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Full text of "Interlocking subversion in government departments"

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83d Congress]. COMMITTEE PRINT 

1st Session J 



INTERLOCKING SUBVERSION IN 
GOVERNMENT DEPARTMENTS 



REPORT 

OF THE 

SUBCOMMITTEE TO INVESTIGATE THE 

ADMINISTRATION OF THE INTERNAL SECURITY 

ACT AND OTHER INTERNAL SECURITY LAWS 

TO THE 

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

EIGHTY-THIRD CONGRESS 
FIRST SESSION 

ON 

INTERLOCKING SUBVERSION IN GOVERNMENT 
DEPARTMENTS 




JULY 30, 1953 
Printed for the use of the Committee on the Judiciary 



UNITED STATES 
GOVERNMENT PRINTING OFFICE 
36548° WASHINGTON : 1953 





COMMITTEE ON THE JUDICIARY 



WILLIAM LANGER, 

ALEXANDER WILEY, Wisconsin 

WILLIAM E. JENNER, Indiana 

ARTHUR V. WATKINS, Utah 

ROBERT C. HENDRICKSON, New Jersey 

EVERETT M. DIRKSEN, Illinois 

HERMAN WELKER, Idaho 

JOHN MARSHALL BUTLER, Maryland 



North Dakota, Chairman 
PAT McCARRAN, Nevada 
HARLEY M. KILGORE, West Virginia 
JAMES O. EASTLAND, Mississippi 
ESTES KEFAUVER, Tennessee 
OLIN D. JOHNSTON, South Carolina 
THOMAS C. HENNINGS, JR., Missouri 
JOHN L. McCLELLAN, Arkansas 



Subcommittee To Investigate the Administration of the Internal Security 
Act and Oiher Internal Security Laws 

WILLIAM E. JENNER, Indiana, Chairman 
ARTHUR V. WATKINS, Utah PAT McCARRAN, Nevada _ _ 

ROBERT C HENDRICKSON, New Jersey JAMES O. EASTLAND, Mississippi 
HERMAN WELKER, Idaho OLIN D. JOHNSTON, South Carolina 

JOHN MARSHALL BUTLER, Maryland * 

Robert Morris, Chief Counsel 
Benjamin Mandel, Director of Besearch 
♦Senator Willis Smith, North Carolina, participated actively in the work of the subcommittee until 
bis untimely death on June 23, 1953. 

n 



CONTENTS 



Page 

Introduction 1 

The past is prologue 1 

Two Soviet rings not exposed 3 

The extent of the penetration 5 

The first penetration 5 

Some case histories 6 

Harold Glasser 6 

Virginius Frank Coe 7 

Alger Hiss 3 

David Weintraub 10 

The story of Irving Kaplan 12 

How many secrets? 15 

The Amerasia case . 15 

Thefts of secrets by Soviet agents IG 

The Canadian Royal Commission 16 

The Bentley Ring's harvest 17 

The Pumpkin papers and after 19 

The design 20 

"Once we got one in, he got others" 21 

The witnesses 22 

The same witnesses before the FBI 23 

False swearing 23 

Warnings ignored 24 

Net in the State Department 26 

Net in the Treasury 27 

Net over Capitol Hill 32 

Net in national defense 35 

Net over labor 40 

Net over agriculture 44 

The hidden Communists 45 

The John P. Davies case 46 

Conclusions 48 

Recommendations 49 

Note. — All page references and exhibit numbers are to Hearings on Interlock- 
ing Subversion in Government Departments vmless otherwise indicated. 

I PR — Hearings on the Institute of Pacific Relations 

U. N. — Hearings on Activities of United States Citizens Employed by the 
United Nations. 

HUAC — House Un-American Activities Committee. 

Ill 



INTERLOCKING SUBVERSION IN GOVERNMENT 

DEPARTMENTS 



INTRODUCTION 

On April 10, 1953, the Senate Internal Security Subcommittee of the 
Senate Judiciary Committee commenced a series of hearings on inter- 
locking subversion in Government. 

Chairman William E. Jenner (Republican, Indiana) opened the 
hearings with this statement: 

The Senate Internal Security Subcommittee, under the authority conferred on 
it by the United States Senate to investigate "the extent, nature, and effects of 
subversive activities in tlie United States," during the past 3 years has been 
uncovering evidence of extensive Communist penetration in Government. 

The subcommittee has been impressed by the extent to which the Communists 
it has exposed were able to move, often with great facility, from one Government 
agency to another, spinning their web of intrigue and drawing with them in posi- 
tions of power and influence their confederates and auxiliaries. The purpose of 
this series of hearings will be to determine the existence of and to expose the 
design by Avhich Communist agents were able to infiltrate the executive and 
legislative branches of government. 

The subcommittee expects that these hearings will aid it in recommending 
legislation to prevent further infiltration, and to discover methods and indi- 
viduals that the Communist International organization may still be employing 
today. 

The subcommittee undertakes this investigation primarily with the view to 
preventing further infiltration and not to hold up to the pillory past misdeeds. 
But the past is prologue. The subcommittee hopes that all persons with knowledge 
of this penetration will assist the subcommittee in its purpose (p. 1). 

The subcommittee had several purposes foremost in mind in con- 
ducting these hearings. It noted that literally scores of agents had 
penetrated the United States Government, and in its report on the 
Institute of Pacific Relations showed how some of these were responsi- 
ble for extensive perversion of policy that consequently caused the 
loss of thousands of American lives and injury to the interests of the 
United States. It noted that except in a few cases, all of these agents, 
despite the record of their subversion, had escaped punishment and 
some, in positions of influence, continued to flourish even after their 
exposure. 

THE PAST IS PROLOGUE 

The subcommittee has made public for the first time a section of a 
secret memorandum on espionage in our Government, one paragraph 
of which had been quoted by Vice President Richard Nixon, then a 
Congressman, in a 1950 speech. He made known at that time that the 
document, dated November 25, 1945, was prepared by an intelligence 
agency of this Government, and was circulated among several key 
Government agencies and made available to the President of the 
United States.^ 



' Six years earlier, another memorandum was prepared by A. A. Berle, Jr., then Assistant Secretary of 
State. He wrote the memorandum when Whittaker Chambers informed him of the makeup of the Com- 
munist American underground. This bore the heading "Underground Espionage Agent" and contained 
27 names (p. 329). Of these, 4 appeared again in the Nixon memorandum. 

1 



2 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

The subcommittee obtained that memorandum. It read in part: 

This case (of Nathan Gregory Silvermaster) firft came to the attention of the 
Bureau on November 8, 1945, when Elizabeth Bentley, an official of United States 
Service and Sliipping, Inc., New York City, came into the New York office of the 
Bureau and stated that for the past 11 years she had been actively engaged in 
Communist activity and Soviet espionage. 

She stated that prior to 1938 she had been an official in various capacities of 
the Communist Party in New York City. In 1938 she began making contacts 
v.ith Jacob Golos, the head of World Tourists, Inc., which organization was being 
used as a cover for the Soviet espionage activity. Golos later organized United 
States Service and Shipping, Inc., for the same purpose in 1941. 

Under Golos' direction and until his death in 1943, Bentley stated that she 
was used as a courier and liaison between individuals engaged in espionage for 
the Soviet and Golos. 

After Golos' death in November 1943, she continued to act as such a courier 
and liaison under the direction of Earl Browder. 

During the latter part of 1944 at the insistence of Soviet representatives in tlie 
United States and with Browder 's consent, the various espionage groups witii 
which she had been maintaining liaison were turned over directly to the Soviet 
agents, only one of whom she has been able to identify. 

This Soviet representative who has used the cover name "Al" has been identified 
as Anatole Gromov, First Secretary of the Soviet Embassy, Washington, D. C, 
who since his arrival in the United States on September 15, 1944, has been 
suspected by this Bureau to be the successor in NKVD activities of Vassili 
Zubilin, former Second Secretary of the Soviet Embassy who was recalled to the 
Soviet Union in July 1944. Zubilin was reported head of all NKVD activity in 
North America. 

Bentley has stated that the espionage agents with whom she had been in contact 
under Golos' and Browder's direction had been working for the NKVD. 

The espionage groups with which Bentley worked were primarily employees 
of the United States Government stationed in Washington, D. C. The head of 
the most important group originally run by Golos was N. Gregory Silvermaster, 
at one time an employee of the Department of Labor and now connected with 
the United States Treasury Department. Another member of this group who 
resides with Silvermaster is William L. Ullman, a major of the United States 
Army Air Forces stationed at the Pentagon Building who has been responsible 
for the obtaining and photographing of classified information regarding United 
States Government war plans and also reports of the Federal Bureau of Investiga- 
tion, copies of which had been furnished to G-2 of the Army at the Pentagon 
Building. Other members of this group included A. George Silverman, a civilian 
employee of the War Department; Harry Dexter White, Assistant Secretary of 
the Treasury in charge of monetary research and foreign funds control; William 
Taylor, also an employee of the Treasury Department; Lauchlin Currie, Admin- 
istrative Assistant to the President; and other lesser figures. 

The head of the next most important group of Soviet espionage agents with 
whom Bentley has maintained liaison was Victor Perlo of the War Production 
Board. MemVjers of this group were introduced to Bentley early in 1944 at the 
apartment of John Abt, general counsel for the Amalgamated Clothing Workers 
of America, CIO, in New York City. The individuals in this group include 
Charles Kramer, an investigator for Senator Kilgore's committee in the United 
States Senate; Henry Magdoflf of the War Production Board; Edward Fitzgerald, 
formerly of the Treasury Department and then with the War Production Board ; 
Donald Wheeler of the Office of Strategic Services; Mary Price, formerly employed 
by Walter Lippmann in Washington, D. C, and now working for the United 
Office and Professional Workers of America, CIO, in New York City; Maj. Duncan 
Lee of William Donovan's law firm in New York City who is also in the Office of 
Strategic Services. There were various other minor Government employees in 
this group including Sol Leshinsky and George Perazich who were employees of 
the United Nations Relief and Rehabilitation Administration. Bentley advised 
that members of this group had told her that Hiss of the State Department had 
taken Harold Glasser of the Treasury Department and two or three others and 
had turned them over to direct control by the Soviet representatives in this 
country. In this regard, attention is directed to 'WTiittaker Chambei's' statements 
regarding Alger Hiss and to the statement by Guzenko regarding an assistant to 
the Secretary of State who was a Soviet agent. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 3 

Less important individuals with whom Bentley had contact and who were 
apparently not in a well-knit organizational group were Robert Talbot Miller III, 
of the Department of State; Maurice Halperin of the Office of Strategic Services; 
Julius J. Joseph of the Office of Strategic Services; Helen Tenney of the Office of 
Strategic Services; Willard Park of the Office of the Coordinator of Inter- American 
Affairs; Michael Greenberg of Foreign Economic Administration; William Rem- 
ington, formerly of the War Production Board and subsequently inducted into 
the Navy; Bernard Redmont, also with the Coordinator of Inter-American Affairs. 

The Bentley woman w-as explicit in that all of the individuals actively engaged 
in espionage for the Soviets named by her were furnishing information from the 
files to which they had access in W^ashington and many of them prior to Golos' 
death paid their Communist Party dues to Golos through her. 

To date over 80 individuals have been named by Miss Bentley as being con- 
nected with the Soviet espionage organization either in Washington or in New 
York. Of this number 37 have been identified as employees of the United States 
Government in Washington, D. C. Bentley has stated that each of these in- 
dividuals probably obtained information from others either casually or through 
actual recruiting and with whom Bentley herself did not come in contact (pp. 
71-73) .2 

The memorandum also said: 

Igor Gouzenko, former code clerk in the office of Col. Nikolai Zabotin, Soviet 
military attach^, Ottawa, Canada, when interviewed by a representative of this 
Bureau and officers of the Royal Canadian Mounted Police, stated that he had 
bcDn informed by Lieutenant Kulakov in the office of the Soviet military attach^ 
that the Soviets had an agent in the United States in May 19-15 who was an assist- 
ant to the then Secretary of State, Edward R. Stettinius (p. 71).* 

TWO SOVIET RINGS NOT EXPOSED 

In addition t^ identifying the more than 80 particular Communist 
agents, 37 of whom were in the United States Government, Elizabeth 
Bentley testified before our subcommittee on May 29, 1952, that to 
her knowledge there were 4 Soviet espionage rings operating within 
om" Government and that only 2 of these have been exposed. 

Miss Bentley. First, on the point as to whether or not there are Communists 
still in the Government, I agree with Mr. Chambers * on that. 

Mr. Morris. In what respect? 

Miss Bentley. I agree with him that quite obviously there still are Communists 
in the Government, partially because it is an obvious thing and partially because 
I was told by one of my Soviet contacts about the existence of other groups in the 
Government. 

Mr. Morris. In other words, you knew there were espionage rings other than 
your own in the Government and you know they haven't been exposed. 

Miss Bentley. I know they haven't been exposed. I was not told who they 
are, but since they were not exposed, obviously they are still operating. 

Mr. Morris. You knew of two individual rings working under you? 

Miss Bentley. Two individual rings plus a collection of individuals I dealt 
with individually. 

Mr. Morris. One was the Silvermaster ring? 

Miss Bentley. That is correct. 

Mr. Morris. And the other? 

Miss Bentley. We called it the Perlo group. 

Mr. Morris. You had some indirect knowledge that Alger Hiss was operating 
in the Communist framework, did you not? 

Miss Bentley. Yes. One of the members of the Perlo group had at one time 
been taken out of that group by Mr. Hiss and turned over to the Russians, and 
I discovered that during the course of my talking to one member of the group. 

Mr. Morris. In other words, there w^as still a third group that you knew of 
that existed at that time. 

2 All papre references are to the hearings on Interlocking Subversion in Government Departments unless 
otherwise indicated. 

3 This is the paragraph quoted by Mr. Nixon in his 1950 speech. 
< Whittaker Chambers, in concurrent testimony (IPR, p. 4770). 



4 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Miss Bentley. There was a third group that I knew of because of Mr. Hiss, 
and there was another group that was mentioned to me by my Soviet contact 
without identifying it further. 

Mr. Morris. Tliat is still a fourth group. 

Miss Bentley. Yes. 

Mr. Morris. And you know, as a matter of fact, that neither one of these 
two groups, as far as you know, have been exposed as of this date? 

Miss Bentley. As far as I know, they haven't been exposed (Institute of 
Pacific Relations hearings, pp. 4777-4778), 

When Miss Bentley appeared before us in 1952, she painted a word 
picture of the fundamental design of the penetration. Significant 
parts of her testimony are given here: 

Senator Ferguson. Did you have trouble or difficulty in moving these agents 
that you had into strategic positions in government or in the Army that you were 
talking about, that you did not want them where there was danger but you wanted 
them in strategic positions? For example, Silvermaster, did you have trouble 
moving people such as that, or how were they moved to strategic positions so that 
you could get j'our information? 

Miss Bentley. We didn't have too much trouble. In the case of Silvermaster, 
he pulled strings and got in there. 

Senator Ferguson. What were your avenues for placing people in strategic 
positions? 

Miss Bentley, I would say that two or our best ones were Harry Dexter White 
and Lauchlin Currie. They had an immense amount of influence and knew 
people and their word would be accepted when they recommended someone. 

The Chairman. Harry Dexter White was in what department? 

Miss Bentley. Under Secretary of the Treasury; under Mr. Morgenthau. 

Senator Ferguson. In other words, Currie and White were your instrumentali- 
ties in putting people in strategic positions? 

Miss Bentley. I would say they were our most important ones. 

Senator Ferguson. Yes. Did you have any other ones? 

Miss Bentley. Yes. I mean, whoever we had as an agent in the Government 
would automatically serve for putting someone else in. For example, Maurice 
Halperin was head of the Latin American Section in OSS, and we used him to 
get Helen Tenney in. Once we got one person in he got others, and the whole 
process continued like that. 

Senator Ferguson. But if you desired to shift a person from one position to 
another position you would use White and Currie? 

Miss Bentley. We would use White and Currie if we could. 

Senator Eastland. Do you know who White's principal contacts were in the 
Government so that he could place people in government? 

Miss Bentley. It was my understanding that he knew practically everyone 
in Washington who had any influence (IPR, p. 419). 

Miss Bentley. The Soviet intelligence didn't like to lose anybody to the 
Army unless they could get into strategic positions — that is, not the infantry but 
with intelligence, they would consider that very good. 

Senator Ferguson. That would be an important position? 

Miss Bentley. That would be an important position. 

Senator Ferguson. As you say, though, you tried to keep your members out 
of the real fighting because they could give yovi little aid? 

Miss Bentley. They could give us little aid, and they would also get knocked 
off. We tried to get them into Washington (IPR, p. 417). 

The subcommittee has therefore assembled all the pertinent facts it 
has received in evidence during the hearmgs on the Institute of Pacific 
Relations, on American subversives in the United Nations, and in 
this scries of hearings since April 1953. We are presenting an uiterim 
report with a view toward establishing the pattern of infiltration and 
toward making certain recommendations at this time. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 5 
THE EXTENT OF THE PENETRATION 

According to the evidence in our records, those involved in the 
secret Communist underground included an executive assistant to the 
President of the United States; an Assistant Secretary of the Treasury; 
a United States Treasury attache in China; the Director of the OfSce of 
Special Political Affairs for the State Department; the Secretary of the 
International Monetary Fund; the head of the Latin- American Divi- 
sion of the Office of Strategic Services; a member of the National Labor 
Relations Board; secretary of the National Labor Relations Board; 
chief counsel, Senate Subcommittee on Civil Liberties; chief, Statis- 
tical Analysis Branch, War Production Board; Treasury Department 
representative and adviser in Financial Control Division of the North 
African Economic Board in UNRRA and at the meeting of the Council 
of Foreign Ministers in Moscow; director, National Research Project 
of the Works Progress Administration. 

THE FIRST PENETRATION 

The first organized subversion encountered by the subcommittee, in 
point of time, was that accomplished by the Harold Ware underground 
cell of the Communist Party in Washington, D. C, in the early 1930's. 
With the recognition that only someone who has been among the ranks 
of the Communists can authoritatively testify as to who also were in 
the ranks, the subcommittee took testimony from two members of this 
cell. They were Wliittaker Chambers and Nathaniel Weyl.^ In 
setting forth the members of the Ware cell, we are listing the positions 
which they subsequently achieved in government or in public life 
and how they testified when they were subpenaed by the subcom- 
mittee. 

Nathan Witt was attorney for Agricultural Adjustment Adminis- 
tration; Assistant General Counsel, National Labor Relations Board; 
the secretary, National Labor Relations Board. (Invoked his consti- 
tutional privilege of refusing to answer on the ground that he could 
not be compelled to bear witness against himself.) 

Lee Pressman, Assistant General Counsel, Agriculture Adjustment 
Administration; General Counsel, Works Progress Administration 
and Resettlement Administration; general counsel, CIO. (Admitted 
Communist membership before the House Un-American Activities 
Committee.) 

John J. Abt, attorney for Agricultural Adjustment Administration; 
Assistant General Counsel, Works Progress Administration; special 
counsel, Securities and Exchange Commission; chief counsel, La- 
Follette Civil Liberties Committee; special assistant to the Attorney 
General. (Invoked privilege.) 

Charles Kramer, Agricultural Adjustment Administration; National 
Youth Administration, staff member, LaFollette Civil Liberties Com- 
mittee; National Labor Relations Board; staff member. Senate Com- 
mittee on War Mobilization; staff member, Senate Subcommittee on 
Wartime Health and Education. (Invoked privilege.) 

• It also took the executive session testimony of another ex-Communist who was part of a less important 
Government Communist ring that operated at that time and gave considerable corroboration to the Cham- 
bers and Weyl testimony. 



6 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Henry H. Collins, Jr., National Recovery Administration; Soil Con- 
servation Service; Labor Department; staff member, House Com- 
mittee on Interstate Aligration; Senate Committee on Small Business; 
Senate Subcommittee on Technological Mobilization; entered military 
Government service as captain and retired as major; State Depart- 
ment, displaced persons program; Intergovernmental Committee on 
Refugees. (Invoked privilege.) 

Victor Perlo, National Recovery Administration; Home Owners' 
Loan Corporation; Commerce Department, economic analyst; Office 
of Price Administration, Chief, Statistical Analysis Branch; War 
Production Board on problems of military aircraft production; 
Treasury Department Division of Monetary Research. (Invoked 
privilege.) 

Harold Ware, consultant to the Agriculture Department. (De- 
ceased.) 

