The CHAIRMAN. That subpena, Mr. White, ordered you to— 1. Produce all the financial records concerning the operations of the Business Advisory Council for the Department of Commerce maintained by you dating from January 1, 1948, to the date of the subpena. 2. All correspondence between yourself and any member of the Business Advisory Council for the Department of Commerce relative to the activities and operations of the said Business Advisory Council dating from January 1, 1948, to the date of the subpena. 3. All correspondence in the files of the Business Advisory Council for the Department of Commerce between members of the Council and any agency of the United States Government concerning the activities and operations of the said Business Advisory Council for the Department of Commerce. 4. All minutes, transcriptions, memoranda, and other records of meetings of the Business Advisory Council for the Department of Commerce, or any subcommittee thereof, held since January 1, 1948. 5. All reports prepared by the Business Advisory Council for the Department of Commerce which was submitted to the Secretary of Commerce during the period January 1, 1948, to the date of the subpena. Have you presently those documents and records and correspondence with you, in pursuance to that subpena? Mr. WHITE. Mr. Chairman, I have a brief statement with respect to that matter. The CHAIRMAN. Will you just answer that question first? Mr. WHITE. I would like to, sir, with your permission. The CHAIRMAN. Proceed. Mr. WHITE. I have been served with the subpena duces tecum by the Antitrust Subcommittee of the House Judiciary Committee established pursuant to House Resolution 22, 84th Congress. I am here today to comply with and respond to this subpena to the maximum extent that I am able. I am also here to answer, to the best of my ability, any questions you may wish to address to me. In response to paragraph 1 of the subpena, I have here and will submit the financial records concerning the operations of the Business Advisory Council since January 1, 1948, which are maintained by me at the Riggs National Bank. While these records do not seem to be germane to the subject of your investigation, as defined in House Resolution 22, they are in my possession and control and I am submitting them. I respectfully advise the committee that I am unable to comply further to the duces tecum portion of the subpena demanding the submission by me of the remaining files and records described therein. The CHAIRMAN. Does that mean that you are going to submit to us the data that you mentioned? Mr. WHITE. Yes, sir, I have it right here. I wish further to explain my inability as follows: I do not have the records subpenaed in my possession or control. They are located in the Department of Commerce building and are in the physical possession of Department of Commerce employees and legal custody of the Secretary of Commerce. The CHAIRMAN. You are skipping something, aren't you? The CHAIRMAN. All right, I'm sorry. Mr. WHITE. Upon receipt of your letter of July 5 requesting access to all files pertaining to the Business Advisory Council, as was my practice in the past, I turned the letter and request over to the Secretary of Commerce. He, in turn, delegated the handling of this matter to Mr. Philip Ray, General Counsel of the Department, to be handled in conjunction with a number of other requests by the committee for Department files on other subjects. Since that time the negotiations between this committee and the Department of Commerce have been a matter of public record, and, according to my information, discussed from time to time in the hearings of this committee. I received a letter dated August 4, 1955, from the Honorable Sinclair Weeks, Secretary of Commerce, which is as follows: Mr. WALTER WHITE, THE SECRETARY OF COMMERCE, Executive Director, Business Advisory Council, DEAR MR. WHITE: This is to advise you that the files pertaining to the Business Advisory Council of the Department of Commerce, located in the Department of Commerce Building, are the files of the Department of Commerce, and that you have no right or authority to deliver these files, or any of the content thereof, to any person or to any of the committees of Congress, including the Subcommittee on Monopoly of the Committee on the Judiciary, House of Representatives. Sincerely yours, (Signed) SINCLAIR WEEKS, Secretary of Commerce. Mr. Chairman, if I may offer a photostatic copy of that letter for the record. The CHAIRMAN. Accepted. (The letter above referred to is as follows :) Mr. WALTER WHITE, THE SECRETARY OF COMMERCE, Executive Director, Business Advisory Council, Department of Commerce, Washington, D. C. DEAR MR. WHITE: This is to advise you that the files pertaining to the Business Advisory Council of the Department of Commerce, located in the Department of Commerce Building, are the files of the Department of Commerce, and that you have no right or authority to deliver these files, or any of the content thereof, to any person or to any of the committees of the Congress, including the Subcommittee on Monopoly of the Committee of the Judiciary, House of Representatives. Sincerely yours, SINCLAIR WEEKS, Secretary of Commerce. Mr. WHITE. Any effort on my part to produce or deliver these files in response to this subpena would be violative of the law concerning custody of the documents (title 5, U. S. C., sec. 22) and subject me to risk of punishment (title 18, U. S. C., sec. 2071). Over and beyond my inability to comply further with your demand for documents, I submit that it is illegal as beyond the jurisdiction of the subcommittee under House Resolution 22 in that all of the paragraphs numbered 2 through 5, inclusive, require the submission of material not relevant or germane to the authority of the subcommit tee, which is limited by the law giving it authority to conduct studies and investigations relative to the operation and administration of the antitrust laws, including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act. There is no effort in any of these paragraphs 2 to 5 to limit the type of material requested to the jurisdiction of the committee. Because of this deficiency it is illegal. I have here a prepared statement