Oral History Interview with
Stephen J. Spingarn
Attorney, U.S. Treasury Dept., 1934-41; Asst. to the Attorney
General of the United States, 1937-38; Special Asst. to the Gen. Counsel,
Treasury Dept., 1941-42; Comdg. Officer, 5th Army Counter Intelligence
Corps, 1943-45; Asst. Gen. Counsel, Treasury Dept., 1946-49; Alternate
Member, President's Temp. Comm. on Employee Loyalty, 1946-47; Dep. Dir.,
Office of Contract Settlement, 1947-49; Asst. to the Special Counsel of
the President, 1949-50; Administrative Asst. to the President, 1950; and
Commissioner, Federal Trade Commission, 1950-53.
Washington, D.C.
March 27, 1967 (Tenth Oral History)
By Jerry N. Hess
[Notices and Restrictions | Interview
Transcript | Additional Spingarn Oral History
Transcripts]
NOTICE
This is a transcript of a tape-recorded interview conducted for the Harry
S. Truman Library. A draft of this transcript was edited by the interviewee
but only minor emendations were made; therefore, the reader should remember
that this is essentially a transcript of the spoken, rather than the written
word.
Numbers appearing in square brackets (ex. [45]) within the transcript
indicate the pagination in the original, hardcopy version of the oral
history interview.
RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced
for purposes of research. It may not be published in full except by permission
of the Harry S. Truman Library.
Opened April, 1972
Harry S. Truman Library
Independence, Missouri
[Top of the Page | Notices
and Restrictions | Interview Transcript
| Additional Spingarn Oral History Transcripts]
Oral History Interview with
Stephen J. Spingarn
Washington, D.C.
March 27, 1967 (Tenth Oral History)
By Jerry N. Hess
[855]
Tenth Oral History Interview with Stephen J. Spingarn, Washington,
D.C., March 27 , 1967. By Jerry N. Hess, Harry S. Truman Library.
HESS: Mr. Spingarn has just indicated that he has a few more remarks
that he would like to say about the Clark Clifford matter, so our restrictions
that we mentioned Friday will still be in effect for what we put down
now, and that is that this is to be totally closed until five years after
the death of Clark Clifford..
SPINGARN: Now, I forgot to add this part to the incident which I recounted
in which Clark Clifford came to see me when I was Federal Trade Commissioner,
I place this as probably 1952, and, among other things, he was urging
the Federal Trade Commission to launch an investigation of the Luria Company,
which was the largest scrap dealer or company, iron scrap company in the
United States, as I understand the situation. He was representing a competitor
of theirs and he wanted the Federal Trade Commission, this is a normal
procedure, to investigate whether it was a violation of the antitrust
laws, within the jurisdiction of the Federal Trade Commission.
[856]
Now I recited how, after having argued the case entirely on the merits,
he said, with a smile as he left, that there would be a fee of $25,000
for him, Clark Clifford, if the Federal Trade Commission merely launched
an investigation, it was hinged merely on our launching it, not on its
successful outcome from his standpoint.
I should have added that that statement delayed the launching of the
investigation several months, probably, because Clark didn’t realize
it, of course, that we would have made that investigation if he had never
come to the Federal Trade Commission. We were already looking into the
matter, I was the commissioner in charge of making a recommendation, and
I was prepared to make a recommendation that we make such an investigation
on its merits, before Clark ever came t me. When he made that statement,
I thought, first of all, that I should reconsider the matter and I asked
for further investigative material of the case and the long and the short
of it was that it was several months of preliminary investigation more
to determine whether or not we would make a full-fledged investigation
looking to the issue and serve a legal complaint against the Luria Company,
[857]
as a result of that last statement of Clark Clifford’s.
Then subsequently, after the investigation was made, the full investigation,
our staff recommended that a complaint be issued against the Luria Company,
this is the formal procedures of the Trade Commission, looking to the
issuance of a complaint, a hearing on that before a trial examiner, if
he finds that the complaint is right, his verdict may be appealed to the
full commission, and if the Commission decides so, a cease and desist
order may issue against the company or individual against whom that complaint
has been issued.
When the staff finally came up with a recommendation for a complaint,
following that investigation of Luria Company that Clifford had favored,
which we did make, and which we made strictly on the merits, it would
have been made anyway if he had never appeared at the Commission, the
case was still mine, that is the staff recommendation came to me to make
a recommendation to the full commission as to whether or not a complaint
should issue. Only the Commission can issue a complaint, of course.
At that time I requested, because of Clark
[858]
Clifford’s intervention in the matter, that the case be reassigned
to another commissioner, and it was reassigned, and if my recollection
is right, it was reassigned to Lowell Mason, my Republican colleague,
I believe that’s the case. In any event, I recall that a complaint
was issued, but the Commission did not decide the case before I left,
so that was decided sometimes afterward. At one time I knew what had happened
but I have forgotten now and anyone who is interested will have to go
to the Commission records and look up the history of the Luria case. That
completes my statement on that.
HESS: That completes the restricted area.
SPINGARN: That completes the restricted area, now we go back to other
subjects.
I would like to talk about ethics in government as I saw them over the
span of my Government service -- in different agencies.
Now, first of all, in my Treasury days, I was a relatively minor official,
even at the end I was Assistant General Counsel and Treasury Legislative
Counsel. I can't say I was bothered much with lobbyists who were trying
to wine and dine me, or anything of that sort, the point
[859]
was that the area in which I worked was not the type of thing that the
lobbyist would normally be infesting, the Internal Revenue Bureau was
the place where you might expect a lot of high-powered lobbyists around,
and we know now from the cases and situations that arose in the early
fifties, that they were there, Henry "the Dutchman" Grunwald and his peers
and others.
My friend, Charles Oliphant was a victim of this sort of thing, I won't
say he was an altogether innocent victim, but he was foolish, not corrupt.
Charley Oliphant was the son of Herman Oliphant, who was the first general
counsel of the Treasury. There never had been a central lawyer running
the whole legal staff of all the bureaus until the post was set up under
Henry Morganthau in 1934. Herman Oliphant was a very brilliant man. He'd
been a law professor at Columbia and Johns Hopkins. He was a man, however,
who did not -- he was a brilliant lawyer, had a wonderful mind, and it
was extremely valuable to have contact and listen to him, and I had an
opportunity to do that at some length and profited by it, but he was an
intellectual and he didn't have the gift of dealing with people easily
and comfortably, and so he tended
[860]
to surround himself with buffers, with men who could deal with people,
although some of them were not of his caliber as lawyers or in intelligence,
but they had the gregariousness that he lacked.
In any event, his son, Charley, had been, as I understand it, a great
disappointment to his father, because he had not had the brilliant record
that his father had, he did rather poorly in law school and so forth,
this was quite a blow to a man who had been a top lawyer and a brilliant
law professor, and the impression I had was that Charley had always stood
in his father's shadow and that his father had not treated him with the
understanding, perhaps, and so forth, that Charley needed. In any event,
Charley became a young Treasury lawyer, his father died in 1939 and Charley
moved up the ladder and showed considerable ability to make his way. Eventually,
he became Chief Counsel of the Bureau of Internal Revenue, a very important
key post, obviously, with a staff, I don't know, three or four hundred
lawyers under him and then, as I see the picture, another unwise gentleman
named Lamar Caudle, was Assistant Attorney General in charge of the Tax
Division of the Department
[861]
of Justice. These men were sort of opposite numbers, that is to say,
Charley was Chief Counsel of the Bureau of Internal Revenue, which handled,
essentially, the civil side and Caudle was the Chief of the Justice Tax
Division which handled all of the criminal prosecutions. Naturally, they
had to work together closely. Now, I didn't really know Caudle, I mean
I may have met him casually, but I didn't know him, all I know is what
I have read about his situation and case, which is a matter of record.
