THE
COMMISSION
FOR RELIEF IN BELGIUM
CHAPTER XIII
LIQUIDATION OF THE C.R.B.
The recovery by the Allied Armies in October and November 1918 of the French and Belgian territories so long held by the Germans did not end the Commission's service to the people of these regions.(350) There were no agencies, public or private, then in a position to take over the Commission's functions, which were, at the request of the French and Belgian Governments, continued for several months after the Armistice. No beginning was made, therefore, with the liquidation of the Commission until the two Governments were ready to assume its responsibilities. In the meantime, in order to hasten the rehabilitation of those people who had lived in destitution so long, the Commission delivered hundreds of thousands of tons of foodstuffs and clothing through the long-established relief channels. As rapidly as possible new channels that had been closed by the war were reopened. In January 1919 the Belgian port of Antwerp, so long in German hands, replaced Rotterdam as the C.R.B.'s main transshipping point for Belgium. For some time, also, the stream of supplies for Northern France necessarily flowed from the north (as during the war), for although the armies had moved on, a wide strip of devastation blocked the routes from the south. The situation in Belgium in the months immediately after the Armistice and the methods adopted by the Commission to meet this situation are indicated in the following document.(351)
.
Extracts from letter,
POLAND TO GRAY, describing the post-Armistice situation in Belgium and the work undertaken by the Commission
LONDON, 3 January 1919
MY DEAR GRAY:
I have just gotten back from a continuous round in Belgium and liberated France, which began on the 5th of November. From that time on I have been only one day in London and I cannot remember spending more than three nights in succession in the same bed.
The situation following the evacuation was very bad indeed. Transport had almost completely broken down, and we none of us realized how completely the initiative of the people of the occupied territories had been crushed by four years of domination. Even those men whom we thought most resourceful and strong in standing against the Germans were for a long time almost helpless and are only now beginning to recover independence of thought and power to execute. It became absolutely necessary for the C.R.B. in Belgium to act in order that the distribution might be forced through. We were, in fact, urged by the individual members of the Government to assist their local committees in reorganization, but it was at the same time evident that they wished the impression to go out, for political purposes, that the entire feeding of the liberated region was due to the efforts of the Government. From the human point of view this was perfectly understandable, since it was evident that, unless they could win the high appreciation of the Belgian populace in such manner, they could not expect to retain office. A first natural reaction also caused the Belgians to feel that now they could act for themselves and needed no outside assistance, and that it would not be in accordance with their self-respect to have Americans in direct control of their internal ravitaillement system.
This spirit still continues, although there is an enormous and continually growing feeling of appreciation of what we have done. Personally I respect the Belgians for their attitude in this matter and entirely sympathize with them, and think it proper that we should cease to intervene in their national affairs just as soon as it is physically possible for us to withdraw.
The situation concerning ravitaillement at the moment is this: The Minister of Ravitaillement, M. Wauters (a Socialist) has taken over on the part of the Government responsibility for the carrying on of the work. He is a man of intelligence, but not very well posted on the general subject of ravitaillement and inclined not to make a move unless he knows he is right. The result is that, while matters are becoming gradually better organized, action is being taken very slowly on questions which require immediate decision.
The Comité National has consented to continue the execution of the work of ravitaillement, the responsibility, however, resting with the Ministry of Ravitaillement .....
In connection with the Minister, Van Brée, Francqui, Brown, Baetens, and so forth, I went over the food situation and in accordance with the agreements with the British and French Governments prepared a new program which provides for about [3,000] calories per day, instead of the 2,000 we previously attempted to send in. This has to be modified slightly, cutting out maize for one thing, and latest corrected copy is now being forwarded to you. Our relation to the work will be that for the present we will, in accord with the Belgian Ministry of Ravitaillement, etc., determine the amount of the imports of main products to be furnished monthly. In doing this we will obtain approval of the Allied Governments and will take into account the amount of foodstuffs which drifts into the country through private initiative. We will receive from the Comité National (for the Belgian Government) such distribution statements as will enable us to know that the proper protection is being given to the various provinces. We will no longer ask for statements of distribution to communes. Goods will be held in the name of the C.R.B. until actually turned over by Antwerp or Rotterdam through the Comité National for distribution. We will supply the ships and make purchases as heretofore.
In regard to secours we will cease to intervene except in continuing to distribute the quantities of used clothing which your Red Cross campaign in the United States is providing.(352) After our present orders have been filled, we will cease to intervene in the new clothing situation in Belgium, leaving it to Belgian Government initiative. Meanwhile, however, it is absolutely essential that the used clothing be distributed, if the people are to be clothed, as the purchase of new clothing runs into such enormous figures that I think it unlikely that the Government would be able to finance it.
On January 1st Fletcher and a small office staff were moved to Antwerp. The intention is gradually to transfer the Rotterdam office to that point, and Brown will take up residence in Antwerp . . . . about the 25th of January. The Belgians are crazy to get Antwerp put into service again and there is no reason why this should not be done as soon as the port is prepared to receive steamers, which it is not at present. The Germans had the entire place blocked with an enormous, quantity of dead freight such as coal, paving blocks, immense quantities of lumber, gravel, iron carts, various sorts of heavy munitions, which must be removed before there is room to handle cargoes. We expect that the food steamers will be handled about the 15th of January, but the port will have to be put into service slowly.
On the other hand, the Food Administration expects to turn over to the C.R.B. for storage at Rotterdam over one hundred thousand tons of cargo, which for political purposes will be held in the name of the C.R.B. to be distributed later. It will therefore be necessary to maintain our Dutch office organization unless conditions change which they are doing almost daily.
. . . . . . . . . . . . . . . . . .
Faithfully your friend
(Signed) W. B. POLAND
.
In accordance with Hoover's plan to turn over the provisioning of the recently occupied districts to their Governments as soon as the latter were prepared to undertake it, the Commission began in May 1919 to hand over its relief vessels to a Belgian Government agency.(353) In Northern France, meanwhile, the transportation lines from the south had been repaired and the French Government was able to include these districts in its national program. These developments indicated that the Commission need no longer continue as the provisioning agency for the 9,000,000 Belgian and French people and might commence the formidable job of liquidation. The tables(354) which follow showing, first, the gross operations of the Provisioning and Benevolent Departments, and, secondly, the funds received and disbursed by the Commission, give an idea of the size of the enterprise and explain why liquidation was itself a very large undertaking. Practically all the currencies of the world entered into the financial accounting of the Commission. In order to simplify the bookkeeping the following exchange ratios were maintained during the active period of the Commission, realized differences being charged to an exchange account: $4.85 =£1 = Frs. 25.40 = Fls. 12.03. For convenience the accounting figures, originally in sterling, are converted to dollars at $4.85 in the following tables.
TABLE I
BRIEF STATEMENT OF GROSS OPERATIONS OF THE PROVISIONING AND BENEVOLENT
DEPARTMENTS OF THE COMMISSION
A. Provisioning Department. This division of the organization operated as a business enterprise in the purchase, transportation, and sale of supplies for the provisioning of the population.
OPERATING ACCOUNT. PROVISIONING DEPARTMENT
| Purchase value of provisions |
$642,451,917.81 |
| Transport expense |
165,239,023.32 |
|
Total provisions |
$807,6902941.13 |
| Charges on 20,000,000 rations supplied in Belgium through British Army |
$ 4,377,650.26 |
| Overhead and administration(355) (entire organization) |
3,908,892.74 |
|
Total charges |
$815,977,484.13 |
| Surplus on sales, including profits on transactions entirely outside Belgium and France (available for benevolence) .... |
$111,704,000.95 |
|
Total operations, Provisioning Department |
$927,681,485.08 |
B. Benevolent Department. The function of this department was the care of the destitute.
BENEVOLENT ACCOUNT. BENEVOLENT DEPARTMENT
| World charity |
$ 52,290,835.51 |
| Comité National de Secours et d'Alimentation profits transferred to Commission for benevolence |
23,933,542.26 |
| Provisioning Department surplus transferred |
111,704,000.95 |
|
Total available for benevolence |
$187,928,378.72 |
.
TABLE II.
