Well, now, that power is without limitation.

The CHAIRMAN. Well, what do you think about the power of the Interstate Commerce Commission to lay down a line of bookkeeping that the railroads have to follow? That has been in effect for years and the railroads would not have it repealed, if you asked them today. The interstate Commerce Commission has that power today.

Mr. RAND. Well, I believe that the railroads, owing to the relatively few in number and to the similarity of their operation, can very well be required to submit uniform reports; but it is going to be very, very difficult to require that of other corporations.

The CHAIRMAN. Do you not think that we should require some kind or sort of reports from every kind of organization?

Mr. RAND. Not the same kind of reports as are required of the railroads.

The CHAIRMAN. I am talking of corporations outside of the utility field, public service corporations, and corporations of that sort. I am talking about the provisions of this bill.

Mr. RAND. We have reports called for on income taxes today, to the Treasury, of balance sheets and operating statements, that appear to be adequate so far as showing the operations of the concerns are concerned.

And my general feeling that I wanted to express on this bill was that, right now, instead of business being hampered, business needs a helping hand. Business is the instrumentality through which we are going to employ, and we must reemploy millions of unemployed men, and if the management is hampered by the necessity of making out voluminous industrial reports, it is going to interfere with their effective development of enterprises and reemployment of people. It is not any one particular thing

The CHAIRMAN. The attorney for the Chicago and Boston stock exchanges was before us yesterday and he said that if securities were going to be bought and sold freely and in a healthy manner on exchanges of this country, after the experience of the last few years, that there will have to be some kind of legislation passed to reestablish the confidence of the American people. What do you have to say about that?

Mr. RAND. I heartily agree with that, 100 percent.

The CHAIRMAN. What kind of regulation do you think that should be?

Mr. RAND. I think that regulation should be under a regulatory authority or board which is set up with that end in view, and the reason that it warrants a special selected board is because it involves the largest single element in the monetary and financial fabric of this country, namely, 100 billion dollars of securities.

The CHAIRMAN. In order to try to meet that, we have provided in this new bill that there shall be a section in the Federal Trade Commission known as the "stock exchange section", and after the passage of this act, that the President should appoint two additional commissioners, raising the Commission from 5 to 7. Does it make any difference whether that is a division in the Federal Trade Commission, or an independent body, or an independent commission?

Mr. RAND. Not if the personnel is selected to handle the financing of that 100-billion-dollar element in our system.

The CHAIRMAN. Well, does it make any difference what it is called?

Mr. RAND. No. A rose by any other name would smell as sweet. The CHAIRMAN. It does not make any difference, then, whether it is a commission, or an authority, or a division, or what it is called? Mr. RAND. No.

Legislation which may

Mr. MAPES. May I ask a question?

The CHAIRMAN. Yes.

Mr. MAPES. One of the things in this bill that has appealed to me is the provision relating to corporate reports.

Do you believe that corporations whose securities are sold on the stock exchanges should be required to make public reports?

Mr. RAND. Yes, sir; ample and full reports as to operations, and assets, and liabilities.

Mr. MAPES. Section 12 provides for certain reports, and the giving of certain information. If the provisions there are subject to criticism, it would be helpful to me if you would give any constructive criticism of them which you may have in mind.

Mr. RAND. As to the nature of reports that would be required?
Mr. MAPES. Yes.

Mr. RAND. Well, by all means, quarterly audited statements of operations should be required, rather than annual statements. Too much can happen within the year to the operation of a business. I should say quarterly statements as to sales volume-not necessarily classified and preferably not classified, because it gives confidential information to competitors; but total sales volume.

Mr. MAPES. Would you require quarterly and monthly reports to be certified to by independent public accountants, for example? Mr. RAND. Not necessarily.

Mr. MAPES. Not necessarily?

Mr. RAND. Not necessarily. I think that an annual statement is sufficient, and the reasons for this is, now, you get into a practice here, if you ask for reports audited by auditors, more frequently than once a year, you require the taking of a physical inventory, because that, is the only basis, on the basis of a physical inventory, that an auditor will put his name to a report.