He went to prison eventually.
But he impressed me as a country boy, I mean, he came to the big city
and was taken in by the city slickers. They took him up on the mountain
peak and they showed him the panoramic view, and to make a long story
short, all these big operators were wining and dining Caudle. They would
take him down to the Kentucky Derby on lavish weekends and to the World
Series, and all this sort of thing, treating him like a visiting Pooh
Bah, naturally very pleasant, but they weren't doing it for fun, they
were doing it because they hoped to influence his judgment and decisions
in tax matters, some of them. It seemed to me that Charley got somewhat
caught in this trap, perhaps by Caudle
[862]
at first, who brought him in on lavish trips to the World Series at somebody
else's expense, a taxpayer's to be sure, a big taxpayer, to be sure, and
Charley became friendly with Henry Grunwald, who must have been a remarkable
man, I never knew him but he seems to have been a friend of everybody,
Republican and Democrat, in the city of Washington, and I recall that
Senator Styles Bridges, one of the top Republican leaders of the Senate,
in the late forties and early fifties, used Grunwald as an emissary down
to the Bureau of Internal Revenue, on a tax case involving millions in
which a big Baltimore liquor dealer named Hyman Harvey Kline (or Klein),
was the subject of a tax investigation.
You might justifiably wonder why a Senator from New Hampshire was so
interested in the case of a Baltimore liquor dealer. A man named Jules
Abels wrote a book about "the Truman Scandals" in which he recounted this
case, Abels was a Republican official of the Eisenhower administration,
and the book was first released at Republican National Committee headquarters
in 1956.
He was so fair-minded about it that he covered this whole case, spent
seven or eight pages on it but
[863]
he never mentioned the fact that Styles Bridges had any interest in it,
which to me seemed to be a very major feature of the whole case. The Democrats
involved were well covered by Mr. Abels but Styles Bridges was not present.
Anyway, Charley Oliphant got involved in all this, let Grunwald befriend
him, make loans to him, and things like that, take him to lunch often,
the usual entrapment of the lobbyist working on a shall we say a not too
sharp-witted, in this particular area, public official. I do not believe
that Charley ever did anything corrupt, but when this picture was exposed,
it didn't look good, there's no question about that. It didn't look good,
and Charley was forced to resign, in 1951 or '52. Well, that's one case.
Now, this is typical, one day a senior official of the Treasury, Bill
Parsons, called me, Bill Parsons is a fine chap and a man of integrity
and an honorable public servant, he was the Administrative Assistant Secretary
of the Treasury, and he wanted my advice as a lawyer, friend and fellow
official. He had received from one of the big movie companies, by registered
mail, return receipt requested, a seasons pass to
[864]
all their theaters for him and his family, to their movie theaters, and
he wanted to know if I thought he should accept it.
I said, "Bill, I don't think so. These people have big tax problems with
the Government, with the Treasury, with the Bureau of Internal Revenue,"
I said, "if you used that pass once or twice a week, for your family,
it would run into several hundred dollars a year. Why did they send it
to you? Another thing, they sent it to you by registered mail, return
receipt requested, and all that, you see." I said, "If I were you, I would
send it back the same way." I think he did. Well, there are so many ways
that lobbyists try to get in to you, you see. They start so subtly, then
they wait a long time before they start expecting returns on their investment.
One of the things I objected to throughout my Government career was the
fellow who takes you to lunch. Now when you get to the bill paying, you
know, normally the point was that he's a friend of yours, he's an ex-Government
official whom you've known, but he's now representing some outside interest.
Now this is the normal situation, he calls you up and, I mean, you
[865]
would go to lunch with him because you're friends with him, good friends,
but he wants to talk business, of course, which is all right, I don't
know any reason why you shouldn't talk business at lunch as well as any
other time, the only thing is that when the bill comes, you can never
pay your share, you can't do it, he won't let you, and you know that you're
going to appear on an expense account; that's what annoys me, if you let
them pay it, you're going to be on an expense account. He's going to say,
"Ten dollars luncheon bill entertaining Stephen Spingarn, Administrative
Assistant to the President," or whatever I am, you see, very annoying.
So I tried to avoid those, except in cases where a real close friend of
yours, I mean, you know, you're not going to make a Federal case out of
one lunch with a real friend, even if he is going to put you on his expense
account. But I've always tried to pay those bills, but it's impossible
with these fellows cause they want you on their expense account. Unless
you want to make a scene in the restaurant, you're going to have to let
them pay it, he will argue and shout longer than you will, you know. Well,
it's a piddling thing, but it's symptomatic. I
[866]
hope that no one will suppose that a Government official can be bought
for one lunch, but it creates an atmosphere, you know, of friendliness.
Now, apropos to that Bill Parsons episode, when I was at the White House,
I received one day in an envelope, and it was just loose, without a cover
note or anything, and without any registered mail, return receipt requested,
a seasons pass to all the Washington Senators' ball games at Griffith
Stadium, I received it without any note or anything. It was my first inclination
to send it back, but I made an inquiry and I discovered that for many
years, Clark Griffith had been giving the President, he gave the President,
I believe, a gold one, and he gave every senior member of the staff a
seasons pass, this had been going on for years, it had become rather a
tradition, so since I had now made the senior staff, as Administrative
Assistant to the President, I automatically got one. I said to myself,
I'm not going to be -- nobody ever thought of returning them, you know,
and I wasn't going to be three steps to the right of the Pope, so I kept
it. I was so busy that year, I never used that pass once, so I didn't
benefit from it, but I thought to myself later,
[867]
"Well, you gave Bill Parsons sanctimonious advice, but when you got a
seasons pass to the ball park, you kept it." You don't always do what
you tell the other fellow to do, but it seemed to me that there was a
different situation here. And Clark Griffith didn't need my help to come
into the White House and see the President and, actually, all he ever
saw the President about, as far as I know, was to invite him out to the
first game, or something like that.
When I got over to the Federal Trade Commission, I found the lobbyists
thicker. Well, I won't say that; they were pretty thick around the White
House, especially in jugular affairs, like the airplane cases, I have
described something about that in the closed tape when I talked about
the Pan American, TWA, AOA case.
HESS: Were there any others that you could...
SPINGARN: I can't recall at the time, but I will say, I remember the
General Counsel at Eastern Airlines coming in to see me, I've forgotten
his name now, he was a nice fellow, Republican I believe, and Eastern
Airlines, of course, was presided over by that great American, Eddie Rickenbacker.
Eddie had a terrific war record, he was the outstanding ace of World War
I, a Congressional
[868]
Medal of Honor man, and he had a terrific war record for which he deserves
much credit and he had that remarkable survival feat in the Pacific where
he was adrift in a small boat for I don't know how long, weeks, and survived.
He was a man of courage and great abilities, but politically he was reactionary,
oh, my, he's off to the right of Goldwater.
I was the aviation man at the White House, and all I remember is that
the Eastern General Counsel, whose name I can't remember, came in and
told me, it was some case that was going to the President, he said he
had never before come to the White House to lobby his case, as he put
it, or to try to attempt to discuss it with the White House, after it
left the CAB, you see, but that he knew that his competition was doing
that, and I've forgotten who his competition was in this particular case,
if it was Pan Am, he was sure right, and they weren't the only one. The
competition was doing it and so he thought he ought to come in here and
speak his case, and I told him my door was open to everybody, I was perfectly
glad to listen to anybody who had anything to say on the case and I listened
to him, I don't remember what the case was and I don't remember how it
was decided, I just remember
[869]
that incident.
