The New York herald., 1921-02-17
HOUSTON CURBED
BY YSENATEACTION
ON FOREIGN LOANS
Secretary of the Treasury
Agrees to Confer Before
Making More Payments.
LEGALITY IN QUESTION
Reed Insists P0werWaS Not
Granted to Executive to
Act Independently.
INQUIRY is NARROWED
Judiciary Committee Not to
INQUIRY is NARROWED
Judiciary Committee Not to
Take Up Commitments Made
Before Armistiee.
Special Despatch 10 TINE New YORK HEaALD.
New York Herald Bvreau,
Washington, D.. c., Feb.s 16,

WuSuhNkson, Ds Ns,1 EcDs Av'
Before the Secretary Of the Treasury
makes any further advances OF funds
20 foreign governments on commitments
already agreed to he Will notify the Sen
ate Judiciary Committee and submit to
them the evidence on which these ad-
vances are made. This promise was
given to the Judiciary Committee to-oay
by Secretary Houston at q further hear
ing on the foreign loan situation.
1t followed presentation to the com
nittee of voluninous records OF the
Treasury Department giving the history
of some Of the credit balances that have
been established IN favor OF foreign gov
ernments on which advances have been
made since the signing Of the ar>nistiee.
Most of the facts adduced already have
been made public by Mr.. Houston in his
annual report.
The committee displayed special inter
est In an advance of $5.o00.ooo made 70
the Government OF Czecho-SlovaAa on
November Is, four days after the arn,is-
tice was signed. A credit OF s7.OV0,0oo
was written in favor, OF this Government
and IS, ,0o0, 900 in cash placed to its credit
Ia the Central Union Trust Company OF
New York. subject to being drawn on oy
checks signed by properly accrediteo
representatives of the foreign govern
ment to pay for war supplies sold TO II
by firms in this country. William G.
NicAdoo- was then Secretary Of the Treas
ury and Mr.. Lansing secretary OF
State Both, as well as President Will
son. approved of the extension OF credit
and the cash advance, and 1t was stated
that the same approval was given 10 al
other credit balances, loans and cash
advances TO foreign governments
Insists Loans Are LEGAL.
Mr.. Houston explained In answer to
questions that the actual Establishment
of the credit to Czecho-Stovakia had
been agreed TO before the signing OF the
armistice Mr.. Houston again insisted
that all the conduct OF the foreign loans
was legal and had been authorized In the
various Liberty loan acts. This con-
tention was disputed by Senator Reed
(Mixsouri), Senator Smith (Georgta },
and one or two Others on the committee,
who always have contended that there Is
no such authority. This still remains IN
dispute as between the Secretary and
the committee.
When a discussion arose whether the
committee should continue the hearing
while the Senate is in session. Senator
Reed said:
II want all records to show how the
treaty officials tried TO get authority to
make the payments after the armistice.
their failure 20 get that authority ans
their action In making the payments
even though as contend, they did not
have that authority.
"If the Secretary win say to US that
he will not pay out any more money
without notifying this committee, then ]
am perfectly willing to take all the time
we need"
Secretary Houston said he had been
incorrectly quoted as saying he was
going to pay out more money.
What did say" the Secretary
added. "is that do not know whether /
shall be called on to make further pay
ments. I have no present inclination 70
do so. But I do say that my present
inclination is to pay out money on these
commitments. IL evidence Is presented to
me in connection with n request for
further payments. that seems to me to
meet the requirements OF our commit
nrents should give full consideration
10 the view OF those who say the Treas
ury Is without authority TO make such
payments
Agrees to Confer with COm mftfcc.
Suppose a foreign Government should
ask you for more money" said Senator
Brandekee. land their request should be
apparently IN proper compliance. would
you feel compelled to pay II out In spite
OF the fact that the Judiciary Commit
tee Expressed their view that you had
no right 10 do II until they had reported
all the facts TO the Senator"
Il cannot answer that speculative pro-
poeal." the Secretary replied 'T will
say. however. that I will give the COM
mttee chance to know the facts IL
they arise. I viii be willing TO do that
The Treasury is not anxious TO pay out
money to anybody rts attitude has
been exceedingly careful both as to tho
law and the purposes for which money
has been paid out Ind dificuity In
answering a question which involves a
forecast OF future events"
But will you advise with this COM
nlittee before making any further pay
n1ents?" asked Senator Reed.
II will" the Secretary answered.
A long discussion followed as to the
kird OF documents that the Secretary
will be asked to furnish at the hearing
next Monday. II was finally agreed TO
limit the documentary evidence 20 the
commitments Involving payments OF
money made since the armlsticc was
signed ard not 10 go into the enormous
sums advanced to France and other al
he'd Governments while the war was IN