SEC. 2. A quorum for the transaction of business by any local post shall be decided by each post and inserted in the post's by-laws.

SEC. 3. Each local post shall pay a per capita tax of 50 cents per year, payable quarterly to the national treasurer.

ARTICLE XVII.-AMENDMENTS

SECTION 1. This constitution may be amended in whole or in part at the national convention.

SEC. 2. Any amendment proposed must be in writing and presented to the constitution committee who will refer it to the convention with their recommendation.

SEC. 3. Two-thirds of the total vote of the convention shall be required in order to amend this constitution.

SEC. 4. This constitution may also be amended at any time by two-thirds of the referendum vote of the National Disabled Soldiers' League (Inc.).

SEC. 5. Each local post shall make a semiannual report, said report to be in the national headquarters not later than January 15, and June 15, and the report is to be as follows:

First. Number of members at date of previous report.

Second. Number of members expelled during year.

Third. Number of members suspended during year.

Fourth. Number of members dropped for nonpayment of dues.
Fifth. Number of members deceased during year.

Sixth. Number of members dismissed during year.

Seventh. Number of members initiated during year.
Eighth. Number of members on roll of membership.
Ninth. Financial report.

Tenth. The amount to the credit of post at last report.
Eleventh. The total receipts since previous report.

Twelfth. The total expenditures since last report.

Thirteenth. The total amount of money on hand on date of previous report. Fourteenth. Value of property of the post.

Fifteenth. The amount otherwise invested on in bank.

Major SHAW. I hand you another file of papers, Inspector Johnston, also certified by the Postmaster General of the United States as photostat copies of originals on file with the Post Office Department, and ask you if you identify it [handing papers to the witness]. Mr. JOHNSTON. Some of these papers, Major Shaw, I obtained and some I did not. I will enumerate those

Major SHAW. You recall that that was introduced as an exhibit in the case before the Post Office Department?

Mr. JOHNSTON. Yes.

Major SHAW. Relative to this article, I might state that this is entered as "Government Exhibit No. 4 A," and was recorded in the post-office hearings.

Mr. JOHNSTON. This is a newspaper notice headed "To the public of Philadelphia." Mr. Nolan gave me a copy of that last April or May in his office.

Major SHAW. May I in connection with that, Inspector Johnston, just call the attention of the committee to several items? This is addressed "To the public of Philadelphia." I note this statement, inspector [reading]:

The American Legion attempted to discredit this organization before the public has instigated so-called investigations to be made of it, first by the Post Office Department of the United States, which department investigated us thoroughly, made a full minute inspection of our books, and finally reported that this organization was strictly within its rights.

From your knowledge of the investigation being made in the Post Office Department, would you say that that was a correct statement?

Mr. JOHNSTON. No; that is not correct. That statement purports to be in the form of a favorable report or indorsement. The reports which were before me, the records of the case, were simply negative, that there was no action which the department could take.

Major SHAW. And the statement further goes on to say, "that it was a responsible organization and that therefore nothing could or should be done to interfere with its work." That is not correct?

Mr. JOHNSTON. That is not correct. I have never seen that statement in any files before me from the Post Office Department. Major SHAW (continues reading):

This fact is confirmed by practically all of the associations having anything to do with the work of aiding war veterans, particularly the National Information Bureau, which acts as a clearing house, making reports on the worthiness of all charities.

I call attention to that statement, Mr. Chairman, in connection with the testimony of Agent Starr, of the Department of Justice, who stated yesterday that he had examined the reports of the National Information Bureau and found that they had never made a favorable report on the National Disabled Soldiers' League. The statement goes on to say:

Later the American Legion kept up its futile efforts, through its highly-paid publicity agents, to discredit this organization, taking the matter up with the executive departments of the United States until it reached the attention of the President of the United States, the late President Harding. He took it up personally, and wrote to the Director of the Veterans' Bureau, in reply to which he was advised by letter from Col. I. James

This has it "James "; the correct name is "Ijams "—

the Acting Director of the Veterans' Bureau, who reported to the President, among other things, “there is no question about the good work being performed by the National Disabled Soldiers' League."

And that is in direct quotes. Inspector Johnston, did you have occasion to investigate whether there was any such letter from Colonel Ijams to the late President Harding containing that direct quotation?

