hearings together with the statement from the President and the Secretary of Agriculture and the Secretary of the Treasury. Mr. WOLCOTT. Preceding that, might not the message of the President be included? The CHAIRMAN. That is what I meant when I said that. The CHAIRMAN. Well, if the committee desires we may do so. I do not want to take the time to read them. I would suggest we incorporate them in the record of the hearings and that we do not detain Mr. Jones for the length of time necessary to read these various letters. It would take quite some little time. There are a half dozen of them. I will incorporate them all and if you like to see them at any minute they will be available to you without waiting for the record to be printed. Mr. GAMBLE. May we have Mr. Hull's telegram read? The CHAIRMAN. Yes, I want to read it. I am sure the committee would like to have it. Mr. GORE. To whom is the telegram addressed? At Habana the American nations agreed that in view of the disruption in the channels of international commerce and the curtailment of markets for certain products of the Americas the American nations must do everything in their power to strengthen their own economic position to improve further mutually beneficial trade and other economic relations between and among themselves and to devise and apply appropriate means of effective action to cope with the difficulties, disadvantages and dangers arising from the present disturbed and dislocated world conditions. I consider the enactment of the proposed legislation expanding the powers and operations of the export import bank essential in order to put the United States in a position to cooperate fully with the other American republics in mecting these urgent needs of economic defense in the face of the possibilities of serious threats to the peace, security, and welfare of this hemisphere resulting from sinister developments elsewhere in the world. The 21 American republics have agreed on a practical program of defensive action of which economic defense is an indispensible part. The enactment of the legislation now pending before your committee will enable the United States to make its appropriate economic contribution to the carrying out of that program which is necessary to the safeguarding of the vital interests of the United States in a situation of unprecedented seriousness and danger. CORDELL HULL. Mr. MILLER. We ought to go down to White Sulphur Springs to talk it over with him. The CHAIRMAN. That is a matter, of course, for the committee. I will incorporate in the hearings the other statements to which I alluded which I do not have before me at the moment. They are in the Senate hearings and I should like them to appear in the House hearings if there is no objection. [H. Doc. No. 881, 76th Cong., 3d sess.] MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING A REQUEST THAT CONGRESS GIVE PROMPT CONSIDERATION TO INCREASING THE CAPITAL AND LENDING POWER OF THE EXPORT-IMPORT BANK OF WASHINGTON BY $500,000,000 To the Congress of the United States: As a result of the war in Europe, far-reaching changes in world affairs have occurred, which necessarily have repercussions on the economic life both of the United States and of the other American republics. All American republics in some degree make a practice of selling, and should sell, surplus products to other parts of the world, and we in the United States export many items that are also exported by other countries of the Western Hemisphere. The course of the war, the resultant blockages and counter blockades, and the inevitable disorganization, is preventing the flow of these surplus products to their normal markets. Necessarily this has caused distress in various parts of the New World, and will continue to cause distress until foreign trade can be resumed on a normal basis and the seller of these surpluses is in a position to protect himself in disposing of his products. Until liberal commercial policies are restored, and fair trading on a commercial plane is reopened distress may be continued. I, therefore, request that the Congress give prompt consideration to increasing the capital and lending power of the Export-Import Bank of Washington by $500,000,000, and removing some of the restrictions on its operations to the end that the bank may be of greater assistance to our neighbors south of the Rio Grande, including financing the handling and orderly marketing of some part of their surpluses. It is to be hoped that before another year world trade can be reestablished; but, pending this adjustment, we in the United States should join with the peoples of the other republics of the Western Hemisphere in meeting their problems. I call the attention of Congress to the fact that by helping our neighbors we will be helping ourselves. It is in the interests of the producers of our country, as well as in the interests of producers of other American countries, that there shall not be a disorganized or cutthroat market in those commodities which we all export. No sensible