ADVANCEMENT OF COMMERCIAL AND OTHER INTERESTS.

Mr. BINGHAM. Has there been a complete exhaustion of the appropriation we gave of $100,000?

Mr. WILSON. I think we have a slight surplus left of the unallotted portion.

Mr. GILLETT. How much was unallotted, do you remember?
Mr. WILSON. $25,340.

Mr. BINGHAM. Have you a discretion in that appropriation?

Mr. WILSON. Yes, sir. On page 72, at the middle of the page, after allotting all the portion up to about three-quarters of it, it then says: For meeting occasional and unforeseen expenses arising in connection with foreign trade relations, etc.

Mr. GILLETT. $25.340?

Mr. WILSON. $25,340. Of that amount a certain amount has been used. Some remains. The reason we ask Congress to increase the salary of the Chief of the Bureau of Trade Relations instead of attempting to do it out of our surplus, is that as Congress has appropriated the salary of that chief of division we do not think we could legally add to it out of any other appropriation under control of the department.

Mr. GILLETT. Certainly you could not.

Mr. WILSON. That is the point.

Mr. GILLETT. Yes. Now, suppose you explain to us, Mr. Wilson— we shall undoubtedly be asked a good deal about it-how this $100,000 appropriation which we allotted last year has worked.

Mr. WILSON. Do you mean how it has been expended?

Mr. GILLETT. No; we can see how it has been expended. We will come to that later. We know how that $25,000 has been expended. But how has this organization worked-as you expected?

Mr. LIVINGSTON. Did you accomplish any good by it?

Mr. WILSON. Yes. Mr. Gillett has asked me what results we have to show for the new organization, Mr. Chairman, and the generous appropriation hitherto made.

Mr. BINGHAM. Yes.

Mr. WILSON. My opinion is that it has worked very satisfactorily, indeed. Only to cite a few examples: Of course our previous hearings tell what was being done last year, and anyone who will read those will see that very clearly. But let me mention a few particulars, for instance, of things we have accomplished which we could not have accomplished without this:

First of all, we could not possibly have carried out the tariff negotiations.

Mr. GILLETT. What tariff negotiations do you mean?

Mr. WILSON. The maximum and minimum tariff negotiations. Also, we could not possibly have undertaken these Canadian negotiations.

Mr. GILLETT. What offices have done those things?

Mr. WILSON. The Bureau of Trade Relations and the counselor; and in some cases the division concerned with the country we were dealing with. For instance, if it were the Far East, they would supply us with a great deal of information as to the treatment of our products there, and so on with the other divisions. We could

not carry on the Canadian negotiations either without this increased expert personnel.

Mr. BINGHAM. They are going on now?

Mr. WILSON. Yes, sir. Then we could not watch the treatment from day to day and from month to month of our interests in different foreign countries. Of course the President is bound to see that they continue to treat us well enough to warrant him in extending the minimum tariff. That requires constant vigilance.

Mr. GILLETT. What offices do that?

Mr. WILSON. The same officers.

Mr. GILLETT. What ones do you mean?

Mr. WILSON. The Bureau of Trade Relations.

Mr. GILLETT. You mean these two men?

Mr. WILSON. I mean them and Mr. Osborn and all the personnel of the Bureau of Trade Relations.

Mr. GILLETT. But they do not come under this $100,000, do they-any except those two?

Mr. WILSON. There are several others that do.

Mr. GILLETT. Do they?

Mr. WILSON. Yes; some of the lower-salaried ones.

Mr. BINGHAM. You were speaking about the maximum and minimum tariff. Have those negotiations all closed?

Mr. WILSON. Yes, sir; they have all closed. But in the case of certain undertakings made by foreign governments-as to cottonseed oil, for instance-we have to keep after them, and keep watching to see that they are carried out. Then we have to watch always to see that their treatment continues as promised, and that no new discriminations arise in one way or the other.

Mr. BINGHAM. Then, the maximum and minimum matter has all been concluded?

Mr. WILSON. Oh, yes.

Mr. BINGHAM. The President stated that in one of his letters to the general public. That is the reason I am asking.

Mr. WILSON. Yes; the minimum is extended to the whole world. Mr. BINGHAM. That is what I thought.

