Senator CANNON. Mr. Chairman, there is one other point that I do not think was mentioned-at least since I came in-and that is the travel service. Mr. Secretary, I think that this has been a good program, and I hope that you will carry it forward very forcefully, because it has meant a lot to our country and will continue to mean a lot if it is properly implemented and carried out.

Mr. CONNOR. I am enthusiastic about it. I think Secretary Hodges has made great progress, and I will try to see that that continues. The CHAIRMAN. I think we are up something like 32 percent according the last figures I saw.

Mr. CONNOR. A very impressive increase this last year.

The CHAIRMAN. Now, the only other department down there no one has asked you about that is very important-and I do not know whether you have any views on it or not-but do you intend to make any changes in the Weather Bureau?

Mr. CONNOR. I understand the Weather Bureau is in good hands. Although there are criticisms of its predictions from time to time, I guess this is the sort of thing that has to be taken in stride.

The CHAIRMAN. Well, I point that out because that is a big organization within the Department. Coast and Geodetic Survey is there also.

Mr. CONNOR. Yes, sir.

The CHAIRMAN. And you run the gauntlet of a great number of things that affect the economy of this country.

Now, the chairman wants to ask are there any other witnesses who want to testify for or against the nominee?

(No response.)

If not, the committee will

Senator NEUBERGER. Any reason why this man should not marry this woman? [Laughter.]

The CHAIRMAN. I remember Barkley's statement. He said, "I'll make a speech for you or against you, whichever will help you the most." [Laughter.]

Well, if there are no further witnesses, the committee will recess, and we thank you, Mr. Connor, for coming.

Mr. CONNOR. Thanks very much, Mr. Chairman.

The CHAIRMAN. The committee will go into executive session. (Whereupon, at 12:20 p.m., the committee recessed subject to the call of the chairman.)

APPENDIX

APPENDIX A

TRUST AGREEMENT

This Trust Agreement made in New York, New York, this day of January 1965, between JOHN T. CONNOR, domiciled at 49 Prospect Hill Avenue, Summit, New Jersey (called the "Settlor") and his wife MARY O'BOYLE CONNOR (called the "Co-Settlor") and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, New York (called the "Trustee")

WITNESSETH:

The Settlor hereby transfers to the Trustee all his interests in the assets described and as stated in the annexed Schedules A, B, C, and D and the Co-Settlor hereby transfers to the Trustee all her interests in the assets described and as stated in the annexed Schedules B and D-subject to the provisions of this agreement.

The Settlor and the Co-Settlor agree to deliver such other instruments as may be necessary or proper to effectively transfer to the Trustee all of their interests in the items listed in the said schedules.

1. The trust hereby created shall terminate at the conclusion of the Settlor's service as Secretary of Commerce of the United States of America, or at his death, whichever first occurs-which period is called the "Trust Term".

2. During the Trust Term, the Settlor and the Co-Settlor hereby direct the Trustee to prepare and file on their behalf joint or separate income tax returns required by the laws of the United States of America and any state (including the District of Columbia) in which they may be domiciled which imposes personal income taxes for the calendar year 1965 and for subsequent years which fall within the Trust Term. The Settlor and the Co-Settlor agree to furnish to the Trustee such additional information as the Trustee may from time to time require for the completion of such returns and to give the Trustee powers of attorney or other instruments in such form as may be required by the Trustee to enable it to prepare and file such returns, to represent the Settlor in the audit thereof, and to adjust, settle and pay the income taxes due and payable for the periods caused by such returns.

3. Subject to such amounts as the Trustee may from time to time reserve for the payment of income taxes payable by the Settlor and Co-Settlor as aforesaid, the Trustee shall pay to the Settlor the net income derived from the assets listed in Schedules A and C and shall pay in equal shares to the Settlor and the Co-Settlor the net income derived from the assets in Schedules B and D-and payments of income shall be made by the Trustee at such times and in such amounts as it deems appropriate, but at least quarterly.

4. The primary purpose of this trust is to entrust to the Trustee decisions as to when and to what extent the original assets of the trust are to be sold or disposed of and in what investments the proceeds of sale are to be reinvested, without any participation in such decisions by the Settlor or the Co-Settlor. Accordingly, the Trustee shall not at any time disclose to the Settlor or the Co-Settlor in any way what assets are for the time being held in the principal of the trust hereby created, notwithstanding any rules governing the administration of trusts which may be to the contrary. Nor shall the Trustee furnish to the Settlor or the CoSettlor copies of income tax returns filed by it.

