evidence that I can give.

Mr. Morgan. Go ahead.

General Holmes. Then the affair went ahead, again wholly in the
hands of the FBI. They were in consultations with us about it all
the time. Finally they came, at one point, I do not remember the date,
and said they were about ready to proceed to arrest the people involved,
and they furnished a memorandum of the case, which they gave to me,
and we looked at it and it looked to us as if there was a case.

I decided again that the responsibility of the decision about the
arrest and prosecution of the people was clearly within the Depart-
ment of Justice, and from there on I had nothing more to do with it,
except to follow it in the newspaper, about the grand jury and the
indictment of some of the people, and finally— ves; the failure to
indict other people — and finally the decision of the court where two
of the people, I believe, were fined.

Mr. Morgan. Did the FBI clear with you, or the Department of
Justice clear with you the fact that these arrests were going to be made,
and that State Department personnel would be involved?
. General Holmes. Yes.

Mr. Morgan. Did you discuss that consideration with anyone in
the Department?

General Holmes. Yes; I did. I certainly discussed it with Mr.
Grew.

Mr. Morgan. Do you recall vour conversation with ]\Ir. Grew ?

General Hollies. No, no. The only thing that I recall of that con-
versation was Mr. Grew's atonishment that John Service was in-
volved, and was about to be arrested.

Mr. Morgan. Was it normal for you to have cleared the matter
with Under Secretarv Grew at that time?

General Holmes. He was Acting Secretary.

Mr. Morgan. I see ; and you were clearing the fact that these ar-
rests would be made and State Department personnel were involved,
with the Acting Secretary of State?



STATE DEPARTMENT E-MPLOYEE LOYALTY IN^'ESTIGATION 1171

General Holmes. That is correct.

INIr. MoROAN. And what Mr. Grew said was



(Tpneral IIoLivrES. He said, in fact he was amazed that Jolin Service
was involved; that he Avas olad tlie case was boin<r hronirht to jnstice;
and that he hoped the j^uiUy peo{)k^ would be caught and punished.

That was the purport of wliat he had to say.

Mr. Morgan. General, we have, in our records, an inference, I be-
lieve, or sncgestion that in the late part of ]\Iarch, maybe early Ajiril,
some consideration was given to eiiVcting these arrests at that time,
and that the matter was held np pending an effort to determine if
tliere were other suspects possibly in the picture. I believe our rec-
ord will reflect testimony that the suggestion was made and that it
came probably from the Na^^.

As I further pursue it, I think that is right.

Do you know anything at all about that situation ?

General Holmes. I know nothing about a suggestion from the Navy
on that score, but the FBI agents said "We must keep this very secret,
to give us time to investigate this thing more thoroughly, and to see
who else is involved."

And, as a matter of fact, it did go on, I believe, for 2 or 3 months,
in order that they could thoroughly investigate the case without let-
ting the people who were suspected know of it; but I don't remember
any influence from the Navy.

Mr. INloRGAN". Now, back to this.

As you know, General — I don't know whether you know^ it or not,
as I understand that you have been out of the country, but there have
been suggestions macle of the possibility of, we will use the word, a
"fix"' in the x\.merasia case, in one aspect or another.

Do you have any information that would assist this committee in
its inquiry with respect to the possibility of a fix anywhere in the
picture ?

General Holmes. No; I have not. I have no information on that
subject except the same suggestion which I read about in the press.

Mr. Morgan. I have no further questions.

Senator Ttdings. Senator Green?

Senator. Green. I am sorry to have been late on the first part of
the witness' testimony.

I have no questions to ask.

Senator Tydings. Senator Lodge?

Senator Lodge. I gather, Mr. Minister, that as far as you w^ere con-
cerned, when you heard of this event you took every step that you
could take to see to it that the law-enforcement agencies of the Gov-
ernment went to work on it; and, having done that, your connection
with the matter, in eif ect, ceased ; is that right ?

General Holmes. That is about it, but my interest in the matter
did not cease.

I was in the process then, having just really been in the office there
for a rather short time, of doing what I could to tighten ui) the security
of the State Department, which T found was not very good : and. if it
is of any help, I was disappointed that it was people who, if they were
o-uilty of stealing these documents, were not punished — in order that
it would be a lesson.

That was the personal reaction that I had, and I followed it very
closely and was interested in it, but I had no responsibility.



1172 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Senator Lodge. And you don't know Avhy — do you— that the guilty
parties were never really found and punished; don't know why; do
you ?

General Holmes. I don't know. That is a matter for the Depart-
ment of Justice, of course.

