knows a lot of answers to the questions taking place back before my employment with the company.

Senator SMITH. In other words, the only director that had any business dealings with the company that could benefit his business was Mr. Heller. There have been no others?

Mr. FRYE. I would say so, and I would like to say this for what it is worth: I am very sincere in this. I am sure Mr. Heller had little interest in serving on the board. He went on originally at my request. He recognized, as other directors do, that there is little to gain and much to lose by going on this board. We have asked other people to serve on it whose attorneys advised them against it. They say, "You can get in all kinds of difficulties, stockholders' suits, and one thing or another. Why should you go on except to perform a public service?"

Senator HENNINGS. Why did Mr. Heller go on?

Mr. FRYE. I think he went on largely because I asked him to. I thought I needed his kind of brains, ability and experience as a director and we were good friends.

Senator BUTLER, Mr. Frye, to your knowledge have any of your directors received any fees or compensation from other vested companies?

Mr. FRYE. Not so far as I know, except one of our directors also served as a director of E. Leitz & Co. Now, I guess he received the normal director's fees there. I don't know.

Senator BUTLER. Any other compensation from that company or any other vested company?

Mr. FRYE. Not so far as I know.

Senator BUTLER. What director is that?

Mr. FRYE. Mr. Paull, Harold Paull.

Senator BUTLER. What is his business?

Mr. FRYE. He is an officer of a building and loan company in Providence, R. I., but I think his main business is that of an investor. He seems to spend most of his time buying and selling stocks.

Senator BUTLER. How long has he been on your board?

Mr. FRYE. Since 1949. I am sorry. I am about to overlook Colonel Johnson, who was on the board for a considerable period of time, who handled our legal business and since then Mr. Lincoln, representing Steptoe & Johnson. That was unintentional for me not to mention that.

Senator BUTLER. He was also on your board and represented other vested companies?

Mr. FRYE. No, sir, not so far as I know.

Senator BUTLER. In what connection do you mention his name?
Mr. FRYE. Because he performed services for the company.
Senator BUTLER. That goes to Senator Smith's question?
Mr. FRYE. Yes, sir.

Senator BUTLER. Do you know how much Mr. Paull was paid?
Mr. FRYE. Sir?

Senator BUTLER. Do you know how much Mr. Paull was paid by E. Leitz?

Mr. FRYE. No, sir. So far as I know, he was-I assume he was paid for attending directors meetings and was given directors fees. I don't know, because I never had anything to do with E. Leitz. I

don't know whether he performed any services or received fees or not.

Senator MCCARRAN. Have you a breakdown showing the income of the company, the net and gross income of each company before it was vested and after it was vested?

Mr. FRYE. Yes, sir.

Senator DIRKSEN. Do you want that for the record?

Senator MCCARRAN. If it is handy, it is all right.

Mr. FRYE. I think we have it here handy.

Senator MCCARRAN. They were two companies before they were vested?

Mr. FRYE. Yes, they were two companies, the same as now. This is for General Aniline & Film. In 1939 its sales were $28,398,000. In 1940 they were $31,281,000. In 1941, $46,135,000. Now their profits, after taxes, of course taxes were very low, relatively low in those years were $3.5 million in 1939, $3,678,000 in 1940 and $3,432,000 in 1941.

Senator MCCARRAN. Now, how do those figures run as compared with your period with the company?

Mr. FRYE. Since I have been with the company, the year before I came, in 1946 the sales were $64,189,000. The profit was $3,189,000. Now, I was in charge of the company for only the last 5 months of 1947. In 1947, the sales were $75 million. The profits were $3,333,000. In 1948, sales were $90,837,000. Profits after taxes $8,605,000.

Now, if you would like me to comment on that for a moment—
Senator MCCARRAN. I have another question.

How much taxes did you pay or the company pay while you were in charge?

Mr. FRYE. The taxes that have been paid, in 1947, were $2,338,000, and in 1948 were $4,847,000, in 1949 were $2,069,000; in 1950, $6,772,000; in 1951, $7,559,000, and 1952, $1,760,000.

I have the General Dyestuff's figures, if you would like to hear them.

Senator DIRKSON. You can submit them.

Mr. FRYE. All right.

Senator DIRKSON. Suppose you submit them in tabular form.

(The material referred to follows:)

GENERAL DYESTUFF CORP.

Sales and profits

[Amounts shown in thousands of dollars]

1939.

1940.

1941.

1942.

1943.

1944.

1945.

1946.

1947

1948.

1949.

19501951.

1952

1942. 1943.

1944.

1945.

1946.

1947.

1948.

1949.

1950.

1951.

1952.

Total.

Contributions to the support of Government since vesting

[Amount shown in thousands of dollars]

Grand total, $8,913,000.

Dividends paid by General Dyestuff Corp. to U. S. Government since July 13, 1942, date of vesting, equal $1,041,360.

MEMORANDUM OF GAF-GDC FOREIGN PROJECTS CURRENTLY UNDER
NEGOTIATION OR CONSIDERATION

1. An agreement with Badische of Germany whereby GAF will be designated by the German firm as its exclusive licensee in the United States for the manufacture of a metallic powder used in the fabrication of an entirely new type of electric battery recently approved by the United States Navy for

aircraft use.

2. An agreement with Badische under which GAF and Badische will exchange know-how on high pressure acetylene derivatives. It is believed that this agreement will improve GAF's processes and result in a broadening of its line of these derivatives.

3. An agreement with Bayer, Badische and Hoechst in Germany designating GDC as United States distributor (on a nonexclusive basis) of dyestuffs and

31

intermediates made by them. This is necessary to prevent being blocked out of these sources by Verona Chemical Co. or others.

