The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
SIXTY-FOURTH CONGRESS, FIRST SESSION.
Corrupt Practices.
SPEECH
OF
HON. ROBERT L. OWEN,
OF
OKLAHOMA,
I n t h e S e n a t e of t h e U n ited S ta te s ,
Thursday, August 24, 1916.
Mr. OWEN. Mr. President, I ask unanimous consent tliat,
after the Senate shall have voted on the pending revenue bill,
it proceed to the consideration of House bill 15842, and to the
disposition of that measure.
Mr. SIMMONS. What is the measure?
*
Mr. OWEN. It is the corrupt-practices act.
Mr. SMOOT. Nobody in the Senate can tell when the revenue
bill is going to pass; that has not been decided. It seems to
me that it is unwise for the Senator now to ask unanimous con
sent to take up the bill to which he has referred after the revenue
bill shall have passed. We do not know when a resolution will
be agreed to providing for final adjournment. We are right
in the last days of the session of Congress, and for that reason
Mr. President, I shall object.
Mr. OWEN. Mr. President, on the first day of this session
the chairman of the Democratic conference, Senator K ern, intro
duced a bill providing for the control of corrupt practices in this
country. The bill is similar to one which was reported during
the lu*t C ongre^ but was not acted on by the Senate. The
House passed a similar measure at this session and sent it to the
Senate. It has been reported back to the Senate and is now on
the calendar. The bill is not a long b ill; it is not an involved bill.
It ought to be capable of disposition in one or two days. The
House of Representatives acted in a few hours in considering
and acting on the measure.
After the revenue bill shall have been acted on by the Senate
that bill must go to conference, and it certainly will take sev
eral days to reconcile the differences between the two Houses,
and in that time this bill can be considered, amended if neces
sary, and disposed of.
There is no reason why Senators should not in the meantime
read this b ill; should not study this b ill; should not be com
pletely^ prepared to express themselves upon it, unless it is the
desire of Senators to prevent action just before the pending
election. The American people, I believe, will not approve of
the old system of the use of money on a gigantic scale to influ
ence and control the elections of this country. As one of their
Representatives, keenly sensible of my duty toward them, under
my oath as a public servant, I shall resolutely insist upon action
now. I earnestly hope I may have the sympathy and coopera
tion of all Senators, whether Democratic or Republican, in get
ting immediate constructive action and that I may not be impeded
by the old Senate game of a substantial filibuster under the pre
tense of debate, but that the debate shall be simple and straight
forward, and amendments suggested sincere and of constructive
and not of obstructive purpose.
This bill is easily understood. The first section simply defines
what “ political committees ” are, what the word “ candidates ”
and the word “ elections ” shall be construed to mean, what the
words “ political purposes,” the words “ disbursement,” “ per
son,” and “ Representative ” shall be construed to mean, in
order that the text of the bill shall not be susceptible of mis
construction.
Section 2 of the bill provides for the organization o f political
committees of citizens who desire to take part in influencing
elections, and provides a method by which such committees can
be organized.
Section 3 requires each of the committees to have a chairman
and a treasurer.
Section 4 provides that every political committee must keep
a bank account and keep a complete record of receipts and dis
bursements.
Section 5 requires receipts to be preserved.
58546— 16368
Section 6 provides for an account to the treasurer and a
record o f contributions.
Section 7 requires statements by the treasurer to be filed
with the Clerk of the House of Representatives.
Section 8 requires the details of the contributions, where
they are above $100 and where they are below $100, and the
aggregate of contributions and disbursements in like fashion.
Section 9 requires statements by others than political com
mittees of expenditures where they exceed $50, and compels a
private person who contributes more than $50 to make a report
as if he were a committee, and provides further that no indi
vidual citizen shall contribute to any election a sum exceeding
$5,000.
Section 10 puts a limitation on expenditures of $400,000 on
national committees in the election of presidential and vice
presidential electors, and makes the chairman and treasurer
of each national political committee responsible for preventing
the aggregate of such disbursements exceeding this amount.
It provides further that the chairman and treasurer of the
congressional campaign committees shall be charged with the
responsibility of accounting to the treasurers of their respective
national committees for disbursements made by them. It limits
the aggregate of disbursements for a presidential candidate to
$50,000, for a vice presidential candidate to $25,000, and pro
vides that no political committee or any member or officer
thereof and no personal campaign committee shall make any
disbursements for the nomination of such candidates except
under the direction and with the consent of such candidates.
It. makes the amount which a Senator may expend for a nomi
nation or for an election $5,000, but provides for certain ex
emptions in the way of postage, circulars, etc., on condition that
those expenditures shall be reported, together with other ex
penditures. It provides that the aggregate of disbursements
by a Member of Congress for his nomination or election shall
not exceed the sum of $2,500. It provides that candidates shall,
within certain times, make these reports to the Secretary of
the Senate, if a candidate for the Senate, or to the Clerk of the
House of Representatives, if a candidate for the House. It
provides that no candidate for Representative or Senator shall
make a promise of patronage in order to secure his election or
nomination. It requires the statements to contain a statement
that no promise has been made. It requires the statements to
be made under oath. It provides that the bill shall not be con
strued to annul or vitiate the laws of any State not directly in
conflict with the bill, and provides that no disbursement may
be lawfully made except for the following purposes— and this
is a very important part of the bill, which ought to meet the
approval of every Senator on both sides of this Chamber:
First. For the traveling expenses and expenses of subsistence
of the candidate and of the members of political committees
and their bona fide officers and assistants.
Second. The payment of fees or charges for placing the name
of the candidate upon the primary ballot.
Third. The hire of clerks and stenographers and the cost of
clerical and stenographic work and of addressing, preparing,
and mailing campaign literature.
Fourth. Telegraph and telephone calls, postage, freight, and
express charges.
Fifth. Printing and stationery.
Sixth. Procuring and formulating lists of voters.
Seventh. Headquarters or office rent.
Eighth. Newspaper and other advertising.
Ninth. Renting of halls or providing places for public meet
ings, and all expenses of advertising and other expenses usually
incident to holding such meetings.
Mr. President, these affirmative declarations are intended to
exclude the use of money in buying voters, in bribing men under
the pretense of using their services for legitimate purposes
when in point of fact the man is really hired to vote, and a
multitude of crafty means of evasion.
The bill provides further that any person who, otherwise
than in compliance with the provisions of the bill, shall hire or
employ, or offer to hire or employ, or shall reward or give to
any person anything of value for his services, or for loss of
time, or for reimbursement of his expenses in consideration
2
C O N G R E S S IO N A L R E C O R D .
of such person directly or indirectly working, electioneering,
or making public addresses for or against any candidates or
candidate, or who rewards or offers to reward any person for
his vote or influence, or the promise of his vote or influence,
for or against any candidate for the office of President, Vice
President', or Senator o f the United States, or Member of the
House of Representatives, shall be deemed guilty of a felony—
not a misdemeanor, Mr. President, because the basest crime of
all crimes is to befoul the ballot box of this country and to
steal the governing powers o f the people of the United States
by fraudulent practices in the ballot box— and upon conviction
thereof shall be punished by imprisonment in the penitentiary
for a term of not less than 1 year nor more than 10 years.
Section 11 o f the bill provides that the statements required by
the bill shall include the name and post-office address of the op
ponents o f the candidate making a report, with instructions that
the Clerk o f the House of Representatives or the Secretary of
the Senate, as the case may be, shall require such opponents,
even if not successful, to make a proper report of their expendi
tures under penalties for failure to do so.
Section 12 requires that the Clerk of the House and the Sec
retary of the Senate shall, on or before the 15th day of Janu
ary next after any general or special election for Representa
tive in Congress or Senator of the United States, report to the
House and Senate, respectively, the names of these candidates
and their reports, and that these reports shall be printed as a
public document, in order that the people of this country may see
to what extent and how far money is being used in the control
of the election of the President of the United States and of Mem
bers of this body and of the House of Representatives.
Section 13 provides that jurisdiction over all violations of the
act is conferred upon the United States district court.
Section 14 provides that personal expenses for stationery,
traveling expenses, circulars, advertising, postage, and telegraph
and telephone service shall not be subject to the provisions of
the bill, except that an account shall be kept of all moneys ex
pended *for circulars and postage and advertising authorized by
the section, which shall be reported in the statements required
by the bill as an addendum thereto, but not subject to the limi
tations in amount fixed by section 10 of the bill.
This provision is a matter of grave doubt as to the exception;
but, nevertheless, it will permit the people of the United States
to pass their judgment on whether or not the abuse will justify
striking out this exception. We have proceeded very slowly in
this matter. This question has been up for years.
We have taken one poor, little, weak, inadequate step from
time after time, and we now have on the statute books a law
that is fundamentally and essentially as contemptible as any
law that was ever written upon the statute books of any intel
ligent people. I say so because the present so-called corruptpractices act deals only with committees handling two or more
States and exercises no control whatever over committees in
side of a State and no control whatever over individuals inside
of a State, and as far as the present law is concerned, an indi
vidual, as a private person, could go into the different States
and spend a million dollars or ten million dollars corruptly with
out the laws of the United States holding him to an account for
the stealing of the presidential office or the stealing of the
senatorships upon this floor.
The idea of the Senate of the United States refusing now to
act upon this matter, right in the face o f a pending election and
of this acknowledged state of the law, I do not believe will meet
with the approval o f the people of the United States, and I do
not think it ought to meet with the approval of the people of the
United States, whose sworn representatives we are.
It shall be no fault of mine if the Senate does not act at this
session on this bill on the calendar. The newspapers have an
nounced— and announced without any justification, in my opin
ion— that there,was an implied agreement between the Senators
on this side of the aisle and Senators on the other side o f the
aisle that they were not going to permit this matter to be heard.
Mr. President, they are going to permit it to be heard. It is go
ing to be heard. No such pretended agreement exists. I do not
know who is responsible for the false report, but it assuredly is
not a friend o f the bill.
There was an impression that the parliamentary status o f this
bill was such that even if the Senate acted it could not be dis
posed of by the House. That is not true.
The House bill has passed and we have reported it, and the
matter can be disposed o f in conference within 24 hours. No
parliamentary difficulty is in the way except a possible Repub
lican filibuster, if they dare face the country with it.
Mr. PENROSE. Mr. President, will the Senator permit an
inquiry ?
Mr. OWEN. I yield to the Senator from Pennsylvania.
58546— 16368
Mr. PENROSE. Is the Senator’s anxiety to pass this bill
chiefly to remedy conditions in Oklahoma? I ask because I
have heard that the greatest laxity prevails there, to put it
mildly, in the methods of conducting elections and the expendi
ture of money.
Mr. OWEN. I will say to the Senator that I should be glad
to have it apply to Oklahoma; but I will also say to the Senator
that there is no State in the Union that will require it more
than the State o f Pennsylvania.
Mr. PENROSE. Of course, there is a difference of opinion
on that.
Mr. OWEN. Hardly.
Mr. PENROSE. But I think investigation will disclose the
fact that the most corrupt elections in the country are in the
State of Oklahoma.
Mr. OWEN. I f that were true as to Oklahoma—which it is
not—as it assuredly is as to Pennsylvania, Mr. President, then
this act will put an end to it. I will say to the Senator that
there is some basis for his inaccurate observations, because
when I was a candidate I was informed, and I verily believe,
that the Lumber Trust sent $40,000 into my State to defeat my
nomination, being offended because of the demand which I made
and voiced on this floor that Mr. Lorimer should not retain his
seat in the Senate, because the Lumber Trust had bribed the
Illinois legislators to elect Mr. Lorimer, at a cost estimated at
between $100,000 and $200,000.
Mr. VARDAMAN. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Mississippi?
Mr. OWEN. I yield to the Senator.
Mr. VARDAMAN. If the Senator will pardon an interrup
tion, I should like to emphasize the fact that this bill is not
intended for any particular State but for all the States.
Mr. OWEN. Absolutely.
Mr. VARDAMAN. And if there are irregularities in Okla
homa or Mississippi or Pennsylvania, they ought to be corrected
in so far as legislation can correct them. I agree with the
Senator that the bill ought to be considered at this time.
Mr. OWEN. I have no doubt that there is more or less irreg
ularity in all of the States. I do not claim any extraordinary
virtue for Oklahoma. Those people are only human beings,
subject to the same temptations as people elsewhere, but public
sentiment there is absolutely overwhelmingly in favor of hon
esty in our elections. I represent the people of my State truly
when I demand this statute.
Mr. SAULSBURY. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Delaware?
Mr. OWEN. I do.
Mr. SAULSBURY. I simply want to say that it seems sur
prising to one coming from this part of the country that in a
large State like Oklahoma $40,000 seems to shock the public
conscience so greatly. There is one case which I know could
be disclosed by the records of the Senate in which over $50,000
was contributed for the purpose of influencing an election in
my State on the Saturday before the election which was held
on the following Tuesday. I thoroughly agree with what the
Senator from Oklahoma says about the necessity of passing
this bill.
Mr. O’GORMAN. Mr. President, to avoid any ambiguity as
to the application of the last statement, I should be glad to
know from the Senator from Delaware whether the $50,000
to which he refers was used for the election of the candidate
o f the Republican Party.
Mr. SAULSBURY. Most assuredly it was, as many Sena
tors now sitting in this body know.
Mr. PENROSE. Mr. President, there was a million dollars
spent to elect President Wilson—over a million.
Mr. O’GORMAN. Is it not a fact that two and a half mil
lion dollars were used in 1896 to elect Mr. McKinley?
Mr. PENROSE. That might have been.
Mr. O’GORMAN. The rate has been going down since that
time.
Mr. OWEN. I f what the Senator [Mr. P enbose ] says is
true—and I do not know whether it is true or not— I want to
put a stop to the practice. I do know that no such sum was
officially reported as spent in the election of Mr. Wilson, but
it was currently reported in 1896 that Mark Hanna raised
$16,000,000 to elect McKinley and the “ Big Boys ” successfully
threatened a panic beside and voted every poor employee the cor
porations could coerce to elect McKinley; and I do not want
these great parties rivaling each other in raising gigantic funds
in a contest of money for the purpose of dishonestly and cor
ruptly influencing votes.
C O N G R E S S IO N A L R E C O R D
Mr. G ALLIN GER. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from New Hampshire?
Mr. OWEN. I yield.
Mr. GALLINGER. Has the Senator noticed that the treasurer
of the Republican National Committee is asking $10 contribu
tions to enable him to get a fund for the coming campaign?
Mr. OWEN. I wish it might be confined to $10 contributions.
I would be much more content if both parties were confined to
small contributions.
The suggestion of the Senator that innocently assumes the
Republican, will rely on small contributions will not be taken
seriously by the people, much less by Republican leaders who
know better. They will raise millions in big contributions if
not prevented, and every well informed man believe t it.
Mr. O’GORMAN. The Democratic committee in 1912 solicited
$1 contributions, which was quite reasonable.
Mr. GALLINGER. I have not seen their certificate yet. I
have seen the advertisement of the Republican treasurer.
Mr. OWEN. Mr. President, I have in my hand now a
memorandum showing conditions in Ohio, and, according to the
report filed with the secretary of state under the Ohio law,
Mr. Herrick who was the successful candidate for the Republi
can nomination at the recent primaries held in that State spent
the following amounts:
By Herrick personally, $22,175.
By the Herrick Voters’ League, $29,000.
By the Stark County Herrick Voters’ League, $413—a total
of $49,588.
And the reports from nearly a hundred other counties have
not apparently come in yet. I do not know how much it will
be, but I say this is an abuse that ought to stop.
I do not think the Republican Senators on that side of the
line should filibuster against this bill. I do not think they
should refuse their consent that a vote may be taken upon it.
I do not see how they reconcile themselves in refusing to per
mit a vote on this bill.
Mr. PENROSE. Mr. President-----Mr. OWEN. I yield to the Senator from Pennsylvania.
Mr. PENROSE.' Does the Senator expect the Republicans
in this Chamber or any individual Senator to take this bill
exactly as he has framed it, without consideration?
Mr. OWEN. Not at all.
Mr. PENROSE. It will take some time to form a good cor
rupt-practices act.
Mr. OWEN. The threat of taking some time is an old, old
story and an old, old joke. It means a filibuster threatened
under words the people would not understand in reading the
R e c o r d , but which every Senator knows means filibuster un
der pretense of debate.
Mr. PENROSE. It will be applicable to this bill also.
Mr. OWEN. But a filibuster will be well understood by the
people when it presents itself, even if under the false color of
debate.
Mr. PENROSE. No one is filibustering.
Mr. OWEN. And it will not be done without being exposed.
I can tell the Senator.
Mr. STONE. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Missouri?
Mr. OWEN. I yield.
Mr. STONE. My friend from Oklahoma said he could not
understand why our friends on the Republican side of the
Chamber could object to the passage of this bill. He certainly
did not mean in that statement to have any doubt as to the
reason. The reason is that they expect to try to buy this
elect ion
Mr. GALLINGER. I f the Senator will permit me, I have
heard it stated from several sources that the Democratic Party
is proposing to buy it-----Mr. STONE. We are ready to vote to-morrow to pass this
bill.
Mr. GALLINGER. That they have already raised a very
large sum for that purpose which they have distributed in part.
Mr. OWEN. The Democrats are ready to act now, and I
challenge the Senators on the other side to action.
Mr. PENROSE. If the Senator will permit me, the supposi
tion throughout the country is that an enormous corruption
fund has been collected by the Democratic Party, and now
they want to lock the door.
Mr. OWEN. I have heard that statement made with regard
to the Republican Party. I do not know whether it is true or
not, but I believe the Senator himself would certainly know
if it were true that the Republicans had gathered and dis
tributed a gigantic fund for such purpose.
58546— 16368
3
Mr. PENROSE. N o ; I have been down here attending to my
official duties. I do not know what is going on.
Mr. OWEN. This bill will disclose the fact if such funds
have been collected and will prevent the corrupt use of such
funds in either party if they have been collected.
Mr. VARDAMAN. I wish to suggest that the statements
which have been made by Senators on either side of the aisle
have proven beyond any sort of question the necessity for this
legislation. After the admissions made and the suspicions ex
pressed I do not see how any Senator can afford to antagonize
the passage of this bill at this session. T o do so would be almost
criminal inconsistency.
Mr. OWEN. Absolutely.
Mr. VARDAMAN. If that money has been collected, the
enactment of this law will disclose the fact, and it may be the
means by which a few distinguished gentlemen can be sent to
the penitentiary for using it, a thing that might contribute mate
rially toward the purification of the political atmosphere in this
country about election time.
Mr. OWEN. They will not use it if this act is passed.
Mr. POMERENE. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Ohio?
Mr. OWEN. I yield to the Senator.
Mr. POMERENE. I wish to suggest that even if such a fund
has been collected, this legislation can be so framed that it can
not be used.
Mr. OWEN. It would not be used in any event until just
before the election; but if this bill is passed it can not be used
in any improper way without great jeopardy to the political
thieves guilty of corruption. I do not believe that the people of
the United States are going to stand any more buying of elec
tions in this country.
Mr. President, the parliamentary way is clear. This bill is on
the calendar. The House of Representatives has acted. A con
ference can dispose of the matter within a day after the Senate
shall consider it and, if it requires amendment, after it shall
be properly amended. But to say that it will take a good deal
of time, with the sinister suggestion that it will be debated to
death, will not go in this Chamber any more without prompt
exposure. I f filibustering is really privately and secretly pro
posed by the Republicans against this bill, they are going to be
compelled to publicly filibuster against it.
I notify the Senate that in due time I shall move the Senate
to act upon it and it will be then for the Republicans to conduct
an open filibuster if they see fit. They can not do it under cover.
I know at least six good Republicans who will vote to take this
bill up.
I say to the Senator that as far as I am concerned I am
willing to stay here as long as is necessary to demonstrate
either the passage of this bill or to determine to the satisfaction
of the people of the United States the sinister opposition that
will prevent it from being voted upon.
Mr. GALLINGER. Mr President-----Mr. OWEN. I yield to the Senator.
Mr. GALLINGER. The Senator has not been very constant
in attendance here and his colleague has disappeared from view.
Mr. OWEN. The Senator from Oklahoma, now addressing
the Senate, has been here sufficiently to fully discharge every
duty incumbent on him, and at this session has been as continu
ously present as the Senate except for a visit to Oklahoma
of two days on an urgent business trip.
The Senator from Oklahoma has, through his committee, de
livered the rural-credits bill, taken active part in having the
child-labor bill he introduced passed, obtained a favorable report
on cloture in the Senate, and is now presenting the corruptpractices act, not to mention very many other acts he has per
sonally prepared and had passed.
The presence of the Senator from Oklahoma and his urgent
demand for a corrupt-practices act at all events will demon
strate that he is present now.
Now, Mr. President, I want to say to my colleagues that on
the 15th day o f July this corrupt-practices act was made a part
of the legislative program of the Democrats for this session. I
carefully examined the records of the Democratic conference in
the hands of the secretary of that conference, Senator P i t t
m an.
I read with painstaking care every single resolution
passed from that time to this. There has been no change
either directly or indirectly of that action of the conference.
It is true that in an attempt to reconcile the Republicans to
vote upon the legislative program which we had, they insisted
upon naming certain particular bills and leaving off of the list
the corrupt practices act. It is also true that on this side a poll
was taken and a number were found who, because of the long
time the session was taking and because of the anxiety to get
C O N G R E S S IO N A L R E C O R D
4
home and appear in their States, where they had campaigns
pending, yielded to the suggestion; but the matter was not
accepted then by the Republican side, and no obligation what
ever rests on those who tentatively and conditionally consented
to such proposed program, as the conditions utterly failed.
Mr. GALLINGER. Mr. President-----Air. OWEN. I yield to the Senator from New Hampshire.
Mr. GALLINGER. I thank the Senator for yielding, because
I want to say to the Senator that he has made a misstatment.
Mr. OWEN. I shall be glad to correct any statement I have
made, if it be inaccurate.
Air. GALLINGER. The majority submitted a list of meas
ures which they desired to have passed at this session, and the
corrupt-practices act was not on that lis t; so that the Senator
must not say that the minority is responsible for keeping it off
the list submitted by the majority.
Air. OWEN. I am very glad to hear that disclaimer. I was
certainly under the impression that the minority were responsi
ble for keeping it off, but since the minority disclaims the
paternity of this illegitimate child I know that no Democrat
will consent to be known as its father.
Air. PENROSE. And, Air. President, if the Senator will per
mit me one brief observation-----Air. OWEN. Certainly.
Air. PENROSE. So far as I am concerned personally, I will
go as far as the Senator from Oklahoma or any other Senator
to pass a corrupt-practices law. I would even go to the extent
of arbitrarily prohibiting the use of money in any election, com
pletely stopping i t ; and I am willing to stay here all the rest of
the summer and until the day before election, if the Senator
wants to stay here with me and a sufficient number of other
Senators will remain to make a quorum, to consider this bill,
the immigration bill, and everything else on the calendar; but,
in view of the fact that Senators want to go home and that wr
e
have been here a long while, anyhow, it seems reasonable that
a bill like this, that requires the most careful thought, should
have full opportunity to be considered. I will help the Senator
get it up next winter, and help him pass some kind of a bill.
Air. OWEN. The willingness of the Senator to stay here until
the day before the election, possibly until the day after the elec
tion, considering the corrupt-practices act is really pathetic.
Air. PENROSE. I take it, from all I have heard, that the
Senator did not have this interest in election reforms during his
own candidacy for reelection to the Senate.
Air. OWEN. Well, the Senator might hear more and know
less. I should not like to say what I have heard about some of
the States and some of the things that have gone on in some of
the States, very near the Senator from Pennsylvania, for fear
that it would not be parliamentary. What I want to do is to
stop the suspicions that are going around, even if they are not
well founded, and to stop the corrupt practice that has dis
honored our country.
This bill provides that—
No corporation or officer thereof on behalf of such corporation or
from corporate property shall make any contributions whatever for
political purposes. No tunds shall be transmitted from one State into
another for political purposes in excess of $1,000 for each congressional
district.
That will keep some of the money out of Oklahoma that might
otherwise go there, and it will keep money out of Wisconsin,
where, I am informed, on one occasion $250,000 was sent by the
chairman of the Republican national committee to defeat L a
F ollette for the Senate.
For that reason, among others, Senator L a F ollette and his
Republican friends, like Senators K enyon , C lapp, N orris, and
others, are for an adequate corrupt-practices act, as is every
true Progressive, I suppose. Since the Republicans have pledged
their loyalty to Progressive principles (and Progressive votes),
let them show the integrity of their high and virtuous purposes
now by voting for this bill, by helping constructively (and not
destructively) to perfect this bill.
Air. GALLINGER. Did the Senator observe how much money
had been contributed to elect him [Senator L a F ollette] on a
certain occasion?
Air. OWEN. I do not know that I have, but it would take
some money to meet that kind of a fund against him. I want to
stop the war of these funds. I do not believe that these large
funds ought to be used either for or against a Senator. I think
he ought to be allowed to go to his constituency with a clean
case and contend for his cause on its merits, and not have it
unduly influenced by money one way or the other.
Air. PENROSE. Air. President----Mr. OWEN. I yield to the Senator.
Air. PENROSE. If the Senator has not read it, I will say
that former Senator Stephenson, in his memoirs, states that
he spent about half a million dollars in Wisconsin in connec
tion with the then regular organization there.
Air. OWEN. Well, I have seen that statement also very
vigorously denied by the Senator from Wisconsin [Air. L a F ol
lette ], and I believe Senator L a F ollette against his corrupt
enemies.
Section 15 of the bill provides:
That every candidate and political committee shall securely keep and
preserve, for a period of two years from the date of any primary or
election at which such candidate was voted for or in which such
political committee participated, all records, accounts, ledgers, cash
books, canceled checks, check stubs, and other written or documentary
evidence and the records of all receipts and expenditures made by him
or it or on his or its behalf, and these records shall be, and are hereby,
declared to be public, records.
Not private records, but public records. They belong to the
public; they vitally concern the public. This is not a private
matter. A railroad president a few days ago had the unpar
alleled impudence to tell an officer of the United States—Air.
Folk— that the contributions of the railroads for political pur
poses were private matters; and yet those roads come here and
claim to represent twelve thousand millions of dollars of prop
erty, and if they can use money ad libitum as a private matter
the liberties of common citizens working at from $2 to $20 a
day are gone to destruction.
Air. GALLINGER. Air. President, I will ask the Senator in
all seriousness if the law that is now on the statute books does
not prohibit corporations from contributing to political cam
paigns, and does it not cover substantially the same ground as
his bill in that respect?
Air. OWEN. Air. President, the narrow limitation of the
question of the Senator would carry an implication that is
thoroughly untrue. It is true that corporations as corporations
are forbidden from making such contributions; but this bill
goes much further. It prevents the funds belonging to cor
porations being used, directly or indirectly; it prevents the
hiring of employees for corrupt purposes. It goes much further,
and prevents private individuals from being guilty of corrupt
practices. Under the present law, I will say to the Senator
from New Hampshire, the so-called publicity of the present
statute relates only to committees operating in two or more
States. It allows any committee to go on the inside of a State
and allows any individual to go on the inside of a State and
resort to any corrupt practice he pleases, without the Federal
law laying a hand upon him. The law on the statute books is a
fra u d ; it is— I was about to use unparliamentary language—
it is an unspeakable fraud on the American people. It seems
to promise them protection against corrupt practices, when, in
fact, it does not protect them in the slightest degree. The
so-called reports of campaign expenditures which are now sent
to the Secretary of the Senate and Clerk of the House of Repre
sentatives are ridiculous. They do not include all the money
expended on Federal elections, and the law does not require it.
I know this law is a dastardly fraud, and every Senator here
must know the same thing. How long, O L ord ; how lon g !
Air. VARDAA1AN. Air. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Alississippi ?
Air. OWEN. I yield to the Senator.
Air. YARDAA1AN. With the permission of the Senator, I
will suggest that this bill is intended to strengthen the present
law, to carry out the purpose of the American people in the
enactment of that law. It does not impair the efficiency of the
present law at a ll; but it is rather to strengthen it, to help to
carry out, to execute, and make more effective the law already
upon the statute books prohibiting corporations from contribut
ing to campaign funds. If Senators desire purity in politics;
if they really are in favor o f preventing the corrupt use of
money in elections, knowing, as they do, the utter inefficiency of
the present law, it seems to me that they should embrace with
enthusiasm the opportunity to perfect the bill proposed by the
Senator from Oklahoma [Air. O w e n ] and pass it at once.
Air. OWEN. I am praying you now, Senators, to make
effective what the people of the United States thought they
were getting when they got that old law. The old law they got
was nothing but a cloak, behind which thieves could perpetrate
the most dangerous, the most vicious of all crimes—stealing the
governing powers of the people of the United States; stealing
the presidential office; stealing the Senate; stealing the House
of Representatives ; stealing the power of taxation ; and stealing
the power to deny the right of life, liberty, and the pursuit of
happiness to the citizens of this country.
Air. President, I feel very strongly about this matter. I
caused the corrupt-practices bill to be introduced on the first day
of this session. It was duly reported. The House acted on a
bill introduced in that body, and now the improved bill intro
duced in the Senate comes before the Senate in lieu of the House
58546— 16368
X
Jf2
J
C O N G R E S S IO N A L R E C O R D
TJ&
bill, or as a substitute for the House bill. The parliamentary
status is clear. There is nothing now to prevent action on the
part of the Senate except a fundamental unwillingness on the
part of some of our distinguished opponents on the other side of
the aisle, who, under the color of debate, may, if they please,
carry on a filibuster until the election.
Mr. SHEPPARD. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. SHEPPARD. Was objection made when the Senator
asked unanimous consent?
Mr. OWEN. Every time when I have asked unanimous con
sent to vote on this bill at a fixed time Republican objection has
been made. Last Saturday I asked unanimous consent, and to
day I asked unanimous consent.
Mr. SHEPPARD. Was objection made to-day?
Mr. OWEN. It was made to-day.
Mr. SHEPPARD. Who made the objection?
Mr. OWEN. It was made by the leader of the Republican
side, the Senator from Utah [Mr. S moot], who is the chosen
leader of that side and who vigilantly acts for the Republicans
on all occasions.
One of the most important sections of this bill is section 16,
which provides that no person not a candidate, and no organiza
tion, association, partnership, or committee not a political can
didate under the terms of the bill shall contribute, pay, or ex
pend, directly or indirectly, any money or thing of value for the
purpose of influencing the elections except as a contribution to
a candidate or to a political committee authorized by law to act.
I do not care to dig up the past. I understand perfectly well
that the American people move slowly, move gradually as ex
perience justifies, and they improve their system of government
step by step, as knowledge justifies. All that I want to do
is put a stop to the buying of elections in this country by private
citizens who are multimillionaires, and who can spend millions
of dollars without feeling it and then recoup themselves through
the taxing power of the people by practices generally known
as those of the “ invisible government.”
Mr. STONE. And expect to get it back.
Mr. OW EN . They would have defeated me in my State if
money could have done it, and but for the honesty of the people
of Oklahoma I would not now be here or making this appeal.
The bill further provides that no person shall contribute or
pay to any candidate or political committee any money, funds,
5
credits, or anything of value that belongs to or is under the
control of any other person.
That is another loophole that is stopped up by this bill, because
in dealing with thieves you must have a bill that is closely knit
together. This bill has been carefully gone over by the Depart
ment of Justice and by the friends of justice, and we believe that
it will hold water.
It provides also that legal expenses in election contests shall
not be limited or affected by the bill.
It provides for punishment by imprisonment of those who
violate i t ; and section 20 gives an immunity bath to persons who
are testifying on behalf of the Government.
I f a man is used as an instrumentality for buying up votes,
he can be summoned and compelled to testify under this bill,
being given an immunity bath under the bill. He can not throw
himself behind the shield of the constitutional provision that
no citizen shall be required to testify where his testimony will
incriminate himself, by means of which skillful lawyers now pre
vent corrupt and corrupting witnesses from giving testimony,
because this bill proposes to give an immunity bath. The man
does not put himself in jeopardy, and he can be compelled under
this bill to tell the truth, and it is the truth that the American
people want. It is honesty in elections. It is that the jury
passing upon the great issues of statecraft between the two
great parties shall not be, by sinister means, misled, suborned,
bribed, or coerced, and that no member of our great electorate
shall be subjected to such temptation because of poverty or a
because of dependence for employment upon those who have the
power of life and death over him and his wife and his child,
because he must have employment in order to eat bread.
Mr. President, I do not wish to detain the Senate on this
matter, but I give notice that immediately after the vote on
the revenue bill I shall move that the Senate proceed to the con
sideration of the corrupt-practices act. If my distinguished
friends on the opposite side of the aisle want to conduct a fili
buster—or as they more politely and craftily put it, if they
“ want to take sufficient time to consider carefully and discuss
this important measure ”— we will give them an opportunity.
We will ascertain whether it is for the purpose of perfecting
the bill or whether it is for the purpose of killing time. It will
not take 24 hours to develop that fact, and only a few days to
satisfy the American people perfectly well what the purpose
of certain Republican leaders is in their hostility and opposition
to the passage of a corrupt-practices act.
58546— 16368
7
WASHINGTON I GOVERNMENT PRINTING OFFICE J 1916
ARMED MERCHANT SHIPS
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN T H E
1
SENATE OF THE UNITED STATES
MARCH 4 (legislative day of
MARCH 2), 1917
WASHINGTON
GOVERNMENT PRINTING OFFICE
1917
87001— 17147
SPEECH
OF
HON. R O B E R T L. OWEN
The Senate had under consideration the bill (II. R. 21052) authoriz
ing the President of the United States to supply merchant ships, the
property of citizens of the United States and bearing American registry,
with defensive arms, and for other purposes.
Mr. OWEN. Mr. President, it is ray purpose to support the
request of the President of the United States. I do so in the be
lief that the great body of the people of the magnificent State of
Oklahoma who sent me here desire that I should do so. I do
so because I believe a public exigency of the highest importance
requires it. I do so trusting in the i*epresentation made by the
President of the United States in his message to Congress a few
days ago. I place the utmost reliance on the words of the Pres
ident in asking for the means with which to protect our mer
chant ships. He said :
It is devoutly to be hoped that it will not be necessary to put armed
force anywhere into action. The American people do not desire it. and
our desire is not different from theirs. I am sure that they will un
derstand the spirit in which I am now acting, the purpose I hold near
est my heart and would wish to exhibit in everything I do. I am
anxious that the people of the nations at war also should understand
and not mistrust us. I hope—
Says the President—
that I need give no further proofs and assurances than I have already
given throughout nearly three years of anxious patience that I am the
friend of- peace and mean to preserve it for America so long as I am
able. I am not now proposing or contemplating war or any steps that
need lead to it. I merely request that you will accord me by your own
vote and definite bestowal the means and the authority to safeguard
in practice the right of a great people who are at peace and who are
desirous of exercising none but the rights of peace to follow the pur
suits of peace in quietness and good will— rights recognized time out
of mind by all the civilized nations of the world. No course of my
choosing or of theirs will lead to war. War can come only by the will
ful acts and aggressions of others.
Mr. President, before this unhappy war arose it was the
international law—and I think that neutrals are still compelled
under the rules of that international law to regard it now as the
international law— that merchant vessels, with or without con
traband, had and now have a free right to pass without being
subject to destruction without notice through the high seas:
that even those ships which carried contraband had and now
have a right before being summarily sunk to be visited, to be
examined, and an opportunity afforded to the crew of such
vessels for safe conduct to port before being sunk.
T am not unaware of the exigencies with which the Imperial
German Government is faced. The Imperial German Govern
ment can not command the high seas because of an ineffective
naval force. The Imperial German Government, feeling keenly
the blockade established by the superior naval force of the
British Empire, has declared it a necessity of war to disregard
the established international code and to carry on a submarine
warfare that shall be ruthless, and to sink ships without notice
2
87001— 17147
3
in a certain zone, armed or unarmed, contraband or not contra
band, with or without cargo.
THE
IN T E R N A T IO N A L
LAW
OF
N EU TRALS.
It was hoped a year ago that the United States had arrived
at an adjustment with the Imperial German Government. In
my own judgment the reservation of the Imperial German Gov
ernment that it reserved the right to carry on the submarine
warfare without notice to ships, to sink them without notice,
was a reservation that was not permissible or recognizable by
our Government under the international law governing neutrals
as it has been recognized prior to the breaking out of this great
controversy in August, 1914. W e can not change this law with
out violating our obligations as neutrals to other belligerents
and setting a precedent which may fatally affect our own future.
The President of the United States, in charge of the conduct of
the foreign affairs of the United States, found himself compelled
to deal with the Imperial German Government in numerous
cases in which American vessels were sunk in which American
citizens lost their lives, and lie was compelled, as the Chief
Executive of a great neutral power, to declare the duty of the
United States and the rights of the United States under inter
national law as it existed. He solemnly declared this law and
is compelled by the laws of neutrality to maintain it. The
President of the United States was not responsible for the ships
owned by individual Americans going from one port to another
upon business voyages, which they in the course of commerce
had the right under international law to make. It was not
contrary to but in accordance with international law that ships
should carry munitions no matter if distasteful to any nation
affected by it. The unfortunate thing for the German Empire
was that because she could not command the seas this law gave
an advantage to Great Britain and her allies because they
could in greater degree command the seas.
The President was therefore compelled to take his course to
defend the rights of the Government of the United States
and of her citizens under international law. Having taken
this step in pursuance of international law, the ques
tion with which he is confronted, as our representative, is,
Shall he withdraw from the assertion of the rights of
the United States as a great neutral or shall he stand
firmly upon those rights, not changing them in the midst of
this gigantic conflict, but observe them as he is obliged to
do as a neutral? If lie tried to change them, he would violate
our neutrality with Great Britain and her allies and give them
a serious grievance under international law against us. The
question then is, when he is in this position under international
law, whether the American people will hold up his hands or
whether they will not do so.
In my judgment it would be a great national calamity if the
people of the United States and if the Congress of the United
States should refuse to hold up the hands of the Chief Execu
tive of this Nation under these painful circumstances. The
Imperial German Government has notified the world that all
neutral ships of commerce, even if unarmed, free from contra
band, loaded with passengers on lawful voyages, innocent of
wrongful intent to anyone, will be sunk on the high seas with
out notice, without a chance for their passengers to escape
87001— 17147
4
Avith their lives. That Government seems determined to force
us to acknowledge her right in the midst of this conflict to
change the law of nations and bring us in conflict with her an
tagonists. In that exigency the President of the United States
calls upon Congress and says:
I ask a sufficient credit to enable me to provide adequate means of
protection where they are lacking, including adequate insurance against
the present war risks.
The question for Congress is. Shall that reasonable request
be granted or shall it not?
Mr. President, if prayers or sacrifice could adjust this gi
gantic conflict in Europe we would all be glad, I think, to make
our just contribution to secure peace on that torn and unhappy
continent; but this conflict will only terminate by the triumph
of the strongest arms. It is a conflict unrelenting, ruthless,
carrying on means of destroying human life, gigantic, novel,
and of extraordinary efficiency in the engines of destruction.
WE
*
.
,
j
M U S T C O N S ID E R
THE
FUTURE.
It is \r
\ell for us, in considering the eventualities that will
flow in the immediate future from the triumph of one or the
other of these titanic forces to consider what these great powers
in conflict stand for in relation to the United States if one or
the other be victorious. On the one side I believe are ranged,
in many forms, great democracies—Great Britain with her
colonies and dependencies. France and Italy and Belgium and
their colonies. Russia and her democratic people. On the other
side are ranged many military autocracies, those of Germany,
of Austria, of Bulgaria, of Turkey, ruling by so-called “ divine
right ” and by organized military power and not “ by the con
sent of the governed,” except by the involuntary consent which
dare not oppose superior force. On the one side are the ideals
of democracy, of the right of the people to rule themselves
justly and with liberty under the principle declared by Abra
ham Lincoln as expressed in his message to Congress, in which
he said, “ Let us have faith to believe that ‘ right makes
might.’ ”
And on the other side is the military ideal that “ m i g h t
MAKES RIGHT.”
TH E
D O C T R IN E
“ M IG H T
MAKES
R IG H T ” ?
Mr. President, the doctrine that lies at the base of military
autocracy is a fixed ideal of power alone, a permanent ambition
to rule by force of the cannon’s mouth and machine gun, an
ambition long maintained and without the shadow of a doubt
as to its significance. I call your attention to the bronze
cannon on the north entrance of our War Department Building,
a great cannon whose name is “ Le Marechal le Due d’Humieres,”
cast by the Bourbons nearly two centuries ago, and on its face
in three different mottoes is this false doctrine that “ might
makes right.”
At the mouth of the cannon you will find these words: “ Le
passe par tou s”—“ the passway through e\erything” —the can
non’s mouth the passway, it may be, through justice and mercy
and innocence and righteousness and industry and honor—
“ Might makes right.”
On the base of that cannon you will find the words, “ Net*
pluribus impar ”— “ not unequal to many.” The cannon com
mands the people, and is “ not unequal to many.” It can slay
87001— 17147
5
and dominate and tax millions without the consent of the gov
erned. On the body of that Bourbon cannon you will find the
phrase, “ Ultima ratio regain ”— “ the final argument of kings.”
When the people argue that right is right, they hear the final
argument of kings—the cannon’s roar—and learn that m i g h t
MAKES RIGHT.
Do you think that this is merely a romatic suggestion cast
in bronze in honor of le Due d'Humieres? Not at all. The
doctrine of armed power over the people with or without thenconsent is at the base of the German Empire to-day.
This was the doctrine of Frederick the Great and of his
father, the Great Elector, and this is the doctrine of William,
the present Emperor.
LOCAL
DEM OCRACY
R U I.E D
BY'
AUTOCRACY.
It is true that after the Franco-Prussian War Bismarck made
many concessions to the democratic sentiment of the German
people in the management of their local affairs and developed
a very high degree of democratic efficiency through various
forms of municipal ownership, so that in a city like Munich
the people not only controlled, through their own municipal
powers, such as city water works, city gas works, electric light,
heat, and power plants, city hospitals, city schools, city tram
ways. but city bakeries, city packing houses, and city breweries.
The industrial conditions of Germany have been wonderfully
stimulated by democratic cooperation among the people, stimu
lated hy .tlie Imperial Government, and the Imperial Govern
ment has provided many forms of democratic cooperation, such
as State insurance against old age, industrial accidents, and
diseases, vocational education, rural-credits associations, co
operative marketing and buying, the cartel system, State-owned
railroads, telegraphs, telephones, and parcel post, etc.
^
The Imperial Government has thus greatly benefited the de
velopment of the German people and is entitled justly to very
great credit for this service rendered to the people by using the
powers of the people in the interest of the people.
This has led to a warm attachment of the people to their
Imperial Government, and justly so; it has led to a magnificent
development of the German people which is the admiration of
all of the lovers of men, but, nevertheless, along with this
splendid internal democratic organization there has remained
the dominance of the German Empire by Prussia and the
dominance of Prussia by the House of Hohenzollern, claiming
to rule by divine right—the right to rule the people with or
without their consent, the right to command the army and the
navy, and the Emperor has become surrounded by a tremendous
highly organized military power of which he is made, either
willingly or unwillingly, the spokesman.
It was this group, I believe, who forced the sword into Wil
liam’s hand and compelled him to sign the order of mobiliza
tion the 1st of August, 1914.
THE
SECRET
TREATY
OP
V E R O N A —- W O R L D -W I D E
DEMOCRACY
THREATENED.
I call your attention again to the secret treaty of Verona,
which l had printed in the C o n g r e s s i o n a l R e c o r d on April 25,
1916, for the purpose of attracting the attention of this country
to the policy which lies at the basis of these great contending
powers. This treaty, the secret treaty of Verona, was framed
by Metternich, of Austria, in 1822, after Napoleon had seized
87001— 17147
6
the organized powers of democracy and turned them into art
engine of monarchy which out-Heroded Herod and was over
thrown.
Listen to the philosophy and historical admonition of the
secret treaty of Verona:
•
.
i
i
'
The undersigned, specially authorized to make some additions to the
treaty of the Holy Alliance, after having exchanged their respective
credentials, have agreed as follows :
A r t i c l e 1. The high contracting powers being convinced that the sys
tem of representative government is equally as incompatible with the
monarcliial principles as the maxim of the sovereignty of the people
with the divine right, engage mutually, in the most solemn manner to
use all their efforts to put an end to the system of representative gov
ernments, in whatever country it may exist in Europe, and to prevent its
being introduced in those countries where it is not yet known.
A r t . 2 . As it can not be doubted that the liberty of the press is the
most powerful means used by the pretended supporters of the rights of
nations to the detriment of those of princes, the high contracting parties
promise reciprocally to adopt all proper measures to suppress it, not
only in their own States hut also in the rest of Europe.
The King of Prussia and the Emperor of Austria were the
real autocratic monarchs behind this deadly compact to destroy
the democracies of the world and establish “ world power ” for
themselves and their allies as the military autocrats of mankind.
Mr. LEWIS. Mr. President, will the Senator permit me to
ask him a question?
The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Illinois?
Mr. OWEN. I yield to the Senator.
Mr. LEWIS. Would the Senator forgive me for merely call
ing his attention, in support of his very classic and historic
address, to the fact that the very treaty to which he alludes
had for its purpose the preventing of Spain and Portugal, which
had broken out then into the form of a republic, from emulating
the form of this, the United States of America, in both its
democracy and republicanism of form, to prevent the spreading
of our doctrines to Europe?
Mr. OWEN. Mr. President, this treaty continues, in the
fourth article, as follow s:
A r t . 4 . The situation of Spain and Portugal unite unhappily all the
circumstances to which this treaty has particular reference. The high
contracting parties, in confiding to France the care of putting an end
to them, engage to assist her in the manner which may the least compromit them with their own people and the people of France by means
of a subsidy on the fart of the two empires of 20,000,000 of francs every
year from the date of the signature of this treaty to the end of the war.
Spain had established a limited monarchy based on recogni
tion to some degree of the rights of the people. These nations
sent armies, under Louis XVIII, into Spain for the purpose of
reducing this limited monarchy to an absolute monarchy, with
the same prince on the throne. The contest was absolute
military autocracy against any form of democracy. They sent
an army into Italy also—an Austrian army—to reduce a like
limited monarchy to an absolute monarchy, the same issue of
absolute military autocracy against the principle of democracy,
and then they proposed after succeeding in Spain and Italy to
send their armies to the Western Hemisphere for the purpose of
reducing all revolting colonies of Spain and Portugal, overthrow
ing western democracy and establishing absolute military autoc
racy and then it was that Great Britain, the greatest of all
democracies, through Canning, the prime minister, notified the
Government of the United States of this dangerous purpose, and
87001— 17147
■
I
notified the Holy Alliance, so-called, that Great Britain would
regard with disfavor any .attempt by the Holy Alliance to reduce
the revolting colonies of Spain and Portugal in the Western
Hemisphere. The matter was considered by Thomas Jefferson,
and he regarded it as the most important occurrence that had
transpired since the establishment of the United States of
America. It led to the doctrine, the so-called Monroe doctrine,
in which President Monroe sent a message to Congress in which
it was stated that the United States would regard it as an un
friendly act for any European power to attempt to establish its
system of government on the Western Hemisphere, and that
prevented the Holy Alliance from subjecting the Western Hemi
sphere to the powers of absolute monarchy which would have
destroyed the democracies of the Western Hemisphere at their
birth.
VO X BERNHARDT.
Mr. President, in October. 1911, there was published a work
of profound significance by Gen. Friederich von Bernhardi, trans
lated by Allan H. Powles, entitled “ Germany and the next war.”
I think it is generally understood and conceded that Gen. von
Bernhardi represents the view of the military powers of Ger
many, that he may be fairly called a spokesman for that group,
and for that philosophy, if we may call it philosophy. Let me
read just a few words from Gen. von Bernhardi. He said that
“ A rude shock was needed to awaken the German people.” to
awaken the warlike instincts of the German people, and compel
them to show their military strength. He speaks of them as
“ a peace-loving, almost too peace-loving, nation.” He speaks of
the good-natured character of the German people, and with that
I agree, but he says that it is necessary to move them to war.
He says:
I must try to prove that war is not merely a necessary element in
the life of nations but an indispensable factor of culture in which a
true civilized nation finds the highest expression of strength and
vitality.
He says further:
Our people must learn to see that the maintenance of peace never
can or mav be the goal of a policy. The policy of a great State has
positive aims. It will endeavor to attain this by pacific measures
so i.ong as that is possible and profitable.
He says further:
The inevitableness, the idealism, and the blessing of war as an
indispensable and stimulating law of development must be repeatedly
emphasized. The apostles of the peace idea must be confronted with
Goethe’s manly words :
“ Dreams ot a peaceful day?
Let him dream who may !
‘ W a r’ is our "allying cry,
Onward to victory ! ”
Mr. President, he says:
The Great Elector laid the foundations of Prussia's power by suc
cessful and deliberately incurred wars. Frederick the Great followed
the example of his glorious ancestors. He noticed how his State occu
pied an untenable middle position between the petty States and the
great powers, and showed his determination to give a definite char
acter (decider cet Hre) to his anomalous existence: it had become
essential to enlarge the territory of the State and carnger la figure de
la Prusse, if Prussia wished to be independent and to bear with
honor the great name of k i n g d o m .
The King made allowance
for this political necessity and took the bold determination of chal
lenging Austria to fight. None of the wars which he fought had been
S7001— 17147
8
forced upon him,; none of them did he postpone as long as possible.
He had always determined to be the oppressor—
Frederick the Great had always determined to be the aggres
sor, and he still is the idealized leader of the military group
. that now controls the German and the Austrian Empires, and we
were given a testimonial of this idealism by the United States
being presented by Wilhelm recently with a figure of Frederick
the Great, which stands in front of our War College.
He had always determined to be the oppressor, to anticipate his
opponents, and to secure for himself favorable prospects of success.
Mr. President, this book glorifies war. It has a chapter en
titled “ World power or downfall,” and the outline of the next
war is indicated, the forces that will take part in it, the part
that must be played by the German Empire.
There is a wide distinction between the German people and
their autocratic leadership that has led them to ruinous war.
Mr. President, I can hardly say whether I feel a keener sym
pathy for the unhappy people of Germany or the distressed
people of France and Great Britain. The German people are by
nature, outside the military autocrats, peace loving, good natured, lovable— the people of France and of Great Britain are by
nature even more peace loving and lovable and are moved by a
magnificent patriotism and spirit of joyful self-sacrifice and
enthusiasm—but when Wilhelm gives the order for mobilization
and for war the people of both countries are thrown into a
frenzy of war, and the insane passion of war finds expression
in unnumbered excesses and violence beyond all belief. When
the order of mobilization was given by the Emperor of Germany
it mattered not how peace loving or good natured or lovable the
people w ere; they had no choice whatever but to respond to the
battle cry. The German citizen had no choice but death except
to march to the trenches under the command of this military
autocracy, and, Mr. President, if this military autocracy wins
in this war, if this military autocracy by virtue of this war can
dominate the democracies of France and Italy and Great Brit
ain and Europe, it will become, indeed, the “ world power,”
idealized and prayed for by the military autocracy, and our
country, from a peaceful, industrial, happy democracy, where
liberty is idealized, may by military force be driven to become a
part of a great military machine, controlled by the same forces
which are in control now of the central Empires. Mr. Presi
dent, if war does come by virtue of our sustaining our neutral
rights, I shall be reconciled in the belief that at least the United
States has at last thrown her great powers on the side of de
mocracy. on the side of liberty and justice and mercy and
humanity, on the side of the doctrine that “ right makes
might ” and against the infinitely pernicious doctrine that
“ might makes right.”
S7001— 17147
o
64th Congress 1
2d Session
SENATE
j
( D ocument
j
No. 737
Withdrawing Power from Federal Courts to
Declare Acts of Congress Void
AN ADDRESS
DELIVERED AT THE AUDITORIUM IN OKLAHOMA CITY,
,
OKLA., JANUARY 27, 1917
By
H on.
ROBERT L. OWEN
U n it e d S t a t e s S e n a t o r
P R E S E N T E D B Y M R . SH E P P A R D
F ebruary
2 7 , 1 9 1 7 .— Ordered to be printed
WASHINGTON
GOVERNMENT PRINTING OFFICE
1917
SENATE RESOLUTION NO. 383.
[REPORTED BY MR. CHILTON.]
I n t h e S e n a t e o f t h e U n it e d S t a t e s ,
March 2, 1917.
Resolved, That the manuscript submitted by the Senator from
Texas (Mr. Sheppard), on February twenty-seventh, nineteen hun
dred and seventeen, entitled “ Withdrawing from the Federal Courts
the Power to Declare Acts of Congress Void,” an address by Senator
Robert L. Owen, be printed as a Senate document.
Attest:
J a m e s M. B a k e r ,
Secretary.
2
W IT H D R A W IN G P O W E R FROM F E D E R A L C O U R TS TO D E C L A R E
ACTS OF C O N G R ESS V O ID .
By Senator R obert L. O w e n .
Oklahoma City, Okla., January 27, 1917.
L a d ie s a n d G e n t l e m e n , F e l l o w C it iz e n s o f O k l a h o m a :
I
come to speak to you on a matter which I regard as of very great
gravity. It is the question of withdrawing from the Federal courts
a power which they have long been permitted by Congress to exercise,
to declare acts of Congress void as unconstitutional.
This country has reached a point where public opinion has slowly
come to the conclusion that the refuge of monopoly is to be found in
the Federal courts. This country has perceived m any acts intended
to protect human life, intended to safeguard the mass of men, nullified
b y the Federal judiciary.
Every monopolist and his attorney, actual, hopeful, or expectant
[laughter], will swear by the Federal courts and the Constitution as
by the Arc of the Covenant and rush to its defense like the Sons of
Levy, especially when the Constitution is not being assailed but being
properly interpreted.
I have demanded that Congress should exercise its plain, conceded,
constitutional right and withdraw from the Federal courts the power
to declare acts of Congress unconstitutional or void on grounds of
public policy. [Applause.] I have made this demand because
Congress can not otherwise protect the common people against
predatory monopoly. [Applause.]
Congress can not otherwise furnish the American people the means
by which to adjust the great questions arising between capital and
labor, great questions affecting the business, political, moral, and
physical life of the Nation.
1 have, therefore, desired, as one of the public servants of Okla
homa, to be permitted to advise the people of this State to instruct
their Representatives in Congress and in the Oklahoma Legislature
to support m y demand for the control of the Federal judiciary, if the
people of Oklahoma wish to abate the high cost of living and to en
joy fully their inalienable and indefeasible rights of self-government.
One of the most skillful special pleaders in Oklahoma, a gentle
man very attractive socially, of considerable learning, and of great
oratorical power, has seen fit to throw himself at the head of the
Sons of L evy in defending the Ark of the Covenant, which being inter
preted means to defend the alleged right of nine learned lawyers, ap
pointed for life, b v previous administrations, and out of sympathy with
the succeeding administration or with national public opinion but sit
ting on the Federal bench to nullify and abort the legislative power
3
4
*
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
of a hundred million people. In a burst of beautiful eloquence, he
quotes the H oly Scriptures as the clarion call, and in the words of
tne Prophet Joshua, proclaims: “ As for me and m y house, we will
serve the Lord.” [Laughter and applause.]
In answer to this ringing challenge, I answer: “ I am willing to
serve the people, the common people, the commonest kind of people,
and let them judge who the Lord is the Sons of L evy serve.”
In order that you m ay clearly understand what it is I have pro
posed, and why, I present to you the following resolution:
Whereas the Constitution of the United States gives no authority to any judicial
officer to declare unconstitutional an act which has been declared constitutional
by a majority of the Members of the United States Senate and of the House of Rep
resentatives and by the President of the United States, who, on their several oaths,
Lave declared the opinion in the passage of such act that it is constitutional; and
Whereas in the Constitutional Convention, in which the Constitution of the United
States was framed, the motion was three times made to give to the Supreme Court,
in some mild form, the right to express an opinion upon the constitutionality of
acts of Congress, and was three times overwhelmingly rejected; and
Whereas such assumption of power by the Federal courts interferes with the reason
able excercise of the sovereignty of the people of the United States and diverts it
from the hands of the representatives of the people in Congress assembled to a tri
bunal appointed for life and subject to no review and to no control by the people
of the United States, and is therefore against a wise public policy; and
Whereas the declaration by any Federal court that the acts of Congress are uncon
stitutional constitutes an usurpation of power: Therefore be it
Resolved by the Senate and House of Representatives of the United States oj America
in Congress assembled, That from and after the passage of this act Federal judges
are forbidden to declare any act of Congress unconstitutional.
No appeal shall be permitted in any case in which the constitutionality of an act
of Congress is challenged, the passage by Congress of any act being deemed conclu
sive presumption of the constitutionality of such act.
Any Federal judge who declares any act passed by the Congress of the United
States to be unconstitutional is hereby declared to be guilty of violating the consti
tutional requirement of “ good behavior” upon which his tenure of office rests and
shall be held by such decision ipso facto to have vacated his office.
Sec. 2. That the President of the United States is hereby authorized to nominate
a successor to fill the position vacated by such judicial officer.
(After resolution there was much applause.)
This resolution I intend to amend so that if any statutory Federal
court thinks an act repugnant to the Constitution he shall certify
the act to Congress and suspend final action on the case until further
instructed by Congress on tne point the court may raise and leave the
appeal from State Courts as it now stands. In this way a safeguard
will be provided against a possible inadvertence in any act of Congress.
The meaning of this resolution is that when inferior Federal judges,
such as district, circuit, and other statutory judges., interpret an act
which Congress has passed, they shall deem the passage of the act
as establishing a conclusive presumption of the constitutionality of
such act under penalty of vacating their office.
The resolution means that the Supreme Court will have no oppor
tunity to pass on the constitutionality of an act of Congress under
its appellate jurisdiction, which is the only jurisdiction in which such
questions can arise, except from State Courts and under which is
no probable danger to the public interest. Congress has the consti
tutional power to withhold from the appellate power of the Su
preme Court the right to pass on the constitutionality of the acts
of Congress. [Applause.]
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
5
The McCardle case, 1868: The Supreme Court decided in that case
by unanimous opinion that Congress had that power. The Congress
has that power, and the time has come for Congress to exercise that
power.
The Supreme Court itself has many times sustained this interpre
tation, as in Wiscart v. Dauchey, 3 Dali., 321 (1796); Duroussean v.
U . S., 6 Cranch., 307 (1810); U . S. v. Gordon, 7 Cranch., 287 (1813);
Daniels v. C., R . I. & P. R . R ., 3 W a ll., 250 (1865); In re McCardle,
7 W a ll., 510 (1868); N at. E x . Bk. v. Peters, 144 U . S ., 570 (1891);
Col. C. C. M. Co. v. Turck, 150 U . S., 138 (1893).
CONGRESS AND THE SUPREME COURT NOT COEQUAL.
The law schools have been teaching thousands of boys to be law
yers, have been teaching them that the Constitution established three
coordinate, coequal branches of the Government. This is a funda
mental error, because there were established three coordinate but
not coequal branches of Government. The sovereign law-making
power of the people, as far as they delegated such powers, were
vested expressly in Congress, using these words:
To make all laws which shall be necessary and proper for carrying into execution
the foregoing powers and all other powers vested by this Constitution in the Gov
ernment of the United States or in any department or officer thereof.
Congress, b y statute, established a Supreme Court, the executive
departments, and fixed their powers in accordance with the Consti
tution and in accordance with the power vested in Congress as the
law-making power.
Congress fixed the number of judges on the Supreme Court. It
can add to that number now or it can diminish the number by an
act of Congress.
Congress fixed the compensation of the Supreme Court.
Congress, through the Senate branch, confirms a justice of the
Sup reme Court before he can take his seat.
Congress can impeach the Supreme Court and remove that court
from office. [Applause.]
Congress, under the Constitution, was expressly charged with fixing
the appellate jurisdiction of the Supreme Court— and that’s all the
jurisdiction they have worth mentioning.
The Supreme Court has only original jurisdiction in all cases affect
ing ambassadors, other public mi.usters, and consuls, and those in
which a State shall be a party. Only about one such case arises in
10 years. A ll other jurisdiction is appellate. One case in about
5,000 is under original jurisdiction, about 4,999 cases under appellate
jurisdiction.
Congress has the duty imposed upon it under the Constitution to
fix that appellate jurisdiction and make such exceptions and such regu
lations as Congress sees fit.
THE POWERS OF CONGRESS.
I am talking now of the power of Congress under the Constitution
without changing the Constitution, without modifying its meaning,
without putting a strained interpretation upon it. I am talking now
6
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
of the power. I shall talk presently of the duty of exercising that
power and give you the reasons why I think the time has come to
exercise it.
The Constitution, Article I, section 1, declares the following powers
vested in Congress. I wish you would listen to these powers of Con
gress :
All legislative powers herein granted shall be vested in the Congress of the United
States, which shall consist of a Senate and House of Representatives.
It gave the House of Representatives and the Senate the power
to impeach any officer of the United States, including judges. It
gave the Senate the power to sit as a high court of impeachment over
judges. It gave the Senate the right to advise with the President of
the United States and confirm the appointment of all officers of the
United States, including judges.
It gave each House the authority to determine its own member
ship and its own proceedings.
It exempted the Members of the Senate and the House from arrest
by judges except for treason, felony, breach of the peace.
It provided that they should not be questioned in any place
about any speech or debate in either House, not even by judges.
It gave Congress the power to lay and collect taxes, duties, im
posts, and excises; to pay the debts and pay for the common defense
and general welfare of the United States.
To borrow money. It has borrowed billions of dollars.
To regulate commerce. It has regulated hundreds of billions of
commerce.
To establish a uniform rule of naturalization and uniform laws on
the subject of bankruptcies.
To coin money, to regulate the value thereof and of foreign coin,
and fix the standard of weights and measures.
To punish counterfeiters.
To establish post offices and post roads.
To grant patents and copyrights. It has granted over a million
patents.
To constitute tribunals inferior to the Supreme Court.
To define and punish piracies and felonies committed on the high
seas and offenses against the law of nations.
To declare war, grant letters of mark and reprisal, and to make
rules concerning captures on land and water.
To raise and support armies.
To provide and maintain a navy.
To make rules for the government and regulation of the land
and naval forces.
To provide for calling forth the militia to execute the laws of the
Union, suppress insurrection, and repel invasions.
To provide for organizing and disciplining the militia, and for
governing such part of them as m ay be employed in the service of
the United States.
To exercise authority over all places purchased by Congress, carry
ing into execution the foregoing powers and all other powers vested
b y the Constitution in the Government of the Unitea States or in
any department or officer thereof, including the judicial department.
The Constitution expressly provides that Congress shall not do
certain things, for instance:
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
7
It forbade interference with the slave trade up to 1808.
It forbade the suspension of the writ of habeas corpus except
where the public safety required it.
I t forbade a bill of attainder or ex post facto law.
I t forbade a capitation or other direct tax on the States unless in
proportion to the census.
It forbade an export duty.
I t forbade a preference to be given to the port of one State over
another.
I t forbade expenditure of money except by lawful appropriations.
It forbade titles of nobility.
And the people refused to ratify that Constitution until the Bill
of Rights in the 10 amendments were agreed to be added to that
Constitution and made a part of it. In that Bill of Rights were
reserved the various rights of the people, which Congress was charged
with the duty of defending, as follows:
The first, free religion. The gentlemen who wrote that Constitu
tion forgot to put that in. [Applause.]
Free speech.
A free press. The gentlemen who wrote that Constitution forgot
to put that in. Thomas Jefferson demanded that they go in.
Free right of assembly.
Free right of petition for redress of grievances. The gentlemen
who wrote that Constitution forgot to put those things in.
The right of the State to have troops.
The right of the people to keep and bear arms.
The right of the people to be free from the quartering of soldiers
upon them.
Freedom from unlawful searches and seizures.
Freedom from arrest for crime except on indictment.
The right of life, liberty, and property, not to be interfered with
except by due process of law.
The right against taking private property for public use, without
just compensation.
The right for speedy public trial by an impartial jury. The gen
tlemen who wrote the Constitution forgot to put all those things in. .
And when they came home and saw Thomas Jefferson they heard
from him, and others like him, and they heard from the people of the
country, too. They could not have nad the Constitution ratified
except for that Bill of Rights, put in this Constitution.
The right to be informed of the nature of the accusation against a
citizen.
The right to be confronted with witnesses against a citizen.
The right of compulsory process for obtaining witnesses.
The right to have counsel in the defense of the rights of a citizen.
The right to a trial by jury.
The right against excessive bail, excessive fines, or cruel or unusual
punishment.
The gentlemen who wrote this Constitution forgot to put those
things in, but this Bill of Rights safeguarded the people, and it was
on the demand of the people and of men like Thomas Jefferson,
who believed in the people and stood for them, that this Bill of
Rights went into this Constitution.
[Applause.]
8
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
THE PEOPLE ALONE CAN CONTROL CONGRESS.
I refer to that because it is a part of this argument.
My friend, Judge Charles B . Stuart, quotes with great zeal Alex
ander Ham ilton, Gerry, and others, who didn’ t believe in democracy,
who regarded “ all political evils as due to the turbulence of the
democracy.”
Alexander Hamilton believed in a President appointed for life,
with the right to appoint governors of States for life, consisting of
those who were representing the aristocracy of the country, in order
that the people might be held in subjection and governed accord
ing to law. [Laughter and applause.]
THE PEOPLE CONTROL CONGRESS.
These instructions which I have read to you were laid upon the
Congress b y the people, and the people retamed in their own hands
all powers not expressly granted to Congress. Congress was charged
with the lawmaking power of the people, subject to the people
themselves alone.
And the people took every pains in this Constitution to require
the entire House of Representatives and one-third of the Senate,
every two years, to come back before the people and give an account
of their stewardship, and receive the approval of the people before
they continued the duty of making laws for the people. In that
way the people kept in their own hands the sovereignty which was
declared vested in them by the Bill of Rights in every one of the 48
States in this Union. Read these constitutions.
On the 31st of July, 1911, I put in the Congressional Record an
extract from the constitution of each of the 48 States on this very point,
because at that time, five years or more ago now, when the Standard Oil
decision was rendered I made a demand for the control of the Federal
judiciary, and I put in the record then the power which the people of this
country had retained over the State judiciary. The people kept control
of Congress, and when Congress passes a law in pursuance of the
Constitution, the Congress itself declares that law to be the Supreme
law of the land and does not say that the law may be declared void
by the judges. [Much applause.]
Unhappily, Congress not having in express terms forbidden this
unwise practice Congress m ay be fairly held to have acquiesced in it.
The Constitution requires every Senator and every Representative
in Congress to take a solemn oath to support faithfully and truly the
Constitution of the United States.
W hen, on their oaths, the members of the House of Representatives
of the United States, and the United States Senate, with the approval
of the Vice President of the United States, who presides over the
Senate of the United States, and with the approval of the President
of the United States, passes an A ct, a conclusive presumption arises
that the act is constitutional, and this presumption can only be
overthrown by the disapproval of the people of the United States,
who will return a new Congress and correct any unconstitutional or
impolitic acts of an expiring Congress. [Applause.]
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
9
THE SUPREMACY OF THE LEGISLATIVE POWERS OF OTHER NATIONS.
No civilized nation permits the judges on the bench to declare un
constitutional or void the acts of the Parliament. Great Britain, in
1700, February 6, declared that judges should hold their office “ while
they behaved themselves w e ll/’ subject alone to removal by resolu
tion of Parliament. That is what 1 proposed in 1911 for the United
States. I thought the time had then come for that rule in the United
States.
France does not permit the laws of Parliament to be set aside b y the
judges.
Italy, in its written constitutional law, provides that the judges
shall not set aside an act of the Parliament.
It is the written law of Austria.
I t is the written law of Germany.
It is the written law of Belgium.
I t is the written law of Denmark.
I t is the written law of Australia.
It is the written law of New Zealand.
I speak of these things because the civilized world which has con
sidered government hy the people, having all agreed upon this doc
trine, there must be sound reason for it.
It is not an accident.
It is written out of the blood and tears of centuries. [Applause.]
It is true that in 1788 several lawyers of distinction (and privilege)
contended that the contemplated Supreme Court of the United
States should have the right to declare acts of Congress unconstitu
tional. Judge Stuart quotes several of them.
H e quotes Daniel
W ebster; he quotes Oliver Ellsworth; he quotes John Marshall and
Alexander Plamilton. A ll I care to say now is that the selfish
opinions of such lawyers of aristocracy were no more convincing
then than they are now. [Applause and laughter.]
Oliver Ellsworth, and Daniel Webster, and Alexander Hamilton
and John Marshall did make that argument to the great property
holders of their States with a view to getting their support for the
Constitution, because the Constitution needed friends at that time,
but John Marshall, who spoke equally well on either side of the case,
defended the Constitution against the charge of Patrick Henry that
it would establish a judicial despotism by the following remarks. I
want you to listen to John Marshall because he is the patron saint
of all the gentlemen who differ with me about this question. Here
is what John said. I will not call him by a more familiar name.
[Laughter.]
Congress is empowered to make exceptions to the appellate jurisdiction as to law
and fact of the Supreme Court. These exceptions certainly go as far as the legislature
may think proper for the interest and liberty of the people. (Elliott’s Debates, vol.
3, p. 560.)
The plain truth is, the people of the American Colonies who lived
under the English practice recognized as a fixed principle of govern
ment that the judiciary is subject to the legislative power of the
people. The English law that I referred to a moment ago was to
that effect, and that law was the law of the Colonies, which they
perfectly well understood. It is true that Rhode Island did about
this time pass an act which its supreme court declared unconstitu
■
I
10
WITHDRAW ING POWER TO DECLARE ACTS OF CONGRESS VOID.
tional. I t is also true that the legislature put the court out of office
for that reason.
It is also true that two or three other States had a similar expe
rience, and the court was rebuked by the people for its conduct in
this matter.
The Legislature of New Hampshire removed its supreme court
four times on the ground of policy.
On July 31, 1911, in Congress, and before the Bar Association of
Oklahoma on the 23d day of December, 1911 (vol. 5), I explained
the extraordinary pains the people of the United States have taken
to prevent the usurpation of their power by the judges.
Now, listen to this. Here is what the people at home think—
here is what the common people think; you will find the details in
Volume 5:
THE
PEOPLE
CONTROL
THE
STATE
JUDICIARY.
Forty-eight States have two ways of removing judges by impeach
ment, and either by a short tenure of office or by resolution of the
legislature. Thirty-two States have three ways of removing judges.
Thirty-two States m ay remove judges by resolution of the State
legislature.
Seven States have four ways of removing judges, viz,
impeachment, legislative recall, short tenure of office, and popular
recall.
They started the popular recall in Oregon, first, because of the
gross aggression of the railroad interests and other private interests
of the State, which had corrupted practically their whole govern
ment in the interest of property against the people. The recall
was applied to all officials; no exception was made as to judges. The
judges of that State now would compare favorably with those of any
other State. And they did the same thing in California recently
for the same reason, iliram Johnson making his campaign for gov
ernor and winning overwhelmingly, when the chief issue was the
recall of judges and on the slogan that “ the Southern Pacific has got
to go out of the governing business in California.” D o not make
any mistake about this matter.
Forty-five States recall judges b y a short tenure of office and all the
States, the 48 States, have the right of impeachment. No one
ever hears any complaint of our State judiciary for the very reason
the judiciary is in sym pathy with the people and serve them accept
ably.
Oklahoma, as we all know, has reason to be especially proud of
her supreme court. Its members are nominated and elected by the
people and the justices of the supreme court are in sym pathy with
the people.
THE PEOPLE WISH THE FEDERAL JUDICIARY RESTRAINED.
The people are overwhelmingly opposed to the usurpation of
legislative power b y the Federal judiciary appointed for life.
Nobody knew better than John Marshall himself that the Supreme
Court had no right to declare an act of Congress void under the Con
stitution, for in the case of W are v. Hilton, John Marshall stated—
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
11
now listen to the patron saint of the opposition— this is John,
John Marshall whom I am quoting:—
The legislative authority of any country can only be restrained by its own municipal
constitution; this is a principle that springs from the very nature of society, and the
judicial authority can have no right to question the validity of a law unless such
jurisdiction is expressly given by the Constitution.
The word “ municipal” is used in the broadest sense.
This is John Marshall. And nobody pretends that there is any
express provision in the Constitution of the United States conferring
any such authority.
The highest authority on English and American law has been Sir
William Blackstone. H e is the one that all law clerks, law schools,
and law students swear b y. Listen to Sir W illiam. He says:
When the main object of a statute is unreasonable the judges are not at liberty to
reject it, for that were to set the judicial power above that of the legislature, which
would be subversive of all government. (Blackstone’s Commentaries, p. 85, sec. 3.)
I have to talk in the language of the lawyers, otherwise I would
not perhaps be understood b y them.
A V o i c e . Judge Stuart forgot to s a y that.
Senator O w e n . Perhaps he had not recently read Blackstone.
Thomas Jefferson had a view full of apprehension after John
Marshall came on the bench.
The Congress did not rebuke Marshall for the Marbury v. Madison
case, and Thomas Jefferson didn’t see the way clearly how to protect
the country against that aggression, and this is what he said:
It has been my opinion that the germ of dissolution of our Federal Government is
in the constitution of the Federal judiciary, an irrepressible body working like gravity
by day and by night, gaining a little to-day and a little to-morrow and advancing
with a noiseless step like a thief, over the field of jurisdiction, until all shall be usurped.
(Federal Law Journal, vol. 66, p. 293.)
I beg you to observe that I quote the page whenever I make a refer
ence. Judge Stuart neglected to do that.
Evidently Jefferson did not observe the power of Congress to limit
the appellate jurisdiction of the court. If he had, he would not have
been afraid at all. The country is in no danger on earth; the Con
stitution is all right, doesn’t have to be changed; it only has to be
exemplified and decently interpreted and made to accomplish the
ends for which it was intended.
Andrew Jackson is another authority I want to call your attention
It is maintained by the advocates of the bank that its unconstitutionality, in all
its features, ought to be considered as settled by precedent and by the decision of the
Supreme Court. To this conclusion I can not assent. * * * If the opinion of the
Supreme Court covered the whole ground of this act, it ought not to control the coor
dinate authorities of this Government. The Congress, the Executive, and the court
must each for itself be guided by its own opinions of the Constitution. Each public
officer who takes an oath to support the Constitution swears that he will support it
as he understands it and not as it is understood by others. It is as much the duty of
the House of Representatives, of the Senate, and of the President to1
decide upon the
12
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS .VOID.
constitutionality of any bills or resolutions which may be presented to then; for pas
sage or approval, as it is of the Supreme Court, when it may be brought before them
for judicial decision. The opinion of the judges has no more authority over Congress
than the opinion of Congress has over the judges; and on that point the President is
independent of both. The authority of the Supreme Court must not, therefore, be
permitted to control the Congress or the Executive when acting in their legislative
capacities, but to have only such influence as the force of their reasoning deserve.
(Senate Journal, July, 1832, p. 451.)
President Jackson overlooked the fact that Congress has the power
to impeach the President and the Supreme Court and that Congress
therefore exercised the sovereign law-making power of the people,
but he states correctly that “ the Supreme Court must not be per
mitted to control the Congress."
M y friend, Judge Ames, I fear did not clearly understand Presi
dent Jackson’s view in his remarks on “ Jackson’s d a y " when he
quoted him as authority against m y position.
President Jackson overlooked the power of Congress to control
the appellate jurisdiction of the Supreme Court, which would make it
impossible for the Supreme Court to put itself in mischievous conflict
with the sovereign lawmaking power of the Nation.
Abraham Lincoln (I want you to see that I have some friends along
the line here; I am not entirely alone) resisted the Dred Scott de
cision and said that he would not oppose the decision as far as it
related to the slave individually, and then he said these memorable
words:
But we, nevertheless, do oppose that decision as a political rule which shall be bind
ing on the voter to vote for nobody who thinks it wrong; which shall be binding on the
Members of Congress or the President to favor no measure that does not actually concur
with the principles of that decision. * * * We propose so resisting it as to have it
reversed, if we can, and a new judicial rule established upon this subject. (Works of
Jefferson, vol. 12, p. 163.)
W ell, he had some trouble in reversing it. I t took the bloodiest
war in our history to reverse it, and four years of fratricidal strife, and
billions of treasure; with grief, sorrow, heartburning and bitter hatred
that lasted for generations.
It is hard to reverse the decisions of the Supreme Court b y that
kind of a method, but it was reversed. They declared in the Dred
Scott decision slavery a constitutional right. W ell, the people didn’t
think so, and the people changed that decision.
The Supreme
Court held the Missouri compromise on slavery unconstitutional
and void in the Dred Scott decision and held in effect that Congress
had no power as a forum to settle the question of slavery as long as a
single slaveholder objected.
This decision inflamed the North and
led to the withdrawal of the Southern States and to war.
THE CONSTITUTIONAL CONVENTION, 1788.
In the Constitutional Convention which framed this United States
Constitution, Edmund Randolph, on June 4, 1787, proposed the
following resolution:
Resolved, That the Executive and a convenient number of the national judiciary
ought to compose a council of revision, with authority to examine every act of the
National Legislature before it shall operate * * * and that the dissent of said
council shall amount to a rejection unless the act of the National Legislature be again
passed. (Elliott’s Debates, vol. 1, pp. 159, 164 , 214.)
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID,
13
They didn’ t propose to finally veto an act of Congress and never
let it go into effect. They only proposed to have a temporary veto,
and if Congress insisted on passing it then let it be the law, but even
that moderate proposition was three times defeated and never
received the vote of over 3 States out of the 13.
A like proposition was also rejected August 5, 1787.
(Elliott’s
Debates, vol. 1, p. 243.)
Only 11 members of the Constitutional Convention out of 65
favored giving the judiciary any control. These were Blair, Gerry,
Hamilton, King, Mason, Morris, Williamson, W ilson, Baldwin,
Brearly, and Livingston.
Hamilton, Morris, Gerry, and several others of this group were
known to be strongly opposed to democracy.
George Washington, Charlie Pinkney, James Madison, and many
others, 22 in number, are known to have expressly opposed any
judicial veto. There were 65 members and only 11 on record as
favoring any form of judicial interference with the legislative powers.
(This is fully set up in Davis on Judicial Veto, p. 49.)
The Constitution, however, speaks for itself; it puts the sovereign
power in Congress,’ the power to control the appellate jurisdiction,
and thus to prevent the exercise of the judicial veto, if it is attempted.
The judicial veto has been attempted.
It has been exercised.
It has been proven highly mischievous.
It has become unendurable. [Applause.]
MARBURY V. MADISON CASE.
John Marshall was a federalist, an aristocrat, a reactionary, a man
of considerable ability, with a consuming desire for power, great
tenacity of purpose, and a great hatred for Thomas Jefferson and his
doctrines.
John Adam s, the federalist, took advantage of the election of
Jefferson, the democratic republican, to put John Marshall, the feder
alist, on the bench as Chief Justice for life, as one of his last acts
before he turned over the Government to Thomas Jefferson. Keep
that in mind, because it meant trouble, and here comes the first
trouble. In Marbury v. Madison, John Marshall violated the first
principles of government of the English-speaking people in assuming
the right to declare void the will of the National Legislature.
Congress (under A rt. I l l , sec. 1), in distributing the judicial powers
of the United States, when it established the Supreme Court by the
judiciary act of 1789, gave the Supreme Court, wisely and justly, and
lawfully in addition to its “ original” jurisdiction, the right to issue a
writ of mandamus as a part of the judicial powers of the United
States. W h y , a little citizen having a case against a great Cabinet
officer could hardly expect to get his relief from a small subordinate
officer of the judiciary department. WTien he makes a demand on
the Secretary of State for his right he ought to have the backing of
the very highest judicial authority— one that can speak to the Secre
tary of State on terms of some comparative equality.
John Marshall struck down that right on the pretense that Congress
had no right to add to the “ original” jurisdiction of the Supreme
14
WITHDRAW ING POWER TO DECLARE ACTS OF CONGRESS VOID.
Court. Congress did not add anything to the “ original” jurisdiction
of the Supreme Court. The Constitution placed the judicial powers
of the United States in the Supreme Court and in such inferior courts
as Congress should establish, and Congress, in pursuance of that
authority, gave the right of issuing the writ of mandamus to the
Supreme Court, as it had a plain constitutional right to do.
A little fellow named Marbury, in the District of Columbia, had
been appointed notary public b y the retiring administration; his
commission had been made out; it had been signed by the President,
b y the Secretary of State, had the seal on it, and was lying on the
table of the Secretary of State for delivery. The incoming Secretary
of State refused to deliver it, and Marbury went to John Marshall,
Chief Justice of the Supreme Court of the United States, and asked
to have a writ of mandamus issued on the Secretary of State to de
liver that commission. John Marshall said “ no” ; that Congress
has no right to authorize the Supreme Court to issue writs of man
damus; that was unconstitutional on the part of Congress. And
when he refused that jurisdiction of a writ of mandamus he seized
the power to declare an act of Congress void, and, therefore, at
tempted to make himself the judicial ruler of the United States, by
exercising a judicial veto over Congress.
The Congress of the United States ought then and there to have
impeached John Marshall. [Loud and continued applause.] H e
was guilty of a violation of the true meaning of the Constitution; he
himself in that act violated the spirit and purpose and meaning of the
Constitution, and he assumed the sovereign power over the legislative
agents of the people of the United States. H e held office for life,
and there was no way for the people to get at him except by im
peachment, a hard and a difficult remedy. A great m any men who
would think he was wrong in his opinions, who would thmk that he
had done very wrong, would hesitate long before they would use that
drastic power, which exercised over a Supreme Court Judge blasts
his name for all history. The remedy is too drastic for the offense,
because, after all, the Congress can prevent the recurrence of that
kind of thing simply b y removing the appellate jurisdiction.
Jefferson denounced Marshall as a thief of jurisdiction, and Mar
shall never repeated that offense.
It was 53 years before it was repeated, in 1856, and then, in the
Dred Scott case, it caused the enormous catastrophe of the Civil W ar.
FLETCHER VS. PECK CASE.
The next mischievous step taken b y John Marshall of national
importance was in Fletcher v. Peck, where an act of the Georgia
Legislature correcting a previous fraud was declared “ unconstitu
tional.” In this case the legislature of Georgia had been deliberately
corrupted with money b y four land companies and induced to pass
an act conveying, without adequate compensation, an enormous grant
of land, some 40,000,000 acres, belonging to the people of Georgia.
The people of Georgia were enraged over it. They came together,
turned out the legislature; they elected a new legislature; the new
legislature immediately repealed the act. It came up before John
Marshall's court, and after solemnly considering it he decided that a
State didn’t have the right to pass an act “ impairing the obligation
WITHDRAWING POWER TO DECLARE ACTS OE CONGRESS VOID.
15
of a contract.” The most mischievous consequences followed. It
was only necessary thereafter to corrupt a legislature and get the
grant made— that settled it.
Since that time many courts have announced a wiser principle:
That fraud vitiates a contract; that it is no contract when it is
obtained corruptly.
DARTMOUTH COLLEGE CASE
A far more dangerous opinion followed this Fletcher v. Peck case.
It was the Dartmouth case— a case that didn’t seem to be of any
importance at all. The legislature of New Hampshire passed an act
increasing the number of trustees of Dartmouth College. The old
trustees were Federalists; the new trustees anti-Federalists. Mar
shall and Washington were Federalists; they opposed the act of the
legislature. Duval and Todd supported the legislature. Marshall
succeeded in preventing a decision at that term, and b y a political
campaign the other three judges, Johnson, Livingstone, and Storey,
were persuaded to agree with Marshall.
(Life of W ebster, by Lodge,
p. l r 88.)
Listen to these words. Mr. Lodge says:
The whole business was managed like a quiet, decorous, political campaign.
Chancellor K en t says the decision in that case did more than any
other single act proceeding from the authority of the United States
to throw an impregnable barrier around all rights and franchises
derived from the grant of government.
(K ent’s Commentaries,
p. 419.)
F ifty years later Mr. Chief Justice Cole, of the Iowa Supreme
Court, said:
The practical effect of the Dartmouth College decision is to exalt the rights of the
few above those of the many. And it is doubtless true that under the authority of
that decision more monopolies have been created and perpetuated and more wrongs
and outrages upon the people effected than by any other single instrumentality of
the Government. (Dubuque v. Ry. Co., 39 Iowa, 95.)
Listen to what Judge Cooley, the great constitutional lawyer, says:
It is under the protection of the decision of the Dartmouth College case that the
most enormous and threatening powers in our country have been created. Some
of the great and wealthy corporations actually having greater influence in the country
at large, and upon the legislation of the country, than the States to which they owe
their corporate existence. Every privilege granted, or right conferred—no matter
by what means or on what pretense—being made inviolable by the Constitution, the
Government is frequently found stripped of its authority in very important particu
lars by unwise, careless, and corrupt legislation; and a clause of the Federal Consti
tution whose purpose was to preclude the repudiation of debts and just contracts,
protects and perpetuates the evil. To guard against such calamities in the future,
it is customary now for the people in forming their constitutions, to forbid the grant
ing of corporate powers except subject to amendment and repeal, but the improvident
grants of an early day are beyond their reach. (Cooley on Con. Lim., 279.)
W hen the Supreme Court declared the Missouri compromise,
passed by Congress unconstitutional and slavery a constitutional
nght, it took a frightful war to settle the error of this judicial
us
ation.
en the Supreme Court declared the legal tender act void, they
took from the Government one of the strongest instrumentalities for
the protection of the great Republic in time of war.
16
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
This gross error was corrected by reversing it. Gen. Grant did
that b y appointing two new judges in favor of the legal-tender act
whose votes corrected the error of the Supreme Court b y reversing
the court. I t was an undignified remedy but better than none. Con
gress has this right now, but the American people do not and will not
approve any such practice. The judges on the Federal bench ought
to represent the matured judgment and will of the American people.
INCOME-TAX CASE.
W hen the Supreme Court declared the income tax void and trans
ferred the taxes from the wealth of the country, which is protected
b y the expenditure of such taxes, it disregarded the will of the
people of the United States and of Congress, vetoed the action of the
House of Representatives, of the United States Senate, and of the
President, reversed the decisions of the Supreme Court of the United
States for a hundred years, and it took the people 16 years to correct
it b y a constitutional amendment, at a cost to the consuming masses
of over $1,600,000,000.
SHERMAN ANTITRUST ACT.
WRen the Supreme Court declared the Sherman antitrust law only
intended to prohibit unreasonable restraint of trade, they rendered
the act nugatory and void. The effect of this decision was to
enthrone m onopoly and to raise the cost of living.
EIGHT-HOUR LAW.
If the Supreme Court should now nullify the eight-hour law and
the railways of the country should arm several hundred thousand
strike breakers with guns and pistols to face several hundred thousand
conductors, engineers, firemen, and brakemen, and their sympathizers,
no man can foresee the harmful consequences of such judicial veto of
the act of Congress.
THE REMEDY FOR THE JUDICIAL VETO.
The remedy which I have proposed is very simple.
The Constitution gives Congress all the power necessary.
A ll that Congress has to do is to pass the resolution I have pro
posed. The Constitution gives Congress entire control of the appellate
jurisdiction of the Supreme Court in the following words:
In all cases affecting ambassadors, other public ministers and consuls, and those in
which a State shall be a party, the Supreme Court shall have original jurisdiction.
In all other cases before mentioned the Supreme Court shall have appellate juris
diction both as to law and fact, with such exception and under such regulation as the
Congress shall make.
The power of Congress in this matter was passed on in the case
of W illiam H . McCardle, an editor in southern Mississippi, arrested
by M aj. Gen. Ord who was putting into effect the reconstruction
Act in 1868. McCardle sued out a writ of habeas corpus from the
circuit court to the Supreme Court of the United States. The
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
17
Supreme Court refused to exercise appellate jurisdiction and dis
missed the case on the ground that Congress had withdrawn appel
late jurisdiction in such habeas corpus cases, and that Congress
had the constitutional power to do so. I t was a unanimous opinion.
The court said:
We are not at liberty to inquire into the motives of the legislature. We can only
examine into its power under the Constitution, and the power to make exceptions
to the appellate jurisdiction of this court is given by express words.
What, then, is the effect of the repealing act upon the case before us? We can not
doubt as to this. Without jurisdiction the court can not proceed at all in any cause.
Jurisdiction is power to declare the law, and when it ceases to exist the only function
remaining to the court is that of announcing the fact and dismissing the cause. And
this is not less clear upon authority than upon principle.
It is obvious, therefore, that we have no occasion to discuss the past
history of the Supreme Court on the point of whether they have
usurped jurisdiction in declaring congressional statutes void. W e
need not go into the past. W e might say that since Congress has
permitted the right without protest to pass upon acts of Congress,
that it was not unreasonable that the Justices should think themselves
justified in exercising the power of saying an act of Congress was
unconstitutional. I am willing to acquiesce in that for the purpose
of the argument but not historically. M y proposition deals with
the future, not the past.
I have demonstrated without the possibility of a doubt that this
power is in Congress, and conceded to be in Congress b y a unanimous
opinion of the Supreme Court of the United States.
And I call your attention to the remarkable fact that m y friend,
Judge Stuart, in answering me, never made reference to that fact.
A V o i c e . Maybe he fo r g o t it.
Mr. O w e n . Y es; maybe he forgot it.
Now, the justification for the withdrawal of these cases from the
Supreme Court I c t m going to state very briefly:
These decisions which have been rendered have been against your
interest.
I want you to know that in m y mind is no purpose to lower the
dignity of that great court. I respect and honor that great court;
I respect the learned and able gentlemen who comprise that court,
individually and personally; I believe in their integrity of mind;
I believe in their learning; I believe in their high personal honor; but
I tell you also that I believe when you have a jury of Irishmen you
will get a home-rule decision. [Laughter and applause.]
FALLIBILITY OF MAN AND OF JUDGES.
^ All men are fallible. Even judges are fallible. On the Supreme
Court, every season cases are decided by the hundreds, as the term
goes by, in which constantly there is a minority of judges on one side
and a majority of the judges on the other, and every time the major
ity decides a case against the minority there is a judicial ascertain
ment by the Supreme Court of the United States as to the fallibility
of each one of the members on the minority— Aid you get that?—
and there isn’ t a week that some of those judges are not in the
minority, so that we have every day through the term the judicial
ascertainment by the m ajority of the Supreme Court of the United
S. Doc. 737, 64-2----2
18
WITHDRAWING
pow er
to
declare
acts
of
congress
v o id .
States of the fallibility of every one of its own members. W h y,
there is nothing surprising about that— everybody knew that, of
course. Just happened not to think of it? They are human beings
after all.
Just look at this Income T ax case, and look at the dogma of the
Supreme Court on the question of deciding an act unconstitutional
only when the unconstitutionality is overwhelmingly established, and
only when there is no doubt about the unconstitutionality of the act.
The professional dogma of the court is to give all benefits of the doubt
in favor of the constitutionality. The trouble about the dogma is
they never pay any vital attention to it. It is only a theoretical
dogma; it is not real; I will show you why. Here is the Income Tax
case. For a hundred years the Supreme Court had sustained the
right of Congress to pass an income-tax law. Here was the incometax law, passed by the House of Representatives, they said it was
constitutional; passed by the Senate, they said it was constitu
tional; approved by the President of the United States, he said it was
constitutional. Here are the decisions of the Supreme Court of the
United States for a hundred years, and they said it was constitu
tional, and here were five judges on the bench, on the first vote, they
said it was constitutional, and then Judge Blank reversed himself
over night and joined the other four, which made them five, and then
they decided in spite of this dogma that there was no doubt whatever
about its unconstitutionality. Now, that is quite a remarkable thing.
Here is Judge Blank in that case who, when he first voted it was con
stitutional, judicially ascertained the fallibility of the other four
minority members of the court; and then when he changed his mind
and joined the four minority members and made them five, he
judicially ascertained the fallibility of the four he had just left, and
since he was on both sides he, must have been fallible. And there
was a demonstration of the fallibility of every judge on the court by the
action of Judge Blank. [Applause.]
MORTAL MAN INFLUENCED BY PREVIOUS ASSOCIATIONS AND OPINIONS.
Now, you all remember that famous case of Tilden-Hayes. Here
were five of the justices of the Supreme Court; five of the most con
spicuous and able Senators of the United States; here were five of
the ablest Members of the House of Representatives, seven Democrats,
eight Republicans. There were four great contested election ques
tions with many controverted questions, and every one of the 15
decided every case according to his own previous political predilec
tion, and the country was astonished to find that 8 was a majority
of 15. But they did discover it. [Laughter.]
Now, the point I want to make with you is that human beings of
the first magnitude are influenced by their training, by their environ
ment, by their social atmosphere, and, sometimes, by the men they
eat dinner with. [Much applause and laughter.]
Now, if you put the sovereign power of declaring void the acts of
your legislative representatives in the United States Supreme Court
not responsible to you, you m ay thank yourselves for the conse
quences.
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
STANDARD
O IL
AND
A M E R IC A N
TOBACCO
19
CASES.
Look at this great case known as the Standard Oil case. Here
was a case where the people of this country after years of struggling
finally had their Representatives in Congress, in the Senate and in
the House, both agree upon the Sherman antitrust law (1890),
making it a criminal offense to commit an act in restraint of trade,
vital if the principle of competition is to survive; vital if the monopo
lies are not to be permitted to kill off every competitor and have a
masterful control over the market and over the price which shall
be paid for that which you produce and for that which you are
compelled to buy. That law, it took you years to get on the statute
book. It finally, by the slow, dragging, wearisome process of the
court, came before the Supreme Court in the trans-Missouri and
joint-traffic cases, and there, in three different decisions, that court
declared that Congress meant what it said and that it was the law,
that any act in restraint of trade was criminal.
Then the trusts came to Congress and tried to get a remedy. I
want you to listen to the report of the Committee on the Judiciary on
this very remarkable case. The proposed relief bill was introduced
by Senator Warner, of Missouri, January 26, 1908. Now listen to
this; I want you to listen. Here is the report of the Senate com
mittee refusing to write the word “ reasonable” into this act. Con
gress had said it is not reasonable for you to deny liberty to another
man, no matter how sm all; it is not reasonable for you to meet and
act in restraint of trade, restraining some other man from his rights.
Listen to this Senate com m ittee:
The antitrust act makes it a criminal offense to violate the law, and provides a pun
ishment applied by fine and imprisonment. To inject into the act the question of
whether an agreement or combination is reasonable or unreasonable would render the
act, as a criminal or penal statute, indefinite and uncertain, and hence to that extent
utterly nugatory and void, and would practically amount to a repeal of that part of
the act. * * * And while the same technical objections do not apply to civil
prosecutions, the injection of the rule of reasonableness or unreasonableness would
lead to the greatest variableness and uncertainty in the enforcement of the law. The
defense of reasonable restraint would be made in every case, and there would be as
many different rules of reasonableness as cases, courts, and juries. * * * To
amend the antitrust act, as suggested by this bill, would be to entirely emasculate it,
and for all practical purposes render it nugatory as a remedial statute.
President Taft, in a special message to Congress January 7, 1910,
condemned the proposal of so amending the law, and said that such
an amendment would—
put into the hands of the court a power impossible to exercise on any consistent prin
ciple, which will insure the uniformity of decision essential to good government. It
is to thrust upon the court a burden that they have no precedents to enable them to
carry and to give them a power approaching the arbitrary, the abuse of which might
involve our whole judicial system in disaster.
The Supreme Court, in the Standard Oil cases and American
Tobacco case (1911), thereupon proceeded to emasculate it and
render it nugatory by writing an opinion which in effect held that a
reasonable restraint of trade was not unlawful after Congress had re
fused to do so
I am going to read to you just one opinion from Jud^e Harlan on
this case, and then I am going to quit that. Listen to the opinion of
Judge Harlan, an honored member of that court 25 years or more—
one of its leading lights. Listen to what he says:
* * * By every conceivable form of expression the majority of the trans-Missouri
and Joint Traffic cases adjudged that the act of Congress did not allow restraint of
20
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
interstate trade to any extent or in any form, and three times it expressly rejected the
theory, which had been persistently advanced, that the act should be construed as if
it had in it the word “ unreasonable” or “ undue,” but now the court in accordance
with what it denominates “ the rule of reason,” in effect inserts in the act the word
“ undue,” which means the same as “ unreasonable,” and thereby makes Congress
say what it did not say—what, as I think, it plainly did not intend to say, and what,
since the passage of the act, it has explicitly refused to say. It has steadily refused to
amend the act so as to tolerate a restraint of interstate commerce, even where such
restraint could be said to be “ reasonable” or “ due.” In short, the court, by judicial
legislation, in effect, amends an act of Congress relating to a subject over which that
department of the Government has exclusive cognizance. I beg to say that, in my
judgment, the majority in the former cases were guided by the “ rule of reason,” for,
it may be assumed, they knew quite as well as others what the rule of reason required
when the court seeks to ascertain the will of Congress as expressed in a statute. It is
obvious, from the opinions in the former cases, that the majority did not grope about
in darkness, but in discharging the solemn duty put on them they stood out in the
full glare of the “ light of reason” and felt and said time and again that the court could
not, consistently with the Constitution, and would not, usurp the functions of Congress
by indulging in judicial legislation. They said in express words in the former cases,
in response to the earnest contentions of counsel, that to insert by construction the
word “ unreasonable” or “ undue” in the act of Congress would be judicial legisla
tion. Let me say, also, that as we all agree that the combination in question was
illegal under any construction of the antitrust act, there was not the slightest neces
sity to enter upon an extended argument to show that the act of Congress was to be
read as if it contained the word “ unreasonable” or “ undue.” All that is said in the
court’s opinion in support of that view is, I say with respect, obiter dicta, pure and
simple.
In respect to the decision on the income tax, Mr. Justice W hite, in
dissenting, said:
I consider that the result of the opinion of the court just announced is to overthrow
a long and consistent line of decisions, and to deny to the legislative department of
the Government the possession of a power conceded to it by the universal concensus
for 100 years, and which has been recognized by repeated adjudications of this court.
(157 U. S., 429.)
Mr. Justice Jackson of the Supreme Court, in his dissenting opinion
on the income tax decision, said:
Considered in all its bearings, this decision is, in my judgment, the most disastrous
blow ever struck at the constitutional power of Congress. (158 U. S., 705.)
Mr. Justice Brown, in his dissenting opinion, said:
I can not escape the conviction that the decision of the court in this great case is
fraught with immeasureable danger to the future of the country and that it approaches
the proportions of a national calamity. * * * I hope it may not prove the first
step toward the despotism of wealth. (158 U. S., 695.)
Mr. Justice Harlan said:
It so interprets constitutional provisions * * * as to give privileges and immu
nities never contemplated by the founders of the Government. * * * The
serious aspect of the present decision is that by a new interpretation of the Constitution
it so ties the hands of the legislative branch of the Government that without an amend
ment of that instrument or unless this court, at some future time, should return to the
old theory of the Constitution, Congress can not subject to taxation, however great
the needs or pressing the necessities of the Government, either the invested personal
property of the country, bonds, stocks, and investments of all kinds, etc. * * *
I can not assent to an interpretation of the Constitution that impairs and cripples the
just powers of the National Government in the essential matter of taxation and at the
same time discriminates against the greater part of the people of our country. (158
U. S., 695.)
Mr. Justice Harlan also said on another occasion:
When the American people come to the conclusion that the judiciary of this land
is usurping to itself thefunctions of the legislative department of the Government, and by
judicial construction is declaring what is the public policy of the United States, we
will find trouble. Ninety millions of people—all sorts of people with all sorts of
WITHDRAW ING POWER TO DECLARE ACTS OF CONGRESS VOID.
21
beliefs—are not going to submit to the usurpation by the judiciary of the functions
of other departments of the Government and the power on its part to declare what is
the public policy of the United States. (221 U. S. 1, 106.)
Mr. Theodore Roosevelt, before the Colorado Legislature, pointed
out the grave danger in recent court decisions in defeating humane
laws, and stated:
If such decisions as these two indicated the court’s permanent attitude there
would be really grave cause for alarm, for such decisions, if consistently followed up,
would upset the whole system of popular government.
And he referred to such decisions as “ flagrant and direct contra
dictions to the spirit and needs of the tim es.”
Senator Robert M. LaFollette, in his introduction to Gilbert E .
R oe’s work, “ Our judicial oligarchy,” said:
Precedent and procedure have combined to make one law for the rich and another
for the poor. The regard of the courts for fossilized precedent, their absorption in
technicalities, their detachment from the vital, living facts‘of the present day, their
constant thinking on the side of the rich and powerful and privileged classes have
brought our courts into conflict with the democratic spirit and purposes of this genera
tion. Moreover, by usurping the power to declare laws unconstitutional, and by
presuming to read their own views into statutes without regard to the plain intention
of the legislators, they have become in reality the supreme law-making and lawgiving institution of our Government. They nave taken to themselves a power it
was never intended they should exercise; a power greater than that entrusted to the
courts of any other enlightened nation. And because this tremendous power has
been so generally exercised on the side of the wealthy and powerful few, the courts
have become, at last, the strongest bulwark of special privilege. They have come
to constitute what may indeed be termed a “ judicial oligarchy.”
Thomas Jefferson, in his letter to Mr. Jarvis, in 1820, rebuked him
for assuming that judges should have power over the legislature,
the judges being themselves beyond control except by the impossible
remedy of impeachment, and said:
_ You seem to consider * * * the judges as the ultimate arbiters of all constitu
tional questions; a very dangerous doctrine, indeed, and one that would place us
under the despotism of an oligarchy.
A number of books have recently been written upon this matter,
as “ Our judicial oligarchy,” b y Gilbert E . R oe; “ The judicial v eto,”
by Davis; “ The majority rule and the judiciary,” by W illiam N .
Ransom, with an introduction by Theodore Roosevelt; “ The Spirit
of the American Constitution,” by Prof. J. Allen Sm ith; all which
emphasize the need to correct the practise I have referred to.
I could quote you many such opinions, but I must not take too much
of your time. I want to conclude what I have to say. I want to call
your attention to this: That just as soon as the decision was rendered
in the Standard Oil case, declaring that “ reasonable” restraint of
trade was the meaning of Congress, and that Congress didn’ t make
criminal any act in reasonable restraint of trade, the Standard Oil Co.
stock went right up. The people were advised in the country that the
Standard Oil Co. was being dissolved. The papers announced that
the Standard Oil Co. of New Jersey had received a terrible blow by
this decision. The effect of that decision was the immediate rise in
the market price of the Standard Oil stock. I sent a telegram the
other day to John M oody, the great statistician and head of M oody’s
Investors’ Service, and Moody sent me back a telegram that this
stock of the New Jersey Standard Oil Company and its subsidiaries,
capitalized at one hundred million, and at the time of this decision
in 1911 worth$600 a share, or $600,000,000, was now worth on the
22
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
market (within a period of six years) $2,400 a share, or a gross
market value of $2,400,000,000. Do you get that ?
D on’t make any mistake about what that means. It will explain
something about the 40-cent oil at Healdton and at Cushing. Now,
m y fellow citizens, I only refer to that one company (there are very
m any others of like purport), and I want to say to you that I believe
it is a wise policy for the people of the United States to deal with
corporations, no matter how large they are, with the same exact jus
tice that they deal with the smallest citizen; but, at the same time, it
is essential that we should protect the small citizen against the unfair
exactions of predatory power. I have no prejudices against great
organizations, but am proud of their accomplishments in America.
All I want to see is that they do not use their great power tyrannically.
The gain on this stock in six years is $1,800,000,000. It is not
all due to this decision; it is due to other factors, in part. But in m y
opinion a large part of this increase is due to that decision of the
Supreme Court m nullifying and emasculating the antitrust law
passed by Congress.
JUDGE
S T U A R T <S
REPLY.
W e all saw in the paper a short time ago where a man in Chicago,
by getting a monopoly on eggs in cold storage cleaned up a million
dollars. H e was only doing on a small scale what the big boys are
doing on a large scale; that is all.
Do you object to paying 60 cents a dozen to speculators for eggs?
That is a very small thing. Judge Stuart seems to think you ought
not to object to paying 60 cents a dozen for eggs. Judge Stuart
regards it as a joke. His answer to me before the legislature, when
I pointed out this invasion of the legislative powers of the people by
this decision of the Supreme Court and the result of their decision in
the Standard Oil case— his answer to me was that, “ something had
been said about the Standard Oil Co. case” ; he didn’t say what—
and that the high price of eggs was attributed to the decision in the
Standard Oil case.
If the people of this State wish to regard the high cost of living as
a piece of humor they will know where to go and get their advice.
Now I observe in this argument of Judge Stuart to what I said
he answers not a word about the power o f Congress— no answer to
that; no adequate answer to the importance of letting the people
know what the law is ; no answer to the need of having in Congress
a responsible forum for the settlement of internal disputes.
After we got the Sherman antitrust law it was on the statute
book 21 years before the Supreme Court emasculated it. W hen a
law is passed now you do not know whether it is the law or not.
W e have passed this eight-hour law, and the gentlemen who control
the railway property o f the country promptly announced that they
would pay no attention to it at all until it was decided constitutional
by the Supreme Court of the United States.
W ell, I intend to introduce another act of the same kind and attach
to it a condition that the question of its constitutionality shall not
go to the Supreme Court. [Loud and continued applause.)
W hen men become so large that they feel they can openly defy
the lawmaking power of the people of this country, I tell you the
time has come to withdraw from the Supreme Court this refuge
upon which such gentlemen rely.
WITHDRAWING POWER TO DECLARE ACTS OE CONGRESS VOID.
23
M y friend, Judge Stuart, tries to prejudice the jury. H e talks
with pathos about that great and honored southern statesman,
Robert E . Lee, whom we adore, and the confiscation of his home
stead. It is a rod herring drawn across the trail.
The fact is the confiscation acts were declared constitutional by the
Supreme Court. And the fact is that it was not Robert E . Lee, it
was George Washington Custis Lee, the president of m y old college,
whom I knew well, who brought an action (and the Supreme Court
upheld him in his right) to recover a fair money value for the property
taken for a burial ground for the soldiers and sailors of the United
States.
I
merely mention that because the judge so emphasized the great
accuracy that he should observe, and I think it worth while to call
your attention to the facts, as they seem to be.
In the case of the Oklahoma State capital, Congress passed the
enabling act fixing the capital at Guthrie for a certain length of time,
due to the activity of certain distinguished citizens who lived up there,
I suppose. The State of Oklahoma accepted that act with that
clause in it, and, then, not feeling bound b y it, they exercised their
just rights, took a referendum vote, and voted to bring the capital
to Oklahoma City. They were within their rights, and the Supreme
Court, when the matter went up to them, very properly said so, and
I do not doubt in the least that Congress would have said the same
thing if Congress had had an opportunity to pass on it after the vote
in Oklahoma, if the citizens here desired that that should be done.
So much for that “ appeal to the jury.”
[Applause.l
It shows the poverty of Judge Stuart’s argument when he is driven
to use arguments of that kind.
Then the next question the Judge raised was that the only thing
which protects our daughters from being obliged to sit down, side
by side, with a negro in the theater and at the hotel table was the
action of the Supreme Court of the United States. [Laughter.]
W ell, I don’t know about that, I think not. I know better.
The thing which protected the white people of the South was the
manhood of the South, “ The sovereignty of the people.”
[Applause.]
Make no mistake about that. M y people were there.
The civil-rights case was one single example, where political preju
dice went too far, but those cases didn’t arise in the South; they arose
in Kansas, California, and New Y ork, if I am not mistaken, and
border States of Missouri and Tennessee. And I think the Supreme
Court was quite right in declaring it unconstitutional, and the
Supreme Court in doing so respected the will of the white race of the
North and W est, as well as of the South. That is about the only thing
I now recall they have done in the way of declaring acts of Congress un
constitutional that I really fully approve of. The Supreme Court has
had a splendid and honorable career. I am proud of that great court,
but when you go back through these cases, notably the Dred Scott
case, the legal-tender cases, the income-tax cases, the Standard Oil
case, the American Tobacco case, in all of these cases where they
decided against Congress, there followed the most harmful conse
quences to the people of this country. The whole trouble is you
can’t get at the Supreme Court if it makes a mistake, but if Joe
Thompson, Member of Congress from this district, makes a mistake,
or if Robert L . Owen, your Senator, makes a mistake, you can get
at them quickly, and that is the vast difference, that is the exceed-
24
WITHDRAWING POWER TO DECLARE ACTS OF CONGRESS VOID.
ingly important difference, if you wish to maintain democratic
popular government.
Taking this power from the Supreme Court will not diminish its
docket or its dignity. They have a docket now of 700 cases, and
they can not read the full record of those cases in a single term; they
have more now to do than they ought to be required to do. They
ought, themselves, to ask Congress to limit the character of cases
that come before them, both for their own sake and for the sake of
litigants. I have talked to some of the judges about this need and
they would welcome some relief, I am sure.
I do not believe the honorable justices on this court want to retain
this responsibility which they now believe rests on them by law and
certainly it will be better for the country to withhold it.
It will improve the dignity and high standing of the Supreme
Court; it will improve the standing of the Supreme Court with the
people of the United States; the people will have more confidence in
that great court if the court is not put in the painful position of being
put in conflict with Congress to the injury of the dignity of the court.
Now, m y fellow citizens, the question merely comes down to this:
W h y do the people of this country, in sending its lawmaking agents
to Washington, make them responsible to the people at home? E v i
dently so the people can correct the errors of Congress if the Congress
errs. The crucial question is, D o you want Congress able to give
relief to the country and be responsible to you, or do you want Con
gress to pass laws and have them declared void by a power over which
you can exercise no control ?
V o ic e s . N o , no.
A V o ic e . Take a vote.
A V o ic e . Y e s ; take a vote.
A V o ic e . L et’s have a vote.
Senator O w e n . N o w , wait a minute. If we are going to vote, let’s
have a fair vote on it. Those who are in favor of the proposition
please arise.
Stenographer ’ s note .—Out of an audience calculated by those who are supposed
to know at 1,250, practically the entire assembly rose to their feet.
Those opposed will now please rise.
Stenographer ’ s
note . —Ten,
by count, rose.
Ladies and gentlemen, these questions are before the American
people. They ought to be discussed in good nature, in a friendly
spirit, and we ought not to enter into the discussion of the question in
an unkind way, much less to speak unkindly of our great and honored
Supreme Court.
I believe the time has come when the legislative powers of the
people ought to be exercised free from interruption so that the people
can understand what the legislature means and then let the legirnature be responsible to the people of this country. Let us know what
the law means the moment it is passed. Let the Department of
Justice be able to tell our business men immediately (when they ask)
what the law is, and not be left to say: The department can not say
until some test case is settled a few years hence by the Supreme
Court.
I thank you for your courteous attention. [Applause.]
—
o
JUSTIFICATION OF THE WAR WITH THE IMPERIAL
GOVERNMENT OF GERMANY BY THE UNITED
S T A T E S . ______________________
S P E E CH
OF
HON.
ROBERT
OP
In
the
S enate
L. O WE N ,
OKLAHOMA,
of t h e
U
n it e d
S ta te s ,
Monday, April 16, 1917.
JUSTIFICATION OF THE WAR W ITH THE IMPERIAL GOVERNMENT OF
GERMANY BY THE UNITED STATES.
Mr. OWEN. Mr. President, a few days since I received a let
ter from a well-known lawyer in Oklahoma advising me that
many of the people In his neighborhood were opposed to war
with Germany, and saw no reason for it, and asking me, gravely,
what justification 1 could offer for it. It is clear from my
correspondence that seme of our citizens do not fully under
stand some of the most important facts which justified the
United States in accepting the repeated challenge to war by the
Imperial German Government. Some of our people seem
moved by the obvious trutli that war is deplorable and to believe
we ought not to engage in this war.
Mr. President, certainly war is deplorable, but abject cowardly
submission to tyranny, to persistent wrong, to brute force, is
more deplorable— it is despicable. America is incapable of such
submission.
Submission to the brute force of Germany by France, by
Russia, or by England in the last two years would probably
have ended the democracies of the world; would have put the
United States in the most deadly peril; and for us to submit
to her brute force now would put both our present and our
future in jeopardy.
I rejoice that the President of the United States has pointed
out the danger to the world and to the civilization of the world
of the triumph of the Imperial Government of Germany in this
European conflict. I rejoice that on entering this conflict the
mighty powers of this great Republic will be used alone in de
fending and preserving liberty; not in a spirit of malice or
hatred of the German people, but against the house of Hohenzollern ; to assist in taking from the hands of William II the
power to further brutalize the great German people who have
infinitely deserved a better fate.
I have always admired the German people. I have admired
their sturdy common sense, their industry, their virtues,
and their home-loving qualities. I have admired their intellec
tual attainments, their internal democratic development, their
92727— 17258
2
progress in the sciences, in the arts. I have loved their music
and enjoyed their poetry and their literature. Notwithstanding
their confessed good qualities, their natural peace-loving quali
ties, the actual governmental control of the German people has
since 1870 been under the directing hand of the Prussian mili
tary machine, that subordinates every other interest of state
craft—agriculture, factories, commerce, school, church, home—
to military power and to the aggrandizement of the house of
Hohenzollern and of the smaller allied German kings and
princes.
The Prussian King, ex officio Emperor, claims to rule by
“ divine right,” without the consent of the German people, and
he does rule them without their consent.
Any citizen who criticizes the Government, the Emperor, or
the King of Prussia is guilty of a crime, lese majeste, subject
to instant imprisonment. The citizen is a subject; he is not
free.
The press is not free, and the educational system, from kinder
garten, gymnasium, and high school to university, is controlled
by the dominant power of the Kaiser, and the people have been
taught systematically and thoroughly that obedience is the first
duty of a subject of the Kaiser and that the doctrine of the
military powers is right; and, unhappily, the doctrine of the
military powers of Germany is that might makes right; that
military necessity is not bound by treaty, by moral law, or by
any other la w ; that terrorism or frightfulness is a lawful
weapon in the hands of the military machine; that when a sol
dier makes himself terrible by wholesale slaughter and destruc
tion, regardless of the laws of humanity, he shortens the war by
intimidating those who would oppose.
Thus it is that the German people have been led to their doom
by this ungodly, vicious military machine; thus it is that they
have alienated the sympathy of tiie whole world, and those
Americans who have loved the German people see no way to
protect the world or to protect the German people except by
overthrowing Prussian militarism, overthrowing the Hohenzollerns.
While the people of Germany are by nature democratic and
peace loving; nevertheless, their order, - obedience, industry,
their very virtues, their efficiency, as subjects of the Kaiser,
have been made an instrumentality in the hands of the military
machine which tlp-eatens the peace of the whole world, which
threatens our peace, and has waged war on us in spite of every
effort on our part to prevent it.
Mr. President, while Bismarck made many concessions to the
development of local democracy in Germany and developed a
great democratic efficiency in Germany as a concession to the
constantly increasing intelligence of the German people; as a
concession to the constantly increasing demand for democracy
in Germany, nevertheless in framing the German Empire he
and the Hohenzollerns so framed it as to put that Empire under
the practical domination of the Kingdom of Prussia, whose
King claimed to govern mankind by the “ divine right ” and in
partnership with Almighty God Himself, a doctrine descended
from Frederick II, sometimes called “ the Great,” but who did
not believe in God at all in the affairs of men except in so far
as the affectation of that belief served his selfish ambitions.
92727— 17258
The control of the German Empire by Prussia and the control
of Prussia by the house of Hohenzollern left William the Sec
ond the master of the army and navy, of the war machine, with
the power to declare war. The consent of the subordinate Bundesrath, composed of appointees of the Kings and princes of
Germany was not necessary. He and his military captains have
been moved by the principle of the Hohenzollern family, ambi
tion. first, last, and all the time; ambition, wrapped* in the
cloak of pure patriotism, parading as Germany, as the fatherland ; hut always beneath has been the determined purpose to
aggrandize the house of Hohenzollern and the army. Hence
arose the military slogan “ Deutschland Uber Alles,” which
being interpreted meant “ The house of Hohenzollern and the
military autocracy— Uber Alles.” Hence the greatly exploited
notion of “ Weltmacht,” which meant power over the world by
the Hohenzollerns and their military autocracy. Hence that
mysterious toast “ Der Tag," which meant the day when the
house of Hohenzollern and the military autocracy would rule
all mankind, the day when autocratic military power would rule
mankind under the blasphemous claim of “ divine right,” and
should impose its will over the liberties of the civilized and
uncivilized nations of the world through brute force and terror
ism or “ schrecklichkeit.” The world is compelled to teach the
Kaiser and his subject soldiers the folly of trying to terrorize
the world.
In some things this Government may well profit by the glorious
example of the German Government. They have magnificently
developed vocational industrial education, have established in
numerable cooperative democratic societies, State insurance
against old age, accidents, and so forth, and have thoroughly
cared for the unemployed man and made him self-supporting,
and have wonderfully developed municipal ownership, and so
forth. Ox*ganized industrial democracy has been made the help
less tool of political military autocracy, and the Germans in
large measure seem not to see this.
In August, 1914, when the ambitious Hohenzollerns had art
fully contrived to prepare their war machine with an overwhelm
ing supply of cannon, powder, shells, machine guns, rifles, trans
portation material, and all the accouterments of w ar; when they
found France inadequately protected, Kussia without war sup
plies, England with no army, Luxemburg and Belgium incapable
of defense, they threw suddenly this desolating war machine of
terrorism like an avalanche on the fair fields of Luxemburg,
Belgium, and France, intending to seize Paris, force a treaty
with France, impose a giant indemnity, as it did it 1870, then
dominate Russia, and establish throughout the world “ Der
Tug,” “ Weltmacht,” “ Deutschland iiber alles,” and establish the
house of Hohenzollern as the military autocratic rulers of man
kind in the sweeping destruction of the liberties of the world.
The Hohenzollerns under Frederick William of Brandenburg
and Prussia, under Frederick the Second and his successors have
always followed the doctrine that—
Might makes right.
They have always despised the American doctrine of Abraham
Lincoln, who had “ the faith to believe that right would make
might.”
92727— 1725S
4
The Hohenzollerns always believed in the doctrine of absolute
monarchy as against limited monarchy or democracy in any
form. Under them Prussia has been an armed camp, an army
for over a hundred and fifty years, glorifying war and military
power and for 50 years keeping Europe in a state of constant
suspense and apprehension of the blow which all Europe feared
but believed would some time surely fall. The Hohenzollerns
believed in the false monarchial doctrines of the Bourbons,
whose principles you will find cast in bronze on the cannon we
took from Spain in 1898, now mounted at the north end of the
War Department in Washington City.
On the mouth of one of these cannon, called de Mareschal Le
Due de Humieres, you will find these words—
“ Le passe par tous ”—
The passway through everything. That is, the cannon’s mouth
is the passway through broken treaties, through the boundaries
of undefended neighbors, through justice and righteousness,
through industry and honor— the pathway to the so-called
“ glory ” of kings and the ruin of peoples. On the base of that
cannon you will find the words—
Nec pluribus impar ”—
Not unequal to many. That is, the cannon is not unequal to
many people— to very many people. It can slay people; it can
dominate people; it can tax millions without the consent of the
people. This is the doctrine of autocracy against democracy.
On the body of that Bourbon cannon you will find the phrase—
“ Ultima ratio regum ”—
The final argument of kings. When the people argue for
self-government, when the people argue that justice is justice,
that right is right, that their conscience is the whispering of the
spirit of God, then the people hear the final argument of kings,
the final argument of the Hohenzollerns and of military autoc
racy— the cannon’s roar—who would teach the world the per
nicious doctrine that might makes right.
These are the real principles of military autocracy when moved
by the royal family pride; by cold selfish ambition, playing upon
the prejudices, the weaknesses, the ignorances of mankind. Y es;
playing upon the most sacred sentiments of mankind; playing
even upon the trust of mankind in the Divine Spirit. These
vicious military autocratic forces which are now assailing the
liberties of mankind under the grossly false pretence of protect
ing the German people against their supposed enemies are the
same in spirit that established the “ Holy Alliance” signed by
“ Alexander the First,” Emperor of Russia, of the Romanoff
fam ily; by Francis the First, Emperor of Austria, of the Hapsburgs; by Frederick William the Third, King of Prussia, of the
Hohenzollerns, in 1815, in which they pledged themselves—
“ to take for their sole guide the precepts of that holy religion
(the Savior taught), namely, the precepts of justice, Christian
charity, peace” ;
Pledged themselves—
“ by unalterable good will, the mutual affection with which
they ought to be animated; to consider themselves ali as mem
bers of one and the same Christian nation; the three allied
Princes looking on themselves as merely delegated by Providence
92 7 2 7 — 17258
W
to govern three branches of the one family, namely, Austria,
Prussia, and Russia, thus confessing that the Christian world,
of which they and their people form a part, has in reality no
other sovereign than Him to whom alone power really belongs,
because in Him alone are found all the treasures of love, science,
and infinite wisdom—that is to say, God, our Divine Saviour, the
Word of the Most High, the Word of Rife.”
The Holy Alliance had for its sinister, deceitful purpose the
misleading of the people of these great countries, through the
piety and good will of the people, into the belief that their lead
ership was actually moved by these high holy sentiments.
The history of Europe demonstrated that they were moved by
nothing of the kind but alone by their own selfish ambitions,
and that they made this pretended treaty for the purpose merely
of establishing themselves in the confidence of their people and
of neighboring religious peoples, while in reality they were con
stantly engaged in enriching themselves and their court favorites
and their own families at the expense o f the people, and never
hesitated to sacrifice the poor people, their subjects, their quasi
slaves, on the field of battle or in exile in order to further the
family interests of the Romanoffs, the Hapsburgs. and the Hohenzollerns. It was an autocratic military combination intended
to promote the selfish interests of these families by military
force and to enable them in concert to prevent the people of
Russia, Prussia, and Austria making any headway in self-gov
ernment, and to prevent the self-government of men making
progress in any other part of the world. This blasphemous
combination— I say blasphemous, because they pretended to
have a charter from the Throne of Grace and to govern by Di
vine right under the special sanction of the Almighty, when they
well knew the corruption of their own courts and of their own
selfishness— amended this self-serving declaration of 1815 of
their own “ holiness ” by adding several articles to this treaty
of peculiar interest to all democracies.
In 1822 the “ Holy Alliance ” added certain articles known
as the Secret Treaty of Verona, as follows:
“A rticle 1. The high contracting powers being convinced that
the system of representative government is equally as incom- .
patible with the monarchial principles as the maxim of the
sovereignty of the people with the divine right, engage mutually,
in the most solemn manner, to use all their efforts to put an end
to the system of representative governments, in whatever coun
try it may exist in Europe, and to prevent its being introduced
in those countries where it is not yet knowm.
“ Art 2. As it can not be doubted that the liberty of the press
is the most powerful means used by the pretended supporters of
the rights of nations to the detriment of those of princes, the
high contracting parties promise reciprocally to adopt all proper
measures to suppress it, not only in their own States, but also in
the rest of Europe.”
Here we find the Hohenzollerns and the Hapsburgs, who still
dominate Germany and Austria, making a solemn covenant with
the Romanoffs of Russia and with the Bourbons, through King
Louis XVIII, of France, whom they had placed upon the French
throne, and solemnly engaging in—
A deliberately prepared and deadly compact to destroy all’ the
democracies of the world;
92727— 17258
To stamp out the liberty of the press in all Europe, even out
side their own dominions; and thus—
To keep all mankind in ignorance, in order that they and
their families, who were constantly intermarrying with other
like families, might continue to dominate mankind by military
force.
This blasphemous “ Holy Alliance ” by this very treaty fur
nished 20,000,000 francs annually to Louis X VIII to wage war
on the limited monarchy of Spain, which the people of Spain
had by painful revolution established and to reestablish an
absolute monarchy in Spain under the same prince, in order to
discourage and break down any right whatever of the people of
Spain to govern themselves. They did not hesitate to cause the
murder of the people of Spain to carry out their “ Ho l y ” Chris
tian purposes.
This blasphemous “ Holy Alliance ” then sent an Austrian
army into Italy and accomplished the same identical purpose,
murdering the Italian people for the same “ Holy ” Christian
reasons. This wicked “ Holy Alliance ” then proposed sending
other armies and navies to North and South America for the
purpose, as they said, of “ reducing the revolting colonies of
Spain and Portugal on the Western Hemisphere ” and thus
strangling all representative governments at their birth
throughout North and South America. What they really meant
was that they intended to send an army into Brazil to destroy
a republic in Brazil, to send an army into the Argentine; into
Chile, into Colombia, into Peru, into Venezuela, into the Central
American States, and into Mexico, to suppress the freedom of
the people, to prevent their governing themselves, to put them
again under an absolute monarchy, so that the monarchial
principle should govern all mankind, and democracy never
should be permitted to establish its foot upon the entire earth.
That was their purpose.
Canning, of Great Britain, notified this detestable conspiracy,
known as the “ Holy Alliance,” that Great Britain would
oppose such an assault on the former colonies of Spain and
Portugal, for Great Britain, though a limited monarchy, was
arleady a great representative government, loving liberty and
justice.
President Monroe, advised of this conspiracy of the houses o f
Hohenzollern and of Hapsburg to invade the liberties of North
and South America, sent his message to Congress in December,
1823, in which he made the following statement of principles
known as the “ Monroe doctrine.”
He said :
“ It is impossible that the allied powers should extend their
political system to any portion of either continent without
endangering our peace and happiness; nor can anyone believe
that our southern brethren, if left to themselves, would adopt
it of their own accord. It is equally impossible, therefore, that
we should behold such interposition in any form with indif
ference.”
He said :
“ With the existing colonies or dependencies of any European
power we have not interfered and shall not interfere. But with
the Governments who have declared their independence and
maintained it ->nd whose independence we have, on great con92727— 17258
sideration and on just principles, acknowledged, we could not
view any interposition for the purpose of oppressing them or
controlling in any other manner their destiny by any European
power in any other light than as the manifestation of an un
friendly disposition toward the United States.”
This firm stand taken by Great Britain and the United States
prevented representative government and the democracies of
the Western Hemisphere from being destroyed by the unlimited
rapacity and cold-blooded ambition of the Hohenzollerns, the
Hapsburg, and their “ holy ” associates.
Mr. President, this same group attempted to set up a monarcliial government in Mexico, when the United States was em
barrassed and in the throes of the Civil War, by sending Mexico
an emperor—Maximilian, an Austrian gentleman of the Haps
burg family—who quickly had some unhappy dealings with the
democracies of the Western Hemisphere. Let him repose in
peace. The action of the United States overthrew Maximilian
and ended an overt act of the Hapsburgs against our national
peace.
Mr. President, those who have observed the development of
this great war machine in Germany as an instrumentality by
which the Hohenzollerns might dominate mankind will see quite
clearly the attitude of the military autocracy set forth in the
book, Germany and the Next War, by its mouthpiece, Gen.
von Bernhardi, October, 1911. Von Bernhardi is fairly a
spokesman of the military autocracy of Germany. He glorified
war. He insisted in that volume— and it was sent all over this
country, by hundreds of thousands—that the German people
must he awakened and compelled to show their military
strength. He praised to the skies the great elector, Frederick
William of Brandenburg, the first important member of the
House of Hohenzollern. Listen to Von Bernhardi praising this
wonderful Prussian general, ruling by divine right a population
of two and a quarter millions, with a hundred thousand armed
men trained to the last degree of efficiency and better supplied
with munitions of war than any other army in Europe. Listen
to his praise of the great elector:
“ The great elector laid the foundations of Prussia’s power by
successful and deliberately incurred wars. Frederick the Great
followed the example of his glorious ancestors. He noticed how
hiS State occupied an untenable middle position between the
petty States and the great powers, and showed his determina
tion to give a definite character (decider cet 6tre) to his anom
alous existence; it had become essential to enlarge the territory
of the State and corriger la figure de la Prusse, if Prussia
wished to be independent and to bear with honor the great name
of k in g d o m . The King made allowance for this political neces
sity and took the bold determination of challenging Austria to
fight. None of the wars which he fought had been forced upon
him; none of them did he postpone as long as possible. He had
alvmys determined to be the aggressor."
Frederick II followed him, idealizing war, waging war on
defenseless people, as when he first took his place as King of
Prussia he violated the treaty with Maria Theresa of Austria,
broke faith, treated the treaty as a scrap of paper, threw 50,000
highly trained, seasoned, skilled soldiers upon Silesia, undefended
9 2727— 17258
8
because relying upon his good faith, and he kept all Europe in
turmoil for years and years and years, and at that time waged
seven years of continuous warfare.
It might be said that his opponents in France and in Austria
Avere no better than he, as far as keeping faith Avas concerned,
because the house of Bourbon and the house of Hapsburg occu
pied the French and the Austrian thrones, and were represented
by those Avho Avere just as deceitful as Avas Frederick himself.
Frederick the Great is now the ideal of the Prussian military
autocracy. Only a year or tAvo ago the United States Avas pre
sented with a statue of Frederick the Great, and it is standing
doAvn before our War College now. My own opinion is that the
statue of Frederick the Great ought to be gently and quietly
removed from its spot and dropped in some quiet place in the
Potomac River Avhere it will no longer serAre to give dignity and
honor to this cruel and unscrupulous prince.
The Imperial German G oa eminent presented us Avith its ideal
in the statue of Frederick, the embodiment of war and rapacity
and broken treaties.
France presented us Avith the French ideal, Bartholdi’s wonderful conception, standing guarding the entrance to our greatest
port— N oav York—Avhere all the Avorld may see “ Liberty en
lightening the Avorld.”
God bless France and speed her prophecy.
Once too often the Hohenzollerns have been the aggressors of
the Avorld’s peace, and noAv this Avorld-Avrecking spirit Avill be
terminated foreAT by the indignant power of the Avhole Avorld.
er
In that respect I am rejoiced to see Brazil folloAving the United
States; first of all, little Cuba declaring Avar on Germany, and
folloAving her father, the United States. Avho gave her peace and
gave her liberty against a prince of the Hapsburg famiiy. Here
comes Brazil; the Argentine Avill follow ; Paraguay. Uruguay.
Peru, Bolivia, and the Central American States may be expected
to folloAv; and I expect to see eA-en Mexico sIioav her sympathy
Avith the democracies of the Avorld, and Avith this great struggle
to put doAvn forever the irresponsible ambitions leading armed
military forces that have no conception of human liberty, Avhose
one idea is obedience and to rule the Avorld by military efficiency
and by terrorism.
Mr. President, I rejoice to believe that this Avar which Ave shall
noAv Avage with all the resources of 100,000,000 people; Avith all
the financial power of the richest Nation on the globe; with all
the vast equipment of material, of factories, of American inven
tions on the Imperial Government of Germany, will render the
most gigantic service to the German people Avhich it is possible
for one people to render to another in delivering them from the
military tyranny and the political control of the Hohenzollerns
and their military clique, Avho have taxed and driven the German
people beyond all human endurance; Avho have kept all the na
tions of Europe trembling under the load of universal military
preparation for 50 years.' It was Germany that prevented dis
armament a few years ago at The Hague. Even Nicholas II
proposed it, and Germany, of all the nations, prevented it.
This German military autocracy haA7 finally driven the people
e
of Germany to ovenvhelming slaughter on the battle fields of
Europe, and have compelled the liberty-loving, God-fearing
democracies of the Avhole Avorld, in defense of liberty and
9 2 7 2 7 — 1725S
9
righteousness, to turn their guns on the unhappy Germans led
to the shambles by the heartless ambitions of the Hapsburgs and
Hohenzollerns.
No man who has studied the history of recent Europe ques
tions for a moment the bloodguiltiness of the Hapsburgs, who
in avenging the wicked assassination of the Crown Prince of
Austria-Hungary imposed 10 demands on Serbia, to everyone
o f which Serbia submitted save the relinquishment of her sov
ereignty and the violation of her constitution. (See chap. 4,
Obstacles of'Peace, by S. S. McClure.)
The gist of the Austrian demands, of which there were 10,
was as follow s:
“ 1. Serbia shall suppress all anti-Austrian publications.
“ 2. Dissolve the Narodna Odbrana and all similar societies,
confiscate their funds, and prevent heir re-forming.
“ 3. Remove from public education in Serbia all teachers and
teaching that are anti-Austrian.
“ 4. Remove from military and civil service all officers and
officials guilty of anti-Austrian propaganda; Austria will name
the persons.
“ 5. Accept collaboration of Austrian representatives in the
suppression of anti-Austrian propaganda.
“ 6. Take judicial proceedings against accessories to the plot
against the archduke; Austrian delegates will take part in the
investigations.
“ 7. Arrest Maj. Voija Tanlcositch and the individual named
Milan Ciganovitch.
“ 8. Prevent and punish the illegal traffic in arms and ex
plosives.
“ 9. Send to Austria explanations of all unjustifiable utter
ances of high Serbian officials at home and abroad.
“ 10. Notify without delay that the above measures are exe
cuted. Reply before G p. m. on Saturday, July 25.”
The answers to the 10 points may be summarized thus:
“ 1. Yes; will suppress all anti-Austrian publications.
“ 2. Y es; will suppress the Narodna Odbrana and similar so
cieties.
“ 8. Y es; will expel all anti-Austrian teachers and teaching as
soon as evidence is given.
“ 4. Y es; will expel all anti-Austrian officers and officials, if
Austria will furnish names and acts of guilty persons.
“ 5. Y es; will accept collaboration of Austrian representa
tives in these proceedings, as far as consonant with principles
of international law and criminal procedure and neighborly
relations.
“ G Yes; will take the judicial proceedings; will also keep
.
Austria informed; but can not admit the participation of Aus
trians in the judicial investigations, as this would be a violation
of the constitution.
“ 7. Y es; have arrested Tankositch; ordered arrest of Ciga
novitch.
“ 8. Yes; WRI suppress and punish traffic in arms and ex
plosives.
“ 9. Yes; will deal with the said high officials, if Austria will
supply evidence.
“ 10. Yes will notify without delay.
“ If this answer not satisfactory, Serbia will abide by decision
o f The Hague Tribunal.”
9 2 7 2 7 — 17258
10
Everybody felt that the Hapsburg note did not seek or con
template honorable adjustment, but arbitrarily imposed impos
sible conditions and really meant war, as indeed it did. for in
48 hours Serbia was actually invaded.
The record shows that every possible effort was made by the
authorities of England, through Lord Grey, by the authorities
of France and of Russia, to reach an adjustment, and that it
was the refusal of the German Emperor to cooperate with Lord
Grey which led to the failure to avert the war on, Serbia by
Austria, which was instantly followed by the German Emperor
issuing an order to mobilize and then declaring war on Russia
and on France and the sudden and violent invasion of Belgium.
Luxemburg, and France, and Russia; and the German and
Austrian Emperors and their armies were prepared. Luxem
burg was not prepared. Belgium was not prepared. France
was not prepared. Great Britain had no army. Russia had no
materials ot war, had no factories, no adequate means of wag
ing war. The fact that all the invaded countries were unpre
pared, and that the German Army had reached the highest point
of its efficiency and preparedness, is the damning answer of all
history to the shameless contention of the German leaders that
they did not bring on this war, but that it was thrust on them.
Let us thank God Himself that they have the decency to pay
tribute to the love of justice and righteousness in the hearts of
mankind by pretending, at least, that they are not responsible
for this gigantic cataclysm in which all mankind is involved and
the blood of all nations is being shed.
Here is a case where the house of Hapsburg and its military
bureau, regardless of the Parliament of Austria-Hungary, re
gardless of public opinion of the people of Austria-Hungary,
took a step to precipitate war on Servia on a few hours’ notice,
knowing it threatened a general European war, which, indeed,
instantly followed.
Here is an example of where the house of Hohenzollern and
its military bureau refused to cooperate in reaching an adjust
ment of the threatened war of Austria against Servia, which
the leading powers of Europe earnestly endeavored to avoid in
the hope of avoiding a general European war.
“ A C T IO N S
SPEAK
LOUDER T H A N
W O R D S .”
The German and Austrian Imperial Governments stand for
ever condemned by the judgment and conscience of mankind.
And then Germany, violating her plighted faith to Luxem
bourg for protection of neutrality, swept with violence the
treaties aside, treated them as “ scraps of paper,” and drove her
soldiers through Luxembourg in violation of the law of nations
and of good faith. The same thing is true of Belgium. The
German Government violated its faith to the nations of all the
world. I have always regretted that the United States did not
on that instant raise a strong protest against this violation of
international law, although under the treaties and under the
understandings of The Hague we were not called upon or ex
pected to do it.
It will be remembered that it was the ambition of the house
of Hohenzollern which led to the war between Prussia and
France in 1870. The Hohenzollerns nominated a hereditary
Hohenzollern prince to be King of Spain.
92727—17258
11
They wanted to be on both sides of France for “ friendly ”
purposes, so that they could embrace France conveniently when
the time was opportune. France naturally objected, and because
of the excitement which it created in France the foreign office
of France indicated to the King of Prussia, William I, that
they would like to have an assurance that the French peace
would not in the future be threatened in that way by the nomi
nation of a Hohenzollern prince to take the Spanish crown.
They had a right to ask that. Bismarck, the head of the mili
tary machine, the adviser of William I, changed the dis
patch sent from the court of William I to Paris in such a
way as to leave the impression of an insult to France, and
in that way, by artfully playing upon the passions of the
French King and upon his pride he was led to take the initial
step. It is exactly as though a trained duelist would step on
the foot of an innocent man and then, when the innocent man
resented it, shoot him on the spot. That was the act of Bis
marck. The French at that time were utterly unprepared;
there was no order; there was perfect confusion. The Prus
sian military machine, in good working order, under Von Moltke,
up to the last ounce of working efficiency, pounced upon France,
besieged Paris, starved the people of Paris to utter exhaustion
and surrender, and imposed an indemnity of 5,000,000.000
francs on the French people, and then, through the prestige
gained by overwhelming unprepared France in that way, and
through this gigantic fund, established the German Empire,
with the hereditary absolute King of Prussia as the official
Emperor of the German Empire. That is what occurred.
The Holienzollerns have been active in putting princes of
Hohenzollern blood on the thrones of adjacent kingdoms, as
in Greece, and just as they proposed to do recently in estab
lishing a kingdom of Poland.
They have been aiming to get control of the whole world.
That is their real purpose.
Just as in recent times the peace of Europe has been over
thrown by the Hohenzollerns and the Hapsburgs, so in the days
of Frederick the Great Europe was kept in a turmoil by Fred
erick the Great and his military bureau.
The first act of Frederick’s reign after writing his famous book
“Anti-Machiavel,” in which he denounced the dishonest doc
trines of statecraft of Machiavelli, was to practice the craft of
Macliiavelli and violate the treaty of Prussia •with Austria by
invading and secretly entering the unarmed Province of Silesia
with a large army. During the conquest of Silesia Frederick
made a treaty with France, which he secretly betrayed by send
ing an authorized agreement to Austria, and which was ac
cepted by Austria, in contravention with his obligations to
France. Frederick then, having by this ruse obtained the evacu
ation of Silesia by Austria, promptly denied having authorized
the agreement which Austria had accepted and by which he ob
tained the retirement of the Austrian troops.
The house of Hohenzollern should not be regarded merely as
a dynasty ; it is a dynasty interwoven with a gigantic military
machine under the domination of the King of Prussia, who is
ex officio Emperor of Germany and active commander in chief
of the army and navy.
12
Germany is governed substantially by the military powers,
who may illtreat the German subject with perfect impunity.
The German youth and the German citizen are taught from
their childhood to regard their obligations to the army and
the Kaiser as the first duty of good citizenship, and the ideals
of the army have been in this way grafted in a large measure
into public opinion of the German people, who have been led
to believe that loyalty to Germany and the German people and
loyalty to the Kaiser and his war machine are identical.
When William, therefore, under the pressure of his war ma
chine, gave the order of mobilization, the citizens of Germany
had no alternative except death but to seize their rifles and go
to the trenches in an assault upon their neighbors.
There were 4,000,000 socialist voters who were thus forced
into the ranks against all their principles of international broth
erhood. They were driven through Belgium against their so
cialist brothers of Belgium, with unspeakable atrocities com
mitted by the German soldiers; they were driven against France
and Italy and Russia, against their socialist brethren, without
any regard to their long-taught principles of international
brotherhood. They could not help themselves. They had no
power of organization. They dared not, under penalty of death,
take the first step toward liberty. They were unhappily under
the irresistible domination of Prussian militarism; under a monarcliial autocratic structure of government which they had never
been strong enough to change into a democratic government of
the German people, by the German people, and for the German
people.
Under a democracy or under a limited monarchy, with a re
sponsible ministry and a parliament in control of government,
this enormous disaster to the German people, to the Austrian
people, to the people of all Europe, and to the people of America,
and to the people of the world Would not have occurred.
The world ought not to permit the recurrence of this gigantic
disaster at any future time, and the only way in which to pre
vent its recurrence is that the world shall demand, as England
is demanding, as England has demanded, as France has de
manded. as Italy has demanded, as Russia and America are now
demanding, the end of the warlike and irresponsible government
of Prussian militarism, the overthrow of the Hohenzollerns, and
the establishment of a government truly responsible to the
German people.
Mr. President, these considerations are far more important
considerations justifying war against Prussian militarism by
the people of the United States and by all the Republics on the
face of the earth than even the murder of our citizens and the
submarining of our ships, because the house of Hohenzollern
and the house of Hapsburg are sworn and deadly enemies to
the democracies of the world, and if they succeed in overthrow
ing the democratic people of France, England, Italy, and Rus
sia this military machine would immediately make war on us,
and with their millions and millions of trained and seasoned
soldiers they might devastate America before we could organize
our armies in adequate resistance.
I do not underestimate or ignore the tragedy upon tragedy
which has attended the invasion of our international rights.
92727— 17258
13
On the Lusitania, without warning, we had 114 American
citizens murdered on the high seas in cold blood, in violation
of international law.
On the (J11Iflight we had two Americans killed without
warning.
Mr. President, it is one thing for an American citizen to be
killed in a street fight in a foreign country, to be murdered in
a foreign country by some irresponsible citizen or subject of a
foreign country, and it is another thing when the responsible
head of that Government commits murder on a single son of this
Republic by or through executive, military, or naval orders.
On the Armenian we had 23 Americans killed;
On the Iberian we had 3 Americans killed;
On the Anglo-Californian we had 2 Americans killed;
On the Hesperian we had 1 American killed;
On the Arabic we had 3 Americans killed ;
On the Persia we had 2 Americans destroyed;
On the Ancona we had 7 Americans killed;
On the Englishman we had 6 Americans killed ;
On the Sabota we had 1 American killed ;
On the Marina we had 8 Americans destroyed ;
On the Russian we had 17 American citizens destroyed;
On the Eaveston we had 1 American destroyed;
On the Vedamore we had 10 Americans killed;
On the Turino we had 1 American killed;
On the Athos, 1 American killed ;
On the Laeona, 8 Americans were lost;
On the Sjostad, 1 American killed ;
On the Vigilancia, 5 Americans killed ;
On the Ilealdton, 7 American were lost;
On the Crispin, 19 Americans were lost; and 18 of our Ameri
can ships have been torpedoed, sunk, or burned by this subma
rine warfare, not to mention innumerable ships—over 700 ships—
belonging to other neutral nations, and numbers of citizens of
other neutral nations destroyed, because they had the courage to
maintain their international rights on the high seas.
Our citizens have been ordered to keep out of and not to dare
exercise their international rights on the high seas within an
arbitrary zone a thousand miles long and fifteen hundred
miles in the opposite direction surrounding Europe, where fourfifths of the commerce of the world must pass. We have been
ordered that we shall not pass this line under penalty of death.
That is military autocracy in action. Over 700 ships of neu
tral unoffending nations have been destroyed in violation of
international law and neutral citizens innumerable murdered
without notice to intimidate Great Britain and the world to a
profitable peace for the Prussian military autocracy.
Under the international law the failure to maintain our neu
tral rights on the high seas under the threat of the Prussian
military machine would be a violation of our neutrality, indeed,
with other nations, who have the right to buy goods from us
and have a right to ask the delivery of such goods in accord
ance with international law.
The United States has made every effort that it is possible
for a self-respecting nation to make in the endeavor to avoid
this war, and we have been unable to do it except at the sacri9 2 7 2 7 — 1725S
14
fice of our national rights, our national dignity, and our na
tional honor.
It will be remembered that in the Spanish War the Imperial
German Government furnished Spain with munitions of war
and undertook to interfere with us in Manila Bay through her
armed men-of-war.
It will be remembered that Germany attempted to interfere
with Dewey in Manila Bay.
It will also be remembered that the battleships of Great
Britain interposed and stopped interference of Germany with
the rights of this great Republic, although I think that Dewey
could have taken care of himself.
It will be remembered the German Government sent muni
tions of war to Mexico to be used against America.
It will be remembered the German Government undertook to
invade Venezuela in violation of the Monroe doctrine.
It will be remembered that the Imperial German Government
has distinguished itself by maintaining a fixed hostility to the
Monroe doctrine.
It will be remembered that we were compelled to send the
Austrian ambassador home, representing the Hapsburg War ma
chine, for his conspiracies against our peace in the United States,
when he, in conjunction with the agents of the Hohenzollern
machine, were promoting the blowing up of American factories,
filling our country with spies, promoting disloyalty in the United
States, and stirring up the hostility of citizens of German ex
traction against our peace, and stirring up the activities of
hundreds of thousands of German subjects, permitted by cour
tesy to reside in the United States, to interfere with our peace
at home.
It will be remembered that the German agents have been stir
ring up disorders in Mexico, in Central and South America, and
promoting war on our borders, and are now doing so at a very
great expense to the United States.
That pernicious activity of the agents of Prussianism will go
far to account for the-things we have found difficult to under
stand ; why the South American Republics did not feel more
friendly to us in view of our sincere friendship for them; why
little or no reciprocity. It was because the Hohenzollern agents
persuaded those people that we had designs upon their peace and
upon their property.
Perhaps the crowning offense against the United States was
disclosed in the proposal of Zimmermann, representing the Prus
sian military machine, to make an alliance with Mexico at a
time, January 19, 1917, when we were still at peace with the
Imperial German Government, in which Zimmermann proposed to
Mexico that Germany and Mexico would make war together on
the United States and make peace together; that Germany
would give Mexico general financial support and that Mexico
should reconquer the lost territory of Texas, New Mexico, and
Arizona ; and that Japan should be invited to join Germany and
Mexico in this war on the United States.
There was no alternative for the President of the United
States, charged as he was with the protection of the people of
the United States, informed as he was of all the things I have
mentioned, and very many other things equally siirster and cor9 2 7 2 7 — 1725S
15
roborative of the evil intent of the Imperial German Govern
ment against the United States, except to sever relations with
the German Empire and to take up the gauge of battle flung
into our teeth.
I agree with the President of the United States that it is a
fearful thing to lead this great, peaceful people into war, and I
“ also appreciate that the right is more precious than peace,
and we shall fight for the things which we have always carried
nearest our heart—for democracy, for the right of those who
submit to authority to have a voice in their own governments,
for the rights and liberties of small nations, for a universal
dominion of right by such a concert of every peoples as shall
bring peace and safety to all nations and make the world itself
at last free.”
No treaty and no agreement with the Prussian military gow
eminent or with the house of Hohenzollern is worth, or ever
will be worth, the paper it is written on except where those who
have the pledge have the military power to compel obedience to
the promise. Their treaties are “ scraps of paper.” If they
succeed in tins war, they will attack us at their convenience.
I am pleased now that we join with those who are determined
to establish liberty in the world. Together we shall establish
the peace and happiness of mankind.
The world can not allow the Prussian military machine to
succeed, otherwise their brutality would dominate the world.
I insert as an addenda to my remarks the brutality shown by
the official orders of the German military machine in deal
ing with the peaceful, unoffending people of Belgium, whose
neutrality they violated in willful disregard of their plighted
faith to the people of Belgium.
Mr. President, I fervently pray with all my heart that the
great, liberty-loving German people, who in their local affairs
have developed such a high degree of representative self-govern
ment, will overthrow the house of Hohenzollern, whose wicked
leadership has led them to this ruinous war and to the shambles.
Whenever the German people establish a democracy—a repre
sentative “ Government of the people, by the people, and for the
people ” —the democracies of the world will no longer be unwill
ing to trust the Government of the German people. Treaties with
republics are sacred; treaties with the Ilohenzollerns and Ilapsburgs are “ scraps of paper.” No assurances which the Hohenzollerns or the Hapsburgs can give to the democracies of the
world are worthy of any faith or credit whatever, when
against their fancied interest, as the history of the Hohenzollerns prove from Frederick the Second, of Prussia, down to
the invasion of Luxemburg and Belgium.
Mr. President, the American people wish the happiness and
the welfare of the German people and of the Austrian people
as Americans wish the happiness of the British and the French
and the Russian people. We wage our war not on the unhappy
German people but on the military autocracy and on the house
of Hohenzollern and the war machine that knows no conscience,
no justice, no mercy, but can only be persuaded at the cannon’s
mouth. May the Lord of Hosts bless our arms and protect the
liberties of mankind.
9 2727— 17258
Mr. President, I found in a western paper a few days ago an
editorial in the Muskogee Phoenix, Muskogee, Okla.. written
by Tams Bixby, Esq., former chairman of the Dawes Commis
sion. It breathes a high, pure note of Christian patriotism, which
I think deserves a place in our annals at this time. I wish to
read it. It is very short. It is entitled :
ONW ARD,
C H R IS T IA N
S O L D I E R S '.
The United States of America, given to the world by the Pilgrim
Fathers, through their love and devotion to the Omnipotent Ruler of
the destinies of men, has declared war on the anniversary of our
Sait°isSaUogethernfitting and proper that it should be as it is. Loyal
Americans will go forth to war not only as the champions of Uberty
and freedom and humanity but as soldiers of the cross
As He died
upon the cross nearly 2,000 years ago for the salvation of mankind
Americans will die upon the field of battle to make this a better world.
Through America's blood the world is to be purged ot a
heathenish dynasty that in its lust has forgotten the teachings of our
Savior. It is a noble thing to die and to suffer that men may be brought
neAmeHcaG°unafraid, girded with the armor of righteousness, strides
forth^tVbattle. There is no hatred in our hearts; we bear no malice
toward our enemies ; we ask no conquest nor material reward America,
true to the traditions that gave her birth, is to wage a noble. Christian
war We are willing to die if need be to bring to all men once more
tne message of peace on earth, good will. And in this sacred hour
America offers for her enemies the prayer of the cross. Bather, forgive
them : they know not what they do."
,
The call to arms has been sounded. America, champion of righteous
ness, of civilization, and of Christian'ty, with a clear heart and v\i!hnB
1 Amid* the^clamor and the cries of battle come the strains of the hymn
1
of the united allies of mankind :
“ Onward, Christian soldier ! ”
0 2 7 2 7 — 17258
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E I 1 9 17
Proposed International Convention to Establish Interna
tional Government to Coerce Militarism and Assure
Permanent Peace.
SPEECH
OF
I I ON. R O B E R T
O F
In
the
S
e n a t e
L. O W E N ,
0 K L A H 0 M A ,
of
the
U
n it e d
S tates,
Thursday, August 23, 1917.
Mr. OWEN. Mr. President, on August 20 I introduced a
joint resolution which I think may have a most far-reaching
effect upon this war if it should meet the approval of the
Congress.
This joint resolution proposes, as a war measure, an inter
national convention for the purpose of terminating international
anarchy, establishing international government in lieu thereof,
and coercing the Teutonic military conspiracy by the organized
commercial, financial, military, and naval powers of the world.
I desire to read the .joint resolution to the Senate, because it
explains itself, requires but little explanation, and is the
shortest way in which to present the proposals which I wish
to offer.
“ A jo in t resolu tion (S. J. R es. 9 4 ) proposing as a w ar m easure an in ter
n a tion al convention fo r the purpose o f term in atin g in tern ation al
an arch y , estab lish in g in tern ation al governm en t in lieu therof, and
coercing the T e utonic m ilita ry con spiracy by the organized com m er
cial, financial, m ilita ry , and naval pow ers o f the w orld.
“ Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That it is the
opinion of the representatives of the people of the United States
assembled in Congress that international government, supported
by international force, should be immediately organized to take
the place of the existing international anarchy; that competing
firmaments should be replaced by a noncompetitive international
finny and navy; that the Teutonic military conspiracy to domi
nate the world should be overthrown by the combined commer
cial, financial, military, and naval powers of the world.
“ That international government should be based upon the fol
lowing principles:
“ First. Every civilized nation and informed people should
have the unquestionable right of internal self-government, with
exclusive control within its own territory over immigration, emi
gration, imports, exports, and all i iternal affairs, with the right
to make its own political and commercial affiliations.
“ Second. The oceans and high seas should be free and open
under international rules. All international waterways, straits,
9633— 17843
2
and canals should be open on equal terms to the citizens of all
nations. Equal terms should be arranged for fuel, repairs, and
dockage in all ports for the ships belonging to the citizens of all
nations.
“ Third. All interior nations having no seaports should have
the right of shipment of their goods in bond on equal terms and
conditions, without tax, through any intervening territory to the
seaports of any other nation with equal access to shipping
facilities.
“ Fourth. That there should be established by international
agreement an international organization of all civilized nations
with an international legislative council to draft rules of interna
tional law to be submitted to the several nations for approval.
That when such rules of international law are approved by the
parliaments, or lawmaking branch of the governments of threefourths of the member nations, representing three-fourths of the
total population of all the member nations, such international
rules should be binding on all member nations. Such rules should
be limited to the powers expressly delegated to such international
legislative council and strictly confined to international affairs.
“ Fifth. The international legislative council should elect and
define the duties of a representative international executive cabi
net to execute and enforce the rules established as international
law.
“ Sixth. The international legislative council should have rep
resentatives from each member nation exercising a voting power
according to relative population, relative wealth, and relative
governmental development, to be determined by international
agreement.
“ Seventh. The international legislative council should estab
lish and define the duties of an international supreme court,
with power to pass upon all questions of international contro
versy incapable of diplomatic adjustment but with no power to
pass on questions affecting the reserved rights of nations.
“ Eighth. The international legislative council should formu
late the method for raising an international army and navy and
for establishing an international blockade and other means for
enforcing the rights of member nations under international law,
such army and navy to be provided and sustained by the member
nations pro rata according to relative population and wealth.
“ Ninth. With the conclusion of the present war the nations
of the world should agree to reduce in progressive stages their
land and sea forces to a point preferably not to exceed internal
or local police purposes and the quota required for the interna
tional army and navy.
“ With progressive disarmament and international peace safe
guarded by world government dissatisfied nations now held cap
tive by dominant nations for strategical purposes could be safely
given their liberty.
“ Tenth. That the international army and navy should not be
authorized to exercise military force further than to prevent or
suppress the invasion of the territorial integrity of any of the
member nations and in the blockade and embargo to enforce
international law.
“ Eleventh. That it should be a violation of international law
and the highest international crime for any nation on any
allegal ground to invade the territorial limits of another nation.
The penalty of such invasion should be immediate international
9633— 17843
3
blockade of the invading nation, embargo on all mail, express,
and freight to or from such nation, and the suppression of such
invasion by the international army and navy.
“ Twelfth. That nations backward in education, industrial,
and economic development, and in the knowledge of the prin
ciples of government should have their rights safeguarded on the
principles of freedom, humanity, and justice by international
agreement with a view to future self-government.
“ Thirteenth. It is clearly realized that the program of pro
gressive disarmament or permanent world peace is impossible
of attainment until the military forces now ruling the Teutonic
people, first, either voluntarily acquiesce in progressive disarma
ment and international justice as the basis of world peace;
second, are forced to do so by the Teutonic people; or, third, are
coerced to do so by the combined powers of the world.
“ Fourteenth. That in order to bring this war to an early
termination, the belligerent nations opposing the Teutonic
powers should immediately cohere on a plan of international
government pledging justice and peace to all member nations
and the coercion of the military autocracy of Prussia by the
commercial, financial, military, and naval forces of the world,
giving assurance, nevertheless, to the Governments of Germany
and Austria of their willingness to admit the Teutonic powers
as members of the proposed international union on equal terms
with other nations when they shall have met the conditions and
given satisfactory guaranties.
“ Fifteenth. In our opinion no reliance should be placed upon
the vague suggestions of peace of the Teutonic military autoc
racy, but that their obscure proposals should be regarded merely
as a military ruse. The peace resolution of the Reichstag, while
promising well for the attitude of the German people, when they
achieve self-government, can not at present be regarded as a
proposal binding on or capable of enforcement by the German
people, because they do not control their own Government, but
are mere subjects and puppets of a military autocracy which
has long conspired and still dreams of conquering the world by
military force and terrorism. The United States and the nations
opposing militarism should strenuously prosecute the war with
every available resource, and no separate peace should be made
by any of them until the menace of the military autocracy of
Germany is removed.
“ Sixteenth. It is our opinion that if a world-wide agreement
can be established on the above principles, and the men now
engaged in slaughter and destructive activities can be re
turned to productive industry, the world could quickly recover
the gigantic shock of the present war and would be able without
serious difficulty to soon repair the material injuries and losses
already suffered.
“ Seventeenth. The United States does, not enter this war for
material advantage, for any selfish purpose, or to gratify either
malice or ambition. The United States will not approve forcible
annexations or mere punitive indemnities, but it will approve
a free Poland, the restoration of territory wrongfully taken
from France and Italy, and restorative indemnity to Belgium
and Serbia, and the adjustment of other differences by inter
national conferences. It will favor extending international
credits for the restoration of all places made waste by war.
The United States enters this war in self-defense; to protect its
963 3 — 17843
4
own citizens and the nations o f the world in their present and
future rights to life and liberty on land and sea. It does not
wish the world to remain an armed camp.
“ Eighteenth. No peace is desirable until the world can be
safeguarded against a repetition of the present war. Competi
tive armaments must be ended and replaced by international
cooperative armaments in order to assure permanent world
peace.
“ Nineteenth. That the President o f the United States shall
immediately submit the above resolution to the belligerent na
tions now defending themselves against Prussian military autoc
racy and invite them and all neutral nations by wire to an
international convention for the purpose o f considering the
above principles and taking affirmative action for the early sup
pression o f the Teutonic military autocratic conspiracy by the
combined commercial, financial, military, and naval powers of
all nations.
“ Twentieth. The sum of $400,000 is hereby appropriated to
meet the cost o f promoting such convention.”
Mr. President, in waging war on the Prussian military autoc
racy for the suppression of its conspiracy to rule the whole
world by military force and terrorism the people of the United
States have determined to use every resource at their command
until this object is accomplished.
The Pan-German leaders are in control of the governmental
powers and of the Army and Navy of Germany. They demand
world power. They demand annexations and indemnities. They
regard treaties as scraps of paper. They have terrorized the
seas, made war on us and on all nations, and conspired against
our future peace. They are using the German people as puppets
and pawns on the checkerboard o f war.
In vain do the democratic elements of Germany—the sane
elements of Germany—urge international justice. The military
autocracy denounces the voice of moderation, of justice, of inter
national reconciliation, except on their own terms and future
dominance. They pretend to be willing to make peace, but it is a
peace dictated by German victory that will leave the military
group stronger than ever. They pretend to favor peace, but it
is for the object of demoralizing the war-making activities of
free Russia and of other opposing nations, while the military
group gird up their loins for more strenuous efforts of a German
victory with arms.
The conspiracy of the Prussian military autocracy to rule the
world and destroy the democracies of the world is of long stand
ing, as the secret treaty of Verona completely demonstrates.
They capture neighboring territory and put the inhabitants to
laboring for the military powers. They capture adjacent people
and put the inhabitants in the trenches with rifles to help the
military conspiracy in its lust for world-wide conquest.
Mr. President, heretofore I have submitted the language of
the secret treaty of Verona. I call the attention of Senators
again to . this vital doctrine o f the Hohenzollerns, the Hapsburgs, the Romanoffs, the Bourbons. It is strange it ever found
the light of day. I beg you to listen to this language. It was
made in 1822 and resulted in our issuance of the Monroe doc
trine to tell them to keep off our democratic Western Hemi
sphere.
9 633— 17843
SECRET
TREATY
OP
VERONA.
The undersigned, specia lly au th orized to m ake som e ad d ition s to the
treaty o f the holy allia n ce, a fte r h a vin g exchanged their respective
cred entials, th ey agreed as fo llo w s :
A rticle 1. T h e high con tractin g powers, being convinced th a t the
system o f rep resentative governm en t is equally as incom patible w ith
th e m onarchical prin cip les as the m axim um o f the sovereignty o f the
people w ith the divine rig h t, engage m u tu a lly , in the m ost solem n
m ann er, to use a ll th eir efforts to pu t an end to rep resentative govern
m en ts and to prevent its being introduced in those countries w here i t
is not yet know n.
(See the Congressional Record, A u g . 13, 1 9 1 7 , p. 6 5 5 4 .)
Article 2 of that treaty pledged the destruction o f the liberty
of the press, because it was an agency by which representative
governments, by which the liberty of men, made progress.
This treaty was framed in the interest of and signed by
Metternich, representing the Hapsburg dynasty of Austria;
by Bernstet, representing the Hohenzollerns of Prussia; by
Nesselrode, representing the Romanoffs of Russia.
The Hohenzollerns have steadily pursued the policy to which
it solemnly pledged its efforts in this treaty to destroy the
democracies of the world and to suppress the liberty of the
press.
They now have behind their policy 170,000,000 people— Bul
garia, Turkey, Austria—under the masterful control of the
Prussian autocracy.
The world lias not aroused itself any too soon if it wishes the
democracies to survive.
It would be an act o f madness for the world to temporize
with this spirit, with this set and fixed policy nf the Hohen
zollerns of the Prussian autocracy.
German diplomacy throughout the world has been busy in
weakening other nations whose powers might be used against
the military autocracy.
I submit the record of the Hohenzollerns as compiled by the
Security League (Exhibit D ), which is convincing to any
student of history.
They have gone to South America, to Central America, and
to Mexico, and have made those people believe that the United
States, loving liberty as it does, willing to make sacrifices for
the good of mankind as it has been, free as it is from any desire
to annex the territory of other nations—they have made those
nations of the Western Hemisphere believe that the United
States was the Collossus of the north, waiting a convenient time
in which to absorb them and their property and overthrow their
liberty.
Mr. SHERMAN. Mr. President-----The PRESIDENT pro tempore. Does the Senator from
Oklahoma yield to the Senator from Illinois?
Mr. OWEN. I yield to the Senator from Illinois.
Mr. SHERMAN. I am in full sympathy with what the Sena
tor states. Would the Senator favor waging war to depose
the present reigning house of Germany?
Mr. OWEN. Absolutely. That is what I am waging war on
right now.
Mr. SHERMAN. And not leave it to the German people?
Mr. OWEN. And not leave it to the German people. I am
not willing that the German people should be led by the
Hohenzollern house under a military autocracy that threatens
every neighboring nation and has finally gotten in its grasp
0633— 17843
6
A fi:;
'H
(
''" 'I f I
i. 'it;.;; ;
170,000,000 threatening the democracy of the world. If the
Germans wish to use the Hohenzollerns as a social ornament, we
should perhaps raise no objection; but if they use them as the
head and front of a conspiracy to assault the democracies of
the world and threaten our future peace, we should not agree
to i t ; if the Hohenzollerns use the Germans, and, dominating
them, compel the poor Germans to make war on others, then even
the Germans should help to put this Jonah into the sea.
Mr. SHERMAN. May I inquire further if the Senator would
restore the independence of Bohemia as a part of the AustriaHungary Empire?
Mr. OWEN. Mr. President, the policies which are being laid
down in this joint resolution will lead to the liberties of all
the Teutonic people, including the people of Bohemia.
Mr. SHERMAN. That would follow with the restoration of
Poland ?
Mr. OWEN. It would follow with the restoration of liberty.
Mr. SHERMAN. I ask specifically about Poland.
Mr. OWEN. I will answer the Senator by saying that both
the German authorities and the Russian authorities agree upon
an independent Poland. They differ as to means.
Mr. SHERMAN. That was the point. I wish to go along
with the Senator on all these things. I think we are substan
tially agreed that the restoration of Poland will require some
disciplining of one of our present allies. In 1772 the original
partition of Poland by Russia, Austria, and Prussia took place.
Mr. OWEN. I will place in the R ecokd, that was done by
the Romanoffs, by the Hapsburgs. by the Hohenzollerns. I
will place in the R ecord now the evidence that free Russia de
sires a free Poland.
Mr. SHERMAN. There is no difference between the Senator
and myself on that.
Mr. OWEN. No, there is no difference, I am sime, in poli
cies and purposes between the Senator and myself. The time
has come for the United States to use every energy to organize
the [lowers of the whole world in suppressing the Teutonic mili
tary autocracy and suppressing forever its conspiracy to rule
mankind by military force and terrorism.
Mr. SHERMAN. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. SHERMAN. The President not long ago, within the last
two years, said that each independent sovereignty has a right
to determine its own form of government. He was particularly
speaking of Mexico at that time. That does not apply to Ger
many, does it?
Mr. OWEN. I think it does most fully, most completely.
That is what I desire and hope to see.
Mr. President, in organizing the world to break down the
Teutonic military conspiracy against the world the world should,
nevertheless, give assurance to the Teutonic people that the world
does not wish to crush the Teutonic people or require o f them
more than absolute justice demands in the way of restoring ter
ritory wrongfully taken, property seized, appropriated, or de
stroyed by the Teutonic people under the leadership of the
Prussian military autocracy.
I have submitted Senate joint resolution No. 94, containing a
plan which I believe will lead to an earlier overthrow o f the
Teutonic military conspiracy, which will lead to an earlier
.
*
9633— 17843
■■
7
awakening of tlie Teutonic people to the clanger of such leader
ship, and to the necessity of their demanding the right of selfgovernment in order that sanity may be restored to their councils.
My proposal is an immediate international convention of all
belligerent and neutral nations to establish an international gov
ernment, with legislative, executive, and judicial powers and an
army and navy to enforce the rights of member nations and to
coerce Prussian militarism.
Mr. President, we have not any international law. The socalled Hague Conventions are scraps of paper’; they are unani
mous-consent agreements. Behind those conventions the
Ilolienzollerns concealed their military preparations until they
could pounce upon their neighbors unawares. Those conven
tions are worse than useless, they have served an evil purpose.
But the fact that 32 nations there agreed upon the adoption of
compulsory arbitration, the fact that 32 nations there desired
to bring about a means of ending international war and
anarchy, the fact that those 32 nations represent seven-eighths
of the people of the world, gives every reason to us to believe
that they could now be cohered together in such a way as not
to interfere with individual nations, not to interfere within
the bounds of any nation, but use the combined efforts of all
to prevent any nation becoming an international outlaw and
threatening the liberties of the world.
Mr. SHERMAN. Mr. President-----Tiie PRESIDENT pro tempore. Does the Senator from Okla
homa yield to the Senator from Illinois?
Mr. OWEN. I yield to the Senator.
Mr. SHERMAN. What would the Senator do with the Ger
man philosophers like Nietzsche and historians like Treitchszke?
Mr. OWEN. I would leave them to the German people, who
will take care of them.
Mr. SHERMAN. They are the responsible foundation, Mr.
President, of the servility of the German people who have sub
mitted to the doctrines of militarism.
Mr. OWEN. I can not agree with the Senator from Illinois in
that respect.
Mr. SHERMAN. If the Senator will permit me, the philoso
phy of Neitzsche is the foundation for the work of all the Ger
man professors who have led to the subordination of the civil
to the military power.
Mr. OWEN. That is quite true; but these professors and these
teachers are the hirelings of the Hohenzollerns, who for over a
hundred years have had eulogy after eulogy paid for in Ger
many.
The Hohenzollerns are responsible for these moral, historical,
psychological lunatics who have helped to make German opinion
insane.
Mr. President, some critic has said, in relation to this world
cooperation which I propose, “ This is Utopia. ’
My answer is, first, Utopia is better than hell, and, second,
that this proposition is not Utopian, and, third, it is already
nearly an accomplished fact in the union of the great belligerents
now waging a common war on Prussianism. ^ Seventeen nations
are now cohering on the battle line of Russia, of Italy, of Bel
gium, of Prance; 17 nations now are bound together in bonds
of s^el and of brotherhood against military autocracy ruling
9633— 17843
1 I
(
1
!
8
iK
:«j
the world. We have only to take the step to bring them together
around the council table, but it takes initiative to do it. Some
nation has got to take the first step of inviting cooperation.
I pray the Father of us all it may be our great Republic that
may perform this humane task and justify the prophecy of
France in giving us the Bartholdi Statue—
“ L ibekty E nlightening the W ould.”
You will remember, Senators, that in 1899 Nicholas, although
a Romanoff, in the compassion of his heart, proposed to the na
tions of the world gradual and universal disarmament. Who
was it that defeated it? It was William II and his Teutonic
group of military autocrats. Who was it, when The Hague Con
vention met in 1899, stood in the way of a similar proposal? It
was the same group. Who was it, in 1907, who prevented the
coherence of the world to prevent future wars? It was the
Teutonic group again, led by William II.
Mr. President, without any adequate organized effort on
the part of the United States, 17 out of 44 nations at The
Hague have already declared war on the Prussian autocracy,
to wit, Great Britaiu, the United States, France, Portugal,
Italy, Russia, Serbia, Montenegro, Roumania, Greece, Japan,
China, and little Cuba, and Panama, and Siam, and Liberia, and
San Marino. These nations now at war with the Prussian
military autocracy represent over tliree-fourtlis of the people of
the whole world.
Brazil, Bolivia, Guatemala, Honduras, Nicaragua, and Haiti
have severed diplomatic relations and are on the point of war.
Argentina, Peru, Chile, and others are on the point of sever
ing diplomatic relations.
Seven-eighths of the people of the world are at heart opposed
to the ambitions of the Prussian military autocracy, and the
United States should strenuously take steps to induce every
neutral nation to combine with the entente allies in making war
on the Prussian military autocracy. There are compelling rea
sons to justify the neutral nations to cooperate. We should
give voice at the same time to the aspirations of mankind for the
establishment of a means by which to assure through all future
time the liberty, the peace, the happiness of all mankind. Tins
is what every nation wants. China, the reserved, the oldest of
organized nations, understands this, as shown by the presi
dential mandate declaring war on the Teutonic powers.
I beg Senators to listen to this language of the Far East. The
proclamation declares:
The chief aim of this declaration is to put an end to the calamities
of war and hasten the restoration of peace. * * * Until considera
tions involving the existence of the nation forced this momentous de
cision, it was not thought possible that its rights—
China’s rights—
under international law should have become impaired, the peace of the
world retarded, and the position of the family of nations undermined.
.We are forced to fight in reestablishing the family of nations and to
share in the happiness and Denefits to be derived therefrom.
This mandate was signed by the premier of China and all the
ministers.
Those ideas undoubtedly are American ideas, and if they were
not transplanted to China previously, certainly they were pre
sented by tiie representatives of the United States now at
9 0 3 3 —17843
9
Pekin. What persuades China will be presuasive also as to
other nations.
Every nation which has already declared war upon the Prus
sian military autocracy has been moved by the spirit of selfdefense against an international outlaw, against international
anarchy, and in safeguarding its own future peace.
And the same considerations which have moved 17 nations
to declare war, representing three-fourths of the inhabitants of
the world, will suffice to cohere them in an international govern
ment against a future war by the Prussian military autocracy,
and persuade every other self-respecting nation of the world
to adhere to the same policy, except perhaps Denmark, Holland,
and Switzerland, who stand in deadly awe of the contiguous
Teutonic military forces, and they will adhere when the present
war is over.
Mr. President, I believe the principles which are laid down
in the proposed resolution as a basis of international govern
ment will be acceptable, in substance, to all the nations of the
world, and to the better elements of the Teutonic people, but
are not acceptable, of course, to the war-mad Prussian Pan
German elements. The Pan German element demanding the
doctrine of “ Deutschland Uber Alles ” will have to be coerced
at home or conquered by foreign armies.
There is some reason to believe that the German people are
about to awake from their dreams, and that even the military
group may be coerced by German opinion; but certainly the
world will never permit to prevail the conception of Gen. Von
Liebert, a spokesman of the German war party, who is quoted
in a speech at Kathenow, Prussia (Washington Post, Aug. 20,
p. 3), as saying:
We can not sign a peace before we have Flanders coast, a colonial
empire, and maritime ba^es. Should we not realize this now, we must
prepare to work for it after the war in view of the 7iext war.
Mr. President, the Prussian military autocracy is not going
to have the power or opportunity to lead the world into any
“ next war.” It is going to be disarmed by force, if necessary;
and if the German people insist upon backing this war-mad
Prussian conspiracy, the German people will unavoidably reap
more unhappy consequences than are already in sight.
Gen. Von Liebert does not express the body of German opin
ion. The majority of the Reichstag seem ready for peace and
to abandon the Pan-German military program of annexation
and indemnity on their neighbors as a condition of peace. The
willingness of the Reichstag to forgive Belgium and France
and excuse them from the payment of indemnities is a sample
of Teutonic magnanimity and lack of humor.
Hugo Haase on July 19 offered a resolution in the Reichstag
representing a minority view, however, which shows some evi
dence of sanity, as follows:
The Reichstag strives for a peace without annexations of any kind
whatever and without war indemnification, upon the basis of the rights
of the peoples to decide their own destinies. In particular, it expects
Ihe restoration of Belgium and the repair of the wrong done to Belgium.
The Reichstag demands the initiation of immediate peace negotiations
upon the foundation of this program. It demands an international agree
ment about general disarmament, freedom of international trade and
intercourse unrestricted international freedom of movement, an inter
national agreement tor tht protection of workmen from exploitation,
9633— 17843
10
recognition of the equal rights of a State without regard to nationality,
sex, race, language, and re'igion ; protection of national minorities, and
obligatory international arbitration for the settlement of all disputes.
The urgent preliminary condition for the achievement of peace and
the carrying out of this peace program is the immediate raising of the
state of siege. Moreover, it is necessary to effect the complete democra
tization of the constitution and administration of the Empire and its
several States, and this must end in the creation of a social republic.
Herr Scheidemann, leader of the Social Democrats, on Au
gust 7, at Monheim, demanded a government really representing
the will of the German people, and said :
But that is still not enough. When the Reichstag met we said, “ This
thing has got to go further. We want democratization; we want a
clear declaration on the question of our war aims.”
The Reichstag with its peace program has invaded the foreign policy
of the Empire and brought about a complete defeat of the annexationists.
But now the fight is going on over the decisive influence of the people
in Empire and State. We* want a State government consistent with the
meaning of the suffrage message, and we want an Imperial Govern
ment consistent with the meaning of the Reichstag program. Our whole
foreign policy must be conducted consistently with this program. And
the German press must not be made the instrument of those who would
gladly abolish the Reichstag resolution altogether from the world.
Press and parliament belong to one another.
It is significant, Mr. President, tliat the authorities of Ger
many are now permitting on the interior of Germany an “ offen
sive campaign for peace.” It is significant that the proposals
of Pope Benedict are immediately approved by Austria, and
that the German authorities are indicating their disposition to
acquiesce.
But it is also true, Mr. President, that German opinion will
be greatly stimulated in favor of peace on the terms of inter
national justice and on the terms which the entente allies will
accept if we cohere against the Prussian military autocracy,
every nation on earth, which we can do, and do speedily, be
cause they are anxious to establish world-wide liberty to end
the terrorism of the Prussian conspiracy.
The proposal of the Reichstag and of the chancellor (Exhibit
A) solemnly declare that—
Germany took rip arms In defense of its liberty and independence
and for the integrity of its territories. The Reichstag labors for peace
and a mutual understanding and lasting reconciliation among the
nations. Forced acquisitions of territory and political, economic, and
financial violations are incompatible with such a peace.
Mr. President, the whole world knows that this statement,
while offered as a theory by the Prussian military autocracy to
the German people, is utterly false. The Prussian military autoc
racy took up arms for the purpose of annexation, indemnity, profit,
and world domination, and their leaders still confess and declare
this to be their plan in spite of the Reichstag resolution to the
contrary.
The unfortunate German people were mobilized and sent to
the shambles not in defense of German liberty but in unjust
offensive war on the liberty of Serbia, France, and Russia; not
in defense of German independence but in offensive war on the
independence of innocent neighbors; not in defense of the integ
rity of the territory of Germany but in offensive war on the
integrity of the territory of innocent Belgium, Serbia; then
France and Russia—the fixed Hohenzollern policy.
But it should not be forgotten, Mr. President, that the majority
of the Reichstag represents, in a way, and inadequately, the
0633— 17843
11
Social Democrats of Germany, who, with all the limitations on
suffrage, had 4.000,000 voters before the war, and the opinion
of the German socialist democracy is of importance in deter
mining the opinion of the German people, subjects and vassals
though they are. I submit the declared opinion of the German
Social Democrats. (Exhibit B.)
The German socialist democracy are, in fact, opposed to an
nexations of territory by force. They are opposed to war in
demnities. They are in favor of restoration of national inde
pendence of nations subjected in war, and while they take,
naturally, a German view in various particulars, they do favor
national disarmament and freedom of the seas, while the minor
ity socialists go to the extreme of democracy. (Exhibit B.) The
latter favor a republican Balkan federation of free people, and
they seek an international understanding on the basis of democ
racy. These opinions in Germany ought not to be entirely
ignored and these opinions will be immensely strengthened by
the activity of the allies on the firing line against the Prussian
military autocracy. They will be strengthened by the Germans
discovering that the whole world, is combined against the Prus
sian military conspiracy, and that the whole world desires to
deal justly by the Teutonic people, as well as to compel the Teu
tonic powers and people to respect the rights of other people
with the same scrupulous decency.
The entente allies, while pressing the battle on the trench
lines, should encourage the democratic elements of the Teutonic
Empires by giving them assurance of the just purposes of the
entente allies, and meet the false dogma of the Pan-German
militarists that the entente allies, if victorious, will crush and
enslave the Teutonic people.
The opinion of the Russian people is shown by the declaration
of the Provisional Government and the councils of workmen
and social delegates (Exhibit G) of April 9. 1917, of May 1. 1917,
of May 4, 1917, and of June 13, 1917. The Russian Government
desires an independent Poland. The Russian Government does
not seek annexations or indemnities for free Russia. It strenu
ously demands, however, that the menace of the Prussian mili
tary autocracy shall be ended by military force, and Russia
would agree, I hope, to the proposals which I have submitted.
English opinion, I am satisfied, would approve some world ar
rangement for the speedy coercion of the Prussian military
autocracy and would approve a world plan for the maintenance
of the future liberties, peace, and happiness of mankind. Mr.
Asquith very properly pointed out that the military autocracy
possessing the political power of Germany not only did not
give its free and full assent to the Reichstag resolutions,
limited as they were, but made equivocal comments that left
the autocracy open to demand a “ German peace ” based on
German victory, which will not be considered by the entente
allies, and he asks the German chancellor plainly a question
whether the German Imperial Government is ready to grant
Belgium absolute independence and make full reparation for
the colossal damage done that devastated country, and he stated
with great force that—
The German Government does not speak for the Reichstag, so the
Reichstag itself does not speak for, or at any rate does not give full
9633— 17843
12
expression to, the whole view and opinion of the mass of the German
people. I believe that to be at this moment one of the greatest obsta
cles to the attainment of peace. It is one which does not lie within
the power of the allies to remove. It lies within the power of the
German people. It can not be too clearly, too emphatically, or
too often stated this is a matter not for any governments but
for the peoples or for the governments only in so far as they can
claim to be the authentic spokesmen and interpreters of the peoples
for whom they stand. Once that is generally realized throughout the
democracies of the world, I believe that we shall be within measureable distance of a lasting and an honorable peace. Meantime we
should not be helping the advent of peace if we were to give the im
pression that there is any halting in our determination or any doubt
of our ability to carry on, if need be, the burden which we took up
with a clear conscience for great ends and which we can only in honor
lay down when we feel sure that those ends are going to be achieved.
Mr. Bonar Law, chancellor of llie exchequer, said—
They tell us that Germany is quite ready for a reasonable peace.
Why have the Germans never put down their peace aims in any shape
or form? Ours may have gone too fa r: but at all events, we had
the courage to state them before the world. Germany has never done
anything of the kind. And why? Because she does not mean what
those honorable gentlemean say she means, and because that would be
found out the moment any peace terms were put in black and white.
* * * We are not only fighting for the freedom of ourselves, though
that is the essence of our life; we'are fighting for the rights of other
nations besides Germany to live their lives in their own way. * * *
Now I come to what is the real aim so far as this country is con
cerned in this war. I have thought from the beginning, and I repeat
now, that the one thing which we are fighting for is peace, and
security, for peace in the time to come.
Mr. President, there is only one way in which to have peace
for time to come, and that is to end competitive armaments and
the ambitions of military dynasties. This can be done by inter
national government and the substitution of international
police in lieu of competing armaments and in no other way.
Mr. President, the fact that Pope Benedict proposes “ simulta
neous and reciprocal diminution of armaments ” with the ap
proval of Austria and apparently with the approval of the Ger
man Imperial Government, seems to promise that even the
Teutonic autocracy is coming to its senses.
