372 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 By Mr. WEST: A bill (H. R. 5454) granting an-increase · 114. By Mr. RUDD: Petition of the Central Union Labor of pension to Ida Stough; to the Committee on Invalid Council of Greater New York, for the modification of the Pensions. Volstead Act so as to permit the legal manufacture· and sale By Mr. WHITE: A bill legislature on March 10, 1884. Mr. Davis was eighteenth amendment; to the Committee on the Judiciary. then 76 years of age. 113. By Mr. PMKS: Petition of Roy Gardner Post, favor­ This speech was delivered in .the hall of the house of repre­ sentatives Qf the old capitol, in which he had twice b~en elected ing legislation for the immediate payment of the balance of United States Senator. Pale and emaciated, Mr. Davis entered the adjusted-service certificates; to the Committee on World ball leaning neavily upon the arm of Governor Lowry, followed War Veterans' Administration. by the supreme court judges, State otncials, military, a.nd citizens.

I 1931 CONGRESSIONAL RECORD-HOUS~ 373 This speech was made 47 years ago. I had a stenographer take "I am glad to be here in this historic city, this city forever 1t down, and Mr. Davis, at my request, read and approved it. It memorable because of the heroic service. in which victor and van­ was printed that afternoon in my paper, the New Mississippian. quished alike showed such splendid courage, such splendid fealty Its circulation was limited, the Associated Press having no agency to the light as it was given to each, and before the Civil War at Jackson at that time. Later it was taken from my files and Mississippi's sons had shown that they knew how to fight placed in State histories. \ "It was from Vicksburg that a company came of that Missis­ Standing erect and surveying the vast· throng which he faced, sippi regiment which won undying renown in the Mexican war having been introduced by Lieutenant Governor Shands, Mr. Davis under the gallant leadership of its colonel, who afterwards became said: the favorite son not only of Mississippi but of all the South- DAVIS'S FAREWELL SPEECH Jefferson Davis." · •• Friends and brothers of Mississippi, in the briefest terms, but President Roosevelt, who rode through the national park with with the deepest feeling, permit me to return my thanks for the Gen. Stephen D. Lee, also said: unexpected honor you have conferred upon me. A waif on the "And General Lee read to me that noble inspiration on the political sea, I have in my secluded home by the seashore observed Pennsylvania monument, an inscription that should make the with intense interest all passing events affecting the interest or heart of every true American thrlll : honor of Mississippi, and I have rejoiced to see, in the diversifica­ "'Here brothers fought for principle; here heroes died for their tions of labor and the development of our new sources of pros­ country; and a united people will forever cherish the precious perity and the increased facilities of public education, reason to legacy of their noble manhood.' hope for a future to our State more prosperous than any preceding " What other war? " asked President Roosevelt, " is there of era. The safety and honor of a republic must rest upon the which we can say that before the generation that fought · it had morality, intelligence, and patriotism of the community. died away the whole country rises to feel the same triumph alike "We are now in a transition state, which is always a bad one, to those who fought so valiantly for what they With equal sincerity both in society and nature. What is to be the result of the thought to be right and lost?" changes which may be anticipated it is not possible to forecast, The lives of Jefferson Davis and Abraham Lincoln show a re­ but our people have shown such fortitude and have risen so markable paralle~. They were born 14 miles apart in Kentucky, grandly from the deep depression inflicted upon them that it is and Davis and Lmcoln Counties in Mississippi are only separated fair to entertain bright hopes for the future. . by the country of Lawrence, named for the intrepid captain who "Sectional hate, concentrating itself upon my devoted head, said: " Don't give up the ship.'' deprives me of the privilege accorded to others in the sweeping Davis was born in 1808. Lincoln in 1809. In childhood Lincoln expression of • without distinction of race, color, or previous con­ went to Indiana and then to Illinois. Davis came to Mississippi, dition,' but it can not deprive me of that which is nearest and Davis was a second lieutenant in the Regular Army of the Black dearest to my heart, the right to be a Mississippian; and it is Hawk War in 1852. Lincoln was a captain of volunteers. They with deep gratification that I received this emphatic recognition began their political careers the same year, 1844. Lincoln was a of that right by the representatives of our people. Reared on the presidential elector for Clay. Davis for Polk. Both served in Con­ soil of Mississippi, the ambition of my boyhood was to do some­ gress in 1845. Each was called to preside over his respective gov­ thing which would redound to the honor and welfare of the State. ernment the same year-Davis, February 6, 1861; Lincoln, March 4, The weight of many years admonishes me that my day for actual 1861. Lincoln was not a Cabinet officer. Davis was Secretary of service has passed, yet the desire remains undiminished to see the War in the Cabinet of Franklin Pierce. Lincoln was not a United people of Mississippi prosperous and happy and her fame not States Senator. Davis was the Cicero of the Senate; and his fare­ unlike the past, but gradually growing wider and brighter as well address to that body when Mississippi adopted the ordinance years roll by. of secession is an American classic, as is also the Gettysburg speech of Lincoln. The Davis speech Will live as long as grass grows " It has been said tbat I should apply for pardon. But as and water The Gettysburg speech of'Ltncoln will" live until repentance must needs precede pardon, I have no complaint to runs. make that pardon has not been granted to me. Remembering as languages are dead and lips are dust.'' I must all which has been suffered, all which has been lost, dis­ The bullet of a madman stilled the great heart of Abraham Lin­ appointed hopes and crushed aspirations, yet I deliberately say, coln; and the poisoned chalice of sectional hatred was pressed 1f it were to do over again, I would again do just as I did in April, upon the lips of the prostrate South. Speaker Cannon, discussing 1861. No one is the arbiter of his own fate. The people of the with me the horrors and sorrows of reconstruction-when the Confederate States did more in proportion to their numbers and furies of peace were worse than the terrors of war-,said, " I some­ means than was ever achieved by any people in the world's history. times think that when those drastic laws were passed Providence Fate decreed that they should be unsuccessful in the effort to must have been asleep." maintain their claims to resume the grants made to the Federal THE MEMORIES TROOPED Government. Our people have accepted the decree; it therefore Jefferson Davt.S died in New Orleans December 6, 1889. He was behooves them, as they may, to promote the welfare of the temporarily interred in Metairie Cemetery, New Orleans, and buried Union, to s.how to the world that thereafter as heretofore the in Hollywood Cemetery, Richmond, Va., May 31, '1893. I was named patriotism of our people is not measured by lines of latitude and by Governor Lowry an honorary pallbearer for Mississippi at the longitude, but is as broad as the obligations they have assumed funeral of Jefferson Davis. As the vault closed over the mortal and embrace the whole of our ocean-bound domain. Let them remains of the immortal chieftain of the Confederacy-the fortunes leave to their children and children's children the grand example of which my father had followed for four years, carrying a war­ of never swerving from the path of duty, and preferring to return maimed hand to his grave--how the memories trooped. good for evil rather than to cherish the unmanly feeling of Standing With bowed and uncovered head I saw Jefferson Davis revenge. But never question or teach your children to desecrate on the sanguinary fields of Mexico. I saw Jefferson Davis write the memory of the dead by admitting that their brothers were "Buena Vista" in letters of living fire on the escutcheon of our wrong in the effort to maintain the sovereignty, freedom, and country. I read the war-tossed compass from Bull Run to Ap­ independence which was their inalienable birthright--remembering pomattox. I saw ~efferson Davis president of a "storm-cradled that the coming generations are the children of the heroic mothers nation that fell." I saw Jefferson Davis in a dungeon with his whose devotion to our c.ause in its darkest hour sustained the !rail limbs cruelly manacled and I saw the irons stricken off strong and strengthened the weak. I can not believe that the through the efforts of a noble-hearted Greeley. I saw Jefferson cause for which our sacrifices were made can ever be lost, but Davis as a guest of the Mississippi Legislature in 1884 tn the rather hope that those who now deny the justice of our asserted house of representatives of the old capitol surrounded by those claims will learn from experience that the fathers builded Wisely who had loved him and trusted him and followed him. and the Constitution should be construed according to the com­ AB I marveled at the wonderful career of this remarkable man­ mentaries of the men who made it. a " waif on the political sea," because of his undying conscientious "It having been previously understood that I would not attempt convictions-my reverie was broken by a concord of sweet sounds. to do more than to return my thanks, which are far deeper than With moist eyes I located the cadence at the top of a majestic it would be possible for me to express, I will now, senators and magnolia. A mocking bird was singing o'er his grave. representatives, and to you, ladies and gentlemen, who have hon­ ored me by your attendance, bid' you an affectionate and it may be a last farewell.'' MR. Wn.SON'S ADDRESS While Mr. Davis was speaking I recalled his concluding words in (From Jackson Daily News) his Rise and Fall of the Confederate States, published in 1881- prophecy then; history now: The address delivered by Hon. Edgar S. Wilson, Nestor of Mis­ " In asserting the right of secession, it has not been my wish to sissippi journalism, at the unveiling of the statue of Jefferson incite to its exercise. I recognize the fact that the war showed it Davis in the Hall of Fame at Washington, Tuesday afternoon, was to be impracticable, but this did not prove it to be wrong; and, a masterly delineation of the life and character of the great Con­ now that it may not be again attempted, and that the Union may federate chieftain. promote the general welfare, it is needful that the truth, the For more than a half century this veteran writer and publicist whole truth, should be known, so that crimination and recrimi­ has watched the ebb and fiow of public life in Mississippi and is nation may forever cease, and then, on the basis of fraternity and still going strong in his profession. He has intimately' known faithful regard for the rights of the States, there may be written more men of affairs in our Commonwealth during that period than on the arch of the Union • Esto perpetua.' " any living person-known them only as 1t is possible for them to be known by a newspaperman with a keen eye and discerning ROOSEVELT LAUDS DAVIS judgment. It was his proud privilege to enjoy the personal friend­ In a speech at Vicksburg, Miss., October 21, 1907, President ship o! Jefferson Davis during the last years o! the great warrior­ Theodore Roosevelt, SC)n of Martha Bulloch, of Georgia, and Theo­ statesman, and b1s vivid description. of the farewell address of Mr. dore Roosevelt, of New York, half southern, half northern. and Davis, delivered before the Missi.ssipp1 Legislature 1n 1884, 1s a all American, said: valuable contribution to the State's histor-y. Nearly two score 374 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 years ago he served as honorary pallbearer when the body of Jef­ Mr. UNDERHILL. I think the position of the gentleman ferson Davis was consigned to mother earth and h1s beloved face forever hid from the sight of men. is sound. I think the request of the gentleman from New It was fitting, therefore, that Mississippi's oldest journalist now York [Mr. LAGUARDIA] is reasonable. I think the position in active service should have been chosen to deliver the principal of the former chairman of the Committee on Banking and address on this memorable occasion at the Capital of the Nation. CUrrency [Mr. McFADDEN] is right, but I do not wish the Like a true newspaperman, his speech carried the merit of brevity, but what he said is worth enshrtning in history. House to get the idea tliat I am playing any favorites in these objections. Personally I have no objection. It is nothing PERl'aiiSSION TO EXTEND REMARKS out of my pocket, but I know that the public who reads this Mr. LAGUARDIA. Mr. Speaker, I ask unanimous consent RECORD is satiated and fed up on a lot of silly stuff and to proceed for two minutes so that I may inform the gentle­ advertising that goes into the columns of the REcoRD. man from Massachusetts of a unanimous-consent request I will not object to this proposition. which I desire to prefer. Mr. The SPEAKER. The gentleman from New York [Mr. Mr. SANDLIN. Speaker, I demand the regular 'order. LAGUARDIA] asks unanimous consent to proceed for two min­ Mr. BLANTON. Will the gentleman from Louisiana with- utes. Is there objection? hold his request for the regular order for a minute? There was no objection. The SPEAKER. The gentleman from Louisiana has called Mr. LAGUARDIA. The matter of foreign securities pur­ for the regular order. chased in this country is receiving a great deal of attention Mr. MAPES. Mr. Speaker, reserving the right to and study just now. The New York American has conducted object--- a very thorough survey, in which, in a series of articles, The SPEAKER. The gentleman from Louisiana has asked they have listed all of the securities. They have listed the for the regular order. The regular order is: Is there securities that have been wiped out; they have listed the objection? shrinkage. It is an informative and useful survey, and this Mr. MAPES. Mr. Speaker, reserving the right to object, matter will occupy four or five pages of the RECORD. I I would like to suggest to the gentleman-- would not make this request if the information were other­ The SPEAKER. The gentleman from Michigan is famil­ wise available at this time. There is a great deal of dis­ iar with the rules of the House. The gentleman from cussion of these foreign securities, and I think it would Louisiana has demanded the regular order. The regular be in{ormative to the Members who are studying this order is: Is there objection to the request of the gentleman question. from New York to extend his remarks? I therefore ask unanimous consent, Mr. Speaker, to print Mr. BLANTON. Mr. Speaker, for the present I object. in the RECORD a series of articles on foreign securities, the result of a survey made by the New York American. THE SOUTH'S INDUSTRIAL OUTLOOK The SPEAKER. Is there objection to the request of the Mr. HARE. Mr. Speaker, I ask unanimous consent to ex­ gentleman from New York [Mr. LAGUARDIA1? tend my remarks by inserting in the RECORD a resume of Mr. UNDERHILL. Mr. Speaker, reserving the right to the address delivered by Dr. Julius Klein, Assistant Secre­ object, I want to make myself perfectly clear on this matter. tary of Commerce, before the Chamber of Commerce of I do not believe we can differentiate between the Hearst Birmingham, November 4, 1931. papers, the American, or the New York Times, or the Jack­ The SPEAKER. The gentleman from South Carolina sonville Courier, if there is such a paper, or any other paper. asks unanimous consent to extend his remarks as indicated. Information undoubtedly will be available to members of Is there objection. the committee who have this matter in charge. Any Mem­ There was no objection. ber of the House can secure the information by calling at The address is as follows: the office of the committee. If the bars are let down in one ADDRESS BY DR. JULIUS KLEIN, ASSISTANT SECRETARY OJ' COMMERCE instance, we .can not be consistent and we can not be fair One of the outstanding features of our national economic life to the other Members who are asking for the same privilege. during. these postwar years has been the truly amazing industrial · The RECORD was established for a specific purpose. In advance of the Southern States. To depict adequately the impres­ ·recent years the privileges have been so abused, not so much sive proportions of this achievement one need not resort to :flights of oratorical fantasy; the mere recital of a few pertinent figures by this body as by another body, that I hope the present affords amply eloquent and vivid confirmation of this fact of the Speaker, who has some definite idea on the subject, will gratifying diversi.fl.cation of southern economic activity-the embody them in some agreement or legislation whereby the broadening out of the basis upon which the States from Virginia REcoRD may be protected. to Texas are building the structure of their material well-being. Let it be noted also that this spectacular episode is not simply a Mr. McFADDEN. Will the gentleman yield? cause for exhilarating laudatory comment. It goes Without say­ Mr. UNDERHILL. I yield. ing that commendation has been abundantly earned by these Mr. McFADDEN. I may say to the gentleman that the achievements. But they also involved truly · formidable responsi­ bilities on the part of all those in charge of the multitude of information which the gentleman from New York [Mr. LA­ Industrial enterprises entering into the composite record of accom­ GUARDIA] proposes to introduce is apparently the only avail­ plishment; responsib111t1es for far-sighted. planning, which is able information there is on the subject. For the benefit doubly necessary as the economic order of southern communities of the gentleman from Massachusetts and the other members becomes increasingly complicated; responsib111ties for watchful readjustment in the important field of labor relationships which of the House may I say that I have been trying to get from are so vital a part of any new industrial expansion. the Federal Reserve Board, the Secretary of the Treasury, But first let us turn to some precise measurements as to the and the State Department this information, and it is not extent of this new industrial growth in the Southern States.· available. I think it will be beneficial to this particular sub­ During that dramatic decade which culminated in the record height of 1929 the value of manufactures for the Southern States ject to have this material before the House at this time. increased almost exactly 20 per cent, whereas in the rest of the Mr. RANKIN. Will the gentleman yield? country the growth was but 11.9 per cent. Indeed, the value of Mr. UNDERHILL. I yield. southern manufactures in 1929, the latest available data, exceeded Mr. RANKIN. Let me say to the gentleman from Massa­ $11,600,000,000, which was two and three-fourths times the total value of all southern farm and plantation products, including chusetts that so far as I am concerned I have a resolution livestock. which I am going to introduce asking for a thorough in­ One of the larger faCtors contributing to this development was vestigation as to who holds these foreign securities, and so the growth 11'1. the manufacture of cottol1 textiles. Whereas 1n the forth. Personally I see no need of hurrying it, if the gentle­ Northern States the consumption of raw cotton fell during that decade by more than 51 per cent, the consumption by the southern man wishes to expedite this matter, but I think we ought m1lls increased 31 per cent. This acceleration of cotton manufac­ to go extremely slow and investigate it from every angle. ture is, of course, to be expected, but there need be no apprehen­ If the administration at the other end of the Avenue wishes sion that it might be so overstressed a.s to unbalance the general industrial set-up of the South. Indeed. cotton goods to-day com­ us to pass on this thing, does the gentleman not think we prise but 8 per cent of the total value of fabricated southern ought to have this available information for all _the products. Furthermore, nearly three-quarters of those cottons are Members? 1ndustria.llines and therefore not subject_to the dangerous vagaries 1931 CONGRESSIONAL RECORD-HOUSE 375 of style changes which have been so disastrous to textile-manu­ these conspicuously are tung oil, skimmed milk, cellulose ·1n vari­ facturers of wearing-apparel fabrics. ous forms, and other once scorned raw mater1aJ..s, which the magi­ One important aspect of this industrial growth was the prox­ cians of the chemical laboratory have revealed as of decided value imity of abundant fuel on. The widespread exploitation of the in the development of new industrial products. petroleum resources of Texas and Oklahoma accounts largely for . the growth in southern mineral production figures by no less ERNEST R. ACKERMAN than 59 per cent since 1920, as against but 16 per cent in the rest Mr. SHREVE. Mr. Speaker, I ask unanimous consent to of the country. extend in the RECORD a resolution which I offered this morn­ Still another interesting index of this onward sweeping indus­ trial advance is the figure on the increase in wage earners, which ing before the Committee on Appropriations and which was for the Southern States during the years 1919-1929 was ,10 per unanimously adopted by that committee. It is in relation cent, whereas for the rest of the country it was 4.7 per cent. Evi­ to the death of the late Hon. ERNEST AcKERMAlf. dently the widespread introduction of labor-saving machinery of The SPEAKER. Is there objection to the request of the latest patterns and molSt advanced design in southern manufac­ turing areas has not involved any serious technological unemploy­ gentleman from Pennsylvania? ment but has, on the contrary, contributed to the growth of the There was no objection. total factory pay rolls. The resolution adopted by the House Committee on Appro­ An impressive bit of evideuce of this spread of new, up-to-date equipment in southern industry is the fact that whereas in the priations is as follows: United States, exclusive of the South, the increase in electric­ Whereas on the 18th day of October, 1931, Hon. ERNEsT R. ACKER­ power production during 192Q-1930 was 106 per cent, the figure MAN, formerly a loyal and honored member of the Committee on below the Mason-Dixon line was no less than 191.5 per cent. This Appropriations of the House of Representatives, entered upon the figure does not reveal a profoundly significant factor in that life eternal: Therefore be it phenomenon, namely the spreading of industry into smaller com­ Resolved, That in his decease the Nation has been deprived of a munities as il. result of the ever-widening network of electric­ courageous and patriotic servant; his colleagues in the House o! power lines. Comment is scarcely necessary as to the deep social Representatives, and particularly his associates upon the Commit­ significance of that trend of development away from the larger tee on Appropriations, have lost a faithful coworker and coun­ urban centers. It offers definite encouragement to the healthy sellor; and his friends have sustained a personal sorrow abated diversification of productive activity in rural districts throughout only by the memory of his virtues; be it further the South, where overdependence on a single source of income had Resolved, That the committee extend to Mrs. Ackerman their all too frequently resulted in a hopelessly unbalancted situation, genuine and heartfelt sympathy in this bereavement; be it further with disastrous results whenever that lone asset became impaired Resolved, That these resolutions be made a. part of the records for any reaso;n. of the committee and a. copy thereof be transmitted to Mrs. A similar valuable contribution is being made by the spread Ackerman. of oil and gas pipe lines across many hitherto sparsely developed • TH.E PRESIDENT'S MESSAGE sections of the South. Thus the projection ·of power and fuel is laying a groundwork all over the South for substantial future Mr. RAINEY. Mr. Speaker, I move that the House re­ industrialization in countless rural districts. solve itself into the Committee of the Whole House on the Another convincing indicator ·of the expanding industrial or­ state of the Union for the further consideration of the ganization of the South is the growth of construction actiyity, which is, of course, one of the country's leading industries. The President's message. value of building contracts awarded increased about 12 per cent The motion was agreed to. from 1923 to 1930 in the Southern States. During the same Accordingly the House resolved itself into the Committee period the value of building contracts in all States for which data are available, excluding the Southern States, increased 8 per of the Whole House on the state of the Union for the fur: cent. ther consideration of the President's message, with Mr. . Equally significant, perhaps in certain respects even more so, LoZIER in the chair. bas been the notable increase in the registration of trucks and Mr. PURNELL. Mr. Chairman, I yield 30 minutes to the road tractors, which has grown in the past 10 years in the South [Mr. by nearly 570 per cent. This is more than double the rate for gentleman from illinois WILLIAM E. HULL]. · the rest of the country, for which the figure was 260 per cent. THE SWEDISH LIQUOR CONTROL SYSTEM In aviation likewise the South's advance has been at a greater pace on various questions. Southern airports and landing fields Mr. WILLIAM E. HULL. Mr. Chairman and gentlemen have increased in number by 21.5 per cent in the past two years, of the committee, on account of the economic and moral as compared with 18 per cept in other States. This leadership conditions of the country I decided that it was my duty as is doubtless infiuenced in part· by favorable climatic conditions a man who understood the liquor business to go to Sweden and also by the vital geographic factor of the proximity of the important routes to the Caribbean, Mexico, and the rest of Latin and study what is known as the Swedish system-the Bratt America. system. So on July 3 I embarked on the Kungsholm and No industrial expansion of our time can face the future with went to Goteborg, arriving there on Saturday night. I confidence unless it is being accompanied by a thorough com­ decided that the best thing for me to do was to go out to prehension on the part of its leaders of the vast potentiallttes of the new technology in chemistry; in physics, and in all of the one of the principal parks, where there was a large congre­ other lesser fields of science contributory to industrial growth. gation of Swedish people dining and dancing, I went there Indeed, some of the great industrial ac~evements of the South for the purpose of finding out whether by imbibing liquors in recent years stand as most impressive monuments to this new technology. Among these might be mentioned the development they were becoming intoxicated to · any degree. I found of rayon production, of numerous chemical products, impregnated there over 300 people dining in one dining room, all of them .woods, a wide range of synthetics, and many other achievements imbibing beer and wines, and I did not see a single one in­ of postwar scientific advance. In this connection it 1s especially toxicated. I went from there to a dancing parlor, where significant that the enrollment in southern colleges, universities, and professional schools rose during 192Q-1928 by no less than 85 there were 500 dancing and drinking beer and wine. per cent, as compared with 73 per cent for the United States There I saw no intoxication. Then I started up through the exclusive of the South. Enrollment in normal schools and teach­ country of Sweden. ·I went as far north as Falun. Falun ers' colleges rose by 81 per cent during the same time in the is the great copper city of Sweden. If one were to find Southern States as against less than 63 per cent elsewhere in the Nation. drunkenness in any part of Sweden he would expect to find No mdustrial growth is secure these days unless it springs from it there, but, to my great surprise, after staying there three well-grounded technical training. Its future is strictly contingent days, I did not during that time find a single drunken per­ upon alert vigilance on the part of factory staffs as to every new son in the city. Then I went on down through the farming discovery in the limitless realms of scientific endeavor. Herein the South would seem to be thoroughly prepared and fully ap­ districts until I arrived at Stockholm, where I desired to preciative of the requirements for the future. This, of course, is study the liquor control law of that country. particularly essential during times of drastic readjustment such as The way it is handled in Sweden is this: First of all, the the present. The need for the fullest exploitation of the possiblll­ ties of by-product s has never been more acute than it is to-day. alcohol is made in small distilleries scattered over the More than one great industry in the past has owed its strength country in the rural part of it. The -alcohol is principally directly to the shrewd exploitation of apparently waste materials. made of potatoes and barley. It is doubly gratifying, therefore, to note that with the lowering of There is a prohibition against molasses, grains, or po­ prices for such great southern staples as cotton and lumber there bas been an intensified, determined campaign to broaden the mar­ tatoes from any other country coming into Sweden for kets not simply for the original commodities, but also for their that purpose, so that the farmers have the advantage of many by-products-for cottonseed hulls, linters, for sawdust, insu­ selling their products to make the alcohol of the nation. I lating material, chips, and many others. carried on this line of study until I got into Stockholm. At The increasing determ.i.Iiation to diversify agriculture has brought to these new industrial plants in the South many raw Stockholm I found' that all of this raw alcohol, made up materials which previously had to be sought far afield. Among through the country, was shipped there and placed in a 376 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 redistilling plant and there it was made into a high-grade been put in operation so that the rich man will have no spirit and . rectified into their national drink, called aqua advantage over the poor man. vitre, potato brandy, and Swedish punch. I went through From what I could see of the system they have every chink that plant and discovered that they used the same processes closed up, and it is the best system in the world. It has in· that country that before the war we used in this country. been in operation now since 1915, and I can positively say Then I studied their brewing plants. I went into a Muni~h that the law is one that does control the liquor business. brewery and there I found they make their beer of barley. Mr. STAFFORD. Will the gentleman yield? They polish the barley first, and the finished product is Mr. WilLIAM E. HUlL. Let me conclude and then I placed in vats, where it is kept for three months, after shall yield to the gentleman. which it is distributed. This beer is made of 3.2 per cent Gentlemen, since my return home I thought it was my alcohol by weight, so it is not intoxicating. They claim duty, regardless of how it might affect me politically, to that in all of their literature. They sell to the people in bring before the Congress of the United States something any quantity they want to buy it. It is sent to their homes that I think may possibly be passed in the Congress of the in cases usually containing 20 short pints, ·and they buy that United States. I have gone the limit in studying the situa­ beer for 4.3 cents per bottle, or $1.07 of our money per tion. I have studied every angle of it. There is nothing we case. can do on hard liquor in this country with the eighteenth The way the hard liquors and wines are distributed is amendment operative; otherwise, I would advance a bill to this: They have what are known as distributing stores. adopt the Bratt system. So I have taken up the one thing There are some 36 of these distributing stores scattered that they have impressed upon their own people, and that is throughout Stockholm, and these stores are equipped like beer. Consequently, I have introduced such (( bill, and I our banks. They are beautifully furnished. The way in desire now to deliver a speech that I have prepared upon which the people get their liquor from the stores is this: that subject. They are furnished with a mat book about the same as our Mr. SEGER. Will the gentleman yield? bank books. They are entitled, per month, to 4 liters, which Mr. WILLIAM E. HULL. I yield. is a little more than 4 quarts, and the wife is entitled to 2 Mr. SEGE.R. The gentleman made the statement that liters, making a total of 6 liters for a family. They can in Sweden one family was entitled to 6 liters---during what go to the store where they are registered and get their period of time? liquor and take it home; that is, all of the bottles at one Mr. WTI...LIAM E. HULL. For one month. time or one bottle if they so desire. By doing this the Mr. COX. Will the gentleman yield? liquor is carried to their homes. The beer is sent direct Mr. WILLIAM E. HULL. I yield. from the brewery to the home. Mr. COX. The gentleman, of course, believes that the The "system," as it is called, is operated under the di­ measure he advocates will have all of the beneficial effects rection of the Government, but by private capital sub­ that he states. Has not the gentleman overlooked the fact scribed by the Swedish people themselves. This capital that a majority of the States have a prohibition law far can only draw 6 per cent. So any profits that accrue in more strenuous than the Federal law? the business naturally go to the treasury of the state. Mr. WTI...LIAM E. HUlL. I realize that. The wines and liquors they buy are bought at a lower Mr. COX. Then those States _would have to change their price than in any other part of the world, because the sys­ laws. tem buy in such large quantities, and the result is you can Mr. WILLIAM E. HULL. Not necessarily. I think there buy a bottle of wine for 75 cents in one of these stores in are enough States to take the 66,000,000 barrels of beer, Sweden that would cost you one dollar and a half in Paris, which would give us $330,000,000. and it is the same quality of wine. Mr. LINTHICUM. Will the gentleman yield? The result is they have educated the Swedish people to Mr. WILLIAM E. HULL. I yield. drink wine and beer. At one time the Swedish people used Mr. LINTIDCUM. Does not the gentleman think that 90 per cent hard liquor, but to-day they are using 40 per he has estimated the tax too low at $5 a barrel? cent hard liquor and 60 per cent wine and beer. This has all Mr. WILLIAM E. HULL. I put it there because I do not been brought about by reason of this system. believe we oUght to put such a tax on it that it would be I want to say to the Congress of the United States that prohibitive to the poor man. You could raise it to $8. It from what I could see of the operation of this system, it is used to be $1 and then $2. the best system I have ever seen, and I have been in the Mr. LINTIDCUM. That would make the beer cost about business for 28 years. $12 a barrel, if you put the tax at $8. The hotels can sell a certain amount of hard liquor with LEGALIZATION OF MANUFACTURE OF 3.2 PER CENT BEER BY WEIGHT the meals they furnish. They call it schnapps and you Mr. WILLIAM E. HULL. Mr. Chairman and gentlemen, can go into a hotel or restaurant that has a permit and get I am for beer brewed from the products of the American two schnapps, which is an ounce and a quarter of hard farm. There is no industry in these United States of Amer­ liquor, in each glass, to be served with a hot lunch, or at ica suffering so greatly from continued depression as the night you can get three schnapps with a hot dinner. agricultural industry of the country. · You may ask why they do not cheat. The reason they will On January 16, 1920, the manufacture of the alcohol and not cheat is because every restaurant keeper and every-hotel the brewing of the beer of the Nation from grain produced man wants to sell his food with the schnapps, .and there by the farmers was stopped. would be no object in giving me, for instance, two or three By closing down the distilleries, a cash market for 40,000,- times the amount allowed, because if he did that he would 000 bushels of corn and small grain was destroyed. By clos­ lose the sale of two or three extra meals. If he should run ing the breweries, an average of 60,000,000 bushels of barley out of liquor, he is entitled to go to the system and make a and the hops ne.cessary to make beer was taken away from request· for an additional amount, but any additional amount the farmers growing barley and hops. · Consequently, this he gets he has to pay for at the same price at which he sells made a total of 100,000,000 bushels of grain per year that it. So there is absolutely no extra profit and no incentive to was not used for the purpose of the manufacture of the push the liquor business beyond what he is entitled to sell. alcohol and beer of the country. There is another feature that is quite interesting, and In consequence of the closing of the distilleries in the that is the system's restaurants. They have 25 restaurants western part of the country, new distilleries were built on in Stockholm where a man of the middle class can go in and the Atlantic coast and permits were given by the prohibition by paying 55 cents get a good, wholesome _lunch, two enforcement office to manufacture alcohol out of blackstrap schnapps, and a bottle of beer. The laboring man with a molasses imported from Cuba. cap on his head can go downstairs and ,get two schnapps, a In 1914, 188,000,000 proof gallons of alcohol was made bottle of beer, and a reasonable lunch for 35 cents. This has from corn. In 1929, after the closing of the western dis- 1931 ·coNGRESSIONAL RECORD--HOUSE / 377 tilleries, 186,000,000 proof gallons of alcohol was made from rapidly. t contend that this 1s a conclusive reason why we blackstrap molasses. Consequently, the amount of gallons need not fear to accept the brewing of beer with an alcoholic of alcohol has not decreased to any great extent, but the content of 3.2 per cent by weight, as it will not intoxicate. loss of the sale of 120,000,000 bushels of grain, the product e CANAD IAN BEER of the American farm, is the result. There is some discussion that Canadian beer is much I believe this is a great mistake; I believe that the Con­ stronger in alcoholic content than American beer. In order gress should immediately rectify this error and give back that you may thoroughly understand the difference in meas­ to the farmers of the Nation this market that is rightfully uring proof spirits from the English system and the Ameri­ theirs. can system, it is as follows: AN EFFORT '!'0 HELP THE FARMER Four per cent proof spirits by measure under the English I am making this effort on the floor of the House to-day system equal 1.82 per cent by weight or 2.29 per cent by in favor of what I think means more to the future pros­ volume, our system. Hence Canadian beer, sometimes men­ perity of the country than any other kind of legislation that tioned as containing 9 per cent proof spirits, in reality can be passed. measures about 5 per cent by volume under our system of If we can bring about a law whereby the farmer will have calculation. an output for his products and he can sell them, he then I give you that explanation so that you may benefit and will begin to come out of the depression that he is in at the not be deceived by misstatements that may come to you. present time. I believe that in advocating before the House ·A great many Congressmen and the public at large will of Representatives a bill for the brewing of beer I will be be confused, I am sure, by the fact that I am introducing aiding agriculture more than by proposing any other one this bill on a basis of weight instead of volume to determine piece of legislation that can be passed. the alcoholic content of beer. A great many will say that_ In my judgment, the brewing of beer which is nonintoxi­ it does not contain enough alcohol to suit the taste of the cating will bring about the future sale of ·120,000,000 bushels American consumer, but, my colleagues, so that you will not of barley per year. Take 120,000,000 bushels of barley off be deceived and the public may not be deceived, by my intro­ the market and in my judgment you will advance the aver­ duction of the alcohol content of beer by weight, I want to age price of all grains 15 cents per bushel. quote you these figures, so that there can be no misunder­ In doing this you will stimulate the farm industry; you standing in reference to it, and I believe this is the proper will lighten the burdens of the farmer to the extent that he way to write the bill so that there can be no discrimination will know that he will have a cash market at least for the or any misunderstanding in the qualifications as to the amount of barley that the breweries will use. alcoholic content. I quote the alcohol in beer by weight and 3.2 PER CENT BEER BY WEIGHT NOT INTOXICATING IN FACT volume so that it will be perfectly plain: The bill that I have introduced provides for increasing 2.75 per cent by weight equals 3.46 per cent by volume. the permissible alcoholic · content of beer, ale, or porter to 3 per cent by weight equals 3. 78 per cent by volume. 3.2 per cent by weight, and to provide means by which all 3.25 per cent by weight equals 4.09 per cent by volume. such beer, ale, or porter shall be made of products of Ameri­ 3.50 per cent by weight equals 4.41 per cent by volume. can farms. HOW lT IS COMPUTED It is my contention that a beer containing 3.2 per cent To change from weight to volume, multiply by 1.26 or alcohol by weight is not intoxicating in fact; it is the same divide by 0.7936. beer that is brewed in Sweden and Scandinavian countries, To change from volume into weight, multiply by 0. 7936 and all of their literature contends that it is nonintoxicating or divide by 1.26. liquor. 3.2 per cent by weight is equal to 4 per cent by volume. Proofs have been made by scientists and by those in au­ In order that you will also understand the average alco­ thority that an adult can not be intoxicated by the drinking holic content in pre-war American beer, which averaged of beer of an alcoholic content of 3.2 per cent by_weight, from 3.5 per cent to 4 per cent of alcohol, I quote as follows: because the stomach will not hold enough beer to bring German beers range from 2 per cent to 4 per cent alcohol about intoxication in fact. by volume, British ales from 2 per cent to 8 per cent alcohol In order to make this proof conclusive in my own mind­ by volume. It is well understood by the brewers that 4 per and I am not a drinking man-I went to the Muchin brew­ cent beer by volume is high enough in alcoholic content and ery in Stockholm at 9 o'clock in the morning, before taking should. not go ·beyond that amount. any liquid or substance in my stomach, and drank 4 pints The reason that I make this explanation is because a of this beer, under the supervision of a doctor and a chemist. great many misquotations are made as to the alcoholic con­ It did not affect me mentally or physically, and there were tent of beer made previous to the war being 7 per cent, 8 no bad effects. So I can honestly come before the Congress per cent, or 9 per cent alcohol by volume. The highest alco­ of the United States and make an affidavit that it is my holic content of beer of any kind is contained in the im­ judgment that beer containing 3.2 per cent alcohol by weight ported beers from Germany and England, which average will not intoxicate, about 5 per cent by volume, and the only reason that they I have previously stated upon the floor of this House that are made at 5 per cent by volume is because alcohol acts as 3 per cent beer was the same as dissolving 3 gallons of alco­ a preservative in heavy British ales and in heavy German hol in 97 gallons of water; but I now find that medicinal beers and makes ft necessary on account of the lack of re­ research has determined that beer has still another advan­ frigeration in those countries to keep the alcoholic content tage over this argument. An extract from Mellanby's to this point. article in Medical Research, 1919, shows an experiment in ORIGIN AND GROWTH OF LAGER BEER which whisky was diluted down to the strength of stout or It might be interesting to the Congress of the United ale so that each contained 5.5 per cent alcohol by volume, States to know that since the Civil War this country has and there was found a considerable difference between the made progress toward temperance. This is best shown by rate of absorption of alcohol into the blood stream in the the records of the Department of the Internal Revenue. The two cases. department in its present form dates back to the beginning In the case of diluted whisky, the maximum concentration of the Civil War. From its record we glean that in 1860 the was reached in one and one-fourth hours after the experi­ per capita consumption of distilled spirits was 2.86 gal­ ment was started. lons. The rapid growth of the brewing industry began at In the case of stout the maximum was reached only after the time of the Civil War and, due to it, the use of mild two hours. fermented beverages gradually replaced whisky and caused The conclusion was that the stout contained something a steady decline in its consumption, so that in 1896 it which tended to delay absorption, and hence had a less reached its lowest mark, 1 gallon per capita. .. intoxicating effect than diluted whisky of the same alcoholic This shows conclusively that in 1860 nearly three times as content, which was absorbed by the blood stream more much whisky was used per capita as in 1896. This great 378_ CONGRESSIONAL. ... RECORD-HOUSE- ~ . DECEMBER 11

