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SENATE

71st CONGRESS

2d Session

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REPORT No. 732

AMEND THE ACT MAKING APPROPRIATIONS FOR THE DEPART

MENT OF AGRICULTURE FOR THE FISCAL YEAR ENDING JUNE 30, 1929

May 26 (calendar day, May 27), 1930.-Ordered to be printed

Mr. McNARY, from the Committee on Agriculture and Forestry

submitted the following

REPORT

(To accompany H. R. 100371

The Committee on Agriculture and Forestry, to whom was referred the bill (H. R. 10037) to amend the act entitled "An act making appropriations for the Department of Agriculture for the fiscal year ending June 30, 1929, and for other purposes," approved May 16, 1928, having considered the same, report thereon with the recommendation that the bill do pass.

The legislation has the approval of the Department of Agriculture and the Director of the Budget.

The following letter from the Department of Agriculture addressed to the chairman explains the purpose of the legislation:

May 23, 1930 Hon. CHARLES L. McNARY, Chairman Committee on Agriculture and Forestry,

United States Senate. DEAR SENATOR: Receipt is acknowledged of your letter of May 7, transmitting a copy of a bill (H. R. 10037) with request for a report thereon.

This bill would amend the item “Flood relief, Vermont, New Hampshire, and Kentucky” in the department appropriation act for the fiscal year ending June 30, 1929 (45 Stat. L. 570) by adding thereto a proviso authorizing the Secretary of Agriculture to cooperate with the State of Kentucky in acquiring the bridge built and now operated by the Citizens Bridge Co., of the city of Hazard, Ky., over the North Fork of the Kentucky River from Main Street in said city to the Louisville & Nashville Railroad right of way and depot. The proviso also would authorize the Secretary of Agriculture to pay one-half of the cost of acquiring said bridge out of the funds appropriated by the above item for the relief of the State of Kentucky, such payment in no event to exceed $31,000. The other half of such cost shall be paid by the State of Kentucky. After the bridge is acquired the bill would require that it be operated as a free bridge.

The bridge across the Kentucky River in the city of Hazard was destroyed by the 1927 floods. The department understands that the city of Hazard had reached the limit of legal indebtedness which it could create under the State constitution, and, therefore, it could not legally borrow money with which to construct a new bridge. Considerable property damage also resulted throughout the city from the 1927 floods, which it is understood had the effect of reducing the tax assessments and revenues of the city. The department is advised that under these circumstances the Citizens Bridge Co. was organized to arrange the financing and construction of the bridge which it now is proposed to authorize this department and the State of Kentucky to acquire. The company has been operating the bridge as a toll bridge to reimburse the cost of its construction and meet the expense of its operation, maintenance, and repair. The flood-relief appropriation for the State of Kentucky was $1,889,994 and of this there remains an unobligated balance considerably in excess of the $31,000 which the bill would authorize to be used to meet one-half the cost of acquiring the bridge. No additional appropriation is contemplated by the bill.

In view of the foregoing, the department recommends favorable action on the bill. Sincerely,

R. W. DUNLAP, Acting Secretary.

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May 26 (calendar day, May 27), 1930.—Ordered to be printed

Mr. Smoot, from the Committee on Finance, submitted the following

REPORT

[To accompany H. R. 10480] The Committee on Finance, to whom was referred the bill (H. R. 10480) to authorize the settlement of the indebtedness of the German Reich' to the United States on account of the awards of the Mixed Claims Commission, United States and Germany, and the costs of the United States army of occupation, having had the same under consideration, report it back to the Senate without amendment and recommend that the bill do pass. . Following is a copy of the House report on the bill:

(House Report No. 1089, Seventy-first Congress, second session) The Committee on Ways and Means, to whom was referred the bill (H. R. 10480) to authorize the settlement of the indebtedness of the German Reich to the United States on account of the awards of the Mixed Claims Commission, United States and Germany, and the costs of the United States army of occupation, having had the same under consideration, report it back to the House with an amendment, and recommend that as amended the bill do pass.

The amendment is as follows: On page 3, line 18, after the word "of”, strike out the remainder of the paragraph down to the period and insert, "1/2790 kilogram of fine gold”.

This amendment corrects a clerical error in the last sentence of the last section of the bill.

The agreement authorized by the bill will be the first agreement between the United States and Germany for the liqui of Germany's treaty obligations on account of (1) reimbursement to the United States for the expenses of its army of occupation, and (2) payment of the awards entered by the Mixed Claims Commission, United States and Germany, on behalf of the United States Government and its nationals. The law authorizing the German Government to execute the proposed agreement was approved by President Hindenberg on March 13, 1930.

Under the terms of the armistice convention signed November 11, 1918, and of the treaty restoring friendly relations signed at Berlin, August 25, 1921, Germany is obligated to pay to the United States the costs of its army of occupation and the awards entered in favor of the United States Government and its nationals by the Mixed Claims Commission, United States and Germany, established pursuant to the agreement of August 10, 1922. Although payments have been received on account of these claims through arrangements which this Government has had with the principal allied creditor powers, the United States has had no direct arrangement with Germany for the

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liquidation of these obligations. Now that Germany has concluded negotiations with all the allied creditor powers for the final liquidation of her war debts to them, which will probably become effective early in May of this year and in which the United States has no participation, it becomes necessary, if the United States is to continue receiving payments on account of these claims against Germany, to provide for them by agreement with that Government.

The Wadsworth agreement signed May 25, 1923, by the principal allied powers and the United States provided that the United States should be reimbursed for the expenses of its army of occupation in 12 equal annual installments, the first to be paid on or before December 31, 1923. The United States was to be paid these annual installments out of funds to be collected by the allied powers from Germany. This agreement was never ratified, but certain funds aggregating $14,725,154.40 were set aside under it and were released to the United States upon the coming into force of the Paris agreement of January 14, 1925.

In the fall of 1923, due to the unstable conditions in Germany, it was apparent that the payments demanded by the Allies from Germany far exceeded its immediate capacity to pay, and the whole question of the payment of Germany's war obligations came up for consideration. The Reparation Commission in its decision of Novenber 30, 1923, invited a committee of experts, headed by Gen. Charles G. Dawes, to consider the means of balancing the German budget and the measures to be taken to stabilize the currency of Germany as well as to determine what reparation payments might be made by Germany in the immediate future. This committee's report, generally referred to as the Dawes plan, was made in the spring of 1924.

The United States was not a party to the arrangement establishing the Dawes plan, but since Germany was virtually in receivership and the payments provided for in the plan were designed to represent Germany's capacity to pay, the United States could not expect to receive the payment of any sum not included in the plan. In order to provide for the distribution of the Dawes annuities, representatives of all the creditor countries met and signed an agreement at Paris dated January 14, 1925. Under the terms of this agreement the United States was to receive on account of its claim for the expenses of its army of occupation the sum of 55,000,000 marks (about $13,000,000) per annum, beginning September 1, 1926, until the army costs should be fully liquidated. These payments were to constitute a first charge on cash made available for transfer out of the Dawes annuities after providing for the service of the German external loan of 1924 and expenses of certain commissions. The agreement also provided that the United States should receive on account of the awards of the Mixed Claims Commission 24 per cent of all receipts from Germany available for distribution as reparations, not to exceed, however, in any one year the sum of 45,000,000 marks (about $10,700,000). The Government of Germany was not a party to this agreement between the creditor powers, including the United States. The United States has received in full up to September 1, 1929, the amounts provided for it in the Paris agreement and set out in the statements of account below.

When the Dawes plan was adopted, it was understood that it did not represent a permanent arrangement but only a plan of settlement intended to operate for a sufficient time to restore confidence and

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