SUMMARY OF FUNDS RECEIVED AND FUNDS DISBURSED BY THE COMMISSION
FUNDS RECEIVED BY COMMISSION
A. Government Subsidies (advanced as loans to Belgium and France)
| 1. Through United States Treasury |
$386,632,260.44 |
|
| 2. Through British Treasury |
109,045,328.73 |
|
| 3. Through French Treasury |
204,862,854.21 |
|
|
Total Government Subsidies |
$700,540,443.38 |
78.4% |
B. World Charity
| 1. From United States |
$34,521,026.99 |
|
| 2. From British Empire |
16,641,034.85 |
|
| 3. From General Sources |
1,128,773.67 |
|
|
Total World Charity |
$52,290,835.51 |
5.8% |
C. Commercial Exchange
| Remittances to individuals in Belgium |
$ 6,328,328.30 |
0.7% |
D. Operating Surplus and Profit(356)
| Available for benevolence |
$135,637,543.21 |
15.1% |
|
Grand Total Funds Received |
$894,797,150.40 |
100.0% |
FUNDS DISBURSED BY COMMISSION
I. BELGIUM
| A. Goods supplied and expenditure incurred to the Comité National de Secours et d'Alimentation |
$557,201,132.57 |
| B. Cost of 20,000,000 rations supplied by the C.R.B. through the British War Office |
4,377,650.26 |
| C. Commercial exchange. Remittances to individuals in Belgium |
6,328,328.30 |
| D. C.R.B. benevolence. Gifts of cash and clothing |
48,511,734.00 |
| E. Refund of working capital to the United States Treasury as reduction of loans to Belgium (£383,013 at $4.85. Current rate at repayment was $3.95) |
1,857,613.43 |
|
Total funds disbursed on Belgian account |
$618,276,458.56 |
.
II. FRANCE
| A. Goods supplied and expenditure incurred | |
| 1. To the Comité d'Alimentation du Nord de la France |
$216,033,665.27 |
| 2. To the Comité Général de Ravitaillement des Régions Libérées |
16,017,195.20 |
| B. C.R.B. benevolence. Gifts of cash and clothing |
21,226,073.42 |
| C. Refund of working capital to the United States Treasury. As reduction of loans to France (£4,366,200 at $4.85. Current rate at repayment was $3.95) |
21,176,070.00 |
| Total funds disbursed on French account |
$274,453,003.89 |
III. NORTHERN RELIEF
| Clothing distributed through the American Relief Administration |
$ 2,067,687.95 |
| Grand total funds disbursed |
$894,797,150.40 |
.
Beginning with the first weeks of its life in 1914 and throughout the entire five years of its existence the Commission issued weekly and monthly financial statements and periodical reports concerning the relief work. These were submitted to its diplomatic sponsors, to the interested governments, and distributed widely to the public. As the following documents show, Hoover had, at an early date, secured precise definitions of the Commission's responsibilities and official approval of its accounting methods from the governments concerned. The conditions of war made it extremely difficult to present complete accounting statements of the vast enterprise at specific dates prior to the termination of relief shipments, but on the 10th May 1919 Hoover laid before the Belgian and French Governments his proposals for the liquidation of the Commission's financial accountability to these Governments. This was a restatement of principles that had already been agreed upon, and both Treasuries gave their formal assent.
.
Memorandum,
by HOOVER FOR VAN BE VYVERE, regarding the financial responsibility(357) of the C.R.B. for funds received for relief in Belgium
LONDON, 15 July 1916
1. The responsibility for moneys expended by public subscription and commercial exchange and their expenditure are exclusively upon the C.R.B. and C.N.
2. The Belgian Government accepts the principle that their monthly subsidy constitutes a remittance through the C.R.B. to the C.N. for expenditure on the "Secours Extraordinaire" for the purposes listed in the Provisional Accounts of May 31 (No. 57) and such additional purposes as may be authorized from time to time by the Belgian Government.
3. The Belgian Government accepts the principle that the C.R.B. is completely discharged of all responsibility to the Belgian Government by a certificate of Messrs. Deloitte, Plender, Griffiths and Company, that the subsidies of the Belgian Government had been paid to the C.N. and any balances so unpaid to be refunded to the Belgian Government in cash by the C.R.B. or in goods at cost.
4. The Belgian Government to hold the C.N. responsible for the expenditure of the various departments of the "Secours Extraordinaire" until they have had an opportunity to satisfy themselves after the war.
5. The Belgian Government insists that the profits of the C.R.B. and the C.N., while in part the result of volunteer service, are also in part due to profit on exchange; and the Belgian Government agrees that that part which is due to volunteer service may be expended by the C.R.B. and C.N. for any purpose to the benefit of the Belgian people upon which the C.R.B. and C.N. may agree.
6. The Belgian Government insists that that portion of the profits which is due to exchange shall be accounted for to the Belgian Government. In respect, however, of the profits made on exchange, these are to be calculated as being the difference between the standard rate of the C.R.B. and C.N. of Frs. 25.40 and the average rate month by month of the exchange of French currency in London, and to be determined by Messrs. Deloitte, Plender, Griffiths and Company, whose statement shall be final.
7. It is agreed that the C.R.B. and the C.N. may at once expend the profits from exchange upon "Secours Ordinaire" and may reserve the profits arising from volunteer service until after the profits from exchange have been so expended and that any balance which they may have so unexpended they may make use of as in (5) and that a certificate from Messrs. Deloitte, Plender, Griffiths and Company, that such exchange profits have been so expended upon the "Secours, Ordinaire" shall be a final discharge of all responsibility of the C.R.B. and the C.N. any unexpended balance of the profits from exchange to be refunded to the Belgian Government in cash.
.
Extract of Memorandum(358)
of August (1916) conferences in Paris between Hoover and the representatives of the French and Belgian Governments regarding the financial responsibility of the C.R.B. for French relief
PARIS, 28 August 1916
. . . . . . . . . . . . . . . . . . . .
G. The Commission proposes to introduce certain laws in regard to accounts in the North of France, and to impose certain obligations as regards payments to be made by the communes or the municipalities; these rules and obligations shall have received the approval of the French Government.
.
Memorandum,
HOOVER TO BELGIAN AND FRENCH TREASURIES, describing the methods by which the Commission was financed and requesting official approval of the form of the final financial accounts which he proposed to submit
PARIS, 10 May 1919
I
This Commission was founded in October 1914 as a voluntary agency for the relief of the civil populations of Belgium and Northern France. Its accounts have been kept from the beginning by Messrs. Deloitte, Plender, Griffiths and Company, of London, this firm furnishing the accounting or auditing personnel in London, New York, and Rotterdam.
It has been impossible to make complete accounting during the war, owing to the obvious difficulties of communication over belligerent lines, and it has been considered wise since the Armistice not to attempt to draw up a completed statement until the activities of the Commission have been brought to an end. All buying of foodstuffs ceased on May first and deliveries will be complete by June first, and within two or three months thereafter absolutely completed accounts can be presented. The benevolent activities of the Commission will continue.
The Commission was founded initially on the basis of public benevolence, but, with the accruing task, it has built up its resources from many different directions. That is:
a) Public Charity; free, or partially free, service of individuals, railways, shipping companies, etc.; profits realized on the sale of goods to others than Belgians and French---"external profits"; profits earned on goods sold to the populations of Belgium and Northern France---"internal profits."
b) Commercial exchange.
c) Advances made to the Belgian Government from the British, French, and American Treasuries for transmission to the Commission; advances made by the French Treasury to the Belgian Government for transmission to the Commission to be used in the support of the occupied French population; advances from the French Treasury to the Commission; advances from the United States Treasury to the French Treasury for the purpose of the Commission; advances from the Belgian Treasury to the Commission; advances from the British Treasury to the Commission.
II
The theory of our operations was set out in writing to the French and British Governments some three years ago and approved by them. It is as follows:
1. While most goods have been bought in common, they are capable of separation upon the books as between Belgium and France, as are also the special expenditures internally in Belgium for account of French refugees and local Belgian produce shipped to Northern France, etc.
2. The accounts have been in Sterling and all moneys remitted to England were taken into the books at the actually realized exchange. All inter-office accounting of non-remitted moneys was carried in the books at a fixed exchange, values were established of 25.40 francs and $4.85 and guilders 12.03 equal to £1 Sterling, and any gains---or losses---in exchange were debited to "exchange account."
3. Benevolent contributions other than cash were taken into the books at valuation by the directors.
4. The cost of supplies was carried in the books as "purchase," "transport," and "administration," each cargo being accounted for separately and vouchers can be produced for each different shipment quantitatively and in expenditure.
