The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-01-21

Ask Inquiry on dollar
Diplomacy Backed by
State Department.
cABLEGRAM is REFUSED
StimSOn Given Three Days
by Senate to Produce
Message.
BY RAY TUCKER
Times stan Correspondent

BY RAY TUCKER
Times stan Correspondent
WASHINGTON, Jan. 2l.-The
spectacle of three Latin American
nations formally asking the United
States senate to investigate dollar
diplomacy as practiced by New York
bankers, with tacit approval of the
state department, confronted the
senate finance committee today.
The three countries-Chile, Peru
and Haiti-have requested senate
rial investigators to dig out all facts
regarding loans advanced by the
bankers in alleged return for vast
oil and nitrate concessions to Amer
lean interests allied with the flnan-
cierS.
BY an almost unanimous vote. the
Peruvian legislature has urged in
vestigation of the $415, 900 commits
sion" paid by j. 81 w. Selizman &
Co. to Juan Leguia, son of the de-
posed president of Peru.
Offer Information
The three nations also have prom
ised to furnish any information that
will throw light on alleged co-opera-
tons between bankers and groups
which have obtained concessions.
including the Guggenheim interests
in Chile's nitrate fields, and Stand
ard Oil in Peru.
Parallel efforts by the state de-
partment to obtain a loan for Co.
lombia and restoration OF the $1,000
100000 Barco oil concession to the
Mellon interests already have been
disclosed.
Although the state department
has been charged with aiding in
negotiations for loans and conces-
sions, it has been forced to serve
as an intermediary between these
three governments and the senate
committee.
In one instance, however, a Latin
American diplomat acted without
going through the usual diplomatic
channels, so great was. his concern
over the revelations.
Chilean Ambassador Acts
Apparently with the approval OF
his government, Ambassador Miguel
Cruchaga Tornocal asked the com
mlttee to turn up all possible data
on the Chilean situation.
When Senator Hiram johnson
Rep., CALI, sponsor of the inquiry,
urged Secretary of State Stimson
to forward certain questions to the
Chilean government, Ambassador
Tornocal took time by the forelock
and transmitted them after reading
the newspapers. 1t is understood
the Chilean government will comply
in time for the next meeting of the
committee Monday.
Besides waiting for this data, the
committee has given Stimson three
days to answer its unanimous reso-
luton calling on him for diplomatic
correspondence dealing with his
efforts to speed up loan to Co
lombia, at time when the Barco
concession was in controversy.
Stimson has declined to produce
any references to the oil grant,
although he gave the committee
extracts bearing on other matters.
and read the withheld portions to
the bankers representatives.
Concession Preceded Loan
Commenting on the state depart
ment attitude, johnson said it was
absurd and hard to understand. He
pointed out that there should be nc
withholding of documents if there
were nothing to conceal. The docu-
ment wanted is a telegram from
Jefferson Caffery, American minis
ter to Colombia, in which he regis
tered protest against the bankers
failure to forward the money agreed
upon.
1t quoted President Enrique Olaya
Herrera as saying he chad done
everything the bankers wanted. in
Guiding restoration of the Barco
concession, and passage of Favorable
oil legislation"
1t has been brought out that the
S4,0Oo,O00 was advanced ten davs
SSter the Colombian Legislature
ratified Herera's valuation of fhe
concession.
May Recall Witnesses
Meanwhile, the committee has re-
celVed information that officials OF
several bankrupt banks in small
towns would like to tell their storv
OF foreign bond flotations.
Several instances brought In the
attention of Senator johnson are
reported to show that a contribute
ing factor to failure was the exces-
slve amount Of defaulted and de-
preciated foreign bonds these small
institutions felt compelled to buv
from the so-called international
bankers" Johnson hopes to pre-
sent this side of the picture before
he concludes the inquiry.
Inc senator also may investigate
reports that New York banks shift
ed their holdings Of German short
term credits before testifyings on
this point before the committee As
a result Of a reported agreement
the banks pooled their holdings 81
that the largest amount held bv
one institution was ST. 600 900.
johnson has information that
various institutions holdings were
much larger few weeks before the
inquiry began, and he may recall
some Of the witnesses who testified
on this point.