Oh, I remember that we got frequent calls from members of Congress, I
remember Senator Pat McCarran calling me from Nevada on one airline case,
that he was most interested in, but that's the normal run of things.
Oh, I remember one little incident, you know these ethics in Government
things run into so many ramifications, one day, I think it was Congressman
George Miller of California, who is still in Congress, came down to see
me with a lawyer on a private relief bill which was before the President
after having passed the Congress. I vaguely recall that the bill dealt
with an immigration case, and it dealt with a woman, I think, who was
a servant of a family in California, a foreigner. And it had something
to do with, I recall, permitting her to remain in the United States. I
don't remember the details. Apparently, her time had ended and she would
have to go back unless she got this bill through, that's all I recall
about it.
My recollection is that the Immigration Service of the Department of
Justice had recommended a veto, too, but they had this boilerplate rule,
if it fell into a category, they automatically recommended for veto,
[870]
regardless of how sympathy-inspiring the individual case was, they didn't
seem to look at the individual case, you see, if it fell into category
(a), a veto was automatically recommended. Well, I didn't see it that
way and neither did the Bureau of the Budget, which meant essentially
Roger Jones, who was Assistant Director for Legislative Reference, and
we recommended signing bills even though Justice, or some other department
made some boilerplate recommendations for veto. I think this bill was
in the category, the main department involved, would recommend a veto,
but we were considering otherwise.
In any event, Congressman Miller came in with a California lawyer --
and they told me about the case and I assured them that I would give it
my closest attention and make whatever recommendation I thought was right
to the President, but, of course, it was up to the President in the final
analysis and I couldn't tell them what he was going to do. To make a long
story short, he signed the bill, in spite of a veto recommendation, that's
my recollection.
This was in the middle of summer, and at Christmas I got a box of dried
candied fruit from the lawyer, you
[871]
know, a two pound box worth three or four dollars, with a note of gratitude.
I wanted to send it back to him because I don't want gifts, I hadn't done
anything but my duty and so forth and so on, but it seemed so piddling
to go to all the trouble of sending a two pound box of dried candied fruit
back, in addition to which, I don't like dried candied fruit and so I
gave it to my maid.
So there you are, you see, had I transgressed the law of ethics by accepting
this gift? Well, you have to make judgments of what reasonable men will
do under these circumstances. All sorts of things like this arise.
Now, when I went over to the Federal Trade Commission, I found that there
was a good deal of lobbyist activity over there. This is natural because
the Trade Commission issued cease and desist orders, which are hurtful
to the firms they're issued against, and are helpful to the competitors
of those firms. The Federal Trade Commission is by no means as jugular
an agency as the CAB which allocates routes between airlines, boy, there's
hundreds of millions of dollars wrapped up in those decisions, or the
Federal Power
[872]
Commission, or the Federal Communications Commission, or the Interstate
Commerce Commission. These people deal with matters where there are hundreds
of millions of dollars involved, and whether to decide it up or down,
yea or nay...
HESS: Who gets in and who gets left out in the cold.
SPINGARN: Right. There I know the lobby activity is very intense, naturally,
this is the nature of our Government. And when I say lobby activity, I
mean, there is a legal and legitimate lobby activity and there's also
illegal and illegitimate lobby activity. Now, when I first came to the
Treasury, I lived then as now in the Anchorage, where I am right now.
I am sitting in the Rayburn Memorial Room, which is part of the suite
that Speaker Rayburn lived in for some thirty-five years or more here,
and I've lived here since 1946. Anyway, a lawyer representing large corporate
interests, who had a big case before the Trade Commission at that moment
and who also lived in the Anchorage then called me up, and I had just
been appointed to the Commission, and commented on the coincidence that
we both lived here and invited me to have lunch, but I didn't accept his
invitation since it was perfectly obvious what the
[873]
purpose was. And I remember a couple of years later -- this was a very
able lawyer, but he's not one of my favorite citizens, I'm sure he represents
his people very effectively, I mean there was nothing seriously wrong
in what he did, it was a perfectly normal thing to do, perhaps, it was
also perfectly normal for me not to accept -- I was Motions Commissioner
for a long time, I passed on procedural motions on behalf of the Commission,
the most common thing was a request for continuance, you know, on a hearing,
something of that sort, or for the filing of a brief. One day this lawyer
called me up and he wanted to come in on what to me sounded obviously
a substantive matter, he was trying to use our procedural tent to hide
a substantive proposition which I had no authority to pass on alone, and
I told him so on the phone. He said, well, he didn't think so, could he
come in, and he did come in with his clients and obviously it was substantive,
I couldn't hear it without hearing the other side, you see, at the same
time, and even on procedural motions, the other side had a right to make
their pitch, whether they were for or against it, you see, usually they
came in together but they didn't have to. You could
[874]
simply get the request from one side and then ask the other if they objected,
and if they did or didn't why then you make up your mind what you should
do. But he came in and argued this matter and I said, to me, it seemed
clearly a substantive matter, that the Motions Commissioner shouldn't
decide, and I said, "Well, I told you so on the phone." I said, "It seems
to me that you wasted my time and yours," and that made him so mad that
he stamped out of there without another word, just got up and stamped
out without a word.
There was an elderly lawyer, a rather distinguished looking citizen,
who came into see me, and told me he had been a student of my fathers
when my father was professor of comparative literature at Columbia University,
he'd known him anyway, maybe he'd even been in the same class, anyway
there had been some connection at Columbia between him and my father,
and he invited me up to his, I'm told, attractive summer home up in New
England for a weekend. He extended other invitations, none of which I
ever accepted, but this is, as I say, rather normal.
I also heard accounts about at least one official at the Commission,
I can't say with absolute certainty
[875]
that these are true, but I heard them from many quarters, and that is
at every Christmas his office was loaded with cases of whiskey and various
other fairly significant gifts from warm-hearted lawyers and firms that
did business with the FTC. I didn't think this was at all in the order
of things. I don't think a Government official should accept gifts from
people who do business with his agency. I suppose you always run into
a rule of reason if they send you a fifty cent calendar or even a three
dollar box of dried fruit. But when it gets into cases of liquor or even
a bottle or two of liquor, I think they're getting beyond the rule of
reason.
I think Senator Paul Douglas used to say that he would accept anything
on which he didn't place a value of over three dollars, or something like
that, other people take five dollars, anyway, somewhere in there. You
know there is a legal maxim, de minimus non cura
lex, the law does not concern itself with trifles, and there is
some point at which you shouldn't have to be bothered with sending back
calendars or letter openers, or things like that that are sent out for
advertising.
[876]
Anyway, I took a keen interest in this area of ethics, and I tried to
get the Commission to adopt ethical standards, and we did eventually adopt,
as I recall, a code on ethical standards. I think there's value in these
things because no one can say later, well, there wasn't any rule about
it, and I didn't know, and so on, if you have laid down rules for guidance.
I think every agency in the Government, I think this may have happened
since my time in Government, but every agency in the Government should
have, there should be a standard rule and then with variations applicable
to the agencies special functions and problems, if necessary, and then
there should be a committee in each agency which will consider requests
from any agency employee as to whether such and such conduct on his part
was within or without the rules, because you get these borderline situations
where he honestly doesn't know.
Maybe there is all this, I mean since my time in Government, but this
is what I would have projected when I was in Government. And then there
should be an overall committee which would advise the agency committee
on some standard Government policy on the more important issues of controversy
or problems.
[877]
Now, my impression is, that something like that now exists in Government
but it's since my day.
