the reelection of the Democratic nominee. The inference was that officials of the life insurance companies directed or inspired such inquiries.

It was explained that about the same time the Democratic national headquarters received hundreds of a series of letters sent to life insurance agents, general insurance brokers, policyholders, bankers, and other professional groups by the People's Committee to Defend Life Insurance and Savings, Philadelphia, Pa.

Copies of specimens of these letters as submitted recited among other things that the election of the Republican nominee would be assured if the 50,000,000 policyholders of life insurance understood what the New Deal had done to the value and earnings of life insurance. In the letters, contributions were solicited to "spread the gospel" as contained in the leaflets being distributed by the above People's Committee. In these communications it was suggested that if the 300,000 agents of the life insurance companies were supplied with the requested material, the Republican nominee could be elected. It was asserted that life insurance agents had sufficient weight because of their incentive, contacts, and sales ability to determine the outcome of the election.

Particular attention was directed to a paragraph in one of these series of letters stating that, while insurance companies were prohibited by law from engaging in politics, insurance agents acting in their individual capacities as American citizens could distribute literature and could actively work in the campaign.

It was said that these letters and other similar literature were widely distributed through the mails, allegedly with the aid of various officials of life insurance companies and general agents thereof to the extent of making available to the People's Committee mailing lists of policyholders. As evidence of this aid, photostatic copies of envelopes were submitted in which letters and literature were alleged to have been mailed. These photostats indicated the use of certain postal meters by the People's Committee which were said to be those authorized for use by the insurance companies named or by their general agents.

Lists of officers and directors of many insurance companies were filed with the special committee, and its attention was called to the fact that a number of such officers and directors likewise were directors of utility companies.

In this connection, the question was raised as to whether there was cooperation between the officials of life insurance companies and utility companies in their political activities on behalf of the Republican nominee. No proof was offered other than alleged interlocking directorates.

STATEMENTS OF INSURANCE COMPANIES

The life insurance companies accused of political activities in violation of the Corrupt Practices Act were invited to have representatives appear before the special committee to give any information about, or offer any explanation for, the charges made against them. The secretary of the People's Committee to Defend Life Insurance and Savings and officials of the New York and Guardian Life Insurance Cos. appeared. The Metropolitan Life Insurance Co., through its president and superintendent of agencies, submitted statements on the subject for record.

(a) THE PEOPLE'S COMMITTEE TO DEFEND LIFE INSURANCE AND SAVINGS

The secretary of said committee explained the scope of its activities. He denied emphatically that the People's Committee to Defend Life Insurance and Savings had received any cooperation from life insurance companies, or that any insurance company had made any contributions directly or indirectly to the above organization. He denied specifically that any of the companies had furnished lists of policyholders, permitted the use of addressograph systems of policy holders' lists or company postal meters.

It was said that the names of persons to whom letters soliciting contributions and general literature of the committee were mailed were supplied by the Boyd City Dispatch, a concern engaged in the business of compiling mailing lists. They were not represented by that concern as lists of policyholders of insurance, but of individuals who were supposed to own some form of securities.

It was pointed out that life insurance agents throughout the country were attracted by literature of this committee and as a consequence many such agents requested leaflets prepared and published by the committee. It was understood by the secretary that such agents distributed these leaflets and literature to policyholders in person and through the mails. It was claimed that this was done by them not as agents of the committee, but as American citizens acting in their individual capacities.

(b) NEW YORK LIFE INSURANCE CO.

The comptroller of the New York Life Insurance Co. appeared before the special committee in behalf of that company. He disclaimed knowledge of the People's Committee to Defend Life Insurance and Savings or of its activities. He denied that his company, or its officers, had cooperated with the People's Committee or with any other political organization. He also denied that his company or its officers had participated in any way in the Presidential campaign of 1940.

As to furnishing lists of policyholders to anyone, this was said to have been absolutely contrary to the policy of the company, and it was claimed that this had not been done. The use of the company's Addressograph system of policyholders' lists other than for company business, likewise was forbidden. Due to his position as comptroller he was certain that any violation of this policy and rule would have come to his attention.

However, lists of policyholders were available to branch offices throughout the country, and the comptroller admitted the possibility that some individual in such offices could have violated the rules by giving lists to unauthorized persons.

(c) GUARDIAN LIFE INSURANCE CO.

An assistant secretary of the Guardian Life Insurance Co. appeared before the special committee. He denied that his company had any connection, directly or indirectly, with the People's Committee to Defend Life Insurance and Savings, asserting that to the best of his knowledge none of its employees or agents had cooperated with the

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People's Committee in its political activities. It was also denied that any of its employees or agents had participated in the Presidential campaign.

Lists of policyholders of his company had not been made available to any unauthorized persons through its officers or agents; nor had any individual or political organization been permitted to use its Addressograph system of lists.

He denied that the postal-meter numbers carried on photostatic copies of envelopes and containers of literature circulated by the People's Committee were those of the meters authorized for use by the Guardian Life Insurance Co. Those of his company were inserted in the record for purposes of comparison.

(d) METROPOLITAN LIFE INSURANCE CO.

Its president, in lieu of appearance, addressed a letter to the committee under date of October 29, 1940, which was accepted for the record. He termed as preposterous the charges by the general counsel of the Democratic National Committee that his company had furnished lists of its policyholders to some political committee. He stated that it had not been done, and that no requests for them had been received either at the home office or by any field representative of the Metropolitan Co.

