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was the bill upon which the hearings were held. It is House Joint Resolution No. 123. We print it in full as follows:

(H. J. Res. 123, Seventy-second Congress, first session) JOINT RESOLUTION To authorize the postponement of amounts payable to the United States from foreign governments during the fiscal year 1932, and their repayment over a ten-year period beginning July 1, 1933

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That in the case of each of the following countries: Austria, Belgium, Czechoslovakia, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Rumania, and Yugoslavia, the Secretary of the Treasury, with the approval of the President, is authorized to make, on behalf of the United States, an agreement with the government of such country to postpone the payment of any amount payable during the fiscal year beginning July 1, 1931, by such country to the United States in respect of its bonded indebtedness to the United States, except that in the case of Germany the agreement shall relate only to amounts payable by Germany to the United States during such fiscal year in respect of the costs of the Army of Occupation.

SEC. 2. Each such agreement on behalf of the United States shall provide for the payment of the postponed amounts, with interest at the rate of 4 per centum per annum beginning July 1, 1933, in ten equal annuities, the first to be paid during the fiscal year beginning July 1, 1933, and one during each of the nine fiscal years following, each annuity to be payable in one or more installments.

SEC. 3. No such agreement shall be made with the government of any country unless it appears to the satisfaction of the President that such government has made, or has given satisfactory assurances of willingness and readiness to make, with the government of each of the other countries indebted to such country in respect of war, relief, or reparation debts, an agreement in respect of such debt substantially similar to the agreement authorized by this joint resolution to be made with the government of such creditor country on behalf of the United States.

SEC. 4. Each agreement authorized by this joint resolution shall be made so that payments of annuities under such agreement shall, unless otherwise provided in the agreement (1) be in accordance with the provisions contained in the agreement made with the government of such country under which the payment to be postponed is payable, and (2) be subject to the same terms and conditions as payments under such original agreement.

It will be noted that what appears as section 5 in the resolution under discussion (probably) was not included in the administration measure.

This section reads as follows:

Sec. 5. It is hereby expressly declared to be against the policy of Congress that any of the indebtedness of foreign countries to the United States should be in any manner canceled or reduced and nothing in this joint resolution shall be construed as indicating a contrary policy, or as implying favorable consideration at any time to a change in the policy hereby declared.

It may be that, with the knowledge of the sentiment in Congress and throughout the country against favoring foreign nations over our own country, the administration at this late date decides that moratoriums, debt reductions, and debt cancellations, at the expense of the American taxpayer are not particularly popular. In any event, Congress is given the opportunity to give expression to its policy in this regard. We heartily concur in this amendment to the administration bill.

THE TIME ELEMENT

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It was stated to us that the President reached his conclusion to initiate the moratorium on the 17th or 18th of June, 1931. His statement relative thereto was given publication on June 20, 1931. The wires to the Members receiving them were dated June 23, 1931.

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settlement of these debts was the capacity under normal conditions of the debtor to pay, we should be consistent with our own policies and principles if we take into account the abnormal situation now existing in the world.”

Take the case of Great Britain, our best customer, which even in the depression year 1930 took $678,000,000 worth of American agricultural and industrial products. The economic and financial changes of the past year have immensely increased the payments of her payments to us. The series of events through which Great Britain was forced off the gold standard are too recent to require enumeration.

To-day the pound sterling is selling at $3.315 to the pound, which is a 32 per cent discount as compared with last year when it stood at tariff parity or $4.866. All debts to Great Britain from foreign governments, except reparation payments, which are not being collected at all this year, and are not likely to be collected in full next year, are payable in sterling. Her debt to us is payable in gold dollars. The combined effect of these unfavorable factors results in an enormously increased burden for the people of Great Britain.

Payments during the present fiscal year will serve to exemplify the magnitude of the additional burden.

