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158-A TREASURY DEPARTMENT BUREAU OF NARCOTICS WASHINGTON, P.O. June 16, 1939. STRICTLY CONFIDENTIAL The Honorable The Secretary of the Treasury Washington, D. C. Sir: I have the honor to report that, in accordance with your instructions, I proceeded to Geneva, Switserland, where I attended the meetings of the League of Nations Opium Advisory Committee from May 8th to June 5th. A brief summary of the reports reviewed, the discussions held on various subjects and the action taken, is set forth under the following items: 1. General observations - Illicit Traffic 1938. 2. Measures designed to combat the Illicit Traffic. 3. Far East (a) China. (b) International Settlement of Shanghai. (c) Hong Kong. (d) Macao (o) Netherlands Indies. (f) Siam. (g) Smoking Opium Monopolies. 4. Europe and the Near East. 5. North America. 6. Secret Police meetings. 7. Cannabis. -3- 158 8. League Progress Report - 1938. (a)Secretariat's Legitimate Manufacture. 9. Addiction. 10. Preparatory Work for a Conference to Limit the Production of Opium. 1. GENERAL OBSERVATIONS ILLICIT TRAFFIC 1938 The marked improvement in international cooperation which has now for some years been a significant feature of the campaign against illicit traffic in narcotic drugs carried on under the auspices of the League of Nations is indicated by the increasing extent to which Governments are sending to the League advance reports on illicit traffic and reports on special cases. Contact between national police forces yields extremely valuable results, a point emphasized in several of the reports examined by the Committee. Collaboration by Govern- ments with the Advisory Committee in matters affecting the illicit drug traffic also continues, with very few exceptions, on a basis of complete confidence. On the basis of seisures effected during the calendar year 1938, the principal illicit markets appear to have been a) for raw opium: Burma, Indo-China, Hong Kong, the International Settlement and the French Concession at Shanghai, the Straits Settlements, Siam, the Netherlands Indies, Egypt, Palestine, Syria, France, Italy and the Netherlands; -3- 158 b) for prepared opium: Hong Kong, the International settlement and the French Concession at Shanghai, the Straits Settlements, Indo-China, the Netherlands Indies, Macao, the United States of America and Australia; c) for morphine: Siam, Turkey and the U. S. A.: d) for heroin: France, Greece, Italy, Turkey, Egypt, Palestine, Shanghai International Settlement, Canada and the U. S. A.: e) for cocaine: Hong Kong, the Straits Settlements and France; f) for Indian hemp (Cannabis): Egypt, Tunis, Basutoland, Swaziland, Turkey, Syria, Burma, Canada and the U. S. A. Narcotic drug pills. Large seisures of heroin pills were again recorded in Hong Kong, Macao and China. The traffic in these pills in the Shanghai International Settlement no longer constituted the serious problem which it previously presented, a result which is attributed to the severe penalties imposed by the Chinese Courts. These penalties included the imposition of the death sentence or life-imprisonment for manufacture. and sentences of from 12 to 15 years for trafficking. The habit of hypodermic injections of prepared opius, which for some time has been a serious problem in certain parts of Canada, particularly in the Pacific Coast area, appears to be spreading to other countries. The Netherlands reports cases encountered in Rotterdam, and the Egyptian report states that whereas up to a year or two ago opium 158 D was taken by chewing, it is now boiled in water and the liquid injected with the hypodermic syringe. In Egypt, raw opium and not prepared opium, is used in this manner. The Committee was struck by the great number of large seisures of prepared opium made in the Far East and the North American Continent. The opium was of well-known brands which have for many years been found in the illicit traffic without it being possible to ascertain definitely the places and countries from which they came. Mention may be made of the following brands: Lan Kee, Eagle Las Kee, Macao Lan Kee, Cheong Red Lion, Lion and Globe Lo Fook Kee Eagle brand Eagle Double Cash Cock and Elephant Lion, Globe and Serpent Lion and Globe Lion Yick Kee The Committee considered it vitally important that these brands of prepared opium should be traced to their origin, and hopes that the Governments concerned will do everything in their power to that end. When such origin is established there may be hopes of stamping out sources of supply for the illicit traffic in prepared opium. It is worthy of note that prepared opium coming from Kwang Chow Van (French territory) has been seized. Another feature in 1938 was the use of Australia as a point of transshipment of prepared opium intended for the North American continent, doubtless on account of the large disparity in prices. -5158-E A significant point which was brought to the Committee's attention was the fact that drug traffickers are often in possession of several Dassports, as illustrated by a case of a trafficker in the U. S. A. who had obtained four American passports and one Canadian pass- port, all under different names. The Committee discussed the existing methods of identification in connection with passports, and it was remarked that for practical reasons it would not be possible to require identification by finger prints. It is desirable, however, that steps should be taken to prevent persons from being in possession of more than one passport. The German Government transmitted a report of an important seizure of raw opium and morphine base from Yugoslavia which was concealed in consignments of camomile tea despatched by rail from Yugoslavia to the free port of Hamburg. This illicit traffic had been going on since 1935 and seizures were made in July and August 1938 of about 180 kg. of opium and 123 kg. of morphine base, part of which apparently came from a chemical laboratory at Zagreb. Information was furnished to the Committee concerning the narcotic situation in Italy, which gave evidence of the intensive activity of the Italian police authorities in collaboration with police authorities of other countries, particularly those of Yugoslavia and the U. S. A.. A number of cases of illicit traffic were discovered in 1938 and at the beginning of 1939, particularly at Milan, Genoa -6- 158F and Trieste. A licensed manufacturer at Milan was discovered to have manufactured large quantities of naroctic drugs for the illicit traffic. Important seisures were made and the investigation disclosed a connection with the clandestine installation subsequently discovered by the French authorities at Requevaire near Marseilles. The traffic discovered at Trieste appeared to have had its origin in Yugoslavia. The Committee noted in connection with seizures of morphine, heroin and cocaine that labels of Japanese drug manufacturers continued to be encountered. Measures taken in the U. S. A. and in Canada to eradicate unauthorized cultivation of cannabis were discussed. Arrangements had been made in Canada and the U. S. A. whereby cannabis was added to the schedule of noxious weeds in Provincial and in some State legislation. This provided convenient machinery for handling the destruction of cannabis growing on vacant lots. A number of Governments reported a reduction in the illicit traffic (or at any rate in the number of prosecu- tions for illicit trafficking), as, for instance, the Netherlands, Turkey and Switzerland; but the total seizures of drugs showed a considerable increase in 1938 over 1937. The increases were noted in respect of prepared opium and medicinal opium, whereas seizures of raw opium, morphine, heroin and cocaine decreased. In Canada the number of con- victions has remained stationary. Egypt reported an increase in the number of seisures, but on the other hand -7- 158-G & slight decrease in the total weight of contraband drugs seised. In France the number of arrests has been steadily increasing for several years, but, as pointed out in the French Government's report, this fact, coupled with the importance of the seisures carried out, bears witness to the energetic steps that are being taken to suppress all branches of the illicit traffic. The arrests made in France during 1938 were of great interest in that they threw light on the field open to traffickers and on the variety of fraudulent devices used to escape penalisation and prevent the origin of drugs being ascertained in the event of seisure. In the Balkans, cases of clandestine manufacture con- tinued to be reported. Palestine, one of the channels for the illicit traffic into Egypt, has also been used - in one case at any rate (the Leifer Case) - as a transit point for the United States. Precise and complete data as to the position in China is still lacking. The report from the Municipality of the Shanghai International Settlement supplies some interesting details as to the position in that city and neighborhood. Shanghai has ceased to be a manufacturing centre, and has become a distributing centre. Foreigners engaged in the international traffic in Shanghai are closely watched by the Settlement authorities. In many cases their source of supply appears to be Tientain. Though fewer seisures have been made in Hong Kong, the situation there still seems very serious. Hong Kong appears to be a point on which the 158 H lines of communication of the illicit traffic to the United States or towards Europe all converge. It is difficult to establish with certainty, from a study of the special reports communicated by Governments under Article 23 of the 1931 Convention, the origin of the raw opium seized in the illicit traffic. As was stated last year, practically no Chinese raw opium is found in the illicit traffic outside the Far East. Iranian opium found in the illicit traffic generally passes through Chinese ports. The preliminary report from the Netherlands Indies Government states that "It has been possible to ascertain the origin of nearly all the raw opium seised; 981% was Iranian, the rest of unknown origin. In nearly every case the Iranian opium seized was in packages, wrapped in red paper but unmarked." Iranian opium, in sticks, bearing the label of the Iranian Government monop- oly, has also been seized in Egypt and in India. Part of the opium which enters Egypt through Palestine and Syria is apparently of Turkish origin. The preliminary report from the United States of America, in which raw opium is linked with prepared opium, states as follows: "Although the total number of individual seizures of prepared opium fell off from the previous year, several exceptionally large seizures indicate that there is still an ample supply available in China and Hong Kong. There- fore, the American Narcotics administration continues to view the situation with concern and regrets to note the continued smuggling of Iranian opium into China north and -9- south of the Great Wall and of prepared opium out of China and Hong Kong." It is noteworthy that a number of seizures OI raw opium have been made at the Singapore naval base on British warships, the offenders being Chinese members of the crews. Australia seems to have been used as a base for contraband prepared opium for shipment to Hawaii and the North American continent. Opium seised in the New Hebrides also appears to have been obtained from ships at Sydney. The circumstances of heroin seisures in the United States, particularly in the Atlantic Coast area, show that Europe continues to be the base for the introduction of contraband heroin into the United States. Moreover, large seizures in France indicate that heroin maintains its popularity with drug addicts. Generally speaking, the figures supplied to the Committee show that there has been no reduction in the quantities of heroin seized, whereas the decline in the amount of morphine and cocaine found in the illicit traffic still continues. As was the case last year, the information available indicates that smuggling with the connivance of members of ships' crews continues to be one of the most important features of the illicit traffic. Certain new measures have been taken which will tend to counteract this form of snuggling. A close and effective cooperation between the police authorities and the owners of certain large steamship companies has been noted. This year the Committee has had in addition information pointing to 158-I -10- increased activities of ships' officers in detecting 158 sauggling on board ships. The possibility of securing the cooperation of the International Seamen's Union in combatting drug snuggling was brought to light on a report from the International Labour Office which had drawn the suggestion that publicity in journals likely to be read by members of the Union would be the best method of approach. The Committee agreed that the Opium Section and the International Labour Office should confer with the Information Section of the League in order to supply the necessary material for articles on the lines desired. 2. MEASURES DESIGNED TO COMBAT THE ILLICIT TRAFFIC. The Committee noted that the 1936 Convention for the suppression of illicit traffic in narcotic drugs had not yet come into force, but that the ratification or accession of one additional Government was sufficient for this purpose. It expressed the earnest hope that the Convention would become internationally effective with the least possible delay, and that a number of Governments in whose territories illicit traffic was a serious problem would rapidly complete the formalities necessary for ratification or accession. (The United States refused to sign this Convention for the reason that it fell short of our standard.) In general, there is evidence of an increase in penalties for illicit traffic provided by legislation in a number of countries. This is encouraging, considering -11- 158-K that sufficiently severe penalties are an efficient means in the hands of the authorities against the illicit traffic. of particular interest are the severe penalties which have recently been introduced in Yugoslavia and Siam. One valuable result of severe sentences is the with- drawal of traffickers for long periods from the scene of their snuggling activities. The Committee noted three seizures of heroin in the Shanghai International Settlement, all reported by the Municipal Council on July 26th, 1938, and each case involving 25 ounces. In all three cases labels of Japanese drug manufacturers were found. In the first case, a Japanese who was found guilty, was sentenced to a fine of 30 yen; in the second, a Chinese was sentenced to life imprisonment and in the third, both Chinese and Japanese were involved. The Chinese were sentenced to imprisonment varying from twelve to fifteen years and the Japanese to fines of 100 yen ($16.00). In this connection it is interesting to note that a trafficker in Belgium who was involved in the snuggling of heroin on board a Belgian ship into the United States of America, was sentenced at Antwerp to a short term of imprisonment and to pay a fine covering whatever penalty might be assessed against the owners of the vessel in the United States because of the seisure. With reference to a number of cases of seizures made on board ships on the high seas, the Committee suggested -12- 158 to Governments that such cases should be reported by the ship's command to the Consul of the country to which the ship belongs, at the first port of call after the drugs have been discovered. The representative of the United States informed the Committee that the French authorities who last year had said that consideration would be given to the possibility of intensifying the surveillance exercised to prevent ships' personnel from procuring drugs for snuggling purposes, particularly at Havre and other ports, had since then taken measures at Havre which already have given satisfactory results. It was noted that the smuggling of prepared opius and other narcotic drugs continued unabated into those territories where smoking opium monopolies are maintained. This was particularly true of Hong Kong, the Netherlands Indies and the Straits Settlements. Accordingly, the argument that Government-maintained smoking opium monop- olies tend to reduce and discourage snuggling of narcotic drugs is not supported. In some of these places, contraband narcotics, including prepared opium, are preferred to Government tax-paid opium. 3. FAR EAST. a) Ohina. Dr. Hoo (China) stated that: The operations in China have not prevented continuance of the Chinese Government's campaign against narcotics. -13- Indeed, exigencies of military service had made it all 158-M the more necessary for the Chinese to fight the abuse of narcotics as the worst enemy of their national resistance. Moreover, in order to endure a long war, China had to make every possible use of her economic resources. The replacement of the poppy crop by other cultivation was one of the first measures adopted. Opium could not be regarded as a vital necessity or article of export. The effectiveness of the measures taken by the Chinese Government was proved by comments from neutral official sources. They had effectively reduced the illicit traffic in opium, heroin, pills and Indian hemp. The Chinese Government was not going to rest content with hav- ing just outlined a six-year plan, but was continually giving attention to its completion. Since the last se ssion of the Committee, new measures had been adopted. For example, a new regulation determined the composition and functions of the Central Commission for the Suppression of Opium. Other measures dealt with the curing of addicts and the provision of hospitals and clinics to encourage addicts to undergo treatment. Workshops for addicts were to be established in order that poor addicts who were out of employment could undergo treatment and eventually learn a trade. Local authorities were enjoined to exercise more rigorous control in the fight against narcotics. To discourage illicit traffic the price of opium to registered smokers was not allowed to go beyond a certain figure. In order to arrive at this situation, the various local 158- N -14- 158-N authorities are ordered to report on the price of opiua in different localities. Turning to the question of the cultivation of the poppy. attention was drawn to the Chinese Government's plan for the progressive reduction. The poppy had been replaced by other crops, such as cotton, cereals, vegetables, hemp, tea, fruit trees, tobacco, sugar cane and trees from which wood oil could be obtained. Now, thanks to the satisfactory results already obtained, the Chinese Government had been able to decree that from the and of 1939 all poppy cultivation should cease. It was hoped that that date would be maintained. In all regions retaken from the enemy poppy cultivation would be immedi- ately forbidden. As in the past, inspectors would be sent to places where the poppy has been banned in order to ensure that there is no clandestine cultivation. It was unfortunate that the provinces south of the Great Wall which had hitherto been most productive in opium had not been occupied by the enemy, so the suppression plan could be applied more rapidly than had been expected. The Chinese Government has also directed its efforts towards the reduction of the number of smokers of opium, especially among persons of less than forty-five years of age, and it hopes to be able completely to forbid the smoking of opium by the beginning of 1941. Smokers coming from regions occupied by the Japanese or in territory retaken from the enemy will be registered and will be given -15- treatment with as little delay as possible. 158- The suppression of poppy cultivation and clandestine manufacture in China no longer presented problems. More difficult was the treatment of opius smokers; so the Government had taken steps to expedite as rapidly as possible the curing of addicts. In 1936, the number of registered smokers was 3,628,162; in 1937, it was 4,160,285. This did not mean that the number of smokers in territory not occupied by the Japanese had been increased, for the figures for 1936 did not include smokers in Kwantung, Iwangsi and Weiheiwei. So in 1936, the figure was greater than the report appeared to indicate and that for 1937 was actually less than was suggested. Unfortunately, this improvement does not extend to China as a whole, for one of the first consequences of the Japanese invasion has been to bring an end to measures in the invaded territory. Dr. Hoo declared that in the parts of China occupied by the Japanese troops a disgrace- ful state existed. Not only had there been no campaign against the abuse of narcotics, but that abuse was openly encouraged. His previous observations on this subject had been confirmed by neutral observers whose good faith was beyond doubt. On this point, Dr. Hoo referred to the report on the International Settlement of Shanghai for 1938, which had outlined the deterioration following on the occupation of the Shanghai area by Japanese troops. The systematic poisoning of the Chinese people by the invader had, Dr. Hoo declared, a triple object: first, to secure for certain authorities resources to cover the expense of the invasion; secondly. to provide subsistence 158 P for undesirable Japanese elements whom the Japanese wished to keep away from Japan; and, thirdly, as a means of weakening Chinese resistance and making use of traitors among the Chinese. Dr. Hec then proceeded to cite various devices which he declared the Japanese authorities had used to encour- age the abuse of narcotics in China, such as the non-enforcement of penalties for breaches of the law against the use of drugs or the infliction of trivial punishment on offenders, the encouragement of the cultivation of the poppy wherever possible, the toleration of opium dens and clandestine manufacture of drugs in return for a protection tax, and the facilitation of the distribution of drugs and the carriage of opius as war material by Japanese military and naval transport. The Press all over the world had denounced the attitude of Japan, Dr. Hoo deleared. Not content with massacring the Chinese population by aerial bombardment, the Japanese military had succeeded in obtaining the same result with profit to themselves by encouraging the abuse of drugs among the Chinese. It was difficult to estimate the number of addicts in the occupied sones, but Dr. Hoo was certain that in those regions, including Manchuria and Jehol, the situation had never at any time been so revolting and never had the percentage of opium and drug addicts been so high as under Japanese occupation. These conditions were unparallelled in any other part of the world. The Chinese people were not alone in having to suffer the disastrous consequences. Information which the Committee possessed proved that opius and drugs produced under the auspices of -17- 158 Japanese authorities in China were feeding an international traffic and beyond the seas were poisoning other countries. Such was the gravity of the situation that Dr. Eoo was certain that the Committee would discuss it, although no representative of Japan was present. Moreover, if such representative had been present, the situation would not be thereby improved, for assurances and promises already given by Japanese representatives to the Committee had not been carried out. A discussion in broad daylight was necessary to make the world know the facts of the problem and the true responsibility for it. The alignment of public opinion against a common menace was the best means of fighting it. Congratulating the Chinese Government on having compiled so complete and informative a report in the cir- custances prevailing in China, Mr. Fuller (United States) reminded the Committee of his statements last session on the situation in China, including Manchuria and Jehol. He had then stressed the deterioration in all areas under Japanese control in 1937 and 1938 and had suggested that the Japanese representative should ask his Government, in accordance with the Limitation Convention of 1931, to report on the facts brought to light in regard to specific cases of illicit traffic. Such a report had not been submitted. Since last June the American Government had con- tinued to receive alarming information from official sources on the traffic in narcotic drugs in parts of China controlled by Japan. Dealing in detail with reports on drug traffic in -18- 158Manchuria and Jehol, Tientain, Peiping, Tsinan, Manking, Hankow and Canton, Mr. Fuller declared that Japanese authorities were not taking effective measures to cooperate in the suppression of the abuse of narcotic drugs and illicit traffic in those areas under their control. He informed the Committee that the Government of the United States was of the opinion that the deplorable conditions in the narcotic situation in the Far East would be ameliorated if 1) the Japanese Government would compel its authorities in the occupied areas of China and the Japanese sponsored regimes established therein to prevent opium imports into those areas, the shipment of opium from one part to another, the manufacture of opium derivatives and the distribution of those derivatives in those areas and the shipping of opium and its derivatives to third countries. 2) If the Iranian authorities would immediately take effective steps to suppress illicit traffic in opium from Iran to the Far East which unfortunately appeared to be increasing rather than decreasing, and 3) if the Portuguese Government would take effective measures to cooperate in the international campaign against the illicit traffic in narcotic drugs and prevent the Colony of Macao from being used as base for such traffic. Dr. Hoo (China) in a subsequent session on the Far East stated that three hospitals having a capacity of 1,000 beds at Nanking were filled with Japanese troops from the local garrison who had become addicted to the use of nar- cotics since the invasion of China; that this was in 158 S -19- 158-S contradiction of Japanese army regulations which prohibited Japanese troops from using narcotics as they were a race superior to the Chinese. He also stated that the Japanese military had decreed that the opium revenue in occupied territories must bring a profit of $300,000,000 to the war chest. This was ten times the profit the Chinese Governsent had made out of the whole of China before occupation, yet the Japanese were in control of only one-third of China. The value of opium sold to users by the Government of Manchukue increased from 5,000,000 yuan in 1933 to 47,850,000 yuan in 1937. A steady increase will be recorded for several years. Smaller opium hongs around Shanghai were forced to close down because of their inability to pay protection fees imposed by the Japanese. Existing hongs pay from $300 to $500 per month, according to the number of smokers accommodated. From eight to eleven tons of opium are brought from Hankow to Shanghai each week as the recognized quota for the local market. Colonel Sharman (Canada) briefly reiterated Canada's concern about the traffic for material as well as for moral reasons. For instance, in securing convictions for drug snuggling from the Far East, the Canadian Government had had to spend the sum of 25,000 Canadian Dollars on one case alone. He described the situation as one of the utmost gravity. -20- Sir Thomas Russell (Egypt) was convinced from 158-T evidence indirectly placed at his disposal that the conditions in territory under Japanese occupation were appalling. The Committee decided to transmit a complete record of the discussion on the Far East to all Governments concerned, particularly to the Japanese Government in lieu of the usual resolution. b) International Settlement of Shanghai. There was a considerable growth of opium traffic in the Settlement during the year, following the cessation of the so-called anti-opium plan. Although this plan did not extend into the Settlement, it nevertheless had the effect unwittingly of eliminating the large scale traffic in opium in this area because, under its provisions, opium hongs were legalized in Chinese territory and clandestine den-keepers and addicts in the Settlement could obtain their supplies from these sources. In order to avoid detection, their policy was to purchase only small quantities of opius - sufficient to meet their daily requirements - at one time. When the Japanese forces advanced on Shanghai in September 1937, the legalized hongs were forced to suspend their operations in Chinese territory and the snuggling of opium into Shanghai from coastal ports started on an unprecedented scale. It appears, however, that the syndicates which were formed to import opium through the medium of ostensibly legitimate shipment of goods suffered serious financial lesses towards the middle of the year by reason of several of their larger shipments 158-U -21- 158- having been seized and confiscated by the Chinese Maritime Customs. As a consequence, many of then were dissolved. Reliable sources state that the information which led to these seisures being effected originated from Japanese interests which were anxious to stamp out the activities of Chinese competitors, as they themselves had entered the trade on a large scale and had perfected snuggling lines with Tientsin and Dairen. There were also reliable reports to the effect that big shipments of Iranian and Jehol opium were brought to Shanghai at frequent intervals from Tientsin and Dairen. The circumstance that the opium situation in the Settlement was appreciably worse during 1938 than before the outbreak of hostilities in August 1937 should not be construed to mean that larger shipments of opium were arriving in Shanghai for local consumption than vas the case under the Chinese Government's so-called anti-opium plan. A more correct assessment is that larger quantities of opium are entering the Settlement and the French Concession than before the hostilities because the bulk of Shanghai's population is now concentrated in these areas. There was increasing evidence that foreigners resident in the Settlement were obtaining consignments of heroin from Japanese sources for the purpose of feeding inter- national traffic. Close surveillance is now being kept on these foreigners. In many cases their sources of supply are centered at Tientain, to which they travel by the sea route. It is an interesting fact that the illicit drugs -22- 158-V originating in Tientsin seldon if ever proceed to foreign countries via Japan, though this is undoubtedly the shortest route to America. Consequently, the lines of communication converge on Shanghai or Hong Kong, particularly the former port. Penalties imposed by the Chinese court varied from & suspended sentence of imprisonment for three months to life imprisonment (reduced on appeal to imprisonment for 16 years). The sentences imposed by the Japanese Consular Court varied between fines of 20 yen and 100 yen ($4.00 to $16.00). c) Hong Kong. There is evidence that Hong Kong is an important distributing center for the snuggling of prepared opius to the North American continent. In 1938 a large proportion of the prepared opius seised in the United States and Canada came from or via Hong Kong. d) Macao. Marked increase was noted in the legal consumption of prepared opium in Macao - the figures for 1937 rose to 36,894 kgs. as against a rough average of 14,000 kgs. for each of the eight preceding years. M. de Magalhaes (Portugal) informed the Committee that the Portuguese Government had appointed a special commission to enquire into conditions at Macao. That commission, presided over by a former Colonial Minister, would hear the evidence of the new Governor of Macao who had been specially summoned -23- 158-W to Lisbon for the purpose. It was expected that its report would be available before long and would throw further light on the problem. The Committee was informed that the Portuguese authorities were endeavoring to exercise the closest check on stocks and they hoped to have the technical collaboration of the experts of the League of Nations in their efforts to bring the traffic under control. There was no clandestine manufacture of prepared opium. The preventive machinery at Macao with a staff of European and Chinese officials was being strengthened. Stricter laws for the punishment of illicit traffic in opium and, especially, heroin were being enforced. Difficulties in Macao had been increased by the Sino-Japanese conflict which had caused an influx of refugees into the colony so that its population had risen from 175,000 to 300,000 in the last year, yet the import of opius had fallen from 500 to 450 cases in that year. On this point Mr. Anslinger (U.S.A.) drew attention to the report of the despatch from Bushire (Iran) of 600 chests of opium for Macao in the period named on one Japanese vessel alone; that total exports to Macao for the year were 3300 cases instead of the limit of 450 claimed. M. de Megalhaes replied that his statement was based on the fullest information available to him and he could not add to it at the moment. He emphasized that the Portuguese Government felt that the situation at Macao and the Committee must realise that only part of the territory so named was under Pertuguese control - was -24- unsatisfactory, as in other places, and Dr. Salazar, the 158- Prime Minister, was anxious to ensure an improvement at the earliest possible moment. The strict and searching inquiry now in progress had been accompanied by an assurance that the Government would inflict severe punishment on those who were found to have committed offences against the law. It should be explained that the report of the Central Opius Board had shown anxiety lest Macao should become a center of illicit traffic in opium. According to returns submitted by the Portuguese Government the stocks held at the end of 1936 added to the further imports in 1937, seemed to the Board to be too large compared with the figures of prepared opium for the years since 1929. Moreover, during the years 1929 to 1935, 37,934 kgs. more prepared opium was manufactured than was consumed, whereas the stocks of prepared opium at the end of 1935 - as reported to the Advisory Committee - amounted to 4,248 kgs. only. The report of the Seisures Sub-Committee suggested that quantities of raw and prepared opium had escaped into the illicit traffic from Macao in 1935 and 1936. Mr. Fuller (United States) dealing mainly with the traffic of Iranian opium between Bushire and Macao, pointed out that the extent to which both raw Iranian opium and smoking opium had been escaping from Macao into the illicit traffic were circumstances of practical concern to the Government of the United States of America because most of the raw opius found in the illicit traffic in the United States was Iranian opium, a great part of which was sauggled 158-Y -25- 158-y into the United States from China. Moreover, practically all the smoking opium found in the illieit traffic in the United States came from China and was a blend of Chinese and Iranian opium put up solely for the illicit traffic in America. Heroin found in the illicit traffic in the United States had for some years past come mainly from China. Iranian opium - with its high morphine content lent itself specially to the manufacture of heroin and there was reason to believe that part at least of the Iranian opium so used had come from Macao. e) Netherlands Indies. The illicit traffic in heroin appears to have decreased in 1938. The illicit traffic in opium is supplied exclusively from abroad, more than 65% of the opium seised being confiscated on board ship or on land in circumstances enabling it to be ascertained by what vessel the drug had been imported. Nearly all the vessels by which opium was imported came from Chinese ports and it has been possible to ascertain the origin of nearly all the raw opium seised; 98.5% was Iranian opium and the rest of unknown origin. The morphine and heroin seized was probably of Japanese origin. f) Sian. A very large illicit traffic in opium, chiefly prepared, continues to take place over the northern frontiers into the interior of Siam. There were 8859 convictions -26- 158for offenses against the opius law, most of them in respect of the introduction or possession of illicitly imported opius. Raw opium confiscated during the year amounted to 222 kg. As regards the illicit traffic in morphine, the total seisures in 1938 amounted to about 16 kg., which is a large increase over the amount seized in previous years. g) Smoking Opium Monopolies. Whether the maintenance of a high price for opius sold under so-called monopoly systems under Government control tended to reduce purchase of snuggled opius or to stimulate that illicit traffic, was one of the questions raised. Mr. Anslinger (U.S.A.) noting that in Hong Kong 40,000 smoking opium addicts and 24,000 heroin addicts were served from illicit sources annually as against 840 who obtained their opium from Government-registered shops, stated that this was a very poor recommendation for the continuance of Government smoking opium monopolies, and drew attention to the experience of Indo-China where the price of monopoly opium had been twice increased in 1937 "owing to the improved situation in respect of contraband." Did it follow then that the monopoly reduced prices as snuggling increased? Without expressing any opinion, but claiming a right to draw conclusions, Colonel Sharman (Canada) followed later with the observation that the Hong Kong monopoly could hardly be so described when it supplied only four per cent of the opius used by its addicts. He urged the need of a fixed policy in the monopolist countries. -27- The Straits Settlements report specifically stated 158-A that the great disparity between the price at which opium could be obtained elsewhere and the price charged for licit prepared opium in Malaya, continued to afford an incentive to evasion and "undoubtedly tended to bring new traffickers into the market." The Committee had had another example of the conflict of practice in Johore, where laborers were permitted to obtain bulk supplies at moderate prices through "reliable nominee purchasers" with the object of prevent- ing their resort to illegal supplies for which they had to pay heavily. Colonel Sharman also pointed out that whereas various Far Eastern countries purchased opium dress - Siam, for example, took dress to the value of about 600,000 Swiss gold francs in the year - Hong Kong bought none. Colonel Sharman's interest in Hong Kong was due to the great influence exercised by that Colony on the drug traffic in North America. Major Coles (United Kingdom) agreed that the situation vas "highly unsatisfactory, but the authorities in British colonies were doing their best. The question of the price fixed for the sale of Government-opium was under discussion between the British Government and the colonial administration. Mr. Delgorge (Netherlands) emphasized the difficulty of the question. He cited, for example, conditions in Bali. There, before the monopoly was established, the price of opium was four florins; after the monopoly it was raised to twenty florins and yet the total expenditure by the people of Bali on opium was less than before the menopoly came into existence. Mr. Nind (India) defined the problem as entailing 158 B the combination of a price low enough to discourage snuggling with efficient prevention machinery. The real solution, however, lay in the limitation of the source of supply by bringing poppy cultivation under control. The Director reminded the Committee that the issues raised had long been in controversy, as was recognised in 1930 by the Commission of Enquiry into the Control of Opium-smoking in the Far East. That Commission's report declared that, so long as there were unlimited supplies of uncontrolled opium and Governments were unable to limit illicit trade, high prices would inevitably lead to snuggling. It would be difficult, the report held, to calculate the prices at which Government opium should be sold to make smuggling unprofitable and any reduction should be carried out gradually, the results being watched for a certain time before taking a new step. Close cooperation between the Governments concerned was prescribed to prevent the snuggling of legal opium from one country to another on account of the difference in prices. 4. EUROPE AND THE NEAR EAST. France. Approximately one-half of the total world seisures of heroin were made in France, showing that country to be a heavy user as well as an intermediate base for snuggling to other countries. The consumption of heroin is rapidly increasing in -29- 158-CC France and is causing concern to the Government. The reason to which it is attributed is a general let-down in morale. The number of arrests, which has been steadily increasing for several years, and the importance of the seisures carried out, bear witness to the energetic steps that are being taken to suppress all branches of the illicit traffic. Three hundred and eighty-four of the total number (432) of arrests or prosecutions in 1938 occurred in Paris. The quantities of drugs seized were considerably more than in 1937, especially as regards raw opium and heroin, and several international traffickers have been arrested. In March 1939 a clandestine laboratory for the manufacture of heroin was discovered at Requevaire near Marseilles. 759 kg. of opium, approximately 2 kg. of heroin powder and 20 tins of refined opium, were seized together with various chemicals and a complete laboratory equipment for commercial narcotic substances. In 1938 as in previous years it would appear that Marseilles, in spite of the vigilance of the French authorities, has continued to be an important transit center for the international illicit traffic. The situation became so acute that Premier Daladier appointed a prosecutor with dictatorial powers to supersede the local officials and to clean up the traffic in the city. Ingoslavia. Last year the Advisory Committee drew attention to information which indicated a disconcerting and apparently158-DD continuing increase in the movement of FEW opium, morphine base, morphine and heroin from Yugoslavia to France and to Italy. This year the Committee again had information that this traffic was continuing. It was therefore with great satisfaction that the Committee heard a statement from the representative of Yugoslavia that the situation in 1938 was characterised by an increased vigilance of the police authorities in that country and by still closer international cooperation. As a result of very severe measures taken by the authorities, a number of traffickers had completely ceased to engage in illicit traffic; unfortunately others had taken their place. The traffic was partly in raw opium and partly in alkaloids. It was not intended for Yugoslav consumption, but it passed over the Yugoslav border towards Occidental countries and more particularly towards America. The representative of Yugoslavia added that in addi- tion to increased police activities, Yugoslavia had taken an important step forward by introducing very severe legislation against the illicit traffic which had come into force in January 1939. He expressed the firm con- viction that the illicit traffic which in the last few years had developed in certain regions of Yugoslavia would soon be considerably reduced. He added that his Government, in view of the wish expressed by the Committee last year, had decided to submit in future individual reports on cases of illicit traffic in Yugoslavia after they had been dealt with by the authorities and the competent Courts. -31- Turkey. 158 EE The illicit traffic has continued to decline in Turkey in the past year. The quantity of drugs seised is diminishing from year to year, and with the exception of three cases of illegal exportation, nearly all the seisures took place in the interior of the country, and consisted of small quantities discovered in the possession of drug addicts or retail traffickers. Clandestine manufacture which, despite the most energetic judicial action, has not yet been entirely stamped out, seems to be the chief source of supply of the illicit market. Turkey formerly sold from 40 to 50 tons of raw opium to Japan annually for medicinal purposes and for smoking opium monopolies. They sold none to Japan in 1938. Japan bought opium from Iran in exchange for cotton goods. Egypt. The most significant figures as to kind and quality of the narcotics seized are those for opium, vis.: 1935 247 kg.: 1936 - 500 kg.: 1937 - 1006 kg.: and 1938 1037 kg. The opinion expressed in previous reports was that the very great reduction in addiction to manufactured drugs in Egypt was due more to the people's inability to pay for the drugs than to any cessation of desire for drugs on their part. Heroin still enters in small quantities, but its high price keeps it out of reach of the poorer classes. Opium is now the favorite narcotic and, by the discovery of a new method of taking it, is rapidly 158-51 -32- 158-FF supplanting the heroin of former times. If estimates are correct, Egypt consumes the astonishing figure of about 20 tons of illieit opium annually. This estimate is made by adding to the 1 ton of opium seised in Egypt the large seisures in Palestine and Syria in transit for Egypt, and adding to that the estimate of approximate amounts not seised. Up to a year or two ago, opium was taken by chewing. Now it is boiled in water, and the liquid thus obtained is used for subcutaneous injections with a syringe. In this connection an inquiry has been made into annual imports and sales of hypodermic syringes in Egypt. About 50,000 syringes are estimated as being used for this purpose. Sir Thomas Russell (Egypt) discerned signs - definite though not for the moment alarming - of an increase in convictions for trafficking and addiction, and the steady yearly rise in the flow of contraband opius into the country, the opium being extensively used in rural areas. It came almost entirely from Palestine and Syria and was of Balkan and Turkish origin. Better preventive work in the Gulf of Suoz and the establishment of close liaison with the French authorities in Syria should bring about an improved situation. Referring to heavy penalties inflicted by the Egyptian courts on certain sailors of the Coastguard Administration involved in illicit traffic, Sir Thomas emphasized the determination of the Egyptian Government -33- 158GG to punish with the utmost severity preventive agents who betrayed their trust. 5. NORTH AMERICA. All available information indicates that illicit traffickers continued to rely on the Far East for supplies of prepared opium, while France, Yugoslavia, and Italy were used as bases for snuggling of raw opium, morphine and heroin into the United States. Both morphine and heroin coming from Italian ports were seized in the Atlantic Coast Area. In the South Central and South Pacific Coast Areas a number of seisures were made of raw opium and prepared opium, apparently of Mexican origin. There were several seisures in the continental United States of prepared opium in 1-tael tins of the "Red Lion" brand, this being a type of tin more frequently encountered in the Philippine Islands and the Far East. Traffickers still despatch their drugs in smaller lots than was their custom about seven years ago. False compartments in trunks and hand-baggage have been employed in the effort to snuggle into the United States narcotic drugs in large quantities. During the first part of the calendar year 1938 the trend of prices in the wholesale illicit traffic and other circumstances indicated that the demands of the traffic continued to be net with the possible exception of raw and prepared opius. However, during the latter months of the year there were many 158. HH -34- 158 M H indications in several areas of an appreciable ourtailment of the supply of narcotics available for the illicit traffic. Prices of narcotics in the United States were about the same as in Canada, although the prices in the United States were lower last year. In Canada addicts are burning off alcohol from paregoric and injecting the residue. 6. SECRET POLICE MEETINGS. The exchange of information at these meetings proved extremely valuable. The first meeting was attended by representatives from the United States, Canada, England, Holland and Egypt. Individuals and rings operating in international illicit traffic, and also improved methods of combatting the traffic, were discussed. Various countries supplied missing informa- tion on operations of individuals and rings. The second meeting was attended by representatives from the United States, Canada, Italy, England, Egypt and Germany. The German police had done eplendid work in suppressing traffic both within their borders and also as it affected the United States and other countries; Germany has continued this work in her usually efficient manner. The German authorities are determined to suppress narcotic traffic in that country, and are also assisting other countries in running down traffickers who go through -35- 158-II Germany or use Germany as a base for snuggling operations. This is one silver lining in the dark clouds of the recent past. Italy sent a high police official to attend these meetings. The presence of both German and Italian officials in Geneva is an event unheard of since those countries have withdrawn from the League. The narcotic question is the only one on which they will cooperate, and this collaboration speaks for itself. 7. CANNABIS. Uncertainties regarding the qualities of Indian hemp, Cannabis, or marihuana, have been partly removed by the investigation of various experts on the basis of whose reports the Committee was able to discuss the findings of the Cannabis Sub-Committee. One important correction of a former conclusion emerged. The suggestion that the drug-giving capacity of the plant's resin is small in temperate climates was found to be untenable. The Sub-Committee over which Mr. Nind (India) had presided came to the conclusion that, in view of the influence which climate seems to exert on the production of resin from the plant, it would be necessary to proceed as soon as possible to investigate the resis content of samples of cannabis from different parts of the world where the plant is cultivated irrespective of the purpose for which grown. It was decided to entrust the investigation to -36- Dr. J. Bouquet and Dr. de Myttenaere, two experts whose labors in unravelling the technical mysteries of the plant received warn tribute from the Committee. It was also decided to approach the special Research group in the United States for the study of cannabis for its assistance. Other findings of the Sub-Committee included expression of confidence in the Beam test for establishing the resin content of drugs seized. Encouragement of research work for ascertaining cannabis reactions, and recommendation of a concerted inquiry into the fundamental study of cannabis addiction in various countries found strong support from the Committee. Interesting data on the connection between cannabis and insanity and cannabis and crime were made available. Research work on cannabis should be conducted along the following lines: 1. Determination of the active principle. 2. Determination of resin content. 3. Determination of toxic quality of hemp seed. 4. Questionnaire to be submitted to psychiatrists on cannabis addiction. Dr. Bouquet, cannabis expert of France, referred to the article on marihuana written by Dr Salazar-Viniegra of Mexico wherein it is stated that the drug is harmless. Dr. Bouquet remarked that if the latter is right, then all the scientists who have worked on the cannabis problem since 100 A. D., including the members of the 158 JJ 158-KK -37- 158 KK League Committee, "should have their heads examined. 8. LEAGUE SECRETARIAT'S PROGRESS REPORT - 1938. The progress achieved by the Supervisory Body was brought to the Committee's attention in the marked increase in the number of countries supplying their own estimates of requirements of dangerous drugs. Whereas in 1933 only 45 such estimates had been supplied, the number in 1938 had risen to 67. Moreover, 102 territories had furnished estimates as against 83 in 1933. In South America only one country failed to submit estimates of requirements for 1939. This improvement is attributed to the influence of the Mission sent to those countries in 1938. Difficulties in the past had arisen in part from imperfect understanding of the obligations imposed by the Convention and from the language problem. Personal explanations had smoothed the way and the maintenance of such contacts was held to be highly desirable. The closer correspondence of estimates to the statistics of actual needs as shown by quantities of morphine converted was regarded as another encouraging feature. In 1934 the percentage by which the estimates exceeded requirements was as high as 53% In 1936 it was only 26% and in 1937 it dropped to so low a figure as 12% Disclosures of the recent rapid development of the manufacture of alkaloids from the poppy plant were forth- 158-LL -38- 158-LL coming in figures given to the Committee. This now process, it was pointed out, had serious interest for producing countries which were bound by convention. Under Article 19 of the Geneva Convention of 1931 Governments are required to show the "percentage" of narcotics on every label. The new Pure Food and Drugs Act in the U. S. A. contained this provision, to be effective June 25, 1939. The Surgeon General of the United States Public Health Service supported the drug trade in its argument that the provision was confusing and might cause fatalities; that if the quantity were shown, as has previously been done, it should be suffi- cient for control purposes. At Mr. Anslinger's request, & Sub-Committee considered the matter and the majority opinion was held that if quantity were shown, the treaty requirement would thus be satisfied. In the course of debate, Mr. Anslinger called for any Government to state whether it was showing "percentage" on labels, and received no response, not even from the Swiss and Belgian experts who had insisted that percentages must be shown for control purposes. a) Legitimate Manufacture. The enormous drop in the world manufacture of all narcotic drugs after the drug conventions of 1925 and 1931 came into force was shown by charts prepared for the League of Nations exhibit at the New York World's Fair. This curtailment of production is evidenced in 158-MM -39- 158 M the United States, where only highly adulterated drugs are now available in the illicit traffic as compared to unlimited quantities of pure drugs available there before the conventions became operative. 