4. Agreements with European textile machinery firms to manufacture Williams continuous dyeing machines under a license from GDC.

5. Acquisition of a plant in France to produce Ansco film for sale in soft currency areas.

6. Agreement with a European firm to manufacture Ozalid machines in Europe.

7. Agreement with British Ozalid, Ltd., covering exchange of techniques, know-how and new developments.

8. Agreement with Brazilian distributor to cut and package Ansco film in Brazil, as well as to manufacture box cameras in that country. Negotiations may also lead to the assembly, and eventually to the manufacture, of Ozalid machines in Brazil.

9. A project which relates to the manufacture of gelatin of photographic quality in Argentina.

Mr. FRYE. To be sure that I did not overlook something in answering Senator Smith's question about directors performing services

Senator SMITH. We have heard a lot of talk about these things. We might as well get to what the facts are. Probably it is not nearly as bad as some of the rumors have been.

What directors have received, either by way of business associations or by way of payment of professional fees, compensation from the General Aniline or General Dyestuffs? They are the only two you can testify about, as I understand.

Mr. FRYE. Yes. If I may, I would like to add a couple of things to what I said before, which I overlooked, because I was not thinking in this direction. One of our directors is Dr. Rhodes, head of the Chemical and Engineering School, Cornell University. He was on the board for some years before I came with the company, but he has from time to time performed consulting services. Now, he is a very fine, able man and has insisted on not taking more than $50 a day for his services. There is very little money involved in his case.

Dr. Wagner, who is a director and who was working for the company full time as senior vice president for some time but has since gone on a consulting basis, draws a consulting fee. He is a chemist and presently head of one of the chemical associations, Synthetic Organic Chemical Manufacturers Association.

Senator HENNINGS. You mentioned Mr. Lincoln, Mr. Frye.

Mr. FRYE. Yes, sir.

Senator HENNINGS. He is a partner in the law firm of Steptoe & Johnson, I believe.

Mr. FRYE. Yes, sir.

Senator HENNINGS. I believe Mr. Lincoln is at the hearing today, is he not?

Mr. FRYE. Yes, sir.

Senator HENNINGS. Now, as a director and as a member of that firm, are you able to tell us the total amount that the firm, of which Mr. Lincoln is a partner, received from the companies or the affiliated companies during the period he was director?

Mr. FRYE. Yes, sir.

Senator HENNINGS. He still is a director, is he not?

Mr. FRYE. Yes, sir. I have the fees and expenses paid by both General Aniline & Film and General Dyestuff Corp. to Steptoe & Johnson from 1947 through 1952. This firm was retained by the boards of General Aniline & Film Corp. and General Dyestuff Corp.

in January of 1947 at retainers of $36,000 a year for the General Aniline & Film Corp. and $18,000 a year for General Dyestuff. Here are the totals paid each year in fees and expenses.

Mr. NAIRN. May I interrupt, Mr. Chairman, to develop this logically?

Senator HENNINGS. I would be very glad to have counsel proceed if he has a method that might save time, Mr. Nairn.

Mr. NAIN. At the time Steptoe & Johnson were originally retained by General Dyestuff Corp., I believe that Mr. Johnson was president of one of the corporations, is that not right?

Mr. FRYE. President of General Dyestuff Corp.; yes, sir.

Mr. NAIRN. I asked you to bring to the hearing the minutes of General Dyestuff Corp. in which Mr. Johnson's firm was selected as counsel for the General Dyestuff Corp. I think the committee might be interested in hearing the minutes of that particular meeting and from that meeting has emanated the association of Steptoe & Johnson with both General Dyestuff Corp. and General Aniline & Film. Prior to the time Colonel Johnson resigned as president, they did not represent these corporations.

Senator HENNINGS. Mr. Chairman, before we get into that, is Mr. Frye able to tell us how much in fees or compensation the firm of Steptoe & Johnson has received since 1947?

Mr. FRYE. From both companies?

Senator HENNINGS. Yes, sir.

Mr. FRYE. Yes, sir. Here is $62,610 in 1947, $99,287 in 1948, $100,909 in 1949, $92,570 in 1950, $103,863 in 1951, $104,821 in 1952. Senator HENNINGS. Now, Colonel Johnson was on the board of directors when they voted to retain his firm, was he not?

Mr. FRYE. I was not with the companies at that time, but I assume→ yes, he was.

Senator HENNINGS. You are aware of that fact, are you

Mr. FRYE. Yes.

Senator HENNINGS. What is the total?

Mr. FRYE. The total amount?

Senator HENNINGS. Yes.

Senator SMITH. That is in that report.

Mr. FRYE. I will get it here in just a minute, sir.

not?

I have a slide here on our total legal fees and expenses for the 3 years prior to vesting and the last 3 years. Would you be interested in seeing that for just a moment?

Senator DIRKSEN. I believe so.

Mr. FRYE. There are the fees for legal counsel for 1939, 1940, and 1941. This is General Aniline & Film only, and for 1950, 1951, and 1952. That includes for these last 3 years, of course, Steptoe & Johnson's fees, but also other legal fees.

Senator DIRKSEN. Do you know offhand who counsel was in 1939, 1940, and 1941?

Mr. FRYE. Breed, Abbott & Morgan, sir.

Senator SMITH. In 1941, Mr. Frye, the large fee for 1941 was occasioned, was it not, by some of this argument whether or not the company should be vested?

Mr. FRYE. Yes, sir.

Senator SMITH. So that in 1941 that was after we had gotten into the war?