Alger Hiss, assistant to the General Counsel of the Agricultural 
Adjustment Administration; counsel to the Senate Committee In- 
vestigating the Munitions Industr}^; staff of the Solicitor General of 
the United States; special assistant to the Director, Office of Far 
Eastern Affairs; Director of Office of Special Political Affairs, Depart- 
ment of State; Secretary General, United Nations Conference. 
(Denied Communist Party membership before HUAC.) 

Donald Hiss, attorney, Public Works Administration; Assistant 
Solicitor, Department of Labor; assistant to the legal adviser in the 
Department of State. (Denied Communist Party membership.) 

Set forth herein are some of the individual cases reviewed by the 
subcommittee. . 

SOME CASE HISTORIES 

Harold Glasser 

The Nixon memorandum made reference to Harold Glasser in 1945. 
It read: 

Bentley advised that members of this group had told her that Hiss, of the State 
Department, had taken Harold Glasser, oi the Treasury Department, and 2 or 3 
others and had turned them over to direct control by the Soviet representatives 
in this country (p. 72). 

Wlien Miss Bentley appeared before the subcommittee in 1951 and 
1952, she testified in greater detail about Glasser. 

Miss Bentley. In 1944 I took a group of people I called the Perlo group. * * * 
One of the members of this group was a Mr. Harold Glasser in the Treasury. In the 
process of checking everyone's past, I found that Mr. Glasser had, at one time, 
been pulled out of that particular group and had been turned over to a person 
whom both Mr. Perlo and Charles Kramer refused to tell me who it was, except 
that he was working for the Russians, and later they broke down and told me it 
was Alger Hiss (I. P. R. pp. 441-442). 

Wliittaker Chambers has also testified under oath that he had met 
Harold Glasser. 

In his book, Witness, published in 1952, Chambers writes: 

Harry Dexter White was the least productive of the four original sources. 
Through George Silverman, he turned over material regularly, but not in great 
quantity. Bykov fumed, but there was little that he could do about it. As a 
fellow traveler, White was not subject to discipline. Bykov suspected, of course, 
that White was holding back material. "Du musst ihn kontrollieren," said 
Bykov, "you must control him" — in the sense in which police "control" passports, 
by inspecting them. 

I went to J. Peters, who was in Washington constantly in 1937, and whom I 
also saw regularly in New York. I explained the problem to him and asked for 
a Communist in the Treasury Department who could "control" White. Peters 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 7 

suggested Dr. Harold Glasser, who certainly seemed an ideal man for the purpos?, 
since he was White's assistant, one of several Communists whom White himself 
had guided into the Treasury Department. 

Peters released Dr. Glasser from the American Commimist underground and 
lent him to the Soviet underground. Glasser soon convinced me that White 
was turning over everything of importance that came into his hands. Having 
established that fact, I simply broke off relations with Dr. Glasser. Later on, he 
was to establish a curious link between the imderground apparatuses, current and 
past. Testifying before the McCarran committee in 1952, Elizabeth Bentley 
told this story. In 1944, she was working with what she identified as the Perlo 
group (after Victor Perlo of the former Ware group). In the Perlo group was 
Dr. Harold Glasser. At one point, Miss Bentley had made a routine check of 
the past activities of all the group members. The check showed that Dr. Glasser 
had once worked with a man whom both Victor Perlo and Charles Kramer (also 
a member of the group) at first refused to identify beyond saying that the unknown 
man was working with the Russians * * * (pp. 429, 430 of The Witness). 

Glasser was subpenaed by the subcommittee on April 14, 1953, 
and invoked his privilege against self-incrimination when asked about 
all of this evidence and information. He also refused under privilege 
to tell the subcommittee the circumstances surrounding his Govern- 
ment assignments within the United States or abroad. The record 
shows, however, that in 1940, the Treasury Department sent him to 
Ecuador as financial adviser to Ecuador's Ministry of Finance. In 
1943, he was the Treasury's representative and chief of the Financial 
Control Division of the North African Economic Board. He was the 
financial expert of the American delegation in the formation of 
UNRRA and in the subsequent administration of this international 
body "tliroughout its whole life.'' In this capacity, he was one of 
those "with a predominant voice" in determining which countries 
should receive aid from UNRRA and which should not. In 1944, the 
Treasury Department sent him to Italy "to make a study and develop 
a program for fighting inflation in the civilian liberated areas." In 
1945, he went to UNRRA council meetings in Europe. In January 
1947, he participated in a Four Power study of the economy of Trieste. 
In the spring of that same year, he was an adviser to Secretary of 
State Marshall at the meeting of the Council of Foreign Ministers in 
Moscow (pp. 57-70). 

Virginius Frank Coe 

The Berle memorandum of 1939 contains the names of Frank Coe 
and his brother, Charles (Bob) Coe. In 1948 Miss Bentley publicly 
brought forth in testimony that Frank Coe was a member of her 
espionage ring. Yet, when the subcommittee subpenaed Coe in 
December 1952, he held the position of Secretary of the International 
Monetary Fund at $20,000 a year.* 

Virginius Frank Coe first worked for the United States Government 
in 1934. Since then he has held positions in Federal Security Admin- 
istration, the National Advisory Defense Council, jMonetary Research 
Division of the Treasury Department (Assistant Director and Direc- 
tor), Joint War Production Committee of the United States and 
Canada (Executive Secretary), Board of Economic Warfare (assist- 
ant to the Executive Director), Foreign Economic Administration 
(Assistant Administrator). He was the technical secretary of the 
Bret ton Woods Monetary Conference in 1944 when the articles of 
agreement were drafted setting up the International Monetary Fund. 

•Hearing before this Subcommittee on Activities of United States Citizens Employed by the United 
Nations, pp. 227-256. 

56548'— 5S 2 



8 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

The International Monetary Fund handles assets of between $7 and 
$8 billion and it is a specialized agency of the United Nations. 

Coe refused to answer, on the ground that the answers might 
incriminate him, all questions as to whether he was a Communist,® 
whether he had engaged in subversive activities, or whether he was 
presently a member of a Soviet espionage ring. He refused for the 
same reason to say whether he was a member of an espionage ring 
while technical secretary of the Bretton Woods Conference, whether 
he ever had had access to confidential Government information or 
security information, whether he had been associated with the 
Institute of Pacific Relations, or with individuals named on a long 
list of people associated with the organization. It was noted that 
he did answer questions as to his relationship with Jacob Viner, 
Milo Perkins, Leo Crowley, and Evar Rooth but refused to answer 
questions with respect to his relationship with Harry Dexter White, 
Alger Hiss, Philip C. Jessup, Solomon Adler, Lauchlin Currie, Michael 
Greenberg, Constantine Oumansky, and a long list of others. He 
testified as to how he got his first Government employment, but 
refused to say how he obtained his subsequent positions. Coe was 
dismissed by the International Monetary Fund a few days after his 
testimony on December 3, 1952. 

Alger Hiss 

The name of Alger Hiss was also on the list Chambers gave Berle 
in 1939.^ The Nixon memorandum of November 1945, showed that 
the authorities charged with security had by then accumulated three 
sources ^ bearing on Hiss' involvement in the Communist organi- 
zation. The subcommittee encountered even more. As far as evi- 
dence admissible in a court of law is concerned, the most significant 
was the testimony of Nathaniel Weyl. 

This testimony confirmed Chambers' assertions that Alger Hiss was 
a member of the Harold Ware cell of the Communist Party, a fact 
which Hiss had denied, Weyl told the subcommittee that he had 
concealed his past Communist Party membei-ship until after the 
Korean Communists attacked the forces of the free world in 1950. 
Only then did he go to the Federal Bureau of Investigation with the 
details of his involvement in the Communist organization. By then 
the second Hiss trial had been concluded and the verdict announced 
without the evidence that Weyl would have contributed. But the 
subcommittee had set a standard whereby it was seeking to induce 
ex-Communists to come forward and deposit their secrets in a security 
bank that would benefit the free world. Weyl's testimony came 
within the framework of that standard and it was welcomed by the 
subcommittee. 

Weyl testified that he (Weyl) had been a Communist at Columbia 
University and had come to Wasliington in 1933 for Government 
employment. After obtaining a position in the Department of 
Agriculture, he was assigned by his Communist superiors to a cell, 
the head of which was Harold Ware. Weyl stated that this cell, at 
the time of his participation was made up of Alger Hiss, Lee Pressman, 
Charles Kramer, Henry Collins, John Abt, Nathan Witt, Victor Perlo, 
and Harold Ware.« Weyl left this cell early in 1934.'° 

« In 1948 he denied Communist Party membership. 

' P. 329 hearing mterlorking subversion in Government Departments. 

» Chambers, Bentley, and Gouzenko. 

• IPR hearings, p. 2799. 

»« IPB hearings, p. 2802. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 9 

Whittaker Chambers had previously testified that he (Chambers) 
joined this cell in 1934 and that it then contained Lee Pressman, 
Nathan Witt, John Abt, Alger Hiss, Donald Hiss, Victor Perlo, 
Charles Kramer, Henry Collins, and Harold Ware.'^ 

Thus the testimony of the two witnesses related to a diiTerent period 
of time. The personnel of the cell was identical according to both 
except for the fact that Chambers testified that Donald Hiss, of the 
State Department, was also in the cell. 

The subcommittee noted that Alger Hiss was intimate with the 
leaders of the Institute of Pacific Relations which the subcommittee 
found to be infiltrated by Communists. In its report on the Institute 
of Pacific Relations, the subcommittee detailed these intimacies.^^ 

A secm-ity authority's perspective of Alger Hiss in 1945 and 1946 
was given by J. Anthony Panuch, formerly Deputy Assistant Secre- 
tary of State in charge of security, when he testified before the sub- 
committee on June 25, 1953. 

Panuch was assigned by Secretary of State James F. Byrnes to 
supervise the security aspects of the transfer of personnel and func- 
tions from war agencies to the State Department in the fall of 1945. 
In the course of his work Panuch noted a proposal to make the Office 
of Special Political Affairs, which had acquired important status 
under the two great reorganizations of 1944, the central, key organi- 
zation of the Department. Alger Hiss was the Director of this 
Office and the supporter of this proposal. ^^ 

Mr. Panuch testified that the plan to make the Ofiice of Special 
Political Affairs a super-planning and coordinating agency of the State 
Department was defeated. Until Alger Hiss resigned in January 
1947, however, he remained in a position of considerable power, as 
Director of the office which initiated American policy on United 
Nations questions and serviced the American delegation to the United 
Nations. 

Panuch told the subcommittee that as a security officer he had 
access to security information on Hiss which he said was as conclusive 
to him then as it was when revealed in the course of the congressional 
hearings of 1948 or in the course of the two Hiss trials. As a result 
of this knowledge, Panuch wrote a memorandum on March 7, 1946, 
about the proposed elevation of the Office of Special Political Affairs 
to Assistant Secretary of State Donald S. Russell wherein he said: 

In examining the plan and assessing its implications in terms of control, it 
should be remembered that Dr. Hiss exercises Svengali-like influence over the 
mental processes of Junior Stettinius,'^ the United States delegate to UNO. 

Through Mr. Rothwell, his designee for the post of Secretary-General of the 
United States delegation to UNO, Dr. Hiss will enjoy "working control" over 

" HUAC henrings nn pspionage In the United States Government, 1918, p. 1180. 

I* He was a trustee of the organization (I PR hearings, p. 134). He cooperated with Edward C. Carter and 
Lauchlin Currie in arranging a high-level conference for Vladimir RogofE, Tass correspondent (ibid, pp. 
131, 132, 133). Lawrence K. Rosinger, who invoked the fifth amendment regarding Communist ties, 
refused on the same ground to acknowledge knowing Alger Hiss (ibid, p. 24S6). WilHam L. Holland sent 
IPR manuscripts for review to Hiss (ibid, p. 482). Hiss was recommended as a delegate to the Hot Springs 
IPR confe"ronce by Philip C. Jcssup (ibid, pp. 494, 979, 9S0). Carter wrote to Hiss on February 5, 1917: 
"You have done so much for the IPR in cooperation and wise advice that I am hoping this fine relationship 
can continue in your new post" (ibid, p. 134). 

13 Mr. Panuch. Mr. Hiss was deputy to Mr. Pasvolsky, who was a special assistant in charge of the Inter- 
national Security Organization, and I think the chart will show the precise title that Mr. Pasvolsky's 
portfolio had. But the agency under Mr. Pasvolsky which was in Mr. Hiss' charge was the Office of Special 
Political Affairs, and that had policy jurisdiction of all international organizations and the logistic and 
policy support of our activities in international organizations, which specifically were the United Nations, 
the specialized agencies, and the American complement of persoimel in the United Nations' Secretariat 
(p. 851). 

" Edward R. Stetthiius, Jr. 



10 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

the flow of papers in and out of the Secretariat of the United States group. The 
proposed plan would establish a similar control setup within the State Department, 
where Dr. Hiss already wields considerable influence with the counselor on UNO 
matters. This would be effected by the simple device of establishing a new Office 
for United Nations Affairs, which would report directly to the Under Secretary. 
Under the plan, the Director of this new Office (Dr. Hiss) would be the Under 
Secretary's deputy for United Nations Affairs. 

If this ambitious project should be approved, it is obvious that the operations 
of the new office, as the "initiating and coordinating center within the Depart- 
ment" for UNO affairs, will, for all practical purposes, supplant and supersede 
the functions of the geographic and economic offices of the Department. In 
such event, the question arises to what extent the de jure policy output of the 
Department will be diluted by the day-to-day de facto policy product as es- 
tablished by Mr. Stettinius' counteri^art of the State Department, functioning 
within the UNO orbit of influence in New York. If Dr. Hiss should succeed 
in causing Dr. Appleby to be designated as the UNO Assistant Secretary General 
for Administration, the Hiss group will have achieved infiltration in, or control 
of, four critically strategic points, i. e., (a) UNO itself (Feller, Appleby) ; (fc) 
the United States delegation (Stettinius and Rothwell) ; (c) State Department 
(Hiss, Ross, OUNOA); and (d) Bureau of the Budget (Harold Smith, Schwarz- 
walder) Q^p. 852-853). 

The subcommittee noted that it was Panuch and not Hiss who was 
dismissed from the State Department. ^^ 

David Weintraub 

David Weintraub occupied a unicjue position in setting up the struc- 
ture of Comminiist penetration of governmental agencies by individ- 
uals who have been identified by witnesses as underground agents of 
the Communist Party, and who, when asked about the truth of this 
testimony, either invoked the fifth amendment on grounds of possible 
self-incrimination or admitted such membership. 

He was the director of the National Research Project of the Works 
Progress Administration which was an object of special attention dur- 
ing our hearings. The project appears to have been a kind of trap 
door, through which agents of the Communist underground gained 
entrance to the Government. In addition to Weintraub, the project 
harbored Irving Kaplan, Edward J. Fitzgerald, Charles Flato, Jacob 
Grauman, Hai-ry Magdoft", Harry Ober, Herbert S. Schimmel, Vera 
Shalkman, Norman Bursler,^^ and Alfred Van Tassel. 

" Mr. Morris. This is your conference with whom? 

Tvlr. Pant'ch. Secretary Byincs. He said, "Why don't you submit your resignation to General Marshall 
and I will tallc to him about you and let you know?" 

When General Marshall came from Hawaii, Secretary Byrnes did talk to him, and I was told that "Gen- 
eral Marshall wants to see you, talk to you, immediately, and he wants to have you stay on." 

The next day I was told by a newspaperman that I was slated to get the full treatment, and I found out 
that Secretary Acheson, who was then tinder Secretary Acheson, who was expected to be Under Secretary 
for George Marshall during an interim jseriod until Under Secretary Lovett could come over from the War 
Department, would not tolerate my being around the Department. 

Senator Welker. Who was this? Dean Acheson would not tolerate your being around the Department? 

Mr. Panuch. If he were Under Secretary under General Marshall; yos. 

So I made the necessary preparations, and I stayed around to be called by General Marshall, and one of 
my people was taking care of his engagement desk, and the engagement was constantly being put off, and 
so, on September 23, or rather, January 23, at 5:30 that night. Under Secretary Acheson called me into his 
offlce, and we had a conversation and he said, "Joe, you and I haven't gotten along very well," and he said 
"Now General Marshall has asked me to take over here as Under Secretary until Mr. Lovett comes over 
and I told him that I would do so only on condition that I would have complete charge of the administra- 
tion of the Department and, as you and I don't see eye to eye on various matters, I would like your resig- 
nation." 

So I told him I had already tendered my resignation to Secretary Marshall, and he said, "Really?" 

And I said, "Yos." 

He said, "Where is it?" 

I said, "I will go into General Marshall's room and take It off his desk," which I did. 

It was one of the simple ones: "I resign at your pleasure. Acting Secretary for Administration." 

I gave that to Secretary Acheson and he seemed surprised, and he put it in his drawer and reached out a 
letter accepting my resignation, signed by General Marshall, effective as of the close of business that date 
which imder Department rules, was 10 minutes later (p. 908). 

" Bursler's Government employment: Special assistant, National Recovery Administration; research 
statistician, Works Progress Administration, National Research Project; economist. Office of the 
Secretary of Labor; assistant economist. Department of Agriculture; expert, Department of Justice, Anti- 
trust Division. He denied Communist Party membership before the subcommittee. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 11 

Irving Kaplan was in fact the immediate subordinate of Weintraub 
as associate director of the project. Wliittaker Chambers testified 
that he was told by a leader of the Communist underground apparatus, 
to seek employment with the National Research Project, the two heads 
of which were Communist Party members. He applied and got the 
job.^^ Weintraub, when subpenaed, denied Communist membership. 

The role pla3-ed by Weintraub was indicated in the case of Fitzgerald 
by this testimony; 

Mr. Morris. Now, did Mr. Weintraub aid you in any way in getting your 
employment with the national research project? 

Mr. Fitzgerald. I decline to answer on the ground it might tend to incriminate 
me (p. 247). 

On Fitzgerald's civil-service application forms dated February 13, 
1943, and November 26, 1944, David Weintraub appears as a ref- 
erence, together with Irving Kaplan (p. 251). On October 16, 1936, 
Weintraub, together with Kaplan, signed a requisition for personnel 
in behalf of Fitzgerald asking that the latter be assigned to official 
headquarters of the national research project (pp. 266-267). On 
June 1, 1939, and January 29, 1941, Weintraub signed statements 
giving Fitzgerald a recommendation of "excellent," eulogizing his serv- 
ice m detail (pp. 267, 271). On January 10, 1940, Weintraub wTote 
to the Bureau of the Census in behalf of the employment of Fitzgerald 
and Magdoff (p. 269). Weintraub admitted he may have recom- 
mended Solomon Adler, a national research project employee for a 
Government post.^^ Adler, later to become United States Treasury 
attache in China was identified as a member of an underground ring 
of the Communist Party. 

At least three witnesses who refused to answer questions regarding 
their Communist affiliations (Henry H. Collins, Jr., Harry Ober,^^ 
and Harold Glasser) stated that it might incrimmate them if they 
answered questions about knowmg David Weintraub (pp. 21, 63, 
267). 

Weintraub became the Director of the Economic Stability and De- 
velopment Division of the Secretariat of the United Nations, and 
employed under him again were Irving Kaplan and Herbert S. 
Schimmel. Also employed under Weintraub at the U. N. were 
Sidney Glassman, Herman Zap, and Joel Gordon who invoked their 
constitutional privilege against self-incrimination. 

In the course of his testimony in the hearings on the Institute of 
Pacific Relations, Weintraub admitted knowing the followmg Govern- 
ment employees who were identified in sworn testimony as members 
of an underground cell of the Communist Party: John J. Abt, Alger 
Hiss, Lee Pressman, V. Franlc Coe, Donald Hiss, Victor Perlo, Nathan 
Gregory Silvermaster, Abraham George Silverman, and Michael 
Greenberg. He also knew Harry D. White and Lauchlin Currie, who, 
according to testimony, were involved with this group. ^^ 

Chambers, in the course of his testimony, mentioned Rose Alpher, 
Weintraub 's sister, as a Communist. Wlien she was called to answer 
this testimony, she invoked her constitutional privilege. 

" IPR hearings, p. 4737. 

i« IPR hearings, p. 4649. 

'» Ober, when summoned by the subcommittee was still an employee of the Department of Labor and 
refused to answer on grounds of privilege, whether he was in the same Communist cell as Weintraub. By 
the time he appeared as a witness, several days later, he had resigned. 

« IPB hearings, pp. 4676. 4679. 



