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The CHAIRMAN. Due to circumstances in my family, it was necessary for me to be out of the city over the weekend. So the gentleman from Ohio is 24 hours ahead of me so far as the statement is concerned because I have not had an opportunity to read it.

But without reference to this statement, if I may, Wayne, I would like to make one statement with reference to lifting things out of context.

I think when Mr. Dodd appeared before the committee, and the other witnesses, they had made a studious effort in every instance when a quotation was given, to give the source, the authorship, and enough of the context, a sufficient summation of the context so as not to get in a position of talking quotations out of context.

Now, I don't think, or I am not sure that that same thing can be said about what the gentleman from Ohio did when he read a couple of statements to the committee at a recent session. But so far as the committee members and so far as the committee staff is concerned, they have made a special effort not to get into a position of lifting out of context.

Having heard of the question that you raised with reference to Mr. Earl's statement being released to the press in advance of your receiring a copy, I made inquiry, and I understand that they were sent to the members and sent to the press all in a simultaneous operation. And as to who received the very first copy, I have no information. I did not get mine until this morning. On the other hand, I was not expecting it until this morning since I was out of the city.

The chairman has no disposition so far as he is concerned to rush a hearing. In fact, he has a very important, or there is a very important meeting of the Rules Committee this morning at which my presence is urgently requested, if not needed. And the gentleman from Massachusetts, whose active participation in the committee is highly appreciated and has been most helpful, has an executive session of the Ways and Means Committee this morning. So I think that it would suit our convenience entirely.

But I would suggest that we meet in the afternoon, Wayne, if that is agreeable, so as not to delay too much.

Mr. Hays. Mr. Chairman, I appreciate the courtesy in partially agreeing with my suggestion, and I would be happy to compromise any way I could, but I just simply won't have time by afternoon to evaluate this.

Now, I will be glad to tailor my convenience to suit the committee in working an extra day, or I would be glad to hear Mr. Dodd whom we have postponed in cross-examination, or anything, to defer it: but I would like to have time to have my office staff evaluate this and look up some of the pamphlets that are quoted from and let me get on my desk the material so that I cannot only read the paragraphs that Mr. Earl has quoted but read some of the preceding and some of the following paragraphs in order to get a grip on the material. Because. frankly, Mr. Chairman, as I said before, this League of Industrial Democracy is obsolutely a new field to me, and it is a thing that I know nothing about. And I just feel that I would like to be a little bit prepared on the subject.

The CHAIRMAN. I am not in a position to evaluate the League for Industrial Democracy upon the basis of the evidence because the evidence has not been presented. But I am not sufficiently naive to say

that I have been around Congress as long as I have and do not know anything about the League for Industrial Democracy. I think its impact has been in evidence in too many areas for me not to have made some observations concerning it.

Mr. Hays. Mr. Chairman, I will say to you this: that I am just a country boy from Ohio and I am very naive, as anyone who has attended these hearings can see, and so I will plead guilty to it right now.

Mr. Goodwin. My only interest is that we should get along, Mr. Chairman. I think that we should proceed with these hearings. I would like the forenoon off and the afternoon off, and as the chairman suggested I would like to be over in Ways and Means now as they are in executive session on a very important matter, the Philippine trade bill. I think, however, that this proceeding here is of great importance.

I have been considerably irked as we have gone along with the tremendous amount of time we have wasted here. I am already getting communications from people who are interested, expressing a fear that we will get along to the point where there won't be any time for some of them to be heard.

My only interest is that we should go forward as rapidly as we can.

The CHAIRMAN. The committee will stand in recess until 2:30, for various reasons, all of which have been discussed.

(Thereupon at 10:15 a. m., a recess was taken until 2:30 of the same day.)

AFTERNOON SESSION

The hearing was resumed at 2 p. m. The CHAIRMAN. The committee will come to order. I might first say that when the committee meets tomorrow morning, which I presume will be at 10 o'clock, we will meet in the Banking and Currency Committee room, 1301 New House Office Building.

Mr. Koch. I was going to ask Mr. Earl: Before you read your statement, will you give the committee a brief outline of your history or background Then the committee might want to ask additional questions.

