judge. And more broadly, all concerned in such a controversy would know where they stood right away.

I have heard very reputable and responsible lawyers state that in the ordinary congressional investigation situation they thought it was reasonably safe to advise their clients to defy the committee, rather than risk being backed too much into a corner by an embarrassing line of questioning. The opportunities to delay the contempt prosecution which might ultimately follow, and the chances for turning it aside, plus the fact that when the client came to trial the committee itself might be out of existence and the issues would be cold and dead and long forgotten, all add up to a very good gambling chance that the defiant and disrespectful witness will come off scot free. This is something we ought to correct; and H. R. 4975 looks to me like an adequate solution.

I'm not over here lobbying for my bill; but I did think it was important enough, as the embodiment of a principle relating to what you are doing, to take this few moments to lay it specifically before you. My staff and I have done a great deal of work along these lines, and we would be most happy to cooperate with you further if we can be of assistance. We would be glad to assist this committee and its staff in any way that we can, in the important work in which you are engaged.

The CHAIRMAN. Congressman Keating, I would like you to submit for our record a copy of the bill, H. R. 4975; and I want to direct our staff to go into it very thoroughly, to see what recommendations you have to make regarding it.

Mr. KEATING. I should be very happy to see that you get adequate copies.

(H. R. 4975, introduced by Mr. Keating, is as follows:)

[H. R. 4975, 83d Cong., 1st sess.]

A BILL To prescribe a method by which the Houses of Congress and their committees may invoke the aid of the courts in compelling the testimony of witnesses

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) either House of Congress, any committee or subcommittee of either House, and any joint committee of the two Houses may, by an affirmative vote of two-thirds or more of its actual membership, invoke the aid of the United States district courts in requiring the attendance and testimony of witnesses and the production of documentary evidence, in furtherance of any inquiry such House, committee, subcommittee, or joint committee is authorized to undertake.

(b) The United States district court for the district within which the inquiry is carried on may, in case of contumacy or refusal to obey a subpena issued to any person by either House of Congress, any committee or subcommittee of either House, or any joint committee of the two Houses, issue an order requir ing such person to appear (and to produce documentary evidence if so ordered) and give evidence relating to the matter in question before such House, committee, subcommittee, or joint committee, as the case may be; and any failure to obey such order of the court may be punished by the court as a contempt thereof.

(c) Attorneys of the Department of Justice shall furnish legal assistance in invoking the aid of the United States district courts under subsection (a) to any House, committee, subcommittee, or joint committee which requests it. The CHAIRMAN. Thank you very much, Congressman Keating. We appreciate your appearing here this morning. Are there any questions by counsel.

Mr. BERKOVITCH. I should like to ask a question.

Congressman, in connection with the last point you were discussing, you stressed the necessity of not making or adopting rules which could be used by a witness or another person in contempt of the committee, or alleged to be in contempt of the committee, as a means of blocking the very remedy which you propose, which is a summary proceeding to cite a witness for contempt. Is that the point which you were making? If so, I should think this committee would have to be very careful, otherwise the very rules of procedure which we might recommend would necessarily be drawn into issue in a contempt proceeding; and therefore, any defect in a proceeding by a committee would enable the contemptuous witness to set it up as a defense, and thereby vitiate the very proceeding that you are recommending.

Mr. KEATING. Yes. My comment was a little broader than that. I had meant it to apply not only to proceedings in court under the procedure outlined in this specific bill, but, generally speaking, not to make your rules so definite or extreme, let us say, as to give a defiant witness something that he can use in court under any circumstances to frustrate the committee. You are, so to speak, walking a tightrope here. You want to draw some rules that will dignify congressional investigations and gain for them greater public support, and which will also be helpful in the protection of everyone. Still, we all know that some of the witnesses who appear before our congressional committees are characters who are not entitled to any very sympathetic consideration as against the interests of the general public; and we do not want to give them a weapon with which they can abuse the committees, in the guise of protecting themselves from abuse.

Mr. BERKOVITCH. I might make this comment. You realize, Congressman, that it is sometimes difficult to predict what the courts will do

Mr. KEATING. No truer words were ever spoken than those.

Mr. BERKOVITCH. Thank you, Congressman. And it may be that, even were the Senate to couch its proposed rules of procedure along certain lines, presumably in a way that would not bind the committees, the courts might nevertheless take the view that, since, on the record, such rules set up a standard, they would nevertheless have to look into the question of whether the rules had been followed in the particular proceeding; and, if not, the contempt proceeding that the Congress got into would fall, if the court were so minded.