5. On shipment of supplies from the ports of entry, they were debited to the interior committees at flat round prices, and their accepted quantitive bills of lading secured, thus enabling proof that supplies reached the interior committees.
Imports of supplies were during the occupation all virtually debited against the Comité National Belge for both Belgium and France, this committee in turn debiting the French portion against the Comité du Nord de la France and furnishing the C.R.B. acknowledgments thereof together with supplies and payments to French refugees in Belgium which the Comité National Belge was authorized by the C.R.B. to expend for the Comité Français. After the Armistice the Comité Français was reorganized into the Comité du Ravitaillement and debited direct by the C.R.B. The accounts of these interior committees were audited by the C.R.B. accountants.
6. The prices debited against the interior committees for food were calculated to show a small margin of "profit," and were carried at the same prices for long periods, adjustments being made occasionally to meet general trends of rising or falling costs. This "profit" margin was installed for several purposes:
a) To enable immediate accounting with interior committees without waiting months for full cost determinations of cargoes due to lag in accounts from North and South America, India, disputes on values, out-turns, etc.
b) To maintain steady food prices in the interior over long periods.
c) To interpret the free services received, the prices charged against interior committees being on average less than could have been secured by commercial means, by virtue of total elimination of middlemen and free service secured.
d) To create a fund to be used toward liquidation of exchange losses.
7. The benevolent receipts from the exterior world, together with "profits" were allotted by the directors to various interior committees from time to time for charitable purposes.
8. The Commission invited remittances to Belgium, investing the money in food and delivering to the payee the local currencies received in resales. Allocations of benevolence and profits to local committees were carried out practically as commercial exchange to the committee concerned.
III
The public and the different governments are vitally interested in the final accounting of the Commission, because:
a) The public must have evidence of faithful trusteeship.
b) The Belgian and French Governments have a right to know that the sums of money entrusted by them to the Commission have been duly expended in the purchase and delivery of foodstuffs and for the care of their nationals.
c) The American Government is interested because, as it has subsequently proved, the Commission has overdrawn from the American Treasury during the last few months, and stocks have accumulated which are now being liquidated into cash. This cash is, in accordance with the understanding of the American Government, returnable to the American Treasury. This accumulation of stocks has arisen from the necessity of the Commission to place shipping and foodstuffs in motion three months in advance, and during the last few months the infiltration of food from commercial and other sources into the liberated areas has reduced the call upon the Commission for supplies, thus building up balances.
The American Treasury has every right to a refund by the Commission of such balances, the amounts refunded to be applied, respectively, to the cancellation of Belgian and French obligations.
IV
In order to accomplish these various objectives, the Commission proposes (a) that the Treasuries should approve the basis set out below for the formulation of the accounts of the Commission, and (b) that the Belgian, French, and American Treasuries should each agree to appoint a delegate to receive and approve the statement when presented. Mr. Keynes has stated that the British Treasury is not interested.
V
The principle of accepting the auditor's statements as final discharge of the Commission has already been accepted by the French and Belgian Governments. The following is the form in which it is proposed to present the final statement and liquidation.
The Commission should provide a statement of accounts from the auditors showing:
a) The sums expended for the purchase, transportation and administration of the relief.
b) The debits acknowledged by the different interior committees for the supplies and reserves delivered to those bodies and sums expended in Belgium for French refugees.
c) Amount of advances received either directly or indirectly from the various governments.
d) A statement showing the cash balances from government advances in the hands of the Commission and to whose credit (Belgian or French) such balances shall be refunded at the American Treasury.
e) The amounts contributed for charity in cash or in kind; the profits from the sales of foodstuffs to other than the populations of Belgium and Northern France; the profits earned on the sale of foodstuffs to the interior committees; the whole of these being the charitable aspects of the Commission; to be accompanied by acknowledged statements as to the purposes to which these sums have been applied in charity. Further, the balance of such charitable sums which may be decided by the Commission as unappropriated and applicable to the subsequent charitable operations now being continued by the Commission.
It is, of course, proposed that such balances should be appropriated for the benefit of the populations in Belgium and Northern France as shall be determined by the Commission and the internal committees.
f) Although overseas supplies were brought in as undivided cargoes for Belgium and Northern France, the costs and deliveries can be accurately separated except for administration, exchange, and a few items that must be pro-rated. The accounts will show that proportion of supplies provided by the particular government advances was delivered, respectively, to the Belgian and the Northern France committees; this includes supplies to France from Belgium and the expenditures on refugees. It has not been possible under the conditions of non-communication to more than attune these streams of supplies and support of two different nationals to the two different sources of government finance. It is proposed to show in the statement how much money may be owed by Belgium to France or vice versa on balance, and that such statement will be binding upon the two Treasuries as a basis of settlement of accounts between them.
g) As the great volume of operations carried on government account entail a larger number of disputed accounts it may require six months for final liquidation. In order to get a major settlement at an early date it is proposed to set aside a sum estimated to cover the minor items that may be outstanding. The disposal of any final residuum of such a reserve can be determined by the representative of the three Treasuries.
(Signed) HERBERT HOOVER,
Chairman
.
Letter,
DELACROIX TO COMITÉ NATIONAL, agreeing on the part of the Belgian Government to Hoover's proposals relative to the form of final accounts and to the method of closing them
BRUSSELS, 16 July 1919
To the Comité National de Secours et d'Alimentation, Brussels
Replying to yours of June 26 last, I have the honor to inform you that I agree to the proposals of Mr. Hoover, President of the C.R.B., relative to the form of the final accounts of this organization and the method of closing them.
According to your suggestion I appoint to verify these accounts in agreement with certified accountants chosen by the United States Government, Mr. Fortin, Councillor at the Court of Accounts.
Receive, I beg you, etc.
The Prime Minister
(Signed) LEON DELACROIX
[Translation]
.
Letter,
L. L. KLOTZ, FRENCH MINISTER OF FINANCE, TO POLAND, agreeing on the part of the French Treasury to Hoover's method of presenting the accounts of the Commission with comments on the balance of French advances and on allocation of profits
PARIS, 17 July 1919
W. B. Poland Director of the Commission for Relief in Belgium, Paris
DEAR SIR:
You were good enough to address to me a note by the President of the Commission for Relief in Belgium on the operations of the Commission as well as on the necessity of proceeding to the liquidation of accounts and their examination for approval by the interested governments. He asked me to inform you if the method of presentation of these accounts which was set out in this note had the approval of the French Government.
The operations of the Commission are coming to a close since all the purchases of foodstuffs stopped on the 1st of May, and all deliveries should have terminated by the 1st of June. Mr. Hoover therefore proposes to close the accounts and to designate delegates of the Belgian, French, and American Treasuries (the British Treasury having declared that they did not think it necessary to intervene) to receive and approve the accounts of the Commission.
The accounts will be presented in such a way as to show (1) the advances received by the Commission directly or indirectly by the various governments; (2) the expenses of purchase, transport, and administration; (3) the sums which the interior committees of Belgium and North of France recognize as owing for the delivery of merchandise; (4) the balance in cash remaining from these advances; (5) the operations in regard to the charitable side of this work, that is to say, (a) gifts in cash or in kind made to the Commission (b) the profits realized by the Commission on the sales either to the interior committees or to persons other than the populations of Belgium and the North of France (both these items constitute the resources on the charitable side of this work), (c) the use which has been made of these resources under the title of benevolence, (d) the balance not yet distributed of the sums received intended for this use; (6) the amounts which are owing one to the other at the close of operations by the C.R.B., the French Government and the Belgian Government.
A sum will be set aside from the balance on hand for the liquidation of outstanding items. It may require six months for final liquidation.
Mr. Hoover proposes to determine immediately the allocation of the available balances remaining on the different accounts.
A distinction will be made in accordance with the origin of the available funds and according as these funds arise from advances by the governments or resources realized from charitable donations or profits.
1. The credit balances of the account on advances will be turned over to the American Treasury for the reduction of the debts of Belgium and France.
2. The unallocated funds arising also from the profits realized from gifts received by the Commission will remain at the disposal of the Commission to be distributed by them in the form of benevolence to the populations of Belgium and the North of France after agreement between the Commission and the internal committees of France and Belgium.
