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Estimated dollar expenditures and receipts of British Empire, excluding Canada,

from Jan. 1, 1941, to Jan. 1, 1942

[In millions of United States dollars) Dollar expenditures: 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..

$1, 274
(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...-


$1, 554 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.--


338 C. Purchases by Empire countries, excluding Canada, from

areas outside the United States requiring gold or
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)--- 880

1, 127 Total dollar requirements for all transactions..

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.--



1, 115


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

560 2. Australian gold exports to United States.

75 3. South African exports of gold.--

480 C. Canadian assistance to United Kingdom..-

Total dollar receipts by Empire countries, excluding

Total dollar deficit with countries other than Canada
during 1941..

Total dollar deficit with Canada during 1941..-- 620
Total dollar deficit of British Empire, excluding Canada,

during 1941.--
Total receipts and deficit on operations with all countries

other than Canada during 1941.-

1, 555

1, 464

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

[In millions) Gold in United States or en route...

$205 Official dollar balances...

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

616 Total liquid assets.

875 Direct and other investments (about)

900 Total dollar exchange assets...

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:


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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In British Empire:


Market. Australia:


Market. New Zealand:


Market. India:


British Africa: Nominal
Malaya: Nominal.
Other: Nominal

Total in British Empire...
In Latin America:


Market. Brazil:


Market.. Chile:


Market. Uruguay:


Market. Mexico:


Market. Peru:


Market. Cuba:


Market. Venezuela:


Colombia, Ecuador, Bolivia, Paraguay, Central America:

International: Nominal.

Total in Latin America: Nominal.
In Asia:

China: Nominal.
Japan: Nominal.
Netherlands East Indies: Nominal.
Philippines: Nominal.

Total, Asia...-
In Europe: Nominal...
In other areas: : Nominal.

Total United Kingdom investments outside United

States: Nominal value......



42 (21)

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1 Not shown separately.
2 Mainly Iran, Egypt, Iraq, and Portuguese East Africa.

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

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

The CHAIRMAN. Mr. Jarman, any questions?
Mr. JARMAN. No questions.
The CHAIRMAN. Mr. Arnold, do you have any questions?
Mr. ARNOLD. No questions.
The CHAIRMAN. Mr. Burgin, do you have any questions?

Mr. BURGIN. Mr. Secretary, are there any purchases which have been made jointly by Great Britain and France? Is any material which they could use tied up?

Mr. MORGENTHAU. Well, what happened was this. Somewhere along in the first week of July the British Purchasing Commission took over the outstanding contracts of the French and paid for them so they were welded into one group. But I might point out that at that time the French had more in the way of liquid dollar assets than the English had. But the British Purchasing Commission took over all of the French purchases in this country.

The CHAIRMAN. Mr. Courtney, do you have any questions?
Mr. COURTNEY. I have no questions.
The CHAIRMAN. Mr. Eberharter?

Mr. EBERHARTER. Mr. Secretary, in the first sheet which you gave us, the first item there seems to be dated in 1941 of $1,274,000,000. Is that amount exclusively for war materials and munitions?

Mr. MORGENTHAU. That figure is practically entirely for munitions, as I understand it.

Mr. EBERHARTER. Then would you say that is about the extent of their contemplated purchases during this year for war materials?

Mr. MORGENTHAU. Those are the figures they have furnished me of what they had already bought-have signed contracts for prior to January 1, 1941.

Mr. EBERHARTER. Well, I think it would be enlightening if you could furnish us with an estimate or if they could furnish us with an estimate of what they might spend during 1941 or might be compelled to order in addition to what they have already ordered.

Mr. MORGENTHAU. If this legislation passes in the approximate form it now is before this committee, the proposal would be that the Army and Navy would do the ordering of the munitions-not only what they need but any other country might need. Both the Secretary of War and the Secretary of the Navy have copies of what the British Purchasing Commission requirements are for this year. And I think, if it is agreeable to you, that it would be better to wait until Mr. Stimson or Mr. Knox appear, because they have that information and I feel it is within their sphere rather than mine.

Mr. EBERHARTER. You feel, Mr. Secretary, from a study of this statement, they are really not in a financial position to pay or continue to pay for any length of time for war materials?

Mr. MORGENTHAU. From this financial picture which I have given to you I am satisfied that they can pay with dollars during this year for what they have already bought. But when it comes to finding the dollars to pay for anything like what they need in the future, they just have not got it.

Mr. EBERHARTER. That is all.
The CHAIRMAN. Mr. Gregory?
Mr. GREGORY. I have no questions, Mr. Chairman.
The CHAIRMAN. Mr. Wasielewski?

Mr. WASIELEWSKI. I have no questions.
The CHAIRMAN. Mr. Sikes?
Mr. SIKES. I have no questions.
The CHAIRMAN. Mr. Davis?
Mr. Davis. I have no questions.
The CHAIRMAN. Mr. Fish?

Mr. Fish. Mr. Secretary, how much money has Great Britain spent here in the last 16 months since the war was declared?

Mr. MORGENTHAU. If you will give me a minute I will give you the figure.

Congressman Fish, the answer is that as of January 1, the British Purchasing Commission has paid and taken delivery of $1,337,000,000.

Mr. Fish. They have paid that amount of money since the war began? Mr. MORGENTHAU. Yes; $1,337,000,000.

Mr. Fish. Now, what is the total figure that you estimate that they have available in dollar securities for further buying of war supplies here?

Mr. MORGENTHAU. The figure that I have here is an over-all figure of $1,775,000,000.

Mr. Fish. That has only to do with the securities in the United States; is that correct?

Mr. MORGENTHAU. That has to do with the gold, the dollar balances, their listed American securities and their direct investments in the United States.

Mr. Fish. In the United States?
Mr. MORGENTHAU. In the United States. In other words, dollars.

Mr. Fish. Do you know how much dollar exchange, or, let us say, gold, England has available that could be transferred here for credit?

Mr. MORGENTHAU. Well, now, do you mind if I ask you: from some of her dominions?

Mr. Fish. I mean Great Britain has available for transfer to the United States for credit to buy war supplies?

Mr. MORGENTHAU. May I have a minute, please? Mr. FISH. Yes. Mr. MORGENTHAU. The answer to your question, Congressman Fish, is that I have listed here all the readily available dollar assets that the United Kingdom has, as I am advised by their Treasury:

Mr. Fish. Well, I am advised by a statement of the Federal Reserve that Great Britain has something over 7 billion dollars in gold securities that could be transferred to us for credit. This is the official statement the Federal Reserve issues.

Mr. MORGENTHAU. Congressman Fish, I have their Bulletin here. I take it you refer to their total gold and dollar reserves of $7,115,000,000, listed in the Bulletin. Now, in the first place, that includes the central gold reserves of the dominions, as well as of the United Kingdom, $2,735,000,000.

Now, it includes the dollar balances for the whole British Empire of $1,050,000,000. These figures of the Federal Reserve and ours, so far as I know, are not in conflict. I would like to point out that these figures are as of August 1939, that is, before the war started. But we have used those figures as well as all other figures availableplus what the British Government has given us—and I have no reason

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