In any event, we did adopt, as I recall, some kind of FTC ethical code,
but one thing we didn't adopt which I thought we ought to and that was
a "no practice" rule for commissioners and the very senior staff, I think
the proposal as I drafted it and submitted to the Commission was, that
no commissioner and no staff man of the grade of GS-15 or above, should
practice before the Commission within two years after he left the Commission.
This was controversial at the Commission, especially among the senior
staff, because practically everybody who leaves the Commission, all the
lawyers, expect to practice before it, this is normal, I can understand
that. Before that, in connection with our ethical code, as I recall it,
we had actually adopted a rule which included a no moonlight law practice
rule for our lawyers. Tradition has been that some of our lawyers have
sundown offices, that is they have law offices at night and on weekends,
did a little legal work.
This is a clear invitation to people so minded, to
[878]
line up that lawyer on their side, by using him as a private lawyer and
then they go to see him in his official capacity, and it's pretty hard
for him not to be friendly toward them, if he's their lawyer on the outside
on some matter. I mean, this doesn't need spelling out, it's a clear invitation
to unethical activities. So we passed a rule that this was to end, and
I remember an elderly lawyer, a man approaching seventy and about to retire,
came in and had an argument with me over that. He was going to retire
and he had a sundown office, he had his name up and he wanted to retire
to that office and he didn't want to close it up. He was mad and we had
quite a sharp argument, but I said I didn't see how we could make an exception
in his case. If we did it for him, why shouldn't we do it for anyone else
who wanted to do it, and he stamped out in a huff. He was an unusual fellow,
another very rightwing guy that detested everything the Truman administration
was doing, and he used to write letters to the editor complaining about
it. He was a segregationist and everything, you know. He just hated the
Truman position on civil rights, and he hated the Truman administration,
he was mad at about
[879]
everything. Some people thought that the Commission ought to curb those
letters he wrote to the editor while he was a Commission official but
I didn't. I didn't like them but I thought he had a right to write them
if he wanted to; just an expression of his opinion.
In any event, the two-year rule I speak of, I couldn't get it through
the Commission, and some of my fellow commissioners said if there are
specific cases where influence is being used by former employees, let's
deal with them, but let's not pass this general, blanket rule.
Later, an individual case did come to my attention, and I said, "All
right, you wouldn't pass my general rules, you said let's deal with the
individual cases, here's one," and this was the case, I mean, I want to
say there was nothing corrupt in this, but it indicated to me the desirability
of that two-year rule of mine. Former Commissioner Robert Freer, a Republican,
now dead and a nice fellow, practiced before the Federal Trade Commission,
had a fairly extensive practice before the Commission. He and I were on
friendly terms, he'd come in to see me, he'd drop in to see me once in
a while, I liked him, and he was well regarded at the Commission.
[880]
He had been a staff man, who had made his way up to commissioner, and
he was well thought of at the Commission. Well, I've forgotten all the
details of this case, just the general thrust of it, but I kept a file
on it and I can't find it so I may have given it to you, Jerry, somewhere
along the line I think, I hope so, because I can't find it in my apartment,
it dealt with this case.
I think I called it the Rexair File, I believe that was the firm involved,
I'm not actually certain of that, but anyway, Bob Freer was the individual
involved, plus one of our Commission staff lawyers. As I recall what happened
was this, my legal assistant at this time was Earl Kintner, a Republican,
who later, by the way, became General Counsel and later Chairman of the
Federal Trade Commission, and one day, as I recall the situation, Kintner
told me that one of the staff lawyers, I won't mention any names, it doesn't
really make that much difference, had told him on the street when they'd
met, that Bob Freer was very unhappy because he was representing the Rexair
Company, that's the name that sticks in my mind. The Commission had made
some investigation looking to the possible issuance
[881]
of a complaint. The staff had recommended the case be closed without
a complaint. It had come to me and I wasn't satisfied with the staff recommendation.
I ordered the case reopened and a further investigation which still might
result in a complaint. The further investigation was still being made.
I wasn't satisfied that this thing had been exhaustively enough explored
before closing. Freer was unhappy because he had notified his client that
the case was closed on the basis of the staff recommendation which is
almost always the case, and he had collected his fee on the thing, you
see, so he was unhappy. According to Earl Kintner, this lawyer, who was
a staff lawyer and a friend of Freers, they had served on the staff together,
that was the rub of it, you see, dealing with friends. I am not suggesting
for a moment there was anything that might have been in the least corrupt
about this thing, it was an ex-staff man and an ex-Commissioner talking
to a friend on the staff, who feeling friendship for him, goes to bat
for him on a sort of personal basis. And as Kintner recited this thing,
the Commission lawyer wanted Kintner to lay these facts before me about
Freer's embarrassment in
[882]
the hopes that this might dissuade me from keeping the case open.
When Kintner told me that, I was annoyed, this wasn't the way to do business.
It was being suggested that on a purely personal and friendship basis,
because Freer was embarrassed, I should do something on that basis. This
is no way to exercise the functions of Government obviously on that kind
of a basis. So I then called in the staff lawyer involved, and he denied,
as I recall, having told Kintner that he wanted Kintner to pass this on
to me, he just had told Kintner about the situation, but had not made
a request that it be passed on to me. As I recall it, what Kintner said,
and I am confident that Kintner told me the truth, what possible reason
would he have not to; he came to me and told me what he had been told,
but then the other fellow realized how that sounded, and watered down
the story. The original story was that Freer had asked him to pass on
to me, somehow, the word of what had happened and his embarrassment, in
the hope that this would influence my judgment, evidently. Well, then
this fellow came in and there was a conflict of testimony between him
and Kintner as to what he had said to
[883]
Kintner, that was the nub of it.
It made a good deal of difference as to whether he had asked Kintner
to tell me or whether he had just mentioned casually, you know, friends
talking on the street, I mean, it's a different matter. Well, I called
in the lawyer involved, and he now denied having told Kintner what Kintner
told me he had. So I presented this to the Commission. Well, nobody likes
these cases, these are always prickly. That's the reason you should have
a rule, because when you get to the cases, they are always prickly, you're
usually dealing with friends, when you're dealing with staff men, and
nobody wants to hurt a friend, especially when you don't think there's
any major corruption there. It was just a question, is this the way the
Commission should do business? So the Commission then authorized an investigation,
or at my request it was made. An investigating officer was appointed and
he investigated and interviewed everybody and took statements from them
including me and Kintner and the staff lawyer that I referred to, Freer
and so forth, and it broke down into a conflict of testimony again, one
said, "Yes," and the other said, "No," and the Commission decided to wash
it out without doing anything. But to me, that only underlined the necessity
[884]
for a rule.
You see, of course, the fact of the matter was that Freer had already
been out more than two years when this happened, but the fact is this,
though, a commissioner or senior staff man when he leaves, immediately
has a good deal of influence, if he's liked particularly, with the men
around him, and who are subordinates. They can't help that, they treated
them with respect while he was there, they can't help feeling some, and
maybe they're under bonds of gratitude to them for promotions and things
like that. That cools off rather fast, though. If you can't practice before
the Commission for two years, a lot has been forgotten, and the old rule,
"What have you done for me lately," applies in all human existence. I
still think that two-year rule would be wise. It indicates the difficulty
of dealing with ethical situations as they arise in the absence of a general
rule covering that category of cases, because here was an ethical situation,
and yet when you try to grapple with it, it sort of fades away like smoke.