TESTIMONY OF KEN EARL, ATTORNEY, LEWIS, STRONG & EARL,

MOSES LAKE, WASH. Mr. EARL. Yes, I will be glad to. My name, of course, is Ken Earl. I am an attorney out in the State of Washington now, although for 4 years prior to going out there to practice I was an employee on the staff of the Internal Security Subcommittee and the Immigration Subcommittee over in the Senate. I mean just that, too. I wasn't the counsel or the assistant counsel, or anything of the kind. I was a person who helped out in many of the projects and tasks which they undertook, and, of course, am not at liberty to divulge just what those were.

My home originally was in Nevada. As far as background other than that is concerned, I am a graduate of the Georgetown University Law School and took my undergraduate work in Brigham Young

University, Provo, Utah. Perhaps there are other areas someone would like to ask me about.

Mr. Koch. How long have you been a member of the bar?
Mr. EARL. Since about 1951.
Mr. Koch. Are you an expert on foundations?
Mr. Earl. No, sir, I am not an expert on foundations.

Mr. Hays. I might say that, as I said this morning, I do not know much about this League for Industrial Democracy. In fact, if I were to call myself an expert, I am a 4-hour expert on it, since from 10:30 this morning until now is all the time I have had to do any research on it. Would you say you are an expert on this LID organization?

Mr. EARL. I would say this, Mr. Hays, that as far as the LID is concerned, the LID's publications pretty well speak for themselves, and so a person's main qualification in taking the material which I have to see what the LID has stood for and what it now stands for would be the ability to read and think.

Mr. Hays. Would you mind telling us how old you are, Mr. Earl?
Mr. Earl. I am 34 years old.
Mr. Hays. You are 34.
Mr. EARL. Right.
Mr. Hays. In what year were you born?
Mr. EARL. 1919.
Mr. Hays. In other words, in 1932, you were about 13 years old ?
Mr. EARL. That is approximately right.
Mr. Hays. Well, we may have occasion to refer to that.
How did you happen to be called to testify before this committee?

Mr. Earl. I was called by the chairman of your committee, because he learned, apparently from someone here in Washington, that I had occasion in the past to at least be interested in the LID and its activities.

The CHAIRMAN. If I may interrupt, I had intended to make a preliminary statement along that line. I became interested, along with the subject of the foundations in general, in the League for Industrial Democracy, and while it may not be a foundation within the accepted impression of foundations, it is a tax-free organization and is a foundation or a comparable organization. Over a period of time, a very considerable amount of literature was acquired by me on the League for Industrial Democracy, as well as some other comparable organizations. And in order to get it in form to be presented, I felt it was best for it to be given to someone who had some background and interest in this subject, and I knew about Mr. Earl and his work with the Internal Security Subcommittee of the Senate, and I called Mr. Earl and asked if he would take what he had and might have access to or get access to, and take the information which I had, and reduce it to a summary which could be presented to the committee. He at first had some uncertainty whether he could take the time to do it, but finally decided that he could do so, and I feel that we are very fortunate to have a young man with his experience, although young, and with his training and overall familiarity with the subject-matter, particularly the phases with which he is dealing, here to present the result of his research to the committee for its evaluation.

Mr. Hays. In other words, did I understand you to say, Mr. Chairman, that it is really not a foundation? It really has no bearing on this investigation, then, does it?

The CHAIRMAN. I had a telegram from the League for Industrial Democracy today, raising the question whether the League for Industrial Democracy is a foundation. And I presume an accurate definition of foundation may have been formulated with the view of determining the scope of what foundations as embraced in the resolution, But in any event, the resolution under which we are working not only empowers us to investigate foundations but comparable organizations, and the language is written so that I think the committee has authority, for that matter, to investigate any tax-exempt organization, call it whatever you might. But, of course, I think actually the League for Industrial Democracy, receiving tax-free funds, is a foundation in the accepted sense of the word. And it is embraced in the group of some 7,000 foundations to which we have referred.

Mr. Hays. Let me read a little of a telegram that I have here, a copy of a telegram. It says:

Recent trends indicate critical decisions during 1954 will materially affect Nation's future. *** Radio tremendous force influencing public particularly grassroots America.