12 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Weintraub helped make policies in important agencies affecting the 
interests of the United States, i. e., as assistant to Harry Hoi^kins, 
Director, Federal Emergency Relief Administration; Director of Na- 
tional Research Project, Works Progress Administration, 1933 to 1941 ; 
economic adviser for the Redistribution Division of the War Produc- 
tion Board, 1941 to 1943 ; Chief of the Division of Studies and Reports 
of the Office of Foreign Relief and Rehabilitation of the State Depart- 
ment, 1943; adviser to Governor General Herbert H. Lehman at the 
first council session of the United Nations Rehabilitation and Recovery 
Administration, 1944; secretarv of the committee on supplies, 
UNRRA, 1944; chief of supplies," UNRRA, 1945, 194G. 

The story of Innng Kaplan 

Our hearings brought forth the amazing story of Irving Kaplan. 

On March 16, 1936, Kaplan was made associate director of the 
national research project for the Works Progress Administration at 
a salary of $5,000 a year. The following September his salary was 
raised to $5,400. On August 3, 1938, he was made special assistant 
to the Attorney General of the United States, also at $5,400. On 
February 21, 1940, he became research analyst in the Office of the 
Chief, Research and Statistics Section, of the Federal Works Agency, 
at $5,600. On July 1, 1941, he was promoted to principal research 
economist in the Office of the Administmtor, Federal Works Agency. 

On February 2, 1942, he was made head economic analyst, Statistics 
Division, Industrial and Commodity Research Branch, War Produc- 
tion Board, at $6,500. Two weeks later he became head program 
progress anal^^st. Executive Office of the Chairman, Office of Progress 
Reports, War Production Board. On September 12, 1944, he was 
appointed Director, Programs and Reports Staff, Office of the Admin- 
istrator, Foreign Economic Administration, at $8,000. 

On July 12, 1945, Kaplan was made economic adviser, liberated 
areas problem, Division of Monetary Research, Treasury, at $8,750. 
On the same day he was also made economic adviser, Foreign Funds 
Control Section of the Treasury and assigned to the United States 
Group Control Council in occupied Germany. On Alay 20, 1946, 
he was transferred to the post of economist, Chief, Stabilization 
Studies Division, Advisory Board, Guaranteed Wage Study, Office 
of War Mobilization and Reconversion, at $9,012 (exhibit 322 A). 

Kaplan appeared before us during the inquiry into IPR. Here is a 
sample of his testimony: 

Mr. SoTJRWiNB. Were you ever a Soviet espionage agent? 

Mr. Kaplan. I refuse to answer on the ground that it may tend to incriminate 
me. 

Mr. SoTTRWiNK. Are you a Soviet espionage agent now? 

Mr. Kaplan. I refuse to answer * * *. 

Mr. SouRwiNE. Did you ever conspire to overthrow the Government of the 
United States by force and violence? * * * 

Mr. Kaplan. I refuse to answer * * *. 

Mr. SouRWiNK. Are you now engaged in any active conspiracy to overthrow 
the United States Government by force and violence? 

Mr. Kaplan. May I consult with counsel? 

Senator Ferguson. Yes. 

(Mr. Kaplan confers with counsel.) 

Mr. Kaplan. I refuse to answer on the same grounds * * * (IPR 47G0-61). 
******* 



INTERLOCKmG SUBVERSION IN GOVERNMENT DEPARTMENTS 13 

Senator FERGtrsoN. Was there a ring in Washington, where Communists were 
active, to get other Communists into the United States Government? 
Mr. Kaplan, I refuse to answer * * * (IPR 4745). 

Shortly after this testimony, Kaplan took the stand before the House 
Committee on Un-American Activities on June 10, 1952. His com- 
bined testimony fills about 61 pages. On those 61 pages we find that 
he believed it might incriminate him if he gave true answers to 244 
questions. 

Kaplan said it might incriminate him to tell who got him his first 
Government job in the Works Progress Administration, or to tell who 
his superior was in his second Government job with WPA's national 
research project, or to tell who arranged the appointment with As- 
sistant Attorney General Thurman Arnold, which got him his third 
Government job as special assistant to the Attorney General, or to 
tell how he got his jobs with the War Production Board, the Foreign 
Economic Administration, the Treasury and the Ofiice of War Mobili- 
zation and Reconversion. 

How did he get them? Wlio hired him? Wlio helped him? Wlio 
promoted him? Wliom did he, in turn, hire, and help and promote? 
What kind of record did he make as a Government servant? 

The man who gave Irving Kaplan his job as associate director of 
the national research project of WPA in 1935 was David Weintraub 
(IPR, p. 4647). The man who helped Irving Kaplan get his job with 
the Division of Economic Stability of the United Nations 12 years 
later was the same David Weintraub, who b}^ that time was Director 
of that U. N. division (IPR, p. 4630). 

Whittaker Chambers involved both Kaplan and Weintraub as 
Communists. He said that Kaplan gave him, Chambers, a job with 
the National Research Project of WPA in the 1930's as a service to 
the Communist conspiracy (IPR, p. 4756). 

Ehzabeth Bentley testified that Kaplan was one of the espionage 
ring who gave her stolen Government secrets in the 1940's. 

Edward J. Fitzgerald, who got started in Government at the 
national research project, used Kaplan's name for reference to help 
him on his way up (p. 251). 

When Kaplan applied for a post with the Federal Works Agency 
in 1942, he used the names of Lauchlin Currie and Abraham George 
Silverman as character references (exliibit 316). Currie, it will be 
recalled, was described by Elizabeth Bentley as one of her most 
important "avenues of influence." She named Silverman as a mem- 
ber of the underground. Silverman sought the shelter of the fifth 
amendment when questioned about these charges (IPR Report, p. 181.) 

Kaplan used the names of Currie and Silverman again, 2 years 
later, when he sought a job with Foreign Economic Administration. 
He got the job (exhibit No. 318). He used the same names, with the 
same success, in an application to the Treasury in 1945 (exliibit 322). 

When Kaplan went to the Treasury in June 1945, it was Frank Coe 
who appointed him (exhibit 322 A). Coe's name was on the Berle 
notes and he was identified by Bentley as a Communist. He invoked 
the fifth amendment before us last De'^cember 1, 1952 (p. 227ff — U. N. 
hearings). 

In July 1945, Harry Magdoff gave a "favorable comment concerning 
Mr. Kaplan's character," when Kaplan was preparing to join the 
United States Group Control Council in Germany (exhibit 321 A). 



14 INTERLOCKENG SUBVERSION EST GOVERNMENT DEPARTMENTS 

Five months after he vouched for Kaplan's loyalty, MagdoflP himself 
was named in the Nixon memorandum. In December 1945, a month 
after the memorandum was circulated, Magdoff was made Chief 
Economic Analyst in the Office of Business Economics, Department 
of Commerce, at $7,437.50. A year later, after five promotions, Harry 
Magdoff '1 was drawing $9,975 (p. 292). 

After his return from Germany both Coe and Harold Glasser rated 
Kaplan's Treasury work E, for excellent. Glasser was the man, 
according to Chambers, who persuaded Harry Dexter White to pro- 
duce more documents out of the Treasury (pp. 74-75). 

On Alay 17, 1946, Kaplan was transferred by Coe to the Office of 
War Mobilization and Reconversion (exhibit 322B). He left there, 
with accumulated leave and a clean bill of health, only when the 
agency itself ceased to exist. 

The facts stated above hardly need interpretation, against the back- 
drop of Miss Bentley's previously quoted testimony. 

We didn't have too much trouble (in moving these agents) * * *. Two of our 
best (avenues for placing people in positions) were Harry Dexter White and 
Lauchlin Currie * * * Whoever we had as an agent would automatically serve 
for putting some one else in * * *. Once we got one person in, he got others, 
and the whole process continued like that * * *. We trained our agents to make 
what good contacts they could here in Washington in order that should they need 
to get into a better job, they would have the contact ready. "We" tried to keep 
members "out of the real fighting," so they would not "get knocked off." 

There are certain other facts regarding Kaplan's record. At the 
National Research Project, he was in charge of "planning, developmg, 
and directing the. research work." He was "in charge of research 
section" at the Federal Works Agency. As special assistant to the 
Attorney General of the United States, he "planned and directed 
studies in connection with investigations of the TNEC (Temporary 
National Economic Committee) and the antitrust division." At the 
War Production Board he had full access to "secret monthly reports 
on the United States production program" (exhibit 318A). At the 
Treasury he "advised and conferred with the Secretary" (exhibit 
322C). 

When he was assigned to Germany, the Treasury asked the Secretary 
of State for a special passport, because of the "vital importance" of 
getting Kaplan to Germany "as soon as possible" (exhibit 319A). 
General McNarney designated him an official courier to carry classified 
documents (exhibit 319). 

Here is a description of the job Irving Kaplan was supposed to do in 
Germany: 

JOB DESCRIPTION, ECONOMIC ADVISER, P-8, IRVING KAPLAN 

Serves as chief adviser on the most complex financial economic problems in 
connection with the comprehensive investigative and research work being under- 
taken to trace through captured and other records all German assets and looted 
property; renders expert advice and participates in planning major investigative 
and research projects with respect to uncovering German assets and tracing 
methods of financial and economic manipulation practiced by the German Govern- 
ment, such projects covering the investigation of individuals, banks, international 
holding companies and corporations, industrial combines, cartels and other kinds 
of business and financial enterprises, and involving questions in connection with 

'I Magdoff's present occupation is somewhat obscure. He told the subcommittee he was self-employed, 
and then sought shelter under the umbrella of the fifth amendment when asked about his cUents (p. 287). 



INTERLOCKESrG SUBVERSION IN GOVERNMENT DEPARTMENTS 15 

such enterprises, such as: organization structure; states or political entities or 
laws under which organized; type and volume of commercial and financial trans- 
actions in which engaged; ownership and control of securities and obligations; 
devices used to cloak real control, such as dummy organizations, trust agreements, 
option contracts, repurchase agreements, interlocking directorates, industrial 
agreements; cartels, community of interest arrangements, copyright and patent 
agreements, etc.; also, engages in a planning and advisory capacity in organizing 
projects to trace millions of dollars of hoarded gold bullion, coin, foreign currency, 
art treasures, and other looted property seized by the German army and believed 
cached in neutral nations; and performs other work of equal importance and 
responsibility 

HOW MANY SECRETS? 

How many priceless American secrets have been conveyed to 
Moscow through the tunnels of the American Communist under- 
ground win never be laio\\Ti. The fact that documents were accumu- 
lated by unauthorized persons has been well established. For in- 
stance, in the winter of 1945, agents of the Office of Strategic Services 
invaded the New York office of an obscure, little magazine called 
Amerasia. This publication has been closely identified with the 
Institute of Pacific Relations and its connection with the Communists 
who had infiltrated IPR was set forth when that organization was the 
subject of a special inquiry by the subcommittee. 

THE AMERASIA CASE 

This subcommittee has not addressed itself specifically to the Amer- 
asia case, which has been the subject of inquiries by other congressional 
committees, and it does not loiow whether any of the documents found 
in the Amerasia office were, in fact, transmitted further. But the 
testimony of Frank Bielaski, who in his capacity of director of investi- 
gations for the OSS, conducted the investigation is most significant. 

Mr. Bielaski. * * * Of the documents we saw, I made the comment at the 
time, that we had documents there from every department of the Government, 
with the exception of the FBI. We didn't find any FBI documents in that office; 
but, the State Department Military Intelligence, Naval Intelligence, Bureau of 
Censorship, British Intelligence, OSS, and possibly some others which I have 
forgotten. 

They were not documents that were primarily of literary value, they were not 
literary documents. They were documents that had very definite value of a 
different kind, not all, but many of them. Every document I saw was stamped 
with the mail receipt stamp of the Department of State. I would not say that all 
400 were stamped that way, but all I saw were so stamped. All those that I saw, 
also, were marked with a paragraph, I can read it exactly to you, I wrote it down 
in a memorandum, but it was to the effect that "The possession of these documents 
by an unauthorized person constituted a violation of the Espionage Act," and it 
quoted the paragraph, and so forth, of the act. 

******* 

Oh, among these documents which I recall, and which we discussed while we 
were sitting there, to determine how we were going to handle this thing, was one 
all of us remember because it startled us. It was a lengthy document detailing the 
location of the units of the Nationalist Army of China, their strength, how they 
were armed, where they were located, the town in which they were located (ibid, 
p. 933). 

******* 

Of my knowledge, the total number of documents involved exceeds a thousand- 
there is 400 that we saw, and I think the FBI seized 467 in Jaffe's office later. 



36548"— 53- 



16 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Senator Lodge." Different ones? 

Mr. BiELASKi. Different ones, and 280 — some that they seized in Larsen's 
apartment, here in Washington. 

Senator Lodge. What happened to them? 

Mr. BiELASKi. The Department of Justice has them. 

Senator Lodge. Still has them? 

Mr. BiELASKi. Yes, sir (State Department Employee Tn\ estli^ation, hearings 
pursuant to S. Res. 231, 81st Cong., 1950, pp. 933, 945, 949, 950). 

THEFTS OF SECRETS BY SOVIET AGENTS 

The subcommittee took cognizance of the records of other com- 
mittees and investigative bodies and observed the extensive thefts of 
secret documents by Communist agents. 

THE CANADIAN ROYAL COMMISSION 

In September 1945, Igor Gouzenko shpped away from the Soviet 
Embassy in Ottawa with the files which ultimately provoked a full- 
scale investigation by a Canadian Royal Commission.^* The report 
of this Royal Commission, based as it was on irrefutable documenta- 
tion from the fountainhead of the conspiracy, demonstrates beyond 
challenge the international and intercontinental nature of the Krem- 
lin's net. The report had some vitally significant things to say about 
the secrets which passed to Moscow through the North American 
and European tunnels of the underground: 

* * * The evidence indicates that there were agents working along the same 
lines in the United Kingdom, the United States, and elsewhere. The Russians 
would know from their agents in Canada that information was being pooled: 
By getting some information on a subject here, some in England, and some in 
the LTnited States, and then assembling it, a very large body of data could be 
built up. 

******* 

However, much secret and valuable information was handed over. Some of 
it is so secret still, that it can be referred to only obliquely and with the greatest 
care, and this is especially so in the case of certain secret information shared by 
Canada, the United Kingdom, and the United States. 

From the beginning there was the closest cooperation in scientific research 
between Canada, the United Kingdom and, later the United States. 

****** 4: 



22 Henry Cabot Lodee, presently United States Ambassador to the United Nations, was a membpr of the 
Ppecial Senate Committee whicli made some inquiries into the Amerasia case. In his minority report on 
the results of these inquiries, Mr. Lodge gave the fnllowinc; statement about the Amerasia documents: 

At the time of the arrests, some 1,800 documents, the majority of which were of Govennnent origin or were 
Government property, were recovered. These documents represented reports from the State Department, 
the Navy Department, OSS, Office of War Information, Federal Communications Commission, Foreign 
Economic Administration, and tlie War Department. According to the testimony of the chief FBI agent 
in charge of the Amerasia investigation, Mr. D. Milton Ladd: "some of them dealt with military matters, 
political affairs, etc. Many of these documents bore the classification 'secret,' 'confidential' or 'restricted.' 
Some were originals, some were copies prepared at the time the originals were made, and others were copies 
from the orighials." 

That many of these documents were of great importance is shown by the following brief descriptions of 
some of the documents: A "top secret" document dealing with targets in Japan; a "top secret" document 
on the Japanese Air Force; a "top secret" report on Japanese resources; a "top secret" document which 
revealed the United States breakdown and mastery of Japanese codes; a "confidential" Office of Naval 
Intelligence report on the organization of Japanese naval forces: a "strictly confidential" communication 
from Ambassador Gauss on the reorganization of the Chinese Air Force; a "classified" report on airplane and 
seaplane anchorages in Japan, Formosa, and Korea prepared by Military Intelligence; an Office of Naval 
Intelligence "confidential" report on China coast physical geography and coastwise shipping routes, bearing 
the penciled notation "war plans, coastal areas, inner passage, mined areas"; a "very secret" document 
containing a memorandum to the Joint Chiefs of Staff, Washnigton; two "secret" documents of the Military 
Intelligence Division entitled "Changes to Order of Battle of Chinese Army"; a document niarl<ed "top 
secret for eyes only," the very highest classification given; a "confidential" forecast of the Pacific war by 
Secretary Grew, which indicated the location of American submarines, together with other classified docu- 
ments dealing with such subjects as the composition of United States forces in Manila and an operations 
plan for Naval Intelligence for their entire counter-intelligence organization in the United States. 

" The Report of the Royal Commission appointed under Order in Council P. C. 411 of February 5, 1946, 
To Investigate the Facts Relating to and the Circumstances Surrounding the Communication, by Public 
Officials and Other Persons in Positions of Trust of Secret and Confidential Information to Agents of a 
Foreign Power, June 27, 1946. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 17 

Next to the atomic bomb it would appear to us that the development of radar 
was perhaps the most vital work accomplished by the English-speaking democ- 
racies in the technical field during the period in question. British scientists had 
already done valuable pioneering work before 1939, but the improvements made 
since then had been considerable and many of these are still in the top secret 
category. Information of the greatest importance in this field was communicated 
to the Russians by agents. 

The work done in connection with antisubmarine devices, asdic, is as im- 
portant as the work done on radar — some authorities say that it is more important. 
Much of it is still in the top secret category. The information before us leads 
us to the conclusion that much, and very possibly all, of the information avail- 
able in Canada on this subject has been compromised. It would at least be unwise 
to assume anything else. 

The advances made in Canada by Canadians in developing and improving 
explosives and propellants were outstanding. Canadian scientists were given 
very full information on the work being done in the same fields in the United 
Kingdom and the United States. The very names of many formulas are still 
supposed to be secret: the production methods even more so. But the names 
and much of the secret information were given to the Russians as well as con- 
tinuing information about trials, experiments and proposed future research. 
This information was of great value. 

Another development in which Canada played a leading role is the "V. T. 
Fuse," the name being a code name. "This is the fuse that knocked the Jap- 
anese Air Force out of the air" * * * One of the agents upon whom we are 
reporting had the wiring diagram of this fuse. There are certain details of the 
manufacture which were known only to the Americans; and the United States 
of America is, we are told, the only country that can build the fuse at the pres- 
ent time. This fuse is the "electro bomb" referred to in some of the Russian 
documents. None of the armaments sent to Russia during the war included 
this fuse. 

In conclusion, therefore, we can say that much vital technical information, 
which should still be secret to the authorities of Canada, Great Britain and the 
United States, has been made known to the Russians by reason of the espionage 
activities reported on herein. The full extent of the information handed over 
is impossible to say; as we have already pointed out, these operations have 
been going on for some time. We should emphasize that the bulk of the technical 
information sought by the espionage leaders related to research developments 
which would play an important part in the postwar defenses of Canada, the 
United Kingdom, and the United States. 

4: ^ * 4: 4: ^ N: 

* * * Much of the political information obtained was classified as top secret 
and related not only to the policies of the Canadian Government but to those 
of the Governments of the United Kingdom and the United States. The value 
of information of this type needs no particularization. 

Again, Canadian citizenship documents such as passports, naturalization cer- 
tificates, and marriage or birth certificates were sought for illegal purposes and 
in some cases obtained. Such documents were sought not only for use in Canada 
but also, as ilhistrated for example by the Witczak passport case dealt with in 
section V of this report, for use in the United States. Sam Carr accepted in 
1945 an assignment to facilitate the entry of other planted agents into Canada 
in the future, and it is clear that this type of operation, which was not a new 
development, was intended to be used more extensively in the future. Such 
planted agents could in time be used not only for espionage but for sabotage, 
leadership of subversive political groups, and other purposes. It is unnecessary 
to comment on the possible gravity of these operations. (The report of the 
Canadian Royal Commission pp. 616-620.) 

THE BENTLEY RING's HARVEST 

About tlie time Gouzenko was telling his story to the Canadian 
authorities, Miss Bentley was telling hers to the Federal Bureau of 
Investigation. In 1948 she made her first public statement under 
oath.^" ^ 

'* Hearings regarding Communist espionage in the United States Government by House of Representa- 
tives, Un-American Activities Committee, 80tli Cong., 2d sess., pp. 522-531. 



18 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Mr. Steipling. What type of information did Mr. Silvermaster turn over to 
you? 

Miss Bentlet. He turned over whatever members of his group secured, 
which was varied, depending on the spot the person was in. 

Mr. Stripling. What type of information was actually turned over to you, 
and which you transferred to Mr. Golos? 

Miss Bentlet. Military information, particularly from the Air Corps, on 
production of airplanes, their destinations to the various theaters of war and to 
various countries, new types of planes being put out, information as to when 
D-day would be, all sorts of inside information. 

Mr. Stripling. How would you transmit this information, yourself, acting as 
a courier for the group? 

Miss Bentley. That depended. In the very early days they either typed it 
out or brought me documents. Later on they began photographing it. 

Mr. Stripling. Where was the photographing carried out? 