difference was not due to prohibition, for during this period PROTECTION FOB THE STATES no state except Kansas joined Maine in its prohibition You will notice that I have introduced a comPanion bill policy, and but few localities in those years were under local to this bill, amending the Webb-Kenyon Act to prescribe the or county option. · alcoholic content of liquors divested of their interstate char­ The decline of the consumption of whisky during this acter under such act. _The title of the bill reads as follows:. period was entirely caused by the gradual displacement · of A bill ·to fiX the alcoholic content of liquors included within hard liquor by mild malt beverages. the Webb-Kenyon Act so that liquors may not be brought into a As far back as 1848 lager beer in this countrY was brewed State in violation of the State policy on prohibition, even though by the American brewers, and with the development of pas­ Congress has not prohibited the manufacture, sale, or transporta­ teurization and refrigeration it was possible for them to tion of such liquors elsewhere. turn out a light sparkling lager with a fine hop flavor. This My object in introducing this bill is to protect any State soon became so popular that the ale trade of the United in the Union that does not desire beer with an alcoholic States shrank into insignificance, and by 1914 the lager­ content of more than one-half of 1 per cent to be sold in beer brewers had captured 98 per cent of the malt-beverage the respective Territory or State. They will, under this law, business. It was their aim, and is now, to produce an alco­ be fully protected; and if they want beer of 3.2 per cent sold holic beverage with the- lowest . alcoholic content without within the borders of their State, it will be necessary for impairing its wholesome and palatable qualities. them to pass legislation allowing the same. In this way No brewer in this country desires to make a beer that will those States that do not desire beer to be sold within their intoxicate, but there must be enough alcohol left in the beer borders can easily prevent it, so far as the law is concerned. tn make it satisfactory to the consumer and-to retain the It is my honest and sincere belief that this bill will in no qualities of a good wholesome food ·and beverage, and it is way conflict with the eighteenth amendment, which pro­ my contention that if you will enact into law the bill that I hibits the sale and manufacture of intoxicating beverages. have introduced, this march toward practical temperance My colleagues, l~t us once in the history of Congress set . will go on and the people of the United States will-be satis­ aside politics and the wet and dry question; let us come out fied with a good, clean malt beverage instead of poisonous in the open and herald to the country that we are willing bootleg intoxicating liquors of all descriptions. to pass a law that can be enforced. REVENUE Three and two-tenths per cent alcohol by weight in beer From an economic standpoint; a tax levy of $5 on each is not intoxicating and should be sold to the public instead barrel of beer. figuring on a basis -of the amount of beer of coercing them into buying improper alcoholic beverages. brewed in 1914, 66,000,,000 barrels, would amount to a total Anybody who has ever hoped for the success of prohibition of $330,000,000. Based on this estimate, this would provide should certainly indorse an honest measure aimed at making $330,000,000 toward the deficit' of the United States Govern­ the law conform to the eighteenth amendment and at the ment for the year 1931. I know of no other way where a same time benefit law enforcement as a whole. [Applause.] tax could be so evenly distributed over the country or made Mr. RAINEY. Mr. Chairman, I yield 10 minutes to the with better consideration than a tax on beer. · · gentleman from Illinois [Mr. SABATH]. TAKES THE .PROFIT OU'l' OF THE BOOTLEGGING BUSINESS Mr. SABATH. Mr. Chairman and gentlemen, for 12 years The prohibition law -went into effect in the United States I have advocated the good qualities in the wholesome glass January 16, 1920. Previous to that time the manufacture of of beer that my colleague from Dlinois, who has preceded spirits, wine, and beer was under Government control. me, said he obtained on his travels in Europe. Of course, Since the prohibition law went into effect all of these Gov­ I know that if he had visited the city of Pilsen and tasted ernment agencies, which are law-abiding, have been dis­ some of that good Bohemian Pilsener he would have been pensed with, and the process of distillation and brewing still more desirous of immediate action for the repeal of the have been canied on surreptitiously by criminals and the Volstead Act and the adoption of his bill. · worst element of citizenship that we have in these United I wish to congratulate the House and the country on the States. information that he has given, and which I hope will be It has been an easy matter for them to make a product helpful and beneficial to those Members who have been that would intoxicate, to hide it away, to sell it, without the deprived of that information heretofore. · Government's permiSsion, and this has done much to corrupt I always believed that if my colleagues had properly in­ the moral fiber of our citizens . formed themselves and had listened to the convincing argu­ . The great difficulty t.o-day in enforcing the Volstead Act ments made and to the uncontrovertible evidence which has is the profit gained by the bootlegger by manufacturing· a been presented against prohibition from time to time, and gallon of alcohol for 25 cents out of corn sugar without any had not been blinded by prejudice, they would not have expensive distilling apparatus and selling it for $6 a gallon, voted against me and against the modification of the Vol­ or in manufacturing beer for $3.50 a barrel and selling it for stead Act and the repeal of the eighteenth amendment. And $55 a barrel. This makes the business so profitable that if the gentleman and other Members had listened to me most any man out of work is willing to take a chance. before, we would not be obliged to make u:p the $2,000,000,000 If th~ Congress of the United States will pass a law under deficit, for the revenue from the manufacture and sale ·of which beer· can be made containing 3.2 per cent alcohol by beer would net at least $500,000,000 annually. Neither would weight,. you will take the profit out of the bootlegger's busi­ there be the widespread unemployment that now exists ness and destroy him, and in no other manner can you throughout the country, since the legalization of the manu­ possibly discontinue his activities. facture and sale of beer would give employment to a half­ I am familiar with the liquor business; I know its iniqui­ million people. ties. I also know that this is a business that meets a popular Long before the gentleman from Dlinois went to Europe demand and one that can be easily sold to the public, and I introduced a bill and secured hearings before the Judi­ therefore I can see no other conclusion that this country can ciary Committee on my Resolution No. 99, which provided come to eventually other than to handle this business in a for the amendment of the Constitution giving to the Con­ legal and practical way. I contend that this is the best way gress the ;right to legislate on this subject and giving to the to start by allowing the public the privilege of buying a mild, respective States the right and privilege which had been wholesome, fermented beverage. If this is done it will elimi­ taken away from them by the eighteenth amendment. nate the sale of spurious alcohol to a large extent; it .will Now, I have studied the question for many years, and I am give an opportunity for those who desire to indulge in a thankful that my colleague has so ably and forcibly brought mild beverage at meals to acquire a beer for a beverage to the attention of the people the benefits which would ac­ rather than alcohol reduced with water and flavored. crue to the farmers of this country by the repeal of the · I ·contend that this country now is saturated with a bever­ prohibition law. age that is intoxicating, but by adopting this measure. which, My colleague from Dlinois has pointed out that about of ~ourse, is ~n exper~ent. you will pav~ the way for future 60,000,000 bushels of wheat and barley had been used in the legislation that may bring about sobriety in the country. manufacture of beer and about 40,000,000 bushels in the (1931 . CONGRESSIONAL RECORD-HOUSE 379

ma~ufacture of alcohol, and that the honest profit on .this alumni of the University of Alabama, in Congress and out­ produce has been taken away from the farmers by the side, we extend to the Members of the . House an invitation eighteenth amendment. to attend that rather unique contest. My colleague has also pointed out that the same amount It now gives me great pleasure as a former member of the of alcohol is being manufactured under the prohibition law team, many years ago, as one who is naturally proud of its as was formerly, but it is now being manufactured from at~etic achievements, to present to you as representatives of "blackstrap," imported from Cuba, instead of from corn athletic prowe~s of the State of Alabama, by the courtesy of grown in Illinois and the Middle West. the House, the University of Alabama football team of the May I not ask my colleagues and Republican Members year 1930. [Applause.] why it is that they have permitted the importation of NATIONAL FOREST RESERVATION COMMISSION "blackstrap" at the expense and ruination of the Ameri­ The SPEAKER. Under the provisions of the act of March can farmers. I realize that they may be reluctant to give 1, 1911 (title 16, sec. 513, U. S. Code), the Chair appoints the true reason. I, myself, am of the opinion that it is be­ the gentleman from Mississippi [Mr. DoXEY] to fill tlie va­ cause the sugar interests, who are such stanch friends of cancy on the National Forest Reservation Commission the Republicans, have contributed to the election fund of caused by the death of Hon. James B. Aswell. the Republican Senators and to the Republican Party. The trouble with the farmers, in whom my colleague is so THE PRESIDENT'S MESSAGE especially interested, is that they have been blind to their Mr. RAINEY. Mr. Speaker, I move that the House re­ interests for many years. Notwithstanding the unfriendli­ solve itself into the Committee of the Whole House on the ness of the Republican administrations of Presidents state of the Union for the further consideration of the Coolidge and Hoover, they will support the Republican Party, President's message. even though they should have known that that party was not The motion was agreed to. sincere and was not a friend of the agricultural interests Accordingly the House resolved itself into the Committee and the farmers of this country. I am satisfied that all of the Whole House on the state of the Union for the fur­ that has been said by my colleague in relation to the re­ ther consideration of the President's message, with Mr. sumption of manufacture of this wholesome beverage is true. LOZIER in the chair. Therefore I am ready and willing, as I have been for many Mr. SABATH. Mr. Chairman, at this time, we, the liber­ years, to advocate the modification, yes, the repeal of this als, are indeed fortunate, because the Democratic Party, now law. And for that reason I am immensely pleased that my in control, believing in fair play, has liberalized the rules of colleague has finally seen the light of day, and has recog­ the House so that we who have for years, under a Republican nized, after these many years, that I was justified in my majority, tried in every way possible to secure a direct vote demand for the repeal of the prohibition law. I hope that on this question, so important to the farmers and the coun:.. there will be many others who will follow him and join try, will have that privilege. Of course, it is to be regretted with us in our efforts to bring to the American people the that we still have in the White House a man controlled by a relief privileges so long denied them. certain element, which has such great influence over him Mr. OLIVER of Alabama. Will the gentleman allow me to that I doubt very much whether the Anti-Saloon League interrupt him to ask that the committee rise temporarily? would permit him to sign or approve any modification of the Mr. SABATH. Certainly. prohibition law. But I know this, that within a short space Mr. OLIVER of Alabama. Mr. Chairman, I move that the of time the election will take place, and the people of Amer­ committee do now rise for a few moments. ica will speak, and when that election is over, I am satisfied The motion was agreed to; and the Speaker having re­ we will have in this House a splendid majority of broad­ sumed the chair, Mr. LoziER, Chairman of the Committee of minded, liberal men, and in the White House a Democrat; the Whole House on the state of the Union, reported that a man who will be unrestrained, uncontrolled by anyone, that committee had had under consideration the President's and who, in his desire to serve the Nation and a majority of message and had come to no resolution thereon. the people, will sign such a bill, as I hope and expect we will pass, and thus relieve the Nation of the infamous prohibition UNIVERSITY OF ALABAMA FOOTBALL TEAM law and the crime-breeding Volstead Act, which have been a Mr. OLIVER of Alabama. Mr. Speaker, when one receives curse to the people. the highest honors that can be won in any honorable field Mr. Chairman, it was not my intention to speak on this of human endeavor, where nation-wide competition obtains, subject, but I could not refrain from taking advantage of it represents an outstanding achievement. We have with the opportunity presented to me by my colleague's speech. us to-day a group of young men from the University of I know that a majority of the Members, or at least the Alabama who have measured up to that standard, and I older Members, expect me to make a speech on a measure of feel that no one can so appropriately present them to the still greater importance at this moment, namely, on my House as my friend and colleague, who is an alumnus of the efforts to stop the short selling or the rac'keteering going on university and who won his "A" letter and really was one on the stock exchanges in the United States. i shall be of the founders at the university of the national game which obliged to withhold my speech upon that subject for a few these boys have so well carried on. Therefore I yield to the days, but I assure you I shall be able to present to the House Hon. WILLIAM BANKHEAD, who will introduce these fellow enough evidence to entitle me to secure immediate action alumni of ours to the House. [Applause.] upon my resolution and bill to put an end to that racket, Mr. BANKHEAD. Mr. Speaker, as an alumnus of the which this Nation has tolerated and which more than any University of Alabama I am naturally proud, not only of other cause is responsible for the unfortunate and deplorable the cultural and scholastic accomplishments of that insti­ condition from which the Nation is now suffering. [Ap­ tution, which last June celebrated its one hundredth anni­ plause.] versary, but within recent years I am particularly proud to Mr. PURNELL. Mr. Chairman, I yield five minutes to the note the fact that in the field of athletic endeavor the foot­ gentleman from Pennsylvania [Mr. STOKEs]. ball teams of the University oi Alabama have achieved Mr. STOKES. Mr. Chairman, in passing a statue of national reputation. Twice national champions within re­ Burke on one of your avenues I noticed he had stated that cent years, only last year the team of 1930 was universally magnanimity in politics is true wisdom. Let us follow the recognized as the best football team in America. advice of one who was our good friend. To-morrow, at Griffith Stadium, this famous team of ath­ On June 20, 1931, President Hoover, after consultation letes will gratuitously give their time and services, without with various Members of Congress, announced that the any claim upon the proceeds, in a contest with teams made United States, subject to the approval of Congress, would up of students from three of the colleges of the District of allow a debt holiday of one year to all debtor nations, pro­ Columbia, for the purpose of creating a charity fund for the vided the other creditor nations would do likewise. This, o! destitute of the District of Columbia. On behalf of the man­ course, did not apply to securities held by the genera! public l agement of that contest, and upon the part of all the known as private debts but to interallied debts. 1 • 380 CONGRESSIONAL RECORD-HOUSE DECEMBER 11

This announcement was followed by a brisk rise in the up~n the· floor has been specially selected by. the Democratic value o:{ all securities and commodities, showing that the organization to speak for the party. They are so accus­ country generally approved this action. tomed to holding back their ordinary Members and putting All of the nations' representatives-32 allied and associ­ up only certain leaders that it irks them for their rule to ated powers-met together in London in July and accepted be disregarded across the aisle. in principle the arrangement subject to working out details. ' It has been charged, but irresponsibly so, that we on this The conference of London suggested, however, that a com­ side are not at work, because no appropriation bills have mittee of expert economists and financiers be• appointed, one yet been presented, carrying hundreds of millions of dollars, from each of .the 32 allied and associated powers ·_and one as has been the usual Republican custom. I call the atten­ from Germany, to offer recommendations to cure the world­ tion of our minority friends to the fact that they have not wide business depression. yet appointed a single working committee. They have se­ In due time this committee was formed. Mr. Wiggin, of lected only their members of the Appropriations Committee New ·York, represented the United States. They met in and of the Wayg and Means Committee. Not a single legis­ August of this year at the ·Bank for International' Settle­ lative committee has had its personnel selected by the ments at Basel and, after several weeks of study, made the minority party up to this time. following recommendations: · Only · day before yesterday the President of the United First. Friendly cooperation between Germany and France. States presented to this House for the first time his Budget Second. Reduced reparations. of 727 printed pages, each as large as those of the daily Third. Reduced interallied debts. CoN~sroNAL RECORD, proposing to appropriate of the peo­ Fourth. Reduced tariffs. ple's tax money ior the next fiscal year $3,997,000,000, and , Since the treaty of Versailles and its su~cessor, the so­ our Republican friends would expect that we would come called Dawes plan, and its later modification known as the in already with the administration's appropriation bill, ap.. Young plan, Germany has already paid in reparations about propriating $4,000,000,000 in lump sums, carrying out the $5,000,000,000, which includes payments in gold, in kind, ideas of the President's Budget, regardless of everything. and in property, as announced by Chancellor Snowden be­ 1 say to our friends that from now on there will be a few fore Parliament in July. In order to provide .funds for of us Members of Congress who are going to give careful these payments she has borrowed somewhat over $7,000,- study and consideration to every single item in this Budget 000,000, about five billion in long-term and roughly two before the appropriation bills are framed and brought in billion in short-term loans. here for passage. Instead of keeping these short credits in liquid invest­ ¥r. LUCE. Will the gentleman yield? ments she placed them in permanent improvements, which Mr. BLANTON. In just a moment I will be glad to yield. in good times would probably have been profitable, but They speak about loyalty to the President. You Republi- under present depressed conditions have become frozen cans were loyal to the President during the war,. but what assets. At the present time she can not borrow any money, happened just after the armistice? If I were going to take because her credit is gone, so she must depend on what na­ a subject for my few minutes' address this morning, it would tional income remains and on selling her inventories. be that passage of Scripture, "Whatsoever ye shall sow, that Mr. Houghton, the recent United States ambassador to shall ye also reap." Germany, said: I can not forget that immediately after the signing of the · I can not think of anything more unfortunate for the world armistice those of you Republicans who were then in the than the collapse of Germany at the present time, and unless Congress rose from that Side of the aisle one after anotheT help is extended such a. colJapse is not impossible nor far away. in a merciless attack upon .the President and his adminis­ Beyond Germany is Russia, and in Russia is tyranny tration. I can not forget that :y-ou criticized his physical and despotism. If Germany is thrown into the condition infirmities, when his" giant mind and judgm.e:qt were stronger of Russia, the result may be very serious. than ever ~ You will not find a Democrat who will criticize · I agree with the opinion that a debt holiday of one year the physical strength of youz present President, because he as is now suggested will restore business conditionS to nor­ has a splendid, strong physique. (Laughter.] mal much more· rapidly than otherwise and that. otir profit I can not forget the "Graham ofillinois committee," the from the resultant .good times .will far exceed our interest smelling committee; if you please, created by you Repub:­ payments on foreign debts. German prosperity is .closely licans, that wasted $157,000 from the people's Treasury in allied with world prosperity. . an attempt to criticize and hamstring and hog-tie the Presi.:. This summer in France I was told that Chancellor Brue­ de~t of the United States. I can not forget the" Joe Walsh ning is a loyal and intelligent man and believes he has a of Massachusetts committee," the smelling committee you religious mission to fulfill.. His prestige has recently in­ Republicans created that went in its palatial Pullman train creased with his r,esponsibility. He is endeavoring to teach to the Pacific coa$t and spent $43,900 of the people's money his :people national self -discipline-a good thing for any trying to hamstring the PreSident of the United States. nation. Whatsoever ye shall sow, that shall ye also reap. God has made aU nations of one blood. Let us dn our Mr. LUCE. Will the gentleman yield? share toward keeping the solemn promise Mr. Hoover has Mr. BLANTON. Yes; I will;,. because I am sure my friend made in our name to the world. from Illinois [Mr. RAmEY] will grant me more tune, because Mr. FISH. Will the gentleman yield? he is so generous to the cmmtry that when your Republican Mr. STOKES. I yield. . leaders will not allow a distinguished Republican Member Mr. FISH.· J: just wanted to ask where the gentleman got like the gentleman from Wisconsin [Mr. STAFFORD], one of his figure of $7,000,000,000. ·. the hardest working men in the House, one of the most dili­ . Mr. STOKES. I may be. wrong about that figure. I took gent, one who is patriotic and conscientious, who was a dis­ that from newspaper clippings and that figure may be a tinguished member of your Committee on Appropriations as little lower than it should be. It is approximately $7,000,- far back as 1921-I say when you Republicans will not allow 000,000, and approximately two billion of short-term credits. him to speak, the distinguished gentleman from illinois [Mr. [Here the gavel fell.] RAINEY] grants STAFFORD a little time to speak his sentiments. Mr. RAINEY. Mr. Chairman, I yield 15 minutes to the [Applause and laughter.] gentleman from Texas [Mr. BLANTON]. I .yield. Mr. BLANTON. Mr. Chairman, our RepublicaiJ. friends Mr. LUCE. Did I understand the gentleman to reproach across the aisle can not understand the workings of a politi­ the Republicans of the House for not having yet named their cal party that will recognize the inherent rights of and committees4' permit its obscure and humble members to speak their senti­ Mr. BLANTON. No. I was just answering your at­ ments at will the same as it does its leaders. They imagine tempted reproaeh· gf our ·side ahout committees not yet that in the opening of Congress every Member who a~s working. .. 1931 CONGRESSIONAL RECORD-HOUSE 381 Mr. LUCE. Is it customary for the minority to announce those who believes that every appropriation ought to be their committees before the majority have announced theirs? specific and duly protected by limitations, and as long as I Mr. BLANTON. Oh, I will get to that in just a minute. am in this House I am going to fight for it. I am going to Mr. LUCE. That is a fair question. fight for specific appropriations for every bureau and for Mr. BLANTON. I will answer it in just a moment. every ·commission of the Government, and if you want to Mr. LUCE. Answer it now. get some economy that is the only way to get it. You know Mr. BLANTON. I am going to answer it now, but I it as well as I do. always like to have the floor when I am answering. The Mr. BEEDY. Will the gentleman yield? gentleman is right. Mr. BLANTON. I always yield to the distinguished gen­ Mr. LUCE. Of course, he is. He is always right. tleman from Maine. Mr. BLANTON. But I want to say to him that the time Mr. BEEDY. I thank the gentleman very much. The for naming all committees has not properly arrived. The gentleman would not have the House understand that what­ gentleman has been a distinguished parliamentarian of his ever" lump-sum appropriations are made in the House are State as well as of the Nation. He has presided over a not in pursuance of specific items, every one of which has deliberative body there with- great dignity and honor, and he not only been considered by the committee but by the knows there is an orderly process to be followed rather than Director of the Budget. a disorderly one. We are following the orderly process. We Mr. BLANTON. Oh, but they ought to be specifically are going to take your President's 727 -page Budget appro­ stated in each appropriation bill. · priating $3,997,000,000 and study it and analyze it and in­ Mr. BEEDY. The gentleman knows that is impossible. vestigate it before we bring in a half-baked bill for 435 Mem­ They are listed in the report of committee hearings. bers of Congress to swallow Without changing the dotting Mr. BLANTON. When I came here they were so stated. of an "i" or the crossing of a "t." That has been the Mr. BEEDY. They always have been stated, have they Republican practice, to have one prepared before committees not? are named. Mr. BLANTON. No; not for the last 10 years. Mr. LUCE. Will the gentleman kindly answer my ques­ Mr. BEEDY. Have they not been thoroughly discussed in tion? the report of the hearings held by the Appropriations Mr. BLANTON. I told the gentleman that it was usual Committee? for the Republicans to bring in your committees when we Mr. BLANTON. To a certain extent, yes, but not in the brought in ours. bill. The gentleman from Maine, if he has studied these Mr. LUCE. I thank the gentleman. conditions as I have studied them, knows there has been Mr. BLANTON. But we have not seen fit yet to bring in quite a change in them, from specific to lump siuns. ours. [Laughter.] . Mr. BEEDY. The gentleman would not, in pursuance of We have not brought in ours yet, because we are trying to economy, have the same reprints in the bill that have select the men best fitted for the different kinds of places. already been paid for by the Government in the printing of I want to say that while you have had three distinguished Appropriations Committee hearings and the Budget, would Republican Presidents serving under one distinguished Sec­ he? retary of the Treasury, it has been my privilege in the House Mr. BLANTON. I would have the same kind of bills and of Representatives to have served under six distinguished with the same kind of specifications in the supply bills that chairmen of the Committee on Appropriations. I have not were in them when I came here in 1917. been on that committee until recently, but I have neverthe­ If you go back and look at those bills, you will see there less served under them. I can remember what our Mr. John were so many employees mentioned at stated salaries, so J. Fitzgerald, of New York, a Democrat, who wa.S chairman much money for this specific purpose, so much money for ·of the Appropriations Committee when I began serving-! that specific purpose, but you do not find these specifications ·can remember what he said about economy in appropria­ in the bills in recent Congresses. tions and against lump-sum items. I can remember what Mr. LAGUARDIA. Will the gentleman yield? Mr. Swagar Sherley, another Democrat, of Kentucky, said Mr. BLANTON. Yes; I yield to the wet, yet most valuable about it. I can remember what James W. Good said about Member from New York. it. It was his opinion that lump-sum appropriations would Mr. LAGUARDIA. The gentleman, of course, understands ruin the Government. I can remember what Martin B. that no head of a department or bureau can spend funds for Madden said about it. He was one of your greatest Repub­ a purpose other than that for which it .is appropriated, and licans. I can remember what that distinguished and be­ there is a check on every expenditure made. loved colleague of ours, Dan Anthony, said about it. He Mr. BLANTON. But they can shift them about to suit was another stalwart Republican. And I remember what themselves within certain indefinite limitations. our friend Mr. WILL WooD, your retiring Republican chair­ Mr. LAGUARDIA. Oh, they would never get by the comp­ man, said about it, and I know and we all know what our troller. friend JoE BYRNS thinks about it. But lump-surii appro­ Mr. BLANTON. They have certain limitations within priations have nevertheless been your Republican slogan here which they can do some shifting, and I want to see that for 10 years. • stopped. · Your President talks about economy in government. Why, [Here the gavel fell.] the appropriations have been climbing up and up every Mr. RAINEY. I yield 10 minutes more to the gentleman. single year of your Republican administration, and they are Mr. BEEDY. Will the gentleman yield? going to continue to climb until this House adopts the policy Mr. BLaNTON. Certainly. which every one of the distinguished men I have mentioned Mr. BEEDY. The gentleman has just mentioned some­ has advocated from this floor, and that is the policy of mak­ thing with which I have had some personal experience. The ing specific appropriations rather than general or lump- gentleman will find, if he will study the hearings in the . sum appropriations. Mr. Fitzgerald advocated it. Mr. Appropriations Committee with a view to this particular, • Swagar Sherley advocated it. Mr. James W. Good advo­ that it has been the custom of late for the subcommittees of cated it. Mr. Martin B. Madden advocated it. Dan An­ the Committee on Appropriations to have an understanding thony advocated it. WILL WooD has advocated it and JoE with the heads of departments that they will not shift bal­ BYRNS has advocated it. I have heard them all say from ances under one item to another without the special consent this floor in the years gone by that without specific appro­ of and a special rehearing by the committee . . priations you would not have economy in government, and Mr. BLANTON. For how many years has the gentleman yet you have gone on and on making lump-sum appropria­ from Maine served on the Appropriations Committee? tions by the hundreds of millions of dollars for bureaus and Mr. BEEDY. I have not served on· the Appropriations commissions and departments to spend at will, with very Committee. little check and with very little guidance. I am one of 141'. BLANTON. IS is Uiifortunate the gentleman has riot. 382 CONGRESSIONAL RECORD-HOUSE DECEMBER 11

Mr. BEEDY. But I have had exPerience in this matter, J This answers their wet argument; and let me say to my and I can assure the gentleman I know whereof I speak. wet, though valuable, friend from New York, who talks Mr. BLANTON. If the gentleman would study the bills aoout helping the· farmers to reduce taxes and bringing in closely and would check. them up as I do and compare them revenue with his beer proposition, how much help is the with other bills, every single year with the previous. year. as beer revenue doing the German farmers and the German I do, and then check them. with the Budget, he would un.;. people to-day? [Applause.] What revenue is it bringing to derstand what I mean when I speak of changes in the the Canadian farmers? Are they in any .better shape than method of appropriating. ours? Mr. LUCE rose. You may take the beer countries of the world and you Mr. BLANTON. Just a moment. I want to call your will find their liquor revenue is a bagatelle compared with attention to something that will interest even the gentle- what they have to raise from the taxpaying nationals of man from Massachusetts. their country. There came from his state, and probably that is the But I do not have to touch on that question, regardless of reason it was put over an administration of which your the propaganda of the big wet newspapers that are making present President was then a Cabinet member, a · proposal the country believe that this is a wet Congress. I call atten­ to spend $200,000 checking up a coal situation. They spent tion to the fact that when you wets get a vote here under it and nothing was accomplished. I opposed it. I called the new rules you will not muster 150 votes on this floor. attention to the fact that it would be wasted. Then there There is no such question as beer and wine separated from came from Massachusetts on the floor here a proposal to the open saloon. It is the open saloon or it is prohibition. grant him $400,000 more. I opposed that and called atten- [Applause.] What are you going to do about it? tion to the fact that nothing would be accomplished; but the The Highway No. 1 in my State runs from El Paso through Congress, through Massachusetts, gave the President the my city of Abilene to Texarkana in Texas 900 miles in an $600,000 and all we got was a report about this thick [indi- unbroken hard pavement. You can drive 80 miles an hour. eating] that nobody has ever yet read 10 pages of and the Would you want to put a road house every 10 miles along $600,000 of the ~ople's money was wasted. that great highway? Not a man! woman; or child on it Mr. BEEDY. Will the gentleman yield for just an ob- would be safe. servation? · [Here the gavel fell.] Mr. BLANTON. In just a moment. I want to tell about Mr. PURNELL. Mr. Chairman, I yield 20 minutes to the another thing. gentleman from Ohio [Mr. CooPERJ. Mr. BEEDY. The gentleman is making a serious indict- Mr. COOPER of Ohio. Mr. Chairman and members of ment of himself when he says that nobody has read that the committee, T do not believe that we will get anywhere report. in the legisl~tive program of this Congress if we are going · Mr. BLANTON. I know I have not read it. It was not to criticize one party or the other. In my opinion, this is worth reading. The gentleman from Maine has not read a time when every patriotic American citizen should at least it. His time is devoted to more serious matters. No other in some degree forget his partisanship and stand for the man in Congress has ever read it and nobody ever will read issues and principles which will be for the best interests oi it. It is stored away now in the basement where useless the American people. [Applause.} papers are stored. · · We have heard prohibition discussed this morning. I Mr. UNDERIULL. Will the gentleman yield right there? grant you. it is one of the most important questions before Mr. BLANTON. In just a moment. Did it not come from .the Amencan people ~o-day, but_ as fa: as I am personally Massachusetts? · cone~rn~ I am n~t mterested 1n trymg to get back the . . . iegahzat10n of the liquor traffic~ . Mr. UNDERHILL. Have any otf ~he~e mvestrgatlOns ever What I am interested in is trying to relieve the economic led anywhere or amo~ted to any ~ · and unemployment situation as it is to-day. It seems to Mr. B~ON. No, and never will. [A~plause.l me that this is of more vital importance to our people than Then nght on the fa~e of. that your Presid~t has spe~t the question as to whether or not we will again legaliZe the $500,000 already on his :Wickersham Comm~tt~e. and lS liquor traffic. [Applause.] there a man here who Wlll get up and say lt 18 worth 5 This is not the only depression we have had. I have a cents? [Laughter and applause.] · ·d 11 t· f th d · · 1893 I t t M LAGUARDIA Will th tl . ld th ? .v1v1 reco ec 1on o e epreSSion m . wan 0 say . r. · e gen ~an Yl~ ere. . .to you that it is my honest opinion that the depression of ~· :SLANTON. Is ;here any man on this floor who will to-day in many respects is not as bad as the depression say It 18· worth 5 cent~. . . · of 1893. I was ·just a young chap at that time. My father Mr. BEEDY. I will say 1t is worth 5 cents and a lot was at the head of a large family. In order to give some of ·• more. the men in our steel mills work we passed a bond issue to Mr. LAGUARDIA. Does not the gentleman remember improve a beautiful natural park we have in my part of when I made a point of order against. the Wickersham Com- the country. It was decided to give to the head of each mission appropriation, and the gentleman pleaded with me family five days' work at a dollar a day. My father was to withdraw my point of order so that the Wickersham Com- lying in bed sick. They said to me," Do you think you can mission could go ahead? [Laughter and applause.] take his place?" r .said I believed I could. • While I was Mr. BLANTON. If the gentleman will get the RECORD, he only a young chap, I went out to that park and swung the will fiild he is mistaken. ax and the pick and used the shovel, and I worked for a Mr. LAGUARDIA. Oh, no. dollar a day in 1893 in order to bring a little bread and Mr. BLANTON. I did want to use some time to answer butter into our family home. This was at a time when the the gentlemen from Illinois, the brace of wets from Illinois, Democratic Party had control of Congress and under a one fi·om either side of the aisle [Mr. HULL and Mr. SABATHJ, Democratic President. There was a difference between that but when that bunch of stalwart athletes from Alabama, depression and this. In those days we had not much to the Alabama football team, whom we have just honored, lose. We were hungry and we needed shoes and clothing, but • ran a V wedge through both of them and through their we did not have all of the comforts and blessings to lose wet arguments, there was not anything left of them, and that we have had during the past 10 years. therefore I do not have to answer them. I point to those We did not have the improved sanitary conditions in our athletes from Alabama as an answer to the wet arguments homes; we did not have electric lights; we did not have of the brace of wets from nnnois. They are athletes, they frigidaire; we did not have our automobiles and our paved have won, they have _been successful, and so successful that streets and our fine roads; we did not have our talking movie the House of Representatives does them honor, because not pictures and radio. That is the difference between the de­ one of them can touch beer or wine or whisky when they are pression of 1893 and that of 1931. preparing themselves for the ordeal for which they are What I want to talk to you about to-day is the tari1f inteRded. [Applause.] question whicll was cY.sc~d here by several Members of 1931. CONGRESSIONAL RECORD-HOUSE 383 this House yesterday. Never in the history of our country est a series of articles which were written by an American have we witnessed such a flow of propaganda as is now newspaper man, which contained a bitter attack upon our being directed against the American tariff. It emanates present tariff system. The writer tried hard to leave the im­ in a large measure from powerful factors with heavY invest­ pression with his readers that since the passage of the tari:ff ments abroad and from those importing interests which have law American capital had been forced to go abroad. Let always taken an undue share of the American market me read to you some of the things he said: through the handling of foreign products produced at such Tens of thousands of American workers are jobless to-day be" low cost that similar American articles have been unable to cause the present tariff policy of the United States has utterly failed to protect what is perhaps the largest industry-foreign trade compete with them. itself. There is also a strong national publicity campaign, which is financed by powerful interests, now being carried on that He is writing these articles from Toronto. He says: Before coming here I visited Akron, the rubber capital o! the many foreign nations have increased their tariffs in retalia­ world. There I saw how vicious the policy can be. As a con­ tion against our present tariff law, which was passed by Con­ servative estimate, I was told that Akron to-day has a total tiD­ gress in 1930. And as a result American foreign trade, both employment of approximately 12,000, while between 4,000 and imports and exports, have fallen off. 7,000 jobless have left the city. "It is not at all difllcult," one Akron observer told me, "to trace our unemployment to the The question which I shall speak about now is, Has our forces of migration of part of our industry." present tariff policy, adopted in 1930, caused foreign coun­ ·Then he goes on to say that more than 3,000,000 tires were tries to retaliate against us and have our imports and ex­ made in the Province of Ontario last year because we ports fallen off? passed the tariff act of 1930, that American. capital was in­ The facts are, and the record will show, that long before vesting its money in Canada, that it had to on account of our present tariff policy became effective foreign countries, the retaliation on the part of the Canadian Government - under the pressure of domestic needs, increased their tariffs against our present tariff law. My friends, if that were true, and adopted other methods of discrimination against im­ it would be a serious question which should be given careful ports from the United States. When the present tariff law and thoughtful consideration by every American citizen. was passed, Canada already had in effect a law which was But what are the facts in regard to this? collecting, in customs duties, a larger percentage of the After reading this attack on the tariff law I made a trip to . value of American imports than is collected by the United Akron and called upon the vice president of probably the States from Canadian products under our present tariff law. largest rubber industry in the world. I said to him, " When Two years ago the voters of Canada elected into power the did your company first invest its money in the rubber indus­ Conservative Party. A short time after the party assumed try in Canada?" He immediately replied by saying, "In power, Premier Bennett presented to the parliament a meas­ 1913." t said, " When did you erect that large plant in ure for a revision of their tariff laws upward. This measure Toronto, which employs between 3,000 and 5,000 workers?" was presented before our present tariff law became effective. He said, "In 1920." I said, "When did the other rubber At the time he made a statement carried in the press, which industry go into Canada?" "About the same time." I now read: Mr. BLANTON. Will the gentleman yield? • This is a news dispatch from the city of Ottawa, Canada, Mr. COOPER of Ohio. Will the gentleman allow me to dated September 18. It says: finish this thought, and then I will yield? It was also For the second time within six months Canada has made a com­ charged by this writer that the automobile industry had gone plete change in her tariff policy. The Conservatives adopted" Can­ into Canada on account of the passage of our tariff law. To ada First " as their slogan and insisted that while they were anxious to help the mother country, their first concern was to my personal knowledge, General Motors has operated a build up Canadian industry. plant at Oshawa in the Province of Ontario for the last 12 Does that look like a matter of retaliation against the years. In 1927 I visited in that city for about three weeks. United States? Then the Premier said this: I went through the plant. There I saw anywhere from 3,000 to 5,000 Canadian workers going into that automobile plant We have very definite assurances !rom those who are charged with producing in this country that as a result of the action we every day. They were manufacturing every car from the are taking to-day they will increase the number of men and Buick on down, that is made in the United States. Mr. Ford women in their employ. has had an assembling plant in Canada for the last 15 A little later on he made this statement: years. He declared it was right and proper to glorify international Those opposed to the present tariff law charge that Amer­ relations and to be interested in the welfare of other countries, but ican capital .was forced to invest in Canada in the automo­ tnsisted that his job was to take care of Canada. "This Govern­ bile and rubber industries because the Republicans passed ment," said the Premier, "owes primarily a duty to the Canadian -people and not to some other people, for the simple and obvious the Fordney-McCumber Tariff Act of 1922 and the tariff act teason that the electors of Canada and not the electors of other of 1930. But, mark this, and I want some Democrat to chal­ countries have selected a government to govern Canada. Legisla­ lenge this statement, if he can: American capital was first tion must be initiated first of all in regard to Canada, with regard invested in the rubber industry and in the automobile indus­ to its growth and development and employment, and happiness and prosperity of its people." try in Canada from 1913 to 1920, at the time when the United States was not operating under the protective-tariff system, I wish that we had some American statesmen who but under the Underwood free-trade tariff bill, one of the would stand on the floor 'of this Congress and be as much most liberal free-trade policies we have ever had in the his­ interested in the welfare of America as Premier Bennett has tory of this country. [Applause.] been in the interest and welfare of the Canadian people. The CHAffiMAN. The time of the gentleman from Ohio [Applause.] has expired. There is too much of the spirit of internationalism sweep­ Mr. THURSTON. I yield 10 additional minutes to the ing throughout the United States at this time. We have gentleman from Ohio. millions and billions to loan to foreign countries. I say the Will the gentleman yield for a question? time has come now when the Congress of the United States Mr. COOPER of Ohio. I yield . . should consider relief and welfare of the people at home Mr. THURSTON. I would like to ask the gentleman if it as well as the welfare of foreign countries. is not a fact that on account of the lowered wage levels and Mr. BLANTON. Mr. Chairman, will the gentleman yield? reduced production costs the duties in our tariff act were Mr. COOPER of Ohio. Pardon me, but I can not yield automatically reduced? now. Many times within the last year I have .heard some Mr. COOPER of Ohio. That is true. of my friends, Senators and Representatives of the Demo­ Mr. BLANTON. Will the gentleman yield for a question cratic Party, charge that by reason of the ·passage of the as to Akron? tariff act of 1930 American capital had been forced to go Mr. COOPER of Ohio. I will be glad to yield to the gen­ into foreign lands. A short time ago I read with some inter- tleman from Texas if he do:es not take too much time. 384 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 Mr. BLANTON. Is it not a fact that the Akron Beacon­ mists, to further the free-trade policy, to enlarge the importa­ Journal is one of the old-time, rock-ribbed Republican news­ tion of· goods, produced ·by forced labor (Russia), low paid, papers? and child labor of Europe and Asia, and the cry for a more Mr. COOPER of Ohio. I hope the gentleman will not liberal immigration policy .can only lead to further unem­ make a speech. ployment and demoralize our economic, industrial, social, Mr. BLANTON. Is that not a fact? and political structure. Mr. COOPER of Ohio. Please do not go into that. _ ~ose who argue that the way to cure unemployment in Mr. BLANTON. Well, has the gentleman read the very the United States is to consume more of the products of Important editorial recently in the Akron Beacon-Journal, foreign labor underestimate the intelligence of. the American the Republican newspaper, and has the gentleman seen that people. wonderful cartoon that has recently appeared there? Such propaganda bespeaks the desire of international Mr. COOPER of Ohio. No, I have not; but I will ask the capitalists, who wish to lower the standard of wages and gentleman to please not take my time. living in"this country to that of foreign lands in order that Mr. BLANTON. The gentleman should look it up. their vast foreign investments may be protected. Mr. COOPER of Ohio. Another charge. is made that our To wipe out our protective tariff at this time would under­ custom duties on imports are the highest of any country in mine and lessen the employment opportunities and stand­ the world. Again let me bring to you the facts in this re­ ards of life and work of American wage earners by flooding spect. I have with me here to-day a tabulation submitted to our domestic market with foreign goods. nie by the Growers' Tariff League of California,· which WHAT WOULD EUROPE BUY OF US? shows the import tariff rates of the United States and 53 The opponents of our tariff policy try hard to make the leading foreign countries on each of 25 commodities, most of people believe that there is a high import duty on all for­ which are agriculture. Please t?ear in mind that our import eign products that come into the United States. duties on agriculture products as a whole are the highest of In 1930 there was $3,061,000,000 worth of imports entered any commodities in our tariff law. These rates have all been the United States from foreign lands, of which 65 per cent reduced to a common basis of United States dollars and cents came in duty free. per 100 pounds. And this is what we find: The average One of the international capitalists who made a bitter at­ duties charged by these 53 -foreign countries on commodities tack upon the present tariff law when the same was before . thereon named is $4.05 per 100 pounds, as against an aver­ Congress for consideration moved his tractor factory from age duty of $1.81 charged by the United States on the same Detroit to Ireland more than two years ago. He was quoted commodities. The tabulation of this report is based upon in the press as stating his reason for moving his factory to a an analysis of a recent tariff survey made by Mr. Edwin foreign land was to get a cheaper production cost. It is Phole, California State Bureau of Commerce, by direction said that several thousand American workmen were deprived of Hon. James Rolph, jr., Governor State of California, of employment when the Detroit tactory was closed down. I from statistics furnished by Hon. H. P. Fletcher, Chairman grant the right of this manufacturer to establish his indus­ of the Federal Tariff Commission. try in a foreign country, but I can not contend that he lias Another charge that is made by those opposed to our tariff the right to export the products of the factory into the policy is that we are loosing our foreign trade on account United States free of import duties. of import duties we impose. Again, what are the facts in I hold in my hand a report signed by the United States this respect? Let us take the 20 leading· markets of the vice consul at Dublin, Ireland. It is the official report on world, and that takes in practically all of our foreign trade. the number of tractors exported from Cork, Ireland, for the Now, I grant you that our volume of exports has fallen first six· months of the year 1930. In this column you will off, but, are we losing our foreign trade as compared with see the names of 29 foreign countries; and qver here you foreign trade of other coun~ies? . . will see the number of tractors -that ·were exported from I find that our share of exports to these 20 countries in Cork, Ireland, .to these different countries, for the first six 1930 was 20 per cent of their total imports. Now, let us go monthS of 1930. The total number of tractors exported to back and compare the average of the years of 1924 to 1927, these 29 foreign countries for the first six months of 1930 which were pretty good years, and_what do we find? We was 13,605. had in those same markets in that time three to five years [Here the gavel fell.] before the present tariff law was passed 20.7 per cent of their Mr. THURSTON. Mr. Chairman, I yield the gentleman tota~ import trade as against 20 per cent of last year. five additional minutes. These figures and facts .were furnished to me by the De­ Mr. COOPER of Ohio. In addition to that there was ex­ partment of Commerce at Washington. ported $3,500,000 worth of parts. Now, here is what we In this time of economic depression which is sweeping our find: To Belgium there were exported 103, to Denmark, country to-day there are many American industries that are 196, and to Finland, 63. I will not stop to read them all; suffering from foreign competition. A few days ago I was but, as I said a moment ago, the total was 13,605. Now, consulted by officials of two of our large steel industries. listen to what is shown on ·the top line. To the United They are very much worried because they are about to lose States of America, 6,609. In other words, 50 per cent of the a market for a by-product of our coke ovens, which is known tractors which were exported from Cork, Ireland, to 29 as sulphate of ammonia. The Germans are importing this foreign countries during the first six months of 1930, was product into the United States to-day at a cost cheaper than sent into the United States; and they came in here duty free any steer plant in the United States can produce it. Men classified as agricultural implements. I want to repeat in the steel industry have also informed me that to-day for­ that this gentleman had a perfect right to take the money eign countries are unloading fabricated steel on the Atlantic which he received from the American people and establish coast and in the ports of the Gulf of Mexico at a cost this industry in Ireland, but it seems to me that he has no cheaper than we can produce it and ship it to those ports by moral right to send those tractors back into the United rail. Only a short time-ago an ocean freight-carrying ves­ States classified as agricultural implements and have them sel crossed the Atlantic, down the St. Lawrence River into enter our ports duty free. the new Weiland Canal, ·through the Great Lakes system, I hope this Congress will do something which will cause and docking at Chicago with a cargo of steel Belgian wire. this gentleman to pay a duty on this manufactured article. This is not the time to break down our present tariff system. [Applause.] . Mr. JONES. Will the gentleman yield? Mr. PARKS. Will the gentleman yield? Mr. COOPER of Ohio. I would rather finish now. I Mr. COOPER of Ohio. Yes. only have a few minutes left. If I have time I will be glad Mr. PARKS·. They came into the United States free to yield later. under the tariff bill which your party introduced and passed. The demand of some of our leading international bankers, with the consent of you and these other gentlemen. industrialists, and others, supported by a number of econo- Mr. COOPER of Ohio. I will not admit that. f