Before replying to the proposals contained in the note of the C.R.B., I make it my duty, and it is a particularly agreeable one, to express my gratitude to the Commission for its generous initiative, its inexhaustible labor, the inexpressible services rendered to the populations of the invaded territories and to France.
The settlement suggested by Mr. Hoover has been the subject of my most attentive examination, and I can only agree to the proposals of the Commission concerning the method of presenting the accounts and the constitution of the Commission composed of delegates from the various interested treasuries.
As regards the method of employment of the remaining balances available, I believe I should submit to you the following observations:
1. Allocation to the American Treasury of the balances on account of advances.
I agree that the unused balance of the sums placed at the disposal of the C.R.B. by the French Treasury should not be returned, but should on the contrary be paid to the French Treasury. However, I do not think it possible to decide at this time that only the advances granted by the American Government to the French Government should be reduced by the total value of this balance; in consequence of the participation of the British Government in the operations of the C.R.B., it may arise that the British Treasury may have the right to demand that a portion of this balance should be employed to reduce their own debt vis-à-vis the American Treasury, unless, of course, the British Treasury wishes to reduce by that same amount, its credits to the French Government.
I can therefore only agree, for the moment, to the principle of turning in the balance to the American Treasury in reduction of its loans.
2. In regard to the free funds arising from gifts and profits realized both on the sales and on operations in exchange, I consider that a distinction should be made between gifts and profits.
I am entirely in agreement with the C.R.B. that the gifts should remain at the disposition of the C.R.B., which will employ them as far as the French share is concerned, in charitable works in the former occupied regions, after agreement between the Commission and the Comité du Nord de la France, under this reserve, however,: that for the Comité du Nord de la France might be substituted the organizations which have replaced it; on this point the Ministry of Liberated Regions can be usefully consulted.
On the other hand, it does not appear to me possible to make a similar decision as regards the profits realized by the C.R.B., as long as I do not know the exact amount of these profits. They should really normally be employed for the reduction of the budgetary charges which the French state will have to support, because of the insufficiency of the resources of the Comité du Nord de la France to cover the expenses of the ravitaillement. The French Treasury, before renouncing these profits to the benefit of the liberated regions, which would benefit from them in the form of charitable organizations, should obviously know beforehand the exact amount.
I should be obliged if you would submit these few remarks to Mr. Hoover and to inform me of the objections and difficulties which my proposals on these points may bring up, where they differ from those of the C.R.B.
I attach a particular value, in this precious work of collaboration with the C.R.B., that there should be a complete agreement between us.
Believe me, dear Sir,
(Signed) KLOTZ
[Translation]
.
Letter,
HOOVER TO KLOTZ, in answer to the preceding
PARIS, 19 July 1919
M. Klotz
Ministre de Finance, Paris
DEAR M. KLOTZ:
ACCOUNTING OF COMMISSION FOR RELIEF IN BELGIUM
In Mr. Poland's absence, I beg to reply to the observations in your letter of the 17th instant.
As to the first point, Mr. Keynes informed Mr. Norman Davis and myself that the British Government has no interest whatever in the settlement of C.R.B. accounts beyond payment for certain purchases in England which are in course of liquidation.
As to the second point, regarding any remaining "profits" on charges against North of France committees, you will, of course, realize that the great bulk of this item has already been allocated to the committees in the north for purposes approved by the various French authorities, and expended by them. The amounts remaining, which may develop in final accounts, will be comparatively a minor portion in the whole. The amount will be, of course, set out in the final accounts.
The other minor item of "profits" earned upon operations outside those to North of France Belgian committees, we propose to treat as gifts.
I wish to thank you for your kind expressions. The four years of so intimate association and co-operation with Frenchmen, under circumstances of unparalleled trial, have given us a high sense of appreciation of those great qualities of mind and character which so distinguish your countrymen. In retiring from this unique relationship, I wish to express again our feeling of unlimited admiration and the obligation that we feel for the privilege of its association.
Faithfully yours
(Signed) HERBERT HOOVER
.
No successful enterprise of huge dimensions can terminate its operations abruptly without leaving in the hands of its liquidators considerable assets. In the case of the C.R.B. these were mainly attributed to the necessarily large working capital. That this condition would exist at the cessation of shipments had been realized by those concerned in the Commission's work, and the two Governments in approving Hoover's proposals of May 1919(359) were well aware of the nature of the sums involved. As far as the Governments were concerned, there would undoubtedly be a considerable balance of unused working capital to be returned to them in reduction of their subsidies to the Commission. The public at large was interested in the "benevolent" funds and the unexpended balance of these funds. This balance (to be determined by complete analysis of the accounts) belonged to the people of the invaded territories, and the method of returning it to them alone remained to be determined. The origin of these benevolent funds has been discussed in various documents,(360) but a summary here will perhaps clarify the settlement.
From its early days the Commission's administration of relief was divided into two departments, the Provisioning and the Benevolent. The Provisioning Department was in the nature of a business enterprise, which provided foodstuffs for that portion of the population which was able to pay for them. The Benevolent Department,(361) charged with the care of the destitute, saw to it that every individual was either furnished with the means to purchase food or received it through free canteens established for the purpose. The Benevolent Department was supported by public donations and by a fund which accrued to the Provisioning Department through a small marginal charge on all sales. Out of this fund the Provisioning Department made advances to the Benevolent Department from time to time. The balance of these profits still available for benevolence could not be determined until the complete closure of the business of the Provisioning Department.
By June 1920 the inevitably slow process of liquidation had reached the stage where the Commission was able to make a major settlement with both the French and the Belgian Governments. This settlement included in the first place the return of considerable sums of working capital not used by the Commission. As this money originated in United States Treasury loans to France and Belgium, it was returned to the Treasury and applied in reduction of these loans. The second part of the settlement related to the balance of benevolent funds, the so-called "profits" of the Provisioning Department. In the case of France there were comparatively small amounts available represented by the slight variation between the approximate cost prices of provisions set at the time of delivery and the precise cost to the Commission which final accounting brought out. This benevolent balance for France was sufficient, however, to make possible a substantial allocation to the French districts and to constitute an important contribution to the work of the Comité de Ravitaillement and the Comité d'Assistance des Régions Libérées.(362) This allocation of benevolent funds was the final settlement of the Commission with the people of Northern France and the French Government. The documents which immediately follow cover the return of working capital to the United States Treasury for the account of the French and Belgian Governments as reduction of loans to these countries.
.
Letter,
C.R.B. TO FRENCH MINISTER OF FINANCE, presenting the Commission's complete account to the French Government
NEW YORK, 25 June 1920
To the Honorable The French Minister of Finance Paris, France
YOUR EXCELLENCY:
We have the honor to hand you herewith a statement of accounts between the French Government and the Commission for Relief in Belgium, showing the funds received and the disbursements which have been made by the Commission.
The balance of funds received by the Commission in excess of expenditures has been returned to the American Treasury to be credited to French Government account and your Embassy in Washington has been officially advised by the Treasury of this credit. This completes our accountability to the French Government.
The surcharges over the actual cost of supplies delivered, made by the Commission to provide against losses, equalization of prices, war destruction, and so forth, have amounted to £3,289,475. This sum has been returned to the French districts through allocations to the Comité d'Alimentation du Nord de la France, and to the Comité de Ravitaillements des Régions Libérées and by direct benevolent expenditures, thus closing our accountability to the people of the occupied regions.
With assurances of the highest consideration we beg to remain, dear Mr. Minister,
Faithfully yours
(Signed) EDGAR RICKARD, W.B. POLAND
Liquidators, Commission for Relief in Belgium
.
Letter,
HOOVER TO UNITED STATES TREASURY, enclosing checks for $17,246,490 and $1,512,901.66, to be credited, respectively, to French and Belgian Government accounts, and advising that $1,000,000 has been reserved for liquidation, the residue of this to be paid eventually to the Treasury for Belgian account
NEW YORK, 19 June 1920
Hon. Nicholas Kelley
Assistant Secretary of the Treasury Washington, D.C.
MY DEAR MR. KELLEY:
I confirm our agreement of yesterday that C.R.B. accounts with the Treasury are finally settled in accordance with the three statements of C.R.B. accounts which accompanied my letter to you of June 17, 1920. In accordance therewith I enclose check for $17,246,490 return of excess monies paid to us for French relief, and a check for $1,512,901.66 similar item for Belgian relief, it being the understanding that you will settle any technical questions arising with the French or Belgian Government respectively as to this direct payment to you from us.