Miss Bentley. In the basement of the Silvermaster house 2* (p. 522). 
******* 

Mr. Stripling. Could you elaborate on the military information which you 
secured from the Silvermaster group? 

Miss Bentlet. Well, the military information came largely from George 
Silverman and Ludwig Ullmann; and, as I said, it was information of the most 
varied things you could think of. We had complete data as to almost all of the 
aircraft production in the country, as to types, how many were being produced, 
where they were allocated, and so on. We had all sorts of inside information 
on policies of the Air Corps. As I said, we knew D-day long before D-day 
happened, and we were right. Practically all the inside policies that were going 
on inside the Air Corps. We got quite a bit of information about General 
Hilldring's activities. 

******* 

Mr. Stripling. What was the type of information that you got regarding 
General Hilldring? 

Miss Bentley. Mostly inside policy data on what we were planning in the 
way, as I said, of invasions and action in Europe •* (pp. 525-526). 

******* 

Miss Bentlet. All types of information were given, highly secret information, 
on what the OSS was doing, such as, for example, that they were trying to make 
secret negotiations with governments in the Balkan bloc in case the war ended, 
that they were parachuting people into Hungary, that they were sending OSS 
people into Turkey to operate in the Balkans, and so on. The fact that General 
Donovan was interested in having an exchange between the NKVD and the 
OSS * * *2i (p. 529). 

Mr. Mundt. What kind of information would he [Maurice Halperin] give you? 

Miss Bentlet. Well, in addition to all the information which OSS was getting 
on Latin America, he had access to the cables which the OSS was getting in from 
its agents abroad, worldwide information of various sorts, and also the OSS had 
an agreement with the State Department whereby he also could see State Depart- 
ment cables on vital issues ^^ (pp. 530-531). 

Miss Bentley told the Internal Security Subcommittee that — 

We were so successful getting information during the war largely because of 
Harry White's idea to persuade Morgenthau to exchange information. In other 
words, he would send information over to Navy, and Navy would reciprocate. 
So there were at least 7 or 8 agencies trading information with Secretary Mor- 
genthau (IPR, p. 422). 

She said that information from the White House "mostly on the 
Far East, on China" came from Michael Greenberg, who worked under 
Laucldin Currie, executive assistant to the President (IPR, p. 414). 

According to the Nixon memorandum^ 

Another member of this group who resides with Silvermaster is William L. 
Ullman, a major in the United States Army Air Force stationed at the Pentagon 
Building who has been responsible for the obtaining and photographing of classified 
Information regarding United States Government war plans and also reports of 

J* Seo footnote, p. 17. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 19 

the Federal Bureau of Investigation, copies of which had been furnished to G-2 
of the Army at the Pentagon Building (p. 72). 

Miss Bentley testified that Lauclilin Currie was a "full-fledged 
member of the Silvermaster group," who was used not only to "bail 
out" other members "when they were in trouble," but also to steal 
White House secrets for the Soviets. Most of these secrets, she said, 
were related to Ajnerica's far eastern afiairs. (Currie was President 
Roosevelt's adviser on these matters, having served as the President's 
personal emissary to Generalissimo Chiang Kai-shek.) On one 
occasion, according to Miss Bentley, Currie sent word tlirough George 
Silverman and Harry Dexter White that the United States was about 
to break a Soviet code (IPE, hearings, p. 243). 

THE PUMPKIN PAPERS AND AFTER 

In 1948 Wliittaker Chambers also reached an open hearing room 
with his story of the Ware group. As an eventual result of his testi- 
mony, he came forward with "hundreds of pages of confidential and 
secret documents." '^ These documents, he testified, had been 
delivered to him by Alger Hiss, Harry Dexter White, and other mem- 
bers of the underground Communist ring. 

Most of them had come from the State Department 10 long years 
before. Sumner Welles, who had been Under Secretary of State during 
this period, was asked his opinion of the importance of some of the 
docimients. Excerpts from his testimony tell their own story: 

Mr. Stripling. Mr. Welles, vrere any of these messages which I have shown 
you, would they be sent in code? Is there anything to indicate that they were 
sent in code originally? 

Mr. Welles. All of these messages, Mr. Stripling, originally were sent in 
code, and undoubtedly those marked "strictly confidential" or "strictly confiden- 
tial, for the Secretary," would presumably be sent in one of the most secret codes 
then in our possession. 

Mr. Stripling. Would the possession of the document as translated, along 
with the original document as it appeared in code, furnish an individual with the 
necessary information to break the code? 

Mr. Welles. In my judgment, decidedly yes ^^ (p. 1388). 

******* 

Mr. Hebert. * * * Mr. Welles, I understand your position as enunciated 
at the moment. May I ask you this: Were you the Under Secretary of State at 
the time these documents were received in the State Department? 

Mr. Welles. That is correct, sir. 

Mr. Hebert. And at that time would their release to the public, or their 
release to unauthorized hands, be prejudicial to the best interests of the Nation? 

Mr. Welles. In the highest degree prejudicial and in the highest degree danger- 
ous to the Nation's interests 2« (pp. 1389-1390). 

Mr. Nixon. Mr. Welles, in the case of a "strictly confidential for the Secretary" 
type of document, as I understand one of these documents was, at the time you 
were in the Department of State would such a document be kept in what you 
might term a certain type of file for safekeeping, and only one or more copies 
made? I wonder if you could enlighten us on that point. 

Mr. Welles. The distribution would have been extremely restricted, and as 
soon as the documents had been distributed to certain officials and read by 
those officials, they were supposed to be collected and taken to a section Qf the 
archives in the Department of State that was reserved for "strictly confidential" 
information 2« (p. 1390). 

Mr. Nixon. It is my understanding, following the question Mr. Hubert asked, 
that you have indicated not only were the two documents you have examined — not 

" Mr. Nixon's House speech, January 26, 1950. 
*«See footnote on p. 20. 



20 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

only would it have been prejudicial to the national interest to have released them 
then to an unauthorized person, but now, 10 years later, it would still be pre- 
judicial to the national interest to release those documents? 

Mr. Welles. In my judgment that is entirely correct, sir ^6 (pp. 1390-1391). 

When these documents were dehvered to Chambers, Alger Hiss and 
Harry Dexter White held relatively minor positions in the Govern- 
ment service. In the years that followed, as already noted, they 
gained entrance to the innermost command posts affecting American 
foreign policy. 

Dr. Edna Fiuegel, a former State Department foreign-affairs special- 
ist, was asked about Hiss' ultimate access to secret documents when 
she appeared before the subcommittee in the IPR hearings. 

Mr. Morris. What documents or what material would be available to him 
[Hiss] in that role? 

Miss Flxjegel. Everything that existed, 

Mr. Morris. Everything in the entire Department of the Inchest classification? 

Miss Fluegel. Yes. At that particular time, you see, postwar involved 
everything, economics, social, political. 

Senator Watkins. Do you know that of your own personal knowledge? 

Miss Fluegel. Yes. You see, everything, every single decision — at that time, 
they had this top Secretary's Committee which was the final place where policy 
decisions were made, and it really operated then. So th-at eveiy paper on every 
subject requiring top policy decision came to it, and Mr. Hiss was ex oflicio a 
member of that committee. 

Senator Watkins. And all that material was then available to him as it was 
to the members of the committee? 

Miss Fluegel. That is right 2? (p. 2838). 

THE DESIGN 

The design of Communist penetration testified to in past years by 
Elizabeth Bentley, Whittaker Chambers, Louis Budenz, Nathaniel 
Weyl, and others, was clarified and substantiated by the documents 
adduced in the Senate Internal Security Subcommittee's hearings this 
year. All of the Government emplo^^ees exposed by these witnesses 
were threads in this design. 

When the principal concern of Government was economic recovery, 
they were in the Agricultural Adjustment Administration, the Works 
Progress Administration, the National Recovery Administration, and 
new sections of old departments. Durmg the war, they joined such 
wartime agencies as the Board of Economic Warfare, the Federal 
Economic Administration, the Office of Strategic Services, and the 
like. Toward the end of the war and in the postwar period, they were 
operating in the foreign policy field. At the end of the war, they were 
gravitating toward the international agencies. 

They colonized key committees of Congress (p. 340-345). They 
helped write laws, conduct congressional hearings, and write congres- 
sional reports. (See testimony of Henry Collins, pp. 1 ff; Charles 
Kramer, pp. 327 fF; Charles Flato, pp. 487 ff ; Frederick Palmer Weber, 
pp. 177 ff.) ^ 

They advised Cabinet members, wrote speeches for them, and rep- 
resented them in intergovernmental conferences. (See testimony of 
Harry. Alagdoff, pp. 286 ff; Edward J. Fitzgerald, pp. 241 ff; Harold 
Glasser, pp. 53 ff.) They staffed interdepartmental committees 
which prepared basic American and world policy. (See IPR hearmgs 
pp. 2823-28 37.) 

" Henrinps refrardlnc Communist rsplonacro In tTic ITnitcd States Government, pt. n, by Douse Un-Amer- 
ican Activities Committee, 80th Conj;., 2d soss. 
3? Institute of Pacific Relations hearin£s, pt. VIII, by Senate Internal Security Subcommittee, 82d Cong. 



ESTTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 21 

They traveled to ever}" continent as emissaries and representatives 
of the American people. They attended virtually every international 
conference where statesmen met to shape the future. 

In its report on the Institute of Pacific Relations, '° the subcommittee 
showed how a group of these individuals mfluenced the State Depart- 
ment with disastrous results to American far eastern policy. In the 
present inquiry we found other nests in the Federal Economic Admmis- 
tration, the Board of Economic Warfare, and those sections of the 
Treasury which formed American post^var foreign economic policy, 
particularly with regard to Germany. There had been nests in the 
original Agricultural Adjustment Administration, and in the national 
research project of the Works Progress Administration, both of which 
were supposed to help extricate the country from the terrible depres- 
sion of the 1930's. There was an interlacing combination of these 
people in almost every agency, both executive and legislative, which 
had to do with labor. 

"once we got ONE IN, HE GOT OTHERS" '^ 

The -subcommittee examined in public session 36 ^° persons about 
whom it had substantial evidence of membersliip in the Communist 
miderground in Government. All of them invoked the fifth amend- 
ment and refused to answer questions regarding Communist member- 
ship, on the grounds of self-incrimination. Aiany refused even to 
aclviiowledge their own signatures on official Government documents, 
in which they had sworn to nonmembership in the past. 

Almost all of the persons exposed by the evidence had some connec- 
tion which could be documented with at least one — and generally 
several — other exposed persons. They used each other's names for 
reference on applications for Federal emplo^Tnent. They hired each 
other. They promoted each other. Thc}^ raised each other's salaries. 
They transferred each other from bureau to bureau, from depart- 
ment to department, from congressional committee to congressional 
committee. They assigned each other to international missions. 
They vouched for each other's loyalt}^ and protected each other when 
exposure threatened. They often had common living quarters. 
There was a group that played handball together. There was another 
group whose names appeared together in a telephone finder. 

In addition to those witnesses called to the stand in this series of 
hearings, the subcommittee also studied the records of those who had 
appeared previously before this, or other congressional bodies. Some 
of these likewise invoked the fifth amendment. Others were persons, 
like Alger Hiss and William Remington, who had denied the testimony 
of their secret Communist membersliip and ultimately were convicted 
of perjury. The employment record of Virginius Frank Coe, who 
denied Communist membership in 1948 and invoked the fifth amend- 
ment 4 years later, was also scrutinized. So was that of the late 
Harry Dexter White, who died shortly after denying the Bentley and 
Chambers testimony of 1948, but later was clearly implicated when 
notes in his own hand were found among the Chambers documents. 

2' S. Kept. No. 2050, 82ri Cong.. 2d sess. 
" Bentley testimony, IPR, p. 417. 

'" Including 10 former Government employees who were heard In hearings on Subversive Influence in 
the Educational Process. 



22 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Virtually all were graduates of American universities. Many had 
doctorates or similar ratings of academic and intellectual distinction. 
Eleven had been or still are teachers. 

THE WITNESSES 

All who invoked the fifth amendment were unyielding, uncoopera 
tive and even abusive of the subcommittee. All assumed a cloak of 
innocence that was inconsistent with the record and with their refusals 
to testify. Almost typical was the testimony of Frederick Palmer 
Weber who, despite his long Government service, refused on Consti- 
tutional grounds to tell of his relations with the Soviet satellite em- 
bassies in Washington. In the course of his testunony, the following 
interesting exchange took place: 

Mr. Weber. You see, I am a Virginian, born and raised in Virginia, and my 
people fought for the Confederacy and I grew up under Thomas Jefferson's 
shadow and I would rather die than take away any man's right to hold any 
political opinion whatsoever that he so chooses on the basis of his own reading 
and understanding. I wouldn't do it. I wouldn't consent to it and I would not 
penalize any man for his particular opinions (p. 190). 

5fl Jfi IjC '(• Sp •P 'P 

Mr. Morris. I would like to revert back a little bit. You made the statement 
in the course of your testimony here today that you would at no time object to 
anyone's making a speech or exjDressing his views under any circumstances. Do 
you recall that you were active in a protest strike against the appearance of 
Mme. Tatiana Tchernavin while at the University of Virginia? 

Mr. Weber. I will plead my privilege. 

Mr. Morris. Did you not protest the appearance of that woman because she 
was considered anti-Soviet at that time? 

Mr. Weber. I will plead my privilege (p. 193). 

Edwin S. Smith, once a member of the National Labor Relations 
Board, wrote a letter in 1940 to the Honorable Howard W. Smith, 
chairman of the Special House Committee to investigate the Board: 

* * * I take this opportunity to deny that I am now or ever have been a member 
of the Commimist Party; that I do now hew or ever hewed to the party line; that 
I favor or ever have favored a line of policy which paralleled the policy laid down 
by Ralph Ambler, William Foster, P'arl Browder, and every member of the 
Communist Party; or that my sympathies are or ever have been with the Com- 
munist groups. 

I hereby request that this letter be printed in the proceedings of the committee. 
I am quite willing to api^ear and testify before the Committee concerning these 
matters. 

In 1948, Smith was identiiied by Louis F. Budenz as a Communist in 
sworn testimony. When asked about this and other evidence before 
this subcommittee in 1953, he invoked his privilege under the fifth 
amendment. He was also confronted with his own 1940 statement, 
and questioned by the subcommittee regarding it: 

Mr. Morris. Was that a truthful letter? 

Mr. Smith. I would say in respect to that letter for the purposes of my ap- 
pearance before this committee I do not care to answer your question on the 
same grounds that I have alleged before (pp. 557-558). 

Since his departure from Government service. Smith has taken off 
his mask and become an official propagandist for the Soviet Govern- 
ment, as American agent of Sovfoto, a Soviet agency, and a long list of 
Soviet and Chinese Communist principals. In this capacity, among 
other duties, he distributes photographs purporting to show that 
American troops have been engaged in germ warfare in Korea (p. 569). 

During the Institute of Pacific Relations hearings, an IPR writer, 
whom the subcommittee sought to subpena, was Israel Epstein who 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 23 

resided in New York between 1945 and 1950. In the course of the 
hearings, Edward C. Carter, Secretary General of tiie Institute, was 
shoA\Ti to have been engaged in devising ways and means of having 
Epstein's book The Unfinished Revokition in China read by the Secre- 
tary of State George C. Marsliall, John Foster Dulles, and other 
leading policymakers of our Government. Epstein had been identified 
bA^ Miss Bentley and other witnesses as a Communist agent. 

"An Associated Press story, dated July 29, 1953, with a dateline 
of Panmunjom, reported that Epstein turned up as a witness to the 
signing of the Korean armistice. He had arrived there in company 
with Communist correspondents Alan Winnington, of the London 
Daily Worker and Wilfred Burchett of the Paris Daily L'Humanite, 
from Comnumist truce headquarters at Kaesong. According to the 
dispatch, Epstein described himself as a stateless person who went 
to Communist China in 1950, 

THE SAME WITNESSES BEFORE THE F. B. I. 

By way of corroborating the impressive evidence the subcom- 
mittee had received concerning the witnesses appearing before this 
and certain other congressional committees, the subcommittee asked 
the Federal Bureau of Investigation if it interviewed these witnesses. 
Thirty-five cases were selected at random. The FBI review of these 
35 cases shows the following: 

(1) Thirty-three of these individuals had some type of identification with the 
Communist Party. Of the remaining 2 persons 1 was reported as a Commu- 
nist sympathizer and the other as 1 who associated with Communists. 

(2) Of these 35 individuals 7 had appeared before a congressional committee on 
a prior occasion. They proved uncooperative before the committee on each 
appearance. 

(3) All 35 were interviewed by FBI agents; 26 were interviewed before their 
appearance before the congressional committee; 9 were interviewed subsequent 
to their congressional appearance. 

(4) Of the 35 interviewed by the Bureau, 28 flatly refused to talk to agents. 
Of the 7 that did talk to agents, 3 denied allegations as to their Communist 
connections. They were not under oath. 

One refused to deny or affirm Communist Party membership and refused to 
make any statement. 

One denied knowing he was engaged in espionage activity from 1939 to 1945. 
On a subsequent interview he refused to talk on the grounds of his privilege against 
self-incrimination. 

One furnished some information about communism but did not admit Commu- 
nist Party membership. On a subsequent interview he refused to answer any 
questions. 

One gave seemingly false information regarding his knowledge of a certain 
individual. On a subsequent interview 2 years later he refused to talk. 

(5) The 35 uncooperative individuals refused to answer questions not only 
about their own Communist affiliations but about communism in general. They 
refused to cooperate in any way with the congressional committee. 

Ten out of the thirty-five individuals were called before congressional sessions 
prior to the outbreak of the Korean war in June 1950. All 10 were uncooperative. 
Of these 10, 8 were called to testify after the outbreak of the Korean war; they 
remained uncooperative. 

Three out of the thirtj'-five individuals were called before an executive session. 
They refused to cooperate. Of these 3, 2 were then called before public sessions; 
again they refused to cooperate. 

FALSE SWEARING 

The record is replete with instances of identified Communists, 
appearing before the subcommittee and invoking their privilege 
against self-incrimination in the face of the evidence, who have sworn 

S6548'— 53- i 



24 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

on Government applications they have never been members of the 
Communist Party. In one case the subcommittee had as many as 
14 affirmations ^^ made by one such witness, denying Communist 
membership. In many of the cases it was apparent to the subcom- 
mittee that there was false swearing when the oath was taken. But 
under the law at the time, the statute of limitations provided that 
no action could be initiated after 3 years from the commission of 
that offense. The subcommittee feels that the seriousness of false 
swearing on membership in an organization, an affiliate of which has 
been killing our troops in Korea, is certainly of sufficient seriousness 
to warrant extension of the time within which the crime can be 
prosecuted. And if the time is extended, a Government employee 
would weigh more seriously his sworn denial. 

The subcommittee has had considerable experience with the diffi- 
culty of establishing Communist Party membersliip from the testi- 
mony of recent defectors from the conspiracy. In its report of July 17, 
1953, on subversion in education, the subcommittee observed: 

The length of time involved for a Communist to make a complete break with 
the organization and its ideology and to acquire the outlook necessary to reveal 
the details of his participation in the Communist Party was such that it was 
impossible to determine from ex-Communists the present status of the infiltration. 
This is so because communism so pervades the whole being of an individual 
Communist that it is not easily or quickly put aside. 

Bella V. Dodd, for instance, broke with the Communist Party in 1948. She 
testified that it was not until 1952 that she became sufficiently disentangled, 
emotionally, from her Communist ties to see her way clear to testify before a 
Senate committee. But by that time her competency to testify to direct events 
after 1948 had vanished, because she no longer had access to Communist secrets 
after her defection. The subcommittee recognized that her interpretations of 
events between 1948 and 1953 were those of an expert because of her experience 
but were in no sense testimony of an active participant (p. 520, education 
hearings). 

Consequently, it is an exceptional case when an ex-Communist can 
testify to another's Communist membership less than 3 years back. 

The subcommittee also recognized the complete inadequacy of cer- 
tain Government application forms. The form used by the Office of 
War Information asked an employee if he were presently a Communist 
Party member (p. 794).^^ A Communist could with impunity answer 
no to this if he effected a tactical resignation from the Communist 
Party the day of the signing of the form and rejoined the next day. 
The experience of Government agencies in enforcing the Taft-Hartley 
non-Communist affidavits shows how resourceful Communists are on 
this issue. Even if the element of a tactical resignation were not 
present, the prosecution agency would have to prove a person to be a 
Communist at the particular moment of signing to punish a violation 
of the regulation. This is vhtually an impossible task.^^ 



WARNINGS IGNORED 

The subcommittee sought to determine precisely what aspect of the 
loyalty machinery failed, and allowed so many Soviet agents to remain 

31 See tpstimony of Charles S. Flato, pp. 4S7 ff. 

32 Furthermore, there was a vagueness and lack of precision in some of the application forms that tne 
subcommittee encoimtercd. 

