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Tax-Exempt Foundations TAX-EXEMPT FOUNDATIONS WEDNESDAY, MAY 26, 1954 HOUSE OF REPRESENTATIVES, SPECIAL COMMITTEE To INVESTIGATE TAX-EXEMPT FOUNDATIONS, Washington, D . C. The special committee met at 10 : 15 a. m., pursuant to recess, in room 304, House Office Building, Hon . Carroll Reece (chairman of the special committee) presiding. Present : Representatives Reece (presiding), Goodwin, Hays, and Pfost. Also present : Rene A. Wormser, general counsel ; Arnold T. Koch, associate counsel ; Norman Dodd, research director ; Kathryn Casey, legal analyst. The CHAIRMAN. The committee will come to order . You may proceed, Mr. Sargent. Mr. HAYS. Mr. Chairman, I was asking Mr. Sargent informally be- fore the hearing started if he can find in his notes-I have not been able to find it, I just got this transcript handed to me as I was coming over here-I am interested in this book, Only Yesterday, which he mentioned. I would like to find out exactly what he said about it, if we could at this point . TESTIMONY OF AARON M. SARGENT, ATTORNEY, SAN FRANCISCO, CALIF.-Resumed Mr. SARGENT. I can't do that without having the transcript or getting my notes out of the hotel room. I am coming back in any event for cross-examination after this hearing is completed. I will supply you with the exact reference . I might say at this time my only interest in mentioning the book at all was that it was talking about what people on the street currently were talking about at the time . Mr. HAYS. Would you hand me the book, sir? Mr. SARGENT. Yes. It is a newsy book about the state of public dis- cussion at the time, and what the people were doing and acting . That is all ; local color. It is not an authoritative work in the sense of prov- ing revolution. It said that people were trying out all sort of things. That is said in that book . Mr. HAYS. I think you cited this book to support your contention that there was imminent danger of revolution around that period . Mr. SARGENT. No, Sir, I did not . I said it was being talked about at the time. 295 296 TAX-EXEMPT FOUNDATIONS Mr. HAYS . You didn't say that the country was in imminent danger, that there was a serious danger in 1917 and 1918? Mr. SARGENT. I said there was on the basis of the findings of the report of the Lusk committee . The CHAIRMAN. Will you permit an interruption? As I recall the statement, the Lust committee reported there was a revolution . Mr. SARGENT. Yes, they made very extensive findings. They found there was at that time a serious danger for our form of government. I did not in any sense use the Allen book as an authority. I don't think Mr. Allen is an authority on the subject . Mr. HAYS. You see, Mr. Chairman, that is exactly what I am trying to prove . The witness brings in a book and the committee is at a complete disadvantage, because we don't know beforehand what book he is going to cite, and we don't get the transcript until the next day. I think the transcript will show he is saying two entirely different things about it . He brought the book in. He cited the book. I have never heard of the book . I have had a half hour to glance at this book, and I want to read a few paragraphs cut of it . I will read from page 76 The big red scare was slowly, very slowly dying. What killed it? The reali- zation for one thing that there had never been any sufficient cause for such a panic as had convulsed the country. I don't know whether this is an authoritative work or not, but the witness cited it so I thought I would look at it . Then on page 52, he talks about the Boston police riots The Boston police had a grievance. Their pay was based on a minimum of $1,100, out of which uniforms had to be bought, and $1,100 would buy mighty little at 1919 prices. Then on page 56, in talking about the then Attorney General, he says : Mr. Palmer decided to give the American public more of the same and there- upon he carried through a new series of raids which set a new record in Ameri- can history for executive transgression on individual constitutional rights . Then he goes on and is talking about the fanaticism and fervor, and he says on page 58 ; Nor did it quickly subside for the professional superpatriots and assorted spe- cial propagandists disguised as superpatriots had only begun to fight . Innumer- able patriotic societies had sprung up, each with its executive secretary, and executive secretaries must live, and therefore, must conjure up new and ever- greater menaces. You