State, 1935

PSF State Dept 1935 no print 2/15 my THE SECRETARY OF STATE WASHINGTON January 8, 1935. Dear Mr. President: I do not know whether there is anything you could or should say to the press on the subject of the two King resolutions attached here- to. In any case they are awful. Faithfully yours, The President, The White House. 140 CONGRESSIONAL RECORD-SENATE JANUARY 7 JAPANESE POLICY IN MANCHURIA MONOPOLISTIC PRACTICES AND THE ANTITRUST LAWS Mr. KING submitted the following resolution (8, Res. 32), Mr. KING submitted the following resolution (S. Res. 35), which was submitted to the Committee on Foreign Relations: which was referred to the Committee on the Judiciary: Whereas by the Kellogg Peace Pact signed at Paris on August 27, Whereas to prevent monopolies and combinations in restraint 1938, the high contracting parties (Including the United States of trade and efforts to obtain monopolistic control of trade and and Japan) solemnly declared that they condémn recourse to war commerce, laste were enacted by the Congress which are still in for the solution of international controverales; and force: and Whereas by the nine-power treaty signed at Washington on Wheress IS is claimed that such laws have not been enforced and Pebruary 6. 1922, the contracting powers (Including the United that monopoties have increased and monopoltstic control of Indus- States and Japan) agreed to respect the sovereignty. the Inde- try has been strengthened: and pendence. and the territorial and administrative integrity of China, Whereas notwithstanding the enactment of said antitrust laws it and to refrain from taking advantage of conditions in China in is alleged that the National Industrial Recovery Act has been order to seek special rights or privileges which would abridge the construed as permitting monopolies and protanto repeals the said rights of subjects or citizens of friendly states; and abtitrust laws; and Whereas is is alleged that the policy pursued by Japan in Man- Whereas it la alleged that the said antitrust laws are inadequate churia in establishing the Manchukuoan Government, in cetting to meet mohopolistic developmente and should therefore be up a government oll monopoly of foreign oll interests, and the strengthened in order that the purpose for which they were refusal by Manchukuo, as stated in the Japanese press, to observe enacted might be realized: Now, therefore, be It the open-door policy except as to nations according her recogni- Resolved, That the Committee on the Judiciary, or any duty au- tion, is a violation of the above treatles: Therefore be it thorlaed stubcommittee thereof, is authorized to conduct an In- Resolved, That the Committee on Poreign Relations, or any vestigation to determine (1) whether the National Industrial Re- duly authorized subcommittee thereof, is authorized and directed covery Act has encouraged or promoted monopolistic practices; to examine into the poltey pursued by Japan in Manchurts with (2) whether the National Industrial Recovery Act or rules, regu- & view to determining whether such policy has violated any of the lations, and codes Issued under it have tended to nullify the provisions of the Kellogg peace pact or the nine-power treaty. antitrust laws; (8) whether, in that event, legislation is needed For the purposes of this resolution, the committee, or any duly to restore the antitrust laws to the position which they occupted authorized subcommittee thereof, is authorized to hold such hear- prior to the date of enactment of the National Industrial Recovery ings, to sit and act at such times and places during the sessions Act; and (4) whether the antitrust laws, enforced. are and recesses of the Senate in the Seventy-fourth Congress, to em- adequate to control monopolistic practices. ploy such. clerical and other assistants, to require by subpens or The committee shall report as soon ns practicable the results of otherwise the attendance of such witnesses and the production of its investigation, together with its recommendations, If any, for such books, papers, and documents, to administer such oaths, to necessary legislation. For the purposes of this resolution the com- take quch testimony, and to make such expenditures as IS deema mittee, or any duly authorized subcommittee thereof, is author- advisable. The cost of stenographic services to report such hear- tred to hold hearings, to att and not at such times and places inga shall not be in excess of as cents per hundred words. The during the sessions and recesses of the Benate in the Seventy- expenses of the committee, which shall not exceed 8 shall fourth and succeeding Congresses until the final report is sub- be paid from the contingent fund of the Senate upon vouchers mitted: to employ such clerical and other assistants, to require approved by the chairman. by subpena or otherwise the attendance of such witnesses and the production of such books, papers, and documents; to administer FORTIFICATION OF CERTAIN MANDATED ISLANDS IN THE PACIFIC such ontha; and to take such testimony and make such expendi- Mr. KINO submitted the following resolution (S. Res. 33), tures M it deems advisable. The cost of stenographic services to which was referred to the Committee on Foreign Relations: report such hearings shall not be in excess of 25 centa per hundred words, The expenses of the committee, which shall not exceed Whereas by article 119 of the treaty of peace with Germany, 85,000, shall be paid from the contingent fund of the Benate upon signed at Versailles on June 28, 1919, Germany renounced in favor vouchers approved by the chatrman. of the Principal Allied and Associated Powers all rights over her oversess possessions, Including the groups of islands in the Pacific PRINTING OF ADDITIONAL COPIES OF REPORT ON STOCK EXCHANGE Ocean lying north of the Equator; and PRACTICES Whereas the Principal Allied and Associated Powers, including the United States, agreed that in accordance with article 23, part Mr. HAYDEN submitted the following