Mr. MAPES. Writing legislation is a pretty practical matter, and we have to ask these practical questions if we get anywhere.

Would you, for example, object to paragraph (2), of section 12 where it says:

Such annual, quarterly, monthly, and/or other reports, the annual reports to be certified by an independent public accountant or otherwise, as the commission may prescribe.

Mr. RAND. No, I should not object to that, but when you give the commission latitude to call for any reports that they may see fit, as you do, in other sections, you put a tremendous potential burden upon business men, and you frighten all business men as to what is going to be required of them, how much expense is going to be put upon them, and how much time is going to be consumed.

Mr. MAPES. Can you conceive of a situation that might require some special treatment for the protection of the public, which would make it desirable for the commission to have power to ask for a special report from a particular corporation that would not apply ordinarily?

Mr. RAND. Well, the stock exchanges, I believe, now call for those reports if additional stock is to be sold, stating what it is and what it is going to be used for, and special information, before the additional stock will be listed.

Mr. MAPES. You do think the commission should have that power? Mr. RAND. I think there is no abuse prevalent at the present time. Mr. MAPES. That does not quite answer the question.

Do you think the regulatory governmental commission should have that power?

Mr. RAND. I will answer you broadly by saying the less interference with business the better off business will be.

Mr. MAPES. But when we get to considering this bill in executive session, we have to vote concretely, not broadly but concretely, whether that provision stays in this act or not.

What would be your recommendation?

Mr. RAND. I would have to read the provision. On what page of the bill is it?

Mr. MAPES. That is a provision that I thought you were criticizing in your manuscript. It is paragraph (2) (c), of section 12, at the top of page 37.

Mr. RAND. Yes, I would strike that out.

Mr. MAPES. You would strike it out?

Mr. RAND. Yes.

The CHAIRMAN. Why?

Mr. RAND. Because I think that adequate information is obtained by the reports of assets and liabilities, and operating statements of corporations, and by the other provisions of the bill.

Mr. MONAGHAN. Mr. Chairman, may I ask a question?

The CHAIRMAN. Mr. Monaghan.

Mr. MONAGHAN. What is the objection to the furnishing of such information? Why should you object to its being in the bill, Mr. Rand?

Mr. RAND. Because of the fact

Mr. MONAGHAN. Because it is available in other places?

Mr. RAND. No, not because of that; because the information would be supplied, in fact, to the Federal Trade Commission if it asked for it. My belief is that any reasonable information would be supplied, but back in the background, the conversation which took place between one of the leading citizens of Gary, Ind., and a group of men who have been instrumental in formulating some of the legislation in Washington, there seemed to be a desire to have in a bill, or the bills that have been passed, an opportunity to "crack down" on business, which is very undesirable.

Mr. BULWINKLE. Now, just a minute. Let me ask you a question. Who was that group of men that is formulating legislation in Washington, or in Gary, Ind., having the conference?

Mr. RAND. I would like to present this. I will read it, if you desire. This is a letter that I received from a man, and I called him on the telephone and asked whether I might have permission to use it. is a statement which he wrote that bears on that very subject. Mr. BULWINKLE. Who wrote it?

Mr. RAND. Dr. Wirt.

Mr. BULWINKLE. Who is Dr. Wirt?

This

Mr. RAND. Dr. Wirt is one of the leading citizens of Gary and the father of the public-school system of Gary, which is internationally known.

Mr. BULWINKLE. Now, who was the group of men Dr. Wirt was talking to, who was it that he was talking to, that was formulating legislation?

Mr. RAND. They were attempting to.

Mr. BULWINKLE. Who were they? I am trying to find that out. Mr. RAND (continuing). Prepare legislation, and preparing a program in advance.

Mr. BULWINKLE. Well, who were they?

Mr. RAND. May I read you this statement?

Mr. BULWINKLE. Yes; but I want the names first.

Mr. RAND. I will read from a statement, which was prepared by William A. Wirt.

Mr. BULWINKLE. We have got his name. I want the names of the men he was talking to.

Mr. RAND. May I read his statement?

Mr. BULWINKLE. No, sir; I want the names first of the group of

men.

