The CHAIRMAN. Like many firms, they wanted the firm name to go on, as I understand.

Mr. ACHESON. That was the desire of my partners, a desire in which I acquiesced.

The CHAIRMAN. But on the list of attorneys in the firm, your name was not included?

Mr. ACHESON. Certainly not.

Senator WILEY. You had no financial interest in it?

Mr. ACHESON. No, sir.

The CHAIRMAN. You were starting to tell us about the charge with respect to the Polish loan in which your firm, while you were in office, had some unusual interest. Tell us about that.

Mr. ACHESON. This matter, Mr. Chairman, was a matter which was begun and finished at a time when I had no connection with the firm whatever. In October 1945 the Polish Supply Mission employed the senior partner of that firm, Mr. Edward B. Burling, and some of his associates, to work with that Supply Mission in the drafting of contracts, papers, and so forth, having to do with a loan which the Supply Mission wished to make with the Export-Import Bank. That work continued from October 1945 until March 1947. It consisted in drawing up in legal form various conditions which were to be imposed to the granting of that loan. After the loan was granted and approved by the Export-Import Bank, there were various legal documents having to do with the nature of the payment and repayment, in which the firm assisted. After the loan began to be paid out, there were contracts which were made between the Polish Supply Mission and various suppliers in the United States. The firm assisted in that matter.

In March 1947, after the President of the United States made a strong statement of disapproval of the activities of the Polish Government, the firm notified the Polish Supply Mission that they were no longer at its service.

It has been stated somewhat extravagantly that the firm received in the neighborhood of a million dollars for its services. Its services for the period October 1945 to March 1947 were paid for on the basis of the time of the various people engaged in it, and the total fee was $50,175.

The CHAIRMAN. And not a million?

Mr. ACHESON. No, sir; it was not that.

I think it would be appropriate at this point, in view of the charges that I had something to do with the granting of this loan, which was of benefit to a firm with which I had been connected, to state the facts in regard to that matter. The Polish Supply Mission and the Polish Government approached the United States in 1945 for two credits. One was a credit of $40,000,000 to be used for the purchase of coal cars. The other was a credit of $50,000,000 to be used for the purchase of surplus supplies owned by the United States and located in Europe. The matter of this loan was discussed in the State Department for some time, and was also discussed with the Secretary of State, who was in Europe. It was discussed in 1945 and 1946.

On April 24, 1946, at a time when I was Acting Secretary of State, the various divisions of the State Department, including the economic

ones under Mr. Clayton and the political ones under the political officers, recommended that these credits should be granted on certain conditions. That recommendation was approved by me, and on April 24, 1946, a release was given stating what the conditions were and stating an exchange of notes between the Polish Government and the Government of the United States.

Subsequently, some of the conditions imposed were, in the opinion of the Government of the United States, not fulfilled by the Government of Poland, and again, as Acting Secretary of State, I suspended the loan until those conditions were met.

A matter which was not stated as a condition of the loan, but was a consideration which entered into the making of it, was that there should be free elections in Poland. Those elections were held. They were not regarded by the State Department or by the President of the United States as free elections. The President made a statement on that subject, and so did I. However, since this matter was not a condition to the loan, the loan was not again suspended.

The consideration which led to the granting of $40,000,000 for the purchase of coal cars was the great necessity of supplying Polish coal to western Europe. That coal is now being supplied in very substantial quantities with the use of these cars.

The CHAIRMAN. May I ask you one question: Did your former firm have any relation whatever to the policy matters that were determined, or was it purely a legal arrangement about these contracts and drafting of the instruments that were necessary to bring about the loan?

Mr. ACHESON. It was purely a legal matter, Mr. Chairman. The firm had nothing to do with the question of whether or not the loan should be granted.

The CHAIRMAN. That is what I had in mind.

Senator VANDENBERG. At that point, Mr. Acheson, was it the policy of the Government to make the loans subject to these suspensions and reservations that you have indicated?

Mr. ACHESON. That was correct, Senator Vandenberg.

Senator VANDENBERG. Would these be the instructions also to our Ambassador at Warsaw?

Mr. ACHESON. I do not think I understand that question.