Well, my main complaint about ethics in Government, though, I think,
is embodied in my fight, in the
[885]
last year of my tenure on the Commission in '52 and through September
of 1953, first with the fair trade lobby, I've forgotten what it was called,
but that's what it amounted to. We had issued a complaint in a case involving
the fair trade issue, I think it was against Eastman Kodak, I'm not certain,
and this lobby had sent a newsletter out to their people urging them to
descend on their Congressmen and Senators and get them to get the Trade
Commission to drop the case. I then wrote a letter to this lobby saying,
if they wanted to come in and intervene in the case, I would personally
vote to permit them to come in as interveners in the case, to present
their case before the Commission, but this is a quasi-judicial case, and
nobody should bring pressure on the Commission to drop a case this way,
and I, for one, was not going to succumb to that pressure, and so forth
and so on.
The second situation that arose, I've already described, was the oil
report in which a staff report of ours called "The International Petroleum
Cartel Report," three hundred and seventy-eight pages, no conclusions,
no recommendations, just facts, facts from the subpoenaed files of the
oil companies and
[886]
from investigations of them taking place in countries around the world,
so infuriated the oil companies, that instead of coming in and attacking
the report on its merits and saying it's wrong, factually, which they
couldn't, because it wasn't wrong, they tried to vilify the Commission
and the report and anybody who had anything to do with it, and not only
in the United States but all over the world, all around the world.
I went on television, had press conferences, there was quite a to-do
about it. I wrote to national leaders and organizations all over the country
including President-elect Eisenhower, went up to New York and tried to
see him and did see Gabriel Hauge, and I wrote President Truman, who gave
me a long and most appropriate reply endorsing what I was doing, I wrote
Paul Butler, the Democratic chairman, and got a good letter from him,
I wrote the Republican chairman, because, after all, ethics is non-partisan,
and I knew the Republican administration was coming in. I got good answers
from the Democratic side, and bland, non-responsive answers from the Republican
side, generally speaking, which, I suppose, was to be expected. I had
a large luncheon
[887]
at the Willard to which I invited representatives, the chairman and ranking
minority members, who were still, usually Republican, of all the regulatory
commissions, and representatives of the Eisenhower administration, the
Republican National Committee, the Democratic National Committee, Clark
Clifford was there and others, and we discussed this back and forth. Of
course, this was December, 1952, a month after Eisenhower had been elected
but before he was inaugurated. There was general agreement that the regulatory
commissions should resist these pressures, that we ought to form a working
group, but nothing was ever done to implement that because new men came
in, new teams, and with different ideas.
Well, I also wrote national organizations around the country and tried
to get them to raise their voices in attacking improper pressures, because
the typical situation in Government is that everybody yells about this
corrupt scoundrel of a public servant who had betrayed his trust, but
usually there is very little outcry against the man who made him betray
his trust, and I say there ought to be just as much attention to the corrupter
as to the corruptee.
[888]
I also said that the best way to prevent unethical pressures of this
sort, is to spotlight and pinpoint them as they start, not wait until
they hit you, but as they start. Put the focus of the spotlight on them
and attack them, you see. That makes it a little harder for them to get
rolling. You should shout, "Oh, oh, look at what that lobby over there
is doing, they are writing to their constituents, and asking their constituents
to get the Senators and the Congressmen to descend on the Federal Trade
Commission and coerce them into doing something -- not on the merits,
but just because that's their side of the case."
We had one interesting experience I shouldn't overlook. This is a very
famous Congressman and he's still in Congress, I won't mention his name,
he's the chairman of an important committee, was then and is now, and
it was a case involving a watch company. I forget the details of the case,
just the main thrust of what happened, but, as I recall it, our lawyers
had worked out some kind of a consent settlement with the watch company
on a case against them, it was in the process of being formulated, they
wanted a little better terms, apparently, than our lawyers were offering
them. So
[889]
this Congressman called me up, and I believe he called every member of
the Commission, to urge us to give sympathetic treatment, do this and
that, you see, in the settlement of the case. Well, that was all right,
you expect that from a Congressman, but then one of our senior staff men
came in a few days later and told me something that I found interesting.
He said he had called the lawyers representing the watch company, up in
the city they were in, and had asked for the lawyer handling the case,
and, by gosh, he had been referred to that Congressman, who was also practicing
law, and he was the fellow handling the case. He was wearing two hats
on this thing -- one as a member of Congress, working for a constituent,
which is perfectly all right, and the other as the lawyer handling the
case for them, too, which is not exactly all right. It's only fair to
say -- this is a good Congressman by the way, he's no scoundrel by a long
shot, he's had a long and honorable record, I don't think this was one
of his most glorious hours -- but it's only fair to say that we got the
settlement we wanted in that case, I mean, the Trade Commission, we did
not, as I recall, give in to the Congressman, and he never attempted to
bully, rag, or coerce us. Sometimes
[890]
a certain type of individual will say, well, the sons of guns, they wouldn't
do what I wanted to, they come up here wanting something, I'll whack them
good, but he never tried that.
There was another case that comes back to me. When we were having the
trouble with the oil companies in late '52 or early '53, I guess it was
early '53, right after the Republican 83rd Congress came in, and a Trade
Commission staff man, whom I knew, told me that he rode in a car pool
with a fellow who was sitting with the House Appropriations Subcommittee
that handled our appropriation, and they were down at the Bureau of the
Budget, I believe, holding meetings with the Budget people, and also with
an advisory group of outside people that they had, as I recall the situation,
and, son-of-a-gun, one of the advisory group was an oil company man. We
were having a knock down drag out fight with the oil companies, who were
attacking us, it didn't make me feel happy to think that an oil company
man was going to have anything to say about what our appropriation was,
obviously, he'd like to reduce it to zero, I suppose.
This story was later reprinted in one of the labor
[891]
weeklies about this oil company man sitting in on the secret sessions
of the House Appropriations Subcommittee. Well, when we were up before
the House Appropriations Subcommittee a little later, I raise this when
it came my turn to talk, I recounted this episode and said I realized
that the Appropriations Committee could meet with anyone they wanted,
but on the other hand, I wanted them to know of this situation, that we
were having this serious controversy with the oil companies and that,
therefore, it didn't make me, at least, feel very happy to think an oil
company man would have any voice whatever in deciding what our appropriation
should be, and I hoped that the Appropriations Committee would bear that
in mind when they went over our appropriations, if any cuts had resulted
from his interventions, or something like that.
I remember that it was rather a hot exchange, not on my part, I've never
gotten heated with members of Congress on committees, I have taken a lot
of stuff and nonsense, I've been insulted on many occasions but I've made
it a rule never to get mad and never to answer back but just reply, always
politely, because you can't win in these exchanges -- your best bet is
to keep your
[892]
temper and answer politely, even if you're being really insulted, which
sometimes happens when some of them, this is unusual, but some of them
can be very brutal and rough on a witness if they want to discredit him.
They can call him stupid and ignorant and deny that he's telling the truth,
all sorts of things. The thing is to hold your temper and reply temperately.
Well, I remember one Congressman didn't think much of my source, he obviously
was anti-labor and the fact that it was in the labor magazines showed
him that it couldn't be true to begin with. I knew it was true from firsthand
testimony from the staff man who rode in the pool. I mean, why would the
fellow who was present at the meeting tell him a lie about it -- of course,
he was telling the truth. I believe that I had some correspondence with
a Congressman on that committee on this matter, too, he's now a Senator,
a Republican Senator. He took me sharply to task.