person would advocate an attempt to prevent the normal exchange of commodities between other continents and the Americas, but what can and should be done is to prevent excessive fluctuations caused by distressed selling resulting from temporary interruption in the flow of trade, or the fact that there has not yet been reestablished a system of free exchange. Unless exporting countries are able to assist their nationals, they will be forced to bargain as best they can. As has heretofore been made clear to the Congress, the Export-Import Bank is operated by Directors representing the Departments of State, Treasury, Agriculture, and Commerce, and the Reconstruction Finance Corporation, and is under the supervision of the Federal Loan Administrator, so that all interested branches of our Government participate in any loans that are authorized, and the Directors of the Bank should have a free hand as to the purposes for which loans are authorized and the terms and conditions upon which they are made. I, therefore, request passage of appropriate legislation to this end. THE WHITE HOUSE, July 22, 1940. FRANKLIN D. ROOSEVELT. DEPARTMENT OF COMMERCE, MY DEAR MR. CHAIRMAN: Reference is made to your letter of August 6, 1940, in which you enclosed a copy of H. R. 10212, a bill: To provide for increasing the lending authority of the Export-Import Bank of Washington, and for other purposes. and requested an expression of this Department's views with respect to the bill. The stated purpose of this bill is "to assist in the development of the resources, the stabilization of the economies, and the orderly marketing of products of the countries of the Western Hemisphere." To accomplish this purpose the bill authorizes the Export-Import Bank to make loans to any governments and their central banks, and when guaranteed by such governments or central banks, to political subdivisions, agencies, and nationals of such governments. In order to provide the bank with funds for such purposes, the Reconstruction Finance Corporation is authorized to supply the Export-Import Bank with such funds in an amount not to exceed $500,000,000 outstanding at any one time. The authorization of the Export-Import Bank to make such loans is conditioned on the written request of the Federal Loan Administrator, with the approval of the President, and is subject to such conditions and limitations as they may set forth. The bill provides that the loans may be made and administered in such manner and upon such terms and conditions as the bank may determine. It is believed that H. R. 10212 will accomplish the purpose set forth in the President's message to the Congress of July 22, in that it would increase "the capital and lending power of the Export-Import Bank of Washington by $500,000,000 and remove some of the restrictions on its operations to the end that the bank may be of greater assistance to our neighbors south of the Rio Grande including financing the handling and orderly marketing of some part of their surpluses." The expansion of the activities of the bank as proposed by H. R. 10212 would make it possible to have certain expedient foreign-exchange needs met and would, therefore, facilitate United States trade with certain Latin-American countries. This bill is a part of a program of total national defense. It reflects recognition that our economic relations with the other countries of this hemisphere and economic conditions in such countries are vital factors in our ability to defend ourselves against attack. The rather general statement of purpose embodied in H. R. 10212 indicates that loans would presumably be made by the bank against surplus commodities such as Brazilian coffee or Argentinian beef. The likelihood of loss through loan defaults cannot be ignored or minimized but this possibility is inherent in the broad policy of which the bill is merely a single element. In view of the above considerations, the Department of Commerce perceives no objection to the enactment of the proposed legislation. A copy of this letter has been submitted to the Bureau of the Budget in accordance with established procedure. However, time has not permitted a statement from that Bureau with respect to its contents. Very sincerely yours, Hon. HENRY B. STEAGALL, SOUTH TRIMBLE, JR., Acting Secretary of Commerce. Chairman, Committee on Banking and Currency, DEPARTMENT OF AGRICULTURE, Chairman, Committee on Banking and Currency, Hon. HENRY B. STEAGALL, House of Representatives. DEAR MR. STEAGALL: This is in response to your telephone request that we forward you, as promptly as possible, an expression of the views of this Department concerning H. R. 10212, a bill "to provide for increasing the lending authority of the Export-Import Bank of Washington, and for other purposes," now pending before your committee. Section 1 of the bill amends section 5 (d) of the Reconstruction Finance Corporation Act, as amended, by adding a new subsection. Under such new subsection, the Export-Import Bank would be authorized to make such loans