9. ADDICTION. Should the drug addict be regarded as a patient or as a criminal--that question Dr. Chodsko (Poland) and Dr. Carriere (Switzerland) called upon the Committee to consider in discussing the question of addiction. Dr. Chodzko emphasized his desire to deal with European conditions with which he was well acquainted. He did not pretend to cover the problem in the United States, to the Government of which he paid warm tribute for its resolute enforcement of the Harrison Law in the fight against the drug traffic. In Europe he felt that the addict should be regarded as a victim of chronic disease. Treatment in hospitals could not do more than touch the fringe of the problem for it could affect only a small percentage of the addict community. For Europe Dr. Chodsko advocated the establishment of dispensaries with visiting nurses for the administration of doses to addicts under rigid control leading eventually through gradual reduction of the doses to cure. The advantage of this system lay in its capacity for handling large numbers of addicts without withdrawing then for the time being from the normal life of the community. Turning to the probles of opium smoking in Asiatic territories where monopolies 158 N N existed Dr. Chodsko suggested that there were three main aspects to consider: prices, dispensaries not of the kind advocated by him for Europe but adapted to local conditions-- and uniformity of policy. He pointed out that the variation in the prices among the monopoly countries tended to give snugglers an opportunity of which they readily availed themselves. Uniform prices should be fixed and he thought too that the monopoly prices should be lowered to the point at which it was no longer profitable for the illicit traffickers to deal in snuggled opium. Above all the monopoly countries should be urged to coordinate their policies on uniform lines in order to prevent the smugglers from playing the one off against the other, and to develop a consistently progressive attack against the addict and the traffic which fattened on him. Mr. Anslinger firmly opposed the proposal. It would, he said, throw the problem back to the state in which it was twenty years ago. The knowledge of the causes of drug addiction was no more advanced than knowledge of the cause of cancer and he considered that medical men should devote themselves to an investigation of that aspect of the problem. The experience in the United States showed that enforcement of the Harrison Narcotic Law had contributed substantially to the reduction of addiction, and no ambulatory method could succeed in doing anything else but add to the number of addicts. The institutional treatment of addicts was the only practical system, and in the United States, medical -41- 15800 opinion was strongly in favor of the existing method for this purpose, which, with the help of international cooperation, combined police control with medico-social effort. The United States Government was not prepared to discard its present plan. The question as to whether the addict was a sick nan or a criminal was beside the point. The most effective way of reducing addiction was the main consideration. Under Dr Chedsko's plan drug addicts would multiply unrestrained because easy or unrestricted access to drugs tends materially to increase addiction. The present international system is reducing addiction. If the Committee adopted the proposal of Dr. Chodsko, it would make committees and opium boards useless, and would put the drug situation back to the days of the Hague Convention. In the course of his criticism of the proposal to establish dispensaries for ambulatory treatment, Mr. Anslinger pointed out that addicts would not voluntarily come forward for treatment, because drug addiction was regarded as a vice, a skeleton in the family closet, and only about 10% of the addicts would be brought within the scope of the dispensaries, and they would promptly become dope peddlers for the other 90% and thus spread addiction still further. In proof of this, Mr. Anslinger cited three cases where medical men had adopted the method of treating addicts with morphine and in the course of this treatment each of these medical men prescribed more mor- phine in the year than the whole of their medical colleagues -42- in their respective areas. The result was a marked 158PP increase in addiction in those localities, also an increase in crime by addicts who wanted to raise money to obtain the prescriptions, and the medical men in question eventually had their licenses withdrawn by the Medical Boards and one of them was in a penitentiary. The League's chart had shown a gratifying decrease in the illicit consumption of opium and drugs. If this proposal were adopted, the chart would show a sharp rise in the reverse direction. Mr. Anslinger concluded by appealing to the Committee not to depart from the principles already accepted under the Geneva Convention of 1931 and generally approved by the medical profession. Ambulatory treatment of the addict would merely perpetuate addiction. Dr. Chodsko (Poland) replied that he was not in favor of clinics as outlined by Mr. Anslinger (U.S.A.). and referred to League of Nations Document 0. C. 1614, which shows the failure in the United States of selling drugs at low prices to addicts; that he approved dispensaries with nurses to take care of addicts. He also referred to the Harrison Narcotic Act which provided that the doctor was the sole judge in administering narcotics to an addict, and that the Bureau of Narcotics was not the judge as to what constituted medical practice. Mr. Anslinger said that if narcotics were administered or prescribed by a doctor in cases of medical need, the physician was acting "in the course of professional practice," but that if he gave narcotics only to keep the addict comfortable, then 158-QQ -43- 158 0 he was not acting "in the course of professional practice* and the courts had so ruled many times. As to treating addicte in dispensaries it was pointed out that the system would fail at the outset because as & practical matter the addict needed three shots daily: at 8 A. M., 4 P. N., and 12 midnight; that the average addict wouldn't go there at 8 A. M.: that he couldn't go at 4 T M., as his work was not completed by that time; that he wouldn't get out of bed at midnight and take the trouble of going to a clinic, perhaps at a distance, to get his shot to keep him comfortable for the night. Furthermore, the more respectable type of addict would not go near a dispensary because he prefers to conceal his vice. The position of the United States was supported publicly by Canada and Egypt, and privately by the majority of the delegates. League officials had privately intimated that they desired Mr. Anslinger to lead the debate in opposition to Dr. Chodsko's proposal, as they feared its adverse effect on international cooperation. M. Tello (Mexico) mentioned the intention of his Government to open clinics for the treatment of addicts who would receive rations of morphine under medical super- vision. In response to criticisms by Mr. Anslinger (U. S. A.), who gave it as the experience of his country that such clinics tended to stimulate rather than reduce illicit traffic, because of the resale of authorized supplies by registered to unregistered addicts and because -44- such clinics spread addiction, M. Tello agreed to transmit 158-RR to his Government the suggestion that before putting the scheme into force, the Mexican Government should permit the Committee to consider the whele problem. Such shops would also encourage snuggling into the United States, Canada and other countries. Mr. Anslinger talked privately on the subject to Dr. Salasar-Viniegra of Mexico at the latter's request. Dr. Viniegra explained his new regulations which will become effective in three months and which allow the non-medical addict to have a month's supply of drugs. Dr. Viniegra is obviously a man without any experience in the narcotic problem. The Mexican Police will doubt- less put an end to the system within a short time. Mr. Anslinger pointed out to Dr. Viniegra all of the unfavorable results that could be expected. In support of his proposal, Dr. Viniegra produced the blue book issued by Mr. Blanco of the Anti-Opium Information Bureau in Geneva, who favors the establishment of clinics. Mr. Blanco had just been appointed observer of the League meetings for the Spanish Government, he being a close friend of General Franco. In plenary session, Mr. Anslinger called on Mr. Blanco to state whether the views expressed in his blue book represented those of the Spanish Government. Mr. Blanco was silent. CONFIDENTIAL The Mexican representative (N. Tello). a man of sound judgment, asked Mr. Anslinger to request that the new Mexican regulations be postponed until the Committee had a chance to study them. He stated that he -45- was not in favor of the radical departure in Mexican ar-158-SS cotic policy. His request was complied with. 10. PREPARATORY WORK FOR A CONFERENCE TO LIMIT THE PRODUCTION OF OPIUM. The Committee to consider draft articles for a Convention to Limit Opium Production discussed proposed articles for a week and then referred all discussion to & Sub-Committee, which prepared a revised set of articles to meet the views expressed by Governments. These articles were prepared by the League Secretariat following two week's debate last year, at which time certain principles were tentatively agreed upon as being possible to include in such a Convention. Upon the suggestion of Mr. Anslinger, a legal expert assisted the Committee for the first time, to produce proper legal phraseology, as it was pointed out several times that the articles were so badly drafted as to be meaningless. The revised articles contained a joker as to the closing date for smoking opium monopolies. The closing date (left blank) was to be considered by a Commission appointed by the League, which was to recommend as to the advisability of closing or continuing in view of conditions existing at that time. This was disappointing because it was generally believed that the nations would agree to a tapering off in production for monopolies, so that they would definitely cease on a given date. The Hague Convention of 1912 provided for a gradual suppression of smoking opium monopolies, which has not been carried out. 158-TT . 46- The producing countries, with the exception of Iran, have generally agreed to 11:11 production under some plan of control. If these producers agree to limit production, and Iran does not sign the Convention, the effect will be to shut out Iran. Her exports to the Far East may compensate for a time, but Iran fears that Japan will grow her own opium for monopolies and for medicinal purposes. This will force Iran into the Convention as the Treaty will contain sanctions to the effect that no opium can be purchased from a producer nor party to the Convention. The revised draft articles for a Convention will be submitted to Governments for observation. I am, Sir Very respectfully yours, Commissioner of Narcotics. Hounshings N. J. ANSLINGER, TREASURY DEPARTMENT INTER OFFICE COMMUNICATION 2659 DATE June 16, 1939 Secretary Morgenthau TO FROM Mr. Haas YORK Attached is a memorandum from Miss Lonigan commenting on "U. S. Community Improvement Appraisal - A Report on the Work Program of the WPA." Attachment June 16, 1939 To: The Secretary From: Miss Lonigan 260 The "U. S. Community Improvement Appraisal" is a collection of opinions about WPA made by State and local officiale and representative citizens. WPA projects received overwhelmingly favorable comment. This conclusion is subject to the following questions: 1. How far were the "physical accomplishments" of WPA additional facilities and how far merely substitutes for State, local, and private public works? Is WPA the best way to transfer financing of public works to Federal funds? 2. How far were the "human accomplishments" subject to rigid tests of real benefit to the unemployed, and how far to merely sentimental tests? 3. Was the "unbiased" appraisal unbiased? "Appraisal" Techniques It is not indicated who prepared the original questions. They were almost certainly prepared by WPA. The questionnaires were sent out by State organizations, such as the League of Municipalities, or the State Relief Administration. They were sent to governors, mayors, business men, farmers, and women's clubs. The report says that the State Committees "did not have sufficient time to consult thoroughly objective data, from which to make entirely adequate appraisals". Most of the cooperating agencies are dependent in impor- '. S. on expenditures by WPA. The interest of the done an Conference tant ways of is well-known. The WPA has also Mayors effective job of "placing" grants for special extraordinarily with universities and learned or professional societies, operation projects where the soon become indispensible for regular by the large of the society. grants This is the technique developed committments, but The grant 18 made without any lively and inter- foundations. the renewal of funds, on which depend is the contigent more on the for intellectual integrity. esting approval activities of the giver of the of funds. association, This situation 18 not he 1thy Local Comments The WPA funds. chief recommendation in the summary is inadequacy of 2- 161 Beginning on page 18 there are some excellent comments on actual operation of the program. These describe clearly the lack of fit between WPA employment and the needs either of workers or of communities. "Small communities -- lack services of people expert enough to fill out WPA applications. -- Applications sometimes have to be done over as many as ten times. Meanwhile the community is supporting a group of able-bodied unemployed on direct relief for weeks and months". "The kinds of projects they can afford to sponsor do not -increase property values and prospects of future tax returns. They keep on applying for projects they need, and resent their rejection". "Ineffective arrangements made to facilitate return of workers after taking private jobs are a needless injury to both worker and community, and a serious grievance to farmers and others who need temporary help". Short hours of skilled workers on relief are resented by unemployed not on relief and by farmers. Planning is difficult when WPA "must increase and decrease to meet shifting needs". (No works program can be effective until it 18 totally divorced from cyclical spending). It is true that WPA has completed a group of community im- provements which would probably not have been completed on the initiative of State and local officials. (This can, however, easily be overdone). The very instability of WPA has built up an increased sense of the value of precise long-range policies for public works. This is not "economic planning" but the same precise analysis of future prospects as is necessary for long-range bond issues. There is no measure of the administrative waste and friction that follows from double supervision of Federal and local officials. There is no discussion of alternative programs. The ques- tions, therefore, are all "leading questions". For example, Social Security officials argue that it is better to maintain most workers' skills in idleness with funds they believe they have earned, than to "preserve their skills" by putting them all in construction. Manufacturing, service, railroad, water transportation, and hotel employees have no opportunity to "preserve" skills on WPA. There is a fundamental fallacy in the idea that men should have work planned for them by other people for 52 weeks a dull year. Work 1s normally irregular, and always will be. In the the seasons and in gape between paid jobs, men normally do things they themselves direct. That is when they preserve and develop their ingenuity and self-reliance. MORGENTHAU'S OFFICE TO. Mr. Gibbons Mr. Oliphant Mr. Gaston Mr. McReynolds Miss Rocho Mr. Taylor ==== 162 Mr. Allon Mr. Anslinger Mr. Hoster Mr. Batchelder Mr. Boll Mr. Borkshire Mr. Lochhead Miss Lonigen Mr. Moran Mr. Murphy Mr. O'Connor Mr. Bartelt Mr. Birgfeld Mr. Broughton Mr. Bryan Miss Chauncey Miss Diamond Mr. Graves Mr. Greenberg Mr. Haas Mr. Hall 0 Hamlot les Hanna Mr. Harlan Mr. Harper Mr. Julian Mr. Kilby Miss O'Reilly Adm. Peoples Miss Reynolds Mr. Rose Mr. Ryan Mr. Schooneman Mr. Sloan Mr. Smith Mr. Spangler Miss Switzer Mr. Thompson Mr. Heffelfinger Mr. Upham Mr. Helvering 1- - Ordians 2- miss Domegan she secretary would appreciate m C. . having yourn comment 163 16910 WORKS PROGRESS ADMINISTRATION Hoam WALKER-JOHNSON BUILDING 1734 NEW YORK AVENUE NW. WASHINGTON D.C. HARRINGTON MINISTRATOR May 24, 1939 Longan for comera The Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. My dear Mr. Secretary: Enclosed is a copy of the United States Community Improvement Appraisal which summarizes the results of a Nation-wide independent survey of the work program of the WPA. This survey, sponsored by 11 national organizations and agencies, was made in an effort to gather facts and opinions of State, city and county officials regarding the WPA program. Nearly 8,000 officials responded to the questionnaire sent out by these organizations. A copy of the report was submitted to the President on May 8, by a committee of representatives of the sponsoring organizations, headed by Mayor F. H. LAGuardia of New York City, President of the United States Conference of Mayors. The most important part of the report is the letter, findings and recommendations of the National Appraisal Committee, on pages 5-8 of the booklet. Administrator Very sincerely yours, 164 U.S. COMMUNITY IMPROVEMENT APPRAISAL A REPORT ON THE WORK PROGRAM OF THE WPA April 1939 NATIONAL APPRAISAL COMMITTEE U.S. COMMUNITY IMPROVEMENT APPRAISAL A REPORT ON THE WORK PROGRAM OF THE WORKS PROGRESS ADMINISTRATION BY THE NATIONAL APPRAISAL COMMITTEE TO THE DEPARTMENT OF ADULT EDUCATION AMERICAN ENGINEERING COUNCIL (National Education Association) AMERICAN INSTITUTE OF ARCHITECTS AMERICAN MUNICIPAL ASSOCIATION NATIONAL RECREATION ASSOCIATION AMERICAN PUBLIC WELFARE ASSOCIATION U. S. BUREAU OF PUBLIC ROADS AMERICAN SOCIETY OF PLANNING OFFICIALS UNITED STATES CONFERENCE OF MAYORS NATIONAL AERONAUTIC ASSOCIATION WORKS PROGRESS ADMINISTRATION APRIL, 1939 WASHINGTON, D.C. - CONTENTS Page 5 LETTER OF TRANSMITTAL 7 FINDINGS 8 Presidents and Administrative Executives of Agencies Cooperating 9 RECOMMENDATION OF NATIONAL APPRAISAL COMMITTEE 9 Representatives of the Eleven Cooperating Agencies STAFF REPORTS SUMMATION OF 7,737 COMMUNITY SURVEYS: 13 Physical Accomplishments (chart) Human Accomplishments (chart) 14 15 Consensus of Opinions Received on Each Question Total Number of Opinions Received on Each Question Officials Who Made Appraisal as Classified by Communities (charts) 15 16 17 Appraisals Grouped According to Types of Communities and Persons Who Made Surveys Big Cities in Relation to Small Cities on the Question of "Need" 17 FAULTS AND VIRTUES AS SUMMARIZED: 18 Faults of the WPA Works Program 18 Insufficient Coverage of Employment Needs 18 Red Tape 18 Small Communities Lack Technical Aid 19 Winter Labor Surplus Forces Overload Small Communities Lack Construction Funds 19 19 Workers Afraid to Quit WPA for Fear They Cannot Return 19 Local Charge for Direct Relief Affects Project Efficiency 19 Poor Supervision 20 Short Hours of Project Workers 20 Uncertainty and Inability to Plan Ahead 21 Satisfactory Results of the Works Program 21 Valuable and Lasting Community Improvements 21 Physical Accomplishments 21 Larger Cities Favor Most "White-Collar" Projects Small Cities Favor Some "White-Collar' Projects Communities Can Absorb Certain "White-Collar" Projects 21 22 22 NYA Is Regarded Highly 22 Good Workmanship 23 Work Relief Compared with "Dole" 23 Federal or State-controlled Programs 26 STATE APPRAISALS: Majority and Varying Views LOCAL APPRAISALS Majority and Varying Views AN OFFICIAL COUNTY APPRAISAL OPINION (a sample) NATIONAL STATE AND LOCAL COMMITTEES SHARED IN APPRAISAL SPONSORS OF APPRAISALS IN THE STATES 32 47 51 or NATIONAL APPRAISAL COMMITTEE WASHINGTON D. C. January 23. 1939 To the EXGINEERING COUNCIL DEPARTMENT OF ADULT EDUCATION (National Education Association) OF AMERICAN AMERICAN INSTITUTE ARCHITECTS MUNICIPAL NATIONAL RECURATION ASSOCIATION PUBLIC ASSOCIATION U.S. BUREAU OF PUBLIC ROADS AMERICAN AMERICAN WELFARE PLANNING ASSOCIATION AMERICAN S CITY OF OFFICIALS U.S. CONFERENCE OF MAYORS NATIONAL Are VAUTIC ASSOCIATION WORKS PROGRESS ADMINISTRATION GENTLEMEN: The undersigned National Appraisal Committee, appointed by representatives of your organizations pursuant to the Operating Plan of the United States Community Improvement Appraisal dated January 24, 1938, respectfully submits its report. The responsibilities assigned this Committee are set forth in your Plan as follows: "Representatives of the national cooperating agencies shall jointly select a National Appraisal Committee, which shall evaluate and summarize the reports made by the Governors and the reports made by the State Committees, and prepare a nation-wide report appraising the types of projects and methods of operation from the twin standpoints of (a) effect on the unemployed and (b) effect on the communities as a whole. The report of the National Committee shall be made to the national cooperating agencies, which shall make it available for official public use." Prior to the appointment of the National Appraisal Committee, an endeavor was made to ascertain the views of state, municipal and county officials who administer the local projects initiated at their own request. The method followed was to have some state organization such as a state league of municipalities, state planning board, state relief administration or state university seek to gather from these state or local officials answers to a series of questions concerning the works program for the needy unemployed. Afterwards a state-wide committee of leading citizens summarized the answers, and made recommendations Manifestly the survey was so broad that only the program and accomplishments of the Works Progress Administration and its predecessor and subsidiary agencies were considered The appraisal covered 42 of the 48 states, 1,977 out of 3,071 counties in the nation and included 2,102 rural communities, 1,201 small cities, 266 middle cities, and 154 reports from large cities, About 8,000 state and local reports were analyzed. In this great mass of factual material were the findings of governors, heads of state departments, mayors, county and municipal executives, and school officials, representing the bulk of official obinion-about 7,000 in number. In addition, 1,125 business men, farmers, doctors, lawyers and leaders in men's and women's clubs presented their views. We have endeavored to summarize the findings and to make a recommendation for the improvement of the program, basing our report only on these state and community reports. Every cooperation requested by us was given by the Works Progress Administration The committee expresses its thanks to Mr. James R. Branson, its Secretary, and Mr. J. Charles Laue for the gathering and analyzing of the factual material used by the committee reaching its conclusions, in 5 In the course of the appraisal certain material has been assembled by others which believe is of sufficient value to warrant publication as a supplement to this report. Part we of this material is attached to this report, and part is to be published separately later. Because we have not had the opportunity to examine this material, the Committee naturally assumes no responsibility for the facts or conclusions in these supplements. In making these findings and recommendations it is understood that the members of the committee are acting as individuals, and are not empowered to reflect the views of the organizations and institutions with which they are associated. Respectfully submitted, MORTON L. WALLERSTEIN Chairman, National Appraisal Committee 6 FINDINGS The reports-about 8,000 in number, which served as primary source material for both the quality of the administration was good. The only point on which a majority of the State and national appraisal committees- reports (51 per cent) gave a negative answer was whether the program had covered the field of needy employable people. It was indicated in the reports that this failure was were written in the main by local public officials. Their reports would naturally reflect the deficiencies inherent in an appraisal of a program in which they were interested. Also, while the State Committees were com- due to a number of causes, such as inadequate planning, inability of the communities to provide projects suitable for the relief workers available, and especially lack of sufficient posed of persons of prestige and dependability, it seems to us that they were not given funds. sufficient time and opportunity to consult The answers in the reports set forth certain defects in the program. Some of these defects listed by the appraisers and enumerated be- thoroughly objective data from which to make entirely adequate appraisals. Due weight should be given to these two deficiencies in the local and state evaluations. Nevertheless, the tabulation of opinions from the 8,000 communities and the reports of the 42 State committees are considered exceedingly valuable because among other low can be corrected administratively within the Works Progress Administration itself; others are dependent for removal upon public policy at the several levels of government, Federal, State and local: 1. Lack of a recognition of unemployment reasons (1) they constitute, so far as this committee knows, the only comprehensive survey of this sort in existence, averaging as a long-time problem frequently has resulted in a failure of comprehensive planning so essential to an effective program. 2. Federal, State and local funds have been insufficient to give employment to all needy more than 150 communities for every State in the nation, and (2) they are not limited to favorable comments but contain much candid. constructive criticism designed to correct employables. 3. The program did not permit or encourage, in many instances, the exercise of sufficient discretion, responsibility and initiative on the part of local officials. 4. There has not been enough flexibility to adjust wages and hours to meet variations in local conditions and the competency of the some points on which present operation is unsatisfactory and which may be used as a basis for improvement. Of all the reports from the communities, large and small, specifically answering the various questions put to them, 93 per cent stated that the work performed was badly needed and of benefit; 90 per cent, that it was of permanent value; 79 per cent, that their own local fiscal condition was improved by it; 90 per cent, that work-relief had been better than the dole, both for individuals and communities; 90 per cent, that the health, workers. 5. There has been ineffective local supervision of the relief workers in many instances. 6. There was a lack of skilled workers on relief in many localities, not only to carry on certain projects which were regarded as desirable, but also to provide more useful work for the unskilled 7. There was a need of more vocational recreation, education and other non-construe- live activities have been worthwhile; 90 per cent. that community improvement had been advanced; 80 per cent, that the work had maintained the skills and employability of the workers: 85 per cent, that the quality of training, both to assist in securing skilled workers for selected projects, and to facilitate the return of relief workers into certain private occupations. the workmanship was good; 75 per cent, that 7 RECOMMENDATION The Committee is in full accord with what it believes to be a maturing public conviction that the needy unemployed who are able to work should be furnished the opportunity for employment. An adequate long-time national program dealing with unemployment does not NOW exist and should be developed at the quested to make a report to the President of the United States to include: (a) A nationwide objective survey to appraise the results achieved by all the agencies dealing with the unemployed. (b) A recommendation as to the best method of correlating measures for the relief of unemployment with comprehensive programs of public works, public services, private employment and provisions for social earliest possible time. To obtain this program, the National Resources Committee, collaborating with public and voluntary agencies security. at all levels of government, should be re- MORTON L. WALLERSTEIN, Chairman, National Appraisal Committee, Past President, American Municipal Association, Richmond, Virginia MEMBERS ROBERT E. BUCHANAN, Dean, DONALD R. HOOKER. Chairman, Graduate College, Iowa State College of Agriculture Mayor's Committee on Recreation Baltimore, Maryland and Mechanic Arts, Ames, Iowa GEORGE F. ZOOK, President. LEWIS MUMFORD American Council on Education Amenia, New York Washington, D. C. DONALD COMER, Chairman of the Board, ABEL WOLMAN, President, Avondale Mills, Birmingham, Alabama American Public Health Association, Baltimore, Maryland JAMES R. BRANSON, Secretary, Room 305. Lemon Building 1729 New York Avenue, N.W., Washington, D. C. 8 PRESIDENTS AND ADMINISTRATIVE EXECUTIVES OF AGENCIES COOPERATING IN THE UNITED STATES COMMUNITY IMPROVEMENT APPRAISAL Agency AMERICAN ENGINEERING COUNCIL 744 Jackson Place, N.W. Washington, D.C. AMERICAN INSTITUTE OF ARCHITECTS 1741 New York Avenue, N.W. AMERICAN MUNICIPAL ASSOCIATION 1313 East 60th Street Chicago, Illinois AMERICAN PUBLIC WELFARE ASSOCIATION 1313 East 60th Street Chicago, Illinois AMERICAN SOCIETY OF PLANNING OFFICIALS 1313 East 60th Street Chicago, Illinois NATIONAL AERONAUTIC ASSOCIATION Dupont Circle Washington, D.C. DEPARTMENT OF ADULT EDUCATION Name Position DR. WILLIAM McCLELLAN President FREDERICK M. FEIKER Executive Secretary CHARLES D. MAGINNIS EDWARD C. KEMPER President C.C. LUDWIG President CLIFFORD W. HAM Executive Director CHARLES F. ERNST President Executive Secretary FRED K. HOEHLER Director HAROLD S. BUTTENHEIM WALTER H. BLUCHER President CHARLES F. HORNER WILLIAM R. ENYART President Secretary DR. G. E. MANN President JOHN H. FINLEY President Secretary Executive Director (National Education Association) 1201 16th Street, N.W. Washington, D. C. NATIONAL RECREATION ASSOCIATION 315 Fourth Avenue New York City U.S. BUREAU OF PUBLIC ROADS HOWARD BRAUCHER THOS H. MACDONALD Chief F. H. LAGUARDIA President 515 14th Street, N.W. Washington, D.C. U. 8. CONFERENCE OF MAYORS 730 Jackson Place, N.W. Washington, D. C. WORKS PROGRESS ADMINISTRATION PAUL V. BETTERS Executive Director F. C. HARRINGTON Administrator 1734 New York Avenue, N.W. Washington, D.C. REPRESENTATIVES OF THE ELEVEN COOPERATING AGENCIES WHO SELECTED THE NATIONAL APPRAISAL COMMITTEE Agency AMERICAN ENGINEERING COUNCIL AMERICAN INSTITUTE OF ARCHITECTS Representative LEMUEL D. REESE WM. S. PARKER Position Assistant Executive Secretary Chairman, Committee on Construction Industry Relations AMERICAN MUNICIPAL ASSOCIATION AMERICAN PUBLIC WELFARE ASSOCIATION AMERICAN SOCIETY OF PLANNING OFFICIALS NATIONAL AERONAUTIC ASSOCIATION DEPARTMENT OF ADULT EDUCATION (National Education Association NATIONAL RECREATION ASSOCIATION U.S. BUREAU OF PUBLIC ROADS U. S. CONFERENCE OF MAYORS EARL D. MALLERY FRED K. HORHLER Manager Washington Office Director GABRIEL C. HARMAN WILLIAM R. ENYART Miss MAUDE Arron Secretary President (1938) THOMAS E. RIVERS H. S. FAIRBANKS PAUL V. BETTERS ROSCOE WRIGHT WORKS PROGRESS ADMINISTRATION Principal Highway Engineer Executive Director Director Information Service 9 SUMMATION OF 7,737 COMMUNITY SURVEYS FOR THE NATIONAL APPRAISAL (PREPARED BY STAFF) PHYSICAL ACCOMPLISHMENT PERCENT 60 50 T 10 70 80 T 40 T 20 30 90 100 T 0 WERE THE IMPROVEMENTS AND SERVICES BADLY NEEDED ? WERE THEY OF BENEFIT TO THE COMMUNITY ? 0 WHAT HAS BEEN THE QUALITY OF WORKMANSHIP ? ARE THE PUBLIC FACILITIES UNDER THE WORKS PROGRAM OF PERMANENT VALUE ? * WHAT HAS BEEN THE EFFECT OF THE WORKS PROGRAM ON THE FISCAL CONDITION OF GOVERNMENTAL SUB-DIVISIONS ? HAS WORK RELIEF ADVANCED THE COMMUNITY IMPROVEMENT PROGRAM ? IS WORK RELIEF BETTER THAN THE DOLE FOR THE COMMUNITY ? AFFIRMATIVE QUALIFIED QUALIFIED AFFIRMATIVE NEGATIVE NEGATIVE Physical accomplishments in the WPA work program include public buildings, highways, roads, streets and related facilities, airports and airway equipment, recreational facilities, water supply, sanitation and drainage systems, flood and erosion control, electric and communication utilities, grounds improvement, conservation activities and other tangible items grouped in the construction activities as weighed in the nation-wide survey made in the United States Community Improvement Appraisal. . In the case of this question, "affirmative" is to be regarded as meaning "good"; "qualified affirmative," "fairly good"; "qualified negative," "rather poor," and "negative," "poor." 13 HUMAN ACCOMPLISHMENT PERCENT 10 20 30 40 60 50 70 80 90 0 100 r HAVE THE PROGRAMS COVERED THE FIELD OF THE NEEDY EMPLOYABLES ? HAS WORK RELIEF MAINTAINED THE SKILLS OF THE PROJECT WORKERS ? HAS WORK RELIEF MAINTAINED THE EMPLOYABILITY OF THE PROJECT WORKERS ? IS WORK RELIEF BETTER THAN THE DOLE FOR THE EMPLOYABLE UNEMPLOYED ? * WHAT HAS BEEN THE QUALITY OF THE ADMINISTRATION OF THE PROGRAM ? HAVE THE EDUCATIONAL ACTIVITIES BEEN WORTHWHILE ? HAVE THE PUBLIC HEALTH ACTIVITIES BEEN WORTHWHILE ? HAVE THE REGREATIONAL ACTIVITIES BEEN WORTHWHILE ? HAVE THE OTHER NON-CONSTRUCTION ACTIVITIES BEEN WORTHWHILE? AFFIRMATIVE QUALIFIED QUALIFIED AFFIRMATIVE NEGATIVE NEGATIVE Human accomplishments include the more intangible values developed or utilized by the non-construction activities of the WPA work program particularly in the field of education, public health and recreation and including sewing activities, school lunches, medical, dental and the nursing care, art, library, historical projects and the like. Among these considerations was question of how well human needs were met and the quality of the administration as Appraisal weighed in the nation-wide survey made in the United States Community Improvement "fairly In the case of this question, "affirmative" is to be regarded meaning "good"; "qualified affirmative." good"; "qualified negative," "rather poor," and "negative," as "poor." 14 CONSENSUS OF OPINIONS RECEIVED ON EACH QUESTION (By Percentage of Total) (For Complete Tabulation See Supplement) Tyne of Answer The Questions Afirma. tive or Favorable Qualified Negative Afirma. Qualified five Negative or Unfav. orable 93.7 5.7 0.4 0.2 96.8 2.2 0.6 0.4 48.7 39.1 7.4 4.8 4. Has Work Relief Maintained the Skills of the Project 82.3 11.8 2.9 3.0 5. Has Work Relief Maintained the Employability of the 88.3 12.1 3.6 4.0 84.6 12.3 1.9 1.2 90.0 8.5 0.8 0.7 95.6 2.5 1.2 0.7 95.3 3.0 1.1 0.6 91.1 4.0 3.4 1.5 95.9 2.7 0.8 0.6 78.7 14.7 4.3 2.3 73.7 19.6 23 4.4 14. Has Work Relief Advanced the Community Improvement 95.2 3.2 0.6 1.0 Is Work Relief Better than the Dole for the Employable 92.3 5.9 0.6 1.2 92.5 5.6 0.6 1.3 74.7 15.6 7.1 2.6 1. Were the Improvements and Services Badly Needed? 2. Were They of Benefit to the Community? 3. Have the Programs Covered the Field of the Needy Employables? Workers? Project Worker? What has been the Quality of Workmanship? 7. Are the Public Facilities Under the Works Program of Per- 6 manent Value? Have the Education Activities Been Worthwhile? 8. 9. Have the Public Health Activities Been Worthwhile? 10. Have the Recreation Activities Been Worthwhile? 11. Have Non-construction Activities Other than Education, Public Health, Recreation Been Worthwhile? What has Been the Effect of the Works Program on the 12. Fiscal Condition of Governmental Subdivisions 13 Has the Program Developed Long Range Community Planning? Program? 15. Unemployed 16. Is Work Relief Better than the Dole for the Community? 17. What has been the Quality of the Administration of the Program? TOTAL NUMBER OF OPINIONS RECEIVED ON EACH QUESTION (For Complete Tabulation See Supplement) The Answers The Questions Afirma- Qualified Neoative or Unfas- Favorable five Negative orable 6527 396 26 16 7134 167 42 28 3. Have the Programs Covered the Field of the Needy Em- 2368 1902 359 232 4. Has Work Relief Maintained the Skills of the Project 2960 424 103 107 2952 446 131 148 5100 744 116 73 5755 545 Afirmafive 1. Were the Improvements and Services Badly Needed? 2. Were They of Benefit to the Community? Qualified ployables? Workers? Project Workers? 6. What has been the Quality of Workmanship? Are the Public Facilities Under the Works Program of Per7. manent Value? 8. Have the Education Activities Been Worthwhile? 9. Have the Public Health Activities Been Worthwhile? 10. Have the Recreation Activities Been Worthwhile? 11. Have Non-construction Activities Other Than Education, Public Health, Recreation Been Worthwhile? What Has Been the Effect of the Works Program on the Fiscal Condition of Governmental Subdivisions? Has the Program Developed Long Range Community Plan12 13. 1670 43 1085 34 1098 48 3508 100 2227 416 1595 50 16 13 21 7 Has Work Relief Maintained the Employability of the 5. 13 18 41 30 22 122 65 425 49 95 178 35 58 5344 4519 290 31 4561 278 32 3175 660 ning? 14. Has Work Relief Advanced the Community Improvement Program? 15. Is Work Relief Better than the Dole for the Employable Unemployed? Is Work Relief Better than the Dole for the Community? 17. What has been the Quality of the Administration of the 59 62 16 Program? 15 301 112 TYPES OF OFFICIALS REPORTING IN COMMUNITY APPRAISAL MUNICIPALITIES IN COMMUNITY APPRAISAL By size of population 100,000 and over 25,000 to 100,000 All other 1.125 Municipal State 425 3,723 2,500 to 25,000 Under 2,500 County 1,977 This chart is based on answers to question 3: Coverage of need SURVEYS APPRAISALS GROUPED ACCORDINGMADE TO TYPES OF COMMUNITIES AND PERSONS WHO Of the 7,737 surveys analyzed, 3,723 were made by municipal officials, 1,977 were received from county officials of whom the bulk were from rural areas, 1,125 were from business, fessional men and women and farmers; the balance were from state and school officials pro- and 171. slightly over 2 per cent, were from officials connected with the WPA. Municipal Officials Places Under 2,500 Population 3,723 2,102 1,201 Small cities, 2,500 to 25,000 Middle-sized cities, 25,000 to 100,000 Larger cities, 100,000 and Over County Officials 266 154 1,977 1,050 Counties (with no town of more than 2,500) Counties (with one or more cities of 2,500 to 25,000) Counties (with one or more cities of 25,000) 730 197 425 State Officials* School Officials* WPA Officials All otherst 316 171 1,125 BIG CITIES IN RELATION TO SMALL CITIES IN REPLYING TO THE QUESTION OF "NEED" When the appraisal returns from the larger cities are contrasted with the nation as a whole a significant change occurs in relation to the question of whether the WPA programs have covered the field of the needy employables. If each municipal group is weighted according to size, a metropolis is about 3,000 times larger than the smallest city class, the total affirm- ative opinion is 341/2 per cent instead of the simple average of 48 per cent shown on the chart on page 14. The larger the city the less is the evidence that the need of all the employables was met. "HAVE THE WPA PROGRAMS COVERED THE FIELD OF THE NEEDY EMPLOYABLES?" (Replies to this question on a weighted basis) Weight based on Number of answers relative with from each answers city group (1 x 2) affirmative Aggregate (3) (4) (5) population comment (2) (1) 10 861 1,478 8,610 50 153 7,650 77 30,800 1 Municipal Population Under 2,500 2,500 to 25,000 25,000 to 100,000 100,000 to 1,000,000 Over 1,000,000 Relative importance 1,478 400 3,000 2 2,571 Total Per cent 49% 52% 48% 321/2% 6,000 0% 54,538 34% (3 4) 724.22 4,477.20 3,672.00 10,010.00 0.00 18,883.42 (weighted) Out of the total of 4,861 returns on the question 2,571 replies were received from municipal agents and 2,290 from county representatives and others. (Tabulation from Research Supplement.) By State and school officials in these categories are meant presidents, deans or others connected with universities or colleges. The state school superintendent is classed as a state official, the county school superintendent as a county official, a city school superintendent as a municipal official. All others include business men, farmers, doctors, lawyers and leaders in men's and women's civic organizations, 17 FAULTS AND VIRTUES AS SUMMARIZED FROM LOCAL AND STATE APPRAISALS; WITH OPINIONS AS TO THE FUTURE PROGRAM The local community appraisals find specific faults and propose various remedies and changes in WPA practices, and are generally in agreement in praising certain aspects and Faults of the WPA Works Program The faults found in the work program fall into five major groups. The remedies suggested in the appraisals are included in this results of its work in their communities. summary. There is not the same general agreement upon faults and remedies as upon good results, but Insufficient Coverage of Employment Needs the two groups of opinion can be listed as The questions asked were: "Have the pro- follows: grams covered the field of needy employables? If not, how far have they failed?' Major Faults: The answers to the first question ranged from An insufficient coverage of the unemploy- "yes" to "no," with many qualifications in between, such as "fairly satisfactory" and ment needs of a. White collar workers b. Single men and women c. Skilled workers and others in need "covered the cases of worst need." The specific citations of failure of coverage referred chiefly to (a) white-collar workers for whom there Red tape and limitations with the result that were insufficient projects in some large com- munities, and no projects at all in some a. Small communities lack technical aid b. Winter labor surplus forces an overload of men on projects e. Small communities lack construction smaller communities (b) single men and women excluded by quota restrictions, and (c) skilled workers and others in need but not on the relief rolls. In part the failure of coverage is due to funds d. Workers are afraid to quit WPA for fear they cannot return insufficiency of Federal funds, in part to insufficiency of local funds, in part to the WPA restriction of jobs to those on the e. Local sponsors are reluctant to discharge negligent project workers for this swells their direct relief cost Uncertainty of the program and the inability to plan ahead. relief rolls instead of to all the really needy unemployed There is a widespread opinion that public work should be open to more nonrelief workers. More on these points will be found in the discussion below. Satisfactory Results: Red Tape Valuable and lasting community improvements otherwise unobtainable a. Physical accomplishments b. White collar accomplishments Good workmanship This includes a variety of objections. (a) Small communities appear very widely to lack the services of people technically Poor supervision Short hours of project workers expert enough to fill out applications for WPA projects in proper form, particularly with regard to estimates The applications are returned to them by the district WPA General benefits of work relief as compared to direct relief. office for revision, and sometimes have to be Some discussion of these points is required to make their meaning clear. done over "as many as ten times." Mean18 while. the community is supporting a group of able-bodied unemployed on direct relief for weeks or months, and no work is done on the proposed project. (b) The expansion of WPA employment to correspond with the diminution of private employment often means more WPA jobs in winter: in all Northern States with severe winters, roadwork and similar outdoor work is impracticable during severe winter weather; but in many small communities, road projects and drainage projects may be the only WPA projects there are. At best, the work is interrupted and slow and the costs higher than they should be. These small communities report that they need new schools or other construction work suitable for winter employment, but that they have not enough skilled labor on the relief rolls and cannot afford to hire it from local funds, They want a somewhat more liberal on the WPA at all, or will get back only after weeks of delay and a period of being on direct relief. The arrangements the WPA has made to ensure and facilitate such return are still considered insufficient; any actual delay at all is regarded as a needless injury to both the worker and the community, as a severe discouragement to the workers in taking temporary private employment, and as a serious grievance of farmers and others who need temporary help. The fact that there are two organizations which have to cooperate, the local direct relief agency and the WPA, is sometimes regarded as responsible for the delays. Nothing less than a smoothly funetioning automatic process of return to WPA work after temporary private employment will meet these demands, and anything else will be regarded as unnecessary bureaueratic red tape. (e) There appear to be, or to have been, wide local discrepancies in the authority of sponsors in securing efficiency of work on proportion of WPA funds to be used for non-relief skilled labor, which they assert would prevent inefficiency and waste due to projects. Some inefficiency is blamed on local sponsors, some on WPA regulations, weather conditions. In lieu of that, they want local authority to use WPA labor for some on the supervisors. other civic purposes (including maintenance work) in bad weather. In particular there appear to have been periods in which local sponsors could not or did not for some time exert their authority in getting inefficient workers dismissed from The suggestion is also sometimes made that WPA workers should be given full-time employment in summer and part of their projects. This is apparently due in part, wages held over and paid to them in winter however, to local reluctance to support a dismissed worker on direct relief, in part to the lack of other more suitable projects to which the worker might be transferred, and in part to inexperience in local adjustment to a com- when work is impracticable. (e) Small communities feel widely unable to raise money for the construction projects of which they feel most in need. They want a somewhat more liberal proportion of WPA funds to be used for materials, equipment plex arrangement. Most of these complaints refer to the past, and are absent in the reports of larger com- and non-relief skilled labor. The kind of projects they can afford to sponsor do not increase property values and prospects of greater future tax returns as much as the projects which they cannot get approved. They keep on applying for the projects they need and want, and keep on resenting their munities with a varied work program and fuller experience in administration Poor Supervision Most of these complaints come from small communities, and are often explained as due to the inability of the community to hire good rejection. (d) Workers are said to be afraid to leave WPA jobs for temporary private employment. either for fear they will not get back supervisors. A flood of opinion reiterates that the degree of efficiency on a project is 19 due to the quality of supervision. Many of the comments on poor supervision refer to It is also strongly felt that a discrimination should be made between the more and the less efficient WPA workers, and that the more efficient ones should get better pay All the peculiar characteristics that separate WPA work from other work are subject to criticism in these local reports, with short hours heading the list of objectionable characteristics past conditions, now said to have been greatly improved. The remark is frequently made that the workers on the project are themselves appreciative of good supervision and disgusted with poor supervision which lessens their efficiency. The only opinions to the contrary are a few which suggest that in particular places the most efficient workers Uncertainty and Inability to Plan Ahead gress has adopted the "prevailing wage" per hour for WPA work, while the WPA at the This is due to the fact that WPA employ. ment must increase and decrease to meet shifting needs. There is not much planning among American communities, though there is an increasing recognition of the need for planning. At best, WPA work can be well fitted into community planning, though it must almost inevitably carry some parts of the community plan far ahead while leaving other parts undeveloped. It is the communities that have had DO plans of their own, and now must begin to plan, that most keenly feel the uncertainty involved in the WPA program. It is because same time has to maintain a maximum monthly wage lower than that of private they are so dependent on WPA plans, because WPA plans are the only plans these commu- have been placed in private jobs and that the proportion of inefficient workers is too high to be counterbalanced by good supervision. In general, wherever the quality of super- vision is described as high, the results of WPA labor are confidently compared with those in private industry. Short Hours of Project Workers The short hours of some workers, mainly the skilled, result from the fact that Con- industry. Therefore instead of being available for a full week these workers can put in a total number of hours, amounting in various instances to three, four or five days, nities have, that they ask it to be something limited by the maximum monthly pay community needs for facilities will be the decisive consideration. Such a program would provide certain civically needed im- that it isn't-a far-reaching, highly coordinated method of providing communities with needed improvements, a program in which allowed. To make a standard week the work hours can be shared by several skilled men if they are available provements that cannot be provided by projects which must first be fitted to local unemployment needs. It comes down again to a question of local There is difficulty on some projects on account of the limited hours in getting the work done properly, though this difficulty can be in part at least overcome by skillful funds, which are said to be insufficient in small communities to carry out some of the most highly needed kind of civic improvement even with WPA assistance. There are in this connection some occasional references to the CWA program, which took half of its management. But the psychological effect is said to be bad on the workers, and is evidently bad on many observers. Two groups of observers in particular resent these short hours-the unemployed workers not on relief, and the farmers in all rural communities The latter are frequently reported as being unwilling to vote for county expenditures for workers from outside the relief rolls. This or some other arrangement which would permit more use of Federal funds for the employment of non-relief skilled workers, as well as WPA projects because of their resentment at for materials and equipment, is what many small communities desire under the head of the short hours of WPA workers. A great many of these local reports recommend regular hours for WPA work. good planning. 20 crease the benefits. Many of the reports describe past conditions of neglect of important civic facilities, and of community discouragement, concluding with the statement that the town is now a much better place to live in as a result of what has been done on work-relief projects. Valuable and Lasting Community Improvements Such statements, made by public officials who criticize freely and vigorously various aspects Satisfactory Results of the Works Program The results found to be satisfactory are grouped under three general headings with references to possible reform that will in- of the work-relief program, are impressive. There are statements praising projects initiated under previous administrations, and by These reports, however critical in other respects, are almost unanimous in asserting that their chief WPA projects have resulted in valuable and lasting community improvement otherwise unobtainable at the present time. There is frequent expressed repudiation of the idea that any local projects have various county or State agencies whose super- vision is adversely criticized The need for the projects, their worthiness and their lasting character are almost universally asserted. been in the nature of "boon-doggling" or "leaf-raking" projects. Larger Cities Favor Most "White-Collar" Projects (a) Physical accomplishments are more widely reported and commented upon with more complete agreement as to their value and usefulness than white-collar projects. The tone of the commentary varies quite (b) The larger cities report favorably on white-collar projects of practically every kind (education-literacy classes, vocational training, etc.; public health projects-clinics, immunization, nursing, public school hygiene, regularly with the nature of the projects. survey and research, etc.; library and muThus such projects as those for the construcseum projects; service projects - school tion of schools and community centers, the lunches, sewing rooms, housekeeping aids, building of farm-to-market roads, drainage handicraft, gardening, canning, etc.; recreaof malarial swamps, and the laying of sewers tion; cultural projects-art, music, writers, and water mains, are written about warmly, theatre, historical records, etc.; public administration projects-tax delinquency surveys, whether by engineers or other city officials, in real property appraisals, engineering surveys, a tone of pride mingled with gratitude which traffic surveys, etc. The smaller communities scarcely varies from one county or town or have few such projects, and often none. State to the next. A citation of such passages from these reports would sound like a paean of praise. Small Cities Favor Some "White-Collar" Projects Various other construction projects, such as are less vitally needed, or less eagerly desired by the whole community, are described with more restraint, though almost invariably with satisfaction in the accomplishment. Progress The white-collar projects most often referred to in the reports of small communities are the education and recreation projects, both of them generally with commendation, but occasionally with adverse criticism or with skepticism as to their value. Certain of in providing various civic facilities is said to the education projects would appear to have become quite firmly established as adjuncts to the school system. The tenure of recreation projects would appear to be more uncertain in small communities, for they are sometimes referred to as having been given up; the cause assigned for these instances is poor supervision. The view, however, that recrea- have been advanced five, ten or twenty years in many communities. The proportion of the population said to benefit from these improvements is usually large, sometimes "the whole population." These improvements, it is generally said, could not have been carried out at all at the present time without the help of the government. 