They also were approved by the U.S. Department of Transportation, which made substantial grants to effectuate them.

As chairman of the Port of New York Authority or just a member of that body, which has been most of the time, there neither has been nor could there be as I see it any special favor, secret or otherwise, done to Rockefellers. All the major projects which the port authority has constructed or is actually constructing, were atuhorized before my time on the port authority board and long before my present chairmanship.

There is nothing in my relationship with Nelson Rockefeller for which I need apologize. On the contrary, his friendship and association are relationships which I cherish and of which I shall always be proud. In my public life, I have always sought to promote the interests of the people of New York. If the policies I have pursued have in any way enhanced the interests of the Rockefeller family, that would be incidental and only because the interests of this family are so intimately identified with the interests of the community itself.

The Triborough Bridge and Tunnel Authority: There has been so much falsehood, misleading information, and innuendo regarding the Triborough Bridge and Tunnel Authority bond suit stipulation and settlement that I wish to speak of it. There was nothing secret or sinister about the matter. It was extensively covered in the media at the time.

Simply put, when the New York State Government created the Metropolitan Transportation Authority, the Triborough Bridge and Tunnel Authority was included within the complex. The creation of the MTA resolved a very difficult problem, the problem of how to bring together the mass transit operations in the area, along with the Triborough Bridge and Tunnel Authority.

The thought that Triborough surplus revenues might be used to help mass transit was not a new one, but no one had found the answer, how to bring them together legally and to meet the tests of not only the law but of the bond covenants outstanding.

The board of the MTA was made the board of Triborough, the board of the New York City Transit Authority and other transit entities, and the chairman-chief executive officer of MTA was made the chairman and chief executive officer of each unit as well.

Of the units brought thus together under the general policy direction and control of the MTA board, as I indicated before, the only nonloser was Triborough Bridge and Tunnel Authority.

It earned a surplus. At the time I estimate the surplus was around $25 million.

The MTA statute provided that surplus Triborough funds under certain circumstances could be transferred from the surplus account of Triborough to the New York City Transit Authority to help meet the subway operating costs, to help meet the deficits and to keep the fare down.

The law would take effect March 1, 1968.

In advance of that date, the Chase Manhattan Bank, the corporate trustee for the Triborough bondholders, brought suit to prevent any such transfer of funds to the subways.

The trustee claimed that this purpose was not permitted by the bond indenture.

The suit also challenged the basic concept of the MTA statute, which was a matter of concern to us, claiming that in the statute there was a basic incompatibility of interest between the same board serving as head of the subway system and the Long Island Railroad, et cetera, and serving as board of Triborough.

We, of course, took a very different view. Our concern was to move ahead with the consolidation and to be able to get the Triborough moneys for the statutory purpose.

As chairman of the MTA board and chief executive officer, I was intimately involved in the negotiations that led to the solution to the problem.

And there were no mysterious meetings. The negotiations took place in downtown law offices and midtown Manhattan, and we finally arrived at a solution, which took the form of offering the bondholders of Triborough one-quarter of 1 percent more interest on their bonds if they would accept an amendment to the bond covenant allowing in essence transfer of the surplus funds to the subways.

In other words, the bond covenant would be amended to allow the fund to be used for lawful purpose.

It took consent of the holders of two-thirds in principal amount of Triborough bondholders to accomplish this under the bond covenant, and we engaged in an effort to get that two-thirds consent.

The stipulation which we entered into, the several parties, it was not only MTA, but the State of New York represented by its attorney general, the city of New York represented by its corporate counsel, Lee Rankin, the trustee for the bondholders, which was Chase, and represented by Dewey, Ballentine firm at the time.

This stipulation provided that the trustee would not challenge the statutory provision of MTA board, serving as board members of other entities, like Triborough, Transit, and the like.

And Triborough, or we as MTA board acting as Triborough, we agreed not to transfer any surplus funds from Triborough unless we achieved the approval of two-thirds in principal amount of the bonds outstanding.

This was a prodigious effort, but it was accomplished.

