Senator KEFAUVER. Did you hear about it? Mr. WYCKOFF. No; I did not, Senator. Senator KEFAUVER. Did any of you other gentlemen hear about this? Mr. SHEPPARD. No, sir. Mr. PARNELL. No, sir. Mr. FARRELL. No, sir. Senator KEFAUVER. You did hear Senator Byrd state that; didn't you, Mr. Wyckoff? Mr. WYCKOFF. At the hearing he explained it, I believe. Senator KEFAUVER. It seems that there ought to be some memorandum in your files with reference to any agreement with Senator Byrd. Is there any memorandum that refers to this matter? We haven't found it if it is in the papers you have given us. Mr. WYCKOFF. I know of none. It may be in Dr. Flemming's file; it is not in our's. Senator KEFAUVER. Are you the custodian of Dr. Flemming's files! Mr. WYCKOFF. No; I am not. Senator KEFAUVER. Where are they? Who is? Did he take his files with him, or are they still down there? Mr. Sheppard, you are the chief man down there. Who has the files? Mr. DURKIN. Senator, I have a recollection that the correspondence between Senator Byrd and Dr. Flemming was put in the record, Congressional Record, by Senator Byrd. Senator KEFAUVER. You are Mr. Durkin? Mr. DURKIN. Yes, sir. Senator KEFAUVER. What is your position? Mr. DURKIN. Assistant General Counsel, ODM. Mr. DURKIN. Yes, sir. Senator KEFAUVER. I know, but I mean the memorandum of Mr. Flemming's agreement, if there was such, that he was not going to issue the certificates, that he was going to hold them up until Senator Byrd could present some legislation. Do you know about that, Mr. Durkin? Mr. DURKIN. No, sir. Senator KEFAUVER. Do you have custody of Dr. Flemming's files! Mr. DURKIN. I imagine whatever files are down there are available to anyone in ODM. Senator KEFAUVER. Will you gentlemen make a thorough study to see what memorandum or letter there is in this connection? Mr. Sheppard, I believe you are making a note you are going to do so. (The letter submitted by ODM is as follows:) Hon. ESTES KEFAUVER, Chairman, Subcommittee on Antitrust and Monopoly, JUNE 13, 1957. DEAR SENATOR KEFAUVER: This has reference to a request which you made at the hearing of the Subcommittee on Antitrust and Monopoly, Senate Judiciary Committee, on Wednesday, June 5, 1957. You asked that the files, including those of the former Director, Arthur S. Flemming, be searched for data indicating that Dr. Flemming had assured Senator Byrd that no further allowances of accelerated amortization would be made until the staff of the Senate Finance Committee had completed a report on which it was working. We have carefully examined the files of this office, including those of the former Director, and find that the only data on this matter are the letter addressed to Dr. Flemming by Senator Byrd on October 22, 1956, and Dr. Flemming's reply thereto, dated November 20, 1956. As you know, both of these letters were inserted in the April 29 Congressional Record by Senator Byrd. Sincerely yours, CHARLES H. KENDALL, Senator KEFAUVER. Mr. McDonald, you are not a lawyer. Who gave you this interpretation of the Byrd bill? Mr. McDONALD. No one gave it to me, Senator. I read the bill. That is my own ideas on what the bill says. Senator KEFAUVER. Did you talk to anyone at ODM about it? Senator KEFAUVER. You did not discuss the bill with Mr. Wyckoff? Senator KEFAUVER. Do you have a counsel here in Washington? Sentaor KEFAUVER. Who is your Washington counsel? Mr. McDONALD. The firm of Reid & Priest. Mr. Poth is the attorney here in Washington, sir. Senator KEFAUVER. Is it P-o-t-h? Mr. PоTн. P-o-t-h, Senator; yes. Senator KEFAUVER. You have an office of the firm of Reid & Priest here in Washington? Mr. PоTн. That is correct, sir. Senator KEFAUVER. Are you the chief Washington lawyer? Mr. PоTн. I am the resident partner. Senator KEFAUVER. What is your full name, sir? M. PоTн. Harry A. Poth, Jr. Senator KEFAUVER. Did you make an analysis of the Byrd bill for your plan of action? Mr. PоTH. No, sir; I have never seen the Byrd bill that I can recall. I, of course, read of it in the newspaper, but that is all. Senator KEFAUVER. You heard about it and read about it? Mr. PоTH. The newspaper extent only, sir. Senator KEFAUVER. All right. Mr. Chumbris, do you have any questions? Mr. CHUMBRIS. No questions. Senator KEFAUVER. When we recess today, we will recess until Friday at 10 o'clock in room 457, at which time we will examine other aspects of this matter. We will appreciate you gentlemen getting the memorandums, or matters called for, for us as quickly as possible. Mr. BOONE. Senator, may I say something? On those telephone conversations you requested, I think the gentlemen here will have to make more of a research on that, and we will give that information to the counsel, just exactly what our records show on the telephone conversations. Senator KEFAUVER. Will you send up the record on that; perhaps a photostat of it? Mr. BOONE. Yes. Now, there may be collect calls. However, anyway we are going to run it down. Senator KEFAUVER. Do you have any information about the telephone calls now? Mr. BOONE. The only information we have here now is that they have not been able to check, not been able to check yet the early morn ing call to Mr. Kimball. Now, that may be due to several reasons, but we will have to check the record, sir, and will inform your counsel. Senator KEFAUVER. All right; we will appreciate your doing so. Senator KEFAUVER. We want Mr. Wyckoff to come back on Friday if it is