Mr. KEATING. That is true.

Mr. BERKOVITCH. And I think there is a danger. You agree that there is, and I think the staff would have to study that question very carefully.

Mr. KEATING. I agree with you completely. I feel sure that when the Senate adopted this quorum rule, they were not envisioning at that time someone's being tried for perjury later in a court, and saying this was not a competent tribunal, because there was not a quorum present, and he tells lies and goes free just because there were not enough people there. You have a great problem. I recognize the complexity of the problem, here. I agree with you completely.

Judge MORRIS. Congressman, may I ask you a question? In connection with the work of your subcommittee, of which you were chairman, of the House Judiciary Committee, you looked into the whole matter of the subversives within the United Nations generally, did you not?

Mr. KEATING. That was one of the problems.

Judge MORRIS. I wonder whether you could supply for us, within, let us say, the course of the next few weeks, the details of what you consider to be the accomplishments of that particular subcommittee.

Mr. KEATING. Would it suffice to give you a copy of our report? Judge MORRIS. Well, I think we have that, Congressman; but, in addition, very often a person who serves as chairman of the committee views the accomplishments of the committee in a manner which does not appear from the report. I mean, the written report may have certain beneficial effects following its issuance.

Mr. KEATING. If I understand what you have in mind, my feeling is, of course and I take a narrow view-my feeling is that the only justification for a congressional investigation is that it has relation to the lawmaking function, or that it has to do with the administration of existing laws. And, of course, this investigation had largely to do with the administration of existing laws.

However, in our report, at the very end, we made some 11 specific recommendations, either for changes in the law or for changes in the administration. I might say that very many of those recommendations have been put into effect by Attorney General Brownell; but the accomplishments of the investigation would be reflected largely by the extent to which those recommendations were put into effect, or are likely to be put into effect.

Judge MORRIS. Congressman, that is what we want. In addition, Ambassador Lodge has taken the recommendations of your report and has applied the recommendations as far as security investigations pending in the United Nations are concerned.

Mr. KEATING. That is true. I may say that in the 83d Congress, eight different situations were investigated by the committee, and in that case we found that the Justice Department had been without fault, but that the State Department had interfered with the grand jury proceeding in New York City; and, insofar as the Justice Department has had a hand in it, it was only at the insistence of the Department of State, and as a result of that. But I think, also as a result of work done by your Senate committees, and perhaps, as I recall it, the Senate committee of which our present chairman was chairman-or is chairman-Ambassador Lodge has taken definite steps which seem to have been somewhat frustrated by action of the United Nations, itself; but that was only 1 of a number of investigations, and that is 1 of the 2 cases out of the 8, in which we found the Department of Justice, itself, to be without fault. So I thought your question was a broader one than in that specific case. That was a definite accomplishment, as a result of bringing it out into the open. Now, that might be. There are some, as you know, who take the position that a congressional investigation is desirable, in fact, just to throw light on a situation. No less an authority than the late Woodrow Wilson once said that he thought it very important to throw light on the situation, through what he called the informing function of these investigations.

Now, I take a narrower view of the proper scope of congressional investigation; but I will try to get up something such as you suggest. Judge MORRIS. Thank you.

The CHAIRMAN. I should like to have the statement by Woodrow Wilson, which was referred to, inserted in the record.

Mr. BERKOVITCH. I will furnish it for the record.

(The statement referred to, which is from Woodrow Wilson's Congressional Government, is as follows:)

It is the proper duty of a representative body to look diligently into every affair of government and to talk much about what it sees. It is meant to be the eyes and the voice, and to embody the wisdom and will of its constituents. Unless Congress have and use every means of acquainting itself with the acts and the disposition of the administrative agents of the Government, the country must be helpless to learn how it is being served; and unless Congress both scrutinize these things and sift them by every form of discussion, the country must remain in embarrassing, crippling ignorance of the very affairs which it is most important that it should understand and direct. The informing function of Congress should be preferred even to its legislative function.

Judge MORRIS. The particular problem with which this committee has to do is that of analyzing the procedure and the rules to be followed by congressional committees in the conduct of hearings and in the making of these studies. A thing that is examined in the abstract would be a little unreal; and that is why, as each chairman comes before this committee, we ask him, almost without exception, for the accomplishments of his committee; and if he knows of any exceptions that fall within that particular investigative work; because you cannot disassociate that from the study of the facts. It was for that reason, merely, that I asked you about the matter. Mr. Berkovitch will be in touch with your office within the next few weeks.

