proper external pressures by persons in high governmental positions, and that such persons have been the recipients of the bounty of the corporations thus favored. The witnesses to be heard today are, with respect to channel 5, Mr. Robert Choate, Mr. William Mullins, who, I understand since this was prepared, is ill and will not be able physically to be with us, but a further announcement will be made in regard to that later, and Mr. George Akerson; with respect to the East Boston Co., Boston Port Development Co., Strathmore Woolen Mills, Northfield Mills, Inc., and Lebanon Woolen Mills Corp., the witnesses today are Mr. Alfred Johnson, Mr. Samuel Back, Mr. Winthrop R. Scudder, and Miss Mildred Paperman. As stated at the outset, one of the purposes of the hearings today is to inform the witnesses of the purpose of the inquiry and the pertinency of the documents and records which are to be furnished in response to subpena presently issued or which may hereafter be issued. The subcommittee has no objection, I might say, to narrowing the subpena duces tecum already served on the Boston Herald-Traveler Corp. to exclude the papers and records relating to the Herald-Traveler's news-gathering staff activities, provided, however, that if any of such activities were directed at attempts to influence the decision of the Federal Communications Commission in the award of channel 5, then such papers must be produced. Before calling our first witness, permit me to repeat what was said in the opening part of this statement. This subcommittee is preforming a task which has been delegated to it by the U.S. House of Representatives. It is an inquiry which we believe technically to be in the interests of the American people and in the interests of the U.S. Government. In conducting this inquiry I can assure each of you that the committee has no intention of trespassing upon the rights of any individual citizen as guaranteed to him by the Constitution of the United States of America. We will recognize and zealously safeguard the rights of the witnesses who appear before this committee. At the same time the committee has every intention of carrying out its responsibility as charged to it under the House resolutions aforementioned. I would like also to express the appreciation of the committee to the chief judge and the U.S. marshal for providing these quarters in which the committee is holding its sessions. We are grateful to them for their cooperation with the legislative branch. I think also it would be well at this time to state that I have with me the senior member of the Interstate and Foreign Commerce Committee, an honorable and distinguished Member of Congress for many years, from the State of New Jersey, a former chairman of the Interstate and Foreign Commerce Committee, the Honorable Charles A. Wolverton, of New Jersey. Would you care to make an opening statement? Mr. WOLVERTON. No; I have no statement. Mr. WILLIAMS. Mr. Lishman, whom do you wish to call first? Mr. LISHMAN. Mr. Chairman, in order to complete the preliminary part of the record, I request that there be incorporated in the record, as though read in full, the designation, dated June 4, 1958, whereby Chairman Harris designated John Bell Williams as the chairman of today's hearing. Mr. WILLIAMS. Without objection, it is so ordered. (The document referred to follows:) CONGRESS OF THE UNITED STATES, HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON LEGISLATIVE OVERSIGHT OF THE Hon. JOHN BELL WILLIAMS, House Office Building, Washington, D.C. DEAR COLLEAGUE: You are hereby authorized to serve as chairman at the public bearing scheduled to be held by the Subcommittee on Legislative Oversight at Boston, Mass., commencing at 10 a.m. on June 5, 1958, in courtroom No. 4, 12th floor, of the U.S. Post Office and Courthouse, in connection with the appearance before the subcommittee of certain persons who have been duly summoned to appear at that time and place, and you are further authorized to take such action as chairman as may be necessary to the proper discharge of the subcommittee business arising at said public hearing. I understand that Congressmen Charles A. Wolverton and John J. Flynt, Jr., will also attend the said public hearing. Sincerely yours, OREN HARRIS, Chairman. Mr. LISHMAN. I would also like to read into the record at this point the resolution constituting the two members present today as a quorum. RESOLUTION Resolved, That for the purpose of taking testimony and receiving evidence relating to any matter under investigation or study by this committee or any subcommittee thereof under authority of House Resolution 99, 85th Congress, two members of the committee or subcommittee, as the case may be, shall constitute a quorum. "This is to certify that the above resolution is a true, correct, and accurate copy of a resolution adopted unanimously by the Committee on Interstate and Foreign Commerce of the House of Representatives in executive session on June 4, 1958. “W. E. WILLIAMSON, Clerk." Mr. Chairman, I would like to have Mr. Francis