possible, and if we want any of the rest of you we will let you know. But Mr. Wyckoff, if you can make arrangements, we would appreciate it. Mr. BOONE. I hate to ask the question, but to avoid a little difficulty which we sometimes run into with reporters, do we have your permission to request a copy of the transcript at our expense from the reporter for this day's hearing? Senator KEFAUVER. You do, indeed. Mr. BOONE. All right; thank you. Senator KEFAUVER. Senator O'Mahoney asks that the record show that he was engaged all morning at a hearing on the meatpacking bill in the House of Representatives, and for that reason could not be present. We will stand in recess until Friday. (Thereupon, at 12: 35 p. m., the hearing was adjourned.) RAPID AMORTIZATION IN REGULATED INDUSTRIES FRIDAY, JUNE 7, 1957 UNITED STATES SENATE, SUBCOMMITTEE ON ANTITRUST AND MONOPOLY, Washington, D. C. The subcomittee met, pursuant to call, at 10:25 a. m., in room 457, Senate Office Building, Senator Estes Kefauver presiding. Present: Senators Kefauver (presiding), and Dirksen. Also present: Senator Carroll, Paul Rand Dixon, counsel and staff director; Dr. John M. Blair, chief economist; Peter Chumbris, counsel for the minority; Tom Collins, professional staff member; George Clifford and Philip Layton, attorneys; and Ray Cole, investigator. Senator KEFAUVER. The meeting will come to order. Mr. Wyckoff, Mr. English, and Mr. Kendall, counsel for ODM, are present. Why don't all of you come up and sit down around the table here? Good morning, gentlemen. Mr. Wyckoff, I hope you and Mr. Farrell brought some of your files with you? Do you have the papers or documents that we suggested you get? STATEMENT OF JACOB B. WYCKOFF, CHIEF, TAX AMORTIZATION BRANCH, ODM; ACCOMPANIED BY JAMES L. FARRELL, ODM; AND CHARLES H. KENDALL, COUNSEL, ODM Mr. WYCKOFF. These are our regular files, the ones that you have seen. Senator KEFAUVER. Either you, Mr. Wyckoff, or Mr. Gray, were asked to furnish a copy of the reply from Governor Pyle to the ODM in connection with the draft press release. Has that been located as yet? Mr. KENDALL. We know exactly where it is. I am going through the testimony now to be sure that everything that has been requested will be up, and I will make a particular note that Mr. Pyle's reply will be there. Senator KEFAUVER. You don't have it with you this morning? Mr. KENDALL. No, sir. Senator KEFAUVER. Some time back, Mr. English and Mr. Wyckoff, you were going to examine these utility applications to see if any of them were granted to small business. Did you locate them as being small business? Mr. ENGLISH. No, sir. Senator KEFAUVER. Mr. English, you were speaking to the subject of whether any of them were classified as small business? Mr. ENGLISH. No, sir. Senator KEFAUVER. Mr. English, you were speaking to the subject of whether any of them were classified as small business. Mr. ENGLISH. All the applications for the utilities were not classified; none of them were classified as small business. Senator KEFAUVER. Will you tell us again, say, from some particular date, January 1, 1955, how many applications there were of utilities which were processed by Interior? Mr. ENGLISH. I would have to refer to the record, sir; I don't have it with me. It can be furnished to the committee. Senator KEFAUVER. One point that seems to be hanging fire and wasn't settled was that the Duquesne Power & Light Company of Pennsylvania, I believe, was marked by ODM as being small business. You, Mr. English, said that was a mistake, but I assume Mr. Wyckoff must have marked that as small business, and Mr. Wyckoff was asked about it, and was going to get us information concerning it. Do you have any information about it now, Mr. Wyckoff? Mr. WYCKOFF. That is in the information which Mr. Kendall has assembled at the request of the committee at the last hearing. Senator KEFAUVER. Do you have that information assembled, Mr. Kendall? Mr. KENDALL. There is a lot of material on my desk which I am going through now to try to make sure that it answers all the questions raised. Was it a mistake? Mr. WYCKOFF. Yes. Senator KEFAUVER. You say it was a mistake. Mr. WYCKOFF. Yes; that was later corrected. Senator KEFAUVER. Did you mark it small business? Mr. WYCKOFF. It was marked by my office as small business in error. Senator KEFAUVER. You were going to get up the criteria by which you classified certain of these applications as small business. have that ready to submit, Mr. Wyckoff? Do you Mr. WYCKOFF. That is part of the material that Mr. Kendall is assembling. Senator KEFAUVER. Mr. Kendall, when do you think you will have this material available? Mr. KENDALL. I was going over the testimony last night. I think I can complete it before Monday evening, before close of business Monday. Senator KEFAUVER. Then you will have it ready by some time Tuesday or Wednesday? Mr. KENDALL. I could have it over to you Tuesday morning. Senator KEFAUVER. We would appreciate if you would bring it up or send it to the staff of the committee and perhaps they may have an opportunity of going over it with you. Mr. KENDALL. All right. Senator KEFAUVER. I want to try to make clear if I can this morning the operation in Interior and also in the Office of ODM with reference to these electric utility fast writeoffs. I understood, Mr. English, that you said, or at least you did when Mr. Dwyer was here and we were in colloquy with you and with him, |