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UNITED STATES SENA TE

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F IR S T SE SS IO N

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TH E NO MIN AT IO N OF LU TH ER HARTW ELL HO DG ES TO BE 

SE CR ET AR Y OF CO MM ER CE

JA NU AR Y 18, 1961

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U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1961
COMMITTEE ON INTE RSTA TE AND FOREIGN COMMERCE

W A R R E N G. M A G N U S O N , W ash in gto n, Ch air ma n

ANDREW F. SCHOEPPEL, Kansas 

JOHN MARSHALL BUTLER, Maryland 

NORRIS COTTON, New Hampshire 

CLIFFO RD P. CASE, New Jersey 

THRUSTON B. MORTON, Kentucky

JOH N O. PA STORE, Rhode Island 

A. S. MIKE MONRONEY, Oklahoma 

GEOR GE A. SMATHERS, Florida 

STROM THURMOND, South Carolina 

FRA NK J. LAUSCHE, Ohio

RALPH YARBOROUGH, Texas HUGH SCOTT, Pennsylvania

CLAIR ENGLE, California

E. L. B ART LET T, Alaska

VANCE HAR TKE, Indiana

GALE W. McGEE, Wyoming

E dw ard Jar re tt, Ch ief C lerk

J ohn M . M cE lroy, A ss is ta nt Ch ief Clerk

H arold I. Baynton, Ch ief Counse l

II

»


NOMIN ATI ON OF LUTHER HARTWELL HODGE S TO BE

SECRETARY OF COMMERCE

WEDNESDAY, JANUARY 18, 1961

U.S. Senate,

Committee on Interstate and Foreign Commerce,

Washington, D.C.

The committee met, pursuant to notice, at 10 a.m., in room 5110, 

Senate Office Building, the Honorable Warren G. Magnuson, chairman 

of the committee, presiding.

Senator Magnuson. The committee will come to order.

The chairman wants to welcome the members of the committee 

that are here for the new session of Congress. There is no change in 

the committee membership, and no casualties. All four members 

of the committee that ran for reelection were reelected. Two of 

them are here.

On behalf of the committee, I congratulate the Senator from 

Alaska and the Senator from Kansas.

We have before us today the designation of Gov. Luther H. Hodges 

of North Carolina to be Secretary of Commerce.

I might say, Governor, tha t I hope the atmosphere of your nomination is a little different than tha t of the Secretary of Commerce 

we had before us in 1959.

I think the climate is a little better.

Normally, the committee sends around what we call “ blue slips” 

for recommendations from the Senators from the State from which 

you come, but I see both of them flanking you on either side.

So, we will be very glad to hear from the senior Senator from North 

Carolina on this nomination at this time.

STATEMENT OF HON. SAM J. ERVIN, JR., U.S. SENATOR FROM THE 

STATE OF NORTH CAROLINA

Senator Ervin. Mr. Chairman, I appreciate this opportunity to 

appear before the committee and recommend that the committee take 

favorable action on the nomination of Gov. Luther Hodges.

I have known Luther Hodges ever since he and I were students at 

the University of North Carolina, and I know nothing of him except 

what is good.

I might add tha t that was at least 10 years ago. I will put it that 

way for fear of prosecution for perjury.

I don’t think there is a man in the United States that is more 

ideally qualified for the position to which he has been appointed than 

Luther Hodges. He has had vast business experience and he has had 

vast political experience.

1
2 NOMINATE LUT HER H . HODGES TO BE SECRETARY OF COMMERCE

As Governor of Nor th Carolina, he has been Governor of Nor th 

Carolina longer th an an y man in our his tory with the exception of 

one ma n. He has made a mag nificent success in business and he has 

ma de a magnifice nt success in p olitica l life and in service to our people 

and for these reasons I think th at he com bine s in as rar e a degree as 

an y ma n in the U nited State s the two req uis ites which in my o pinion 

are esse ntia l to make a ma n a grea t Se cre tar y of Com merce; nam ely, 

a va st business experience and va st political experience, and I know 

he is going to do as fine a job for the Na tio n there as he has don e for 

Nor th Carolina, and I than k the comm itte e an d I would like to stat e 

th at I am no t going to des ert my friend bu t I hav e two other committees to at te nd at thi s same time.

Th e C hairman. Any que stio ns to the senior Senator from Nor th 

Carolin a?

(No response .)

Th e Chair man. Th an k you , Se na tor E rvin.

Se nator J orda n, we will be glad to get a stat em en t from you.

STATEMENT OF HON. B. EVERETT JORDAN, U.S. SENATOR FROM 

THE STATE OF NORTH CAROLINA

Se na tor J ordan. Mr. Ch air ma n, it is a disti nc t hon or for me to 

introduce to you and the othe r memb ers of the Senat e Co mm itte e on 

In te rs ta te and Foreign Com merce the Ho norab le Lu th er H. Hodges.

I am confide nt th at the comm itte e will find Go ver nor Hod ges 

un usually qualified to serve as Se creta ry of Commerce.

I have known G ove rnor Hodges m an y y ear s. He possesses e xtraordina ry energy, ability, and imagina tion, whi ch are n eeded so badly in 

ou r Go vernme nt at this crucial mo me nt in his tor y.

As Gove rnor of N or th Caroli na, M r. Hod ges became kno wn th roug hou t the Un ite d State s and the wor ld as the “B usine ssm an’s Governo r.” Du rin g the time he served as chief executive of our State , 

from No vemb er 7, 1954, un til Ja nu ar y 5, 1961 , we enjoyed a period 

of unpre cedente d gro wth in comm erce an d industry.

Fo r m an y yea rs, we in Nor th Carolina hav e been striving to bring 

ab ou t a w ork ing balance b etw een a gri culture and indu str y. Governor 

Hodge s ha s turn ed these dre am s into rea lity, and tod ay, than ks to 

the leader ship of G ove rnor H odges, Nor th C arolina is on the thresh old 

of unlim ited greatness.

At a tim e when we need a more busines slike appro ach in man y 

areas of our Go vernm ent, it is espe cially fittin g th at Pre sident-elec t 

Ke nn edy has been able to get Go ver nor Hodges to serv e as Secre tar y 

of Co mm erce . He brings to the office of S ecretary of Com merce man y 

yea rs of experience in busines s and indu str y. He brin gs wi th him 

deep con viction s ab ou t our free enterprise sys tem and its importance 

to man ki nd ’s hopes for a free and peacefu l world. He brings with 

him rare abilities at a time when our econ omy is walking a narrow 

line between expansion and recession . He brin gs wi th him a ded ication to unselfish pub lic service at a time whe n Americ a an d the free 

world must rise above selfish int ere sts .

Mr. Ch airma n, I, like Senator Er vin , am suppos ed to be rig ht now 

at the Rules Co mm itte e org ani zation and I will have to slip ou t also, 

bu t I ju st wa nt to say to you th at I do no t think th at Pre sident-elec t
NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE 3

Kennedy could have found a man in the United States who can more 

ably fill this most important job at a time when America needs to 

look into the problems tha t affect the things that will come through 

the important position to which he has been appointed and I very, 

very strongly recommend tha t we give him unanimous recommendation.

I am sure you will.

The Chairman. Thank you, Senator Jordan.

Any questions of Senator Jordan?

Senator Cotton. I have one question.

I can’t refrain from asking this question, not in a hostile way. He 

has mentioned the fact tha t Governor Hodges is responsible for the 

magnificent upturn and the increase of industry in North Carolina.

Is he the fellow th at moved all our cotton mills out of New Hampshire down into North Carolina? [Laughter.]

Senator J ordan. Let me say this: he provided a climate t hat made 

them want to come.

The Chairman. Any further questions of the Senator?

(No response.)

Senator J ordan. Thank you very much.

The Chairman. The committee has the biography of Governor 

Hodges which we will put in the record in full.

Briefly, Governor Hodges was born in 1898 in Virginia, Pittsylvania 

County. He attended the public schools in Leaksville and Spray, 

N.C., his family having moved into that area in the year 1900. Following his graduation from high school in 1915, he entered the University of North Carolina and was graduated in 1919 with an A.B. degree. He served briefly in the U.S. Army with the rank 

of lieutenant.

Following his service in the Army he began his career in the textile 

industry, starting as secretary to the manager of a local textile mill in 

the Leaksville-Spray area, and in 1938, following several intermediate 

promotions, he was made general manager in charge of manufacturing 

for Marshall Field & Co. In 1943 he became vice president of t hat 

corporation.

He was head of the Textile Division of OPA in 1944, and consultant to the Secretary of Agriculture in 1945.

In 1950, upon his retirement from private business, he spent a 

year in West Germany as head of the Indu stry Division of the Economic Cooperation Administration, and was consultant to the State 

Department in the latter months of 1951 on the International 

Management Conference.

In 1952 he was elected Lieutenant Governor of North Carolina, and 

succeeded to the governorship in November 1954 upon the death of 

the then governor, William B. Umstead, whom we all know here. 

He served with us both in the Senate and in the House.

Governor Hodges was reelected Governor of North Carolina in 

November of 1956, and his term ended in January 1961. Did end? Governor Hodges. Did end.

The Chairman. Yes. And then several other conferences and 

boards he served on, and his personal biography regarding his family 

which we will pu t in the record.
4 NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE

(The biography of Governor Hodges is as follows:)

Bio g r a ph y o f L u t h e r H a r t w e l l H od ges

(Designated to be Secretary of Commerce by President-elect John F. Kennedy, 

December 3, 1960)

Luthe r Hartwell Hodges was born March 9, 1898, in Pittsylvania County, Va. 

He attended public schools in Leaksville and Spray, N.C., his family having 

moved to this area in the year 1900. Following gradua tion from high school in 

1915, he entered the University of No rth Carolina and was gradua ted in 1919 

with the A.B. degree. He served briefly in the U.S. Army in which he held the 

rank of lieute nant.

Following his military service he began his career in the textile ind ustry star ting as secretary to the m anager of a local textile mill in th e Leaksville-Spray area, 

and in 1938, following several inte rme diate promotions, he was made general 

manager in charge of manufactu ring for Marshall Field & Co. In 1943 he became 

vice p resident of th at corporation.

He was head of the Textile Division of OPA in 1944, and consultant to the 

Secretary of Agriculture in 1945.

