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DIART Boak 368 January 15-17,1941 - -BBook Page Bank Holding Company Legislation O'Manualy (Chairman, Temporary National Economic Committee) consulted about possible support for bill - 1/15/41 348 FIR suggests that Treasury. Federal Deposit Insurance Corporation, Comptroller of Currency. and Federal Reserve Board cooperate - 1/16/41.. 79 246 Belgium See Var Conditions: Gold (France - Dekar and Eayes) -cCanada See War Conditions Censorship See Var Conditions China See War Conditions: China; Export Control Caba See Var Conditions: Airplanes Carrie, Lauchlin 3. See Yar Conditions: China -DDakar See Mar Conditions: Gold (France) -3Economic Defense Board See Mar Conditions -7Fats; Oils See Mar Conditions: Export Control Federal Barean of Investigation Times accordante - 1/15/41. etc. Financing, Government Open Market Committee meeting - 1/16/41 Defense Savings Bonds, United States: Possible offerings (Endley memorandum) 1/16/41 Bur. Odegard, Knim, Foley, and Selvars discuss newspaper clipping analysis set-up - 1/17/41. France See Mar Conditions: Airplanes; Gold French Indo-China See Bar Conditions: Expert Control 99,269. 270,349 133 260 306 -G. Book Page Germany See Var Conditions: Foreign Funds Control Gold See War Conditions: France (Martinique) -IHungary See War Conditions: Foreign Funds Control -IIndo-China, French See War Conditions: Export Control Italy See War Conditions: Foreign Funds Control -JJapan See Var Conditions: Foreign Funds Control Johnson, Hugh S. (General) See War Conditions: Lend-Lease Legislation -KKayes See War Conditions: Gold (France) -LLatin America New joint board to handle purchases set up by War and Navy Departments; to cooperate with State Department directly and omit Treasury - 1/16/41 348 122 a) McReynolds to be consulted Mexico: Rodrigo, Ensabio: Opens account with Layyers Trust Company: Federal "Reserve Bank of New York reports suspicions of - 1/16/41 Lend-Lease Legislation See War Conditions Liaison Committee See War Conditions 171 -IBook Page SS Beaching off Florida discussed at 9:30 morting - 1/15/41 Martinique 363 100 See Mar Conditions: Airplanes; Gold (France) Mexico See Narcotics (Opium) See also Latin America Marging. Francis P. (Former Governor, Year Tempatire) FIRST asked by HWJ if he is being considered for Federal appointment and if so should income taxes be checked - 1/15/41 a) FIR's ansver calling attention to mitual dislike of Marphy and Sullivan - 1/17/41 b) See Merry-Go-Round story - situation after 90 322 he went to Defense Commission in charge of shoe purchases for army: Book 349. page 256 -3Tarentics Opian in Mexico: Mallace asked about situation upon return - 1/16/41 113 -0Oils: Fate See Mar Conditions: Export Control -PPersonnel, Division of Graves and Thompson still waiting to see BirLSD 1/15/41 Palant For investigation and action taken, see Book 353 See Mar Conditions: Gold (France - Date: amt Eayes) ---Beed, Stanley (Justice, Supreme Court) Congratulates BWJr on Lend-Lease testimony - 1/17/42 Research and Statistics, Division of Report of projects during December 1940, Revenue Revision Suggested program (Sallivan remorandum) transmitted to FIR - 1/16/41 Indrige. Insabio See Latin America: Mexico 202 -s- Book Page Shipping See Mar Conditions Silver See Mar Conditions Spain See War Conditions Steel See Mar Conditions See Mar Conditions: Foreign Funds Control Switzerland See Mar Conditions: Foreign Funds Control --Taxation See Revenue Revision -UI.E.S.R. See Mar Conditions: Foreign Funds Control United Kingdom See Mar Conditions: Military Planning -VNet Conditions Airplanes: Cube-Martinique deal: Young reports on status 1/17/41 348 317 Danada: Dominion-Provincial Financial Relations: Breakdown of Ottava conference reported - 1/16/41 207 Densorship: Knox' press release and Treasury comment thereon 1/15/41 213 China: Durrie (Lenchlin B.) discusses with HKJr proposed trip - 1/16/41 Proposed stabilization agreement discussed by Soong and Cochran - 1/17/41 177 343 - 1 - (Continued) Book Page Mar Conditions (Continued) Economic Defense Board: Meeting in