With the pound sterling at par, the British Treasury needs 32,800,000 pounds in order to pay us $159,500,000. With the pound sterling at the rate at which it sold on December 10, 1931, it would take 48,100,000 pounds or an increase of 15,300,000 pounds, or 47 per cent. Or in other words, the burden on the British taxpayer is increased by almost one-half.

When the British debt settlement was made it was estimated that its present value at 444 per cent was 80 per cent of the total amount due prior to funding. If the amount to be raised in pound sterling to meet the obligation to us in dollars is increased by 47 per cent, it becomes apparent that from the standpoint of the British taxpayer he is asked to meet not the obligation as established by our debt commission but an amount considerably in excess of such obligation.

Nothing could more forcibly illustrate the changed situation which places on the executive as well as the legislative branch of Government the duty of reexamining the obligations of our debtors and their ability to meet them during a period of world-wide economic depression.

Does anyone believe that Austria or Hungary should be asked to pay the installments due from them in view of the extraordinarily straitened circumstances in which the people of those two countries find themselves and great difficulty which they experience in obtaining foreign exchange for the purpose of carrying on even the minimum of effectual commerce with the rest of the world?

Does anyone believe that Germany should be asked by the United States Government to meet her payments on the costs of the army of occupation when such a demand by us must be inevitably followed by demands of other creditors to pay her reparations in full?

These instances should suffice to demonstrate that to stand on the letter of our bond and to refuse to investigate or to consider the facts, is to fail in our responsibility to the American people whom we represent and to the debtors whose capacity to pay we ourselves undertook to determine.

What intelligent business man or banker would blindly refuse to investigate or to consider the altered circumstances of a debtor whose unsecured obligation he held? The situation of our debtors has been immensely altered during the course of the last two years. New questions in relation to these debts are bound to arise in the course of the next few months. The Congress should be in a position through a commission created by it and composed in part of its own Members to ascertain what the facts actually are and to deal with these new problems as they arise.

It is with such thoughts as these in mind that the President recommended the re-creation of the World War Foreign Debt Commission. I am confident that upon mature consideration this recommendation will commend itself to the Congress.

The administration bill was introduced by Mr. Collier, chairman of the Ways and Means Committee, by request of the Treasury. This is the formal way of presenting the views of the Executive without in any manner binding the gentleman who would introduce it. It was the bill upon which the hearings were held. It is House Joint Resolution No. 123. We print it in full as follows:

(H. J. Res. 123, Seventy-second Congress, first session] JOINT RESOLUTION To authorize the postponement of amounts payable to the United States from foreign governments during the fiscal year 1932, and their repayment over a ten-year period beginning July 1, 1933

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That in the case of each of the following countries: Austria, Belgium, Czechoslovakia, Estonia, Finland, France, Germany, Great Britain, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Rumania, and Yugoslavia, the Secretary of the Treasury, with the approval of the President, is authorized to make, on behalf of the United States, an agreement with the government of such country to postpone the payment of any amount payable during the fiscal year beginning July 1, 1931, by such country to the United States in respect of its bonded indebtedness to the United States, except that in the case of Germany the agreement shall relate only to amounts payable by Germany to the United States during such fiscal year in respect of the costs of the Army of Occupation.

Sec. 2. Each such agreement on behalf of the United States shall provide for the payment of the postponed amounts, with interest at the rate of 4 per centum per annum beginning July 1, 1933, in ten equal annuities, the first to be paid during the fiscal year beginning July 1, 1933, and one during each of the nine fiscal years following, each annuity to be payable in one or more installments.

SEC. 3. No such agreement shall be made with the government of any country unless it appears to the satisfaction of the President that such government has made, or has given satisfactory assurances of willingness and readiness to make, with the government of each of the other countries indebted to such country in respect of war, relief, or reparation debts, an agreement in respect of such debt substantially similar to the agreement authorized by this joint resolution to be made with the government of such creditor country on behalf of the United States.