to the governments and central banks, agencies or nationals of countries of the Western Hemisphere which the Federal Loan Administrator, with the approval of the President, finds will assist in the development of the resources, the stabilization of the economies, and the orderly marketing of products of such countries. Section 1 also authorizes the Reconstruction Finance Corporation to provide the ExportImport Bank of Washington with funds for such loans, either through loans to it or subscriptions to its preferred stock, up to $500,000,000. Section 2 also amends section 5 (d) of the Reconstruction Finance Act, as amended, by adding a new paragraph which would increase the amount of notes, bonds, debentures, and other obligations which the Reconstruction Finance Corporation may issue and have outstanding at any one time by such amount as is necessary for the purposes of this bill, as well as its participation in the national defense program as previously authorized by the Congress. Section 3 would increase the lending powers of the Export-Import Bank of Washington from $200,000,000 to $700,000,000, and would extend the period for the exereise of its functions from June 30, 1941 to January 22, 1947. This Department feels that legislation of this character is desirable, and in view of the possible necessity of the United States furnishing some financial assistance under such programs as may be adopted for promoting solidarity along economic, political, and military lines among the nations of the Western Hemisphere, we recommend that such legislation be enacted by the Congress. This bill differs only in form from S. 4240, recently reported favorably by the Senate Banking and Currency Committee. Either the House or the Senate bill would appear to be equally satisfactory. Sincerely yours, CLAUDE R. WIEKARD, Acting Secretary. TREASURY DEPARTMENT, MY DEAR MR. CHAIRMAN: Reference is made to the request of August 6, 1940, from your committee for an expression of the Treasury Department's opinion as to the merits of H. R. 10212, a bill "To provide for increasing the lending authority of the Export-Import Bank of Washington, and for other purposes. In order to assist in the development of the resources, the stabilization of the economies, and the orderly marketing of products of the countries of the Western Hemisphere, section 1 of H. R. 10212 would amend section 5d of the Reconstruction Finance Corporation Act, as amended, to authorize the Export-Import Bank of Washington, upon the written request of the Federal Loan Administrator with the approval of the President, to make loans to any governments and their central banks and, when guaranteed by such governments or their central banks, to political subdivisions, agencies, and nationals of any such governments, notwithstanding any other provisions of law insofar as they may restrict or prohibit loans or other extensions of credit to, or other transactions with, the governments of the countries of the Western Hemisphere or their agents or nationals. The Reconstruction Finance Corporation would be authorized to supply the bank with funds for such purposes, not to exceed $500,000,000 outstanding at any one time, through loans to or by subscriptions to the preferred stock of the bank. Section 2 would amend section 5d of the Reconstruction Finance Corporation Act, as amended, to authorize the Reconstruction Finance Corporation to issue and have outstanding additional notes, bonds, debentures, and other obligations sufficient for the participation of the Reconstruction Finance Corporation in the national-defense program as provided in that section of the Reconstruction Finance Corporation Act, as amended. (The act of June 25, 1940, Public, No. 664, 76th Cong., amended sec. 5d of the Reconstruction Finance Corporation Act, as amended, for the purpose, among others, of authorizing the Corporation to make loans to, or purchase the capital stock of, corporations for the purpose of producing, acquiring, and carrying strategic and critical materials and for plant construction, expansion and equipment, and working capital, to be used by corporations in the manufacutre of equipment and supplies necessary to the national defense.) Section 3 would amend section 9 of the act of January 31, 1935, as amended (U. S. C., Sup. V, title 15, sec. 713b), to continue the existence of the ExportImport Bank of Washington until January 22, 1947, and to increase the amount of loans or other obligations which the Bank may have outstanding at any one time from $200,000,000 to $700,000,000. It is assumed that it is the present intention of Congress to continue the existing procedure under which capital is supplied by the Reconstruction Finance Corporation to the Export-Import Bank of Washington, namely, that such capital is supplied by the Reconstruction Finance Corporation when requested by the Secretary of the Treasury with the approval of the President (U. S. C., Sup. V, title 15, sec. 713b). However, in order that there may be no doubt in that respect, it is suggested that section 1 of the proposed legislation be amended by inserting after the word "supplying" on line I of page 2 the following: when requested by the Secretary of the Treasury with the approval of the President,". The Treasury Department is strongly of the opinion that the proposed legislation is necessary in view of the existing national emergency, and recommends that H. R. 10212 with the minor amendment suggested above be enacted. