They, therefore, laid the predicate for their prosecution on that
statute which did not require the element of proof with respect to
the character of the documents. In other words, they just side-
stepped the problem of having; to make that additional order of proof,
and that was done, as I understand it, by reason of their feelin*? that
in all probability there were a great many of these documents which
they could not sustain as national defense documents in the mind of
a court or in the mind of a jury. That is the only way, as I under-
stand it, in which this question of the character of the documents
enters the picture, because I think everybody admits that Jaife et al.
had no business with the documents.

Senator Lodge. Well, I think, leaving out the legal technicalities,
it must be obvious to everyone that it is a matter of tlie utmost impor-
tance as to whether these clocumeuts were important documents or
whether they were silly teaci p-gossip documents.

It seems to me that is fundamental in this whole thing, because if
they were silly, we are wasting our time, because at the very opening
of this meeting, Mr. Mclnerney made that statement; it was extraor-
dinary statement to make because it, in effect, says "That we in the
Department of Justice are better qualified to pass on military docu-
ments than the military.''

I think it is very important to get military statements on these
documents to see whether they are important or not.

Mr. Morgan. You see, the only consideration from the prosecuting
standpoint that entered into the Department of Justice's view of the
case was whether or not these documents related to the national defense.
Now, the case of Goren versus the United States has laid down what a
document is which is related to the national defense, and by that
standard, with which the Department of Justice was confronted, they
felt they could not sustain a substantial number of these documents,
as such. For that reason they laid the predicate for the prosecution
without having to go into it.

Senator Tydings. The burden of proof.

Senator Lodge. Why did he come in here the first day and presume
to belittle it?

Mr. Morgan. He did so. Senator Lodge, in the light of the require-
ment of the law that they be national defense documents. I think
that is what he was doing, and that was what Mr. Mclnerney, I am
sure, was talking about. It is what he so said today.

Senator Lodge. When the law lays down a criterion as to what is a
national defense document

Mr. MoRfJAN. The law requires that the documents, to come under
that particular portion of the statute, must relate to the national de-
fense documents. Whether they are or not documents relating to tha
national defense, as the statute requires, is a question of fact to be
determined by a jury or by a court sitting without a jury. The case
of Goren versus the United States is, })erhaps, the leading case on
what it takes to constitute a national defense document and, I think.
Senator, upon reading that ease you will fiud and agree that a very
great many of these (1o(•lllHp)lt^. while significant, could not be sus-



t^"



STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION 1465

(iiiiied as national defense documents — as documents relating to the
national defense.

Mr. Morris. E^-en if some of them were?

Senator Green. Yes. Wh}' was it necessary to prove all of them
were ?

Mr. Morris. If some of them were, that is enough.

Senator Tydincs. What INIr. Morgan is commenting on is not that
some of them were not.

Senator Green. If -dwy of them were that would have proved a case.

Senator Lodge. If the War Department had decided that a docu-
ment ought to be top secret would that not tend to persuade the
average member of the jury?

Mr. Morgan. In Goren versus the United States the court pointed
out quite clearly that the fact of the classification did not ipso facto
make the document one relating to the national defense. You see,
that is something that has to be established bj^ independent proof and,
as I have said, the Department of Justice sought to avoid having to
make that additional proof when they had two statutes under each
of which there could be n-eted out the same punishment to the de-
fendant. That is what I aui trying to say.

So, in contemplation of the punishment possible, the question of
the documents becomes in that sense an academic one because the
punishment would have betai the same in either event.

Senator Lodge. Why does he want to run down the importance of
the documents?

Mr. Morgan. I am not here to defend Mr. Mclnerney, but he was
doing that to explain to us just why it was that they changed the
predicate of the prosecution from one section, section 31, to the section
dealing with embezzlement, because the first section required the es-
tablishing as an independent element that the document related to
the national defense.

Senator Ttdings. And the penalty was the same no matter which
one of those statutes they were tried under.

Mr. Morgan. Mr. Mclnerney not being here, in fairnass it should
be said that his answer was right in line with the question we
asked. A^Hiy was it that they shifted from the conspiracy to connnit
espionage under section 31, to conspiracy to embezzle documents, and
that was part of the testimony in explaining why he did it.

Senator Lodge. I certainl}^ would like to get a military judgment
on those documents.