33 The climate of the period in which Communist infiltration made its pireatest headway is demonstrated 
by the following statement by Alfred IClein, Chief General Counsel of the United States CivU Ssrvice 
Commission, in a case under litigation: 

"If I had to express my opinion as to whether the applicant is a Communist, my reply would be m the 
affirmative. However, I am constrained to recommend that the applicant bo rated eligible." (S^e Myers 
V. VnUed States (272 U. S. 50; 30 Op. Atty. Gen. 79, 83).) 



INTERLOCKESTG SUBVERSION IN" GOVERNMENT DEPARTMENTS 25 

in positions of influence in the United States Government, in the face 
of impressive derogatory security information. Tlie subcommittee re- 
viewed the evidence with a view toward determining tliis. There is 
ample evidence that the Federal Bureau of Investigation and other 
agencies learned the underlying facts of the Communist conspiracy 
and time and time again performed their duty and notified the proper 
administrative agencies of this information. 

The Chambers information on Alger Hiss, as we set forth above, 
was kno^vn to the Federal Bureau of Investigation some j^ears before 
1945. The Nixon memorandum reveals that by November 1945 
there were three distinct sources of information on Hiss' connection 
with the Communist underground — Gouzenko, Bentley, and Cham- 
bers^and j^et, it was not until after the House Un-American Activities 
Committee had its hearmgs in 1948, 3 years later, that an}^ action was 
taken on the Hiss case. This same inactivity was apparent in the 
cases of other persons mentioned as Communist agents in the 1945 
Nixon memorandum, nam el}', Harold Glasscr, Nathan Gregory 
Silvermaster, Edward J. Fitzgerald, Harry Alagdoff, and others.^* 
These people stayed in their jobs, received promotions, and influenced 
policy for several years after impressive information had been 
marshalled. 

In the case of this subcommittee's inquiiy into American citizens 
at the United Nations, the Federal Bureau of Investigation, in virtually 
all the 26 cases, had transmitted derogatory information to the proper 
authorities in the State Department years earlier. These people 
had also appeared before a Federal gi^and juiy in New York which had 
this derogatory evidence. Yet, it was not mitil the Internal Security 
Subcommittee brought this information forth in its public hearings 
in the fall of 1952, that any action was taken to remove these obvious 
secmity risks from their positions of trust and influence. 

It is the function of the Federal Bureau of Investigation to uncover 
and compile security information and make it available, without 
evaluation and without recommendation, to the proper executive 
agencies. The Federal Bureau of Investigation cannot expose and 
cannot force action once it has reported the results of its investigation. 
This fact is basic in the understanding of the function performed by a 
congressional committee. 

The breakdown in the loyalty machinery, encountered in this series 
of hearings, was basically not in the detection of evidence. Primarily, 
the breakdown came in the failure on the part of the responsible 
executive agencies to act on the information which was available. 

There is a mass of evidence and information on the hidden Com- 
munist conspiracy in Government which is still inaccessible to the 
Federal Bureau of Investigation and to this subcommittee because 
persons who know the facts of this conspiracy are not cooperating 
with the security authorities of the country. In the course of its 
report on Subversion in the Educational Process, this subcommittee 
pointed out that: 

* * * . If all the secrets now possessed by ex-Communists were made avail- 
able to the Federal Bureau of InvestiQ;~tion and this committee, long strides 
would have been taken to expose fully the Communist conspiracy in the United 
States (p. 8, interim report 1). 

'< The subcommittee learned during this series of hearings that the Federal Bureau of Investigation had 
received derogatory security iaformation and had conducted investigations during 1941 and 1942 on Alger 
Hiss, Harry Dexter White, Harry Magdofl, Maurice Halperin, and Harold Glasser. 



26 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

The subcommittee recognizes not only that ex-Commimists could 
be a source of much additional information, but, in addition, many 
Government workers who have always been loyal to the United 
States Government did learn by their contact with conspirators some 
details of subversion. If these people wUl come forward, either to 
the Federal Bureau of Investigation or to the congressional com- 
mittees, great strides will be made in protecting the security of this 
country. 

The subcommittee is aware of the campaign being conducted against 
the fact-gathering agencies of the Government, both of the executive 
and legislative, and must deplore the inroads this campaign has 
made.^^ 

This campaign is based, in part, on misstatements of the powers and 
functions of the respective security agencies which are clearly not 
understood. 

NET IN THE STATE DEPARTMENT 

During the course of the hearings, the subcommittee encountered 
significant infiltration into the following agencies: The Coordinator 
of Information; the Office of Strategic Services; the Office of War 
Information; the Board of Economic Warfare; the Foreign Economic 
Administration; and the Office of Inter- American Aft'airs. These 
were all war agencies and their personnel was often assembled in the 
haste that wartime m-gency impelled. It was apparent to the sub- 
committee that either these agencies had no security safeguards 
whatever, or else had no disinclination toward hiring Communists. 
There was evidence concerning scores of such employees whom the 
subcommittee never had an opportunity to hear, so pressing were its 
time exigencies. It did hear in open session 25 persons from these 
agencies, and they invoked their privilege against self-incrimination 
rather than deny the subcommittee evidence of their Communist 
Party membership. The positions that these people held were often 
important and at a policymaking level. 

In 1945, there emanated from the Bureau of the Budget a plan that 
provided that the personnel of all these agencies be consolidated and 
infused into the State Department. J. Anthony Panuch, the State 
Department Deputy Assistant Secretary who was designated by 
Secretary of State James F. Byrnes to supervise this consolidation, 
testified, on June 25, 1953, that it was this transfer of personnel, 
involving as it did vast numbers of what he termed "unscreened per- 
sonnel", that changed the entire complexion of the State Department 
and still was having an adverse effect, secm-itywise, on the present 
Department of State. 

Mr. Panuch. In September of 1938 I became special counsel to the Securities 
and Exchange Commission in corporate reorganizations (p. 842). 

******* 



35 In a letter to William Frauenglass, a tencher who Invoked his constitutional privilese regarding his 
Communist affiliations before this subcommittee, made public on June 11, 1953, Dr. Albert Einstein, Prince- 
ton scientist, urged that "Every intellectual who is called before one of the committees ought to refuse to 
testify." 

Max Lowenthal, whom several witnesses before our subcommittee refused to acknowledge as an associate 
on grounds that it might incriminate them, and who was the subject of a hearmg before the House Com- 
mittee on Un-American Activities on September 15, 1950, is the author of a book attacking the Federal 
Bureau of Investigation. The book was favorably reviewed in the Communist magazine,-Poii/JcaZ Affairs 
for Janvnry 1951, imder the title, "J. Edgar Hoover's American Gestapo." 

Carl W. Ackerman, dean of the faculty of journalism at Columbia University, announced that he was 
discontinuing his practice of cooperating with Federal, State, and police investigating agencies except on 
written request and on advice of counsel (the Bulletin of the American Society of Newspaper Editors, 
April 1, 1953). 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 27 

In October of 1945, upon Mr. Byrnes' request, I joined him in the State Depart- 
ment in the capacity of Deputy Assistant Secretary of State for Administration 
and as coordinator of the merger of the Department under the throe f]xecutive 
orders which blended with the Department the wartime agencies operating in the 
foreign field. 

These agencies were the Office of War Information, the intelligence units of the 
Office of Strategic Services, the OfFice of Inter-American Affairs, the Foreign 
Economic Administration, and the Office of Foreign Liquidation Commissioner. 
There were also certain units of the War Department General Staff concerned 
with occupation planning (p. 842). 

******* 

Mr. Morris. What was the origin of this particular reorganization? How did 
that get its start? 

Mr. Panuch. That was in the Bureau of the Budget (p. 844). 

******* 

Mr. Morris. Will you tell us, Mr. Panuch, how this reorganization became 
eflfective? 

Mr. Panuch. It added to the Department functions which had theretofore 
never been in the Department ; specifically, propaganda functions in the Office of 
War Information * * * (p. 849). 

******* 

The Office of Strategic Services brought in about 1,000 people from their 
Research and Intelligence Branch, and they were to be used under the President's 
order to create the nucleus of the centralized intelligence operation (p. 849). 

****** 4: 

Mr. Morris. Mr. Panuch, to your knowledge, and drawing on your own ex- 
perience, were there any political changes to be wrought by this reorganization? 

Mr. Panuch. Well, it was a thoroughgoing reorganization of the Department 
by the addition of functions which necessarily changed the political or rather the 
policy structure of the Department. 

The Intelligence directive to set up coordinated intelligence on a national level 
in a centralized unit of the Department presented a problem as to whether your 
tail would be wagging your dog; in other words, whether the intelligence units, 
coming in from these agencies, which would be the focal core of national intel- 
ligence organization, would, by a preemption of your high-level estimates which 
go to the Secretary of State and the President and the National Security Council, 
be really exercising an influence over policy beyond that which was traditionally 
exercised by the Foreign Service of the United States, through the geographic 
divisions of the Department (p. 850). 

******* 

* * * Subsequently the President issued a directive to Secretary Byrnes, direct- 
ing him to undertake the coordination of all foreign intelligence under the leader- 
ship of the State Department. I believe that that was on September 20, 1945. 

At the same time there was before the President a proposed directive for setting 
up a Central Intelligence Agency, which was submitted by the Joint Chiefs of 
Staff, and the Department then had the problem of advising the Secretary of 
State and the President as to what combination or correlation of these two en- 
tirely different concepts of mobilizing foreign intelligence at the national level 
should be blended into a forward oiDcration (p. 849). 

******* 

Senator Welker. How did the reorganization which you have described, 
Mr. Panuch, seek to change the level of control in the various policy agencies? 

Mr. Panuch. Senator, if I may offer a correction before answering your ques- 
tion, as to semantics, I know in Government, everybody talks about levels, but 
I would Mke to say "pattern." 

Senator Welker. Let us call it "pattern." 

Mr. Panuch. If I may, sir; I think the pattern, the essential part of the pattern 
was to shift your policy formulation, the essential basis on which your ultimate 
policy estimates are made into a central intelligence group which would over- 
balance your policy offices of the Department. In that way, while there would be 
no change in level, there would be a change in pattern impetus, control, and 
direction. The other change, of course, was the historic change which was initi- 
ated by our entry into the United Nations Organization, which placed a large 
part of foreign policy on an international basis rather than on the traditional 
country-to-country or bilateral basis. So that at the end of the war you would 
have had three groupings of policy formulation: Your international work in the 



28 INTERLOCKLNG SUBVERSION IN GOVERNMENT DEPARTMENTS 

United Nations; the liquidation of the war through the Council of Foreign Minis- 
ters, involving the Big Four; and, lately diplomatic relations with countries which 
were neither in the United Nations nor in the Council of Foreign Ministers group; 
for instance, Franco's Spain (p. 854). 

The Chairman. I would like to make one point here. In relation to your 
dealings with and the recommendations of the Bureau of the Budget, is it your 
impiession that this same pro-Communist influence might have been there? 

Mr. Panuch. Well, sir, I don't know whether it was pro-Communist or not, 
but it was certainly pro-Soviet and pro-international (p. 898). 

In addition to the infiltration of the State Department through the 
medium of tliis merger,^^ the subcommittee encountered still other 
penetration into the State Department. Apart from the agents in- 
volved in this consolidation, the subcommittee heard eight other 
individuals who worked in the State Department identified as Com- 
munists in the course of the hearings. The positions that these 
people held were impressive. Some of their titles were: The Director 
of Office of Special Political Affairs; State Department representative 
in conferences regarding the American, British, Japanese Naval 
Limitation; Chief of the Division of Latin American Affairs; assistant 
in Division of Research for Europe; Director of the Office of Far 
Eastern Affairs; and Associate Chief in charge of economic planning 
in the Division of Special Research. 

The subcommittee admitted into evidence, during the course of the 
Panuch hearing, testimony given by A. A. Berle, Jr., former Assistant 
Secretary of State. 

Mr. Morris. Senator Welker made reference to testimony given by Berle 
before the House Un-American Activities Committee. 

Mr. Mandel, would you read that precise portion from that actual testimony? 

Mr. Mandel. It' is the testimony of Adolf Berlo, Jr., before the House Com- 
mittee on Un-American Activities, on August 30, 1948, published on page 1296 
of the hearings of that body: 

'Mr. Berle. As I think many people know, in the fall of 1944 there was a 
difference of opinion in the State Department. I felt that the Russians were 
not going to be sympathetic and cooperative. Victory was then assured, though 
not complete, and the intelligence reports which were in my charge, among other 
things, indicated a very aggressive policy not at all in line with the kind of coopera- 
tion everyone was hoping for, and I was pressing for a pretty clean-cut showdown 
then when our position was strongest. 

"The opposite group in the State Department was largely the men: Mr. 
Acheson's group, of course, with Mr. Hiss as his principal assistant in the matter. 
Whether that was a difference on foreign policy, and the question could be argued 
both ways; it wasn't clean cut, was a problem, but at that time Mr. Hiss did take 
what we would call today the pro-Russian point of view." 

Mr. Panuch. That is a fair statement of the situation in 1945, 1946, when I 
was in the Department. 

Mr. Morris. Based on vour experience in the Department? 

Mr. Panuch. Yes (p. 898). 

^ 4: :ic ^ 4: * 9): 



3« It should be noted that the Ramspcck Act of November 26, 1940, provided additional authority for 
blanketing in employees from newly created agencies into civil service. 

The 58th Annual Report of the U. S. Civil Service Commission for the fiscal year ending June 30, 1941, 
page .5, declared: "One of the most important statutes in the history of the Federal Civil Service is the 
Ramspeck Act of November 20, 1940, Public No. 880, 7Gth Congress, \vhich authorizes the President greatly 
to extend the scope both of the Civil Service Act and of the Classification Act * * *. Under the terms of 
Executive Order No. 8743 of April 23, 1941 the CivU Service Act will be extended on January 1, 1942 to the 
great majority of the positions to which the Ramspeck Act authorizes its extension and vacancies occurring 
in such positions during the period July 1, 1941 to January 1, 1942 must be filled in accordance with the Civil 
Service Act and rules, unless express permission is given by the CivO Service Commission for appointment 
without regard to the rules." 

Treasury Department recommendation for classification dated January 1, 1942 in the case of Harold 
Glasser states: "The employee named below, who, on July 1, 1941, occupied a positiori which has been 
brought into the classified service by operation of the Ramspeck Act, and Kxeeutive Order No. 8743, of 
April 23, 1941, and who on January 1, 1942, occupied a permanent position, is recommended for classification 
under section 1 of that order" (p. 94). 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 29 

Senator Welker. Mr. Panucli, a moment ago we referred to Mr. Acheson 
and his pro-Russian group in the State Department. I will ask you whether 
or not, in your opinion, that Acheson-Hiss pro-Russian group in the State Depart- 
ment contributed to the infiltration of Communists or Communist sympathizers 
within the State Department? 

Mr. Panuch. It is almost impossible to answer that, sir, responsively. 

I would say that the biggest single thing that contributed to the infiltration of 
the State Department was the merger of 1945. The effects of that are still being 
felt, in my judgment (p. 899). 

THE NET OVER THE TREASURY 

Harry Dexter Wliite, Frank Coe, Harold Glasser, Victor Perlo, 
Irving Kaplan, Sol Adler, Abraham George Silverman and William 
Ludwig Ullmann were employees of the Treasury Department during 
part or all of the period studied by the subcommittee. 

All these persons were named by both Miss Bentley and Chambers 
as participants in the Communist conspiracy. Perlo was identified 
also by Nathaniel Weyl. The names of Perlo, Adler, Silverman, and 
Ullmann turn up in the Nixon Memorandum of 1945. Several of 
those named were listed in the telephone finder of Nathan Gregory 
Silvermaster, identified by Miss Bentley in 1948 as the most important 
person she dealt with in the Government underground. 

The Kaplan story has already sho^vn the interlacing connections 
with White, Coe, Glasser, Silverman, and Ullmann. Kaplan's tre- 
mendous responsibilities for American occupation policy in Germany 
have also been set forth. 

How important were some of the others? 

The answer to this question, so far as Wliite is concerned, may be 
found in three Treasury documents. Here is the first, dated 8 da5^s 
after Pearl Harbor, and signed by Secretary of the Treasury Morgen- 
thau: 

December 15, 1941. 
treasury department order no. 43 

On and after this date, Mr. Harry D. White, Assistant to the Secretary, will 
assume full responsil^ility for all matters with which the Treasury Department 
has to deal having a bearing on foreign relations. Mr. White will act as liaison 
between the Treasury Department and the State Department, will serve in the 
capacity of adviser to the Secretary on all Treasury foreign affairs matters, and 
will assume responsibility for the nianagement and operation of the Stabilization 
Fund without change in existing procedures. Mr. White will report directly to 
the Secretary. 

Secretary of the Treasury. 
WNT.-aia 

Here is the pertinent paragraph from the second Treasury document 
which was dated February 25, 1943 and was sent to White by Secre- 
tary Morgenthau: 

Effective this date, I would like you to take supervision over and assume full 
responsibility for Treasury's participation in all economic and financial matters 
(except matters pertaining to depository facilities, transfers of funds, and war 
expenditures) in connection with the operations of the Army and Navy and the 
civilian affairs in the foreign areas in which our Armed Forces are operating or are 
likely to operate. This will, of course, include general liaison with the State 
Department, Army and Navy, and other departments or agencies and representa- 
tives of foreign governments on these matters. 



30 INTERLOCKESTG SUBVERSION IN GOVERNMENT DEPARTMENTS 

Here is the third, a compilation of the interdepartmental and inter- 
national bodies on which Assistant Secretary "Wliite was the official 
Treasury representatives: 

The Interdepartmental Lend-Lease Committee 
The Canadian-American Joint Economic Committee 
The Executive Committee on Commercial Policy 

The Executive Committee and Board of Trustees of the Export-Import Bank 
The Interdepartmental Committee on Inter- American Affairs 
The National Resources Committee 
The Price Administration Committee 
The Committee on Foreign Commerce Regulations 
The Interdepartmental Committee on Post- War Economic Problems 
The Committee on Trade Agreements 
The National Munitions Control Board 
The Acheson Committee on International Relief 
The Board of Economic Warfare 

The Executive Committee on Economic Foreign Policy 
The Liberated Areas Committee 
The O. S. S. Advisory Committee 
The U. S. Commercial Corporation 

The Interdepartmental Committee on Planning for Coordinating the Economic 
Activities of United States Civihan Agencies in Liberated Areas (exhibit 33) 

Wliite was also chief architect of the International Monetary Fund " 
as well as its first United States executive director. Miss Bentley gave 
the subcommittee an extraordinarily revealing glimpse of how White's 
hands played with the inner levers of American policy. 

Miss Bentley. No; the only Morgenthau plan I knew anything about was the 
German one. 

Senator Eastland. Did you know who drew that plan? 

Miss Bentley. Due to Mr. White's influence, to push the devastation of 
Germany because that was what the Russians wanted. 

Senator Ferguson. That was what the Communists wanted? 

Miss Bentley. Definitely Moscow wanted them completely razed because then 
they would be of no help to the allies. 

Mr. Morris. You say that Harry Dexter White worked on that? 

Miss Bentley. And on our instructions he pushed hard. (IPR p. 419.) 
******* 

Senator Eastland. What you say is that it was a Communist plot to destroy 
Germany and weaken her to where she could not help us? 

Miss Bentley. That is correct. She could no longer be a barrier that would 
protect the Western World. 

Senator Eastland. And that Mr. Morgenthau, who was Secretary of the 
Treasury of the United States was used by the Communist agents to promote 
that plot? 

Miss Bentley. I am afraid so; yes. 

Senator Ferguson. What do you mean by "I am afraid so"? 

Miss Bentley. Certainly Secretary Morgenthau didn't fall in with Communist 
plots. 

Senator Ferguson. But you know it to be a fact? 

Miss Bentley. I know it to be a fact. 

Senator Ferguson. You do not qualify it, do you? 

Miss Bentley. No, I don't qualify it. I didn't want to give the thought 
that he did it knowingly. 

Senator Smith. He was unsuspectingly used. 

Senator Ferguson. So you have conscious and unconscious agents? 

Miss Bentley. Of course, the way the whole principle works is like dropping 
a pebble into a pond and the ripples spread out, and that is the way we work. 

Senator Ferguson. Some are conscious and some are unconscious as to what 
they are doing? 

Miss Bentley. That is correct. * * * (IPR p. 420). 