21 results, supervisors and workers are needed who will stick with the job long enough to see it through-and hence we often find sponsors very regretful of the fact that these projects are not on a more stable basis, tion projects are greatly needed is widely expressed in the reports of small communities. Communities Can Absorb Certain "White-Collar" Projects In the original questionnaire, the questions There is a discrepancy between the public service and the private re-employment purposes of the program, which can only at present be solved by setting up regular municipal or county agencies to do the work- solution were asked: "Have any of these services been absorbed into the permanent government structure? Which do you deem of sufficient community value to continue locally if funds were available?" Individual education and recreation project workers have to some which is asserted by many sponsors to be impossible because of lack of funds, extent been "absorbed" or taken over by existing local governmental agencies, and this is also true in particular instances of other white-collar workers. Education and NYA Is Regarded Highly Under the heading of service projects there is much mention in the reports of the recreation projects and school lunches rank work done by high school and college students high among the projects named as those which are deemed of sufficient community value to continue locally if funds are avail- in return for NYA wages which enable them to continue schooling. This arrangement is reported almost invariably in terms of high praise, and sometimes with accompanying testimonials as to the need, character and scholarship of the young people given such assistance; higher than average school work able. For the success of many such projects, active and responsible local sponsorship or cosponsorship and expert supervision appear to be the determining factors. Where these fac- on the part of NYA students is frequently reported. The NYA is regarded as of great tors are present, large sections of the community give enthusiastic assistance and high value in small as well as in large communities. efficiency is secured. A definite impression is gained from occasional reports that local governmental sponsorship of such projects is sometimes halfhearted, and wholly neglectful of its administrative responsibilities, because local officials Good Workmanship regard the projects as unnecessary or workers are inefficient The judgment of "made" work, and that the results are cor- "good workmanship" is shown by its contexts respondingly bad. to have several different meanings. Some- When projects are successful, so much so that the communities would take them over times it means that the final results are good, if they could afford to do so, attention is should have done. Again it means that excellent supervision is getting the best possible work out of workers who varied in their skill. And sometimes it expressly means that the Good workmanship on WPA construction and other projects is so frequently asserted as to appear somewhat surprising, in view of the rather frequent assertions that some of the although the work went more slowly than it drawn to the good work of some of the best project workers, particularly the supervisors, with the result that these are enabled to secure regular employment with private WPA workers are just as good workers as employers or agencies doing similar work. Although one purpose of the program (that those to be found anywhere. There are many judgments expressed on the capacity of WPA of effecting private re-employment) has been served, the other purpose of this part of the workers both in general and in particular jobs-all of which amount to this, that some are very good, some only fairly good, and program (as a "demonstration program") is correspondingly impaired. To get the best some no good. 22 When by "workmanship" is meant not the final result but the comparative efficiency of WPA workers, the judgment "fairly satisfactory" is perhaps more frequent than either "poor" or "good." In the opinions of some observers, the skilled older men who cannot get factory jobs are of great value in teaching younger unskilled or wholly untrained workers, But in the view of other observers the slowness of the older men holds down the pace of the crew. Many reports speak of workers trained to new trades which enable them to get private employment (for example, as stone masons and cement workers). Sometimes the necessity for training men on the job is deplored as creating delay and increasing the costs of the project; while again such training is regarded as an asset to the community that is unanimously to the effect that work relief is highly preferable with regard to its effects on both the community and the worker. The benefits to the community from WPA projects and the maintenance of the self-respect of the worker were the chief reasons given for preferring work relief. These answers were almost invariably the same in reports which were critical of the WPA as in other reports which expressed general commendation of the WPA. Federal or State-Controlled Work Programs On the preference for a Federal financed and controlled work program or a State con- trolled work program the State Appraisal Committees which expressed opinions favored overwhelmingly the present methods of oper- ation. Twenty State Committees strongly favor the continuation of the WPA. Two State Committees suggested that a wider latitude be given to the states in the selection of well worth the extra costs. Many reports speak of a certain proportion of workers as too shiftless for useful employment, and as imbued with the idea that the government owes them a living without any corresponding idea that they owe the government honest work projects and in their administration to reduce delay. Two State Committees expressed themselves in favor of a State-controlled program. Twenty apparently accepted the principle of Federal control without par- work in return. ticular comment, Many other reports assert that when there The twenty State Committees outspokenly in favor of the WPA or some similar form of is plenty of material and equipment on a project there is never any trouble about work- Federal control are: ers keeping busy-that it is lack of proper California working facilities that creates loafing in practically every case. general benefits of work relief as compared Colorado Massachusetts Minnesota Montana Nevada with direct relief. First, what part of the New Jersey unemployed should be provided for by direct and what part by work relief. Almost unanimously the reports declared that direct relief should be restricted to the aged, the sick and the physically handicapped, and that all the able-bodied unemployed should be provided for by work relief. New York North Carolina North Dakota Work-Relief Compared With "Dole" Three questions were asked to ascertain the Oklahoma Oregon Rhode Island South Carolina Tennessee Texas Utah Virginia Washington West Virginia The two State reports that favored State control are: Iowa Kansas The second and third questions asked whether direct or work relief was preferable The outstanding replies received on this in its effect on the community and on the issue follow: worker Again the answers were almost 23 NEVADA In Favor of Federal Program "Resolved: That the Nevada State Appraisal CALIFORNIA (Northern) Committee does unqualifiedly endorse the various Federal work programs as conducted in "The most obvious characteristic of the community reports is their virtually unanimous en- and urge of a work the does the continuance of Nevada, program dorsement, regardless of political differences, of the Federal Government's work-relief program." as proper means taking care of the unem. ployed." NEW JERSEY COLORADO "After an impartial digest of these appraisals "The weight of the evidence shows that WPA your committee gives its whole-hearted approval to a continuation of a work-relief program as the best available means of meeting the unemployment situ- and other Federally-induced employment must com- ation, both from the standpoint of work accom- NEW YORK STATE tinue if fiscal disaster is to be averted in many New Jersey municipalities." plished and the benefits to the unemployed." The committee then set forth a list of specific Forty-eight mayors, county, town, village and state officials favored continuation of the Federal Works Program: five preferred the PWA contract method in preference to WPA: five favored the TERA method and two favored control by local recommendations in which the attitude was one of continued acceptance of the principle of Federal control of the work-relief program of the future. sponsors. MASSACHUSETTS NORTH CAROLINA "Unemployment was a problem too big for the individual community and even for the State. Granted that there may have been defects in the system, particularly in the earlier programs, the end has justified the means With the experience of the past, it should be possible to continue the "The Works Progress Administration programs meet the requirements of work-relief; that praise is due the WPA officials for the efficient operation of that organization; that the program and the ability of workers have improved." work on a basis more nearly approximating its maximum benefits, both to the community and to its citizens Decentralize as much as possible NORTH DAKOTA "Of all the reports filed (297) only three criticized Federal aid and disapproved of it." the control of projects giving to those local authorities who demonstrate ability complete authority to administer projects subject to check and audit." OKLAHOMA "Oklahoma's Committee, reporting on the basis of 564 returns from counties, cities and school distriets, recommends that the Works Progress Administration be made à permanent governmental function Oklahoma is convinced that the present Works Progress Administration operates under the most effective and the most constructive method of administering relief to the needy of this MINNESOTA "This Committee definitely recommends the establishment of a permanent agency in the Federal Gov- ernment so organized as to be capable of quick expansion and contraction as the nation's unemploy- ment situation may require. Such agency should be Federally financed and Federally supervised and so administered and operated as to use efficiently labor that is provided." State." OREGON MONTANA "While there is abundant evidence that projects have been carried on under Federal supervision and good results obtained there remains a definite prob- "After 3 thorough study of the situation the committee recognizes that one of the most serious defects of the work program is that it has been inadequate and that many needing employment have not been able to secure it. For these reasons the committee most urgently recommends the appropriation of sufficient funds by the Congress to make it possible more adequately to meet the unemploy- lem of administration The question also may involve consideration of the making available of Federal money to local agencies for complete local administration The evidence at hand shows that the experience (WPA) has been beneficial to the governing bodies, and to their people, and that the basic principle of work, for those capable of doing work, is the best suited to the maintenance of self-esteem, regard for citizenship, and respect for organized government." ment situation "Do the boards of county commissioners, city officials, and other sponsors desire the program to continue?" "Yes, without any question." 24 RHODE ISLAND "The majority of those reporting are in favor of a continuation of Federal administration of relief. Of those who commented, only one believed that local administration would be preferable." SOUTH CAROLINA "The unification of all forms of relief under a single head in Washington with Federal agents in each state and in each subdivision of the work would go far toward the elimination of overlapping and of waste, and would tighten the control necessary in order eventually to bring the program as 3 whole to a close." judgment probably will be necessary as long as there is a relief problem." WASHINGTON "The criterion of the success of the Federal Works Program in Washington is the lack of organized opposition to it It is significant that this entire program so met with the of the ofpeople Washington thatthe approval earlier has thoroughly even sporadic attempts at criticism have been quelled." WEST VIRGINIA "That so long as the need exists a Federal work program, in cooperation with state and local political units. be maintained." NEW YORK CITY TENNESSEE "Our study of the reports of the various county judges, and the mayors of many of the cities of Tennessee, convinces us that the work of the Works Progress Administration has developed into a well- planned and coordinated program for the betterment of social, economic and health standards of living in our State." TEXAS "We, your Committee, believe a program, the "I do not know what we should have done without it. The program (WPA) justifies itself." F. H. LaGuardia, Mayor. "So long as there is a work-relief program supported by the Federal Government that program should be wide enough to give employment to all needy employables, leaving to the local Government the care of those who are unable to work by reason Workof age or physical or mental disability relief should continue until some satisfactory adjustment can be made to meet the technological advances, the industrial changes and the social upsets that have contributed to the general disturbance of our community relationships in recent years."-COMMITTEE REPORT same or similar designed as the present Works Pro- gram is the most effective and efficient way of meeting the relief needs from the standpoint of the workers themselves and the sponsoring agencies." In Favor of State Program UTAH IOWA "It is recommended that a determined effort be made to return the responsibility for the relief of unemployed to local communities and that Federal Works Programs be kept on a temporary basis while every inducement possible be used to encourage private enterprise to do the work now While being done by relief project methods this Committee does not favor a return to direct relief methods for those who are able to work. it recognizes a limitation on ability to continue paying for work relief and urges a reduction and grad- In conclusion, the undersigned unanimously believe that there can be little question of the general soundness and efficiency of the Federal work-relief program as it has been adapted to Utah. The committee heartily recommends the continuance. It is further suggested that the states be allowed greater latitude in the selection of work projects and in their administration so that unnecessary delay and red tape be reduced to an absolute minimum." ual elimination of this type of work before that VIRGINIA limitation is reached." "The quality of the projects and the increased voluntary activities of the public bodies in the KANSAS planning and operation of projects of their choosing "There is a clear and strong opinion in Kansas for coordinated state and local responsibility for all indicate that the Works Program is headed in the right direction and the combined efforts of Federal and local government will continually improve the prosecution of a work-relief program. with grants of Federal funds to be used locally under the quality of the program Some program of certain general rules. This program, it is believed is more effective for both the taxpayers and the the nature of the WPA was necessary in order to take care of them (men and women out of employment. particularly unskilled workers) and in our relief clients." 25 EXCERPTS FROM STATE APPRAISAL REPORTS THAT EXPRESS MAJORITY AND VARYING VIEWS ON EACH MAJOR QUESTION ASKED WERE THE IMPROVEMENTS OR SERV. ICES PROVIDED UNDER THE WORKS PROGRAM BADLY NEEDED AND OF BENEFIT TO THE COMMUNITIES? covered the field of needy employables in this cost- munity. The main reason for this failure has been in to move fast ability the seasonal of the peaks taking relief of agencies unemployment of and the enough to come near care those peaks."-CALL FORNIA "That the permanent facilities provided have been urgently needed is beyond question. Most of the reports stress this point with much emphasis, "The primary problem in the whole situation seems to be the inability of sponsors to raise funds properly to finance the communities' share of proj- and relate in detail the nature of the improvements, embracing many miles of improved county roads, oil-paved streets, curb and gutter. sidewalks new and improved facilities for water supply and sewage disposal, as well as numerous additions to public schools, improved park and playgrounds facili- ects sufficient to keep their certified workers em- ployed."-KENTUCKY "From the information contained in the reports of the various municipalities it is to be assumed that the Federal works programs of the past few years have fairly well covered the field of needy employables. There have. of course, been certain exceptions to this. due chiefly to one or more of the following causes: (1) The quota of workers allotted the State has at times been inadequate to take care of all needy employables (2) Certain of the poorer communities have frequently found ties, airports; not to mention many new public structures such as town halls, gymnasiums, municipal buildings, libraries, court houses and jails."- COLORADO "The works discussed by mayors and county officials have been principally construction projects, and in nearly every case these officials have stated that the work was of a permanent nature and badly needed."--INDIANA themselves unable to finance the required sponsor's share of the costs of projects. (3) The present method of certifying workers has made it in "The need for these facilities was urgent and possible for project quotas to be kept filled at all times."-MAINE pressing as in many of the cities and villages such facilities were entirely lacking or served inadequately. There exist today in towns, villages cities "The appraisals in regard to the coverage of the field of needy employables are somewhat inconsistent. In seventy per cent of the communities the field was covered Twenty-one per cent aver that all needy employables were not covered The fail ure to cover fully the field of needy employable was due chiefly to lack of funds for materials of supervision Other reasons noted are quota restrictions, improper registration, and inadequate pro- and counties, services and improvements which were not existent five years -MICHIGAN "Without exception the counties state that such facilities were needed, and that in most cases they either were not available previously. or that the type of facility available was now inadequate or unsatisfactory for the use for which it was originally built. This is particularly true of school improvenent."-MINNESOTA. vision for young men and girls, aliens, women. white- collar workers and the partially handicapped."MICHIGAN "Both county and city sponsors are pretty gen- HAVE THE WORK PROGRAMS COV. erally agreed that the State WPA program has COTered the field of needy employables. There are two ERED THE FIELD OF NEEDY EM- PLOYABLES? classes that definitely have shown inadequacy of proj- eets. White-collar workers and women have never been 100 per cent employed due to lack of suitable projeets."-NEBRASKA. "To say that the programs have amply covered the field of needy employables would be superoptimism."-ARKANSAS "The work-relief program in New York City has "In the majority of cases, community reports never covered the field of needy employables There which deal with this question indicate that the Fed- have always been on the home relief rolls thousands eral Works Programs have provided adequate cover- of persons able and willing to work but for whom no opportunity was offered through the Works Pro- age of the fields of needy employables." (A minority opinion follows. "The Works Program has NOT gram."-NEW YORK CITY. 26 "From the answers to the various questions, the Committee is of the opinion that the Works Progress Administration has ably taken care of the unemployment situation in New York State."-NEW YORK STATE "The needs of the unemployed have been covered at least sufficiently to prevent pronounced suffering."-IDAHO. "From the returns received to date it would appear that the projects initiated have been reasonably adequate to cover the work-relief needs of the different communities, particularly so far as emergeney conditions existed."-MASSACHUSETTS "With remarkable unanimity, the individual appraisals indicate a satisfactory coverage of need within the limits of funds available, although there is some criticism due to: (1) Allotment limitations of Congressional appropriations and (2) inability of some communities to meet sponsors' contribution requirements with respect to the smaller amounts required under WPA or the larger sums under PWA.' -MINNESOTA. HAS WORK-RELIEF MAINTAINED THE SKILLS AND EMPLOYABILITY OF THE PROJECT WORKERS? "In nearly all cases the evidence indicates that the Works Program has helped to keep relief workers fit for private jobs. In many cases the program has developed skills which make workers even better fitted for private employment than they were CALIFORNIA "Opinions seem to be equally divided on this subject."-INDIANA "The surveys show that in general workers have on the WPA rolls can be definitely prepared for jobs in industry and commerce. -VIRGINIA "New skills have been learned and many people have been returned to private employment."WEST VIRGINIA WHAT HAS BEEN THE QUALITY OF THE WORKMANSHIP? "The quality of the workmanship, in virtually all itself. to work- cases evaluation is based work where is found the compare favorably on with the manship in private industry."-CALIFORNIA "Practically all the local branches of government agree that the quality of the workmanship is satis- factory. Some go so far as to say that it 'compares favorably with the quality under private contract.' "-COLORADO "There is definite improvement both in the efficiency of the work done and in the morale of the people engaged in the projects."-DELAWARE "The quality of workmanship the cost of the completed project, and the manner in which accomplished compares favorably with like work under private enterprise."-FLORIDA. "It is the opinion of the governmental officials of this State that the quality of workmanship in the many projects is, on the whole, as good as that under private construction.' -INDIANA "Generally speaking, the quality of the work has been good. Wherever there has been a lack of quality. this apparently has been due to lack of proper supervision."-MARYLAND. "For the most part the communities appear to be well satisfied with the quality of workmanship."MASSACHUSETTS. kept fitted for private jobs and that many have improved their kills."-NEBRASKA. "Purely on the basis of the work itself, the quality of the workmanship is evaluated as good in 61 percent of the communities, as average in 33 communi- "The reports of the sponsors refer particularly to the improved morale of the majority of the relief ties, and as poor in 6 rent."-MICHIGAN workers, and many specific instances are shown in reports of personal cases of ambitious workers learning various skilled trades such as masons, carpenters, electricians, blacksmiths, etc., which have led to their being absorbed by private industry in posi- "As to the quality of the workmanship, there in little question. PWA work was executed under contract. The quality of WPA work has been uniformly as high as that done under contract."-NEW YORK CITY. tions with a permanent future."-NEW HAMPSHIRE ARE THE PUBLIC FACILITIES CON. "The same percentage (90 percent of those who expressed an opinion) answered in the same way (in effect 'yes') in reference to the statement that work-relief keeps the destitute unemployed fit and STRUCTED UNDER THE WORKS PRO. GRAM OF PERMANENT VALUE? from the various municipalities alindicate maintains their employability." - NEW YORK most "The without reports exception that the projects STATE have been 'worthwhile' and productive of permanent improvements.' -MAINE "If anyone doubts the value of WPA work to the "Your Committee feels very definitely that the weak point in the Program. especially for men. is that not enough training is provided so that those 27 City of New York in terms of permanent improve- centers."-KENTUCKY is chiefly rendered and best provided in the large buildings, parks mentsto has to only streets, almost and playgrounds, he open his eyes in anypartof "This committee makes the observation that in the city and behold a vision of transformed faciiities."-NEW YORK CITY. its long-term aspect, the public in general does not "Through the construction of farm-to-market roads many sections of the rural areas have been made accessible at all seasons of the year. Accessibility of these rural areas is of the utmost importance. There have been other improvements of a definite and permanent value. Public buildings (have been) built and modernized, sewer and water systems and reservoirs constructed, hospitals erected, playgrounds and airports developed. Swimming pools, filtration plants, sewage and water disposal plants, stadiums and similar projects have all contributed to the per- manent benefit of the communities."-MASSA fully appreciate either the importance of this work (non-construction projects) or the number of relief clients whose capacity is limited to such endeavors The committee is impressed with the able the field service. clas of mention student of aid NYA and activities, library especially frequent Other in favor sifications frequently approved are the hot lunch projects, sewing projects, recreational supervision and adult education. There has been a special report submitted on nursery schools which emphasizes the importance and value of the work. There also has been a wide field covered in assistance to regular staffs of educational institutions in research and allied summary from CHUSETTS HAVE THE NON . CONSTRUCTION ACTIVITIES - EDUCATION. PUBLIC counties subdivisions work. indicates A that these of reports received especially appreciate the work of the county health and nurs- ing projects."-MINNESOTA HEALTH, RECREATION, AND OTHERS -BEEN WORTHWHILE? WHAT HAS BEEN THE EFFECT OF THE WORKS PROGRAM ON FISCAL CON. "The reports from sponsors of educational and recreational activities of the WPA have been uniformly commendatory in their braise."-ARIZONA. DITION OF GOVERNMENTAL SUBDIVISIONS? "In the larger towns and cities the so-called 'white- collar' projects have contributed major improvements in the non-construction fields. The educa- No generally representative answers can be quoted. Better conditions since 1933 are often M cribed to the WPA Works Program. In communities hard hit by the recession of 1937, fiscal conditions are said to be much worse than they were is immediately previous years. Small communities sometimes feel themselves to be at the end of their tax resources in supporting the program. The most definite and general statement is that the cost of maintenance of WPA improvements after they are constructed is not a burden. This subject is dealt with at length in the supplementary report. tion, health, professional, youth, recreation, research, and arts projects have played an important part in improving the efficiency of community government, fostering recreational and cultural life. extending much needed services, and developing community health and well-being in general." CALIFORNIA "Practical results arising from the operation of non-construction projects in Florida have become more pronounced and apparent as the various programs have been carried forward These educational and service projects have required considerable time for the public to become convinced of their good effects."-FLORIDA HAS PUBLIC HEALTH BEEN IMPROVED? "With the exception of Student Aid, most comments on non-construction projects have been adverse, although the greater part of officials reporting have ignored white-collar projects. Student Aid for youths in high school and college has received unanimous praise."-INDIANA "A large number of the Commissioners, especially in Southeastern Oklahoma, were specifically appre- ciative of community sanitation programs and the construction of farm ponds, dams and water wells. Through drainage of low-lying areas and removal of "The white-collar projects come in for a consid- malarial conditions, property values in the areas erable the type of criticism where this work has been done have increased ms. (unfavorable). shareby is highly of just referred project praised a number of type reported that typhoid and malaria have almost com- to On the other hand, this of terially. County health officers in many districts communities These pletely disappeared from communities which three years ago were hopelessly infested."-OKLAHOMA actions representing larger different persons reare easy to explain since this type of relief 28 "The results of the Malaria Control and Drainage Program is set forth in the following extract from the report of the South Carolina Board of Health: The results obtained to date have been most satisfactory. From reports obtained from HAS WORK-RELIEF ADVANCED THE COMMUNITY AND STATE IMPROVE. MENT PROGRAMS? the Bureau of Vital Statistics of the South "In most of the appraisals, city and county officials are agreed that the Federal Emergency Work Pro- Carolina State Board of Health, there was a de- grams have advanced the construction and improve- crease of 3,152 cases of malaria in year 1937 from the number of cases reported in 1936. This represented a decrease of approximately 16 percent in 1937. The effect of the drainage program on the ten years."-FLORIDA health of the communities involved is only now becoming apparent and we are confident that future results will be even more satisfactory." "It is the opinion of the Committee that public works improvement in Indiana is ten years in ad- SOUTH CAROLINA various Federal programs."-INDIANA ment plans of the various communities from five to "All essential facilities have been advanced from five to ten years ahead in nearly all fields."-IDAHO vance of what it would have been without the "Unquestionably most of these improvements HAS THE PROGRAM DEVELOPED LONG-RANGE COMMUNITY PLANNING? "Not the least important of the program's effects is its demonstration of the value of community planning. In many cases communities which have never developed community plans have been influeneed toward the formation of such plans by the new attitudes thus created."-CALIFORNIA would not have been possible for many years without Federal aid, particularly on sewage, water, road improvement, etc. These necessary things have placed their communities ten years ahead of schedule."- NEW HAMPSHIRE "Many of these projects mark the accomplishment of features of long-time planning which by reason of lack of funds, and debt limitations lifted for Fed- eral relief purposes only, could not have been realized for many years to come. One city says it is ten years ahead of its planned program, and others "Officials are apparently giving more thought to make the same statement for lesser periods."- long-time planning than in the ast."-IDAHO. ARIZONA. "The necessity for better planning, and planning on a long-time basis, is elt."-KANSAS. "Essential facilities (in southwestern Texas) have been expanded at a better than normal rate, and the reports indicate that there is an advance of from three to five years over and above normal years." -TEXAS. "The public facilities created followed the community's long-time planning program in 67 per cent of the communities, whereas in only 7 per cent was "It is the opinion of this Committee that while this untrue. However, 26 per cent of the communities had no long-time planning program."- some of the improvements would have come about in the ordinary course of events under normal conditions, there were others which would have been MICHIGAN. "Almost never practised in any large degree by most city official groups before 1933, long-range planning has been brought by the Federal Works Program to the position of leading prominence in the affairs of Oklahoma cities."-OKLAHOMA. delayed for years, if not forever."-MASSACHUSETTS. IS WORK-RELIEF BETTER THAN A DOLE (a) FOR THE EMPLOYABLE "There is a necessity for a works program on a more permanent basis which would permit a longtime planning and the undertaking of more lasting UNEMPLOYED? (b) FOR THE COM. MUNITY? projects. This Committee feels that Congress "It is the unanimous judgment of the Committee as well as all sponsors that the work program is much preferable to direct lief."-ARIZONA "There was complete unanimity in the reports that work-relief was much to be preferred over direct relief for employables."-ARKANSAS. "On no other phase of the unemployment problem is opinion so fully expressed and so united. In the should take cognizance of the necessity of carry- ing forward a works program over a period of ts."-WEST VIRGINIA RESOLVED: That this meeting (of the State Appraisal Committee) go on record as advocating a permanent plan of relief that would enable long- time planning by the counties and cities."NEVADA 29 overwhelming majority of communities the experithe five years, as revealed "There is a prectical unanimity among the munici. palities participating, in their approval of work-reliel for persons who may be classified as employables MINNESOTA. has demonstrated the reports, ence of past decisive in community superiority of the work-relief method, for both the community and the unemployed."-CALIFORNIA. "Recognizing the fact that the work program costs "The reports which the committee has examined are practically unanimous on this point. They show clearly that there is no deterioration of morale or loss of the spirit of self sufficiency in the individual when he accepts employment offered through a relief agency."~ DELAWARE, more than the dole, is the work program preferable to the dole? Yes, No comparison."-MON "Both city and county sponsors are almost unanimous in the feeling that work-relief is equally beo. eficial to the community and to the unemployed."NEBRASKA. "There appears no question in the minds of the officials making the appraisals on the real merits of "RESOLVED: That the Nevada State Appraisal Committee, in meeting assembled, does unqualifiedly work-relief and direct relief. Emphatically it is endorse the various Federal work programs as con- repeatedly stated that work-relief should cover the case of every able-bodied unemployed person."- ducted in Nevada, and does urge the continuance of FLORIDA. a work program as the proper means of taking care of the unemployed."-NEVADA "Reports from sponsors leave no question as to the value of 'work-relief' over the 'dole' in dealing with unemployment problems. They show a unanimity of opinion in favor of work-relief, not only "We believe that the establishment of the dole for able-bodied men and women willing to work would eventually cause the abolition of our form of gov- ernment."-NEW HAMPSHIRE because of the effect upon the morale of the workers "Local officials are in general agreement that the Federal Work Program is their preference."-NEW but because of the public improvements resulting from the plan. "-GEORGIA. JERSEY. "Work as a form of relief is overwhelmingly favored in preference to the dole."-IDAHO. "Among 114 answers, 113 favored a work-relief pro- gram for employable relief cases; one did not."NEW YORK STATE. "There is no doubt as to the necessity of workrelief. There was no report received which suggested that work-relief be eliminated."-INDIAN "It is better for the community to care for its destitute unemployed by work-relief and not by direct relief."-NORTH CAROLINA. "Benefit of the work-relief programs outweighs, as a whole, the 'necessarily disagreeable' features and 'adverse by-products,' in worthwhile public projects and benefit to the morale of the men who were to that extent at least kept from the direct relief rolls." -KANSAS. "The Committee finds that it is the very general opinion of all those reporting that work-relief is preferable to direct relief."-NORTH DAKOTA. "With the exception of one. county, all the units reported were highly in favor of the work program "Work-relief is favored over direct relief for the employable jobless by all the sponsors."-KEN rather than the early direct relief plan. The ob TUCKY. jection in this county was only in regard to farmets where, had they been given direct relief, would be allowed to stay on their farms and thus encourage more permanent agriculture than is allowed under the present program. SOUTH DAKOTA. "While direct relief is essential to care for the aged, infirm, the persons physically and mentally incapable of employment, it is even more essential that we utilize the labors of our employables for a continuation of the state-wide, long-range program of progress."~ LOUISIANA. "With practical unanimity, these authorities bold work-relief to be the most desirable form of assistance to the unemployed."-TENNESSEE "In general it may be said that the advantages of work-relief over direct relief have been conclusively demonstrated."~ MAINE "All the reports show conclusively that it is and has been more constructive and more American to "Without exception, every community is in favor give work to the able-bodied and needy unem ployed."-NORTHWEST TEXAS. "In the opinion of this Committee, the WPA has proved to be the of work-relief in preference to the dole for those who are employable."-MARYLAND "There seems to be no doubt in the minds of the reporting officials that work-relief is distinctly preferable to direct relief."~ MASSACHUSETTS most economical, socially useful and efficient agency. -NORTHEAST TEXAS. "It is the universal opinion that work-relief is better than direct relief, 30 both for the community at large and for the individual."-SOUTHWEST TEXAS. "The people in need of assistance, as well as the sponsoring agencies, prefer work rather than a 'dole' system of relief." SOUTHEAST TEXAS. "The answers to direct relief or work-relief were nearly all in favor of brk-relief."-VIRGINIA. "The sentiment in this State is overwhelmingly for work-relief as opposed to direct elief."-WASHINGTON. "Our State seems to be unanimously in favor of work-relief as compared with direct relief for employablex."-WEST VIRGINIA. "There is unanimity of opinion that work-relief is more American, and more constructive to men and communities, than a dole.' -WYOMING WHAT HAS BEEN THE QUALITY OF THE ADMINISTRATION? "There seems to be no argument on this point as far as Arizona is concerned. Whatever complaints there are seem to be due to rules and regulations presumably thought necessary in Washington. Many reports express the desire that local administrations be given more authority."-ARIZONA "The overwhelming endorsement of the Federal Works Program by officials of communities and counties in Northern California is particularly significant for the non-sectional and non-partisan attitude toward the unemployment problem which it reveals Although the communities participating in the United States Community Improvement Appraisal range from the smallest rural towns to the largest cities, any difference in viewpoint along country vs. city lines is entirely lacking. Likewise there are no differences along political lines, in spite of the fact that a large majority of California pub- lie officials differ in political affiliations from the present Federal Administration."-CALIFORNIA "The State Planning Board finds that the Works Progress Administration and its personnel in Wyoming has conducted its office and the duties attendant thereto in the most conscientious and careful understanding of the purposes for which relief money has been allocated."-WYOMING 31 EXCERPTS FROM LOCAL APPRAISAL REPORTS THAT EXPRESS MAJORITY AND VARYING VIEWS ON EACH MAJOR QUESTION ASKED WERE THE IMPROVEMENTS AND SERVICES PROVIDED UNDER THE WORKS PROGRAM BADLY NEEDED gymnasium, a modern steam heating system with as automatic fuel feeding stoker saving the district hundreds of dollars in fuel annually. MUNITIES? "The city hall was completely remodeled, spacious room provided for a city library and & solid concrete addition was built on the rear for 1 fire department. The communities surveyed in the United States Community Improvement Appraisal are virtually unanimous in their approval of the WPA Works Program as filling a pressing need and as being of benefit. "These work projects have been a great material aid to this city in maintaining its financial stability and this city has at the same time kept pace with its share of contributions This community has contributed to the limit of its financial ability. 90% of Community Served "Wholesome recreation, better sanitary conditions education and the consideration shown our youth will exercise an important effect on present and future generations. Children are thus developing their minds, bodies and improving their health, and equally important they are kept off the streets and probably out of mischief. This fact is substantiated by the police chief and is borne out by the city "As the projects were evenly distributed it is esti- mated that they will directly serve 90 per cent of the community or about 57,000 people. During the past two and one-half years the WPA has brought into the city a substantial income by means of the WPA pay roll which is estimated at about $1,000,000. A survey among WPA workers indicates that the money was distributed as follows: Butcher, grocer and baker Property owner for rents Clothier, dry goods, shoe shop Ice and coal dealer Saloon, tobacco shop, social clubs Gas and electricity Shows, amusements Loan organizations Insurance, benefit societies Druggist, doctor Churches Miscellaneous, savings, auto expenses justice records. "Furthermore this city has been able to continue $335,000 all of its regular functions, services and governmental 250,000 responsibilities only through the aid extended, with- 145,000 out which the city would have become financially destitute trying to provide for the unfortunate - 62,000 53,000 employed."-WM HUBER, AUDITOR, CITY OF WISHER MCINTOSH COUNTY, NORTH DAKOTA. 50,000 28,000 18,000 A Farmer Recounts Gains 16,000 15,000 "I have been requested as a farmer, representative 14,000 of this county to give my idea of what the Federal Aid Program has meant to the farmer. 14,000 "As a general proposition, I would say that the program has been highly beneficial. In the matter of road improvement it has been very much so and I with many others, have been greatly helped is having better roads to haul our crops over. On one particular piece of road, improved under the program last season, we trucked well over 100 carloads "From the foregoing it can be seen that the WPA funds had some effect on the general conditions in the city."-JOHN J. SCHNEIDER CITY ENGINEER, PASSAIC COUNTY, NEW JERSEY. A City Lists Its Gains of potatoes. Dollars and cents saved in time "Recreational grounds and facilities have been pro- and equipment on this hauling job alone would vided consisting of an outstanding city park and covering more than two amount to quite a sum and many others had equal years ago the were playground "Several citysidewalks blocks. not fit to benefits. walk on and a disgrace to behold. Today the entire "Stock water reservoirs have been, from reports received, of much value to stockmen in certain business section has been improved. "Numerous improvements have been made to the districts and especially so since we have of high and grade school buildings, including a new fered severely from drought in this section. This 32 1 AND OF BENEFIT TO THE COM. * * * * REPORTS FROM COUNTY OFFICIALS MUNICIPAL OFFICIALS DEPARTMENTS OF STATE GOVERNMENTS O work should be carried further if funds are available. who are ineligible for WPA employment under the terms of the act. Larger cities, especially, state that the need has not nearly been "Rural school improvements have been very helpful and district schools where this work has been covered. carried on have been able to get improvements which the districts themselves were not in financial position to make.' -WM. L. IRVINE, DILLON, BEAVERHEAD COUNTY, MONTANA $50,000 in Wheat Saved "Through the use of trenches and dust approximately 1,500 acres of wheat south of the Eltopia- 15% Ruled Off Work-Relief "Fifteen per cent were denied work relief on account of the rules governing eligibility. Until these regulations are withdrawn and an increased quota is allowed the entire field of work relief cannot be covered." W. COUGHENOUR COUNTY CLERK, EADS, KIOWA COUNTY, COLORADO. Ringold road were saved from any loss, as were also from 15,000 to 18,000 acres of wheat adjacent to the north and east portion of the area which was pro- tected by the operations this year. With higher yields and better prices for wheat we should be safe in assuming that at least 50,000 bushels of wheat were saved worth $50,000 at present market prices." -FRANKLIN COUNTY WASHINGTON All the Needy Not Employed "All the needy have not been fortunate enough to obtain employment on the WPA. However, it is not the fault of WPA, or the sponsor, it is only that the quota for the state will not permit it. This county is taking care of at least 80% of the needy cases now and during the farming season the other Coverage of Needs 20% is taken care of."-HOWARD CAMERON, CLERK, "No reasoning person disputes the direct relationship between unemployment and a general decrease in business volume. Perhaps the best barometer to business conditions in general are the figures relative CHANCERY COURT, MERIDIAN, LAUDERDALE COUNTY, MISSISSIPPI. Trenton, New Jersey, Lists Results to building permits within any city. Below is listed the year-by-year schedule in the City of Spokane showing comparatively the fluctuation in general business volume over the past ten years and the 5,736,778.00 "These projects have brought important benefits to the city, many of which would have been otherwise unattainable, because of budgetary restrictions. The Federal Government bore $3,796,079.83 of the total cast, or close to 92 per cent and city's share was $326,016.75. Besides the material benefits gained by the city, approximately 3,000 Trenton people are at work on WPA projects, which still leaves 3,100 on relief."-PAUL MORTON, CITY MANAGER, CITY OF 1929 4,149,210.00 TRENTON, MERCER COUNTY, NEW JERSEY. 1930 3,640,843.00 1931 2,089,090.00 fluctuation in persons registered as unemployed." Families on City and County Relief Year Building Permits 2,623-Direct relief 1932 572,801.00 3,730- 1933 622,180.00 3,941- " $3,656,199.00 1928 1934 753,917.00 Working 1935 1,564,284.00 0-Working 7,653- 2,895,522.00 4,263- ERA " 3,925,445.00 1937 "We believe these projects have well covered the field of the needy employables with the exception of those persons whose job-histories demonstrate that they have held positions of an executive or administrative type."- C. YENNE, MAYOR, CITY OF CWA WPA " 1936 No Jobs for Ex-Executives . 1927 WPA ALBANY, CALIFORNIA -F. G. SUTHERLAND MAYOR, CITY OF SPOKANE, SPOKANE COUNTY, WASHINGTON Still 2,000 Able Men Jobless "Taking the projects as a whole they have accomplished much by way of work-relief, but they have not been able to satisfy the total demands for work in view of the fact that at the present date we have approximately 2,000 ablebodied persons un- HAS THE WORKS PROGRAM COVERED THE FIELD OF NEEDY EMPLOY. ABLES? Where affirmative answers to this question have been found, the text of the reply most often indicates that those replying have many additional non-working employables available employed.' CHARLES OZIAS, COUNTY CLERK AND RECORDER AND THE BOARD OF COUNTY COMMISSION KRS, EL PASO COUNTY, COLORADO SPRINGS COLORADO 33 Single Men Left Out the group of worthy unemployed is having upon general public, who have "The programs hardly cover the field of needy employables because of the large number of single men workers are believe effect The that the all relief lazy and come indiffer- its to ent. private employer will not seek living in the community and those alien workers formerly employed in private industry who were eligible only after men with families and citizens on the relief less - T. HINTGEN, CITY from forced the to." unemployed H. employees rolls AUDITOR up. were placed." JOHN CONTELLINI. MAYOR, LEADSVILLE CITY OF WAHPETON. RICHLAND COUNTY, NORTH DAKOTA. LAKE COUNTY, COLORADO. Worthy Workers Balk at Relief Status Few Reemployed from "Work-Relief" Rolls "The work done in this town has been very satisfactory and of permanent value. The only criticism we would make is that many worthy persons, not "The records in Bismarek tend to show that of the total placements in contract jobs financed by other federal programs, such as highway improve ments, approximately one-third have been made from persons on the relief rolls and two-thirds from persons not on relief rolls; that of the total place- willing to be put on relief, but needing the work have been greatly inconvenienced by the strict WPA ruling. The workers, as a rule, have given honest labor."-BERNARD F. BEMIS, CHAIRMAN. BOARD OF ments in private industry excluding private contracts financed by federal funds, one-sixth have been made SELECTMEN, HARRISVILLE CHESHIRE COUNTY, NEW from relief rolls and five-sixths from persons not on relief rolls and that of the total placements in private industry including private contracts financed by federal funds, approximately 23% have been made from persons on relief rolls and 67% from persons not on relief rolls." - MYRON H. ATKINSON. CITY HAMPSHIRE. Philadelphia Relief Curbed by Rules "The economic effect was to greatly improve the local business situation Unfortunately, due to the city's financial condition, it has been impossible to provide as many projects as would be required to AUDITOR, BISMARCK, BURLEIGH COUNTY, NORTH DAKOTA. absorb the entire relief load because under Federal regulations the city must participate in the cost to an extent that would require an expenditure greatly in excess of its available funds The WPA regulations which prevent the city from submitting applications for work of a maintenance nature and for other work which might come under the category of normal city functions restrict the field of operation." Labor Not Kept Fit "The WPA has not kept labor fit for private jobs as well as could have been. This section is agricul- tural. We have trouble with farm hands leaving their places and seeking a place on the relief work with a feeling that the relief work would be more secure and permanent. There is a growing attitude that the Government has a definite responsibility and, even with the supervisors and skilled labor, strong hope is being developed that this condition or rather necessity, may continue indefinitely. Ap- -S. DAVIS WILSON. MAYOR OF PHILADELPHIA, PENNSYLVANIA. HAS WORK RELIEF MAINTAINED THE SKILLS AND EMPLOYABILITY OF parently the scope of the programs are widening instead of closing in."-L. B. ALCOCK, CITY MANAGES. THE PROJECT WORKERS? ROCKY MOUNT, EDGECOMBE COUNTY, NORTH CARD- Opinion is divided on this question. The general indication is that projects have been LINA. organized, as much as possible, to fit the skills Helped Preserve Skill of available labor and to meet the require- "The work has been very well suited to the un- ments of the community. Changes in technology have, however, made obsolete the skills of Imenit inhas keep to jobs and employed except we haven't had enough skilled men to conduct the projects on building school houses. many workers. think shape that in some get private cases helped in others to to it WPA a Handicap to Job-Seekers has not, because they have not been required do enough work. The labor is suitable except for the fact that we need more skilled men."