The trustee was satisfied. The bondholders were satisfied and they had another quarter percent, and as a result, as much now as $75 million a year has been paid over in Triborough surpluses to help keep subway and commuter fares down. It is $75 million as against $25 million, because my colleagues and I on the MTA board raised the tolls on the bridges and tunnels of the Triborough facility from 25 cents on most of them to 50 cents.

We basically doubled the tolls. We did not enhance our popularity in the New York metropolitan region for a few weeks by this effort, but we did produce $75 million against $25 million for the purpose indicated.

So the subway fares have been kept down, and $75 million, Mr. Chairman, is more than a nickel on the subway fare. A nickel on the subway fare is approximately $55 million.

So it is a substantial amount.

Of that about $50 million goes to subways and $25 million to various commuter railroads.

In my judgment, this was a major accomplishment and at the time was so heralded. It was widely reported in the press. There were no secret stipulations, no sealed documents.

My role was significant and I take pride along with the others who worked on the arrangement in the achievement because I think the people of the city have benefited and the bondholders have not been at all put in any jeopardy, but on the contrary, have gotten an additional quarter percent.

Mr. Chairman, I conclude by expressing the profound hope that this committee and the Congress will approve the nomination of Nelson Rockefeller to be Vice President of the United States.

He is, in my opinion, one of the ablest and most dedicated public servants in this Nation, a man thoroughly qualified by talent, experience, and character for that high office.

I

say this as a person being very close to him, and purely conscious of the fact that being close to greatness sometimes leads to not paying adequate attention to it.

Sometimes people closest to the most able people are the most critical of those people.

It would indeed cause me the deepest sorrow, not to say agony, if his generosity toward me, which has been motivated solely by friendship and his lifelong practice of sharing, if his generosity should in any way make the Congress hesitant to confirm him. His motives in assisting me and others were innocent of any ulterior design.

They proceeded solely out of his concern for the welfare of his friends who were less fortunate than he.

Neither the administration of government in the State of New York nor the citizens of that State suffered because of the loans and gifts that he made.

Far worse than any private remorse I would feel, however, should he not be approved and confirmed, would be the loss to the country. In the light of the history of the past few years, it would be a bitter irony if this man, who has given so much of his life and resources to his fellow citizens, and whose record is one of achievement, one of integrity, and one of candor, should be denied confirmation because he shared part of his wealth with those he loved and trusted.

I must believe, Mr. Chairman, that the Congress will not become so distracted in these matters that it will lose sight of the great contributions that Nelson Rockefeller has made to the public at large and that he can make as Vice President.

It is well that the issue has been aired. It is fitting that the Governor and those of us who have accepted his generosity, should acknowledge that others might see the matter differently than we saw it, and we knew it to be.

But I hope that the Congress, having aired the issue, Mr. Chairman, and the Governor having responded openly and honestly to it, that the process of confirmation can be soon and favorably concluded. I would be pleased to answer any questions.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Dr. Ronan. You have addressed yourself properly to three areas of concern by this committee. I do have a few questions. If you will refer to your loan chart, as you gave it, you refer to a total of $550,000

Mr. RONAN. $510,000.

The CHAIRMAN. I see on that chart only $510,000.

Mr. RONAN. $510,000.

The CHAIRMAN. The correct amount, then, is $510,000?

Mr. RONAN. $510,000. Thank you.

The CHAIRMAN. And there is some discrepancy, although not too great, between the list furnished us by Governor Rockefeller and that of yourself.

Your list first shows a loan of $50,000 on May 4, 1962, and $100,000 on January 8, 1963, $50,000 on May 1, 1965.

Governor Rockefeller's list shows two $50,000 items on May 1, 1965. Then, on October 16, 1969, a loan of $150,000, and you show October 10, 1969, with the amount being the same.

What are the reasons for those discrepancies?

Mr. RONAN. Mr. Chairman, with respect to the first, I have listed the notes at the time I left State service, and the Governor forgave those loans. The 1962 was the original note, and the note was reissued. It was initially a note with interest at 4 percent and was reissued as a non-interest-bearing loan in 1965.