In 1950, upon retirem ent from private business, he spen t over a year in West 

Germ any as head of the Indust ry Division of th e Economic Cooperation Administratio n, and was con sultant to th e Sta te De partm ent in the la tte r mon ths of 1951 

on th e Intern ational Managem ent Conference.

In November 1952 he was elected Lie utenan t Governor of N orth Carolina, and 

succeeded to the governorship in November 1954 upon the dea th of the then 

Governor, William B. Umstead. Governor Hodges was reelected Governor of 

North Carolina in November 1956, and his term ended in Jan uary 1961.

He is past chairman of the Southern Governors’ Conference and of the Southern 

Regional Education Board. He was one of the nine American Governors to 

make an extensive to ur of the Soviet Union in t he summer of 1959 and was subsequently in charge of his State’s trad e and industrj'- mission to Europe in November 

1959.

The Governor m arried Miss Ma rtha Blakeney in Union County, N.C., in 1922. 

They have two daughters, Betsy (Mrs. D. M. Bernard, Jr.) of Anacortes, Wash.; 

Nancy (Mrs. Joh n C. Finlay) of Rangoon, Burma; and one son, Luther, Jr., 

who is now atte nding the G raduate School of Business Administration a t H arv ard 

University.

He is a member of th e Leaksville Methodist Church, a Mason, and a Rotari an 

and has served as an inte rnational direc tor of R otary.

The Chairman. Governor, I am going to ask the members of the 

committee if they have any questions to ask you. I will start on my 

right, with the Senator from Kansas.

Senator Schoeppel. Mr. Chairman and Governor Hodges, some 

of the members of the minority are unable to be here this morning 

and have requested tha t I ask certain questions of you.

The questions which I desire to ask are for the record and in the 

spirit of getting on the record some matte rs which I am sure you will 

understand.

First, I understand, Governor, tha t you, as well as the other designees of the President-elect, have had certain facilities offered to you 

and to your associates in the Commerce Department to familiarize 

yourself with the workings of that Department.

STATEMENT OF HON. LUTHER H. HODGES, DESIGNATED TO BE 

SECRETARY OF COMMERCE

Governor Hodges, le s, sir; and the finest cooperation possible.

Senator Schoeppel. Thank you, sir.

Now, the Senate Committee on Post Office and Civil Service has 

issued a committee print entitled “Policy and Supporting Positions.” 

It lists for the Department of Commerce all officials appointed by the
NOMINATE LU TH ER H . HOD GES TO BE SEC RETARY OF COM MER CE 5

Pre sident with the advice and th e con sen t of th e Senate, officials 

nam ed un de r special stat ut es and not subje ct to civil service, and 

employees on schedule A and schedule B. These listings are supposed 

to cove r only employees subje ct to rep lac em ent by the new adm inis ­

tra tio n as necessary for policy deter mi natio ns or in con fidential relation ships.

I take it th at you are gen erally fam ilia r with th e existence of the 

docum ent to which I refer. I would like to ask you this que stio n, 

sir: Is it yo ur inten tio n to safegu ard the civil serv ice and to see th at 

employees un de r your dire ctio n are assured their full r ights under the 

lette r and within th e spirit of t hat civil service law?

Governor H odges. Yes, sir.

Senator Sch oe pp el. I note in th e De mo cra tic na tio na l pla tfo rm , 

and I am rea din g from page 9:

W orld tr ad e is more th a n ev er es se ntial to wor ld pe ac e. In th e tr ad it io n of 

Co rdell H ul l we sh all ex pa nd world tr ad e in ev er y resp on sibl e way . Sin ce all 

American s sh ar e th e be ne fit of th is po lic y, it s co st sh ou ld n o t be th e burd en of 

th e few . We sh al l su pport pra ct ic al m ea su re s to ea se th e ne ce ss ar y adju st m ents 

of in dus trie s and co m m un ities which m ay be unavoid ab ly h u rt by increa se s 

in im po rts.

Now, as Se cretary of Com merce, I na tu ra lly assum e you will carry 

some high degree of res ponsibility in this reg ard .

Do you have in mi nd wh at indu str ies an d comm unitie s wou ld be 

involved for im me dia te con sidera tion in this, if I might inq uire? 

You m ay or may n ot have fam iliarize d you rself wi th all of the fac tors 

an d circum stance s th at you mi gh t wan t to fully discu ss.

Go ver nor H odges. Senator, I could no t discuss whi ch ind ustries. 

I associate myself with the gen eral princ iple bu t I do no t have in 

mind an y pa rti cu lar in du stry w hatso ever at th e mo me nt.

Se nator Sch oe pp el. D o you have an y def inite ideas in mi nd or 

program th at you would wish to ela bo rate on at thi s tim e th at would 

stim ulate im po rts , and also sti mulate exp orts?

Gover nor H odges. Yes, sir. I would ma ke this general com me nt: 

As I said at the tim e th at Senator Ke nn ed y designated m e as the possible S ecret ary of C ommerce, one of m y chief aims wo uld be the st im ulat ion of foreign tra de , tra de gen erally, foreign tra de , in ord er to help 

close thi s so-called balan ce-of-pa ym ents gap and to inv igo rate the 

econom y of this coun try .

I think th at our org aniza tion will be bu ilt along the line of try ing 

to sti mulate the econom y, ma ke the dom estic econ omy strong and 

virile so th at we may be more comp etitiv e abroad in the tra de th at 

we have with othe r natio ns.

Se nator Sch oe pp el. Go verno r Hodges, I wou ld like to ask you 

this: We have he ard mu ch ab ou t peril points.

Would it be yo ur counsel to thi s ad minist ratio n th at p eril points be 

ab an do ned or ret ain ed ?

Go ver nor H odges. I could no t discuss intell ige ntl y as to wh eth er 

or no t thi s ought to be chang ed at all. I think th at it is n ot so mu ch 

wha t you hav e in the way of a peril po int policy, it is a question of 

wha t you find ou t ab ou t the indu stry and wh at is its relatio n to the 

re st of the commerce of the c ou ntry a nd the Nat io n’s total needs.

You realize the Secretar y of Co mm erce does no t determ ine a ny thing 

ab ou t th at ; it is up to the Tariff Com mission , I belie ve.

64550 — 61- 2
6 NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE

We do have the responsibility of making certain recommendations 

to the President after we have gotten their statement.

Senator Schoeppel. I would like to ask you further, Governor 

Hodges, the President-elect was quoted at Manchester, N.H .—and 

by the way, the distinguished Senator from New Hampshire is here, 

a member of this committee—I think it was on September 2:

We shall protect our textile and shoe industries.

Now, as an expert in the textile industry, Governor, and as a 

nominee for this responsible position, do you care to elaborate at all 

on what measures of protection you would recommend at this time?

Governor Hodges. No, sir, I would not at this time.

Senator Schoeppel. I note also in the platform at page 19 it pledges 

policies tha t will cause our economy to grow at an average rate of 

5 percent annually without inflation.

Is it your expectation tha t the rate of growth for 1961 would be 

on the high or the low side or the readjusting side?

Governor Hodges. Well, it would have to be, Senator. I think 

it is on the readjusting side because I don’t think you can reach the 

higher figure immediately.

I think it is a good goal th at we can have a higher rate of growth 

than we have experienced in the last several years.

Senator Schoeppel. I note further tha t with reference-----

The Chairman. I think the Governor should repeat what he said. 

This is very important.

As I understand it, you think we are going to have a little trouble 

for a few months and then we are going to reach sort of a plateau; is 

that correct?

Governor Hodges. That could be an interpretation of what I said. 

What I said, Senator-----

The Chairman. I want you to correct me if I did not hear i t right.

Governor Hodges. What I said in answer to the Senator’s question 

was I thought there would be a readjustm ent period.

Certainly we are going through some adjustment now, some 

economists may take it one way or some another, but we are going 

through that. We cannot get this higher rate of growth to which 

the Senator referred immediately. It has to be done over a period 

of time. I said we had been a little on the low side in the last several 

years.

Senator Schoeppel. Further, Governor, in the discussion of inflation and its cures, the platform—I think it is on page 20—promises:

Action to restrain administered price increases in indu strie s where economic 

power rests in the hands of a few.

Are you in a position to describe some of the industries to which 

this platform statement might refer for do you have an opinion on it?

Governor Hodges. 1 do not have an opinion on that, sir.

Senator Schoeppel. I would like to switch now, with your permission, sir, to questions from one of the members of our committee. 

Senator Butler from Maryland is unable to be here and has asked th at 

I ask you certain questions.

What is your feeling with respect to the proposition of Government 

competition with private industry?

Governor H odges. Basically I think private industry should handle 

commerce and industry. There come times when the Government has
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 7

to step in and help. I have nothing specific in mind. But if you asked 

me for a point of view I would be for private industry doing the job.

Senator Schoeppel. Another question from Senator Butler. Do 

you feel tha t steps should be taken to accelerate the merchant ship 

replacement program under the provisions of the Merchant Marine 

Act of 1936, even to the extent tha t you may have to request increased 

appropriations for ship construction?

Governor Hodges. I would not comment on t ha t at the moment, 

sir, because I have not studied that. I know what the basic problem 

is, I know what we have roughly in the budget but I am not prepared 

to say I would ask for any increases at the present time.

Senator Schoeppel. A further question, please.

Do you expect to take cognizance of the bleak outlook for the 

Nation ’s private shipbuilding and ship-repairing industries?

Governor H odges. Well, it will be a pa rt of this total program tha t 

we have in the D epartment of Commerce of rebuilding ships, of building new ships, and of subsidizing certain shipping operations.

Senator Schoeppel. Senator Francis Case, of South Dakota, who 

is not a member of this committee, has asked t hat I propound some 

questions to you.

Mr. Chairman, am I taking too much time?

The Chairman. No; we have lots of time.

Senator Schoeppel. It has been suggested as desirable that the 

interstate highway improvements-----

The Chairman. Let’s not take until Friday, but we have lots of 

time until Friday.

Senator Schoeppel. I will repeat: It has been suggested as desirable 

tha t the Inte rstate Highway improvements be integrated with plans 

for mass transit facilities in cities.

Do you feel tha t this is desirable where mass transit plans are 

sufficiently advanced to permit cooperation with the highway 

development?

Governor Hodges. Senator, tha t gets into not only a technical 

phase but a broad policy phase; I would not at this moment think I 

would favor it.

I could not say definitely until I had given study to it. This is one 

of the toughest problems facing the Nation today, this matter of 

transportation.

Senator Schoeppel. A further question along the same line.

