hasn't given it as much study as these gentlemen, and he has asked me if it would be all right to have these gentlemen represent the Department of State.

Mr. FISH. Let me say, Mr. Chairman, I can only speak for myself, but I assume this is one of the major bills affecting the State Department that will come before this Congress. I am sure some members of the committee would like to know the views of the State Department through the Secretary of State or the Under Secretary of State. If the Secretary of State does not come before this committe on this bill, then there is no reason for him to ever appear. I should like to hear from the Secretary of State and the Under Secretary.

The CHAIRMAN. We have no Under Secretary.

Mr. FISH. I mean the acting Under Secretary.

The CHAIRMAN. I am sure they will both be glad to come if they can add anything, but I am starting the hearings this morning because the Secretary requested it and he told me Mr. Hackworth was before the committee and I

Mr. TINKHAM (interposing). I think the Secretary of State should certainly come before this committee.

The CHAIRMAN. I shall tell the Secretary of State just what you

say.

Mr. TINKHAM. I think it would be very remiss if you should not. The CHAIRMAN. Mr. Fish, you were not in here when we started our discussion. We had gotten down to section 4, discussing the resolution section by section.

Mr. FISH. I read the bill two or three times and I know its provisions very well.

The CHAIRMAN. I was about to tell you what we were discussing. Section 4, you remember, applies to give the President the right to cut down normal trade under certain conditions. The question I had just asked about was the provision in Senator Pittman's bill which makes it mandatory to surrender title and so forth so soon as war is declared under section 1 and I made the suggestion I thought that would not be necessary to put in that way because there would be many wars in which there would be no chance to become involved, that the President should issue a proclamation if the neutrality was affected and so forth, that then he could prevent any shipments. I would like to ask what you think about that, Mr. Hackworth.

Mr. HACKWORTH. Well, Mr. Chairman

The CHAIRMAN (interposing). Pursuant to the suggestion I made a few moments ago.

Mr. HACKWORTH. Of course, the Department does not oppose the provisions in Senator Pittman's bill. Yet if the President were given discretion to name the articles to which title should be passed before shipment, I think you could accomplish, in large measure, the same purpose that Senator Pittman has in mind, because the President could name certain articles, or all articles. It is my understanding that the Secretary of State would like to have as broad discretion as possible so as not to interfere with American trade any more than necessary in a given situation and I assume, if the bill were passed so as to give the President discretion as to the articles on which title should be passed

The CHAIRMAN (interposing). And when.

Mr. HACKWORTH. Yes; I assume that would be very satisfactory. Mr. EATON. Mr. Chairman, may I ask a question?

The CHAIRMAN. Mr. Eaton.

Mr. EATON. We are engaged now on the greatest piece of legislation which will affect this country. In the past we had a fabric of international law built up on one side and we thought it recognized the sovereigncy of the various countries of the world in their relation to each other in accordance with the law. Now, is this legislation a substitute for international law and does it affect our sovereigncy, our ability to hold our own in the world? In other words, are we announcing now that we are withdrawing from international law and taking refuge behind this legislation?

Mr. JOHNSON of Texas. We have inalienable rights.

Mr. EATON. We have inalienable rights because we object to war and when we announce an embargo, aren't we breaking relations with these countries that are at war?

Mr. HACKWORTH. Of course, under international law a nation is not obliged to put an embargo on anything. That is, it is not obliged to put an embargo on anything in order to be neutral. International law recognizes that trading in arms, contraband of war, by the government itself is illegal, but the government is not required to prohibit its nationals from trading in these commodities. The nationals trade at their own risk. In other words, if contraband is being shipped to a belligerent the opposing belligerent has a right to seize it and the shipper has no right to complain. It is a prize of war. Now, if you say that you are not going to permit our nationals to ship these commodities you are doing something not required by international law. It is not required in order to be neutral. Your measure, as I understand it, is intended to keep us out of war. You say, in effect, we have a right to do this thing but we are not going to do it. You don't give up any right under international law. You just assert a policy which you are not obliged to assert under international law.

Mr. ALLEN of Illinois (interposing). What do other nations have? If we became involved in a war, what is the attitude of, we might say, Germany, in regard to an embargo in reference to the United States? Mr. HACKWORTH. I don't think I could state what their laws provide in that respect.