1931 CONGRESSIONAL RECORD-HOUSE 385 Mr. PARKS. Why did you not put a duty on them if it heard Congressmen discussing the Japanese war, some of is wrong? them talking about the presidential campaign and two dry Mr. COOPER of Ohio. We thought there was a duty on Congressmen, who vote dry consistently, were discussing the them, but the Commissioner of Customs ruled tractors were bad quality of Washington liquor. I will not tell you their agricultural implements and admitted them duty free. names. I am not a Smedley Butler. Mr. PARKS. Why did you not do it? My observation also is that the women of this body behave Mr. COOPER of Ohio. we will do it if you give us a like perfect gentlemen, while some of the men behave like a chance. lot of old women. [Laughter.J Mr. PARKS. But you signed away your day of grace, and We are discussing now the President•s message on the state you can not do it now. of the Union, · and I am reminded of the story of the little Mr. LAGUARDIA. Will the gentleman yield? boy who was called upon one day to an.sWer a question in Mr. COOPER of Ohio. Yes. geography. The teacher said, "Johnny, what is the shape Mr. LAGUARDIA. Does not the gentleman believe that of the world," and Johnny said," Teacher, it is in a hell_of a we are justified in taxing the income of the particular gen- shape." This may be applied to the state of the Union tleman to whom he refers 49 per cent over $1,000,000? told~tened to the gentleman from Maine [Mr. BEEDY] Mr. COOPER of Ohio. That is all right with me. draw the implication that this side of the House is committed Mr. CROWTHER. Will the gentleman yield to me? to a dole. By way of digression, I may say that the most Mr. COOPER of Ohio. Yes. Mr. CROWTHER. I want to say to the gentleman that important thing before this Congress is the relief of the b ht unemployed. there was a duty on tractors, but because these were roug I criticize the President of the United States for his pocket in as agricultural implements they came in free. However, veto of the Wagner measure in the last Congress that would there is a duty on automobiles. · t this t · Mr. COOPER of Ohio. Now, I want to finish. This sum- have allocated $500,000,000 to various pars of coun ry mer 1 happened to tune in on the radio and heard my good and bring relief, and abolish, to some extent, the bread lines we enjoy to-day. I despise the dole system, but I am for a genial friend Mr. BusBY, of Mississippi, delivering a speech. dole in preference to a bread line. The bread line humil- He received a lot of publicity in the newspapers, but how he iates a man and causes him to lose his self-respect. The was lambasting that tariff act. As I recall, here was his dole makes a man feel that his government has some interest solution for the payment of the allied debt. Take it out in foreign trade. In other words, he suggested that the Allies in I~~de some casual study of the dole in England, and I pay us that debt in goods. It may be that we shall have to reached the conclusion that the smart politicians and the cancel that $11,000,000,000 some of these days. I am not far-sighted statesmen of England put into effect the dole, ready to cancel it yet. But if I had to take my choice be- Mr. Chairman, to ward off revolution and to allay the tween canceling the foreign debt or taking it out in foreign rebellious temper of the millions of persons who are con­ goods, I would say it would be ten thousand times better for stantly out of work. us to cancel the debt instead of accepting foreign goods that I saw the group that came to the Capitol Plaza Monday. woula destroy our American industry and American labor. They did not excite me and they did not excite this Con- [Applause.l gress. We believe in giving them an opportunity to exercise [Here the gavel fell.] their freedom of speech. Let them expound their philoso- Mr. THURSTON. Mr. Chairman, I yield the gentleman phy, be it good, bad, or indifferent. one additional minute. I also read the message or speech delivered over the radio Mr. COOPER of Ohio. I am wondering where you are in anticipation of this march on Congress of Mr. HAMILTON going to start in lowering· these tariff schedules. Are you FisH, the chairman of your committee to investigate com­ going to start on manufacturing and agricultural products; munistic activities in the United States, and he stated that on shoes? Are you going to start on hides; on the products it was the conclusion of his committee that there are be­ of the Southland? I remember what you said to us when tween 500,000 and 600,000 communists and communistic we put 10, 15, and 20 per cent duty on hides, shoes, and sympathizers in the United States. A mere guess, a mere leather. You charged this duty would add a burden of conjecture, I am thinking of the 6,000,000 men who are $300,000,000 on the American people, yet ever since that law unemployed, the 6,000,000 men who know that the granaries became effective the price of shoes has gradually gone down, in Wisconsin and Minnesota are choking with grain, a great and to-day shoes are cheaper than they were when they deal of it owned by the Federal Farm Board; and who know were on the free list. that the cold-storage houses of the land are laden with Where are you going to start to lower the tariff? I ask food products, and who read in the papers that in 1929 Henry you. It will not do you any good to lower the tariff on man- Ford made $49,000,000, and who read in the papers that the ufactured articles made in our industrial districts and keep estate of George Baker amounted to $86,000,000, and who the increased duty on agricultural products. I say to you read in the papers that the estate of Payne Whitney, now that in my own district at this time more than 15,000 work- being administered in the surrogate's court in New York, ing inen are unemployed who buy your agricultural products amounted to $225,000,000. I wonder if these 6,000,000 people when they are at work, and anything you do that will tend · are not sympathizers with the communist philosophy when in any way to destroy American industry and American they face the prospect of suffering this winter. labor will hurt your agricultural interests. [Applause.] The unemployment problem is a problem of government [Here the gavel fell.] that the Nation expects this Congress-the most important Mr. ARNOLD. Mr. Chairman, I yield 15 minutes to the Congress, I think, since the war Congress-to grapple with, gentleman from Ohio [Mr. SWEENEY]. and I am surprised that the message of the President of the Mr. SWEENEY. Mr. Chairman, ladies and gentlemen of United States is silent on this matter except in an indirect the committee, I am a new Member of this body. I trust way. He talks about the proposed Federal home discount you will not think I am presumptuous if I extend to you a banks, and I say to you frankly, I do not know what my compliment and in the same breath try to criticize you. My colleagues will do in this direction, but I have a sympathetic observation is that when you are sitting in Committee of approach to this problem that will release these frozen the Whole you are very attentive and the gallery is able credits, revive industry, and reach the great objective-the to hear what you are saying and the Members can hear what abolition of unemployment. If it does this, I can very con­ you are saying; but when you are resolved back to the regu- scientiously supuort a measure of that kind regardless of the lar order of business, as I observed the other day, we find a side from which it comes. But, mark you, the Nation expects great deal of confusion. this matter of immediate relief to be given first attention: I tried to listen attentively to the debate on the important delay in this matter is dangerous and may incite revolution. matter of revision of the rules. I found a lot of chaos. I I am satisfied we can meet the emergency. LXXV--25 386 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 Let us approach this problem as the Nation expects us to were boys and girls who were in the grade schools when our approach it and arrive at a proper solution. I see nothing prohibition friends told us the next generation would never repugnant in asking the Federal Government to give imme­ know the taste of alcoholic beverages. Who were they? I diate aid to people when they are suffering and unemployed. saw the splendid body of men in the gallery to-day, the Many subdivisions of Government are doing that at the football team ·from Alabama, and I heard my friend BLAN­ present time. TON from Texas make reference to their habits, claiming The gentleman on the other side from South Dakota, if that they would not be football players unless they abstained he did not coin that phrase, repeated the phrase attributed to from alcohol; but I have seen football players and boxers the President of the United States-no one has starved, no and wrestlers and strong people who now are the victims of one will starve. I challenge the gentleman and I challenge "canned heat," "raisin-jack," "lightning," and all these the President of the United States to say that there have other picturesque terms that have gotten into the vocabulary not been any undernourished men, women, and children, of the American people since prohibition. Chaos and law­ and that there are not now undernourished men, women, and lessness rise up to challenge the very existence of govern­ children, and that there will not be undernourished persons rnent itself, yet men here in this Hall refuse in a democracy during the coming winter. Undernourishment is malnutri­ to even submit the question back to the people to get an tion and is only a stepping-stone to starvation. expression of the people themselves. I am ·afraid that I I heard the gentleman from Alabama [Mr. HuDDLESTON] am going to witness some degree of hypocrisy in this im­ state a case in point when he talked about the indirect dole portant assembly. I hope there is courage here, and I hope by community chests and charitable organizations that ad­ there is no group that·will control anybody. I hope you will vocate the giving of a basket of groceries and secondhand throw off the shackles of the Anti-Saloon League that has clothes to these people, and the gentleman told you of a cowed and deluded you for years because of the assumed case where a family of five were living on $4 a week. Does fear that they might go back to your constituents and get not this bring about undernourishment? The workingman your political scalp. I say, let us get together on the con..: does not want a basket of groceries or cast-off garments. structive program; let us be fair and honest. We have to He wants a chance to work. He wants a chance to buy his undo the things that you did on the Republican side for 10 own groceries, to buy his own clothes, and to look after his years under Coolidge economy and Hoover prosperity. It wife and children, so that they may have new clothes once is going to be a mighty hard task, but we will meet it with in a while, be they of gingham, satin, or silk, or any other a good spirit, and we are going to be successful. I want to material, and he wants the opportunity to secure some of be honest with the Members of this House. I want to be the comforts of life and save for the inevitable old age. respectful to the Members of this House on any given ques­ The problem of the unemployed man must receive solu­ tion during my tenure here. In debate sometimes we will tion at the hands of this body over any other legislation become heated and make references we should not make; submitted. but in the noble spirit of American fair play, the spirit that My friend from Ohio [Mr. CooPER], who preceded me, is has always characterized the gentlemen of this House, which an ardent dry, a sincere dry. I pay tribute to his sincerity. has been designated as the greatest deliberative body in the He is not that type of a dry who goes to the wash room, world, I am sure fairness and courtesy will prevail. If I takes a drink of liquor, and then comes· back on the floor have said anything that may seem offensive to any of you, I and votes dry. He is honest. There are a few of that type apologize, and thank you for your attention in this my left. He said that prohibition was one of the important initial appearance.· [Applause.] _ questions before the American public. Mr. PURNELL. Mr. Chairman, I yield 30 minutes to the I am also concerned with the attitude of the President gentleman from Pennsylvania [Mr. McFADDEN]. [Applause.] of the United States. I am surprised that he has made no Mr. McFADDEN. Mr. Chairman, the course of a dream mention of this question of prohibition. Perhaps he is of takes its way, often with great vividness and clearness of the opinion, as he always has been, that this is a ,noble incident, but always wholly free from 'those limitations of experiment. At least he characterizes it in this fashion logic involved in the sequence of cause and effect which are for political reasons. Now, when we are spending $35,- imposed upon our waking faculties. The authors of the 000,000 to enforce a law that can not be enforced, and are Arabian Nights and of Alice in Wonderland succeeded in a coming close to a deficit of $2,000,000,000, this great engi­ large degree in captm-ing the elusive dream quality and in neer is silent. setting it down on paper. Where is the statesmanship, where is the leadership? I Something, I think, of this dream quality has infused wonder what AI Smith, Governor Roosevelt, Governor itself into this period in which we are living. It is so rich Ritchie, or Newton D. Baker would do under such circwn­ in novelty and surprising incident, pleasing or otherwise, stances. I trust that when the Seventy-third Congress that life tends to bewilder the onlooker, to influence him at opens that we shall not be .in the condition descrit>ed by the times to confuse cause and consequence, or to look on; in­ schoolboy but that the state of the Union shan be sound different, without even making the effort to ascribe a cause and healthy. to an event or to dispute the accuracy of an alleged cause. Mr. BRITTEN. Will the gentleman yield? It makes it much easier to prove something that one desires Mr. SWEENEY. I will yield to the gentleman. to have Proved, just as it did in Alice's Wonderland. Mr. BRITTEN. Does the gentleman state that his party And if the multiplicity of sensations with whicb. the course on that side will give this House an opportunity to vote on of ordinary private life is now attended confuses in a meas­ the prohibition question? ure the reasoning powers, how much more powerful must be · Mr. SWEENEY. I am coming to that. I think we have the force of international incidents, piling one upon another, as many drys on this side as you have on that. in their impact upon the mind of the public official. This, . Mr. BRITI'EN. Mr. Chairman, will the gentleman yield perhaps, may account for certain inaccuracies which may for one further question? be detected in reports of high officials and even in the Mr. SWEENEY. I shall do it after a while. Mr. Chair­ messages of the Executive to the Congress. man, I come to this Congress from a law court. I resigned Before final action is taken upon the measure now before my seat on November 4. Up until that time, from the first the House I shall have some further remarks to make, but of the year, in my city I have had before me almost .25,000 I wish to-day to confine myself to the message of the Presi­ individuals charged with intoxication. The court to which dent on the moratorium and to point out some things in it I was attached in 1929 had 32,000 individuals charged with which have bearing upon the remarks which I have just intoxication in that year-almost as · mu$ as the entire made. country of England had for the same violations in the same The first 10 paragraphs are a quotation from a public given year. Among those 32,000 were boys and girls from statement which the President made on June 20 last, when clean homes, respectable homes, from the homes of many he first proposed a suspension of payments on war debts. whose parents were ardent prohibitionists. The average age .They, of course, tell us nothing that we did not know on of those· charged was 25 years, demonstrating that they June 20. 1931 CONGRESSIONAL RECORD-HOUSE 387 · Nearly six months have passed since then, during which, The ·things that I am going to discuss now are all hear- presumably, the customary cataract of picturesque incident say. Their evidential value is so much lower than that of has continued to flow; but if anything has happened bearing the information which comes to this body in a message on the President's proposal of June 20, he does not inform from the President that perhaps I ought to ask the forbear­ the Congress of it. Presumably nothing that had an im- ance of the House for their somewhat lengthy presentation. portap.t bearing upon that proposal took place or he would It is a series of statements made in various newspapers con­ have taken care to inform the Congress in this message. cerning international events, particularly those between The first statement be makes, not a quotation from his June 20 and August 11 last. The contents of newspapers. statement of June 20, is in the eleventh paragraph, and is as we know, are not always reliable, and I beg that you will as follows: bear in mind that I do not vouch for the truth of these All the important creditor governments accepted this proposal. events. However, as these things were printed in only a. The necessary agreements among them have been executed, and few of the newspapers of the country, and as some of the creditor governments have foregone the receipt of payments due Members may not have seen them, or seen all of them, it them since July 1, 1931. may be of interest to state them here. This, Mr. Chairman, is all that the President tells us. And The first is the full text of a Franco-American war-debt he asks that a law be enacted before next Monday author- accord, approved and initialed on July 6. The first two izing the Secretary of the Treasury to postpone the pay- paragraphs are the only ones which need interest us. They ments, and to provide for their payment over a 10-year are: period. He also states that it will be necessary to make still 1. The payment of intergovernmental debts is postponed from further temporary adjustments. July 1, 1931, to June 30, 1932. For myself, I confess just now to feeling a kinship with 2. However, the Reich will pay the amount of unconditional annuity. Alice as she looked about her in Wonderland. The Queen and others were quite pleasant and patronizing, and while It appears from the press reports that Great Britain, they did some strange things they were often quite generous. Belgium, Italy, and other countries had promptly ratified the There seems to me to be something of this same sort of gen- Hoover moratorium of June 20. When, therefore, the erosity when the Executive reminds us that the Congress United States and France made a treaty agreement sub­ has shared in the past the consideration of questions arising stantially changing it, it became necessary for the govern­ from these debts, and states his confidence that it will com- ments which had already acted on the proposal of June 20 mend itself to the Congress that the legislative branch of to reconsider their action. Therefore, the experts met at the Government should continue to share this responsibility. London and signed the text of a protocol with Germany In dreamland, no doubt, the Congress might choose not to on August 11, to be ratified by the Governments of Belgium, continue to share this responsibility, but in our waking France, Germany, Great Britain and North Ireland, Italy, hours we are held to it by the requirements of the Con- . and Japan. The preamble read as follows: stitution. Whereas on June 20, 1931, the President of the United States of Mr. Chairman, officially nothing has happened in inter- America made proposals for the suspension of intergovernmental 1 1931 national affairs since June 20 last affecting the proposal of ~:~ :f~.lli~~2~~~~uring the year extending from July • • to the President to foreign governments on that date. It is the Whereas the governments signatories of the present protocol proposal that he made then that he now asks us to ratify. have accepted said proposal and have agreed to apply them in If any important modifications had been made, he would particular to the obligations of the German Government under the agreement signed at The Hague January 20, 1930; and have told us in this message. How else would we be Whereas the French Government and the Government of the informed? United States of America concluded an arrangement on this sub- Let us see, then, what the agreement with foreign govern- ject at Paris on July 6, 1931; and Whereas it is accordingly necessary to provide for the application ments, as explained to us in this message, is. It reads as of the new plan in the conditions thus created; follows: And in view of the report dated August 11, 1931, drawn up by the experts who met in London for this purpose; The American Government proposes the postponement during The undersigned, duly authorized to that effect, have agreed as one year of all payments on intergovernmental debts, reparations, follows: and relief debts, both principal and interest, of course not includ­ ing obligations of governments held by private parties. Subject to The protocol consists of eight articles which are too long confirmation by Congress, the American Government w111 postpone to quote here and which deal with the conditional and the all payments upon the debts of foreign governments to the Ameri­ unconditional annuities of the German reparations. They can Government payable during the fiscal year beginning July 1 next, conditional on a like postponement for one year of all pay­ apparently implement the shorter Franco-American agree­ ments on intergovernmental debts owing the important creditor ment of July 6. powers. Mr. Chairman, i§ not the presentation to the Congress of This is the agreement which we have before us to ratify, a ·message like this a ridiculous spectacle? Has the Con­ and you will note that it postpones all payments on inter­ gress of the United States ceased to be a coordinate branch governmental debts and reparations. It postpones payment of Government, has its dignity so shrunk, and has its judg­ on all German reparations, and in connection with them the ment become so negligible that it may be treated with as President states his views, as follows: scant courtesy as any European monarch might show to his I wish to take this occasion also to frankly state my views upon parliament when dealing with a foreign question? This our relations to German reparations and the debts owed us by the message does not only ignore and omit vitally important and Allied Governments of Europe. Our Government has not been a essential elements of the agreements made with foreign party to, or exercised any voice in determination of, reparation obligations. We purposely did not participate in either general governments; it conveys the impression that ratification is reparations or the division of colonies or property. The repay­ asked of the agreement proposed on June 20 last when, in ;ment of debts due to us from the Allies for the advance for war fact, that agreement has been superseded by an entirely and reconstruction were settled upon a. basis not contingent upon (Terman reparations or related thereto. Therefore reparations is different one. hecessarily wholly a European problem with which we have no Mr. SUMNERS of Texas. Mr. Chairman, will the gentle­ relation. • • • We are not involved in the discussion of man yield? strictly European problems, of which the payment of German Mr. McFADDEN. I would like to yield, but I want to get reparations 1s one. through with what I have to say. I have now set forth everything that the President's mes­ ·Mr. SUMNERS of Texas. Will the gentleman in that sage contains upon this subject. When we ratify, we will connection state under what authority the President of the have ratified the agreement of June 20 in its pristine purity, United States made the proposition to which he refers, con­ unmodified by any subsequent agreement; and we have the stitutional or otherwise? President's assurance that we have not been a party to, or Mr. McFADDEN. The gentleman is a constitutional law­ exercised any voice · in, determination of reparation yer, I am not; perhaps before the debate is over that ques­ obligations. tion may be answered. 388 CONGRESSIONAL RECORD-.HOUSE DECEl\iBER 11 · If this body is to have before it the information that is the Congress before action is taken. It is not a question of essential to an intelligent judgment, the agreement can not sentimental considerations, it is not a question of sympathy be ratified by next Monday or Tuesday. It ought to be for the Allies with whom we were associated in the war, or subject to free and open debate and its scope and meaning of sympathy for or hostility to Germany, whom we fought clearly brought out. as an enemy during the war. It is purely a question of the It was not intended under the Constitution that the con­ international position of the United States and of the wel­ trol of foreign policy should pass out of the hands of the fare of the American people. Congress. A distant war on the Continent of Europe vested Every competent observer to-day knows that French policy the Executive with extraordinary powers, and some occu­ aspires to dominate all of capitalist Europe, not at the vol­ pants of that office since then have seemed desirous of untary invitation of the numerous nations there, but by the retaining in peace time functions which only in war time aggressive use of arbitrary financial power and by the threat pertain to that office. of military force. Every competent observer knows, also, Throughout the last session I urged with the greatest that as a result of the Franco-American accord of July 6, earnestness that attention be focussed more closely on the which we are now asked to ratify, and of the visit of Premier character of the peace agreement with Germany, because Laval to Washington, the French Government and the of the fact that the peace terms which brought the hostili- French press are proclaiming the establishment of a com­ . ties of the war to an end had been negotiated by an Ameri­ mon policy of France and the United States. They know can President. The settlements of the definitive treaty made also that if this common policy does exist, there is nothing eight months later differ in an extraordinary degree from for the other nations of Europe to do but to submit to the the agreement that brought the fighting to an end. Mr. French power, not because of the strength of France alone, Chairman, the question whether the treaty of Versailles vio­ but because of the strength of the United States which lated the preliminary agreement negotiated by President stands behind her policy. Wilson will not down. It is the question which has kept the The French plans for the organization and administra­ Continent of Europe in fearful turmoil and agitation for 13 tion of the political life of the entire capitalist part of the years, and unless it is answered, and answered in accord­ continent, under the guise of administration by the League ance with truth, it will keep that continent in turmoil for of Nations, are taking definite form. The program for 13 years more. French foreign policy, as outlined to the deputies by former The London ultimatum of 1921, the Dawes plan of 1924, Premier Herriot, is _as follows: and the Young plan of 1929 are all predicated upon the First. International organization of the production and dis­ assertion that the treaty of Versailles was legitimately ob­ semination of goods. tained and that it did not violate the agreement with Ger­ Second. Simultaneous reduction and controlled limitation of armaments. many negotiated by President Wilson. Why is it that these Third. Extension of the powers of the League of Nations, and European settlements should have had the effect of agitat­ organization of international security, notably by: ing American opinion so continuously through the years? (a) The internationalization of commercial aviation and placing at the disposition of the League of Nations of all m111tary aircraft. Why, if German reparations do not concern us, are we now {b) Internationalization of lines of railway and navigation making treaty settlements concerning the Young plan? which could be utilized for the mobilization and transportation It is because the moment we recognize by treaty settle­ of troops. {c) Absolute prohibition of the private manufacture and private ments the validity of the Young plan, which the European sale of arms, munitions, materials, and engines of war. Governments adopted by treaty settlements at The Hague (d) The organization of an international control which will last year, in the same moment we recognize the validity of render these internationalizations and prohibitions effective. the treaty of Versailles, which up to this time we have not (e) An armament truce such as may be decided upon by the done. We recognize the validity of the treaty of Versailles, League of Nations. because, by descent through the London ultimatum and There would be a vast difference between a powerful the Dawes plan, the Young plan gains its validity solely from League of Nations possessing the powers above outlined, and the Versailles settlement; and we become a party to that created by the spontaneous and voluntary agreement of all portion of the treaty of Versailles which deals with German the States of Europe, and an organization of this kind set up reparations, because the Young plan puts that portion of the and imposed by French power upon unwilling nations. treaty into effect. Which sort of a League of Nations is it that the French have It may be that the Coilc,aress, even at this late date, is in mind, and if it is the latter type, to what extent do they willing to give its blessings to the reparation settlements of count upon the Franco-American accord of July 6 to make the treaty of Versailles. It is the goal for which the allied it effective? governments have striven for 13 years. For the first time Gentlemen, stop and think this over before you vote for in 13 years this would give stability to the status quo in the moratorium, and insist on getting the information that Europe, but that stability would be obtained solely because lies back under the cover and screen of this message. the moral force of the United States, backed by its military Mr. Chairman, unless the Congress is prepared to abdi­ power and by its financial power, guaranteed it. And, Mr. cate its constitutional authority to fix foreign policy, it is Speaker, let us not deceive ourselves; we would have a task imperative that it withhold ratification from agreements that would tax our energies and resources to the utmost. with foreign states about which the Executive is secretive If there is a majority opinion here for American ratifica­ and concerning which he fails to take the legislative branch tion of the reparation settlements of the treaty of Versailles, into his confidence. Hasty ratification of such agreements let us discuss the matter openly and determine in_a frank must lead inevitably to the sinking of the legislative branch and rational way why it is that we deem it best to take that from the proud position which it has always occupied in the action. If we deliberately desire to accept the principle of Government of this country and which is unique among the commercialization of the German reparation bonds, let us governments of the world. affirm that fact in open session and spread on the RECORD Behind the insincere and sentimental governmental pro­ the logical reasons for adopting that principle; let us make tests of devotion to international peace and of renunciation it plain to ourselves and to the American people how great is of war as a national policy there is going on in Europe to­ the size of the bond issues which the international bankers day as fierce and ruthless a struggle of national interests will be permitted to offer here and what will be the political and illegitimate ambitions as has characterized any earlier implications of their ownership by the American public. period of history. Similar struggles were taking place there To me there are strong reasons why we should not become when this Nation was in its infancy, and at that date its a party to The Hague convention, as we will do if we ratify statesmen adopted a firm policy of standing aloof from the settlements now before us concerning the Young plan; those· struggles and of making no alliances with foreign why we should not in this way ratify the reparation settle­ states. That early policy has met the approval of successive ments of the treaty of Versailles; and I hope that there generations, and it is the wish of the American people to­ will be opportunity for me to place these reasons before day. They look to their representatives in Congress to 1931 CONGRESSIONAL RECORD-HOUSE 389 maintain it, and to exercise all necessary yigila_nce _to see DAVID I. WALSH, THoMAS J. WALSH, JAMES E. WATSON, and by the following Representatives: IsAAc BACHARACH, JosEPH W. BYRNS, that it be nat infringed upon. There is need that we now CARL R. CHINDBLOM, FRANK CROWTHER, JAMES W. COLLIER, CHARLES examine more critically the policies of our State and Treas­ R. CRISP, THOMAS H. CULLEN, GEORGE P. DARROW, HARRY A. ESTEP, ury Departments, and the activities of an irresponsible WILLIS C. HAWLEY, CARL E. MAPES, J. C. McLAUGHLIN, EARL C. financial power which has been given shelter within the MICHENER, C. WILLIAM RAMSEYEB, BERTRAND H. SNELL, JoHN Q. portals of those departments. Tn.SON, ALLEN T. TREADWAY, and Wn.L R. WOOD. It has been approved by Ambassador Ch~rles G. Dawes and by Mr. Owen D. This measme before us needs examination. Ratification Young. of it is fraught with momentous consequences. Bearing The purpose of this action is to give the forthcoming year to 1n mind what we know to be the sentiment of our con­ the economic recovery of the world and to help free the recupera­ tive forces already in motion in the United States from retarding stituents, let us accord it· a thorough consideration, and ap­ influences from abroad. proach it· with that due deliberation which its importance The world-wide depression has affected the countries of Europe demands and which is consistent with the dignity of the more severely than our own. Some of these countries are feeling to a serious extent the drain of tffis depression on national legislative branch of the United States Government. economy. The fabric of Intergovernmental debts, supportable in £Applause.] normal times, weighs heavily in the midst of this depression. Mr. Chairman, I ask unanimous consent to revise and From a variety of causes arising out of the depression, such as extend my remarks and to include therein certain excerpts the fall in the price of foreign commodities and the lack of con­ fidence in economic and political stability abroad, there is an from the debates in the French House of Deputies on this abnormal movement of gold into the United States, which is lower­ particular. subject. ing the credit stability of many foreign countries. These and the The CHAIRMAN. Is there objection? other difficulties abroad diminish buying power for our exports and, in a measure, are the cause of our continued unemployment There was no objection. and continued lower prlces to our farmers. Mr. McFADDEN. Mr. Chairman, under leave to extend my Wise and timely action should contribute to relieve the pressure remarks in the REOORD, I herewith insert the following. of these adverse forces in foreign countries and should assist in the Because of the colloquy that took place in the debate reestablishment of confidence, thus forwarding political peace and economic stabllity in the world. ' · to-day, I am placing in the RECORD an _extract from the Authority of the President to deal with thls problem is limited, debate in the French House of Deputies pertaining to the as this action must be supported by the Congress. The President matter. has been assured the cordial support of leading members of both parties 1n the Senate and the House. The essence of this propo­ One of the French Senators, Dominique Delahaye, did sition is to give time to permit debtor governments to recover not mince matters when he spoke. Among other things, their national prosperity. I am suggesting to the American people he said: that they be wise creditors in their own interest and be good Gentlemen every time you have been on the point of a capitu­ neighbors. lation I have' ascended this tribune in order to say to you, "You I wish to take this occasion also to frankly state my views upon our relations to German reparations and the debts owed to us by are making a mistake." the allied Governments of Europe. · Our Government has not been I have never been able to convince you, and thus, from mistake a party to or exerted any voice in determination of reparation to mistake, from capitulation to capitulation, you have come. to obligations. the point of being led by the nose by a gentleman named Hoover, whom you confound with the United States, as if the United We purposely did not participate in either general reparations or States and Mr. Hoover were not absolutely