The October date, I believe, is a typo in one place or the other. There is no significant difference there.

The CHAIRMAN. So, the two $50,000 items in May 1965 then represented one loan of May 1, 1965, and the reissuance of the May 4, 1962, loan?

Mr. RONAN. That is correct, sir.

The CHAIRMAN. I think you related to this question, but let me ask you specifically if any of these loans or all of them were interestbearing and what the amounts were?

Mr. RONAN. The first loan, Mr. Chairman, was interest-bearing, I believe, at 4 percent. The others were non-interest-bearing, and the 4-percent loan was reissued as a non-interest-bearing loan after the some 3 years. It was initially put out in 1962 and 1965 was non-interestbearing, considered refunded.

The CHAIRMAN. I take it all these loans were in cash? They were not in the forms of securities or things of that sort?

Mr. RONAN. That is right. None of these were in securities. They were all cash loans and secured by promissory note.

The CHAIRMAN. Were any of them collaterialized?

Mr. RONAN. No, sir.

The only instrument was a promissory note. There was no collateral. The CHAIRMAN. You did define for us your periods of public office so that it would appear that the loans were made while

ing some sort of public office?

Mr. RONAN. That is correct, sir.

you were hold

The earlier loans were made when I was secretary to the Governor, and the later while I was Chairman of the Metropolitan Commuter Transportation Authority or the MTA.

The CHAIRMAN. Did you have any indication from Governor Rockefeller that the loans might be canceled prior to the time that they were

canceled?

Mr. RONAN. No, I did not, sir.

The CHAIRMAN. Did you consider any of these loans or gifts to be in the nature of compensation or reward for carrying out your duties of public office?

40-185 O 74-60

Mr. RONAN. No, I did not.

I thought I was being adequately compensated, frankly, sir, for the task that I was performing as Secretary to the Governor and in the positions that I occupied thereafter.

The CHAIRMAN. Did you yourself feel that there might be any possibility of a conflict-of-interest situation as a result of your acceptance of any of these gifts or loans?

Mr. RONAN. Not at all, sir.

The CHAIRMAN. Prior to the sentencing of Mr. Morhouse, while you were secretary to the Governor, you wrote a letter to Judge Gellinoff concerning Mr. Morhouse.

Would you please explain the circumstances surrounding that letter and whether or not you consulted with Governor Rockefeller prior to sending it?

Mr. RONAN. The letter which I wrote to Judge Gellinoff was at a time when Mr. Morhouse had been convicted of a felony and was facing

sentence.

My best recollection of it was that his counsel had indicated that character letters would be important at that time from people who felt that they could write them, and I was approached and I agreed to write a letter.

I framed a letter, which I was very pleased to send, because I had known Judson Morhouse and his wife. I had worked very closely with him, actually pre-1958, in the period when Nelson Rockefeller was seeking the nomination for the Republican candidacy for Governor, and I, of course, worked very closely in the campaign of 1958 with Mr. Morhouse.

And I had always found him to be an honorable person in his dealings with me. He was a family person, and I accordingly wrote generally to that effect.

Before sending the letter, because of the nature of my position as secretary to the Governor, I did talk to the Governor about it and got his approval to say that, in essence, what I was saying he was aware of and basically endorsed.

The CHAIRMAN. Would you provide us a copy of that letter for the record, please?

Mr. RONAN. I would be pleased to do so, sir.

The CHAIRMAN. Would you also provide us for the record a copy of the letter you received from Governor Roekefeller which accompanied the canceled notes?

Mr. RONAN. I would be pleased to do that, sir.

The CHAIRMAN. We will have both of those items made a part of the record.

[The information referred to above, subsequently received by the committee from Dr. Ronan, follows:]

Hon. ABRAHAM J. GELLINOFF,

Justice of the Supreme Court,

County Court House,

New York, N.Y.

JUNE 14, 1966.

MY DEAR MR. JUSTICE: I am writing you with respect to the case of Mr. L. Judson Morhouse. I have known Judson Morhouse for some ten years in connection with my work in several political campaigns, with respect to my duties as a State official, and on numerous social occasions.