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your committee. Very truly yours, Hon. HENRY B. STEAGALL, D. W. BELL, Acting Secretary of the Treasury. Chairman, Committee on Banking and Currency, House of Representatives. Mr. CRAWFORD. Do you know whether or not in these papers which you intend to incorporate in the hearings, there will be a copy of Mr. Hull's address at Habana? The CHAIRMAN. I have not thought about incorporating it. I have read Mr. Hull's telegram. Mr. CRAWFORD. Personally I feel it touches on the subject matter of the bill very materially, and if there is no objection I would like to have that incorporated in the hearings also. The CHAIRMAN. Without objection it will be incorporated in this hearing. ADDRESS OF THE HONORABLE CORDELL HULL, SECRETARY OF STATE AND DELEGATE OF THE UNITED STATES TO THE SECOND MEETING OF THE FOREIGN MINISTERS OR THEIR REPRESENTATIVES OF THE AMERICAN REPUBLICS AT HABANA, CUBA, MONDAY, JULY 22, 1940 Mr. Chairman, Fellow Representatives of the American Republics: Permit me, first of all, to express my deep personal pleasure in setting foot once more on the soil of the great nation whose guests we are at this time. Forty years have passed since my first visit to these shores, when I had the honor to serve with my regiment in the cause of Cuba's liberation. I doubly welcome the present opportunity to revisit this country-both because of the personal gratification which it affords me and because of the vital importance of the purpose which has brought us together in this beautiful city of Habana. We are here as representatives of the 21 free and independent American republics. We meet when world conditions are perhaps graver than they have ever been before. Our purpose is to devise concrete measures by which a number of pressing problems may be met. Our objective is to safeguard the independence, the peace and the well-being of the American republics. For nearly a year now, a new major war has raged, with increasing fury, over important areas of the carth. It came as a culmination of a process of deterioration of international conduct and international morality, extending over a period of years, during which forces of ruthless conquest were gathering strength in several parts of the world. These forces, now at work in the world, shrink from no means of attaining their ends. In their contempt for all moral and ethical values, they are bent on uprooting the very foundation of orderly relations among nations and on subverting, undermining and destroying existing social and political institutions within nations. They have already left in their wake formerly sovereign nations with their independence trampled into dust and millions of proud men and women with their liberties destroyed. Our American republics had no part in kindling the tragic conflagration which has thus been sweeping across the world. On the contrary, severally and jointly, we did everything in our power to stay its outburst. Once the conflict had begun, we did everything we could to limit its spreading. But it has been increasingly clear that in the vast tragedy which has befallen large portions of the earth there are dangers to the American nations, as well, which it would be suicidal not to recognize in time and not to prepare to meet fully and decisively. It has been increasingly clear that our nations must not blind themselves into fatal complacency as so many nations have done to their mortal sorrow-regarding the possibility of attack against them from without or of externally directed attempts from within to undermine their national strength and to subvert their cherished social and political institutions, or both. Too many nations have only recently paid a tragic price for confidently placing reliance for their safety and security solely upon clearly expressed desire to remain at peace, upon unequivocally proclaimed neutrality, upon scrupulous avoidance of provocation. Conquerors, invaders, and destroyers ignore or brush aside reasons such as these. Looming ominously on our horizon is the danger that attempts may be made to employ against our nations, too, the same means of subordinating their destinies to control and dictation from abroad that have already been notoriously employed elsewhere against numerous other countries. We must recognize the serious possibility that no effort or method may be spared to achieve, with respect to some of us, economic domination and political penetration, and to sow, among our nations, the seeds of suspicion, dissension and discord—the frequent prelude to even more menacing action. |