I also confirm that the item of $2,467,626.82 dollar reimbursement is to be paid from the funds amounting to $37,431,270.30, recoveries from the resale of food as set out in the accounts furnished you, and that we hold this sum awaiting the direction of the Treasury as to the date when it shall be paid to the British Treasury, it being a part of the dollar reimbursements from C.R.B. accounts amounting to $9,199,887.26 of which the Treasury has already undertaken to pay $6,732,260.44 directly to the British Treasury for account of the Belgian Government.
I confirm our understanding that this completes all relations with the Treasury except that any residue we may have in hand after settlement of liabilities in the United States, out of the item of $1,000,000 reserved for this purpose in the accounts above mentioned, will be paid to the United States Treasury further for account of the Belgian Government.
Yours faithfully
(Signed) HERBERT HOOVER
.
Letter,
UNITED STATES TREASURY TO HOOVER, acknowledging the preceding
WASHINGTON, 21 June 1920
DEAR MR. HOOVER:
Your letter of the 19th instant has been received enclosing a check of the Commission for Relief in Belgium, in the amount of $17,246,490, which the Treasury understands to represent the balance of Treasury advances made to the French Government for relief expenditures through the Commission for Relief in Belgium and not required for that purpose, and also the check of the Commission for Relief in Belgium for $1,512,901.66, which the Treasury understands to represent the balance of Treasury advances made to the Belgian Government for relief expenditures through the Commission for Relief in Belgium and not required for the purpose of the program. The Treasury will take up with the representatives of the French and Belgian Government, respectively, the disposition of these funds. I understand from our conversation of Friday that the three statements which accompanied your letter of the 17th instant set forth the final state of the account of the French Government with the Commission for Relief in Belgium and also the final state of the accounts of the C.R.B. On the basis of these statements, the Treasury understands from you that no further sums are due from the C.R.B. to either the French Government or the Belgian Government except that any residue remaining in the hands of the C.R.B. after the settlement of liabilities in the United States out of the item of $1,000,000 reserved for this purpose in the above-mentioned accounts will be paid for account of the Belgian Government. Should it later be disclosed that any further funds are available on either French or Belgian account, the Treasury assumes that they will be dealt with in the same manner as the sums represented by the checks above referred to. It is also understood that the sum of $2,467,626.82 is to be paid to the British Government out of funds to that amount held by the C.R.B. for the purpose of reimbursing the British Government for certain items mentioned in Mr. Rathbone's letter of September 4, 1919, to Mr. Rickard, and that this sum will be held by the C.R.B. awaiting the direction of the Treasury as to the date when it shall be paid to the British Treasury.
Yours very truly
(Signed) N. KELLEY
.
Letter,
BELGIAN EMBASSY TO UNITED STATES TREASURY, approving on behalf of the Belgian Government that the sum of $1,512,901.66 returned by the Commission be applied in reduction of United States Treasury loans to Belgium
WASHINGTON, 27 December 1920
Mr. N. Kelley
Assistant Secretary of the Treasury Washington, D.C.
MY DEAR MR. KELLEY:
By your letter of June 21, 1920, you informed me that the Treasury had received from the Commission for Relief in Belgium, one million, five hundred twelve thousand, nine hundred one dollars and sixty-six cents ($1,512,901.66), constituting the balance of the funds advanced by the Treasury to the Belgian Government for relief expenditure to be made through the Commission for Relief in Belgium, and which was not used or necessary for the purposes of the program. You added that the Treasury proposes to apply this sum in payment of a corresponding amount of the principal of obligations given by the Belgian Government for advances by the United States Treasury, for the purposes of relief.
After the recent interview I had with you, I have not failed to bring again your communication to the attention of my government.
I beg to inform you that I have now been advised by the Belgian Government that it agrees with the Treasury on the proposal as stated above.
I am, my dear Mr. Kelley,
Very sincerely yours
(Signed) C. SYMON
The Counselor of the Embassy
.
Fig. 17. LETTER, 20 SEPTEMBER 1915, PRESIDENT WILSON TO HOOVER
.
Letter,
UNITED STATES TREASURY TO CASENAVE, DIRECTOR GENERAL OF FRENCH SERVICES IN THE UNITED STATES, replying to objections on the part of the French Government that the $17,246,490 representing unused balance of Commission's funds (French account) should be returned to the United States Treasury
WASHINGTON, 9 August 1920
MY DEAR MR. CASENAVE:
Your letter of the 2nd instant (No. 2555) has been received transmitting observations of your Government regarding the sum of $17,246,490 received by the Treasury from the Commission for Relief in Belgium as being the balance of funds advanced by the United States Treasury to your Government for expenditures through the Commission for Relief in Northern France, but which was not used or necessary for that purpose.
Please convey to your Government assurances that it is my desire, to the full extent of the powers conferred upon me and within the principles heretofore established and followed by the Treasury, to co-operate with your Government and its Treasury no less sympathetically than my predecessors, the measure of whose friendly desire to exercise the powers of the American Treasury toward the assistance of your Government in accordance always, however, with sound principle and correct policy, is the course pursued by the United States Treasury, and the close and friendly co-operation between the Treasuries from the entry of the United States into the war to the present moment.
I do not altogether understand the force of the suggestion of your Government that if there were applied to the full extent the principle involved in the return of the sum of $17,246,490 to the Treasury to be applied upon obligations of your Government held by the United States, it would mean substantially that your Government should be obliged to return to the Treasury the unused balance of all amounts advanced by the Treasury to your Government. It has been the policy of the Treasury since the beginning of its loans to foreign governments that funds advanced for a specific purpose might not be applied to a different purpose without the assent of the Treasury and might never be applied to a purpose for which the Treasury is not authorized to make a loan. In accordance with this policy, the unused balances of advances made for specific purposes have been repaid to the Treasury not only by other governments, but by the French Government. Your Government in January, March, and August, 1919, repaid an aggregate amount of $12,147,000 in reduction of the advances of $71,427,000 and $81,050,800, respectively, made your Government by the Treasury to enable your Government to meet the maturity of the Two-year 5 1/2% Secured Loan Convertible Gold Notes of your Government on April 1, 1919, and the maturity of the Three-year 5% Collateral Gold Notes of the American Foreign Securities Company on August 1, 1919. It was never suggested that the unused balances in those cases should not be repaid to the United States. In the present instance the advances made by the United States Treasury to your Government for expenditures through the Commission for Relief in Northern France were made for the purpose of completing a specific program. Upon receiving from the Commission for Relief the sum of $17,246,490, together with information that it was the unused balance of funds advanced by the United States Treasury, the Treasury has no reason to question the statement of the Commission for Relief in whose hands the expenditures of funds for relief purposes had been. The Treasury assumes that questions concerning the expenditures by the Commission for Relief of funds received from the French Government and arising either out of United States loans or otherwise, will be disposed of between your Government and the Commission for Relief.
Under the power conferred by the Liberty Bond Acts to establish, for the more effectual prosecution of the war, credits in favor of governments at war with enemies of the United States, I am without authority now to establish in favor of your Government a credit for the purpose of enabling your Government to meet its share of the Anglo-French loan. In these circumstances I cannot now make the above-mentioned sum available for that purpose for which the Treasury has not previously assured a credit to your Government.
I think I need scarcely add that nothing is more remote from the intention of the Treasury than to impose any hardship upon your Government in connection with its arrangements for dealing with the approaching maturity of the Anglo-French loan, and that on the contrary it is the earnest desire of the Treasury to co-operate to the full extent of its power and authority in all sound measures undertaken by your Government for dealing with the matter.
I am, my dear Mr. Casenave,
Sincerely yours
(Signed) D. F. HOUSTON
.
Letter,
UNITED STATES TREASURY TO C.R.B. (IN LIQUIDATION), acknowledging receipt of statement showing status of $1,000,000 liquidation reserve and accepting check for $440,552.83 for Belgian Government account as part settlement(363)
WASHINGTON, 26 April 1922
DEAR SIRS:
On behalf of the Secretary, I beg to acknowledge receipt of your letter of April 14, 1922, transmitting a statement showing the status of the $1,000,000 reserved by the Commission out of Belgian funds to meet further liabilities on behalf of Belgium Relief in the United States, together with a certified check drawn on the Chase National Bank of New York for $440,552.83. The Treasury understands that the sum of. this check represents the balance due the Belgian Government after reserving a sum estimated as necessary to meet the dollar indebtedness still outstanding and which is not required or necessary for the purpose of the relief program.