" But, being glv~n the nature of the engagements of the Young PARIS, June 26, 1931. plan, freely accepted and quite recently subscribed to, the solem­ Mr. MlNISTER. I have to-day received !rom my Government a nity with which was recognized the definitive and unalterable char­ telegram reading as follows: acter of the unconditional annuities by which the necessary per­ "The American Government appreciates the cordiality with manence of the principle of reparations was expressed (very good! which the French Government has replied to the proposa! of the very good!], the risk of shaking confidence in the value of signa­ President. It hopes that the French Government will profit by tures and of contracts (very good! very good!] and thus of going the presence of the Secretary of the Treasury, in order to discuss against the end aimed at would be great, if, in the proposed sus­ with him and with the ambassador the different problems raised pension of payments, the udalterable annuity were treated like the by the original proposal of the President and t.he French reply. conditional annuity. (Applause.] The ambassador and Mr. Mellon have received full information "The French Government emphasizes in particular that a formal concerning the views of the American Government." assimilation has been established between the private debts of Accept the renewed assurance of my high esteem and my best the Reich (Young loan and Kreuger loan) and the unconditional sentiments. annuities not yet mobilized. To suspend the payment by Germany WALTER E. EDGE. of the unconditional annuity while admitting that the Young loan M. GRATIEN CANDACE. There is no further need for debate. placed with the public should continue to be served would go DISCUSSION OF SEVERAL INTERPELLATIONS ON THE AMERICAN PROPOSAL directly against a fundamental principle and express stipulations. CONCERNING WAR DEBTS [Very good! Very good!] The PRESIDENT. The order of the day calls for the discussion of "The Government, then, considers that a moral interest of the the interpellations: first order is attached to thiS: That, even during the delay provided 1. Of M. Margaine on the situation created by the decision taken for by President Hoover, the payment of the unconditional annuity by the Government of the United States to propose the suspension should not be altered in any way. during one year of the payment of war debts; "The French Government, desirous of collaborating generously 2. Of M. Dubois on the attitude which the Government. expects in every effort made to lessen the consequences of the present to adopt toward the American proposal relative to the war debts; crisis, believes that it ought to point out, even in the interest of 3. Of M. Louis Marin on the participation of France in the the success of this effort, that the general suspension of payments negotiations which have resulted in the declaration of the Presi­ alone would not offer a sufficient remedy. The dangers threaten­ dent of the United States, on the exact sense of he proposals ing German economy and more generally European economy at which it contains, on the negotiations which are the result of it, the present time have a different origin and are related, notably, and on the procedure which the Government will adopt in order to important restrictions of credit or to withdrawals of foreign that the chamber may pronounce its views with a knowledge of funds. The solution of the German crisis does not seem, therefore, the matter before any engagement is made, conformably to the to rest only in a diminution of the charges in the budget of the recent promise of the president of the council; Reich but in an extension of credit. 4. Of M. Nicolle on the proposal of President Hoover in view of "This is why the French Government declares itself ready, our economic situation; under the reservation of the approbation of Parliament, to put at 5. Of M. Pierre Cot on the measures which the Government ex­ the disposal of the Bank for International Settlements a sum pects to take in order to insert the proposal of Mr. Hoover in a. equivalent to its part, for one year, of the unalterable annuity, plan for the economic reorganization of Europe; under the single reservation of· the sums necessary for the execu­ 6. Of M. Camille Planche on the opportunity for France to tion of the remainder of its contracts of loans in progress at the avail herself of the proposal of President Hoover in order to bring present time, which is, furthermore, useful for German economy. about an1effective policy of disarmament; "In making this proposal the French Government expects that 7. Of M. Leon Blum on the situation created by the offer of the other beneficiaries of the Young plan will take the same President Hoover; decision, and it even hopes that other measures may be taken 8. Of M. Bergery on the measures to be taken to attach the to favor the useful reestablishment of credit and of confidenc~ in reply to the American proposal to a common policy in regard to the world. Germany; "The funds thus paid to the Bank for International Settlements 9. Of M. Marcel Heraud on the attitude which the Government may be immediately utilized for the amelioration of credit in Ger­ expects to take in regard to the proposals formulated by President many, as well as in the countries of Central Europe, and notably Hoover relative to a suspension of the payment of war debts; in those in which the suspension of the execution of the Young 10. Of M. Xavier Vallat on the exact practical significance of plan, during one year, might create financial or economic distress. the proposal of :Ml". Hoover and of the reply which has been given {Very good; very good.] It _goes without saying that the amounts to him by the French Government; thus employed will become payable again at the expiration of the 11. Of M. Pezet on the spirit and the positive plan according to period of one year provided for as the limit of the provisional sus­ which the Government intends to reconcile respect for our rights pension of the Young plan. and the balance of our economy with a policy of economic collabo­ ration between peoples and of moral disarmament, which are "The French Government is equally oft~ opinion that all use­ ful precautions should be taken so that these sums, as well as equally indispensable to perfect international security, a policy those to come from the lightening of the budget of the Reich which would be the justification of the sacrifices conceded in the resulting from the suspension for one year of the payments of the reply to the proposal of President Hoover; Young plan, can not be utilized save for economic ends [very good; 12. Of M. Thebault on the inspiration, the exact sense, and the very good], all danger of the financing of dumping being set aside. result of the American proposal of President Hoover. {Very good, very good.) M. JEAN MisTLER. We request a suspension of the session. The PRESIDENT. M. Mistler requests a suspension of the session. •• Finally, it would be opportune to provide, before the expiration M. Mistler has the floor. of the delay of one year, for an examination of the measures to be M. JEAN MISTLER. I should like to justify, in a few words, the taken by Germany for the resumption of her payments. request for suspension which we have presented. "The proposals of the French Government and the adjustments The Chamber has just listened with great calm and extreme which the putting into practice of the American offer will suggest attention to three very important documents, two of which, at and which will necessarily form the subject of a further exchange least, are entirely new. of views thus appear perfectly compatible with the dominant idea My colleagues will undoubtedly be unanimous in judging, with of the proposal of President Hoover. me, that it is not sufficient for us to have heard such documents " In placing at the disposal of the Bank for International Settle­ read once in order to form an exact opinion concerning their con­ ments, upon the conditions stipulated in regard to this matter, her tents and that at least a summary examination of their text 1s part of the unconditional annuity, France will be deprived during indispensable to us before taking the exceedingly grave decision the period of suspension of what was assigned to her by virtue of before which this assembly will find itself placed. [Applause.) the expenses she had to undergo for the restoration of her dev­ NUMEROUS VOICES. Suspension I astated regions. From VARIOUS BENCHES. Till Tuesday! "Without wishing to insist on the difference between the sums The PREsiDENT. The President of the Council has the floor. she has received and the sums she should have received, France M. PIERRE LAvAL, President of the Council, Minister of the Inte­ recalls the fact that the total of her public debt amounts to-day rior. If it is simply a question of suspending the session in order to about four times that of the debt of the Reich and that her to permit the Deputies to acquire a more complete knowledge of attempt at financial rehabilitation, pursued and realized by her the documents which I have just read, I declare myself in full own means, barely four years ago, should not be placed in accord with the Hon. M. Mistler. [Very good! Very good!l jeopardy. [Applause.] If, on the contrary, it were a question of postponing the debate " The French Government is, then, able to affirm the solidarity to another day [No! No!], I declare that the Government, being of the French Republic and 9f the Republic of the United States, in the midst of negotiations, could not admit anything but that an in the moment in which, faithful to their traditions, the two immediate solution should be given to this debate. countries are cooperating in measures of safety in a crisis con­ we wish to know what the principles are which Parliament sidered t o be grave. They have the right to hope that their inter­ intends to establish for the conduct and accomplishment of the national good will will be answered by respect for treaties and by negotiations which are in progress. [Very good! Very good!) the restoration of confidence among peoples-conditions of the The PRESIDENT. Until what hour does the Chamber wish to future of peace." . [Applause.] suspend the session? . M. HENRY FRANKLIN-BOUILLON. And now, Frenchmen, pay three NUMEROUS VOICES. Until 4 o'clock. milliards ~pore of taxes! The PRESIDENT. There is no opposition? The session 1s sus­ The PRESIDENT OF THE CouNCIL. Here, now, is the letter Which pended until 4 o'clock. the ambassador of the United States has addressed to the Minister (The session, suspended at 25 minutes past 3, was resumed at of Foreign Affairs: • o'clock.) i931 CONGRESSIONAL RECORD-HOUSE 391

RESUMPTION ()J.I"' THE DISCUSSION OF THE INTERPELLATIONS ON 'rliE overturned all its traditions s1mply because Mr. Mellon, making fiMPO~Y SUSPENSION OF THE SE'l"I'LEMENT OF WAR DEBTS a pleasure journey, had a conversation, by accident, with Mr. Mac­ Donald. No. There is--let us say it and let us know how to The PREsiDENT. We return to the discussion of the interpella­ see i~omething quite different. tions. Besides the man in the street of whom I have been speaking M. Margaine has the floor, in order to develop his interpellation. there are American business men who have dealings with Europ~ M. M.ARGAINE. My colleagues will be kind enough to permit me, and, above an, with Germany, and who, since very short time in the interests of clarity, to which I am particularly attached, to ago, have had serious reasons for disquietude. define in the most precise manner possible the position which I In the United States itself there have been some characteristic wish to take in this debate. occurrences, with which the press has concerned itself and of I will not examine the basis of the proposal of Mr. Hoover. which I shall permit myself to cite some examples showing that Just as Mr. Hoover can do notb.Ltlg without his Congress, so the in that country there is an internal evolution which is not without French Government, since the Young plan is the result of a law, a cezot.ain gravity. can do nothing Without Parliament. I will, then, wait for the proposed legal bill in rder to discuss the basis. All these events, of which I shall cite some, have been set forth .What I should like to examine to-day is the entirely novel situa­ by the Democratic press . tion resulting from the abrupt intervention of Mr. Hoover. There Recently in the Pittsburgh basin at Westland a thousand strik­ are, to begin with, surrounding that intervention, particular cir­ ing miners fought with mounted police. A policeman was beaten. cumstances, certain. obscurities, which I hope the Government in His comrades fired. Two miners were wounded. time will be so good as to undertake to elucidate. At Ellsworth a veritable battle took place between the miners The ambassador of the United States called Tuesday evening and the police of the coal companies. The women and children to state to the President of the Council that there had. been no fought with particular fury. discussion preliminary to the intervention ot Mr. Hoover. If lin Kentucky, at Evarts, mineTs and mine police had a pitched the heads of states have sometimes a language which is somewhat battle. There were killed on one side and on the other. brutai, diplomats, on the other hand, have a language which is In the State of West Virginia 1,500 miners came to Charles Town particularly fiexible. For, indeed. there are certain facts which and marched through the streets, demanding bread for their one can not do otherwise than to underline and which do not children. completely harmonize with such a declaration. The Democratic press has seized upon these facts. It denounces Mr. Mellon disembarked in England on the 16th. · The following the activities ot the magnates of the industry, and since his name morning he took care to make a declaration in which he stated is spread throughout its columns, I may well remark that at their that he was mald.ng a purely private journey, his only object being head it inscribes Mr. Mellon. to pass some days with his son, a student at the University of It was necessary for the United States that this situation should Cambridge. not grow worse, and tt would have grown worse tf in Germany Nevertheless ~ that same day the o11lcial newspaper-! may well events had entered upon an acute phase. It is at bottom the can tt tha~f the Labor government, the Daily Herald, explained German situation which is the origin of everything. that the American minister had come to Europe because Mr. I shall not return to the explanations given in this very place Hoover was convinced that it was necessary to do something in at the end of 1929, before the Government left for The Hague, regard to what concerned the war debts if one wished to avert when we put it on its guard against the constitution of a German­ a collapse disastrous for American financial interests. American industrial bloc, which was beginning to take on a The paper added that Mr. Hoover had in mind the idea of a certain solidity. suspension for two years of all payments of reparations and war Germany, thanks to the formation of this bloc, made important debts. As this subject had been abundantly treated at Chequers appeals to American capital. The statistics show us that from between the English and the German ministers, it seems to me 1926 to 1930 the public emissions of Germany a.broad~lmost all impossible that there had not been.. between Chequers and the in America-attained the sum of six milliards and a half of departure of Mr. Mellon, negotiations, communications, between reichsmark:s, and this sum does not include the direct investments the American Government and the English Government. The of Americans tn German industry. least that one could say is that the facts show that the newspaper, I find, in the same statistics, that tn 1928 the total of foreign the Daily Herald, was particularly well informed. capital invested in that manner in Germany was four milliards On the other side, Mr. Mills, Assistant Secretary of the Treasury two hundred and fifty millions of reichsmarks; in 1929 two mil­ o! the United States, saw the ambassador from England to the liards seven hundred and fifty millions. United states on the morning of June 20. It was after this visit Certain American financiers some months ago began ·to be that he returned to see Mr. Hoover and that the communication alarmed by this constant outfiow; their apprehensions are re­ was made. I have difficulty in believing that the ambassador vealed in the fact that in 1930 the capital funds thus placed in from England was summoned at that moment in order to be advised Germany barely attained the sum of half a milliard. of a matter of which he knew not the first word, after the com­ On the other hand, Germany has made a. great deal of noise munications whose certitude I have just made manifest. about her budgetary difficulties. One saw M. Hilferding give way Consequently, for my part, untn proof of the contrary-and I to M. Moldenhauer, then M. Moldenhauer give way to M. Diet­ will presently return to it-there were. in regard to the !acts rich, always because of the impossibility of establishing a budget, which have surprised us, conversations covering 20 days or so all this in the space of eight months. In spite of all these between the English and American Governments. changes the budget could not be established save by making use Contrary to what evil-intentioned char'd.cters have claimed, Mr. of article 48 of the constitution of Weimar; there was a legal Hoover is far from being an impulsive person. He is a man whose decree on the 1st of August, 1930, another on the 1st of December, character is well known. He studies much; he reflects much. All 1930, and a third quite recently. All these facts have powerfully his past is the proof of ft. If he has placed France before an shaken the confidence of the Americans. • accomplished fact, it is because he was told that it would be Just at the moment in which Mr. Mellon arrived in England necessary for him so to act in order to succeed qtiickly and well. the Reichsbank proceeded to enormous sales of gold and of ex­ But Mr. Hoover has done much more than that, and he has changes. It sold in the first fortnight of June one mi.llia-rd fifty certainly not done it lightly: He has broken with the traditional millions of reichsmarks, keeping only one milliard six hundred policy of the United States. Permit me to empha-size the impor­ millions; the legal reserve of the Reichsbank was very close to tance of such an attitude on the part of the President of the being reached. United States. During these same days in Berlin panic reigned. In the banks The American, the man in the street, does not trouble himself one sold, not banknotes--they had no more of them-but promises With questions of external policy. For him Europe is a small of ban)cnotes to be delivered in a fortnight. continent in which little nations, so numerous that one can not All this caused superficial observers to believe that Germ~y remember all their names, engage in rivalry, are jealous of one was struggling in the midst of grave budgetary di.fticulties. I say another. and fight. instead of bringing themselves !Jlto agreement " superficial observers-," for if the Americans had given themselves as the states of the great Republic of the United States have the trouble to read over the reports of their compatriot. Mr. done. Parker G11bert, notably the las-t, which is o:f May, 1930, they would The man in the street is satisfied, so far as externai policy is there have seen the affirmation, many times -repeated, that the concerned, to know that his Government is remaining faithful Germans will put order into their budget when they wish. [Very to certain doctrines which I Will summarily recall : The Monroe doctrine, the doctrine of Washington, the doctrine of John Hay. good! Very good!] But they do not wish it yet, because in order Qttite recently the Government of the United States, with a to make an end of the payments of the war debts it is necessary certain solemnity, on several occasions, declared that tt would that their budget should remain in disorder. [Applause on the not concern itself in European affairs. Permit me to recall some left, in the center, and on the right.) of the circumstances in which this affirmation has been made. M. LIONEL DE TASTES. It is useful to recall it. When the Europeans asked the Government of the United States M. MARGAINE. One speaks much in order to impress the world of to have itself represented at the Genoa conference, the American the considerable of German unemployed. Government officially replied that it did not wish to take cogni­ Consider what happens in the German villages. The children zance of the affairs of Europe. do not work with their parents, as is the case in France. They In 1922. when Lord Balfour sent the well-known note in which always go to work for a neighbor; exchanges are made and the he proposed the annulment of war debts, the American Govern­ young people are engaged by a contract of labor. They are salaried, ment replied that the a.frairs of Europe did not concern it; that only the salaries balance each other. When they retmn home, the the states of Europe had, to America, certain debts of an exclu­ work in the fields being finished, they are unemployed. This makes sively commercial character and that it would discuss them with up a certain number. [Various movements.) each of the countries separately. Consider, on the other hand, building workers. At all times in I can not admit that the executive power of a country which Germany these workers have never worked in the winter, even on is attached to such an extent to traditional doctrines COl!ild have ~he interior of houses, and theil" salaries have always been calcu- 392 CONGRESSIONAL RECORb-·HOUSE DECEMBER 11 lated in such a manner that in winter they might llve on their most natural thing in the world and they very firmly and very reserves. To-day these are among the unemployed. patriotically took that position. The Germans make a great matter of .their figure of 5,000,000 of Unfortunately England did not agree that one should make the unemployed. I am sure that when they come to regard it more abandonment of the project for an Austro-German customs union closely they will immediately reduce it by a million or a milllon a condition of the saving of the Kreditanstalt, and, in order to and a half at least. settle the matter, she took upon herself alone the burden of But all this GfJ'many does not Intend to change. For, if, under­ putting the bank back on its feet, but she found out by experi­ neath, she is tranquil, by .this means she disquiets the world; and ence that it would cost terribly dear, more dearly than she had we perceive that she does so. expected. Let us then take into account the fact that the economic situ­ The Bank of England on the 18th of June made to the Na­ ation of Germany is, at bottom, excellent. tional Austrian Bank, in order to sustain the Kreditanstalt, an The balance of German foreign trade is characterized, in the advance of 150,000,000 schillings, or £4,286,000. Unfortunately course of these last years, by a permanent active surplus. Of a for her, she was to discover that, on the one hand, it was very total volume of business of twenty-two milliards three hundred difficult for her to maintain for a long time hat lending position, millions of reichsmarks in 1930, the importations represent ten and, on the other hand, that even that sum, considerable as it milliards three hundred millions, the exportations twelve milliards, was, would not be sufficient, for the engagements of the Kredit­ in which are included the reparations in kind, for a sum of seven anstalt represented from 800,000,000 to 1,000,000,000 of schillings; hundred millions. With reference to 19..29 there is certainly a slight that is to say, from £24,000,000 to £30,000,000. lowering of exportations--twenty-six milliards eight hundred This burden which the English attempted to assume alone in millions--but, on looking closely, one sees that this diminution is order to hinder us from accomplishing our object bore heavily due to the lowering of prices and that the diminution of quantities upon them; they were, naturally, not grateful to us for it, and it ·- is excessively small, contrary to what is taking place in almost, all was not with displeasure that they saw impending an incident in the industrial countries. which we would find ourselves placed in a disagreeable position; The part which has diminished least among the importations thus they awaited events tranquilly, taking care to say nothing is that of manufactured products. This is a result contrary to to us concerning them. that which is reported in all the other industrial countries. Here, then-and I must excuse myself for having taken so In 1931, from · the very first months, the rising movement of long-is the description of the European setting at the moment German exportations began again. In the month of January, when the proposal of Mr. Hoover arose abruptly. 774,000,000 of reichsmarks; in February, 778,000,000 of reichs­ All in all, we are asked to deprive ourselves of important re­ marks; in March, 867,000,000 of reichsmarks. The increase atiects sources which are an appreciable element in our budget, but there especially manufactured products: January, 575,000,000 of reichs­ is in that an aspect which I do not wish to take up until we are marks; February, 591,000,000 of reichsmarks; March, 662,000,000 faced with a legal project. of reichsmarks. What I derive from the reply of the President of the Council 1s Germany, in spite of the world crisis, has attained the second that we are yielding. Very well. Only we yield very often, and rank among the exporting countries of the world, passing Eng­ it would perhaps be time to think of stopping. land, and she is not far from having first place. And I will permit myself to say to the President of the Council Where, then, does she sell all the products which she exports? although it is too late, since he has already replied to the United She sells them, above all, in three countries: England, Holland, States, that I should have preferred to see a prejudicial question and France. The United States comes far behind. The third put to Mr. Hoover: Is the United States, yes or no, disposed to country, France, buys from the Germans to the extent of return to involve herself in the affairs of Europe? [Lively applause 1,149,000,000 of reichsmarks; the United States to the extent from the left, from the center, and from the right.] of 685,000,000 only. If yes, let them send an official delegate; we will enter into dis­ Where, then, does Germany buy all she needs in order to cussion. If not, let them say so once and for all. Because--! work? From us? Not at all. She buys from the United States. ask permission to state my whole thought [Speak! Speak!]-it iB \For importations the United States is at the head with not possible for us to remain exposed every four years, when a 1,307,000,000 of reichsmarks. England comes next, but far behind, presidential election is approaching, to interventions of this kind. with 639,000,000 reichsmarks. • [Lively applause from a large number of benches.] Thus Germany, with- an industry always more prosperous, sells Oh, gentlemen, I know well that there is the immense service to Europe, buys from the United States. It is natural enough which the head of the United States says he has rendered to that the United States should concern itself in a particular man­ Europe. He has saved Germany from certain collapse, in which, ner in regard to her situation. evidently, a good part of Europe would have been involved. For that country, before committing yourselves, understand well But from where did that threat of collapse come? From the that, at bottom, there is nothing to fear. Her foundation is fact that Germany has been living for some years past on the solid-it is of rock. That which is floating is appearances, and short-term credits which the financiers of New York have been so they will disappear when she wants them to. [Applause from the good as to grant her, and the danger has come from the fact left, from the center, and from the right.] that these same financiers have withdrawn those credits in enor­ Her industry is the best equipped. Her trade is the best or­ mous amounts. ganized, technically. For her economic storms are only transitory. M. HENRI PATENOTRE-DESNOYERS. There is the truth. But she has sworn, first of all, not to pay reparations; next, to M. MARGAINE. Well, could not Mr. Hoover, the head of the rectify her eastern frontiers. You will not bring her out of that United States, have begun by asking the American financiers to idea. [Applause from the same benches.) • stop the enormous withdrawals they were making? [Applause I have said-for I am convinced of it--that there has been, at from the left, from the center, and from the right.] least in the general outlines, concert between England and Ger­ After all, it is the atiair of the United States. They should, per­ • many unknown to us. haps, have been able to begin by acting at home. Why, then, has England, our ally, our faithful ally, taken this And even since, in letting things proceed normally, the United position? States r~ceives important payments from Europe, Mr. Hoover Whatever our Government may have said concerning it, in the might, perhaps, have been able to use these payments for loans to course of a recent interpellation, the Anschluss was not, at bottom, Germany. [Very good! Very good! f.rom various benches.) Only, considered as a catastrophe by England. England is playing her in the United States, a gesture of that kind would not have been accustomed game--to maintain balance between the nations. She enjoyed in the same manner. [Applause.) does not care to have one nation surpass the others too much. So much for to-day. Will you permit me to examine what will At bottom, the Anschluss was a perspective which she was willing happen to-morrow? to contemplate. Herr Bruening, we are told, is comi.ng to Paris. So much the Only in regard to this performance--! do llot wish to call it better! The more we have frank conversations with our neigh­ either a drama or a comedy-something particular took place. bors the better it will be. (Applause.] You have all heard talk of the very grave crisis of the Kreditan- I imagine willingly enough the sense of these conversations. d~ . Herr Bruening is going to explain the situation of his country. I do not wish to enter to-day into too many details. Some other He will say that the war, the revolution, the occupation of the day, I hope, the Chamber will give me permission to show that the Ruhr h&ve caused capital to disappear in Germany. gravity of the crisis of the Kreditanstalt does not rest only in the M. HENRI PATENOTRE-DESNOYERS. There is still enough for the fact that a financial establishment has suffered passing difficulties condruction of cruisers. but in the fact that Austria, as she is constituted, can not live. M. MARGAINE. While there is, he will say, so much available This must be said. [Very good! Very good! from various benches.) capital in the world, she lacks current funds. However it may be, there was a crisis in the Kreditanstalt. He will explain that she can not find capital otherwise than I heard the Minister of Foreign Atiairs say from this tribune at short term unless she lives in a good understanding with that it was necessary in this matter to take account of the fact France, because then the world would feel itself reassured. that all financlal centers depend upon one another and that the What shall we reply to Herr Bruening? We will speak to him crisis of the Kreditanstalt could not in any way leave us indltier­ of Poland [Very good I Very good!] ; we will tell him that the ent. manifestations to which Germany has lent herself in regard to I note with satisfaction that our financiers here in Paris are at that country in the neighborhood of her frontiers are giving rise least a little better informed and that they did not attribute to to profound trouble there, that this trouble spreads throughout that event the dangers for France in which our minister seemed the whole of Europe, and that it is because of this very trouble to believe. that the world does not feel itself secure; that Germany can not When our Government asked them not to agree to lend their find long-term credits. support in order to save the bank except on condition that Austria I hear the answer of Germany. She will object that if, in the should reassure us in regard to her intentions -concerning the question of Poland, there were for the Germans only a question German-Austrian customs union, they replied that that was the of national pride, one could still come to the end of it. But 1931 CONGRESSIONAL RECORD-HOUSE 393 she wtll represent that, unfortunately, there are material ques­ In 1914, the invasion of Belgium, in violation of the treaties tions which themselves keep constantly alive that sentiment of of Belgian neutrality; the war during four years, accompanied by national pride. formidable and, to a large extent, systematic destruction on the Herr Bruening will tell you that the city of Danzig was for­ part. of Germany (applause); the treaty of peace of Versailles; merly the natural outlet of eastern Pomerania and that it is now the message from President Wilson of the 8th of January, 1918, irremediably separated from it. specifying the evacuation of the invaded regions of Belgium and He will tell you that not only does Danzig on her side see her France and their restoration, a message followed in reply to an situation profoundly altered but that on another side---and thanks interailled memorandum, by the declaration of November 5, to French capital-Poland is building at Gdynia a new harbor 1918, from Mr. Lansing, American Secretary of State, speaking in which will end by ruining the city of Danzig. the name of President Wilson, confirming again the fact that Ger­ He will tell you, again, that the fishermen of the coast of many, in any case, should repair the material damage done in the eastern Pomerania formerly supplied the Catholic population of invaded countries; clauses of the armistice of November 11, 1918, Poland and that now they no longer have any customers save the clause 9: ''Reparation of damage"; finally, the treaty of peace, Protestants of Germany, who hardly eat any fish, so that they are Parts VIII and IX, establishing the obligation of Germany to pay reduced to black poverty. And thus you will be led to see that for the damages which the allied nations, especially Belgium and there are these comprehensive questions, European questions. France, had been the victims of, through her action. You will approach others, you will make the tour of them, and The treaty of Versailles, Parts VIII and IX: "Reparations and everywhere you will run against the obstruction of European ques­ financial clauses," articles 232 and the following define the dam­ tions. Would it not be better to begin at once by examining a ages which should be repaired. European organization, of which M. Briand first spoke, but which, Here I will permit myself to call to your attention, in passing. for reasons I do not wish to analyze, he has not been able to the fact that the word ·~reparations " in the treaty has regard, realize? without distinction, to the payment of damages to goods and I have been very much struck by the remarkable results which damages to persons, these last taking the form, most generally, of the ministers of the states of central Europe obtained when, in pensions to assist the wounded and mutilated, the former soldiers. their distress, they met in a series of conferences which lasted only or their dependents. three months, which were terminated at Warsaw, and which The amount of these damages for which Germany was respon­ achieved the result that each of the governments recognized the sible was fixed, according to the terms of the treaty, by a commis­ necessity of organizing the exportation of its agricultural products sion called the Reparations Commission April 27, 1921, not at the and immediately succeeded in it. · London conference, as it 1s unceasingly repeated, but by the Repa­ Only, in these conversations they were not ·embarrassed by a rations Commission itself at Paris, after a very detaUed study, at secretariat general, thinking, hindering, composed of function­ 132 milliards of gold marks-802 mill1ards of present francs-which aries who were paid their weight in gold. They did not inVite, by the terms of the treaty should have been paid in 30 years. in order to ask their opinion, representatives of Japan, of Chile, You will say to me: "A fantastic figure," and so forth. That is of China, and of Peru. [Very good! Very good, from the right.] not the question. They talked between themselves, between men who are putting That is the amount by virtue of the treaty of the German repa­ their affairs in order. rations debt, and that is the initial figure of that debt. Let us do the same for the affairs of Europe. Let us understand Then the manner 1n which Germany was to discharge it-was ourselves directly, in silence. I may dare to say, I will even go so established. This was the schedule of payment called that "of far as to say, renouncing noisy acclamations, let us undertake London," which was, in fact, more or less elaborated at London, simple and practical conversations. It is only thus that we shall but which was equally established by the Reparation Commission be able to obtain the peace of Europe. and notice of it was given to Germany by the said commission at And if the journey of Herr Bruening can only end in this result, Paris May 5, 1921. gentlemen, we shall be able to felicitate ourselves upon it. The schedule of payments provided for very substantial payments [Lively applause from the left and on numerous benches. The by Germany, the delivery by her of bonds, of obligations capable orator, returning to his place, receives felicitations.] of being negotiated. The annuity, which was to vary according The PREsiDENT. M. LOuis Dubois has the floor, in order to de­ to the extent of the exportations of Germany, would have been velop his interpellation. actually in the neighborhood of 5 mill1ards of gold marks. M. Loms DuBoiS. Gentlemen, I have asked to interpellate the You know what became of this schedule of payments and of Government on the attitude which it expects to take in regard to the obligations of Germany. Repeated defaults on the part of the American proposal relative to war debts. Germany, occupation of the Ruhr, international difficulties, Dawes The Government has made a first reply to the American pro­ plan, and London conference. posal. It is not my intention to study that reply, which, in a cer­ The Dawes plan lightened considerably the obligations of Ger­ tain measure, would be of the nature of giving myself satisfaction. many. Without determining their number the annuities were My intention is to place as clearly as possible before the Cham­ established as very moderate in the beginning and becoming fixed, ber and before French public opinion-! do not dare to say world from 1928-29, at the figure of two thousand five hundred mil­ public opinion-the question of the Young plan and German rep­ lions of gold marks, which was susceptible to increase later, ac­ arations as it presents itself at the present time. cording to a certain indication of prosperity. What does President Hoover ask of us? What does he propose? You know that Germany discharged her obligations during the Knowing the difficulties in which Germany is struggling, finan­ first years, 1n which the annuity was very slight. But, from the cial difficulties and not, as M. Margaine has just demonstrated in year 1928, in which the so-called " normal " annuity was to a remarkable ma.nner, economic difficulties, financial difficulties in begin to run-2,500,000,000 of gold marks-Germany protested so which his American nationals were gravely interested, President strongly that, on the 16th of September, 1928, at Geneva, the Hoover, penetrated, I doubt not, by sentiments much more ele­ constitution of a committee of experts charged with the duty of vated and very generous, inspired by his passion for universal examining again the problem of reparations was decided upon. public welfare and for peace, makes certain proposals to Europe. This was the Young committee. on which the United States, in He declares himself prepared to give up for the benefit of Ger­ the person of her representatives, and particularly its president. many the amount of the payments which she makes, for the Mr. Young, played one of the most important roles. account of her European creditors, to the Bank for International From this came the Young plan, which, by virtue of the very Settlements, and which it pays to the United States in order to mandate given to the committee and by virtue of The Hague extinguish the war debts of the former associates of that coun­ accords, constitutes the "complete and definitive settlement of try. He proposes this for one year only. the problem of reparations." It is a gesture, to consider it only as a gesture, which is un­ From the financial point of view, the Young plan appears as deniably generous. He does not make it, however, without asking follows: from Europe, particularly from France, a return. Germany is to discharge her reparations debt 1n 59 annuities Germany, he tells us, pays important sums, some of which come paid into the coffers of the Bank for International Settlements, to me. America, some of which remain in Europe, all under the the trustee for her creditors. head of reparations. The figure of 59 annuities was chosen to fit the number of I ask that all the creditors of Germany, for the total amount annuities remaining to be paid to the United States of America of their credits and for one year, give up receiving these sums and to England for the settlement of their war debts due from from Germany, who, thus relieved of the burden of her war debt, their former allies and associates. will be able to return to the financial prosperity which is lacking Thirty-seven annuities are of a mean value or 1,988,000,000 of to her at the present time. reichsmarks--once and for all, I will recall the fact that the That is the thesis of President Hoover. I do not wish to study value of the reichsmark is 6.8 francs at par-and 22 annuities 1t or to discuss it. I ask myself simply what the repercussion are of a mean value of 1,564,000,000 of relchsmarks. of a consent given to the thesis of President Hoover and to his For the moment, there is no question except as regards the proposals may be for us, as much from the financial point of view 1931-32 annuity, but, before speaking of it, it is indispensable to as from the political point of view. [Very good! Very good!] lay stress on a particular point, the crux of the question which In order to expound the question clearly and to bring out the is to be placed before you; that is, the very clear distinction which essential principles which are at stake, it is indispensable to go was established for the first time 1n the debt of Germany, one back a little. It will not be long. [Interruptions on the extreme part corresponding to the partial reparation of the damages done left and on the left. Applause on the right and in the center.] to property, otherwise said to be for the restoration of the in­ The Young plan is an accomplishment. One can not under­ vaded and devastated regions. stand it unless one knows what preceded. And we should keep This was the first time that a kind of priority was thus estab­ present in our memory 1n order to Judge the situation and the lished to the benefit of debts relative to reparations properly concessions which are a.sked of us. so called. I shall return to it presently, in a few words, in order For the origin o! the Young plan, it is necessary to go far to show you the full significance of this decision, whlch was taken back. not only by the reporters of the Young plan but by the govern- 394 CONGRESSIONAL RECORD-. HOUSE DECEMBER 11 ments met at The Hague 1n the month of August, 1929, and 1n the of certain advances made by the Allies other than ourselves to month of January, 1930. Germany; to the payment of the expenses of the army of occu­ How, then, is the Young annuity divided? pation; to the payment of reparations, for example, to Great In reality there are two annuities; the one called " conditional," Britain. But we had not at that time received one centime under the other called " unconditional." the heading of reparations. "Conditional" annuity-that is to say, subject to being sus­ And nevertheless how many milliards had we not already spent! pended-in stated conditions, whether for the transfers to the Let us see now what the Young plan assigns to us. creditors in foreign exchanges, or even, in conditions equally But perhaps a part of the Assembly is about to manifest some stated, for the payment in reichsmarks. impatience. "Unconditional" annuity, payable in foreign exchanges and not, Undoubtedly the greater number of our colleagues know by in any case, subject either to suspension of transfer or to suspen­ heart the texts and figures of the Young plan, but the public sion of payment. does not know them, and it is indispensable to let it know them. The "unconditional" annuity is 660,000,000 of reichsmarks a [Interruptions on the extreme left.} Perhaps there are even some year during 37 years, and even, if the letter of the plan is observed, among you who do not know them. (New interruptions on the during the 59 years. extreme left.] Of these 660,000,000 of marks France receives 500,000,000 of FROM THE ExTREME LEFT. We have never heard them. marks. I will say at once that from the 660,000,000 there must be M. Lours DuBois. You have not heard them for the very good deducted the service of the annuity of the Dawes loan of 1924; reason that it was not possible at the time of the discussion of that from the share of France, 500,000,000 of marks, the service of the Young plan for the speaker who is now on the tribune to the annuity of the Young loan contracted by Germany in 1930, of expound his manner of looking at the Young plan and its econ­ which a part was placed in France in accordance with her rights omy. [Applause on the right.] in the mobilization cf the unconditional part, must be deducted. The Young plan comprises, in reality, two parts: A report of the How will acceptance of the proposal which is made to us by experts and a series of annexes. · President Hoover affect us? This is how, in their report, the experts express themselves in Before answering that question it is indispensable for me to regard to the unconditional part of the German annuity: establish the good foundation of our claims as regards the uncon­ "ARTICLE 33. At this moment it is equally admitted that the ditional part; in other words, of the absolute right, going far back, possibility of accepting annuities inferior to those which were which we have to receive that part. established by the Dawes plan depended upon the certitude and One might go back, in fact, to the message of President Wilson, the fac111ty with which the creditors might commercialize obliga­ which established a true priority in favor of the restoration of the tions withdrawn thenceforth from the influence of politics." devastated regions; to the Lansing declaration of the month of "ARTICLE 89. Of the annuities abo~e mentioned, the amounts November, 1918, which confirmed this point, defining it clearly. stated hereafter shall be unconditional; that is to say, payable in One might take up various articles in the treaty of peace: foreign currencies, by means of equal monthly installments, with­ "ART. 232. • • • The allied and associated Governments out any right of suspension whatever: Six hundred and sixty require in any case, and Germany accepts the obligation, that all millions of reichsmarks a year, the sums which the service of the the damages caused to the civil population of each of the allied German external loan of 1924 requires being included therein." and associated powers and to their property during the period in That is, 660,000,000 less 48,000,000-612,000,000, the actual total which that power was in a state of war with Germany by the said of the unconditional annuity. aggresion by land, by sea, and by the air shall be repaired • • • ." ''Article 115. The part of our task which was not the least "ART. 235. In order to permit the allied and associated powers difiicult was to determine the sum which Germany might immedi­ to undertake at once the restoration of their industrial and eco­ ately undertake to pay under the heading of the definitive uncon­ nomic life, while awaiting the definitive established of the total ditional obligation. One can not establish in advance with preci­ of their claims, Germany will pay, before the 1st of May, 1921, 20 sion the moment at which the difficulties of proceeding to the milliards of gold marks • • • ." transfer in foreign exchanges may appear. However, great care The twenty milliards of gold marks have not served for that at has been taken to remain so far below that limit that all possi­ all. But it is none the less a right which is written in the treaty. bility of error is eliminated." The same article 235 refers to annex 2, which, in paragraph 12, It 1s not only in the report that this point is made; it is also specifies: made in the special annexes which are attached to it. " • • • In order to facil1tate and to pursue the immediate Notably, this is what Annex III, article 137, states: restoration of the economic life of the allied and associated coun- "The sums corresponding to the service of the interest and to tries, the commission, as provided in article 235 • • • ." . the amortization of the mobilizable and mobilized fractions of the Article 237, a vital point which seems to have been forgotten annuity coupons shall be paid to the Bank for International Settle­ until the Young Plan: ments by the German Reich, without any reservation; that is to . "The successive payments • made by Germany to say, on its sole responsibility. The financial service of these satisfy the claims abbve stated shall be divided by the allied and mobilizable or mobilized fractions shall constitute a definitive associated Governments according to the proportions fixed by international obligation, absolute and unconditional in the finan­ them in advance and founded in equity and the rights of cial sense of the word.'' [Applause from the center and on the each • •." . right.] It is here that an absolute priority should have been specified And The Hague accord· of January 20, 1930, which adopts in its in favor of the damages to property, of the restoration of the entirety the Young plan, report, and annexes, with some slight devastated regions. (Very good! Very good!} differences, this accord, in its first article, specifies that " the That priority was imposed in an absolute manner, even finan­ experts' plan of June 7, 1929, together with this present agree­ cially. ment and the protocol of August 31, 1929 (all of which are herein­ Consider the situation of the invaded countries, of the countries after described as the new plan), is definitely accepted as a on the soil of which during four years the war was waged. · complete and final settlement, so far as Germany is concerned, of There was there a right all the more absolute because the north· the financial questions resulting from the war. and the east of France had served, not only for Germany but "For that acceptance • • • the German Government un­ equally for our Allies, as the field of battle, and thus the sufferings dertakes, as regards the creditor powers, the solemn obligation of and devastations which we endured in the common interest were paying the annuities provided for by the new plan in conformity spared to our Allies. (Applause from the right.} There, then, was with the stipulations it contains." the beginning of a priority. You know of what these stipulations consist for the uncondi­ But there was another reason, a reason of a financial character. tional part. These regions, as President Wilson said, as the treaty of peace said, The matter is so important, the engagement made by Germany it was necessary to restore immediately. It was indispensable, not is so vital and so definitive, that it is even reproduced on the only for the prosperity of the invaded countries but for justice; certificate of debt of the Reich. and even to the interest of Europe and of the world. It was Here are the terms of . Annex III of the accord of The Hague of necessary to restore them immediately; to lay out immediately, in January 20, 1930, Article 4, first paragraph: consequence, the necessary sums. This is what we have done. " The sums corresponding to the service of the interest and to _ While it is only with a long maturity and by annuities extend­ the amortization of the mobilizable and mobilized fractions of the ing over a great number of years that damages to individuals are annuity coupons shall be paid to the bank in money other than repaired, in regard to damages to property, on the contrary, there the reichsmark by the German Government, without any reserva­ was an obligation for the immediate restoration of the devastated tion; that is to say, on its sole responsib111ty." regions. That is why a priority was imposed for the reparation You will please notice that the same privilege applies as well to of damages to property. the "mobilizable" fractions as to the "mobilized" fractions. Why was that priority not stated at the time of the treaty of I continue the quotation: peace and of the first conferences which followed it? "The financial service of these mobilizable or mobilized frac­ To answer that question would lead me too far afield. Various tions of the annuities shall constitute a definitive international interests intervened. Belgium has obtained satisfaction 1n part. obligation, absolute and unconditional in the financial sense of the France has found herself injured, and all the more gravely in­ word." (Applause from the center and on the right.} jured because the debt of Germany has been diminished. I! Ger­ That being stated, the character of the unconditional part of the many had paid within 30 years, as the treaty stipulated, the total annuity being clearly defined and determined, as I have indicated, amount of her debt, one would not per)laps have been able to by the Young plan and the international accords, what is our exa~ine it too closely. We would have received substantial sums position and what would be the effect for us, from the financial !rom the very first years. You know that that was not the case, point of view, of the acceptance of the Hoover proposal? . since on the eve of the application of the Young plan, under The only question is that of suspending or adjourning-it would the heading of reparations, we had not yet received one sou from certainly be necessary, on this matter, that we should have some .Germany. All her payments had been assigned to the l?ayment precise details-the payment or· the 1931-32 annuity . •