" Post War Foreign Policy Preparation, a State Department publication p. 142. 



INTERLOCKESTG SUBVERSION IN GOVERNMENT DEPARTMENTS 31 

Five months after the Nixon Memorandum was circulated at top 
levels m the Government, White resigned his post as Assistant Sec- 
retary. He received the following letter: 

April 30, 1946. 

Dear Mr. White: I accept with regret your resignation as Assistant Secretary 
of the Treasury. 

My regret is lessened, however, in the knowledge that you leave the Treasury 
only to assume new duties for the Government in the field of international eco- 
nomics as the United States Executive Director of the International Monetary 
Fund. In that position you will be able to carry forward the work you so ably 
began at Bretton Woods and you will have increased opportunity for the exercise 
of your wide knowledge and expertness in a field wliich is of utmost importance 
to world peace and security. 

I am confident that in your new position you will add distinction to your already 
distinguished career with the Treasury. 
Very sincerely yours, 

Harry S. Trtjman. 

Glasser, as already indicated, went to Moscow with Secretary of 
State Marshall in March 1946, which was 4 months after the circu- 
lation of the Nixon memorandum. It will be recalled that in the 
same March, Glasser gave an E, for excellent, rating to Kaplan, 
after Kaplan had come home from Germany. Glasser was also the 
financial expert of the American delegation which helped form 
UNRRA. He was Treasury spokesman on this international body 
"throughout its whole life." In this capacity, he was one of those 
"with a predominant voice" in determining which countries should 
receive aid from UNRRA, and which should not. He testified that 
during this period, he was in constant consultation with Dean Acheson, 
wbo spoke for the State Department on UNRRA matters (pp. 63-66). 
When Glasser left the Government on December 23, 1947, the follow- 
ing letter was written on his behalf by Dean Acbeson: 

Mr, H. L. LuRiE, 

Executive Director, Council of Jewish Federation and Welfare Funds, Inc., 
165 West 46th Street, New York 19, N. Y. 

Dear Mr. Lurie: I knew Harold Glasser during my 7 years in the State 
Department as Assistant Secretary and Under Secretary. We worked together 
on the problem of foreign funds control and other economic warfare matters. 
And he was a inember of the United States delegation, of which I was chairman, 
to the first and second UNRRA Council meetings. During these council meetings 
I was impressed with his technical competence and his ability to work under the 
strain of long hours and difficult negotiations, carrying a large part of the burden 
of the financial committee of the council. He was a good working companion, 
maintaining an extraordinary evenness of temper and good humor under what 
were sometimes very trying circumstances. I am sure that he is able to approach 
problems in a well-organized and analytical manner, and that you will find him 
a first-rate economist. 

Sincerely yours. 

Dean Acheson. 

Frank Coe followed White as Director of the Treasury Depart- 
ment's Division of Monetary Research. A few days after Hitler 
invaded the U. S. S. R., the Treasury sent Coe to London "to advise 
and assist Ambassador Winant on financial and other related economic 
matters" (exhibit 301). 

Here is a portion of the testimony given by Coe when he appeared 
before us last year: 

Senator O'Conor. Mr. Coe, are you presently engaged in subversive activities? 
Mr. Coe. Mr. Chairman, under the protection afforded me by the fifth amend- 
ment, I respectfully decline to answer that question (U. N., p. 24). 



32 DSTTERLOCKING SUBVERSION EST GOVERNMENT DEPARTMENTS 

Perlo's duties and responsibilities at the Treasury included the 
following: 

To serve as an adviser and be responsible for recommending actions required in 
the following fields: 

(a) Aspects of domestic economy in relation to international financial afl"airs 
such as the supply of monej^ and its speed of circulation, bank deposits, and 
lending activity, the volume of private savings and their absorption through 
domestic investments, production, and employment trends in industries with 
important potential export markets. 

(b) The effects on domestic economy of current international financial devel- 
onments and the prospective effects of international financial proposals * * * (p. 
402). 

The man who wielded this power in the Government of the United 
States is now an open propagandist for the Soviet world conspiracy. 
His book, American Imperialism, was brought out by International 
Publishers, which is the official Communist Party publishing house in 
the United States, The book was given the highest praise that com- 
munism bestows when the Daily People's World, west coast "mouth- 
piece" of the party, hailed it with these words: "Perlo brings Lenin on 
imperialism up to date" (p. 406). 

Adler lived with Glasser when both were faculty members at the 
People's Junior College in Chicago. Adler was representative of the 
Treasury Department in China after March 1, 1944. He returned to 
duty in Washington October 5, 1949.^^ 

Adler was nominated by the Treasury in 1942 as the American 
representative on the American-British-Chinese Stabilization Fund. 
The function of this fund, presumably, was to save Nationalist China 
from the inflation that did so much to weaken it as it faced the 
Communist onslaught. 

In this connection, the subcommittee calls attention to a note found 
among the papers produced by Whittaker Chambers which was written 
in Harry Dexter White's own hand: 

We have just agreed to purchase 50 million more ounces of silver from China. 
China will have left (almost all in London) about 100 million ounces of silver. 
Her dollar balances are almost gone. 

"Vllien Mr. Nixon introduced this note on the floor of the House on 
January 2G, 1950, he said: 

I discussed this excerpt with a man whose judgment I value in analyzing 
such documents, and he informed me that that information in the hands of 
individuals who desired to eml^arrass the Chinese Government would be almost 
invaluable. 

THE NET OVER CAPITOL HILL 

On February 8, 1947, the late Senator Robert M. La Follette, of 
W^isconsin, wrote an article for Collier's magazine entitled, "Tiu'n the 
Light on Communism." Collier's introduced the article with this 
statement: 

The former Senator from Wisconsin speaks as one of America's most noted 
liberals in outlining his program for fighting a serious menace. 

On the basis of what he said in 1947, it had been the subcommittee's 
intention to ask Senator La Follette to appear before it. His re- 
grettable death interfered with the subcommittee's plan. However, 
At is pertinent to examine his 1947 article in the light of what has 

" Hr'irinTS reprfirdino; Communism in the U. S. Govornmpnt before the House Committee on Un-Ameri- 
can Activities (81st Cong., 2d sess., p. 17i,G). 



INTERLOCKING SUBVERSION EST GOVERNMENT DEPARTMENTS 33 

happened since then. Here are some significant paragraphs from 
Senator La Follette's article: 

I know from firsthand experience that Communist sympathizers have infiltrated 
into committee staffs on Capitol Hill in Washington. Frequently they have 
been associated with desirable legislation and worthy objectives, but always 
ready to further their own cause at the expense of the legislation they were 
advocating. A few years ago, when I was chairman of the Senate Civil Liberties 
Committee, I was forced to take measures in an effort to stamp out influences 
within my own committee staff. 

During the late Congress, the staff of a subcommittee of the Senate Committee 
on Education and Labor was infiltrated by fellow travelers. The staff of the 
Pepper subcommittee on Wartime Health and Education was diligent in its 
efforts to take matters into its own hands, and probably did great harm to the 
cause of improved health in this country by its reckless activities. I was ap- 
pointed a member of this subcommittee, but I resigned from it later — partially 
because of the pressure of other duties (the congressional reorganization bill 
was taking much of my time) and partially because I did not want to be asso- 
ciated with a program of a staff in whom I could not have complete confidence. 

Later, the staff released a report and recommendations on health legislation 
under highly irregular procedure that prompted severe criticism on the floor of 
the Senate. The report was a favorable recommendation on a highly contro- 
versial national health program. It was released with the implication that it 
had the approval of the sub and full committees. 

Similarlyj the Kilgore subcommittee on War Mobilization (of the Military 
Affairs Committee) and the Murray Special Committee on Small Business had 
staffs that many Senators believed had been infiltrated by fellow travelers. 

One of the important ways in which fellow travelers on comrhittee staffs have 
carried on their activities is through the illicit use of committee information. 
In general, committee staffs participate in executive sessions and have access to 
committee files, which frequently include private documents which the committee 
has obtained under subpena on recommendation of the staff. Unscrupulous 
employees can give out this information to friends, as a private spying system 
against their enemies as an advance tip-off of committee thinking, or as a means 
of bringing pressure to bear where it might effect a desired course of action. 

On several occasions I have had the revealing experience of receiving prompt 
protests and advice from strange and remote sources the day after I had voiced 
anti-Communist sentiments or voted contrary to the prevailing Comm_unist 
Party line in executive sessions that were wholly unreported in the press. Such 
reactions could not occur without an effective grapevine. 

Even more insidious is the practice of coloring the information that is dis- 
seminated so that local organizations, party-line newspapers, periodicals, and 
circular letters can incite and inspire any desired reaction by high-pressure propa- 
ganda techniques. This device is most effective under conditions where the 
legislation or parliamentary situation is highly complex. 

******* 

With regard to minimum wage and FEPC legislation, it is my personal convic- 
tion that the Communists and fellow travelers who lobbied on these bills preferred 
to get no bills at all. I learned after the completion of the Senate hearings on 
the minimum wage bill that hearing schedules had been rigged to the end that 
testimony from anti-Communist sources on the bill was not taken, or else re- 
ceived merely as a statement for the record rather than as testimony before the 
committee. Committee employees are well aware that testimony and information 
can be made to appear either important or unimportant depending on how it is 
released or scheduled. 

* * * * 4: * * 

The difficulties of proving disloyalty charges are great, and the civil rights of 
employees must be protected from witch hunts. It is clear, however, that the 
Government has not made very serious efforts to investigate questionable employ- 
ees. In 1945, v/hen the civil service "suitability" investigations were at a peak, 
only about 1 person out of every 25 placements was checked. Only 74 persons 
out of several million placed were declared ineligible on grounds of disloyalty. 

Nine of the witnesses who appeared befor? the subcommittee and in- 
voked their privilege against self-incrimination had been attached to 
committees in one or both Houses of Congress. They are John Abt, 



34 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Henry Collins, Charles Flato, Charles Kramer, Harry Magdoff, 
Margaret Bennett Porter, Herbert S. Scliimmel, Alfred Van Tassel, 
Frederick Palmer Weber, and Allan Rosenberg, who invoked his priv- 
ilege against incrimination before the HUAC, and Alger Hiss also 
served on Capitol Hill. 

Abt was chief counsel to Senator La Follette's own subcommittee 
on Civil Liberties (p. 645). ^ 

Alger Pliss was a legal assistant to the Senate Committee Investi- 
gating the Alunitions Industry. 

Allan Rosenberg was the first man hired under Abt on this com- 
mittee and followed him into the National Labor Relations Board, 
where he ultimately became senior attorney in the Litigation Division. 

Flato was public relations officer of the La Follette com.mittee. He 
was also attached to the House Committee on Interstate Migration 
(pp. 490, 491). 

Schimmel was also on the staff of this committee (report of the sub- 
mittee January 2, 1953, on Activities of United States Citizens Em- 
ployed by the United Nations, p. 5). 

Kramer was a field investigator for the La Follette committee, 
"working on the reports" and "preparing for hearings." He also had 
"final responsibility" for the reports of the Senate Subcommittee on 
Technical Mobilization and was attached to the staff of the Senate 
Subcommittee on Wartime Health and Education (pp. 339, 371, 366). 

Magdoff was assigned by the then Secretary of Commerce, Henry 
A. Wallace, to serve as consultant with the Senate Special Committee 
To Study Problems of American Small Business (p. 316). 

Van 'Tassel .was on the staff of the same committee (report of this 
subcommittee January 2, 1953, on Activities of United States Citizens 
Employed by the United Nations, p. 6). 

Collins was director of the Senate Small Business Committee and 
coordinator of field hearings for the House Committee on Interstate 
Migration (pp. 33, 50). 

Weber was attached to the staffs of the House Committee on Inter- 
state Migration and the Senate Subcommittee on Technical Mobiliza- 
tion (pp. 178-180). 

Mrs. Porter was a member of the staff of the Senate Committee on 
Interstate Commerce (p. 736). 

It is important to note that four of them, Abt, Hiss, Kramer, and 
Collins, were named by Whittakcr Chambers and Nathaniel Weyl as 
members of the Ware cell, which was the general staff of the original 
Communist underground in Government. Miss Bentley also testi- 
fied that Abt and Kramer were part of the Soviet espionage ring which 
she served in the 1940's. 

It will be recalled that Senator La Follette named his own subcom- 
mittee, as well as three of the other bodies named above as among 
those congressional committees which had been infiltrated. It will 
also be recalled that he charged this infiltration had occurred through 
assignment of persons from executive agencies of the Government. 
Other charges by Senator La Follette included the accusations that 
a committee staff released a report on legislation "under highly ir- 
regidar procedure," that they "carried on their activities through the 
illicit use of committee information and gave out this information to 
friends as a private spying S3^stcm against their enemies or as a means 
of bringing pressure to bear where it might affect a desired course of 
action." Senator La FoUette also cited the "practice of coloring the 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 35 

information" for party-line purposes and the rigging of hearing sched- 
ules to shut off anti-Communist testimony. 

In other words, the work of these staff members was slanted in every 
way possible to force congressional opinion and reports in directions 
they would not otherwise have taken. 

Against this background, the subcommittee attaches great signifi- 
cance to testimony and documents regarding the functions fulfilled by 
the above individuals during the years of their congressional activities. 

Here are the official descriptions of Flato's work with the La Follette 
committee: 

General field investigation in labor relations matters; the examination of docu- 
ments, records, accounts, etc.; interviewing of witnesses; preparation of reports, 
memoranda, and case precis; tlie writing; of hearing briefs and of sections of the 
committee's reports to tlie Senate (p. 512). 

Under general supervision witli wide latitude for unreviewed action or decision 
to serve as information and public relations adviser to the United States Sub- 
committee of Labor and Education, particularly on all phases of the pendiU;? 
investigation in California. Individually, or with trained assistants, to prepare 
press releases, magazine, and newspaper articles on committee activities, and 
arrange for their distribution and use; to meet newspaper and ma'^cazine editors, 
editorial WT-iters, civic and service organizations, et cetera, for the purpose of 
explaining the aims and objectives of the committee and to see that unbiased and 
accurate information is dispensed concerning its activities; to advise committee in 
public relations. In addition, to prepare the manual of procedure by which 
committee meetings, public hearings, and other activities will be governed, and to 
be in general charge of the two offices to be established in Caliiornia (p. 490). 
******* 

Here is a description of Henry Collins' duties as coordinator of field 
hearings for the House Committee on Interstate Migration: 

In charge of field hearings including coordination of activities of the various 
field staffs, liasion contact with other Federal agencies, preparation and planning 
for hearings, selection of witnesses and organization of testimony (p. 33). 

Here are Collins' "duties and responsibilities" when he served with 
the Senate Committee on Small Business: 

Under the general direction of the chairman of the Senate Special Committee 
To Study Problems of American Small Business, to direct the research, investiga- 
tion, hearings, report writing, legislative proposal, and administrative operations 
of the committee * * * to direct a research staff in tlie development of economic 
data relating to the problems involved; to direct' a small group in the arrangements 
and conduct of hearings; to direct the preparation of reports of hearings and find- 
ings; to prepare recommendations for appropriate legi^"Iation for the solution of 
problems affecting small business; and to perform related tasks as assigned (p. 50). 

NETWORK IN NATIONAL DEFENSE 

In its decision of April 20, 1953, the Subversive Activities Control 
Board found that the Communist Party, USA, had as its objective 
"the overthrow of the United States Government" and the eft'ectua- 
tion of policies "for the purposes of defending and protecting the 
Soviet Union." Toward this end, the penetration of key agencies 
engaged in national defense was paramount. With the limited re- 
sources and data available to the subcommittee, we have been able 
to indicate only the pattern of such infiltration by those who have 
invoked their privilege against incrimination v.dien asked about the 
subcommittee's evidence of their Communist Party membership. 

The subcommittee was in no position to make any overall investi- 
gation of the agencies mentioned. The following data, therefore, wars 
purely incidental and does not depict the full situation. 



36 INTERLOCKING SUBVERSION EST GOVERNMENT DEPARTMENTS 

The Office of Strategic Services, the United States intelhgence 
agency operating abroad during World War II, and discussed pre- 
viously, included within its ranks the following such individuals: 
Leo M. Drozdoff, Irving Fajans, Maurice Halperin (Chief of the 
Latin American Division), Jack Sargeant Harris (in charge of military 
intelligence of South Africa), Juhus J. Joseph, Paul V. Martineau, 
Carl AldoMarzani (Deputy Chief of the Presentation Branch), 
Leonard E. Mins, Helen B, Tenney, Milton Wolff, and George S. 
Wuchinich.^^ 

The field of scientific research is vital to the Armed Forces, yet the 
subcommittee discovered these significant examples of penetration 
in this field among those who invoked the fifth amendment, claiming 
the privilege against self-incrimination: 

Morris U. Cohen worked as a physicist for the Technical Research 
Laboratories, which did contract work for the Armed Forces 
(Education hearings, pp. 997-998). 

Herman Landau, an associate professor at the University of Chicago, 
worked on ordnance research for the War Department while at the Ab- 
erdeen Proving Grounds between 1941 and 1948 (Education, p. 1080). 

Sidney J. Socolar, also of the University of Chicago, had access to 
classified information in connection with his studies of heat radiation 
(Education, p. 1097). 

Ralph Spitzer, of the University of Kansas City, was connected 
with the scientific research development program of the Defense 
Department with particular reference to the nature of the shock wave 
and of various phenomena connected with underwater explosives 
(Education, p: 1124). 

Joseph Steigman, of the Brooklyn Polytechnic Institute, worked on 
a Navy research project investigating the analytical chemistry of 
niobium and tantalum (Education, p. 1004). 

The atomic scientists 

Prof. Philip Morrison, who admitted Communist Party membership 
about 1939 and who is currently a leader of the Communist-controlled 
American Peace Crusade, joined the Manhattan atomic project in 
1942. He was a physicist and group leader in the Meteorological 
Laboratory in 1944. He participated in the positive intelligence 
program of the United States Army. Until the test of the atomic 
bomb, he was with the University of California Laboratory in New 
Mexico. He was one of a small group of experts who assembled, 
tested, and mounted bombs used for combat in the Pacific. Due to 
his position at Los Alamos, he was a member of a mission to Japan 
to inspect cities damaged by the atomic bomb. Professor Morrison 
acknowledged he had access to virtually all secrets of the atomic 
project. 

David Hawkins, currently at Harvard University, admitted Com- 
munist Party membership from 1938 to March of 1943. In May 
1943 he was assigned to the Los Alamos atomic project as an admin- 
istrative aide. Later he was appointed historian of the project, with 
access to all the information necessary to write its history. 

3» David Zablodowsky of this agency was implicated in the underground by Whittaker Chambers' 
testimony. Zablodowsky acknowledged that he had helped the underground but denied Communist 
Party membership. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 37 

Other military activists 

Some of those who invoked their privilege against self-incrimination 
in the face of the subcommittee's evidence were engaged in certain 
key, special services for the Armed Forces, as the following instances 
will show: 

Carl Aldo Tvlarzani made policy decisions on projects and was a 
liaison officer with the Deputy Chief of Staff of the Army and the 
Office of the Under Secretary of War. He was Chief of the Editorial 
Section of OSS, supervising the making of movies and charts on 
technical reports, using highly classified information, for higher 
echelons of the Army, Navy, Joint Chiefs of Staff, and OSS. He was 
one of those responsible for picking bombing targets for the Doolittle 
air raid on Tokj^o for the Air Force through the Joint Chiefs of Staff 
(pp. 802-803). 

Irving Kaplan was the economic adviser of the Foreign Funds 
Control Section of the United States Group Control Council, American 
Military Government in Germany in 1945 (IPR, p. 4745). 

George R. Faxon was an officer in the Information and Education 
Branch of the Ai-my stationed at Fort Bliss in Texas, the Pentagon, 
and m Paris. He also taught at the Veterans School m Boston 
(Education, p. 682). 

Henry H. Collins, Jr., was the executive secretary of the Senate 
Subcommittee of the Alilitary Aifau-s Committee on Technological 
Mobilization. Through his Government contacts, he secured an 
Army commission and served as a military government officer in 
various countries. He emerged from the Armj" as a major (pp. 7-8). 

Certain civilian agencies, too, played an unportant part m the war 
effort.**^ Here the same group found lodgmg. Harry Magdoff was 
senior economic statistician with the Advisory Commission to the 
Council of National Defense beginning in October 1940, while Stalin 
was allied with Adolf Hitler. In 1942 he became head of the 
Production Progress Anah'sis Section of the War Production Board 
for the executive office of the Chairman. In May 1943 he became the 
head economist and chief of the Program and Control Records Branch 
of the War Production Board, Tools Division. 