Mr. KEATING. Fine; I will be very happy to see him.

The CHAIRMAN. Thank you very much, Congressman.
Mr. KEATING. Thank you.

Judge MORRIS. The next witness is Mr. Herz.

The CHAIRMAN. Mr. Herz, will you come forward, please, and be

sworn.

Do you swear that the testimony given in this hearing will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. HERZ. I do.

TESTIMONY OF THEODORE HERZ, FORMER STAFF DIRECTOR, RE-
CONSTRUCTION FINANCE CORPORATION SUBCOMMITTEE, SEN-
ATE COMMITTEE ON BANKING AND CURRENCY

The CHAIRMAN. Will you state your full name for the record?
Mr. HERZ. My name is Theodore Herz.

The CHAIRMAN. Where do you reside, Mr. Herz?

Mr. HERZ. I am a resident of Silver Spring, Md.

The CHAIRMAN. Have you submitted a prepared statement to this committee, 24 hours before your appearance here this morning? Mr. HERZ. No, sir; I have no prepared statement.

The CHAIRMAN. You have no prepared statement? All right. Mr. Berkovitch, you may qualify Mr. Herz, as to why he is here. Mr. BERKOVITCH. May I ask Mr. Herz to state for the record what his connection has been with any Senate investigating committees? Will you tell the chairman in what capacity you served, and on what committee?

Mr. HERZ. I was staff director for the Reconstruction Finance Corporation Subcommittee of the Senate Committee on Banking and Currency, in connection with its special study of the lending policies of the Reconstruction Finance Corporation, which took place between February 1950 and the late summer or fall of 1951. The chairman

of that subcommittee was Senator Fulbright of Arkansas, and the subcommittee was known generally as the Fulbright subcommittee, or the Fulbright committee.

Judge MORRIS. Mr. Berkovitch, has Senator Fulbright been invited to be here this morning?

Mr. BERKOVITCH. That is correct. He was unable to attend. However, he gave us a copy of a letter he wrote, in that connection, and a reprint of an article, and he has asked that they be incorporated in the record.

I will ask that the letter and reprint may be submitted, to appear at the conclusion of today's record.

The CHAIRMAN. The letter and reprint may be submitted, and will be placed in the record, and become a part of the record, as requested. You may proceed in your own manner, Mr. Herz.

Mr. HERZ. I had a very brief discussion with the committee's representative, Mr. Berkovitch, a week or so ago, and he informed me that this committee is concerned with a study of rules and procedures to govern Senate investigations, Senate inquiries; and he thought, by reason of the connection that I had had with the Fulbright subcommittee, my experience might be valuable in throwing some light on the matters which are now under consideration. Mr. Berkovitch suggested that a brief summary of the objectives of our committee, and the manner in which we proceeded toward their accomplishment, might be helpful.

The CHAIRMAN. May I interrupt to ask whether you are an accountant by profession?

Mr. HERZ. Yes, sir; I am a professional accountant. I am a partner in the firm of Price, Waterhouse & Co. I am not an attorney.

In the study-we referred to this investigation as a study, not as an investigation; I believe the enabling resolution referred to it as a study, and not as an investigation. The study of RFC was aimed at ascertaining whether or not the policies which governed the operations of the agency in the lending of money were such as to reflect correctly the attempt of the Congress in enabling the corporation to lend money, and to determine whether or not there were circumstances surrounding the operations of the RFC which called for modifications in the existing legislation, or modifications in the expression of the congressional intent concerning RFC.

The early part of the study of RFC, the part which occurred between the beginning of the study in February of 1950 and a date which perhaps was as late as August of 1950, might be described as a technical sort of study. It consisted of accounting and financial analyses of individual loans, in an effort to ascertain what major policy matters were reflected in the individual loans.

The witnesses before the subcommittee during that period were, for the most part, officials of the RFC.

The CHAIRMAN. Were those hearing held in executive, closed sessions, or were they open sessions?

Mr. HERZ. For the most part, those were open public hearings. The CHAIRMAN. Did you have executive or private sessions prior to the open sessions?

Mr. HERZ. We did not, with respect to those loans. subcommittee did follow this practice, Mr. Chairman.

However, the When we had

a particular loan under consideration, the staff of the subcommittee