Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-02-22
TREASURY HEADS
DEFEND LOANS
TO FOREIGN GOVTS.

Washington, Feb. 21-Foreign loans
extended by the treasury department
during the war and since the armis-
ticewere vigorously defended by gov
eminent officials today in reply to
protestants against any further exer-
| ciseof the governments loan powers.
Secretary Houston of the treasury,
resumed testimony before the Senate
!, judiciary committee on the Reed bill
directing the stoppage of further loan
negotiations with debtor nations. At
the same time, Solicitor General Fri
ersonresponded to the suit brought
by William Randolph Hearst to pre-
vent further financial transactions
with foreign governments.
Mr. Houston was excused from fur
Their appearance before the commit
, tee after he had. presented a mass of
correspondence covering the subject
of negotiations and had brought out
| the possibility of his reading them in
full in the few days preceding March
| 4. He left Nicholas Kelley. assistant
secretary. in charge of foreign loans.
at the disposal of the committee
while it continued the investigation.
| Mr.. Frierson filed with the District
of Columbia Supreme court a brief
reviewing the transactions with the
foreign powers and declared there
| brought by Mr.. Hearst as a tax pay
! err, as Secretary Houston had no in
tention of establishing additional
creditsin favor of any foreign pow
ers. The solicitor general reviewed
at length the conditions under which
money was advanced to the KerenSky
government of Russia. He also as
serted that Secretary Houston did not
cancede that the plaintiff possessed a
status emitting him to call in ques-
ton the various credits or that the
court had any jurisdiction to deter
mine such controversy.
| Counsel for Mr.. Hearst, replying,
declared that the Supreme court of
the United States had never refused
to entertain n suit by tax payer to
prevent federal official from dispos-
ing of the money or property of the
Omitted States in an alleged unlawful
| manner. 1t also was maintained that
a tax payer has all the interest that
is required to restrin an executive Of
fetal.
! The Senate committee today con-
fined it's efforts to the French, Gee
lcho- Slovakian and Liberian loans and
announced that it would examine the
papers in the case of each transaction
until it had established whether the
loans were legally made. Secretary
Houston said he did not regard the
| armistice as causing "a situation
which would preventadvances under
the law" and that existing statutes
gave him authority to, continue loans
until the president issued proclama-
ton of peace. He added that he did
Fnot believe any nation would ask for
new loaf s.
The recently published statement of
William G.. McAdoo, former secretary
of the treasury. in which he opposed
| the general policy of foreign loans
was injected into the discussion by
Senator Shields. Democrat, Tennes-
see, who inquired if Mr.. McAdoo had
| followed this policy during his ad-
ministration and whether Secretaries
Glass and Houston had acted contra
ry to Mr.. McAdoo's policy.
! Secretary Houston replied that he
! did not know what Mr.. McAdoo meant
in the published statement and read
from the ex-secretary's report to
show that credits totalling $S.l71,976.-
! 900 had BEEN established up to No
vember -. 1918. Mr.. McAdoo was
further quoted as saying he would
recommend the enactment of legis-
/ iation extending authority to estab-
lish credits in favor of foreign govern
ments for a reasonable period and
within reasonab BILE limits to meet the
| needs growing out of the war;