Anyway, I will say this, certainly these lobbying activities, these attempts
to influence people, exist and they have done it in every administration,
I suppose, since the beginning of time, and as the Government today has
more powers and greater ability to give or withhold
[893]
or affect matters which involve enormous sums of money, why obviously
there will be greater pressures brought to bear, this is the nature of
things. I think, in my experience, and I'm talking about the years I served
in Government, that the Government on the whole, with some exception,
was remarkably free from major corruption, I don't mean to say there weren't
individual episodes, there were, of course, but if you take it as a big
picture, I think the Government's record would compare favorably with
that of business, let us say, during the same period as far as dealing
honestly with its "constituents." As I've noted before, it's always seemed
to me that the Truman administration had its minor scandals, which
have been well publicized, mink coats and deep freezers, is the phrase
that usually goes around, well, these are unfortunate but they are still
on the order of rather minor events. It seemed to me that the Republicans
on the other hand, are no more free of minor corruption than we are, I
could recount many episodes in the Eisenhower administration which involved
that sort of thing. But they go in more heavily for major corruption,
which is usually, not necessarily, but sometimes, quite legally done.
I
[894]
mean in the case of the Teapot Dome thing, that was corrupt and illegal
arid bribes were passed.
On the other hand, in the case of the Dixon-Yates, it was almost legal;
it would have been legal if they hadn't so foolishly had that conflict
of interests by placing that First Boston Corporation official in the
Bureau of the Budget, too, so he was on both sides of the fence in his
dickering with the Government. Aside from that, though it was legal, but
it still was greatly contrary to the public interest, and I'm glad this
thing was killed, and it was killed largely through the intervention of
Estes Kefauver, Joe O'Mahoney and other public interest Senators who didn't
let the rascals get away with it. I think that covers what I wanted to
say about ethics in government.
Continuing with the Federal Trade Commission, I think I ought to say
a word about the staff of the Federal Trade Commission, I have talked
about my fellow commissioners. We had some able men on the staff, some,
perhaps quite a few, who wouldn't fall into that category, but that's
the case in every agency. Naming some of the abler men there, among the
lawyers, a man who impressed me greatly was Joe Wright, Joseph S.
[895]
Wright. He was a small town boy from Montana. He had come to Washington
to work for Senator Burton Wheeler, as I recall, in the mid-thirties and
then come to the Federal Trade Commission. When I first met him, he was
Assistant General Counsel of the Federal Trade Commission, and in the
spring of 1950 I was in charge of a White House task force to write a
basing point bill veto and I brought Joe Wright over, he came over from
the Federal Trade Commission to help me on that, among others. I was much
impressed with him. The fact of the matter was so much so that unbeknownst
to him, I recommended him for the next vacancy on the Federal Trade Commission,
and I found him very helpful while I was a commissioner, often consulted
him and always found his judgment good. Now I'm glad to say that my judgment
on Joe has been vindicated as to his ability by the subsequent course
of events, because while I was still on the Commission, the Zenith Radio
Corporation, lured Joe away from the Commission to be their General Counsel,
solicitor or chief lawyer, and he is now president of that huge firm and
has been for some time, and it has had, apparently, great success under
his stewardship, and
[896]
this was a man, who when he went away there, he was a bureaucrat, a civil
servant, his entire career of some fifteen years or so was working up
through the ranks of Government, and you wouldn't have thought that was
the ideal preparation to become president of a great business firm, would
you, but he did it and, apparently, he's done a bang-up job there, too,
anyway he is their president.
Incidentally, amusingly enough, when I first went to the Commission,
I needed a legal assistant, every commissioner is entitled to a legal
assistant and that's the most important appointment he makes. All the
individual commissioners got under the reorganization plan, which provided
for most appointments by the chairman, was their own immediate office
staff, their secretary, their legal assistant and messenger -- well, the
secretary is important, too, but the most important is the legal assistant,
of course. These were regarded as very good jobs by the Commission legal
staff; they bring you in contact with the commissioners and they often
lead to promotions, so there is considerable competition for them. Six
or eight commission lawyers applied to be my legal assistant. I interviewed
them all, and there
[897]
was some good men, in fact, almost all of them were good men and amusingly
enough, two of them became chairman of the Federal Trade Commission, two
of the men who applied to be my legal assistant. One is the present chairman,
Rand [Paul] Dixon, and the other was Earl Kintner. Strangely enough, in
spite of the fact that Earl was, I think, the only Republican in the group
that applied, and I was a dedicated Democrat, I picked him. I figured
what I needed was professional competence and I believed that he was,
probably, the best of a good group, and I think that my judgment on his
professional competence was vindicated, but there was an amusing backlash,
later, on the political side.
Earl was a loyal and faithful legal assistant until the election of '52
and then I could feel him falling away from me, immediately; he didn't
want to be too closely associated with a liberal Democrat when a fairly
moderate or conservative Republican administration was coming in, and
he had ambition. He was not only a good lawyer, but he was no mean politician.
To make a long story short, first of all, he got himself selected as General
Counsel of the Trade Commission.
[898]
I do not think he was actually the choice of our new Republican Chairman.
I think that Earl lobbied so well on the Hill and elsewhere, that he was
sort of rammed down the throat of the new Chairman, because I think that,
quite frankly, the new chairman might have looked a little askance at
a fellow who had been working for me for the last three years. Earl was
well aware of this. In any event, Earl wasn't sure that I would vote for
him for general counsel. I reassured him, because after all, I knew that
he was very able and I couldn't imagine that the Republican administration
could have gotten anyone better than Earl, I mean, he was a good lawyer.
Politically, he'd become undependable from my standpoint. I was holding,
for example, a series of meetings which I tried to bring together, Republicans
and Democrats to work out some sort of collective security fight against
Senator Joe McCarthy, who was doing a lot of damage then. I sent the Truman
Library accounts of the meetings I held and the people I invited, and
those who came, and there was some very illustrious names on my invitation
list, although, not all turned up at the meetings. I tried to get people
like Allen Dulles and Henry
[899]
Cabot Lodge, I've forgotten who all. I did get some good men, but it
was hard to get important Republicans.
I wanted Earl Kintner to come to this thing, but he ducked out. He was
my legal assistant, you see, but he didn't come, although I invited him.
And there was another thing, Lowell Mason, my Republican colleague, for
years had been running up and down the country making speeches before
business groups, attacking the Federal Trade Commission, of which he was
a member, and he had a sort of boilerplate speech which he made in various
forms, I've mentioned it before, but I think it is appropriate to summarize
it here. As I recall, the idea was that the Federal Trade Commission was
a powerful bureaucracy and it's at his throat, it is later than you think;
he talked about some Russian Commissar of Justice named Krylenko, or something
like that, who condemned first and then tried the case, that was his form
of justice, and it wasn't ever clear to me whether he had learned that
from the Federal Trade Commission or we learned that technique from him.
In any event, we were soul mates, Krylenko and the Commission, as far
as Lowell
[900]
was concerned, in our methods of operation. Nobody had ever answered
Lowell. I thought somebody ought to start making a few speeches against
Lowell's thesis, and I wanted Earl to collect material on Lowell's speeches
as a basis and start helping me to work up some speeches, opposing his
thesis, but it was true that Earl was busy, he could never find time for
that. He was very unhappy about the assignment to begin with, because
he felt that this would put him in trouble with Lowell. I assured him
that I would go to Lowell and tell him exactly what I was doing, and that
Earl was doing it under my direction and not at his own instigation.
