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Secretary HULL. I will come and send any person at any time. And I want you to know we are really nonpolitical over there. I can truthfully say today that I do not know the politics of five people in the State Department or the foreign service. We all work without any sort of partisanship or politics.

Mrs. ROGERS. As you know, I have felt you have not appeared before us sometimes when I have requested it a number of times, you know.

Mr. JOHNSON. I make a point of order.

Secretary HULL. I want to make that little side remark clear. Those in the foreign service outside of any political appointment, there may be a half a dozen ambassadors who are supposed to have politics, but otherwise I frankly do not know anything about their politics. But we all work as if politics had never been heard of their Mrs. ROGERS. I am very much interested to hear you say that, Mr. Secretary.

The CHAIRMAN. Mr. Secretary, the committee thanks you very much for appearing here today.

Mrs. ROGERS. May I finish?

The CHAIRMAN. Pardon me. I thought you were finished.

Mrs. ROGERS. I am very sorry, Mr. Secretary, you have had a long time on the stand.

Secretary HULL. We would not allow ourselves to be interrupted. Mrs. ROGERS. I do want very much to know if you are considering or have considered a negotiated peace at this time. It seems to me that you might well do so. If you have not I doubt if Germany and Italy want us to enter the war with such strength as we may acquire. Mr. JOHNSON. Mr. Chairman, I object to the question. The question has no relation to this bill. It is purely speculative and not germane to the discussion.

Mr. FISH. Mr. Chairman, I think it is a highly important question that we have to consider before we act on this bill and I think it is a very proper one. I think if the Secretary does not want to answer he can say so and we will abide by his decision.

Mr. JOHNSON. I object, Mr. Chairman. I do not care whether the Secretary wants to answer or not. But I object in the interest of orderly procedure.

Secretary HULL. I think the members of the committee will always agree that that kind of detail on that sort of question should be discussed in executive session,

The CHAIRMAN. The Chair sustains the point of order.

Mrs. ROGERS. Mr. Chairman, I would like to make a statement. The CHAIRMAN. The Chair cannot entertain any request to make a statement. The Chair has been refusing statements all morning. Unfortunately I would like to give the lady the last word. I know she is entitled to it, but I must object to a statement.

Mrs. ROGERS. Mr. Chairman, I would like to make a parliamentary question. I know we operate under the rules of the House in the committee.

The CHAIRMAN. What is it?

Mrs. ROGERS. The only way that I can appeal then from the decision of the Chair is by a vote.

The CHAIRMAN. That is right.

Mrs. ROGERS. And, of course, not being in the majority here it would be impossible to secure that. I know that the Secretary is very much interested in peace and that he has fought for peace and has talked about peace.

The CHAIRMAN. The Secretary has already answered that, I believe. Mrs. ROGERS. If you would rule against me I know it is useless to appeal from the decision of the Chair.

The CHAIRMAN. Would you still like the last word?

Mrs. ROGERS. I would like to have the witness have the last word. The CHAIRMAN. What is it?

Secretary HULL. I observe the same rules prevail here now as when I was a member of the Ways and Means Committee. The opposite people had charge of the committee and they allowed me 2 minutes to cross-examine the witness. On one occasion, I thought my 2 minutes had not fully expired and appealed from the decision of the Chair and he declined to entertain the appeal.

The CHAIRMAN. Again, Mr. Secretary, we thank you very much and are glad to have had you here and hope to have you here again

soon.

Secretary HULL. It has been a real relaxation to come over here and see so many old friends.

HON. HENRY MORGENTHAU, JR., SECRETARY OF THE TREASURY

The CHAIRMAN. The Secretary of the Treasury will kindly take the chair.

Ladies and gentlemen, I have the honor to present to you the Secretary of the Treasury, Mr. Morgenthau.

Mr. MORGENTHAU. Mr. Chairman and members of the committee, I think that what you would like to have from me most is information as to the financial situation of the British Treasury. I have come here prepared to give you all the information which the British Treasury has furnished to me, and I give it to you with their consent. I will attempt to do it in a way which I hope will be understandable. If it' is not, I hope you will bear with me and ask whatever questions you want to ask me. Any information which we have in the Treasury in regard to this subject is at the disposal of the committee.

The CHAIRMAN. Do you wish to be seated, Mr. Secretary?

Mr. MORGENTHAU. Thank you. The first statement is a table of expenditures and receipts, and if the clerk would care to give you copies, I have copies of this statement which I will be glad to distribute to the members of the committee.

The CHAIRMAN. Will you kindly distribute the statement?

Mr. MORGENTHAU. I have here an estimate of the dollar expenditures and the dollar receipts of the British Empire, excluding Canada, from January 1, 1941, to January 1, 1942, in millions of dollars. Now the first point is their estimate as to dollar expenditures. And, so far as I know, this is the first time in history that one government has put at the disposal of another figures of this nature.