Mr. GILLETT. What are these "eight officers to aid in important drafting work?" How will they be employed?

Mr. WILSON. The four officers who receive salaries of $4,500 each are Messrs. Davis and Pepper, commercial experts; and Mr. Miller and Mr. Williams, who are experts on affairs in China, Japan, and the Far East in general. The four officers who receive salaries of $3,000 each are Mr. Evan Young, Chief of the Division of Near Eastern Affairs, who handles matters pertaining to Turkey, the Balkans, etc.; Mr. Patchin, Chief of the Division of Information, which prepares and distributes such correspondence and information as may be necessary to keep the entire foreign service fully informed as to what is being done and attempted, not only by the department, but by every diplomatic office abroad; Mr. Doyle and Mr. Janes, who have had much experience in Latin America, and who devote their time to the study of political and commercial questions in that part of the world. Mr. BINGHAM. They have been with you how long?

Mr. WILSON. They have been with us since we got this first appropriation a year and a half ago.

Mr. GILLETT. Those are the four $3,000 ones?

Mr. WILSON. Mr. Young, Chief of the Near Eastern Division; Mr. Patchin, Chief of the Division of Information; and Messrs. Doyle and Janes, of the Latin-American Division, Mr. Janes having recently been transferred from the diplomatic service, are the officers who receive $3,000 from the appropriation under consideration.

Mr. GILLETT. Then there are four who get $4,500?

Mr. WILSON. Yes. Messrs. Pepper and Davis, the commercial experts, and Mr. Miller and Mr. Williams, who are experts on Far Eastern affairs and in charge of the Far Eastern Division, are the four officers who receive $4,500.

Mr. GILLETT. They have all been with you, however, for a long time?

Mr. WILSON. Yes. These men, with the exception of Mr. Janes, who was very recently transferred from the diplomatic service, where he received the same salary, have been employed in the department since a short time after this appropriation was made. Most of the men were formerly in the foreign service. Until recently we had an additional $3,000 man from the Far East, but finding that there was a greater need for an additional officer familiar with Latin America we transferred the Far Eastern man back to the diplomatic service in China and brought back to the department a man from the diplomatic service who has had much experience in Latin America.

Mr. GILLETT. Just what do they do? Take these two LatinAmerican men.

proper

Mr. WILSON. They do all the important drafting and special study of the enormous number of questions we have with these twenty-one other republics. It is only through the close watch and expert study of men who have served in those countries that we can get the service. These men know Spanish; they know all about those countries. They are responsible for supplying the Secretary with detailed information about all those countries and with drafting the things in the light of that expert information.

Mr. GILLETT. Drafting what kind of things?

Mr. WILSON. Correspondence of every sort; and if you wish to know about the practical results, I will say this: Of course everyone knows that it is only through the diplomatic efforts of the Department of State that we secured for American shipbuilders contracts for two large battle ships for the Argentine navy, which will bring here $22,000,000 to go to American workmen and be applied to the purchase of American material. Then, through the same agencies, through being able to have men to work on the details of these things and to see that we miss no opportunities, we also got contracts for railway equipment in the Argentine amounting to $2,400,000; contracts for the building of two ships for the Cuban Government, to cost about $900,000; contracts for furnishing armor and armament for the Argentine navy, amounting to $1,000,000; contracts for supplying paper to a large Latin-American newspaper, amounting to about $200,000 per annum; the opening up of the Hukuang loan agreement in China, so as to permit Americans to have an equal share with citizens of certain foreign governments in financing and supplying materials for a railway in central China, to cost upward

of $30,000,000; a contract for the construction of a railway in northern China, to be financed with American capital and to be supplied in part with American material, together with harbor works and other industrial improvements in Manchuria, representing in all an investment of $40,000,000. We are also assured of succeeding in concluding a loan to China of $50,000,000, which is to be used in the reform of the Chinese currency system, which will greatly improve business conditions in China, and therefore aid American commerce. The department is now supporting a very large American railway enterprise in Turkey, the success of which we hope for.

Mr. BINGHAM. The State Department claims all these things?
Mr. WILSON. We certainly do.

Mr. BINGHAM. Did the battle-ship builders enter into competition with others for the building of these ships?

Mr. WILSON. They did.