X. McLaughlin, attorney on the staff of the subcommittee, take the stand at this time and state the facts concerning the issuance of the subpenas in this matter and some of the facts attendant upon compliance or noncompliance with the subpenas duces tecum. Mr. WILLIAMS. Mr. Lishman, do you feel it would be proper at this time to place into the record a copy of the subpena? Mr. LISHMAN. I believe that may be supplied for the record if the chairman so desires. Mr. WILLIAMS. If there is no objection, a copy of the subpena will be provided for the record at this point. (The document referred to follows:) BY AUTHORITY OF THE HOUSE OF REPRESENTATIVES OF THE CONGRESS OF THE UNITED STATES OF AMERICA To: Francis X. McLaughlin, Esq., Attorney for Special Subcommittee on Legis lative Oversight You are hereby commanded to summon Alfred Johnson, vice president (personal appearance not required), Pilgrim National Bank of Boston, Boston, Mass., to be and appear before the Special Subcommittee on Legislative Oversight (vested under authority of H. Res. 99, 85th Cong.) of the Interstate and Foreign Commerce Committee of the House of Representatives of the United States, of which committee and subcommittee Hon. Oren Harris is chairman, and to bring with him (1) all records, books, papers, correspondence, and other writings pertaining to any and all accounts in the name of Bernard Goldfine, 72 Beacon Street, Chestnut Hill, Mass., individually or otherwise, and/or to any and all accounts in which he has or had any right, title, or interest during the period January 1, 1950, to date; (2) all records, books, papers, correspondence, and other writings pertaining to any and all accounts in the name of each of the following firms, corporations or other entities: Georges River Woolen Co., Inc., Goldfine Investment Trust, Inc., Labandale Mills, Inc., Lebanon Woolen Mills Corp., George Mabbitt & Sons Co., Northfield Mills, Inc., Strathmore Commodities Co., Strathmore Realty Co., Strathmore Silk, Strathmore Woolen Co., Wilton Woolen Co., Bernard Mills, and/or to any and all accounts in which each or any of them had or has any right, title or interest during the period January 1, 1950, to date, in their chamber in the city of Washington, on May 14, 1958, at the hour of 10 a.m., room 1334, New House Office Building, Washington, D.C., then and there to testify touching matters of inquiry committed to said subcommittee; and he is not to depart without leave of said subcommittee. Herein fail not, and make return of this summons. Witness my hand and the seal of the House of Representatives of the United States, at the city of Washington, this 7th day of May 1958. Attest: [SEAL] OREN HARRIS, Chairman, Special Subcommittee on Legislative Oversight. [Endorsement] Subpena for Pilgrim National Bank. RALPH R. ROBERTS, Clerk. Served in hand to Alfred Johnson, vice president, at the bank at 11:25 a.m. on May 8, 1958, by F. X. McLaughlin. Mr. WILLIAMS. Do you solemnly swear that the testimony you are about to give this committee will be the truth, the whole truth, and nothing but the truth, so help you God? TESTIMONY OF FRANCIS X. MCLAUGHLIN, ATTORNEY, SUBCOMMITTEE ON LEGISLATIVE OVERSIGHT Mr. MCLAUGHLIN. I do. Mr. WILLIAMS. Mr. Lishman. Mr. LISHMAN. Mr. McLaughlin, will you please identify yourself for the record. Mr. MCLAUGHLIN. My name is Francis X. McLaughlin. I am an attorney employed by the House Subcommittee on Legislative Oversight. Mr. LISHMAN. Did you serve a subpena on the Pilgrim National Bank of Boston? Mr. MCLAUGHLIN. I did, sir. Mr. LISHMAN. On what date? Mr. MCLAUGHLIN. On Thursday, May 8, 1958, I personally served a subpena on Mr. Alfred Johnson, vice president of the then Pilgrim Trust Co. Mr. LISHMAN. On what date was that subpena returnable? Mr. MCLAUGHLIN. That was returnable on the following Wednesday, which would be May 14, 1958. Mr. LISHMAN. And what did that subpena call for, in substance? Mr. MCLAUGHLIN. In substance, it called for all books, records, correspondence, and any other writings pertaining to accounts at the Pilgrim Bank in the name of Bernard Goldfine, or any one of the com panies which he controlled, or any accounts in which he had an interest in whole or in part. Mr. LISHMAN. Were the companies specified in the subpena concerning whose accounts the subcommittee desired to have the records? Mr. MCLAUGHLIN. Yes, sir. Mr. LISHMAN. Do you know whether or not that subpena has met with full compliance? Mr. MCLAUGHLIN. No, sir; they have not. Mr. LISHMAN. Will you please state the facts respecting the compliance or noncompliance with this subpena? Mr. MCLAUGHLIN. On Thursday, May 8, the day that I served this subpena, I was advised by officials at the bank that they were then in the process of merging with the Merchants National Bank of Boston. At that particular time there were a number of auditors and examiners on the premises and it was a very busy moment for them. They suggested, in response to our questions as to whether or not we would be permitted to examine the records on the premises of the bank, that