DEAR SENATOR MCCARTHY:

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000400040038-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 15, 2016
• Document Release Date: March 12, 2004
• Sequence Number: 38
• Publication Date: January 11, 1962
• Content Type: LETTER

? DRAFT TAM/mfb
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Dear Senator McCarthy:
During our very pleasant visit on Tuesday, the 9th, you
raised the question of an incident that arose in 1956 with certain scientists
at the California Institute of Technology. I briefly explained my
position and so that you may be fully informed, yesterday I arranged
for the delivery to you of a copy of the proceedings before the Joint
Committee on Atomic Energy held in connection with my confirmation
hearings in July 1958.
I can acid nothing to my statements made at that time,
although I would be happy to again review this matter with you or
any one else who so desires.
With respect to the second question you asked, that of a
contract between the United States Air Force and the Kaiser-Frazer
Company which was consummated when I was Under Secretary of the
Air Force, 1950 and :1951, I am attaching a copy of public hearings
before the Preparedness Subcommittee #1 of the Committee on Armed
Services, United States Senate. These hearings were held for several
days starting June 2nd, 1953 as a result of a persq'kial request by me
to the late Senator Styles Bridges.
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Here again there is little, if anything, I can add to my
sworn testimony. Quite naturally I would be glad to discuss this
subject with you or others should you desire.
'kith reference to this mornings.' article by Mr. Drew
Pearson in which he alleges that my shipbuilding operations were
t
inordinately profitb].e, this matter too was reviewed by a Committee
of the Congress in 1946. Therefore I am attaching a transcript of the
public hearing of the House Merchant Marine and Fisheries Committee
held for the purpose of investigating Maritime Commissions' merchant
shipbuilding program. I have marked the section relating to my personal
testimony. Although the subject is very old inasmuch as ship-building
operations under my direction were discontinued in 1945 and records
are not available to me, my testimony given under oath was complete
and to my knowledge aae.
, Our shipbu ding operations were adequatery financed through
subscribed stock, subordinated stock holders' loans, and bank loans for
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which the stockholders were responsible. The earned fees were
substantial because of the vast volume, howevet, non-reimbursable
expenses, negotiation and corporate incd a taxes reduced
the profit to a very modest figure when one conside rs`>the scope of the
operation. As the testimony indicates the entire undertaking was
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handled iri'~,,exact accordance with United States exit Commission
policy and ckntractual procedures.
retrospect I feel the building of this vast yard (the
second largest i the United States), the assembly and training of an
organization in cxc ss of 40, 000 men. and women and the production
of some 475 ships of ~rious types in record time was really one of
A4 tt.. #'
e satisfying ac+ ralisrnents of my life., Dyad weight tonnage
produced .ten- th t yar
American flag tonnage in act- operation today.
With respect to th. Kaiser contract for tt-ansportation
of bauxite for the Kaiser Aluminui . Company referred to in the
Ato 3c..Ene.rgy Cb i assion confirm tion hearings and also in
Mr. Drew Pearson's article, the circumstances were this: Some six
years after I left the Air Force, Kaiser uminum called upon the
shipping industry to submit competitive bid for this engagement. My
Aluminum were most meticulous in determining that this dertaking
they held none in any Company of mine. The executive of Kaiser
interests with Kaiser, I held no stock in any Compapof theirs, and
most attractive to the Aluminum Company. I had no joint
proposals, and the proposal submitted by my, C any proved to be
Company and a number of other major shippir' interests submitted
was made with the shipping company which;.' could best serve
-3-
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interests of their stockholders and that no conflict of interest
was involved, and the same considerations were foremost in
my mind.
Most sincerely,
John A. McCune
Director
Most Sincerely,
John A. McCone
Most Sincerely,
John A. McCone
Director
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FORM NO. 237 Use previous editions
2-61