Mr. BINGHAM. How did the State Department come in as a determining factor?

Mr. WILSON. Because the value placed on the friendship of the United States and the arguments we were able to advance were the determining factors. The shipbuilders themselves attest that fact.

Mr. GILLETT. Is that a fact, Mr. Wilson, that is safe to speak of publicly?

Mr. WILSON. I see no objection to speaking of it publicly, perhaps using language that is a little carefully chosen. It is quite a common thing, in a country where there is a big foreign colony of a certain nationality, and where the banks are in the hands of a certain nationality, that that creates an atmosphere favorable to that nationality.

Mr. BINGHAM. There is no doubt of that.

Mr. WILSON. In some parts of the world where we have no steamships, no banks, and no American colony our business men meet with obstacles which they find it difficult to overcome. They are handicapped by being obliged to compete with people of other nationalities who are thoroughly established, who have a material influence in the community, and to whom contracts have always gone in the past. Naturally, it is one of the functions of the Department of State, in the support of American manufacturers and contractors, to attempt to break up a local habit of placing orders in other countries to the exclusion of the United States and to secure just recognition for American citizens who desire the opportunity of competing for such contracts.

Mr. GILLETT. Before you leave South America: None of the men employed under the $100,000 appropriation went down there, did they? It was done by correspondence?

Mr. WILSON. Oh, yes; and by an infinite number of telegrams.

Mr. GILLETT. Yes; but I mean, it was not done by personal visits? They did not visit Buenos Aires?

Mr. WILSON. No; the advantage of having an expert personnel lies in having enough people here so that nothing can be overlooked in any part of the world that can help America; in having somebody who has the time and the expert knowledge to study the question and to draft and recommend and work out the action which will do the most good. Water can not rise higher than its source, and the

foreign service is useless unless we have an adequately manned, expert, and efficient department to tell it what to do. I know that when I first came here, before the reorganization, besides the Secretary of State there were only three or four people who had any responsibility for the larger matters. One man would be expected to pass on an intricate question in China, for instance; five minutes later, a similar difficult matter in Liberia; next, a revolution in Central America; then, a possible opportunity in Chile; next, some discrimination about meats in Europe; and so on. You can see the impossibility, without specialists, of dealing with our interests in the whole world and doing them justice.

Mr. BINGHAM. Is that done to a very great extent by foreign nations?

Mr. WILSON. I think I may say that the government of every firstclass power has this system or its equivalent. In Great Britain they have half a dozen of these bureaus in their foreign office, dividing the world in a politico-geographical way-experts dealing with American countries, with Far Eastern countries, and so on.

Mr. BINGHAM. Do they have them as to us?

Mr. WILSON. Yes.

Mr. BINGHAM. The same as you propose to have them as to other nations?

Mr. WILSON. All of them have them as to us. The same is true in Russia and in France and in Germany.

Mr. BINGHAM. They enter into competition for labor here in the sense of scientific and mechanical labor, do they, in the matter of contracts?

Mr. WILSON. Oh, yes. Nowadays most modern commercial nations are competitors.

Mr. BINGHAM. That I understand; but I want to know whether they are a part and parcel of the administration of their state departments?

Mr. WILSON. Yes; an astounding degree of efficient cooperation exists between the foreign service and the commercial and industrial foreign enterprises in the case of every first-class commercial nation to-day. We are just adopting what our competitors have had before us.

Mr. GILLETT. What have you done with the $25,000 that was left over, that was not specifically appropriated?

Mr. WILSON. I think Mr. Carr has a record of that.

Mr. CARR. I have as to some of it.

Mr. GILLETT. We want, rather, a definite statement as to that.

Mr. CARR. I have not with me exactly the information you want. We can very easily send it to you.

Mr. GILLETT. Is any of it of such a delicate nature that it ought not to be made public?

Mr. WILSON. I do not think so at all.

Mr. GILLETT. If not, we would like a statement of it.

Mr. WILSON. For instance, we had to prepare the Alsop case and counter case within a limited time, and were obliged to employ some outside assistance.

Mr. GILLETT. What is the Alsop case?

Mr. WILSON. The Chilean case that is being arbitrated before the British Government-the King of Great Britain. On a hurry-up