We will help them to reach a condition of sanity by multiply
ing our war efforts and by coordinating every nation in the world
in this struggle against the world domination of the Teutonic
powers.
With the end of competitive armaments, the Teutonic military
dynasties 'would have no important function; they would have
no real power. The Teutonic peoples would then control their
own governments.
There would be no demand then for vassal States, with their
subject rifles and economic resources. The German people
would then have no need for the iron mines of Alsace-Lorraine
for war-making purposes, but the iron ores of Alsace-Lorraine
would be equally available for the German factories, the French
factories, or any other factories in Europe. The whole “ doc
trine of balance of power ” would be ended in Europe because
the balance of powT would not be then weighed in the scales
er
between one alliance and an opposing alliance, between Teu
tonic alliance and entente alliance. The balance of power would
be transferred to an international council of sovereign States in
the interest of every nation in the world. There would no longer
T
be any reason why there should not be organized republican
9633— 17843
13
States in the Balkans, where each people speaking a common
language could enjoy their own development and own selfgovernment in harmonious relations with others.
The struggle over the Italia Iridenta would end, and Austria,
who offered the Government of Italia Iridenta to Italy before
the war, would have no reason whatever for then refusing this
point under such favorable circumstances. The suspicions and
jealousies which have existed heretofore between the nations
would disappear before the establishment of progressive dis
armament and the establishment of international police.
Mr. President, Mr. Bonar Law very wisely said that there
was a great difference between the German people and the
German Government, and when he said :
We shall not have peace in the time to come unless the German people
are convinced that war does not pay, that their greatness and develop
ment must be found in other directions and not in plunging the world
into war.
Mr. President, I think the German people will ultimately be
satisfied that war does not pay. I earnestly hope that they may
soon be satisfied on this point. I hope so for the sake of the
youth of Europe, as well as for the sake of the youth of America,
and of the nations of the earth now at war with the Imperial Ger
man Government. This end will be more speedily attained when
the German people see that all the nations of the world are
organized to end the military autocracy that has led the German
people into this bloody conflict. The Germans will get no profit,
but severe losses in men and property, which daily grows more
•fatal to her interests.
Mr. President, on May 27, 1910, President Wilson, after the
issuance of the ultimatum to the Imperial German Government,
said:
Wc believe these fundamental things :
First. That every people has a right to choose the sovereignty under
which they shall live. Like other nations, we have ourselves no doubt
once and again offended against that principle when for a little while
controlled by selfish passion, as our franker historians have been
honorable enough to adm it; but it has become more and more our rule
of life and action.
Second. That the small States of the world have a right to eDjoy the
same respect for their sovereignty and for their territorial integrity
that great and powerful nations expect and insist upon ; and
Third. That the world has a rigl t to be free from every disturbance
of its peace that lias its origin in aggression and disregard of the rights
of peoples and nations.
So sincerely do we believe in these things that I am sure that I speak
the mind and wish of the people of American when I say that the United
States is willing to become a partner in any feasible association of
nations formed in order to realize these objects and make them secure
against violation.
There is nothing that the United States wants for itself that any
other nation has. We are willing, on the contrary, to limit ourselves
along with them to a prescribed course of duty and respect for the
rights of others which will check any selfish passion of our own, as it
will check any aggressive impulse of theirs.
On May 30, 1916, President Wilson stated at Arlington Na
tional Cemetery:
I have stated that I believe that the people of the United States are
ready to become partners in an alliance of the nations that would
guarantee public right above selfish aggression. Some of the public
prints have reminded me, as I needed to be reminded, of what Gen.
Washington warned us against.
lie warned us against entangling
alliances.
I shall never myself consent to an entangling alliance, but would
gladly assent to a disentangling alliance, an alliance which would dis9633— 17843
14
entangle the people of the world from those combinations in which they
seek their own separate and private interests and unite the people of
the world to preserve the peace of the world upon a basis of common
right and justice. There is liberty there, not limitation. There is
freedom, not entanglement. There is achievement of the highest things
for which the United States has declared its principles.
Mr. President, the program I have outlined is thus shown to
be in substantial accord with the views of the President of the
United States. I want to call your attention to what he said
in his address to the Senate on January 19, 1917:
No peace can last or ought to last which does not recognize and
accept the principle that governments derive all their just powers
from the consent of the governed, and that no right anywhere exists to
hand peoples about from sovereignty to sovereignty as if they were
property. * * * The world can be at peace only if its life is stable,
and there can be no stability where the will is in rebellion, where there
is not tranquillity of spirit and a sense of justice, of freedom, and of
right. * * *
There can he no sense of safety and equality among the nations if
great preponderating armaments are henceforth to continue here and
there to he built up and maintained. The statesmen of the world must
plan for peace and nations must adjust and accommodate their policy
to it as they have planned for war and made ready for pitiless contest
and rivalry. The question of armaments, whether on land or sea, is the
most immediately and intensely practical question connected with the
future fortunes of nations and of mankind. * * *
Let us plan for peace, Mr. President, by disarming on sensible
lines.
The President said further:
.
•
I would fain believe that I am speaking for the silent mass of
mankind everywhere who have as yet had no place or opportunity
to speak their real hearts out concerning the death and ruin they see
to have come already upon the persons and the homes they hold most
dear. * * *
No nation should seek to extend its polity over any other nation or
people, but that every people should he left free to determine its
own polity, its own way of development, unhindered, unthreatened,
unafraid, the little along with the great and powerful. * * * There
is no entangling alliance in a concert of power. When all unite to act
in the same sense and with the same purpose all act in the common
interest and are free to live their own lives under a common protection.
I am proposing government by the consent of the governed' that
freedom of the seas which in international conference after conference
representatives of the United States have urged with the eloquence of
those who are the convinced disciples of liberty; and that moderation
of armaments which makes of armies and navies a power for order
merely, not an instrument of aggression or of selfish violence. These
are American principles, American policies.
All these principles are involved in Senate joint resolution 94.
Mr. President, the Democratic platform of 191G voiced these
American principles, and the Republicans believe the same doc
trine :
We hold that it is the duty of the United States to use its power not
only to make itself safe at home but also to make secure its just in
terests throughout the world, and both for this end and in the interest
of humanity to assist the world in securing settled peace and justice.
We believe that every people has the right to choose the sovereignty
under which it shall live (government with the consent of the gov
erned) ; that the small states of the world have the right to enjoy
from other nations the same respect for their sovereignty and for their
territorial integrity that great and powerful nations expect and insist
upon ; that the world has a right to be free from every disturbance of
its peace that has its origin in aggression or disregard of the rights
of peoples and nations; and we believe that the time has come when
it is the duty of the United States to join icith ilic other nations of the
world in any feasible association that will effectively serve these prin
ciples and maintain inviolate the complete security of the highways of
• the seas for the common unhindered use of all nations.
9033— 17S43
15
Mr. Lloyd-George, who is the exponent of English opinion, at
Glasgow, June 29, 1917, struck the keynote when lie pointed
out the necessity, in obtaining permanent world peace, of end
ing military autocracies, jde said:
What will have to be guaranteed first of all by the conditions of peace
is that they shall be framed upon so equitable a basis that nations will
not wish to disturb them. They must he guaranteed hy the destruction
of the Prussian military power, that the confidence of the German people
shall be in the equity of their cause and not in the might of their
arms. May 1 say that a better guaranty than either would have been
the democratization of the German Government. * * *
No one wishes to dictate to the German people the forms of govern
ment under which they choose to live. That is a matter entirely for
themselves, but it is right ice should say we could enter into negotia
tions with a free government in Germany, with a different attitude of
mind, a different temper, a different spirit, with less suspicion, with
more confidence than we could with a Government whom we knew to
he dominated hy the aggressive and arrogant spirit of Prussian mili
tarism.
Mr. President, the destruction of Prussian militarism may
come in one of three ways—first, by consent of the military
leaders before physical destruction comes; second, by the will
of the German people before physical ruin ensues; third, by the
physical force of the military powers of the entente allies.
The third means will be more costly in life to all nations, but
will be applied if necessary, and is in very active operation at
this time.
Lloyd-George well said:
Now we are faced with the greatest and grimmest struggle of all—
liberty, equality, fraternity not amongst men but amongst nations;
great, yea sm all; powerful, yea w eak; exalted, yea humblest; Germany,
yea Belgium ; Austria, yea Serbia— equality, fraternity amongst peoples
as well as amongst men. That is the challenge which has been thrown
to us. Europe is again drenched with the blood of its bravest and best,
but do not forget these are the great successions of hallowed causes.
They are the stations of the cross on the road to the emancipation of
mankind. Let us endure as our fathers did. Every birth is an agony,
and the new world is horn out of the agony of the old world.
My appeal to the people of this country, and, if my appeal can reach
beyond, it is this :
That we should continue to fight for the great good of international
right and international justice, so that never again shall brute force
sit on the throne of justice nor barbaric strength wield the scepter of
righ t.
Mr. President, only by international government, backed by
international force, is this ideal possible; only by terminating
competing armaments and substituting therefor international
cooperating armaments shall we see this great prayer adequately
answered. Public opinion in the United States would assuredly
approve permanent world peace on the basis proposed by Senate
joint resolution 94.
The plan is essential—absolutely essential—to attain the ideal
of permanent world peace and the overthrow of progressive
militarism, so ardently desired by the statesmen of the entente
allies.
Mr. President, we already have 17 nations waging this war
in concert. We already have 17 nations allied together for the
suppression of the Prussian autocracy. We already have na
tions representing three-fourths of the people of the world
allied together for the purpose of crushing the menace to the
liberties of the world of Prussian militarism. These nations
ought to have their representatives meeting around a table
9633— 17843
V
16
for common action, declaring a common policy, and not com
pelled to carry on an interchange of views at variable distances
of thousands of miles which circle the earth from China to the
United States, from Japan to London. We ought to get to
gether in common concert, in a common understanding as to
international rules to safeguard our future relations toward
each other and toward the common enemy. What sound argu
ment can be urged against it? It is not an entangling alliance;
it is what President Wilson very appropriately called a “ dis
entangling alliance.” An alliance with one of two military
groups contending for greater power would be an entangling
alliance. An alliance with all the nations of the world to pre
vent any nation or group of nations threatening the world is
a disentangling alliance, which we ought to establish as speedily
as possible.
Mr. President and Senators, I have submitted the proposal.
I pray it may be considered thoughtfully by you and by the
thinking men of all nations.
Improve upon it, perfect it, but a ct; act at once, while the
iron is hot to hammer in shape the links which shall bind us
to other nations in bonds of fraternity, liberty, equality, and
guarantee to all mankind, including the Teutonic people, per
petual prosperity and happiness.
[For e x h i b i t s A, B, C, D see C o n g r e s s i o n a l R e c o r d , August
23, 1917, p. 6887.]
9633— 17843
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E : 1917
TO ESTABLISH THE FEDERAL RESERVE FOREIGN BANK
and thereby
MAINTAIN THE AMERICAN DOLLAR AT GOLD PAR THROUGHOUT
THE WORLD
FURNISH AMERICAN COMMERCE WITH STABLE EXCHANGE AND
CREDIT FACILITIES IN FOREIGN COUNTRIES, and
PROMOTE THE FOREIGN COMMERCE OF THE UNITED STATES.
SENATE OF THE UNITED STATES
FEBRUARY 25, 1918
W A S H IN G T O N
44883— 18251
1918
/
r
REMARKS
OF
HON. R O B E R T
L. O W E N .
Mr. OWEN. Mr. President, on February 20 I introduced a
bill (S. 3928) proposing to amend the Federal reserve act, and
to establish a Federal reserve foreign bank.
Mr. TOWNSEND. Mr. President, may I ask the Senator a
question ?
Mr. OWEN. I yield.
Mr. TOWNSEND. Does the Senator propose to bring up the
bill this afternoon?
Mr. OWEN. N o ; I do not. I am going to submit some re
marks upon it, because I want to give the reasons justifying the
passage of the measure when it has been properly considered
by the committees. Congress rarely moves beyond accepted
public sentiment, and this is a matter which I regard as of
very great immediate urgency.
I will call attention, for instance, to what is transpiring just
now in Great Britain. I found in the morning press this
statement:
“ Forty British banks, including some of the largest in the
British Empire, and with oversea branches, organized an asso
ciation of oversea banks for the purpose of furthering British
oversea trade and for the extension of banking facilities. This
institution will also furnish trade information to British mer
chants.
“ The British Government has fully approved this plan and is
rendering assistance and encouraging the organization of insti
tutions which have for their purpose the extension of British
trade.”
There are several of these important international organiza
tions being framed now in London. Also France is taking steps
along the same line. Germany has its bank plans adequately
organized now.
This bill which I have proposed contemplates a capital of
$100,000,000 authorized with a paid-up capital of $20,000,000,
the stocks to be at 5 per cent, nontaxable, and to be offered to
banks of the United States and to the public, and if not sub
scribed to be taken by the Treasury of the United States.
It gives corporate power to these banking institutions, au
thorizes a directorship of nine men to be appointed by the
President of the United States, and that these directors shall
be merchants and not bankers in the same way that the gov
ernment of the Bank of England is controlled by merchants and
not by bankers, these directors to serve for a period of nine
years, one being chosen annually. The functions of the bank,
the powers of the bank, will be “ to receive the deposits from
44883— 18251
3
American and foreign banks and bankers, from the United
States or foreign governments, in current funds in lawful
money, national bank notes, Federal reserve notes or checks,
and drafts, payable upon presentation, and also for the collec
tion of maturing notes and bills.”
“ The foreign bank may discount notes, drafts, and bills of
exchange arising out of actual commercial transactions—that
is, notes, drafts, and bills of exchange issued or drawn for
agricultural, industrial, or commercial purposes, or the proceeds
o f which have been used or which are to be used for such pur
poses, the Federal Reserve Board to have the right to determine
or define the character of tfie paper thus eligible for discount
within the meaning of this act.
“ The aggregate of such notes, drafts, and bills, bearing the
signature or indorsement of any one borrower, whether a person,
company, firm, or corporation, rediscounted for any one bank,
shall dt no time exceed 5 per cent of the net unimpaired capital
and surplus of said foreign bank, but this restriction shall not
apply to the discounting of bills of exchange drawn in good
faith against actual existing values. The foreign bank may
discount acceptances of the kinds permitted under the authority
o f this act.”
It shall have power “ to deal in gold and silver coin and bul
lion at home or abroad, to make loans thereon, exchange Federal
reserve notes for gold, gold coin, or gold certificates, and to
contract for loans of gold coin or bullion, giving therefor, when
necessary, acceptable security, including the hypothecation of
United States bonds or other securities which Federal reserve
banks are authorized to hold ” ;
“ To buy and sell, at home or abroad, bonds and notes of the
United States, bonds and notes of foreign governments, and bills,
notes, revenue bonds, and warrants, with a maturity from date
of purchase of not exceeding six months, issued in anticipation
of the collection of taxes or in anticipation of the receipt of
assured revenues by any State, county, district, political sub
division, or municipality in the continental United States, in
cluding irrigation, drainage, and reclamation districts, such
purchases* to be made in accordance with rules and regulations
prescribed by the Federal Reserve B oard;
“ To purchase and to sell, with or without its indorsement,
bills of exchange arising out of commercial transactions as
hereinbefore defined;
“ To establish from time to time, subject to review and de
termination of the Federal Reserve Board, rates of discount
and exchange and commissions for the opening of credits at
home or abroad, to be charged by the foreign bank for each
class of paper, which shall be fixed with a view to accommo
dating commerce and business;
“ To issue bank notes and receive Federal reserve notes upon
like terms and conditions as now provided for the Federal
reserve banks;
“ To open credits at home and abroad for account of domestic
and foreign banks or bankers, to facilitate exports and imports
to and from the United States and exports and imports to and
from one foreign country to another foreign country.”
I pause to say, as from China to Russia, which would go
through the United States, and which might be properly facili44883— 18251
-1
5
tated by tlie financial powers of the foreign bank which I have
proposed.
Further powers of the bank, “ upon the direction and under
rules and regulations prescribed by the Federal Reserve Board
to establish branches and agencies in foreign countries for the
purpose of facilitating commerce with the United States.
“ No bank, banker, corporation, or individual, other than the
foreign bank, shall sell dollar balances at less than gold par
except as payment for merchandise imported into the United
States without the express authority of the Federal Reserve
Board.”
Mr. POMERENE. Mr. President-----The PRESIDING OFFICER (Mr. II ollis in the chair).
Will the Senator from Oklahoma yield?
Mr. OWEN. I yield.
Mr. POMERENE. The Federal reserve act authorized the
different banking corporations to form branch banks abroad?
Mr. OWEN. Y es; it did.
Mr. POMERENE. Can the Senator state to what extent the
banks have availed themselves of that power and privilege?
Mr. OWEN. Practically not at all. At first the Federal re
serve law contemplated that they would do that voluntarily, but
they did not voluntarily establish these foreign branches.
Thereupon the Congress of the United States, at the instance
of the Federal Reserve Board, passed an amendment authoriz
ing the Federal Reserve Board to require them to do this; but
the Federal Reserve Board seems not to have found it prac
ticable for some reason to compel any of these banks to estab
lish foreign branches.
Mr. POMERENE. They have established foreign branches in
South America, have they not?
Mr. OWEN. No, sir.
Mr. POMERENE. The National City Bank?
Mr. OWEN. The National City Bank is not a Federal re
serve bank. Some American national banks have established
in the last three years several foreign branches. The National
City, of New York, has established a branch at Buenos Aires,
one at Rio Janeiro, and another bank or two in Brazil, one at
Caracas, one in Colombia, one in Cuba, one at Panama, I am
told, and perhaps several other branches. That, however, is a
private bank, a member of the Federal Reserve System, and a
very powerful institution, but still an institution run neces
sarily by the nature of its organization for profit.
Mr. POMERENE. It is given authority under this act to
organize?
Mr. OWEN. Yes; that is quite true; but there is no publicly
controlled bank with foreign branches all over the world charged
with the duty of furnishing the member banks of the great
Federal Reserve System with foreign exchange and with fu r
nishing importers and exporters with the credit facilities and
with the exchange facilities which are vital for the legitimate
and urgently needed expansion of our import and export busi
ness.
Mr. President and Senators, with a trade balance in our favor
of over $3,000,000,000 for 1917, and with the American dollar
backed by the largest amount of gold in the world, and backed
44883— 18251
f
6
by the most active industrial life in the world, the American
dollar is at a discount in the neutral countries of Europe of
over 20 per cent, and even in South American countries is at a
discount as high as 20 per cent.
The Secretary of State a few days ago, before the Committee
on Appropriations of the House of Representatives, found it
necessary to point out in his testimony there the astonishing
condition that the American dollar was at a discount prac
tically all over the world when all the world is indebted to
America. It ought to be at a premium under such trade condi
tions, and there is something radically wrong in our international
management when that condition is permitted to exist. It can
be corrected, as I shall presently show. We lost $100,000,000
last year by i t ; we lost more than that. We lost practically
$200,000,000 in our international exchange with Europe.
I submit, without reading, a table showing the imports and ex
ports for 1916 and 1917, amounting to $9,183,000,000 total of
visible imports and exports, and showing a trade balance in
favor of the United States of $3,378,000,000. (See Exhibit A.)
I pause to remark that the trade balances must always be
clearly understood as signifying only that state of the census
of shipment of commodities shown on bills of lading, and do not
in fact measure the full amount of international exchanges of
value, but only commodities shown upon the commodity manifest
customhouse records.
Our trade balance with Spain, for example, for 1917 was
$55,587,690, yet the Spanish peseta, instead of being exchange
able for our dollar at 19.30 cents, is selling for 24.30 cents, a
flat loss of 5 cents out of 20 cents, or 25 per cent loss. In point
of fact, the American dollar should be at 25 per cent premium
in Spain, and not 25 per cent discount, so that our loss justified
by the exchange balance of trade is twice as great as it appears.
At all events, we certainly have a right to demand that our dol
lar, notwithstanding, should be at gold par in Spain.
There is a flat loss of 5 cents out of 20 cents every time an
American merchant is compelled to buy a peseta with American
gold or with American credit based on gold. In point of fact
the American dollar should be at a 25 per cent premium In ex
change, because they require $55,000,000 of American money in
order to pay their debt to us. They need the dollars, if we are
only dealing with our exchange with them, and it is not fair to
us that we should be put in the attitude of being required to pay
a premium on their money when they ought to pay a premium
on ours, if the exchange of commodities between the two coun
tries is to determine that matter.
The fact that the Spanish peseta, however, is at a premium of
25 per cent means, in round numbers, that instead of an Ameri
can dollar buying 5 pesetas it buys 4. It means that our mer
chants who bought $36,000,000 worth of goods from Spain, which
they paid for in pesetas, receive in Spanish commodities 25 per
cent less than they would have received if our dollar was at gold
par in Spain. It means that the Spanish merchants who bought
$92,000,000 worth of goods from us get with their currency one
American dollar for 4 pesetas, and with that dollar, bought with
4 pesetas, get a like advantage in buying American goods, not
withstanding the fact that these pesetas in Spain do not leave
44883— 18251
7
Spain. The Spanish currency in gold thus buys more and our
gold currency buys less because of this unadjusted condition.
It means, as I understand it, that out of the transactions be
tween Spain and the United States in 1917 of $125,000,000 we
suffered a net loss amounting to a fourth of this sum, approxi
mately $33,000,000. It is just as much taken out of the United
States as if it had been taken out of the Treasury of the United
States and transferred in gold and given to Spain. It is taken
out from our merchants, from our consumers, from our nroducers, and given to the merchants and consumers of Spain.
The United States Government understands this difficulty and
is trying to correct it just now by arranging with France to
establish a French credit in Spain that will bring Spanish ex
change to par, because Spain is an international creditor. Take
it altogether she has shipped out more goods than she has
shipped in. So she is entitled to an international credit trade
balance, and that has to be offset either in commodities, gold, or
credit. The United States Government understands this diffi
culty, as I said, and is trying to arrange it. Spain has been re
luctant to do this because of the extraordinary trade advantage
of a premium on her currency to her and the matter has been
hung up by the Spanish authorities. Besides this, we were com
pelled to ship Spain $88,000,000 of gold to meet the debts of
Great Britain and France to Spain, only to end, nevertheless, to
our still unbalanced trade disadvantage, because Spain is still
an international commodity creditor. The Spanish merchant
takes 4 of his pesetas and buys an American gold credit dollar
in London and with these dollars buys American commodities
at a like discount, so the American exporter gets for his dollar
a Spanish credit of but 4 pesetas when he should get 5 pesetas.
He loses 1 peseta on every 4 pesetas, or 25 per cent loss. When
the American importer wants to buy in Spain he takes his
American gold dollar and, through London, gets 4 pesetas credit
in Spain, suffering a like loss, which then falls on the American
consumer in due course of trade.
Notwithstanding our furnishing $S8,000,000 of gold to Spain,
we still suffer the consequences of the credit trade balance of
Spain internationally considered.
The British and the French, both through private sources and
by privately owned banks, are correcting this trade disadvantage
of the premium on Spanish money, as far as some of their own
special merchants are concerned, by establishing private banking
credits in Spain and branch banks in Spain, which they will
maintain until this unjust premium on Spanish exchange disap
pears, thus avoiding the loss to certain favored merchants of
France and England, which our merchants are compelled to
endure by the failure of our officials and o f our bankers to safe
guard in like manner our merchants. We have so far failed in
the adjustment above referred to of furnishing credits in Spain.
The premium on the Spanish exchange can be removed in the
following w ays:
Either by shipments of gold to Spain to settle her international
credit trade balances or by arranging national or individual
credits in Spain to cover these international credit trade balances
until the international credit trade balances are removed, or by
shipments of commodities to Spain to overcome the international
44883— 18251
8
credit trade balances due Spain, or by forbidding arbitrage and
having England and France settle their balances directly, as
we would then do, and put our dollars at a premium.
The same thing is true in degree with Holland, Denmark, Nor
way, and Sweden. Our trade with Spain, including these coun
tries, amounted in 1917 to $450,000,000, involving a loss in 1917
of approximately $100,000,000 instead of a gain of $100,000,000,
to which we are entitled by our trade balances.
We have no orderly method to protect our American merchants
and American producers and American consumers against these
losses. Our international bankers are interested as bankers in
selling exchange, but they are not charged vith the responsibil
ity of establishing the American dollar at a premium or at gold
par. They are naturally content with their commissions, charges,
and profits for exchanges, which, apart from interest, amount
probably to at least $100,000,000 annually.
The United States, in order to establish the American dollar
at gold par throughout the world and maintain the American
dollar at gold par, must have a mechanism charged with the
duty of safeguarding the American dollar as far as possible,
such as I propose in the Federal reserve foreign bank.
For a half century the trade balances have steadily been in
favor of the United States. We have a right to expect that this
will continue, and that these trade balances will crystalize in the
ownership by the people o f the United States in securities and
properties scattered throughout the world. This is what has
made Great Britain the greatest financial power in the world.
Great Britain has always had the wisdom to maintain the pound
sterling at par. For this reason the pound sterling has become
the standard measure of value throughout the entire world and
has contributed largely toward making London the greatest com
mercial and financial center of the world.
The British Government buys London bills in New York and
uses credits in New York in order to balance the deficit of an
international trade-credit balance against her in order to keep
the pound sterling at about par, so that a British merchant who
handles the pound sterling as a measure of the transaction
knows what he is talking about when he makes a contract, and
the British Government finds it necessary to stabilize this
measure of the British merchant’s contracts. America has
not had the wisdom to understand this, and I am now engaged
in the business and the duty, as chairman of the Committee on
Banking and Curi’ency, of calling the attention of the country
to this matter in the hope that the Congress of the United
States will speedily correct it.
Mr. SHEPPARD. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. SHEPPARD. Through xvhat agency does the British
Government perform that function—through the Bank of Eng
land ?
Mr. OWEN. Yes; through the Bank of England, which
serves as the treasury of Great Britain; and the Bank of Eng
land is a bank whose directorship is controlled by merchants
and not by the bankers.
Mr. SHEPPARD. I understand that no commercial banke?
is a member o f the board of directors.
44883— 18251
9
Mr. OWEN. N o ; he is not permitted to be, for a reason the
United States ought never to lose account of— that that great
bank has for its function the protection of the industry and
commerce of Great Britain as a public institution. Although
the stock is owned by private hands, that matters not at all.
It is a public institution nevertheless, just as I propose here
that this stock may be owned by private hands; but still it
shall be governed by the United States Government. The
trouble with the banker is that he always thinks in terms of
interest, in terms of commission, and that is natural. That is
not a criticism of the banker; that is his business. He is a
merchant in credit and is not to be blamed that he thinks in
terms of interest and commissions, and I must not be under
stood as meaning to criticize him at all.
I am only pointing out that he is not properly the custodian
of the commerce of the United States; that is all; because he
looks at it as a thing to serve his interest instead of looking at
himself as purely to serve its interest. There is a difference in
the point of view which is obvious.
I have prepared a bill, which I now submit (S. 3928 *) amend
ing the Federal reserve act so as to establish a Federal re
serve foreign bank. The 12 Federal reserve banks have found
a field of such enormous activity in the domestic banking life
of the United States that they have not been situated for ade
quately handling foreign business, further than the acquisition
of a very small part of available foreign bills. They have utterly
failed to meet the services expected. The foreign bank proposed
is intended to serve as a medium through which all the reserve
banks may safely, conveniently, and economically transact for
eign business, if they w ish; may buy and sell foreign exchange,
and thus accommodate all of the banks in the United States,
doing business with the Federal reserve banks, and to give like
accommodation even to those banks and bankers who are not
members of the Reserve System, in order that our importers and
exporters, wherever located, may have every facility of buying
and selling foreign exchange and establishing credits here and
abroad for the purpose of buying foreign commodities and of
selling domestic commodities abroad. It is intended by this act
to provide banking accommodations to all our merchants who are
buying and selling goods abroad, and to enable them the better
to accommodate their home and foreign customers.
It has been said that nearly all the importers and exporters
ai*e located in New York City or in the immediate vicinity. As
a matter of fact, the lack of these facilities, the very thing of
which the country most justly complains, has compelled importers
and exporters from the Pacific States, the Rocky Mountain
States, the Mississippi Valley, and the Southern States to keep
agents in New York to transact their Import and export banking
business, and this at great expense to them, and, moreover, the
expense is one which has no justification in sound reason. In
fact this is a great disadvantage to the importers and exporters
of all the United States except New York City, and against
this the country justly protests. Moreover, it has a most in
jurious effect upon the commerce of the United States, because
1 See page 37.
44883— 18251
10
the lack of these facilities throughout the body of our country
prevents the expansion of export and import business with the
body of our country, and is a thing which is against the de
velopment and prosperity of the United States.
Moreover, it is against the greater expansion and the greater
prosperity of New York City itself, which would he beneflte ' if
the full powers of the United States in the export and import
business could be developed, and that to its highest capacity, for,
be it clearly remembered, finance is the handmaid of commerce,
not commerce of finance— financial power follows successful
commerce and decays with decaying commerce.
It has been said that this foreign bank would compete with the
few New York banks having foreign-exchange facilities. It
seems to me I heard something of this kind when we were fram
ing the Federal reserve act. Then these New York banks bit
terly complained that establishing 12 reserve banks would de
prive them of deposits, of prestige, and of money-making power.
Their lack of vision, as seen in the result, is fully evident. They
have gained deposits enormously; they have gained prestige;
they have gained increased power, with expanding power of
the United States and its banking system. Only a half dozen
New York member banks handle foreign exchange, and all of
them should have these facilities through the foreign bank I
propose.
The Federal reserve foreign bank would offer them facilities
for serving their customers more economically, more efficiently
than their own facilities can now afford. They would avoid
the expense of keeping large deposits abroad, the expense of
keeping foreign offices any further than their specialty might
require them, and they could use this bank as an economical
means of transacting their owrn business and would be able to
liquidate their foreign bills through this bank in a manner which
they can not easily do now. It would expand their power. It
is true, I think, that where they are charging unreasonable com
missions, unfair profits, and imposing unjust exactions which
hinder the commerce of America, they would be, in the course
of time, dissuaded from these practices by having a standard of
fair value operating side by side with them. It would not
interfere with their legitimate business. It might abate to some
extent practices which are injurious to American commerce, in
jurious to our national development, and indirectly injurious to
them in so far as they may be disposed to kill the goose that
lays the golden egg. Our American bankers have not sufficiently
realized that banking grows with commerce. The power and
dignity of London are based on the verity of this conception. It
will be remembered that the Bank of England has its director
ate composed exclusively of merchants and not of bankers. They
do not permit bankers merely to be on this board of directors for
the obvious reason that the banker, who thinks in terms of in
terest and commission and profits and exactions, is not happily
constituted to determine the best methods of serving commerce.
Many bankers fail to really understand commerce. When Sec
retary McAdoo introduced Lord Cunliffe, governor of the Bank of
England, as a banker. Lord Cunliffe quickly corrected this and
said no, he was a merchant.
44S83— 1S251
This foreign bank would make mobile and liquid the foreign
deposits of American banks and would attract from abroad verylarge deposits of foreign banks who would like to use the facil
ities of this Federal reserve foreign bank.
The powers given to the foreign bank are the same which have
been given to the reserve banks, except that the foreign bank
does not look to the reserve banks or to the member banks either
for capital or for reserve deposits. The capital to be used by
the foreign bank it is proposed to obtain by the issuance of 5
per cent cumulative nontaxable stock, giving to the United
States the surplus earnings after a 50 per cent surplus is pro
vided for the foreign bank. It is proposed that this bank shall
begin with a paid-up capital stock of $20,000,000 and a present
authorized capital of $100,000,000.
The resources of this bank will be further supplemented by
deposits from banks transacting foreign-exchange business, in
its international transactions, from the deposits of the United
States, of foreign Governments, and of foreign bankers. The
same safeguards are thrown around the foreign bank as have
been found wise in the case of the Federal reserve banks, with
the same powers of issuing notes aud receiving Federal reserve
notes. But the foreign bank is particularly charged with the
duty of facilitating financial transactions involving imports and
exports of our merchants, and it will be the duty of this bank,
as far as possible, to promote the parity of the American dollar
in other countries, which will itself be a very great aid for
American commerce.
The establishment of a gold fund in Washington by the 12
Federal reserve banks for adjusting their balances with each
other by bookkeeping entries instead of by actual transfer of
gold has served a great public economy, and the same thing can
be done with international exchanges by establishing a gold fund
in the United States and abroad to serve a like function.
A very important proposal of this bill is the concluding para
graph, to w it: “ No bank, banker, corporation, or individual, other
than the foreign bank, shall sell dollar balances at less than gold
par, except as payment for merchandise imported into the United
States, without the express authority of the Federal Reserve
Board.” It is the intention of this provision to prevent the
transfer of credits to the injury of the parity of the gold dollar.
I digress here to say that we may now make the American
dollar at par in Spain by transferring credits to Spain. All in
the world we need to do is to transfer a credit to Spain sufficient
to cover the international trade balance or a credit to pay for
our own imports from Spain. The moment that is done the
premium on the peseta disappears, because in normal times
there is no premium on the peseta; and if you establish a credit
there to be paid at some future time in pesetas, when the peseta
is at par you are obviating this 25 per cent premium now on the
peseta. It is perfectly plain. A citizen can do that; a single
bank can do that; the Federal reserve banks can do it; the
United States can and ought to do that now in order to safe
guard our merchants from loss, and not to safeguard alone the
merchants from loss, but to safeguard the American consumer
and the American producer from such losses.
A nation is composed of the sum of its parts; a nation consists
of individual units. When the individual merchant, as one of
44883— 18251
the units of our commercial and financial life, suffers a severe
loss he transmits it to the body of the people through the goods
which he handles. If he buys the goods where the American
dollar is worth only 75 cents on the dollar he passes the loss on
to the consumer; or, vice versa, he passes it to the producer, if
he is buying for shipment under such conditions.
The reason for this is that the present tremendous discount
of 25 per cent on the American dollar in Spain has been brought
about by the transfer of American credits through London and
Paris to Spain and the refusal of Spain to adjust the interna
tional differences by like credit transfers. If Spain can do this
to our injury and to her advantage, we should protect our dollar
by the same principle, and it takes actions, not words.
The United States, Great Britain, and France are nowT urging
Spain to agree to take French securities or French credits for
the purpose of correcting this injurious discount on American,
English, and French' money, all of which are suffering from a
like discount in Spain, due to Spain’s refusal to adjust by trans
fer o f international credits.
Mr. POME RENE. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Ohio?
Mr. OWEN. I yield to the Senator.
Mr. POMEIiENE. The Senator from Oklahoma has indi
cated that Great Britain has been able to protect herself, be
cause o f the Bank of England and her methods o f doing busi
ness throughout the world, against the very conditions from
which we are now suffering. If she has those facilities, why is
she not at present able to protect herself against Spain?
Mr. OWEN. Mr. President, what Great Britain does actu
ally now, so far as Spain is concerned, is that private banking
concerns in Great Britain have established branches in Spain
and have established credits in Spain; and by establishing
credits in Spain they have those credits represented in pesetas.
They are carrying those pesetas as a credit and selling those
pesetas now to favored British merchants in London, to the pro
tection of those merchants who have the wit to see what the loss
is, while they leave the current exchange at a discount in Lon
don for the “ accommodation ” of those who do not see. What
I am trying to do is to make America see. I do not want this
to continue, and that is why I am delivering this address now
to the Senate in the hope of also persuading the people of the
United States.
I have many letters from importers and exporters urging that
the dollar be brought to gold par.
The present war binds the United States to Great Britain and
France so closely that the United States dollar, the English
pound sterling, and the French franc suffer in precisely the
same way so long as we extend the American credits to our
allies in excess of our actual net nominal balance of trade.
The nominal balance of trade is arrived at by ascertaining
the difference in commodity shipments and the actual balance
of trade is a very different thing. The actual balance of trade
must be ascertained not merely by commodities but also by
credit transfers, and into the determination of the actual baiance of trade we must consider not only exchange of commodi44SSC— 18251
13
ties and exchange of securities but many other factors, such as
freight charges by Great Britain, for example, at $150 a ton
for furnishing our supplies to them, but also the charges, com
missions, and profits paid by us in foreign ports; the purchase
by our troops in France of largo local supplies; the traveling
expenses of our citizens abroad, and many such items which
are not registered in any census bureau; also the purchase of
foreign properties by Americans, and also interest payments
which the United States is required to pay on stocks and bonds
held abroad; also the interest payments which are payable from
foreign countries to the United States ; also remittances by for
eign residents in the United States abroad to their friends and
relations and many such factors which are not within the power
of anyone to give. But we know that when the demand for
the American dollar ceases and the American dollar is not at
par that then a condition has arisen from these various causes
at which we are being injured in a very subtle and very prac
tical way, which falls first upon both our importers and export
ers, and, secondly, upon our consumers of imported products
and upon our exported products, injuring America in its most
vital parts. This I wish to correct. I demand its correction
and appeal to our business men in America to hold up my hands
in the effort to furnish them a mechanism through which these
unjust discriminations against the American dollar shall abso
lutely cease.
When peace comes the United States will be charged with the
duty of maintaining its dollar at par, whether Great Britain or
France protect their money at par or not, but the United States
and our allies should attend to this matter now, for it is injuring
us all.
The bankers in the Scandinavian countries and in Spain do
not feel safe in carrying large balances in the United States,
notwithstanding the stability of our Government, because, since
we permit a fluctuation in exchange, they do not know whether
they will receive the same amount back when the time comes
that they will want their funds at home, and for the same
reason American bankers hesitate to place credits in these for
eign countries because when they want their money back they
may find that the differences in exchange are interrupting them
and preventing them from receiving their funds back dollar
for dollar. For that reason the lack of parity in the currencies
of the various countries comprise a very serious obstruction to
commerce and prevent the easy establishment of an interna
tional gold fund which would safeguard all countries from the
expense of shipping gold back and forth 3,000 miles across the
Atlantic.
Any person of sound reasoning faculty ought to be able to see
this. Nevertheless those who are called expert in banking seem
not to have had the vision to properly apprehend it.
Some of the New York bankers in foreign exchange advise me
that the exchanges are now furnished to importers and exporters
at such low rate that there is no profit in the business. Strangely
enough the same gentlemen advised me that tins foreign hank
is highly undesirable because it will compete with them in this
undesirable business.
My attention was called yesterday to an interesting transac
tion involving the purchase of commodities from Spain, in44883— 1S251
*'V,
*
14
S .i
:\
***i
'
*** , l
**
feJ !
I! I
volving in round numbers approximately $100,000, on which
there was a charge of one-half of 1 per cent by a bank of Wash
ington, D. C .; one-half of 1 per cent by the bank in Baltimore,
M d.; one-half of 1 per cent by a bank o f New York C ity; and
one-half of 1 per cent by the bank in Barcelona, Spain, amounting
to $2,000 charges outside of interest, without any risk whatever
against commodity shipments insured at par and a transaction
which would take probably 30 days to cover, thus imposing a
tax on this 30-day accommodation of 2 per cent. I do not com
plain of these banks in the least. They are looking at it from
the point of view of the banker and not from the point of view of
merchants, but since the bank in Washington had no facilities
to deal directly with the bank in Barcelona, they go through
two other correspondents for sundry reasons. Evidently, if
there were a Federal reserve foreign bank, a member bank could
furnish its customers the accommodation more economically
than by this crude, unscientific, and very expensive system.
It is probably true that in some very large international transac
tions the rate might be very low, but taking it as a whole these
rates are high, and, moreover, it not infrequently happens that
the bankers take other advantages of those engaged in commerce
to participate in their commercial profits with which the bankers
have no proper connection, just as under the old system bank
directors would negotiate accommodations through their banks
and be paid privately for their valuable inlluence, a practice
which the Federal reserve act found necessary to stop, because
it was levying an unfair tribute upon American commerce.
There are bankers engaged in foreign exchange who advise me
that this foreign bank is highly desirable and that it will enable
them to transact their foreign-exchange business more econom
ically by having one Government-managed agency through which
this business can be conveniently and economically handled.
I was astonished to be told a few days ago by gentlemen em
ployed by the Government as experts that it was desirable to
have the American dollar at a discount in the neutral countries
of Europe, because, among other reasons, while it was against
the interests of the American importer, it was beneficial in the
same degree to the American exporter, because one was the
opposite of the other. I have carefully analyzed this astonish
ing statement and I am of the opinion that there is no founda
tion whatever for any such suggestion; that the exact contrary
is true. It injures the exporter as much as it does the importer.
The American commodity producer who has a thousand dol
lars’ worth of commodity in America is entitled to buy a thou
sand dollars’ worth of commodities in Spain on a par gold basis,
but when he exchanges his commodities for American dollars,
or exchanges his American dollars for Spanish pesetas, he gets
4,000 pesetas instead of 5,000 Spanish pesetas. He loses 1.000
Spanish pesetas in the exchange. He is entitled to receive 25
per cent more than he gets. An attempt has been made to con
fuse this proposition by saying that commodity prices in the
United States have risen more than they have in Spain and in
the neutral countries of Europe. This confusing suggestion
would be better plead if it were a fact. It happens not to be a
fact, however, and would have nothing to do with the case if
it W
’ere a fact.
44883— 18251
v .
15
The point is that the American gold dollars will not buy on
parity Spanish gold money. The fact is that the American gold
dollar, because of international trade balances, arbitrage, gold
embargo, and so forth, will buy only 75 per cent of Spanish gold
money, regardless of commodities, and any attempt on the part
of “ experts ” to cloud this issue with the suggestion that Span
ish commodities have risen less than American commodities
shows the poverty of argument of these gentlemen. They appeal
to a statement of fact, which if true would be immaterial, and
which is not shown to be true. Norway products rose on an
average 110 per cent since the w a r; Sweden, G6 per cent; Den
mark, G6 per cent; Netherlands, 54.8 per cent; Spanish com
modities probably about 50 per cent. The average of staple
commodities in the United States have not risen greater than
this, although some specialties have done so where the allies
urgently needed them.
The one unhappy fact appears to be that when the American
producer, with his thousand dollars’ worth of commodities, buys
a thousand American gold dollars, he exchanges it for 75 per
cent of Spanish gold money, and then with but 75 per cent of
Spanish gold money he buys less of Spanish commodities than
he would in normal times.
COM M ERCE
THE
V IT A E
M ATTER.
It is not a question, however, of merely accommodating foreign
exchange banks, although this purpose will be served. The much
more important matter is stabilizing foreign exchange as we
have stabilized credits in the United States and lowered the
interest rates in the United States by the Federal reserve banks.
This bank ought to be controlled by merchants just as the Bank
of England is controlled by those who are trained and specially
skilled in commerce.
In a striking editorial by one of the greatest editors in the
United States, Arthur Brisbane, of the Washington Times, of
February 12, 1918, appears the following:
In the seventeenth century, when Cromwell had power, he asked
himself first of a ll: “ What does England n eed?” He knew that a com
mercial nation needed men that understood commerce.
And he points out that the policy of England established at
that time of inviting to England men who understood commerce
had resulted in the tremendous commercial growth of England,
while those countries which treated men who understood com
merce with indifference and with neglect and even with perse
cution went into decay.
America needs men who understand commerce. This bank
ought to be controlled by men who understand commerce and not
by bankers. The mechanism of banking is understood perfectly
well by those who understand commerce, but the banker, who
is engaged in banking for the purpose of making commissions,
of getting the highest Interest rate he can, does not sympatheti
cally deal with commerce as commerce.
Men who have this point of view should not be in unrestrained
control of American commerce, of the business of American
importers and exporters, of American manufacturers, of Ameri
can producers, of the interests of American consumers.
It was the inability of bankers to perceive that the commerce
and industrial interests of America were superior to their pri
vate acquisition of property that made necessary the Federal
44883— 18251
16
reserve act and which took out of their hands the power to fix
credits in the United States, to make panics or squeeze credits
from time to time in order that they might multiply their for
tunes at the expense of the American people. They can still do
that within degree, and they still do it within degree, beyond a
shadow of a doubt. Any man who is familiar with Wall Street
knows it perfectly well. The traders in stocks are very skillful
in diagnosing the conditions when that situation arises, and
those who are experts are enabled to play successfully on
either the hull or the bear side, just as credits are being ex
panded or being contracted by those who measurably control
the credit market in New York City. Under the Federal Re
serve System, however, they can only now operate within a
very restricted field.
It may be expected that gentlemen who take this view will
oppose any activity of Government that will undertake to pro
tect American foreign commerce. I shall desire these gentlemen
to record their objections before the Committee on Banking and
Currency in public, where their objections may be scrutinized
with a microscope and answered by men engaged in importing
and exporting in order that the truth may be made clear and
that private interests shall no longer control the foreign com
merce of the people of the United States. The United States
Government should have as sympathetic an attitude toward
foreign commerce as toward domestic commerce.
1 call attention to an interesting editorial of Mr. Arthur Bris
bane in the Washington Times of February 12, appealing for
justice in this matter. [See Exhibit B.]
I submit an interesting editorial of the Journal of Commerce
of February 11. [See Exhibit C.]
This very able editor of the Journal of Commerce points out
that making foreign bills readily subject to rediscount would
make such bills as liquid as domestic commercial paper. He
points out that private banks sometimes hesitate to invest heavily
in foreign bills because in case of a stringency they might not be
readily saleable, while the foreign bank could immediately provide a ready market for such bills and when exchange was
scai'ce, or when rates tended to advance, could ease the situation
by selling exchange and so help in a most important way and
lessen the injurious fluctuation of exchanges.
He points out the sound maxim that trade follows the loan,
and that having a foreign bank properly organized for this
service could be of substantial service to those engaged in ex
panding the foreign trade of the United States.
He points out very wisely that the prestige of Gi'eat Britain
had been due to the fact that her foreign trade was established
not only by efficient labor but by capital available in the right
spot and at the right time and under the right conditions to
facilitate foreign business and that this fact developed in Great
Britain a large body of investors, accustomed to employing their
capital in other countries; that their investments became the
channels or outlet for the products of British industry just as
the returns that came to them became the means of their financ
ing other British imports and exports; that this accounts for
the gi'eat world market in London. The same conditions are
obviously essential to make New York City, and San Francisco,
44883— 18251
and Galveston, and Chicago world markets by affording them
like facilities.
He calls attention to the last words o f President McKinley,
warning “ against the illusion that we could possibly have a
permanent one-sided trade.” In the long run imports are paid
for by exports and exports are paid for by imports. The nations
can not discharge balances of trade merely in gold, for they
would exhaust quickly the gold basis upon which their cur
rency is founded. America must encourage imports and exports.
America must establish reciprocal trade relations with other
countries. America must furnish her importers and exporters
with a mechanism by which to accomplish this. This is the
purpose of the bill I submit.
Through this hank we can accomplish many important re
sults : First, we can give better facilities to our importers and
exporters, and thus serve our manufacturers and our producers
in field, forest, and mine. Second, we can thus enormously
increase our foreign trade by extending these facilities through
suitable credits, for commerce follows credit. We can make
the capital of our importers and exporters go much further by
giving them these facilities.
We can make more useful and more available United States
credits now in foreign banks.
We can make and keep the United States dollar at gold par
throughout the world and thus make the dollar the medium of in
ternational exchange and clear not only our own import and ex
port business in American centers, but we can cause business be
tween Asia and Europe to be transacted as it should be, through
intervening financial centers in America, clearing sales of China
tea, for example, to Russia through New York. These facilities
will make the United States the financial center of the world,
because we have the most gigantic and highly perfected banking
system on earth, with the largest available capital resources in
the world. The resources of the reserve banks alone are over
three billions, and the bank resources o f the United States now
have a visible supply exceeding thirty billions.
It will lead to banks all over the world carrying balances in
this foreign bank for the purpose of getting its accommodation.
It will bring balances from foreign governments to this bank.
I desire to see this bill perfected so as to meet the requirements
of American commerce.
Recently the United States Chamber of Commerce held a very
important convention of American business men at Atlantic
City, lasting four days, September 17 to 21, 1917. This or
ganization represents 400,000 merchants, wholesalers, jobbers,
manufacturers, and business men, and they unanimously adopted
the following resolution:
“ Whereas the foreign trade of the United States for the last,
fiscal year shows a balance in favor of this country of
nearly $4,000,000,000; and
“ Whereas loans to our allies greatly exceed our ‘ favorable
balance of trade ’ ; and
“ Whereas the continuance of any set of conditions which tend
to curtail imports, because imports represent the only form
of cash payment which our entire foreign trade is yield
ing; and
4 4 8 8 3 — 1 8 2 5 1 --------
2
mmmmamm
\,
' Vt
18
V ,'
\
aJ
it
“ Whereas high foreign exchange premiums penalize imports
and tend indirectly to increase the enormous inflationary
debit balance which the Nation is rolling up against the
future in the form of foreign loans; and
“ Whereas the advances to our allies are now proving a boom
erang, leading to the depreciation of the American dollar
in foreign markets because of lack of governmental regula
tion ; and
“ Whereas all our allies are now taking every step necessary to
protect their own currencies abroad; and
“ Whereas the American dollar is now at a discount of from
3 to 20 per cent in neutral foreign countries: Be it
“ Resolved, That the United States Government, through its
proper departments, take whatever action may be necessary to
keep at parity the American dollar in every country of the
world.”
I believe that the Congress and the President of the United
States and the executive officers of the Government should re
spect this expression of public opinion, especially when it is
founded on sound reasoning and good sense.
The President of the United States undoubtedly is in cordial
sympathy with this desire of the business men of America to
improve their facilities for doing international business, and I
respectfully submit some of the expressions from addresses
made by the President referring to this question and pointing
out in advance who may be expected to oppose it, and why.
Mr. STONE. Mr. President, if the Senator will permit me,
it is quite important that the parity of our money should be
maintained abroad in every country. Is the Senator going to
follow what he has just been stating by suggestions as to the
best way to do that?
Mr. OWEN. I have already made suggestions by which it
may be done in four different ways.
Mr. STONE. Well, I was not present at the time.
Mr. OWEN. I will repeat them for the Senator. It is a very
simple matter. It can be done by a transfer of commodities, by
a transfer of gold, by a transfer of credits, or by the forbidding
of arbitrage. The forbidding of arbitrage, I might explain,
means that a debt of Spain to the United States can not be
canceled through London ; it must be canceled direct. It prevents
the shifting of credits from one nation to another nation for
the purpose of canceling credits between other nations; in other
words, if we forbid arbitrage, then our commodity trade balance
would put the American dollar at a premium in Spain, and the
same thing is true with regard to all the neutral countries.
Great Britain could not then borrow from us large amounts of
money, pay her debts to Spain and other neutrals, and leave
the American dollar at a discount while she safeguards her
private merchants by private arrangements of credit transfers
from London to Barcelona and to Madrid. That is wdiat I am
trying to call attention to.
Mr. HENDERSON. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Nevada?
Mr. OWEN. I yield to the Senator.
44883— 18251
*
Mr. HENDERSON. Do I understand the enactment of the
hill which the Senator advocates would correct the evil of which
the Senator is now speaking?
Mr. OWEN. N o; it would provide a mechanism by which to
prevent its recurrence.
Mr. HENDERSON. It would he another one of the means
for curing the evil referred to by the Senator from Oklahoma in
reply to the Senator from Missouri?
Mr. OWEN. Yes; it would provide a mechanism by which the
evil would not he permitted to recur in future and could, if
passed, effect almost an immediate remedy.
Mr. HENDERSON. T merely refer to that because I do not
think the Senator from Missouri quite caught the point the
Senator from Oklahoma was making.
Mr. STONE. Not being a financier, or the son of one. I do
not quite understand why, if England borrows money of the
United States and gives her securities at par for our money at
par, she would transfer that borrowed money to Madrid or
Barcelona or any other place to pay debts at 75 cents on the
dollar. How could she do that without very great loss?
Mr. OWEN. England, when she borrows money from the
United States, immediately pays it out to her manufacturers-----Mr. STONE. Yes.
Mr. OWEN. And her manufacturers, having these credits
transferred to London, can then transfer them to Spain to
settle their debts to merchants in Spain; and when they do
that they give Spain an international credit balance. The con
sequence is Spain does not need our dollars to pay her debts
here, but she uses the dollars which she has obtained from
the British merchant to pay her debts here and that leaves us
with our dollars at a discount.
Mr. STONE. Well, what kind of dollars do they get from
the British merchants to pay their balances?
Mr. OWEN. They get them in payment for commodities im
ported to London from Spain.
Mr. STONE. But are the dollars English dollars?
Mr. OWEN. N o ; they may be in the form of English money
or American money—either one.
Mr. STONE. Or they may be an exchange of credits?
Mr. OWEN. They may be an exchange o f credits. The dol
lar and the pound sterling are merely measures of value; that
is all. When Great Britain borrows from us in dollars she
converts them in pound sterling, which does not change the
substance at all. but when she gets this money at London and
transfers it to Spain she puts the dollar at a discount unless we
protect it by a similar transfer of credits.
Mr. STONE. I presume that is perfectly clear, but I am still
confused as to just how it can be done.
Mr. OWEN. It is not a difficult question if the Senator has
had his attention directed to it at all. It at last comes doA vn
simply to this, that when Spain is an international creditor of
commodities there is due to Spain either in French francs or in
British pounds sterling or in American dollars a certain amount
of gold in exchange for the commodities which she shipped in
excess of those which she had imported.
Mr. STONE. And the money is to settle the balance?
44883— 18251
20
Mr. OWEN. These funds are required to settle the balance.
When Spain occupies the position of an international creditor,
then our money and the money of foreign countries dealing
with her will be at a discount, unless we forbid arbitrage;
and in that case she can not deal with us as one of a number
of international allies, but must deal with us simply and
directly on her indebtedness to us.
Mr. STONE. How is it with the pound sterling or the
franc?
Mr. OWEN. They are both at a discount in Spain.
Mr. STONE. On a par with our dollar?
Mr. OWEN. N o ; they are a little below our dollar.
Mr. STONE. They run along the same general line, I pre
sume.
Mr. OWEN. Along similar lines; yes. The pound sterling
is about 2 per cent less and the French franc about 10 per cent
less, due largely to large paper issues.
Mr. STONE. That is rather arbitrary.
Mr. OWEN. No; it simply follows the laws of trade and
the charges which bankers feel justified in placing upon the
business going over their counters.
Mr. POMERENE. Mr. President, the Senator read a mo
ment ago the preamble and resolutions adopted by the United
States Chamber of Commerce. In the preamble they make a
statement to the effect that our loans to our allies have proven
a boomerang, and as a result of these loans the American dol
lar has been depreciated abroad. Does the Senator indorse
that sentiment?
Mr. OWEN. I do not indorse the language. The term
“ boomerang ” is not an apt description of what has occurred
to us. Extending these credits beyond a point where we safe
guard our own balance with Spain, for example, has resulted
in our dollar going to a discount. It could have been adjusted
with comparative ease by the United States placing a credit
with Spain to protect them. It only happened so because we
have not the necessary mechanism. It ought not to have hap
pened ; there ought not to be any reason why such a thing
should occur or should be permitted to remain.
Mr. POMERENE. The difficulty I have is to understand
the casual connection which the United States Chamber of
Commerce says exists between our making loans to our allies
and the depreciation of our dollar abroad.
Mr. OWEN. What they mean is this, that Spain shipped
a great deal more of her commodities abroad than she im
ported of foreign commodities into Spain. The consequence
was that the outside world shipped to Spain $88,000,000 in
gold, and there was still a balance due Spain on the excess of
commodities she exported over what she imported, so that the
pound sterling depreciated, so did the French franc, and so did
the American dollar.
Mr. POMERENE. Mr. President, unless I misunderstand,
while, that may account in part for the depreciation of the
American dollar in Spain, I fail to see the casual connection
between that depreciation and our making loans to our allies.
Mr. OWEN. What they mean by it is this, that the money
we loaned to our allies went into Spain and put into Spain a
large amount of surplus gold, but still left her an international
■OS8P,— 18 2 51
creditor. The consequence was the Spanish people did not need
American dollars and put our dollar at a discount accordingly.
That is what they mean by it.
Mr. STONE. Mr. President, was the American dollar a gold
dollar ?
Mr. OWEN. Yes, s ir ; it was a gold dollar. There is, however,
this to be considered in connection with international ex
changes, that the gold dollar now, to be adjusted by shipment
across the sea, has to run the danger of the submarine; and
the rate of insurance upon shipping gold has been rather high,
at times going up as high as 8 and 10 per cent when the
country was more alarmed than it needed to be. Then, besides
that, there is in Spain a discount of 3 per cent on American
gold, which does not circulate there.
Mr. JOHNSON of South Dakota. Mr. President, may I ask
the Senator, with reference to that 3 per cent discount on gold
imports, if it makes any difference whether the gold comes
directly from this country or not?
Mr. OWEN. Yes. American gold does not circulate. There
is no discount against British or French gold.
There is no reason why we can not have an agreement with
Great Britain and with France to maintain the French franc
and the British pound sterling and the American dollar all at
par. We can do it simply by an adjustment of credits. That
is all that is required, and that is what I am urging now, not
so much for the purpose of dealing with the present mischief
as for the permanent dignity and honor and power of this
Nation; that our dollars shall be at par all over the world,
and shall be, therefore, a constant measure of value all over
the world. When that occurs, then we may expect the dollar
to be the standard of measure and we may expect New York
to be the financial center of the world. Until we do protect
the American dollar we shall have failed to take one of the
important steps which it is necessary to take. Of course,
to make New York City, which is our great shipping port, the
world center, as we hope some time it will be, the only way
to do that is by doing as England did in making Loudon the
financial center of the world. It is through our merchants
sending American-made goods to the ends of the earth and
bringing back foreign goods to our shores for use here. It is
commerce that will make New York a great financial center
and not finance that will accomplish it.
E x tra cts from
V a r io u s P u b l ic A d d r e s s e s b y P r e s id e n t W il s o n a t
t h e P l a c e s a n d T im e s I n d ic a t e d .
The President said in his speech in Baltimore, Md., September
25, 191G:
“ One of the most interesting circumstances of our business
history is this: The banking laws of the United States—I mean
the Federal banking laws—did not put the national banks in a
position to do foreign exchange under favorable conditions, and
it w a s actually true that private banks and sometimes branch
banks drawn out of other countries, notably out of Canada, were
established at our chief ports to do what American bankers
ought to have done. It was as if America was not only unaccustomed to touching all the nerves of the world’s business but
was disinclined to touch them and had not prepared the instru
mentality by which it might take part in the great commerce
•f the round globe.” (Baltimore, Md., Sept. 25, 191G.)
4 4 8 8 3 — 1825 1
m
r
22
“ I have always believed, and I think you have always be
lieved, that there is more business genius in the United States
than anywhere else in the w orld; and yet America has appar
ently been afraid of touching too intimately the great processes
of international exchange.” (Detroit, Mich., July 10, 1916.)
“ Men are colored and governed by their occupations and their
surroundings and their habits. If I wanted to change the law
radically I would not consult a lawyer. If I wanted to change
business methods radically I would not consult a man who had
made a conspicuous success by using the present methods that
I wanted to change. Not because I would distrust these men but
because I would know that they would not change their think
ing overnight, that they would have to go through a long process
of reacquaintance with the circumstances of the time, the new
circumstances of the time, before they could be converted to my
point of view.” (Detroit, Mich., July 10, 1916.)
‘‘ I do not like to say it, but I have been impressed sometimes
with the very marked difference between American business
men whom I have talked with and foreign business men. I am
not speaking of some o f the men who stand highest in the man
agement of American business. They seem to be veritable
provincials, ignorant of the markets of the world, ignorant of
the courses and routes o f commerce, ignorant of the banking
processes, even by which goods w'ere exchanged.” (New York,
Sept. 4, 1914.)
‘‘We have left it until very recently to foreign corporations
to conduct the greater part of banking business in bills of ex
change. We have seemed to hold off from handling the very
machinery by which we are to serve the rest of the world by
our commerce and our industry. And now, with the rest of
the world impaired In its economic efficiency, it Is necessary
that we should put ourselves at the service of trade and finance
in all parts of the world.” (Extract from address delivered at
St. Louis, Mo., Feb. 3, 1918.)
“ America, of all countries in the world, has been tim id; has
not until the last two or three years provided itself w-ith the
fundamental instrumentalities for playing a large part in the
trade of the world. America, which ought to have had the
broadest vision of any nation, has raised up an extraordinary
number of provincial thinkers, men who thought provincially
about business, men who thought the United States was not
ready to take her competitive part in the struggle for the peaceful
conquest of the world. For anybody who reflects philosophically
upon the history of this country that is the most amazing fact
about it. But the time for provincial thinkers has gone by.
We must play a great part in the world whether we choose
or not.” (Detroit, Mich., July 10, 1916.)
“ Our banking laws must mobilize reserves, must not permit
the concentration anywhere in a few hands of the monetary
resources of the country or their use for speculative purposes
in such volume as to hinder or impede or stand in the way of
other more legitimate, more fruitful uses; and the control of
the system o f banking and of issue which our new laws are
to set up must be public, not private; must be vested in the
Government itself, so that the banks may be the instruments,
not the masters, of business and of individual enterprise and
44883— 18251
23
initiative.”
(Joint session o f two Houses o f Congress, June
23, 1913.)
“ I have found that I had a great deal more resistance when
I tried to help business than when I tried to interfere with it.
I have had a great deal more resistance of counsel, of special
counsel, when I tried to alter the things that are established
than when I tried to do anything else. We call ourselves a
liberal nation, whereas, as a matter of fact, we are one of the
most conservative nations in the world. If you want to make
enemies, try to change something. You know why it is. To do
things to-day exactly the way you did yesterday saves think
ing. It does not cost you anything. You have acquired the
habit; you know the routine; you do not have to plan any
thing; and it frightens you with a hint of exertion to learn that
you will have to do it a different way to-morrow.” (Detx-oit,
Mich., July 10, 1916.)
“ We have not been accustomed to the large world of inter
national business, and we have got to get accustomed to it right
away. All provincials have got to take a back seat. All men
who are afraid of competition have got to take a back seat. All
men who depend upon anything except their intelligence and
their efficiency have got to take a back seat. It will be interest
ing to see the sifting process go on.” (Detroit, Mich., July 10,
1916.)
“ We must cooperate in the whole field of business, the Gov
ernment with the merchant, the merchant with his employee,
the whole body of producers with the whole body of consumers;
to see that the right things are produced in the right volume
and find the right purchasers at the right place, and that,
realizing that nothing can be for the individual benefit which
is not for the common benefit.” (Baltimore, Md., Sept. 25,
1916.)
“ Not until the l'ecent legislation of Congress known as the
Federal reserve act were the Federal banks of this country given
the proper equipment through which they could assist American
commerce, not only in our own country but in any part of the
world whei-e they chose to set up branch institutions. British
banks had been serving British merchants all over the world,
German banks had been serving German merchants all over the
world, and no national bank of the United States had been
serving American merchants anywhere in the world except in
the United States.” (Baltimore, Md., Sept. 25, 1916.)
“ The national banks of the United States, until the recent
currency act, were held back by the very terms of the law under
which they operated from soixie of the most important interna
tional transactions. To my mind that is one of the most amaz
ing facts of our commercial history. The Congress of the
United States was not willing that the national banks should
have a latchkey and go away from home. They were afraid
they would not know how to get back under cover, and banks
from other countries had to establish branches where American
bankers were doing business to take care of some of the most
important processes of international exchange. That is nothing
less than amazing, but it is not necessary any longer. It never
was necessary; it was only thought to be necessary by some
eminently provincial statesmen. We are done with provincialism
in the statesmanship of the United States, and we have got to
4 4 8 8 3 — 1825 1
F
24
have a view now and a horizon as wide as the world itself.”
(Detroit, Mich., July 10, 1916.)
“ My fellow citizens, this is what I believe: If I understand
the life of America, the central principle of it is this, that no
small body o f persons, no matter how influential, shall be
trusted to determine the policy and development of America.
You know what you want in your business. You want a fair
field and no favor. You want to be given the same opportunity
that other men have, not only to make known what you have
to sell, but to sell it under as favorable conditions as anybody
else; and the principle of the life of America is that she draws
her vitality not from small bodies of men who may wish to
assume the responsibility of guiding and controlling her, but
from the great body of thinking and toiling and planning men,
from whom she draws her energy and vitality as a Nation.”
(Philadelphia, Pa., June 29, 1916.)
“ A literary friend o f mine said that he used to believe in the
maxim that *everything comes to the man who waits,’ but he
discovered after awhile by practical experience that it needed
an additional clause, ‘ provided he knows what he is waiting
for.’ Unless you know what you are looking for and have trained
eyes to see it when it comes your way, it may pass you un
noticed. We are just beginning to do, systematically and scien
tifically, what we ought long ago to have done, to employ the
Government of the United States to survey the world in order
that American commerce might be guided.” (Washington, D. C.,
Feb. 3, 1915.)
“ Then came the currency reform. You remember with what
resistance, with what criticism, with what systematic holding
back, a large body of bankers in this country met the proposals
of that reform ; and you know how, immediately after its pas
sage, they recognized its benefit and its beneficence, and how,
ever since the passage of that reform, bankers throughout the
United States have been congratulating themselves that it was
possible to carry out this great reform upon sensible and solid
lines.” (Washington, D. C., June 26, 1914.)
“ Bankers, as body of experts in a particular, very responsible
business, hold, and hold very clearly, certain economic facts and
industrial circumstances in mind, and possess a large and unusu
ally interesting mass of specialized knowledge of which they
are masters in an extraordinary degree. But I trust you will
not think me impertinent if I say that they excuse themselves
from knowing a great many things which it would manifestly be
to their interest to know, and that they are oftentimes singularly
ignorant, or, at any rate, singularly indifferent, about what I
may call the social functions and the political functions of bank
ing.” (Denver, Colo., Sept. 30, 1908.)
“ The trouble with some men is that they are slow in their
minds. They do not see; they do not know the need, and they
will not allow you to point it out to them. If we can once get
in a position to deliver our own goods, then the goods that we
have to deliver will be adjusted to the desires of those to whom
we deliver them, and all the world will welcome America in the
great field of commerce and manufacture.” (Detroit, Mich.,
July 10, 3916.)
“ Not until the recent legislation of Congress known as the
Federal reserve act were the Federal banks of this country given
44883— 18251
the proper equipment through which they could assist American
commerce, not only in our own country hut in any part o f the
world where they chose to get up branch institutions. British
banks had been serving British merchants all over the world,
and no national bank of the United States had been serving
American merchants anywhere in the world except in the United
States.” (Baltimore, Md., Sept. 25, 1910.)
“ We have not been accustomed to the large world of interna
tional business and we have got to get accustomed to it right
away. All provincials have got to take a back seat. All men
who are afraid o f competition have got to take a back seat. All
men who depend upon anything except their intelligence and
their efficiency have got to take a back seat. It will lie interest
ing to see the sifting process go on.” (Detroit, Mich., July 10,
1916.)
Mr. Paul M. Warburg, in “ Essays on Banking Reform in the
United States,” says:
“ The only modern bills in our country are the so-called
*foreign-exchange ’ bills drawn on European banks and bankers,
which are indorsed, and which always have a ready market.
But what an anomalous position! Instead of having the credit
of the entire country available in the shape of millions upon
millious of modern paper which Europe might and would buy,
we must rely ou the willingness and the ability of a few banks
and bankers to use their own credit by drawing their own long
bills on Europe. This is u costly and most unscientific mode of
procedure which is in no way adequate to the necessities of the
situation.”
And in his “ Discount System in Europe” Mr. Warburg said:
“ It is inconceivable that the United States, a Nation that
leads the way in industrial progress and that more than any
other nation weeds out old machinery and replaces it by the
newest appliances, should be either unable or unwilling to
modernize thoroughly its financial system and to discard oldfashioned financial machinery which other people have long
since thrown upon the scrap heap.”
Mr. Justice Brandeis, in “ Other People’s Money,” said:
“ The great monopoly in this country is the money monopoly.
So long as that exists our old variety and freedom and indi
vidual energy of development are out of the question. A great
industrial nation is controlled by its system of credit. Our sys
tem of credit is concentrated. The growth of the Nation, there
fore, and all our activities are in the hands of a few men who,
even if their actions be honest and intended for the public in
terest, are necessarily concentrated upon the great undertak
ings in which their own money is involved and who necessarily,
by every reason of their own limitations, chill and check and
destroy genuine economic freedom. This is the greatest ques
tion of a ll; and to this statesmen must address themselves with
an earnest determination to serve the long future and the true
liberties of men.”
The Reich,shank of Germany has a foreign portfolio which
has increased in importance from year to year until the paraly
sis of the present war, but the German Government is now
making the most elaborate plans for protecting its commerce
after the war, to the ends of the earth, with proper credit and
banking facilities.
4-1883— 1825 1
26
Tlie Bunk of France 1ms the right to discount foreign paper,
and is using it with great ability. But France is also making
elaborate preparations for safeguarding its commerce at the
end of the war.
The Bank of England has relied upon acceptance houses and
private bankers in England to handle a large parr of the foreign
banking business, but nevertheless the English Government is now
making elaborate preparations to safeguard its commerce, pro
viding adequate credit and banking facilities throughout the
world at the end of this war. The details of what is being
done by Great Britain and by France I add as a supplement to
my remarks as taken from the Commerce Reports, December 27
and 28, 1917, pages 1177 and 1194. I ask to have those exhibits
printed without reading.
The PRESIDING OFFICER. Without objection, it is so
ordered.
(See Exhibits E and F.)
Mr. OWEN. No thoughtful man can deny that the United
States must rise in its dignity and majesty of power and ade
quately meet the demands which will arise at the immediate close
o f this great world war.
What I have desired to point out, Mr. President and gentle
men of the Senate, is that our present facilities and our present
statutes have proven ineffective. We authorized the Federal
Reserve Board to require the Federal reserve banks to estab
lish this foreieu accommodation and it has not been done; and
I do not think it would be easy to accomplish it through the
mechanism, for instance, of the Federal reserve bank of New
York, for the reason that the directorship of the Federal re
serve bank at New York City is controlled by a few banks that
are engaged in these international banking operations, and
they probably would regard it as trespassing upon their pre
serves in some way. They will not stop to digest it. They will
regard it as an innovation, just as they did the Federal reserve
act, and they will be opposed to i t ; and I have no doubt that they
have been enabled to prevent its being done in New York, al
though I have no detailed information about that. But I will
say that the Federal reserve bank of New York has enough to
do to handle the great volume of domestic business piling in
upon them; and that work, I am sure, they have done with great
ability and with great efficiency.
What I want to point out is the need for a mechanism by
which the commerce and industry and manufacturing powers
of the people of the United States shall have the means of im
ports and exports, shall have the opportunity of buying and
selling bills of exchange against imports and exports, and shall
have the necessary credit facilities, and shall have a competent
authority where a merchant can wire and ask whether or not a
merchant in Buenos Aires has a good credit, and whether he
would be safe in making an important shipment of merchandise
to him from the United States. Until our people have that
kind of information conveniently at their hands, free from any
suspicion of personal interest, the commerce and industry of the
people of the United States will not have the means for ade
quately expanding.
44883— 18251
27
I regard this matter as one of very great importance, and will
have it considered in due time by the Committee on Banking and
Currency of the Senate; and I hope the House committee will
consider it, and that we may arrive at some substantial adjust
ment of the matter.
I thank the Senate for its patience.
APPENDIX.
E x h ib it A.
B ureau
of
D epartm ent of C om m erce ,
F oreign and D om estic C om m erce ,
Washington, February 4, 1918.
I mports and E xports, by Grand D ivisions and Countries.
Total values of merchandise imported from and exported to
each of the principal countries during December, 1917, and the
12 months ended December, 1917, compared with corresponding
periods of the preceding year, were made public to-day by the
Bureau of Foreign and Domestic Commerce o f the Department
of Commerce, as follows:
Month of December—
12 months ended Decem
ber—
Imports from—
1917
1916
1917
1916
South America..........
$40,617,322
50,506,340
49,669, 439
62,142,195
12,792,304
6,183,397
$59,107,818
47,688,900
43,786,488
45.422,209
4,827,542
4,003,231
$551,144,599
871,982,524
598,818,532
758,237,165
99, 221,196
73,063,939
$633,316,883
658, 438,120
427,609,562
516,704,047
93,673,382
61,893,333
Total......................
227,911,497
204,834,188 2,952,467,955
2,391,635,335
Grand divisions:
Principal countries:
Italy. .*....................
■Russia'in Europe......
United Kingdom......
Chile
...................
British East Indies...
Australia and New
Philippine Islands_
_
44883— 18251
8,662,632
451
3,219,301
747,674
261,481
2,061,145
3,498,232
329,403
1,828,252
16,874,793
36,232,364
9,858,406
5,053,741
17,560,443
8,233,119
13,618,362
8,402,995
20,992,304
23,692,557
7,403,284
4,633,395
27,980
156,835
10,488,210
133,269
4,789,202
3,689,940
844,802
83,848
3,675,167
5,505,941
1,927,928
25,765,390
23,753,953
10,399,693
9,108,597
12,503,181
14,286,609
5,914,408
6,352,337
17,138,997
17,268,621
64,937
158,022
98,639,653
159,352
36,480,807
22,744,504
6,280,233
12,350,179
36,881,630
18,069,487
19,834,868
280,080,175
413,674,846
130,434, 722
248,598,199
178,245,833
145,274,931
142,597,929
125,108,020
259,629,897
253,669,709
631,251
1,479,342
108,893,119
5,819,472
60,235,172
43,602,076
6,430,310
4,478,990
32,577,377
18,856,638
22,414,383
305,486,952
237,249,040
105,065,780
243,728,770
116,292,047
132,067.373
82,123,995
80,041,851
201,190,844
182,090,737
1,682,709
2,718,912
2,944,041
32,002,203
62,385,641
27,352,444
55,826,228
34,162,081
29,533,795
2 8
Month of December—
12 months ended Decem
ber—
Exports to—
1917
Grand divisions:
Europe.............
North America.
South America.
Asia.................
Oceania............
Africa...............
1916
1917
1916
$323,690,436 $349,558,509 $4,054,362,029 $3,813,278,324
155,135,812
93,285,797 1,264,688,666
924.553.649
22,787,859 312,420,985
33,700,646
220,266,818
60,465,901
42,447,145 431,149,591
364,959,155
9,751,896 117,158,921
14,591,876
105.572.649
54,010,506
6,279,009
51,464,784
5,402,574
Total.
593,864,280
Principal countries:
Austria-Hungary......
Belgium....................
Denmark...................
Prance......................
Germany...................
Greece.......................
Italy..........................
Netherlands..............
Norway.....................
Russia in Europe......
Spain.........................
Sweden.....................
United Kingdom......
Canada......................
Central America.......
Mexico......................
Cuba.........................
Argentina..................
Brazil........................
Chile..........................
China...................... .
British East Indies...
Japan........................
Russia in Asia...........
Australia and New
Zealand................ .
Philippine Islands__
British Africa..........
8,400
134,363
73,564,381
1,030,494
46,162,066
7,899,931
1,068,338
816,462
10,159,988
503,364
177,433,009
101,767,255
4,861,129
15,485,4O
S
24,652,166
11,553,945
6,566,030
7,586,866
6,366,898
7,290,060
40,199,201
525,675
6,474,755
7,804,316
5,215,449
523,233,780 6,231,244,976 5,482,641,101
6,691,023
22,628,659
4,165,928
32,388,864
58,706,507 940,810,070
1,142,353
3,275
1,431,702
8,477,603
37,974,651 419,095,473
11,345,624
90,520,801
4,234,745
62,966,850
23,097,932 314,639,528
*2,469,320
6,577,521
5,900,309
20,000,854
185,209,430 2,001,031,104
60,939,523 829,972,331
4,008,658
52,206,466
4,415,374
111,111,641
18,846,295 196,350,315
7,192,128 107,641,905
06,207,970
5,210,967
3,919,899
57,483,996
40,208,612
3,645,538
42.746, 749
3,775,091
14,821,946 186,547,941
109,169,243
16,540,391
7,351,503
2,20S, 853
2,508,294
76,900,225
38,148,726
39,023,443
61,771
30, 998,928
56 329.490
sec; 821,006
2 260,634
33 685,689
303, 530,476
113, 730,162
66 , 209,717
309 806,581
64' 316,S88
4- 967,590
1,887; 380,665
C 908,190
04,
46, 531,841
54, 270,283
164, 666,037
76 874,258
4 ; 669,050
7
33, 392,887
31, 516,140
30, 799,916
109, 156.490
1 0 701,073
G,
81,305,968
22,775,491
32,448,177
Statement of imports and exports, 12 months ended December, 1917.
Exports.
Imports.
$90,520,301 $22,744,504
62,866,5-50 6,280.233
92,469,320 36,881,630
20,900,854 18,069,487
To
Balance in
our favor.
$67,775,797
56,586,617
55,587,690
2,831,367
E xhibit B.
[Editorial, Arthur Brisbane, Esq., Washington Times.]
P resident and M r. McA doo— Is T here A ny W ay of Making
the
the A merican
A broad?
Dollar W orth 100 Cents in Neutral Countries
This question, it seems to us, is important.
The United States lias forbidden gold exports, which is wise.
Since gold is a fetisli among the nations, let us keep our fetish
supply at home.
44883-
18251
29
But while we keep our gold at home, let us arrange in some
way so that the American dollar will not be marked down too
low on the bargain counter of other countries.
The dollar in Spain is worth 75 cents or less in Spanish money.
The same thing is true of China, Sweden, Norway, Holland,
and Denmark. In all the neutral countries the American dollar
is worth much less than 100 cents.
There ought to be some way to stop this.
Mr. Warburg, of the Federal reserve bank, might devote his
mind to the problem—he has excellent financial ability.
This is wi'itten primarily for the President of the United
States and the Secretary of the Treasury.
If it is the duty of the Government to protect the American
citizen abroad, it is also the duty of the Government to protect
the dollar abroad. The dollar travels and buys for the citizen.
Federal reserve exchange and credit banks on the other side
properly organized would be able to attend to the matter.
This is a creditor Nation in every sense of the word.
The world owes us billions.
And our exports are far in excess of our imports.
In other words, the outside countries, including the neutrals,
owe us much more than we owe them. Therefore our dollar
should be the best dollar.
The thing can be arranged, and it ought to be.
The four big neutral countries— Spain, Norway, Netherlands,
Denmark—owre us every year tens of millions more than we owe
them, because our exports exceed our imports.
Spain, for instance, must pay us forty-one millions more than
we pay to Spain in one year.
Our money ought to be at a premium; it is just the other way
round.
Senator O w e n , chairman of the Banking and Currency Com
mittee of the United States Senate, is to be congratulated upon
the interest that he has shown in this unnatural and harmful
condition.
The American buying in a neutral country should not be
obliged to pay $1.25 for $1 worth of goods.
And the buyer from a neutral country should not be able to
buy a dollar’s worth of American goods for 75 cents o f his own
money. And that is the present condition.
E xhibit C.
{Prom the Journal of Commerce and Commercial Bulletin.]
F uture Conditions of F oreign T rade.
The bill introduced by Senator O wen to establish in con
nection with the Federal Reserve System of banking an organi
zation designed to furnish facilities not now available for the
promotion of American foreign trade seems to be a step in the
right direction. The idea is that the Federal foreign-trade
bank shall occupy somewhat the same position toward inter
national trade that the reserve banks at present occupy toward
domestic trade. As matters stand, private banks can extend a
certain amount of credit to exporters and importers, and may
derive some assistance from the reserve banks by having their
foreign bills rediscounted under prescribed restrictions. Should
the proposed system come into operation, the investment of an
individual bank in foreign bills, being readily subject to redis4 4 8 8 3 — 1 8251
'
r
30
count, would become practically as liquid as its domestic com
mercial paper, which can be immediately discounted at the
reserve banks. Under the existing system banks sometimes
hesitate to invest heavily in foreign bills because in case of
stringency they might not be readily salable. The foreigntrade bank, however, would provide an immediate market for
such bills, and when exchange was scarce and rates tended to
advance would ease the situation by selling exchange and so
helping to lessen the fluctuation in rates. All this is very much
to the good, and, considering the soundness of the axiom that
trade follows the loan, the proposed legislation, properly
guarded, could hardly fail to be of substantial service to the
men engaged in expanding the foreign trade of the United
States.
But in this matter it is well to keep a firm hold on first prin
ciples. The United States grew and prospered and built up
great wealth out of the natural resources of this continent. But
there has been a steady How of raw materials from this country
to Great Britain and western Europe, to be there manufactured
and distributed around the world. A protective tariff enabled
us to keep some of these materials for manufacture here, chiefly
for domestic consumption. But the necessity of the tariff was
an admission that the sum of the influences for cheap production
and distribution was against us. These influences were chiefly
the supply, first, of labor and then of capital, but they included
experience in industry and foreign trade, and the prestige, good
will, and facilities of an established business. The superabund
ance of capital which existed in Great Britain before the war
caused an overflow from that country to be directed around the
world. There was thus developed in the United Kingdom a
large body of investors accustomed to employ their capital in
other countries, and their investments naturally became the
channels of outlet for the products of British industry, just as
the returns that came to them were the means of financing Brit
ish imports. There lias been a great, free, readily accessible
market in London for all the commodities of commerce, not
merely a market for the country’s own products and for what
it consumes, but a distributing market for the rest of the world.
British ships have been in every port, British bankers and trad
ers in every mart. There ha? been British capital available
everywhere, ready to build a railway, buy a brewery, open a
mine, or move the products of the country to market. It is the
combination of these conditions which made London the clearing
center of the world and the pound sterling the standard of value.
Our success in taking the place that rightly belongs to us in
the markets of the world must largely depend on our readiness
to imitate the liberal conception of what really constitutes com
merce which gave the United Kingdom the position which it
had attained. One of the last words of the late President Mc
Kinley was a warning against the illusion that we could pos
sibly have a permanently one-sided trade, but there are abun
dant evidences that the false conception which he tried to dissi
pate still retains a good deal of its vitality. If Great Britain
must resume her financial and industrial role after the war, with
greatly impaired resources and enormously increased burdens,
she at least takes up the commercial struggle with the enormous
advantage of having to learn very little about the conditions
44883— 18251
under which it can be most successfully prosecuted. In one re
spect the war has been almost incredibly beneficial to British
industry, and that is by demonstrating the extraordinary gains
that may be made in manufacturing efficiency. Take, for ex
ample, this illuminating passage from a book just published by
authority o f the Council of the British Association on Industry
and Finance: “ The increased output in shells which has in
large measure been attained since the foundation of the ministry
of munitions and the subsequent recruitment of female labor
for work in the factories, with all the adaptation and rearrange
ment that has been effected for the purpose o f speeding up, has
never been more strikingly illustrated than when it was offi
cially declared that a year’s output at the rate attained in
1914-15 is now provided in the following periods: Eighteenpounder ammunition, in 13 days; heavy howitzer shells, in 7 days;
shells for medium guns and howitzers, in ,5 days; shells for
heavy guns, in less than a day.” As the London Economist re
marks, this record not only shows a wonderful achievement in
time of war, but gives serious reasons for thought concerning the
inefficiency, whatever may have been its cause, of the organiza
tion on which it has been an improvement. That the keying-up
process has not been confined to war industries is sufficiently
evident from the returns of British foreign trade for the last
calendar year. Here commercial exports figure for the very
respectable total of ,$2,025,000,000, which, though less than half
the total of our own export trade, excludes most of the supplies
incidental to the promotion of the war, which in our case figure
for over $600,000,000. It may be incidentally noted that the
British exports for the year of cotton yarns and textiles aggre
gated $730,000,000, while our own appear to have been very
little in excess of $150,000,000. That a Britain with only one
arm free should have been able to make such a record in the
competition for the world’s trade suggests possibilities, of which
we would do well to take heed, of what may be accomplished
by a Britain with both arms available for industrial production.
E x h ib it E.
Capital fob A fter-W ar T rade.
r Alfred Nutting, clerk in American Consulate General, London, England,
Nov. 30.]
The minister of reconstruction has established, in conjunc
tion with the treasury, a committee on financial facilities after
the-Avnr, the object of which is to anticipate and provide methods
to overcome the financial difficulties that will arise in connection
with commerce and industry. The vast number of factories
which have been diverted from their normal trade to war work
will face a critical period between the time when hostilities
cease and the time when it is possible for them to return to
their prewar activities, for an interval more or less lengthy
must occur during which it will not be possible to revert to
former productiveness, while the question o f cost in restoring
factories to conditions formerly prevailing will require careful
consideration and the preparation of plans to provide the neces
sary money and capital. Apart from that aspect there is the
certainty that largely increased costs of raw materials, higher
44883—18251
I ,1 :
1
3
ki !
wages, and a much greater value on stock in hand or on credit
will have to be met, requiring fresh capital, while longer credit
may be necessary.
Some of the most important matters with which the com
mittee will be empowered to deal will be the extent of the aid
that banks and financial houses will be able to render; if such
help should appear likely to prove insufficient, what other sources
of credit can be sought; and by what method can the required
capital be most efficiently distributed, in the event of a shortage,
among essential trades and commerce.
C O M M IT T E E R E P R E S E N T S A L L B R A N C H E S O P C O M M E R C E A N D IN D U S T R Y .
!«»ii
j i s■
ijiJ
i.
The members of the committee appointed to deal with this
fundamental subject of finance and capital after the war include
representatives of banking, financial, commercial, and industrial
circles, and are not restricted to London concerns, but include
those vitally interested in industries and workshops throughout
the country. The chairman of the committee, Sir R. V. VassarSmitli, Bart, (chairman of Lloyd’s Bank, one of the two largest
banking corporations in the United Kingdom), in a recent ad
dress before the Institute of Bankers, said:
“ The financing of our industries will be immensely facilitated
by trade organization. During the war we have seen our pro
ductive industries organized on a large scale and under the con
trol of the State. Both organization and control were forced
upon us by war. As regards State control, I hope and believe
that the necessity for it is temporary. As to trade organiza
tion, I firmly believe that the necessity for it will remain after
the war. It is no new thing, this tendency to production and or
ganization on a large scale, though it has not shown itself so
much in this country as in some others. The day of small indus
tries on individual lines is gone. Our manufacturers and trad
ers must organize for united effort. This will have the closest
bearing on questions of finance. An unstable, unorganized in
dustry is the despair of bankers. I have confidence in stating
that an industry organized on large lines has seldom lacked
financial support in this country, and in spite of financial
stringency, which we shall doubtless have to face, it is not likely
to suffer in the future.”
It is stated that the committee will commence work immedi
ately.
E x h ib it
F
F rench P reparations for T rade A fter W ar.
[Commercial Attach^ C. W. A. Veditz, Paris, Oct. 26.]
Since the outbreak of the war numerous French writers upon
commerce and industry have discussed in detail the economic
consequences of the war and the problems of reorganization
that will need to be solved after the termination of hostilities.
Nearly all of them have insisted upon the importance of de
veloping France’s export trade, and their suggestions in this
connection have been both critical and constructive. That is to
say, they have pointed out those features of the present situa
tion that must be remedied and have also proposed a series of
new measures and organizations that are now totally lacking.
Naturally enough, the French foreign service has been sub
jected to a critical examination with regard to its efficiency as
an agency for the promotion o f export trade; and an impression
44883— 18251
33
lias prevailed that it is susceptible of improvement in that re
spect.
The chief Government agency for the promotion of French ex
port trade in the office national du commerce exterieur, intrusted
by the law of March 4, 1898, with the task of furnishing French
merchants and manufacturers with such commercial informa
tion as is likely to contribute to the development o f French
foreign trade and the expansion of French markets in foreign
countries and in the French colonies and protectorates. The
office national has the aid in this task of three groups of
agencies—the diplomatic and consular services, the French cham
bers of commerce, and the foreign-trade counselors. The office
maintains a collection of foreign-trade catalogues, which it
analyzes and brings to the attention of interested French firms.
It puts the benefit of its investigations at the disposal of French
merchants and manufacturers. Unlike the United States Bu
reau of Foreign and Domestic Commerce, which is the corre
sponding American institution, it furnishes confidential informa
tion concerning the standing and financial resources of particular
foreign firms. The office receives daily inquiries from foreign
agents and importers, who are put in touch with French firms
that have indicated an interest in foreign markets, and it keeps
a classified list of French exporters. The office also undertakes
to bring together groups of French exporters who would be
unable individually to maintain an export organization. When
ever the office has cognizance of foreign-trade opportunities,
particularly of important orders to be placed competitively by
public or private corporations, such opportunities are brought
to the attention of interested French chambers of commerce,
trade associations, or even individual firms whose names are
registered with the office.
T I I K F O U lt D E P A R T M E N T S A N D T U E I K F U N C T I O N S .
The work of the office is carried on by four departments. The
first has to do with publications and information concerning the
commercial standing and reputation of foreign houses. The pub
lications of the office are the following:
The Moniteur Officiel du Commerce is normally issued every
Monday. Its publication ceased at the outbreak of the war but
will shortly be resumed. The Moniteur reports changes in foreign
tariff laws, in French commercial legislation, and in the com
mercial laws of foreign countries. This publication has the ex
clusive right to the reports of French consuls and diplomats on
commercial subjects. In brief, the Moniteur is the commercialinformation periodical of the French Government, resembling
in general the daily Commerce Reports of the American Gov
ernment. It contains the trade opportunities brought to its
notice that are likely to interest French exporters and manu
facturers.
The office ordinarily issues weekly a Feuille d’lnformation, or
Bulletin of Information. This publication also was stopped at
the outbreak of the war but will soon be taken up again. It
contains the more important news items and reports issued in the
Moniteur Officiel. This bulletin is regarded as an efficient agency
of trade propaganda; it has a large circulation in France and
is posted publicly in railway stations, city halls, schools of com
merce, and other places where it is likely to attract public atten
tion. Its aim is to furnish general trade information and to
44883— 18251------ 3
u
stimulate an interest in export trade, even among those manu
facturers and tradesmen who have previously shown no dispo
sition to seek business in foreign markets.
The third class of publications of the Office National consists
of the so-called Dossiers Commerciaux, or commercial docu
ments, each relating to a particular commodity or group of com
modities, or to the export market offered by a particular country
or district. These documents often contain confidential infor
mation not intended for general circulation. They furnish de
tailed and specialized information along some specific line, likely
to interest only those French dealers or manufacturers engaged
in that line. They are furnished only to bona fide French firms
located either in France or in its colonies.
Finally, the office publishes, in the form of monographs, the
results of special investigations into the market for particular
products singled out for such surveys. There have already been
published such special monographs relating to wines, cutlery,
porcelain, glassware, canned-food products, and the collection
of credit claims abroad. The most recent of these Notes Commerciales concern the different sections of Morocco, investigated
from the standpoint of exports and imports and with regard to
agriculture and colonization.
The office national furnishes, free of charge, information con
cerning the standing and commercial rating of foreign firms and
has in its files a large collection of catalogued cards enabling it
in many instances to furnish such data without delay. It also
furnishes the names of lawyers prepared to take charge of claims
for the collection of unpaid bills abroad.
Another department of the office is concerned with the dis
pensation of general commercial information, the transmission
of samples, and the furnishing of technical data. It undertakes
to provide exporters of a given product with data concerning
the principal nations exporting that product and with details
concerning the requirements of particular markets. It fur
nishes lists o f foreign dealers and importers and undertakes, on
behalf of French inquirers, to purchase, on their account,
samples, catalogues, and so forth.
A third department of the office specializes in matters of cus
toms tariffs and trade statistics. It undertakes to furnish in
formation with regard to import and export duties, commercial
and navigation treaties and regulations, importation in bond,
certificates of origin, trade-marks and patents, etc. It also
seeks to keep fully informed concerning statistics of production,
consumption, imports, and exports.
A fourth division of the office national is concerned with
transportation matters. It keeps track of transportation
charges, both by water and by rail, of ocean freight and insur
ance rates, of postal charges and regulations, of telegraphic
rates and regulations, o f port charges and navigation taxes.
A S S O C IA T IO N
N A T IO N A L S D ’ E X P A N S IO N
E C O N O M IQ U E .
Since the outbreak of the war the importance of encouraging
French export trade, particularly after the termination of the
conflict, has seemed to warrant the establishment of several
new organizations and agencies, and special attention has been
given to the efficiency of German methods of trade expansion
(as set forth, for example, by Henri Hauser in his book, Les
44883— 18251
35
M6thodes Allemandes d’Expansion Commerciale). Several new
groups have been founded to aid and encourage the exportation
of French products. The first and one of the most important
of these is the Association Nationale d’Expansion Economique,
formed under the leadership of the Paris Chamber of Com
merce, which is a semiofficial organization having close relations
with the French Government and especially with the ministry
of commerce. The purpose of this organization is to prepare
for competition after the war, for the new economic and com
mercial dispensation that will inevitably follow the cessation of
hostilities. The association is divided into sevei-al committees
intrusted with the study of particular branches of the export
trade. It comprises the most important, if not all, of the cham
bers of commerce throughout France and of the various manu
facturers’ and merchants’ associations in the Republic.
This association held an important commercial congress last
March, which was presided over by the minister of commerce
and which discussed some of the more important problems that
will confront the nation in connection with the resumption of
normal economic life at the end of the war. The most impor
tant single accomplishment of the association thus far is the
preparation and publication of a rather complete survey of the
industry, commerce, and agriculture of France, with particular
reference to the problems and conditions that will arise after
peace is restored. The reports in which the results of this
survey are given number 70, and their subjects are as follows:
General report; the woolen industry; the felt industry; silk
and silk goods; ribbons and silk and textiles partly of silk;
trimmings and braid; ready-made clothing; the cotton indus
try ; llax and hemp goods; laces and embroideries; ju te ; hosiery
and knit goods; dressmaking; women’s wear ( “ la m ode” ) ;
furs, lingeries, perfumery, etc.; leather, hides, and shoes; chemi
cal fertilizers and other chemical products used in agriculture;
dyestuffs; the products of large-scale chemical industry; coal;
the extractive industries ; the metallurgical industries; mechani
cal construction; electrical materials and construction; hard
ware; watches and clocks; optical glass; the photographic and
cinematographic industries; jew elry; toys; ceramics and glass
ware ; chirurgical and sanitary articles; paper; book publishing;
resin and resinous products; trade in wood and lumber; food
products; fishing; the merchant marine; mineral-water and
health resorts; the hotel industry and tourist business; bank
ing and credit; insurance; colonial administration; the cereal
crops; the cattle industry; the meat industry; cattle raising m
the colonies; dairy products; the exportation of wines; the
exportation of liqueurs; forestry after the war; fruit and truck
farming; horticulture; industrial plants (beet sugar, hemp,
hops, etc.) ; the trade in seed; agricultural resources of colonial
France; agricultural machinery and equipment; agricultural
labor; the exportation of farm products (on which subject there
are nine reports, covering the principal export markets for
French agricultural products).
The Association Nationale maintains a bureau of commercial
information prepared to advise French exporters concerning
customs duties, import and export regulations, black lists and
the blockade, transportation rates and regulations, the exchange
situation, taxes, antifraud legislation, colonial conditions, and
44883— 18251
trade opportunities. It also maintains a department for com
mercial translation work and issues a bulletin designed to keep
its members informed promptly of changes in commercial laws,
tariff rates, etc. The association will publish annually an
Index of French Producers in the French, English, and Spanish
languages, to be circulated widely among foreign jobbers, pur
chasers, and importers. It has already begun the publication of
a monthly review, called L’Expansion Economique, containing
a section of industrial and commercial notes, a section of agri
cultural notes, articles on current economic topics, and a sum
mary of industrial and commercial news relating to France and
the principal commercial nations of the world.
OTHER
NEW
O R G A N IZ A T IO N S
TO
PROM OTE
AND
PROTECT
FREN CH
TRADE.
Of somewhat more recent formation than the Association
Nationale is the Union Nationale pour l’Exportation des Produits Frangais et pour l’lmportation des Matieres Premieres,
founded by M. Raoul Peret, former minister of commerce. This
organization seeks above all to encourage the grouping of French
manufacturers and dealers in order that by this means smaller
producers who are unable independently to maintain an export
organization may be able to enter the export trade. It is be
lieved that by forming such cooperative groups of comparatively
small concerns it will be possible to deal advantageously with
steamship and railroad companies and to obtain the special
benefits now confined to the larger establishments that have
created and maintained their own export organizations. It is
the ambition of this association to foster the creation of such
groups and to create transportation companies under its own
control.
Quite different are the aims of the Union Intersyndieale des
Marques (a union of manufacturers’ associations for the pro
tection of trade-marks), founded by a well-known electrical
engineer, M. Raynald Legouez. The main purpose of this or
ganization is to protect French manufactures against imitation
and misrepresentation. It is held that the Germans have been
in the habit of selling their own goods as of French manufacture,
not only on neutral markets but even in France; also that prod
ucts nearly finished in Germany have in the past been shipped
to France and finished there in order that they might be sold
as French goods. The Union Intersyndieale is therefore carry
ing on an active campaign to persuade French manufacturers
to place upon the market only goods that bear the distinctive
label o f the union—with the letters U. N. I. S.— as a guaranty
of French origin. The union hopes to include all important
groups of French manufacturers and thus to prevent the sale of
goods that are not marked with the label of the union.
M O V E M E N T FO R E S T A B L IS H M E N T O F A N N U A L F A IR S .
In addition to organizations of the kind described, attention
should be called to the movement in France in favor o f annual
fairs or markets comparable to the famous German fairs at
Leipzig. The first experiment in this direction was made by
Senator Herriot, the mayor of Lyon, in March, 1916, when Lyon
held its first sample fair (Foire d’Echantillons) and 1,342 ex
hibitors took part. The second Lyon fair, held in March and
April, 1917, was attended by 2,593 exhibitors, 424 o f them being
from foreign countries, with 25 representing American firms.
44883— 18251
37
It is reported that during the fair the exhibiting firms obtained
orders amounting to about 200,000,000 francs.
In September, 1916, Bordeaux held a fair, but this was con
sidered as devoted especially to the products of French colonies
and to wines and foodstuffs, for which Bordeaux has always
been a center of great importance. The second Bordeaux fair,
held in September, 1917, repeated the success of the first.
Ir May, 1917, Paris inaugurated a fair, in which special atten
tion was given to the so-called “ articles de Paris ” and “ articles
de luxe ” that play so important a part in the industrial and
commercial life o f the French capital. Other cities have indi
cated a disposition to undertake similar projects; it is stated,
for example, that Marseille contemplates having its annual fair.
There is, of course, some danger here that the rivalry of French
cities may militate against the establishment of a fair that will
be truly national or international, and it now appears likely that
the fairs of Paris and Bordeaux will specialize in certain groups
of commodities, in the production or handling of which these
cities play a leading part, whereas the Lyon fair will be of a
more general character and thus become a real rival of the one
at Leipzig.
NEW
C O M M E R C IA L P U B L IC A T IO N S .
In addition to the new organizations to which reference has
been made, and to the newly established French fairs, the
awakening interest in French export trade is manifested by the
publication of a large number of new reviews, newspapers, and
other periodicals devoted to commercial subjects, and especially
to the expansion of French foreign trade. Easily the foremost of
these is the Exporta tern* Franqais, published weekly under the
editorship of Maurice Ajam, deputy and former under secretary
of state. Mention should also be made of Le Soir, a daily com
mercial newspaper; La Yictoire Economique, a weekly news
paper ; Le Moniteur du Commerce, published weekly; L’lnitiative
Commerciale, a monthly review; Commerce et Industrie, a
monthly; and Mercure, the organ of the French Federation of
International Commerce. All these publications give special
attention to French export trade.
A bill (S. 3928) to amend the act approved December 23, 1913, known
as the Federal reserve act. as amended by the acts of August 4, 1914,
August 15, 1914, March 3, 1915, September 7, 1916, and June 21,
1917.
Be it enacted, etc., That section 14 of the act known as the Federal ,
reserve act be, and is hereby, amended as follows :
Strike out all in paragraph (e) of section 14 and insert in lieu
thereof:
“ (e) To establish accounts with other Federal reserve banks and with
the Federal reserve foreign bank.”
After section 25 insert a new section, as follow s:
“ Sec. 25a. There is hereby created a Federal reserve foreign hank of
the United States, to be under the supervision of the Federal Reserve
Board, and to be located in the city of New York, State of New York.
“ The Federal reserve foreign bank of the United States, hereinafter
referred to as the foreign bank, shall have an authorized capital of
.$100,000,000, and shall begin business with a paid-up capital stock of
$20,000,000. The stock of such bank shall be offered at par to the
banks of the United States and to the public by the Secretary of the
Treasury, any stock not subscribed for to be taken by the Treasury of
the United States subject to sale at the option of the Secretary of the
Treasury.
“ The capital stock o f the foreign bank shall pay 5 per cent annual
dividends if earned and shall not be taxable by any State or municipal44883— 18251
.....
if'
vl :
;
1
,
if
|« ...
p
*W
j ity
'
< hd
fill
ism
- i1
!
r ’S
i
ity or by the United States. The 5 per cent dividend if not earned in
any one year shall be cumulative. Any surplus shall be distributed as
follow s: One-half to surplus and one-half to the United States, until 50
per cent surplus on the then outstanding capital shall have been ac
cumulated, and thereafter such surplus dividends shall be paid into the
Treasury of the United States.
‘ The Federal Reserve Board shall prepare an organization certificate
and file the same with the Comptroller of the Currency.
“ Upon the filing of such certificate with the Comptroller of the Cur
rency as aforesaid, the said foreign bank shall become a body corporate,
and as such shall have the power—
“ First. To adopt and use a corporate seal.
“ Second. To have succession for a period of 20 years from its organi
zation, unless it is sooner dissolved by an act of Congress.
“ Third. To make contracts.
“ Fourth. To sue and he sued, complain and defend, in any court of
law or equity.
“ Fifth. To appoint by its board of directors such officers and em
ployees as are not otherwise provided for in this act, to define their
duties, require bonds of them and fix the penalty thereof, and to dismiss
at pleasure such officers or employees.
“ Sixth. To prescribe by its board of directors, by-laws, not incon
sistent with law, regulating the manner in which its general business
may be conducted, and the privileges granted to it by law may be exer
cised and enjoyed.
“ Seventh. To exercise by its board of directors, or duly authorized
officers or agents, all powers specifically granted by the provisions of
this act and such incidental powers as shall be necessary to carry on the
business of banking within the limitations prescribed by this act.
“ The foreign bank shall be conducted under the supervision and con
trol of a board of directors, consisting of nine members, appointed by
the ITesident, upon the advice and consent of the Senate.
“ One of the directors appointed by the President shall be known as
the governor, one as vice governor, and one as the Federal reserve agent.
The directors shall name a committee of five as an executive board to
actually manage the affairs of the bank. The members of the board
shall be citizens of the United States, over 35 years of age, and be men
of tested mercantile experience, and be fairly representative of the vari
ous parts ef the United States.
“ The directors shall be designated by the President to serve for from
one to nine years, respectively, and thereafter each member so appointed
shall serve for a term of nine years, unless sooner removed for cause by
the President.
"After the first year the directors shall annually elect the governor
and vice governor from among the directors appointed by the President
of the United States.
“ The salaries of the directors and officers shall be fixed by the Fed
eral Reserve Board and be paid from the earnings of the foreign bank :
Provided, That the governor of the foreign bank shall receive $25,000,
the vice governor $lo,000, and the reserve agent $10,000.
“ The directors of the foreign bank shall receive in addition to their
salary a reasonable allowance for necessary expenses in attending meet
ings of the board.
“ The board of directors shall perform the duties usually appertain
ing to the office of directors of banking associations and perform all
such duties as are prescribed by law.
• “ Said board shall administer the affairs of the foreign bank fairly
and impartially and without discrimination, and shall, subject to the
provisions of law and the orders of the Federal Reserve Board, extend
to Federal reserve banks and to member banks, and to all other banks
and bankers throughout the country, and to foreign banks and bankers
such accommodations as may be safely and reasonably made in relation
to foreign banking business
“ The powers of the foreign bank shall be as follow s:
“ To receive deposits from American and foreign banks and bankers,
from the United States or foreign Governments, in current funds in
lawful money, national-bank notes, Federal reserve notes or checks and
drafts, payable upon presentation, and also for the collection of matur
ing notes and bills.
“ The foreign bank may discount notes, drafts, and bills of exchange
arising out of actual commercial transactions: that is, notes, drafts,
and bills of exchange issued or drawn for agricultural, industrial, or
commercial purposes, or the proceeds of which have been used or which
are to be used for such purposes, the Federal Reserve Board to have the
right to determine or define the character of the paper thus eligible for
discount within the meaning of this act.
44883— 18251
39
“ T h e a g g r e g a te o f su c h n o te s , d r a f t s , a n d b ills , b e a r in g th e s ig n a tu r e
o r i n d o r s e m e n t o f a n y o n e b o r r o w e r , w h e t h e r a p e r s o n , c o m p a n y , fir m ,
o r c o r p o r a tio n , r e d is c o u n te d fo r a n y o n e b a n k , s h a ll a t n o tim e ex ce e d 5
p e r c e n t o f th e n e t u n im p a ir e d c a p ita l a n d s u r p lu s o f s a id fo r e ig n b a n k ,
b u t t h is r e s t r ic t io n s h a ll n o t a p p ly t o th e d is c o u n t in g o f b ills o f e x
c h a n g e d r a w n in g o o d f a i t h a g a i n s t a c t u a l e x i s t i n g v a lu e s .
T h e fo r e ig n
b a n k m a y d is c o u n t a c c e p ta n c e s o f t h e k in d s p e r m itte d u n d e r th e a u th o r
ity
o f th is a c t.
. . . . . . .
“ T h e fo r e ig n b a n k s h a ll n o t a t a n y t im e b e in d e b te d o r in a n y w a y
lia b le to a n a m o u n t e x c e e d in g th e a m o u n t o f it s c a p it a l s to c k a t su ch
t i m e a c t u a l l y p a id in a n d r e m a i n i n g u n d i m i n i s h e d b y lo s s e s o r o t h e r
w is e e x c e p t on a c c o u n t o f d e m a n d s o f th e fo llo w in g n a tu r e :
“ F ir s t . N o te s o f c ir c u la tio n .
“ S e c o n d . M o n e y s d e p o s ite d w it h o r c o lle c te d b y th e fo r e ig n b a n k .
» T h ir d . B ills o f e x c h a n g e or d r a fts d ra w n a g a in s t m o n e y a c tu a lly on
d e p o s it to th e c r e d it o f th e fo r e ig n b a n k o r d u e t h e r e to .
“ F o u r th . L ia b ilit ie s to th e s to c k h o ld e r s o f th e fo r e ig n b a n k fo r d iv i
d e n d s a n d r e s e r v e p r o fits .
. .
“ F ift h . L ia b ilitie s
in c u r r e d
under
th e
p r o v is io n s
of
th e
F ederal
reserve a c t
T h e d is c o u n tin g a n d r e d is c o u n tin g a n d th e p u r c h a s e o r
s a le b y th e fo r e ig n b a n k o f a n y b ills r e c e iv a b le a n d o f d o m e s tic a n d f o r
e ig n b ills o f e x c h a n g e a n d o f a c c e p t a n c e s s h a ll b e s u b je c t to s u c h li m
it a t io n s , r e s t r ic t io n s , a n d r e g u la t io n s a s m a y b e im p o s e d b y t h e F e d e r a l
R eserve B oard .
“ T h e fo r e ig n b a n k s h a ll h a v e p o w e r —
.
“ ( a ) T o d e a l in g o ld a n d s ilv e r c o in a n d b u llio n a t h o m e o r a b r o a d ,
to m a k e lo a n s th e r e o n , e x c h a n g e F e d e r a l r e s e r v e n o te s f o r g o ld , g o ld
c o in , o r g o ld c e r tific a te s , a n d to c o n t r a c t f o r lo a n s o f g o ld c o in o r b u l
lio n , g iv in g t h e r e fo r , w h e n n e c e s s a r y , a c c e p ta b le s e c u r ity , in c lu d in g th e
h y p o t h e c a tio n o f U n ite d S ta t e s b o n d s o r o th e r s e c u r itie s w h ic h F e d e r a l
r e s e r v e b a n k s a r e a u t h o r iz e d t o h o ld ;
.
,
“ (b )
T o b u y a n d s e ll, a t h o m e o r a b r o a d , b o n d s a n d n o te s o f th e
U n ite d S ta t e s , b o n d s a n d n o te s o f fo r e ig n G o v e r n m e n ts , a n d b ills , n o te s ,
re v e n u e b o n d s, a n d w a r r a n t s , w ith a m a t u r it y fr o m d a te o f p u r c h a se o f
n o t e x c e e d i n g s i x m o n t h s , i s s u e d in a n t i c i p a t i o n o f t h e c o l l e c t i o n o f
t a x e s o r in a n t i c i p a t i o n o f t h e r e c e i p t o f a s s u r e d r e v e n u e s b y a n y S t a t e ,
c o u n t y , d i s t r i c t , p o li t i c a l s u b d i v i s i o n , o r m u n i c i p a li t y in t h e c o n t i n e n t a l
U n ite d S ta t e s , in c lu d in g ir r ig a t io n , d r a in a g e , a n d r e c la m a tio n d is tr ic ts ,
s u c h p u r c h a s e s t o b e m a d e in a c c o r d a n c e w i t h r u le s a n d r e g u la t i o n s p r e
s c r ib e d b y th e F e d e r a l R e s e r v e B o a r d ;
'
. ...
“ ( c ) T o p u r c h a s e a n d t o s e ll, w ith o r w it h o u t it s in d o r s e m e n t, b ills
o f e x c h a n g e a r is in g
out of com m ;
a l tr a n s a c tio n s
as
h e r e in b e fo r e
d e fin e d
e g ta b lis h fr o m
t jm e to
tim e , s u b je c t to r e v ie w
and
d e te r m in a
tio n o f th e F e d e r a l R e s e r v e B o a r d , r a t e s o f d is c o u n t a n d e x c h a n g e a n d
c o m m is s io n s fo r th e o p e n in g o f c r e d its a t h o m e o r a b r o a d , to b e c h a r g e d
b y t h e f o r e i g n b a n k f o r e a c h c la s s o f p a p e r w h i c h s h a ll b e fix e d w i t h a
v ie w to a c c o m m o d a tin g c o m m e rc e a n d b u sin e ss.
" ( e ) T o is s u e b a n k n o t e s a n d r e c e iv e F e d e r a l r e s e r v e n o t e s u p o n lik e
te r m s a n d c o n d itio n s a s n o w p r o v id e d f o r th e F e d e r a l r e se r v e b a n k s .
■ u n T o on en c r e d its a t h o m e a n d a b ro a d fo r a c c o u n t o f d o m e s tic a n d
fo r e ig n b a n k s o r b a n k e rs, to fa c ilita te e x p o r ts a n d im p o r ts to a n d fr o m
th e U n ite d S ta te s , a n d e x p o r ts a n d im p o r ts to a n d fr o m o n e fo r e ig n
c o u n tr y to a n o th e r fo r e ig n c o u n tr y .
.
.
“ I g /u n o n
th e d ir e c tio n a n d u n d e r r u le s a u d r e g u la t io n s p r e sc r ib e d
t h e F e d e r a l R e s e r v e B o a r d t o e s t a b lis h b r a n c h e s a n d a g e n c ie s in f o r
e ig n c o u n S
p u rp o se o f fa c ilita tin g c o m m e rc e w ith th e U n ite d
S ta te s.
b ank
b a n k e r, c o r p o r a tio n , o r in d iv id u a l, o th e r
th a n
th e fo r
e ig n b a n k , s h a ll s e ll d o lla r b a la n c e s a t le s s t h a n g o ld p a r e x c e p t a s p a y
m e n t fo r m e r c h a n d ise im p o r te d in to th e U n ite d S ta t e s w it h o u t th e e x
p r e s s a u t h o r it y o f th e F e d e r a l R e s e r v e B o a r d .”
44883— 18251
o
PUTTING THE AMERICAN HOLLAR AT PAR ABROAD,
SPEECH
OF
H O N .
ROBERT
OP
In
t h e
L. O W E N ,
O K L A H O M A ,
S enate
of
t h e
U n it e d
S tates,
May 1, 1918.
PUTTING THE AMERICAN DOLLAR AT PAR ABROAD.
Mr. OWEN. Mr. President, on Monday, April 22, 1918, ap
peared an ostentatious article with big headlines explaining
“ why the Federal Reserve Board allows United States cur
rency to remain at a discount abroad, as explained bj
Kent ” Mr. Kent delivered this speech before the National For
eign Trade Council at Cincinnati. Mr. Kent is in charge of the
Foreign Exchange Division under the Federal Reserve Board.
He is said to pass on all foreign exchange transactions. In this
article Mr. Kent argues against putting the dollar at par. the
article, in my opinion, in its argument that the dollar should
remain at a discount abroad, is adapted to serve the German
interests, because the effect of it is to prevent the American
dollar buying its full value in neutral countries, and just to the
extent that the American dollar is deprived of its purchasing
power to that extent the taxes of the American people and their
sacrifices in this war will be rendered abortive, unproductive,
0,11(1 US 0 I 0 SS
If it is a good thing, as Mr. Kent thinks, that the dollar
should be at 30 per cent discount, as it is at present in Spain,
then it would be a better thing, according to Mr. Kent, to have
it at 50 per cent discount, or at 60 per cent discount, and the
hiaeer the discount the better for the American people. It is a
“ reductio ad absurdum.” The argument is false and serves
Germany’s interest.
. .._
.,
Mr Kent is posed in the press as a scientific expositor on
foreign exchange and as a man “ in high authority.” I have
carefully examined his article, which opens with the following
PaT h f 'c a « ho f the o r a t o r f o r a d o l l a r a t p a r throu ghout the w o r l d m ay
r
valuable in tim e o f peace as com m ercial propaganda, but i t h a s n o
plate in tim e o f w ar, p a rticu la rly w ith a w orld ’ s w ar, such as exists
t0Among others I have been crying “ for a dollar at p a r” as
the chairman of the Banking and Currency Committee of the
TTntted States Senate. A dollar at par abroad is just as im5>rtam a . a d o lla r a ip a r at Lome, precisely In degree to the
American business involved.
,
,
Mr. Kent’s advice is injuring America, and thereby serving
Germany, and on behalf of the American people whatever
58830— 18530
2
I
^
liiii!;-'"
1 ...■:!
the good purposes of the advisor— I denounce the advice as
hostile to the interests of America.
Keeping the pound sterling at par “ has a place” in Great
Britain’s policy.
Keeping the India rupee at par “ has a place” in East India
policy, and the United States Senate and House of Repre
sentatives passed a bill, at the request of the Treasury De
partment, to melt 350,000,000 of silver dollars, among other
things, to preserve the parity of British currency in India,
which German propaganda was deliberately trying to break
down.
The advice of foreign exchange expert, Mr. Kent, that the
cry of a dollar at par has no place in time of war I shall answer, and will show the utter fallacy of his arguments, which
are so misleading and so certain to injure America.
Any man who argues against doing what reasonably lies
within our power to put the American dollar at par is giving
advice injurious to the United States, even if he be in charge
of the Foreign Exchange Division under the Federal Reserve
Board. The National Foreign Trade Council needs better ad
vice than it got at Cincinnati from Mr. Kent.. The United
States Treasury needs a new set of advisers, because their ad
visers are advising against the interests of the people of the
United States, and I am not willing to be silent when this
injury to America is being perpetrated.
The President of the United States is in favor of keeping the
dollar at par, notwithstanding Mr. Kent.
The Secretary of the Treasury is in favor of keeping the
dollar at par, notwithstanding Mr. Kent.
The Assistant Secretary of the Treasury, Mr. Leffingwell, is
in favor of keeping the dollar at par, notwithstanding Mr.
Kent, and the chairman of the Committee on Banking and
Currency of the Senate, and the chairman of the Banking and
Currency Committee of the House of Representatives are both
in favor of keeping the dollar at par.
The obvious reason why the dollar should be kept at par
is that we are compelled to buy many necessities for ourselves,
as w’ell as for our allies, of neutrals, and to that extent we must,
in making war purchases, have our dollar buy as much as
possible, and not as little as possible. Any person of good sense
might understand this unless his brain had become hopelessly
confused in the tangle of his excessive knowledge as an expert.
Let us examine this expert’s advice. The first argument made
by Mr. Kent is as follow s:
* T h e U p h e d S t a t e s , in o r d e r t o c a r r y o u t h e r p a r t in t h e w a r , i s g o i n g
t o b e o b lig e d to s u p p ly fr o m h e r o w n r e s o u r c e s a n d fr o m th o s e o f m a n y
* f r ,,c o u n t r i ? s o f t h e w o r l d c o m m o d i t i e s t o t h e v a l u e o f m a n y b i l l i o n s
o f d o lla r s .
R e g a r d le s s o f h e r g r e a t w e a lth , th e r e is a p o s it iv e lim it to
h e r a b ilit y to fu r n is h su c h s u p p lie s .
I n o r d e r to w in t h e w a r s h e m u s t
b e in a p o s i t i o n t o d o s o f o r a lo n g e r p e r io d t h a n t h e e n e m y .
The
le n g th o f tim e t h a t sh e c a n c o n tin u e to fu r n is h n e e d e d s u p p lie s w ill
d e p e n d u p o n h e r a b ilit y to c o n se rv e h e r re so u rc e s.
And Mr. Kent thinks we can conserve our resources by selling
gold dollars in Spain for 60 cents, instead of selling them for a
dollar.
The simple truth is that to the extent we are required to buy
from neutral countries we should control the shipments from
them to our actual necessities, and this we can do under the
existing law. We can and do control our exports in like man58830— 18530
3
ner under existing law. Great Britain and France do the same.
And France, who has borrowed funds from Spain at 7 per cent
to meet her balances there, sets a suitable example to Great
Britain to do the same thing.
It is better for Great Britain and France, and for the United
States, for that matter, to pay 3 or 4 per cent interest above
the normal rate than it is to pay a 40 per cent discount, and
anybody should be able to see this, especially a person engaged
in conserving the resources of the United States, which Mr.
Kent so anxiously desires to do. It is better to pay 6 per cent
or 7 per cent or 8 per cent in Spain for money or on Spanish
balances here rather than to compel our importers to pay 30
and 40 per cent for money in Spain. It comes back immediately
upon our own consumers. It comes back upon them with the
merchant’s profit added. Great Britain understands this per
fectly well, and so does France, and both of them are making
strenuous efforts to place credits in Spain for the purpose of
putting their own currency more nearly at p a r; and an attempt
is being made now by the Treasury Department, on our behalf,
to do the same thing. In other words, the Treasury Department
is trying to do now what Mr. Kent, the Treasury expert, argues
it is against our interest to do. They are trying to put the
dollar at par. and Mr. Kent is arguing before the country that
its dollar ought to be at a discount.
Mr. Kent argues that our interest and that of our allies de
mands that we maintain such commercial relations as will
enable us to continue the purchase of neutral commodities con
stantly for a long period. And he argues in consequence that
by this system—
W e w ill also be helping to keep the countries w ith w hich we trade
in a h e a l t h i e r financial condition, w hich should be o f great benefit in
h e l p i n g u s to find a m arket for our goods when the w ar is over,
* * *.
Selling Spain American dollars at 60 cents on the dollar would
certainly serve to keep Spain in a healthier financial condition,
but at our expenses, and at our serious expense. It is unpar
donable to permit our gold dollar to be at 40 per cent discount.
It is shameful to the United States, and I shall not submit to
it if I can help it.
Mr. SHAFROTH. Mr. President-----The PRESIDING OFFICER (Mr. C urtis in the chair).
Does the Senator from Oklahoma yield to the Senator from
Colorado?
Mr. OWEN. I yield.
Mr.
SHAFROTH. The proposition which is made is, it
seems to me, so absolutely void of any reason, that I should like
to know whether Mr. Kent gives any other reason.
Mr.OWEN. I shall put the article in full in the Congres
s io n a l
R ecord, and I invite Senators to read it.
It is abso
lutely shameful and disgusting. It has no argument in it
worthy of the name.
Yet this man as an expert of the United States Treasury goes
out and addresses a great convention of business men in the
United States to persuade them that the dollar should be kept
at a discount: The President wants our dollar at par; the Secretai-y of the Treasury wants it at par. and this alleged expert
argues against having it at par. As the Senator from Colorado
said there can be no reason why the dollar of the United States,
a dollar worth par in gold, should be selling at 60 cents on the
58830— 18530
dollar In Spain. There is no just reason for it. It is because
the dollars we have loaned to our allies have been used in large
part to meet the trade balances due to Spain for the Spanish
commodity shipments to Great Britain and France, and because
our own purchases here by our own importers compel our peo
ple, our importers, to have a certain limited number of pesetas,
and the banks control the supply of commercial bills in pesetas
and are speculating upon them and compel our importers to pay
any price that they please. That is the reason of it. It is all
right from the bankers standpoint, but it is highly offensive to
a good American.
It is argued that the United States will find it advisable to
curtail its exports to neutral countries and to hold our imports
within reasonable limits, and says:
An adverse exchange rate is the key to such force, and is a great
regulator of trade. It puts such difficulties in the way of our imports
that without other pressure we endeavor to do without them in so far
as possible.
Certainly if our gold dollar buys 60 cents’ worth in Spain, our
merchants do regard it as a serious difficulty, because they
must impose this excess charge on Spanish commodities on their
own consumers, with the merchants’ profit in addition. It is
a very serious difficulty, obstructing trade, interfering with
legitimate commerce. It is precisely for this reason that such
a difficulty should be removed, and imports and exports con
trolled by our other mechanism provided by law by means of a
license system. We provided for that by a license system.
To argue that this obvious evil is a benefit because it is a
means of preventing Americans from buying their necessities
is illogical and senseless. The things they are obliged to have
they will buy at the market cost. The purchase and sale of
things nonessential to war can be and has been stopped by the
license mechanism otherwise provided by law.
The discredited American gold dollar puts the United States
in the attitude of having its currency dishonored and its finan
cial credit abroad impaired. It gives psychological encourage
ment to the German and psychological discouragement to the
allies. It has no commercial sense in it for the reason that just
as France borrowed money from Spain at 7 per cent—3 per cent
above the normal— and to that extent avoided the tax, we
could borrow and avoid the tax we pay of 40 per cent on im
ports. It is better to pay 3 per cent per annum than 40 per cent
with each turnover. The merchant keenly feels this. A bank
expert does not. His class profits on fluctuating high exchange
rates.
Mr. Kent’s article emphasizes the fact that the Federal Re
serve Board, through its Division of Foreign Exchange, knows
the exact cash balances each Wednesday night which every
country in the world has in the United States, and he states
that the neutral countries are putting heavy balances into the
United States. If this is true, then these balances have been
transferred to the United States by bankers by the sale of cred
its acquired in neutral countries (by the sale of their commodi
ties. payable in terms of their own money), and the New York
bankers may sell such pesetas at a high rate to merchants com
pelled to compete injuriously for such pesetas or croners or
guilders. I would discourage this profiteering. Mr. Kent’s
advice would encourage it. I look at the problem from the view58830— 18530
5
point of the importer, exporter, consumer, and producer. The
banking expert looks at the problem from the opposite side.
His class profits on fluctuating exchange.
Moreover, the neutral countries are voluntarily sending their
balances to’ America, which is the only thing required to bring
the dollar immediately to par if sufficiently encouraged, but Mr.
Kent is opposed to encouraging the putting of the dollar at par,
if his general thesis be correct. While it is to our obvious ad
vantage, as Mr. Kent says, to encourage these countries to put
their balances in the United States, what 1ecomes of Mr. Kent’s
argument that it is to our advantage to keep the dollar below
par when he would encourage these balances which would bring
the dollar to par. The one argument contradicts the other.
We can put the dollar to par in several different ways.
First, by forbidding the sale of pound sterling for dollars
and compelling the Spanish merchants to buy dollars with
pesetas. And this only means limiting arbitrage until the
dollar reaches par.
__
.
Second. We may accomplish it by placing United States
bonds payable in pesetas in Spain, and thus buy pesetas neces
sary to meet the urgent, though limited, demand of our im
porters.
Third. We can accomplish it by encouraging what Mr. Kent
says is taking place without encouragement. That is,^ encour
aging foreign banks to keep balances in the United States at
interest, and we can afford to pay them 6 per cent or 7 per cent
for such balances, rather than compel our merchants to pay 40
per cent for exchange and the customer in the United States
40 to 50 per cent for commodities.
Moreover, if the dollar was at p a r; if the policy of the United
States was to keep the dollar at par, these balances of neutral
countries would greatly expand, because then foreign bankers
would know that they would not suffer any loss in the future
by the depreciation of the American dollar by this adverse ex
change. When they know that they will get their principal
back with interest in terms of their own currency at par they
will deposit their balances here more readily.
Fourth We can bring the American dollar to par by impos
ing an extra tax on goods required by Spain, putting the export
tax at the currency rate of the exchange, whatever it is. It
would not take Spain long to discover the wisdom of exchang
ing pesetas for dollars at par, but I do not believe in such a
friction-arousing policy.
Fifth. Another way to put the dollar at approximate par is by
negotiating with the Government of Spain, with the cooperation
of France and Great Britain, and seeking their just treatment as
a matter of amity and commercial decency. This, however,
would require a constant series of negotiations, and while of
value is not of as much value as using the absolute power which
we have to require commercial justice through the regulation of
individual transactions.
It will be remembered we put upon the finance-corporation
bill a provision that those bonds might be issued in terms of for
eign money, and we put in the third liberty-loan bill that the
bonds of the United States might be issued in terms of foreign
money, so that a person acquiring those bonds in foreign coun
tries would know he would get his principal and interest back
without the discount of an adverse exchange rate. Congress did
5883 0— 18530
r
6
that very thing for the purpose of bringing the dollar to par,
showing that the Senate of the United States desires to put the
dollar at par, that both Houses desire to put it at par, and yet
this expert of the Treasury is advising the bankers of the United
States and argues in favor of keeping the dollar at a discount.
The Congress of the United States expressly authorized the
President of the United States not only to embargo gold and
silver, if desirable, but also to embargo credits; and when we
put an embargo on the sale of dollars for pound sterling and
compel Spain to buy the dollars she requires of us with pesetas,
thus giving us pesetas in exchange for these dollars, we have an
immediate remedy without dealing unjustly in the slightest de
gree with Great Britain.
Because Spain imported from us last year $92,000,000 of goods
and we imported from her only $36,000,000, she owed us on a
net balance $55,000,000. Yet the American dollar has come to
so low a level that it only brings 60 cents in Spain, when, in
point of fact, if we compelled Spain to buy her dollars from us
exclusively we could make a dollar worth 60 per cent above par,
because she is obliged to have our dollars.
Our loans to our allies have been injuriously, if not wrong
fully, used against us. On May 21, 1917, in Des Moines. Iowa.
Hon. W. G. McAdoo delivered at a meeting of business men and
bankers of Iowa an address, in which he explained that the
loans already authorized to be made our allies of $3.000,000,000—
and that was enough to consume our credit trade balance for
that year—would go to “ five billions or six billions,” and said in
relation to the bond issue: “ This money is not going to be taken
out of the country. All of this financing is largely a matter of
shifting credits; it is not going to involve any loss of gold; it
is not going to involve any loss of values,” and so forth.
The money was taken out by hundreds of millions. We
shipped, I understand, 80,000,000 gold dollars to Spain last
year, through London. Spain owed us $55,000,000. We let
Great Britain have that $55,000,000 to pay Spain, and we fur
nished $88,000,000 more of our gold to pay British balances
due Spain; and on top of that our dollar has been permitted
to go to a tremendous discount, and every dollar we buy now
is costing our consumers 50 per cent more than it ought. In
our normal purchases in Spain it would cost us one-half of
$36,000,000, or $18,000,000, per annum. In that one country
there is a great net loss to America. Is that to the advantage
of the United States in a great war? It is against the interests
of the United States, it is in the interest of Germany, and I
object to it most seriously. I filed my objection in the Treasury
Department. I argued this matter before the Federal Reserve
Board, with Mr. Kent present, and Mr. Kent told me to my
face it is better for the dollar to be at a discount. That argu
ment was made in the Federal Reserve Board room ; and, after
I presented the answer fully on the floor of the Senate, to
have this expert go out in the United States carrying on a
false propaganda is unendurable and ought not to be per
mitted by the Government of the United States.
The money was taken out by hundreds of millions, involving
loss o f gold and of values, and then Congress passed an act au
thorizing the President to control the sale of dollars or transfer
of credits. The President put the power in the hands of the
Secretary of the Treasury by his proclamation of October 12,
5883 0— 18530
1917, and Mr. McAdoo trusts it, apparently, to Mr. Kent, who
now seriously argues against keeping the dollar at par, as the
President and the Secretary of the Treasury desire, and as the
Congress desires it shall be done.
We must stand by our allies, and we can do so and still
protect the dignity of our own currency. We ought to protect
the American dollar, and as economically as possible. We can
be as generous as we please with our allies and still preserve
the honor and dignity of the American dollar.
What was the anxiety shown by the British Government a
few days ago when an appeal was made to us for $350,000,000
of silver. It was to keep the rupee at par. Did Great Britain
think it important? She thought it vital. The rupee was being
put below par by a well-organized German propaganda in
India. I will not stand for any propaganda to put the Ameri
can dollar below par for this country; I do not care what the
motive of the man is. and I assume, indeed, I ain glad to be
lieve, that his motives are not bad. I do not think his motives
are necessarily bad. I merely think that he lacks common
sense.
If necessary for us to borrow from these neutral countries,
who are without effort placing their balances here and paying
them a high rate, 6 per cent, 7 per cent, it would only be 2
or 3 per cent margin per annum on enough money from the
Spanish banks to pay foi our imports from Spain at par, whereas
Mr. Kent would advise us to pay 40 per cent discount on our
goods shipped from Spain as a means of winning the war. It
is bad advice, and if Mr. Kent does not know better he ought
to be retired. If he does really know better—and I do not think
he does—he ought to be indicted for aiding the enemy.
It is a serious thing, putting the dollar at a discount. It is
a very serious thing. Suppose the American dollar were to
fall to a discount to-day in the United States, what would it
mean? It would mean that every gold dollar would go in
hiding. That is what it would mean. It would mean that
every contract in the United States would be suddenly thrown
upon a fictitious basis and dislocated. It would mean the most
complete upset of all our business life. Every man knows that,
and we have taken infinite pains to store up gigantic quantities
of gold for the purpose of keeping the American dollar at par in
the United States, so that everyone who deposits in our 25,000
banks should know that he can get his deposit in gold on de
mand. To say that the dollar should be at a discount abroad
while it is at par at home has no logic, has no justification, and
is mischievous in the highest degree.
Mr Kent emphasizes the fact of the bank balances of neu
tral countries piling up in the United States; also that the
neutral countries have stripped themselves of commodities
to sell them at a high price to Germany, and they must after
the war look to us for commodities. This is true; and it
means that the normal demand for commodities from Amer
ica after the war would give us the equivalent of probably
in excess of an annual commodity trade balance of a thousand
million dollars. In addition to this will come inteiest charges
from Europe amounting to a half billion more, and in addition to
this will come the mercantile marine freight credits of American
ships, so that America may be expected to have a flow of balances
58830— 18530
; ■>:
I- 1 i.
1
1
"’
ffrn ij
*2 ’ S
.... S
if !
1
i Hi*
if
sg;;j
jigj;::
h::
!
< 'SJA
. V
< >
■in i
5SM 6
Pi: P
• ' y
:
due her amounting to two or three billion dollars per annum
after the war is over.
All of these neutrals will need their trade balances then in
the United States, and they need, and they know they need,
them now to begin the arranging of credits in America to supply
them with needed commodities after the war, for America will
be In a position to control commodities all over the world be
cause of the balances which will be due her.
Mr. Kent does not see that these facts comprise an overwhelm
ing argument why the dollar should go to par and stay at par,
because the necessity of the world for the American dollar will
be gigantic. We have the right to anticipate their needs for
this dollar and place our own bonds abroad and invite neutral
balances here. Indeed, our trade balance last year was $3,000,000,000. That must be paid with dollars, or commodities, or
gold, or securities. Indeed, it forms the basis upon which the
American dollar would go to a premium if it were permitted to do
so, which we ought not to allow, however, as the dollar should be
used as a standard measure of value, never varying, utterly de
pendable, the standard of value throughout the world, if we
want money to protect every other place as the financial center
of the world.
The bankers should not be permitted to tamper with our
financial yardstick, even if they do profit by it or profiteer by
it, as I verily believe some of them are doing n ow ; I hope not
with Mr. Kent’s knowledge.
Mr. SMOOT. Will the Senator yield?
Mr. OWEN. Certainly.
Mr. SMOOT. I am very much interested in what the Senator
is saying, and I think it would be good if the American people
generally understood the situation. I wish the Senator would
also add to his remarks that it is not only the banks in Spain
that are profiting by a depreciated United States currency, but
speculators, and the speculator to-day is making all the way
from 20 to 25 and 30 per cent on every dollar of foreigncurrency bills that he can secure.
Mr. OWEN. I have no doubt that is the case, but we ought
not to allow a condition to remain where this kind of thing can
be done at the expense of the American people. That is the
point I am making.
Mr. Kent justifies our gold embargo and enlarges upon our
exact knowledge of balances held by neutral countries in
America. This is the end of the argument of Mr. Kent in telling
why the Reserve Board allows United States currency to re
main at a discount. His alleged explanation of three columns is
no explanation whatever. It explains nothing. And the lauda
tory headlines of the article, with its boast that it is a scientific
exposition is utterly inaccurate but very serviceable as a piece of
propaganda. He makes no adequate or convincing explanations
whatever to justify keeping the dollar at a discount.
The utterly fallacious argument has been made that while
importers lost heavily exporters gained.
That argument appears on page 158 of the Federal Reserve
Bulletin of March 1, 1918. As a matter of fact, an exporter
neither gains nor loses. A man who takes a thousand dollars’
worth of goods from New York to Barcelona gets his $1,000, and
if he pays the freight and commission he gets his freight and
commission back and $1,000. If he gets 3 pesetas for a dollar
58830—18530
he immediately sells his pesetas for dollars and gets the dollars
back, and it comes out the same $1,000; and that is all there is
of that.
As a matter of fact, in a country where the currency is depeciated workmen are temporarily paid less and goods are made
for less and exports are stimulated by this fact of the goods being
made cheaper at the expense of labor.
That is an old truism in the doctrine of international ex
changes, explained by various writers, and a school boy who has
studied international exchange knows about it. But this is a
transitory matter and has no relation to the United States be
cause the dollar in the United States has not depreciated. Labor
is not underpaid in the United States; goods are not selling below
a normal profit in the United States. The contrary is true of
Germany. German labor is underpaid, her currency at home has
depreciated, and she is making goods cheaper than they can be
made in Sweden, but at the expense of her own German work
men, and Germany is thus underselling the manufacturers in
Sweden. Sweden is on the point of passing a tariff act to exclude
that advantage over Swedish manufacturers gained by Germany
at the expense of the poor, underpaid German workmen. While
that appears in the Federal Reserve Bulletin, it affords no
justification in keeping the American dollar at a discount because
we gain no advantage in exports.
Mr. Kent is advertised as having complete control of all
foreign-exchange transactions. If he had exercised the powers
given to the President and restricted the transfer of United
States credits abroad, the American dollar would have been at
par now. It can be brought to par within a very short time in
most of the neutral countries.
It is perfectly plain to any man who will follow this with the
least attention. If we forbid the sale of dollars for pounds
sterling, then the only way Spain can get dollars from us to
pay her $92,000,000 of bills to us is to buy dollars from our
market by the sale of her commercial bills in payment for ship
ment from the United States to Spain. Spain would have, then,
to buy $92,000,000 worth of dollars from us, less our purchases
of $36,000,000 of commodities from Spain.
Mr. SMOOT. Or send gold for it.
Mr OWEN. Or send gold for it, and therefore our dollars
would immediately go to par. They would go to par inside of
a week. Congress gave that power to the President, and he
gave it to the Secretary of the Treasury, and the Secretary of
the Treasury gave it to Mr. Kent, and Mr. Kent advises us now
not to do it, notwithstanding the President wants it done and
Congress wants it done.
Mr. GALLINGER. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. GALLINGER. If the Senator will pardon me, I ought
to have understood his statement concerning Mr. Kent, but I
was engaged otherwise. Will he state who Mr. Kent is.
Mr. OWEN. Mr. Kent has charge of the foreign-exchange
business of the Federal Reserve Board, and he vis6es the trans
fers of credits from the United States. Congress authorized
the President to control the transfer of credits from the United
States. The President authorized the Secretary of the Treas
ury to discharge this function. The Secretary put Mr. Kent in
charge, and Mr. Kent tells us it is better not to do it.
58830— 18530
IA ! K1
l;|
10
Mr. GALLINGER. So Mr. Kent in a sense speaks officially;
that is, he is an official of the Government?
Mr. OWEN. Y es; he is supposed to speak officially; but I
insist that he is misrepresenting the officers who are in control
of that department. I am satisfied from what he has said to
me that the Secretary of the Treasury wants to put the dollar
at par.
The Spanish Government in 1916, finding that there was
danger of Spanish credits and Spanish commodities migrating
from Spain to furnish the sinews of war to the belligerents,
passed an act prohibiting the placing in Spain foreign or
Spanish securities except with the approval of the council of
ministers. I wish, without reading, to put the Spanish royal
decree and act of the Cortez in the R ecord for the information
of Senators. I will not take the time to read it.
The VICE PRESIDENT. Without objection, permission to
do so will be granted.
The matter referred to is as follows:
[Translation.]
ROYAL
DECREE.
In accordance with the council of ministers, I hereby authorize the
minister of finance to present in the Cortes a project of lawTprohibiting
the introduction into Spain of foreign securities without the authoriza
tion of the Government.
Given in the royal palace this 14th day of June, 1916.
A lfon so.
1 f I !!»
.
W •!
'j;
P
;
! llffl!!:
%*■" 1(
<
The Minister of Finance, Santiago Alba, to the Cortes:
The abnormal conditions controlling the economic life of all countries
in consequence of the present European war demand in our own country,
as in others, the adoption of measures of an exceptional character to
prevent, as far as feasible, the emigration of Spanish funds to the detri
ment of the development of national wealth, and the withdrawal from
the State of the means for carrying out, at the proper moment, such
credit operations as may be demanded by public interests.
Bearing these considerations in mind, and without forgetting that
measures of this nature must always have such elasticity as may permit
the Government to alter them as the case and circumstances may de
mand, the undersigned minister, in accord with the council of ministers
and with Ilis Majesty’s authorization, has the honor to submit to the
deliberation of the Cortes the following
PRO JECT O F L A W .
Article 1. After the promulgation of the present law, and until a date
which shall be fixed by decree agreed upon at a council of ministers,
there shall be prohibited : Announcing, issuing, putting in circulation or
for sale, pawning or introducing in the Spanish market securities of the
debt and other legal tenders of foreign governments, as well as stocks,
obligations, or titles of any kind of companies or corporations not
Spanish.
Nevertheless, on tne proposal of the minister of finance, the council
of ministers shall be able to grant, in respect to provisions in the pre
ceding paragraph, the exemptions he may judge proper.
Article 2. The Government likewise, on the proposal of the minister
of finance, may prohibit the introduction into Spain of Spanish securi
ties, of corporations or societies, also Spanish, whenever these stocks are
domiciled abroad. Those who desire to introduce them are hereby
obliged to report to the Government as to such introduction and destina
tion.
Article 3. The violation of the present law shall be punished with a
fine of 1,000 to 10,000 pesetas, and in case of repetition, with a fine
of from 10,000 to 25,000 pesetas.
Article 4. The minister of finance will dictate the proper orders for
the execution of this law.
Madrid, June 14, 1916.
Santiago A lba,
The Minister of Finance.
58830— 18530
1.«
1
1
Mr. OWEN. It was precisely the same principle which
caused Congress, as a war measure, to pass the trading with
the enemy act, approved October 6, 1917; among other things
the act providing—
That the President may investigate, regulate, or prohibit under
such rules and regulations as he may prescribe, by means of licenses
or otherwise, any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency, transfers of
credit in any form (other than credits relating solely to transactions
to be executed wholly within the United States), and transfers of
evidences of indebtedness or of the ownership of property between
the United States and any foreign country, whether enemy ally of
enemy, or otherwise, or between resident of one or more foreign ccruntries, by any person within the United States; and he may require
any such person engaged in any such transaction to furnish, under
oath, complete information relative thereto, including the production
of any books of account, contracts, letters, or other papers in con
nection therewith in the custody or control of such person, either
before or after such transaction is completed.
Why? For the very reason that I have mentioned, so as
to prevent credits migrating from the United States, unjustly
and unfairly to us, and putting our dollar below par abroad.
It was the same principle that caused Congress to pass the
espionage act, approved June 15, 1917, which among other
things provides—
Section 1. Whenever during the present, war the President shall
find that the public safety so require, and shall make proclama
tion thereof, it shall be unlawful to export from or ship from or take
out of the United States to any country named in such proclamation
any article or articles mentioned in such proclamation, except at such
time or times, and under such regulations and orders, and subject to
such limitations and exceptions as the President shall prescribe, until
otherwise ordered by the President or by Congress : Provided, however,
That no preference shall be given to the ports of one State over those
of another.
On October 12, 1917, the President vested in the Secretary of
the Treasury the control of foreign exchange, exporting, gold
transfer, credits, etc., in the following terms:
I hereby vest in the Secretary of the Treasury the executive adminis
tration of any investigation, regulation, or prohibition of any transac
tion in foreign exchange, export, or ea -marking of gold or silver coin,
or bullion or currency, transfers of credit in any form (other than
credits relating solely to transactions to be executed wholly within
the United States, and transfers of evidences of indebtedness or of the
ownership of property between the United States and any foreign country or between residents of one or more foreign countries, by any per
son within the United State* ; and I hereby vest in the Secretary of the
Treasury the authority and power to require any person engaged in any
such transaction to furnish under oath complete information relative
thereto including the production of any books of account, contracts,
letters,’or other papers in connection therewith in the custody or control
of such person, either before or after such transaction is completed.
At the same time the President vested in the War Trade Board
the authority to issue licenses for exports or imports in para
graphs 2 and 3 of his Executive order of October 12, 1917, in
the following language:
I hereby vest in said board the power and authority to jssue licenses
under such terms and conditions as are not inconsistent with law or to
withhold or refuse licenses, for the e x p o r ta t io n o t a lla tK ie s except
coin, bullion, or currency, the exportation or taking of which out of the
United States may be restricted by proclamations heretofore or here
after issued by me under said Title VII of the espionage act.
I further hereby vest in said War Trade hoard the power and au
thor! t v t o i s s u e ,inon such terms and conditions as are not inconsistent
with law or to withhold or refuse, licenses for importation of all articles
the importation of which may be restricted by any proclamation here
after issued by me under section 2 of the trading-vith the-enemy act.
The President of the United States, the Secretary of the
Treasury, and the best bankers, and various intei national ex58830— 18530
\
1k » .i j * •
;v
#
v
fciujjfL
■ ....jr;
...ill. till
M i!!
m b
n
•
i
ft:* * i
i f ’ i • lllll III
Swan k
:*
V
i
1
J g ljjj
• *
perts with whom I have discussed this matter are convinced
of the wisdom of maintaining the dollar at par. The only diffi
culty having been the means by which to accomplish it. I re
gard it as grossly unbecoming in Mr. Kent to attempt to create
public opinion in favor of keeping the dollar below par. Such
conduct I regard as disloyal and insubordinate to the Presi
dent’s wishes and deserving a stern rebuke. Mr. Kent should
devote his knowledge in suggesting and perfecting plans by
which the dollar could be put at par and the Reserve Board and
the Treasury Department officials should find a means of thus
protecting American interests, and Mr. Kent’s conduct in going
before the National Foreign Trade Council and attempting to
mislead public opinion I regard as very reprehensible.
In my judgment the Secretary of the Treasury should dismiss
Mr. Kent from office as unfit to advise the Treasury Department
of the United States. It is this kind of advice, the advice of
the banker who thinks in terms of interest, or profit and of com
missions, that is calculated to mislead the Government officers.
Some banks profit by fluctuating exchange rates, and some
hanks profit by speculating in exchange rates, by acquiring for
eign credits at a low rate and selling them to our merchants
who are compelled to have foreign credits in foreign currency
at a high rate. The bankers, however, should not prevail over
our importers and consumers.
Mr. GALLINGER. Mr. President, alluding to Mr. Kent, I
will ask the Senator from Oklahoma if he has knowledge as to
whether or not any member of the Federal Reserve Board in
dorses Mr. Kent’s views? It has been suggested, or at least I
have heard it suggested, that at least one member of the Federal
Reserve Board was in harmony with Mr. Kent.
Mr. OWEN. I think that the influences surrounding Mr. Kent
have been persuasive with some members of the board. I should
not like to quote their names, unless they wish to put themselves
on record with regard to i t ; but I think one or two members of
the board have been led to that belief; and it is perfectly ob
vious that they have been grossly misled.
Mr. GALLINGER. I do not wish to mention any name
myself, but it has been suggested to me that such is the fact.
Mr. OWEN. I think it is the fact. That is the reason why
I regard this advice as particularly mischievous, because the
members of the Federal Reserve Board who have lived only
within our domestic lines, who have not been engaged in inter
national banking, and who have had no particular reason to
have studied this matter, necessarily would rely upon such
alleged expert advice; I should not be inclined to blame them
for accepting the opinion of a man whom they regard as very
high authority; but when I see the advice is wrong I feel it
my duty to the country to speak out and show why it is wrong,
because it is injuring American interests in this war, and I do
not think we ought to permit it.
I submit a statement o f the exports and imports from the
neutral countries of Europe with the United States, showing a
net balance due us of about $200,000,000 last year. These bal
ances must increase because those countries have denuded
themselves in large measure in supplying the belligerents
around them, and they have to call on us more and more for
supplies.
58830—18530
13
Balance of trade in the commerce of the United States with the neutral
countries of Europe during the calendar year 1917.
Excess o.—
Countries.
Imports.
Exports.
Imports
2977, 453
Denmark......................................
Netherlands................................. 22. 744,504
6,280,233
30,881, G
30
18,059,487
19,834,068
$32,388,864
90,520,301
02,860,850
92,409,320
20,900,854
19,502,045
$332,"623*
Exports.
531,411,411
67, 775,797
56,586,617
55,587,690
2,831,367
The international credit trade balances to the neutral coun
tries of Europe were large, and they received in lieu thereof
gold and credit and securities, the securities being merely a form
of credit. The Government of the United States can control
both imports and exports under the law. It can, as far as the
neutral countries are concerned, immediately bring the dollar
to par, because they owe us more than we owe them, and we
only need to require them to buy the dollars they owe us in
terms of their own currency to give the American consumers
the benefit through their merchants of foreign currency at par.
Inducing the foreign banks to place their balances in the
United States directly is another way to do it to accomplish
the same end.
Selling United States bonds in these neutral countries is an
other way to accomplish it.
All of these factors should be employed and through every
available agency the dollar should be brought to par and kept
at par as a means of helping us win this war.
I ask permission to put the article of Mr. Kent into the
R ecord, without reading.
The VICE PRESIDENT. Without objection, it is so ordered.
The article referred to is as follows:
[From the New York American, Apr. 22, 1918.]
W hy
R e s e r v e B oard A l l o w s U n it e d S t a t e s C u r r e n c y to R e m a in
a t D i s c o u n t A b r o a d E x p l a i n e d B y F. I. K e n t — T e l l s C i n c i n n a t i
C o n v e n t io n T h a t B e n e f it s B o t h N o w a n d A f t e r t h e W a r W il l
R e s u l t F rom P o l ic y — H in t to C h il e for C r e d it s .
Attention has been so intensely centered on the increasing discount
to which the dollar has been falling abroad that an explanation of the
international financial position of the United States at this moment is
of wide interest. More so, if this explanation comes .from one in high
authority
The following simple and yet almost scientific exposition
of the foreign exchange relations of this country was given in a speech
bv Fred I Kent before the National Foreign Trade Council at its con
vention just closed at Cincinnati. Mr. Kent is in charge of the Foreign
Exchange Division under the Federal Reserve Board. . He passes on
all foreign exchange transactions, and in his hands is concentrated
the stupendous task of seeing that no funds pass out of the country
into enemy hands. This requires examination of an immense number
of drafts and papers. But it also places in his hands information
invaluable to the country while at war. Why certain of our exchanges
have been allowed to depreciate is fully explained by Mr Kent. lie
outlines the general policy with regard to our giving aid to strengthen
allied exchange rates in other countries.
[By Fred I. Kent in his speech before the National Foreign Trade
Council.]
The cry of the orator for a dollar at par throughout the world may be
valuable in time pf peace as commercial propaganda, but it has no place
In time of war, particularly with a world’s war such as exists to-day
The United States in order to carry out her part in the war, is
going to be obliged to supply from her own resources and from those
58830— 18530
|
of many other countries of the world commodities to the value of many
billions of dollars. Regardless of her great wealth, there is a positive
limit to her ability to furnish such supplies. In order to win the war
she must be in a position to do so for a longer period than the enemy.
The length of time that she can continue to furnish needed supplies
will depend upon her ability to conserve her resources. There are many
products which she can obtain from within her own territory that will
outlast the war needs. There are many others, however, which need
supplementing from other countries of the world if we would maintain
the highest efficiency of the war engines which we produce and of the
men who operate them.
OUR
gP.I I .......... 1
M UST
w
......
I r * !;
BEST
C U R T A IL
i
1
||' i itiiil;
iiii r
Shi. . -S ii|!|
<
>
!
j
' ■*
EXPORTS.
As the war goes on, the United States will find that it will have to
curtail its exports to neutral countries, as Great Britain, France, and
Italy have been obliged to do, so that it is reasonable to suppose that
the balance of trade with many neutral countries will be constantly
against us throughout the war. This being true, and it being greatly
to the advantage of neutral countries to have our market for their
goods continue in as large a way as possible, we must have some strong
force to hold our imports within reasonable limits. An adverse ex
change rate is the key to such force and is a great regulator of
trade. It puts such difficulties in the way of our imports that without
other pressure we endeavor to do without them in so jar as possible.
The countries of export, in order to keep a market for their goods,
will strive to find ways to allow continuation of such exports as we
must have, even to the point of allowing funds to pile up in this
country or through the extension of credits.
FUN DS
tan:'’
W'
COURSE.
Our greatest interest, therefore, and that of our allies, demands that
we maintain such commercial relations with the neutral countries which
have commodities that will be needed by us as will enable the United
States to continue the purchase of such commodities constantly for a
long period. While there are probably none of these commodities which
we can not (if need be) develop substitutes for. yet if we can continue
their purchase from other countries, partly in exchange for things
which we can better spare than the articles received for them, we will
have accomplished two most important results— we will have main
tained our foreign trade with other nations and so have held their in
terest in this country, and we will have saved the time of that portion
of our population which might otherwise have had to be engaged in
creating and manufacturing substitutes, in work that will result to our
greater advantage. We will also be helping to keep the countries with
which we trade in a healthier financial condition, which should be of
great benefit in helping us to find a market for our goods when the war
is over and our manufacturing interests turn from war industries.
ACCUM ULATE.
As funds accumulate here which can not be exported there will be an
increasing tendency on their part to purchase commodities from this
country with them, which will offer a great inducement to the people
of the United States to strive along with their war work to pay a part
of their accumulating indebtedness through current exports.
In Argentina, for instance, we find that for the protection of its people
the Argentine Government considered it to its very great interest to
make an arrangement with the United States under which Argentine
funds would be left on deposit in this country until after the war,
provided the disbursement of the equivalent in Argentina was made for
exports from Argentina to the United states. It is also true that the
exports from the United States to Argentina increased from $76.874,258
in 1916 to $107,641,905 in 1917, even though we were not at war in
the first year and were at war in the second. As long as exchange con
tinues against us with Argentina the same tendencies will continue
active, and when the war is over we will be as much less in debt to
Argentina as the amount of exports which we have been able to furnish
her year by year, that have been withdrawn from this country by her
in order to get her funds home and make it possible, together with
the extension of such credits as she can afford, to keep our market for
her goods open.
A S TO A R G E N T IN E
W OOL.
On our part we have, for instance, been induced to conserve and in
crease our supply of wool, so as to be able to import, less from Argen
tina. As a result as the war goes on, we can hope to keep our rela
tions with Argentina in such position that she will look upon us as be
ing a country of great value to her, and, further, that she will accept
us as her banker, so to speak, in that her surplus funds made through
her war profits will have been accumulated in this country only to a
natural extent, and not to such tremendous sums that she will become
58830— 18530
15
concerned for their safety or in actual need of them. The exchange
rate being against ns and acting as a deterrent to our imports and a
stimulant to our exports will have helped to preserve a natural and
proper relationship of benefit to both countries, in so far as is possible
while the requirements of war exist. There is also excellent reason to
believe that after the war is over, Argentina may prefer in large part
<>ur commodities to our gold, and that she will desire to continue the
banking relationship which she has established.
In Chile a similar condition exists, with one or two minor differences.
Our present demand for nitrate, which Chile alone is able to supply in
large quantities, has seemingly made us more or less dependent upon
h er; and the exchange rate, being against us, might appear to be
entirely in her favor. Actually this has not proved to be true and
will clearly be less so as time goes on. If Chile is to hold our market
for her nitrate, it is to her interest that we be deterred from establish
ing plants to manufacture nitrate from the air to the same extent that
has been done in Germany. If she would do this, she must make some
arrangement that will enable us to continue to import her nitrate with
out prohibitive expense or overextension. That this situation is becoming
more clear to her people is shown in the fact that the price of nitrate
has fallen off in recent months. Again we find that our exports to Chile
increased in 1917, when we were at war, over 1916, when we were not
at war, the figures, respectively, being $57,483,996 and $33,392,887.
In Spain the exchange is also against us, even though in this case the
balance of trade has been in our favor. In 1907 we imported from
•Spain $36,881,630, whereas we exported to Spain goods to the value of
$92,469,329
This difference was offset through two principal opera
tions— first by the sale of sterling exchange in this country by Spainand, second, by the sale by this country to South American countries of
Spanish pesetas.
H E L P IN G G R E A T B R IT A IN .
A s Great Britain was not in position to furnish Spain with such
commodities as she required, Spain transferred her sterling balances
to the United States. The transfers were sufficiently large, together
with other items, to force the exchange against us, which has resulted
in greatly increasing the desire of Spain to import from the United
States, and we find that such imports increased from $45,697,462 in
1915 to $64,316,888 in 1916, and to $92,469,320 in 1917. At the same
time the operation was of great value to the allies, as it enabled Great
ISritain to obtain from Spain commodities required by her in France,
which could be delivered without submarine loss. When selling pesetas
to South America for the high prices obtained, we were helping pay
for much-needed goods from those countries, and as they could be deliv
ered to us without danger from submarines, it was to our greater
interest, while such sales were being made, to import from South
America and pay in pesetas than to import from Spain and pay in
pesetas.
D O LLARS P IL E
UP.
The Spanish exchange having been against us has resulted in the
piling up of dollars in this country to the credit of Spanish bankers,
which has again, as has already been shown, produced a great demand_
for our exports. When the war is over, as the Spanish currency is
nearly 100 per cent metal cover, there is good reason to believe that
she will prefer to use such funds as may have accumulated by that
time in this country for the purchase of our goods as she requires them,
and that she will largely continue such of her balances here as may
not be needed for this purchase.
We now come to a group of countries— the neutral countries adjacent
to Germany— in all of which exchange rules against this country, and
where in every case it is undoubtedly of great value to us. These
countries are Denmark, Netherlands, Norway, Sweden, and Switzerland.
Taken as a whole, our exports to those countries have been over three
times as great as our imports from them, and yet the exchange has
ruled constantly against us for a long period. Exchange has been
turned against us through the sale in the United States of sterling ex
change and through the remittance to the neutral countries concerned
of German money. The transfer of funds to these countries by Ger
many has been most detrimental to the allies, as it has enabled that
country to pay for much-needed imports that she might otherwise have
been unable to obtain in the desired quantities.
NEU TRAL
MONEY
HERE.
The purchase by this country of sterling exchange from all of the
countries in this group has resulted in the accumulation in the United
States of huge balances belonging to the banks of the neutral countries
mentioned. As in the case of the other countries which we have con
sidered, this caused a strong tendency to import from the United States,
58830— 18530
16
w o u ld n o t p r o v e o f v a lu e t o t n e e n e m y , s u c n e x p o r t s n a v e u eeu i c u u i c u ,
T o D e n m a r k , fro m
$ 5 6 ,3 2 9 ,4 9 0 in
1 9 1 6 t o $ 3 2 ,3 8 8 ,8 6 4 in 1 9 1 < ; to
N e th e r la n d s
fr o m
$ 1 1 3 ,7 3 0 ,1 6 2
in 1 9 1 6
to $ 9 0 ,5 2 0 ,3 0 1
in 1 9 1 7 ; t o
N orw av
fro m
$ 6 6 ,2 0 9 ,7 1 7
to
$ 6 2 ,8 6 6 ,8 5 0 ;
and
to
S w eden,
fr o m
$ 4 7 9 6 7 5 9 0 to $ 2 0 ,9 0 0 ,8 5 4 .
T o S w itz e r la n d th e r e h a s b e e n a n in c r e a s e ,
a s s h ip m e n t s h a v e b e e n m a d e to h e lp o b ta in im p o r t s f r o m t h a t c o u n tr y
to F ra n ce
T h e f i g u r e s w e r e $ 1 3 , 6 5 4 , 2 5 6 In 1 9 1 6 a n d $ 1 9 , 5 0 2 , 0 4 5 i n
1917
A s w e w e r e n o t a t w a r th e fir s t th re e m o n th s o f t h e y e a r , th e se
fig u r e s d o n o t t e ll t h e w h o le s t o r y .
A s a r e s u lt th e b a la n c e s m a in
t a i n e d in t h e U n i t e d S t a t e s b y t h e s e c o u n t r i e s a r e v e r y l a r g e .
In c o n n e c tio n w ith t r a n s f e r s fo r G e r m a n a c c o u n t , t h e a c c u m u la tio n
o f s u c h b a la n c e s a n d t h e d if f ic u lt y i n v o lv e d in w i t h d r a w i n g t h e m a t
th e m o m e n t is o f g r e a t v a lu e to th e a llie s .
T h e e x c h a n g e s b e in g h ig h ,
it m e a n s th a t ev ery su c c e s s fu l tr a n s fe r m a d e fo r G e rm a n a c c o u n t re
s u lt s in t h a t c o u n t r y r e c e iv in g a m u c h s m a l le r s u m to b e u s e d in p a y
m e n t f o r i m p o r t s in t h e c o u n t r y o f d e s t i n a t i o n .
I t a ls o h a s g r e a t ly
in c r e a s e d t h e d iffic u lty o f m a k in g s u c h t r a n s f e r s a t a n y r a t e , f o r , a s
b a la n c e s
c o n tin u e
to
grow
h ere, even
lo a n in g a g a in s t
th e m
in
th e
n e u tr a l c o u n tr ie s c o n c ern ed b e c o m e s m o re d iffic u lt
E v e n so, th e n eed
o f G e r m a n y f o r f u n d s in t h e s e c o u n t r i e s i s s o g r e a t t h a t w e c a n n o t
e x e r c i s e t o o m u c h v i g i l a n c e in p r e v e n t i n g t h e i r t r a n s f e r .
Practically all of these countries are understood to have so stripped
themselves of much-needed commodities in order to obtain the high
prices being paid by Germany that after the war they will be obliged
to replace them through import.
__
T h e i r s i t u a t i o n a s t o g o l d i s a l s o a n e a s y o n e , s o t h a t w e s h o u l d be
a b le t o p a y b a c k th e s e b a la n c e s a f t e r th e w a r w it h o u t fr ic t io n i f w e
a r e p r e p a r e d to s u p p ly th e g o o d s t h a t th e s e c o u n tr ie s w ill r e q u ir e .
M A IN T A IN
S T E E L IN G .
All of these countries hare increased the balance of exchange dgainst
us by selling drafts on London in the New York market. It i t n a d n o
b e e n fo r s u c h s a le s th e U n ite d S t a t e s m ig h t h a v e b e e n ju s t if ie d in c o n t in u
i n g t h e s h ip m e n t o f g o ld , b e c a u s e o f t h e t r e m e n d o u s s u p p ly h e ld b y u s .
W h e n , h o w e v e r , w e w e r e t a k in g o v e r s te r lin g c r e d its w h ic h th e s e n a
t i o n s s o l d t o u s , because we were helping maintain the sterling exchange
rate,
t h e a c c o m m o d a t i o n w a s o n o u r s i d e a n d w e w e.f.e fiw Y ^ t ^ n n r
h o ld i n g o u r g o ld u n t i l a f t e r t h e w a r , u n le s s w e s h o u ld A n d i t t o o u r
a d v a n t a g e to r e le a s e it s o o n e r .
T h i s is p a r t ic u l a r ly t r u e in th e c a s e o f
th e n e u tr a l c o u n tr ie s a d ja c e n t to G e r m a n y , w h e r e w e h a v e fu r n is h e d
t h e m m i l l i o n s o f d o l l a r s m o r e in g o o d s t h a n t h e y h a v e g i v e n t o u s . a n d
w h e r e w e h a v e t a k e n s t e r l i n g o ff t h e ir h a n d s w h e n e v e r t h e y c o n s id e r e d
it to t h e ir in te r e s t to s e ll it in o u r m a r k e t .
O u r g o ld e m b a r g o , t h e r e
f o r e i s n o t in t h e n a t u r e o f a r e f u s a l t o p a y .
I t is m e r e ly a s t a t e m e n t
to th e w o r ld to t h is e f f e c t : T h a t w e d o n o t a t th e m o m e n t P ™ P o s e to
w a s t e o u r g o ld b y e x c h a n g i n g it fo r i m p o r t s w h ic h w e c a n g e t a lo n g
w ith o u t
a n d t h a t n e ith e r d o w e p r o p o s e to p a y g o ld f o r s t e r lin g e x
c h a n g e w h ic h w e a r e p u r c h a s in g w it h d o lla r e x c h a n g e a t a h ig h e r .fa t e
t h a n "i t s n o r m a l v a lu e b a s e d o n th e p r e s e n t c a s h p o s itio n o f th e B r itis h
G o v e r n m e n t w i t h t h e r e s t o f t h e w o r ld , b u t in t h u s c o n s e r v i n g o u r g o ld
u n til a f t e r th e w a r w e a r e h o ld in g it a s a r e s e r v e a g a in s t th e d e p o s its
w h i c h a r e a c c u m u l a t i n g in t h e U n i t e d S t a t e s t o t h e c r e d i t o f t h e o t h e r
c o u n tr ie s
of
th e
w o r ld .
EXACT
BALANCES
„ „ „ „
KNOW N.
In th e m e a n tim e w e w ill a llo w su ch b a la n c e s to b e u se d a s fr e e ly a s
m a v b e d e s i r e d f o r t h e p u r c h a s e o f s u c h g o o d s in t h i s c o u n t r y a s t h e
e x i g e n c i e s o f t h e w a r j u s t i f y u s in a l l o w i n g t o b e . e x p o r t e d , o r t h r o u g h
i n v e s t m e n t i n s e c u r i t i e s o r p r o p e r t y o f a n y o t h e r k i n d in t h i s c o u n t r y .
I ii t h i s c o n n e c t i o n i t w i l l i n t e r e s t y o u t o k n o w t h a t t h e F e d e r a l R e
s e r v e B o a r d , t h r o u g h i t s D i v i s i o n o f F o r e i g n E x c h a n g e , is in p o s s e s s i o n
o f t h e e x a c t c a s h b a l a n c e a s it e x i s t s a t t h e c l o s e o f b u s i n e s s e a c h \S e d n e s d a v n ig h t b e tw e e n th e U n ite d S ta t e s a n d e v e r y c o u n tr y o f th e w o r ld .
I t is a ls o in p o s s e s s i o n o f e x a c t k n o w le d g e a s to w h a t c a u s e s t h e c h a n g e s
in s u c h b a la n c e s f r o m w e e k t o w e e k .
A s th e s e fig u re s d e v e lo p , th e p o s i
t io n o f o u r c o u n t r y t o t h e w o r ld w ill b e a s c le a r ly b e fo r e th e F e d e r a l
R e s e r v e B o a r d a s is t h a t o f a b a n k e r to h is d e p o s ito r s
T h is w ill m a k e
i t P o s s i b l e fo r u s t o a p p ly a b a n k e r ’ s k n o w le d g e to th e q u e s tio n o f th e
p r o v a b le d e m a n d s t h a t w ill b e m a d e u p o n u s fr o m tim e to t im e a n d so
e n a b le u s to d e t e r m in e h o w t h e y m a y b e s t b e m e t.
T h e r e w ill be np n eed
f o r le a D in s r i n t h e d a r k , b u t e v e r y p r o b l e m a s a r i s e s c a n b e c o n s i d e r e d
fr o m th e fc ie n t ific b a s is o f c o m p le te u n d e r s t a n d in g o f th e s itu a tio n a s
a w h o le a s it d e v e l o p , a n d i f w e p r o v e o u r s e lv e s w is e c u s t o d ia n s o f th e
w o r ld ’ s m o n e y w e c a n h o p e t o r e m a in a s th e w o r ld s b a n k e r s fo r m a n y
a y e a r to
com e.
5 8 8 3 0 ___ 1 8 5 3 0
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E : 1918
A L eague
of
N a t io n s
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN THE
SENATE OF THE UNITED STATES
FEBRUARY 26, 1919
WASHINGTON
1919
110704— 19405
SPEECH
HON.
ROBERT
L.
OWE N.
A LEAGUE OE NATIONS.
Mr. OWEN. Mr. President, the people of Europe find the peo
ple of the world are heartsick. Crepe hangs on their doois. Men
without arms, men without legs, men without eyes, men who are
maimed in every conceivable way can be seen everywhere
throughout the world as a result of this last great exhibition or
human folly and ambition—the world war precipitated by tho
Hohenzollerns.
The world is anxious to establish world peace, world com
merce, world happiness. And every statesman, it seems to me,
Mr. President, should feel himself charged with the responsi
bility of trying constructively to attain this end.
_
Delegates representing the United States, Great Britain,
France, Italy, Japan, Belgium, Brazil, China, Czechoslovakia,
Greece, Poland, Portugal, Roumania, and Serbia have submitted
for the consideration of the world and of the statesmen of the
world a report formulating a plan for a league of nations.
No thoughtful man, certainly no thoughtful statesman, ac
quainted with the fallibility of man would expect that this first
formulation of a draft would lie absolutely perfect. It is not
perfect, but it is a beginning and contains many things of very
great value. And it can be perfected so as to completely safe
guard the world against war and at the same time completely
safeguard the sovereignty and absolute independence of each
one of the member nations.
......
Statesmen anxious to serve the world should deal with this
formulated plan in a spirit of helpfulness, of construction rathei
than in a spirit of tearing down or ol destruction: much less
should they show an intemperate or an ungenerous attitude
in criticizing a document, the importance of which to the pres
ervation of the future liberty and happiness of mankind is so
Mr President, modern science, with the mastery of the air,
with the submarine, with poisonous gases, with the steel war
tank, with the machine gun, with rapid transportation facili
ties, with tremendous output of war machinery and the muni
tions of war make it unthinkable that the world will perm.t
;
itself to be destroyed by a repetition of the
if it is to be repeated, will be far more terrible than the last
war, and which will break down civilization itself The men
and the women and the children of the world who labor to
produce the values of the world are entitled to peace and to
happiness, and woe be to those blind statesmen who fad now to
safeguard the people of the world in then ng.its to ife, ,o
liberty, and to the pursuit of happiness,
110704— 19405
3
4
We have already seen the effect in Russia, in Germany, and
in Austria of the complete failure of government to protect
life, and we have seen the great mass of men moving like a
terrible ocean sweeping the Romanoffs to their graves and
tearing down the standards of government which have failed
the reasonable expectation of the people. It was the blindness
and the dullness, it was the stupidity, it was the greed, it was
the arrogance of the officials of France that lead to the French
Revolution. These same forces led to the revolution in Russia
and then to the extreme form of political madness—the Bolsheviki movement of a class war—the war against those who have
property or education by those who suffer from famine.
The representatives of the belligerent nations are now as
sembled at Paris conferring with the representatives of nations
newly born and to be born, with a view to using the great in
fluence of the belligerent powers in the establishment of selfgoverning nations, with territories properly delimited' and
with a view to giving protection to the backward nations oc
cupying colonies and dependencies, such as the ignorant blacks
of the German African colonies.
THE TASK
IS
THERE.
Mr. President, the immediate peace of the world, the cessation
and prevention of actual war between the Balkan States, be
tween Bulgaria and Roumania, between Roumania and the
Ukraine, between Poland and Prussia, between the various
States that are being born and the surrounding States impera
tively demand that the conference o f the great powers at Paris
lay down the terms fixing territorial boundaries and establish
the means by which to keep ambitious States from assailing each
other and disturbing the peace of the world. They must con
sider the question o f arbitration of international disputes. It
was only the power of Germany and her allies which prevented
the nations of the world from agreeing at The Hague to inter
national arbitration and international disarmament in 1899 and
1907.
The Paris conference must consider the question of disarma
ment as a means of protecting the future peace and to prevent
Europe again being thrown into an universal war. All the
nations of the world are ready to agree to arbitration of in
ternational disputes and to disarmament. As far as the United
States is concerned the House of Representatives has just
voted in favor of reducing our Army to the minimum of do
mestic protection. We have made treaties with nations all over
the world to arbitrate our differences. The people of the
United States are in favor of international disarmament. They
are in favor of arbitrating differences with other nations, and I
say flatly and emphatically that it is better to leave any dispute
that might arise between the officials of the United States and
the officials of Brazil or Tersia or South Africa or Great Britain
unsettled, as some of the Revolutionary claims are still unset
tled, than to fly to arms and kill millions of men to gratify
offic-ial impatience, arrogance, or anger.
Mr. President, I have read carefully the so-called “ Formula
tion of a plan for the league of nations.” It interposes a num
ber of obstacles to those who might desire to make war.
First. Article 10 pledges all of the member nations “ to respect
the territorial integrity and existing political independence” of
1107G 4— 19405
5
all States members of the league. This is a guaranty of all the
nations of the world of the utmost importance. Moreover, article
10 pledges all the nations of the world “ to preserve against ex
ternal aggression the territorial integrity and existing political
independence” of all the States members of the league, whether
great or small. This is an undertaking of gigantic magnitude
and is a positive bond safeguarding the territorial integrity and
existing independence of all States. And no war can happen in
the future if this pledge is respected either in the first or second
of its provisions. If all nations respect the territorial integrity
and political independence of other nations, we will have peace,
and if any nation have the temerity not to respect this bond
and be guilty of external aggression, it will face all the world
pledged to oppose it in its aggression. Aggressive war under
such a menace is well-nigh inconceivable. Is not this a mag
nificent barrier against a future ambitious or warlike State?
Article 11 declares that any war or threat of war is a mat
ter of concern to the league, and the high contracting parties
reserve the right to take any action that may be deemed wise
and effectual “ to safeguard the peace of the nations.” In
other words, it is the declared intention of all of the nations of
the world to take steps to prevent war, and to take these steps
in time.
Article 12 pledges every nation that it “ will in no case resort
to war without previously submitting the question and matters
involved either to arbitration or to inquiry by the executive coun
cil, and until three months after the award by the arbitrators
or a recommendation by the executive council, and that they
will not even then resort to war as against a member of the
league which complies with the award of the arbitrators or the
recommendation of the executive council.”
Is not this pledge under article 12, made by all nations to
every nation in the world, of great value as a deterrent and
obstacle to war?
What official will dare to face the whole world with a breach
of article 12?
Article 13 agrees to submit questions to arbitration and carry
out in good faith the award.
Is not this agreement with all the nations of the world a most
important means of preventing unsettled disputes leading to
" i f this had been the rule of international procedure it would
have prevented the last war.
Article 14 provides a permanent court of international jus
tice, which may sit as an arbitration tribunal under article 13.
Under article 15 the members agree to refer to the executive
council any dispute likely to lead to rupture which is not sub
mitted to arbitration, and if the council fails to agree, then to
publish the arguments for and against by the majority and
minority members, and here is also provided an appeal to the
larger “ body of delegates.”
In this way the most troublesome cases would be submitted
first to the council and, secondly, to the representatives of all
the nations of the world for consideration, so that world opinion
can be brought to bear upon the merits of the controversy and
time ensue in which world opinion may be formulated and dur110704— 19405
ing which the litigants may feel the pressure of world opinion
before they venture to go to war.
Mr. WILLIAMS. And world prejudice be obviated.
Mr. OWEN. And world prejudice be obviated, as the Senator
from Mississippi very properly observes.
Mr. President, the only objection which I have to articles
12, 13, 14, and 15 is that they permit war as a remedy after
having provided these means for conciliation and arbitration.
In my own opinion, the making of war for the settling of
a civil dispute is a heinous crime, and it should be branded by the
league of nations and by the opinion of mankind as the highest
of all international crimes. Nothing could be more wicked or
more dastardly than the organized killing of human beings be
cause of an odious dispute relative to property or relative to some
alleged insult. As long as man remains with passion or with
defective reason, so long may the world expect that some man
will insult another man. And the bigger the fool and the more
arrogant the ass, the more likely he is to offer an insult. But
those who have brains and self-control should know how to deal
with those who lack brains and self-control.
Article 16, Mr. President, provides a world penalty for any
member nation that wages war without previously submitting
the matter of dispute to arbitration and inquiry and determina
tion. This penalty is that when such an arrogant, warlike
nation wages aggressive war in violation of the law laid down
by the league, such nation—
“ shall thereby, ipso facto, be deemed to have committed an act
of war against all of the other members of the league which
hereby undertake immediately to subject it to the severance of
all trade or financial relations, the prohibition of all intercoursq
between their nationals and the nationals of the covenant
breaking State, and the prevention of all financial, commercial,
or personal intercourse between the nationals of the covenant
breaking State and the nationals of any other State, whether
a member of the league or not.”
What official on the face of the earth would dare face this
penalty. The penalty should be directed, however, in my judg
ment, against any nation that invades the territorial integrity of
another nation. Official murder by aggressive war of offense
should be stopped by the mandate of the people of the world,
and officials who violate that mandate should be held personally
responsible.
•
Is it not clear, Mr. President, that the captains of industry
and the great financiers of the country whose support is vital
to successful war and whose support in Germany was expressly
solicited by William II as a primary condition to enable him
to wage the late war, would never under such a threat as this
dare to support an aggressive war which would of necessity
mean the instant paralysis of all their enterprises and their
ultimate financial and industrial destruction? And is it possible
that anv official charged with the authority of declaring war
would feel justified in declaring an aggressive war against all
the world? The human imagination can not picture such a prop
osition. Moreover, we must now remember that every military
dynasty is gone. Where are the Hapsburgs? Where are the
Hohenzollerns? Where are the petty kings of the German
States? Where is King Constantine of Greece? Where is the
1 1 0 7 6 4 — 1940D
Romanoff family and the Czar of all the Russia*? Where is the
Sultan of Turkey? Where the King of Bulgaria? Where is the
King of Roumania? Abdicated all, and fled to cover! What
real war-making power has any king on the globe? Not one is
left
Mr. WILLIAMS. Mr. President, will the Senator permit me
to interrupt him?
The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Mississippi?
M r , OWEN.
I yield to the Senator from Mississippi.
Mr WILLIAMS. I want, in reenforcement of what the Sena
tor has said in the first clause of his last argument, to suggest
to his mind this consideration: Why can not we in the treaty of
peace take a leaf out of American history? The Senator remem
bers that the thirteenth amendment to the Constitution declares
that no debt made by the Confederacy or by any State forming
a member of the Confederacy should be valid or ever paid.
That was passed with the idea of discouraging future projects
of that sort. Suppose that in the treaty of peace we provided
that all debts made by Germany, Austria, Turkey, and Bulgaria
for the furtherance of their objects in this war were declared to
be nullified and invalid, and that those respective Governments
should issue an amount of bonds equal to the amount thereby
nullified and rendered invalid, and that the proceeds of those
bonds.should be devoted to the restoration of Belgium, of north
ern France, and of Serbia, what would be the effect, I want to
ask the Senator?
Mr. OWEN. I think it is a good suggestion as it would
help to deter nations from making aggressive war for pri
vate objects. It would prove unprofitable under such circum
stances.
Mr. WILLIAMS. Moreover, would it not have an effect upon
the people who finance wars?
Mr. OWEN. Assuredly,
Mr. WILLIAMS. Hereafter would not bankers who have
financed wars say to the country wanting to finance an unjust
or aggressive war. “ Stop a minute; I must think as to whether
or not this war is just, whether it is aggressive or defensive.
If it is not just, the example of the American Republic in the
thirteenth amendment and the example of the world in this
treatv of peace leads me to suppose that I may lose my money.”
And if bankers are threatened with losing their money, does the
Senator think they would finance any unjust war in the world?
Air. OWEN. It is perfectly practicable to write into this
formulated plan the suggestion made by the Senator from Mis
sissippi and it ought to be done, I think, for it would operate
as one of the additional deterrents to war; and what we want
to do is to deter war making.
.
Air. WILLIAMS. I am not talking about writing it into
these 2G articles of the league of nations, but I am talking
about writing it into the final articles of peace.
Air OWEN I am agreeable to its being written into both,
to apply to Germany now and to apply to any other nation in
the future that dares to make aggressive war on mankind. I
thank the Senator for his suggestion. I think Senators ought
to consider this matter from a constructive standpoint and help
to perfect this formulated plan.
110701— 19405
8
Mr. WILLIAMS. I do not propose to put it in this plan, for
I think if you go to amending this plan you will have 14 other
people to amend it, and you will never get it through; but I am
talking about it as a part of the treaty o f peace.
Mr. OWEN. Mr. President, the greatest of all democracies, the
United States, threw its financial power, its man power, on the
side of democracy against autocracy, on the side of right against
might, on the side of decency and justice and humanity against
those who assaulted the great principles of human life. And
autocracy lies in its political grave, never to be resurrected on
this earth. Great Britain is a republic, and so are the great
dominions speaking the English tongue— Canada, whose border,
lying between the United States for 3,000 miles, is undefended
except by those who love liberty and justice on both sides_ of
this line; Australia, New Zealand, the South African Union
are all republics, and all the colonies and dependencies of
Great Britain are in effect republics in greater or less stages of
advancement. France and her colonies are republics. Switzer
land is a republic. Italy is a republic with a nominal King,
who has no power against his parliament or against his people
under their structure of government. And so Portugal is a
republic, and Spain and Belgium and Holland and Denmark
and Norway and Sweden are in substance republics.
Mr. WILLIAMS. They are democracies.
Mr. OWEN. They are democracies. They have the form of
kingdoms, but the substance of democracies.
The nations being born in the Balkans and in Russia are being
born as republics. And the subject people of Turkey, under the
protection of the great democracies of the world, are being
brought into being as embryo republics. China is a great repub
lic. Siberia can not be conceived as being anything less than a
republic. The Poles, the Jugo-Slavs, and Czeclio-Slovakia are
avowedly republics. Even Japan under an Emperor is ruled
by a body of elders cooperating with the parliament chosen to
represent every class of the people, and Japan, when this waxbroke out, threw herself at once without hesitation on the side
of- the great democracies of the world. What greater testimony
could Japan have given of her attachment to the doctrines of
liberty, justice, and civilization and of her hostility to dy
nastic autocracy? Where is there on earth remaining a military dynastic autocracy that would threaten the future peace of
the world?
All the Governments of North and South America, all the Gov
ernments of Africa, of Asia, of Europe, of the East Indies, and
of the West Indies are republics or under the patronage of
republics.
The doctrine that might makes right is dead.
The doctrine of terrorism is dead.
The divine right to rule has gone to hell, whence it came.
The doctrine of liberty, justice, and humanity is triumphant
and is writing its Magna Charts to last for all future time.
Let the United States Senate honor itself by lending its very
best efforts to perfecting this charter.
Mr. President, what was it that protected the liberties of
mankind, that protected civilization, that protected the democra
cies of the world against the military domination of the Teu
tonic dynastic autocracies? It was a league of nations in arms
110704— 19105
0
cooperating as one great league of democracy against autocracy.
It was a league of nations in arms willing to pay the penaltyin gigantic sacrifice of property and of human life ; willing to
die upon the battle field in joint, concerted, cooperative action
to protect liberty and civilization. Gen. Foch, as commander
in chief of the armed forces of this great league of nations,
directed on the battle line from his headquarters Belgians, Eng
lish, Scotch, Irish, French, Italians, Greeks, ami Americans, and
many others, all of them operating in a league to maintain
liberty and to protect human life and organized society through
out the world. Shall this lesson bear no fruit? Shall our
sons have died in vain who are buried upon the bloody battle
fields of Europe?
