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Mr. CASTLE. I was talking here this morning with someone about that, and I said that I really would not be willing to answer that question from the technical point of view. I do not feel that I know enough to answer. I do feel it is contrary to the spirit of the Constitution.

Mrs. Rogers. Does not this bill violate, then, the principles of government under our Constitution and the principles of the republican system?

Mr. Castle. I think it does, because it makes a dictator without any limit of time.

Mrs. Rogers. If this bill is passed, in what position would it place the President of the United States insofar as world affairs are concerned?

Mr. CASTLE. Well, of course, if it passes as it stands I think it would put him in a very, very difficult position, because as it stands Great Britain, for example, would not come over here and buy ammunition. It would theoretically be bought by the President and turned over to Great Britain as he saw fit.

Mrs. ROGERS. Which would make him a commercial agent, would it not?

Mr. Castle. Yes; if you want to put it that way. But he would be hardly commercial agent, because he would have the right himself to say what they must have.

Mrs. ROGERS. Well, he would be the owner then, so to speak, would he not, of all the commodities?

Mr. CASTLE. Which they might or might not want.

Mrs. ROGERS. If this bill passes, would it result beneficially or act as a detriment to the United States insofar as any extended aid to England is concerned?

Mr. CASTLE. I cannot see that it would affect that one way or the other.

Mrs. ROGERS. Well, if we should weaken ourselves very much, would not that later on be a detriment to our assisting England?

Mr. CASTLE. Surely.

Mrs. ROGERS. Must we not remain strong ourselves to help England?

Mr. CASTLE. We must remain strong ourselves to help England. There is no doubt of that.

Mrs. ROGERS. If this bill passes, would not it cause the United States to follow a policy which would permit Hitler at any time he chooses to declare a state of war exists with the United States? In other words, do you believe this bill is a long step toward involving the United States in this horrible war?

Mr. CASTLE. I do think it is. I think Hitler would consider it just one more reason why he could, if he so wished to, declare that a state of war exists.

Mrs. Rogers.' And you do feel that?

Mr. CASTLE. I have no fear myself that we will declare war for a very, very long time to come, if ever. But I think the time may come when Hitler will say, due to this, that, and the other thing which has been done, a state of war exists.

Mrs. Rogers. Do you believe that if the provisions of this bill are carried out, vesting control in the President, it would go far toward giving the authorities to send ships and munitions of war which might get the United States in actual fighting? Do you not believe the cost of it all might bankrupt this Government?

Mr. CASTLE. Very easily. But when you say “carrying out the provisions of the bill,” I find it a little hard to follow, because I do not think the bill orders any special thing to be done. It simply gives the President the power to do anything.

Mrs. ROGERS. It gives him a blank check, in other words?
Mr. Castle. Yes.

Mrs. ROGERS. And also at a later date could not and would not Germany collect damages against the United States for the ships and munitions of war, and so forth, that we gave, loaned or leased to Great Britain? You remember after the Civil War, England collected large damages-or rahter, we collected large damages against England because the British Navy did not observe strict neutrality in regard to the rights of the United States.

Mr. Castle. Yes. I think if Germany wins the war, Germany will undoubtedly try to collect damages from us.

Mrs. Rogers. And they will be very large damages?
Mr. CASTLE. They are likely to be.

Mrs. ROGERS. So that would add greatly to the expenses of this bill?

Mr. Castle. Yes.

Mrs. ROGERS. Would not this bill tie our destinies with those European war leaders whose actions we are not able to control for a very, very long period of time?

Mr. CASTLE. Well, of course, I am afraid it would, becauseespecially if the President gets into it as deeply as the bill would put him into it-if we once get into European affairs it is going to be very difficult to get out again.

Mrs. ROGERS. I understand you favor a quid pro quo. Am I correct in that?

Mr. CASTLE. In what?

Mrs. Rogers. Well, for instance, do you not feel if we give England supplies that England should give us back something in return, such as possessions or tin, if we need it, or rubber?

Mr. CASTLE. I think so far as possible; yes; without any doubt. But I must say that after the last war I hesitate to urge loans, because it makes such bad feeling afterward.

