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Mr. HACKWORTH. A loan to Finland, circumscribed as it is by this Act, would not, in my opinion, be a violation of it.

Mr. SIMPSON. Then the State Department has taken a position that there is no war existing between Russia and Finland?

Mr. HACK WORTH. Has it taken that position?

Mr. SIMPSON. It would have to take that position.
Mr. HACKWORTH. It would have to take that position?
Mr. SIMPSON. Yes; in order to come to that conclusion.

Mr. HACKWORTH. Í am not prepared to say that it would have to do that today even under the thirteenth Hague Convention of 1907. In discussing the relationship between neutrals and belligerents, it states that a neutral power may not sell directly or indirectly to belligerents warships, ammunition, or other materials.

It does not state that the sale by a neutral of food supplies or materials other than war materials would be unneutral.

I think it is reasonable to suppose that had the negotiators of that convention thought that it would be unneutral to sell commodities other than those specified they would have so stated. But they did not.

The Habana Convention follows along the same line as the Hague Convention, specifying warships, ammunitions, and war materials. So that I do not believe that we are forced to the conclusion that we cannot sell anything even to a belligerent country or that we cannot make a loan to a belligerent country for any purpose. Although they are there speaking of loans to belligerents they had in mind loans for general war purposes as distinguished from humanitarian purposes. I think that distinction can be made.

Mr. MILLER. Both belligerent countries, Great Britain, France, and Germany, have claimed that wheat is a contraband.

Mr. HACKWORTH. Yes; the belligerents have practically everything on the contraband list.

Mr. MILLER. While on that subject, can an American citizen, without any trouble, get a passport to Brazil?

Mr. HACKWORTH. Oh, yes.

Mr. MILLER. Can an American citizen get a passport to Finland? Mr. HACKWORTH. I do not know what can be done with respect to passports to Finland at the present time, but passports are not issued to American citizens to go to countries which have been declared to be belligerent, except under the most urgent circumstances.

Mr. MILLER. I wondered whether the State Department considered, for the purpose of passports, Finland and Russia as belligerent countries; and under the Neutrality Act I am wondering whether an American citizen would have a right to go to Finland or Russia, or whether they are considered belligerent countries for that purpose.

Mr. HACKWORTH. I am not perpared to answer that. I do not handle passport matters but the question of issuing passports is governed largely by the situation obtaining in the foreign country to which people desire to go. It might very well be that there are restrictions in respect to passports to Finland and Soviet Russia.

Mr. SIMPSON. Are our ships permitted to go to Finland?

Mr. HACKWORTH. Only to areas that have not been defined as a combat area under the Neutrality Act.

Mr. LUCE. Has the word "belligerent" received any definition by the State Department?

Mr. HACKWORTH. The word "belligerent" is very well understood and has an accepted meaning in international relations. It means a country that is at war.

Mr. LUCE. That has declared war?

Mr. HACKWORTH. Not necessarily declared war. If it is actually at war, or has a status which amounts to war, it is a belligerent. Mr. LUCE. Well, that is the whole question. Do you consider Japan at war?

Mr. HACKWORTH. We have never gone that far.

Mr. LUCE. Then there is no word signifying that a country is at war unless it has declared war?

Mr. HACKWORTH. No; I do not think it is possible to limit it to a declaration of war. There may be war without a declaration of war, as Judge John Bassett Moore has pointed out.

Mr. SPENCE. Would the status of Finland be changed if Russia declares war on her?

Mr. HACKWORTH. Yes.

Mr. SPENCE. She becomes immediately a belligerent?

Mr. HACKWORTH. She becomes a belligerent.

Mr. LUCE. She is not a belligerent today?

Mr. HACKWORTH. She has not been so declared by any country to my knowledge.

Mr. WOLCOTT. The President has authority under the Neutrality Act to proclaim that Finland is a belligerent, although he has not so declared; or that Japan is a belligerent, although that has not been declared.

Mr. HACKWORTH. He does.

Mr. WOLCOTT. But he has not so declared.

Mr. HACKWORTH. He has not.

Mr. WILLIAMS. Then I think it might be added there is no obligation upon the President, as he stated a while ago, according to my understanding, under the Neutrality Act. It is not only a question of the President coming to the conclusion that a state of war exists, but in addition to that there must be some threat to the security of our own counry or to the safety of our citizens before a declaration should be made.

