leaks, followed by testimony, which is a kind of a game which can go on ad nauseam. I hope that this has stopped on the Senate side, and that that game will not be played in connection with the hearings before the House Judiciary Committee.

I make the statement now so that if it does happen, I hope over there You will make reference to the expression that I have made here, that that is hardly a responsible way for the U.S. Congress to act in the implementation of the 25th amendment which was passed by both Houses, and which was ratified by three-fourths of the States. We were told by its sponsors, and nearly every other person who got up to make a speech practically that it would work expeditiously, that it was an excellent amendment, that the purpose was to fill the vacancy as cuielle as possible.

And I sincerely hope that the Senate can act promptly. We have always expressed that desire here. We have the opportunity following these hearings.

I do hope that the House Judiciary Committee, as Mr. Rodino has already suggested, can dispose of the matter before Christmas. Therefore, I think I have nothing further to say at this time.

I have been speaking very briefly as evidence of my own belief, that nothing has been said here which would warrant any adverse judgment against you. The examinations have been intense, as they should be, there has been close questioning, they have raised questions of whether or not you would have done things today in the light of what has happened.

They say that experience is the sum of things we did wrong. Other than that, it seems to me that we have done our duty in being extremely careful to bring out all the facts. I thank the Chairman for his unfailing courtesy and fairness throughout.

The CHAIRMAN. Thank you, Senator Scott.

Governor. in your letter to me, dated October 11, 1974, in which you describe some of the circumstances surrounding many gifts and loans made by you, you stated in reference to the loan that you gave to Mr. Morhouse and he has been brought up several times in the last few minutes "in 1960, at Mr. Morhouse's request. I loaned him $100,000 to make an investment. The loan was secured by stock. Mr. Morhouse had very pressing family obligations to meet at that time."

That sounds very straight forward. But I want to explore that just a little further.

First, I would like to ask you if you know who owned the real estate involved in the transaction prior to its sale to Mr. Morhouse.

Mr. ROCKEFELLER. No: I do not, sir.

The CHAIRMAN. Well, let me go into that a little further, then. The real estate was owned by a corporation called Sayah. Inc. I would like to ask if you did not own most of the stock in that corporation that owned the building, and that the $100,000 went to purchase that stock by Mr Morhouse?

Mr. ROCKEFELLER. Not to my knowledge. My vague recollection is that Bill Zekendorf had something to do with finding the investment in which Mr. Goldberg-excuse me

The CHAIRMAN. I think you had better check that overnight.
Mr. ROCKEFELLER. I will check it.

The CHAIRMAN. Because my information would indicate that the loan made to Mr. Morhouse was for the purchase of the shares of stock in this Sayah Corp., and that the stock was used as security for the promissory note given to you covering the loan.

Mr. ROCKEFELLER. I think the stock was used as security. I think that is correct.

The CHAIRMAN. Now, that property, then, which the Sayan Corp. owned, was commercial property worth about $259,000 with a monthly income of about $2,700, the rental income. I am just wondering whether this was an indirect move on your part to help make Mr. Morhouse some money by permitting him to buy the stock in the corporation and therefore acquire a substantial capital investment. Mr. ROCKEFELLER. That was the purpose of the loan. It was to get him some money legitimately, some revenue.

The CHAIRMAN. Do you know whether or not the real estate owned by that corporation was a commercial garage owned by you or your company and leased to the telephone company?

Mr. ROCKEFELLER. Not to my knowledge. But I will find out and get you that information first thing in the morning.

The CHAIRMAN. All right.

You stated earlier that you requested your brother Laurance to help Morhouse to make some money, and as a result of that request, Laurance Rockefeller sold 4,000 shares of Geophysics Corp., and 2,500 shares of Marks Oxygen Co. for $49,000, and took his promisory note in payment. And thereafter, Mr. Morhouse sold the 2,500 shares of stock in Marks Oxygen back to Laurance Rockefeller and his associates for $79,375.

Is that correct?

Mr. ROCKEFELLER. That is correct, sir.

The CHAIRMAN. That cancelled the note to Laurance Rockefeller, leaving Mr. Morhouse with a net profit of $29,823.25, and 4,000 shares of American Geophysics worth at that time $240,000 free and clear without Mr. Morhouse having to put up a dime.

Mr. ROCKEFELLER. That is-well, if you don't call borrowing money putting up anything. He borrowed the money and invested it. These were two venture capital companies which my brother-in which my brother participated in financing, and which were sold over the counter. So there was a price, a value that was established by over-the-counter sales.