Julius J. Joseph was senior administrative officer in the Office of 
Emergency jManagement and the Bureau of Program Requirements 
of the War Alanpower Commission. Later he was assigned to the 
Office of Strategic Services. 

Philip O. Keeney was, in 1941, library officer of the Coordinator of 
Information, Avhich later became the OSS. He later became libraries 
officer of the Supreme Command of the Allied Powers in Japan. 

The memorandum of Adolph A. Berle, Jr., Assistant Secretary of 
State, drawn up in 1939, during his interview with Whittaker Chambers 
contained the following notations of military interest as to individuals 
identified as a part of the Communist ring: 

Rosenbliett — in U. S. 

connected with Dr. Isador Miller — Chemist's Club — 41 St. 

Chemist, Explosive Arsenal, Picatinny, N. J. . . . 

Vincent Reno — Now at Aberdeen Proving Grounds — Computer — Math. 

Asst. to Col. Zornig (Aerial bombsight detectors) . . . 

Alexander Trachtenberg — Politburo — 

member of the Execu. Committee 

Head of GPU in U. S. 

« George Shaw Wheeler was former chief of the denazification branch of the manpower division of the 
American military government in Germany. In 1947 be sought asylum in Communist Czechoslovakia. 



38 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Works with Peters — 

Plans for two Super-battleships— 

secured in 1937 — who gave — 

Karp brother-in-law of Molotov — . • . 

Now: Naval Architect working on it, why? 

Field was original contact . . . (pp. 329-330) 

Abraliam George Silvennan was economic adviser and Chief of 
Analj^sis and Plans for the Assistant Chief of Air Staff, Materiel and 
Services, Air Forces. William Ludwig Ullmann, who was in the same 
Communist group with Silverman was also employed in the Materiel 
and Service Division, Air Corps Headquarters, in the Pentagon. 

On October 13, 1952, the subcommittee heard John Lautner, former 
member of the powerful Disciplinary Review Commission of the 
Communist Party, add an interesting sidelight on his career in the 
Armed Forces while still a Communist: 

Mr. Lautner. I was a graduate of Military Intelligence and I was assigned to 
Psychological Warfare in propaganda work. 

S'enator Ferguson. And you were a Communist? 

Mr. Lautner, I was a member of the Communist Party at the time of my 
induction. 

Senator Ferguson. Now, who was your superior officer in the Military Intelli- 
gence, Psychological Warfare? 

Mr. Lautner. In Psychological Warfare, my superior officer was Peter Rhodes, 
who was in charge of the Mediterranean theater of operations monitoring system 
at that time. 

Senator Ferguson. Was he a Communist? 

Mr. Lautner. * * * Later on I found out he was. (Education hearings, p. 
245.) 

Miscellaneous posts of military importance occupied by those who 
refused to deny evidence of their Communist Party membership, 
in addition to those in the Office of Strategic Services, include the 
following as revealed in subcommittee hearings: Virginius Frank Coe, 
of the National Advisory Defense Council, 1940, Joint War Production 
Committee as executive secretary for the United States and Canada; 
Sidney Glassman, Signal Corps inspector, 1942; Jacob Grauman, War 
Production Board, 1942-46, Office of War Mobilization, 1946-47; 
Stanley Graze, War Production Board, Army Officer's Candidate 
School, second lieutenant; Jerome A. Oberwager, Army Ordnance 
Division, 1943-46; Irving P. Schiller, civilian employee of the Navy 
Department; Alexander H. Svenchansky, Army, noncommissioned 
officer, orientation work; Alfred J. Van Tassell, War Production Board, 
1942; Eugene Wallach, Judge Advocate's office, United States Army, 
1941. 

The subcommittee had little difficulty in understanding why there 
was Communist penetration of our Armed Forces during the war. 
A directive from the War Department, dated December 30, 1944, 
refers to the subject "Disposition of Subversive and Disaffected 
Military Personnel," and is addressed to the commanding generals of 
all commands. This directive read: 

Questions have arisen as to the significance, under reference letter, of member- 
ship in, and sympathy with the views of, the Communist Party. 

The basic consideration is not the propriety of the individual's opinions, but 
his loyalty to the United States. Membership in, or strict adherence to the 
doctrines of, the Communist Party organization is evidence that the individual 
is subject to influences that may tend to divide his loyalty. However, many 
good soldiers are subject to conflicting influences. Such influences must be 
appraised in the light of the individual's entire record. No action will be taken 
under the reference letter that is predicated on membership in or adherence to the 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 39 

doctrines of the Communist Party unless there is a specific finding that the 
individual involved has a loyalty to the Communist Party as an organization 
which overrides his loyalty to the United States. No such finding should be 
based on the mere fact that the individual's views on various social questions have 
been the same as the views which the Communist Party may have advanced. 
Except in clear cases, no action should be taken against persons who are being 
trained for combat assignments and have demonstrated a high degree of ability 
to serve the United States in that manner, including a willingness to accept 
combat duty. 

Testimony taken by a special committee of the Committee on 
Military Affairs of the House of Representatives on February 27, 1945, 
tlij-'ows considerable light on Army tolerance of Communists at that 
time. John J. McCloy, Assistant Secretary of War, who testified 
for the Secretary of War and for the War Department, stated in 
testimony: 

Mr. McCloy. * * * Once more the War Department exhaustively reviewed 
this subject, in the light of its experience, of the decisions of the Supreme Court 
of the United States, and of the applicable statutes. Experience had shown that 
many persons in the Army, suspected of advocating subversive doctrines or 
being members of a subversive organization, but as to whom such advocacy or 
membership had not been proved, were loyally supporting the war eflTort. It 
was desirable to utilize the services of such persons in every appropriate way 
(p. 3605)." 

^h ^h ^r ^F *v* ^F ^F 

Mr. Thomason. Was it your statement that there is no officer in the United 
States Army, so far as you know, who is a Communist? 

Mr. McCloy. My statement is that we knowingly appointed no one as an 
officer of the United States Army who held the view that the Government of the 
United States could or should be overthrown by violence. I should like to point 
out that the Hatch Act does not provide that any member of the Communist 
Party shall be excluded from the Army, or mention the Communist Party or 
communism. The Hatch Act provides that one who holds membership in a 
party which advocates the doctrine of overthrow of the Government by violence 
shall be excluded (pp. 3607, 3608)." 

******* 

Mr. Thomason. Of course, you do not know whether you have any men in 
the United States Army, either officers or enlisted men, who favor the overthrow 
of our present form of government? 

Mr. McCloy. I know of no case which has come to me where that is a fact 
(p. 3608)." 

Mr. Thomason. Then, if I understand you, if a man said he was a Communist, 
or there was some evidence that he was affiliated with the so-called Communist 
Party, you would not necessarily hold that that man belongs to a political party 
that favors overthrow of our present form of government? 

Mr. McCloy. We cannot take that position in the light of the great confusion 
that exists in the judicial tribunals of the country as to whether that is a tenet 
of the Communist Party or not. 

Mr. Thomason. Regardless of whether you call him a Communist or whatever 
particular name he may have, insofar as his political affiliations and beliefs are 
concerned, you now propose under this last directive that every mean's case shall 
be decided upon its individual merits and if it is found that he does belong to 
any party or even personally favors the overthrow of the Government, you will 
court martial him? 

Mr. McCloy. That is right (pp. 3609, 3610)." 

Mr. Abends. Mr. McCloy, would there be the possibility that an individual 
soldier, an exceptional soldier — and a lot of the Communists are smart — could 
rise to the rank of colonel and still be a Conmiunist? 

Mr. McCloy. If his loyalty to the United States was the predominant factor 
in the judgment of his commanding officer and of those who reviewed his case 
(p. 3612)." 

******* 



" Page references in McCloy testimony quoted here are to Hoase Military Affairs Committee hearings, 
described in introductory paragraph. 



40 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Mr. Elston. Mr. McCloy, you said the law was not entirely clear so far as 
the Army is concerned; that you did not know whether the Hatch Act applied 
to the Army. Congress, in the Hatch Act, provided very clearly that member- 
ship in the Communist Party would be a bar to accepting employment in any 
department of the Government, did it not? 

Mr. McCloy. Well, did it provide that very clearly? It did not mention the 
Communist Party. 

Mr. Elston. It says membership in any political party or organization which 
advocates the overthrow of our constitutional form of government in the 
United States. 

Mr. McClot. That is right. 

Mr. Elston. Now, Attorney General Eiddle had defined the Comm.unist 
Party as an organization that believes in, advocates, and teaches the overthrow 
by force and violence of the Government of the United States. 

Mr. McCloy. That is right. 

Mr. Elston. So, the two fit up together. 

Mr. McCloy. There was some doubt cast on that administrative finding by 
the dictum in the Supreme Court. 

Mr. Elston. That was mere obiter dictum, and that is not the law. 

Mr. McCloy. That is right (pp. 3616, 3617)." 

NET OVER LABOR 

During the late 1930's and early 1940's, one of the most important 
Government agencies was the National Labor Relations Board, which 
exercised considerable influence on the economic life of the country. 
Much of the history of that Board was stormy, and its achievements 
and its excesses have been weighed by other committees. 

This subcommittee, in tracmg the career of Nathan Witt of the Ware 
group, and Edwui S. Smith, who has been identified by Louis Budenz 
as a Communist, encountered a situation which very strongly indi- 
cated that the Communist penetration of the National Labor Relations 
Board approached control. 

David Saposs, former chief economist of the National Labor Rela- 
tions Board, testified as follows: 

Mr. Morris. Are you able to testify as to whether or not Edwin S. Smith and 
Nathan Witt were able to exercise a strong influence on the policies of the Board? 

Mr. Saposs. Well, Nathan Witt, first, as I mentioned, was the attorney of 
the Review Board, which was the unit which reviewed all cases and, of course, 
in reviewing cases, it was possible to interpret and analyze data. 

Later on when he became Secretary, he was, of course, the executive officer of 
the Board, which gave him full responsibility for the staff in the National Labor 
Relations Board, except the attorneys, and it gave him responsibility for the staff 
in the regions, the hiring of the regional directors, the hiring of the field examiners; 
again, everyone in the regional offices, except the attorneys. 

In addition thereto, of course, all the routine work of the Board, such as, for 
instance, the assigning of the order in which cases were to be heard, the citing of 
how the material pertaining to particular cases was to be presented to the Board 
in executive session — all of that gravitated and was carried through the Secretary 
of the Board, and therefore, Nathan Witt, as Secretary of the Board, was un- 
doubtedly the most influential person in the conduct of the affairs of the Board. 

Mr. Morris. Did Mr. Smith have an influential position on the Board? 

Mr. Saposs. Well, Edward Smith was a member of the Board, of course, and 
was always a very close, or sort of buddy or crony of Nathan Witt, and, so far as 
I was able to observe, as the Chief Economist of the Board, they were the two 
people that evidently exercised the greatest influence * * *, He recommended 
to the Board what particular action should be taken, and so on, and in that way, 
of course, he had a tremendous influence; and also by appointing. You see, the 
civil service did not apply to the employees of the NLRB, and by appointing field 
examiners who were the ones, of course, in a position to exercise the greatest 
influence of anybody connected with the Board including the Board members 
* * * (pp. 674-675). 

" See footnotes on p. 39. 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 41 

Elinore Herrick, former regional director of the National Labor 
Relations Board for New York, Connecticut, and New Jersey, and 
now personnel and labor relations director of the New York Herald 
Tribune testified that: 

Mrs. Herrick. * * * I for a lona; time was very critical of what I felt were 
policies by the Board, and I felt Witt played a large role in formulation of 
policies * * *_ 

I quite agreed with the Board's theory up to a point, namely, that you couldn't 
give an employer the right to come in and file a petition when there was only one 
union because he could file a petition at a very strategic time, to defeat the union 
before it had really organized, and I thoroughly agreed to that approach; but 
when two unions made claims, threatened strikes, or even struck, I really felt that 
something had to be done. 

I first came directly at loggerheads with Smith and Witt over that, and I 
remember speaking at a staff meeting and urging that we change our rule of the 
two union approach to it * * *. 

So, as I recall — and this is also many years ago — my next big argument with 
the Smith- Witt group on the Board came over the subpena, the right of an em- 
ployer to ask the Government to subpena witnesses they wanted, my feeling being 
that, while the Wagner Act was designed to protect the rights of labor, it had to 
be administered in a way which also recognized implicit rights of employers, too, 
to be a fair and balanced administration * * *. 

Then the third thing that stands out in my memory as a source of often violent 
conflict between me and the others, was the dismissal of charges, which was then 
within the power of the regional director * * *. 

Smith and Witt believed that we should let the unions withdraw them without 
prejudice, which, of course, as j'ou being a lawyer know, means that they could 
have refiled them at some subsequent date * * *. 

Mr. MoREis. May I ask this, Mrs. Herrick: Did 3'ou notice whether Witt 
would act under the instruction of the Board, or did he pretty much pursue an 
independent course? 

Mrs. Herrick. At this point in time, I would say that he would act independ- 
ently a great share of the time, and when he and I would tangle, he inevitably 
felt the need of some Board backing, which he always got (pp. 659, 660, 661). 

Mrs. Herrick. * * * The field office re'/iewed all reports from the regional 
offices, and the secretary through the f.eld office section, exercised his supervision 
over the regional offices, and I had a considerably stormy experience quite often 
in the process of being reviewed by the field division. 

Mr. Morris. Who was in charge of the reviev/ board generally, Mrs. Herrick? 

Mrs. Herrick. Well, I don't remember preciselv, because actually it was so 
tied up with Witt * * *(p. 662). 

Mrs. Herrick. * * * So I composed a rather peppery telegram which I sent 
off to the Board. 

Mr. Morris. Now, Mr. Mandel do we have a copy of a telegram that Mrs. 
Herrick sent on February 21, 1939? 

Mr. Mandel. Yes. 

Mr. Morris. Will you read it, please? 

Mr. Mandel (reading) : This investigation has been conducted virtually behind 
locked doors, in secrecy, and in such a thoroughly objectionable manner that far 
from being conducive to improved administration the investigation has caused 
the deplorable slump in the morale of the Board's largest and most important field 
office. It is the procedure one might expect from the OGPU but not from fellow 
administrators of an agency of the American Government. 

Mr. Morris. Was that the telegram you sent, Mrs. Herrick? 

Mrs. Herrick. That is right (p. 663). 

Saposs was asked about the general atmosphere at the Board: 

Mr. Morris. Now, Mr. Saposs, were you able to observe while j'ou had this 
particular duty with the Board any Communist agitation? 

Mr. Saposs. Yes; there was, of course, constant agitation on the part of Com- 
munist-front organizations. 

Mr. Morris. Can j'ou remember any of the Communist fronts to which you 
refer? 

Mr. Saposs. As I recall, it was the League for Peace and Democracy, and then 
there was the Women's — I forget the name of it — a women's organization. 



42 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

Mr. Morris. Was it the League of Women Shoppers? 

Mr. Saposs. League of Women Shoppers, the Washington Book Shop. Peti- 
tions were always being circulated and donations v/ere solicited in the Board 
during the office hours. 

Mr. Morris. So the solicitations of these various organizations which have 
been listed by the Attorney General to be Communist organizations went on 
during office hours? 

Mr. Saposs. Yes (p. 675). 

The Internal Security Subcommittee hearings of 1951 and 1952 
had developed extensive evidence that the American Communications 
Association was a Commimist-con trolled union. While reviewing this 
evidence and taking additional testimony, the chairman of this sub- 
committee learned on May 26, 1953, that this union was organizing 
the personnel who are now manning the communication lines of our 
most sensitive defense agencies, with access to the cables and wires 
of our Government. 

The subcommittee made every effort to prevent the recertification 
of this Communist union as the bargaining agent of these employees. 

A letter to the chairman of the Senate Labor Committee which 
the chairman of this subcommittee also sent to the President of the 
United States, the Secretary of Defense, the Chairman of the Senate 
Judiciary Committee, and the chairmen of the House Labor and 
Judiciary Committees, reflects our efforts: 

Dear Senator: On Tuesday, May 26, during the course of a hearing on internal 
security, a situation developed which related to the internal security of the 
country. I summarized it as follows: 

In 1951, the Internal Security Subcommittee of the Senate Committee on 
the Judiciary held extensive hearings on the American Communications Associa- 
tion. In those hearings, the Communist control over the labor organization 
was amply established. This American Communications Association is now 
the certified bargaining agent for some approximately 5,000 employees of the 
Western Union Telegraph Co. in the metropolitan area of New York City, some 
200 employees of the Western Union Cable Co. of New York City, for RCA 
communications on the east and west coasts and for employees in certain broad- 
casting stations mostly in New York and in Philadelphia. Recently, a National 
Labor Relations Board secret-ballot election, among Western Union employees 
in New York City, was held on May 19, 1953, when the employees voted, 2,421 
to 1,619, in favor of the American Communications Association as against the 
American Federation of Labor. 

Another National Labor Relations Board election is now being held among 
approximately 1,800 emploj'ees of the American Cable & Radio Co., and the 
American Communications Association is on the ballot. The results of this 
election are to be announced on the 28th of May. 

This Internal Security Subcommittee has taken cognizance of this situation 
at this time in view of the following facts found after preliminary survey by the 
staff of this subcommittee: 

The main office of the Western Union Telegraph Co. is located in the Western 
Union Building at 60 Hudson Street, New York, N. Y. Telegraph circuits to 
all major cities in the United States terminate or relay through this building. 
Telegraph messages of all kinds are handled by the employees, the majority of 
whom are members and under the control of the American Communications 
Association. Many of these messages are Government messages. For example, 
the following Government agencies are served by telegraph circuits, "tie lines," 
connecting the main Western Union office and the agency offices. The following 
is a partial list of these circuits: United States Defense Department Signal 
Center of the First Army Headquarters, Fort Wadsworth ; United States Naval Air 
Station, Floyd Bennett Field, Brooklyn; New York Port of Embarkation in 
Brooklyn; United States Naval Shipyards, Brooklyn; Sea Transport Station 



INTERLOCKING SUBVERSION EST GOVERNMENT DEPARTMENTS 43 

Atlantic Division, Army Piers 1, 2, 3, and 4; United States Navy Naval Com- 
munications Service, 90 Church Street, New York, N. Y.; Governors Island and 
Fort Jay, 2d Service Command. The importance of the Western Union 
Telegraph Co. and the Western Union Cable Co. in our country's defense program 
can be judged by the following, which appeared in the company's annual report 
for 1952: "More deep-sea amplifiers were placed in service, further increasing 
international-cable capacity. Increased service requirements of the Armed 
Forces, other governmental departments, and defense industries were fully met. 
Of special importance was the expansion of the extensive leased communication 
systems furnished by Western Union for governmental and other larg? customers. 
The company was awarded Government contracts by the Air Force, the Navy, 
and the Signal Corps for the development of special electronic equipment and for 
other projects, involving a total of $6 million." 

The Senate Internal Security Subcommittee takes cognizance of this situation 
as possessing a threat to the internal security of this country. 

Yesterday, the Senate Internal Security Subcommittee met with Ivar Peterson, 
Acting Chairman of the National Labor Relations Board, and members Abe 
Murdcck and John Houston, and entered into executive discussion. A cojij' of 
the transcript of that discussion is attached herewith. 

At the termination of this session, as chairman of the Internal Security Sub- 
committee, I made the following recommendations: 

1. That the whole matter be brought to the attention of the President of the 
United States; 

2. That the NLRB not certify the American Communications Association a? 
the bargaining representatives of the employees of Western Union and the 
American Cable & Radio Co. 

3. That in view of the NLRB's objection that they could not withhold certi- 
fication with possibly being held in contempt of the district court, the NLRB 
obtain a, stay from Judge Letts which would enable it to withold certification of 
the ACA as a bargaining asent. 

4. That appropriate legislation, now pending before the Congress which would 
remedy the present situation, be expedited. 

Accordinglj', as chairman of the Internal Security Subcommittee, I ask that 
you give consideration to the enactment of whatever legislation there is before 
your committee that would remedy the present danger to the country. 
Sincerelj^ 

W^iLi.iAM E. Jenner, 
Chairman Internal Security Suhcommitlee. 

Despite this, tlie NLRB did certify the ACA as the bargaining unit 
of Western Union employees on June 3, 1953.*^ 

The so-called Chicago "massacre," the San Francisco dock and 
general strike, and the movement into California of migrants from 
the Dust Bowl, were central themes in the troubled labor history of 
the 1930's. Through their key posts in the Maritime Labor Board, 
the LaFollette Subcommittee, the NLRB, the House Committee on 
Interstate Migration and the Labor Division of the Farm Security 
Administration, Silvermaster, Kramer, Abt, Witt, Rosenberg, Smith, 
Weber, Collins, and Flato were intimately involved in one or the 
other of these disturbances. 