Mr. HACKWORTH. That is correct.

Mr. WOLCOTT. The security of the United States, in respect to the war between Germany and the Allies, arises out of the fact that war has been declared?

Mr. HACKWORTH. War has been declared and the President has found it necessary to invoke the Neutrality Act.

Mr. WOLCOTT. It seems to be an ironical situation confronting us where we have the fact that the only countries at war today, who are doing the actual fighting, are those who are not at war.

Mr. HACKWORTH. There may be a justifiable reason for not invoking the Neutrality Act with respect to Finland and Russia, as I stated a moment ago.

Mr. WOLCOTT. The justification for war not being declared between Finland and Russia is so that we may help Finland. And if a war was declared between China and Japan we could not help China; is that the justification?

Mr. HACKWORTH. That is not the justification. The justification for not declaring that a state of war exists in the Far East is the fact that while American interests are now affected by reason of the operations being conducted there, a finding that war exists would probably aggravate the situation.

Mr. WOLCOTT. Why would neutrality be threatened by a declaration of war between Finland and Soviet Russia or between Japan and China?

Mr. HACKWORTH. Even though Finland or Russia should declare war it would not be necessary to invoke the Neutrality Act.

Mr. WOLCOTT. I understand that.

Mr. HACKWORTH. Because the provisions of the act are not mandatory.

Mr. WOLCOTT. No. Could we ship them supplies and raw materials if a state of war was declared to exist?

Mr. HACKWORTH. We probably would recognize the state of war, but that would not necessarily mean that we would have to invoke the Neutrality Act because the Act provides that it shall be invoked only if the safety of the United States or its nationals shall be threatened.

Mr. WOLCOTT. I am not sure but what the Neutrality Act has resulted in a colossal fraud on the American people in leading them to believe and trust that we have taken a step which meant neutrality. I think the fraud is very apparent when we are not taking cognizance of the fact that a state of war exists when we know actual fighting is going on.

Mr. WILLIAMS. In that connection, Mr. Hackworth, has any other civilized nation, so far as you know, proclaimed a state of war existing between Russia and Finland?

Mr. HACKWORTH. We have not heard of any such action.

Mr. WILLIAMS. Or that any nation recognizes a state of war existing between China and Japan?

Mr. HACKWORTH. We have heard of no such recognition on the part of any country.

Mr. WILLIAMS. I can see no very good reason why we should be the only nation in the world to do that.

Mr. WOLCOTT. Has any other nation, so far as you know, passed a neutrality act comparable to that of ours?

Mr. HACKWORTH. My impression is that no other country has passed such an act.

Mr. WOLCOTT. That would put us in a little different position, would it not, in that we are the only country which has passed a Neutrality Act?

Mr. HACKWORTH. Well, I do not think that the Neutrality Act puts us in any different position from that of any other neutral country for the reason that it is not incumbent upon the President to invoke the act. We can still recognize that a state of war exists without invoking the act because the act gives the President discretion. Mr. GORE. It gives the Congress the same right.

Mr. HACKWORTH. The Congress has the same right.

Mr. GORE. Any member of Congress if he wants to do so, can introduce a resolution to that effect?

Mr. HACKWORTH. That is correct.

Mr. GORE. And that particularly applies to the gentleman from Michigan.

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Mr. WOLCOTT. In respect to the Johnson Act, it provides:

That hereafter it shall be unlawful within the United States or any place subject to the jurisdiction of the United States for any person to purchase or sell the bonds, securities, or other obligations of, any foreign government or political subdivision thereof or any organization or association acting for or on behalf of a foreign government or political subdivision.

And section 2 of that act reads:

As used in this act the term "person" includes individuals, partnerships, corporations, or associations other than a public corporation created by or pursuant to special authorization of Congress, or a corporation in which the Government of the United States has or exercises a controlling interest through stock ownership or otherwise.

Has the State Department, to your knowledge, ever been consulted in respect to any activities by any of the agents exempted under section 2 with respect to the purchase of securities of belligerents? I have particularly in mind the Federal Reserve Bank of New York. Mr. HACKWORTH. It may be that the Department has been consulted but it so happens that I have no knowledge on the subject.