Construction of the Inte rsta te System is estimated to cost considerably more than will be available in the highway trust fund under 

the present legislation.

Do you favor new legislation to provide for a completed Interstate 

System at the earliest practicable date?

Governor H odges. Yes, at the earliest practicable date; that would 

be generally in line with what has been proposed. It has been expanded a little bit. Whether that takes 10 years or 12 years I would 

not want to say.

I do not think it will be stepped up from what the basic program is, 

but I think we ought to move forward.

I am in favor of doing it as quickly as we practically can, because 

I think the whole Nation is favoring this Interstate System.

The Chairman. The President of the United States has recommended to Congress an increase of one-half a cent on the gasoline 

tax. What is your opinion about that?
8 NOMINATE LUT HER H . HODGES TO BE SECRETARY OF COMMERCE

Governor Hodges. I think tha t is something, sir, tha t you folks 

are going to have to decide as a policy. I am in favor of having 

enough funds put in the trus t fund, whether it is from the gasoline 

tax or excise taxes, or whatever you decide is necessary.

Senator Schoeppel. Another question from Senator Case.

The Federal-aid highway program involving cooperation between 

the States and the Federal Government for highway improvement has 

been operated most successfuly for over 40 years.

Do you favor a continuation of this Federal-State cooperation program for highway improvement?

Governor Hodges. Yes, sir.

Senator Schoeppel. There have been disturbing reports of irregularities and wrongdoing in connection with the Interstate Highway 

program. From your experience as Governor, would you recommend tightening the Federal controls to insure integrity in the program a t all levels 

of the Government?

Governor Hodges. Yes, sir; I am not sure that there are certain 

specific things you can tighten to stop this payola business in some 

places. I don’t think this question of irregularity is held to any part 

of the country or any party or group, it is an individual matter generally. But if there are any loopholes or policies that need tightening from 

the Federal angle tha t would stop that, you may be sure I would 

follow it up.

Senator Schoeppel. One further question tha t has been submitted to me, Governor. Do you feel that the urban highway improvement should be coordinated with the urban redevelopment 

plans when or where feasible?

Governor Hodges. Yes, sir.

Senator Schoeppel. Mr. Chairman, I will defer other questions 

until a later time.

The C hairman. I might say, Governor, tha t this committee on this 

urban transportation problem, last session directed a study or an 

inquiry into the urban problems of transportation. We have only 

recently delegated the study to a group. What is the name of the 

group?

Senator Case. It is the Regional Planning Association of New York.

The Chairman. The Regional Planning Association, and they are 

making a study of this, starting in the No. 1 priority area which is 

New York and New Jersey, and they will have a report ready for us 

I would think some time in the early spring, which we will submit to 

the Department of Commerce for their consideration. I think it will 

contain a lot of valuable recommendations.

Governor H odges. Yes, sir.

The Chairman. The Senator from Rhode Island?

Senator Pastore. Governor, I think we all agree tha t one of the 

most vexing and challenging problems confronting the administration 

and the Congress is this whole panorama of international trade, imports as against exports. Having been associated with the textile industry for a number of 

years I am wondering if you are familiar with the investigation of the 

decline of the textile industry that was made by a special committee 

of this general committee with reference to the textile industry?
NOMINATE LUT HER H. HODGES TO BE SECRETARY OF COMMERCE 9

Are you familiar with it?

Governor H odges. I am familiar with your committee which you 

chaired, Senator. I would just like to say this, in what is really a 

comment on this textile problem as being a specific problem of the 

Department, tha t the administration, the incoming administration, is 

definitely considering as on its agenda program the problem of the 

textile import situation.

Senator Kennedy, President-elect Kennedy, is asking two or three 

Secretaries, including the Secretary of Commerce, to give it study. 

So we will be following this up, including the repo rt you are talking 

about.

Senator Pastore. Are you familiar at all with the recommendation 

tha t was made by our committee with relation to this interagency 

committee?

Governor H odges. Not specifically; I remember reading it.

I know tha t you did. I don’t remember which agencies were 

involved.

Senator Pastore. Do you think it would be helpful to the solution 

of the problem, if it can be solved at all, b ut at least in the direction 

of guidance to the administration in seeking to solve the problem, tha t 

we have together in one committee such as an interagency committee, 

representatives of the various departments that have anything at all 

to do with this problem?

Governor H odges. Very definitely, sir, I think that on this and 

many other problems, Senator Pastore, that the State Department 

and the Treasury Department sometimes have as much or more 

influence as the Department of Commerce, even though it affects 

business. Whereas if it touches international trade at all you have 

all of them involved and I think an interagency committee is almost 

essential.

Senator Pastore. Would it be your feeling th at it might be in the 

interest of the Nation and also for a better understanding of the 

problem, if the negotiations at GATT tha t we did have there, fortifying the representatives of the State Department, personalities 

representing American industry?

Governor H odges. Yes, sir. Th at is in the program, sir; we 

discussed it this morning.

Senator Pastore. You feel strongly that would be a good thing?

Governor H odges. We definitely should have a group of advisers, 

practical industrial business advisers, to sit with the people a t GATT, 

and tha t is in the program, sir.

Senator Pastore. Beginning shortly, I think it is on the 6tli of 

February, this subcommittee, which is now a permanent subcommittee of the whole committee, on the textile industry, of which I 

have the privilege of being the chairman, will again reopen hearings 

in order to bring up to date all the data tha t was gathered when we 

started our hearings in 1958. Do you think it might be a little 

premature to invite you to come and testify a t tha t time?

Would you prefer to wait for our report before you make comment?

Governor H odges. I would prefer that. I have refrained about 

50 or 75 times in the last 3 weeks from making statements abo ut what 

we were going to do and so on.

I will be glad to help in any way, and if it is far enough advanced 

after I have learned something more about it, I should be very glad to.
10 NOMINATE LUTHE R H. HODGES TO BE SECRETARY OF COMMERCE

Senator Pastore. I realize it is a very difficult time for you, and 

I would not want to encumber you, with all the other responsibilities 

you do have. I hope, once we do get this in shape, you would give it your personal 

attention. I quite agree with you tha t it is an essential industry and there have been many lamentations of what has been happening to it, and I would hope th at your Department would be a little more strenuous 

than the experience we have had in the past.

Governor H odges. All right, thank you.

The Chairman. The Senator from Oklahoma?

Senator Monroney. Governor Hodges, it is with a great deal of 

enthusiasm tha t I welcome you before this committee. In fact, I 

considered your appointment—I think the first announced to the 

Cabinet—as an omen of the greatness of the personnel that has been willing to follow your lead in accepting responsibility in this administration. I have noted with great interest in the past your aggressive attitude in building the industry of North Carolina; the great progress tha t this State has made under your leadership; and also your search for new industries tha t would fit into the economy, even if you had to send groups of people around the world to try to find new clients for it. So, I think it will be a great addition to have a man of your exper­ ience in private business and also in public operation of a vital, growing State at the helm of our Commerce Department. I would like to ask if you would consider it your duty as the Secre­ tary of Commerce to advise other departm ents of Government as to business opportunities, tha t the use of their procurement, perhaps, of all types of products for use abroad might stimulate demands for these American products? What I have specifically in mind is, I think you will find practically none of the cars presently used by our embassies abroad, or by our farflung aid agencies abroad, or by our military abroad, displaying in the use over there of our rather superior compact American-made automobiles. Some way or other, it seems to me a misfire to have a product tha t is superior to the European small car, tha t fits the roads better, tha t would intrigue the foreign users, and then to find American agencies using abroad the more bulky, clumsy, gigantic tail fin automobiles tha t have no 

market whatever with our foreign friends. Would you feel it a breach of du ty as the Secretary of Commerce, if you found these and many other types of products abroad which are not being properly displayed in use by our agencies, to consult with, or to persuade, or to use the salesmanship which you have exhibited as Governor to help promote American industry abroad?

Governor Hodges. Very definitely, Senator Monroney. Where I 

could properly do it, I would certainly do it. I think tha t this country has hardly scratched the surface of what it can do in the way of inventiveness and productivity, and I am very hopeful tha t we can interest a greater segment of our industrial 

machine—if we may call it that—in this country to take an interest 

in making things—including the things you are talking about—for 

consumption abroad. I think we have a great opportunity of expanding what we are doing.

Senator Monroney. You would not think tha t you would be 

prohibited by the narrow limits of your own Department on new
NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE 11

products like new scientific breakthroughs of atomic energy for 

peaceful uses, diesel industrialization operations, and other things, 

to go to the other heads of departments and interpret to them the 

meaning of this as a new frontier for American business opportunity 

abroad?

Governor H odges. I agree thoroughly with what you say, and I do 

not consider it out of place for one Cabinet officer to do what he can 

in this respect. I t’s a team play.

Senator Monroney. Then you conceive the job as encompassing 

the job of being sales promotion man for American products abroad, 

either by contacting foreign users or even helping to stimulate the 

introduction of these by our own purchases and use abroad?

Governor Hodges. Yes, sir.

Senator Monroney. I am very glad to hear you say that because 

I think this is a vacuum tha t has not been filled for many, many years 

in this dynamic effort to go after the new. We cannot always compete 

with the lowest price line and the lowest level of simply made materials 

and simply made fabrics and other things. We have got to research 

out the things where we could excel in technological progress if we are 

to replace the markets which we inevitably will lose-----

Governor Hodges. I agree with you.

Senator Monroney (continuing). Through other people catching 

up with making bicycles or wheelbarrows, let us say.

The Chairman. As a matter of fact Senator Monroney, the essence 

of one of the recommendations of the staff report on foreign commerce 

takes tha t direction. Instead of clamping ((own on something t ha t’s 

coming in, and building the wall, it suggests tha t there are many 

other things we can do to level it off, which is a kind of new approach 

in this balance-of-payments deficit in our export and import problems.

Governor Hodges. Th at’s the approach we are taking, Senator, 

in trying to build our team in the Department of Commerce.

Senator Pastore. Would the Senator yield for a question on tha t 

very question you have raised?

Senator Monroney. Yes.

Senator Pastore. Don’t you think, Governor, tha t it is essential 

for your Department, in that regard, to investigate and explore just 

what articles are coming from what countries, and what we are selling 

to these particular countries? I think tha t heretofore what we have 

done, we have just taken the total balance figure on the ledger and 

said, “ We sell so much and we buy so much.” Now we have got to 

buy in order to sell, and yet nobody has taken the trouble to find out 

what we are buying from what country and what we are selling to 

those countries.