5. The Trustee is empowered

(1) to acquire by purchase, by exercise of options, or otherwise, or retain so long as the trustee deems advisable, any kind of realty and personality— or undivided interests therein-including stocks of any class, unsecured obli

40

gations, interests in investment trusts and discretionary common trust funds-all without diversification as to kind or amount, without being restricted by any statute or rule of law concerinng fiduciary investments; (2) to sell for cash or on credit (at public or private sale), exchange, grant options to purchase or otherwise dispose of any real or personal property; (3) to join in, consent to or become a party to any reorganization, merger, consolidation, dissolution, readjustment, exchange, or other transaction and any plan or action thereunder or in connection therewith; to deposit any such property with any protective, reorganization, or similar committee; to delegate discretionary powers thereto and to share in payment of its expenses and compensation and to pay any assessments levied with respect to such property and to receive property under any reorganization, merger, consolidation, dissolution, readjustment, exchange or other transaction whether or not the same be authorized by law for the investment of trust funds;

(4) to exercise all conversion, subscription, voting, and other rights of whatsoever nature pertaining to any such property and to grant proxies, discretionary, or otherwise, with respect thereto;

(5) with respect to any real property (including real property acquired on foreclosure or by deed in lieu thereof) at any time held hereunder, to sell, exchange, partition, lease, sublease, mortgage, improve, or otherwise alter upon such terms as it may deem proper, and to execute and deliver deeds, leases, mortgages, or other instruments relating thereto. Any lease may be made for such period of time, including a lease beyond a five-year period, as it may deem proper and without the approval of any court;

(6) to extend the time of payment of any bond (or other obligation) and mortgage held by it, or of any installment of principal or interest or hold such bond (or other obligation) and mortgage after maturity as past due; to consent to the alteration or modification of any terms thereof; to foreclose any such mortgage or compromise or settle claims thereunder; to take over, take title to, or manage the property, or any part thereof affected by any such mortgage, either temporarily or permanently, and in partial or complete satisfaction of any claim thereunder; to protect such property against or redeem it from foreclosure or nonpayment of taxes, assessments, or other liens; to insure, protect, maintain, and repair such property; and generally without limitation by the foregoing specification to exercise with respect to such bond (or other obligation) and mortgage or such property all rights and powers as may be exercised by a person owning similar property in his own right;

(7) to borrow money from any person or corporation (including the Trustee hereunder) for any purpose without resorting to the sale of any assets; and for the purpose of securing the payment thereof, to pledge, mortgage, or otherwise encumber any and all such property upon such terms, covenants, and conditions as it may deem proper and also to extend the time of payment of any loans or encumbrances which at any time may be encumbrances on any such property irrespective of by whom the same were made or where the obligations may or should ultimately be borne on such terms, covenants, and conditions as it may deem proper;

(8) to register any property belonging to the trust in the name of its nominee, or to hold the same unregistered, or in such form that title shall pass by delivery;

(9) to abandon, settle, compromise, extend. renew, modify, release, adjust, or submit to arbitration in whole or in part and without the order or decree of any court any and all claims whether such claims shall increase or decrease the assets held hereunder;

(10) to determine whether or to what extent receipts should be deemed income or principal, whether or to what extent expenditures should be charged against principal or income, and what other adjustments should be made between principal and income, provided that such adjustments shall not conflict with well-settled rules for the determination of principal and income adjustments;

(11) to do all such acts, take all such proceedings, and exercise all such rights and privileges, although not hereinbefore specifically mentioned, with relation to any such property, as if the absolute owner thereof, and in connection therewith to make, execute, and deliver any instruments and to enter into any covenants or agreements binding the trust.

6. The Settlor shall have the right, with the consent of the Trustee, to deliver additional property to the Trustee which thereupon shall become a part of the trust, subject in every respect to the terms and conditions of this agreement.

7. The Trustee shall at any time and from time to time, upon the written directions filed with it and signed by the Settlor, make contributions or gifts on behalf of the Settlor for such charitable or personal purposes as may be specified in such directions. At the direction of the Settlor, the payments may be in cash or kind, they shall be made with securities selected by the Trustee at is sole discretion and without any participation in such selection by the Settlor. If at any time and from time to time the income of the trust is insufficient to meet what the Settlor in his judgment regards as important personal needs, the Trustee shall upon the written demand of the Settlor provide such sums to the Settlor as the Settlor may have specified. Such sums are intended to provide for, but shall in no sense be limited to the satisfaction of debts incurred prior to or after the date of this Trust Agreement and the purchase of an additional family residence.