Mr. Morgan. I personally. Senator, am willing to concede for the
purpose of our present discussion that every one of them might have
been a military document.

Senator Lodge. All through that record you can see page after page
after page — I have jotted it down wherever it occurred — almost every
witness except Mr. Mclnerney says that these documents were im-
portant.

Mr. Morgan. It is all through the record.

(Discussion off the record.)

Mr. Morgan. From reading the grand jury testimony apparently
Mark Gayn made quite a point of the fact that it was a common prac-
tice to pass on information of this kind. As I understand it, the
grand jury was apparently impressed with that, at least they did



1466 STATE B'EPARTAIENT EMPLOYEE LOYALTY INVESTIGATION

not indict him, and I think that they — ^probably if the grand jury
had the job of also taking those documents and making the additional
finding that they related to the national defense in contemplation of
Such testimony, that it might have been difficult securing the indict-
ments that they did secure. I do not know that to be true, but it is
merely in consideration of the question you just asked. Of course,
I do not know that, it is only a thought.

Senator Green. Then it was a mistake in bringing the lirst indict-
ment.

Mr. Morgan. No. You see, there was no first indictment. At the
time the complaints were filed for the warrants of arrest, they were
filed charging conspiracy to violate that section, conspiracy to pur-
loin documents relating to the national defense.

At that time they felt that was the theory of the case they wanted
to i^roceed on. As they studied the documents subsequently, they felt
they wanted to avoid taking on that burden.

Senator Tydings. And the penalty was the same in both cases.

Senator Lodge, So far as I am concerned the thing was terribly im-
portant. It is important in two things. I think most of the docu-
ments themselves are intrinsically important and could have involved
life and death.

Mr. Morgan. There were important documents ; no question about it.

Senator Lodge. There was no earthly reason for coming up here
and telling us that they were not important.

Secondly, the thing was important because it opened up probably
the most used source for obtaining documents for foreign govern-
ments, and it gave the other departments leads that were useful to
them in preventing the purloining of documents for foreign govern-
ments in the future; so I think the thing is very important, and no
good purpose is served by trying to pretend that it is not.

On May 26 Hitchcock testified that Gayn, one of the six that were
arrested in the Amerasia case, had received Government documents
from two Government employees identified as George Edward Taylor,
Deputy Director of Area 3, OWI, and from Taylor's subordinate,
Elizabeth Downing Barker.

Hitchcock also said at the time Gayn was arrested, the FBI seized
60 items, of which 22 were Federal Communications Commission re-
ports and about 20 were copies of State Department papers.

Has the subcommittee further pursued this line of inquiry, particu-
lai'ly with reference to the two Government employees named, with a
view of determining whether any leads into the State Department
could be established ?

Mr. Morgan. Both of those parties testified before the second grand
jury, and we have reviewed their testimony. Mrs. Barker testified that
she did give those documents, OWI documents, to Gayn, declassifying
them as she did.

The other documents, according to the evidence, Gayn probably ob-
tained from Jaffe. I do not think there is any question that she gave
him copies of the others.

Mr. Morris. How about Tavlor ?

Mr. Morgan. Taylor, there is a discrepancy in the record. Taylor
indicated he did not extend such authority to Mrs. Barker, and Mrs.
Barker said that he did. Manifestly, of course, the grand jury had



J



STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION 1467

them before it, aiul ai)pareiitly chose to believe ]Mrs. Barker because
they did not return a true bill acrainst Gayn.

Senator Lodge. Taylor and Barker are still in the Government?

^Iv. AfouciAx. Not to my knoAvledo;e either way; I do not know.

Mr. ^loKKis. There is some testimony today about George Taylor.

Senator Lodge. Does it not seem to you that we ought to call Mrs.
Blumenthal. who was mentioned several times during the testimony,
and who pui'j)ortedly typed for Jaffe the Government documents?

Mr. ]MttKG.\x. 1 think we have the testimon}' of Inspector Gurnea
on that to the effect that it was admitted that Mrs. Blumenthal did
type the documents, but it was felt she would probably be better in
the capacity of a helpful witness rather than a defendant. We have
that available to us.

Senator Lodge. Have you tried to find out why Lieutenant Roth
was not court-martialed bv the Navy for his complicity ?