- "Federally-supported work has not helped to keep relief workers fit for private jobs because of the gradual loss of self-initiative and ambition due to the system of supervision and discipline. The shift- J. C. CAMBILL, CHAIRMAN, COUNTY BOARD OF COM- less man and the parasite not being segregated from CAROLINA MISSIONERS, SPARTA, ALLEGHANY COUNTY, NORTH 34 Test of WPA Supervisors Men Do a Day's Work "Most of the men do a day's work and give value received for wages paid. There are exceptions as would be true in any group of workmen. It is also true that as a rule the best workmen do not remain on the WPA work permanently. They are naturally absorbed in private employment as soon as jobs are available."-E CAPPS, MAYOR, CITY OF BANDON, Coos "The quality of the workmanship was of necessity of varying degree, some of the so good. In the of the was limited to the the others workmanship not general. highest ability quality order of and WPA supervisory forces assigned."- J. COUNTY CHIRF CLERK, COMMISSIONERS, ALLEGHENY RYAN, COUNTY DEPARTMENT OF WORKS (PITTSBURGH), PENNSYLVANIA COUNTY, OREGON. WHAT HAS BEEN THE QUALITY OF WORKMANSHIP? Most reports indicate that sponsors are well satisfied with the quality of finished work resulting from WPA projects. Where complaints are made they are most often based on poor local supervision. Work is "Only Answer" "It is cheaper to provide cash relief, and the City of Baker would be relieved of a burden of thousands of dollars annually, since the city is not responsible under state law to care for any needy individual. But, from the standpoint of the welfare of our community, work-relief is the only answer. From the standpoint of the welfare of the unemployed worker, work-relief is still the only answer." -JOEL STURGALL, MAYOR CITY OF BAKER Poor Supervisors: Bad Work OREGON. "Criticism is due for two causes: First from incompetent supervisors, probably ARE THE PUBLIC FACILITIES CON. STRUCTED UNDER THE WORKS PRO. GRAM OF PERMANENT VALUE? selected politically and with little or no interest, and second, with unskilled workmen trying to do skilled labor. The reports indicate that WPA projects Our building is not satisfactory."- W. Wool- have filled long felt needs and that they have been of permanent value to the communities BRIGHT. SUPERINTENDENT OF SCHOOLS, PANOLA, LATIMER COUNTY, OKLAHOMA Projects Were Needed Many Put in Good Day's Work "These projects have been very carefully plan- As to workers leaning on shovels and in general doing as little as possible we find that not ned and represented in practically all cases a necessitous improvement which would eventually have to be made by the Borough although they to be true here. On a road we graveled the contractor who hauled the gravel and was paid by the yard stated that if he could haul 15 loads per day he would consider it a good day's work. These men loaded 17 and 18 loads every day and took a real pride in the fact that they done more than a good day's work. On another project it was necessary were not in a financial position to do so at the time the work was done."-ARTHUR E. ARMITAGE MAYOR, BOBOUGH OF COLLINGSWOOD CAMDEN COUNTY NEW JERSEY. Seattle Gains $1,000,000 to shovel snow to keep the roads open and the men went to work and shoveled snow without pay in order to have the project going." L. AMUNDRUD "Probably the most outstanding project in Seattle, in this division, (professional) is the Land Use Survey. This project has made 323,000 appraisals of real estate property furnishing reports which makes it possible for taxpayers to feel that. as a whole, their properties are being taxed on an equalization basis The gain in revenue for city and county through proper taxation will ex- MAYOR, FAIRDALE. WALSH COUNTY, NORTH DAKOTA Work Was of High Quality "These unemployed have tried to give a full day's work in return for money received. This is ceed a million dollars in Seattle alone. over evidenced by the high quality and reasonable quan- prior years.' OF SEATTLE, KING COUNTY WASH- tity of work produced."-] MOSELEY. CITY MAN- INGTON. AGER DALLAS, TEXAS. 35 Many Improvements for Boston "Numerous improvements of a permanent value have been created, including reconstruction of highways, extension of sewage and water facilities, improvement to parks and playgrounds, the erec- tion of new buildings and the repair of most of the publicly owned buildings, such as schools, fire houses, police stations, hospitals and court houses." -MAURICE J. TOBIN, MAYOR, CITY OF BOSTON, SUF- and the lake dammed and property improved and this has now opened a large section thereto- fore undeveloped and the city will reap value due to the increase of assessable values."- great NEW JERSEY. JAMES E. BARGER, MAYOR, RAHWAY, UNION COUNTY, HAVE THE NON.CONSTRUCTION AC. TIVITIES - EDUCATION, PUBLIC HEALTH, RECREATION, AND OTHERS -BEEN WORTHWHILE? FOLK COUNTY, MASSACHUSETTS. Survey Aided Juvenile Court The reports indicate a growing sense of value in non-construction and white-collar "With the weapons and ammunition put into our hands by the Professional Service Workers, WPA, we are able to direct communities in con- projects. Recreation, health, education, school. lunch and sewing projects especially, receive structive programs against juvenile delinquency for years to come."-City OF SEATTLE, KING COUNTY, WASHINGTON. unanimous approval as worthwhile. Project Met Long-Felt Need Lunches Aided Children "The Programs have not only aided the unemployed, and the small business man, but have been "The lunch room projects have permitted us to furnish hot lunches to several hundred needy instrumental in aiding the various types of municipalities to plan civie, educational, and health projects that will stand as lasting monuments to a Democracy that places man above dollars. Most children during the last two years. The good done these children can hardly be over estimated." - E. H BLACK, SUPERINTENDENT, Bassrow SCHOOLS, BRISTOW, CREEK COUNTY, OKLAHOMA of our projects have been the type that are meeting a long felt need; therefore, the laborer has been much more prideful of his work, and many of them White Collar Projects Valued have even learned much about some skilled trade." -CALVIN T. SMITH, SUPERINTENDENT DEPART- "The non-construction projects of McCurtain School District are NYA, school lunches, and ii brary projects. There is a shortage of non-cosstruction projects. Illiteracy classes, vocational MENT OF PUBLIC INSTRUCTION SEMINOLE COUNTY WEWOKA, OKLAHOMA training, clinics, music, and gardening surely would Won Praise of Citizens be of sufficient value to continue locally and sb sorb into the permanent governmental structure." "This project (sewing) is highly instructive -CHAS. L. FORD, SUPERINTENDENT, McCURTAIN PcsLIC SCHOOLS, McCURTAIN, HASKELL COUNTY, OKLA in that it develops trained seamstresses who are frequently able to withdraw from relief rolls and HOMA. earn a livelihood There are five lunch rooms in the city schools Brick and concrete sidewalks and streets have brought praise from the entire population of our city and have greatly added to our fixed assets. We have added to our sanitary sewer system opening a new development in which there is being erected many new homes, thus giving momentum to private enterprises. The program has also rendered valuable aid in mosquito control projects."-J B. FLORA, MAYOR, Many Taught to Read and Write "There is a 1,059 colored and 1,181 white illiterate enrollment this year. The 1930 census showed 1,516 white and 6,236 colored admitted X markers in Mecklenburg County. Of this group we have 833 enrolled in classes. Since June 30, 1937, 435 have acquired the ability to write their names; prior to this 455 others acquired this skill. From to has reached ELIZABETH CITY, PASQUOTANK COUNTY NORTH CAROLINA 7,754 are illiterates in 1934 persons 1937 this who program reached this 890 in county. of order the There are still 6,864 yet to be Added to Assessable Values to make Mecklenburg County a complete literate county."-H. W. HARKEY, CHAIRMAN, BOARD of "About 15 years ago the dam in Milton Lake had broken and the city never had funds to re- COMMISSIONERS MECKLENBURG COUNTY, NORTH build it. Through this project the dam was rebuilt CAROLINA 36 Civic Standards Raised which removed many men from relief."-CHAS D. KEOUGH, CHAIRMAN. BOARD OF COUNTY COMMIS- "Through the education derived from such projects as Homemakers, Nurses, Community Houses, and SIONERS, TONOPAH NYE COUNTY NEVADA Recreational Centres, Planting and Beautifying, Canning and Preserving the civic standards of the county have been raised to a marked degree."- Fisheries Benefited W. C. HARGHAVE EDGECOMBE COUNTY, NORTH CABOLINA. "The shell fisheries, the main industry of this town. have been greatly benefited under this program. Thousands of bushels of seed clams have been transplanted and several thousand bushels of winkles and other enemies to shellfish have been WHAT HAS BEEN THE EFFECT OF THE WORKS PROGRAM ON THE FISCAL CONDITION OF GOVERNMENTAL SUBDIVISIONS? The comments show that often there have collected and destroyed."-Leil A. NICKERSON, JAMES DICKIE, ALONZO W. JONES, BOARD OF SELECT- MEN, ORLEANS, BARNSTABLE COUNTY, MASSACHUSETTS. No Finances for Supplies been increases in tax collections accompanied by increases in community assets and community debts; in many instances lower assessed valuations in the wake of the depression resulted in lower community income. Debt limitations have often precluded sponsor contributions of funds or materials, etc. But in general the fiscal condition of governmental "Tax valuations have been cut; we have no finances with which to purchase supplies."-R W. ORR, MAYOR, CITY OF SHERIDAN, WYOMING Missing Tax Acreage Found "Through the Tax Survey, 4,973 acres of land that had been escaping taxation were placed on the tax rolls."-John BOURLAND TAX ASSESSOR-COLLECTOR, TARRANT COUNTY TEXAS subdivisions has improved. Works Program Stabilizes Industry Federal Funds Only Aid "Work program payrolls have helped stabilize all "Our assessed valuation has decreased 40% in the private business enterprises within the city."- last ten years and unless we can rehabilitate our MAYOR DAVID B. KINNELL SPARKS. WASHON COUNTY, farms and mining industry it will continue to decline. We have the resources here and they can be made to produce wealth and supply employment but we cannot accomplish this result without transportation and development and this must come from the only NEVADA. Cannot Furnish Work Material "Rockland, being already over its debt limit, is unable to furnish material to carry on some of the worthwhile work which we would like to have done. The poorer communities which really need the most help are unable to get it as they cannot furnish available source, the Federal Government."-Fr L VIKL CHAIRMAN. COUNTY COMMISSIONERS LEMHI COUNTY SALMON, IDAHO. sufficient material to carry on their projects."- Created More Tax Revenue CITY OF ROCKLAND. MAINE. "This organization (WPA) has been a Godsend to our country. It helps our farmers to raise Community Valuation increased 20% more crops, so that they will not become dependent "When the Federal Works Program began the valuation of Transylvania County was very low, and on the state or Federal Government It raises our county assessment, therefore creating more tax reve- tax rates were high the county was in default time, by placing lands formerly not tillable so that Being in default this county could not sponsor the projects and therefore lost many good projects. Today the valuation has increased approximately 20% taxes were paid during the past two years for as far back as seven years. Some of the forgotten men (now on WPA) have paid their taxes, and improved their small farms and houses, and have built crops may be fised."-GEORGE C. BISHOP. PRESIDENT. SUSSEX COUNTY LEVY COURT GEORGETOWN DELAWARE. Created Jobs for Miners "The improvement of the roads alone enabled many mining properties to go into immediate pro- sanitary rivies."-TRANSYLVANIA COUNTY NORTH duction, which would otherwise have been impossible, CABOLINA when metal prices were stabilized, thus creating jobs 37 Hard-Pressed in Winter Work Less Costly Than Relief "The expense required of the sponsors of these projects has been substantially less than would have "The city has been hard pressed to finance ment and materials to carry on these projects during equip. been required for the direct relief that local communities would have had to provide. Our projects have all been of the non-revenue producing class. but most of them are leaving behind them permanent structures of the class which are ordinarily provided by bond issues, chargeable to local taxes and the structures will be of use to the community through an indefinite course of years. They are of a kind that have not materially increased the maintenance costs to which we are accustomed; and in the winter when there are a large number on WPA rolls."-H R.COLORADO IRELAN, CITY ENGINEER Rocky For OTERO Co., Large Taxpayers Protest "It has been necessary to increase which protests from the the budget and with a more for a corresponding decrease Federal it has is believed caused materials, that with liberal larger taxpayers allowance some cases maintenance costs are actually decreased." J. V. MONTRIEF. MAYOR BRIDGEPORT TEXAS in sponsor contributions, that a large amount of this criticism will be eliminated."-F. R. GOODMAN CITY ENGINEER WINSLOW, ARIZONA Every Merchant Benefits City in "Best Condition" "The Federal payroll coming into town, which means new money, has been a benefit to all merchants and a relief to charity appropriations which "Money spent for these projects as wages so increased the payment of back and present faxes has reflect on all citizens and taxpayers." -P. R. KELLER, that the city today is in the best financial condition SELECTMAN. CAMBEN, MAINE it has enjoyed in a number of years."-ALLERT Man. TIN, MAYOR, CITY OF LAREDO TEXAS. Lack Sponsor's Contribution No Increase in City's Taxes "Lack of finances have made it impossible for us to follow the county's long-time planning program. We are unable at this time to furnish even a small portion of the costs of construction The costs for "It has not added one penny to the cost of taxes The waterworks has indirectly added thousands of dollars of value to the town. People want to live here now. Before we had water nobody wanted to live here.' G. FLOYD. TURRELL ARKANSAS maintaining our buildings has decreased considerably due to Federal d."-HARRY F. HENDRY. COUNTY OF LEE. FORT MYERS. FLORIDA District Financially Destitute "Several districts in this county are so financially destitute that they cannot avail themselves of any type of a federal project because of the necessary and required local contribution."-OREN JENSEN No Vacant Homes; Taxes Paid "We would like more aid in planning our projects Since 1933. because various Federal agencies have given work to the unemployed and have aided this city to make improvements, we find that tax payments have been resumed and that light and water revenues have increased We now have no vacant homes, business places or offices." -HAHOLD KING. AUDITOR. CITY OF PARK RIVER, WALSH COUNTY COUNTY SUPT., STEELE KIDDER COUNTY NORTH DsKOTA. Community Rallied for Project "Our school room was built without any indebted- NORTH DAKOTA. ness on the community. The funds were raised by donations and dances given in the school house. We received a donation of 600 bricks, the use of trucks for a few days and several loads of sand and gravel Asks Credit for Material Used "A more liberal interpretation of what constitutes local contributions would no doubt make available Twenty-six hundred adobes were used in the cosstruction of the room. They were made of material and in the district by WPA workers assisted by local residents who contributed their time Many truck loads of gravel, sand and rock were hauled by local residents who donated their time and trucksthe adobes and much of the lumber was hauled many more worthwhile local projects. Com thought ought to be given to the amount of the sponsor's contribution with attention directed towards obtaining credit for the use of local native material." -LOWELL W. MONROE. BOBOUGH MANAGER ELLWOOD CITY, LAWRENCE COUNTY PENNSYLVANIA gratis 38 "When the trustees of the school district submitted their project to the WPA and learned that they would have to raise the material funds they called the entire community together. They explained what was needed and the community, which was divided and with no organization worthy of the name, got together and pledged part of the money and all the labor and equipment necessary to augment the WPA labor. All of the pledges were met and with but few exceptions, every family in the district furnished labor. or equipment and money. some gave all three."McCue. SECRETARY DOUBLE ADOBE PROJECT ComMITTEE McNEAL ARIZONA listed which was prepared to take care of the large number of unfortunate aged people, dependent children and chronics. The program cared for 1,815 last On eralized the service people furnishing year a gen- average, 50 pre-natal cases per month have been carried Not one mortality occurred during the past year in the obstetrical service which was due in a measure to the WPA nurses."-A EICH- LINCOLN DE- BAUM, large R. N. SUPERVISOR. CITY HEALTH R. PARTMENT LANCASTER COUNTY, NEBRASKA Rural Health Much Improved "Malaria control has been of more benefit than any other. Two thousand persons have benefited which has helped agriculture as well as health. Com- Stimulated New Construction "Since the completion of the Project a substantial amount of new building construction has taken place which indirectly will liquidate the entire cost of the Project and there is and will be practically no maintenance expenses."-ARTHU C. LEAVITT. WPA SPONseas AGENT. C. RAY BENNETT, CHAIRMAN, BOARD OF SELECTMEN NATICK. NORFOLK COUNTY MASSACHU- munity sanitation includes inspection of all eating places, milk supplies and water supplies. The sanitary facilities of schools are also inspected regularly. The rural sections have reaped untold benefits from the building of sanitary privies. Typhoid and malaria which formerly were prevalent in this section have been very materially reduced through our health project." W. S. SYKES CHAIRMAN, COUNTY BOARD OF COMMISSIONERS. TYRRELL COUNTY. NORTH SETTS CAROLINA County Savings for 30 Years Venereal Disease Clean-Up "With these wooden bridges replaced we will never have to worry about rebuilding bridges where these "One of the outstanding projects under the above classification is the public health project. It has to do with the treatment of venereal disease and reaches are placed. It will save the county a great deal of money for the next thirty ears."-HABERSHAM a class of people who, without the assistance of COUNTY CLARKSVILLE, GEORGIA. this bureau, would in all probability go without treatment. The benefits compare favorably with the most valued."-How COUNTY, INDIANA Town Finances in Better Shape "The town's financial status is in better shape than No Typhoid in Three Years it was four years ago because before the draining and graveling projects were completed it cost considerably to clean up the town every year on account of the cloudbursts."-Geo M: NEIL MAYOR. BEAR "We have no sewerage system, and numerous cases of typhoid were prevalent here prior to WPA activities, Three or four splendid community wells were CHEEK BEAR CHEEK COUNTY. MONTANA located here, sanitary toilets were built, and as a consequence not one case of typhoid has been reported in this locality in the past three years." -Don KING. CHAIRMAN BOARD OF EDUCATION HULBERT CHEBOKEE HAS PUBLIC HEALTH BEEN COUNTY OKLAHOMA IMPROVED? Malaria Done Away With The reports on the health projects commend the results shown in many communities "We have drainage ditches that carry away waterditches that were once a perfect hatchery for flies and mosquitoes, Before this work was done malaria Saved Lives of Many Mothers and typhoid was common Since these projects have been completed there has not been a case of either in the vicinity of one of these projects. -R. B. Won- "This Visiting Nurse service has proven of inestimable worth and saving. both in finances and health to Lincoln, filling in a gap which heretofore had not been cared for, as no other nursing service has ex- SHAM MAYOR. STILWELL ADAIR COUNTY OKLAHOMA 39 HAS THE PROGRAM DEVELOPED LONG-RANGE COMMUNITY Need Plans for Emergency "A well-planned, carefully considered work gram should be mapped out on a scale ample proto meet any emergency. The only question arises is where to secure the funds to make that PLANNING? Most reports indicate that the Works Programs have encouraged some community and work program efficient. A wide-awake large can dozens of board community."-BOARD outline deserving work planning projects in every OF COUNTY COMMIS SIONERS, SARGENT COUNTY, NORTH DAKOTA. regional planning. The abstracts indicate local problems associated with planning. Planning Value Not Shown City Now Has Long Program "The value of planning in community improvement has not been favorably demonstrated by the Works Program. During the course of its existence "The city had no planned program prior to the inception of the Work-Relief, but since has endeavored it has been too erratic, indefinite and inconsistent to conform to good planning of a long-time nature."DR. HUGH J. RYAN. MAYOR. BRADFORD. McKEAN to work a long-time program toward the ultimate realization of a much better town in which to live. at five years ahead of pro- COUNTY, PENNSYLVANIA CITY BEAVER The gram."-IVAN city is F. least LINDEMAN, ENGINEER its FALLS, BEAVER COUNTY. PENNSYLVANIA Losses Due to Planning Lack "Had local communities had the advantages of the several appraisals and inventories of their needs, made during the past four years, at the time they embarked on these past programs, there would not have been the waste and inefficiency, much of which is being mistakenly charged to the Federal agencies and their administration of these large programs. The general acceptance of this fact and the recognition of the necessity of local long-range planning is Uncertainty Halts Program "No definite long-term plan has been considered advisable at this time because no assurance can be obtained that the program of federal participation will continue."-SA PECKER, CHAIRMAN. BOARD OF COUNTY COMMISSIONERS, WASHOE COUNTY REND. NEVADA. in itself sufficient, to write off much of the loss, through inefficiency of these past efforts."- A. City Competes With County LONG, COUNTY ENGINEER, DUVAL COUNTY. FLORIDA. "One of the big problems we as a county have is operating WPA projects is the fact that the City of Sterling has the type of projects which take the men away from the county in the summer time and throws them back on the county in the winter time when the load of unemployed is much greater, also the handicaps for efficient work are greater."-RAT E. Projects Are Part of City's Plan "As sponsors and the engineering staff of WPA became more familiar with the problems of the community as a whole, and gained experience, more carefully planned projects became the rule. All projects now being operated by the City of Durango are parts integrated into a larger plan for permanent community improvement."- K. NABORS. MAYOR. CITY OF RIEKE. COMMISSIONER OF DISTRICT 2. CITY OF SreaLING, LOGAN COUNTY, COLORADO. DURANGO Ls PLATA COUNTY OKLAHOMA Planned Program for Future "Salt Lake County, like many other counties, did Waste from Haste in Planning not have a proper planned program to get the maxi- "Our criticism is that much waste has resulted from mum values from the labor and materials available It will be necessary to set up a definitely planned improvement program that can be set into operation at short notice and supported from a standpoint of the 'short-time' programs, which forced sponsors to rush madly to get projects under way with inadequate planning or preparation, because of the fear the 'works' would be terminated before the projects desired could be completed."-S A. Cook. CLERK, financing, engineering, and construction." -GEORGE M. HALEY. COUNTY SURVEYOR, SALT LAKE CITY. SALT LAKE COUNTY, UTAH. ELDORADO BOARD OF EDUCATION. ELDORADO ARKANSAS. 40 Built Small Roads and Bridges HAS WORK-RELIEF ADVANCED THE COMMUNITY AND STATE IMPROVEMENT PROGRAM? Where community improvement programs existed it was generally found that the WPA works program advanced them many years. Created Permanent School Improvement "Since the County Board of Education had a definite building program over a period of ten years as a result of a survey mode in 1930 government labor used to create permanent improvement while work-relief to the FAYETTE giving was SUPERINTENDENT, unemployed." COUNTY PUBLIC D. Y. SCHOOLS DUNN. LEXINGTON, KENTUCKY. "Due to the fact that our more thickly populated rural communities are scattered over such a large area it has not seemed practical to work large projects because of the transportation problem involved. We have, therefore, submitted and worked numerous small road. bridge, and related - 48. These projects have improved our farm to market roads immeasurably and in all probability advanced our county road improvement by a year or more."E. J. McGUIRE EFFICIENCY ENGINEER, PUEBLO. PUEBLO COUNTY COLORADO. City Got Good Public Work "All projects have been parts of improvement plans for the city, many of which have been planned for several years, but had not been carried out due to lack of funds. Due to the Works Program to a Program Advanced 15 Years "It seems to me that Works Program was designed for our municipality in that it fits into our long-time program and in five years has advanced our program at least fifteen years."-Dos B. RUSSELL CITY ENGINEER, OSCALOOSA, IOWA. large extent, the city has been on a cash basis since February, 37, while in '33 they had outstanding warrants of $24,000. The city has contributed to the carrying out of all projects in comparison with the increases in financial condition and very good results have been obtained both in taking care of the unemployed and also in making needed improvements to the city."-FRANKLIN THERIAULT. MAYOR, Sr. MARIES, BENEWAH COUNTY. IDAHO. Projects Meet Town's Objectives "The projects have been designed to cover the very Lack Work from October to March objectives that the town was principally concerned with."-JAMES B. CAREY, SUSSEX COUNTY, GEORGE- "The programs have fairly well covered the field TOWN, DELAWARE. of needy employables, except that they should be so planned to furnish work during the months from October to March inclusive. It is probably lack of Town Program is 15 Years Ahead knowledge on our part in selecting projects, rather than the fault of the WPA program for not covering the needs of employables better. The work programs we have sponsored have fitted well into the city's local planning program but have not been ex- "Through these programs the town has been able to expand essential facilities, and construct new facilities, at a better than normal rate. In this respect it is estimated that we are from 5 to 10 years ahead of what would otherwise have been accomplished." tensive enough." -JOHN M. LECATE. SUSSEX COUNTY. CHARLES A. PETRIE, Town CLERK, TOWN OF EADS, REHOBOTH BEACH, DELAWARE KIOWA COUNTY, COLORADO. Plan to Cover Winter Work relief load also occurs in the winter County Is Ten to 20 Years Ahead when are "The county has been able through these programs to continue facilities and services it would otherwise have to postpone or drop indefinitely. It is conserva- "Our men largest seasonally unemployed. able incorporate By planning the our work in advance we are to Federal Work Program into our regular county road building program. We have found that if we do the preliminary work in the season in advance that the program is elastic enough that the men can be used tive to estimate the facilities and services to the public through these completed projects is 10 to 20 years ahead of what they would have been under previous normal conditions."-L R. GISBONS, CLERK. when necessity demends."-JENK EVANS, CHAIRMAN BOARD OF SUPERVISORS, APACHE COUNTY Sr. JOHNS, OF BOARD, DELAWARE COUNTY, IOWA. ARIZONA 41 IS WORK-RELIEF BETTER THAN A DOLE (a) FOR THE EMPLOYABLE UNEMPLOYED? (b) FOR THE COM. MUNITY? The reports show virtual unanimity in answering this question affirmatively, many of them indicating a belief that the cost of Aids Worker and Community "Work-relief is beneficial to both the worker an and the the community His efforts provide himself and lie accumulative of labor hispub- in ily receives honorable the livingresults community and which he and his family also participate."-Green OREGON McGAW. CITY MANAGER AND ENGINEER, HILLSBORO work relief has proven to be a sound financial Work Displaced Relief investment "Our relief roll has been wiped out entirely by jobs Elderly Men Did Good Work provided through our sewer project. Since it was completed we have had no more trouble from rain water backing up into the cellars or roads rutted and washed out. In our present financial state it is inpossible for us to budget any money for direct relief "One of the main handicaps was an element which we must necessarily meet in such a program-the elderly men who tried to give a day's work for a day's pay but because of advancing years are unable to do so. Then, the public leeches, men who have never liked to work: but even with these handicaps the sponsors were able to get good value for the money expended."-GLES F. WILSON SECRETARY further ing enter our town because of this We than industry have through advanced to infinitely towards indue- project anything we could have done ourselves."-FRED W. KLOCKERT MAYOR, BOROUGH OF H1. NELLA, CAMDEN COUNTY NEW JERSEY BOROUGH OF MONACA BEAVER COUNTY PENNSYLVANIA Work-Relief an Investment Best Program for All Concerned "What is needed is a permanent program of work "The Works Progress Administration program is the best relief program we have had since relief started It has done more for the county in the way of building roads, farm ponds, etc., as well as for the men who have done the work. It has helped them morally and helped lots of them to learn a trade such as carpenters. stone masons, brick layers, concrete finishers etc., so they can leave WPA and get relief. The slack of unemployment is bound to N. main during the immediate future and is certain to recur cyclically. I consider Work-Relief not as AD expense but as a stupendous municipal and Federal investment More and more I realize that this setvice has come to stay and is necessary to meet squarely." F. GREINER CHAIRMAN, TOWNSHIP COMMITTEE WOODBRIDGE MIDDLESEX COUNTY. NEW private employment to earn their living.' -W W. JERSEY WADE CHAIRMAN: W. F. MANNEY MEMBER: GUY B. CUMMINS, MEMBER. COUNTY COMMISSIONERS OF HARMON COUNTY OKLAHOMA WHAT HAS BEEN THE QUALITY OF THE ADMINISTRATION? Of Benefit to Taxpayers and City Cooperation between local sponsors and the "With exceptions quoted it is my opinion that the City of Anaconda has derived a tremendous benefit from the WPA from the standpoint of the taxpayer, property owner. resident. or unemployed citizen."- WPA local administration is generally recorded. Most communities emphasize that T. J. McCARREL MAYOR CITY OF ANACONDA DEER tion. foremanship bears responsibility for produe- LODGE COUNTY MONTANA Rural areas are emphatic in suggesting lengthening of hours and lower wages. Many reports ask that red tape be cut in Does Not Favor Direct Relief "1 do not believe in direct relief whenever it is order to enable quicker recertification of to give work-relief. The work shall be provided bodied practical requires in that Massachusetts for the able law need I do not believe relief the Federal Government workers Prefer Relief to Farm Work carry be handled by should except ever to "I have known a number of men to quit steady over catastrophes GEORGE L. BARRUS CHAIR- MAN. SELECTMEN AND ASSESSORS. GOSHEN. HAMP- work on farms and herding sheep to get on the relief SHIRE COUNTY MISSACHUSETTS work, assuming the attitude that it was foolishness 42 for them to work 30 days for $50 when they could get the same amount for 11 or 12 days' work."JOSEPH B. WHITE. MAYOR, PARADISE. CACHE COUNTY UTAH. County Joins WPA for "Living Wage" "Our plan has been on the 5-hour day: the Gov- ernment pays hours, the a a 8-hour total of full five day county Between three, the making work periods the county pays an 8-hour day to of Continuous Work Reduces Cost "Continuous operation helps to reduce overhead expense both from the government side and the spon- sot side as well as reducing the damage due to inelement weather on subgrade, forms and partially completed work to a minimum." A. HOLLAND. MATOR WEATHERFORD TEXAS. the and no workers lean on their due they are a workers, to the fact that making living most shovels, wage as combined Government county ANDand DRAKE payroll."-C. a result of the C. KENDALL CHARLES COUNTY COMMISSIONES ADA COUNTY IDAHO. Summer Work for Winter Pay "We suggest that in the summer laborers be per- Hours Too Few for Living Wage "Suggest. however, as low wage in county is only $23.10 a month. that Federal commodity privilege be extended to families of four or more, especially to those receiving the minimum wage per month Or it might be possible to give them more work days a month The wage per day is satisfactory but eleven days a month will not give sufficient money to properly care for the large families in the low wage class Most of them need $30.00 a month or better." M.C. Cross. CHAIRMAN. A. C. OLIVER (SHATTUCK). R.M. SOCUMS (GAGE). ARNETT. OKLAHOMA Would Reduce to 25 Cents an Hour "It would be more satisfactory that hours be increased with a lesser rate per hour. putting it on a parity with agricultural employment The Board of County Commissioners strongly recommends that the working period of each month be increased to 160 hours with a wage of 25 cents per our."-WILLIAM W. FELSON. COUNTY AUDITOR. CAVALIER. PEMBINA COUNTY. NORTH DAKOTA mitted to put in more hours per month and their pay withheld for those extra hours until January and February when it is virtually impossible to accomplish anything due to the severity of North Dakota winters and blocked roads,"-VAL J. BUCHLER CLERK. VILLAGE OF HAGUE EMMONS COUNTY NORTH DAKOTA. Larger Grants Asked "It is neither economical progressive nor humane to place a group of men to work breaking stone on a roadway. That is penal work. We suggest a program patterned somewhat along the lines of the PWA with a scale of grants ranging from 50% to 75% depending on the class of work and size of the project. On jobs where the total cost would not exceed $5,000. we would suggest the day labor method which is really the present WPA setup. As to white collar jobs, the present system is the best that can be devised Ordinarily local governmental agencies do not provide services such as are now being furnished by these workers Educational, health. recreational and certain cultural projects have a value that is difficult to appraise, nevertheless it is ral."-ROBERT I. WILLIAMS. COUNTY ENGINEER. WILKES-BABIE LUZERNE COUNTY PENNSYL- WPA Wage Too High VANIA. "Many unemployed, when working part time, do not use the time they are off work, and refuse to work at private jobs unless the per hour allowed by WPA is paid: farmers and stock-raisers cannot pay Politicians Take Advantage this wage."-L R. GIBBONS, CLERK. BOARD OF SUPER- send to our country if not taken advantage of by politicians and loafers. I think the wages to the WPA laborer is plenty and quite 3 majority don't deserve half of what they get despite their grum- "I would say that the program is a real God- VISORS APACHE COUNTY Sr. JOHNS, ARIZONA. Accent on the "Work" bling."-HEASTER L SMITH. MARTINSBURG BLAIR "Hours of work should be lengthened so that the hourly rate of pay for the relief worker will be sub- COUNTY PENNSYLVANIA stantially under the workers in private industry Politics Forces Leniency Work relief is the only form of relief which will not ultimately destroy both the community and the individual. When the words are used the accent must "Political pressure, both real and threatened, causes be on the word WORK and not on RELIEF."- a JAMES GIRAND. CITY ENGINEER PHOENIX ARIZONA 43 foreman official of local sponsoring taxation units. or officials of larger governmental units to be exces- sively lenient with recipients of both direct and work that they will have to work when they relief."-GEORGE E. DANMAN, SUPERINTENDENT OF job, and not stand around by the fire."~ Gm SCHOOLS, BURLEY, CASSIA COUNTY, IDAHO. OROFINO, IDAHO. JOHNSON, COUNTY AGENT, CLEARWATER COUNTY Higher Wages for Able Workers "Laborers who are able-bodied should have the privilege of obtaining the rate they already have. This would keep down dissension, as the physically fit men are forever complaining that their rate is the same as the weaker men and therefore should not be Would Speed Recertifying Workers "I would like to see an arrangement in the re- employment of WPA workers it speedier so that are ambitious obtain private that employment those makingwill easier notenough be and to expected to perform any more work. The single men, with no dependents, should have a lesser hour basis than the married men with dependents, as it for adjustment wages incomein making to bring the effort. the monthly An upward hours penalized is and es- gives the single men no ambition to obtain other sential."-Dr. P. H. GIBBONS, MAYOR, KENNARD, employment for they feel that they can exist on the present hour basis. There should be some arrangement whereby the WPA could have the use of the state roads equipment, whenever available, within No Politics With Engineers WASHINGTON COUNTY, NEBRASKA "Politics have no part in the work relief and even though I am a Republican, and a member of the State Central Committee, and I am sure that the WPA Engineers know this, I could not ask for better cooperation than they have given me."-A. E. the state where the work is being performed."ARTHUR P. Horra, MAYOR, AND COMMISSIONERS OF BARTON, ALLEGANY COUNTY, MARYLAND. GOLDAMMER, MAYOR, CITY OF LAKOTA, NELSON Supervision Secret of Good Work COUNTY, NORTH DAKOTA. "We had several instances where workmanship has not been the best, where equipment has been damaged and material wasted, due to foremen or supervisors. We believe some of the red tape should be cut in connection with the placing of employees and Extend Work-Relief Role "Recommendations: That work relief be continued and even extended so as to give, during the winter months, at least part-time work to our needy single men; that the wages of 40 cents per hour be broader authority given to the foremen in reprimanding a certain element. The type of men used in supervising these projects is the principal factor in upholding the morale of the men employed on increased, especially during the winter months, as no man with a family can live on $40 per month, when they have to buy coal, and extra heavy clothing for these projects, as well as the approval and whole- CATASAQUA LEHIGH COUNTY PENNSYLVANIA outside work: that allowances for material be increased: that so far as possible, when you furnish material, that it be bought locally; that on really More Foreman Authority worthwhile projects your rules be made a little more elastic so as to give your engineer as much leeway hearted backing of the community as a whole."ALEX L. BRODHEAD, PRESIDENT BOROUGH COUNCIL, as possible so that they will fit into local conditions Again, our men especially and our community do not want the dole."- E. GOLDAM MER, MAYOR, Cm "More authority should be given the foremen on the projects to fire men if necessary; and the men assigned to the work should be given to understand OF LAKOTA, NELSON COUNTY, NORTH DAKOTA 44 AN OFFICIAL COUNTY APPRAISAL OPINION A SAMPLE OF THOUSANDS RECEIVED ON HENRIE DELTA REER LYNNDYL JOHNSON COUNTY OF MILLARD OFFICE OF CLERK HOLDEN FILLMORE. UTAH UR C. BROWN CLERK OBINS DEPUTY March 7, 1938 Delta, Utah Mr. Darrell J. Greenwell State Director WPA Salt Lake City, Utah Dear Mr. Greenwell: Your request for an appraisal of work projects in Millard County was taken up with the board of County Commissioners last meeting, you know the Commissioners and our entire office force are very busy, really overworked, they felt they did not have time to go into the matter sufficiently to give you any satisfaction, so I am going to try and write you what I think of it and believe the other Commissioners feel the same way. Forgive mistakes I am having quite a wresle with this typewriter and the language as well. When I took the oath of office January 1, 1933 and got a view of condi- tions it was the blackest picture I ever looked at people were terribly discouraged a great percentage would of moved out if there had been a place to go, our taxing units were all bonded to the limit, businessmen all on the rocks, and all our citizens were in debt that could get in, investments they had made when prices were inflated to the limit, we had been suffering from one of the most devastating drouths and panics that had ever hit the Sevier water shed, what few assets that were left were frozen down so tight you could not stick an ice pick into them any where, our assessed valuation had fallen from around twenty million to eight million dollars, we were on a tax strike and the Rail Road was threatning to pay their taxes under protest, that would of stopped our schools because we were only paying 60 per cent with the RR included. The time for promises and generalities had long past, we needed favorable court court decisions from both our State and Federal Supreme courts sustaining our District Judge clearing up our land titles, we needed leg47 to adjust taxes the people could carry the on islation such as moratoriums, liberal laws permitting the Commissioners under and distressed sell lands circumstances and homes back because to County owned terms a they great per cent of them, and last but not least we needed individual help direct so we could pay the taxes and buy our property back as well as live. Well Mr. Greenwell the State and Federal Governments came through with that help in a big way, we did not have a payroll in this County and we were all out of a job, through your departments the RFC, Cwa. FERA, and WPA supplemented with the security act each placed around two thou- sand on the payroll, and they bought our livestock killed the best of them shipped them back for us to eat and some of us had not tasted years, our farmers made us seed loans, Home for loans Ect. They but rehabilitated the big farm meat loans, thing of it all was that it meant work, jobs, building improvements we never would of gotten any other way, the works program part of it turned the liabilities of drouth and depression into assets and the results are we are again ready to go, we are paying 90 per cent of our taxes, our attitude toward taxes have improved nearly 100 per cent, we are incouragd because we are paying of our bonded indebtedness by the hundreds of thousands, we have incentive to go because we feel we have a chance to live and own our farms and homes, every soul in Millard County should feel grateful to the President, the Governor and Yourself the entire program and particularly the work part, it would be a terrible blunder to give direct relief to able bodied men and women when we need SO many improvements to raise our standards of living. I hope the State and Federal Governments can carry on a while longer, we cannot afford to loose the gains we have made and go back into chaos, this is the nearest perfect method of redistribution of American wealth we have ever tried and I am fearful if the people have to go through again the experi- ences of the recent past. This letter is altogether to long but I am depending on your patience you know me pretty well, I thank you and all who work with you again for what you have done for Millard County and sincerely hope every thing is going well with you and yours. Very Respectfully, Commissioner Manion Herrs Delta, Utah 48 EVALUATION-A FIRST STEP STATE APPRAISAL COMMITTEE STATEMENTS NATIONAL, STATE AND LOCAL COMMITTEES SHARED IN U. S. COMMUNITY IMPROVEMENT APPRAISAL The U. S. Community Improvement Appraisal is the result of a long-felt conviction within the Works Progress Administration itself that the tremendous national enterprise it was authorized to carry out ought to be appraised by some objective outside agency. In view of the magnitude of the program and the wide discussion it has aroused it was felt there should be available to any interested and heads of State departments to report fully and frankly on their entire experience in the use of the unemployed on public works. Secondly, it appointed a State Appraisal Committee to check, review and evaluate the local reports after they were made. State Committee Membership A tabulation of the 42 State Appraisal Committees reveals that they included: citizen or group a broad cross-section of Sixteen presidents of universities or col- specific outside judgments which would show how well or badly it had served the purpose of providing jobs for the unemployed, and to what extent it has or has not provided com- leges; 34 members of university and college faculties; 37 presidents or other representatives of State-wide organizations of women (club federations, women voters, etc.) : 70 presidents or other representatives of Statewide civic or business organizations such as Chambers of Commerce; 25 ministers and representatives of welfare organizations; 56 State officials; 107 county officials; 24 editors and publishers; 3 representatives of labor organizations; and 28 miscellaneous persons, including bank presidents and others prominent in business or community life. Several States munities with useful public improvements and services. Coast-to-Coast Survey A national appraisal based upon its accom- plishments, community by community from coast to coast, was obviously the way to answer such questions independently. It should, of course, be made by people outside of the WPA. Early in 1938 the nation-wide survey was launched. A huge mass of opinion ob- did not submit reports at all, due to lack of organization or volunteer committeemen to devote their time to the studies involved. tained from the local representatives was analyzed first by local committees, then by Of the 7,737.community surveys analyzed, 3,723 were made by municipal officials, 1,977 were received from county officials of whom the bulk were from rural areas, 1,125 were from business, professional men and women and farmers; 741 were from State and school officials, and 171, slightly over two per cent, were from officials connected with the WPA. each State committee and was finally evaluated by the National Appraisal Committee. On March 6, 1939, the report was submitted to the representatives of the national cooperating agencies in Washington. It was the sense of the conference to make the report "available for public use." A vote of appreciation was given to the National Appraisal Committee for its arduous labors in having This effort of volunteers to determine the burst whether gigantic of Works national Program energy made its report. characterized by the WPA was worthwhile is a unique contribution, for until these official representatives and civicminded citizens undertook it there had not In each of the States co-operating, similar committees selected by the national sponsors had worked equally hard. Each State organi- zation took two primary steps. First, it been a comprehensive, outside appraisal. Had asked all mayors, executive heads of counties 51 the program been adequate? for the unem- ployed? for the communities? The adequacy of the sid now being given brought up the question of the nation's financial re- capital investment of at least seventeen bil. lion dollars by public and private agencies is required, of which ten billion could be spent for relief-labor. sources. The future of our national economy was involved. How much of the nation's Nation's Needs Not Met basic requirements had been met? What had various agencies of government estimated were these needs? What Are Nation's Needs? According to the President's National Com- Against this minimum total of forty-three billions of expenditure for the nation's most elemental future needs the United States Community Improvement Appraisal took into account only the results obtained from the capital investment of seven billions of dollars spent in the WPA Works Program since 1935. mittee on Public Health, there are lacking hospitals and hospital beds for 360,000 insane, tubercular and others who need medical and surgical care. To meet this need would cost one billion dollars. Forty per cent of the nation's outmoded schools should be replaced with modern structures better located in newly planned communities Most public buildings are obsolete. Five out of every six county jails have been condemned by Federal inspectors as unfit to confine even criminals. 80 per cent of which went for construction It was evident that very substantial progress had been made both in physical and human accomplishments How well or how badly this program as authorized by the Congress has been carried out. according to the views of the State Appraisal Committees, whose names are appended, the following brief excerpts from the detailed reports will attest: ALABAMA It would cost two billions to rebuild prisons and at least five billions for all public struc- "Little towns that once confused weeds with shrub- bery, if not forests, now have no weeds. Little towns that once endured barbarie sanitary conditions and tures, The housing lack was estimated for the National Housing Committee to be two million dwelling units in 1938 which would require a capital investment of eight billion dollars to construct, The United States has three million miles of road ranging from the primitive burro trail to the million-dollar-a-mile superhighway. The further extension of our "farm-tomarket" roads would require an expenditure of ten billion dollars. A highway planning survey to map these requirements for a longrange program is under way. The Water Pollution Report of the National Resources Committee recommends the expen- a bad health rate are now clean and free of pest holes. Little towns whose people once swallowed all the dust that did not accumulate on store stocks and household furnishings now have no dust. They are equally free of mud. Towns that had no swimming pools or recreation centers now are well peovided with these. Little towns that had no community house where the cultural spirit might have an outlet, now have one. Little towns that had shabby city halls now have dignified city buildings. "Physically and spiritually little towns have been immensely benefited by these building projects. The Committee also noticed in the briefs that this new stirring of the creative spirit by means of public monies had unexpected influence for good upon pri- vate investors. Everywhere the example of the works project leaders encouraged private citizens to improve the appearance of their places of business and of their homes. "Thus the spiritual value corresponds to the eco- diture of two billion dollars in a ten-year program to abate the poisoning of the nation's nomic value deriving from the tremendous public water. Land erosion in fifty years of neglect has destroyed twenty billion dollars of arable spending that has gone on the past 5 years. These are permanent gains. In the end it may even be agreed that such gains offset the obvious losses of soil, To conserve our land for the future a the worst depression that this republic ever endured." 