investigation of the operation on one of the Federal Government's specialized agencies. The details of this investigation are set forth in part II of this paper. When used as in the example, the congressional investigation has sometimes been described as "a legislative weapon to control the executive branch." The designation connotes a struggle where struggle does not necessarily exist. The purpose of the investigation which furnishes the vantage point was to examine the interpretations of the law employed by the agency under investigation with a view to the possibility that new interpretations or new laws might be needed.

I

Whatever else it may appear to be, a congressional investigation is primarily a search for information which it is believed is needed in order to solve a governmental problem. So far as the Congress is concerned, governmental problems are mainly legislative problems. The activities of the Congress, at least in theory, are directed toward the maintenance, the completion and the perfection of the statutory fabric which is necessary or desirable for the orderly conduct of the Nation's affairs. The problems of legislation are the problems of repair, enlargement, or alteration of this fabric. It is the function of all congressional investigations to ascertain whether such problems exist, to ascertain the true nature of the problems and to determine the best possible solution.

Necessarily, these investigating activities bring congressional committees into contact with officials of the executive branch whenever the inquiries concern the administration of the Government's affairs.' When they concern the relationships between the Government and its citizens the investigations bring the committees into contact with private individuals as well. In all of these contacts there are claims that the committee is endeavoring to expose human failure, skulduggery, plotting, scheming, corruption, and the like. This witch-hunt theory is so widely held that the members of committees sometimes feel the need to announce publicly that they entertain no such intentions. When authorizing a new research project, the Members of Congress will, on occasion, go to great lengths to draw distinctions between what they are willing to call investigations on the one hand, and on the other, such projects as inquiries, studies, hearings on legislative proposals, hearings on official appointments, and other factfinding assignments. Such distinctions pay tribute to the popular misconception. They imply that the words "investigation" may indeed merit some sinister connotation.

In the popular conception, startling exposures, charges and countercharges, or strong controversy may generally be expected if a congressional investigation is undertaken in that name. If another name is employed the implication is that this sort of thing is not to be expected. In fact, any congressional factfinding mission is a congressional investigation. The differences which distinguish one from the other do not lie in the names by which they are called. They arise from an endless variety of other circumstances which are ever present.

The range of motivation and subject matter

The power to investigate is one of the most important attributes of the Congress. It is perhaps also the most necessary of all the powers underlying the legislative function. The power to investigate provides the legislature with eyes and ears and a thinking mechanism. It provides an orderly means of being in touch with and absorbing the knowledge, experience and statistical data necessary for legislation in a complex democratic society. Without it the Congress could scarcely fulfill its primary function.

This fundamental necessity is fairly well recognized today. The only practical limitations applied in recent years have been those necessary to preserve the fundamental three-way division of governmental power, and to preserve the constitutional rights of individual citizens. To legislate effectively the Congress must have virtually unlimited access to information-and it has.

In order to investigate effectively, a congressional committee must have within the field of inquiry assigned to it a virtually unrestrained delegation of this vast congressional power. As a practical matter this means that the power to investigate is wielded by individuals, not by institutions. It means that the wisdom, the judgment and the balance with which it is wielded are the wisdom, the judgment and the balance of individual people, ordinary people, working, 1 Consult Morstein Marx, Significance for the Administrative Process, p. 503, infra. 49144-54-pt. 7———4

perhaps, substantially without restraint. This is inescapable in a democratic system, and it is at once both the weakness and the strength of our legislative processes. It is also the source of most of the criticism directed at congressional investigations, much of which seeks ways to protect the participants in their varied roles.

Criticism strikes too at the motivation of the investigators. Perhaps it would be fair to distinguish between the official and the unofficial motivations bebind congressional investigations. In a given case the unofficial motivation would be the force which actually drives the leading investigator. If it coincides in every respect with the official motivation the investigation will probably be an objec tive one. If the two diverge anything can happen.

How then can people be protected from the weaknesses of their elected representatives? Only by restraint of power. But where the delegation of power must be complete, the hazards of abuse are heightened because the restraints must be imposed by those who also wield the power. It is difficult-perhaps impossible to insulate against the ideas by which people are motivated.

Aside from this sometimes troublesome human factor, the most important circumstances determinative of the character of a particular investigation is the governmental problem which makes the investigation necessary; that is, the official motivating influence. Since almost any problem may be a governmental problem these days, it can be quite generally agreed that there are no limits to the fields with which Congress may concern itself. It would follow that there is no limit to the ideas which may officially motivate an investigation.

Another important circumstance which bears on the character of a particular investigation is the nature of the facts which it seeks to uncover. While these will vary from case to case, there are few governmental problems which cannot be approached from one of many points of view. This being so, there is usually plenty of room in any investigation for discrimination among the facts to be examined. Some discrimination is necessary whether it be according to an individual's viewpoint or other more objective criteria, else the investigation would bog down of its own weight. In theory, the facts singled out in an investigation should be those most illuminating with respect to the problem.

It could be argued, on a theoretical basis, that the governmental problem and the facts which surround it are uncontrollable factors determining the character of a congressional investigation. It could be argued, that is, that these factors are fixed by circumstances and cannot be altered by the investigating committee. But it must be at this point, in a Congress made up of people, that theory and practice diverge.

The tools: Organization and presentation

Whether regarded from the theoretic or the practical standpoint, there are two important variable factors bearing on the character of a congressional investigation which come within the control of the investigating body and can be adjusted to meet its requirements. These are the principal subjects of this discussion. The one is organization, the other, presentation. They are the principal tools of the investigation and are, therefore, the principal means for arriving at the objective the accomplishment of the legislative purpose.

The object: Legislation

Legislation, in some form or other, is generally the object of the investigation. This does not necessarily mean that a law must be framed, debated and enacted as the outgrowth of each investigation. Nor does it mean that the investigation has miscarried if it does not yield a bill. Instead of a law, the investigation may produce a policy statement serving as the interpretation or the reinterpretation of existing law. It may result in the finding that existing law is satisfactory and in this way yield intelligent restraint from legislative action. It may bring about a desire for the repeal or amendment of existing laws. Sometimes the congressional investigation results only in public disclosure or exposure. When this is the case, the results may be regarded as an appeal to public opinion, an invitation to the people to say whether or not they discern the need for legislation which the legislators themselves have not yet seen fit to enact. Any of these things, or their combination, may be the object and the product of a congressional investigation.

Consult Voorhis, Inner Workings, p. 455, infra.