from the service or would you only grant those increases to the employees who continued in the service?

Mr. BROWNLOWw. I would only allow the increases to those who continued in the service, but I think it would be necessary to carry some additional language for that purpose, otherwise they would all be entitled to it.

THURSDAY, SEPTEMBER 5, 1918.

WAR TRADE BOARD.

STATEMENT OF MR. HERBERT N. STRAUS, CONTROLLER OF THE WAR TRADE BOARD.

CABLE CHARGES COLLECTED FROM EXPORTERS, IMPORTERS, AND OTHER

SOURCES.

Mr. BYRNS. Mr. Straus, representing the War Trade Board, you are asking for additional language in the legislation that was carried in the deficiency bill which was passed in July of this year with reference to the crediting of cable charges. You desire to add to the language the words "importers, and all other sources." Will you explain the reasons for desiring such additional language?

Mr. STRAUS. When I testified before you previously, which resulted in the act of July 8, 1918 (Public No. 191, 61st Cong., p. 5), it was for the purpose of permitting the War Trade Board to create a revolving fund from the collection of charges made by the War Trade Board to exporters for the sending of cables forwarded at the exporter's request. No commodities can be imported into this country without a license from the War Trade Board. It now appears that in order that ships be held at foreign ports for the minimum amount of time, it is thought advisable to cable certain necessary information to the consuls at these ports in order that ships be promptly cleared. We cable the number of the license, the name, and amount of the commodity covered therein, and the names of the consignor and consignee. The importer, in order to have his shipment expedited, is willing and agrees to reimburse the War Trade Board for the expense of these cables. These cables are the authority which permits the consul to certify the consular invoices. The cost to the importer is small in comparison to the value of the commodity he wishes to import. To the War Trade Board, in the aggregate, the cost of said cables depletes our appropriation. At present we calculate there will be approximately 400 of these cables daily.

Mr. BYRNS. Averaging how much per cable?

Mr. STRAUS. They average, I should judge, about $3, depending on the destination. As you probably know, all of our cables are sent through the State Department, and in code when possible. This expense will total about $1,200 a day. In our original budget we figured that all our cable expense would not exceed $25,000 per month, or about $300,000 per year.

Mr. GILLETT. These are not your cable charges?
Mr. STRAUS. Yes, sir.

Mr. GILLETT. It says "collected from exporters, importers, and all other sources.'

Mr. STRAUS. We want to collect the charges for these cables from the importers, but as matters now stand, even if we do collect them, we can not reimburse our own funds.

Mr. GILLETT. They do not cost you anything.

Mr. STRAUS. All cables to consuls go through the State Department; we cable the license numbers and important information to the consuls which authorizes them to visé the consular invoice and permits the shipment to be placed on shipboard.

Mr. GILLETT. Are those the only cables that exporters and importers send?

Mr. STRAUS. We send those cables.

Mr. GILLETT. But do they not send other cables?

Mr. STRAUS. Not through the War Trade Board?

Mr. GILLETT. This provides, as I understand it, that you shall be allowed the amount they pay; it does not say the cables that you pay for or that are sent through the State Department.

Mr. STRAUS. All of these cables are sent by the War Trade Board, at the request of the importer or exporter.

Mr. GILLETT. But can not the exporter or the importer send any other cables?

Mr. STRAUS. Not to consuls concerning their own licenses.

Mr. GILLETT. But this does not say anything about cables sent to consuls.

Mr. SISSONS. In other words, is the cable restricted to your use alone or could a private individual or a private company send a cablegram? That is what Mr. Gillett has in mind.

Mr. STRAUS. They, the consuls, will not accept an authorization from a private individual for the viséing of a consular invoice. Mr. SISSON. This does not say anything about that.

Mr. STRAUS. I think if you will refer to the original legislation you will find it provides for that.

Mr. BYRNS. This provides that the amounts collected from exporters, importers, and all other sources shall be credited to the appropriation for the War Trade Board.

Mr. GILLETT. Collected by the cable company?