resolution (S. Res. I (Covenant of the League of Nations), of the said treaty, a man- 36), which was referred to the Committee on Printing: date should be conferred upon His Majesty the Emperor of Japan Resolved, That 4,000 additional copies of the report (no. 1455) to administer the said islands; and of the Committee on Banking and Currency, Seventy-third Con- Whereas His Majesty the Emperor of Japan accepted such man- gress, second session, on Stock Exchange Practices, be printed date. subject to the agreement, among others, that no military or for the use of the Benate document room. naval bases should be established or fortifications erected in the mandated territory; and REPORTS OF THE COMMITTEE, ON THE DISTRICT OF COLUMBIA Whereas for some 14 years there have been recurrent charges in the press to the effect that Japan has fortified her mandated is- Mr. CAPPER, from the Committee on the District of Co- lands in violation of the agreement not to do so; and lumbia, to which was referred the bill (S: 364) to exempt Whereas It is alleged that Japan has failed to make reports on from taxation certain property of the Daughters of Union Its administration of Its mandated Islands, as required by the League of Nations: Therefore be It Veterans of the Civil War in the District of Columbia, re- Resolved, That the Committee on Foreign Relations, or any duty ported It without amendment and submitted a report (No. 1) authorized subcommittee thereof, is authorized and directed to ex- thereon. amine into the charge that Japan in fortifying or has fortified her Mr. KING, from the same committee, to which were re- mandated Islands and to report to the Senate, as BOOD as prac- ticable, the results of its Investigation, together with its recom- ferred the following bills, reported them severally without mendations. amendment and submitted reports thereon: For the purposes of this resolution, the committee. or any duly S. 396. An act to amend section 1180 of the Code of Law authorized subcommittee thereof, is authorized to hold such hear- ings. to sit and not at such times and places during the sessions for the District of Columbia with respect to usury (Rept. and recesses of the Senate in the Seventy-fourth Congress, to em- No. 2); ploy such clerical and other assistants, to require by subpens or 397. An act to provide for recording of deeds of trust otherwise the attendance of such witnesses and the production of and mortgages secured on real estate in the District of such books, papers, and documents, to administer such oaths, to take such testimony, and to make such expenditures M It deems Columbia, and for the releasing thereof, and for other pur- advisable. The cost of stenographic services to report such hear- poses (Rept. No. 3): ings shall not be in excess of 25 centa per hundred words. The 398. An act to amend the act entitled "An act to estab- expenses of the committee, which shall not exceed 8 shall lish a Code of Law for the District of Columbia approved be paid from the contingent fund of the Senate, upon vouchers approved by the chairman. March 3, 1901, and the acts amendatory thereof and supple- mental thereto (Rept. No. 4); HEARINGS REFORE COMMITTEE ON THE DISTRICT OF COLUMBIA 8, 399. An act to amend sections 416 and 417 of the Re- Mr. KING submitted the following resolution (S. Res. 34), vised Statutes relating to the District of Columbia (Rept. which was referred to the Committee to Audit and Control No. 5): the Contingent Expenses of the Senate: B. 400. An act to permit the stepchildren of certain offi- Resolved, That the Committee on the District of Columbia, or cers and employees of the United States to be admitted to the any subcommittee thereof, is hereby authorised during the Sev- enty-fourth Congress to send for persons, books, and papers; to public schools of the District of Columbia withous payment administer oaths; and to employ & stenographer, at a cost not ex- of tuition (Rept. No. 6); ceeding 25 centa per hundred words, to report such hearings as 8. 401. An act to amend the act entitled "An net to regu- may be had on any subject before said committee, the expense late the practice of the healing art to protect the public reot to be paid from the contingent fund of the Benate: and the committee, or any subcommittee thereof, may alt during health in the District of Columbia approved February 27, ton or recess of the Senate. 1929 (Rept. No. 7); BEST AVAILABLE COPY. Ilate Qupt (1) (s) personal jule Dup DEPARTMENT OF STATE WASHINGTON February 4, 1935. My dear Mr. President: There seems to be little doubt but that the French mission to England over the last weekend has discussed the question of stabilization with the Brit- ish Government. I attach cables received from our Embassies in London and Paris reporting observations on the conversations, which I believe you will want to read. The Department may receive more definite informa- tion shortly, particularly on the point as to whether the British actually did propose to the French a 30 percent devaluation. Faithfully yours, Enclosures: Paraphrase, No. 50 from London, February 2. Paraphrase, No. 89 from Paris, February 2. The President, The White House. PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, London, England DATE: February 2, 1935, 5 p.m. No.: 50 STRICTLY CONFIDENTIAE FOR TREASURY RUSH Robert Brand of Lazard Frères had a frank talk with Flandin, at Flandin's request, yesterday. This was in preparation for Flandin's conference today with Leith-Ross, and his meeting with Chamberlain over the weekend. The following considerations, contributing factors to the formation of the British attitudes, were outlined by Brand: First. The possibility of an uncontrolled currency depreciation race is not viewed by the British with such apprehension. This 18 due primarily to the fact that America returned to the gold unit and within fixed limits. A second reason is that should the gold bloc break up, the British still have their trade agreements, which would have a stabilizing