guaranty and 6 percent asked of the Darling Stores Corp. during the early negotiations. As a matter of fact, Darling Stores Corp. had in several letters during negotiations offered Roane-Anderson Co. considerably more guaranty and percentage than the award was finally made on. Roane-Anderson claimed in August that negotiations were falling through and the only way they could grant a reduction in rent in view of their "standard policy" was to advertise the store as being open to bids from the general public. Roane-Anderson and the Atomic Energy Commission have laid great stress on this "policy." In actuality, they have no policy whatsoever. They have granted reductions in rent without advertising in public for bids to other stores in Oak Ridge. Many of their leases are awarded by private negotiation and not through public bidding, and no one else is allowed a "look-in." Naturally, they claim all their leases are confidential, which may, or may not, be within the scope of the United States Code covering public properties. However, it seems to me that if all public properties and moneys were handled in this confidential manner by private negotiation, things might become very sad for the general public. Commercial rental space in Oak Ridge is very, very scarce, and it is almost impossible to get another location in this city. It is very simple for the renting agents and AEC to freeze you out regardless of how high you bid, or how efficient and honest an operator you are. They merely state that yours is not the "most acceptable bid." This phrase can cover up a great deal, and the stock answer to a question of what is the most acceptable bid is always that all bids are confidential, and so forth, even after the location has been awarded to some other party. Roane-Anderson seems to have no consistent rental policy whatsoever and there really has been no consistent application of the "high bid" rule or the "most acceptable bid" rule. A bidder never knows which will govern and as a consequeuce Roane-Anderson and AEC can argue any way they wish to why they awarded any particular bid, since they seem to have no rules to go by. As a matter of record, the Roane-Anderson attorney stated during a court action in this case at Jacksboro, Tenn., before Chancellor Joe Carden on February 9, that Roane-Anderson can award a bid on any basis it wishes, including whether or not it likes the color of a man's hair. The latter policy is certainly not a very efficient method for awarding leases on United States-owned property. The fact that Taylor's bid was not being seriously considered, even though it was a higher bid than Loveman's, was demonstrated very forcibly to me shortly before Christmas, 1949. It should be noted that the final date for receiving bids on this store was December 15, 1949. The final decision was not made by the Atomic Energy people until around January 6, 7, or 8. Now, as a matter of record, the letter from Roane-Anderson to the Atomic Energy Commission making the recommendations as to who the store should be awarded to was stated somewhere between the 4th and the 6th of January. Therefore, it did come after the date by which the Loveman bid technically died, January 1. That is a matter of record. You have that in your file. (Taylor's was not notified until January 10.) So, certainly before Christmas of 1949 the matter was still under advisement by Roane-Anderson, and possibly AEC. Mr. Harold B. White, formerly referred to as manager of the commercial realty division, was at my book department at Taylor's around December 22, 1949. Knowing that the store was up for bid, and naturally being worried over the position I would be in if we lost the store, I asked Mr. White what he would do with my inventory if he were in my position, and Mr. White's answer was: "I would sell out to the bare walls." My wife also heard this statement and I have her sworn affidavit to that effect. That sworn affidavit is here, and I would like to enter it into the record. Taylor's department store has been placed in the position of a baseball team that scored the most runs and thought it had won the game when suddenly the umpire decides that he doesn't like the color of the winning team's uniform and awards the win to the team that scored the least runs. To carry this analogy further, we are in about the same position as if we had gotten the most votes, but lost the election. I ask that this subcommittee, in all fairness and justice, make a recommendation to the full Joint Atomic Energy Committee that the award of this lease to Loveman's be canceled and that a new lease be granted to Taylor's department store, and that very strong representatives to the Atomic Energy Commission be made so that this new lease with Taylor's can be consummated. It is to the best interests of the Government to continue to have a reputable operator like Taylor's in this store inasmuch as the Government will receive a guaranteed greater revenue than can be obtained from Loveman's. Also, Taylor's department store has served Oak Ridge for 3 years and 5 months and is in a very strong position to know just what the vast majority of Oak Ridgers want and will buy. In addition to conducting the Taylor operation on the same high plane as in the past, further improvements and services can be adopted because of having a long-term lease instead of a year-to-year lease, subject to cancellation. I would like to make an addendum to that testimony. In the conducting of my business, I am in the store quite a lot. From the middle of December on, so many customers came to me suggesting that we were going to lose our lease. Now, I grant you, this is rumor and second-hand information, but it still is a fact that I heard these remarks made to me in my place of business, that Taylor's was going