Senator Lodge. Very mysterious

General Holmes. I don't mean to suggest any m3^stery; I mean ta
suggest my disappointment.

Senator Lodge. I will say for myself — mysterious and disappoint-
ing.

Mr. Morgan. In that regard. General Holmes — it might be helpful
to us — after the case was disposed of the w^ay it was, did you make any
inquiry at all to ascertain the circumstances attending the dismissal of
the case, and the manner in which it was disposed of?

General Holmes. Only in respect to John Service.

Mr. Morgan. Can you help us on that?

General Holmes. He was a member of the Foreign Service. When
he was arrested, he was suspended from active duty until the court
could decide whether he was guilty or not; and the grand jury did
not indict him ; and, thereiore, he was cleared — was not tried.

However, something had to be done with respect to his position in
the Foreign Service; and so, as Chairman of the Personnel Board,
Foreign Service Personnel Board, I had the responsibility there.

I sent Mr. N. P. Davis, who was then Chief of Foreign Service Per-
sonnel, to see the appropriate person in the Department of Justice;
and I believe, although I am not certain of this, that the person he
saw was the man who prosecuted the case, whose name, I believe, was
Hitchcock.

Is that correct ?

Mr. Morgan. Hitchcock was one of the prosecutors.

General Holmes. I think he was the man Mr. Davis saw. He went
to him and said : "We have a problem in respect to this man in the
Foreign Service. Is there anything that you know of now, now that
it is out of the hands of the court, is there any evidence, or anything
that you know which really should prejudice his continuance with the
Foreign Service?" And Davis brought back a report that the attorney
said there was not.

So, the Board was convened. I convened the Board. We discussed
Service's implication in this, including the statement by Davis. We
brought Service before the Board and questioned him closely for
quite a long time; and I gave him, as Chairman of the Board, a very
severe oral reprimand for being indiscreet, at least, and told him
that the Board would decide what would be done.

He left the meeting, and we considered it, and the Board unani-
mously concluded that there was no evidence— again, he had been
indiscreet in some of his associations, but there was no reason why
he should not be reinstated in the service.

The Board approved that, and so recommended to the Secretary
of State, and a letter was drafted by the Secretary of State, Mr.
Byrnes, reinstating him in the Foreign Service.

Mr. Morgan. At the time you were considering Mr. Service, there,
the ouly knowledge your Board had before it about the Amerasia
case was the verbal representation by Mr. Hitchcock, made to Mr.
Davis, or did you have other information ?



STATE D'EPARTMENT EMPLOYEE LOYALTY INA'ESTIGATION 1173

General Holmes. We had other information as well.

Mr. Morgan, ]\[y jioint is: Did your Board rely upon the repre-
sentations of ]\rr. Hitchcock?

(leiicral Holmes. Oh, no. That was part of the one consideration.

Mr. Morgan. Was it a major consideration?

General Holmes. It was an important consideration. It was a
verification.

Mr. Morgan. What other considerations entered into the decision
to retain Mr. Service?

(General Holmes. That is difficult to answer in detail, Mr. Morgan.

Mr. Morgan. I appreciate that.

General Holmes. Fi-ankl}-, I don't remember.

We went into the thing as thoroughly and carefully as we could,
and the thing that stands out in my memory is what our conclusion
was.

Mr. Morgan. And it was a unanimous conclusion?

General Holmes. Yes, sir; it was.

INIr. Morris. General Holmes, was there presented to you, on that
occasion, FBI evidence to the effect that John Service has been im-
parting military information, secretly, to Philip Jaffe ?

General Holmes. No.

Mr. INIoRRis. If that had been, would it have influenced your opinion
or conclusion ?

General Holmes. Well, that is a rather difficult question to answer;
is it not ? If it had been shown that John Service had given secret
information

Mr. Morris. INIilitary information.

General Holmes. Secret military information to Philip Jaffe,
would it have influenced my opinion ? Yes.

Senator LoDciE. Was Service the only person implicated in the
Amerasia case who was on active dut}' in the State Department, in the
Foreign Service?

General Holmes. The only Foreign Service officer. There was a
State Department employee by the name of Larsen.

Senator Lod;;e. What hapi)enod to him I Didn't they do something
about him? Didn't the State Department take any action regarding
Larsen?

General Holmes. I presume it did; but it was action I would not
take any

Senator Lodge. You did not have the responsibility for that?

General Holjues. I did have certain responsibility for it; but I had
a direct responsibility for the Foreign Service, which was quite
different.

