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From a superficial research in the Department of Commerce I understand that the equities of British nationals in railroads, public utilities, and national resource ventures in the various countries of the Western Hemisphere, particularly in South and Central America, sum up to many billions of dollars. And, if I am properly informed, Great Britain has been mobilizing the foreign holdings of its nationals for some time past. It is my belief that if the German Government intends to do any grabbing it would grab these equities even before they undertook to get possession of the British Fleet. By this means the German Government would have obtained a foothold in the economic life of many of our neighbors without fighting a war on this side of the Atlantic. This, I think you will agree, represents a real danger to our people, to our peace and security.

To obviate any such possibility and using the Alien Property Custodian as a precedent, I suggest in my proposed amendment the setting up of a custodian or bailee to take over all title of these assets in safekeeping during the period of the war or as long thereafter as the uncertainty of the peace terms might dictate. In this way we will have a control against the unpredictable hazards of war and protect the future of our neighbors as well as the best interests of labor and industry in the United States.

There is no purpose in my mind that these assets shall serve as collateral to our oans or advances. I propose only that we hold them as a custodian, so to speak. It is reported that the State Department and the Treasury Department have been taking steps preparatory to freezing assets of foreign nations, such as bank leposits, credits, etc., existing in the United States, in order that these holdings nay not be improperly used. In some cases these steps have already been taken. But I cannot too strongly emphasize the fact that such procedure is not possible where similar assets are outside of our national jurisdiction even though in this hemisphere.

In a statement before your committee the Secretary of the Treasury presented lata regarding the British investments in Latin America. But I do not think his tatement brought out the real importance of these investments. In order to show how important they are, both from an economic and military standpoint, I have prepared a memorandum from the official records of the Department of Commerce. I would be pleased if your committee would permit me to insert this memorandum as part of my statement.

In preparing the memorandum I have emphasized the holdings in railways, because no one can possibly dispute the fact that the railways are of major importance economically and for military operations. I hope you will examine the data presented in this memorandum with great care, keeping always in mind what the situation will be should these holdings of British nationals become the holdings of the German Government.

Against such a danger we must protect our people and our neighbors. If the Monroe Doctrine is to mean anything at all, we must make certain that the Axis Powers do not, whatever the future may bring, obtain an economic foothold in this hemisphere. I think this possibility, constituting a real danger, can be dealt with by the proper amendment to this bill.

I have suggested a specific amendment for the purpose in my letter of the 13th to the chairman. I earnestly solicit your favorable consideration of it.

Of the total estimate of £1,002,000,000 given there, £451,000,000 were indicated as in railways. Since railways alone constitute almost half of total British holdings in Latin America, as estimated by the Secretary, the control of those railways in the event of unfavorable developments in the world situation appears to be a matter of importance.

In Argentina the Secretary's estimate for British investments in railways is £263,000,000 nominal value and £52,000,000 approximate market value. Argentina has always been a good market for British goods and one of the reasons is that the British investment in railways is so heavy. According to a statement issued by the Department of Commerce (Industrial Reference Service No. 8, December 1940, "Railways Equipment Markets in Argentina"), this control amounts to some 65 percent of the total railway mileage of the country.

It might be noted that the estimate for British investments in railways is slightly over 60 percent of the estimate for total British investments in Argentina. For Bolivia, the Secretary's statement does not show the estimate for railway investments separately. According to the Stock Exchange Official Yearbook, London, 1939 (p. 456), the Antofagasta and Bolivia Railway Co., Ltd., "directly controls the Bolivia Railway Co." According to the same source, the former railway operates the latter on a 99-year lease from December 31, 1908. Somewhere around half of the total mileage of the country is operated by the Bolivia Railway Co.

In Brazil the Secretary's estimate for British investments in railways is £38,000,000 nominal and £5,000,000 market value. About one-fourth of the total mileage of the country is controlled by British capital. This includes the strategic line of the Sao Paulo Railway from Sao Paulo to Santos, which carries much of Brazil's coffee to be exported.

The Secretary's estimate for railway holdings is 20.4 percent of total British investments in Brazil.

