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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.

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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;

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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

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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

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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

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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

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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

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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

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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

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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

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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
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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
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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

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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

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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