Evening star., 1939-09-30
Neutrality.
Continued From First Page.)

place subject to the jurisdiction OF
the United States for any person to
purchase or sell the bonds, secur-
tiles or other obligations of any
foreign government or political sub
division thereof or any organization
or association acting for or on be-
' half of a foreign government or
political subdivision thereof issued
after the passage of this act, or to
make any loan to such foreign gov
eminent, political subdivision, or
ganization or association, except. a
renewal or adjustment of existing
Indebtedness, while such govern
ment, political subdivision, organiza-
ton or association is in default in
the payment of it's obligations, or
any part thereof. to the Government
of the United States. Any person
violating the provisions of this act
shall upon conviction thereof be
fined not more than $4,000 or i'm
prisoned for not more than five
years, or both"
Section 2 of the act merely de-
fines the word person" to include
an individual, partnership, corpora
ton or association.
Ruling Clears Commerce.
1t was further recalled today
that shortly after the act passed
the Attorney Generals Office
rendered an opinion taking the
view that the loan restriction was
not intended to apply to currency,
drafts, checks or other ordinary
aids to banking and commercial
transactions.
Senator Pittman pointed out fur
ther today that the short-term
drafts used in export transactions
are negotiable commercial paper,
and generally regarded as cash
transactions.
Even the 90-day, short term credit
period, however, would not be
uniform feature of transactions
under the take title and carry" pro-
gram. In fact the basic principle
is cash-and-carry, with discretion
vested in the President to permit
90-day credits. The committee
further strengthened this financial
section OF the bill by providing that
whenever a belligerent is in default
on all or any part of a payment at
the end of 80 days, no further
credits would be allowed until
settlement was made.
While the existing law places an
embargo on shipment of arms and
munitions from this country, it
leaves American vessels free to con-
tlnue to sail into the submarine
danger zone carrying raw materials.
Bans American Vessels.
In proposing repeal of the en-
barge, the administration bill at
the same time prohibits American
ships from carrying articles of any
kind to belligerent. A belligerent
on either side could make purchases
IN this country. provided full title
to the goods was transferred to the
purchaser before shipment, and pro-
-v1ded the cargo was carried away in
a non-American vessel. In its re-
port to the Senate today, the For
eign Relations Committee summed
up its conclusions as follows:
The committee was of the opin-
Ion that the provisions in existing
law providing for an embargo uron
arms, ammunition and implements
OF war should be repealed and not
re-enacted in any form. Therefore,
such provisions are not carried in
the present proposed substitute.
THE committee is of the opinion
that the United States cannot main
tain its neutrality so long as such
embargo provisions remain upon our
statute books. It is contrary to the
accepted precepts of international
law, which prescribe that the bellig-
erent may purchase any articles or
materials in any neutral country.
Belligerents as well as neutrals have
relied from time immemorial upon
this law. It has for hundreds of
years been recognized by both bellig-
erents and neutrals to govern their
conduct toward each other and is
today so recognized by the govern
ments of world with the exception
of the United States. It was a
voluntary departure from interna-
tional law by the United States
Government and cannot in the
opinion Of the committee be admin
istered in an equitable or neutral
manner or will serve to maintain the
peace of the United States"
Report in Part.
The report summarized the main
features of the measure in part as
follows:
"The committee further reports
the purpose of the substitute is to