In Chile the Secretary's estimate is £20,000,000 nominal and £5,000,000 market value. The chief British investment is in the Antofagasta and Bolivia Railway Co., which, as indicated above, controls the Bolivia Railway Co. The Antofagasta and Bolivia Railway Co. itself is the most important privately owned i line in Chile.

The British railway investments are estimated by the Secretary at 19.0 percent of the total.

In Colombia, it is not believed that British investments in railways are of any great importance. Possibly 5 percent of the total would be approximately correct. The Secretary did not show separate figures for railway investments in Colombia, In Costa Rica, the only British line of importance is the Costa Rica Railway Co., which has 188 miles under concession expiring January 1, 1990, when the property reverts to the Costa Rican Government without further payment. The Northern Railway Co. (American controlled) has leased it for the remainder) of the concession less the last 2 months. This information appears in the Stock) Exchange Official Yearbook, 1939, page 484.

The Secretary estimates British investments in Cuba at £25,000,000 nominal and £1,000,000 market value. The two big railway combinations in Cuba are the United Railways of Habana, which is British controlled, with 1,340 miles owned, and the Consolidated Railroads of Cuba, which is American controlled with 1,084 miles. Except for the trackage on innumerable sugar properties, theser two combinations include the bulk of the railway mileage of the country. Data regarding the two are found in Moody's Railroads, 1939, pages 880-83, and page 1260, respectively.

It may be noted that railway investments comprise 90 percent of the total British investments in Cuba estimated by the Secretary.

In the Dominican Republic, there are no British railway interests of importance known.

In Ecuador, the only British interest is in 60 kilometers of line owned in com bination with the Government. Since the total kilometers of railroads in the country are over 1,300, British interest is not significant.

In Guatemala no British railway interest of importance is known.

In Haiti no British railway interest is known.

In Honduras no British railway interest is known.

The Secretary estimates British railway investments in Mexico at £90,000,000| nominal and £1,000,000 market value. The British still control the Mexican Railways Co.; 431 miles long, the strategic line from Mexico City to Vera Cruz (See Stock Exchange Official Yearbook, 1939, p. 506.) Undoubtedly the British have large holdings in securities of railways now government-controlled

It may be noted that the railways investment figure in Mexico is 52 percent of the total British investments.

In Nicaragua and Panama no British railway investments are known. In Paraguay the only railway in the country, the Paraguay Central Railway, is British-owned.

In Peru the Peruvian Corporation has a perpetual concession for 1,053 miles of line it operates. (See Stock Exchange Official Yearbook, 1939, p. 2362.) This is about 40 percent of the total mileage of the country. The Peruvian Corporation is British controlled.

In El Salvador, the Salvador Railway Co., according to the Stock Exchange Official Yearbook, 1939, page 526, has a 100-mile concession running to 1974. The Salvador Railway Co. is British controlled. During the life of the concession no competitive line can be built between the terminal points.

The Salvador Railway Co.'s lines are estimated at between one-fourth and one-fifth of the total mileage of the country.

In Uruguay, the Secretary's estimate for British railway investments is £14,000,000 nominal and £1,000,000 market value. The British control around 80 percent of the main-line mileage and slightly less of the total mileage.

It will be noted that the estimate of £14,000,000 for railway investments is about one-third of the estimate for total British investments in the country. In Venezuela, the Secretary's statement gives an estimate of £3,000,000 nominal and £200,000 market value for British railway investments. According

to figures appearing in a release of the Department of Commerce (Industrial Reference Service No. 12, December 1940, "Railway Equipment Markets in Venezuela"), British-controlled railways amount to about 36 percent of the total mileage of railways, tramways, and subsidiary land-transportation lines. Of the steam railways alone, the figures indicate British control of a little over 39 percent of the total.

Railway investments, in the Secretary's statement, are 10 percent of the total British investments in the country. JANUARY 13, 1941.

Hon. SOL BLOOM,

Chairman, Committee on Foreign Affairs,

House of Representatives, Washington, D. C.

MY DEAR COLLEAGUE: Reference is made to H. R. 1776, a bill to promote the lefense of the United States and popularly known as the lease-loan bill, pending with your committee.