52 J W. Scott. Professor of Literature Polyte-hnie Institute Dr. J. U REAVER, President, Alabama Federation of Women's Mrs Mobile Clube Baxoon Dean University of Alabama Les B. F. AUSTIN, State Commander, American Legion, Dr. Montgomery C. Hgt Editor, Montgomery Advertiser, Montgomery General Miss LORINE BARNES, President, Alabama Education Associa- tion. Birmingham Mrs H. B. SHOWALTER President, Alabama Congress of Parents and Teachers, Auburn H. M. THACKBEY, Secretary, Arkansas Federation of Labor, Little Rock NORTHERN CALIFORNIA "The most obvious characteristic of the community reports is their virtually unanimous endorsement, regardless of political differences, of the Federal Government's work relief program. The value of the program. both to the communities and to the needy unemployed, is recognized almost without ex- ception ARIZONA It was the unanimous judgment of the committee 'In virtually every community report the public facilities constructed are found to be of a permanent and much-needed character The quality of the as well as all sponsors that the work program is much workmanship, in virtually all cases where the evalua- preferable to direct relief. tion is based on the work itself, is found to compare favorably with work in private industry." of the work program. Worthwhile improvements RICHARD E. DOYLE, President San Francisco Board of Edu- and services are realized and the effect on the recip- J. H. QUINN, President, Building Trades Council of Alameda ient of help is much better. History from ancient HAROLD B. HAMMILL, Consulting Civil Engineer, Member "When all factors in the program are studied carefully, they seem to constitute a strong case in favor Rome to the present points out the dangers of direct relief. It may destroy both the community and the ention County American Society of Civil Engineers individual.' DERO B. FORSLUND Editor-Publisher, Eastbay Reporter Mas WHILTAM J. O'DONNELL President San Francisco Women's Chamber of Commerce GRADY GAME President, State Teachers College. Tempe Dr. W. C. POMEROY, Professor of Physics, University of Cal. ifornia Mrs. W. W. SHEREWOOD, Secretary, Holbrook Parent-Teachers Association Holbrook FRANCES BROWN Home Demonstration Agent, Extension Service University of Arizona COLORADO "After an impartial digest of these appraisals, your committee gives its wholehearted approval to a continuation of a work relief program as the best available means of meeting the unemployment situation. both from the standpoint of the work accomplished Calumius GIRAGI, Editor and Manager, Holbrook TribuneNews Rocer T. PELTON, Cochise County Engineer, Bisbee JAMEN GRAND City Engineer of Phoenix, Representing Municipal Lengue Mrs R. L. POMEROY, President Parent-Teachers Association Tucson and the benefits to the unemployed. Practically EDWIN 8. LANE. Dean of Trinity Cathedral, Phoenix all the local branches of government agree that the quality of the workmanship is satisfactory. Some go so far as to say that it "compares favorably with the quality under private contract.' Father EMMET McLAUGHLIN, St. Mary's Phoenix c. WARREN PETERSON, Chairman, Maricopa County Board of Supervisors Phoenix Howard 8 Reen, Secretary, State Planning Board, Phoenix LISS B. Oame President, Salt River Valley Water Users Association Phoenix Mrs. ELIZABETH L HENNEX, Phoenix EDWARD D. FOSTER, Director, State Planning Commission WILLIAM B. FREEMAN, Engineer, Denver TEMPLE BUEL Architect, Denver EUGENE HARRIS Director Denver Bureau of Public Welfare ARKANSAS EUTOCHIA BELL SMITH, Member State House of Representatives ROLAND L. LINER Architect, Denver Mrs. Lucr C. AULD Director of Correspondence State De. "During the past decade Arkansas has been through partment of Public Instructions a series of disasters that taxed its resources to the utmost When the Federal Government began to provide employment projects for those on relief rolls, Arkansas had an opportunity to overcome the havoc RAY LANYON, Mayor of Longmont DELAWARE "Under these programs it has been possible for the State of Delaware to secure needed facilities for the life and welfare of our people which would almost certainly not have been secured through any other show means. (As to the individual worker) the (90) reports which the Committee has examined clearly that there is no deterioration of morale or of "lean years. The value of the many benefits accruing from numerous activities under the Works Program may be illustrated, as regards schools for instance, by the statement of W. E. Phipps, State Commissioner of Education, who says: 'I consider all of the work done by the Works Progress Administration for the schools of this State the most progressive and constructive the Federal Government has ever loss of the spirit of self sufficiency In general the reports indicate that the projects have been undertaken." worth-while and the value of the completed work has been commensurate with the expenditures entailed "Civic standards have been raised in a high degree. The work could not have been done without aid from the Federal Government Lt. Col. MILO P. Fox, Fort DuPont CHARLES H. GANT. Secretary, Board of Harbor Commissioners Wilmington There was complete unanimity that work relief was much to be preferred over direct relief for em- Rev. CHARLES F. PENNIMAN, Wilmington ployables." Dr. ARTHUR C. JOST. Executive Secretary, State Board of Health, Mrs Etworn BAKER President, Arkansas Federation of Women's Miss ETHELDA MULLEN, Executive Secretary. Family Society, Dover Clubs. Dermott ROBERT SISSON, State Commander American Legion. Little Rock Wilmington ARTHUR M. POTTER Executive Secretary, American Red Cross. Wilmington BAYARD VANDERGRIFT Division Engineer. State Highway Depart- Howa STEMINS, Representing Private Industry Little Rock E A HENRY. State Planning Board. Little Rock I. ment, Wilmington JOHN LECATE Secretary, Rehoboth Beach City, Rehoboth R STAFFORD Vice President, Arkansas Press Association, Springdale S. N. CULVER Merchant Delmar Water FRAZIER Secretary, Arkansas Farm Bureau Federation Little Rock 53 Dr. IDAHO H. V HOLLOWAY. Secretary. State Board of Education Dover ERINGUR Superintendent, Murphy School, Dover Club G. 1. MORRIS WHITESIDE 11. Architect Wilmington "Every individual in every town and and to derive benefits JAMES HARRY H. McCABE. Former State Senator, Selbyville program will continue Virtually all from county the works has of the accomplishments Dr. B. GEORGE FINKESHEIN President, Delaw are Social Workers L Mayor of Milford E. the work relief program would have been MACK L. D. SHANK Secretary City Manager Board of of Dover Park Commissioners R. CHARLES E. BANNING City Manager, Milford local agencies without help of the Government beyond the unemployed FLORIDA cation mouslyprogram) approve this new field of service (WPA edu Idaho educators almost traini and Work-relief programs have created a loyalty to and a confidence in our Gov. ernment Work a form oftorelief is overwhelm. ingly favored in as preference the dole." "City and county officials are agreed that the Federal emergency work programs have advanced the construction and improvement plan of the various communities from 5 to 10 years. "These benefits (non-construction projects) are justhad as important and quite as enduring as if they been written in stone and in steel and concrete. is that the quality "The consensus of opinion of workmanship has been unusually high "Work relief is of much greater value to a community as a whole because it makes possible needed improvements which could not be obtained otherwise; and it is better for the unemployed in that it helps preserve their self-respect and tends to uphold WILL SIMONS, Chairman Idaho State Planning Board Boin R. E. Jereme SHEPHERD Vice Chairman, Idaho State Planning Board HUGH Poeatello Member, Idaho State Planning Board ALLEN Salmon C. MERRITY, Member, Idaho State Planning Board WALTER CLARK Member Idaho State Planning Board Kellage INDIANA "The Federal works programs have been of great value to every community and governmental unit it the State Public works improvement in Indians their general morale." is 10 years in advance of what it would have been THOMAN C. IMESION. City Commissioner Jacksonville without the various Federal programs It the opinion of the governmental officials of this State that the quality of workmanship is, on the whole M good as that under private construction R. E L. CHANCET. Mayor of Tamps DAYES SHEPERD Mayor of Fort Myers The GEORGIA Federal works program has awakened the citizens to The the need for long-time planning general opinion throughout the State is that a program of assistance for the needy should include both direct relief and work relief.' "Reports from sponsors leave no question as to the value of work relief over the dole in dealing with unemployment problems. They show a unanimity of opinion in favor of work relief, not only because of the effect upon the morale of the workers but because of the public improvements resulting from the plan The consensus of opinion of the sponsors is that the workmanship on construction projects compares favorably to that found on privately con- BLUCHER A POOLE State Sanitary Engineer Indianapolis VIRGIL M SIMMONS, Commissioner Department of Comme tion Indianapolis Miss HAZEL B. WARREN, State Library Indianapolis VINCENT YOUKET. Mayor of Crown Point, Secretary, Indians Municipal League Mrs structed jobs. The committee feels it would EDWIN I. POSTON President Indiana Federation of Women's Clubs Martinsville ROWLAND ALLEN, Personnel Director. L S. Ayres 4 Co. be dilatory in its duty if it did not emphatically call to your attention the fact that, with many millions of dollars spent in Georgia, there has been no suggestion of misuse of money by any of the agencies. On the other hand, reporting sponsors commend Indianapoli WILLIAM N. TEALLE Mayor of Lafayette, President Indian Municipal Lengue FRED HOME Chairman Governor's Commission on Unemploy ment Relief, Indianapoli HARRY WENGER Engineer, Indiana Public Service Commission Indianapolis highly the administrative officials. Robert F. MASDOX Chairman State Board of Health Atlanta Carn CALVERT Indianapolis Water Co. EARL CRAWFORD Chairman State Highway Commission Is AUTHOR LUCAS, Chairman, State Board of Public Welfare, Atlanta Prof. R W. HOLMSTEPT College of Education Indiana Uni dianapolis versity, Bloomington Miss HANNAH NOONE Center Township Trustre Indianapolis M. T. SINGLETON, Past President Georgia Chapter American Society of Civil Engineers Atlanta CLIENCE E. ROY President, Indiana County Commissioner Association. Fort Wayne F. D. Blace, Representing American Institute of Architects Atlanta RAYMOND F. CLAPP. Director Indianapolis Community Fund THOMAS Luck, President, Georgia Municipal Association Carrollton Rev. FRANK 8. C. WICKS All Souls Unitarian Church In dianapolis T. Guy WOOLFORD President Georgia Forestry Association Atlanta HARRY BALDWIN Mayor of Anderson Vice President Indiana Municipal League Mrs. C. D. CENTER, President Georgia Congress Parents and Teachers Atlanta DUILEY A SMITH Director, Information and Research Indian Department of Public Welfare, Indianspolis JeanvilleN Moca, President, Georgia Press Association MilledgeMissCouncil, RISOPAAtlanta KAUFFMAN, Executive Secretary. Social Welfare IOWA Miss Macon SALLY AKIN, President, Georgia Library Association, "A fair consideration of the program indicates that the benefits outweigh the drawbacks An increasing number have ceased to seek private employment and would probably refuse it if offered a choice be tween it and work relief they become accustomed to security of a kind, comparatively easy work shor H. M. Gates, President Georgia Educational Association Athens Raum L RAMSET Executive Secretary Georgia Educational Association Athens Mrs Clubs A. B Bainbridge CONGER President Georgia Federation of Women's Miss Voters, JOSEPHINE Atlanta WILKINS President Georgia League of Women hours and goodly hourly pay and are reluctant to work go FRANK M. KIMBLE President Association of Georgia County Commissioners. Poulan back to private employment with a longer 54 ecutive with Director of League of Kansas Municipalities, week, lower hourly wage in most cases harder work, and the uncertainty of steady employment. mittee: suggestions from the following Advisory Com- This Committee believes that there is much prirate work that would have been done during the last five years but for the fact that employers were not able to compete with the government for the workerr. Local communities have shifted their normal improvement program to the Federal Works Proin many instances. It has been too easy to gram secure approval of projects when someone else is JOHN E. BRINK, Deputy Administrator, State Works Progress Administration Topeka H. L. BROWN, City Manager Salina MARTIN, General Attorney, of Muniei- COLEMAN County Engineer Atchimon ALBERT ALFRED Rer palities D. B. League County Kansas Wichita MACDONALD Director, Board of Park Commissioners, Dean DAY. Grace Cathedral, Topeka shouldering the burden of paying. "There is a tendency on the part of the unem- KENTUCKY ployed to drift toward the larger work centers. This Committee believes that efforts should be made to keep families in their own communities, except where a downward economic trend makes future emigration seem inevitable, and to prevent the concentration of needy workers to the ultimate disadvantage "The efficiency of the workers, the quality of work- manship, as well as the quality of workers Need them-for selves, are rising steadily under WPA. WPA, or a similar program in their community, is a permanent condition both from the standpoint of the The jobless and of the communities themselves. physical effects of the work relief program in communities have been good on the whole, will be of lasting benefit, and in many communities constitute the only improvements of this kind that have been of the larger cities. 'There is evidence that the policy of furnishing employment at public expense to every unemployed person is gradually shifting from an emergency to a permanent policy. This, in the opinion of a majority of the Committee members, is most unde- made in a number of years past. The National Youth Administration division of WPA has been greatly appreciated. The State has been provided with a physical educational plant which it badly needed and could not otherwise get. Work relief is favored over direct relief for employable sirable. P. F. HOPKINS, Chairman Director of State Planning Board, Des Moines Mrs EUGENE CUTLER President, State Federation of Women's Clubs Des Moines NORMAN GENUNG Administrator, State Emergency Relief Ad. jobless by all the sponsors." ministration Glenwood J. J. HUGHER Director. State Emergency Council, Des Moines M L HUTTON, Director, State Conservation Commission, Des ROBERT BLAIR Business Manager, The Daily Tribune, Corbin WILLIAM J. HUTCHINS, President. Berea College. Berea President. In. Moines BEN KILCORE Secretary, of A. J. JOHNSON, President, Farmers Educational & Cooperative Union of America, Moorhead FRANCIS JOHNSON President, State Farm Buresu Federation THOMAS J. NOLAN, University Kentucky Kentucky, Chapter, Lexington American stitute of Architects, Louisville THOMAS R. UNDERWOOD, Editor, The Lexington Herald, Lex. Des Moines ington GEORGE J. KILLER, Administrator, State Works Progress Admin- R. A. KENT, President, University of Louisville Dear H. H. KILDER. Chairman, State Planning Board, Ames Mrs.Women's PAUL WICKLIFTE President, Kentucky Federation of Clubs Greenville Dr.Cedar O. R.Falls LATHAM. President, Iowa State Teachers College, Ramm JOSEPH RAUCH. Adath Israel Temple, Louisville istration Des Moines Rara KITTINGER Des Moines E.J. PAXTON Jr. Sun-Democrat Padurah VICTOR MARTIN, Business Mgr., The Democrat and Leader, D. V. TERRILL President. Kentucky Society of Professional Dr. D. w MOREHOUSE, President, Drake University, Des Moines CARL B WACHS, Executive Secretary, Kentucky Municipal Engineers, Lexington Davenport League, Lexington ROBERT O'BRIEN, Business Mgr., Council Bluffs Nonpareil Council Bluffs FRANK PLEACE, Secretary, League of Iowa Municipalities Marshalltown LOUISIANA CHARLES P. STARRETT President, State Grange, Newton "This Committee feels, as do a majority of the public officials who have reviewed the accomplishments of their individual communities, that work created for the able-bodied unemployed in need has been of everlasting benefit to the State as a whole, and that to complete the task of building, so auspiciously begun, it will be necessary to continue the policy of work for the needy as long as economic Dr. O. R. SWEENEY Chairman Greater Iowa Commission Ames Fax WHITE, Chief Engineer, State Highway Commission, Ames WATNE SPEAGUE, Secretary, Des Moines KANSAS necessity demands." J. LESTER WHITE Chairman, Louisiana State Planning Commission Baton Rouge ALCER LOCANINE, State Commander, American Legion New a "The general opinion is that the (WPA) projects are of a higher type (than those of the earlier work relief programs) with more emphasis on the heavier and more permanent public works, but they are also more costly from the sponsor's point of view. Benefit of the work relief programs outweighs, as Orleans whole, the 'necessarily disagreeable features and the adverse byproducts' in worthwhile projects and bene- OCOVAN D. WILDON Publisher Progress Hammond Dr. Pizace CLINE President, Centenary College Shreveport W. T. BURTON, Lake Charles fit to the morale of the men who were to thatTheextent necesat least kept from direct relief rolls. HARVET BENOTT. Mayor of Monroe ROBERT 8. MAESTHI, Mayor of New Orleans JOHN H. OVERTON. Jr., Attorney, Alexandria sity for better planning and planning on a longer time basis is felt We should have a single depart- FRED DENT. State Commander Veterans of Foreign Wars Baton Rouge ment of our Federal Government responsible for all the Federal Government social welfare functions. In Kansas we need a single State department responsible for all our State government social welfare funetions." MAINE In general it may be said that the Works Program has materially assisted the local communities in Report prepared by John G. Stutz, Lawrence, Ex55 carrying the burden of unemployed relief: that many improvements of a highly desirable and permanent nature have resulted; and that the advantages of work relief over direct relief have been conclusively demonstrated. It is assumed that work relief has generally been more expensive (than direct relief). Certainly, however, the results obtained in the form of permanent improvements and in the improved morale of the workers and their families far outweigh this additional cost. At least this appears to be the unanimous opinion of the municipal officials who have filed reports under the present survey. Dr. ELMER CAMPRELL President, Maine Muncipal Association. andW. Mayor of Hallowell PEARL 8 GREENE, Department of Home Economics, University of Maine, Orono ORMEN C. HORNILL, Professor of Government, Bowdoin College, Brunswick FRANKLIN w JOHNSON, President, Colby College. Waterville ACNER P. MANTOR, President, Maine State Federation of Business and Professional Women's Clubs, Farmington STYPHEN E. PATRICK, State Director, Vocational Education F. ASLINE RICHARDSON Master, Maine State Grange Dr.merce OWKN SMITH. President Maine State Chamber of Com. CHARLES J. ROHR. Assistant Professor, Political Massachusetts State College. Amherst Economic Axx. Association, ZETTERMAN, Boston Executive Secretary, Massachusetts Selectives's MICHIGAN According to reports from Michigan public officials and sponsors of Federal Works Program undertake ings, "the work projects have been fitted to the perience and of training of the destitute unemployed ex. in 92 percent the communities "Sixty percent of the appraisals declare that the workers have been kept fit for private jobs. The public facilities created followed the community's long-time planning program in 67 percent of the cases. In all but one of the communities the public facilities built are considered permanent. Purely on the basis of the work itself, the quality of the work. manship is evaluated as good in 61 percent of the communities, in percent. as average in 33 percent, and as poor "Ninety-eight of the appraisals consider that all of the work accomplished under any of these programs would have been beyond the resources of the MARYLAND communities without the aid of the Government." From a statistical study of local reports prepared by State Statistician of the Michigan WPA "Without exception every community is in favor of work relief in preference to the dole for those who are employable Generally speaking. it would MINNESOTA seem that the construction projects undertaken have been well selected and in most cases have been of permanent character-a part of a general plan and "Permanence seems to have been the watchword of the Minnesota WPA sponsors. The reports indicate that the projects undertaken are not only useful but permanent. The quality of workmanship, according to the overwhelming majority of re- much needed by the communities. They were beyond the resources of the community for immediate execution in most cases. Generally the quality of the work has been good The conclusion, from the limited information supplied, is that the non-construction projects apparently have been of value to the community and serve a needful purpose." ports submitted, has been of a satisfactory character It is in several instances favorably compared with results obtained in private industry A very small proportion of the work undertaken under work relief programs would or could have been financed without Federal aid. There is practically usanimity among the municipalities participating in E. B. PASSANO Baltimore Mrs.Women CHAILES E ELLIOUT Voters, Baltimore President. Maryland League of their approval of work relief for persons who may be HAVEY Waiss, Superintendent Memorial Hospital Cumberland classified as employables and to limiting direct or Capt. JAMES H. GAMBILL Jr., Frederick home relief to those who are unemployable." FRANK M. RARIG, Jr. Executive Secretary, Ramsey County Wel- MASSACHUSETTS fare Board, St. Paul H. ARENS, Conservator, Department of Rural Crefit St. Paul R. A. STEVENSON, Dean of School of Business Administration "Through the Federal works program tax rates have been favorably affected, relief burdens have University of Minnesota GUY ALEXANDER County Commissioner, Hennepin County. been met, improvements of a permanent value have been maintained secured and the self-respect of thousands has been The communities appear to be well satisfied with the quality of workmanship. can be stated that with very few exceptions the bur- Minneapolis GEORGE M. SHEPARD President Minnesota Federation of Arthi- tectural and Engineering Societies, St. Paul HERMAN AUTPERHEIDE Administrator, State Relief Agency Rev. L. A GLENN, Executive Secretary, United Catholic Chari It ties of Duluth ANNA DICKIE OLESEN, State Director. National Emergency Council, relief. den of evidence is predominantly in favor of work St Paul 8. E. OLSON President, Minnesota Agricultural Society The relative worth-whileness of the pro- GEORGE A. BARNES, County Attorney, Redwood County. Red. batable." grams to the needy unemployed people is not de- wood Falls 8. L. STOLE Director. Division of Operations, Works Progress Administration St. Paul Miss Boston ELIZABETH M. HEALINY Chairman, State Planning Board Mrs mistress Louis McHENRY of Fall River Howe, Social Service Authority and Post. MISSISSIPPI JOHN tion. F. WALSH, Boston Secretary, Building Trades Employers Associa- "This Committee is of the unanimous opinion that without work relief all counties in Mississippi would H. V. R. sine. Boston SWARTZ. Editor. The New England Construction Maga. now be in a pitiable condition. StockhridgeNoted Author and President, Berkshire County OWEN Association JOHNSON Projects of the highest value in the State of Mississippi have been E those coming under the heading of public works. such SHERMAN Boston CHASE Partner. Metralf & Eddy Engineering Co., as construction of and repairs to public buildings, 56 "The superintendent of the State historical a project to organize its including public schools, courthouses, and municipal It is of this group of in- speaking The of achievement collections, intensely society, said terested scientifieand efficient people has been little less than miracle Ten years work has been done a buildings: construction and improvements to streets, sewer systems, highways, farm-to-market roads, parks the judgand playgrounds, and other similar work designed to achieve permanent improvements in less than a year ment of this Committee that it (administration) has been free from dishonesty, graft, or pernicious politiThe people of the State generally Appraisal sponsors: Nebraska Association of County Commissioners cal influence Nebraska League of Municipalities Works Progress Administration of Nebraska appreciate the work that has been accomplished un- der the work relief program and feel that it has made a real and lasting contribution to the general welfare of our people." NORMAN A Morr, Chairman Mississippi Press Association Mrs H. J. WILSON, President Mississippi Federation of Women's Cluba Mrs. LEWIS H. YAKHOUGH Past President Congress of Parents and Teachers of Mississippi Dr. G. GILLESPIE President Belhaven College Dr. Joe E FRAZIER Secretary, Mississippi Association of Supervisors c D. Ross, Manager, Mississippi Municipal Association R D. Morrow, State Adjutant, American Legion NEVADA "Whereas: Under the various work relief programs conducted with the assistance of the Federal Government in Nevada, civic improvements of the utmost importance to our people have been made possible; our lands have been protected from drought and infestation of crickets and other pests; needed work has been done that, without the Federal assistance, could not have been performed for many years to come. if at all; and the morale and ability to work of our unemployed has been preserved; now, MONTANA therefore, be it "Without the funds supplied by the various Federal relief agencies, none of this work could have been accomplished One of the most noteworthy phases illustrated by the report is the extent to which the Works Program has taught cities to appreciate the value of effective planning Water conservation represents a phase of work relief wherein the projects constructed have a continuing indirect and regenerative value which the State Water Conservation Board reports as 'comparatively equivalent Montana's State entoyearly to their total cost. 'Resolved. That the Nevada State Appraisal Committee, in meeting assembled, does unqualifiedly endorse the various Federal work programs as conducted in Nevada, and does urge the continuance of a work program as the proper means of taking care of the unemployed.' The Nevada State Appraisal Committee consisted of 49 persons, including 19 city officials, 20 county officials, and BREWSTER ADAMS Mrs. CHARLES MAPES Groups TOWNSHEND of the State Board of Relief Work Planning mologist estimates that cricket and hopper control campaigns saved crops valued at $20,000,000. In many respects the committee finds that social benefits of the Works Program are of even greater importance than vast physical improvements. The Committee recommends that work relief be continued in preference to any system of dole relief. Control Pension and ELSA SAMETH Head of Department of Physical Education for Nevada Women, University of Mrs. ALMERT BAILA. President Advisory Council, Parent-Teachers Association of Sparks TOM JOLLY, Secretary, State Federation of Labor MARY STILLWELL BUDL Assistant Director, Agricultural Extension Division University of Nevada JEANNE WIFE, Head of Department of History, University of Nevada Mrs. J. M GLYNN, President. United Parent-Teachers Associa- M. G. THERE President Montana State Association of County tion of Reno Commissioners Fort Benton CLARENCE BLEWETT, Editor Montana Labor News, Butte Mrs. O. G. PURDY, President Nevada Federation of Women's Clubs Genera FINLAY SIMMONS, President, Montana State University, Missoula Dr. W. J. BUTLER Secretary, Montana Livestock Sanitary NEW HAMPSHIRE Board. Helena L. H. VANDYCK, Vice President. Montana State Association of County Commissioners Livingston "On the basis of evidence submitted by State, counties, cities, and towns on the Federal work pro- Dr. FRANCIS A THOMSON President, Montans School of Mines, Butte Mrs. L. H. THOMPSON State Chairman Child Welfare Com- gram it is the opinion of this Comthittee that the mittee. American Legion Auxiliary, Helena Rosert YELLOWTAIL Superintendent, Crow Indian Agency Dr. Louis W. ALLAND Physician and Surgeon Billings D. W. CHAPMAN, State Senator, Daniels County. Peerless greater number of relief workers have given honest labor. The evidence clearly shows that the work- manship has been of good quality on the great majority of projects and of a permanent benefit to B. H. McCARTY. Secretary, Montana State Association of County Commissioners Hardin the communities These improvements would H E RICCIUS, President, Montana Municipal League. Miles not have been possible for many years without Federal aid, particularly on sewerage, water. road imThese necessary things have provement et cetera placed their communities 10 years ahead of schedule We believe that the establishment of the dole able-bodied men and women willing to work for would eventually cause the abolition of our form of City NEBRASKA "The responses were almost unanimous in the opinion that work relief projects are worthwhile and of lasting benefit to the tax-expending agencies. Where definite planned public improvements had government schedules, it was shown that the agencies were about The CHAS T. PATTEN, State Comptroller, Concord LUCIER. Attorney and former Mayor. Nashua 5 years ahead of their proposed schedules opinion is unanimous that a work relief program is absolutely preferred to direct relief from the standpoint of the worker. This opinion is shared jointly by the relief workers, public officials, and the general RICHAND ALVIN A. H. DICKINSON Selectman and Representative to the New Hampshire General Court Danville Miss of HALEN Business T. and MEEHAN, Professional Program Women's Chairman Clubs, State Manchester Federation HENST T. TURNER Telephone Executive (Retired). Laconia public. 57 FRANCIS EManchest KENNEY, City Surveyor and Superintendent of Highways MissCommissi MANGAUT Concord T. GRANT Executive Secretary, Public Library WALTER M. MAY, Deputy Commissioner of Education State of New Hampshire "If there are any persons who still doubt employed want WPA employment City a and final answer. the is experience complete people of want it in desperately New York that work to the permanent New NEW JERSEY "The accomplishments of this Federally-aided community enterprise are to be observed everywhere building York doubts in the terms parks value of of WPA improvements City If to anyone streets his and playgrounds, he has only eyes almost any part of the city and behold to open vision of in transformed facilities." in new or renewed municipal services and facilities, the salvation of public and personal morale among CLENDENIN J. RYAN, Jr. Chairman all classes of the population In spite of the tre- mendous expenditure and the diversified channels through which the funds have been spent, there is yet to be heard any factual charge of scandal or yet to be demonstrated any evidence of maladministration. The record of the WPA continues to be commendable for conduct and execution, and the record of its results, as it is to be written eventually in material terms, is represented largely by works of enduring value The weight of evidence shows that the WPA and other Federally-induced employment must continue if fiscal disaster is to be averted in many New Jersey municipalities.' ARTHUR V. SHIRIDAN, City Planning Commissioner VIRNON S. MOON, Chief Engineer, Board of Estimate WILLIAM HOOSON, Commissioner of Welfare NEW YORK STATE The work program is almost unanimously considered to be worthwhile from the standpoint community needs and benefits to the needy of ployed the public improvements of a construc- unreadable text tion nature have been suited to the needs of the community and are of a permanent character only one dissenting that projects of & construction nature have rendered a definite service non- Mrs ETHIL M. HARLAN. Acting State Director, National Emer- to the community. The officials unanimously stated that the public improvements and services provided would not have been accomplished if they had geney Council, Newark JAMES F. X O'BRIEN Corporation Counsel Newark ARTHUR Newark A. QUINN, Vice Chairman, State Housing Authority, been dependent upon local and State funds With two exceptions. the various officials felt that the quality of workmanship has been satisfactory (And) that work relief keeps the destitute unemployed fit and maintains their employability. Among 114 answers, 113 favored a work relief program for employable relief cases. The Committee is of the opinion that the Works Progress Administration has ably taken care of the unemployment situation in New York State." JOSEN Bono, Publisher, Bergen Evening Record, Hackensack CLIFFCED F MacEvor. Mayor of Oakland METER LengueC. ELLENSIEIN Mayor of Newark, President, Municipal SAMUEL 8. KENWORTHY Former Mayor of Belleville, Secretary, Municipal League NEW MEXICO "Examination of the reports of State, county, and city officials indicates that they are practically unanimously of the opinion that the work undertaken in their communities has been beneficial. Some go so far as to say that their communities have advanced as much as 20 to 30 years as a direct result of Federal aid over the period of the past 6 years. From the standpoint of the morale of the people employed a distinct improvement in both spirit and the amount of work accomplished has been noted under the WPA as compared with the CWA and FERA.' ROBERT C. WHEELER Barker & Wheeler, Consulting Engineers New York and Albany C. A. HOLMQUINT Director Division of Sanitation State De. partment of Health, Albany Hon Groups V i. SPRATT, Mayor of Poughkeepsie V. C. LEWIS, Ex-Mayor of Fulton Dr. ROLLIN A. NEWTON, Mayor of Massens NORTH CAROLINA "The WPA is the Federal Works Program agency which has proven to have been the most efficient The work has been useful and permanent Relief workers have given honest labor to the best Mrs GREEN C. TAYLOR Business and Professional Women's G. SORRELL Parent-Teachers and Professional Club Dr. B CAVITY Pastor, First of their abilities. The workmanship has been Mrs. Mrs Club Hon Ltn VERNON REGERTSON Business Presbyterian Association Women's Church Rev. H. A. ZIMMERMAN, Pastor, First Baptist Church Dean Group P. HAMMOND Representative of State good. Many instances are noted where the finished projects were the equal of similar jobs done by pri- WALTER tration H. OGLESBY Representative of Works Progress University Adminis- vate contract. Work relief is a method better than direct relief for earing for the unemployed NEW YORK CITY The work has helped to keep relief workers fit for private jobs and many reports show that workers have improved their skill status by the training given the competent foremen. The public facilities built "The quality of WPA work has been uniformly as high as that done under contract Speaking generally, I think I can say that nowhere on our are permanent and are of such nature that they serve work relief program today is anyone doing anything thatpublic isn't useful the welfare.and constructive and contributive to the majority of people in each subdivision. Morale and health standards of entire communities have been raised through construction and social welfare that the city has benefited the projects." value of its plant has been creased, Program, "I know and the by greatly Works in- it has maintained services that are in- THEROORE 8. JOHNSON, Consultant North Carolina State Plan- dispensable in a modern growing city." ning Board Raleigh PATRICK HEALT Jr., Executive Secretary, North Carolina League MAYOR F. H. LAGUARDIA of Municipalities, Raleigh 58 NORTH DAKOTA "The program of Federal aid projects is worthwhile to all governmental subdivisions in North Work relief has in the greater number Dakota of instances helped to keep relief workers fit for pri- vate jobs. The permanent projects are found to be as generally permanent as similar improvements constructed in any manner or under whatever plan. It appears that approximately 90 percent of the facilities constructed under Federal aid in North Dakota were not available before. The reports indicate the workmanship has been generally good. It is the very general opinion of all those reporting that work relief is preferable to direct relief." reports, that the prosecution of the various works projects, other than PWA, has been at about a 60 percent standard of efficiency as compared to private contract work, but when it is considered that a great majority of the projects have been initiated without any planning program, and mostly in a desire to put men to work, it is felt that this degree of efficiency is a high one when added to the benefits that have accrued to the unemployed by reason of their employment on the projects. Not one report submitted disagreed with the contention that work relief was far more preferable than direct relief.' N. LEmergency LICHTENCouncil WALNER Chairman State Director. National Max SLEPIN CHARLES M. HAMILTON FRED J. FUPPYRICKSON Mayor of Valley City W BLISS, City Manager of Minot L C. INCTON School of Engineering, North Dakota Uni- RHODE ISLAND versity, Grand Forks According to the reports of State, city, and town R J. HUGHER, Chairman, City Park Commission, Wahpeton Monsts ERICKSON Secretary, North Dakota Farmers Union, Jamestown projects, the following conclusions can be very safely drawn PAULINE M. REYNOLDS Assistant State Club Leader, North Dakota Agricultural College. Fargo DAN BRATILAND. President Fargo Trades and Labor Assembly Call O. JOBERNOO City Auditor of Fargo OKLAHOMA "This drought-ridden agricultural State has been drawn from the verge of economic disaster almost entirely through the job-giving benevolence of the Federal Works Program. Workmanship on WPA projects was equal to or above the high standards of the best contract work WPA workers produced an honest day's labor for every dollar they cost.' HEXAT G. Baskerr, President Oklahoma A and M. College and Chairman of Oklahoma Planning and Resources Board '(1) The WPA projects have certainly been se- leeted for worthwhile purposes. "(2) The work has been very satisfactorily done (3) The municipalities and the taxpayers thereof have benefited or will benefit financially "(4) The work of the unemployed has been kept on a higher plane than possible under a dole system. (5) The opinion of all those administering relief seems to be that work relief should be had wherever possible. '(6) The majority of those reporting are in favor of a continuation of Federal administration of relief of those who commented only one believed that local administration would be preferable. Rev. ARTHUR H. CHANGLER O. P., Dean of Providence College Ross TAYLOR City Manager, Bartiesville E. E. CLARK Vice President and General Manager. American Nin SHIPLER Editor, Lawton Constitution Screw Co.. Providence JAMES E DUNNE Mayor of Providence Prof. M. C. MITCHILL Dr.homa LOON LOCAN,Norman for Dr. W. B. Bissell, President, OklaUniversity, 1. B GRAY. Member Board of County Commissioners Tulsa HENRY J. Lee. State Budget Director and Comptroller Provi- County dence Pitz TATLOR Superintendent El Reno City Schools GRACE M. SHERWOOD State Librarian and State Record Com. OREGON Mas ROYAL TAFT. President. League of Women Voters missioner Providence "The testimony of those reporting clearly indicates that the State and its local agencies have secured much permanent construction and have benefited greatly by the Federal support of work-relief projects SOUTH CAROLINA "The Committee after a long discussion of the Works Program as a whole concludes that the program has supplied useful work to a veritable army of unemployed, and that the projects have contributed immeasurably to the upbuilding of the com- for local benefit "The evidence at hand shows that the experience in all fields State, county, city, and other units- has been beneficial to the governing bodies, and to their people, and that the basic principle of work, for those capable of doing work, is best suited to the maintenance of self esteem, regard for citizenship, and respect for organized government. munity and, indeed, to the physical, material, educa- tional, social, and moral betterment of the whole State. The communities have received benefits which without Federal aid could not and would not have been secured for many years, if at all. The Committee is firmly of the opinion that work relief Report submitted by: LEADUE or ORIGINAL CITIS is preferable to the dole.' Da. J. RION McKISSICK President, University of South Caro- PENNSYLVANIA lina. Columbia Mas C. Y. REAMER South Carolina Federation of Women's Clubs, Columbia "The works programs in Pennsylvania, starting with CWA until the present time, have been of material benefit and have had a most salutary and JAMES H. Hore. Superintendent State Department of Education Columbia Prof. R. L. SUMWALT. Civil Engineering University of South Columbia wholesome effect on the unemployed, and the effects on the communities as a whole have been most bene- Rev. Carolina D. P. BROWN (former President of South Carolina Con. ference of Social Workers). Columbia W. BEDFORD Moore. Jr.. Banker and Attorney, Columbia licial and a distinct aid in bringing about a return to It is felt. from a careful study of the normaley 59 SOUTH DAKOTA SOUTHEAST TEXAS "We find that with few exceptions reports commend the Federal Works Program very highly. Many counties and cities express the belief that if it had not been for Federal assistance they would have been unable to carry on. With the exception of the Government many one county all the units reported were highly in favor of the Works Program rather than the early direct-relief plan. Due to the fact that wages were paid instead of alms, their people were spared the humiliation of pauperism, enabled to keep selfrespect, much suffering was avoided, and only in a minority of cases were these privileges unappreciated. T. HILLARD Cox. Consultant South Dakota State Planning Board Brookings ROBERT D. LUNK Vice Chairman South Dakota State Planning Board Huron Dr. Brookings C.W. POONLY President, South Dakota State College, "We find that cities and counties, cooperating Works Program. have could not made dertaken improvements worth-while by the construction which projects have that spousored been have in sponsoring agencies except possibly 15 or 20 years without this Government after assistance The Works Program has very def- nitely been a program for the conservation as or present works a way to meet human most effective similar resources to and the efficient We believe program program relief the of is needs, same our the both from the standpoint of the workers and the sponsoring agencies." GEORGE SEALY President Galveston Wharf Co JOHN WALKER Walker Lumber Co., Weimar W. JOEL BRYAN, Freeport Mrs. R. E. M. BIOGS L. GRAVES Judge, Houston Liberty Rev. C. E. True First Baptist Church of Brookings Mrs. A.E. MACHEMENL Bellville H. SUHR Houston Mrs E. A. BURKE Recording Secretary, State Federation of W. N. BLANTON Chamber of Commerce Houston Women's Clubs Brookings T. L. EVANS, Chamber of Commerce, Houston Mr.cipalities, A. E. MEADE Secretary, League of South Dakota MuniVermillion RAYMOND J. PENN. Assistant Professor Agricultural Economics Department South Dakota State College, Brookings SOUTHWEST TEXAS NORTHEAST TEXAS "The construction projects are of a permanent nature and so distributed as to be a great benefit to the public as a whole. These facilities were needed Efficiency in the work has improved from the "In the opinion of this Committee, the WPA has proved to be the most economical, socially useful. and efficient agency in coping with the unemployment problem The projects have created in the workers a sense of having rendered a real public beginning until this time. Most of the program both in construction and public service, could not have been put through by the community without service. The Committee finds reflected in the aid of the Federal Government and the unem numerous reports of responsible public officials a wide variety of permanently useful projects carried on in a manner which commands public respect and It is the universal opinion that work relief is better than direct relief, both for the community and for the individual." conclusions unanimously and uninfluenced by anyone connected with the WPA." Col. W. B. TUTTLE San Antonio Public Service Co., Sex ployed. approval Your Committee has reached these Antonio Rev. ALFRID H. RAME St. Mary's University, San Antonio Mrs A H. WORDEN, San Antonio D. R. THOMAS. Chamber of Commerce San Antonio Faxe W. MALLY, Bexar County Court House, San Astenio C. J.Dallas CRAMPTON Executive Secretary, Chamber of Commerce. Dr. College W.J. McConner President, North Texas State Teachers Denton FRANK THOMPSON General Manager, Chamber of Commerce Sherman TENNESSEE WALTER B WILSON, Postmaster, McKinney MORGAN Croox. Mayor of Paris "Our study of the reports of the various county L.F. SANDERS. County Judge. Van Zandt County T. 8. MITCHILL City Commissioner Greenville judges and the mayors of many of the cities of Ten- nessee convinces us that the work of the Works Progress Administration has developed into a well planned and coordinated program for the betterment of social, economic, and health standards of living is NORTHWEST TEXAS "The effect on the unemployed has been very beneficial. The effect on the communities as a whole our State. has been good. The work has been effective from the standpoint of material results, much of which will prove of lasting benefit to the communities, and has greatly improved the morale of the citizenship. taken care of their unemployed, that in most in- 'We have found the consensus of opinion among the local authorities most concerned to be that with out this assistance their communities could not have stances the program has provided such care adequately, and that its by-product has been the permanent improvement of the public domain. "We note also that with practical unanimity these authorities hold work relief to be the most desirable form of public assistance to the unemployed. We believe relief laborers have given honest labor to the best of their ability.' Fort Worth National Bank R. Mrs E HEXAY HARDING, B. President, Worth TRSCC, National Secretary Garden Club, Fort Don Dean Editor Texas FortChristian Worth Bishop Count WEATER D. H. HALL Press University, Fort Worth Fort Worth Boaz, Presiding Elder, Methodist Church South Mrs. MARY FRENCH CALDWELL noted historical writer JENNINGS PERRY Editor, The Nashville Tennessean Vender- Prof. IRRY R. HUDSON Political Science Department, bill University JAMES JAMES M. NORTH Jr., Editor. Fort Worth Star-Telegram H ALLISON Vice-President, Wichita Daily Times 60 The decreases in rates of juvenile delinquency. UTAH "The Federal Works Program has brought great benefit to the communities of Utah: first of all the young men and heads of families. Another benefit backto the communities of Utah is the many newour or improved community facilities some ward communities have made estimated advances which without Federal assistance would have required many years of prosperous development. The work programs have eared adequately for the more acute cases of needy certified employables. In conclusion, the undersigned unanimously believe there can be little question of the general soundness and efficacy of the Federal work relief program as it has been adapted in Utah. The committee heartily recof National Youth Administration has been indispensable in allowing low income and relief youth to continue in school and partake of school benefits and activities. JEASE EPATRIN Research Assistant. Bureau of Governmental CARL GOULD Research University of Washington, Seattle Seattle Architect Seattle Washington Dr. of KENNETH C. COLE Professor, Political Science, University Rev. EMIL Fainces, Pastor, First Swedish Baptist Church Mrs.Voters K M. O'BRIEN. President, Seattle League of Women CHEATER BISSEN, Executive Secretary. Association of Washington Cities WEST VIRGINIA ommends its continuation.' SUMNIR C. MARGETTS Director, State Planning Board Joe Tearn. Minister, First Unitarian Society Gas MARTIN, Chairman, Utah Institute Fine Arts Ges BICKMAN Secretary, Salt Lake Chamber of Commerce G. B. Hest, Editor, Salt Lake Tribune CHALLE H. SKIDMORE State Superintendent of Public Instruction Mrs J. WEST, President, Utah Congress of Parents and Teachers Miss ANNA M. DRISCOLL Coordinator of Girls' Occupations, West High School, Salt Lake City Dr ANTHUR L. BEILEY, Professor of Sociology, University of Utah MILTON B. TAYLOR Executive Secretary, Utah Education Association VIRGINIA Generally speaking. the Works Program in Virginia has created worth-while improvements of lasting value to the communities The quality of the projects, the willingness of the sponsors to assume more and more of the project 'As a result of the activities of the Federal Government destitution has been supplanted by security. low morale and discouragement have given way under this program to optimism. hope, and work These appraisals indicate very clearly that only through the aid of the Federal Government has suffering and even starvation been prevented There is almost universal praise for the type of work which has been done under the Works Progress Administration. Not a single unit reporting contends that these many improvements could Our haveState beenseems secured to be through its own resources. unanimously in favor of work relief as compared with direct relief for employables The effect upon the workers themselves and upon the communities as a whole is much better under the work relief plan." ERNEST BAILEY Director, National Emergency Council WILLIAM BLIZZARD Vice President. United Mine Workers of America, District No. 17 E. 8. MACLIN President, New River State College cost, and the increased voluntary activities of the public bodies in the planning and operation of projects of their choosing, all indicate that the Works Program is headed in the right direction and the combined efforts of Federal and local governments will constantly improve the quality of the program. Mrs. Orts G. WILSON President, Federation of Women's Clubs Maj. FRANCIS W. TURNER Administration Assistant, Department of Public Assistance Mrs. RUTH BELL MILLER President. West Virginia Congress of Parents and Teachers Miss DOBOTHEA CAMPRELL President, West Virginia Federation of Business and Professional Women's Clubs GAME M. Bowers Director, Public Works of Richmond WYOMING Maj. RICHARD MESSER State Sanitary Engineer, Department Richmond Health Public of "The Federal Works Program has been a great aid in securing necessary improvements which would have been impossible had it been left to each community to assume complete financial responsibility Many communities state that they are from 5 to 8 years ahead of the development that would have been possible without the sid of Federal projects. In most cases these programs have covered the field of needy employables except where local financial limitations prevented placing in operation suffi- RATMOND V. LONG, Director, School Buildings of Richmond Maj.Richmond CHARLER J. CALROW. Director, State Planning Board, ALLEN J. SWILLERichmond President, Allen J. Saville, Inc. Engineering Construction ARTHUR H. PETTICKEW. Right-of-way Engineer, Virginia State Richmond Highway Department Miss CORNELIA ADAIR. Principal, Franklin School Richmond City School Board WASHINGTON "The Federal-aid program has been of concrete and tangible benefit to the State of Washington and Due to the finanthe local units of government cial erisis existing in the vast majority of local governmental budgets, these benefits could not have been undertaken or realized without Federal aid. The physical improvement projects have maintained a high standard of technical construction The programs in education and recreation constitute inestimable cultural contributions to community organization Permanent projects have been well cient projects to give work to all. In the main, products of the projects are useful, well planned, and as valuable as men regularly employed could have made them. There is unanimity in the opinion that work relief is more American and more constructive to men and communities than is a dole.' LEALIN A. Main Governor, Cheyenne W. F. WILKERSON President, State Planning Board. Casper J. E. HANWAY Vice President State Planning Board, Casper P. W JENKINS. Member of State Planning Board, Cors R. 8. FUHEMESTER Member of State Planning Board, Sheridan JOHN D. QUINN State Engineer planned, and in many cases have stimulated the development of general community planning Dr. Joses W. Scort. State Game and Fish Executive Chevenne Work pay rolls have meant increased purchasing JAMES DAN W. B. TRUE, State Secretary-Director Highway Superintendent State Planning Board, power to Washington communities The recrea- 8. R. Denors. Consultant, National Resources Committee tional and youth programs have resulted in marked 61 SPONSORS OF APPRAISALS IN THE STATES The State (and city) agencies that sponsored the appraisal in the States were: League of Municipalities (Nine States) Alabama, California, Florida, Kansas, Massachusetts, (Massa. chusettsTennessee, Mayors' Club), New Jersey, Oregon (League of Oregon Cities), Virginia. State Planning Board (Seven States) State Planning Board and South Dakota. Colorado, Georgia, Indiana, Louisiana, Maryland, Wyoming Arizona, North Carolina. League of Municipalities (Two States) State University (Two States) University of New Mexico, University of Washington Co-sponsor and Works Progress Administration (Eight States) Idaho (State Planning Board and the WPA); Iowa (Iowa League of Municipalities, State Executive Council, and the Works Progress Administration (Fourteen States) Mayor's Appraisal Committee TOTAL WPA) Maine (Municipal Association and the WPA); Mississippi (Mississippi State Planning Commission and the WPA): Montana (State Planning Board, Montana Municipal League, State Association of County Commissioners and the WPA): North Dakota (League of Municipalities, Association of County Commissioners and the WPA); Oklahoma (Governor E. W. Marland, Oklahoma Municipal League, Oklahoma Educational Association and the WPA); Nebraska (Association of County Commissioners, League of Municipalities and the WPA). Arkansas, Delaware, Michigan, Minnesota, Nevada, New Hampshire, New York State, Pennsylvania, Rhode Island, South Caro- lina, Texas, Utah, West Virginia, Kentucky. New York City. 42 States, 1 City. 62 165 RE ASSISTANCE TO LATIN AMERICAN COUNTRIES Present: Mr. Lochhead June 16, 1939. 