a Mr. BUCK. What other specific laws did you find it necessary to discuss with State legislatures? Dr. Doran. I don't recall any other specific laws at this time, Mr. Buck. That was a series of laws, a kind of epidemic. Mr. BUCK. General throughout the Nation? Dr. DORAN. General throughout the Nation, and I believe it has been discussed from time to time since in this field and in other fields. Mr. Buck. In other words, when the States realized they had the constitutional right to legislate upon this question, they naturally began to exercise that right, and you felt it the duty, or the industry felt it the duty of the Institute to guide the States in that. Dr. Doran. That is hardly the correct point of view so far as the Institute is concerned, Mr. Buck. Most of these so-called antidiscriminatory laws germinate selfishly with people who desire to secure a fully protected market in their own little locality and lose entire sight of the fact that trade within the 48 States ought to proceed reasonably free, and I may say that when this matter was presented practically every legislature turned this legislation down after being informed as to what the implications were. Mr. Buck. What about tax legislation in the States? Does the Institute concern itself with that? Dr. DORAN. Only to this extent if an unreasonable tax bill is presented; the Institute has never, to my knowledge, done anything but present statistical information which is as plain as a book that when taxes are increased past the optimum point there is loss of revenue and an increase of bootlegging. We have never gone beyond that point. The industry realizes that it is a medium for the collection of a very substantial tax. We think it is to the interest of the State and Federal Governments to place that point in the light of experience at the optimum point where the maximum revenue will be secured and the minimum of lawlessness generated. Mr. BUCK. Is this a fair characterization of the State activities of the Institute? In all legislation that the Institute or industry considered might affect its general welfare, that it concerned itself with that? Dr. DORAN. No; that is not correct. BUCK Dr. Doran. Many hundreds of bills have been introduced and passed but while they may not have been agreeable to all members of the industry, we took the position that it was wholly the prerogative of the State; it was not unreasonable and it was none of our affair. Mr. Buck. What other specific laws did the Institute concern itself with? Dr. DORAN. Well, the Institute was able to cooperate with the Treasury Department, the Alcohol Tax Unit, when a general revision of the statutes governing the taxation of liquor and the regulation of distilleries was undertaken, some 2 or 3 years ago. Bear in mind that many of the existing statutes up to that time had been enacted prior to 1879, and they dealt with practices as of those dates. We were of somé considerable assistance, I think, to the Treasury Department and the Alcohol Tax Unit and to the committees in Congress in trying to bring about a modernized code dealing with Government supervision of this industry; in other words, to try to bring the thing down to date to conform with modern industrial practice. Mr. BUCK. You didn't advocate any legislation that was against the best interests of the liquor industry, did you? Dr. Doran. Well, I will say this: I have taken the position, and been backed by the Institute every time, where one or two members might have felt there would be some immediate commercial advantage, we have always taken the position that this industry must be strictly regulated, and the bill might not be capable of good administration, and therefore would be unwise. I have done that frequently. Mr. Buck. Do you care to state any other specific activities of the Institute during your term of office that might be of interest to the committee? Dr. DORAN. They were so numerous over that period of time that I am afraid I can't pick out any special thing at this time, other than what we have discussed. I have no doubt, had I opportunity to review the minutes of the action of the Institute, many more things would occur to me. I have endeavored to give you my best recollection of the main activities of the Institute. I might say this: The Institute has been a clearing house for information for all branches of the industry-wholesale, retail, rectifying, and what not—which information was always very gladly furnished. Mr. BUCK. Where is the Institute located ? Mr. BUCK. Is this the center of the whisky industry? For any geographical purpose is it located here? Dr. DORAN. Well, we have a very substantial industry right close at our door in Maryland. I will say this: It is much closer geographically to the industry than is New York, Chicago, or San Francisco, and has many other points of convenience, principally, I say, because I live here. Mr. BUCK. In other words, where you went the Institute went? Dr. DORAN. No, indeed. The Institute at one time set up an office in New York, but finally concluded that it could operate to better advantage by discontinuing the New York office and centering its activities in Washington. Mr. Buck. And you found that to be the case ? Dr. DORAN. That is correct. We are supervised by many governmental departments here, as you know. The F. A. A., the Alcohol Tax Unit, we occasionally have a little matter with the Federal Trade Commission and the Food and Drug Administration, and a little with the Interstate Commerce Commission and the Department of Commerce, and it seemed very logical to me that the headquarters of the Institute should be right here in Washington. OFFICE AND PERSONNEL OF THE INSTITUTE Mr. BUCK. What staff do you maintain, or did you maintain from 1935 on, up until you left the Institute in '37? Dr. Doran. We had the usual clerical staff, the group that attended to the mechanical work, statisticians, attorneys. 124491-39—pt. 6-15 Mr. Buck. What were the executive positions of the Institute? Dr. Doran. My title changed several times and I can't tell you. I think I started in as executive director and then was made director, and then a technical director. Mr. BUCK. What other executive officers did the Institute have? Dr. DORAN. From the very start the secretary worked on publicrelations matters. It so happened that he was an old and experienced newspaperman, and performed a very good function. However, as some of the social problems increased, it seemed wise to the directors to somewhat change, you might say, the emphasis from the regulatory set-up of the business, which was pretty well in hand, and proceed to the work of developing the social problems, with a view to securing such better results as might be secured from the public point of view. We are just as anxious to rub out abuses in this industry as anyone possibly could be. The life of the industry depends on its good conduct and its approval by the public. Mr. Buck. But you have no power to do that under your organization set-up, except