The Washington times., 1921-11-07
CONTINUED From First Pase)

tion OF the foreign debts and the
fight by a number OF Senators TO
reserve 10 Congress the right Of rat
flying agreements with the debtor
nations. rather than leave IL TO a
commission TO make final settlements,
as provided In the refunding bill
which passed the House.
ITO appreciate the full importance
OF these official revelations. II should
be borne In mind that this money
was raised by Liberty loan drives
and taxation and was authorized 10
be used only for the purpose OF prose
cutting the war and to be loaned TO
governments then engaged In war
with enemies OF the United States.
Post-Armistice Loans.
Notwithstanding this was the law,
Treasury records submitted TO the Sen
ate Judiciary Committee show that
approximately 81 500 900 900 was loan
ed TO foreign governments after al
hostilities had ceased.
Examination OF the official records
further show, according 10 the COM
mittee's report, that the Treasury De-
partment officials were aware or the
fact that they had no authority within
the law TO make such loans after hos
tilities had ceased"
Former Secretaries or the Treasury
McAdoo and Glass both recognized
they were without this authority and
urged the House Ways and Means
Committee to report bill giving II TO
them. But Mr.. Hunts report to the
Judiciary Committee adds:
"It is sufficient to say that the
authority was not granted. but the
Treasury Department continued never
theless making loans to foreign govern
ments for reconstruction purposes
after all hostilities had ceased"
In fact, the report points out. "the
| Treasury Department continued max
| ing these loans after the peace treaty
was signed and after January 10. 1920.
when the formal process verbal Of
ratification was deposited. and the
governments receiving the money were
actually and technically at peace with
Germany"
| The official report prepared for the
Senate Judiciary Committee says:
Throughout the entire correspond
ence between the State Department.
the Treasury Department. the President
and various foreign governments, sub
mitted to the committee, there Is no
record or mention that any OF the
departments of this Government re-
uuested an opinion tfrom the Attorney
General as to their authority to con.
tinue making loans for the purpose of
prosecuting the war after all hostili.
ties had ceased. In fact. there Is no
record showing that any legal opinion
was ever asked in regard to this
matter"
Law Not ConforIned To.
Even the obligations accepted by
this Government were NOT In con.
formance with the law. They paved
the way for deferment Of both prin'
cipal and interest. and are respoDsi.
Bile for much Of the difficulties ahead
of the proposed commission in carry
ing out the refunding process. This
Is the finding of the judiciary commit
tees counsel:
"The Treasury Department ACCEPT
ed demand obligations from foreign
governments for all Of the loans they
made when all Of the sections OF the
acts authorizing these loans provided
for obligations Of the same tenor and
effect as the particular Liberty loan
by which the mopey was raised.
THE demand obligations above re.
ferred to. having no maturity date and
no definite interest paying date, made
IL an easy matter for the foreign gov
ernments to defer the payment. both
Of pr ncipal and interest, as the whole
| matt ;r was leIt IN very ihuSiihite
and uncertain state.
The report summarizes some OF the
other more important facts as dis
closed by the correspondence between
the Treasury Department and the Tor
eIgn departments" as follows:
The Treasury Department contln'
ued making advances to foreign gov
ernments. while. at the same tme' II
was holding consultations and parleys
with foreign governments on posi-
BILE cancellation of all debts as pro-
posed by these governments.
Various branches of the United
States Government made payments Of
cash to foreign governments, which
governments were indebted to the
United States, both on loans and In.
terest, when these reports should
have been made to the United States
Treasury and credited I'd the account
of the government to which they were
due.
Loans Diverted.
Numerous loans were made from
this fund for the purpose OF increas-
ing our influence in the European
political situation. at the peace con-
ference; not for the purpose OF prose
cution Of the war.
| millions of dollars Of this liberty
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