Mr. BARUCH. That I could not remember. I can only say this-
Dr. TAUSSIG. Not in the slightest.

Mr. BARUCH. Dr. Taussig, who was there with us, says not in the slightest. I do not know just exactly what the Senator has in his mind, but I would like to say this, that every delegation was asked to present views and suggestions, and if we liked them we took them, but if we did not like them we did not take them.

Senator JOHNSON of California. When you say "we".

Mr. BARUCH. I mean the American delegation. We took anybody's suggestions, irrespective of whom they came from. We were there for that purpose, and when they brought in these suggestions they were taken before the various subcommittees, and if any suggestion was approved, no matter from whom it came, it was written up.

Senator MOSES. And the decision was by a majority?

Mr. BARUCH. Our decisions were unanimous. We had to work to a unanimous decision.

Senator HITCHCOCK. How many nations were represented?

Mr. BARUCH. Twenty-three. That may give you some idea of the difficulties involved in every one of these questions.

Senator KNOX. Did you have much trouble with Liberia?

Mr. BARUCH. I did not see much of her.

Senator MOSES. Have you the committee print before you, Mr. Baruch?

Mr. BARUCH. Yes.

Senator MOSES. Will you turn to page 271, to paragraph 13 of the annex?

Mr. BARUCH. Yes; as to reparations.

Senator MOSES. As to voting. I wish to ask you particularly with reference to subdivisions (a) and (f). The commission under this paragraph would have to have a unanimous vote on the cancellation. of any portion of the debt or obligations of Germany. Do you think that would be easily arrived at in its decision?

Mr. BARUCH. I do not think it would be easy, but it could be done. Senator MOSES. Do you think that an interpretation of the treaty by unanimous vote as provided in subdivision (f) would be easy? Mr. BARUCH. That is, of the provisions of this part?

Senator MOSES. Yes.

Mr. BARUCH. I think it can be done; yes.

Senator MOSES. If that was done the question would never come back to the United States, would it?

Mr. BARUCH. That is correct, sir.

Senator FALL. Then the commission would have the right to cancel, without reference back to the United States, any portion of the German debt, or the American portion of the debt?

Mr. BARUCH. There is here another clause regarding cancellation, that I would like to find before I answer that question.

Senator FALL. Now, if the American representative on the commission desired to secure or to grant to Germany a postponement, either totally or partially, beyond 1930, of any payment or settlement falling due between May 1, 1921, and the end of 1926, the American commissioner could not secure such action except by unanimous vote?

Mr. BARUCH. That is right, sir. That is clause (c) that you refer to?

Senator FALL. Yes. And then in clause (d) there is the same case; so that with the American commissioner there, if we do not care for any of this reparation at all, and we sit there simply to carry out, you say, the obligations which we have incurred by going into it at all, still we would have only one vioce, and it requires a unanimous voice for the commission to grant any of these postponements.

Mr. BARUCH. They can not do anything without us.

Senator FALL. No; and we can not do anything without them. They might not want to postpone. They might want their money, and we not want it. They can not get it.

Mr. BARUCH. I do not think that it is fair to say that we are not getting anything. We are getting 130,000,000 of people on their feet, people who have been accustomed to deal with us, and helping to get a reestablishment of the financial system of the world, which is important.

Senator FALL. Providing we can force our ideas on the commission. But one of the commissioners can balk us on any step we take.

Mr. BARUCH. It is always fair to assume that we could get some arrangement.

Senator KNOx. Who are these 130,000,000 people?

Mr. BARUCH. There are more than 60,000,000 Germans and some 70,000,000 Austro-Hungarians.

Senator KNOX. Do you think this treaty puts Germany on her feet?

Mr. BARUCH. I do not think I said so. If I used that language, it did not carry my thought.

Senator KNOx. That is what you said.

Mr. BARUCH. I think I may have given a wrong impression. What I meant to sav, Senator, was that the reestablishment of financial conditions, and therefore of the industrial conditions, will help to get them reestablished and get on their feet.

Senator KNOX. My recollection is that your exact answer was that we got a great deal out of this treaty because that put 130,000,000 of people on their feet.

Mr. BARUCH. What I meant was that we got a great stake in the reparation commission, even from a selfish view, because we are interested in seeing 130,000,000 people get themselves going again, and we are interested in getting the reestablishment of industrial conditions of the world. Do I make myself clear?

Senator KNOx. Perfectly.

Senator HARDING. I want to ask if the inference is that our chief function on the reparation commission is one of a friendly and helpful interest to Germany and the Central Powers for our selfish interests rather than anything else?

Mr. BARUCH. No; I would not day so, Senator. I think it is a necessary thing for America first.

Senator HARDING. Why do you say that it is to the interest of America when the Central Powers are the most formidable commercial Irivals that we have?

Mr. BARUCH. Can you imagine the world being prosperous while 130,000,000 millions of people right in the center of the industrial

population are not prosperous? Can you imagine prosperity without the financial prosperity of the Central Powers, with the finances of Italy, France and of Belgium and their industrial life, and to a large extent England's, depending on what they are going to receive from those people? In that way this reflects upon us. It is a great big partnership. We can not separate ourselves from it. It is of vast consequence to America.