In other words, whatever happened to Larsen was a Department
personnel matter. I don't recall.

Senator Lod<;e. It did not come directly under you?

General Holmes. Xo. Ultimately, it would have; but it was han-
dled otherwise.

Senator Lodge. Service and Larsen, then, were the only two, were
they — the only two persons involved in the Amerasia case who were
connected with the State Department; is that right?

General Holmes. To the best of my recollection, sir; that is right,
sir.



1174 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Senator Lodge. Would it be fair to say that Service had shown a bit
of stupidity in his conduct in connection witli that case?

General Holmes. Yes, sir.

Senator Lodge. That vould be a fair description of it ?

General Holmes. I labeled it, at the time, "indiscretion."

Senator Lodge. How old was Service at that time ?

General Holmes. I would have to just estimate.

Senator Lodge. In his twenties or thirties ?

General Dolmes. I think he was in his early thirties.

Mr. MoKRis. General, who was responsible for presenting the evi-
dence to this Board ?

General Holmes. Mr. Davis.

Mr. Morris. Now, he had access to all FBI information at that time ;
did he?

General Holmes. He had access to all information that the FBI
had made available to the State Department. Wliether or not there
was other information, of course, I cannot say. I do not know.

Mr. Morris. You do not know whether he had asked the FBI if
they had given him all the information and evidence that they had ?

General Holmes. I cannot be certain of that. I think he did, but I
cannot be certain.

Mr. Morgan. In a situation of this character, would it have been
normal to develop all of the facts concerning it?

General Holmes. Yes, sir.

Mr. Morgan. And, was that Mr. Davis' responsibility, to get all the
facts concerning Service's participation?

General Holmes. Yes.

Mr. Morgan. Is Mr. Davis still in the State Department ?

General Holmes. He is Minister to Hungary, at the moment, in
Budapest.

Mr. Morgan. I have nothing further.

Senator Tydings. General, do you know of any fact or any circum-
stance that, in itself, shows that there might have been any undue
influence exercised in this case, which you have not testified to, but
which might give us a lead, which we might pursue to develop the fact
that undue influence might have been used ?

General Holmes. No, sir ; I do not.

Senator Tydings. From your talk with the President, at the White
House, when you and Mr. Grew — was it ?

General Holmes. Yes, sir.

Senator Tydings. When you went over there together, I would
assume, from what you have said here, that this was the first time
that the President knew that there was any action at all to postpone
the arrests, and postpone the prosecution of the case ?

General Holmes. That was my impression. It was very definitely
my impression.

Senator Tydings. Did the President act immediately when the mat-
ter was laid before him?

General Holmes. Instantly, almost.

Senator Tydings. Was the action of a decisive nature?

General Holmes. Very definitely so.

Senator Tydings. Was there any protest, so far as you can recall,
on the part of the man to whom he was talking; that is, concerning
further delay?



STATE DEPAUTiMENT EiMPLOYEE LOYALTY IN\'ESTIGATION 1 1 75

General Holmes. No, sir.

Senator TYnixos. Do you know whotlier or not the man on the
■other end of tlie telephone stated (hat he had been asked to hold it
up

General Holmes. To the President?

Senator Tydings. Yes.

General Hol:mes. No, sir; T am not-



Senator Tydixgs. You could not tell ^
General Holmes. I think that he probabl}^ did not; but just took
the President's instructions. That is my impression.

Senator Tydixgs. And the reason you think — I don't believe you
testified to it as first-hand knowled<>e — but the reason you thiidi there
^vas any delay in this matter was because of the pending San Francisco
Conference?

General Holmes. The sugoestion was made that the reason for
the proposeil delay was that it was because of the San Francisco
Conference, and relations with the Soviet Union.

Senator TYmx"^GS. Now, who told you that, specifically as nearly
as you can remember?

General Hol:\ies. As near as I can remember, that was brought
back to me from the Department of Justice by Mr. Lyon, by Fred
Lyon.

Senator Tydixgs. I mean, j-ou did not get any direct word? It
came through an intermediary?

General Holmes. That is right.

Senator Tyt)ix'gs. Thank j'ou.

Senator Lodge. For whom v.'as ]\Ir. Lyon sup]:)osed to be speaking?

General Holmes. Lyon was the State Department's FBI man. He
had been over to see the FBI agent in charge of the case, who was
Gurney.

Senator Lodge. Who was it that said "We want to go easy on the
case, because of the Soviet Union?"

General Holmes. That is where I am not quite certain.

Senator Lodge. Who told you that — Mr. Lyon ?