Should it later be disclosed that any further funds are available on Belgian account out of the estimated sum reserved as being necessary to meet the dollar indebtedness still outstanding, the Treasury assumes that they will be dealt with in the same manner as the sum represented by the check above referred to.
Yours very truly,
(Signed) ELIOT WADSWORTH,
Assistant Secretary
.
In July 1920 the Commission turned back to the districts of Northern France for charitable distribution the balance of "profits returnable" which a complete accounting of the Commission's operations revealed. In 1921 and 1922 additional gifts were made to the people of Northern France through the Comité d'Assistance des Régions Libérées. These latter sums appeared in the settlement of the Commission's liquidation reserve and at its request were applied to the continuation of the welfare work among the children inaugurated by the Commission after the Armistice.(364) The following documents record these final gifts which closed the benevolent aspects of the Commission's work in Northern France.
.
Letter,
C.R.B. TO LABBÉ, enclosing statement of Commission's French account already submitted to French Government and allocating the balance of benevolent funds, i.e., £538,368, to the French districts through the Comité d'Assistance des Régions Libérées
NEW YORK, 2 July 1920
Monsieur E. Labbé,
Comité de Ravitaillement des Régions Libérées,
Paris
DEAR MONSIEUR LABBÉ:
I take pleasure in sending you through the kindness of Monsieur Chevrillon copies of our statement of accounts which we have asked Monsieur Chevrillon to transmit to the French Minister of Finance.
Under date of 2nd of July we cabled you in regard to the balance due the French districts on profits returnable, which amount is £3,289,475 of which there has been already allotted to the districts, or expended on their behalf £2,751,107, leaving final balance due £538,368.
We hereby allocate this sum to you for the districts in final settlement of this account.
It is the desire of Mr. Hoover and his colleagues that you pay over this sum to the Comité d'Assistance, as we are all greatly interested in the work being accomplished by this Comité and hope to assist it further later on. We feel, however, that you will wish that any action of this kind on your part first have the approval of the French Minister of Finance. This approval we have no doubt you will obtain without difficulty.
Faithfully yours
(Signed) EDGAR RICKARD, W. B. POLAND
Joint Liquidators
.
Letter,
C.R.B. TO CHEVRILLON, enclosing the sum of $25,000 as a gift from the C.R.B. to the Comité d'Assistance des Régions Libérées to be used on behalf of the children of Northern France
NEW YORK, 3 February 1921
M. Louis Chevrillon,
Treasurer of Executive Committee,
Comité d'Assistance des Régions Libérées
d'Accord de la C.R.B.
Paris
MY DEAR M. CHEVRILLON:
Attached is check for Frs. 352,112.70, the proceeds at rate of the day ($.0710) of a donation of $25,000 made by the C.R.B. at the suggestion of our Chairman, Mr. Hoover, for the Comité d'Assistance through the A.R.A. European Children's Fund to be used on behalf of the children of the liberated regions of France.
Mr. Hoover is much in hopes that the European Relief Council may be able to contribute a further sum to the Comité d'Assistance. If so, we will cable you.
Faithfully yours
(Signed) W. B. POLAND,
Joint Liquidator
.
Letter,
C.R.B. TO CHEVRILLON, advising him of a further and final sum of $78,959.80 for child welfare work being carried on by the Comité d'Assistance des Régions Libérées
NEW YORK, 1 August 1922
Monsieur Louis Chevrillon, Treasurer
Comité d'Assistance des Régions Libérées,
Paris
MY DEAR M. CHEVRILLON:
In making the final distribution of funds which have been held in the "Benevolent Account" of the Commission for Relief in Belgium pending its final liquidation, the Chairman, Mr. Hoover, and the Directors of the C.R.B. have decided that a further sum of $78,959.80, which at $.0813 represents the equivalent of approximately Frs. 971,000±, may in justice be allocated to the liberated regions of Northern France.
We have, therefore, cabled our London office to deposit with the Bank Union Parisienne, Paris, subject to your draft as Treasurer of the "Comité d'Assistance des Régions Libérées d'Accord de la C.R.B.," the franc equivalent of this amount. Will you notify the Executive Committee of the Comité d'Assistance that this sum is to be distributed proportionally to all the districts of the liberated regions in which the C.R.B. and C.F. operated, and is given in trust for this purpose in further recognition of the admirable work of child welfare being carried on by the Comité and the satisfactory manner in which similar sums have been distributed for the benefit of the whole population of the liberated regions formerly supplied by the C.R.B.
Faithfully yours
(Signed) EDGAR RICKARD, W. B. POLAND
Joint Liquidators
.
3. The Belgian Educational Foundations
The larger benevolent balance due to the people of Belgium was destined for a more interesting application. As far back in the life of the Commission as 1916 Hoover had discussed with the Belgian authorities the question of the disposal of this anticipated balance, and had suggested that after the demands of the destitute had been met, the residue be devoted to the advancement of education.(365) He recommended that a foundation be established, the income from which should be applied to the educational system of Belgium for the promotion of scientific study and industrial research. When in 1919 and 1920 the time for the final liquidation came, these tentative plans were elaborated and carried out. First, the Commission made cash advances of over $18,000,000 to aid directly the universities and technical schools of Belgium. The funds which still remained were apportioned between two permanent foundations organized for the purpose: the C.R.B. Educational Foundation, with a total capital of close to $8,000,000, and the Fondation Universitaire, with nearly $7,000,000. The incomes from these two co-operating foundations---one in America and the other in Belgium---were to be expended to assist young Belgians to obtain university training, to aid by appropriate means the progress of science in Belgium, and to promote the exchange of ideas between Belgium and America.
.
Letter,
HOOVER TO VAN DE VYVERE, regarding probable unexpended balances in the hands of the C.R.B. at the end of the relief work, and proposing to turn these back to the Belgian people through the establishment of an educational foundation
LONDON, 18 July 1916
His Excellency, Monsieur A. Van de Vyvere
Ministre de Finance, Havre
DEAR MR. VAN DE VYVERE:
In respect to our conversation on Saturday last on the subject of my letter of May 9, I assume the following in the present position:
I understand from you that the Belgian Government does not wish to take any responsibility in the collection or administration of public subscriptions either by the C.R.B. or C.N. Furthermore, I understand that the Belgian Government does not insist on any financial liability of any kind against the members of the C.R.B. or C.N., but of course wishes to be satisfied that the accounting and commercial methods are carried out as efficiently as circumstances will permit.
As to the control which the Belgian Government at Havre maintains in the expenditure of the Belgian Government subsidies in Belgium and in the question as to whether any profits remaining at the end of the war are in the category of public subscriptions or in that of Belgian government subsidies, all this seems to me to be more or less a domestic question and one in which the C.R.B. will be only remotely interested at the end of the work. The public subscriptions will have been exhausted and therefore any balance on hand will be either in the nature of Government balances or of profits, either one of which is absolutely the property of the Belgian people and, obviously, for their sole determination as to application after the work is finished.
In this matter of profits there is an apparent divergence of views between the relief organization and Your Excellency. These profits, according to Your Excellency's view, are earned by the use of Government capital, and, therefore, belong to the Government, or (alternatively) they are the profits by manipulation of exchange and in either case are accountable to the Government.
The contention of the relief organization is that these profits are the result of voluntary services, not only of the many volunteers, firms, and individuals whom the Commission uses abroad, but also of the 35,000 or 40,000 Belgians concerned in distribution in Belgium, whose combined efforts amount to a total elimination of wholesale and retail expense. Alternatively, the relief organization can contend that the profits were a tax imposed on the well-to-do in Belgium for the benefit of the destitute. Further, it can well be contended that the difference on exchange has already been largely given to the Belgian people, in that the price of food in Belgium, even after the profit is taken, is less than in other belligerent countries and has already been dissipated to the population, also that the capital employed is at least 25 per cent from other sources. As I said before, it appears to me that these contentions lie entirely with the Belgian people themselves and that there ought to be no difficulty in coming to an arrangement with regard to this matter satisfactory to all sides. As a matter of administration it is absolutely necessary, for many reasons, to maintain the present system of accounts and the earning of profits, and it is in the interests of the Belgian people that the relief organization should continue a free hand in their expenditure of these profits. This arrangement is a direct stimulation to the most minute economy and the maximum volunteer service and gives the organization latitude in meeting the problem of destitution not possible under the less flexible distribution of the subsidy money. Your Excellency will entirely appreciate that no government could conduct this enterprise at anything like the cost at which it is now being conducted, and I venture to say that Your Excellency would easily ascertain this by comparing the cost of goods, transport distribution, the relative realization from exchange, interest, and other items which the Belgian Government at Havre obtains with regard to its own purchases.