Sec. 4. Each agreement authorized by this joint resolution shall be made so that payments of annuities under such agreement shall, unless otherwise provided in the agreement (1) be in accordance with the provisions contained in the agreement made with the government of such country under which the payment to be postponed is payable, and (2) be subject to the same terms and conditions as payments under such original agreement.

It will be noted that what appears as section 5 in the resolution under discussion (probably) was not included in the administration measure.

This section reads as follows:

Sec. 5. It is hereby expressly declared to be against the policy of Congress that any of the indebtedness of foreign countries to the United States should be in any manner canceled or reduced and nothing in this joint resolution shall be construed as indicating a contrary policy, or as implying favorable consideration at any time to a change in the policy hereby declared.

It may be that, with the knowledge of the sentiment in Congress and throughout the country against favoring foreign nations over our own country, the administration at this late date decides that moratoriums, debt reductions, and debt cancellations, at the expense of the American taxpayer are not particularly popular. In any event, Congress is given the opportunity to give expression to its policy in this regard. We heartily concur in this amendment to the administration bill.

THE TIME ELEMENT It was stated to us that the President reached his conclusion to initiate the moratorium on the 17th or 18th of June, 1931. His statement relative thereto was given publication on June 20, 1931. The wires to the Members receiving them were dated June 23, 1931. As we have noted, more than five and one-half months elapsed before Congress convened. No special session was called to consider this measure. Congress assembled Monday, December 7, 1931, and the Democratic members of the Ways and Means Committee were duly elected on that date. The administration measure was forwarded to Chairman Collier and immediately introduced by him on Monday, December 14. The hearings begun on the 15th were had in the mornings and afternoons of the 15th, 16th, and 17th. The bill was reported out, introduced in the House a few minutes before its adjournment on this date, December 17. It will be printed to-night and will be made available with the reports thereon to the Members to-morrow.

The hearings, while not so extensive in the testimony of the witnesses appearing before the committee, are not available at this time to the members of the committee nor to the Members of the House. There were considerable references made to documentary evidence which was agreed to be filed as a part of the evidence in support of this measure. These were not made available to the committee, and we are completely at a loss to know their contents.

We are in hearty accord with the dispatch of business. We have no criticism whatever of the manner in which the distinguished chairman of this committee has conducted the hearings, but we do submit that the membership of the committee should have had time to read the evidence and the documents called for by the evidence before preparing the reports, and the membership of the House should have had the opportunity to read the record and to digest it before being called on to vote on this momentous question.

CHANGE IN TERMS OF PROPOSAL

The final agreement reached on July 6, 1931, differed materially from that announced by President Hoover on June 20, 1931.

The initial proposal of the President, concerning which he sought the position of Members of Congress subsequent to the time when he had reached his conclusion, provided “postponement for one year of all intergovernmental debts."

It is patent that the postponement sought in this legislation is not for one year. It is true that the legislation treats of the payment of the debts for a one year period, but this deferred payment is strung out over a period of 10 years. It was admitted by the spokesman for the administration, Mr. Mills, that the President did not have in mind on June 20, 1931, the payment over a 10-year period of the indebtedness due for this fiscal year.

Further, as evidenced by the above quotation, the postponement was to be “of all intergovernmental debts.” In the agreement finally reached, France refused to accede to that proposal. All unconditional reparations due France from Germany are to be paid. There can be no doubt but that such condition is a deviation from the President's proposal. France is given a decided advantage in this respect.

In conclusion we desire to call the attention of the Members of the House to the fact that our revenues amount to only about one-half the amount of the expenditures of the Government; that we have a large deficit and it is growing by leaps and bounds and to withhold

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the collection of this $252,000,000 means that it must be raised in
taxation from the people of the United States, amounting to more
than $2 for every man, woman, and child in the United States. We
commend the equitable maxim known to every lawyer—we should
be just to the American people before we are generous to the peoples
of Europe.
Respectfully submitted.

MORGAN G. SANDERS.
E. E. ESLICK.

FRED M. VINSON.
O

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