Mr. JOHNSTON. Yes, sir; I did.

Major SHAW. Are you satisfied from the results of your investigation that no such letter is in existence?

Mr. JOHNSTON. Yes; I would like to state the basis for that, however.

Major SHAW. We will come to that, Mr. Johnston, when the affidavits are taken up relative to that exhibit.

The statement also goes on to say:

Later the American Legion complained to the office of the United States attorney for the southern district of New York, and after an investigation by him he refused to take any steps or to do anything which might interfere with our work.

Would you say that that was a correct statement, Inspector Johnston, from your investigation?

Mr. JOHNSTON. That is incorrect, according to the information received by us at the office of the county attorney in New York. Major SHAW. You made a personal investigation?

Mr. JOHNSTON. In company with Inspector Chester, we made several calls at the office of the county attorney in New York City. Major SHAW. What were you informed at that office?

Mr. JOHNSTON. We were informed by Mr. Alexander Lehman that a decision was not reached by that office on the showing in the case of the National Disabled Soldiers' League, and that the league through its representatives had declined to appear further after having a partial hearing.

Major SHAW. This newspaper statement further goes on to say: Although the American Legion attempted to exert its influence with the district attorney of New York against us, yet on Tuesday, February 12, of this year, the following statement appeared in the New York Evening Journal--And this is in clear type, apparently in quotation from that newspaper:

The investigation by the district attorney's office into the activities of the National Disabled Soldiers' League to-day came to a standstill. The inquiry, which extended more than two months, was under the direction of Alexander Lehman, assistant district attorney. Many of the prominent officers of the league were voluntary witnesses, including John T. Nolan, national commander. So far as the investigation has progressed, there is nothing before the district attorney that warrants criminal action against the league.

Abner Siegal, national counsel for the league, caustically criticized those whom he claimed were responsible for the inquiry which he said was promoted by the league's opposition to the soldiers' bonus.

Attention is called to that, Mr. Chairman, in connection with testimony of certain witnesses yesterday, and to an article appearing in one New York newspaper.

The remainder of the statement is a laudatory review of the work of the National Disabled Soldiers' League and is not pertinent at the present time.

The remainder of the file, Inspector Johnston, consists largely of what?

Mr. JOHNSTON. Literature, mostly circulars of solicitation, accompanying the packages of lead pencils. The ones right in your hand now were obtained by Inspector Chester and myself at the office of the P. C. Smith Co. in New York on December 5, at which time we were told they were current literature.

Major SHAW. These letters, or others of a similar nature, have been sent through the mails, have they, Inspector Johnston?

Mr. JOHNSTON. Yes, sir; so I understand.

Major SHAW. They contain, on the letterhead, lists of so-called advisory board members?

Mr. JOHNSTON. Yes, sir.

Major SHAW. At the start are these lists long?

Mr. JOHNSTON. Very long.

Major SHAW. They include many prominent names?

Mr. JOHNSTON. Yes, sir.

Major SHAW. Does it appear later that those names disappeared from the letterhead?

Mr. JOHNSTON. They gradually disappeared from the letterhead. Major SHAW. Do you know the occasion of such disappearance? Mr. JOHNSTON. Well, I visited quite a number of these people, and they stated that they caused their names to be taken from the letterheads because of complaints and inquiries received from people who were solicited to buy lead pencils.

Major SHAW. I call your attention to a photostat marked "4 L." Is that the letter of the National Disabled Soldiers' League to Doctor Mayo, to which reference was made by Inspector Chester?

Mr. JOHNSTON. Speaking from the record and from my knowledge of the case, I believe that that is the letter.

Major SHAW. Mr. Chairman, I do not think it is necessary to read any of these letters. Excerpts from material parts have gone in in this investigation at times whenever occasion arose to make reference. I will simply submit the file as an exhibit, and ask that it be admitted in the record.

The CHAIRMAN. Are these the letters from the directors of this organization?

Major SHAW. No; these are the letters of solicitation sent out by the National Disabled Soldiers' League from time to time.

The CHAIRMAN. Oh, yes.

Mr. SIEGAL. Letters from the directors of the organization were introduced in evidence as part of that record. I would like to have them. I made a motion at the start to have those documents brought here.

Major SHAW. By "directors" you mean advisory board?