The CHAIRMAN. Mr. Baruch, I just want to ask a question about your figures. Are you quite correct about the population of Austria? Mr. BARUCH. I think it is something like 70,000,000.

The CHAIRMAN. At the beginning of the war it was said to be about 52,000,000-9,000,000 Austrians, 14,000,000 Hungarians and 26,000,000 Slavs. Those were the figures given at that time, with Germany about 70,000,000. That made about 120,000,000 altogether.

Mr. BARUCH. I thought Austria-Hungary was larger; 130,000,000 was the figure I had in mind. It may be 120,000,000. Bulgaria is in there. That is another 15,000,000.

Senator HITCHCOCK. Our interest in the welfare of Europe, Mr. Baruch, you estimate is because our chief exports go to Europe? Europe is our large customer?

Mr. BARUCH. She is our large customer.

Senator HITCHCOCK. We have therefore that interest in the restoration of order and of normal conditions in those countries because our export trade depends to a large extent upon it? Mr. BARUCH. Quite correct.

Senator HARDING. Do I understand you, Senator, that you have got away from your devotion to humanity and are now merely a selfish commercialist?

Senator HITCHCOCK. I mix the two together.

Mr. BARUCH. I think the Senator will admit that, himself.

The CHAIRMAN. I must be on the floor when the Senate opens, I do not want to interfere with the hearing, and I will ask Senator McCumber now to take the chair. I ask the committee to meet in executive session in the committee room in the Capitol at 3 o'clock so that we may dispose of the resolution of Senator Kenyon. I do not want to stop the hearing now to take that up.

Senator MOSES. There are others of us who have to be on the floor, Mr. Chairman, and I move that the committee stand in recess until 3 o'clock, then to meet in executive session.

Senator MCCUMBER. There have been quite a number of questions asked, but I think we are not quite through with the witnesses. I want to ask a few questions, perhaps three or four, of Mr. Baruch. The CHAIRMAN. I see no reason why those Senators who care to stay should not continue the hearing.

Senator KNOx. I have to be on the floor, and I have a few questions that I want to ask Mr. Baruch.

Senator WILLIAMS. I move that we take a recess.

Senator POMERENE. It is quite apparent that we can not finish to-day with Mr. Baruch and with the other witnesses who are here. A number of Senators want to be on the floor, and I think we ought to adopt the motion made by the Senator from New Hampshire to take a recess at this time.

135546-19 4

The CHAIRMAN. I only want it remembered that we are to meet 3 o'clock this afternoon. These hearings will be continued to-morr morning at 10.30 o'clock.

Now, will the committee give me their attention for one minut Mr. Taussig is here in regard to the customs provisions of the treat I am not aware that any Senator has expressed a desire to ask que tions on that subject, and it would be convenient to Prof. Taussig know whether the committee desire to question him about t customs provisions. I have heard nothing said about it.

Senator MOSES. Upon the examination of these witnesses on th section may depend what we may wish to inquire about further. think it advisable to request Prof. Taussig to come again.

The CHAIRMAN. Then the committee stands adjourned to meet 3 o'clock, in the room of the Committee on Foreign Relations in tl Capitol, and to continue the hearing here to-morrow at 10.30.

(Thereupon, at 12 o'clock, noon, the committee adjourned unt to-morrow, Saturday, August 2, 1919, at 10.30 o'clock a. m.)

1

SATURDAY, AUGUST 2, 1919.

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

Washington, D. C. The committee met at 10 o'clock a. m., pursuant to adjournment, room 426, Senate Office Building, Senator Henry Cabot Lodge ¡presiding.

Present: Senators Lodge (chairman), McCumber, Brandegee, Knox, Johnson of California, New, Moses, Swanson, Pomerene, Smith of Arizona, and Pittman.

The CHAIRMAN. Prof. Taussig is anxious to go away, and Senator McCumber desires to ask him some questions. We will allow Prof. Taussig to take the stand first this morning.

STATEMENT OF MR. F. W. TAUSSIG.

Senator MCCUMBER. Prof. Taussig, there was, in some of the questions asked yesterday, an assumption that the financial clauses were the work rather of British delegates. I want to ask you whether or not, under the terms of the treaty, there are not considerable portions of the treaty that relate to matters that are of peculiar interest and particular interest to Great Britain and France only, in which the United States has very slight, if any, direct interests, and to ask you also to what extent the American delegates took part in the matter of formulating the financial provisions, and to what extent the British delegates took part, and so forth.

Mr. TAUSSIG. You have in mind, Senator, the economic clauses as well as the financial clauses?

Senator MCCUMBER. The economic clauses equally with the finanrial clauses. I should include them.

Mr. TAUSSIG. Of course, there were some of the economic questions with which the British and French were peculiarly concerned. The arrangement in regard to prewar duties, for example, was one which the British and the French put together and which the United States from the start said that they would not enter into. Naturally the drafting of the details of that was something in which the American delegates took no part, since we would not enter into it anyhow. Those clauses in their details occupy a considerable number of pages in the treaty.

When it comes to the clauses in which the United States entered, all nations took their part, and we took our hand in the drafting, as other nations did, and I do not think it can be said that there was a predominance of any country.