10:30 A. M. Mr. 8. G. Hansen Mr. Warren Lee Pierson Mr. Duggan Mr. Collado Mr. Luethringer Mr. Bonsal Mr. Woodward Mr. Feis Mr. J. P. Cotton H.M.Jr: What I wanted to do was this. I'm kind of reviewing myself. First, I wanted to ask somebody to tell me why we don't go ahead with Brazil and lend them some money. Pierson: Well, we are going ahead pretty well. The shortterm credits of 19 million two are already out, and we've got commitments out for 7 million dollars worth of railroad equipment. We've got two - are operating two export lines, one for 250 thousand, involving cedar oil, one for 100 thousand involving babassu nuts. H.M.Jr: Do those go through the Export-Import Bank? Pierson: The first one has been operating for three months; the other has just been worked out. We have a number of applications pending now for Brazil of a substantial nature: a joint one from Westinghouse and General Electric involving electrification of the Soro Cabana Railway, and another one which we are advised is about to be filed in con- H.M.Jr: nection with the further electrification of the Central Railways of Brazil. Those two together will involve something like 20 to 25 million dollars. Well, that's very encouraging. I didn't know that. 166 -2Pierson: But, of course, for these last two, Mr. Secretary, we need funds. I mean at the present time we are committed up to a hundred million, but we have repayments contemplate. more than enough to cover anything we H.M.Jr: Well, Mr. Jones tells me that the hundred million dollars a limiting factor, that you can go ahead - isn't almost unlimited. Pierson: Well, that is, I assume, if the matter is handled H.M.Jr: Yes. I mean that's one of the things I wanted to Pierson: Well, I haven't any direct information as to how that is to be done. I could see how it could be through the RFC rather than clear up in my own mind. done. H.M.Jr: Well, Mr. Jones tells me it can be done, definitely. He told the President - the President told me that Mr. Jones stated it could be done. And I don't see - I mean I think everything should be done to encourage you to go forward, and if that is hanging over you, I think it ought to be cleared up immediately. Feis: May I say, Warren, that within the last two or three days there are signs of prospective volumes of cotton export financing that may come before you. H.M.Jr: Somebody complained that Morgenthau isn't for the loan to Franco. Pierson: H.M.Jr: Last night. I didn't know they had a pipe line into the Bank. Pierson: They haven't got any pipe line into the Bank. I thought that was your announcement. H.M.Jr: No, I know darn well it wasn't my announcement. But when they came over here that gave us a chance to tell them why we stood as we did. But they had it from two different sources, they say. 187 -3But if we get nothing else out of this meeting, don't you think you could call a meeting and put it up to the RFC so that you could feel that you could go beyond the hundred million and how far beyond the hundred million? Pierson: Yes. Of course, I think that it is desirable, Mr. Secretary, as long as we have the Export Bank, to try to do things through that medium, rather than switching this type of business to the RFC. H.M.Jr: I know. I understand. I think I'm correct on this - it's a question of rediscount. Pierson: That's being studied. But the counsel of the RFC has been working on that, I haven't. I'll be glad to follow it up. H.M.Jr: Well, may I ask you as a - the Treasury, as one of your directors, to call a meeting and clear that thing up, say, Monday? Pierson: Yes. H.M.Jr: I mean today is Friday - that this thing be cleared up right away. Pierson: We put it off till Wednesday because Mr. Jones is going to be out of town Monday and Tuesday. H.M.Jr: But you could put him on notice - you could use me Pierson: Yes. H.M.Jr: But that's one of the principal things that I wanted to get cleared up. Try to do it today or tomorrow. And there are chances for exporting cotton to other Pierson: H.M.Jr: if you wish to and say that personnally - see? places than Spain. Pierson: We have Yugoslavia, and we have increased exports to Poland. 168 -4Feis: One or two other countries, too. Pierson: Bulgaria. Feis: Good business. Pierson: On that other matter, may I just tell you, H.M.Jr: Well, somebody spilled that; I haven't been in Feis: Nothing from our place. Pierson: Not more than three people knew about it. H.M.Jr: Well, we were pretty good - for two weeks kept it quiet that the Fiscal and Monetary Committee was doing a job for the President, and that broke Mr. Secretary, we had no conferences with them; I mean I have had any number of inquiries, but Washington six and a half years yesterday; it was all right. Well, Archie, I haven't got the memorandum of what Mr. Warren Pierson has read here - the possibilities in Brazil. Lochhead: of course, those two small credits - the one for cedar oil was arranged a long while ago, the other one just the other day, just a hundred thousand. Now, these other large credits that you talk about those have been on the fire for a long while for Brazil. Pierson: The railroad equipment. Lochhead: The railroad equipment. Do you think there is any Pierson: Supposed to be settled definitely June 20 - two or three days - in Brazil. Ought to be an excellent more chance of that coming ahead now than there was six months ago or a year ago? Feis: piece of business. Which is this? Pierson: Railroad equipment. 169 -5Feis: How much is involved? Pierson: Seven million dollars. Feis: It's one of the things we put through the Bank. Pierson: A year ago. H.M.Jr: One thing we didn't mention Can we stuff the ballot box? Lochhead: This is not business that started because Aranha ? was up. This piece of business started well over a year ago. Pierson: ( Lochhead: But the electrification thing has arisen since Aranha was here, and the five locomotives we arranged for came through since Aranha But most of this hasn't been brought up in connection directly with Aranha, as something that he came down here and arranged - not a follow-through from his visit. It is natural business that would come to us anyway. Pierson: H.M.Jr: I think that's true. Because Congress is still here - that's why I'm so anxious to have a show-down. I'd like you to get an understanding with the RFC, so that if they haven't got it you get the authority on maybe two or three hundred million dollars more business, if it is there, see? If it is there. What? Pierson: Well, there's another hundred million there for the coming year, if you want to do it. H.M.Jr: Well, if you really went after it, you could do it. Pierson: And do it easily. H.M.Jr: A hundred. Pierson: Yes. H.M.Jr: You could do more than that - around the world, I mean. 170 -6Pierson: Just quoting the survey, talking about South America. And these cotton credits H.M.Jr: Pierson: I think you ought to have it so you could do two or three hundred, if you could. I do, too. H.M.Jr: Now, is there anything before we leave Brazil? Does anybody want to ask anything? Feis: I would if I might. H.M.Jr: Please. Feis: Sorry I was late. I didn't know what commitments the Bank had taken before the Aranha visit. And (several words too indistinct the small credits to be understood) and then there was this small transaction that was voted on its own merits. Beyond that I think one problem is going to be that individual houses walk in here who have a large part of their financing in Brazil - I don't think they should be considered individually, and we have told the Brazilian Government that after they've got some plan of public development worked out, we'll consider financing it; but I think there is a very real risk that active American houses each in their own way go shopping around Brazil, and one picks up an order from this railroad and another from another railroad, and another from the Federal Government, in total running up to a very substantial sum and not having any very clear productive result which you can count on to increase Brazil's exchange resources and, in the final outcome, not working as well as financing of projects more carefully studied with a view to their productivity, and especially the power of Brazil to acquire more foreign exchange. I think the Bank Board ought to have that very much in mind before financing any new individual Brazilian projects. It's happened in other places, where American salesmen go down and get orders, and get them right and left, under a loose - where you've got a loose and feeble central bank, and the total exchange accumulation becomes impossible. 171 -7H.M.Jr: Well, might I repeat the suggestion which I made and I think I gave to Dr. Aranha. I think the best thing we have done along those lines is what we have done for the Chinese with their Universal Corporation, where all the orders are accumulated in one place. They've done it beautifully, and they've done it honestly. We know what they do. They keep books. And everything clears through that. Now, if Brazil could organize a purchasing agency here so we could watch and help them, that would take care of the criticism that Mr. Feis has. Right? Feis: H.M.Jr: Yes. Not necessarily - not for all Brazilian business; solely for the Brazilian business they want to put through the Bank. Only. Only. I've watched that Universal - I had Mr. Chen at the house last night; they're doing a beautiful job. But anything for your money clears through that. You can find out any minute where he stands. And I'd like to suggest at this time, if I might, the thought of having Brazil organize a Brazilian Universal Corporation which would use the money that you give them to buy here; then we've got our figures on it and everything else. And you people know what we do; they constantly check informally with Procurement Division and Treasury as to prices, and we let them know - and we've been able to get them wonderful prices on their trucks, as you know. And you can do the same thing for Brazil. But if they have a thing all set up, then there is no high-priced commission and no strong-arm salesmanship or anything else. I'd like to make that suggestion on the Brazilian thing. What? Pierson: I think it's a good one. H.M.Jr: Aren't you pleased the way the Universal is working? Pierson: Working so well that the companies are squealing. H.M.Jr: We've got them a better price on trucks than we got for the Government itself - the United States Government. We did. 172 8Pierson: Made them take 15 percent of the risk. H.M.Jr: We got them a better deal - for the Chinese Govern- Pierson: ment - than we got for ourselves. But I think it is really - I am very serious about the thought of getting Brazil to organize a trading company here. Well, of course, you know, Mr. Secretary, the thing back in Aranha's mind is the development of the mining resources down there, which is a very big, large-scale proposition. H.M.Jr: Yes, but for the buying of supplies with Export- Pierson: Yes, I will. Lochhead: Mr. Morgenthau, preliminary to that - that might take some time and run into some difficulties - I would like to feel that even if they're not being purchased through a central point, the Brazilian Government has okayed the transaction or knows about the trans- Import money - if they opened an office in New York just the way the Chinese have done - will you give that serious thought? action, we'll say. I mean, in other words, if Westinghouse or somebody else sells 20 million dollars worth, or arranges for a 20 million dollar credit - and the Brazilian Government says, "Why did you do that? We were figuring on our 50 for something else." You can't say you can make them Pierson: Lochhead: purchase directly through - right away - so if they could give consent or at least have knowledge of the credit We have done that so far, Archie, by requiring the Bank of Brazil to guarantee the transaction. That brings it down to some extent. I don't know I mean we get the thing tied up - as long as the Bank of Brazil is a private organization, whether that fully covers it or not. Pierson: Well, we could take it up independently with them each time we have a substantial amount, tell them about it. H.M.Jr: Well, I think we could go ahead much faster on Brazil, if you don't mind my saying so, than we are. And 173 -9- I think the first thing to do Pierson: H.M.Jr: Well, I've been hampered a little bit, Mr. Secretary, by this idea of money not being available. Well, Itd like to help as much as I can to get that cleared up. If it isn't there, then I think - well, Mr. Jones says it is there; let's get it out in the open. Huh? Then, I'd like to bring up the question now of Cuba. lo've been fooling around with it here in the Treasury for a couple years and been partly to blame; we've never done a job on Cube and I'd like to go to town and help as much as possible to do a good (words not job on Cuba, and not just always understood). Duggan: Now, I don't know where to start, but I think that it's important. If anybody has got any suggestion where we could start, we're ready to put our teeth into it and help all we can. We've all - I mean I'm talking for ourselves - we've just been ducking it for a couple years. I'd like to make one suggestion there, Mr. Secretary. You recall that two years ago the Cuban Government sent a mission up here headed by a Mr. Durruthy, and they worked in touch with this department, the Federal Reserve Board, Farm Credit, and drew up a series of projects. I think that those who have studied the projects more recently feel that per- haps they don't adequately respond to the Cuban necessities, but that before being able to make very constructive suggestions we've got to know more about Cuba ourselves; and that would seem to point to the need of sending one or more persons down there. H.M.Jr: Well, if you people will ask us, we'd be glad to send somebody from the Treasury - really make up our mind that we're going to do a job for Cuba. It's awfully - aren't they one of our best customers? Duggan: Yes, they have been as high as our sixth best customer, and I think they are now down to about 174 - 10 - tenth. But they provide a market for about 80 or 90 million dollars worth of goods in good years. Pierson: Of course, Mr. Secretary, what Cuba needs is a five-year program with this country in connection with sugar. That's what keeps them down, you know. H.M.Jr: Duggan: But I know what we've done here, and it's been up, as Mr. Duggan says, for two years; and, talking for ourselves, we've just ducked it, we haven't had man power to do it. Now we are ready to help. I really think the time has come, because of the fact that this possibility - there might be another request. H.M.Jr: Isn't there one now? Lochhead: It's been mentioned in the papers. You haven't anything official yet. It's just been talked about. Duggan: It's been talked about, and the exchanges - the discount is down six percent. And they had a tax survey by Mr. Magill but never put into effect those recommendations. Some assistance there that we might be able to give. I agree that I think the Cuban picture deserves immediate attention. H.M.Jr: I've got one other thing, one other country I'd like to bring up - the question of Colombia. I've had this correspondence with Mr. Braden - is that the way you pronounce it? Duggan: Yes. H.M.Jr: And, as I understand it, there's 15, 20 million Pierson: That's been held up pending the debt settlement. H.M.Jr: Well, is that necessary? Pierson: (Nods to Feis). dollars worth of business waiting there. 175 - 11 Feis: I think it is advisable. We've got a - remember, I approach this whole business - we're running an excess of exports right now larger than any time in our history, proportionately. Therefore, I myself don't approach any of these specific suggestions under any general impulsion that we have to do anything. And I feel that what we do while our basic situation is what it is depends on whether we can see some very broad, long-run objectives of economic relationship as in the case of Brazil, of special relationship as in the case of Cuba, or of special domestic situations, as in the case of cotton. There, I think, we may over- ride many other considerations for special reasons. In the case of Colombia, it seems to me there is overwhelming reason for waiting until they carry through some form of debt settlement. It is a Federal debt. It's been left completely in default. They are paying on many of their other obligations. They are paying interest on banker debts. They are paying interest to French creditors on railway purchases. They are paying interest at very high rates on domestic debt. And the one group of interests whom they have forgotten is the American bondholder. Along with the fact they have done pretty well (words economically, and prospectively as this not understood) they will do better. Now, our general sense was that first, because of the legitimate American interests involved there, and secondly, because all our other default situations exist on which we constantly seek to find remedies, it was good policy to let Colombia know that if they continued this complete and difficult to justify neglect of that bond situation, the American Government wouldn't give her any financial help. And I think it's worth it. I think that's one of the reasons that a few weeks ago finally they got around to presenting a memorandum to the Council with a proposal for partial payment on several groups of bonds. Those discussions are on now. H.M.Jr: Well, I'm going to sec if I can get an expression from the President on two questions. Here in the 176 - 12 Treasury we would like to have the Administration be as aggressive as possible in getting business for our American manufacturers and helping them through the Export-Import Bank. We'd like to be just as aggressive as we know how. And we will prepare a memorandum and send it over to him saying how we feel. Now, that's an expression of our attitude. Number two. I'd like to know whether, where there is 15 or 20 million dollars worth of business that we can get - whether he wants to wait until the private debts of our citizens are settled - I mean whether that is the policy of the Administration, that private debt settlements of our citizens should hold back our doing business through the ExportImport Bank. We've been up against this time and again. Itd like to have it settled once and for all, because we run into it in Cuba. I'd like to have an expression from him. I think what we'll do - we'll use Colombia as an example and ask him whether he will express his feeling on the thing. We have never felt that - we have never hidden the fact that we don't feel that this should hold us back. Pierson: We are now undertaking, Mr. Secretary, to finance private purchases in Colombia. We have one of 250 thousand to submit to the next meeting, and a second one of about 100 thousand. H.M.Jr: Feis: That's just beating the devil around the bush. I mean it would be much - you and I talked about this thing in relation to Cuba before you went down there. You asked me how I felt. I may say on the whole we take less official action in support of private bondholders than any other creditor country. And in many of these situations we are faced with very grave discriminations - well, of And when hundreds, of as such a matter asfact the thousands, of fact non-payment. bondholders write in, it is not easy to take a position of complete indifference. And if you do, you may very well stir up a degree of opposition that is very real. 177 - 13 Then, unless - from the point of view of these countries, unless by some action on these private debts they restore their credit, they are indefinitely dependent upon official credit here or on European financing. H.M.Jr: Feis: H.M.Jr: Correct. That's just Well, I hate to throw them - if they restore their credit here as countries, they reopen for themselves the American financing market. If they continue in perpetual neglect, the prospect of American financing outside of the Export-Import is gone forever. But I'd like to know - I mean it's news to me I thought the Administration wanted to get all the export business they could. Now, if they don't, and that's the way the President feels, why, the sooner I know about it the better. Here in the Treasury we like to be as aggressive as possible to assist American manufacturers to get export business. Feis: H.M.Jr: Feis: H.M.Jr: I can't believe there is any real difference of principle. I mean it's just a difference of obviously, if we are willing to put up 10 billion dollars and give it away, the world will come to us and buy 10 billion dollars worth of goods. I don't believe the Treasury means that. It's sizing up every situation No, but you said as long as our exports are running so far in excess Over our imports, yes. over our imports - I mean the question of stimulating more exports - I think they are very important, and that's just what I wanted to try to find out, and that's the purpose of this meeting. And we've been up against this same thing before, and the time is always so limited each day - I mean if I'm pushing on a front that the President doesn't approve of, I'd just like to know about it. 178 - 14 Pierson: I'd like to give my general position on that, because it differs a little bit from that of Dr. Feis. H.M.Jr: Please. Pierson: That is that we should encourage exports of fundamentally productive equipment everywhere, not only in South America, but everywhere; that one reason we have such a large favorable balance now is due purely to munitions exports of one type or another, and we are losing our railway equipment business and failing to follow up our present other business by not being more aggressive in the extension of credits. H.M.Jr: Well, you and I are entirely in sympathy. I've got one other thing I'd like to bring up. For six months now we have been hearing about Russia having this manganese for sale, that they'd like to sell it. And I'd like to ask the State Department - I mentioned this to Mr. Hull yesterday - how they feel. Before we can give them any credits, there's a question - anybody here from western Europe? - question of a debt settlement, Federal debt settlement. And would you ask them, Mr. - I mean how they feel. I mean would they like us, the Treasury, to take up the question after six years, five and a half years, would they again like us to take up the question of the Russian debt? Feis: At the Embassy here? H.M.Jr: Yes, official, see? Because there's no use talking about manganese or anything else - I mean we can't give them any credits as long as they owe should be done, and we were only 25 million dollars But if Mr. Hull would let me know how apart us this money. I've always thought that this he feels about that - I mean irrespective of anything else. Feis: All right, sir. 179 - 15 H.M.Jr: I was told that they need 50 million dollars worth of machinery very badly - the Russians. Pierson: They'll take a certain amount of cotton if they H.M.Jr: But you can't do business with them - oh, you get machinery. could, but I don't think you'd want to do business with them until we do get that debt thing settled. Pierson: Did that one cotton thing, you recall, through Feis: If you wanted to, I don't think you'd necessarily have to be barred by that. You could put that on the ground that Congress itself in the Export-Import Bank bill exempted the bank from the Johnson Act, so, taking that as a gesture H.M.Jr: Well, I wouldn't initiate anything on this thing Feis: Well, I'll put the question to him. H.M.Jr: But with them having this thing, it might be an opportune time, or it might not. But I wouldn't Feis: The Italian Government is in default and we've given it a cotton credit. The Polish Government the RFC a few years ago. unless Mr. Hull asked me to. is in default; we've given it a cotton credit. So if we wanted to do a Russian deal, I don't think we ought to be stopped just by the debt situation. H.M.Jr: Would you raise it? I didn't have it on my list, but would you raise the Russian question and the question of the possibility of something on manganese? It's been floating around town for months, this manganese thing. Feis: I'll raise the question primarily of the debt H.M.Jr: And also irrespective of the debt, that we want to do something on this question - Export-Import consideration. can't keep making these exchanges for our products. I agree with you they are two things and not necessarily related. But I'd like to kind of clean 180 - 16 - H.M.Jr: up that Russian debt thing. I don't know - how do you feel, have you any feeling on it? Yes. It's hopeless. You think it's hopeless. Feis: I think the Russians will pay the debt when we Feis: loan them a dollar and a half for every dollar they pay. And the reason I feel it is so hopeless is because of their much greater obligations to France and Great Britain, so that the only terms on which they can deal are terms by which we will immediately lend them back at least what they have paid. H.M.Jr: Feis: Well, of course, the original proposition, I think, was - I always remember - was 125 million dollars and we would have established that as e revolving fund for them here to do business. I don't know the details, but it was that order of thing. H.M.Jr: Well, would anybody like to ask me any questions? Duggan: Mr. Secretary, might I take this occasion to state that the Ecuadorean Government has now approached us for general economic and financial assistance. They have quite a chaotic situation down there about which we don't know very much. It is our feeling that before we can get very detailed consideration of their schemes, which are rather grandiose, we should get the recommendations of a road man who is now down there from the Bureau of Public Roads, and that we should send down a general economic and financial man to make a study not stay down there, but just to make a study. And so we were about to take up with Mr. Lochhead the question of finding such a person. And also we have just received from the Paraguayan Government a request for two different experts, one a tax man and another an accountant. H.M.Jr: This expert thing is terrible. I can't get them to work in the Treasury, let alone for Paraguay. 181 - 17 Lochhead: The other question comes - you have, naturally, the question of funds down there. These coun- tries don't want to pay for them. They want us to give them the people. We haven't got the people in the Department; even if we had the people in the Department, you'd have to hire Duggan: Lochhead: somebody else to fill in. The budget doesn't go that far. They're usually willing to pay at least all of their travel and maintenance expenses. Yes, but you know the question we have had on the tax men. We go to our tax department - we simply haven't got the surplus tax people that we can give. We haven't got - I talked to Mr. Bell in regard to an accountant. H.M.Jr: Feis: We've got plenty of accountants. There's a fellow that's been trying to collect more taxes from me. Will you send him down to Paraguay? Lochhead: Well, they've been laying off a certain number of H.M.Jr: I'll give you Morris Tremaine - been organizing a tea party on taxes. I think the problem on experts is something that really has to be solved pretty soon - the question of how you're going to get the experts and how Lochhead: accountants, but because our budget has been down. they're going to be paid. We get all these in- quiries and run around looking for somebody, and you can't even approach them because you don't know how they're going to be paid expenses, salaries, or anything else. H.M.Jr: If you're going to do it - if it's up and you've still got time, let's ask Congress for a hundred thousand dollars for experts to send down to South America, to be given to the President to distribute amongst the various departments as needed. Is that third deficiency bill up? Lochhead: going Mr. Morgenthau, I checked that with Mr. McReynolds - about this question. You had this bill about supplying people to the South American republics. 182 - 18 And I checked with Mr. McReynolds and there was no provision made at all for funds in that bill - I mean additional funds. I mean you're all limited to a budget, we're limited to a budget, and how you're going to get the men without the money to pay for it I don't know. H.M.Jr: How much do you want? I mean for all the depart- Lochhead: A hundred thousand wouldn't go far, when you ask for one tax man and he wants 25 thousand a year to go down to those countries. A hundred wouldn't ments. A hundred thousand? start to cover it. H.M.Jr: Lochhead: H.M.Jr: Two fifty wouldn't? Two fifty would cover you, I think. (On phone) Hello. (Conversation with Mr. Bell follows:) (No telephone record with bell on this date) 183 - 19 H.M.Jr: Well, will you (Lochhead) fix - well, fix me up a letter and leave a place for Mr. hull to sign at the top, and I'll sign it first; and we'll write a letter to the President recommending this. And if you can do it still in time, why, I'll try to bring it up at Cabinet at 2:00 o'clock. Lochhead: Can you do it? Is that rushing you too much? Yes, we can do it. H.M.Jr: We'll be through here in a minute. O. K. How's Feis: Swell. Save us more headaches. H.M.Jr: We might as well ask for enough. It's no more that? different - if Hopkins can get a quarter of a million dollars for 59 experts, why can't we? Quarter of a million dollars enough? Feis: Yes. H.M.Jr: Bell says if he'll see you - fix up a letter and I'll sign it. Shall I send it to your (Feis) office, and you get it in to Mr. Hull; then if he'd bring it to Cabinet and bring it up.... I'd have it that the money - have it read that the money be given to the President to spread amongst the various departments. Let's stop kidding each other, what? O. K.? Duggan: 0. K. H.M.Jr: What? If we did nothing else, that would be - if we get it, it would be a good day's work. Got any other good ideas? Duggan: No, Mr. Secretary. H.M.Jr: 0. K. This meeting is always good. Feis: The field is open for all subjects? H.M.Jr: Absolutely. Feis: Have you had a chance to give any further thought to that meeting of Treasury people in Guatemala? 184 - 20 H.M.Jr: Feis: Yes, I've asked Mr. Hanes whether he'd like to go, and he said he'd love to. Swell too. H.M.Jr: Said he'd love to. He'd like to know a little bit about it. I told him to get in touch with Duggan. Duggen: I'd like to suggest that since this idea was ours, H.M.Jr: our delegation should go down there - rather than as a spectator, should go down there prepared to take a certain lead. Well, what I would suggest is this. Mr. Hanes is carrying a tax bill. He's going to be away in July, but he'll be here in August. So when he gets back in August, I'd go after him and explain to him what you have in mind. Will you? Duggan: (Nods yes). H.M.Jr: What else? Pierson: I would like to have you use your influence on the budget to get them to put through our 109 thousand that we've asked for; there's an item of 32 hundred there that they H.M.Jr: I've instructed Archie to see Bell. And tell Bell to get after the Budget Office. will you tell Bell? Lochhead: Yes. Pierson: I have only one assistant bookkeeper. H.M.Jr: It's crazy. Tell Danny that whatever my influence Pierson: H.M.Jr: is, to put it behind it, will you? Well, let's do this again. I'd like to suggest, too, we have these meetings a little more frequently. Well, you see, this is celebrating the arrival of Mr. Cotton. You see, he's going to follow up on all these things, keep pricking and sticking pins into Lochhead and me, keep us busy. That's his job. 84 lunch DEPARTMENT OF STATE WASHINGTON June 16, 1939. Dear Henry: Bill Bullitt has just told me of his conversation with you at lunch regarding the question of possibility of financing of trade with the Soviet Government even though there should be no debt settlement. He has refreshed my memory as to the discussions that took place when the Export-Import Bank was created, and his memory is correct that at that time the Admin- istration said that financing for the Soviet Union would be dependent upon settlement of their debt. Whether that position still stands unmodified is something upon which you can pass far better than I. Sincerely yours, Herbert heis Herbert Feis, Adviser on International Economic Affairs. The Honorable Henry Morgenthau, Jr., Secretary of the Treasury. 185 186 SECRETARY OF STATE DEPARTMENT OF STATE WASHINGTON June 16, 1939. The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury, and encloses for his information a copy of a memorandum to the American Ambassador at Rome, Italy, from the Commercial Attaché at that post, dated May 31, 1939, with regard to the question of possible countervailing duties on certain Italian goods. Enclosure: Memorandum May 31, 1939. is will RECEIVEDa. 11:10 JUN OAS OLLICE 17 -- TREASURY 1939 DEPARTMENT Secretary the of Office of 187 COPY Rome, Italy May 31, 1939 MEMORANDUM FOR THE AMBASSADOR Today by appointment I called upon Prof. Guarneri, Minister of Foreign Trade and Exchange, and handed to him a copy of the Aide Memoire of May 26, 1939, which the Ambassador had presented to the Minister of Foreign Affairs. I explained that while the Ambassador realized that Prof. Guarneri had no doubt seen the document, he wished in any case to have a copy in Guarneri's hands. Prof. Guarneri, after reading the paper carefully, asked me to thank the Ambassador for his courtesy, which he much appreciated. He characterized as "very useful" the exposition which showed that in connection with the question of possible countervailing duties no policy of singling out Italy was involved. He added that a telegram was being sent to the Italian Embassy in Washington stating that Italy would have no objections to investigations being made by the United States Treasury Department as to Italy's aids to exportation. Referring to silk, he said that while Italy paid a guaranteed price on cocoons in order to sustain the in- dustry, the Italian exporters sold abroad at world market prices, not at dumping prices. He said that, knowing thoroughly as he did Italy's export practices, he could declare 188 -2declare from the depths of his own conscience that Italy was not exporting anything to the United States at dumping prices. He said that he regretted that at a time when con- ditions were as difficult as they are at present, new complications might be presented by the United States, a country which, he remarked, was understood to be either contemplating or practicing a policy of giving what amounted to export bounties on wheat and cotton. Before any action is taken by the United States in the matter of imposing countervailing duties, he said, Italy's situation and result which would have to follow should be thoughtfully considered. He continued in substantially the following words: "If it is made impossible for us to export to the United States, I must say with all frankness that we shall not be able to admit American merchandise and our position will be such that we shall not be able to continue to pay credits due to the United States credits which up to now we have been scrupulously paying, whatever the sacrifices involved." "Italy values very highly its trade relations with the United States," he said. He was the only person, he added, who knew the full extent of sacrifices which had 189 -3had been made to meet its obligations to that country. It had been hoped that an accord for improving trade relations between the two countries would become possible. Continuing, he said that if the American officials would put themselves in his position, they would see that he could not import from the United States unless he had means for payment, and this he could not have without exporting - exporting at world prices; for, he repeated, "Italy is not exporting at dumping prices." At the close of the conversation he said again that he was glad that the Aide Memoire had been supplied; that it was very useful; and that there would be no objection to investigations of the Treasury Department. Charles A. Livengood Commercial Attache 03V1303H P 10 eae thatness " MY to MIII June 16, 1939 9:15 a.m. HMJr: 190 Hello. Operator: Go ahead. HMJr: Hello. Harold Ickes: Hello, Henry. HMrr I: Hello, Harold. Henry, I don't have the same skill in being able to get a decent car for myself as the Secretary of the Treasury, and the Attorney General, and some other members of the Cabinet. HMJr: You don't? I: No. HMJr: That -- that's too damn bad! I: No. I can't get a nice big armored car for myself. HMJr: (Laughter) I: That costs -- especially made, custom made, and all that sort of thing. HMJr: I see. I: All I can get out of reluctant Congress is seventeen hun- dred and fifty dollars. HMJr: How much? I: Seventeen hundred and fifty dollars. HMJr: Yeah. I: Maybe it's eighteen hundred -- eighteen hundred. I'll raise you fifty. HMJr: (Laughter) I: Which -- which isn't much, you know. HMJr: No. I: When I have to -- when I have to do as the Morgenthaus -keep up with the Morgenthaus. 191 -2HMJr: (Laughter) I: Now, I've had a proposition made to me which involves HNJr: I: HNJr: trading in several cars. Yes. And I was wondering why, out of your excess and generosity of spirit Yeah. - you have cars around all the country, you can't provide me with a couple of cars so that I can have enough to trade in and get a decent car. Otherwise I can't. HMJr: What kind of car do you want, Harold? I: Well, I want a -- they are showing me -- telling me about a Packard but I haven't -- I can't afford it -- I can't make the deal unless I have some more trade-ins, and I haven't got the cars to trade in. HMJr: Would a big Buick do you? No. What? No. HMJr: You don't like a big Buick? I: What do you mean a big Buick? HMJr: Well, the seven passenger limousine. I: Seven passenger limousine. HMJr: Buick -- they're a lovely car. I: Have you got one? HMr: Yeah, we've got a three-year old one. I: Well, why don't you give me that to trade in? HMJr: Ah -- if -- are you -- are you serious on this? I'm -- I'm very serious. I: -3- HMJr: 192 Have you -- have you seen the new Buicks? No. HMJr: Well, who's handling -- for -- this for you? I: Who's handling this? HMJr: Yes. Mr. Burlew, as usual. HMJr: Burlew? Yes. HMJr: Well, I'll -- is he handling it? I: Yeah. HMJr: Well, I'll have somebody -- I'll have Captain Collins get in touch with him. I: All right. HMJr: See? Fine ! And I'm sure we can get you a large size Buick. Yeah. HMJr: And -- would you take a look at it? HMJr: Sure, I will. It's a beautiful car. All right. I: HMJr: I'll have Captain Collins get in touch with Burlew right away. I: HMJr: I: All right, Henry. And if that -- if that doesn't suit you, let me know. Thanks, Henry, a lot. -4- I: Righto ! Glad to do it. All right, Henry. HMJr: Good bye. I: Good bye. HMJr: 193 June 16, 1939 9:27 a.m. HMJr: Captain Hello. Collins: Yes, Mr. Secretary. HMJr: Captain C: Yes, sir. Mr. Ickes just called me up himself. He's got HMJr: C: eighteen hundred dollars to buy a car. Yes, sir. HMJr: He saye he can't get the kind of car that he wants. C: Why? HMJr: Hello? C: HMJr: 194 Yes, sir. Now, I asked if he'd looked at a big Buick. He said he never has. You see? C: Yes, sir. HMJr: Would you arrange that they send around a Buick limousine C: Yes, sir. HMJr: And to contact Burlew on it? C: Yes, sir. HMJr: for him to look at? You can get him -- you can get him a Buick, can't you, for eighteen hundred dollars? C: 0: Certainly can, sir. Well, that's as good as I. think, as a matter of fact, for eighteen we might do a little better than a Buick. HMJr: What -- get him an eight cylinder Cadillac? C: Might. -2- HMJr: C: HMJr: C: HMr 195 Well, that ought to satisfy him. Yes, sir. Suppose I check quick with G.M. and see what I can get for that much money. Yeah, well either -- well, an eight cylinder Cadillac is good enough for anybody. Well, it certainly is, sir. Well, see what you can do, and -- and I'd like to sort of, oh, make a little show and get it to him this morning, if possible. Yes, sir. HMJr: What? Yes, sir. I'll get in touch with Mr. Burlew right away HMJr: C: HMJr: 0: HMJr: Yes. and have something down there in about an hour. Send some car over. Yes, sir. Let me know what the results are. C: Aye, aye, sir. HMJr: Thank you. June 16, 1939 11:20 a.m. 1D(Jr: Robert. Hello. Lehman: Hello, Henry. HMJr: How are you? L: Fine. HMJr: L: 196 Bobby, the reason I'm calling you is this. Yes. HMJr: I asked Mr. Keeshin to come in yesterday from Chicago. L: Whom? HMJr: Keeshin. L: Oh yeah, Keeshin. HiJr: The trucking man. L: Yes. HMJr: And the reason I had him come down is, I'm trying to get a group of truck transportation experts to go to China for the Chinese Government. They've bought For the Chinese Government? L: hMJr: Yes. They've bought three thousand trucks and they're buying two thousand more. L: Yeah. HMJr: And it's like going back twenty, twenty-five years; they have no organization to handle it. L: Yeah. HMJr: Now, he's very much interested. He's going to think it over for a week. He thinks he can let -- lend us four or five men, and L: He -- he could lend whom? HMJr: The Government -- the Chinese Government. L: Yes. Right. -2HMr 197 And he's kind of got a hankering to go himself for about two months. Yeah. HWr And he said that Lehman Brothers are his partners, and he thought if I called you up and told you that we, ourselves, are very much interested in having this mission go, that it would help him to make up his mind. Well, -- certainly, we'd like to be helpful, not only to -to you, but to the -- the cause, I mean, of trying -- trying to get the -- 1f there is that group going to help them out. It -- it has -- of course, it's a question of organization with him, Henry. HMJr: Yes. And I don't know -- I'm sure that I'm not well enough advised in that particular situation to be able to -- to give you snap judgment on it. HMJr: Well, I didn't expect that, but he's taking a week to think it over. Yes. HMJr: And he's coming back here next Thursday. You see, I just want to give you one -- one thought on the situation. HMJr: Yes. If he -- if he had a profitable and well-organized situation himself hMJr: Yes. .......it wouldn't make me hesitate to -- to go further in -- in assuring it. HWrr Yes. He has not, up to this point, had what -- what any -- any- one could call a -- a satisfactory situation. Now, that may not be because of his own shortcomings. HMJr: Yes. -3- 198 It may have been because of circumstances, and you know that's a difficult industry. HNJr: Yes. But anyway we certainly -- I'll give it very careful consideration and speak with him about it and also the former partner Well .......Who -- who -- one partner particularly had that in mind -- had that in charge. You see? Yes. Well, you have no doubt as to his own integrity, have you? No, I haven't. He's a -- he's a two-fisted, well-meaning fellow, and I haven't got the slightest doubt as to that. The only doubt I have is, of course, I think he ought to have some guidance if he does any -- he wouldn't be the -the only chief man there, would he? There'd be some other people with him to check HMJ: Well, this is what we were trying to get for them, were technical people. You see? Yeah. HWrr I mean, it's & question of setting up repair stations and that sort of thing. Oh, he's excellent on that. It isn't -- I mean, that's the thing that they need. They have got this two thousand mile highway from-through Burma, you see Yeah. into the back door of China. Then they've got an- MMJ: other one through Indo-China. Yes. HMJr: And it's a question of, 9.8 I say, setting up -- the technical end, to see that these trucks aren't abandoned from the lack of repairs and attention. Yeeh. -4HMJr: 199 Now, the Chinese haven't got any of that. Yes. HMJr: And of course all the -- they are buying all the trucks, all the gasoline, roadStates. machinery, everything, they're buying in all thethe United Yes. HMJr: And aside from our interest, it's just good business to see that we take care of them. Yes. HMJr: And they -- I mean, they pay for everything and they have the money. Yeah. Well, I understand. It seems a very constructive thing. The only doubt -- I haven't got any doubt as to his ability to be helpful in that situation. HMJr: Yes. The only doubt I have is to whether his organization can spare him, because it's one which HMJr: Well needs a great deal of driving and -- I mean HMJr: Well, aren't -- Bobby, aren't you interested in Greyhound? Well, only in a -- in a very minor way. HMJr: Oh! We -- we know the people there very well. HMJr: Well, maybe -- maybe between Greyhound and Keeshin, you could fix us up? Oh, I think that would be possible. It might be possible, but let us -- let us see whether we can find -- if he can't do it himself whether he can make some satisfactory suggestions. HMJr: Yeah. 200 -5- HMJr: I'll let you know, Henry. I'd appreciate it. How are you? HMJr: HMJr: I'm fine. And you? I'm pretty well, thank you. Well I was down there the other day. I -- I knew you were busy; I didn't stop in to see you. HMJr: Well, the next time you're here, let me know a day ahead you're coming and I'd love to see you. I will, thank you. HMJr: Good bye. Good bye. June 16, 1939 3:38 p.m. HMJr: 201 Hello. Operator: Governor Ransom. Go ahead. Hello. HMJr: Ronald Ransom: Hello. How are you today? HMJr: 0. K. R: I wanted to say that I understood our ticker service to say yesterday that you had said that the Treasury would welcome an opportunity to cooperate with any action that the Banking and Currency Committee of the Senate might take under the Wagner Resolution and I wanted to say that I was glad you had said that much and I hoped you felt even more than that. HMJr: Well I didn't see the report myself. It slipped away somewhere and I didn't get a chance to look at it, but I've discussed it with you so often that HMJr: Yeah. I'm greatly interested in your views about it. HMJr: Well, sometime when we get some of this tax bill and stabilization fund legislation out of the way, I'll be delighted to talk to you. R: Will you give me a ring? HMJr: I'll do that. I'd like very, very much to have a chance to talk to you and tell you just exactly what I think ought to be procedure under 1 t. I'd like to check with you. HMJr: And if you don't hear from me, remind me. R: I'll do that. HMJr: Thank you, Ronald. R: All right. 202 GROUP MEETING Present: Mr. Gaston June 16, 1939. 9:30 A. M. Mr. Foley Mrs. Klotz Mr. White Mr. Haas Mr. Duffield Mr. Bell Mr. Gibbons Mr. Graves H.M.Jr: Well, what do you know, Herbert, anything? Gaston: No, I think not. H.M.Jr: Gene? Duffield: Nothing. H.M.Jr: Ed? Foley: I have a memorandum here on the Mead bill hearing yesterday. John's brother testified, and two or three others - say there's no need for it. They're going to have the final meeting on the Schenck case this morning at 10:30 over in Morris's office; and our fellows feel, Phil tells me, that as a result of these conferences our case has been strengthened and we are going to put up a united front this morning. H.M.Jr: Foley: H.M.Jr: Foley: H.M.Jr: Well, according to the Attorney General's statement last night, he's gone out on the end of a limb and sawed it off on himself. He made a statement last night they were going to prosecute - this morning's paper - did you see it? No. The only statement I saw was in the news bulle- tin last night. Yes, that's the one. Well, I thought he hadn't decided yet. "Murphy Quizzes Three Film People Their position is that they had no intention to defraud the United States, and they will pay whatever money they owe. 203 -2He said the offer has not been accepted." " Foley: H.M.Jr: That's right. The purpose of this meeting is to determine whether they will accept the offer or whether they will bring criminal proceedings. I've read those summaries of those three bills. Looks all right to me. The papers seemed to have most of it this morning. Either Turner Catledge or Bob Allen - he believes I'm a spender. Very amusing. Foley: That didn't come out of my shop, that leak. H.M.Jr: Jesus, the most sensitive people around here. Duffield: Guilty conscience. Foley: H.M.Jr: I haven't got a guilty conscience. I'm making a statement. If I thought it came out of your shop, I'd say so. Any other good news? Foley: (Nods no). H.M.Jr: No, I'm highly amused. And Herbert did a good job on the Franco thing. Some so and so gave it out to the press that I was opposed to this loan to Franco for cotton, and Herbert told them why, on account of this suit. I mean to lend a follow 15 million dollars who's suing us - offset one against the other and where are we? Gaston: H.M.Jr: UP and INS both got it independently. Got it from somebody. Most likely State Department. + don't think Jesse works like that. Dan? Bell: Yes, sir. (Mrs. Klotz comes in) 204 -3H.M.Jr: Hello. Klotz: Good morning. Bell: This is a memorandum of the conference at the White H.M.Jr: Good. Bell: And I'll have a memorandum today of the two conferences in the afternoon, one with Secretary Wallace and the other with Senators Bankhead and Russell. House. Here is the bill to provide for the alteration of bridges, so forth, which the President sent you, Mr. Foley seems to cover it very well. What do I do with it? which I have had for some time. Memorandum by H.M.Jr: Bell: It's a little long. The President said, "Speak to me about it." Probably you should read the memoran- dum. I think the last paragraph tells you what should be done. Some time ago H.M.Jr: Bell, excuse me - didn't I ask you, Harry, to write up some meeting for me, keep minutes on some meeting? White: Week ago Sunday. H.M.Jr: Did you do it? White: I've got it written up, but haven't corrected it. H.M.Jr: It's on my desk. You notice how Bell comes through in 24 hours. White: Did he? H.M.Jr: Yes. White: Well, mine is as good as theirs. Just a question I dictated the meeting, but I just didn't go over 205 -4it; so II don't more, mean.have to depend on my memory any H.M.Jr: I have this peculiar memory, you know. White: I have too; that's why I dictated it right away. H.M.Jr: Well, supposing we put the two together and see Klotz: It was at your house. H.M.Jr: Yes. Klotz: Yes, we have a record. H.M.Jr: I haven't got enough to do today, so I try to - that Mrs. Klotz gets it. I just remembered. Anything else, Dan? Bell: Yes. Some time ago, I think probably in 1935, Mrs. Ross directed the Mint at Philadelphia and the Assay Office at New York to pick out some old gold coins - they were sorting out the gold coins - to pick out certain ones, certain types. Now, they've done that to the extent of about $70,000. H.M.Jr: Yes. Bell: Those things are held in the Treasurer's account. H.M.Jr: Yes. Bell: Unless somebody wants to dispose of them in some way, I'm inclined to direct that they be melted up. H.M.J Bell: Oh, don't do that. Well, they are held out there on the Treasurer's account. What are we going to do with that? Just hold them? H.M.Jr: We'11 use that as capital to start a loan to small businessmen. 206 -5Bell: Gold loan, huh? H.M.Jr: Oh, no. Old gold coins? Bell: Yes. H.M.Jr: Oh, hang on to them, Dan. Bell: We've got most of them, haven't we? H.M.Jr: What? Bell: We have some in the Federal Reserve Bank. H.M.Jr: I know. Did I ever get that collection from Bell: H.M.Jr: George Harrison? He had two collections. He promised to let me have one if he could keep the other. Did he ever come through? I don't know. Follow up on that. I was going to give it to the Library of Congress. He's got two complete sets of gold coins. He promised me one. I want to give it to the Library of Congress. Will you check? And keep that $70,000. I mean what have you got all those bookkeepers for, anyway? What else, Dan? Bell: Like to get these old items eliminated once in a while. We're getting quite a few inquiries about the calling in of the July notes from bankers - on Commodity Credit guaranty. They want to keep the notes, to the extent of about a hundred million; they won't all keep them, but a good many of them want to keep them. H.M.Jr: Yes. Bell: I think we ought to take the position that that's a Commodity Credit corporation affair and if they want to extend them another year at one percent, we wouldn't object. That's a little higher than we have to pay, but included in that is a quarter of one percent insurance, so that it makes the return to the bankers three quarters of one percent and keeps it in the bank. 207 -6H.M.Jr: Danny, I don't like the way the Commodity Credit lets those special - I think it's much better to put those in at the market Bell: You mean as guaranteed obligations. H.M.Jr: Yes. A two-year note - what will we pay? We were talking of a two-year note. What will we pay for a two-year note? Bell: Oh, a half maybe. H.M.Jr: Well, I think - you yourself - I mean now the other day we were talking to the President about getting the RFC to charge railroads and others less interest and the President said, "Well, Jesse said you're charging them too much." You were there. You said, "All he borrows from us is 250 million at one percent." Now, the fellow that's borrowing on the cotton has to pay four, doesn't he? Bell: Yes. H.M.Jr: Well, I'd much rather sell the two Bell: In theory. H.M.Jr: sell the two-year note, 200 million dollars, in the market at a half of one percent, then let them drop the rate to the farmer. Bell: I think we ought to have a conference on it, Mr. Secretary, with John Goodloe and Jesse Jones. H.M.Jr: Well, all right, you do it. Bell: Because it has some implications H.M.Jr: I know, but it's just a little racket. Bell: Yes, I think it is, but you have certain banks in the South that have always made cotton loans; that's been their business for a century; and I think maybe you want to think twice before you take that business away from them. 208 -7H.M.Jr: Well, listen, they can still make them, can't they? Bell: No, because the Government loans at a higher rate, and of course they're not going to go into the bank and get a loan at five when they get it at eight from the Government. H.M.Jr: Get what? Bell: Get a loan at five cents a pound when they can get it at eight cents a pound from the Government. H.M.Jr: Well, Danny, I think the whole thing is wrong. Well, I think the whole rate thing is wrong. You're the fellow who brought it to my attention. I think the whole thing, the way the Commodity Credit does it, where the farmer pays four percent Well, in theory only. Bell: H.M.Jr: Bell: H.M.Jr: He is charged four percent. Bell: Charged four percent. Hasn't paid it yet. H.M.Jr: I think it's all Bell: I think we ought to have a general conference on it. H.M.Jr: I wish you would. I think it's all. wrong. I think we've got to begin to break the rate that the RFC is charging. He's going to have the thing - this is just as good a one to go to bat on as anything. Bell: May we have a meeting with you? H.M.Jr: I don't want it. Bell: You don't want it. H.M.Jr: You handle it, that's your responsibility. You brought it to my attention. There is no reason in the world why they should pay over three. 