Entirely apart from this point, however, it must be obvious that, with the large quantity of goods which we have in transit, on the day of the evacuation of Belgium, the relief organization will be able to liquidate its position with a considerable sum of cash, consisting of unexpended balances on behalf of the Government and of profits. The accumulation of profits and gifts will be a diminishing sum from now forward, as the public subscriptions are no longer able to care for the "Secours Ordinaire," but in any event some definite sum of money is bound to remain on hand on this "profits" account.
It is the desire of your countrymen in Belgium to establish some kind of an institution to commemorate the Relief; and it would appear to me, as being more or less an outside observer, that there is not only a great beneficent opportunity for such an institution, but that, after the war, with the keenness of competition, every help must be given to the Belgian people to enable them to weather the years of stress which must ensue. The injection of a new institution for the stimulation of scientific and industrial research directly in aid to national industry, would appear to be an extremely difficult matter for the Government itself to undertake at such a juncture as this, and it would look like an unique opportunity to deliberately provide that such an institution could be established on non-sectarian and nonpolitical lines for the most beneficent objectives. It is not proposed so far as I know to establish any teaching institution in competition with those existing, but simply to establish a foundation, the income from which would be injected into the present educational system for the stimulation of scientific and industrial research and the expansion of needed departments where the necessity is greatest and where funds could not otherwise be provided. Such foundations have been the greatest factor in the remarkable advancement of American higher education and research, during the last thirty years. Aside from its enormous value, a certain sentimental value would be accomplished in so grand a tribute of this character to the 40,000 Belgians who have shown such devotion to their own countrymen during the war and the truly remarkable organization they have perfected under the most extraordinary difficulties and with the resources so largely provided by the energy and devotion of Your Excellency. I do not assume that either the character or the nature of such an institution could be determined without elaborate consideration, but it is possible now to make it assured in some degree by an agreement as to the destination of any residue of profits. A committee representative of the various universities and other organizations involved should be able to formulate the detailed plan.
If the principle above outlined could be agreed upon, it does not seem to me that it would be difficult for Your Excellency and the Relief organization to arrive at a basis upon which the accounts should be formulated to this object.
I wish to repeat my statement with regard to Your Excellency's question made on Saturday, as to whether the Americans interested were anxious or insistent that this should be done, in which I endeavored to convey to Your Excellency that the Americans are not trying to impose anything upon the Belgian people or their representatives or make the slightest suggestion as to the conduct of their own affairs. Our constant attitude has been that we have devoted such resources as we could assemble and such service as we could command, to the support of the destitute in Belgium, not as a matter of charity but as a matter of justice. This attitude gives us no consistent right or position in discussing anything of an internal Belgian character aside from the daily incidents of the present organization of relief. We can, however, consistently second any constructive program for the Belgian people and should obviously be pleased if out of our endeavors we should have contributed any small portion to that end.
Yours faithfully
(Signed) HERBERT HOOVER
.
Letter,
HOOVER TO DELACROIX, indicating the manner in which the Commission proposed to appropriate the balance of its benevolent funds for extension of higher education in Belgium
BRUSSELS, 28 August 1919
To His Excellency
M. Delacroix, Prime Minister, Brussels
YOUR EXCELLENCY:
The Belgian Government on 16th July formally approved (as also have the other governments concerned) the method that I proposed for settling the accounts of the Commission for Relief in Belgium.
Section IV (e) of that memorandum provided as follows:
"The amounts contributed for charity in cash or in kind, the profits created by voluntary service in handling foodstuffs, being the free charitable aspects of the Commission to be shown by statements of amount and the purpose to which these sums have been applied in charity. Further the basis of such charitable sums which may be decided by the Commission as unexpended and applicable to the subsequent charitable operations now being continued by the Commission will also be shown. Such balances will be appropriated or invested for the benefit of the population in Belgium and Northern France as shall be determined by the Commission."
We have now made a preliminary inspection of the accounts, but owing to the volume of transactions---exceeding four millards of francs---they will not be in final form for some months. In the mean time, it is evident that the sums that would be realized for Belgium under the above paragraph amount to a minimum of Frs. 150,000,000. This sum includes the unexpended gifts and the profits of the Commission for Relief in Belgium applicable to Belgium in all its agencies, in America, England, Holland, and in Belgium through the operations carried on by Comité National as the agents of the Commission for Relief in Belgium.
During these last four years of association with the Belgian people and from discussions with my colleagues in the Comité National, with the members of the Government and the universities, and the public, it has become evident that no more democratic service could be rendered to the Belgian people than that these funds should be applied to the extension of high education in Belgium. The war and the present economic situation have demonstrated the extreme importance of the widest distribution of high education amongst all classes, especially those of limited means. In order to compass this end, it is necessary:
1st. To undertake such measures as will open the institutions themselves so that they may not only render more efficient service to the community as a whole but also that they may undertake the additional burden of this increased attendance.
Therefore I propose that the funds mentioned above should be applied as follows:
a) As to the 37 per cent to the creation of a foundation, the income from which shall be applied in principle to enable the children of families who have not the means to otherwise secure such education, to obtain it, this may be accomplished by gifts, scholarships, or otherwise to obtain this general principle. I would propose that this foundation should be vested in a board of half each Belgian and American trustees, the American trustees to be selected by the Directors of the Commission for Relief in Belgium. Some minor proportion of this fund, as the trustees may consider advisable, could well be applied to the extension of such education as will look toward the protection of child life.
b) Direct payment of 63 per cent of the total funds available to the trustees of the following institutions, proportionally as under:
| Brussels University |
13 1/3 % |
| Louvain University |
13 1/3 % |
| Ghent University |
13 1/3 % |
| Liège University |
13 1/3 % |
| Mons Mining School |
3 % |
| The Colonial School |
6 2/3 % |
These funds to be at the free disposition of these institutions but generally for the purpose of increasing their efficiency and ability to serve the community. The total of these sums, however, not to exceed 95,000,000 francs, any excess reverting to fund a.
If the above proposals should prove acceptable, I would propose to authorize the Comité National from the funds belonging to the Commission for Relief in Belgium, to make immediate payment of 20,000,000 francs to the proportions mentioned under b, in order to enable them to overcome immediately some of the disabilities imposed by the war. The arrangements under a to be set up as quickly as the organization can be perfected.
Yours faithfully
(Signed) HERBERT HOOVER
.
Letter,
DELACROIX TO HOOVER, announcing the Belgian Government's approval of the projects outlined in the preceding letters and accepting the first payment for Belgian universities
BRUSSELS, 5 September 1919
Herbert Hoover, Esq., Paris
DEAR SIR:
The honor falls to me of addressing to you the thanks of the Belgian Government for the generous intentions expressed in your letter of the 28th August 1919.
How many times have you not justified the title of "Friend of the Belgian Nation." For five years you have consecrated your inexhaustible activity to victualling our populations in distress, and now you are about to give a new proof of the ties of profound sympathy which unite you to us, by showing your solicitude for higher education and for all the more advanced studies of our population so sorely tried, and also by assuring the future of the organizations for the protection of childhood founded during the war.
The Council of Ministers, at their sitting of the 5th September, accepted with thanks the project of which you have sketched the broad outlines. They will submit to the Legislation a project for a law granting a civil entity to the universities of Ghent and Liège, to permit these to receive the liberalities of the Commission for Relief, and they ask you---counting on your agreement in this matter---to let all the interested parties benefit by your generosity, in whatever language, French or Flemish, they wish to pursue their higher studies.
While awaiting the vote on this projected law the Government will accept willingly, for the universities of Ghent and Liège, the first sums which you place at their disposal to permit them to supply the most urgent necessities.
Yours very faithfully
(Signed) L. DELACROIX,
Prime Minister
[Translation]
.
