Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-03-10

Mr.. Crosby's formal statement fol-
lows:
Il can recall but one incident
which. remaining in Lord Balfour's
mind. may have given. rise to the
misapprehensions appearing in his
latest statement. It occurred while
Lord Balfour was in Washington,
and discussion concerning It was
had, in part. with him.
Shortly after our entrance in the
war. it became my duty to obtain a
statement of the commitments of the
various Allied governments for ma
terials under contract in the United
States. This statement was had from
]. T.. Morgan & Company who were
acting as fiscal agents for great Bri-
tain and other Allies.
Secretary McAdoo had not waited
for this report, before making loans
under the act Of Congress approved
April "a. 1917. with his usual promp-
titude. he had the presidents ap-
prevail for loan of 100000, 900 to
Great Britain, made on April Is. This
was followed by large advances di-
rectly made to France and Italy as
soon as the money could be found,
and before the first liberty loan was
floated.
meanwhile, it was clear that we
should know how much we were eX-
pr"ted to raise for our associates to
cover their needs in the United
States. When the Morgan statement
above mentioned was received, | re-
ported to the secretary that 1t show
ed over $170,000.0000 of contracts for
deliveries to Russia, but with Bril-
fish endorsement, Russia was at
that time represented only by a
charge d'affairs holding over from
the cZarist regime. He had no au-
thority then to sign obligations for
the provisional government of Rus
sia. Secretary McAdoo could not
lend mony without having CORES
ponding obligations of the borrow
ers. AS soon as the necessary au-
thority was given. loans were made
directly to the new Russian govern
ment without endorsement Of any
other government. The program of
purchases for Russia, both in the
United States and Great Britain, had
been made out by a commission sent
to st. Petersburg under the leader
ship of Lord Miner. While the COM
mitments of the big belligerents were
1T once taken over by them from
loans made directly to them, this
one. just mentioned. for Russia, was
left to the charge of Great Britain.
"Thcrc was no discussion as to Brit
!sh responsibility for the purchase
here of the other Allies. But as to this
Russian affair, it seemed to have been
so dominated by the British influence
Unnecessary, doubtless. in the confusion
of the timc) that Secretary McAdoo
felt it was wise to leave the account
as we found it.
Lord Balfour thought we should
have taken over this relatively small
amount. and l fancy his memory has
'"t"incd the impressions resulting from
the incident while he has not kept
pace with the other vastly largcd
transactions. in which his government
was not asked to assume any RESPONSE
bility whatever for Allied purchase
(othcr than British) in our markets.
Lord Balfour says we explained to
the American government that we
should be able to find all the dollars
necessary to purchase our own war ma
'"rinl without borrowing from the
United States or anybody else
certainly no such statement came
to my knowledge. On the contrary, tho
need of borrowing dollars for British
requirements here (and even in neutral
countries) was always to the fore in
my contact with the subject
"Purcha scS with American funds for
Allied accounts in neutral countries
were accomplished indirectly by TAX
ing up drafts in London offered in Wall
street by neutral holders from many
countries. British financial agents
bought these drafts with moneys lent
by us in order to protect sterling eX-
change rates. private rs we'll as public
drafts were than taken up.
1T is probable that some of these
drafts covered credits established by
Great Britain in favor of other Allied
governments. 1t was not possible to
distinguish the sources of the drafts
when originally purchased. insofar IS
Great Britain may have thus financed
France or Italy in nCutr;.l countries,
giving British obligations for thr roc-
cssary funds. to the United States
treasury. the act was voluntary on
their part.
AS the war progressed. loans were
negotiated in some neutral countries
by Great Britain and France separate
ly. and also separate advances were
made by US to Allies for protecting
their exchanges in New York
Lord Balfour seems to have con-
fused the supply Of British goods on
sterling loans to the Allies, with the
supply of American and neutral &c, dS
for which gold. or its equiva lent. was
necessary. / can sec nothing that we
could have done. that was not done,
except to finance Franco. italy, etc,
for their purchase of British goods
IN British markets That would have
supplied Great Britain with dollar cx-
change which otherwise was SO sadly
lacking for British purchases abroad
Perhaps Lord Falfour has in mind this
sort of transaction.
II do not remember that 1t was seri-
ously urged by the British treasury
oiiiciols until some time in March, 1918,
when n large part Of the existing debt
had already been incurred. That ar
ranEcmcnt would have the spirit Of
the act under which the president and
Secretary McAdoo so boldly discharg-
cd the heavy responsibility placed upon
them by the American people, nor was
1t necessary as the event proved since
the British government continued to
find sterling credits in paper money,
substantially to cover French. Italian.
Belgian, Greek and other purchases in
Great Britain.
Now that the two treasures have
settled the matter harmon6usly. it
would be better. in schooiboy language.
to let the cat die so it seems to me. :"
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