Evening star., 1940-02-06
Secret Report Tells
Ability Of British 10
Pay for U. 5. Goods
Similar Report, From
BuIIitt, to Reveal
Resources of French
BY LLOYD LEHRBAS,
Associated Press Stan Writer

Associated Press Stan Writer.
A secret document which might
guide a mathematician toward pre-
dieting the victor in Europe's war is
locked in an old-fashioned safe at
the State Department.
Joseph P. Kennedy, Ambassador
to Great Britain, recently brought
from London this comprehensive
confidential report analyzing the
monetary and economic resources
possessed by the British Empire in
the United States.
The information in the document
Is known only to the President,
some members Of the cabinet and a
select group of close -mouthed State,
Treasury and Commerce Depart
ment experts.
Analysis of the data will enable
American authorities to determine
Great Britain's maximum capacity
to pay for planes, munitions and
other war supplies in the United
States. 1t may provide a forecast
of the influence which those pur-
chases-already under way on a
large scale in planes, tools and a
narrow list of manufactured goods
may have on industry, agriculture,
labor and trade.
President Roosevelt has received
or will receive when Ambassador
William C. BuNitt arrives from
Paris-a similar confidential report
on French resources In this country,
May Help Avoid Pitfalls.
Precautionary policies based on
that information, plus daily cabled
reports from London and Paris, may
assist the United States to avoid
many economic pitfalls like those
which through their ramifications
affected every American after the
World War.
War goods already bought here by
the allies and orders placed and in
prospect show that Great Britain
and France plan to make purchases
running into millions of dollars, de-
pending on how long the war lasts
Some estimates place potential al
lied war orders in this country at
$1,000, ,OOo,OO0.
Government experts, forecasting
such huge sales, are. interested in
how Britain and France are going
to pay the bill Under the neutrality
law it's CASH -and-carry business,
and the British and French must
produce the cash.
What the allies resources are
provides one of the major questions
American authorities are tackling
by adding gold shipments, earmarked
gold bars and allied-owned stocks,
bonds, investments and dollar bal
ances.
Clues Are Available.
While Ambassador Kennedy's re-
port remains secret, clues are
available from other sources.
Winthrop w. Case, associate
editor of the Annahst, estimated
last April that Anglo-French gold
and other reserves here amounted
to between $9,5O0,0OO, 900 and $12,-
100000, 900, which he figured would
provide them with war supplies for
two years.
Large shipments of gold, acceIe-
rated after the Czecho- -Slovakian
crisis, have boosted earmarked gold
in the Federal Reserve banks, to
well over ,000,000,000.
The Commerce Department on
August 20 estimated total British
and French investments in the
United States, not including ear
marked gold, at between $780,
100000 and $4,000, ,000,0 900, somewhat
less than two-thirds as large as in
the years just preceding the 1914-18
World War.
The British estimate the war is
costing them $28, 100000 a day.
Questions Are Raised.
How much of that daily expendi-
ture will the British and French
send to the United States for war
supplies?
If the allies continue to ship gold
to pay for purchases here, what
affect will it have on American
fiscal policies?
If allies holdings of American
stocks and bonds are sold to obtain
cash, what effect will such liquida-
ton have on Wall Street?
# Great Britain is able to expand
its exports to the rest of the world
by more than one-third, to pay war
bills, how will this affect American
foreign trade?
VIII any of the belligerents or
neutrals, at the end of their cash
and liquid assets, seek loans in
this country as they did during and
after the World War, again raising
the explosive war debts question?
Studies Ordered.
To insure an informed approach
to problems posed by the war (and
perhaps to be aggravated by peace)
President Roosevelt has ordered
comprehensive studies of the entire
question by Government agencies.
In the State Department, special
war studies division, under Hugh
Wilson, former Ambassador to Ger
many, is digging into "a series of
measures and policies on the part
of both belligerents and neutrals
which Immediately affect the United
States"
Those measures and policies"
likewise affect other Government
departments because of their roper
cussions on domestic and foreign
trade, employment, tariffs, indus;
trial expansion, prices, the stock
market, land and sea transportation,
agricultural production and exports
bringing the war into the daily
life of the average American.