Mr. SIEGAL. Advisory board. I assume that is what the chairman meant.

The CHAIRMAN. Have you got those?

Major SHAW. No. I think they are exhibits in the case of the National Disabled Soldiers' League. I have no objection.

The CHAIRMAN. I wanted to see letters from members of the advisory board, especially the letters stating why they had resigned. Major SHAW. I have those letters here, Mr. Chairman, and they will be introduced and identified by Inspector Johnston when we come to that in his examination. The letters to which Mr. Siegal makes reference, I understand-Mr. Siegal, you will correct me if I am wrong-are those of advisory board members giving certain consent to the use of their names.

Mr. SIEGAL. And also the reasons showing why they got off the board, indicating in substance that they got off the board after complaints had been made to them by people throughout the country and after visits of the post-office inspectors.

Major SHAW. Not all of them.

Mr. SIEGAL. Just a few. If we had those documents, we could clear up a lot of this.

Major SHAW. I think you are perfectly entitled to have representative copies of the Post Office Department exhibits presented by the National Disabled Soldiers' League.

The CHAIRMAN. I assume the committee would be interested in those.

Major SHAW. Inspector Johnston, I hand you a file of papers, also certified by the Postmaster General of the United States as photostat copies of original documents on file in the Post Office Department, and ask you to identify generally the file [handing papers to the witness].

Mr. JOHNSTON. This is a photostat copy of the contract of the Reuben H. Donnelley Corporation with the National Disabled Soldiers' League.

Major SHAW. A copy of that has been submitted by a representative of the Donnelley Co.

Mr. JOHNSTON. From the company, dated October 3, 1923, and was obtained by post-office inspector and myself upon the occasion of a

visit to the office and plant of the Donnelley Corporation, October 22, 1924, at New York City, from Mr. A. Ackerman, manager of the direct mail department of the Reuben H. Donnelley Corporation, and showing in a general way the operations of that company under this contract, such affidavit being executed before Post Office Inspector Chester, and photostat transcript of the account of the National Disabled Soldiers' League in the Corn Exchange Bank of New York City.

Major SHAW. You identify the account of the Foreign Exchange Bank in this exhibit, Inspector Johnston?

Mr. JOHNSTON. Yes.

Major SHAW. I think I do not desire to call any particular attention to any of these exhibits here, Mr. Chairman. They are simply a matter of record, except this Corn Exchange Bank, to which reference may be subsequently made. But I would like to have it go in as a part of the exhibit.

Major SHAW. I hand you another file of papers certified by the Postmaster General of the United States as photostat copies of original papers in the files of the Post Office Department, and ask you to identify it [handing documents to the witness].

Mr. JOHNSTON. This document is a photostat copy of a letter dated May 7, 1924, and addressed to myself, and signed by John T. Nolan, national commander, and Mr. James F. McCann, national treasurer, of the National Disabled Soldiers' League, and was furnished to me in response to my request upon Mr. Nolan and Mr. McCann, covering certain phases of the investigation under inquiry in May, 1924.

Major SHAW. There are one or two excerpts of a letter from Mr. Nolan to Inspector Johnston. I would like to call your attention to this paragraph in part [reading]:

It might be well in passing, to advise that while there were a great many of pencils sent out in the mails, that on an average approximately one-third of those pencils are never heard from, resulting therefore in a total loss, while another third are returned, all postage being guaranteed and being paid for by the league. This leaves only the revenue of only one-third of the pencils sent out to pay the invoices of the pencil company, the mailing company and the return mailing charge.

Attention is called to this, Mr. Chairman, in connection with a statement in the literature of the league to the effect that approximately 90 per cent of those to whom requests are made sent contributions.

Further on in the letter is this:

Our books are being audited by our accountants, and upon the completion of the audit we will hand you a certified or photostated copy of the same. Inspector Johnston, was such an audit ever furnished you? Mr. JOHNSTON. No, sir.

Major SHAW. Was it ever introduced in the hearings of the Post Office Department to your knowledge?

Mr. JOHNSTON. Not to my knowledge. I made several requests for that audit upon Mr. Nolan.

Major SHAW. Those requests appear in the next exhibits which I will ask the witness to identify. I would like to have that go in. The CHAIRMAN. What is that?