The Washington times., 1921-02-13
TO
LEND BILLION
Treasury Furnished Loans to
Allied Power Without Author
ity, Hearst Suit Reveals.


Continued from First Page)
in turn could lend IL TO their citizens
10 buy from US what they desired.
"The ways and Means) Committee
thought we ought not to do that, and
was unanimously OF the opinion that
this is not the time for the Govern
ment to loan a billion and half dol
lars moresto the Allies, especially
when we had to go out and get IL by
taxation of the people or by selling
bonds to the people and get the
money"
MeADOO MADE APPEAL.
Secretary McAdoo's first appeal for
additional authority for the loans was
made on December 5. 1918, three
weeks after the Armistice was de-
clared. In a letter OF that date to
Representative Claude Kitchen. chair
fan OF the Ways and Means Com
mittee. he supported a special bill
in the following language;
Under existing laws credits may
be established by the Secretary OF
the Treasury, with the approval OF
the President only for the purpose
OF national security and defense
and the prosecution of the war In
favor of governments engaged in
war with the enemies of the United
States, and the authority to estab-
1ish such credits ceases upon the
termination of the war between the
United and the Imperial German
government.
II cannot feel that the war has
been really won II at its conclusion
The countries which have side by
side with us borne the stress of the
conflict are not supplied, with avail
able means to the extent that they
may be unable to provide for thei"
own finances, and provide their coun-
try with the supplies needed for
reconstruction OF their economic
life"
McADOO TESTIMONY.
Terrifying before the committee,
Mr.. - Adoo said
II GIo not, ask that loans amount
1ng 20 $1,000, 100000 be made, but
that the Treasury Department be
empowered to make loans as 1t sees
fit up to this amount.
"a billion and a half is not enough
to accomplish this reconstruction. but
will tide them over"
That Carter Glass believed addi-
tional loans should not be made by
the United States to European gov
ernments, but that the latter should
I've compelled to rely upon their own
resources 10 shown by the following
extract frcm letter written by him
to Homer i. Ferguson, president Of
the Chamber of Commerce of the
United States. Under date OF January
so 1920, he wrote:
''Thc people of the Uaited States
are being called upon by taxes and
otherwise, not only to meet the Gov.
ernmeRt's expenditures. but to reduce
the war debt. So far as European
countries are concerned, the adoption
OF similar policies is a matter for the
governments of these countries and
for the PREPARATIONS commission"
The various Liberty Loan acts speci-
~ that the money lent to the allies
must be spent for "purposes Of IA
tionsl security and defense In the
prosecution OF the war; Money was
not to be loaned even for these pur-
poses except to = Eoverpment en-
xaxed at the time Of the loan in war
with one Of our enemies.'
Persistent efforts have been made
by both Great Britain and France to
persuade the United States to cancel
their war debts, Secretary of the
Treasury Houston yesterday informed
the Senate Foreign Relations Com
mittee.
MORAL OBLIGATION.
In spite of these overtures, Secre-
tary Houston told the committee that
it was his opinion that the Govern
ment should continue to lend money
to European nations where credits
had been allocated but not employed.
He argued, it was learned, that these
credits were established prior to the
armistice or under agreements made
during the war and that the nation
IS morally bound to fulfill them.
Only successful conclusion OF the
court action brought by Mr.. Hearst,
or the expiration of the present ad-
niinistration before he IL able to ac-
compIish his purpose, II would appear.
can prevent Mr.. Houston from ne
complaining his purpose, which IL
directly contrary to the letter and
the spirit of the Liberty LOnn law.
Secretary Houston came before the
committee at his own request to ex-
plain the Treasury Departments
policy in reference to foreign loans,
which have been made the subject of
four, resolutions OF inquiry introduced
3n the Senate during the last two
weeks. The Treasury always has
been irrevocably opposed to the re-
mission of the Allied debts and all
foreign overtures toward that end