The world wants peace, justice, and liberty, and has shown
itself willing to die for this cause. Do not underestimate the
demand, Mr. President. Do not deny or ignore this profound
aspiration of the human heart. x\t Paris are assembled repre
sentatives— military, economic, political—of all the great democ
racies of the world, facing the task of making the world safe
against the chaos and disorder of war. The geographical lines of
the newborn States must be delimited and agreed upon and
authorized. The relations of these nations with each other must
be so protected that they do not instantly fly at each others’
throats on some mad issue of geographical boundary or fancied
interest. There must be established by some power somewhere
the relations which shall exist between these nations, between
them and the balance of the world. The colonies which the Teu
tonic dynasty has shown itself unworthy to control must be pro
tected and safeguarded by some definite agreement under some
safeguard of administration that will establish and maintain
peace and order and good conduct, internal and external. This
task of readjustment is now being performed at the peace table
at Paris, of necessity, by the very nature of the ease. Shall all
the delegates be withdrawn from the peace conference and the
world left in turmoil with the Bolsheviki in control soon to bring
on another world war and drag the people of the United States
from their peaceful avocations to the havoc and destruction of
w ar’ No Mr. President; there is a better way. The way of
order out of chaos. And the proposed league of nations is wise
and sound and just in its fundamental principles. It represents
the aspirations of the peoples of the v orld to safeguaid the
peace of mankind.
,
.
. .
, .
I have pointed out some of the more important provisions, but
there are others which must not be overlooked.
Article 17 takes care of the disputes which might arise
between members of the league and those who are not members
of the league and imposes suitable penalties if a State not a
member of the league disregards the provisions of article 1-,
forbidding it to make war as a remedy because of a dispute with
other nations.
, . ,
, ,
... ,,
Article IS authorizes the league to be intrusted with the
joint supervision of the trade in arms and ammunition v ith the
v
countries in which the control of this traffic is necessary and
in the common interest.
'
,
, _
Article 8 provides for steps to be taken to control the manu
facture of munitions by private enterprise, so that private inter110704— 19405-------2
10
ests may not be made provocative of war. and this article recog
nizes the great principle that the maintenance of peace—
“ will require the reduction of national armaments to the lowest
point consistent with national safety and enforcement by com
mon action o f international obligations, having special regard
to the geographical situation and circumstances of each State.”
Is not article 8 of tremendous importance in removing one
of the great dangers to war? Do we not all know that the Teu
tonic dynasty for over 20. years was manufacturing on a gigantic
scale the munitions of war and organizing armaments far
beyond domestic need with the intent and purpose to assail the
liberties of Europe and to dominate the world by military force?
And shall we not remove this danger from our future by inter
national agreement? All the nations of the world except the
Teutonic allies at The Hague in 1907 were ready to agree to
disarmament, but were prevented by the King of Prussia and
his allies. Now is the most opportune time to write these safe
guards by treaty into the international law by the consent and
approval of all nations.
Article 19 provides a reasonable and just method for ad
ministering the affairs o f subject peoples and developing them
into democracies under charters granted from the league to
advanced nations qualified by their resources, their experience,
their geographical position to undertake this responsibility as
mandatories on behalf of the league. And the consent, even
in these cases, of the backward peoples is recognized, the pro
posed formulated plan expressly providing that “ the wishes
of these communities must he a special consideration in the
selection of the mandatory power," and “ the mandatory must
be responsible for the administration o f the territory, subject
to conditions which will guarantee freedom of conscience or
religion, subject only to the maintenance of public order and
morals, the prohibition o f abuses, such as the slave trade, the
anus traffic, and the liquor traffic, and the prevention o f the
establishment of fortifications or military and naval bases, ami
of military training of the natives for other than police purposes
and the defense o f territory, and will also secure equal oppor
tunities for the trade and commerce of other members of the
league.”
And this provision could be further amended to provide that
the bill of rights of civilized States, as far as applicable, should
be recognized as a part of the principle of the government o f
these backward peoples.
I suggest the following amendment to article 19— and I feel
entirely at liberty to suggest this amendment; and amend
ments which are offered or suggested on this floor, I have no
doubt, will receive respectful consideration from those who
are assembled at Paris, and if they have value I have no doubt
that action by our i>eaee commissioners will l>e taken accord
ingly: “ The mandatory must, as far as practicable, recognize
the principles of the bills o f rights of civilized States In ad
ministering the law in such territories, and the charter to the
mandatory shall prescribe these principles.”
Article 20 provides, as a part of the organization of the
league, a permanent bureau of labor, with a view of securing
and maintaining fair and humane conditions of labor for men,
110764— 19405
»
11
women, and children by the good offices o f the league. Shall
we have no means of objecting when the blacks of the Kongo
have their hands cut off because they failed to bring in suffi
cient ivory, as we have seen in the bloody (lays of the past ?
They, too, must have justice and liberty, and should be educated
and civilized as rapidly as circumstances will permit.
Mr. President, the happiness of mankind absolutely depends
on those who labor; they comprise the world, they are the
world. Does this mean that the league of nations will interfere
with the internal sovereignty of member nations? JSot at all.
Article 10 and article "26 and other articles protect this vital
requirement, and other safeguards can be added. In this mat
ter the league would function with no more authority than that
o f a bureau of publieitj— I speak of the particular organization
of a “ bureau of labor ”—which could appeal to the opinion of
mankind for the protection and conservation of human life
where it is not adequately safeguarded
Article 21 provides that the high contracting parties agree
that provision shall be made through the instrumentality of the
league to secure and maintain freedom of transit and equitable
treatment for the commerce of all members.
Is not this decent and just and right? .Shall interior nations
having no access to the sea he bottled up without the right to
ship their goods under bond in transit to the sea? It was this
denial o f an outlet that has been one of the contributing causes
for war in the Balkans.
Why shall not suitable provisions be drawn up by amendments
■ the plan to secure and maintain these rights?
to
Mr. KELLOGG. Mr. President, will it interrupt the Senator
if I ask him a question?
Mr. OWEN. Not at all.
The PRESIDING- OEE ICE It. Does tl*e Senator from Okla
homa yield to the Senator from Minnesota?
Mr. OWEN. 1 yield.
Mr. KELLOGG. I understood the Senator to say that the
proposed constitution o f the league did not interfere with the
internal affairs o f the various governments, i should like the
Senator's opinion as to whether articles 1.2. lo, and 16 togothei
provide for the arbitration of all questions without distinction,
and whether or not disputes as to political questions, such as
trade relations with other countries, import duties, and so forth,
would come under the provisions of the proposed constitution?
Mr OWEN. In my judgment, it only relates to those things
which are external, because internal affairs are safeguarded by
article 10 which guarantees to r e s p e c t and to preserve the
territorial integrity and the 'existing political independence of
every nation.
, . .
Mr. KELLOGG. Does that include all laws peruumu? to our
dealings with other countries, such as immigration laws . tariff
laws, and trade relations?
.
, . .~
....
Mr OWEN The question of immigration and taim * affects
the i n t e r n a l affairs of our own country and concerns our exist
ing political independence, and certain trade relations might
Mr KELLOGG. Would the proposed constitution prevent us
from changing -our .existing political -conditions?
110764— 19405
Hr. OWEN. Not at all. I shall deal with that a little later
on. I have not quite come to that, but I am going expressly to
discuss that and show what my opinion is with regard to it.
Mr. McCUMBER. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from North Dakota?
Mr. OWEN. I yield.
Mr. McCUMBER. I call the Senator’s attention to the fact
that article 12 does not require the nations to submit every
controversy to arbitration-----Mr. OWEN. That is perfectly obvious.
Mr. McCUMBER. But when difficulties arise it simply pro
vides that “ they will in no case resort to war without previously
submitting the question and matters involved either to arbitra
tion or to inquiry ” by the league.
Mr. OWEN. I think that is quite clear.
Mr. KELLOGG. If the Senator from Oklahoma will pardon
me, the inquiry is enforced in exactly the same way as the judg
ment of the arbitration tribunal.
Mr. McCUMBER. I do not agree with the Senator.
Mr. OWEN. Article 22 agrees to place under the control of the
league all international bureaus already established by general
treaties, if the parties to such treaties consent. What objection
could there be to this by consent? Is it not better to have a clear
ing house between the nations to which all international business
may be directed, and where through a common center interna
tional relationships may be conveniently adjusted? Having a
common center for international business is just as convenient
and necessary as having a clearing house for the bankers of
New York City, where around a common board they can in
stantly dispatch their business with each other. Suppose each
nation of 50 nations must transact all business by an inde
pendent means, then each nation would have to send 50 rep
resentatives to 50 nations, making 2,500 representatives alto
gether, at great expense, great confusion, great delay. But,
meeting around a common council table, one representative of
each nation would meet one representative from every other
nation at a common board, and 50 men would transact the busi
ness of 2,500 men.
This is merely common sense and a practice based upon mod
ern science and usage in the business world.
Article 23 provides for publicity of international agreements
with the penalty that they shall be void unless registered with
the league.
This prevents secret treaties. It makes them void and an
act of treachery to all other nations. It is a powerful deterrent.
Article 24 merely provides for the reconsideration of obso
lete treaties which might contain some element of danger to
the peace of the world. This article is entirely justified, and
no man would deny it.
Article 25 provides that the high contracting parties agree
that the present proposed covenant is accepted as abrogating
all obligations as between themselves inconsistent with the great
principles laid down in the proposed agreement to safeguard the
peace of the world, and contains an engagement that the mem
ber nations will not hereafter enter into any engagements incon
sistent with the terms thereof.
1107G4— 19405
Is not this a wise provision of importance in safeguarding
the future peace of mankind? And there is imposed the fur
ther duty that new powers admitted to the league shall come
under the same rules. Is hot this common sense, and in the
interest of the world?
Article 26 provides that amendments to the covenant of the
league shall only take effect when ratified by the States whose
representatives compose the executive council and by threefourths of the States whose representatives compose the body of
delegates
Mr. President, do you not here observe that this gives a
veto upon any amendment to this instrument not acceptable to
the United States, and gives a like veto to Great Britain mid
to France and to Italy and to Japan, and is it not obvious that
no amendment would therefore be possible to this proposed
agreement between the nations except with the approval and
consent of the United States?
Is this not a great safeguard against the possibility of any
thing being written in the relations between the member na
tions of the league that might at any time be embarrassing to
any of the great powers or to the world?
But, Mr. President, a great objection has been made by vari
ous honorable and able Senators to the formulated plan on the
ground that it was proposed to govern the world by the over
lordship of a body of delegates representing the high con
tracting parties and by an executive council and by a perma
nent international secretariat.
It has been urged with great eloquence and zeal that articlQ
1 would invade the sovereignty of the United States.
I confess very frankly that article 1 should be left in no
obscurity, but it is easy to amend article 1. The interpreta
tion which has been put upon article 1 by its critics could cer
tainly not have been the intention of the representatives of
Great Britain and France and Italy and Japan or others of
the 14 nations who approve this draft. They certainly had no
intention of sacrificing the sovereignty of Great Britain or
France or Italy or Japan or Belgium or China or of other mem
bers. On the contrary, they have taken great pains in the
body of the formulated plan to safeguard the territorial integ
rity and political independence of all State members of the
league as they now exist in article 10, where the members
mutually undertake to respect and preserve against external
aggression, the territorial integrity, and existing political inde
pendence of each other. This is not consistent with the inter
pretations of article 1, that would permit the body of delegates
to invade by statutes any domestic concern of any nation.
The proposal of Lieiit. Gen. Smuts, who represents perhaps
the best English thought, was as follow s:
“ Tenth. The constitution of the league will be that of a per
manent conference between the governments of the constituent
States for the purpose of joint international action in certain
defined respects, and will not derogate from the independence of
those States. It will consist of a general conference, a council,
and courts of arbitration and conciliation.
“ Eleventh. The general conference, in which all constituent
States will have equal voting power, will meet periodically to
110764— 19405
discuss matters submitted to it by the council. These matters
will be general measures of international law or arrangements
or general proposals for limitation of armaments or for securing
world peace, or any other general resolutions, the discussion of
which by the conference is desired by the council before they
are forwarded for the approval of the constituent governments.
Any resolutions passed by the conference will have the effect
of recommendations to the national governments and parlia
ments.”
That was Gen. Smuts’s idea. That idea is prevalent all over
Great Britain. That is the general conception of the authority
to be granted to these delegates who would meet around a coun
cil table, representing the nations of the world.
It will here be observed that Gen. Smuts only proposed that
the resolutions passed by the conference would have the effect
of recommendations to the national governments and parlia
ments— nothing more. It is perfectly easy to amend article 1
by inserting the following w ords:
“ T h e b o d y oe d e l e g a t e s a n d t h e e x e c u t i v e c o u n c i l s h a l l
HAVE NO AUTHORITY TO MAKE LAW S, RUT M AY PROPOSE INTER
NATIONAL RESOLUTIONS TO BE SUBMITTED TO THE MEMBER NATIONS
FOR CONSIDERATION. AN D W HEN SUCH RESOLUTIONS HAVE BEEN
RATIFIED BY ALL THE STATES WHOSE REPRESENTATIVES COMPOSE
THE EXECUTIVE COUNCIL AND BY THREE-FOURTHS OF THE STATES
WHOSE REPRESENTATIVES COMPOSE THE BODY OF DELEGATES SHALL
HAVE THE EFFECT OF INTERNATIONAL L A W .”
This is the method proposed in article 20 for amendments to
the formulated plan. Any amendment must, under article 20,
have the approval of the United States before it can be amended.
Mr. President, the peace of the world is too important, the
future happiness and security of our people is too important,
that we should fail at this wonderfully auspicious time to adopt
a plan which will safeguard the future of the world.
I am quite willing to agree, and determined as well, that no
obscurity whatever should be permitted in the proposed plan,
because it is one of the frailties of human nature to have powers
construed into a constitution by those who are charged with the
duty of its administration, and therefore it is of special impor
tance to put in negative proposals, such as our forefathers
inserted in the Constitution of the United States.
We should insert in the proposed formulated plan that “ n o t h
CONTAINED IN THE INSTRUMENT ITSELF SHOULD BE CONSTRUED
AS GRANTING A N Y RIGHTS TO THE LEAGUE OVER THE INTERNAL AF
FAIRS OF MEMBER NATIONS, BUT THAT EVERY MEMBER NATION
SHOULD BE RECOGNIZED AS HAVING COMPLETE RIGHT OVER ITS EM I
GRATION AND IMMIGRATION, ITS IMPORTS AND EXPORTS, AND ALL ITS
DOMESTIC AFFAIRS WITHOUT ANY INTERFERENCE WHATEVER BY' THE
LEAGUE.”
in g
Mr. KELLOGG. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Minnesota?
Mr. OWEN. I yield.
Mr. KELLOGG. That is exactly what I had in mind. As
Senators seem to disagree as to the meaning of sections 12,
15, and 16, it does seem to me that it should be made plain,
so that no political question can be raised.
1107G4— 19405
Mr. OWEN. I agree with the Senator that an instrument
of such importance as this should be made absolutely plain;
and, frankly, I should not feel justified in supporting an instru
ment of this magnitude and this importance unless it were
made plain, and I think the Senate of the United States are
in a position to make it plain. They have the capacity; they
ought to have the will. As far as I am concerned, I shall stand
firmly for seeing that this instrument shall be free from any
ambiguity whatever.
It is not necessary for the league to interfere with the in
ternal affairs of any member nation. I am,sure that Great
Britain and France and Italy and Japan do not contemplate
granting this right to the league of nations.
Mr. FRANCE. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Maryland?
Mr. OWEN. I yield to the Senator.
Mr. FRANCE. I am very much interested in what the Sen
ator is saying. Would he care to define what he means by
“ internal affairs” ? Would he consider a question arising
between Great Britain and one of her colonies—Ireland, for
example—as being an internal affair, or not?
Mr. OWEN. I would. We can not at this time and in this
way undertake to settle the disputes between member nations
and the component parts of member nations, unless we want to
tear asunder the whole procedure. We can not undertake that.
We can not go into it. You might as well undertake to deal
between the United States and Texas as a part of this proposal.
It is easy enough to have an amendment that the league of
nations shall not exercise any powers except those that are ex
pressly granted to the league. But the great principles of inter
national law which are laid down in this formulated plan are
vital to our own future and to the peace of the world, and I
venture to express the hope that the Senate of the United States
will consider this matter constructively, with a view to perfect
ing the plan rather than with a view to confusing counsel and
exciting suspicion and arousing the hostility of our people on
the theory that this instrument is full of pitfalls and dangerous.
We assuredly have the wisdom to analyze the formulated plan
and to point out how it may be improved and made free from
any objection, and this ought to be done.
I do not care, Mr. President, to repeat the arguments which
have already been presented with such force upon the floor
relative to the views of our revered first President in his Fare
well Address. I am altogether in accdrd with the principles
expressed in the Farewell Address of Washington. But the day
of American isolation has long since ended. Our interests are
bound up in the welfare and happiness of mankind. We are
no longer isolated. A submarine could come up the Potomac
River and blow down the Capitol of the United States, it could
drop a gas bomb in the Senate that would smother the most
glorious declamation and the most magnificent oratory. We
are not isolated; we can never be isolated. We are face to
face with the duty and the task of using the influence of this
great Nation to bring about the security and peace of the world.
1107G4— 19405
N
Our people realized this when they determined that the time
had come for us to engage in suppressing the military autoc
racy of the Teutonic allies, and we have .just completed that
task at a stupendous cost in treasure and in human life. We
can not afford to have another world war. The interests of
the American people demand peace, security, stability, in order
that they may enjoy the rights guaranteed by our Constitution
of life, liberty, and the pursuit of happiness.
Mr. President, may I not be.permitted to pray that my
colleagues shall consider this mater with very great patience,
and deliberation,.to the end of perfecting this proposal estab
lishment of international law in order that our people may
have the peace to which they are so thoroughly entitled?
America brought this war to an end, to the imperishable glory
of her gallant and intrepid sons, who, over every obstacle of
barbed wire, sunken trenches, concealed machine guns, against
poisonous gases, against a hurricane of shrapnel, and high ex
plosives, never paused and never failed to advance until the
German military commanders collapsed.
The people of Europe and the people of the world owe to
America a debt which can never be paid, and America must not
depart from her high standards of human service. The time is
at hand to establish the conditions which will verify the prophecy
of a thousand years of peace. The time has come when there
shall be established upon the earth the great principles of liberty,
of justice, of humanity, and America should take the leading
part in that constructive work. I am one of those who strongly
advised the President of the United States to go to Europe in
order that the ideals of America might be presented to the Euro
pean statesmen, whom I knew were embarrassed because of
their long and painful experience with militarism. I knew that
they could not help thinking in terms of strategic boundaries, in
terms of battalions, in terms of armaments, and I am rejoiced
that our President was able to favorably influence European
opinion, so that we now have laid before us the preliminary
formulation of a plan which when perfected will effect and
maintain forever the peace of the world. Let America take her
place in the front rank in this forever-glorious enterprise.
I ask permission to insert in the R e c o r d a quotation from Mr.
Roosevelt upon this matter, which he made in his Nobel speech,
as an exhibit to my remarks.
The PRESIDING OFFICER. Without objection, it is so or
dered.
The matter referred to is as follows:
[Prom an address on “ International Peace ” before the Nobel Prize
Committee, delivered at Christiania, Norway, May 5, 1910, by Theo
dore Roosevelt.]
(Italics are inserted to emphasize certain proposals.— R. L. O.)
Now, having freely admitted the limitations to our work and the
qualifications to be borne in mind, I feel that I have the right to have
iny words taken seriously, when I point out where, in m.v judgment,
great advance can be made in the cause of international peace. I speak
as a practical man, and whatever I now advocate I actually tried tc do
when I was for the time being the head of a great Nation, and keenly
jealous of its honor and interest. I ask other nations to do only what
I should be glad to see my own Nation do.
'
The advance can be made along several lines. First of all, there can
he treaties of arbitration. There are, of course, States so backward that
a civilized community ought not to enter into an arbitration treaty
A v i t h t h e m , at least until we have gone much further than at present
in securing some kind of international police action. Rut all really
1107(14— 19405
17
civilized communities should have effective arbitration treaties among
themselves. I believe that these treaties can cover almost all questions
liable to arise between such nations, if they are drawn with the ex
plicit agreement that each contracting party will respect the other's
territory and its absolute sovereignty within that territory, and the
equally explicit agreement that (aside from the very rare cases where
the nation’s honor is vitally concerned) all other possible subjects of
controversy ivill be submitted to arbitration. Such a treaty would
insure peace unless one party deliberately violated it. Of course, as
yet there is no adequate safeguard against such deliberate violation,
but the establishment of a sufficient number of these treaties would go
a long way toward creating a world opinion which would finally find
expression in the provision of methods to forbid or punish any such
violation.
Secondly, there is the further development of The Hague Tribunal,
of the work of the conferences and courts at The Hague. It has been
well said that the first Hague conference framed a Magna C
’harta for
the nations ; it set before us an ideal which has already to some extent
been realized, and toward the full realization of which we can all
steadily strive. The second conference made further progress; the
third should do yet more. Meanwhile the American Government has
more than once tentatively suggested methods for completing the court
of arbitral justice, constituted at the second Hague conference, and for
rendering it effective. It is earnestly to be hoped that the various Gov
ernments of Europe, working with those of America and of Asia, shall set.
themselves seriously to the task of devising some method which shall
accomplish this result. If I may venture the suggestion, it would be
well for the statesmen of the world, in planning for the erection of
this world cour.t, to study what has been done in the United States by
the Supreme Court. I can not help thinking that the Constitution of
the United States, notably in the establishment of the Supreme Court
and in the methods adopted for securing peace and good relations
among and between the different States, offers certain valuable analo
gies to what should be striven for in order to secure, through The
Hague courts and conferences, a species of world federation for inter
national peace and justice. There are, of course, fundamental differ
ences between what the United States Constitution does and what we
should even attempt at this time to secure at The Hague, but the meth
ods adopted in the American Constitution to prevent hostilities be
tween the States and to secure the supremacy of the Federal court in
certain classes of cases, are well worth the study of those who seek
at The Hague to obtain the same results on a world scale.
In the third place, something should be done as soon as possible to
check the growth of armaments, especially naval armaments, by inter
national agreement. No one power could or should act by itself, for
it is eminently undesirable, from the standpoint of the peace of right
eousness, that a power which really does believe in peace should place
itself at the mercy of some rival which may at bottom have no such
belief and no intention of acting on it. But, granted sincerity of pur
pose the great powers of the world should find no insurmountable
difficulty in reaching an agreement which would put an end to the
present' costly and growing extravagance of expenditure on naval arma
ments An agreement merely to limit the size of ships would have
been very useful a few years ago, and would still be of use, but the
agreement should so much further.
Finally, it would be a master stroke if those great powers honestly
bent on peace would form a league of peace, not only to keep the peace
among themselves but to prevent, by force if necessary, its being broken
by others. The supreme difficulty in connection with developing the
peace work of The Hague arises from the lack of any executive power,
of any police power, to enforce the decrees of the court. In any com
munity of any size the authority of the courts rests upon actual or
potential force, on the existence of a police, or on the knowledge that
the able-bodied men of the country are both ready and willing to see
that the decrees of judicial and legislative bodies are put into effect.
In new and wild communities where there is violence, an honest man
must protect himself, and, until other means of securing his satetj are
devised, it is both foolish and wicked to persuade him to surrender his
arms while the men who are dangerous to the community retain theirs,
lie should not renounce the right to protect himself by his own efforts
until the community is so organized that it can effectively relieve the
individual of the duty of putting down violence. So it is with nations.
Each nation must keep well prepared to defend itself until the establish
ment of some form of international police power, competent and willing
to prevent violence as between nations. As things are now, such power
110764— 19405
to command peace throughout the world could bcsf hr assured by some
combination between those great nations which sincerely desire peace and
have no thought themselves of committing aggressions. The combina
tion might at first be only to secure peace within certain definite limits
and certain definite conditions ; but the ruler or statesman who should
bring about such a combination would have earned his place in history
for all time and his title to the gratitude of all mankind.
Mr. FRANCE. Mr. President, will tlie Senator yield?
Mr. OWEN. I yield to the Senator.
Mr. FRANCE. I have been very much interested in the ad
dress of the Senator, because I know that he entertains some
very progressive political views. I desire to ask him one or two
questions, for I know that lie has given much study to the phrase
ology of the proposed constitution of the league. Does he ap
prehend that under the present phraseology we might be called
upon to conscript our soldiers for the purpose of fighting Ireland,
for example, if Ireland should desire her independence, or of
fighting India, if India should desire her independence from
the British Empire?
Mr. OWEN. The exact reverse, of course, is true. The con
ditions which, under the old regime, made subject nations a
military asset will no longer exist if the league he established;
and nations would not regard subject nations as an asset, but
as a liability, where they were discontented.
Mr. FRANCE. I ask that question in view of the state
ment of the Senator that he thought the language should lie
made clear, so that it would be apparent always that member
nations should not interfere in internal disputes.
Mr. OWEN. There is nothing in this proposed league of
nations which would require the United States to furnish her
troops on the battle field. It is one thing to have an aggressive
nation invading the territorial integrity or political independ
ence of a nation, and by that act, in violation of these terms,
making war itself upon all nations. We had war made on us
a long time before we yielded to the affront and to the danger
which threatened us. A nation can make war under the terms
of this constitution without involving us in any degree to
furnish any troops. On the contrary, instead of its reading to
conscription, Gen. Smuts in his book on the League of Nations
argues that conscription is a potent means of promoting war,
and he is opposed to conscription.
Mr. FRANCE. Certainly there is great ambiguity in the
language when it is susceptible of so many different interpre
tations.
Mr. OWEN. I think some of the interpretations of the lan
guage used are not justified at all by the language itself, but
are quite hypercritical and entirety unjustified by anything in
the instrument.
Mr. FRANCE. Now, I desire to ask the Senator one more
question. What does he consider to be the purpose of this
league of nations? Is it merely to secure peace, or is it really to
secure justice and the advancement of the welfare of all men,
including the advancement of the backward nations of the
world ?
Mr. OWEN. They are coincident. Justice and peace go hand
in hand. You can not have peace if you do not have justice.
110764— 19405
19
Mr. FRANCE. I am very glacl the Senator is bringing out
that thought-----Mr. OWEN. The Senator himself brought it out.
Mr. FRANCE. Because, according to the idea that I enter
tain, the two things are not always synonymous. Sometimes
there can not be justice if there is to be peace; sometimes justice
can not be advanced by peaceable means; and it seems to me it
should be clearly stated what the purpose is. If it is merely to
be a league of peace for the preservation of the status quo, that
is one thing. If it is to be a league which is to express the
great cooperative spirit for the advancement of the world and for
the uplifting of those peoples of the world who are backward
and have been kept down because heretofore there has been ex
ploitation rather than a desire for elevation, then the league is
quite a different thing.
Mr. OWEN. Mr. President, so far as Great Britain is con
cerned, I think, the best evidence that she had tried to give
justice to her colonies was shown by the loyalty and zeal of
her colonies in coming to her support in this great crisis of the
war.
Mr. FRANCE. To try is not enough. To try for justice is
not enough. Justice must be accomplished. How about the
great country of Africa, composing approximately one-fourth of
the earth’s land surface? The-same heathenism, the same
savagery, exist to-day in the heart of Africa as existed when
the pyramids were new. A mere good-natured will is not enough.
The liberals of the world to-day demand results, and they will
have them.
Mr. OWEN. I am pleased to see the Senator’s enthusiasm
in favor of justice. I am in accord with his desire.
Mr. FRANCE. I believe that the Senator i s ; but let us keep
the great purpose to the front, not merely a stagnant universal
passivity but a purpose of progress and advancement. That is
what I hope to see come out of this great cooperative movement.
Mr. OWEN. I think great advancement will come from this
league, because the principles of justice and right are written
in the provisions of the proposed league; and when those prin
ciples are made the universal law I have no doubt that they will
become more and more potent, and that they will become the
universal rule.
Mr. FRANCE. Mr. President, if I am not disturbing the
Senator, may I ask him this question: As the Senator from
Oklahoma entertains very progressive views, does he not realize
that many countries of the world have been in the hands of re
actionary ministries who look with suspicion upon any effort to
advance and improve the conditions of the backward nations
of the world?
Mr. OWEN. Undoubtedly. That is not altogether untrue of
the United States.
1 1 0 7 G 4 -— 1 9 4 0 5
o
At
SPEECH
OF
HON. ROBERT L. OWEN.
THE PEACE TREATY AND LEAGUE OE NATIONS.
Mr. OWEN. Mr. President, the Senate of the United States
is facing its greatest responsibility in the history of the Re
public. We are face to face with the acceptance or the rejection
of a treaty of peace with Germany, and the acceptance or re
jection of a covenant establishing a league of nations and a
new world order of liberty, justice, and humanity.
In a great enterprise of this character we must not permit our
selves to deal with the shadows ; we should deal only with the sub
stance.
The treaty with Germany establishes the disarmament of
Germany as a great vital fact, absolutely breaks its military
and naval power, its dynastic ambition and militarism, and com
pels reparation for the damage done by the German people. It
compels the German and Austrian Governments to recognize the
rights of subject peoples heretofore dominated by Germany and
her allies. They are compelled to recognize the Poles, the
Czecho-Slovaks, the Jugo-Slavs, and to recognize the new bound
aries of these peoples and their right to self-government, their
right of self-determination, and equitable treatment to their com
merce and industry. The reduction of the military power of
Germany is an event of the first magnitude. It is the reduction
of the only great power which in modern times has entertained
the ambition of world dominion; it is the reduction of the only
great power deliberately building up a military force for ag
grandizement, for annexation, for indemnity, and for profit.
The reduction of German war power and lust for dominion by
this war and by this treaty is one great fact that must color
everything which follows. Above all, there is established by a
world agreement the covenant of the league of nations with a
force of sufficient financial, commercial, military, and naval
power to command the peace of the world for all time.
I have studied the covenant of the league of nations with
care. I have read many speeches hostile to this covenant, and
have weighed the arguments against the covenant. I have
found them very hypercritical, partisan, and without convincing
force.
I am profoundly convinced that it is my duty as a Senator
of the United States, representing the people of the United
States, to give this covenant my support without amendment or
reservation. I regard it as my duty to the world to support
this covenant.
Mr. President, the peace of the world might have been se
cured by the conventions at The Hague in 1899 and 1907 if it
3 3 3 0 3 5 — 19 7 5 1
3
hacl not been for the military autocracies governing Germany,
Austria, Bulgaria, and Turkey, whose representatives refused
to agree to arbitration or to disarmament and who, when ready,
violated all The Hague conventions and their solemn treaties
with other nations in their violent attempt in 1914 to establish
world dominion.
The great obstacle to world peace of 1899 and 1907 is happily
removed.
These autocratic military governments are now disarmed.
They will be compelled to accept the principles of international
morality, and it may well be believed that with the overthrow of
the military autocracies which governed these peoples, which
dominated and drove them into battlej the people themselves
will soon realize their deliverance and will appreciate and sup
port with heartfelt loyalty the new world order.
Mr. President, the great conflict between military autocracy
and the growing democracies of the world was almost unavoid
able. The Romanoffs, the Hohenzollerns, the Hapsburgs, and the
Bourbons, by the Secret Treaty of Verona, had sworn, in 1822, to
destroy the democracies of the world. That treaty, articles 1 and
2, provided:
A R T I C L E 1. T H E H I G H
C O N T R A C T I N G P O W E R S B E IN G C O N V IN C E D T H A T
TH E SYSTEM
OF R E P R E S E N T A T IV E G O V E R N M E N T IS E Q U A L L Y A S IN C O M
P A T IB L E W IT H
THE
M O N A R C H IA L P R IN C IP L E S A S T H E
M A X IM
OF T H E
S O V E R E IG N T Y O F T H E P E O P L E W I T H T H E D IV IN E R I G H T , E N G A G E M U T U A L L Y ,
I N T H E M O S T S O L E M N M A N N E R . T O U S E A L L T H E I R E F F O R T S TO P U T AN
E N D T O T H E S Y S T E M O F R E P R E S E N T A T I V E G O V E R N M E N T S IN W H A T E V E R
C O U N T R Y I T M A Y E X I S T I N E U R O P E A N D T O P R E V E N T I T S BEIN’ G I N T R O
D U C E D IN T H O S E C O U N T R IE S W H E R E IT I S N O T Y E T K N O W N .
A R T . 2. A S I T C A N N O T BE D O U B T E D T H A T T H E L I B E R T Y O F T H E P R E S S
I S T H E M O S T P O W E R F U L M E A N S U S E D B Y T H E P R E T E N D E D S U P P O R T E R S OF
T H E R IG H T S OF N A T IO N S TO T H E D E T R IM E N T OF T H O S E OF P R IN C E S , T H E
H I G H C O N T R A C T IN G P A R T I E S P R O M I S E R E C I P R O C A L L Y TO A D O P T A L L P R O P E R
M E A S U R E S T O S U P P R E S S I T , N O T O N L Y I N T H E I R O W N S T A T E S B U T A L S O IN
T H E R E ST OF EUROPE.
They immediately overthrew the limited monarchy in Spain
and established an absolute monarchy under the same prince.
They did the same thing in Italy with a view to establishing
absolute monarchies throughout the world and keeping the
people of the world as subjects, as political slaves, and as in
dustrial slaves subject to the mastery of the ruling powers.
The Monroe doctrine was declared for the express purpose of
checking this monarchical movement and preventing its exten
sion to the Western Hemisphere. The Hohenzollerns were the
leaders o f this conspiracy from 1822 down to 1914, and down
to the day when William II fled to Holland before the victorious
powers of the democracies of the world.
This great war was fought by America on the principle that
the peoples of the world had the right to govern themselves,
and the allied Governments confirmed the American theory on
November 5, 1918, as the basis of the armistice. The present
dictated treaty of peace is the result and is before us.
This war was a war to establish right against might, justice
and humanity against injustice and inhumanity; to establish
the rule of conscience throughout the world against the rule
of brute force, the right of men everywhere to govern them
selves.
The principles of righteousness were successful, and In the
final months of battle the great powers of the United States were
133035— 19751
innrshaled and thrown upon the buttle field, giving vitality to
the flagging forces of Great Britain, of France, of Italy, and of
Belgium and brought an imperishable glory to the American
Republic as the world apostle of liberty and righteousness.
league
of
v ic t o r io u s
n a t io n s
.
Mr President, on the battle field a league of victorious nations
was established, led by the United States, Great Britain, France,
Italy Belgium, and Japan, and including 20 others. It may be
fairly said that the sympathy of all of the nations of the world,
of all the people of the world was finally aroused against the
wicked lust for dominion exhibited by the rulers of Germany,
and that finally on the inside of Austria and on the inside of
Germany disintegration commenced because of the discontent of
the Austrian and German people with the false leadership they
had been compelled to follow. It was a pathetic scene when we
saw the Czeclio-Slovaks, who had deserted Austria and fought
for the Allies, having passed around the world, reached Wash
ington and marched before the White House as a tribute to the
United States and as an evidence of their own devotion to the
cause of justice and righteousness.
Mr. President, the still small voice coming from the Divine
Spirit moves the hearts of all men and ultimately makes truth
triumphant and justice victorious.
We have now, Mr. President, a league of nations in actual
operation—a league of victorious nations, with their representa
tives in Paris completing the task imposed upon the world by
William II.
A league of victorious nations, through their representatives,
has presented to us a treaty of peace with Germany, with a
covenant of a world league of nations approved by the represent
atives of 32 nations: United States, Belgium, Bolivia, Brazil,
the British Empire (including Canada, Australia, South Africa,
New Zealand, and India), China, Cuba, Ecuador, France, Greece,
Guatemala, Haiti, Hedjaz, Honduras, Italy, Japan, Liberia,
Nicaragua, Panama, Peru, Poland, Portugal, Roumania, SerbCroat-Slovene State, Siam, Czechoslovakia, and Uruguay.
Mr. President, 13 other great States—Argentina, Chile, Colom
bia, Denmark, Netherlands, Norway, Paraguay, Persia, Salva
dor, Spain, Sweden, Switzerland, Venezuela—in effect Republics
more or less advanced, are ready and have been invited to join
the covenant of the league of nations.
Mr. President, I can not but believe that within a short period
of probation Germany, Austria, and Bulgaria will be admitted
to the league of nations, and that Russia— a united Russia, a
great Republic of Russia, or perhaps several republics com
posed of Russian people— will gladly join the league when they
Shall have established orderly, democratic government.
All of these nations stand for peace and justice and sympa
thetic cooperation, and the Hohenzollerns, the Hapsburgs—the
governments based on militarism and lust for world dominion—
are dead beyond the possibility of resurrection.
We are entering a new world order. The representatives of
32 nations have been conferring together since the 11th day of
November, 1918, and have finally worked out with infinite pains
a treaty of peace with Germany which is now before us (S. Doc.
No. 49, 66th Cong., 1st sess.). It comprises 440 articles—a
1 3 3 0 3 5 — 1 9751
l
i
>
I
I ^
volume of 194 pages. It is the most important treaty the world
has ever seen. It deals not only with Germany but in effect
it deals with the new nations that are brought into life by this
peace treaty.
I shall support the treaty of peace as the best settlement
found possible by the representatives of the great nations fight
ing together for liberty and justice.
We have a league of nations now, born of necessity, created
by war, by the exigencies of life and death, and they are trans
acting business without any other charter than the charter of
necessity. This treaty has not been carelessly drawn. The
United States alone had a large number of expert men engaged
in an advisory capacity to gather together the information for
our peace commissioners, and it is quite a wonderful tribute
to the excellence of this treaty and to its thoroughness and to
its accuracy that the opponents have found in 440 articles so
few of which they can complain. I shall refer to some of these
objections later.
But, Mr. President, what I now wish to emphasize is that we
have a league of nations working without a charter, establish
ing by military force the peace of Europe, a peace which is
essential and necessary to the peace of the American people;
that the league of victorious nations in arms through its repre
sentatives has finally reached an agreement. Germany has
ratified the terms; Great Britain has ratified it; France in a
few days will have ratified it, and so will Japan. Are these
great voices of no persuasive force? It is a dictated peace, as I
had the honor to advise the honorable Senator from Massachu
setts [Mr. L odge] it would be, when he denounced the armistice
and President Wilson’s question to the German people which
preceded the armistice. It is as much a dictated peace as if the
Allies had gone to Berlin after having devastated hundreds of
cities and villages and marched over the bodies of hundreds of
thousands of the slain.
Never was a greater assemblage of scholars, technical experts,
historians, and trained statesmen assembled. Their work
should command the respect of all thoughtful men who respect
authority and are moved by competent argument.
Mr. President, the nations composing the league of victorious
nations discovered that while they were bound together by the
exigencies of war in framing the future relations of the nations
of Eux*ope wi i Germany and her allies, and compelling compli
ance to the decrees of the great Allies, it was essential to estab
lish a league of nations that should embrace all the nations of
the world, 32 of whom were already at the peace table joining in
the making of peace with Germany, and it was well known that
all the other nations in the world, except Germany and her
allies and disordered Russia, were ready to adjust themselves
to a world-wide league of nations for the preservation of the
future peace of the world and for the very vital purpose of mak
ing effective the settlement with Germany and her allies, making
a certainty that militarism should not again raise its martial
head, and that Germany and Austria should respect the penal
ties imposed upon them and make reparations for the damage
they had done.
Throughout the treaty of peace with Germany the proposed
league of nations is charged with many responsibilities to see
133035— 19751
)
7
that this treaty is carried o u t; that the boundaries fixed shall be
respected. Tliis treaty establishes new relations between Ger
many and all other nations in the most important particulars,
with the new States, Czechoslovakia, Poland, Austria, Hun
gary, Schleswig, with Russia and the Russian States, with the
German colonies, with China, with Siam, Liberia, Morocco, with
Egypt, Turkey, Bulgaria, and in respect to Shantung.
This treaty is of gigantic importance in disarming Germany,
demobilizing her forces, limiting her army and navy, her arma
ments, her munitions, her materials of war, abolishing abso
lutely compulsory military service in Germany, preventing short
enlistments in the army to train citizens as soldiers, limiting her
fortifications, depriving her of the right to have military aero
planes or submarines, authorizing interallied commissions of
control, making sweeping provisions for reparation, and propos
ing proper penalties upon the criminal leaders who committed
the hideous crime of the war of 1914.
This treaty of necessity deals with commercial relations, with
property rights, contracts, judgments, ports, waterways, rail
ways, navigation, and so forth.
Mr. President, the covenant of the league of nations sub
stitutes law and order in place of anarchy between nations.
We have had no such thing as international lawr We have
.
had merely international precedents, international ethics and
agreements. No rule of human conduct not prescribed by com
petent authority and capable of enforcement deserves to be
called a law.
The covenant of the league of nations is the beginning of
international order and international law to govern relations
of the citizens of one nation with the citizens of another
nation. The covenant is drawn up with avowed purpose—
to promote international cooperation and to achieve international
peace and security.
The most intense partisan bigotry will not challenge the
nobility of this purpose. The means by which this noble end
shall be accomplished is specifically laid down—
First. By the acceptance of obligations not to resort to war.
Second. By the prescription of open, just, and honorable relations
between nations.
Third. By the firm establishment of the understandings of inter
national law as the actual rule of conduct among Governments.
Fourth. By the maintenance of justice and a scrupulous respect
for all treaty obligations in the dealings of organized peoples with one
another.
These four proposals are the proposals of the first paragraph
of the covenant of the league of nations, and whatever follows
must be interpreted in the light of the purpose and the plan
proposed to carry out the purpose of achieving international
peace and security.
The 26 articles then lay out a plan for achieving international
peace and security.
First it pledges every member (art. 10) not to invade the
territorial integrity or existing political independence of any
other member nation, and not only to respect this principle but
to preserve against external aggression the territorial integrity
and existing political independence of all members of the league.
Abundant means for safeguarding the future peace of the world
is provided as follows:
133035— 19751
8
\
a. By recognizing the importance of reducing armaments to
the lowest point consistent with national safety and interna
tional obligations;
b. By limiting the private manufacture of munitions and
implements of war and providing a means for abating this
menace to peace;
c. By giving full information with regard to the manufac
ture of armaments and military, naval, and air programs;
d. By establishing a commission to deal with the question
of military and naval programs;
e. By providing for an immediate call of the council in case
of war or a threat of war (art. 10) ;
f. By providing that members of the league shall submit dis■putes to arbitration or to inquiry by the council, and that they
will not resort to war until at least three months after the award
by the arbitrators or the report of the council (art. 12).
g. By recognizing as suitable for arbitration—
First. All disputes relating to the interpretation of treaties.
Second. Any question of international law.
Third. The existence o f any fact which if established would
constitute a breach of any international obligation.
Fourth. Or as to the extent and nature of the reparation to
be made for any such breach.
h. Provision is made that the members of the league will
carry out in good faith any award that may be rendered, and
that they will not resort to war against a member which com
plies with the award (art. 13).
i. A permanent court of international justice is contemplated
to be submitted to the members of the league for consideration
(art. 14).
k. A further provision is made to settle disputes by provid
ing that questions not submitted to arbitration shall be sub
mitted to the council for full investigation and consideration.
l. Provision is made for an appeal to be made from the coun
cil to the assembly (art. 15).
m. If any member resorts to war in disregard of its cov
enants to arbitrate or adjust its differences with other nations
under articles 12,13, or 15, it shall, ipso facto, be deemed to have
committed an act o f war against all other members of the league,
which undertake immediately to subject the offending nation—
First, to the severance of all trade or financial relations.
Second, the prohibition of all intercourse between other na
tionals and the nationals of the offending State.
Third, the prevention of all financial, commercial, or per
sonal intercourse between the nationals of the covenant-breaking
State and the nationals of any other State, whether a member
of the league or not.
These penalties are sufficient to deter any nation on earth
from attacking another nation in violation of the covenanted
agreements (art. 16).
n. Moreover, it is provided that it shall be the duty of the
council in the case of an outlaw nation to recommend to the sev
eral Governments concerned what effective military, naval, or
air forces the members of the league shall severally contribute
to the armed forces to b'e used to protect the covenants of the
league (art. 16).
1 3 3 0 3 5 — 19T51
a
This provision is similar to the provision in article 10 that
where any nation is exposed to an exterior aggression of its
territorial integrity or existing political independence by an
other nation, the council shall advise as to the means by which
the obligation to preserve the territorial integrity and existing
political independence of nations shall be fulfilled.
o. Article 16 makes further provision that in the case of an
outlaw nation the members of the league shall .cooperate in
financial and economic ways to minimize the harm done by a
blockade and boycott of the offending nation.
p. Article 17 provides for the settlement of disputes between
nations not members of the league, and provides for the coercion
of any nonmember which assails a member nation contrary to
the principles of the league.
q. Publicity of treaties is provided for as a safeguard against
secret treaties ( art. 18).
r. The assembly is authorized to advise the reconsideration
of existing treaties that may involve or endanger the peace of
the world (art. 19).
s. The members of the league are to cancel and set aside obli
gations or understandings among themselves which are incon
sistent with the principles of the proposed league, and they
agree not to hereafter enter into engagements inconsistent with
the principles of the league (art. 20).
t. The league is intrusted with the general supervision of the
trade in arms and' ammunition with the countries in which the
control of this traffic is necessary in the common interest
(art. 23).
u. The very great and important principle is laid down in the
proposed covenant that the people in German colonies and terri
tories where the people are not yet able to stand by themselves
shall have their right of development placed under the au
thority of the league of nations as a sacred trust of civiliza
tion, and that mandatories shall be established comprising
nations trained in the art of government which shall exercise the
responsibility, under a charter issued by the council in behalf of
the league, determining the degree of authority, control, or ad
ministration to be exercised by the mandatory, and providing
for annual reports, and recognizing the principles of justice
and the right of the people who are governed to primary con
sideration.
v. Some very important principles are laid down in section
23, pledging the member nations—
(a) To endeavor to secure and maintain fair and humane con
ditions of labor for men, women, and children both in their own
countiies and in all countries to which their commercial and in
dustrial relations extend, and for that purpose to establish and
maintain the necessary international organizations—
(b) Pledging tlm members to undertake to secure just treat
ment of the native inhabitants of territories under their control
(c) That they will intrust the league with the general super
vision over the execution of agreements with regard to the
traffic in women and children, and the traffic in opium and other
dangerous drugs.
(e) That they will make provision to secure and maintain
freedom of communications and of transit and equitable treat
ment for the commerce of all members of the league.
1 3 3 0 3 5 — 1 9 7 5 1 ---------- 2
10
'i
(f) That they will endeavor to take steps in matters of inter
national concern for the prevention and control of disease.
That they will encourage and promote voluntary Red Cross
organizations (art. 25).
Mr. President, this covenant provides for the settlement o f
every international dispute that can honestly arise. It pro
vides for the disarmament of nations to the limit of safety.
It provides a gigantic penalty of international boycott and
blockade of any nation which, contrary to the principles of the
league, invades the territorial integrity or political independence
of another nation. It lays down the principles of justice and
humanity. It pledges the nations of the world to the great
principles of peace and international justice and international
understanding. And above all the old enemies of peace and
justice are powerless and made incapable of future mischief.
Those who have been opposing the league have not been able
to point out in a single instance where they could improve upon
the precautions taken by this great covenant to prevent war in
future.
We are face to face with either accepting the covenant or re
jecting it. If I should take part in rejecting it, Mr. President,
my conscience would never cease to distress me as having
failed in a great crisis of the world’s history to do what I could
to establish peace on earth, good will toward men.
Mr. President, the covenant of the league of nations is the
consummation of a century of the aspirations of the good men
of the world. It is the work of many hands. The doctrine of
disarmament and of arbitration would have been adopted at
The Hague in 1907 except for Germany and her allies.
It is absolutely inconceivable that any existing democracy
on earth would disregard the principles laid down in this league.
They would have no motive, in the first place. They would not
dare, in the second place.
P R E S ID E N T W IL S O N .
*
*
The political enemies of President Wilson should not throw
themselves in blind fury against the covenant of the league of
nations on the theory that it is his child, conceived by him and
brought forth by him, and therefore deserving a merited
slaughter. The principles of the league are those of The Hague
conventions brought down to date. It represents the best opin
ions of the whole civilized world. As far as the covenant of the
league of nations is concerned it is full of wisdom and virtue. It
is a child conceived by all the lovers of men.
I was one of those, and I assume the responsibility, who urged
President Wilson to go to Paris and to use his prestige as Presi
dent of the United States to bring about this covenant. I think
he is entitled to very great credit for having succeeded in bring
ing back a covenant fundamentally sound, which will accom
plish the purpose of world peace, world order, and world pros
perity. History will give him a credit which his political oppo
nents would now deny.
O P P O S IT I O N
TO
THE
COVENANT.
Mr. President, one of the first principles which I learned ns a
Member of the Senate, in its capacity to pass upon foreign
treaties, was this—
That in the Senate of the United States party lines should cease at
tidewater.
133035— 19751
1
11
I have been profoundly disappointed to find the distinguished
Senator from Massachusetts, the present chairman of the Com
mittee on Foreign Relations [Mr. L odge], ignoring this sound
with his round rohin, marshaling all the Republican
Senators whom he could influence to piotest against the cove
nant establishing the league of nations, making hostile speeches
against it and leading other Senators to do the same thing.
The opponents of the league have proven too much.
The distinguished Senator from Illinois [Mr. S h e r m a n ] un
dertook to demonstrate that the league would be controlled by
the Catholic Church by controlling a majority of the votes of the
assembly and that the Catholic Church would thus rule the
world.
.
. . . ..
Another Senator undertook to prove in the same way that the
colored races would control the league of nations, and therefore
control the world.
Other Senators to their own satisfaction have shown that
Great Britain would in like manner control the league and
therefore control the world.
These Senators might do well to reconcile their own differ
ences before they ask the people of the United States to follow
a leadership that leads in all directions at once.
But, Mr. President, they are completely put to confusion by a
fair interpretation of the covenant itself. The action of the
league (art. 2) must be effected through the instrumentality
of an assembly and of a council. It is expressly provided in
article 5 that—
Except where otherwise expressly provided in this covenant or by the
terms of the present treaty, decisions at any meeting of the assembly
or of the council shall require the agreement of all the members of the
league represented at the meeting.
In other words no decision except by unanimous vote.
The only exceptions provided for by the covenant are in
respect to matters of procedure, the appointment of committees
(these arrangements may be decided by a majority) (art. 5),
and in the case of an appeal to the assembly of a pending dis
pute it is provided that a decision may be arrived at if con
curred in—
bv the representatives of those members of the league represented on
the council and of a majority of the other members of the league,
exclusive in each case of the representatives of the parties to the
dispute.
In other words, the decisions of the assembly or of the council
in relation to international affairs must be unanimous. Where
is the possibility of the dominance of any nation over other
nations represented on the council or in the assembly? Where
is the danger of dominance by England, the Catholic Church, or
the colored races when no action can be taken except by unani
mous consent?
Great stress has been laid upon the number of votes given
to Great Britain as in the cases of Australia, South /Africa,
New Zealand, Canada, and India, while only one is given to the
United States.
The answer to this is that since a unanimous decision is re
quired it is not of the slightest importance; and, second, that in
so far as mere votes are concerned, the United States has a
number of small nations whose support could be relied upon, as
Cuba, Haiti, San Salvador, Panama, Liberia, Nicaragua, Hon133035— 19751
12
duras, and Guatemala, whose population is negligible but whose
dependence upon the United States is of such a character that
their cooperation with the United States can be as much relied
upon as the cooperation of Canada with Great Britain.
But there is nothing in the argument one way or the other,
file argument is specious, it is fallacious, it is misleading and
unworthy of being presented to the American Senate A few
votes are of no importance where all must agree.
e n t a n g l in g
a l l ia n c e s
.
The opponents of the covenant establishing the league declare
with suspicious zeal that we are violating the advice of our
advances^ as^ n» ton and ignoring his warning against entangling
The entangling alliances to which Washington referred were
agreements, common in his day, making offensive and defensive
alliances between one autocracy and another, between rival
groups of monarchies. He was very wise to advise the United
States to keep out of such difficulties where nations were
controlled by military and dynastic ambitions and selfish in
trigue.
Our revered Washington had not the faintest conception of
the present covenant establishing a world order by the democ
racies of the world as a result of the complete overthrow of the
Hohenzollerns, the Hapsburgs, and the Romanoffs. So far is
membership in the league of nations under the present cove
nant from being an entangling alliance, it is an association
which will make impossible any entangling alliances such as
those contemplated by Washington.
The present covenant precludes the possibility of military
dynastic alliances. The present covenant establishes peace on
earth, establishes a just and fair relationship between all na
tions, with all the nations of the earth pledged to maintain the
political integrity and the existing political independence of
every single member nation. I agree with Senator L odge’ s
speech of June 9, 1915, at Union College, that “ there is no escape
from the proposition that nations must unite to prevent war ”
and disagree with his present attitude. Is it not strange he has
made no constructive proposals?
f \
M O N R O E D O C T R IN E .
Without a gleam of humor there are opponents of the league
who have the hardihood to confront the intelligence of man
kind with the astonishing proposal that the present covenant
would abolish the Monroe doctrine. These unhappy statesmen
think the Monroe doctrine is a charter establishing suzerainty
over the Central and South American Republics and that it is a
species of overlordship by which the United States has a right
to manage and control the policies of the other Republics on
the Western Hemisphere. This un-American conception has
been highly mischievous just to the extent that it has had the
temerity by mysterious innuendoes to formulate itself, it has
caused the Republics of South America and of Central America
to look upon the United States as the Colossus of the North
ready to invade their territory and their existing political in
dependence whenever a pretext arises for the purposes of profit__
commercial, financial, or political.
Nr
133035— 19T51
\
i
-
13
This is the doctrine which the Germans have used in the
Argentine, and Chile, and Brazil, and Colombia, and throughout
the South American Republics and the Central American Re
publics, for the purpose of discrediting the United States and
breaking down our just influence with these neighboring Re
publics whose faithful friend we always have been and whose
faithful friend we always shall remain.
The Monroe doctrine is this: That the United States will
regard it as an unfriendly act for any foreign nation to at
tempt to establish on the Western Hemisphere its system of
government or to interfere with the political independence or
policies of the Republics on the Western Hemisphere.
This doctrine has been somewhat expanded to mean that the
United States would not be indifferent to an attempt on the part
of a foreign Government to acquire additional lands on the
Western Hemisphere.
The Monroe doctrine does not give the United States any
rights of suzerainty. The rights of the United States have
been somewhat expanded, by the necessities of the case, as in
Haiti, under the same principle which is recognized in article
22 of the pending covenant, establishing mandatories over
communities showing themselves incapable of orderly selfgovernment. But this is an entirely different principle from
the Monroe doctrine, and the Monroe doctrine may fairly be
construed to preclude a foreign nation from exercising the rights
of a mandatory on the Western Hemisphere.
Article 10 pledges all the members of the league to respect
and preserve the territorial integrity and existing political in
dependence of the member nations, and this is a powerful
confirmation of the underlying principle of the Monroe doc
trine, forbidding foreign nations and all other nations to invade
the territorial integrity or to interfere with the poiltical inde
pendence of the Republics of the Western Hemisphere.
But the covenant goes further: It actually recognizes, in
terms, the Monroe doctrine (art. 21), which is all any reason
able man ought to desire; and this great covenant of the league
of nations, instead of weakening the Monroe doctrine, would
strengthen it, confirm it, and cause it to be acknowledged by all
the world.
THE
LEAGUE
HAS
NOT STO PPED
W AR.
The opponents of the proposed covenant saj that it has not
stopped w a r; that there are a dozen wars pending now.
Nearly all of the so-called wars pending are civil wars, and not
really international wars. A few are over disputed boundaries
or disputed authority.
The league of nations has not yet been established. The
United States has not yet approved the covenant. But the
league of victorious nations, which is giving birth to the league
of all nations, has stopped the greatest war in history, the war
in Belgium, in France, in Italy, in Greece, in Serbia, and in
Germany, in Austria, Bulgaria, and Turkey, and demobilized
their armed forces.
The gigantic armies of the Teutonic allies are demobilized.
The great warring armies are rapidly returning to civilized pur
suits, and the smaller civil disputes which remain will rapidly
adjust themselves when the great nations of the world act.
133035— 19751
R E S E R V A T IO N S .
The opponents of the league having observed that article 1
provides that the members of the league are those who shall
accede without reservation to the covenant now insist upon res
ervations which would exclude, by the conditions of article 1,
the United States from membership in the league of nations.
Reservations are not necessary to the covenant as drawn
and are objectionable because by the terms of the covenant
itself any reservation to article 1 would exclude the United
States from membership in the league of nations and possibly
defeat the covenant itself by leading to otfier reservations and
withdrawals.
Instead of making reservations which would temporarily ex
clude the United States from membership in the league it
would be much better to ratify the treaty of peace with Ger
many and let Senators who have doubts remaining pass reso
lutions at the same time stating what the interpretation of the
Senate or of Senators may be. This would be ratification with
an explanatory interpretation of the meaning coincident to it by
those who think this necessary. But no reservations should be
attached to the ratification of the treaty itself, for the reason
that it would exclude the United States from membership in the
league if this were done, or bring the covenant into great con
fusion by inviting 50 nations to make reservations and amend
ments, to be in turn submitted to other nations and invite new
amendments or reservations.
Mr. President, I think it should be remembered by the Senate
that the sovereignty of the United States is vested in the people
of the United States; that the Senate and House of Represen
tatives merely occupy a position of temporary authority. No
Congress can bind a succeeding Congress. Any Congress can, by
act of Congress, repeal any treaty which is made. That is the
law of the United States, as repeatedly construed by the United
States Supreme Court. The effect of a treaty in the way of a
promise to another nation only carries with it as valid and bind
ing a moral obligation. A moral obligation, of course, is^ suffi
cient to bind the representatives of the people of the United
States, but if, when they ratify this treaty with Germany, thev
should on the same day and in a separate instrument pass a
resolution stating what, in the opinion of the Senate, is the
limitation upon the power of the Senate, what is the interpreta
tion of the Senate in agreeing to the covenant, it would com
pletely meet every possible objection at any future time that the
United States was not living up to its moral obligation, if any
nation in the future should put upon the covenant a meaning
which the Senate of the United States now believes they would
have no right to put upon that covenant. In other words, we
can meet the moral aspect by an independent resolution passed
on the same day, without interfering with the ratification of this
agreement, free from amendment or reservation.
I am in favor of ratifying it without amendment and without
reservation, and I do not think it is even necessary to have a reso
lution such as I have described, although for those who are timid
and fearful of a moral responsibility to nations in the future they
can reconcile themselves to themselves and to the world by taking
that course.
15
The league of nations—
First. Will prevent future war.
Second. Will establish world peace.
Third. Will promote international law and international un
derstanding and international morality.
Fourth. Will promote international industry, commerce, and
finance.
Fifth. Will promote higher conceptions of liberty and justice
and humanity.
Sixth. W ill save the enormous expenditures and waste in
T
life and property of preparation for war and of war.
Seventh. The economic penalties of the present .covenant are
sufficient to prevent war without the use of international police;
the international police being in existence does not imply and
probably would not require its employment, except on very rare
occasions.
Eighth. It will promote democracy throughout the world, the
rule of the people, and make the Government responsible to the
need, the welfare, the health, the happiness, the prosperity of
the people.
Ninth. It will make international agreements relative to
finance, commerce, and industry easier o f accomplishment.
Tenth. It will give a new dignity to human life and exalt it
above the conception of mere property, so that property would
be considered as secondary to human life.
Eleventh. It will mean the freedom of the seas and freedom
of international waterways, and a new birth of freedom through
out the whole world.
Twelfth. It will promote genuine democracy and end Bol
shevism.
Thirteenth. It will stop civil wars that are now raging in
certain demoralized portions of the world.
Fourteenth. It will promote the better interests of those who
labor throughout the world, of those who create values and give
them a larger part of the values which they create.
Fifteenth. It will put an end to dynastic ambition and to
military atrocity forever.
Sixteenth. It will end the rule of the few over the many and
establish the rule of the majority for the happiness of the
majority and of the minority as well.
Seventeenth. It will not impair the internal sovereignty of any
nation.
Eighteenth. It will abate racial and class prejudices.
The future success of the league is forecast by the success of
the British Empire, by the success of the Government of the
United States with its 48 sovereignties, living in peace and in
the most abounding prosperity the world has ever known, for
the very reason that they have complete cooperation instead of
selfish conflict one with another.
The rules of international law are simple and few and imper
sonal, and can be adopted by unanimous agreement of the rep
resentatives of the nations.
SHANTUNG.
A tremendous outcry has been made over Shantung by the
opponents of the treaty of peace with Germany.
The treaty, in articles 156 to 158, turns over to Japan the
rights which Germany had under the treaty of March 6, 1898
1330:13— 19751
By this treaty with Germany China retained sovereignty
over the Shantung Peninsula, giving Germany, however, cer
tain railroad and mining rights therein and leased for 99 years
to Germany a special tract which only involved 208 square miles
of land and 200 square miles of water at Kiaochow, the total
being less than 1 per cent of the Shantung Peninsula, which
lias 55,984 square miles. The population of the leased area
where Germany was permitted to exercise sovereignty involved
about 200,000 people.
When the war of 1914 arose, Germany, with the port facilities
on the Chinese coast, was in a position to destroy the transports
bringing troops from New Zealand and Australia.
Japan, on the invitation of the Allies, having entered the war
in 1914, took the German concession by military force, broke up
the port which the German ships had, and cleared the Paciiic
Ocean of German ships, giving a free right of way to the British
transports.
On May 25, 1915, at Peking, Japan made a treaty with China
by which the Chinese Government agreed to recognize any ad
justment made between the Japanese Government and the Ger
man Government as to Kiaochow, but with the understanding,
reduced to writing, at the same time and place, to w it:
P eking , May 25, 1915.
That the land and concessions and rights of sovereignty leased or
ceded to Germany should be returned by Japan to China upon the con
clusion of the present war upon the condition of opening the Kiaochow
as a commercial port, permitting a Japanese settlement there and an
international settlement, and that suitable arrangements should be made
for the disposal of the German public establishments and properties.
This was excellently well set forth by Senator R o b i n s o n in
July 24, 1919, C o n g r e s s i o n a l R e c o r d , page 32G4. Various
Japanese authorities have recently referred to this obligation of
Japan, which will undoubtedly be carried out in perfectly good
faith.
Viscount Uchidi, minister of foreign affairs of Japan, in his
address of January 21, 1919, confirmed this understanding, as did
Baron Goto, former minister of foreign affairs of Japan, in a
statement made in New York May 6,1919. The Associated Press
report from Paris of April 30, 1919, is of like effect. Baron
Makino confirmed this pledge on April 30, 1919.
Japan is a wonderful nation. It is a great nation, and is
entitled to the respect of all the world, especially of the great
Allies with whom Japan joined forces for the defense of civiliza
tion and righteousness.
It has not been possible for Japan to carry out the arrange
ment with China up to this date for the obvious reason that the
treaty concluding the war between Germany and Japan has not
yet been presented to Japan.
It is to be profoundly regretted that Senators occupying such
high responsibility on such an occasion, where the welfare of the
whole world is in the balance, should speak words reflecting upon
a great and friendly nation, whose fidelity has been so serviceable
and whose right to our confidence and trust has been abundantly
established in the history of recent years.
I have every respect and confidence in Japan and have not the
slightest doubt that Japan will carry out in good faith her agree133035— 19751
17
ment with China, and it is tfhe orderly way to settle the Shan
tung matter by providing that Germany shall make a formal
relinquishment to Japan, which conquered it, in order that Japan
may herself, having cleared the title of German claims, transfer
these lands and sovereignty back to China, as Japan agreed to do.
IN V A D IN G
OUR
S O V E R E IG N T Y .
Some of the hostile critics of the covenant insist that our sov
ereignty would be invaded by the provisions of the covenant;
that the assembly or the council would pass laws authorizing
the Japanese or Chinese to immigrate into the United States.
This whimsical conceit has nothing to justify it. The league of
nations does not contemplate dealing with anything except in
ternational questions, and does not contemplate dealing with in
tranational questions. None of the member nations contemplate
giving up their sovereignty. None of them had such a concep
tion. The only way a decision could be arrived at under the
covenant, even on such questions, is by unanimous vote (art.
5). It is grossly unreasonable to argue that 45 nations would
unanimously vote a precedent to invade their own sovereignty,
and no reasonable man believes it or can believe it if he is
capable of logical, consecutive thought.
Moreover, Mr. President, the sovereignty of the people of the
United States as vested in the people of the United States, is
inalienable, indestructible, and incapable of invasion. The Con
gress of the United States can not invade the sovereignty of the
people of the United States. It might commit political suicide
and be kicked out of office. But one Congress can not bind a
succeeding Congress, for the very reason that the sovereignty
is vested in the people, and they change their servants at will,
and they can. by an act of Congress, repeal any treaty the Senate
can pass if the Senate should pass a treaty that was unaccept
able to the American people.
I shall not criticize the rhetoric or the verbiage of the cove
nant. This covenant is wise. It is thoughtfully drawn. In
its substance it is splendid. In its purpose it is glorious.
A perfect contract between scoundrels is worthless. An im
perfect contract between trustworthy friends, who have fought
and bled together in a common love of justice and liberty, is of
very great value.
Are we justified in trusting the British people to faithfully and
justly interpret this covenant? Did not that first wonderfully
heroic army of British die almost to the last man in Flanders
defending liberty and justice against the armed Hun? Did not
the British sailors and men of war and destroyers ride through
the misty darkness of the North Sea for five years, day and
night, in storming seas defending the world against Teutonic
aggression? Have they not shown themselves for a century our
faithful friends?
It was Canning, the prime minister of England, in 1822, who
served notice on the Holy Alliance that the British Government
would not stand for the invasion of the liberties of the strug
gling Republics on the Western Hemisphere. It was through
Canning and the influence of the British Government that Mon
roe was informed and encouraged to send his great message to
Congress establishing the Monroe doctrine.
133035— 19751
Shall we be afraid of France and refuse to trust France? Did
they not, when this Republic was struggling for its liberties in
the beginning come with all the force they had and all that we
required to establish our liberties upon this continent? Did they
not cede to us a mighty continent in the Louisiana Purchase?
And have they not been faithful to the uttermost in defending
civilization against the Teutonic allies?
Shall we doubt Italy? The Italian people have shown them
selves to be glorious in war and magnificent in peace. When
Paris was about to be struck down by the advancing field-gray
troops of Germany, coming like swarms of locusts down upon
the Marne, it was Italy that told the French statesman, “ You
need not guard the borders between France and Italy. Italy
will not stand by Germany in a war of aggression.” ^ Italy made
a treaty with Germany and Austria, a defensive alliance,
against aggression on Germany and Austria, but not by Ger
many and Austria on undefended borders of others or any
unprovoked assault upon their neighbors. Shall we question
Italy when the Italians by tens of thousands and hundreds of
thousands died for a common cause with us?
An agreement between •scoundrels is worthless, no matter
how well drawn. An agreement between these great nations
who have common ideals and common purposes is worth while.
It is a great step forward, no matter how awkwardly, how
immaturely, how poorly drawn. The language and the rhetoric
might be finer perhaps, but the purpose is there, the substance
is there, and the covenant deserves the support of the American
people.
„
. . .. .
Some of the critics of the league of nations complain it is
not strong enough. I deny it. It is as strong as need be.
THE
LEAGUE
P R O V ID E S
ABUNDANT
FORCE.
The league provides a world-wide boycott, a world-wide block
ade—commercial and financial—by land and by sea, and cuts
off the citizens of any outlaw nation from communication with
any other part of the world. This is the most gigantic penalty
ever proposed in history.
The effect of the war with Germany was to destroy the value
of the bonds issued by her and her allies, and reduce such
bonds to the level of waste paper. This will serve to be a sound
warning to the citizens of any future proposed aggressor nation
that they can not afford to finance a war against the world
with an overwhelming prospect of complete loss of every dollar
invested in such a nefarious enterprise.
While it is impossible to think of a force much greater than a
world-wide blockade and boycott against an outlaw nation,
still the league goes further and provides that armed forces of
all the nations of the world can be summoned, in addition to
world-wide blockade and boycott, to reduce the outlaw nation
to subiugation, to peace, .and to recognition of international
duties and international justice.
Moreover, it is to be assumed that since democracy had its
modern birth, with the printing press and the French Revolu
tion and has grown like the green bay tree in the last 100 years
until it has assumed to establish this covenant of a world-wihe
league for the purpose of protecting itself, there is no possibil133035— 19751
ity of any nation in the world having the temerity to assail a
democratic world and to put itself in the attitude of an outlaw
nation.
There is not the slightest danger of Japan doing so, and if
she did the powers visible at her very doors could be used to
restrain Japan from any unlawful aggression against the peace
of the world or of any of the other nations of the league.
The force is sufficient to safeguard the peace of the world,
and far-seeing men will realize the gigantic character of the
force which can be summoned through this league for the pro
tection of mankind.
The league will safeguard the peace of the world, as well as
our own. It will end war. It will not interfere with our sov
ereignty. It is the blessing of God descended on earth.
Mr. President, we are entering upon a thousand years of
peace; into an era of great world prosperity; into an era
where the productive capacity of man is being multiplied in a
very wonderful way so that within the generation the time will
come when every man, every industrious man, will be able to
supply himself and his family with shelter, with clothing, with
abundant good food, and be afforded an opportunity for educa
tion and for leisure to enjoy the providence of nature. Let us
be devoutly thankful for the opportunity to bind the world to
gether in bonds of amity and peace.
133035— 19751
THE LEAGUE OF NATIONS
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN T H E
SENATE OF THE UNITED STATES
AUGUST 30, 1919
Replying to the Speech of
Hon. Henry Cabot Lodge
of Massachusetts of
August 12, 1919
W A S H IN G T O N
1919
1 3 5 .T 5 5 — 1 9 S 2 5
SPEECH
OF
IION. E O B E E T
L. OWE N.
t h e lea g u e of n a t io n s .
Mr. OWEN. Mr. President, on Tuesday, August 12 last, the
honorable Senator from Massachusetts [Mr. L o d g e ] , chairman
of the Committee on Foreign Relations of the United States Sen
ate, and the chosen leader of the majority party in this Chamber,
delivered a very carefully prepared argument against the league
of nations. The Senator from Massachusetts is recognized as
a learned scholar and a very studious historian, and an argu
ment which he delivers after the debate has proceeded for
months may fairly be regarded as the ablest possible presenta
tion of the case against the league of nations. If this argument
can not stand an analysis, the case of the opposition to the
covenant falls to the ground.
The honorable Senator lays down the first proposition:
ItsoIfat mankInd from generation to generation is constantly repeating
And s a y s :
Wc have an excellent illustration of this fact in the proposed exnent'peace1 of the world. ° f
1
to secure the perma-
llieieupon he calls attention to the alluring promises made
in the treaty of Paris of November 20, 1815, and the high pur
poses alleged in the treaty of the Holy Alliance, and shows his
torically that wars followed and not peace. He argued by
necessary inference that these promises of peace and assurance
of high purposes did not produce peace but war, and therefore
that the declaration of purposes found in the present covenant
of the league of nations would naturally be followed by war
because “ mankind repeats itself.”
The Senator quotes in derision the preamble to the covenant
and says:
Turn to the preamble of the covenant of the league of nations rmw
before us, which states the object of the league. It is formed— ’
“ In order to promote international cooperation, to achieve inter
national peace and security by the acceptance of obligations not to
resort to war, by the prescription of open, just, and honorable relations
between nations, by the firm establishment of the understandings of
international laws as tne actual rule of conduct among governments
and by the maintenance of justice and a scrupulous respect for all
treaty obligations in the dealings of organized peoples with one
The Senator then said:
No one would contest the loftiness or the benevolence of these pur
poses. Brave words, indeed. They do not differ essentially from the
Alliance6 ° t > trcaty
G
^ ar'is (1815), from which spring the Holy
In other words, Mr. President, the promises made by the treaty
of the Holy Alliance having led to war, these promises will also
lead to war, because “ mankind repeats itself.”
135555— 19825
o
4
The obvious fallacy of this argument is that the allayed
“ purposes ” of the Holy Alliance had nothing to do with the con
sequences which ensued from that alliance. War did not result
from the virtuous promises made to the people by the Holy
Alliance. The Holy Alliance made willfully, deceitful, and false
promises of brotherly love and peace in order to deceive the
people of Russia, Prussia, and Austria, and thus prevent them
from going into a revolution as the people had done in France
under like conditions of tyranny and brute military power. The
fact that wars followed the treaty o f the Holy Alliance was be
cause this treaty was between military dynasties, made by
monarchial autocracies, each controlled by intrigue, by rival
armaments, and by ambitious secret purposes. They were lined
up against other similar governments at that time not greatly
in advance of them in structure of government or in conception
o f liberty and popular rights. England, however, was becoming
steadily more democratic, and soon withdrew from the treaty of
Paris. France ultimately withdrew from the Holy Alliance.
The cause o f war was wrapped up in the treaty of the Holy
Alliance of Russia, Austria, and Prussia because of their
then severel secret, dynastic, military ambitions. There was
during that period no available or possible provision in the
world providing for conciliation and arbitration in the settle
ment of international disputes. There was uo means of pro
moting progressive disarmament, and the ambitions and. the
lust fo r power, unrestrained by law, unavoidably led to war
as a necessary consequence. There was no adequate restrain
ing power in all the world and no forum where the organized
opinion and power of mankind could make itself effective for
peace as there is available now.
The Senator from Massachusetts has shown himself unable to
discriminate between the unavoidable consequence of war o f
governments based on tyranny and brute force, such as Russia,
Prussia, and Austria, Bulgaria, and Turkey, and the conse
quences favorable to peace of governments based on the con
sent of the governed, on justice and liberty, such as the United
States and Canada, the South American Republics, Australia,
Great Britain, France, Belgium, and Italy. Such blind leader
ship might easily prove to be a national calamity.
The Senator from Massachusetts has failed to discover what
every student of history ought to know, who has a discerning
mind and an intelligent comprehension, that the instability and
wars of military dynasties had an adequate cause, and that
these causes rest in the “ Rule of the Few ” moved by intrigue, by
gross human selfishness, by ambition and lust for the property of
other people, leading them to develop great armies nominally for
defense, but always secretly for offense, so well described by
Vou Bernhardi, in his description o f the Hohenzollers and o f
Frederick II. Everybody seems to know this except the
Senator from Massachusetts. The stability of Republics and
tlieir power for peace is not based on preambles nor lofty
promises of high purposes, rts the Senator from Massachusetts
seems to think. They are based upon sound principles affecting
the structure of government, which go to guarantee justice
and liberty and humanity and the organized righteous selfgovernment of the people. These are the principles which
guarantee stability. These are the principles which not only
promise but will make sure the peace of the world.
b
r
155555— 19825
►
)
The Senator loosely argues that since “ mankind repeats
itself, and since the Holy Alliance made virtuous “ promises ”
and war followed, therefore that the virtuous promises of the
present covenant of a league of free nations can mean nothin"
but war. The Senator argues from the false premise that the
promises of the autocrats of the Holy Alliance were sincere
They were not sincere. They were wickedly false. I wondered
when the learned Senator was quoting the treaty of the Holy
Alliance with its virtuous “ promises,” that he did'not also quote
the secret amendments to the treaty of the Holy Alliance of 1822
which disclose the infinitely wicked deceit of these promises—
the secret treaty of Verona, in which the “ holy alliance o f
liars ” pledged their undying hostility to the democracies of the
world and the freedom of the press. Since the Senator thinks
it was the virtuous “ promises ” of the Holy Alliance that led to
war, let me call his attention to their pledge to destroy the
democracies of the world, and he will see, I trust, an abundant
cause for war necessarily involved in the treaty of the Holy
Alliance with its secret amendments at Verona, not because of
then virtuous promises but in spite of them. Their secret pur
pose was war.
Listen to the philosophy and historical admonition of the
secret treaty of Verona :
“ The undersigned, specially authorized to m ale some addi
tions to the treaty of the H oly Alliance, after having exchanged
their respective credentials, have agreed as follows:
A) tide 1. th e high contracting powers being convinced that
the system of representative government is equally as incom
patible with the monarchial principles as the maxim of the
sovereignty of the people with the Divine right, engage mutually
in the most solemn manner, to use all their efforts to put an
end to the system of representative gorernments, in whatever
counto I/ it may exist in Europe, and to prevent its being intro
duced in those countries where it is not yet hnown
You can only put an end to a government by war.
Ai t. 2. As it can not be doubted that the liberty of the press
is the most powerful means used by the pretended supporters
of the rights of nations to the detriment of those of princes the
high contracting parties promise reciprocally to adopt all proper
measures to suppress it, not only in their own States but also
in the rest of Europe.” (Vol. 53, pt. 7, p. 6781, 64th Cong., 1st
sess., Apr. 25, 1916.)
s’
Ihe King of Prussia and the Emperor of Austria were the
real autocratic monarchs behind this deadly compact to destroy
he democracies of lie world and establish “ world power ” for
themselves and their allies as the military autocrats of manHere these military autocrats, who had offered themselves to
the people of Europe as the servants of Christ and the
guardians of the peace of Europe, were, in fact, secretly pledging themselves to murder unoffending people of other lands
who had the temerity to believe in representative government
and in the liberty of a free press. They instantly made war
on the unoffending Spanish and Portuguese people and the
innocent Italian people, and put them all under absolute
monarchies, and would have done the same thing to the South
135555— 19825
6
American Republics but for Great Britain and tbe Monroe, mes
sage.
fck>es the Senator from Massachusetts really believe that it
was the virtuous “ promises” of the Holy Alliance that led to
war, or the “ secret ” purposes and ambitions of these military
monarchical despots who were secretly plotting to rule the
world by brute force? There is a vast difference, Mr. Presi
dent, between the promises of an honest man or an honest
government, of sincere well-meaning democracies, and the
promises of trained liars, murderers, and self-seeking despots.
And I feel fully justified in describing the Hohenzollerns and
the Hapsburgs and the Romanoffs in these plain terms.
The Senator from Massachusetts believes that the promises
of these royal scoundrels may be justly compared with the
promises and aspirations of the honest organized democracies
of the whole world, basing an alliance not upon their pretenses
of justice and liberty, but upon the demonstrated fact that they
are truly willing to die for liberty and justice.
The Senator from Massachusetts really believes in the rule of
the representatives of the people over the people in the rule of
the few over the many. He would draw a wide distinction be
tween “ representative ” government and government “ by the
people.” He does not believe that the people of a State have a
right to instruct or control their elected Representatives or to
initiate and pass the laws that they want or to veto laws they
do not want. H e thinks that for the people to express their
opinion upon a public question is dangerous to the principle of
constitutional government.
Am I hasty in making this charge against the leader of the
Republican Party in the Senate? I most certainly am not.
The Senator from Massachusetts may have forgotten, but I have
not forgotten, his famous speech in Boston on September 15,
1907, for I bad been but two days in tbe Senate when, on De
cember 18, 1907, Senator Hale, of Maine, bad printed 20,000
copies of this famous speech of the Senator from Massachusetts
as Senate Document 114, Sixtieth Congress, first session. This
speech was delivered in opposition to a bill then pending in the
Massachusetts Legislature known as the “ Public-opinion bill.”
The “ Public-opinion bill ” proposed to permit the people of
Massachusetts the astounding liberty of expressing their opinion
upon a public measure— but not exceeding four measures in
any one year. This bill Senator L odg e violently opposed on the
ground that it would overthrow the constitution of Massachu
setts and destroy representative government. I shall not chal
lenge the Senator’s integrity of mind or his integrity of purpose
in making this speech. I shall assume that he honestly believed
that the opinion of the people was dangerous to constitutional
government. In all events, this was his argument.
Twenty thousand copies of his speech were sent into Maine
in order to defeat a campaign then pending for the initiative
and referendum in that State.
The Senator said in criticizing the public-opinion bill that it—
would mean nothing less than a complete revolution in the fabric of
our Government and in the fundamental principles upon which the
Government rests.
That it—
would undermine and ultimately break down the representative principles
in our political and governmental system.
135555— 10825
7
j
With t;,,e assistance of Kingsbury B. Piper, secretary of the
State Referendum League of Maine, I prepared and had printed
as a memorial to Congress the answer of the State Referendum
League of Maine to the Senator from Massachusetts (Senate
Document 521, 60th Cong., 1st sess.). I caused 20,000 copies
to he printed and I franked them to Maine, and when the
people of Maine came to pass upon the validity of the ar<m
ment of the Senator from Massachusetts that the people should
have no right to express their opinions on public questions
either by public-opinion statute or by the initiative and refer
endum, they decided against the argument of the learned Senator
from Massachusetts, and the honorable Senator from Maine who
circulated the famous Boston speech against the public-opinion
bill did not hnd it desirable to stand for reelection.
In the State of Massachusets, in the last election, when the
people were selecting their delegates to a constitutional congress
there was a campaign in behalf of the initiative and referendum.
I liad prepared by the National Popular Government League, by
Judsoii King, secretary, an argument for this great measure of
popular government, and caused it to be printed as Senate
Document 763, Sixty-fourth Congress, second session, which
was used in the Massachusets campaign in favor of the initiative
and referendum. An overwhelming majority of the delegates
who had favored it were elected, and even the president of Har
vard who opposed it, was defeated. Senator Weeks opposed it
and he was defeated, and Senator W alsh , who favored it, was
elected, and is now present in the Senate.
I commend the judgment of the people of Maine and Massachu
setts to the considerate judgment of the honorable Senator from
Massachusetts. His leadership against popular government has
tailed both m Maine and in the great Commonwealth of Massa
chusetts.
The Senator from Massachusetts does not believe in the wis
dom of the people. He does not believe that the people have the
intelligence to initiate laws they do want or to veto laws they
do not want, and therefore he does not have any great decree of
confidence in the stability of a league of the great democracies
of the woild oi their ability to make sure their own peace Lie
loolvs upon them with less confidence than he did upon the mili
tary autocracies that framed the treaty of the Holy Alliance for
the Senator favored a league in 1915 when the autocracies were
in full flower.
I am devoutly thankful that there are hundreds of thousands
and millions of Republicans in the United States who do not
agiee v ilh the Senator from Massachusetts in this view and
that there are on this floor splendid Republican Senators who do
believe in popular government and in (he right of the people to
govern and who have confidence in democracies.
And I pause to say, Mr. President, that those who believe in
popular government are deeply desirous of having passed
i ! I1 Semite a thoroughgoing corrupt-practices act, and I
?
appeal to the Senator from Massachusetts to give his support to
such a bill m order that the “ representative system” of select
ing Senators and Congressmen may not be perverted bv the cor
rupt and sinister influences that by money and fraud are able
unduly to influence the nomination and election of Congressmen
1 3 5 5 5 5 — 19 8 2 5
and Senators. For six years the Progressive Senators on this
floor have been trying to get a thoroughgoing corrupt-practices
act, but have not been able as yet to do so. W hy” I will leave
?
to those who opposed it and to those who do not favor it and to
those who secretly throw the weight of their influence against it
to answer that question before the end of the next session of
Congress.
The Senator’s whole argument is based upon his inability to
perceive the difference between the relative trustworthiness of
democracies and autocracies, and in his violent assaults upon
the league he tries to show that we ought to have no league of
nations at all. He goes so far as to denounce the banner of the
proposed league of nations of the free nations of the earth, of our
wonderful Allies, of our heroic Allies, who died for liberty and
justice and civilization as a “ mongrel ” banner, and he attaches
to the league of nations the unmerited stigma of “ Bolshevism ”
as illustrating wicked “ internationalism ” as contrasted with
his own admirable “ Americanism.”
Mr. President, all good Americans believe in Americanism in
its highest and purest and truest meaning.
Mr. President, a man can be a good citizen of a town, of a
county, of a state, of a nation, and of a world without incon
sistency. I-Ie can love his home and be utterly devoted to his
own nation, and be a glorious American, and yet be generously
disposed and favor international justice and liberty and good
neighborhood, and the means of attaining them.
The galleries always applaud when a Senator strikes an
oratorical pose and thunders forth his sturdy Americanism,
and the Senator from Massachusetts did not fail to strike this
popular chord. The Senator gloriously sa id :
Call me selfish if you will, conservative, or reactionary; but an
American I have remained all my life. I can never be anything else
but an American, and I must think of the United States first.
Fine! This is magnificent. The galleries bursted with ap
plause, but, Mr. President, in .Tune, 1915, at Union College, the
Senator was still an American whether “ selfish, conservative,
or reactionary,” and he told the world then in language clear
and forceful—and I use liis own words—that—
Nations must unite as men unite to preserve peace and order.
He stated that nations must be so united as to be able to say
to any single country—
You must not go to war.
F in e! This is splendid, but a flat contradiction o f his present
attitude that nations must not unite to preserve peace and
order; that they must not be so united as to say to any single
country “ You must not go to war.”
The Senator’s Americanism at Union College did not prevent
his making an earnest argument in favor o f a league of nations,
and when he made the argument in favor o f a league at Union
College it was fine Americanism. It was fine Americanism
when Theodore Koosevelt made the same argument in receiving
the Nobel prize at Christiania in 1910. President Taft shows his
fine Americanism when he loves America and loves his fellow men
throughout the world and stands for a program of assured peace
through the honest cooperation of all the great democracies of
earth.
135555— 19825
9
It is fine Americanism when the Senator from North Dakota
[Mr. M c C u m b e r ] and other patriotic Republicans and Democrats
stand on this floor and urge a league of free nations
The Senator from Massachusetts must not attempt to monop
olize Americanism, for selfishness or partisanship in foreign
affairs does not describe Americanism.
When Germany and Austria and Bulgaria and Turkey the
great military dynasties, were at the height of their power the
Senator from Massachusetts argued in favor of nations unitinto prevent war. He was willing to admit military dynasties to
a league o f nations to prevent war, but now that the military
dynasties have been humbled to the dust, now that brute force
based on the doctrine that might makes right has been utterlv
overthrown by the honest peace-loving democracies of the
world, the Senator rises up as the chief opponent of what he
himself generously argued as a good American in 1915
Mr. President, am I going too far if I appeal from “ Philip
drunk to Philip sober ” ?
1
The one great gigantic fact of all history has occurred to
assure and make possible the future peace of the world and to
make it comparatively easy to establish peace, and that is the
overthrow of arbitrary power, the overthrow of the Hohenzollerns, the Hapsburgs, the Romanoff and their brood of princes
grand dukes, et id omne genus, and the establishment of the
great doctrines of liberty, justice, and self-government and the
establishment of the overwhelming power of the democracies
of the world.
The Senator from Massachusetts fails to recognize the one
great event which makes this war the most notable war of all
history and which alone opens wide the door to permanent
world peace.
^
aueui
The Senator from Massachusetts having argued that it
was un-American to recognize this “ mongrel ” flag of the free
nations of earth, proceeds, absurdly enough, to argue that he
and his colleagues will accept the “ mongrel” flag and all its
evils provided reservations be inserted in the ratification
which do not really change the meaning o f it, but would pro’
yentQany friendly ally in the future from changing the meanThe Senator does not recognize any difference between the
legal and moral obligations of the league. He says treaty obli
gations are merely moral obligations, and with tins view I am
in entire accord. But, Mr. President, an interpretative resolution
separate from the resolution of ratification o f the rteatv inter
pioting the meaning of the covenant would protect the United
States from the possibility of any future charge of moral delim
quency by any nation on earth, and prevent any nations, friendly
oi otherwise, from charging that the United States refused to do
v iat it agreed to do. The only difference between the effect
° a resolution separate and apart as an interpretation and an
amendment or reservation in the face of the ratifying resolu
tion is, that the latter would require the action of all other
nations, might produce serious confusion, would certainly postpone final action for some months at a time when prompt action
in declaring peace is of the highest importance, while a resolution of interpretation would avoid these obvious objections
lliore is_ one possible
partisanadvantage in putting amend:
l o o 0 0 0 ---- l o o ^ O
rr1,.•
v .
ments and reservations on the proposed league. It might to
that extent discredit with some of our own people and with
those of foreign countries the President of the United States
and the members of the peace conference who represented the
United States at Paris.
Is it un-American if I should feel unwilling to discredit our
representatives, either at home or abroad, unnecessarily? The
delay in ratifying the peace treaty is paralyzing our export
trade. Our favorable balance of trade fell off .$400,000,000 in the
month of July in 31 days. Our foreign-exchange market has
gone into complete demoralization awaiting the determination
o f the conditions of peace.
We hear no proposal from Great Britain or France or Italy
or Belgium or Japan for putting amendments into this proposed
league. They do not have any fear that the friendly nations of
the earth, based on self-government, liberty, and justice will mis
interpret the covenant to their disadvantage. None of them have
imagined that they were relinquishing their rights of self-govern
ment or subjecting themselves to the coercion of a league of
foreign nations. On the contrary, they wrote into the league
section 10, for the protection of the territorial integrity and ex
isting political independence of every nation. This covenant was
drawn up by the ablest men in the world—if the Senator from
Massachusetts will pardon the apparent neglect—chosen men
representing all of the great nations. It was subjected to the
closest scrutiny. It carries out and makes possible the aspira
tions of The Hague conventions with the addition of methods for
conciliation and arbitration and disarmament and means for
protecting the territorial integrity and existing political inde
pendence of nations by boycott, blockade, and even armed force,
which will assuredly rarely, if by any possibility ever, be neces
sary.
This should not be made a partisan question. The Senator
from Massachusetts taught me the sound doctrine in one of the
great maxims of the United States Senate, which has been hon
ored for a hundred years, and that is—
Party lines cease at title water.
Is it un-American if I appeal to the honorable Senator to sus
tain this venerable and worthy maxim o f the Senate? Why does
he, before the treaty arrives, sign his round robin? Why does
he marshal his political followers as far as he can in hostility to
the aspirations of mankind? The world is weary, utterly weary,
of war. The industries, the commerce o f the whole world have
been profoundly shaken by the gigantic destruction and waste
of this war.
The cost of living because of this Great War has become pain
ful and irksome to the people of the whole world. It is of the
most urgent importance that we get back to the basis of peace,
in order that we may address ourselves to solving the problem
of the high cost of living in this country, which is greatly per
plexing to the Congress as well as the people at home.
The unhappy people of Europe are struggling to reestablish
themselves. Millions of men, women, and children have died in
this great struggle to establish on earth human liberty and the
right of the people of the earth to self-government. Side
by side in the hills and in the valleys of France lie thousands
of our beloved sons with the cherished youth of Great Britain,
i
13f)55o— 19S 25
A
J
11
.
'
r
Belgium, France, Italy, and of our other allies. They (Med in a
war whose great purpose was to overthrow arbitrary power to
establish government upon a sound basis of the consent of the
governed, to establish forever “ Peace on earth, good will toward
men.” Surely it is not un-American that we should desire
that their infinite sacrifice should not be in vain. Honest
democracies do not want war, nor the cost of war, nor to have
their children die in battle. The people who pay the cost of
the war, who send their sons to die upon the battlefield, who pav
the taxes of war, and control democracies will not permit wVr
that can possibly he avoided.
1
Perhaps without a league the future peace o f the world
might be accomplished, hut a league o f free nations of the
earth, established with the power to say to outlaw nations
“ You must not go to war,” as the Senator from M
assachusetts
so finely argued in .Tune, 1015, at Union College, will secure and
make certain the ends for which the youth of the world was
sent to the battle fields to die.
J n°t he permitted to appeal to the better Americanism
ot the Senator from Massachusetts not to throw himself across
the path of human progress and world peace? He is not
(as he thinks) waging a war against Woodrow Wilson- he is
waging a war against the desires and the hopes of all mankind
V e have
the sons of France, Great Britain, and Italy
and °ur other great allies in breaking down the military antoclacres o f Europe. Are we not in honor bound to stand by our
allies until the new governments, the new democracies o f Eu
rope, are established and made stable by the stabilizing force of
1 H rnamzed t’owei'S of mankind that league to preserve peace?
^
rxoorul W ^CUttle
ieT
cowards and cravens from the wounded
peoples of Europe before the nations born of this war can balanee themselves and be at peace and a blessing to themselves
and to the world when with the league of the great democracies
we can easily assure them stability and peace’
Is it un-American to carry out our implied obligations to Em
rope?
Alt. I resident, the honorable Senator from Massachusetts in
terprets article 10 to mean that the council in adrisinff the means
ro be employed to preserve the territorial integrity and the ex
isting political independence o f member nations will be author
ized to send American troops to the ends of the earth in every
petty quarrel that might arise anywhere in the world
inT.hL S,T at0i urges that we w,nil(1 have a “ moral ” obligation
H *a£e ? e
J
the “ moral ” obligation being as Srong
a. ,i i<rtai obligation we would lie obliged to obev or be guilty of
a broach ° f our moral obligations, a thing a b S u te l? ineom
Thf> f° f tbe anstere Senator from Massachusetts,
^
the Senator greatly enlarges upon this great, unhappy thought
ArnK f U naa"hiation he set's our soldiers sent into central
m
S
vice^n? th I,rotect the Sultan o f Hejaz under the irresistible ad
vice of the council.
with tbe‘S en t With tb? establishment of a league of nations,
ZZl ' Z; gTeat <
]fiI"ocracles o f the world In honest cooperation
soldiers'6
!>roviSKms which will prevent war or the need of
For example:
Every means possible for conciliation.
IS o o o S — 1982u
Every means for arbitration, and at last if a nation be deter
mined to be an outlaw nation in violation of the organized
opinion of mankind, and then invades the territorial integrity of
a member nation and its existing political independence, there
is a penalty so gigantic that no nation would dare to face it.
That is, a world boycott, a complete separation of that outlaw
nation and of its nationals from any commercial, financial, postal,
telegraphic, or any other means of communication with the citi
zens of other nations.
No nation could stand this. But this is not all. It is only on
the extremely remote if not impossible contingency that this
would not suffice to restore an outlaw nation to sanity, then and
then only would it be necessary for the council to “ advise”
means of military and naval coercion.
It is to be assumed by men of common sense and common hon
esty that the council in such a remote contingency would give
sensible and honest advice and that the great, honest, peaceloving democracies of the earth would act in good faith in regard
to the advice.
If in the extremely refnote contingency which might thus
arise the still more unlikely occurrence should take place that
the advice should prove foolish or tyrannical, no nation would
be compelled as a “ moral ” obligation to observe idiotic advice.
The Senator from Massachusetts is unduly alarmed. He is
seeing ghosts which do not exist.
Article 10, pledging every member nation its territorial in
tegrity and existing political independence, is vital to the peace
of the world, and under no circumstances should this assurance
be removed from the treaty or modified.
The Senator finds an insuperable difficulty in article 15 because
it provides that any dispute may be submitted to the council,
and the council might submit it to the assembly, and the assem
bly might make a “ report ” unfavorable to the United States,
and the dispute might be on the question of immigration with
Japan. Terrible! The answer is, first, that no such dispute
could arise, because it would be an invasion of our existing
political independence and territorial integrity, and, second, if
it did arise, in spite of the article 10, in spite of the preamble to
the treaty, and the council did not throw it out of court be
cause it was “ solely within the domestic jurisdiction ” of the
United States, and, finally, if the entire assembly made a report
against the United States, nothing would follow, because noth
ing could follow under article 15, except that Japan might wage
a war, and she can do that now. Nothing would follow, because
there is nothing in the treaty to compel the enforcement of the
opinion or report of the assembly in that particular.
It is left to the parties unable to settle their controversy
under the report then to resort to war, in which the world will
take no part except conciliation, world opinion, and world in
fluence. The report is not made enforceable by article 15. Such
a report is only of the same force as a report by the council,
wherein the members agree not to go to war against a member
who complies with the recommendations of the report. If the
council fails to reach a unanimous report the members reserve
liberty of action.
We would not be any worse off if the three times impossible
should happen, as imagined by the Senator, for Japan could
135555— 10825
)
13
make* war on ns now if Japan wished to do so. Bedde* that
we could withdraw from the league of nations if we did not
hke the administration of it. There is not the slightest d o s s *
bdity, however, that any nation will- ever withdraw from tftfer
lengue once it has entered into it, because this league will work
to perfection, giving a forum, a meeting place, where the na
tions of the world can come together and use there the commonsense and common honesty of the human race, and that will he
found' sufficient.
The Senator is seeing ghosts, which were not visible at Union
College. The* Senator declares that if other nations are willing
to subject themselves to the domination of a league* he w ill
never, never consent for the United States to be dominwteil by
The Senator need not trouble himself. Other nations are
not willing to subject themselves to the domination of a league
but enter into the league for the purpose o f protecting them
selves against the domination of outlaw military tribes or
nations who are not yet sufficiently advanced in civilization to
appiTcmte the blessings of liberty and justice and self-govemTlie Senator is very much frightened about the Monroe doctrme, and it is extremely difficult for me to believe in the sin
cerity of those who argue the Monroe doctrine will be weakened
by the proposed covenant which explicitly recognizes it -nd
implicitJy confirms it by every principle of the proposed;
The Senator is terribly afraid that we can not withdraw
.
' e thinks that we could not withdraw except by unanimou.s note, that all our international ob liga tion s and all oblim-
tions under the covenant had been fulfilled. It never crossed
the mind of any honest man who had part in framing this league
covenant that any member could be refused the right to with
draw on any such ground'. Such an interpretation is not only
contradicted by the President of the United States but is absurd
Of course, a nation in withdrawing, should withdraw and discharge its obligations at the same time. But the Senator proves
too- much. He discovers that it requires unanimous action' to
withdraw.
If it weie am affii matii c action of the league (which it is not)
it might he true—for an affirmative action of the league does
require unanimous consent—but this discovery entirely destroys
the long argument which the Senator makes about the league
domiaatuig the United States, interfering with immigration
tar ills, and so forth, as no one is stupid enough to contend a
'
S p S S c*
tlM aSSembl5' t0 * » » m W w i t h any nation!
, ^
f ^ o r greatly enlarges upon the United States meddling
1 1 the internal affairs of the nations of Europe. There is notheaf r G of ,uations which justifies this notion of the
Senator from Massachusetts. On the contrary, the 10th article
prevents any interference with the existing political independ
ence of the nations. It was necessary, in setting up the new
Governments of Europe, made up out of the heretofore subject
poples of Austria and Germany, to provide the means by which
they should be established, including Turkey and Bulgaria: hut
beyond this (he tieaty does not go, and in this the covenant of
the league takes no part.
135555— 10825
Mr. President, I favor the liberty and freedom of all peoples
sufficiently advanced to govern themselves or under mandatories
where backward and not yet qualified. I wish to see Ireland
free and the Philippines. I wish to see Egypt and Porto Rico
fr e e ; I wish to see India and Korea free to govern themselves,
and given honest, faithful help to accomplish this end in safety
and peace.
The members of the league, article 23 (b ), “ undertake to
secure just treatment of the native inhabitants of territories
under their control.”
What is the just treatment referred to? It can be nothing less
than liberty, freedom, and self-government, such as was involved
in the proposals of President Wilson as a basis of the armistice,
and which was accepted by all our great allies.
We set the example in Cuba, we are following it in the Philip
pines, we must perfect it in Porto Rico, and we must use our
influence in having this element of justice carried out throughout
the world undeterred by commercial or industrial selfishness.
Mr. President, the league of nations in this covenant is a
league between the great, honest, peace-loving democracies and
free nations of the whole earth.
Its moral influence for peace and good will toward men is
the greatest power ever invoked for the peace, the happiness,
the prosperity of mankind. It not only proposes peace; it pro
vides the most abundant means and mechanism by which to
accomplish it. It provides the completest means for the con
ciliation of disputes and the settlement of controversies by
arbitration.
It provides for disarmament and the reduction of the military
and naval forces of mankind down to police purposes.
It puts an end to military dynasties. It establishes the great
principles of liberty, justice, and the self-government of the
people of the whole world.
On such principles it safeguards the backward peoples of the
world and provides a means for leading them forward to civiliza
tion without exploitation.
It provides for the protection and preservation of the terri
torial integrity and existing political independence of every
nation.
It provides the means to enforce the rights of member na
tions against aggression.
It establishes in the council and in the assembly a meeting
place where all the nations of the world may in one chamber
communicate with each other freely and openly.
It puts an end to secret treaties and political intrigue and
military dynasties and the doctrine of divine right and the doc
trine that might makes right and establishes on earth the rule
of conscience, the rule of morality, the rule of international
decency and justice and good neighborhood. It is not a mere
peace of idealism based on a rosy dream. It is a real living,
vital force, born on the battle field out of the blood of all of
the nations of earth. The world will not go back. It is moving
forward under the leadership of God and the everlasting doc
trines of Christ. Let the Senator from Massachusetts beware
of throwing himself across the path of the righteous judgment
of mankind.
135555— 19825
The Peace Treaty and League o f Nations
A PLEA FOR RATIFICATION
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN T H E
SENATE OF THE UNITED STATES
MARCH 9, 1920
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O F F IC E
1920
169435— 20591
SPEECH
OF
I I O N . R O B E R T L. O W E N .
Mr. OWEN. Mr. President, I am in favor of passing the
tieaty immediately and am quite ready to support the resolu
tion of ratification either with “ interpretative reservations,”
agreeable to President Wilson, or thu “ Hitchcock reservations,”
or the “ Lodge reservations.” The differences are not suf
ficiently important to justify delay in declaring peace.
The country, with just cause, overwhelmingly demands it,
and is incensed with all those who .delay it.
The treaty of peace should pass at once because—
1. Our laws should be on a legal peace basis—not on a war
basis. The reduction of the high cost of living demands it. The
social unrest in our country demands it.
2. All rules and regulations based on war and all war boards
and commissions should be revoked. With peace comes automatic repeal of war measures.
3. Our relations with enemy nations are definitely fixed by
the treaty, determining our rights ac a Nation and as citizens.
Billions of dollars are involved, including all alien property,
Americans’ properties in alien enemy countries, all war damages’,
and our trade, social, and political relations.
4. The ratification will stabilize Europe and the reconstruc
tion of the nations. It will enable them to pay us, and thus
lower our taxes and lower our high cost of living thereby.
5. The more rapid restoration of Europe’s productive activi
ties means their self-support, larger exports to us, greater sup
plies for Europe and for us.
6. It will cause the rise in value of European currency and
international exchange, and restore many impaired fortunes.
^ 7. It will strengthen the prestige and standing of the United
States, and improve our political, social, and trade relations
with all other nations.
8. It will help to end the starvation, social unrest, and growth
of radical socialism and bolshevism in Europe.
The covenant of the League of Nations ought to pass, because—
(a) It provides for a mechanism to settle all international
disputes, (1) by diplomacy, (2) by conciliation, (3) by arbitra
tion, (4) by a court of international justice, (5) by the council,
(6) by the assembly, (7) by delay, (8) by agreeing to respect
the territorial integrity and existing political independence of
member nations, and (9) to preserve it, (10) by boycott, (11)
by blockade, and, if necessary, (12) by military and naval force.
(b) (14) It provides for gradual disarmament on land and sea,
to abate the high taxes of preparation for war. (15) It ends
conscription and (16) abates private munition making. (17)
2
'
160435— 20591
U
3
It ends secret treaties and (18) gives publicity to all war prep
arations. (19) It provides a world forum where subject peoples
can bring their grievances. (20) It establishes a world assembly
where all nations may meet in conference and develop the princi
ples which will promote the peace and happiness of mankind.
(21) It ends military autocracies and establishes for all time
the rule of civilized democracies. It ushers in a new great era
where the diligence, providence, and creative genius of mankind
can fully function under the blessings of peace and liberty.
REASONS
FOR
D E F E A T IN G
TREATY
NOT
J U S T IF IE D .
After 12 months of discussion the only irreconcilable dif
ference remaining unadjusted between the President, Senator
H itch co ck , and Senator L odge appears to be over article 10,
which provides:
“ The high contracting parties undertake to respect and pre
serve as against external aggression the territorial integrity
and existing political independence of all States members of
the League.
“ In case of any such aggression, or in case of any threat or
danger of such aggression, the executive council shall advise
upon the means by which the obligation shall be fulfilled.”
President Wilson, Senator H itc h c o c k , and Senator L odge are
in accord on the United States undertaking “ to respect ” the
territorial integrity and existing political independence of mem
ber Nations, but differ on the United States undertaking “ to
preserve ” the territorial integrity, and so forth.
All three agree that the United States undertake “ to respect,”
the territorial integrity, and so forth. President Wilson insists
that the United States also undertake “ to preserve” the terri
torial integrity, and so forth, subject to interpretative reserva
tions.
Senator H itchcock agrees that the United States undertake
“ to preserve,” but not to use military or naval forces or the
economic boycott “ to preserve ” unless Congress authorizes.
Senator L odge refuses to agree that the United States under
take “ to preserve ” by any means whatever, unless Congress
authorizes in each particular instance.
All the world agrees “ to respect and preserve,” President
Wilson and Senator H itchcock agree “ to respect and pre
serve,” Senator L odge “ to respect ” but not “ to preserve ” un
less Congress authorizes in each particular instance.
It is my opinion that with the overthrow of all the military
dynasties and the world-wide establishment of democracies, and
the League of Nations with its covenanted safeguards, the
world’s peace is assured even if the United States remains out.
But to keep the United States out of the league be
cause of the very small differences between the President
and Senator L odge would be defeating a very great end for a
very small end. They agree on 99 per cent of the German
treaty and are liable to destroy it over a 1 pdr cent difference.
To keep the United States out of the moral leadership of man
kind would be a great wrong. To defeat the treaty would be a
national calamity and would discredit the United States
throughout the world.
If the President’s view prevailed on article 10 no declaration
of war or voting of war supplies could be possible without con-
1 G 9 4 3 5 -— 2 0 5 9 1
gressional action, and Congress would do what was morallv
nght without the supposed moral coercion of article 10 “ to ore-
S
« S ; . S ^ » ras Congress dw
*^en .a !;o r
L odge’s
v ie w
p r e v a ile d
«
th e
sam e
* Culm Ena
r e s u lts
w o u ld
a r t i c le i o T h l
T n r iu l?u e n c e o f t h e s p e c ific o b li g a t i o n o f
a i t u l e 1 0 . I h e m o r a l o b li g a t i o n w o u l d e x i s t a n y w a y t o r e s t r a i n
an international outlaw from invading peaceful territorv and
upsetting the peace of the world.
tennory and
I agree with President Wilson in believing the United States
S ? i! « er °/‘ equal terms and with filial mutual obligations
with olhei nations and not appear to distrust them or seem to
seek the benefits of the treaty without being willing to meet our
equal share of its burdens. I prefer article 10 as it is but I
am piepaied, for the sake of passing the treaty and getting the
advantages o f it, to yield to the demand of a majority of mv
colleagues m the Senate. The views of the majority of the
Senate are entitled to respect.
J
*
Ult
I lie country unhappily believes the differences are not recon
ciled because of personal and partisan pride.
, , refuT t0 be a Party to the defeat of the treaty or to its
se
uelay. I am ready to support it in any form and follow any
hader who leads to its ratification, and I will not follow any
leader who is leading to its defeat or delay.
y
Resident, the remarks which I have just delivered were
onr v T f ?in '^Jarch 1 , before I was furnished with a mimeographed
f
o I t li e 1 resident s letter to Senator H i t c h c o c k of March 8
and are subject, therefore, to that understanding where I seem
to have misapprehended the President’s position
It appears now to be the wish of the President to have his
Iem ociatic associates vote with the irreconcilable opponents of
Pie treaty, defeat the resolution of ratification, and make the
treaty without reservations ” the issue of the next election.
1 should regard this as a great injury to our domestic interests
Ihe delay in establishing peace has helped to raise instead of
helping to lower the cost of living. The defeat of the treaty
would injure American prestige abroad.
y
}Yith the treaty, “ with or without reservations,” as the cam
paign issue, the discussion of our vital domestic problems of reT £ : ; r iO
I^ he ?osl of livin& monopolies and profiteering, and
. o ioitn will be obscured as behind a smoke screen to the benefit
of those selfish interests which have been taking unjust ad
vantage of our people.
It will be impossible at the next election to elect a Senate
favorable to the treaty without reservations, and every vvell1 Un k.nows i,:’ 80 that after the campaign the
1 I,
< )e U 1,0 .b?tter P°sition relatively than it is now, and
<
!
villi the treaty without reservations” as the issue the Demociatic I arty would have a ruinous handicap.
As far as I am concerned, as an American Senator, who for
vei y many years have ardently and strenuously served mv partv
and my country and supported the administration on all suitable
occasions, I decline to assume the slightest responsibility for the
delay or the defeat of the treaty.
*
160435— 20591
THE EGYPTIAN QUESTION
EXTRACTS FROM
THE CONGRESSIONAL RECORD
INSERTED BY
HON. ROBERT L. OWEN
OF OKLAHOMA
IN THE
SENATE OF THE UNITED STATES
THURSDAY, OCTOBER 3 0 , 1 919
WASHINGTON
GOVERNMENT PRINTING OFFICE
1919
147311— 20000
THE EGYPTIAN QUESTION.
Mr. OWEN. Mr. President, some days ago, October 15, I
Introduced a resolution bearing on the treaty of peace with
Germany. I ask to have inserted in the R ecord a memorandum
of a letter from King George to the Sultan of Egypt, which I
will not take the time to read, together with a cablegram to
Mahmoud Pasha from Mahmoud Soliman Pasha, which I shall
not take the time to read, hearing upon the same question, to
gether with some data submitted by the Egyptian delegation
here, which I ask, without reading, to have also printed in
the R ecord,
There being no objection, the matter referred to was ordered
to be printed in the R e c o r d , a s f o l l o w s :
“ Resolved, That the United States in ratifying the covenant
of the league of nations does not intend to be understood as
modifying in any degree the obligations entered into by the
United States and the Entente Allies in the agreement of No
vember 5, 1918, upon which as a basis the German Empire laid
down its arms. The United States regards that contract to
carry out the principles set forth by the President of the United
States on January S, 1917, and in subsequent addresses, as a
world agreement, binding on the great nations which entered
into it, and that the principles there set forth will be carried
out in due time through the mechanism provided in the cove
nant, and that article 23, paragraph (b ), pledging the members
of the league to undertake to secure just treatment of the
native inhabitants under their control, involves a pledge to
carry out these principles.
“ The protectorate which Germany recognizes in Great Brit
ain over Egypt is understood to be merely a means through
which the nominal suzerainty of Turkey over Egypt shall be
transferred to the Egyptian people and shall not be construed
as a recognition by the United States in Great Britain of any
sovereign rights over the Egyptian people or as depriving the
people of Egypt of any of their rights of self-government.
DATA COMPILED BY EGYPTIAN DELEGATION.
Shall
1
.1
R i g h t ok M i g h t
P r e v a il ?
“ Egypt is a country of immense wealth. It has millions of
acres o f agricultural land greater in value per acre and in pro
ducing power than any other country in the world. The seizure
of Egypt by Great Britain adds to Britain’s enormous posses
sions an area of 350,000 square miles and a population of
13,000,000 people. The value o f the natural resources so seized
is beyond computation.
“ Egypt is one compact whole—one nation, one language.
The character of the people, their conduct, their habits, their
sympathies, and their inclinations are the same throughout that
country. Because o f geographic situation, however, Egypt has
attracted the avarice of colonizing powers more, perhaps, than
any other country in the world. In 1798 the French under
Napoleon invaded Egypt. In 1801 the French were expelled
2
14T311—20090
from Egypt. In 1807 Great Britain attempted to invade Egypt,
but was ejected by Hie Egyptian Army.
“ Egypt continued to be a Turkish Province until 1831, when
war broke out between Egypt and Turkey, and the Egyptian
Army was victorious. Constantinople would have fallen to the
Egyptians, but Great Britain and France interfered in order
to preserve tlie balance of power and the Egyptians were com
pelled to give up the full fruits of their victories.
“ By the treaty of London of 1840-11 Egypt became autono
mous, subject only to an annual tribute to Turkey of about
.$3,000,000. The Government o f Egypt could maintain an army,
contract loans, make commercial treaties, and enter into inter
national agreements. For all practical purposes Egypt was
independent and free.
“ In 1882 Great Britain occupied Egypt ostensibly to protect
the Khedive against the movement for popular government, and
continued to occupy the country, against the protest of the Egyp
tians, under the protext of protecting the people from the Khedive.
“ The British Government from the time of occupation up to
the beginning of the recent war promised to withdraw the
British troops from Egypt. Gladstone, when prime minister,
said, ‘ If one pledge can be more solemn and saci'ed than an
other, special sacredness in this case binds us to withdraw the
British troops from Egypt.’
“ Lord Salisbury, when prime minister in 1889, solemnly
assured Egypt and the world that Egypt would never be placed
under a British ‘ protectorate’ or annexed by Great Britain.
“ Great Britain had agreed by the treaty of London of
1840-43 to protect the autonomy of Egypt, and in the AngloFrench agreement of April 8, 1904, Great Britain declared that
it had no intention of altering the political status o f Egypt.
“ Afer the beginning of the war, and on December 18, 1914
Great Britain deposed the Khedive and appointed a sultan of
her own choosing to the throne o f Egypt. On the same date
Great Britain proclaimed the so-called protectorate over Egypt,
announcing, however, at the same time that it was merely for
the period of the war and only a step toward the independence
of Egypt.
“ King George, in a letter which was widely circulated
throughout Egypt and which was published in the London
Times of December 21, 1914, said:
“ ‘ * * * 1 feel convinced that you will be able, with the
cooperation o f your ministers and the protection of Great
Britain, to overcome all influences which are seeking to destroy
the independence of Egypt, ■ * *.*
■
■
I bis change of status being announced at the time as a
merely temporary war measure, was assumed by the Egyptians
to. be such. The Egyptians with absolute unanimity took sides
with the Allies and served to make, as they believed, the world
safe for democracy and for the right of national self-determina
tion in all peoples.
“ When the armistice was signed the Egyptians rejoiced in the
thought that the day of their deliverance had come, and that
henceforth they would enjoy that right of national self-deter
mination proclaimed by President Wilson. A commission was
appointed by the Egyptian people to attend the peace conference,
where their independence and sovereignty could be consecrated
and acknowledged by the powers.
147311—20090
<1
i 'M'
In violation of its pledges of independence to the Egyptian
people, and regardless of the fact that the Egyptian people had
served and sacrificed in the allied cause, Great Britain arrested
four of the leading citizens of Egypt, who had been selected by
the Egyptian people to go to Paris, and these four were torn from
their homes without warning and deported to Malta, where they
were thrown into a military prison.
“ When the Egyptian people learned of this act o f perfidy on
the part of Great Britain their indignation was intense. Na
tional self-determination demonstrations were held throughout
Egypt. Great Britain answered these demonstrations for na
tional self-determination, the principle for which Great Britain
had ostensibly fought in the war, by firing machine guns into
crowds of these peaceable and unarmed, liberty-seeking people,
killing more than a thousand and wounding vastly more.
“ Egyptians who dared to assert in public that Egypt should
have the right of national self-determination were put in prison.
The cry for liberty by an Egyptian was' answered by British
military punishment.
m
“ If present conditions are permitted to continue, liberty is
dead to Egypt, and the right of self-determination to all peoples,
for which Americans believed they were fighting, has been made
a hollow mockery.
“ Gen. A Henby finally, by force of Egyptian public opinion, ad
vised the British Government to permit the commission to pro
ceed to Paris. When the commission reached Paris they asked
for a hearing before the peace conference. This was denied
them. They wrote to President Wilson and asked for a con
ference with him. Their appeals were in vain.
“ Some days after the commission reached Paris the so-called
protectorate of Great Britain over Egypt was ‘ recognized.’ The
holding o f Egypt by Great Britain is not a protectorate in the
legal sense of the word, but under guise o f a protectorate Great
Britain is holding Egypt to-day as a subject and conquered
nation.
“ The approval o f this so-called protectorate would be accepted
by the British Government as approval of the present holding of
Egypt by Great Britain as spoils of war and would rivet the
chains of subject slavery upon the Egyptian people.
“ In a statement issued by the British Embassy at Washington,
September 2, 1919, and which was published in the daily press,
the embassy stated:
“ ‘ Great, Britain has carefully avoided destroying the sov
ereignty of Egypt.’
“ A few days later the British foreign office in London gave
an interview to the International News Service, claiming to
have succeeded to Turkish nominal suzerainty over Egypt.
Great Britain is claiming both a protectorate and a sovereignty
over Egypt at the same time.
“ Great. Britain is holding Egypt to-day not by right but
by might of military force. Great Britain’s seizure of Egypt
is out of keeping with the world’s new temper. Only by the
exercise of the gospel of military force can the continued
holding of Egypt by Great Britain be maintained. Only in
violation of its sacred pledges and treaty obligations can Great
Britain assert dominion over the people of Egypt.
“ On November 10, 1914, Lloyd-George in a speech called the
world to witness the utter unselfishness of their part in the
147311— 20090
i)
war. ‘ As the Lord 1lvel.li,’ lie declared, ‘ England docs not
want one yard o f territory. We are in this war from motives
of pure chivalry to guard the wealc.’ Shall Egypt be handed
over to Great Britain in violation of the great principles for
which Americans, Egyptians, and the Allies fought? How can
it be justly said that Egypt is outside the realm of the prin
ciples of the 14 points and that Great Britain may deny the
right of self-determination to Egypt?
“ The Egyptian people are liberty loving and peaceful. They
have not interfered with other nations and they ask now that
Great Britain not be allowed to destroy the inalienable right
of the Egyptian people to liberty, and the right to have their
own government, controlled by their own people.”
BRITISH PLEDGES.
* -*u May, 3882, a British fleet appeared before Alexandria.
’
Jn June, 1882, a serious disturbance took place in Alexandria,
and a number of Europeans were killed. On July 11 and 12,
1882, Alexandria was bombarded by the British fleet and Brit
ish soldiers began to occupy Egypt. Great Britain pledged the
Egyptian Government and the world that this occupation would
be only temporary. The solemn pledges to this effect made by
England are evidenced by the following documents:
“ 1. Lord Granville’s dispatch, November 4, 1 8 8 1 (Egvnt
No. 1 (1 8 8 2 ), pp. 2, 3), said:
’
M ’
“ ‘ 1'lie policy of Her Majesty’s Government toward Egypt
has no other aim than the prosperity of the country, and its
full enjoyment of that liberty which it has obtained under
successive firmans of the Sultan. * * * it can not be too
clearly understood that England desires no partisan ministry
in Egypt. In the opinion o f Her Majesty’s Government a
partisan ministry founded on the support of a foreign power
or upon the personal influence of a foreign diplomatic agent’
is neither calculated to be of service to the country it admin
isters nor to that in whose interest it is supposed to be
maintained.’
“ 2. In the protocol signed by Lord Dufferin, together with
the representatives of the five other great powers, June 25
1882 (Egypt, No. 17 (1882), p. 38), it was provided:
“ ‘ The Government represented by the undersigned engaged
themselves, in any arrangement which may be made in conse
quence of their concerted action for the regulation o f the
affairs of Egypt, not to socle any territorial advantage nor any
concession o f any exclusive privilege, nor any commercial ad\antage ioi their subjects other than those which any other
nation can equally obtain.’ [Italics ours.]
“ 3. Sir Beauchamp Seymour, in a communication to Khedive
lewfik, Alexandria, July 2G, 1882, published in the Official
Journal of July 28, 1882, said:
I, admiral commanding the British fleet, think it opportune
to confirm without delay once more to Your Highness that the
Government of Great Britain has no intention of making tlic con
quest of Egypt, nor o f injuring in any way the religion and lib
erties of the Egyptians. It has for its sole object to protect Your
Highness and the Egyptian people against r e b e l s [Italics
ours.]
1 4 7 3 1 1 - 20000
:' 1
I
1
their own affairs. * * * We believe that it is better for the
interests of their country, as well as for the interests of Egypt,
that Egypt should be governed by liberal institutions rather
than by a despotic rule. * * * We do not wish to impose on
Egypt institutions, of our own choice, but rather to leave the
choice o f Egypt, free, * * * . It is the honorable duty of
this country to be true to the principles of free institutions,
which are our glory.’ [Italics ours.]
“ 5. The Right Hon. Mr. W. E. Gladstone, in the House of
Commons, August 10, 1882, said:
“ ‘ I can go so far as to answer the honorable gentleman when
he asks me whether we contemplate an indefinite occupation of
Egypt. Undoubtedly of all things in the tcorld, that is a thing
which we lire not going to do. It would be absolutely at vari
ance with all the principles and views o f Her Majesty’s Govern
ment, and the pledges they have given to Europe and with the
views, I may say, of Europe itself.’ [Italics ours.]
“ 6. Lord Duiferin’s dispatch, December 19, 1882, Egypt No.
2 (1883), page 30, stated:
‘ “ In talking to the various persons who have made inquiries
as to my views on the Egyptian question I have stated that we
have not the least intention of preserving the authority which
has thus reverted to us. * * * It was our intention so to
conduct our relations with the Egyptian people that they should
naturally regard us as their best friends and counselors, but
that we did not propose upon that account arbitrarily to impose
our views upon them or to hold them in an irritating tutelage.’
[Italics ours.]
“ 7. Lord Granville, December 29, 1882, Egypt No. 2 (1882),
page 33, officially stated:
“ ‘ You should intimate to the Egyptian Government that it is
the desire of Her Majesty's Government to withdraw the troops
from Egypt as soon as circumstances permit, that such with
drawal will probably be effected from time to time as the se
curity of the. country will allow it, and that Her Majesty’s Gov
ernment hope that the time will be very short during which
the full number of the present force will be maintained.’ [Italics
ours.]
“ 8. Lord Dufferin’s dispatch, .February 6, 1883, Egypt No. 6
(1883), pages 41, 43, stated:
“ ‘ The territory o f the Khedive has been recognized as lying
outside the sphere of European warfare and international jeal
ousies. * * *
“ ‘ The Valley of the Nile could not be administered from
London. An attempt upon our part to engage in such an under
taking would at once render us objects o f hatred and suspicion
to its inhabitants. Cairo would become a focus of foreign
intrigue and conspiracy against us, and we should soon find our
selves forced either to abandon otir pretensions under dis
creditable conditions or embark upon the experiment of a com
plete acquisition of the country.’
“ 9. Again, at page 83, Lord Dufferin said:
“ ‘ Had I been commissioned to place affairs in Egypt on the
footing of an Indian subject State the outlook would have been
147311— 20090
r"
different. The masterful hand of a resident would have quickly
bent everything to his will, and in the space of five years we
should have greatly added to the material wealth and well
being of the country by the extension o f its cultivated area and
the consequent expansion o f its revenue; by the partial if not
the total abolition of the corvee and slavery; the establishment
of justice and other beneficent reforms. "But the Egyptians
would have justly considered these advantages as dearly pur
chased at the expense of their domestic independence. More
over, Iler Majesty’s Government have pronounced against such
an alternative., [Italics ours.]
“ 10. Mr. Gladstone, in the House of Commons August 6,
1883, said;
“ ‘ The other powers of Europe * * * are well aware of
the general intentions entertained by the British Government,
intentions which may bo subject, of course, to due consideration
o f that state of circumstances, but conceived and hold to be
in the nature not only o f information but a pledge or engaele
ment.’ [Italics ours.]
“ 11. Mr. Gladstone, in the House of Commons August !),
1883, said;
The uncertainty there may be in some portion of the public
mind has reference to those desires which tend toward the
permanent occupation of Egypt and its incorporation in this
Empire. This is a consummation to which we are resolutely
opposed and which we will have nothing to do with bringing
about. We arc against this doctrine of annexation; we are
against everything that resembles or approaches i t ; and we are
against all language that tends to bring about its expectation.
We are against it on the ground of the interests o f England *
we arc against it on the ground o f our duty to E gypt; ice are
against it on the ground of the specific and solemn pledges given
to the world in the most solemn manner and under the most
critical circumstances, pledges which have earned for us the
confidence of Europe at large during the course o f difficult and
delicate operations, and which, if one pledge can be more solemn
and sacred than another, special sacredness in this case binds
us to observe. We are also sensible that occupation prolonged
beyond a certain point may tend to annexation, and consequently
it is our object to take the greatest care that the occupation
does not gradually take a. permanent character. * * *
can not name a day and do not undertake to name a dav for
our final withdrawal, but no effort shall be wanting on our part
m m-rng about that withdrawal as early as possible. [Italics
lllsiwtc" ’ J,me 10- l8W - * * » • N° - 23
? er % j? ? t y ’s Government * * * are willing that the
. ■ ^ ' ™ 1 | troops shall take place at the beginning o f the
l
lle
jeer
provided that the powers are then of opinion that such
wuhdrawal can take place without risk to peace and order.’
•i .
* < Derby, in the House o f Lords, February 26, 1885
0, '
StllU *
From the first we have steadily kept in view the fact that
our occupation was temporary and provisional only. * * •
We do not propose to keep Egypt permanently. * * * n n
that point we arc pledged to this country and to Europe- and
147311—20090
• l
'
If a contrary policy is adopted it will not be by us.’ [Italics
ours.]
*
•
“ 14. Lord Salisbury, in the House o f Lords, June 10, 1887,
said:
“ ‘ It was not open to us to assume the protectorate of Egypt,
because Her Majesty’s Government have again and again pledged
themselves that they tooitld not do so. * * * My noble
friend has dwelt upon that pledge, and he does us no more than
justice when he expresses his opinion that it is a pledge which
has been constantly present to our minds. * * * It was un
doubtedly the fact that our presence in Egypt, unrecognized by
any convention * * * gave the subjects of the Sultan cause
for a suspicion which we did not deserve.’ [Italics ours.]
“ 15. Lord Salisbury, in the House of Lords, August 12,1889,
said:
“ ‘ When my noble friend * * * asks us to convert our
selves from guardians into proprietors * * * and to declare
our stay in Egypt permanent * * * I must say I think my
noble friend pays an insufficient regard to the sanctity of the
obligations which the Government of the Queen have undertaken
and by which they are bound to abide. In such a matter we
have not to consider what is the most convenient or what is
the more profitable course; we have to consider the course to
which we are bound by our oxvn obligations and by European
law.' [Italics ours.]
“ 16. Mr. Gladstone, in the House of Commons, May 1 1893
said :
“ ‘ I can not do otherwise than express my general concur
rence * * * that the occupation of Egypt is in the nature of
a burden and difficulty, and that the permanent occupation of
that country would not be agreeable to our traditional policy,
and that it would not be consistent with our good faith toward
the Suzerain power, while it would be contrary to the laws of
Europe. * * * I certainly shall not set up the doctrine that
we have discovered a duty which enables us to set aside the
pledges into which we have so freely entered. * * * The
thing we can not do with perfect honor is either to deny that
we are under engagements which preclude the idea o f an indefi
nite occupation, or so to construe that indefinite occupation as
to hamper the engagements that we are under by collateral con
siderations.’ [Italics ours.]
“ 17. The text of the Anglo-French agreement of April 8, 1904
provides:
“ ‘ t h e Government of His Majesty declares that it has no in
tention of altering the political status of Egypt.’
“ 18. Lord Cromer’s report, March 3, 1907,'Egvpt No. 1 (1907)
page 2, stated :
“ ‘ There are insuperable objections to the assumption of a
British protectorate over Egypt. It would involve a change
in the political status of the country. Now, in Article 1 of tiie
Anglo-French agreement of the 8th April, 1904, the British
Government have explicitly declared that they have no inten
tion o f altering the political status of Egypt.’
“ 19. In an interview with Dr. Nimr, editor of the Mokattam,
October 24, 1908, acknowledged as official by Sir E. Grey in
the House of Commons, Sir Eldon Gorst said :
“ ‘ It has been said that Great Britain proposes shortly to
proclaim the protectorate or the annexation o f Egypt to'th e
147311— 20090
i
0
British Empire. Will Sir Eldon Gorst permit me to ask him
whether this rumor is well founded or not? ’
“ Sir Eldon Gorst answered:
Tlic rumor has no foundation, and you may contradict it
categorically. Great Britain lias engaged herself by official
agreements with Turkey and the European Powers to respect
the suzerainty of the Sultan id Egypt. She will keep her en
gagements, which, moreover, she reiterated in 1004 at the time
of the conclusion of the Anglo-French agreement. England
stipulated in that agreement that she has no intention to change
the political situation in Egypt. Neither the people nor the
Government wish to rid themselves of these engagements.’
“ 20. Sir Eldon Gorst’s report, March 27, 1909, Egypt No. .1
(1909) , page 1, stated :
“ / There exists among the better-educated sections of society
a limited but gradually increasing class which interests itself
in matters pertaining to the government and administration of
the country. This class aspires quite rightly to help in bringing
About the day when Egypt will be able to govern herself without
outside assistance. This is also ihe end to which British policy
Is directed, and there need be no antagonism or principle be
tween the Egyptian and English reforming elements.’
“ 21. In the same report, at page 48, Sir Eldon Gorst said:
“ ‘ Since the commencement o f the occupation the policy ap
proved by the British Government has never varied, and its
fundamental idea has been to prepare the Egyptians for selfgovernment while helping them in the meantime to enjoy the
benefit of good government.’
“ 22. Sir Eldon Gorst’s report, March 20, 1910. Egvpt No. 1
(1910) , page 51, stated:
“ ‘ British policy in Egypt in no way differs from that fol
lowed by Great Britain all over the world toward countries
under her influence, namely, to place before all else the welfare
of their populations.’
“ 23. Sir Edward Grey, in the House of Commons, August
1914, said:
‘“ England stretches out her hand to any nation whose safety
or independence may be threatened or compromised by any
aggressor.’
“ 24. Former Premier Balfour, speaking for the Government
at Guild Hall, on November 19, 1914, declared:
“ ‘ We tight not for ourselves alone but for civilization drawn
to the cause of small States, the cause of all those countries
which desire to develop their own civilization in their own wav
following their own ideals without interference from anv insolent
and unauthorized aggressor.’
“ 25. Premier Asquith, speaking at Guild Hall, November 9,
1915, asserted:
“ *We shall not pause or falter until vre have secured for the
smaller States their charter of independence and for the world
at large its final emancipation from the reign of force.’
“ 26. And, again, Premier Asquith, on November 9, 1910, de
clared :
“ ‘ This is a war, among other things—perhaps I may say primarily—a war for the emancipation of the smaller States.
* * * Peace when it comes, must be such as will build upon
a sure and stable foundation the security of the weak, the liber
ties of Europe, and a free future for the world.’
1 4 7 3 U — 20000
1
mm
i
| i.
1
"'1
“ 27. Premier Lloyd-George, on June 29, 1917, said:
“ ‘ In my judgment this war will come to an end when the
allied powers have reached the aims which they set out to attain
when they accepted the challenge thrown down by Germany to
civilization.’
“ 28. Asquith, in the House of Commons, on December 20,1917,
said:
“ ‘ We ought to make it increasing clear by every possible
means that the only ends we are fighting for are liberty and
justice for the whole world, through a confederation of great
and small States, all to possess equal rights. A league of na
tions is the ideal for which we are fighting, and we shall con
tinue fighting for it with a clear conscience, clean hands, and an
unwavering heart.’
“ After the beginning of the World War, and on December 18,
1914, Great Britain proclaimed a so-called protectorate* over
Egypt. The proclamation seizing Egypt and placing Egypt un
der the British flag is published in the London Times of Decem
ber 19, 1914, page 8, column 3. It reads:
“ ‘ In view of the action of his highness Abbas Helm! Pasha,
lately Khedive of Egypt, who has adhered to the King’s ene
mies. His Majesty's Government has seen fit to depose him from
the khedirate, and that high dignity has been offered, with the
title o f Sultan ol! Egypt, to his highness Prince Hussein Gamel
Pasha, eldest living Prince of the family of Mehemet Ali, and
has been accepted by him.
“ ‘ The King has been pleased to approve the appointment of
Prince Hussein to an honorary Knight Grand Cross of the Order
of the Bath on the occasion of his accession to the sultanate.’
[Italics ours.]
“ The London Times, in the issue of December 19. 1914, had
large headlines saying, ‘ Egypt under the British flag.’ But the
Times, in an editorial in the issue of same date, with character
istic British diplomacy, naively said:
“ ‘All that is desired now is to defend Egypt against attack
and to keep the internal administration running smoothly.
Other questions can wait until peace is restored, as Lord Cromer
implies in the letter we published to-day. * * * It is purely
a practical administrative step, dictated by the appearance of
Turkey as a belligerent.’
“ It will be noted that the seizure was sought to be justified
only as a protection to Egypt against Turkish aggression. The
truth is that under the guise of a ‘ protectorate’ Great Britain
seized Egypt and swept away every vestige of Egyptian freedom
and independence. But the people of Egypt did not realize at
that time the full meaning of this action on the part of Great
Britain. They were told that it was a step toward the inde
pendence of Egypt. His Majesty King George, in a letter to the
Sultan whom he had appointed to rule over Egypt, which letter
was widely circulated throughout Egypt and was published in
the London Times of date December 21, 1914, said:
“ <* v * i feei convinced that you will be able, with the
cooperation of your ministers and the protectorate of Great
Britain, to overcome all influences which are seeking to destroy
the independence of Egypt. * * * ' [Italics ours.]
147311— 20090
^ 1
l
11
TREATMENT
[P ro m
OF
EGYPTIAN
th e E g y p tia n
W h ite
DELEGATES
B ook , p.
TO
1 9 .]
iiiioi liim^ u»s tunt uuiioulties luivo nrison whicli luivo prevented
Uiom from responding before and that as soon as they are
smoothed out we shall receive an answer. * * * w7 rely
e
upon the traditions of Great Britain. The British have not
<
-eased to give to the world examples of the devotion to the
principles of individual liberty. Will not our request for pass
ports receive a quick and favorable response?’
“ To this the following letter was received on December 1
1918, page 21:
* 1 am directed by his excellency, the high commissioner, to
'
acknowledge receipt of your letter of the 29tli ultimo and to
inform you in reply that after reference to His Majesty’s Gov
ernment, his excellency feels unable to make any representations
to the military authorities in the matter.
“ ‘ 1 um t0 add that should you desire to submit suggestions as
to the government of Egypt, not being inconsistent with the policy
of Jlis Majesty’s Government as already declared, such sugges
tions can most conveniently be submitted in writing to his ex
cellency. In tins connection J may draw your attention to the
communication addressed by Sir Miile Gheetliam, proclamation
o f protectorate by the British Government, December 18, 1914,
by instruction of His Majesty’s Government to the late Sultan
Hussein on the occasion of his accession.’
“ To this the delegation replied on December
1918, as fol
lows, page 22:
In response I allow myself to make known to your excel
lency that it is not permitted, neither to me nor to any member
of the delegation, to make propositions which are not in ac
cordance with the will of the Egyptian nation as expressed in
the .mandates that have been given ns. * * * Forbidding
our departure makes illusory and inoperative the mission that we
have accepted by will of the people. It is difficult to conciliate
this situation with the principles of liberty and justice which the
victory of Great Britain and her allies is supposed to have caused
to triumph. This victory has repeatedly been declared to be for
lhe purpose of opening a new era for mankind through listening
and granting the just demands of peoples.’
" i n a letter o f protest lo Premier Lloyd-George against the
virtual imprisonment o f the Egyptian delegation at Cairo, the
president of the delegation wrote (p. 26) :
You have certainly been misinformed of the circumstances
that accompanied our sequestration. We cun not imagine how
such proceedings can be justified, whether from the point of
view of law or social usage, or even of reasonable policy, and
we can not understand how the British can apply systematically
so humiliating a treatment to a nation with the rich and
glorious past of ours. Whatever may he its present weakness a
147311—20090
T
I;
]^
i \
nation with a civilization so ancient will always preserve before
the world its prestige and its title to the gratitude o f the world.
Deny the civilization o f Egypt in spite of traces that attest
its glorious past; deny its benefits to the culture o f the world;
suppose that it is only an agglomeration of savages ruled by the
brutality of their instincts and without law—do you refuse to
believe that Egypt has been a precious aid to you? The enor
mous sacrifice that we have made during the war in blood and
treasure for the triumph of your cause, were indispensable to
you, and moreover you have recognized many times that these
sacrifices were one o f the principal factors of victory in the
Orient.
* * Even were you to suppose that Egypt had no
civilization and that Egypt gave you no aid. would you none
the less refuse to apply to her the principles which you have
agreed with President Wilson to apply— impartial justice on
every side of settlement no matter whose interest is crossed,
and not only impartial justice but also the satisfaction of several
peoples whose fortunes are dealt with? ’
“ Egyptian case stated as follows in a letter from Egyptian
delegation to president of peace conference (p. 88) ;
For more than five months the British authorities l’efused
to allow our delegation to leave for Europe. Public opinion,
realizing that a peace conference had assembled and was taking
up the problems of the Near East, and preparing a treaty to
present to Germany, became aroused. The Egyptians insisted
that the authorization for our departure be granted. Standing
by the people, the cabinet presented its resignation, which was
accepted. The answer of the British military authorities to
the official request of the Egyptian Government was to order
the arrest and deportation to Malta of the president of the
delegation and of three of his colleagues. They were taken
suddenly from their homes and hurried away under cover of
night. There was no trial, and they were not informed of the
reasons for their arrest and deportation. When they learned
of this act of violence, totally contrary to the law, there were
peaceful demonstrations throughout the country, in which all
classes took part. Government officials and the personnel of
railways and other transportation service, decided to strike.
The English thus saw that in the entire territory of Egypt the
people o f all classes, irrespective of religion, were against their
domination, nevertheless they persisted in their wish to govern
by ^hree of arms the people who did not want them.
“ ‘ The manifestations were suppressed by machine guns
which mowed down dozens of unfortunate demonstrators.
Since the Egyptians had no arms, the order to fire was totally
unwarranted. But frightfulness could not stop the Egyptians
from proceeding in their determination to make an effort to
obtain their independence. They had firm faith in the prin
ciples o f President Wilson which had been solemnly accepted by
the Entente Allies. They felt that if their delegation could
only get to Paris that justice would be accorded to them. So, in
spite of the death that awaited them, they advanced in groups
in ecstasy, making the sacrifice of their lives to the cause of
liberty.
Even the women were not spared. Without mentioning
those who fell on the field of honor during the national demon
strations, we can cite the case of the leading ladies of Cairo
147311— 20090
13
who organized under the leadership of the wife of the prime min
ister, a demonstration to protest to the diplomatic agencies
against the murder o f innocent and unarmed citizens in the
streets of Cairo. Suddenly they were surrounded on all sides
by soldiers who pointed their guns at them. This inspired one
of the Egyptian women to say “ Make o f me if you will a second
Miss Cavell.” They were kept for more than two hours in the
burning sun. In proof of this statement, avo refer to the testi
mony of the agencies of the United States and Italy.
“ ‘ The British authorities in Egypt: were as much disturbed as
provoked by the extent of the movement and astonished at their
powerlessness to stop it. It was then that the spirit of venge
ance got the better of them, and they then allowed themselves
to indulge in the most disgraceful excesses. No longer content
to stop the demonstrations by means of rifles and machine guns,
they 'were guilty in several places of rape, of assassination of
peaceful villagers, o f pillage, of arson—all with the most trifling
pretext or even without pretext. No longer was it a question
of individual abuses committed by stray soldiers such as those
of which the minister of justice and the president of the legisla
tive assembly had been victims—no longer was it a question of
blows and thefts in the streets of Alexandria and Cairo, attacks
began to be made by strong military attachments under ’the com
mand of their officers in villages as well as cities.”
BRITISH VIEWS ON THE EGYPTIAN QUESTION.
* Sir Thomas Barclay, vice president of the Institute of Inter
•
national Law, says in his book, ‘ New Methods of Adjusting In
ternational disputes and the Future’ :
‘“ Turning to another aspect of international matters, it is
deeply to be regretted that: in several instances in our own time
international treaties have not been regarded by public opinion
with the same respect as international awards. The attitude
of England toward Egypt, o f Italy toward Turkey, of Russia
toward Persia, of France toward Morocco, and especially of
Germany toward Belgium, all are instances of eventuarbad
faith, lioAvever justifiable (he original intervention may have been
in the one case or unjustifiable in the other. They are addi
tional evidence o f the difficulty of preserving the peace of the
world even by the most solemn of international undertakings.’ ”
I.Excerpts from an article by the Right Hon. .T M. Robertson, former
.
member of the British Cabinet, in the Contemporary Review of May,
D.19, under the title of “ The problem of Egypt,” said in part:]
A rebellion in Egypt in 1919 has set nil men elsewhere asking
the question, W by? In 1914 it rebellion was planned for by the
German enemy; how thoroughly the world has not yet been
informed. Had it broken out, the causation would have been
sufficiently obvious, apart from any known native discontent.
But that rebellion should have been averted then and should
blaze forth uoav, when the leagued enemies of the British Em
pire arc prostrate in defeat, signifies a new causation. What
is it?
“ Some have put the hypothesis that Egyptian Moslems are
alarmed by the prospect of Jewish domination in Palestine. But
even if there were not express testimony that the Zionist leaders
have maintained thoroughly friendly relations Avitli those of the
147311—20090
S H'
'
fi
Arabs, such an explanation would be plainly inadequate. Mos
lem feeling in Egypt about Palestine could at most aggravate
other grounds of resentment; it could not motive a rebellion in
which the Moslems of Palestine have no share. Such a rising
exhibiting no signs of direction from without, must be held to
signify grievances within Egypt; and new and special grievances
at that. The disorders reported from Cairo on April 14 appear
to involve riots directed against the Armenians and Greeks; and
it maj be that the presence of a number of Armenian refugees
has helped to foment fanaticism. But these attacks, as de
scribed, have the appearance of being a sequel to the previous
insurrection rather than a key to its causation. Normally, the
Moslems in Egypt live on perfectly good terms with the numer
ous Greeks; fanaticism being in fact not a normal factor in the
life of the Egyptian mass. And the remarkable statement made
by Miss M. E. Durham, in the Daily News, of April 2 would seem
to yield the explanation. Thus it runs:
“ ‘ I was in Egypt from November. 1915, to April, 1910, and can
confirm Dr. Haden Guest in his statement that it is to our own
treatment of the Egyptians that we owe the present trouble
The authorities were certainly to blame in landing colonial
troops in Egypt without carefully instructing them as to the
population they would meet there. So ignorant were numbers
of these men that they imagined that Egypt was English, and
the natives of the land were intruders.
“ ‘ More than one Australian said that he would clear the lot
out if he had his way. They treated the natives with cruelty
and contempt. In the canteen in which I worked a very good
native servant was kicked and knocked about simply because
he did not understand an order given him by a soldier. An
educated native in the town was struck in the" mouth and had
his inlaid walking stick forcibly snatched from him by a soldier
who wanted it. More than one English resident said to me:
“ 11 will take years to undo the harm that has been done hero
by the army.” Personally I felt that were I an Egyptian I
should have spared no effort to evict the British. I felt ashamed
of my country—bitterly ashamed. The opinion of the native for
the soldier was amusingly illustrated by a small conversation
book, one phrase of which was to the effect: “ You fo o l; what
for you spend all your money on beer? ” and a dialogue with a
beggar which ended: “ I am poor; I am miserable,” to which
the Briton replied : “ Go to hell.”
‘“ I sP°ke with great severity frequently to the soldiers,
telling them that by their conduct they were proving themselves
the enemies of England; that the Germans maltreated the
enemy, but that they were attacking their own side and would
make enemies. This surprised them very much. Thev were
absolutely ignorant of the situation.
“ ' To make matters worse, for the first few days after the
troops arrived in quantities, the drink shops were all open all
day, and the unlovely results filled the natives with disgust and
contempt. It was reported, I do not know with what truth,
that drunken men had snatched tlio veils from Moslem women!
The tale was believed by the natives.
“ ‘ Small wonder if they hate and dread us.’
“ It is probably necessary to impress upon many people in
this country that the insolent outrage such as that described
inflicted upon people in their own country by a dominant alien’
147311— 20090
1
race, is about as maddening to the indigenous population as
Englishmen found many of the tales of German brutality to
British prisoners and subject Belgians during the war. The
blood boils in Egypt perhaps more easily than in England. And
if any of our people continue to argue, as many of them did a
dozen or more years ago, that Egyptians ought to be too thank
ful for our beneficent rule to feel rebelliously about individual
grievances, it will be more necessary than ever to point out that
such reasoning tells only of an incurable moral blindness. Old
chronicles are full of rebellion arising out of individual out
rages; and a nation collectively grateful to an alien race for
ruling it is not among the portents of history.
“ How government has gone in Egypt during the war it was
practically impossible for us at home to know. It was no time
for discussing reforms; and military rule had to prevail there
at least as much as here. But when the world is intent upon a
peace settlement which is to remedy as far as may be all the
grievances of subjected peoples, it would be idle to suppose that
wild mutiny and stern repression (going to the length of bomb
ing open villages) can go on in Egypt without comment or
criticism from our allies, to say nothing of our late enemies.
“ If Egypt were under any rule but British, British critics in
general would hold it a matter of course that such a mutiny as
has recently been quelled there must signify some kind o f lnisgovernment. The fact that we can quell a mutiny by bombing,
trom aeroplanes, the open villages of a population which simply
can not organize a military resistance, is no proof whatever
either of the general badness o f the Egyptian cause or the good
ness of ours,
“ Recollections of the history of Poland might suffice to move
thinking men in this country to seek for a policy which shall
not merely ‘ hold down ’ the Egyptian people now but make it.
unnecessary to hold them down in future. Whatever the pa
triots in Parliament and the Northcliffe press may say for the
moment, this bombing of open villages and flogging of rioters
can not improve our reputation either in Christendom or in the
Moslem w orld; and it will not he permanently possible even for
the patriots to keep up a denunciation of Germans for their past
bombing of noncombatants here while we bomb noncombatants
in Egypt. And there is a painful probability that such episodes
will recur unless we make a new departure in Egyptian Gov
ernment.
“ It is presumably well known that the present system is one
embodying a few of the forms without any of the realities of
self-government. At every stage at which those forms have
been adjusted the obvious purpose was to give nothing approach
ing real power of any kind either to the mass of the people or
to Egyptian ministers who nominally administered. For such
a policy o f emasculation the private defense lias always been
that neither ministers nor people can be trusted, the former to
govern or the latter to control them. It may simplify the dis
cussion to admit that for this plea there is some justification.
It would be hard to prove that the majority of the electors in
Britain who polled at the last general election are well qualified
to vote. They are now showing signs of a change of feeling
which could hardly be paralleled in oriental history for quick
ness and completeness. That being so, it is not to he supposed
147311—20090
that the people of Egypt are properly fitted to exercise political
power. But that does not alter the fact that in Egypt, as in
Europe, the only way in which any population can become fitted
to exercise political power is to begin using some degree of
political choice.
“ Certainly it is important that some amount of education, in
the ordinary sense of the term, should precede political en
franchisement—though a franchise long subsisted with a low
standard of popular education in our own country. But Eng
lishmen can not long plead lack o f education in Egypt as a
ground for denying it any measure of real self-government,
when it is by the decision of the British control that Egypt
remains so largely uneducated. The policy o f Lord Cromer in
that regard was fatally transparent. Until within a short
time of his resignation he refused even the appeal of his Brit
ish (the controlling) minister o f education to spend more than
£200,000 a year on the schooling of a nation numbering some
twelve millions. The finances of Egypt, he declared, did not
admit of an expenditure much in excess of that. When criti
cism was brought to bear in the British Parliament be quickly
discovered that he could spend the £400,000 his minister had
asked for; and since his day the expenditure has greatly in
creased, still without giving Egypt a good system of schools.
“ The reforms, such as they are, have been largely the result
of native pressure. Egyptians of all classes have long agitated
for better and better schools, and in particular for a good mod
ern university. Before the advent of the British control Egypt
was to a very considerable extent in a state of educational
progress. A study of the catalogue of the Khedival Library in
1906 revealed that quite a large number of scientific and other
works had been translated into Arabic, chiefly from the French,
in the days of Ismail and his predecessors. Yet when it was
urged upon Lord Cromer’s Government that science teaching
should be introduced into the program of the secondary schools
the official answer was that books for the purpose* did not
exist. As they had existed a generation before, the irresistible
conclusion was that the British control had let Egypt retro
grade from the level reached under Moslem rule. So reaction
ary was the influence of the Cromer tradition that only after
much pressure was it made possible for students of agriculture
in Egypt to secure instruction in their own language. The
Cromer tradition was that they must master either French or
English for the purpose. Let the reader try to imagine what
would be said of a British Government that refused to give
instruction in scientific agriculture to farmers’ sons save in a
foreign language.
“ It is perfectly true that Lord Cromer managed Egyptian
finances well and economically, in contrast with the extremely
bad management of the old regime. Probably no native gov
ernment could have approached to the efficiency, to say nothing
of the rectitude, of the British control in finance. As to ail
that there is no dispute; but it savors almost of burlesque to
argue that the duty of the British control toward Egypt was
fulfilled when Egypt was made to pay full interest on all its
debts and meet the whole costs, civil and military, o f the Brit
ish administration. For generations past it has been an axiom
in our politics that it is the business of governments to look to
147311—20090
I
1
;
*
17
tlie moral welfare of the nation as well as to its finance, and
it is upon their contributions to that welfare that political
parties now mainly found their claims to support. The very
backwardness of Egypt was a ground for special measures to
promote her moral progress. To make the defense of British
rule consist in having regulated her finances and increased her
productivity while leaving her more backward than ever in the
elements of qualification for self-government was to discredit
the cause that was defended. The obvious answer of every im
partial foreigner to such a plea would be: ‘ You claim credit
and gratitude for having secured the safe payment of your own
bondholders, in whose interest you originally entered Egypt.
Orderly government was essential to that. To earn credit and
gratitude you must do a good deal more. You must raise the
levels of life for the people of Egypt as you confessedly seek to
raise them for your people at home. And you must know—
what nation can know better?—that a people declared unlit to
manage their own affairs are thereby pronounced low in the
human scale.’
“ It is, to say the least, unfortunate for the British Govern
ment that such an outbreak in Egypt should follow immediately
on the close of the World War, when ‘ self-determination for
subject races ’ passes for a principle with the peace conference.
Had those responsible for the control of Egypt in the past
sought to fulfill our old pledges with more of good will and
good faith, we might have escaped this unpleasant emergency,
though it will doubtless be argued that Lord Morle.v’s progres
sive measures in India did not avert sedition there in 1914 and
later. But the conclusion come to by responsible inquirers as
regards India is obviously still more compulsive as regards
Egypt. Our duty to prepare that country for self-government
has been again and again officially avowed from the time of our
first entrance; and those who think we can forever go on sim
ply repressing discontent and maintaining the status quo are
plainly unteachable by events. If the British control does not
get newly into touch with intelligent native opinion, the situa
tion will infallibly go from bad to worse, and this in the eyes
of a world newly critical of ‘ imperialism.’ That long-vaunted
ideal has somewhat rapidly become a term of censure for
whole nations.
“ We shall be faced, as a matter of course, with the regulation
formula that there can be no talk of concessions to a people
who have been recently in rebellion. The Russian bureaucracy
used to talk in that fashion, and we have seen the outcome. If
those responsible for British rule in Egypt have in any degree
learned the lesson, they will as soon as possible set about secur
ing native support by taking natives into council; by giving room
for real initiative to the nominal Egyptian ministers, who must
know a good deal more about Egypt than do more than a few
of the British bureaucracy there, civil or military; and by giv
ing some reality to the form o f self-government which thus far
has been allowed to count for next to nothing in Egyptian
politics. Before the war there were chronic and bitter com
plaints about the disregard of native wishes, as expressed by
the elected representatives, in regard to matters of administra
tion nearly concerning Egyptian welfare. During the war there,
as here, must have been the possible minimum of consultation
147311—20090
o f the people. Perhaps wliat has happened in the English byelections within the last month or two may suffice to suggest
to he British Government that the sooner it resumes S
with public opinion everywhere the better it will be for na
tional stability, to say nothing of the stability of the ministry
Egyptian mutiny is only the nonconstitutional version of the
dissatisfaction that expresses itself in elections in the constitu
tional country. And, to put the case at its lowest, the safe
course is to set about making Egypt constitutional.
“ J- M. R obeetsox .”
. _ Effih. W edgwood Benn, in the House of Commons on May
vitiated a debate on the state o f affairs in Egypt. Among
other things, he said:
*
. i|i| r i?
ii§!' ici-
■ \
,
' I Z T 100 nT h ^ say that tlie rcasou for the calinrtvmnm
c\eiV Vien , lle iu r ks were successful and had
l
w
the, ? iDai Peninsula, was that the Egyptians trusted
that the assistance they had rendered to the Empire in the war
would not be permitted to interfere with the satisfact on of
their legitimate aspirations. * * *
01
rh e peace that had reigned in 1914, because there was
l
tnist, was converted by somebody in 1919, when there was dis
appointment, into a national insurrection. * * * The unrest
among that largo, busy, and influential class o f people was
caused by the fact that changes were in the air and nobody
had been consulted. The underlying cause was that the status
o f Egypt had been altered.’
“ Mr* Spool* (Bishop Auckland) said in Hie House o f Com
mons on the same d ay:
, “ ‘ The situation in Egypt appeared to have been aggravated
enormously because Egypt was under military control, and mili
tary control ot a very short-sighted kind. The methods of goveming Egypt had become more and more military; and in regaid to the censorship of information which was allowed to be
5ro,m tllat country, it was interesting to note that the Times
asset ted ever since 1914 it had been the most inept and most
trojagely 1 1 1 css cens°rship hi any country under British con
1
..
Them were facts which could be thoroughly well au
thenticated ot atrocities of the most extreme kind that had
' - 1U h0 r
U
s? " ctlon o f
military m f
■ “ ies* .
The allegation (o f atrocities) had become
ih 'iM w S h-0ti
1
unit d t was high time 1 1 inquiry was held.’ throughout Europe,
an ! his C0lintl'y but
FRENCH VIEWS.
[Speech of M. Goudo of the French Chamber of Deputies, at the sittlii"
oi Sept. 4, 1919. Translated from Le Journal Officlei.]
llis speech ° f yesterday M. Franklin-Boulion
said that under the appearance of ‘ no compromise’ M Clemenceau had surrendered on every point.
01
“ I will try to show that the president o f the council (prime
i at a?.y T
when n came to
sUtlnij, a questionVthat{Ul0ptcd theso
he understands thoroughly, it question
often discussed from this tribune and upon which the prime
minister lias otten spoken.
147311— 20090
19
“ Article 147 of the treaty submitted to us for ratification
says :
“ ‘ Germany declares that she recognizes the protectorate
proclaimed over Egypt by Great Britain on the 18th of Decem
ber, 1914.’
“ This means that Egypt is placed under the protectorate o f
England without this agreement having ever been ratified by
Parliament. Neither in the treaty of peace nor in the report of
M. Maurice Long has one dared to directly approach this ques
tion; it is well known that it is a thorny one and that it is
absolutely contrary to all the principles laid down by the En
tente Governments during the course o f the war.
“ It is known that at the present moment—in spite of their
appeals to all the' parliaments and all the politicians of the
Entente—a people are being placed under the domination of
another people. This is being done in an underhand way.
We are not asked at first—we the French Chamber—to ratify
an.agreement recognizing the protectorate declared by England
over Egypt in 1914, but we are told : ‘ We are compelling Ger
many to recognize the protectorate proclaimed by England over
Egypt.’
“ The question is brought up, I repeat, in an underhand
way, because it is known that it the sole question of the English
protectorate in Egypt was brought before Parliament a great
debate would spring up, and I am convinced that if this question
was the only one under discussion before you such a project of
the treaty would never be approved. I therefore wish to know
and I ask for what reasons the French Government thinks it
right to place under English domination the Egyptian people,
who protest with all their might and all their energy, as I will
show.
“ Is it not well known that Egypt has always shown its de
termination to be independent? Is it not well known that it is
worthy of this independence?
The prime minister himself has vigorously defended the dig
nity of Egypt. He knows, as we do, that the production of
Egypt supports its 16,000,000 of inhabitants, including Egyptians
and Soudanese; that almost all the landed property belongs
to Egyptians; that its farms are cultivated by native-born sub
jects to the exclusion of all others; that this country had in
1913 a foreign commerce amounting in value to 12,000.000,000
francs (about 82,400,000,000) ; that the national budget of
Egypt is 800,000,000 francs (about $160,000,000) ; that intel
lectual Egyptians cultivate French traditions; that there exists
in this country boys’ and girls’ colleges in large numbers, as
well as different high schools, where the French language is
exclusively employed,- without forgetting the celebrated law
school.
“ Fifty years ago the Khedive could declare:
“ ‘ My country is no longer in Africa. It is a part of Europe.’
“ Thirty years or so ago, the prime minister, rising in this
tribune to defend Egyptian independence as I defend it to-day,
declared:
“ ‘ I do not desire to enter into ethnographic consideration as
regard the Egyptian race—this is not the place for it—blit
it is certain that this race, of which we see some remarkable
specimens amongst us, in our schools, is a calm and docile
147311—20090
1
\\
Hf
r
1 5
race— too docile, it may be said at certain moments—susceptible
o f culture and application, an industrious race o f which surelv
one lias every reason to expect much. No one can stand up in
this tribune, no one will come into this Parliament of the
Republic to say that these men are incapable of freeing them
selves and that we owe no other duty to them, except to govern
them with a courbash and a cudgel.’
“ I ‘ Hear! H e a r !’ at the extreme left.]
“ Thirty-two years ago the prime minister made these declara
tions. Since then, as we know, European civilization has been
spreading itself more and more in Egypt, which ardently
desires to Europeanize its civilization, which is modifying its
political structure, which has extended the suffrage to all
citizens, who have attained their twentieth year—a reform that
certain European nations might well envy.
“ It must be remembered that at the moment of the declara
tion o f war, on the 2d o f August, 1914, Egypt was inde
pendent under the sole suzerainty of the Sultan of Turkey.
This suzerainty, approved in 1840 by the European powers'
consisted in the payment each year by Egypt o f a tribute of
15,000,000' francs to the Sultan—and that was all. Having
done this, it had an absolute right recognized by the European
powers, to manage its own affairs according to its fancy and
to have its own-constitution. I know well that little by little
England, by the force of her armies, had got hold of Egyptian
institutions, that the members of the Government were hardly
anything more than English officials, and that the President o f
tiie Legislative Assembly is appointed by the Government. But
this was putting into practice the formula against which we
are all struggling: ‘ Might is right.’ England had no precise
and express right in Egypt. The most famous English poli
ticians, the heads o f the Government, have said so on several
occasions, as, for instance, Gladstone, who in the House of
Commons as far back as the 23d of June, 1884, stated:
“ ‘ We pledge ourselves not to prolong our military occupation
iu Egypt beyond the 1st o f January, 1888.’
“ It is the same prime minister who said, on the 18th o f Sep
tember, 1885:
“ ‘ England ought to withdraw from Egypt as soon as British
honor will permit o f it. We will never admit that there can
he any question of annexation, of a protectorate, or even of an
indefinite prolongation o f the English occupation, and we re
pudiate all idea of any compensation whatsoever for the efforts
and sacrifices that wc have made up to this day. English
policy is founded on an error, and what is best to' be done in
a matter like lids is promptly to put an end to such an inter
vention.’
“ It is Lord Salisbury who said on the 10th of June, 1887. in
tbe House of Lords:
“ ‘ Her Majesty’s Government, by virtue of its previous en
gagements and of the rules of international law, does not think
that it can place Egypt under a protectorate. Its rule should be
limited to coming to an understanding with the Porte to defend
the interests of the Khedive against political calamities and to
main the statu quo in the valley o f the Nile.’
“ There lias been a large number o f the declarations, but to
shorten matters I will only quote the one made by Lord Salis
bury in tlie House of Lords on the 12th of August, 1889:
147311—20090
21
“ ‘ We can not proclaim our protectorate over Egypt nor our
intention to occupy it effectively and perpetually; this would
amount to breaking the international pledges signed by Eng
land.’
“ Such was the state of the. question during the occupation.
In the agreement called the ‘ entente cordiale,’ concluded in 1904
between France and England, article 1 begins as follows:
“ ‘ The Government of His Britannic Majesty declares that it
has not the intention to change the political state of Egypt.’
“ In the course of the discussion of the Fashoda affair, when
England asked me to withdraw, it was not because the Sudan
belonged or could belong to England; it was because of Eng
land’s declaration that it was Egyptian territory. England has,
thep, clearly recognized on every occasion the independence of
Egypt.
“ Has the country, which was independent under the sole
suzerainty of the Sultan and under the conditions that I have
precisely indicated, become less deserving of our consideration
during the war? Is there any reason for modifying, by lowering
it, the political status of Egypt?
“ You know that Egypt came at once and took her stand with
the Allies. It must not be forgotten that the silver thread to
which I referred a moment ago still bound it to Turkey.
“ Before Turkey declared war Egypt placed itself at the dis
posal of England—of the English consul general—by saying:
“ ‘ If you will promise us our complete independence, if the
English armies undertake to quit our country after the war, we
will place our financial resources, our provisions, our arms, and
our sons, all, in fact, that we possess, at your entire disposal ;
we are ready to go with you to the Continent to defend the inter
ests of the Allies.’
“ To the offer thus made at this moment England replied by a
downright refusal.
“ Later the situation got worse. Turkey, who was suzerain
over Egypt, went to war against the Allies. Egypt renewed its
offer in the same way. The Sultan, be it noted, had. proclaimed
a holy war. Do not forget that Egypt is a Mussulman country,
but a country of semi-European civilization, where a very lively
sympathy for Europe exists. In spite of the powerful effect that
the proclamation of the holy war might have on the peasant
masses, who are profoundly Mussulman in sentiment, Egypt,
attracted by European culture, came to us and said once more;
‘ Insure us our independence after the war and we are with you,
body and soul.’
“ We have made use of Egypt; it is the Egyptian artillery
which checked the impetus of the German-Turkish armies in
February, 1915, when these armies tried to seize the Suez Canal
and to cut our communications. Egypt put its cotton at the
disposal of Europe. Later on, in face of the necessity o f grow
ing wheat, it abandoned the profitable production of cotton in
order to cultivate wheat, and it put all its provisions at the
disposal o f the army of Salonica, which it victualed to a great
extent.
“ With a population of 13,000,000 of inhabitants it has placed
1,200,000 workers at the. disposal o f the Entente—a figure recog
nized as exact by the English.
“ All this Egypt has done for the Entente. Have we now
the right as a recompense for these services to violate the very
147311—20090
principles that everyone here Invokes, the principles which
have been laid clown with precision by President Wilson, when,
tor instance, he said, *Peoples ought not be passed on from one
sovereignty to another by an international conference or an
arrangement between rivals and adversaries.’ [ ‘ Hear, hear,’
from several benches of the extreme left.] The national aspi
rations ought to be respected. The peoples ought to-day be gov
erned by their own consent.
“ Is it not there, besides an international interest, that
Egypt shall not be placed under the domination of a European
power? I have here under my eyes a short extract from a
speech of M. de Freycinet, then prime minister, who on the 27th
of November, 1886, summed up admirably the Egyptian question
by saying:
“ ‘ Egypt is a sort of crossing for the Old World. It is a
junction between Europe, Asia, and Africa. It is a highway
which permits of the penetration of the Far East possessions.
Besides, he who is master of Egypt is master to a great extent
of the Mediterranean. It is certain that if a great power in
stalled itself definitely in Egypt this would be a very heavy
blow to French influence in the Mediterranean in such a man
ner that, in my estimation, France ought never reconcile her
self to the idea that Egypt could definitely fall into the hands of
a European power.’ [‘ Hear, hear,’ from the extreme left.]
“ This is an undoubted fact. And the question ought not to
be examined merely from a material standpoint, but also front
a moral point of view. This Mussulman country into which
European civilization penetrates little by little is being driven
by us into a corner where violence is its only recourse. This is
henceforth its only political issue. We could, however, have
made of Egypt a point of contact between eastern and western
civilization. [‘ Hear, hear,’ from the extreme left.] This is ex
actly what we are not doing.
“ Not only will this country, which came of its own accord
to the Entente, receive no compensation, but by virtue of the
treaty of peace its bounds will be tightened and its chains
made heavier.
“ * * * {n this Chamber, which during such a long time
and so very justly complained of the Bismarckian policy, which
had left in the side of France the painful scar of AlsaceLorraine, it is my desire to declare that it is helping to create
at this moment another Alsace-Lorraine.
“ * M. Jean L onguet. Ten Alsace-Lorraines.’
“ 1M. G oude. Certainly, many Alsace-Lorraines; but this one
Is particularly characteristic. * * * ’
“ Egypt, which during the whole of the war and in order to
insure the victory of the Allies, has endured without com
plaining the yoke of English militarism, which has borne with
all the measures of censure, with all the house searches, trial
sentences, etc.
“ * M . J e a n L o n g u e t . With the atrocities!
“ ‘ M. G oude. Atrocities. Y es; that is the word. Egypt will
have no more of that now. It is in full open revolt. You are
aware that the president of the Egyptian Council (Egyptian
prime minister), who, however, is a nominee o f the English
and in a certain sense an English official, found the Egyptian
people so unanimous against this domination and the pro147311—20090
23
tectorate that ho resigned. You know that the officials who
are specially under English authority, seeing that their written
protests were distorted, went out on a general strike in order
to emphasize their vote o f independence. You are aware that
the workingmen are on strike; that revolts have taken place
in the streets, in which all classes and creeds have been united
by a common determination to win independence; that crowds
have been fired upon ; that there have been massacres; and that
condemnations have been pronounced.’
“ Here we have a university professor—a fellow—condemned
to penal servitude for life for having made a speech in favor
of independence. Here, again—to mention one case amongst
many others—we have Ibrahim Chalami sent to the gallows
for having cried out at the head of a demonstration, ‘ Liberty,
equality, fraternity.’
“ * M. B arthk. They condemn oven those who cry “ Long live
France.”
“ ‘ M. G oude. There are thousands of examples of this kind.
To maintain its protectorate, England has at present 150,000
soldiers; she is obliged to keep soldiers in every village, be
cause amongst university men, notables, commercial men, fella
heen, no one will accept this domination at any price and
everyone demands independence. Thrilling appeals have been
addressed to President Wilson, M. Clemenceau, to the chair
man of our peace commission, to the Italian, American, and
English Parliaments.’
“ ' M. J ean L onguet. They are all deaf.’
“ *M. G oude. But at all times and everywhere everybody
remains deaf except, however, the American Senate, the com
mission of which has proclaimed that Egypt ought to be as
independent o f English diplomacy as of Turkish diplomacy,
and that it must be left master of its own destinies.’
“ ‘ Monsieur le President of the Council,’ said the orator ad
dressing M. Clemenceau, ‘ not only have you abandoned Egypt
that you know personally, since, I repeat to you, you have
spoken very hard words against our friends, the English,
from this very tribune when this question was under discus
sion, but, what is graver still—what seems to me monstrous—
is that a peace conference brought together to settle the ques
tion of the entire world has, upon the orders of the English
Government, refused to hear the Egyptian delegation, composed,
as you well know, o f the president of the Chamber of Depu
ties of that country, of members of Parliament, of representa
tives of the intellectual classes, and of Egyptian notables.
And by refusing to hear them you have precipitated Egypt
into the only path left open to it— the path of violence!
“ I ask you, M. the president o f the council, how can Egypt
otherwise get out o f the situation in which you have placed it?
Yes; by your attitude and your decisions you have decreed for
that country violence and revolution.
“ You said of Egypt that its inhabitants were pacific and do
cile—too docile, perhaps. A heap of iniquities have indeed been
necessary to provoke the revolt of such a peaceable race.
“ How is it possible to better such a situation? Is there any
means of doing so? To whom should the Egyptian national rep
resentatives apply? They already have tried all the means at
their disposal.
147311— 20090
24
\
A
“ The vice president of tlie Chamber of Deputies and several
of his colleagues have been imprisoned simply because they
wanted to come to Europe to be heard by a delegation of the
peace conference. And never at any single moment has this
conference been willing to listen to them.
“ More than that, the Egyptian Army has been utilized during
the war to occupy Hedjaz. The Egyptian armies have been
equally employed to occupy Soudan and put a stop to the Ger
man maneuvers. To-day at the conference of the peace, the King
o f Hedjaz is received—a King entirely of English manufacture
created in order that England might have an additional vote.
And this King, who has just come into existence, who repre
sents a country inhabited exclusively by nomadic tribes— this
King has been given the right to sign a treaty in which a protec
torate has been imposed on the neighboring Egyptian people.
“ To this point have you gone in your injustices toward Egypt,
and yet, M. le president of the council, when you delivered
the speech that I have recalled—on the question o f Egypt and
the Anglo-French relations—you concluded by saying: ‘Assuredly
if the end of the Anglo-French alliance such as it has been de
picted to us and such as it would be applied in practice was to
organize with our aid the slavery of the Egyptian people and to
reduce them to the position of an inferior race, I would repudiate
it with the greatest energy, and I would say to our pretended
allies—to our accomplices, I should call them— that I refund
my share of responsibility in such a reprehensible undertaking.’
Thirty years ago you expressed yourself in this manner.
Since then Egypt has progressed; it has come closer and closer
to European civilization. And you want to-day to make us
share the responsibility for the crime committed against Egypt
in the peace treaty. For my part, 1 will not lend myself to it.
Besides, I am certain that the English people repudiating Eng
lish bourgeois traditions [applause on some benches of the ex
treme left] and united with the French people, will soon redress
the injustice and the crime that you are committing by once more
enslaving Egypt. [Applause at extreme left.]”
AMERICAN VIEWS.
-
“ President Wilson, in his great address at Mount Vernon, the
home o f Washington, on July 4,1918, said:
“ ‘ There can be but one issue. The settlement must be final.
There can bo no compromise. No half-way decision would be tol
erable. No half-way decision is conceivable. These are the ends
for which the associated peoples o f the world are fighting, and
which must be conceded them before there can be peace. * * *
The settlement of every question, whether of territory or sover
eignty or economic arrangement or o f political relationship upon
the basis of the free acceptance of that settlement by the people
immediately concerned and not upon the basis of the material
interest or advantage of any other nation or people which may
desire a different settlement for the sake of its own influence or
mastery. * * * What we seek is the reign o f law based upon
the consent o f the governed and sustained by the organized
opinion of mankind.’ .[Italics ours.]
“ Shall Egypt, without the consent o f the Egyptians, be turned
over to England for the sake of England’s influence or mastery?
117311— 20090
25
“ In the 14 points advanced by President Wilson we find the fol
lowing pertinent and applicable provisions:
“ ‘ Point 14. A general association o f nations must be formed
under specific covenants for the purpose of affording mutual
guarantees of political independence and territorial integrity to
great and small States alike.' [Italics ours.]
“ This principle applied to Egypt would lead to a conclusion di
rectly opposite to the indorsement of the British seizure of Egypt
and destruction of Egypt’s independence.
“ Applying the principle of the seventh point to Egypt and only
substituting the word ‘ Egypt’ for ‘ Belgium,’ the seventh point
would read:
“ ‘ Egypt, the whole world will agree, must be evacuated and
restored without any attempt to limit the sovereignty which she
enjoys in common with all other free nations. No other single
act will serve as this will serve to restore confidence among the
nations in the laws which they have themselves set and deter
mined for the government of their relations with one another.
Without this healing act the whole structure and validity of
international law is forever impaired.’ [Italics ours.] ”
THE QUESTION OF EGYPT.
[P ro m
th e
W a s h in g to n
P o st,
T h u rsd ay,
O c t.
16,
1 9 1 9 .]
“ The question of Egypt’s status is brought to the front by
Senator O w en ’ s proposed reservation— interpretative resolu
tion—to the peace treaty. The fact that this reservation—resolu
tion— is offered by a Democrat, a strong supporter of the Presi
dent, increases the weight of the objections which are finding
voice In the United States against the snuffing out of the prin
ciple of self-determination of well-defined nationalities. Presi
dent Wilson gained the support of liberty-loving men throughout
the world when he set forth that principle and announced that
it would be made effective at Paris. In so far as the conference
adhered to this principle its work was good and permanent, and
wherever the principle was violated there have been disorders
and threats of war.
“ Senator O w e n ’ s proposed reservation (resolution) provides
that the British protectorate over Egypt shall be recognized as
merely a means through which •the nominal suzerainty of
Turkey over Egypt shall be transferred to the Egyptian peo
ple, and shall not be construed to mean recognition by the
United States of British sovereignty over the Egyptian people.
“ The story of British ascendancy over Egypt, now apparently
to cul tin unate in the extinction of self-government, is compara
tively brief. The first occupation by British troops was in 1SS2
and .the ostensible object was to suppress a rebellion against
the Khedive. The occupation was to be only temporary, accord
ing to Premier Gladstone. He declared that England had given
*specific and solemn pledges to the world ’ that it would not
annex Egypt, and he added that these pledges had earned for
England the confidence o f Europe. Evidently there was no in
tention at that time to absorb Egypt. Yet the troops were not
withdrawn, and have never been withdrawn, notwithstanding
147311— 20090
20
the persistent efforts of the Egyptian people to recover the
practical independence they had enjoyed.
“ After the World War began the British Government re
moved the Khedive and appointed another, as a war measure,
and announced that Egypt was placed under a British protec
torate. The Egyptian people might have been alarmed by this
had not King George himself sent a letter to the Egyptians,
telling them that the change was but a step toward the com
plete independence o f the people, and that the protectorate
would endure only during the war period. This reassurance
was satisfactory, and the Egyptians joined the Allies heartily,
furnishing troops and large numbers of laborers who built the
railroads, pipe lines, and other military works in Palestine and
elsewhere.
“ When the armistice was signed the Egyptians believed the
day of their national independence to be at hand. They sent a
commission to Paris to attend the peace conference and to ar
range for recognition of the independence of Egypt. But the
leaders of this commission were seized by British officers and
deported to Malta, where they were placed in a German prison
camp.
“ From that hour there has been a smoldering volcano of re
volt in Egypt. The people have had several serious clashes with
British soldiers in which machine guns have quelled popular
uprisings. In the meantime Great Britain has obtained from
President Wilson a conditional recognition of the protectorate
over Egypt, and in the peace treaty is a clause requiring Ger
many to recognize the protectorate.
“ The intentions of Great Britain toward Egypt are some
what confused in the minds of other Governments" on account of
conflicting statements issued by British authority. When the
Egyptian question was before the Senate Committee on Foreign
Relations on September 2, the British Embassy hero made pub
lic a statement declaring that ‘ the British Government has
carefully avoided destroying Egyptian sovereignty,’ and that the
British flag in Egypt covered only British military establish
ments. But the British foreign office a few days later an
nounced that Great Britain had succeeded to the sovereignty
of Turkey over Egypt and had acquired Egypt as spoils of war,
apparently discarding the pledge o f King George and develop
ing a new policy of permanent control over Egypt.
“ It may be that unfortunately worded or unauthorized state
ments by British officials are at the bottom of the public con
fusion. In that case a clear reaffirmation of Britain’s intention
to relinquish the protectorate and restore Egypt to its people
as soon as the peace treaty is ratified would remove ail appre
hension. In the meantime, taking the treaty as it finds it, the
Senate will doubtless adopt a reservation on the lines 'sug
gested by Senator O w e n , for it is quite evident that the United
States can not consistently subscribe to a general principle of
self-determination and independence of nations and yet concur
in the involuntary absorption of Egypt by Great Britain.”
147311— 20090
27
EGYPTIAN BETRAYAL THE MOST HEINOUS OF
THE REACTIONIST WRONGS.
[By George H. Shibley.]
“ The case o f the people o f Egypt is a betrayal the most
heinous of the reactionist wrongs.
“ On December 21, 1914, five months after the opening o f the
war, the British Liberal Government, after deposing the Egyp
tian Khedive and placing in office a Sultan of their own choos
ing, spoke as follows to the people of Egypt in the name of the
King of England:
“ ‘ I feel convinced that you [the new Sultan] will be able,
with the cooperation of your ministers and the protectorate of
Great Britain, to overcome all influences which are seeking to
destroy the independence of Egypt * * *.’ (London Times.)
“ And yet the so-called peace conference of the allied coalition
governments has actually refused to the 13,000,000 Egyptians
their independence under the protection of the league of nations,
and the British Reactionist Government has shot down hundreds
of the Egyptians who had the manhood to assert their lawfully
established rights, won in part of the lives and the sacrifices
of we Americans !
EGYPT’ S SOVEREIGNTY VIOLATED.
[By Herbert Adams Gibbons, sometime fellow of Princeton University,
author of the New Map of Europe, the New Map of Asia, the New
Map of Africa, etc ]
“ The ‘ interpretative resolutions’ presented by Senator O wen
in the Senate on Tuesday greatly encourage liberal thinkers, who
are dissatisfied with the treaty at Versailles not for party or
internal but for international reasons. Senator O wen is a
Democrat and a loyal supporter of the administration. He makes
it clear that he intends to vote for ratifying the treaty without
amendment or reservation. But he feels that the Senate, while
unqualifiedly accepting the document from a technical point of
view, should not fail to let the world know how the United
States stands in regard to many of its provisions.
“ Senator O w en wants the United States to start to work
immediately for a change in the league covenant that will give
freedom to subject States capable of self-government. Senator
O wen mentions specifically a great wrong done to a sovereign
State by the treaty of Versailles.
“ ‘ That the protectorate which Germany recognizes in Great
Britain over Egypt,’ reads the Owen resolution, ‘ is understood
to be merely a means through which the nominal suzerainty of
Turkey over Egypt shall be transformed to the Egyptian people
and shall not be construed as a recognition by the United States
in Great Britain o f any sovereign rights over the Egyptian peo
ple or as depriving the people of Egypt of any right of selfgovernment.’
“ This resolution is apt to displease British public opinion,
and Senator O wen may be accused of indulging in the old
sport of twisting the lion’s tail. But the accusation is un
founded. If we allowed our natural sentiments of affection
147811—20090
;,p;
* t
for our kinsmen overseas to kee]> us silent at this time, we
should find them getting away with a lot of booty— and our
selves unconsciously or unthinkingly giving sanction to high
handed and unjustified acts of oppression and international
robbery. We can not be too strong in our condemnation, for
instance, of the Anglo-Persiau treaty, concluded secretly by
intimidation and bribery at the very moment we are asked
to give our cooperation to a society of nations which Persia
is invited to join.
" The case of Egypt stands out with remarkable clearness. It
is one o f the few moot questions of the treaty o f Versailles
which has not two sides. The British protectorate over Egypt
is an illegal action, not only violating the sovereignty of Egypt,
hut also the promises officially made by generations of British
statesmen. No denial o f this fact is possible. Open any history
or go to British official correspondence published by the British
foreign office, and you will read the repeated assurances given
to the Egyptians and to the other powers that Great Britain
did not intend to stay in Egypt and would not establish a proectoi*ate over Egypt.
“ The excuse for not hearing the representatives o f Egypt
at the peace conference was that the question o f Egypt did not
come within the scope of the conference. If this were valid,
why did the treaty o f Versailles mention Egypt? And what
right had the powers to deal with Egyptian questions at all?
But Egypt did enter within the scope of the conference
because it. was a country whose status had been changed by the
war and during the war. Technically, as well as morally, the
Egyptians had as much right to participation in the confer
ence as the Arabs of the Hedjaz, and more right to inde
pendence. For Egypt was only nominally under the suzerainty
of Turkey. By her declaration of war against Turkey, the
bond of vassalage Mas broken. Ipso facto Egvpt was inde
pendent.
“ But the British, who were occupying the countrv, pro
claimed—without taking into their confidence the Egyptian
legislative assembly or asking the consent of tlie Egyptian
people— their protectorate over Egypt. In war what is expe
dient is justifiable. Although formally protesting against this
violation of pledges given and reiterated, the Egyptians co
operated loyally with the British throughout the war, waiting
for the peace conference to deside upon the legality o f British
action. The prime minister, who consented to serve the new
rfigime and who continued in office throughout the war, told
me when I was in Cairo in 1910 that he was simply waiting
until the end c f the Avar to hold the British to their promises.
After the armistice Rushdi Pasha asked to he allowed to go to
London to take tip the matter o f the status o f Egypt with the
British. Permission was refused. A rigorous censorship was
maintained. The Egyptians were held prisoners in their own
country.
“ liushdi Pasha and the entire cabinet resigned. A period of
military dictatorship began. When the elected representatives
o f the Egyptian people asked for passports to proceed to Paris,
the British suddenly arrested without, warrant or warning the
president of the delegation and three o f its leaders and deported
147311— 20000
1
f
them to Malta. This, led to the insurrection put down by ma
chine guns and burning of villages. The British used the means
of suppressing what they called ‘ rebellion ’ which the world
roundly condemned the Germans for in Belgium. Finally, force
of Egyptian public opinion compelled the release of tlie dele
gate's and the granting of passports for Paris. But the Egyptian
delegation, after its arrival in Paris, was never heard by the
conference. The stipulation compelling Germany to recognize
the British protectorate was inserted in the treaty of Versailles
in defiance of the basic principle President Wilson had declared
would be followed in making peace. A whole nation was robbed
of its sovereignty and its international status changed against
its will and, without having been heard, Egypt was Shantung
over again.
