The Washington times., 1921-02-13
HEARST SUIT
REvEALSDEAL
Congress Ignored by McAdoo in
Furnishing Funds to
Allied Powers.
ADMITTED LAW WAS NEEDED
Prompt Action to Prohibit Fur
ther Credits Expected Here
This Week.

The Treasury Department loaned
more than billion dollars to Euro
pean governments IN direct defiance
of Congress and with the knowledge
according to its own admission, that
such loans we're without authority In
law.
This fact was revealed today when
a letter and secret testimony given
by former Secretary or the Treasury
William Gibbs McAdoo before the
House Ways and Means Committee
in executive session we're made pub
lie for the first time.
On this occasion Mr.. McAdoo
asked that a special bill be reported
granting specific authority to make
the loans after the conclusion of
peace. The committee unanimously
refused
Conversations between former Sec
retary of the Treasury Glass and
members of the same committee, it
was also revealed today, confirmed
belief by Treasury officials that ad-
ditionaI authority was required be-
fore the loans could legally he made.
This authority was refused Where
upon the Treasury Department went
ahead and made the loans anyway.
WILL STOP NEW LOANS.
Prompt action BY Congress to pre-
vent Secretary Houston from extend
iDG any further loans to foreign ksv-
ernments win be sought this week.
This action will be supplemental to
the court action brought by william
Randolph Hearst, newspaper pub
Usher, on behalf of the taxpayers of
the entire country, to restrain Secre-
tary Houston from making additional
loans. ..
Senator James Reed OF Missouri to-
day said he would ask the Judiciary
Committee Of the senate tomorrow
to take some actiOn to halt Secretary
Houston.
Senator David I. Walsh of Massa-
chusetts said that he would press for
action early this week on his resoIu-
tions, favOrably reported to the
senate. which would prohibit further
loans to foreign governments.
WOULD CONTINUE LOANS.
In his testimony yesterday after
noon before the Senate Foreign Rela-
tions Committee, Secretary Houston
made IL plain that he believes the
United States should continue paying
out money to foreign countries and
that he will make every possible eff
fort to justify his stand and continue
the generous disbursements to gov
ernments far across the seas.
The attitude OF Congress in refusing
special permission to officials of the
Treasury Department to make the
loans was graphically described by
Congressman Claude Kitchin. chair
man of the Ways and Means Commit
tee, in presenting the Victory loan
act to the House on March Is. 1919,
according to revelations today. Mr..
Kitchin's language as IL appears in
the Congressional Record for that
date is as follows:
Secretary McAdoo, before he left
the Treasury Department. and Sec
retary Glass asked the Ways and
Means Committee to authorize the
Secretary of the Treasury to estab-
lish credits in the United states in
behalf of foreign governments to the
amount OF the unexpended balance
OF $4,000, 100000 authorized for war
loans, which was about 81, 500, ,0OO, 900.
"By that we would have to go out
In the Victory Loan campaigns and
ask the people to subscribe a billion
and half dollars more than was
necessary to meet the debts OF our
Government. that we might lend 1t
to foreign governments so that they
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