Two labor unions spending over 2 millions annually on radio-television. Surely business should join spending fraction that sum. * * *

I am just reading a few sentences to give you a general idea.
I have no objection to putting the whole thing in the record.

America's future reached successful climax signing 5-year contract Mutual Broadcasting System.

They go on to say they are going to have John T. Flynn. It says:

Make check (tax deductible) payable America's Future, Inc. and send to: Francis A. Smith, first vice president, Marine Trust Co., of western New York, Maine at Seneca, Buffalo, N. Y.

And it is signed by various people and was sent out to the presidents of practically all the large corporations in the country.

Would that come under your purview! If we are going to investigate this LID maybe we ought to investigate this group, too.

The CHAIRMAN. Without having the details, I could not say unquestionably it would come under the purview of this committee.

Mr. Hays. Then we could just investigate anything that you take tax deductions for, including the Red Cross, according to your definition, is that right? Or your church?

I mean, you are allowed to deduct for that, if you contribute to the church; aren't you?

The CHAIRMAN. Certainly, in the general concept

Mr. Hays. I am trying to circumscribe the thing and get some kind of a definition as to how far afield we are going to go.

The CHAIRMAN. Then do you feel that the League for Industrial Democracy is outside the purview of this committee?

Mr. Hays. Mr. Chairman, that is not the point at issue. The point at issue is who is deciding who the committee will investigate. You decided in your own mind apparently that that is a fertile field, and if you want my opinion you felt you had fallen down so badly with the foundations you had better get something to salvage the situation with, and maybe this would be a good thing. Understand, I am not defending the LID, because I don't know enough about it. But I am just trying to bring out the facts and let the chips fall where they may.

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The CHAIRMAN. It was originally the chairman's thought that the LID would have been presented very early in the hearings, very early. And then, as a matter of policy, it was my idea that it was best to outline the broad criticisms first, and then bring in the individual foundations and organizations in accordance with the procedure which was adopted.

Mr. Hays. I have some more questions. I would like to get this thing in perspective, if there is any way to do it.

You did answer the question about being an expert on this, Mr. Earl.

Now, let me ask you this: Do you have any idea of the membership of the LID in numbers?

Mr. EARL. No, I do not.
Mr. Hays. Would you know anything about its annual budget ?
Mr. EARL. No, I don't. I don't think it is really pertinent.

Mr. Hays. Well, of course, I didn't ask you that, but since you brought it up, I would be glad to discuss it with you.

Would you think its budget would be similar to that of the Ford Foundation? Do you think it spends $10 million a year? I think it is pertinent to find out what its budget is, so that we will know what its influence is.

Mr. Earl. No, of course it doesn't have a budget like the Ford Foundation. I would think in comparison to Ford it would have a rather inodest budget.

Mr. Hays. A kind of miniscule budget, wouldn't it?
Mr. EARL. A which?

Mr. Hays. Very minute. That is a good word, isn't it? I hope I am using it the right way. I like the word.

Mr. EARL. In comparison with the Ford Foundation, certainly. Mr. Hays. But you don't have any idea of what its budget might be? Mr. EARL. No, I do not.

Mr. Hays. Would you be surprised if I told you its annual budget was less than $50,000 $

Mr. Earl. No, Washington doesn't surprise me a bit any more.

Mr. Hays. Well, I can see it is not going to be possible to surprise you very easily. Having been on the McCarthy committee, nothing will probably surprise you.

Mr. Earl. I am very proud of having worked.on the McCarthy committee.

Mr. Hays. If you feel you have to defend it, I would be glad for you to take time to do it.

Mr. Earl. Go right ahead.

Mr. Hays. Do you have any idea how this organization derives its income, its tax-free money?

Mr. EARL. It is my understanding that it derives the greatest part from contributions from people like you and I.

Mr. Hays. You mean people of very limited income. I don't know anything about your income, but if you are talking about mine, it is in the limited class.

Mr. Koch. Minuscule?

Mr. Hays. Well, there is some debate about this. I am inclined to belong to the school thinking it is minuscule, yes.

Mr. Koch. Me, too.

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