tect the people of the United States under the law against these evils and abuses which everybody concedes have been practiced over and over again. Mr. GRIFFITH. Let me observe that "evils" is not a closely defined term. We speak of "wrongs" and "evils." They are more or less relative. Many things which seemed very bad in 1920 are not so regarded in 1938. You no doubt remember the advertisements of cancer cures, consumption cures, and worm cures. That was a good one. Today those things seem to be entirely wrong. They are evils inflicted on society. In those days perhaps our standard of right and wrong was not as high as now. Senator O'MAHONEY. Have you been reading any of the cigarette advertisements that would lead the country to believe that cigarettes are medicinal, good for the nerves, and the best thing in the world for athletes? Mr. GRIFFITH. If a man does not encounter them he must spend his life in a dungeon without any intercourse with the outside world. Senator O'MAHONEY. There is no difference, so far as ethical standards are concerned, is there, between an advertisement which pretends to cure cancer and an advertisement which induces the people to believe that tobacco is a healthful product? Mr. GRIFFITH. I am not saying this because the tobacco people are members of our organization. I do not know whether they are or are not. I do not know about cigarettes. I do not smoke them myself. My weakness is cigars or pipes. Senator O'MAHONEY. Of course, that is aside from the issue. Senator AUSTIN. I think the suggestion just made by Senator Borah is very excellent one. I do think that leaders of thought in business ought to afford Congress some help in these matters. For example, take the Senate. The idea that 96 men in the Senate can wisely legislate for the activities of 130 million people scattered all over the whole continent is simply overwhelming. We ought to have constructive suggestions from business. I think all must agree upon the objectives of this bill. I have no pride in authorship, and I do not repeat it here because I would not try to stimulate the idea in your mind, but I think your organization should make some helpful suggestions on this bill. Senator BORAH. The practice in the past has been to say that this or that is all right and should not be done, but there is nothing offered in lieu of it. I think something should be done in that respect, and if you people do not give it the benefit of your judgment the result may not be satisfactory to you. Mr. GRIFFITH. I think that is another very high ideal. I want to be conservative in this statement. It is my considered judgment, dealing every day with businessmen, that they do want your help. Senator O'MAHONEY. I have no doubt of it. Mr. GRIFFITH. I think the building of high ideals is going to be one of the finest things we can do. Businessmen feel considerably disturbed at a time-I will not say what I was goint to say, but I will let it go. Senator O'MAHONEY. How far have you to proceed with your statement? Mr. GRIFFITH. I have very little more. Senator O'MAHONEY. Very well. Proceed. Mr. GRIFFITH. We foresee the possibility of those in government insisting that their friends be made officers or directors of corporations. We foresee the possibility of forcing substantial campaign contributions to the party at that time in power. We foresee a grave risk that a combination of politics and business may foster and promote the evils of business and politics rather than their virtues. It is our modest opinion that this bill would amount to a violation of States' rights; it is another broad step in the direction of centralization of power in the Federal Government. We feel especially that even if these objections were unfounded and our fears uncalled for this is not the opportune time to pass such a measure. We are going through a disturbed economic condition. Whether the present condition be a recession or a part of a major depression, it is serious. It seems to be generally agreed that our salvation lies in the upturn of business and the employment of our citizens in private enterprise. It is a great mistake to think of our American economy in the term of "rugged." Our economic system is a highly complicated and a very delicate mechanism; easily disturbed, easily thrown out of alinement; its ruggedness only applies to its recuperative ability. Now is not the time to administer a shock. With every business index falling, business needs the encouragement of government and not uncertainty. Mr. Chairman and gentlemen, the representative of the New York Board of Trade, respectfully thanking you for this opportunity, earnestly pleads that this bill be defeated. Senator O'MAHONEY. Let me say this additional word. From my point of view, it seems to be perfectly clear that the modern corporation is a major instrumentality of the national business which affects the whole national life of our people. Mr. GRIFFITH. We agree entirely. Senator O'MAHONEY. The large, modern corporations have become more important to the economic life of the people than many of the States. Mr. GRIFFITH. I think so. It would require some comparison. Senator O'MAHONEY. There has been a change in our economic conditions. Mr. GRIFFITH. Yes. Senator O'MAHONEY. A State cannot be admitted