effect. Second. The national government would not have a political election asset in stabilization. The French contend that with elections ih 1936, stabilization must be achieved in 1935 or postponed until 1937. Granted this, opinion here is willing, for the next two years, to face the prospect of being off gold. Third. It is not believed by the British that in - 2 - in the immediate future there will be a very substantial rise in American prices. It is their view that the dollar is undervalued in terms of sterling by approximately 15 percent. They are inclined to allow time to test their theory. Fourth. Brand brought up the implications arising out of the fact that, nevertheless, "the pound is more in equilibrium with both the franc and the dollar than they are with each other", which expression was used by Chamber- lain in his speech reported in No. 632 of December 21, 6 p.m., from the Embassy. These impressions were received by Brand: (1) The fact that Flandin's position was not improv - ing was known to Flandin, and the situation required action on his part see telegram No. 3 of January 7, 6 p.m., from the Embassy. (ii) Flandin was disposed to make concessions on the quota and tariff. (111) In the long run the gold bloc would have to adjust their parities in one way or another - this was the understanding Brand received from Flandin, although Flandin did not say BO. I hear from another source, incidentally, that it is being urged by certain elements in the Government which view as politically unwise the undertaking of further "continental commitments", that 8.8 a partial alternative - 3 - on attempt be made in the economic and financial sphere to satisfy the French. My informants particularly requested that all the information given above be treated with the strictest confidence. ATHERTON EA:LEW PARTIAL PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, Paris, France DATE: February 2, 1935, noon No.: 89 FROM COCHRAN An invoice for two million francs gold bars was made by Aublin and Company, bullion borkers, for ship- ment on the BREMEN to Johnson Matthey. There is a fairly active Paris exchange market today. The gold clause decision and London conversations continue to cause nervousness. It is feared in market circles, with respect to the London conversations, that the French situation may be made more difficult. They fear that in reply to French advances in regard to sterling stabil- ization the British may insist upon immediate 30 percent devaluation of the franc and furthermore retain their own liberty of action to lower sterling further, should it be necessary subsequently because of the American gold clause and indebtedness factors making necessary a fur- ther downward revaluation of the dollar. A Paris friend was told today by an officer of the Union Corporation (of which Strakosch is head) that the British answer would be in the above sense, a.6 decided upon after a meeting between the Bank of England and Treasury officials held yesterday. The recent annual reports of the big five banks, he added, were all in unison on stabilization policy following their prior subission to the British Treasury for the approval of the Treasury. JOURNEE - 2 - JOURNEE INDUSTRIALLE writes in above connection "meetings of the big English banks have taken place. The thesis maintained in each case by the directors has been the disparity between the three currencies, dollar, pound and franc. Each time it was said that the pound is too low in relation to the dollar; that in relation to the pound the franc is too high, and that there must necessarily take place some adjustment. We say with the same persistence that this disparity is not our doing but comes from the voluntary devaluation of the pound, and the policy followed parallel with this revaluation, that of avoiding any monetary expansion which would correspond to devaluation action. To devalue similarly the new franc by 30 percent avoiding all monetary expansion would be easy for us. We would obtain in this way similar results which would put us, (B), on equal footing with economic parity reestablished. But we know quite well that the day when restabilization arrives, the avoided expansion would be produced tardily and inevitably. This poten- tial inflation is what most English fear and it is this that has made them hesitate for six months over consider- ing plans which are periodically submitted to them perhaps by America." STRAUS. EA:LEW ml state ch Department DEPARTMENT OF STATE WASHINGTON February 4, 1935. My dear Mr. President: I am sending you herewith a brief memorandum showing the production, the percent of domestic consumption, and the number of wage earners employed in the manganese mining industry. Mr. Sumner Welles told me that you desired this information and asked me to send it to you because he had to leave Saturday night. I have had it prepared in very brief condensed form. If you desire anything further, please let me know. Faithfully yours, Enclosure: Memorandum as stated. The President, The White House. The following table shows the production, the percent of domestic consumption, and the number of wage earners employed in the manganese mining industry. U.S.Production of Manganese Percent of Domestic Wage Earners 1 Long Tons Consumption 1927 21,327 6.5 --- 1929 31,747 9.1 354 census data 1931 17,136 10.8 --- 1933 8,700 (Est.) 6.4 100-200 (Est.) 1Mining Ore 1. More than 90% of manganese, both domestic and imported, is used in the manufacture of steel (directly or in form of alloys). 2. The remainder is used in dry batteries, chemicals and special manganese alloys. 3. About one-third of the domestic production is a chemical grade not always directly competitive with foreign manganese. 4. The manganese industry was developed during the war. Domestic production reached its peak in 1918. Based on quantity produced no more employment has been given since the industry received protection in 1922 than when it was duty free in 1919 and 1920. HS 11m A-S/T:EIM:VBL 2:4:35