Letter,
HOOVER TO DELACROIX, submitting the general plan for appropriating the balance of Commission's benevolent funds for educational purposes and announcing the proposed incorporation of the C.R.B. Educational Foundation for this purpose
NEW YORK, 10 December 1919
Monsieur Leon Delacroix
Prime Minister, Belgian Government, Brussels
DEAR MONSIEUR:
The Commission for Relief in Belgium is now engaged in adjusting and closing its accounts, in accordance with the memorandum which I submitted to you in June last, and it hopes to be able to close this matter in the near future, and to thus ascertain the amount of funds at the disposal of the Commission for the purpose of creating the proposed foundation, pursuant to my letter to you of August 28th, and your confirmation thereon on behalf of the Government.
It, therefore, seems desirable at this time to submit the general plan that I have settled for completing these arrangements so far as they concern the Commission for Relief in Belgium.
It is proposed that the funds now in Belgium applicable to this foundation should be transferred from the Commission for Relief in Belgium, which now holds title to them, to a corporation bearing a similar name to the Commission, which will be organized under the laws of one of the states of the United States, the state to be used for the incorporation to be the one most suitable by reason of its statutory law to accomplish the purpose desired. The charter of this corporation will set forth the purposes for which the foundation is created, and with its by-laws will provide for taking, holding, and investing the funds transferred to it by the present Commission, and will provide the necessary committees for its administration, including a committee or committees, to be composed of six members, three of whom shall be nominated by the Belgian Government, to supervise the corporation's investments in Belgium, and to carry out in Belgium the details of the educational features of the foundation.
The corporation will thus be a permanent institution with perpetual life, having the security of being founded under statutory law especially enacted for charitable institutions of this kind, and through its officers and committees, duly constituted, will be able to manage and conduct its affairs by established business methods.
At your early convenience, will you kindly propose the names of the three nominees of the Belgian Government who are to serve on the committee for supervising the Belgian investments of the corporation, and the committee which will have charge of the disbursements of the foundation in Belgium.
Very truly yours
(Signed) HERBERT HOOVER
.
Telegram,
C.R.B. NEW YORK TO BRUSSELS, summarizing Hoover's reasons for proposing to establish two educational foundations, an American and a Belgian
NEW YORK, 11 March 1920
SHALER, RELIEF COMMISSION, BRUSSELS
Following is subject matter of letter from Belgian Ambassador to Francqui:
"Hoover asks me to send you the following: He has no desire to proceed in the matter of the University Foundation otherwise than solely in Belgian interest and Belgian wishes. Suggests, however, that a return to the original idea is in the best Belgian interest, that is, to create one legal foundation in Belgium and another legal foundation in the United States. The whole of the present franc resources to be transferred to the Belgian Foundation. Its directors to comprise two representatives from American Foundation and the entire distribution of income arising from the Belgian Foundation to be carried out by Directors of Belgian Foundation. That the Directors of American Foundation shall comprise the former Directors of the C.R.B. together with two representatives of Belgian Foundation one of whom to be the Belgian Ambassador and that the invested funds of the American Foundation to consist of the dollar residues of the C.R.B. These dollars can be invested either in the United States or, if desirable, invested by American Foundation in Belgium. Income from these funds to pass through Directors of American Foundation to Directors of Belgian Foundation to be expended with approval and sanction of Directors of American Foundation. It appears to him that this arrangement would be the most consonant with a desire for complete stability free from any national or political influence, and the American Foundation would later on attract to itself further support from American public and can be used as a continuous instrument of good feeling for Belgium in the United States. If the whole of the Foundation is set up under purely Belgian auspices the project will at once have lost all American interest. Essential motive of entire proposal is to build up a permanent bridge of fine and high relationship between the two countries to become a permanent force in both communities and is not a question to his mind of pure advantageous disposal of the residue of our common funds."
RICKARD
.
Telegram,
C.R.B. BRUSSELS TO C.R.B. NEW YORK, advising of Francqui's agreement with the arrangement proposed in the preceding
BRUSSELS, 16 March 1920
RELIEF COMMISSION, NEW YORK
Francqui to whom have shown copy your cable March eleventh asked me to cable Hoover his entire agreement with arrangement proposed.
. . . . . . . . . . . . . . . . . .
SHALER,
Relief Commission
.
The following table is a recapitulation of the liquidation settlements of the Commission described in the preceding documents.
I. WORKING CAPITAL
Refunds to the United States Treasury as reductions of loans to Belgium and to France
| 1. For the account of the Belgian Government |
$ 1,512,901.66 |
| 2. For the account of the French Government |
$17,246,490.00 |
II. BENEVOLENT FUNDS IN LIQUIDATION
| 1. For Benevolence in Northern France | |
| a) Final allocation from "profits" to the Districts of Northern France |
$2,611,084.80 |
| b) Through A.R.A. to Comité d'Assistance des Régions Libérées for child feeding in Northern France |
$ 25,000.00 |
| c) Gift to the Comité d'Assistance des Régions Libérées |
$ 78,959.80 |
| 2. Gifts for Educational Purposes(366) in Belgium | |
| a) Gifts to Belgian educational institutions | |
|
To University of Brussels |
$ 3,818,897.64 |
|
To University of Ghent |
3,818,897.64 |
|
To University of Liège |
3,818,897.64 |
|
To University of Louvain |
3,818,897.64 |
|
To School of Mines, Mons |
954,724.39 |
|
To Colonial School, Antwerp |
1,909,448.84 |
|
To Ecole de Carillonneurs, Malines |
3,000.00 |
|
Total |
$18,142,763.79 |
| b) To Fondation on Universitaire |
$6,846,080.88 |
| c)To C.R.B. Educational Foundation |
$7,686,065.17 |
| 3. Balance (May 1924) reserve against claims; liquidation expenses; residue to be paid to C.R.B. Educational Foundation |
$1,091,129.78 |
The establishment of the Fondation Universitaire(367) and the C.R.B. Educational Foundation(368) was the last step in the Commission's settlement with the Belgian Government and people. Since the French settlement had already been made, this represented the final closure of the Commission's accountability for its five years of service. The magnitude of the enterprise and the character of the C.R.B.'s financial responsibilities have been indicated by the summary tables, which are based on the statements of the auditors of the Commission's accounts. The letter from the auditors which follows brings out two points which had an important bearing on both the successful conduct and the successful liquidation of this great undertaking. These points are: first, the important services given by Mr. Hoover and his principal associates, without any remuneration, direct or indirect; and second, the sound and businesslike methods employed in the management of the Commission's affairs.
.
Extract of letter,
DELOITTE, PLENDER, GRIFFITHS & CO. TO THE COMMISSION, commenting on the character of the undertaking for which they were the auditors
NEW YORK, 3 February 1927
Mr. Edgar Rickard
Commission for Relief in Belgium,
in Liquidation New York
DEAR SIR:
. . . . . . . . . . . . . . . . . ..
Our firm acted as auditors of the Commission from the inception of its active operations until the termination thereof, some five years later. In addition to our duties as auditors, at Mr. Herbert Hoover's request, we arranged a method of account-keeping and selected the accountants who supervised the handling of the funds and accounts in its principal offices. Thus the records covering expenditures by the Commission of nearly a billion dollars were under our scrutiny.
Now that those records are passing into history, we are glad to emphasize the thorough and consistent attention of the Commission's Managers to the business of the Commission, and their cooperation, which enabled the records to be so maintained that all the transactions of the Commission could be fully verified, thus preventing any charge being sustained against the integrity of the administration of the Commission's affairs.
The records are evidence of the important services rendered by the Commission's principal officials, which services were given without remuneration. In this connection, we would state that Mr. Hoover set an example by not accepting, directly or indirectly, any form of remuneration from the Commission and by refusing, throughout the period of the Commission's activities, to take from the funds of the Commission the cost of his traveling or other out-of-pocket expenses while engaged on the business of the Commission.
We consider it an honor to have been selected as auditors of the Commission and to have been able to make a contribution to so great a work. We did not charge for the time of any of our principals during the whole of the term of our service, and so far as our assistants were concerned, we added only a nominal percentage to the cost of their salaries. Therefore, no profit whatever accrued to our firm as a result of the arduous services rendered by our firm over a long term of years.
Yours very truly
(Signed) DELOITTE, PLENDER, GRIFFITHS & CO.
