Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-01-15
It PATMAN CHARGES
N DENIED BY MELLON
STATE DEPARTMENT.
| WARNED OF LOAN
White Says Information Re-
garding Bolivia Was Re-
ceived in 1923.
~ the Associated Press.

By the As&OCikbsu FTess
The State Department was informed
In 1928 that loans TO Bolivia were I'M
wise, but one OF It's high officials said
today 1t had no authority to stop
Americans from lending money to for
eign countries.
Assistant Secretary Francis White
said the State Department had been
given this information from the Com
merce Department, but that the Secre-
tary of State felt that unless political
interests were involved he should take
no action. The loans are now in de-
fault
He gave the testimony to the Senate
Finance Committee during an inter
rogation covering loans to several
South American countries. Many Of
the questions centered around loan
to Colombia shortly after that coun-
try had granted valuable oil con-
cession to the Mellon controlled Gulf
Oil Corporation.
Had Denied Message.
White previously denied that State
Department officials knew of a message
to the Colombian Congress saying it
was essential the Barco oil concession
be granted In order that loans be OBJ
tanned from this country. He told the
committee he did not recall such mes
sage. Senator Johnson of California
had asked about it,
White also failed to recall another
message johnson asked about. This
one was described as also being from
President Olaya of Colombia and as
saying he had resumed negotiations
with the Gulf Oil Corporation over the
Barco concession because the American
legation wished him to do so.
Again Refuses Letters.
The Assistant Secretary again refused
to turn over to the committee, except
confidentially, pertinent letters ex-
between the department and its
Colombian legation. The committee de-
ferred voting on formal demand for
the documents.
In offering to let the committee mem
bers see the papers confldentially, White
said they referred to relations between
the United States and foreign govern
ment that should not be made public.
johnson refused to accept this, how
ever, pointing out it would be impossible
to cross examine White If the CORE
spondence were furnished under these
Senator Jones. Republican, of Wash
ington, asked If White was acting under
orders in refusing to turn over the cor
White replied In the affirmative but
said he was willing to take the re-
sponsibility Of refusing.
Follows 25-Year Practice.
Chairman Smoot asked If White was
not following the practice of the de-
partment for rs years.
Yes" White replied.
do I understand that 1t has been
the departments policy for rs years to
read diplomatic messages to interna-
tional bankers and deny them to the
Senate?" johnson asked.
THE telegram I gave in confidence
to Lancaster attorney for the bankersl
I give to you in confidence" White said.
Senator Harrison. Democrat, MissiS
sippi, said he wanted to make a motion
to demand the papers, but deferred the
motion until Smoot could summon other
members of the committee.
johnson pointed out that number
of banks were associated on the loans
and that one of Lancaster's law aSSo-
ciates was Gerard winston former AS
sistant Secretary of Treasury.
He served under Mr.. Mellon?" John
son asked
IT believe So" White replied.
Refuses Correspondence.
The State Departments version of
its activities with reference to the
Colombia loan was given to the COM
mittee yesterday by White and Free
man Matthews assistant chief of the
Latin American Division.
White flatly refused to comply with
Johnson's request that he give for
publication correspondence between the
and the Colombian lega-
ton bearing on the oil concession. He
continued in his refusal even after
Johnson had drawn from him state
ment that ne had read one of the
to New York banker
White testified the S4,000,000 loan
final installment of a $4,000, 900 loan
contracted for a year previous. The
fact of its payment 10 DAYS after the
granting of the Barco Oil concession
was a coincidence, he said
Senator johnson, however, succeeded
In obtaining testimony from Mr.. Mat
thewS to the effect the $4,000,000 loan
was held up by American bankers for
several weeks and finally granted after
the State Department had interceded.
The Colombian Legislature. during this
time, Mr.. Matthews said, was debating
restoration of the Barco Oil concession
to the South American Petroleum Co.
The latter is chiefly owned by the
Gulf Oil Co.