“ I would not have my readers think that I am writing with
out knowledge of the facts. A White Book has .lust been pub
lished by the Egyptian delegation, which contains documents
setting forth the history of the past year. The British foreign
office does not deny the authenticity of these documents. As
for the men deported to Malta, I know them personally. No
foreigner, even a Britisher, who knows Egypt can deny that
these men are honorable and capable and that they represent
the Egyptian people. The president of the delegation, Zagloul
Pasha, is one of the best loved men in Egypt, a veritable father
of his people; Mohammed Mahmoud Pasha, a graduate of Ox
ford, was formerly governor of the Suez Canal. The other
members of the delegation include the Sheik of the Arabs of
the Fayoum, the foremost landowners and lawyers in Egypt, and
the librarian of the National Library. They are the cream of
the Christian element and the Greek Orthodox and Catholic ele^
ment. as well as the Mohammedan element. The Egyptians are
united, irrespective of creed, in their determination not to be
bartered from one sovereignty to another like cattle.” * * *
“ On November G 1918, Secretary of State Lansing published
,
the following to the w orld;
“ ‘ From the Secretary of State to the Minister of Switzerland,
in charge of German interests in the United States.
“
‘ D
e p a r t m e n t of
State,
“ 4November 5, 1018.
Sir : I have the honor to request you to transmit the fol
lowing communication to the German Government :
“ ‘ In my note of October 23, 1918, I advised you that the
President had transmitted his correspondence with the German
authorities to the Governments with which the Government of
the United States is associated as a belligerent, with the sug
gestion that, if those Governments were disposed to effect peace
upon the terms and principles indicated, their military advisers
and the military advisers of the United States be asked to sub
mit to the Governments associated against Germany the neces
sary terms of such armistice as would fully protect the interests
of the peoples involved and insure to the associated Govern
ments the unrestricted power to safeguard and enforce the de
tails of the peace to which the German Government had agreed,
provided they deemed such an armistice possible from the mili
tary point of view.
147311— 20090
‘■’ The President is now in receipt of a memorandum of ob
servations by the allied Governments on this correspondence,
which is as follow s:
“ ‘ “ The allied Governments have given careful consideration
to the correspondence which has passed between the President
o f the United States and the German Government. Subject to
the qualifications which follow, they declare their willingness
to make peace with the Government of Germany on the terms
of peace laid down in the President’s address to Congress of
January, 1918, and the principles o f settlement enunciated in
his subsequent addresses. They must point out, however, that
clause 2, relating to what is usually described as the freedom
of the seas, is open to various interpretations, some of which
they could not accept. They must, therefore, reserve to them
selves complete' freedom on this subject when they enter the
peace conference.
“ ‘ “ Further, in the conditions of peace laid down in his ad
dress to Congress of January 8, 1918, the President declared
that invaded territories must be restored as well as evacuated
and freed, and the allied Governments feel that no doubt ought
to be allowed to exist as to what-this provision implies. By it
they understand that compensation will be made by Germany
for all damage done to the civilian population of the Allies and
their property by the aggression of Germany by land, by sea,
and from the air.”
“ *I am instructed by the President to say that he is in agree
ment with the interpretation set forth in the last paragraph
of the memorandum above quoted. T am further instructed by
the President to request you to notify the German Government
that Marshal Focli has been authorized by the Government of
the United Slates and the Allied Governments to receive prop
erly accredited representatives of the German Government,
and to communicate to them the terms of the armistice.
“ ‘ Accept, sir, with renewed assurances o f my highest con
sideration.
“ ‘ (Signed)
B o h e k t L a n s i n o .’
“Among other things the President, on January 8, 1918, in
his address to Congress said:
“ ‘ We entered this war because violations of right had
occurred which touched us to the quick and made the life of
our own people impossible unless they were corrected and the
world secured once for all against their recurrence. What we
demand in this war, therefore, is nothing peculiar to ourselves.
It is that the world be made fit and safe to live in ; and par
ticularly that it be made safe for every peace-loving nation
which, like our own, wishes to live its own life, determine its
own institutions, be assured of justice and fair dealing by the
other peoples of the world as against force and selfish aggres
sion. All the peoples o f the world are in effect partners in this
interest, and for our own part we see very clearly that unless
justice be done to others it will not be done to us. The pro
gram of the world’s peace, therefore, is our program; and that
program, the only possible program, as we see it, is this:
“ *I- Open covenants of peace, openly arrived at, after which
there shall be no private international understandings, of any
147311—20090
.
31
kind but diplomacy shall proceed always frankly and In the
public view.
“ ‘ II. .Absolute freedom of navigation upon- the seas, outside
territorial waters, alike in peace and in war, except as the
seas may be closed in whole or in part by international action
for the enforcement of international covenants.
“ ‘ III. The removal, so far as possible, of all economic bar
riers and the establishment of an equality of trade conditions
among all the nations consenting.to the peace and associating
themselves for its maintenance.
“ ‘ IV. Adequate guarantees given and taken that national
armaments will be reduced to the lowest point consistent with
domestic safety.
‘" V . A free, open-minded, and absolutely impartial adjust
ment of all colonial claims, based upon a strict observance of
the principle that in determining all such questions of sover-,
eignty the interests of the populations concerned must have
equal weight with the equitable claims of the Government
whose title is to be determined.
“ * VI. The evacuation of all Russian territory and such a
settlement of all questions affecting Russia as will secure the
best and freest cooperation of the other nations- of the world
in obtaining for her an unhampered and unembarrassed oppor
tunity for the independent determination of her own political
development and national policy and assure her of a sincere
welcome into the society of free nations under institutions of
her own choosing; and, more than a welcome, assistance also
of every kind that she may need and may herself desire. The
treatment accorded Russia by her sister nations in the months
to come will be the acid test of their good will, of their com
prehension of her needs as distinguished from their own inter
ests, and o f their intelligent and unselfish sympathy.
“ ' VII. Belgium, the whole world will agree, must be evacu
ated and restored, without any attempt to limit the sovereignty
which she enjoys in common with all other free nations. No
other single act will serve as this will serve to restore confi
dence among the nations in the laws which they have them
selves set and determined for the government of their rela
tions with one another. Without this healing act the whole
structure and validity of international law is forever impaired.
“ ‘ VIII. All French territory should be freed and the invaded
portions restored, and the wrong done to France by Prussia
in 1871 in the matter o f Alsace-Lorraine, which has unsettled
the peace of the world for nearly 50 years, should be righted,
in order that peace may once more be made secure in the
interest of all.
“ ‘ IX. A readjustment of the frontiers of Italy should be
effected along clearly recognizable lines of nationality.
“ ‘ X. The peoples of Austria-Hungary, whose place among
the nations we wish to see safeguarded and assured, should be
accorded the freest opportunity of autonomous development.
“ ‘ XI. Roumania, Serbia, and Montenegro should be evacuated;
occupied territories x-estored; Serbia accorded fi*ee and secure
access to the sea; and the relations of the several Balkan
States to one another determined by friendly counsel along
historically established lines of allegiance and nationality; and
147311— 20090
international guarantees of the political and economic inde
pendence and territorial integrity of the several Balkan States
should be entered into.
“ ‘ X II. The Turkish portions o f the present Ottoman Empire
should he assured a secure sovereignty, but the other nation
alities which are now under Turkish rule should be assured
an undoubted security o f life and an absolutely unmolested
opportunity of autonomous development, and the Dardanelles
should be permanently opened as a free passage to the ships
and commerce o f all nations under international guarantees.
“ ‘ X III. An independent Polish State should be erected which
should include the territories inhabited by indisputably Polish
populations, which should be assured a free and secure access to
the sea, and whose political and economic independence and ter
ritory integrity should be guaranteed by international covenant.
“ ‘ X IV. A general association of nations must be formed
under specific covenants for the purpose o f affording mutual
guaranties of political independence and territorial integrity
to great and small States alike.’ ”
[Letter from King George to the Sultan of Egypt, published in London
Times Decembei-^21, 1914.]
“ * * * I feel convinced that you will be able, with the
cooperation o f your ministers and o f the protectorate o f Great
Britain, to overcome all influences which are seeking to destroy
the independence of Egypt * *
[Cablegram to Mahmoud Pasha, Shoreham Hotel, from Mahmoud
Soliman Pasha.]
“ In an interview with Cairo newspapers on the 22d instant
Rushdi Paslia—who was prime minister when the Khedive was
dethroned by England and a Sultan appointed, and continued
throughout the war as prime minister of Egypt and resigned
toward the end of May last—declared that lie never consented
to the "protectorate” of Great Britain over Egypt, except that
it was temporary and a war measure, and that it would disap
pear when the Allies’ victory was complete. He asked England
to hear him and to hear the Egyptian nation duly represented
by the Egyptian delegation. He adds that Egypt’s aid to Eng
land during the war was immense, and that 1,200,000 Egyptians
served on the allied side.”
147311— 20090
o
INTERNATIONAL FINANCIAL CONFERENCE
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN THE
SENATE OF THE UNITED STATES
FRIDAY, JANUARY 16, 1920
¥
WASHINGTON
GOVERNMENT PRINTING OFFICE
H)20
159469— 20327
SPEECH
H O N . R O B E R T L. O W E N .
INTERNATIONAL F IN A N C IA L CONFERENCE.
1 ?>,,
I,
Mr. OWEN. Mr. President, I wish to call the attention of the
Senate to a matter which I regard as of very great national and
international importance. It is a proposal on the part of the
leading business men of the United States and of the Govern
ments of Europe for an international conference for the purpose
of bringing about a readjustment of the credits of the world.
The American dollar has lost in its purchasing power in an
important way during the last few years; that is, in terms of
commodities, but not in terms of gold.
The reasons why the American dollar has lost in its purchas
ing power I wish to call to the attention of the Senate.
First, it is due to a great world shortage of commodities
arising from the destruction incident to the war, the stoppage
of the processes of production and distribution of goods during
the war, and the extraordinary demand from Europe for the
products of this country; second, great gold imports in exchange
for goods, about $1,100,000,000; third, the expansion of credits
in the United States. We have issued an enormous amount of
bonds. Not only has the United States expanded its bond issues
on a very large scale, amounting to over $26,000,000,000, but our
municipalities and our States have expanded these forms of
credit. Such bonds in the hands of the people are readily con
verted into money under our system.
The expansion of bank deposits, easily converted into money,
other stocks and bonds, easily salable on the stock exchange
and convertible into money, and in America these dollars are
exchangeable for gold, and the holder of a note can obtain gold
at his option.
The same thing has happened abroad; there has been in the
Old World an expansion of credits in the form of bonds and
other securities on a gigantic scale, and, still worse, a huge
inflation of paper currency, no longer redeemable in gold.
As a currency increases in quantity it diminishes pro rata in
its purchasing power, in its power to obtain goods by exchange of
money for goods.
I call attention to the fact that the so-called resources, and
liabilities as well, of the national banks have increased from
$10,000,000,000 to $21,000,000,000 in the last half dozen years—
since 1913. The expansion of the so-called resources, which
means also liabilities, upon the part of all of the banks of the
United States, including all classes of banks, have increased
from $25,000,000,000 to $47,000,000,000. The same kind of ex
pansion has been going on in Europe. Because of these factors
the American dollar has lost a part of its purchasing power in
America, and the purchasing power of the currency of Europe
has been still further diminished, measured in terms of American
o
V ,
159469— 20327
J
i
gold, because of the inflation there. The German mark has
gone down to from approximately 24 cents in gold to 1.8 cents
in gold ; the same currency in Poland is worth 0.8 of a cent; in
Roumania 0.7 of a cent; and in all other countries which have
been torn by war the expansion of currency has diminished
the purchasing power of that currency, as with the French
franc and the Italian lire ; so that when you come to exchange
these forms of currency for the American dollar the exchange
rate has gone down so severely that the pound sterling, which
has always been regarded as the standard currency of the world,
if I may use such an expression. The pound sterling is bringing
$3.73 instead of $4.86; the French franc instead of exchanging
5.18 francs for $1—a dollar of this diminishing purchasing
power—is exchanging at the rate of 11.50 francs for the dollar,
and the Italian lire 13 and a fraction for the dollar. The conse
quence is that the export business of the United States— and I
call the attention of the Senate to its responsibility in this
matter—is being tremendously interfered with.
I have appealed from time to time to the administration to try
to bring about an adjustment of this matter by an international
conference, and, without pausing to read it, I place in the R ecord
a letter which I addressed to the President of the United States
on November 6 last, one of a series of efforts which I have made
to attract the attention of the Senate and the attention of this
Government to the importance of this question.
The PRESIDENT pro tempore. Without objection, the letter
will be printed In the R ecord.
The letter referred to is as follows;
jl x u L a j L J L m j i v r ,
The White House.
M y D ear M r . P resident : Will you not permit me again to call
your attention to the importance of stabilizing international ex
change? Our excess commodity shipments over imports have
fallen from six hundred millions in June to one hundred and
fifty-eight millions in September. Our export houses are in dis
tress and the exchange rates are going down to the lowest re
corded point.
Francs, 9.05; lire, 11.07; sterling, 4.15.
The British sterling was sustained by a recent loan of two
hundred and fifty millions placed in the United States.
British currency, French currency, Italian currency have gone
through a serious inflation, and their paper money is not on a
gold par basis. The Italians buying American goods must pav
the present high prices plus very high transportation chargesfor example, $28 a ton on coal plus twice the total in lire. It is
obvious that this is ruinous to our foreign commerce with Italy
and is making it impossible for our allies to get back to normal
production as promptly as we had hoped.
The Europeans can not sell credits in the terms of their cur
rency, because they are not only not on a gold basis but there
is reason to fear further inflation in the absence of a declared
policy to the contrary.
The gold standard is temporarily broken down and ought to
be promptly restored. It can be done.
The investing public of the United States is able and would be
willing to extend the credits necessary to finance our foreign ex159469— 20327
ports, provided the mechanism were available and sound economic
policies were declared by the Governments whose trade is in
volved.
The problem is well understood by many men, but apparently
is not well understood by the men and officials responsible for
government.
I regard this question as of the first magnitude and I respect
fully request you to invite an international exchange conference
to be held in Washington City with representatives of the leading
nations of Europe present to meet with your representatives here.
I request that this suggestion be submitted to the Secretary
of the Treasury, the governor of the Federal Reserve Board, and
the Secretary of Commerce for an immediate report to you.
Yours, very respectfully,
:k .
R obt. L. O w e n .
if!' ji
Mr. OWEN. 1 ask to place in the R ecord, without reading,
the action taken in New York on the 14tli of January, as reported
in the New York Times of the 15tli of January, in which the
representative men of the United States and of Great Britain,
of Holland, of Switzerland, of Denmark, Norway, and Sweden
urged an international conference. In order to have the Senate
realize that this is a very urgently important matter, I call the
attention of the Senate to the names of some of these men, in
cluding Edwin A. Alderman, of the University of Virginia;
Robert L. Brookings, of St. Louis; Cleveland H. Dodge, of New
Y ork ; Charles W. Eliot, of Cambridge, Mass.; James B. Forgan,
of Chicago; Arthur T. Hadley, of Yale College; Myron T. Her
rick, of Cleveland; Herbert Hoover, o f San Francisco; Darwin
P. Kingsley, of New York, president of the New York Life In
surance C o.; George H. McFadden, a great cotton exporter of
Philadelphia; A. W. Mellen, of the Mellen Bank of Pittsburgh;
J. P. Morgan, of Morgan & Co., New Y ork; George M. Reynolds,
of Chicago; Elihu Root, of New Y ork ; Charles H. Sabin, of New
York, president of the Guaranty Trust Co., and a large number
of others.
I am not going to read the statement made by these men, but
I put it in the R ecord, and I appeal to Senators who are inter
ested in the commerce of this country to look at it and see
■what it means. I think it is of the greatest possible impor
tance that the stability of the credits of the world should be
brought about as speedily as possible.
Mr. GRONNA. Mr. President-----The PRESIDENT pro tempore. Does the Senator from Okla
homa yield to the Senator from North Dakota?
Mr. OWEN. I yield to the Senator.
Mr. GRONNA. I am aware of the fact that the Senator
from Oklahoma has given this matter a great deal of study. I
should be very much pleased to have the Senator outline or
suggest the remedy.
Mr. OWEN. The remedy, Mr. President, is not very easy,
and it is easier to ask the question than it is to answer it, but
I will undertake to answer it.
Mr. GRONNA. I ask the question, and I think I have a right
to ask it, for the reason that only a short time ago the Senator
from Oklahoma and other Senators argued that the passage of
a certain measure which was then before the Senate would
159469— 20327
"l f
5
remedy the situation. The Senator knows as well as I know,
and perhaps better, that it has not remedied the situation.
Mr. OWEN. I prefer the Senator should not state what the
Senator from Oklahoma knows, because he might exceed the
mark. I will make the observation to the Senator, however,
that I stated repeatedly that the Edge bill was only a palliative
in a small degree. I favored it only on that ground; but it
was all the Republican Senators would agree to and it is in
adequate. I offered other remedies that were refused support;
it did not at all meet the requirements which I thought were
necessary.
In order to bring back the world to a condition of stability
many things are necessary; it will be necessary to deflate the
currency, which at present is being expanded by the printing
press without responsibility in some countries. Russia has
gone to such an extent that the Russian ruble is put out by the
billions upon top of billions, without any intention of ever re
deeming it, with a steadily diminishng value.
Mr. GRONNA. Mr. President, will the Senator yield?
Mr. OWEN. I yield to the Senator from North Dakota.
Mr. GRONNA. I am sure the Senator has given this matter
more attention than I have; but, if he will permit me, I will
say that, so far as I am concerned, I do not agree with him
that we should help to deflate the currency, nor do I believe
that that is a remedy. In my humble judgment the remedy is
to help Europe produce more, so as to enable her to offset her
debts, her obligations, with her products. That will regulate
it, and not any act to deflate the currency, either in this coun
try or in any other country.
Mr. OWEN. The Senator has not permitted me, of course, to
answer the question he originally propounded. He has an
swered it himself in part, and I agree with him in the answer
he has made, so far as to assert it is absolutely necessary that
Europe be put back upon production. Men must work, econo
mize, and create values, but the mechanism of exchange, the
moneys of the world, must be put on a basis of stability, on a
known basis of value, and men must not use the printing press
to issue securities without intention of redemption nor without
the ability to redeem. These countries, however, in order to be
put back on a condition of stabilized credit must stop inflating
their currency and must put their currency back upon a basis
which will be approximately the same basis— the gold basis or •
some other agreed basis—which is common to the whole world
The European nations must adjust their budgets to their
income from taxes and keep within their income because until
they do the inflation will continue in currency and in bonds.
They must bring their currency back to par of gold and do it
by an arbitrary adjustment at the present relative value of
such currency.
They must adjust their war bonds to same standards and
issue new bonds payable in gold on long time and low rate so
that the taxpayers shall only pay the present gold value of
such bonds and not be required to pay from three to ten times
the present gold value of such bonds.
Mr. KIRBY. Mr. President-----Mr. OWEN. I yield to the Senator from Arkansas.
Mr. KIRBY. I understand the condition as stated by the
Senator from Oklahoma. I do not understand, however whether
159469— 20327
Ki'l
S
the remedy suggested or that might be suggested by the confer
ence would be one that would enhance the value of the dollar on
the other side or reduce the value of the dollar on this side. In
other words, I understand that both our dollars have become
cheap in the way of purchasing commodities, but on the other
side of the world their money has become so much more cheap
that they have to pay two or three times in products the price
of our dollar in order to trade with us, and on that account trade
languishes. Now, would we increase the price of the dollar on
the other side; and if so, how can it be done unless at the ex
pense of our own dollar?
Mr. OWEN. In order to arrive at a just understanding of
this matter it is necessary to observe what the foreign exchanges
really mean. Take, for instance, the exchanges of Norwav and
of Sweden and of Holland and of Switzerland. While theV are
affected by the excess of commodity shipments from the United
States, they are not affected by an inflation of their currency.
The same thing is true of the exchanges with regard to Spain.
Spain being upon a gold basis and the commodity shipments
being somewhat in excess to Spain in our favor, the Spanish
peseta is a little below p a r; but side by side, across an invisible
line, you enter into France, and there the French franc is worth
only one-third of a peseta, approximately, although nominally
each is equal to 19.30 cents in gold, showing that the inflation of
the currency in France has affected the value of the currency,
in addition to the balance of trade being against them. The
balance of trade affects all of Europe, of course; but it is
shown by the currency of Holland and the currency of Nor
way and Sweden and Switzerland and Spain that* they are
only comparatively slightly affected by the balance o f trade in
our favor, while Great Britain is more seriously affected, be
cause it has inflated its currency, and France still more, be
cause the inflation there has gone to a point where they have
outstanding now 38,000,000,000 francs, amounting to approximately^$200 per capita of money in circulation, while here we
have $56 as a gross, and about $46 per capita, considering the
amount which is sequestered -in the reserve banks.
The following table will make this clear:
Foreign exchanges.
Normal rate.
London........................ $1.86.............
To-day’s rate.
S3.72
Paris............................
11.50 francs__
dollar.
Belgium........................ 5.18 francs per 11.40.............
dollar.
Italy............................. 5.18 lire to dol 13 20
lar.
Germany...................... $23.83 ........... $1.75
Russia.......................... $51.44..........
Holland........................ $40.20 .
$3.
$37 37
Switzerland.................. $5.18
$5.56..............
Spain............................ 19.30 cents___ 19.10cents per
peseta.
159469— 20327
Dis
count.
Per ct.
24 C u r r e n c y in
flated.
■ 55
Do.
54
Do.
62
Do.
90 Currency grossly
inflated.
95
Do.
9 Currency near
normal.
7
Do.
1 Currency normal.
7
Great Britain has doubled its currency during the war and
more than doubled the deposits, and gold bought with English
money costs 110 shillings an ounce instead of 79 shillings, the
normal rate, before the war— a discount of 25 per cent in the
purchasing power of English paper money.
Neither Great Britain, France, Belgium, Italy, Austria, Ger
many, Russia, or any of the east European belligerents are on
a gold basis.
It will take world action to put them into production and
world credits. They can not buy; they can not pay unless
assisted by international and internal reconstruction legislative
action. If they do not buy and do not pay, it will seriously
threaten our financial and commercial stability. Our foreign
exports must cease.
Our banks holding great amounts in foreign securities and
credits will be put in serious danger and industrial disturbances
of a grave nature may be anticipated. No time should be lost.
Much valuable time has been lost already.
The peace treaty should be ratified at once with or without
reservations.
I want to call the attention of Senators to this matter,
because it vitally effects every single State in the Union. It
affects the value of the manufactured products of New England,
and of the cotton of the South, and of the wheat of the West,
and of the mineral ores of our various States; and you gentle
men who are responsible to this country ought to understand
this and ought to consider it. Now, here the business men
of the country are going to call an international conference
of the first magnitude and bring the leading business men of
the .whole world together to try and solve this problem, so that
they with their combined forces can appeal to the statesmen
of the world to take the steps necessary to stabilize the world
and to reconstruct the world and to put it upon a basis of
stability and credit, so that our merchants and manufacturers
can interchange their commodities, because after all it is an
interchange of commodities or an interchange of the products
of labor. What the Senator from North Dakota said was truly
said, that the remedy at last is work, orderly work, and avoid
ing extravagance in government and extravagance in private
life. The remedy is to restore the world by personal economy
and by personal production and by improving the processes of
distribution, but the mechanism of exchange and of currency
is absolutely essential to the conduct of international business
The Governments of Europe must act and put their budgets
in order; must deflate their currency; must readjust their war
debts; must arrange to underwrite the loans needed to buy
raw material and seed and supplies to start production; and the
nations able to furnish the raw material and credits should
do so by opening the doors to the investment public and havina
the loans properly secured by the nations seeking credits for
their citizens.
W hen a convention is called io arrange these details, the
representatives of labor should be present; and, above all, the
representatives of the highest rank in the various Governments
should participate to see that justice is done to the people who
will meet the burdens of these readjustments.
The PRESIDENT pro tempore. The request of the Senator
from Oklahoma is granted.
159469— 20327
The matter referred to is as follow s:
[F r o m
th e
N ew
Y ork
T im e s
o f T h u rsd ay, Jan.
15,
1 9 2 0 .]
P o w e r s t o C o n f e r on W o r l d F i n a n c e — S i m u l t a n e o u s A p p e a l t o
N a t io n s t o C a l l I n t e r n a t io n a l E c o n o m ic C o n f e r e n c e — N a t io n a l
L e a d e r s S ig n i t — P l a n P r o p o s e s t o L i m i t C r e d it s a n d F o r c e t h e
P e o p l e t o R e h a b i l i t a t e E u r o p e — P r i v a t e A id i s
Su ggested— L e s s e n in g o f t h e F in a n c ia l D e m a n d s on G e r m a n y a n d A u s t r ia
M a d e in T r e a t y P r o p o s e d .
i ■
“ A request that representatives be appointed as soon as possi
ble to an international economic conference is being made simul
taneously to-day to the Governments of Great Britain, France.
Holland, Switzerland, Denmark, Norway, and Sweden to the
United States Government, the Reparation Commission, and the
United States Chamber of Commerce. The request is in the
form of a memorandum, which sets forth, in brief outline, the
ideas of the various signatories as to how the work of rehabili
tating the world’s financial and commercial structure should be
undertaken.
“ The precise origin of this movement has not been disclosed.
Leading American financiers who are interested in it declined
yesterday to say whether or not the matter had first been
broached by them or by some interests in Europe. However,
great stress' was laid on the widespread demand for such a con
ference, and it was said that within the last few weeks what
virtually amounted to spontaneous petitions for such a confer
ence had been received by the leading financial and commercial
representatives of all the countries which have become parties
to the memorandum.
“ Abroad, the request is directed to the several Governments.
They, according to the plan, are to appoint the delegates to the
proposed conference. In the United States a somewhat different
procedure is being adopted. The United States Chamber of
Commerce is asked to appoint the American delegates, partly
because of its Nation-wide affiliations and partly because here
it is desired to have participation in the conference kept on an
unofficial basis. The American signatories feel that the problems
outlined in the memorandum should be met, as far as is possi
ble, through private initiative, but with the United States Gov
ernment extending its moral support.
OPPOSED
Si
159469— 20327
I
TO P A IS H
C R E D IT P L A N .
“ The memorandum takes issue squarely with the scheme,
recently attributed to Sir George Paish, of an international
credit arrangement in which all of the leading Governments
should take active part. Quite the opposite position is as
sumed by emphasizing the necessity of encouraging to the
greatest extent possible ‘ the supply of credit and the develop
ment of trade through normal channels.’
“ The proposed conference will be composed of representatives
of the leading countries, both belligerent and neutral, of Eu
rope, the central European countries, Japan, and the chief ex
porting countries of South America. These representatives, it
is further purposed, will bring with them all pertinent informa
tion. and it is expected that as a result of the conference recom
mendations will be made as to what measures may best be taken
in the various countries in order to revive and maintain inter
national commerce.
“ One of the American signatories, in commenting on the re
quest for the conference, said :
9
“ ‘ One might sum up the document as a call to the people to
return to prewar standards of reason, an appeal to the repara
tion commission for wise moderation as to the best business
policy for all concerned; an appeal to Governments to arrest
inflation and meet inevitable burdens by increasing their reve
nue rather than by further increasing their debts; an appeal
to the people to work and to save; and, finally, an appeal ro
leaders of commerce and finance to get together in order to study
the problem dispassionately and take it up as a business propo
sition, relying on independent action rather than Government
intervention. Governments must be relied upon, however, to
remove as rapidly as possible the obstacles that impede such a
course.’
m em orandum
to
the
governm ent.
“ The full text of the memorandum submitted to the United
States Government, the reparations commission, and the United
States Chamber of Commerce follows. It is substantially the
same as the documents submitted abroad:
“ ‘ The undersigned individuals beg leave to lay before their
Government, the reparations commission, and the Chamber of
Commerce of the United States the following observations and
to recommend that the Chamber of Commerce of the United
States designate representatives of commerce and finance to
meet forthwith (the matter being of the greatest urgency) with
those of other countries chiefly concerned, which should include'
the United Kingdom and the British dominions, France, Bel
gium, Italy, Japan, Germany, Austria, the neutral countries o f
Europe, the United States, and the chief exporting countries of
South America, for the purpose of examining the situation
briefly set forth below and to recommend upon the basis of
authentic information what action in the various countries is
advisable among the peoples interested in reviving and m a in
taining international commerce.
“ ‘ They venture to add to the above recommendation the fol
lowing observations:
“ ‘ The war has left to conqueror and conquered alike the
problem of finding means effectively to arrest and counteract
the continuous growth in the volume of outstanding money and
of Government obligations, and, its concomitant, the constant
increase of prices. A decrease of excessive consumption and an
increase of production and taxation are recognized as the most
hopeful, if not the only, remedies. Unless they are promptly
applied, the depreciation of money, it is to be feared, will con
tinue, wiping out the savings of the past and leading to a
gradual but persistent spreading of bankruptcy and anarchy in
Europe.
THE
P E R IL S
OF
IN F L A T IO N .
“ ‘ There can be no social or economie future for any country
which adopts a permanent policy of meeting its current ex
penditure by a continuous inflation of its circulation and by
increasing its interest-bearing debts without a corresponding
increase of its tangible assets. In practice, every country will
have to be treated after careful study and with \lue regard to
its individual conditions and requirements. No country, how
ever, is deserving of credit, nor can it be considered a solvent
debtor, whose obligations we may treat as items of actual value
in formulating our plans for the future that will not or can.
1 5 9 4 G 9 — 2 0 3 2 7 ---------- 2
V
I
i A
YV
not bring its current expenditure within the compass of its re
ceipts from taxation and other regular income. This principle
must be clearly brought home to the peoples of all countries,
for it will be impossible otherwise to arouse them from a dream
of false hopes and illusions to the recognition of hard facts.
“ ‘ It is evident that Germany and Austria will have to bear
a heavier load than their conquerors, and that, in conformity
with the treaty of peace, they must bear the largest pos
sible burden they may safely assume. But care will have to
be taken that this burden does not exceed the measure of the
highest practicable taxation and that it does not destroy the
power of production, which forms the very source of effective
taxation.
“ ‘ For the sake of their creditors and for the sake of the
world, whose future social and economic development is in
volved, Germany and Austria must not be rendered bankrupt.
If, for instance, upon close examination the commission des
reparation finds that, even with the most drastic plan of taxa
tion of property, income, trade, and consumption the sums
that these countries will be able to contribute immediately
toward the current expenses of their creditors will not reach
the obligations now stipulated, then the commission might be
expected to take the view that the scope of the annual contribu
tion must be brought within the limits within which solvency
-can be preserved, even though it might be necessary for that
purpose to extend the period of installments.
“ ‘ The load of the burden and the period during which it is
to be borne must not, however, exceed certain bounds; it must
not bring about so drastic a lowering o f the standard o f living
that a willingness to pay a just debt is converted into a spirit
.of despair and revolt.
“ ‘ It is also true that among the victorious countries there
are some whose economic condition is exceedingly grave, and
which will have to reach the limits of their taxing powers. It
appears, therefore, to the undersigned that the position of these
countries, too, should be examined from the same point of view
o f keeping taxation within the power of endurance and within
a scope that will not be conducive to financial chaos and social
unrest.
THE
PROBLEM
OP
C A P IT A L .
“ ‘ When once the expenditure of the various European coun
tries has been brought within their taxable capacity, which
should be a first condition of granting them further assistance,
and when the burdens of indebtedness as between the different
nations have been brought within the limits of endurance, the
problem arises as to how these countries are to be furnished
with the working capital necessary for them to purchase the
imports required for restarting the circle of exchange, to re
store their productivity, and to reorganize their currencies.
“ ‘ The signatories submit that, while much can be done
through normal banking channels, the working capital needed
is too large in amount and is required too quickly for such
channels to be adequate. They are of opinion, therefore, that a
more comprehensive scheme is necessary. It is not a question
o f affording aid only to a single country, or even a single group
o f countries which were allied in the war. The interests of
the whole of Europe, and indeed of the whole world, are at
stake.
159469— 20327
« ‘ It is not our intention to suggest in detail the method by
which such international cooperation in the grant of credit
may be secured. But we allow ourselves the following observa
tions :
“ 11 . The greater part of the funds must necessarily be sup
plied by those countries where the trade balance and the ex
changes are favorable.
“ ‘ 2. Long-term foreign credit, such as is here contemplated, .
is only desirable in so far as it is absolutely necessary to re
store productive processes. It is not a substitute for those
efforts and sacrifices on the part of each country, by which
alone they can solve their internal problem. It is only by the
real economic conditions pressing severely, as they must, on
the individual that equilibrium can be restored.
“ ‘ 3. For this reason, and also because of the great demands
on capital for their own internal purposes in the lending coun
tries themselves, the credit supplied should be reduced to the
minimum absolutely necessary.
“ ‘ 4. Assistance should as far as possible be given in a form
which leaves national and international trade free from the
restrictive control of Governments.
“ ‘ 5. Any scheme should encourage to the greatest extent pos
sible the supply of credit and the development of trade through
normal channels.
“ ‘ 6. In so far as it proves possible to issue loans to the public
in the lending countries, these loans must be on such terms as
will attract the real savings of the individual; otherwise infla
tion would be increased.
“ ‘ 7. The borrowing countries would have to provide the best
obtainable security. For this purpose it should be agreed that—
“ ‘ a. Such loans should rank in frontof all other indebted
ness whatsoever, whether internal debt, reparation payment, or
interallied governmental debt.
“ ‘ b. Special security should be set aside by the borrowing
countries as a guarantee for the payment of interest and
amortization, the character of such security varying perhaps
from country to country, but including in the case of Germany
and the new States the assignment of import and export duties
payable on a gold basis, and in the case of States entitled to
receipts from Germany a first charge on such receipts.
M UTU AL
H ELPFU LN ESS
PARAM O U N T.
“ ‘ The outlook at present is dark. No greater task is before
us now than to devise means by which some measure of hope
fulness will reenter the minds of the masses. The reestablish
ment of a willingness to work and to save, of incentives to the
highest individual effort and of opportunities for every one to
enjoy a reasonable share of the fruit of his exertions must be
the aim toward which the best minds in all countries should
cooperate. Only if we recognize that the time has now come
when all countries must help one another can we hope to bring
about an atmosphere in which we can look forward to the
restoration of normal conditions and to the end of our present
evils.
“ ‘ In conclusion the signatories desire to reiterate their con
viction as to the very grave urgency of these questions in point
of time. Every month which passes will aggravate the problem
and render its eventual solution increasingly difficult.
All
159469— 20327
the information at their disposal convinces them that very
ciitical days for Europe are now imminent and that no time
must be lost if catastrophes are to be averted.’
A M E R IC A N
%
..
> '...
\
■ .I'll I
,
r
S IG N A T O R IE S .
“ The American signatories are: Edwin A. Alderman, Univer
sity of Virginia; Frank B. Anderson, San Francisco; Julius H
Barnes, Duluth; Robert L. Brookings, St. Louis; Emory W.
Clark, Detroit; Cleveland H. Dodge, New York; Charles W.
Eliot, Cambridge, Mass.; Herbert Fleisclihacker, San Francisco;
James B.Forgan, Chicago ; Arthur T. Hadley, Yale College ; R. S.
Hawkes, St. Louis; A. Batron Hepburn, New York; Myron T
Herrick, Cleveland; Lolis W. Hill, St. Paul; Herbert Hoover,
San Francisco; H. E. Judson, University of Chicago; Darwin
P. Kingsley, New Y ork ; George H. McFadden, Philadelphia; Al
fred E. Marling, New York; A. W. Molten, Pittsburgh; A. L
Mills, Portland, Oreg.; J. P. Morgan, New York; William Fellowes Morgan, New Y ork ; F. H. Rawson, Chicago; Samuel Rea,
Philadelphia; George M. Reynolds, Chicago; R. G Rhett
Charleston, S. C .; Elihu Root, New Y ork; Levi L. Rue, Philadel
phia ; Charles H. Sabin, New York; Jacob H. Schiff, New York;
Edwin R. A. Seligman, Columbia College; John C. Shedd, Chi
cago ; John Shmerwin, Cleveland ; James A. Stillman, New Y ork;
Henry Susalle, University of Washington ; William JI. Taft, New
Haven ; F. H. Taussig, Harvard University ; Frank A. Vanderlip
New Y ork ; Festus J. Wade, St. Louis; Paul M. Warburg New
Y ork ; F. C. Watts, St. Louis; Harry A. Wheeler, Chicago;’ Dan
iel Willard, Baltimore.
“ The names of the European signers of the memorandum,
classified as to country, are given below. The list of French sig
natories has not been received here, due to a delay in cable
service:
G R E A T B R IT A IN .
Y'
il
si.
.. ftii
i"
>
'£ ■
“ Sir Richard Vassar Smith, Bart., chairman of Lloyds BankLord Inchcape, G. C. M. G., Iv. C. S. I., chairman National Pro
vincial & Union Bank and chairman Peninsula & Oriental
Steam Navigation Co; Walter Leaf, chairman London County
& Westminster Bank; Right Hon. Reginald McKenna, P. C
chairman London Joint City & Midland Bank; Sir Robert
Kindersley, K. B. E„ chairman National Savings Committee,
director Bank of England, partner Lazard Bros.; Sir Charles
Addis, chairman Flongkong & Shanghai Banking Corporation,
director Bank of England; Edward Charles Grenfell, senior
partner Messrs. Morgan, Grenfell & Co., director Bank of Eng
land ; Hon. Robert Henry Brand, C. M. G., formerly chairman
Supreme Economic Council of the Allies, formerly assistant
secretary of state for foreign affairs; Right Hon. Herbert Henry
Asquith, P. C., formerly prime minister; Right Hon. Sir Donald
Maclean, K. B. E., leader, Liberal Party in House of Commons
Right Hon. John Henry Thomas, M. P., leader of Labor Party
Right Hon. John Robert Clynes, M. P., leader of Labor Party
Viscount Bryce, G. G., V. C., ex-ambassador to the United States]
HOLLAND.
“ Dr. G. Vissering, president, Bank of the Netherlands; C. E.
ter Meulen, banker, member of firm Hope & Co; Joost van
Vollenhoven, manager Bank of the Netherlands; .Tonlcheer
Dr. A. P. C. van Karnebeek, minister of state, president Car
negie Foundation; J. J. G. Baron van Voorst tot Voorst presi159469— 20327
13
dent first chamber of Parliament; Dr. D. Fock, president sec
ond chamber of Parliament; Jonkheer Dr W. H. de Savornin
Luhman, president high court of justice; A. W. F. Idenburg, for
merly governor general Dutch East Indies, formerly minister of
colonies; S. P. van Eeghen, president Amsterdam Chamber of
Commerce; E. P. de Monchy, president Rotterdam Chamber of
Commerce; C. J. K. van Aalst, president Amsterdam Bankers’
Association; G. H. Hintzen, banker, member of firm R. Mees &
Zoonen, Rotterdam; F. M. Wibaut, alderman of Amsterdam; G.
M. Boissevain, economist; E. Heldring, manager Royal Dutch
Steamship Co.
S W IT Z E R L A N D .
“ Gustave Ador, president International Red Cross; Eduard
Blurner, president National Council; Alfred Fery, president
Swiss Federation of Industry and Commerce; Rodolphe de
Haller, vice president Banque Nationale; Jean Hirter, president
Banque Nationale; Dr. Ernst Laur, secretary Swiss Agricultural
Union; Auguste Pettarel, president State council; Ernest Picot,
Federal judge; Guillanme Pictet, banker; Alfred Sarasin, presi
dent Swiss Bankers’ Association; Michel Schnyder, president
Swiss Press Association; Dr. Hans Tschumi, president Union
Suisse des Arts et Letiers.
DENMARK.
“ C. C. Andersen, chairman of the Socialist Party in the
Landsting; F. I. Borgbjerg, member of the committee of the
Social Group of the Rigsdag; I. C. Christensen, chairman of
the Liberal Party of the Folketing; C. C. Clausen, chairman of
the Merchants’ Guild; C. M. T. Cold, chairman of the Danish
Steamship Owners’ Society; Alex. Voss, chairman of the Cham
ber of Manufacturers’ Association; E. Glueckstadt, managing
director of the Danske Landsmandsbank; Johan Ivnudsen, chair
man of the Conservative Party in the Folketing; Thomas Mad
sen Mvgdal, chairman of the United Danish Agricultural So
cieties; A. Tesdorpf, member of the board of directors of the
Royal Danish Agricultural Society; A. Nielsen, president of the
Board of Agriculture; I. P. Winther, I. Lauridsen, C. Ussing,
Marcus Rubin, and Westv Steplionsen, managing directors of
the National-Banken in Ivopenhagen; Jorgen Pedersen, chair
man of the Liberal Party of the Landsting; L. G. Piper, chair
man of the Conservative Party of the Landsting; C. Slengerik,
chairman of the Radikal Liberal Party of the Folketing; Her
man Trier, chairman of the Radikal Liberal Party of the
Landsting.
NORW AY.
“ Otto B. Halvorsen, speaker of Parliament; Jens Tandberg,
bishop of Christiania; Fridtjof Nansen, professor and explorer •
Hakon Loelcen, governor of Christiania ; Bernt Holtsmark, party
leader; A. Jahresn, party leader; J. L. Lemovinkol, party
leader; K. Bomhoff, president Bank of Norway; Alf Buercke,
Thune Larnsen, Carl Kierulf, Victor Plahte, Carl Ivutcheratli,
Chr. E. Lorentze, Son H. Aarensen, T. Fearnly, Chr. Platou,
presidents of financial, industrial, and commercial associations;
Thore Mvrvang, president Farmers’ and Smallholders’ Associa
tion ; Patrick Volckmar, president Norske Handelsbank.
SW EDEN.
“ J. C. A. af Joclinick, president Sveriges Riksbank; V. L.
Moll, first deputy Sveriges Riksbank; C. E. Kinander, president
159469— 20327
national debt office; J. H. R. C. Kjelberg, president Swedish
Bankers’ Association; H. L. F. Lagercrantz, president Swedish
Exporters’ Association, ex-minister to America; A. F. Vennersten, president Swedish Industrial Association, ex-secretary
of the treasury, member of Parliament; K. A. Wallenberg, presi
dent chamber of commerce, Stockholm, ex-foreign minister; M.
Wallenberg, manager Enskilda Bank; Oscar Rydbeck, manager
Skandinaviska Kredit Aktiebolaget; C. Frisk, manager Svenska
Handelsbanken; K. H. Branting, member of Parliament, ex
secretary of the treasury, deputy Sveriges Riksbank; Count
R. G. Hamilton, deputy chairman of the lower house of Par
liament; S. A. A. Lindenman, member of Parliament, rear ad
miral, ex-premier, ex-foreign minister; S. H. Kvarnzelius, mem
ber of Parliament, director national debt office; Ernst Trygger,
member of Parliament, ex-justice of the supreme court; K. G.
Cassel, professor of political economy; David Davidson, pro
fessor of political economy; E. F. K. Sommarin, professor of
political economy.”
Mr. OWEN. Mr. President, I submit with my remarks the
report of the committee on foreign trade of the American
Economic Association. I ask the privilege now o f having it
printed in the R ecord.
The PRESIDENT pro tempore. Without objection, it is so
ordeted.
The rrtatter referred to is as follow s:
J a n u a r y 9, 1920.
R eport
of
the
C o m m i t t e e o n F o r e ig n T r a d e
E c o n o m ic A s s o c ia t io n .
of
the
A m e r ic a n
This, the second report of the committee on foreign trade,
will cover the effect of the war on the volume, direction, and
the constituent commodities of international trade, and will
attempt to analyze some of the conditions that affect the outlook.
I. The. effect of the war.
The war had a very profound effect upon the trade of the
world. In belligerent countries normal production was cur
tailed and therefore exports declined. The domestic produc
tion of commodities needed by the warring nations was insuffi
cient, and these had to be imported. The excess of imports was
financed by shipments of gold, the sale of securities, and by
borrowing. The trade currents prevailing before the war were
upset.
A.
THE
VOLUM E
OF
TRADE.
The countries at war greatly increased their exports in
amount and to a less extent in tonnage. The countries on the
American Continent, on the whole, greatly increased their ex
ports. Japan did likewise. The countries blockaded, Germany
and Austria, experienced a tremendous decline in trade. The
trade of Holland, Spain, ahd Russia, declined as an incident to
the blockade. Because of the long sea voyage involved and the
shortage in shipping, the trade of British India, Australia, and
South Africa also fell in volume.
B. c o m m o d i t i e s o f t r a d e .
Because the belligerents of Europe needed enormous quanti
ties of war materials and other goods for consumption, their
imports o f manufactures increased relatively and the imports
of raw material decreased relatively. Western Europe was cut
off from its sources of food supply in Russia and Southeastern
159469— 20327
15
Europe, and the entire burden of producing food for the western
European countries was thrown upon the Americas. Australia
and India were too far removed to permit the utilization of
much needed tonnage for the long ocean trip. Because Germany
was under blockade, the countries which she had supplied with
chemicals, dyestuffs, porcelain, machinery, electrical goods, toys,
and specialties had to turn to other countries like Switzerland,
the United States, and Japan for their supply. Trade in luxu
ries was much reduced. Japan, the United States, and in gen
eral the neutrals increased their imports of raw materials and
increased their exports of manufactured goods.
There was an increased demand for commodities of all kinds
from countries that were readily accessible to Europe, and
they, therefore, suffered from a shortage of goods. On the other
hand, the demand upon the countries far removed from Europe
slackened so that there was a glut of goods, as of wheat in
Australia, wool in New Zealand, and sugar in Java.
C.
TRADE
CURREN TS.
The war resulted in the transfer of millions of men to France,
where they had to be maintained under conditions which in
creased their consumption over that of peace. Shipping routes
were therefore focused upon western Europe and created a
ship shortage in other lanes of trade, which was aggravated by
submarine warfare. The tonnage passing through the Suez
■Canal in 1913 was 20,000,000 tons and in 1917 only 8,300,000
tons. Because of the shortage in shipping, supplies for Europe
had to be brought from the nearest available center of produc
tion. Tonnage was conscripted for the trans-Atlantic service.
There was an increase of exports to Europe and a decrease of
imports from Europe.
Furthermore, trade between near-by countries increased; for
example, the trade among the northern neutrals of Europe,
between Japan and the countries skirting the Pacific and Indian
Oceans, between the United States and the countries of North
and South America and of Asia. The trade on the Pacific
greatly increased. The countries of Asia, East Africa, and the
west coast of the Americas traded with each other to a greater
extent than before the war.
Because of the shortage in shipping, heavy commodities were
eliminated to a large extent, and wherever possible home
sources of supply were developed. The lack of those goods
which were manufactured chiefly in central Europe stimulated
the establishment of new branches of industry in the nonEuropean countries.
D.
E N T R E P O T A N D T R A N S S H IP M E N T
TRADE.
The European countries which were at war had controlled
the shipping of the world and determined the course of com
modity movements. Trade prestige and established custom
were important determinants of the route of trade and of the
location of entrepfit centers before the war. During the war
the blockade and economy of shipping were the deciding fac
tors. American cotton was sent to Holland direct instead of
by way of Bremen and Liverpool. Dutch colonial produce
reached the United States directly instead of by way of Amster
dam. African produce could no longer be shipped by way of
Belgium or France. The United States obtained Australian
goods across the Pacific, and not by way of London. Trade
159469—20327
r
routes which were temporarily expedient have in some cases
proven to be permanently efficient.
Hamburg and Bremen were closed tight during the blockade,
and the transshipment and entrepot trade which they had con
ducted were eliminated. The European countries which had
traded with the outside world through the medium of Germany
now traded directly. The trade of Switzerland, Italy, the Bal
tic States, and Spain with the overseas countries greatly increased. Furthermore, new centers of transshipment developed
during the war. Copenhagen, Bergen, and Goteborg rose as
ports of transshipment and as entrepots supplying Germany
and the north of Europe.
E.
E C O N O M IC
D E C E N T R A L IZ A T IO N .
For four years the countries dependent upon Europe have
been compelled to seek new sources of manufactured goods and
new outlets for their raw materials or else to establish some
local industries to satisfy their needs. The industries of the
world, hitherto concentrated chiefly in Europe, have been tem
porarily disrupted and to some extent permanently decentral
ized. The transshipment of goods from the Orient to America
or from South Africa to North America by way of Europe has
been partly replaced by direct trade. The international jobbing
business has been reduced and in some lines eliminated. Coun
tries were compelled to become self-sufficient. The old creditor
nations, clustered in Europe, have become borrowers of widely
scattered countries, as the United States, Japan, and Argentina,
hitherto their debtors. The world has hastened toward a stage
of economic development which it might have taken generations
to attain. The predominance of Europe in trade has declined,
and new commercial spheres have become defined in America
and in the Far East, centering about the United States and
Japan.
Agricultural countries and regions producing raw materials
develop eventually into centers of industry and trade. The war
hastened this process. It has hastened the growth of indus
trial self-sufficiency, the decentralization of trade, and the
lessened dependence upon Europe of the rest of the world.
The war has hastened the disintegration not only of political
imperialism but of commercial imperialism as well.
Decentralization is the prerequisite of federalism. In a more
than superficial sense, therefore, the war has prepared the
world for an inevitable league of nations of some sort. As the
backward countries of the world become more industrialized,
as the density of their population tends to increase by migra
tion, the economic dominance of Europe will probably decline
still further, but the interdependence of the nations of the
world will increase. The process of economic decentralization
will prepare for ultimate world federalism. More extensive
interdependence of the nations will vitalize a league of nations.
II. The outlook in international trade.
A.
THE
PR E W A R BALANCE OF TRADE.
Before the war the countries of Europe, with the exception
of Russia, had an excess of imports. On the other hand, the
countries of the American Continent, with the exception of
Canada, and most of the partly developed countries, such as
British India, and South Africa, had an excess of exports.
159469— 20327
IT
The excess of imports of the European countries was paid
for by services, such as shipping and banking, by interest on
foreign investments, by the expenditures of non-European tour
ists in Europe, and by the remittance cff European nationals
in foreign countries to their friends and families in Europe.
B.
THE
W A R -T I M E
BALANCE
OF
TRADE.
The countries of Europe, on the whole, increased their im
ports greatly. The non-European countries, on the other hand,
had a large excess of exports, particularly during the later
years of the war.
Europe paid for the increased excess of imports less by bank
ing and shipping services, more by the shipment of gold, and
the sale of securities, and most of all by loans.
C.
THE
IM M E D IA T E
FUTURE.
1. Europe needs credit: Europe, in part, is devastated and
everywhere is short of goods. The war-ravaged countries need
food and machinery. But even the neutrals need raw materials.
Without food and raw materials Europe may fall into chaos,
which may react upon us industrially and perhaps politically.
Europe must have goods, and to get them she needs our credit.
But for purely sellish reasons we must lend. In order to
balance our international debits and credits, the courses before
us are to curtail exports, increase imports, or to lend. Reduc
tion of our exports seems inevitable. However, to curtail our
foreign sales suddenly would mean stagnation of industry and
consequent unemployment in many lines, although in some
cases the satisfaction of demands at home deferred during
the war would absorb the slack in production as prices de
cline. We can not at present buy more, for Europe has less
to sell now than before the war. As a temporary expedient
the course open to us is to lend. For the economic welfare of
the country credits of some sort must be advanced in order to
move American goods.
2. The supply of short-term credit. Some European states
men thought that they could borrow from America sufficient
funds to restore the devastation quickly. Unfortunately, that
is not the case. The credit needed is of two kinds, long term
and short term. The neutrals and the belligerents not devas
tated by the war will not- need long-term credit to any great
extent. The machinery for supplying short-term credit "for ex
ports consists of the facilities afforded by the Federal Reserve
System. However, should a scarcity of short-term credit for
exporters arise, there are untapped reserves in the discount
houses which may accept drafts up to several times their
capital. To a great extent these institutions would relieve the
banks of deposit of the risk of too heavy commitments on ac
count of foreign acceptance liabilities in addition to their ordi
nary commercial risks. Several of these have been established.
3. The supply of long-term credit: Six months’ credit, even
with a renewal, would hardly provide for the needs of coun
tries in which factories and even cities will have to be rebuilt
and reequipped.
(a)
Government advances : During the war the United States
Government made advances to other Governments to the ex
tent of about $10,000,000,000. These advances cease with the
proclamation of peace. The sentiment in the United States is
averse to further loans by our Government. Our Government
159469— 20327
18
lias a floating debt of over three billions. This is a revolving
debt and is responsible in part for the inflation of prices and
the high cost of living. The Government could loan to Europe
by issuing more bonds. Congress would hardly authorize such
loans, and the public would hardly take such loans if author
ized. Conceivably conditions in Europe might compel a change
of sentiment in the United States. The evils of inflation may
be less menacing than industrial debility in Europe attended
perhaps by political disturbances.
(b) Indirect Government aid. The United States has, how
ever, undertaken to aid the exporter indirectly, through the W ar
Finance Corporation, which may make advances to the extent
of $1,000,000,000 for periods of not exceeding five years, to ex
porters or bankers upon the promissory notes of the borrower.
However, the difficulty inherent in the act under which the W ar
Finance Corporation operates is that while the country as a
whole benefits by the export of goods, the burden of the present
unusual risk is placed entirely upon the exporter. Neverthe
less, the facilities of the corporation are being utilized.
(c) Private means. The financing of foreign trade by the
Government may lead to further inflation. The financing of ex
ports through private channels can be accomplished only through
savings, past or present. The alternative of war financing,
namely, inflation versus savings, face us again during the transi
tion. Possibly the gravity of the after-war situation may com
pel a compromise as in war time between these two methods of
financing.
At present Europe is being financed by private income. Pri
vate aid is being extended to individual enterprises, whose con
ditions meet the credit standards of bankers. The methods of
private long-term finance are various. Either Europe’s hold
ings of neutral securities might be liquidated in the United
States, or else a foreign importer, if his credit is good, might
float a loan here.
The member banks of the Federal Reserve System have been
permitted to invest 5 per cent of their capital and surplus in
subsidiary corporations engaged in the financing of foreign
trade. The Edge law would authorize the establishment and
incorporation under Federal charter of companies to engage in
international financial operations under the supervision of the
Federal Reserve Board.
Furthermore, investment trusts might be established. These
institutions would invest in foreign securities and issue their
own obligations against their holdings, which might be either
Government bonds, industrials of the borrowing country, or the
pledged securities of a third country or of the industries.
Finally the listing on the stock exchange in the United States
of outstanding foreign securities, under proper restrictions and
with adequate safeguards of the American investors, would
help greatly in accelerating the flow of trade.
(d) The essentials of an acceptable foreign security. If ad
vances are to be made to countries fiscally weak or to indus
tries already under heavy taxation charges, a priority of lien
will be needed to assure the safety of interest and principal of
the new loan as compared with the old ones. If new loans to
weak countries are to be junior liens, funds for Europe will be
difficult to obtain. Just as a private company that lias good
159460— 20327
19
prospects may secure credit through the issue of receiver’s certi
ficates, so the weak European countries will have to give priority
of lien of principal and interest of new money as against old
loans.
The rate of interest on loans to foreign governments or indus
trials will have to be competitive with domestic rates. The
marketability of securities based on foreign loans depends upon
suitable publicity, and whether or not the public will avoid
waste and gather funds for investment, and whether or not they
are favorably disposed toward the investments from the view
point of safety and adequacy of return.
In order not to be the lone and sole creditor of the nations of
Europe, the United States might raise a loan jointly with other
powers, or with the participation of other powers to a sufficient
extent morally to insure payment by the borrower. The in
dorsement of the European banker, and the guaranty of the
foreign government may be essential to secure the funds from
American investors.
Such credits as are granted to Europe should be devoted to
industrial and not governmental uses. They should be utilized
not for meeting current Government expenses, not for the bal
ancing of their budgets, where there is a lack of adequate meas
ures of taxation, and not for the artificial maintenance of their
inflated currencies at parity in the exchange market. Credits
should be devoted to increasing production. The import into
Europe of essentials and not of luxuries should be financed. If
industry in Europe is benefited the security underlying our
loans, new and old, will be strengthened. As industry in Europe
revives, world-wide economic conditions should benefit.
D.
THE
OUTLOOK
IN
THE
U N IT E D
STATES.
What is to be the future of our foreign trade? The theo
retical analysis indicates that during the early stages of lending
a country lias an excess of exports. After this process has con
tinued for many years the lending country has an excess of
imports.
Our present position has been obtained not as a result of the
slow process of economic development but as a result of the
sudden shifting of trade during the war. However, our read
justment can not be as sudden. It will take years. Europe
took our exports and gave us promissory notes in payment
She can not liquidate her debt in gold, because European
countries wish to retain their gold supply in anticipation of a
return to a gold basis. Because of the development of American
facilities for financing trade and because of the creation of the
American merchant marine, Europe will not be able to pay us
with these services even to as great an extent as before" the
war Securities with which to pay us are either not available
01 else will not be sold by Europe because of the commercial
prestige which attaches to foreign investments.
Ultimately Europe must pay us in goods.’ A mortgage on
hei fixed assets is not feasible politically, because of the antialien laws of Europe and the fear of economic penetration,
unope will therefore eventually have to pay in merchandise
lh e annually accruing interest on the debt to the United States
will depress the exchange rate of the debtor countrv and thus
stimulate exports and restrict imports. On the other hand
159469— 20327
’
'J
' '
y'(
I .. :■
1,1 ' ,
1t
1
fa
i
(•
f L
Ik
i
i;
« jj
!'
,i1
the annual credit of the United States for interest will tend
to raise our exchange above par, to stimulate imports and to
restrict exports. Ultimately our excess of exports must decline
and probably change to an excess of imports—a feature which
before the war characterized the trade of the creditor countries
of Europe.
Immediately Europe may be unable to pay in goods. Her
debt to us for interest must be postponed or met temporarily by
further loans to her. The need of additional goods from
America will need to be financed in the same way. Loans by
us would make possible a continuation of our reports until the
productive capacity of Europe is restored sufficiently to permit
the resumption of exports by Europe. The annual investment
of a sum equal to our excess of exports and the reinvestment
of the interest on loans, both outstanding and to be placed,
would, if compounded, reach a huge figure in a generation. Our
balance of trade would thereafter probably be an excess of
imports.
In the present unsettled state of Europe there are many fac
tors which would qualify these conclusions. If Europe falls
into chaos exports from the United States will be greatly
reduced. If the principal and interest of our present loans is
thus wiped out, the conditions which would call for an ultimate
excess of imports will cease to exist.
J ason A. N eilson .
D avid F riday .
J. R ussell S m it h .
O. M. W . S prague.
F. W . T aussig .
W esley F rost.
A. B arton H epburn.
P hillip B. K ennedy .
T homas W . L amont .
Elisha M. Friedman,
Chairman.
159409— 20327
o
THE SEDITION BILL
SPEECH
OF
HON. ROBERT L, OWEN
OF OKLAHOMA
IN THE
SENATE OF THE UNITED STATES
TUESDAY, JANUARY 20 1920
W A S H IN G T O N
1G0550— 20355
1920
SPEECH
. OF
I I O N . R O B E R T L. ‘O W E N .
TH E SEDITION BILL.
Ml-. OWEN. Mr. President, after every great war there is
more or less hysteria throughout the world, and the idea of sup
pressing by force those who are advocating violence against the
orderly processes of government is a very natural feeling, with
which I sympathize. Certainly we ought not to permit tlie or
ganization of anarchists and of Bolsheviki to use our country as
a breeding place in which they can bring about by force or vio
lence the destruction of the Government which we have estab-
I loIlGCl.
Put, Mr. President, the bill which has been passed in the SenK
l W
i T
6 the ?peni.nS " ’edge for the substitution
ot anothei bill much more drastic and much more capable of
nnsconstiuction than the bill which passed the Senate some dnv«:
ago, Senate bill 3317. When that bill passed thei!e weTI S y
lew Senators in the Chamber. It was earnestly debated bv
several Senators who were opposed to it, and they spoke to empty
seats, as I am doing now. But I think it is worth while to call
the attention of the country, through the printed Record of the
proceedings in the Senate, to some of the danger in this bill now
proposed to be substituted for Senate bill 3317.
Mr. NORRIS. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Nebraska’
Mr. OWEN. I yield.
Mr. NORRIS. The Senator, interrupting the Senator from
South Dakola LM Sterling], referred to a certain part of the
i".
House bill, but he did not read the language,
h “
EN‘ 1 tUd m id the lanSuage, but I am going to read
alife11hi guageS 1 WlSh ^ Senator 'voukl reful that objection;
Mi. OWEN. The House bill is reported as House bill 11430
and m common^ known as the Graham bill. Without pausing to
lead that bill at this point, I want to submit for the R ecord a
careful, analytical statement of that bill prepared by a very able
Government servant. It speaks for itself, and by the arrange
ment of the words and phrases it makes it easy to understand
how that bill can be subjected to misinterpretation, and how that
put can become and will become dangerous in the highest decree
to the liberties of the people of this country, so that there would
be hanging over the head of every man who desires free speech
or freedom o f the press the menace of some bureaucrat who could
suddenly arrest, interfere with, and treat him as a criminal
1G0550—20355
,‘ J '
O
1
1 .
with all the powers of this gigantic Government brought down
upon the head of the little citizen, who would find it difficult to
defend himself against an autocratic bureaucrat. I regard this
bill now pending in the House as a bill dangerous in the extreme.
I am not going to take the time of the Senate to go into any
extended analysis of it. but I call attention to section 5, to which
I alluded when the Senator from South Dakota [Mr. S terling ]
was speaking. The last three lines provide one of the things
forbidden by this bill. The words “ force or violence” are not
used in qualifying this latter language. Here is the language
which is forbidden:
To do anything that would tend to overthrow, change—
Observe the word “ change ”—
or defeat the Constitution of the United States and the laws and
authority thereof.
\>r
t
*
fit
»
"
•
r
\ f
i i
s
WJ <
|
The advocacy of an amendment to the Constitution of the
United States in favor of prohibition, which would be a change of
the Constitution, would be a criminal act under this proposed
law.
The advocacy of the change in the Constitution to establish an
income tax would be a criminal act under this proposed statute.
The advocacy of the amendment proposing to give women
suffrage in this country by a change of the Constitution would
be a criminal act, and under this section to wear a button on the
lapel of the coat that indicated the wearer was in favor of the
woman suffrage amendment or the prohibition amendment would
be a criminal act under this section.
Is it possible to draw a statute more loosely than that or more
full of danger to the liberties of this country? I might cite
many other things with regard to this proposed bill, which is
proposed to be substituted for the bill which was passed through
the Senate a short time ago.
I have here a comment made by Alfred Bettman, an able con
stitutional lawyer, during the war a special Assistant Attorney
General of the'United States, with offices in the Department of
Justice, Washington, D. C., and in special charge of the sedition
cases, commenting on the bill pending in the House proposed to
be substituted for the bill passed by the Senate. He said :
“ in response to your request for a legal opinion upon the
sedition bill reported by the House Judiciary Committee, will
state as follows:
“ Under our constitutional system protection of private per
sons or property is reposed exclusively in the State governments.
The Federal Government has no jurisdiction over such pro
tection, nor can the alleged purposes for which acts of violence
were committed against private persons or property be used to
aive jurisdiction to the Federal Government, for the reason
that that would be punishing the purpose and not the acts. To
punish the purpose would be contrary to all fundamental prin
ciples of American constitutional law. Therefore all the pro
visions of sections 2, 5, 9, 10, and 11, in so far as they relate
to private persons or property, would be unconstitutional, since
they are beyond the jurisdiction of the Federal Government.”
We passed laws, under the excitement and hysteria of war,
with a view to punishing the so-called Bolsheviks in this coun
try ; and I pause to say that in my judgment there are very few
1G0550— 20355
)?
5
Bolsheviks in the United States. The atmosphere of the United
States is not such as to encourage bolshevism. We have some
citizens and some aliens who are grossly ignorant, painfully
ignorant, of our laws, of our Constitution, of our great traditions
of liberty and justice, law and order; poor, ignorant people,
who, not understanding government, and feeling oppressed by
the difficulty of making a living for themselves and their chil
dren, attribute it to the fault of government, and therefore are
ready to raise their hands against the Government as an op
pressor, not knowing, not understanding, the great difficulty of
building up orderly processes of effective constitutional, demo
cratic government. Those people, if they commit criminal acts
must be dealt with under the criminal code; but those people
are more in need of instruction than they are in need of a statute
such as this, whose provisions are so sweeping that no man would
be safe in his liberties in this country if this bill should pass.
I am opposed to Prussianizing the United States, and making
this Government the instrumentality of brutal, autocratic,
bureaucratic power. Liberty is what the world fought for, and
not the suppression of liberty.
The stupid friends of vested interests, who would like to use
the powers of the Government to put a bayonet through every
one who balks against vested interests, would be pursuing a
policy like that of chaining down the escape valve on a steam
hotter by such a policy as passing laws to suppress free speech
and a free press. To do this under the false pretense of sup
pressing bolshevism and anarchy is Prussianism and not \mericanism.
I do not want any, bureaucrat in this Government having
arbitrary power to lay a rough hand upon a man who is ex
pressing his honest opinion and liis belief as to what is the
good thing and the better thing for his fellow citizens It is
freedom of opinion, it is freedom of speech, it is freedom of
the press, it is freedom of religion and freedom of education
which have combined to make this country the greatest free
nation in the world, where the conditions of life are the best
in the world, and where they will be better and better as the
days come speedily on. Mr. Bettman, the Assistant Attorney
General in charge of the sedition cases during the war said
also with regard to this bill pending in the House, referrin- to
the unconstitutionally of the b ill:
“ The same is probably true of violence against a State "overnment, because the only method provided in the Constitution
for the protection of State governments against internal vio
lence is the sending of Federal troops.
“ The use of such words as ‘ suggested ’ and ‘ taught ’ in seclion 4 aie dangerous to freedom of speech and contrary to
American tradition.
“ Penal laws should define crime with such exactitude that
nothing is left to arbitrary decision or the prejudices of the
court and the jury. Section 6 maintains a peace-time censor
ship contrary to the American principle, that this is a Gov
ernment of law and not of men. It is also contrary to the
fundamental Anglo-Saxon principle of liberty of speech and
press, which is that there shall be no suppression in advance
but only responsibility after publication.
100550—20355
“ Sections 9, 10, and 11 also violate tlie fundamental prin
ciple of American and Anglo-Saxon institutions, namely, that
guilt is personal and not by association. If enacted, those sec
tions would place upon American statute books a Prussian and
czaristic Russian institution.
“ Section G of the present Penal Code and other sections of
that code cover every possible case of seditious conspiracy
against the Government of the United States and every act of
violence or resistance against the authority of the United
States.
“ I can not see clearly why there should be need for further
legislation, unless it is desired to reach individual advocacy of
violence against Federal officials or Federal property, which
are not a part of any conspiracy. If so, such legislation should
be carefully restricted to advocacv of violence against Federal
officials or property, as is the language of the present seditious
conspiracy section of the Federal Penal Code.
“ The bill as reported by the House Judiciary Committee in
respects, as above pointed out, goes beyond the constitutional
bounds of the Federal jurisdiction and violates the funda
mental principle of American and Anglo-Saxon civil liberties.”
This is the opinion of Alfred Bettman, Assistant Attorney
General of the United States,' in charge of sedition cases dur
ing the war, an expert on sedition. He is opposed to the Gra
ham bill for the reasons stated.
I call attention to existing law against those who may be
inciting or encouraging any rebellion against the United States
or its authority. The Penal Code, 1911 publication, chapter 1,
provides:
OFFENSES AGAINST THE EXISTENCE OF THE GOVERNMENT.
It describes and punishes treason, misprision of treason, incit
ing or engaging in rebellion or insurrection, criminal corre
spondence, seditious conspiracy, and so forth, and section 4 says:
“ Whoever incites, sets on foot, assists, or engages in any
rebellion or insurrection against the authority of the United
States or the laws thereof or gives aid or comfort thereto shall
be imprisoned not more than 10 years or lined not more than
$10,000, or both, and shall, moreover, be incapable o f holding
any office under the United States.”
Section 6, dealing with seditious conspiracy, says:
“ Sec. G If two or more persons in any State or Territory, or
.
in any place subject to the jurisdiction of the United States, con
spire to overthrow, put down, or to destroy by force the Govern
ment of the United States, or to levy war against them, or to
oppose by force the authority thereof, or by force to prevent,
hinder, or delay the execution of any law of the United States,
or by force to seize, take, or possess any property of the United
States contrary to the authority thereof, they shall each he fined
not more than $5,000 or imprisoned not more than six years, or
both.”
Mr. President, I ask to have printed in the R ecord the analysis
I present of the Graham bill pending, which has been prepared
under Gie auspices of the Popular Government League, G37
Munsey Building. Washington, D. C.
160550— 20355
7
There being no objection, the matter referred to was ordered to
be printed in the R ecord, as follows :
A n a l y s is
of
th e
G raham
S e d it io n
B il l .
Sec. 1. That whoever
incites
j
(the United States]
sets on foot I *
/insurrection!
.
tor the authority
lor whoever
assists
( any (or rebellion/ aeamst
(or laws thereof
I
or engages inj
sets on foot ]
/force
1 ... . ,
or assists
l
the use of
(or violence/" ^ mtcnt
or engages in)
(destroy
or cause to be destroyed
or change
■the Government of the United States
or cause to be changed
or to/overthrow
(or cause to be overthrown
And the death of any person/is caused
orpersonslor results directly therefrom
I.
shall be punished bv death, or
shall be imprisoned not more than 20 years or fined not
more than $20,000 or both
and shall, forever be debarred from holding office under
the United States
totlm vtrdirtoftheffiry h6
penalty sha11 not be imP°sed unlessrecommended
(destroy
the conspire to commit /with
I;”™? , „
cause
, [
ntwo ,or
defined in to be destroyed
or(assists ™or®Fisons use of \or violence any offense lor changesthis section they
\ intent tolor
shallengages subject to the punishment provided in this section for such offense. ^
each be in
lor cause to be changed
S e c . 2. That whoever
or to / overthrow
incites or
'
,
lor cause to be overthrown
sets on foot
fhe Government of the Bnited States, (imprisoned not more than 20 vears
and death does not result
(or fined not more than $20 000
shall, on conviction, be
(0r both.
’
B two or more persons conspire to commit any offense defined in this section thev
shall each be subject to the punishment provided in this section for such offense
S e c . 3. That no person shall
“
orally, or
[teach
writing
I
incite
printing,
•{advocate
by
or the
propose, or
use of any
forcible resistance to, or
(advise
( sign,
forcible destruction of
symbol,
or
picture,
[aid,
caricature,
(abet, or
.or otherwise
(encourage
the Got eminent of the United States, its Constitution, laws and authority or
the governments of the several States, all or any of them or
*’
the existence of constituted government generally
orally, or
teach
by [writing
incite
(printing, or
advocate
the destruction of human life
(the use of any [sign
propose, or or
(symbol
advise
O
r'
the injury of any human being,
(picture
aid
or
(caricature abet
the injury or de-/of public 1
encourage, or
struction
(or private/pr°Perty
defend
.or otherwise
VvUIi&llLUULUIl
as a means of changing the(laws, or
lot the United States or defeatin'1 the
,, .. .,
„
(Government!
authority thereof.
1G0550— 20355
write or
knowingly
print
edit
issue
circulate
distribute
transport
display, or
sell
(overthrow
tor
(change
(lie
fby express
\or otherwise
H
any
book
pamphlet
newspaper
document
handbill
poster, or
printed
written, or
pictorial
[matter
lof any
[form
{or kind
wherein
or
whereby
/the Government of the United States, or
\the Constitution, laws and authority thereof
force
[or by levying war against the same, or
violence]
(incited
resistance to
1
1 [suggested
bv
[theexecution ofany la\vlf°rce
[is <taught
rebellion against jof. the United States byj°^
violence) advocated, or
ladvised.
Sec. 5. That no person shall
[anarchy
display] at any meetings
[any red flag]
[as 4 symbol of-ior of any of the purposes
or
” tor parade
for
l forbidden in this act
exhibit) or in any other place {banner
And the displaylot such bag fin any meeting! h be prima facie evidence that it is
or exhibition /or banner \or parade
/
1
so displayed and exhibited as such symbol.
And no person shall
flag
( meeting
banner
display]
gathering
emblem which tends to incite or indi
any picture
cates a purpose
motto
.or device
parade
the Government of the United
or in any other public placej
• States
[by violence
to overthrow j or by physicai injury to{P®r®°°perty
all
[overtlirow
government
or to<change
{or defeat [the Constitution of the United States and the laws and authority
book
f thereof.
magazine
newspaper
document
handbill
wherein or w'hereby
Sec. 6. That every' poster, or
matter
written
memorandum
pictorial, or-{sign
printed
symbol, or
communication of any form
the overthrow of the Government of the United States by force or violence, or
resistance to
jthe authority of the Government
or rebellion against/
by
.. , I
I
^/Constitution of the United States, or
li Jadvhfed^M
orthi jchatvc, or
laws or authority thereof by force or violence,/lS|tncited ’ **
whereby )
{advocated
advised
defended
or
incited .
,
.
or wiierem or i
\ u r6 [>
\© 0
)
use oijvToTence or
fc S r tv
{physicalinjury to or the seizure or destruction of) 1
Iindustrial
economic
change
social
or
{political
[intended]
appeai js made to racial prejudice thefor
[-result of which apInrr'
{probable)
160550— 20355
frintin? nr
1
[the United States or
peal is to cause{th re|0rt to force and violence}wlthinjF 1 ^ ? P e 2*1** to thej
°e
°
X
_
[jurisdiction thereof
fbe deposited in any
is hereby declared to be nonmailable, and the same shall not|P°s^ olllce f°r mailing
[be [conveyed
the
<mails or
1[delivered 'from any
post o ffiee or
by any
let ter car
rier
Provided, That nothing in the Act shall be so construed as to authorize any person
other than an employee of the head Letter Office, duly authorized thereto, or other
person, or other persons, upon a search warrant authorized by law, to open any let
ter not addressed to himself: Providedfurther, That any author, publisher, or party
affected or aggrieved bytheaction of the Postmaster General in excluding materials
from the mails under this section shall, after such notice to the Postmaster General as
the judge may direct and upsn filing a bond to cover the actual cost of such proceed
ing, be entitled to a hearing de novo before a judge of the Federal court of the district
in which the party affected or aggrieved resides, which judge shall with all reasonable
dispatch proceed with such hearing and affirm or reverse the action of the Postmaster
General. Such judge shall have power during the pendency of the proceedings to
suspend the order of the Postmaster General: Provided further, That no such pro
ceeding shall bar or interfere with any criminal prosecution under the terms of this
Act.
S e c . 7. That no person shall
( the United States,]
or
mv matter de-lared fnon-mailable
and
not transporlable
any place subject yuU
t?,
{ to transport
to its jurisdic-f m hls act to be
or
tion
J
[from one State into another
}
cause to be transported, any such matter] “ tion of the United States. jurisdic.
[
any plac? ^
t0 the
Sec. 8. That no person shall
I l in n n f I b o TTnit#aH S ta io-s
knowingly transport ^
knowingly use]
[mails
attempt to transport]
or
i-the-jor
attempt to use)
[Postal Service of the United States
& ffo 0
rrp°nwde conveyance} An > matter deckred
’
Sections 6 ™d 7 of this
[nonmailable
Act to bet and
[not transportable.
Sec. 9. That any
association,
gathering,
. . . c , (directly
1, Ior violence,
buman bein^
assembly,
society,
I
j °r iMireCtly }
0^ ^ivate property
or
corporation.
the Constitution
I
or laws
teaches,
advises,
or which proposes,
threatens,
or
defends
of th^Government of the United States,
]
i force or or of any State thereof,
violence
>to bring about any such result
or of all formsin any form) government.
of organized
[prosecute]
or which attempts to]or
Isuch purpose, is hereby declared to be unlawful.
Ipursue J
1G0550— 20355
[
Sec. 10. That no person shall act as an officer of any such unlawful organization, or(
become a member thereof,
or become affiliated therewith,
or continue to bo a member thereof
affiliated therewith,
or
or contribute any money or other thin
object,
of value thereto, or to anyone for it
of such unlawful, use, or rent any room, building, osl.
association,
{
place for the use of said unlawfur
or doctrines
association, or permit the occupation
by such unlawful association or any
committee or branch thereof of any
room, building, or other place under
. his ownership or control.
Sec. 11. That the giving, loaning, or promising of anything of value to any such
unlawful association shall constitute affiliation with such unlawful association;
and the giving, loaning, or promising of anything of value to any person or partner
ship or unlawful association engaged in advertising, teaching, advocating, or de
fending any of the things the teaching, advocacy, or defense of which is forbidden
in this Act shall bo prima facie evidence of teaching, advocating, or defending said
forbidden things against the person so giving, promising, or loaning anything of
value as aforesaid.
Sec. 12. That any alien convicted under any of the provisions of this Act after
serving his sentence shall be taken into custody and be deported under the immi
gration laws of the United States then in force.
Any person convicted under this Act who has declared his intentions of becoming
a citizen but has not been naturalized shall be forever ineligible to citizenship, and it
shall be the duty of the Attomev General to institute proceedings to cause his petition
and declaration of intention to be dismissed and annulled and all court proceedings
in his case quashed and to furnish to the Secretary of Labor such data as to enable
him to cause such person to he deported under the immigration laws of the United
States then in force.
.
The conviction of any person who is a naturalized citizen of the United States of
any of the things forbidden in this Act shall be sufficient to authorize the cancellation
of his or her certificate of naturalization in the manner provided by the naturalization
laws of the United States then in force. It shall be the duty of the Attorney General
to institute proceedings and conduct the same to a final judgment immediately after
conviction and sentence of the naturalized citizen aforesaid.
Every alien deported under this Act is hereby forbidden to again enter the United
States or anv Territory or possession thereof. It shall be the duty of the Attorney
General of the United States to enforce this provision against all deported aliens
returning to the United States as aforesaid.
Sec. 13. That in any investigation or prosecution for any of the offenses specified
in this Act no person shall be excused from attending or testifying or deposing, or
from producing anv book, paper, document, or other evidence on the ground that
the testimony or evidence, documentary or otherwise, required of him may tend to
incriminate him or subject him to penalty of forfeiture: but no natural person shall
be prosecuted or subjected to any penalty or forfeiture for or on account of any trans
action, matter, or thing as to which in obedience to a subpeena and under oath he
may so testify or in obedience to a subpoena shall produce evidence, documentary
or otherwise. But no person shall be exempt from prosecution and punishment for
perjury committed in so testifying.
Sec.'14. That if any clause, sentence, paragraph, or part of this Act shall for any
reason he adjudged by any court of competent jurisdiction to be invalid, such judg
ment shall not affect, impair, or invalidate the remainder thereof, but shall he con
fined in its operation to the clause, sentence, paragraph, or part thereof directly
involved in the controversy in which such judgment shall have been rendered.
S e c . 15. That section 5334 of the Revised Statutes, section 4, Act of March 4, 1909
(Thirty-fifth volume, Statutes at Large, page 1038), be, and the same is hereby
repealed. Any offenses heretofore committed in violation of said section 5334 and
all cases pending thereunder may be prosecuted and punished as therein provided
in the same manner and with the same effect as if this section had not been enacted.
Sec. 16. That any person convicted of violating any of the provisions contained
in any of the sections of this Act, except sections 1 and 2, shall be punished by being
imprisoned for not more than twenty years or fined not more than $20,000, either or
both. And any citizen of the United States (Convicted under this Act shall be for
ever debarred from voting thereafter and holding any office of profit, honor, or trust
under the United States.
Mr. OWEN. I ask to have printed the House bill, H. It. 11430,
immediately following the analysis, in order that the comparison
may be shown.
100550— 20355
There being no objection, the bill referred to was ordered to be
printed in the R ecord, as follow s:
A bill
( H . R . 1 1 4 3 0 ) to pu nish offenses a g a in st the existence o f the
G overnm ent o f th e U nited S tates, and for other purposes.
Be it enacted, etc., T h a t w hoever incites, sets on foot, a ssists or
engages in an y insurrection or rebellion ag a in st the U nited S tates or
the a u th o rity or law s thereof, or w hoever sets on fo o t or a ss is ts or
engages m the use o f force or violence, w ith in ten t to destrov or cause
to be destroyed or change or cause to be changed or to overth row o”
cause to be overth row n the G overn m ent o f the U nited S tates an d the
death o f an y person or persons is caused or resu lts directly therefrom
shall be gu ilty o f a felon y, and on con viction shall be punished bv
death, or sh a ll be im prisoned n ot m ore than 2 0 years or fined not more
th an $ 2 0 ,0 0 0 , or both and sh a ll forever be debarred from h old in g Office
under the U n ited S t a t e s : Provided, however, T h a t th e death nenaltv
shall n o t be im posed unless recom m ended in the verd ict o f the iurv
I f tw o or m ore persons conspire to com m it any offense defined in th is
section, they shall each be subject to the punishm ent provided in this
section fo r such offense.
s
. s ®c - 2 - T h a t w hoever in cites or sets on fo o t or a ss is ts or engages
in the use o f force or violence w ith in ten t to destroy or cause to be
?«S
ki’° yed /.)r chanSe °,r cause to be changed or to overthrow or cause
to be overth row n the G overn m ent o f the U nited S tates, and death does
not le s u lt, shall, on conviction be im prisoned n o t m ore th a n 2 0 years or
n° t m ore th an $ 2 0 ,0 0 0 , or both.
I f tw o or m ore persons conspire
to com m it an y offense defined in th is section, th ey shall each be subject
to the pu nishm en t provided in th is section for such offense.
110 P
.el'son sh a ll orally or by w ritin g, p rin tin g , or the
use o f an y sign, sym bol, picture, caricatu re, or otherw ise teach, incite
ad vocate, propose, or ad vise, or aid, abet, or encourage forcible resistance to or forcible d estru ction o f the G overn m ent o f the U nited S tates
& » F r a i a t i 0 n ’ la w s > and a u th o rity , or the governm en ts o f the several
l t
S tates, a ll or a n y o f them , or the existence o f con stituted governm ent
gen erally, or orally or by w ritin g, p rin tin g , or the use o f an v sign
sym bol, picture, caricature, or otherw ise teach, incite ad vocate m-oFifoe,n? rt h a V & a i< ’ ab e t> encourage, or defend the destruction o f hum an
in
1
^be ” Jui y
a n y hum an being or the in ju ry or destruction o f
public or p riva te property a s a m eans o f changing the C onstitu tion
thereof.r G ovcrn m ent o f the
S tates or d efeatin g Ihe lu t h o r it y
.
issue
4. T h a t no person sh a ll w rite or know ingly print nnblish ed it
d r e u ja te distribute, tra n sp o rt by express8 or otherw ise d isplay
D rin tid
P*
w
yritt°e°nk’
nP^ eti’ ,new sPa Per . docum ent, handbill, poster, or
w ritten ,
pictorial m atter ot an y kind or form wherein or
the overth row or change o f the G overn m ent o f the U nited
E “ t,r a 'Ir h h f C on stitu tio n , law s, and a u th ority thereof by force or v io
lence or by levyin g w ar a g a in st the sam e or bv resistance to or rebelv i o l e n f e V f i . /A 6 ? xecu ti° n o f an y law of the U nited S tates by force or
violence is incited, suggested, tau g h t, ad vocated , or advised.
narndn
'hat 110 Person shall d isplay or exh ibit a t an y m eeting, or
an nrcbv n ,U‘ p y o t5 er. place, an y red flag or banner as a sym bol of
an
nln v n ^ v v r ! . a n y «o£ th e purposes forbidden in this a ct, and the dishp L . ' l . f , 1bition o f such flag or banner in an y m eeting or parade shall
L
ni l
, cie evidence th a t it is so displayed and exhibited as such
a
m*
110t Person shall display or exh ibit a t an y m eeting, gath ering,
f n r i alL?„?i. or tn an y other public place, an y flag, banner, em blem , picn -r m a w d toi or .d<-vice w hich tend s to incite or indicates a purpose to
.or by ph ysical in ju ry to person or property, the
V>v>o\,il l r n o n ° 1 the U nited S tates, or a ll governm ent, or to overthrow ,
^
the C on stitu tio n o f the U nited S tates and the law s
an a a u th ority thereof.
<b T h a t every book, m agazin e, newspaper, docum ent, handbill,
or w ritten , _ pictorial, or printed m atter, m em orandum , sign,
V i , c o m m u n i c a t i o n o f an y form w herein or whereby the overthe G overn m ent o f the U nited S tates by force or violence, or
thp
'f+L J 0 or rebellion a g a in st the a u th ority o f the G overnm ent or
nr i tw, , ’ V irow > change, or defeat o f C onstitu tion o f the U nited States,
d s M w T l ? / a u th o rity th ereof by force or violence, is advocated, adnhv«iV>n i i r i i , 1 * 01 wherein or w hereby the use o f force or violence or
ia
. 01" th e seizure or destru ction o f persons or propertv
tfiish
w / sf d ^ f e n d e d , or incited as a m eans tow ard the acconi,’
p s m ent o f in d u stria l, econom ic, social, or political change, or wherein
100550— 20355
>..,,
3
W
|>ffe
|
j
'" V
ij
W
1iiiii!
jit i
j
'
it.,
i!i
i
1
/
or whereby an appeal is made to racial prejudice the intended or prob
able result of which appeal is to cause rioting or the resort to force
and violence within the United States or any place subject to the juris
diction thereof, is hereby declared to be nonmailable, and the same shall
not be deposited in any post office for mailing or be convoyed in the
mails or delivered from any post office or by any letter carrier : Pro
vided, That nothing in this act shall be so construed as to authorize any
person other than an employee of the Dead Letter Office, duly authorized
thereto, or other person, upon a search warrant authorized by law, to
open any letter not addressed to himself.
S e c . 7. That no person shall import or cause to be imported into the
United States, or any place subject to its jurisdiction, any matter de
clared in this act to be nonmailable and not transportable, or to transport
or cause to be transported any such matter from one State into another
or into any such place subject to the jurisdiction of the United States.
Sec. 8. That no person shall knowingly use or attempt to use the mails
or the Postal Service of the United States, or knowingly transport or at
tempt to transport by express or otherwise, by public or private con
veyance, any matter declared by sections 6 and 7 of this act to be non
mailable and not transportable.
S e c . 9. That any association, gathering, assembly, society, or corpora
tion which seeks, directly or indirectly, by force or violence, or by injury
to or destruction of human beings, or public or private property, to bring
about a change in the Constitution or laws or authority of the Govern
ment of the United States, or of any State thereof, or of all forms of
organized government, or which teaches, advises, proposes^ threatens, or
defends the unlawful use of force or violence in any form to bring about
any such result, or which attempts to prosecute or pursue such purpose,
is hereby declared to be unlawful.
Sec. 10. That no person shall act as an officer of any such unlawful
association, or, knowing the object, purpose, teaching, or doctrines of
such unlawful association, become a member thereof or become affiliated
therewith, or continue to be a member thereof or affiliated therewith,
or contribute any money or other thing of value thereto or to anyone for
its use, or rent any room, building, or place for the use of said unlawful
association, or permit the occupation by such unlawful association or
any committee or branch thereof of any room, building, or other place
under his ownership or control.
Sec. 11. That the giving, loaning, or promising of anything of value
to any such unlawful association shall constitute affiliation with such
unlawful association; and the giving, loaning, or promising of any
thing of value to any person or partnership or unlawful association
engaged in advertising, teaching, advocating, or defending any of the
thitigs the teaching, advocacy, or defense of which is forbidden in
this act shall be prima facie evidence of teaching, advocating, or
defending said forbidden things against the person so giving, promis
ing, or loaning anything of value as aforesaid.
Sec. 12. That any alien convicted under any of the provisions of
this act after serving his sentence shall be taken into custody and be
deported under the immigration laws of the United States then in
force. Any person convicted under this act who has declared his inten
tions of becoming a citizen but has not been naturalized shall be for
ever ineligible to citizenship, and it shall be the duty of the Attorney
General to institute proceedings to cause his petition and declaration
of intention to be dismissed and annulled and all court proceedings in
his case quashed and to furnish to the Secretary of Labor such data
as to enable him to cause such person to be deported under the immi
gration laws of the United States then in force. The conviction of any
person who is a naturalized citizen of the United States of any of the
things forbidden in this act shall be sufficient to authorize the cancel
lation of his or her certificate of naturalization in the manner pro
vided by the naturalization laws of the United States then in force.
It shall be the duty of the Attorney General to institute proceedings
and conduct the same to a final judgment immediately after conviction
and sentence of the naturalized citizen aforesaid. Every alien deported
under this act is hereby forbidden to again enter the United States
or any Territory or possession thereof. It shall be the duty of the
Attorney Geperal of the United States to enforce this provision against
all deported aliens returning to the United States as aforesaid.
Sec. 13. That in any investigation or prosecution for any of the
offenses specified in this act no person shall be excused from attending
or testifying or deposing, or from producing any book, paper, docu
ment, or other evidence on the ground that the testimony or evidence,
documentary or otherwise, required of him may tend to incriminate
160550— 20355
13
b im o r s u b je c t h im t o p e n a lt y o r f o r f e i t u r e ; b u t n o n a t u r a l p e r s o n
s h a ll be p r o s e c u te d o r su b je c te d to a n y p e n a lty o r fo r fe it u r e fo r o r o n
a c c o u n t o f a n y t r a n s a c t io n , m a t t e r , o r t h in g a s t o w h ic h in o b e d ie n c e
to a
su b p oen a a n d
u n d er o a th
he m ay
so t e s t ify
o r in
o b e d ie n c e
t o a su b p oe n a s h a ll p r o d u c e e v id e n c e , d o c u m e n t a r y o r o t h e r w is e
But
n o P erso n s h a ll be e x e m p t fr o m p r o s e c u tio n a n d p u n is h m e n t fo r p e r ju r y
c o m m it te d in so t e s t ify in g .
^
J
J
.
T l i a t i£ a n y c l a u s e , s e n t e n c e , p a r a g r a p h , o r p a r t o f t h i s a c t
s h a ll f o r a n y r e a s o n b e a d ju d g e d b y a n y c o u r t o f c o m p e te n t ju r is d ic
tio n to b e in v a lid , su ch ju d g m e n t s h a ll n o t a ffe c t, im p a ir , o r in v a lid a te
t h e r e m a in d e r t h e r e o f , b u t s h a ll, b e c o n fin e d in i t s o p e r a t i o n t o t h e
c la u s e , s e n t e n c e , p a r a g r a p h , o r p a r t t h e r e o f d ir e c t ly in v o lv e d in th e
c o n t r o v e r s y in w h ic h s u c h ju d g m e n t s h a ll h a v e b ee n r e n d e r e d
bE C . l o . T h a t s e c tio n 5 3 3 4 o f th e R e v is e d S t a t u t e s s e c tio n 4
net nf
M a r c h 4 , 1 9 0 9 ( v o l . 3 5 , S t a t . L „ p. 1 0 8 3 ) , b e ? a n d t h e l a m e i s ’h e r e b y
r e p e a le d .
Any
o ffe n s e s
h e r e to fo r e
c o m m itte d
in
v io la tio n
of
sa id
se c tio n 5 3 3 4 a n d a ll c a s e s p e n d in g t h e r e u n d e r m a y b e p r o s e c u te d a n d
p u n is h e d a s t h e r e in p r o v id e d in th e s a m e m a n n e r a n d w it h t h e s a m e
e ffe c t a s i f t h is se c tio n h a d n o t b ee n e n a c te d .
S ec. 1 6 . T h a t a n y p e r s o n c o n v ic te d o f v io la t in g a n y o f th e p r o v is io n s c o n t a in e d in a n y o f t h e s e c t io n s o f t h is a c t , e x c e p t s e c t io n s 1
a n d 1 , s h a ll b e p u n is h e d b y b e in g im p r is o n e d fo r n o t m o r e t h a n 2 0 '
y e a r s o r fin e d n o t m o r e t h a n $ 2 0 ,0 0 0 , e it h e r o r b o th .
A n d a n y c itiz e n
o f th e U n ite d S ta t e s c o n v ic te d u n d e r th is a c t s h a ll b e fo r e v e r d eb a rred
f r o m v o t i n g t h e r e a f t e r a n d h o l d i n g a n y o ffic e o f p r o f i t , h o n o r , o r t r u s t
u n d e r th e U n ite d S ta te s .
I n r e s p o n s e t o y o u r r e q u e s t f o r a le g a l o p in io n u p o n th e s e d itio n b ill
r e p o rte d b y th e H o u s e J u d ic ia r y C o m m itte e , w ill s t a te a s fo llo w s •
U n d e r o u r c o n s titu tio n a l s y s te m
p r o te c tio n
o f p r iv a te p e r so n s or
p r o p e r ty is r e p o se d e x c lu s iv e ly in th e S ta t e g o v e r n m e n t s .
T h e F ederal
G overn m en t h as
n o ju r is d ic t io n
over
su ch
p r o te c tio n , n o r ca n
th e
a lle g e d p u r p o s e s f o r w h ic h a c t s o f v io le n c e w e r e c o m m it t e d a g a i n s t
p r iv a te p e r s o n s o r p r o p e r ty b e u sed to g iv e ju r is d ic tio n to th e F e d e r a l
G o v e r n m e n t, f o r t h e r e a s o n t h a t t h a t w o u ld be p u n is h in g th e p u r p o s e
an d n ot th e a c ts.
T o p u n is h th e p u r p o s e w o u ld b e c o n t r a r y to a ll f u n d a
m e n ta l p r in c ip le s o f A m e r ic a n c o n s t itu tio n a l la w .
T h e r e fo r e a ll th e
p r o v is io n s o f s e c t io n s 2 , 5 , 9 , 1 0 , a n d 1 1 , in s o f a r a s t h e y r e la t e to
p r iv a te p e r s o n s o r p r o p e r ty , w o u ld b e u n c o n s t it u t io n a l, s in c e t h e y a r e
b ey o n d th e ju r is d ic tio n o f th e F e d e r a l G o v e r n m e n t.
T h e sa m e is p r o b a b ly tr u e o f v io le n c e a g a in s t a S ta t e g o v e r n m e n t, b e
c a u s e t h e o n ly m e th o d p r o v id e d in t h e C o n s t it u t io n f o r t h e p r o te c t io n
o f S t a t e g o v e r n m e n t s a g a in s t in t e r n a l v io le n c e is th e s e n d in g o f F e d e r a l
tro o p s.
T h e u s e o f s u c h w o r d s a s “ s u g g e s t e d ” a n d “ t a u g h t ,” in s e c t io n 4 ,
a r e d a n g e r o u s to fr e e d o m o f sp ee ch a n d c o n tr a r y to A m e r ic a n t r a d itio n .
P e n a l la w s s h o u ld d e fin e c r im e w it h s u c h e x a c t itu d e t h a t n o th in g is
le f t to a r b it r a r y d e c is io n o r t h e p r e ju d ic e s o f th e c o u r t a n d th e ju r v .
S e c tio n 6 m a in t a in s a p e a c e -tim e c e n s o r s h ip c o n t r a r y to th e A m e r ic a n
p r in c ip le , t h a t th is is a G o v e r n m e n t o f la w a n d n o t o f m e n .
I t Is a l s o
c o n tr a r y to th e fu n d a m e n ta l A n g lo -S a x o n p r in c ip le o f lib e r ty o f sp ee ch
a n d p r e s s , w h ic h is t h a t t h e r e s h a ll b e n o s u p p r e s s io n in a d v a n c e , b u t
o n ly r e s p o n s ib ility a f t e r p u b lic a tio n .
S e c tio n s 9 , 1 0 , a n d
11
a ls o v io la t e th e fu n d a m e n t a l p r in c ip le o f
A m e r ic a n a n d A n g lo -S a x o n i n s t i t u t i o n s ; n a m e ly , t h a t g u ilt is p e r s o n a l
a n d n o t b y a s s o c ia tio n .
I f e n a c te d t h o s e s e c t io n s w o u ld p la c e u p o n
A m e r ic a n s t a tu te b o o k s a P r u s s ia n a n d c z a r is tic -I tu s s ia n in s tit u t io n .
S e c tio n 6 o f t h e p r e s e n t p e n a l c o d e , a n d o th e r s e c tio n s o f t h a t co d e,
c o v e r e v e r y p o s s ib le c a se o f s e d itio u s c o n s p ir a c y a g a in s t th e G o v e r n
m e n t o f th e U n ite d S ta t e s , a n d e v e r y a c t o f v io le n c e o r r e s is te n c e a g a in s t
th e a u th o r ity o f th e U n ite d S ta te s .
I c a n n o t see c le a r ly w h y t h e r e s h o u ld b e n e e d f o r fu r t h e r le g is la t io n ,
u n le s s it is d e s ir e d to r e a c h in d iv id u a l a d v o c a c y o f v io le n c e a g a in s t
l e d e r a l o ffic ia ls o r F e d e r a l p r o p e r t y , w h ic h a r e n o t a p a r t o f a n y c o n
s p ir a c y .
I f so , s u c h le g is la t io n s h o u ld h e c a r e fu lly r e s tr ic te d t o a d v o c a c y o f v io le n c e a g a i n s t F e d e r a l o ffic ia ls o r p r o p e r t y , a s is t h e la n g u a g e
o t th e p r e s e n t s e d it io u s c o n s p ir a c y se c tio n o f t h e F e d e r a l p e n a l co d e .
t h e b i l l a s r e p o r t e d b y t h e H o u s e J u d i c i a r y C o m m i t t e e in r e s p e c t s , a s
a b o v e p o in te d o u t, g o e s b e y o n d th e c o n s t it u t io n a l b o u n d s o f th e F e d e r a l
I
1C 0550— 20355
__ _
Mr. OWEN, I ask to have printed the statement of Mr. Alfred
Bettman in its continuous form.
There being no objection, the matter referred to was ordered
to be printed in the R ecord, as follow s:
ju r is d ic t io n a n d v io la t e s th e
A n g l o -S a x o n c iv il lib e r t ie s .
fu n d a m e n ta l
(S ig n e d )
p r in c ip le
of
A m e ric a n
and
A lfred B e t t m a n .
Mr. OWEN. I call attention to several other opinions which
have been sent to me regarding this matter.
Prof. C. Chaffee, of the Harvard Law School, says:
T h is b ill, i f e n a c te d , w ill b e th e fir s t o f it s k in d s in c e th e n o to r io u s
s e d itio n a c t o f 1 7 9 8 , o p p o se d b y M a r s h a ll a n d d e n o u n c e d a s u n c o n
s t it u t io n a l b y J e ffe r s o n a n d M a d is o n .
W it h o u t su ch la w s t h is c o u n tr y
h a s p a s s e d th r o u g h m u c h w o r s e c r is e s th a n th e p r e s e n t.
Dr. Frederick C. Howe says:
T h i s b ill m a k e s a n e n d to fr e e d o m o f th e p r e s s in A m e r ic a .
th e p r o v o c a te u r , e s p io n a g e , a n d s p y in g o f a ll k in d s .
It
in v ite s
Jackson H. Ralston, an eminent attorney of Washington, says:
I t s la n g u a g e is so b r o a d , it s te r m s
k n o w w h a t is c r im in a l u n d e r it u n t il
m ean s.
so in d e fin ite , t h a t n o m a n ca n
F e d e r a l ju d g e s t e ll u s w h a t it
• Mr. Samuel Gompers, representing as he does several million
workmen, with their dependents amounting to millions of people
more, is naturally concerned that this bill, under the color of
protecting the Government against force and violence, shall not
be used to suppress the rights of those who live and labor in this
country to advocate a betterment of their own condition.
His loyalty ought not to be questioned. That man, when the
world was shaken with war, stood like a rock and like a hero
and marshalled the labor of this country to avoid strikes and
use its utmost patriotic efforts in the making of munitions and
to the rendering of those services without which the war could
not have been won. No man ought ever to impute to him a lack
of loyalty or a lack of patriotism. He deserves well of his
country; he deserves the respect and affection of his country.
He said, indeed, that— S e c tio n 5 o f th e b ill, u n b e lie v a b le a s it m a y s e e m —
Y es; “ unbelievable as it may seem
m a k e s i t a c r im e to w e a r in p u b lic a n y b u t t o n o f a n o r g a n i z a t i o n w h o s e
p u r p o s e is to o b ta in a n a m e n d m e n t to th e C o n s t it u t io n o f th e U n ite d
S t a t e s o r a n y e x is t in g F e d e r a l la w .
Samuel Gompers says that; yes, he says it, and I say it, and
the proposed bill says it. Look at that proposed statute. I
h a v e put it in the R e c o r d .
Mr. President, the liberties of the people of the United States
comprise the most precious possession of the people of this Re
public. It is upon liberty that the wisdom and the conscience
and the patriotism of the mass of our citizens have been able,
through their processes of education and of industry, to build up
our great Republic with its wonderful powers. I should regard
it as a national catastrophe if any act should be passed which
would jeopardize those liberties or menace freedom of speech
or the freedom of the press. I have often been disgusted and
pained by the folly and falsehood of articles printed in the press,
but folly passes and falsehood dies away, while the lessons of
wisdom and truth which also daily come through the modern
press remain and the world is enriched by their fruits.
Liberty—freedom— freedom o f speech, of the press, o f religion,
of political opinion— freedom from the threats or menace of
autocratic bureaucrats must be preserved if “ the rights of life,
liberty, and the pursuit of happiness ” are to be preserved.
160550— 20355
SEVEN YEA R S OF D EM O C R AC Y
AN ADDRESS
HON. ROBERT L. OWEN
OF OKLAHOMA
DELIVERED BEFORE THE DEMOCRATIC
STATE CONVENTION OF OKLAHOMA
ON FEBRUARY 5, 1920, IN THE CITY OF
MUSKOGEE, OKLAHOMA
(Printed in the CONGRESSIONAL RECORD, Friday, February 27, 1920)
W A S H IN G T O N
GO VERNM ENT
P R IN T IN G
1920
1G 7173— 20515
O F F IC E
t.
Sr
“ Mr. Chairman and fellow citizens:
“ True Democracy is a religion. It is not completely monop
olized by the members of the Democratic Party. Many of its
loyal disciples find themselves affiliated with other parties.
Democracy truly believes in the rule of the people, in their
wisdom, in their common sense, in their common honesty, in
their justice, in their patience and steadfastness, in their right
and ability to govern themselves. It thinks in terms o f the
greatest good to the greatest number. Its disciples should be
‘ Soldiers of the Common Good.’ Its great patron saint was
Thomas Jefferson, who stood for freedom o f religion, freedom
of speech, freedom of the press, the education o f the people by
free schools, the right of every citizen to vote.
“ On these principles Jeffersonian Democracy took control of
the Government in 1801 and held it for many decades. When
the party organization became weakened by selfishness and fell
under the control of those who believed in human slavery, it
passed from power by a revolt of Jeffersonian Democrats, who
would not stand for human slavery. They organized a new
party and took the name which the followers o f Jefferson had
employed in 1800, calling themselves Republicans.
“ When the wise and kind Lincoln, on the field o f Gettysburg,
prayed that the Government of the people, for the people, and
by the people should not perish from the earth, he voiced the
spirit of true democracy throughout the world.
“ When the Republican Party got control of the Government
during the Civil War, 1861-1865, every selfish interest that
wished to use the powers of government for private advantage
gradually attached itself to the Republican Party, courted its
leaders, became busy in its organization, contributed to its elec
tions, promoted its nominations, and steadily obtained an in
creasing influence in its management. Unhappily it seems to
be the history of all parties.
“ When in 1912, after many years, it became obvious that an
invisible government of organized commercial and financial
selfishness had gained control of the organization of the Repub
lican Party and of the governing powers of the people of the
United States, the spirit of democracy, that sleeps but never
dies, arose in the hearts of the Progressive Republicans, under
the leadership of Theodore Roosevelt, and by this revolt there
was given to the Democratic Party its first real opportunity
since the Civil War to demonstrate that it had, through tribula
tion, come back to the true principles of Democracy of Jeffer
son, of Jackson, and of Lincoln, and magnificently the Demo
cratic Party has responded. It was assisted on many occasions
by patriotic Progressive Republicans.
“ We have thousands of new voters who will seek to know
what the party did when it got the power to act. They will ask
and our unmindful opponents will ask:
“ ‘ What did the Democratic Party d o ? ’
“ Let us answer that:
167473-—20545
LOW ERED
TH E
T A R IF F .
“ Immediately it revised the ‘ robber ’ tariff. It cut down
the prohibitive schedules that selfishly sheltered monopoly in
the United States. It put the necessaries of life on the free
list—the free-list importations have increased a billion dollars a
year under Democratic management; it removed unjust tariff
discriminations, and by lowering the tariff stimulated our
imports and our exports. (38 Stats., 114, Oct. 3, 1913.) Our for
eign commerce has increased from four billions in 1913 to ten
billions in 1919. Let Democrats always keep in mind that, by
logical necessity, ultimately imports measure exports and’ ex
ports measure imports.
“ It established the Tariff Commission (39 Stats., 795), to take
the tariff out of politics and deal with it strictly as a business
matter. The old rallying cry of the Republican Party of the
Protective Tariff League, which promoted laws to tax the con
sumers for the benefit of the selfish members of the league, is
gone, because of the necessity now of admitting the commodities
of Europe, as the only available means by which the people of
Europe can repay the many billions of loans made them by
our Government and by our people. It has been demonstrated
that a revenue tariff, fairly drawn, is abundantly sufficient
to honestly protect American industries against foreign competi
tion.
“ The overwhelming majority of American industries, because
of the enormous production and productive power of American
machinery, can now compete on the most favorable terms with
any nation in the world.
“ What did the Democratic Party do?
P R O G R E S S IV E
IN C O M E
TAX.
“ It placed the taxes on those best able to pay the taxes and
from whom taxes were more justly due. It took the tax from
the backs of the consumers and placed it upon incomes by the
progressive-income tax, so that those who could pay the cost of
the Government without distress should do so. (39 u. S Stats
736, Sept. 8, 1916.)
“ It passed a progressive-inheritance tax so that the wealth
of the country should pay for its own protection. (39 stats
1091, Mar. 3, 1917.)
“ Do the American people want these statutes repealed?
“ It passed the excess-profits tax, to compel those profiting by
war conditions to meet the larger part of the cost o f war (39
Stats., 1000, Mar. 3, 1917.)
“ It passed the ivar-profits tax for the same reason. (40
Stats., 1088, Feb. 24, 1919.)
“ What did the Democratic Party do?
THE
FARM ERS.
“ It made a resolute effort to benefit the farmers of the coun
try, and to improve our agricultural output. For instance:
“ It passed the farm loan act, enabling the farmers of the
country to obtain cheap money on long time from the investing
public, through nontaxable farm-loan bonds. Over 8300,000,000
have been loaned to farmers, and under this system ultimately
the farmers of the country will get nearly all the money they recpiire at the cheapest rates. (39 Stats., 360, July 17, 1916.)'
“ The farm loan act had the effect of compelling land-mortgage
banks to lower their interest rates, and thus has been of great
value to the farmers.
1 0 7 4 7 3 — 2034 ;"
H O N . R O B E R T L. O W E N .
m
h
“ Mr. Chairman and fellow citizens:
“ True Democracy is a religion. It is not completely monop
olized by the members of the Democratic Party. Many of its
loyal disciples And themselves affiliated with other parties.
Democracy truly believes in the rule of the people, in their
wisdom, in their common sense, in their common honesty, in
their justice, in their patience and steadfastness, in their right
and ability to govern themselves. It thinks in terms of the
greatest good to the greatest number. Its disciples should be
‘ Soldiers of ■
the Common Good.’ Its great patron saint was
Thomas Jefferson, who stood for freedom o f religion, freedom
of speech, freedom of the press, the education o f the people by
free schools, the right of every citizen to vote.
“ On these principles Jeffersonian Democracy took control of
the Government in 1801 and held it for many decades. When
the party organization became weakened by selfishness and fell
under the control of those who believed in human slavery, it
passed from power by a revolt o f Jeffersonian Democrats, who
would not stand for human slavery. They organized a new
party and took the name which the followers o f Jefferson had
employed in 1800, calling themselves Republicans.
“ When the wise and kind Lincoln, on the field of Gettysburg,
prayed that the Government o f the people, for the people, and
by the people should not perish from the earth, he voiced the
spirit of true democracy throughout the world.
“ When the Republican Party got control o f the Government
during the Civil War, 1861-1865, every selfish interest that
wished to use the powers of government for private advantage
gradually attached itself to the Republican Party, courted its
leaders, became busy in its organization, contributed to its elec
tions, promoted its nominations, and steadily obtained an in
creasing influence in its management. Unhappily it seems to
be the history of all parties.
“ When in 1912, after many years, it became obvious that an
invisible government o f organized commercial and financial
selfishness had gained control of the organization of the Repub
lican Party and of the governing powers of the people of the
United States, the spirit of democracy, that sleeps but never
dies, arose in the hearts of the Progressive Republicans, under
the leadership of Theodore Roosevelt, and by this revolt there
was given to the Democratic Party its first real opportunity
since the Civil War to demonstrate that it had, through tribula
tion, come back to the true principles of Democracy of Jeffer
son, of Jackson, and of Lincoln, and magnificently the Demo
cratic Party has responded. It was assisted on many occasions
by patriotic Progressive Republicans.
“ We have thousands of new voters who will seek to know
what the party did when it got the power to act. They will ask
and our unmindful opponents will ask:
“ ‘ What did the Democratic Party d o ? ’
“ Let us answer that:
2
167473— 20545
C
“ Immediately it revised the 1robber' tariff. It cut down
the prohibitive schedules that selfishly sheltered monopoly in
the United States. It put the necessaries of life on the free
list—the free-list importations have increased a billion dollars a
year under Democratic management; it removed unjust tariff
discriminations, and by lowering the tariff stimulated our
imports and our exports. (38 Stats., 114, Oct. 3, 1913.) Our for
eign commerce has increased from four billions in 1913 to ten
billions in 1919. Let Democrats always keep in mind that, by
logical necessity, ultimately imports measure exports and’ ex
ports measure imports.
“ It established the Tariff Commission (39 Stats., 795), to take
the tariff out of politics and deal with it strictly as a business
matter. The old rallying cry of the Republican Party of the
Protective Tariff League, which promoted laws to tax the con
sumers for the benefit of the selfish members of the league, is
gone, because of the necessity now of admitting the commodities
of Europe, as the only available means by which the people of
Europe can repay the many billions o f loans made them by
our Government and by our'people. It has been demonstrated
that a revenue tariff, fairly drawn, is abundantly sufficient
to honestly protect American industries against foreign competi
tion.
“ The overwhelming majority of American industries, because
of the enormous production and productive power of American
machinery, can now compete on the most favorable terms with
any nation in the world.
“ What did the Democratic Party do?
P R O G R E S S IV E
IN C O M E
TAX.
“ It placed the taxes on those best able to pay the taxes, and
from whom' taxes were more justly due. It took the tax from
the backs of the consumers and placed it upon incomes, by the
progressive-income tax, .so that those who could pay the cost of
the Government without distress should do so. (39 U s Stats
756, Sept. 8, 1916.)
“ It passed a progressive-inheritance tax so that the wealth
of the country should pay for its own protection. (39 Stats
1091, Mar. 3, 1917.)
“ Do the American people want these statutes repealed?
“ It passed the excess-profits tax, to compel those profiting by
war conditions to meet the larger part of the cost of war (39
Stats., 1000, Mar. 3, 1917.)
“ It passed the war-profits tax for the same reason
(40
Stats., 1088, Feb. 24, 1919.)
“ What did the Democratic Party do?
THE
FARM ERS.
“ It made a resolute effort to benefit the farmers of the coun
try, and to improve our agricultural output. For instance ;
“ It passed the farm loan act, enabling the farmers of the
country to obtain cheap money on long time from the investing
public, through nontaxable farm-loan bonds. Over 8300,000,000
have been loaned to farmers, and under this system ultimately
the farmers of the country will get nearly all the money they re
quire at the cheapest rates. (39 Stats., 360, July 17, 1916.)
“ The farm loan act had the effect of compelling land-nrortgage
banks to lower their interest rates, and thus has been of great
value to the farmers.
<
1 6 7 4 7 :? — 2 0 5 4 5
k
“ Tlie Republican Senate, without a hearing, reported a bill
recently to repeal the tax-exemption features of the bends based
on joint-stock bank mortgages authorized under this bill, but
withdrew it when protests were filed.
“ The Democratic Party passed the Smith-Lever agricultural
extension act, under which the vast knowledge acquired by the
Agricultural Department in agriculture, horticulture, animal in
dustry, bee culture, farm economics, canning and preservingfoods, raising poultry, etc., has been put at the service o f every
farmer in every agricultural county in America by trained men
and demonstration farms. (38 Stats., 1086, Mar. 4, 1915.)
“ The Democratic Party passed the good roads act and appro
priated millions to build, by cooperation with the States, hard
surfaced
connecting the farms with the cities, to the ad
vantage of both. (39 Star., 355, July 11, 1916.)
“ The Democratic Party has vigorously expanded the ruralroute system—delivering mail to the farms.
“ It has built up the Parcel Post System, carrying parcels to
and from (he farm, and to and from the cities. Do the American
people or the farmers want these acts repealed?
“ What has the Democratic Party done?
roads
*
LABOR L A W S .
“ It has shown its deep desire to serve those who labor.
“ It established a Department of Labor; has developed it.; has
made it useful in steadily improving the conditions of life for
those who labor. (37 Stats., 736, Mar. 4, 1913.) It, has estab
lished employment bureaus, to bring the man and the job to
gether. It helps to settle disputes between labor and capital.
It has developed the Bureau of Mines and the Bureau of Stand
ards.
“ It passed the chud-labor act, to prevent employers from deny
ing children their right to he educated, and to have some of the
freedom of youth. (39 Slats.. 675, Sept. 1, 1916.)
“ It passed the eight-hour lair—one of the great accomplish
ments desired by organized labor. (39 Stats.. 721, Sept. 3.
1916.)
“ It passed laws providing for the minimum wage.
“ It passed the workmen’s compensation act, for accidents and
death in industry. (40 Stats., 961, Sept. 13,1918.)
“ It exempted combinations of laborers and of farmers from
the inhibitions of the antitrust act.
“ It passed a great act declaring that ‘ labor is not a com
modity.' This act is regarded as a magna charta for labor, and
forbids labor, consisting of human flesh and blood, to be handed
about as a chattel. (38 Stats., 731. Oct. 15, 1915.)
“ It passed an act providing for vocational instruction and
is engaged now in giving vocational instruction to many of our
young soldiers returning from abroad who have sought this
advantage. I heartily wish a larger number were being given
these advantages of instruction. (39 Stats., 929. Feb. 23, 1917.)
“ Do they who labor desire to rebuke the Democracy for these
acts and have these laws repealed?
“ It passed the seamen’s act to give liberty to those who
labor on the high seas, to put an end to the slavery practiced
on sailors, to provide better conditions of life at sea, and safety
at sea for the sailors. This legislation has been of very great
value in raising the wages o f sailors and making the profession
more attractive to young men. It was a necessary step in
107473— 20545
5
order to provide men who would be needed for the great mer
chant marine 'which the Democratic Partv desired
(38 s ta k
1164, Mar. 4, 1915.)
'
’
MERCHANT
M A R IN E .
“ The Democratic Party has now built up a gigantic merchant
marine, with 10,000,000 tons of shipping, big enough and strong
enough to take our commerce and our flag to every port in the
world. This alone is a monumental service to the American
people.
MONOPOLIES.
“ What did the Democratic Party do?
“ It did many things to abate the evils of monopoly.
“ It
Clayton Antitrust Act,
to
(38
730,
15,1914.)
‘
“ It established the Federal Trade Commission, with au
thority to suppress unfair practices in commerce. The Federal
Trade Commission is destined, by its example, by its policies,
and by its work, finally to teach the American people how to
control the abuses Of monopoly and of profiteering. (38 Stats.,
717, Sept. 26, 1914.)
“ The greatest of all monopolies in America was the monopoly
of money and credit, known as the Money Trust.
passed the
means with which
Stats.,
Oct.
providing various
check the practice of monopolv.
FEDERAL RESERVE
ACT.
“ The Democratic Party passed the Federal reserve act
established 12 credit centers, with 12 great Federal reserve’
banks under the control of the Government of the United
States through the Federal Reserve Board, so that any citizen
having sound credit, based on commodities or on actual com
mercial transactions, could have his note underwritten bv his
local bank and get money from the Federal reserve bank. This
act took from the Money Trust the monopolv of credits
(38
Stats., 251, Dec. 23, 1913.)
“ This act has enabled the 25,000 banks in the United States
to accommodate our national commerce without asking per
mission o f any private monopoly. This act has made panics
impossible. It has given great stability to the banks and to
credits. Under this act in six years the resources of the
national banks have increased from ten billions in 1013 to
twenty-two billions in 1919. All the banks included have had
their resources increased from twenty-five billions to fortveiglit billions under Democratic management in six years Not
a single national bank failed in 1919.
This act enabled the United States to finance Europe to
organize and conduct and to win the greatest war in history.
Those who fought this act are now asking the people of the
United States to put them in control.
“ Do the business men of America want this act interfered
with or to rebuke those who passed the act over persistent
Republican opposition?
“ The Democratic Party has developed the postal savings
banks for the accommodation of those timid people who do not
deal with the banks but are willing to trust their deposits
with the Government, and their deposits are thus made availa
ble for the banks. Under these acts the banks of the United
States have had the greatest prosperity in their history and at
the same time have substantially lowered the rates of interest
to American business men.
167473— 20545
" Wliat did the Democratic Party do?
“ It has passed many acts improving the Public Health Service
for the conservation o f human life.
*
P O P U L A R G O V E R N M E N jt.
“ It lias done many things to promote popular government.
It was due to the Democratic Party and the Progressives that
the direct election of 1 nited States Senators was put into the
Constitution. This amendment has made the Senate of the
United States more responsive to the opinions of the people,
and will make it still more responsive than it is now.
“ Do the people want to vacate or abandon this right or re
buke the Democracy for demanding greater power for the
people?
“ The Democratic Party democratized the committees of the
United States Senate by giving the committees control of the
chairmen and of conferees.
“ The Democratic' Party established modified cloture in the
Senate so that a few men could not by unlimited debate per
manently defeat the will o f the Senate itself. (1917, vol.
55, p. 19.)
“ It passed an act forbidding bribery in elections.
PEACE
T R E A T IE S .
“ It negotiated peace treaties with all the important nations
o f the world except Germany, Austria, Bulgaria, and Turkey,
who wanted war—and got it.
'
IT CONDU CTED T H E
W A R TO V IC T O R Y .
“ I# kept this Nation out of war until it became clear that the
llW ties of America and of the world were in jeopardy ,from
the aggressive conduct o f the Teutonic allies. When war be
came necessary for the protection of the honor, the dignity, the
liberties o f the American people, the Democratic administration
organized the Council of National D efense; organized the Na
tion for war, down to the very crossroads; passed thq declara
tion of war and the great war measures; established the War
Industries Hoard, the War Trade Board, and the food and fuel
control; financed the entente allies; passed the war marine in
surance a ct; set up the War Risk Insurance Bureau; organized
over 30,000 four-minute men; called to the colors 10,000.000
Americans; raised an army of over Jj,000,000 men; expanded the
Namj and merchant marine; provided the munitions of war;
trained and transported the required forces to Europe; pro
tected them from disease and vice as far as- humayly possible;
broke up the Herman submarine campaign; crumpled the lines
of the German troops in France; crushed the morah•of the Teu
tonic forces and compelled their military leaders to beg for an
armistice, in effect an 'unconditional surrender, thus saving the
civilization of the world, from the greatest military menace in
the history of mankind. (89 Stats., <149: 38 S t a t s . , 711.)
P R O G R E S S IV E R E P U B L IC A N S .
“ Mr. Chairman, I wish to express my warm and heartfelt re
spect for the patriotic Republicans and citizens of other parties
who loyally cooperated from the Atlantic to-the Pacific in win
ning this Great War. And I wish to express my deep gratitude
to those progressive Republicans who cooperated with the Dem
ocrats in the great legislative program o f the six years of
Democratic control.
167473— 20545
“ Wliat did the Democratic Party do?
“ Why, it passed the ‘ selective-draft act; by which rich man
and poor man, educated man and ignorant man, Protestant and
Catholic, Jew and Gentile, black and white, took their position
side by side on the battle line or in the service o f the country
where each was best fitted to protect the liberties of their com
mon country. Never was a more democratic act passed. No
man v as permitted by law to buy a substitute with money but
every man’s life and service was put upon a basis of ooualitv
in the defense of his country. (40 Stats., 76, May 18,1917)
“ What man had the impudence to question the ‘ Americanism ’
tl!°. I^ei
nlocr.a tic. Party in all these great accomplishments?
hat is Americanism if it be not the great policies which the
Democratic Party have.put into execution when it stamped out
sedition at home, whipped the Hun abroad, and made America
the commercial, financial, and moral leader of all the world
so that all great nations do homage to the United States, and
small nations, when they bend their heads in prayer, pray God to
bless the American people. America has become the beacon
light to all mankind, and no narrow partisan can hide this light
under a bushel or question the glorious Americanism of the
Democratic Party.
“ Under the li ar Risk Insurance Bureau was written insurance
for our soldiers abroad o f $40,000,000,000, and under our war
marine insurance act American commerce was protected with
out loss to the Government.
The Democratic Party passed the War Finance Corporation
act for the protection of our business men under the extraordi
nary interruption and stress o f war.
‘ 1
It passed the capital-issues act in order* to safeguard all
credits of the country and make them available for war
ran
Stats., 512, Apr. 5, 1918.)
(4°
“ It organized the Red Cross movement down to the cross
roads, and in this Great War enterprise the Democratic Party
gladly availed itself of the patriotism of citizens of all parties
TW O
G R E A T A M E N D M E N T S — W O M A N 'S
S U F F R A G E ; P R O H IB IT IO N .
“ By the combined efforts of the progressive men in both
parties two great amendments to the Constitution of profound
social and moral significance have been passed—woman’s suf
frage and prohibition. Of still greater importance is the fact
that these great reforms were due to the progressive men and
women in the homes of America.
THE ERECTION OF 1018.
“ Before the Great War had terminated successfully there
came on the election of 1918, in which the party lost many votes
because men who were aggrieved by the conduct of the war, bv
the selective-draft act, by the operation of the Army and naval
forces; many men injured by the- priority orders and the con„-U j-0 p Je ra^roa(3s where the administration had to give the
.r
right of way for war purposes; many men injured by the Gov
ernment commandeering materials and men; many men hurt
by the sudden raise in prices, due to the Government competing
for men in the shipbuilding yards and in munition plants; many
olfended by high taxes and by the extravagance and waste o f
war visited their displeasure on the Democratic Party.
“ Many men of German blood or of German svm
pathv who
resented the United States going into war.
167473— 20545
“ Many
as
men who opposed war
a principle were either
turned against the Democratic Party or their devotion to the
party was weakened.
“ There was a general disposition to blame somebody, and the
administration was the victim.
“ The Democratic Party, with its leading men intensely occu
pied with the winning o f the war, were in no position to present
the accomplishments o f the Democratic Party to the people
of the country.
“ Moreover, in 1918 the United States had the extraordinary
affliction of ‘ Spanish influenza,’ which killed in that year 447,000
o f our people and Over 380,000 of them died in the fall of 1918.
Under the advice of physicians political meetings were for
bidden.
“ Was it any wonder the Democrats lost both Houses? More
over, the result of the war was still unknown. It is now gen
erally- conceded that the President’s famous preelection letter
alienated many liberal or progressive Republicans and vitalized
those who were partisans to strenuous activity in resentment
of what they construed to be an affront and lack of apprecia
tion of their loyalty in supporting the war activities of the
administration.
“ Mr. Chairman, I wish it might he truly said that none of
our people during the Great War, either Democrat or Repub
lican, had made any mistakes in the management of the war in
the Army or Navy, or of the railroads, or of the telegraphs or
telephones, or o f any of the Government’s affairs [Republican
and Democratic citizens were almost equally divided in these
activities, hut the percentage of errors and wrongs was very
small considering the magnitude of our operations in the war] ;
but I can truly say that the record of accomplishments in the
last six years of complete executive and legislative control by
tiie Democratic Party is the most magnificent ever made by any
party in any country.
“ The Democratic Party found the United States in depression
in 1913, threatened with a panic. The New York banks de
clared in the summer of 1913 that they did not expect to he
able to furnish the money to move-the crops in the fall, and the
country banks were advised not to expect the customary redis
count privileges. The Democratic administration thereupon
furnished the money out of the United States Treasury to move
the crops and repeated the same operation in 1914, and now,
after six years o f Democratic management, the country has
been brought up to a condition o f the greatest prosperity in its
history. The banks are crowded with money, the people are
living better than ever, business is prosperous, everyone desir
ing to labor can find the opportunity, the trains are crowded,
and the hotels are overflowing.
“ Is it possible that the alleged delinquencies of a few in
dividuals, great or small, shall blot out the legislative and
executive accomplilnnents of the Democratic Party?
“ Is it possible that the human fability of a few citizens in
office will be urged as a just reason for reversing and condemn
ing at the polls the ideals and the progressive, constructive
policies o f the Democratic Party and rebuking the spirit of
loyalty and service by which it has been inspired?
“ Mr. Chairman, such a judgment would be as thoughtless
and as unjust as the condemnation of our sons who won the
1G 7473— 2 0 5 4 5
9
battles of the Argonne because some of them blundered and lost
their way in- the excitement of battle or came out of the carnage
with muddy shoes and bloody uniforms.
“ The Democratic Party was wounded in this Great War. It
was wounded in many ways, but it came nobly through every
trial and brought to the American people the most glorious vic
tory ever recorded in all the annals of time. It made America
the leader of the world.
“ No party in history ever deserved better of the people than
the Democratic Party now deserves of the people of the United
►
States.
THE
PEACE T R E A T Y .
“ Our President, whose leadership and whose sympathies
were behind the record of the last six years, went to Paris
and brought back a glorious peace treaty, establishing
peace among all the nations of the world, by which all the
nations of the world pledged themselves to respect and preserve
the territorial integrity and political independence of other
nations; to settle all international disputes by conciliation,
arbitration, and peaceful adjustment; to end competitive arma
ment; to coerce any outlaw nation again attempting to deluge
the world in blood by a world-wide economic boycott and by
such pressure as should be necessary to i*estore order.
“ After many months of study and acrimonious debate the
treaty of peace at last has four-fifths o f the Senate in favor
of it without amendment or with reservations that, after all,
do not seriously change its meaning.
“ The covenant of the League of Nations ushers in a new
democratic era in which all the great nations have agreed that
all just government is based on the consent of the governed.
“ The monarchies and autocracies are crushed. The democ
racies of earth are completely and overwhelmingly triumphant
throughout the whole world.
“But to accomplish this magnificent result our people lost a
hundred thousand o f our best young men, twenty-six billions of
money, and dislocated all of our internal affairs.
“ Shall we now lose the reward of these sacrifices—the great
est opportunity of service in our history—by refusing to ratify
the treaty and thus fail to assume the moral leadership of
mankind which is tendered our Republic by the unanimous
sentiment of all the free nations? Shall Senators take a small
revenge on the President for his alleged neglect of the Senate,
reject the treaty, wound all the friendly nations of earth, who
fought to the death in the cause of liberty side by side with us,
and lose our preeminent position with them purchased at such
a sacrifice? Shall the beloved youth of the world, our own best
beloved, have died in vain?.
“ I f the treaty be not perfect its errors can be corrected with
out tearing down the entire structure. Justice and reason will
prevail in the assembly of the world’s best representatives. The
treaty should be ratified without delay, with such reasonable
reservations as shall put the American people whole-heartedly
behind it.
THE FUTURE.
“ And now, Mr. Chairman, we are face to face with the immediate_future. It is not enough to say what we have done; it is
of the greatest importance to sky what we shall do. The spirit
and purpose, the vision and constructive genius which the
167473— 20545
Democratic Party has exhibited in the last six years, justifies
the faith that this great party can be better relied on than any
other party to solve the reconstruction problems following the
war.
THE
H IG H
C O S T OP
L IV IN G .
“ The greatest problem confronting the country is the high
cost of living, which deeply concerns those of fixed salaries,
fixed wages, fixed small incomes.
“ Many causes have combined to bring about the high cost of
living and cut down the purchasing power of the dollar. The
principal causes are:
“ 1. Credit expansion in the form of United States bonds and
certificates of indebtedness, short-time Treasury notes, exceed
ing $26,000,000,000.
“ Expansion in bank deposits, amounting to nearly $20,000,000,000 from 1913 to 1920.
“ Expansion of Federal reserve notes, made necessary to meet
l-ising prices and the consequent increased demand for actual
currency.
“ Expansion of gold sent to America to balance our excess
commodity shipriients abroad, amounting to eleven hundred mil
lion dollars.
“ These expansions of credits make dollars much easier to get
and make the exchange or purchasing value of the dollars less
because dollars are easier to get.
“ Similar foreign credit expansion in foreign bonds, bank de
posits, and currency has in like manner reacted on prices abroad
and raised the prices of foreign commodities imported into the
United States.
“ 2. Diminished production. European labor for five years,
and American labor for two years, has been largely withdrawn
from the production of goods and raw materials required for
normal peace times. In the United States we withdrew from
the factories, fields, mines, forests, and fisheries over 4,000,000
men and put them under arms and in training for war, and we
withdrew probably 10,000,000 laboring people from the activities
of peace to the activities of war, causing a diminished produc
tion o f goods.
“ 3. Increased consumption. The increased consumption by
war in the destruction o f property on land and sea, by the waste
and extravagance of war, emphasized diminished production.
“ 4. High cost of labor: Because of the urgency o f war and.
strenuous competition, extraordinarily high prices were paid for
labor in our factories, in munition plants, in shipbuilding yards,
and other Government and private works engaged in war pur
poses. The withdrawal of millions of men for war added to the
scarcity of labor and doubled the prices paid.
“ The extraordinarily high pay led many men to work Half
time— lowering production. They satisfied their wants with
half-time labor.
“ 5. The extraordinary European demand for the necessaries
of life added greatly to the demand for American goods and
raised prices in America on all the necessaries of life.
“ 6. Impairment of transportation: Transportation on land
and sea was subjected to ruinous losses. Millions of tons of
ships were sunk. There was no time to repair or rebuild cars
or locomotives, or to keep the railways in good condition, and
167473— 20545
11
now transportation is lacking efficiency even where production
is available, thus adding to the cost of living.
“ 7. The excess-profit's tax and certain war taxes have been
shifted to the price of commodities, and thereby upon the con
sumer, raising the cost of living.
“ High taxes o f all kinds are in some degree put on the cost of
goods wherever possible.
“ 8. Interstate monopolies, restricting production, restraining
trade, boarding necessaries of life and raw materials, and exact
ing unfair profits and high prices lias'added immensely to the
high cost of living.
“ 9. Profiteering: Many people are taking advantage of un
settled prices and conditions and the absence, of a suitable mech
anism to control it, to profiteer on those who are compelled to
buy.
“ 10. The unequal distribution of wealth, exaggerated by war,
lias led to extravagance and waste by tlwusands who have
profited and set a false standard of prices in many lines by
the reckless expenditure of those who need not measure the cost,
compelling people who can not afford it to pay fictitious and
false prices.
“ 11. Wholesale speculation in stocks, commodities, real estate,
and business has led to excessive interest rates—going up on the
stock exchange to 20 and 30 per cent; a G and 7 per cent rate
by the Federal reserve banks, and 7, 8, and 9 per cent for com
mercial loans. This is one of the most serious factors in the
high cost of living, because as goods pass through various hands
each adds a merchant’s profit to the original high cost. It has
also resulted in depreciating United States Liberty bonds, be
cause they bear a reasonable and moderate rate of interest, and
seem a poor investment beside current rates much higher.
“ Speculation in stocks alone was employing on the New York
Stock Exchange within the last few months 81,900,000,000
loaned by banks on call or short terms for speculation. Such
credits should be preferably used by the commercial hanks for
industry and commerce at legal rates.
K E M K D IE S .
“ Some of the causes of the high cost of living can be almost
immediately corrected, and steps should be taken of a concrete
character by which to reduce the cost of living. Among the
remedies which are obvious is to stop the expansion of credit
for unproductive purposes, such as pure speculation in stocks,
commodities, and real estate.
“ The productive power of the people of the United States
amounts to approximately seventy billions, per annum, and will
supply all the credits required for the most vigorous develop
ment.
“ 2. To stabilize the Federal reserve note issue and keep
the currency at a relatively stable figure.
1
“ The per capita circulation in the United States in 1890 was
.$22.82; in 1900, $26.98; in 1910, $34.33; in 1914, $34.35; in 1919,
$54. The expansion in 1919 included $11 gold per capita sent
from abroad in exchange for goods.
“ 3. The taxes should be reduced and the cost of the tear
should be extended over ~0 years, so that the cost of the war
>
will he distributed over the future and not fall too heavily upon
the present generation or compel high taxes in paying the prin
cipal at this time.
167473— 20545
wliich such bank is entitled.
“ c. The United States Government should be conducted on
a strict budget system, limiting expenditures to a moderate
income by reasonable taxation. Extravagance and waste in
government should be prevented and treated as a serious wrong.
Very great economies are possible in governmental administra
tion and should be vigorously worked out under the most im
proved modern methods.
“ 7. The people of the United States should demand reasonable
interest charges, and usury should be checked. The artificial
usurious rates charged on call loans in the Stock Exchange in
New York should be forbidden by law, and restrained by the
powers of the Comptroller of the Currency and the Federal lteserve Board and by act of Congress if necessary.
“ Call loans on stock exchange collaterals should be converted
into time loans for the benefit of the stock exchange as a true
market place and as a sound public policy. Time loans can not
command very high usurious rates.
“ It will be impossible for the railroads of the country to get
money on their bonds at decent rates unless the normal interest
rates'are brought down. Unless the railroads can be financed
on a fair interest rate for their bonds the public will pay the
bill in higher freight rates and passenger fares. If the interest
rates are brought down to a reasonable basis, the United States
Government bonds will come back to par.
EXCESS
r iiO F IT S .
• “ The excess-profits lax should be repealed, -and the Govern
ment should go out of partnership with those who are charging
the American people excess profits. The Federal Trade Commis
sion should hare its powers expanded as an agency by which to
reduce the high cost of living by restraining unfair practices in
interstate commerce.
R IG ID
ECONOM Y
NECESSARY.
“ During the war it was exceedingly difficult to entirely pre
vent waste and extravagance, but now the Government should
enter upon a policy o f rigid economy in the management of its
affairs. Economy is as essential in Government as it is in pri
vate affairs, and if we are to lower taxes it is essential that
every expense should be avoided consistent with the efficient
conduct of government.
M O N O P O L IE S .
“ The practices of interstate monopolies in limiting production
in order to limit supply and charge extortionate prices should be
stopped by the Government as an unfair practice. Unfair price
fixing and hoarding fo r speculation should be forbidden. It will
lie far better for monopolies to turn out five times as much at 20
per cent profit than charge 100 per cent profit on one-fiftli of the
output. Even those who profit by monopoly should remember
that they themselves are the victims of other monopolies, and
that their profits would be more valuable if their dollars had a
larger purchasing power. The Sherman antitrust law has
failed, because the Supreme Court declared that ‘ reasonable
restraint o f trade is not obnoxious to the statute,’ and no man
knows what a ‘ reasonable restraint of trade ’ signifies.
107473— 20545
13
“ The Federal, Trade Commission should have power to limit
interstate monopolies to a reasonable percentage of profit on their
turnover, so that the public interest is preserved while not deny
ing an abundant reward to those who transact the business of the
country. This has been fairly well accomplished bv the Cartel
system.
uteesmi
P R O F I T E E R IN G .
“ Profiteering should be dealt with in the same manner bv
National, State, and local authorities, and public opinion should
be aroused so as to make those guilty of profiteering feel the dis
approval of the public, and so that suitable remedies may be pro
vided to abate this evil without denying the just rewards for ini
tiative and industry in commerce.
P R O D U C T I O N --L A B O R A N D
C A P IT A L .
“ It is of extreme importance that production should be stimu
lated, and this involves many factors. It involves reasonable
stable, low interest rates. It involves equally the rights of labor!
of management, of capital, and of the public. Labor is both
manual and mental and is entitled to the fullest consideration.
The efficiency of labor for several reasons has been seriously im
paired. Labor is estimated in many lines to be from 30 to 40 per
emit belo\y its productive capacity prior to the war, notwithstand
mg the high prices paid for labor due to the unrest of labor and
the dislocation of labor under war conditions; to the extraordi
nary prices paid during war times; to extraordinary profits
during war by the employers of labor; due to trained men being
taken away from the stations in which they were expert to other
more profitable lines in making war material. Readjustment is
needed. This can be promoted by encouraging frank and free
discussion and arranging peaceful methods by which labor will
participate in what it produces above a bare living wage The
employee should not be regarded merely as a money-making mn
dune, but altogether as a human being, entitled o f right under
the Constitution to life, liberty, happiness, and a reasonable par
ticipation in the profits arising from labor. This policy is advis
able both for the sake of the employer and the employee. When
the workman knows that he is working both for himself and his
employer he will not indulge In or permit the killing of time the
waste of material, of energy. Labor management and capital
should work together on the principle of service to all mankind
along lines of cooperation in a spirit of fellowship, sympathy and
mutual support. /It will not do in a democracy to rely solely on
i he physical powers of: the Government and brute force to control
human unrest. That remedy is a two-edged sword, dangerous
alike to capital and to labor, and to the stability and peace of the
Government itself. The doctrine of mere arbitrary force should
not be seriously entertained by thinking men who love liberty
after the lessons of this war.
“ Neither labor nor capital can be expected to render willing
service unless it receives a just and satisfactory compensation.
“ To prevent strikes and lockouts, the causes should he found
and removed.
“ Increased productivity should be for the service of all and
not exclusively or unduly for profit.
d is t r ib u t io n
.
“ Much can be done in promoting improved methods of distri
bution through improved organization, through terminal ware
houses and distributing centers and a central board of inform a167473—20545
tion through which sound advice can be given to those engaged
in the process of distribution.
“ The improved use of warehouse receipts as a basis of credit
through the expansion of the acceptance system in furnishing
credit for goods in process of actual distribution.
GOOD
ROADS.
“ The building of hard-surfaced roads and the use of motor
trucks and automobiles is a very important part of cheapening
the process of distribution and lowering the cost of living. The
United States should vigorously promote this development in
conjunction with the States.
LAW
AND
ORDER.
“ The powers of the Government should not be subjected to
the dictation of organized minorities, whether representing
capital or representing labor or any special group, but the right
of men to organize and petition the Government should not be
denied. The right of men to organize for collective bargaining
is a just and reasonable right which should not be interfered
with, but conflicts arising between organizations of men repre
senting capital and representing labor should be adjusted by
means provided for conciliation, mutual accommodation, and by
public opinion. In such controversies the public is entitled to a
substantial representation, so that the interests o f the public
shall not be disregarded by those who are merely seeking their
own interests. A just settlement of such disputes can be ar
rived at and is one of the great problems remaining to be solved
in a manner just to the public and to those who serve the public
alike.
S E D IT I O N L A W S .
“ The existing statutes are sufficient to punish those guilty
of overt acts against the dignity of the national statutes, and
there is no need for the passage of extreme laws based on excite
ment and fear of bolshevism in the United States. The punish
ment of the advocacy and organization of actual conspiracy to
change the forms of our Government by assassination should
be vigorously inflicted, and additional law should be provided to
cover such conspiracies, if it actually prove to be necessary. The
people of the United States are overwhelmingly honest, loyal,
patriotic, and can be relied upon at all times to protect the
country against sedition and treason.
“ We saw during the war the best evidence of this. The only
danger was that the people themselves might go too far and
act on suspicion in dealing with the ignorant and thoughtless
who exercised the American privilege of occasionally indulging
in foolish speech.
“ It has taken a long time to build up our great Government,
based on its ideals of liberty, justice, and humanity, and the
people of the United States will not permit any man or set of
men by violence and force to tear dovm constitutional Govern
ment in America. Law and order must be and will be rigidly
enforced. It can be and should be enforced without extreme
sedition laws which might destroy liberty and break down free
dom of speech and freedom of the press. Ignorance should be
controlled by education where possible, and force should only
be used where milder remedies fail.
“ Our Constitution provides a peaceful, reasonable way for
its amendment, and those who by organized societies are secretly
engaged in advocating the overthrow of our Government and
1 0 7 4 7 l> — 2 0 5 4 5
i
V
15
social institutions by fire and sword should be treated as guilty
o f criminal conspiracy and sedition.
’ .
“ It is my opinion that political prisoners guilty of no overt
criminal act should be released immediately and all others
brought to summary trial and not subjected to indeterminate
imprisonment awaiting trial.
C O N S E R V A T IO N .
“ The great policy of the conservation o f our natural re
sources is another means by which the high cost of living can
be abated by increasing production through the use of these
great natural resources. It should be vigorously maintained
and extended to bring into use these values.
U N IT E D
STATES
BONDS.
“ The United States bonds which were sold to the people under
the Liberty loan and Victory loan campaigns ought to be brought
back to par, and this can be done by insisting upon lower rates
of legal interest through the Federal reserve banks and through
the member banks and forbidding the high usurious rates on
the stock exchanges—which run up to 30 per cent on c a ll.
loans—which have the effect of raising the commercial rates
throughout the United States. Even the reserve banks under
this influence raised rates to 0 and 7 per cent. It logically fol
lows that United States bonds bearing moderate rates are dis
credited and brought below par, when contrasted with very
high commercial rates, and when banks and citizens borrowing
on 4i per cent Government bonds are charged 6 per cent for
credits. If Government bonds plus the credit of a citizen or
bank are not entitled to credit at the rate of interest the Govern
ment bond bears, it need not surprise the country if the bonds
sell for a 10 per cent discount.
“ For 50 years before the war the normal rate of interest in
France and Belgium was 3 per cent. In Great Britain the ac
ceptance rate during the war was only 34 per cent. United
States bonds bearing 2 per cent, with the circulation privilege,
have been selling at par for years.
POPULAR
GOVERNM ENT.
“ The policy of the Democratic Party in promoting popular
government should be steadily adhered to in order that the
sovereignty vested in the people of the United States may have
a concrete mechanism through which it may exercise the gov
erning power. The popular-government process is of the great
est importance to accomplish this and to enable the people to so
control the Government that it may function in their interest
and be comparatively free from the organized selfishness that
is continually exerting itself to lay its hapds upon the govern
ing powers of the people in a thousand crafty ways.
CLOTURE
IN
U N IT E D
STATES
SENATE.
“ Even now a majority of the people’s representatives in the
United States Senate can not control the Senate because of its
minority serving rules that permits a minority to control its
acts. Unqualified cloture or ‘ the light to move the previous
question ’ is a reform absolutely necessary to deprive the special
interests of undue power in the people’s Senate. It ought to be
demanded by the people.
IN IT IA T IV E
AND REFEREN D U M .
“ You have seen in Oklahoma the value of the initiative and
referendum, which has now been adopted by more than 20
167473—20545
• 1G
States, including such Commonwealths as Massachusetts, Ohio,
California, Mississippi, and Missouri. This law puts the powers
of government into the hands of the people and enables them to
initiate any law they do want and veto any law they do not
want.
“ The primary la w, the short ballot, the preferential ballot,
the corrupt practices prevention acts are essential in preventing
organized minorities and plutocratic influences, through ma
chine-rule methods, getting control o f the governing power.
“ The publicity pamphlet issued by the Government to each
citizen giving the argument for and against candidates and pub
lic measures is necessary for the information of the citizen that
he may vote intelligently and escape the undue influence of the
press columns too largely controlled by selfish interests.
“ When these processes of popular government shall have
been perfected and the people are in complete control of their
own Government, the powers of monopoly and of profiteering
can be effectively controlled and the high cost o f living re
duced. When this is accomplished we shall have had an answer
to Lincoln’s great prayer that ‘A Government of the people,
for the people, and by the people should not perish from the
earth.’
“ To accomplish these great ends the liberal elements of
America should unite.
It will surely be conceded by thoughtful and just men that
the Democratic Party is very substantially controlled by the
progressive and liberal elements of the country, and that the
Republican Party can not hope to make itself the liberal party
of America. We, therefore, have a just right to appeal to Pro
gressive Republicans and liberal men of other parties to co
operate with the Democratic Party. We have a right to invite
them to joiif us on terms of equality in order that the progres
sive elements o f the Nation through the Democratic Party may
control the laws of the country along progressive and liberal
lines. If this cooperation can be accomplished, the liberal
elements of America will be able to control the Government
in the election of 1920, and the prosperity which has been
brought about under the liberal and progressive statutes of the
last six years will be continued and improved upon.
“ Those who love democratic and progressive ideals, who love
the common good, who worship liberty, justice, and humanity
should do so ‘ in spirit and in truth,’ and not be diverted by
partisan pride, far less by sordid or selfish motives, from faith
ful service to the great cause.
“ Hundreds of thousands of progressive men affiliated with
the Republican Party in former elections believe in our ideals,
and reluctantly follow the reactionary leaders who are con
tinually protecting or favoring monopoly. These progressive
citizens belong with us. They can be made to know that their
ideals can best be obtained through the Democratic Party.
“ The just solution of our vital domestic problems require pro
gressive citizens to unite. I appeal to you to lay aside all
partisan bitterness and invite to your support forward-looking
citizens of other parties. Let us work harmoniously together
in promoting social and industrial justice and human'happiness.
1G7473-—20545
o
INTEREST RATES.
REMARKS
OF
H O N . R O B E R T L. O W E N ,
OF
OKLAHOMA,
AND HIS LETTER TO THE PRESIDENT,
IN
T he S enate
of the
U nited S tates,
February 16, 1920.
Mr. OWEN. Mr. President, before the war Belgium for 50
years had a 3 per cent rate of interest per annum. It was a failrate. France had a 3 per cent rate, and even small sums were
loaned by the Bank of France at 3 per cent. United States
bonds with currency privilege, bearing 2 per cent, sold at par
before the war. London during the war has loaned money to
merchants on acceptances at 31 per cent.
The manufacturers, merchants, and business men of the
United States are entitled to stable, moderate interest rates.
They have this right interfered with by the violent fluctua
tions authorized and practiced in New York and Boston on
stock-exchange collateral loans. The call-loan rates are arbi
trarily fixed from low rates to 30 per cent, and a bull market
or a bear market follows, of course, as cause and effect.
The high rate is fixed avowedly to check speculation, but
speculation can be otherwise checked by raising the margins
and declining to loan beyond a reasonable proportion of the,
bank’s resources and by limiting the loans of the Federal re
serve bank to banks which persist in this harmful nolicy.
These high rates on call loans on the stock exchange has
seriously affected the interest rates in our vast commercial
business, and even the Federal Reserve Board hg,s raised the
rates of the Federal reserve banks to 6 per cent for member
banks, which means 7 and 8 per cent for the customers of the
member banks.
Against this destructive policy, which adds to the high cost
of living, I protest. I have written a letter to the President,
which I ask to submit for the R ecord without reading.
There being no objection, the letter was ordered to be printed
in the R ecord, as follow s:
F ebruary 13, 1920.
Subject: Interest rates.
The P resident .
The White House.
M y D ear M r . P r e sid e n t : I deem it my duty to call youi
attention and the attention of your administration to the im
portance of moderate interest rates and stability therein in
the United States and the important part which the influence otf
the Government can exert in accomplishing these ends through
the Treasury Department, the Comptroller of the Currency,
and the Federal Reserve Board.
Before the Great War Belgium had a fixed, stable rate of 3 per
cent for 50 years, and the rate in France was practically th*
164674— 20459
2
same, and United States Government bonds with the circula
tion privilege were sold at and above par when they bore only
2 per cent interest.
During the World War London merchants have enjoyed a
3i per cent rate on acceptances.
Our manufacturers, our merchants, our business men are
entitled to reliable, stable, reasonable rates of interest.
The productive and distributive processes so essential to re
store the equilibrium of the world depend upon such rates in
order to function most efficiently.
I call your attention to the unreasonable manner in which
the interest rates on the stock collateral loans in New York
have been fluctuating from normal to 25 and 30 per cent, with
the most unhappy consequences upon interest rates, injuriously
affecting our commercial business throughout the United States.
The Federal Reserve Board has been induced to raise the
rate of discount of the Federal reserve banks to a high point
as a supposed check on the extraordinary speculation which
has been taking place on the stock exchange.
These artificially unreasonable high rates of interest charged
by the banks in the central cities on stock collateral call loans
have had the effect of drawing to these cities from different
parts of the country funds which ought to be exclusively used
in commerce, and this process went to a point where recently
the amount of stock collateral exchange loans on call or short
time reached a volume in New York City of $1,900,000,000,
withdrawing for speculative purposes these credits which
should be used in the industrial and commercial life of the
country.
The investing and speculating public has been attracted to the
•stock exchange by the policy of narrow margins and low rates
of interest; but after the public has taken on these speculative
purchases the interest rates are raised to a high point and the
margins are increased from 10 per cent to 20 and 30 per cent,
with the effect of squeezing out the people who, in the language
o f the day, “ can’t hold on.”
These loans, which were $1,900,000,000 60 days ago, have now
been reduced to $1,000,000,000, and the stock market has gone
through a very severe depreciation; and this is the second up
heaval of this kind within two months. I inclose an exhibit
showing the violent fluctuations which have taken place con
trary to a wise public policy, to the ruin of many weak and
foolish speculators; but, above all, to the injury of the manufac
turers, merchants, and business men who are entitled to have
stable, moderate interest rates.
The manufacturers, merchants, and business men are entitled
to stability. They can not otherwise transact the business of
the country with safety; and in their name and on their behalf
I respectfully and very earnestly insist that the Government
shall establish a policy which will give stability to interest
rates, prevent these violent fluctuations, and lead to lower inter
est rates.
Will the question be asked, How can it be done? I venture
to answer:
First. That the influence of the Comptroller of the Currency
and of the Federal Reserve Board be exerted to require a lim
itation upon loans made by member banks or banks engaged in
164674— 20459
3
interstate commerce, so that only a reasonable percentage of the
deposits of such banks shall be permitted to be used for the ac
commodation of those who are buying stocks for speculative
purposes.
Second. That a margin of not less than 25 per cent shall be
required in such transactions.
Third. That an interest rate not exceeding 8 per cent shall be
permitted in such transactions.
Fourth. That the reserve board shall charge a special rate
of interest to those banks who are using the accommodations of
the discount privileges with the reserve banks in excess of their
rightful proportionate part of such accommodation, so that the
normal discount rates of the Federal reserve banks shall not
exceed 4 per cent, but the special rate for banks desiring to use
more than their rightful proportion of the reserves with the
reserve banks shall be at a progressively higher rate. In this
way banks that put up Liberty bonds for the purpose of getting
more than their proportionate part and lending this money out
on very high rates of interest will find it less profitable to en
gage in such a policy.
The discount rates of the Federal reserve bank of Richmond,
for example, effective January 23, 1920, included the following:
15 days
and
under.
16 to 90
days.
91 days
to 6
months.
Member banks:
Per cent. Per cent. Per cent.
Secured by United States certificate of debt
a
Secured by Liberty bonds
5h
Secured by eligible paper.
6
Secured by War Finance Corporation bonds
7
Rediscounts:
Customers’ notes—
Secured by United States certificates of debt..
4f
4f
Secured by Liberty bonds...........
51
Secured by War Finance Corporation bonds.
?
7
Trade acceptances.................
6
6
Commercial paper..............
6
6
Agricultural or live-stock paper
6
6
6
lo u will observe from these discount rates that eligible
paper that is, the notes of manufacturers, merchants and busi
ness men engaged in production and distribution—would be com
pelled to pay around 8 per cent if the member bank is permitted
any margin over and above what they themselves have to pav
the reserve bank. This is true even on trade acceptances, wdiich
in London have a rate of 3£ per cent. In other words, our rnanufacturers, merchants, and business men engaged in production
and distribution are compelled to pay by this policy twice as
much as they do in London, charging the interest, of course
upon the cost of the goods, and thus raising the cost of living!
Against this policy I enter my resolute and solemn protest.
I heartily approve the evident purpose of the Federal Reserve
Board to reduce the excessive speculative loans on the stock
market and divert such credits to the benefit of commerce; but
this can be accomplished without raising the rate of interest bv
requiring larger collateral margins and by limiting stock col
lateral loans to a reasonable part of the reserves of the member
banks, and all loans to a proportionate part of the reserves with
the Federal reserve banks.
164674— 20459
L IB E R T Y
LOAN
AND
V IC T O R Y
LOAN
BONDS.
When the American people were engaged in the war the Treas
ury Department organized Liberty and Victory loan drives, and
every citizen was urged to buy these bonds; if necessary to sell
his property and buy the bonds; to borrow money and buy the
bonds. The bonds were sold at par. It was a patriotic duty to
buy the bonds, but the high rates of interest which have resulted
from the unrestrained speculation on the stock exchange, and
the high rates of interest which the reserve banks have estab
lished, have had the effect of having these bonds appear as a
poor investment, and these bonds have shrunk so that in the
case of the bonds, which have not the nontaxable feature, have
fallen off in value almost 10 per cent, inducing many persons
who are poor and who borrowed money to carry these bonds to
sell them at a loss, and many more will be induced to sell them
at a loss, contrary to a wise and just public policy.
If the normal discount rate of the Federal reserve banks were
put at 4 per cent and the banks were discouraged from abusing
the privileges of the reserve banks for stock-speculative pur
poses in the manner which I have pointed out, these bonds
would come back to par, and they should be brought back to
par. The people who bought these bonds ought not to suffer
a loss, and the credit of the United States ought to be preserved
by the policy which I have taken the liberty to suggest to you
and to your administration.
The result of these speculative stock loans has been such that
the New York Federal reserve bank has had its reserve very
seriously impaired, so that the New York reserve bank has
been borrowing money on a large scale from other reserve
banks who do not suffer from this strain.
There is no adequate reason why the rates of the reserve
banks should not be uniform; why they ought to be higher in
one part of the country and lower in another part of the
country. The loans are as reliable in one part of the country
as in another, and every part of the country is entitled to a
uniform rate.
The high cost of living demands for its solution stability in
interest rates in order to encourage production and distribu
tion, and to reduce the high cost of living demands a moderate
rate of interest.
The Federal reserve banks were not established as money
making institutions, but for the purpose of gi\ing stability and
a reasonable stable interest to the productive enterprises of
the Nation.
The Federal reserve banks last year made a profit of about
100 per cent of their capital, but this in no way measures the
added expense on the cost of living, because the high rate of
interest charged by the Federal reserve banks is reflected upon
loans and discounts of other banks, running into the billions,
since it affects the interest rates in all parts of the country.
I regard this matter as a matter of national importance, and
I would not feel that I had discharged my duty to the country
if I had failed to call your attention to it in these explicit
terms.
Yours, very respectfully,
R obert L. O w e n .
164674— 20459
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E : 1920
LETTER OF HON. ROBERT L. OWEN
TO
FEDERAL RESERVE BOARD
M A Y 14, 1920
T o low er t h e in te re s t rates as a m ea n s o f h e lp in g to
RESTORE LIBERTY BONDS TO PAR
United States Senate,
May lJh 1920.
lion. W . P. G. H arding,
Governor Federal Reserve Board. Washington, D. C.
My Dear Governor: I thank you for your letter of May 3,
answering my letter of April 27, in which I urged the Federal
Reserve Board to lower the interest rates of the reserve banks
as a means of helping to restore Liberty bonds to par.
The Secretary of the Treasury and every agency of the Gov
ernment, including the reserve banks and the member banks,
cooperated in a strenuous drive to induce the American people
to buy Liberty bonds. The people were told to buy the bonds
until it hurt. They sold their property, "they borrowed money,
they mortgaged their homes to buy these bonds on the assur
ance of the Secretary of the Treasury that there was no better
security, and they had a right to believe that these bonds
would be maintained at par. But, my dear Governor, i f you
permit these high rates of interest, of which I have justly
complained, the inevitable consequence will be that these Gov
ernment bonds must go still lower than they are now instead
of reacting to par.
The violent fluctuating high interest rates on the New York
Stock Exchange which go from 8 to 30 per cent, advertised
throughout the country in every important paper in the land,
together with the high interest rates of the Federal reserve
banks to member banks at G and 7 per cent, and the conse
quent higher commercial rates daily advertised in the public
press of 8, 9, and 10 per cent, not to mention commissions on
the side and discounts, are jointly impairing confidence and
creating an atmosphere of suspicion, distrust, and widespread
talk of pending industrial depression and industrial panic.
I have insisted that the powers of the Government Should
be exercised through the office of the Federal Reserve Board,
the Federal reserve banks, and the Comptroller of the Currency
to remove these causes, which, if persisted in, may cause a
serious industrial depression and make Liberty bonds go still
lower.
The claim of the New York Stock Exchange that these high
and violently fluctuating interest rates on call loans are neces
sary for the purpose of preventing speculation is indefensible,
because it does not .prevent speculation. The professional
operator immediately speculates in a bear market, which in
evitably must follow these artificial high interest rates. The
180810—20855
2
'
.
speculator can afford to pay high interest rates, but legitimate
business can not. Moreover, the employment of bank credits
for speculation can be prevented by harmless methods: First,
by the banks refusing new loans for speculative purposes; second, by requiring gradual liquidation of old loans employed in
speculation; and, third, by raising the margin on speculative
loans.
The remedies I suggest are harmless to the general public.
The remedy employed of high interest rates on call loans run
ning up to 80 per cent is destructive o f public confidence and
threatens industrial depression.
When the Reserve Board raises the rate to 6 and 7 per cent
it has the effect not of stopping the speculator but of stopping
legitimate business, and putting the brakes on manufacture,
commerce, agriculture, on production, and distribution.
You quite misunderstand the point when you speak of my
contention that the Liberty bond market recently fell because
the Federal Reserve Board raised the rate of interest, which you
think is disproved by the fact- that the bonds fell in April, 1919,
to 95 before the Federal Reserve Board raised the rate o f’ inter
est. My contention is that the high rates of interest on the
stock exchange, and the high rates charged by member banks
on commercial loans based in part on the high rates of the
reserve banks, are all factors producing this result, and when
the Reserve Board recently raised the rate these bonds went
down much lower tlian they had been before, and they must
go lower still if the board persist in this policy. 'W hat I con
tend is that the Federal Reserve Board in raising these rates,
and thus adopting the unwise policy of the stock exchange, is
depreciating the market value of all securities, including"Gov
ernment bonds.*
I understand the reserve board desires to deflate credit by
raising the rates of interest. Assuredly raising the rates of
interest will deflate credits, even tiie credits of the United
States, of which I complain, but I am anxious the reserve
hoard shall only deflate those credits that require deflation and
not deflate credits of the Government and of legitimate pro
ductive business, which ought not to be deflated. '
The United States was compelled to expand its credits, and
issued $26,000,000,000 of war bonds. The war resulted in an
increase of $20,000,000,000 of bank deposits, a total increase
of expanded credits of $46,000,000,000. No substantial part
of these credits should, be deflated at this time. The only de
flation of credit justified is the deflation of credits employed in
speculative loans on investment securities, on real estate, and
Oil commodities for hoarding by profiteers.
My dear governor, it seems to me that there is some serious
misconception existing in the country with regard to what is
inflation and what isvnot inflation. I am certainly opposed to
inflation, hut I am strongly in favor of the extension o f busi
ness, increasing production, and improving distribution by ex
tending credits on a stable low-interest rate.
The expansion of credit for such purposes is justified, but, of
course, the expansion of credit beyondf £he available resources,
even for the most important of purposes, is not justified. The
Bank of England, conducted by the wisest merchants in the
world, has not hesitated to extend credits for productive pur180819—20855
poses even when the gold reserve was thereby seriously dimin
ished. As you very well know, they went to a very low gold
reserve during the war without ever denying credits to their
business men who were engaged in legitimate industry. The
London merchants had 31 per cent acceptance rates all during
, the Avar, when the British Government paid 5 per cent.
I f the people are frightened by the talk of industrial de
pression, by high interest rates, it has the effect of preventing
production and putting the brakes on manufacture and on our
entire industrial life.
\
I do not agree with Secretary Leffingwell that the present
depression in Liberty bonds is due to the owners of Liberty
bonds spending the bonds recklessly as spendthrifts. People
who bought Liberty bonds do not desenr such a classification,
e
although, of course, some individuals out of a very great number
are spendthrifts. But the spendthrift quickly parts Avith his
bonds to other people. The spendthrift theory does not explain
the terrible depreciation.
If money Avas cheap and credits were available at I o a v rates,
it ^perfectly obvious that these bonds would go to par, and just
in degree that the banks of the country raise the rates to very
high artificial figures to that degree the Liberty bonds and
Victory bonds will assuredly fall in market \alue.
T
You advise me that the Liberty bonds “ can not be brought
brick
P& by artificinl m e t h o d s . T h e y can be depressed by
i*
universal high rates of interest artificially fixed by the banks
and that is precisely what has happened and to Avliich I
earnestly object.
I do not say that the Federal resenT banks can restore these
e
bonds to par by lending a part of their resources on these bonds
at a I o a v figure. What I do say is that the value of these bonds
is depressed by the action of the Government in countenancing
the scandalous interest rates on the NeAv York Stock Exchange,
tiie unreasonable interest rates by the member banks of the
country, and the unfair interest rates by the reserve banks to
the member banks.
<, You very justly say, my dear governor:
4
“ There is a Avorld-wide demand for capital, and the demand
for bank credit in this country in agricultural, commercial, and
industrial purposes is heavier than has ever been knoAvn before;
investment demands for neAv construction, for the maintenance
and equipment of railroads, and for the financing 6£ our foreign
trade are very great.”
Are these just demands to be met by denying the credits, or
are they to be repressed by. raising the rates to prohibitive
points, and thus retard enterprise and production, the employ
ment of .labor and capital in creating commodities?
You say the reserve banks would have been “ overwhelmed
with applications for loans” on Government securities if the
reserve banks had continued to offer a I o a v discount rate on
paper secured by Government obligation.
I am not advocating the reserve banks lending beyond tlieir
resources at any rates or on any'securities. I am protesting
against the reserve banks setting a bad example to the country
by raising the rates of interest on legitimate business engaged
In production and distribution. I am objecting, my dear goAT
ernor, to the Reserve Board taking advantage of this condition
180S19— 20855
and raising these rates merely because the demand is urgent,
when the proper function of the Federal reserve bank is to
stabilize the interest rate, keep it at a reasonably low figure,
and set a wise and just example, to the member banks.
The member banks pay from 2 to 4 per cent for deposits and
normally let their money out at from 5 to 7 per cent, with a
margin of about 3 per cent. The reserve banks pay no interest
on deposits, and 3 per cent is a rate high enough to enable them
to make all the money they are entitled to make out of the
public. On a 4 per cent rate the Federal Reserve Bank of New
York last year made 110 per cent, and I suppose on a 0 and 7
per cent rate they will make this year about 160 per cent.
This is precisely what I am objecting to. The Federal reserve
banks should not be put in the attitude of profiteering or of
setting the example of profiteering to member banks. The
powers of the Government are not being properly exerted to
stop the scandalous rates of interest on the New York Stock,
Exchange.
I was advised that six months ago the New York banks had
nineteen hundred million dollars loaned on investment securi
ties and the commerce of the country was suffering for credit.
1 believe'with the board, that these credits on investment securi
ties and speculative loans should be diverted, as^far as practi
cable, to productive purposes, but to raise the, rates to 6 and 7
per cent upon all banks alike does not accomplish this end. It
merely penalizes all business of every kind and character,
regardless of whether they are using their credits for specula
tive or productive purposes.
What I earnestly desire to call to the attention of the board
is that credits ought to be extended at a low rate to the extent
of the capacity of the reserve banks for productive purposes;
that member banks should be urged to do the same thing, and
that the powers of the Government should be exerted against
the excessive, violently fluctuating rates on the New York Stock
Exchange.
Hoping that the suggestions which I have the honor to make
may be of some service to the deliberations of the board and to
the country, I remain,
Very respectfully, yours,
K o b t . L. O w e n .
180819— 20855
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E : 1929
HON. R O B E R T L. O W E N
ON THE STABILIZATION OF CREDIT; THE
RESTORATION OF INDUSTRIAL ACTIVITY
IN EUROPE AND IN THE UNITED STATES;
THE REHABILITATION OF INTERNATIONAL
COMMERCE AND THE REESTABLISHMENT
OF THE FOREIGN TRADE OF
THE UNITED STATES
IN T H E
SENATE OF THE UNITED STATES
JANUARY
4,
1922
YK
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O FF IC E
1922
8333 0— 22109
I
SPEECH
HON.
ROBERT
L.
OWE N.
GOLD AND COMMODITY SECURED CURRENCY.
Mr. OWEN. Mr. President and gentlemen of the Senate, I
introduced this meaning a bill proposing to establish a gold
and commodity secured currency for use with a view to stabiliz
ing the industrial activities of Europe and with a view to pro
tecting the foreign commerce of the United States. I particu
larly desire to have the serious attention of the Senate, because
while I do not intend to press the bill, I do offer it to the
majority party as a means of helping to overcome the present
industrial depression in the United States, with a view to re
habilitating our foreign commerce, and with a view, as a means
to that end, of restoring industrial activities in Europe.
I believe the suggestions I am about to submit will be of great
value to the United States and to the world if it shall meet
your approval and support.
I am encouraged to hope that Senators will be disposed to give
attention to the proposals which I submit, because I have had
unusual opportunity to study the principles of hanking. Thirtytwo years ago I established the first national bank organized
in Indian Territory, now Oklahoma, and was president of it
for 10 years. On the 20tli of February, 1908, immediately after
I entered the Senate, I outlined and advocated before the Senate
every principle of importance that afterwards was written
into the Federal reserve act, and had the honor of repre
senting the Senate as its chairman of the Committee on Bank
ing and Currency at the time the Federal reserve act was
written.
Our foreign export trade has been ruined and has fallen off
during this past year to the extent of over three billions of
dollars, for the very simple reason that Europe can not ade
quately buy and has so little to sell. I do not consent that any
part of the money due us shall be remitted to Europe. Our
charities to Europe I gladly commend, but their covenanted
debts to the people of the United States must be paid. They
are not bankrupt.
The hills of Europe are still covered with vineyards and
orchards and the fertile fields are as productive as ever. The
natural resources of Europe, the mines, the woodlands, the
water powers, the transportation facilities, remain, and the
facilities for manufacturing have been greatly increased since
1914 through the gigantic energies of five years of war which
created more machinery than it destroyed. The man power and
the woman power of Europe are capable of as great an output
now as before the war. Before the war the people of Europe
had loaned to us many billions of dollars, a large part of which
2
83330— 22109
3
we have repaid with interest, and we have extended credits to
Europe during this World War through our Government ten
billions of dollars, and since the war through our citizens more
than five billions in addition. The European people as people
are not bankrupt and they are not dishonorable. They are ah e
to pay the United States and they will pay the United States
in due tune, principal and interest, but they can not at the
present time pay either principal or interest because their
industrial Jife has been disorganized through the demoralization
following the war They have neither gold nor sufficient com
modities with which to make payment to the United States
The one great outstanding, factor breaking down confidence
and destroying the validity and desirability of contracts in
Europe is the violent inflation of currency through the printing
press. In some of the countries of Europe people have been
compelled to abandon the making of contracts in terms of cur
rency and have lesorted to the hopelessly clumsy svstem of bar
ter so many bushels of potatoes for so many bushels of c o r n
or coal.
Neither the buyer nor the seller can afford to make a con
tract in a currency which, like the German mark, may shrink
or expand 33 per cent within a month.
In Russia the ruble which sold two for a dollar before the
war is now selling 50,000 rubles for a dollar. In Poland
and Austria it is almost as bad, and in Germany the mark for
merly worth 23.8 cents, is now worth one-half a cent and a fqw
weeks ago was worth one-third of a cent. The Italian lire
worth 19.3 cents before the war, is now worth less than 5 oeiW
ami the French franc is now worth only 8 ce. ? and even t fe
pound sterhng, worth before the war .$4.86, Is niw worth only
*4'20’ f0£,th. su"Ple reason that even the pound sterling is not
e
redeemable in gold and its exchange value is worth almost pre
cisely what the pound sterling will buy in terms of gold bullion
in tlie London market. The same thing is true, of course as +
o
the irench franc, the German mark, and the Italian lire If
you buy bul ion gold with these currencies in their own country
you will find that what we call the exchange value of the franc
lire, or mark is measured by the purchasing power in gold of
these currencies m their own country. And this of course is
a necessary truism for the reason that the shipping of gold
fi om these countries would immediately balance any exchange
transaction ana establish exchange at gold par. But thfy
lnue little gold to spare and can not ship gold. They must sell
their paper currency for gold or its equivalent in dollar exchange
when paying us.
TVr?^?;«wrt in puttin? 0llt tlle John Bradbury notes, which are
,
7 , n( es used as currency, did so with a small
0
credit of fhP r , h^ ween 12 and 13 Per cent to maintain the
ciedit of the Bradbury notes; but neither the Bradbury notes
in V.rnf F,,aiw i° f *Jngland notes are subject to actual redemption
„
of gold’ UUd therefore they are at a discount measured in terms
asoonnonnooT w a y . the Freneh franc under an issue of
38,000,000,000 francs, issued by the Bank of France (a private
coiporatfon but under Government control), has been diluted
to a point where the Bank of France dared not redeem it in
gold, and therefore the French franc has undergone a deprecia
tion of 60 per cent. It is still worse with the Italian lira
83330— 22109
>
V
*
i m
and in the case of the German mark the mark went down to.
about 2 per cent of its original value.
How can manufacturers contract goods for future delivery in
terms of marks when the mark at the time of future payment
threatens a very high percentage of loss? How can merchants
buy and sell with safety in terms of marks when the mark
stretches from one value to another without notice?
In spite of this handicap the German people under the stimu
lation of their Government are nevertheless busily engaged in
manufacturing, but under this very great disadvantage.
The one gigantic outstanding fact which retards rapid restora
tion of European industry and commerce is the lack of a stable
gold-secured currency measurable in terms of gold. Even gold
fluctuates in value, but at last it lias been found by the nations
o f the world to be the most stable and acceptable measure o f
value ever established for monetary purposes.
The United States is able to provide a means for furnishing
currency secured by gold and redeemable in gold and secured at
the same time by staple merchantable commodities and under
written by sound bankers’ credits. I have submitted this
bill which contains these fundamental principles, and which,
if adopted, would establish a Federal reserve foreign bank
owned by the Federal reserve banks of America, to function as
their servant. Such a bank, with a primary capital of five hundred
millions of gold taken from the Federal reserve banks, would
not weaken the banking system of the United States for the
reason that we have far in excess of the amount of gold re
quired to keep our Federal reserve notes at par.
We have set apart 35 per cent of the reserve deposits in gold
and legal tender. That 35 per cent is idle gold, unproductive
and of no practical value, for the reason that the deposits are
not capable of being withdrawn under the law. During the last
12 months, in spite of a withdrawal of deposits from national
banks of over $2,000,000,000 and from State banks of over
$1,000,000,000 the deposits in reserve banks have increased
$13,000,000. Thirty-five per cent of $1,784,000,000, the present
deposits in reserve banks, would make nearly $600,000,000 of
idle gold and legal tender, and 25 per cent (the amount to
which reserve against deposits is diminished) would make
$446,000,000.
One billion seven hundred and eighty-four million dollars is
the present deposit of reserves in the reserve banks. Thirty-five
per cent of that is nearly $600,000,000 of gold and legal tender
that is lying there, serving no useful purpose. That gold can
be employed, though still owned by the reserve banks, through
the Federal reserve foreign bank, and used as-a basis of 20
per cent reserve would provide reserve notes amounting to
$2,500,000,000, or five times the amount of such reserve gold.
Under the bill I propose there would be 100 per cent of com
modities behind each reserve bank note and 100 per cent of
short-time bankers’ bills. If the emission of these notes should
go up to $2,500,000,000, there would be behind the bank notes
100 per cent of bankers’ credits ($2,500,000,000), 100 per cent
of commodity credits ($2,500,000,000), and 20 per cent of gold
($500,000,000), and we would in that way manufacture, if I
may use such a term, a sound gold and commodity secured cur
rency abundant to restore the European countries to a sound
currency foundation.
83330— 22109
mmmm
At present they do not know what the value is of a mark lir e
kroner, lei, or a ruble. The mark has fluctuated 33 per cent in
the hist 30 days. It went down to one-tliird of a cent and back
to nair a cent.
Mr. SMOOT. Mr. President-----The PRESIDING OFFICER (Mr. R o b i n s o n in the chair)
Utah?the Senat01’ fl'0m 0klahoma y*eld to the Senator from*
Mr. OWEN. Certainly.
Mr. SMOOT. Does the Senator expect in his statement to
show how it is possible to make the German mark worth 24
cents?
v 01 th 24 cents.
Mr SMOOT.
standing.
1 am.no.t concerned in making the German mark
It is impossible to make it worth 24 cents
There are over 100,000,000,000 marks now out
• Ml\ ?,WEN’ Y es; there are 103,000,000,000 marks outstand
ing at this time.
Mr. SMOOT. And more are ' eing issued every day.
Mr. OWEN Yes; they are pouring them out at the rate of a
billion a week. So it is impossible for the German people to
know how to make their contracts in terms of marks
Mr. SMOOT. The reason why I interrupted the Senator was
hat I am compelled at this time to go to an important com
mittee meeting. I wish I did not have to leave the Chamber
because I am anxious to hear what the Senator has to say
I
desired to ask the question whether he had worked out^inv
plan or whether there had been evolved in his mind a plan to
set aside the present German paper mark and begin anew upon
a gold basis. I thank the Senator.
*
Mr OWEN. I am not concerned with that. It is impossible
for the American Government or the American people to interere with the fiscal or currency affairs of the European counOies. I hey have their own difficulties. It is not a question
even for them of putting the German mark back to pa? It?s
a far more important question. If they do put the German
murk back to par, they must pay bonds in gold par at 23.8 cents
that have been issued against the mark worth a half cent
apiece, and then paying the bondholder, who bought those
bonds measured in marks worth half a cent apiece, in marks
worth 24 cents apiece; in other words, the bondholder receiving
forty-eight times wliat lie loaned to the Government of Germany
It is a very perplexing problem, and one that may take some
years to work out, and will result eventually in a necessary
compromise between the debtor and creditor classes affecting
sums.
So I am not concerned with that difficult problem. What T
am concerned with is that there shall be furnished to Europe a
currency measured in grains of gold, a currency sufficient in
volume to meet their industrial requirements. Under mv plan
the bank would earn 35 per cent on the $500,000,000 investedassuming that $2,500,000,000 of notes would be loaned, it would
bring a net income of approximately 3 per cent. It would earn
about $<o,000,000 a year, and setting apart 5 per cent on the
capital for the benefit of the reserve banks they would t a k e
from that $75,000,000 the $25,000,000 of earnings per annum
where they now get nothing at all. They complain that tliev
83330— 22109
y
1Y
V*v
put their deposits in the reserve banks and get no interest on
the deposits, but under my proposal they would get $25,000,000
o f earnings out of the idle gold which is tied up as a useless
reserve behind the deposits.
But there is a far greater and more important reason for
furnishing Europe with this gold-secured currency, and that is
that Europe owes us $15,000,000,000 and she has neither gold
nor commodities with which to pay us. However, she has the
man power, she has the natural resources, she has the in
genuity and the brain and the brawn, and we are in a position,
and we are the only nation in the world in a position, to fur
nish Europe with a gold-secured currency that will be adequate
for them to base their contracts on and give stability to credits
in their industrial and commercial life.
I am presenting this matter to the majority party and to the
country. I do not expect to press the bill, because it is impos
sible for a minority Member successfully to press a bill of this
magnitude and character. I know that. I concede that to start
with. I offer this bill to the majority party because our com
mon country could be served magnificently by this plan.
In connection with that we must also, I think, take into ac
count the conditions in Europe with regard to the payment of
principal interest on the sum they owe us and our nationals.
I do not at all approve of the proposal made by various of our
good citizens that we should remit this debt to Europe. It is
not true that Europe is bankrupt. Europe is no more bankrupt
than the United States is.bankrupt. It has got the same fertile
fields, the same vineyards, the same orchards; it has the same
productive power; it has a greater productive power in ma
chinery and in invention than it had before the war. It is
true that the foreign indebtedness of Europe has grown to a
gigantic sum, as in Germany, for instance; but it is also true
that those Government liabilities are individual, personal assets
of their own nationals who own the bonds, and they are neither
better nor worse off as a people than they were before they
issued those obligations.
Mr. HITCHCOCK. Mr. President-----The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Nebraska?
Mr. OWEN. I yield.
Mr. HITCHCOCK. I am very sympathetically interested in
what the Senator is saying, because, as he knows, I have intro
duced a bill which is along lines in some respects similar to
those of his bill and has similar purposes. I do not fully under
stand, however, the details of the Senator’s proposal. As I
caught it, it is that the Federal reserve banks of the United
States shall establish another bank?
Mr. OWEN. That they shall own the stock of a Federal
reserve foreign bank.
Mr. HITCHCOCK. And that the stock issue should amount
to $500,000,000?
Mr. OWEN. Yes; payable in gold.
Mr. HITCHCOCK. Payable in gold, and that that bank
should issue its currency against a gold reserve?
Mr. OWEN. That it should issue its bank notes as currency
against bankers’ bills, with short-time maturities, not exceeding
90 days, and against commodities that are staple, merchantable,
insured, and covered by documents.
833S0— 22109
7
Mr. HITCHCOCK. Not against a gold reserve?
Mr. OWEN. The 20 per cent gold reserve would be included.
Mr. HITCHCOCK. Does the Senator propose to limit the
issue of currency to a percentage of the gold reserve?
Mr. OWEN. To 20 per cent.
Mr. HITCHCOCK. What amount of currency does the Sen
ator figure that would enable the bank to issue?
Mr. OWEN. It would enable the bank to issue twenty-five
hundred million dollars.
Mr. HITCHCOCK. That would require, then, a gold reserve
of $500,000,000 on a 20 per cent basis?
Mr. OWEN. Yes.
Mr. HITCHCOCK. The Senator, in that respect, is making
the gold reserve very much less than the gold reserve required
of the Federal reserve banks against the issue of currency?
Mr. OWEN. For the reason that when we deal with com
modities that are worth the gold value of the notes and we
have, in addition to that, 100 per cent of bankers’ bills behind
the notes, we need not fear about a 20 per cent reserve or
getting the gold for redemption, because the commodities them
selves are worth the gold, and in addition we have the bankers’
short-time promise to pay.
Mr. HITCHCOCK. Of course, that is also true in the case
of the Federal reserve banks.
Mr. OWEN. I am only justifying this proposal n ow ; I am
not criticizing the Federal reserve banks, although in their
case I think we made the ratio of reserve much higher than
was or is necessary.
Mr. HITCHCOCK. I agree with the Senator in that respect.
Mr. OWEN. The Bank of England, I will say to the Senator,
had a reserve as low as S per cent, without disturbing public
opinion in England.
Mr. HITCHCOCK. Now, will the Senator trace briefly the
methods by which this gold and commodity-secured currency
issued by the proposed bank would get into the financial chan
nels of Europe?
Mr. OWEN. Yes. Here is a German potash manufacturer
who wants to send $100,000 worth of potash to the United
States for sale; he has a market for it, but he needs the ac
commodation of immediate credit when he handles the matter.
He takes his potash and draws against it a bill which is in
dorsed by some member bank, we will say, the Iteiclisbank.
It is a short-time obligation; he draws it payable in 60 days or
90 days. Then he gets $100,000 worth of Federal reserve for
eign bank notes against that shipment of potash. The title to
the potash passes into the hands of the Federal reserve bank
or its agents.
If the obligation is not paid when it is due to be paid, first,
the potash would pay for it, if sold by the agents of the bank;
if it did not produce enough, then the banker who indorsed the
bills would meet the difference; and if that did not meet it,
still there would be the credit of the potash manufacturer and
the shipper behind it. Those bank notes then would pass from
hand to hand among the people and the banks. They would
afford a form of currency that would enable people to deal with
each other through this currency as a medium of exchange.
They would not then have to exchange a bushel of potatoes for
83330— 22109
a busliel of corn or a bushel of coal nor deal in fluctuating
marks or rubles. In eastern Europe the people are now using
the principle of barter. What I am proposing is that we shall
furnish them with bank notes that are the equivalent of gold,
so many grains fine.
Mr. HITCHCOCK. Now, let me ask the Senator another
question. In that process, the potash producer in Germany
has to get possession of $100,000 worth of the notes of the pro
posed bank?
Mr. OWEN. Yes.
Mr. HITCHCOCK. The potash comes to the United States,
and with it a draft for payment within 60 days.
Mr. OWEN. Yes.