Mr. RAND. Yes.

Mr. BULWINKLE. That he was talking to, from Washington.
Mr. RAND. I will see if he gives the names in here.

Mr. BULWINKLE. Well now, you do not mean to tell me that you are coming before a committee of Congress, testifying in behalf of or against a bill, and that the information you are giving to this committee is that somebody in Indiana said that there was a group of men from Washington out there formulating plans to "crack down" on business, and you cannot give the names of the men?

Mr. RAND. I gave the name of the man who supplied the information.

Mr. BULWINKLE. Well, I am not asking for that.

Mr. RAND. And I suggest that you call him, and ask him for the names, because I find here that he refers to them as the "brain trusters."

Mr. BULWINKLE. Well now, who are those "brain trusters" that were in Indiana?

Mr. RAND. I would like very much to read you from the statement. Mr. BULWINKLE. I do not care to hear about his statement. I want the names of those that he was talking to or about.

Mr. RAND. Dr. Wirt could give you them.

Mr. BULWINKLE. I am not hearing Dr. Wirt. I am just in the same position the chairman is about this proposition. You come before this committee as a witness to try to enlighten the committee on the provisions of this bill, and you enter into a tirade as to what somebody said to someone else in Gary, Ind., that they are going to "crack down" on business.

Mr. RAND. These men were not in Indiana. He said last summerI asked him if the individuals, this group, what their concrete plan was to bring on something that would overthrow the American social order

Mr. BULWINKLE. First, I want to hear who they are. I do not want to hear you, unless Dr. Wirt, who wrote to you an important message like that, could give you the names of these conspirators.

Mr. RAND. "Brain trusters."

Mr. BULWINKLE. Conspirators.
Now, go ahead and read it, then.
Mr. Rand (reading).

Last summer I asked some of the individuals in this group what their concrete plan was for bringing on the proposed overthrow of the established American social order.

I was told that they believed that by thwarting our then evident recovery they would be able to prolong the country's destitution until they had demonstrated to the American people that the Government must operate industry and commerce. I was told that the Government must operate industry and commerce. I was told that, of course, commercial banks could not make longtime capital loans and that they would be able to destroy, by propaganda, the other institutions that had been making our capital loans. Then we can push Uncle Sam into the position where he must make these capital loans. And of course when Uncle Sam becomes our financier he must also follow his money with control and management.

I am quoting from his statement.

The CHAIRMAN. Now, you have laid this on the so-called "brain trusters."

Are you here before this committee to make that direct charge, or by inference, either, that President Roosevelt has called around him and is seeking the advice of men who intend to overthrow this Government? You have called attention to this man's statement, and you put it in your statement as a part of your argument. Do you mean, even by implication, to leave that kind of an inference? Mr. RAND. I would like to have you listen to the statement, Mr. Chairman, and call Dr. Wirt.

The CHAIRMAN. We are not going to call Dr. Wirt.

Mr. RAND (interposing). This is what he says.

The CHAIRMAN (continuing). We have not called anybody.

Mr. RAND. This is a statement which bears upon the intention of certain individuals, and I am not saying

The CHAIRMAN. That is not material. I think that I can state for the full committee that we do not care to hear it.

Mr. MALONEY of Connecticut. Mr. Chairman may I ask a question? The CHAIRMAN. Mr. Maloney.

Mr. MALONEY of Connecticut. Did you tell us that you were representing the committee for the nation, or are you speaking on your own responsibility?

Mr. RAND. I am down here representing the committee for the Nation, who have engaged the National Conference Board to make a study of this thing, and we have not had enough days in which to complete the analysis and make our final recommendations on the bill.

I have, however, the recommendations which are in generalities, which we subscribe to and which I would like to lay before the committee.

Mr. BULWINKLE. Let me get you. Do you approve any regulation of the stock exchanges?

Mr. RAND. Yes, sir.

Mr. BULWINKLE. How far would you go?

Mr. RAND. That is a broad question.

Mr. BULWINKLE. Well, what have you in your mind?

Mr. RAND. The legislation which I would like to see enacted

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