The subcommittee did not attempt to decide who was right or who 
was wrong in any of these employer-labor clashes. It does however, 
call attention to the fact that secret Communist agents were speaking 
and acting on behalf of the United States Government in these 
struggles. The same agents were preparing reports and documents on 
which national labor policy was being made, and out of which a vast 
quantity of labor history has since been written. 

" See letters of Ivar Peterson, Acting Chairman of NLRB and of J. L. Wilcox, vice president of Western 
Union to the chairman of the subcommittee (pp. C70-673). 



44 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

THE NET OVER AGRICULTURE 

The man wlio founded the first Communist cell in the United 
States Government was the late Harold M. Ware. Ware's mother, 
the late Ella Reeve Bloor, was openly advertised by Communist 
officials as "the First Lady of the Communist Party, United States 
of America." In her autobiography, "We Are Many," she tells how 
her son, Hal, served in the U. S. S. H. as a leader in the Soviet collec- 
tive farm program under both Lenin and Stalin (We Are Many, 
pp. 266-279). 

When Ware camiC to Washington in the early 1930's, he called 
himself an "agricultural engineer," attached to Farm Research, Inc., 
1343 H Street" NW. 

Charles J. Coe joined the Farm Research organization in 1936. 
He became editor of the Farm Research publication. Facts for Farm- 
ers, in 1937 (pp. 722, 723). 

Coo, the brother of Virginius Frank Coc, was listed in the 1939 Berle 
memorandum. He refused to answer all questions regarding his Com- 
munist connections — including even his present editorship of "Facts 
for Farmers" — when he took the stand in this series of hearings. 

Six members of Hal Ware's parent Communist cell identified as 
such in sworn testimony worked for the original Agricultural Adjust- 
ment Administration of the Department of Agriculture. 

They were Alger Hiss, I^ee Pressman, John Abt, Nr.than Witt, 
Nathaniel Weyl, and Charles Kramer. 

Alargaret Bennett Porter also worked for the original AAA. She 
invoked the fifth amendment when asked by us if she were a secret 
Communist during the period of employment there. 

George N, Peek, wdio w^as appointed by President Roosevelt as 
AAA's first administrator, wi-ote a book, Wliy Quit Our Own, to tell 
what happened within the agency in the period when the members of 
the Ware cell were activelj- at work there. Pertinent passages from 
that book are included here. 

A plague of young lawyers settled on Washington * * * in the legal division 
were formed the plans which eventually turned the AAA from a device to aid 
the farmer to a device to introduce the coUectivist system of agriculture into this 
country (Why Quit, etc., p. 20). 

* * '* The' inner ring was evidently out to "get" Mr. Brand; they also wanted 
to be rid of me. They wanted to purge the AAA of all businessmen or any others 
who did not welcome the coming of the new day of revolution (ibid., pp. 143, 
144). 

* iiii * * * * * 

These prattlers were for the most part employees of the Government and had 

taken the oath of allegiance. But they took the'position that their high purposes 

gave them a supermorality that could not be confused with the morality the 

Nation had been using. They were quite above such old-fogy, Tory, reactionary 

stuff as oaths of ofhce or other religious antiquities. They owed allegiance, not 

to the United States— patriotism was for the nonthinking. They had a higher 

allegiance — an allegiance to the "Cause." The end justified the means (idem, 

pp. 115, 116). 

******* 

* * * ]\Iost of that crowd, in their effects, were Communists. Indeed one day 
one of the co-op leaders told me that he could get tips from the Communists' 
headcjuarters in New York City as to what was going on before I knew what was 
in tho wind (idem, p. 156). 

Peek tells his own story of what happened to him for standing out 
against the "inner ring." 



INTERLOCKENTG SUBVERSION IN GOVERNMENT DEPARTMENTS 45 

I resigned as Administrator of the AAA, setting out in my letter to the Presi- 
dent that it was at his request, (idem, p. 25.) 

* * * * 4^ ^ 4! 

The "economists" and professors knew what they wanted and were determined 
to get it. I thought I Iiad them cliecked, but events proved that I was mistaken 
(idem, p. 91.) 

Peek's successor, Chester A. Davis, made a heroic effort to drive 
most of these people from Government, in the famous Triple-A Purge 
of 1935 (Washington Post, Februarv 6, 1935). But they found lodg- 
ment elsewhere, as the record of our hearings abundantly demon- 
strates. 

THE HIDDEN COMMUNISTS 

The subcommittee sought, while sketching the design of Communist 
penetration into Government and while mterrogating persons the 
subcommittee knew to have been members of the various rings in the 
network, to learn the identity of the Communists who are presumably 
still in Government, as indicated by ]Mis3 Bentley's testimony. Vir- 
tually all of the witnesses, however, invoked their privilege agamst 
incrimination when asked about the details of the conspiracy. 

The subcommittee made every inducement to assure each v/itness 
that it was searching for evidence and was not seeking to harass him 
in any way. However, virtually all elected to exercise theh privilege 
under the Constitution and thwarted this purpose of the subcommittee. 
For this reason, the subcommittee has strongly supported S. 16, 
recently passed by the Senate. The subcommittee believes that an 
early enactment of this bill will cause many secrets to be unlocked in 
the interest of our security. Senator Jenner on April 25, 1953, made 
the following statement in connection with his support of this bill: 

The Internal Security Subcommittee has been experiencing a long series of 
abuses on the part of witnesses invoking the f fth amendment to the Constitution. 
This amendment provides that no witness shall be required to give testimony 
against himself. However, it is our observation that in addition to performing 
its historic function — the protection of the individual under the Bill of Eights — 
the fifth amendment is being perverted into a shield to conceal the facts of the 
Communist consniracj'. 

The subcommittee has labored, under its senatorial mandate, to produce for 
the record evidence outlining the pattern and design of the Soviet conspiracy 
against our Government and against our academic institutions. It has tried 
unremittingly to elicit its evidence from original sources. But this conspiracy 
yields up its secrets grudgingly and in meager portions. 

For the most part, these secrets come from the former participants in the 
conspiracy in whom the indestructible desire for truth has prevailed, and led them 
to return from the ranks of the Communists into the legions of free men. This 
subcommittee has done everything to make clear that it will aid those who wish 
to extricate themr elves from the shackles cf their past. And we are happy to 
observe that academic institutions are recognizing that there is a place for those 
who, after a transgression, have rejoined the fellowship of freedom. Too often, 
noisy and fearsome abuse flowing in some public channels has been the reward 
for those who recaptured their integrity — a phenomenon indeed hard to com- 
prehend and one that has retarded our acquisition of truth. 

When our subcommittee has elicited its evidence from these sources, it summons 
as witnesses those who seem to be involved in the present conspiracy. These 
witnesses almost invariably prove belligerent and unyielding. Slost of them, 
when asked about the evidence, invoke the privilege which they claim accrues 
to them by virtue of the fifth amendment to the Constitution. Many try to 
sense the scope and the nature of the subcommittee's evidence and gage their 
tactics accordingly. These witnesses deny what they think the subcommittee 
cannot prove, but where they think denials under oath will involve them in 
perjury, they resort to the Bill of Rights. 



46 INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 

A witness is not justified in claiming privilege under the fifth amendment when 
he feels that his testimony will involve other people. The justification for 
invoking the amendment is that the witness asserts under oath and in good faith 
that if he testifies in response to a certain question, he will put into the record 
evidence which will prove to be at least a link in a chain of evidence that will 
ultimately lead to his conviction for a crime that he has committed. It is a 
privilege that belongs to him and is for his protection and not the protection of 
others. 

As chairman of this subcommittee, and recognizing that the abuse of the fifth 
amendment to the Constitution is, in fact, preventing the exposure of the Com- 
munist conspiracy, I feel that the enactment of S. 16, a bill introduced by Senator 
McCarran, granting immunity to witnesses appearing before congressional com- 
mittees, will aid the Internal Security Subcommittee in bringing to light a great 
many new facts of the Communist conspiracy. 

This proposed new law is carefully worded and provides that if a witness is 
given immunity by a committee, he can never be prosecuted at any time f ^r the 
offense. The bill, however, is not in any sense a denial ot the Bill of Rights, but 
rather an affirmation since it insures that a person, once he is granted immunity, 
can never be prosecuted. 

Even though this bill should be passed, however, the subcommittee will 
continue to take cognizance of the reluctance to give testimony which seems 
to be experienced by those witnesses who are in the intermediate stage of dis- 
associating themselves from the Communist intrigue. 

This subcommittee is mindful that in this intermediate stage, a person will 
experience reluctance to give the names of those who have been involved with 
him. It is an understandable phenomenon in the process of transformation. 
This subcommittee has taken testimony in executive session from many people 
who it believes reside in this intermediate zone and it is exercising its proper 
discretion in allowing them to return home and to reflect upon the significance 
of their testimony. 

It has never been the position of the Internal Security Subcommittee to hold 
up to punishment or to pillory past misdeeds. At the same time, however, it 
is charged with the duty of exjoosing the Communist conspiracy. Its function 
is to prepare future legislation and to expose present subversion. The proposed 
bill will greatly aid in carrying out these purposes. 

THE JOHN P. DAVIES CASE 

In its report on July 2, 1952, the Committee on the Judiciary 
concluded that John P. Davies, Jr., testified falsely with resiDect to 
his recommendation that Central Intelligence Agency employ and 
utilize certain persons with Communist associations. 

Prior to that time the subcommittee had come into possession of a 
copy of a memorandum prepared by Lyle Munson, a former employee 
of the CIA, as follows: 

April 11, 1950. 

I, Lyle H. Munson, make the following voluntary statement to Albert C. 
Hayden, Jr., and V.'illiam S. Hyde, who have identified themselves to me as 
special agents of the Federal Bureau of Investigation. 

On Wednesday, November 16, 1949, I participated in a conference with John 
P. Davies, Jr., of the Department of State. My memorandum for record, written 
subsequent to that meeting, reports the following as the substance of Mr. Davies' 
comments: 

1. That as regards Chinese personnel, the persons most helpful to OPC would 
be Chinese with American wives or husbands, who consequently had close ties 
with this country. 

2. Tliat he (Davies) had discussed with other OPC staff members the matter 
of employing certain persons through appropriate cutouts, to consult and guide 
OPC in certain activities affecting the Far East. 

3. That the persons he had indicated to them should be used were Beniamin 
K. Schwartz, Edgar Snow, Agnes Smedley, Anna Louise Strong, Professor (John) 
Fairbank and wife. 

Mr. Davies expressed the feeling that the above-mentioned persons should be 
used by OPC, and that the consultation and guidance and materials prepared by 
them would represent the proi^er approach. Mr. Davies said that he would be 



INTERLOCKING SUBVERSION IN GOVERNMENT DEPARTMENTS 47 

perfectly confident to put Professor and INfrs. Fairbank at the head of a unit 
charged -with producing such materials. He said that he was aware that they 
were considered Communists by some uninformed persons, but that they were 
not Communists, but "only very (politicallj') sophisticated." 

It was Davies' suggestion that the above persons be situated physicall}' in an 
office or suite of offices somewhere other than Washington (probably New York 
or Boston), and that through a cutout of OPC choosing, these persons provide 
not only guidance, but actually produce materials, for OPC utilization. 

Davies was particularly insistent that Dr. Schwartz, of the Russian Research 
Institute at Harvard, be retained by OPC for policy guidance in certain fields 
of its activities, and noted that Dr. Scliwartz had been most helpful to him as a 
consultant. 

The suggestions and recommendations made by Mr. Davies did not constitute 
an order or directive, nor v/ere they so interpreted by me or my superiors. 

Lyle H. Munso.nt. 

At tliat time John P. Davies, Jr., was a member of tlie Policy 
Planning Staff of the State Department and Mimson and one other 
CIA representative had been called in b}' Davies for the conference 
described in the April 11 statement. 

During the comse of testimony Alimson stated that OPC was a 
subordinate portion of CIA and that Davies made unsolicited recom- 
mendations to him and one other CIA representative about personnel 
for that subordinate portion of the CIA operation. Alunson consid- 
ered that Davies at the time was acting as an official of the State 
Department. 

!Munson proceeded to testify that Davies recommended that all 
six persons as a group or unit be employed by CIA to give guidance 
to, consult with, and prepare materials for the CIA. Munson testified 
that he did not understand that they were to be used as double 
agents, that they were to be used through a cutout or a person 
officially connected with the CIA so that they would not be brought 
directly within CIA operations; that all six were to be used in the same 
way as part of the same team, performing one and the same function; 
that it was his recollection that Davies had said that Professor 
Fairbank and his wife were not Commimist as some persons believed 
but were rather to be characterized as "very politically sophisticated" 
(IPR hearings, p. 2763); that it was not his understanding Miss 
vSmedley or Miss Strong were being recommended as Communists 
but that thev could be used for "consultation and guidance" (IPK 
hearings, pp.^ 2267, 2768). 

Previously, on August 8 and August 10, 1951, Davies had been 
called to testify before the subcommittee, and did make certain 
unqualified and categorical assertions under oath. Davies' testimony 
was, for security purposes, kept in executive session. 

After the testunony of Davies, the subcommittee, noting the dis- 
crepancies between that testimony and the sworn statement of 
Mimson, had transmitted on September 21, 1951, a copy of the Davies 
transcript to the Department of Justice and asked that the Depart- 
ment determine whether it should take any action thereon. October 
29, 1951, the Department of Justice replied that it appeared to the 
Department that there was insufficient evidence of perjury or any 
other Federal violation on Davies' part. 

After Munson's testimony on February 15, 1952, the subcommittee 
again wrote to the Justice Department (on February 21, 1952) and 
enclosed the transcript of the Munson testimony and asked if the 
amplification of IMunson's sworn statement, represented by the 



48 INTERLOCKING SUBVERSION EST GOVERNMENT DEPARTMENTS 

transcript, warranted action by tlie Department. The subcommittee 
at the same time enclosed a staff memorandum "citing seven (but by 
no means all)" of the conflicts between the Munson and Davies 
transcripts. On February 27, the Department of Justice replied that 
it would review the matter in the light of the testimony. On Febraury 
28, the chairman of the subcommittee again asked that the Depart- 
ment examine the matter called to its attention by his letter of Feb- 
ruary 21, 1952. The letter of February 28 said in part, "The question 
is, Wliat is the opinion of the Department of Justice, on the basis of 
an examination of the testimony to which attention has been directed, 
in connection with all information otherwise available to the Depart- 
ment?" 

On June 19, 1952, the subcommittee learned the whereabouts of the 
other CIA agent who heard Davies make his recommendations of 
November 16, 1949. He was subpenaed by the subcommittee and his 
executive-session testimony was taken. It was not released because 
his identity was a security secret. His testimony, however, confirmed 
the Munson testimony in all material respects and it was transmitted 
to the Department of Justice. 

The Senate Judiciary Committee recommended on July 2, 1952, 
that the Department of Justice submit to a grand jury the question of 
whether Davies perjured himself before the subcommittee. The 
Judiciary Committee considered it a substantial matter, involving as 
it did an officer, who had become the deputy political adviser to the 
United States High Commissioner in Germany. 

Mr. Davies is now counselor of Embassy in Peru, having been 
transferred from his position as deputy political adviser to the United 
States High Commissioner in Germany in May 1953. 

On June 11, 1953, the Internal Security Subcommittee addressed 
an inquiry to the Attorney General of the United States and asked if a 
determination had been made of the case. It also made certain 
inquiries of the Department of Justice on the matter. 

On July 6, 1953, the Deputy Attorney General, "William P. Kogers, 
replied to the chairman of the subcommittee and stated that the 
Department of Justice was making a review of all matters which were 
pending in the Department, including the Davies m.atter and that it 
had not as yet reached any final determination as of that date.*^ 

«Hon. William E. Jenner, 
United States Senate, 

U ashington, D. C: 

The Attorney General has referred to me the letter from the Internal Security Subcommittee, dated 
June 11, 1953, in regard to the case of John P. Davies. 

Sometime back Senator McCarran submitted a similar letter inquiring about the status of the case. By 
letter, dated May 18, 1953, we advised him that the Department of Justice under the present administration 
was makine a review of all matters which were pendincr in the Department when the present Attorney Gen- 
eral took ofEce, includinp the Davies matter. We further advised Senator McCarran tliat the Department 
had not reached any final determination as yet. In order to make certain that the review is objective and 
complete, the Department is having the matter reviewed solely by appointees of the present Attorney 
General. 

The review which we referred to in our letter to Senator McCarran has still not been completed. We 
appreciate the interest of the Senate Internal Security Subcommittee in this matter and assure you that you 
will be advi.scd When any final action is taken by the Department in connection with it. 

With best personal regards. 
Sincerely, 

William P. Rogers, 
Deputy Attorney Gmcral. 



INTERLOCKING SUBVERSION" IN GOVERNMENT DEPARTMENTS 49 

CONCLUSIONS 

1 . The Soviet international organization has carried on a successful 
and important penetration of the United States Government and this 
penetration has not been fully exposed. 

2. This penetration has extended from the lower ranks to top-level 
policy and operating positions in our Government. 

3. The agents of this penetration have operated in accordance with 
a distinct design fashioned by their Soviet superiors. 

4. INIembers of this conspiracy helped to get each other into Govern- 
ment, helped each other to rise in Government and protected each 
other from exposure. 

5. The general pattern of this penetration was first into agencies 
concerned wdtli economic recovery, then to warmaking agencies, then 
to agencies concerned with foreign policy and postwar planning, but 
always moving to the focal point of national concern. 

6. In general, the Communists who infiltrated our Government 
Avorked behind the scenes — guiding research and preparing memoranda 
on wdiich basic American policies were set, \ATiiting speeches for 
Cabinet officers, influencing congressional investigations, drafting 
laws, manipulating administrative reorganizations— always serving 
the interest of their Soviet superiors. 

7. Thousands of diplomatic, political, militarj-, scientific, and 
economic secrets of the United States have been stolen by Soviet 
agents in our Government and other persons closely connected with 
the Communists. 

8. Despite the fact that the Federal Bureau of Investigation and 
other security agencies had reported extensive information about this 
Communist penetration, little was done by the executive branch to 
interrupt the Soviet operatives in their ascent in Government until 
congressional com-mittees brought forth to public light the facts of 
the conspiracy. 

9. Powerful groups and individuals within the executive branch 
were at work obstructing and weakening the effort to eliminate Soviet 
agents from positions in Government. 

10. Members of this conspiracy repeatedly swore to oaths denying 
Communist Party membership when seeking appointments, transfers, 
and promotions and these falsifications have, in virtually every case, 
gone unpunished. 

11. The control that the American Communications Association, 
a Communist-directed union, maintains over communication lines 
vital to the national defense poses a threat to the security of this 
country. 

12. Policies and programs laid down by members of this Soviet 
conspiracy are still in effect within our Government and constitute 
a continuing hazard to our national security. 

RECOMMENDATIONS - 

The subcommittee makes the following recommendations: 
That a thorough study be made by the Committee on the Judiciary, 
in cooperation with the Department of Justice, of existing legislation, 
with a view toward extending the statute of limitation on false swear- 
ing and false affirmations by Government employees concerning Com- 
munist membership and subversion. 



BOSTON PUBLIC LIBRARY 




3 9999 05445 4788 ^^^^'^ '^ goveristmext departments 



That the Internal Secm-ity Subcommittee continue to support 
Senate bill 16, giving Congress the power to grant immunity to cer- 
tain witnesses, and, in the event of its enactment into law, review the 
evidence taken by the subcommittee during this session of Congress 
^vith the object of recalling certain witnesses who have refused to 
testify'. 

That the legislation now before committees of Congress which would 
operate to prevent Communist organization and control of workers 
in communications and other vital defense industries be considered 
for early enactment. 

That this subcommittee continue the present investigation, in those 
areas where the evidence brought forth during this series of hearings 
indicates that the subversion has not yet been fully exposed. 

That the executive branch of the Government reevaluate the per- 
sonnel records and the personal histor}' of all emploj'ees brought into 
the Government, recommended or promoted by persons shown by 
evidence to have been Soviet agents. 

That the executive branch of the Government reevaluate the 
personnel records and personal histories of all employees who have 
been closely and intimately associated with, and who were involved 
in some degree in conspiratorial activity with, persons shown by 
evidence to have been Soviet agents. 

William E. Jenner, Chairman. 
Arthur V. Watkins. 
Robert C. Hexdricksox. 
Herman Welker. 
John Marshall Butler. 
Pat McCarrax. 
James O. Eastlaxd. 
Olix D. Johnstox^. 

o 



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