Estimated dollar expenditures and receipts of British Empire, excluding Canada, from Jan. 1, 1941, to Jan. 1, 1942

Dollar expenditures:

[In millions of United States dollars]

A. United Kingdom payments to be made on total purchases
from the United States:

1. Sums to be paid during 1941 on orders placed
before Jan. 1, 1941.

(In addition, $119 million will fall due
after Jan. 1, 1942.)

2. Imports from United States not purchased
through the British Purchasing Commission-
largely on private accounts___

B. Purchases by Empire countries (excluding United King-
dom and Canada) from United States during 1941:
1. Commodity imports.--

2. Payments for shipping, tourist expenditure,
interest payments, etc.-

C. Purchases by Empire countries, excluding Canada, from
areas outside the United States requiring gold or
dollars:

1. Purchases by Empire countries (chiefly United
Kingdom) from areas outside the United
States and Canada requiring dollars.

2. Payments by Empire countries (chiefly United
Kingdom to Canada and Newfoundland) _ _ _

Total dollar requirements for all trans-
actions..

$1, 274

280

$1, 554

333

5

338

247

880

1, 127

3, 019

Dollar receipts:

A. Dollar receipts by United Kingdom from United States:
1. United Kingdom exports of merchandise to
United States...

2. Net balance from United States to United King-
dom on shipping, tourist expenditures, interest
payments, etc. -

B. Dollar receipts by Empire countries (excluding Canada):
1. Commodity exports..

2. Australian gold exports to United States..
3. South African exports of gold__---

C. Canadian assistance to United Kingdom.....

$165

15

180

560

75

480

1, 115

260

Total dollar receipts by Empire countries, excluding
Canada..

1, 555

Total dollar deficit with countries other than Canada
during 1941.

$844

Total dollar deficit with Canada during 1941_--_.

620

Total dollar deficit of British Empire, excluding Canada,
during 1941.

1, 464

Total receipts and deficit on operations with all countries
other than Canada during 1941.............

3, 019

Now, the question naturally comes up next: How does the British Empire propose to raise the necessary dollars to meet the dollar expenditures during the balance of the year? And I have another sheet here which if your clerk will distribute I will read from.

The CHAIRMAN. Will you proceed, Mr. Secretary?

Mr. MORGENTHAU. The statement is as follows:

United Kingdom's available dollar exchange assets on Jan. 1, 1941

Gold in United States or en route..

Official dollar balances - -

[In millions]

American securities-reported by British as of Jan. 6...

Total liquid assets..

Direct and other investments (about).

Total dollar exchange assets__

$205

54

616

875

900

1, 775

The British Government has $33,000,000 of gold scattered in various parts of the world. Most of this gold, however, is in areas from which it cannot be shipped quickly or safely to the United States.

British banks, private persons, and corporations have balances in the United States of $305,000,000. The British Government feels that these balances are at the minimum level necessary for the continued conduct of business and are therefore not available for use by the British Government.

Mr. MORGENTHAU. Well, that, gentlemen, is the available information that I have as to their dollar assets. I would be very glad to answer any questions.

The CHAIRMAN. Mr. Johnson?

Mr. JOHNSON. The second sheet, Mr. Secretary, where it mentions the British Government feels that these balances are at the minimum level necessary for the continued conduct of business and are therefore not available for use by the British Government, does that relate to the amount in the paragraph of $305,000,000 where it says that British banks, private persons and corporations have balances in the United States of $305,000,000?

Mr. MORGENTHAU. Yes.

The CHAIRMAN. Mr. Richards?

Mr. SHANLEY?

Mr. SHANLEY. Mr. Secretary, do you have any information at all of the available assets to the British which they have in South America or other areas that are within our sphere of influence?

Mr. MORGENTHAU. Yes. I have a list here of various investments which they have in other parts of the world but I want to point out those are in sterling and not in dollars. I have copies, Mr. Chairman, which I would be glad to distribute, of what I am going to read.

The CHAIRMAN. Will the clerk kindly distribute the extra copies? Will you proceed, Mr. Secretary?

Mr. MORGENTHAU. The statement is as follows:

ESTIMATED LONG-TERM FOREIGN INVESTMENTS OF THE UNITED KINGDOM OUTSIDE THE UNITED STATES

The following estimates are based on a number of studies, most of which were made by British economists before the outbreak of war.

Most of the investments are in sterling securities; a large part of the Canadian investment is in Canadian dollars, and some of the other investments are in the respective domestic currencies. However, for convenience of presentation, the estimated nominal value of the investments has been converted into sterling.

The market values, where given, are calculated from current market quotations of the securities. Since market quotations are not available for a large part of the investment, no total market value can be calculated.

Even where estimates of market value have been made, they have only a limited significance, for the future market or collateral value will depend on the rapidity with which the securities are liquidated, on the general course of the war, and on

many other unpredictable factors. Of course, the figures of nominal value are of even more limited significance.

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Mr. SHANLEY. How much of that would you say could be convertible over a 2-year period.

Mr. MORGENTHAU. On my part it would be just a guess and I would rather not guess. It would just be a guess.

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105

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