The CHAIRMAN. Well, would you agree that that was quite a lavish sweetheart deal?

Mr. ROCKEFELLER. Well, I would say it was generous. I don't know whether "sweetheart" comes in. But it was a generous deal. But the purpose, Senator, was to help this man so that he would not be dependent on exactly the kind of situation that he got into, which was a tragedy.

Now, sure, he had expenses. He had a family. He had a mother-inlaw and a mother staying with him, plus his wife and all his children. And he was suffering from some pretty serious medical problems. But I thought that these two loans would help him get on his feet so he would be independent of temptation, if I can put it very bluntly. The CHAIRMAN. Would you agree that such generous financial assistance to Mr. Morhouse would so obligate him that he could not act

40-185 O-74-38

independently on any matter in which your views or your aspirations or opinions were under consideration? In other words, instead of him being his own man, he would be Mr. Rockefeller's man.

Mr. ROCKEFELLER. Well, I suppose that you could say that if I used loans for the purpose of going to a guy and saying, "All right, now look, you so and so, I have loaned you this money. I want you to do what I tell you." But my relation with people is not on that basis, frankly. I respect individuals and try to help them where I think I should or I want to. But I don't try and cash in on that help. And I have got to say to you historically you lose more friends by loaning them money than you make. I think the extraordinary thing is that I kept my friends after loaning them money because this really is a situation which often is the source of destroying friendship.

But in Jud Morhouse's case, I think perhaps I should say in addition that the Governor of the State of New York, by tradition, is the leader of the party, and he picks the State chairman. Now, he is elected by the State committee, but let us face it, the tradition has been the Governor picks him. So he was just as Bill Ronan was, he was responsible to me. That is why I felt doubly bad when this situation came up of his involvement in a bribe.

The CHAIRMAN. Before closing today, may I take the liberty of a comment touching on our hearings, concerning the manner in which they have progressed. There have been some implications here today that we may not have proceeded with due diligence in our committee's investigatory and hearing procedures. It was my purpose to touch on this subject in my opening statement this morning relative to the great obligation I believe that our committee has in its constitutional responsibilities relative to the seating of a Vice President. Therefore, I would like to read into our hearing record at this time the response that I made to the President's letter which I placed in the record this morning. That was the letter urging our committee to expedite the confirmation hearing procedures. I quote:

DEAR MR. PRESIDENT: This will respond to your letter of November 11 wherein you respectfully urge that this Committee and the Congress expedite the confirmation proceedings incident to the Vice Presidential nomination of Nelson A. Rockefeller, to ensure a final determination during the 93rd Congress.

Let me assure you most respectfully that it is my purpose, as I will say in my opening statement at Governor Rockefeller's hearings later this morning, that "this nomination should have the highest congressional priority." Likewise, "we know you will agree that full and appropriate consideration must be accorded to this procedure, as your letter sets out."

I feel most sincerely that our Committee on Rules and Administration is meeting that test. Twenty-three business days after this nomination was received in the Senate from you, our committee began its hearings, although the final reports of the Federal Bureau of Investigation were not received by me until November 4.

Additionally, our Committee's request for a complete accounting of Governor Rockefeller's campaign contributions was not met until last Monday evening, November 11, at 9 p.m., when this information was received. Likewise, the voluminous report of the Joint Committee on Internal Revenue Taxation on the nominee's tax returns was not completed until October 23.

Therefore, I felt it desirable to recite briefly the above facts incident to our committee's work. As I will reiterate at our hearings this morning, “Our country deserves at the earliest possible time a sitting Vice President."

I am hopeful that goal can be accomplished as expeditiously as our constitutional responsibilities will permit. You will have my wholehearted cooperation.

Respectfully yours,

HOWARD W. CANNON,

Chairman.

With that, the hearings will stand in recess

Senator HUGH SCOTT. Mr. Chairman, would you mind announcing the witnesses tomorrow for the benefit of the press?

The CHAIRMAN. We will conclude first with Governor Rockefeller. He will be followed by the Honorable Arthur Goldberg, John A. Wells, Esq., Robert D. Orr, Esq., Donal C. O'Brien, Jr., Esq., John E. Lockwood, Esq., Laurance Rockefeller, Joseph H. Jacovini, Esq., Mr. J. Richardson Dilworth, Mr. Neil McCaffrey, and Mr. Victor Lasky. We will stand in recess until 10 o'clock tomorrow morning. [Whereupon, at 5:05 p.m., the hearing was recessed to reconvene at 10 a.m., Thursday, November 14, 1974.]