Mr. WOLCOTT. Then you do not know, or do you, whether the Federal Reserve Bank of New York is acting as a fiscal agent of the Governments of Great Britain and France for the purpose of making loans and disposing of foreign securities in this country and for the specific purpose of the sale of belligerent securities in this country? Mr. HACKWORTH. I do not know.

Mr. WOLCOTT. You have not been apprised of that?

Mr. HACKWORTH. No.

Mr. WOLCOTT. Have you ever been apprised with respect to the Federal Reserve Bank of New York acting as fiscal agent for the stabilization fund in the purchase of belligerent securities?

Mr. HACKWORTH. I have not had anything to do with such matters, and I have no knowledge with respect to them.

Mr. GIFFORD. You have not?

Mr. HACKWORTH. No.

Mr. GIFFORD. You have seen notices in the newspapers on that, have you not?

Mr. HACKWORTH. I have seen something to that effect in the newspapers.

Mr. WOLCOTT. Would you consider that, if that is true, a violation of the letter and the spirit of the Neutrality Act under which we hold out to the people of this country that we are compelling them to pay cash, if they wanted to buy materials they would have to pay cash; after we were very decisive in telling the belligerents they would have to pay cash, would not the State Department take cognizance of the fact that if a corporation, set up by the American Congress, was creating credit, by which cash was then obtained and being used by the belligerents to purchase raw materials a violation of the letter and spirit of the Neutrality Act?

Mr. HACKWORTH. I have not heard of any corporation doing that. Mr. WOLCOTT. The Federal Reserve Bank is a corporation.

Mr. HACKWORTH, I have no knowledge on the subject; I am not able to answer.

Mr. WOLCOTT. Who should we see in the State Department to determine whether the Department has ever been approached in respect to the Federal Reserve bank operating as I have just said?

Mr. HACKWORTH. I should suppose that the Economic Adviser could answer the question.

Mr. WOLCOTT. Who is he?

Mr. HACKWORTH. Dr. Feis.
Mr. WOLCOTT. Dr. Feis?
Mr. HACKWORTH. Yes.

Mr. FORD. I was just wondering whether the gentleman from Michigan wanted the statement to stand that Congress has perpetrated a colossal fraud on the people of the United States.

Mr. WOLCOTT. No; but I do think, if the State Department is countenancing the purchase of foreign belligerent securities by the Federal Reserve bank, the State Department is perpetrating a colossal fraud on the people of the United States, in defiance of the expressed spirit of the Neutrality Act.

Mr. FORD. Well, that is different from your first statement.
Mr. WILLIAMS. Mr. Crawford.

Mr. CRAWFORD. Mr. Hackworth, what is the date of the Hague Convention?

Mr. HACKWORTH. 1907.

Mr. CRAWFORD. And what was the date of the Habana Convention? Mr. HACKWORTH. 1928.

Mr. CRAWFORD. What countries participated in the first convention? Mr. HACKWORTH. Many countries.

Mr. CRAWFORD. I do not mean for you to name them.

Mr. HACKWORTH. Most of the European countries.

Mr. CRAWFORD. Did the same countries participate in the Habana Convention?

Mr. HACKWORTH. The Habana Convention was concluded between the American republics.

Mr. CRAWFORD. You mean to say it is restricted to the Western Hemisphere?

Mr. HACK WORTH. Yes; it is merely an agreement between the countries of the Western Hemisphere.

Mr. CRAWFORD. In other words, it is in no way binding upon the countries of Europe.

Mr. HACKWORTH. Oh, no. I might add that what they were trying to do at Habana was to codify international law and that what they put in this convention represented their view as to international law.

Mr. CRAWFORD. It represented the views of those who participated. Mr. HACKWORTH. Yes.

Mr. CRAWFORD. But not the views of the countries that did not participate.

Mr. HACKWORTH. Well, of course, the other countries might very well entertain different views.

Mr. CRAWFORD. Did I understand, in reading these excerpts from the messages of statements from the Soviet Republic and the Finnish Minister that they were dated December 5, 1939?

Mr. HACKWORTH. The one from the Soviet Republic was dated December 5, 1939. The one from the Finnish Minister was dated December 1.

Mr. CRAWFORD. And since that date the Department of State has had no further formal statements from those two countries as to their belligerency or state of war; is that correct?

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