Evening star., 1939-07-27
Treasury May Act
BY the Associated Press.

''SS/ "'N/ TSs
BY the Associated Press.
Secretary Morgenthau announced
today the Treasury was studying
means of backing up Secretary
Hull's termination of the Japanese
commercial treaty by action involv-
ing United States purchases of
japanese gold, silver and merchan-
disc.
Mr.. Morgenthau explained that
the announcement of abrogation
came before he had time to decide
his course of action, but since re-
porters are asking me about it, of
course I will look into it."
He gave no hint of what kind of
action would be taken.
However, 1t is known that, for one
thing, the Treasury is studying al
legged japanese subsidies of cotton
cloth exports to the United States
with view to imposing penalty
tariff duties against the cloth.
Treaty Abrogated Last Night.
Action to terminate the 1911
treaty of commerce and navigation
was made public last night by the
State Department. This cleared the
way toward an embargo. or other
possible economic action, against
-pan.
The American Governments in
tention was expressed in a note
sent by Secretary Hull, with the
approval Of President Roosevelt. to
japanese Ambassador Kensuke
Horinouchi. The note said the
United States would expect the
treaty to expire in six months.
Expiration would come on Janu-
airy 26. Thus when Congress meets
in January it may proceed with
legislation for an embargo on the
shipment of raw materials to Japan,
any legal obstacle having been re-
moved by cessation of the treaty.
Will Look at Penalty Duties.
Mr.. Morgenthau's press confer
ence statement indicated some move
by the executive branch of the Gov
ernment was possible before that.
The Treasury Secretary said that
I'VE will take fresh look at the
countervailing duties"
The Treasury had a potentially
more potent weapon in its gold and
silver buying policies.
In the last two years Japan has
sold the Treasury $415 ,209 ,648 worth
of gold and $4,202 1856 worth of sill
yer.
Even though Japan might be
barred from the purchase of war
materials in this country, tine dollars
1t receives by these sales OF precious
metals furnishes important resources
for the purchase of materials else
where in the world where American
currency may be preferred to Japa-
nese money.
May Act on Silver.
Mr.. Morgenthau was asked whether
special action might be taken against
japanese shipments here of silver
confiScated from the Chinese. He
declined to answer this question, ex-
planning that the present policy of
the Treasury is not to inquire into
the source of any foreign silver
which comes into the country.
China, which used silver as its
monetary base until few years ago.
is one of the principal holders of the
White metal, and has been one of the
principal sellers of it to the United
States. Chinese shipments stopped,
however, after the Japanese block
AIDED Chinas ports.
Mr.. Hull's action, announced last
night several hours after the Japa-
nese Embassy here had been noti-
fed, surprised the Capital.
1t followed by only a few hours
the decision of the Senate Foreign
Relations Committee to defer con-
sideration of the Vandenberg reso-
luton calling on the Government
to terminate the treaty.
Way Open for Congress Action.
Secretary Hull, through his note,
opened the way for the committee
chairman, Senator Pittman, Demo-
crat, of Nevada, to obtain action at
the next session on the embargo
resolution which he recently intro
duced. The United States is Japans
principal source of war materials
and Senator Pittman would exclude
only agricultural products from the
embargo.
Senator Pittman said Of Mr.. Hulls
note:
Il think it's wise and justifiable
act"
Senator Vandenberg, Republican,
of Michigan said he was very glad"
to find himself "in agreement with
the State Department"
conditions in. the Far East in
1899 are SO manifestly different from
conditions in 1911 as respects pro-