8. The Trustee shall review the assets held in pledge, listed in Schedules C and D, and with the agreement of the pledgee vary the collateral in accordance with its best judgment.

9. The Trustee shall manage in separate accounts the items listed under Schedules A, B, C and D, respectively, and upon the expiration of the Trust Term the Trustee shall

(a) Transfer to the Settlor if he is then living, or if he is then deceased to the executors of his Will or the administrators of his estate, the then remaining principal attributable to his share of those assets originally listed in Schedules A, B, C, and D ; and

(b) Transfer to the Co-Settlor if she is then living, or if she is then deceased to the executors of her Will or the administrators of her estate, the then remaining principal attributable to her share of those assets originally listed in Schedules B and D.

10. The Trustee shall be compensated by an annual fee, computed annually, equal to one-tenth of one per cent (0.001) of the market value of the principal of the trust.

11. The validity, construction and administration of this trust shall be governed by the laws of the State of New York.

IN WITNESS WHEREOF this Trust Agreement has been signed, sealed and delivered as of the date first above written.

(John T. Connor, 49 Prospect Hill Avenue, Summit, N.J.)

DEAR SIRS: I request you to open a Custody Account in my name, and to hold therein, subject to the following instructions, 13,032 shares of the Common Stock of Merck & Co., Inc.

1. All dividends, whether in cash or stock, and if in stock whether in whole or fractional shares, are to be forwarded on my behalf to my trust account with your Trust Department, numbered PT __.

2. You are to exchange stock certificates if the stated or par value of any shares is changed; and to exchange securities of companies to conform with changes in their corporate titles. You are otherwise to retain the shares placed in this Account in the form in which they have been given.

3. I authorize you to sign for me and in my name any declarations, affidavits, or certificates of ownership which may be required from time to time in collecting income on my behalf.

4. I am a citizen of the United States and of the State of New Jersey. I reside at 49 Prospect Hill Avenue, Summit, N.J. I will promptly notify you of any change in my citizenship, residence, or address of record.

5. You are to accept and are authorized to open all mail directed to me in your care, but no proxy or other voting statements from the shares you will hold under this Agreement are to be forwarded to me.

6. I agree to pay you as compensation for your services a fee at the rate of one and one-half cents ($0.015) per share under custody. Out-of-pocket expenses incurred by you in connection with the operation of my account are to be charged to me.

7. On my behalf, on July 15, 1965, you are to turn over to my trust account with your Trust Department, numbered PT the shares you then hold

under this Agreement.

8. This Agreement is to terminate on July 15, 1965, or at my death, whichever first occurs.

Yours very truly,

Date:

JOHN T. CONNOR,

Accepted:

Address of record: 49 Prospect Hill Avenue, Summit, N.J.

MORGAN GUARANTY TRUST COMPANY OF NEW YORK.

By SPENCER ROSE

Assistant Vice President

APPENDIX B

JANUARY 11, 1965.

MEMORANDUM FOR THE COMMERCE COMMITTEE

Attention: Mr. Gerald B. Grinstein, Chief Counsel.

Subject: Relationship of conflict of interest statutes to the proposed appointment of John T. Connor to be Secretary of Commerce.

This memorandum is transmitted pursuant to your request for a discussion of the above subject.

STATEMENT OF FACTS

Mr. John T. Connor has been nominated for appointment as Secretary of Commerce. The following facts concerning his financial interests are disclosed by a draft of letter dated January 5, 1965, addressed to the chairman of the Commerce Committee by Mr. Connor and enclosures thereto, which are returned herewith.

A. Financial interests

Mr. Connor has served as president and as a member of the board of directors of Merck & Co., of Rahway, N.J. His resignation from both such offices has been accepted to be effective upon a day to be determined in January 1965, which date presumably will be earlier than the date of his appointment to the office of Secretary of Commerce. He will also resign his offices in subsidiaries of Merck & Co., Inc., before his appointment as Secretary of Commerce. Thereafter during his period of service as Secretary of Commerce, he will be under no obligation to render any services for the company.

Upon the date of termination of his office in Merck & Co., Inc., he will have vested rights to a retirement annuity, commencing when he attains the age of 65 years, in a retirement plan of that company for salaried employees. No payments will be made into that plan for his account after that date. During his service in Merck & Co., Inc., he has acquired common stock of that company (1) under a stock purchase and savings plan maintained by the company for its