to lose the business, and the business was going to go to Loveman's of Chattanooga. I naturally gave that quite a lot of consideration. I didn't know what position I would be in if I did lose the lease, so around December 30, around the 28th to the 30th, I went to Chattanooga and discussed the possibility of entering into a lease department arrangement with Mr. Richard Moore and Mr. James Moore of Loveman's, Inc., the owners, the president and vice president of Loveman's, in Chattanooga. During the course of the conversation, they asked me several questions about what I thought of Oak Ridge as a business possibility, and they indicated to me that they were in the driver's seat with regard to this lease. Now, mind you, no decision had been made by the Atomic Energy Commission or by RoaneAnderson at that time, who make the recommendations to the AEC. I would like to read this sworn affidavit. It will just take a couple of minutes, and it concerns these very things. This is a sworn affidavit to the State court of Tennessee: On several occasions from the end of August through December 1949, Mr. White stated to me that Taylor's did not have much of a chance for renewal. I would like to omit the next, which is a repetition of what I had in my statement, here, and I would like to read this: Shortly before Christmas 1949, not less than 100 customers informed me that it was their understanding that Taylor's had lost its lease. Many of them stated that Loveman's of Chattanooga was being given the lease on the premises. On the morning of December 28, 1949, I called Harold White, the manager of Roane-Anderson concessions department for the purpose of further verifying whether there was any truth to the statements made to me that Taylor's would lose its lease. I asked him point-blank whether it was true that Loveman's had been awarded the lease on Taylor's premises. He evaded answering this question directly but did state that Loveman's had a "very strong proposal," and had a "strong chance of getting it." On the basis of his remarks, and because I knew that he was in a qualified position to know what was happening, and because I was naturally concerned about my own position in the matter, on the very same day I traveled to Chattanooga for the purpose of discussing the matter with Loveman's, with the idea in mind that if it was true that Loveman's had the new lease I would attempt to negotiate a lease with them on my own behalf. I was given an audience by Mr. Richard Moore, president of Loveman's, and Mr. James Moore, vice president. I stated my case to them very clearly, stating that I had heard that Loveman's was being granted a lease at Oak Ridge on the premises occupied by Taylor's that I operated the book and cosmetics department in those premises, and that if Loveman's did have the new lease I wished to discuss the matter with them. James Moore stated that Loveman's was in the "driver's seat" with respect to obtaining a lease on Taylor's premises, and that Loveman's felt they could get the location on its own terms. He further stated that "all we have to do is to say we want it." He advised me that Mr. Winfrey had discussed the matter with them on several occasions, and had "begged us to take the lease." In further discussing the matter Mr. Moore stated that Loveman's had not intended putting a minimum guaranty in their bid, but were advised by the Roane-Anderson people that this was essential, and for this reason alone a minimum guaranty was set forth in its proposal. Although Mr. Moore did not commit himself to me that he did have the lease, he made the remark that he would consider leasing a few departments at the Oak Ridge operation, which indicated to me that as far as he was concerned, the lease was theirs. A further indication to me that the leasing of the premises by Loveman's was an accomplished fact was Mr. Moore's statement that it was the company's intention to use old fixtures from their Chattanooga operation in the Oak Ridge store. He further stated that for the first 6 months of their operation in Oak Ridge they intended "taking it easy" to see how the operation progressed. I left my meeting with these gentlemen with the clear understanding that Taylor's was "out," and Loveman's was "in." I think that is all I have to say with reference to that. I would like to read my wife's statement. I, Hilda Simmons Levitt, do solemnly swear the following to be truthful and honest statement of facts. A few days before Christmas 1949, Mr. Harold White, manager of the commercial realty department of Roane, Anderson Co. was in the book_department in Taylor's. I was standing next to him and my husband. Mr. Levitt was concerned about the continuation of his business in the Taylor location in view of the persistent rumors that Taylor's would lose its lease and in view of the fact that the store was up for bid. In the course of conversation, Mr. Levitt asked Mr. White, "What would you do if you were in my shoes with all this inventory?" Mr. White replied, "I would sell out to the bare walls." That is sworn to by Hilda S. Levitt and witnessed by Kathryn Dodge and bears the signature of Ethel D. Glenn, notary public. Mr. ELSTON. I would like to ask: To whom did Mr. White make the statement that "We are going to teach these guys a lesson"? Mr. LEVITT. To me personally. 