Don’t you agree with that?

Governor Hodges. I think you must have your facts before you 

will know how to move.

Senator Monroney. Right along th at line, you would not hesitate, 

after you have studied the question carefully, to necessarily improve 

or to expand the foreign trade efforts of the Department of Commerce, 

would you?

Governor H odges. We are going to try to expand it.

Senator Monroney. I feel tha t in the Department of Commerce 

there is greater opportunity than giving these funds to the State 

Department, or to others whose association with strictly trade promotion of new items gets lost in the diplomatic paperwork and never
12 NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE

gets around to contacting, or helping our producers contact, prospective customers, or prospective people who could open brandnew areas 

of new marketing for us.

One other question, then I am through.

I appreciated your answer, and in the same context, without considering the level of expenditures on public roads and Federal aid to 

public roads, since 1946 we have had a Federal aid program for the 

assistance of local communities on a 50-50 matching basis for Federal 

aid to airports. Since most of our air transportation—perhaps 90 

percent of it—is involved in interstate commerce, you would see 

nothing wrong, would you, in this program being continued as a part 

of the Federal responsibility—the same as we recognize the Federal 

responsibility in the area of Federal-State highways?

Governor Hodges. I couldn’t answer that unqualifiedly because 

I am no t as well acquainted with tha t as I would like to be.

The basic principle I like.

Senator Monroney. But the basic principle is not different from 

the basic principles that lead to the establishment of Federal aid to 

public roads, in your opinion?

Governor H odges. Yes, sir.

Senator Monroney. Th at’s all I have.

The Chairman. The Senator from South Carolina.

This is a good example of what the former Governor of South 

Carolina said to the former Governor of No rth Carolina. [Laughter.]

Senator Thurmond. I am fixing to say right now tha t I want to 

congratulate him; not only him, but the President-elect upon choosing 

him. I don’t think he could have made a finer selection.

Governor Hodges. Thank you, sir.

Senator Thurmond. Governor, I am slightly interested, as all the 

States are who are manufacturing textile goods, and you have had 

considerable experience, of course, in that field. We feel th at textiles, 

as you know, according to the Defense Department, ranks second to 

steel in importance in this country with regard to national defense. 

I am wondering if you have any plans in mind to make a study of the 

textile situation and see what can be done to alleviate some of its 

problems, and probably restrict some of the excessive imports th at are 

competing to such an extent tha t a num ber of mills have had to shut 

down.

I know of mills in my State—one in Rock Hill, not far from the 

North Carolina line—that shut down several years ago. And there 

are others. And I was interested to know if you had thought of tha t 

subject any, and if you plan to make a study of it to see what can be 

done along tha t line.

Governor Hodges. Senator Thurmond, I ’m glad to have the 

question. Senator Pastore raised that question before you came in, 

sir, and I told him this: tha t the new administration under President 

Kennedy is going to have a study made of this.

As you may know, they already have referred it to a staff member 

of his group.

I think tha t President-elect Kennedy has already taken the textile 

problem under advisement. He will ask an interagency committee, 

which will include the Secretary of Commerce probably, to study 

this problem and see what can be done.

I think tha t we must know what’s coming in, even though we may 

put a positive accent on trying to increase our trade abroad, our
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 13

exports, tha t we must consider all these other things; and I can 

assure you tha t it is going to be taken into consideration. The Tariff 

Commission, as you know, under the present statu tes and rules, makes 

the decision on what is done; but I think all of us can help, Senator 

Thurmond.

Senator Thurmond. Our distinguished chairman, Senator Magnuson appointed a special Textile Subcommittee of this committee composed of Senator Pastore as chairman, the distinguished 

Senator from New Hampshire, Mr. Cotton, and myself. And I want 

to say to you any way we can work with you or cooperate with you, 

it will be our pleasure.

Governor Hodges. Thank you, sir.

Senator Thurmond. Again I congratulate you and the Presidentelect upon your appointment.

Governor Hodges. Thank you, Senator Thurmond.

The Chairman. The Senator from Ohio.

Any questions?

Senator Lausche. Yes.

Governor Hodges, you have been in the Governor’s office now for 

6 years and a bit more; is tha t right?

Governor Hodges. Tha t is right, sir.

Senator Lausche. Tell me, while you were Governor, did you strive 

to develop a balanced budget and to impose taxes that would he 

adequate to finance the necessary current expenditures?

Governor Hodges. Yes, sir; we always had a balanced budget. 

Under the North Carolina law you couldn’t spend it until you had it. 

[Laughter.]

We never had an unbalanced budget.

Senator Thurmond. Do you think we could get tha t adopted here? 

[Laughter.]

Governor Hodges. I t’s a good idea to consider.

We didn’t have to have many new taxes, Senator Lausche, while I 

was down there.

Senator Lausche. You did have to have?

Governor H odges. No.

Senator Lausche. But you basically believe in the principle tha t 

Government, just as the family and the individual, ought to operate 

on a balanced budget?

Governor H odges. Senator, I ’m so simple in my thinking tha t 1 

think big Government is just an extension of an individual property.

Senator Lausche. Even though you did not have constitutional 

limitations, your basic philosophy would be tha t except in extraordinary emergencies the Government ought to operate within the 

limit of its revenues for each year?

Governor H odges. That is right, sir.

Senator Lausche. Now, beginning with that as tiie base, you said 

that you would favor moving forward as rapidly as is practical in 

the development of the highway program. I would like to explore 

the meaning of the word “practical.”

I think you were witli me on the Governors’ committee back in 

1954 when we studied what was supposed to be a recommendation 

for the development of the Intersta te Highway System; is tha t correct?

Governor H odges. That is right.

64550—451------ 3
14 NOMINATE LUTH ER H. HODGES TO BE SECRETARY OF COMMERCE

Senator Lausche. And we at that time suggested tha t it be initiated, but on the basis of current financing of the program. Is that 

about right?

Governor Hodges. 1 think so.

Senator Lausche. And 1 judge from what you said tha t you feel 

tha t the highway trust fund basically ought to be made adequate 

under the formula of funds contributed to that program as now set 

forth in the law; but you qualify tha t a bit and say tha t if the Senate 

or the Congress determines to take it out of the general revenue, of 

course, you would have to go along?

Governor Hodges. It would be up to us, sir, to build the highways 

in the most economical way possible.

Senator Lausche. Would you urge the building of the highways 

under this term as rapidly as is practicably possible if you knew th at 

there were extravagances and wastes being committed because of the 

hasty promotion of the program, the elimination of necessary competition because of the excessiveness of work, the excessive payment 

of prices for land when the landowners know tha t they have got the 

Government on the hook; or would you think tha t those are practical 

factors that ought to be considered in determining the speed with which 

you go forward?

Governor Hodges. Basically, Senator Lausche, some of those 

problems you have prop rly brought out ought to be handled administratively within the Department. I do not know the details 

of them yet. But beyond that, if we could not handle it, it comes back 

to a matter of policy.

I would make this stateni nt: I would not be so foolish as to say 

that you ought to double the gas tax in order to g't the roads through 

in a certain year. I say “as quickly as practicable” and I think the 

basic thing of putting it 10 or 12 years ahead is basically a sound 

suggestion.

Senator Lausche. There is a soundness to this thought, too, and I 

think we had it in mind that we ought not to think that in 1960 and 

1961 we ought to do all things when th^re will be succeeding generations wanting some public works to be done by them. Is th at correct?

Governor Hodges. Th at’s what I tried to say. I would not hurry 

it to the point of doubling taxes in order to get things don \ You have 

to take tlie tim \ and you make less mistakes if you take the time.

Senator Lausche. 1 think you are going to b ' confronted with this 

problem: thn

 competition between the railroads, the pipelines, the 

airlines, the bus lines, and the water lines

The Chairman. The inland waterways.

Senator Lausche (continuing). The inland waterways. You will 

probably somewhere along the line have to decide whether one type of 

transportation is being subsidized to the disadvantage and to the 

impairment of the life of the other types.

Do you have any views on that subject of subsidies?

Governor H odges. Well, I think at times, Senator, you do have 

exceptional subjects, such as in our shipping situation. I would not 

at this time say which are wrong.

Senator Lausche. I understand that.

But on this, if you found from the facts that one type of transportation was being subsidized by the general taxpayers and thus damaging the ability of the other type of transportation to survive, do you 

think it would be worthwhile looking into?
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 15

Governor Hodges. 1 would certainly look into it.

I said earlier, Senator Lausche, that this transportation problem, 

nationwide, is one of the most difficult that we face. There are studies 

on it, and we will all try to put our heads to it.

The C hairman. Have you selected your Undersecretary for Transportation, yet?

Governor Hodges. We have not yet, Senator. We hope to do so 

shortly.

Senator Lausche. Now, one other further question.

There has been considerable discussion about the outflow of gold, 

and I ’m of the opinion that the discussion will grow broader, that the 

seriousness of the problem will have its impact upon the minds of our 

American citizenry.

In the efforts to solve that problem, in my opinion, there will be 

various remedies suggested that will deal with the symptoms and 

probably not at all with the causes. As Secretary of Commerce will 

you, in the examination of that subject, boldly declare what you find 

the facts to be with respect to causes and remedies, regardless of which 

segment of the economy those conclusions might hit?

Governor Hodges. Yes, sir; that is one of the basic principles.

Senator Lausche. That is, you will want to ascertain the truth , 

tell the truth, and if that trut h shows that we are pricing ourselves 

out of the world markets in some areas, you will so state?

Governor H odges. Very definitely.

Senator Lausche. Th at’s all.

The Chairman. The Senator from Texas?

Senator Yarborough. Governor Hodges, we welcome your appointment. I think it’s fortunate that the country will have as a 

Secretary of Commerce a man who has proved himself successful both 

in business and in Government and has served at home and abroad.

Governor H odges. Thank you, Senator.

Senator Yarborough. I will not go into this line of gold, or our 

imbalance in payments. You have been asked about that.

I am going to ask a little subsidiary question.

Are you familiar with Mr. Packard’s book, “ The Waste Makers,” 

and the general problem with which it deals, of the manufacture of 

items that will wear out in a hurry so tha t a replacement can be sold?

Governor Hodges. I haven’t seen that book, sir. I know the 

practice.