into the Federal Union until its charter is approved by the Congress in behalf of all the people. Mr. GRIFFITH. Yes. Senator O'MAHONEY. The theory of this bill is that a corporation, which is more important in many instances than some State, sometimes with more stockholders and employees than some States have people, ought likewise to submit its charter to the representatives of all the people before it can engage in interstate commerce. Mr. GRIFFITH. If we want to get bilge water out of the holds of a boat when the sea is stormy, let us not take the bottom out. Senator O'MAHONEY. Certainly not. Thank you very much. The committee will stand adjourned until next Tuesday at 10:30 o'clock. (Whereupon, at 12 noon, the committee adjourned until Tuesday, March 8, 1938, at 10:30 a. m.) FEDERAL LICENSING OF CORPORATIONS TUESDAY, MARCH 8, 1938 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY, Washington, D. C. The subcommittee met, pursuant to adjournment, in room 212, Senate Office Building, at 10:30 a. m., Senator Joseph C. O'Mahoney (chairman) presiding. Present: Senators O'Mahoney (chairman), Logan, Borah, and Austin. STATEMENT OF MERVIN K. HART, PRESIDENT, NEW YORK STATE ECONOMIC COUNCIL Senator O'MAHONEY. Mr. Hart, you may proceed. First give your name and state whom you represent. Mr. HART. My name is Merwin K. Hart. I represent the State Economic Council of the State of New York. Senator O'MAHONEY. What is that council? Mr. HART. That is an organization, Mr. Chairman, formed several years ago, a membership corporation, for the purpose of stimulating private enterprise. Senator O'MAHONEY. You say it is a corporation? Mr. HART. It is a corporation. Senator O'MAHONEY. Chartered where? Mr. HART. Under the laws of the State of New York. Mr. O'MAHONEY. A membership corporation? Mr. HART. A membership corporation. Mr. O'MAHONEY. What sort of membership? Mr. HART. It is a cross-section of private enterprise. Mr. O'MAHONEY. Are the members individuals or corporations? Mr. HART. Both. Mr. O'MAHONEY. How many members have you? Mr. HART. About 1,500. Mr. O'MAHONEY. How many of those are corporations? Mr. HART. A small minority. Mr. O'MAHONEY. About how many? That does not bother you, does it? Mr. HART. Not a bit. I would say possibly a couple of hundred out of 1,500. Mr. O'MAHONEY. Could you give us the names of some of those corporations? Mr. HART. I could from memory; yes. Some are large, as I say, and some are small. Mr. O'MAHONEY. Name one of the large ones. Mr. HART. You are interested in the large ones? Well, let me see. One of the larger ones would possibly be the Albany Savings Bank. Mr. O'MAHONEY. Are there any corporations among your members which are engaged in international or interstate commerce? Mr. HART. Oh, yes. I would say many of them are. So far as I can see, a very great number of the corporations are engaged in commerce. Mr. O'MAHONEY. That is right. Apparently, you cannot recall many of those names from memory. Will you be good enough to furnish the committee a list of the corporate members of your organization? Mr. HART. Senator, we have never given out a list of our membership. I will take that up with our governing board. Mr. O'MAHONEY. It is not a secret, is it? Mr. HART. It is an admirable cross-section of all private enterprise, including workmen, farmers, small-trades people, and includes some large corporations. Mr. O'MAHONEY. You can understand that a committee of Congress studying legislation desires to know the source of the advice it gets, can you not? Mr. HART. I will be very happy to take the matter up with the board and I think they will be willing to do it. (Mr. Hart later submitted the following list:) Eastman Kodak Co., Rochester, N. Y.; Bethlehem Steel Co., Buffalo, N. Y.; Hooker Electrochemical Co., New York City; International Business Machines Corporation, New York City; United States Steel Corporation, New York City; Manufacturers Trust Co., New York City; Crouse, Hinds Co., Syracuse, N. Y.; City and Suburban Homes Co., New York City; General Electric Co., Schenectady, N. Y.; National Dairy Products Co., New York City; Albany Savings Bank, Albany, N. Y., Mathieson Alkali Works, New York City; Bigleow-Sanford Carpet Co., Amsterdam, N. Y.: Skenandoah Rayon Co., Utica, N. Y.; and West Virginia Pulp and Paper Co., New York City. Mr. O'MAHONEY. What is the membership fee? Mr. HART. The membership fee varies. The membership fees run from a dollar up. Mr. O'MAHONEY. Up how far? Mr. HART. We have about a dozen or fourteen, I should say, that subscribe a thousand dollars or more. give us $5 or $10, and some $1. Mr. O'MAHONEY. What fixes the fee? We have a large number that Mr. HART. There is no fixed fee. We ask them to give what they think they can give, under the circumstances. Mr. O'MAHONEY. The contributions that may be made to the work in which you are engaged are largely voluntary? Mr. HART. They are entirely voluntary. We live entirely by voluntary subscriptions. Mr. O'MAHONEY. Do you maintain an active office? Mr. HART. We have an office in New York City, and have had for about 5 years. We also have an up-State office in Utica. Our membership includes individuals or corporations in every one of the 62 counties in New York State. Mr. O'MAHONEY. It is largely a State organization? |