Senator VANDENBERG. To come right down to the bare bones of it, why would there then be a dispute, or an alleged dispute, between the American Ambassador at Warsaw, in respect to this thing, and our representatives in Paris?

Mr. ACHESON. There was throughout the consideration of this loan a difference of opinion between the American Ambassador in Warsaw and the officers of the State Department, including the Secretary and myself, who were charged with responsibility in it. That was a difference of view. It was one in which the unanimous opinion of the officers of the State Department was on one side and the Ambassador took a different view.

It has been stated, and I have seen it in the press, that the Ambassador resigned on account of this loan. That is not the fact. The loan was made on the 24th of April 1946. The Ambasasdor resigned on the 31st of March 1947.

Senator VANDENBERG. Was this Polish Government, which your firm represented in this connection, what we would call a satellite government, or was it still a government which pretended-at least, through the cooperation of Mikolajczyk-to still be, in pretense at least, a coalition government?

Mr. ACHESON. It was the latter, Senator Vandenberg. This was the Mikolajczyk Government, and there was, during that period, a hope that it might in some respects be free from complete Russian domination.

Senator WILEY. I want to make an inquiry. I understand, Mr. Acheson, that you claim that you yourself, personally, in no way profited from this transaction that your firm had; that at the time that the firm was engaged by the Governmen of Poland you had no legal or financial inerest in the firm; that you had really stepped out from it; is that correct?

Mr. ACHESON. That is correct, Senator.

Senator WILEY. And never since have you received any remuneration from this transaction?

Mr. ACHESON. That is correct, Senator.

Senator SMITH. Mr. Chairman, might I ask another question in that connection?

The CHAIRMAN. Yes.

Senator SMITH. Mr. Acheson, I understood you to say that in February 1945, when you became Under Secretary of State, you severed your connection with the firm. I also understood you to say that prior to that time, in 1944, if I have the figures correct, you were Assistant Secretary of State in other matters in the State Department. Were you an active member of your law firm during that period?

Mr. ACHESON. No, Senator. You misunderstood me, I think. What I believe I said was that on the 1st of February 1941 I entered the service of the Government. At that time, I severed all connection with my firm and did not reestablish any connection with it whatever until July 1947, when I returned to private life.

Senator SMITH. Thank you. That is what I wanted to bring out. I was not quite clear about that.

Reference to Donald and Alger Hiss

The CHAIRMAN. You were first Assistant Secretary of State, were you not, before you became Under Secretary?

Mr. ACHESON. Yes, Senator Connally.

The CHAIRMAN. It has been charged over the radio and in the press and by word of mouth that, while you were Assistant Secretary, Mr. Alger Hiss was your chief of staff or was your special assistant. Is that true?

Mr. ACHESON. It is true that that has been stated. It is not true that that is the fact.

The CHAIRMAN. That is what I am asking you. Is the statement correct?

Mr. ACHESON. Senator, I have waited a long time for the opportunity to answer that question; and, if you will bear with me, I would like to answer it in some detail.

The CHAIRMAN. That is right.

Mr. ACHESON. As a preliminary matter, I should like to state to the committee that my friendship is not easily given, and it is not easily withdrawn. In this instance, Mr. Donald Hiss was my assistant during the years that I was Assistant Secretary of State. He served me and he served the country with complete fidelity and loyalty. He and I became, and we remain, close and intimate friends. He is now my partner, with everything that that relationship implies.

Mr. Alger Hiss was an officer of the Department of State during most of the time that I served there. During that time he and I became friends, and we remain friends. I do not wish to detract in any way from that statement when I point out, as I shall have to point out in a moment, that he was not my assistant; he was never my assistant, and, except for the last few months of his service when I was Acting Secretary of State, he never reported to me in any way.

With that preliminary statement, may I go into the facts?
The CHAIRMAN. Yes.

Mr. ACHESON. As you stated, I became Assistant Secretary of State on February 1, 1941. At that time Mr. Alger Hiss was the assistant to Dr. Stanley Hornbeck, in the Far Eastern Division of the State Department. He continued in that work until May of 1944, when he was transferred to do work in another division of the State Department, again not connected in any way with me, on the preparation for the Dumbarton Oaks Conferences and later on for the Mexico City Conference and the San Francisco Conference.