know that has a faintly familiar ring, doesn't it? Innumerable other gentlemen now discovered that they could defeat whatever they wanted to defeat by tarring it conspicuously with the Bolshevist brush . Big Navy men, believers in compulsory military service, drys, anticigarette cam- paigners, antievolution fundamentalists, defenders of the moral order, book censors, Jew-haters, Negro-haters, landlords, manufacturers, utility executives, upholders of every sort of cause, good, bad and indifferent, all wrapped them- selves in Old Glory, and the mantle of the Founding Fathers and allied them- selves with Lenin. Of course, he goes on to point out that they tried to ally their opponents, as is being done today, with something nasty and dirty. He goes on and I am quoting For years a pestilence of speakers and writers continued to afflict the country with tales of sinister and subversive agitators . TAX-EXEMPT FOUNDATIONS 297 He speaks further Elderly ladies in gilt chairs in ornate drawing rooms heard from executive secretaries that the agents of the Government had unearthed new radical con- spiracies too fiendish to be divulged before the proper time . A cloud of suspicion hung in the air and intolerance became an American virtue . This is the author that you brought in . Mr. SARGENT. I brought in a specific statement at a specific time . Mr. HAYS. I am bringing in some specific statements so we will get a well-rounded picture. The CHAIRMAN. May I be permitted to Mr. HAYS. Just a minute. I want to get the whole picture of this man. He made all sorts of statements, and I am not subscribing to any. Mr. SARGENT. I only said that the discussion at the time publicly was about this condition . My authority cited was the Lusk Report of the New York Legislature. That book was not cited as an author- ity. I do not consider it to be authoritative on whether this con- spiracy in fact existed. Mr. Allen did not know. Mr. HAYS. The point I am making, and I think you made it for me, Mr. Sargent, is that you can bring in any book, and you can do it with great regularity, and you can pick out a sentence or paragraph out of it and make it prove whatever you want it to prove. After I read a few paragraphs out of the book, you want to disavow any rela- tionship to it. Mr. SARGENT. No. Mr. HAYS. It is something that you are not going to vouch for at all now after we have looked it over. Mr. SARGENT. No ; I vouch for the part of that book which states that the intellectuals were doing all sorts of wild things and discussing it publicly, and that was the air surrounding the period. That is all I wanted to say . Mr. HAYS. You are going to vouch for part of the book and leave the rest out? Mr. SARGENT. No. I don't have to buy the whole book because he tells the truth on one thing. You think it is a pretty good book? Mr. HAYS. No ; I don't. I think you brought out an authority that may have been a little wild in some of the statements he makes . To further prove that, let me read his subtitles for paragraph 6 Fair and Warmer Washington . The Helpfulness of Warren G. Harding, Wash- ington Conference. Harding's Death. The Truth Begins To Come Out. Teapot Dome and Elk Hill . Who Loaned Fall the Money? Six or Eight Cows . The Silence of Colonel Stewart and Others . The Testimony of Mr . Hays- and will the record please show that is Will Hays- The Reticence of Mr. Mellon. The Veterans' Bureau Scandals . Dougherty. Who Cares? The Undedicated Tomorrow . That is the kind of book it is . The CHAIRMAN. If Mr. Hays would be condescending enough to permit one interjection, I would like to say that I would not like to associate myself with what has been read, and I would sum it all up as meaning that anybody who is against Fabian socialism, and all it implies, is classified as a superpatriot with white, cloth around him . Mr. HAYS. You know something? You didn't disassociate yourself with this book yesterday when he was reading paragraphs out of it 298 TAX-EXEMPT FOUNDATIONS that seemed to prove what you wanted him to prove . Furthermore, Mr. Chairman, Fabian socialism is not mentioned in this book as far as I can find out. The CHAIRMAN. No ; I was disassociating myself with the interpre- tation of what you put on what you read . Mr. HAYS. Mr. Reece, I put no interpretation whatever . I merely read some paragraphs out of the book because I wanted to acquaint you with the kind of books that your witness is bringing in here and citing.
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