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National Education Association, memorandum on---
MONDAY, MAY 10, 1954
HOUSE OF REPRESENTATIVES, SPECIAL COMMITTEE TO INVESTIGATE Tax-EXEMPT FOUNDATIONS,
Washington, D.C. The special committee met at 10 a. m., pursuant to notice, in room 1301 of the House Office Building, Hon. Carroll Reece (chairman of the special committee) presiding.
Present: Representatives Reece, Wolcott, Goodwin, Hays, and Pfost.
Also present: Rene A. Wormser, general counsel; Arnold T. Koch, associate counsel; Norman Dodd, research director; Katharyn Casey, legal analyst; and John Marshall, Jr., chief clerk of the special committee.
The CHAIRMAN. The committee will come to order. This is the first session of this special committee. This committee was created by House Resolution 217 of the 83d Congress, 1st session, which resolution describes its purposes as follows:
The committee is authorized and directed to conduct a full and complete investigation and study of educational an philanthropic foundations and other comparable organizations which are exempt from Federal income taxation to determine if any foundations and organizations are using their resources for purposes other than the purposes for which they were established, and especially to determine which such foundations and organizations are using their resources for un-American and subversive activities; for political purposes; propaganda, or attempts to influence legislation.
If agreeable I would like to ask the reporter to insert the entire resolution in the record for information. (The resolution is as follows:)
[H. Res. 217, 83d Cong., 1st sess.]
RESOLUTION Resolted, That there is hereby created a special committee to be composed of five members of the House of Representatives to be appointed by the Speaker, one of whom he shall designate as chairman. Any vacancy occurring in the membership of the committee shall be filled in the same manner in which the original appointment was made.
The committee is authorized and directed to conduct a full and complete investigation and study of educational and philanthropic foundations and other comparable organizations which are exempt from Federal income taxation to determine if any foundations and organizations are using their resources for purposes other than the purposes for which they were established, and especially to determine which such foundations and organizations are using their resources for un-American and subversive activities; for political purposes; propaganda, or attempts to influence legislation.
The committee shall report to the House (or to the Clerk of the House if the House is not in session) on or before January 3, 1955, the results of its investigation and study, together with such recommendations as it deems advisable.
For the purpose of carrying out this resolution the committee, or any duly authorized subcommittee thereof, is authorized to sit and act during the present Congress at such times and places and within the United States, its Territories, and possessions, whether the House is in session, has recessed, or has 'adjourned, to hold hearings, administer oaths, and to require, by subpena or otherwise, the attendance and testimony of such witnesses and the production of such books, records, correspondence, memoranda, papers, and documents, as it deems necessary. Subpenas may be issued under the signature of the chairman of the cominittee or any member of the committee designated by him, and may be served by any person designated by such chairman or member.
Upon the passage of this resolution, the Sergeant at Arms of the House is authorized and directed to ascertain the location of all books, papers, files, correspondence, and documents assembled by the former select committee under H. Res. 561, Eighty-second Congress, and take same into his custody, depositing such records with the Clerk under rule XXXVI. The Clerk of the House is hereby authorized to loan such records and files to the special committee established by this resolution for the official use of the special committee during the Eighty-third Congress or until January 3, 1955, when they will be returned in accordance with said rule.
The CHAIRMAN. The study assigned to the committee is one of great importance. A similar committee had been appointed by the House during the previous Congress. I shall refer to it as the Cox committee. The time allotted to the Cox committee was short and inadequate. The present committee was created largely because of this, in order that the work of studying the foundations might be continued to a greater degree of thoroughness.
Because of the limitations of time and finances, we have decided at this stage to confine ourselves to only some sections of the general subject of foundations.
The term encompasses many types of institutions, such as universities, hospitals, churches, and so forth, except where peculiar circumstances dictate we shall limit our study to foundations as the term connotes ordinarily in the public mind. A definition is difficult, but to name examples of such institutions, such as the Rockefeller Foundation, the Ford Foundation, and the Carnegie Foundation will illustrate what we shall ordinarily mean when we use the term “foundations” in these proceedings.
Moreover, and again with an occasional exception, we shall chiefly confine our attention to the work of foundations in what are called the social sciences. Little criticism has come to us concerning research or other foundation activities in the physical or exact sciences, such as medicine and physics. We shall of course consider breaches of law, and abuses of what may be desirable conduct wherever we find them. We deem our function to be essentially and primarily factfinding.
The committee is unanimous in believing that foundations are desirable institutions, that they have accomplished a great amount of benefit for the people of our country, and that nothing should be done to decrease their effectiveness. There have been indications, however, that foundations have not at all times acted in the best interests of the people. This may sometimes happen by intention, but far more often probably by negligence. Sometimes, also, there seem to be certain weaknesses in the very structure or conventional operation of foundations as an institution which readily permit them to fall into sometimes accidental and unintended, but serious error. As some of these errors can be very serious and often fatal, it is our objective to try to seek out causes and reasons to the end, first, of disclosing pertinent material of which the foundations themselves may not always be aware;