Senator Yarborough. Well, I recommend that you read that book, 

not as the ultimate authority but merely a popularized version of some 

problems; and with your business experience, I want to recommend, 

Mr. Secretary, that you give tha t deep study on its overall impact 

upon our American economy and our American resources and consider 

ways and means tha t a Secretary of Commerce might take to right 

whatever evils exist in that regard; and I ’m sure that we will both 

agree that there are some evils in that.

Governor Hodges. Thank you, Senator.

The Chairman. The Senator from Alaska.

Senator Bartlett. Governor, I, too, wish to congratulate you upon 

the eve of your assuming this important office.

Governor, do you know approximately how many employees are in 

the Commerce Department?

Governor Hodges. Roughtly 35,000.
16 NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE

Senator Bartlett. Do you know how many of those are in the 

field and how many here in Washington?

Governor H odges. Oh, 1 would say more than half of them are 

here in Washington.

Senator Bartlett. And quite a few of them are abroad.

Not many abroad; a few.

they stationed with the State

Governor Hodges

Senator Bartlett. Abroad, are 

Department?

Governor Hodges. Generally.

Senator Bartlett. But have autonomy of their own?

Governor Hodges. Generally not too much autonomy of their own.

The Department of Commerce really gets its commercial statistics 

from the State Department, the commercial attaches. We have a 

limited number of our own observers abroad, and they are autonomous, responsible to us.

Senator Bartlett. There has been mentioned here several times 

this morning this important area of foreign trade. In connection with 

tha t, Governor, what is the participation of the Commerce Dep artment? Is it administrative, or is it largely promotional and advisory?

Governor H odges. Let me say from my conception of it as I have 

looked at it, it is, or ought to be, promotional. It ought to encourage 

business both from domestic business and ought to specifically encourage export trade and investment, et cetera. 1 think our building 

of a team for the Department is going to be one of using our own 

experience, merchandising, and selling; namely, to encourage business 

and industry in this country to do a job.

Senator Bartlett. And in respect to basic trade policies, 1 should 

infer that you would not, as Secretary of Commerce, be able to operate 

on your own motion. This would be in conjunction with other departments of Government and the President himself. You would be 

part of the whole; is that right?

Governor Hodges. That is right, sir. We must work together.

Senator Bartlett. But you will be taking the lead, I assume, in 

making recommendations that would include the situation?

Governor Hodges. I conceive it my duty, as a Cabinet officer, 

representing the business end of it, to make such recommendations.

Senator Bartlett. Governor, is the Federal Maritime Board, 

if you know, independent administratively, or does it come within the 

jurisdiction of the Secretary of Commerce?

Governor Hodges. Theoretically, it comes within the jurisdiction 

of the Secretary of Commerce. I cannot answer practically at the 

moment.

Senator Bartlett. You have read, or at least heard of, the Landis 

report?

Governor H odges. Yes.

Senator Bartlett. Have you read tha t yet?

Governor H odges. I have not, sir. Oh, I have read the newspaper accounts; but I have not seen the book.

Senator Bartlett. We are in the same situation: I haven’t read it 

yet, either. [Laughter.]

Senator Bartlett. But in case, after you take office and make 

studies and decide that changes ought to be made on that Board, for 

example, this, then, would be done administratively apart from such 

agencies as Federal Trade Commission, the Federal Power Commissi on's that right?
Dominate luther h . hodges to be secretary of commerce 17

Governor H odges. Yes, sir; that would be my judgment.

Senator Bartlett. Thank you, Governor.

Th at’s all, Mr. Chairman.

The Chairman. Well, Governor, what is your interpretation of 

the legal function of the Maritime Board in this respect; this committee has jurisdiction over the Maritime Board, they operate under 

the Maritime Act of 1936. The Commerce Department, of course, 

handles the Maritime Board in the sense they are the housekeepers, 

the budget and all the things, but would you say tha t you were advisers to the Maritim e Board or tha t you would direct them on decisions?

Governor Hodges. Senator Magnuson, I couldn’t answer it specifically. You are far more acquainted with that than I am. They 

are in the Department; I understand th at they are part of the general 

organization. I do no t know what the legal restrictions are on their 

not getting direction as opposed to others.

Senator Bartlett. Mr. Chairman, may I say in tha t connection, 

I didn’t intend at all to try to place any words in the Governor’s 

mouth that the Secretary of Commerce would decide the decisions.

The Chairman. I think the Governor does understand the function of the Maritime Board is to operate under the law, the 1936 law, but the Department of Commerce exercises a sort of advisory jurisdiction over the Board as to what they may do within the framework 

of the 1936 act. Is tha t your interpretation?

Governor H odges. Yes, sir.

The Chairman. The Senator from New Hampshire.

Senator Cotton. Governor, first I wish to join the other members 

of this committee who have expressed their pleasure and gratification 

at the fact tha t you have been designated by the President-elect.

As a member of His M ajesty’s loyal opposition I, too, feel the same 

way, and am for you.

I do want to ask you two or three rather specific questions and I 

know that you will understand I am not trying to get you to shoot 

from the hip or put you on the spot before you even take over the 

duties, but a t least it will pinpoint certain things tha t I am sure you 

will be considering la ter and that we will be able to discuss with you 

later.

One is I wanted to make sure t hat I understood the discussion that 

you have had regarding the Interstate Highway program. I take it 

from what you said, Governor, that you agree in the main with what 

we call the Byrd amendment, that whatever we do in the matter of 

the Dep artm ent we do in the tradition of No rth Carolina on a payas-you-go basis and not spend our money until we get it.

Governor H odges. I think you have established the policy of the 

trust fund. If the trust fund has money we spend it, if it doesn’t, 

you don’t spend it.

Senator Cotton. The Chairman asked you about the question of 

adding a half a cent to the gasoline tax. I wasn’t entirely clear about 

your response, I quite understand that you might not want to go on 

record today, but I believe your response was th at is up to us and not 

up to you, but I think tha t sooner or later the committee is entitled 

to your advice on that.

Governor Hodges. Well, I am not prepared today to give you 

advice on tha t particular situation, or any other one, but my comment 

was a little fuller than what you say.
18 NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE

1 said tha t if it were necessary to finish the program in the basic 

plan tha t had been previously outlined, tha t it took extra gas taxes 

and/or exercise taxes I thought we ought to have them.

As to whether it ought to be a half a cent, a quarter of a cent or a 

cent and a half I am not prepared to say. Basically, you must make 

tha t final decision. I say from my point of view we have to have 

these built, we will try to build them as economically as possible. 

Whatever it takes within the trust fund we will do it.

Senator Cotton. Thank you, Governor. To save time, as a member of the subcommittee that worked on our textile problems, I wanted 

to associate myself most emphatically with the suggestions and the 

questions of the Senator from Rhode Island and the Senator from 

South Carolina.

I am going to say one thing tha t perhaps in their kindness and 

courtesy and graciousness they wouldn’t say today when the present 

administration is just on its way out, but I think I can say it as a 

Republican and as a very stanch admirer and loyal supporter of the 

outgoing administration. I had the distinct feeling tha t the administration just went through the motions in the matter of this interagency committee that our committee recommended and wanted to 

have set up. It was set up and it was named, but I never thought 

tha t they went through with us too much on it and I never was very 

happy about it, and I think I can say it perhaps more appropriately 

this morning than some other members of this committee.

The President-elect, we know him, to our sorrow, tha t when he 

undertakes something he carries it through. [Laughter.]

I assume th at as Secretary of Commerce, which you certainly will 

be, and as a former textile man yourself, your influence is going to be 

to really do something definite and not just go through the motions 

and have a lot of pleasant talk about the plight of the textile industry 

in this country. Am I correct?

Governor H odges. Yes, sir; I associate myself with President-elect 

Kennedy in his determination to do something, whatever it is.

Senator Cotton. This principle of saying, and I agree with it and 

it is fine, of saying that in dealing with our foreign trade tha t the idea 

is to try to sell more American products abroad rather than stop 

foreign products coming in, sounds well, but isn’t it your opinion, 

Governor, tha t we must take some thought—that is a good general 

program—but you can’t sacrifice an industry like the textile industry, 

that in case of, for instance, in case of future emergency is just as 

necessary to this country as steel or guns or weapons; you can’t 

sacrifice it to tha t principle that because we perhaps sell more automobiles abroad, why, we will let the textile industry fall by the wayside. I am sure you will agree to that.

Governor H odges. I agree to that.

Senator Cotton. Now, to be a little specific and again I am not 

trying to ask you to shoot from the hip but I would like so far as 

possible to get your thinking.

Some of us didn’t feel very happy a short time ago when an export 

license was granted to 40 American companies to enter into a contract 

to furnish the Soviet Union with a new $30 million up-to-date, last 

word, textile plant. I understand tha t the day we hope will come 

when we can share the world trade in a friendly way with our potential 

enemies, but we felt tha t we are in a contest with our opponents
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 19

ju st as much com mercially and ind ustriall y as we are militari ly and 

some of us were very un ha pp y ab ou t th at and now I find th at the 

sam e mo vem ent is on foot to gr an t an export license for certain 

mini atu re ball-bearing ma chi ner y. Incide ntally we in New Ha mpshire, being a good deal like Switze rlan d, have to live on our skills. 

We do n’t have the bro ad acres th at yo ur grea t St at e has and we 

do n’t have the larg e manufacturin g th at we used to hav e. Now, 

th at is one of the in dustries we h ave b uilt up in m y own St ate and I am 

no more ha pp y about havin g up -to -date {machinery sent to be set 

up in the Soviet Union to get the m into this field th an I was about 

the textile plant.

Wo uld y ou care to com me nt on th at situa tio n, spec ifically?

Governor H odges. I do no t know enough ab ou t it, Senator, to 

com ment.

Senator Cotton. Well, I can un de rst an d th at , bu t it ma y be some 

lit tle tim e before we get a cha nce to see you again. I hope th at 

you give th at y our ear nes t at te nt io n and th at after you] have go tte n 

acc lim ated and underway down the re, th at you will pe rm it some 

of us e ither with you or some of yo ur s ub ordinates to have a he art-t ohe ar t discussio n of th at point.

Go ver nor H odges. I will be glad to, sir.

Senator Cotto n. Tha nk y ou, th an k you very muc h.

The Chair man. The Se nator from New Jer sey .

Senator Cas e. Tha nk y ou, Mr. Ch air ma n.