1931 CONGRESSIONAL RECORD-HOUSE 395 The 1931-32 German annuity is figured at · 1,685 m1Illons of M. JEAN FABRY. There wm not be a French Ch8ID.ber to vote reichsmarks. Of this amount 838.4 millions comes to France, of the credits. · which 338.4 are under the conditional heading; under the uncon­ M. LoUIS DUBOIS. There 1s the question as it stands, with all ditional heading, 500,000,000 less the service of our part of the its gravity, all its extent. I believe that I have submitted it slight amount already mobilized, 44.5 millions, which reduces the clearly enough to the Chamber. [Applause from the center.} sum to be received to 455.5 millions of marks. I now ask the Government to tell us what its position will be, But it is further necessary to deduct eighty millions of marks For the answer which it has made is not an answer to the ques­ which are indispensable to make up the sum which we owe to the tion which I have permitted myself to put to it. English and to the Americans by way of our war debts. I dare to hope that the Government will know how to sustain For the part which comes to us under the conditional heading the interests of which it has the care. [Applause from the center 1s not, to the extent of about this amount, sufficient to pay our and on the right.] part of the war debts to the English and to the Americans, and it is further necessary that we should take from our uncondi­ Mr. PURNELL. Mr. Chairman, I yield 10 minutes to tba tional part the sum of 80,000,000 reichsmarks. [Various move­ gentleman from New York [Mr. FrsHl. ments.] Mr. FISH. Mr. Chairman and members of the committee, So that there remains to us a substantial sum, which can be­ let us speak now of French francs--represented by two thousand some 14 years ago we were forced into war with the German two hundred and eighty-three millions. In other words, for the Imperial Government by the brutal attacks of German sub­ year 1931-32 we would have the disposition of two thousand two marines on ships carrying the American flag. We did not hundred and eighty-three millions of actual francs under the heading o! reparations properly so called for material damages seek that war. We declared war only when it was forced above the sums employed for the payment of our war debts. That upon us by that autocratic military power, but when once sum is going to fall us. war was declared the American Government and the Ameri­ A note has been published which seems to me to be very well can people did their full part. We sent 2,000.000 soldiers established, from which it appears th~t the French budget wiD only have to support a loss of one milliard nine hundred and some over to the other side. We do not claim now that we won m1llions. the war. We know o1 the tremendous casualties on the The budget, perhaps; but, apart !rom the budget, there are battlefield of our war-weary Allies; but we did turn the tide other payments to be made, on which I will not dwell. In reality of defeat into victory, and after victory was won we asked it is 2,283,000,000 o! francs which we are going to lack. It 1s evident that it wiD be necessary to get them somewhere for nothing. We asked for no reparations, no indemnities, and our Minister o! the Budget will find himself very much no plunder, no conquered territory. We asked for nothing embarrassed. To what resources will he have recourse? This 1s and we got exactly what we asked-nothing at all. Then not the moment to ask that. Then, it has been said-and the Minister o! Finance in a note we brought our troops back from the other side, having ful­ has replted well enough to this objection-" You know very well filled every possible obligation that this country undertook that Germany was going to declare a moratorium on transfers. when we went to war; and the Congress of the United By that very fact you would have been obliged to make up the States, showing the highest degree of liberality and gener­ guaranty fund of 500,000,000 of reichsmarks; in other words, three milliards o! francs, which you were to establish in order to osity, adjusted the war debts so that we asked from Italy guarantee the payment to your cocreditors of the conditional only 25 cents on the dollar and from France only that part which should be paid to them.'' amount of money which we loaned her after the armistice. You know, in fact, gentlemen, that by virtue o! the advantage which gave to us, but which was very largely justified, the attribu­ Yet there are those, both in this country and abroad, who tion of 500,000,000 of reichsmarks of the unconditional part, we have pointed the finger of scorn at the United States and de­ were asked, as a compensation, to answer, to a certain extent at picted us as " Uncle Shylock " demanding the pound of :flesh. least and to a substantial one, for the payment to our cocreditors There is one thing upon which we can all agree. and that and not to ourselves of the conditional part. Now, there would remain for us to pay two thousand seven hun­ is that we did not start the World War; that we had no dred millions to this guaranty fund. But who says that we shall responsibility for causing the World War. There is one not be obliged to pay them? other thing we can aimost agree on, and that is that many That which I declare, for the moment, 1s that already we are deprived for one year o! two thousand two hundred and eighty- of the Allies and foreign countries want to wish upon us the three millions of francs. · entire cost of the World War. If next year, if even in the course of the present year, Ger· I voted for these debt adjustments because I thought they many comes to tell us, " In spite of all my good will, I am obliged to declare a moratorium on transfers," we would still be obliged were fair and honorable and just to all concerned. I op­ to pay 1n addition to the Bank for International Settlements' posed cancellation then, and I am opposed to cancellation 2,700 millions, or in all and in round numbers a deficit of 5 now. [Applause.] m1lliards o! francs. in ~ccord I do not wish to envisage the rest, for I fear that if on this But, my colleagues, I was entire with the Presi­ ground we yield, be it ever so little, to Germany, who expects dent of the United States when he announced to this coun­ it, her demands will not be finished. try and to the world that he proposed a moratorium for one It is therefore indispensable that we should be very clear in year on war debts and reparations in order that the young regard to the matter. AB M. Margaine has just shown very well, Germany is not, from the economic point of view; 1n the condition German Republic would be given a breathing spell, and not one would like to say she was in. be overthrown by revolution either from the right or the left. If, financially speaking, she is in a bad condition, 1t is SU11l­ In my humble opinion the action of the President was c1ent to refer to the report of June 30, 1930, of Mr. Parker Gllbert 1o know that it i.e her own fault, exclusively her own fault. It absolutely necessary for the preservation of world peace and is not !or us to pay for the faults of Germany. [Applause from the stabilization not only of Germany but of all of Europe, the center and on the right.] and even of our own country. That is . why I insist, in regard to the Government, that it should be intransigent in this connection. We are confronted with a critical condition, with an ap­ That, temporarily, it should grant some relief; I do not wish palling situation that exists in Germany through no fault to say that I shall oppose that. I know nothing about that; it of our own. The young Republic IS sitting astrid.e a volcano will depend upon the declarations that are made to us. But it that may erupt at any moment, either to the right or to the is indispensable that we should maintain our imprescriptible rights, not only as regards the unconditional part but also the left, and the consequences will be disastrous to the economic co nell tiona! part. and political stability of the worlcL and possibly to all Notice that the amount in full o! the conditional and uncon­ civilization. ditional annuties of the global annuity paid by Germany, repre­ sents only one-fifth of what we have spent-! do not say of what President Hoover took a constructive step in June was due to us-for the devastated regions and for the pensions, when he proposed an intergovernmental war-debt holiday without counting the interest. for one year, and it is :mnre constructive to-day and much As we are giving up the total of what we receive as the condi­ tional part, in order to pay our war debts, it is only one-tenth of more needed than it was then, and it should have the unani­ our expenses for the restoration of our devastated regions which mous support of the thinking Members of the Congress of we shall receive, admitting that Germany pays regularly the the United States, who have been given six months to con­ annuity for which the Young plan provides. sider his proposal. They have heard from their people But it is not only the unconditional annuity which is neces­ sary to us; it is also the conditional annuity, for how shall we back home. They have read the favorable' comments in the pay th~ English and the Americans? press and are aware that the purpose of the moratorium· is In the case of a simple suspension I know well that we also to to check world depression and the spread of communism a certain extent can suspend our payments temporarily. and revolution, and unless we keep faith with our guaranty But if at the end o! the account Germany gets out and does not pay, shall we pay the English and the Americans? given at that time to the President and support him at this FRoM VARIOUS BENCHES. No! noJ time, we will be a factor, if not the cause, of bringing about 396 CONGRESSIONAL ·RECORD-HOUSE DECEMBER 11 the collapse of the German Republic. It is to be hoped that dent under the treaty-making power. Will it be necessary, the war-debt holiday will save her from economic and in order for the action of the President to receive govern­ political chaos. mental ratification, to have it submitted to this House? At the present time there is Fascism on the right and Mr. FISH. I think that is required. Whether it be neces­ communism on the left, like hungry wolves, ready to tear at sary under the Constitution I am not prepared to state, but the throat of the German Republic. Although ready to fight that is the procedure in all of these war-debt settlements. against each other, they are more willing to pull down the Mr. Sffiv.INERS of Texas. The Constitution, of course, Republic. World. civilization is at stake, and the action of provides that treaties are to be made by the President and President Hoover will go a long way to determine whether the Senate. If this power exercised by the President is Germany shall continue to be a free, independent republic under the treaty-making power, it is not necessary for the or a part of the soviet system, taking its orders from House to consider it. Moscow, or of a Fascist dictatorship. If we do not grant Mr. FISH. Oh, yes; it is. The gentleman knows that all this moratorium now, we will be a party to causing this of these debt settlements have to be originally negotiated by collapse in the world, and will be the :financial losers as well the Executive. The Executive, of course, speaks for the as being losers from the standpoint of trade and commerce, country in those matters, and it is up to Congress to act. and from the point of view of. world peace and civilization. Mr. COLE of Iowa. Will the gentleman yield? I want it distinctly understood that the President of the Mr. FISH. I yield. United States has the constitutional power to negotiate Mr. COLE of Iowa. The gentleman does not claim that treaties and also to carry on our foreign relations, and acting the President negotiated a treaty. This was not a treaty under that authority, he legitimately negotiated this propo­ matter at all. sal with the foreign governments which is now under con­ Mr. SUMNERS of Texas. But if it was not a treaty mat­ sideration. When the Congress is not in session and an ter, was not the President entirely outside his province, and emergency arises in our foreign relations, the President is was not it an attempt to usurp the power of the legislative the sole authority that can act and must assume that branch of the Government and calculated to put the Nation responsibility. in a bad light with the other nations of the earth? I hold no brief for the international bankers. This is no Mr. COLE of Iowa. That is why he called in Members of effort to protect the international bankers. They may or the two Houses. may not have brought on this situation; they may or may Mr. STAFFORD. Will the gentleman yield? not be responsible for mulcting the American people out of Mr. FISH. I yield. their money for foreign bonds which have depreciated by Mr. STAFFORD. This function of the President in ne­ two-thirds of their value, but unless the Congress of the gotiating this moratorium, as I stated yesterday, is akin to United States acts favorably on the proposed moratorium, an act of President Roosevelt. it is very possible that other billions of dollars of American My first official act in the Congress convened in extraor­ money will be wiped out and thousands of American in­ dinary session back in 1903 was the ratification of the action vestors ruined. The American people have loaned $2',000,- taken by President Roosevelt in negotiating the Cuban reci­ 000,000 through the international bankers to the German procity pact. The action of President Roosevelt in initiating Government, private industries, and municipalities, and that pact was akin to the action of President Hoover in stand to lose most of it if Germany goes into bankruptcy. taking the initiative toward this moratorium. We were Mr. PATMAN. Will the gentleman yield? called into extraordinary session to ratify that action, not Mr. FISH. I yield. because it affected the exercise of the treaty-making power Mr. PATMAN. The gentleman from Wisconsin [Mr. of the President, but because it affected the revenues, and STAFFORD] yesterday stated that since the moratorium has because this action affects the revenues of the Government been granted the German people have paid to certain people the President of the United States is asking the Congress to $100,000,000. To whom has this money been paid by Ger­ ratify it. That is my view of the situation. many? Mr. LAGUARDIA. Will the gentleman yield? Mr. FISH. Yes. Mr. FISH. Since the moratorium? Mr. LAGUARDIA. He needs more than ratification from Mr. PATMAN. Yes. Congress. He needs authority from Congress because he has Mr. FISH. I have no idea what the German Government not that authority under the Constitution. has paid out. I know exactly what we have paid to the Mr. STAFFORD. If it did not affect the revenues of the German Government and what the American people have Government, the President would have authority to nego­ paid to the German Government and private industries in tiate a treaty. that country. Mr. FISH. I am glad that situation has developed be­ Mr. PATMAN. Is the German Government making pay­ cause nobody else can negotiate with foreign countries except ments on its private debts to the international bankers at the President, and when he negotiated this particular settle­ this time, or has it within recent months? ment it was necessary that he come to the Congress, as he Mr. FISH. It has been. said himself, and get the support of the Congress,. Nobody Mr. PATMAN. During the last six months, since this else except the President can deal with the foreign affairs of moratorium was granted, they have been making those pay­ this country. · ments, have they not? Mr. SUMNERS of Texas. Will the gentleman yield? Mr. FISH. As far ~;J.S I ~ow; yes. Mr. FISH. Yes. Mr. PATMAN. In other words, if we forego the collection Mr. SUMNERS of Texas. Under those circumstances of our debt from France and England in order that France would not the proper procedure be for the President to have and England may forego the collection of the debt from authority from Congress in the first instance and then Germany, that is in order that Germany may pay the inter­ negotiate under authority from Congress; but congressional national bankers. Is that right? authority is requested, so there can be no question about the Mr. FISH. I wish I could guarantee to the gentleman that proper authority. Germany could pay its debts to private bankers and private Mr. FISH. The President could not obtain the consent American individuals and investors if this moratorium goes of the Congress, as the Congress was not in session. How­ through. ever, the President called in Democratic and Republican [Here the gavel fell.] leaders, and he also wrote letters to the Members of the Mr. PURNELL. I yield five additional minutes to the Congress and got their support for the proposed moratorium. gentleman from New York [Mr. FISH]. Mr. SUMNERS of Texas. You could not pass any law Mr. SUMNERS of Texas. Will the gentleman yield? that way, could you? ~Ir. FISH. I yield. Mr. BLANTON. Will the gentleman allow me to ask a Mr. SUMNERS of Texas. I understand the gentleman has question? ... stated that these negotiations were instigated by the Presi- Mr. FISH. Yea.. •

1931 CONGRESSIONAL- - RECORD-HOUSE 397 Mr. BLANTON. Suppose that a few months before Con­ people who will resep.t this delay very much. But it is not gress convened the President ancrMr. Secretary Stimson had our responsibility on this side. declared war on Japan, and we were now asked to ratify the Now, Mr. Chairman and members of the committee, we President's declaration? Would the fact that the President should not confuse this simple issue of creating a mora­ might have called in the Republican leaders and the Demo­ torium so that the German Republic will not fall; so that cratic leaders bind the gentleman from New York? we can restore some hope in that land and no people Mr. FISH. The gentleman knows very well that the Con­ and no country can exist without hope. Unless we act and stitution takes care of that important question. give them a breathing snell and a postponement of these Mr. BLANTON. And the Constitution takes care of this debts or reparations, then you will be partially responsible matter, if the gentleman pleases. for the collapse of the German Republic, which is now facing [Here the gavel fell.] a de.c:perate situation with its back to the wall. Mr. PURNELL. Mr. Chairman, I yield the gentleman five This has nothing to do with international bankers. Some additional minutes. time in the future I, too, may pay my respects to the inter­ Mr. BRITTEN. Will the gentleman yield? national bankers, and particularly to some of the bankers Mr. FISH. Yes. in the city of New York who, through high-power salesman­ Mr. BRITTEN. Is it not a fact that the question of the ship, have been dumping Anierican money on every German gentleman from Texas was answered by the Wilson admin­ municipality and in many industries to create further com­ istration? Did not President Wilson and his great Secre­ petition for· American labor from the low-wage scale in tary of State, William Jennings Bryan, declare war on Germany. Mexico, without congressional consent, and did not we take [Here the gavel fell.] peaceful possession of their customhouses? Mr. PURNELL. Mr. Chairman, I yield the gentleman two Mr. FISH. The gentleman from Texas [Mr. SUMNERS] additional minutes. has asked a very important question and one that should Mr. FISH. The international bankers of New York have be considered and discussed from all angles. I think the for the sake of huge commissions loaned over $2,000,000,000 gentleman will agree that the President is the only one who of money belonging to American citizens and not $7,000,- can initiate such procedure, and that he has to come back 000,000, as was stated on the floor to-day, to the German to the House, but when the House is not in session he can Republic and to German industries, and have helped build use his good judgment, which in this case happens to be up these industries in competition with labor in this country. very good, and then come back to the House for approval, They are responsible for the loss of a vast sum of money and that is all there is to this particuiar case. to our people ·which is badly needed in the United States Mr. KVALE. Will the gentleman yield? to-day and they are more responsibl~ than any group in Mr. FISH. Yes. America for helping to bring upon us this depression. There· Mr. . KVALE. Granting for the moment the legality or is nothing new about this depression. It is simply that we propriety of the President's action, the gentleman from New went crazy, money crazy, led by the big international bank­ York spoke about the responsibility of this body with refer­ ers, who instead of confining their activities to the ba~ ence to approving and ratifying this before the 15th. When business went into the security business and sold bonds and this thing has been pending for six months, and when he stocks and caused overproduction everywhere in the United might have called us into session to consider this and other States. They are far from blameless as they seek to claim. important things, but did not do so, where is the impropriety They were out to make all the money possible while the in giving full consideration to these things instead of rushing going was good, regardless of the consequences that were into them blindly. bound to follow from mass overproduction of all kinds of Mr. FISH. That question, so far as I know, has not been securities practically guaranteed by big international banks. raised, or raised very seriously. I think it would have been The mass overproduction of stocks and bonds naturally much better if we could have ratified the moratorium pro­ caused an overproduction of factories and a vast overpro­ posal before the 15th, as we will probably force some nations, duction of all kinds of commodities which resulted in the technically, to go into so-called bankruptcy because we did inflation of 1929. not ratify it before the 15th, and they will not be able to This artificial inflation against all the laws of economics pay. But that is water over the mill. It has been stated was bound to collapse, and when it did the pendulum in to the country by the Democratic leaders that it will not swinging back toward normalcy went back all the way into become law by the 15th of December, and we should discuss the depths where .we are now. The American people them­ it and debate it, as well as pass· it at the earliest possible selves, because of their extravagance, speculation, and gam­ moment. bling, were also responsible, but the international bankers and Mr. JOHNSON of South Dakota. Will the gentleman other bankers who .sold securities upon the market instead yield? of .confining themselves to the legitimate functions of the Mr. FISH. Yes. - banking business created this overproduction and are more re­ Mr. JOHNSON of South Dakota. Is it not true that this sponsible than any other group in the United States for the particular matter has been discussed in all ·of the newspapers present depression. [Applause.] or' the eountry, newspapers of different political faith, and Mr. ARNOLD. Mr. Chairman. I yield 20 minutes to the that Members of Congress have had ample opportunity to gentleman from Mississippi [Mr. RANKIN]. know what the facts are? The facts are well known, and Mr. RANKIN. Mr. Chairman, as we proceed in this dis­ the average intelligent American citizen would be perfectly cussion, the influences back of this moratorium movement competent to vote on this matter to-morrow without debate, unfold-themselves to the American people. so that all Members of Congress ought to be -able to vote The gentleman from New York [Mr. FisH], who has just immediately. spoken, and who admits that he voted a few years ago to Mr. FISH. Mr. Chairman, I think if anyone is to take the cancel 75 per cent of Italy's debt to the United States, and responsibility fo~: the delay it must be, of course, "the Demo­ who is now supporting this moratorium, which means a fur­ cratic majority in the House of Representatives, and they ther 'cancellation ultimately of more of these debts, talks must take that responsibility, not only with foreign. nations about the American people being informed. Why, the Con­ but certainly take it with the American people back home, gress is not informed on this subject yet; and it seems that. who have very generally approved of this moratorium as every possible effort is being made to keep us from becoming proposed last June by President Hoover. If they want to informed. delay it an~ consider it further, that is their .;right; but that If I had needed any further evidence to convince me that right carries certain responsibility, and there are many mil­ back of this movement was the idea of canceling these debts, lions of Americans who have friends and relativ~s in Ger­ all my doubts would have been dispelled on yesterday by the many who know the tragic conditions in that country and President's message, when he asked for the reviving of the the suffering and undernourishment among the German War · Debt Funding Commission. Why revive the Debt; •