The CHAIRMAN. Of course, you know Germany would do as she pleased.

Mr. HACKWORTH. Yes.

Mr. ALLEN of Illinois. But do they have any neutrality laws or embargoes?

Mr. HACKWORTH. In times past some of the countries have passed laws placing embargoes on certain commodities. This was done by a number of countries during the World War.

Mr. ALLEN of Illinois. We could conduct a war with very little help from them.

Mr. TINKHAM. Mr. Hackworth, I think, if you will study the English laws you will find that they only provide restriction in particular cases.

Mr. SHANLEY. Isn't that because they don't need it? They have complete control of the seven seas?

Mr. TINKHAM. They put an embargo

The CHAIRMAN (interposing). Is this true, Mr. Tinkham, they have complete discretion to do what they desire?

Mr. TINKHAM. Absolutely; and only pass laws for a specific situation.

Mr. SHANLEY. I think I read in Foreign Affairs that there is enlightened opinion in other nations about the wars we are trying to avoid

Mr. HACKWORTH (interposing). We are going further in that direction than any other country. I think it is a mistake to label some of this legislation neutrality legislation. It is not neutrality legislation.

Mr. EATON. National-defense legislation?

Mr. HACKWORTH. It might properly

Mr. SHANLEY (interposing). Isn't it so that we were drawn into the war and they never had the problems we had?

Mr. HACKWORTH. We went in 2 years later.

Mr. SHANLEY. All these problems of neutrality came after 1914. Mr. JOHNSON of Texas. Isn't this true also with reference to these foreign countries that the ruling heads of them have the same power of discretion now that we are seeking to invest in our President? Mr. HACKWORTH. It is quite true that they do have it in many countries.

Mr. JOHNSON. They already possess that authority?

Mr. RICHARDS. Mr. Chairman, I would like to ask the representative of the State Department-I raised this question last year and didn't get very far with it-I am confirmed in the belief that we have got to allow a certain amount of discretion to take care of unforseen contingencies and events that may come up, but I think we should protect the President from embarrassment as much as possible. I would like to know the ideas of the State Department about this provision down here we had some discussion about it last year-about the President being allowed to determine the normal amount of exports, and to decide upon a term of years upon which to base the determination of normal amount, and in discussinng that matter I find that the President can do something that can easily be construed by a foreign power as an unneutral act. For instance, a 10-year period might be in favor of Germany and a 5-year period might be in favor of France. If we have the period in there and allow the President to name the number of years, you are immediately going to subject him to a lot of pressure from different foreign powers as to the period of years and the amount of shipment, and does the State Department take the position that that is a wise thing to put in there?

Mr. HACKWORTH. The State Department is not now seeking the quota authority that you are speaking about; I think the chairman. explained awhile ago that the present idea is to abandon the quota theory and to allow the President to list articles to which title should pass before shipment is made.

Mr. JOHNSON. I understand that, and I think that opens up another field, but suppose if this were left in there

The CHAIRMAN (interposing). You can say 5 years, if you desire. Mr. JOHNSON. I think we had a term of years before, did we not? Mr. RICHARDS. No.

The CHAIRMAN. The original bill was 3 years.

Mr. RICHARDS. And I remember I offered an amendment last year making it 10 years, but it didn't get but two or three votes.

The CHAIRMAN. If you go back to that I will be willing, so far as I am concerned, if the provision is put in for the number of years. Mr. RICHARDS. It should be put in there beforehand, before any contingency arises.

Mr. JOHNSON. Mr. Chairman, on that question I would like to ask Mr. Green, as he will have the administration of this law, with reference to determining as to exports and the quota, and so forth-I would like to ask him a question along this line.

The CHAIRMAN. Very well.

STATEMENT OF JOSEPH C. GREEN, CHIEF, OFFICE OF ARMS AND MUNITIONS CONTROL, DEPARTMENT OF STATE, EXECUTIVE SECRETARY OF THE NATIONAL MUNITIONS CONTROL BOARD

Mr. JOHNSON. Mr. Green, you have read and are familiar with section 4 that we have been discussing, and also you heard the suggestion made by the chairman that upon second thought he thought possibly it would be wise to eliminate that provision of section 4 which relates to "normal shipment" and leave the power to the President to designate the articles that may be prohibited.