63888-50- -3 Mr. ELSTON. What date did he make that statement? Mr. LEVITT. It was in the month of September 1949. I don't remember the exact date. It was shortly after the negotiations had reached the point where Roane-Anderson had decided to open the store for public bidding; in other words, advertising the store for public bidding. Mr. ELSTON. Did he give any reason for that? Mr. LEVITT. Yes, he discussed Mr. Hall, as I stated in my affidavit. He said Mr. Hall thought he was too smart for the Roane-Anderson people, and the Roane-Anderson people were taking exception to it, or something to that effect, and "we are going to teach these guys a lesson." I gathered the impression that Mr. Hall had rubbed them the wrong way, or something, during the negotiation. I know Mr. Hall, and he is a very normal individual, and very retiring sort of fellow, and still there could be a clash of personalities somewhere over some phase of the bid or lease. Mr. ROTH. Mr. Chairman, may I just take one more minute on our case, first to insert this telegram dated January 10 advising us of the award to Loveman's? It is a very simple telegram. It says: Award of department store location was made to Loveman's of Chattanooga. Appreciate greatly your consideration in filing application with us. It is signed: "Roane-Anderson Co., C. M. Winfrey." I would like also to have sworn Mr. Stanley Roth, executive vice president of Darling Stores Corp., to complete the record in connection with what happened after that, because I think the chairman is particularly interested in that. Mr. HOLIFIELD. What would be the nature of his testimony? Mr. ROTH. Just in connection with the discussions and what happened after January 10, after that award, because there is some indication that the members of the committee were interested in the subsequent happenings. Mr. HOLIFIELD. All right. Take the chair, Mr. Roth. Do you swear that the information and testimony you are going to give to this committee will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. STANLEY ROTH. I do. Mr. HOLIFIELD. Mr. Roth, will you please make your statement brief; because time is running on, and we want to get to the rest of these people. It may be impossible for us to hold another day's hearing. TESTIMONY OF STANLEY ROTH, EXECUTIVE VICE PRESIDENT, DARLING STORES CORP. Mr. STANLEY ROTH. As the record shows, I am executive vice president of Darling Stores Corp. Mr. HOLIFIELD. Your testimony will not cover any of the testimony that has been given? Mr. STANLEY ROTH. No, sir. Mr. HOLIFIELD. All right. Mr. STANLEY ROTH. In the course of the communications back and forth with the Atomic Energy Commission and the various Senators, the statement was made two or three times that opportunity was given to me personally, Stanley Roth, to rediscuss the situation with Mr. Cook, manager of the Oak Ridge operation of the Atomic Energy Commission, subsequent to our being notified that we had lost the lease position in Oak Ridge. The Congressman has asked the question as to whether there was any subsequent conversations or negotiations. I wish to let you know what they were. I personally called on Mr. Towne, an appointment with whom was made by Mr. Strauss of the Atomic Energy Commission. We had a long discussion. Mr. Roth was present, and also Mr. Marx, our real-estate representative. At the conclusion of that conversation, Mr. Towne told us that we would hear from Mr. Cook, who was the resident area manager for AEC. Mr. Cook, the following day, after my return to New York, did call me up. Now, Mr. Cook said that he would be willing to discuss with me, if I should come to Oak Ridge, this: namely, a possible extension of 30 days or so, to permit a more orderly liquidation of our stocks and investment in the stocks, and investments of the subconcessionaires. Mr. HOLIFIELD. Was that after you had filed in the local court? Mr. STANLEY ROTH. This was the 19th of January. Mr. HOLIFIELD. Was that after you had filed for an injunction against the eviction in the local case? Mr. STANLEY ROTH. No, sir, it was before we had filed in connection with the eviction, but after we had wired protests. The provision, however, which Mr. Cook laid down for this conversation which might ensue in Oak Ridge, Tenn., was that we must accept the final decision of the award to Loveman's. I asked him specifically over the telephone if that decision were irrevocable, and he said yes, it was irrevocable. In other words, I was supposed to go, at his invitation, to Oak Ridge to discuss an irrevocable decision, so far as the main body of the problem was concerned, but he would be willing to explain to me why they had made the decision and possibly entertain a suggestion concerning an extension of time in which we might liquidate in a more orderly fashion. I asked Mr. Cook to confirm his conversation by wire. This is the wire, and I should like to enter it in the record. It is dated the 20th of January and addressed to me: Info sent to Walter J. Williams, U. S. AEC, Washington, D. C.: In confirmation of my telephone call this afternoon I will be very glad to discuss with you your feeling that continuation in business at the Taylor location beyond January 31 is necessary for an orderly liquidation. Any agreement reached on such an extension will necessarily have to be covered by a supplement to your existing contract. The decision on the award of space now occupied by Taylor's to Loveman's has been made and will remain firm. I regret that you have not previously availed yourself of discussions with either Mr. Leroy MacNeal, project manager for the Roane-Anderson Co., agents for the AEC, Mr. Fred Ford, director of community affairs for the AEC, or myself prior to this time. Understand that you will call either Monday or Tuesday to arrange for a meeting early part of next week, the time being dependent upon when you can have your attorney accompany you. R. W. Cook, Manager, Oak Ridge Operations. We received another wire from Mr. Cook, dated the 24th of January, also addressed to me: This is in confirmation of my telephone conversation this date with Mr. Stanley Roth, vice president, Darling Stores, Inc. As you know, Loveman's proposal has been accepted. However, we would be happy to have you come here to |