Mr. HITCHCOCK. The potash importer in the United States,
at the end of 60 days, pays that draft?
Mr. OWEN. Yes.
Mr. HITCHCOCK. What becomes of the $100,000 of cur
rency which has been advanced to the German shipper?
Mr. OWEN. It circulates in Berlin.
Mr. HITCHCOCK. And the bank in this country has re
ceived $100,000 in payment for the potash?
Mr. OWEN. Yes.
Mr. HITCHCOCK. Has the Senator considered the fact that
the United States exports annually approximately $3,000,000,000
worth of products more than it imports?
Mr. OWEN. Yes.
Mr. HITCHCOCK. How is it going to continue paying cur
rency to Europe under those circumstances when upwards of
$3,000,000,000 must be paid here in order to make up the ex
cess of exports over imports?
Mr. OWEN. The Senator will agree with me that as a
mathematical principle the whole true balance of trade is equal
to the sum of its several parts; and we may deal, therefore,
with one transaction and inferentially determine what will be
the result of a number of such transactions. Every single
shipment, whatever it is, is balanced at the time it is made.
There are certain invisible factors that enter into what we call
the “ balance of exchange.” The “ balance of exchange ” really
is a term which is often misleading, because the balance o f
exchange means a balance produced by adding up the figures
o f the imports and exports on the manifests of vessels arriving
at and departing from the ports of a given country. We add
those figures up, but we do not take into account the shipment
o f currency, the shipment of bonds, the shipment of stocks, the
rendering of services through marine insurance, the rendering
of services through trade on the ocean, the rendering of services
by foreign countries to Americans who go into foreign countries
and live there at the hotels and carry with them letters of
credit, thus transmitting from this country abroad various
credits.
Mr. HITCHCOCK. I appreciate what the Senator says, but
I think the present experience is that we are not only buying
much less of Europe than we are selling to Europe, but the tide
o f investment is from this country into Europe at the present
time rather than into the United States.
Mr. OWEN. I think that is true, and ought to be so to correct
the differences in commodity exports.
83330— 22109
Mr. HITCHCOCK. So that the factors of which the Senator
speaks are comparatively negligible. The fact is, after we have
summed the whole thing up we find that Europe must pay us
about $3,000,000,000 every year more than we pay Europe for
what is bought.
Mr. OWEN. I will say to the Senator again that that is a
fiction; it is not really true, and the reason it is not true is
found in the factors entering the so-called “ balance of trade,”
which are invisible and do not appear on the face of the record.
When Europe buys $3,000,000,000 in excess of our commodities
they pay in stocks, bonds, services, real estate, hotel bills, and
so forth.
Mr. HITCHCOCK. My judgment is that those factors are
more greatly in favor of the United States than against the
United States. Our bankers are lending great sums of money
practically to all foreign countries—to Brazil, to France, to
Great Britain, to Norway, and to Sweden; to the cities and
towns—and foreign nations are not lending anything over here
at all.
Mr. OWEN. That temporarily offsets the “ balance of trade ”
in our favor.
Mr. HITCHCOCK. The tide has now reversed, and we are
actually lending a great deal more money to the remainder of
the world than we are borrowing from other countries of the
world. Therefore, the factors the Senator speaks of do not
exist. The ultimate result is that there is a balance of
$3,000,000,000 a year that we should receive from Europe above
what we are paying to Europe. How can the Senator make
that up? That is a difficulty that I have encountered in con
nection with my bill providing for a bank of nations. How
can that great balance be overcome?
Mr. OWEN. I do not think the Senator followed clearly
the observations made by me in regard to the balance of trade.
The “ balance of trade ” relates to certain commodities only on
the manifests of ships and is not a true balance of the financial
and commercial exchanges; it never was and never will be at
any time to come, for the reason that the balance of trade
merely registers certain commodities on the ships’ manifest
and nothing more. It is only a commodity balance and nothing
more.
Mr. HITCHCOCK. I agree with the Senator that formerly
it was not a true register—that is to say, that we were buying
in Europe two or three thousand million dollars a year less
than we were selling in Europe, and yet we were also paying
to Europe great sums of interest—but we are not paying such
interest now ; that tide has been reversed; so that the conclu
sion the Senator reaches, while it would have been accurate
before the war, it seems to me, does not apply now. Those
factors of which he speaks have changed their course.
Mr. OWEN. Mr. President, the “ balance of trade,” accord
ing to the figures of our statisticians, always has been and
always will be the balance as shown on the ship manifests.
It does not take into account the $10,000,000,000 that we loaned
to Europe during the World War. Since the war we have
loaned them $5,000,000,000 more, and that $5,000,000,000 is
partly an offset to the so-called balance of trade.
Mr. HITCHCOCK. N o; I think the Senator is in error there;
it makes the matter worse. Not only are we selling to Europe
83330— 22109------ 2
wrf-\
10
a great deal more than we buy from Europe, but we are lending
to Europe, on top of that, a great amount of money, and they
are not only obliged to pay us three thousand million dollars a
year as the balance of trade, but they have got to pay us a
thousand million dollars a year in interest.
Mr. OWEN. The amount that we lend to Europe does not
appear in the “ balance of trade,” and we lend them part of the
money required to balance the commodity “ balance of trade ” •
that is a complete answer to the Senator. Every transaction
balances itself at the time it is made. Of course, if I send
100 bales of cotton to Europe I get its equivalent in some form ;
1 get it either in cash or in credit or in property on the other
side of the water, but each transaction balances itself a of the
day when made, and a million such transactions balance them
selves.
The so-called “ balance of trade” is never a balance but in
dicates the lack of balance of imports and exports and always
represents an excess of exports or imports of goods.
Mr. NORRIS. Mr. President, may I interrupt the Senator
there ?
The PRESIDING OFFICER. Does the Senator from Okla
homa yield to the Senator from Nebraska?
Mr. OWEN. I yield.
Mr. NORRIS. Every transaction must balance itself or
eventually difficulty would ensue, of course; but I want to ask
the Senator now whether he proposes in his bill to redeem the
notes that are to be issued by the proposed bank?
Mr. OWEN. Those notes will be taken up when the obliga
tion is liquidated.
Mr. NORRIS. In the transaction to which the Senator re
ferred in connection with potash-----Mr. OWEN. When the loan is paid back to the bank, the
bank would get its notes or the equivalent in gold.
Mr. NORRIS. When the potash is sold here the bank, of
course, gets the money in this country for it; but what process
is gone through in order to redeem the notes that were orig
inally issued in Europe for the potash?
Mr. OWEN. It would probably result in a credit where the
transaction resulted in shipping over; but when you reverse
that and an American ships into Berlin cotton of an equivalent
amount, the cotton has to be paid for with these very notes,
and the notes will come in to pay the bank the amount due to
the bank for a New York credit extended the cotton shipper.
Mr. NORRIS. The foreign reserve bank, when it got the
money for the potash on this side of the water, would not dare
pay out that money. It would have to retain that money until
it got possession of the original issue, and retired that; other
wise there would be inflation.
Mr. OWEN. That would be a credit in New York, and that
credit would be used as a means of financing cotton shipped
back to Germany. In other words, one hand would wash the
other, and we would be furnishing a medium by which these
transactions could be cleared; and that is the very purpose of
this proposal. It is to furnish a convenient means of giving astable medium of exchange to the European manufacturer and
merchant, in order that they may create the commodities with
which to pay America the amount that is due to America They
*-
83330— 22109
*
'm
.
11
can not otherwise rapidly discharge their obligations; and I
think in no event can we expect an immediate payment of the
principal and interest of those amounts due to our Government,
because of the demoralized condition of European industries.
I do not at all approve the idea of remitting to these European
Governments their indebtedness to this country. It is not neces
sary to do it. They are not bankrupt. They are just as well
abl to pay their debts as we are able to pay our debts; and if we
remit the indebtedness it would be exactly the same thing as
taxing the wealth of America and presenting it as a gift to the
wealth of Europe.
In order to adjust ourselves to the conditions in Europe, I
think we ought to agree that the interest charges on the ten
billions due to this Government should be postponed and merged
into the principal for a period of time, say, 5 or 10 years. I
think, moreover, that instead of charging Europe a very high
rate of interest, we ought to agree that the rate of interest
shall be what it was before the great World War—that is, 3
per cent. I say “ 3 per cent ” because 3 per cent was the normal
rate of interest in France and throughout western Europe before
the war. The Bank of Netherlands, for instance, which is a
great State bank, had a 3 per cent rate on loans for 50 years
without a single break in that rate. The Bank of France would
lend as small a sum as 5 francs for one year at a 3 per cent
rate, and the rate of interest in the United States on a wellsecured loan, such as a Government bond, was 3 per cent. Our
3 per cent bonds were at a premium before the war. The
bankers do not average a rate of interest to their depositors
exceeding 3 per cent. They have some running at 2 per cent
and some at 4 per cent, but they do not average as high as 3 per
cent interest on the deposits made with them; and, on the other
hand, when a bank lends out its deposits it is content with less
than 3 per cent as a margin of profit on its loans.
Mr. EDGE. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. EDGE. Unfortunately, I did not hear the early part of
the Senator’s explanation of his bill. When we realize and
appreciate, as the Senator has stated, that the balance of trade,
because of the $10,000,000,000 of loans and the $5,000,000,000
represented mainly by export commodities, operates to bring
about a most unfavorable exchange condition so far as it relates
to purchases from America, which condition we well understand
to-day is interfering tremendously with our export business, I
am interested to know, if the Senator can state briefly, how the
opei’ation of such a bank would to any considerable extent af
fect what I think is fundamental and what must be corrected
before we can greatly increase our exports, namely, the condi
tion of exchange to-day as it relates to purchases from America.
Mr. OWEN. I will say to the Senator that what we now speak
of as the rate of exchange really measures the selling price of a
mark, franc, lira, kroner, or ruble in terms of gold. It all comes
down at last to the gold value of those currencies. When you
talk about exchange, commodity balances have ceased to cut
any important figure in it, for the reason that if they could
command gold and ship gold the rate of exchange would bal
ance itself within two or three points, or what is called in
normal times “ the gold shipping point ” ; but they can not get
83330— 22109
gold with this depreciated currency, and they have not the
commodities now to take the place of gold or to command gold.
Mr. EDGE. Mr. President-----Mr. OWEN. I yield to the Senator.
Mr. EDGE. Is it not a matter of ordinary business realiza
tion that when you bid for anything— in other words, when
there is a scarcity of any commodity or of money—the price
is naturally higher? The existing condition of the balance of
trade makes it necessary for the Frenchman or the Englishman
or the representative of any other country, when he is com
pelled to pay for a hill of goods exported from this side, to bid
all the higher simply because of that condition. It seems to
me that that has its effect on exchange as much as any other
possible thing.
Mr. OWEN. If you will take the present exchange rate of
$4.20 on the pound sterling, which normally is $4.86, and take
the present market value of gold in London, you will find that
the exchange is fixed precisely by the purchasing power of gold
by the paper money of England— the Bradbury notes. Gold is
at a premium in London, and that premium measures the dif
ference in the cost of the pound sterling.
Mr. EDGE. How does the Senator account for the very sud
den fluctuations in British exchange and, in fact, in all other
currency, ranging in the last six weeks from in the neighbor
hood of $3.75 or $3.80, as I recollect now, to $4.20, as the Sen
ator states, on the pound sterling? I do not think there is any
business condition to warrant it. I am wondering myself if
the Senator has any answer beyond that of speculation.
Mr. OWEN. I think speculation does cut quite an important
figure in i t ; and I think one of the important reasons for the
passage of the bill I have introduced here is that by having a
Federal reserve foreign bank you would have a natural stabil
ization of exchange on the basis of a reasonable commission
and percentage for the services rendered; and in that way you
would have a greater stability of exchange than if you had
men who were buying and selling the pound sterling for profit.
Mr. EDGE. I am inclined to agree with the Senator that
some type of an international bank—perhaps a combination of
his ideas and the ideas expressed by the Senator from Ne
braska— is absolutely essential and necessary to-day to have its
influence on foreign trade and currency and exchange. I am
free to admit, however, that I have not yet, as far as my little
study of the situation permitted, found a way that. I thought
would greatly influence it. I think it will help, but not as
much as an effort on the part of importers and exporters to
equalize the balance o f trade in a natural manner.
I agree that I do not like the idea of wiping out the
$15,000,000,000 indebtedness. I never have. I hope it will not
be necessary to bring about that condition. I do not believe it
will be.
Mr. OWEN. The Senator may rest assured that five billions
of it, at least, held by our private citizens will never be wiped
out. and the statesman insane enough to try to tax America
ten billions as a gift to the wealth of Europe will himself be
wiped out.
Mr. EDGE. I have not a moment’s hesitation in saying, how
ever, that I believe that if the $15,000,000,000 of indebtedness
83330— 22109
13
were wiped out to-day there would be practically no difference
in the rate of exchange between the countries.
Mr. OWEN. It would make no difference whatever at this
time. It is the depreciated mark that measures the balance
of exchange in Germany, the depreciated lira in Italy, and so
forth.
Mr. EDGE. I am not prepared, however, to indorse that
plan for one moment.
Mr. OWEN. It would not greatly serve the exchange at this
time-----Mr. EDGE. I am not so sure of that.
Mr. OWEN. Because in reality, when you take the German
mark, which before the war had an issue of two billions and now
has an issue of one hundred and three billions, it is a question
of the quantity of those marks, the facility of getting them, the
fact that it is known now that they can not be redeemed in gold.
It is just the quantitative theory over again. They have gone
down from par to 2 per cent because the output has been multi
plied fifty times.
Mr. EDGE. There is the answer, or one of the answers. If
the Senator can evolve a plan, in connection with the organiza
tion of an international bank, whereby the directors of that
bank will have a certain influence or control of the spread of
currency, you might say, the issues of various countries that
are to-day practically bankrupt, then I can see how such a
bank would very rapidly and permanently rectify present con
ditions ; but I am afraid that is almost impossible. That is prac
tically the Ter Meulen plan, which we hear something about,
and which has merit in it.
Mr. OWEN. The Ter Meulen plan is a different thing. It is
a means by which to put a fixed income of a State expressed
in bonds behind certain particular credits for the nationals of
any particular country. It has its merits and the Ter Meulen
bonds could be used as a basis of credit in any banks anywhere
engaged in international banking.
Mr. EDGE. Such a bank, in my judgment, must have some
control of the budgets of nations in order that their income and
their outgo shall balance. It is necessary to balance the budget,
as the term is usually used, and such a bank must also be able
to control the printing press in the issue of currency, or no in
ternational bank, in my judgment, can ever have a great in
fluence on exchange conditions, which in themselves influence
trade.
Mr. OWEN. Of course the European Governments will have
to balance their budgets. They will have also to quit using
the printing press for the purpose of manufacturing unlimited
paper currency. If they do not, their currency will become
more and more depreciated, until it will not be worth more than
the paper upon which it is printed. That, of course, is true;
biit in order to strengthen the revenues of the European coun
tries it is of supreme importance that the people of those coun
tries shall be employed in profitable industry. I am proposing
a plan that will enable them to make contracts that have a
stable value under them. At present they have a fluctuating
currency. I am proposing a currency which will not fluctuate
more than the value of gold fluctuates, and therefore if my plan
Is adopted these European countries will be in a position to in-
83330— 22109
I
crease their revenues and to balance their budgets. They will
be in a position to employ their people profitably in peaceful
industry. That is the very purpose of the proposal that I am
making. It will help them to balance their budgets. It will
teach them the folly of using the printing press to turn out
paper money, because t\jis currency I propose will be sufficient
for the people. It will be sound and clean and based on gold
and commodities worth gold. Therefore it will give them a
sound currency. If I may say so, the currency blood of their
commerce will be clean, will be worth gold ; and America is the
only country in the world that can furnish it.
I think we ought to fix a 3 per cent rate on these European
loans. I think we ought to allow the interest to merge into the
principal for 5 or 10 years; and I think at the same time in the
United States we ought to determine upon the policy of post
poning the payment of our own war debt for a longer period of
time. That at the same time we are relieving Europe of pay
ing the present interest on these debts we ought to relieve the
American people of the sinking fund against the war debt for
a like period, because it can all be made up when Europe is back
again on its feet and in a productive position.
As I said in the beginning, I am presenting this plan for the
consideration of Senators, especially of the majority party. It
is a very important suggestion. It is based on the principles
of the Federal reserve act. The principles are absolutely
sound; they have been demonstrated to be sound.
Senators, you have it in your power to adopt a plan that will
restore the industrial life of the world, and I am presenting it,
with such earnestness as I may, in the hope that patriotism
and public spirit will induce Senators to study this proposal I
have made, and I trust you will take so much of merit as you
may find in it and make it available for the service of mankind.
Mr. FLETCHER. Mr. President, as I understood, the limit
of the issuance of circulating notes under that system would be
about two billion five hundred million?
Mr. OWEN. It would.
Mr. FLETCHER. Does the Senator think that would be suf
ficient to accomplish what he aims at?
Mr. OWEN. It is abundant. The total issue of currency
now in Germany, with 80,000,000 people, is only wouth $500,000,000
gold, and that is an amount five times as great.
Mr. KING. A hundred billion marks then would be worth
only about $500,000,000 in gold?
Mr. OWEN. That is true at half cent a mark.
Mr. FLETCHER. What the Senator suggests might do for
Germany, but how about the whole of Europe?
Mr. OWEN. Germany has 80,000,000 people, in yound num
bers, and five times 80,000,000 is 400.000,000, and there are only
300,000,000 in Europe. If $500,000,000 is enough for the Ger
man people, $2,500,000,000 is enough for Europe. I have cov
ered that sufficiently. It will furnish an abundance. I think
there ought to be authority for the European nations to take
over this bank or its branches at the proper time, when they
are in position to do it. The United States reserve banks need
not want to carry on these banks if the other countries will take
them over.
Mr. FLETCHER. I was wondering also what had been
accomplished under what is known as the Edge Act, which au83330— 22109
jrtr
15
thorized national banks to get together and establish banks in
foreign countries.
Mr. OWEN. The trouble is that commerce is languishing.
Commodities are not being manufactured in sufficient quantity.
Commerce is impaired by the demoralization caused by the
World War, and I am proposing a plan now by which to restore the industrial activity of Europe.
Mr. POMERENE. Mr. President-----The PRESIDING OFFICER. Does the Senator yield to the
Senator from Ohio?
Mr. OWEN. I yield.
Mr. POMERENE. I was called from the Chamber, and pos
sibly the question I have in mind has been explained; but if so,
I did not hear what the Senator said about it. Does the
Senator’s plan contemplate some action by the several European
Governments whereby they would aid in availing themselves of
this system?
Mr. OWEN. It contemplates no action on the part of any
European Government at all.
Mr. POMERENE. I believe that under what is known as
the Gresham law .cheaper money always drives dearer money
out of circulation.
Mr. OWEN. I thank the Senator for making that suggestion,
because it is in point. That would be true if you had gold cir
culating side by side with paper money, where the people might
pay their debts in either one or the other. They would pay
their debts in the cheaper money, and the gold would go into
hiding; but in this case there would be no competition between
the Federal reserve foreign bank notes and the mark, for in
stance, for the reason that these bank notes would be the
equivalent of gold, and they could not go into hiding for the
reason that behind every note is a hundred per cent of com
modities worth the gold face value of the notes, and bankers’
credits of 100 per cent more behind these notes worth the face
value of the notes. Therefore they could not go into hoarding.
Mr. POMERENE. I am not questioning the security of the
bank planned.
Mr. OWEN. That would be the point of the suggestion of the
Gresham law.
Mr. POMERENE. My thought was that perhaps the prin
ciple of the Gresham law might apply, and if so, there would
be a temptation to hoard the Federal reserve bank notes, and
if that were done, then a given amount of bank notes would
not give the same assistance to the commerce of these foreign
-countries. That was the thought I had in mind. In other
words, if they should be retired, you could not get the same
service from that kind of a circulation that you would get if
they were kept in circulation.
Mr. OWEN. That is true, and if the Gresham law did
apply, what the Senator says is absolutely true, that it would
render nugatory the service proposed to be rendered by these
notes; it would nullify the proposal; but they can not be with
drawn, because they are actually covered by 100 per cent of com
modities, and they are covered by 100 per cent of bankers’
credits besides, and it is a short-time note that is behind these
reserve bank notes.
88330— 22109
'•
(jj
I
j
Mr. POMERBNE. It may be true that it is a short-time
note that is back of the reserve notes, but I am trying to trace
these reserve notes themselves to see what is going to happen to
them.
Mr. OWEN. The reserve notes would be called for to liqui
date the indebtedness incurred.
Mr. POMERENE. These reserve notes might not be in the
hands of the debtor.
Mr. OWEN. The banker gets these reserve bank notes. He
owes the exact amount of the reserve bank notes. He has to
pay it in 60 days, we will say.
Mr. POMERENE. Y es; but if a manufacturer over there gets
his reserve notes, and in the conduct of his'commercial affairs
turns part of them over to me and part to some one else, it being
a better class of currency, I might be disposed to hoard them.
Mr. OWEN. The bank would have to pay them in gold if they
should be hoarded.
Mr. HITCHCOCK. I rather agree with what the Senator
from Ohio has said, and I want to call the attention of the Sen
ator from Oklahoma to an answer which he made to me. He
instanced a case in which a potash producer in Germany re
ceived for his shipment of potash $100,000 in the notes of this
bank, and he said that when the potash was shipped to this
country the potash user in this country would, after 60 days,
say, pay in American money for the potash which he purchased.
Mr. OWEN. You may say gold.
Mr. HITCHCOCK. Whatever you please. Meanwhile the
$100,000 of the notes of the bank are in Germany; they are cur
rency.
Mr. OWEN. Yes ; the corresponding gold would be in New York.
Mr. HITCHCOCK. It seems to me there would be some like
lihood, as the Senator from Ohio has suggested, that one of the
difficulties of the situation would be that the holders of those
notes would be apt to hang on to them and hoard them, just as
at the present time they are hoarding American money. It is
notorious, as has been said by German writers, that while cer
tain people in the United States have been buying German cur
rency and German credits with the idea that they will advance,
many Germans have been buying American currency in order to
make themselves secure, and it seems to me that there would be a
likelihood of a good deal of that currency going out of circulation.
Mr. OWEN. It would go into circulation. It would be in the
pockets of people and passing around for their common use.
Take the potash example, for instance. One hundred thousand
dollars of those notes would go right into the hands of the
people.
Mr. HITCHCOCK. Let us assume that the potash manu
facturer in Germany has deposited his full $100,000 of currency
of this bank in his own bank in Germany. In his own domestic
transactions he can use the German money just as well as he
can use that money, and there is no reason why that German
bank, if it wants to keep a reserve, should send it over here for
redemption. It can keep the notes there just as well. It is
just as much of a reserve for that bank to keep. It seems to me
it would be the tendency of that superior class of currency to go
into hiding.
Mr. OWEN. It would not be in hiding; it would be in actual
use, and that is exactly what I wanted to say, because under
83330— 22109
IT
those circumstances the banker or the potash manufacturer
could say, “ I want to make a contract with you to buy $100,000
worth of additional potash, and I have the gold or its equiva
lent available in my bank. I have it here ready to use now. I
have shipped $100,000 worth of potash, and 1 have $100,000 of
gold or the equivalent of gold, and I want to use that to buy
some more potash, or buy some more labor, or whatever goes
into the production of .it.”
Mr. HITCHCOCK. He would naturally use German money.
Mr. OWEN. He might use some of these notes to buy Ger
man money if he wanted to.
Mr. HITCHCOCK. If he did, the people who received those
would naturally save them, because they would know they
would be as good as gold, and they would float the German
marks in tlieir place. I believe that is a possibility.
Mr. OWEN. At the last, the banker who got the accommodation
owes this money, and he has to pay it in gold or in the equiva
lent of gold, and these notes are the equivalent of gold, and
it would make certain a demand on his part to get the gold.
But, of course, I am assuming that this bank would expand
and that there would be twenty-five hundred million of these dol
lars in circulation in a great variety of ways, infinitely various,
so that no human mind can trace them, but that at last this
bank always has the bank credits of 100 per cent behind these
notes, and it always has commodities of gold value to the extent
of 100 per cent, and it has always 20 per cent in actual gold
in its own vaults. That security is enough. It is 220 per cent
against every note at the bank, and it would be only a bank
note at last.
Mr. HITCHCOCK. I am not disposed to dispute the Sena
tor’s statement that the security is ample. I want to call his
attention to another matter. He has instanced the case of a
European exporter being paid through this bank for the prod
ucts which he exports to the United States. There is no dif
ficulty about that at the present time. The man in Germany
has no difficulty in getting credit for what he exports to the
United States; there is no difficulty about that at the present
time. The man in Germany has no difficulty in getting paid for
what he exports to the United States, the man in France lias
no difficulty, and the man in Great Britain has no difficulty.
The real difficulty is when the American undertakes to export
to Europe; then there is a difliculty in getting payment. Will
the Senator reverse his process and illustrate how the bank
which he proposes would pay the American for the shipments
which he makes to Europe when the European is in no position
to make payments?
Mr. OWEN. Yes; take this hundred thousand dollars which
the Federal reserve foreign bank has in New York against the
shipment of a hundred thousand dollars’ worth of potash. A
man comes up and says, “ I want to ship a hundred thousand
dollars’ worth of cotton to Berlin.” The banker or the Federal
reserve foreign bank says: “ All right; put your cotton on
board. Draw your bill against Berlin. Have it underwritten
by the Equitable Trust Co. of New York, and I have a hundred
thousand dollars against the shipment of this potash which I
will turn over to you.” In due course of time it will come over
to Berlin and he paid by the German people, and the German
83330— 22109
people will then have this hundred thousand dollars of currency
now available to pay it with.
Mr. HITCHCOCK. Let me stop the Senator right there.
How are the banks in Germany to make the payment for this
shipment?
Mr. OWEN. By using these very bank notes.
Mr. HITCHCOCK. They have gone into circulation ; you do
not know that the banks have them. They may be hoarded.
Mr. OWEN. I never heard of anything in the shape of
money in circulation the banks did not get their hands on
eventually.
Mr. HITCHCOCK. Assuming that the theory is correct that
the identical hundred thousand dollars in notes which have
been sent to Germany will pay for this shipment of cotton,
that will be all right, providing our shipments to Germany are
no greater than Germany’s shipments to the United States.
But assume the case where shipments from Germany to the
United States are much less than the shipments from the
United States to Germany. Then what would be done?
Mr. OWEN. The Senator is asking me to finance an im
possible case. If the German people can not ship enough com
modities to the United States to pay for the commodities
shipped from the United States to Germany and have no other
means of paying, they must stop shipping from the United
States, and that is precisely what has happened, to our foreign
commerce. They have quit buying in such quantities.
But, as I said to the Senator before, each individual case will
adjust itself. When I ship to Germany I say to them that they
are going to be paid, and I have good security. When a German
ships to the United States he does the same thing, and these
balances of trade you speak of need not worry us, because each
transaction will tak*e care of itself; but it is true at last that
you will have trade languish unless the people of one country
are able to manufacture and export commodities of equal
value to their imports. They must have their exports and their
imports at last practically balance. I think that is undoubtedly
true, and I think that is the idea the Senator is desiring to
impress. I do not think there is any question about that.
Mr. HITCHCOCK. I agree with the Senator. I have run up
against exactly the same difficulty with my bill that I think he
encounters with his bill, the difficulty of making payment where
the country which makes the payment has not been able and is
not able to export sufficient manufactured goods or products of
one sort or another for that purpose.
Mr. OWEN. I am proposing to extend them a financial ac
commodation in a gold-secured currency to the extent that they
require in order to enable them to restore their industries and
manufactories and increase their commodities for export.
They can only pay their debts in the products of their labor,
in commodities. I am proposing to help them pay their debts
to us by helping them restore their industries through the use of
a stable and gold-secured currency.
Mr. HITCHCOCK. That is exactly what I am trying to do
in my bill, but I find considerable difficulty, and I am anxious
to hear the Senator explain it as fully as possible.
Mr. OWEN. To recapitulate, or, perhaps, to repeat in some
degree, I may say that by the last report the Federal reserve
83330— 22109
19
banks had two million nine hundred and ninety-three millions
of gold and legal tender, making approximately two billions
nine hundred and fifty millions net gold.
Taking away live hundred million of this gold and putting it
subject to the redemption of the bank notes of the Federal re
serve foreign bank would give, with a 20 per cent gold reserve
against such rates, a gold-secured currency available for Europe
of twenty-five hundred millions, which would be enough to serve
their commerce and industry, and make a profit to the banks of
the United States until Europe should be restored to a normal
condition. Germany, for example, measuring its present mark
currency of one hundred and three billions at a half a cent per
mark would have a gross currency value of about five hun
dred million dollars, which would be enough if it had a stable
value. The bank I propose could supply this amount of goldsecured currency which would suffice to supply the manufac
turers and merchants with an amount adequate for their needs,
and twenty-five hundred million dollars would be an abundance
to provide Europe with all the gold-secured currency impera
tively necessary for the restoration of its industries.
Withdrawing five hundred millions from the present American
gold reserve would still leave twenty-four hundred millions of
gold and legal tender behind Federal reserve notes of two
billion four hundred and forty-seven million in actual circula
tion which at present happens to be about 100 per cent.
The Federal reserve system provided for a 35 per cent re
serve in gold or lawful money against the reserve deposits of
the member banks, and these deposits, amounting to seventeen
hundred millions, require a gold deposit of over five hundred
millions in gold, notwithstanding these deposits are fixed by
statute law, can not be withdrawn, and do not fluctuate substan
tially. A year ago the deposits of the twelve reserve banks
December 23, 1920, amounted to $1,771,000,000. On December 21,
1921, these deposits amounted to $1,784,000,000, an increase of
$13,000,000, although the loans and discounts, including openmarket purchases and acceptances, had decreased $1,621,630,000.
It is an absolute waste of five hundred millions of gold to
keep it tied up as a reserve against the reserve deposits. The
principle of keeping a reserve against a deposit which is subject
to withdrawal from a member bank is totally different from a
reserve held against reserve bank deposits, because a member
bank may have all of its deposits withdrawn and a member bank
has no means of making payment with Federal reserve notes
obtained from the Government as with the Federal reserve
. banks. But even a member bank which is carefully managed
should be able to go through a complete liquidation within a
reasonably short time under our reserve system, and it would
be impossible to embarrass the reserve banks by the failure of
one or more member banks.
So that without diminishing the amount of gold behind the
Federal reserve notes, the United States could establish the
Federal reserve foreign bank with five hundred millions of
free gold, and, therefore, furnish Europe with twenty-five hun
dred millions of gold secured currency.
The Federal reserve foreign bank under the plan proposed
would not issue Federal reserve notes, but would issue Federal
reserve bank notes, based on a minimum of 20 per cent actual
83330— 22109
gold and 100 per cent of short-time qualified commercial bills
based on actual staple merchantable commodities, such bills
being secured by documents and underwritten by member banks.
Any bank authorized to do business with the Federal reserve
foreign bank would be designated for this purpose a member
bank.
In Europe the people are accustomed to bank notes. The
Bank of England note is a bank note and, although the note o f
a private corporation, is made legal tender by law. The notes
of the Bank of France and of the Reichbank of Germany are
legal-tender notes, although bank notes, and comprise the
volume of the currency of France and Germany, respectively.
The franc and the mark being legal tender, the people who
transact business with each other promise to pay in francs and
marks, and when the franc and* mark go down from par those
who belong to the creditor class suffer and those who belong
to the debtor class’ gain. A man who at the beginning of the
war owed 100,000 marks worth at that time gold par could
liquidate the debt now for one-fiftieth part of the same value in
gold.
This is ruinous to the bond-holding class whose bonds are
payable in marks. It accounts for the tremendous fluctuation
in the price of stocks which represent part ownership in certain
properties, because the properties having actual gold value in
crease in terms of marks as the marks go down in gold value.
Mr. President, I do not think it desirable that I should '
comment upon the wisdom or unwisdom of the German Govern
ment in expanding the marks to such a gigantic volume. It is
sufficient to point out the fact of this inflation, its interruption
tb the stability of credits, and its eventual depressing influence
on industrial life. While on a rising market there may be for a
while a feverish activity to manufacture and sell goods against
a rising market, eventually the discovery is made that it is an
illusion and the collapse must come. We have already experi
enced our depression, have reached the bottom in nearly all
lines of commodities, and are now reacting from it.
It is obviously impossible that the German people, the Poles,
the Austrians, or Russians will ever pay in gold the debts con
tracted in paper money. Some compromise must be effected be
tween the debtor and creditor class at which the mark, the
kronen, the lei, and the ruble shall have a fixed gold value for
purposes of adjustment, unless, indeed, with the ruble the whole
bad business is repudiated. But with a depreciated and fluctu
ating currency business men are almost paralyzed. The dis
tress and disorganization of business will not end until a sound •
currency is made available.
Mr. President, it is not enough to provide a means by which
Europe can get a gold currency for the use of their manu
facturers and merchants. Under the present disorganized con
dition of Europe they can not at this time pay back to the
United States the principal or interest of the debts due our
Government and our nationals in gold or in commodities.
They have not the gold, and their manufacture of commodities
is greatly hampered by the conditions which I have described.
Quite a few of our citizens in distinguished positions have so
keenly realized the disorganization of Europe and the extreme
poverty of the poorer classes that they have been led to the belief
83330— 22109
and have advocated that the people of the United States should
forgive the debt due by the people of Europe. It is a generous
impulse. I sympathize with the high motive that actuates those
who make the suggestion. They believe it would attach the
people of Europe to the people of the United States and that
it would have a future moral and financial consequence that
would fully justify the cancellation of the debt.
I do not agree to this for the very simple reason that while
it is true that the poverty o f the poorer classes in Europe is
very great, it is also true that the wealth of the wealthy classes
of Europe is very great and I am not willing to tax the wealth
of the United States and of our people with the effect of con
veying that amount of property to the wealthy classes of
Europe.
As I have heretofore stated, the material resources of Europe
remain; the productive power of the people of Europe is greater
now than it was in 1913, provided only their industries were
properly organized and in full motion.
The very great bond issues put out by the European Gov
ernments are held by their own people, and these Government
debts are private assets and neither add to nor take from the
power of the European people, as such, to pay the amount which
they borrowed from us. Their Governments borrowed from us
ten billions and our country expended in the war over forty
billions. The war cost us thirty billions net outside of what
we advanced to Europe, and this war was brought on through
the acts, through the sins of omission and the sins of commis
sion of the European statesmen. We were finally besought to
come to the protection of the more democratic European people
who were about to be overthrown and subjugated by the evil
forces which they had permitted to grow up in their midst.
While I do not agree that we should remit this debt or the
interest upon it, I do think that we ought to make the most
important concessions. We ought to agree to withhold for 5
or 10 years a demand for the present payment of interest on
the amount due the United States by the foreign Governments
and let it be added to the principal. We ought to lower the rate
of interest on this indebtedness to 3 per cent because 3 per cent
is a fair rate of interest on a secured debt. I say it is a fair
rate because 3 per cent was the unbroken rule of interest
charged by the Bank of Netherlands for 50 years without
an exception previous to the World W a r; because France had a
3 per cent rate of interest with very few exceptions for decades
before the war, and because our 3 per cent bonds before the
war were at a premium, and because the American bankers
pay their depositors less than an average of 3 per cent, and the
American bankers are content to make less than 3 per cent on
the average of their deposits in lending the deposits out and
taking the responsibility of the loans.
Even during the World War London merchants got money
on acceptances at 31 per cent, and call money now in London
is under 3 per cent, and because call money in normal times,
as in February, 1908, to December, 1908, averaged between 11
per cent and 3 per cent, as it did in 1909. It averaged under 3
per cent during 1910 and 1911, and before the World War, in
1914, from January to July it averaged under 2 per cent, and
even during 1915 and 1916 it was very low, until we got into
the war.
83330— 22109
The European people are not bankrupt either financially or
morally. They will pay their debts honorably and in due time,
but America ought to go as far as reason and justice requires
in lowering the rate of interest, in giving time, and in extend
ing financial cooperation and credit to enable Europe to make
effective its man power and material resources.
I have said that the European people were not bankrupt for
the simple reason that their material resources and man power,
their brain and brawn, remain unimpaired, and while it is true
that the Governments of Europe have permitted the currency
to be impaired in purchasing power by emission of paper cur
rency in excess of what could be redeemed in gold, nevertheless
whatever this currency is and whatever the bonded indebted
ness may be already issued by the European Governments, the
European people hold as individual assets almost every dollar
of these Government liabilities, and in appraising the wealth
and the wealth-producing power of Europe it must be remem
bered that these national liabilities are individual assets.
I am not willing, Mr. President, to have the wealth of
America taxed in the interest of contributing to the wealth of
Europe, and Europe must recognize its obligation to tax its
own wealth just as we have taxed our wealth in this country
to meet its national obligations.
All Europe must acknowledge the rights of private property
and provide the means of giving private property prompt, sure
protection.
The European nations must balance their budgets, and will
undoubtedly do so as soon as the world reaches an understand
ing with regard to the limitation of armaments on sea and
land, and as soon as the nations have an understanding, whether
express or implied, that they will use tlieir combined energies
to protect the territorial integrity of unoffending nations against
the invasion or aggression of outlaw nations.
With the destruction of the military dynasties the world has
but little reason to anticipate in future wicked wars of aggres
sion.
The European nations must stop the unlimited issue of paper
money and bring their currency back to gold par. This is a
problem of gigantic importance and of the most serious diffi
culties dealing with the bonded indebtedness of these nations
measured in terms of a depreciated currency. It can only be
done by the most resolute and clear-cut purpose and will involve
compromises between the debtor and creditor classes involving
amounts that are gigantic. We need not wait for this com
promise to be effected, for other remedies are available.
Mr. President, in the event that the United States does post
pone the payment of the interest on the European debt for the
next 5 or 10 years, and if we extend the time of the payment
of the principal of the European debt for 50 years, we ought
at the same time to postpone the payment of the bonded in
debtedness of the United States for at least a like period and
waive the collection of a sinking fund for the next 5 or 10
years in order to relieve tire American people of some part of
the gigantic burden of taxes imposed by. this World War.
In conclusion, Mr. President, the suggestions which I wish
to make are as follow s:
83330— 22109
'
- T
U
23
First. That we should postpone the final payment of the
World W ar debt in the United States by extending the payment
over 50 years; that we should not for 10 years collect any
amount for a sinking fund.
Second. That in arranging the payment of Europe’s debt to
the United States we should extend time to Europe necessary
to enable them to readjust their affairs and regain their pro
ductive power, and that we should not for 10 years demand of
them the payment of the interest due, but allow it to merge into
the principal.
Third. That we should put the interest rate at 3 per cent on
the European debt to the United States.
Fourth. That we should establish a Federal reserve foreign
bank through which might be emitted twenty-five hundred mil
lion dollars of gold-secured Federal reserve foreign bank notes
having 100 per cent commodity bills and banking credits behind
such notes; such notes subject to redemption in gold at New
York, London, and Paris only, and then only to member banks.
The Gresham law could not apply to these reserve bank notes,
for the very sound reason that every one of these notes would
have behind it 100 per cent of commodity bills worth the gold
on the market, and moreover would have sound bankers’ credit
worth the amount of such notes in the market, and moreover
would have 20 per cent of actual gold, so that anybody able to
buy gold at all could buy it with these commodities and bankers’
credits and need not cash the reserve bank notes as a means
of getting gold. It would not be the same as putting gold in
circulation side by side with depreciated paper money, because
to get these notes you have got to pay the full value in gold in
terms of commodities and bankers’ credit, and it would be just
as easy to buy gold under these circumstances as to buy and
redeem the bank notes.
The value of the proposed note is that it furnishes in the most
convenient possible form a currency redeemable in gold and
worth gold, and, therefore, becomes a medium of exchange with
which the European people, the manufacturers and merchants
and business men, can measure their contracts and know what
they are doing when they enter into a contract.
I have drawn this bill in the hope that some of the Senators
of the party in power would approve its principles and take it
and perfect it by putting it under the microscope and use its
sound principles in order that the people of Europe who owe us
fifteen thousand millions of dollars may be put in a position
where they can repay what they owe us. Our industrial and
commercial prosperity is most intimately bound up with the
happiness and prosperity of the European people. If they can
not buy our goods we suffer; if we can not buy their goods
they suffer.
If their industrial life is disorganized so that
they can not buy from us our foreign commerce languishes.
W e have already seen our foreign commerce fall off over
three thousand million dollars this year. W e find goods piling
up in excess, and men burning corn in the West, while the Rus
sian people die for the lack of corn.
The world is entering into a new era. The great military
dynasties have been overthrown. The Hohenzollerns, the Hapsburgs, the Romanoffs have followed the Bourbons. The
83330— 22109
world enters a new democratic era. The Conference at Wash
ington on the Limitation of Armaments has already had a pro
found effect on the world. It will not only cut down the gigantic
taxes which would have ensued from the rivalry among the
nations in building warships, but it will lead to a ‘limitation of
land armaments. The increasing intelligence of the people of
the world will no longer permit statesmen to be led by vanity
and ambition into' the slaughter of the peoples of the earth.
A new7 era has been born, an era of peace, of industrial life
of new7 industrial activity, of new powers of production, and
the great war debts in 25 years from now will be liquidated
far more easily than they are now, not only because of the in
creasing power of man to harness the forces of nature and create
values, but because men have learned how to create credits and
to make money available to those who are entitled to it. We
have demonstrated this in the Federal reserve a ct; in the
farm loan act; in the War Finance Corporation; in the Liberty
loan drives, where w7 turned over to Uncle Sam forty billions
e
of dollars of credits in a few short months.
Under the Federal reserve act since 1913 there has been a
very large expansion of credits, notw ithstanding the contraction
which has taken place under the pressure of the last year and a
half.
The payment of the w debt will be much easier on the people
rar
by postponing it a few years, because their productive power
is increasing year by year. I therefore pray, Mr. President,
that the members of the majority party who are charged with
the administration of government shall consider the suggestions
which I have had the honor to make, and if there be credit
arising from the principles and plan I propose, let the party
in power take the full credit. I shall be more than content if
what I have proposed may be of service to the country and the
w°rld and assist the party in pow7 to meet the reasonable
er
hopes and expectations of the American people.
83330— 22109
o
SIXTY-SEVENTH CONGRESS, SECOND SESSION
The need of Europe for a stable gold-secured currency as
a means of measuring- contracts in manufacturing, buying
and selling, increasing production, and restoring the pur
chasing power of Europe— Senate bill 2915.
R E M A R K S
OF
HON.
ROBERT
OF
In
t h e
S
e n a t e
L.
O WE N,
O K L A H O MA ,
o f
t h e
U
n i t e d
S
t a t e s
,
Friday, January 20, 1922.
PROPOSED FEDERAL RESERVE FOREIGN
BANK.
Mr. OWEN. Mr. President and gentlemen of the Senate, I
again call the attention o f my colleagues, and especially of my
Republican colleagues, and appeal to them to consider the pro
posal I submitted January 4, Senate bill 2915. Action on this
subject promptly is of vital importance to our foreign commerce.
It offers an important means to restore the value of our agricul
tural and manufactured commodities, to relieve our industrial
depression, to engage our unemployed labor, to stimulate the
industrial activities of Europe, to enable Europe to buy our com
modities, to assist Europe to repay us the loans we made to Eng
land, France, Italy, Rumania, Belgium, and Russia.
The bill proposes to give Europe the wonderful benefits which
we receive and enjoy from the wise and sound principles of
the Federal reserve act and the enormous gold supply we have
built up under that system; that there shall be established
a Federal reserve foreign bank for European operations, with
$500,000,000 gold capital, owned by our 12 Federal reserve banks,
with power to issue $2,500,000,000 in bank notes—denomina
tions, $1, $5, $10, $20, $50, $100, $1,000, and $10,000—to be
issued against 100 per cent sound short-terin bankers’ bills,
secured by 100 per cent of staple, merchantable, insured com
modities. title covered by documents, with a 20 per cent gold
reserve for redemption purposes, redeemable in gold at London,
Paris, and Berlin by member banks on ly; that such bank should
lend such currency notes against such bankers’ bills, and thus
furnish the people for till money and pocket money, and to the
banks of Europe $2,500,000,000 of gold bank notes as a currency
with which to measure business contracts and afford a stable
measure of value in buying, selling, and contracting for the
manufacture and delivery of commodities.
The most vital financial need of Europe is a dependable, stable
international currency as a medium of exchange. America
alone at this time is able to furnish such a currency, as Amer
ica alone has the gold. We alone have the available gold.
We have 35 per cent gold reserves, against $1,784,000,000 of
deposits of member banks, equal to $634,400,000, which is idle,
useless, and unproductive, because the deposits can not. except
in case of an occasional bankruptcy, be withdrawn under the
statute, and could be paid in reserve notes even if the deposits
of an insolvent bank were withdrawn. We can use $500,000,000
of this unproductive gold and still leave the Federal reserve
notes with 100 per cent of gold for redemption purposes.
The Bank of England, during the Great War, although the bul
wark of Great Britain’s financial structure, got down to 8 per
cent reserve without creating any financial disturbance.
It will be very profitable. These loans of $2,500,000,000 of
bank notes would approximately pay 3 per cent, or $75,000,000.
gold annually, and expand the service to the extent of European
requirements.
The one great overwhelming need of Europe is a money equal
in value to gold, and as stable as gold, in the pockets of the
people, in the tills of the merchants, manufacturers, business
men. and bankers.
Buyers and sellers with a fluctuating currency are terribly
handicapped. The buyer finds the mark buys less in commodi
ties as the mark falls in value, so that his money is losing
value all the time. The seller finds his commodities bring
marks of less gold value as the mark falls. When he tries to
save himself by raising the price in terms of marks it is to his
disadvantage in selling. When he receives the marks for his
goods, before he can buy new commodities the mark has again
fallen in gold value. He suffers both ways. Measuring con
tracts by a fluctuating currency is like measuring silk cloth
with a rubber yardstick; like selling oil by the can without
defining the size of the can ; buying coal by the bucket without
knowing the size of the bucket.
It is chaos, hopeless confusion. Under such conditions the
manufacturer, merchant, and business man is almost paralyzed.
Productive activities and profitable commerce are well-nigh
impossible. The greatest duty of statesmen is to promote the
profitable employment of the people, to furnish them facilities
in sound currency and credits, to remove obstructions to com
merce and production, make raw materials accessible, promote
transportation.
European business men would rejoice to have the use of this
gold currency.
It would tend to immediately stabilize contracts and credits,
stimulate production and employment.
It would tend to stabilize exchange.
It would greatly assist Germany to meet its reparation bills
in gold payments, and thus help France, Belgium, Great Britain,
and Italy.
It would help to make the gold dollar the standard measure
of international contracts.
It would make the United States the greatest and most useful
servant of mankind, and entitle America to the increased respect
of the whole world.
It will enable Europe to create the commodities needed to pay
America $1,500,000,000 of debts and interest thereon.
It will preserve the gold standard and prevent Europe going
permanently to a paper-money basis.
It will increase the demand for gold for monetary use in
Europe, where such demand has largely ceased to the disad
vantage of our excess hoarded gold and its purchasing power.
It will be profitable and earn a minimum of $75,000,000 per
annum.
It will stimulate our foreign commerce or exports and im
ports.
It will tend to raise the prices of our export products, to in
crease the employment and the wages of labor in the United
States, and relieve our present industrial depression.
Foreign nations alone can place their currencies on a gold par
basis. If they conclude to do that, they must balance their
budgets, be economical, by taxes take up their surplus cur
rency, and arrange a plan by which debtors will pay their debts
or bonds on the gold basis of value, so that the debtor, whether
a citizen or a nation, shall only pay the gold value originally
advanced by the creditor. On this basis Governments would
only tax their people to the extent of what the Government
got in terms of gold when they sold their bonds. There must
be some equitable adjustment between the debtors and creditors
in Europe, between the bondholders and the taxpayers of
Europe. It can be done, but it is a matter exclusively in the
hands of the statesmen of the several countries involved.
We can nevertheless furnish them with a gold-secured cur
rency and with credits, and this assistance to Europe I urge
upon you.
We should agree to merge the interest on the European na
tional debts to our Government into the principal of the debt
for the next 5 or 10 years.
We should put the interest at the prewar rate, 3 per cent.
We should extend the time for paying the principal for from
30 to 50 years.
We should help them with our gold and give them a goldcommodity secured currency and the credits that would be
easily afforded through the proposed Federal reserve foreign
bank.
When we extend the payment of the European War debts to
30 or 50 years now we should do the same thing in the United
States and extend the payment of the United States war bonds
for a like period.
86294— 22183
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O F F I C E : 1922
SOLDIERS’ ADJUSTED COMPENSATION.
SPEECH
OF
HON.
BOBEBT
OF
In
t h e
S
e n a t e
L.
OWE N ,
OKLAHOMA,
o f
t h e
U
n i t e d
S
t a t e s
,
August 81, 1922.
T h e S e n a t e h a d u n d e r c o n s i d e r a t i o n t h e b i l l (H.
a d ju s t e d c o m p e n s a tio n fo r v e te r a n s o f t h e W o r ld
p u rp oses.
R. 10874) to provide
W ar,
and
fo r
o th e r
Mr. OWEN. Mr. President, I am not able, as I had hoped,
to vote for this bill in the final form as presented by the ma
jority party of the Senate with no means therein provided for
payment. I should feel justified in voting for imposing taxes
for the benefit of our young men to the extent required to cure
or relieve them of injuries, to support them where disabled or
incapable of self-support or in distress, to instruct them in selfsupport by vocational instruction, and to assist them in develop
ing a home on the public domain. But to tax the American
people by from $4,000,000,000 to $7,000,000,000 by the certifi
cate plan, without any discrimination whatever, as set forth in
the bill, and pay out huge sums for those not in want, not un
employed, and in fine health, does not seem to me wise or defen
sible. We should be provident with the family purse and use its
resources for those in need and not spend our resources for
those not in need, lest we then may be compelled to deny those
in great need.
I do not feel justified as a temporary trustee of the people’s
legislative power to put this unnecessary tax on my countrymen
without a mandate or instructions from them. My sympathies
are with all of our young men desiring the bonus, and I should
be glad to support their wishes if the people of Oklahoma
through the legislature should express the wish of the State to
that effect, but I can not consent to tax our impoverished and
troubled people any more without knowing that they wish me
to vote this unnecessary tax upon them. The organization of
our veterans committed to this plan is said to consist of 25 per
cent of our soldiers enlisted and to represent approximately 5
per cent of our people. The members of the Legion are divided
in opinion as to its wisdom, and they have advised me both for
and against the bill.
The leaders of the party in power have determined to pass
the bill, and the passage of the bill is absolutely sure. My vote
is not needed to pass it. The Republican Party has the man
date of the country. That party will take the credit for the
act, and I prefer that the Republican Party shall take the
undivided responsibility for the added taxes which will be re
quired to pay the full liability assumed by the act.
9891— 23121
W A S H IN G T O N : G O V E R N M E N T P R IN T IN G O F F IC E : 192*
$
JK0ITA8W:-MK0D
‘.T • rio \ • •'
H D & S ‘I d
,Ta no .j t iraoa .vto a
^
* ;>
•
H
■
■
■
.
■-"i "
‘
-
'll
t
■
■
t,v*
* m ; a a m o <i i « ; ■, r/ m
■
. too ?-• >- .
•<
STATEMENT
OF
HON. ROBERT L. OWEN
UNITED STATES SENATOR FROM OKLAHOMA
WITH REGARD TO
THE CAUSES OF THE RECENT AND EXISTING INDUSTRIAL
DEPRESSION— REPUBLICAN PARTY LARGELY RESPON
SIBLE FOR DEFLATION OF CREDIT AND CUR
RENCY AND THE SEVERITY OF THE
INDUSTRIAL DEPRESSION
IN T H E
SENATE OF THE UNITED STATES
SEPTEMBER 22, 1922
< f >
WASHINGTON
1922
12611— 23227
STATEM ENT
OF
HON.
ROBERT
L.
OWEN,
U n it e d
States
Sen ator
fro m
Oklah om a,
w it h
R egard
to
th e
C au ses
of
t h e
R ecent
an d
E x is t in g
I n d u s t r ia l
D e p r e s s io n —
R e p u b l ic a n P a r t y L a r g e l y R e s p o n s ib l e f o r D e f l a t io n o f C r e d it
an d
C u rren cy and t h e
S e v e r it y o f t h e I n d u s t r ia l D e p r e s s io n .
The Federal reserve act was intended to give stability to
credits, industry, and commerce and to prevent unwarranted
inflation or unwarranted deflation. As chairman of the Com
mittee on Banking and Currency of the United States Senate,
which framed and passed this act. I am justified in this state
ment.
When the United States entered the war in 1917, and pur
chasing agents with unlimited money were turned loose to buy
war materials without limit on cost, it caused commodity prices
to rise in an unprecedented manner, these prices going up two
and three hundred per cent.
When the war ceased and the purchasing agents were dis
charged and the surplus war materials put on the market by
forced sales and the nations of the world went back to peace
ful processes, millions of men again became productive, the vol
ume of commodities increased, and the urgency of the demand
diminished, and therefore there took place, of necessity, a great
fall in commodity prices, causing heavy losses through inven
tories which had to he rewritten. This had a natural tendency
to bring about an industrial reaction.
But it. was a process which was accomplished somewhat
slowly and only began to make itself felt in the fall of 1919.
No man and no party should he held responsible for this
natural reaction from the high prices of w a r; hut if the powers
of the Federal reserve act had been wisely employed, an indus
trial depression could have been largely avoided and its effects
mitigated.
In the election of 1918 the tremendous discontents due to our
war activities were successfully employed by the Republican
Party leaders, and they elected a majority of Republicans to
the House of Representatives, and by a gigantic effort, and
obtained through the lavish use of money in many States, and
especially in Michigan, were able, by Senator N ew berry ’ s vote,
a single vote, to organize the United States Senate. They there
fore organized and controlled the Sixty-sixth Congress, which
met May 19, 1919.
Immediately the influence of the Republican control of the
two Houses of Congress made itself felt on the Federal Reserve
Board, whose membership, nominated by Secretary W. G.
McAdoo, with a single exception, was reactionary and ultra
conservative.
Gov. W. P. G. Harding, under this Republican influence, and
representing the Federal Reserve Board, thereupon determined
12611— 23227
3
upon a policy of deflation. About the 1st of July, 1919, as
governor oi the reserve board, he went to New York City, called
the leading bankers together, and notified them that they would
nave to cut down their loans on stocks and bonds, which at that
time amounted to about nineteen hundred millions of dollars.
'V**1
Government support and this Government demand,
the New York banks promptly began a policy of deflation, which
they made effective by raising interest rates, charging more and
more for money and credit. The call rate, which had been at a
very reasonable point, began to rise to 5, 7, 10, 15, 20, and as
high as 30 per cent by November, 1919, with the apparent ap
proval of the Federal Reserve Board, who did nothing effective
to stop it, in spite of a demand that they should do so. The
running up of the rates to 30 per cent on call in New York
shocked the confidence of the country, drew money violently
Irom various industrial centers to New York, and broke the
stock market, resulting in losses eventually running into thou
sands of millions in the value of stocks and bonds.
Along in December, 1919, the Reserve Board, under the Re
publican influences to which I have referred, began to con
sider raising the rates of the Federal reserve banks and, over
my vigorous personal protest made in person to the members of
the Federal Reserve Board and then by writing, they did raise
the rates of interest. Then on the floor of the United States
Senate I protested against the ruinous deflation policy.
In the meantime the Kansas City Title & Trust Co. tied up
all the loans of the Federal farm loan banks by a suit intended
to test the constitutionality of the farm loan act. (Smith v.
Kansas City Title & Trust Co., 255 U. S. Sup. Ct., p. 180.) The
banks of the country followed the bad example of the Federal
reserve banks in contracting credits.
In the spring of 1920 the Republican Congress passed an
amendment to the Federal reserve banking law empowering the
Federal Reserve Board to increase the rediscount rates with
out limit, and under this act the board permitted the Federal
reserve banks to run the rates up in a manner to violently
affect the stability of credits in the ’United States, in one
egregious case the rate going over 80 per cent per annum and
in many cases going up to 12, 15, and 20 per cent.
Unable to influence the Federal Reserve Board in favor of
lower interest rates, I wrote a letter to the President on Feb
ruary 13, 1920, but his unfortunate illness made it impossible
for him to consider it.
On February 16. 1920, I raised my voice on the floor of the
Senate against this destructive policy and put in the C o n
g r e s s i o n a l R e c o r d my letter to the President explaining how
speculation and hoarding could be prevented and controlled
without these excessive interest rates and without deflation
of credit. ( C o n g r e s s i o n a l R e c o r d , 2937. Exhibit A.)
Again, on March 8. 1920, on the floor of the Senate ( C o n
g r e s s i o n a l R e c o r d . 4001), I raised my voice against this de
structive policy and high interest rates, but the protest was
unavailing with the Republican leaders of the Congress.
Again, on April 21 Senator M c C u m b e r , now chairman of the
Finance Committee of the United States Senate, urged that the
Federal reserve act should be modified so as to compel contrac
tion ( C o ngressional R e c o r d , 5930) of the currency and he
12G 11— 2 3 2 2 7
5
complained about the greatly inflated currency and attributed
the high prices of war to an “ inflated ” currency. He urged a
contraction of the currency.
The Federal Reserve Board, under these Republican influ
ences, put great pressure to bear on the banks to compel them
to sell Government bonds which, under high interest rates, had
fallen severely in market price, and again I protested against
the high interest rates on April 30, 1920 ( C o n g r e s s i o n a l R e c o r d ,
6337) and showed how speculation and hoarding could be con
trolled without raising the rates of interest and without deflation
of credit or currency, and I put in the R e c o r d on that day a let
ter which I had written to the governor of the Federal Reserve
Board, April 27, 1920, protesting against raising the interest
rates, and I said to him ( C o n g r e s s i o n a l R e c o r d , 6337. Ex
hibit B) :
“ The Federal Reserve Board can not permit itself to be held
responsible for the consequence that will ensue if it persists in
this policy of raising the interest rates as a remedy for specu
lation.”
The hoard asserted they were raising the rates and deflating
credits to check speculation.
I explained to him in this letter how speculation could be
controlled without raising the interest rates, and I urged the
board to pursue a policy that would give stability to credit and
avoid the dangers that would ensue if the powers of the board
were used to break down confidence and credit in the United
States. Unhappily the Federal Reserve Board, under the in
fluence of the Republican leaders, refused to listen to my
pleading.
In the interest of those who had dollars they seemed de
termined to make the dollars buy more by a policy of indis
criminate deflation and currency contraction.
I urged that the dolars could be made more valuable by in
creasing the volume of commodities through industry and pros
perity rather than to make the dollars more valuable under in
dustrial depression by the hammer of the auctioneer and re
ducing the cost of commodities below the cost of production.
On May 3d, 1920, the governor of the reserve board replied
to my appeals, but did not change the policy of the board. He
said, however ( C o n g r e s s i o n a l R e c o r d , 6556). that:
“ During the year 1919 the hoard tested the policy of attemptinn to control the credit situation by admonition and learnings
without raising rates.”
The board did far more than use admonitions and warnings
to bring about deflation and “ control the credit situation.” It
issued its bulletins and gave its counsel and advice and issued
rules and regulations, all of which went to carry out the policy
of indiscriminate deflation, all of which had the purpose to
limit credits throughout the United States and to reduce the
volume of currency required and had the effect to break values
ruinously and to create a terrible industrial depression and ruin
tens of thousands.
On May 14, 1920 (C ong ressio n al R ecord. 7 0 3 9 ), I replied to
Governor Harding’s letter, insisting that the Federal reserve
system was intended to give stability to credit, that it was not
a money-making institution, and I pointed out:
12611— 23227
“ The Federal Reserve Board is thinking much these days of
deflating credit. The idea has been much exploited recently
that it is a good thing to deflate credit.”
And against this policy 1 entered my vigorous protest, fully
set forth in the R ecord, and I put in the R ecord a letter dated
May 14, 1920, to Governor Harding (Exhibit C), so that there
might be no doubt that my appeal to the Federal Reserve Board
for liberality in treatment for the country was made and was
unavailing. (C o ng ressional R ecord, 7042.)
The Reserve Board declared automobiles and various com
modities nonessentials and advised the banks to refuse credits
on automobiles and on many other things, including commodities
in storage.
1 ho answer which the Reserve Board gave me in answer to
my letter was Senate Resolution 363, submitted by Mr. M cC or
m i c k , leading Republican Senator from Illinois, to the following
effect:
“ Resolved, That the Federal Reserve Board be directed to
advise the Senate xchat steps it purposes to take or to room mend to the member banks of the Federal reserve system to
meet the existing inflation of currency and credits and conse
quent high prices,” and so forth.
The Republican Senate passed this resolution, which was
expressly intended to be a notice to the Federal Reserve Board
by the Republican Party that they were expected to deflate
‘‘ the existing inflation of currency and credits and consequent
high prices,” attributing to inflation the high prices instead of
to the results of the war.
On May 18. 1920 (C o ngressional R ecord, 71993). I again ad
dressed the Senate on tins question and protested against the
resolution of the Senator from Illinois and I warned the Fed
eral Reserve Board and I warned the country that an industrial
depression would result from the policy of forced deflation (C o n
g ressional R ecord , p. 7200).
I pointed out that the earnings
of the Federal reserve banks were running up to nearly 200
per cent per annum. I charged the Republican Party then and
there with being responsible for the attitude of the Federal
Reserve Board. Mr. M cL ean , who was then chairman of the
Banking and Currency Committee of the Senate, defended the
high discount rates (May 18, 1920).
But, Mr. President, the responsibility of the Republican
Party for the policy of indiscriminate deflation was fully as
sumed by the leaders of that party at the Chicago convention
in June, 1920, in the following plank:
“ The prime cause of the high cost of living has been first
iind foremost a 50 per cent depreciation in the purchasing power
of the dollar, due to a gross expansion of our currency and
credit. We condemn the unsound fiscal policies of the Demo
cratic administration. As the political party that throughout
its history has stood for honest money and sound finance we
pledge oursqjves to earnest and consistent attack upon tlm high
cost of living by rigorous avoidance of further inflation in our
Government borrowing and by courageous and intelligent de
flation of our overexpanded credit and currency.”
They deliberately declared in favor of a deflation of credit
and currency and brazenly called it courageous and intelligent
12011— 23227
They could only do it through the Federal Reserve Board as
they had already been doing it by the Federal Reserve Board
(in July 22, 1920, Mr. Harding, Republican nominee for
President, in his speech of acceptance, said:
“ dross expansion of currency and credit have depreciated
the dollar
* * * Deflation on the one hand and restoration of the 100-eent dollar on the other ought to have begun
on the day after the armistice. * • * W e pledge that
earnest and consistent attack which the party platform cov
enants
W e will attempt intelligent and courageous deflation,
and strike at Government borrowing, which enlarges the e\il.
\nd there is not the slightest doubt, therefore, about the Re
publican responsibility for the drastic deflation which took
place in their determined policy to deflate credit and curiencj.
Its terrible effects upon the country are well known.
I Was not alone in my efforts to prevent this drastic defla
tion policy pursued by the Republican leaders, acting through
the Reserve Board and Governor Harding, of the Keseive
Board, because Hon. John Skelton Williams then Comptrollei
of the Currency—the best the Nation ever had—also \igorously
protested against the high rates of interest as w. appear
from his statement made September 11. 19-0, anJ P1
'
the Report of the Comptroller of the Currency
J :
Op September 11, 1920, the comptroller made public the
following additional statement in regard to interest rates m
New York, which explains itself:
a
11 1fPO
lead ng New York paper, in its financial columns to-day.
criticizes the statements made this week by Senator O wen
relative to the excessive interest rates which have been charged
bv certain banks in New York City during the past year, and
savs that bankers ‘ point out that when Senator O w en charges
that $.100 000,000 has been loaned at rates up to 30 per cent he
is speaking without the record.’ Continuing, the press article
S 1 ‘ That high figure obtained on the stock exchange for about
< ‘‘S
10 minutes one afternoon the middle of last November, and
probably as much as $1,000,000 was loaned at that rate.
“ That criticism by the unnamed ‘ bankers is misleading,
and in justice to Senator Owen it is proper to say that the
Senator’s public statements on this subject, as printed in the
press dispatches which have been brought to my attention, are
substantially correct, and in view of actual facts are model ate
and conservative.
“ During the past year the burdensome and oppressite in
terest rates to which the Senator refers have been exacted,
not in ‘ one or two possible insignificant instances as one
New York paper expressed it, and not as the_ high figure as
another paper expressed it, ‘ for about 10 minutes one utternoon the middle of last November,’ but in thousands or in
stances, at numerous times, and upon call loans aggiegating
hundreds of millions of dollars.
“ The information on this subject called for as of August
5, from all of the New York City banks has been supplied b>
nearly all of them and is now being compiled; but in anticipa-
1 2 6 1 1 — 2 .3 2 2 7
8
“ ' ’" 1 v ab n t e S ^ tet„
f
St?,tC'1
'C'\t7 l,icl‘ wm '*“ ■".liable later.
rates), wereeractto" V n e v „ I ‘ C " “ ''e c" ar« " g the same
!'
(in some instances as high as 2 ! amTsOper
o
; £££—
-----------------------~
ihe new call loans at the rate of 25 peVcent ner
','V ,0" “ S * ™ b!mks at the eml o
.... " 29’ 30’ a" f 31. aggregated
ahont
®
S
' "
Onwere lendingl!)2'0,"these saiueTwo or tVrt^ hunks 2°' °00'
.itintiat'y 2 at IS nor cent. 20 per emt and
2 - per cent interest, about____
onf r„J1 i o o U
“ a
n
^
4
r ■ 5' 18
*
¥
^
'
=
- .... ^
n
;;
r s :
O'abontbnmry ° ’ 1!)20' at 20 Per ceil t i n te rests
I
r
w
000
°°0, 000
hi'-hAa s'l4 e re- ™ f t W" ' " f ‘laao it appeal's "that i n t e S ° ! ,s
hanks on i.iillh.n?", ^ h m ^ ^ c a M Imu’S " " '
*
* he“ ll!ustrations are from the official records of nnlv
l r' ...." ‘i f of the thirty-odd national banks in New York
a m h in c o r r S e s r \ 7 r a i e''t’ r •l,i" k,
*
al‘™ *■» unfairness
some
S , i ^ „ i Z , , S r s “ u^
a g o
that 1dthm,iht°tho'*?r“ 1
Ctly
Ia« o r in thee
statement I made some time
ill
York C l » yh t . ? 6' ", 1,“ ,jOTlt;’ of the national hanks
«ion of their
“
»
report S
f S
'
w T T o T U" "
" ’g"
w-iV HeiTti!1 0t this drastit‘ deflation of the Republican Party
femhirffi 192? S “ s2* OlSESVSl ^
hanks; a decrease o f’ $1,042,186,000 in^the^feposR o f^ h e ’State
ir v ^ b a n k ^ I f
notes in
G (Z ™ ^
30
discounts of the Federal re-
serve hanks’' >Yfre e
w
r
e
'
?
retiits 25, 1922 the *s, V
*p-.9<38,031,000 on January of the Federal out*9 " ' f e T ' V ?
\2 Fe,lcral reserve iL .k s hmT M e n to
’ t>' :Sr ' 00 a total contraction in 20 months of S°0<)5 14 9 000
Besides this gigantic deflation, private indlv duals tl’om’ n ^
™ m n l k S V 0 “0thM' "* re f r i g h t L e ^ i n t o J ill io X Z
,e
I. i
-y
M,es *> bIa
9
same policy and in their relations with each other outside
of the banks the same cowardly and injurious policy was fol
lowed, creditors pressing debtors for settlement to the ruin of
the debtors.
Of course this resulted in the ruin of hundreds of thousands
of farmers; of men engaged in cattle raising and in sheep rais
ing and in animal industry. It ruined many merchants, manu
facturers, and business men, and even ruined very many bank
ers. Of course it brought wages down and was intended to bring
wages down.
Of course it paralyzed business until the process was com
pleted. It caused the great strikes of the country.
The prices of the things, however, that the farmer and wage
earner and great consuming classes have to buy, being controlled
by the trusts and monopolists and by profiteers, still remain at
a figure much too high.
To prevent the possibility of foreign competition with do
mestic extortion, the Republican Congress has nowT enacted the
highest tariff protection bill in the history of the country.
The responsibility of the Republican Party for the great in
dustrial depression we have suffered is thoroughly well estab
lished and must be acceded by every man with an open and a
just mind who loves the truth first and party success second.
A few great bankers who think alone in terms of dollars and
the purchasing power of dollars demanded the deflation of
currency and of credits to increase the purchasing power of
their dollars.
The Republican Party accepted the advice and carried out the
policy. God save the American people. Torn and misled by a
million grievances arising against the Democratic Party because
of the autocracy and abuses of war, the people voted for a
change. They got a change from wonderful prosperity in 1918
to a terrible depression in 1921. It is time for another change.
The Republican leadership is controlled by reaction. The
country is truly progressive and liberal, and to this spirit the
Democracy must appeal.
Exhibit A.
F
ebruary
13, 1920.
Subject: Interest rates.
The P r e s i d e n t .
The White House.
M y D ear M r . P r e s id e n t : I deem it my duty to call your
attention and the attention of your administration to the im
portance of moderate interest rates and stability therein in
the United States and the important part which the influence of
the Government can exert in accomplishing these ends through
the Treasury Department, the Comptroller of the Currency,
and the Federal Reserve Board.
Before the Great War Belgium had a fixed, stable rate of 3
per cent for 50 years and the rate in France was practically
the same, and United States Government bonds with the circu
lation privilege were sold at and above par when they bore
only 2 per cent interest.
During the World War London merchants have enjoyed a
31 per cent rate on acceptances.
1 2 6 1 1 — 2 3 2 2 7 ---------- 2
^ l" manufacturers, our merchants, our business men are
entitled to reliable, stable, reasonable rates of interest.
the productive and distributive processes so essential to re
store the equilibrium o f the world depend upon such rates in
order to function most efficiently.
I call your attention to the unreasonable manner in which
the interest rates on the stock collateral loans in New York
have been fluctuating from normal to 23 and 20 per cent, with
the most unhappy consequences upon interest rates, injuriously
artectnig °ur connnercial business throughout the United States.
lh e federal Reserve Board has been induced to raise the
rate of discount of the Federal reserve banks to a high point
as a supposed check on the extraordinary speculation which
has been taking place on the stock exchange.
These artificially unreasonable high rates of interest charged
by the banks in the central cities on stock collateral call loans
have had the effect of drawing to these cities from different
P a its of the country funds which ought to be exclusively used
in commerce, and this process went to a point where recently
the amount of stock collateral exchange loans on call or short
time reached a volume in New York City of $1,900,000,000
withdrawing for speculative purposes these credits which
should be used in the industrial and commercial life of the
country.
The investing and speculating public has been attracted to the
stock exchange by the policy of narrow margins and low rates
of interest; but after the public lias taken on these speculative
purchases the interest rates are raised to a high point and the
margins are increased from 30 per cent to 20 and 30 per cent
with the effect of squeezing out the people who, in the language
of the day, “ can’t hold on.”
These loans, which were $3,900,000,000, 00 days ago have now
been reduced to $1,000,000,000, and the stock market has gone
through a very severe depreciation ; and this is the second up
heaval of this kind within two months. I inclose an exhibit
showing the violent fluctuations which have taken place con
trary to a wise public policy, to the ruin of many weak and
foolish speculators; but. above all, to the injury of the manufac
turers, merchants, and business men who are entitled to have
stable, moderate interest rates.
J he manufacturers, merchants, and business men are entitled
to stability. They can not otherwise transact the business of
the country with safety; and in their name and on their behalf
I respectfully and very earnestly insist that the Government
shall establish a policy which will give stability to interest
rates, prevent these violent fluctuations, and lead to lower inter
est rates.
Will the question be asked, How can it be done? I venture
to answer:
First. That the influence of the Comptroller of the Currency
and of the Federal Reserve Board be exerted to require a lim
itation upon loans made by member banks or banks engaged in
interstate commerce, so that only a reasonable percentage of the
deposits of such banks shall be permitted to be used for the
accommodation of those who are buying stocks for speculative
purposes.
12611— 23227
Second. That a margin of not less than 25 per cent shall be
required in such transactions.
Third. That an interest rate not exceeding 8 per cent shall be
permitted in such transactions.
Fourth. That the reserve board shall charge a special rate
of interest to those banks who are using the accommodations of
the discount privileges with the reserve banks in excess of their
rightful proportionate part of such accommodation, so that the
normal discount rates of the Federal reserve banks shall not
exceed 4 per cent, but the special rate for banks desiring to use
more than their rightful proportion of the reserves with the
reserve banks shall be at a progressively higher rate. In this
way banks that put up Liberty bonds for the purpose of getting
more than their proportionate part and lending this money out
on very high rates of interest will find it less profitable to
engage in such a policy.
The discount rates of the Federal Reserve Bank of Richmond,
for example, effective January 23, 1920, included the following:
15 days
and
under.
16 to 90
days.
91 days
to 6
months.
Per cent. Per cent. Per cent.
Member banks:
R
Secured by United States certificate of debt......
5i
6
7
Secured by War Finance Corporation bonds......
Rediscounts:
Customers’ notes—
Secured by United States certificates of debt.
R
R
Secured by Liberty bonds............................
5i
5
1
7
Secured by War Finance Corporation bonds.
7
6
6
6
6
6
Agricultural ‘or‘live-stock paper.........................
6
6
You will observe from these discount rates that eligible
paper—that is, the notes of manufacturers, merchants, and busi
ness men engaged in production and distribution—would be
compelled to pay around 8 per cent if the member bank is per
mitted any margin over and above what they themselves have
to pay the reserve bank. This is true even ou trade acceptances,
which in London have a rate of 3$ per cent. In other words,
our manufacturers, merchants, and business men engaged in
production and distribution are compelled to pay by this policy
twice as much as they do in London, charging the interest, of
course, upon the cost of the goods, and thus raising the cost
of living. Against this policy I enter my resolute and solemn
protest.
I heartily approve the evident purpose of the Federal Re
serve Board to reduce the excessive speculative loans on the
stock market and divert such credits to the benefit of com
merce ; but this can be accomplished without raising the rate of
interest by requiring larger collateral margins and by limiting
stock collateral loans to a reasonable part of the reserves of
the member banks, and all loans to a proportionate part of the
reserves with the Federal reserve banks.
12011— 23227
l ib e r t y
lo an
and
v ic t o r y
lo an
bo n d s
.
When the American people were engaged in the war the Treas
ury Department organized Liberty and Victory loan drives, and
every citizen was urged to buy these bonds; if necessary, to sell
his property and buy the bonds; to borrow money and buy the
bonds. The bonds were sold at par. It was a patriotic duty to
buy the bonds, but the high rates of interest which have re
sulted from the unrestrained speculation on the stock exchange,
and the high rates of interest which the reserve banks have
established, have had the effect of having these bonds appear
as a poor investment, and these bonds have shrunk so that in
the case of the bonds which have not the nontaxable feature
they have fallen off in value almost 10 per cent, induc ng many
persons who are poor and who borrowed money to carry these
bonds to sell them at a loss, and many more will be induced
to sell them at a loss, contrary to a wise and just public policy.
If the normal discount rate of the Federal reserve banks were
put at 4 per cent and the banks were discouraged from abusing
the privileges of the reserve banks for stock-speculative pur
poses in the manner which I have pointed out. these bonds
would come back to par. and they should be brought back to
par. The people who bought these bonds ought not to suffer
a loss, and the credit of the United States ought to be preserved
by the policy which I have taken the liberty to suggest to you
and to your administration.
The result of these speculative stock loans has been such that
the New York Federal reserve bank has had its reserve very
seriously impaired, so that the New York reserve bank has
been borrowing money on a large scale from other reserve
banks who do not suffer from this strain.
There is no adequate reason why the rates of the reserve
banks should not be uniform; why they ought to be higher in
one part of the country and lower in another part of the
country. The loans are as reliable in one part of the country
as in another, and every part of the country is entitled to a
uniform rate.
The high cost of living demands for its solution stability in
interest rates in order to encourage production and distribu
tion, and to reduce the high cost of living demands a moderate
rate of interest.
The Federal reserve banks were not established as money
making institutions, but for the purpose of giving stability and
a reasonable stable interest to the productive enterprises of the
Nation.
The Federal reserve banks last year made a profit of about
100 per cent of their capital; but this in no way measures the
added expense on the cost of living, because the high rate of
interest charged by the Federal reserve banks is reflected upon
loans and discounts of other banks running into the billions,
since it affects the interest rates in all parts of the country.
I regard this matter as a matter of national importance, and
I would not feel that I had discharged my duty to the country
if I had failed to call your attention to it in these explicit
terms.
Yours very respectfully,
R o b e r t L. O w e n .
12611— 23227
E x h i b i t B.
United States Senate.
April 27, 1920.
Hon. W. P. G. H arding,
Governor Federal. Reserve Board, Washington, 1). C.
My Dear Governor : I have been intending to call to see you
and beg of you and of the Federal Reserve Board to consider
the injurious effects of raising the interest rates in America
in its relation to adding to the high cost of living and in its
relation to bearing down tbe market value of Government bonds.
1 have just received a telegram from the president of an
important national bank. He explained to me that ins bank
had bought and underwritten a much larger volume of Govern
ment bonds than they would have done normally because of
important Government works put up in his city. Thousands
of employees who were compelled to buy Government bonds
unloaded them on the bank when the war suddenly ended,
and lie has been unable to sell these bonds on a falling market!
and the market is falling because the reserve board has raised
the rate of interest and set the example to the banks of the
United States and justified them to their own conscience and
to their customers in raising the rate approximately 2 per cent
throughout the Union. For your consideration I quote the
telegram:
Can nothing be dono to give Liberty bonds some standing? The
Federal reserve bank is pressing us unmercifully to sell what we have
and has served notice that they will rediscount no commercial paper
until we do so, and as you know this can only be done in the New York
Exchange at panic prices, it makes a serious and very embarrassin0
,
situation which might be very far-reaching.
The reserve banks should be cautioned in pressing the banks
too far to sell these bonds on a falling market. This particular
bank, 1 invite you to observe, would receive a great injury, and
you will be unable to repair it afterwards.
The Federal Reserve Board can not permit itself to be held
responsible for the consequences that will ensue if it persists
in this policy of ra sing the interest rates as a remedy for
speculation. This remedy is worse than the disease.
This remedy is not necessary because there are other avail
able remedies whose consequences will be harmless. I venture
to suggest several:
First. That the banks be advised to require loans for specu
lative purposes to be gradually reduced;
Second. That the banks be required to demand increased
margins on such.loans;
Th rd. That the banks be invited to raise the rate on such
speculative loans, and not raise the rates on loans upon which
the manufacturer, the commercial, and industrial life of the
Nation depend; and
Fourth. That the banks he invited and required to refuse new
speculative loans on investment securities.
xM dear Governor, the bondholders of the United States have
y
already suttered a loss in the market value of their bonds of
over .$2,000,000,000. Bonds which they bought as a patriotic
duty; bonds which they bought on borrowed money; bonds
which they bought at a sacrifice.
The Government should not through its own agencies destroy
the value of these securities by pursuing a policy bf raising the
] 2011 — 2:1227
interest rates, and I beg you. and I beg the board through you,
to change this policy.
Moreover, my dear Governor, I call your attention to the
unpardonable and scandalous practice of the usurious charges
current in New York City, where on call loans, the stockexchange collateral, the rates have been running as high as 30
per cent. I enter my solemn protest against this, and on behalf
of the people of my State and the people of the United States
1 call upon the Federal Reserve Board to put an end to this
nefarious practice which sets a false standard to the people
of the United States in the matter of interest rates, and which
has been used to justify the Federal Reserve Board to raise
the rates on the whole country for the avowed purpose of stop
ping speculation when no such remedy was necessary.
Yours, very respectfully,
R o b e r t L. O w e n .
E x h ib it
U
C.
n it e d
S
ta te s
S
e n a te
,
. Mai/ l), 1920.
Hon. \V. P. G. H arding.
Governor Federal Reserve Board. 1Yashington, I). C.
M y D ear G o vernor : I thank you for your letter of May 3,
answering my letter of April 27. in which I urged the Federal
Reserve Board to lower the interest rates of the reserve banks
as a means of helping to restore Liberty bonds to par.
r he Secretary of the Treasury and every agency of the Gov
l
ernment, including the reserve banks and the member banks,
cooperated in a strenuous drive to induce the American people
to buy Liberty bonds. The people were told to buy the bonds
until it hurt. They sold their property, they borrowed money,
they mortgaged their homes to buy these bonds on the assur
ance of the Secretary of the Treasury that there was no better
security, and they had a right to believe that these bonds
would be maintained at par. But, my dear Governor, if vou
ponnit these high rates of interest, of which I have justly
complained, the inevitable consequence will he that these Gov
ernment bonds must go still lower than they are now instead
of reacting to par.
The violent fluctuating high interest rates on the New York
Stock Exchange which go from 8 to 30 per cent, advertised
throughout the country in every important paper in the land,
together with the high interest rates of the Federal reserve
banks to member banks at 6 and 7 per cent, and the conse
quent higher commercial rates daily advertised in the pubi c
press of 8, 9, and 10 per cent, not to mention commissions on
the side and discounts, are jointly impairing confidence and
creating an atmosphere of suspicion, distrust, and widespread
talk of pending industrial depression and industrial panic.
I have insisted that the powers of the Government should
be exercised through the office of the Federal Reserve Board,
the Federal reserve banks, and the Comptroller of the Currenev
to remove these causes, which, if persisted in, may cause ;
serious industrial depression and make Liberty bonds go stil
iberty
still
lower.
12611— 23227
m
15
it"
The claim of tlie New York Stock Exchange that these high
and violently fluctuating interest rates on call loans are neces
sary for the purpose of preventing speculation is indefensible,
because they do not prevent speculation. The professional
operator immediately speculates in a bear market, which in
evitable must follow these artificial high interest rates. The
speculator can afford to pay high interest rates, but legitimate
business can not. Moreover, the employment of bank credits
for speculation can be prevented by harmless methods: First,
by (he banks refusing new loans for speculative purposes; sec
ond, by requiring gradual liquidation of old loans employed in
speculation; and, third, by raising the margin on speculative
loans.
The remedies I suggest are harmless to the general public.
The remedy employed of high interest rates on call loans run
ning up to 30 per cent is destructive of public confidence and
threatens industrial depression.
When the Reserve Board raises the rate to 6 and 7 per cent
it has the effect not of stopping the speculator but of stopping
legitimate business, and putting the brakes on manufacture,
commerce, agriculture, on production and distribution.
You quite misunderstand the point when you speak of my
contention that the Liberty bond market recently fell because
the Federal Reserve Board raised the rate of interest, which
you think is disproved by the fact that the bonds fell in April,
1919, to 9o before tbe Federal Reserve Board raised the rate of
interest. My contention is that the high rates of interest on the
stock exchange and the high rates charged by member banks
on commercial loans based in part on the high rates of the
reserve banks, are all factors producing this result, and when
the Reserve Board recently raised the rate these bonds went
down much lower than they had been before, and they must
go lower still if the board persist in this policy. What I con
tend is that the Federal Reserve Board in raising these rates,
and thus adopting the unwise policy of the stock exchange, is
depreciating the market value of all securities, including Gov
ernment bonds.
I understand the Reserve Board desires to deflate credit by
raising the rates of interest. Assuredly raising the rates of
interest will deflate credits, even the credits of the United
States, of which I complain, but I am anxious the Reserve
Board shall only deflate those credits that require deflation and
not deflate credits of the Government and of legitimate pro
ductive business, which ought not to be deflated.
The United States was compelled to expand its credits, and
issued $26,000,000,000 of war bonds. The war resulted in an
increase of $20,000,000,000 of bank deposits, a total increase
, of expanded credits of $46 000,000,000. No substantial part of
these credits should be deflated at this time. The only defla
tion of credit justified is the deflation of credits employed in
speculative loans on investment securities, on real estate, and
on commodities for hoarding by profiteers.
My dear governor, it seems to me that there is some serious
misconception existing in the country with regard to what is
inflation and what is not inflation. I am certainly opposed to
inflation, but I am strongly in favor of the extension of busi12011— 23227
ness, increasing production, and improving distribution by ex
tending credits on a stable low-interest rate.
The expansion of credit for such purposes is justified, but, of
course, the expansion of credit beyond the available resources,
even for the most important of purposes, is not justified. The
Bank of England, conducted by the wisest merchants in the
world, has not hesitated to extend credits for productive pur
poses even when the gold reserve was thereby seriously dimin
ished. As you very well know, they went to a very low gold
reserve during the war without ever denying credits to their
business men who were engaged in legitimate industry. The
London merchants had 3J per cent acceptance rates all during
the war, when the British Government paid 5 per cent.
If the people are frightened by the talk of industrial depres
sion. by high interest rates, it has the effect of preventing pro
duction and putting the brakes on manufacture and on our en
tire industrial life.
I do not agree with Secretary Leffingwell that the present
depression in Liberty bonds is due to the owners o f Liberty
bonds spending the bonds recklessly as spendthrifts. People
who bought Liberty bonds do not deserve such a classification,
although, of course, some individuals out of a very great num
ber are spendthrifts. But the spendthrift quickly parts with
his bonds to other people. The spendthrift theory does not
explain the terrible depreciation.
If money was cheap and credits were available at low rates,
it is perfectly obvious that these bonds would go to par, and just
in degree that the banks of the country raise the rates to very
high artificial figures to that degree the Liberty bonds and
Victory bonds will assuredly fall in market value.
You advise me that the Liberty bonds “ can not be brought
back to par by artificial methods.” They can be depressed by
universal high rates of interest artificially fixed by the banks,
and that is precisely what has happened and to which I earn
estly object.
I do not say that the Federal reserve banks can restore these
bonds to par by lending a part of their resources on these bonds
at a low figure. What I do say is that the value of these bonds
is depressed by tli§ action of the Government in countenancing
the scandalous interest rates on the New York Stock Exchange,
the unreasonable interest rates by the member banks of the
country, and the unfair interest rates by the reserve banks to
the member banks.
You very justly say, my dear governor:
“ There is a world-wide demand for capital, and the demand
for bank credit in this country in agricultural, commercial, and
industrial purposes is heavier than has ever been known before;
investment demands for new construction, for the maintenance
and equipment of railroads, and for the financing of our foreign
trade are very great.”
Are these just demands to be met by denying the credits, or
are they to be repressed by raising the rates to prohibitive
points, and thus retard enterprise and production, the employ
ment of labor and capital in creating commodities?
You say the reserve banks would have been “ overwhelmed
with applications for loans” on Government securities if the
12611— 2:5227
17
reserve banks had continued to offer a low discount rate on
paper secured by Government obligation.
I am not advocating the reserve banks lending beyond their
resources at any rates or on any securities. I am protesting
against the reserve banks setting a bad example to the country
by raising the rates of interest on legitimate business engaged
in production and distribution. I am objecting, my dear gov
ernor, to the reserve board taking advantage of this condition
and raising these rates merely because the demand is urgent,
when the proper function of the Federal reserve bank is to
stabilize the interest rate, keep it at a reasonably low figure,
and set a wise and just example to the member banks.
The member banks pay from 2 to 4 per cent for deposits and
normally let their money out at from 5 to 7 per cent, with a
margin of about 3 per cent. The reserve banks pay no interest
on deposits, and 3 per cent is a rate high enough to enable them
to make all the money they are entitled to make out of the
public. On a 4 per cent rate the Federal Reserve Bank of New
York last year made 110 per cent, and I suppose oh a 6 and 7
per cent rate they will make this year about 160 per cent.
This is precisely what I am objecting to. The Federal reserve
banks should not be put in the attitude of profiteering or of
setting the example of profiteering to member banks. The
powers of the Government are not being properly exerted to
stop the scandalous rates of interest on the New York Stock
Exchange.
1 was advised that six months ago the New York banks had
nineteen hundred million dollars loaned on investment securi
ties and the commerce of the country was suffering for credit.
I believe, with the board, that these credits on investment
securities and speculative loans should be diverted, as far as
practicable, to productive purposes, but to raise the rates to 6
and 7 per cent upon all banks alike does not accomplish this end.
It merely penalizes all business of every kind and character,
regardless of whether they are using their credits for specula
tive or productive purposes.
What I earnestly desire to call to the attention of the board
is that credits ought to be extended at a low rate to the extent
of the capacity of the reserve banks for productive purposes;
that member banks should be urged to do the same thing, and
that the powers of the Government should be exerted against
the excessive, violently fluctuating rates on the New York Stock
Excha nge.
Hoping that the suggestions which I have the honor to make
may be of some service to the deliberations of the board and to
the country, I remain,
V e r y r e s p e c tfu lly , y o u r s ,
12011— 23227
o
R
obt.
L. O
w en
.
CLEMENCEAU AND FRENCH POLICY
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN THE
SENATE OF THE UNITED STATES
NOVEM BER 27, 1922
W A S H IN G T O N
governm ent
21508—23341
p r in t in g
1922
o f f ic e
CLEMENCEAU AND FRENCH POLICY.
Mr. OWEN. Mr. President, M. Clemenceau is a greatly hon
ored former Premier of-France. He comes evidently with the
approval of the French Government and with world-wide pub
licity announcing his coming. He has arrived in New York and
been received with great cordiality by citizens of the United
States on a mission of importance.
He comes making an appeal to America. He thinks we left
Europe without sufficient cause and that we left too soon. He
desires the American Government, with the backing of the
American people, to take part in restoring distracted Europe,
and says that he does not know what he wants us to do, but
he wants our help, and he wants it at once, and lie thinks we
may have an armchair at Lausanne if we ask for a seat at that
conference.
It seems worth while to submit an observation upon this visit
of M. Clemenceau and to call his attention and the attention of
the French people and of the people of Europe to what I believe
to be the principal causes of the present disturbed condition of
Europe and the only practical remedies by which their pros
perity can be promptly restored.
The visit of M. Clemenceau may be of great value if it shall
lead to the discussion of these matters frankly, honestly, and
fearlessly.
We keenly and deeply sympathize with the French people, with
their great sufferings. We have deplored the wanton invasion of
France by the German military dynasty in 1871 and the more
cruel invasion by the same forces in 1914.
We know how cruelly they have suffered from the German
invasion. We have waiked over many places in the devastated
areas. We have seen the ruined cities and villages and are very
sympathetic with them in promoting their future security,
peace, and prosperity, and if mistakes in judgment are made
by leaders of French opinion it should be remembered that
similar mistakes are made by other leaders of all the nations
of the earth and that such mistakes should be considered with
patience and moderation. The French people, like the people
of other nations, should not be made responsible for the error
of their leadership if there be error, as we think there has
been, and Clemenceau’s visit will help to clear the atmosphere
because now we can discuss these questions more serenely than
when the differences occurred.
21508— 2334J
8
+hlV, » i r f ? e ai Wide. (listinction between the German people and
the military dynasty which governed the German people regard
less oi the consent of the governed. We do not mean bv this that
any ?pen revolt of the German people against this
yerwhelmmg, dominating governing power, because there was
little or none, but we can not help but think of the utterly helpess attitude of the young men of Germany when they were
called to the colors by the order of mobilization of Wilhelm II.
A young German had his option of responding to this call
promptly, efficiently, faithfully, or facing a German court-mar
ia and a bring squad. A German boy had no option except to
come, ana when he came he had his choice of coming singing
or weeping. He chose to sing and to come and do his utmost
Z°
a vict01'y under the German flag which he had been
aught to love and to revere as the badge o f a happy, honorable
father an, • b e answered the voice of patriotism; he followed
the only leadership he knew, and with- infinite pathos went to
ns young death. Seven millions of the German youth fell in
battle, and the Imperial Government finally met with a crush
ing defeat at the hands of those who loved justice and libertv
throughout the world.
With the young soldiers of other lands—of France, of Britain,
of Italy -it was the same. The Fatherland called; thev came,
they fought, they died for what they believed to be their duty
to Fatherland.
Clernenceau senses correctly that American opinion has been
slowly growing to be unsympathetic with the leadership of
xance. There is a profound cause for it which ought to be
explained to the French people. For this reason these observa
tions are submitted to the public records in order that French
leaders may realize why the United States has withdrawn from
Furope and does not wish to return until the European leaders
exhibit a heartfelt respect for the opinions of America.
The American opinion was expressed in the address of the
President of the United States of April 2, 1917, when he advised
the Congress of the United States that the time had arrived
to enter the World AVar. This address to the Congress of the
United States was the culmination of German aggression and
of confeiences which had taken place between the representa
tives of the Entente Allies and the authorities of the United
.States and the principles for which we entered this war were
then acquiesced in and applauded by the leaders of the Entente
Allies and they are bound morally and ethically and under the
principle of right to support these doctrines upon which we
entered the war in cooperation with them, they declaring at
the same time that they were moved by the same principles
What were these principles, Mr. President? Woodrow Wil
son stated them in his message of April 2, 1917, when he said
(C ongressional R e c o r d , vol. 55, p . 103) :
Our object now, as then, is to vindicate the principles of peace and
nnworCan\ V‘e * e
worlcl as against selfishness and autocratic
power and to set up amongst the really free and self-governing people
of the world such a ^pncert of purpose and of action as will henceforth
assure the observance of these principles * * *
chWeo lre af tl]° g in n in g of an age in which it will be insisted that
!hnn . e !ftandar.<s 01 conduct and of responsibility for wrong done
shall be observed among nations and their governments that are
observed among the individual cirizens of several states
1
21508— 23341
‘
;>
We have no quarrel with the German people. We have no feeling
toward them but one of sympathy and friendship. It was not upon
their impulse that their Government anted in entering this war. It
was not with their previous knowledge or approval. It was a war
determined upon as wars used to be determined upon in the old, un
happy days when peoples were nowhere considered by their rulers and
wars were provoked and waged in the interest of dynasties or of little
g oups of ambitious men who were accustomed to use their fellow men
as p ’ wns and tools.
Woodrow Wilson pointed out tlie impossibility of friendship
with the Prussian autocracy, its secret methods, its spies, ita
intrigues, its ambitious and greedy purposes, and he said *
t We are accepting this challenge of hostile purpose because we know
that in such a Government, following such methods, we can never
have a friend ; and that in the presence of its organized power, always
lying in wait to accomplish we know not what purpose, there can be
no assured security for the democratic governments of the world. We
are now about to accept gauge of battle with this natural foe to
liberty and shall, if necessary, spend the whole force of the Nation to
check and nullify its pretensions and its power. We are glad now that
we see the facts with no veil of false pretense about them to fight
thus for the ultimate peace of the world and for the liberation of its
peoples, the German iieoples included ; for the rights of nations, great
and small, and the privilege of men everywhere to choose their way of
life and of obedience. The world must be made safe for democracy.
Its peace must be planted upon the tested foundations of political
liberty. We have no selfish ends to serve. W e desire no conquests,
T
no dominion. We seek no indemnities for ourselves, no material com
pensation for the sacrifices we shall freely make. We are but one of
the champions of tne rights of mankind. We shall be satisfied when
those rights have been made as secure as the faith and the freedom of
nations can make them.
We spent $40,000,000,000 and we asked no indemnities what
ever. We asked no territory. We lost tens of thousands of
our best beloved youth to establish these principles, and we
only asked justice for all peoples, Germans as well as French,
Turks as well as British. We have been disappointed.
We are not content to see them disregarded by the Entente
Allies in any respect. We had a right and we have a right
now to expect and to demand recognition of these broad prin
ciples of justice as a condition of the further cooperation which
Clemenceau now desires.
There should never be forgotten the conditions upon which
the armistice of November 11, 1918, was sought and obtained.
These conditions represented the views of the Government of
the United States, voiced by the President of the United States,
not only with the approval of the American people and of Con
gress but approved by the British Government and the French
Government and the Entente Allies. These conditions were
transmitted to the German Government and the German people
through the Swiss minister by Robert Uansing, the Secretary
of State of the United States, on the 5th of November, 1918,
which I ask to have printed in the R ecord in 8-point type.
T h e r e b e in g n o o b j e c t i o n , t h e m a t t e r w a s o r d e r e d
p r i n t e d in t h e R e c o r d in 8 -p o i n t t y p e , a s f o l l o w s :
to
be
“ Sir : I have the honor to request you to transmit the follow
ing communication to the German Government:
“ In my note of October 23, 1918, I advised you that the
President had transmitted his correspondence with the German
authorities to the Governments with which the Government of
the United States is associated as a belligerent, with the sug
gestion that, if those Governments were disposed to effect peace
2 150 8— 23341
“ The President is now in receipt of a memorandum of ob
servations by the allied Governments on this correspondence,
which is as follow s:
“ ‘ The allied Governments have given careful consideration
to the correspondence which has passed between the President
of the United States and the German Government. Subject to
the qualifications which follow, they declare their willingness to
make peace with the Government of Germany on the terms
of peace laid down in the President’s address to Congress of
January, 1918, and the principles of settlement enunciated in
his subsequent addresses. They must point out, however, that
clause 2, relating to what is usually described as the freedom
of the seas, is open to various interpretations, some of which
they could not accept. They must, therefore, reserve to them
selves complete freedom on this subject when they enter the
peace conference.
“ ‘ Further, in the conditions of peace laid down in his ad
dress to Congress of January 8, 1918, the President declared
that invaded territories must be restored as well as evacuated
and freed, and the allied Governments feel that no doubt ought
to be allowed to exist as to what this provision implies. By
it they understand that compensation will be made by Germany
for all damage done to the civilian population of the Allies
and their property by the aggression of Germany by land, by
sea, and from the air.’ ”
Mr. OWEN. The allied governments gave careful consider
ation to this correspondence between the President and the
German Government, and they declared to the President of the
United States that they were willing to make peace with the
Government of Germany on the terms of the peace laid down
in the President’s address to Congress of January 8, 1918, and
the principles of settlement enunciated in his subsequent ad
dresses. Some of the 14 points and principles they did carry
out, but in many instances and in details they failed to carry
them out and pursued a contrary policy, a policy calculated to
injure the German people commercially and financially, and
violated the agreement to permit Germany to have “ a place of
equality among the peoples of the world.”
It was this address of the President of the United States of
January 8, 1918, and the 14 points which appealed to the Ger
man people as people, and we took infinite pains to have this
address of the President of the United States scattered by air
planes behind the German lines and to give for it publicity
among the German people, and these German people had a
right to rely, not only upon the good faith of the United States
Government and the good faith of the people of the United
States, but they had a right to rely upon the good faith of the
2 1 5 0 8 — 23 3 4 1
7
Governments of the Entente Allies and of the people of the
Entente Allies to carry out the principles upon which the armis
tice was based.
The German Government and the German people accepted
these conditions and laid down their arms. It became a bind
ing contract of honor made upon the battle field, binding France
and the Entente Allies and Germany alike. A failure to carry
out the terms of the contract has been followed by evil conse
quence.
The President’s address to Congress of January 8 is of such
importance in construing this agreement on the part of the
United States and the Entente Allies with the German Govern
ment that I think it is proper to present it again, and I ask to
h a v e it printed in the R e c o r d in 8-point type.
There being no objection, the matter was ordered to be
printed in the R e c o r d in 8-point type, as follow s:
PRESIDENT WILSON’ S ADDRESS TO CONGRESS JANUARY 8, 1918.
“ Gentlemen of the Congress, once more, as repeatedly before,
the spokesmen of the Central Empires have indicated their de
sire to discuss the objects of the war and the possible bases of
a general peace. Parleys have been in progress at BrestLitovsk between Russian representatives and representatives
of the Central Powers, to which the attention of all the bel
ligerents has been invited for the purpose of ascertaining
whether it may be possible to extend these parleys into a gen
eral conference with regard to terms of peace and settlement.
The Russian representatives presented not only a perfectly
definite statement of the principles upon which they would be
willing to conclude peace, but also an equally definite pro
gram of the concrete application of those principles. The
representatives of the Central Powers, on their part, presented
an outline of settlement which, if much less definite, seemed
susceptible of liberal interpretation until their specific pro
gram of practical terms was added. That program proposed
no concessions at all, either to the sovereignty of Russia or
to the preferences of the populations with whose fortunes it
dealt, but meant, in a word, that the Central Empires were to
keep every foot of territory their armed forces had occupied—
every Province, every city, every point of vantage—as a per
manent addition to their territories and their power. It is a
reasonable conjecture that the general principles of settlement
which they at first suggested originated with the more liberal
statesmen of Germany and Austria, the men who have begun
to feel the force of their own peoples’ thought and purpose,
while the concrete terms of actual settlement came from the
military leaders, who have no thought but to keep what they
have got. The negotiations have been broken off. The Russian
representatives were sincere and in earnest. They can not
entertain such proposals of conquest and domination.
“ The whole incident is full of significance. It is also full of
perplexity. With whom are the Russian representatives deal
ing? For whom are the representatives of the Central Empires
speaking? Are they speaking for the majorities of their re
spective parliaments or for the minority parties, that military
and imperialistic minority which has so far dominated their
2 1 508— 23341
whole policy and controlled the affairs of Turkey and of the
Balkan States which have felt obliged to become tlieir associates
in the war? The Russian representatives have insisted, very
justly, very wisely, and in the true spirit of modern democracy,
that the conferences they have been holding with the Teutonic
and Turkish statesmen should be held within open, not closed,
doors, and all the world has been audience, as was desired. T o
whom have we been listening, then? To those who speak thespirit and intention of the resolutions of the German Reichstag
of the 9th of July last, the spirit and intention of the liberal
leaders and parties of Germany, or to those who resist and
defy that spirit and intention and insist upon conquest and
subjugation? Or are we listening, in fact, to both, unreconciled
and in open and hopeless contradiction ? These are very serious
and pregnant questions. Upon the answer to them depends the
peace of the world.
“ But, whatever the results of the parleys at Brest-Litovsk,
whatever the confusions of counsel and of purpose in the utter
ances of the spokesmen of the Central Empires, they have again
attempted to acquaint the world with their objects in the war
and have again challenged their adversaries to say what their
objects are and what sort of settlement they would deem just
and satisfactory. There is no good reason why that challenge
should not be responded to, and responded to with the utmost
candor. We did not wait for it. Not once, but again and
again, we have laid our whole thought and purpose before the
world, not in general terms only, but each time with sufficient
definition to make it clear what sort of definitive terms of set
tlement must necessarily spring out of them. Within the last
week Mr. Lloyd-George has spoken with admirable candor and
in admirable spirit for the people and Government of Great
Britain. There is no confusion of counsel among the adver
saries of the Central Powers, no uncertainty of principle, no
vagueness of detail. The only secrecy of counsel, the only lack
of fearless frankness, the only failure to make definite state
ment of the objects of the war, lies with Germany and her
allies. The issues of life and death hang upon these defini
tions. No statesman who has the least conception of his re
sponsibility ought for a moment to permit himself to continue
this tragical and appalling outpouring of blood and treasure
unless he is sure beyond a peradventure that the objects of the
vital sacrifice are part and parcel of the very life of society,
and that the people for whom he speaks think them right and
imperative as he does.
“ There is, moreover, a voice calling for these definitions of
principle and of purpose which is, it seems to me, more thrilling
and more compelling than any of the many moving voices with
which the troubled air of the world is filled. It is the voice of
the Russian people. They are prostrate and all but helpless, it
would seem, before the grim power of Germany, which has
hitherto known no relenting and no pity. Their power, appar
ently, is shattered. And yet their soul is not subservient. They
will not yield either in principle or in action. Their concep
tion of what is right, of what it is humane and hoi. .able for
them to accept, has been stated with a frankness, a largeness of
view, a generosity of spirit, and a universal human sympathy
21508— 23341
9
which must challenge the admiration of every friend of man
kind ; and they have refused to compound their ideals c desert
others that they themselves may be safe. They call to us to say
what it is that we desire, in what, if in anything, our purpose
and our spirit differ from theirs; and I believe that the people
of the United States would wish me to respond with utter
simplicity and franknesss. Whether their present leaders be
lieve it or not, it is our heartfelt desire and hope that some way
may be opened whereby we may be privileged to assist the peo
ple of Russia to attain their utmost hope of liberty and ordered
peace.
“ It will be our wish and purpose that the processes of peace,
when they are begun, shall be absolutely open and that they
shall involve and permit henceforth no secret understandings
of any kind. The day of conquest and aggrandizement is gone
b y ; so is also the day of secret covenants entered into in the in
terest of particular governments and likely at some unlookedfor moment to upset the peace of the world. It is this happy
fact, now clear to the view of every public man whose thoughts
do not still linger in an age that is dead and gone, which makes
it possible for every nation whose purposes are consistent with
justice and the peace of the world to avow now or at any other
time the objects it has in view.
“ We entered this war because violations of right had occurred
which touched us to the quick and made the life of our own
people impossible unless they were corrected and the world
secured once for all against their recurrence. What we demand
in this war, therefore, is nothing peculiar to ourselves. It is
that the world be made fit and safe to live in ; and particularly
that it be made safe for every peace-loving nation which, like
our own, wishes to live its own life, determine its own institu
tions, be assured of justice and fair dealing by the other peoples
of the world as against force and selfish aggression. All the
peoples of the world are in effect partners in this interest, and
for our own part we see very clearly that unless justice be done
to others it will not be done to us. The program of the world’s
peace, therefore, is our program; and that program, the only
possible program, as we see it, is th is:
“ I. Open covenants of peace, openly arrived at, after which
there shall be no private international understandings of any
kind, but diplomacy shall proceed always frankly and in the
public view.
“ II. Absolute freedom of navigation upon the seas, outside
territorial waters, alike in peace and in war, except as the
seas may be closed in whole or in part by international action
for the enforcement of international covenants.
“ III. The removal, so far as possible, of all economic barriers
and the establishment of an equality of trade conditions among
all the nations consenting to the peace and associating them
selves for its maintenance.
“ IV. Adequate guaranties given and taken that national
armaments will be reduced to the lowest point consistent with
domestic needs.
“ V. A free, open-minded, and absolutely impartial adjust
ment of all colonial claims, based upon a strict observance of
the principle that in determining all such questions of sov2 1 5 0 8 — 2 3 3 4 1 -------- 2
\
ereignty the interests o f the populations concerned must have
equal weight with the equitable claims of the Government
whose title is to be determined.
“ VI. The evacuation of all Russian territory and such a settle
ment o f all questions affecting Russia as will secure the best and
freest cooperation of the other nations of the world in obtaining
for her an unhampered and unembarrassed opportunity for the
independent determination of her own political development and
national policy and assure her of a sincere welcome into the
society of free nations under institutions of her own choosing;
and, more than a welcome, assistance also of every kind that she
may need and may herself desire. The treatment accorded
Russia by her sister nations in the months to come will be the
acid test of their good will, of their comprehension of her needs
as distinguished from their own interests, and of their intelli
gent and unselfish sympathy.
“ VII. Belgium, the whole world will agree, must be evacuated
and restored, without any attempt to limit the sovereignty
which she enjoys in common with all other free nations. No
other single act will serve as this will serve to restore confidence
among the nations in the laws which they have themselves set
and determined for the government of their relations with one
another. Without this healing act the whole, structure and
validity of international law is forever impaired.
“ VIII. All French territory should be freed and the invaded
portions restored, and the wrong done to France by Prussia in
1871 in the matter of Alsace-Lorraine, which has unsettled the
peace of the world for nearly 50 years, should be righted, in
order that peace may once more be made secure in the interest
of all.
“ IX. A readjustment of the frontiers of Italy should be ef
fected along clearly recognizable lines of nationality.
“ X. The peoples of Austria-Hungary, whose place among the
nations we wish to see safeguarded and assured, should be ac
corded the freest opportunity of autonomous development.
“ XI. Rumania, Serbia, and Montenegro should be evacuated;
occupied territories restored; Serbia accorded free and secure
access to the sea; and the relations of the several Balkan states
to one another determined by friendly counsel along historically
established lines of allegiance and nationality; and international
guaranties of the political and economic independence and terri
torial integrity of the several Balkan states should be entered
into.
“ X II. The Turkish portions of the present Ottoman Empire
should be assured a secure sovereignty, but the other nationali
ties which are now under Turkish rule should be assured an
undoubted security of life and an absolutely unmolested oppor
tunity of autonomous development, and the Dardanelles should
be permanently opened as a free passage to the ships and com
merce of all nations under international guaranties.
“ X III. An independent Polish State should be erected which
should include the territories inhabited by indisputably Polish
populations, which should be assured a free and secure access
to the sea, and whose political and economic independence and
territorial integrity should be guaranteed by international cove
nant.
21508— 23341
11
“ X I V . A g e n e r a l a sso c ia tio n o f n a tio n s m u st b e fo r m e d u n d e r
s p e c ific c o v e n a n t s f o r t h e p u r p o s e o f a f f o r d i n g m u t u a l g u a r a n
t e e s o f p o l i t i c a l i n d e p e n d e n c e a n d t e r r i t o r i a l i n t e g r i t y t o sn-eat
a n d s m a ll S t a t e s a lik e .
“ I n r e g a r d to th e s e e s s e n tia l r e c tific a tio n s o f w r o n g a n d a s s e r
tio n s o f r ig h t w e fe e l o u r s e lv e s to b e in tim a te p a r tn e r s o f a ll
th e g o v e r n m e n ts a n d p e o p le s a s s o c ia te d to g e th e r a g a in s t th e
im p e r ia lis ts .
W e c a n n o t b e s e p a r a t e in i n t e r e s t o r d i v i d e d
in p u r p o s e .
W e s ta n d to g e th e r u n til th e e n d .
“ F o r s u c h a r r a n g e m e n t s a n d c o v e n a n t s w e a r e w i l l i n g t o fig h t
a n d t o c o n t i n u e t o f ig h t u n t i l t h e y a r e a c h i e v e d ; b u t o n ly b e
c a u s e w e w i s h t h e r i g h t to p r e v a i l a n d d e s ir e a j u s t a n d s t a b l e
p e a c e s u c h a s c a n b e s e c u r e d o n ly b y r e m o v i n g t h e c h i e f p r o v o
c a t i o n s t o \ t a r , w h ic h t h i s p r o g r a m d o e s r e m o v e .
W e have
n o j e a l o u s y o f G e r m a n g r e a t n e s s , a n d t h e r e i s n o t h i n g in t h 's
p r o g r a m t h a t i m p a i r s it .
W e g r u d g e h er n o a c h ie v e m e n t o r
d i s t i n c t i o n o f l e a r n i n g o r o f p a c if ic e n t e r p r i s e s u c h a s h a v e
m a d e h e r r e c o r d v e r y b r ig h t a n d v e r y e n v ia b le .
W e do not
w i s h t o i n j u r e h e r o r t o b lo c k in a n y w a y h e r l e g i t i m a t e i n
f lu e n c e o r p o w e r .
W e d o n o t w i s h t o f ig h t h e r e i t h e r w it h a r m s
o r w ith h o s tile a r r a n g e m e n ts o f tr a d e i f sh e is w illin g to a s s o
c i a t e h e r s e l f w i t h u s a n d t h e o t h e r p e a c e -l o v i n g n a t i o n s o f t h e
w o r l d in c o v e n a n t s o f j u s t i c e a n d l a w a n d f a r d e a l i n g .
W e
w i s h h e r o n l y t o a c c e p t a p la c e o f e q u a l t y a m o n g t h e p e o p le s
o f t h e w o r l d — t h e n e w w o r l d in w h i c h w e n o w l i v e — i n s t e a d o f
a p la c e o f m a s t e r y .
“ N e it h e r d o w e p r e s u m e to s u g g e s t to h e r a n y a lte r a tio n o r
m o d ific a tio n o f h e r in s titu t io n s .
B u t i t is n e c e s s a r y , w e m u s t
f r a n k ly s a y , a n d n e c e s s a r y a s a p r e lim in a r y to a n y in te llig e n t
d e a l i n g s w i t h h e r o n o u r p a r t , t h a t w e s h o u ld k n o w w h o m h e r
s p o k e s m e n s p e a k f o r w h e n t h e y s p e a k to u s , w h e t h e r f o r t h e
It e ic h s t a g m a jo r it y o r f o r th e m ilit a r y p a r ty a n d th e m e n
w h o s e c r e e d is i m p e r i a l d o m i n a t i o n .
“ W e h a v e s p o k e n n o w , s u r e l y , in t e r m s t o o c o n c r e t e t o a d m i t
o f a n y fu r t h e r d o u b t o r q u e s tio n .
A n e v i d e n t p r i n c ip le r u n s
t h r o u g h t h e w h o le p r o g r a m I h a v e o u t li n e d .
I t is t h e p r i n
c ip le o f ju s t ic e to a ll p e o p le s a n d n a t io n a lit ie s , a n d th e ir
r ig h t to liv e on e q u a l te r m s o f lib e r ty a n d s a f e t y w ith on e
a n o th e r, w h e th e r th e y b e s tro n g or w e a k .
U n le s s th is p r in
c ip le b e m a d e i t s f o u n d a t i o n , n o p a r t o f t h e s t r u c t u r e o f in t e r
n a tio n a l ju s t ic e c a n s ta n d .
T h e p e o p le o f th e U n ite d S t a t e s
c o u ld a c t u p o n n o o t h e r p r i n c i p l e ; a n d t o t h e v i n d i c a t i o n o f
t h i s p r i n c i p l e t h e y a r e r e a d y t o d e v o t e t h e i r li v e s , t h e i r h o n o r ,
a n d e v e r y th in g th a t th e y p o sse ss.
T h e m o r a l c lim a x o f th is
t h e c u l m i n a t i n g a n d fin a l w a r f o r h u m a n l i b e r t y h a s c o m e , a n d
th e y a r e r e a d y to p u t t h e ir o w n s tr e n g th , th e ir o w n h ig h e s t
p u r p o s e , t h e i r o w n i n t e g r i t y a n d d e v o t i o n t o t h e t e s t .”
M r. O W E N .
B y e v e r y p r i n c i p le o f c o m m o n h o n e s t y t h e
U n ite d S ta te s a n d th e E n te n te A llie s w ere b ou n d b y th e 14
p o i n t s , w h i c h w e r e n o t c a r r i e d o u t in g o o d f a i t h .
C le m e n e e a u
h im s e lf w a s q u o te d a s d e r id in g th e 14 p o in ts a f t e r th e fr u it s
o f t h is g g a n t ic d e c la r a tio n o f p r in c ip le h a d b e e n o b ta in e d
th r o u g h th e a r m is tic e a n d th e G e r m a n G o v e r n m e n t h a d s u r
r e n d e r e d a n d w a s d is a r m e d .
A f t e r t h e G e r m a n s w e r e d i s a r m e d , C l e m e n e e a u w a s q u o t e d in
t h e p u b li c p r e s s a s s a y i n g t h a t “ M o s e s o n ly l a i d d o w n T e n C o rn 2 1 5 0 8 — 23 3 4 1
I!
mandments and Woodrow Wilson laid down 14 commandments.”
How witty and merry. How thoughtless and destructive. Moses
led the Children of Israel out of the wilderness with the Ten
Commandments, and the American people would have led the
children of Europe out of the wilderness with the 14 points
if leaders like Clemenceau, Lloyd-George, and others had, in
perfect good faith, carried out these principles and covenants
on which the surrender of the Germans was obtained.
But the Entente leaders have not carried them out. They
wrote a treaty of victory and imposed conditions some of which
are now believed to be impossible of fulfillment, and others
which contain the seeds of future war and which were and are
in flat violation of various of these pledges of the 14 points.
It is not necessary to regard Clemenceau and Lloyd-George
as being willfully unfaithful because of this breach of faith in
carrying out the 14 points. They are merely human beings,
with human frailty, controlled by their environment, represent
ing the leaders behind them and voicing the language of the
old diplomacy of Europe, the diplomacy of strategic boundaries,
of brute force, and of commercial advantages on land and sea.
Blind leaders of the blind, piling up disaster and war from
their failure to recognize the fundamental principles of justice
between nations, every one of whom is equally entitled to life,
liberty, the pursuit of happiness, the right to manage its own
affairs in its own way, and the right to international under
standing and good will and the means to make these rights
effective.
We have no sympathy with the abuse of the German people,
the Russian people, the Turkish people by Clemenceau any
more than of the British or French people by the Germans.
The 14 points represented the new order of reliance on
justice and international good will rather than the old order,
a reliance alone upon brute force.
The group behind Clemenceau put their faith in brute force,
and therefore at Paris and Versailles they carried on a vigor
ous, strenuous campaign for the purpose of building up material
forces which would strengthen France and weaken Germany,
regardless of the principles of justice, in carrying out the 14
points to which they were so solemnly pledged.
Against these gigantic forces of Self-interest moving the
leadership of the Entente Allies in so large a measure Woodrow Wilson stood isolated and alone at Paris, the most pa
thetic, the most tragic figure the world has ever seen in the
most gigantic crisis of all time. Woodrow Wilson went as
the advocate of principles of international good will and un
derstanding and justice and righteousness and self-government
among men. He not only had to meet these great forces of the
old order at Paris and Versailles, but even in this gigantic
struggle in which he was engaged— and which has been so
graphically portrayed by Ray Stannard Baker in his recent
volumes of Woodrow Wilson and the World Settlement—Woodrow Wilson failed to receive the support from his own coun
try which might have made it possible for him to have fully
established the new order in writing this treaty. His failure
was not due to his lack of effort, for his efforts brought him
even at Paris to the point of physical collapse. At Paris his
hands were weakened by attacks from America.
21508— 23341
___ *
1
13
In order to hold up the hands of the President in his great
struggle for justice on earth I offered the following Senate Con
current Resolution No. 17, which, without reading, I ask to have
printed in the R ec ok d in S-point type as an appendix.
The VICE PRESIDENT. Without objection, it is so ordered.
(See Appendix.)
Mr. OWEN. The Senate and the House of Representatives
acquiesced in the address of the President of January 8, 1918,
with “ prolonged applause.”
Clemenceau and Lloyd-George and the Entente leadership
wrote the treaty of Versailles, ignoring some of the important
principles of the 14 points. They broke faith with the world
and occupy in America the attitude now of asking America to
come to Europe again to relieve them of the results of their
own unwise conduct.
What do they want of America? We have a right to know.
Clemenceau and Lloyd-George wrote the treaty of Versailles
in such form and of such substance that it did not secure rati
fication by the Senate of the United States. The concessions
which they wrongfully extorted from Woodrow Wilson brought
on a violent attack on the treaty itself in America, and Ameri
can leaders asked themselves, Are we to pledge the powers of
America to carry out this treaty of greed and fear and force
framed in contravention of the 14 points, in contravention of
the principles in which America believes? Are we to be made
the instruments by which the wrongs done the conquered
peoples shall be made permanent and effective?
No, Mr. President; Clemenceau, or rather the powers behind
Clemenceau, have made a bed of thorns for themselves, and the
end is not yet.
Mr. President, we are more than anxious that America and
the American people, both for their own sakes and for the sake
of the people of Europe, should do everything in their power
to restore the European people to a condition of perfect peace
and happiness, but America can not make wrong right. Amer
ica can not be of great service to Europe until the statesmen of
Europe are willing to recognize the fundamental principles upon
which the peace and welfare of the people of the world must be
founded. The evil consequences which have been brought
upon Europe are largely due to the obsession of fear of the
French people which was used by the French leaders to build
up a program of French security by force and intrigue as
against the program of Woodrow Wilson—of international
justice and good will and the mutual guaranties of the cove
nant of the League of Nations.
The French policy as opposed to the 14 points may be briefly
summarized as follows:
(1) French military control of the Rhine.
(2) A permanent alliance of the great powers to help France
to hold it.
(3) A group of smaller allies to menace Germany from the
east.
(4) Territorial revision of the German Empire.
(5) Crippling of the German political organization.
(6) Disarmament of Germany but not of the Allies.
(7) A crushing indemnity.
21508— 23341
(8) Deprivation of economic resources.
(9) A set of commercial agreements preferential to France,
prejudicial to Germany.
(10) Germany not allowed to enter the League of Nations.
(11) Cutting off German markets, and so forth.
The French people undoubtedly have been profoundly affected
by a fear of future German aggression, and they are proposing
to make sure their future defense by breaking Germany down
by the above program, by going heavily armed, and by promot
ing the same spirit and policy in Poland, Rumania, Greece,
Belgium, and so forth. The British and the French have been
regarded as the real force behind the Greek-Turk war.
They have failed to carry out the treaty entered into at
Washington between the nations to reduce competitive naval
armaments. The French leadership is slowly isolating from the
French Government the sympathy of the world in spite of the
fact that the American people have felt a great and sentimental
friendship for the people of France. A wide distinction must
always be made between the people of a country and the govern
ing forces of a country. France is pursuing a policy which
threatens Europe with war or Bolshevism, or both, and the
sooner the French statesmen realize the error of this short
sighted policy, the better it will be for the world, and the better
it will be for the happiness and prosperity of the French
people.
If Europe receives American help it will be upon the basis
of absolute international justice, of international understand
ing of nternational good will. Perhaps Clemenceau’s visit may
open the door. I wish this venerable statesman a welcome to
Ai er ca, and hope h s visit will be pleasant and agreeable and
that it may be useful in leading to a better understanding be
tween the people of America and the people of France. America
is not going to support a policy of greed and brute force and in
justice between nations. America is going to stand for the new
order upon the face of God’s footstool. Clemenceau is believed
in America to have extorted much from Woodrow Wilson in the
treaty of Versailles in exchange for the League of Nations, but
he has not made the American people agree to the extortions,
although because of the covenant of the League of Nations a
large body of American opinion was willing to give support to
the treaty of peace, believing, as Woodrow Wilson seemed to
believe, that the principles of the covenant would in time correct
the unjust features which had been written into the treaty, as
they did do in regard to Shantung and naval armaments.
Mr. President, every human being, I suppose, is a product
of his training and environment and it is easier for an Ameri
can—living in the United States, where 48 sovereign States
live side by side in peace and happiness under a just and gen
erous Government, a Government of the people, by the people,
and for the people— to see the value of such forces as are at
work in America than it is for Clemenceau or the French
leaders to believe that peace on earth can be maintained by
moral force and that moral force is greater than physical force
and that moral force can produce physical force which will
be triumphant even in war, and yet if they should reflect upon
it they would at last be driven to concede that it was the
21508— 23341
15
moral forces behind the Entente Allies that brought bayonets
from the ends of the earth in defense of liberty and justice
and actually won the late war. The old order of European
diplomacy believed alone in military force, in strategic bound
aries, in secret covenants, in intrigue, in balances of power,
and so forth, and this doctrine has been so ground into the
mind of Clemenceau it is difficult indeed, if not impossible, for
him to understand the conquering power of the new forces
which are going to govern and make safe the world and which
have been written in the covenant of the league under the in
spiration, leadership, and sacrifice of Woodrow Wilson, whose
name, as time goes on, will rise in greater and greater dignity
and honor.
Clemenceau believes in balances of power, in alliances versus
alliances. He tells us the hope of the world is France, Great
Britain, and the United States versus Germany, Russia, and
Turkey.
Not so, my dear Clemenceau. The peace of the world is jus
tice to all nations alike, great and small, and a recognition of
the doctrine “ Turkey for the Turks, Russia for the Russian,
as well as France for the French.” Pol'tical independence
and territorial integrity for every nation. Let Great Britain
and France and Greece get out of Turkey and stay out.
Over 50 nations are now members of the League of Nations.
The injustices of Versailles should be corrected at once. Ger
many and Russia should be brought into the league. The
United States should enter the league or declare an approval
of its principles.
The principles of the 14 points should be written into the Ver
sailles treaty as agreed—and especially disarmament—down to
the limit of domestic needs, should be speedily accomplished.
The budgets should be balanced. A Federal reserve system of
Europe adopted. Gold enough to supply the system should be
advanced by the European countries with the aid of $500,000,000
of American gold. An international conference of business men
should be annually assembled with a view to increasing pro
duction and distribution of commodities and teachmg men of
all nations to know and trust each other. The economic barriers
should be removed between nations.
You can not hate a man you really know and who really
knows you.
The need of the world is mutual understanding, mutual faith,
and good will. It will lead to peace and to prosperity of ali
men. The doctrine of Christ is the true doctrine. “ Thou
shalt love thy neighbor as thyself.” If dear Clemenceau could
teach his people to turn their backs on fear and hate, even the
Germans would respond to these sentiments and America could
then do much to help Europe.
Mr. President, one of the most remarkable appeals for peace
has come with the signatures of the representatives of the
organization of European War Veterans after their participa
tion in the last annual convention of the American Legion.
Among these resolutions are the following:
That all international agreements among Governments affecting the
entire people shall be open and above board, with full publicity.
To oppose territorial aggrandizement.
That an international court be established to outlaw war.
2 1 5 0 8 — 23 3 4 1
Procee<J
rapidly as conditions permit, and when the decrees
wv,h •C rts become operative entirely disarm and disband armies
0P
and their forces and destroy the implements of warfare.
The organizations of the soldiers of the late World War can
do more to teach sanity to public leaders than, perhaps, any
other force, and I rejoice in these resolutions. They reflect the
principles of the 14 points, and go further to outlaw war.
There should be international treaties by which the invasion
of the territory of another country should be denounced as an
international high crime, punishable with death for the leaders
guilty of it, and the world ought to inflict this penalty and
teach by personal penalties stupid officials who bring about war
that they are responsible for the death of the men whom they
lead into aggressive, wrongful war, and they should suffer the
penalty of death as a righteous judgment.
The time has come for the new order, and if Clemenceau
really represents the better sentiment in Prance in saying,
Let us be good and let us be free,” the American opinion
might support America participating in the councils of Eulope for the reconstruction of Europe— but when Clemenceau
talks about “ Turkish barbarism, German revenge, and Russian
anarchy” as the problems he wishes America to help him to
solve by an alliance with Great Britain and Prance to stop the
menace of a Moslem war, the reply of America will be unsympa
thetic. We are not astonished nor shocked at the Turks driv
ing the aggressive Greeks out of their country. We are in
favor of Turkey for the Turks, of Russia for the Russians, of
Germany for the Germans, and of Prance for the French, and
opposed to any one of them invading the territory or the
rights of any other. We are in favor of the principles of the
league and the 14 points, which are binding on Clemenceau and
on the French leadership, and until they recognize these princi
ples they will have great difficulty in conciliating American
opinion.
Mr. President, we believe that the people of Europe are deeply
desirous of peace. It is the leadership of Europe that does not
seem to understand the conditions upon which peace may be ob
tained. They are pursuing policies which are stirring up hate.
If Clemenceau’s visit to this country can make that perfectly
clear to the leadership of Europe, if they will be advised from
what Clemenceau is able to learn in the United States with
regard to the true principles of government which should obtain
between nations, his visit will not have been in vain. We hope
his visit will accomplish that result.
APPENDIX.
Senate Concurrent Resolution 17, submitted by Senator Owen January
28, 1918.
Resolved by the Senate ( the House of Representatives con
curring), The United States declared a state of war existing
between the Imperial Government of Germany and the Imperial
and Royal Government of Austria and the United States be
cause of their repeated willful violations of the rights of the
people of the United States under the acknowledged principles
of international la w ; the sinking of unarmed merchant vessels
and of hospital and Red Cross ships; the destruction of the lives
of unoffending American citizens on their lawful business on the
21508— 23341
IT
high seas on many occasions; filling the United States with
spies and secret agents; conspiring the wholesale destruction of
American industries by arson, by explosions, and murder; sys
tematically promoting sedition and treason among our citizens,
and the criminal violation of our laws by the German and Aus
trian aliens residing in the United States; endeavoring to incite
the hostility and aversion of other nations against the United
States, and to persuade Mexico and Japan to make war upon the
United States, and many other wrongful acts contrary to the
laws of nations and in violation of justice and of humanity; and
for the further reason that it had finally become known to the
United States from indisputable evidence that the military mas
ters of Germany and Austria had deliberately and secretly con
spired to bring about an elaborately prepared offensive war by
which and through which they intended, first, to dominate
Europe, nation by nation, and then to dominate the other unpre
pared nations of the earth and establish a military world
dominion.
For many years past the governing powers of Germany and
Austria have by world-wide intrigue carried on a systematic
attempt to disorganize public opinion in the United States and
in the other nations of the world for the purpose of breaking
down the powers of resistance of other nations against this con
spiracy for world dominion by exciting nation against nation
and internal disorders among the nations that might oppose this
sinister design.
The United States has not forgotten that the military rulers
of Germany and Austria deliberately prevented international
agreements at the various Hague conventions for arbitration of
international differences, abatement of armaments, and world
peace.
The United States recognizes this was as an offensive war of
the completely prepared German and Austrian military autocra
cies against the unsuspecting and inadequately prepared democ
racies of the world in pursuance of the policy laid down in the
first and second articles of the secret treaty of Verona of No
vember 22, 1922, in which the autocratic rulers of Prussia and
Austria solemnly pledged their powers to each other to over
throw all “ representative ” governments on earth, the consum
mation of which design the Prussian and Austrian autocratic
group has steadily and secretly kept in view, and that this
war had for its objects the premeditated slaughter and robbery
of the innocent peoples of other nations for the sordid and base
purposes of annexation, indemnity, robbery, and commercial
profit by military force and terrorism and ultimate world
dominion.
The United States finally recognized the unavoidable necessity
of meeting the forces of this military conspiracy on the battle
fields of Europe in order to prevent the military rulers of Ger
many and Austria succeeding in the first step of mastering
Europe as a means to mastering and robbing America.
The United States can not be deceived by those military
leaders of Germany and Austria who now, before their own
people, pretend to be waging a war of defense and to desire an
honorable peace, but whose every act has clearly demonstrated
to the whole world that they deliberately planned and are still
21508—23341
persisting in this unspeakably brutal war, with their sinister
purposes unchanged, and which they are still attempting to
carry out by terrorism, intr.gue, and systematic falsehood and
deceit at home and abroad.
The United States can not confide in any statement or prom
ise emanating from such a perfidious source until the German
and Austrian people in fact and in sober truth can control the
conduct of their agents and compel them to observe the rules
of morality and good faith.
The Un ted States did not enter this war for material advan
tage or for any selfish purpose or to gratify either malice or
ambition.
Ih e United States will not approve of forcible annexations
or mere punitive indemnities, even on the misgu ded people of
Austria or of Germany, but demands the complete evacuation
ol all territory invaded during the present war by the German
and Austr an troops and the restoration and indemnity of
Belg ian, Serbia, Rumania, and Montenegro.
The United States believes that righting the wrong done to
the French people by the Prussian Government in 1 8 7 1 in the
matter of Alsace-XjOiraine will remove long-pending grievances
due to previous military aggression and w.ll promote future
world peace.
The United States believes that a readjustment of the
frontiers of Italy should be effected along clearly recognized
lines of nationalilty; that an independent Polish State should
be established over territory indisputably occupied by Polish
people; that the peoples of Austria-Hungary, of the Balkans,
and o f the Ottoman Empire should have the right of autono
mous development.
The United States will favor recognizing and protecting by
an international alliance the territorial integrity o f all nations,
great and small; the maintenance of the right of unembar
rassed self-determination of all nations, and the right of such
nations to manage their own affairs by internal self-govern
ment; and safeguarding the rights of backward peoples by
international agreement.
The United States will favor extending international credits
for the restoration of all places made waste by war.
The United States will insist that the oceans and high seas
and international waterways and canals shall be open on equal
terms to the citizens of all nations; that all nations shall have
the untaxed right of access to the sea of their goods in bond,
through any intervening territory to the seaports of other na
tions, with equal access to shipping facilities.
The United States will favor the removal, as far as possible,
of all economic barriers and the establishment of equal trade
conditions among all the nations of the world consenting to
peace and associating themselves for its maintenaee, without
interfering with the right of any nation to govern its own im
ports and exports.
The United States wall insist that adequate guaranties shall
be given and taken to the end that national armaments on land
and sea should be reduced to the lowest points consistent with
domestic safety.
2 1 5 0 8 — 23 3 4 1
The unbounded ambition and deceit of the Prussian military
autocrats are again exposed in shameless nakedness before the
German and Austrian people, their allies, and the'w orld at
large in their present demands of annexation of adjacent Rus
sian territory and other demands contemplating the domination
of the Russian and Polish people in flat violation of their own
Reichstag’s recent pledges against annexation and indemnity.
The United States feels for the Russian people the liveliest
sympathy in their great losses in life and property at the hands
of the German and Austrian autocrats, as well as their mag
nificent and glorious struggles in behalf of freedom and demo
cratic world peace.
Having passed through many severe tests and trials in estab
lishing popular government in America, the people o f the
United States, through their own directly elected representa
tives, desire to extend to the Russian people the cordial hand
of fellowship in their new-found freedom and to assure their
democratic brothers in Russia that we earnestly desire to
render them, so far as possible, every assistance they may
need and which they themselves desire.
The United States will favor an open-minded and absolutely
impartial adjustment of all colonial claims based upon a strict
observance o f the principle that in determining all such ques
tions of sovereignty the interests of the population concerned
must have equal weight with the claims of the Governments
whose titles are to be determined.
The United States recognizes that a general association of
civilized nations must be formed under specific covenants for
the purpose of affording mutual guaranties of political inde
pendence and territorial integrity to nations, great and small
alike, and of maintaining world peace, and believes that under
such a system dissatisfied peoples now held under subjection to
dominating nations for strategical purposes could be safely
given their liberty and autonomy, as the rights of the dominant
nation would be made safe by the general association of na
tions and the subject nation would cease to be a coveted asset
against future war.
The United States believes that under such general associa
tion of nations it should be a violation of international law and
the highest international crime for any nation, on any alleged
ground, to invade by military power the territorial limits of
another nation, and that the penalty for such invasions should
be the immediate international blockade of the invading and
offending nation, an embargo on all mail, express, and freight
to and from such nation, and the suppression of such invasion
by the combined forces of the general association of nations
organized for the protection of world peace.
The United States believes that all future international
treaties should be made in the open, where all the world may
know of the proceedings in the framing of such treaties, and
that secret diplomacy and international intrigue should end.
The United States desires to be on friendly terms, political,
commercial, and social, with the people of every nation, includ
ing those now under the control of the German and Austrian
military autocracies, and to restore as speedily as possible these
215 0 8 — 23341
friendly relations with the German and Austrian people as soon
as they .organize a Government responsible to the will of the
people of Germany and Austria and whenever they shall them
selves demonstrate a willingness to deal with the other nations
of the world on a basis of equality, justice, and humanity and
are willing to abandon the atrocious and detestable doctrine of
making war for annexation, indemnity, and profit.
The United States entered this war to protect the rights of
its own citizens to life and liberty, to protect its own future,
to make the world safe from the future menace of military
despotism, dynastic ambitions, or competing armaments, to
establish permanent world peace on a basis of international
justice, righteousness, and humanity, and, in cooperation with
the self-governing belligerent nations, will maintain these prin
ciples, whatever the cost, with firmness and resolution until
these ends are fully accomplished.
2 1 5 0 8 — 23341
THE SEIZURE OF THE RUHR VALLEY
BY FRANCE
SPEECH
OF
HON. ROBERT L. OWEN
OF O K LAH O M A
IN THE
SENATE OF THE UNITED STATES
SATURDAY, JANUARY 27,1923
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O F F IC E
1923
81993— 23504
SPE ECH
OF
IION.
ROBERT
L.
O WE N .
THE SEIZURE OF THE RUHR VALLEY BY FRANCE.
Mr. OWEN. Mr. President, the Versailles treaty, part 7,
annex 11, paragraph 18, contains the following w ords:
The measures which the allied and associated powers shall have
the right to take in case of voluntary default by Germany, and which
Germany aF,ees nol to regard as acts of war, may include economic
and financial prohibitions and reprisals and in general such other
measures as the respective Governments may determine to be necessary
m the circumstances.
It will be remembered that Rumania invaded Hungary to
collect reparations immediately after the armistice and that
the Allies, led by France, rebuked Rumania for a violation of
the treaty of Versailles, and at a time when M. Loucheur, of
France, was then chairman of the Reparation Commission
and Mr. Clemenceau was president of the Peace Conference, and
that Clemenceau signed the note to Rumania on August 23
1919, as follows :
|
llie Peace Conference is in receipt of information, the accuracy of
which, unfortunately, it seems impossible to question, that Rumanian
forces in Hungary are continuing the systematic seizure and removal
of Hungarian property.
In view of the recent correspondence between the Peace Conference
and the Rumanian Government it is difficult for the allied and asso
ciated powers to comprehend such action of the Rumanian Government
except on the hypothesis that the Rumanian Government ignores the
accepted principles of reparation.
The Rumanian Government, as a participant in the labors of the
Peace Conference and as a signatory of the treaty of peace with Ger
many, should not, however, be unaware of the care which has been
exercised by the allied and associated powers to provide for an orderly
scheme of reparation.
If indemnification for damage suffered had been left dependent upon
such factors as geographical proximity to enemy assets or upon the
result of competition between allied States in possessing themselves of
such assets, it would have been inevitable that flagrant injustices and
serious discord would result. Accordingly, the treaty with Germany
to which Rumania is a party, consecrates certain fundamental prin
ciples of reparation, notably: * * *
(3) A central Reparation Commission is established as an exclusive
agency of the allied and associated powers for the collection and dis
tribution of enemy assets by way of reparation. * * »
The acts referred to likewise depart from the agreed principle that
the Reparation Commission should act as the exclusive agency of all
of the allied and associated powers in the collection of enemy assets
by way of reparation.
The further possible consequence of the course of action which
Rumania appears to have adopted are so serious and fraught with such
danger to the orderly restoration of Europe that the Allies and asso
ciated powers would, if necessity arose, feel constrained to adopt a
most vigorous course of action to avoid these consequences.
For it is obvious that if the collection of reparation were to be
allowed to degenerate into individual and competitive action by the
several allied and associated powers, injustice will be done and cupid
ity will be aroused and, in the confusion of uncoordinated action
the 6nemy will either evade or be incapacitated from making the
maximum of reparation.
The allied and associated powers can not, however, believe that
the Government of Rumania would create and force the allied and
associated powers to deal with such a danger.
The Peace Conference accordingly awaits from the Government of
Rumania an immediate and unequivocal declaration :
(1) That the Government of Rumania recognizes the principle
that the assets of enemy States are a common security for all of
the allied and associated powers :
(2) That it recognizes the Reparation Commission as the exclusive
agency for the collection of enemy assets by way of reparation.
2
31993— 23504
3
Rumania withdrew from Hungary. Therefore the treaty of
Versailles was interpreted by France itself, through its most
distinguished representatives, to forbid one of the Allies to
take the initiative and attempt to collect reparations on its
own initiative and with its own force.
The interpretation by France of the treaty of Versailles
in regard to Rumania was a proper and righteous interpreta
tion, but now the French statesmen are contending that para
graph 18, above quoted, of Part VII, of the treaty of Versailles,
justifies her invasion of Germany and gives France the right to
independent action, although, I understand, that England’s
chief law officers claim that this is not a righteous interpre
tation and does not give France a right to invade Germany
for the collection of reparations.
Mr. President, the American papers are full of the seizure
of the Ruhr Valley, its coal mines, its industries, by France,
and the leaders of mankind are full of perplexity at the grave
consequences which may ensue by the military invasion of Ger
man territory by France.
When the German people were being led by the military
dynasty of the Hohenzollern leadership against France the
great body of American opinion was keenly sympathetic with
France. Then France was being invaded without moral right
by military force and brute power. Then there was a con
test between monarchy and democracy, between military au
tocracy and representative government.
Now Fro nee is invading Germany with military force, with
her former allies standing aghast at the procedure. Now it is
no longer a contest between German monarchy and French
democracy. It becomes a contest between French leadership
and German leadership, severally representing the French and
German people, who are assumed to have a truly representative
government, and a question arises as to the legal rights of the
French leaders to invade Germany and of their moral right
to do so. It is obvious that the allies of France and Belgium
do not approve this step; that the world does not approve it.
The question of legal right under the treaty of Versailles
is challenged by men o f the highest ability. That may be left
as a controverted question. I merely wish to make an observa
tion on the moral right of France to do this and the political
wisdom of this procedure.
The French leaders undoubtedly believe that the German
leaders are trying to evade the payment of the reparations
provided by the treaty of Versailles and have determined that
they will not permit it. It seems highly probable the people of
Germany, especially those of great wealth, are at heart opposed
to paying the reparations to the extent fixed by the Versailles
treaty. The French leaders seem determined to use whatever
military force is necessary to compel the German people to
pay the amount fixed by France in the treaty of Versailles.
The treaty of Versailles was written by the victors and
was a dictated treaty and was not written in the light of the
14 points laid down by the President of the United States and
accepted by the Allies and by the German leaders as a basis
upon which the German authorities agreed to the armistice in
behalf of the German people. The 14 points and the speeches
of President Woodrow Wilson upon which the Germans agreed
to the armistice required the treaty to be based upon strict
justice and upon high moral grounds. Therefore, the world
has a right to inquire into this matter upon that basis.
31993— 23504
The treaty of Versailles is not conclusive under the cir
cumstances. The German people who are to pay the penalties
have a moral right to expect that the reparations honorably
and justly due to France and Belgium should be fixed at a
figure which would be just and fair, and that these figures
should be determined by disinterested powers and not dictated
by the sword. The brutal conduct of Bismarck in dealing with
the French in 1871 was a bad example and does not constitute
a moral precedent upon which to determine this matter.
When we come to consider the matter of reparations, I be
lieve all the world will agree that as between the people in
volved the actual cost of repairing the devastated region of
France and Belgium ought to be borne by the German people
The actual cost the Germans can assuredly meet, but the actuai
cost should be ascertained in a judicial manner, where so ear
nestly controverted, not by a victor’s dictum.
It is impossible for any reparation to be made for the death
of the millions of men involved in the struggle.
When we come to consider this matter from a moral and
ethical standpoint it may be now seen, after five years from
the termination of the conflict, that this devastation of life can
not justly or fairly be visited upon the unhappy peoples who
were afflicted by it.
The amount of the physical reparations and the payment of
these reparations by the German people should be considered in
the light of the extent to which the German people were them
selves the victims of a structure of government which had
been built up through generations of men. The Hohenzollerns
claimed to rule by Divine right, and they had control of the
military and naval power; they had control of the legislative
powers of the people of Germany. It was not a government
based upon the consent of the people. It was a government
ruling the people without their consent. It was a government
controlling the purse of the German people. It was a govern
ment controlling the press absolutely, controlling the pulpit the
schools, the forum, every avenue of intelligence and communi
cation, and, in very large measure, the expression of public
opinion.
When the Kaiser and his military and naval leaders deter
mined upon war there was no organized public opinion in Ger
many which had the least power to oppose it. No young Ger
man summoned to the colors by the order of mobilization had
any option. Every German youth was absolutely compelled to
answer the order under penalty of a drumhead court-martial
and a firing squad consigning him immediately to an ignomini
ous grave as a traitor to his country, as a traitor to his brothers
and kinsmen, as a coward or a rebel, if he failed to come. He
had only the option of coming, weeping or singing. He came
singing.
Public opinion in Germany was completely enslaved by the
Hohenzollern machine. The people did not know the facts. They
had presented to them as facts flagrant falsehood. They had
overwhelming argument submitted by their leaders which they
had no means of answering.
Half of the German people were women, who had no voice
whatever in public affairs, or pretended voice. A large part of
the German population were minors, with no voice or pretense
of voice. Millions of them were in complete infancv, and be
fore the reparations shall have been paid a majority of the
German people who pay the reparations will have been brought
31993—23504
5
into being in this world subsequent to and without any responsi
bility whatever for the World War and the devastations which
were inflicted upon the unhappy people of France and Belgium
and upon their allies.
Morally it can not be assumed that the unborn babe is re
sponsible for the World War.
Morally it can not be assumed that the women of Germany
and the minors of Germany were responsible for the World
War.
The moral responsibility rested upon William II, now living
in luxury in Holland, upon Ludendorf, Hindenburg, and the
military and naval leaders of Germany.
And the leaders of the world have measurably condoned the
moral responsibility of this culpable leadership of Germany
and have imposed no penalties upon them for their crimes in
leading the German people into this devastating war. Instead
they have contented themselves with imposing economic penal
ties upon the German people, who were already afflicted to
death by monarchy, and who are being afflicted by the results
of this war almost as much as the people of the Allies. In
the great thing, the destruction of life, the maiming of men,
the German people have suffered just about the same as the
French and Belgians and English and Italians and Americans.
The leaders of the Allies have condoned the conduct of the
leadership of Germany and they are contenting themselves
with economic reparations imposed on the common people of
Germany, upon whom always falls most heavily the folly of
human leadership.
Mr. President, the people of America have had a great sym
pathy with France and Belgium in the gigantic wrongs done
them, but the people o f America desire absolute justice from a
moral and ethical standpoint to be done. They desire the peace
of the world. They desire that the productive powers of man
kind shall be brought to a speedy maximum in order to make
possible the economic reparation for the damages of war
The invasion of Germany by the French military forces will
not meet the moral approval of America, first, because they see
in this invasion the sowing of dragons’ teeth, the building un
of a more intense hatred between the German and French
people, and the building up of greater hostilities between those
who will sympathize with Germany on the one hand and the
French and the Belgians on the other, dividing the world again
into two vast contending camps, where the ultimate attitude
may be another appeal to organized military force.
Second, because the French leadership seems to be indis
posed to allow controverted questions as to the amount of the
reparations and the means of collecting reparations to be set
tled by economic methods. They have dictated the amount the
terms, and are collecting or trying to collect by military force
and they will probably break down the productive power of the
German people.
If France and Belgium should show a disposition to permit thp
intermediation of friendly nations on these questions and to
invite such mediation before it is too late, there would be an
outburst of approval in America of such an attitude.
It will be very deplorable if French leadership should per
sist in a policy which will alienate the confidence and resnect
of the world. The rattling of sabers does not appeal to Ameri
can opinion, and the best friends of the French people in
America are deploring a policy which they fear will ultimafelv
do France irreparable injury.
y
31993— 23504
I believe we should, before it is too late, join the other great
nations in some plan for guaranteeing France from invasion,
under the principles of the League of Nations, but only on the
condition that France itself does not invade other countries. I
think the German people should have the same guaranty from
the world of freedom from invasion and that the world should
use economic pressure on the German people to enforce repara
tions to the extent a world tribunal shall ascertain such repara
tions are due and payable.
Mr. OWEN. Mr. President, without taking the time of the
Senate to read, I will ask to have inserted in the R e c o r d in
S-point type articles 232, 233, and 234 of Part VIII of the Ver
sailles treaty, which sets forth the plan by which the repara
tion was to be made.
There being no objection, the matter referred to was ordered
to be printed in the R e c o r d in 8-point type, as follow s:
A rticle 232.
The allied and associated Governments recognize that the re
sources of Germany are not adequate, after taking into account
permanent diminutions of such resources which will result from
other provisions of the present treaty, to make complete repa
ration for all such loss and damage.
The allied and associated Governments, however, require, and
Germany undertakes, that she will make compensation for all
damage done to the civilian population of the allied and associ
ated powers and to their property during the period of the
belligerency of each as an allied or associated power against
Germany by such aggression by land, by sea, and from the air
and in general all damage as defined in Annex I hereto.
In accordance with Germany’s pledges, already given, as to
complete restoration for Belgium, Germany undertakes, in addi
tion to the compensation for damage elsewhere in this part pro
vided for, as a consequence of the violation of the treaty of 1839
to make reimbursement of all sums which Belgium has borrowed
from the allied and associated Governments up to November 11
1918, together with interest at the rate of 5 per cent per an
num on such sums. This amount shall be determined by the
Reparation Commission, and the German Government under
takes thereupon forthwith to make a special issue of bearer
bonds to an equivalent amount payable in marks gold on May
1, 192G, or, at the option of the German Government on the
1st of May in any year up to 1926. Subject to the foregointhe form of such bonds shall be determined by the Reparation
Commission. Such bonds shall be handed over to the Repara
tion Commission, which has authority to take and acknowledge
receipt thereof on behalf of Belgium.
A rticle 233.
The amount of the abo\e damage for which compensation is
to be made by Germany shall be determined bv an interallied
commission, to be called the Reparation Commission and con
stituted in the form and with the powers set forth hereunder
and in Annexes II to VII, inclusive, hereto.
This commission shall consider the claims and give to the
German Government a just opportunity to be heard.
The findings of the commission as to the amount of damage
defined as above shall be concluded and notified to the German
Government on or before May 1. 1921, as representing the extent
of that Government’s obligations.
The commission shall concurrently draw up a schedule of
payments prescribing the time and manner for securing and
31993—23504
discharging the entire obligation within a period of 30 years
from May 1, 1921. If, however, within the period mentinoed
Germany fails to discharge her obligations any balance remain
ing unpaid may, within the discretion of the commission, be
postponed for settlement in subsequent years or may be han
dled otherwise in such manner as the allied and associated
Governments, acting in accordance with the procedure laid down
in this part of the present treaty, shall determine.
A r t ic l e
234.
The Reparation Commission shall, after May 1,1921, from time
to time consider the resources and capacity of Germany, and
after giving her representatives a just opportunity to be heard
shall have discretion to extend the date and to modify the
form of payments, such as are to be provided for in accordance
with article 233, but not to cancel any part, except with the
specific authority of the several Governments represented upon
the commission.
Mr. OWEN. Mr. President, I wish to take only a moment or
two to reply to the suggestions which have been made by the
Senator from Pennsylvania [Mr. R e e d ] , That Senator em
phasizes the criminal conduct of Germany. I differentiate
between the criminal conduct of the military leaders of the
Hohenzollern dynasty and the mass of the German people who
were the subjects and victims of that organized military and
political power. I made that distinction very clearly in what
I had to say, but I do not know whether or not the Senator from
Pennsylvania was then present.
The Senator from Pennsylvania also emphasizes the great
importance of minding our own business. We did not think
when the great World War broke out in 1914 that we were con
cerned in the wrongs then done to Belgium. We made a great
mistake. We ought to have protested, instantly Belgium was
invaded, the violation of her sovereignty and of her territorial
integrity.
When one nation is allowed to be broken down by such
conduct all the nations in the world are jeopardized and a
policy is pursued which is destined to break down the peace of
the world in which we are greatly concerned. It is em
phatically “ our business.” I do not believe in the doctrine of
Cain, who, in response to the inquiry, “ Where is thy brother? ”
asked, “Am I my brother’s keeper?” Cain assumed no re
sponsibility for his brother Abel’s safety. He asserted before
God it was “ none of his business.” I want to tell the Senator
from Pennsylvania and tell the Senate that it is “ our business ”
to speak the voice of morality and of justice among men and
to say to France in a voice that shall be heard, “ Keep out of
Germany,” and to say to Germany, “ Keep out of France.”
That is the only way we are going to have peace on earth.
We can not consent that nations without objection—and with a
silence “ that gives consent ” on our part—may invade other
nations and then expect that it will not react upon us and upon
all the world.
I do not feel so much concern about the commercial aspect
to which Governor Lowden referred. If Europe is kept in an
eternal broil, if the productive powers of Europe are broken
down, it is true that Europe can not create commodity values,
send them to our country, and establish the credit with which
to buy cotton and corn and wheat and copper, and that is an
important matter. It is a more important matter that there
31993— 23504
should be peace on earth. I am concerned in that; the United
States is concerned in i t ; the whole world is concerned in it.
A plan has been arranged by which 51 nations have already
pledged themselves to protect France from invasion. It is
difficult for me to believe that French leadership is afraid of
the invasion of France by Germany, whose powers to make and
hold arms have been taken away, when 51 nations stand behind
France to protect France against invasion, when Great Britain
was willing to make a special guaranty to France, and when
our great Nation has, by its declaration of principle, expressed
its sympathy against the invasion of France, and when Ger
many proposes a solemn pledge to the world not to invade
France.
The principle o f territorial integrity and political independ
ence is vital. It must be maintained if world peace is to be
maintained. The French leaders, having such guaranty against
invasion, are now breaking down the principle agreed to in the
League of Nations, Article X, by which French safety from
future invasion was safeguarded and will justify the world in
abandoning the guaranty as far as France is concerned.
We went into the last war not for sordid purposes, but to
establish liberty throughout the world. That is what our sons
fought for and that is what they died for—not the liberty of
France alone but the liberty of mankind. The liberty of the
French people, yes; but the liberty also of the German people.
I am just as much in favor of giving liberty to the German
people as I am to the French people. We can not give liberty
to one and take it away from another and establish the divine
doctrine of peace and good will on earth. The thing that men
are willing to live for and to fight and die for is “ liberty.” It
ought not to be put upon a sordid plane.
Nothing which I said showed any lack of sympathy for the
French people. I have the greatest sympathy for the French
people. I wish I could believe that the French people had a
greater measure of democratic self-government. In my judg
ment they are being largely governed now by an organized
commercial, military, and political force which is leading them
and the world into injury and harm.
From their recent gestures I can not help thinking that the
military leadership of France is dictating the economic policy of
France. However, whether that be true or not, it is my judg
ment that it is an injury to the people of the United States
that this controversy between the French leadership and the
German leadership should remain unsettled and that war should
grow out of it.
It is not a question of sympathizing with the unborn babe
of France or the unborn babe of Germany or the unborn babe
of the United States, but it is a question of establishing by
orderly processes a means by which men shall live at peace
and the first fundamental of that principle requires the recog
nition of the doctrine of the territorial integrity and political
independence of each self-governing nation. When we depart
from that principle we set the world on fire.
I feel entirely justified in what I said with regard to the
invasion of the Ruhr. I hope, indeed, that time may prove
that our grave apprehensions are not well founded.
31993— 23504
Proposed International Conference
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN T H E
SENATE OF THE UNITED STATES
FEBRUARY 19, 1923
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O F F IC E
1923
3 9 8 7 9 — 236G 5
SPEECH
HON.
ROBERT
L
OWEN
PROPOSED INTERNATIONAL CONFERENCE.
Mr. OWEN. Mr. President, this morning I sent to the desk
a Senate resolution, which I ask may he read.
The VICE PRESIDENT. The Secretary will read as re
quested.
.
,
The reading clerk read the resolution (S. Res. 44o), as fol
lows :
Resolved, That the President of the United States is requested to
invite all the nations of earth, whether they have adhered to the cov
enant of the league or not, to attend, in the city of Washington, United
States of America, a three months’ international economic conference
for the promotion of international trade and understanding, ana a con
ference for the establishment throughout the world of the territorial
integrity and political independence of every nation, great and small,
and the abolition of war.
Mr. OWEN. Mr. President, the time has come when the
United States Senate should perform the duty of voicing
throughout the world the doctrine of international justice, of
international righteousness, and understanding, the doctrine
upon which the peace of the world and the happiness of man
kind must he based. If eventually, why not now?
The world is looking for the moral leadership of the one great
disinterested, self-governing Nation.
The World War demonstrated the enormous physical power
of the United States. It demonstrated its power to produce at
high speed quantity and quality of munitions of war. It demon
strated the power of a peaceful democracy to organize for war.
It demonstrated the power of our Republic financially, for with
out a quiver it raised forty thousand millions of dollars to
finance the war and establish liberty and justice in the world.
It demonstrated our unselfishness.
The statesmen of Europe are directly and indirectly ap
pealing to America to point the path of peace and liberty.
These appeals come from Great Britain, from Italy, from Bel
gium, from France, and from Germany.
From yesterday’s press I clipped the following:
B R I T I S H L A B O R I T E S S E N D A P F E A L T O P R E S ID E N T ----- 88 M E M B E R S O F C O M M O N S
A S K M R . H A R D IN G TO S A V E E U R O PE .
(By the Associated Press.)
February 17.— Eighty-eight laborite members of the House
of Commons have signed the following cablegram to President Harding:
“ America, with Great Britain, unwittingly has made Frances present
destructive action possible. We appeal for American cooperation to-day
as the one hope of saving Europe.”
L ondon,
President Baltasar Brum, of Montevideo, Uruguay, on Feb
ruary 10, made public a plan for an association of American
nations which the delegation of Uruguay is to lay before the
Pan American Congress at Santiago, Chile, next month, an
abstract of which I hereto attach as^ Exhibit A.
The substance of President Brum's proposal is that the
American nations should have a Western Hemisphere associa
tion to encourage the idea that international relations are
30879— 23665
3
4
founded upon the principles of justice and solidarity, regard
less of differences of race, customs, or religion, to intensify
inter-American friendship and friendly relations with other
count lies of the world, and to solve by arbitration interna
tional conflicts and preserve the sovereignty and territorial
integrity of every nation.
On Saturday, February 10, I submitted to the Congres
sional R ecord House Resolution No. 16 of the Legislature of
Oklahoma, as follows:
. i ^ ! 'el:?as it i« made known by tlie American press that conditions
m continental Europe grow dally w orse; that nations, great and
small, are tottering, unable to pay expenses ; and
. Whereas suffering among the people is increasing, famine threatens
here and there, unemployment is growing, and a spirit of suicidal
desperation has settled down over half the world ; and1
^ step follows step and a new world war results this conS a f c T l t h t l ? r 'S ; “ M L " * r“ 1 6orrot ° f ,ho lMt »“'■
“ “ t i » ™ " S ' h ? :" o T ab e " l '“ is be,ore 1 ,ca‘,s “ »
,L
1
,
H SCn^f J 'ePrcsentalives of the Ninth Legislature of
oU
the State of Oklahoma, lh a t we memoralize the Congress of the United
states to give its sympathetic consideration to the following basic than
for a return to world sanity :
°
1
First. That the United States must assume the leadership;
Second. That at the iirst possible opening President llarding should
call a conference of the leading World War powers;
Third. That the program at this conference should be in two sec
tions, economic problems and limitation of armaments •
Fourth. That instantly the conference is called t o ’order America's
spokesman should lay before the assembly some specific plan of world
rehabilitation which might involve an international moratorium on war
furthered an lnternational loan to the worst stricken nations ; and he it
Th? t. a copy of this resolution be sent to each Member of
the Oklahoma delegation in Congress.
„ r y , jltsZ.o. by the house of representatives this the 24th day of JanuAdi°(?o?a
u
a
.
.
C h a s . S. B r ic e ,
Speaker pro tempore of the House of Representatives.
This resolution from Oklahoma might be regarded as a
motion in tlie assembly of nations and to all mankind calling
for intelligent, concrete action, and a conference to promote
commerce and end war. I ask the Senate of the United States
to consider this proposal coining from the heart of America,
from a legislature just elected by the people, a body of repre
sentatives who know and feel what the sentiment o f the
people is.
The proposal for action is timely. It is entitled to serious
consideration and to a decision.
The Senator from Idaho [Mr. B orahI on January 29 voiced
from the State of Idaho in Senate Resolution 426 a conception
similar to that which appeared in the Oklahoma Legislature.
I am in accord with the Senator from Idaho, and would go
still further concretely, directly, and simply. The time has
come for action. The resolution of the Senator from Idaho
represents the aspiration of the large majority of Americans.
On May 9, 1921, the Senator from Wisconsin [Mr. La F ollette ] introduced Senate Resolution 74, protesting against the
United States cooperating to carry into effect and enforce the
terms of the treaty oE Versailles, on-the ground that the treaty
of Versailles was influenced too largely by revenge; that it was
a betrayal of the promises of the United States made to the
world and formally accepted by the Allies as the basis of the
30879—23665
peace terms; that the Senate of the United States had refused
to ratify i t ; that the people of the United States had indorsed
the action of the Senate in objecting to the Versailles treaty.
The Senator from Wisconsin was reelected and renominated
after this declaration by an overwhelming vote in Wisconsin.
He represents also a very considerable element of public opin
ion in the United States.
Mr. President, the peoples of the world should no longer per
mit themselves to he put in danger of world war by the ambi
tion, vanity, or self-sufficiency, or by the mere patriotism and
physical courage of national leaders who demand the invasion
of the sovereignty and territorial integrity of other nations on
any ground, real or fanciful.
The chief reason the invasion of Germany by French leaders
is objectionable is because it is a denial of these fundamental
international principles and because the remedy of French
invasion is worse than the disease of German evasion. The
Germans ought to be made to pay the reparations due, and the
world ought to require it, but the French invasion of Germany
by military force is building up hostilities so intense that it
may again produce a world war without obtaining the justice
to which the French people are undoubtedly entitled. Senators
should not be deterred from expressing their honest opinions
by the unthinking charge that they are taking sides with Ger
many against France. The principles of international justice
must be declared without respecting persons or nations. It
has been said that “ God is no respecter of persons,” and
justice and liberty are the divine principles through which the
peace and happiness of mankind must be secured, and these
principles must not be twisted by either hate or love of any
nation, whether French or German.
It is well to remember that there ought always to be made a
broad distinction between the people and those who govern the
people. The people can hardly he held morally responsible for
things done against their will and without their consent by
those who govern them without their consent, and this is why
the subjects of the former Teutonic imperalists are entitled to
some consideration because their consent was not asked. Their
opinions were enslaved and the people were driven by a brute
military force organized to the last degree which meant a sum
mary death to any individual who dared refuse obedience.
How could the President of the United States have made
clearer the distinction between the people who were subject and
the rulers who subjected them without their consent in the
Central Empires than he did in his address to the joint session
of the two Houses of Congress January 8, 1918?
The President’s address of January 8, 1918, was in answer to
the desire of the spokesman of the Central Empires “ to discuss
the objects of the war and the possible bases of a general
peace,” and he spoke for the Entente Allies and all of them. He
spoke expressly for the United States and for all the govern
ments and peoples associated together against the imperialists.
The President said in regard to this:
We (the associated nations) can not be separated in interests or
divided in purpose. We stand together until the end. For such ar
rangements and covenants (the 11 points) we are willing to fight and
to continue to fight until they are achieved.
3 9 S 7 9 — 230G 5
The President said:
We have no jealousy of German greatness, and there is nothing in
this program that impairs it. We grudge her no achievement or■dis
tinction ot learning or of pacific enterprise such as have made her
record very bright and very enviable. We do not wish to injure her
or to block in any way her legitimate influence or power. We do not
•?
ber either with arms or with hostile arrangements of
f Sr-e 1S wiU
!!ls t0 associate herself with us and the other peaceaHYi'n a Da w nS ° f, tlle w or,(1 in covenants of justice and law and fair
dealing. We wish her only to accept a place of equality among the
f p f i c l of S late??.
® I1C W° rld in WhiCh We no'v liv i-in s t e ld of
W
President Wilson said further in this address:
An evident principle runs through the whole program I have out!*“ «*;. n if the principle of justice to all peoples and nationalities
and their right to live on equal terms of liberty and safety with one
wbetbcr . they be strong or weak. Unless this principle be
made its foundation no part of the structure of international justice
can stand. The people of the United States could act upon no other
principle ; and to the vindication of this principle they are ready to
devote their lives, their honor, and everything that thev nossess Tho
moral climax of this the culminating and flnll “ r
iiberh
come, and they are ready to put their own strength, their own
highest purpose, their own integrity and devotion to the test.
Who did the President speak for? He spoke for France for
Great Britain, for Italy—for the Allies as well as for the people
of America— and the Allies adopted these principles, and on
this declared basis the German leaders and the German people
surrendered. Have we forgotten these 14 points? They are
express covenants with Germany and the world. Can they ever
be forgotten in international affairs? The 14 points were 14
explicit, contracted obligations. What are they?
1. Open covenants of peace. No private international under
standings.
2. Freedom of the sea.
3. Removal of economic barriers. Equality of trade condi
tions.
4. Adequate guaranties to reduce national armaments to the
lowest point consistent with domestic safety.
5. Absolutely impartial adjustment of all colonial claims, rec
ognizing of equal right the sovereignty of the populations con
cerned with the equitable claims of governments whose title is
to be determined.
6. The treatment of the Russian people—political independ
ence and welcome into the society o f free nations under insti
tutions of her own choosing.
7. The evacuation and complete freedom of Belgium.
S. The restoration of Alsace-Lorraine to France.
9. The readjustment of the frontiers of Italy along clearly
recognizable lines of nationality.
10. The freest opportunity of autonomous development of
Austria-Hungary.
11. The evacuation of Rumania, Serbia, and Montenegro.
The political and economic independence and territorial in
tegrity of the several Balkan States.
12. The sovereignty to the Turkish portions of the Ottoman
Empire, security to nationalities under Turkish rule, their
autonomous development, and the opening of the Dardanelles.
13. The political and economic independence and territorial
integrity of Poland inhabited by indisputably Polish popula
tions.
39S79— 23665
V
7
s
*
•
14.
A general association of nations must be formed under
specific covenants for the purpose of affording mutual guaran
ties of political independence and territorial integrity to great
and small States alike.
These are the covenants that the President of the United
States declared “ we (the Allies) are willing to fight for.”
Human liberty, international justice— this was the moral climax
of the war. These were the objects put in concrete form for
which we fought.
The authorities of the British Empire, the leaders of France,
of Italy, of Japan accepted the doctrine laid down by Woodrow
Wilson. These are the things for which America sacrificed.
These are the things for which our American soldiers died..
They did not lay down their lives to establish the principles of
injustice, of territorial aggrandizement, of military ambition,
or to support the petty vanities of any human leadership.
These are the pledges on which as a solemn contract the Ger
mans laid down their arms and the Prussian military dynasty
forever.
Mr. President, it is said that all legislation is a matter of
compromise, and the treaty of Versailles was a matter of
compromise. It lias been, however, demonstrated that Woodrow
Wilson used every ounce of bis energy— social, physical, and
moral—to get these 14 contracted terms and points recognized.
If he did not succeed absolutely and completely, it was not
because he did not go to the utmost limit of his powers. Per
haps he might have succeeded if he had had the whole-hearted
support and understanding of all the American leaders. Un
happily, party divisions, party ambitious, party prejudices, per
haps, seriously weakened his efforts and did the world great
injury.
I am sure that he believed that time would correct the failure
of the Versailles treaty to fully meet the obligations to , the
world under the 14 points, such as self-government to the people
of Shantung, to the people of Ireland, to the people of Egypt,
and the matter of reparations. The Shantung controversy has
settled itself. The Irish people have been given self-govern
ment. Large concessions have already been made to the people
of Egypt, and various concessions have been made in the repara
tions matter; so that liis foresight and hope have not been en
tirely disappointed nor without reason.
The doctrine of the right to rule without the consent of the
governed has been almost entirely abandoned throughout the
world. The doctrine of democracy, the right of the people to
govern themselves, the doctrine of liberty, of the sovereignty
of the people, their right to political independence and terri-.
torial integrity, is now a generally accepted doctrine throughout
the world. The military autocracies have been annihilated.
Woodrow Wilson made a gigantic effort to convince the Amer
ican people of the importance of accepting the Versailles treaty
and the covenant of the league. He pointed out in many
speeches throughout the country how the entry of the United
States into this treaty, into the league, would give stability to
the nations of the w orld; would bring disarmament, interna
tional peace, and a rapid restoration of the productive powers
of mankind under the happy influence of complete international
peace. Unhappily, his very great effort resulted in Ids very
39879— 23605
serious and prolonged illness, for lie was not physically strong
when he entered upon the duties o f the Chief Executive and
only by the most careful daily effort had he been able t o ’keen
himself equal to his task. In the fall of 1919 he was no longer
physically able to carry on this contest. He was as much a
martyr to the public service as any soldier that ever fell in
battle, and history will in due time accord him the high place
which his very great services justify.
Mr President, America owes a duty to the world and to its
own jutiire to take the invited initiative in organizing the world
to recognize the principles of international justice, liberty, and
good understanding, and of the right of every nation, great or
small, to territorial integrity and political independence.
W HAT
ARB
THE
O B J E C T IO N S ?
Certainly, Mr. President, there can be no objection to the
united States giving voice to these principles in which we all
unanimously believe, and a formal declaration would go far to
strengthen these political doctrines throughout the world
Certainly our entry into the League of Nations with’ such
reservations as Congress might see lit, would wonderfully stim
ulate the great doctrines of liberty and international justice set
forth in the covenant of the league.
l i
THE
E L E C T IO N
OP
1920.
air. President, there are those who imagine that the election
of 1920, and there are those who have carried on a propaganda
to the effect that the election of 1920, was a mandate from the
American people not to enter the League of Nations. Nothing
could be more absurd or so injurious to the world’s interest as
this pretension. If this grotesque notion that the American
people voted against the League of Nations in the election of
1920 prevails it would mean the abandonment by America of
the moral leadership of mankind.
The election of 1920 meant nothing of the kind. Both parties
were committed to the covenant of the League of Nations. The
Democrats voted for it without reservations and with reserva
tions. The Republican Senators voted for it with reservations
and some without reservations, and only a negligible number
i oted against it. The Democratic Party made it an issue in
the campaign of 1920 and made the following declaration :
lhe Democratic Party favors the League of Nations as the surest,
it not the only, practicable means of maintaining the peace of the
world and terminating the insufferable burden of great military and
naval establishments.
•
It was upon this basis that the President of the United States in
prearrangement with our allies, consented to a suspension of hostili
ties against the Imperial German Government: the armistice was
fo arorm!i‘nv
° f P V s no«otiatod upon the definite assurance
to Geimagy, as well as to the powers pitted against Germany, that
a general association of nations must be formed, under specific cove
nants, for the purpose of affording mutual guaranties of political inde
pendence and territorial integrity to great and small States alike.”
Upon this platform the Democratic candidate received
9,147,350 votes.
The Republican Party platform of 1920 made the following
declaration with regard to the League of Nations:
fI i
The Republican Party stands for agreement among the nations to
the peace of the world. We believe that such an international
]T ^ } " ? ? “ J “ ter,nati0,!al justice, and must pro^i(i e , “ 5tll0fis wbicli shall maintain the rule o f public right by "the
development of law and the decision of impartial courts and which
p a r tia l
3 9 8 7 9 — 23G G 5
9
s lia ll s e c u r e
in s ta n t
and
g e n e r a l in te r n a tio n a l c o n fe re n c e w h e n e v e r
peace
s h a ll be th r e a te n e d
b y p o lit ic a l a c tio n , so
th a t
th e
n a tio n s
p le d g e d to d o a n d in s is t u p o n w h a t is ju s t a n d fa ir m a y e x e r c is e t h e ir
in flu e n c e a n d p o w e r f o r t h e p r e v e n t io n o f w a r .
W e b e lie v e t h a t a ll t h is c a n b e d o n e w it h o u t th e c o m p r o m is e o f
n a tio n a l in d e p e n d e n c e , w it h o u t
d e p r iv in g
th e
p e o p le
o f th e
U n ite d
S t a t e s in a d v a n c e o f th e r ig h t to d e t e r m in e _ f o r t h e m s e lv e s w h a t is
ju s t a n d fa ir w h e n th e o c c a s io n a r is e s , a n d w ith o u t in v o lv in g th e m a s
p a r tic ip a n t s a n d n o t a s p e a c e m a k e r s in a m u lt itu d e o f q u a r r e ls th e
m e r its o f w h ic h t h e y a r e u n a b le to ju d g e .
It criticizes the covenant of the league as drawn and the in
sistence of the President in favor of the covenant without
amendment; and in regard to the Republican Senate which
had voted to adopt the covenant o f the league with reserva
tions the Republican platform said;
W o a p p r o v e t h e ir c o n d u c t a n d h o n o r t h e ir c o u r a g e a n d fid e lity , a n d
w e p le d g e t h e c o m in g R e p u b lic a n a d m i n i s t r a t i o n t o s u c h a g r e e m e n t s
w ith th e o th e r n a tio n s o f th e w o r ld a s s h a ll m e e t th e f u ll d u t y o f
A m e ric a
to c iv iliz a tio n
and
h u m a n i t y in a c c o r d a n c e w i t h A m e r i c a n
id e a ls a n d w it h o u t s u r r e n d e r in g t h e r ig h t o f th e A m e r ic a n p e o p le t o
e x e r c is e i t s ju d g m e n t a n d i t s p o w e r in f a v o r o f ju s t ic e a n d p e a c e .
As far as the public was concerned there was little or no
difference between the attitude o f this Republican platform
and the Democratic platform, because the Democratic plat
form had no intention whatever to deprive the people of the
United States “ to determine for themselves what is just and
fa ir ” or to involve them in a multitude of quarrels, as stated
in the Republican platform. The Democratic platform stated
in terms, with regard to the League of Nations, that—
T h e P r e s id e n t r e p e a te d ly h a s d e c la r e d , a n d t h is c o n v e n t io n r e a ffir m s ,
t h a t a l l o u r d u t ie s a n d o b lig a t io n s a s a m e m b e r o f th e le a g u e m u s t be
fu lfille d in s t r ic t c o n fo r m it y w it h th e C o n s t it u t io n o f th e U n ite d S t a t e s ,
e m b o d ie d in w h ic h is t h e f u n d a m e n t a l r e q u i r e m e n t o f d e c la r a t o r y a c t i o n
b y th e C o n g r e s s b e fo r e t h is N a t io n m a y b e c o m e a p a r tic ip a n t in a n y
w ar.
When on November 19, 1919 ( C o n g r e s s i o n a l R e c g e d , p. 8802),
Mr. L o d g e submitted the question of ratifying the covenant of
the Teague with certain reservations, 41 Senators, including my
self, voted for it, including nearly all the Republican Senators—
B a ll
C a ld e r
Capper
C o lt
C u m m in s
C u r tis
D illin g h a m
Edge
E lk in s
F r e lin g h u y s e n
H a le
H a r d in g
Jon es, W a sh .
K e llo g g
K enyon
K eyes
L e n r o o fc
Lodge
M cC um ber
M cLean
M e N aryN ew
N ew berry
Page
P en rose
P h ip p s
Sm oot
Spencer
S te r lin g
S u th e r la n d
T ow n sen d
W a d sw o r th
W arren
W a tso n
and five Democrats. The following Republicans voted against
the treaty with the reservations:
B orah
B randegee
F e r n a ld
F ran ce
G ron n a
J oh n son
K nox
L a F o lle t te
M cC u m berS herm an
M oses
N o r r is
P o in d e x te r
Some o f these Republicans voted against it because they
were opposed to the treaty on any ground whatever, such as
Senators Boa a h and J o h n s o n of California, while others, in
cluding nearly all the Democrats, favored the treaty without
these reservations, including all of the Democrats except five,
and these Democrats were in favor of the treaty notwithstand
ing the reservations, so that the vote in the Senate of the
United States was overwhelmingly in favor o f the covenant of
the league, with or without reservations.
39879— 23665
Senator Harding, who was at that time a candidate for the
Presidency, voted twice for the covenant of the league with
reservations.
Nearly all the great Republican leaders were strenuously
for the covenant of the League of Nations with or without
reservations, for example:
Hon. William Howard Taft, formerly President, who was
the president of the League to Enforce Peace, and now, by
President Harding’s appointment, Chief Justice of the United
States.
Mr. Taft, in signed articles in the Public Ledger and in
interviews and addresses, strongly advised the friends of the
League of Nations to vote for Senator Harding as the best, if
not the only hope, for our entry into the league, and in an
article in the Public Ledger immediately following the election
Mr. Chief Justice Taft said:
T h e e n e m ie s o f t h e le a g u e w i l l m a i n t a i n t h a t t h e g e n e r a l v e r d i c t is
o n e c o m p le t e ly a d v e r s e to a n y le a g u e , b u t t h i s w i l l n o t b e t h e r e a s o n
a b le ju d g m e n t o f t h o s e w h o h a v e f o llo w e d M r . H a r d i n g ’ s p r o m is e s in
h is sp e e c h o f a c c e p ta n c e , in h is sp e e c h o f A u g u s t 2 8 , in h is D e s M o in e s
s p e e c h , a n d m h is I n d ia n a p o lis s p e e c h .
Hon. Elihu Root, former member of the Cabinet, Secretary
of State, stood for the league with the Lodge reservations.
Charles Evans Hughes, twice Governor of the State of New
York and Justice of the Supreme Court, nominee for Presi
dent, and at the present time Secretary of State under Presi
dent Harding— the same.
Gen. Leonard Wood, who was a leading candidate for the
Republican nomination for the Presidency, declared his—
A p p r o v a l o f th e L e a g u e o f N a t io n s w ith th e S e n a te r e s e r v a tio n s —
r e s e r v a tio n s
w h ic h
t h o r o u g h ly
A m e r ic a n iz e
it
and
le a v e
A m e rica
a b s o lu te ly fr e e a n d u n tr a m m e le d to fo llo w th e o n ly m a n d a te sh e w ill
e v e r a c c e p t— th e m a n d a te o f A m e r ic a n p u b lic o p in io n , th e w ill o f th e
A m e r i c a n p e o p le .
Frank O. Lowden, twice Governor of Illinois, another leading
candidate for the Republican nomination, stated in his primary
campaign—
A n o t h e r q u e s tio n is t h a t o f th e L e a g u e o f N a t io n s .
I b e l i e v e in
th e p a s s a g e o f th e L e a g u e o f N a tio n s c o v e n a n t w ith re s e r v a tio n s .
I
d e fe n d th e a c tio n o f S e n a to r s w h o in s is te d u p o n r e s e r v a tio n s to th e
c h a r te r s u b m itte d to th e m .
*
*
*
W h e n th e R e p u b lic a n P a r t y is
in p o w e r w e s h a l l , I h o p e , p r o c e e d t o e s t a b li s h
th is m a c h i n e r y 'f o r
a d j 'u s t i n g i n t e r n a t i o n a l d i f f e r e n c e s .
Herbert Hoover, whose friends were urging him for the
Presidency, in the Public Ledger and the Chicago Daily News,
said—
I s ta n d e a r n e s tly fo r a L e a g u e o f N a t io n s to m in im iz e w a r, a n d ,
m oreover, I
sta n d
fo r th e le a g u e
w ith
a lte r a tio n s
in t h e d ir e c t io n
p o in te d b y th e R e p u b lic a n r e s e r v a tio n s .
And Herbert Hoover went so far as to say that—
T h e g r a v e s t p e r il to th e c a u s e o f p e a c e s e e m s to m e t o be t h is , t h a t
J o h n s o n a n d B o it a h b e l i e v e a n d a r e m a k i n g t h e p a r t y a n d t h e c o u n t r y
b e lie v e t h a t th e y h a v e m a d e th e is s u e s a n d a r e d o m in a tin g th e c a m
p a ig n .
I f t h a t f a ls e im p r e s s io n is a llo w e d t o g o u n c h a lle n g e d , w h e n
t h e y r e t u r n to th e S e n a te th e y w ill b e a b le to d r a w to t h e ir s id e su c h
S e n a t e s u p p o r t a s w i ll e n a b le t h e m t o b lo c k c o m p le t e ly S e n a t o r H a r d i n g
w h e n , a s P r e s i d e n t , h e i n v i t e s a p p r o v a l e it h e r o f t h e e x i s t i n g le a g u e
w ith r e s e r v a tio n s o r—
And so forth. Vice President Coolidge on October 2S at Car
negie Hall, New York, said:
It' t h e s e c u r i t y o f E u r o p e is s o i n t e r t w i n e d w it h t h e V e r s a i l l e s t r e a t y
a n d th e e x is tin g L e a g u e o f N a tio n s th a t w e ca n m a k e th e b e st p ro g re ss
3 9 8 7 8 — 211665
11
b y t a k i n g t h e g o o d in t h a t t r e a t y a n d in t h a t c o v e n a n t a n d b y e x c i s
in g - o r a m e n d i n g t h o s e t h i n g s w h i c h a r e n o t c o n s o n a n t w i t h A m e r i c a n
t r a d it io n s a n d h a b it s , s u r e ly th e R e p u b lic a n p la t fo r m p e r m it s o f s u c h
a c o u r s e ; s u r e ly th e p u b lic d e c la r a t io n s o f S e n a to r H a r d in g p e r m it s u c h
a course.
And so, many other of the Republican leaders, such as W.
Murray Crane, of Massachusetts; William Allen White, of
Kansas; Judge Nathan L. Miller, ex-Governor of New York ; Ly
man J. Gage, ex-Seeretary of the Treasury; George W. Wickersham, ex-Attorney General; Charles D. Hilles, president of the
National Republican Club; Oscar Straus, and so forth. It is
perfectly notorious that the Republicans went before the people
in 1920 with the assurance that Senator Harding was the best
means by which to get effective favorable action on the League
of Nations.
The Republican Party platform was framed in such a way as
to prevent Senator J o h n so n , of California, or his supporters
bringing about a party split, but the friends of the league be
lieved in Harding and voted for him ; and to say that the
7,000,000 plurality which he received was because President
Harding was opposed to the League of Nations, for which he
twice voted, is false and utterly preposterous.
There are other reasons which fully explain the 7,000,000
plurality which Harding received without the pretense that
hostility to the league was the reason.
In the first place, the number of votes had been increased
50 per cent by the woman’s vote; and, therefore, whatever the
plurality, it would be largely increased by this new vote.
In 1916 the voters in America were exceedingly opposed to
the entry of the United States into the war. The Democrats
had made the campaign on the slogan “ He kept us out of war,”
and on that slogan Woodrow Wilson l-eceived 9,129,606 votes
against 6,286,214 in 1912, a gain o f nearly 3,000,000 votes.