Mr. BYRNS. No; the War Trade Board.

Mr. STRAUS. You see, we send these cables and the exporters or importers agree to reimburse the War Trade Board.

Mr. GILLETT. You mean the amounts collected by the War Trade Board?

Mr. STRAUS. Yes, sir.

Mr. GILLETT. I thought you meant collected by the cable companies, which are now under Government control.

Mr. STRAUS. No.

Mr. GILLETT. That explains it.

Mr. BYRNS. This legislation is intended to reimburse the War Trade Board for the amount the War Trade Board expends for these cables.

Mr. STRAUS. Yes, sir; I thought that was set forth in Document No. 1264.

Mr. BYRNS. Why is it this money can not be collected in advance from those for whom the cables are sent?

Mr. STRAUS. Because we do not know what the charges will be; we do not know until the State Department renders its bill. Sometimes, in distant ports, they are relayed by wireless; sometimes they go direct by cable to a nearby port but have to be retransmitted, and there is no way of knowing what the cables will cost at the time of sending.

Mr. BYRNS. You say "the amounts collected from exporters," which was carried in the old law, and "importers, and all other sources." What other sources are there?

Mr. STRAUS. This is to cover a contingency, which has frequently arisen, should an individual ask us to use our cable facilities to get certain information from one of our foreign Federal agents. This information would be of material aid to the individual in deciding whether he should file an application for the export or import of a given commodity. This is done merely for the accommodation of an individual who is only too happy to defray the expense of such a cable. It has no direct relation as far as the War Trade Board itself is concerned in the granting or refusing of a license.

Mr. CANNON. It says "the amounts collected from exporters, importers, and all other sources for cable charges." I suppose your board does a very small part of the business of sending cables, and you send them through the State Department.

Mr. STRAUS. We simply use that department; yes.

Mr. CANNON. This provides that "the amounts collected from exporters, importers, and all other sources for cable charges during the fiscal year 1919 shall be credited to the appropriation for the War Trade Board," which includes everything, does it not?

Mr. SISSON. Yes.

Mr. GILLETT. I think the words "War Trade Board" should be inserted, so that it would read "the amounts collected by the War Trade Board from exporters, importers, and all other sources for cable charges."

Mr. SISSON. Undoubtedly those words should be inserted.

Mr. GILLETT. The amounts collected by the War Trade Board, because that is what you mean.

Mr. STRAUS. Yes.

Mr. BYRNS. That will make it clear, but I think this language would be construed to mean the War Trade Board.

Mr. GILLETT. That is obviously what is meant, but I did not understand it.

Mr. STRAUS. I do not know whether you have the act of July 8 before you.

Mr. BYRNS. Yes: I have it here.

Mr. SISSON. Read the act of July 8.

Mr. STRAUS (reading):

The amounts collected from exporters for cable charges during the fiscal year nineteen hundred and nineteen shall be credited to the appropriation for the War Trade Board and be available for the purposes thereof during the said fiscal year.

Mr. SISSON. That is a very awkward piece of legislation-just that language itself.

Mr. STRAUS. It is not clear; I can see that.

Mr. SISSON. As suggested by Mr. Cannon and Mr. Gillett, it simply means that every charge would go to the credit of the War Trade Board.

Mr. STRAUS. That could be made clear by inserting the words suggested by Mr. Gillett, making it read "the amounts collected by the War Trade Board from exporters, importers, and all other sources.' Mr. SISSON. I think that language is necessary.

Mr. BYRNS. What are some of the other sources, Mr. Straus, to which you refer in this language?

Mr. STRAUS. There are occasions when a private individual, who may not be a regular exporter or importer, asks that a cable be sent covering an individual license. Again, an individual may desire some information from a consul or other Federal agent located abroad and ask if we forward a cable for which he is willing to reimburse the War Trade Board. In both these and similar cases the War Trade Board funds, it appears to me, should be permitted to be reimbursed for the outlay of such cables. Instead of reading "and all other sources," it might be well to provide language which will cover individuals, as that would make it more clear.