And I did, I told Lowell, well, Earl has got to take orders from me,
but this is my idea not his, I assure you. Well, we never got around to
doing that, but then the payoff was this, and this really had its elements
of humor. When Earl was made General Counsel, there was a luncheon given
for him by the Commission, the commissioners and the senior staff feted
Earl, and everybody made a little speech. Well, a few days before that,
the announcement of Earl's appointment as General Counsel had been made
and the press releases
[901]
had been issued, and the press release, as I recall, was two pages, single
spaced and it recounted blow by blow, Earl's career from birth, including
being valedictorian of his high school class, and such minutiae as that,
but all it had to say about the last three years of his life was, that
he'd been legal assistant to the Commission, they never mentioned my name,
he hadn't been legal assistant to the Commission, he had been legal assistant
to Commissioner Spingarn, you see, but the whole last three years of his
life were boiled down to an ambiguous statement that hid what he had really
done.
I was amused by this. I understood the reason, and when I got up to make
my speech, I made some, I hope, humorous remarks on the subject, I said
it was hard to tell where Earl had been for the last three years from
reading this lengthy history of his. I wanted to assure them that if anyone
was interested, I'd be glad to tell them where he had been, he'd been
in my office helping me -- I don't know what I said, but it was all kidding
Earl. Everybody laughed and that was all right. I wasn't hurt by that.
But then something happened that was different.
[902]
I appointed a fine young chap named Paul LaRue to replace Earl as my
legal assistant, and I thought, in ordinary course, a short press release
on this was in order, to get everyone around the Commission to know that
I had a new legal assistant, and so forth, and give LaRue the proper status.
So I wrote a little press release, just a couple of paragraphs, it was
half a page, I naturally stated that he was replacing Earl Kintner, who
had been my legal assistant for the previous two and a half years and
who had now become General Counsel.
I wrote this out myself and I sent the draft down to our press office
to type up for final issue. Within twenty or thirty minutes after I sent
it down there, Earl appeared in my office with the draft in his hand,
and he begged me to remove the reference to him in my own press release.
Now, that really shook me, it made me angry, very angry and I gave him
a tongue lashing, and he assured me that this was simply a tactical matter,
that if I would watch his career as General Counsel, I would be proud
of him, because he was going to be a good anti truster and so forth and
so on, but this was
[903]
tactical, you know, there's nothing personal in this. I assured him that
I thought it was a very scrummy trick, that you couldn't rewrite history
to eliminate the last two and a half years, and even if he could rewrite
his own history as he had on his own press release, he couldn't rewrite
mine. He had the gall, in fact it was pretty stupid, to think that he
could do that.
After I had thought it over, I sat down and I wrote a letter to Earl,
in which I recited his infamy and how I had befriended and picked him
for my legal assistant, that he served ably for two and a half years,
and now he had the temerity to do this, and so forth. It was a very
sharp letter and I was going to send it to him and with a notation that
a copy was being placed in his personnel file, or something like that.
Well, I wrote the letter in rough draft, and I thought of it overnight
and the next day I decided not to do it quite that way. I simply called
Earl in and I read the draft letter to him and then I said, "I'm not going
to put it in the personnel file," I said, "I just wanted to get it off
my chest. I feel better
[904]
now, now that you know what I think of you," that was it. Earl became
General Counsel, and after I left, he became Chairman of the Commission,
and, by the way, he's a very able guy, let's not underestimate his talent.
He was for a couple of years president of the Federal Bar Association,
and he was the sparkplug of their putting up their own building. It's
on H Street. He was also the sparkplug of the Federal Lawyers Club, which
they sponsored, which is now a very successful enterprise in that building.
He's a fellow who gets things done, and I think he had a slightly guilty
conscience about me because every year .since I left the Commission he
sends me a Christmas card, every year, and I've never sent him one during
the whole period. Three or four years ago I ran into him at the Federal
Lawyers Club, his Federal Lawyers Club, since he was the president,
and I went over and said, "Earl, you know I've been annoyed at you about
long enough, after all there is a statute of limitations on this thing,"
so we shook hands and I sent him Christmas cards ever since.
He is very able. All of us have done things
[905]
that we're not too proud of, and I can't say that I think that was one
of his shining hours, that occasion, but that he has great ability, no
one could argue. Now that's Earl Kintner.
Then there was other men, Joe [Joseph E] Sheehy who was head of the Bureau
of Antimonopoly, a fine chap, a fellow of the finest quality, and Everett
MacIntyre, who was his principal assistant, and Everett is a wonderful
man and a very dedicated antitrust lawyer. He, subsequently, a couple
years after the "new team" came in in 1953, he went up to the Hill as
General Counsel of the House Small Business Committee, and eventually,
as he was a great friend of Wright Patman, the Chairman of that committee
and now the Chairman of the House Banking and Currency Committee, on the
urging of Wright Patman, he was appointed to the Commission, and he is
now a Commissioner. Then there was other men whom I remember, good lawyers,
such as Vic [John A.] Buffington, Bill Tinsley, there was an assistant
general counsel from Mississippi whose name I can't remember, he was a
nice fellow and a good lawyer, and there were others. It's hard to remember
them all, I don't want to slight anyone.
[906]
Among the economists, the two men with whom I worked most closely were
John Blair, a very able and dedicated antitrust man, and a fellow full
of ideas; he has for many years now been the chief economist of the Antitrust
Subcommittee of the Senate Judiciary Committee, extremely able, and another
extremely able economist was Bill Johnson, William Summer Johnson. Bill
became Chief Economist of the House Small Business Committee under Wright
Patman, and he became staff director of the joint Senate-House Committee
on the Economic Report, and he became staff director of the House Banking
and Currency Committee, and two or three years ago he left the Hill and
became an economic consultant for a while, and a year or so ago he went
out to Hawaii to settle, and he is now the State Economist of Hawaii and
was very active in the 1966 campaign there. He's a liberal Georgian, and
I rate this type of liberal, liberal southerners, as one of the best breeds
we have in this country, because it's easy for a man to be a liberal in
an environment where everybody he knows is a liberal, a New York liberal,
or a Chicago liberal, or a Los Angeles liberal doesn't deserve much credit,
probably in the circles
[907]
in which he moves, he would be despised and scorned if he were anything
else, but a fellow who is liberal in Georgia or Alabama or Mississippi,
he has to be a game fish swimming upstream. His liberalism is against
the grain of his own background and environment, that's much harder to
do, so I rate them as an unusually fine breed of cat.
Well, Bill Johnson is that kind of fellow and he's a dedicated anti-truster,
too, He and I worked very closely on many projects together, and we were
flashing air mail, special delivery letters back and forth between Hawaii
and Washington during their last campaign, too.
Then there was Corwin Edwards, who was a distinguished economist, who
had a long reputation as a professor of economics, I think he was at Northwestern,
now he's out in one of the Oregon schools. I've forgotten whether it's
Oregon State, or the University of Oregon. He's been a consultant in many
capacities for the Government. He was consultant to Esther Peterson on
her Consumer Protection White House operation. He's a fine chap and very
able.
There was John Wheelock, who was Jim Mead's legal
[908]
assistant, the chairman, a moderate, pleasant, likeable fellow from Tennessee,
he's now the executive director of the Commission, he's got the chief
staff job. Well, there were others whom I've probably overlooked but I
have mentioned the men whom, I suppose, whom I worked with most closely.
Now one thing I want to mention is the tempo of the work at the Federal
Trade Commission. I have been used to a much harder tempo, a much more
driving tempo, actually. I had come from the White House where we worked
night and day and weekends. I talked about my running the task force that
wrote the Defense Production Bill and I found that I got the assignment
on a Saturday morning, on July 15, 1950, and the bill was completed and
taken to the Hill on Wednesday, July 19th. We were working night and day
for four days. That was a awful stretch, just a blur, you know -- I mean
all day Saturday and all night Saturday and all day Sunday and all night
Sunday, my goodness, it was awful. I was there until midnight or two o'clock
every night and up in the morning reasonably early, too. This was not
atypical, there was always a crisis at the White House on something.