398 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 Funding Commission? There can be but one object, and Is that the gentleman's idea of international obligations? that is to further reduce or cancel these foreign debts to If Cuba owed us a billion dollars and we owed England the United States. Postpone them? This postponement $2,000,000,000, and Cuba had not paid us, would that talk is merely camouft.age. be any excuse, much less the" finest excuse," for us to refuse Mr. Chairman, why should all this come out on the eve to pay England? No, Mr. WooD. That is not the attitude of the visits of Grandi and Laval? Why have the states­ that one nation should assume toward . its obligations to men of Europe been assured? All over Europe they are another. saying to-day that if this moratorium passes, these debts Now, one or two things more. I asked the gentleman from will be· canceled. Why do you object to taking a little time Indiana why it was that we had not had prosperity already, to investigate the question in order that we may have all and he said it was because of the doubt and uncertainty that the facts before us? grew out of the approval of these moratoriums. For one, I voted against the debt funding bills. I voted Well, that carries us back to the original proposition. If against canceling one dollar of these foreign debts. I that were the case, why in the world did not the President announced last June that I was opposed to this measure, of the United States call Congress into session and relieve because I saw behind it a well-organized movement to can­ this uncertainty and, as I said, give us an opportunity to cel these debts and unload them onto the American people. paqs legislation that would relieve the American people from I am more convinced of that fact to-day than I was then. the effects of this awful panic? I am more convinced of it to-day than I was on yesterday. Mr. McFADDEN. Will the gentleman yield? The gentleman from Indiana [Mr. WooD], the spokesman Mr. RANKIN. Certainly. of the Republican Party, or at least the administration wing Mr. McFADDEN. This moratorium did not come upon us of it in Congress, in his answer to me on yesterday asked suddenly, and have not we had discussions upon it for nearly the question, " Is this the progress you are going to make six months? toward getting us back upon the road to prosperity? " Mr. RANKIN. Certainly; I thank the gentleman for his Oh, what a fallacy-trying to get the country to believe statement. By the way, you gentlemen who did not hear the that by canceling or postponing collection of these foreign speech of the gentleman from Pennsylvania [Mr. McFADDEN] debts you would add to American prosperity. Why, these a while ago will do well to read it. payments were to be made last July. The President has Now, the gentleman from Indiana made a statement postponed them for six months, and instead of a return ·of which did not get into the RECORD but did get into the news­ prosperity conditions have grown gradually worse every day papers. He asked th~ question if we were ready to take from that time to th~. the Army and the NaVY to collect these debts, intimating The gentleman from Indiana said, "Are you going to pro­ that these debts would be repudiated. long the distress of the country by reason of your inaction? " Mr. WOOD of Indiana. Oh, the gentleman is mistaken. Our inaction? The spokesman of your party intimates I never used any language that could be construed in that that by our delay we are prolonging this Republican panic. way. If delay prolongs the panic, why in the world did not your Mr. LAGUARDIA. Mr. Chairman, if the gentleman will President call this Congress together in June and let us pass permit, I made that statement. upon this question then? Why did he prolong the panic Mr. RANKIN. Then I apologize to the gentleman from during all these long and bitter months, with a cold winter Indiana. The gentleman from New York [Mr. LAGUARDIA], facing us, with from six to eight or ten million men out of the new leader of the Republican Party, made it. [Laugh­ work, with their women and children in thousands of cases ter.] Well, that intimation is an insult to every nation without the necessities of life, by refusing to call Congress involved. That has been the stock argument of the inter­ together? national bankers, who are passing it around in their news­ But the gentleman from Indiana also say that this" must papers. I say it is an insult to the people of every country be considered first." Why first? involved. Oh, do you not remember two years ago when you brought Do you think that these nations are going to repudiate in a bill here that was a dole to the big income-tax payers their debts? Thomas Jefferson, one of the greatest states­ of. America, paying back to them $160,000,000 of their taxes men of all times, said that our greatest weapon was our for the previous year, which they had already passed on to commerce. He was the one who advocated strenuously the ultimate consumer? They used the same argument, equal and exact justice to all nations and entangling that it" must be passed first," that there could be no delay. alliances with none. As a result, you passed it, and you men to whom the word Mr. HOGG of Indiana. Was it not George Washington? "dole" seems to raise such images of horror voted to give Mr. RANKIN. Washington and Jefferson, both. It was that "dole" to those large income-tax: payers who had Jefferson's doctrine. He said our commerce would· be the already collected it from the masses of the American people. greatest weapon that we would ever have. Do you suppose Another one of the fallacies of the able, distinguished, that one of these countries-that France, that great power and affable gentleman from Indiana [Mr. WooD] is that he of continental Europe-would repudiate her debts in the says, " We all know that our debtor nations depend upon future, and continue to repudiate them throughout the payment by Germany to these other countries." years to come and expect to maintain her trade with the Why, the gentleman from Indiana ought to be better in­ United States? Do you suppose that England or Italy or formed than that. There are 8 or 10 of these nations Czechoslovakia or Rumania, or any other nation involved, involved in this moratorium to whom Germany does not would repudiate these debts merely because, forsooth, you owe a cent. If this was going to help Germany or if that refuse to grant this moratorium? No; those debts will be was your object, why did you include all these other nations paid, unless the Congress of the United States cancels them­ who do not owe Germany anything, but owe these inter­ these international bankers and their spokesmen to the national bankers, whom the gentleman from New York [Mr. contrary notwithstanding. FisH] will take care of in his own sweet time? Why in the I agree with the gentleman from Texas [Mr. SUMNERS] world did he not do it to-day? [Laughter.] that this is a matter that should have originated with Con­ Now, another thing. I want to ask the gentleman from gress. Suppose some individual owed the United States Indiana if he thinks this is good business ethics. If he money, would you have them come and obtain a settlement thinks it is, I would not want him as a director of an insti­ from the Executive? This is a matter that involves revenue tution to which I was obligated, or for whose acts I was and must originate with Congress, must originate in the responsible: House of Representatives. It that is true- I have introduced a resolution, which I hold in my hand, Quoting Mr. WooD of Indiana- to investigate and see who these international bankers are, who hold these international obligations: to whom they if Germany should become bankrupt and unable to pay her debts to the Allies, they, in turn, would have the finest excuse. for not have sold them, and so forth. Let us learn the whole story. paying us. Nobody will suffer now, through waiting a few weeks or a 1931 ·CONGRESSIONAL RECORD-HOUSE 399 few months~ You say u we do not do it now it might be of power bestowed by the Constitution on the Congress. too late. Too late for whom? You don't mean that they That character of procedure is not only calculated to cause :are likely to ·get excited and pay these debts, do . you? confusion and international misunderstandings but such con- [La~ahterJ I will tell you what you are afraid of, you are sequences are inevitable. It may be that Democratic Presi­ tl.fraid that this .great Ways and Means Committee as now dents in times past have done this thing. I do not know; organized will call those international bankers and all other Mr Roosevelt's name has been mentioned. It may be that interested witnesses in and see what ls behind this move- Mr. Roosevelt or this man or that man or the other man who ment. They fear they will investigate it thoroughly. When- happens to be President has done that thing. That makes -ever they do and the people back at home find out what is no difference. I am not discussing persons or parties but .back of this movement and what you are trying to do, there fundamental policies of government which ought not to be will ·be such a wave of protest sweeping in here from every disregarded. It is the duty of the legislative branch of the rorner of America that you are going to find very few men Government to hold to itself those powers which the framers who will ·be willing to stand up and carry out the recom- , of the Constitution saw fit to vest in it not as -a matter of mendations in that message, which mean, in my humble pride but as a solemn duty. opinion, the ultimate cancellation of these foreign debts to Mr. LUCE. Mr~ Chairman, will the gentleman yield? the United States. [Applause.] Mr. SUMNERS of Texas. Yes. Mr. ARNOLD. Mr. Chairman, I yield five minutes to the Mr. LUCE. Did not Thomas Jefferson negotiate for the gentleman irom Texas [Mr. S'ul4NERS1. ' purchase of Louisiana? Mr. S~RS of Texas. ~· Cha~an, I want to ~eak Mr. SUMNERS of Texas. I am advised that Thomas Jef- f?r a few mmutes upon a pomt of P:Ivileges of the legxsla- ferson had the -consent of Congress before he negotiated for tive ·branch 10f the Government and lfl a l~rge sense of the the purchase of Louisiana, but that is not important. That Go~~rnment. I do not wa?~ my ~cussion to assume '8. would not make the procedure under consideration either part~n '8.SJ)ect. The. conditiOn which confronts ~nd the proper or improper, wise or unwise. I am not discussing po:ss1b1e ~onse~uenc~ mv?lved demonstr~te the unWIS~om of this matter from a partisan standpoint. It is not a matter the Presidents. action w1th~ut congressional aut~?nty.. It to be upposed by me as a Democrat and defended by some­ was not an.acei.dent that this Gover~ent was divtded mto one else as a Republican. It is a matter of constitutional three coordinate br~nch~s. Th.e experience of our ancesto~ division of governmental powers and the high duty of Mem­ long. before our more Imme~ate ancestors came to this bers of Congress to preserve in practice respect for those contment d~onstrated the WISdom of that ~or: of govern- divisions of power which actual experience has proven to be ment. Experience had dem?nstrate~ that It 18 unsafe to wise, and which were approved by the framers of our Consti­ trust to one person, be he king, president, or what not, all tution of the powers that affect people in a governmental way. At {He~ th f ll the -same time experience had demonstrated that it is best M Ne gave1 e :1 .. to have a single executive. Therefore, in the formation of . r. AR OLD. I yxeld to the gentleman five additiOnal cur Constitution, crystalizing the experience and. wisdom of mmutes. . the ages, we find this division of governmental power into ~· ~S of Texas .. I am t~g, a:s bes~ I can. ~ three coordinate branches, with their respective powers de- avmd anytJ::Ung .th.at looks li~e a partisan ~s.c~Ion of this fined. The situation that may develop out of this transac- great questiOn Whlc? goes dire~tly .to the diVISion of powers tion immediately under consideration demonstrates the between the -e~eeu.tly~ and legiSlative branches of the Gov­ wisdom of that arrangement and the unwisdom of the non- ernmen~. This diVIsion of powers res~Ited from nobod.y's authorized action of the President with regard to this par- speculatiOn. Th:y resulted _from necesSity demonstrated in ticular matter. He had no authority to negotiate, much less the a~tual practical operation of government. They were · authority to act. It was outside of his business. Neither the fixed m our system long before the, Revolution. Ignoring in Constitution nor the Congress directed or commissioned him practice -either the letter or the spirit of this basic policy in to proceed. It is perfectly evident from some of the reso- o:rr systet? of ~overnment is calculated _to bring hurt and we lutions and actions of other governments to which reference will be diScr~dited.. SUppose the ~ouse of Rep~esentatives has .been made that the countries abroad with whom the refuses to ratify this act of the President, what will happen? President negotiated understood that the President of the The nations of the world dealing with the President of the United states spoke for th~ American Government. If I am United States have a right to presume that he is not en­ not properly advised with regard to this, I would appreciate gaged be~nd. his power to make effective; that he knows being corrected, and I shall strike my remarks from the what he IS domg. REcoRD. One of the gentlemen has said t:Q.at the House of Repre- The President of the United States had no more authority sentatives and the legislative branch of the Government to do what he did than John Smith or Bill Brown or any- would be responsible to the country for the consequences body e1se. I am not questioning the President's motives. that follow if this arrangement is not ratified. Now, is that We are considering constitutional power and procedure. a fact? If so. the President can coerce the Congress by The Constitution of the United States makes the President acting without authority of the only power Which can give of the Un1ted States the Executive to carry out the legis- authority, the Congress. The Constitution gives to Con­ lative will, regularly declared by the legislative branch of gress the power to act and places upon it the solemn respon­ the Government. He has some additional duties. One of sibility of examination and judgment. The President is those additional duties is to negotiate treaties. Those trea- given the poweT to convene Congress whenever in his judg­ ties are negotiated by the President of the United States, by ment necessity requires the Government to discharge any and with the advice and consent of the Senate. It is not a duty which has been allocated to Congress in the division part of the legislative branch of the Government that ad- uf governmental powers; but that is all. vises and consents, but it is the persons who happen to be the Mr. WILLIAMSON. Will the gentleman yield? Senators of the United States Senate who consent. They Mr. SUMNERS of Texas. I yield. act in this regard as a privy council. In this matter the Mr. WU.LIAMSON. I think the gentleman left the im- President was not negotiating a treaty. In order to crys- pression that foreign governments have been led to believe tallize this negotiation into effective and binding form, ap- that the action of the President was the action of the Con­ proval must be had of the Congress of the House· of Repre- gress, and-- sentatives in the first instance because it affects the revenue. Mr. SUMNERS of Texas. I did not yield for an expres­ .If it be true, as is agreed, that approval must be had of the sion of opinion by the gentleman. but I yielded for a ques­ House, then clearly it was not a treaty that the President tion. was undertaking to negotiate. If it is not a treaty which he Mr. WILLIAMSON. Well, is it not a fact that those who undertook to negotiate, in so .far as he presumed to speak negotiated with the President knew perfectly well that it !or this Government, it was, in a sense at least, a usurpation would have to be ratified by Congress? "100 ·coNGRESSIONAL RECORD-HOUSE DECEMBER 11 . Mr. SUMNERS of Texas. I beg to direct the gentleman's Mr. ARNOLD. I yield to the gentleman from Texas two attention to what I understand to have been a quotation by additional minutes. ' the gentleman from Pennsylvania fMr. McFADDEN], in which Mr. SUMNERS of Texas. Now, in conclusion, ladies and he quoted: gentlemen, that is the point I am trying to make, and the 'whereas on June 20, 1931, the President of the United States of only point I am trying to make. The statement of my America made proposals for the suspension of international gov­ friend from Illinois [Mr. CHINDBLOM] and other statements ernmental debts, etc., and whereas the governments signatories made here indicate that the House is hampered in the con­ of the present protocol have accepted said proposals and have agreed to apply them in part to the obligation of the German sideration and discharge of a great constitutional ·respon­ Government under the agreement signed, etc. sibility by reason of the action of the President, acting with­ out authority first had from the legislative branch of the Which indicates very strongly that somebody thought the Government. The point I am making is not with regard President was not entirely without authority to commit this to this President only, but all Presidents to come, that when Government. ' a matter of this importance especially is to be considered, Mr. CHINDBLOM. Will the gentleman yield? requiring the approval of the Congress, the President of the Mr. SUMNERS of Texas. I yield. United States ought, in the first instance, have the approval Mr. CHINDBLOM. Does the gentleman recall that in the of the Congress and act under the authority of those who statement issued by the President on June 20, 1931, of which alone can give_him the authority to act. That is the method I bold a copy in my hand, he used these exact words: contemplated by the Constitution. That is the method Subject to confirmation by Congress, the American Govern­ most calculated to preserve good government, harmony, and ment will postpone all payments upon debts of foreign govern­ ments to the American Government payable during the· fiscal effective teamwork at home and respect and confidence year beginning July 1, next, conditional on a like postponement abroad. What I have said was not for the purpose of for one year of all payments on -intergovernmental debts owing criticizing the President, but to defend and insist upon re­ the important creditor powers. spect for the division of governmental powers created by Mr. SUMNERS of Texas .. Yes. The President was outside necessity, justified by experience, approved by those who of the bouncts- limiting the constitutional duties and powers have examined the value of representative government, and of the Executive. He was dealing with the Nation's revenue. finally wrought into our constitutional structure as its most He was acting without constitutional power or congressional fundamental and basic policy. authority, which he ought to have had before he acted. I thank you very much. [Applause.] There is an orderly constitutional way to do things, and The CHAIRMAN. The gentleman from Texas yields back :when they are done that way we avoid confusion. When one minute. . they are not done that way confusion and hurt results to Mr. ARNOLD. Mr. Chairman, I yield 30 minutes to the the public interest. That is the reason why I feel it my gentleman from Texas [Mr. Caossl. duty to protest against that method of transacting the public Mr. CROSS. Mr. Chairman, ladies and gentlemen of the business. - committee, I am not going to make any partisan speech. I Congress is called on here with a time limit-the 15th of feel this is a question of great moment. We Congressmen this month-within which to give approval, with the threat here represent our 120,000,000 people. I think this is a involved in the situation that if Congress does not within question that ought to be weighed carefully and upon the this time limit approve the action of the President then facts. The question is whether this Nation should tlostpone difficulty will develop internationally. the debt that is due it from the European countries which Mr. CHINDBLOM. The gentleman has been very courte­ borrowed from it during the war. ous. Will the gentleman yield further? What did this Nation get out of the war and what did the Mr. SUMNERS of Texas. I yield. nations that now ask us to postpone that debt get out of Mr. CHINDBLOM. Immediately when the President the war? The European Allies in the war got territories thought it well to take these steps, he called into conference and provinces from Germany that amount to more in area a large number of the leaders of the House, from both sides, than all the territory east of the Mississippi in these United Democrats and Republicans, and consent seemed so univer­ States, with Arkansas and Iowa thrown in. In addition to sal that the President might well have assumed that there that they got all the merchant ships which Germany had would not be any serious question about confirmation. I say with a tonnage in excess of 1,600 tons; they got half of all this to the gentleman, so far as I am concerned, I am not the ships that Germany had with a tonnage from 1,000 to disposed at this moment to find any fault with the majority. 1,600 tons, and they got one-fourth of all the small vessels I do not know that much will be lost by a few days' delay belonging to Germany in addition. beyond December 15, unless unfortunately the impression by The Versailles treaty provided that Italy, France, and this discussion should bring a feeling in the world that there Bc~g~um should have delivered to them 367,000,000 tons of is any doubt whatever of the action of Congress in confirm­ coal in a few years. That same treaty further provided that ing the moratorium. Germany should build for England and France and turn Mr. SUMNE~S of Texas. Well, that is the point. over to them vessels aggregating· a tonnage of 1,000,000 tons Mr. CHINDBLOM. If there should be any serious doubt within 10 years. In addition to all of that those Allies re­ created, it might affect the financial situation in the entire ceived-and I think we ought to get down to some concrete world. facts and not mere declarations and exclamations-in kind Mr. SUMNERS of Texas. That is the point. The gentle­ before the Dawes plan came into existence and after the man gives force to my argument. Dawes plan came into existence more than $9,000,000,000, Now, the President puts the House of Representatives in according to the estimates of the American Institute of a situation where it can not, in free conference, discuss this Economics. Germany insists it is much higher even than matter without creating a bad impression, so the gentleman that, but France puts it under. However, when you add states. That is the point I am trying to make, and the only the German and French estimates and divide them by two point, or rather the point, made is in support of the premise you will just hit about what the American Institute of that disregard of the constitutional division of govern­ Economics states it to be, more than $9,000,000,000. The mental-powers is not only confusing but dangerous. Con­ reparations Germany is to pay under the Young plan would gress can not possibly give the consideration within the time pay the European Allies about $404,000,000 this year. We indicated which the importance of the matter requires, with are due to receive under our settlement with her $16,000,000 the charge, the threat, involved that if it does not act-that this year. Spread over the years we would get from Ger­ is not all, if it does not ratify the unauthorized negotiations many, all told;' about $700,000,000, · but the cash value is of the President by the 15th, " it might affect the financial not in excess of $250,000,000. situation of the entire world." Under the present regime there are in the so-called Young [Here the gavel fell.] plan the conditional and unconditional payments and the 1931 CONGRESSIONAL RECORD-HOUSE 401 uncon.ditional payments amount to 660,000,000 reichsmarks, helpless victims of their war-lord, the Kaiser, and that it of which France gets 500,000,000 and Italy 42,000,000. Every was their purpose to free them from the military yoke of time anything happens France gets a bigger share. Under their ruthless master. But who is the ruthless master now? the Dawes plan France got 52 per cent of all reparations; Should they not blush with shame when they compare their England, 23 per cent; Italy, 7 per cent; and Belgium, 5 per conduct to the lofty example set them by America? After cent. Under the Young plan France gets 55 per cent; having stripped her of her territori~. of her resources at England, 22 per cent; Italy, 9 per cent; and Belgium, 6 per home and abroad, they know that Germany, in her present cent. impoverished condition can not continue to pay the vast Now, we hear much about the condition of those European sums which they still demand, and their doing so is but a countries. We hear much about the distress there. Is there ruse by which they hope to bring pressure upon this Con­ no distress here? Are there any more millions there who gress to cancel the remaining half of the debt which they are out of work than there are here? yet owe us. Had this country acted firmly and with the The money which this country loaned to those countries directnes~ and positiveness of an Andrew Jackson and came from the so-called Liberty bonds. They were like so warned them that these debts had to be paid and that no many promissory notes. They borrowed on those notes and quibbling would be tolerated, they would have long since got the money. The indorsers of those notes were every ceased to harass Germany with their impossible and absurd man, woman, and child in your districts. They indorsed demands and to-day instead of their contempt and hate, we them. You pledged them that that money would be paid would have their respect and friendship. back by the borrowers, and yet you, here representing them, Will you vote for this moratorium which means that you by this act indorse those promissory notes, so that if the are going to transfer it to the people of this country? I borrowers do not pay them, then your constituents, the am sick of hearing all of this cry that if America does not indorsers, pay them. go over there and put money into Germany's pocket, she is Already we have canceled practically half of them. You going bolshevik, and that will just be terrible. There are know as well as I do that this is but a movement which two mighty oceans between this country and Germany, yet means canc"ellation of those debts, for while the President there is but an imaginary line between Germany and some in his message says that there is no connection between of these highjacking nations. But Germany is not going reparations and the debts, yet he says following that-and bolshevik. if he had not had a purpose why say it-that we must be Listen! Do you know what France is paying annually on good neighbors, we must only demand in proportion as their her army? She has 716,000 men in her air corps, in her ability is to pay. But who is to determine their ability to navY and army. I have it here from the War Department. pay? Why, a committee of the international bankers, of She is paying out $2,427,038,102 annually, Think of it. If course. That is who is to determine it, and just as sure as she would turn that over to this country, in two years she we are here to-day when you grant this moratorium you would have her debt paid. Listen to what the War Depart­ have canceled the debt; you have shifted the tax burden ment says: In 1929 she jumped in her expenses and in­ from the taxpayers of those countries, who have already re­ creased the army, the air corps, and the navY. She jumped ceived in excess of $9,000,.000,000 of reparations from Ger­ again in 1930, and no doubt she will jump again this year. many, who have already received territory in area of more For what purpose? Has she any fear of the nations about than all the territory of this country east of the Mississippi, her? Germany is hog-tied and helpless. Italy is no match. with Arkansas and Iowa thrown in. You have canceled Spain is but a name. Russia is standing on her head, and those debts and you throw the burden on the indorsers to is impotent. Why the'huilding up of this'tremendous army pay them, your constituents. Have we not been liberal? but that she proposes to dictate to Europe, and that she is Did we not go when they were sorely pressed to their rescue doing by means of her army and with your money. For I and send 2,000,000 of our boys; and we poured out our have it from the Treasury Department that a few months money there as we poured out the blood of the bravest in ago, when I made the inquiry, she had $55 per capita in gold our Nation, losing some 60,000 or 70,000 on the battlefields. alone, when at the same time this country all told only had And in addition have we not some 237,000 crippled and in circulation $38 per capita. If you cancel this debt, you disabled? Yet not a penny did we ask. enable her more fully to work her will on Europe. Oh, yes, we got something out of the war. It has been I wonder how many here are familiar with the Dawes hate, hate. And now there is due us this year this very plan and the Young plan. Why, do you not know that when · thing we propose to postpone. There is due us-because I Germany kept staggering and it looked like she was not .. just got it from the Treasury Department-$252,000,000 plus. coming around to meet the sums of money tbat had been That is what is due us this year. lent by the international bankers, the Reparation Commis­ Then to hear their spiderlike diplomats, pickled as they sion called a committee consisting of two from England, are in the hypocrisy of Satan, sneering at us, "Are you going France, Germany, and Japan, and then they called on old to demand your pound of flesh?" And this after we have Cal to send over two, but he wisely said, " I will not do it; displayed toward them a generosity without parallel in the this country has nothing to do with your reparations. We annals of history' by canceling half the sums they borrowed made a separate settlement with Germany, and it is no of us in their hour of bitter need, which saved them from affair of ours." Then it was that the Reparation Com­ destruction. "Ingratitude, thou marble-hearted fiend!" mittee appointed Mr. Dawes and Mr. Owen D. Young. At But what of their conduct? Did they demand of Germany whose behest? Do you suppose they needed the financial " their pound of flesh? " Did they do even as well as Shylock brains of America-those magicianlike statisticians and and stop at a pound of flesh? No, they stripped her to the financiers? No; it was simply to work in and get repara­ bone and then scraped the bone to the marrow. And now tions and debts considered as if they were hooked together, they have the effrontery to shake and rattle her skeleton at and the Dawes plan starts out by saying that Germany shall us and threaten even to destroy that unless we cancel the pay for the year 1924 $238,000,000, and that this amount rest of what they owe us. If the last drop of the milk of shall be increased until at the end of five years she shall be human kindness in their hearts had not long since turned paying $595.,000,000, and shall pay that through infinity. to gall, they would abandon their impo~sible and unjust de­ Then it was that our international bankers loaned them mands against Germany. They hardly get home from one money, discounted their paper, if you please, at .such rates conference until they are asking for another and at the of interest that they thought at the time to clean up untold conclusion of each we find ourselves the losers for we can not millions. compete with them in that diplomatic oily art "to speak Shall your poor constituents, the indorsers of these Liberty and purpose not." bonds, have it put upon their backs so that these boys who During the war they professed not to blame the German are trying to make fortunes in German paper may be suc­ people, asserting on the contrary that they were merely the cessful? If anybody should lose, who should it be-your LXXV--26 402 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 constituents who indorsed that paper through you or these appointment of a oommlttee of three to study the problem ot greedy discounters? Let your conscience answer. stabllizing the purchasing power of money. On this subject in his annual address he said: Oh, we hear so much about a dole. I do not suppose any "By many of the best informed it is believed if acc9mplished man -in this Congress believes in a dole. The principle is this may prove to be a great source of relief from many of the one that is repugnant to every drop of my blood; but let me economic and social turmoils which now occasionally rock every civilized government." · tell you, my countrymen, if you cancel these debts what_is Politics is defined by Webster's Dictionary as: going to become of your money that is going back to Eng­ " The science of government; that part of ethics which has to land except to pay a dole? She is paying a dole to millions do with the regulation and government of a nation or state, the of her citizens. In this way you make your taxpayers pay preservation of i~ safety, peace, and prosperity, the defense of its existence and rights against foreign control or conquest, the these doles to English citizens. You are paying a dole to augmentation- of its strength and resources, and the protection other nations and helping them build up tremendous armies. of its citizens in their rights, with the preservation and improve­ · The President's message whispers the fact that, perhaps, ment of their morals." if we want to get armaments reduced we should cancel the Note especially the place of "prosperity" in this definition­ " the preservation of its (the nation's) safety, peace, and pros­ debt or greatly reduce it. Have we got to buy furope in perity." order to ·get her to reduce her armaments? What concern From time immemorial the government in power has been held is it of ours? accountable for the safety, peace, and prosperity of the people. I am sick and tired of this Nation muddling around in the The government is whatever the people make it or .Permit it to be. In the preservation of the nation's safety, peace, and pros­ affairs of the countries of Europe or any other country. I perity the people contribute. character, intelligence, loyalty, in­ am one who was opposed to the League of Nations. I am dustry. and initiative; the government oontrtbutes within the opposed to the World Court. [Applause.] limits of power conferred· upon it protection, stability, and op­ portunity to the .People to help themselves. It is true, as often We are constantly being brought into their affairs, and stated, that the government owes no man a living; but, on the here recently our White House has become the rendezvous of other hand, it is a function of government to maintain condi­ the prime ministers of Europe, with their cunning, slick tions under which no man is denied the opportunity to make a ways, and our statesmen seem to be as helpless as a fly in a living. In J: Samuel xxil, 2, is described the gathering at the cave of spider's web when they get hold of them. Oh, the :flattery Adullam under David, as follows: they pour out, and how we fall for it and knuckle to them. "And everyone that was in distress, and everyone that was .tn When will we be men? I think Bernard Shaw must have debt, and everyone that was disoontented gathered themselves / had his mind on the White House when he de~lared that unto him; and he became a captain over them; and there were with him about four hundred men." we are a nation of boobs, so easily handled, so easily manipu· Here are _set forth the causes of revolution in a nutshell-dis· lated. (Laughter.] tress, debt, and discontent-engendered by economic conditlollS I& there any man here who has any question about what chieily. this means? No. Hear me, my colleagues. Let Europe run ,The. problem of the ages seems to be how to live together in organized society on a basis of economic justice and equity, which her own affairs. Let us quit meddling with international · at the same time will permit and encourage the highest social, agreements. Let us say to England and the rest of Europe, moral, intellectual, and spiritual development of the people. "You build your navies and have your armies as you see .fit -In this study we are concerned with the economic phase of the and we will do likewise." [Applause.] Two mighty oceans problem. Our national wealth is near $400,000,000,000. It would serve no useful purpose at this time to recite facts and "figures separate us. God has given us this new world of North and on the productiveness of our farms and factories, the efficiency South America and under the Monroe doctrine we have. of our labor. and highly developed. communication and transporta­ supreme influence and control over the countries and the tion systems. : The goods produced in this country and the goods which we islands that fringe them. Let us keep away fTom Europe obtain from abroad in exchange of goods of which we have a sur­ and Asia. Let us get out of the Philippines and go home. plus give us a sum total of goods sufficient to supply the neces­ If we must have more territory, there is more territory here sities and .comforts of life to every man. woman, and child in the than we can use. land. In 1921 President Hoover, then Secretary of Commerce, ln his o my colleagues, think and think wisely. · Do not let report as ch-airman of the President's Conference on Unemploy­ any President legislate ior you by telegraph. [Applause.] ment, said: How low is this Nation sinking when our President begins " There is no economic failure so terrible in its import as that of a country possessing a surplus of every necessity of life in to legislate by telegraph? which numbers, willing and anxious to work, are deprived of these 0 my colleagues, take the advice and follow the chart necessities. It simply can not be if our moral and economic laid down by Washington, "Friendship for all nations, system is to survive. • • • entangling alliances with none." tApplri.use.l " What our people wish is the opportunity to earn their daily bread., and surely in a country with its warehouses bursting with Mr. MICHENER. Mr. Chairman, I yield five minutes to surpluses or food, of clothing, with its mines capable of indefinite the gentleman from Iowa (Mr. RAMsEYER]. production of fuel, with sufficient housing for comfort and health, Mr. RAMSEYER. Mr. Chairman, I ask unanimous con­ we possess the intelligence to find solution. Without it our whole sent to extend my remarks in the RECORD by printing a re­ system is open to serious charges of failure." .Mr. Daniel Willard, president of the Baltimore & Ohio Railroad, port of a committee of the Iowa State Bar Association pro­ in an address last March on unemployment and the distribution vided for at its annual convention in June, 1930, of which of resources before the Wharton School of Finance and Commerce, committee I was chairman, to study and report on stabilizing said: the purchasing power of money. "The mere existence of the [unemployment] problem presents a serious challenge to our economic system." The CHAffiMAN ~ The gentleman from Iowa asks unani­ After discussing our natural and humanistic resources, our mous consent to extend his remarks in the REcoRD. Is productive capacity, and our surpluses, he said: there objection? "And with all this surplus of wealth and resources we have millions~ so it is said, in dire need of food and clothing-in short, There was no objection. more of everything to eat and wear tllan we can possibly use and STABILIZING THE PURCHASING POWER OF MONEY at the same time millions of human beings hungry and cold. That Mr. RAMSEYER. Mr. Chairman, the Iowa State Bar is another problem, although closely related to the first. and the two problems together-unemployment and the distribution of Association at its annual convention in June, 1930, created .resources-bring into question the very foundations of our politi­ a committee to study and report on the problem of stabiliz­ cal and economic system.'' ing the purchasing power of money. · The committee, con­ Here is the problem stated by two eminent authorities. It 1s sisting of C. WILLIAM RAMSEYER, chairman: F. Dickinson not a new problem. ft is not a problem incident to the world­ wide depression. The depression merely emphasizes the existence Letts, and Fred C. Gilchrist, all members of the Iowa bar, of the problem. It is the recognized paramount problem before submitted their report to the Iowa State Bar Association at the American people.~ The recognition of the existence of a prob­ its annual convention in Des Moines, Iowa, on June 18, 1931. lem is the first step toward its solution. Have we" the intelligence This report reads as follows: to find ..solution"? _ , Your committee is aware of the position of sonie recogn.i.Zed REPORT OF THE CO~TTEE ON STAB~G THE PURCHASING POWER authorities that the economic distress through which this country, OF MONEY together with t}le rest of the world, is now passing 1s due to the Mr. President, members of the Iowa State Bar Association, last aftermath of the Wotld War and our_rapid scientific progress re­ year this association upop the recommendation of its president, sulting in technological unemployment. The economic destruc­ Mr. Justitce Grimm, of the State supr_eme court, authorized the tion and financial loss of the World War to date is estimated at 1931 CONGRESSIONAL RECORD-HOUSE 403 nearly $400,000,000,000, or equal to the national wealth of the at the peak in 1920 had almost double the load, a few years there­ United States. The world can not pass through such an upheaval after, they had originally contracted to assume. without suffering and distress for many years thereafter. Says Owen D. Young: Due to our scientific progress we have witnessed since the " The proper handling of price stability is one of the most im­ World War greater and more rapid changes in modes of living and portant matters facing the capitalistic system. In it will be found 1n agriculture and industry than has taken place in any other the roots of those maladjustments which result in unequal and like period of time in history. In 1918 it took one man a whole unfair distribution of wealth, in unemployment, and other serious day to make 40 electric-light bulbs. Soon thereafter there came problems." a machine that made 73,000 bulbs in 24 hours, and each machine Sir Josiah Stamp says: destroyed the jobs of 992 men. In the boot and shoe industry "A stable price level is the most bitterly practical of all 100 machines take the place of 25,000 men. According to a recent questions." report from a coal mine in southern Illinois, with a new machine H. G. Wells has said that civilization is at the crossroads; that used in the mine to load coal 250 miners do the work formerly the test of civilization is whether or not we can learn to control done by 1,100 miners. The harvesting combine, which can be the purchasing power of our money. operated by a man and two boys, does away with the reaping and The International Labor Conference at Geneva, May-June, 1929, shocking of grain, and at the same time displaces a whole thresh­ in an exhaustive report on Unemployment and Monetary Fluc­ ing crew. Instances of changes in agriculture and industry of tuations, had this to say: this kind could be multiplied many times over. It seems to be possible to declare emphatically that abrupt, or These changes in industry and agriculture add to our unemploy­ even slow but prolonged, yariations in the general price level, or, ment problem. The problem may become more acute with every in other words, disturbances in the equilibrium between produc­ new invention. New industries do not create jobs as fast as new tion and the means of payment, play no small part in determining machines in old industries destroy jobs. Technological unemploy­ the alternating acceleration and retardation of economic activity ment is one of the hazards of living in this scientific age. Means all;d are hence an important cause of the recutting unemployment to mitigate this and other hazards of unemployment call for cnses which mark one phase of the cycle. · sympathetic understanding, foresight, future planning, and co­ " If, then, the magnitude of variations in the general price level operation among employers and employees. could be reduced, an important cause of unemployment would be Now to approach more directly the subject matter of this report rendered less potent. But is such reduction feasible? This is the stabilizing the purchasing power of money and the relation of the vital question, to which those competent in the matter are becom­ fluctuating purchasing power of money to employment and the ing more and more inclined to return an affirmative answer." distribution of resources. The fluctuation in the purchasing The Stable Money Association, which has among its officers and power of money has agitated this country and the world for directors leading industrial and financial leaders, economists, and generations. Gold is the basis or measure of value of the leading statesmen, including such leaders of thought as Chief Justice commercial nations of the world. A study of the index number of Charles Evans Hughes and Hon. Frank 0. Lowden, in a recent wholesale commodity prices over a period of time will disclose that statement said: the index number rises with the increase in the gold supply and " This is a world problem. Every leader of public opinion in falls with the decrease in the supply of gold. the world, therefore, should feel it incumbent upon him to make After the Civil War, from the early seventies to 1897, there was it his own problem. a gradual decrease in the supply of gold and a constant decrease "Responsibility for progress in the stabilization of money and in commodity prices. During that time we had the granger credit must rest to a very large extent upon the shoulders of us movement, the fiat-money agitation, and the free-silver issue. in America, because we have a disproportionate share of the Whatever we may now think of the issues of those· days, it must world's gold; and as the world's creditors we are able to draw gold be conceded by every unbiased student that back of it all was the ~rom the rest of the world at our discretion; we have a closely purpose to stabilize the purchasing power of money. As money mtegrated, highly organized, and widely used banking and credit became less in volume, its value increased, thereby reducing com­ system; and our statistical material is abundant; yet no one coun­ try can or should attempt to control the situation alone, and every modity prices and making it more difficult for those in debt to pay country should assist." off their obligations. From report of the committee on stabilization of money stand­ Following 1896 gold was discovered tn the Klondike, and only a ard of the South Carolina bankers' convention, 1930: year or two later South Africa poured a great stream of gold into " Unless some improvement develops in the utilization of gold the world's supply. This increased the money supply, and ere long inevitably the long trend of price level must continue downward: there was an upward trend to the index of general prices. The The benefits will accrue to the creditors and the owners of fixed condition of the debtor class was improved, and thereby was re­ income-bearing securities, the losses will fall on the debtors and. moved in a large measure the spirit of discontent, especially in the the producers, who must sell on a declining price level. West. The increase in commodity prices was more rapid than the - increase in wages, which resulted in 1910 in the beginning of a ...... strong agitation against the high cost of living. "Stabilization is vital to the well-being of both possessor of The index number of the United States Bureau of Labor Statis­ money a~d the seller of things money will buy. During a period tics on the basis of the average wholesale prices for the year 1913 of inflatiOn the owner of money finds its purchasing power re­ is 100. Beginning with 1914, there was an increase in the index duced, and during a time of deflation the seller of goods finds number, which rose to 225 in 1920. After the middle of the year his products generally bringing lower prices. The well-being of 1920 there began a contraction in money and credit, and the index the world requires a reasonably stable money, so that upsets may number fell to 140 in 1921. In this inflation and deflation of the be limited and the disasters that always result from such changes World War period other factors than the gold supply played an may be avoided." The stabilization of the purchasing power of money is of vital important part. importance to our State. Iowa is primarily a State of production, We appear to be in another period of diminishing gold supply. and her prosperity depends on a satisfactory level of prices. Many George E. Roberts in an article dated April 1, 1931, observed: of her citizens are debtors, who suffer with tragic consequences "A recent inquiry conducted under the auspices of the League of when the price level declines. Nations has developed that mining engineers over the world are in The index number heretofore referred to is made up of the general agreement that, based on present prospects, the gold pro­ weighted average of wholesale pri~es of 550 of the leading com­ duction is more likely to diminish than increase." A contihued modities in the United States, and is compiled monthly. There period of falling commodity prices, such as distressed the people is a distinction between the price level of all these commodities of this country from the early seventies to 1897, must certainly be as reflected in the index number and individual prices. The price averted. level_ is affected by inflation and deflation. To stabilize the pur­ . Any change in the purchasing power of money touches every chasmg power of money is to stabilize the price level, and to kind of moral question and every kind of obligation. To every stabilize the price level is to prevent inflation and deflation. business transa.ction not on a cash basis there is a promise on the Even though the price level is stabilized. and the index number part of one to pay and on the part of another there is the promise remains stationary, or nearly so, individual prices may move up to be paid. Those who promise to pay are in the debtor class or down according to the law of supply and demand. and those who hold such promises to pay are in the creditor class. This problem of stable money has been tackled during the last In t~e latter class are holders of life insurance, savings-bank year by the American Farm Bureau Federation, the National depositors, pensioners, annuitants, wage and salary earners, owners Grange, the American Federation of Labor, some State bankers' of notes and bonds, the endowment funds of colleges and hos­ associations, and other organizations, including the Iowa State pitals, etc. Cheap money, resulting in the rise of commodity Bar Association. Committees are at work on the problem, some prices, adversely affects the creditor class; on the other hand, the reports have been submitted, but to date no definite specific pro­ debtor class in time of inflation can more readily pay oft' the gram has been recommended. debts contracted before the inflation. There are some plans that have received wide discussion. One In_ the increase in commodity prices from 1914 to ·1920 the plan is that we do away with the gold standard altogether and creditors had the value of their investments and incomes more have nothing but credit money. This has the support of John than cut in two. During the same period the debtors were en­ Meynard Keynes, eminent British economist and financier. This abled to pay their debts at the peak of 1920 with dollars tess than plan has not received widespread approval on account of the ' one-half in value of the 1914 dollars. It is estimated that in this feeling that we should have a money redeemable in some certain period by the process of inflation $60,000,000,000 were transferred metal or metals. from the pockets of the creditor class to the pockets of the debtor The late Professor Lehfeldt, of South Africa, proposed a plan class. With the deflation of 1920 the operation was reversed in that the gold-producing nations buy up the gold mines and oper­ a somewhat less degree to the benefit of the creditors and to the ate them in the public interest. His proposal was that when distress of the debtors. Those who gave mortgages on real estate there is too much gold, resulting in rising price level, shut down 404 CONGRESSIONAL RECORD-_ HOUSE DECEMBER 11 some o! the mines; and when there is too little gold, resulting in No clear understanding o! present conditions can be reached falling prices, operate more mines even at a loss. Thus by regu­ without a general glance at the field of finance and wealth. lating the world supply of gold the price level would be regulated. Wealth is a somewhat varying term. ,.It must be considered in Another plan which has received much discussion is by Frof. relation to physical properties and the general desire to own and Irving Fisher, of Yale. His proposal contemplates a change in the possess them. The peak of wealth in the United States was number of grains of gold in the dollar, so as to maintain a stable reached in 1920 when it was placed at $494,000,000,000. By 1929 price level. When gold becomes cheap put more grains of gold this had dropped to $373,000,000,000 and to $340,000,000,000 in In the dollar, so it will buy the same quantity of commodities in 1930. Since that time there has been a gradual shrinkage of the , general. When gold becomes dear reduce the grains of gold in national wealth, until now it is probably not more than $325,000,- the dollar, so it will buy the same quantity of commodities 1n 000,000. However, it is fair to say that with the shrinkage of general. Thus he would stabilize the purchasing power of money national wealth, as measured in dollars, from $494,000,000,000 to and maintain the price level. $325,000,000,000, or approximately $170,000,000,000, the purchasing What we have to find is a method of arranging means of ex­ power of the dollar has increased, thereby largely offsetting this change and also means of payment in such a manner as to pre­ shrinkage in national wealth. vent violent fluctuations in the price level. This is another way Attention should also be given to what is called the national of saying that means of payment should be adjusted to the com­ income. The money value of the annual national income in the modity price level. In a period of falling prices it is not so much United States was fixed at $84,000,000,000 in 1929. In 1930 it had that commodities have fallen in, price as the value of gold has dropped to $66,700,000,000, -a loss of $17,300,000,000, or 20.4 per gone up. In other words, the Fisher plan contemplates that the cent. This loss was very largely suffered by labor and agriculture. value of gold in the dollar should be determined by the general It is the direct fruit of unemployment and reduced commodity . price level of commodities instead of determ,ining the price level prices. This in turn has caused the depression to more seriously of commodities by the value of gold in the dollar. affect the masses of the people. Every question that involves the welfare, happiness, and pros­ One of the things generally a.Ueged by economists to have played perity of the people is of concern to the members of the legal a part in bringing about our financial depression was the excess of profession. A well-known maxim is, "Equity will not suffer a production over consumption, both in raw materials and manufac­ wrong to be without a remedy." This maxim .should be applied tured goods. It is doubtful that if the masses of our people had to economic wrong. It is the business of every well-wisher.of the sufficient sustained purchasing power to provide themselves with the Republic to find remedy for wrong. reasonable necessities of life that any overproduction of food sup­ The problems that have confronted our Government and our plies or manufactured goods would have ever been apparent. people in the past have been many, complex, and trying. The Another contributing cause has been the artificial maintenance problems have been political, social, moral, and economic. Each of commodity prices by arrangements which serve for a time, en­ problem was faced with frankness, courage, intelligence, and tol­ couraging production out of line with the economic law of supply eration~ and _solution was always found. The problems confront­ and demand. When these arrangements failed and commodity ing the country since the late war have been the greatest and prices fell it was with sudden effect rather than in a slow and most complex since the foundation of our Government. We can orderly manner. depeiJ,d upon the intelligence and spirit of our people to carry Unquestionably, another contributing cause has been the high forward and onward in the future as in the past. tariff wall built up by the recent Hawley-Smoot tariff bill, which paralyzed trade and exchange of commodities to an unnecessary Mr. ARNOLD. Mr. Chairman, I yield such time to the degree with other countries. · gentleman from Mississippi [Mr. BusBY] as he may desire. The funded war debt owed the United States by European coun­ Mr. BUSBY. Mr. Chairman, a little while ago the gentle­ tries is more than $12,000,000,000. Other loans made by American man from Ohio [Mr. CooPER] commented on a speech that bankers and individuals to foreign countries and their nationals have been pJaced at more than $15,000,000,000. The annual inter­ I made over the radio on the 19th of June. In a previous est on these debts is easily more than a billion dollars, and this conversation a day or two ago he told me he had listened in interest has usually been met by new borrowings from our country. on the speech and that he had seen mention of it in a Before the Hawley-Smoot b111 became a law the annual trade bal­ ance was over a billion dollars in favor of the United States. number of papers. I have called attention to the situation to suggest that the only From the comment he made in his speech I am afraid that possible way the foreign countries and their nationals can pay ~~~~~~~~~~~~~~I~ their debts to our Governmen:t and its people is through the chan­ to present on thst occasion. In order that the entire speech nels of trade and commerce. If the countries who owe us had all the gold in the world that is outside of the United States Treasury, ' may be available I ask una~ous consent to. exten.d my it would not be more than $6,000,000,000. If they should deliver remarks in the RECORD by incorporating that address. that gold to us as a payment on their obligations, it would not The CHAffiMAN. Without objection, it is so ordered; · discharge one-fourth of the amount that are due us. There was no objection. There is one of two th.ings that must happen. The United States must accept, through the channels of trade, the commodi­ The address is as follows: ties of foreign countries in discharge of their debts to us, or we ECONOMIC INFLUENCES AS REFLECTED IN BUSINESS CONDITIONS will ultimately find it necessary and compulsory to cancel our When this financial and business depression shall have passed claims against the foreign debtors. I do not favor that course; I and some future essayist discourses on the conditions of the · rather prefer a modification of our tariff law so as to make it present time, he will probably describe it as having been the most possible for us to trade with foreign countries as we have f9rmerly . dismal year in the mercantile, investment, and financial history done, so that we can sell them our wheat, our cotton, and our of the United States. He will, no doubt, tell us how trade and other products of which we have a surplus, and take in trade for industry were prostrated as never before; how business activities them commodities they have to offer and for which we have a need. in every line steadily dwindled . almost to the point of absolute _If our country is overloaded with money-and we do have now stoppage; how the security markets reached a condition of utter almost one-half of the world's supply of gold-if the countries that coUapse; how the farmer passed through a period of extreme dis­ owe us are without money to buy our surplus products, and if by tress because of the shrinkage in the market values of .his prod­ reason of the recent high tariff we will not permit our people to . uct; how the largest and wealthiest business institutions in normal exchange their products for the products of other countries, we times, such as the steel and copper industries, the great railway not only make it impossible to collect the debts due us but we · organizations and carrier systems of the country, reach~d the bring trade .and _commerce to a stand.still and com..rnit them to a · point where their very solvency was threatened; how bank failures, condition of stagnation. large and small., were spread throughout the country-so numer­ There can be but little doubt that our recent taritr act, which ous as to become startling; how · every type and qharacter of -is the highest tariff law ever enacted in our country, played a business was pr.ofouncUy afi'ected; and bow millions of workers great part in setting in motion the mach~ery which has resulted sought employment and found no work to do. . . . in a world-wide depression. From the very beginning of the con­ A satisfactory explanation of the causes which have brought on sideration of the Hawley-Smoot tarur bill foreign countries feared this condition is as impossible to detail as it is to _point out the its result on the commerce of the world. They have protested atmospheric cross currents and forces that bring changes in the against its enactment, and in many instances have enacted retalia­ weather. We glide tmperceptibly·from the day of clear skies and tory tariff laws in a spirit of resentment: beautiful sunshine into the day of overhanging clouds, high winds, Silver is the basis of currency in India, China, and Mexico. and beating storms. . These countries contain one-third of the people in the world. In the early _part of 19_29 appat:ent prosperity was in evidence Silver has dropped in price until the commodity value of the silver on every hand. All property was advancing in value; stocks, in a dollar is worth only 28 cents. With the shrinkage of the bonds, and securities were selllng at fabulous prices. The sun­ value of silver, the purchasing power of the countries whose cur­ shine of prosperity was about us. . It was the condition ot the rencies are based on silver has likewise shrunk. Since they can business mind of the. country. . not pay for commodities in other countries they have largely Then came October of 1929 and with it the break. Prices ceased to be factors in commerce. Exports to these countries have tumbled, business confidence changed to a sense of fear, and we been reduced and trade has lost as a result. Silver is one of the · were confronted with a new clay. What had been normal pro­ two monetary metals, and its fall in value has been a contributing duction became, overnight, overproduction. Factories closed down cause throughout the world to the depression. or went on part time; unemployment was the result. Purchasing Our situation is not caused by lack of money, or by high interest power of the consumer was curtailed or destroyed, thereby caus­ rates. Of th-e ten and a quarter b1llion dollars of gold in the ing underconsumption. This in turn increased the apparent over­ world, our country holds $4,797,000,000, or 46.8 per cent of it. production, and the process went on. becoming more oppressing This perhaps is more- than we need for any .purpose o! stabilizing as it grew. our currency. If all the goM in the world, two-thirds of which is 1931 CONGRESSIONAL RECORD-HOUSE 405 held by FTance and the United States, was more evenly distributed by foreign nations, I believe the articles from the New York among the commercial nations, the currency of those nati?ns American will be of great assistance to Congress and the would be more stab111zed. - This would increase their purchasmg power and would enable them to take a more active part ln trade country. and commerce. The articles are as follows: We often hear it said that "The banks now have more money than ever before. What is the matt er with business?" The cir­ [No. 1, November 8, 1931] culating medium of ... money " in the United States has not varied Bn.LIONS OF DOLLARS LOSS TO AMERICAN PRIVATE INVESTORS m Fon­ greatly during the past few years. It stamls at about four and EIGN SECURITIES Is DISCLOSED IN A SURVEY JUST COMPLETED BY THE three-quarter billion dollars, or about $38 per capita. What does NEW YORK AMERICAN vary greatly is the bank checks and other methods used in banking to transfer credit from one trader to another. Of the business The survey, covering the entire field of the American public's transacted, not more than 8 per cent is done by cash. Personal foreign financing since the war, reveals enormous depreciation in checks, bank drafts, and other commercial paper repres.ent the at least 90 per cent of the foreign bonds and stocks sold to the other 92 per cent. This is the "currency" that has greatly American public during the hectic period facetiously characterized diminished during the past year. That is due .to the ra:et that as "America's attainment of its financial majority." business is retrenching. It does not desire capital or credit. Do­ What this achievement has cost America's private investors is mestic commerce is more or less at a standstlll. The American tragically portrayed in facts and figures which will be presented public is simply not in a mind to buy. in a series of articles of which this is the first. Interest rates on money are the lowest ever known in our coun­ COST ENORMOUS try. The Federal Reserve Bank of New York recently fixed the rate What the cost of the foreign financing folly has been indirectly 1 Y2 per cent per annum. It is 3 per cent and less at the other can only be approximated. How serious an infiuence the phe­ Federal reserve banks. Yet business does not seek loans at these nomenal losses in foreign securities have been on the American prices; it remains inactive and the depression goes on. securities market can only be surmised. We often hear the question, "When will times become normal Suffice to accept as probably enormous the pressure which the again?" Of course, no one can answer. But, in a general way, huge losses have exerted upon banking and private loans secured we know that the depression can not clear up until the conditions in large part by the supposedly safe foreign securities. With the causing it have been remedied. World trade must be accelerated rapid shrinkage of their value the effect undoubtedly has been to to something like its former volume. National credits must be force heavy dumping of our own American securities with dis­ revived. Tariff walls must be lowered and the exchange of com­ astrous consequences to the American markets. modities resumed. The $17,000,000,000 annual deficit in our na­ The survey includes only those securities actually publicly offered tional income must be restored and the 6,000,000 unemployed in the United States and, presumab1y, bought by the public in firm workers be given jobs. These adjustments will require time. conviction that they were participating in sound investments, as Such momentous results can not be accomplished in a day. In represented by the Nation's leading bankers. the meantime it wUl help if men will deal with the situation as they find it and not continue to look backward on yesterday. We SCOPE LIMITED should cut loose from the wreckage of plans and schemes of other No account is taken of the enormous aggregate of short-term days which line tbe financial shores on every side and cast our credits, central bank credits, etc., running upward of a billion eyes before us with new plans for new developments, using the dollars, and advanced in great part out of public funds placed with advantages now in hand. As these develop we will take a new the Nation's banking community. Nor Is Canada's vast borrowings interest in things. We wlll again get on a firm foundation and included in _the survey. regain our business confidence. When this is done we will be on The story of America's private foreign "investments" is one of a fair road to recovery. simple faith and bitter disillusionment. It is a tale of violent depreciation, of virtual cancellation of in­ Mr. RAINEY. Mr. Chairman, I move that the committee vested funds. It is written across the boundaries of virtually all do now rise. nations, great and minor, of Europe, and through the whole of The motion was agreed to. South America. Other parts of the world contribute to the tragedy, but these two continents--Europe and South America-­ Accordingly the committee rose; and the Speaker having absorbed the greatest proportion of America's private foreign lend­ resumed the chair, Mr. LoZIER, Chairman of the Committee ing of the postwar and war periods. of the Whole House on the state of the Union, reported that America's private foreign financing is a portrait of a nation fol­ lowing blindly the dictates of a banking community suddenly be­ that committee had had under consideration the President's come-international-minded getting into "foreign entanglements" message and had come to no resolution thereon. in a financial sense, and running amuck on misguided conception EXTENSION OF REMARKS of foreign "investing" or lending, extension of leans with a colossal ignorance of prospects, and with a prodigality unequaled Mr. RAINEY. Mr. Speaker, I move that all gentlemen in the economic history of the world. who have spoken to-day on the President's message may be The American private investor's experience in foreign financing permitted to extend their remarks in the RECORD. has become a nightmare, and hundreds of thousands of our inves­ tors have suffered therefrom. • The SPEAKER. . Is there objection to the request of the In all, the world at large during the period of 191~1930 came gentleman from illinois? to the United States for a total of $15,000,000,000 in loans. There was no objection. This is wholly exclusive of the billions advanced directly by our Government to Europe's governments as " war loans " and which WAR DEBTS AND REPARATIONS the debtor countries to-day are seeking to have canceled. Mr. LAGUARDIA. Mr. Speaker, I renew my request that Funds for those loans, too, came from the American investor via the Liberty and Victory loans, but for the purpose of the present I made this morning to extend my remarks in the RECORD survey thE;lY are entirely ignored. As a matter of fact, these gov­ by printing certain tables and other information. This was ernment loans have at least the United States Government's back· objected to by the gentleman from Texas, but I understand ing and as such presumably are subject to protection by Uncle now that he does not object to its going into the RECORD. Sam. But what of the private "investor"? Mr. BLANTON. Reserving the right to object, and I shall not object, the only reason I held the matter up this morn­ THREE CLASSIFICATIONS ing was that the Senate yesterday passed the Johnson reso­ There are three classes of foreign financing: 1. Government loans--by the United States Government to for­ lution, which is to spend $50,000 to accumulate these same eign governments {the war loans). facts. The gentleman from Mississippi [Mr. RANKIN] has a 2. Private credit~xtended by banks and banking houses out resolution that went in to-day that gives the Ways and of funds in their control. · 3. Public loans--advances by American banks and bankers to Means Committee authority to appoint a committee of the foreign governments and corporations and municipalities, the House to investigate these same facts. I think it is worth funds being derived from sale to American private investors of the while, however, for the membership to have this information, bonds and stocks of the foreign governments or corporations. and I do not object. It is with the latter class of financing alone that the American's survey is dealing. The SPEAKER. Is there objection? From an insignificant annual lending of a comparatively few There was no objection. millions, or better still, from being itself a borrower, the United Mr. LAGUARDIA. Mr. Speaker, the New York Amer'ican States following the war became the great supplier of capital for has published figures indicating the extent to which Ameri­ the entire world. . cans have invested in securities of foreign countries. QUESTION OF PRIORITY Naturally, ln view of the difficulties which since have become It is evident from these articles that a thorough search publicly known, the major question becomes-- was made for facts. The results of the New York Ameri­ Which class of loan shall have priority, government-to-govern­ can's survey were published in a series of articles. ment, private credits, or loans made by private American inves­ tors? This is a matter of prime importance to the private In view of the widespread interest in this subject, with investor, especially in view of the violent campaigns now engaging Congress considering the war debts owed the United States tlle financial world with respect to priority of loans. For a great 406 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 many investors the question already has- been answered by reason senttng details of the United States public's · ••tnvesting " record of the virtual Wiping out of their investments. 1n South America. 'l'he source is the Latin-American Bondholders' Our annual private lending abroad bounded forward with amaz­ Association (Inc.), an organization formed, incidentally, because ing rapidity, until it finally crossed the billion-dollar mark in of the tragic depreciation in our investments on that continent. 1924. Then followed a remarkable era of billion-dollar years, dur­ The losses sutfered in South American investments are fantastic. ing which governments, corporations, municipalities, churches, and The association's compilation relates that approximately 80 per almost every other conceivable enterprise or element the world cent of American investments in that continent had been wiped over drew upon the seemingly endless American reservoir of out by reason of the depreciation in market values of the "dollar capital. loans " sold to the United States public! NO DEFINITE POLICY Here are the association's figures: And borroWing was easy. The American investor was relying One hundred and twenty-two South American dollar loans have. upon the bankers. And faith in the banker was virtually the only shrunk in value an aggregate of eleven hundred million dollars. measuring rod for the investor, for the bankers themselves were Their aggregate par value is only $1,531,906,000. subjected to virtually no restriction. WORTH ONLY 10 PER CENT The State Department at Washington. which conceivably is the proper safety valve for such activities has never had a definite For some countries the bonds sold to American private investors. policy regarding private loans to foreigners or foreign issues :floated dropped to an average of less than 10 per cent of their par value. in the United States. From Washington comes this explanation of Peru's bonds were selling this year at 6.8 per cent of par I the State Department attitude: Nor was this an isolated case, " There is an understanding between financiers and the depart­ Bolivia's bonds were quoted at but 7.7 per cent of par. ment by which all such loans are submitted informally to the But why take individual instances for recording? Here is the State Department before any action is taken in order to secure association's compilation country by country: State Department approval. " This has been the practice for some time now dating back A~pro:dmate mar- to the Coolidge administration. In general, loans are approved if et value at 1931 for constructive purposes rather than for military purposes." Approximate low Amounts principal Contraction LITTLE RESTRAINT issued amounts in values Actually the State Department control over foreign issues has outstanding Per from par been perfunctory. Its restrictive powers were exercised, if at all, Dollars cent 1n exceptionally few instances on record. of par No official restraint was practiced anywhere in the United States Argentina ______with respect to foreign loans being sold to American private in­ $420, 418, 500 $389, 414, ()()() 1.22, 035, 000 314 $267. 379, 000' vestors. Not even the blue-sky control which frequently detects Rolirta ______6.11, 653,500 59, 293, ()()() 4, 521,000 7. 7 54, 772,000 and prevents fraudulent or suspicious domestic financing was BraziL_------414, 130, ()()() 359, 745, 000 63,035, ()()() 18.1 296, 710, 000 etfective in stemming the tide of foreign loans. Chile ______296, 112, 000 282, 935, 000 33,947, ()()() 12.0 24.8, 988, ()()() The sellers of these foreign securities enjoyed an absolutely Colombia:______170, 331i, 000 154, 358, 000 28,7 1. ()()() 18. 7 125, 577, 000 Peru_------94,500, 000 90.950,000 5, 152, ()()() 6.8 84,798,000 free hand in their foreign-issue otferings in the American market, Uruguay___ ------0!, 757, 000 59,490,000 14,272, ()()() 2!.0 45,218, ()()() even securing listing on the New York Stock Exchange and other TotaL ______American exchanges by the mere formality of presenting an in­ I. 531, 906, 000 1, 306, 185, 000 272, 7{3, ()()() ------I. 123, 442, 000 nocuous document prepared by the minister of finance or treas­ - urer of the foreign nation, municipality, or enterprise. No check-up was made by the stock exchange to ascertain the One of the Peruvian National Government issues sold at 5~. The interest alone called for 6. The bonds were sold at 911f2. accuracy of the statements therein made, and no recourse is left The association estimates that 200,000 investors and millions of to the American investor but to sit idly by while his investment other people in the United States are directly involved in these sutfers untold shrinkage. loans. The chairman of the association remarks: NO RECOURSE "It is too much to hope that all of these issues will ever be paid For to what source is the American private investor to appeal 100 per cent." · for aid in proving suspicions of fraud or immorality in the financ­ Chile, Bolivia, and Peru already have defaulted on their bonds~ ing? At least the great banks of the country and the banking houses now worried by their " frozen credits " in foreign nations EXACT STATUS VAGUE can demand Government support to their attempts to recuperate Brazil, while not actually in default, has made an arrangement their· losses. whereby its obligations are paid by coupons of interest-bearing But the individual private investor has nothing but a vicious scrip. Considerable mystery still surrounds the actual disposition loss to record his participation in the Nation's rise to "world of the Brazilian debts. banking leadership." The scrip policy has been officially adopted by the Government How great an outpouring of public otferings of foreign securities of Brazil through an arrangement with creditors, but as yet the was experienced during the last eight years. alone is graphically Brazilian States and municipalities have not announced their evidenced in the following table: status regarf:1ing their securities. 1923------$497,000,000 1924------1,217,000,000 [No. 2, November 9, 1931] 19261925------______1,288,000,0001,316,000,000 FINANCING CoMPLETED MAINLY THRouGH SALE OF "DoLLAR BoNDs •• During the period 1914-1930, inclusive, $2,383,000,000 South 1927------1,577,000,000 American government and corporate bonds and stocks were sold to 1928 ------1, 489, 000, 000 private investors. in the United States. 1929------705,000,000 The total borrowings were divided as follows: 1930------1,087,000,000 What amazing infiuence had stretched itself over the United Argentina------$924,740,000 States sufficient to induce such prodigal lending? True, the Na­ Chile------514,652, 000 tion emerged from the war powerful in resources, and its material ColoDlbiaBrazil------______448,667219,774,000, 000 wealth, aside from loss of man power, was tremendously increased. But why the staggeringly immense foreign lending? Peru------103,710,000 ' Bolivia------72, 930, 000 SECRET GUARDED UruguaY------53,918,000 Representative McFADDEN, chairman of the Congressional Bank­ Venezuela------42,892,000 ing and Currency Committee, has publicly declared that interna­ , ParaguaY------~------2, 272,000 tional bankers reap commissions or profits of 8 to 10 per cent on The greatest portion of South American financing in this market foreign financing. has been through sale of "dollar bonds" to the American private The exact figures of commissions or profits are closely guarded investor. There are still outstanding, at par value, $1,396,000,000 secrets. The New York American "attempted to ascertain the fig­ of such bonds. ures from New York bankers, from Washington, Paris, London. VALUE AT LOW PRICES Berlin, and elsewhere, but all to no avail. They may hold the Their value, however, at the 1931 low prices, approximated $272,- secret for the great banking flotations! There has lately arisen a 000,000, a depreciation of 80 per cent. growing demand for congressional investigation of the whole sordid The above table of South American "investments" sold to story of American foreign financing spree. American investors entirely excludes whatever credits have been Representative McFADDEN' s assertions, if they can be accepted, advanced to. South American goverllii!ents, business enterprises, would place a possible profit to the bankers on their foreign municipalities, and others, where the funds were not obtained financin,g operations at from twelve hundred million to fifteen through direct sale of securities to the American public. hundred million dollars. At 5 per cent the profits to the security It is understood that the aggregate of such credits is enormous. dealers would be $750,000,000. There has also been a huge total of otferings to the American pub­ But whatever the inducement for the great flood of foreign lic of securities representing United States or semi-United States financing the American investor is paying the fiddler. companies operating in South America, but which also has been SOUTH AMERICA HIT excluded from the present study. What is the record? Only facts and figures are presented. BIG SHRINKAGE In the course of the American's survey a compilation became The record of the " dollar loans " of South America bought by availa~l~ from a seemingly unprejudiced source. It is a table pre- American private investors is dramatic evidence of the phenomenal 1931 CONGRESSIONAL RECORD-HOUSE 407 shrinkage in values. The complete record of each "dollar loan," Complete record of 11 dollar loans "-Continued as compiled by the Latin-American Bondholders Association (Inc.), is shown in the following table: Approximate Coo- Complete record of " dollar loans" Amount Borrower ~~ Year Price issued cent Amount Low, alMarklet Approrimate outstanding 1931 v ue, ow, Cou- 1931 Amount Borrower ppoenr Year Price issued Amount Low, Market cent outstanding 1931 value, low, COLOMBIA 1931 National Govern- ment. ______..$2.'i, 000,000 6 192i 92% ~:m. 750, 000 20 $4,750,000 ARGENTINA 35,000,000 6 1928 95 33, 500, 000 19 6, 365,000 Agric. Mort. Bank___ 3, 000, 000 7 1926 94 2, 200, 000 21~ 467,000 National Govern- 3, 000,000 7 1927 97~ 2, 600, 000 20% 533,000 ment. .•••••••••... $40,000,000 6 1924 96% $35, 938, 000 35% $12, 758, 000 5, 000,000 6 1927 92 4, 250, 000 20 850,000 30,000,000 6 1924 95 27, 657, 000 35~ 8, 918, 000 5, 000,000 6 1928 93~ 4, 250, 000 21~ 914,000 45,000,000 6 1925 96 41, 818, 000 35~ 14,8-15, 000 Antioquia depart- 29,700,000 6 1925 96~ 27, 605, 000 35~ 9, 800, 000 ment: 20,000,000 6 1926 98 19, 008. 000 35~ 6, 748, 000 A. ______7 1925 3, 000,000 858,000 16,900,000 6 1926 98~ 15, 942, 000 35% 5, 659, 000 3, 000,000 7 1926 ~ } 5, 200, 000 16~ Z:', 000,000 6 1927 98~ 25, 650, 000 35H 9, 100, ooo BA------______c ______6,'000, 000 7 1926 91% 5, 100, 000 16 ~ 842,000 21,200,000 6 1927 !}9 20, 268, 000 35 7, 195, 000 2, 500,000 7 1927 96% 2, O"vO, 000 16~ 325,000 40,000,000 6 1927 99% 38,227,000 35 13, 571, 000 3, 750,000 7 1928 95 20,000,000 5~ 1928 97 19,217, 000 31 5, 957, 000 D------­ % } 5 000 000 16~ 813,000 D------1, 750,000 7 1929 93 ' • Buenos .Aires Prov- 7 1927 93 3, 716, 000 14 520, ()()() ince ______14,472,000 7% 1926 99 12,588,000 1st..------2d ______4, 000,000 25 3.147, coo 4, 000.000 7 1927 94~ 3, 670, 000 13 477,000 2,110, 000 10,600,000 7 1926 96% 8, 978,000 23% 3d.------4, 350,000 7 1928 96~ 4, 121, 000 13 536,000 41, 101,000 6 1928 96% 39,496,000 19% 7, 702,000 Interest. ______900,000 8 1926 96% 800,000 17 136, ()()() 2,099,000 11, 675, 000 6Yz 1930 95% 11, 500, 000 18~ Medellin City______3, 000, ()()() 7 1926 93~ 2, 600, 000 22 572,000 2,341,000 Buenos Aires City___ 8, 490,000 6~ 1!124 96~ 7, 676,000 30% 9, 000,000 6% 1928 93~ 8, 350, 000 14~ 1, 232,000 3, 396, 000 6 1927 97% 3, 221, 000 28 Caldas Department_ 6, 000,000 7% 1926 95%} 3, 396, 6 1928 98H 3, 242, 28 =: g:;g 98 8, 00,000 20)i 1, 721, ()()() ooo ooo 4, 000,000 7% 1926 Cordoba Province___ 5, !143, 000 7 1!125 95 4, 743,000 41 1• 945• 000 Cauca Valley De- Cordoba City ______4,GG0.500 7 1927 98)4 4,414,000 16 706• 000 partment______2, 500,000 7Yz 1926 525,000 :~} 3, 500, ()()() 20 700,000 2, 547, 000 7 1927 97 1, 750, 000 30 1, 500,000 7~ 192i Mendoza. Province__ 6, 500,000 7~ 1927 98~~ 5, 000,000 18 1,062, 000 4, 500,000 7 1928 96 4, 125, 000 17 701,000 Banta Fe Province___ 10, 188, 000 7 1925 96 7, 734, 000 30 2·:~:: Cali City______2, 000,000 7 1927 93 } 13anta Fe C'ity______2,122, 500 7 1927 94% 1, 795,000 25 6-'35, 000 7 1928 97 2, 600, 000 22 572,000 Tucuman Province.. 2, 122, 500 7 l!m 94~ 1, 897, 000 25 474,000 250,000 7 1930 97 000 TucumanCity ______3,396,000 7 1928 9G% 3,150,000 25 788• Cond inamarca De- partment______12,000,000 6% 1928 93~ 11, 500, 000 15~ 1, 783,000 Total for Ar- I 1----1 I ______, , Bogota City______~: m: ggg 8 1924 98 4, 900, 000 25 1, 225, ()()() gcntina ______~ 500 ------______------389,414,000 l 122 035 000 6}1 1927 91 2, 250,000 20H 461, ()()() Santander Depart- BOLIVIA ment. ------2, 000,000 7 1923 94 1, 927, 000 25 482,000 National Govern- '11kima Department. 2, 500,000 7 19~ 93% 2, 112, 000 23 486,000 ment______2, 400, 000 6 1917 !17% 1, 279, 000 7 QO, 000 Barranqoilla City_A 500,000 8 1925 99 190,000 25 48,000 24, 000, ()()() 8 1922 101 } B 500,000 8 1925 100 305,000 25 76,000 3, 065, ()()() 8 1924 93 22,074,000 10 2, 207,000 c 500,000 8 1927 101 423,000 25 106, ()()() 2, 188,500 8 1924 93 D 500,000 8 1!128 102 450,000 25 113,000 14, 000, 000 7 1927 98% 13, 380, 000 6~ 870,000 E 500,000 8 1930 99 469,000 25 117,000 23,000,000 7 1928 97% 22,560,000 6 1, 354,000 ------l'----1----l------li ----1------1------~--·1---- Total for Co- 1'i0, 335,000 ______------154,358,000 ------28,781,000 Total for Bolivia. 68,653,500 ------59,293,000 4,521, ()()() lombia ••.••.. ------1------,==I==== BRAZIL PERU Federal Government. 50,000,000 8 1921 98 32, 546, 000 20 6, 509,000 National Govem- 25,000,000 7 1922 961,; 17,881,000 15 2, 682,000 ·ment. _____ .______15,000,000 7 1927 96% 14,400,000 10 1, 440,000 9, 541,000 60,000,000 6~ 1926 90~ 56, 121, 000 17 50,000, 000 6 1927 91% 48, 000, 000 5~ 2, 520,000 41,500,000 6~, 1927 92~ 39, 477, 000 18 7,106,000 6 1928 91 24, 400, 000 7 1, 708, 000 1,182, 000 25,000,000 Rio de Janeiro City. 12,000,000 8 1921 97~ 8, 295, GOO 1~ Callao Province_____ 1,500, 000 7% 1927 99 1, 250, 000 10 125, ()()() 30,000, ()()() 6%· 1928 97 30, 000, 000 10 3,000, 000 Lima City______3, 000,000 6% 1928 93 2, 900, 000 13~ 399, 000 99 1, 770, 000 20 354,000 1 1, 770,000 ~------1 ---- ! ------1------1~--1------Cearo State______2,000, ()()() 99~ l, 980, 000 15 2!17,000 Total for Peru. 94,500,000 ______90,950,000 6, 152,000 Maranhao State ____ _ l, 750,000 ~I7 1928~m 94 1, 702,000 10 170,000 1==:==== !}7~ 8, 128, 000 12 975,000 Minas Geraes State.. 8, 500,000 6% 1928 URUGUAY 8, 000,000 6%1 1929 87 7, 812, 000 12 937,000 Parana State ______429,000 4, 860,000 7 1928 98 4, 642, 000 9~ National Govern- Pernambuco State__ _ 6,000, 000 7 1927 97~ 5, 248, ()()() 7 367,000 20 259,000 750, ()()() ment.------1, 505, 000 5 1!115 90 1, 293, 000 Rio de Janeiro State. 6,000, 000 6% 1929 91~ 6, 000, 000 12~ 7, 500, 000 8 1921 98% 3, 500, 000 30 1,050, 000 Rio Grande do Sul 30,000,000 1926 96~ 28,026,000 25 7, 007,000 8 1(}21 1, 500,000 6 State.------10,000,000 99~ 6, 000, 000 25 17, 581, 000 6 1930 98 17, 304,000 25 4, 326,000 12 1, 170, ()()() 10,000,000 7 1!l27 98 9, 748, 000 Montevideo City___ _ 6, 000, 000 7 ] 922 97 4, 500, 000 16~ 754,000 23,000,000 6 1928 94}4 23,000,000 10 2,300, 000 18 876,000 467,000 5, 171,000 6 1926 93~ 4, 867,000 Cons. MunicipaL ••• 4, 000,000 7 1930 97 3, 893, ()()() 12 1 ----~-- 1 ------1----1------Porto Alegre City. __ 3, 500,000 8 1922 99 3, 105, 000 12 372,000 366,000 Total for Uru­ 4, 000,000 7% 1!126 96 3, 664, 000 10 59,490,000 14,272,000 2,250, 000 7 1928 97~ 2, 097, ()()() 8 168,000 guay------67, 757, 000 1------Santa Catharina State __ ------5, 000, 000 8 1922 101 4, 705, 000 12 565,000 Sao Paulo State ______10, 000, 000 8 1921 97~ 4, 950, 000 28% 1, 411,000 [No. 3, November 10, 1931] 1, 912,000 15, 000, 000 8 1925 99~ 15, 000, 000 12~ MoRE THAN Srx BILLioN BoRROWED HERE FRoM PUBLIC INVESTORS 7, 500, 000 7 1926 96~ 6, 914, 000 10 691,000 15,000,000 6 1928 94%1 14,698,000 10 1, 470,000 European governments and semigovernmental agencies, when 35,000, 000 7 1930 96 1 31,489, 000 47 14,800,000 they sought loans in this country in recent years, found the Sao Paulo City------8, 500,000 6 1919 95~ 5, 706,000 19 1,084, 000 4, ooo, ooo 8 1922 100 3, m, ooo 14~ 460,000 American investor's pocketbook wide open. 1------1--- Advised by American bankers that they were making sound Total for BraziL 414, 130,000 ______= ------!359, 745, 000 =··=·=--=-l=63=,0=35='=000= and safe investments, American private investors absorbed a 1 staggering amount of European securities. CHJLE The price they have paid for their error is colossal. Nationalment. ______Govern- _ The New York American's survey discloses a depreciation of 18,000,000 7 1922 96~ 15, 100, 000 18 2, 718,000 42,500,000 6 1926 93~ 40, 413, 000 10 4,041,000 almost $800,000,000 has taken place in American private investors' 27,500,000 6 1927 93~ 26,004,000 10 2, 600,000 holdings of European government and quasi-government securities. 16,000,000 6 1928 94 15, 577, 000 12 1,869, ()()() What the American private investor has lost in European corpo­ 45,912,000 6 1928 93~ 44, 152, 000 12 5, 298, ()()() rate securities (as distinguished from government and government­ 10,000,000 6 1929 93~ 9, 790,000 12 1, 175, 000 is 25,000,000 6 1930 91% 24,875,000 11 2, 736, ()()() guaranteed issues) another story, but equally tragic. Mort. Dank of Chile. 20,000,000 6~~ 1925 97~ 18, 700, 000 12 2, 244,000 Since 1914 Europe as a whole obtained upwards of sixty-seven 20,000,000 6~ 1926 99~ 18, 623, 000 23~ 4, 376, 000 hundred million dollars from American private investors in the 10,000,000 6 1926 98~ 10, 000, ()()() 12 1, 200,000 form of loans or through sale of stocks in this country. 1, 924,000 20,000,000 6 1928 95~ 19, 237, 000 10 is 20,000,000 6 1929 92 19, 797, 000 7~ 1, 485,000 This 40 per cent of all foreign investments made by American Chilean Cons. Mun. 15,000,000 7 1929 9! 14,767,000 12~ 1, 809,000 private investors during the period 1914-1930, inclusive. In all, Santiago City __ • ___ _ 4, 000, oco 7 1928 100~ 3, 722, coo 8 298,000 15 billions of foreign offerings were floated in the American market 2, 200,000 7 1930 96% 2, 178,000 8 174, ()()() to private investors. · TotalforChile. 296,112,000 ______------282,935,000 33,947,000 Emphasis is placed on private investors throughout the present I - • l==l==== series so that there will be no misconception of the field covered. 408 CONGRESSIONAL RECORD-HOUSE DECEMBER 11 This series deals only with foreign bonds and stocks actually Fourth. The list of American citizens' investments in the gov.. - sold to the private American investor through publlc offering by ernment bonds of 16-European countries shows a loss of 43 per American bankers. It ignores entirely the billions lent directly by cent from par value at a recent figure, which was not the low the United States Government to Europe's governments as " war figure of the European debacle. loans." Fifth. Banking commissions on the sale of the fifteen billlon of , Twenty-six European nations and political subdivisions dipped foreign securities floated in the United States since 1914 would into the American private investor's funds at some time or other amount to $750,000,000 if 5 per cent can be accepted as a fair during the last 17 years. And where the government or munici­ average commission. pality of a country or region for some reason or other failed to These bankers' commissions, however, sometimes greatly ex­ float an American loan, its corporations borrowed in the United ceed 5 per cent, so that an estimate of $1,000,000,000 in commis­ States. sions would not be excessive. Governments, however, accounted for approximately five-sixths Sixth. None of the foregoing figures have anything to do with of the total borrowings. United States Government loans direct to European nations dur- The complete record covering the 17-year period 1914-1930 for ing and immediately following the war. · every European country or division will be found at the right. Securities of 16 European governments and government agencies Not all of these securities still are outstanding. Some have been have shrunk in value more than 43 per cent since they were sold retired, and a great number of "refunding " operations have been to American private investors. effected whereby new securities were issued, almost invariably Total depreciation from par value of these European securities through the American market, to substitute for or retire Issues amounts to more than $700,000,000. previously outstanding. · And still this enormous loss excludes entirely the vast amount There still are outstanding in excess of $2,400,000,000 of such of European corporation securities which also were sold to Ameri­ European government and government-guaranteed issues, at par can investors. value. This is the total now owned by American investors. LOSSES TO LNVESTORS The current market value of these issues is $1,600,000,000. For the purpose of ascertaining the status of American private Their depreciation from par value is $772,000,000. investment in European government and semigovernment enter­ European securities publicly· offered in the United States, prises the New York American survey was divided into two parts. 1914-1930 The part dealt herewith covers those countries where the decline has been bigger than 10 per cent. Government Corporate Total Losses to American investors run into staggering amounts. The $75,000,000 old Russian loans, for example, have been completely wiped out. England______$1, !70, 287,000 $97, 828, 000 $1, 568, 915, 000 Depreciation of 50 per cent or more are frequent. France______1, 157,295,000 21,950,000 1, 179, 245, 000 Accompanying compilation reveals the tragic consequences of Germany __ ------949, 842, 000 430, 794, 000 1, 380,637,000 America's liberality in lending bil11ons of dollars to Europe, over ItalY------410,795,000 206, 837, 000 617, 632, ()()() Belgium______305,545,000 34,130, ()()() 339, 675, 000 and above the billions advanced by our Government as war loans. Norway------184.625, 000 26,515,000 211, 140, 000 Every country in Europe availed itself of the American liber­ Switzerland______105, 322,600 12,480,000 117, 802, 000 ality. Sweden______25,000, 000 142, 846, 000 167,846, ()()() Germany was a particular beneficiary. That nation's government Netherlands------96,451,000 18,947,000 115, 398, 000 Austria______99, U 1, 000 15,009,000 114, 120,000 and semigovernment units now owe to American private investors Poland_------132,075,000 39,250,000 171,325,000 over $700,000,000. Denmark______215,077,000 7, 164,000 222, 24.1, 000 CURRENT vALUE Danzig_"------3, 000,000 3,000.~ How the market rates this debt is exemplified by the current Saar TerritorY------11,500,000 11,500,000 Hungary __ ------48,650,000 40,293, ()()() 88,943,000 value of only $277,000,000. Russia______75,000,000 75,000,000 Depreciation in German Government and semigovernment secur­ Rumania______9, 169, 000 9, 169,000 ities alone approximates 57 per cent. Finland ___ ------70, 000, 000 7, 000,000 77,000,000 It is a sad commentary on the German lending that some of Estonia __ ------4, 000, 000 ------4, 000,000 that nation's outstanding citizens now complain that they were Spain _____ ------______44,400,000 44,400,000 Luxemburg______------7, 500, 000 7, 500,000 virtually implored by American bankers to accept loans. 'Ihe pro­ Greece______29,000, 000 600, 000 29,600, ()()() ceeds in a great many instances, notwithstanding the supposedly Czechoslovakia______53, 750, 000 5, _500,000 59,250, ()()() dire needs of the country, were utilized for the construction of Bulgaria _____ ------13,500, 000 13,500,000 bathing facilities, parks, playgrounds, and similar developments. Ireland ____ ------15, 000, (}..'1() 875,000 15,875, ()()() The bankers' funds for making those loans of course came from Yugoslavia __ ------64,285,000 64,285,000 the private American investor who bought the German bonds 1------~------11------TotaL------5, 548,200,000 1, 159,000,000 6, 708,000,000 offered by the bankers. But even this isn't the worst experience for the American in- vestor, forgetting the Russian loan folly. . [No. 4, November 12, 1931) Bulgarian securities sold to the American private investor have Here Is the fourth article in New York American survey of for­ dropped in value 62 per cent. eign securities sold to American private investors. Thus far the Hungarian issues have slumped 60 per cent. Yugoslavian following facts have been shown: securities are available now for 45 per cent of par, a depreciation First. Some fifteen billions of foreign government and foreign of 55 per cent. Poland's securities have slumped 43 per cent. And corporation securities have been floated in the United States since so on down the line for the entire 16 nations of Europe. 1914. Czechoslovakia, Italy, and Norway, along among the 16 coun­ Second. Eleven hundred million dollars' depreciation has taken tries surveyed to-day, show depreciation of 20 per cent or less. place from par in American private investor's holdings of South Norway's securities have slumped 10 per cent. American "dollar bonds." These facts are reflective of aggregate totals for each nation. Third. European government and semigovernment issues of Euro­ Individual issues have slumped as much as 75 per cent. pean countries sold to American private investors have shrunk in The table gives in detail the experiences of the average Ameri­ value almost $800,000,000. can investor in the 16 countries. - Enormcnu depreciation shown in American holdings of European goTJernment issues Par value of offerings now Actual cash in- Par value of Current value Depreciation Deprecia- Country whole or in vested by outstanding of outstanding from par tion (per part out- public of issues issues cent) standing United States