This included the people who by descent or affiliation were sym
pathetic with the German, Austrian, Bulgarian, or Turkish
people, the pacifists, and many of the socialists, and all those
who wanted to keep out of war.
When Woodrow Wilson led us into war, as he was compelled
to do by public opinion, these citizens turned from the support
of the Democratic ticket like a shoal of herring, and the Repub
licans carried both the House and Senate in 1918.
The preelection letter of Woodrow Wilson in 1918 alienated
many progressive Republicans, energized the Republican Party,
and laid the foundation for the solidarity o f all Republicans
in 1920.
Many independents and Democrats, as well as progressive
Republicans and people of no particular party activity, were
incensed by the unavoidable annoyances of war activities, for
example:
(a) The selective draft act called 10,000,000 men of all po
litical complexions on June 5, 1917, and left hundreds of thou
sands of grievances.
(b) The Council of National Defense, necessary as it was,
was organized down to the crossroads and offended hundreds
of thousands.
(c) The antisedition act, with its spies, and so forth, a neces
sary act, nevertheless laid the foundation for a number of
grievances against the party in power—the Democratic Party
3 9 8 7 9 — 23G 65
(cl) The suppression of free speech, necessary in war to pre
vent the foolish from demoralizing our war activities, neverthe
less offended thousands.
(e) The War Trade Board interfered with trade and com
merce in innumerable ways and left hundreds of thousands of
fended.
(f) The War Industries Board interfered in all sorts of ways
with the industrial life of America—very necessary in time of
war and commendable in the highest degree. Unnumbered
grievances nevertheless were incited by the action of the War
Industries Board.
(g) The food control under Hoover and fuel control under
Garfield offended millions of the people. It mattered not if
Hoover and Garfield were Republicans. The offense was com
mitted by the Democratic administration and the grievance was
against the Democratic Party.
(h) Priority orders on the railroads and embargoes on goods
and gold offended hundreds of thousands of people.
(i) The Government control of railroads, the Government con
trol of the telegraph and cable, the Government control of the
telephones, the preferential treatment of military and naval
business in men, materials, and transports over civilian busi
ness offended thousands.
(j) The commandeering of men and material] and outbidding
civilians for labor and goods required for war broke up peace
time commercial standards and offended thousands.
(k) The high taxes of war, the excess taxes, the surplus
taxes, and the methods of revenue collection and administra
tion annoyed and incensed many.
(l) Necessarily the administration of war is autocratic even
in a democracy and thousands were offended by this cause.
On top of all these things there was a resolute and tre
mendous propaganda carried on against Woodrow Wilson and
his administration, due, of course, in part to these causes which
are enumerated.
Then followed Wilson’s physical illness and more or less
Democratic demoralization and a serious discontent within the
ranks of the Democratic leadership.
It was all of these things combined that led to Harding’s very
great plurality, not because of American hostility to the League
of Nations.
The campaign of 1920 was carried on on the Republican
slogan of so-called “ anti-Wilsonism ” and “ we want a change.”
The American people wanted to get a change from the auto
cratic bureaucracy of war to the usual and more democratic
processes of peace, and the election of 1920 reflected this senti
ment.
But the American people, the overwhelming majority of the
American people, believed in the principles of progressive
democracy. Nearly all the Democrats are progressive and over
half of the Republican citizens are progressive and have been
for years, as was shown in the election of 1912 when Roosevelt
received 4,126,020 votes and the lovable, genial Taft only 3,483,922. The American people are progressive, and they wish to
have a progressive Government. This was most clearly indi
cated in the election of 1922 when so many stand-pat, conserva
tive Republicans were defeated and progressive Republicans and
3 9 S 7 9 — 23G G 5
13
Democrats sent to the House of Representatives and the Senate
by that election.
In Oklahoma not less than 75,000 Republicans voted the
Democratic ticket in 1922.
The people of America are not altogether blind party follow
ers, but to a large extent the people regard political parties as
a means by which to make effective their will. The time has
come when Congress and the Senate should voice the aspirations
of America and of mankind for international liberty, inter
national justice, international righteousness. If it did nothing
more than express its opinion in an intelligible form it would
probably suffice.
But, Mr. President, America should discharge its full re
sponsibility before God and before man and call the leaders of
the world together in Washington for an economic and political
conference to complete the work of overthrowing militarism
already so largely accomplished. It was a splendid thing, in
pursuance of this great advance, which President Harding and
Secretary of State Charles Evan Hughes accomplished in
bringing about the four treaties limiting naval armament. It
had my heartfelt approval because it was a fine step forward.
It is time to take another step forward.
It is time for President Harding to fulfill his promises to
.America.
It is time for the Republican Party to meet its promises of
1920 to America with regard to international peace.
Let us not be content to be silent and allow the days to pass
by while another world war is being bred in Europe. ' It is our
duty to Europe, as well as to our own people, to speak and to
give the world a forum in which to speak, and the nations of
the earth, when assembled in Washington City, in a favorable
atmosphere, comparatively free from intrigue, will be able to
give voice to the aspirations of the human heart, to the aspira
tions implanted in the soul of man by the Master Maker of men.
It would be another Pentecost.
America will then be able to fulfill the high destiny for which
she has through the last century been slowly and surely pre
pared.
Mr. President, our responsibility in this matter demands ac
tion.
America already has the financial and commercial leadership
of the world and by equipment is the only great Nation capable
of assuming the moral leadership of mankind and leading
peacefully the way to international liberty, international under
standing, international justice, international prosperity, and
happiness.
3 9 8 7 9 — 230G 5
o
DEMOCRACY
LET TH E PEOPLE
RULE
AN AD D RESS B Y
HON. ROBERT L. OWEN
UNITED STATES SENATOR
FROM OKLAHOMA
DELIVERED TO THE DEMOCRATS OF MICHIGAN
AT DETROIT, MICH., FEBRUARY 22, 1S23
A T A DIN N ER IN H O N O R OF
HON. W. N. FERRIS, SENATOR ELECT
AND HON. ROBERT H. CLANCY
CONGRESSMAN ELECT
P rin te d in th e C O N G R E S S IO N A L R E C O R D
T u esd a y , F eb ru a ry 27, 1923
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O F F IC E
1923
8 9 8 7 8 — 23G 04
AD DRESS
OF
1-ION.
U N IT E D
To
the
ROBERT
STATES
SENATOR
L.
FROM
OWE N,
OK LAH O M A,
D emocrats of M ic h ig a n , at D etroit , M ic h ., F ebruary
a t a D in n er in H onor of H on . W. N. F erris , S en
E lect , and H on . R obert C l a n c y , C ongressm an E lect .
22, 1923,
ator
Ladies and gentlemen, it gives me great pleasure to join with
you to-day in paying honor to our splendid Democratic Senator
elect, Hon. Woodbridge N. Ferris, to our brilliant new Demo
cratic Congressman, Robert H. Clancy, and to the Michigan
Democracy. All Democrats love the name of Washington, Jef
ferson, Jackson, and Lincoln, who first promoted the great prin
ciples of our party.
The Democrats of America have had a glorious record of
accomplishment in advancing the liberty, prosperity, and hap
piness of the people.
It was the Democrats, under Thomas Jefferson, who de
manded and secured the first 10 great amendments to the Con
stitution of the United States, declaring as fundamental prin
ciples thereof freedom of speech, freedom of religion, freedom
of the press, the inalienable right of every man to life, to
liberty, to the pursuit of happiness, to a trial by jury, to sum
mon witnesses in his behalf, to immunity from a second trial
for the same offense, and from unreasonable searches and
seizures.
It was the Democrats who, under Thomas Jefferson, advo
cated universal manhood suffrage.
It was the Democrats that demanded and carried into effect
the public education of the people and built up the common
schools.
The advance of liberty, the education, the intelligence of the
people has been steadily fostered and promoted by the Demo
crats of America.
The Republican Party was also based originally on Jeffersonian
Democratic principles. In 1800 it overthrew the leaders of the
Democratic Party who had become the advocates of negro slav
ery. In a few years, however, thereafter every selfish interest
that, wished to use the powers of Government for private ad
vantage gradually attached itself to the Republican Party,
courted its leaders, became busy in its organization, contrib
uted to its elections, promoted its nominations, and steadily
obtained an increasing influence in its management. Unhap
pily it seems to be the history of all long-dominant parties.
When in 1912, after many years, it became obvious that an
invisible government of organized commercial and financial
3 9 8 7 8 — 236G 4
3
? fi? ShS6S! had f ained contro1 of the organization of the RenubTTn^f J ^ ty. ancl of the governing powers of the people of the
United States, the spirit of democracy, that sleeps but never
dies, arose in the hearts of the Progressive Republicans under
the leadership of Theodore Roosevelt, and by this revolt there
S ? Doiuocratic Party ’its first real opportunity
since the Civil War to demonstrate that it had, through tribubf
S ™ ’ cf iae back t0 tke true principles of Democracy of Jeffero
oon, of Jackson, and of Lincoln, and magnificently the Pomn
crat e Party responded. It , ™ a s s i s t e d T S y « £ s i o “ ™ v
patriotic Progressive Republicans
occasions oy
The Democratic Party in 1913 obtained control of the Presi
dency under Woodrow Wilson and both Houses of Congress, and
put through a magnificent program of progressive legislation
■tkt tari» ll"°m a raon°Poly tariff to a true reve
nue tariff affording all the protection honestly needed.
cratic management T it r c L o v e d °unjust tariff' d i s S i n S i s
mately imports measure exports and exports measure fmnorts
It established the Tariff Commission (39 Stats 795) to tni-A
fte tariff out of politics aud deal with it stricHy a® a businesl
P R O G R E S S IV E
IN C O M E
TAX.
It placed the taxes on those best able to pay the taxes and
W°re B10r° justly dae’ « took t L tax Horn
the backs of the consumers and placed it upon incomes by the
progressive-income tax, so that those who could pay the cost of
^ 6 , S e p T T T m f 110^ diStreSS Sb° Uld d° S°- (3° U* S - S ta ts
It passed a progressive-inheritance tax, so that the wealth
M l M a r l io n .)
^
itS °Wn
% 'S X
It Passed the excess-profits lax, to compel tliose profiting by
S s?
T a r t03 o i 7 T
rar
^
St“ S.Pi o 1ifF fb C24™ ™ °,ite
a
THE
“ “ “ “ °* » " • ®
fOT the Same rcason-
<40
FARM ERS.
It made a resolute effort to benefit the farmers of the country
and to improve our agricultural output. For instance—
Y
fG
y'm l0an act' enablinS the farmers of the
country to obtain cheap money on long time from the investin'public through nontaxable farm-loan bonds Over $700 000 O P
O
have been loaned to farmers, and under tifis system* uUiSSte*
the faimers of the country will get nearly all the money they
reqmre at the cheapest rates. (39 Stats. 360, July 17, 1916. ) Y
I he farm loan act had the effect of compelling land-mort'-a'-e
“ “
> e e n T S
Agricultural Department in agriculture, horticulture
398^23664
e>
eC° n° mics’
animal
and preirvTng
foods, raising poultry, etc., lias been put at the service of every
farmer and every agricultural county in America by trained
men and demonstration farms. (38 Stats. 1080, March 4, 1915.)
It should not be forgotten that it was the Democratic Party
that established the Agricultural Department.
The Democratic Party passed the good roads act and appro
priated millions to build, by cooperation with the States, hard
surfaced roads connecting the farms with the cities, to the ad
vantage of both. (39 Stat. 355, July 11, 1916.)
The Democratic Party inaugurated and vigorously expanded
the rural route system— delivering mail to the farms.
It built up the parcel post system, carrying parcels to and
from tlie farm, and to and from the cities. Do the American
people or the farmers want any of these acts repealed?
What has tlie Democratic Party done?
LABOR L A W S .
It has shown its deep desire to serve those who labor.
It established a Department of Labor; lias developed i t ; lias
made it useful in steadily improving the conditions of life for
those who labor. (37 Stats. 736, March 4, 1913.) It has estab
lished employment bureaus to bring the man and the job to
gether. It helps to settle disputes between labor and capital.
It has developed the Bureau of Mines and the Bureau of
Standards. Each bureau of very great value.
It passed the child labor act, to prevent employers from deny
ing children their right to be educated, and to have some of the
freedom of youth. (39 Stats. 675, September I, 1916.)
It passed the eight-hour law— one of the great accomplish
ments desired by organized labor. (39 Stats. 721, September 3,
1916.)
It passed laws providing for the minimum wage.
It passed the workmen's compensation act, for accidents and
death in industry. (40 Stats. 961, September 13, 1918.)
It exempted combinations of laborers and of farmers from
the inhibitions of the antitrust act.
It passed a great act declaring tliat “ labor is not a com
modity:’ This act is regarded as a magna charta for labor, and
forbids labor, consisting of human flesh and blood, _to be handed
about as a chattel. (38 Stats. 731, October 15, 1915.)
It passed an act providing for vocational instruction and
is engaged now in giving vocational instruction to many of our
young soldiers returning from abroad who have sought this
advantage. (39 Stats. 929, February 23, 1917.)
It passed the seamen’s act to give liberty to those who
labor on the high seas, to put an end to the slavery practiced
on sailors, to provide better conditions of life at sea. and safety
at sea for the sailors. This legislation has been of very great
value in raising the wages of sailors and making the profession
more attractive to young men. It was a necessary step in order
to provide self-respecting men who would be needed for tlie
great merchant marine which the Democratic Party desired.
(38 Stats. 1164, March 4, 1915.)
MERCHANT
M A R IN E .
The Democratic Party-built up a gigantic merchant marine,
with 10,000,000 tons of shipping, big enough and strong enough
3 0 8 7 8 — 23GG4
to take our commerce and our flag to every port in the world.
This alone is a monumental service to the American people.
M O N O P O L IE S .
It did many things to abate the evils of monopoly.
It passed the Clayton Antitrust Act, providing various means
with which to check the practice of monopoly. (38 Stats. 730
Oct. 15, 1914.)
It established the Federal Trade Commission, with authority
to suppress unfair practices in commerce. The Federal Trade
Commission is destined, by its example, by its policies, and by
its work, finally to teach the American people how to control
the abuses of monopoly and of profiteering. (38 Stats. 717
Sept. 26, 1914.)
I he greatest of all monopolies in America was the monopoly
of money and credit, known as the Money Trust.
FED ERAL
ItE S E R V E
ACT.
The Democratic Party passed the Federal reserve act, estab
lished 12 credit centers, with 12 great Federal reserve banks
undei the control of the Government of the United States
thi ough the I ederal Reserve Board, so that any citizen having
sound credit, based on commodities or on actual commercial
transactions, could have his note underwritten by his local bank
and get money from the Federal reserve bank. This act took
from the Money Trust the monopoly of credits (38 Stats. 251,
Dec. 23, 1913) and put the power over credit under the control
of United States Government officials.
This act has enabled the 25,000 banks in the United States
to accommodate our national commerce without asking permis
sion of any private monopoly. This act has made financial
panics impossible. It has given great stability to the banks
and to credits. Under this act in eight years the resources
of the banks have increased from twenty-five billions to fiftysix billions. Not a single national bank failed in 1919.
This act enabled the United States to finance Europe to
organize and conduct and to win the greatest war in history.
The Democratic Party developed the postal savings bank's
for the accommodation of those timid people who do not deal
with the banks but are willing to trust their deposits with the
Government, and their deposits are thus made available for the
banks. Under these acts the banks of the United States have
had the greatest prosperity in their history and at the same
time have substantially lowered the rates o f interest to Ameri
can business men.
It has passed many acts improving the Public Health Service
for the conservation of human life.
I 'O l ’ U L A R
GOVERNM ENT.
It has done many things to promote popular government.
It was due to the Democratic Party and the Progressives that
the direct election of United States Senators was put into the
Constitution. This amendment has made the Senate of the
United States more responsive to the opinions of the people,
and will make it still more responsive than it is now.
The Democratic Party democratised the committees of the
United States Senate by giving the committees control of the
chairmen and of conferees.
The Democratic Party established modified cloture in the
Senate so that a few men could not by unlimited debate per3 9 S 7 8 — 23GG4
manently defeat tlie will of the Senate itself. (191<, vol. oo,
p. 19.)
It passed an act forbidding bribery in elections.
PEACE
T R E A T IE S .
It negotiated peace treaties with all the important nations
of the world except Germany* Austiia, L>ulgaiia, and Xurkey,
who wanted war—and got it.
IT
CONDUCTED
THE
WAR
TO
V IC T O R Y .
It kept this Nation out of war until it became clear that the
liberties of America and of the world were in jeopardy from
the aggressive conduct of the Teutonic allies. When war be
came necessary for the protection of the honor, the dignity, the
liberties of the American people, the Democratic administration
organized the Council of National Defense; organized the Na
tion for war, down to the very crossroads; passed the declara
tion of tear and the great war measures; established the War
Industries Board, the War Trade Board, and the food and fuel
control; financed the entente allies; passed the war marine in
surance a ct; set up the War Risk Insurance Bureau; organized
over 30,000 four-minute men; called to the colors 10,000,000
Americans; raised an army of over 1/,000,000 men; expanded the
Navy and merchant marine; provided the munitions of tear;
trained and transported the required forces to Europe; pro
tected them, from disease and vice as far as humanly possible;
broke up the German submarine campaign; crumpled the. lines
of the German troops in France; crushed the morale of the Teu
tonic forces and compelled their military leaders to beg for an
armistice, in effect an unconditional surrender, thus saving the
civilisation of the world from the greatest miltary menace in
the history of mankind. (39 Stats. 649 ; 3S Stats. 711.)
p r o g r e s s iv e
r e p u b l ic a n s
.
We should not fail to express our respect for the patriotic
Republicans and citizens of other parties who loyally cooperated
in winning this Great War and our gratitude to those progres
sive Republicans who cooperated with the Democrats in the
great legislative program of the six years of Democratic con
trol.
The Democratic Party passed the “ selective draft act,” by
which rich man and poor man, educated man and ignorant man,
Protestant and Catholic, Jew and Gentile, black and white,
took their position side by side on the battle line or in the
service of the country where each was best fitted to protect the
liberties of their common country. Never was a more demo
cratic act passed. No man was permitted by law to buy a sub
stitute with money, but every man’s life and service was put
upon a basis of equality in the defense of his country. (40
Stats. 76, May 18, 1917.)
What man had the impudence to question the Americanism
of the Democratic Party in all these great accomplishments?
What is “Americanism ” if it be not the great policies which the
Democratic Party have put into execution when it stamped out
sedition at home, whipped the enemies of liberty abroad, and
made America the commercial, financial, and moral leader of
all the world, so that all great nations do homage to the United
States, and small nations, when they bend their heads in prayer,
pray God to bless the American people. America has become
3 9 8 7 S — 23G G 4
the beacon light to all mankind, and no narrow partisan can
hide this light under a bushel or question the glorious Ameri
canism of the Democratic Party.
Under the War Risk Insurance Bureau was written insurance
for our soldiers abroad of $40,000,000,000, and under our war
marine insurance act American commerce was protected with
out loss to the Government.
The Democratic Party passed the War Finance Corporation
act for the protection of our business men under the extraordi
nary interruption and stress of war.
It passed the capital-issues act in order to safeguard all
credits of the country and make them available for war
(40
Stats. 512, April 5, 1918.)
It organized the Red Cross movement down to the cross
roads, and in this Great War enterprise the Democratic Party
gladly availed itself of the patriotism of citizens of all parties.
G R E A T A M E N D M E N T S ----- W O M A N 'S
SUFFRAGE;
P R O H IB IT IO N .
By the combined efforts of the progressive men in both
parties two great amendments to the Constitution of profound
social and moral significance have been passed—-woman’s suf
frage and prohibition. Of still greater importance is the fact
that these great reforms were due to the progressive men and
women in the homes of America.
THE
l '
E L E C T IO N
OF
1918.
Before the Great War had terminated successful!y there
came on the election of 1918. in which the party lost many votes
because men who were aggrieved by the conduct of the war by
the selective-draft act, by the operation of the Army and naval
forces; many men injured by the priority orders and the con
duct of the railroads where the administration had to give the
right of way for war purposes; many men injured by the Gov
ernment commandeering materials and men; many men hurt
by the sudden rise in prices, due to the Government competing
for men in the shipbuilding yards and in munition plants* nnnv
offended by high taxes and by the extravagance and waste of
war visited their displeasure on the Democratic Party.
Many men of German blood or of German sympathy who
resented the United States going into war.
Many men who opposed war as a principle were either
turned against the Democratic Party or their devotion to the
party was weakened.
There was a general disposition to blame somebody, and the
Wilson administration was the victim.
The Democratic Party, with its leading men intensely occu
pied with the winning of the war, was in no position to present
the accomplishments of the Democratic Party to the people of
the country.
Moreover, in 191S the United States had the extraordinary
affliction of “ Spanish influenza,” which killed in that year
447,000 of our people, and over 3S0,000 of them died in the fall
of 1918. Under the advice of physicians political meetings
were forbidden.
Was it any wonder the Democrats lost both Houses? More
over, the result of the war was still unknown. It is now gen
erally conceded that the President’s famous preelection letter
alienated many liberal or progressive Republicans and vitalized
those who were partisans to strenuous activity in resentment
3 9 8 7 8 — 23GG-1
9
of what they construed to be an affront and lack of apprecia
tion of their loyalty in supporting the war activities of the
administration.
Mr. Chairman, I wish it might be truly said that none of
our people during the Great War, either Democrat or Repub
lican, had made any mistakes in the management of the war in
the Army or Navy, or of the railroads, or of the telegraph or
telephones, or of any of the Government’s affairs [Republican
and Democratic citizens were almost equally divided in these
activities, but the percentage of errors and wrongs was very
small considering the magnitude of our operations in the war] ;
but I can truly say that the record of accomplishments in the
six years of complete executive and legislative control by
the Democratic Party is the most magnificent ever made by any
party in any country.
The Democratic Party found the United States in depression
in 1913, threatened with a panic. The New York banks«declared in the summer of 1913 that they did not expect to be
able to furnish the money to move the crops in the fall, and the
country banks were advised not to expect the customary redis
count privileges. The Democratic administration thereupon
furnished the money out of the United States Treasury to move
the crops and repeated the same operation in 1914, and, after
six years of Democratic management, the country was brought
up to a condition of the greatest prosperity in its history.
No party in history ever deserved better of the people than
the Democratic Party in 1918.
THE
PEACE TREATY.
Our President, whose leadership and whose sympathies were
behind the record of the last six years, went to Paris and
brought back a world peace treaty, establishing peace among
all the nations of the world, by which all the nations of the
world pledged themselves to respect and preserve the territorial
integrity and political independence of other nations; to settle
all international disputes by conciliation, arbitration, and
peaceful adjustment; to end competitive armament; to coerce
any outlaw nation again attempting to deluge the world in
blood by a world-wide economic boycott and by such pressure
as should be necessary to restore order.
After many months of study and acrimonious debate the
treaty of peace at last had four-fifths of the Senate either in
favor of it without amendment or with reservations that, after
all, did not seriously change its meaning.
Acrimonious partisanship defeated the entry of the United
States into the league, at least temporarily, but the covenant
of the League of Nations ushers in a new democratic era in
which all the great nations have agreed that all just government
is based on the consent of the governed.
The monarchies and autocracies are crushed. The democra
cies of earth are completely and overwhelmingly triumphant
throughout the whole world.
It was the Democratic Party that organized the American
people into a fighting force which protected the liberties of man
kind and overthrew on the battle fields and destroyed the mili
tary dynasties of Prussia, Russia, Austria, and so forth, the
immemorial enemies of democracy. All of these countries have
done with the rule of the few by divine right, and in them are
3 0 8 7 8 — 23G G 4
being organized now peaceful, productive democracies which
will add to the stability and prosperity of mankind.
Democracy means the rule of the people, and the rule of the
people means just what Abraham Lincoln said, “ A government
of the people, by the people, and for the people.”
It will be a government for and of the people if it is a gov
ernment truly by the people. To have a government by the
people, the people must have a right to really nominate their
representatives who shall write and who shall execute the law.
This means a democratic mandatory primary.
The primary makes necessary the publicity pamphlet, printed
at public expense, giving the arguments for and against men
and measures and sent to every voter G days before election.
O
The people must have the right to select their representatives
without fraud and corruption, and this means a democratic
thorough-going corrupt practices irretention act.
They must have the right to a secret ballot so as to prevent
intnnidation, and this means the Australian or democratic se
cret ballot.
They should have in a highly organized government adequate
minority representation, and this means proportional repre
sentation, so that minorities are not submerged, denied a hear
ing, or ignored. This means democratic proportional repre
sentation.
The people in selecting their representatives should not be
confused with a ballot so long and complicated that they can
not determine the merits of the candidates presented. For this
reason the short ballot is one of the most valuable instruments
of modern democracy.
The minority should be heard but should not be allowed to
throttle and veto the will of the majority. For this reason
cloture in the United States Senate is democratic and should
be demanded so that a minority may not veto the majority
through the parliamentary abuse of so-called unlimited debate,
by which a few men can talk any measures to death which the
majority desire.
The representatives of the people should have the right as
soon as elected to meet and pass the laws and make effective
at once the will of the people. Therefore, a Congress which is
discredited should no longer be allowed to meet and pass the
laws as at present is done, but the new Congress should be im
mediately assembled and the old Congress immediately dis
solved in order that the will of the people may be promptly
made effective.
In order that the President of the United States may give his
heart and soul to the public interest, unmoved by ambition or
the selfish advice of his Cabinet and of his tens of thousands
of cooperating officials, he should be limited to one term, prefer
ably six years. In this way a President and the officers about
him would not conduct their office with a view to their reelec
tion but with a view to serving the best interests of the people.
In order that the Constitution of the United States be made
more completely an instrument through which the people might
rule, it should be made more easily amendable, permitting
amendments to be proposed by a majority of the two Houses
or by a two-third vote of either House and made effective
by a majority vote of the congressional districts through the
30 87 8— 23G 6I
majority vote of the voters voting in each congressional dis
trict. At present, a minority of the House or of the Senate or
a minority of the States may veto the will of a majority of the
House, of the Senate, and of the States, because it takes a twothird vote of the House, a two-third vote of the Senate, and a
three-fourth vote of the States to pass a constitutional amend
ment.
I rejoice that women have been given an equal vote with men.
This is fundamental, genuine democracy. It gives a woman a
more nearly equal chance to earn her living by equal work
with man. It gives her the liberty to which the mothers of
men have a fundamental right. It brings into the party service
a new vision of what the laws ought to be in order to make the
home safe and comfortable. The woman thinks in terms of the
safety of the house, of the police protection of the home, of the
sanitation of the home, of the cleanliness of the streets, of the
proper disposition of the refuse from the home, of pure food
for the home, of pure water for the home. She thinks of the
children, of their safety, of their proper schooling, of their
proper clothing. She thinks in terms of the family purse, of
the cost of living, of what she has to pay for food and clothing
and furniture and rent, and all these vital factors have every
thing to do with the welfare and the happiness of mankind.
She thinks in terms of decorous, moral, clean living. She
thinks of the conduct of public officers from the standpoint of
morality as well as efficiency. Her views will help to make
clearer the views of men in framing the difficult structure of
government.
Women will resent the heartless policy of deflation that
caused the terrible depression of 1920-1922. When the Repub
licans organized the new Congress on May 19, 1919, they put on
a policy of deflation. They caused the Federal Reserve Board
to demand deflation of credit by the banks.
Obviously the purpose was to make the dollar buy more and
commodities and labor buy fewer dollars. It was a policy to
benefit the rich creditor class and to hurt the debtor class.
The Republicans assumed full responsibility in the McCormick
Senate resolution of May 17, 1920, in their national platform,
and in Senator Harding’s speech of acceptance July 22, 1920.
This resolution, passed Slay 17, 1920, was as follows:
“ Resolved, That the Federal Reserve Board he directed to
advise the Senate what steps it proposed to take or to recom
mend to the member banks of the Federal reserve system to
meet the existing inflation in currency and credit,” etc.
R E P U B L IC A N F A L S E P R E T E N S E S .
Immediately after the Republican national platform o f 1920
declared, under the false pretense of lowering the cost of living,
as follow s:
“ We pledge ourselves to an earnest and consistent attack
upon the high cost of living by rigorous avoidance of further
inflation in our Govermm
borrowing and by courageous and
intelligent deflation of our overexpanded credit and currency.”
Mr. Harding, in his speech o f acceptance of the Republican
nomination, July 22, 1920, said :
“ Gross expansion of currency and credit have depreciated
the dollar. * * * Deflation on the one hand and restoration
of the 100-cent dollar on the other ought to have begun on the
39S 7S — 23G 64
day after the armistice. * * * We pledge that earnest and
consistent attack which the party platform covenants. We will
attempt intelligent and courageous deflation and strike at Gov
ernment borrowing, which enlarges the evil.”
In other words, the Republican Party assumed absolute re
sponsibility for deflating credit and currency on the false pre
tense of lowering the cost of living, whereas the purpose was to
increase the purchasing power, not of the transitory dollars
received for wages and for agricultural and manufactured com
modities, but to increase the purchasing power of the dollars
permanently invested in bonds, mortgages, and bank stock,
while the demand was being made to cut down the number of
dollars to be received for agricultural and manufactured com
modities and for wages. Yet the monopolies could artificially
maintain the high prices for commodities they controlled.
From this false policy has arisen the conflicts, in large meas
ure, between capital and labor, the railroad and coal strikes,
and textile strikes.
The deflation demanded by the Republican platform and
Republican leaders has not served to really lower the cost of
living, but to diminish production and bring on a terrible de
pression.
D E F L A T IO N
CAUSED
P A N IC .
Under the policy of deflation the bank deposits of the national
and State banks were deflated from 1920 by September 21, 1921,
over $3,000,000,000.
The Federal Reserve Boards contracted their loans over
$2,000,000,000, and the contraction of Federal reserve notes and
Federal reserve bank notes by September 21, 1921, had dimin
ished $1,060,000,000— a total of over $6,000,000,000 of credit
deflation, with a shrinkage of private credits unrecorded in the
banks of a still larger amount.
With the result that the value of agricultural commodities,
of manufactured goods suffered a tremendous deflation, bank
rupting hundreds of thousands of people, farmers, stock grow
ers, dealers, manufacturers, and so forth, and causing the ruin
of many banks, and bringing on in 1921 and 1922 one of the
most painful and injurious industrial depressions from which
we have ever suffered.
The expansion of credit to meet the cost of war was justified
and should not be stigmatized as inflation or violently deflated.
The people are ruined when sudden and violent deflation is
forced on them. The reserve act was framed to stabilize, not
destabilize, credit.
From 1913 to 1919 the Democrats brought great prosperity.
From 1919 to 1922 the Republicans produced a profound indus
trial depression.
After all, the great modern problem is to pursue a policy
which shall engage all of the productive energies of men and
women efficiently, and produce abundantly and distribute eco
nomically the things which men need, commodities, building
materials, clothing, food, transportation, literature, art, and
articles of luxury, for all these things men need and desire.
We have built up in America through gigantic corporations
very great productive companies in steel, metals, building ma
terials, textiles, transportation, and so forth. Some of these
39S78— 23664
13
great enterprises pursue the policy of limiting production in
order to obtain a high percentage rate of profit on turnover, and
some use unfair practices by which they break down opposition
and destroy tho independent producer and distributor.
It would be better even for predatory monopolies and of
course for honest big business, as well as for the producers and
consumers, to end the abuses of uncontrolled private monopoly.
We should require all interstate corporations dealing in the
necessaries of life to take out a Federal license under conditions
that will assure their obedience to the antitrust law and the
regulations of the Federal Trade Commission affecting fair
practices in commerce.
The Federal Trade Commission should be expanded, its powers
enlarged, and men put and kept on it who are known to be at
heart opposed to unfair practices. It should be intrusted with
the civil and criminal prosecution of those who violate the anti
trust laws. It should have its own attorneys for this purpose.
The antitrust act should be put under the administration of
the Federal Trade Commission and taken out of the Department
of Justice so as to concentrate this service and make it more
efficient.
The stock and commodity exchanges should be put under
Government control, and an adequate act governing the issuance
of securities should be passed to prevent frauds on the public
by worthless securities.
The tax laics should he revised and simplified to prevent
evasion of taxes and to place the taxes equitably.
The Federal reserve act should be so administered as to give
stability to credit and to prevent either inflation or deflation as
far as the Federal Deserve Board and the Federal reserve banks
have the power.
The farm loan act should be strengthened, simplified, its ad
ministration greatly expanded along liberal lines.
Freight and passenger rates, telegraph and telephone rales
should be based on the actual capital invested, and a thorough
valuation made under a new administration with a change of
personnel to assure a new and correct valuation of these prop
erties.
It is of supreme importance that the personnel of boards
having great power in the administration of the law should
be composed of men known to be free from undue corporate
influence.
There should be worked out a thoroughgoing bill providing
for national and State systems of cooperative marketing and
warehousing.
Special facilities should be afforded for chartering cooperative
buying and selling societies to eliminate waste and develop
profit-sharing in industry, giving such societies the right to
manufacture as well as to buy and sell.
The late tariff act should be amended so that no tariff tax
should exceed the actual difference in the cost of production
at home and abroad.
The Tariff Commission should administer the tariff under the
principles laid down by Congress, including reciprocity with
all nations as a means of marketing our surplus products,
stimulating our home production, and enabling other nations
to build up credits in America by the shipment of their corn3 9 8 7 8 — 23G G 4
Ml-
14
modities to our shores with which to buy our commodities,
and with which to pay us the vast indebtedness growing out
of the late war.
The output of modern machinery is so enormous that all the
world can be supplied with clothing, with shelter, with food
with entertainment, and with luxury if the energies of men
are applied during reasonable hours and the profits of labor
efficiently and fairly distributed.
The processes of justice of the courts should be made swift
and economical. This involves a thorough overhauling of our
judicial system with this end in view.
llie education of the people should be vigorously pressed
in every possible way by stimulating the public schools col
leges, universities, the press, the pulpit, the forum, the moving
pictures, and so forth. The people will do the rest.
We should no longer regard America as isolated," separate,
and apart from the world. We should no longer permit oursel\ es to be misled by the stupid talk of entangling alliances,
but America should actively cooperate with the other great free
nations of the earth in making effective the principles of the
League of Nations. We should express our approval of its
principles. We should, with such reservations as Congress may
impose, adhere to this league. America should lead in a de
termined effort to abolish international ignorance and hate
because America has become at last the financial and the com
mercial leader and should now become the moral and the
spiritual leader of mankind.
The Democracy of America has now a great opportunity to
make still more glorious the great Democratic principles of
justice and liberty in America and throughout the world The
God of Democracy is a spirit, and they who worship Him must
worship Him in spirit and in truth.
3 9 8 7 S — 23G G 4
o
e
r
a
r
SIXTY-EIGHTH CONGRESS, FIRST SESSION.
annex portions of Germany,
THE INNER SECRETS OF
EUROPEAN D IPLO M AC Y DISCLOSED FOR
Balkans.
THE FIRST TIME TO THE AMERICAN PUBLIC.
The foreign office of France
and expand its power in the
in like manner was a very old
and venerable institution, with employees who had spent their
How European Diplomacy Affects American Welfare— No lives in the service and who had the ambition and fixed purpose
Foundation Whatever for Canceling the Debts Due Amer to increase the power, financial and commercial, territorial and
political, of “ France ”— that is, the Government of France—
ica— American Prices and Taxes: The Payment o f a Bonus throughout the world.
Seriously Affected by European Instability Due to Secret
Under the constitution of 1875, the President of France
European Diplomacy.
has a right to make a secret treaty on his sole authority with
out the advice or consent o f the French Senate or the French
Parliament.
S P E E C H
Joseph Barthelemy, French professor of political science,
OF
in “ Democracy and Foreign Policy, 1917,” page 102, makes
the following statement of the principles of the French con
stitution of 1875:
HON.
R OB E RT
O F
In
t h e
S
e n a t e
L.
OWEN,
O K L A H O M A ,
o f
t h e
U
n i t e d
S
t a t e s
,
December IS, 1923.
Mr. OWEN. Mr. President, the interest of the American people
Is affected in many ways by the present instability in Europe.
Until the nations are stable they can not repay the loans due
the United States, and we can not reduce taxes as we should be
able to do. The European demand for American goods, the
ability to pay for such products, the internal effect on the
prices of agricultural products and manufactures all depend on
European stability, as well as the equally important matter of
world peace and international good will.
If American ideals were accepted by the statesmen of Europe—
the ideals of international understanding and good will, of in
ternational justice and helpfulness—the European nations could
disarm, balance their budgets, stabilize their currency, go into
maximum production, and into an era of prosperity and peace.
Under those conditions America could afford to make loans
to Europe sufficient to assist them meet such objects.
Europe Is still suffering somewhat from the old ideals which
formerly dominated their respective foreign policies In which
commercial imperialism sought by bayonets and Intrigue to
expand the power and prestige of each nation.
Previous to 1914 Russia, France, Great Britain, and Germany
conspicuously were seeking to expand their control or hege
mony over large areas of the earth’s surface in Africa, Asia,
and elsewhere, occupied by the unenlightened and ignorant peo
ples of the earth, as well as in Europe.
Great Britain, through its foreign office, its military and
naval power, during many generations had established under
such a policy great colonies throughout the world until its rule
governed 440,000,000 people.
Russia occupied and ruled under a like policy about onesixth of the entire surface of the land of the world and had
under its Government 150,000,000 people speaking many lan
guages and dialects.
France, with its colonies, controlled 90,000,000, and had its co
lonial claims in Asia, Africa, South America, and the islands of
the sea. At one time France controlled the lands now occupied
by the United States west of the Mississippi River, including
Louisiana, and claimed eastern Canada. When we were in the
great Civil War the French Government took part in sending
and backing Emperor Maximilian in Mexico, and was com
pelled by the United States to withdraw by show of military
force.
Belgium has its Congo, Holland its Java, and Germany had
secured portions of Asia, large colonies in Africa, and various
islands of the sea.
These ancient Governments controlled their foreign relations
through a very compact, powerful, and, to all Intents and pur
poses, imperial government. Old Russia was an absolute mon
archy, with a foreign office pursuing what they called a “ his
toric mission,” having ever in view the acquisition of larger
territory, greater power, trading with the great powers and
coercing the smaller powers, planning to get parts of Manchuria
and China and Persia, laying covetous eyes on Sweden and
Finland, determined on controlling the Dardanelles, desiring to
76876— 11
The constitution of 1875 was the result of a transaction brought
about, among other things, by the force of conditions between a
monarchist majority unable to establish a monarchy and a repub
lican minority. Under all of the fundamental problems of consti
tutional right it adopted a transactional solution; that is, what it
did notably in that which concerned the direction of foreign affairs.
Here upon this point is a r6sum6 of the arrangements which should
not be forgotten to consider together with the general rules o f the
parliamentary regime.
First, in principle, the President of the Republic a l o n e represents
the nation in foreign affairs; it is t o h im are accredited the am
bassadors of foreign powers; it is i n h i s n a m e in which the ambassa
dors of France speak; h e conducts the negotiations; it is b y h i s s i g n a
t u r e that he binds the country in international treaties of which
he is the juridical author.
On page 105:
The principle expressly set forth by Article 8 of the law of the
16th of July, 1875, is that the President of the Republic n e g o t i a t e s
a n d r a tifie s tr e a tie s upon
h is so le a u th o r ity .
On page 109:
Almost all of the great international acts which have marked the
turning point of our foreign policies during the half century, almost
all those which have exercised a decisive influence on the destinies of
France, are the work of the Government alone and have been rati
fied by the President of the Republic u p o n h i s sole a u t h o r i t y . It is
in effect that article 8 of the law of the 16th of July, 1875, does not
submit to parliamentary approval the most important perhaps of all
the treaties, the great political treaties and the treaties of alliance.
It was under this authority that the secret treaty between
Russia and France of 1892 contemplating military operations
against Germany was executed and withheld from the Frencli
Parliament. It was under this authority that the secret treaties
of 1916-17 to divide German and Austrian territory between
France and Russia were entered into.
Great Britain's foreign affairs are directed in like fashion by
the British foreign office, No. 10 Downing Street, without being
directed by or disclosed to the British Parliament.
Sir Edward Grey, in his agreements with the Governments of
France and Russia contemplating military and naval coopera
tion between Russia, France, and Great Britain along the lines
worked out by the military and naval staffs of Great Britain,
France, and Russia, was able to do so in absolute secrecy. He
did not submit these records to parliament until after the war
had been entered into by Great Britain. Six times the British
Parliament was advised there were no commitments made. (Ex
hibits 11 and 12— How Diplomats Make War, Neilson; Entente
Diplomacy and the W orld; Un Livre Noir, etc.).
It is of supreme international Importance that the world
should understand the structure of these foreign offices and
what they did in bringing about the World War. How they
subsidized and controlled the press, how they formed public
opinion through such means, and taught the people to fear and
hate each other and build up armies to the limit of their taxing
capacity.
Until these methods are thoroughly understood by the world
and corrected, the American ideals of international understand
ing and International good will Is impossible of accomplishment.
l
U2IOD3H 1V K 0ISS3U D K 0D
e
2
C O N G R E S S IO N A L R E C O R D .
and imposed an Indemnity of a billion dollars on France which
left a terrible grievance in the heart of patriotic French people,
which was revenged in the World War. And while during 41
years of the life of the German Empire it did not make war on
Its neighbors, It continually advocated the doctrine of might.
The German leaders taught the value of military preparedness
to the utmost limit of their capacity, and they are jointly re
sponsible with the other nations of Europe for the evil conse
T H E P E O P L E T H E M S E L V E S N O T R E S P O N S IB L E FO R W A R .
quences which have resulted from this false doctrine and a
Many men now think of Germany as composed of bad structure of government irresponsible to the people.
people of criminal intent who wickedly and with malice pre
America has believed, on the contrary, In the homely but wise
pense assailed the innocent, unsuspecting good people of Bel doctrine of Abraham Lincoln, who believed in a government
gium and France. The people of Germany and of France are of the people, by the people, and for the people, and who
grandly said:
equally good.
Of the present population of Germany charged with the
Let us have the faith to believe that right makes might.
payment of reparations, about 20 per cent in 1914 were unborn
Mr. President, the Hohenzollerns and the Hapsburgs, who
babes; about 80 per cent of the German people living in 1914 trusted alone to the sword, and the Romanoffs, who relied
were women and children without knowledge and without alone on brute power, have been punished and we need not re
political power and absolutely innocent of any wrongful pur proach them. Nicholas and his family are all dead. The Aus
pose. There is no adequate moral basis upon which they can trian Emperor and his successor are dead. The Hohenzollerns
be charged with the responsibility o f the war.
were compelled to leave Germany and relinquish all power.
About 10 per cent of the population of Germany were men
With the destruction of the Russian dynasty the secret
capable of bearing arms, about 5 per cent capable of some archives of the Russian foreign office were exposed and printed
slight service, and about 10 per cent engaged in other services by the Revolutionary Government. A portion of them have
as noncombatants, and these groups are intermingled.
been translated into French under the title “ Un Llvre Noir,”
The 10 per cent fit for service had no option whatever and the former secretary of the Russian Embassy at London,
about answering the call of mobilization. If any German had B. De Siebert, has also published 858 secret documents dis
dared to do so, such a rebel under the military dynasty of closing the policy of the Russian Government and of France
Germany then in control would have faced a drum-head court- and Great Britain in relation to this war and in relation to
martial, a firing squad, an ignominious death, and an odious the world, under the title, “ Entente Diplomacy and the W0rld,”
memory as a coward and a traitor to his country.
by De Siebert. It is a “ Matrix of the History of Europe
The same thing is perfectly true with regard to the men of 1909-1914,” which every student of government should read
France, of Russia, of Great Britain, of Belgium, as the case until he knows the inner secrets of entente diplomacy.
might be.
In like manner the secret archives of Germany have been
The people themselves were not responsible for war. If disclosed to view, and of Belgium, and some of the English
they had been responsible they have certainly paid a terrible records have come to light.
penalty, for 8,588.315 of these men were killed or died from
These revelations of European diplomacy and of the Euro
wounds, over 21,000,000 of them were wounded, over 7,000,000 pean methods of conducting foreign affairs should be un
were missing, most of whom died without record. The un derstood by the American people. Perhaps when the world
recorded women and children who died number many millions understands what these records disclose It may become possi
more.
ble for “ the common people, who pay the taxes and who die
If the German and Austrian people were responsible for the upon the battle field,” to exercise a larger influence with their
war they have been punished; 2,972,000 of them were killed, Government leaders and bring about a larger recognition of
7,186,000 were wounded, 3,252,000 were missing.
the importance of international understanding, international
The total number of killed, wounded and missing in the good will, international peace and prosperity.
war was 37,494,000 men and probably half as many women
S O M E S E C R E T S O F E U RO PEAN D IP L O M A C Y .
and children died from war and exposure and famine.
The records to which I have called the attention of the
The cost of this was over two hundred and eight thousand Senate appear to demonstrate that the German militaristic
million dollars ($208,000,000,000) at a low estimate. (E x rulers did not will the war, tried to avoid the war, and
hibits 22, 28, 24.)
only went into war because o f their conviction that the
The people of these countries did not will their own death persistent mobilizations of Russia and France meant a deter
and destruction. This war was brought on by a few men mination on war and were secretly intended as a declaration
in charge of government, responsible for government, pur of war by Russia and France against Germany. The records
suing policies which probably for the most part they thought show that the Russian and French leaders were determined
wise and necessary to advance what they vainly imagined to on war, and intended the mobilizations as the beginning of a
be the “ glory ” and “ honor ” of their own respective nations. war which had for many years been deliberately prepared and
It is futile to denounce the leaders who brought this great worked out by the complete plans of campaign through annual
war on, but it is essential to the future of mankind to under military conferences.
stand what happened and how it happened to prevent again
In 1892 Russia and France entered into the following treaty:
the crucifixion of the world by secret diplomacy.
EXHIBIT I.
There are certain noble and splendid qualities which were
A p p e n d i x C.
common to the Russians, the Germans, the French, the British,
T H E F R A N C O -R U S S I A N A L L I A N C E O F 1892.
the Italians, the Belgians, and others. They were all splen
T h e French issued after the war, when they first disclosed the terms
didly brave, magnificently loyal and patriotic of heart. They
followed their leaders believing that they were defending the of this agreement, a special Yellow Book upon this subject. The essen
tial terms of it can be found in the pamphlet of March, 1919, No.
best interests of their country.
When detached America went into the war it did so with a 136, of the American Association for International Conciliation. The
clearer vision. We were not fighting the German people as body of the engagements is as follows :
D R A F T O F M I L I T A R Y C O N V E N T IO N .
such. We were fighting a military despotism which ruled the
German people and had persistently made war on us. We were
“ France and Russia, animated by a common desire to preserve the
fighting for liberty and Justice as we understood it. We had peace, and having no other end in mind than to ward off the necessities
not a single doubt that the German rulers were exclusively of a defensive war, provoked by an attack o f the forces of the Triple
responsible for the war. We had seen them refuse in The Alliance against either of them, have agreed upon the following
Hague conferences to agree to the principle of arbitration and provisions:
“ 1. If France is attacked by Germany, or by Italy supported by
of disarmament. We heard much of their wonderful army,
of their annual maneuvers, o f their officers drinking the Germany, Russia shall employ all its available forces to fight Germany.
“ 2. In case the forces of the Triple Alliance, or of one of the
silent toast to “ Der Tag.” We heard about their invading
unprepared and unsuspecting Belgium and France and Russia. powers which are a party to it, should be mobilized, France and Russia,
at the first indication of the event, and without a previous agreement
We heard of their poison gas and their atrocities in battle.
And now, Mr. President, there has come out of hiding a great being necessary, shall mobilize all their forces immediately and simul
mass o f evidence previously unknown, previously unsuspected, to taneously, and shall transport them as near to their frontiers as
which we shall be compelled to give attention and which dis possible.
“ 8. The available forces which must be employed against Germany
close that the German leaders, bad as they were, were not
exclusively responsible for the World War. They were cer shall be: For France, 1,300,000 men; for Russia, from 7 0 0 ,0 0 0 to
tainly responsible for having seized Alsace-Lorraine in 1870 800,Of C men.
Until these methods are understood, the great mass of the
people who pay taxes and die on the battle field will never be
able to realize that their hatred of each other Is completely
artificial and a result of the ambition and pride of their
leaders In charge of foreign affairs. It is necessary to stop
the malignant criticism of one people by another people through
the press and by public men If war Is to end.
7 0 8 7 6 — 11
CONGRESSIONAL RECORD
“ These forces shall begin com plete action w ith the grea test d is
patch, so th a t Germ any w ill have to fight a t th e sam e tim e in the
east and in the w est.
“ 4. T h e staffs o f the arm ies o f the tw o c o u n tries sh a ll con stantly
plan in concert in order to prepare for an d fa c ilita te the execution
o f the m easures set forth above.
“ They shall com m unicate to each other, in tim e of peace, all the
inform ation regarding the arm ies o f th e T r ip le A llia n ce w hich is in,
or shall come in to, their possession.
“ The w ays and m eans o f corresponding in tim e o f w ar shall be
studied and arranged in advance.
“ 5. France and R ussia s h a ll n o t conclude a separate peace.
“ 6. T h e present convention sh a ll ha ve the sam e duration as the
Trip le A lliance.
“ 7 . A ll the clauses enum erated above sh a ll be kept absolutely
secret.”
A n exchange o f letters o f tran sm ission and o f un im p ortan t com m ent
upon th i* docum ent by G eneral de B oisdeffre, the arm y representative
who conducted the affair for th e F rench in S t. P etersburg.
T w o letters from M ontebello, F ren ch am ba ssador, to C asim lr Perier,
P resident a t P aris, and one by M ouravieff, R ussian M in ister for Foreign
Affairs, to D elcasse, F rench M in ister for F oreign A ffairs.
A reply by D elcasse.
A ll these Interm ediate docum ents are sum m ed up in the report o f
Delcasse h im se lf to Loubet, P resident o f the F ren ch Republic, on th e
12th o f A u g u st, 1 8 9 9 , when D elcasse has to rep ort w hat he considers,
after a v isit to S t. Petersburg, a stren g th en in g o f th is alliance, so
that it w ill ou tlive even the dissolution o f the T rip le A lliance, aga in st
w hich th e original arrangem en t w a s supposed to be a Justifiable pro
tection. T h e follo w in g is D elcasse’ s report in f u l l :
[D elcasse,
M inister
of
Foreign
A ffairs,
to
L o u bet,
P resident
of
the
French R epu blic.]
P a r i s , A u g u s t 12, 1859.
M-
D e a r P r e s i d e n t : Your excellency know s w ith w h at Idea in m ind
I w ent to St. P etersburg.
Our arrangem en ts w ith R u ssia are o f tw o
kinds— a g e n e r a l d i p l o m a t i c a g r e e m e n t , expressed In the letters of
A u gu st 9, 2 1 , 1 8 9 1 , and A u gu st 15, 2 7 , 1 8 9 1 , signed by G iers, M ohrenheim , and R ibot, and w hich stip u lated th a t the tw o G overn m ents w ill
consider in concert any question capable o f p u ttin g th e peace o f
Europe in J eo p ard y; a n d a m i l i t a r y c o n v e n t i o n o f D e c e m b e r 23, 1893,
t o J a n u a r y , 189k, w hich concerns an aggressive a c t on the part o f one
of th e powers o f the T rip le A llian ce , and w hose d u ration is lim ited to
the du ration o f the T rip le Alliance.
9 n t w h a t w o u ld h a p p e n i f th e T r ip le A llia n c e sh o u ld d is s o lv e
otherw ise than by the volitio n o f all its m e m b e r s ; i f , f o r e x a m p l e ,
E m p e r o r F r a n c i s J o s e p h , w ho seem s at tim es the o n ly bond between
rival and even enemy races, should s u d d e n l y d i s a p p e a r ; i f A u s t r i a
w e re th r e a t e n e d b y a d is m e m b e r m e n t , w h ic h p e r h a p s i s , a f t e r a l l ,
d e s i r a b l e , w h ic h p e r h a p s m i g h t b e c o u n t e n a n c e d , a n d w h i c h , i n a n y
c a s e , o n e m i g h t b e c o m e a n x i o u s t o t u r n t o a c c o u n t T W h a t could be
more capable o f com prom ising the general peace and o f u p settin g the
balance betw een the European fo rce s?
A n d w h a t situ a tio n , fu rth er
m ore, would m ore deserve to find F rance and R ussia not only united
in a com m on plan but ready even fo r its execu tion ?
N ow , it is Just a t the precise m om ent w hen th e m ilita ry conven
tion should w ork th a t i t w ould cease to e x i s t ; born o f th e Trip le
A llian ce, it w ould van ish w ith it.
T h a t s a deficiency w hich has
troubled me con sta n tly since I becam e M in iste r o f F oreign A ffairs,
and It h a s been m y firm resolve to neglect no op p ortu n ity to over
com e it.
I h ave found in your lo ft y and pru den t p a trio tism a pow er
ful support.
Sure o f receivin g from E m p eror N ich olas a friend ly
welcom e, I decided to return to C ount M ou ravieff, w hose view s have
alw ays been in pe rfe ct accord w ith m ine, the v is it w hich he paid me
In P aris la s t O ctober.
A r riv in g in St. P etersbu rg F rid a y evening,
the 4 th o f A u g u st, I w as in vited to b re a k fa st w ith th eir m ajesties
on Su nday
at P e te rh of.
A ft e r b re ak fast the em peror took m e into
his study.
F ir s t he w as good enough to tell me w h a t esteem and
ap proval m y con duct during the la s t F r a n co -E n g lish
crisis had
aroused in him .
W e ran over the different problem s w hich had
arisen du ring the course o f the year and review ed the general w orld
situ ation .
Th en ,
approaching the relations betw een F ran ce
and
R ussia, I revealed to the em peror m y b elief and apprehension that
the allia n ce w ould be disarm ed in case one o f th ose very events
should arise in view of w hich it w as form ed : “ Since our agreem ent
o f A u gu st, 1 8 9 1 , execute all im p ortan t q u estions, does not Y our
M a je sty think th a t the m ilita ry convention o f 1 8 9 4 , w hich is the
in stru m en t for m aking th a t agreem ent effective, should have the
sam e d u ration— th a t is to say, as long as the gen eral and perm anent
in terests o f our two nation s rem ain s o lid a r y ; and do you not think
also th at the w ork o f Em peror A lexander I I I and o f P resid ent C arnot
w ill surely receive th e confirm ation o f Y o u r M a je s ty and o f th e new
President o f th e French R ep u b lic?”
T h e em peror assured me th at such w as his fe e lin g ; th a t he w as
anxious to continue essen tially in the path Ind icated by his fath er
7 6 8 7 6 — 11
3
and to draw closer the bonds forged fo r th e com m on good o f France
and R ussia.
A t th a t m om ent I took the lib erty o f su b m ittin g to the
em peror the d r a ft o f a declaration w hich I had draw n up th a t
m orning.
In It the arrangem en t o f 1 8 9 1 is solem nly confirmed, but
the scope is sin g u la rly e x te n d e d ; w hile in 1 8 9 1 the tw o G overn
m en ts expressed a n xie ty on ly fo r th e m aintenance o f the general
peace, my plan provides th a t th ey should concern th em selves ju st
as m uch w ith “ the m ainten ance o f the balance between the E u ro
pean forces.”
In short, by a tta ch in g the m ilita ry convention to the diplom atic
arrangem en t th is plan assu res to it th e sam e du ration.
T h e em peror seem ed to th in k th a t I had expressed h is idea ex
actly.
H e called C ount M ouravieff, to w hom , at his m a jesty ’ s request,
I read the declaration.
A n u n d erstan d in g already existed between
the M in ister o f F o reign A ffairs an d m y s e lf on the fun dam en tal basis
o f the plan.
I t w as decided t h a t th e new arrangem en t, o f which
the contents and the very existence should rem ain absolu tely secret,
should be established undeniably in the form o f le tte rs w hich Count
M ouravieff and I w ould exchange.
T h a t w a s done W ed n esd a y m orn
ing, the day I le ft S t. P etersburg.
D
elcasse
.
In pursuance of this treaty the military staffs of France and
Russia entered into a military conference, August 31, 1911,
printed by Foreign
in London, September, 1922, under
the title, “ The Great Fraud,” is as follow s;
Affairs,
E X H IB IT
T
he
G
reat
F
raud—
H ow
R
the
W
I.
II.
u s s ia n s
and
French
P
repared
fob
ar.
(IN
1 9 1 1 .)
In our article la s t m onth, “ T h e P o iso n th a t D estro y s,” dealing w ith
the alleged allied unpreparedness fo r th e w ar, we w rote : “ T h e legend
o f French and allied unpreparedness w a s exclu sively fo r B ritish con
su m p tion .” The docum ent published below reveals the F rench and R u s
sian gen erals discu ssin g their w ar plan s over a table in the palace of
the R ussian Czar— exactly three years before the w ar began.
I t shows
how th ese poor unprepared S ta te s, th e victim s o f Germ an aggression—
F ran ce and R ussia— w ere even then discu ssin g a m ilita ry offensive
a g a in st the C en tral Pow ers w hich should be cam ouflaged d ip lom atically
as a “ defensive ” w ar. W e see th em reckoning up the im m ense forces—
1 ,3 0 0 ,0 0 0 (m in im u m ) French and 8 0 0 ,0 0 0 (m in im u m ) R u ssian s— w hich
w ould be available for overw h elm in g G erm any ; how sh e m u st be a t
tacked sim u ltan eou sly on the east and w est.
W e see th a t th ey knew
p e rfe ctly w ell th a t G erm any w ould seek to avoid the pincers by striking
rap id ly a t F rance, u s i n g t h e “ B e l g i a n c o r r i d o r , ” as Lord Loreburn
ca lls it, into France.
W e observe th e assu rance o f the F rench ch ief of
staff t h a t (even th en ) the French A r m y could concentrate as rapidly
as the Germ an and w as in a p osition “ to take the offensive aga in st
G erm an y, w i t h t h e h e l p o f t h e B r i t i s h A r m y o n i t s l e f t f l a n k . ”
T u rn from th a t picture to the sta tem en ts made to us by m inisters
and their henchmen fro m a hundred p la tfo rm s when the w ar broke out
three years l a t e r ; France and Im perial R ussia dream ing o f na u gh t but
p e a c e ; E u rope suddenly startled out o f her repose by the K a ise r’ s
predatory legions.
“ W e w ere all cau ght unprepared ” (M r . L loydG eo rg e).
Then glance— w hen you read about th e French offensive “ w ith the
help o f th e B ritish A r m y on its le ft flank ” — a t M r. A sq u ith ’ s speeches
in the H ou se o f C om m ons : “ T h ere is no secret arran gem en t of any
so rt which has n ot been disclosed and fu lly disclosed to the pub
lic
*
*
* ”
(N ovem ber, 1 9 1 1 ) , and again , “ A s has been stated
*
*
*
there are no secret en gagem en ts w ith an y foreign Govern
m ent th a t en ta il upon u s any o b ligation s to render m ilitary or navai
assistan ce to any other power ” (D ecem ber, 1 9 1 1 ).
A n d estim ate the exten t o f the deception practiced upon the B ritish
N atio n .
(E d . Foreign A ffa irs.)
T h is w as the seventh F r an co-R u ssian m ilitary conference.
M IN U T E S
OF
THE
M E E T IN G S
STAFF
OF
THE
FRENCH
A T K R A S N O B -S E L O , A U G U S T
AND
18
R U S S IA N
C H IE F S
OF
( 8 1 ) , 1 9 11.
In accordance w ith paragrap h 1 o f article 4 o f the m ilita ry con
ven tion o f A u gu st 1 7 , 1 8 9 2 , the heads o f staffs o f the R ussian and
French arm ies m et in conference at K rasn oe-S elo A u g u st 18 ( 3 1 ) , 1911 .
T h e F rench m ilita ry a t t a c h e w as present as secretary.
T h e various
points o f the convention (th is refers to the F ran co-R u ssian m ilitary
convention w hich, since 1 8 9 2 , had been the basis o f F ranco-R ussian re
lationship.
I t w as kept secret u n til 1 9 2 0 ) w ere successively examined
by the con ferring p a rties, and gave rise to th e fo llo w in g exchange of
v ie w s :
P r e a m b le .
T h e tw o c h ie fs o f s t a f f d e c la r e , b y c o m m o n a c c o r d , t h a t th e w o rd s
“ d e f e n s i v e w a r ” m u s t n o t b e i n t e r p r e t e d i n t h e s e n s e o f a w a r w h ic h
w o u ld b e c o n d u c te d d e fe n s iv e ly .
T h e y a ffir m , o n th e c o n t r a r y , th e a b
s o l u t e n e c e s s i t y f o r t h e R u s s i a n a n d F r e n c h a r m i e s to a d o p t a v i g o r o u s
o f f e n s i v e , a n d a s f a r a s p o s s i b l e a s i m u l t a n e o u s o n e , in c o n f o r m i t y w it h
th e te x t
a r t ic le 3 o f th e c o n v e n tio n , w h o se te r m s p r o v id e t h a t
th e
of
“
• X
UL
r t D l.l l u H 3i
j 8% >4Ky
;
A iu a y
L io ^ o o u ^
e
aaoD aa
4
044
u u ^ r.a + u o ^ u u ,;
jju .o
u u iio a j^ v m
CONGRESSIONAL RECORD.
iy n o is s s h d n o o
force* of the two contracting powers shall come into full action with all
speed.
(The “ defensive ” war was strictly for diplomatic purposes
it will bo observed.)
(Les forces des deux puissances contractantes
s’engagent & fond et en toute diligence.)
A R T IC L E
1.
Same observations as in the conference of 1910, reading as follows :
“ The two chief of staff, confirming the viewpoint of preceding confer
ences, are entirely in accord on the point that the defeat of the German
armies remains, whatever the circumstances mag be, the first and princi
pal object of the allied armies.”
A R T I C L E 2.
Same observations as in the conference of 1910, reading as follow s:
“ The conferring parties express once more their common accord, ar
rived at in the conference of April 8 (21), 1906 (par. 2 of Chap. I),
that the mobilization of the Germany Army compels Russia and France
to mobilize immediately and simultaneously all their forces upon the
first news of the event and without a preliminary understanding being
necessary; but that in case of a partial or even general mobilization of
Austria or Italy alone this (preliminary) understanding appears indis
pensable to them. They therefore agree to invite their respective Gov
ernments to be good enough to settle this point, which has already
attracted the attention of their predecessors.”
A R T IC L E
8.
Sharing the opinion of their predecessors, the conferring parties, in
common accord, think that Germany will direct a greater portion of her
forces against France and will only leave a minimum of troops against
Russia.
General Dubail points out that new arguments for this view are to be
found in the recent improvements undertaken by the Germans in their
network of western railways— open lines, sheds, landing places— and by
the fortifications erected on the French frontier.
The French chief of staff thereupon submits the following considera
tions :
" From what is known of the German mobilization and concentration,
one may conclude that the first great encounters will probably take
place in Lorraine, Luxemburg, and Belgium (so vanishes the legend of
the shocked surprise with which the allied Governments learned of the
German invasion of Belgium) from the fifteenth to the eighteenth day.”
At that moment the strength of the French Army will be greater
than the 1,800,000 men provided for by article 3 of the convention.
It is believed that the Germans will conduct hostilities with the great
est possible energy, in order to impose from the first day their will upon
the enemy and to obtain the decision (initiative ( ? ) ) or at least to
reduce the French to the defensive. In the event of success they would
thus be in a position to turn the greater portion of their forces against
the Russians.
The French chief of staff has reasons to believe that in the actual
circumstances (August, 1911) if Germany provoked war neither Austria
nor Italy would immediately follow her.
General Gilinsky agrees that Italy would not, but thinks, on the other
hand, that Austria will be compelled to come In with the Germans
(prendre fait et cause pour), if only out of gratitude for the support
given by the latter to Austria in Bosnia and Herzegovina.
General Dubail, continuing his exposition, indicates on general lines
the French mobilization and concentration.
He shows that the French Army concentrates as rapidly as the Ger
man Army, and that as from the twelfth day it is in a position to take
the offensive against Germany, with the help of the British Army on its
left flank. (In accordance with the secret arrangement between the
British and French general staffs, begun in January, 1906, by the Joint
decision of Lord Grey and Lord Haldane, but concealed from the nation
and even from the Cabinet (except Mr. Asquith and— so Lord Grey and
Lord Haldane have affirmed— the Prime Minister).)
France is therefore ready to march in the sense strictly indicated by
article 8 of the military convention of 1892. However, in order to be
assured of success, it is necessary that she should receive the simulta
neous and effective assistance of the Russian Army.
In a word, it is essential that Germany shall be attaoked at the same
time on the west and on the east. (Just about the time this conference
was held Colonel Repington, military correspondent of The Times, was
saying in that Journal: “ The possibility of a war on two fronts is the
nightmare of German strategists, and, considering the pace at which
Russia has been building up her field armies since 1905, the nightmare
is not likely to be soon conjured away.” )
In view of the profound differences which exist in the geographical,
economic, political, and military situation of the allied nations, the diffi
culty has always been to provide for this simultaneous action which
responds to an ideal not actually realizable.
As from 1900, the Russian general staff, in conformity with this point
of view, undertook to attack on the eighteenth day with the first
dchelon (body of troops), sufficient to engage victoriously five or six
German Army corps supported by a certain number of reserve divisions.
iPoor unprepared Russia 1)
I
76870— 11
In 1908, responding to the same considerations, it envisaged the means
adopted in order to give the Germans, from the very beginning of war,
the greatest possible anxiety on their eastern flank. (Idem.)
It seems that the new disposition of Russian troops in peace time in
volves certain difficulties from the point of view of prompt intervention
at the very commencement of the campaign.
Indeed, in 1910 the passing of the frontier was indicated as taking
place only toward the twentieth day.
The French staff can only confirm once more the opinion put forward
upon several occasions in the course of the preceding conferences.
As far as it is concerned, the Russian armies should pursue the object
of compelling Germany to maintain the greatest possible number of
forces on her eastern frontier.
This object, which was the very basis of the military convention of
1892, can only be attained by the offensive.
The effect of this offensive will be the more certain insomuch as it
will take place sooner, will be cai'ried out with greater strength, and
will take a more dangerous direction for the enemy.
In these circumstances, and It being admitted by common accord by
the conferring parties that the Germans will direct the principal mass
of their forces against France, the French chief of staff expresses the
desire that the disposition (of the Russian armies) should, as far as
possible, allow of taking the offensive with the first tchclon (body of
troops) as from the eighteenth day. Perhaps even this delay might be
reduced, thanks to the recent improvements introduced into the Russian
mobilization and concentration.
General Dubail closes his exposition by remarking that he is not un
aware of the various motives which have compelled Russia to revise
the disposition of her troops upon her territory in time of peace. He
renders a sincere homage to the efforts made during the last three years
by Russia to reinforce her military power, and he is happy to note the
improvement produced, as a whole, in the friendly and allied army by
the latest modifications introduced into the mobilization.
General Gilinsky thereupon develops the Russian point of view.
He, first of all, emphatically affirms the will of the Imperial Govern
ment to fulfill scrupulously the obligations imposed upon it by the con
vention.
General Dubail hastens to declare that he fully appreciates the loyalty
of this declaration at a moment when difficulties are arising in connec
tion with Moroccan affairs and when it is not possible to estimate what
the true intentions of Germany may he.
General Gilinsky adds that In view of the actual threats of a conflict
the duty of the Russian headquarters staff is to enlighten in a precise
manner the French headquarters staff on the actual condition of the
Russian Army.
The latter is pursuing its reorganization following the campaign in
Manchuria (Russo-Japanese W ar), but this transformation only really
began in 1908— that is to say, four years ago. A great number of im
provements are by way of being carried out, but, even using the greatest
diligence, the Russian Army will only be complete in heavy artillery in
1913, in light artillery in 1914, and in new infantry munitions in 1916.
Moreover, equipment is lacking for the larger portions of the reserve
regiments. General Gilinsky gives detailed indications on these points,
supported by figures.
He adds that, when the Russian Army will have completed its re
organization, it will put into line forces very superior to the 800,000
men provided for by the convention.
But it is necessary to remark that Austria has made great progress
from the military point of view. Her mobilization is now as rapid as
that of the Russian Army, and its concentration takes place nearer the
frontier. In contradistinction with the situation prevailing up till now.
the Russian headquarters staff is constrained to admit that Austria
would be in a position to take the offensive before the Russian troops
destined to face her.
In these circumstances Russia does not appear to be in a condition
to sustain, for two years at least (that is to say, not before 1913. By
the spring of 1914, Russia’s military chiefs publicly announced their
readiness through the organ of the Russian war minister), a war
against Germany with a certainty of success. She would certainly
be In a position to ward off blows, but perhaps less able to give decisive
blows.
Nevertheless, whatever may be the drawbacks specified above in the
preparation of the Russian Army for war, the friendly and allied head
quarters staff declares it is ready to satisfy in the greatest measure
possible the desires expressed by the French headquarters staff.
General Gilinsky notably declares that the mobilized troops of the
active army will have completed their concentration on the frontier on
the fifteenth day, with the exception of the last trains and convoys, and
that efforts will be made to take the offensive from that day, without
waiting for the above, which will only be complete on the twentieth
day.
General Gilinsky estimated that the measures taken by the Russian
headquarter staff will compel the Germans to leave at least five or six
army corps on their eastern frontier, in accordance with the French
headquarters staff’s demand. He also gives detailed indications of the
CONGRESSIONAL RECORD
mobilization and concentration of the Russian Army (effectives, dates
of preparation, general disposition, and concentration).
General Dubail thanks General Gilinsky for the sincerity of his ex
planations on the actual state of preparation of the Russian Army, and
declares himself fully satisfied with an offensive which tcill begin im
mediately after the fifteenth day, and which would be of a nature
calculated to retain at least five or sice German army corps on the
frontiers of eastern Prussia.
a r t ic l e
A R T I C L E 5.
A R T I C L E 6.
Remains abrogated.
In conformity with the diplomatic arrangement of the month of
August, 1899, which was referred to in Chapter I of the conference of
July (June ( ?) ) 2 to June 19, 1900, the convention will last as long
as the diplomatic arrangements actually in existence, and of which
they form the complement.
7.
No observations.
(S ig n e d )
J.
G il in s k y ,
The Chief of the General Headquarters Staff
of the Russian Army.
D u b a il ,
The Chief of the Staff of the French Army.
(Vls4d)
M essimy
(spelled Messimi, presumably in error),
The Minister of War.
(The eighth Franeo-Russian military conference.)
EXHIBIT III.
T
h e
G reat
F raud— H ow
t h e
R u s s ia n s
and
F rench
P repared
fob
W ar.
Same observations as in the conference of 1910, reading as follows:
“ The conferring parties are agreed that article 5 compels the con
tracting parties not only not to make peace but also not to cease oper
ations in order to conclude an armistice individually."
7ti876— 11
Similar conferences will be found in Un Livre Noir, pages
425 to 437, inclusive, on July 13, 1912, and August, 1913, as
follows.
Foreign Affairs prints an English translation of the 1912
conference with its comments, as follow s:
*.
The chiefs of staff reproduce without alteration the six first para
graphs of the observations concerning article 4 in the conference of
1010, reading as follow s:
The conferring parties agree, by common accord, on the following
points:
“ (1) Conferences between the two chiefs of staff will be periodical
and, in principle, annual.
“ (2) Moreover, meetings will take place each time that one of the
headquarters staffs has expressed a desire therefor.
“ (3) The minutes of the conferences will be submitted to the ap
proval of the Government of each country, and a vis£ of the minister of
tear and of the prime minister will be attached thereto, so that the
chiefs of staffs of the allied armies may refer to this document in the
realization of desirable improvements.
“ (4) A more continuous and complete form will thns be given for
the exchange o f information between the headquarters staffs.”
In particular, before each conference, an agenda will be drawn up
of the points which it is proposed to examine.
The chiefs of staffs particularly insist that the minutes of the con
ferences shall be submitted to the two Governments for ratification.
As regards routes and means of correspondence in war time, the con
ferring parties are agreed that wireless telegraphy must take the first
place.
The line, Paris-Bobrouisk, is working in a satisfactory way at both
ends. It Is, however, desirable that the station of Bobrouisk should be
furnished with stronger apparatus in order to successfully oppose a
systematic mixing up ( brouillage) (i. e., of the messages).
The station of Sebastopol is not working regularly. The Russian
headquarters staff declares that it is to he handed over entirely to the
navy, to which it belongs and which absorbs it almost without inter
ruption for Its own service, and to establish on the borders of the
Black Sea, in some place other than Sebastopol, another station which
will belong solely to the army.
The code in peace time has been functioning since 1910. General
Dubail states that the code in war time will be probably ready In a
month.
The conferring parties are agreed that at the beginning of next
October the technical members of the Franeo-Russian Commission
should assemble again in order to study on the spot the measures of
detail to be taken, so that the four stations, Bobrouisk, Paris, Black
Sea, and Biserta, should be in a position to carry out the services.
The commission of technicians will hold its meetings at Bobrouisk, then
in the Crimea, and afterwards at Paris and Biserta.
The other means provided and organized for corresponding in war
time are as follows :
(1) Messengers plying between Belgium and Denmark. It is now
proposed that this communication shall be carried out via England and
Denmark.
(2) Telegraphy via the United States and the Pacific Ocean, or by
the Mediterranean and Turkey.
The idea of a direct cable between France and Russia has been
abandoned, as has also the service of carrier pigeons.
A R T IC L E
5
(II.
THE
P A R IS
CONFERENCE
OF
JU LY ,
1 9 1 2 .)
We reproduced last month the full text of the minutes (the original
texts are in French) of the meetings of the French and Russian chiefs
of staff at Krasnoe-Selo in August, 1911. We have now before us the
minutes of a similar conference held in Pari« in July, 1912. The pre
amble of this conference and a good deal of the contents are similar
to the wording of the 1911 minutes. We therefore indicate the simi
larity where it exists and do not reproduce the same text, referring our
readers to the September issue of Foreign Affairs, pages 57—
59. These
documents show the absurdity of the contention that France and
Imperial Russia'were not preparing for war and that they were taken
by surprise by a German “ conspiracy.” Next month we shall publish
the minntes of the conference between the two staffs in 1913. (Ed.
Foreign Affairs.)
M in u t e s
of
t h e
M e e t in g s
of
French
t h e
and
R u s s ia n
C h ie f s
ok
1912.
(At the head of the minutes the words “ Eighth Conference. ”— Iluitibm*
Conference— are inscribed.)
“ In accordance with Paragraph I of article 4 of the military conven
tion of August 17, 1892, his excellency General Gilinsky, chief of staff
of the Russian Army, and General Joffre, chief of the general staff of
the French Army, met in conference at Paris July 1 (13), 1912.
“ The following were also present: General de Curi&res de Castelnau,
first subchief of the staff of the arm y; Colonel Matton, military attach^
to the French Embassy in Russia; Colonel Count Ignatief, military
attach^ to the Russian Embassy in Paris. The latter officers were
present in the capacity of secretaries.
“ The following points in the convention were successively examined
by the conferring parties and gave rise to the following exchange of
views ” :
Sta ff
a t
P a r is
p r e l im in a r y
J u lt,
in
o b s e r v a t io n
.
“ In the first place the conferring parties decide that every time they
find themselves in accord to accept without change one or more new
paragraphs (alitnas) in the minutes of the preceding conference, the
text will be reproduced integrally in the present minutes. A special
reference will be Inscribed in the margin of the texts which are thus
reproduced. This proceeding will have the advantage o f dispensing, as
far as possible, with a reference back to the text of the preceding
minutes.”
PREAM BLE.
“ Accepted without comment by the conferring parties.” (Same ob
servations as In the 1911 conference. See p. 57, September issue of
Foreign Affairs.)
a r t ic l e
i
.
“ Accepted without comment by the conferring parties.” (Same ob
servations as in the 1911 conference. See p. 57, September issue of
Foreign Affairs.)
a r t ic l e
i i
.
“ Same comments as in the conferences of 1910 and 1911.”
(See
art. 2, 1911 conference, p. 57, September issue o f Foreign Affairs.)
The last sentence in the minutes of the 1912 conference differs and
reads as follow s:
“ This interpretation of the convention has been approved by the
Governments of Russia and France in accordance with the signature of
the two Governments to the minutes of the conference o f August, 1911.”
a r t ic l e
h i
.
First paragraph identical with the first paragraph of the 1911 con
ference (see September Foreign Affairs, p. 57). Article III of the 1912
conference then goes on as follow s:
“ General Joffre points out that new arguments in support of this
point of view are to be found in the improvements which the Germans
are continually making in their network of western railways (open
lines, sheds, landing places), and by the measures recently taken in the
neighborhood of the French frontier, notably In the Eiffel region. The
French chief of staff insists upon the capital point that it is in the
interest of the Germans to operate successively and separately against
France first, and then against Russia. The plan of the Allies must be,
on the contrary, to endeavor to attack simultaneously on both sides at
once with the maximum of combined effort.
“ With this end In view, and basing itself upon the present situation
in Italy, which is at war with the Turks, and on the relation of that
power with France and Russia, the French staff has established its
plan of concentration on the following bases:
“ ‘A strict minimum of troops, composed more especially of units of
reserve, is left on the frontier of the Alps tc defend the passes foot by
-iiaanoo pan uoj}BZHiqora at sABiap asocuna siq;
qaBjs aqx in ojj
■iqx puB ‘ x s o o j ob *b paqsnd aq i s n o i ‘aaojaaaqx ‘saaaoj nBuuaQ aq>
C
l
pqouxiB AJBiinui ‘jdHBusx lunoQ 1000103 : Bjssna “ X Assaqrag; q oa aja
aqx jo ^qoBUB X juiupn ‘ aqauiSB'q ap iBiauaf) a o a M x u a s a x d s a a q ; o
_____________ q a o o a a ri Y N o i s s ^ r a o K 0 3
6
CONGRESSIONAL RECORD.
fo o t.
The
w h o le
b e g in n in g
on
1 ,3 0 0 .0 0 0
m en
[T h e
m ass
th e
p r o v id e d
F r a n c o -R u s s ia n
row
of
th e
th e
n etw o rk
one
or
th e
of
tw o
an
fo r
of
F ren ch
by
M ilita r y
F rench
th e
Is
3
of
C o n v e n tio n ,
fr o m
th e
th e
exceed
th e
ready,
c o n c e n tr a te d
to ta l
a r t ic le
sta ff
v a r io u s
(in
fo r c e s
The
w ill
th e
g r e a tly
c o n v e n tio n
w h ic h
w as
th e
of
s p in a l
are
at
J o ffre
m a k in g
upon
e x h ib its ,
su ch
new
c o m p a n ie s
c o n c e n tr a tio n ,
tim e )
th e
as
and
G erm an
im p r o v e m e n ts
w ill
a llo w ,
w ith in
one
c o n c e n tr a tio n .
th e
p resen t
m om ent
in
su pp ort
of
b e in g
d ir e c te d
in
of
fro m
to
w h ic h
Is
set ou t
“ G eneral
th e s ta ff o f th e
e ffo r ts
He
to
to
very
“ On
th e
and
m oral
to
o th e r
fa c e
th a t
an
o th e r
e n a b le
th is
to -d a y .
th e
th e
and
in F i n l a n d a n d
w as
A s ia
and
of
M in o r
la r g e r
g e n e r a l s t a ff is
th e
o ffe n s iv e
s id e .
to
th e
sh e
at
is
an
w o u ld
w o u ld
T u rks
to
le a d
th a t
a c c e le r a te
in
s id e .
8 0 0 ,0 0 0
her
th e
In
any
at
fe lt
le a s t,
a fte r
n e c e s s ity
R u s s ia n
a grou p
to
day
of
a te ly
d is s ip a te
Sw eden
and
“ It
be
J o ffre
is
a ll th e fe a r s
th e r e fo r e
at
a ll
d e v e lo p m e n t
to
r a ilw a y
th e
of
w estern
o th e r
w h ic h
of
th e
th a t
by
th e
th e
it
of
th e
fo r c e s
w o u ld
s in g le
be
a p p lie d
J a b in k a ,
r u p lin g
tw o
of
(a )
by
th e
of
lin e s
in g
[th is
th e
r u p lin g
la tte r
of
w ord
m ay
re fe r
fr o m
S t.
lin e s
s e c tio n s
th e
tw o
to
is
im m e d i
th e a ttitu d e
w h ic h
are
and
of
S t.
by
to
lin e s
[th is
if
b o d ie s
on
of
or
th e one
s id e ,
d ir e c te d
fr o m
The
be
u se
fr o m
ru sse )
th e
b r in g
r e s p e c tiv e ly ,
to
is
th is
or
m eans
th e
S.
F.
T.
' lin e s
p.
of
or
“ G eneral
G ilin s k y
s tr a te g ic
p o in ts
out
r ie s — o n e
th a t
agrees
in
b e lo n g in g
R u s s ia
r a ilw a y s
C row n,
are
ta k in g
T h e y w ill be r e a liz e d
it
d oes
P e te r s b u r g -R ig a -K o c h e d a r y ,
n e ig h b o r h o o d
th e seco n d
and
w ith
The
fro m
G en eral
th e
c a te g o r y
c o e r c iv e
C racow
gau ges.
of
h eart
G ilin s k y
7 6 8 7 6 — 11
th e
on
th e
in
on
of
d ir e c tio n
P r u s s ia
th e
th e
le ft
c a r r ie d
to
of
th e se
w h ic h
of
w ill
A lle n s t e in
or
a tte m p s
of
th e
bank
out
a tte m p ts
n e c e s s ity
g r a v ity
c o n d itio n s
th e
e a ste rn
by
he
in
h is
to
V is tu la
c o n c e n tr a tio n
le a v e
th a t
b ase
to
IV .
w ith o u t
a r tic le
th e
and
4
a lte r a tio n
at
th e
e x c e p tio n
th e
s ix
c o n fe re n c e
(s e e
of
fir s t
of
1910,
S e p te m b e r issu e
th e
fo llo w in g
para
fo r
F rench
| d u tie s
and
of
j a llo w
is
navy
arm y
a lr e a d y
! isfy
its e lf
be
th a t
been
of
p o in t
th e
R u s s ia
th e
to
by
is
th e
p rove
To
m ig h t
be
th a t
new
sta tio n s
s p e c ia l
b etw ee n
th e
th r o u g h
a lr e a d y
to
b e tte r
to
stu d y
e s ta b lis h e d
c o m m u n ic a tio n s
la te r
R u s s ia
in
b etw ee n
th e
th e
of
and
in
to
w h ic h
w ir e le s s ,
m u st
w ill
C r im e a ,
and
of
R u s s ia
up
has
s ta ff.
to
th e
F rom th a t
a lr e a d y
F ran ce
and
u tiliz in g
q u e s tio n
and
it
T ran s-
o ffic e r s
p o s s ib ility
to
if
F rench
b etw ee n
T h is
or
F ran ce.
th e
sa t-
s u ff ic e
c o u n tr ie s
F rench
eo rre-
crea te
s p e c ia l
N orw ay.
th e
b e in g
in te n d s
a ll s e c u r it y .
by
and
to
of
c o m m u n ic a tio n
up
in d i-
c o m m is s io n ,
F ran ce
S c a n d in a v ia n
th e
are
sta ff
fo r
d ilig e n c e
R u s-
N e v e r th e le s s ,
th e
sta tio n
of
th e
peace
th e
sy stem
B iz e r ta
in
th e
draw n
codes,
S eb a sto p o l
at
fo r
in
w h ic h
th is
in
a lo n g
been
general
by
s ta tio n
w ill be
p o sts
d e te r m in e
corresp on d en ce
R u s s ia n
a d v is a b le
to
The
c a r r ie d
s till
have
N ik o la ie ff.
th r o u g h
are
in s u r e
d e p o s ite d
s a tis fa c to r y .
of
fo u r
tim e
s e r v ic e
R u s s ia n
m essen gers
sen t
th e
r a tific a
w ar
d ic tio n a rie s
and
th e
of
peace
C ode
up
sta tio n
n ear
a
in
sta tio n s ,
and
th e
F rench
crea te
of
fo r
fo r m u la te d
c o m m u n ic a tio n s
tim e
w ith
tw o
r e o r g a n iz e d
w ir e le s s s t a tio n
to
of
presen t
d is p a tc h e s
it
u se
t im e
m om ent
c o d e c o m m u n i c a t i o n s c a n b e u s e d in
a p p o in te d .
r is e
th e
corresp on d en ce
p o in t w h e r e
The
r e g u la r
in
In s tr u c tio n s
o f th e
fu r th e r ,
m in u te s
c o n f e r e n c e .)
w is h e s
p resen t
d raw n
w ar.
p resen t
s o le
d is p a tc h e s
re c e n tly
The
been
of
con cern ed
w ith
th e
r e c o n n a is s a n c e ,
s till
th e
th e
c o m m u n ic a tio n
a s p e c ia l s t a t io n
n ecessary
| m is s io n
th e
it
been
: c o m m u n ic a te
, w ill
at
to
A t
c h ie fs .
t h o r o u g h ly
im p ro v e
th e
th e
fo r
1912
c o r r e s p o n d in g
w o r k in g
s e c tio n
exch anged
to
have
th e
s ig n a ls
th e
| sp o n d en ce
j order
| has
fo r
th e
B iz e r ta -S e b a s to p o l.
tim e
m in is tr ie s
th e h o u rs
| c a tio n s
fo r
w ar
th e
G o v e rn m e n ts
fo llo w s :
a c c o r d in g
a llo w
th a t
tw o
fr o m
as
fo r
in s is t
th e
d is a p p e a r s
c o n fe re n c e .
P a r is -B o b r u is k ,
and
to
c o n tin u e s
(w ir e le s s )
and
fix
p a r tic u la r ly
s u b m itte d
m easu res
1911
I s ia n
to
s ta ff
be
w ill
R u s s ia n
th e
g iv e
general
s t a f fs .”
A R T IC L E
Sam e
A ffa ir s ,
a s in
p.
1911. c o n fe re n c e .
V.
(S e e
S e p te m b e r
is s u e
of
F o r e ig n
S e p te m b e r
issu e
of
F o r e ig n
S e p te m b e r
issu e
of
F o r e ig n
5 9 .)
A R T IC L E
Sam e
A ffa ir s ,
a s in
p.
1911
c o n fe re n c e .
1911
c o n fe re n c e .
A R T IC L E
Sam e
is
A ffa ir s , p .
C racow
V I.
(S e e
5 9 .)
in
V II.
(S e e
5 9 .)
J. G il in s k y ,
(S ig n e d )
o th e r.
fo r
The Chief of Staff of the Russian Army.
th e
J.
and
u se fu l
J offre,
He
in to
to
e .,
cu rv e)
th e
S ta te
a c q u ir e d
W arsaw
tr a n s fo r m in g
th e
of
th e
E m p ir e
to
r e c a lls
th e
gen eral
reason s
th u s
can
th em
be
w estern
w h ic h
th e
L ib r a r y
lin e
to w a rd
and
fr o n tie r .
in te rv e n e
( T r a n s la t i o n .)
(U n
L iv r e
N o is ,
D ip lo m a tic
N IN T H
a
n orm al
In
accordan ce
m ilita r y
w ith
c o n v e n tio n
sk y , c h ie f o f th e
c h ie f
F in a lly ,
S t. P e te r sb u rg a n d
d e la y
of
of
th e
A u g u st,
of
gen eral
1913,
CONFEREN CE
th e
p r o v is io n s
A u gu st
17.
P a r is ,
sta ff
of
th e
a t K r a s n o e -S e lo
(A D G D S T ,
of
1892,
g e n e r a l s ta ff o f th e
w ith o u t
to
d ’a v a n tg u e r r e .
1923,
v o l.
2,
pp.
of
th e
4 3 1 -4 3 7 .)
w ith
T h orn
in to
in s u r e d
Con gress,
S t.
d iffic u lt.
lin e s
o f
Legislative Refei'ence Service.
are
n o t e x e r c is e
th e
IV .
com
p o s itio n ,
u tiliz a tio n
has
w ill
E X H IB IT
c a te g o
o th e rs
M il l e r a n d ,
The Minister of War.
th e reso u rces a v a il
d o u b le
its
tra n sp o rt
tw o
p r iv a te
and
fr o m
S ta te
go
(i.
w ith
A.
th e
r a ilw a y s .
fo r m e r
m ake
r a ilw a y s
a ttr ib u tin g
of
d iv id e d
th e
e c c e n tr ic
of
in
b e lo n g in g :to
accord an ce
seem
w h ic h
in te n tio n
of
be
o th er
p la c e
The
gauges
can
fr o n tie r s ,
o f p r iv a te
c o n tin u ity
th e
w h ose
en em y
J o ffre
d e v e lo p m e n t
th e
in
not
in flu e n c e .
(a n o r m a le a )
abnorm al
d e la y
th e
th e
N e v e r th e le s s ,
and
G en eral
to
to
p r o je c te d .
In
w ith
im p o r ta n c e
Im p r o v e m e n ts
p a n ie s .
d ir e c t
a r m ie s
The Chief of Staff of the French Army.
h ig h e s t
th e
th e
p r e p a r a to r y
R u s s ia n
G ilin s k y
c e n te r
in
has
if
w ith
T h orn.
a b le .
th e
th e
o f th e c o n fe re n c e o f 1 9 1 1
5 8 ),
c o m p le te d
| tim e
it
c o m in g
u sed
on
in
en em y
tr a n s la tio n .
on
be
th e
o ffe n s iv e
rep rod u ce
paragrap h
th e
quad
A ffa ir s ]
B o lo g n e
s h o u ld
u sed
r a ilw a y s ,
F o r e ig n
as
M oscow
(d )
th e
a lw a y s
I v a n g o r o d .”
th e re u p o n
of
th e
fr o m
one
of
th e fo r c e s
fo r c e
quad
advanc
a c cu ra te
to
a
a llo w
to
be
an
L o u n in e tz -
w ord
r e fe r
w o u ld
a p p ly
W arsaw ,
sta ff on
(c )
w h ic h
and
(v o le
or
p o r tio n s
c o u ld
w ill
m ay
c o m in g ,
not
m ay
th e
lin e s ,
F rench
w h ic h
it
t r o o p s .— E d .
a lig n m e n t
c e r ta in
th in k s ,
con
On
s in g le
if
th e
to w a rd
The
th e
B r e s t -L it o v s k ;
m ay
It
lin e s .
t r a n s la t io n .
at
th a t
d e la y e d .
B r ia n s k -G o m e l,
A ffa ir s ]
jo in
e s s e n tia l
rem arks
B r e s t -L it o v s k ;
r a ilw a y s ,
F o r e ig n
th e
The
P e te r s b u r g -T a p s -W a lk -R ig a -
s e c tio n s
a c c u r a te
th e
of
d o u b le
he
m o b iliz a tio n
tra n sp o rte d
even
m u st
m in im u m .
c a r r ie d o u t b y th e
lin e s
th e
“ c o u r a n t .”
R u s s ia n
a ll
w h ic h
of
a
In e v ita b ly
S ie d le t s -W a r s a w ,
a d v a n c in g
th e
be
a c c e le r a te d
W arsaw
to
O r e l,
P e te rsb u rg ,
F in a lly ,
to
t r o o p s .— E d .
u sed
not
be
to
J o ffr e
J a b in k a B r e s t -L it o v s k ,
a p p ly
th e
tow n
The
w ill
fo r c e s
one
to
im p r o v e m e n ts,
n ot be an
fr o m
are
been
th e
m ay
o th e r
of
lin e
G eneral
d o u b le d ,
to
m ay
It
b o d ie s
by
d e la y s
redu ced
tro o p s
th u s
s e r io u s ly
(b )
th e
c o n s titu te s
e m p ir e
T h ese
s e c tio n s
be
s u b je c t,
d o u b lin g
O rel
th e
“ c o u r a n t .’ ’
and
G erm an y
G erm an
o b je c t,
R u s s ia n
w ere
M o u r a v ie w o -K o c k e d a r y ;
th e
m u st
w o u ld
lin e s ,
r a ilw a y s .
of
o b v io u s ly
On
p o r tio n
n a tio n a l
fu lly
of
m ig h t b e in s p ir e d
th is
a r m ie s
end.
of
of
W ith
w e re q u a d r u p le d , a s h a s a lr e a d y
th e
d e fe a t
a n n ih ila tio n
u tiliz e d
hand,
s e c tio n s
th e
r a ilw a y s
th a t
lin e s
c e n tr a tio n
th e
of
m aneuver
th e
sta ff
s h a ll
cou rse
j
c o sts.
c o n c e n tr a tio n
fa c to r s
th a t
T u rkey.
pu rsu ed
and
observes
if
a r t ic le 4
and
! d a ily
m o b iliz a tio n .
“ G en eral
in
to
o b s e r v a tio n s
c h ie fs
tex t
“ The
of
is d e c id e d
fifte e n th
of
in
p e rfe c te d
to
r a ilw a y s
th e
and
th e
th e
or
or
A ffa ir s ,
(T h is
The
jo in
m o b iliz a tio n
ev en t,
are
tim e
fo llo w s ” :
F o r ig n
t io n .’
e ffe c tiv e s
th e
a g a in s t G e rm a n y
m en
a r m ie s
th e ir
fu tu re to
ta k e
T h o r n -P o s e n ,
and
as
c o n fe re n c e s
to
R u s s ia
of
lin e s
G eneral
s o u th
b u lk
p resen t
W arsaw
“ Sam e as
of
s itu a tio n
p r o b a b ly
c o n s tr u c tio n
sam e
grap h :
o p p o rtu n e
com pel
m a in
w ith
th e
th e
to
B e r lin
c h ie fs
r e a d in g
fo rc e s
p re se n t,
n o t th e
its
grou pm ent
A R T IC L E
The
d e v o te h er
h e r s e lf
th e
on
“ ‘ The
up
That
c o n c e n ta te
of
of
fin d
F in a lly ,
to
fig u r e
a c tio n
to
on
" The
seem
m ilita r y
P e t e r s b u r g m o r e c o n s id e r a b le
on
s t ill r e s o lv e d
c o n ta in in g
th e
fo r c e s
her
r a ilw a y s
th e
th e
not
o ffe n s iv e in te n
A u s tr ia n
s c a le s .
m ay
of
th e
at
of
accord
G erm an y.
G erm an y.
c o n s id e r a tio n
th e
T h is
th e
G erm an y,
by
S t.
e n a b le
c o n c e n tr a tio n .
m a in ta in in g
m ake
on
on
ap peared ,
th e
in d ic a te d .
w o u ld
o b v io u s
an
is
r e g io n
m arch
tim e ly
in
W arsaw ,
paragraphs
d e v e lo p e d
as
order
T h is
arou nd
p r e c e d e n tly
th e ir
fo r c e s
le d
th e
h o s tilitie s .
w ith
check
had
of
m arch
in
s u b je c t
F ran ce
m o b iliz e d
on
and
to w a rd
d is p o s e
en em y
of
is
e ith e r
1 on
to
c ir c u m s ta n c e s d o es
of
th e
deho
c h ie f
th e
a g a in s t
th e
g r e a tly
t im e
in
s id e
on
S h e m u st th e re fo r e
sam e
a g a in s t R u s s ia .
th a n
a
Sw eden
a ttitu d e ,
le a v e
in
th e
a r m ie s
o p e n in g
has
a ffo rd
fa v o r a b le
In stig a te d
la t te r
th e
d is a s tr o u s .
at
a llie d
p resen t
A u s tr ia
w th
to
th e m ,
on
c o n c e n tr a tio n .
p r in c ip le
ex p ressed
h er r a ilw a y s ,
hand,
e x p e cta n t
m om ent on
at
in
in
be
d e v e lo p s
d ir e c tin g
and
m ap
a
n e c e s s ity o f c o n c o r d a n t a n d
tw o
under
not
be
th e
th e
le a s t
can
pow er
th e
adopt
at
fo r
accord
o p in io n
a c tio n
hand,
R u s s ia
in
of
th e
im p ro v e d
e ffe c t w o u ld
“ On
b u lk
w hose
has
d is p o s itio n s
fu lly
A rm y on
w ith
p r e s s in g ,
p o w e r ; sh e
t io n ,
is
th e
agrees
A rm y,
be
F rench
F rench
d ir e c t
a ls o
Ita lia n
th e
G ilin s k y
e x p la n a tio n s ,
to
G erm an y.
J o ffr e
fr a n k ly
if
h is
W h ils t
have
c o n c e n tr a tio n
a g a in s t
a r m ie s ,
E le v e n
d e v o te d
th e y
G ilin s k y
of
“ G eneral
s h o r tly ,
year
c o n c e n tr a tio n .
R u s s ia
“ G eneral
m ar
w o r k .’
“ G eneral
in
m easu res
r a ilw a y
on
fr a n c s
is
R u s s ia n
arm y.
1892.
A lli a n c e .]
d ays’ advance
advance
m illio n s
th e
fr o n tie r .
F r a n c o -R u s s ia n
“ ‘ M oreover,
now
of
G erm an
s e c tio n
1 9 1 8 ).
1
of
a r t ic le
H is
E x c e lle n c y
R u s s ia n
A rm y , and
F rench
A rm y,
m et
in
4
G eneral
G ilin
G e n e r a l J o ffr e ,
c o n fe re n c e
at
a t d iffe r e n t tim e s d u r in g t h e m o n th
V I U V 7 k /l i a
1
T i V V l O O k U l k / i W k /
CONGRESSIONAL RECORD.
O th e rs
F rench
presen t
w ere
E m bassy
o f th e
R u s s ia n
G eneral
R u s s ia ;
E m bassy
N in e t y -fo u r th
F rench
In
In
In fa n tr y
de
L a g u ic h e ,
C o lo n e l
C ount
m ilita r y
P a r is ; C o lo n e l B e r t h e lo t ,
R e g im e n t,
a id e
a tta c h d
Ig n a tie f,
m a jo r
of
m ilita r y
com m an der
g d n ir a l
t li e
a tta c h d
o f th e
of
d d sig n d
G erm an
fro m
th e
tra tio n
th e
To
v a r io u s
th e c o n fe re e s
p o in ts
and
of
th e
th e
agreem ent
fo llo w in g
w ere
v ie w s
s u c c e s s iv e ly
c o n s id e r e d
by
w ith o u t
In t h e
A
a ll
th e
change
p r e c e d in g
c o n fe re e s
one
d e c id e
The
w henever
th e y
agree
to
n o te
m ore
th e
tex t
w ill b e
As
accept
p aragraphs
of
it
of
s h a ll
th e
be
p r o c b s -v e r b a l
rep rod u ced
in
of
its
th e
e n tire ty
in s c r ib e d
on
th e
m a r g in
of
th e
tex ts
th u s
back
th e
tex t
P re a m b le
c h ie fs
not
of
be
T hey
of
p rocedu re
of
(a c c e p te d
gen eral
d is p e n s e s w it h
p r e c e d in g
w ith o u t
s ta ff
in te r p r e te d
in
agree
th e
rep ort
th a t
th e
of
n e c e s s ity
as
m uch
by
com m ent
sen se
th e
th e
w ords
“ w ar
to
as
a r m ie s to ta k e a v ig o r o u s o ffe n s iv e
ta n e o u s ly ,
in
c o m p lia n c e
a c c o r d in g
to
com e
a c tio n
in to
w h ic h
w ith
“ th e
w ith
F irst A rticle .
in g
a
new
“ The
tw o
Sam e
A r m ie s
a im
of
C o m p le te d
“ And
read
agree
a llie d
as
tw o
a r tic le
of
c o n tr a c tin g
th e
as
as
th e
c o n fe re n c e s
on
th is
a ll
Sam e
H o w e v e r , th e
In te r p r e ta tio n
verb au x
s h o u ld
th e
as
by
a ct
p o in t,
p o in t o f v ie w
th a t
on
th e
th e
of
fir s t
Ita ly
The
R u s s ia n
A rt. 3.
S h a r in g
The
w ill
th e
and
arm y
F ran ce
to
th en
b e fo r e
The
th e
p la n
p r in
a lm o s t
a ll
h er
c o n c e n tr a tio n
grou p
tr a tio n
c e n tr a tio n
part
fo r c e s
of
th e
its
th e
c o n fe re e s
fo r c e s
a g a in s t
th e
p ast
th e
th e
o f th e
to
of
F ran ce
to
th e
th is
a g a in s t
of
by
a fte r
th e
w ill
e le m e n t
be
g r o u p in g
R u s s ia
on
on
en em y
su ch
c o u n tr y ;
in
a
enem y
c o n c e n tr a te d
o p e r a tio n s
c o n c e n tr a te d
A lt h o u g h
a g a in s t
in
th e
a tta c k
on
w h ic h
on
w ill
advanced
By
about
th e
of
F rench
th e
engage
8 0 0 ,0 0 0
of
upon
to
n o rth ea st
exceed
th a t
2 0 0 ,0 0 0
fr o n tie r
m en ;
w ill be
fr o m
a g a in s t
and
of
th e
and
’ concen
fr o n tie r
fo r c e s
end
tw o
G erm an y
in
w ill
o f m o b iliz a tio n ,
of
w ill
1914,
be
and
com m ence
th e
end
of
days.
a rra n g em e n ts
th e
be
w o u ld
th a t
fo r
th e
A r m ie s
con
d ir e c te d
fo r
G eneral
fa c ilita te
a g a in o t
th e
o ffe n s iv e a g a in s t th e
or
to
p r o v in c e
o f th e
n eed
th e
e ith e r
P r u s s ia
of
bank
th e
to
th e
o th e r
a
lin e
fro m
been
q u a d r u p le
th e
tra ck ed .
d iffic u ltie s
s ta r tin g
fr o m
o f its
by
R ia za n
exe
co n stru c t
and
T o u la
p o in t.
m ap
m arked
by
w ith
th e
le a d s
in c r e a s e
c o n s tr u c tin g
th e
r e g io n
th e
in
tw o
th e
c e r ta in
of
c h ie fs
of
general
of
r a p id ity
concen
r a ilr o a d
V a r so v ia ,
su ch
lin e s
con
as :
L o u n in ie tz -B a r a n o v itc h i.
L o z o v a ia -P o lta v a -K ie v -S a r n y -K o v e l,
m eans
to
te c t
be
fa c ilita te d
th e
of
b y a d o p tin g
le ft b a n k
c r o s s in g
c o n stru ct
o f th e
th e
r iv e r
th e
sta n d a rd
V is tu la , a s w e ll
in
th e
r e g io n
of
of
c o n c e n tr a tin g
com bat
th e
fo r c e s
m arch
to
if
G erm an
th e
h eart
B e r lin
of
by
th e
th e
sta rt
fo r c e s
are
d ir e c t
J o ffre
to
m a in ta in
th in k s
o p e r a tio n s
enem y
th a t
w h ic h
p ow ers.
la r g e
th e
th e
fo r c e s
d e fe a t
of
R u s s ia n
A n n ih ila tio n
of
su ccess
fa c ilita te
u n a b le
to
of
sta te s
th a t,
to
to
4.
c h ie fs
th a t
fo r
of
1912,
tw o
p r o v a l to
3
th e
th e
B e fo r e
w h ic h
a llie d
4
each
S ea,
so
of
have
th e
o b lig e d
a
w est.
to
p ro
fr o n tie r .
it
w o u ld
fo r c e s
t im e ,
so
th a t
be
advan
grou ped
th e y
in
th e
c o n s titu te
a
th e
the
arm y
corps
as
rep rod u ce
w ith o u t
c o n c e r n in g
chan ge
a r t ic le
4
th e
in
th e
fo llo w s :
sta ff
s h a ll
h o ld
to
p e r io d ic
a n d , in
p r in
sta ff
fo llo w s :
c o u n tr y
r e ly
on
s h a ll
so
be
th a t
th is
s u b m itte d
th e
c h ie fs
docum ent
fo r
ap
general
th e
fo r
of
r e a liz a
fo llo w s :
b etw ee n
p o in ts
and
th e
a llie d
a r m ie s , b e in g
of
f r e q u e n t ly .”
w h ic h
it
is
p rop osed
to
c o n s id e r
of
corresp on d en ce
w is h e s
in
expressed
tim e
in
of
th e
w ar
cou rse
have
of
been
th e
con
of
The
P a r is -B o b r o u is k
s ta tio n
is
b e in g
c o m m u n ic a tio n s
a tte m p ts
naval
at
at
at
of
has
c o n str u c te d
m ay
be as
c o m m u n ic a tin g
s ta tio n
and
B iz e r te
S veaborg,
B iz e r te -S e b a s to p o l
been
in
easy
by
b etw ee n
it
Is
r e in fo r c e d
R u s s ia
day
th e
n ear
as by
E iffe l
d e s ir a b le
to
by
th e
n ig h t.
Tow er
see
th e
r e in fo r c e d .
c o m m u n ic a tio n s
of
can
general
be
sta ff
exchanged
by
b etw ee n
B r itis h
c a b le s
th e
and
F rench
w ith
th e
B r ita in .
have
S o u th
as
c o n fe re n c e
r e g u la r ly
s ta tio n
c o n v e n tio n s
C a b le g r a m s
w henever a general
1912.
c h ie fs
G reat
as
th e
w e ll.
th a t
R u s s ia n
s h a ll he h e ld
th e
th e
s ta tio n s
R u s s ia n
ra n g em en ts
s ta ff
know n.
m eans
and
th e
T e le g r a p h ic
of
is
her
in
o f in fo r m a tio n
p o w e rfu l
sta tio n
The
s h o u ld
fo r c e s
c o n n e c tio n ,
o b s e r v a tio n s
m ay
read
m ade
and
F o llo w in g
of
to
e a st.
of
o f each
c o n fe re n c e
1911
a
of
c o n tin u e
a c c o r d in g
of
th e
th e
r e o r g a n iz a tio n
read
a r m ie s
w ill
w ir e le s s
la tte r
o p e r a tio n s
i m p r o v e m e n t s .”
s h a ll
fu n c tio n in g
B la c k
to
G erm an y
R u ssia n
new
b e s im p lifie d
exchange
w ays
F ran ce;
th e
G erm an y
an
o f general
c o u ld
m u tu a lly
p e r fe c te d
The
ex te n t
th e
fo r c e s
of
th e
governm ent
v a lu e ,
fe r e n c e
G erm an
of
gen eral
p r o c ^ s -v e r b a l
The
The
w h ic h
n e c e s s a r y .”
d e s ir a b le
s h a ll b e
fo r c e s
co n tra ry ,
th e
by
A
p e r m it
c o n fe re n c e s.
P aragraph
“ 4.
if
th e
th e
a r m ie s
e a ste rn
w o u ld
p la n
of
c h ie fs
one
The
of
of
fo r
p o s s ib le .
e s ta b lis h m e n t
F u r th e r m o r e , a c o n fe re n c e
of
th a t
n ecessary
as
w ar
on
G erm an
peace
th e
th e
of
p aragraphs
deem
sta ff
p art
Ir,
F ren ch
th is
th e
in
th e
brough t
th e
h er
in
of
a
to
r e a liz e d
have
q u ite
tra n sfe rre d
th e
on
even
sta te s
p r o v id e s
The
annual
tio n
th e
great
V a r so v ia .
th re e
“ 3.
of
of
G erm an y.
G ilin s k y
A rm y
of
e a s ily
V a r s o v ia ,
be
over
fo r c e s
is
a g a in s t
fo r c e s
th a t
a r m ie s
b o th
r e q u ir e d
lo c o m o tiv e s
it
F ran ce.
su ccess
th e
la r g e r
J o ffr e
fo r
A rt.
a
w ill
he
fr o n tie r
a g a in s t
s in c e
be
w ill
se r v ic e
s u c c e s s a s q u ic k ly
b e g in n in g
e a ste rn
o b ta in
a r m ie s ,
th e
e s p e c ia lly
o p e r a tio n s
th e
s u p e r io r ity
m enace
r e g io n
w ay
Its
e s s e n tia l
G eneral
and
at
fir s t
w ill
of
d e c is iv e
th e re fo re
G eneral
and
a
n u m e r ic a l
tageou s
a id
V is tu la .
R u s s ia
th is
c o n d itio n s
s h a ll
to
o b ta in
and
in c r e a s e d .
a r m ie s
at
to
(c a r s
conduct
q u ic k ly
fr o n tie r
ord er
to o b ta in
h e r s e lf w ith
c ip le ,
th e
tra n sfe r
R u s s ia n
is
in
sto ck
g r e a tly
to
fo u g h t
th e m ,
th e
It
be
a r m ie s
fa c in g
of
th a t
F rench
have
F rench
are
m ade
R u s s ia n
a d v is a b ility
a b le
e a ste rn
Sw eden,
g r e a tly
G erm an y
“ 1. T h e
s id e s
com m ence
m en
day
grou p
day.
th is
r a ilr o a d s o n
r o llin g
P aragrap h
w ill
R u s s ia n -G e r m a n
th a t
th e
r e s u lt w ill b e o b ta in e d
r a ilr o a d
lin e
seem s
th e
c o n fe re n c e
a g a in s t
b o th
its
th a n
th is
fo r c e s
fifte e n th
b r ie fly
s o u th
le ft
and
d ir e c t
7 6 8 7 5 — 11
as
th e
th e
aw are
w ill
s h a ll
in
or.
A u s tr ia
G erm an y
w ay
of
la w
e ffo r ts .
m ore
w ill
le a s t
th e
of
fifte e n th
o u tlin e
and
cheek
u tm o st
at
recom
fo llo w s :
R o v n o -S a r n y
a r m ie s
T h is
d a y o f m o b iliz a t io n , a n d t h a t
of
it
th e
a llie d
fir s t
R u s s ia .
o p e ra te
engage
e le m e n ts
te n th
grou p
to
c o m b in e d
num ber
fig h tin g
try
w ill
c o n v e n tio n
of
as
lin e
resp ect
“ 2.
be
a g ree u p o n th e n eed o f d ir e c tin g
th e
A .r*n y
g rea test
th en
out
B a t r a k i-P e n s a -R ia js k -B o g o ia v le n s k -S o u k h in itc h i-
s h o u ld
R u s s ia n
A rm y.
o p e r a tio n s
fo rc e s
in g
fo r
G erm an y.
They
of
m o b iliz a tio n ,
of a
R u s s ia .
th e m o st p a rt,
c o n fe re e s
a g a in s t
th e p o s s ib ility
m ilita r y
of
c o n c e n tr a tio n
The
a llie d
G erm an
th a t
im m e d ia te ly
th e
th e
o f A u s tr ia
G erm an
d e c la r e s
o ffe n s iv e
pow er)
T h ese
th e
c o n s is tin g
fo r
L a s tly ,
becom es
of
p red ecessors,
th e ir
in
c a r r ie d
e s s e n tia l
G r ic h in o -K o v e l.
govern m en t
p r e c e d in g
th a n
an
w ork
lin e
th e R u s s ia n
r a ilr o a d s
it
as
sa m e w ill a p p ly
e ith e r
p r o v id e fo r
of
is
c o n s tr u c tio n
th e
in c r e a s in g
m ark ed
th e
fo rc es
o f th e fig h tin g
th e
a g a in st
and
day.
of
by
m o b iliz e
of
e le v e n th
c o m p le t e d ,
th a t
to
m a x im u m
of
soon
The
1911
of
G il In sk y
G eneral
a
p r o c fe s rem arks
p o in t.
th e
fo r c e s,
o p e r a tio n s
o f th e
as
of
c o m p le te d , f o r t h e m o s t p a r t, o n
o ffe n s iv e
on
to
F ran ce
g e n e r a l m o b iliz a tio n
cover
th a t
of
and
s tr a te g ic
s h o u ld
th e
tex t
th a t th e
m o r n in g
th e
r e q u ir e d .”
tim e
d e c la r e s
th e
in
th e
th e
th e se
m o b iliz a tio n
a g a in s t
A llie s
fo r
th e
approved
sig n in g
1912,
1912.
e n fo r c e m e n t
th e
m ore
p r o v id e d
A rm y
m in im u m
o f th e
h a ste n
th e
is
d ir e c t
s im u lta n e o u s ly , e x e r tin g
fr o n tie r
and
G o v e r n m e n t s in
R u ssia
or even
under
le a v e
tu rn in g
J o ffr e
G erm an
w as added
w ill
have
of
G eneral
by
J u ly ,
s im u lta n e o u s ly
o p in io n
r e s u lt
w ill be
can
1911.
h a v in g
p r e v io u s a g r e e m e n t.
im p o r ta n t
o n ly
p r in c ip a l
1913
th e
an
G erm an y
and
and
of a
fo r c e s
g a in in g
com pel
agreem ent
w ith
of
th a t
and
and F rench
w ill
u n d e r lin e d
a tta c k
F ran ce
G o v e rn m e n ts
A u gu st
o f p a r tia l
su ch
se n ten ce
su d d en
of
case
lin e
w estern
th e
tea r
in
a lo n e ,
p u rp ose
1910,
o f g e n era l s ta ff
of
im m e d ia te ly
of
as
th e
of
d e fe a t
a c c o u n t o f th e c o n s id e r a b le
c o n fe re n c e s o f
F *rench
c h ie fs
m o b iliz a tio n
But
th e
W ith
th e
has
tra ck s
O ffe n s iv e o p e r a tio n s w ill a ls o
a ll
fo llo w s :
fo r c e s
every
of
tw o
w ith o u t th e n eed
p ow ers.
agree
and
c o n fe re n c e s
r e c o g n iz e d
th e ir
or
of
G erm an
know n
to
R u s s ia n
th e
read
“A s
1912,
a ll
of
in g
th e
r e m a r k s a s in
D o u b lin g
th e
g r o w t h o f th e r e la tiv e m ilit a r y p o w e r o f G e r m a n y in th e t r ip le a lli a n c e .”
A r t . 2.
m in im u m .
sy stem
been
th ia
concen
V a r so v ia .
c ir c u m s ta n c e s
fo r m e r ly
on
R u s s ia
th e
and
a
and
and
tra c k e d .
b e tte r
o b ta in e d
D o u b lin g
1910
c o st,
S m o le n s k .
a r m i e s .”
m ore so th a n
be
D o u b lin g
s h a ll
a
th e
th a t
8.
fo llo w s :
th is ev en
of
c o n c lu d e
e a ste rn
1.
th e
S ie d le t z -V a r s o v ia
d o u b le
agrees
2.
fo llo w s :
fu lly
under
of
J o ffre
n e c tin g
gauge
in
w ith
and
a g reem en t,
pow ers
to
and
to
r a ilr o a d
has
any
L o u n in e tz -J a b in k a
d o u b le
of
at
m o b iliz a tio n
redu ced
th a t
and
in
V a r s o v ia .
s im u l
a s p o s s ib le
3
lin e
at
w o u ld
s h o u ld
d e f e n s i v e l y .”
d e la y .”
rem arks
r e m a in s
th e
of
The
fo r th e R u s s ia n
as fa r
g rea t,
e x a m in a tio n
sta ff
been
p u sh ed
th e
J a b in k a -B r e s t -L it o v s k
tr a tio n
w ar ’’
c o n d u c te d
o f g e n e r a l s ta ff, c o n fir m in g th e
c o n fe re n c e s ,
G erm an
c ip a l
c h ie fs
tex t
r e fe r rin g
be
of
c o n fe re n c e
B r ia n s k -G o m e l
have
be
d e la y s
sta te s
p r e c e d in g
to o
G en eral
d e v e lo p m e n t
q u a d r u p lin g
e n d in g
re
p o s s ib le .
“ d e fe n s iv e
be
and
fo r c e s o f th e tw o
th e le a s t
f o llo w in g o n e s , w h ic h
p r e v io u s
th e
fo r
c o n fe re e s) :
a s s e r t, on th e c o n tr a r y , th e a b s o lu te n e c e s s it y
F rench
th e
th e
th e
are
An
m e th o d
to
se c tio n
to
m u st
p urp ose
G illu s k y
V a r s o v ia
c u tio n
produ ced.
T h is
th e
s e c tio n s
and
or
c o n fe re n c e
REM ARK.
th a t
p r e s e n t p r o c f c s -v e r b a l .
s p e c ia l
th e
in
to
th is
th e a llie d a r m ie s s h o u ld
en d
m ended
The
th e re fo r e ,
For
G eneral
exchanged :
P R E L IM IN A R Y
of
of
th is
O rel
F ir s t
fo r c e s ,
sta rt.
fa c to r ;
A rm y.
The
th e
7
w ith
been
p ass
by
A fr ic a
London
m ade,
w ay
and
and
of
have
ju s t
o p e r a tio n s
A m e ric a ,
Z a n z ib a r
to
been
can
A u s tr a lia ,
reach
c o n c lu d e d ,
a ll
ar
sta rt.
O d essa.
and
Z a n z ib a r
or
by
pan
aitt
jtoairioidia
3jn 9 )u g[
tp
'z i
pan
insstiy;
93S)
aiT a ia g I no e n
PIP
w asu
pub
9*
s ijs e p
6
-ibas.
jsao n
apt
eo®#
Sapnp
‘G?T003ra TVMOISS3JIOMOO
8
p ;p
CONGRESSIONAL RECORD.
C o m m u n ic a tio n s
general
s ia .
sta ff
It
w o u ld
o r g a n iz e
A
be
5.
The
as
or
.
r t
6.
In
by
o r g a n iz e d
of
th e
R u s s ia n
e m is s a r ie s
F rench
1910
by
on
th e
F rench
c h ie f o f
G overnm en t
fro m
d is p a tc h e s
Fran ce
to
e ffe c t
general
s ta ff
c h ie f
th e
of
sam e
G o v e r n m e n ts
to
a r tic le
5,
to
a cce p ted
in te r p r e t a t io n
th e
5
and
0
in
is
as
th e
a r m is tic e
In
1
as
to
t a n e o u s ly
d r a w in g
im p e n d in g
tio n
by
th e
agreem ent
c o n fe re n c e
d ip lo m a tic
of
J u ly
of
2,
a g ree m e n ts
A u g u st,
1900,
now
1899,
th e
in
m en
c o n v e n tio n
fo r c e
w h ic h
to c o n fir m
her
a d d itio n
to
c a tio n s
we
th e
and
us
its
1910,
E n g la n d
G erm an y
lib e r t y in
by
u s in
deem
on
it
at
th e
th e
of
we
N o.
948,
c o m p le te
expect
d e lim itin g
n o te s
a s k in g
to
fr o n tie r s
rem oval
w ir e
in
assen t
fu tu re
r e s tin g
B r ia n d
equal
24,
and
of
exchange
ju s tify
w ill b e s u p p lie d
In
c o n f e r e e s .)
F ran ce
d ip lo m a tic
th e
th e
rem arks
w ill
up
F ebru ary
to
th e
lib e r ty
th a t
in
th e A llie s
o u r fr o n tie r s
w ith
A u s t r i a -H u n g a r y .”
th e
r e c o g n iz e d
sto p
of
F ran ce
fr o n tie r s
w ill g iv e u s
and
o p e r a tio n s
r e s p e c tiv e ly
not
h e r e to fo r e .
th e
of
have
p a r tie s
t e le g r a m
a llo w in g
w estern
th e ir p a r t
H ence
th e
“ w h ile
th e
G erm an y
c o u ld
s e p a r a t e ly .”
as
w ith
lo n g
G o v e r n m e n ts
c o n tr a c tin g
w ith o u t
r e p e a le d
c h a p te r
la s t
F rench
o b lig e s
an
th a t
d e lim itin g
on
p la n .
h a v in g
s a id
R u s
I D ou m ergue
c o n fo r m ity
w ill
fo r
and
s in c e
(A cc ep ted
A r tic le
tio n e d
a d v is a b le
g iv e n
R u s s ia n
a r t ic le
c o n c lu d e
A
are
fo llo w s :
“ The
th a t
e m is s a r ie s
tra n s m is s io n
R u s s ia n
in te rp r e ta tio n
read
by
th e
c o m m u n ic a tio n s
.
rt
fo r
due
th e
cou rse
q u e s tio n
to
to
fre e d o m
Exact
th e
F rench
Is la n d s .
th e
on
th e
in
q ues
assen t
of
th e
e x p la in
P le a s e
th e
c a b in e t.
fo r
w ar
by
s im u l
o f a c tio n
d a ta
s t ip u la t e
of
r a ise d
G overnm en t
R u s s ia
w est.
te r m in a tio n
A la n d
th e
F rench
a llo w in g
in
n ecessary
th e
on
th e
th e
of
d is q u a lifi
above
to
r e s u lts .
it
s u p p le m e n ts .
(T r a n s la te d
b>
L o ttie
M.
M an ross,
D ecem ber
13,
1 9 2 3 .)
In 1916 France and Russia entered into a secret treaty to
divide German and Austrian territory between Russia and
France, as follows:
E X H IB IT
v .
The
R u s s ia n
M in iste r
am bassad or
at
of
F o r e ig n
P a r is .
A ffa ir s
F ebru ary
(N o .
24
(M .
S a z o n o ff)
(M a rc h
9 ),
to
th e
P le a s e
re fe r
to
my
c o n fe re n c e
te le g r a m
you
m ay
No.
6003
of
1915.
by
th e
E n g la n d
S y r ia , a n d A s ia M in o r , a n d a ls o
g e stio n s
fo r
th e
fu tu re
At
th e
fo llo w in g
fo r th
general
on
C o n s ta n tin o p le , th e
th e L o n d o n
d e lim ita tio n
of
tre a ty
c e n tra l
w ith
S tr a its,
present
Ita ly .
E urop e
are
A ll su g
at
i n g e n e r a l o n e m u s t b e a r i n m i n d t h a t we are prepared
to allow France and England complete freedom in drawing up the
western frontiers of Germany, in the expectation that the Allies on
their part would allow us equal freedom in drawing up our frontiers
with Germany and Austria.
p rem a tu re , b u t
“ It
is
p a r tic u la r ly
n ecessary
to
in s is t on
th e
e x c lu s io n
of
th e
P o lis h
the elimi
nation of all attempts to place the future of Poland under the guar
antee and the control of the Powers.
q u e s tio n
fro m
“ W ith
deavor
sam e
s id e
su b je c t o f
r e g a l’d
to
keep
t im e
in
th e
to
case
to
th e
back
it
has
w h ic h
c o u ld
in d u c e
fu tile
to sea rc h
“ The
of
q u e s tio n
very
p a r tic ip a tio n
c o n fe re n c e ,
does
on
not
th e
w here
p u s h in g
th e
e x c lu d e
a c tio n
out
s u b je c t b etw ee n
R u s s ia
of
and
us
and
w a r w ith
p o litic a l
en
at
th e
on
N orw ay
fr o m
to
of
a
is
th e
Sw eden.
be
per
Japan
it a t
w ill b e
p r e lim in a r y
E n g la n d
C h in e s e m a r k e t
im p o s s ib le
e x a m in e
by
th a t
m eet
to
c o m m u n ic a te d
th a t
he
w o u ld
th e
not
but
no
w ith o u t
th e
th e
e c o n o m ic
p resen t.
exchange
d ip lo m a tic
fa il
th a t
cessor
ary
as
30
fo r e ig n
fr o m
m in is te r ,
(F e b ru a ry
1 2 ),
M .
to
R u s s ia n
M .
F ebru ary
fo llo w in g
“ In
am b assad or
at
w as
to
1
(1 4 ),
to
n o te
th e
to
London
of
th e
M . D ou m ergue
s u b m itte d
fo r
th e
h e r s e lf
L o r r a in e
as
to
th a t
in
fr o n tie r
up
and
th e
its
fu tu re
secon d
P a r is ,
Im p e r ia l
to
Im p e r ia l
th e n
F ren ch
it
my
th o se
R h in e
th u s
to
w as
le t
me
to
th e
“ 1.
m eet
r e c a ll
on
a
sep a ra te
fo r m
a
not
a
p le a s e d
r e fu se
secu re
Saar
a s w e ll
her
b a s is ,
to -d a y ’ s
th e
A ls a c e -L o r r a in e
d is c r e tio n
agree
to
th is
o f th e
pendence
“ 4.
upon
The
te r r ito r y
are
in
to
be
S ta te s
to
d a te
th e
your
in
d r a ft
of
an
th e
hope
to
w is h e s
our
a lly ,
put
fo r w a r d
I
p r in c ip le ,
ad d ressed
w as
good
enough
G o v e r n m e n t o f th e
term s
o f peace
g u a r a n tie s
Repub
to
a
of
be
te r r ito r ia l
o ffe r e d
resto red
to
F ran ce.
so
as
to
p r o v id e
fo r
th e
of
th e
s tr a te g ic
by
th e
th e
to
be
of
th e
a u to n o m o u s
tro o p s
u n til
a ll
th e
R h in e
and
su ch
o u ts id e
n eu tra l
tim e
c o n d itio n s
F rench
S ta te ,
as
th e
and
and
enem y
g u a r a n tie s
peace.
sta te d
a b le
bank
an
s a tis fie d
of
th a t
to
r e ly
c a r r y in g
th e
le ft
F rench
tre a ty
e x c e lle n c y
fo r
of
c o n stitu te d
th e
upon
G overn m en t
th e
su pp ort
o f t h e R e p u b lic
of
th e
Im p e r ia l
w o u ld
G overn
out
o f it s p la n s .
By order of His Imperial
master, I have the honor, in the name of the
inform. your excellency by the present note
the Republic may rely upon the support o f
for the cam'ying out of its plans as set out
V.
See
on
my
F ren ch
F ebru ary
20
(M a rc h
fo llo w in g
r e p ly
a ll
1 1 ),
t e le g r a m
w ith
t e le g r a m
a n x io u s
th e
in
hand,
th e
of
of
its
g u a r a n tie s
d e s ir a b le
E m p ir e ,
2.
th e
fo r
re c o g n iz e
in
am b assad or
in
th e
G overn m en t
1915,
q u e s tio n
R u s s ia ’s
a lly
The
im p o r ta n c e
G overnm en t
secu re
R u s s ia n
1 6 8 .)
th e
w ar
th e
P ek rovsk y :
N o.
w ith
fo r
M.
c o n fir m
to
th e
1917,
to
167,
accord an ce
to
o f th e
N o.
R u s s ia n
te r m in a tio n
S tr a its
m ent
to
R e p u b lic ,
th e
o th e r
of
fo r
sa fe ty
and
and
th e
th e
of
th e
tr e a tie s
s e ttle m e n t
C o n s ta n tin o p le
a s p ir a tio n s ,
m ilita r y
of
a n x io u s ,
and
on
th e
In d u s tr ia l
resp ects
e c o n o m ic
d e v e lo p
th e
Russia’s complete liberty is establishing
her western frontiers.
I svou skt.
Bausman says:
On
th e
very
p la c e , a n d
on
next
M arch
A p p a r e n t ly
in
w h ic h
n e v e r th e le s s
th e
m in is te r
P etro g ra d :
a b o v e ."
con
Im p e r ia l
th e
day
15
(M a r c h
th e re
has
M r.
been
no
B a lfo u r ,
in
th e
T sar
PRESENT
d e s ig n
th e R h in e h a s n o w
o f n o te s b etw ee n
by
at
e x c e lle n c y
th e
and
G overn m en t
Majesty, my most august
Russian Government, to
that the Government of
the Imperial Government
of
of
th e
te le g r a m
12)
th e
R u s s ia n
R e v o lu tio n
to o k
draw
a g re e m e n t,
sta n d p o in t
fo r e ig n
th e
dem ands
be
c o m p le te ly
in
happy
m ent
be
o c c u p ie d
have
“ Your
be
ord er
c o m m u n ic a tin g w ith
by an exch an ge
your
ow n
her.
te r r ito r ie s
are
in d ic a te d
tra n s-
m y s e lf.
th e
R u s s ia n
am b assad or
in c lu s io n
to
F rench
THE
in
in
w ho
of
h is
and
fo r m a l m a n n e r.
to
c o n ta in e d
on
for the inclusion in French territory o f t h e e n t i r e iron
district of Lorraine a n d o f t h e e n t i r e c o a l d i s t r i c t o f t h e Paar Valley.
“ 3. The
rest of t h e t e r r i t o r i e s s i t u a t e d o n t h e left bank o f t h e
R h i n e , w h i c h n o w f o r m p a r t o f t h e G e r m a n E m p i r e , a r e to be entirely
separated from Germany a n d f r e e d f r o m a l l p o l i t i c a l a n d e c o n o m i c d e
needs
str a te g ic a l
exp ressed
im m e d ia te ly
D o u m erg u e, a fte r
th e
h ig h ,
A ls a c e -
of
r e p ly
d e c la r e ,
The frontiers are to b4 extended at least up t o t h e l i m i t s
the former principality of Lorraine, a n d a r e t o b e d r a w n u p a t
th e
of
perm an en t
D ou m ergue
w o u ld
have
R iv e r
G erm an y
B r ia n d .
o ffic ia l
on ce
“ 2.
su c
Janu
m ost
r e s to r a tio n
o f th e
fro m
m ig h t
a f o r m a l s a n c tio n
and
th e
v a lle y
in v a s io n .
I req u ested
am bassad or
d u ty
th e
s u g g e s t io n s in
M a je s ty
to
in
w ar
o r g a n iz a tio n
G overnm en t
b e g iv e n
1 0 8 7 * — 11
p resen t
s e p a r a tio n
G e r m a n ic
o f w h ic h
P r o c e e d in g
s id e r
th e
t h e ir
R iv e r
a
G o v e rn m e n t,
w o u ld
th e
and
w ith
to t h e E m p e r o r t h e d e s i r e o f F r a n c e t o
of
p o lit ic a l
th e
a g a in s t
con sequ en ce
h is
th e
d istr ic ts
assen t
H is
end
a s p e c ia l p o s itio n
a tta in
R h e n is h
th a t
at
a u d ie n c e
an
c o n fid e n tia lly ,
to
n a tu re :
on
an
me
w is h e s
th e
F ren ch
fo llo w in g
a t P a r is sen t th e
5 0 2 .)
A t
c o n te n ts
at
Im p e r ia l G o v e r n m e n t t h a t
G erm an y
c o n c lu d e d
c o n fid e n tia lly .
g iv e
th e
1917,
th e
c o n te m p la tin g
F in a lly ,
P etbograd .
Copy
507,
P ok rovsky,
v ie w s
1917.
(N o .
M.
d iffic u ltie s .
n o te
your
lic
m e a n s .”
S a z o n o ff’s
its
c o u ld
(N o .
P ok rovsk y ,
th e
to
he
of
II.
te le g r a m
N o.
t e le g r a m
w r itin g
T h is
of
Sazon off.
C o n fid e n tia l
to
8 8 .)
your
in
s a tis fa c tio n
w ith
to in fo r m
our
a d v a n ta g e s
t h e r e fo r e i t w o u ld
s o lu tio n
p r e fe r a b le
d e s ir a b ility
to
to
th is resp ect.
G erm an s
its
a
th e
R e fe r r in g
G o v e r n m e n t,
P a r is
ISVOLSKY.
on
n ecessary
h o s tile
and
th e
is
p reven t
arm s,
up
b a i t s In
is
to
it
and
a ttr a c tin g
a ll
r e p r e s e n ta tiv e s
th e
fo r
o ffe r e d
im p o r ta n c e , b u t
It
any
im p o s s ib le
been
fo r n ew
o f Japan.
S ta te s,
m easu res
her to ta k e
of
great
fr o m
prove
a lr e a d y
fe c tly
is
S c a n d a n a v ia n
b e tim e s
s h o u ld
“ R u m a n ia
I n te r n a t io n a l d is c u s s io n
Sw eden
e x a m in e
me
b e h a lf,
th e
“ The political agreements concluded between the Allies during the
war must remain intact, and are not subject to revision. T h e y i n c l u d e
F ran ce an d
London.
in
IV .
p r in c ip le s :
th e a g r e e m e n t w ith
to
F rench
On
g u id e d
am b assad or
1917:
R u s
9 4 8 .)
be
R u s s ia n
1 3 ),
1910:
P etbograd.
c o m in g
th e
(F e b ru a ry
im m e d ia te ly
w ill
I.
fro m
31
(N o .
to ld
Secret agreement of 1916 -17 between France and Russia for the disposi
tion of German and Austrian territory.
s ia n
te le g r a m
Copy
I
D.
A p p e n d ix
A
Janu ary
of
a b d ic a te d .
P O S IT IO N
d r iv in g
been ab an d on ed
o ffic ia l s t a t e m e n t
th e
H ou se
th is
have
never
expressed
th e
p o lic y
of
by th e
to
back
F ren ch
th is
C om m on s,
to
th e
le ft
bank
of
G o v e r n m e n t, a lth o u g h
e ffe c t.
on
D ecem ber
19,
1917,
s a id
p la n :
“ W e
of
(B A C S M A N ).
G erm an y
p resen ts
our
s u c c e s s iv e
approval
F rench
of
it,
nor
G overnm en t
do
w ho
I
b e lie v e
have
it
h e ld
C O N G R E S S IO N A L R E C O R D .
9
Britain and Russia (see ch. 12, Entente Diplomacy and the
World, p. 709), under which a plan of naval cooperation be
tween Great Britain, Russia, aud Trance was worked out.
When the Gei’man rulers ordered a German mobilization,
5 p. m., Saturday afternoon, August 1, it was followed imme
s t a t e s m a n .”
diately by the marching of regiments through London equipped
I t m u s t be n o t e d in t h i s c o n n e c t i o n t h a t b y t h e d e c l a r a t i o n o f S e p
for war the following morning, Sunday, August 2. 1914. (How
t e m b e r 5 , 1 9 1 4 , t h e A l l i e s u n d e r t o o k t o m a k e p e a c e in c o m m o n .
Any
Diplomats Make War, Neilson, p. 295.)
a r r a n g e m e n t b e tw e e n F r a n c e a n d R u s s ia th e r e fo r e e q u a lly a ffe c ts G r e a t
French troops invaded German soil Sunday, August 2. 1914.
E r ita in .
(Reflections of the World War, p. 145.)
On Saturday, the 1st day of August, the German border was
In the light of these treaties and these military confer
ences. 1 call attention to chapter 12 of “ Entente Diplomacy and crossed in four places by Russian patrols. (Preparation and
the World,” giving the dispatches showing the Entente prepara Conduct of the World War, Von Kuhl, pp. 79-80.)
Germany declared a state of war existing with Russia, be
tions for war. Exhibit 6.
cause of Russian arts, on August 1, 1914, 7.10 p. m .; with
And the Falsification of the Russian Orange Book.
In 1906 Sir Edward Grey, on behalf of the British Govern France, August 3. 1914; Belgium, August 4, 1914. (Scott Docu
ment, entered into an agreement with France which in 1912 ments on World War, p. 1377.)
France declared war against
jrmany on August 3. 1914;
he reduced to writing, as follows:
Great Britain against Germany, August 4, 1914: Russia against
E X H IB IT S V III A N D IX .
Germany, August 7, 1914. The evidence appears to show that It
was the Russian policy to invade Germany without a declara
( L e t t e r S ir E d w a rd G r e y to F r e n c h A m b a s s a d o r C a m b o n , N o r .
tion of war and to make its mobilization complete under the
2 2 , 1 9 1 2 .)
camouflage of peaceful negotiations. (Von Kuhl, pp. 70-80.)
M y
D ear A m b a s sa d o r : F r o m t im e to t i m e In r e c e n t y e a r s t h e
In the Russian Czar’s orders for mobilization, 30th of Sep
F ren ch
and
B r itis h
m ilita r y
and
naval
e x p e r ts h ave
c o n s u lte d
to
tember, 1912, Chancellor Von Bethmann-IIollweg quotes the
g e th e r.
I t h a s a lw a y s been u n d e r s to o d
t h a t su c h c o n s u lta tio n
docs
fol!owing language:
• ffic e d a r i n g th e w a r .
N e v e r d id w e d e s ir e a n d n e v e r d id w e e n
c o u r a g e t h e id e a t h a t a b i t o f G e r m a n y s h o u ld h e c u t o ff fr o m t h e
p a r e n t S t a t e a n d e r e c t e d i n t o s o m e k in d o f ,
*
*
*
in d e p e n d e n t
G o v e r n m e n t o n th e l e f t b a n k o f t h e R h in e .
H is M a j e s t y ’ s G o v e r n m e n t
w e r e n e v e r a w a r e t h a t w a s s e r io u s ly e n t e r t a in e d b y a n y F r e n c h
not
r e str ic t
t im e
agreed
th a t
regarded
in
th e
w h e th e r
a
fr e e d o m
or
not
an
at
You
th e
in
has
of
how ever,
to
th e arm e d
agree
b o th
if
an
ta k e
a tta c k
peace,
in
If
it
peace,
th e n
by
a
s h o u ld
and
ought
m ay
and
never
B r itis h
upon
fu tu re
W e
to
to
he
if
th a t
if
e ith e r
a tta c k
a r is e .
The
resp ec
en gagem ent
w h e th e r
it
G overnm en t
by
c o u ld
a
in
th ir d
th a t
had
p o w er, or
im m e d ia te ly
act
so,
d is c u s s
to g eth e r
w hat
grave
to
have
p ow er,
to
th a t
w ith
m easu res
th e y
m easu res
in v o lv e d
d e c id e
w hat
la s t
v ita l
a lth o u g h
e ffe c t
a c tio n ,
th e
p la n s
c o n s id e r a tio n ,
s h o u ld
paragrap h
a fte rw a rd s
W ar,
in to
be
g iv e n
w as
p u b lis h e d
not
in
th e
and
to
of
th e
th e
to
W h ite
an
th e
and
to
to
general
s ta ffs
G o v e rn m e n ts
P a r lia m e n t
B o o k .]
w o u ld
by
(H o w
d rey ,
D ip lo m a ts
3 0 3 .)
F rench E m bassy,
L o n d o n , N o v e m b e r 8 3 , 1912.
D
ear
E dw ard : Y o u
S ir
22,
th a t
a u th o r itie s
of
o th e r
tim e
fr o m
th e se
m ent
F ran ce
to
d e c id e in
t h e ir
r e m in d e d
d u r in g
c o n s u lta tio n s
to
th e
and
la s t
th a t
s h o u ld
not
th e
fu tu re
b etw ee n
e x p e r ts w e re n o t a n d
b in d in g
our
G o v e rn m e n ts
th a t, h ow ever,
of
c o u ld
a
I
th ir d
count
had
had
on
p ow er
th e
th a t
ta k e
Your
le tte r
an sw ers
In
th e
event
of
to
fea r
e ith e r
one
to
reason s
It
w o u ld
arm ed
tw o
c o n s u lte d
lib e r ty
a c tio n
soon
n o tific a tio n
of
of
a
th e
s ta le
m o b iliz a tio n
of
w ar
w ith
as
c o n c e n tr a tio n
arm ed
fo r c e s
th e ir o w n
is
of
c o m p le te d
G erm an y
te r r ito r y .
we
w ith
(R e fle c tio n
s h a ll
th e
on
p roceed
o b je c t
th e
of
W o r ld
to
advance
c a r r y in g
W ar,
p.
th e
1 3 2 .)
This was strictly in line with the Franco-Russian treaty of
1892 and the military conferences of 1911, 1912, and 1913.
It will be observed that under the Franco-Russian secret
treaty of 1892, section 1, it was provided that in case of war
Russia should employ all its available forces to fight Germany
and that the military and naval staffs, in the military con
ference above quoted, expressly contemplated that the German
Army should be obliged to attack France through Belgium,
and stipulated:
The
F rench
A r m y , and
o ffe n s iv e
A rm y
th a t
c o u ld
a s fr o m
a g a in s t
co n c e n tra te
th e
G erm an y
tw e lfth
w ith
day
th e
as
it
h e lp
r a p id ly
is
of
in
as
th e
G erm an
to
ta k e th e
a p o s itio n
th e
B r itis h
A rm y
on
its
th a t if
fea r
an
of
th e se
th e
and
I
or
to
each
th a t
G overn
o th e r
e n g a g e m e u ts
e v e n tu a litie s ;
o th e r
of
th e
a tta c k
know
tw o
on
th e
w h e th e r
it
o th e r.
am
h a v in g
to
sta te
grave
e s s e n tia l
th a t
G erm an y
th a t
reason s
s h a ll
be
a tta c k e d
at
th e
sa m e
tim e
th e w e st.
But the most important light is thrown upon the matter by
the preamble in the minutes of the meetings of the French
and Russian chiefs of staffs, as follow s:
pream ble.
The
tw o
“ d e fe n s iv e
w o u ld
be
c h ie fs
of
w ar ”
m u st n ot
co n d u cted
sta ff
th e
o u s o ffe n s iv e , a n d , a s f a r
w ith
w ith
th e
tex t of
fo rc e s o f
a r t ic le
th e
d e c la r e ,
be
tw o
by
They
R u s s ia n
and
a s p o s s ib le , a
3
of
com m on
in te rp r e te d
d e fe n s iv e ly .
a b s o lu te n e c e s s ity fo r
th e
a u th o r is e d
G o v e rn m e n ts
is
on th e ea st and on
th e
c o n s u lta tio n s
as
u np rovok ed
e s s e n tia l
of
e ith e r
each
c e r ta in
one
naval
w ith
Aud thus clearly outlines the cooperation agreed upon be
tween Russia, France, and Great Britain.
The conference states:
It
y e ste rd a y ,
and
u n d e rsto o d
le n d
s id e
in
of
m ilita r y
been
sh o u ld
e ith e r
becom e
p o in t;
our
had
th e
le tte r
th e
n o t b e c o n s id e r e d
you
to
su p p ort
th a t
of
on
your
a lw a y s
th e y
s h o u ld
to
rem arked
grave
had
r e s tr ic t
fo rc e s;
in
y ears
B r ita in
it
w h e th e r
of
part
arm ed
me
fe w
G reat
tim e ;
su p p o rt
G o v e rn m e n ts
th e
n o tific a tio n
l e f t fla n k .
The French ambassador, Camdon, immediately replied in
the following letter:
N ovem ber
As
to
th e m .
read
th a t
th e
In other words, the Russian mobilization order was to he
regarded as a secret declaration of war.
Hollweg further states that the Russian instruction for the
troops on the German front was:
w ar on
p rep ared
be
ord er
to
G erm an y.
th e
w h e th e r
a g g r e s s io n
w o u ld
E m p e r o r ’s
e q u iv a le n t
a g a in s t
expect
o th e r
th e
be
it
th r e a te n e d
th e
p reven t
to
Is
d epen d
event
reason
s o m e th in g
It
s h o u ld
a c tio n
fle e t s ,
an
have
not
o f th e o th e r.
s h o u ld
and,
out
G overn m en t
th ir d
a t on ce be ta k e n
IT h e
M ake
any
com m on.
th e se
w o u ld
at
fo r c e .
G overum en t
and
based
unprovoked
know
e ith e r
G o v e rn m e n ts
p reserve
not
e ith e r
a r is e n
not
d e c id e
arm ed
is
F rench
is
p o in te d
expect
a s s is ta n c e
th a t
unprovoked
general
yet
th e
to
by
e x p e rts
c o m m its
m om ent
m ig h t b ec o m e e s s e n tia l to
I
not
in s ta n c e ,
p resen t
reason
upon
th a t
o th e r
w ar.
have,
grave
th at
fo r
G overn m en t
th e
b etw ee n
engagem ent
c o n tin g e n c y
d is p o s itio n ,
tiv e ly ,
a ssist
c o n s u lta tio n
as
c o o p e ra te
o f e ith e r
to
th e
in
accord,
th e
a flir m ,
F rench
on
th e
a r m ie s to
p o w ers
sh a ll
th e
w ords
w a r w h ic h
c o n tra ry ,
th e
a d o p t a v ig o r
s im u lt a n e o u s o n e , in
c o n v e n tio n , w h o se
c o n tr a c tin g
th a t
sen se o f a
te rm s
c o n fo r m ity
p r o v id e
co m e in to
th a t
f u ll a c tio n
a ll sp e e d t
The Franco-Russian treaty, 1892, provided “ In case the forces
o f the triple alliance or of one of the powers which are a
in g th e g e n e r a l p e a c e , t h a t G o v e r n m e n t w o u ld im m e d ia t e ly e x a m in e
party to it ” [for example, Austria] “ should be mobilized,
w ith
t h e o t h e r t h e q u e s tio n
w h e th e r b o th
G o v e r n m e n ts s h o u ld a c t
France and Russia, at the first indication of the event and
t o g e t h e r in o r d e r t o p r e v e n t a g g r e s s i o n
or preserve peace.
If so,
without a previous agreement being necessary shall mobilize
th e
tw o
G o v e r n m e n ts
w o u ld
d e lib e r a te a s
to
th e
m easu res
w h ic h
all their forces immediately and simultaneously and shall trans
t h e y w o u ld b e p r e p a r e d to t a k e In c o m m o n .
I f th o s e m e a su r e s in
port them as near to their frontiers as possible.” * * *
v o lv e d a c t i o n , t h e t w o G o v e r n m e n t s w o u ld t a k e i n t o i m m e d ia t e c o n
“ These forces shall begin complete action with the greatest
s id e r a t io n th e p la n s o f t h e ir g e n e r a l s t a f fs a n d w o u ld t h e n d e c id e a s
dispatch, so that Germany will have to fight at the same time
t « th e e ffe c t to b e g iv e n t o t h o s e p la n s .
in the east and in the west.”
Y o u r s , e t c .,
Therefore when Austria partially mobilized in Ignorance of
P au l C am bon .
the terms of this secret Franco-Russian treaty of 1892, Russia
(H o w D ip lo m a ts M a k e W a r , 2 7 9 .)
and France were under a secret contract to immediately mobi
In 1914 Sir Edward Grey delivered copies of these letters lize and attack Germany with all their forces. This was a
exchanged between him and the French ambassador to the secret declaration of war on Germany as of the date of the
Russian ambassador as a basis for an entente between Great Austrian mobilization, July 28, 1914
an
a tta c k
76876— 11------ 2
fr o m
a
th ir d
pow er
or
som e
event
th rea ten
I”"**1
q
"m v m u iw x
nnoai
aum uM Q
‘ » hn s n r
p^ovnn
-S t n i 3 q } JO OOIJBOIJTSIBJ)
. .~ UHr,+ ui
B
oq oj s i u e d d e
p a y ijs n f
93aB.xo utag
xjdooq ' j
-{) '
craooaa 'ivnoiss3hdnoo
l l
10
CONGRESSIONAL RECORD.
The Russian and French mobilizations, which were begun
under the treaty of 1892, must be interpreted in the light of that
treaty and the annual military conferences from 1903 to 1913 of
the general staffs of the Russian and French Armies.
RUSSIAN
PREPARATIONS.
Under the treaty of .1892 France had financed Russia to the
extent of about $7,000,000,000 to enable Russia to buill up a
gigantic army and to build military railways to the German
frontier (Lex Talionis).
The assassination of the Crown Prince (June 28, 1914)
caused the Austrian Government to demand immediate satis
faction of the Serbian Government on July 23.
On July 24 Serbia mobilized, but accepted the Austrian de
mands, except one or two affecting the question of sovereignty,
which they proposed to arbitrate. Austria ordered a partial
mobilization against Serbia. The same day the Russian Gov
ernment authorized a mobilization, and the Russian Minister
of War, Sukhomlinoff, made it a general mobilization and
afterwards made the Czar believe it was a partial mobilization,
which the Czar made a general mobilization on July 30. The
army of Belgium was mobilized as of this day, July 24. The
British fleet was completely mobilized aud ready for war as of
July 24. The French Government took preliminary steps, can
celing leaves of absence, and so forth.
Rend Viviana, president of the council, August 4, 1914, in
the French Chamber of Deputies, in commenting on the Aus
trian notice to Serbia of July 23 and subsequent events, said:
The manner in which the Russian military and railway prep
arations and mobilization had been worked out is set forth in
the work of Von Eggeling, The Russian Mobilization and the
Outbreak of the War, and by Gen. H. von Kuhl in his work,
The German General Staff in Preparation and Conduct of the
World War, an abstract of which is submitted. Exhibit X.
All the military authorities in Europe knew and recognized,
as a matter of military strategy, that in a war between Germany,
Russia, and France, the German troops would be compelled to
enter France through Belgium, as the French frontier otherwise
was absolutely impregnable because of the gigantic forts and
prepared military defenses.
Further the military strategists were all agreed that Ger
many’s only chance to win in such a military struggle was by
speed and efficiency, conquering France first, and then meeting
Russia.
Germany claimed that while Belgium had never collaborated
As
th e se
ev en ts
u n fo ld e d
th e m s e lv e s ,
th e
G o v e rn m e n t,
w a tc h fu l
with Germany to preserve Belgium’s neutrality against France 1 a n d v i g i l a n t , t o o k f r o m d a y t o d a y , a n d e v e n f r o m h o u r t o h o u r , t h e
und Great Britain, Belgium had a positive understanding with m e a s u r e s o f p r e c a u t i o n w h i c h t h e s i t u a t i o n r e q u i r e d — t h e g e n e r a l m o
Great Britain and France as to cooperation in a war of France b i l i z a t i o n o f o u r f o r c e s o n l a n d a n d s e a w a s o r d e r e d .
and Great Britain with Germany. See Belgian documents in
Under the secret 1892 treaty the Austrian mobilization re
facsimile in German White Book [pp. 837 to 860, Diplomatic
Documents Relating to Outbreak of the European War. Scott]. quired the immediate mobilization of all the Russian and
The secret documents exhibited in “ Entente Diplomacy and French forces and the speediest possible simultaneous attack
the World,” 858 in number, demonstrate beyond the shadow on Germany east and west.
William II was in Scandinavia on a summer cruise, returning
of a doubt that it was the fixed policy of the Russian Govern
ment to control the Dardanelles and expand its power in the on Sunday, July 26. Upon his return he directed the German
Balkan States where there were millions of Slavs in Serbia chancellor to urge on Austria the acceptance of the Serbian
and in Austria, and that this could only be done by means of a reply and the acceptance of a method of adjustment acceptable
general European war. It was therefore necessary for the to the entente powers. Austria yielded to this demand, de
carrying out of the Russian policy to bring about a general clared that the demand on Serbia was not intended as an ulti
European war and at the same time to put the moral responsi matum, that Austria was willing to have the matter adjusted
bility of such a war on others. These secret documents show by an international conference, that it had no designs on
that it was the design of the Russian Government to do this, Serbian territory, that it had only made a partial mobilization
and that the means of accomplishing this end lay through the against Serbia, and that it only sought its own internal peace
Slavs of Serbia and their intrigues with the so-called “ un against Serbian intrigue.
The secret Russian records show that the Russian Govern
liberated Slavs of Austria.”
The Serbian intrigues through a period of years were financed ment was determined on war, that the French Government was
by Russia and the Austrian Government was so seriously dis determined on war, that the French Government refused to
turbed by these intrigues that they were compelled at huge ex attempt to moderate the attitude of Russia, and that the Brit
pense and great internal inconvenience to mobilize in 1912, ish Government refused to attempt to exercise a moderating
rith the Russian Government, and that the Russian
and again in 1913, and again in 1914, when the Crown Prince influence w
of Austria and his consort were murdered by a Serb believed Government rejected in advance any attempt to exercise a mod
to have been Instigated by a malignant press campaign car erating influence with the Russian Government.
These secret documents show that it was a part of the policy
ried on in Serbia and alleged to have been directly arranged
by the Pan Slav “ Black Hand,” fostered by the Russian min of the French and Russian Governments to put the odium of the
World War upon the German Government.
ister at Belgrade.
The German chancellor, Von Bethmann-Hollweg, states that:
In Professor’s Sloan’s work, “ The Balkans,” page 193, May,
1914, he says:
T h e G e r m a n m in is t e r o f w a r t h o u g h t it a m is t a k e to d e c la r e w a r
At
B e lg r a d e
w h e r e , u n le s s
th e
s e ttin g
sia n
th e
up
of
am b assad or
been
tra ce d
m en ta ry
tra d e
it be a t
to
p o litic s
a n o th e r w a s
w ho
its
e v id e n c e
of
a
p r o v id e d
sou rce;
can
has
C o n s ta n tin o p le .
not
m a tter
th e
th ere
been
The
of
not
a
m oney,
fu n d s.
is
on
le v e l
o v e rth ro w
The
a
step
e ls e
and
it
and
k in g
th e
R u s
w h o le
fo r
unknow n
o f one
w as
c o n s p ir a c y
w h ic h
th e
has
docu
be produ ced.
on
R u s s ia ,
R u s s ia
w o u ld
had
be
not
b ecau se
m o b iliz e d ,
c o n s id e r e d
because
he
th a t
w ar
fe a r e d
c o u ld
th a t
be
th e
a v o id e d
a fte r
p o litic a l
e ffe c t
p r e ju d ic ia l.
But that the chief of the general staff favored declaring war:
B e c a u s e o u r h o p e o f s u c c e s s a g a in s t th e e n o r m o u s s u p e r io r ity
bers w as d ep en den t on
Nitti, in his book “ Peaceless Europe,” pages 12, 83, 84, 87,
says:
he
but
th e e x tr e m e r a p id ity
o f our
in
num
m o v e m e n ts.
And this opinion prevailed. (Reflections of the World War,
138.)
Because Germany declared war on Russia and mobilized at
t h e S la v s in A u s t r i a .
I t w a s o n a c c o u n t o f R u s s ia t h a t th e S e r b ia n
5 p. m., Saturday, August 1, 1914, public opinion throughout
G o v e r n m e n t w a s a p e r p e t u a l c a u s e o f d is t u r b a n c e , a p e r p e t u a l t h r e a t to
the world has largely accepted the view that the German lead
A u s tr ia -H u n g a r y .
T h e R u s s i a n p o li c y in S e r b ia w a s r e a l l y c r i m i n a l .
ers were responsible for the war. This has been emphasized
In 1908 the Czar had assured Paschitch, the Serbian minis and made more effective by propaganda and by the excitement
ter, that the Bosnia-Herzegovinian question would be decided and hostility of war.
After August 1, 1914, Russia and the various powers issued
by war alone, for which meantime they could preserve a calm
attitude with military preparations. (Bogitsevitch quoted in Orange Books, White Books. Yellow Books, etc., each of which
was intended to prove an alibi and show that each of the sev
Diplomatic Revelations, p. 101.)
In the German White Book, 1919, Part II, page 53, is an account eral Governments was innocent of the responsibility for the
of a visit of the Serbian Prime Minister to the Czar of Russia, pending gigantic catastrophe.
The Russian Foreign Office issued an Orange Book to show
February 2, 1914, and his report that he requested of the Czar
120,000 rifles and munitions, and so forth; that the Czar said the innocence of the Russian Government. Out o f 60 dis
that Russia was doing as much as It could to arm. He asked patches in the Foreign Office for the few days preceding the
how many soldiers Serbia could muster. The minister an World War, it appears that 50 of them were falsified by
swered a half million well-clothed, well-armed soldiers. The omissions, deletion or insertion. (Exhibit 7.)
This document shows by its forgeries in suppressing the vital
Czar replied:
dispatches a fixed policy to exculpate the Russian and French
T h a t 1b s a t i s f a c t o r y ; I t i s n o s m a l l m a t t e r a n d o n e c a n a c c o m p l i s h
statesmen and make it possible to cast the odium of the war on
m u c h b y m e a n s o f it .
the German statesmen.
R u s s ia
a lo n e p r o m o te d
7 6 8 7 0 — 1J
and
k e p t a liv e
th e
a g ita tio n
in
S e r b ia
and
of
C O N G R E S S IO N A L R E C O R D
attacked
Russia.
G. P. Gooch appears to be justified (Falsification of the Rus
sian Orange Book) in stating: *
Austria,
11
Germany would immediately reply
»
by attacking
It is now established by documentary p r o o f:
Telegram 1539, July 28, Sazonoff to Izvolski:
1. That from the commencement of the quarrel onwards France
In
con sequ en ce o f
A u s t r ia -H u n g a r y ’s
d e c la r a tio n
o f w a r a g a in s t
made the Russian point of view her own.
S e r b ia , w e s h a ll a n n o u n c e t o m o r r o w
a
m o b iliz a tio n
of
th e
O d essa.
2. That in complete contrast to Germany’ s effort in Vienna she K i e f f , M o s c o w , a n d K a z a n m i l i t a r y d i s t r i c t s . In bringing this to the
categorically refused to exert herself in a moderating influence in notice of the German Government repeat that Russia has no aggres
Petersburg, but, on the contrary, strengthened the Russian will to war sive intentions against Germany. Meanwhile o u r a m b a s s a d o r in
by giving repeated assurances of unconditional support.
V ie n n a is n o t b e in g r e c a lle d .
3. That she had decided upon war and had informed Petersburg to
Sukhomlinoff had already issued a general mobilization order
that effect before a decision regarding war or peace had been appar
of the Russian Army. He “ lied to the Czar” as to its being
ently come to there.* (Telegram No. 216 from Paris.)
4. That France only refrained from declaring war against Germany, a general mobilization ( “ Eggerling ” ), said it was partial,
because, having regard to public opinion in France and England, it and pretended that he had stopped the mobilization, although
was considered to be better that Germany should appear the aggressor, j he did not do so. I ’he Czar, however, July 30, authorized the
general mobilization. (Let France Explain, p. 201.)
(Telegrams Nos. 218, 222, 225, 226.)
Telegram 198, July 28, Izvolski to Sazonoff:
Any evidence from Russian or French sources favorable to
I d ee m i t m y d u ty to m a k e c le a r t h a t , a s r e s u lts fr o m m y c o n v e r
the German Government obviously is entitled to great weight, j
while self-serving evidence of the Russian statesmen must be : s a t i o n y e s t e r d a y a t t h e Q u a ! d ’ O r s a y , t h e a c t i n g French Minister for
Foreign Affairs did not for a moment admit the possibility of exercis
taken with reserve.
TH E ORANGE
BOOK
ing
AS CORRECTED FROM U N L1VRE NOIR.
a moderating
o f h is
Telegram 184 (Falsification of the Russian Orange Book,
p. 21), the Russian Minister of Foreign Affairs Sazonoff, on
July 24, stales:
th e
c o n v e r s a tio n
G erm an
influence
w ith
in Petersburg,
B aron
Sch on,
th e
*
*
As
a
r e s u lt
d e c lin e d
*
m in is te r
to
accept
p r o p o s a l.”
Germany was exercising strenuously a moderating influence
on Vienna in favor of peace.
Telegram 201, July 28, Izvolski to Sazonoff, states that the
German Ambassador had again visited the French Foreign
Minister and told him that:
Germany ardently desired the localization of the conflict, as the
Interference of any other power on the ground of existing treaties
must have incalculable consequences. * * * Ex-Minister Plchon
had an interview with the Austrian ambassador to-day, from which j
Germany ardently desired to work with France for the maintenance
he also gained the impression that Austria-Hungary did not intend j of peace. * * * That Germany was ready to cooperate with the
her step to be regarded as an unconditional ultimatum.
o th e r p o w e r s fo r th e m a in te n a n c e o f p e a c e .
Telegram 186, from the Russian representative at Paris to
Sazonoff, Petrograd, on July 25, said that the action of the
German ambassador—
H a s to
I n d ic a t io n
som e
th a t
ex ten t
reassu red
th e
fo re ig n
m in is t r y
as
Germany does not seek for war in any case.
b e in g
*
*
Telegram 1544, Sazonoff to Izvolski, July 29:
The
*
r e c e iv e d
That the Austrian note has not the character of an ultimatum;
• * * that the German step had only for its object the localiza
tion of the Austro-Serbian conflict; * * * that the absence of the
President of the Republic and of the Minister President (Viviani)
prevents the foreign office for the moment from expressing its opinion
definitely regarding present events.
AND
V I V IA N I
W ERE
BN
ROUTE
FROM
ST.
PETERSBURG
TO
P A R IS .
Telegram 187, July 26, from the Russian representative at
Paris to Sazonoff, Petrograd, states that the German ambas
sador had advised the French Minister for Foreign A ffairs:
Austria has declared to Russia that she seeks no territorial gains
and does not threaten the integrity of Serbia. Her sole object is to
secure her own peace and to maintain order.
Telegram 188, July 26, from the Paris Russian representative
to Sazonoff says that Berthelot, the director of the political
department of France, inclines to the opinion—
That Germany and Austria do not desire war in any case.
Telegram 1521, July 27, Sazonoff, Russian foreign minister,
to Izvolski, Russian ambassador in Paris:
If there is a question of exercising a moderating influence in
Petersburg, we reject it in advance, as we have adopted a standpoint
from the outset which we can in no way alter. * * •
Telegram 194, Izvolski wired that Poincare will return to
Paris on Wednesday, July 29 (five days after Belgium
mobilization, four days after Russian general mobilization had
begun, and on the next night, July 30, the French Minister of
War told the Russian military attach^ the French Govern
ment was determined on war, telegram 216).
Telegram 195, July 27th, the German Ambassador is shown
urging a new proposal for the intervention of France and
Germany between Russia and Austria, which was not ac
cepted. Izvolski says in this regard:
i
w a s s u r p r is e d a t th e correct u n d e r s t a n d in g o f t h e s i t u a t io n
m a n ife s t e d b y t h e a c t in g m in is t e r a n d h is a s s i s t a n t a n d t o see how
firm and tranquil they were in their determination to extend to us
their fullest support a n d t o a v o i d t h e s l ig h t e s t a p p e a r a n c e o f a n y la c k
o f u n it y b e t w e e n u s .
A m b assad or
in fo r m e d
me
on
b e h a lf
of
th e
Im p e r ia l
will not cease to ex
ercise a moderating influence in Vienna, and would continue to do so
despite the declaration of war. U p t o t h i s m o r n i n g n o n e w s h a s b e e n
That the German Ambassador had pointed out—
P O IN C A K E
G erm an
C h a n c e llo r
an
th a t
of
th e
G erm an y
c r o s s in g
had
of
not
ceased
A u s tr ia n
and
tro o p s
on
to
S e r b ia n
te r r ito r y .
Telegram 1551, July 29, Sazonoff to Izvolski:
The
j
G erm an
c is io n
of
h is
am b assad or
G overnm en t
military preparation.
has
to
*
c o m m u n ic a te d
*
*
As
to
me
to -d a y
th e
de
if Russia does not stop her
m o b o liz e
we
can
not
accede
to
G erm an y’s
to hasten our own warlike prepa
rations and to reckon with the probable inevitability of war. In
form the French Government of this, a n d at the same time thank it
for its declaration made in its name by the French ambassador that
we can fully rely upon the support of our ally France. U n d e r p r e s e n t
w is h ,
n o th in g
r e m a in s
c ir c u m s ta n c e s
th is
fo r
us
but
d e c la r a tio n
is
e s p e c ia lly
v a lu a b le
fo r
u s.
It
is
very desirable that England also without loss of time should associate
lid-self with France and Russia, as it is only thus that she can suoceed in preventing a dangerous alteration in the European balance.
London
t e le g r a p h e d
t o in
lik e t e r m s .
Of course, England could not stand for the control of West
ern Europe by the military machine of Germany. Sazonoff
knew this and could count on British help. The association
of Great Britain with Russia and France would guarantee the
safety of attack by Russia on Germany.
Xelegram 304, July 29, Sazonoff to Izvolski:
urgently
I
ls te r
th e
req u est
fo llo w in g
you
to
te le g r a m
c o m m u n ic a te
fro m
th e
to
th e
F rench
F rench
fo r e ig n
am b assad or
In
m ia
P eters
The German ambassador has just informed Sazonoff that if
Russia does not stop her military preparations the German Army
will be ordered to mobilize. * * *
bu rg :
Telegram 202, July 29, Izvolski to Sazonoff:
B ie u v e n u -M a r tin ,
th e
a c tin g
fo r e ig n
m in is te r ,
t o ld
me
th a t
th is
German ambassador made a communication t o h i m , e m
p lo y in g
p r a c tic a lly
th e
fo llo w in g
e x p r e s s i o n s : Germany is continu
ing her endeavors in Vienna to cause Austria to agree to a friendly
exchange of opinions w h i c h s h o u l d i n d i c a t e t h e o b j e c t a n d t h e e x t e n t
m o r n in g
of
th e
not
so
th e
step s
fa r
u n d erta k e n
been
e x a c tly
by
h er
and
in fo r m e d .
c o n c e r n in g
The
w h ic h
d e c la r a tio n
of
G erm an y
has
w ar
not
w ill
Germany hopes to
receive during the course of these negotiations explanations which
will satisfy Russia. F i n a l l y , B a r o n S c h o n a g a i n p r o t e s t e d a g a i n s t t h e
sta n d
In
a s s e r tio n
th e
th a t
w ay
of
th is
G erm an y
exch ange
w as
of
o p in io n s .
e n c o u r a g in g
A u s tr ia
to
be
u n y ie ld in g .
Telegram 203, July 29, Izvolski to Sazonoff:
Telegram 197, July 27, Izvolski to Sazonoff:
* • * Germany * * * declares that as we have r e c e i v e d t h e
M. Cambon (French ambassador in Berlin) telegraphs from Berlin assurance that Austria seeks no territorial gains, the maintenance of
that in reply to his question as to what attitude Germany would p e a c e entirely depends on Russia b e c a u s e i t t u r n s u p o n t h e n e c e s s i t y
adopt toward a partial mobilization by Russia, J a g o w (German sec f o r l o c a l i z i n g t h e A u s t r o - S e r b i a n a f f a i r ; t h a t i s , t h e p u n i s h m e n t o f
retary of state for foreign affairs) replied that a mobilization of that S e r b i a f o r h e r f o r m e r p o l i c y a n d t h e g i v i n g o f g u a r a n t i e s f o r th e
kind would not result in German m o b i l i z a t i o n , but that if Russia ' f u t u r e . • • *
76876— 11
uu^ suh
ei
12
ru
uocm wn3 944 J <n pisioazi rnoaj gls an uria* ‘l8 Apif ‘lup euius eqj uo
x r a o a a a t f n o is s h h d n o c )
______CONGRESSIONAL RECORD.
lie states:
That France and England positively could not exercise any moderat
ing influence fi» Russia. * * *
Telegram 204, July 29, Wednesday, Izvolski to Sazonoff:
The firm attitude taken up by the French press continues. It
passes severe Judgment upon the Austrian attack and upon Germany’s
manifest share of blame for it, aud unhesitatingly declares that this
touches us, and that ice can not remain unsympathetic. As regards
solidarity with us, this question is not once discussed, but is taken
as a matter of course. Every journalist expresses himself in this
sense, including such prominent personages belonging to the most diverse
parties as Pichon, Clemenceau, and even Jaures, and also Herve, the
father of antimilitarism.
•
The press reflected the French Government’s wishes.
gram 216.)
Telegram 206, July 29, Izvolski to Sazonoff:
(Tele
When the President returned to Paris, he was received at the rail
way station and in the streets with sympathetic demonstrations from
the assembled crowd. Margerie (political director in the French
foreign office) told me that the President, from his conversations
during his journey with prefects and politicians, had become con
vinced of the firm, energetic, and at the same time calm state of public
opinion, which plainly formed a correct estimate of the true signifi
cance of events. The same attitude reigned among a large section
of the Radical Socialists. The Government attaches no importance
to the antimilitary demonstrations of the revoluntionary party, and
intends to take energetic measures against it. Our military attach6
reports in detail regarding the preparatory military measures. Feeling
runs high in military circles and in the chief command. I report re
garding the press in a special telegram.
Telegram 207, July 29, Izvolski to Sazonoff shows further
efforts on the part of Germany to get an adjustment and states:
Finally Baron Schon complained of France’s military preparations,
and said that in this case Germany would be compelled to adopt simi
lar precautions. Viviani, on his part, declared that France honestly
desired peace, but at the same time was firmly determined to act in
full agreement with her allies, and Baron Schon could convince himself
that this decision was finding the liveliest support in the country.
This evening Viviani has forbidden a projected anti-war meeting of the
revolutionary party.
It was the night of the next day that the French minister of
war told the military attache that the French Government was
determined on war.
Telegram 1554, Sazonoff to Izvolski, states that if Austria
would admit that the Austro-Serbian question had assumed the
character of a European question and would declare a readi
ness to eliminate from her ultimatum those points which vio
late the sovereign right of Serbia, Russia undertakes to sus
pend her military preparations.
These preparations had been going on for at least five days.
The Russian policy was to use diplomatic negotiations to con
ceal the war measures, and. the Russian policy fixed in 1912
was to cross the German border without a declaration of war.
(Von Kuhl, p. 79, 80.)
Telegram 1555, July 30, Sazonoff wires Izvolski:
Until we receive a thoroughly satisfactory reply from Austria through
the German Government, we shall continue our military preparations.
This is communicated to you very confidentially.
The word “ thoroughly ” is interesting.
That very night, at 1 a. m., Izvolski telegraphed to Sazonoff,
telegram 216 :
From military attachi to war minister, 1 a. m.
The French war minister informed me in earnest, hearty tones (sin
cerity enthuslastique) that the Government Is firmly decided upon
tear, and requested me to confirm the hope of the French general staff
that all our efforts will be directed against Germany, and that Austria
will be treated as a quantity negligeable.
This attitude was strictly in line with the Franco-Russian
secret treaty of 1892 and the military plans worked out by the
French and Russian general staffs in annual conferences and
frequent intercommunications.
So that the French Government gave Austria no time to make
“ a thoroughly satisfactory ” reply to Russia or any other
kind of reply.
On August 1, telegram 1601, Sazonoff wired Izvolski:
At midnight the German ambassador informed me on behalf of his
Government that if within IS hours— that is, before midday on Satur
day— we do not begin to demobilize, not only as against Germany, but
also as against Austria, the German Government will be compelled to
76870-11
order mobilization. To my query as to whether this was equivalent
to a declaration of war, the ambassador replied that it was not, but
added that we wi re very near to war.
On Saturday, August 1, 5 p. in., Germany issued a general
order of mobilization; at 7.10 p. m. the German ambassador
notified Sazonoff Germany accepted the war challenge of Rus
sia. The negotiation with Austria and Germany for tiie preser
vation of peace appears to have been used as a camouflage for
a predetermined war.
Telegram 20S, July 30, from Izvolski to Sazonoff assured
him :
The French Government is ready to fulfill a llo ts obligations as an
ally. It is of opinion, however, that at the present moment, when
negotiations are still in progress between the less interested powers,
it would be to the purpose that Russia, so far as the measures of a
defensive and precautionary nature which it has deemed necessary to
adopt will permit, should not take any direct steps which would serve
Germany as a pretext for ordering the general or partial mobilization
of her forces.
The term “ defensive ” had already been defined by the
French and Russian staffs, with the approval of the French and
Russian Governments as “ offensive ” in their annual confer
ences.
The significance of this suppressed telegram is revealed in
combination with telegram 1551 of July 29 and suppressed tele
grams 209 and 210 and 216 from Paris on July 30.
The French Government (July 30) having determined on
war does not wish Germany to mobilize yet, but to gradually
discover a situation so dangerous Germany shall declare war
as a military necessity.
Telegram 1551, on July 29, from Sazonoff to Izvolski, stated:
'Nothing remains for us but to hasten our own warlike preparations
and to reckon with the probable inevitability of tear. Inform the
French Government of this and at the same time thank it for its
declaration * * • that we can fully rely upon the support of our
ally, France.
This was two days before the German Government demanded
that the Russian mobilization should stop under a penalty of
German mobilization and three days before the German Em
peror, by the German ambassador at Petersburg, accepted a
state of war as forced on the German Government. It wras not
a German declaration of war. It was a German acceptance of
a state of war.
Telegram 209, of July 30, Izvolski to Sazonoff, states that the
French ambassador in London:
Was instructed to confer with Grey as to the fixing of the combined
attitude of France and England concerning which these two powers,
in consequence of the general understanding existing between them,
have to deliberate whenever a period of political tension arises.
The time “ to deliberate ” had nearly arrived.
This proposed conference was based on the notes exchanged
between Gambon and Grey on the 22d and 23d of November,
1912 (Exhibits 8 and 9, How Diplomats Make W ar), and the
war plans of the military and naval staffs of Great Britain,
France, and Russia, already completely matured.
Telegram 210, of July 30, from Izvolski to Sazonoff, referring
to the French war minister, said that the French war minister
had said to the Russian military attach4:
* * * that toe could declare that in the higher interests of peace
we are ready temporarily to delay our preparations [or mobilization,
since this would not prevent us from continuing our preparations and
indeed from intensifying them, but we should have to refrain from the
possible greater movements of troops.
These suppressed telegrams indicate that both in Petersburg
and in Paris the negotiations for the maintenance of peace were
“ a ruse de guerre ” and being used as a screen for a war
already fully determined on both in Paris and in Petersburg.
Telegram 216 of July 31, Izvolski to Sazonoff, expressed a
fixed war determination ( l a . m. of July 31 was the night of
Thursday, July 30) :
From military attach^ to war minister. 1 a. m.
The French tear minister informed me in earnest,
cerity enthuslastique) that the Government is firmly
and requested me to confirm the hope of the French
all our efforts will be directed against Germany,
will be treated as a quantity negligeable.
hearty tones (sin
decided upon war,
general staff that
and that Austria
This was equal to a secret declaration of war on Germany, in
view of the Franco-Russian treaty and military plans agreed on.
It was 23 hours before the German Government demanded a
cessation of the Russian mobilization and two days before Ger
many declared a state of war existing.
CONGRESSIONAL RECORD.
On the same day, July 31, telegram 215 from Izvolski to
Sazonoff discloses that Baron Sehon asked Vivian! what atti
tude France would adopt in the event of an armed collision
between Russia and Germany. Viviani declined to answer.
Baron Sehon requested arrangements for passports.
On August 1 the German ambassador again visited Viviani,
and the latter expressed his “ astonishment” to Baron Schfin
at his action yesterday, “ which was not justified by the rela
tions between France and Germany,” although, as above, the
French Government had already decided upon war and advised
Russia to attack Germany with all its forces— and Viviani knew
it as premier.
Izvolski to Sazonoff, August 1, telegram 219, states that the
German ambassador had visited Viviani for the second time.
That Viviani informed him that the President of the Republic,
Poincare, Trad signed a decree ordering French mobilization.
(It may be remembered that the order of Belgian mobilization
was issued July 31 also, although the army had been mobilized
on and before July 24.) Viviani expressed his astonishment
that Germany should have adopted such a measure as demanding
that Russia demobilize under penalty of a German mobiliza
tion—
13
the guilt upon all three Russian heads, Sazonoff,
and Jaunusclikevitch. He states that at dinner
linoff, then minister of war, when he received a
Austria-Hungary had declared war on Serbia
heard the war minister exclaim—
“ CETTE
F O IS
NODS
Sukhomlinoff,
with Sukhom
telegram that
(July 25), he
M ARCHERON8 ! ”
that is, “ This time we shall march.” (Ibid., July 24, 1920,
132.) (This meant under the treaty, 1892, and military and
naval conventions with France Russia would attack Germany.)
Baron Rosen states that the intelligencia and military party
of Russia were for war. (Ibid., August 21, 1920.) (They con
trolled the Government.)
Baron Rosen further tells that Sazonoff and Jaunuscbkevitch
stopped the dispatch of the Czar’s aide to Berlin and secured
on Thursday, July 30, a reorder of the general mobilization
(Ibid., August 21, 1920.)
It was in this condition of affairs, with Russia having an
army of over 2,000,000 men on the East, who had been prac
ticing mobilization since spring and actually had been in
process of mobilizing at least since the 25th of July (Czar’s
telegram), that the German Government demanded the mobili
zation stopped under the alleged necessity of regarding it as
When a friendly exchange of views was in progress between Russia, Aus a declaration of war by Russia.
tria, and the other powders.
It w
ras well understood by the military strategists of France
Here is the refinement of high-class diplomacy where two and Russia and of Europe that Germany’s only chance In such
nations have fully prepared themselves for war, are determined a war as this was by lightning speed and efficiency, striking
on war against a neighbor, and the Premier of France assures France through Belgium. (See French and Russian military
the ambassador of Germany that a friendly exchange of views conferences.) The dispatches show that Germany tried to se
between the powers forbids Germany to prepare for defense. cure French neutrality and failed, tried to obtain British neu
trality and failed, tried to induce Belgium to submit to an
And the same day, August 1. Izvolski wires Sazonoff:
unopposed passage and failed. (Morel, Truth and the War.
Poincare declared to me in the moat categorical manner that both How Diplomats Make War, Neilson.)
(Diplomatic Documents,
he himself and the whole cabinet are firmly determined fully to carry World War, Scott.)
out the obligations laid upon us by the terms of our alliance.
SOM E
The French general mobilization and an immediate offensive
on Germany was required by the secret Russian agreement of
1892.
Izvolski, Russian ambassador, wires Sazonoff the same day,
August 1, 1914, telegram 223, as follow s:
Poincare told me that during the last few days the Austrian
ambassador had energetically assured him and Viviani that Austria
had declared to us (Russia) her readiness not only to respect the
territorial integrity of Serbia but also her sovereign rights, but that
toe ( Russia) had intentionally concealed those assurances. To my
remark that this was a complete lie, Poincare replied that similar state
ments had been made in London by Austria, where they might create
a very dangerous impression, and therefore ought to be denied there as
well.
That Austria did make these representations is shown by
telegram 195; by a verbal declaration of Count Pourtales,
French ambassador in St. Petersburg; and by SazonofFs an
swer contained in the first two sentences from St. Petersburg
of telegram 1554 and by many other records.
The attitude of Italy is shown by telegram 220 of August 1,
from Izvolski to Sazonoff, as follow s:
Margerie told me that according to information from a very
secret source Italy apparently intends, in reliance upon the manner
In which the conflict has arisen, to remain neutral at first, and then
to come to one decision or another in accordance uHth the course
of events.
The entente had already weakened Italy’s attachment to Ger
many by concessions in Africa and elsewhere.
The chief of the German general staff, Von Moltke’s memo
randum of 1912, showed that the Germans did not count upon
Italy. (Exhibit 11.) That Germany could not compete on the
ocean with Britain or on land witli R ussia; that Germany had
but little hope in a war with Russia and France.
Austria accepted the proposed mediation as between herself
and Serbia as two sovereign Governments (Austrian Red Book
III, p. 65), but it availed nothing.
Petrograd knew of Austria’s acceptance of mediation which
was disclosed to Grey in London on the 1st o f August. (British
White Book, 133.)
Sazonoff, former Russian minisier of foreign affairs seven
years later, November 15, 1921 In La Revue de France, tells that
the Czar received a telegram from the Kaiser begging the Czar,
notwithstanding the declaration of war, to keep the troops from
the German frontier, and that the Geivnan Emperor was nearly
frantic.
Baron Rosen in “ Forty Years of Diplomatic Life,” Saturday
Evening Post, August 21, 1920, page 85, gives it as his opinion
that the Russian mobilization necessarily led to war. He places
7 6 8 7 0 — 11
E V ID E N C E F R O M
B E R D IN .
It was the policy of Germany to support Austria in rebuking
Serbia, as far as could be done through diplomacy, but even
if the diplomatic effort should fail, Germany did not Intend to
be drawn into a war.
On Sunday, the 26th of July, the Kaiser returned from his
Scandinavian cruise. Ou Monday a rapid fire of telegrams
took place from Berlin to Vienna, under the instruction of the
Kaiser, demanding a peaceful adjustment, Berlin assuming
that the purpose of the Entente was not necessarily hostile or
determined on war, and that the negotiations for a peaceful
settlement was really sincere, put great pressure on the Aus
trian Government, as appears, through the following telegrams:
[From the German Chancellor to the German ambassador, Vienna,
July 27.]
We can not reject the r61e of mediator and must place the English
proposal before the Vienna cabinet for consideration. Request Count
Berchtold’s opinion on the British proposal, as well as ou Sazonoff’ s
wish to negotiate directly with Vienna. (Die Deutschen Dokumente,
No. 396.)
On July 28 he sent this dispatch:
The refusal of every exchange of views with Petrograd would be a
serious mistake if it provokes Russia precisely to armed interference,
which Austria is primarily interested in avoiding. We are ready, to
be sure, to fulfill our obligations as an ally, but must refuse to allow
ourselves to be drawn by Vienna into a world conflagration frivolously
and in disregard of our advice. Please say this to Count Berchtold at
once with all emphasis and with great seriousness. (Ibid. No. 890.)
On July 29 he sent this dispatch:
I regard the attitude of the Austrian Government and its unparal
leled procedure toward the various Governments with increasing as
tonishment * * *. It leaves us wholly in the dark as to Its pro
gram * • *.
I must conclude that the Austrian Government
is harboring plans which it sees fit to conceal from us in order to
assure herself in all events of German support and avoid the refusal
which might result from a frank statement. (Ibid. No. 396, p. 301).
He sent five warning telegrams on the 29th and 30th to
Vienna. (Ibid.)
The Kaiser had informed Foreign Minister JagowT on seeing
the Serbian reply accepting the Austrian conditions and agree
ing to mediation that—
Now, no cause for war any longer exists.