The bill is admittedly general in terms and delegates broad discretionary powers to the President of the United States. If the United States were preparing o enter as a belligerent into the wars abroad, the bill as introduced would necesarily be the type of measure to be enacted into law. If, on the other hand, it is he policy of the United States to remain a nonbelligerent, as the President has Assured us, then I believe the bill should be amended in certain particulars in rder to protect the American people from the great hazards of the program roposed by the bill.

Please permit me to suggest two amendments and respectfully to solicit favorble consideration of them by your committee. In the first place, the bill makes 10 provision whatever for any accountability of any of the transactions entered nto by the President under the provisions of the bill. I believe the American eople are entitled to know, through their Representatives in Congress, what ction the President takes by virtue of the authority given him. I therefore espectfully submit that after section 8 another section should be inserted to read is follows:

"SEC. 9. The Comptroller General shall keep the accounts and records of all purchases, sales, exchanges, loans, or grants carried out under the provisions of his Act and shall make reports to the Congress when so directed by resolution of either House. The cost of such accounting and record keeping shall be charged to the respective purchases, sales, exchanges, loans, or grants made under the provisions of this Act."

I am suggesting that the Comptroller General keep the accounts and records because his office is independent of the Executive and directly responsible to Congress. Recognizing that certain transactions must be of a confidential nature in the interest of our own defense, I am suggesting in my amendment that the reports be made to Congress, only when either House of the Congress in its wisdom so directs.

In the second place, the bill makes no provision whatever to protect the economic welfare of our people against the unpredictable aftermath of the wars. It fails to take into account what the situation may be at the end of the wars abroad. We cannot know who will be the victors much less know what may be the terms of peace. Against all contingencies it behooves us to make as ample provision as is humanly possible.

For instance, Paul D. Dickens and Milton Abelson, of the Finance Division of the Bureau of Foreign and Domestic Commerce, estimated the investment holdings of the United Kingdom in the United States in 1940 to be $2,561,000,000 and those of Canada to be $1,393,000,000. According to the figures of Sir Robert Kindersley, director of the Bank of England, as published in the Economic Journal of December 19, 1937, in an article entitled "British Overseas Investments, 1935 and 1936," the total British investments in Latin America are $3,730,000,000 and in South America are $3,335,000,000.

Should Great Britain be defeated these enormous investments might fall into the hands of an unfriendly foreign government or might be liquidated at an unfair value under the duress of the peace terms. If such should come to pass, not only will American labor and industry be directly affected but our good neighbors in the Western Hemisphere whose interests in maintaining democratic standards, in government and life, are the same as our own, would be seriously embarrassed. For the benefit of Great Britain, as well as for the safety of democracy in the Western Hemisphere, I therefore suggest that an amendment be made to the pending bill whereby the President will make arrangements for the transfer of these investment holdings to the United States for custody. The role of the

United States will be somewhat analogous to that of bailee, and I have in mind an office comparable to that of Alien Property Custodian as was established in the last war.

I therefore respectfully submit the following amendment for the consideration of your committee. At the end of subsection 3 (b) insert the following subsection: "SECTION 3. (c) To protect the economic welfare of the United States and to provide for the common defense of the Western Hemisphere, the President is authorized to have transferred to the custody of the United States, for the duration of the wars abroad and such time thereafter as he may deem necessary, the stocks, bonds, shares, land titles, contracts, or agreements representing any rights or interests in or ownership of any national or private enterprise located within what is geographically known as the Western Hemisphere, which are owned or controlled by or subject to the disposition of any such foreign government or any of its nationals."

I would be pleased if your committee will give its earnest consideration to the foregoing. I am most hopeful that your committee will see fit to adopt the amendments to the bill substantially along the lines I have suggested, and I would be glad to have you make this letter a part of the record of the hearings on the bill. With kindest personal regards, I am

Sincerely yours,

CHARLES S. DEWEY,

Member of Congress, Ninth District, Illinois.

STATEMENT OF WILLIAM R. CASTLE-Resumed

Mrs. ROGERS. Great Britain has a great amount of assets in the United States. Do you not believe that those assets could be converted into dollars in payment for those materials? You have answered that, I think?

Mr. CASTLE. I have answered that, I think.

