The Washington herald., 1921-02-03
SENATE BEGINS
PROBE OF ALL
FOREIGN LOANS
Reed Scores $59,OOO,OOO
Drawing Account of
Russian Envoy.
ASK TREASURY
TO FURNISH DATA
S419,OOO,OO0 Still Held by
U. S. to Credit of
Other Nations.

The $4,000, 900 drawing account of
Boris Bakhmeteff and the reasons
why the United States advanced the
money which would enable the Lii
berian delegates to attend the Paris
Peace Conference entered into a
hearing held yesterday by the SEN
ate judiciary Committee on the bill
of Senator James A. Reed. of Mis-
souri,, designed to prevent the ad-
vancing of any more money to for
eign governments by the United
States.
The testimony which was offered
| by Nicholas Kelley, Assistant Sec
re.ary of the Treasury, caused the
committee to decide on the appoint
ment of a subcommittee to examine
all documents that passed between
this government and other govern
ments on loans already made, and
to call on the Secretary of the
Treasury, at the request of Senator
Frank b. kellogg, for information as
to authority for the present refund
| ing negotiations now being carried
on with England.
stops Further Advances.
The committee developed the fact
that there is still in the Treasury
100000 as the result of the vari-
! GUS Liberty loans, to the credit OF
| foreign governments. Indicative o.
Senate sentiment to take some &C
tion to prevent any moro money
from being loaned to Europe was
the simultaneous action of the Sem
ate Foreign Relations Committee
yesterday in reporting out two reso-
lutions by Senator David l. Walsh
of Massachusetts, one to prohibit
any further loans to Europe, and
/ the other calling on the Secretary
/ of the Treasury for all conversa-
tions and communications as to the
refunding operations
The judiciary Committee gave
close attention to the loans made
by the United States to Russia. UP
to the time of the fall of the ke-
rensky government, November, T.
l1s17. s1S7, 900, 900 had been advanced
to Russia, according to kellogss
testimony At the time Of its fall
there was S56.O0O,OOO on. deposit to
the credit of the Keren8Iy govern
| ment in the National City Bank
of New York To this amount has
been added $3,OOO.OOO. making a
total Of Ss9OOO,oO0. Part of this
sum, just how much no one can
tell. Mr. Kelley said, was furnished
by the Russian government. There
remains only several hundred thou
hoy
drawn out on checks signed by Boris
Bakhmeteff. who was sent to this
country and recognized by the
United States government as the
Ambassador of tho Kerensky gov
ernment.
Drew Own Checks.
The formula by which the money
was withdrawn, Mr.. Kelley ex-
planned, was whenever Mr.. Bakhmc-
teff needed money he drew a check
on the National City Bank; the Ma
tional City Bank called up the
Treasury to find out if it was o..
X. and. according to Mr.. Kelley,
the Treasury Department never in
terposed any objections to payment.
Then we have been advancing
money to the representatives OF a
government which does not exist
and which has not existed for three
years." said Sepator Reed.
Mr.. Kelley Countered with the
statement that the Trea sury De-
partment was acting upon the ad-
vice of the State Department to the
effect that Mr.. Bakhmeteff was the
official representative of the Rus
sian government.
The making of loans for feeding
of civilian populations were at
tackled by members of the commit
tee as outside the authority of the
act, also the $26,OOO which had been
advanced to Liberia.
What did Liberia do to help win
the war;" asked Senator Reed.
II don't know" said Mr.. Kelley.
There was a credit of how mucn
for LIBERIA" was Reeds next ques-
ton.
Five million dollars"
Continue Hearing.
Then Liberia is still entitled to
draw on US for more than $4,000, 900
although the war ended two years
ago." Senator Reed said.
NC. it could be done only on spe-
cific authorization"
What was this s26,00O for?"
ITO pay the expense of their dele
CATION to the peace conference"
I'VE had to pay the freight on
the Liberian delegation to the peace
conference them" said Senator
Reed,
81 didn't know they went by
freight" said Mr.. Kelley.
We'll, VIC paid their expenses to
your tender sensibilities better
Senator Reed replied.
The committee voted to continue
examination of Mr.. Kelley on Satur-
day morning.