After he completed that work, he attended the first session of the United Nations in London in the winter of 1945-46. On his return to the State Department he was put in charge of a division which had to do with our relations with the United Nations. That was, I think, sometime in April or May 1946. That division reported to the Secretary of State, Mr. Byrnes, and to me.

Senator WILEY. Who arranged it?

Mr. ACHESON. Who arranged what?

Senator WILEY. Who arranged this new appointment?

Mr. ACHESON. This was the division in which Mr. Hiss was working at the time. He had been working in it since May 1944. He became the head of it on the retirement of Dr. Pasvolsky, who had been the head of that division. This was the first time, in April or May 1946, that Mr. Hiss fell under my jurisdiction in any way. He continued in that office until he resigned at the end of 1946 or the beginning of

1947.

Reference to Mr. Berle's Statement

Now, Mr. Chairman, this whole matter of the confusion of two men has arisen out of the testimony of a former colleague of mine in the State Department, Assistant Secretary Berle. Mr. Berle testified before the Un-American Activities Committee and stated-and I read from the transcript of the record-after referring to a conversation which he had had with Mr. Chambers in 1939:

I checked on the two Hiss boys. Specifically, I checked with Dean Acheson, and later I checked when Acheson became the Assistant Secretary of State, and Alger Hiss became his executive assistant. That, to the best of my knowledge,

was the first time when Hiss would have been in a position to do anything effectively. Acheson said that he had known the family and these two boys from childhood, and could vouch for them absolutely.

Mr. Berle's memory has gone badly astray. As I pointed out, Mr. Alger Hiss was not my executive assistant, my assistant of any sort whatever; he was not in any branch of the Department which reported to me or was under me in any way of any sort. Therefore Mr. Berle's memory is quite wrong when he says that Mr. Alger Hiss became my executive assistant, and that, to the best of Mr. Berle's knowledge, was the first time when he could do anything effective.

He then says, speaking apparently as of 1939:

I checked on the two Hiss boys. Specifically, I checked with Dean Acheson and later I checked when Acheson became Assistant Secretary of State.

May I give you the facts in regard to that matter?

As I say, on entering the State Department, where I was a stranger, it seemed to me highly desirable that I should have attached to me an officer of the Department of State who was well liked and experienced in the Department as a junior assistant to me. I had met Mr. Donald Hiss, as I had met his brother, when he served as law clerk and secretary to Mr. Justice Oliver Wendell Holmes. Donald Hiss was a contemporary and friend of the sons of my two senior partners. I saw him frequently through the late thirties, and came to have a strong liking for him and an admiration for his ability, particularly his ability to get along with people.

I inquired at the State Department whether it would be agreeable and in accordance with the regulations to have this officer assigned to me as a personal assistant, particularly to work on briefing me for meetings, both which I was going to hold and which I was going to attend, on a subject matter which was quite new to me. The Department told me it was entirely agreeable, and that from their point of view he was well suited for this work. At that time he was on loan to the Office of Production Management, where he was assisting the general counsel, Mr. Blackwell Smith. I telephoned Mr. Smith and arranged with him to have Mr. Hiss retransferred back to the Department of State. That was done.

He had been in my office only a few days or a few weeks when, sometime in February or March of 1941, Mr. Berle asked me to come and see him. Mr. Berle then said to me that he understood that I had one of the Hiss brothers as my assistant. I explained to him that I had Donald Hiss as my assistant. Mr. Berle then said that information had come to his attention that one of the Hiss brothers had had associations which would make his presence in my office embarrassing to me and to the Department. I explained to Mr. Berle that it was of importance which brother he was talking about, because I had responsibility only for Donald Hiss, and his brother was not under me in any way whatever.

Mr. Berle said he could not tell me which brother it was. At the time I understood that to mean that he did not know. It may well have been that he meant he was not at liberty to tell me. At any rate, he did not.

was, and he

I then asked him what the nature of this information said that for security reasons he could not tell me that. I then said