as you say by moral persuasion or suasion. Dr. DORAN. Well, the more people know about what they ought to do, the better off they are. Mr. BUCK. Who were the officers of the Institute, the executive officers, from 1935, aside from yourself? N. I was executive head until sometime in the early spring of 1937, I believe, when Mr. Forbes Morgan was appointed administrator, and I was appointed as a technical director. Dr. Morgan very unfortunately lived only a very few weeks after his appointment. From that time on I remained as acting head of the Institute until last summer, when I resigned and accepted the position of technical consultant or adviser, and the board of directors then proceeded to elect Dr. Wesley A. Sturges as executive director of the Institute. Mr. BUCK. Yes; but my question related to those other than the directors. Dr. DORAN. There were no other changesMr. BUCK (interposing). You haven't told me in the first place who were the originals. Dr. DORAN. I was there as the original. Mr. Howard Jones, the counsel, was there originally; Mr. Emmet Dougherty was then the secretary. There are practically no changes in the executive staff or the clerical staff. Mr. BUCK. That constituted the executive staff? Dr. DoRAN. I think there were 13 employees and possibly six or seven rooms in the Press Building; there might have been eight. I think we had a storeroom in addition. Mr. Buck. Do you recall the total salaries of the Institute? Dr. DORAN. No; I couldn't say. The books would show all that. I can't recall. Mr. Buck. Aside from yours, what were the salaries? Dr. DORAN. As a matter of fact, I never did pay much attention to them. I didn't keep the books. Mr. BUCK. You never suffered from lack of funds? Dr. Doran. No, sir; although I will say this: I believe it is a pity that the Institute didn't have more money to spend in dissemination of information and a more elaborate coverage on statistical reporting service. Mr. BUCK. Now, Doctor, as a matter of fact, there were only 100 active distilleries, weren't there? Dr. Doran. That is about right, I think. Dr. DORAN. Well, let me state this. It is our custom to include in the mailing list State officials and the executive officers at each one of the operating units. For example, one company, I believe it was testified to here 2 days ago by Mr. Porter, has nine operating units. Every one of the superintendents, executives in charge of those operating units, received all the information. Mr. BUCK. There is only one superintendent in each unit. Dr. DORAN. Well, you say 100 distillers. There is 1 distiller that had nine on the mailing list. Mr. BUCK. No; I say 100 plants. So there would only be 100 superintendents. Dr. DORAN. No; I think you are Mr. BUCK (interposing). Our statistics show 97. I say that is not a very large clientele to keep advised. Dr. DORAN. We didn't confine merely to what you call clientele at all. The information that we thought was of some interest we mailed regularly, and, as far as I know, they still do, to State officials, to company attorneys, to trade journals, in the same manner that any information service operates, be it Government or private. Mr. BUCK. What was the purpose of gratuitously furnishing States with such matters? Dr. Doran. It is our experience that the officials of various States are very glad to be advised of current Federal regulation as well as rulings and activities of their sister States. They have appreciated that service very much. We were very glad to furnish it to them. Most of them had no other facility for obtaining it. Mr. BUCK. Then you take it upon yourself to act as sort of a guide for the State liquor officials. Dr. DORAN. Not at all. You entirely misunderstand me. Dr. DORAN. Well, I believe there is such a thing as people doing things occasionally because they believe they are good things to do, whether they get paid for it or not. Mr. BUCK. You think that is one of the functions of the Institute, to do good, charitable deeds whether they get paid for it or not? Dr. DORAN. No. I don't wish to be misunderstood- Dr. DORAN. I don't wish to be misunderstood in that respect. It has been our view-it still is, so far as I know—that to post information to all officials and people concerned was in everybody's interest. We didn't have to do this, of course. I still maintain that it was an excellent thing to do and to continue to do it. Mr. BUCK. That is all. Mr. O'CONNELL. May I ask a question or two? You prefaced your remarks about the activities of the Institute in connection with State legislatures or legislation in general by saying that the Institute had never indulged in what you referred to as lobbying activities. Dr. DORAN. That is correct. Mr. O'CONNELL. Would you mind explaining for my benefit the difference between what the Institute has done in connection with legislation in States and lobbying as you understand the word ? Dr. DORAN. Well, I don't know whether I am qualified to define lobbying; but if a legislature, through its committee, is holding a public hearing or a committee of Congress is holding a public hearing, it has always seemed to me very proper for anybody having any matter of interest to appear before that committee and furnish it with such information as they were possessed of. That I do not call lobbying. I think that is a right of every citizen. Mr. O'CONNELL. You used the term "lobbying”; I didn't; and possibly you can tell me what it is. Dr. DORAN. Pardon; I may have used it wrongly, but I wish understand what was the nature of the Institute activities. If it is a case of buttonholing members of the legislature privately, and entertainment, and all that, the Institute never engaged in any such activity. Mr. O'CONNELL. I take it that would go more or less to the form of effort that would be made to influence legislation, but I understood from what you explained about the activities of the industry that it was the Institute's view that they were justified, not only justified but practically duty bound, to attempt to influence State and Federal legislation with a view to possibly the well-being of the industry. Dr. DORAN. Well, I don't agree with you in the use of the term “influence.” I think the conveying of information is perfectly proper, and I don't understand that the conveying of information operates as an influence on any legislative or congressional committee that is sitting in judgment as to what is the wisest course to pursue. Mr. O'CONNELL. You possibly misunderstood me. I wasn't attempting to characterize what you people were doing, but it certainly seemed clear to me that whatever information you give to any legislative body, be it statistical information or whatever it is, is for the purpose of influencing legislation. Isn't that true? Dr. Doran. That is a partial answer. It may not be a direct answer. We have been invited on numerous occasions to furnish groups with such information as we possess. Mr. O'CONNELL. That is interesting, but that isn't the answer to the question. you to |