Austria.------$135, 611, 000 $127, 273, 900 $132, 426, 000 $91,520, 130 $40, 905, 870 =~~ ~ Bulgaria------13,500,000 12,870,000 13,348, 537 5, 209, 605 8, 138,932 _ . Denmark------151,977,500 146, 190, 540 149,216,750 114,940,310 34,276,440 _ 22 1 Estonia------·------4, 000.000 3, 780,000 4, 946,500 2, 967,900 1, 978,600 _ 40 Finland __ ------70,000,000 65,225,000 62,948,260 ~~·. ~~.I~ ~~.· ~~·. ~~ _ 41 Germany------·--- 711, 192,600 656,239,950 649,089,110 2 3 _ 57 Greec~------26, 000, 000 23, 330, 000 25, 603,000 14, 985,480 10. 617, 520 _ 41 Hungary------44,650,000 43,606, 100 42,599,300 13,911,530 28,687,770 _ 60 Ireland______15,000,000 14,550,000 3, 612,500 2, 709,375 903, 125 25 Italy------187, 150, 000 176, 150, ()()() 171. 610, 655 137, 386, 302 34, 224~ 353 =1020 . 8 Norway------170,500,000 165,002,325 166,343,000 135, 322,146 31,020.854 _ . K:!ia::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 12~ ~g: ~ nt ~~~: ~ 1~: ~~: ~ 6}, ~~ ~o8 4~ ~: :g =~43 9 Russia------75,000,000 73,687,500 75,000,000 750,000 7~.· ~~2,': _ Saar Territory __ ------11, 500, 000 11, 052, 500 7, 834, 000 5, 481, 170 30 Yugoslavia------~------, ____4_9,_28_6_,_400--il-1-, 684_4_5,·-:-:-.· -:- ~,~-1,-66_4_~·.-:-....-' -:--1--9-:-.-:-::-: :-- ~; ---7-:-·-:-~-.:--- ~ ---=-~-5- Total ______------______------1, 792, 872, 000 1931 CONGRESSIONAL RECORD-HOUSE . 409 [No. 5, November 14, 1931] sales here. The United States, then in the supposedly endless era 1. Four hundred and fifty million dollars depreciation has taken of prosperity at home, absorbed hundreds of millions in German place in value of German Government and semi-Government securities. securities sold to American private investors. Germany, to her amazement, found the American money mar­ 2. American investment losses in German securities are the· kets actually eager to secure her bonds and stocks. And Germany largest in any foreign nation. finally discovered some embarrassment in using these foreign 3.' There is outstanding to-day and owed to American investors funds. more than $700,000,000 of German Government and semi-Govern­ For several years during the fantastic era Germany utilized the ment loans. proceeds of her foreign financing, chiefly from American investors, 4. Germany has been the most prodigious European postwar to meet her reparations requirements. borrower from the United States. Her aggregate borrowings from USE OF LOANS private investors in this country have exceeded thirteen hundred Furthermore, German recipients of American investors' liberality millions, almost all advanced during the period 1924-1930, inclu­ deemed it advis_able to build up their industrial machinery to com­ sive. Our international bankers sold these securities to American pete once again in the world's markets. Proceeds of loans were investors, thereby eari;ling large commissions. also used in the construction of public conveniences above and 5. Germany for years used her American borrowings to meet beyond necessities. Playgrounds, home developments, public her reparations debts. parks, and similar undertakings were all financed with the inflow­ 6. The ogre of a possible moratorium for Germany hangs over lug foreign capital. all her obligations. How freely the American market absorbed German securities is For seven years, 1924-1930, inclusive, Germany indulged in the evidenced in the following table. It presents yearly totals of Ger­ greatest borro~ng spree the world has ever witnessed. man Government and semi-Government securities publicly sold In that period the Reich and its political divisions and German to American private investors: corporations marketed in the United States more than thirteen hundred mlllion dollars of their securities. [Thousands omitted] Liberality with which American investors' funds were advanced to Germany embodied all of the ignorance and amazing lack of Govern­ foresight which characterized the whole postwar foreign financing Year ment Corporate Total era in the United States. As a result American investment losses in German securities I 1924 __ ------$ll0, 000 $8, ()()() $118,000 are the largest in any foreign land . . 1925______158,750 59,500 218,250 57 PER CENT DEPRECIATION 1926 _____ ------151,138 143,108 294,245 1927------·------150, 405 80, 120 230, 525 Of the thirteen hundred and seventy-two milllon dollars total 1928______186,370 106,106 292,476 German financing in the United States, there still is outstanding 1929 __ ------21, 476 10, 149 31, 625 $780,000,000 of Government and semi-Government issues at par 1930------143,308 23,510 166,818 -----1------value. · TotaL______941, 846- 430, 793 1, 372,639 Market value of these securities to-day is $329,000,000. Depreciation totals $450,000,000, or 57 per cent. And even this enormous shrinkage is totally exclusive of losses The aftermath of this fantastic era of foreign lending by the suffered in German corporate securities floated to an aggregate American investor is chilling. To-day the world is rife with ugly above $400,000,000. rumors concerning Germany's capacity to pay, her inclination to Successful flotation of the Dawes plan loan in the international meet her obligations, and similar doubts questioning the safety capital markets opened the eyes of Germany to the vast possib111- of all foreign investments in Germany. And the United States ties for enticing foreign capital into that country. There fol­ investor has the biggest stake of any nation's private investors. lowed then a period of foreign financing for Germany which has This, of course, excludes the political and intergovernmental debts. no duplicate in world history. The dollar-and-cents story of American loans to German Gov­ From years of absolutely no German financing in the American ernment and semi-Government bodies is graphically told in the market there developed an amazing growth of G~rman security accompanying table.

German State i&BUU publiclu &old in United Statu and now outstanding

Interest Amount current

Borrower Amount issued Current value Depreciation Rate per Issue Quota- from par cent price Outstanding tion

Free State of Anhalt __ ------$1,750,000 7 98~ $1,400,000 25 $350,000 $1,050,000 Free State of Bavaria ____ ------15,000,000 6),1l 88~ 11,250,000 35 3, 837,000 7,412, 000 8, 000,000 6),1l 92~ 7, 838,000 35 2, 743,000 5, 094,000 Bavarian Palatinate Consolidated Cities------3,800,000 7 93% 3, 385,000 25 846,000 2, 539,000 Berlin City Electric Co ______------15,000,000 6J,1! 93),1l 14,288,000 40 5, 715,000 8,572, 000 9, 651,000 6),1l 93),1l 9, 541,000 41 3, 912,000 5,629, 000 12,778,000 6),1l 90),1l 12,778,000 35 4, 472,000 8,305, 000 Berlin Elevated Underground R. R. Co·------9, 681,000 6),1l 94~ 9,681,000 44 4, 025,000 5,123,000 Brandenburg Electric Co __ ---- _____ ------.. _____ 5,000, 000 6 93~ 4, 765,000 29 1,381,000 3,383,000 Brown Coal Industrial Corporation------2, 000,000 6J,1! 93),1l 2, 000,000 40 800,000 1,200,000 City of Berlin ___ ------13,000,000 6~ 89 11,579,000 37 4, 284,000 7, 295,000 178,000 6 75 133,000 25 33,000 100,000 1,190,000 5 91% 671,000 65 436,000 234,000 15,000,000 6 95 14,616,000 29 4, 238,000 10,477,000 City of Cologne_------___ ------___ ------8,000, 000 6~ 87~ 7, 014,000 34 2,385, 000 4, 629,000 German consolidated municipal loan of German savings banks and clearing- house associations ______-----__ -----_----_------______------17,500,000 6 94),1l 16,433,000 32 5, 258,000 11,174,000 Central Bank of Agriculture.------19,000,000 7 93 17,300,000 51 8, 823,000 8,477,000 19,000,000 6 95 18,385,000 50 9,192,000 9, 192,000 43,405,000 6 95),1l 41,130,000 49 20,153,000 20,976,000 26,000,000 6 95% 24,963,000 52 12,970,000 11,992,000 Central Bank of German State and Provincial Banks (Inc.) ______3, 500,000 6 95 3, 340,000 31 1,035, 000 2, 305,000 10,000,000 6 95 9, 275,000 33 3,060, 000 6, 214,000 Central German Power Co. of Magdeburg ______2,~.000 6 98}4' 2, 430,000 89 2, 162,000 267,000 Consolidated agricultural loan of German provincial and communal banks------21,000,000 6~ 97~ 20,290,000 38 7, 710,000 12,579,000 Consolidated Hydroelectric Works of Upper Wurttemburg ______4, 000,000 7 93 3, 778,000 40 1, 515,000 2, 273,000 Consolidated Municipalities of Baden______~ ______; ______4, 500,000 7 93 4, 135,000 30 1, 240,000 "2,894, 000 Consolidated municipal loan of German savings banks ______: ______19,950,000 7 93~ 18,385,000 35 6,434, 000 11,950,000 Dortmund Municipal U tillties.------______-----____ ------3, 000,000 6~ 91~ 3, 000,000 45 1, 350,000 1, 650,000 City of Dresden ______------______------_ 3, 750,000 7 94 3, 174,000 32 1, 015,000 2, 158,000 City of Duisburg ______3,000, 000 7 98% 2, 250,000 25 562,000 1, 687,000 City of DusseldorL ______------1, 750,000 7 93~ 1, 312,500 80 1, 050,000 262,500 Electric Power Corporation.------_ 5,000, 000 6~ 87 5, 000,000 38 1, 900,000 3, 100,000 2,500,000 6% 87 2, 500,000 38 950,000 1, 550,000 5,000,000 6~ 99~ 5, 000,000 35 1, 750,000 3, 250,000 East Prussian Power Co. ____ ------·------3, 500,000 6 91 3, 426,000 30 1, 027,000 2, 398,000 City of Frankfort on the Main·------2,800, 000 7 94 2, 800,000 40 1,120,000 1, 680,000 6, 250,000 99~ 6, 062,000 29 1, 758,000 4, 304,000 German Building and Land Bank------5, 250,000 6~ 98~ 5, 079,000 30 1, 523,000 3, 555,000 Government of Germany __ ------110, 000, 000 7 92 83,791,000 64 53,731, ()()() 30,060,000 98,250,000 5~ 90 98,250,000 38 37,335, ()()() 60,915,000 Hamburg Electric Co ______------___ ------4, 000,000 7 95~ 3, 000,000 84 2, 520,000 480,000 Hamburg Elevated, Underground & Street Rys. Co ______6, 500, ()()() 6~5~ 92~ 6, 293,000 50 3, 146,000 3, 146,000 City of Hamburg _____ ------______------10,000,000 6 91~ 10.000,000 39 3, 900,000 6,100,000 City of HeidelbergHanover ______------3, 500,000 7 98 3, 459,000 35 1, 210,000 2, 248,000 1, 500,000 7 98~ 1, 401,000 . 32 488,000 912,000

.r 410 . CONGRESSIONAL RECORD-HOUSE DECEMBER 11 Germa'TI. State isrues publiclv sold in United States and now outstanding-Continued

Interest Amount current

Borrower Amount is

Province of Hanover Harz Water Works------$1,000,000 6 95 $1,000,000 35 $350,000 $750,000 3, 725,000 6~ 94~ 3, 725,000 26 968,000 2, 756,000 City of Leipzig ______------__ ------3, 750,000 7 94~ 3, 339,000 35 1, 168,000 2, 110,000 Leipzig Overland Power Co------2,425, 000 6~ 92~ 2, 101,000 30 630,000 1,370, 000 Luneburg Power, Light & Waterworks (Ltd.)------1, 100,000 7 98 1, OR7, 000 40 434,000 652,000 Free State of Oldenburg______------3.ooo. ooo 7 93% 2,403, 000 45 1,081,000 1, 321,000 Manheim & Palatinate Electric Co.------~ -- 2, 675,000 7 2,675,000 46 1,230,000 1,444, 000 City of Munich. ______------_____ ------8, 700,000 7 ~~ 6,525, 000 34 1,631, 000 4,893,000 Municipal Bank of State of HesseiL------3,600, 000 7 93Ys 2, 700,000 30 810,000 1,890, 000 Municipal Gas & Electric of Recklinhausen ______1, 500,000 7 98 1,384, 000 25 346,000 1, 384,000 Nassau Land Bank._------3,000, 000 6~ 97~ 3, 000,000 45 1, 350, 000 1,650, 000 City of Nuremberg ______---- ___ ------5,000,000 6 94 4,660, 000 26 1, 211,000 3,448,000 0 berpfalz Electric Power Corporation______---____ ------______1, 250, ()()() 7 97~ 1, 077,000 35 377,000 700,000 Eree State of Oldenburg______------3,000,000 7 93~ 2, 403, ()()() (5 1,081, 000 1, 321,925 Pomerania Electric Co ____ ------____ ------3,500, 000 6 92~ 3,427,000 29 993,000 3,4Zl,OOO Provincial Bank of Westphalia------3,000, 000 6 97~ 3,000,000 25 750, Bremen ______------______------___ .__ ----______ll, 250,000 7~ 94 10,019,000 45 4,508, 000 5, 510,000 Stettin Public Utilities ... ~------______------3, 000,000 7 94~ 2,400, 000 30 720,000 1, 680, ()()() Unterelbe Power & Light CO------·------4-,250,000 6 93 4, 097,000 34 1,392,000 2, 704-,000 United Industrial Corporation.______. -- · ------6,000, 000 6~ 97~ 6, 000,000 36 2, 160,000 3,84.0, 000 Vesten Electric RY5------1, 750,000 7 98 I, 614-,000 25 403,500 1, 210,000 Westphalia United Power Corporation·------20,000,000 6 92~ 20,000,000 34 6, 975,000 13,025,000 State of Wnrttemberg__ ------8,400, 000 7 93~ 6,300,000 25 1,575, 000 4-,725,000 ~----- Total. __ -·- ______--____ --_. --.------_-- _------845,088,000 ------780, 226, 000 329, 536, 000 450, 375, 000

Nou.-Cnrrent quotations of above table represent either last sale, last bid, or nominal price.