Mr. BYRNS. Have you a statement indicating just how much has been expended for this purpose?

Mr. STRAUS. As to charges for importers' cables, we have not asked for reimbursement from them as yet, the board resolution only having been passed on August 16.

Mr. SISSON. You want to treat this as a revolving fund?

Mr. STRAUS. Yes, sir.

Mr. SISSON. What check will Congress then have upon your disposition of the funds?

Mr. STRAUS. We keep very careful books of similar accounts with exporters.

Mr. SISSON. I understand that, but Congress never gets any information from you. We would have to make a special request for an accounting unless we should cure it here by putting in this clause that you shall be called upon to furnish an accounting.

Mr. GILLETT. It just balances; it is only getting back what they have spent for cables.

Mr. SISSON. That is true.

Mr. GILLETT. So it just balances itself.
Mr. SISSON. Provided he gets it back.

at is whether they do get it back.

What I am trying to get

Mr. STRAUS. May I suggest to you that when an application is submitted to the War Trade Board the exporter or importer agrees to bear the cable charges, and swears to the statement which I have here.

Mr. SISSON. I understand that you may exercise every business precaution to be sure that the Government loses no money-and I hope you are, and that the Government will lose no money-but Congress, having control of appropriations and these funds collected from different sources, ought to have some report from you showing what has been done.

Mr. STRAUS. We will be very happy to submit one, and to do so Is a very simple matter.

Mr. CANNON. You do not send dispatches for private individuals unless you get the money, do you?

Mr. STRAUS. Yes, sir; we do; but they agree to defray the cable charges. They have the privilege of either having their request sent by mail or by cable, and, naturally, the cable being much more expeditious, they want to avail themselves of our cable facilities, and they sign a statement in which they agree to defray the expense of the cable.

Mr. CANNON. But suppose they do not pay it.

Mr. STRAUS. We have found they pay very promptly.

Mr. CANNON. But there are 100,000,000 people in this country. Of course, you are safe if you have the guaranty of the interests in New York, Philadelphia, New Orleans, and so forth, but my observation is that I have some constituents, small fellows, who want to get a license and get into the procession if it does not cost anything, and I conceive that is true all over the country, and if they should send cables it might be difficult to get a return.

Mr. STRAUS. You will find that the majority of people who are exporting and importing through the War Trade Board are largely people of responsibility. The restrictions that are thrown around the granting of licenses are such that, unless it is of vital importance to the exporter or importer, they do not apply for a license.

Mr. CANNON. You do not know how much of a deficiency there is to be?

Mr. STRAUS. No, not exactly.

Mr. CANNON. Why can you not cure this by making it a revolving fund?

Mr. STRAUS. That is the plan.

Mr. BYRNS. It is a revolving fund now.

Mr. STRAUS. The previous legislation, of July 8, is in the form of a revolving fund.

Mr. SISSON. It would no doubt work out all right because Mr. Straus says he has no objection to making a report to Congress each year as to how this fund is used.

Mr. STRAUS. There will be no objection to that at all.

Mr. BYRNS. The statement which you have submitted to me shows that there has been expended for cable charges of all kinds in the month of April, $44,989.53; in the month of May, $32,812.33, and in the month of June, $37,701.78, or a total for the three months of $115,503.14, which is an average of a little over $35,000 a month. As I understand, there has been appropriated the sum of $25,000

a month.

Mr. STRAUS. That is the figure which we calculated would cover all cable expense when we presented our budget.

Mr. BYRNS. And the enactment of this legislation would enable you to get by without asking for a deficiency appropriation, you think?

Mr. STRAUS. I would not want to go on record as saying that, but it will lessen the deficiency by the amount collected from such

sources.

Mr. BYRNS. What proportion of this entire sum of $115,000 would you say was reimbursable?

Mr. STRAUS. Thus far we have not sent any cables for importers, and, therefore, those charges do not enter into this statement. However, we expect to do it as soon as our request is granted.