209 -8White: As Archie points out, even if they don't pay it, you cut the losses, which is desirable. I mean there is no reason you should lose as much Klote: H.M.Jr: What was that? Even if the farmer doesn't pay it, we'll cut the Government losses. Klotz: He's right. H.M.Jr: I'd like to go to bat on this one as an example. Let's break these interest rates. If we can borrow money for two years at a half percent, why should the farmer pay four? Bell: Well, the bank gets two and a half percent, and in that two and a half percent they have to service the loan, they have to take insurance, they have to search the titles, and they have to guarantee the titles. There's a great deal of administrative work which I'm afraid will cost the Commodity Credit Corporation a great deal more than two and a half percent, if we have to set up the agencies over the country H.M.Jr: Well then, where is the one and a half, between the two and a half Bell: Well, where you get the one and a half is for underwriting the loan, which of course again is theory. H.M.Jr: But it's taken out. Then they go to Congress - we send up a bill for 128 million dollars, and Jesse makes one and a half percent. Bell: H.M.Jr: No, no. That's the Commodity Credit. Jesse Well, Commodity Credit. If the money is worth hrlf a percent, why should they get one percent? Uiderwriting what? Bell: The losses to the banks only. H.M.Jr: Well, it isn't the losses to the banks, it's the losses to the United States Covernment that they get one percent for. 210 -9Bell: H.M.Jr: Bell: H.M.Jr: Bell: H.M.Jr: of course, that's right, it is a loss to the Govern- ment. Well, Dan, will you look into it? Yes, I'll have a conference. You brought it to my attention. I know I did. You go to town on it. I think it's cockeyed, and I think this is as good a thing to start trying to crack those rates on as anything that I know. White: Moreover, I think, generally in government it is highly desirable to eliminate as many hidden subsidies as possible, and if the banks are entitled to some additional service charge and whatnot, they ought to get it in some other form which is observable, rather than getting it in what appears to be a legitimate interest rate, when actually they are getting a hundred percent more than the market rates. Duffield: Bell: Duffield: This is the type of loan, however, that is more popular with the small local bank in the farming community than it is with large city banks, and so if you are That's right. ....if you do anything that cuts their yield to the banks, you are hitting the class of banks which you are least anxious to hit. H.M.Jr: Well, that's all true, but let's be forthright about it. Duffield: Well, surely. H.M.Jr: I mean how can I approve borrowing money at one percent when I know I can borrow at a half of one percent? Now, if we've got to do something for the banks, let's pay them a service fee for their work. You went through this thing with me on Social Security. Now look at what the banks are doing for Social Security on those checks, and what do they get out of it? Why, 211 - 10 - they do fifty times the work they are doing for Commodity Credit. Bell: Yes. We put a balance there. Well, of course, H.M.Jr: Well, they're terrifically expensive, Dan - what they are doing for Social Security. That's right, that is expensive. Terrifically expensive. And if I was a bank in Bell: H.M.Jr: Bell: that's ferent. a check service. This is a little dif- Boston or New York or Chicago, I'd say, "Well, I'd like to get some one-year paper at one percent, too." They follow a policy that as soon as these notes drift into the larger cities, such as New York - central reserve cities - they immediately take them up, but as long as they are in the country banks that have been financing cotton and wheat and corn loans, why, they encourage that. H.M.Jr: Well, Dan, you and I understand each other. Bell: I think so, yes. H.M.Jr: But don't - I mean let me know when you get it, one way or the other. You handle it, will you? Got anything else? Bell: That's all. H.M.Jr: George? Haas: I have nothing except the May figures on this cash outgo. H.M.Jr: Thank you. Harry? White: There's a report that has just come out - you may have seen it - from the National Industrial Conference Board, a study on needs for loans by small 212 - 11 - business; and their conclusion is that there is no need, and they've got a study, but H.M.Jr: That shows how fair-minded you are. White: Yes, but I have some comments on that. H.M.Jr: What else? White: Then I have here - it also shows how fair-minded - here is an independent report on how good the WPA program has been. I think it is well worth reading the summary. And here is something on Cuba and something on Colombia. That will take you only a moment to glance through before the meeting. H.M.Jr: Let Archie handle it. White: I won't be able to be here at 10:30. I was wondering if I couldn't have the men in my staff who work on it H.M.Jr: O. K., one man. White: One man, all right. Now, Harry, just so there's no crossing of wires (to Foley) Harry is going up at 10:30 to see H.M.Jr: Senator Wagner. White: With Bernstein. H.M.Jr: With Bernstein. But, so there is no misunderstanding, on the Hill the General Counsel's office, represented by Larry Bernard Foley: Larry Bernard. H.M.Jr: ....I'm holding him responsible for the stabilization bill, and him to you (Foley). See? So Foley is Foley: There's been no crossing. Harry and I have worked together. 213 - 12 White: Just going asked. up to - got a lot of questions he's H.M.Jr: Just keep me posted, see that I know what happens this morning. White: Yes. H.M.Jr: O. K. White: Did you notice in this morning's Times the drive for the two billion dollar expenditure? I think it insures the passage of the bill, if there was any doubt of it, because Glass and his cohorts, when to... they see that, will faint in their eagerness H.M.Jr: Did you see what I said yesterday when they asked me about the price of silver? I said we'd make the price late in the afternoon of June 30. And then they said, "Well, supposing the bill doesn't pass." I said, "Well, I'm so sure the bill will pass, I haven't even looked at it." "Well, supposing that it doesn't pass." I said, "Well, I don't know whether I can do anything then.' " I thought that would throw a little scare into them. But I want to personally be kept posted on this stabilization fund bill between now and Monday. White: On the Canadian letter with respect to securities, I talked it over with Bernstein preliminary to a general conference and his suggestion was that he thought the SEC, who had been in on it, might get a copy of the letter. H.M.Jr: White: No, I'm afraid. You don't want that. And there is also a reference there to commodities. 214 - 13 H.M.Jr: Well, I'll change that. Listen to this, Ed. Foley: Sorry. H.M.Jr: The Minister of Finance of Canada - do you think a copy of his letter should go over to Chairman Frank of SEC? Foley: I haven't seen it. H.M.Jr: I suppose it should, in confidence. White: I'll see that it goes from Ed to him. H.M.Jr: Yes, but over my signature. White: And there is a reference there to their willing- ness to cooperate with respect to commodity markets, and you had spoken to Secretary Wallace about that at the time. H.M.Jr: Yes. White: Do you want to ask him whether he wants to do any- H.M.Jr: Yes. White: And send him a copy of the letter with that part thing further on it? marked. H.M.Jr: Yes. What else, Harry? White: That's all. H.M.Jr: I'm getting Archie? Lochhead: London lost about ten million dollars yesterday, with the pressure developing. This morning they've lost about three million so far. It doesn't seem to be very much of a drive, but there is a drain on them. 215 - 14 - Incidentally, silver in the London market went off today to forty-one and a half cents. It's cents. are running little around forty-two They getting been a uneasy We've hadthere. a couple of offers of forward from London - first offers they've made to usselling for quite a while. I think in the news dispatches this morning it said that one of the demands of the Japanese on the British is the turning over of the silver in Tientsin that's been held in the International Bank. The Japanese want them to turn that over. The general market - the stock market is opening a little lower; Government bonds are off about 5/32nds again. H.M.Jr: When they go off, they are Bell's bonds. Lochhead: I think they are feeling very much better with a three-quarter five-year note outstanding. H.M.Jr: What's that? Lochhead: I think we're all feeling much better with a threequarter five-year bond out. I don't see anybody H.M.Jr: worrying or asking about the market now. (Pats himself on the back and rubs his elbow). Klotz: What's that for? H.M.Jr: White: H.M.Jr: I always say I do it by the old elbow. They wanted me to do a long-term bond this last time. I told my own crowd I was afraid of the Government bond market. I didn't want to have that get out, but I hope you continue to feel that way for a long time to come. Well, I'm on a 24-hour basis, Happy, in case you don't know it. Harold? Graves: I have this report about what happened in New York. 216 - 15 - It's not nearly as bad as it looks. Most of that is newspaper clippings. H.M.Jr: Oh. Graves: It seems that Mr. Cahill's account of what transpired is substantially accurate, although what happened in respect to this proposed arrest was nothing more than that Mr. Hoey and his chief deputy were quite insistent in their talk with Cahill that an arrest should be made; that they had been instructed early in the morning that they were to make no move to detain Miss Dietrich except on the advice and approval of Mr. Cahill; and I think the point was that these people pressed Mr. Cahill pretty hard to Foley: Graves: To make the arrest. to make the arrest. Foley: I think that's what John was saying. H.M.Jr: Well, that's all right. Did you see the telegram Klotz: I got from her? You must read it. H.M.Jr: This is from Marlene Dietrich: "I am grateful to you for listening to my tale of woe this morning. But what is a poor creature to do when confronted by two huge representatives of your department with orders to shoot on sight, three hours before sailing? " White: Maybe she doesn't know. H.M.Jr: "Thanks again." - "Love and kisses." White: You see, she answered her own question. H.M.Jr: I talked to Mrs. Morgenthau this morning and I told her about the conversation and that this was Henry's friend - what you (Haas) said about it. She said, "My, you're getting poor Henry a bad reputation." Anything else, Harold? 217 - 16 Graves: Nothing. Gibbons: Nothing. Did Jim get hold of you yesterday? H.M.Jr: Huh? Gibbons: Did Jim get you on the phone yesterday? H.M.Jr: Yes. Just called up to say hello. Gibbons: H.M.Jr: I'll give you a memorandum of some stuff that I've picked up. Fine. 218 TREASURY DEPARTMENT WASHINGTON June 16, 1939 TO THE PRESIDENT: Under the Act approved May 3. 1939, the President is authorized, whenever he finds that the public interest renders such a course advisable and upon agreement with the Government of any other American republic, or the Government of the Common- wealth of the Philippine Islands, or the Government of Liberia, if such Government is desirous of obtaining the services of a person having special scientific and other technical or professional qualifications, to detail under certain conditions for temporary service to any such Government, any such person in the employ of the Government of the United States. Several requests have been received from South American Governments for the detail of employees of the United States Government having special knowledge of governmental functions and some of the Departments of the Government, because of large lump-sum appropriations available to them, are in a position to make these details without interfering with their regular work. There are some, however, and this is particularly true of the Treasury. which are not in a position to make such details unless additional funds are made available to them for this purpose. The State Department considers this an important matter from the standpoint of our relations with the South American countries. In. view of the importance which is attached to this matter it would seem advisable, and it is so recommended, that the Congress make funds in the amount of, say, $250,000. available to the President to be allocated by him to any Department, not otherwise having funds available, for the purpose of making the details authorized under the above-mentioned act. President said no at cabinet. 12mg June 17, 1939 10:03 a.m. HMJr: Jesse How are you? HMJr: Pretty good. How are you? I'm pretty good. J: How are you standing the hot weather? Jones: 219 HMJr: Not too good. J: Not so good? HMJr: No. J: Oh, I think you're getting along pretty good. HMJr: Yeah. Well J: You're going away today, are you? HMJr: I'm going to go down to the airport now in a couple of J: And you'll be back when? HMJr: Monday. J: You've got no more financing for -- until -- before when? HMJr: J: HMJr: J: minutes. Well, the next thing we've got 16 Commodity Credit. That's about the I haven't got the exact date, but Yeah. Dan said he thought it would be about the first of July. HMJr: J: HMJr: J: Yeah. Somewhere in there. Yeah. Right in there, or August sometime. Now, we were talking yesterday -- he and John Goodloe were to talk and they asked me to talk with them. Yeah. You had mentioned, I think, to Dan the advisability or possibility of reducing the four percent rate to the farmer. -2- HMJr: J: 220 That's right. Well now, I wanted to give you this thought, that wherever you give one fellow something in one branch every other customer of the Government wants as low and as favorable. HMJr: J: HMJr: J: Well That's just the of it. You get the Well, you've been getting your money at one per cent or less Well, this is -- they don't, many of them, pay these notes anyway. HMr: I know, but you haven't passed much of that along, old man. J: Huh? HMJr: You haven't reduced that much. J: Well, another thing, this is going to be -- of course I'm -- I'm just as much of a Socialist as anybody else. HMJr: J: Well, I'm not going to compete with you on that basis. Well, you would be on this. HMJr: (Laughter) J: You would be. HMJr: No. Well -- it's J: Well, I'm just HMJr: I think you J: HMJr: J: Before -- well, here's what I'd like to do. You're getting too ritzy over there in the R.F.C. Yeah, what I'd like -- well, I -- we've got plenty trouble. HMJr: Yeah, plenty -- too rich. J: Huh? HMJr: Getting fat off us. -3- J: HMJr: 221 We've got plenty trouble. We're trying to keep it hid. Yeah. Want to get it -- keep it hid until after 1940 anyway. HMJr: J: HMr: Yeah. At least until after November, 1940. Yeah. Before we decide on that I'd like to talk with you about it. HMJr: All right. J: Is that satisfactory? HMJr: Yes. I'm willing for Danny to say it's me, but just -- but it was Danny that brought it up. J:- Uh-huh. Well, all right. HMJr: It's all right, but I'll -- I like to talk to you because I -- I'm perfect -- I think it's been, oh, now about a year since you' ve been saving one or two per cent interest, and you hang -- hung onto it like a -- just like everything else. J: (Laughter) You mean you want me to join the Hopkins' crowd, huh? HMJr: J: HMJr: J: No, but I don't want you to get too rich. You want me to kind of move over a little bit. Well, I'd like to talk to you about it. I would like to talk with you. HMJr: O. K. J: All right, when you get back. HMJr: Thank you. J: I'll be out of-Monday and Tuesday. HMJr: Oh. J: So I'll talk to you when I get back. -4- J: So I'll talk to you when I get back. HMJr: O. K., Jesse. J: Good bye. 222 223 June 17, 1939 My dear Mr. President: I am inclosing herewith John Hanes' third progress report on the Tax Bill. Yours sincerely, The President, The White House. 224 June 17. 1030 My dear Mr. Presidents I as inclosing herewith John Hanes' third progress report on the Tax Bill. Youre sincerely, The President, The White House. 225 June 17, 1932 My dear Mr. President: I am inclosing herewith John Hanea' third progress report on the Tax Bill. Yours sincerely, The President, The White House. 226 June 16, 1939 To: Secretary Morgenthau From: Mr. Hanes The Subcommittee of the Ways and Means Committee on Internal Revenue Taxation at its meetings on Thursday. June 15. 1939 made the following decisions with respect to matters to be included in the revenue bill: 1. Subcommittee voted to make the tax on firearms and ammunition permanent because its proceeds are used to care for migratory birds. 2. Subcommittee voted (by roll call 7-4) not to make corporation tax amendments applicable in 1939. 3. Subcommittee considered proposal of Mr. McCornack to exempt from income tax. voluntary employees' beneficiary associations whose members are exclusively officers and employees of the United States. It was agreed (in the absence of objection) that this shall be included in the bill if it can be done without delaying drafting. 4. Mr. Treadvay moved that net loss carry-over be changed to allow a carry-over of 1938 losses. This was rejected by the Subcommittee (by vote). 5. Mr. Treadway moved that net loss carry-over be extended to partnerships and individuals. This was rejected by the Subcommittee (by vote). 227 June 16, 1939 The Secretary To: Mr. Hanes Front At the meeting of the full committee of the Ways and Means this morning final draft of the bill to be reported to the House was read and explained in detail. During the course of the hearings in the past week I have felt a strong sentiment developing both on the Democratic side and on the Republican side for extending the loss carry-over provision to all types of business. During the hearings before the subcommittee such an amendment was offered by Mr. Treadway and supported by all the Republicans. On the Democratic side there is strong sentiment for the amendment, one Democratic member of the subcommittee voting present and two others voting against the amendment, but as they put it, "reluctantly." It was decided at a caucus of all Democratic members of the Committee this morning that before the full committee net, the Chairman of the subcommittee would offer an amendment to extend the loss carry-over to individuals and partnerships, in accordance with the language which was in the statute prior to 1932. The Treasury estimated the loss of revenue from such a revision to be approximately 8) millions, based on 1939 estimated income. It is my belief that the intention of the Ways and Means Committee is to introduce the bill and recommend its passage without further amendment. Further, I do not believe any additional amendments will be considered by the Senate Finance Committee other than hanguage clarification, in which several members of the Committee are interested. It is my hope that such may be the case and that we can avoid the necessity of sending the bill back to conference on any vital point. It is my earnest hope that the bill will so encourage expansion of business activity that the taxable base upon which we have figured the 1939 revenue estimates will be appreciably increased. The fundamental problem confronting us in the Treasury is to do everything within our power to get the net corporate taxable income back to a base equivalent to that which we had to work on in 1926, 1927, and 1928, namely from 9 to 11 billions. As you know, the basie upon which we estimated 1939 revenue was only 6) to 7 billions. It is my opinion that a magnificent start has been made in this direction and if the Ways and Means Committee will adopt your suggestion whole that a committee be appointed to begin work on July 1st on the tax problem, we can do very constructive work for the country during the next six months. JWH:ce 228 June 19. 1939 Ny Cost Mr. President: I as inclosing herewith a fourth progress report from John Hanea on the tax bill. Yours sincerely, the President, The White House. 229 June 19, 1939 My dear Mr. President: I an inclosing herewith a fourth progress report from John Hanes on the tax bill. Yours sincerely, The President, The White House. 230 June 19, 1939 My dear Mr. President: I as inclosing herewith a fourth progress report from John Hanes on the tax bill. Yours sincerely, The President, The White House. 231 June 19, 1939 My dear Mr. President: I an inclosing herewith a fourth progress report from John Hanes on the tax bill. Yours sincerely, The President, The White House. 232 June 17, 1939 Secretary Morgenthan Mr. Hanes The Ways and Means Committee on Internal Revenue Taxation at its meeting on Friday, June 16, 1939 made the following decisions with respect to matters to be included in the revenue bill: 1. The Committee agreed to extend the two year net loss carry-over to all taxpayers including individuals and partnerships. 2. The Committee agreed to extend the relief from tax in cases of discharge of indebtedness to any corporate evidence of indebtedness, eliminating the requirement that such evidence must have interest coupons or be in registered form. 3. The Committee voted not to repeal the nuisance taxes. 4. The Committee voted not to make the corporation tax changes effective in 1939. 5. The Committee voted to report out the bill favorably. 233 COPY June 17, 1939 To; Secretary Morgenthau From: Mr. Hanes The Ways and Means Committee on Internal Revenue Taxation at its meeting on Friday, June 16, 1939, made the following decisions with respect to matters to be included in the revenue bill: 1. The Committee agreed to extend the two year net loss carry-over to all taxpayers including individuals and partnerships. 2. The Committee agreed to extend the relief from tax in cases of discharge of indebtedness to any corporate evidence of indebtedness, eliminating the requirement that such evidence must have interest coupons or be in registered form. 3. The Committee voted not to repeal the nuisance taxes. 4. The Committee voted not to make the corporation tax changes effective in 1939. 5. The Committee voted to report out the bill favorably. (Initialed) J.W.H. LWS:mrm June 19, 1939 10:34 a.m. HMJr: 234 Hello. Operator: Mr. Pearson. Hello. HMJr: 0: Go ahead. HMJr: Hello. Warren Pearson: Good morning, Mr. Secretary. HMJr: How are you? P: Fine, thanks. HMJr: Warren, we've had quite a discussion here on the -- what you called us up about Saturday, on this cotton loan to Spain. P: HMJr: Oh, yes -- yes. Now, of course, what you're asking us to do is to give you legal advice, and -- as I understand it -- in regard to what sort of guarantees P: HMJr: No, I think we only wanted the -- to know who -- who ought to give any release. Well I don't know the parties to the suit. HMJr: Well, we've had a long discussion and my General Counsel advises us that the -- that we, the Treasury, will not be satisfied unless we get a written guarantee from the Bank of Spain P: HMJr: I see. plus a guarantee from the Minister of Finance of Spain. Now, we're taking the same position we took with Belgium where the Bank of Belgium was privately owned, and in the case of the Tripartite Agreement, we insisted on the guarantee from the Bank of Belgium and the Minister of Finance in Belgium. I see. Now, what we'd really want to release from the Bank of Spain and -- some kind of a -2a written document. HMJr: P: HMJr: 235 Yeah. I want a written document from the Bank of Spain and a written document from the Minister of Finance of Spain that if this loan is made by the Export-Import Bank that -- that they won't use that to offset P: HMJr: Yeah. the money which they are suing the United States Treasury for. ?: Yeah. HMJr: And I can't tell you how strongly I feel on that. P: Well, I'm inclined to go along with you. HMJr: Now, as I say, I want written documents both from the Bank of Spain and from the Minister of Finance. P: 0. K. HMJr: And up to the time that we get those written documents P: I see. HMJr: the Treasury 16 strenuously opposed to such a loan, and I understand from Mr. Hopkins that he is in complete accord with me. P: I see. HMJr: I mean, that -- that he takes whatever position the Treasury does; he -- he goes along. P: Uh-huh. HMJr: Now, once we get the -- the written assurance from the Bank of Spain and the written assurance from the Minister of Finance, why, as far as the suit is concerned, we feel that the interests of the United States Government are taken care of. But lacking that we feel that it's just -- well, it's just the heighth of stupidity to make such a loan. P: All right. 236 -3And Mr. Hanes, and Lochhead, and Foley, and Gaston are all here and that we're -- that the Treasury is -- is one on this. I mean, we're -- we're moving together on this thing as we always do. All right, sir, I'll I'll make one other suggestion. I think that, for your own sake, that you ought to check this and inform Mr. Ha c kw orth what position we're taking on this. will you say that again, Mr. Secretary? Iknow. think that Hackworth or -- or Walton Moore ought to Yeah. Well, I assumed they had been informed, but HMJr: No. Well, it's not -- well, it's not up to us to inform them. P: Yeah, but I mean their representative certainly must have, but I'll see to it anyway. Well, I wouldn't take any chances, because I think if you get this to Walton Moore I don't see how he can take any other position but say the Treasury is right, -- or Hackworth. Yeah. HMJr: P: I mean, I'd be simply amazed if either Walton Moore or Hackworth didn't say the Treasury is right. Well, the State Department 16 one of them that has been pressing me on it, you know. HMJr: Pardon me? P: The State Department has been the chief one that was ad- vocating it. HMJr: P: Well, when you say "The State Department," who -- who do -who in the State Department? Well, I mean, it -- it came to me through Feis. I don't know how much Yes, but this is a legal matter now, and that's why I'm suggesting that you advise Walton Moore or Hackworth. -4- 237 Yeah. HMJr: Preferably Walton Moore Yeah. of our -- of the HMJr: Well, I -- I mean, that's what I would have thought myHMJr: self. I mean, this -- these two at least. And I think if I'm -- I have a very high regard for Walton Moore and I don't think as a fair person that's interested in the United States Government that he could take any other position. No. Now we're ready -- if you need anything else, you can call either Foley or myself or Lochhead. We're all here. Well, I mean, this is what we -- want to know what you thought about it, and that's the -- they seemed to be the obvious people to get releases from. HMr Yes, but we want them in writing. I mean, I -- I wouldn't take the guarantee of the Ambassador here. You wouldn't, huh? No, sir. I want written documents from the Bank of Spain and written documents Of course, I think that will -- I think that will do away with the credit right away. HMJr: Well, that's something else, but I can't - that's all... P: I mean, if we have to wait until we get the documents. HMJr: Well, that's something -- I can't help that, but I can get it -- move fast and get it -- the -- all the members of the Tripartite and get it from the Bank of Belgium and Minister of Finance, who are a good risk, I should think we could get it from these. How many -how many bales of cotton are they talking about? Oh, they're talking about forty thousand bales. 238 -5HMJr: P: Yeah. Well, that's the position. We've discussed it here for forty-five minutes. It isn't arrived at lightly. Yeah. O. K. HMJr: Thank you. P: Righto ! 239 June 19, 1939 11:02 a.m. Operator: Go ahead, please. HMJr: Wallace's Sec'ty Hello. Hello. Hello. Hello. Just a moment. Secretary Wallace. Henry Wallace: Hello. HMJr: Yes, Henry. Henry, I thought you'd be interested in this. I've got W: a letter from Oscar Johnson who is probably supposed to be leading the fight against the export subsidy HMJr: Yeah. in which he says: "If Congress makes available to you an adequate fund for subsidizing the export of cotton from HMJr: Yes. I think that undoubtedly you will be able to increase exports above what they would otherwise be to the extent of a million, or possibly a million and a half, bales." " W: HMJr: W: HMJr: # the '39 crop Yeah. "I think that the result of such a movement from the '39 crop would be to give a domestic price substantially above the 52 per cent of parity, Uh-huh. the loan level. Probably at a level which # W: .... would make possible withdrawal of some cotton impounded under the '38 loan." HMJr: W: Yeah. "Thus accomplishing at a cost of probably between 45 and 60 million dollars the movement of the entire crop at a price level of between nine and a half and ten and a half cents. HMJr: I sec. -2- 240 "The cost would be from forty to possibly sixty dollars per bale applied to the amount of cotton moved as a result of the subsidy." I don't quite get that, but HMJr: Yeah. "I am inclined to think this cost would be justified by the result provided the program be limited to the '39 crop, but I am definitely of the opinion that as a permanent program the export subsidy would be ruinous to the industry." HMJr: Uh-huh. I was out of town Saturday, but he had dropped in to see Evans, the -- the Triple A, on Saturday. HMJr: Yeah. W: And Evans reports that the feeling about the subsidy the export subsidy plan, was much improved among the people in the trade. HMJr: I see. I thought you'd be interested in knowing that the situation had changed HMJr: I a.m. quite a bit from what it WRS. Well, how are you getting along on the Hill? Well, I -- I don't know. I went out to Milwaukee to Oh. political affairs at Jin's request, so I haven't had my hand in HMJr: Well, I've heard nothing. I've had no communication with anybody. Yeah. HMJr: Except -- I've had noth -- nothing at all. Yeah. -3HMJr: 241 I -- I consider I'm out of it. Uh-huh. HMJr: Unless the President sends for me why I -- I won't initiate anything I assure you. Uh-huh I thought you'd be interested in knowing about Well, this situation. HMJr: W: Ithat am.the And, as I say,isunless Treasury out ofhe it.sends for me I consider Uh-huh. HMJr: And W: Well, we HMJr: W: HMJr: if he does send for me I'll let you know. All right. Thanks, Henry. All right, Henry. W: Good bye. HMJr: Good luck. 242 June 19, 1939 11:27 a.m. HMJr: Hello. Operator: Mr. Messersmith. Hello. HMJr: 0: Go ahead. HMJr: Hello. George Messersmith: Good morning, sir. HMJr: M: How are you? Oh, I'm -- I'm just reveling in this change in the weather, Mr. Secretary. HMJr: Right. Me too. Mr. Messersmith, Mr. Merle Cochran came down today for the first time. You know we've let him stay up there with his wife. Yes. Is she getting any better? HMJr: She's out of danger. She's out of danger? HMJr: Yeah. Uh-huh. HMJr: Now, what I told him was this. I told him of my conversation with you; I don't know-whenever it was, a month or so ago, and that the State Department decided that they wanted to move him out of Paris. Yes. HMJr: And that I had made the suggestion at that time of the possibility of sending him down to Brazil. Yes. And since that time Mr. Archie Lochhead, who is the manager of our Stabilization Fund, has had an offer to go into private business and expects to go sometime next fall. -2- 243 I see. And that I was going to make a new suggestion to the State Cochran Department, Merle to us and that was that they detail Merle -Yes. to Here in Washington? Here in Washington. Yeah. To take the place of Archie Lochhead. Yeah. HMJr: And that he be detailed here to stay here for the balance of Mr. Roosevelt's Administration. Uh-huh. HMJr: With the understanding that I would be at liberty to send him as a trouble-shooter to any particular spot where we were having trouble with foreign exchange. Yes. Well, now, I don't -- I think that would be very HMJr: good. The only -- I don't see -- I'll just have to look at the law for a moment to see about enabling us to detail officers, but I think we could do that. Well, I don't know -- I'm -- I'm making this -- this suggestion, you see? Yes. And if you were free to see him this afternoon, he'd like to see you and talk M: Yes. Well, he can come in any time this afternoon. HMJr: Well, he isn't in the room now, but I told him that I'd ask you for/time and let him know. a M: HMJr: Yes. Well, he can come in anytime this afternoon. What - do you want to name a time? 244 -3 Well, I should say about four o'clock. HMJr: I'll tell him four o'clock. Fine ! HMJr: What do you think of this suggestion? Well, I think -- I think myself that he's a very useful man, and I think that the suggestion would be -- is a good one. HMJr: You see, supposing we had some trouble anywhere, I'd have the benefit, the Department would have the benefit, and I can send him wherever it was necessary. M: Right ! HMJr: And to break in a new man from the outside on the M: HMJr: Stabilization Fund, well, I just haven't got the time. Well, it would be -- he would make an ideal man for you there, wouldn't he? I think so. Yeah. HMJr: And if it could be done legally it would be very pleasing to me. Well, I -- I certainly -- I believe it can be done, but I'll just have to look at it to make sure. HMJr: Righto ! M: Fine ! HMJr: Thank you so much. M: Thanks a lot. June 19, 1939 11:37 a.m. 245 Operator: Go ahead. HMJr: Hello. Doughton's Secretary: Mr. Secretary? Talking. HMJr: How are you this morning? S: HMJr: I'm fine. How are things with you? S: O. K. The Senator asked me to call you and Mr. Hanes and to tell you that he's calling the Finance Committee tomorrow morning at ten o'clock to executive session to begin on the tax bill. HMJr: Wonderful ! Now, he said to tell you that he wanted you all to know about it and that if you wanted to make -- come up and S: make a statement it was all right; if you didn't, it was all right. That's up to you. HMJr: S: Wonderful ! Now, tell -- of course, he'll expect one of the two of you, naturally. HMJr: Well, Hanes is sitting across the desk from me right now. S: Well, you'll tell him then. HMJr: Now, you tell the Senator that I'm going to be at Princeton tomorrow to see my oldest son graduate. S: Oh, well HMJr: And that Mr. Hanes accepts the invitation with alacrity. S: (Laughter) That's right. HMJr: And that he will be there to talk for the United States Treasury. S: All right. Now, another thing, Mr. Secretary. Senator Harrison asked me to tell you all that you could bring the Commissioner along with you, but I understand he's sick. Is he away? -2HMJr: 246 Yeah, he's ill. Oh, he is? Well, tell Mr. Hanes to bring whomever he wishes to bring with him then. HMJr: All right, he can bring And be here in the morning. HMJr: He'll bring 21 experts with him. (Laughter) Good bye. HMJr: Good bye. 247 June 19, 1939 12:52 p.m. HMJr: Hello. Walton Moore: wood morning, Mr. Secretary. HMJr: How are you? M: Pretty good, sir. HMJr: Mr. Moore, I want you to do me a personal and an official HMJr: favor, and it -- and it won't be very difficult. Well, I'll say "Yes" before you state it. Well, that's fair enough. I -- I'm having prepared a -a summary of this brief which has been filed by the Spanish Government suing the United States Treasury, and I'd like to send that over to you and ask you, both as an American citizen and as Chairman of the Export- Import Bank, if you would take the time to read that. I'll be glad to do it. HMJr: And I'll have Mr. Foley -- he's preparing it -- and he'll get it over to you shortly. All right, sir. HMJr: M: HMJr: But I -- I would very much like to have you look at that. I'd like to do it. Thank you so much. 248 June 19, 1939 To: The Secretary From: Miss Lonigan E.L. The total number of WPA workers on June 7. 1939 is 2,591,950. The decrease from the week ending May 31 to the week ending June 7 was 6,335 workers. 249 WORKS PROGRESS ADMINISTRATION Number of Workers Employed United States Monthly W.P.A. Employment Weekly W.P.A. Employment 1937 1939 1938 WILLIONS WILLIONS SEPT. MAY MAR NOV. MAK. SEPT. ITEM MORREAS or WORKERS WORKERS 3.5 3.5 3.4 3.4 3.2 1.3 3.3 3.2 3.2 2.8 3.1 3.1 3.0 3.0 25 2.4 2.9 2.5 2.0 2.7 2.0 2.7 2.4 2.6 2.5 2.5 1.6 2.4 2.4 2.3 2.3 1.2 2.2 2.2 2.1 2.1 2.0 .8 2.0 1.9 1.9 1.5 .4 1.5 1.7 1.7 1.6 0 1936 1937 1938 1939 1.6 SALE 111 TOPY: MADE JAN. a1939MAR. 1938 JAN. SOURCE: WORKS PROGRESS ADMINISTRATION Office of the Secretary of the Treasury Research and States MAR. MAY NOV. 250 WORKS PROGRESS ADMINISTRATION Number of Workers Employed - Weekly United States Week ending Number of Workers (In thousands) 1938 September 3 September 10 September 17 September 24 3,171 3,197 3,210 3,219 October 1 October 8 October 15 October 22 October 29 3,228 3,224 3,266 3,300 3,346 November 5 November 12 November 19 November 26 3,364 3,359 3,345 3,319 December 3 December 10 December 17 December 24 December 31 3,287 3,241 3,186 3,124 3,094 1939 January 7 January 14 January 21 January 28 3,070 3,030 3,001 2,986 February 4 February 11 February 18 February 25 2,966 2,966 3,011 3,043 March 4 March 11 March 18 March 25 3,032 3,009 3,015 3,009 April 1 April 5 April 12 April 19 April 26 May 3 May 10 May 17 May 24 May 31 2,980 2,906 2,761 2,752 2,751 2,734 2,660 2,622 2,609 2,598 2,592 a/ June 7 Source: Works Progress Administration Confidential WORKS PROGRESS ADMINISTRATION Number of Workers Employed - Monthly United States 251 Number of Workers (In thousands) 1936 July August September October November December 2,249 2,377 2,482 2,581 2,483 2,192 1937 January February 2,138 March 2,146 2,115 April 2,070 May June 1,999 1,821 July 1,569 August September 1,480 1,451 October 1,476 1,520 1,629 November December 1938 January February March April May June July August September October November December 1939 January February March April 1,901 2,075 2,395 2,582 2,678 2,767 3,053 3,153 3,219 3,346 3,319 3,094 2,986 3,043 3,009 2,751 2,598 a/ May Source: Works Progress Administration a/ Confidential Monthly figures are weekly figures for the latest week of the month. They include certified and non-certified workers. 252 June 19, 1939. 9:30 A. M. GROUP MEETING Present: Mr. Hanes Mr. Gaston Mr. Foley Mr. Duffield Mr. Haas Mr. White Mr. McReynolds Miss Chauncey Mr. Lochhead Mr. Bell Mr. Gibbons Mr. Graves H.M.Jr: will you (Gibbons) make a note that Mrs. Wiley arrives on Chauncey: Here you are, Mr. Gibbons. Gibbons: W-1-1-e-y? H.M.Jr: Yes - wife of American Minister to Latvia. She Gibbons: I'll take care of that. H.M.Jr: I mean I'm personally Gibbons: I know him personally. H.M.Jr: Somebody go down to the harbor and meet her. She's Gibbons: He's the fellow that straightened out the alcohol arrives on the Manhattan on the 22nd, and I'd like somebody to go down to the harbor, meet her, see her through. coming in on the Manhattan. And tell him in Belgium. H.M.Jr: That's right. He's a fine man. (Hanes comes in) Hanes: Good morning. Lochhead: Good morning. Gibbons: Hello, John. 253 -2H.M.Jr: See that somebody goes down special. Cibbons: In talking to General Watson this morning, he says the President is going along with Senator Minton on the appointing of Mr. Greenloe# or Greenleaf Collector of Internal Revenue. H.M.Jr: Yes. Is that Collector of Internal Revenue for Indiana? Gibbons: Yes. They've put out a Collector of Customs out there and put in another chap. This is the Internal Revenue fellow that they're trying to put out now. H.M.Jr: Who has the facts? This is.... Gibbons: Guy is very much against it. Gaston: This is a very satisfactory Collector that's in McR: We wrote a letter that you signed - the letter to H.M.Jr: Yes. McR: Recommending against it. H.M.Jr: Well, the President's secretary instructed me to MOR: Greenloe hasn't been Gaston: Got to ask for the other's resignation first. McR: There's been no investigation of Greenloe. H.M.Jr: there now. the President - and that's the one where you told me to leave off any reference to the Florida cases. We sent that over. make out the commission for Greenloe. Well, John, you're Internal Revenue and I'm not going to - there's about four people answering Hanes: Yes. H.M.Jr: What? *Correct spelling "Greenlee". 254 -3Hanes: Looks like this was all done. H.M.Jr: Well, they say there's no investigation. Will Hanes: Yes, sir. H.M.Jr: you take it? I mean this is a verbal request from the President's secretary, asking us to make out the commission. And you know my policy. I fight up to the time I get a direct order. Huh? Now, this direct order Iit?don't know what the facts are, but will you take Hanes: Yes, sir. McR: of course, the White House has never required us to make a submission until an investigation has been H.M.Jr: made. I think they would undoubtedly stick to that. Oh yes, but I'm not - there's one, two, three, four people. Now, I want - one is enough, and.... - what? I mean everybody is interested, but I - you're willing to.... - what? Hanes: I'll take it. H.M.Jr: Handle it in the regular way. And let's hope that Greenloe is just a teentsy weentsy crook. H.M.Jr: Well, we'll take our instructions from John on it. I can't do business Gaston: The newspapers out there are a good deal interested McR: because if it's done it apparently is as flagrant a case as that one down in Florida, where they just get politically out with a man and want to kick him out. H.M.Jr: McR: Well, my dear Herbert, I have written a letter to the President saying - what? Saying it would be most unfortunate to take the man. Gaston: I know about the letter. 255 -4H.M.Jr: Caston: Cibbons: H.M.Jr: I'm up to the point that I either carry out the President's order or give my resignation. I don't think it's worth my resigning for Mr. Greenloe. Or you might still want to hear directly from the President on it. The President has had several letters which he has never seen - protests from people out there. All true, but I have found in General Watson's case that when he passes something along - I mean I've heard him go in and ask the President specifically. I'll ask the President at lunch myself. Make a note of it. Chauncey: Uh-huh. H.M.Jr: You people have been with me long enough to know - Hanes: All right. H.M.Jr: She sat next to me at dinner at my house - did I tell the story? - she kept asking about it. I kept saying we'd have a commission investigate it. She said, I mean it's either a question - I mean I don't believe in fudging on these things with the President. I think either give him the service or get out. You'll see the letter I wrote the President. In there was a paragraph saying that this is like the Florida case. I said, "Mac, leave that out; if we lose on this, we may lose on Florida." But when I do it for Florida, I personally want to tell Mrs. Pepper I'm doing it for her, if you don't mind. "But you don't say yes.' I said, "No." Well, anyway, let's look into it. I'll leave it with you. Hanes: H.M.Jr: All right. Another thing I got. When I had Bullitt at lunch on Friday, I asked him whether he felt that at this time the debt settlement with Russia would be helpful in the world picture or not, and he got very much excited about it and said it wouldn't help, and that originally the first Export-Import Bank 256 -5was gotten from Congress with the distinct under- standing that if we gave Russia a credit it would only be after she made a debt settlement. I said that in discussing the thing with six or seven representatives of the State Department I raised the question and Feis said it wasn't necessary to settle the debt with Russia, we could go ahead and make a credit, and that we had given them a credit. Well, of course, the reason that Bullitt is so excited about it is that he failed in the debt settlement - making the negotiations - and he doesn't want anybody else to make it. Right? White: Well, I H.M.Jr: Let me read the letter from Feis: "Bill Bullitt has just told me of his conversation with you at lunch regarding the question of possibility of financing of trade with the Soviet Government even though there should be no debt settlement. Well, it's Feis that said we didn't have to have a debt settlement. "He has refreshed my memory as to the discussions that took place when the Export-Import Bank was created, White: and his memory is correct that at the time the Administration said that financing for the Soviet Union would be dependent upon the settlement of their debt. Whether that position still stands unmodified is something upon which you can pass far better than I." The point is, if you're going to give them something, it will be highly desirable to get something in return. And anyone who settles that debt at this time - and the conditions are rather easy of settlement there now, both private and public debt - will accomplish a rather brilliant stroke. His opinion on that score isn't very significant. H.M.Jr: Well, you weren't here, but Lochhead can remind me. I brought up the question that if there was going to be any credit to Russia or exchange of manganese for cotton, we ought to first settle the debt. And Feis said, "Oh, that isn't necessary," and Warren Pierson said, 'That isn't necessary. Didn't I take that position? 257 -6Lochhead: You took that position, and Feis corrected you, said, "We're settied their giving debts."loans to Italy and they haven't White: It isn't a question of its being necessary, it's a H.M.Jr: I was surprised at his position, that he doesn't question of its being a very able move. want the conditions changed any from what he tried to do and failed six years ago. I'm going to ask the President at lunch about Russia. I also was amazed at Mr. Feis's position. He made two statements here the other day which were both amazing. One, that we don't want to encourage any more exports. White: Who said that? H.M.Jr: Feis. And two, that we shouldn't do anything more in South America, as in the case of Colombia, as an example, until they settled with the private bondholders. He made both statements and then when I called him on them he backed down on one or both of them. White: I should think so. H.M.Jr: But he made the flat statements. White: Would he make them publicly? H.M.Jr: No. But what he said is the Department of State - White: I'd like to see that made public, if it really is. H.M.Jr: Well, I'm going to smoke him out. White: I think Congress would be very interested in that. H.M.Jr: We also smoked out the fact here that another reason they are holding back - that Warren Pierson can't get any word from Jones that he can loan above a White: the State Department policy. hundred million dollars. I'm going to try to smoke that out. With this Russian debt, there is one difference from other government debts, and that is that 258 7- H.M.Jr: there is a private debt involved here - lot of Americans - makes it substantially different. I know. I went all through that originally. White: Yes, I know. H.M.Jr: But I don't think in the final analysis that Bullitt ever wanted to settle it. I don't know why; I never understood why. But the agreement was that they'd settle around 125 million dollars; it was all fixed, and then, for some reason or other, when he got back to Russia - I don't know why - it was never done. You see, after he makes this statement, it all comes clear why we are not going ahead with Brazil, because they haven't yet definitely made a payment, you see, on the private debt for July 1; and I think the State Department has just put the damper on the Brazilian deal until they come through. Now, Bolivia - Braden's got a swell proposition down there. White: Colombia. H.M.Jr: No, Braden. White: You said Bolivia. H.M.Jr: I didn't say any country. Braden - he's got a swell proposition. And what they do - they put the damper on it and these fellows can't get anything; they are just driven into the arms of the countries who do business on a barter basis. Months and months pass and the State Department just - I smoked them out. It was very interesting. Don't you think that was a good meeting, Archie? Lochhead: H.M.Jr: White: It was a very good meeting. I would like to have had it followed up a little further. It will be at lunch today. According to the papers, Aranha's already beginning to modify the position which apparently they took when they were here, and they are only going to make a token payment. of course, they'd be suckers to 259 -8do anything else, to make a payment of 40, or 30, million dollars in order to borrow 50 million dollars, which is what the State Department wanted them to do. And why should they do it? This could have been foreseen six months ago. H.M.Jr: Well, look, it's a little interesting - at Princeton Gibbons: Me? Pan-American Airways? H.M.Jr: Yes - Vice President and General Counsel. Gibbons: Cooper? H.M.Jr: H.M.Jr: I didn't get his name. Little fellow? Yes. He lives at Princeton. Gibbons: Yes. H.M.Jr: He said that their 45 percent interest in the Chinese Airways is one of the most profitable investments they've got. Officially they have with- Gibbons: yesterday I met the Vice-president and General Counsel of Pan-American. He wanted to send you (Gibbons) his regards. drawn all their support, but their best men have stayed behind. And there is regular service every night from Hongkong to Chungking - every night night plane. And he said it's a tremendous money maker. Officially they have nothing to do with it, but their best technical men are there, you see. It's just making a tremendous amount of money; and they get the money out. But every night there is a plane from Hongkong to Chungking, and they fly right over the Japanese lines - mostly American naval men. Isn't that interesting? One of the Lochhead: most profitable investments they've got. In connection - excuse me - with Brazil, there's one cable that came in Saturday. I'm holding it up. I called up the State Department. It was signed by Caffery, and it says that the Director of Exchange states that Japan bought quite a lot of cotton from them in Brazil and that they financed it with credits on Mitsubishi and the Yokohama Specie Bank in New York. The New York 260 9- banks haven't discounted these drafts, won't discount then, and so the Director of Exchange had asked Caffery to give them any information about it and send it up. So I told Collado I couldn't understand why Caffery or anybody in the State Department would send up a cable like that and I didn't see - I thought it was up to them to answer it or not to answer it. As I said, the idea of asking us - it looks as if it was an indirect request that we ask the New York banks to discount Japanese paper to finance cotton shipments out of Brazil. I said, "It's just too crazy for me." H.M.Jr: Well, those of you who are interested in Japan if you'll read Hugh Byas's cable yesterday in the New York Times - very, very excellent. I'd like a copy to take over to the President. Yesterday's New York Times. Excellent cable on economic Herbert? Gaston: I suppose we have a press conference today? H.M.Jr: No. Gaston: I haven't anything. H.M.Jr: Ed? Foley: Mr. Jones called Saturday a little after 1:00 o'clock, said that Pierson. was with him, they had just gotten a clearance from the President on the Spanish export cotton credit, and said the agreement was to be sub- ject to two conditions: "1. That the cotton shall be exclusively for domestic " use in Spain; and H.M.Jr: Foley: A little louder. "That the cotton shall be exclusively for domestic use in Spain; and "2. That assurances shall be given that payment will be made according to agreement and no claims asserted against such payment by reason of any litigation or dispute between Spain or any Spanish financial or other interest growing out of the silver purchases 261 - 10 heretofore made by the Secretary of the Treasury from the Spanish Government. " And he wanted to know from whom those assurances should be obtained. I told him I thought the State Department could tell him that a lot better than the Treasury. He asked me if Itd go over to the Export-Import Bank and talk to Warren Pierson. I told him I would, and tried to get Archie, and I couldn't get Archie 30 Bernie and I went over and talked to Pierson. And I told Pierson that so far as I knew the Treasury position on that, we were opposed to making any credits to Spain until such time as the litigation had been dismissed, and there was no change, so far as I knew, in that position. So far as telling him who the people were that should give these assurances, I thought that that was his job or the State Department's job, not our job. H.M.Jr: Well, he said that he was in the middle and he understood that the loans had been made subject to satisfactory clearance with the Treasury or the White House, and now they have the White House clearance and he felt as though he had to go ahead. So I told him that I was in no position to tell him from whom the assurances should be obtained. I told him Itd bring it up with you this morning, call him back. Offhand - I'm no lawyer - I'd say the present Spanish Ambassador here. Foley: Well, I don't think that's enough, Mr. Secretary. I think they ought to have it from the Bank of Spain and ought to have it guaranteed by the Spanish Government. Foley: Why did you say you didn't know? What's that? H.M.Jr: I thought you didn't know. Lochhead: I took the same position. I got hold of Pierson a H.M.Jr: little bit later and said that first of all I objected that they called us up at that hour I on Saturday afternoon, wanting a rush reply. said 262 - 11 we had had a meeting with the Export-Import Bank the day before and not a word had been mentioned. cotton and the He tween said the there domestic had been negotiations people going Spanish, on be- and this had been carried on and the question hadn't been answered. I said we didn't know anything about those negotiations. H.M.Jr: I talked to Jones before I left. He never mentioned it. I talked to him on the telephone that morning. Just make a note of it. He never said a word. All he was talking to me about was the question Bell raised in regard to Bell: Commodity Credit. H.M.Jr: Commodity Credit interest rates. I had a long talk - you (Hanes) were here, I think - I had a long talk and he never said a word. And the reason he's rushing it so is because Jones is going to be out of town the first two or three days this week. I told Pierson that as far as I knew the Treasury's position wasn't changed at all, that if the loan Lochhead: was voted, it would be voted over the Treasury H.M.Jr: I think this is a little bit different. Inasmuch as the President approved this, what I would do is just say that if the people that you say - I mean I'd draw up a little statement for me that if we can get the guaranties of the Foley: Bank of Spain guaranteed by the Spanish Government present Spanish regime. H.M.Jr: Yes. And I'd write it out, you see, that if we can Foley: Well, you mean then we'd vote favorably? H.M.Jr: No, that we'd just withdraw our objection. Foley: We withdraw our objection. Lochhead: Shall we keep out of the vote, just refuse to vote? get those guaranties, why, then we are satisfied. 