Welcome, Governor, and I a dd m y cong rat ula tio ns and good wishes 

to you in this ter rib ly im po rta nt job. Th ere are ju st two points I 

wa nt to rais e with you. One I th in k you have alread y answered in 

sub stance .

I am deeply inter ested in thi s whole m at te r of a natio nal tra ns po rtatio n policy, one th at is coord ina ted and one which tak es acc ount of 

all pa rts a nd does n ot de al with this as we hav e, I think , too much with 

the various activ ities in the tra ns po rtatio n sys tem of o ur co un try as if 

they were sepa rate and no t closely interre lated as they are.

I know from wha t you said th at you agreed th at thi s is a desirab le 

thing. I ju st wa nt to emphasize yo ur sta temen t, I think , th at you 

will not only, whe n thin gs go wrong as t he Senator from Ohio suggested 

and a sub sidy to one ma y be a disadvantag e to anoth er, take action 

then, bu t actively yourself, interest you rself in the dev elopm ent of 

such a policy and tak e direction of it so far as you can?

Governo r H odges. Yes, sir.

Se nator Case. Tu rning now to the h ighway buildin g prog ram , there 

are two point s I wa nt to make.

I have been many tim es distres sed ab ou t wh at seemed to me to

be ------

Th e Chairman. Se na tor Case, I think the reco rd ou gh t to say 

when we are speak ing of the hig hway pro gram, which I am sure you 

are, th at we are tal kin g ab ou t the con dition of the so-called trus t 

fund, wh eth er or no t we raise a tax to imple me nt the trus t fund or 

wh eth er the tr ust fund is ad eq ua te to keep wha t you said, Gover nor, 

is a reason able prog ress in the h igh way pro gra m, so the reco rd will be 

stra ig ht on th at .

Se nator C ase. I am int ere ste d, of cours e, in th at pha se of it bu t 

my question really was directed to a broa de r phase of th at sit ua tio n. 

I t h as seemed to me, as rep res entin g the St ate which is pr et ty highly
20 NOMINATE LUTHER H . HODGES TO BE SECRETARY OF COMMERCE

built up and where the green space is almost under our eyes disappearing into oblivion, tha t one of the things tha t ought to be done is to 

have in the Federal Government responsible attention, not only to 

the question of building highways where they can be most efficient 

for the transportation of more and more and more people, but also 

adequate consideration of the needs of the area, urban and suburban 

and the rest, to the relation of building of more highways to the 

preservation of these green spaces and the amenities of decent living.

I am wondering whether you have given any thought to this 

problem because to us in the metropolitan areas and the suburban 

areas tha t are fast swallowing up all the green space of our State, it 

is a matter of very great importance in the present and for the 

immediate future.

Governor Hodges. Well, Senator, of course, if you are going to have 

a proper highway system, an integrated system, we must take those 

things into consideration in our congested population centers. I 

think it is the policy of the highway building people, they have taken 

tha t into consideration to a certain extent.

For illustration, take North Carolina where we had $40 or $50 

million several years ago, it has been cut in half. Virginia, which 

is the smallest State, I am using only as an illustration, has increased tremendously. Well, tha t is primarily because it is now 

on a needs basis and the metropolitan area of Washington, Arlington, 

and Alexandria needs the money.

The same principle will hold good in New Jersey and other places. 

It is going to cost more and is going to take a larger ratio of money 

from now on to take care of the situation you are discussing.

Senator Case. I am glad you raised tha t point. It has been very 

clear to me since I have gotten more actively into this matter in the 

Senate, tha t the needs of our part of the country are not adequately 

taken care of in the proportion to all the rest and tha t we have been 

short changed. I don’t suggest any malevolence here, but a state of 

facts tha t I believe to be very, very true.

In this connection of the interrelation between the development of 

the highway program and other interests and values, one specific 

thing that has been suggested and I have urged this strongly myself, 

is that there be conferences and consultation and perhaps some system 

set up for a veto on the building of new roads which may affect other 

Federal developments, other developments in the way of urban renewal 

and slum clearance and city planning and adequate care for people 

who live in slums now, and tha t we do not just adopt, without question, 

a report of engineers and economists as to what is the most direct and 

efficient way from the standpoint of transportation only in building 

new roads without regard to their effect upon these other programs. 

Do you agree with this?

Governor Hodges. I understand what you are talking about, 

Senator Case. Basically, under our policy of highway building we 

leave it to the States to decide where the road goes, as you well know.

Senator Case. This, I know.

Governor H odges. Now, a State ought to recognize its own problem more quickly than a Federal department recognizes it. Who, if 

anybody, should have the veto I am not prepared to say. I think it 

would be foolish if we built a road, say, to Newark or Trenton or 

somewhere, without any consideration of all the other agencies of the
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 21

State, but I think the primary responsibility would be with the State 

and its agencies to associate themselves with tha t basic decision before 

it is made.

Senator Case. I don’t in any way want to take away from the 

States either the responsibility or authority in these matters, but I 

have had the feeling th at the n ature of problems in areas where highways and highway systems cross State lines, for example, there ought 

to be not only State attention but Federal attention to this problem, 

too.

Governor Hodges. We will take a look at it.

Senator Case. Thank you very much. I have nothing further.

The C hairman. The Senator from Pennsylvania.

Senator Scott. Thank you, Mr. Chairman.

Governor, I think this Republic of ours is very fortunate tha t it 

is going to have the benefit of your recognized talents and I certainly 

congratulate the administration on tha t widsom in the selection of 

their Secretary of Commerce.

Governor H odges. Thank you, Senator.

Senator Scott. I recall tha t it has been the policy of the Commerce D epartment to send from time to time representatives abroad 

and I have in mind particularly when Assistant Secretary of Commerce Mueller traveled in Asia and I wanted to ask you whether 

you approve and would expect to continue the program of having 

your representatives visit other nations, discuss and explain our trade 

problems and difficulties and seek, where possible, to bring about a 

voluntary modification and amelioration of the trade policies of those 

nations which intensify our own problems.

Governor H odges. Senator Scott, tha t state ment makes a lot of 

sense. I think it is far better to do it on a voluntary basis, sitting 

down together, than it is to issue an edict and say we will do this or no. 

Sometimes you have to do both, but I like tha t approach.

Senator Scott. I do want to associate myself with what Senator 

Cotton said on cotton, and add that we, too, in my Commonwealth, 

are a textile State and tha t we have these great concerns. I won’t go 

into any questions on that. I wanted to turn to the distressed area 

program, and if such a bill is enacted—and I would expect it will be— 

should it be placed under the Departm ent of Commerce, should tha t 

occur, would you be prepared to give that a very definite priority, 

considering the serious nature of chronic unemployment in many parts 

of our country?

Governor H odges. Yes; I would, Senator Scott. We would give 

it the best administration possible, with the broadest sympathy as 

possible for a program of that kind because I think, as you well know, 

some people close their eyes to it. We have had greater unemployment over a long period of time.

Senator Scott. There is no question about it, and it is based, of 

course, on the migration of industry, or th e diminution of demand for 

the basic resources available to the industry, or the change of population trends, and these are deep-seated causes, and I wonder if you 

agree with me th at you could not expect that such a problem could be 

solved rapidly but th at it should be considered as a long-range problem 

and tha t it should be attacked immediately?

Governor H odges. That is right; I agree with that.
22 NOMINATE LUT HER H. HODGES TO BE SECRETARY OF COMMERCE

Senator Scott. And would you expect tha t if the program is under 

your supervision tha t the States and the local communities would 

assume their full share of the responsibility as determined by their 

laws and by the laws of the Federal Government?

Governor H odges. Yes, sir.

Senator Scott. There has been some discussion of urban transportation problems. Since this comes under the Department of 

Commerce it might not be proper to ask you to comment at this time 

on this question. If you do not it will be perfectly understandable, 

but should you care to I would like to know whether you would 

favor the transfer from the Department of Commerce of these urban 

functions to a new Department of Urban Affairs?

Governor H odges. I would prefer to study tha t further, sir.

Senator Scott. Would you give it some study so we might later 

inquire about it?

Governor Hodges. Yes, sir.

Senator Scott. I again want to wish you every success, Governor,, 

and simply add this, tha t with four former Governors on this committee you have got it made anyway. [Laughter.]

The Chairman. Well, we have run out of Governors. We will go 

now to the Senator from Kentucky.

Senator Morton. Governor, I want to associate myself with the 

remarks made bv Senator Scott. I think tha t the administration 

and the Nation is indeed fortunate to have prevailed upon you to 

come into the Washington maelstrom.

I am sorry tha t I was late. My question may be repetitious; if it is, 

I beg your pardon.

The extension of the Trade Agreements Act comes up, I believe, 

next year. From the time the program was first inaugurated under 

the then Secretary of State, Cordell Hull, it was presented to the 

Congress by the State Department with the other affected Departments, Commerce, Agriculture, Labor, and Treasury, sustaining the 

position. The last time tha t it was presented—the last two times it 

has been presented to the Congress, I think—certainly the last time— 

the Secretary of Commerce and the Department of Commerce took the 

lead, supported by the others.

You perhaps, I am sure, haven’t had a chance to go into all these 

things, but have you any thoughts as to whether the Department 

of Commerce should continue to take the lead in tha t program?

Governor Hodges. Senator Morton, I definitely think tha t the 

Department of Commerce should take a leading part. Whether or not 

they be designated as the leader, I can’t answer t ha t at the moment. 

We said before you came in, we are going to urge a revitalization 

of this whole matter of trade both ways, and I think the Department of 

Commerce, the Secretary, has the responsibility of advising the 

President and the administration, the people of the country as a whole, 

on what he thinks is best for this, and we are going to do tha t 

vigorously.

Senator Morton. I am glad to hear that.

I might just point this out, tha t as an officer of the State Dep artment during the first years of this administration, a good share of 

the responsibility fell on my shoulders for getting tha t program 

through, extended on two occasions, with the Secretary of State 

having the primary responsibility.
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 23

I will admit tha t the program has many international complications and State should have an important voice, but I think it will 

be far better, and tha t the Congress will receive it with greater enthusiasm, if the move is made to transfer primary responsibility to 

the Department of Commerce if the enactment of this legislation is 

continued.

I remember on one occasion beating the bill to recommit the whole 

program in the House of Representatives by just one vote, and I 

seem to have a faculty in getting myself involved in close elections—■ 

my own and others—and programs.

