receipt of the loan of $100,000 by the New Jersey State committee, that committee in turn loaned approximately $39,000 to the New York committee. The loan of $25,000 to the Illinois committee was made prior to the loans to the New York and the New Jersey committees and was said to have been for general campaign purposes. With reference to the loans so made to the Democratic State committees of New Jersey and New York there was contradictory testimony under oath before the committee as to the negotiations for the loans and at a later period of the hearings one witness changed his statement previously made. Information later secured by the committee threw doubt on certain other testimony relative to cancelation of radio contracts for which the loans were said to have been made. Because the facts adduced indicated possible violations of law, the facts developed and the transcript of evidence was made available to the Federal Department of Justice for their purposes and use. These loans to the Illinois, New York, and New Jersey committees were said to have been the only ones arranged by officials of the Democratic National Committee to any other State or independent committee. Other loans, however, were made by individuals to State committees as well as to the Democratic National Committee. COMMITTEES SUPPORTING REPUBLICAN NATIONAL TICKET There are listed below totals of contributions to and expenditures by Republican national, independent, and State committees: NOTE. (See appendix IV, at p. 106 hereof; and appendix V, at p. 117 hereof.) The contributions and expenditures of the Republican State committees, as indicated above, include contributions and expenditures by Republican State finance committees totaling $1,680,292.99. (See appendix V, at p. 117 1 ereof.) The proportion of expenditures by these Republican State committees which can be said to have been made in support of the Republican national ticket is problematical. However, it is fair to assume that a large portion of such expenditures were made on behalf of the Presidential and Vice Presidential nominees of the Republican Party. 298119-41-2 TRANSFER OF FUNDS Significant in connection with the activities of the Republican State committees was the transfer of funds from one State to another. For instance, the reports studied indicate the following transfers: From To An ount Michigan Republican Finance Committee.... Connecticut Republican Finance Committee. Republican State Committee of Arizona. Do.. Do. Republican Central Committee of District of Do.. Do Maine Republican Finance Committee Tennessee Republican Central Committee... Republican Finance and Budget Committee do _do_ Ohio Republican Finance Committee. Republican Finance and Budget Committee New Mexico Republican State Committee.. Ohio Republican Finance Committee. $1,000 2,000 500 800 3,000 1,000 1,000 5,000 5,000 5,000 4,650 3,000 5,000 The Maine Republican Finance Committee reported a direct contribution of $7,650 to the Indiana Republican State Committee. Of this amount, $4,000 was contributed at the suggestion of the Republican National Committee. In return for this $4,000 contribution to the Indiana committee, the Maine Republican finance committee requested cancelation of two notes of $2,000 each representing money owed by the Maine committee to the Republican National Committee. PROMINENT FAMILY CONTRIBUTIONS The fact that the $5,000 limitation imposed by section 13 (a) of the Hatch Act on contributions by individuals did not apply to contributions made to or by a State or local committee prompted contributions of that amount or less by wealthy individuals to a number of different State and independent committees. The following are examples: (A tabulation of these contributions and loans will be found in Appendix VIII, at p. 143 hereof.) OUTSTANDING INDIVIDUAL CONTRIBUTIONS The names of contributors of $1,000 or more to all political committees, Democratic and Republican, were tabulated from reports made to the Clerk of the House of Representatives; from summaries of reports made to secretaries of state of several States, and from reports to the special committee by Democratic and Republican State committees. (This tabulation of individuals found to have contributed $1,000 or more will be found in appendixes IX and X at p. 149 and 156 hereof.) CONCLUSIONS From a study of reports of contributions, expenditures, and activities of national, State, and independent political committees in the general election campaign of 1940, in the light of provisions of the Hatch Act, the following conclusions are drawn: (1) The Hatch Act has been ineffective in preventing the expenditure of enormous sums of money in the 1940 national election campaign; (2) The $3,000,000 limitation as imposed by section 21 of the Hatch Act served to direct the flow of campaign funds in excess of that amount into channels other than those of the traditional national party committees, i. e. (a) Independent political committees, each of which believed itself legally entitled to spend up to the $3,000,000 limitation; (b) State or local committees ostensibly supporting State candidates but actually working for the national party ticket as well; (3) As the $5,000 limitation of the Hatch Act expressly excluded from the limitation contributions to State or local committees, individuals desiring to contribute more than $5,000 found it only necessary to donate or loan any desired sum to a State or local committee, which might spend the money without restriction; (b) SENATORIAL CONTRIBUTIONS AND EXPENDITURES Questionnaires were sent to all candidates for the United States senatorial nomination, requesting complete information respecting contributions to and expenditures by each in primary and generalelection campaigns. In this connection the special committee studied the reports made to the Secretary of the Senate under the provisions of the Federal Corrupt Practices Act. From these reports the total amounts contributed to and expenditures made by each senatorial candidate in both the primary and general-election campaigns were tabulated. (This tabulation will be found in appendix VI, at p. 130 hereof.) (c) MISCELLANEOUS POLITICAL ORGANIZATION CONTRIBUTIONS AND EXPENDITURES In addition to reports made by committees