The Washington times., 1921-11-08

amount that we authorized In former
acts, which is about one billion ana
"a half dollars. In other words, they
asked that we should loan our Allies
one year after the termination OF the
war one and a half billion dollars.
THE committee thought we ought
not to do that. and l think the com
mitee was unanimous in the opinion
that certainly this was not the time
for the Government 10 loan a billion
and half dollars more to the Allies
Loans Not stopped.
The report adds:
"It is sufficient TO say that the au-
thority was not granted, but the
Treasury Department continued max
ing loans to foreign governments Tor
reconstruction purposes AFTER all hos
tilities had ceased"
The correspondence between the
Treasury Department and foreign gov
ernments, attached to the report, also
shows conclusively that there was not
the slightest doubt that no authority
to make foreign loans would exist
after hostilities should cease. This
statement was made by Mr.. Rathbone
on April 8, 1918. in cablegram TO
Norman II. Davis, then representative
of the Treasury Department In Parls:
AFTER peace is declared we have no
authority 10 establish credits for food.
On November 2, 1918, Mr.. Rathbone
in memorandum prepared Tor Sec
retary McAdoo stated:
Legislation should, however, be
secured extending the authority OF
the Secretary of the Treasury TO es.
tablish credits with the approval OF
the President, and from the credits so
established to purchase obligations or
foreign governments even after the
conclusion of peace and TO make such
purchases for purposes other than for
the national security and defense
McAdoo to Wilson.
On November 21, 1918, ten days
after the signing Of the armistice.
President Wilson was formally ad-
vised by Secretary McAdoo that the
Treasury Department was without au-
thority to make further loans. In
letter to the President, Mr.. McAdoo
said:
II am limited in establishing credits
for the purpose of more effectually
providing for the national security and
defense and prosecuting the war, and
my authority to establish such credits
ceases upon the termination of the
war between the United States and
the Imperial German Government. 1
have not, therefore, authority to es-
tablish credits in favor of the Belgian
Government for reconstruction pur-
poses, but until the termination of the
war with Germany l have authority,
with your approval, to establish cred
it's in favor of the Belgian Government
for relief purposes"
Secretary McAdoo, two weeks be-
o.. IL. a. n Il.
vised Andre Tardieu, French Htgn
Commissioner to the United States,
that Il have no power under existing
law to grant credits for reconstruc-
tion purposes after the return OF
peace"
Mr.. McAdoo added:
"I regard the questions presented
to you, however. as of such impor.
tance to the common interests os
France and the United States th"t
in order TO put me in position TO
aid in the solution of the Impending
problems, / shall Immediately, If the
President approves, ask the Congress
for authority to establish credits, with
approval of the President. in favor OF
France, and to purchase its obliga-
tions up to the amount of the credits
as established, to enable the govern
ment to meet purchases in the United
States for reconstruction purposes at
ter the war"
Money Paid Out.
In face OF all these admissions Of
lack of authority to make loans after
the armistice. the Treasury Depart
ment paid out to foreign treasures
81. 500, 100000 without even consult
alton with the Attorney-Gen or re-
quest for any legal opinion as to the
violation of the law, the report to the
Senate Judiciary Committee states.
1t says:
Throughout the entire correspon.
dence between the State Department.
the Treasury Department. the Presi-
dent and various foreign Governments,
submitted TO the committee, there is
no record or mention that any of the
departments OF this Government re-
quested an opinion from the Attorney
General as to their authority to con-
tinue making loans for the purpose of
the prosecution of the war after ali
hostilities had ceased. In fact, there
is no record showing that any legal
opinion was ever asked in regard to
this matter"