[No. 6, November 15, 1931] Besides Britain and Germany, decline of 60 per cent or more is · 1. Thirteen hundred ttilllion dollars have been raised by Euro­ shown in corporate securities of the folloWing countries: Belgium, pean corporations through sale of their securities to American 62 per cent; Luxemburg, 63 per cent; Poland, 63 per cent; Nether­ private investors since 1914. lands, 70 per cent. 2. Eight hundred millions of such securities still are outstanding Almost invariably the American investor's money placed in and held by American investors. European corporate issues was used to modernize, strengthen, or 3. Four hundred and sixty million dollars depreciation has taken otherwise improve the competitive position of the corporation:- In place in these securities. This represents 56 per cen.t loss from par some instances the American capital provided the wherewithal value. By countries, the depreciation runs as high as 83 per cent. to build new plants in foreign lands. It would not be a far ex­ 4. Much of this money raised in America has been used in im­ aggeration to say that American private investors capitalized the proving and strengthening the competitive position of foreign postwar industrial revival of Europe. _ industries. • • • • • • • 5. Value of many foreign corporate securities can not be ascer- VALUE OF UNITED STATES INVESTORS' HOLDINGS OF FOREIGN STATE tained because of absence of quotations. . ISSUES DOWN $2.000,.000,000 6. German corporation securitif!S represent almost half all Ameri­ can holdings of European securities. Loss in German corporate Two billion dollars loss to American private investors who issues alone totals $210,000,000. bought European. and South Ametlca.n Government securities sold 7. Bankers' commissions on European corporate securities ranged in the United States since 1914 has been disclosed to date by the from 5 per cent up to several times this rate. New York American. These losses, covering only government and Through sale of their securities to American private investors semigovernm.ent securtttes, are dtvided as follows: Europe's corporations raised an aggregate of $1,134,000,000 new (a) Eleven hundred mlllions depreciation in South American capital during the period 1914-1930, inclusive. "dollar bonds.," which have dropped 80 per cent in value; and The American investor, through American bankers who sold (b) Eight hundred millions decline, from par, in European gov­ them these securities, have become (a) creditor of European cor­ ernment and sem.igovernment issues sold to private American porations through purchase of their bonds and notes, or (b) investors. partner by buying their stocks. Europe and South America combined have taken the bulk of Either "investment" has proved extremely expensive. the $15,000,000,000 raised from the American private investor The American private investor still holds $826,956,000 of Euro­ through sale in the United States of fore1gn securities during pean corporate securities. This is entirely distinct from European the last 17 years. government and sem.igovernment issues publicly floated in the To-day's article, sixth in the series, 1s devoted to another phase United States during the same period. These latter, as disclosed of the foreign. financing era: Sales of European corporation se­ in previous articles in the New York American survey, represent curities to the American public by American bankers, who, it 1S an aggregate loss of about $800,000,000 to the American investor. estimated, profited $1,000,000,000 through selling foreign govern­ Those American investors who bought European corporate secu­ ment and corporation securities in the United States during the rities have been equally unfortunate. period covered by this survey, 1914-1930, inclusive. Depre-ciation of $464,398,000 has taken place in tP,ese corporate issues. Enormous depreciation ·shown in American holdings of European The shrinkage represents 56 per cent of their par value. corporate issues And still this stupendous loss excludes millions more lost in se­ curities for which no present value can be established, or which Par value Actual represent enterprises which have virtually disappeared in recent of offer- cash in- Par value Current De- ings DOW Deprecia- pre- years. in vestments of out- value of tion from Corporations of all Europe dipped into the American investment Country whole by United standing ontstand- cia- or in part issues ing issues par tion funds for new capital, but German corporations obtained almost out- States half the total for the entire continent. standing public In these German corporate issues American investors now suffer a depreciation of $210,000,000, equal to 60 per cent. Accompanying table discloses the experiences of the American Per investor in Europe's corporation issues sold in this country. ant The shrinkage, by countries, runs from 9 per cent for Denmark Austria._------$ll,400,000 $10,758,000 $8,927,000 $3,988,000 $4-,939, ()()() 55 BelgiUIIL-~----- 14,.130, 000 13, 989,000 14, 130,000 4, 239,000 9, 891,000 62 all the way up to 83 per cent for British corporate fiotations in Denmark ______7,000, 000 6, 672,000 4, 004,000 3,647, 000 357,000 9 the United States. France ______17,700,000 17,350,000 17,675,000 13,685,000 3,990,000 22 1931 CONGRESSIONAL RECORD-HOUSE 411

Enormous depreciation shown in American holdings of European Capital issues of all foreign countries of the world publicly offered corporate issues-Continued in the United States, 1914-1930, inclusive-Continued

Par value Actual Country Government Corporate Total . of offer- cash in- Par value · Current De­ ~ngs now vestments or out- value of Deprecia- pre­ Country m _whole (by Unite1 standing outstand- tion from cia- Colombia______$172,588,000 $47,186,000 $219, 774, 000 or m part Stat.es issues ing issues par tion Paraguay------______2, 272, 249 2, 272, ()()() out- bli 103,710, ()()() standing pu c 53,918,000 ~!~J~~======-----~~~!~~~------3;;:::- 31,923,000 Per TotaL______1, 959,241,000 413,379,000 J 2, 372, 620, 000 cent Luxemburg_------$7, 500,000 $6,937,000 $6,946,000 $2,570,000 $4,376,000 63 AUSTRALIA Norway ______24,715,000 23,749,000 23,593,000 16,749,000 6,840.000 28 Australia. ______· 2C9, 188, 000 7, 750,000 276, 938, 000 Poland ______35,250,0001, 34,425,000 30,691,000 11,322,000 19,368,000 63 Switzerland______10,480,000 10,480,000 10,480,000 4, 243,000 6, 236,000 59 FAR EAST Netherlands______7, 350,000 6, 918,000 6, 918,000 2, 502,000 4, 857,000 70 Sweden_------131,446,000,130,924, 000j131, 446,000 52,713,000 78, 733,000 52 China._-----___ ------____ ------__ 10,752,000 50,000,000 60,752,000 Japan. ______------177, €67, 000 193,574,000 371, 241,000 Germany------380,265,000 365,759,000 349,758,000139,464,000 210,294,000 60 Netherland East Indies ______Italy------153, 510,000 146, 193,000 144,019,000 83,826,000 60, 193,000 41 153, 290, ()()() 27,136,000 180, 426, 000 Hungary------40,428,000 39, 140, 000 35, 822,000 16,618,000 19,264,000 56 Palestine ______------350,000 350,000 Great Britain.______42,674,000 42,674,000 42, 547,000 7, 487,000 35,060,000 83 1 TotaL _____ ------__ 342, 059, 000 270, 7l0, ooo 1 612, 769, 000 I 1 1 TotaL_------883,856, OOOI855, 968, OOOI826, 956,000 363,053, 000!464, 398,000 56 World totals (1914-1930), $10,695,154,000 and {No. 7, November 19, 1931] $3,665,410,000 ______$14,360,364,000 1 International loans ------260,047,000 Following is seventh article in the New York American survey 1931 foreign issues in United States______263, 222, 000 of foreign securities sold to American private investors since 1914. The survey has disclosed to date: Grand total ______14,883,633,000 · 1. Approximately $15,000,000,000 of such securitl.es have been sold to the American private investors. Relatively few countries in the world pa-ssed up the opportunity 2. Losses on such purchases run into billions of dollars. Nearly to take advantage of American liberality with respect to pur­ two and one-half billion depreciation has already been proven in chases of foreign securities publicly offered in the United States three classes of foreign issues held by American investors: during the last 17 years. (a) Eleven hundred million in South American "dollar bonds." Nearly $15,000,000,000 of such securities were sold to American (b) Eight hundred million in European government issues. private investors in this period. Of this aggregate, foreign governments received more than (c) Four hundred and sixty-four million in European corpora­ ten billion, or two-thirds. tion issues. Foreign corporations raised $3,665,000,000 through sale of their 3. Probably a billion dollars in commissions were made by securities to American private investors. America's international bankers in selling these foreign securities The $15,000,000,000 total referred to is exclusively proceeds of to the United States investor. the sale of foreign securities direct to American private investors. 4. Depreciation of some issues run above 90 per cent; not a few It does not include the billions of dollars advanced by our issues have been entirely wiped out. Government to European governments as "war loans." Neither 5. Above figures have nothing whatever to do with United does it include the billions which have been invested abroad by States Government loans direct to European nations during and American corporations. immediately following the war. The New York American survey is concerned only with foreign Capital issues of all foreign countries of the world publicly offered securities sold to the American private investor. in the Unjted States, 1914-1930, inclusive European governments and other political divisions and cor­ porations have taken upwards of 40 per cent of the total American "investments" in all foreign securities. Three of her nations, Country Government Corporate Total England, France, and Germany, have taken upward of a billion dollars each. Largest of all countries' security sales to Americans, however, is EUROPE England______$1,470,287, 000 $97, 828, 000 $1, 568, 915, 000 the Canadian total, $3,592,727,000. Argentina's total comes close France------1, 157,295,000 21,950, ()()() 1, 179, 245, 000 to a billion. Other large foreign totals are Italy, with $617,000,000, Germany______949,842,000 430,794, ()()() 1, 380,637, ()()() Chile with a half billion, and Cuba, $609,000,000. By continents, Italy ___ ------410,795, 000 206,837,000 617,632, 000 the totals are : Belgium______305, 545,000 34,130,000 339,675,000 Norway_------184,625,000 26,515,000 211, 140, 000 Switzerland______105,322,600 12,480,000 117' 802, 000 Government Corporate Total Sweden______25,000,000 142, 846, 000 167,846,000 Netherlands______96,451,000 18,947,000 115, 398, 000 Austria______99, 111,000 15,009,000 114, 120, 000 Europe______$5, 548, 200, 000 $1, 159, 000,000 $6, 707, 000, ()()() Poland.------132,075,000 39,250,000 171, 325, 000 North America ____ ------2, 576,466,000 1, 814,570, 000 4, 391, 036, 000 Denmark______215,077,000 7, 164,000 222, 241, 000 South ..o\merica______1, 959, 2~1, 000 413,379,000 2, 372, 620, ()()() Danzig ____ ------3, 000, 000 3, 000,000 Australia______269, 188,000 7, 750,000 276,938, ()()() Saar Territory------11,500,000 11,500,000 Far East______342,059,000 270,710,000 612, 769, 000 Hungary_------48,650,000 40,293,000 88,943,000 Russia______75,000, 000 75,000,000 Rumania______9, 169,000 9, 169,000 EXECUTIVE POWER TO MEET A NATIONAL EMERGENCY Finland __ ------70, 000, 000 7, 000,000 77,000,000 Estonia______4, 000,000 ------4,000, 000 Mr. ARNOLD. Mr. Speaker, I ask unanimous consent Spain ____ ------44,400,000 44,400,000 that the gentleman from South Carolina [Mr. McSwAIN] Luxemburg ______------7, 500,000 7, 500,000 Greece _____ ------29,000, 000 600,000. 29,600,000 may be allowed to extend his remarks on H. J. Res. 67. Czechcshvakia______53,750,000 5, 500,000 59,250,000 The SPEAKER. Is there objection? 13,500, ()()() :: 875,000 15,875,000 There was no objection. Yugcslavia_Fr':ii~~~~======------64,285,000~~: ~ 64,285,000 Mr. McSWAIN. Mr. Speaker, we often hear the remark 1------~------1------Total______5, 548,200,000 1, 159, 000, 000 6, 707, 000, 000 that legislation of a particular kind is needed and should 1======1======1======NORTH AMERICA "have teeth in it." We are face to face with a grave situa­ tion in this Nation, and if the weather during the winter is British West Indies ______------1, 500.000 1, 500,000 Oanada (including Newfoundland) 2, 353, 880, 000 1, 238,847, 500 3, 592, 727, 000 very severe and prolonged and if there is no improvement Costa Rica______10,820,000 ------· 10.820,000 in employment, there may be a serious crisis, and in order Cuba______137,300,000 472,092,000 609,392,000 Dominican Republic______17,300,000 2, 250,000 19.550,000 to meet this crisis unusual and extraordinary powers should Guatemala. ___ ------550, 000 18, 900, 000 19, 450, 000 be vested in the President. If there should be distress and HaitL.------16,000,000 21,765,600 37,765,000 Honduras______500,000 13, 192, 500 13,692.000 serious danger of great suffering for lack of food or lack of Mexico.------5, 796,288 44.082,900 49,879,000 coal or lack of any other necessity of life, the President Nicaragua._------1, 000, 000 1, 000, 000 Panama._------26,800,000 940,000 Zl, 740,000 should not be left to dicker with the owner of coal and the Salvador______7, 520,000 ------7, 520,000 owner of meat and meal and fiour and the owner of cloth­ 1------1------1------TotaL______2, 576,466,000 1, 814,570, 000 4, 391,036,000 ing and cloth and the owner of railroads and other means 1======1======1======of transportation. The President should have the power to SOUTH AllERICA give instant orders for special trains to carry either food or Argentina. ___ ------824, 421, 000 1(10, 313, 000 924, 734, ()()() Bolivia.------­ 63,230,000 9, 700,000 72,930, ()()() fuel or people from one part of the country to the other. BraziL __ ------423, 682, 000 24,985, ()()() 448,667,000 Chile. ______----_----_ 325, 692, 000 189,000, ()()() 514,692, ()()() 1 Flotations which can not be charged to any specific nation. 412 C~ONGRESSI_ONAL RECORP:~HOUSE DECEMBER 11 -Of 'Course, :Mr. Speaker., we hope it will not be necessary of the \Chairman of the National Emergency Board 11.nd .in _ to exercise this 110wer; we hope that the winter will be mild cooperation with the Secretary of War, the necessary food, and that unemployment conditions will improve. But .if we f~, clothing and medicine and doctors will 1>e un -their­ stumble along motivated merely by hope and do not make way, going as fast as airplanes, trains, and motor trucks provisions 1n advance for a real emergency, -then -we have can carry them for-the ·relief of the people. not done our whole duty. It wm be too late ·to -pass such This should be permanent legislation. True, it is sug­ legislation after the emergency arises. We shou1d foresee gested by the present possibility of an acute emergency, but the possibility of such ·a situation and give the President the the powers here proposed to be conferred Should reside in power to do whatever may be necessary to "be done to give the President at -all times, "because we ·can never tell when· instant relief, and thus _prevent what might prove a national some great disaster shall overtake· a section or city of our disaster, and, therefore, a national disgrace. country. Due to the limitations of our Federal Constitution, Therefore, Mr. Speaker, I have hastily .arranged .and tried there is no police power in the Federal Government, and in to express in legislative form my thoughts upon this sub­ time of peace the authority of the President to act ior the ject, and I have included them in House Joint Resolution 67, re1ief of the people is very different from the .authority of which is herewith printed for the information of the Con­ the gove.rnors of the respective States. But under our eco­ gress and the country. · This national -emergency board con­ nomic structure the governors are helpless unless .the things templated ·by ·my resolution is modeled somewhat after the necessary to help the people exist within the Sta:te. In my general powers exercised by the wm· Tm:lustrtes Board, own State there- is no coal mine ~ and no oil well and very headed "by ·file "Hon. "Bernard M. Baruch, during the World · little wheat grown. If our State were endangered by long War. a::t is admitted on all hands that the work of said War seasons of terrible cold, our governor would oe powerless to· Industries Board was a most _powerful factor in mobilizing · furnish fuel to keep our people from freezing. · the matedal resources .of the Nation for carrying on the war Fortunately, we have an equitable climate, never severely so successfully. While the powers exercised by the said War cold. in winter, nor severely hot in summer. True, our in­ Industries "Board were practically independent of legislative ·dustries are: dependent upon the mterstate commerce for enactment, .they were -predicated upon the executive power coal and oil, but we have an abundant supply -of hydro­ functioning in time of war. The exercise of war power _is a electric power, and when coupled up with the Soutb Atlantic very different thing from the exercise of executive power in superpower system, we are practically ii:idependent of .a time of peace. 'But the Congress has the power to declare foreign coal supply, except for domestic use and for use ·in the -existence of a national emergency even in time of peace, ·schools, churches, hotels, and other public buildings. But I and to apply unusual and extraordinary remedies for its can conceive of States where the 1Jeople are -dependent for relief. My proposal 'is to give the 'President the 'POWer to their ·coal and oil .on .sources hundreds of miles beyond the declare the existence of an emergency, and then to give limits ·of the State and are likewise. largely dependent for him the power to appoint a board which shall meet the ·supplies of meat and brea9 from beyond the State bounds. emergency by exercising :the powers .conferred by the reso­ Therefore, the President of the whole country should have lution. · the continuous power. to command every resource of the ·It Will be noticed that the members of the board are ap­ Nation in any way, at any time, to prevent suffering and loss pointed by the President -and do not have to be confirmed of life on account of lack of food and fuel and on account by the Senate and that all the .powers of the board may be of m~isting intervening 'State lines. For these ·.reasons, I am exercised by the chairman alone. .Hence there will be no urging this resolution, not only as a part of a program for excuse to let people suffer or die or freeze in one _part of the economy, out as a part of tne permanent powers of the- country when there is an .abundance of cheap fnod and President. · cheap coal in another part of the country,_with · plen~y of Joint Resolution 67, to pl,"omote the general welfare, ·to i'egtilate­ idle railroads and trains to carry cheap food and cheap fuel _commerce amon_g the several States, and to create fiscal agencies from where it is abundant to the -place where it is needed to for the Federal Government by authorizing a national emergency save ·life ·or to prevent suffering. The powers of the States bc:>ard and by defining its powers are inadequate in these res_pects because of the limits of Resolved, etc., That the President of the United States ·is hereby .authorized to create a .body, politic and corporate, by "the name and State lines. In most cases t he grain and the mea t an d the title of the national emergency board, w'hich shall consist of three coal and the oil necessary to supply the needs of the people :persons appointed by -the President, who shall designate one of in some great congested area will have to pass-over the ter._ the three persons to be and to· exercise the .pow.e.rs of .chairman of ritory of one, two, three, or more States. Furthemmre, the the board, and all the powers hereinafter -cenferred -shall -be exer- cised by -and in the name of the chairman of -said board, after President is given -the power to commandeer and to take at consultation with the other members thereof. - the prevailing market prices· or to compel the use· of trans- SEc. 2. Said board shall have power to p1ed_ge the credit of the portation facilities at a reasonable price, wha.t.ever. is needed United States .for the purpose of ·raising money, and shall have to meet the emergency. power to issue -bills -and .notes in -the form of public bonds not .exceeding $2,000,000,000, payable in not less than 5 years nor Thus, if there should be a great fire in Chicago, . or an more than 20 years a't a rate of interest ·not -exceeding 4 -per cent earthquake in San Francisco, or hunger riots in New York, _ per annum, and to use and expend said money for 'the purpose or a strike either in ·the coal mines or on the railroads, the of relieving the state of unemployment now existing in the United · States, an.d of thus promoting and stabilizing interstate commerce, President is not left powerless as he is pow and cmp.pell~d 'Rnd to that end the said national emergency board shall be and to beg and plead with the public to render volunta!Y relief. constitute a fiscal agency -of the United states. The 1·esources of private charity are being terribly taxed. SEc.- s: Said board shall have power to commandeer for its tem- . I · . t :IJorary use .the use of any property of .any person, firm, or corpora- Probably the reserves of the Na tIona Red Cross Soc1e Y are tion. including any or all railroads and any special.tmins.or services partly, if not largely, exhaused. · When the emergency -of such railroads. ·Furthermore, said board shall have the right arises it will be too late .to appeal to the people to raise the to establish and fix by special order the priority in which ship- . dist Th h uld b · th ·ments may be -made,- and all such orders shall be respected and money t :<> re1 Ieve . re~. · e power s 0 e m e · obeyed, subject to the claim.S and penalties hereinafter described. President to start the wheels moving within two or three SEc. 4. Said national emergency board .shall have power to ap- . hours after he receives information of an emergency ·situa- ,point State and local committees as its agents and representatives tion. In the first hour he could appoint the board, if not "n carrying out its powers, and name also organizations of State, already appointed, and order the ·chairman to act ·bY· com- county, .town, and municipality, where the "Same "lllltY be desirable for efficiency, speed,' and economy. · · · · mandeering trains, commandeering carloads of medicines, of SEc. 5. Said national emergency board shall have power to lend · flour, meat, ·coal, oil, cloth, and -everything necessary to pre- money to States or to politica~ subdivisions .at a .rate of interest 1 v.ent the loss of human life and to -prevent human ·-suffering.- not exceeding 2 per ·cent per annum, to ·be :r-epaid in ·net e~ceeding · . ·- - - · - 10 :years, said -muncy- to be used under the -general directiOn and Furthermore, the Pres1dent can order the Secretary of . guidance of said .national emergency board for the building of War to send out tentage, cots, blankets, medical officers, roads, schoolhouses. :educational And -other public buj..ldin'gs, and nurses and trained _personnel and also to furnish from the other necess_ary and proper public works of such States .and pdliti- ' ' . . . cal subdivisiOns ·thereof. Army: :stou~s- food and fuel and :medicure. to 3ll'.event suffermg . SEc. 6. The said uational emergency board is hereby authorized and to save life. Within the next hour, 'Ullder -the directi0n- .and empowered to cooperate with the Secre.ta.ry .of the n-easury of I . 1931 ~ONGRESSIONAL RECORD-. HOUSE 413 the United States in carrying out the existing public-buildings shall be paid to any person drawing a salary from any State or program, and such amendments or additions thereto as shall be municipal government for any extra services that may be per­ made by Congress so as to give employment at the earliest pos­ formed by any such person in cooperation with the board in !ts sible moment to the largest possible number of persons, and so as efforts to assist the people of such State. to result in the shipment of large quantities of building materials. and thus to create a demand for labor from the mine, the field, MINORITY EMPLOYEES the forest, and other original sources of material. Mr. SNELL. Mr. Speaker, I present the usual minority SEc. 7. This legislation is enacted in view of the national emer­ employees resolution under the act for 1929. gency connected with the unemployment of four or five millions of persons in this Nation, thus directly affecting the means of The Clerk read as follows: subsistence of their dependents to the extent of twenty or twenty­ House Resolution 51 five million persons, and indirectly affecting the entire population of the United States. It shall be the duty of said national emer­ Resolved, That, pursuant to the legislative pay act of 1929, the gency board to use the powers hereby conferred to the fullest six minority employees authorized therein and provided for in extent to assist indust.ry, commerce, and agriculture to resume full the legislative appropriation act, 1932, shall be the following­ activity, anci thus to minimize the sufferings incident to said named persons until otherwise ordered by the House, to wit: emergency, and to see that no residents of the United States die Joseph G. Rodgers, to receive compensation at the rate of $3,180 from hunger or cold. The said national emergency board shall per annum; William Tyler Page, M. L. Melltio, Bert W. Kennedy, exercise its power to transport grain, fruits, vegetables, meats, and Frank W. Collier, and James P. Griffin. to receive compensation, their food products, cotton and wool and their clothing products, respectively, at the rate of $2,820 per annum, effective December lumber and other building materials from where they are abundant 8, 1931. and cheap to where they are needed, and to assist and encourage The resolution was agreed to. their use and consumption. For such property as the said board may take and consume it shall pay the reaso!lable market value Mr. RAINEY. Mr. Speaker, I offer the following resolu­ thereof to the owner at the place and time of taking, and for such tion. property as the board may use, but return to the owner thereafter, The Clerk read as follows: it shall pay the reasonable value of such use, including the actual damages, but not including any consequential or speculative dam­ House Resolution 53 ages. In order to prevent profiteering in food, fuel, and clothing, Resolved, That there shall be paid out of the contingent fund the board shall have the power to control priority of shipments of the House until otherwise provided by law, compensation at over all interstate carriers, to give preference to shipments of those the rate of $5,000 per annum, for the services of William Tyler persons, firms, and corporations selling or offering to sell food, Page and Joseph G. Rodgers, respectively, as special clerks to the fuel, or clothing at a fair and reasonable price, and to give the minority of the House of Representatives, such employments to consuming public in congested centers of population the advan­ be in lieu of two minority employees, one at $3,180 and one at tage of low prices prevailing in the agricultural and fuel-produc­ $2,820 per annum, now authorized by the act making appropria­ ing areas. If necessary, the said board shall commandeer for tions for the legislative branch of the Government for the fiscal temporary use for said purpose trains and train crews, coal mines year ending June 30, 1932.• and oil wells, pipe lines and all necessary facilities and accessories. If deemed wise and expedient the said board may use ra11road The resolution was agreed to. trains and crews to transport persons from sections of tl1e country wherein cold prevails to the warm southern climates and to return ADJOURNMENT OVER such persons at the end of the cold season. The said board shall have power to construct temporary quarters, and the War Depart­ Mr. RAINEY. Mr. Speaker, I move that when the House ment shall supply such tents, cots, and blankets as the board may adjourns to-night it adjourn to meet on Monday next. require, all of which shall be returned at the end of the emergency. Mr. SNELL. Will the gentleman allow me to ask him a SEc. 8. It is hereby declared to be the policy of the United question? Is it understood that on Monday we are to go States merely to cooperate with States and municipal authorities in the administration of relief, and the primary duty of the police on with the general debate on the President's message? power of the States rests with the States and the municipalities, Mr. RAINEY. Well, we have no speakers. If the gentle­ and the said board shall respect at all times the local authorities, man has any-- and shall take initiative only when the limits of the States render State power inadequate to the situation. In lending money to the Mr. SNELL. I have one that will take 30 minutes. States and municipalities, the obligations of the governor and Mr. RAMSEYER. Mr. Speaker, will the gentleman from State treasurer and mayor and city treasurer, respectively, shall illinois yield to me to ask the gentleman from New York a constitute sufficient evidence of indebtedness, leaving it to the question? public honor of such States and municipalities to supply later any legal deficiency and to return said money as herein contemplated. Mr. RAINEY. Yes. SEc. 9. It shall be the duty of all executive heads of depart­ Mr. RAMSEYER. I told some gentleman at the desk that ments and the heads of all independent offices to cooperate with I wanted 30 minutes on Monday in which to discuss the all requests of the said board, and the President is hereby empow­ ered and directed during the period of such administration to estate and gift tax. Does the gentleman from New York transfer any duty or function from one department to another have me in mind? department, or to said board, if it may, in his judgment, expedite Mr. SNELL. I think from requests made that we will have and facilitate the administration of relief. The Interstate Com­ probably about an hour or an hour and a half. merce Commission shall see that all orders of the board as to priority or preference in shipment be respected by the carriers Mr. RAINEY. That will be satisfactory. engaged in interstate commerce and that the use of all trains and Mr. RAMSEYER. Will the gentleman go into the Com­ train crews demanded by the board be furnished by such carriers. mittee of the Whole, or ask specially to address the House, SEc. 10. All funds of the said board from any source shall be deposited in the Treasury of the United States, and paid out only in view of the fact that there are so few speakers? upon the warrant of the chairman of the said board, counter­ Mr. RAINEY. We will go into the Committee of the signed by the secretary thereof, and such warrant shall not be Whole. questioned by any person or officer whomsoever, but shall be final · and conclusive and beyond question, and promptly paid. The The SPEAKER. The gentleman from illinois asks unani­ said chairman of the said board and the secretary thereof shall mous consent that when the House adjourns to-day it ad­ each give bond to the United States in the sum of $1,000,000 to journ to meet on Monday next. Is there objection? secure and to guarantee the United States against loss and damage There was no objection. · by reason of any malfeasance or misfeasance in office, and if they, or either of them, or any other member of said board, or em­ EXTENSION OF REMARKS ployee, or agent thereof, shall knowingly and willfully draw any warrant for money not legally and honestly due by the said board, Mr. BACON. Mr. Speaker, I ask unanimous consent to or in excess of the amount legally and honestly due, they shall be extend my remarks in the RECORD by printing therein a very liable to a fine not exceeding $100,000 and to imprisonment not appreciative editorial upon the late Nicholas Longworth. to exceed 20 years. written by a very close newspaper friend of his. SEc. 11. Said board shall make monthly reports in writing to the President of the United States, and shall report oftener if the The SPEAKER. Is there objection? President shall demand, and shall include in such report a There was no objection. statement of all funds paid out and for what purpose paid, and Mr. BACON. Mr. Speaker, under the leave to extend my shall make a final accounting and report of all moneys received and paid out after the President shall declare by public proclama­ remarks in the RECORD, I include the following editorial upon tion the emergency is ended and that the services of said board the late Nicholas Longworth, written by a very close news­ are no longer needed. paper friend of his, Frank R. Kent: SEc. 12. Said board shall have power to employ necessary clerical help and executive assistants and to rent quarters if the same be "NICK" not available in the Government buildings, and the War Depart­ WASHINGTON, April 9.-It is literally true that the death of ment, Navy Department, and Department of Commerce shall fur­ NICHOLAS LoNGWORTH will cause more sincere grief among more nish such. personnel and material to assist in carrying out the people than that of any other man now in public life. He had plans of the ·board as the President may direct. No compensation more real personal friends than any other, and he will be missed .: 414 CONGRESSIONAL RECORD-HOUSE DECEMBER ll in more ways, by more dliferent groups, ·and for a longer time:· In 205. A letter from the Secretary of War, transmitting a this respect there is no other in House or Senate to compare draft of a bill to amend section 47c, national defense act, with him. Distinguished as was his political position and marked as were as amended, relating to military training required to entitle his political gifts, it was his personality that counted. He was no members of the . Reserve Officers' Training Corps to receive back-slapping Pollyannaish politician, who liked everybody 1ndis- commutation of subsistence; to the Committee on Military criminately and spread his friendship thinly over the wide circle Affairs. . of his acquaintaNceship. He was ·a man of taste and breeding, and there were plenty of poople he disliked with extreme cordiality 206. A letter from the Secretary of War, transmitting a and earnestness. But he was by nature a friendly fellow, extraor- draft of a bill to permit the naturalization of certain Fili- . dinarily engaging, and of an amazing personal attraction. It was pinos who served in the United States Army; to the Com­ very easy to conceive a.n affection for Nick. and a. great many mittee on Immigration and Naturalization. people, in and out of politics, did. People liked to be with him, not because he was Speaker of the 207. A letter from the Secretary of War, transmitting a House and a power 1n his party but because he was Nick. There draft of a joint resolution to authorize the acceptance of a probably has never been a man in Washington more in demand bequest to the Army Medical Museum and the Army Medical socially than he, none who mingled with and was at home 1n as many different classes, more welcome 1n all. No matter what the · Library; to the Committee on Military Affairs. group he entered, he added something to it-a sparkle, a charm, a 208. A letter from the Secretary of War, transmitting a touch of gayety, a vibrant and gallant spirit, against which stilted draft of a bill to make provisions for the care and treatment phrases and cold formality melted like frost in the sun. It was f b f th N t' 1 G d Or · d R Re not that Nick did not have a deeply serious side and plenty of dig- 0 mem ers o e a 10na uar ' gamze eserves, - ntty when dignity was demanded. In party conferences his clear- serve Officers, Training Corps, and Citizens' Military Train­ headed judgment, his fine sense of proportion, and his instinctive ing Camps who are injured or contract disease while engaged feeling for the fitness of things made him an important and often in military training, and for other purposes; to the Commit- a controlling factor. te Milit Afi · His share in the shaping of legislation and in the molding of e on ary airS. party policies is a greater one than showed on the surface, because 209. A letter from the Secretary of War, transmitting a a large part of hls achievements in these directions was through draft of a bill to amend section 90 of the national defense his powers of persuasion and personal influence exerted behind act, as amended by the act of April 21, 1928 (45 Stat. 440), closed doors among a few leaders, with whom his talents as com- promiser and conciliator were most effective. The things which pertaining to caretakers for property in the hanpoles, each eager at all times to take · preliminary examina ion o Rouge River, lC .; e every party advantage of the other, fighting almost dally in the . Committee on Rivers and Harbors. House to the limit of their ability, personally there were never , . 216. A letter from the Secretary of War, transmitting a two men more devoted. Each was the other's " best friend" and . report from the Chief of Engineers, United States Army, on had been for many years. The passing of Nick is a loss to his party, to congress, to the country, to his many friends-but no preliminary examination and survey of Runyon Creek, N.C.; man will miss him more keenly than JAcK GARNER, his chief politi- ·to the Committee on Rivers and Harbors. cal rival and antagonist. 217. A letter from the Secretary of War, transmitting a ADJOURNMENT report from the Chief of Engineers, United States Army, on Mr. RAINEY. Mr. Speaker, I move that the House do preliminary examination of channel from Port Lavaca, Tex., now adjourn. to the intracoastal waterway; to the Committee on Rivers The motion was agreed to; accordingly (at 4 o'clock and 5 . and Harbors. minntes p.m.), under its previous order, the House adjourned -218. A letter from the secretary of war, transmitting imtil Monday, December 14, 1931, at 12 o'clock noon. a report from the Chief of Engineers, United states Army, on preliminary examination of San Bernard River, Tex.; to the EXECUTIVE COMMUNICATIONS, E'fC. Committee on Rivers and Harbors. Under clause 2 of Rule XXIV, executive communications 219. A letter from the Secretary of War, transmitting a were taken from the Speaker's table and referred as follows: report from the Chief of Engineers, United States Army, on '1931 · CONGRESSIONAL RECORD-HOUSE 415 preliminary examination o! Bayou Sennette, Jefferson Par­ preliminary examination o! Lake St. Clair and Clinton ish, La.; to the Committee on Rivers and Harbors. River, Mich.; to the Committee on Rivers and Harbors. 220. A letter from the Secretary .of War, transmitting a 235. A letter from the Secretary of War, transmitting a report from the Chief of Engineers on preliminary examina­ report from the Chief of Engineers, United States Army, on tion of the Satilla River, Ga., to the Charlton County line, preliminary examination of upper St. Johns River, Fla., from with the view of securing additional depth, width, and such Lake Harney to Lake Washington, with a view to securing a other improvements as may be found advisable in the inter­ navigable channel of suitable depth and width, together est of navigation and commerce and to connect with the with its incidental effect on :flood control; to the Committee inland waterway; to the Committee on Rivers and Harbors. on Rivers and Harbors. 221. A letter from the Secretary of War, transmitting a 236. A letter from the Secretary of War, transmitting a report from the Chief of Engineers on preliminary examina­ report from the Chief of Engineers, United States Army, on tion of inland waterway from Savannah, Ga .• to Brunswick, preliminary examination and survey of Richardson Creek, by way of Harris Neck Landing; to the Committee on Rivers Ga., and connecting streams;- to the Committee on Rivers and Harbors. and Harbors. 222. A letter from the Secretary of War, transmitting a 237. A letter from the Secretary of War, transmitting a report from the Chief of Engineers on preliminary examina­ report from the Chief of Engineers, United States Army, on tion and survey of Starlilings Creek, Accomac County, Va. preliminary examination of Quiver

• 1931 CONGRESSIONAL RECORD-HOUSE 417 Also, a bill