General Holmes. ]Mr. Lyon said that instruction came to Gurney
from the Attorney General's office ; that they were to hold up prose-
cution of th'e case, and the reason given was that, as clear as I
i-emember it.

Senator Lodge. Yes?

General Hol:mes. But the part on which I am not absolutely
certain, to testify to, is that the person who conveyed that to the
Department of Justice was the President's naval aide.

]My lecollection tells me that; but I canuot be certaiiL

Senator Lodge. The President's naval aide said that to the Depart-
ment of Justice?

General Hol:mes. Yes, sir.

I hope I nuide my ])oint on (hat very clear, because I do not mean
to testify that it was the President's naval aide.

Senator Loikje. But you heard it ?

General H< .l:\ies. I wanted to tell the conuni(tee that, to the best
of my recollection; and give you my memory of what transpired, in
order to get at the matter.

68970 — 50 — pt. 1 75



1176 STATE DEPARTMENT EMPLOYEE LUYALTY IlsWESTIGATION

Senator Lodge. You do not know of any instruction coming out of
the State Department that "We ought to go easy on these people,
because of the situation with the Soviet Union?"

General Holmes, I know of no such instruction, and cannot see how
such an instruction could have been given without my knowledge ; and
the additional evidence that there was no such instruction was the
Acting Secretary of State himself, who responded to the suggestion
with the same indignation with which I responded.

Senator Lodge. AVlio was the President's naval aide; what is his
name?

General Holmes. I think it was Vardaman,

Senator Lodge. Is it not true, in spite of the fact that the President
reacted with, or in such an apparently forthright manner at the con-
ference of which you speak — in spite of that fact, the guilty people
were not really punished ; is that not true ?

General Holmes. Well, Senator, the President reacted, I believe, on
this basis — ^that, if there were guilty people, they certainly should
be punished.

Senator Lodge. Yes?

General Holmes. And then the grand jury and the court, on the
evidence before them, decided on the punishment that ensued.

Senator Lodge. The President indicated clearly he wanted to have
them punished?

General Holmes. The guilty people punished.

Senator Lodge. And yet the end result was that they were not
punished ; isn't that true ?

General Holmes. It is true that they were only fined.

Senator Lodge. They got a slap on the wrist, didn't they ?

General Holmes. But it was the court that decided that.

Senator Lodge. I am not saying who decided that, but from the
standpoint of the matter isn't that right — the result is what counts,
a nd the guilty people were not punished ?

I think we ought to find out from Mr. Vardaman whether he did
give this instruction, Mr. Chairman.

Senator Tydings. One more question I would like to ask you,
General.

Do you know of anybody who was connected with this outrageous
procedure of getting these documents out of the State Department
whose name has not been brought into this ?

General Holmes. No, sir; I do not.

Senator Tydixgs. So far as you know, all of the people in the State
Department wlio were involved in it have been named and have been
brought into the open?

General Holmes. Oh, yes.

Senator Tydings. Tliere is nobody connected with this, that you
know of or that you have heard of, that has not been brought into
tlie open ?

(ireneral Hol:\ies. No, sir.

Senator Tydings. Thank you.

Mr. Morris. ]\Tay I ask a question ?

Senator Tydings. Certainly.

Mr. Morris. General, who was Attorney General at the time of
the alleged request on the part of the Attorney General to defer prose-
cution until the United Nations Conference f



STATE D'EPARTMENT EJMPLOYEE LOYALTY IISTVESTIGATION 1177

Senator Ttdings. I will tiy to get hold of Vardaiuan, Senator, and
see what he knows about it.

Senator Lodge. All right.

General Holmes. There ^vas a change about that time.

Mr. MoRias. Yes (

General Holmes. I believe Mr. Clark had become Attorney General
about that time.

jSIr. MoKRis. He had already become so?

General Holmes. I believe so. I am not certain of that.

Mr. Morris. And now, had Acting Secretary Grew asked you to
make a recommendation to him with respect to whether or not the
Justice Department had a case against the six defendants? Were you
charged with that assignment?

General Holmes. Not specifically that way ; no.

Mr. Morris. AVlien you say, "not specifically," General

General Holmes. He did not say to me, "Will you report back to
me whether they have got a case?"

As I recall it, we discussed it, and we asked the Department of Jus-
tice, for our own information and guidance, to give us the case, which
they did in memorandum form ; and, in our opinion, not being law-
yers, there looked as if there were a case, so we offered no objection
and said, "From the point of view of the State Department, it is your
responsibility."

JNlr. Morris. Were you in the State Department in April 1945 ?