In your judgment which would be easiest administered, the provision with reference to normal shipments or not have that specified? Mr. GREEN. As I understand the suggestion which the chairman made orally a few moments ago as an amendment to the provision as it now stands in the bill, the change would be this:

As the provision now stands in the bill the articles would be put on a quota basis, a basis of normal trade to belligerents; whereas the suggestion which the chairman made orally does away with that quota system, does away with embargo, and substitutes for it two possible steps, in the discretion of the President.

First, a step which amounts to the cash part of what we may call "cash and carry", the turning over of title to the foreigner before the shipment is made.

Then the second step-the carrier part-the prohibition of carrying by American ships.

The latter suggestion would, of course, be infinitely easier to administer than the former. With the machinery already in existence our Bureau of Customs could very readily and with very few added duties, receive the affidavits of the shippers that title had passed, and refuse clearance to American ships after the necessary proclamations had gone into effect. That would be all that would be necessary, and the Bureau of Customs could easily administer such a system; whereas, with such a provision as now in the bill

Mr. JOHNSON (interposing). You mean about commodities? Mr. GREEN. Commodity quotas, quotas on each belligerent. Mr. JOHNSON. What additional personnel for administration, if any, would you require?

Mr. GREEN. My judgment is that that would require an enormous executive office to administer those quotas. For instance, just take one commodity, a simple one like oil. There are, I believe, something in the neighborhood of 27 exporters. You might have 20

belligerents. That would be a relatively simple problem, although you can see what difficulties there would be in that case to make quotas for the 20 belligerents and then divide them up among the 27 exporters so that no American citizen could claim that he was being treated unjustly, and no belligerent could claim that he was being treated unjustly. It would require a large office force and enormous research and complicated administration, the extent of which I cannot foresee.

Mr. EATON. If it would keep us neutrals shipping a normal quantity of commodities to the belligerents, why would it make us unneutral if we increased the quantity and increased their profits? That is the fallacy, it seems to me, of this whole quota business.

Mr. GREEN. I was not even entering into that point, which is much more profound than the one which I was discussing in answer to Mr. Johnson's question. It is merely a problem of administration if this were enacted, but

Mr. JOHNSON (interposing). Comparing the two with reference to the administration. That is the only question.

Mr. GREEN. Consider, for example, a somewhat more complicated case than the oil case. You may remember a bill which was passed last year to regulate the exportation of tin plate scrap. The President delegated the authority to administer the restrictions on the exportation of tin plate scrap to the Secretary of State, and we have found that it is extremely difficult to administer them because of the large number of producers of tin plate scrap-running up into the hundreds-and the large number of exporters. If you examine a more complicated case, like scrap iron, where there are thousands of exporters, thousands of producers, and thousands of exporters, the problem really is so great that I cannot imagine any way of administering it with justice to all the American interests concerned. Mr. BLOOM. Do you mean scrap or junk?

Mr. GREEN. I mean scrap.

Mr. BLOOM. Are there so many dealers in scrap?

Mr. GREEN. There are a tremendous number.

Mr. BLOOM. I thought that in the hearings before this committee they showed there was just a few of them.

Mr. GREEN. Tin-plate scrap or scrap iron?

Mr. BLOOM. Tin-plate scrap. But there were a few of them that said it was controlled by an organization.

Mr. GREEN. I was speaking at the moment of scrap iron, not of tin-plate scrap. I mentioned tin-plate scrap as my second illustration.

Mr. BLOOM. Let me give you an illustration. You said "cash-andcarry." Suppose the goods are sold on credit; would you call that cash-and-carry?

Mr. GREEN. As I understood the verbal suggestion of the chairman it was this: That before the goods could be shipped, title and possession must have passed to the foreigner.

Mr. BLOOM. It doesn't say anything about cash.

Mr. GREEN. No; but I assumed that the American citizen would not be satisfied to give up possession except as the result of a sale. Mr. BLOOM. If I remember, Dr. Eaton asked about that too. If you are talking about cash, cash-and-carry, and then it is sold on credit, would that apply?