Mrs. ROGERS. In the Western Hemisphere I think Great Britain has $15,000,000,000 worth of assets. In regard to the question of the power of the President under this bill, to convoy ships in subsection 1 of section 2, the word "boat" is used. Do you interpret the word "boat" to mean any boat in the United States service? It is on the first page of H. R. 1776.

Mr. CASTLE. Yes; I do not really understand why they should have used the word "boat."

Mrs. ROGERS. You think it is a little misleading?

Mr. CASTLE. A little. The word "ship" might have been better. Mrs. ROGERS. In subsection 2 of section 3 there is the word "transport." What do you consider this word to mean? Would it not mean in conjunction with the word "boat" to "transport materials to any government notwithstanding the provisions of any other law"? Mr. CASTLE. Well, I took it when I read the bill to mean "give." Mrs. ROGERS. If this bill gives the President the power to ship materials abroad to any government, how could it possibly be done in time of war except by a convoy of every ship?

Mr. CASTLE. It probably could not be done successfully without

convoys.

Mrs. ROGERS. Do you consider the convoying of ships an act of war?

Mr. CASTLE. No; not in itself. But I know that it would lead to war because the minute some American ship was torpedoed that would be the end.

Mrs. ROGERS. Thank you very much.

The CHAIRMAN. Are there any more questions, Mrs. Rogers?
Mrs. ROGERS. No; that is all, thank you.

The CHAIRMAN. Mr. Castle, you asked the Chair a few moments go whether you appeared at the hearings of the last Neutrality Act. 1r. CASTLE. Yes.

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The CHAIRMAN. And the Chair stated that you appeared and that also, I believe, presented a statement. I sent for the hearings I find that you did appear and that you were cross-examined. therefore, I ask unanimous consent of the committee that Mr. hards might cross-examine the witness on that one point of his timony. Mr. Richards was going to proceed to question him on point when Mr. Castle said that he had not appeared and thereMr. Richards refrained from asking the questions.

Mr. CASTLE. That was in 1939?

The CHAIRMAN. 1939. Do you wish to see it?

Mr. CASTLE. NO; not at all.

The CHAIRMAN. There is one question which Mr. Richards would to ask.

Mr. CASTLE. Yes; go on.

Mr. RICHARDS. I would not want to do it unless I obtain the nimous consent of the committer.

The CHAIRMAN. Is there any objection, Mrs. Rogers?

Mrs. ROGERS. The witness apparently has no objection.

The CHAIRMAN. Of course, if the committee objects, that is differBut the committee is the one to say whether or not. The ness is supposed to try and answer any question asked by the amittee. I spoke to Mr. Fish and asked Mr. Fish if he had any ection and Mr. Fish said he did not. The Chair is in duty bound ask of the committee if there would be any objection for Mr. hards to ask the question that he was going to ask when Mr. Castle d that he did not appear.

Mr. VORYS. Reserving the right to object, could that courtesy be ended to other members of the committee when they wish to ke inquiries?

The CHAIRMAN. Under similar circumstances, always.

Mr. VORYS. We do not have that opportunity this morning.

The CHAIRMAN. If there is any objection, I would not have asked e committee for unanimous consent. I had already asked Mr. sh if there would be any objection and it is merely a question, cause Mr. Richards did not want to ask the question when the ness said he did not appear in 1939 at the hearings. So the air immediately sent for the hearings and I find that he did appear. anyone wants to see the hearings I will be very glad to show them to

If there is going to be objection, of course, Mr. Richards will ask the question. It is a matter of record. It does not make y difference one way or another.

Is there objection?

Proceed, Mr. Richards.

Ir. RICHARDS. Mr. Castle, I am making no effort on my part to icize you for not remembering, because I do not remember what rings I have been in myself.

Ir. CASTLE. The only thing was that I misplaced the year. I -ught I did it last year.

Mr. RICHARDS. That was the Seventy-fifth Congress and it was ril 11, and this is a record of what you said. I just want to ask 1 about two or three sentences here and ask you whether you ee, or whether you challenge the accuracy of this being what you d. This was on the neutrality legislation:

Now legislation must keep in mind two or three principles. It must be flexible, detailed. We cannot possibly tell what conditions will be like a year from

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