In view of the manner in which records of policyholders are kept, he considered it impossible for anyone, in or out of the office of the company, to make any list of them.

He recognized that some representative in a local district office might make up from his records a very limited list of policyholders in his own locality. However, this was deemed improbable because to give out any such list, or even the name and address of a single policyholder, would be in violation of the strict rules of the company. Furthermore, rules of his company prohibit disclosure of information concerning policyholders except at the specific request of the insured or his authorized representative.

In lieu of appearance, the superintendent of agencies, Atlantic coast territory of the Metropolitan Co., directed a telegram to the committee, which was accepted for the record. In it he stated there was no truth in either of the charges made against him. He also said that no statement by him at the meeting in question could possibly have been interpreted as represented to the committee by the general counsel of the Democratic National Committee.

(e) COERCION OF EMPLOYEES OF A 5-AND-10 CHAIN

COMPLAINT

Complaint was made to the special committee under date of August 5, 1940, that the S. S. Kresge Co., through its vice president and treasurer, was constructively coercing its employees in the matter of making contributions to the national campaign fund on behalf of the Republican nominee.

STATEMENT OF FACTS

Copy of a letter alleged to have been sent by the designated official to all employees of the corporation was submitted to the committee. Significant portions of this communication were:

* * * The stage is set for a complete upset of the dictatorial administration of Roosevelt, and unless we remove him, in my opinion we shall need a receiver rather than a President.

* * * To finance a national campaign of this magnitude requires a very great amount of money, and Mr. Willkie will not be in a position to demand a week's salary from everyone on the Government pay roll, or dole * * * SO it's up to folks like you and me to foot the bill.

* * * I have the backing of our officers in this undertaking, and fully anticipate their cooperation. You know corporate contributions are illegal and we obey the laws. As a starter I will head the list with $1,000 and double if necessary. What is it worth to you?

These letters were distributed by company messengers and not by mail.

In view of all the circumstances surrounding the activities of the company officials, it was alleged that there was a clear implication of coercion and a violation at least of the spirit of the Hatch Act and of the Federal Corrupt Practices Act.

The vice president and treasurer of the Kresge Co. appeared before the committee on August 21, 1940, to explain the circumstances in connection with this solicitation of campaign contributions.

He frankly admitted that employees of the company in Michigan were so solicited, but denied that the solicitation was coercive in its conception or execution. He stated also that he or other company officials did not consider it to be a method of circumventing the prohibition against corporate contributions.

While other officials of the company were advised of his intention to solicit funds from its employees, he claimed that it was his own idea and followed the method used by his company in soliciting contributions to charitable causes, such as the Red Cross, Salvation Army, and Community Chest.

Letters were addressed by him to 265 male employees (less than 1 percent of the total pay roll of the company) and were confined to employees receiving $200 per month or more. One hundred and twenty-two employees replied to the letters and contributed approximately $9,000, $6,000 of which was contributed by five individual employees.

He claimed not to have acted in cooperation with officers of any other corporations, and was not aware that any other company had been similarly soliciting campaign funds. He was prompted to do so after he had volunteered the suggestion to a member of the Michigan Republican State Committee that he would "take care of the Michigan employees of the Kresge Co."

CONCLUSION

While it was not considered by the committee that such activity on the part of this official of the Kresge Co. was in direct violation of any Federal law, it is illustrative of a practice which should be curbed by some form of appropriate Federal or State legislation.

5. PRE-NATIONAL CONVENTION ACTIVITIES

(a) ON BEHALF OF THOMAS E. DEWEY

COMPLAINT

Complaints from several sources were received by the committee alleging excessive campaign expenditures on behalf of Thomas E. Dewey by the Dewey Committee for President in New York and by State committees in Wisconsin and in Nebraska.

INVESTIGATION

Complaints from New York, Wisconsin, and Nebraska were investigated.

STATEMENT OF FACTS

The findings of investigators in New York, Wisconsin, and Nebraska revealed that the Dewey-for-President committees in Wisconsin and Nebraska were affiliated with the National Dewey Committee. This national committee operated in New York, Chicago, and elsewhere. The policies of its branches in Wisconsin and Nebraska were directed by the national committee. In certain instances representatives of the national committee were sent into States to participate actively in local campaigns.

The total amounts of contributions to, and expenditures by, the National Dewey Committee in New York as shown from an examination of its books by agents of the committee were $93,000 and $112,000, respectively.

Both personnel and literature were furnished by the national committee without charge to States. Distribution costs were paid in part by State committees.

Financial records of contributions and major expenditures were confused. The national committee records in New York disclosed that $9,000 had been furnished to the Nebraska State committee, whereas Nebraska records showed that $15,150 had been received from New York. This discrepancy remains unexplained.

Investigation in New York revealed that records of contributions and expenditures of the national committee were incomplete. Similar omissions occurred in Nebraska and Wisconsin records.

In New York, a loan of $25,000 was made by a New York bank to the Dewey Committee, although its records did not indicate receipt of this contribution.

Wisconsin records disclosed expenditures of $25,983.70, $17,100 of which was contributed by the Dewey-for-President Club of Illinois, and $7,724.26 collected by the Wisconsin committee.

All expenditures in Wisconsin were made in cash and the committee did not maintain any checking account.

Contributions recorded by the Nebraska committee totaled $15,150, all of which was received from the New York committee. Expenditures in Nebraska were $18,780.83.

CONCLUSION

Nebraska and Wisconsin committees were organized to further the candidacy of Thomas E. Dewey in the Republican primaries of these