I hope, sir, tha t the Department of Commerce and Secretary of 

Commerce will continue to be the leading figure in the development 

of tha t program in its presentation to the Congress. I am for the 

program. I think we have to make adjustments. I have always been 

for it and I have always supported it and I think the program will 

fare better under the leadership of not just you as an individual, and 

I am sure it will fare well under you as an individual, but under the 

leadership of the Department of Commerce. As a member of this 

committee, if there is anything I can do to help you in any way or 

members of your staff, my door is always open.

Governor H odges. Thank you, Senator.

The Chairman. I may say, Governor, that there probably will be 

in this session of Congress several proposals to amend and modify the 

Trade Extension Act and we will be calling upon your Department 

to give us advice in this matter, as the Senator from Kentucky says.

I think it needs a lot of overhauling, the whole act.

The Senator from Indiana?

Senator Hartke. Mr. Chairman, I want to thank you, and Governor, I am delighted to see you here, and to renew our personal 

relationship.

I want to extend to you the warmest of congratulations and the 

warmest of feelings and also congratulate your lovely wife and extend 

to her my sympathy for the many hours which she is going to have to 

share with the rest of the country when you are absent from her.

I know that this is more than just a passing thing here in Washington, I think we can agree with that.

1 would like to point out to you tha t the manual of orders, in regard 

to the Office of Secretary, makes this particular statement in section 2 

in subparagraph (1):

Th at it shall be the province and the duty of said departm ent— 

that is the Department of Commerce—

to foster, promote, and develop the foreign and domestic commerce, manufacturin g, shipping, industry, and transportation.

I recall tha t when the immediate Secretary was before this committee I asked him about these words, and I asked him whether he 

was willing to assume this duty of actually promoting particularly 

the domestic and foreign commerce, or whether he thought it was in 

their province only to sort of go along and coast ’with the tide. I 

would like to have, although I think I know your answer, I would 

like to have for the record your opinion as to what these words imply.

Governor Hodges. Well, sir, I am the oldest man in the Cabinet, 

but I drive a Thunderbird car.

Senator Hartke. I think tha t takes care of that. [Laughter.]
24 NOMINATE LUTHE R H . HODGES TO BE SECRETARY OF COMMERCE

I think this spirit in and of itself will to me at least be a refreshing 

influence after what we have gone through.

I notice you made the statement tha t we are going through an 

adjustment. I hope tha t you won’t characterize this as a rolling 

readjustment?

Governor H odges. I don’t know what the economists think about 

all this. I just said we have an adjustment to make. I cannot tell 

you—I am not an economist—if the so-called recession is going down 

a little b it or up or what.

1 think we do have an adjustment to make, I think we have all got 

to put our shoulders to the wheel.

Senator Hartke. I again was delighted to hear you make the statement tha t you would not only extend your best efforts in regard to 

any distressed area bill which we anticipate will be passed, but tha t 

also you would extend your sympathy to these people who are so 

unfortunate. I think this is something tha t is frequently omitted in 

regard to people who are out of work, and tha t is they are human, 

and not mere statistics.

Governor Hodges. Right, sir.

Senator H artke. And the rather shocking story which was on the 

front page of the Washington Post—4 call your attention also to the 

shocking story which was given to us in the eastern part of Kentucky 

when Senator Cooper and I had the hearings there. The father of 

eight children, in order to accommodate his family committed suicide 

so they could draw his social security payments. Just this week the 

headlines in Chicago told of a man who killed himself and his wife 

and two children because his unemployment checks had expired, and, 

because of the fact tha t he could not obtain any help from the welfare 

department to help his diabetic condition, proceeded to take a rather 

hard way out.

This is being repeated more often, it requires not alone just a heart 

approach but a sympathetic one which I know you have.

I would hope also, Governor, tha t you would understand tha t 

Senator McGee and I come from west of the Appalachian Mountains. 

You have had all this talk of textiles, all the problems of the United 

States are not involved in this one particular industry.

Governor H odges. No.

Senator McGee. Will the Senator yield?

Senator Hartke. I will be glad to.

Senator McGee. I would think there was very little wrong with 

the textile industry tha t greater use of Wyoming wool would not 

correct.

Senator Scott. So long as it is not pulled over anybody’s eyes. 

[Laughter.j

Senator Hartke. I might comment upon that, Governor. I am 

certain we have had enough of tha t in the past few years and tha t 

the future does not look so much like it is going to be in that direction.

I am particularly interested in one thing and particularly this as 

regards to the international problem of the Soviets and their allies 

and the satellites in the field of dumping products upon the American 

market.

I am sure you are familiar with this.

Governor H odges. On the American market, elsewhere?
NOMINATE LUTHE R H . HODGES TO BE SECRETARY OF COMMERCE 25

Senator Hartke. Upon the world market, tha t is right, and the 

resulting depressing effect it has upon our own economy and the 

prices of our items. And this has occurred in aluminum, also in the 

field of bicycles.

I was wondering whether you felt tha t the bringing in of even small 

items such as the intention to bring in the Soviet-built automobile 

by a New York concern with the car priced at an amount substantially 

less than the going price in Russia, whether you would feel that it would 

be within your province to object to this type of interference in our 

society and our American way of life?

Governor H odges. I doubt if the Department of Commerce has 

tha t under its jurisdiction.

Senator Hartke. This is why I want to go back to those orders, 

because I feel tha t the order says it is not alone your duty to foster, 

promote, and develop this business, this commerce of America. I 

think this could probably be within the scope of the orders of the 

Department of Commerce, and I would hope tha t you would see 

fit to do this, at least to look into these items and make your recommendations to the President.

Governor Hodges. Yes, sir.

Senator Hartke. I also would like to have your opinion upon 

whether or not you feel the overall program of international trade 

fairs is one which should be either continued, expanded, or curtailed?

Governor H odges. I think it ought to be expanded, sir.

Senator Hartke. Expanded?

Governor Hodges. Expanded, particularly to South America.

Senator Hartke. Particularly in South America9

Governor Hodges. Yes.

The Chairman. Senator, along th at point you might ask the Governor, too, about our program of trade missions abroad.

Senator Hartke. Go right ahead, Mr. Chairman, I don’t want to 

take your question.

The Chairman. Go ahead.

Senator Hartke. Governor Hodges?

Governor Hodges. I had briefing on two of those missions yesterday 

morning.

Senator Hartke. I know you are familiar with this and I want to 

congratulate you with working with some of our leading industrialists 

in the United States for programs with relation particularly to South 

America; you were one of the spearheading individuals with those 

people, and I think this is commendable and recommend it very highly 

to the committee.

In another field, in the representation we have in foreign countries, 

it was formerly the policy of the U.S. Government to have, as members 

of the Commerce Department, attach es representing directly this 

Department.

This policy has been changed and the State Department now has 

as part of their obligation and as part of their group economic ministers.

I was wondering, if you are sufficiently familiar with this situation, 

as to whether you think the best interest of promoting our international 

business and commerce can be done with direct supervision from the 

Commerce Department, or with the intervening supervision from the 

State Department?
26 NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE

Governor H odges. We are getting, of course, into the question of 

interagency policy, I make this statement: I am acquainted with the 

history of it, I would have wished that it had not been transferred out 

of the Commerce Department.

Senator Hartke. I share your opinion, particularly when I had 

occasion to go into this field and particularly in the coal industry and 

in relation to the steel industry in Western Europe and their relationship to our own industry. I found that the economic ministers found 

themselves rathe r in a position of being thwarted in direct approaches 

upon this matter because of interference, more or less, of State Departm ent policy.

Governor H odges. Well, and protocol.

Senator Hartke. And protocol; yes. I think tha t is right.

In regard to the highway program, Governor, your State stands 

out as one of the real blue ribbon States in utilizing Federal funds and 

building Federal interstate highways, and I think you have utilized 

your funds to the utmost to give you some of the finest driving tha t 

the country has had.

I would hope that you would be able to inspire the rest of the 

States to follow your example.

Do you think you will be able to do that?

Governor Hodges. I am now representing the Nation instead of 

North Carolina.

Senator H artke. Again let me congratulate you. I am glad you 

are here, and I think the rest of the committee is, also.

The C hairman. The Senator from Wyoming, unless the Senator 

from North Carolina wants to ask the Governor of North Carolina a 

question.

Senator J ordan. I think he is being asked enough questions. I 

will skip.

The Chairman. The Senator from Wyoming?

Senator McGee. Mr. Chairman, Governor: I was long since taught 

at my mother’s knees th at the first shall be last.

I came to this meeting this morning at 10 minutes to 10, I think I 

was the first of the majority to arrive, the distinguished minority 

member of this committee was here in advance and therefore it is 

appropriate tha t I come a t the tag end of these very interesting deliberations and I am not going to burden the record with my own felicitations, you know of them. I have been in your corner since way 

back, but I am concerned about the overall a ttitu de tha t the Dep artment will take in regard to the question of trade.

It seems to me that our tendency has been to focus on the problem 

of textiles or to focus on the problem of wool or the import of cattle 

tha t is very vital in my area. Those of us that come from the West 

are as deeply moved as our colleagues from New England and the 

Southern States on this question of imports, but one of the blindspots 

in my judgment in the past has been our atte mpt to approach these 

as isolated and individual problems about which we would try to do 

something. It seems to me the exciting prospect ahead of us that 

our testimony here this morning has tended to point out is to arrive 

at a new formula or new guidelines that will recognize a basic fact 

tha t the pursuit of an economy here is in the national interest of this 

country, tha t it is up to the Nation rath er than tha t particular in-
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 27

(lustry or tha t particular State to absorb the consequences, whatever 

the policy may be, and tha t if we can arrive at an adjustment assistance program in all trade areas tha t are suffering from the impact of 

what we regard wise policies to be around the world, t hat we will be 

more realistic in trying to preserve what is basic to the national interest, trying to adjust what is fundamental to any industry th at may 

be going through the pains of transferral to other regions or to other 

related economic pursuits. I would only urge tha t this attempt to 

find a new formula rather than just a protective tariff which is a 

pretty rigid way of regulating it, and unsatisfactory in itself, or of 

incentives of one sort or another, as we call them in our part of the 

world, and tha t we arrive at an overall pattern tha t would take into 

account both the interest as well as the economic hardship attendant 

to that, and while you cannot develop this at the present time I want 

to add my voice to those urging tha t pursuit in tha t direction be a 

very vigorous pursuit. I know tha t what you have already exhibited 

suggests th at it will be an extremely youthful pursuit as well. 

