File No. 841.51/874
It is my judgment that these communications, having now been approved
by the President, should be presented as early as possible to the
representatives of the Governments above mentioned.
A like communication should with propriety be addressed to the
Roumanian Government, but, understanding that there is no Roumanian
diplomatic representative in Washington, I beg that you take such
steps as you think wise to have the matter laid before that
Government.
[Enclosure]
The Secretary of the Treasury (
McAdoo) to the British Ambassador (
Spring Rice)2
Washington,
July 18, 1917.
My Dear Mr. Ambassador: I have the
honor to state that, having in mind the experiences of the last
two months in the matter of determining loans to various
European Governments engaged in war against the Imperial
Government of Germany, according to the discretion reposed in
me, subject to the approval of the President, by the act of
Congress approved April 24, 1917, I have come to the conclusion,
which is approved by the President, that for the further
satisfactory conduct of the business between your Government and
the Government of the United States in respect to such loans it
is desirable that a council be established in Europe for the
execution of the following functions:
- (1)
- Such council, made up of representatives of the
various European Governments at war with Germany, or at
least of the larger powers among such Governments,
should consider and report to a purchasing commission in
America, established pursuant [Page 547] to some such arrangement as is
contemplated by the memorandum hereto attached marked
“A,”1 the needs of each such
Government in respect to the purchase of material of all
kinds, including food supplies as well as munitions, in
the United States;
- (2)
- They should likewise consider and similarly report
concerning the transportation requirements connected
with the movement of such supplies and the means of
satisfying these transportation requirements;
- (3)
- They should consider and similarly report concerning
the priorities that ought to be observed with a view to
the wise conduct of the war in respect to the purchase
of materials and transportation of the same, in so far
as limitations of the American market and of the
transportation available for the purposes in question
may impose the necessity of giving preference to one or
another of the several needs of the belligerent
powers.
- (4)
- Assuming at any given time the availability of a given
sum of money distributable as loans by the United States
Government to various Allied powers in question, it is
desirable that the said council recommend to me the
proportions in which such sums should be, if possible,
made available to each such power. In this connection,
it would be desirable that forecasts should be made, let
us say, for periods of three months, six months and
twelve months, respectively, on the supposition, of
course, that for such periods as may be covered by the
forecasts there should be a continuance of the existing
war against Germany.
In respect to the division of a loanable fund, indicated in
paragraph 4, I have in mind that such a council should report
its conclusions as recommendations to me, in order that I may be
thus aided in the discharge of the responsibility imposed on me
by the statute in question, to make the necessary determinations
in regard to the division of the fund in question. It should,
however, be understood that I can not be bound to accept such
recommendations, inasmuch as, under the act of Congress, the
responsibility is placed upon me, subject to the approval of the
President, to exercise my own discretion in respect to such
loans or credits.
It is doubtless also known to you that the amount thus placed at
the discretion of the Secretary of the Treasury by the act in
question is fixed at $3,000,000,000. Of this amount, in round
figures, there has now been allocated in various loans and
credits the sum of approximately $1,600,000,000. At this
writing, therefore, there remains to be disposed of the sum of
approximately $1,400,000,000. It is obvious that any loans that
may be desired in excess of the total thus remaining would
require additional legislation by the Congress of [Page 548] the United States.
While this fact is now actually controlling in respect to any
further positive action on my part in the matter of making
loans, it would not be objectionable if the council should, in
making its forecasts, formulate and indicate to me the requests
of the various Governments represented for sums which might
total a larger amount than the $1,400,000,000 above mentioned.
In making this statement, however, I do not desire to be
understood as in any way committing the Government of the United
States to any action whatever. The thought is presented to you
merely because it may assist the Government of the United
States, whether in the executive or the legislative branch, in
the making of determinations, if any should be undertaken,
concerning loans to foreign governments exceeding the amount now
set in the statute.
I shall not in this communication undertake to suggest the
organization of such council as is here proposed, since that
obviously must be left to the Allied Governments concerned in
the matter. I may add, however, that while the United States
Government does not now propose that it shall have a
representation in such council, it nevertheless reserves the
right of proposing, at a later date, that representatives of the
United States should be associated with the council in a manner
hereafter to be determined, in order to give and receive such
information as may be germane to its objects.
So important do I consider immediate action with respect to the
objects above defined, that I should be glad if you would inform
your Government at once that I consider the establishment of
such council as one of those “arrangements” indicated in the
above mentioned act of Congress as both “necessary and
desirable” in connection with the granting of further credits
for the Governments in question. I would, therefore, suggest
that, while the determinations of loans or credits for the month
of August, 1917, may be made before these arrangements are
perfected, I feel it my duty to say that such arrangements
should be completed and made operative before August 15, 1917,
as a condition precedent to the determination after said date of
any further loans or credits.
I am [etc.]