Senator Tydixgs. Yes; I have asked for it. It is all in this letter.
I wrote 2 weeks ago and asked them why they had been taking all
this time.

Senator Lodge. There were thousands of people who were court-
martialed for infinitely less.

Senator Tydix^gs. He should have been court-martialed whether he
was guilty or not.

Senator Lodge. "WHien Larsen's motion to suppress was served on
the De])artment of Justice, has the subcommittee determined whether
the FBI was asked to prepare a report of the facts concerning the
seizure of the documents for the use of the Department of Justice in
litigating this question ?

Mr. Morris. May I at that point say, Senator, that I have addressed
an inquiry to the chairman of the committee, and I understand the in-
quiry has been passed on to the Justice Department. I have renewed
it three times that we get the FBI memorandum which was a refuta-
tion of the affidavits set forth by Larsen's attorney.

Mr. INIoRGAX. "Well now, my recollection of that, Mr. Morris, is that
it was a refutation in this sense : In his affidavit Larsen charged FBI
agents with certain conduct which, if true, would be improper on the
part of agents effecting an arrest.

The memorandum which the FBI had submitted, as I recall, was a
memorandum designed to show the true facts, to show that the acts of
the agents were proper under the true facts, and it was not a memoran-
dum directed to the legal sufficiency of Larsen's motion to quash.

Mr. Morris. It was directed to the facts

Mr. Morgax. It also went into the question, also pointed out, of
course, the fact that Larsen had moved from one a]')artment to an-
othei', but I repeat. Mr. Morris, that the FBI's memorandum was
directed to facts, with respect to the performance of its agents rather
than to the question of the legal sufficiency of Larsen's motion.

Now, I am sure if we make an effort. Mr. Chairman, we can get
that memorandum without too much difficulty.

Senator Tydixgs. Of course, I agree with what you said, and we
have, in addition to that, the statement of the Department of Justice,
which is the FBI, showing the number of times they went into these
various places, so that the facts were pretty one-sided on that score.



1468 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Mr. Morris. But an entrance there, Senator, is not necessarily il-
legal. That is one of the determinations we have to make here. An
entry into a house or into premises by the FBI is not necessarily
illegal.

Senator Ttdings. Without a warrant ?

Mr. Morris. Without a warrant it is not. If they go into the
premises in order to determine the scope or the direction of enemy
agents and what they are doing, that is one thing. If they go in to
collect evidence to be used in prosecution, that is a second thing. I
think that is the distinction.

Senator Ttdings. I think I will be able to give you in our final testi-
mony a complete picture of all of that, which I am not in a position
to give you today because I have not it complete, but I am having
that complete picture perfected and it will be right in the middle of
the record.

Senator Lodge. Of course, it is customary for the FBI to prepare a
report on the occurrence of such a thing.

Mr. Morgan. I have not seen this complete report except that my
understanding of what it is, because I have been told

Senator Lodge. It does exist?

Mr. Morgan. But, as I understand it, it was a memorandum of the
FBI which it would certainly always want to do if any of its agents
was charged by anyone by having indulged in or engaged in improper
conduct. I think our problem will be resolved when we get it, as we
will.

Senator Lodge. You will have a chance to study it.

(Discussion off the record.)

Senator Lodge. Let me ask you this. It is apparent to me from
reading this record that tlie attorneys for the Department of Justice
in their heart of hearts thought that Jaffe was guilty, but they thought
the evidence was tainted for some legalistic reason. Why did they
proceed to go before two grand juries with this evidence in an attempt
to obtain this indictment if they thought the evidence was tainted?

Mr. Morgan. That is what I am trying to tell you. If I understand
the testimony, pursuant to a specific question I asked Mr. Mclnerney,
apparently they were operating on the principle, whether rightly or
wrongly, that what the defendants did not know about the prior entries
would not hurt the prosecution.

When one of the defendants did find out about what happened, then
it was quite a different matter.

Senator Lodge. If they had this feeling in their bones, as apparently
they did, that Jaffe was guilty, why didn't they try to get him some
other way I After all those of us who are not lawyers, we constantly
see — take the case of Al Capone; they could not get him from boot-
legging, so they got him on his income tax, and we know that when
lawyers want to get somebody they have lots of ways.