On July 30 the German Chancellor sent the following tele
gram :
If Austria refuses all negotiations, wo are face to face with a con
flagration in which England will be against us. Rumania and Italy,
according to all indications, will not be for us, and we shall stand tua
[k!(jo)uai O) pdjoijqsdJ raspoi-iqucl 8 pus •squ.api oj;suBiJddai{ ‘+saa4 sip
-Uitu am dnujjuoosip oj aiqissoduii sbav r ja siu ji aip susiApu oq
ei
cmooaa iv\oiss?m;)\o:)
14
CONGRESSIONAL RECORD.
against four powers. Through England’ s opposition the main blow
will fall on Germany. Austria’ s political prestige, the military honor
of her army, as well as her just claims against Serbia, can be ade
quately satisfied by her occupation of Belgrade or other places.
Through her humiliation of Serbia she will make her position in the
Balkans, as well as in her relation to Russia, strong again. Under
these circumstances, we must urgently and emphatically press upon
the consideration of the Vienna Cabinet the adoption of mediation in
accordance with the above honorable conditions. The responsibility
for the consequences which would otherwise follow would be for
Austria and for us an uncommonly heavy one. (German White Book,
p. 395.)
In Oman’s Outbreak of the War, pages 61, 68. 69, 77, 79,
88, and 89, will be found the exchange of telegrams between
William II and Nicholas, as follows:
J
uly
28— 10.45
p
.
m
.
I have heard with the greatest anxiety of the impression which is
caused by the action of Austro-IIungary against Serbia. The un
scrupulous agitation which had been going on for years in Serbia has
led to the revolting crime of which Archduke Franz Ferdinand baa
become a victim. The spirit which made the Serbians murder their own
King and his consort still dominates that country. Doubtless you will
agree with me that both of us, you as well as I, and all other sov
ereigns, have a common interest to insist that all those who are
responsible for this horrible murder shall suffer their deserved punish
ment.
On the other hand, I by no means overlook the difficulty encountered
by you and your Government to stem the tide of public opinion. In
view of the cordial friendship which has joined us both for a long
time with firm ties, I shall use my entire influence to induce AustriaHungary to obtain a frank and satisfactory understanding with Russia.
I hope confidently that you will support me in my efforts to overcome
all difficulties which may yet arise. Your most sincere and devoted
friend and cousin.
W
il h e l m
.
(Oman’s Outbreak of the War, p. 61.)
P e t e r h o f P a l a c e , July *9— 1 p. m.
I am glad that you are back in Germany. In this serious moment I
ask you earnestly to help me. An ignominious war has been declared
against a weak country, and in Russia the indignation, which I fully
share, is tremendous. I fear that very soon I shall be unable to
resist the pressure exercised upon me, and- that I shall be forced to
take measures which will lead to war.
To prevent such a calamity
as a European war would be, I urge
you in the nameof our old
friendship to do all In your power to restrain your ally from going
too far.
N
ic h o l a s .
(Oman’ s Outbreak of the War, p. 61.)
J u l y 29^-6.30 p . m .
I have received your telegram and Ishare your desire for the con
servation of peace. However, I can not— as I told you in my first
telegram— consider the action of Austrin-nungary as an “ ignominious
war.” Austria-Hungary knows from experience that the promises of
Serbia, as long as they are merely on paper, are entirely unreliable.
According to my opinion the action of Austria-Hungary Is to be con
sidered as an attempt to receive full guaranty that the promises of
Serbia are effectively translated into deeds. In this opinion I am
strengthened by the explanation of the Austrian cabinet that AustriaHungary intended no territorial gain at the expense of Serbia. I am
therefore of opinion that it is perfectly possible for Russia to remain
a spectator in the Austro-Serbian War without drawing Europe into
the most terrible war it has ever seen. I believe that a direct under
standing is possible and desirable between Your Government and
Vienna, an understanding which, as I have already telegraphed you,
my Government endeavors to aid with all possible effort. Naturally,
military measures by Russia, which might be construed as a menace
by Austria-Hungary, would accelerate a calamity which both of us
desire to avoid, and would undermine my position as mediator, which,
upon your appeal to my friendship and aid, I willingly accepted.
(Oman's Outbreak of the War, p. 6 8 .)
W
il h e l m
.
It was the very next night that the French minister of war
said the French Government was determined on war.— (Tele
gram 216.)
P e t e r h o f P a l a c e , July £9.
Thanks for your telegram, which is conciliatory, while the official
message presented by your ambassador to my foreign minister was
conveyed in a very different tone. I beg you to explain the difference.
It would be right to give over the Austro-Serbian problem to The
Hague Conference. I trust in your wisdom and friendship.
(Oman's Outbreak of the War, p. 69.)
N ic h o l a s .
76876— 11
J u l y 30— 1 a m .
My ambassador has instructions to direct the attention of your
Government to the dangers and serious consequences of a mobiliza
tion. I have told you the same in my last telegram. Austria-Hungary
has mobilized only against Serbia, and only a part of her army. If
Russia, as seems to be the case, according to your advice and that
of your Government, mobilizes against Austria-Hungary, the part of
the mediator, with which you have intrusted me in such friendly
manner and which I have accepted upon your express desire, is threat
ened, if not made impossible.
The entire weight of decision now
rests upon your shoulders; you have to bear the responsibility of war
or peace.
W il h e l m .
(Oman’s Outbreak of the War, p.
7 7 .)
This was the day the Tsar reordered Russian mobilization
and the French minister advised Russia “ the French Govern
ment was determined on war.”
P e t e r h o f , July S — 1.£0 p. m.
O
I thank you from my heart for your quick reply. I am sending
to-night Tatiseheff (Russian honorary aid to the Kaiser) with in
structlons. The military measures now taking form were decided upon
five days ago, and for the reason of defense against the preparations
of Austria. I hope with all my heart that these measures will not
influence in any manner your position as mediator, which I appraise
very highly. We need your strong pressure upon Austria so that
an understanding can be arrived at with us.
N ic h o l a s .
(German White Book, 1915, 23-A.)
Then Nicholas reorders Russian mobilization.
J uly 31, 1914.
I thank you cordially for your mediation, which permits the hope
that everything may yet end peaceably. It is technically impossible
to discontinue our military preparations, which have been made neces
sary by the Austrian mobilization. It is far from us to want war. As
long as the negotiations between Austria and Serbia continue, my
troops will undertake no provocative action. I give you my solemn
word thereon. I confide with all my faith in the grace of God, and I
hope for the success of your mediation in Vienna for the welfare of
our countries and the peace of Europe.
Nicholas.
(Oman’s Outbreak of the War, p. 8 8 .)
Under the 1892 treaty a partial Austrian mobilization re
quired Russia and France to attack Germany. The AustrianSerbian negotiations could end when Nicholas said the word
and Russia was ready to enter Germany.
J uly 31— 2 p . m .
Upon your appeal to my friendship and your request for my aid, I
have engaged in mediation bettocen your Government and the Govern
ment of Austria-Hungary. While this action was taking place your
troops were being mobilized against my ally, Austria-Hungary, whereby,
as I hRve already communicated to you, my mediation has become
almost illusory. In sptte of this I have continued it, and I now receive
reliable news that serious preparations for war are going on on my
eastern frontier. The responsibility for the security of my country
forces me to measures of defense. I have gone to the extreme limit
of the possible in my efforts for the preservation of the peace of the
world. It is not I who bear the responsibility for the misfortune
which now threatens the entire civilized world. It rests in your hand
to avert it. No one threatens the honor and peace of Russia, which
might well have awaited the success of my mediation. The friendship
for you and your country, bequeathed to me by my grandfather on his
deathbed, has always hern sacred to me, and I have stood faithfully by
Russia while it was in serious affliction, especially during its last war,
The peace of Europe can still be preserved by you if Russia decides
to discontinue those military preparations which menace Germany and
Austria-Hungary.
W il h e l m .
(Oman’s Outbreak of the War, p. 89.)
No reply. Wilhelm, at midnight Friday, gave notice the Ger
man Army would mobilize if by noon Saturday Russian mobili
zation did not stop. At 5 p. m. Saturday, August 1, German
mobilization was issued. At 7.10 p. m. German ambassador
at Fetrograd advised the Russian Government that Germany
accepted the Russian challenge and the state of war forced on
Germany.
It will be observed in this exchange of telegrams that Nicho
las was under a pressure he feared he should be unable to re
sist. On the very day that the Kaiser advised him that he
would have to bear the responsibility of war or peace if he
ordered a general mobilization, he reordered the mobilization
which had been begun by his own statement on July 25, and on
July 31. having the day before ordered the general mobilization,
CONGRESSIONAL RECORD
15
he advises the Kaiser it was impossible to discontinue the mili distrust, imperialistic ideals, and a patriotism restricted to material
tary preparations, and he gives his solemn word that the Rus national instincts respectively worked each other up without its ever
sian troops will undertake no provocative action, although they being possible to say that any particular nation had contributed most
cross the German border in four places the next day. (Kuhl to the general tendency of the world. (Ibid. 169.)
7R-80.)
Hollweg points out that Russia mobilized because it desired
The German leaders, getting daily reports from Paris, Lon war. It refused to suspend mobilization.
don, Brussels, and Petersburg, accepted what they had become
In spite of the fact that Vienna was ready to enter into direct con
convinced was now absolutely unavoidable, and on Saturday, versation with Petersburg on the Serbian issue.
5 p. m., August 1, ordered a general mobilization.
In spite of the fact that Vienna had accepted the Grey mediation.
(Note presented by the German ambassador at St. Petersburg on
August 1, at 7.10 p. m.)
The Imperial German Government have used every effort since the
beginning of the crisis to bring about a peaceful settlement. In com
pliance with a wish expressed to him by His Majesty the Emperor of
Russia, the German Emperor had undertaken, in concert with Great
Britain, the part of mediator between the cabinets of Vienna and St.
Petersburg; but Russia, without waiting for any result, proceeded
to a general mobilization of her forces both on land and sea. In con
sequence of this threatening step, which was not justified by any mili
tary proceedings on the part of Germany, the German Empire was
faced by a grave and imminent danger. If the German Government
had failed to guard against this peril, they would have compromised
the safety and the very existence of Germany. The German Govern
ment were, therefore, obliged to make representations to the Govern
ment of His Majesty the Emperor of All the Russias and to insist upon
a cessation of the afores.Ad military acts. Russia having refused
to comply with (not haviDg considered It necessnry to answer) this
demand, and having shown by this refusal (this attitude) that her
action was directed against Germany, \ have the honor, on the in
structions of my Government, to inform Your Excellency ns follow s:
Ills Majesty the Emperor, my august sovereign, in the name of the
German Empire, accepts the challenge and considers himself at war
with Russia.
PO TJR TA LE S.
Tiie words in parentheses occur in the original. It must be supposed
that two variations had been prepared in advance, and that by mistake
they were both inserted in the note.
R E L A T IV E E N T E N T E A N D G E R M A N
P R E P A R A T IO N S .
General Von Moltke, in the summary above referred to, says
that Germany would be obliged in the event of war—
to take the field against France with an inferiority in infantry (though
still with a slight superiority in artillery), and will further be at
tacked in the rear by Russia.
And he says:
In view of the enormous sums Russia is spending on the reorganiza
tion of her army she will be stronger with every year that passes. It
Is just as impossible for Germany to try and compete with Russia as
a land power as it is for her to attempt to catch up with England as
a sea power.
In chapter 10 (let Franco explain) Bausman points out the
preparedness of the entente allies—Russia, France, and Eng
land—and that in 1914 the expenditures of Russia, France,
and England for war purposes made a total of $1,337,259,735,
while Germany and Austria expended in 1914 $420,133,850, so
that the entente allies expended $917,000,000 more in 1914 than
Germany and Austria, and this does not include Belgium or
Italy.
The number of men available for immediate action of Russia, France, England, and Italy was 2,663,003. The total for
Germany and Austria was 1,176.741.
General Buat’s figures give the German active army 870,000
men, the French active army 910.000 men. General JofTre in
Fra neo-Russian conferences o f 1913 said he would have 200,000
more men than agreed to.
Of course, Great Britain, France, and Russia controlled the
sea through the giant navy of Great Britain, and therefore
Germany was cut off from supplies throughout the world, while
the Entente Allies had the whole world to draw from.
When the war ended Germany with approximately 67,000,000
people was facing nearly the whole world, or over 1,400,000,000
people against the German Government.
Chancellor Hollweg states that—
The supposition that Germany let loose war out of mere lust of
world power is so silly that a historian would only take it seriously
in the entire absence of any other explanation at all. * * * Such
an assumption ascribes to us the sort of folly that is only attributed
to an opponent In the heat of political controversy. (Hollweg, 163.)
He says:
The controversy as to which party gave the first impu+se to a pro
gram of general armament and to a perversion of the policy of alli
ances will probably never be fought to a finish. Immeasurable mutual
7 6 8 7 0 — 11
In spite of the fact that Vienna bad given assurances as to the
integrity of Serbia.
In spite of the fact that Vienna was prepared not to go beyond such
a temporary occupation of a part of Serbian territory as England itself
had considered acceptable.
Finally, in spite of the fact that Austria had only mobilized
against Serbia and that Germany had not yet mobilized at all.
Former Chancellor Hollweg then says:
Consequently, when the telegraph brought us news of the mobili
zation on the morning of the 31st of July, we could not be other than
convinced that Russia desired war under all conditions.
It appears that Deither Germany nor Austria knew the terms
of the treaty of 1892 requiring Russia and France to attack
Germany if Austria mobilized.
SOM E
B E L G IA N
E V ID E N C E .
In the reports from the Belgian ministers and charges
d’affaires at Berlin, London, and Paris to the Minister for
Foreign Affairs in Brussels, printed by E. S. Mitler & Sons,
Berlin, will he found 200 pages of evidence going to show the
attitude of Quai d’Orsay, of London, and of Berlin to the
general effect that the Berlin Government was very desirous of
maintaining peace, that the French Government became increas
ingly disposed to war as the war powers of Russia and France
were expanded and the Entente with Great Britain became
dependable.
For example, the Belgian minister at Berlin to the Minister
for Foreign Affairs of Belgium says, page 184:
Everyone in England and France considers the Entente Cordiale
to be a defensive and offensive alliance against Germany. * * *
It is the Entente Cordiale which has reawakened in France an idea
of ravanche, which up to then had slumbered. It is also the Entente
Cordiale which is responsible for the state of uneasiness and unrest
prevailing in Europe for the last seven years. * * * For the
present it must therefore be considered as approved that the plan of
assisting France in a war against Germany by landing an army of
150,000 English troops was discussed in London. There is nothing in
this calculated to surprise us. It is the continuation of the singular
proposals made some years ago by Colonel Barnardston to General
Ducarne.
The Belgian minister, Guilhmme, at Paris to the Belgian
Minister for Foreign Affairs, January 16. 1914, says:
I already had the honor of informing you that it is MM. PoincarS
Delcasse, Millerand, and their friends who have inaugurated and pur
sued the nationalistic, militaristic, and Chauvinistic policy, the renas
cence of which we witnessed. Suoh a policy constitutes a danger for
Europe— and also for Belgium. I see in it the greatest peril threat
ening to-day the peace of Europe. * * * The attitude adopted by
I Barthou has provoked a recrudescence of militarism in Germany.
; (Ibid. p. 169.)
The Belgian minister at Berlin in a long letter on February
20, 1914, quotes the French ambassador at Berlin, as follow s:
The majority of the Germans and of the French undoubtedly wish to
live in peace. But in both countries there is a powerful minority dream
ing solely of battles, of wars of conquest, or ravanche. Herein lies the
danger; it is like a powder barrel which any rash act may set on fire.
(Ibid. p. 173.)
On May 8, 1914, the Belgian Minister Guillaume at Paris to
the Belgian foreign office quotes an “ experienced and highly
placed diplomat” as stating:
If a serious incident should arise one of these days between Franc*
and Germany, the statesmen of the two countries will hove to arrive
at a peaceful solution of the matter within three days or else there
will be war.
One of the most dangerous elements of the present situation is the
return of France to the three-years’ service; the latter has been incon
siderately imposed by the military party, and the country is unable to
stand it. Before two years have elapsed France will be placed before
the alternative either of abrogating the three-years’ act or of going to
war. * * * The press in both countries is blameworthy. The
campaign pursued in Germany against the Foreign Legion is eaceedingly
(MODHU
a
1Y N 0IS
-4
CONGSESSIONAL R ECO RD.
w
clumxj, ami the tone o} the French newspapers is invariably acrimonious j
a n d aggressive.
(Ibid. p. 181.)
Mr. Neilson points out (p. 205) :
News had reached Berlin that Belgium had Issued ns early ns July
On June 9, 1914, Guillaume wires the Belgian foreign office j 21 a mobilization circular, and an undated Instruction to Belgian am
bassadors which contained the Information they were to give to the
from Paris as follow s:
During the last few days the press campaign in favor of the prin chancellors as to her “ strengthened peace footing.”
ciple of the three-gears’ service has been extremely violent. All sorts
The Belgian circular of July 24 (day Austria made demand
of means have been adopted with a view to influencing public opinion. on Serbia) announced that the Belgian Army had already
The newspapers have not hesitated to compromise even General .Toffre. j been mobilized and forts near Germany put in order for war.
We have also seen the French ambassador in St. Petersburg take— j
In the circular of the Belgian Foreign Office to its ambassa
contrary to all precedents— an initiative which may prove dangerous j dors, dated July 2
was the inclosure heretofore referred to,
for the future of France. Is it true that the St. Petersburg cabinet I without date, but necessarily either of that date or of an earlier
pledged France to adopt the three-years’ service and that the former date, which states:
is to-day bringing all its influence to bear in order to prevent the abro- | All necessary steps to insure respect of Belgian neutrality have
gation of the law in questionT * * * We must therefore ask our- | nevertheless been taken by the Government. The Belgian Army has
selves if the attitude of the St. Petersburg cabinet is based on the j been mobilized and Is taking up such strategic positions as have been
conviction that events are imminent which will permit of Russia inak- ! chosen to secure the defense of the country and the respect of Its
ing use of the instrument placed by her in the hand of her ally. (.Ibid. neutrality. The forts of Antwerp and on the Meuse have been put In
p. 182.)
a state of defense.
( “ Events are imminent ” means “ war is near.” )
The Belgian minister, Beyens, at Berlin, June 12. 1914, in a
dispatch to the Belgian foreign office, says:
There is no manner of doubt what the Grey-Cambon letters
meant. The complete plan of naval and military strategy was
worked out between the French and British naval and army
Another criticism which can be leveled against the champions of the officers, and on Sunday morning, the very next morning, the
three years’ service In France is that of perpetually dragging Russia j time Germany ordered her mobilization Saturday afternoon,
into the discussion— Russia whose political aims remain a mystery. : and accepted the state of war intended by Russia and con
who utilizes the dual alliance solely for her own benefit and who like templated by the mobilization and th» Czar’s secret order to
wise, although she is in noways threatened by Germany, increases her the staff, British regiments were marching through London to
armaments in alarming proportion. (Ibid. p. 186.)
the front fully equipped for war. (How Diplomats Make War,
p. 295.)
S O M E E V ID E N C E F R O M L O N D O N .
A number of the members of the British Cabinet resigned
In great detail and with innumerable quotations, Francis when they discovered this secret diplomacy, Including Lord
Neilson, a member of the English Parliament, in his work, Morley and the famous patriot, John Burns.
How Diplomats Make War, substantially confirms from Eng
The French Government immediately offered Belgium mililish records wliat has been disclosed in the telegrams above I tary support (ibid., 810). and the following dispatch from the
quoted; that is, that there was in effect an understanding be | French ambassador at Brussels to the French Government extween Russia, France, and Great Britain with the military and |plains the relations between Franqe and Belgium. The telenaval details all worked out by repeated conferences of their i gram follow s:
general staffs and the understanding that Great Britain would
The chief of the cabinet of the Belgian Ministry of War has asked
cooperate with France in the event of a war with Germany. the French military attach^ to prepare at once for the cooperation
For example:
! and contact of Fi*ench troops with the Belgian Army pending the
In London, on Saturday. August 1, Lord Lansdowne, Sir Edward | results of the appeal to the guaranteeing powers now being made.
Carson, and Mr. Bonar Law hastened to the center of the diplomatic Orders have therefore been given to Belgian provincial governors not
world.
(How Diplomats Make War, p. 293.)
Germany had issued to regard movements of French troops as a violation of the frontier.
orders for the general mobilization of her army and navy ; the next day,
The British troops took their place on the left wing of the
the Sabbath, to be the first day. Through the long Sabbath all over French under the plans loug since worked out.
the Kingdom thousands of feet tramped Channelwards, regiment after
The mobilization of the Belgian army was completed at least
regiment with full kit wound through London streets as the hells from the day before the general mobilization of the Russian army
tower and steeple called the folk to prayer. Ministers went to a cabinet begun under Sukhomlinofrs order, July 25, about which “ he
meeting there and yielded up to the French ambassador some token of ; lied ” to the Russian Czar (see Sukhomlinoff’s trial) when he
British friendship.
i represented to the Russian Czar that it was a partial mobiliza-
I (ion. hut which was reordered as a general mobilization by the
The German mobilization was ordered 5 p. m. Saturday.
The English regiments were on the March Sunday morning Russian Czar on July 30.
In the trial of Sukliomlinoff, Minister of War, at St. Peters
armed for war.
On August 1 Sir Edward Grey told the German ambassador burg, by the revolutionary government of Russia, Bailsman
that Great Britain would not engage to remain neutral, that— says:
icc must keep our hands free.
(How Diplomats Make Wsr, 290.)
The fact was Grey was not really free hut fully committed,
both by the real intent of the agreement with France, hut far
more by the interests of Great Britain, and Great Britain
instantly carried out the commitment under the agreements
with France and with Russia.
Telegram 148 from the British Foreign Office, August 2, 1914:
SukhomlinoiT confessed that after the Czar had received these tele
grams from the Kaiser (he Czar railed the Minister of War up by
telephone and told him to stop the mobilization.
At that time the
Czar thought the mobilization was only partial. It was really already
general, a procedure for which the direct authority of the Czar was
necessary and had not been given. SukhomlinoiT confessed that in
making the mobilization general he had concealed this from the Czar;
nay, more, that he did not reveal it ho him in the conversation by tele
phone. . He next admitted that he promised the. Czar to stop the further
mobilization and not to issue a general mobilization. He hung up the
telephone with a false promise to the Czar, and, he says, went on with
the mobilization. His fellow rogue, Jaunuschkovitch, floundering in his
testimony and confronted at all times with contradictions, left the
stand in the same disgusting and humiliating condition. (Bausman,
200; also Oman’s Outbreak of the War, € 8 .)
After the Cabinet meeting this morning, I gave M. Cambon the fol
lowing memorandum:
“ I am authorized to give an assurance that if the German fleet comes
into the Channel or through the North Pea to undertake hostile opera
tions against French coast or shipping, the British fleet will give
all the protection in its power.
:
“ This assurance is, of course, subject to the policy of His Majesty’s
Government receiving the support of Parliament, and must not be
If the democracies or peoples of the world continue to permit
taken as binding His Majesty’s Government to take any action until |secret diplomacy with Its ambitious intrigue, militarism, comthe above contingency of action by the German fleet takes place.”
| mercial Imperialism, this World War will not be the last.
So that the entente was ie fact effective, after all, ou the cer
tain contingency of action by the German fleet, and Parlia
ment was committed by its own Government’s acts. This ac
tion was equal to agreeing to attack Germany as an ally of
France. The interests of Great Britain, however, made it nec
essary when a war actually came between France and Ger
many that Great Britain should fight the military rulers of the
• German people who would have been dangerous to British in
terests if they had conquered France and dominated western
Europe (whether they were responsible for the war or not).
7*6876— 11
The greatest of the English papers, the London Times, cor|rectly states the true position with regard to this mailer of
; British participation in the Triple Entente, as follows ( flow
! Diplomats Make War, 336) :
[From the London Times. March 15, 1915.]
There are still some Englishmen and Englishwomen who greatly err
as to the reasons that have forced England to draw the sword. They
know that It was Germany’ s flagrant violation of Belgian neutrality
which filled the cup of her indignation and made her people insist
i on war (sic). They do not reflect that our honor and our interest
u
y
.....
a
■ :::..........; " ■ :.~ ■
....
...■
■
u
j d
a
i v
j v u
i s s
V I
tiu ts A i
.........■ “ ®
CONGRESSIONAL RECORD
must have compelled us to join France and Russia even if Germany
had scrupulously respected the rights of her small neighbors, and had
sought to back her way into France through the eastern fortresses.
Great Britain was led into the war on the theory that British
interests required cooperation icith France and Russia, for
which Sir Edward Grey had laid the ground by years of naval
and military conferences in which every detail of a war on Ger
many had been carefully outlined.
In Entente Diplomacy and the World, Documents 847 and
850 (Exhibit V II), will be found the British-Itussian Entente
plans.
These dispatches demonstrate beyond a possibility of doubt
that there were secret conventions thoroughly worked out and
planned between Russia, France, and Great Britain as to how
war should he made on Germany, involving Great Britain send
ing empty ships into the Baltic Sea for Russia’s use against
Germany just before the war of 1914 was declared; (Doc.
850) that England should be prepared to fetter the German
fleet in the North Sea; arrangements in the Mediterranean
were to be made, and especial authority to the Russian ships
to use French and English ports to establish a complete working
plan between the navies and the armies of the three countries—
Great Britain, Russia, and France. The limit of discussion
makes it inexpedient to quote these innumerable documents.
It should be sufficient to call the attention of the Senate to
these documents and of their convincing character.
The Russian ambassador, London, June 25, 1914, telegraphs
to Sazonoff (Doc. 855, p. 730. ibid.) :
17
made March 11 and 24, 1913, of British freedom from engage
ments with continental powers. (See Neilson How Diplomats
Make W ar; Morel Truth and the War, etc.)
These disclosures justify America in receiving the assurances
of European diplomats with some reserve.
Lloyd George five months before the war said:
The German Army is vital not merely to the existence of the German
Empire, but to the very life and independence of the nation Itself,
surrounded as Germany is by other nations, each of which possesses
arms about as powerful as her own. (Daily Chronicle, January 1 ,
1 9 1 4 .)
The French Army was much more powerful than the German
(conferences above quoted).
The semiofficial paper Birsfiewija Wjedomasti, of Petrograd,
on June 13, 1914, before the Serajevo tragedy, stated:
Russia is ready and hopes that France is ready.
(Bourse Gazette.)
This article appears to have been inspired by Sukhomlinoff,
minister of war. This paper goes on to state that the Russian
Army is now 2,320,000 men. (Bausman, 31.)
This paper (supra) further said:
We have projected and begun to build a whole network of strategic
railways to concentrate the army as quickly as possible. (Bausman,
Appendix Q.)
THE
EUROPEAN
PRESS.
The press of Russia, France, Germany, and Serbia in 1914
was a press largely controlled by subsidies.
Grey told me to-day that he was greatly alarmed by the false rumors
The journals were not supported by advertisements as in
which were circulating in the German press concerning the contents of America. They relied upon subsidies from governments, poli
the alleged naval convention between England and Russia_ * * * ticians, and from commercial and financial interests.
Grey assured the German ambassador * * * that between England,
Through this agency the people of Germany, France, and
on the one hand, and France and Russia there existed neither an alli Russia were taught to hate eacli other. The death of the crown
ance nor a convention * * * that their negotiations had never prince of Austria was attributed by the Government of Aus
assumed a character directed against Germany nor had they any r e f e r tria to the Serbian press propaganda financed by the Russian
ence to the so-called “ encircling policy.”
Government through the Russian minister at Belgrade with
the connivance of the Serbian Government. In Livre Nolr,
On the face of the Cambon-Grey letters was an express dis which discloses the secret archives of the Russian foreign
claimer of either Government being bound by them, but the office, are many dispatches showing the manner in which the
actual intent and true, common interest against the German Russian Government subsidized and directed the press.
Imperial Government is quite clear.
On page 208, Livre Noir, for example, in telegram 591, De
The English honor and interest were both involved. It cer cember 18, 1913, Isvolsky, the Russian ambassador at Paris,
tainly appears that France, Russia, and Great Britain did have speaking of the Paris press, says:
secret conventions; the conventions ivere directed against Ger
The papers which are devoted to us, as Le Matin, rely on me for
many, worked out in detail then in process of execution and
they were in pursuance of “ the encircling policy,” and were instructions, and if we do not give them directions they might per
haps engage themselves with a false view.
carried out on the battle fields and at sea within 60 days.
Three days later Itusso-Serbian intrigues led to the murder
On page 213 (ibid.) Isvolsky says:
of Archduke Ferdinand, and the grand drama, with stage
It is particularly important here, at such a moment, to control the
fully set, opened to the astonishment and grief of the poor,
press. Otherwise it may engage itself with a false view ; besides it is
little common people who die and pay taxes.
The secret entente agreements with France and Russia were more than sure that it is continually moved by financial circles who
repeatedly denied by the British foreign office in Parliament have in view only their own special interests.
by its representatives asserting tiiat there was no commitment
On page 271 of Livre Noir Isvolsky writes:
of the British Government to support the French Government
Endeavoring to maintain the attitudes which are desirable for us
in case o f a war with Germany.
On March 10 of the following year, 1913, Mr. Asquith, re with the press of the Government and political world, I am doing my
plying to a question in the Commons from Lord Hugh Cecil, utmost at the same time to influence the press. With this in view,
thanks to the measures taken in time, considerable results have been
denied that England was under an—
obligation arising owing to an assurance given by the ministry in the
course of diplomatic negotiations to send a very large armed force out
of this country to operate in Europe.
On March 24 he made similar denials in reply to questions
from Sir W. Byles and Mr. King.
Ou April 14 Mr. Runciman, in a speech at Birkenhead,
denied “ in the most categorical way ” the existence of a secret
understanding with any foreign power.
On May 3 the Secretary for the Colonies, Mr. Harcourt, de
clared that he “ could conceive no circumstances in which con
tinental operations would not be a crime against the people o '
this country.”
On June 28 the Undersecretary for Foreign Affairs, Mr
Acland, declared publicly that—
in no European question were we concerned to interfere with a big
army.
On July 1 Lord Loreburn, Lord Chancellor from 1906 to 1912,
said—
that any British Government would be so guilty toward our country
as to take up arms in a foreign quarrel is more than I can believe.
On April 28, 1914, and again on June 11, Sir Edward Grey
confirmed in the House o f Commons Mr. Asquith’s assertion,
76876—11----- 3
obtained. As you know, I do not Intervene directly in the distribu
tion of the subsidies, but this distribution in which the French min
isters take part, the Minister of Foreign Affairs and the Minister of
Finance, is. it appears, efficacious and obtains its ends. From my side
I exert every day to influence personally the most important journals of
Paris, such as Temps, Journal des Debats, L ’Echo de Paris.
The manner in which the press responds to such stimulation
has heretofore been shown in the dispatches which I have
quoted, showing that they were instrumentalities in moving th^,
French people to war and in moving the Russian people to war.
From these disclosures it will appear how extremely signifi
cant to the German rulers was the attitude of the French press
in Paris in July, 1914, where they were denouncing Germany
and Austria and demanding the support of Russia, and it is
worth while to recall the declaration of the Nouvelle Revue
that France was determined on war, and of the Petrograd
press that Russia was determined ou war, and that France and
Russia were prepared.
lu the American press a few weeks ago was an item announc
ing that the French Government requested 8,000,000 francs
to be used with the press without disclosing the details.
I have just received by mail as a Senator of the United
States a book of 112 pages of press clippings strenuously sup
porting the French policy in the Ruhr. It is obviously paid
61
18
U a U L K d a
l
v ju u is s a tiz / iw L S
CONGRESSIONAL RECORD.
propaganda. The first article declares, among other things, in
regard to the World W ar:
What Germany could not do in battle she Is doing by evasion and
maneuver. She has broken the unity of the Allies and has made of
Armistice Day a hollow mockery. America, and history must so write
it, was the first to falter. Last in the field, we were the first to leave.
This unfair imputation was printed in an American news
paper and purports to be written by an American editor.
The fact is, America, and history must so write it, won the
war, and only left when the military dynasties had been
destroyed in battle.
When the Allies were sending delegation after delegation
imploring our help, telling us that the British and Belgian
troops had their backs to the wall, and that the French troops
were bled white, America sent 2,000,000 of the ablest and brav
est men on earth to the battle line and drove the Germans
back, and the American President by diplomacy presented terms
the German people accepted as a basis of armistice. See the
dispatch of June 3, 1918, of General Foch, Lloyd-George, Clemenceau, and Orlando, Ministers of Great Britain, France, and
Italy, beseeching our assistance immediately (Exhibit 13) and
urgently declaring that without American help the war was lost
and victory impossible.
Until the great mass of European people understand how
they are ruled and led into war by a few leaders there can
be little hope of permanent peace in the w’orld. If a few
diplomats having access to the national purse are permitted
by propaganda, through a subsidized press, to teach the people
to hate each other, permanent peace is impossible.
The peoples ought to be taught to understand each other,
to respect each other and promote friendly commercial rela
tions with each other.
There Is no possible reason why the farmers and laborers
of France should be led to kill the farmers and laborers of
Germany, and there is no just cause why the mechanics, clerks,
and domestics of Germany should be taught to hate and kill
the mechanics, clerks, and domestics of France. They are all
alike entitled to life, liberty, and the pursuit of happiness.
But their peace depends on the intelligence, power, and initia
tive of the people themselves expressed through their proper
parliaments elected by the suffrage of the people. This is a
matter that the people of Europe themselves must work out.
They can not be advised from America. Possibly the seeds
we sow in feeding their famishing may finally lead their states
men to realize that the American ideals of international under
standing and good will is the better policy.
The Belgian minister at Berlin, Baron Beyens, speaks about
the French inflammatory discourses which place Belgium in
so dangerous a position and which interfere with those trying
to preserve the peace between France and Germany.
Baron Guillaume, the Belgian ambassador at Paris, wrote
his home office, May 8, that Frenchmen were proclaiming a
certain victory over Germany. (Dip. Rev., p. 288.)
The Russian ambassador at Berlin advises his Government
March 12, 1914, that Germany “ is trying to appear not afraid.”
Isvolsky, the Russian ambassador at Paris, on September 12,
1912, reports a conversation with Poincare assuring him of the
French loyalty to Russia, as follow s:
If a conflict with Austria should involve Germany’ s armed inter
vention, France will at once recognize it as a casus foederis and will
not lose a minute in fulfilling her pledges to Russia. (Pravda, 1919 ;
Bausman, 34.)
On December 23, 1920, Lloyd-George expresses the opinion—
That no one at the head of affairs quite meant war. It was some
thing into which they glided, or rather staggered and stumbled.
. This view is very charitable but comes a little late.
It is worth while to remember that Germany had over 4,500
miles of frontier to protect and no natural boundaries to pro
tect her on the east or the west or the south and that their
authorities naturally were apprehensive.
Frederick Bausman, former member of the Supreme Court of
the State of Washington, in Let France Explain, thoroughly
documented (London, George Allen & Unwin), believes that the
Government of France under Poincare was also to blame for
the world catastrophe, and he lays down the following propo
sitions :
First. That the alliance of France and Russia was unneces
sary to the safety of France and was hostile to the peace of
Europe by its Inviting into western Europe an overwhelming
mass led by Irresponsible men who aimed at extending there
an irresponsible government and a shameful despotism.
76876— 11
Second. That France deliberately and continually armed Rus
sia and encouraged her aggressiveness against Germany; that
French policy was continuously directed to creating a favorable
opportunity for war upon Germany to regain her lost Provinces,
disintegrate Germany as she had kept her disintegrated in
previous centuries, and resume her old place at the head of
European affairs.
Third. That the German armaments were, beyond all ques
tion, made necessary by the enormous and wholly unnecessary
increases in Russian armaments.
Fourth. That the Serbians were among the most ruthless
people in Europe; that Russia had no regard for Serbia other
than to extend her own empire into the Balkans; and that
Russia desired to break up, through Serbia, the Austro-Hun
garian Empire, a result that would have left Germany helpless
against Russia later.
Fifth. That the war sprang out of Russian ambition in the
Balkans and in nothing vital to the French whatsoever, and
that France could have stopped Russia at the outset by telling
her that she would not support her Balkan ambitions, because
Russia would not have gone into the war unless supported by
France, which country immediately advised her that she would
support her.
Sixth. That Germany did everything possible to avert the
war after discovering that Russia actually would go to war
and France support Russian ambitions in the Balkans, the
chancellor imperatively and repeatedly requesting Austria to
acquiesce, and the Kaiser personally imploring the Tsar to
stop, and that England, though embarrassed by previous rela
tions with the French and Russians, also exerted herself to
prevent war, but that the French Government did nothing
whatever to restrain Russia.
Seventh. That the Russians, finding themselves certain of
French support and possibly of English support, too, pushed,
at first by stealth and then openly, a general mobilization; that
they brought 2,000,000 o f well-equipped troops toward the Ger
man frontier and refused, after reasonable notice from Ger
many, to stop the mobilization; that France and Russia knew
that they could ultimately drive England into the war, because
England could not risk the conquest of France by Germany
under any circumstances, and that Italy would not aid Ger
many at all.
Eighth. That Russia wanted a war, that France knew that
Russia wanted a war, and that the Government of Poincarg
did all that was possible to lash up the people of France against
Germany before the war because his Government believed that
the combined forces of France and Russia, especially if aided
by England, were invincible.
Ninth. That the French and Russians, neither of them sur
prised but on the contrary long prepared, went into the war
at the height of their overwhelming strength, the French
Army being alone equal to that of Germany and the fully
equipped part of the Russian much larger.
Tenth. That if the war had ended successfully for Russia,
the best part of central Europe would have been absorbed by
her; that France during the war actually made a secret treaty
to that effect; that the Germans were compelled to resist with
enormous loss the spread of the Slavs into western Europe
and have contributed to its protection; and that the English,
compelled by sheer military necessity to save France from de
feat. have suffered incalculably in life, trade, and wealth.
And says:
A single telegram from the French Government to the Russian would
have prevented this war, a simple telegram warning Russia that France
would not support her in a conflict concerning the Balkans when Russia
herself was not attacked by the Central Powers, neither of which had
even mobilized against her. Germany had not mobilized at all. One
such message, I repeat, would have saved civilization its catastrophe,
for the Russian Government at the outset had stated that it would not
venture into this war unless “ secure of the support of France.” (Let
France explain, p. 36.) (British White Paper 17.)
In order to comprehend what took place in Europe, one should
remember that the Governments of Europe are in the hands of
a comparatively fewr men.
The record shows, of course, that the Czarist Russian Govern
ment was a military dynasty, controlled by the Czar, Grand
Dukes, and their military satellites. The French Government,
the record shows, entered into a secret written treaty with this
military monarchy whose views of government were diametri
cally opposed to the supposed principles of the Republic of
France.
The British Foreign Office entered into a secret agreement
with France and Russia without the knowledge of Parliament,
aiioaaa T N issaH N O
VO
DO
81
CONGRESSIONAL RECORD.
and thus stimulated and made aggressive the militarism of the
French leaders, and all the more made aggressive the leaders
of Russia whose objects were entirely at variance with those
of the British people or of the French people. The French
leaders had some reason to fear the possible aggression of the
German military dynasty and by making an alliance with
Russia and England were able to make the German military
authorities afraid to attack France, but the policy fatally en
couraged Russia to attack Germany. Russia had a far more
important and different purpose to serve. The Russian Gov
ernment had long had a determined policy to control the Dar
danelles, to have free access to the Mediterranean from the
Black Sea. It was impossible for Russia to get this advantage
except as the result of a general European war, and the way
to provoke a general European war was precisely the means
employed by Russia with its intrigues in Serbia, where the
Slavs of Serbia were stimulated and financed to carry on secret
intrigues against the Austrian Government through the Slav
population of Austria. It was only necessary to compel Austria
to partially mobilize, whereupon the Franco-Russian agree
ment to attack Germany came into effect automatically, and
France and Germany must instantly mobilize and attack Ger
many at the same time on the east and on the west with all
their forces.
These Serbian intrigues compelled Austria to mobilize in
1912. (Russia not quite ready.)
Again compelled Austria to mobilize in 1913. (Russia not
quite ready.)
In 1914, when they led to the murder of the Crown Prince of
Austria and his consort, the court at Vienna in extreme anger
delivered a 48-hour demand for satisfaction and mobilized
against Serbia.
A pretext for the Russian mobilization had been created by
Russia and instantly Sazonoff said, “ This time we shall march.”
This was the precise situation which the Russian clique, led
by Sazonof and Sukhomlinoff, seems to have desired to accom
plish and the war was on.
FRENCH
E V ID E N C E .
Colonel Boucher, of the French general staff, issued in 1910
to 1913 three books—one France Victorious in To-morrow’s
Wars, one the Offensive Against Germany, and another Ger
many in Peril.
In the latter he says:
Germany is menaced on all frontiers, and situated that she can not
feel secure of her future against all her adversaries, without finding
some way to eliminate us * * * menaced on the north by Eng
land, on the west by France, on the east by Russia, and to-day equally
on the south * • * in danger of panslavism. She must raise her
forces to the supreme degree.
General Buat, of the French general staff, showed that the
mobile forces of France were in active army of 910,000 men
with reserves of 1,325,000.
One can say then that without taking any account of the Belgian
army or of the four British divisions, France alone was at the begin
ning, at least, equal, if not superior, to her formidable adversary in
the number of the principal units. (L ’Armee Allemande, pp. 1-9.)
The French ambassador at St. Petersburg, Paleologue, in the
early part of 1914 was warned by Vlviani that war would soon
break out (Revue des deux Mondes, January, 1921) ; but
Viviani, in his opening speech to the French Parliament after
the German declaration of war, complained of its being “ unex
pected.”
Lord French tells us that the preparations with France were
on a complete and mutual understanding ( “ 1914,” p. 8) and
that England was to put 160,000 men at a point near Belgium
on 12 days’ notice.
Benckendorff, the Russian ambassador to London, said:
When I recall Cambon’s conversations with me, the words exchanged
and add the attitude of Poincare, the thought comes to me as a con
viction that of all the powers France is the only one which not to say
that it wishes war would yet look upon it without great regret. (Ger
man White Book, pt. 2, p. 75.)
Many notable French men have issued protests and accusa
tions against Poincare, such as De Martial, Henri Barbusse,
Anatole France, Ernest Renauld, etc.
Renauld, a distinguished historical w r ite r , e n g a g e d P o in c a re
in an argument and said:
The Entente wanted the war as much as William II, and you, Mr.
President, and your group of friends wanted it more than all. (Bausmttn, p. 29.)
76878—
11
19
Sukhomlinoff, Russian Foreign Minister, August, 1912, after
one of Poincare’s visits sent a circular to his Russian diplomats
saying:
When the critical moment in international relations arrives, it will
be most desirable to have at the head of the allied governments, if not
Poincare himself, at least a personality who has the same energetic
character and who has as little fear of responsibility as the present
French Prime Minister. (Entente Diplomacy, pp. 652-655.)
In Poincare-a-t-il-Voulu-la-Gerre the warlike course of the
French Government is attributed to Poincare from his coming
into office in 1912. The work of Peve les Responsables de la
Guerre places the responsibility on Poincare. (Bausman.)
Poincare assured the extra session of the French Parliament
August 4, 1914, that France—
was prepared and our enemy w ill meet on their path our valiant troops.
T
(French Yellow Book, p. 158.)
The attitude of the French war party may be appreciated
from the quotation of Mr. Buxton, in the foreign office de
bate of July, 1912, taken from the “ Nouvelle Revue,” one of
the most prominent o f Paris Reviews:
We intend to have war. After 40 years of a heavily armed peace
we can at least utter this opinion without the serious readers of a
French revue shaking in their shoes. * * * France is ready to
strike, and to conquer, as she was not ready 40 years ago, and she
will not be in 4 or 5 years to come, owing to the annual divergent
numbers of the birth rate in each country. * * * We, the at
tacking party, will have arranged with England that their fleet
• * * will have followed * * * the remains of the whole Ger
man Navy into the German waters. (How Diplomats Make War,
p. 206.)
M. Poincare has not escaped the criticism of representatives
of the people of France in the French Chamber of Deputies.
On July 5, 1922, while M. Poincare was presiding over the
Chamber of Deputies as its President, M. Vaillant-Couturier
(p. 2337-2338, Journal Official) declared “ upon his conscience
as an old soldier ” that he was convinced of the responsibility
of Raymond Poincard for the World War because of his policy
in the Balkans and his unwarrantable support of Russian am
bitions and Russian policies. He declared that the war was
desired by a group of important rank in the Court of Russia
and that Poincard did not do what he could have done to deter
the war, that Poincard’s culpability would be exposed by the
records and he accused him on the floor of the Chamber of
Deputies to have been responsible for building up in France
by Russian propaganda public opinion among the French people
favorable to the Russian intervention in Balkan affairs.
That he had contributed to the war by allowing chances for
peace to pass.
M. Vaillant-Coutourier in the course of a long speech said:
We accuse him of having been the man about whom was crystal
lized the desire for revenge on the part of the most turbulent of
French nationalists. We accuse him of having been that which
JaurtSs hoped he would not be, the president of reaction or of war.
We accuse him of having let pass certain omissions of texts in the
publication of the diplomatic archives * * *.
We accuse him of having thrown France into a war which the
Russian mobilization provoked. We accuse him of having compro
mised between 1912 and 1914 the destinies o f France, whatever
might have been the wishes of Germany at that time— * * *
and stated that the “ stillborn treaty of the peace of Ver
sailles,” which “ they all condemn more or less,” stood between
a peaceable future and the French people, and said:
For us M. PoincarS represents all that nationalism has been able
to produce of a funereal character before, during, and after the war.
To-day his policy leads us to isolation, to failure, and to new wars.
On January 15, 1914, Izvolski, In a “ very confidential ”
letter (Livre Noir, 230) says:
If the incident continues to develop, the question might put itself
within the scope of the alliance. In a conversation with me, M.
Poincar6 expressed himself exactly the same, by repeating to me
several times, “ It is well understood that we shall sustain you
I respectfully call the attention of the Senate to the secret
telegrams from Izvolski, in Livre Noir, pages 14, 19, 20, in
which Izvolski, on January 29, 1913, over a year before the
World War, says:
I have just had a long conversation with Poincair6 , who has declared
to me in his capacity as President of the Republic he will have abun
dant possibility of directly influencing the foreign policy of France
•
*
*.
A ccordin g
to
him
It is o f
th e
h ig h e s t
im portance for the
( UKKKI U
IS
20
rI \ \<)IS,S,'/«,i;)VO.)
CONGRESSIONAL RECORD.
French Government to be able In advance to take part In directing pub
lic opinion as to a war which could arise in the matter of the
Balkans. * * *
And on January 30, 1913, page 19:
The energy, the decision, and the entire character of M . PoincairS
appear as the guaranty of that which in his capacity as President of
the Republic he will not content himself— as, for example, M. Fallieres—with a rOle purely passive and, if it might be so expressed,
decorative, but that he would influence by every means and at all
times the French policy in the domain of foreign affairs. * * *
That is why during the next seven years we can be completely
assured against the appearance at the head of the French Govern
ment and diplomacy of such persons as Callaiux, Cruppi, Nonis, etc.
* * * M. PoincairS continues to come every day to the ministry,
and M. Jonnert makes no reply, expresses no opinion without he has
knowledge of it and consents to it. * * *
And page 20:
The French Government is firmly decided to fulfill toward us its
obligation as an ally, and It admits with full knowledge and with
the cold blood necessary that the final result of the actual com
plications can be for it the necessity of the participation of France
in a general war. The moment when France should draw the sword
is exactly determined by the Franco-Russian military convention and
under the understanding the French ministry entertain not the
slightest doubt nor the slightest hesitation. » * *
Also the French Government does not wish to deprive Russia of its
liberty of action, nor to put in doubt the moral obligations which
rest upon it in that which concerns the Balkan States.
Conseqently Russia can count not only on the support in arms of France
in the case foreseen by the Franco-Russian convention but upon the
most energetic and effective diplomatic assistance (of France) in all
the enterprises of the Russian Government in favor of said States
(the Balkans).
a ll
Polncar# undertook his own defense by writing a book
“ Les Origines de la Guerre” (Cassle) in 1921, in English
1922, an analysis of which appears in “ Let France Explain,”
Chapter XIV. He wholly omits the Russian mobilization and
does not contradict the Belgian minister’s charge against him as
bringing on the war. He omits the vital record of the Falsifi
cation of the Russian Orange Book, but admits—
(a) That the Kaiser made repeated efforts to come to a good under
standing with France (p. 25).
(b) That Delcasse made a revision, which he misquotes, of the
Franco-Russian treaty (p. 56).
(c) That France had always in mind the recovery o f the lost
Provinces (p. 25).
.(d) That the Franco-Russian treaty was never disclosed before the
war and that Viviani, with a copy in his pocket, refrained from read
ing it to the Parliament.
(e) That the pacific Georges Louis was recalled from St. Petersburg
because the Russians wanted a different sort, etc. (Let France Explain,
p. 229.)
Poincare’s defense will be found in the Living Age, Saturday,
August 26, 1922, page 503, In which he says that Saaonoff was
a “ pacifist,” that—
the thought of crushing Serbia dominated the whole policy of Austria
and Germany.
That when he and Viviani (July 29, 1914) —
reached Paris we were received by a startled and troubled nation that,
far from wishing war, was overwhelmed with solicitude for the safety
of France, although firmly resolved upon any sacrifices to defend the
fatherland.
It will be observed that Poincarg returned to Paris on July
29. and that it was on the night of the next day— July 30— that
the French minister of war told the military attach# of the
Russian Embassy with “ enthusiastic sincerity ” that the
Government is firmly decided upon war and requested the Rus
sian Embassy to confirm the hope of the French general staff
that all the Russian efforts should be directed against Germany.
(Telegram 216.)
Poinear# states that with the consent of the ministry he
wrote a letter to King George on July 81, 1914, informing the
King that France would do all in her power to maintain peace.
This letter to King George is not consistent with telegram 216.
nor with the secret military treaty and the secret conferences
of the Russian and French general staffs of 1911, of 1912,
of 1913, to mobilize and attack Germany in the event of an
Austrian mobilization, but was extremely serviceable in con
vincing British public opinion of the peaceful attitude of the
French Government and of the guilt of the German Govern
ment in willing the war.
7 6 8 7 6 — 11
Poincar# Insisted on having Grey announce the Entente avow
edly as a means of preventing Germany from declaring war.
Grey was unwilling, probably because it would have stimulated
Russia to war if every element of doubt of British support were
removed.
Grey did not wish war, but had no option but to support
France if it came.
On the night o f July 29, the British ambassador at Berlin
wired Sir Edward Grey that the German Chancellor had told
him (the British ambassador in Berlin) that—
As far as he was able to judge the main principle which governed
British policy was that Great Britain would never stand by and allow
France to be crushed in any conflict there might be. (How Diplomats
Make War, 263.)
So that it is clear that the German Government expected
Great Britain to support France in the event of war. The
fact that Great Britain would support France fully justified
the Russian war party and the French war party in their deter
mination on war.
Moreover, Sir Edward Grey told the French ambassador at
London, Cambon (British White Paper, 87), that he meant
to tell the German ambassador that day, Wednesday, July 29,
that he must not be misled from the friendly tone of their
conversation that Britain would stand aside, so that both
Germany and France knew that Britain would not stand aside.
On Friday, July 31, the British ambassador to Berlin, Sir
Edward Goshem, wired Sir Edward Grey that the German
chancellor said he had done everything possible to attain his
object at Vienna, b u t he could not leave his country defense
less—
while time was being utilized by other powers; and if, as he
learns Is the case, military measures are now being taken by Russia
against Germany also, it will be impossible for him to remain quiet.
(Ibid. 281.)
Sir Edward Grey telegraphed to the British ambassador at
St. Petersburg that he did not see how Russia could be urged
to suspend military preparations unless some limit were put
by Austria to the advance of her troops into Serbia. (Ibid.
282.)
In other words, he did not exercise an effective moderating
influence on St. Petersburg; he justified their military prep
arations.
The whole story is set forth quite fully by Neilson, a member
of the British Parliament, in chapter 12 of How Diplomats
Make War. The chapter is entitled “ A Game of Chess.”
Without doubt patriotism in the form of intense nationalism
moved most of the European leaders, who thought in terms of
military strategy alone.
It is futile to reproach individuals in the foreign office of
Petersburg, of Paris, of London, of Vienna, or Berlin. These
men were produced by their environment in an atmosphere of
secret diplomacy, believing in the power of might first, last,
and all the time, but nevertheless also believing it necessary
to subsidise the press and direct public opinion so as to have
the support as far as possible of their own nationals.
A profound distrust was everywhere evident between the
leaders of the different nations.
These foreign offices were controlled by a consuming desire
for further political power over other people and over other
territory. Their whole diplomacy in foreign relations largely
consisted of trading with each other, giving and taking “ com
pensations.” The prime moving force was commercialized im
perialism.
The Entente Allies should have conquered Germany and
Austria within a few months considering the enormous prepon
derance of power in favor of the Entente Allies. It should have
been a profitable war in the matter of colonial possessions, an
nexations, and indemnities; but its prolongation for four years
was very unexpected and costly. The collapse of the Russian
armies, probably due largely to the hate of the Russian people
of the Romanoff Government, proved a blessing in disguise to
the wiiole world, including the French, British, and Russian
people.
The overthrow of the German military government will prob
ably prove a blessing to the world, especially to the German
people, notwithstanding the severe suffering which has tem
porarily taken place since the armistice.
In due time no doubt the British, French, and Belgian people
will correct the defects in the Government of their own for
eign offices, and the extent to which commercialized government
has gone in the past will probably be abated In the future.
I f the principles of the League of Nations shall become the
rule governing the relation of nations to each other, the evils
a a o o a a T V xV O issaaoN oo
05
CONGRESSIONAL RECORD.
21
of the past will be entirely abated and international understand America was not informed with regard to the secret intrigues
ing, good will, and cooperation will become the rule of inter of Europe, nor of its commercialized imperialistic aims.
America declared a state of war with Germany because the
national intercourse.
In the light of the disclosures which are made ®f the secret military rulers of Germany committed one act of war after
diplomacy o f Europe, it is clear that a profound national another on America in violation of accepted international law,
humiliation was put upon the German people by article 231 of and America did not lay down the sword until that Government
the treaty of Versailles in violation of the evidence now known ■was annihilated and the Holienzollerns driven from power.
It cost America forty-two billions of dollars and hundreds of
to the world. Article 231 is as follow s:
thousands of men and a huge future tax of pensions. Happily
A r t . 231. The allied and associated Governments affirm and Germany
accepts the responsibility of Germany and her allies for causing all the for the freedom of mankind the war resulted in the destruction
loss and damage to which the allied and associated Governments and of the three great military dynasties—of the Hohenzollerns of
their nationals have been subjected as a consequence of the war im Germany, the Hapsburgs of Austria, and the Romanoffs of
Russia—and has promoted the cause of democracy and the free
posed upon them by the aggression of Germany and her allies.
dom of mankind.
This article makes the German Republic, representing a free
But the record which I have disclosed, Mr. President, that the
people, accept the responsibility of having imposed upon the British foreign office did not dare to disclose to the British peo
Allies the World War by the aggression of the Imperial Ger ple in their Parliament the truth of the secret intrigue with the
man Government of 1914, which was the master of the subject French and Russian Governments, thereby giving the highest
German people.
testimony to America that British public opinion, like American
The German people feel a profound bitterness over this public opinion, will not consciously support international intrigue.
article and its consequences, and it will be well for the world It is for American statesmen to consider now how far these
to consider whether a reconciliation between the peoples of secret forces are in control of the British and French Govern
Germany, France, and Great Britain is possible so long as the ments, and the extent to which they are in control must be
German people are unjustly charged with this great wrong.
read in the light o f the actions of these Governments, not
In the Memoirs of Izvolski is narrated a personal attempt merely by their words or official public communications.
of William II, in 1905, to establish permanent peace between
The purposes of America in fighting this war were expressed
Russia, Germany, and France in the so-called Treaty of Bjorkoe, with great force in the address of the President of the United
as follow's:
States, January 8, 1918, and subsequent explanatory addresses
Their Imperial Majesties, the Emperor of all the Russias, of the one in which he voiced the declared purposes of the Entente Allies
part, and the Emperor of Germany, of the other part, with the object and conditions on which they were willing to make peace, and
of assuring the peace of Europe, have agreed upon the following which they, after nine days’ discussion at the Trianon, Ver
points of the treaty hereinafter related, with reference to a defensive sailles, formally accepted November 4, 1918. They then and
alliance:
there pledged themselves to these conditions as the basis upon
“ A rticle I. If any European State shall attack either of the two which the German Republic directed its military commanders
Empires, the allied party engages to aid his cocontractor with all his to sign the terms of an armistice and practically surrendered.
forces on land and on sea.
The German Republic accepted the terms and directed their
“ A r t . II. The high contracting parties agree not to conclude a sep
military commanders to accept the terms of the armistice.
arate peace with any enemy whatsoever.
The pledges made to the German Republic through the Presi
"A bt. JII. The present treaty shall be in force trom the moment of dent of the United States by the Allies was in effect—
the conclusion of peace between Russia and Japan and may only be
(a) The end of secret diplomacy.
canceled by a year’s previous notice.
(b) The removal of economic barriers and equality of trade.
“ A rt. IV. When this treaty goes into effect, Russia will take the
(c) Impartial adjustment of colonial claims.
necessary steps to make its terms known to France and invite her to
(d) Association of nations in a League of Nations, having in
subscribe to it as an ally.”
mind the protection of every nation, of its territorial integrity,
N ic h o l a s .
and political independence.
W il l ia m .
(e) A just and stable peace; that Germany should—
The hostility of France to this treaty caused Its cancella accept a place of equality among the peoples of the earth • • •
tion.
instead of a place of mastery.
The records to which I have above referred show in many
(f ) The right to live on equal terms of liberty and safety of
ways the efforts of the German Government to effect a rap
prochement with France and with Great Britain, all of which all nations.
(g) The destruction of any arbitrary power anywhere that
were unavailing.
One of the most learned men in Europe, E. D. Morel, a mem can separately, secretly, and of Its own single choice disturb the
ber of the British Parliament, has written several works ex peace of the world.
(h) The consent of ail nations to be governed in their con
plaining this unfortunate condition of European diplomacy,
such as Truth and the War, Diplomacy Revealed.
Ten duct toward each other by the same principles of honor and of
Tears of Secret Diplomacy, in which these processes are ex respect for the common law of civilized society that governs the
plained in great detail and fully confirm what the records to individual citizens of all modern States in their relations with
which I have above referred exhibit; and the underlying policy one another.
(i) The impartial justice meted out must involve no dis
of the diplomacy of the foreign office of the European nations
is set forth by Leonard W olf in a little work called “ Economic crimination between those to whom we wish to be just and
Imperialism,” showing the substantial fact that governments those to whom we do not wish to be ju st
(j) No special or separate interest of any single nation, or
had been employed for money making purposes in the exploita
tion of the ignorant and unenlightened races; that under this any group of nations, can be made the basis of any part of the
policy all o f Africa had been divided up and other parts of the settlement which is not consistent with the common interest
world seized for similar purposes, to make rich the industrial of all.
(k ) No leagues or alliances or special covenants cfr under
ists of the nation which annexes and controls such territories.
The covenant of the League of Nations is bringing before the standings within the general or common family of the League
world a new conception of international relationship in which of Nations.
(l) No special, selfish economic combinations within the
international justice, understanding, and good will is being
league.
made increasingly possible.
(m ) All international agreements and treaties of every kind
America is now concerned in judging from the past the prob
abilities of stability in Europe. Unless Europe shall have stable must be made known in their entirety to the rest of the world.
(n) No punitive damages, no annexations, no indemnities,
government, America can not afford to extend any large credits
to Europe which it might be desirable to do to help the people but an honorable and a just peace.
The German Republic accepted and instructed its military
of France and the people of Germany to again get back into
officials. Then the Entente military command imposed the mili
full production.
We all desire truly to see the French protected. I favored tary terms on the German generals, as shown in Exhibit 14.
The manner in which the British, French, and Belgian Gov
the treaty guaranteeing France protection and fully supported
France during the war, hut the Ruhr Invasion is Indefensible ernments carried out these pledges is set forth in the treaty of
Versailles and analyzed with great care by Warren Hills in
from any standpoint.
“ Lex Talionis ” and by J. Maynard Keynes in “ Economic
A M E R IC A J U S T I F IE D IN E N T E R IN G T H E W A R .
Consequences of the Peace.”
America was justified in entering the war regardless of who
They show the Entente statesmen entirely violated the
was responsible for willing the war and putting it in motion. pledges made, and the United States has been put by them in
76876— 11
( l m x x ja
cs
•
d
t v n o is s
CONGRESSIONAL RECORD.
o
the false position of having betrayed the German people with
false promises to induce their surrender. The United States
should not be content to rest under this unjust imputation
without proper protest. The English people are becoming
impatient with these conditions.
The terrible anxiety of France, Great Britain, and Italy, which
led them to fully accept American terms, is shown by Exhibit 13,
in which Foch, Clemenceau, Lloyd George, and Orlando im
plored American aid June 3, 1918, as necessary to avoid entente
defeat.
Allies established a reparation commission, controlled by
France, Belgium. Italy, and Great Britain, who fixed tlie
reparations regardless of the promises made the German people
by the allied governments on November 4, 1918.
The Entente Allies in writing the treaty of Versailles took
all the German colonies, took away from German territory a
large part of east and west Prussia, of Poland and Silesia,
and the entire left bank of the Rhine was occupied from Swit
zerland to Holland, 50 kilometers on the right bank were held
subject to military control, the coal fields of the Saar Valley
EXHIBIT XIII.
were ta lm by France.
Moresnet. Eupen, and Malmedy were given to Belgium. Schles
(Action taken at conference June 1 and 2, 1918.)
wig added to Denmark, the German Republic not permitted to
The Prime Ministers of France, Italy, and Great Britain, now meet
enter the League, and all overtures from the German Govern
ing at Versailles, desire to send the following message to the President ment treated with indifference or contempt.
of the United States :
French officials took an active part in the political disin
“ We desire to express our warmest thanks to President Wilson for
tegration of the German Republic by promoting a movement for
the remarkable promptness with which American aid in excess of what
an independent Rhine State, an independent Bavaria, an inde
at one time seemed practicable has been rendered to the Allies during pendent Saxony, seized the industrial heart of Germany in the
the past month to meet a great emergency. The crisis, however, still
Ruhr, and made such strenuous demands upon the German Gov
continues. General Foch has presented to us a statement of the utmost
ernment for instant reparations that that Government is now
gravity, which points out that the numerical superiority of the enemy
absolutely bankrupt, unemployment breaking down the indus
in France, where 162 allied divisions now oppose 200 German divi
trial life of the German people and threatening them witli
sions, is very heavy, and that, as there is no possibility of the British
famine. German statisticians estimate that less than 5 per
and French increasing the number of their divisions (on the contrary
cent of the German coal has been left the German Govern
they are put to extreme straits to keep them up), there is a great
ment’s control; that Germany has lost 14 per cent of its area,
danger of the war being lost unless the numerical infirmity of the
10 per cent of its population, 70 per cent of its zinc and iron
Allies can be remedied as rapidly as possible by the advent of American
ore: 20 per cent of the potato land, 18 per cent of the wheat
troops. He therefore urges with the utmost insistence that the maxi
and rye land, and the cost of the occupation from 1918 to 1922
mum possible number of infantry and machine gunners, in which re
is put at four and one-half billion dollars or more than sixteen
spect the shortage of men on the side of the Allies is most marked,
times as much as the cost o f German occupation of France in
should continue to be shipped from America in the months of June and
1870-1873.
July to avert the immediate danger of an allied defeat in the present
The reparations bill which is estimated by Andre Tardieu
campaign owing to the allied reserves being exhausted before those of
the enemy. In addition to this, and looking to the future, he repre in December, 1918, after the armistice, at nine billions, is now
fixed at thirty-three billions by the employees of the proposed
sents that it is impossible to foresee ultimate victory in the war unless
beneficiaries, and credits are refused which the Germans esti
America is able to provide such an army as will enable the Allies to
The details of
establish ultimate superiority. lie places the total American force re mate at approximately twenty-fiye billions.
quired for this at no less than 10 0 divisions and urges the continuous these claims and counterclaims I submit as Exhibits 15 and 16.
raising of fresh American levies, which, in his opinion, should not be
less than 300,000 a month, with a view to establishing a total American
force of 10 0 divisions at as early a date as this can possibly be done.
“ We are satisfied that General Foch, who is conducting the present
campaign with consummate ability and on whose military judgment we
continue to place the most absolute reliance, is not overestimating the
needs of the case, and we feel confident that the Government of the
United States will do everything that can be done, both to meet the
needs of the immediate situation and to proceed with the continuous
raising of fresh levies calculated to provide as soon as possible the
numerical superiority which the Commander in Chief of the Allied
Armies regards as essential to ultimate victory.” (From “ The Great
Events of the War,” published by the National Alumni, 1920, Vol. VI,
p. 187.)
THE
M ORAL
R E S P O N S IB IL IT Y
FOR
W IL L IN G
THE
W ORLD
W AR.
The moral responsibility for willing the World War has been
definitely fixed upon Germany by article 231, as follow s:
A r t . 231. The allied and associated Governments affirm and Germany
accepts the responsibility of Germany and her allies for causing all
the loss and damage to which the allies and associated Governments
and their nationals have been subjected as a consequence of the
war imposed upon them by the aggression of Germany and her allies.
This necessarily means the aggression of the German Gov
ernment of August 1, 1914, under William II, a military autoc
racy, controlling without their consent the German people with
a rod of iron.
The German people of August 1, 1914, can not be held re
sponsible for the decision of William II. They were a subject
And the Allies solemnly declared to the Germans, November people, 80 per cent of them were women and children without
4, 1918:
political capacity, about 10 per cent were men engaged in pro
Their willingness to make peace ■with the Government of Germany duction and distribution, about 10 per cent were called to arms
cm the terms of peace laid down in the President’ s address to Congress by an order of mobilization which could not be disobeyed
Something over 10 per
«n January, 1918, and the principles of settlement enunciated in his under penalty of immediate death.
cent of these Germans took up arms under penalty of death;
subsequent addresses.
1,773,780 were killed, 4,216,056 were wounded, 1,152,800 were
Under these terms the Allies—
prisoners or missing, a total of 7,142,558. Hardly a man
Understand that compensation will be made by Germany for all dam escaped.
age done to the civilian population of the Allies and their property by
But the penalties of the moral responsibility of willing the
the aggression of Germany by land, by sea, and from the air.
war is being visited on the German people of to-day, 20 per
On November 11, 1918, the President of the United States, in cent of whom were unborn babes August 1, 1914. 50 per cent
speaking of the military autocracies o f Europe, declared that— were then infants, 16 per cent were then women, leaving about
The great nations which associated themselves have now definitely 14 per cent of men now living who were then either combatants
united in a common purpose to set up such a peace as will satisfy the or noncombatants.
If William II was exclusively and entirely responsible for
longing of the whole world for disinterested justice. * * * Their
representatives in the supreme war council at Versailles have by unani this war, the Entente Allies have allowed him to go in peace
mous resolution assured the peoples of the Central Empires that every with his property, and they are imposing the penalties of this
thing that is possible in the circumstances will be done to supply them wrong upon people who can not be charged with the moral
with food and relieve the distress that is in so many places threatening responsibility of the war and in violation of the conditions of
their very lives. * * • Hunger does not breed reform, but it breeds the armistice.
But, it will be said, who then shall be responsible for
madness and all the ugly distempers that make an orderly life impos
reparations?
sible.
The reparations agreed to— that is, compensation for dam
The Government of Great Britain, immediately after the dis ages done the civilian population of the Entente Allies by the
armament of the Germans, the taking of their warships, and of German troops on land and sea and air— was accepted by the
their mercantile marine, established by an Order in Council a German Republic, representing the German people, and this
blockade not only not supplying the food the German people reparation they are legally and morally bound by, but it should
required, but cutting off the food they might have secured for be established in honor and justice by disinterested judges and
themselves, even cutting off fish supply from the Baltic Sea experts, not by the beneficiaries or representatives moved by
and using the pressure »f famine to coerce the German Republic the old principles of European diplomacy that led directly to
to accept the terms o f the treaty of Versailles. The Entente this war.
7 6 8 7 6 — 11
c m o o a ? i T Y N o is s a a o M o o
■
M
66
B
CONGRESSIONAL RECORD.
If the old principles of commercialized imperialism moving
in profound secrecy is to fix the policy of international relation
ship, we have no just reason to iiope for the restoration of
peace and prosperity in Europe.
The conditions laid down for the armistice by the President
of the United States, accepted by the Allies, and then accepted
by the German Kepublic, can not be flagrantly dishonored with
impunity. Such evil seeds sown will bring a harvest of hate
and future wars. It is not yet entirely too late to correct this
great wrong to the German people.
The fundamental condition of peace is good faith, absolute
Justice arrived at by just processes.
Then international understanding and good will becomes
possible. Then we can hope for the actual reduction of arma
ments to the limit of domestic requirements for police and
good order.
Then we can hope to see the budgets balanced.
Then we can hope to see European currencies stabilized, put
on a gold basis, and people given a currency medium with
which they can make contracts safely.
Then European bonds could be sold throughout the world to
the fullest extent of their legitimate needs. Then the safety
o f France will be assured, as all the world desires.
Then America will be justified in cooperating with the new
world conducted along the lines of international justice, inter
national good will, and sincere international commercial and
financial cooperation.
Mr. President, the great masses of the people in France de
serve the warmest admiration. They are a great people, very
brave, very loyal, very intelligent, industrious, and thrifty;
their language, their architecture, their sculpture, their paint
ings, their productions are unsurpassed in beauty. I am con
vinced that these people in their hearts desire to live at peace
with the world, to live their own lives, raise their children, and
enjoy social intercourse with each other, and that they would
commend international policies which would lead to this result.
And when this has been said, the same thing can be said
with equal truth and with equal force o f the German people,
o f the Italian people, and o f the British people.
Mr. President, I have discharged an irksome, painful duty.
Senators will find the complete record referred to in the biblio
graphy which I present and will find quotations so abundantly
made that there remains no reason why any Senator should
not be perfectly informed -with regard to what has taken place
and what caused the World War. It was caused at last by
fear of each other, by ambition, by pride of a few men in a
few chanceries who were doubtless doing what they believed
to be for the welfare and “ glory ” of their own country, but
whose error of judgment has crucified the world. We do not
wish a repetition of it.
During the World War I favored the French in every pos
sible way with money, credit, supplies, ships, and men. I was
one of those who favored a treaty to guarantee the French
people against future German aggression, and I favor now
whatever is necessary to protect the French people against the
future aggression of Germany, but I do not favor the breach
of agreement of the armistice conditions on which the peace
of France and the lives of Frenchmen were saved on the battle
field by the cessation of battle through the armistice contract
of November 4, 1918.
The preservation of the white civilization of Europe demands
that the statesmen of the world realize the importance of pur
suing processes which will really and in truth establish inter
national understanding, good will, and cooperation.
Open diplomacy and the orderly rule of the people by the
peaceful processes of democratic or republican government is
the true remedy.
It Is probably the only remedy, and the people alone can make
it effective in each of the several Nations. America can set a
good example. The success financially and commercially of this
doctrine in America should encourage the people of other coun
tries as they advance in the practice of democratic government'.
Let us still pray with our immortal Lincoln that government
of the people, by the people, and for the people shall not perish
from the earth.
APPENDICES.
E X H T B IT S
TO
SPEECH
OF
MB.
OW EN,
U N IT E D
STATES
SENATOR
OKLAH OM A.
.
[Exhibits not quoted in speech are added here.]
E x h ibit 1.— Franco-Russian treaty, 1892.
E x h ib it 2 .— Franco-Russian military conference, 1911 .
E x h ib it 8.— Fran co-R u ssian m ilitary conferences, 1 9 1 2 .
E x h ib it 4.'— F r an co-R u ssian m ilita ry conferences, 1 913 .
7 0 8 7 6 — 11
FROM
Exhibit 5.— Franco-Russian treaty, 1916—
17.
Exhibit 6 .— Chapter XII. Entente Diplomacy and the World-secret
Russian documents.
Exhibit 7.— Falsification— Russian Orange Rook of 1914.
Exhibit 8 .— Letter, Grey to Cambon, November 22, 1912.
Exhibit 9.— Letter, Cambon to Grey, November 23, 1912. Fra neoBritish entente memo.
Exhibit 10.— Russian military preparations (Bausman).
Exhibit 11.— Von Moltke summary (Bausman).
Exhibit 12.— German demand on Belgium for passage.
Exhibit 13.— Dispatch, General Foch, Lloyd-George, Clemenceau, Or
lando, June 3, 1918, praying for speedy American support.
Exhibit 14.— Armistice terms imposed by Foch November 14, 1918.
Exhibit 15.— What Germany has paid— comparative statements.
Exhibit 16.— How much has Germany paid— Keynes.
Exhibit 17.— Killed and wounded in World War.
Exhibit 18.— United States killed and wounded in World War.
Exhibit 19.— Costs of World War.
Exhibit 2 0 .— Books quoted.
Exhibit 21.— Abstract of armistice conditions of November 4. 1918.
EXHIBIT VI.
Entente diplomacy and the World War— De Siebert.
F urther
E ntente
P r e p a r a t io n s
for
t h e
E uropean
W ar.
(February—
July, 1014.)
(837. The Russian Ambassador at Berlin to Sazonoff. Letter, January
31-February 18, 1914.)
In my telegram No. 19 I called the attention of your excellency to
the communication of the Russian telegraph agency in Berlin, that
Secretary of State von Jagow had declared in the Budget Commission
that Anglo-German relations were steadily improving. In the same
telegram, the declaration of the German naval minister with reference
to the mutual relations between the English and the German navies.
was mentioned.
As you are aware, Tirpitz remarked that the relation of the English
to the German fleet, 16:10, as proposed by Churchill, was entirely ac
ceptable to Germany. As to the idea of an “ exempt year,’ ’ this pro
posal could not be accepted. Jagow declares that the cabinet of St.
James has for the present advanced no such propositions. I asked my
English colleague how the constantly recurring assurances of the
statesmen here to the effect that an improvement had occurred in
Anglo-German relations were to be explained, for this, involuntarily,
provoked the thought that constant negotiations were taking place be
tween London and Berlin which might finally lead to a rapprochement
between both countries.
Goschen’s reply was as usual, namely, that all assurances had abso
lutely no value and that the exchange of opinions between Berlin and
London was limited to mutual economic and railway interests (n
Africa. (Quite a remote locality and one quarter in which Russia had
no “ historic mission ” or “ diplomatic desires.” )
As to Churchill’s proposal to establish a relation of 16:10, my
English colleague affirmed my assumption that the Canadian dread
noughts are excluded from this proportion, something to which Ger
many could scarcely agree. As to the proposal to build no warships
for a whole year, the explanations of the secretary of state, as
Goschen told me, are not in accordance with facts, for he, Goschen,
has been instructed by London to sound Jagow, who had, however,
given him an evasive answer. The English ambassador is, however,
of the opinion, as he told me in strict confidence, that this idea was
unreliable and all the less acceptable to Germany since all the work
men of the German shipbuilding yards would in such a case be thrown
out of employment, whereas the English workmen could easily be taken
over by the private shipbuilding yards in order to build the numerous
small ships which the English fleet constantly requires. Apart from
this, the British ambassador added, it icould not suffice to suspend
shipbuilding in England and Germany— all other great powers would
also have to do the same.
My French colleague [Jules Cambon], u-hose opinion Goschen had
asked regarding the “ exempt year,” replied that he could in no case
approve of this idea, since all the savings which Germany would make
in consequence of the interruption of shipbuilding would be devoted te
the strengthening of the land army; and, in case of future conflicts,
this would be directed chiefly against France. [Rather an impossible
situation— un impasse. Thus the much advertised disarmament pro
posals came to naught, as reasonable people expected.]
Cambon is very much worried by these constant rumors o f an im
provement in Anglo-German relations, since he agrees that there is a
possibility o f rapprochement between these two countries in the future.
Although I do not fully share these fears, I can not free myself en
tirely from the thought that Germany and England, once they have
begun to regulate their economic interests in Africa, will in time pro
ceed to more important negotiations, which might finally lead to a
certain agreement also in political questions. From here I am able to
observe the efforts of the German Government to please the British;
but, of course, I lack the possibility of judging what impression these
m
-
24
CONGRESSIONAL RECORD.
efforts make upon leading circles in England. [They made very little (841. The Russian ambassador at London to Kazonoff. Telegram, Feb
ruary 5-18, 1914. No. 39.)
Impression.]
(838. The same to the same. Confidential report, February 27-March
Tonr telegram No. 252 received.
12, 1914.)
Cambon received the necessary instructions yesterday, and I in
• • • According to wholly confidential reports reaching me, the j formed Grey to-day of your proposal. I told him that, considering the
growing military strength of Russia is causing ever more serious ; leant of an adequate organ, such as last year’s ambassadorial confer
anxiety at Berlin. In the opinion of German Government circles, the ! ence, you thought it necessary to arrange for an exchange of views on
new heavy siege artillery in Russia will he finished hy 1016, and from ; the pending questions, in order to arrive in this way at a preliminary
that moment Russia will step into the lists as a most formidable foe j agreement between the three entente powers. In this way the delays
with whom Germany will have to cross arms.
caused by telegraphic correspondence would be avoided and the influence
No wonder that in view of such considerations the Germans are ■ and weight of the decisions of the three powers would be enhanced.
straining every nerve to he ready for war with us, and no wonder that j
I instanced the case of Albania, whither the Prince of Wied was to
they try to intimidate us, so as tv avert the suspicion that Germany j proceed, before various important questions had been solved. Grey re
is afraid, of Russia. Nevertheless it is my conviction that between ail j plied that in the case mentioned by me the Triple Alliance had the ad
the lines printed about Russo-German relations in the German news- j vantage of Icing able to act, while the Triple Entente could only defend
papers of late one may always read fear of Russia. [Refers to the ; itself against encroachments. However, Grey raised no objection to
cry of the Germans: Die russische Oefahr— the Russian peril.]
In your proposal, and told me that he was pleased to accept it. and sug
conclusion, let me express the hope that they are not in error about j gested that I should meet him to-morrow, Thursday. He has already
this at Rerlin, and that we are actually taking all measures for informed Cambon of this, who has made a similar statement to him
strengthening our military power, which must compel Germany to this morning.
hesitate before no measures so as to bring her preparedness for war
to the highest pitch. [Swerbeiefif, knowing that this would bring on (842. Sazonofl to the Russian ambassador at Paris. Confidential letter,
March 20-April 2, 1914. No. 23.)
the catastrophe In either a military or an economic way, the expression
is axiomatic of the policy of the Entente.]
In your letter of March 5-1S you mentioned the question of a closer
(839. The same to the same. Confidential letter, March 27-April 9, union between Russia and England and expressed the wish to ascertain
1914.)
my views upon this subject (Iswoisky’s inquiry was probably the result
The unfriendly attitude toward Russia, which became noticeable of French reaction to Sazonoff’s regret that there was “ Jack ” of an
ever since the beginning of the Liman von Sanders episode last winter, organ facilitating intercourse of the Entente), the more so since there
has much improved of late. The press has ceased its daily attacks was a possibility that this question would be touched upon by the
upon Russia, although no opportunity is missed of publishing this or leaders of French and English foreign policy during the impending visit
that fact unfavorable to Russia, mostly free Inventions or serious of King George to raris. I therefore consider it my duty to inform yon
distortions. This attitude of the German press does not let the ex that a further reinforcement and development of the so-called Triple
citement die down. This comparative quiet, however, so I hear con Entente and, if possible, its transformation into a veto triple alliance
stantly from a reliable source, is only apparent, and public opinion in appears to me to be a demand of the present hour. Whilst thoroughly
Germany is still as aroused as ever against Russia, wherein the mili insuring the international position of France, Russia, and England, an
tary men and the Prussian Junkers make no secret of their warlike alliance of this nature would, because of its lack of any thought of con
mood. This excitement and warlike feeling is due manifestly to Ger quest on the part of the powers mentioned, threaten no one, but signify
many’s fear of the increase of our military and economic power. They the best guaranty for the preservation of the peace of Europe. (Would
think that this is the most favorable moment for a conflict between j have done that by stabilizing international relations. At the same time
Germany and her eastern neighbor, since our military preparations Sazonoff's solicitude for the peace of Europe could not be taken
are by no means complete. [Depending entirely on the ability of the seriously ; it had its arridre pensde.)
French banks to make loans to Russia.] That such a conflict must
Certain steps have already been undertaken by France and England
come sooner or later is apparently not doubted here.
with regard to working out a plan for the most uniform action possible
In South Germany this hostility toward Russia is even more mani and for a more precise definition of mutual obligations. Obviously, we
fest, probably due to the influence of Austria. Our compatriots who too must work in the same direction, whereby a number of incidental
come through here have frequently reported this feeling to me. Of questions might be joined to a whole series of subjects which are ripe
course, I can not test this personally; perhaps their tales are much for discussion— subjects which impinge heavily upon Russian and Eng
exaggerated, but they must contain some kernel of truth ; all the more so, lish interests in numerous fields.
since even the German Government, as I reported in my letter of Febru
As you are aware, the inner situation of England is at present such
ary 27—
March 12, is much disturbed by the measures taken in Russia that it wholly absorbs the attention of the Royal Government and of
toward the increase of our army and of our military preparedness. the public. (Disturbances in Ireland and labor questions.) Under these
At least, such is my conviction. There is no doubt, furthermore, that circumstances the soil for international agreements, concerning which
the renewal of our commercial treaty in 1917, which may prove less the English, in accordance with their nature, are so sensitive, is most
favorable to Germany, is preying upon the mind of the Berlin cabinet, unfavorable, and we must, therefore, nolens volens, pursue this object
which, probably, would prefer to have the existing treaty remain In | with the greatest caution.
In spite of this, I share your opinion that it would not prove inex
force as long as possible.
Nevertheless I am of the opinion, In which I am confirmed by the pedient if Poincare and Doumergue (French minister of foreign affairs),
secret informations mentioned above, that the Berlin cabinet does not on the occasion of the meeting with King George, and his minister (Sir
share the views of the bellicose elements of Germany, which profess to Edward Grey), would in confidence indicate to them that a closer agree
desire an immediate armed conflict with Russia. The German Gov ment between Russia and England would also be hailed in France as
ernment prefers to try all peaceful means toward reconciliation before an auspicious event, which would prove equally desirable to all three
taking any decisive step. Among these means one o f the most im partners in the Triple Entente. The establishing of tho conditions
portant is the commercial treaty, so they are preparing here for the upon which a political convention of this sort might be concluded would
incidental negotiations with special energy along the lines of a care naturally have to be the subject of direct negotiations between St.
Petersburg and London ; but it is possible that the French Government
fully drafted plan.
would consider it useful to propose to Grey to communicate to us in
(840. Sazonofl! to the Russian ambassador at London. Telegram.
common the contents of the political convention which you speak of as
January 30-February 12, 1914. No. 252.)
having been concluded between England and France.
(The British
Government has consistently denied that there was a political conven
Copy to Paris.
Of late ice have frequently been able to convince ourselves that we tion or treaty.) This might then serve ns a basis for working out a
lack an organ which would unite the views and the common action of similar convention between Russia and England.
the powers, an organ such as the amoassadorial conference in London
(843. The Russian ambassador at Paris to Sazonoff. Letter, March 27last year. The correspondence resulting from this lack leads to de
April 9, 1914.)
lays which have an Injurious effect on the progress of affairs. As the
After the receipt of your letter of March 20-April 2, No. 23, I made
London cabinet does not desire again to convene last year’s conference,
we shall not further insist upon it, but Groy perhaps will not object use of the first opportunity once more to engage Doumergue in conver
to the proposal that at least the three powers of the Entente should sation in regard to the question of a closer understanding between
through their representatives in London establish the community of Russia and England. Doumergue confirmed to me in the most decisive
their views. For while the powers of the opposite group are acting | manner his intention of speaking to Grey, during the impending meeting,
we are merely deliberating [at least a slight exaggeration], and our to the effect that an agreement of this nature was highly desirable. He
coherence, weak enough in itself, thereby loses still more of its force. believes that it will prove very easy to bring forth convincing arguments
I beg you to speak to Grey in this sense as soon as your French col in favor of this thought, because it is most obvious that, inasmuch as
1 France has special military and naval understandings with Russia and
league receives instructions as to this matter.
70876— 11
I
• (iM o
x i n
' i v t i o i s s a a o K
o o ____________________________ t o
25
CONGRESSIONAL RECORD.
England, this system must he coordinated and complemented by corre
sponding understandings between Russia and England. Doumergue be
lieves that the Russo-English agreement would have to be in the form
of a naval convention, and that this would render necessary technical
consultations between the three staffs of admiralty. (Russian, French,
and British.)
With regard to the political compact between England and France,
which is to be communicated to us after consultation tenth Grey, Dou
mergue assured me that France and England were not bound by positive
political obligations, but that, should the course of events lead to com
mon action on the part of both powers, they would adhere to the tech
nical arrangements worked out by the general staffs. (Quite the worst
form of “ alliance ” there is, because it conveys no warning to the
adversary and leaves the casus foederis determinable by circumstances
the political opponent can not define to himself, as he can easily do in
case o f “ defensive” alliances.)
Doumergue added that he did not
remember whether the foregoing was expressed in a definite formula,
but he promised to look up the documents in the archives of the ministi^j, and to bear in mind the wishes which we have expressed.
Up to the present I have not had the possibility of renewing my
conversation with Poincarg upon this subject; he is still at Eze. But
I shall make an effort to see him at once after his return and to dis
cuss with him the contents of your letter.
(844. The Russian ambassador at London to Sazonoff.
29-May 12, 1914.)
Letter, April
Sir Edward Grey requested me to call upon him, and, upon receiving
me, told me that since his return from Paris he had had no other
opportunity o f seeing me save in the presence of the French ambassa
dor, which had not permitted him to describe to me in a veritable
manner how profound had been the impression which he had received on
his visit. He told me that he did not think he was merely giving his
own personal impressions, but also those of the King and of all those
who had taken part in the visit.
Grey told me that these impressions had exceeded his expectations by
far, and that he could not sufficiently congratulate himself upon the
reception by the President of the Republic and by Doumergue, with
whom a perfect understanding had been achieved regarding all current
questions and the general political situation. (It so happened that Just
then there was no “ crisis ” o f any sort in Europe ; shortly afterwards
Poincar6 went to Russia.) That, in addition to this, the reception ac
corded Their Majesties on all occasions and wherever they appeared
bore the stamp of sincere sympathy. From this the British Government
had drawn the conclusion that the fundamental idea of the Entente had
taken root as deeply in France as in England, and that in consequence
o f this it rested upon a particularly firm and enduring basis.
On this occasion Grey spoke with a warmth which is not usual with
him and which proved that he made his deductions from firmly
grounded judgment. The intention by which he was governed in asking
me to come and see him, in order to make such a communication to me,
is entirely clear. He wished to announce to me the beginning of a
phase of a still closer rapprochement to France. This intention became
still more obvious to me upon his remarking to me without any prelimi
naries, that I was doubtlessly informed about the conversation which he
had had with Doumergue on the subject of Russia. He told me that
it had been impossible for him in Paris, being at a distance from his
colleagues, to do more than express his personal assent to the plan, ac
cording to which the Governments of England and France were to
inform the Russian Government of all military conventions existing
between England and France. (The Russian Government had desired
that on former occasions, without success, however.)
He was able to inform me to-day that he had spoken of this to the.
prime minister immediately upon his return to London; the latter
shared his opinion and had no objections to make against the plan
proposed. The whole affair teas, however, essentially of such impor
tance that it could not be decided upon without the assent of the
cabinet-council.
Grey told me that, to his great regret, it had not been possible for
him to convene the cabinet for this purpose during this first week ; the
Ulster question and the budget demanded the entire attention of the
ministers.
I said only a few words in reply. I thanked Sir Edward Grey for
his communication and told him that I knew how to appreciate its
significance to its full extent, [Benckendorff realized that a naval or
military convention with Great Britain, or both of these, would have
far-reaching effects upon the international situation. Besides, the mak
ing of such agreements would have been a most satisfactory culmina
tion of his own efforts
We find, then, that this sane man loses his
balance a little in gladsome anticipation of the promised state of affairs
whenever he writes of it.] I summed up the situation to the effect
that if the two governments should communicate to us their military
conventions [going a step further, Benckendorff wanted not only a naval
but also a military convention], the Russian Government would reserve
the privilege of making a corresponding proposal upon an analogous
basis to the British Government, I told him that I assumed he knew
76876— 11-------4
the views your excellency entertained regarding the necessity of a still
closer union between the Triple Entente, according to which even ? *
■»
alliance after the pattern of the three other powers was not excluded.
Sir Edward replied that he did not consider an alliance as possible.
I returned that I personally also conceded the difficulties of such an
alliance. He added :
“ As you see, we have no alliance to-day even with France. [French
and Russian statesmen had failed to realize that British imperialism
was too large an institution to be tied down by definite agreements;
that, indeed, there were too many hostile points of contact between
Great Britain, France, and Russia to make an alliance of definite terms
possible, as in Persia, China, Turkey, the Balkans, and North Africa.
A definite alliance between Russia and France was possible because of
their common aversion to Germany, an almost total absence of colliding
colonial interests, and the necessity of Russia to find capital and of
France to find profitable investments. None of these factors were evi
dent in Anglo-Russian relations.]
(845. The same to the same. Letter, May 3-16, 1914.)
The French ambassador informs me that Grey last evening gave
him to understand that he had submitted to the ministerial council
the answer which he had given M. Doumergue in Paris in his own
name after the French minister had made clear to him the expediency
of informing the Russian Government of the correspondence which had
taken place between the French and the English Governments, in order
that the St, Petersburg cabinet might begin negotiations to conclude
am agreement on the same basis regarding the eventual cooperation
of the Russian and English navies. Sir Edward had remarked, in addi
tion, that the ministerial council had approved of this answer. He
(Grey) reserved the right of informing me of th is; but as the pro
posal had originated with Doumergue he considered it necessary first to
inform him of the decision of the British cabinet,
According to Sir Edward’s view, the course of the proceedings might
be os follows:
After authorization by his Government, Cambon would inform me
of the exchange of notes, whilst at the same time Sir Edward, on his
part, would communicate the same to me in order that I may inform
the Russian Government. Just as the agreements entered into with
France provide, in the event of a casus belli, first of all for the coopera
tion of the armies, so, according to Sir Edward Grey, the nature of
things demands that the eventual agreements with Russia should relate
to the navy. The negotiations would, in consequence, have to be car
ried on between the Russian and English staffs of admiralty. The
negotiations with France took place at the time in London, and the
French military and naval attaches in London traveled to Paris in order
to obtain the instructions which occasion rendered necessary. Finally,
Prince Louis of Battcnberg went to Paris quite inofficially in order to
coordinate the agreements. [First Lord of the Admiralty, hut by no
means a naval expert, so that the coordination in question was probably
of a political character.]
Cambon was of the opinion that after the correspondence had been
communicated it would be necessary to determine the further proceed
ings. He told me that, according to the opinion of Sir Edward Grey,
the negotiations might be conducted precisely as in the case o f France,
i. e., that our naval attachi in London would be empowered to enter
into negotiations with the British admiralty staff, after he had been
given instructions in St, Petersburg, for even repeated journeys on the *
part of the naval attach6 would in no wise arouse public attention,
whereas the arrival of more prominent Russian naval officers in London
would surely become known and might lead to undesirable comments
(and thus inform the members of the Triple Alliance).
(846. The same to the same.
Letter, May 5-18, 1914.)
Upon my return to London from Paris Cambon informed me that
Grey had confirmed to him what he had told Poincard and Doumergue
in his own name. Grey added, that since his return the Cabinet had
met daily, because of the difficulties in Ireland and the budget, so
that he had not yet found it possible to take up with his colleagues the
important questions of the day, which referred to foreign affairs and
the Paris conversations. He had been obliged to postpone these ques
tions for 8 or 10 days. Grey, however, had reported to Asquith on his
journey. Without binding the Cabinet to the present, Asquith had an
swered that he saw no insurmountable difficulties against carrying out
the plan proposed in Paris. Since then Asquith has repeated this to
Cambon himself. The latter has been able to establish the fact that
the prime minister is very favorably disposed to plans of that kind.
These refer, consequently, to eventual military conventions between
Russia and England analogous to those which exist between France and
England. The latter xcould be communicated to us in confidence, where
upon the Russian Government would have to make analogous proposals
tc the British Government, which, according to the nature of things,
would refer more to the navy than to the army.
It is not to be assumed that all members of the Cabinet will give
their sanction to tins beforehand and without opposition. [Feeling
that so long delayed a convention with Russia had a definite object in
view. The sounding of Grey by Benckendorff had been a continuous
LZ
20
(IUODZU
T
VNOISSAHONOA
CONGRESSIONAL RECORD.
Fir Edward emphasized the fact that, without some such previous
performance, so that an emergency would be detected behind Grey's
willingness to approach Russia closer in a military sense.] Neverthe agreement, an immediate cooperation, even with the best of wills and
less, the firm determination of the real leaders of the Cabinet will carry in spite of the close political entente between both Governments, would
the day, as I do not doubt in the least, and then the real negotiations encounter serious technical difficulties. [Hardly the case. The British
Government would have either accepted or rejected an alliance. No
may begin.
After the results which have just been described will have been technical difficulties were involved. It was all a matter of whether
achieved we, as I believe, will have attained the main object in view, or not an alliance or a convention was desired and desirable. From
namely, to substitute for the hitherto far too theoretical and peaceable an alliance retreat was impossible without perjury; a convention left
basic idea of the entente something more tangible. My sojourn in it to the British Government to recognize the “ necessity ” tor partici
raris and the spectacle which 1 there witnessed have anew substan pation. One can not escape being struck by the fact that Russia and
tiated my opinion, that an alliance or any other form of public agree France in thus bowing to the whim of the British Government must
ment is impossible, and that, even if the British Government should have valued their ententes with Great Britain far beyond the limits
permit itself to agree to this, the results would be quite different from ordinarily set by “ national honor ” and sovereignty. Grey was willing
those expected. The reception which was accorded the King and the to go so far and no farther, and the French and Russian Governments
Queen was no doubt an extraordinarily hearty one, much heartier, I accepted his views without so much as offering a good argument for
was told there, than was the case with former English visits. If, in what they really did want— treaties of alliance with Great Britain.]
spite of this, the impossibility of concluding a formal alliance between
He added that England had no objections to an agreement in the
England and France has been recognized, then this will in a still same spirit as expressed in the correspondence between Cambon and
greater degree be the case between Russia and England. [Naturally, himself, being entered into and concluded between the Russian and the
Great Britain’s rensons for not making a definite alliance, with France English staffs of Admiralty. In a convention of this kind he saic the
were identical to those that argued against a definite alliance with same practical advantages which result from the convention with
Russia. The British Government was at least true with Itself. Its France. He told us that he was thinking of a naval convention, be
world politics— as those of any other Empire— were such that it became cause this, in view of the circumstances, was the most suitable, and
necessary to play all States against one another, in which none were because he was, moreover, disposed to believe that this would also be
really friends while all were potential enemies.]
in accordance with the wishes of the Imperial Government.
7 doubt whether a more powerful guaranty for common military oper
Hereupon, Sir Edward Grey gave me a copy of the document which
ations could be found in the event of war [all too true] than this spirit he had handed to the French ambassador on November 22, 1912, and
of the entente, as it reveals itself at present, reinforced by the existent Cambon on his part gave me, on the authority of his Government, a
copy of the reply which he had directed to Sir Edward Grey on the
military conventions.
I f we review the various phases of the entente it can not be denied following day.
that England has never hesitated in threatening moments to place her
In response to my question, Sir Edward declared that the most
self on the side of France; the same holds good for Russia on emery expedient thing to do would be to authorize our naval attach^ in Lon
occasion on which English and Russian interests were simultaneously don to place himself in communication with the British staff of Ad
affected, and this, despite the difficulty of reconciling the policies of miralty. The first Lord of Admiralty, as well as the B>-itish ministers,
both countries in questions that arise day after day, and despite those were instructed as to our plans. The British staff of Admiralty is in
reasons, which it would lead too far to discuss here, but which explain possession of the conventions regarding the navy which were worked
clearly why the entente between Russia and England has not taken out in common by France and England. As to the remaining agree
root so deeply as that between France and England. [These policies ments, France, who was allied with us, might use them as she deemed
and reasons are outlined in the footnotes explaining why Great Britain necessary.
In thanking Sir Edward for his friendly sentiments, I confined my
was averse to “ alliances.” ]
The reason for this is to be sought in the tact that even a most care self to remarking that I would at once transmit the copies of both
ful but public alliance would meet with strong and undisguised opposi documents to your excellency and report to you exactly what he had
tion in England, and that not only on the part of the Liberal Party, told me when handing the copy.
and that a great part of the political effect intended would be frustrated
(848. Letter from Sir Edward Grey to M. Paul Cambon, the French
by it. I believe that under such circumstances an alliance would not
Ambassador at London. Nov. 22, 1912.1)
be worth much. It would merely, in a very slight degree, increase the
“ From time to time, during the course of the last few years [we
guaranties which are offered to France and Russia by England, and it
seem to deal here with an inconsistency. The correspondence between
would, on the other hand, offer a far more fertile soil for agitation in
Cambon and Grey is dated November 22 and 23, 1912, but says that
favor of Germany, something upon which Germany places more weight
‘ from time to time, during the course of the last few years, the experts
than ever. [Somewhat far-fetched. What an alliance would have done
of the French and British military and naval authorities have con
fa : Germany would have known just what to expect, and it is precisely
sulted with one another ’— in other words, the convention was in
this which Grey wanted to avoid as is shown by the documents.]
existence, and very broad in scope, as will be shown further on. Since
To recapitulate in bHef, I would like to say that even those English
the period of this activity by French and British military and naval
men who are firmly convinced that sooner or later a conflict with Ger
agents was anterior to the exchange of the letters between Grey and
many will prove inevitable would be frightened by the idea of binding
Cambon, it is reasonable to assume that the Franco-Russian convention
England by means of decisive treaties of alliance which would impose
contained in its proper text certain stipulations and conditions as to
obligations upon her, the conditions and consequences of which can not
the question of effectiveness of the understanding. The Russians were
as yet be foreseen.
never informed of this, and, in their case, a writ of nonresponsibiiity,
(Russian ambassador at London to Sazonoff.)
for the benefit of the British, was exacted as the very beginning of
(847. The same to the same. Letter, May 10-23, 1914.)
the negotiations. In the light of these facts, the value of the GreySir Edward yesterday requested that Cambon and I call upon him. Cambon letters is no great one, being simply a screen for the actual
As my French colleague had already informed me, the Secretary of State understanding that made such military and naval cooperation with
confirmed to me the fact that the English Ministerial Council had France possible] the experts of the French and English military and
approved of the answer which he had given to Doumergue in Paris in naval authorities have consulted with one another. It was constantly
his own name [to wit, without the consent of the Cabinet council], agreed that such discussions were not to restrict the freedom of decision
after the French minister had spoken of the relations between Russia of the two Governments as to whether the one was to support the other
and England and had indicated how useful, under certain contingencies, with arms or not. We assumed in this that such consultations by ex
previous military conventions between the Governments would prove. perts represented no agreement, and could not be regarded as one,
The first step to be considered was to communicate to the Russian whereby the one Government or the other would be pledged to intercede
Government, on the part of France and England, the. two confidential in an eventuality which had not yet taken place and which might never
and secret documents, which had been exchanged between the French take place. Thus, for instance, the present division of the fleets of
and British Governments in the year 191Z.
France and England is not based upon an obligation to operate in com
Sir Edward laid special stress upon the point, that the text of these mon in the event of war.
documents showed that no alliance was concluded between the two
“ You have in the meantime pointed out that if the one Government or
powers. They fulfilled the purpose rather of putting the substance of the other should have weighty reasons to fear an unprovoked attack
the military agreements in the proper light, agreements whioh had on the part of a third power, it would be necessary to know if it might,
been entered into between the army and navy authorities for the in such a case, count upon the armed assistance of the other. I am
eventuality that it should become necessary for the British and French entirely of the opinion that if the one Goverriment or the other should
naval and land forces to cooperate actively. [The eventuality differs have weighty reasons to fear an unprovoked attack on the part of a
from the regular casus foederis of defensive alliances in so far as it third power, or any other threatened disturbance of peace, this Govmakes t«a*<peration of the armed forces contingent upon the mutual
1 This text differs slightly from the version of the letter in the
selective consent of the subscribing Governments, instead of fixing the
point and conditions of “ operativeness ” of the alliance in a definite British “ Blue Book,” due, no doubt, to subsequent editing of the “ Blue
Book ” text.
and precise manner.]
76876— 11
U H c m a T V N O is s a a s N L O j
CONGRESSIONAL RECORD
rrnmevt ought at once to come to an understanding with the other as
to whether both Governments are to proceed in common in order to
icard off the attack and to preserve peace, and to consider what
measures are to be mutually taken. If these measures comp> ise a
military action, then the plans of the general staffs are to be con
sidered at once, and it would be the duty of the Governments to decide
as to how far these were to be followed.”
(849. 'Letter from M. Paul Cambon, the French Ambassador at London,
to Sir Edward Grey, Nov. 23, 1912.1)
You reminded me, through your letter of yesterday, the 2 2d of Novem
ber, that from time to time during the course of the last few years the
experts of the military and naval authorities of France and England
have consulted with one another, that it was constantly agreed that
these discussions were not to restrict the freedom of any Government
in deciding in the future ichether it wished to grant the other armed
assistance or not, that these consultations between the experts formed
no obligation on either side, and were not to be regarded as any which
would compel the two Governments to intervene in certain eventualities,
and that you have in the meantime pointed out that if one or the other
Government should have weighty reasons to fear an unprovoked attack
on the part of a third power it would be important to know whether it
might count upon the armed assistance of the other.
Your letter gives the answer to this point and I am empowered to
state that in the event of one of the two Governments having weighty
grounds for fearing an attack by a third power or a disturbance of
general peace, the Government in question ought at once to decide in
conjunction with the other, whether a procedure in common by the
two Governments would be feasible to prevent the attack or to pre
serve peace. In this case the two Governments would discuss the
measures which were to be taken conjointly. Should these measures
make a military action necessary, the two Governments would at once
consider the plans of their general staffs, and a decision would be made
es to how far these plans were to be followed.
(850. Sazonoff to the Russian Ambassador at London. Confidential
letter, May 15—
28, 1914. No. 47.)
The readiness of the British Government to begin, without delay
(the British Government was in no hurry, according to Prince Louis
of Battenberg, which is to be explained largely by the fact that the
Russian fleet being a negligible quantity Just then, Great Britain as
sumed most of the liabilities], negotiations regarding the conclusion
of an agreement between Russia and England, which would concern
joint operations of our naval forces in the event of a common military
action, has been received on our part with a feeling of the greatest
satisfaction. Quite apart from the fact that such an agreement is
desirable from a special military standpoint we attach great importance
to it in a general political sense.
In the conclusion of such an agreement we see an important step
toward bringing England into closer union with the Franco-Russian
alliance and an effective means of reinforcing the recognition of the
common interests of England and Russia which, we are convinced, will
favorably influence all the questions which affect British and Russian
interests. I have called the attention of our ministry of the navy, in
particular of our naval agent in London, most specially to the great
political significance of the impending negotiations which the latter will
have to carry on with the English staff of admiralty. [According to
Grey, they were not to have “ great political significance,” and there
was no mention in the Cambon letters of “ active cooperation of their
naval fighting forces,” which term, however, Sazonoff may have con
sidered as merely circumscribed. Be this as it may, Sazonoff evinces
an eagerness hardly compatible with the dignity of the Imperial Rus
sian Government.]
The proposal made by the British Government
respecting the form in which the convention is to be concluded is
recognized by us as in every way suited to the purpose [showing that
the Russian Government was not very particular as to quality], and
Captain Volkoff has been instructed to enter into negotiations with the
British Government. The principles which are to be considered during
the impending negotiations have been the object of a consultation which
took place on May 13-26 in the office of the chief of the staff of
admiralty.
For your personal information, I append a copy of the resolutions
passed at this conference.
“ On May 13— 1911,, a consultation took place in the office of the
26,
chief of naval staff for the purpose of an exchange of opinions respect
ing the impending negotiations as to a convention between Russia and
England, which concerns the active cooperations of their naval fighting
forces should warlike operations, agreed upon by Russia and England,
take place with the participation of France. After it had been pri
marily remarked how desirable such a convention would be from a
specific nsval standpoint and, above all, with regard to general political
considerations, the members of the conference, after a comprehensive
examination of the question, came to the following decisions:
1 See first footnote to preceding document.
7 0 8 7 6 — 11
'Jo
27
“ It was first of all recognized that our naval convention with Eng
land, like the Franco-Russian naval convention, would have to bear in
mind actions of our navy in conjunction with the English Nav-y which,
while constituting actions agreed upon, would nevertheless be separate.
“ As to the strategic aims, which, from our standpoint, are to become
operative in the event of a war between the powers of the Triple En
tente and the powers of the Triple Alliance [a very dangerous and un
diplomatic admission], one must distinguish: on the one hand, between
the operations in the region of the Baltic and the North Sea; on the
other hand, the Mediterranean. In both we must seek to obtain com
pensation from England for divei-ting a part of the German fleet upon
ourselves.
[The Russians wanted ‘ compensation ’ even when they
were the beneficiaries.]
“ In the northern theater of war our interests demand that England
should fetter as great a portion of the German fleet as possible in the
North Sea. By this means the vast preponderance of the German fleet
oven- our own would be equalized and perhaps permit, in the most
favorable circumstances, a landing in Pomerania being made. Should
it be possible to undertake this operation, its execution would be ren
dered extraordinarily difficult owing to the lack of transport vessels in
the Baltio. The British Government might, therefore, assist us con
siderably by rendering it possible that a certain number of merchant
vessels should be sent to our Baltic ports before the beginning of war
like operations so that the lack of transport vessels might be made
good in this way. [This should remove all doubt as against whom the
convention was directed. The casus foederis may have been absent, but
the objective at least was plainly identified.]
“ The situation in the Mediterranean also concerns our interests most
essentially, since in the event of the Austro-Italian forces in this sea
having the upper hand, an attack by the Austrian fleet in the Black
Bra would be possible, which would mean a serious blow to us. It is,
therefore, from our point of view, extremely important that a safe
preponderance of the fighting forces of the Entente over the AustroItalian Fleet in the Mediterranean be established. Since the AustroItalian naval forces are superior to the French, it is desirable that
England, by stationing the requisite number of vessels in the Mediter
ranean, secure the preponderance of the Entente Powers, at least so
long as the development of our own fleet does not permit us to assume
this duty. It would also be desirable that England’s consent to our
ships using the English ports in the eastern Mediterranean as bases
be secured, similar to what is granted to us by the French naval con
vention, which permits ws to make use of the French ports in the
western Mediterranean.
“ Should the question of the Straits (the Bosphorus and the Dar
danelles) he discussed in connection with the situation in the Mediter
ranean, then political questions were not to be touched upon; but only
temporary operations in the Straits, as one of our strategic measures in
the event of war, were to be borne in mind.
“ In addition, the conference recognized that it was desirable that all
details of the relations between the Russian and the British navies in
the projected naval convention between ourselves and England should
be established. For this purpose it will be necessary to come to an
understanding as to signals and special ciphers, wireless messages, and
the relations between the British and the Russian naval staffs.
“ It is moreover necessary that information regarding the navies of
other powers, as well as one’s own navy, and in particular with regard
to technical details, instruments, and inventions, be exchanged between
the two naval departments.
“ In the opinion of the conference, it would also be necessary to
arrange for a periodic exchange of opinion bettceen the heads of the
Russian and the English admiralty staffs according to the example of
the Franco-Russian naval convention.”
[A rather accurate transcript
of the above document passed into the hands of the German Govern
ment. The dementis of the British and Russian Governments did not,
and naturally could Dot, remove the deep impression made by the terms
of the above communication. Despite that, Emperor William went on
a trip into Scandinavian waters even after the assassination of Arch
duke Francis Ferdinand.]
(851. The Russian naval agent in London to the chief of the Russian
staff of admiralty. Secret report, May 24-June 6 , 1914. No. 182.)
I have the honor of reporting to your excellency regarding the pur
chase of the dreadnought [both Russia and Turkey were in the market
for these ships, the population of the latter having raised the necessary
funds by population subscription] belonging to Chile, as well as the
prospective conditional agreement with England.
Before my departure from St. Petersburg it appeared to be certain
that the Government of Chile had finally agreed to the sale and that
this might hence be concluded in the near future.
After my return here and after a conversation with the firm of
Armstrong I have the following results to report: Although the naval
council in Chile has approved of the sale o f the two dreadnoughts, the
Government has not found it possible to confirm this decision, even
though no final negative answer has been given on its part. ’ This
change of front is to be attributed entirely to the Chilean minister here.
0 6
28
tlUODAU IVNGISSZUDSIOD
COTS ORESSIOTS AT j TIYA01\T>
77ie latter once remarked, even before the beginning of our nego
tiations, that he considered it possible to sell the ships only to England.
Since Atm strong is aware of this, he believes that the only m e a n s of
securing us at least one ship is to have our am-bassador request Orey
to indicate to the Chilean minister that England would be pleased with
this sale. It Is still doubtful whether Grey will determine upon such
a step. Should this be the case, we might count upon being able to
purchase at least one vessel, if not both. After Grey has returned to
London I shall submit these considerations to our ambassador and
request his support.
As to the prospective naval convention with England, I have been
able to establish the following after my conversation with the Prince
of Battenbcrg [Louis, who had coordinated the Franco-Britlsh agree
ments] :
The British. Government i s in no haste, and it. is the French Govern
ment which insists upon expediting this matter. [There was no need
for haste so far as the British were concerned. The Russian fleet was
a wholly negligible quantity and landing troops in Pomerania a quite
impossible plan so long as the Entente fleet was not In control of the
Baltic.] The prince intends to travel to Russia with his wife during
the coming August, and he i s authorized to discuss this question with
the Naval Minister and with you. Before his departure he will ask me
to see him with regard to an exchange of opinion, In order to prepare
himself for the further negotiations which are then to take place in St.
Petersburg. His Highness is quite in agreement with these negotia
tions.
l
If Turkey should Increase her armaments; he trusts, however, that
prudence will keep the upper hand In Constantinople. Should the crisis
grow acute the Government at London is prepared to come to an under
standing with us without delay and to confer as to the attitude which
is to be adopted. [Turkey was augmenting her naval forces, because
Greece was negotiating, through a Fred J. Gauntlctt, for the purchase
of the United States battleships Idaho and Mississippi, which the
United States Congress knocked down at the bargain-counter figure of
exactly ?12,535,276.98.]
(854.
The Russian ambassador at London to Sazonoff. Telegram May
3 1 -June 13, 1914. No. 150.)
Your telegram No. 1137 received. I have repeatedly discussed this
question with the foreign office during the last few days. The difficulty
lies in the fact that the Chilean minister is opposed not only to a sals
to Russia, but to any sale whatsoever. Grey told me the day before
yesterday that he would make use of a favorable opportunity to pre
vail as much as possible on the minister.
(855.
The same to the same.
Telegram June 12-25, 1914.
No. 167.)
Grey told me to-day that he was greatly alarmed by the false rumors
which were circulating in the German press concerning the contents of
the alleged naval convention between England and Russia in connection
with the question of the S traits; he had deemed it necessary to speak
of this in confidence to Lichnowsky, who is going to Kiel, where he is
to see the Emperor. Grey assured the German ambassador that the
question of the Straits had not been discussed between England and
(852. The Russian ambassador at London to Sazonoff. Letter, May Russia for five years. [Hardly true.] He assured him that between
29—
.Tune 11, 1914.)
England on the one hand and France and Russia there existed neither an
I notified Grey yesterday that Captain Volkoff had returned from St. alliance nor a convention. [“ And Brutus is an honorable man.” ] He,
Petersburg and had been instructed to enter into negotiations with the nevertheless, told, him that he did not wish in any way to conceal from
Admiralty. Grey replied that he would at once acquaint, the First Lord him that the intimacy between the three Governments had grown so
of the Admiralty of this. On this occasion Grey remarked that certain great during these last years that they had on all occasions come to an
indiscretions had regrettably been committed in this matter and that understanding upon all questions just as though they were allies. On
first German and then other newspapers had occupied themselves with the other hand he affirmed that during the course of these years such
this question. He regretted this, the more since he will be obliged to negotiations had never assumed a character directed against Germany.
reply to a question relative to this which will be put. to him in the [A falsehood.] Nor had they any reference to the so-called “ encircling
policy.” [In this connection the answer given by Sir Edward Grey to
Commons.
I replied that I. on my part, extremely regretted these indiscretions, the questions put to him in the House of Commons by Mr. King,
which repeated themselves all too frequently; I was convinced that member of Parliament, and by Sir W. Byles, member of Parliament, Id
Your Excellency shared this point of view, and I told him that the June, 1914. deserves to be cited :
“ 3. Mr. King asked whether any naval agreement has been recently
Novoe Ycrmia had published a dementi. [Showing what the value
of governmental dementis—denials— is.] Grey was not aware of this, entered into between Russia and Great Britain, and whether any nego
and was very well satisfied. [The virtuous Sir Edward.] He asked tiations, with a view to a naval agreement, have recently taken place
me to send him the text. He then told me in general outlines the or are now pending between Russia and Great Britain.
“ 5. Sir William Byles asked the Secretary of State for Foreign
answer which he thought of returning in Parliament, and which would
cover our negotiations, as well as those ichich had taken place with Affairs whether he can make any statement with regard to an alleged
France.
[Indicating to what extent the British Parliament enjoyed new naval agreement between Great Britain and Russia ; how far such
the confidence of Grey and the Government.] I replied that it seemed agreement would affect our relations with Germany, and will he lay
papers.
expedient to me to treat the matter from this point of view.
Sir E. Grey :
(853. The same to the same. Telegram May 30-Tune 12, 3914. No.
“ The honorable member for North Somerset asked a similar question
149.)
last year with regard to military forces, and the honorable member
Grey told me that he highly appreciated your frank and friendly for Aorth Salford asked a similar question also on the same day, as
declarations regarding the Turkish Navy. Had the British Government he has again clone to-day. The Prime Minister then replied that if
believed that the development of the Turkish Navy signified a danger war arose between European powers there were no unpublished agree
for Russia, the British officers would not have been permitted to enter ments which would restrict or hamper the freedom of the Government
Turkish service.
[This document shows diplomacy in its dull mo or of Parliament to decide whether or not Great Britain should par
ments.]
filnee this permission, however, has only been granted to ticipate in a war. That answer covers both the questions on the
enable the Turkish Navy to defend the independence of Turkey every paper. It remains as true to-day as it was a year ago. No negotia
deviation from this aim would meet with the disapproval of the Gov tions have since been concluded with any power that would make the
ernment. Grey added that a refusal would have resulted in the Turkish statement less true. No such negotiations are in progress, and none
Government turning to Germany, which would have been contrary to are likely to be entered upon, so far as I can judge. But If any
the interests both of Russia and England. [Not a sound argument, j agreement wore to be concluded that made it necessary to withdraw
since Great Britain and Russia succeeded in making the German mili- j or modify the Trime Minister’s statement o f last year, which I hare
tary mission in Turkey almost entirely impossible. The presence in quoted, it ought, in my opinion, to be, and I suppose that it would be,
Turkey of the British naval mission was the only reason why the laid before Parliament.”
Another falsehood— flavored with a grain of truth.
Turkish Government was permitted to retain the services of Liman von
Sanders Pasha, so that there was no danger at all that the development
(856. Sazonoff to the Russian ambassador at London. Confidential
of the Ottoman fleet would have been left to the Germans. There
letter, June 12-25, 1914.)
were times when Sir Edward Grey had a poor opinion of the intelligence
of the Russians, and this was one of them. The astute Benckendorff
Immediately before the departure of our courier I hasten to inform
had fallen under the sway of the “ closer relations ” promoted by the you that I had another long conversation yesterday with the British
proposed naval convention and once more lost his splendid perception ambassador, whose attention I called to the serious danger of a cooling
and fine Judgment.] As to the ordering and the sale of ships in Eng of our relations to England on account of the Persian question. I
land, the Government had no legal means at its disposal to oppose assumed that the perturbation and excitement which had been notice
these.
Nevertheless, the British ambassador in Constantinople has able of late in England were most likely to be traced back to the fact
been instructed to moke representations to the sublime portc, and the that fears as to the position of England in India were once more be
British officers in Constantinople are to express themselves in the same coming manifest. Sir George Buchanan conceded that my assumption
was for the greater part correct. In consequence, I once more re
sense, though more indirectly.
These declarations have, however, brought about the result, that peated to him all the arguments which prove how unfounded all such
without any previous notification of the British Government, and fears arc, and I even hinted that, should it be desired, we could give
without any cooperation with the naval mission, direct contracts have to the British Government and to public opinion there reassuring dec
been signed between the Turkish Government and English shipbuilding larations in regard to this in the most decisive form.
yards which lie quite beyond the influence of the Government. Grey
I have for the present contented myself with these hints; yet it
Is of your opinion, that complications with Greece are to be feared I seems to me quite possible that later on, in connection with our fur
70876— 11
CL&0 3 '3 & TV
CONGRESSIONAL RECORD.
7
ther negotiations, we might propose to England to give her a guarantee
of her Indian possessions as effective as that given her by Japan in
1902.
At the present time it appears to me necessary to conclude the pro
posed naval conference as quickly as possible. [A rather interesting
statement in the light of the “ open secret ” making the rounds in
Europe at that time, that in the course of that summer the Archduke
Francis Ferdinand of Austria was to be put out of the way because
of his alleged anti-Slav tendencies, as he was three days after the
writing of this letter. There had never been much antipathy against
Austria-Hungary in Engiand, and Sazonoff needed some assurance that
he would have the support of the British Government when the work
of the Crown Prince Alexander and the Serbian Narodna Odbrana
should have produced the next Balkan crisis.] It is important not to
postpone the conclusion of this agreement, and His Majesty ivas gra
ciously pleased to express himself in this sense to the British ambas
sador in my presence.
To close, I will mention that Sir George
Buchanan was received yesterday in special audience by the Czar in
order to hand him an autograph letter from King George. This letter
is couched in very friendly terms, and expresses the hope of His
Majesty that the relations between Russia and England might not be
troubled on account of the Persian question.
(857. The Russian ambassador at London to Sazonoff.
19-July 2, 1914.)
Letter, June
I have received your very confidential letter of June 12-25. The
answer which was given to you by Sir George Buchanan in reply to
your statement that in England there was a revival of the old fears as
to India Is undoubtedly correct; it must, however, be supplemented
by a few additional words.
Inasmuch as the security of India is a consequence of the political
entente between Russia and England, it follows that public opinion in
England, as well as the British Government, in full confidence as to
our intentions, have no fears so long as this entente exists. Should
this entente come to an end, there would be a revival of the fear in
question. We have to deal therefore with an hypothesis, which, how
ever, arises only if the entente appears to he threatened by the events
in Persia. It seems to me important to lay stress upon this difference,
for the fears of the English do not go further than I have Just
indicated.
This docs not, however, preclude the possibility of finding, in con
nection with certain modifications of our present agreements, a for
mula tohich would give expression to the security of India in a still
more direct manner; this would merely make our entente still closer.
The conversations which I have had with Grey during the last
few days prove this in a manner which is as clear as it is convincing.
I shall do all that lies in my power to expedite the negotiations be
tween Captain Volkoff and the British Admiralty. I see no indica
tion that the British Government hesitates, in any way, to carry out
the plan agreed upon in Paris. I believe, on the contrary, that this
question has assumed a still greater importance in the eyes of the
British Government; it sees in this a practical necessity and a natural
result of the entente. If the matter has dragged up to the present,
this is to be attributed to the circumstance, of tohich I was, moreover,
informed from the very beginning, that the Government wishes to
instruct Prince Louis of Battenberg to bring the negotiations in St.
Petersburg to a close. The exact date of this quite private visit,
concerning which nothing is to penetrate into the public, has not yet
been fixed. Naturally, the date of this visit depends only in a slight
degree upon Prince Louis himself.
One circumstance, which at first glance is of merely subordinate
importance, but which is in reality much more important than one
is disposed to assume, has up to the present adversely influenced the
preparatory negotiations of Captain Volkoff. I allude to the indiscre
tions which have been committed. It is true that these, having very
likely been committed in Paris, cause no particular surprise. Not
withstanding, it must be remarked that nothing has ever become
known as to the Anglo-French convention. (The existence of which
Grey denied in Parliament.)
There seems to be no doubt that this time the alarm in Berlin has
been very great. (Resulting from the assassination of the Austrian
heir presumptive.) Perhaps Sir Edward Grey desires that this should
be somewhat allayed before he enters upon further negotiations. It
is, indeed, true that he would find it difficult to issue a dementi, and
to go on negotiating at the same time— a r6le which he would be
obliged to play toward Germany, as icell as toward a considerable por
tion of his own party, and the English press.
It is evident that your conversation with the British ambassador
will exercise a good influence.
(858. The same to the same. Confidential letter, July 3-16, 1914.)
I have but very little that is of interest to report to you to day.
Grey told me yesterday that he had received no further disquieting
news from Vienna and Berlin during the last few days. Nevertheless,
he did not seem to be very reassured. He considers the outbreak of
76S76— 11
29
------------------------------------------------------------------------------------ *
-----national passions as very dangerous, the more so since there are but
very few elements which would be able to restrain them. He says
that we can no longer count upon Germany being the peacemaker un
der all circumstances. 'Nicolson is less uneasy. His standpoint is
based upon the idea that Emperor Francis Josef could desire warlike
complications this year less even than during the preceding year
now that the Archduke Francis Ferdinand, who was to be the leader
of the party of action, was no longer there. I have no doubt that
Grey has used very plain language in Berlin and Vienna.
The military advance on Germany while Germany was pre
vented from mobilizing by diplomatic negotiations appears from
the dispatches published in “ The Falsification of the Russian
Orange Book.” (Exhibit VII.)
(Explanation of the different types employed. Roman p rint: Text
of the official Russian Orange Book to which no exception can be
taken after comparison with the original telegraphic texts of the
documents. Italic print: Falsifications and omissions in the official
Russian Orange Book as proved by the same documents.)
EXHIBIT VII.
DO CU M EN TS.
(From the charg4 d’affaires in France to the Minister for Foreign
Affairs.)
(Tel. No. 184.)
P a r i s , 11/H July.
The copy of the note handed in at Belgrade was officially commu
nicated to the French Government by the Austrian ambassador to day,
with the addition of detailed reasons for it, which have already ap
peared in the newspapers. Later the German ambassador saw the
minister (Bienvenu-Mnrtin, French minister of justice, representing the
foreign minister during the latter’s visit to Petersburg) and read to
him a communication setting forth the Austrian arguments and stating
that if Serbia refused compliance or adopted a defiant attitude Austria
would be obliged to exert pressure and, if necessary, take military
measures. At the end it was stated that in the German view this was
a matter that should be directly settled by Austria and Serbia them
selves, and that it was to the interest o f the powers in general to
leave the affair to the powers concerned. Germany ardently desired
the localization of the conflict, as the interference of any other power
on the ground of existing treaties must have incalculable consequences.
Berthelot, the director of the political section, who was present at the
interview, asked the ambassador whether Austria’s action was to be
regarded as an ultimatum or only as a summons, or, in other words,
whether warlike action would inevitably follow if Serbia did not
acquiesce unconditionally in Austria’s demands.
The ambassador
evaded replying by stating that he had no instructions on that point,
but it could be gathered from his tone that hope was not lost that
the affair icould be settled by negotiation between Austria and Serbia.
As Berthelot also told me, ex-Minister Pichon had an interview with
the Austrian ambassador to day, from which he also gained the im
pression that Austria-Hungary did not intend her step to be regarded
as an unconditional ultimatum.
Sevastopu lo.
(The Minister for Foreign Affairs to the chargd d’affaires in France.)
(Tel. No. 1488.)
St . P e t e r s b u r g , 11/2 4 July.
The communication made by the Austro-Hungarian Government to
the powers on the day following the handing of the ultimatum to
Belgrade leaves the powers only a short period in which to under
take anything for setting aside the complications that have arisen.
Tu order to obviate the incalculable consequences, fateful for all the
1 powers alike, which could result from the mode of action adopted by
the Austro-Hungarian Government, it appears to us indispensable to
prolong the time granted to Serbia. Austro-Hungary, which has de
j clared her readiness to communicate to the powers the results of the
investigation on which her accusations are grounded, ought also to
\ afford them the possibility of forming a judgment concerning the mat
l ter. In the event of the powers being convinced of the justification
i for certain Austrian demands they would be in a position to convey
corresponding advice to the Serbian Government. A refusal to extend
the term of the ultimatum would deprive the step taken by AustroHungary of all effect as regards the other powers and would be con
trary to all international custom.
We instruct Kudascheff (Russian chargd d'affaires in Vienna) to
speak to this effect, and hope that the Government to which you are
accredited will declare its concurrence in our views and immediately
Instruct its representative in Vienna to take action accordingly.
London, Rome, Berlin, Belgrade, and Bucharest Informed.
SAzoNorr
IS
30
O U O D H U
T V \ rO
j
CONGRESSIONAL RECORD.
(The charge d’affaires in France to the Minister for Foreign Affairs.)
(Tel. No. 186.)
P a r i s , 12/23 July.
With reference to my telegram No. 184.
The declarations made by the German ambassador yesterday are
reproduced to-day, although perhaps not in their exact form, by the
Echo de Paris, with comments, in which the threatening character of
this step is emphasized, The ambassador, much concerned at this
indiscretion, saw Berthelot this morning and insisted that his words
by no means bore the threatening character attributed to them. He
declared that Austria had handed her note to Serbia without any
previous discussion of it with Berlin, but that Germany approved of
Austria’s point of view, and that naturally if, as lie expressed it,
“ the arrow was once let fly,” Germany could only be guided by her
duty as an ally. The fact that Baron Sclion has deemed it necessary
to take this new step has to some extent reassured the foreign ministry
as being an indication that Germany does not seek for war in any
case. In consequence the Agence Havas is publishing a communication
from the Germany Embassy in the sense of Baron Schon’s statement of
to-day, in which it is pointed out that the Austrian note has not the
character of an ultimatum, but only means that an answer is de
manded within a given period. The announcement further states that
the German step only had for its object the localization of the AustroBerbian conflict. The revelations of the Echo de Paris caused a
panic of the Bourse to-day. The absence of the President of the
Republic and of the Minister President ( Viviani) prevents the foreign
office for the moment from expressing its opinion definitely regarding
present events. Public opinion and the press, without distinction of
parties, are extremely excited by these even ts; even Jaures strongly
condemns Austria's action, which threatens to let loose a general war.
Sevastopu lo.
(Foreign Minister to the ambassador in France.)
(Tel. No. 1508.)
S t . P e t e r s b u r g , 13/26 July.
I am telegraphing to Vienna as follows :
“ To-day I had a long and very friendly conversation with the
Austro-Hungarian ambassador. After I had examined with him the
ten demands addressed to Serbia, I remarked that, apart from the any
thing but dexterous form in which they were drawn up, some of them
were absolutely impossible of fulfillment, even if the Serbian Govern
ment should declare its readiness to accept them. For example, points
1 and 2 could not be carried out without an alteration of the Serbian
laws regarding the press and assembly, to which the approval of the
Skupstchina could scarcely be obtained; on the other hand, the ful
fillment of points 4 and 5 might have extremely dangerous results and
even call forth terrorist attempts against members of the royal house
and against Pashitch, which could scarcely be Austria’s intention.
As to the other points, it appeared to me that, subject to certain
alterations of details, it would not be difficult to find a basis for an
understanding if the accusations they contained could be supported
by adequate proof.
“ In the interests of the maintenance of peace, which, according to
Szapary’s words, Austria desired as sincerely as the other powers, it
was essential to put an end as soon as possible to the present state of
tension. To this end it seemed to me very desirable that the AustroHungarian ambassador should be empowered to enter into a private
exchange of views with me for the purpose of making a mutual re
draft of some of the articles in the Austrian note of the 10th (23d) of
July. In this way it would probably prove possible to find a formula
acceptable to Serbia, and at the same time affording Austria satisfac
tion regarding her most important demands. Speak in the sense of
this telegram in a cautious and friendly manner with the minister
for foreign affairs. Berlin and London informed.
“ S a x a n o f f .”
fThe charge d’affaires in France to the Minister for Foreign Affairs.)
(Tel. No. 187.)
P a r i s , 13/26 July.
To-day the German ambassador again visited the substitute minister
for foreign affairs (Bienvenu-Martin) and made to him the following
statement: “ Austria has declared to Russia that she seeks no terri
torial gains and does not threaten the integrity of Serbia. Her sole:
object is to secure her own peace and to maintain order (faire la
police.) [The words in italic reveal aptly the Austro-German idea of
how to handle the conflict with Serbia, but which, however, Russia
has never accepted.] In consequence of this it depends upon Russia to
obviate war. Germany feels herself at one with France in the earnest
desire to preserve peace, and trusts that France will use her influence
In Petersburg in a moderating sense.” The minister observed that
Germany for her part might do the same in Vienna, especially after
the proof Serbia had given of her desire to be conciliatory. The
ambassador replied that that seemed to him impossible, as Germany
was determined not to Interfere in the Austro-Serbian quarrel. The
minister then asked whether the four powers, England, Germany, Italy,
and France, could not take steps in Petersburg and Vienna, as it was
76876— 11
in effect a case of a quarrel between Russia and Austria. The am
bassador appealed to his lack of instructions on this point. Finally,
(he minister decided to accept the German proposal as the minister
president was absent. Unfortunately, Berthelot was not present at
this conversation. [This sentence was omitted in the Orange Book
because it would have weakened Berthelot’s view as expressed in the
following telegram from Paris, No. 188 of July 26th, to the effect
that Germany was seeking to intimidate France.]
Sevastopu lo.
( llie charge d’affaires in France to the Minister for Foreign Affairs.)
(Tel. No. 188.)
P a r i s , 13/26 July.
Continuation of my Tel. No. 187.
berthelot, the director of the political department, declared that
in his personal opinion the successive German demarches in Paris
were intended to intimidate France [compare note to the telegram from
Paris, No. 187, of July 26th] and to secure her intervention in
Petersburg. Taking all the facts together, and in view of the whole
attitude of Germany and Austria-Hungary, he inclines to the opinion
that these powers are striving after a brilliant diplomatic victory, but
do not desire war in any case, although if it comes to extremes they
will not shrink from it. He considers emphatic and energetic action
by England and Berlin useful.
Sevastopu lo.
(The charge d’affaires in France to the Foreign Minister.)
(Tel. No. 189.)
P a r i s , 13/26 July.
The director of the political department Informed me that the
Austrian ambassador, as he informed him of the contents of Serbia’s
reply to the ultimatum, did not conceal his astonishment that Giesl
(the Austro-Hungarian minister in Belgrade) had not been satisfied
with it. Serbia’s complaisance must, in the opinion of the director of
the political department, have a very favorable effect.
S evastopu lo.
(The Minister for Foreign Affairs to the ambassador in France.)
(Tel. No. 1521.)
S t . P e t e r s b u r g , U/fg July.
With reference to Sevastopulou’s telegram No. 187 and mine No.
1508. Instructed by his Government, the English ambassador asked
me whether Russia is agreeable that England should take the initiative
and summon the representatives of France, Germany, and Italy to a
conference in London in order that the four powers may discuss the
finding of a way out of the present situation.
I replied to the ambassador that, although my negotiations with the
Austrian ambassador had begun favorably (Vienna regarded a re
drafting with Russian help of the ultimatum which she had already
handed to Serbia as inadmissible, but was ready to negotiate with
Petersburg regarding it. This readiness of Austria-Hungary, which is
so plainly recognizable in the further course of events, and which was
attributable to Germany’s advice, is to be seen from telegram No. 1592
from Petersburg, which was suppressed), I had received no reply to
my proposal regarding a combined redrafting of the note. I was
therefore ready to accept this or any other English proposal calculated
to effect a peaceful settlement if our direct negotiations with the
Vienna cabinet lead to no result. I t was, nevertheless, necessary for
me to duly set aside a misunderstanding which had crept into the
reply of the substitute minister for foreign affairs (Bienvenu-Martin)
to the German ambassador. If there is a question of exercising a mod
erating influence in Petersburg, we reject it in advance (Sazanoff
measures with two sorts of measures, as he and his allies constantly
urged that Germany should exercise a moderating influence of this sort
in Vienna. Compare the suppressed telegram No. 201 of July 28 from
Paris and No. 203 of July 29), as we have adopted a standpoint from
the outset which we can in no way alter, as we have already shown
ourselves favorable to all of Austria’s acceptable demands.
The ambassadors in England, Germany, Austria-Hungary, and Italy
informed.
Sazon gff.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1524.)
S t . P e t e r s b u r g , U/27 July.
Referring to my telegram No. 1521.
I have made myself acquainted with the reply which the Serbian
Government handed to Baron Giesl. It exceeds all our expectations
by its moderation and the readiness (expressed) to give Austria the
fullest satisfaction. Unless the Vienna cabinet is seeking for a pre
text for an expedition (in the Orange Book the word “ expedition ” is re
placed by the word “ war.” The change effected by this one word
makes clear the difference between the Russian and the Austrian view
of the dispute) against Serbia, we do not understand of what Austria’s
further demands could consist. Berlin, Rome, Vienna, London, Con
stantinople informed.
Bazonoff.
•0
*L
c r a o a a a q v K o i s s a a ^ m o o ___________________ o s
CO N G R ESSIO N AL R ECO RD .
(The charge d’affaires in France to the Foreign Minister.)
(Tel. No. 190.)
(In the Orange Book the whole of this telegram is falsified, and reads
there : “ The German ambassador discussed the situation anew and in
detail to-day with the director of the political department. ih e
ambassador strongly insisted upon excluding any sort of possibility
of mediation or of a conference.” )
P a r i s , .11/27 July.
Referring to my Tel. No. 187.
The conversation referred to in this telegram took place at 5 o’ clock.
At 7 o’ clock the German ambassador came to the ministry for the
second time and discussed the situation in detail with Berthelot to try
and find a way out.
He insisted upon ruling out all possibility of
mediation or of a conference, but expressed the view that perhaps
England could give advice to Vienna.
He did not, however, make it
clear whether this idea originated with his Government or whether it
was his own. Finally he expressed the wish that a short communica
tion regarding the Franco-German negotiations should be published
which should have as its object the maintenance of peace, and this has
been done to-day.
London informed.
Se v a s t o p u l o .
(The charge d’affaires in France to the Foreign Minister.)
(Tel. No. 191.)
P a r i s , 1 4 /2 7 July.
The French ambassador in Switzerland insists upon the desirability
of filling the post of Russian military attach6 in Switzerland as soon
as possible.
Se v a s t o p u l o .
(The ambassador in France to the Foreign Minister.)
(Tel. No. 192.)
P a r i s , 1 4 /2 7 July.
Your telegram No. 1508 shows that you did not yet know the Serbian
Government's reply. The telegram sent to me from Belgrade bearing
this news was 20 hours on the way. The-pressing telegram of the
French Foreign Minister sent to Vienna at 11 a. m. the day before yes
terday with the order to maintain our standpoint was only delivered
at 6 o’ clock. Here there is no doubt as to an intentional delay on the
Austrian lines.
I z v o l s k i.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 193.)
P a r i s , 1 4 /2 7 July.
Having just returned I have taken over the conduct of the embassy.
I z v o l s k i.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 194.)
P a r i s , 1 4 /2 7 July.
The President of the Republic has given up his visit to Copenhagen
and Christiania and returns here on Wednesday.
I z v o l s k i.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 195.)
P a r i s , 1 4 /2 7 July.
Immediately after my return to Paris I had a discussion with the
acting minister for foreign affairs in presence of Berthelot and Abel
Ferry. (The undersecretary of state in the French foreign- office. Left
out because of the suppression of the second half of this telegram.)
They confirmed for me the details of the steps taken by the German
ambassador and communicated to you by Sevastopulo in his telegrams.
This morning Baron Schon confirmed his statement of yesterday in
writing, as follows : “ (1) Austria has informed Russia that she seeks
no territorial gains and does not threaten the integrity of Serbia.
[Although the omission of this word does not alter the general sense,
it apparently deprives the Austrian assurances of all point.] Her sole
object is to preserve her own tranquillity. (2) It therefore rests with
Russia to obviate war. (3) Germany and France, being absolutely at
one in the ardent desire not to disturb the peace, should influence
Russia in a moderating sense.” In this connection Baron Schon very
particularly underlined the statement as to the solidarity of Germany
and France. The acting minister for foreign affairs was persuaded
that the object of the above-mentioned action on the part of Germany
yra* undoubtedly to promote disunion between Russia and France, to
Induce the French Government to make representations in Petersburg,
and in this way to isolate our ally, and in the event of war to divert
the responsibility from Germany, who, to all appearance, would have
done all she could to maintain peace and to place this responsibility
upon Russia and France. To-day at 2 o’clock, prior to the taking by
the Austrian ambassador of the step described in my telegram No. 1S6,
try,. German ambassador visited Abel Ferry and, in the name of his
Government, made a new proposal for the “ intervention of France and
Germany between Russia and Austria.” Abel Ferry replied that he
would bring this proposal to the knowledge of the acting foreign min7887(1— 11
ister, and only observed that it would be more to the point to leave
intervention to the four powers, and to that Baron Schon personally
agreed. The acting foreign minister told me that he did not quite
understand this new step of Baron Schon’s ; that he mistrusted it, and
merely intended to tell him in the morning that he would receive a
reply from the foreign minister when he returned to Paris on Wed
nesday. For the rest, I was surprised at the correct understanding of
the situation manifested by the acting minister and his assistant and
to see how firm and tranquil they were in their determination to ex
tend to us their fullest support and to avoid the slightest appearance
of any lack of unity between us. [The second half of this telegram
was suppressed in the Orange Book because it proved the repeilant
and in no way justified mistrustful attitude of France, which pre
cluded in advance the possibility of success attending the steps taken
in Paris and Germany.]
Iz v o l s k i.
(The ambassador in France to the Minister for Foreign Affairs.)
(Tel. No. 190.)
P a r i s , i 4 /2 7 July.
Instructed by his Government, the Austrian ambassador here in
formed the acting foreign minister that Serbia’s reply was considered
unsatisfactory in Vienna, and that to-morrow, Tuesday, Austria would
take “ energetic steps ” to compel Serbia to give her the necessary
guaranties. In reply to the minister’s query as to what these steps
would consist of, the ambassador said that he had not been precisely
informed on that point, but that it might be a case either of an ulti
matum, of a declaration of war, or of a crossing of the Serbian frontier.
[In the Orange Book the end of the telegram is as follows: “ But it
might be a case of a crossing of the Serbian frontier, of an ultimatum,
or even of a declaration of war.” Therefore subsequently the last
eventuality is represented as a particularly severe means of exerting
pressure.]
I z v o l s k i.
(The ambassador in France to the Minister for Foreign Affairs.)
(Tel. No. 197.)
P a r i s , 1 4 /2 7 July.
[This telegram was suppressed in the Orange Book because it con
stituted unpleasant proof that Germany’s attitude was not uncondi
tionally warlike.]
Jules Gambon (French ambassador in Berlin) telegraphs from Berlin
that in reply to his question as to what attitude Germany would adopt
toward a partial mobilization by Russia, Jagow (German secretary of
state for foreign affairs) replied that a mobilization of that kind would
not result in German mobilization, but that if Russia attacked Austria,
Germany would immediately reply by attacking Russia.
I z v o l s k i.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1528.)
S t . P e t e r s b u r g , 15/28 July.
I am telegraphing to London as follows :
From my conversations with the German ambassador I gain the im
pression [In the Orange Book the words “ more <md more ” have been
subsequently added] that Germany has previously become a party to
Austria-Hungary’s unyielding attitude. [That is to say, that Germany
shared Austria’s opinion as to the symptomatic significance of the
Serajevo murder as a danger to the monarchy.] The Berlin cabinet,
which could have arrested the development of the entire crisis, appears
to exercise no sort of influence upon its ally. The ambassador here
regards the Serbian reply as unsatisfactory.
This attitude of Germany’s appears to me extremely disquieting, and
I am of opinion that England more than any other power is in the
position to undertake in Berlin the necessary steps to exert correspond
ing influence. Without doubt the key to the situation is in Berlin.
[By means of a very clever rearrangement these words, instead of
being placed at the end and in connection with the steps recommended
to be taken by England in Berlin, are put into the first sentence,
which then reads : “ My private talks with Pourtal6 s constantly
strengthen my impression that the key to the situation is in Berlin,
and that Germany is in sympathy with Austria’s irreconcilable atti
tude.” This was to create the impression that the true cause for
Austria’s unyielding attitude was to he found in Berlin.]
Sazo n o ff.
(The Minister for Foreign Affairs to the ambassador in France.)
(Tel. No. 1538.)
St . P e t e r s b u r g , 15/28 July.
I am telegraphing to London with respect to my telegram No. 1521.
With regard to a declaration of war against Serbia, my direct negotia
tions with the Austro-Hungarian ambassador are apparently purpose
less. (The Orange Book reads: “ In view of hostilities between
Austria-Hungary and Serbia, it is necessary that England,” etc. There
is here an intentional double falsification. On the one hand no hostili
ties had then taken place [compare also the first italicized sentence in
the telegrum from Petersburg No. 1544 of July 29], and on the other
V
ec
32
aaooaa ivnoissjihsnoo
CONGEESSIGNAL RECORD.
hand it is therefore Petersburg and not Vienna which first rejected
the idea of direct negotiations between the two cabinets. 1 it is neces
sary that England should initiate mediatory action with all possible
speed, and that Austria’s military action against Serbia should be sus
pended without any delay, otherwise mediation only serves as a pretext
to greatly postpone the solution of the question and afford Austria
time to completely smash Serbia. [The Orange Book states further:
“ and to assume a commanding position in the Balkans.” This addi
tion has for its purpose to represent subsequently as a question of
European equilibrium the Austro-Serbian conflict, which, in the view of
most of the great powers, was capable of localization.]
Sazon off.
(The Minister for Foreign Affairs to the ambassador in France.)
(Tel. No. 1539.)
S t . P e t e r s b u r g , 15/28 July.
I am telegraphing to Berlin—
In consequence of Austria-Hungary’s declaration of u>ar against
Serbia, we shall announce to-morrow a mobilization of the Odessa,
Kieff, Moscow, and Kasan military districts. (The whole telegram is
suppressed in the Orange Book because it indisputably shows that the
Serbian and Russian mobilizations were far more extensive than the
military measures previously effected by Austria-Hungary against Serbia
alone, and that therefore Russia could in no way feel that she was
threatened by Austria.) In bringing this to the notice of the German
Government repeat that Russia has no aggressive intentions against
Germany. Meanwhile our ambassador in Vienna is not being recalled.
London, Vienna, and Rome informed.
Sazon off.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1540.)
S t . P e t e r s b u r g , 15/28 July.
Ton can communicate the contents of my telegram, Ho. 1589, to the
Government to which you are accredited.
London, Vienna, and ROme informed.
Sazon off.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 198.)
P a r i s , 15/28 July.
Your telegram, Ho. 1521, received. I deem it my duty to make clear
that, as results from my conversation yesterday at the Quai d’ Orsay,
the acting French minister for foreign affairs did not for a moment
admit the possibility of exercising a moderating influence in Peters
burg [here again two sorts of measures are employed. Compare note
to telegram from Petersburg, No. 1521, of July 27, and the concluding
remarks in the suppressed telegram from Paris, No. 20, of July 28],
but only retorted to the German ambassador that it was not Russia
but Austria who threatened peace, and that in any case if it was a
question of exerting a moderating influence, this must be done not
only in Petersburg but before all in Vienna. As a result of his con
versation with Baron Schon, the minister declined to accept the Ger
man proposal.
I z v o l s k i.
(The amb-ftssador in Paris to the Foreign Minister.)
(Tel. No. 201.)
(This entirely suppressed telegram is exceedingly valuable in regard
to forming a Judgment concerning Germany's attitude during the crisis.
With regard to the impossibility of the exertion by Germany of too
strong a pressure In Vienna, compare note to the telegram, No. 1521,
of July 27, from Petersburg, and the suppressed telegram No. 198, of
July 28, from Paris.)
P a r i s , 15/28 July.
The German ambassador again visited the acting foreign minister
to-day and declared that although he had no communication or pro
posal of an official nature to make, he nevertheless wished to talk with
him regarding the situation and the means of avoiding steps which
would be incapable of being recalled.
He added that Germany
ardently desired to icork xoitli France for the maintenance of peace.
In reply to the minister’s observation that England had put forward
a project for mediation which France and Italy had already accepted,
Baron Schon replied that Germany teas ready to identify herself with
this action, provided that it did not take the unacceptable form for
Austria of a tribunal of arbitration or of a conference. The minister
replied that if Austria only raised objection to the form the same
object could be attained by other means, and that it would be very
easy for the German Government to insist that Austria should afford
the powers time in which to find a conciliatory exit from the impasse.
Baron Schon replied that he had no instructions on this point, but
knew that Germany was not in a position to exert pressure on Aus
tria. In this connection the ambassador complained of the French
press, which unjustly accused Germany of instigating Austria. Accord
ing to what he said, it is true that Germany approves of Austria’s
action, but that she had not been informed in advance of the con
tents of the Austrian note. The German Government could not inter76876— 11
fere too brusquely with Austria, who must obtain guaranties as regards
Serbia. Finally the ambassador again affirmed that Germany was
ready to cooperate xoitli the other powers for the maintenance of peace.
I z v o l s k i.
(The Minister for Foreign Affairs to the ambassador in France.)
(Tel. No. 1544.)
S t . P e t e r s b u r g , 16/29 July.
M ilh reference to my telegram No. 1521, I am telegraphing to
Berlin. The German ambassador informed me on behalf of the tin
perial chancellor that Germany had not ceased and will not cease to
exercise a moderating Influence in Vienna and would continue to do
so despite the declaration of war. Up to this morning no news has
been received of the crossing of Austrian troops onto Serbian terri
tory. [Compare note to telegram No. 1538, of July 2 S.]
I requested the ambassador to convey rny sincere thanks to the
chancellor for the friendly character of his communication. I
acquainted him with the military measures that Russia has taken,
informing him that these are in no way directed against Germany,
neither constitute aggressive measures with regard to Austria. The
steps takeu by us are to be explained by the mobilization of a large
part of the Austrian Army.
'to the ambassador’s proposal to continue direct negotiations with
Aienna 1 replied that we wore ready to do so if Germany’s advice
found an e«r in Vienna. At the same time I declared that Russia is
prepared to accept the proposal of a conference of the four powers, with
which Germany does not appear quite sympathetic. The best method
of utilizing all means to a friendly solution appeared to us to be
parallel negotiations of the four powers, England, France, Italy, and
Germany, and our simultaneous direct conversations with the A
rienna
cabinet, as had been resorted to in the moments of greatest tension
during the crisis of last year.
In face of the Serbian concessions it appeared to us to be not
difficult to come to an understanding regarding the uncertainty still
existing with respect to other points if Austria showed good will and
the powers [in "the Orange Book “ Germany ” is substituted for “ the
powers.” Thus here again there is the attempt to throw the whole
responsibility upon Germany similarly as in the displacement called
attention to in the note to telegram No. 1528 of July 28] used their
influence in a pacifying sense.
London, Nisch, Vienna, Rome, Bucharest, and Constantinople in
formed.
Sazon off.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1547.)
P e t e r s b u r g , 16/29, July.
I beg you to communicate the contents of my telegram No. 1544 to
the Government to which you are accredited. I am also telegraphing
a similar message to London and Nisch. [The communication of this
telegram to the Serbian Government certainly did not tend to move
It to a change of course.]
S azon off.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1548.)
P e t e r s b u r g , 16/29, July.
With reference to my telegram No. 1544.
At the time of my last conversation with the German ambassador I
had not received telegram No. 105 [telegram No. 105 is as follows:
“ Vienna, 15/28 July. I have just spoken In a vei'y friendly manner
with Berchtold. The Austro-Hungarian ambassador can be given full
power to effect a private exchange of views with you regarding a com
bined redrafting of some of the articles in the Austrian note. I de
clared that such a solution of the question was desirable for Austria
herself, as it would improve her relations with Russia and would offer
substantial guaranties for the future relations of the monarchy with
Serbia.
I directed Berchtold’s attention in this connection to the
danger to the peace of Europe which would result from an armed
conflict between Austria and Serbia. The foreign minister replied that
he was fully conscious of the seriousness of the situation and of the
advantages to be derived from a free exchange of opinions with us, but
that the Austro-Hungarian Government, which had only decided very
unwillingly to take harsh measures against Serbia, could not at present
give way and enter into a discussion of the text of its note. The
crisis had become so acute and public opinion in the country was so
excited that the Government, even if it so desired, could not undertake
such a step, the more so because Serbia’s reply proved the insincerity
of her promises regarding the future. The foreign minister xcas evi
dently greatly disturbed by the news of Montenegro’s mobilization and
expressed his astonishment at this measure, which, in his opinion, there
was nothing to justify. I have gained the impression from this con
versation that the Austro-Hungarian Government has m present decided
t
to deal Serbia a blow in order to enhance its influence in the Balkans
and at home, and that it counts upon Germany’s support and the love
of peace of the other powers in order to localize the c o n f l i c t [Siini-
wo/
■craooan
d u JJ.
4«44<»
uuuoja
-H
>u yuu ^auqs.idpa
gj
pavq
t v n o is k iih d s a k )
?A‘
.
CONGRESSIONAL RECORD.
33
lar telegrams to Berlin, PariB, London, and Ntseh. Rchebeko.] from
our ambassador in Austria, from which it appears that the Vienna Cabi
net refuses to enter into a change of views with us. [In opposition to
this assertion it must be emphasized that Austria nevertheless strove for
the localization of her conflict with Serbia, and that her refusal to un
dertake with Russia a redrafting of the text of the note to Serbia, as
asserted by Snzonoff, did not extend to the question of direct negotia
tions with the Petersburg Cabinet. Compare note to telegram No.
1521 of July 27 and the suppressed telegram No. 1592.] In conse
quence of this we leave completely to England the initiative as regards
the steps she may deem to be useful.
Vienna, Rome, Berlin, Nisch, Constantinople, and Bucharest in
formed.
S a zo n o f f .
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1551.)
P e t e r s b u r g , 16/25, July.
The German ambassador has communicated to me to-day the decision
of bis Government to mobilize if Russia does not stop her military
preparations. We began these only because of the mobilization already
begun by Austria of eight army corps, and because she was evidently
not ready to accept any method for a friendly solution of her conflict
with Serbia.
As we can not accede to Germany’ s wish, nothing remains for us
but to hasten our own warlike preparations and to reckon with the
probable Inevitability of war. Inform the French Government of this,
and at the same time thank it for its declaration made In its name
by the French ambassador that we can fully rely upon the support of
our ally France.
Under present circumstances this declaration is
especially valuable for us. It fa very desirable that England also
without loss of time should associate herself with France and Russia, as
it is only thus that she can succeed in preventing a dangerous altera
tion in the European balance. [The extraordinary range of the whole
of this communication of SnzonofFs is illuminated by Izvolski’s answer.
See the suppressed telegrams from Paris Nos. 208, 209, and 210 of
July 30.]
London telegraphed to In like terms.
Sa z o n o f f .
(The Foreign Minister to the ambassador in France.)
(Tel. No. 304.)
P e t e r s b u r g , 18/29 July.
I urgently request you to communicate to the French Foreign Min
ister the following telegram from the French ambassador in Peters
burg: The German ambassador has just informed Sazonoff that if Russia
dace not stop her military preparations the German army will be
ordered to mobilize. Sazonoff replied that the Russian preparations
were occasioned by (I) Austria’s unyielding attitude; (2) the fact that
eight Austrian army corps had already been mobilized; (3) the tone in
which Count PourtaUs made his communication has caused the Russian
Government to order to-night the mobilization of the IS army corps
destined to act against Austria. [Compare note to the suppressed
telegram No. 1539, of July 28. In that telegram Sazonoff states the
reason for the Russian mobilization to be not the toDe of the German
ambassador’ s communication but Austria’s declaration of war against
Serbia.]
Sazon off.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 202.)
P a r i s , 16/29 July.
THmvcnu-Martin, the Acting Foreign Minister, told me that this
morning the German ambassador made a communication to him, em
ploying practically the following expressions: “ Germany is continuing
her endeavors in Vienna to cause Austria to agree to a friendly ex
change of opinions which should indicate the object and the extent of
the steps undertaken by her and concerning which Germany has not so
far been exactly informed, The declaration of tear will not stand in
the way of this exchange of opinions. Germany hopes to receive during
the course of these negotiations explanations which will satisfy Russia.”
Finally, Baron Schbn again protested against the assertion that Ger
many was encouraging Austria to be unyielding.
I zvoi.s k i .
(The ambassador in France to the Foreign Minister.)
(Tel. No. 203.)
P a r i s , 18/29 July.
Apropos of the arrival of the President of the Republic the foreign
minister has prepared a short cxposA of the situation in approximately
the following words: Austria, which fears internal disintegration,
utilized the murder of the archduke as a pretext for demandng guar
antees which might eventuate in the occupation of Serbia’ s military
communications, and therefore of Serbian territory. Germany is sup
porting Austria, and declares that as we have received the assurance
vhat Austria seeks no teimitorial gains [a tendentious omission in
tended to cut away the grounds of the German argument and to justify
76870— 11------ 5
the employment further on of the expression “ sophism.” It is the
same tendency as has been called attention to in the note to telegram
No. 195 from Paris of July 27] the maintenance of peace entirely de
pends on Russia because it turns upon the necessity for localizing the
Austro-Serbian affair; that is, the punishment of Serbia for her former
policy and the giving of guarantees for the future.
Germany deduces from this that pressure in a moderating sense must
be exercised in Petersburg. This sophistry is rejected both in Paris
and in London. In Paris Baron Schon sought in vain to move France
to bring influence to bear on Russia in unity with Germany in the in
terests of peace. The same endeavor was made in London. In both
capitals the reply was that pressure must be exerted In Vienna for the
excessive demands of Austria, her refusal to discuss the limited reser
vations made by Serbia, and her declaration of war threatened to bring
about a general war. France and England positively (this word was
probably suppressed in the Orange Book because public opinion would
scarcely have shared this view, the more so as Germany had been con
stantly called upon to exert a moderating influence in Vienna. Com
pare note to telegram No. 1521 of July 27 and note to the suppressed
telegram No. 201 of July 28) could not exercise any moderating influ
ence in Russia, which had hitherto manifested the greatest moderation,
in that she had above all things advised Serbia to accept all the condi
tions In the Austrian note that it was possible to accept. To-day Ger
many alone seems to object to the Idea of Influencing Russia, and in
clines toward exercising mediatory action in Petersburg and Vienna,
but at the same time both Germany and Austria seek to prolong the
present situation. Austria openly pursues dilatory negotiations in
Petersburg. Simultaneously she adopts active measures, and if these
are tolerated her claims will correspondingly Increase. It Is very de
sirable that Russia should give her full support to Sir E. Grey’s media
tory project. Otherwise, under the pretext of obtaining “ guaranties,”
Austria can bring about an actual change in the territorial status quo
In eastern Europe.
I zvo esk i .
(The ambassador In France to the Foreign Minister !
(Tel. No. 204.)
P a r i s , 16/K ,«ly.
The firm altitude taken up by the French press continues. It passes
severe judgment upon the Austrian attack and upon Germany’s manifest
share of blame for it, and unhesitatingly declares that this touches us,
and that toe can not remain unsympathetic. As regards solidarity with
us, this question is not once discussed but is taken as a matter of
course. Every journalist expresses himself in this sense, including
such prominent personages belonging to the most diverse parties as
Pichon. CUmenceau, and even Jatirds, and also Hervd, the father of
anti militarism. [When it Is remembered that .Taurus was shortly after
wards murdered, the little word “ even” used in this suppressed tele
gram gains an almost ominous sound.]
I z v o i .s k i .
(The ambassador in France to the Foreign Minister.)
(Tel. No. 200.)
P a r i s , 16/29 July.
When the President returned to Paris he was received at the railway
station and in the streets with sympathetic demonstrations from the
assembled crowd. Margerie (political director in the French foreign
office) told me that the, President from his conversations during Ms
journey with prefects and politicians, had become, convinced of the firm,
energetic, and at the same time calm state of public opinion, which
plainly formed a correct estimate of the true significance of events.
[The true significance of events therefore lay for the French nation
much deeper than the apparent cause, viz, the Austro-Serbian conflict.]
The same attitude reigned among a large section of the radical social
ists. The Government attaches no importance to the antimilitary
demonstrations of the revolutionary party and intends to take ener
getic measures against it. Our military attach6 reports in detail re
garding the preparatory military measures. Feeling runs high in mili
tary circles and in the chief command. I report regarding the press In
a special telegram.
IZ V O L S K I.
(The ambassador In France to the Foreign Minister.)
(Tel. No. 207.)
P a r i s , m/29 July.
Vlviani has just confirmed to me the firm determination of the French
Government to act in agreement with us. This decision is supported
by the widest circles and by al! parties, including the radical socialists,
who have handed him a resolution giving expression to the absolute
confidence and the patriotic feeling of their group. Vivian! telegraphed
urgently to London, immediately after his return to Paris, to the effect
that in consequence of the breaking off of direct negotiations between
Petersburg and Vienna it is indispensable that the London cabinet
should repeat as quickly as possible its proposal for mediation by the
powers in some form or another. Vlviani received the German ambas
sador in my presence to-day, who repeated his assurances as to Got
i j
"ci } u >:>:■! h
;
COM
3 4
i
Y M o is s n m m o p
h ie s s io n a t , r e c o r d .
many's peaceful Intentions. In reply to Viyiani’s remark that if Germany
desires peace she should hasten to associate herself with England’s
proposals for mediation, Baron Schon said that Austria shrank from
the use of the word “ conference ” or “ arbitration.” Viviani remarked
that it was not a question of words and that it would not be difficult
to devise some other form of mediation. Baron Schon is of opinion
that in order to assure success for the negotiations between the powers
it is necessary to ascertain what Austria intends to demand from Serbia.
Viviani replied that it would be very easy for the, Berlin cabinet to
interrogate Austria on that point, but that meanwhile the Serbian note
In reply would be the subject of examination. Finally Baron Schon
complained of France’ s military preparations and said that in this case
Germany would he compelled to adopt similar precautions. (The sup
pression of this sentence marks the propaganda that had already com
menced with the object of placing on Germany the responsibility for the
outbreak of war. Telegrams Nos. 210, 214, 215, 21S, 219, 220, 222,
223, 225, 226 from Paris and Nos. 1554, 1637, and 304 (Paldologue’s)
from Petersburg have the same effect.) Viviani on his part declared
that France honestly desired peace but at the same time was firmly
determined to act in full agreement with her allies (in the Orange
Book the words and friends are added here. This was done later for
the sake of England; nevertheless the original form of the Russian
telegrams from Paris indicates that as a matter of fact French policy
rested from the outset on the English alliance) and Baron Schon could
convince himself that this decision was finding the liveliest support in
the country. This evening Viviani has forbidden a projected antiwar
meeting of the revolutionary party.
IZ V O L S K I.
(The Foreign Minister to the ambassador in France.)
(Tel. No. 1554.)
P e t e r s b u r g , 17 /S July.
O
With reference to my telegram No. 1521, I am telegraphing to Berlin
as follow s:
(1) The German ambassador, who has just visited me, asked if we
could be satisfied with Austria’s promise not to violate the integrity of
Serbia. I replied that this assurance did not suffice. At the urgent
request of the ambassador that I should state the conditions on which
we were still ready to suspend our military preparations, I dictated to
him for urgent dispatch to Berlin the communication reproduced below
in (2). I request you to telegraph at once what attitude the German
Government adopts toward this new proof of our readiness to do what
is possible toward a friendly solution of the question, as we can not
allow negotiations of this nature merely to afford Austria and Germany
a gain of time. (The Orange Book adds the words here: “ in which to
make their military preparations.’
Compare with this the note to
telegram No 207 of July 29.)
(2) “ If Austria admits that the Austro-Serbian question has assumed
the character of a European question and declares her readiness to
eliminate from her ultimatum those points which violate the sovereign
rights of Serbia, Russia undertakes to suspend her military prepara
tions.” [This formula of Sazonoff’s signifies nothing less than a demand
that Austria should take back her ultimatum to Serbia, a condition
which wan naturally unacceptable for Vienna.]
London and Vienna informed.
Sazon off.
(The Foreign Minister to the French ambassador.)
(Tel. No. 1555.)
P e t e r s b u r g , 17/30 July.
Very urgent. I refer to my telegram No. 1551.
Until we receive a thoroughly satisfactory reply from Austria through
the German Government, we shall continue our military preparations.
This is communicated to you very confidentially. [Comment is super
fluous. In connection with the following telegram that was suppressed
In the Orange Book this declaration is Important as regards fixing the
commencement of the Russian general mobilization.]
Sa zo n o ff.
be to the purpose that Russia, so far as the measures of a defensive and
precautionary nature which it has deemed necessary to adopt will per
mit, should not take any direct steps which would serve Germany as a
pretext for ordering the general or partial mobilization of her forces.”
[The whole significance of this suppressed telegram is revealed in
combination with telegram No. 1551 from Petersburg of July 29. and
with the two following and likewise suppressed telegrams, Nos. 209 and
210, from Paris on July 80.]
IZ V O L S K I.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 209.)
P a r i s , Tt/SO July.
Continuation of my telegram No. 2 0 8 .
The contents of the telegram to the French ambassador in Petersburg
were immediately transmitted to London, whereby Paul Cambon was
instructed to confer with Grey as to the fixing of the combined attitude
of France and England concerning which these two powers, in conse
quence of the general understandhig existing between them, have to
deliberate whenever a period of political tension arises. [Cambon’s
query is made on the grounds of the notes exchanged between Cambon
and Grey on the 22d and 23d November, 1912, which constituted tbo
foundation of the politico-military agreement between England and
France.]
IZ V O L S K I.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 210.)
P a r i s , rt/SO July.
Continuation of my telegram No. 209.
Margerie, with whom I have fust spoken, said that the French Got'ernment does not wish to interfere in our military preparations, but
regards it as highly desirable that these, having regard to the negotia
tions for the maintenance of peace that are still continuing, should be
as little public and challenging in character as possible. The war
minister has developed the earns idea to our military attachA, and
said that we could declare that in the higher interests of peace we are
ready temporarily to delay our preparations for mobilization, since
this would not prevent us from continuing our preparations, and indeed
from intensifying them, but we should have to refrain from the possible
greater movements of troops. A ministerial council is to take place at
G O under the presidency of Poincard, immediately after which I will see
.S
Viviani. [This suppressed telegram is Irrefutable proof that both in
Petersburg and in France the further negotiations for the maintenance of
peace, including Grey’s proposals and Germany’s endeavors in Vienna,
oDly served as a screen for the military preparations which were being
secretly made in Russia and In France.]
I z v o l s k i.
(The ambassador in France to the Foreign Minister.)
(Tel. No. 212.)
P a r i s , 17/SO July.
The Ministerial Council, presided over by Poincard, has approved of
the telegram sent to the French Ambassador in Petersburg the previous
night and mentioned in my telegram No. 208.
I z v o l s k i.
(The Foreign Minister to ambassador in France. )
(Tel. No. 1583.)
P E T E R S B U R G , 18/31 July.
No. 1. With respect to my telegram No. 1554.
The English Ambassador communicated to me in the name of his
Government the wish of the Ia>ndon Cabinet to make some change
In the draft which I proposed to the German Ambassador yesterday. I
replied that I accepted the English proposal, and send you the altered
draft in No. 2.
Sazo n o ff.
(Foreign Minister to ambassador in France.)
(Tel. No. 1582.)
P e t e r s b u r g , 18/31 July.
(The ambassador in Paris to the Foreign Minister.)
No. 2. If Austria agrees to stop the advance of her army on Serbian
(Tel. No. 208.)
territory and admits that the Austro-Serbian conflict has become a ques
P a r i s , 17/S July.
O
tion of general interest for Europe, and therefore concedes that the
Great Powers may examine into what satisfaction Serbia can afford
Your telegram No. 1551 received.
I received it during the night, and immediately, i. e., at 3 a. m., com the Austro-Hungarian Government without detriment to her rights
municated it to the foreign minister. At my instance our military as ft sovereign state and to her independence, Russia undertakes to
attachi likewise communicated it to the minister for war. Poincard, maintain her waiting attitude. [That Sazonoff did not take his own pro
Viviani, and the War Minister Messimy immediately held a discussion posal seriously is clearly evidenced by the follow ing: The telegram con
at the fllysde, as a result of which a telegram teas sent to the French taining Sazonoff’s draft was dispatched from Petersburg at 10.10 on the
ambassador in Petersburg in approximately the following sense. The evening of July 31. But by the last sentence of the Paris telegram No.
telegram begins with an allusion to the text of the instructions fur 215 of July 31, which is entirely suppressed in the Orange Book, it is
nished to him from the battleship “ France,” and then states: “ The plain that the French Ambassador PRl6 ologue telegraphed already on the
French Government is ready to fulfill all Its obligations as an ally. I morning of July 31 to his Government: “ Full mobilization of the Russian
It is of opinion, however, that at the present moment, when negotia j Army authorized.” It can surely no longer be disputed that the Rustiens are still in progress between the less interested powers, it would I sian Government had thereby irrevocably decided upon war.
The
7 6 8 7 6 — 11
• ( i n o ---------------------------------------------I■------S a L ---- taam K ------ O D
c m i T Y ^ O -S
H O
L —
---------
RECORD
CO N G R E SSIO N AL
SazonofT draft also confirms the view expressed In the note to telegram
No. 210 that all further negotiations by Russia and France merely
served as a cover for their feverishly conducted secret military prepara
tions.]
Berlin, Vienna, London, Rome informed.
Sazon off.
(Foreign Minister to ambassador in France.)
(Tel. No. 1592.)
P e t e r s b u r g , it/
SI July.
The Austrian ambassador visited me and informed me that his Gov
ernment is prepared to enter into an exchange of views regarding the
contents of the ultimatum handed to Serbia. I expressed my satisfac
tion, and remarked to the ambassador that it would be preferable to
conduct the negotiations in London, all the Great Powers participat
ing. We hope that the English Government will take over the direc
tion of these discussions, whereby it will eani the thanks of all
Europe. In order that these negotiations shall proceed favorably, it
is very important that Austria should suspend her military operations
on Serbian territory.
Similar telegrams to London, Berlin, Vienna, and Rome. (Com
pare notes to telegrams Nos. 200 and 210. Regarding the willingness
of Austria to engage in direct negotiations with Russia, compare
note to telegram No. 1548 of July 29. With regard to Sazonoff*
demand that Austria should suspend military operations on Serbian
soil, compare telegram No. 210 of July 30.)
Sazon off.
(Ambassador in France to Foreign Minister.)
(Tel. No. 214.)
Paris . IS/SI July.
The French ambassador in Berlin telegraphs that Jagoto requested
him to come to him, and said that, to her great regret, Germany, hav
ing regard to “ the general mobilization of the Russian Army,” was
obliged to adopt for her own security the military measures known
as “ Danger of War,” and which of themselves entail other measures,
such as, for example, the closing of the frontier and the ordering of
a state of siege, etc. Germany begs Russia to demobilize, otherwise
she, too, will mobilize. The ministerial council immediately held, with
Poincaird presiding, decided to adopt, with respect to the five army
corps adjacent to the frontier, the most complete preparatory meas
ures, without, however, giving to them the character of mobilization.
(With regard to these five frontier corps, it must be noted that on the
very next day, i. e., on August 1 (see Paris telegram No. 127, also
suppressed) the Russian military attache in Paris was able to report
to bis Government that they were “ fully prepared for war.” ) In
communicating this to me., Margerie added, that France would reply
to the mobilization of the German Army by immediately mobilizing
all her forces. It is noteworthy that in the Havas message received
here from■ Berlin there is also mention of the “ general mobilization
of the Russian Army,” which borders upon the idea that Germany seeks
prematurely on one ground or another to bring about analogous
measures on the part of France.
[In this concluding sentence Ger
many is evidently accused of having attempted by means of false news
regarding the Russian mobilization to bring about French measures
of mobilization on July 31 in order to put upon France the responsi
bility for the outbreak of the war. In presence of this suspicion one
thinks involuntarily of the proverb, “ Qui s’excuse s’accuse,” for on
the one hand the French mobilization was already far advanced, while
on the other the German news was In accordance with the facts. See
concluding sentence of Paris telegram No. 215 of July 31.]
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 215.)
Paris,
1 8 /3 1
J u ly .
At B 0 p. m. the German ambassador came to Viviani and declared In
.S
the name of his Government that, having regard to the “ general mobili
zation of the Russian Army and Navy,” Germany is obliged to adopt
measures in accordance with the expression “ Danger of war.” At the
same time Germany has demanded that Russia shall demobilize. Rus
sia is given a 12 hours’ delay, after which, in the event of her refusal
Germany will also mobilize. Baron Schon added that he was instructed
to ask what attitude France would adopt in the event of an armed col
lision between Russia and Germany. Viviani listened to the ambas
sador’s communication, but declined to give him any answer. There
upon Baron Schon said that he would come to him at 1 o’clock to-morrow
for his answer, and begged him in anticipation to make the necessary
arrangements for his departure. At present a special ministerial couiicil
is sitting under the presidency of the President of the Republic.
Margerie, who has just communicated these details to me,, stated that
probably Viviani will not reply to the ambassador to-morrow, as he sees
a trick in Germany’s procedure, which is intended to place on France
the responsibility for the declaration of war. Margerie added that a
76876— 11
i
telegram had just been received from the French ambassador in Peters
burg, dated this morning, confirming the general mobilization of the
Russian Army, to which lie added no explanation.
IZ V O L S X I.
(Ambassador in France to the Foreign Minister.)
(Tel. No. 216.)
Paris, 18/SI July.
From military attach6 to war minister. 1 a. m.
The French war minister informed me in earnest, hearty tones that
the Government is firmly decided upon tear, and requested me to con
firm the hope of the French general staff that all our efforts will be
directed against Germany, and that Austria will be treated as a
quantity n/gligcable. [With regard to the great importance of the
French ambassador’s report as to the general Russian mobilization
see notes to telegrams No. 15S2 and 214. The propaganda referred to
in note to telegram No. 207 is now in full .swing, with the object of
putting the blame on Germany. But in order to fully understand the
mendacity of Viviani’s attitude with regard to the German ambassador,
to whom he gave no answer on July 31 to his direct question, and would
give no answer on the following day, the suppressed telegram No. 216
from Paris of July 31 must be taken Into account.]
IzY O L S K I.
(Foreign Minister to ambassador In France.)
(Tel. No. 1601.)
P e t e r s b u r g , 18 July/l Aug.
At midnight the German ambassador informed me on behalf of his
Government that if within 1 2 hours— that is, before midday on Saturday we do not begin to demobilize, not only as agaiust Germany but
also as against Austria, the German Government will be compelled to
order mobilization. To my query as to whether this was equivalent to
a declaration of wur, the ambassador replied that it was not, but added
that we were very near to war.
Berlin, London, Vienna, Rome informed.
Sazon off.
(Foreign Minister to ambassador in France.)
(Tel. No. — .)
Petersburg, 19 July/l Aug.
Germany has declared war against us.
Sazon off,
(Ambassador in France to Foreign Minister.)
(Tel. No. 217.)
Paris, 19 July/l Aug.
The military attache requests me to inform you as follows: Grouping
of German forces on 19th July (1st August). The six frontier corps,
U, 15, 16, 21, 8 and 2d Bavarian, reinforced by parts of 7, 11 and perhaps
18 on the Gcrman-Lvxembourg-Belf ort front. Increased movements of
troops in progress. Distribution of horses completed. An attack from
Metz or from the Saarburg-Bruges district may soon be expected. In
France the five frontier corps are in complete readiness for war.
(Compare note to telegram No. 214.)
I z v o l s k i,
(Ambassador in France to Foreign Minister.)
(Tel. No. 218.)
Paris , 19 July/l Aug.
The Austrian ambassador was twice with Viviani yesterday evening,
and informed him that Austria not only has no intention of violating
the territorial integrity of Serbia, but is also ready to negotiate with
the other powers regarding her conflict with Serbia in all its bearings.
To-day the German ambassador visited Viviani before the time ap
pointed yesterday, and the latter expressed his astonishment at his
action yesterday, which was not justified by the relations existing be
tween France and Germany.
[Viviani’s “ astonishment ” must have
been wholly feigned. Compare the suppressed telegrams, Nos. 210, 215,
216, of July 30 and 31.] To the ambassador’s declaration that, in
consequence of the evident mobilization, not only as against Austria,
but also as against Germany, of the Russian land and sea forces, Ger
many was compelled to adopt energetic measures, Viviani replied that
according to information here Russia had not mobilized her sea forces.
At this the ambassador was visibly surprised. .Is the result of a long
conversation, Baron Schon did not repeal his demand for a reply as to
France’s intentions and his threat of departure, but asked Viviani to
see him again at 6 this evening. Although the German ambassador's
attitude was modified to-day, the French Government is much disturbed
by Germany's special military measures along the French frontier,
being persuaded that under cover of the so-called state of danger of
war an actual mobilization is in progress, which may place the French
Army in a disadvantageous position. On the other hand, for political
reasons in respect of Italy, but more especially of England, it is very
important for France that her mobilization should not precede the Ger
man, but should form an answer to the latter. This question is at
“*
■
aaooaa
36
C O ls e K E S S lO lS A li n vA v n v o .
iymoisssudmod
present being discussed bp the ministerial council at the filysde, and
very probable that general mobilization will be decided upon.
it
is
Iz vo lsk i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 219.)
F a u i s , 19 July/l Aug.
Afier receiving the telegram of the French ambassador in Peters
burg, in which he announced the communication made to him by the
German ambassador regarding Germany’s decision, the President of
the Republic signed the decree ordering mobilization. The summons to
the reserves is being beaten in the streets. The German ambassador has
just visited Viviani for the second time, but imparted to him nothing
new, but declared his inability to decipher the telegrams that had
been received. Viviani informed him of the signing of the mobilization decree, and expressed his astonishment that Germany should have
adopted such a measure at a moment when a friendly exchange of
views was in progress between Russia, Austria, and the other powers,
[Mow completely the true sense is altered by this statement of Vivianl’s is made y-lain by, among other sources, the Paris telegrams, Nos.
210, 218, and 222.] He added that mobilization does not as yet mean
war, and that just as the Russian ambassador was remaining in Vienna
and the Austrian ambassador in Petersburg there was absolutely no
ground for Baron 8 oh bn’s departure, and indeed the baron had not
repeated his threat to go. [Instead of all this, the Orange Book states
merely : “ The German ambassador in Paris can remain.” Having re
gard to telegrams Nos. 216 and 218, it can scarcely be maintained
that. " absolutely no grounds exist for Baron SchSn’s departure.” Viviani’s whole attitude is undoubtedly founded upon the propaganda
already referred to.]
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 220.)
P a r i s , 19 July/l August.
Margerie told me that according to information from a very secret
source Italy apparently intends, in reliance upon the manner in which
t h e conflict has arisen, to remain neutral at first and then to oomc t o
o n e decision or another in accordance with t h e course of events.
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 221.)
P a r i s , 19 July/l August.
From the military attachd: General mobilization was announced at
S.iO p. m. The War Minister has expressed the f is h : ( 1) To move
Serbia to take the offensive more promptly. (2) To receive news daily
regarding the German army corps opposed to us. (3) To be informed
as to the date of the commencement of our offensive against Germany
and to be kept au fait of events. For the French the most desirable
direction of our blow continues to be Posen-Warsaw. According to
information from Denmark the First, Seventeenth, and Twentieth Army
Corps, Bixth Reserve Guards Corps, and the Second Corps are detailed
to act against us.
I z v o l s k i.
/Ambassador in France to Foreign Minister.)
(Tel. No. 222.)
P a r i s , 19 July/l August.
J received your telegram regarding Germany’s declaration of war
against us at 11 o’ clock. I immediately communicated it in person to
the President of the Republic, who immediately summoned a ministerial
council. Poincard declared to me in the most categorical manner that
both he himself and the whole cabinet are firmly determined fully to
carry out f^e obligations laid upon us by the terms of our alliance.
There arose, however, in connection therewith a series of complicated
questions of a political and strategic nature. In the first place, ac
cording to the French constitution, a parliamentary decision is neces
sary regarding a declaration of war, and at least two days are re
quired for the assembling of Parliament. Although Poincard has no
doubt as to its decision he would prefer to avoid a public debate re
garding the application of the treaty of alliance. On these grounds,
and for reasons which chiefly concern England, ( see telegram No. SO),
it would be better if the declaration of war were made, not by France,
but by Germany. It must further be borne in mind that to-day is
only the first day of the French mobilization, and that therefore it
would be more advantageous for both the Allies if France were only to
begin military operations after mobilization was more advanced. For
the rest Poincard is persuaded that Germany will not wait for a dec
laration of tear by France, but will attack her without delay without
permitting her to complete, her mobilization. Immediately after the
discussion of all these questions by the ministerial council Poincard
will summon me and inform me as to the results.
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 223.)
P a r i s , 19 July/l August.
Poincard told me that during the last few days the Austrian ambas
sador had energetically assured him anA Viviani th a t Austria had de76876— 11
1
dared to us her readiness not only to respect the territorial Integrity
of Serbia but also her sovereign rights, but that we had intentionally
concealed those assurances. To my remark that this was a complete lie
[the Orange Book reads: “ I oppose it (the lie !) with a categorical de
nial.” With regard to the Austrian statements, compare the written
statements of Baron Schon in Paris under (1) in telegram No. 195 from
P aris; the verbal declarations of Count Pourtal&s in Petersburg, and
also Sazonoff's answer contained in the first two sentences of the
Petersburg telegram No. 1554], Poincard replied that similar statements
had been made in London by Austria, where they might create a very
dangerous impression, and therefore ought to be denied there as tcell.
[In the Orange Book the suppressed end portion of the telegram is
given as follows : “ I denied this categorically.” It is for the reader to
j decide whether this dementi only refers to the Austrian assurances re
|
garding Serbia’s sovereign rights or also to her territorial integrity as
|
well. That the latter was in effect actually guaranteed by Austria is
j
indisputably shown by the note to telegram No. 223 above, while Ser
j
bia’s sovereign rights, which were touched by the punitory measures
|
necessitated by the Serajevo murder, would have formed the subject at
j
that time of the direct negotiations between Austria and Russia, to en
j
gage in which the former had declared her readiness. Compare note to
telegram No. 1548. Izvolskl’s assertion is therefore unsustainable, and
this accounts for the falsification in the Orange Book.)
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 224.)
P a r i s , 19 July/l August.
A telegram has been received from the French minister at Bucharest
which displays great anxiety regarding the intentions of Rumania, who
is said to be inclined neither to absolute neutrality nor to participation
in common negotiations with Austria.. The President of the Republic
said to me that influence must be brought to bear on Rumania without
loss of time by promising her Transylvania. In Poincard’s opinion,
attempts must also be made to draw Italy over to our side by promising
her Valona and freedom of action in Albania.
I z v o l s k i.
(Ambassador in France to Foreign Minister.)
(Tel. No. 225.)
P a r i s , 19 July/l August— 3 a. m.
I have just come from the President of the Republic, who said that
the council of ministers again confirmed the decision unreservedly to
fulfill France’s obligations as an ally. The council recognized that in
the interests of both the Allies it would be better for France to com
plete her mobilization, for which purpose 10 days would be required,
before hostilities are commenced. At the end of that period Parlia
ment will be summoned to meet. Poincard continues to fear that Ger
many icill attack France at once in order to render completion of the
mobilization difficult. The above statements must be preserved abso
lutely secret.
I z v o l s k i.
(Foreign Minister to ambassador in France.)
(Tel. No. 1627.)
P e t e r s b u r g , 20 July / 2 Aug.
Germany is openly endeavoring to turn the responsibility for the
rupture on to us. Our general [with regard to the suppression of the
allusion to the " general ” character of the Russian mobilization, com
pare note to Paris telegram No. 197 of July 27] mobilization was neces
sitated by the immense responsibility which we should have incurred if
we had not taken all the precautionary measures in good time, and
Austria had limited herself to protracted negotiations while at the
same time bombarding Belgrade. [In the Orange Book there is the
following addition to the sentence: “ and carried out her complete
mobilization.” This subsequent insertion in the Orange Book reveals
the evident falsification in the telegram from Vienna regarding the
alleged general Austrian mobilization on July 28. Compare telegram
No. 1554. For the rest the hypothetical action attributed to Austria
exactly corresponds with the attitude of Russia and Austria themselves.