General Holmes. Yes; I Avas.

Mr. Morris. Were you acquainted at that time with the personnel
set-up of the Division of Far Eastern Affairs?

General Holmes. In a general way; yes.

Mr. IMoRRis. Did you know of a recommendation that had been
made that Owen Lattimore be made Deputy Director of the Far East-
ern Division?

General Holmes. Xo, sir; I never heard of such a suggestion.

Mr. MoRGAX. I might say for the record, Mr. Morris, that that is
the first time we have. Do you have any evidence of that?

Mr. Morris. Yes. I heard that that recommendation had been
made. That is why I asked if I could bring in those two particular
people I melitioned about a month ago.

Mr. Morgax. What })eo])le were those?

Mr. Mr)RRis. Well, General Holmes is sitting here now. Shall 1
give you that information in front of him?

Senator Tydixgs. I don't see why not.

Mr. M(»RGAX. That was

Mr. Morris. Mr. Ballantine and Mr. Grew.

Senator Tydixgs. Did Mr. Grew tell you that?

Mr. Morris. No.

Senator Tydixgs. Who did?

Mr. Morris. I am not at liberty to say now.

Senator Tydixgs. Is it authentic?

Mr. Morris. I was told by a man in New York that in April of 1945
arrangements had been completed for Mr. Lattimore to be Deputy
Director of the Far Eastern Division of the State Department.

Senator Tydixgs. What year?

Mr. Morris. April of 1945 : but that IMr. Grew and ]\Ir. Ballantine
protested very vigorously and stopped the appointment.



1178 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Senator Tydings. Well, one man told yon that, did lie?

Mr. Morris. That is right.

Senator Tydixgs. Was he an emi:)loyee of the State Department?

Mr. Morris. I have reason to believe, althon^h he refnsed to disclose
his source, that he got his information directly from a member of the
State Department.

Senator Tydings. So he does not know that himself; he was told by
somebody else?

Mr. Morris. That is right.

Senator Tydikgs. Did the other man who supposedly told him, and
whom you don't know

Mr. Morris. Whom I don't know.

Senator Tydixgs. Did he work in the State Department?

Mr. Morris. It was my understanding that he was in the State
Department.

Senator Tydings. Did this man tell you that he did?

Mr. MoRR[s. No; but I have a strong suspicion that he was.

Senator Tydings. I see.

Mr. ]\IoRRis. That is why I think there is no conclusive way of de-
termining tliat, Senator, exce])t to bring Mr. Grew and Mr. Ballantine
in and ask them.

Senator Tydings. Suppose it is so, what would it matter?

INIr. Morris. 1 don't know.

Senator Tydings. Does it have anything to do with the Amerasia
case?

Mr. Morris. Conceivably, Senator.

Senator Tydings, I don't see what connection there would be, my-
self. I would be delighted to have any light thrown on it if it ties in
in any way.

Mr. Morris. Senator, the people involved in the Amerasia case,
some were in the Far Eastern Division of the State Department. We
have had considerable testimony duiing the last several weeks •

ISIr. Morgan. I do not want to interrupt the questioning, Mr. Mor-
ris, but I woidd like so say, Mr. Chairman, that Mr. Heald, who is with
us today and, of course, is assistant counsel on our staff, has inter-
viewed Mr. Grew and we have here a statement signed by Mr. Grew
relating particularly to the Amerasia case, and I think at the ap-
propriate moment I would like to suggest that Mr. Heald read it
into the record, xdth General Holmes here, inasmuch as he and Mr.
Grew were associated at that time.

There may be some questions that this statement will elicit.

Senator Tydings. Have you finished ?

Mr. ISIoRRis. I believe that is all.

Senator Tydings. Go ahead and read the statement.

Mr. Heald, have you ever been sworn?

Mr. Heald. Xo, sir; I have not.

Senator Tydings. 1 suppose, if you are going to read that, that 1
]iad better swear you in.

Do you solenndy promise and swear that the evidence you shall
give in the matter before the committee shall be the truth, the whole
truth, and notliing but the truth, so help you God?

Mr. Heald. I do.



STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION 1179

TESTIMONY OF EOBEET L. HEALD

Mr. ^loKOAX. I ini^lit ask a low pi't'liniiiKiry (jucstions.

Senator Ty'dings. Go ahead, and have hhn give his name, and so
forth.

Mr. AToROAx. What is your name?

Mr. IIkald. R()I)oi-t L.'Heahl.

JNlr. ^NIoKGAx. AMiat is yonr present capacity with this subcommit-