[909]
Now in the Treasury in the '30s, we were working in sort of a crisis
atmosphere, there was an awful lot of night work and an awful lot of weekend
work at the Treasury, and after the war, that is after I came back to
the Treasury, the three years I was there then, the work was heavy but
it was not as heavy as it had been in the '30s. It wasn't quite that crisis
atmosphere as much then as had been, but when I got over to the Federal
Trade Commission, I found a thoroughly different tempo, it was strictly
an 8:30 to 5:00 tempo, hardly anyone worked overtime, relatively few,
while there were many dedicated and hard working people there, the fact
remains that there wasn't the accelerated tempo. It was an old line agency,
for one thing. The Federal Trade Commission dated back to 1914, actually
set up in 1915 under a '14 statute, but I think that probably the thing
was that this was an assembly line of cases, the Commission.
There were six or seven hundred employees when I was there and probably
two hundred and fifty of them were lawyers, something on that order, and
then there were many economists, statisticians and accountants besides,
a heavily professional group. And when you
[910]
have a never ending chain of cases, you see, and it doesn't make any
difference how many you dispose of, that just means other cases have moved
in on you, as fast as you dispose of some you get more; there isn't the
incentive to work seventy or eighty hours a week that there would be if
you were working on different matters, one time one thing and one time
another.
Here it was case after case after case, and the man worked in either
one category, at that time they were divided into two main bureaus – anti-monopoly
and anti-deceptive practices -- antimonopoly handled the so-called antitrust
cases, the price fixing and Robinson-Patman and so forth and the anti
deceptive practices handled the false advertising and deceptive practices,
so I think that had something to do with the way the staff worked, most
of them, I don't mean to say there weren't exceptions.
But I used to stay, I used to come in late, but I used to stay till six,
everybody left at five, I'd be there all alone until six or later every
night, and then I'd take my work home and read. An enormous part of the
commissioner's job is reading briefs and memorandum,
[911]
you see, and you can do that anywhere, of course. I used to take that
home and read them at night, read them weekends. The first few months
I was on the Commission, I didn't work too hard, I was still licking my
wounds a little, I hadn't wanted to go there, but then I began to become
interested in the work and I began to work harder and pretty soon I was
working full tilt, or pretty near.
I wasn't working as hard then as I am right now, though, although I don't
have any assigned job. I've been getting up, since September at least
from four to six almost every morning, I was up at 4:45 this morning,
for example, Jerry, I probably had knocked out half a dozen letters and
memorandum before you woke up.
There's one factor I want to mention. Although I was a White House staff
man, had been assistant to the President, there was never, not once in
the whole time I was there, any White House pressure on me on a single
case, to decide that case one way or the other, I just want to make that
a matter of record -- not once.
I would like to say that when I left the Commission, I issued a press
release, my term ran out on September 25th,
[912]
and I issued a press release September 21st, a sort of a final swan song,
and I summarized my views based on my three years experience on the Commission,
of how an antimonopoly agency such as the Federal Trade Commission, should
operate in order to serve the public interest most effectively. I'm going
to give you this memorandum which I asked to be Xeroxed and returned to
me, and I will note only my list of the headings. (1) to be worth its
salt, the Commission must be truly independent, (2) to be effective, the
Commission must have a highly competent and uncowed staff, which genuinely
believes in the objectives for which the Commission was established, (3)
the Commission should not be afraid to deal with controversial matters
and should be tough enough to take its lumps for doing so, (4) the Commission
is substantially too small for the job it has, and it should actively
seek adequate appropriations, (5) the Commission should strongly resist
the current efforts to weaken or emasculate the antitrust laws, (6) the
Commission should strongly resist efforts to influence its quasi-judicial
decisions in extralegal ways, (7) the Commission should select its cases.
more advertently, (8) the Commission
[913]
should do more work in the economic reporting field, (9) the Commission
should not rely on unenforceable voluntary agreements to discontinue illegal
practices in the antimonopoly field, (10) the Commission should make the
meaning of its work more understandable to the Congress and to the public,
(11) the Commission should not wrap its quasi-judicial robes too tightly
around itself.
Those are the points I made. I want to mention a little more on two of
them, I think. I said (1) to be worth its salt, the Commission must be
truly independent. Now, of course, I was a presidential man who came over
there and, of course, what I was really objecting to was too great presidential
domination of this so-called independent quasi-judicial commission, which
is supposed to be independent and the President had no right to influence
its decisions, but the fact is, of course it can't be avoided that he
appoints the commissioners. I mean, they would have to be appointed presumably
by the President, but its appropriations have to go through the Bureau
of the Budget, his agency, which regularly cuts us more than Congress.
I pointed this out, the average cut of the Budget over the ten
[914]
years previous to the year I made this check while I was on the Commission,
was I think eighteen percent a year on the average, whereas the Congress
only cut us another twelve or thirteen percent, if my memory is right,
on the average.
Then our legislation had to be cleared with the Bureau of the Budget.
I think we should send our budget direct to Congress without going through
the Bureau of the Budget, I think we shouldn't fool around with the Bureau
of the Budget on clearing legislation. As a matter of comity, we might
send them copies of what we're going to send up, but not ask them to let
us know if it's O.K. or not.
Then there's the question of the strong Chairman, I've mentioned that,
who dominated the Commission, and who serves at the pleasure of the President,
as Chairman. He's his man, he makes all the appointments, virtually, and
he really runs a large part of the Commission. The other commissioners,
of course, have the same voice in quasi-judicial decisions but in the
administrative operations, they do not.
Then there is the question of appealing our cases; we have to get the
approval of the Solicitor General to
[915]
take our cases up to the Supreme Court, again he's the President's man,
and so forth and so on.
So, although, it is said that the Commission is independent, in fact,
they are very heavily under the domination of the President. Your point
of view shifts, depending where you are, obviously, and when you are in
the White House, you're likely to be a White House man, but when you get
to be an independent commissioner, you are an independent Commission man.
Maybe that sort of typifies how human nature operates.
The other point I wanted to mention is the, I think it's number six,
no, I had it number five; "the Commission should strongly resist the efforts
to weaken and emasculate the antitrust laws," and six too, I guess; "the
Commission should strongly resist efforts to influence its quasi-judicial
decisions in extralegal ways." Sometime after or around, I think it was
December or January, I've forgotten exactly when, but around the beginning
of the takeover of the Eisenhower administration, I held a luncheon at
the Willard and I invited the leaders of the antimonopoly conference,
which consisted of small business organizations, and some labor organizations,
and some farm organizations,
[916]
which had been kind of a loose coalition to work against monopoly. I
invited both Republican and Democratic members of Congress. Estes Kefauver
was there for one, and I invited Senator William Langer. Senator (Charles
William) Tobey came, he's now dead, a Republican from New Hampshire, and
others, and the point I tried to make in my keynote speech to them, if
that's what it was, was that I felt we had a lot of work ahead of us,
those of us who believed, in both parties, in anti-monopoly. I said I
didn't think my administration had done too good a job on it, frankly,
I couldn't give them a very high rating. I didn't say that it was very
bad, but I didn't think it was terribly good, and from what I had seen
I didn't think the next administration was going to do any better. There
were ominous signs on the horizon already, you see, along those lines.
So I just suggested to those in both parties -- heaven knows antimonopoly
should be a bi-partisan, non-partisan sort of issue. Those of us in both
parties, who believed in antitrust and antimonopoly work should hang together
and try to resist the pressures to emasculate this work.
Well, I could elaborate on each of these points,
[917]
but I think the paper here says just about what I would say, and I still
stand on what I said in there.
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