we come back on Monday inasmuch as by that time the merger would pretty much have been completed, at least as far as some people being active in the records of the bank was concerned. Mr. WILLIAMS. Mr. Lishman, may I interrupt at that point. I think perhaps it would be well to put copies of all three subpenas in the record at this point to keep the record clear inasmuch as the witness is discussing compliance with all of the subpenas. Mr. MCLAUGHLIN. There is only one subpena in this instance, sir. Mr. WILLIAMS. Are you discussing now the subpena to the Boston Herald-Traveler? Mr. MCLAUGHLIN. No, sir. Mr. LISHMAN. This is for the Pilgrim Bank. Mr. WILLIAMS. This subpena has not been put in the record? Mr.LISHMAN. Yes. This is the subpena for the Pilgrim Bank which has been previously inserted in the record at page 3305. Mr. MCLAUGHLIN. On the particular day on which the subpena was served, Thursday, and, having been advised of the present circumstances at the bank, we agreed that we would come back on Monday. However, we were also told that there was a list of outstanding Treasury checks amounting to several hundred thousand dollars which Mr. Goldfine had outstanding, some dating back to 1941, and that that list was available and that the records would be available for inspection that afternoon inasmuch as it would not interfere with the merging of the bank. Incidentally, this agreement was reached after the vice president of the bank, Mr. Alfred Johnson, had consulted with the then counsel to the bank, Mr. Francis T. Leahy, who advised that there would be nothing wrong with the examination of the records on the premises inasmuch as this would be convenient to the bank and it was the practice followed with respect to similar subpenas served by different agencies of the Government, courts, et cetera. Mr. LISHMAN. May I interrupt? Mr. MCLAUGHLIN. Yes, sir. Mr. LISHMAN. Is it a fact that shortly after the service of the subpena the bank not only indicated its complete willingness to cooperate in complying with the subpena, but that it also gave you assurances that representatives of the subcommittee staff, in order not to disrupt the daily business of the bank, might have the opportunity of checking through the records in the bank in order to verify certain information which is pertinent to our inquiry? Mr. MCLAUGHLIN. That is correct, sir. That was stated to Mr. Ross, Mr. O'Hara, and myself. Mr. LISHMAN. You may continue. Mr. MCLAUGHLIN. Having agreed not to return on Friday, but to wait until Monday, Mr. O'Hara and myself returned to Washington Friday evening. Mr. Ross stayed over with the expectation that, as of Monday, he would be able to examine the records on the premises of the bank. Mr.LISHMAN. Will you please identify Mr. Ross? Mr. MCLAUGHLIN. Mr. Stuart Ross is financial consultant to the subcommittee. Mr. WILLIAMS. This subcommittee? Mr. MCLAUGHLIN. Yes, sir. I was later advised by Mr. Ross that he was told on Monday that he could not examine the records. Mr. LISHMAN. On the premises? Mr. MCLAUGHLIN. On the premises. And, in compliance with the subpena on Wednesday, May 14, it was my understanding-I was not present that Mr. Johnson and counsel of the bank other than Mr. Leahy went to Washington in compliance with the subpena. Mr. LISHMAN. Mr. Chairman, at this point I should like to have incorporated in the record, as though read in full, a letter dated May 13, 1958, addressed to the subcommittee by the Pilgrim National Bank of Boston over the signature of Alfred Johnson, its vice president, which bears upon the manner in which the bank proposed to comply with the subcommittee's subpena. Mr. WILLIAMS. Do the members have a copy of that letter? Mr. WILLIAMS. If there is no objection, the letter will be so included. (The letter referred to follows:) PILGRIM NATIONAL BANK OF BOSTON, To the SPECIAL SUBCOMMITTEE ON LEGISLATIVE OVERSIGHT, GENTLEMEN: This is with reference to the subpena dated May 7, 1958, served on Alfred Johnson, vice president of the Pilgrim National Bank of Boston, commanding his appearance before you with "all records * * *" etc., in the name of Bernard Goldfine, and "all records ***" etc., in the name of 12 companies listed in the subpena. Please be informed that Alfred Johnson will appear before you at the time and place commanded in the subpena, but in this first appearance will bring with him only the bank's records of treasurer's checks and certified checks. This first appearance will be the commencement of compliance with the command of the subpena. It is our purpose and intention to comply with the full scope of your commands, and we shall do so, hereby recognizing and acknowledging the continuing nature of the subpena until its commands have been fully complied with. Upon the completion of this first appearance on Wednesday, May 14, 1958, we respectfully request that you permit Mr. Johnson to take the records back with him. If you will kindly grant this request we shall promptly prepare, from these records, a full, true, complete, and correct transcript of all the en |