Governor H odges. Thank you, Senator.

Senator McGee. I am a little concerned likewise about the inactivity of some of our business community overseas.

I am wondering if serious thought had been given or at least perhaps 

may be given, to a greater development of small business interests 

in some of these foreign governments.

Governor Hodges. You mean this country selling over there?

Senator McGee. Yes.

Governor Hodges. Yes; I think tha t tha t is very much needed.

Senator McGee. I think it works on two sides of the coin, small 

American business in this country having access to some markets 

over there and small American enterprise overseas putting some roots 

down there at the same time.

I know th at if one studies some of the business activities around the 

world he is struck with the number of highway construction corporations tha t are working or dam builders or oil explorations on very 

large scales and particularly in some of these emerging areas where 

cities are blossoming very rapidly as they are in parts of Africa and 

Asia from which I have just returned; it seems to me we have a wide 

opportunity and ready market for some small business American 

know-how in setting up services in those blossoming communities 

and I think tha t is an area tha t has been sadly neglected in our 

economic picture as far as our overseas activity is concerned.

I might leave this on a slightly more optimistic note than some tha t 

have been sounded here today, particularly in view of the exchange 

you had with my distinguished colleague from Oklahoma on the more 

aggressive sales of American automobiles overseas.

We noted with keen interest in the city of Lomay in Togo, a brand 

new country, tha t while our friends from the Soviet Union have a very 

large staff there, 56 people I think they told us, nearly every one of 

them is driving an American automobile.

The people in Togo are asking where are the Zin’s and the Ziv’s and 

the peoples’ cars, why are you driving American products? So we 

are making a little headway.

Thank you very much, Governor.
28 NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE

The Chairman. Governor, the Senate last year passed a resolution 

and I read it:

It is the sense of the Senate th at individuals appointed to adm inistrative and 

policymaking posts should be willing to serve for a period long enough to permit 

them to contribute effectively to their assigned ta sks, and th at it is the sense of the 

Senate t ha t nominees appearing before its committees shall indic ate their willingness to serve so long as the President desires.

This resolution was approved and passed by the Senate; would you 

care to comment on i t as far as your appointment is concerned?

Governor Hodges. I read the resolution, sir, and I associate 

myself with the spirit of tha t resolution.

I will serve as the President desires.

The Chairman. Now, Governor, do you have any conflict of interest in the post you are about to assume?

Governor Hodges. No, sir.

The Chairman. In your personal holdings?

Governor H odges. No, sir; I have divested myself of all industrial 

stocks.

The Chairman. I did not hear you.

Governor Hodges. I say, I have divested myself of industrial 

stocks, listed stocks. I have primarily bonds and mutual funds. 

Strictly family situations which I have.

The Chairman. As far as you know, if you are nominated for 

Secretary of Commerce you have no personal holdings that would be 

in conflict with your duties or interfere with your duties as Secretary 

of Commerce?

Governor H odges. Right, sir.

The Chairman. Now, would you be willing to file with the committee for the committee files a list of your personal holdings, what 

you have divested yourself, what you still hold?

Governor Hodges. Yes, sir.

The Chairman. All right.

Governor, we have had a study being made on foreign commerce. 

This committee was cognizant of th e matter of balance of payment 

deficits as you will recall, almost 18 months ago, and we have a staff 

which have been working on this particular m atter making suggestions 

which ends up, of course, affecting the balance of payment and the 

gold problem, the outflow of gold.

Tha t staff has now made a report to the committee which we will 

consider; they have made some 35 definite recommendations, some 

of them have been covered here today in the hearing.

We will submit tha t to you because any implementation of what 

recommendations we may agree upon which necessarily must concern 

the Department of Commerce and cooperation between the Congress 

and the Department of Commerce will be essential to implement 

these recommendations.

So, the committee will submit to you these recommendations and I 

would suggest tha t within a short period you send us your recommendations, pro or con, or your suggestions, or advice on what has 

been suggested in these recommendations.

The committee will probably proceed very quickly on one of them.

One of the great differences in our balance-of-pavment deficit is 

foreign travel. It amounts to, 1 think this year, a billion and a half 

on the minus side for the United States, and there are many things 

we can do about it.
NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE 29

You and I discussed those personally. The problem of encouraging 

foreign travel here, maybe the Department of Commerce setting up 

travel agencies in strategic points in the world, and many other things.

The Senate passed the bill last year unanimously, this committee 

recommended it unanimously and we are hopeful tha t your administration down there will give aid and support to this general proposal 

on foreign travel into the United States which will do a lot to alleviate 

this big balance of payment deficit.

There will also be before the committee recommendations tha t the 

commercial attaches are now in the State Department, either be 

transferred back to the Commerce Dep artment or a t least trained by 

the Commerce Department to be permanent people in a given embassy rath er than have them move around, to stimulate a lot of the 

things tha t have been talked about here today and we hope you will 

send us your recommendations on that.

There are many other recommendations which I won’t go into 

today tha t we hope you will take a good long look at.

Governor H odges. Yes, sir, I will.

The C hairman. Because if we have any fiscal problem or gold 

problem it is caused by the basic problems tha t the Commerce Departm ent and this committee and the House Committee, our counterpart, must meet, and I know that you are cognizant of those problems.

If there are no other questions, the Senator from California just 

came in.

Senator E ngle. Mr. Chairman, I have been in and out. I have 

had to take care of 500 constituents here in town.

The Chairman. I understand you are running an employment 

agency in your office.

Senator Monroney. If you have any extra tickets for the ball. 

[Laughter.]

Senator Engle. If I had any left I would be glad to make a distribution of them. But I have been running a reservation bureau, 

too.

I have no question to ask the Governor b ut I would like the record 

to show th at I think the appointment of Governor Hodges is a great 

appointment, I think he will be a great Secretary of Commerce. I 

am delighted to support his nomination and his confirmation and I 

wish him the utmost of good luck in the high office he is about to 

take over.

Governor Hodges. Thank you, Senator Engle.

Senator Bartlett. Mr. Chairman?

The Chairman. The Senator from Alaska.

Senator Bartlett. Just for a minute.

The Governor noted that he will be the oldest member of the 

Cabinet, and since several of us on the committee are in the same 

general age grouping I should want to say tha t in addition to all your 

other attainments, Governor, this action of President-elect Kennedy 

in naming you will bring greater stability and wisdom to his administration. It is another demonstration of his good judgment.

However, or but, there is always a however or b ut—I see one note 

here that may be a bit jarring to some. The biographical sketch submitted to the committee notes tha t you were graduated from the 

University of North Carolina, it also notes that you have a son.

Would you tell us where he is going to school now?
30 NOMINATE LUTHER H. HODGES TO BE SECRETARY OF COMMERCE

Governor Hodges. I hesitate to do it but he is at Harvard. 

[Laughter.]

The Chairman. The Senator from Kansas has a few questions.

Senator Schoeppel. Governor, 1 note with much interest and satisfaction your interest in continuing these international trade fairs. 

Some of us on this committee, as was pointed o ut by Senator McGee, 

come from the areas of great agricultural production and we had often 

stressed the pushing and the displaying in these fairs and the active 

encouragement of the utilization of many of our agricultural products 

in foreign countries, stressing the new packaging and the processing 

and all those things. Tha t is a very important matter for many of 

us who live in the areas where we are not blessed with the great textile 

industries and the manufacturing concerns such as other sections of 

the country.

I take it, obviously, tha t you are very much interested in that. 

You have a great coordinated activity down in your State as well 

as agricultural products.

Governor Hodges. Very much, sir.

Senator Schoeppel. You are aware of the problem, I am sure, and 

you would press for a solution to the utmost consistent with your 

overall program, would you not?

Governor H odges. I would, indeed, sir, and to make it very brief,, 

a specific illustration: I know of one State tha t by proper packaging 

and preparing was able to send to one big city in a country of Europe 

five or six million dollars worth of frozen poultry. Tha t is only an 

illustration of the unlimited possibilities in the countries of the world 

who have not yet gotten into our so-called chainstore and the big 

supermarkets and the way we package things. We have great 

opportunity and I think your agricultural products, your dairy 

products, cattle, et cetera, have immense possibilities all over the 

world.

Senator Schoeppel. One final question: I note in the Democratic 

platform tha t there have been pledges made to expand the airport 

programs, to improve the rivers and harbors by new star ts and 

adequate maintenance, and to support the highway program embodied 

in the acts of 1956 and 1958, without stretchouts or slowdowns, and to 

assist the railroads to meet their capital needs, particularly for urban 

mass transportation.

But singularly it has been pointed out to me th at there has been no 

pledge of help to another great segment of transportation—the truckers. 

Do you have any idea now as to granting any priorities or would you 

consider them along with the other modes and means of transportation?

Governor H odges. I think, Senator, we have to look at all of them. 

I think tha t as these various segments of our transportation industry 

grow just as any other industry, they get old and they sometimes get 

inefficient or the competition gets tough and I think you have to 

stay up-to-date and take a look a t them regularly.

Senator Schoeppel. Finally, Governor, I am delighted, of course, 

tha t you are going to be a part of this administration. It will be 

the policy, of course, of the members of this committee, and I assure 

you for one that I will cooperate with you to the fullest possible extent, in the expanding of foreign trade while eliminating some of the 

discordant notes we hear in tha t some little people are being pressed 

or pushed out of business by foreign imports.
NOMINATE LUT HER H. HODGES TO BE SECRETARY OF COMMERCE 31

I wish for you, sir, a most successful tenure and I shall vote as I 

know practically all the members of this committee will, for your 

confirmation.

Governor H odges. Thank you.

The Chairman. Any further questions?

Senator Monroney. No questions.

The Chairman. Governor, we usually go into executive session but 

as long as everybody has expressed his opinion, the Chair will ask 

the clerk to call the roll on the forthcoming nomination of Gov. Luther 

Hodges for Secretary of Commerce.

(The clerk called the roll and all Senators voted “aye.”)

The Chairman. Governor, you are approved and we wish you good 

luck. You will have a lot of dealings with this committee. We hope 

to be cooperative. We have many, many problems in the field of 

transportation, foreign commerce, and many of the other things in 

this country and the committee wishes you well.

Governor H odges. Thank you, Mr. Chairman.

The Chairman. Thank you for coming.

The committee is adjourned.

(Thereupon, at 12 p.m., the committee was adjourned.)

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