giving detailed information concerning the nature, organization, functioning, and membership of the Business Advisory Council. Since receiving the subpena I have been authorized by Mr. Philip Ray, General Counsel of the Department of Commerce, acting for the Secretary, to submit as exhibits to my statement a copy of the bylaws of the Council and a list of the members. Since receiving the subpena I and my counsel have been in consultation with the appropriate officials of the Department of Commerce who have informed me that I am not at liberty to secure any additional documents from the files for submission to the committee. From my standpoint, therefore, any further documents would have to be submitted by arrangement between the Secretary and the committee, upon such terms and procedures as they might determine. Mr. Chairman, I would like to read that statement, but if you prefer, I will file it, the statement with respect to the operation of the Business Advisory Council which I have. The CHAIRMAN. We will bring that out by questions which will be addressed to you. Mr. FOWLER. Would it be convenient for you, sir, to have copies of those? The CHAIRMAN. You may put your statement in the record and let us have copies. (The documents above referred to are as follows:) STATEMENT OF WALTER WHITE Concerning Nature, ORGANIZATION, FUNCTIONING, AND MEMBERSHIP OF THE BUSINESS ADVISORY COUNCIL My name is Walter White. I am executive director of the Department of Commerce Business Advisory Council. I live in Washington, D. C., and my office is in room 7527, Department of Commerce. My association with the council dates from 1935, when I became assistant to the chairman. As executive director of council, it is my duty to act as the permanent liaison between the council, its members and committees, and the Secretary of Commerce or other Government officials who are availing themselves of the council's services. It is really a housekeeping job involving arrangements for council and committee meetings, notification of participants, the obtaining of source material, and distribution of that material. I do not have any policy making powers either with respect to council or the advice which it gives. My time is devoted to servicing council and its committees and responding to requests from the Secretary of Commerce and his associates. My salary is paid by council. The council was formed in June 1933 by the Honorable Daniel C. Roper, then Secretary of Commerce. Since the Commerce Department's functions under the law are to foster, promote, and develop the foreign and domestic commerce of the United States, it seemed natural to Secretary Roper to seek the advice of businessmen in carrying out not only his duties in the Department but also his responsibilities as a Cabinet officer. In making his selection of the original nucleus of men to serve on the Business Advisory Council, Secretary Roper insisted on personal integrity, ability, experience, and a willingness to serve the public interest as the principal criteria of eligibility. At the time that he took office the country was in a severe depression, and men of all political faiths were united in measures to get the wheels of industry going again and to relieve unemploy ment and suffering. Thus, Secretary Roper felt that there should be no political qualifications for membership on the council. This principle has been scrupulously maintained by all succeeding Secretaries of Commerce under whom the Council has served. Up to the present time, there have been a total of seven such Secretaries of Commerce, over a period of 22 years. Early in its existence the council, with the approval of the then Secretary of Commerce, adopted a set of bylaws which have been amended from time to time. A copy of those bylaws will be furnished for your record, but I would like to give to you now the paragraph setting forth the general purpose of council, as follows: "VII. FUNCTIONS "The primary objectives of the council are to submit to the Secretary of Commerce a constructive point of view on matters of public policy affecting the business interests of the country; to respond to requests by the Secretary for advice and assistance in carrying out his administrative responsibilities; and to provide a medium for a better understanding of Government problems by council membership. "These objectives may be sought through general council meetings, by the use of specialized committees, and by individual consultation on the part of council members with the Secretary of Commerce. "With the consent of the Secretary of Commerce, the council may also establish committees to consult and advise with other agencies of Government in cases where such advice and consultation are sought." The council's active membership is limited under the bylaws to 60. Members are invited to serve for a 1-year period and may be reappointed at the will of the Secretary of Commerce up to a total service of 5 years. They are then eligible for appointment to graduate membership, where the attendance requirements are less exacting, thus assuring a flow of new members each year. A roster of current active and graduate members of the Business Advisory Council is being offered for the record. I should like to outline the method of selection of new members. Nominations and suggestions come from many sources and there is never any dearth of candidates. A membership committee composed of present and past officers of council makes a careful study of the vacancies caused by graduations or deaths and determines the geographical and industrial categories which need to be replaced in order to continue to have a well-balanced advisory group. The qualifications of the candidates are then reviewed not only to see how well they meet the representation needs of council but more importantly how they measure up to the character, experience, ability, and other requirements of council membership. When the membership committee is satisfied from personal knowledge or verified reports from responsible sources that a candidate meets all the requirements mentioned above, his name is placed on an eligible list which is discussed with the Secretary of Commerce, as he makes the final decision and issues the invitations to