Mrs. Rogers. Do you feel that since there is no provision in the bill that it would be wise to provide in the bill that some officer, say the Comptroller General, have charge or be charged with the duty of keeping an official record of all defense articles? There is a provision in it, but it does not state in that provision what officer will have charge of it. Do you feel that the duty-let us call him the Comptroller General, should be charged with the duty of keeping an official record of all those defense articles?

Mr. Castle. I think someone certainly should.

Mrs. Rogers. That is, to keep an official record of all those defense articles which would be transferred by the United States to any government, together with any payment of any kind received by the United States from any government for such property?

Mr. CASTLE. Yes; but I should not feel myself capable of saying who ought to do it. I think someone should.

Mrs. Rogers. The Comptroller General is supposed to guard very carefully the financial assets of the Government. I suggested that he should be that officer.

I ask unanimous consent, Mr. Chairman, at this point that the amendment suggested by Congressman Dewey be placed in the record.

The CHAIRMAN. Without objection, so ordered. (The statement referred to follows:)


NINTH DISTRICT, ILLINOIS, ON H. R. 1776 Ladies and gentlemen of the Committee on Foreign Affairs: I appreciate this opportunity to present for the record this brief statement on H. R. 1776. Your committee has had before it many distinguished people qualified to speak on the various questions of foreign policy, defense policy and economic policy involved in this proposed legislation. They have doubtless made it clear that the bill, as it now stands, is defective in a number of respects. I shall, however, confine this statement solely to two defects in the bill which are immediately apparent and concerning which I wrote your distinguished chairman under date of January 13.

I would be pleased if your committee would permit me to insert this letter at the end of this statement. It embodies two specific amendments I respectfully suggest to your committee. In making this statement I merely seek to emphasize what I have already said in my letter of the 13th.

In the first place, the bill makes no provision for an accountability to the Congress of the transfers or sales made under the powers delegated. In the second place, it makes no provision against the possibility that important British assets in this hemisphere may pass into the hands of unfriendly foreign powers in the event of the defeat of Great Britain by the Axis Powers.

The first amendment I have suggested is purely a technical one, suggesting that the Comptroller General of the United States look after the accountability of the material transferred to Great Britain or other countries as permitted by the proposed legislation. It may be that your committee can devise a better means for insuring an accountability, but some effective means there must be. After all, this is a representative government, a republic in form, and a democracy in spirit.

When we, as representatives of the people, are called upon to vest discretionary powers in the Executive, at the very least we should establish some way by which the Congress may know how the delegated powers are exercised. There must be some accounting of what is sold, exchanged, loaned, leased, transferred, or given away. The money and material belong to the people. We are responsible for it, and it behooves us to assume that responsibility.

I respectfully submit that the bill should be amended so that there be some accounting, so that the Congress may at any time learn through a single agency, responsible to the Congress, what is sold, what is exchanged, what is loaned or leased, and what is actually given away as an outright gift.

The second amendment suggested in my letter to the chairman is one of broader importance. It is to this amendment that I am anxious to direct your special attention. It relates to international finance or, more specifically, to British assets in this hemisphere. Having served as Assistant Secretary of Treasury and as financial adviser to the Polish Government, I am perhaps better qualified to address myself to this phase of the proposed legislation than any other.

There has been a great deal of talk about the possibility of the British fleet falling into the hands of the Axis Powers should any disaster overtake the British Empire. The Secretary of Navy discussed this possibility in his testimony before your committee, at which time I understand he presented figures on the combined naval strength of the Axis Powers and that of the United States. All of us recognize this danger to our security. We are preparing to meet it by building up the greatest and strongest fleet this country has ever had.

But, as important as this question of the possible transfer of the British Fleet to the Axis Powers in the event of Britain's defeat is to our security, I think we are overlooking a more practical danger. We are overlooking the fact that Great Britain has extensive holdings in this hemisphere, which, in the event of the defeat of Great Britain, will undoubtedly pass into the hands of the Axis Powers. The Axis Powers would have thus obtained the strong foothold in this hemisphere so long sought.

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 laborand industry in the United States.

There is no purpose in my mind that these assets shall serve as collateral to our loans 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 deposits, credits, etc., existing in the United States, in order that these holdings may 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 data regarding the British investments in Latin America. But I do not think his statement 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 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, these 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 combination 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 in vestments 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 ity 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

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