263 - 12 H.M.Jr: Yes. Lochhead: of course, the only thing I say on this - I think we are starting in on this credit on the wrong ground. What power has this new Spanish Ambassador or the Spanish Government to enter into these things? That's what they've brought up on our previous they've said that the old government didn't have any power to negotiate for the silver. Foley: They claim it is a private matter. That's why I H.M.Jr: Do you mind staying behind - the people that are said we ought to have the Bank of Spain interested in this. We'll talk about it. I don't want to do it just like that. But I agree with you this thing of holding a pistol to our heads late Saturday afternoon. And we ought to advise Mr. Hopkins where we stand, because he is very much interested. If you people stay behind, I'd like to go over it. Foley: Tannenberg, the Commercial Attache of the German Embassy, called up and said that he wanted to renew conversations again in regard to the countervailing duty order. H.M.Jr: All right. Foley: We told him that Johnson was in New Orleans and wouldn't be back until Wednesday. He said that would be all right, on Wednesday. So he will be in Wednesday, talk to Cairns and Johnson. We'll have a stenographer present, the same as we did before. H.M.Jr: Give him every opportunity. Foley: You wanted a draft of the bill to make loans to H.M.Jr: Oh yes. Foley: And here is a letter to the Attorney General in regard to a bill that Senator Hayden left with the President in regard to Federal land, in connection with the construction of roads, and the President Finland. asked you and the Attorney General to give him a joint recommendation. This is a letter to the Attorney General giving our comments in respect to the bill. 264 - 13 H.M.Jr: What do we say? Foley: We first say that we direct our attention to the financial provision; then we make certain suggestions, and then we say that "the Treasury is not in possession of information or evidence to establish the necessity or advisability of creating a Federal land authority for the purposes set forth in Senator Hayden's memorandum. May we call attention to the Toll Road Authority bill that we have drafted " - and we say that that legislation will take care of it. H.M.Jr: Anything else? Duffield: I forgot to mention, because I don't know what it means yet, that I got this morning without any explanation a memorandum which has been circulated internally in the Federal Deposit Insurance Corpora- tion, discussing the advisability of lowering the accounts. I don't know whether they're talking about doing it or not. Well, get hold of Crowley and find out. maximum interest rate which banks can pay on savings H.M.Jr: Bell: You remember I talked to you about three weeks ago and said that Eccles had called and said sometime within the near future all concerned ought to get together and see whether or not the regulations shouldn't be changed in respect to savings deposits. H.M.Jr: Who is handling that? Bell: Well Duffield: Bell: The Comptroller is on the FDIC Board. Have to be the FDIC and Federal Reserve Board, and H.M.Jr: Well, who will follow through on it? Bell: I'll be glad to if you want me to. we're in it because of Postal Savings. 265 - 14 H.M.Jr: Is that all right with you, John? Let Bell follow Hanes: Sure. Bell: I think there will have to be a conference in the near future. H.M.Jr: Well, will you keep the Undersecretary advised? Bell: Yes, I will. I'll go over there either today or tomorrow. H.M.Jr: Is that all right? Hanes: Yes. H.M.Jr: You (Foley) through? Foley: (Nods yes). H.M.Jr: George, I picked up this - the latest figures on Haas: Yes. H.M.Jr: Do we have any more recent than that? That's the last week in May. Haas: Well, we get one every week. I don't know if that's the last one or not. Later on I'd like to see you on that, because isn't you see, they're running ahead of last year, and H.M.Jr: through? FHA mortgages. Do we still get those? that isn't what I've been told. I mean I got the Eaas: impression that they were doing badly. Just recently - there were some large contracts held up, and just recently some of those, or at least they told us over there that some of those were going through; they were held up and now they're going through. H.M.Jr: Well, sometime this morning I want to see you. That doesn't check with what I have. They're running 266 - 15 ahead of last year, and last spring was damn good. Hass: Uh-huh. H.M.Jr: There's one thing here - electric power figures. (After reading figures). Well, that checks with McR: H.M.Jr: Haas: what Mac says. Mac said that Westinghouse had the best spring Second best month they had ever had. He's right. He really got in on the inside up there. McR: Vice-president and General Counsel - playing golf with him. H.M.Jr: Anything else, George? Haas: That's all. H.M.Jr: Harry? White: There is a letter here from Senator Pittman, that H.M.Jr: he called up Mr. Caston on Saturday and that he wants certainly by this morning - this is for your signature - asked for this information. He called up, wanted to have all his letters returned to him. White: I got that information that he asked for - all the seigniorage profit H.M.Jr: Would you (Chauncey) keep after Mr. White Chauncey: To get t - letters back. H.M.Jr: Get them back this morning. He'll be touchy today, you know. White: Senator Wagner called me a couple times yesterday, and he's working on this material and he has a 267 - 16 - lot of questions, and he'd like me to be there at 10:30, on that.wants to spend some more time this morning H.M.Jr: Well, I'd like you to stay behind on this Spanish thing - as soon as we get that cleaned up. White: Then, I had a long conversation with Ezekiel about agricultural matters, other programs that were sub- mitted. That can wait until a little later. H.M.Jr: Other proposals? White: He had a couple other proposals with regard to a program that ought to be raised at some time. H.M.Jr: I see. These statistics that Hopkins gets out - "Foreigners Invest More Koney Here" - is that at all in conflict with what we get out? It's for 138. White: I didn't see it. H.M.Jr: I mean does that clear through the Central Statistical Bureau? It looks as though we would be getting it out in our bulletin - the same thing. White: That's where they get this from. H.M.Jr: Well, check it, Harry. will you? I mean not this minute - but I mean it looks to me as though - I mean how is a fellow going to White: Oh - oh. These figures here are figures of direct investments, of which we have no information at all, and on common stocks, which they estimate - re-estimate the market values, et cetera. They do that quite independently. The only thing they get from us are the additions and subtractions of capital movements, which they include in their estimate of it. H.M.Jr: White: Lochhead: Anything else? That's all. Silver was off slightly again in London this morning, off a sixteenth. That makes the spot silver 41.35, 268 - 17 - and the forward silver - that's two months delivery 40 and three-quarters cents. H.M.Jr: Tomorrow you and Mr. Hanes can make the price of silver at 12:00 o'clock. I won't be here. We'11 let you and Mr. Hanes make the price of silver to- morrow. Hanes: Caston: Herbert said 20 cents. No, 40 cents. I've got to have a news story once in a while. Hanes: Find out who gets hurt on that one. H.M.Jr: Harold? Graves: I have nothing. H.M.Jr: I thought you were going to have that bribery case today. Craves: We have completed our examination of that case, H.M.Jr: Well, before - well, I won't be here tomorrow; before it comes in, I want Mr. Hanes to go over it - before Mr. Morgenthau, but there are certain aspects of that that I want very much to go over with Mr. Foley, and we have arranged to do that at 10:30, and I think we'll be ready to report to you tomorrow. I see it. Graves: Fine. H.M.Jr: I'll be here Wednesday. Craves: By the way, I've received from Mr. Hoey a full account of this Dietrich matter, and his letter calls for an acknowledgment from me. I was going to commend him for what he did, if you have no objection. Graves: Not if he earned it. I think he did. H.M.Jr: All right. Anything else, Harold? H.M.Jr: 269 - 18 Graves: Nothing. White: Did you want that memorandum on the Japanese sent in before you went to see the President this morning? I have it on my desk. It just has to be reviewed. H.M.Jr: White: Cibbons: Yes, I would kind of like - I'd like to send it over with that clipping from the Times. With Hugh Byas's clipping. If you're having lunch with the President, he might of Mr. Spencer of Krum Elbow. It was just the regular thing. They got a tip that he was bringing in some robes that belonged - a church affair - his mother ask you about the Customs people searching the yacht had owned them for about sixty years and had taken them out on the yacht, took them over to the Bahama Islands. Claimed he gave them to some church. It was just one of those things that the Customs down H.M.Jr: Gibbons: in Florida - the Border Patrol had a tip on. Well, the papers said that he himself was not guilty of anything. No. Well, this information they had was that he was bringing these very valuable robes into the United States, I suppose for safe keeping, and somebody had seen them on his yacht over in the West Indies somewhere, and they thought he was going to probably put them under some part of the boat and they thought he was going to bring them in without clearing them. Just one of those things. H.M.Jr: 0. K. Gibbons: He might ask you about it. H.M.Jr: Thank you. Dan? Bell: Had a meeting of the Federal Farm Mortgage Corporation on Friday. Discussion came up as to what they should do with their 100 million dollar maturity on September 1. They have been buying their outstanding bonds with the longer maturity in the market with their money 270 - 19 - that's coming in on their daily receipts; and they are getting to such yield now - low yield - that it isn't worth their effort to buy them. So they decided that they'11 let the cash accumulate, which is about - on September 1 they would have about 75 million and, subject to your approval, I agreed to give them a Treasury credit of 25 million to pay off the hundred million on September 1, and let them pay us back as they get the money in monthly, which would be in about four or five months. H.M.Jr: Yes. Bell: And I think we ought to announce that right away, because they're getting rights on those September maturities. H.M.Jr: Fine. Bell: O. K. H.M.Jr: That really puts them in line with what I saw in the paper about what Fahey Bell: That's right. H.M.Jr: Be doing the same thing. Bell: They'd be doing the same thing, except Fahey will not get any money from us; but they have about 10 million dollars in Governments which they ought to sell between now and June 30. H.M.Jr: Rathor than have them buy these high-priced bonds of their own and then borrow money to do it - it doesn't make sense, does it? Bell: That's right. H.M.Jr: Do you (Hanes) agree? Hanes: Yes. H.M.Jr: John? Hanes: (Nods yes). 271 - 20 Bell: H.M.Jr: I've been asked to come up to the Appropriations Committee this afternoon at 2:30 and defend that 119 million of Commodity Credit. So I'll be up there. Pleasant job. I wish you luck. Warren Pierson asked me about his appropriation, said he asked for 109 thousand dollars. Bell: Yes. H.M.Jr: And Bell: I was to call him, but didn't call him, Saturday. H.M.Jr: Will you? Bell: I'll call him. H.M.Jr: I'd like to help him on that. He's really terribly undermanned over there. Bell: I told you that had gone up. H.M.Jr: A hundred. Bell: A hundred thousand. H.M.Jr: What he was kicking about was that he couldn't get 109. Or is he kicking because he couldn't get anything? Lochhead: He's kicking that he didn't get the 109. The nine. Well, I can't fight for nine thousand dollars. I mean . H.M.Jr: Bell: Well, if these other things go through that they're talking about that affect the Export-Import Bank, the Budget will be perfectly willing to apportion those funds so that they can run a deficiency and get wha tever is necessary in some deficiency bill next spring. H.M.Jr: Well, I think it would be nice if you'd call him, because I think he'd appreciate it. 272 - 21 Fell: H.M.Jr: All right. The other thing I brought up in Cabinet - this request of 250 thousand dollars to send down experts to Latin America. Before read and Mr. Hull said he had he just for ourselves. Well, I read it as the memorandum was written. Mr. Hull well, wished it the to we'd other Mr. make Hull, departments it enough doing money it thought, I and said he thought we ought to have it. And then the President said he was opposed to it because he was sure there was enough money around in the Treasury. So I said, "Well, Bell said there wasn't." Well, he said whenever he had asked Bell to find additional money, he had always found it. Bell: Always had an extra pocket. H.M.Jr: So I said, well, the Treasury didn't have it, because we set the example to the other departments, we ran the Treasury more carefully than any other department. And he said it again and I said, "Well, I'm just telling you, Mr. President, and I'm not going to argue, that as a result of your decision we will send no experts to South America. And he said I said, "I'm not going to argue about it. There just won't be any that go." And I just walked out. I said to Hull, "I want to tell you, and please tell Mr. Welles to stop bringing any pressure on us, because we're not going to send any experts to South America." Lochhead: They called up this morning, wanted a special man to go down to Ecuador. H.M.Jr: The hell with them. Lochhead: I told them That's what I told the boy that was in to see me McR: about it. I told him, "The answer is no, we have no money." H.M.Jr: With a flip of a hand they give Agriculture 249 million dollars, but when we want 250 thousand for all of the 273 - 22 - whole Government, we can't get it. I'm just not going to - I'm just going to sit tight and let the State Department foam at the mouth, and if they W ant to get it, all right, but I'm not going to do anything about it. White: They've been naming them anyway; 1f they name them, they ought to pay them. H.M.Jr: Well, anyway, I brought it up, made the effort, and lost. The President doesn't want it. It's all right with me. McR: You got the answer. White: Does that mean H.M.Jr: What? White: Does that mean that Mr. Spiegel, who is on our staff, can't go to Venezuela? We've already made that arrangement. White: Who's going to pay for it? He's already on the payroll. H.M.Jr: What payroll? White: Our payroll. Lochhead: Spiegel is - he's our man. I don't want any man on the regular Treasury payroll to go on any mission. Mr. Bell told me - I'll say that we'll have to get the clearance of Mr. Bell; H.M.Jr: H.M.Jr: he'll have to okay it. White: You'd better straighten this out now, Archie. H.M.Jr: Lochhead: No, he'll have to clear it with Mr. Bell. Spiegel is on the stabilization roll. He's in White: The arrangement has already been made on the Harry White's department. Venezuelan mission - just one of the young fellows. 274 - 23 H.M.Jr: You'll have to clear it with Mr. Bell. White: If I clear it with Mr. Bell, it's all right? H.M.Jr: If Mr. Bell will put his name on it, say it's O. K., all right; but if not, he won't go. Bell: I had assumed in these matters that are not strictly connected with the stabilization fund that you did not want to use the stabilization fund to send these people to South America. H.M.Jr: That's right. Bell: And I have also assumed that if they wanted, say, somebody from Internal Revenue, that that appro- priation is available, but you couldn't send a number of tax experts, I didn't think, to South America and pay for them out of Internal Revenue; at least, you wouldn't want to. They are always contending that they are short of money. I shouldn't think we'd want to. H.M.Jr: I certainly don't want to send people down to Venezuela and pay them out of stabilization fund money. Bell: That's what I assumed in the memorandum. White: Well, this may not be the time and place to raise this issue, but we pay our men to work on customs duties and countervailing duties out of the stabilization fund. Bell: I keep that quiet. What's that? And several other things. But - all right. Bell said he'd keep it quiet. Well, you better take a look at the whole thing, Bell. Mac is supposed to. Maybe Mac is slipping. I mean I've relied on Mac to see that there's nothing on the stabilization fund that won't stand the searchlight, daylight, White: H.M.Jr: everything else. McR: Nothing on stabilization except Harry's force. 275 - 24 H.M.Jr: Well, maybe Harry's force is doing things which aren't strictly stabilization fund. You two men had better take a look at it. Maybe Lochhead is slipping. Lochhead: I'm not slipping. I questioned that right away. Harry said he cleared it with you. Just a minute. Didn't you say that men White: H.M.Jr: Wait a minute. I'm very serious. I told you and McReynolds that nothing should go on the stabilization fund that you didn't personally walk in here and put the thing on my desk and get my signature, with your visual recommendation. Lochhead: H.M.Jr: It wasn't visual. That was a question - when you sent up the special force, Harry came in and cleared it with you. Visual. There's nothing that's gone over - I've never signed an authorization for the stabilization fund that you and McReynolds weren't here in person. Now, come on. Lochhead: Well, as I say, when it came up - they said that was sent up special, as a special request. H.M.Jr: There are no special requests. Lochhead: We'll have to clean out half of it. White: Is there some doubt in your mind that my staff works H.M.Jr: on things other than stabilization fund? I don't know what they're talking about, but we'll White: I think it better be re-examined, under those cir- H.M.Jr: I certainly don't want either Bell or McReynolds to take a look at it. cunstances. have - McReynolds seems to be taken care of, but Bell seems to have some doubt, so we'll give Bell a chance to take a look. If anybody has got any doubts - you know, the stabilization fund has got to be much better than Caeser's wife. 276 - 25 McR: H.M.Jr: Got to be pure, got to be ready for advertisement at any time. Can't even be an amateur. All right. Dan, you'd better be a one-man commission to take a look at it, then bring it in. Bell: That's bad. That puts me on the spot. H.M.Jr: No, it doesn't. No, I want your help and I don't want - I'd much rather have it inside the Treasury family than to have it up on the Hill or read it in the New York Tribune. White: Appropriate in a way because I was going to raise an issue with respect to our dumping procedure; I had a report ready to bring up Wednesday showing the number of cases we have received, the number we have handled, the number that are coming in; and I talked with Mr. Gibbons about it and something needs to be done about it. We'll have to put at least another one or two men on it. H.M.Jr: Well, if it's a vote - going to vote on it today. White: Going to vote on the stabilization. Well, no Well, I think if Bell has any doubts, I want him to go into the whole matter. H.M.Jr: Bell: H.M.Jr: Bell: I wasn't raising any doubts, because I don't know anything about it. I've had nothing to do whatever on the stabilization fund. You raised doubts on this question of this man going down to Venezuela. No, I said in writing my memorandum I assumed that you did not want anybody to go out of the Treasury to South America or any place else and be paid from the stabilization fund, unless they were on stabilization fund matters. As I understand, the State Department wanted several Treasury experts not necessarily connected with stabilization fund matters. H.M.Jr: Well, Dan, let's - some time this morning or tomorrow get hold of the stabilization fund payroll, find 211 - 26 out what this whole thing is, you see? You and Mac and Archie, will you please, the three of you - and give me a report Wednesday morning, the three of you, Archie, Bell and McReynolds. I want a report Wednesday. See? Now, don't interfere with Harry helping Wagner, and if it means his being here, give him until Thursday I mean let Harry be up on the Hill taking care of Wagner, but as soon as he is through and you need him - I mean give him plenty of time to explain what the thing is, but let him take care of Wagner first, so if you don't get around Let him finish his explain, and then I'll review it myself. All right? work with Wagner and then give him a chance to Bell: (Nods yes). H.M.Jr: Mac? McR: Oh, Norman gave me a note, wanted to raise a question about announcing Harry Collins is taking charge of Procurement. H.M.Jr: Well, when did you do that? MeR: Of course, it takes effect the first of July. H.M.Jr: Then why not wait? MCR: I think it would be a good thing to wait. I have letters written to the Secretary of the Navy and to Admiral Peoples. H.M.Jr: Well, where do I sign? McR: We had Norman write them. They are very complimentary. H.M.Jr: I'll read them. McR: You'd better read them. H.M.Jr: Anything else? McR: No. H.M.Jr: Now, I want to talk about that Spanish thing. 278 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE June 19, 1939 Secretary Morgenthan W. H. Hadley Review of the Government Market Yeek ending June 17. 1939 The government market continued easy last week, the chief character= istic being that of thinness. There was very little activity but the appearance of small offerings forced prices to move down as such as 1/4 point while small buying interest had the effect of forcing prices up about the same amount during individual days. The forces bringing about this easiness continue to be dealers' hesitancy to add to their already siseable portfolios, profit-selling by banks for June 30 statement purposes and dividends, and a general reluctance on the part of investors to buy until they feel sure that the market is on a firm basis. At the moment the market now (Monday, June 19) appears to have levelled off. Prices of Treasury bonds were about 1/2 point lower on issues callable or maturing over 10 years while the short and intermediate issues were off 1/8 to 1/4 point. Treasury notes showed mixed tendencies and closed the week about unchanged to 3/32nds off in the longest issues. The new 3/4% notes are now quoted at 100.31 bid. Guaranteed issues, in sympathy with the direct obligations, were off an average of 1/4 point. The now HOLC 1-1/2% bonds closed the week at 102.3 bid. The entire government list is now at price levels prevalent during the latter part of May. -2- 279 Dealers' Portfolios Other than small reductions in all items except Federal Farm Mortgage bonds, there was no significant change in dealer holdings during the week. Total position was reduced $4 million while holdings of Federal Farm Mortgage bonds were increased $8 million. Dealers continue somewhat hesitant to add to their portfolios in view of the declining prices. As a matter of fact, a good part of the mark-down in prices was reported to be dealers' efforts to discourage selling. By so doing dealers were apparently successful in preventing any large amount of selling in the market. (in millions) Week ended June 10 55.8 Treasury bonds Treasury notes (1 year) 25.1 Treasury notes (1-5 yrs.) Treasury bills H.O.I.,C. bonds F.F.M.C. bonds 26.0 - Week ended June 17 49.5 25.8 22.6 - Net Change - 6.3 + 0.7 - 3.4 - 25.8 22.8 0.9 133.6 8.9 129.6 - 3.0 + 8.0 - 4.0 Dealers' volume was smaller than any week since last February. Daily average amounted to about $125 million while Treasury bond volume was about $65 million compared with $130 million the previous week. New Securi ty Issues There was no significant new financing this week, with the exception of $17,500,000 offering of 38-year bonds of the Port of New York Authority which were quickly sold by the successful bidder in the market at a price to yield slightly under 2.90% A few small corporate issues, mainly for refunding, totaling about $10 million were floated. 280 Corporate Bend Market In sympathy with an easier stock market, second grade corporate bonds were off about 1/2 point last week, reversing the trend of the last few weeks. High grade issues, although fractionally lower, contimued practically at their all-time highs. The corporate market as a whole was not very active. As a result of this easiness in second grade issues, the yield spread between high grade and medium grade bonds increased slightly to 1.98% compared with 1.95% the previous week. Treasury Investment Accounts The only market operations in Treasury investment accounts were purchases of approximately $2,600,000 Treasury bonds of 1960-65, $1,858,000 of which were for Mutual Mortgage Insurance Fund and $743,000 for Housing Insurance Fund. In addition, there was an investment in Special 26 notes for account of Government Life Insurance Fund of $22,500,000. bringing the total holdings of these notes in this account to $39,600,000. HOLC Bonds of the $100 million HOLC bonds authorised to be sold, a total of $40,400,000 have been sold. In addition to the $38,500,000 previously reported, $1,900,000 have been sold directly to three Federal Home Loan Banks. Federal Reserve System Account The only transactions in the market by the Federal Reserve Bank for system account was a replacement of $34,150,000 maturing Treasury bills with $25,200,000 new bills and $8,950,000 other bills. 281 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION CONFIDENTIAL DATE June 19, 1939 TO FROM Secretary Morgenthau Mr. Haad 4014Situation, Subject: The Business Week ending June 17, 1939. Conclusions (1) A developing political crisis abroad, which was foreshadowed by the recent weakening tendency in sensitive commodity prices, may handicap in some degree the business rise which is getting under way. It would probably require to seriously upset the business trend, since the strong basic domestic situation will not be affected, and the recent 58 war situation much more serious than now exists, however, month recession has already reflected more than a war scare. (2) Indicating the extent of recent business improvement, the New York Times business index has risen nearly 4 points from the Memorial Day low, carrying it to the highest level since early February. Evidence that the business upturn actually started last month appears in various statistics for May that are now becoming available. Cotton consumption in that month expended substantially against the seasonal trend; steel shipments showed an increase over April for the first time since 1936; rural retail sales increased to a higher May total than in any of the vast ten years; and machine tool orders turned sharply upward. (3) The rapid expansion in British business activity, which has been a supporting influence on world commodity prices over the past several months, continues to imorove our own business picture. Steel output in Great Britain during May rose to an all-time high record, and a new record for employment was established in that month. 1 Secretary Morgenthau - 2 282 The present business situation Political developments in Europe and the Far East, which threaten to create another war crisis, lend some degree of uncertainty to the business p- ture, particularly in view of the impinging of the Tientsin incident on interests of the United States. Unless the war situation becomes much more serious, however, the effect of these developments in slowing up business activity seems likely to be small, since (1) industrial production is already depressed substantially below the level of demand, discounting both the March war scare and the coal strike; (2) the strong basic domestic situation will not be affected; (3) low levels of inventories in trade channels, resulting from a long period of conservative buying, insure against any serious postponement of new ordering. The business position is similar in some respects to that of last August and September, when the recovery then getting under way was scarcely affected by the unparalleled war crisis that culminated in the Munich agreement. The fact that industrial activity in Great Britain and various other countries is already largely geared to a war economy, largely removes the shock of war scares on industrial activity in those countries, and minimizes it in this country. The influence of rearmament activity in stimulating steel production in Great Britain is illustrated in Chart 1. During May, steel output rose to an all-time high of 1,218,000 tons, exceeding the peak of November 1937, with steel mills reaching practically their limit of capacity. This suggests that more orders may be diverted to the United States and other countries. Unemployment in Great Britain has been reduced to the lowest figure since October 1937, and insured persons at work reached a new high level in May. Prices show further weakness Sensitive commodity prices continued to sag last week, accompanied by further declines in security prices here and abroad, though some evidence of a firming tendency appeared in Reuter's index toward the close of the week. Stock prices at New York have turned downward, following the lead of London and Paris, where market weakness became apparent during the previous week. Foreign transactions in American securities have turned moderately to the selling side. Secretary Morgenthau - 3 283 The recent weakening tendency in basic commodity prices has carried the BLS index of raw material prices slightly below its April low. (See Chart 2.) With a continued sagging tendency in prices of finished products, the all-commodity index (shown on the chart) has also reached new lows. Most important 8.6 evidence of industrial demand, however, is the trend of prices of basic industrial materials. We have compiled daily since last June an index of spot prices of a selected group of 9 industrial materials -- steel scrap, tin, copper, lead, zinc, wool, print cloth, rubber, and hides -which is show as weekly averages in Chart 3. in comparison with the New York Times business index. Contrary to the trend of raw material prices in general, which include many agricultural products not directly associated with industrial demand, it will be noted that this index of industrial materials has gained steadily in recent weeks with the exception of a slight downturn last week. The rise bears some resemblance to that accompanying the business upturn of last October and November, and provides some confirmation of the business upturn now beginning. It will be noted that, in contrast with price trends for the broad groups of commodities represented in Chart 2, orices of basic industrial materials have never returned to the low levels of last June. Evidence of business improvement A surprisingly sharp gain of 3.8 points in the New York Times business index for the week ended June 10 (shown in dotted line on Chart 3) marks a quick response of the various components of this index to the improving business trend following the Memorial Day holiday. All components of the index made wide gains, raising the composite index to the highest level since early February. Barron's business index for the same week shows a rise of 4.2 points. For the following week, the New York Times automobile production index has made a further substantial gain, with actual output rising contra-seasonally to 78,305 units versus 65,265 units the previous week. The steel index will also be higher, since the elight decline in operations during the week was less than seasonal. Secretary Morgenthau - 4 284 Data now becoming available indicate that the business upturn actually began last month, though obscured by the effects of the coal strike, which will probably hold the FRB index for May unchanged from the April level. Mill consumption of cotton during May increased 11 per cent over the April figure, when a decline of about 4 per cent is the seasonal expectation. Cotton consumption in the United States for the 10 months of the season to date is exceeded only by the record consumption of 1936-37. Shipments of steel products during May, as reported by the U. S. Steel Corporation, showed a substantial increase over April shipments, indicating an improvement in the takings of steel by steel consumers. In both of the two previcus years shipments had declined in May. A strong further rise in machine tool orders during May appears significant as providing some evidence of the temporary nature of the recent business setback. (See Chart 4.) The rise has been under way with minor interruptions since last summer, practically ignoring the recent business setback. In this respect it compares with the upturns in late 1933 and in 1935, which continued despite setbacks in industrial activity, and in both cases were followed shortly by renewed business improvement. The comparison is made less reliable, however, by an increasing proportion of machine tool orders placed here by foreign buyers. Current business news Some evidence of mid-summer slackening in the steel indus- try appears in a decline in steel operations last week to 53.1 per cent of capacity from 54.2 per cent the previous week. New orders reported by the U. S. Steel Corporation declined to 44 per cent of capacity from the previous week's figure of 50 per cent. Further evidence that the independent steel companies are better situated with respect to new orders than U. S. Steel appears in the steel operating rates reported by Dow Jones for the latest week (week ended June 12). This shows an increase of 4 points to 60 per cent in the average operating rate of the independents, while the U. S. Steel Corporation rate declined 1 s points to 46 per cent of capacity. 285 Secretary Morgenthau - 5 Our weekly new orders index (See Chart 5) has risen slightly above the previous high for the year, despite a downturn in reported steel orders, owing to the recent improvement in textile orders and an upturn in orders for goods other than steel and textiles. Daily average sales of general merchandise in small towns and rural areas for May were higher than for any like month in the past ten years, according to Department of Commerce estimates based on sales of chain stores and mail order houses. It is not known, however, to what extent this showing may reflect a possible diversion of rural buying from other types of retailers. B . L. S. ALL COMMODITY PRICE INDEX AND COMPONENT GROUPS 1926 100 PCP PER CENT CENT All Commodity Prices 82 82 80 80 78 78 76 76 74 74 III 72 11 111 JAN. JULY MAY MAR. 1938 SEPT. NOV. JAN. MAR. 72 MAY 1939 PER CENT PER CENT Component Groups 84 84 82 82 FINISHED PRODUCTS 50 80 78 78 SEMI-MANUFACTURES 76 76 74 74 72 72 70 70 RAW MATERIALS 68 68 +++ 111 +11 66 JAN. MAR. Office of the Secretary of the Treasury MAY JULY 1938 SEPT. NOV. JAN. MAR. 66 MAY 19 39 287 P 173 Division of Research and Statistics Chart 2 ACTIVITY BUSINESS PRICES AND OF JUNE MATERIALS 1939 938 OCT. AUG. INDUSTRIAL SENSITIVE APR. FEB. DEC. JUNE AUG. OCT. DEC. PERCENT PERCENT (BUS. ACT.) (PRICES) Weekly 100 125 95 115 BUSINESS ACTIVITY N.Y. TIMES : EST. NORMAL = 100, ADJ. 90 105 85 95 PRICES OF SENSITIVE INDUSTRIAL MATERIALS 80 1936 100 85 75 75 70 65 AUG. JUNE 938 OCT. DEC. FEB. APR. JUNE AUG. OCT. DEC. 19 3 9 INDEX INCLUDES SPOT PRICES OF STEEL SCRAP, TIN. COPPER, LEAD, ZINC. WOOL. PRINT CLOTH. RUBBER AND MIDES. Office of the Secretary of the Treasury Division Emparch and Statistics c 274 MACHINE TOOL ORDERS AND INDUSTRIAL PRODUCTION 1933 1934 1935 1936 1937 1938 1940 1939 PERCENT 111 UNITED PERCENT (IND. PROD.) (MACH. TOOLS) 300 150 250 135 MACHINE TOOL ORDERS 1926 100 200 120 150 105 100 90 INDUSTRIAL PRODUCTION, F.R.B. (1923 - 25 100, ADJ.) 50 75 1933 0 Office of the Secretary of the Treasury Division of Research and Statistics 1934 1935 1936 1937 1938 1939 little 1940 60 c 275 INDICET ORDERS Combined Index of New Orders and Selected Components 1536 JULY PLACENTAGE POINTS SEPT. NOV. POINTS 100 100 90 90 TOTAL (COMBINED INDEX) 1936 =100 80 M 80 70 70 M 60 50 60 50 TOTAL EXCLUDING STEEL AND TEXTILES 40 40 MM 30 20 10 30 STEEL ORDERS 20 10 TEXTILE ORDERS 0 0 JAN. MAK. JULY MAY 1936 Office of the Secretary of the Treasury - of - and SEPT. NOV. JAN. MAR. MAY 1939 I 85 - A TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE r JUN 19 1939 TO FROM Secretary Morgenthau Mr. Foley Pursuant to your request I have prepared and there is attached hereto a draft of legislation authorizing the Secretary of the Treasury to make loans to Finland. i.N.th. 291 292 June 19, 1939 To Secretary Morgentheu From Mr. Folay Pursuant to your request I have prepared and there is attached hereto a draft of legislation authorising the Secretary of the Treasary to make loans to Finland. (Initialed) E.H.F.,Jr. JWP;mgt 6/16/39 293 DRAFT A JOINT RESOLUTION Authorising the Secretary of the Treasury to make certain loans to Finland. WHEREAS, in order to (1) facilitate exports and imports and the exchange of commodities between the United States and Finland; (2) stabilize the rate of exchange between the dollar and the Finnish Markka; (3) facilitate and strengthen fiscal and economic cooperation between the United States and Finland; and (4) protect and strengthen the traditional bonds of friendship between this country and Finlands Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury, with the approval of the President, is hereby authorized, on behalf of the United States, to make loans of money, including gold, to the Government of Finland, or any fiscal agency acting on behalf of Finland, at such times and upon such terms and conditions as the Secretary of the Treasury, with the approval of the President, shall deem appropriate and in the public interest: Provided, however, that the total amount loaned hereunder shall not at any : and Provided further, That time exceed in the aggregate $ all of the amount loaned hereunder or the proceeds thereof shall be used for purchases of goods or services in the United States; and Provided, further, That such loans shall mature within years from the date thereof and shall bear interest at a rate not less than the rate borne by the then lastissued obligations of the United States having a substantially similar maturity. . Sec. 2. The authority herein conferred shall expire on 294 June 19, 1939 To Secretary Morgenthau From Mr. Foley Pursuant to your request I have prepared and there is attached hereto a draft of legislation authorizing the Secretary of the Treasury to make loans to Finland. (Initialed) E.H.F.,Jr. JWP;mgt 6/16/39 DRAFT 295 A JOINT RESOLUTION Authorising the Secretary of the Treasury to make certain loans to Finland. WHEREAS, in order to (1) facilitate exports and imports and the exchange of commodities between the United States and Finland; (2) stabilize the rate of exchange between the dollar and the Finnish Markka; (3) facilitate and strengthen fiscal and economic cooperation between the United States and Finland; and (4) protect and strengthen the traditional bonds of friendship between this country and Finland: Now, therefore, be it Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury, with the approval of the President, is hereby authorized, on behalf of the United States, to make loans of money, including gold, to the Government of Finland, or any fiscal agency acting on behalf of Finland, at such times and upon such terms and conditions as the Secretary of the Treasury, with the approval of the President, shall deem appropriate and in the public interest; Provided, however, that the total amount loaned hereunder shall not at any : and Provided further, That time exceed in the aggregate $ all of the amount loaned hereunder or the proceeds thereof shall be used for purchases of goods or services in the United States; and Provided, further, That such loans shall mature within years from the date thereof and shall bear interest at a rate not less than the rate borne by the then lastissued obligations of the United States having a substantially similar maturity. . Sec. 2. The authority herein conferred shall expire on 296 MEMORANDUM June 19, 1939. At 3 p.m., Messre. Gaston, Foley and McReynolds went to Miss LeHand's office at the White House and after some delay were called in for consultation with the President. The President stated that he had just completed a conference with Senator Byrnes, who is Acting Chairman of the Appropriations Committee of the Senate. and arranged for him (Byrnes) to write the President such a letter as had been contemplated would be written by Senator Mead. The President reviewed briefly the memorandum previously submitted to him by the Secretary covering proposed self-liquidating projects which might be undertaken in lieu of an expanded public works program. The President outlined in general terms the type of reply he wished to make to Senator Byrnes' proposed letter and requested that Treasury prepare a draft of such reply and bring it back to him at 12:30 the following day (Tuesday). Arrangements were made for a conference Monday evening with representatives of the various Government units which would be involved in the work proposed and the original group, and D. W. Bell, held such conference until late in the evening. Definite agreement were reached with the various representatives of the other departments as to the amount of money that could be productively spent on the various projects. The President postponed the proposed conference on Tuesday until 2:45 the following day. 19-3 THE WHITE HOUSE WASHINGTON Dear Senator Byrnes: I have your letter of today in which you ask my position as to the provision of the "Work Relief and Public Works Appropriation Act of 1939" as passed by the House of Representatives (H.J. Res. 326) which would allot $125,000,000 to the Public Works Administration for loans and grants for non-Federal public works. I am opposed to this provision. It means simply that 165,000 men who are badly in need of work will have to be dropped from the Works Progress Administration rolls; men who in the great majority of cases are the sole support of families whose subsistence depends on III this slender income. What will happen to most of these men is that they <<< will be forced onto - already overburdened direct relief rolls of the of I believe in encouraging additional needed public works of in various kinds. But I have R different suggestion to make. I think there is a way to provide Federal assistance in the financing of public enterprises that will give added employment without stripping the work-relief budget of badly needed funds and without additional heavy direct charges on the Federal budget. At my suggestion, various departments and agencies of the Govern- ment have canvassed the situation to find projects which will meet genuine public needs - projects that can be put under way quickly and / T of tist cities, towns and counties, art Invest will be self-liquidating. They have found a variety of such projects which have stood the test of careful scrutiny and which hold the promise of a great volume of productive expenditure and employment. I believe this is a much sounder method of dealing with the problem than the diver- sion of $125,000,000 of work-relief funds. All can be financed through the issuance of guaranteed securities by Government agencies with good prospect of repayment of both principal and interest through earnings. I have caused estimates to be made of the extent of the field for investment of funds in revenue earning channels on a self-liquidating basis. The estimates are, I believe, conservative. The types of projects I have in mind are listed below, together with the sums which, it is estimated, can be put to work to provide employment for men and machines in diverse lines of industry within_ the coming fiscal year. These projects are in addition to programs already submitted. Program Total Loan duration amount disbursements of (years) I. Federal Works Agency (a) Non-Federal public works: Projects of the self-financ- ing type to be financed by loans at sufficiently low rates of interest to stimulate borrowing for this purpose. The type of projects would be water-works, sewage disposal plants, bridges, hospitals, and other municipal projects. 2 fiscal year program 1940 $350M $150M Program Total duration amount (b) Express Post-Roads: Self-liquidating toll roads, disbursements fiscal year of (years) Loan program 1940 $750M $150M bridges, high-speed highways and city by-passes. 500 (c) Railroad Equipment: 100 Authority to purchase all typed of railroad equipment which is to be leased to reilroads at H rate which will return the cost to the United States over a period of years. Carriers would have the option to buy the leased equipment. II. Department of Agriculture (a) Rural Electrification: 460 7 20 Expansion of present rural electrification program to reach a maximum of 12 million rural families not now receiv- ing electric service nor likely to receive such service in the near future. (b) Farm Tenant Program: 2 500 250 Expansion of the self-liqui- dating portion of the program of the Farm Security Adminis- tration for tenant farm and to purchases, rehabilitation program, loans for minor im- provements repairs, loans resettlement cooperatives, and loans for water facilities. III. Foreign Loans - 2 Extension of short and longterm loans to foreign governments for the purpose of promot- 500 200 ing our foreign trade. The proceeds of these loans would be spent in the United States and would be used for development and reconstruction purposes/ it 14 TOTALS $6,010M +1,170M 2960H 870 H -4This program would stimulate & greater amount of productive expenditure than is indicated by the total estimated loan disbursemente of $1,170 millions for the fiscal year 1940, Some parts of it will involve additional local expenditures not financed by Federal funds, end other indirect expenditures will be generated. vome To give effect to the projecte outlined above, additional legislation will be necessary. As a part, however, of the whole an program for stimulating productive employment, I include - other proposal which will not require legislation in addition to that AND already enacted or pending." The first is the expansion of the public housing program of the United States Housing Authority through extending its borrowing power by $800,000,000. I have already indicated my V approvel of this legislation. The second supplementor() proposal is to outse a further timulation of private home consti ction by loverin the maximum interest rates on loans insured throug the Federal Hopeing Adminis- tretion I have already discussed this matter with the Administrator. I hope I may count on your assistance in obtaining legislation at this session necessary to making this program effectIve. Sincerely, Honorable James F. Byrnes United States Senate. 301 Memorandum of Conference held in the Office of the Secretary at 2:15 p.m., June 19, 1939. Present: Secretary Morgenthau Mr. Gaston Mr. Foley Mr. McReynolds Upon the return of the Secretary from the White House he stated. as a result of his conference with the President, the President directed that a draft of a letter be prepared from Senator Mead. and addressed to the President, suggesting that a self-liquidating public works program be substituted for the allocation proposed by Congress of $125,000,000 of relief appropriation. The Secretary called Miss LeHand at the White House and arranged for Messrs. Gaston, Foley and McReynolds to come to her office at 3 p.m., and get such instructions as the President might wish to give concerning the draft of letter as well as a draft of a proposed reply from the President to the Senator. The Secretary directed that as the President so directed, such a proposed reply be prepared so that the letter could be placed in his hands immediately. The Secretary also directed Mr. McReynolds to notify the Director of the Budget that the President had personally ok'd the proposal to authorize an additional $8,000,000 for Nathan Straus' housing program. The Secretary also directed that he be called on the telephone at Princeton at 6 p.m., and informed of the progress made on the drafting of the letter as well as on taxes and monetary legislation under consideration in the House and Senate. The Secretary also directed that Under Secretary Hanes be informed of the matters referred to herein. 48(e) 302 FEDERAL RESERVE BANK OF NEW YORK CORRESPONDENCE CONFIDENTIAL FLES OM L. W. Knoke DATE Junc 19, 1989 SUBJECT TELEPHONE CONVERSATION WITH BANK OF ENGLAND. Mr. Bolton called at 11:28 a.m. Things were less active in London than they had been, but I probably knew of the work which they were doing in London on what they called "war measures". This took up an enormous amount of time, the general plan originally worked out being enlarged and growing all the time, which made necessary a great deal of integration. He had a cuestion to ask of me, Bolton continued; their friends, the Irish Currency Commission in Dublin, which was the currency authority for the Irish Free State, had some gold (about $2,500,000) and they were talking about shipping it to New York for safekeeping at the Federal Reserve Bank of New York. In this connection, he had been asked (1) whether we would receive the gold, (2) whether we would open a current account, and (2) whether the gold would come under the terms of our general export license. I replied that to numbers 1 and 2 I could not answer "Yes" or "No" because this was a matter which would require action by our directors here. Offhand it seemed to me, I said, that judging by what we have done in the past, I knew of no reason why we could not hold gold in custody for the Irish Currency Commission. As regards opening an account, it had been our general practice to open accounts only for foreign central banks or, at least, for banks which performed the essential functions of a central bank. In reply to the third question, I could state that any gold which we take under earmark here was covered by the license issued to us by the Secretary of the 303 FEDERAL RESERVE BANK OF NEW YORK FFICE CORRESPONDENCE DATE June 19, 1939. CONFIDENTIAL FILES SUBJECT L. W. Knoke TELEPHONE CONVERSATION WITH BANK OF ENGLAND. 2 Treasury which meant that we could receive gold for foreign central banks or for foreign governments for earmark and immediate export. In other words, gold held by us for the Irish Currency Commission would have the same rights as gold held by us for the Bank of England. Would we be willing to sell gold to the Irish Currency Commission although this was, of course, very tentative? I replied that my personal reaction was "with pleasure", but that this, of course, required Treasury approval. I promised Bolton I would study the whole problem and telephone him before Friday of this week. Things were pretty quiet in Europe, "not unduly discouraging". The Far Eastern incident, people had thought, would cause a flight from sterling. As a matter of fact and as we knew from his daily cables, the British fund had been called upon to support only to the extent of $14,000,000 or $15,000,000. The British govern- ment, Bolton thought, would not allow the Tientsin friction to develop into a major incident. He did not think the time had come again to become seriously worried about the political situation in Europe. Some two weeks ago he had hoped to be able to cover his $50,000,000 short position but owing to recent developments they were once again approximately back to that old level. "We never seem quite able to make the grade." I referred to my question some weeks ago as to the size of foreign funds in the MISC 60M 10 38 304 FEDERAL RESERVE BANK OF NEW YORK OFFICE CORRESPONDENCE DATE June 19, 1939. CONFIDENTIAL FILES SUBJECT L. W. Knoke OM TELEPHONE CONVERSATION WITH BANK OF ENGLAND. 8 London market. was he ready to give me an estimate? Bolton replied that he thought the total was in the region of £400,000,000, which included a good deal of British Empire money. He agreed with me that that figure must be very nearly the bottom figure below which foreign balances could not be withdrawn if foreigners wanted to continue everyday business in the market. He did not think the situation of sterling was now anything like as dangerous as it had been a year ago. There was no sign of flight of British capital although a limited amount of it had gone to America and some was still moving out, but there was no danger of a flood of money leaving England. Bolton showed considerable interest in our pending monetary legislation and inquired as to the probable fate of the Administration's Monetary Bill now before the Senate. He had also read of Thomas' new inflation bill. Bolton was interested in the silver situation and wondered whether anything would be done in Washington about foreign silver. LWK.KW 03V13038 each as Will 305 I PLAIN HM London Dated June 19, 1939 Rec'd 1:30 p.m. Secretary of State, Washington. 855, June 19, 7 p.m. FOR TREASURY FROM BUTTERWORTH. Unconfirmed and over-optimistic rumors regarding the Far Eastern situation and the Russian negotiations caused a late rally on the Stock Exchange today, with gilt edged showing strength. As on Saturday the British fund has operated today in neither the spot nor the forward dollar, but gave 50 of the 66 bars dealt in at Saturday's fixing, and 118 of the 149 bars dralt in today; 5 bars WERE married on Saturday and 2 today. Samuel Montagu was the sole buyer. KENNEDY HPD 306 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, Paris, France DATE: June 19, 1939, 6 P.E. NO.: 1161 FOR THE TREASURY DEPARTMENT. In exchange transactions today there was little of outstanding interest, such transactions being again on a small scale. A moderate amount in dollars was obtained by the fund. Steady continental currencies. On the security market, apprehension concerning the foreign situation caused a depression in prices and weakness was general on the opening of the market; towards the close prices improved, but moderate losses were shown on most of the list. WILSON. 03V13038 08 this KAME EA:LWW