supporting the 2 major party national tickets, 10 miscellaneous political organizations and undetermined groups filed reports with the Clerk of the House. The total contributions received and expenditures made by these were $516,048.66 and $454,954.16, respectively. Included in these totals is a report by the National Committee To Uphold Constitutional Government showing receipts of $425,295.17 and expenditures of $377,381.44. (d) OBSERVATIONS ON METHODS OF REPORTING CONTRIBUTIONS AND EXPENDITURES REPORTS FILED WITH SECRETARY OF THE SENATE Conflicting constructions of the law and duplication in the forms at present used by senatorial candidates lead to confusion and lack of uniformity in the information submitted. The most noteworthy weaknesses are: (1) The apparent uncertainty on the part of successful candidates in the primary elections in distinguishing between contributions received and expenditures made during primary and general-election campaigns; (2) Failure of candidates properly to distinguish expenditures exempted by the laws from those not so exempted; (3) Failure to report properly operating expenses of campaign committees for election of Senators. REPORTS FILED WITH THE CLERK OF THE UNITED STATES HOUSE OF REPRESENTATIVES Some of these reports are neat in form and accurate in detail. Others are inaccurate and contradictory. Some are filed promptly and others after a delay extending from a few days to a month after the date specified for filing. The Clerk of the House is required by law to acknowledge the reports promptly upon receipt and preserve them for 18 months, but he is not empowered to prescribe how they shall be prepared or to examine them and ask for correction of details. Laws of several States require the use of specific forms. 2. CHARACTER OF CAMPAIGN LITERATURE On November 8, 1940, the chairman of your committee requested the submission to the committee of samples of campaign literature, with special emphasis on that involving religious or racial issues. The response was impressive in scope and quantity. About 200 persons, exclusive of officers of political organizations and of the committee's staff, submitted specimens of material considered by them to be scurrilous; and officials of the Democratic and Republican National Committees cooperated to the extent that the special committee had available for examination and study more than 400 individual pieces of campaign advertising of some form, including newspaper advertisements, handbills, leaflets, broadsides, specially printed newspapers and magazines, in addition to a considerable volume of newspaper and magazine clippings. Much of the submitted material is not scurrilous in the accepted meaning of the term, but all of it has been studied by the committee. Obviously, the material submitted represents a small portion only of the total campaign advertising employed during the 1940 campaign and, of course, includes no billboard, poster, radio, or cinematic advertising. This material throws an interesting light upon the interparty competition in setting up independent organizations for making expenditures and reveals the danger from racial, religious, and class intolerance when these issues enter a political campaign. The exhibits were grouped according to party support, type of publication, and psychological approach. Each exhibit examined was filed under the name of the sponsoring individual or organization, or as anonymous. This tabulation of sponsored and anonymous material includes no literature or advertising circulated by national party committees or official branches thereof. Obvious duplications also are omitted. One-third of the material was found to be anonymous, one-half anonymous or insufficiently identified, and one-fifth was found to be sponsored by groups or organizations obviously created to function only during the campaign. It is not an exaggeration to state that two-thirds of the 1940 campaign material, exclusive of that officially issued by the regular party organizations, was placed in circulation by unidentified individuals and groups. These sponsors were further concealed behind a shield of total or partial anonymity. It should be borne in mind, moreover, that this tabulation, aside from the wholly anonymous material, is based on the names appearing on the campaign material. Within the limited files of the committee exhibits, it is shown that some individuals and groups issued from 2 to 15 advertisements or pieces of campaign literature. The most scurrilous material on the whole was that published either in complete anonymity or by one of the temporary groups. One of the most significant aspects of the campaign was the part played by advertising agencies. The evidence is not conclusive, but it suggests that certain agencies prepared advertising copy for campaign use, applying to it the usual research and production costs, and distributed it without any service charge and without restrictions. The records of the committee do not disclose reports from any advertising agencies of campaign contributions of any character. EXPENDITURES REPORTED BY LITERATURE SPONSORS The examples available indicate that 111 sponsors of the Republican nominee and 22 sponsors of the Democratic nominee seemed to have made reportable expenditures. Of these 133 organizations or individuals, records of the committee revealed that 6 pro-Republican and no pro-Democratic group made actual reports of such expenditures. This compilation is confined to material actually examined in this study. It does not include official party agencies, equivocal cases, or purely local groups; nor does it include any outdoor billboard, poster, electrical, and cinematic advertising, nor radio and public addresses. On the basis of the foregoing, it is apparent that an indefinite number of temporary groups took part in this campaign, and that their total expenditures probably will never be known. GEOGRAPHICAL DISTRIBUTION The campaign material received by the committee in response to the chairman's invitation was studied in order to determine the geographical sources from which it emanated. The tabulation shows that (1) 53 percent came from 7 States; (2) 82 percent came from 15 States; and (3) 100 percent came from 30 States and the District of |