serve. It should be emphasized in connection with membership that individuals are chosen and not companies. No member has a right to name a successor from his company when his term expires nor can he have an alternate attend a meeting for him. The council has drawn members from academic and scientific as well as business fields. In this connection, I give you such names as Dr. Vannevar Bush of Carnegie Institute, Dr. Karl T. Compton of MIT, Dean Donald K. David of the Harvard Business School, President Deane W. Malott of Cornell University, C. K. Leith of the University of Wisconsin, and Fred R. Fairchild of Yale University. However, the Business Advisory Council is predominantly composed of men associated with industrial companies, chosen, as stated above, for their proven character, ability, and sense of public responsibility. But, in addition to those from academic and scientific fields, there are a good many members, past and present, who have broad experience in public service. Also, you will find many names on the roster of persons associated with medium-sized and a few smaller concerns. I will next deal with how council functions, the nature of the subjects it is concerned with, what staff is employed, and how it is financed. The council holds six general mettings a year. Four of those are held in Washington, D. C., and two away from Washington at such places as Hot Springs, Va. The Washington, D. C., sessions cover a morning and an afternoon, a luncheon, and a dinner. The out-of-town meetings have 2 business sessions and 2 dinners on successive days preceding a weekend. The Secretary of Commerce or his Under Secretary are always in attendance in addition to other Government officials who come to appear on the program or as guests at luncheon and dinner. A typical meeting includes a report by the Secretary of Commerce on his administrative problems in the Department of Commerce. These may be concerned with transportation, martime or air, Patent Office matters, Census, Standards, Weather Bureau, Foreign Commerce, or the domestic Commerce services. Additionally, the Secretary may report on broad public policies affecting the business community which comes to his attention as a Cabinet officer. These may include taxation, credit policy, activities of the military, particularly in procurement, labor questions, etc. Representatives of other departments or independent agencies may be on the program to discuss their own problems. Recently, Chairman Martin of the Federal Reserve System addressed the council on credit problems, and President Black told about the activities of the World Bank. Twice annually a feature of the meetings is an economic roundup presented by the members present who report the current position of their companies and industries with their best judgment for the outlook in the immediate future. At these discussions representatives are present not only from the economic reporting services of the Department of Commerce but also members of the President's Council of Economic Advisers and the Advisory Board on Economic Growth and Stability. At the luncheons and dinners the council is addressed for information purposes by various public officials. Our roster of those who have addressed the council includes Presidents Roosevelt, Truman, and Eisenhower, practically every Cabinet officer during the past 20 years, Members of Congress, leading military commanders, outstanding American and foreign diplomats, including Prime Minister Nehru of India. In addition to its general meetings the council also works through a number of committees. The executive committee, composed of 15 members, is available to the Secretary of Commerce for consultation on call. It provides a more manageable and intimate group for the exchange of ideas and views on subjects of timely importance. The executive committee meets approximately as often as the council but at different times. Then there are a number of standing committees, and special ad hoc committees are appointed from time to time to deal with particular subjects. There are standing committees on taxation, on labor policy, on foreign and domestic economic policy, and on Latin America. The Economic Policy Committee meets at least twice a year with the President's Council of Economic Advisers to review the economic health of the Nation with particular emphasis on the business sector and to discuss those policies which will be conductive to a high level of stable employment with rising business activity. The Economic Policy Committee also has a panel of technical consultants, consisting of business economists, who meet quarterly with the Director and staff of the Office of Business Economics of the Department of Commerce. These meetings serve to review the current indexes of economic activity, to check the statistical trend against private forecasts of the business economists, and to obtain competent technical advice on the validity of new statistical methods of economic analysis. The committee on labor policy reviews current administrative and legislative problems in the area of industrial relations for the Secretary of Commerce. There are two technical subcommittees composed of industrial relations executives. One serves as needed in the broad area of industrial relations policy and the other in specific problems of manpower mobilization for military purposes. This latter subcommittee was particularly active during the war when military service had such a severe impact on industrial efficiency. This activity was revived during the Korean period and is still of some importance in connection with the continuing draft and with reserve policy. The Selective Service Administration and the Department of Defense have both made considerable use of this committee. The committee on taxation makes recommendations to the Secretary of Commerce and through him to the Secretary of the Treasury with respect to tax and fiscal policy of a broad nature in the interest of promoting a sound economy with a stable price level and with sufficient incentive to assure an everexpanding private enterprise system providing high-level employment. The committee has also from time to time furnished qualified tax experts to consult 67271-55-pt. 2—2 |