Compare telegram No. 210 of July 30.] The Tzar had given his word
to the German Kaiser not to take any provocative action so long as the
negotiations with Austria continued. After this guaranty and all the
proofs of Russia’s desire for peace, Germany had no right to doubt our
assurance that we would Joyfully accept any way out that was com
patible with Serbia’s dignity and independence.
Any other issue
would have been quite incompatible with our own dignity and would
naturally have shattered European equilibrium, as it would have
brought about the hegemony of Germany. This European character of
the conflict, which was of world-wide significance, was infinitely more
important than its occasion. [In the Orange Book there is the fol
lowing addition : “ As Germany decided to declare war on us at a time
when negotiations between the powers were still in suspense, she took
upon herself a heavy responsibility.” In this addition is made quite
clear the tendentious misrepresentation of the true contents, to which
attention has already been called in the note to telegram No. 207 for
the purpose of transferring the blame for the war to Germany. Com-
»
£}\J& % \
9 U
4
JM
dfcW 04 £luo 40a muipiftM
J
•tw u x c Y iV H
l^JO[.» I
- ff V
---
n v u A i a a iiiM a iiQ a
V»>
CONGRESSIONAL RECORD.
pare the bearing of Prance and Russia toward the negotiations between
the powers now represented as so promising and telegram No. 210 of
July 80.]
Sazon off.
(Ambassador in Prance to Foreign Minister.)
(Tel. No. 225.)
[This telegram, evidently inadvertently, has been given the same num
ber as the last sent on the previous day.]
P a r i 3 , 2 0 July f t Aug.
To-day, Sunday, is to be regarded as the first day of mobilization.
IZ V O L S K I.
(Ambassador in France to Foreign Minister.)
(Tel. No. 225.)
P a r i s , 20 July/S Aug.
Small German detachments have crossed the French frontier and
some minor collisions have already occurred on French territory. This
enables the French Government to declare to Parliament, which is sum
moned to meet on Tuesday, that France has been attacked, and so to
avoid a formal declaration of xcar. News has been received to-day that
German troops have entered Luxembourg territory, thereby violating
the neutrality of the Duchy, which is guaranteed by England and Italy,
among others, signed by the treaty in 1867. This circumstance is con
sidered very advantageous for France, as it tcill infallibly call forth a
protest from England and cause her to manifest greater energy. There
is also news that German troops are said to be advancing toward
Arlon, which indicates an intention of violating Belgian neutrality also.
This will touch England even more nearly. Viviani telegraphed to
London immediately directing the French ambassador to call Grey’ s
attention to this.
IZ V O L S K I.
R U S S IA N
M IL IT A R Y
M ENACES
37
IN
1*14
BEFORE
THE
S E R B IA N
TROUBLE.
In 1911 the French chief of staff, Dubail, attended the Russian
maneuvers, and the next year the Russian chief, Sliilinski, attended
the French. France demanded Russian military Increases in exchange
for her seventeen thousand million francs.
(Kuhl, 72.)
This was
charged by the Russian Journal Rjetsch, on July 19, 1914. (Ib., 70.)
The Grand Duke Nicholas desiring war in 1912, Sukhomlinoff answered
that they were not yet ready, whereupon the former renewed his
pressure on preparations.
(Eggeling, 49-50.)
Nicholas planned a
military demonstration for 1913, but was stopped by remonstrances
that two years would yet be necessary. (Eggeling, 16.)
In 1913 the German general staff believed that the Russian field
forces of the first line could be ready on the fifth day of mobilization,
and of the second line on the eighth. (Kuhl, 82.) The spring of
1914 witnessed the enormous preparations, the Duma sanctioning in
creases equal to the entire peace strength of the Austrian and Hun
garlan armies. (Eggeling, 18.) Continual test mobilizations were oc
curring, supplies were imported, coal reserves increased, and roiling
stock added. Grain export was stopped. (Ib., 16-17 ; Kulil, 66-67. )
Peace reviews and strengthening of fortresses : These were very com
mon. In the autumn of 1913 General Joffre headed a mission to St.
Petersburg to examine her military efficiency, and departing remarked,
“ The Russian Army is at this moment the mightiest in the world ”
(Eggeling, 12-22). The troops around Vilna and Warsaw were pre
sumed to concentrate against Germany, the Kiev forces against Austria.
Sukhomlinoff announced himself ready in 1914 (ib., 22).
Final movements after Serajevo : Von Eggeling goes into great detail
of the eventful last week. He discusses the revelations also of the
Sukhomlinoff’s trial. As to actual movement to the German frontier,
Kuhl says that the plan carried out was that of 1912 (which was cap
tured during the war) of crossing the German borders without declara
tion of war. “ Our measures must in this connection be concealed
by apparent diplomatic negotiations.” On the very 1st day of August,
that of Germany’s declaration of war, “ the border was crossed in four
places by enemy patrols.” (Kuhl, 79-80.)
To make effective the duty of France to mobilize and imme
diately attack Germany simultaneously with Russia under the
terms of the treaty of 1S92 it was only necessary to make
Austria mobilize, above quoted, and this was accomplished
through the Slavs of Serbia.
A p p e n d ix I (B a u s m a n ) .
That the German authorities were not entirely unsuspecting
Since the first edition of this work there has been issued a startling
of the will to war by the French and Russian leaders is shown
by (he sealed instruction sent under seal of July 26 to the Ger exposure entitled “ The Falsifications of the Russian Orange Book."
man ambassador at Brussels not to be opened until authorized (London, Allen and Unwin, 1923.) The work appeared shortly before
in German, with notes by Freiheer von Romberg. The London edition
by telegram. The authority was given August 2, after the contains a foreword by the learned Professor Gooch.
French and Russian troops had crossed the German line. This
The “ books,” of various colors, issued immediately after the out
communication from the German Government was handed to break of hostilities by the different governments, were at first supposed
M. Devignon, Belgian Minister for Foreign* Affairs, at 7 o’clock to be complete. Later it was discovered that they were made up of
p. m. August 2, 1914.
selected matter, and that all the truth was not revealed. That any of
EXHIBIT X.
the dispatches, though, would be deliberately tampered with before
publication was never suspected, so during eight or nine years the
public had believed that what the various governments did publish was
Russian Increases : Reorganization was begun in 1910, with as much genuine. The book just referred to has dispelled that illusion in so
secrecy as possible (Eggeling, 9). The losses of the Japanese war were far as concerns Russia. In the Russian Orange Book not only were
replaced in 1911. In 1914 the military expenditures were 2,600.000,000 whole telegrams omitted but passages were left out and passages al
marks (Kuhl, 60). The universal service law required four years with tered. As Professor Gooch says :
the colors. The German staff reckoned In 1913 on a Russian total of
“ Readers will form their own Impression as to the changes, but there
88 reserve divisions ; the force would be—
will be general agreement that the original Orange Book was a dis
Reservists. honest piece of work.”
For active formations-------------------------------------------------------748, 000
An omitted dispatch is No. 1521, from Sazonoff, the Russian Foreign
For reserve formations-------------------------------------------------------876, 000 Minister at Petrograd, to Izvolsky, his ambassador at Paris. Its date
For replacement____________________________________________
205, 000 is July 27, four days before the admission of the Russian mobilization
For communication formations_____________________________
40, 000 and five days before the German declaration of war upon Russia because
1, 869, 000 she would not stop that mobilization. Sazonoff actually says:
“ If there is a question of exercising a moderating influence on St.
In both categories of reserve or a surplus o f _______________ 2, 292, 000 Petersburg we reject it in advance.”
On July 30, in telegram No. 207, Isvolsky advises Sazonoff that
423,000
(Yon Kuhl, Cl—
62.)
Schon, German ambassador at Paris, “ complains of the French mili
This was in 1918. For the following year increases were planned tary preparations,” and that Schon said that in that event Germany
and in part carried out. Excluding Siberian and Turkestan troops, the “ would be compelled to adopt similar precautions.” He relates that
strength o f the Russian army was 30 army corps, comprising 354 cav Viviani replied that France wanted peace, but was “ determined to act
alry, or Cossack, divisions, 35 reserve divisions, and 40 national defense with her allies.” Viviani had that evening forbidden, he says, a pro
jected antiwar demonstration in Paris. These passages were suppressed.
divisions.
We come now to the 31st. At 1 o’clock in the morning, Isvolsky,
The peace strength in the summer of 1914 was 1,581,000 officers
in his No. 216, advises Sazonoff as follows (entirely omitted from the
and men; the war strength 3,461,750 (Kuhl, 104, 105).
The ultimate aim became that of creating an army which could take Russian Orange Book) :
“ The French war minister informed me in earnest tones that the
the offensive against Germany. All Russian Army questions after 1910
Government is firmly resolved on war and requests us to confirm the
were viewed by the press in Russia from this angle. (Eggeling, 9.)
The Military Railways: These were created to permit the immediate hopes of the French general staff that all our efforts will be directed
transport of troops from Moscow, St. Petersburg, and Kazan to the against Germany and that Austria will be treated as a negligible
German and Austrian frontiers. In peace times the forces were di quantity.”
The reader will note that this was sent before the Russians had
vided along the new lines to be rushed to the front.
(Kuhl, 76.)
France made a loan for these lines— one thousand million francs. The formally announced their mobilization and before Germany had declared
Siberian Railway was also double-tracked to bring up the forces from war. It became plain that France was willing to Jump into the fray
there. In 1912 two great private roads (from Sosnowice to Warsaw even without waiting for German action, that she was simply studying
the moral effect of a first action upon her part and not hesitating as
and from Alexandrovs to Warsaw) were purchased by the Government.
Here is what Isvolsky says in his No. 218 to Sazonoff on
The Polish railway officials were supplanted by Russians In 1912 (ib.). to war
76876— 11
A p p e n d ix
G
(B a u sm a n ).
oc
______
X I H O J 'A U
CONGRESSIONAL RECORD.
m
A u gu st
sto p
1,
Is
day
p o litic a l
very
cede
th e
In
upon
reason s,
G erm an
h er
a
R u s s ia
and
Is v o ls k y
but
by
day
of
to
had
seen
a llie s
m o b iliz a tio n
The
fr o m
u n til
“ w o u ld
o n ly
th e
see
sh e
tim e
c o n s id e r e d
th a t
e ith e r
on
th e
sta te s
“ It
w ere
m ore
in
not
p re
e x p ir a tio n
he
w ar
a g a in s t
has
su m m on ed
w o u ld
m ade
th e
th a t
of
be
not
b e in g
e n jo y e d
and
in
part
ready
to
a
b e t t e r ,”
tio n .
If
is
of
F ran ce
s h o u ld
of
b o th
th e
a fte r
her
to
a tta c k e d
a ll
of
on
her
to
and
w ar,
th in g s
of
a
w ar
w a itin g
s im p ly
on
back
w ith
th a t
w ar
con
h a n g in g
p la n
w as
and
th e
have
tw o
th e
c o n ju n c tio n
w ar
d e c la r e
or
of
general
In
la u n c h
E X H IB IT
th is
h er;
s tu d y in g
it
had
d e c la r e d
w ith
upon
her.
A
m ilita r y
s it u a t io n
q u o ta tio n
h ere,
P r o b le m s
of
th e
R u s s ia ,
and
but
He
th e
“ has
W h ile
w ar
be
an
be
in te rv ie w
as
adds
th re e
in
th e
of
of
124
57.
He
w ith
F ran ce
c o n flic t
w ill
c a lle d
cou rse,
be
b etw ee n
fig h tin g
w ith
h ere
randu m
any
th e ir
w ith
a
r e p r e s e n ta tiv e
of
th a t, “ n o m a tte r
“ W e
now
w h ic h
had
I
g iv e
th e
tw o
upon.
p e r tin e n t
it
192
If
us
a llie s
fr o n tie r .
fr o n tie r .
It
U n til
be o p p o sed
ta b le s
be
is
a
d e c is io n
in
in fa n tr y
be
an
of
preponderan ce
and
106
th e
2
th e
12
a b le
u n a id e d .
and
is
le ft
th e
I t a lia n s , is
arm y
corps
In
th is
rear
of
our
a r tille r y
rests
d e v e lo p m e n t o f h i g h -a n g le fir e
of
th e
f ie l d
arm y.
a q u e s tio n
re sp e cts.
In
t im e
ta k e
On
th e
u s.
num ber
of
m en
m anage
to
secu re
“ P art
very
II
great
of
fo r
th e
rons,
and
m u ch
fo r c e s,
a fr a id
of
so
an
s u p e r io r ity .
w ith
th a t
fo r
arm ed
But
to
le v e l
sh e
can
th e
w ill
sh e
had
w e ll
as
At
are
sh ow s
w ith
we
in fa n tr y
us
as
d is p o s a l
th e
th e se
as
in c u m b e n t
7 6 8 7 6 — 11
we
“ In
th a t
A
in
even
th e
east
c o m p a r is o n
can
of
lo n g
w ith
fo r w a r d
R u s s ia
th e
th e
as
th e
R u s s ia
e q u ip m e n t,
T r ip le
her
in
in to
f ie l d
of
fu tu re
319
is
and
A llia n c e
s p ite
th e
e n jo y s
fo r c e s
b a tt a lio n s ,
m om ent
th e
of
p u t in to
1 ,3 7 4
r e o r g a n iz a tio n ,
b e in g
upon
her
to
th e
s p e c ia l
p o s s ib ly
of
d e s tr u c tio n
th e
a r m in g
put
in to
in
an
of
of
in te rfe r e d
tro o p s
in
m o b iliz a
th e se
th e
w ith .
r e g io n s
advanced
sta te
n e c e s s ity
m ake
w ill
be
and
fa r
w hat
n a tio n
in
p e c u n ia r y
le s s
th a n
an
of
P art
our
m ili
have
1
m easu res
th e
d e ta il
in c r e a s in g
in
th e se
by
g rea ter
p erson al
of
d e fe n s e s
s a id
in e x o r a b le
th e
II
of
dem ands
th e
m em o
s a c r ific e s .
th o se
we
But
In
have
s h o u ld
to
a ls o
p o in t
sim ila r
out
th a t
s a c r ific e s
our
In
n e ig h b o r s
order
have
m ade
stre n g th en
to
th e ir
and
are
m ilita r y
m akes
do
m u ch
on
m ark s
on
year
th e
th e
g rea ter
th e
th e
R u s s ia
la s t
p erson al
D u r in g
ou rs.
str e n g th e n in g
dem anded
and
dem ands
fir s t
on
M orocco
of
her
o b ta in e d
her
e a ste rn
fr o m
p o p u la tio n
c r is e s
sh e
sp en t
fo r tr e sse s.
her
n a tio n a l
assem
m ark s.
th ree y e a rs
H a ld a n e
E n g la n d
h a s s p e n t la r g e
su m s to
g iv e e ffe c t
re fo r m s.
“ S w itz e r la n d
has
in tr o d u c e d
a
new
arm y
o r g a n iz a tio n
at
a
heavy
c o st.
“ B e lg iu m
arm y
w ill
has
is
now
be
c a r r y in g
brough t
la id
out
up
th r o u g h
to
a
en orm ou s
a
new
d e fe n se
m o b iliz a tio n
su m s
to
b ill,
stre n g th
m o d e r n iz e
by
of
th e
w h ic h
3 0 0 ,0 0 0
h er
m en.
fo r tific a tio n s
of
A n tw erp .
“ U nder
p e lle d
th e
to
arm y
p ressu re
dem and
w h ic h
gram
fo r
d raw n
so
is
u p in
to o ,
m u st
be
p r o v is io n
P art
th e
th e
p o litic a l
la r g e
c r e d its
c r is is
fo r
A u s tr ia
th a t
has
been
r e o r g a n iz a tio n
com
of
h er
overd u e.
II
fu tu re
p rep ared
of
m u st
p o lit ic a l le a d e r s
m e e t a ll
of
very
lo n g
th e
t h a t in
th e
th e
be
c a r r ie d
G erm an y,
of
th e
to
m ost
th r o u g h
tr u s tin g
n a tio n
m ake
u rgen t
a
to
s a c r ific e s .
w ith
her
su pp ort
The
r e q u ir e m e n ts
p ro
w h ic h
is
th e g re a te st en ergy,
ow n
w h ic h
stre n g th ,
is
s o lid
can
g iv e
en ou gh
to
e m e r g e n c ie s ."
It demanded a peaceful passage through Belgium, proposing
to pay for damages and respect Belgian sovereignty and terri
tory when war ended, and claimed to know that Belgian neu
trality had already been violated by France. (Exhibit X II.)
E X H IB IT
X II.
B r d s s e l , A u g u s t t , 1914.
IM P E R IA L G E R M A N
(H ig h ly
The
to
we
G erm an
w h ic h
G iv e t
of
th e
and
tio n
of
The
G overnm en t
F rench
N am ur.
F ran ce
T h is
of
has
fo r c e s
L E G A T IO N
IN
B E L G IU M .
c o n f i d e n t i a l .)
its
b est
w ill,
F rench
ta in ty o f a
It
is a n
th is
on
p o s itio n
a id .
In
fo r
th e
no
doubt
fe a r
th is
as
fa c t
to
w ay
th e
B e lg ia n
th a t
r e p u ls e
a c c o r d in g
M euse, by
th ro u g h
th e
to
in fo r m a tio n
on
le a v e s
G erm an y
a g a in s t
d u ty
r e lia b le
m arch
n o t a v o id
no
w ith o u t
im p e r a tiv e
te r r ito r y .
B e lg i u m , in
su ch
a
th ere
la r g e ly
is
of
in te n
sp ite
d e v e l
s u ffic ie n t
cer
G erm an y.
th e p r e s e r v a tio n
o f G erm an y
to
fo r e s t a ll
o f th e e n e m y .
G erm an
G overn m en t
regard
as au
of
e n e m ie s
th e
in
t h r e a t d ir e c te d
a tta c k
The
be
m arch
to
in fo r m a tio n
m a r c h in g
w ill
r e c e iv e d
in te n d
Im p e r ia l G o v e r n m e n t ca n
oped
over
regard s
as
by
s e r io u s ly
be
hom e
w ill
in
great
s a c r ific e s
1 ,3 0 0 ,0 0 0 ,0 0 0
to
But
in
even
us and
us
a r t ille r y
w ith
r ifle .
w ith
and
act
w o u ld
o f h o s tilit y
of
fe e l
a g a in s t
G erm an y
o b lig e
keen
h e r s e lf
h er
on
regret
th e
h er
if
fa c t
part
B e lg iu m
th a t
to
th e
s h o u ld
m easu res
v io la t e
B e lg ia n
te r r ito r y .
p resen t
tim e
lo o k
F rench
up
w ith
our
m arked
our heavy
o v e rta k e
at
c o m b in e d
th e
th e
th e
not
c a tc h
m ore
le v e l
a
her
we
sq u ad
very
a r m in g
not
of
be
n u m e r ic a l
m u st
keep
le a v e
no
sto n e
u n tu rn ed
to
e m p lo y
ord er
to
d is s ip a te
any
m is u n d e r s ta n d in g ,
th e
G erm an
G overnm en t
d e c la r e s a s f o l l o w s :
1.
a g a in s t
s t ill
need
In
a
w h ic h
i n o u r m i n d s t h e f a c t t h a t in
v ie w o f th e e n o r m o u s s u m s
R u s s i a i s s p e n d i n g o n t h e r e o r g a n i z a t i o n o f h e r a r m y , s h e w il l be
s t r o n g e r w ith e v e r y y e a r t h a t p a s s e s .
I t is j u s t a s im p o s s ib le fo r
G e r m a n y to t r y a n d c o m p e te w ith R u s s i a a s a la n d p o w e r a s i t is
f o r h e r to a t t e m p t t o c a t c h u p w i t h E n g l a n d a s a s e a p o i c e r .
B u t it
J u st
m u st
m a k in g
b ly
an
p resen t
Is
th e se
be
arm y.
su p e r io r ity
c o n flic t
w hen
get
our
th e
as our
a b le
R u m a n ia
b a tte r ie s .
w e ll
on
r e q u ir e s
east
our
fo r c e
one opponent
and
of
to
s u p e r io r ity .
R u s s ia n
b e h in d h a n d
her
82
a
ahead
fo r F r a n c e
be
a p p e n d ix
m om ent
h o w itz e r s )
te n ts, a s
hand,
fo r
th e
are
s e r v ic e , w h o
th e m
n u m e r ic a l
r e v e a ls
and
sh e w ill
o th e r
fit
we
of m oney
G e r m a n y , A u s tr ia , an d
R u s s ia
(fie ld
M oreover,
p r o v i s i o n o f fi e l d k i t c h e n s
i t is o n ly
at
be
s a tis fa c tio n
is
secu red ,
su p e r io r ity
p resen t
b e h in d
s h e h a s n o w to t a k e t h e f i e l d a g a i n s t F r a n c e w i t h a
g r e a t i n f e r i o r i t y i n i n f a n t r y ( t h o u g h s t i l l w i t h a s l i g h t s u p e r i o r i t y in
a r t i l l e r y ) , a n d w i l l f u r t h e r b e a t t a c k e d in t h e r e a r b y R u s s i a ,
The
her
in v o lv e
G erm an y
1870
as
to
it
to
A rm y
Fran ce,
fo u g h t
a ls o
But
o p e r a tio n
W h ile
num ber
hand,
f ir e a s h o t .
over
th e
w ere b ro u g h t
It a lia n
to
on
A rm y
s u p e r io r ity .
or
th e d is
th e
o th er
arm y
w h o le
b a tta lio n s
o f a r tille r y ,
th e
by
s lig h t
to
It a lia n
On
b a tta lio n s ,
in fe r io r ity
e x tr a o r d in a r y
open ed,
a lo n e
The
p u t in to
fo r c e s a t
an
th ir d
a s s e m b le s
in
be ad d e d
im m o b iliz e d
I t a lia n
h a n d , w it h o u t b e in g
th e
to th e
B e lg iu m
have
I t a ly
E n te n te ,
s h o .w
b a tt a lio n s .
th e
w o u ld
it
T r ip le
p a r tic ip a te .
w o u ld
w h e th e r
id le , r ifle in
Im m e n se
is
w ill
tw o
th e
The
not
her
g a in
can
w ill
to
s u p e r io r ity
w ith
G e rm a n y can
In
we
fo r c e s .
w h a t t h e p r e t e x t ,”
been c o u n te d
of
w ill
case
She
s in c e
th e
s c a le
w h ic h
f a c e in c a s e o f a l o s t w a r .
A u s tr ia
fo r
la r g e
p r o c la m a tio n
o ff
th a t
th e
our
th e
d e a lt
r e v ie w s
and
to
m o b iliz a tio n ,
fo rtre sse s
situ a tio n
Of
c o m p le te
a r m y , w h ic h
b a tta lio n s ; if
fig u re
as
im m a te r ia l
s ta n d in g
w ar
c a lc u la tio n .
th e
A lp in e
a
a r m y , w h ic h
A lp in e
G erm an y,
m u st
a
a r e th e fo r c e s w h ic h
E n g la n d .
th e
a cco u n t,
o u t o f th e
th a t
in
days
a p p e n d ic e s ,
In
and
e n e m ie s ,
of
F ren ch
•
page
G erm an y,
A u s tr ia
fe w
b a tt e r ie s , w h ic h
F ran ce
G erm an y
o f our
out
at
fo r
L u d e n d o r fif
th e
w o u ld
e s ta b lis h e d
im p r o v in g
p o litic a l
“ G erm an y,
w est
sq uad ron s, and
of
lo n g
by
I,
in te re st
to o
up
th e
b ea ten
im p o r ta n c e
and
fo llo w s :
fie ld
s id e
is
book
o f th e
t h r e a t e n e d .”
a
“ U n d e r I o f th e a p p e n d ix
p osal
It
th e
a g a in s t
and
g e n e r a l s ta ff, w h o s a y s
th e n
on es,
le ft
be
v ita l
G erm an y
In
The
“ T h is
“ m em oran du m ”
have
and
3 0 0 ,0 0 0 ,0 0 0
lo n g
V o lu m e
w ill
no
a
I
fo rc e s
“ F ran ce
m in is tr y .
fo u n d
w ill n o t c o n tr ib u te h e r th ir d
He
th e
m ade
S ta ff,
w ill h a r d ly
had
It a lia n
I t a ly
th e
can
E n g la n d
Ita ly
Ita ly
had
M o ltk e
G en eral
th a t
R u s s ia .
e x is te n c e ,
to
but
th e
c e r ta in ty
Von
d e p lo y m e n t
our
a
n e ig h b o r s
P r o v in c e s
in
on
our
n e c e s s ity .
V o n M o l t k e ’ s s u m m a r y o f D e c e m b e r , 1912.
D ecem ber, 1 9 1 2 ,
fr o n tie r
not
and
on
our
fo r c e s
e ^ V ta in iy
w ere
m ade
X I.
(B a u s m a n ).
our
tu n n e ls ,
g re a te st
r e in fo r c e d
“ 1 b e lie v e
th an
In
be
our
arm ed
im m e d ia te ly
a tta c k
and
very
in
d is p o s a l
th e m .
e x p e ct,
a tta c k
an
and
to
her
v is d - v is
d e fe n se .
ta ry
even
G erm an y
an
at
th e ir
in c r e a s in g
s itu a tio n
b r id g e s ,
th e
s till
p o s itio n
brough t
of
have
su ch
fo r tr e sse s,
It
th e y
a ls o ,
are
th a t
th in k
W e
r a ilw a y s ,
F rench
fo r
to
m ilita r y
w est
by
o p e r a tio n s
book : T h a t
m ove
re so lv e d
A p p e n d ix
b e fo r e
a tte n tio n .
th e
w h ic h
m a in ta in
began
fir s t
th e
a d v a n ta g e o u s
m ilita r y
p resen t
w as
w h ic h
be
resou rces
to
above.
F r a n c e s h o u ld
to
lie
t o -d a y
c o n fir m a tio n
fir m ly
th e
“ The
im m e d ia te ly
w ar
E n g la n d ,
S a z o n o ff on
d e c la r a tio n
had
b e g in
o f th e
w ere
a ll
I t .”
a c tio n .
be
to
Fran ce
w as
a p p r o p r ia te
w a itin g
th e
by
R u s s ia n s
th a t
to
a d v a n c e d .”
w ill
secon d ,
out
it
m ore
fr o n tie r
w ho
F ren ch
of
fir s t e d itio n
th e
R u s s ia
sh o u ld
a d v is e s
w ar.
th a t,
in
th e
to
e s p e c ia lly
G erm an y
G e r m a n y ’s
d e c la r a tio n
w ere
w as
th a t
d e c la r e d
sta te s
to
fu r th e r
h e a r in g
had
and
m o b iliz a t io n
an sw er
th en
He
read er
ten d e d
been
a fte r
th e
F ran ce
an
P o in c a r G ,
m o b iliz a tio n ,
if
u ltim a tu m
Ita ly
h er
Is v o ls k y
re g a r d in g
“ if
to
th a t
a n n o u n c in g
G e r m a n y .”
G erm an
resp ect
fo r m
R u s s ia
c o u n c il
says,
in
F ran ce
A u g u st,
t e le g r a m
m in is te r ia l
th e
of
th e
ord er
(su p p re sse d )
te le g r a m
r e c e iv e d
fo r
b u t s h o u ld
h is N o . 2 2 2
day
w h ic h
e x p ir e d :
Im p o rta n t
sam e 1st
of
th e
h e r m o b iliz a tio n
“ For
It
rI V N O I S S 3 U D N O D
G erm an y
g iu m .
an
If
a ttitu d e
ern m ent
a n te e
2.
3.
If
a g a in s t
fo r
4.
and
its
part
K in g d o m
a ll
I f B e lg iu m
soon
th e
th a t
th e d a m a g e s
in
its
under
a
act
of
h o s tility
about
to
com m ence
to w a rd
on
th e
th e
peace
th e ir
fr ie n d ly
a ttitu d e ,
is
by
her
b e h a v e s in
r a is e s
of
w h o le
c o n d itio n s
th e
r e q u ir e d
th e
la id
a g a in s t
to
B e l
ta k e
G erm an
peace,
to
up
G ov
gu ar
e x te n t.
dow n
to
e v a c u a te
is c o n c lu d e d .
of
in
G erm an y,
d e c la r a tio n
in
a u th o r itie s
cau sed
p a r tic u la r
any
w ar
p o s s e s s io n s
as
preserves
w ith
th e
u n d erta k e s,
and
as
B e lg iu m
in
n e u t r a lit y
u n d e rta k e s
te r r ito r y
cash
c o n te m p la te
fr ie n d ly
G erm an y
agreem ent
not
co n se n ts
of
on
th e
B e lg ia n
does
B e lg iu m
G erm an y
B e lg ia n
tro o p s,
is
p repared,
G o v e rn m e n t,
and
to
g iv e
to
in
buy
in d e m n it y
B e lg iu m .
a
h o s tile
d iffic u ltie s
m anner
a g a in s t
to w a rd
th e G e rm a n
th e ir a d v a n c e
tro o p s,
b y t h e o p p o s l-
u a A J v J u a
'L
V
M
o i s s a a _ B _ _ K _ _o_ _o_ _ _ _ _ _ _
_ _
s £
CONGRESSIONAL RECORD.
tlo n
o f th e fo r tific a tio n s o f th e M e u se
tu n n e ls , o r o th e r
s id e r
B e lg iu m
In
as an
th is c a se
or by
d e s tr o y in g
e n g in e e r in g w o r k s , G e r m a n y
road s,
r a ilw a y s ,
w ill b e c o m p e lle d
to
G erm an y
e n g a g e m e n ts
to w a rd
B e lg iu m ,
tw o
one
G overnm en t
a n o th e r
to
G overnm en t
ta k in g
th e
w ill
p la c e .
n e ig h b o r in g
d e c is io n
t h a t th is
In
how
th is
S ta te s
of
arm s.
c o n tin g e n c y
know
to
case
w ill
9.
The
ta k e
th e
G erm an
w ill n o t a r is e
s u ita b le
fr ie n d ly
b e c o m e c lo s e r
and
th a t
m easu res
r e la tio n s
and
m ore
but
S ta te s to w a rd
to
w h ic h
s h a ll
u n ite
of
ta ile d
its
th e
tw o
la s t in g .
An
1.
C e s s a tio n
s ig n a tu r e
2.
GERMAN
o f o p e r a tio n s
Im m e d ia te
fr o m
not
le ft
becom e
th e
th e
w ith
e v a c u a tio n
of
so
sig n a tu r e
of
e v a c u a tio n
n o te
of
a ll
m a c h in e
ance
in
th e
to
of
in c lu d in g
a llie d
s ix
ever,
th e
and
in
r e p a tr ia tio n
S w itz e r la n d
p r is o n e r s
th e
th e
w ill
lo c a l
U n ite d
and
to
be
h o ld in g
th e
w ith
r a d iu s
r ig h t
bank
of
U n ite d
w ill
S ta te s
A ll m o v e
in
accord an ce
c o m p le te d
above
w ith in
m e n tio n e d ,
15
in c lu d in g
heavy,
dow n
a r m ie s
s tr a g e tie
A
th e
p o in ts
n eu tra l
th e
zone
stre a m
to
th e
east
and
as
th e
ea st
tio n
by
as
of
th e
th e
of
of
annexed
c o u n tr ie s
bank
by
a llie d
of
th e
c r o s s in g s
a
le ft
s h a ll
of
S ta te s
M ayence,
fr o m
th e
6.
In
a ll
of
in h a b ita n ts ;
te r r ito r y
p r o p e r ty
of
c o m m itte d .
as
w e ll
fo r
p e r io d s
th e
c iv il
A ll
fix e d
s h a ll
not
s h a ll n o t b e m o v e d .
Roads
r a ilr o a d ,
w a terw a y s,
m a in
be
of
no
p a r tic ip a tio n
7.
A ll
s h a ll
lo r r ie s
of
w ith
a ll
fo r
p r e -w a r
s h a ll
of
kept
in
an
A ll
and
8.
The
A ll
s itu .
e ffic ie n t
m ilita r y
and
sta te
ta k e n
by
fr o m
p erson n el
com m and
s h a ll
4 8 h o u r s a ll m in e s o r d e la y -a c t in g
by th e G erm an
The
G erm an
m ay
have
e t c .)
under
p e n a lty
7 6 8 7 0 — 11
ta k e n
of
s h a ll
(su c h
a ls o
as
occupa
sto res
th e
and
order
to
in
p erson n el
o f e v e r y k in d ,
t e le p h o n e s ,
fo r
and
th e
a r m is tic e .
F u rth e r
m a te r ia l
and
d u r in g
A llie s
p resen t
th e
s h a ll
r e s p o n s ib le
d isp o se d
fo r
on
In
s itu
e n tire
w h o le
be resto red
e m p lo y e d
on
p e r io d
to
su ch
of
th em .
m eans
r e v e a lin g
te r r ito r y
w ith in
e v a c u a te d
or
d e s tr u c tiv e
p o llu tin g
of
m easu res
s p r in g s ,
th a t
w e lls ,
ter
be
le ft
on
th e
b e fo r e
soon
w h ig h
th e
as
s h a ll
th e y
im m e d i
e x is te d
te r r ito r y
s h a ll
on
w ith
a s th e A llie s , t a k in g in to
t e r r ito r ie s , s h a ll d e c id e
b e g in
w e ll
th a t
th e
on ce,
and
m ilita r y
a ll
G erm an
a g e n ts
now
on
1 9 1 4 ) , - to be r e c a lle d .
a ll
to
at
as
r e q u is itio n s a n d
o b ta in in g
s e iz u r e s
s u p p lie s
and
in te n d e d
fo r
A u gu st 1, 1 9 1 4 ).
o f B u ch arest
access
to
th e
e ith e r
to
and
B r e s t -L it o v s k
th e
te r r ito r ie s
th rou gh
and
e v a c u a te d
by
D a n z ig o r by th e
p o p u la tio n s
fo r c e s o p e r a t in g in
r e c ip r o c ity
d e ta ile d
w ith in
of
su ch
w ho
m ay
th o se
te r r i
and
A fr ic a
w ith in
p e r io d
of
can
th e
c la u s e
of
cash
fix e d ,
of
o f o th e r
a llie d
or
3, p aragrap h
r e q u ir e d :
no
p u b lic
d e p o s it,
R u m a n ia n
in
retu rn
to g eth e r
w ith
g o ld
y ie ld e d to
d e liv e r e d
in
th e A llie s
tru st
th e
B ank
is s u e
th e re o f,
R e stitu
G erm an y or
th e
of
s p e c ie ,
c o u n tr ie s .
to
be
f o r th e
d o cu m en ts,
fo r
fo r
s h a ll
N a tio n a l
a ll
in v a d e d
19.
R e p a r a tio n
s e c u ritie s
th e
of
p la n t
th e
to
one
be
s e r v e a s a p le d g e to
in te r e s ts in
be
are
la s ts
im m e d ia te
to
h e r e a fte r
be c itiz e n s
in
c o n d itio n s
a r m is tic e
m oney,
g o ld
E ast
m a x im u m
c o n d itio n s
th o s e m e n tio n e d
to
be
g iv e n
is
o f a ll h o s tilitie s
th e lo c a tio n
to
g iv e n
to
th e
pow ers,
and
a ll
ta k e n
A llie s
in
a t sea a n d
u n til
th a t
naval
fre e d o m
and
m a r in e
G erm an s
d e fin ite
m o v e m e n ts o f a ll
q u e s tio n s
m e r c a n tile
pow ers
and
n e u t r a ls
Surren der
to
th e
A llie s
s u b m a r in e s n o w
and
e x is tin g
m in e -la y in g s u b m a r in e s ), w ith
p o r ts w h ic h
A llie s
23.
w ill
T h ose
and
and
le s s , a n d
of
by
th e
of
hands
to
s h ip s .
of
in
b e in g
w ar
of
retu rn ed
a ll
of
m a r in e s
n e u tr a lity
be
in fo r m a
G erm an
n a v ig a tio n
m erch ant
p r is o n e r s
s h a ll
e ffe c t
w ith in
le a v e
to
th e
w a iv e d .
th e
a llie d
w ith o u t
fo llo w in g
at
14
d is a r m e d
th e
and
r e c i
A llie s
v e illa n c e
and
of
th e U n ite d
th e
A llie s
ta k e r s b e in g le f t
S ix
la y e r s ,
sh ip s
b a tt le
50
d estro y ers
(in c lu d in g
to
be
v is io n
p a id
by
o ff
o f th e
th e A u x ilia r y
th e
and
sea
of
th e
s h a ll
under
of
of
th e
of
th e
of
S u b m a r in e s
im m e d ia te ly
S ta te s
d is a r m e d
s u p e r v is io n
th e
c o n d itio n s
e q u ip m e n t,
U n ite d
be
a ll
and
th e
a r tic le
read y
s h a ll
fo r
sea
s h a ll
orders
upon
by
w ir e
su rfa c e
in
S ta te s
th e
w a r s h ip s
S ta te s
of
w h ic h
o f A m e ric a
n e u tra l p o rts,
A m e ric a
U n ite d
and
S ta te s
s h a ll
to
be
d e s ig
d e s ig n a te d
p la c e d
of
be
s h a ll fo r th w ith
under
A m e rica n ,
th e
be
by
su r
o n ly
care
in c lu d in g 2
m in e
on b o a rd , n a m e ly :
c r u is e r s ,
b e d e s ig n a te d
th e
d ays.
in te rn e d
and
o f A m e ric a
s u b m a r in e c r u is e r s
e a r lie s t p o s s ib le m o m e n t.
G erm an
th e re a fte r
A llie s
r e m a in
p o rts
th e
S ta te s
a ll
c o m p le te a r m a m e n t a n d
A ll
G erm an
U n ite d
th e
ta k e
S ta te s.
t h e r e m a in d e r
The
not
and
U n ite d
in to
by
can
p erson n el
th e
t h e ir
b e s p e c ifie d
w h ic h
th e
(in c lu d in g
n a te d b y t h e A llie s a n d th e U n ite d
s h a ll r e m a in .
th e ir d is c o v e r y a n d d e s tr u c tio n .
a ll
22.
G erm an
th e
th e
pre
p r o c ity .
prep ared
fo r
G er
peace.
a s s o c ia te d
c a r r ie d
m a te r ia l
G erm an y
fr o n tie r
fin a n c ia l
a s s o c ia te d
be
of
of
th e
of
A llie s .
p r iv a te
T h is
naval
be
n ecessary
coal
le ft
and
r a il
bank
or
to
to g eth e r
le ft
w ill
te r r ito r y
( a s d e fin e d o n
o r d e p o r te d
paper
w a ters
A ll
m a te r ia l
th e
sh ops
te r r ito r ia l
p a rts
on
H o lla n d
e v a c u a te d
fro m
w ho
R u s s ia n
to
s u p p lie s
th e
general
R u s s ia n
of
A m e rica .
The
in
p u b lic
N o tific a tio n
5 ,0 0 0
days,
H ow
r e p a tr ia tio n
in
on ce
fr e e
en em y w h ic h
be g iv e n a s
and
th e
in
c o n c lu s io n
of
v ie w
tr e a tie s
I m m e d ia t e c e s s a tio n
in
L u xem bu rg.
36
and
s ig n a tu r e
th e m
w ith in
at
a
R u s s ia
w ith
W h ile
p ow er.
on
p ow ers
The
rem oved
b e fo r e
w ith o u t
fo llo w in g
sh ares,
spare
n ecessary
w ith in
by
S ta te s th a n
tio n o f th e
s h a ll
o ffe n se s
in te r n e d
any
now
b y a ll G e r m a n
b e fix e d
done.
t o u c h in g
and
o f p r is o n e r s o f
w ar
th e
be
a n n u ls
r a tific a tio n .
A u s t r ia -H u n g a r y
d e fin e d
convey
r e p a tr ia tio n
21.
s h a ll
p u rp o se o f m a in ta in in g ord er.
or
a llie d
th e ir
of
to
accord an ce
B e lg iu m ,
k in d s
a ll
of
in
tro o p s
e a ste rn
recovery
to
c o n d itio n
or
as
have
th e ir
th e
t io n
of
at
c iv ilia n
th e
s h a ll
on
fo r th e
The
20.
S ta te s
de
S ta te s
tre a tie s .
by
In d u str ia l
p ro secu ted
a ll
be
rem oved
of
s itu .
w agon s,
of
reveal
not
fo o d
in
to
d e liv e r e d ,
1 5 0 ,0 0 0
r e p a ir
fu s e s
k in d
be
in c lu d in g w a t e r w a y s ,
be
evacu a
th e
to
U n ite d
T h is
cou rse
be
o f th o se
cease
and
of
R e p a tr ia tio n
sto ck ,
of
a c c o r d in g
and
U n ite d
p erson n el
fr o n tie r s
(a s
rem oved
person s
e m p lo y e d
over
G erm an y
no
any
s ig n in g
c o u n tr y
at
»f
a s s o c ia te d
p o is o n in g
r e p r is a ls .
th e
th e
to
s h a ll
le ft
be
w ith
t r o o p s a n d s h a ll a s s i s t in
com m and
been
be com
a fte r
and
p resen t
B e lg iu m
tr a n s p o r tin g ,
of
w ay
th e
at
w a y s , s ig n a ls , a n d
barges
G erm an
to
th e
th e
done
te le g r a p h s ,
m a te r ia l.
in
le ft
o f c o m m u n ic a tio n
and
in
p erm an en t
a r m is tic e .
c iv il
be
to
r a ilw a y s
a s to
e q u ip m e n t
be
any
s h a ll b e h a n d e d
p erson n el
In
dam age
th a t
k in d s
s h a ll
p r io r
of
fro m
E vacua
days
o f c o m m u n ic a tio n
ord er,
e v a c u a tio n
of
in
b r id g e s ,
d e liv e r e d
m ile s )
s h a ll b e
be
S to re s
s h a ll
lo c o m o tiv e s ,
w o r k in g
be
th e
w o r k in g
upkeep
A ll
good
ordered
th e re
a ll
p erson n el
th o u sa n d
(2 0
31
m ile s )
o f G e r n s h e im
e v a c u a tio n
m u n itio n s ,
p erson
m easu res
A ls a c e -L o r r a in e
th e
R h in e
and
in
of
m eans
No
of
(2 6
fr o n tie r .
a ll
d e s tr u c tio n
e t c .,
road s,
so
in
s h a ll
e v a c u a tio n .
m ilita r y
s h a ll
fix e d
w ays
w ar
F iv e
fittin g s ,
p e r io d
fo r
in
and
r e m a in .
m o to r
and
c iv il
S w is s
enem y
h arm
im p a ir e d
m a n n e r im p a ir e d .
in
p a r a lle l
k ilo m e te r s
d ays,
No
and
k ilo m e te r s
th e
or
c a tt le ,
be
A llie s
E v a c u a tio n
19.
b etw ee n
th e
b e fo re .
not
tro o p s
and
R u m a n ia
a ll c iv ilia n s in te r n e d
R h in e
as
p resen t
G erm an
tro o p s to
h o ld in g
n o te a n n e x ed .
fo o d ,
fo r
30
th e
th e
by
of
th e
upon
16
e s ta b lis h m e n ts
sto res
to
m o v e m e n ts
dam age
p o p u la t io n ,
e s ta b lis h m e n ts
of
in h a b ita n ts.
m ilita r y
of
40
la n d s s h a ll b e
a c c o r d in g to
M ilita r y
th e
d u r in g
R h in e
it
of
by
m o n th ,
th e
th e
com e.
3 0 -k ilo m e te r
s im ila r ly
r ig h t
to
p a r a lle l
p e r io d
no
th e
H o lla n d
d is ta n c e
e v a cu a te d
th e
as
of
th is
a r m istic e .
w ill be r e g u la te d
The
18.
Cob
in
r e g u la te d
T u rkey,
th e
o f R u s s ia
G erm an s
17.
a llie d
w is h .
p r is o n e r s
can
s itu a tio n
s u p p le m e n ta r y
p e r io d
at
G erm an
p r is o n e r s ,
in
to r ie s a n d
a
and
1918,
G erm an
u n d e r ta k in g s , w ith
a s s o c ia te d
on
w ith in
R e n u n c ia tio n
V is tu la
by
R u m a n ia ,
has
G erm an
o th e r
th e
th e
o c c u p a tio n
U n ite d
p o in t s in
g a r r is o n s
p a r a lle l
fr o n tie r
fu rth e r
by
reserved
draw n
e n em y o f th e
of
and
th is
te r r ito r y
16.
th e
c o n tro l
The
and
of
and
r e g u la tio n
upkeep
s u b je c t o f t h e e x c h a n g e
be
w ho
fo r
tro o p s
to
E v a c u a tio n
15.
be
a ll
th e y
th e fr o n tie r s o f G e r m a n y a s
in s tr u c to r s ,
n o te .
on
th e
R h in e ,
th e se
to
accord
o f th e R h in e
under
o c c u p a tio n .
out
in
cared
1914.
w ith in
fo r
th e
th e
as
G erm an
w ounded
be
a c co u n t th e in te rn a l
tim e
to
A ls a c e -L o r r a in e )
r e c ip r o c ity ,
of
p ow ers
J u ly ,
s h a ll
The
(e x c lu d in g
w ith o u t
s h a ll c o n tin u e
w ar
G erm an
G erm an y
above
and
1,
2 5 ,0 0 0
fie ld ),
tro o p s
th e
th e
o c c u p a tio n
b r id g e h e a d s a t
p r a c tic a b le a
tio n
or
be
lin e
strea m
w ith in
s ig n a tu r e
a
fro m
fa r
p le te d
tio n
and
th e
s h a ll
d raw
of
c o n c e r n .”
fix e d ,
p r is o n e r s
of
A llie s
peace.
w ith d r a w
A u gu st
any
re g io n s .
on
a te ly
m ay
rhe
G o v e rn m e n t.
be
a llie d
by
“ su b je c t
th e m e d ic a l m a t e r ia l r e q u ir e d .
A ll
fo llo w
th e
The
S ta te s
in
of
of
2 ,5 0 0
a ir p la n e s .
U n ite d
la id
a r m ie s
of
b e lo n g e d
14.
G erm an
1 ,7 0 0
th e
a r m ie s
p r in c ip a l
have
fix e d
th ese areas.
r e g u la te d
( 2 ,5 0 0
c a r r ie d
le n z , C o lo g n e , t o g e th e r
and
12.
w ar
13.
th e
tro o p s
be
w h ic h
p e r io d
14
c o n v ic te d .
guns
S ta te s
w ill
w ill
Fran ce,
w ith in
tro o p s
th e
be
and
by
c o n d itio n s
th e
S ic k
r ito r y
te rm s.
or
G erm an
B e lg iu m ,
A llie d
in
T h e s e c o u n tr ie s on t h e le f t
by
of
11.
h ou rs a fte r
c o m p le te d
G erm an
c o u n tr ie s
tr ia l
A llie s
th e
te r r ito r ie s
g a r r is o n s
th e
be
w ith in
by
once
m ln e n w e r fe r s ,
th e
by
and
at
of
to
e v a c u a tio n
sta te d
th o u sa n d
o f th e R h in e .
th e se
a ir
s h a ll
one
e x e r c is e d
te r r ito r y ,
R h in e la n d
G erm an
The
th e
it
th e
r e p a tr ia tio n
w h ic h
w ar.
w ar,
TERM S.
c o u n tr ie s :
a r m is tic e .
c o n d itio n
d e ta ile d
be a d m in is te r e d
th e
th e
good
3 ,0 0 0
s itu
E v a c u a tio n
bank
to
F iv e
gu ns,
w ith
5.
th e
as
te r r ito r ie s
o c c u p a tio n
person s u nder
e q u ip m e n t:
d e liv e r e d
th e
b e g in n in g
in
in v a d e d
O c c u p a tio n
in h a b ita n ts
S urren d er
in g
in
ord ered
p ace w ith
and
annexed
h o sta g e s an d
4.
of
w ar.
w ill k ee p
R e p a tr ia tio n ,
d ays,
of
of
L u xem bu rg,
p r is o n e r s
a
3.
and
th e
be
o c c u p ie d
w hom
in
d is p o s e o f th e se
s p o t w ith
a b o v e -m e n tio n e d
fo r c e s jo in tly
m e n ts
b y la n d
A R M IS T IC E
to
s h a ll
a ll
th o se
im m e d ia te
p r is o n e r s
m an
o f th e a r m is tic e .
A ls a c e -L o r r a in e ,
days
OF
in
th e p r e v io u s c o n v e n tio n s o n
X IV .
ACCEPTANCE
w ith
c o n d itio n s
a b le to
re q u is itio n
o c c u p a tio n
lim in a r ie s
THE
of
A r m ie s
be ch arged
10.
On August 3 Belgium refused and the German troops there
after treated Belgium as an enemy ally o f France.
E X H IB IT
a c co u n ts
a
h in d e r
r ig h t
S ta te s
tro o p s
B e lg ia n
th e
has
The
U n ite d
of
w ill ta k e n o
s h e w ill le a v e th e la t e r s e t t le m e n t o f r e l a t io n s o f th e
J u stifie d h o p e
con
enem y.
39
10
r iv e r
th e
and
A llie s
fle e t*
b a ttle s h ip s ,
o f th e
m ost
c r a ft)
A llie s
are
and
c o m p le te ly
and
th e
(tr a w le r s ,
8
lig h t
m od ern
to
th e
be
m o to r
A ll
c o n c e n tr a te d
U n ite d
d is a r m e d
U n ite d
c r u is e r s ,
ty p e .
S ta te s
and
S ta te s
in
naval
under
A m e rica .
e t c .)
s u r fa c e w a r
bases
o f A m e ric a ,
p la c e d
of
v e s s e ls ,
o th e r
are
A ll
to
be
th e
and
to
are
su per
v e s s e ls
of
d is a r m e d .
ip
'(moons tvm oi&
shsdno d
4 0
COISGIIESSIOTS A I j HECOHT).
V e s s e ls
d e s ig n a te d
w ith in
sev en
fo r
days
In te r n m e n t s h a ll b e
upon
d ir e c tio n s
m e n t o f a ll v e s s e ls o f th e
24.
to
T h e A llie s
sw eep
m an
a ll
a u x ilia r y
an d th e
m in e
U n ite d
fie ld s
and
F reedom
n a v a l and
of
access
fle e t
S ta te s
s h a ll
of
to
to
a ll
a ll
by
and
fr o m
th e
s h a ll
fo rts,
o f A m e ric a
fr o m
th e
g iv e n
to
p ow ers.
and
in to
up
a ll
m in e s
w a ters
th e
and
o b s tr u c tio n s
w ith o u t
p o s itio n s
of
any
a ll
w ith in
q u e s tio n
su ch
of
m in e s
and
w ith o u t
n e u tr a lity
and
G erm an
b e in g
o b s tr u c tio n s
26.
The
e x is tin g
p ow ers
fo u n d
are
b lo c k a d e
to
s h a ll, g iv e
set
unchanged
a t se a a r e to r e m a in
S ta te s
c o n d itio n s
r e m a in
up
and
lia b le to c a p tu r e .
c o n s id e r a tio n
to
th e
by
a ll
th e
r a is e d
are
a llie d
G erm an
to
The
of
of
and
a r m is tic e
27.
A ll
G erm an
28.
naval
b ases
In
a ll
m a te r ia ls
p a r a tu s
29.
to
to
a ll
and
of
be handed
th e
m a te r ia ls
a ll
over
fo r
and
and
lig h te r s ,
in la n d
and
th e
U n ite d
p o r ts,
cran es,
n a v ig a tio n ,
a rm a m e n ts,
a ll
and
a ll
P r iv a te
N o n m ilita r y
R a ilr o a d
6.
Shares
th e
and
are
to
to
th e
A llie s
v e s s e ls
of
a ll
k in d s
No
d e s tr u c tio n
s e iz e d
in
U n ite d
to
in
be
The
w o r ld ,
and
G erm an
and
of
in
sh ip s
or
th e
S ta te s
h ar
w ith
th e
G overnm en t
p a r tic u la r ly
a llie d
or
and
by
th e
ap
im m e d ia te ly
33.
No
tra n s fe r s
p o r ts
to
G e r m a n y ’s
The
on
th e
be
and
to
th e
by
th e
tio n
on
9.
a ll
R a ilr o a d
of
m a te r ia l
s h ip p in g
of
by
10.
U pper
of
a r tic le s
a r m is tic e
except
order
in
to
th e
th e
is
a llie d
th e
O c e a n -g o in g
and
case
s h a ll
of
bad
of
It
not
D e liv e r ie s
fa ith
in
of
th e
c a r r y in g
th is
be
of
or
th e
th e m
act
o p tio n
a
in to
to
th e
of
p e r io d
th e
G erm an y
S a le
R h in e la n d
16.
Y ie ld
17.
H as
im p o s s ib le
fo r
o f th e
v a r io u s
r e m a in s
m e n t,
t io n
in c lu d e s
o n ly
be
p u r v ie w
of
o th e r
cu sto m s
sa n c tio n s
fro m
th e
g u a ra n ty
of
fig u re s ”
w o r ld
o th e r
m ark s
is
m ark et
th e
cost
it e m s
about
7 6 8 7 0 — 11
to o
of
an
(w o r ld
m ark et
in
CASH
to
ceded
by
th e
th e
r e c k o n in g s
by
D ecem ber
31,
31,
1922.
w h ic h
th e ir
th e
R e p a r a tio n
vary,
and
th e
G erm an s
not
th e
th e
com e
as
IV .
w ith
c o a l b y -p r o d u c ts ,
a n i
m a c h in e r y ,
p a in tin g s ,
la r g e
lo w
coal
V.
A
m a te r ia l
revenu e
ta k e s
5 2 0 ,5 T 6
1, 5 8 0 , 00 0
(sc ra p ),
fr o m
th e
recovery
6 9 , 337
a c t _____________________________
e x p e n d itu r e s
of
2 0 0 .0 0 0
eco
1 9 2 1 ___________________________________________
126, 295
A ls a c e -L o r r a in e ,
a g r e e m e n t, g u a r a n tie s
OTHER
PAYM ENTS
AND
c o sts
of
o c c u p a tio n
to
th e
in
th e
fir s t
in s ta n c e
by
th e
as
th e
w h ic h
at
by
p a id
by
G erm an y
a m o u n ted
C ost
of
th e
R e s titu tio n s
22.
N avy
to
3 .4
R e p a r a tio n
m ark
d e liv e r ie s
b illio n
in
g o ld
o c c u p y in g
ad van ces—
k in d .
m ark s
T h ese
on
A p r.
in te r n e d
and
and
and
th e
o th e r
8 0 1 ,0 0 0
In
su b s titu tio n s
or
(i.
e .,
s u b s titu te d )
d e liv e r ie s
of
of
m a c h in e s,
90, 000
m a
t o o ls ,
.
a n i m a l s — e s t i m a t e ____________________________________
in
e q u ip m e n t
186,
C o m m is s io n
c o m m i s s i o n s _________________________________________________
d e liv e r e d
to
th e
Scapa
in
A llie s
F lo w ,
T s in g ta u
in c lu s iv e
ceded
to
th o se
of
400, 000
v e s s e ls
th e
m a r in e
J a p a n — a r tic le s
184,
1, 417, 000
3, 371, 00 0
V,
M ilita r y
E X P E N D IT U R E S
d is a r m a m e n t
e s t im a t e — i.
aged
or
m is s io n ,
no
c r e d ite d
e .,
s o ld
to
w ere
th e
LO SSES
W IT H IN
of
s a le s
GERM ANY.
of
sc r a p ),
navy,
or
a ir
m a te r ia l
d e liv e r e d
to
th e
R e p a r a tio n
w h o le
in
AND
(e x c lu s iv e
arm y,
d estro y ed ,
m o s t ly
scrap
of
but
of
T o t a l ______________________________________________________________________
23.
188
e x c lu s iv e
t r e a t y ----------------------------------------------------------------------
d er,
ac
603, 000
advances
1 9 2 2 ) __________________________________________________________________
m ark et
g o ld
m ark
p ow ers
m e t w ith o u t
th e
coal
D E L IV E R IE S .
in c lu d in g
G e rm a n te r r ito r y , a n d
in c lu d e
th o u sa n d
e t c . ) ____________
( t h e e x t e r n a l c o s t s o f o c c u p a t io n — i. e ., t h e e x p e n s e s ,
in
d e liv e r e d
G erm an
to o ls ,
In te rn a l
The
Saar
2 ,3 3 3 ,6 0 0
th e
19.
sta te
w ith in
C o m m is s io n ,
th e
c o m m is s io n
under
on
e t c .,
la t te r
G erm an s
6, 0 2 0 . 391
C l e a r i n g ________________________________________________________________________
R epara
m in im u m .
fig u re s
tim e s
reck on
at
a
The
does
several
G erm an s
as
1922;
are
c o m m is s io n
th e
tak en
been
p r i c e ) __________
accordan ce
w ar
o th e r
c o m m itte e ,
and
a
had
w a terw a y s,
18.
72
p a id
G erm an
2 ,2 3 8 ,4 3 3
A m e rica n
PAYM EN TS.
dam aged
of
r e s titu te d
and
in
em b argo
p r o d u c ts,
p e n s io n
sh ip s ,
a
D en
b o a t s ___________________________
r iv e r
and
(w a r
te r ia l
a cco u n t,
d istr ic t,
v e s s e ls
L o u v a in ,
E n g lis h
in
h e r e w ith
be
C o m m is s io n ;
g iv e n
lis te d
m ay
abroad,
lo w ;
p r ic e ,
$250.
H em el
r a il
(in c lu s iv e
164, 368
te r a llie d
m a r in e ,
o th e r
te r r ito r ie s
2, 140, 000
30,
m erch ant
and
th e
m o to r
T o t a l ______________________________________________________________________
th e
w ith in
has
AND
e t c . ) ________________________________________
co sts
G erm an y
th e
8, 600. 000
29 , 39 4, 000
e x c h a n g e ______________________________________
and
t h e a m o u n t to b e c r e d ite d
m a x im u m
A u gu st
p ro p e rty
th e
of
to
m in e s ,
p resen t
a
w h ic h
liq u id a t e d
as
as
p a y m e n ts
S ta te
r e c o g n iz e d
Saar
th e r e fo r e
regarded
R e p a r a tio n
** p r o v i s i o n a l
p r ic e ;
th e
th e
are
count
as
p a y m e n ts
p ro p e rty
w hat
ac
w ith
p a rts,
sto ck ,
in s ta n c e ,
of
fo r e ig n
F r a n c o -G e r m a n
P a id .
p r e c is e ly
392, 648
1 1 , 7 4 0 , 000*
e s t i m a t e ________________________________________________________________________
20.
V e r s a ille s , b e c a u se
sta te m e n t,
a ll
G erm an
and
of
W e
m ay
C o m m is s io n
fo r m e r
d e te r m in e
su ch
u n s e ttle d .
w h ic h
c lu d e s
to
tre a ty
ite m s ,
and
(fo r
d estro y ed
21.
is
in
C A P IT A L
accord an ce
of
r e c o n s tr u c tio n
M is c e lla n e o u s
of
in
In
con
X V .
G erm any
9 ,6 1 1
th e
a r tic le
ceded
reserve
are
W hat
It
a llie s
ceded
III.
(See Exhibit 21: Conditions of armistice.)
e x e c u tio n
in
r o llin g
b y -p r o d u c t s
term s
P a y m e n ts
h o u r s o f n o tific a tio n .
E X H IB IT
w ith
N A T IO N A L
w h ic h
U n iv e r s ity
f ix e d ,
c o m m is
a u th o r ity
on
p h a r m a c e u tic a l
born e
by
fo r m e r
(in c lu s iv e
s h ip s
fo r
13.
c h ie f.
re fu se d
accord an ce
of
th e
b est
a r m is tic e
under
v a lu e
T o t a l ________________________________________________________________________ 1 1 , 1 1 3 , 0 0 0
execu
e x e c u tio n .
under
and
a b r o a d _____________________________
e x c lu s iv e
w ood s,
c o n tr a c tin g
th a t
w ith in
in te r n a tio n a l
s h a ll
a cce p ted
w ith
d e n u n c ia tio n
c o n v e n tio n
perm an en t
c o m m is s io n
to
one
1, 8 9 7 , 1 5 0
(p a r t be
P R O D U C T IO N .
m a ls ,
to
o f a n y o f th e above
u n d ersto o d
w arrant
n a v a l c o m m a n d e r s in
a r m is tic e
by
is
in s u ffic ie n t e x e c u t io n
a
T h is
and
den oun ced
n o tic e .
e x e c u tio n
p r in c ip le
T h is
be
18
of
th e
a d m itte d .
m ilita r y
85.
m ay
p r e v io u s
R h in e
fis h in g b o a t s , s h ip s o f in la n d
w ith o u t
15.
d e s c r ip tio n
d ays,
30
7 9 . 4 10
by
fo r
m a te r ia ls or n o t,
to
be
e v a cu a te d
t r e a t y _________________________________
th e
G ov
retu rn
th e
is
in
e q u ip m e n t!
12.
v e s s e ls
of
fa ilu r e o f e x e c u tio n
in
In c lu d in g
v e s s e ls
and
h arb or
th e
o f th e a r m is tic e .
a r m is tic e
6. 507, 616
in
E u p e n - M a l m e d y ) ____________________________________
and
Coal
D enm ark,
sig n a tu r e
grou n d
assu m e
d itio n s ,
sio n
on
3
her
peace
S ile s ia ,
and
p la c e d )
th e
of
t a k e p la c e a ft e r
h ou rs’
a ll
w a ters
b e fo r e
G erm an
in
any
S ta te s
f r o n t __________________
th e
Bank
d e liv e r e d
e q u ip m e n t
m ark ,
a llie d
to
a r m is tic e
48
on
th e
CURRENT
14.
m erch ant
over
II. P A Y M E N T S A N D D E L I V E R IE S F R O M
11.
Sw eden,
w h e th e r
th e
T o t a l ____________________________________________________________________
and
retu rn ed ,
p e r m itte d
a s th e e x p o r t o f s h ip b u ild in g
o f G erm an
are
d u r a tio n
th e
p a r tie s
w ith
lo c o m o tiv e s ,
t r a d in g o f t h e ir
w h e th e r
in te re sts,
of
w estern
liq u id a te d
road
g o v e rn m e n ts
o f N orw ay,
p la c e d
c o u n tr ie s ,
G erm an
n eu tra l
and
S ta te
tru ck s,
b e sp e c ifie d
be
th e
p e a c e t r e a t y _____________________________________________
c la im s
a r m is tic e
n o tify
G o v e r n m e n ts
D u r in g t h is p e r io d , o n
c la u s e s ,
th e
M orocco
p ro p e rty
cordan ce
are
w it h o u t r e c ip r o c ity .
to
and
th e te r r ito r y
b r id g e s
Sea
w a r lik e
to
(e x c lu s iv e
B a d e n ) ____________________________________________________
th e
o f th e
n o m ic
34.
e x te n d .
on
R u s s ia n
a ll
c a n c e le d .
a n y n e u t r a l fla g
in
term s,
o f A m e ric a ;
b e lo n g in g
m a te r ia ls
w ill
a s s o c ia te d
p r iv a te
sp e c ific c o n c e s s io n s , su c h
are
le ft
tro o p s
a ll
and
B la c k
a ll
are
S ta te s
c a b l e s _____________________________________________
p o n to o n
to
G erm an
28 , a re to be abandoned.
hands
o f A m e ric a
in
p a rts
c la u s e
G erm an
H o lla n d , t h a t a ll r e s t r ic t io n s
ern m en t
p u b lic
and
of
260
e v a c u a tio n , su rre n d e r, or r e s to r a tio n .
32.
R e ic h
s to c k s a n d b o n d s d e liv e r e d
in
and
sto res
G erm an y,
r e le a s e d ;
th o se
to b e r e s t o r e d
S ta te s
by
G erm an y
th e
are
s p e c ifie d in
p ow ers are
th e U n ite d
and
se iz e d
v e s s e ls
and
be e v a cu a te d
s e iz e d b y
th e
A ls a c e -L o r r a in e ,
th e
p ro p e rty
G erm an
lo n g in g
s h a ll
o th e r
a ir c r a ft,
a ll
of
S ta te s.
G erm an y
and
and
a r m is tic e
m erch ant
a s s o c ia te d
31.
A llie s
c o a sts
tu g s,
arm s
Sea p o rts
m erch ant
A ll
A llie s
th e
im m o b iliz e d
pro perty
150, 000
7.
and
of
c e s s io n
ABROAD.
1 ,0 1 7 .5 7 0
4.
d u r in g
as n ecessary.
c o n c e n tr a te d
B e lg ia n
s h ip s ,
G e r m a n m a te r ia ls , a s
and
be
by
a ll d e s c r ip tio n s
m a te r ia ls
30.
to
s p e c ifie d
sto res,
A l l B la c k
n eu tra l
and
are
and
AND
________________________________________________________
8.
o f a ll k in d s .
v e s s e ls
o th er
be
m erch ant
m a te r ia ls ,
w ar
a ir c r a ft
e v a c u a tin g
abandon
bor
t o th e e x te n t r e c o g n iz e d
R E IC H
m i n e s ______________________________________________________
8.
th e
of
E u p e n -M a lm e d y
th e U n ite d
G erm an y
R e ic h
P r o p e r ty
2. Saar
be
s h ip s
th e
E u p e n -M a lm e d y ,
Add:
a s s o c i
m erch ant
A llie s
p r o v is io n in g
and
THE
h an d
c o l o n i e s ) ___________________________________________________________________
w orks
B a ltic , an d
P r o p e r ty
of
th e
T o se
d e fe n s e
th e
sta te m e n t.
on
G o ld m a r k s
(in t h o u s a n d s ).
1.
b e in d ic a te d .
be
G erm an
m a t e r ia l s
G er
in d ic a te d .
a ted
from
r ig h t
o u ts id e
s h a ll be em p o w e re d
b a tte r ie s ,
th e C a tte g a t
i. d e l i v e r i e s
W IT H IN
have
a n d a s s o c ia te d
fo r tific a tio n s ,
th e en tra n c e s
to
arm a
sh ore.
G erm an y
B a ltic
The
p o rts
m ilita r y
th e p o s itio n s o f th e se a re to
to
G erm an
th e
5.
sw eep
te r r ito r ia l
and
G erm an
k i n d s in
le a v e
A m e ric a
m e r c a n tile m a r in e o f th e a llie d
occu py
to
and
be p u t on
la id
c u r e t h is , th e A llie s a n d th e U n ite d S ta t e s
o f a ll
ready
w ir e le s s ,
o b s tr u c tio n s
te r r ito r ia l w a te r s , a n d
25.
by
or
broken
G erm an y,
A llie s .
c r e d ite d
to
th e
The
up
to
th e
p roceeds
y ie ld
c a p ita l
undam
o f w h ic h
fro m
accou nt
Com
h ig h e s t
th e
b id
w ere
s a le s
( v id e
of
su p ra
1 4 ) ___________________________________________________________________________
6. 250. 000
-v
W
41
CONGEE SSI ONAL R E COE D.
G o ld
III.
m ark s
D IS T R IB U T IO N
O F R E C E IP T S .
(in th o u s a n d s ).
d i s a r m a m e n t — e s t i m a t e _______________________________
24.
In d u s tr ia l
25.
N o n m ilita r y
m a te r ia l le f t b y
26.
th e
t e r r ito r y
e v a c u a te d
e a ste rn
M is c e lla n e o u s
tie r s ,
of
th e
of
(c o sts
care
G erm an
on
p le b is c ite s ,
r e fu g e e s,
tro o p s
in
2, 700, 000
1 ,0 5 0 ,0 0 0
fr o n
482, 000
U n ite d S t a t e s 1 ................................................
B r itis h E m p i r e " .............................................
F r a n c e 8 ................................................................
I t a l y ........................................................................
2 ,6 3 1 ,1 0 7
10, 482, 000
V I.
D e liv e r ie s
fr o m
P a y m e n ts
and
m a te r ia ls on
d e liv e r ie s
SUM M ARY.
h a n d ______________________________________
fr o m
n a tio n a l
c a p ita l
and
29, 394, 000
O th e r
p a y m e n ts
2, 140. 000
a n d d e l i v e r i e s _____________________________________________
lo s s e s w ith in
4 ,4 5 3 ,8 1 8
1 1,0 07,2 83 t h o u s a n d g o ld m a r k s s t i ll u n p a id .
8 60 ,1 5 9 t h o u s a n d g o ld m a r k s s t i l l u n p a id .
8 155,635 t h o u s a n d g o ld m a r k s s t i ll u n p a id .
p r o d u c t i o n _________________________________________________________________ 11 > 1 1 3 . 0 0 0
p a y m e n t s __________________________________________________________________
and
6 8 ,2 4 6
538
2 ,0 4 2
cur
C ash
E x p e n d itu r e s
5 9 ,0 0 0
635
6 ,0 3 1
5 9 ,4 9 1
1 ,0 9 7 ,6 2 1
1 ,4 2 5 ,7 6 4
1 9 6 ,8 2 9
6 7 ,9 7 8
1 ,4 6 3 ,4 7 7
1 4 2 ,6 5 8
1, 7 5 4 ,4 6 5
2 5 4 ,6 4 0
T o t a l .........................................................
1 4 1 ,9 2 2
1 0 1 ,0 1 3
15 7,72 3
8 ,9 7 8
1 ,2 0 8 ,2 0 2
13 6 ,6 2 7
5 9 ,4 9 1
9 5 5 ,1 6 1
1 ,3 2 2 ,7 0 9
3 9 ,1 0 6
B e l g i u m .................................................................
O t h e r s .....................................................................
d e te r m in in g
e t c . ) — e s t i m a t e --------------------------------
T o t a l ______________________________________________________________________
ren t
I n t h o u s a n d g o ld m a r k s .
C o u n tr ie s.
th e
fr o n t -e s tim a te —
3, 371, 000
G e r m a n y -------------------------------------------
G o ld m a r k s
10, 482, 00 0
(in th o u s a n d s ).
T o t a l ________________________________________________________________________
If
to
o n ie s ,
th is
and
of
te r r ito r ie s
and
to ta l
th e
th e
be
p u r e ly
added,
d e liv e r ie s
v a lu e
of
A ls a c e -L o r r a in e ,
m ilita r y
m a te r ia l
th e
fig u r e
r e p r e s e n tin g
w e ll
tuds
above
1 0 0 ,0 0 0 .0 0 0 ,0 0 0
T h e A l l ie d
The
yet
r e p a r a tio n
a v a ila b le
fr o m
c o m m is s io n
in
in
any
th e
th e
56, 500, 000
G erm an
v a r io u s
G erm a n y ’s
g o ld
c o l
e v a c u a te d
to ta l
p a y m e n ts
(p r o v is io n a l
f i g u r e ) _______________________________
C e s s io n
to
D a n z ig
(p r o v is io n a l
f i g u r e ) _________________________________
O th e r it e m s
fo rm .
are
not
The
1,
PAYM EN TS
1921,
arm y
TO
c o m p le te ,
fo llo w in g
co sts
AU G U ST
and
31,
coal
nor
are
s u m m a r ie s ,
th e y
ta k e n
c a p ita l
debt
On
p o s t-M a y
ad van ces,
ac
On
s c h e d u le
1921,
arm y
o f p n y m e n ts
c o sts
2, 504. 342
a c c o u n t ----------------------------------------
2 6 8 ,1 9 0
a c co u n t:
On
in s ta llm e n ts
due
to A u g .
On
in s ta llm e n ts
fa llin g
An
1 9 2 2 __________________________
1 ,9 5 2 .9 2 3
1 9 2 2 __________________
38, 023
T o t a l _______________________________________________________________________
in
to ta l
g o ld
21
per
c e n t,
o r in fo r e ig n
g o ld
m ark s,
g o ld
m a r k s , w a s p a id
w as
p a id
due
or
15,
1 ,5 6 2 ,2 4 4
curren cy; 45
in
in
O c t.
k in d ; a n d
S ta te
per
34
per
p ro p e rty
in
th o u sa n d
g o ld
m ark s,
fo r
if
th e
th e
ii.
th e
absorbed
S in c e
expen se
of
56
a r m is tic e
A bandoned
R o llin g
e ffe c te d
th e
G erm an y
paym en ts
th o u sa n d
o f su ch
k in d .
in
w ar
sto ck
m ake
1.
(in t h o u s a n d s ).
l o c o m o t i v e s ) __________
4 ,5 5 3
17, 509
F ix e d
r a ilw a y
2. 461
m a t e r i a l ------------------------------------------------------------------------------
A g r ic u ltu r a l
m a t e r i a l -------------------------------------------------------------------------
of
r e p a r a tio n
A nnex
S h ip s
1, 451
a c t ------------------------------------------------------
1 1 4 ,7 4 4
3.
t o n s ) -----------------------------------------------------------
706, 129
i n s t a l l a t i o n s _____________________________
A nnex
m a t e r i a l -------------------------------------------------------------------------
( 9 9 ,8 0 0
sh eep ,
2 1 ,6 6 4
h orses,
g o a ts,
1 7 5 ,4 3 9
2 4 5 ,6 8 8
M is c e lla n e o u s
under A n n exes
U nder
4.
of
C o a l,
coke,
m e tr ic
II
and
c a ttle ,
2 1 8 ,0 7 6
1,
v a lu e
A p ril
I V ----------------------------------------------
110, 208
lig n ite
c o n v e r te d
(a c tu a l
to n n a g e
to n n a g e,
s u s p e n s e -------------------------------------------------------------------------
7.
24,
V I :
P h a r m a c e u tic a l
k i l o g r a m s ) ---------------------------------------------------
p ro d u c ts
( 7 5 3 ,7 7 5
k i l o g r a m s ) . ! ------------------
to
R e p a r a tio n
8.
1 2 .8 1 3
49, 000
3 ,4 0 6 ,3 8 7
in
U n ite d
c o n v e rte d
of
o ffe r
by
of
th e
th e
“ G erm an
fo llo w in g
fa ilu r e
su m m a ry
peace
by
M ay
d e le g a tio n
1,
1926,
at
and
V er
8 6 ,0 0 0 ,-
p a y m e n ts.
of
S im o n ’s
G erm an
to
28,
fin a l s e t t le m e n t
G erm an
la b o r
fo r
p resen ted
at
r e c o n s tr u c tio n
proposal
of
m ark s,
w ith
g o ld
paym ent
of
in te r e st
a
at
to ta l
5
per
be
n o te
to
a m o r tiz e d
th e
in
G overnm en t
A m e ric a n
accord an ce
p ro
w ith
an
in d e x
fig u r e
1922.
P la n s
fo r
28,
F u rth e r
fis c a l
r e fo r m s
and
p a y m e n ts,
su b
C o m m is s io n .
1922.
N ovem ber,
238
m e tr ic
t o n n a g e ______________________
S ta te s T e x tile
A llia n c e
G erm an
p r o p o s a ls
( 6 2 6 ,8 0 6
F u rth e r
v is it
s u b m itte d
to
R e p a r a tio n
Com
p r o p o s a ls
Cuno
s u b m itte d
to
R e p a r a tio n
B e r lin .
P r o p o s a ls
P o in c a ir d
1928.
to
by
g ra n te d
K a rl
h im
B ergm ann ,
no
not
o ffic ia lly
su b
a u d ie n c e .
p r o p o s a ls .
W H A T GERM ANY
W ith
X V I.
( 2 ,8 4 1 ,4 9 7
th e
G erm an
and
th e
to ta l
c e s s a tio n
p a id
la r g e
to
s u m s — p r o b a b ly
an
th e r e fo r e
end.
an
It
m ay
8 ,0 2 8
T o t a l ---------------------------------------------------------------------------------------------------------------
8, 818, 542
of
up
be
a p p r o p r ia te
fo r m a l
a ll
to
th a t
an nouncem ent
p a y m e n ts,
th e
no
m om ent
w h ic h
fu ll
m ore
fo r
of
in c lu d in g
G erm an y
lim it
of
her
ever
w ill
be
r e v ie w in g
and
its
bank
d e liv e r ie s
In
c o n tin u o u s ly
c a p a c ity — h a s
p a id .
T h is
e s tim a tin g
is
her
p a s t p e r fo r m a n c e .
m in d
of
e s tim a te s
c la im s
th a t
th e
p u b lic
has
have
been
w h ic h
sh e
has
a lr e a d y
h e a d lin e s t h a t s h e h a s p a id
4, 564
H A S P A I D ----- K E Y N E S .
G o v e r n m e n t’s
k in d , t h e fir s t p h a s e o f r e p a r a t io n s d u r in g
of
50, 074
k i l o g r a m s ) ________
T 6878— 11— — 6
buyers
its
1923.
2,
M ay
1922.
d u r in g
Janu ary,
The
( 2 ,5 2 5 ,S 1 4
k i l o g r a m s ) --------------------------------------------------------------------------------------------------
cent
p r o s p e r ity .
becau se
C o m m is s io n :
C o a l, co k e , a n d lig n ite to L u x e m b u r g
to
fo l
m a in ta in e d
per
about
g iv e
G erm an
m ark s
annual
R e p a r a tio n
M ay
com e
c a b l e s _____________________________________
M i s c e l l a n e o u s _______________________________________________________________
D y e s tu ffs
4 8 ,9 3 7
V II:
to
m ade
we
p ro p o sa l fo r
D o cto r
1921.
Janu ary
ru p tcy
( 1 7 ,3 6 3 ,9 9 0
D y e stu ffs
th a t
tlic
5 0 ,0 0 0 ,0 0 0 ,0 0 0
to ta l,
m itte d
22, 855
to n s ;
86
of
it
d is t r ic t s .)
30, 970
by
m arks
curren t
OFFERS.
E X H IB IT
c o a l ------------------------------------------------------------------------------------
S a le s
th a n
of
c e s s io n s
a r m ie s )
c o m m is s io n s
m ore
g o ld
out
fr o m
o c c u p y in g
w o u ld
776, 618
of
A nnex
and
been
g o ld
G en eral
m e tr ic
in
S u b m a r in e
th e
p a id
p a id
It
4 1 ,0 1 9 ,4 3 2
4 5 ,7 6 0 ,0 5 3
c r e d it
U nder
of
r e p e titio n
of
sam e
G erm an
6.
1 5 7 ,0 7 3
B y -p r o d u c ts
A nnex
have
A llie s ”
N o te
1921.
9.
and
to n s;
D y e stu ffs
a r m ie s
n o n in te r e s t -b e a r in g
C o m m is s io n
p o u l t r y ) ____________________
t o n s ) --------------------------------------------------------------------------------------------------------------C o a l,
1919.
12, 1920.
M arch
m itte d
V :
A nnex
7 ,0 0 0 ,0 0 0 ,0 0 0
of
th a t
p a id
w as
u se
fo o d
m is s io n .
R e c o n s tr u c tio n
L iv e sto c k
been
th a n
b e in g
fo r
adds
He
G erm an y !
2 0 ,0 0 0 ,0 0 0 ,0 0 0
(In c lu d e d
p o s in g
19, 81 0
IV :
th e
had
been
advances
a g re e m e n t.
on
has
c e n t.
24, 836
w a te r c r a ft a n d
In
J u ly
c a p ita l
5.
gross
to
th e
p a id
to ta l
ab sorb ed
sta te m e n ts
o f th e d e v a s t a t e d
I I I :
( 2 ,5 9 3 ,0 5 7
I n la n d
recovery
29,
o ffe r e d
0 0 0 ,0 0 0
22, 709
L i b r a r y -----------------------------------------------------------------------------------------------------
P roceeds
44, 350
7, 397, 553
p r o p o s a ls :
s a ille s
8 2 6 ,6 5 3
t r u c k s _______________________________________________________________
L o u v a in
cars,
817, 804
lo o s e
p r o p o s a ls
M ay
Spa.
m a t e r i a l _____________________________________________
( 1 2 7 ,0 3 9
m any
and
Spa
cen t
G E R M A N Y 'S
So
te r r ito r ie s .
c o n v e n tio n :
563, 289
c o m m e n ts
to ta l
th is
per
th e
fro m
th e
m ore
of
35
have
of
o c c u p a tio n
th e
cent
of
e x a cted
th e
of
w ith o u t
ex p en ses
in
p a y m e n ts
c e n t, o r 2 ,5 0 4 ,3 4 2
m ark s
of
cent
o c c u p a tio n
a r m ie s
per
per
under
cent
85
39
th e
r e m a in in g
th a t
heavy
w as
M o to r
U nder
of
th e
per
o n ly
(th e
p r o p e r ty
to
ceded
8 0 5 ,5 1 4
a sse ts :
F e d e r a l R e se r v e B u lle tin
th e
th a t
m ade
A llie s
th e
in
out
m in e r s
cost
p r o d u c tio n
2.
U nder
by
Ruhr
p a id .
S ta te
w r ite r
p o in tin g
to ta l
th o u sa n d
G o ld
U nder
fig u r e s ,
c e n t, o r 3 ,8 1 8 ,5 4 2
th e
u n d is tr ib u te d
3 0 0 .0 0 0
1 ,7 3 0 ,5 8 2
1 9 2 1 _________________________________________________________
7 ,8 8 5 .1 2 8
th is
U nder
and
f i g u r e ) ______________________
1 9 2 1 ___________________________________________________________
1,
anonym ous
th e se
lo w s
15,
su sp en se
1,
have
2, 621, 650
a c c o u n t ______________________________________________________
1,
m ark s
(in t h o u s a n d s ).
1922.
c o u n t ______________________________________________________________________________
On
in
(p r o v is io n a l
T o t a l __________________________________________________________________________
ab sorb ed
p r e -M a y
p a id
P o la n d
P o s t -M a y
' G o ld
I.
Of
F ran ce— S aar
to
P r e -M a v
a v a ila b le :
On
to
C e s s io n
m ark s.
F e d e r a l R e s e r v e B u ll e t i n f o r F e b r u a r y , 1 9 2 3 , a r e th e c le a r e s t
th e
C e s s io n
Sum m ary.
a cco u n ts
s im p le
of
A part
ite m s ,
fr o m
th ere
n a m e ly ,
th e
d iffe r e n c e s
are
to ta l
tw o
of
sets
fin a n c ia l
been
e x tr e m e ly
c u r r e n t,
p a id
m ore
n o th in g a t
o p in io n
of
as
fig u r e s
bu rd en
c o n fu se d
v a r y in g
th an
fro m
by
th e
v a r ie ty
G erm an
£ 2 ,2 0 0 ,0 0 0 ,0 0 0
to
o ffic ia l
p ress
a ll.
to
th e
w h ic h
th ro w n
e s tim a tio n
have
on
been
G erm an y
of
p a r tic u la r
d is tin g u is h e d ,
by
th e
peace
GP
a u oo n x ivNoiss^mf^MOC)
42
CONGRESSIONAL RECORD.
tre a ty
and
tre a ty
to w a rd
on
th e
G erm an y
not
a lth o u g h
fo r
oth e r
cost
to
G erm an y.
and
d e liv e r e d
N ow
if
it e m s
m e e tin g
if
we
m u ch
are
of
th e
tre a ty
us
b e g in
R e p a r a tio n
th e
th ree
e s tim a te
c a te g o r ie s :
0 0 0 ,0 0 0 ;
w hat
£ 4 1 1 ,0 0 0 .0 0 0 .
th e
fo rm
hand,
at
of
a
and
th e
p ro p e rty
in
I
at
th in k ,
th e
U et
us
coal
and
th e ir
tre a ty , .i t
is
in
th e m
by
th e
S ta te
Thus
th e
w ith o u t
of
tio n
m ay
be
sto ck .
a ll
It
v a lu e
som e
m ent
as
of
w h a te v e r it
one
of
th e
tre a ty
th e
th e
to n
be
th a t
th e
G erm an
b ecau se
b u s in e s s
c a n t ile
p la c e d
o ffe r e d
a fte r
by
lig u r e
cost
som e
of
not
can
th e
th e
by
is
76870— 11
m a r in e ,
de
Com
fo r
th e
le s s
The
th e
a
has
to
The
h ig h
of
th an
a ll
is
of
one
has
by
Saar
say,
d istin c t
th a n
on
m in e s ,
d e s tr u c tio n
J u s tic e .
th e
fo r
It
fr o m
d e liv e r ie s
th e
at
a
depends
a r e ta k e n
r e p a r a tio n
G erm an
m er
r e p a r a tio n
o f le s s
th e
up
we
ite m
m ay
th a t
Is
not
N o one,
a
th a n
s ix
p e r p e tu a lly
by
ite m
fa ir ly
I
o f th e
v a lu e
to
fig u r e
th e
A llie s
th a n
On
and
of
to
any
n il.
I
b a s is
th e
of
as
to
th e
a lto g e th e r .
have
to
th is
been
e x te n t
lia b ilitie s .
th e
of
e x te n t
th e
s u r p lu s
rep re
is
proceeds
d is c h a r g e
D.
The
th a t
th e
lia b ilitie s
can
fo r m e r
to
in g
p a y m e n ts
The
in
be
of
a p p lie d
a llie s — o r
has
it
U n ite d
c a p ita l
to
have
th e
a
abroad
and
h er
p e r io d
n et
is
n a m e ly ,
at
£ 6 5 0 ,0 0 0 ,0 0 0 — a n d
h as,
som e
per
of
fo r
and
a sse ts,
m e n ts
to
F rench
th e
to
1923
d is p u te ,
s h o u ld
th a t
sh e
be
sh e
has
to
ord er
by
of
is
fille d
th e
pounds
w ith
h er
v a lu e
in
th e
fig u r e ,
one
M c
a llo w
d a te .
or
T h ere
tw o
G erm an y’s
ite m s ,
pre w ar
h e r w a r lo a n s
cou rse
of
of
“ good
m ost
th ro w n
and
her
ev en ts,
w ill ”
e n o r m o u s ly
we
F rench
charges
her
is
on
can
and
in
p e o p le in
broad
th in g
th a t
c r e d ito r s .
w ar
her
fo u r
her
fo r e ig n
fo r e ig n
in v e st
G erm an
e q u iv a le n t
a fte r
p r o s p e r ity
th a t
fo r
th e
of
e ffo r t
of
th e
ev en t,
th e
by
G erm an
1873.
th a t
and
T h ese
paym ent
of
th e
th e
Judge
her
h is to r y
of
th e
G erm an y
rem em b er
b u lk
th a t
r e la tiv e
1919,
on
by
we
in
th e
o u tlin e s
of
c e r ta in
G erm an y
lia b ilitie s ,
If
th an
and
th e
in
burd en
resou rces
e a s ily
fo r
F ran ce
c le a r
m ore
w e a lth
th e
real
a n o th e r
It
and
G erm an y
W ar.
p r e v io u s
in ta c t.
th e
a
e x h a u s tin g
w ay
fa c ts ,
m oney
and
rep rese n ts
th a t
had
on
of
1871
F r a n c o -G e r m a n
o u tra g e o u s
evaded
c h e a te d
th e
in d e e d
th e se
an
in
a lm o s t
as
by
lo s s
and
£ 1 ,2 9 0 ,0 0 0 ,0 0 0
to a la te r
th is,
an
th e
W a s h in g to n ,
my
r e g a r d in g
to
reach
o p e n in g
M o u lto n
w ith
up
d is c h a r g e
to
b e fo r e
w r ite r s
v a lu e le s s
th e
p e r io d
In
agrees
en orm ou s
su r
p ou n ds, and
E c o n o m ic s
a d d itio n
to
and
b illio n
Pay,
us
G erm an y
a
th e se
of
to
a r m is tic e
of
c a lc u la tio n s
F ran ce
one
e ffe c ts
and
of
it is
has
cost
th is
in
to
b etw ee n
an
th e
F ran ce
h ig h
n o t to o
o r g a n iz a tio n .
th e
in
th e
to o
p r o b a b ly
o b lig a t io n
th e
c a lc u la t io n
a lm o s t
In
of
re p re se n te d
fa c e
of
fin d
In s titu te
m y
d o u b le
lik e
in d e m n it y ,
th e
h er
exceed ed
to
th is
w h ic h
chan ge
lo s t
c o m p a r a tiv e
In
and
fo u g h t
th e
has
appears
is
fin a n c ia l
£ 1 ,3 0 0 ,0 0 0 ,0 0 0 .
ren d ered
a fte r
w hereas
pay
but
and
d a te
has
e s tim a te
been
th a n
had
and
th e
C a p a c ity
th e
to ta l.
been
th e
had
and
th e
had
m ade
d iffe r e n c e s
p o p u la tio n
m ore
G erm an y
has
by
£ 1 ,0 0 0 ,0 0 0 ,0 0 0
head
th a t
Ruhr
reach es
I
cou rse,
£ 2 0 0 ,0 0 0 ,0 0 0
years
sh e
I carry
c o n n e c tio n s
of
o f th e
1922,
th e
of
is £ 3 0 ,0 0 0 ,0 0 0 .
R u s s ia , T u r k e y , a n d A u s t r ia -H u n g a r y , a n d
have
of
A llo w in g
fig u r e
30,
liq u id a te d
lia b ilitie s
b e tw e e n
fig u r e
fa c t th a t
h e r a llie s
w e a lth
tre a ty
G erm an y’s
up
p ro p e rty
e s tim a te
£ 5 8 5 ,0 0 0 ,0 0 0 — T a r d ie u
p r e s e n t v a lu e ,
o p in io n
her
p u b lis h e d
m ake
th e
th e
lo s s .
p r e -w a r v a lu e .
th e
c o r r e s p o n d in g
th e
b u s in e s s
of
s in c e
G o v e rn m en t’s
abroad
S ta te s),
d im in is h e d
c le a r ly
w ere
G erm an
liq u id a te d
th e
w o r k in g
d u r in g
th o u g h
h ig h e r ,
tre a ty
th e
how ever,
th e re
of
e s tim a te ,
The
fo r
are,
o f its
m eet
S e p te m b e r
th e
(w h ic h
h er
(a s
e m e r g e n c ie s ,
as
v a lu e
am
v o lu m e ,
C.
up
th e
p u t th e
a p p lie d
d im in is h in g
little
th e su m s
d e b ts,
la t e ly
of
£ 2 4 1 ,0 0 0 ,0 0 0
not
la r g e .
o c c u p a tio n
in d e p e n d e n t
h a lf
t h in k , c o u ld
lo w e r
th e
it
c o n fid e n c e
liq u id a tio n
o n ly
d e b ts.
w h ile
5.
in
liq u id a te d
p r iv a te
£ 1 0 0 ,0 0 0 ,0 0 0
G erm an y’s
rep resen t its
th e
i f w e in c lu d e
and
assu m e,
m easu re
le s s t h a n
a g a in s t
I
th e
G erm an y
rem oved
u n d o u b te d ly
The
and
se iz e d
and
but
d e b ts
a
Sum s
c o lo n ie s
sh ip s
of
m uch
le ss
(1 )
p ro p e rty
s e iz e d
4, and
p r iv a te
tre a ty
p art
m u ch
th e
under
p e o p le in
b u ilt
£ 3 9 5 ,0 0 0 ,0 0 0 — a s
n o th in g )
s h o u ld
In s tr u c tiv e
w h o le
pays
of
is
G e r m a n y 's
m in e s
th e
th e
of
a p e r io d
on
p a r tly
It
3,
tre a ty
th e
A ls a c e -L o r r a in e ;
G erm an
c h a r a c te r .
of
fo r e ig n
to
to
p r iv a te
and
p la c e d
th e
to
on
m in e s
m o n th .
been
term s o f th e tre a ty .
is
per
to n
fo r
e x a g g e r a tio n s ,
th e
th e
v a lu a tio n
her ow n
c h a ra c te r
c r o s s -e x a m in a t io n ,
p o s s ib le
to
Saar
e q u ip
r u b b ish
th e
a llie d
v a lu e
arou nd
to
in
d is c h a r g e
2,
o f th e
none
G erm an
£ 8 5 ,0 0 0 ,0 0 0 .
w ith o u t
but
on
a g a in s t
a
e ffo r ts
ren d er
d a te
up,
to
In te re st
th e
h er
G u ir e ,
of
in
th u s
m easu re
m in e s
v a lu a t io n .
p la c e d
a
su m
Saar
s h ip p in g v a lu a tio n
pay
v a lu a tio n
and
as
s tr ik in g — th e
o b n o x io u s
of
of
of
in te n d e d
w h ic h
s h ip p in g
o u tra g e o u s
to
le s s
e s tim a te
if it is
in v e s t m e n t s in
on
lo s s
p ro p e rty
it
r e la te
th e
in
G erm an
d e b ts
very
th e
o b je c ts — o f
b etw ee n
net
as
are
of
e s tim a te d
v a lu a b le
im p o v e rish
th e
of
(2 )
p ro p e rty
it e m s
but
term s
are
a m o u n t o f c a s h p a y m e n t s u n d e r t h e c le a r in g -h o u s e s y s t e m
bank rup t
to
in ,
m ake
fig u r e s
v a lu e
tre a ty
th e
of
th row n
reserves
th ey
c la im e d
d a te
R epara
c a lle d
s in c e
C o m m is s io n
per
th e
n a tu r a lly
m easu re
of
th e
in
in d u s tr ia l
h ow ever,
d e s tr u c tio n
v a lu a tio n
G erm an y
as
one
of
e x p la in e d ,
e q u ip m e n t in to
say
are,
th e s a m e a u th o r ity
fo r
c ritic is m
on
th e
su rren d er
G erm an
and
a
and
a lm o s t
on
A llie s , w h ic h
of
ten d e n cy
th a t
th e
s u ffic ie n t
assessed
G erm an y
cases
a r m is tic e
v a lu e s c u r r e n t a t t h e d a t e o f d e liv e r y
at
se q u e stra te d
to
th e
th e
correct
its
d iffe r e n c e
and
to
term s
a
p a r tic u la r ly
th e
and
re
G erm an y
th e fo llo w in g :
(5 )
m arket
d iffe r e n t
p r iv a te
c a p a c ity
d iffe r e n c e
G e r m a n y 's
a lm o s t
Ite m s
v a lu a t io n
w id e
th a t
is
th e
th e
liq u id
th a t
be
of
been
been
C o m m is s io n ,
can
are
not
h er
R e p a r a tio n
concern
be
d is c h a r g e
has
v a lu a tio n ,
G overnm en t
th e
In d eed ,
fo r
th e
illu s tr a te s
under
th e
a r m is tic e
G erm an s,
g o in g
w ith
R e p a r a tio n
m a r in e
c la im e d — t h a t
to
a
p a r ts
The
F ran ce
so
by
c o n v e r t o r g a n iz e d
th e
w e ll
th r o w n
at
by
£ 3 5 ,0 0 0 ,0 0 0 ;
tim e s
on
su r
be
o r h a v e b ee n s o ld a t a p r ic e le s s t h a n t h e ir v a lu e to t h e ir G e r m a n
o w n e r s a s a g o in g c o n c e rn .
N e v e r th e le s s , a p a r t fro m
th is n e t b u r
d en , th e f a c t t h a t th is a m o u n t o f c a p it a l, p r e v io u s ly le n t to G e r m a n y ,
m e r c a n tile
th ree
can
been
Is
R e p a r a tio n
R e p a r a tio n
th e
7
th e
p la c e d
G erm an
Its
ite m s ,
and
th e
but
sp e c ific
is
som ew here
6
has
ite m
e s tim a te
th e se
of
G erm an y
a ssets h a v e n o t b ee n a p p lie d
h er o w n n a tio n a ls — u n d e r t h e
v a lu a t io n , £ 5 0 .0 0 0 ,0 0 0 ,
S ile s ia ).
th is
th ro w n
p ro p e rty
te r r ito r y ;
fir s t
fig u r e ,
Im p o rta n t
th e
by
th e
to
b urd en
S ta te
p r iv a te
G erm an y
put
th e
rep resen t
net
c o a l,
v a r io u s
account
th e re a b o u ts)
v a lu e
by
th e
G erm an
to
w o u ld
Two
curren t
a llo w in g
c r e d ite d
b etw ee n
v a lu e s
th e
th e
d is c r e p a n c y
The
w o rth
th e
fo r
burden
is
to
by
a c c r u in g in te r e s t b ill
S in c e
th e y
of
U pper
of
th e se
of
o th e r
C o m m is s io n ,
p a rty ,
in
w h ile
th e se
c a lc u la te d
(o r
sev era l
th an
th is
t h a t th e d is c r e p a n c y
lia b ilit y a s
fo r
p r e sc r ib e d
£ 1 2 7 ,0 0 0 ,0 0 0 ;
seem
n o te
been
£ 7 9 0 ,0 0 0 ,0 0 0 ,
to
to
had
assessed
U pper
as
it
S ta te
G erm an y,
r e p a r a tio n
b etw ee n
th a t
e ith e r
o b je c ts ,
b etw ee n
m a r in e
w eeks,
of
to
m a r in e .
s h ip p in g a r e
s lu m p
th e
a d d itio n a l
a ls o
m ore
G erm an y.
u pon w h e th e r th e b o o m
or
by
Repa
of
of
to
I
of
d is c h a r g e
fo r m u la
R e p a r a tio n
is
th is
and
m e r c a n tile
be a d d e d
th e
v a lu e
in
p r ic e
th in k
under
a llie s ;
(3 )
r e p la c e m e n t
G erm an
r e lia b le
d a ta
a p p lie d
s u p p lie d
p r o p e r ty
burden
r e p a r a tio n ,
fo r m e r
in v a d e d
p a y m e n ts
no
Ite m s
of
(6 )
lo ss
accu racy
w o rth
a r m ie s
In d is p u ta b le
£ 2 0 ,0 0 0 ,0 0 0 ;
e s s e n tia l
but
d e fin ite
c la im e d
and
c o n s is te n t
V e r s a ille s .
d iffe r e n c e
a llie d
m ost
m e r c a n tile
and
th e
c o n s id e r s w h a t i t is w o r t h
q u ite
to u c h e s
o f o u tp u t
th e
are
a d o p te d .
upon
and
th e
of
p a r tia l
o th e r
se r v ic e s
to
in
know
I
C o m m is
goods
G erm an y
m o st im p o r ta n t a re
h er
in
w h ic h
th e
s itu a te d ;
th e
v a lu e
real
To
c h a r a c te r is tic s — w e
know n
and
fa ith
d iffe r e n c e
ir o n ,
of
in
m ost
£ 1 7 5 ,0 0 0 ,0 0 0 ,
P art
e q u a lly
th ro w n
th e
a d ju s tm e n ts
d e liv e r ie s
by
v a lu a tio n ,
p r o p e r ty
th e
scrap
burd en
to
th e
th e
and
e s tim a te d
m ake
C o m m is s io n ,
v a lu a tio n
bad
m ig h t
G erm an y
On
(7 )
fa c e
sen ts
£ 2 4 1 ,0 0 0 ,0 0 0 .
v a lu a tio n
C o m m is s io n
S ile s ia ,
and
in c lu d in g
C o m m is s io n .
c o n s id e r s w h a t
to
F u r th e r m o r e ,
S a a r m in e s , G e r m a n
G erm an
im p u tin g
p r in c ip le s
to ta l,
c r e d it
reckoned
v a lu a t io n ,
(n o t
G erm an
R e p a r a tio n
£ 1 2 7 ,0 0 0 ,0 0 0 ;
retu rn ed
p o rts;
The
£ 1 8 9 ,-
by
th ere
fr o m
it e m s
to w a rd
“ r e s titu tio n s ”
abroad ;
in to
to
th e
and
m arket
£ 7 3 5 ,0 0 0 ,0 0 0 .
of
R e p a r a tio n
ceded
w o r ld
v a lu e
e s tim a te
The
G erm an y
G erm an y
enem y
th e
real
to ta l,
c e r ta in
a ll
G erm an y.
to
(4)
to
at
p r o p e r ty
by
th e
fa ll
count
S ta te
k in d ,
goods
and
d iffe r e n c e
v a lu a tio n ,
v a lu a tio n ,
in
of
com e
ow ed
but
rep resen t
T h ese
fu r n is h e d
£ 7 0 ,0 0 0 ,0 0 0
w id e
R e p a r a tio n
to ta l
and
we
of
£ 2 9 0 ,0 0 0 ,0 0 0 ,
liv e r ie s , ’ G e r m a n
m is s io n
If
w h ic h
a g r e e m e n t).
c o n tr o l.
U pper
G overnm en t
p r o p e r ty
£ 5 9 ,0 0 0 ,0 0 0 ;
of
o f th e se
a s fo llo w s : T h e
£ 2 7 5 ,0 0 0 ,0 0 0 ,
w as
Spa
e stim a te
T h ere
C o m m is s io n
v a lu a tio n ,
and
hooks
not
fo r
th e
c o n s e r v a tiv e
th e
cash
£ 7 0 ,0 0 0 ,0 0 0 ;
a d d itio n
fo r
w ith
h ead s.
now
ch a rg e on
to w a rd
r e le v a n t,
th e
d e liv e r ie s
been
la r g e s t
th a t
R e p a r a tio n
ceded
have
ite m s
c r e d ite d .
G erm an
is
carry
in
te r r ito r ie s,
th e
in ste a d
a
m ade
a
C r e d its
£ 3 9 1 ,0 0 0 ,0 0 0 ;
o c c u p a tio n ,
a d d itio n
th e se
W e
of
fo llo w s :
£ 1 5 4 ,0 0 0 ,0 0 0 ;
as
under
th e
w ill b e £ 5 1 1 ,0 0 0 ,0 0 0 .
th e
is
her
g o ld ;
£ 3 5 ,0 0 0 ,0 0 0
v a lu e
th e re
to
c o m p u ta tio n .
£ 1 9 ,6 0 0 ,0 0 0
The
p r ic e
to
any
ceded
of
fo r
has
a lo n e
in d is p u t a b le
on
(u n d e r
C o m m is s io n
G erm an
are
area
th e
been
w h ic h
c r e d ite d
to
e s tim a te d
w o u ld ’ h a v e
ite m s
If
in
m a tters.
£ 5 0 ,0 0 0 ,0 0 0 .
m arket
p a id
h er
bu rd en s
s till
v a lu e .
coke.
w o r ld
fig u r e
c o m m is s io n s
n ext
real
has
sh e
to
as
a d v a n c e s ),
£ 5 0 ,0 0 0 ,0 0 0 ;
garded
real
th e n
coal
a r m ie s
ren d ers,
of
th e ir
is
Spa
£ 7 0 ,0 0 0 ,0 0 0 :
c a l
h e r i t is t h e f o r m e r fig u r e w h ic h
su m s
ceded
a llo w
t h e ir
v a lu e
th e
S ile s ia ,
her
in
about
G erm an y
needed
w h ic h
v a r io u s ite m s , th e t o t a l su m
b e lo w
progress
£ 9 5 ,0 0 0 ,0 0 0
has
about
th e
ta b le
(le s s
do
e ffo r t
£ 3 5 ,0 0 0 ,0 0 0
C o m m is s io n
to
w h ic h
fo r
w hat
s io n
to w a rd
it e m s
th a n
Our
th e
tre a ty
c r e d ite d
la tte r
h e r e ffo r t
w o rth
of
su m
of
su m s
advances
fu r th e r
o c c u p a tio n
r a tio n
of
O f th e se
cu rren cy
le a s t
th e
p ro p e rty
coal
th e
fig u r e
G erm an y
th e
as
account
lo w e r
of
im p o s e d
c o u n tin g
dear
by
th e
m easu re
C ash,
S ta te
to
th a n
lia b ilitie s ,
C o m m is s io n ,
lo w e s t
as
te rm s
C o m m is s io n .
th e
w ith
ju s t
a
th e
sa c r ific e s
it e m s
r e p a r a tio n
y ie ld s
cost
o r th e p u n is h m e n t im p o se d on
r>et
th e
p r e s c r ib e d
th e
g rea ter
under
C e r ta in
fr o m
m e th o d
c o n s id e r in g
s e e k in g
c o u n ts
G erm an y
u n d o u b te d ly
R e p a r a tio n
her
are
th e
Thus
is
we
cost
p u rp oses
c e r ta in
w h ic h
o f r e p a r a tio n s .
a lto g e th e r
th e y
w h ile
th e
book s o f th e
th is
e x c lu d e d
e x c lu d e d ,
c u la tin g
of
d is c h a r g e
are
r e p a r a tio n s ,
are
p o r tio n
th e
has
th a t
w h ic h
are
s e c tio n s
p a id
by
sta te m e n ts
n ext
b lu ff
and
not
o f th e
and
to
open
p ress
n o th in g ,
c h ic a n e r y
s u g g e s tio n s
are
u n tru e .
in
J ohn
th is .
L ondon
(b y
c a b le ).
M aynard
K bynjbr .
V lilV K J lU
w
IV X U l^ ^ L iA U X U v J
o r
C O N G R E S S IO N A L R E C O R D ~
E X H IB IT
M ilita ry
c a s u a ltie s,
X V II.
W o r ld
E X H IB IT
W ar,
e stim a te d .
C o st of W o r ld
[ C a s u a ltie s , b y n u m b e r .)
T o ta l
m o b iliz e d
forces.
C o u n tr ie s .
K ille d
and
d ie d .'
P r is o n e r s
and
m is s in g .
W ound
c a s u a lt ie s .
T o ta l
c a s u a lt ie s .
T o ta l
ca su a ltie s
in p e r
cent of
to ta l m o
b iliz e d .
ALLIES,
4.950.000 2, 500,000
537.000
4.266.000
191,652
2,090,212
600.000
947.000
4,500
4234,300
3
907
80,000
120.000
152,958
133,148
34,659
44.686
1,000
21,000
13,751
12,318
7,000
10,000
12.000,000 1.700.000
8.410.000 1,357,800
908,371
8,904,467
650,000
5.615.000
4.355.000 4 126.000
300
800,000
335,706
750.000
45,000
707,343
267.000
13,716
5.000
230.000
100.000
7,222
50,000
3.000
R u s s i a ........................
F r a n c e 5 ...................
B r it is h E m p i r e 5.
U n ite d S ta t e s 3. .
S e r b i a ........................
G r e e c e ........................
P o r t u g a l ...................
M o n te n e g r o ............
9.150.000
6,160,800
3,190,235
2.197.000
350,300
1 210
535', 706
331,106
93,061
27.000
33,291
20.000
76.3
73.3
35.8
39.1
8.0
.2
71.4
46.8
34.9
11.7
33.3
40.0
52.3
42,188,810 5,152,115 12,831,004 4,121,090 4 22,089,709
T o t a l ............
__________________[S ou rce o f i n fo r m a t io n : W a r C o s ts a n d T h e ir F in a n c in g .!
C o u n tr y .
64.9
9O.0
34.2
22.2
G r e a t B r i t a i n ..............................................
U n i t e d S t a t e s .............................................
F r a n c e .............................................................
R u s s ia in E u r o p e .....................................
I t a l y ...................... . ......................................!
C a n a d a ............................................................
R u m a n i a ............................... . .....................
A u s t r a l i a .......................................................
B e l g i u m ..........................................................
I n d i a .................................................................
S e r b i a ..............................................................
N e w Z e a l a n d ..............................................
S o u t h A fr ic a n U n i o n ...........................
G r e e c e ..............................................................
C r o w n c olon ies a n d d e p e n d e n c ie s
J a p a n ...............................................................
O th e r E n t e n t e A l l i e s ............................
6 9 .7
4 0 ,1 5 0 .0 0 0 ,0 0 0
2 0 ,6 2 2 ,9 6 0 ,6 0 0
1 ,4 3 0 ,0 0 0 ,0 0 0
8 1 5 ,2 0 0 ,0 0 0
1 9 .3
9 .9
.7
.4
22,850,000 3,386,200
8,388,448 3,629,829
15,404,477
67.4
T o t a l ..............
57.6
G r a n d t o ta l.
1 5 .4
1 2 .4
10.8
4 .9
.8
,8
.7
.6
.3
.2
.2
.1
.1
.1
.2
6 3 ,0 1 8 ,1 6 0 ,6 0 0
65,038,810 8, .538,315 21,219,452 7,750,919 4 37,494,186
2 0 8 ,3 0 5 ,8 5 1 ,2 2 2
3 I n c lu d e s m a r i n e s s e r v in g w it h t h e A r m y .
4 I n c lu d e s “ d ie d o f w o u n d s ” (1 4 ,5 0 0 ).
E X H IB IT
U n ite d
S ta te s
A rm y,
X V III.
W o rld
E X H IB IT
B a y e r is c h e
sp ru ch .
W a r , r e v ise d
to
M ay
1 , 19ZZ.
D r.
P.
E n l is t e d .
D o c u m e n ts R e la t in g to
The
D ip lo m a c y .
S ecret
3 5 .9 0 5
846
1 2 ,9 0 6
4 8 .0 4 0
3 6 ,7 5 1
D ie d
of
w ou n d s.
T o ta l.
4 7 ,1 9 6
844
K i l l e d in
a c tio n .
•
D ie d
of
w ou n d s.
K i l l e d in
a c tio n .
T o t a l.
D ie d
of
w ou n d s.
K i l l e d in
a c tio n .
1 2 .6 4 6
258
03
o
A
T a lio n is .
R e v is io n
N ew
1 ,3 5 7
260
T o t a l..
1 ,6 1 7
556
44
1 ,9 1 3
30-1
F.
13 ,2 0 4
302
' 51,481
1 ,1 4 8
600
2 ,2 1 7
of
1 3 ,5 0 6
5 2 ,6 2 9
92
143
100
90
67
66
58
63
64
68
58
48
39
32
33
34
39
39
30
39
29
19
27
21
22
7
12
4
2
7
2
3
1
0
0
1
0
0
0
0
0
0
0
41
50
29
41
32
43
30
23
25
26
11
16
18
17
16
17
17
17
18
14
6
9
10
5
8
2
2
5
3
1
1
1
0
0
0
0
0
1
0
1
0
0
0
133
193
129
131
99
109
8S
86
89
94
69
02
57
49
49
51
56
56
48
53
35
28
37
26
30
9
14
9
5
8
3
4
1
0
0
1
0
1
0
1
0
0
0
1 ,7 9 6
3 ,4 9 9
2 ,4 6 6
2 ,0 7 5
2 ,0 1 3
2 ,0 2 6
1 ,9 3 3
1 ,4 7 1
1 ,5 1 9
1 ,3 7 1
1 ,3 6 2
1 ,1 6 7
1 ,0 7 9
1 ,0 5 6
1 ,0 5 2
906
1 ,0 5 5
934
972
787
748
726
653
446
43 5
199
171
128
109
113
72
33
43
33
17
18
19
13
1
2
0
0
0
712
1 ,2 2 3
741
749
717
661
748
676
523
591
390
404
361
379
376
468
310
403
279
381
274
286
285
128
121
86
63
40
56
47
25
47
27
12
16
11
11
10
5
2
3
1
0
2 , .508
4 ,7 2 2
3 , 207
2,82-1
2 ,7 6 0
2 .6 8 7
2 ,6 8 1
2 ,1 4 7
2 ,0 4 2
1 ,9 6 2
1,7.52
1 ,5 7 1
1 ,4 4 0
1 ,4 3 5
1 ,4 2 8
1 ,3 7 4
1 ,3 6 5
1 ,3 3 7
1 ,2 5 1
1 ,1 6 8
1 ,0 2 2
1 ,0 1 2
938
574
556
235
234
168
165
160
97
80
70
45
33
29
30
23
6
4
3
1
0
1 ,8 8 8
3 ,6 4 2
2 ,5 6 6
2 ,1 6 5
2 ,1 1 0
2 ,0 9 2
1,9 91
1 ,5 3 4
1 ,5 8 3
1 ,4 3 9
1 ,4 2 0
1 ,2 1 3
1 ,1 1 8
1 ,0 8 8
1 ,0 8 5
940
1 ,0 9 4
973
1 ,0 0 2
826
777
745
680
467
457
206
183
132
111
120
74
36
44
33
17
19
19
13
1
2
0
0
0
753
1 ,2 7 3
770
790
749
704
778
699
.548
617
401
420
379
396
392
485
327
420
297
395
280
295
295
133
129
88
65
45
59
48
26
48
27
12
16
11
11
11
5
3
3
1
0
' 5 ,0 1 3
4 ,9 1 5
3 ,3 3 6
2,9.55
2 ,8 5 9
2 ,7 9 6
2 ,7 6 9
2 ,2 3 3
2 ,1 3 1
2 ,0 5 6
1 ,8 2 1
1 ,6 3 3
1 ,4 9 7
1 ,4 8 4
1 ,4 7 7
1 ,4 2 5
1 ,4 2 1
1 ,3 9 3
1 ,2 9 9
1,2 2 1
1 ,0 5 7
1 ,0 4 0
975
600
586
294
248
177
170
168
100
84
71
45
33
30
30
24
6
5
3
1
0
1 ,3 5 7
556
1 ,9 1 3
3 4 ,5 4 8
1 2 ,6 4 8
4 7 ,1 9 6
3 5 ,9 0 5
1 3 ,2 0 4
'5 1 ,4 8 1
C o .,
th e
D.
th e
J.
W ar.
V o lu m e
I.
V o lu m e I I .
M o r e l.
C ock s.
& U n w in , L o n d o n *
M c G in le y
T re a ty .
W o r ld
th e W o r ld W a r .
M.
C o .,
B a ltim o r e .
K eyn es;
H a rco u rt,
B race
&
C o .,
W o r ld
W ar.
B e t h m a n n -H o lw e g ; T h o r n to n , B u tte r -
to
Pay.
M o u lto n
&
M c G u ire ;
M c G r a w -H illa
Y ork.
D ip lo m a c y
and
th e
W o r ld ,
de S i e b e r t ; K n ic k e r b o c k e r
P ress,
Y ork.
Ten
Y ears
o f S e c re t D ip lo m a c y .
E.
D . M o r e l ; N a tio n a l L a b o r P r e s s ,
M a n ch ester.
The
F a ls ific a tio n
G eorge
The
B.
W .
A lle n
&
o f th e
U n w in ,
F a ls ific a tio n
H u ebsch ,
R u s s ia n
of
O ran ge
B ook.
B aron
von
R om berg;
O ran ge
Book.
B aron
von
R om berg;
London.
o f th e
N ew
R e c o lle c tio n s
C o ., N e w
R u s s ia n
Y ork .
a
F o r e ig n
M in is te r .
Iz v o ls k i;
D o u b le d a y ,
Page
A
Y ork .
H is to r y
o f th e W o r ld
W ar.
F r a n c is
A . M a r c h ; John
C. W in s to n
C o .,
P h ila d e lp h ia .
Un
L iv r e
L ib r a ir ie
Les
N o ir
du
(R u s s ia n
T r a v a il,
Q u e s tio n
A r c h iv e s ),
la
G u erre.
su r
P o in c a r e a -t -I l
v o u lu
le s
la
gu erre?
C.
M archan d;
D o c u m e n ts
de
la
gu erre.
E . D.
G u erre.
R e la tiv e
D u p in ,
de T ou ry.
g u e r r e m o n d ia le .
G e n e s is o f W a r .
re sp o n sa b le s d e la
G erm an
R ene
D e M o n tg e la s .
R e s p o n s a b ilite s
C o m m e n t s ’e s t d e c la n c h g e la
Les
v o lu m e s .
D e M a r tia l.
d e s R e s p o n s a b ilite s .
C o n s id e r a tio n s
D ip lo m a tic
2
P a r is .
R e s p o n s a b ilit e s de
S u r la
A.
to
K a u tsk y .
M o r e l.
P e v e t.
th e
O r ig in
of
th e
W ar,
4
v o lu m e * .
W ar,
8
v o lu m e s .
Jordan.
A u str ia n
O ffic ia l
D o c u m e n ts,
Secret
of
R e v e a le d .
D o c u m e n ts
R u s s ia .
E m ile
D ip lo m a tic
th e
W ar.
The
D ip lo m a tic
A c tio n
L o o k in g
to
p u b lic a tio n .
D ip lo m a c y
D.
M o r e l.
A r c h iv e s
o f th e
M in is te r o f F o r e ig n
A ffa ir s
L a lo y .
D o c u m e n ts,
de
M y th
E.
o f th e
H is to r y
of
th e
P o lic y
of
th e
E n te n te
B e fo r *
S ie b e r t.
o f a G u ilty
N a tio n .
E c o n o m ic I m p e r ia lis m .
N ock ;
Leonard
B.
W .
H u eb sch , N ew
York.
W o l f ; H a rc o u rt, B race & H o w e, N ew
Y ork.
The
B race
C au ses
&
T ru th
H ow
'I n c l u d e s 2 ,3 7 2 M a r in e C o r p s p e r s o n n e l, b u t d o e s n o t i n c lu d e N a v y p e r s o n n e l.
to
B a u s m a n ; A lle n
C a p a c ity
N ew
E n te n te
N ew
DIVISION
V e r s a i l le r s c h u ld
London.
G erm an y’s
Book
3 5 ,1 3 4
E.
Seym our
H ills ; F le e t,
R e fle c tio n s o f th e
34, 548
586
zum
Y ork.
w o rth ,
D iv is io n s . .
O t h e r u n it s
R e la tin g
1919.
T r e a tie s.
L e t P r a n c e E x p la in .
Lex
und
D ir r .
D o c u m e n ts
A g g r e g a te .
3 0 .3
100.0
X X .
k r ie g s a u s b ru c h
O ffic ia l G e r m a n
P r e -w a r
C o m m is s io n e d .
d o k u m e n te zu m
O ffic ia l G e r m a n
[ T o t a l b a t t le d e a t h s .)
1 4 5 ,2 8 7 ,6 9 0 ,6 2 2
G e r m a n y .................
A u s t r i a -H u n g a r y
T u r k e y ...................... .
B u lg a r ia ................... .
21.1
7,142,558
7,020,000
975.000
266,919
1 I n c lu d e s d e a t h s fr o m a ll c a u s e s .
1 O ffic ia l fig u re s.
T 08 7 6 — 11
$ 4 4 ,0 2 9 ,0 1 1 ,8 6 8
3 2 ,0 8 0 ,2 6 6 ,9 6 8
2 5 ,8 1 2 ,7 8 2 ,8 0 0
2 2 .5 9 3 .9 5 0 .0 0 0
1 2 .3 1 3 .9 9 8 .0 0 0
1 ,6 6 5 ,5 7 6 ,0 3 2
1 ,6 0 0 ,0 0 0 ,0 0 0
1 ,4 2 3 ,2 0 8 ,0 4 0
1 ,1 5 4 ,4 6 7 ,9 1 4
6 0 1 .2 7 9 .0 0 0
3 9 9 .4 0 0 .0 0 0
3 7 8 .7 5 0 .0 0 0
3 0 0 .0 0 0 .
000
2 7 0 .0 0 0 .
000
1 2 5 .0 0 0 .
000
4 0 ,0 0 0 ,0 0 0
5 0 0 .0 0 0 .
000
4,216,058 1,152,800
3.620,000 2,200,000
250,000
400,000
152,390
27,029
T o t a l ............
G r a n d t o t a l ............
T o ta l
P er cen t
o f t o ta l.
C o st.
11,000,000 1, 773,700
7.800.000 1,200,000
325,000
2.850.000
87,500
1.200.000
B u lg a r ia ...................
2 n d .................
1 s t ...................
3 r d ...................
3 2 n d ...............
4 t h ...................
2 8 th .................
4 2 n d ...............
2 6 t h ...:....
o th ..............
77 t h .................
2 7 th .................
3 0 t h .................
7 9 th .................
7 8 th .................
9 0 th .................
89 t h .................
9 1 s t .................
8 2 n d ...............
3 5 t h .................
8 0 th .................
2 9 th .................
3 7 th .................
3 3 d ...................
3 6 th .................
9 3 d ...................
7 t h ...................
8 1 s t .................
8 5 th .................
4 1 s t .................
9 2 d ..................
8 3 d ...................
6 t h ...................
4 0 th .................
8 6 th .................
3 9 th .................
7 6 th .................
S 4th .................
8 8 th .................
3 1 s t .................
8 t h ...................
8 7 th .................
3 4 th .................
38 t h .................
X IX .
to p r in c ip a l b e llig e r e n ts , e s tim a te d .
T o t a l ...................................................
A u s t r o -flu n g a r y .
d ea th s,
W ar
, ^
gross
e x p e n d itu r e s
in c lu d e
in te r g o v e r n m e n t
lo a n s
to ta lin g
? 2 2 , 0 1 ^ ., 2 1 4 , 1 2 5 , w h i c h , i f s u b t r a c t e d t o a v o i d d u p l i c a t i o n , m a k e n e t
e x p e n d itu r e s o f $ 1 8 6 ,2 3 3 ,6 3 7 ,0 9 7 .
C E N T R A L PO W
E R S.
B a ttle
43
Y ork.
of
H ow e,
and
In te r n a tio n a l
N ew
th e
D ip lo m a ts
W ar.
G.
L.
D ic k n s o n ;
H a rco u rt,
Y ork.
W ar.
M ake
E. D.
W ar.
M o r e l.
F Y a n c is
N e ils o n
; B. W .
H u eb sch ,
N*w
t _________
o iK x m n i V N Q i s s n i i D x o j
44
CONGRESSIONAL RECORD.
B e lg iu m
and
th e
E urop ean
C r is is .
O ffic ia l
re p o rts;
S.
B.
M ltle r
&
The
m on
la w
of
m odern
S o n s , B e r lin .
L iv in g
A ge.
D ip lo m a tic
A u g u st,
D o c u m e n ts
S e p te m b e r , O c to b e r,
R e la tin g
to
th e
p r o m is e s
1922.
O u tb re a k
of
E urop ean
W ar,
c iv iliz e d
S ta te s
and
c o n s p ir a c ie s
v o lu m e s .
S c o tt. J os.
m u tu a l
W .
E X H IB IT
C O N D IT IO N S
OF
THU
A R M IS T IC E
F IX E D
GERMAN
BT
THE
A L L IE S
AND
BY
ACCEPTED
R E P U B L IC .
O pen
2.
F reedom
co v en a n ts
of
n a v ig a tio n
of
e c o n o m ic
3.
R em oval
4.
R e d u c tio n
5.
Im p a r tia l
of
o p e n ly
E v a c u a tio n
of
E v a c u a tio n
and
8.
E v a c u a tio n
of
9.
R e a d ju s tm e n t
of
fo r
It a lia n
11.
E v a c u a tio n
and
accorded
access
h is to r ic a l
g u a r a n tie s
12.
of
lin e s
and
tra d e .
a lo n g
of
s o v e r e ig n ty .
A ls a c e -L o r r a in e .
lin e s
of
o f R u m a n ia ,
r e la tio n s
a lle g ia n c e
and
in
S e r b ia , a n d
B a lk a n
n a tio n a lit y ,
w ith
so v e re ig n ty
a u to n o m o u s,
d e te r m in e d
In te r n a tio n a l
but
D a r d a n e lle s
s u b je c t
open ed
n a tio n a litie s
under
to
In d e p e n d e n t
A s s o c ia tio n
P o la n d
of
g u a ra n teed ;
n a tio n s
in
a
access
le a g u e
of
to
a ll
be
our
w is h
and
p u rp ose
th a t
th e
th e y a r e b e g u n , s h a ll b e a b s o lu te ly o p e n , a n d
p e r m it
h e n c e fo r th
W e
w is h
su ch
as
w ar,
th e
w h ic h
W e
th is
can
be
no
p rogram
tin c tio n
record
b lo c k
or
th a t
b r ig h t
w ay
e ith e r
if sh e is w illin g
o f th e
w is h
her
th e
w o r ld ,
h er
th e
W e
arm s
peace,
w hen
k in d .
s ta b le
do
not
w ith
p r o v o c a tio n s
no
p la c e
of
w h ic h
as
do
of
we
her
and
our
p a rt,
as
th a t
th e y
sp eak
ta ry
p a rty
p resu m e
to
in stitu tio n s.
n ecessary
a
to
But
p r e lim in a r y
we
know
w h e th e r
fo r
th e
m en
now
to
in ju r e
W e
th e
and
p rogram
It
I
have
o u tlin e d .
n a tio n a litie s ,
w ith
one
is
and
d is
her
h er
or
not
to
w is h
of
fa ir
th e
tra d e ,
of
d e a lin g .
p e o p le s
of
p la c e
a
part
ju s tic e
c o u ld
act
upon
c ip le
th e y
are
th e y
no
her
any
a lte r a tio n
in te llig e n t
her
is
to o
or
th e
r ig h t
fr a n k ly
or
fo r
fo r
liv e
on
be
The
o th e r p r in c ip le ;
of
to
1.
not
to
d ev o te
w is h
r a te ly ,
2.
to
s e c r e tly ,
e ig n ty ,
if
and
e c o n o m ic
th e
of
a te ly
concern ed,
of
fr e e
any
s e tt le m e n t fo r
8.
each
The
7 6 8 7 6 — 11
any
and
t h e ir
to
liv e s ,
its
be
a r b itr a r y
ow n
o f th e
th e
th e
2.
m ake
of
th e
fo u n d a tio n s
fo r
fr e e
p eace
of
w h ic h
n a tio n s
peace an d
o p in io n
w ill
a
or
and
a
m u tu a l
w h ic h
a ll
s h a ll
m ake
check
every
m ore
J u s tic e t h e
to
con cern ed
or
and
secu re
m u st
s u b m it,
s h a ll b e s a n c tio n e d .
it
of
a u to c r a c y
is
b rea th e
th a t
p e o p le s
G erm an
u n til
w on
can
fr e e ly
g o v e rn m e n ts
ju s tic e
w hom
m e te d
we
It
w is h
out
to
m u st be
N o sp e c ia l o r s e p a r a t e
can
m en
w h ile
are
th e
w o r ld
secu re
rep resen ts.
is
everyw here
th e y
t h e ir
It
go
about
serv a n ts
a
liv e
th e ir
and
not
m u st
in v o lv e
be J ust
a
and
no
th o se
ju s tic e t h a t
d is c r im in a tio n
to
p la y s
w hom
no
we
do
fa v o r ite s
and
be m ad e
T h ere can
h onor,
b a s is
o f any
com m on
s in g le
n a tio n , or
any
grou p
s e ttle m e n t
p a rt o f th e
w h ie h
in te r e s t o f a ll.
th e
general
or
com m on
fa m ily
of
th e
or u n d er
League
of
4.
T h ere
can
be
no
le a g u e ,
th e
and
no
e m p lo y m e n t
e x c lu s io n ,
except
as
s p e c ia l
th e
pow er
th e m a r k e t s o f th e w o r ld
a
m e a n s o f d is c ip lin e
5.
A ll
in te r n a tio n a l
know n
th a t
in
th e ir
th e
se lfis h
m ay
and
of
of
e c o n o m ic
in
c o m b in a tio n s
of
e c o n o m ic
p e n a lty
by
w ith in
b o y c o tt
e x c lu s io n
or
fro m
th e L e a g u e o f N a tio n s its e lf
c o n tr o l.
e n tir e ty
and
to
S ta te s
w ith
fo r m
be v e ste d
a g ree m e n ts
U n ite d
e c o n o m ic
any
th e
w ill
p a r tic u la r
tr e a tie s
rest
of
en ter
of
th e
in to
every
k in d
w o r ld .
no
It
s p e c ia l
m u st
is
be
fu r th e r
a rra n g em e n ts
n a tio n s .
It was known to the German Government that President Wil
son spoke as the representative of the allied and associated
powers, and on October 4, 1918. Prince Maximilian, of Baden,
in notes transmitted to President Wilson by wireless, offered to
make peace on the basis of President Wilson's address of Janu
ary 8, 1918, and his later pronouncements, aud to conclude an
armistice, and said:
The
G erm an
A m e ric a
G o v e r n m e n t r e q u e s ts th e P r e s id e n t o f th e
to
ta k e
b e llig e r e n t s t a t e s
tia r ie s
set
fo r th e
fo r th
gress
h is
of
P r e s id e n t
J anu ary
to
hand
th is
in
th e
r e s to r a tio n
req u est, an d
of
of
8,
1918,
S e p te m b e r
a v o id in g
im m e d ia te
of
and
27,
fu r th e r
th e
U n ite d
la te r
a
as
h is
b a s is
fo r
b lo o d s h e d
to
a ll
p le n ip o te n
in
h is
m essage
p r o n o u n c e m e n ts,
to
C on
e s p e c ia lly
peace
n e g o tia tio n s .
G erm an
th e
S ta te s
a c q u a in t
sen d
It a ccep ts th e p ro g ra m
S ta te s
in
U n ite d
peace,
in v ite th e m
p u rp o se o f o p e n in g n e g o tia tio n s .
by th e
sp eech
a
w ith
G overnm en t
W ith
a
req u est*
a ir .
p e o p le s
and
th is
stru c tu r e
of
in te re st o f a n y
th e
th e
b e n o le a g u e s o r a llia n c e s o r s p e c ia l c o v e n a n ts
w ith in
th e
U n le s s
of
S ta te s
th is
and
w ith
N a tio n s .
th e
U n ite d
v in d ic a t io n
t h e ir
p ow er
an yw h ere
c h o ic e
d is tu r b
s in g le
p r e s e n tly
of
p r in
e v e r y th in g
c o n c lu s io n
of
an
a r m istic e
an
la n d ,
on
w a ter,
and
in
The President replied desiring to know if the German Gov
ernment spoke for the German people and demanded a with
drawal of German troops from allied territory as an evidence
of good faith.
The Germans replied October 12, accepting in unqualified
manner the President’s proposals in the following language:
d estro y ed , a t
th a t
th e
th e
can
peace
sep a
of
th e
le a s t
its
redu c
and
a rra n g em e n t,
not
o th e r
th e
th e
q u e s tio n ,
of
upon
n a tio n
sa k e o f its
or
th a t
of
ow n
o f a ll n a tio n s
to
p e o p le
of
p o lit ic a l
s e ttle m e n t
th e b a s is
of
w h e th e r
te r r ito r y
or
sover
of
th e
w h ic h
e x te r io r
and
th e
m a te r ia l
m ay
in flu e n c e
be g o v e rn e d
sa m e p r in c ip le s o f h o n o r
r e la tio n s h ip ,
by
in
p e o p le
th e ir
a
th e
im m e d i
in te re st
d e s ir e
or
upon
or
ad
d iffe r e n t
m a stery .
co n d u ct tow ard
o f resp ect
fo r
th e com -
in
h is
ad dress
th e fo u n d a tio n
in
e n te r in g
d e ta ils
of
b e lie v e s
in to
th a t
W ils o n
th e
in
d is c u s s io n s
a p p lic a tio n
th e
h is
d e c la r e s
P r e s id e n t
g e sts
s io n
th a t
fo r
in
th e
G erm an
ity
step
th is
agreem ent
s u p p o rte d
nam e
of
w ith
in
th e
The
in
h is
a ll
to
su bsequ en t ad d resses
th e
read y
m ay
to
th e
c o m p ly
great
m a jo r ity
h is
a c tio n s
by
th e
G overnm en t
th e
G ov
P r e s id e n t
w ith
b r in g in g
about
th e
of
by
accord an ce
of
p r o p o s itio n s
G overn m en t
a
c o n c e r n in g
fo r m e d
th e
w ill
and
w ith
p r a c tic a l
m ix e d
th e
of
su g
c o m m is
e v a c u a tio n .
h a s u n d e r ta k e n th e r e s p o n s ib il
been
of
in
on
o b je c t
G overn m en t
w ith
tak en
G erm an
th e m e e tin g
G o v e r n m e n t, w h ic h
th e
a s s o c ia te d
p u rp ose
The
upon
G erm an
G o v e r n m e n t,
a rra n g em e n ts
has
agree
th e p o s itio n
fo r
o c c a s io n
peace,
to
The
p ow ers
tak a
C o n s e q u e n tly it s
o n ly
e v a c u a tio n .
n ecessary
to w a rd
G erm an
be
term s.
G erm an
its e lf
P r e s id e n t
m a k in g t h e
of
a ls o
G o v e rn m e n t,
regard
T h e presen t
fo r
and
th e se
S ta te s
ad dress.
a r m is tic e ,
8
w o u ld
of
G o v e rn m e n ts
th e U n ite d
A u s t r o -H u n g a r ia n
th e
o f Janu ary
o f a p e r m a n e n t p ea ce o f ju s tic e .
th e
ern m en t o f
an
every
a cce p ta n ce
con sen t
o th e r b y
fe a r
be ju s t.
any
a ll
w eak.
of
of
im p o te n c e .
b a s is
v a n ta g e
of
not
s e t t le m e n t
of
sf
can
it
v ir tu a l
The
p lo ts
im p u n ity ,
T h e G e r m a n G o v e r n m e n t h a s a c c e p t e d t h e t e r m s la id d o w n b y P r e s i d e n t
d e s tr u c tio n
w o r ld ; or,
t io n
to
to
t h e w h o le
o f lib e r ty
part
no
m ili
On July 4, 1918, the President o f the United States declared
the Issue of the war to be one between democracy and autocracy
and that the settlement must be final, and made the following
declarations:
The
of
n a tio n s
as
N ot
know
im p a r tia l
th o se
W ils o n
1.
and
o f n a tio n s ,
possess.
read y
to
th e
pow er
c o n sta n t
The
b etw ee n
v ie w
to
term s
or
p e o p le
on
w hen
th e
a d m it
ju s tic e
equal
stro n g
fo u n d a tio n
sta n d .
say,
h er
d o m in io n .
co n crete
p r in c ip le
to
m o d i
w ith
sp ea k
m a jo r ity
im p e r ia l
term s
m u st
d e a lin g
sp ok esm en
R e ic h sta g
in
o f its
can
pow er
tr ib u n a l
e m a n c ip a tio n .
ta sk s
of
a
e v id e n t p r in c ip le r u n s th r o u g h
is
serve
m ake
o r u n d e r s ta n d ih g s
of
do
and
in ste a d
n ecessary, w e
a n o th e r , w h e th e r th e y
m ade
in te r n a tio n a l
th e ir
is
creed
An
p r in c ip le
to
su ch
in
o th e r p e a c e -lo v in g
la w
am ong
liv e ,
to
any
th e
s u r e ly
o r g a n iz a tio n
t h e p e o p le d ir e c tly
m ade
m ade
a rra n g em e n ts
e q u a lit y
w hom
w h o se
sp oken
have
it
to
s h o u ld
u s,
and
su ggest
fu r t h e r d o u b t o r q u e s tio n .
sa fe ty
and
to
n o th in g
have
p ow er.
us and
we
is
a c h ie v e m e n t
w is h
or
o f ju s tic e
th e re
su ch
h o s tile
h e r s e lf w ith
in
and
her
in flu e n c e
c o v en a n ts
w o r ld
h and som e
n il
m a sters.
of
N e ith e r
and
fr o m
peace,
m a stery .
W e
by
t h e ir
as
and
c h ie f
e n te r p r is e
W e
or
a
an
c o m b in e d
d e fin ite
w ar
of
sta te d
grudge
accept
new
of
s h a ll in v o lv e a n d
ju s t
th e
it .
le g itim a te
to
any
a
r e m o v in g
e n v ia b le .
in
of
d e s ir e
g rea tn ess,
to a s s o c ia te
o n ly
by
o f p a c ific
w ith
w o r ld
and
p rocesses
G erm an
or
and
any
fic a tio n
a
s ta n d in g s
rem oves.
im p a ir s
her,
W e
o n ly
of
le a r n in g
in
n a tio n s
upon
is
8.
th a t th e y
u n d e r s ta n d in g s
p r e v a il
p rogram
fig h t
to
to
je a lo u s y
of
very
secret
secu red
th is
have
no
r ig h t
p r iv a te
w r o u g h t w ith
of
th a t a ll
In his Labor Day message of September 1 President Wilson
said:
sea .
n a tio n s .
Among statements of principles presented by President Wil
son to be accepted are the following:
w ill
a
is n o t c o n s is te n t
14.
It
agreed
be
in te r n a t io n a l
g u a r a n tie s .
13.
no
end
k n o w s n o s t a n d a r d b u t t h e e q u a l r ig h t s o f th e s e v e r a l p e o p le s c o n c e r n e d .
m a in ta in e d ,
w ith
o b served ,
c itiz e n s
th e
a n d b y w h ic h e v e r y in t e r n a t io n a l r e a d ju s tm e n t t h a t c a n n o t b e a m ic a b ly
M o n te n e g ro ;
S ta te s
th e
in d iv id u a l
a n o th e r , to
On September 27 President Wilson, in opening the Liberty
loan drive, declared the following five principles:
n a tio n a lity .
A u s t r ia -H u n g a r y .
sea;
th e
r ig h t
d a ily
u n lim ite d
r e s to r a tio n
th a t
of
fr e e
R u ssia .
w ith
s a c r e d ly
in ju r ie s
upon
th e
one
r ig h t.
a ffo r d in g
w ar
fr e e
govern
w ith
be
s e lfis h
e s ta b lis h e d
a g a in s t ev ery
te r r ito r ia l in te g r ity .
T u r k is h
fr e e
of
a
b o u n d a r ie s
of
r e s to r a tio n
to
of
m ay
no
e s ta b lis h m e n t o f
c e r ta in
It
o f B e lg iu m
te r r ito r y ;
p e o p le s
d ip lo m a c y .
c la im s .
te r r ito r y ;
F rench
open
e q u a lity
c o lo n ia l
r e s to r a tio n
A u to n o m y
and
The
in v a s io n
sea s.
g u a ra n tee d .
of
R u s s ia n
10.
a t,
th e
b a r r ie r s ;
a d ju s tm e n t
7.
upon
upon
a r m a m e n ts
6.
S e r b ia
a r r iv e d
it
by
The President of the United States, in his speech of January
8, 1918, proposed the conditions upon which world peace might
be assured. They included certain 14 points, as follows:
1.
fo r
4.
th a t
r e la tio n s
c o v en a n ts
tru st
X X I.
s o c ie ty
t h e ir
h a tc h e d ,
resp ect
e t c ., 2
In
of
by
c o n fe re n c e s
R e ic h s ta g .
(h e
o f th e
The
m a jo r ity ,
G erm an
speaks
p e o p le .
and
in
c h a n c e llo r ,
in
th e
C O N G R E S S IO N A L
On October 14 the President replied demanding the absolute
overthrow of the Kaiser and the house of Holienzollern and the
cessation of illegal and inhumane practices.
The Germans implied on October 20, agreeing to the annihila
tion of the Kaiser’s power and all the conditions, but protesting
the reproach of illegal and inhumane actions which they vigor
ously disclaimed, as follow s:
The
G erm an
in h u m a n e
th ereb y
G overn m en t
a c tio n s
a g a in s t
d e s tr u c tio n s
m ade
th e
w ill
p ro te sts
a g a in s t
G erm an
a lw a y s
a g a in s t th e
th e
G erm an
rep roach
la n d
For
th e
n ecessary,
be
p e o p le .
and
th ey
f a r a s is p e r m i t t e d b y i n t e r n a t i o n a l la w .
and
o f ille g a l a n d
sea
c o v e r in g
are
fo rc es
of
a
c a r r ie d
T h e G erm an
and
retrea t
out
in
so
tro o p s a re u n d er
th e m o s t s tr ic t in s tr u c tio n
to s p a re p r iv a te p r o p e r ty a n d to e x e r c is e c a re
fo r
best
th e
p o p u la tio n
to
o c c u r iu
s p ite
G erm an
G overnm en t
th e
o f th ese
of
th e ir
in s tr u c t io n s
fu r th e r
d e n ie s
s h ip s h a s e v e r p u r p o s e ly d e s tr o y e d
G erm an
fa c ts
up
by
n eu tra l
g u ilty
th a t
W h ere
th e
regard
tr a n s g r e s s io n s
a r e b e in g p u n is h e d .
G erm an
life b o a ts w ith
G o v e r n m e n t p r o p o se s, w ith
b e c le a r e d
a b ilit y .
th e
t h e ir
navy
in
The
sin k in g
p assen gers.
The
to a ll th o se c h a rg e s, th a t th e
c o m m is s io n s .
The Germans advised the President that a new government
had been adopted In Germany “ in complete accordance with the
representation of the people based on equal, universal, direct
franchise.”
On October 23, 1918, the President of the United States re
plied to the effect that having received such assurances from
the German Government he felt he could not decline to take
up with the associated Governments the question of an armis
tice ; that the armistice must leave the associated powers in
a position to enforce any arrangements that might be entered
into, and to make a renewal of hostilities on the part of Ger
many impossible; that if such an armistice was suggested by
the military advisers of the associated nations the acceptance
of its terms by Germany would afford the best concrete evi
dence of her unequivocal' acceptance of the terms and princi
ples of peace from which the whole action proceeded.
The German Government on October 27 replied accepting
the terms, and said:
The
G erm an
P r e s id e n t
of
G overn m en t
th e
U n ite d
has
ta k e n
S ta te s.
r e a c h in g c h a n g e s t h a t h a v e b e e n
in
th e
are
G erm an
b e in g
b o th
c o n d u c ted
a c tu a lly
t o n c lu s io n s .
m an
be
c o n s titu tio n a l
and
The
G overnm en t
th e
i t in
fir s t
h is
step
by
a
p ow ers
a w a its
to w a rd
a
th e
is
aw are
c a r r ie d
p e o p le ’s
m ilita r y
of
P r e s id e n t
o u t, a n d
stru c tu r e ,
c o n s t itu tio n a lly ,
now
c o g n iz a n c e
The
th e
a ls o
peace,
fo r
as
peace
c a r r ie d
o u t,
n e g o tia tio n s
w h o se
hands
m ake
th e
su b je c t
to
it.
a r m is tic e
P r e s id e n t
th e
fa r -
to
an
th e
of
th e
in
p ow er
are
of
a re b e in g
th a t
g o v e rn m e n t,
p r o p o s a ls
ju s t
and
an sw er
rests,
d e c id in g
The
w h ic h
has
G er
in v e ste d
th e
eyes
th a t
th e
The
a llie d
of
fu tu re
and
g e n e r a tio n s .
a s p ir in g
fo rc e s,
D e s p ite
it
has
a ll
S ta te s
and
be
p o s s ib le
d e v e lo p m e n t
w h ic h
im p e r is b a b ly
re
a c h ie v e m e n ts o f t h is w a r .
w h ic h
th e
has
have
g iv e n
p assed
G erm an
c a re fu l
b e tw e e n
G o v e rn m e n t.
c o n s id e r a tio n
to
P r e s id e n t
th e
th e
S u b je c t
to
of
th e
th e
cor
U n ite d
q u a lific a tio n s
t h e i r w i l l i n g n e s s to m a k e p e a c e w i t h t h e
G o v e r n m e n t o f G e r m a n y o n t h e t e r m s o f p e a c e l a i d d o io n i n t h e P r e s i
d e n t ’ s a d d r e s s t o C o n g r e s s i n J a n u a r y , 1918, a n d t h e p r i n c i p l e s o f s e t t l e
m e n t e n u n c i a t e d in h i s s u b s e q u e n t a d d r e s s e s .
w h ic h
fo llo w ,
They
s tr u g g le
ren d ered
trem en d o u s
w o n d e r fu l
g o v e rn m e n ts
resp on den ce
m u st
th e y
d e c la r e
p o in t
d e s c r ib e d
p r e ta tio n s ,
a u th o r ity
45
The notes between the Government of the United States and
the German Government in their complete continuity, setting
forth the proposed bases of peace, were immediately trans
mitted by the President of the United States to the supreme
war council, and Germany was so notified in his note of Octo
ber 28. Clemenceau turned these notes over to Foch, who
summoned Petain, Haig, and Pershing to read the correspond
ence to them and ask their advice. On the 26th Foch handed
the military terms of the armistice to Clemenceau at the
Trianon Palace Hotel, the meeting place of the supreme war
council in Versailles.
The representatives of the Entente Governments immedi
ately convened there to consider the terms laid before them
and to come to a conclusion as to their acceptance or rejec
tion ; to decide whether an armistice* should be granted and
peace made upon the basis offered, or the offer of an armistice
refused and surrender demanded. They reached a final con
clusion on November 4, accepting the basis on which the Ger
mans agreed to surrender as fixed by President Wilson, hav
ing occupied a period of nine days in deliberating upon the
entire contract.
The representatives of the Entente Governments at the
Trianon Palace Hotel in the above conference were Mr. Bal
four ; Prime Minister Lloyd-George, the foreign minister; the
secretary of state for war; the first lord of the Admiralty;
the high commissioner to the United States, Lord Reading;
the chief of the general staff, Field Marshal Haig; the first
sea lord, Admiral Wemyss; and Mr. Bonar Law, all of whom
represented Great Britain.
The French Government was represented in like fashion by
Clemenceau, by Foreign Minister Pichou, and most of the mem
bers of the French Government.
The United States was represented by General Bliss, Colonel
House, Admiral Benson, etc.
The Italian leaders were there.
In all, 24 delegates actively participated and reached the
following conclusion, to w it:
u s u a lly
P r e p a r e d fo r by a se r ie s o f G o v e rn m e n t a c t s , a n ew o rd e r co m e t
i n t o f o r c e w h ic h t r a n s f e r s t h e f u n d a m e n t a l r i g h t s o f t h e K a i s e r ’ s p e r
s o n to t h e p e o p l e .
T h u s c o m e s t o a c lo s e a p e r io d w h i c h s t a n d s in
b e fo r e
p e o p le
i t s e l f in
d e sc r ib e d
p r o c la m a tio n .
tw e en
our
v e a le d
s h a ll
On October 28 Emperor William issued the following decree
Indorsing the constitutional amendments promulgated by the
Reichstag:
honor
to
R E CO R D .
as
o u t,
th e
h ow ever,
free d o m
s o m e o f w h ic h
th ey
peace
of
th e
Janu ary
c o n d itio n s
8,
1918,
to r ie s m u s t be r e s to r e d
th a t
c o u ld
2,
se a s , is
not
r e la tin g
open
a cce p t.
to
They
to
w hat
v a r io u s
is
in te r
m u s t th e re fo r e
on th is s u b je c t w h e n t h e y e n te r
c o n fe re n c e .
F u r t h e r , in
gress
c la u s e
th e
fre e d o m
r e se r v e to th e m s e lv e s c o m p le te
th e
th a t
of
no doubt ou gh t to
o f peace
th e
a s w e ll a s
e x ist
as
la id
P r e s id e n t
dow n
e v a c u a te d
to
w hat
in
d e c la r e d
and
th is
h is
ad dress
th a t
fr e e d .
p r o v is io n
to
in v a d e d
The
Con
te r r i
A llie s
im p lie s .
fe e l
By
it
th e y u n d e r s ta n d t h a t c o m p e n s a tio n w ill be m a d e b y G e r m a n y fo r a ll
d a m a g e d o n e to th e c iv i lia n p o p u la t io n o f th e A llie s a n d t h e ir p r o p e r t y
by th e a g g r e s s io n o f G e r m a n y by la n d , by se a , a n d fr o m th e a ir .
7 3 8 7 0 — 11
W A S H I N G T O N : O O T B H N M J X r F E I N T I N G O P 'F IC B I I M S
mn%vmimnl
SIXTY-EIGHTH CONGRESS, FIRST SESSION.
The Indebtedness of France to the United States.
war, and I called on the Federal Reserve Board for some figures
with regard to the conditions there. 1 think it worth while to
present them to the Senate.
S P E E C H
The French budget for 1913 showed receipts of 4,907,000.000
OF
francs and expenditures of 5,072,000,000 francs, making a de
ficit of 165,000,000 francs.
When they got into the war in 1914 this deficit ran up to
6.000. 000 000 francs; in 1915. to 17,000.000,000 francs; in 1916.
OF O K L A H O M A .
to 31,000.000,000 francs; in 1917, to 38,000,000,000 francs; In
I n t h e S e n a t e o f t h e U n it e d S t a t e s ,
1918, to 49.000.000,000 francs. Since the war they have not
avoided this annual deficit, which ran to 42,000.000,000 in 1919
January 17. 1921/.
38.000. 000.000 in 1920. 30.000.000,000 in 1921, and 24,000,000,Mr. OWEN. Mr. President, on yesterday the Senator from 000 in 1922. So that the total deficit in all these years amounts
Idaho [Mr. B o r a h ] commented upon the apparent European to 279,000,000.000 francs. In addition their excess of imports
propaganda looking to the possible repudiation by the Euro over exports has been very large.
pean countries of the indebtedness due to the United States.
Without reading the whole of that, 1 ask to have printed in
It is very difficult indeed to believe that the Governments of the C o n g r e s s i o n a l R e c o r d this table prepared by the officers of
France or Great Britain really contemplate anything of that the statistical division of the Federal Reserve Board.
sort, although certain unofficial individuals have been heard in
The PRESIDING OFFICER. Is there objection?
the public press to make the comments quoted by the Senator
There being no objection, the table was ordered to be printed
from Idaho. France has been having a difficult time since the I in the R ecord, as follows:
HOX. R O B E R T R . OWEN,
G o v e r n m e n t fin a n c e s .
[In
1913
m illio n s
o m i t t e d .]
1916
1915
1914
o f f r a n c s ; 0 0 0 ,0 0 0
1917
1918
1919
1920
1921
1922
4 .9 3 0
3 6 .8 4 8
6 ,1 8 6
44 ,6 6 1
6 .7 9 1
5 6 .6 4 9
11. 586
•54, 213
19. 821
5 8 ,1 4 3
2 1 ,5 4 3
5 2 ,0 2 3
48. 720
T o t a l,
1 9 1 4 -1 9 2 2 .
1923
1924
I
1
BU D G ET.
R e c e i p t s ............................................................
E x p e n d i t u r e s ................................................
4 .9 0 7
5 ,0 7 2
4 .1 9 6
10 .371
4 .1 3 0
2 2 , 126
24, 691
103, 876
383, 748
-1 6 5
-6 ,1 7 5
-1 7 ,9 9 0
-3 1 ,9 1 6
-3 8 .4 7 5
-4 9 ,8 5 8
-4 2 ,6 2 7
- 3 8 , 322
-3 0 ,4 8 0
- 2 4 . 02 9
- 2 7 9 ,8 7 2
5 ,0 6 6
9 ,8 9 1
372
1 9 ,0 0 9
1 ,9 1 4
2 9 ,9 9 7
2 ,9 4 7
3 7 ,5 9 7
4 ,0 8 1
4 8 ,5 8 4
5 ,9 5 2
' 3 5 ,3 4 5
1 5 ,4 8 1
3 0 ,7 7 2
2 2 ,2 7 9
2 7 ,8 8 6
2 1 ,4 2 3
2 5 ,1 3 6
2 3 ,0 8 1
2 6 4 ,2 1 7
9 7 ,5 3 3
I m n o r t s ..............................................................
E x p o r t s ..............................................................
8 ,4 2 1
6 ,8 8 0
6 ,4 0 2
4 ,8 6 9
1 1 ,0 3 6
3 ,9 3 7
2 0 ,6 4 0
6 ,2 1 4
2 7 ,5 5 4
6 ,0 1 3
2 2 ,3 0 6
4 ,7 2 2
3 5 ,7 9 9
1 1 ,8 7 9
4 9 ,9 0 5
2 6 ,8 9 5
2 2 ,0 6 8
1 9 ,7 7 2
2 3 ,9 0 1
2 0 ,6 4 2
E x c e s s o f i m p o r t s ........................
1,5 41
1 ,5 3 3
7 ,0 9 9
14 ,4 2 6
2 1 ,5 4 1
1 7 ,5 8 4
2 3 ,9 2 0
2 3 ,0 1 0 j
1 ,2 9 6
, ,
2 ,2 5 9
D e f i c i t ..................................................
E X P E N D IT U R E .
O r d in a r y b u d g e t .........................................
S p e c ia l (r e c o v e r a b le b u d g e t ) ............
2 3 ,4 3 8
2 5 ,9 7 0
2 3 ,4 3 8
2 1 ,6 6 5
FOREIGN T R A D E IN M ERCHANDISE.
......................, ....................... 1.......................
1 F in a l figu re s for 1923 w i l l s h o w e x p e n d itu r e s of a b o u t 23 ,000 ,0 0 0 ,0 0 0 fran cs a n d a s m a l l s u r p lu s a b o v e e s t im a t e s .
w it h s m a l l c h a n g e s.
T h e 1923 o r d in a r y b u d g e t is c arried o v e r for 1924
T e n m o n th s , 1924:
r_____ a 7
.
O- H01
I m p o r t s ....................f ................................................................................................................................................................................................................................................................................................................................................... 2 5 ,6 2 1
E x p o r t s ........................................................................................................................................................................................................- - - ......................................................................................................................................................... 2 4 ,3 7 6
Mr. OWEN.
1923, was:
'The total indebtedness of France on April 30,
F ran cs.
I n t e r n a l d e b t ; f u n d e d ________________________________________________
F l o a t i n g ______________________________________________________________________
T o t a l __________________________________________________________ _
171, 000, 000, 000
82, 000. 000, 000
253. 000, 000, 000
The external debt, which of course is measured in gold, flue- i
tuates as the French franc goes down, so that the external debt
in terms of gold would be multiplied so that on the basis of the
present French franc the outstanding indebtedness would
amount to something over 450,000,000,000 French francs as of
this date, or a total of about $20,000,000,000. If the French
bring the franc back to par, it would cost the taxpayers the dif
ference between 4| cents gold on 253,000,000,000 francs internal
debts and 19.3 .cents gold, or about $39,484,000,000 of additional
gold payments. It seems to me Europe should valorize its cur
rency at an equitable arbitrary figure and redeem all old cur
rency on that basis and issue a new currency on American
principles that would assure its future stable value in gold and
at an agreed per capita basis by European conference, so as to
facilitate commodity exchanges.
Of course the going down of the French franc is due to both
the internal and external indebtedness, because the people who
80940— 58
speak in terms of francs naturally think in terms of the sol
vency of the government which is issuing the franc, imposing
and collecting taxes, and either living within its income or not
living within its income. That is a perfectly natural thing. It
is not due to anything except financial mathematics. It is just
a question of the fiscal law of gravity.
The French statesmen apparently have been leading the
French people to feel that they would soon be getting very
many billions from the German reparations, and therefore big
armies, great expenditures, loans to others, and extravagance
was justified. Those billions are not materializing in a satis
factory manner apparently, and now it has come to a point
where, in order to keep the franc from tobogganing downward,
as the German mark has done, the French leaders are com
pelled to raise the rate of taxation. The papers announced
that they did this a day or two since by raising the average of
taxation 20 per cent. I think it is pretty well "understood that
the wealth of France has not paid the heavy taxation which
the wealth of Great Britain has paid or that of the United
States has p a id : but the time has come when, in order to save
the franc from further depreciation, it is absolutely necessary
for the French people to recognize the actual verities relating
to their fiscal condition ; and I have no doubt that thev have
the wisdom to do that, because the French are really very able
and their fiscal management is conducted with great intel-
2
CONGRESSIONAL RECORD.
ligence in normal times. The emotion of war has upset the isiiing . the currency.; and rigidly maintaining its credit, but
whole world and led the French Government into error which the other nations have suffered very severely from the deprecia
is now being reflected on the French franc unavoidably. I will tion of their currency and neglect of their credit. Some of
put this statement of the French indebtedness into the R e c o r d the neutral countries have not suffered very severely. Sweden,
without reading all of the details.
for instance, has done very well. The franc, going from a
The PRESIDING OFFICER. Is there objection to the inser value of 18.3 cents in 1919 to less than 4.5 cents in January,
1924. has a vast significance. That is a matter of grave in
tion oi' the table in the R e c o r d ?
There being no objection, the matter was ordered to be ternational consequence and tells the story o f the world’s
impaired confidence in the management of the policies of the
printed in the R e c o r d , as follow s:
French Government.
P u b lic d e b t o f F r a n c e .
What Europe needs is restoration of “ production.” A res
toration of production is impossible without a restoration of
[ I n m illio n s o f f r a n c s .]
“ confidence.” Some measure of confidence is required in
order to have a “ stable currency.” They are talking about
A p r . 30,
S e p t . 30 ,
M a y 31 ,
M a r . 31 ,
J u l y 31,
D ec. 31,
1921.
1922.
giving Germany a stable currency. If people have not any
1923.
1914.
1918.
1920.
confidence in the stability of the German Government or its
continuity, statesmen can not give a stable currency to Ger
In te r n a l d e b t:
many through German sources, because, after all. the stability
1 3 6 ,0 7 2
1 5 5 ,0 5 8
17 1 ,0 8 1
3 2 ,5 7 9
0 7 , 739
1 2 1 ,3 0 6
8 2 ,8 2 1
8 0 ,1 3 2
8 7 ,0 5 0
4 9 ,1 3 5
8 1 ,2 6 7
1 ,6 0 9
of that currency will depend upon the confidence in the sta
bility of government. It must have stability. The French states
2 4 2 ,1 0 8
2 2 2 ,2 0 4
254, 50 2
3 4 ,1 8 8
2 0 2 ,5 6 3
11 6 .8 7 4
men have not realized this truth, but have done much to break
E x te r n a l d e b t:
down the government of Germany.
5 6 ,0 3 7
4 1 .4 3 8
4 4 ,6 0 4
4 9 ,7 9 6
1 5 ,1 2 7
The Senate will recall that in 1918 I presented a plan
5 0 ,5 1 7
3 0 ,5 6 0
3 3 .4 3 8
3 3 ,4 7 7
1 5 ,471
which would have given a stable gold—secured and commodityi 1 0 3 ,5 8 4
7 4 ,8 7 6
7 5 ,1 6 4
3 0 ,5 9 8
8 3 ,2 7 3
secured currency for all of Europe, to the extent of their re
quirements and desires— a plan still entirely available—simply
3 6 1 ,0 8 6
3 1 6 ,9 8 4
3 4 ,1 8 8 , 1 4 7 ,4 7 2 j 2 8 5 ,8 3 6
2 9 7 ,3 6 7
G r a n d t o t a l ____
by extending the Federal reserve system to Europe by a
Federal reserve foreign bank, issuing Federal reserve bank
* T h e e x te r n a l d e b t v a r ie s w it h e v e r y flu c t u a t io n o f t h e e x c h a n g e .
F o r t h is t a b l e ,
notes of that particular bank against commercial bills secured
its v a lu e in g o ld fra n cs h a s b e e n m u l t i p l i e d b y 3 t o re p r e se n t t h e a p p r o x im a t e
s it u a t io n o n A p r i l 3 0 , 1923. A t t h e p r e s e n t t i m e , w i t h t h e fr a n c a t a b o u t $ 0 .0 4 ), it
by merchantable nonperishable commodities, and backed by
w o u ld b e n e a r ly 50 p e r c e n t h ig h e r .
the usual personal and banker’s credit, as we require for
O n J u ly
3 1 , 1 9 2 3 , th e to ta l d e b t w a s 4 3 0 ,0 0 0 ,0 0 0 ,0 0 0
fr a n c s, a c
the Federal reserve notes o f this country. So that behind
c o r d in g to
th e D e p a r tm e n t o f C o m m e r c e , U n ite d
S ta te s.
every such note would be 100 per cent of commodity values,
100 per cent private credit, 100 per cent bankers’ credit, and
RECEN T LOAN S.
in addition there should be set apart a gold fund equal to
In
J u n e a n d O c to b e r, 1 9 2 3 , th e F r e n c h
G o v e r n m e n t is s u e d b o n d s
approximately 20 per cent, which would be sufficient, in my
to
th e
su m s
o f 9 ,7 7 8 ,0 0 0 ,0 0 0
fr a n c s
and
6 ,0 4 0 ,0 0 0 ,0 0 0
fr a n c s,
re
judgment, to assure daily redemption of such notes. In that
s p e c tiv e ly .
T o a c o n s id e r a b le e x te n t th e s e w e r e fu n d in g is s u e s r e p
way all the European countries could be supplied with a stable
r e s e n tin g t h e c o n v e r s io n o f m a t u r in g n o te s a n d t r e a s u r y b ills .
The
currency within a very short time.
c o s ts to th e g o v e r n m e n t w e r e , r e s p e c t iv e ly , a b o u t 7 p e r c e n t fo r th e
We have idle gold laying in our vaults amounting to many
fo r m e r a n d 8 p er c e n t fo r th e la tte r .
T h e t o t a l s p e c ia l b u d g e t fo r
times more than would be required and which could be used
1923
w as
2 5 ,9 7 0 ,0 0 0 ,0 0 0
fr a n c s , to
be
e n tir e ly
covered
by
r e c e ip ts
without any injury to our own system at all to provide this
fr o m
G e r m a n y o r b y lo a n s .
P r a c t i c a lly n o t h in g w a s r e c e iv e d
fro m
redemption fund, and such a redemption fund would earn a
G e r m a n y d u r in g th e y e a r , a n d t h e d e fic its in t h is b u d g e t w e r e c o v
sufficient amount to replace itself within a few years. So there
ere d b y t h e r e c e ip ts fr o m
th e lo a n s m e n tio n e d a b o v e a n d b y lo a n s
is no insuperable difficulty about giving them a gold-secured
is s u e d
by p r iv a te g r o u p s a n d
g u a ra n tee d
and
a ssu m e d b y th e g o v
currency if they have the wit to take it and really want it. I
ern m en t.
T h e s p e c i a l b u d g e t ( r e c o v e r a b l e ) f o r 1 9 1 4 is 2 1 , 6 6 5 , 0 0 0 , 0 0 0
think America would be fully justified if it helped Europe.
fr a n c s .
A n t ic ip a t e d t r e a s u r y b o r r o w in g f o r 1 9 2 4 a m o u n ts to 1 3 ,0 0 0 ,But Europe must make it safe for America by making Europe
0 0 0 ,0 0 0 fr a n c s .
safe for peace instead of moving it toward war. Production
Mr. OWEN. A later memorandum up to January 1, 1924, must be based on a balancing of the Budget on a stable currency
puts the French internal debt at 269,000,000,000 francs (worth by which men can measure contracts. They can not measure
tit 5 cents about $13,350,000,000 gold owned by the French peo contracts and can not go into large production without contracts,
ple) and 126,000,000.000 francs in external debt, or about and they require for the making of contracts a currency which
$6,000,000,000 gold due foreigners.
will be a stable measure of value.
If the French Government will demobilize and be economical,
The French and German press and the leaders should open
it can in due time pay its debts.
up a propaganda of good will and understanding.
There is no just reason to ask the cancellation of the debts
The French should get out of Germany. The war myth of
due the United States by France—and the people of the United Germany’s exclusive guilt should be frankly abandoned aind an
States will never permit it. I thought it worth while to call the era o f good will and mutual cooperation and helpfulness started.
attention of the Senate to this matter, because the franc has
The foreign office of France should be put under control of
gone down from January, 1919, after the war, when it was worth the French Chamber of Deputies.
18.3 cents, to about 4| cents. Under the reparation management,
The foreign office of the British Empire should be put under
and under the wonderful treaty of Versailles, which was going the House of Commons, as Ramsey McDonold. the new British
“ to save the world,” we see all of the currency of Europe Premier to be, is quoted as demanding. The unhappy old secret
going down, more or less. Great Britain did retrieve its cur diplomacy under which a dozen men led the world to war
rency by cutting down the John Bradbury notes and dimin- should be ended for all time.
80 94 0— 58
:
W A S H I N G T O N : G O V E R N M E N T P R I N T I N G O E K I f E ; 1924
REPUBLICAN PARTY DIRECTLY RESPONSIBLE
FOR A GREAT INDUSTRIAL DEPRESSION
REPLY TO MR. SMOOT
SPEECH
OF
HON. ROBERT L. OWEN
OF OKLAHOMA
IN T H E
SENATE OF THE UNITED STATES
SATURDAY, JUNE 7, 1924
W A S H IN G T O N
G O V E R N M E N T P R IN T IN G O F F IC E
1924
104908— 1050
ju\l t*iU
.fkl
K1
I& I
r o o M g ,h : /i
iAi ill
t
>
y
V
I
■\ ;1
'
s,V
*
13 WO
I
■«B :
U
..
\
f
M il...
'ds
w
SPEECH
OP
IION. R O B E R T L. OWEN
KEPIA '
TO
MR.
SM OOT
Mr. OWEN. Mr. President, the Senator from Utah [Mr.
S moot] has with fulsome praise recounted the accomplish
ments of the Republican leaders during the last four years.
There is one thing that the Senator from Utah has omitted.
He has omitted to point out that the Republican leaders de
manded the deflation of credit and currency in their national
platform of 1920, that they put that policy upon the country,
and have brought about in America the greatest industrial
depression which this Republic has ever known. This ridicu
lous self-praise of the Republican Party comes with poor grace
from the conservative, reactionary, stand-pat Republican lead
ers who have bankrupted millions of people by the cruel and
harsh policy of deflating credit and currency in this country.
That I do not exaggerate the condition is known to all o f
those Senators who live west of the Mississippi River; to all
of those Senators east of the Mississippi River who have in
their States farmers, stock raisers, and small producers who
have been injured or ruined by this criminally bad policy.
That is the real cause of the farmer-labor movement. The
farmers and laborers and little people have been so ill-treated
by this Government and its agencies under the reactionary
leadership of the Republican Party, that they have abandoned
all parties in some States and are trying to organize a new
party in order to find some relief, because they are in despair.
Do I exaggerate what has occurred? I put in the Congres
sional R ecord on June 4 the vital facts set forth in a letter
from the Comptroller of the Currency. It appears on page
10717 of the R ecord. The loans and discounts of the banks
as of June 30, 1920. were $34,087,000,000.
On June 30, 1922, they Avere $28.483,000,000— a contraction of
loans and discounts of over five and a half billion dollars. Mr.
President, such a contraction of loans and discounts never has
been known before in the history of this country. Is it any
wonder that the sheepmen of Nevada and of all the western
country, that the stockmen of Texas and Oklahoma and Kansas
and Nebraska and all of the agricultural areas of America are
bankrupt? This self-praise of the conservative Republican
leadership by the Senator from Utah [Mr. S moot] as their
chosen mouthpiece, claiming to have rendered gigantic benefits
to the country will not be heard or believed by those who have
been bankrupted by this wicked policy of the stand-pat, moneyloving Republican leaders.
Do I exaggerate it? What have they done to the currency
itself, the Federal reserve notes?
104908— 1056
3
On June 25. 1920, within a few days after the famous resolu
tion of the Senator from Illinois [Mr. M c C o r m i c k ] favoring
deflation of credit and currency passed the Senate there were
in actual circulation $3,117,000,000 of Federal reserve notes
and $184,000,000 of Federal reserve bank notes, a total of
$3,301,000,000. On June 5, 1924, it had shrunk to $1,884,000 000,
a contraction of the currency of this country of $1,517,000,000.
Senators, when you reflect upon the fact that the history of
the banking system of the United States has demonstrated that
$1 of currency in the national banks of the country has uni
formly, from tiie beginning to the end of that system, supported
$10 of loans and discounts, $10 of credit, is it any wonder that
the shrinkage of fifteen hundred millions has caused a sub
stantial diminution of credit of fifteen thousand millions? Is it
any wonder that the people are feeling hurt? Well, they do
feel hurt. Believe me, they feel hurt. In my own State I know
what has happened.
I put in the R e c o r d , page 10717, this report from the Comp
troller of the Currency showing the bank failures that have
taken place. Why, in the year ending June 30, 1919, only one
bank failed in the national banking system— one bank! Since
last June 121 national banks have failed up to this time and
about 300 State banks. When this policy was put over the
following year, ending June 30, 1921, 330 State banks and 28
national banks failed. The next year, ending June 30, 1922,
364 additional State banks and 33 national banks failed ; and
the next year, ending June 30, 1923, 237 State banks and 37 na
tional banks failed. Since last June 121 national banks and
over 300 State banks have failed.
Such wholesale financial, industrial, and commercial disaster
has had no equal in our banking history.
Why did these banks fail? Because of this sinister, unintel
ligent, selfish policy trying to make the dollar more difficult to
get, a policy against which I protested with all my might in
the spring of 1920, and I got no adequate support. I made
four speeches against it in the Senate between January and
May, 1920, and printed in the C o n g r e s s i o n a l R e c o r d three
letters of protest to the Reserve Board and one letter to the
President of the United States. I called the attention of the
country then to the fact that this policy of raising the interest
rates and without discrimination contracting credit would be
ruinous to the country. I pointed out with all the energy at my
command that it would produce a great industrial depression
and ruin many of our people. After it all happened I did not
feel disposed to make the welkin ring with my complaints
against the members of the Reserve Board or the officers of
the reserve banks whose unspeakable folly I could not prevent.
They ivere acting as the agents of the Republican Party in
power. I have been silent; but when I sit here and hear the
recounting of these vainglorious deeds of the Republican Party
by the Senator from Utah it is too much. I can not resist
calling the attention of the Senate and of the country to what
is occurring and how it occurred.
Let me read the Republican national platform of 1920 on this
point:
104908— 1056
But
h on est
as
th e
m oney
p o lit ic a l
and
c o n s is te n t a tta c k
p a rty
sou nd
upon
th a t
fin a n c e ,
th e h ig h
th ro u g h o u t
we
p le d g e
its
h is to r y
o u r s e lv e s
has
to
c o st o f liv in g —
sto o d
ea rn est
fo r
and
*
W onderful!
u p o n t h e h ig h c o s t o f liv in g b y r ig o r o u s a v o id a n c e o f fu r t h e r in fla
t i o n in o u r G o v e r n m e n t b o r r o w in g , b y c o u r a g e o u s a n d i n t e l li g e n t d e f la
tio n o f o v e r -e x p a n d e d c r e d it a n d c u r r e n c y .
It was not intelligent, and it was damned cowardly. It was
ruinous to the country and was dictated by a few men deter
mined to increase the power of their dollars and to deflate labor
and to deflate the farmers and stock raisers and to deflate the
little producer and borrower for the benefit of the creditor
class.
You need not fool yourselves and think you are fooling the
country. You can not fool the country. You can fool some of
the people all the time, but you can not fool all the people all
the time, and there is coming upon you a judgment next Novem
ber which you thoroughly deserve. You organized both Houses
of Congress in 1919, and you won a glorious partisan victory
in 1920. You used your power to put over the deflation policy,
and used as your agency the Federal Reserve Board, a majority
o f whose members were ultraconservative and fundamentally
of conservative opinions, entitled to be classed as standpat
Republicans on the question of deflation.
Mr. HEFLIN. Mr. President-----The PRESIDENT pro tempore. Does the Senator from Okla
homa yield to the Senator from Alabama?
Mr. HEFLIN. I thought the Senator had finished. I do not
want to interrupt him. I agree with the Senator.
Mr. OWEN. I wish to call attention to the conditions of em
ployment in this country.
ISlr. WALSH of Massachusetts. Mr. President'-----The PRESIDENT pro tempore. Does the Senator from Okla
homa yield to the Senator from Massachusetts?
Mr. OWEN. I yield to the Senator from Massachusetts.
Mr. WALSH of Massachusetts. Will the Senator yield to me
to present some statistics of unemployment in the country?
Mr. OWEN. I yield.
FIN A N C IA L DEPRESSION AND U NEM PLOYM ENT
Mr. WALSH of Massachusetts. I would not take the time of
the Senate to present these statistics from Government reports
were it not for the misleading statement of the administration
to the effect that the country is prosperous and that there is
little unemployment. Fortunately we have a recent record
from the Department of Labor concerning unemployment'. The
last report is for the month of April, and it shows that since
April, 1923, there has been a decrease in employment in 33 of
the leading industries of the country and an increase in only
13; that the losses in dollars and cents on the pay roll in various
industries in one year has been 22.5 per cent in men’s clothing;
20.7 per cent in cotton goods; 19.6 per cent in automobile tires.
Only one of the 12 leading groups of manufacturing industries
of the country shows an increase over last year, and that is one
104908— 1056
f)
that is relatively small. That is the group dealing in the manu
facture of glass and clay.
One great' textile group of industries as a whole shows a
decrease of 11 p*r cent in the number o f workers on the pay
roll and 13 per cent in wages since last year.
From the figures o f the Department of Labor it is evident
beyond a shadow of a doubt that over 400,000 more workers are
out of employment in the manufacturing industries now than a
year ago, with a total loss in wages of about $5,000,000 monthly.
Comparing unemployment in March and April of this year,
we find in one month alone a decrease of 11.4 per cent in the
number of employees on the pay rolls in the men’s clothing
industry and 16.6 per cent in wages.
The report also shows, out o f every five persons employed in
this country in 1920, there is one in five out of employment to
day. It must be noted that these statistics only record the un
employment caused by reason of having names taken from the
pay roll, and it makes no record of hundreds of thousands of
people of this country who are working short hours or reduced
time.
I thank the Senator for yielding, and I ask permission to
iiave the statement from which I read printed in the R e c o r d
as a part of my remarks.
The PRESIDENT pro tempore. Is there objection?
There being no objection, the matter was ordered to be
printed in the Record, as follow s:
S T A T E M E N T O P U N E M P L O Y M E N T I N T H E U N IT E D S T A T E S
(B y
The
Labor
of
s in c e
e m p lo y m e n t
d u r in g
th e
A p r il,
le a d in g
A p r il,
m e n t in
33
th e se
fig u r e s
in
th e
1924,
The
1 2 -m o n t h
do
not
n u m b er on
and
rep ort
p e r io d
in d u s tr ie s , w h ic h
in
le a d in g
pay
th a t
sta te s
th e
U n ite d
to
th ere
have
in
of
33
th a t
“ th e
e m p l o y m e n t .”
p a r tia l
1924
S ta te s
been
th e
g a in s
le a d in g
d ecreases
It
e m p lo y m e n t,
B ureau
in d u s tr ie s
w e r e e x c e p t io n a lly la r g e
l o s t in
r e la te
by
m a n u fa c tu r in g
lo s s e s
IN
o f M a ssa c h u se tts)
W alsh
sh ow
in d u s tr ie s
1923.
th is
th e se
crease
I.
D a v id
l a t e s t o ffic ia l s t a t i s t i c s c o m p ile d
of
c o u n try
13
S e n a to r
is
in
a
of
in
in
e m p lo y
m a jo r ity
th e
th e
lo s s e s in
of
th a t
a c tu a l
de
r o lls :
E m p lo y m e n t d e c re a se d :
P er
S te a m
r a i l r o a d s h o p s -------------------------------------------------------------------------------------------A g r i c u l t u r a l i m p l e m e n t s -----------------------------------------------------------------------------------F o u n d r y a n d m a c h i n e s h o p s _________________________________________________
M e n ’ s c l o t h i n g ---------------------------------------------------------------------------------------------------------A u t o m o b i l e t i r e s _________________________________________________________________
C o t t o n g o o d s ---------------------------------------------------------------------------------------------------------------C a r r i a g e s _____________________________________________________________________________
L e a th e r
_______________________________________________________________________________
S h ip b u ild in g
________________________________________________________________________
S h i r t s a n d c o l l a r s ----------------------------------------------------------------------------------------------------S u g a r r e f i n i n g ____________________________________________________________________
W o o l e n g o o d s ------------------------------------------------------------------------------------------------------------S to v e s
_________________________________________________________________________________
M i l l i n e r y a n d l a c e g o o d s -----------------------------------------------------------------------------------B o o t s a n d s h o e s ---------------------------------------------------------------------------------------------------------B e s id e s
o n ly
in d u s tr ie s
to b e n o te d
o n ly
of
th e
d o lla r s
and
c e n ts o n
th e
pay
r o lls
c e n t.
19. 7
18. 2
18. 0
16. 5
15. 9
14. 7
13. 7
13. 1
12. 4
12. 2
11. 8
11. 6
11. 4
10. 8
10. 3
w ere:
P e r c e n t.
M e n ’ s c l o t h i n g ___________________________________________________________________________
C o t t o n g o o d s -------------------------------------------------------------------------------------------------------------------------A u t o m o b i l e t i r e s __________________________________________________________________________
104908— 1056
22. 5
20. 7
19. 6
7
O n ly
1
th e
12
sh ow ed
of
c o u n tr y
an
r e la tiv e ly
le a d in g
s m a lle s t,
n a m e ly ,
O u r g r e a t t e x tile
11
per
cent
in
grou ps
in c r e a se
grou p
num ber
of
over
th e
m a n u fa c tu r in g
la s t
year,
sto n e ,
c la y ,
o f in d u s tr ie s
of
w ork ers
and
and
g la s s
as
a w h o le
pay
on
in d u s tr ie s
th a t
r o lls ,
is
th e
th e
grou p.
sh ow s
and
of
of
one
a d ecrease
1 3 .4
per
of
cent
in
w a g e s s in c e la s t y e a r .
The
ir o n
le a th e r
and
grou p
steel
a
11
grou p
per
sh ow ed
a
d ecrease
of
2
per
c e n t,
a
7
per
cent
c e n t d e c r e a se , c h e m ic a ls
and
th e
d ecrease,
a n d to b a c c o a 6 p er c e n t d e c re a se .
F rom
sh adow
th e
fig u r e s
of a
doubt
of
th e
th a t
D e p a rtm e n t
over
4 0 0 ,0 0 0
of Labor
m ore
m e n t in t h e m a n u f a c t u r i n g i n d u s t r i e s n o w
lo s s
in w a g e s
C o m p a r in g
o n e m o n th
th e
pay
In d ex
Labor
are
e m p lo y m e n t
in
a lo n e a d e c r e a s e
r o lls in
of
th a t
id le .
s in c e
(S e e
m e n t in S e le c t e d
M arch
e m p lo y m e n t
U.
1920,
S.
22
is
th a n
e v id e n t
are
beyond
out of
a
e m p lo y
a y e a r a g o , w ith
a to ta l
of
fin d
m o n th ly .
and
o f 1 1 .4
th e m e n ’ s c lo th in g
n u m b ers
sh ow
now
o f a b o u t $ 5 ,0 0 0 ,0 0 0
it
w ork ers
A p r il
p e r c e n t in
in d u s tr y a n d
of
per
th e
D ep a rtm e n t
1 6 .6
U n ite d
cent o f
of
In d u s tr ie s , A p r il, 1 9 2 4 .”
th e
th is
num ber
year,
p e r c e n t in
S ta te s
w ork ers
Labor
we
in
o f e m p lo y e e s on
w ages.
D ep a rtm e n t
th e n
S ta tis tic s :
of
e m p lo y e d
“ E m p lo y
e s p e c ia lly p p . 3 , 4 , a n d
1 1 .)
The PRESIDENT pro tempore. The Chair recognizes the
Senator from Oklahoma for his second address upon this mo
tion.
INJURIOUS EFFECTS OF DEFLATION POLICY
Mr. OWEN. Mr. President, when I was in Oklahoma a few
days ago attending a bank directors’ meeting, in discussing the
agricultural conditions in that section of the country I was
advised by men who know, by men who themselves are cul
tivating large areas of land, that they are paying $1.25 a
day for laborers on the farm, and the laborer has to feed
himself. Believe me, the man who is laboring on the farm
under those conditions, with a woman and two or three children
depending upon him for support, is not contented. He should
not be contented.
I f you want to make Bolslieviki, that is the way to manu
facture them. If you want to cause violence and discontent,
all you have to do is to contract credit and currency until
you bankrupt hundreds of thousands and millions of people
in this country.
Mr. FESS. Will the Senator yield for just one question?
Mr. HEFLIN. The Senator would lose the floor.
Mr. OWEN. I can not yield. I will thank the Senator to
permit me to finish. I will yield the floor in one moment.
The responsibility for this policy can not be escaped. The
majority in control of this Chamber on May 17, 1920, was Re
publican. A Republican Senator, the Senator from Illinois
[Mr. M c C o r m i c k ] , offered a resolution purporting to be a
resolution merely calling for inforrmxtion. In reality it was a
resolution favoring the deflation of credit and currency. It
was the answer to my protests against the policy of deflation,
the assumption of responsibility by the Republican Party,
and the cloak of protection by that party of its agents on the
Federal Reserve Board who were being criticized by me for
pursuing that evil course. The resolution was agreed to. I
104908— 1056
8
was not present, but the following day— May 18, 1920— I regis
tered my vehement protest.
In June, 1920, immediately following, the Republican Party
leaders in national convention assembled put a plank in their
national platform declaring for the policy of deflating credit
and currency.
A chosen representative of that convention, as a candidate
for the Presidency of the United States, Senator Warren G.
Harding, put it in bis speech of acceptance, declaring for a
“ courageous and intelligent deflation of credit and currency.”
The Republicans took the full mid complete responsibility
of deflating the credit and currency of the country and the
terrible consequences ensued. They can not now evade or
escape the consequences of deflating and ruining our industry
and commerce.
It is in vain for them to say that members of the reserve
b'oard were appointed as Democrats. The board was an agency
of the Government and subject to the domination of the party
in power, and the majority of that Federal Reserve Board
entertained the view expressed in the Republican Party plat
form on deflation, and therefore were Republicans and not
Democrats.
The Republican Party, which passed the McCormick resolu
tion favoring deflation of credit and currency, May 17, 1920,
which passed the resolution in the national platform favoring
deflation of credit and currency, and nominated and elected a
President who pledged himself in his speech of acceptance to
deflate credit and currency, can not now hide itself behind any
subterfuge. Its responsibility and conviction is complete.
104908— 1056
o
@FedFRASER