Mr. Morgan, Right now we have a way to get Jaffe if all of yom
gentlemen will sign that contempt citation.

Senator Lodge. It may. Why did they not make any effort to get
him on his income tax, do you know? Does the record show?

Mr. Morgan. No; I do not know that they deliberately set out to
get Jafl'e after the case was disposed of, as it was.



STATE DEPARTMENT EMPLOYEE LOYALTY IISTVESTIGATION 1469

Senator Lodge. If they felt, as Mv. Hitchcock apparently does feel,
from readin<r the record, why didn't they try it ^ There was a war
on, after all, and fellows were being killed.

Mr. MoRGAX. Of course, I do not know that the prosecuting officials
of the Justice Department, when a case is disposed of not to their
liking, I do not know whether they try to set out to get a guy.

Senator Lodge. Look, what they dicl to Al Capone, There was not
even a war on. They got him on his income tax. He had not done
anything as bad as these fellows?

Mr. ^loRGAN. I do not know.

Senator Lodge. I am asking you.

Mr. Morgan. I do not know, Senator, why they did not go after him
in some other fashion. I do not know whether Mr. Jaffe violated the
income-tax laws, and I do not know whether they would have been
constantly checking on him.

Senator Lodge. I think they would have told us if they had, don't
3-ou think ?

Well, the record shows that Jaffe bribed Larsen to get the docu-
ments. Why didn't they go after him on a bribery charge? It is ille-
gal to try to bribe somebody.

Mr. MoRGAX. As I understand the record, Senator, it would be a
characterization of the testimony to say that Larsen was bribed. Lar-
sen has said consistently and insistently that he received no money
from it. It is known that ]Mrs. Larsen typed at Larsen's apartment
the documents for which Jaffe gave her money amounting to as much
as $75, $100 a month.

Senator Lodge. There you are, and certainly it must be against the
law to liribe a man who is working in a Government department.
Why did they not go after Jaffe for that ?

]\ir. Morgan. I doubt, Senator, very much on the basis of the evi-
dence and, of course, it would require a check from the particular
standpoint of the bribery statute — I doubt very much if the bribery
evidence in this particular case would sustain a bribery count.

Senator Lodge. You certainly will not accomplish anything if you
do not try. If you take counsel with fears and try to see all the
obstacles, why, of course, nothing is ever accomplished. Thank you.

Mr. Morgan. Correct.

Senator Green. I would like to have a discussion off the record.

(Discussion off the record.)

(Whereupon, at 5 : 25 p. m., the subcommittee adjourned subject to
the call of the Chair.)



STATE DEPARTMENT EMPTOYEE
LOYALTY INVESTIGATION



WEDNESDAY, JUNE 28, 1950



United States Setstate,
Committee ox Foreign Relations,
Subcommittee Appointed Under Senate Resolution 231,

Washington^ D. C7.



EXECUTI^^ SESSION



The subcommittee met, at 2 o'clock p. m., m i'oomG-23, United
States Capitol, pursuant to adjournment Monday, June 26, 1J5U,
Senator Millard E. Tydings (chairman of the subcommittee) pre-

^^'^Pilsent: Senators Tydings, Green, McMahon, Hickenlooper, and

°aTso present: Mr. Edward P. Morgan, chief counsel of the sub-
committee, and Mr. Robert Morris, assistant counsel of the sub-
committee. , . . » , .
Senator Tydings. We have had prepared citations for contempt
with respect to Browder, Field, and JafFe which will be reported to
the full committee for action, with our recommendation that the lull
committee put them in the hands of the proper officials of the courts tor

^"^Sliall the record show that it is the sense of the committee that that
action be taken ?

Senator Lodge. Yes.

Senator Green. I make that motion.

Senator Tydings. Do you second it, Cabot?

Senator Lodge. Yes. i wi . .i ^u

Senator Tydings. It has been moved and seconded that the thr^
citations enumerated be approved as the sense of the committee and
the full committee be asked to take appropirate action thereon.

Senator Hickenlooper. Now I have something I want to say.

Senator Tydings. Do you want to vote on it first?

Senator Hickenlooper. No. I want to make a statement before we
vote I think such action should be taken. I am not hostile to it. The
only point I want to raise is that the citation, drawn by counsel, was
submitted to me the other day, and I didn't sign it at that time becmise
I said I merely wanted to discuss the adequacy of the citation. Now
there are only two or three things in there which are referred to, and
1 wanted to raise the question, because I am not familiar enough with
the citation, as to whether or not we should certify the whole record
of these people or just hang our hat on one of two things.

Senator Tydings. What is your thought ?

1471



1472 STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION

Mr. Morgan. Tlie answer to that, Senator, is this. In the body of
our report relative to the citation, we certify the entire record and
the portions of the testimony quoted by it are ilhistrative of the
predicate whicli we feel properly lies in their cases. In other words,
the entire record is certified, and the United States attorney's office will
have it all available incident to prosecution.

Senator Tydings. Are the pleadings sufficient ?

Senator Hickenlooper. That is exactly what I am raising. Is the
citation for contempt limited solely to the things you set out in our
certification as the things we are supposed to sign, which I am per-
fectly willing to sign if they are adequate, but I merely wanted to be
sure that counsel is of the opinion that we are not circumscribing
ourselves by only referring to these things by way of illustration.

Senator Tydings. Is the citation so drawn that the entire testimony
is a part thereof for the purpose of pleadings?

Mr. Morgan. Yes. There can be no question about that under the
law.

Senator Tydings. That is the answer.

Senator Hickenixioper. That was the only thing I wanted to be
sure was in the record.

Senator Tydings. Where are the signatures you want ?

Senator Hickenlooper. I would like the record to show that we are
not limiting ourselves to two or three specific illustrations or citations.

Senator Tydings. Let's move along. What is your next problem?

Senator Green. We haven't put the motion to a vote yet.

Senator Tydings. All those in favor will signify by saying "Aye."

(Chorus of "ayes.")

Senator Tydings. Opposed ?

(No response.)

Senator Tydings. Present are Senators IMcMahon, Green, Lodge,
Hickenlooper, and Tydings. All votes are in the affirmative.

Mr. MoRrjAN. Pursuant to various requests we have made of different
agencies of the Government, we have received certain replies, most
of which are addressed to you as the chairman of the committee. I
think that this material all has relevancy to these proceedings and,
with your permission, I would like to indicate, one by one, what they
are and, if agreeable, incorporate them in the record.

Pursuant to a request made of the Department of Justice by the
chairman relative to some conflicting information which we have con-
cerning the entries and the character thereof made by representatives
of the Department of Justice in the course of the Amerasia investiga-
tion, we now have a reply, dated June 13, 1950, to the chairman, indi-
cating the occasions upon which the premises of Amerasia, Mark
Gayn's residence, the aj^artment of Kate Louise Mitchell, the apart-
ment of Philip Jaffe, the apartment of Larsen and Andrew Koth were
enteied.

(This letter is retained in the confidential files of the committee.)

Mr. Morgan. At one point in our record, an inquiry was made by
one of the members of the committee — as I remember, it was you,
Senator Lodge; correct me if I am wrong — concerning the depart-
mental observation relative to the credibility of Mr. Louis F. Budenz.



STATE DEPARTMENT EMPLOYEE LOYALTY INVESTIGATION 1473

We have a letter, dated May 16, 1950, addressed to the chairman,
as follows:

Reference is made to your letter of May 5, 1950, to the Attorney General re-
questing the Department's observations concerning the credibility of Louis F.
Budenz as a witness.

It is the Department's view that the tribunal before which a witness appears
is and sliould be the complete judge of the credibility of the witness, since this
judgment is based upon the evidentiary matter involved and the numerous ele-
ments involved in the confrontation process.

You will, I believe, completely understand the Department's regret tliat it
cannot be of assistance to you in your evaluation of the testimony of Mr. Budenz.

Peyton Fokd,
The Assistant to the Attorney Oeneral.

Senator Lodge. I do not understand it at all. I think it is a most
unhelpful answer. I don't agree with it, and I think it is a great pity
we can't have J. Edgar Hoover before us. I made the statement many
times and I repeat it now : I regard that letter as most uncooperative.

Senator Hickexlooper. I might say it is a remarkable thing that
the Department of Justice will put this man on the witness stand and
sav to the jury that this man is to be believed as a part of the prosecu-
tion of this case and then say in a letter that they will not pass on his
credibility.

Senator Tydixgs. I understand it is a time-honored custom of the