Attorney General's office; present: representatives of Justice, together with Berle, Henderson, Ginsberg, and Bernstein: 348 Foley memorandum - 1/15/41 96 a) Draft of Executive Order - 1/18/41: See Book 349, pages 54 and 358 (1/21/41): and Book 350. page 220 - 1/23/41 HMJr-Alsop conversation and eventual "good" article discussed at 9:30 meeting - 1/21/41: Book 349, page 109 a) HiJr congratulates Alsop: Book 349. page 300 Conference in Berle's office - 1/24/41: Book 350, page 258 Exchange market resume' - 1/15/41, etc. Export Control: Shipments to French Indo-China and Chinese ports listed for Hull - 1/15/41 100,265,350 82 Fats; Oils: Gaston and Eaas recommend export control since it is obvious that United States exports are entering Germany - 1/16/41 261 a) Henderson's attention called to rise in prices: See Book 349, page 267 Foreign Funds Control: See also War Conditions: Economic Defense Board Germany: Transactions in New York City accounts (12/6-31/40): Federal Bureaa of Investigation report (Name) - 1/16/41 Hungary: Transaction with Guaranty Trust Company - 1/15/41 270 98 Italy: Transactions in New York City accounts (12/6-31/40): Federal Bureau of Investigation report (Klans) 1/16/41 270 Japan: Transactions in New York City accounts (12/6-31/40): Federal Bureau of Investigation report (Klans) 1/16/41 270 Sweden: Transactions in New York City accounts (12/6-31/40): Federal Bureau of Investigation report (Klans) 1/16/41 270 Switzerland: Transactions in New York City accounts (12/6-31/40): Federal Bureau of Investigation report (Klaus) - 1/16/41 U.S.S.R.: 270 Transactions in New York City accounts (12/6-31/40): Federal Bureau of Investigation report (Klaus) 1/16/41 270 -T-(Intimued) Back Page The Conditions (Continued) Gold: France: Martinique: FIR refers a = Hull who will report his - With 34 hours - 1/16/41 348 Date: and Eages: Gebit situation and possible shipments for delivery = Bermany reported - A American Lagation, Effective - 1/16/41 165 205,211 a) Belgian and Fullish galt included Lent-Lease Legislation: Testimony by BM - arrangements for - 1/15/41 1 a) Release to be situar = - until HNJr gives word personally b) Schwerr, Eath. Citizens. and Filey to precede 362 to - c) Resume of with staff neuthers a) FIR discusses testimony with HAIr e) Attachments to statement: (1) estimated 33 dollar expenditures amt receipts of British Empire, excluding Canada, from January 1. 1941. to January 1. 1942; (a) United Kingdom's available dollar enclange assets on January 1. 1942 (confidential); (3) estimated long-term investments outside of United States: w tax rates compared the 1938 and - finance acts; (5) writish expenditures - the MRT: (5) fiscal reverses of Great Initials for fiscal year ending March 3. 1942 f) Questions that - be minet HAR g) Press comment 1) Discussion at metting - 1/16/41 35.36.37 40,43,45 49.50 56 114 a) Federal Service to be consulted a) Meeting with Determine Reserve, Commerce and British Purchasing Ession. 145,179 h) Balla comment 1) Ississ. Rettining, and Young discuss bill and testimony - 1/16/41 Parvis, Phillips, BMr. - Young, and Cochran discuss testimony - and Fish questions BUT and about "giving away the Eary" - 1/15/42 Reed (Stanley) and Chancellar of Bachequer congratulate - - teatherry - 1/17/41 High Johnson-Bill concurning Johnson's comment - testimony - 1/17/41 172 179 212 321,322 336,339,500 Limison Committee: Benefits derived from contraction reported by Young to BUR and - - Hall - 1/17/41 Military Planning: Reports from Lonine transittal by Lothian - 1/16/41 325,330 271.274.353 - - - - (Continued) Book Page Mar Conditions (Ontinued) Purchasing Mission: See also War Conditions: Lend-Lease Legislation British Requirements for Steel in United States: Haas sentential - 1/17/41 368 a) Game Burn provided with estimate of requirements - 1/17/41 British Simily Commil in North America: Personnel - 1/17/41 Jones' cold reception of Purvis and Phillips reported the Stimson and Knox by - 1/17/41. Testing Order: Official sales of British-onned dollar securities, 2/22/40-1/11/41 Shipping: Losses - British, Allied, and neutral - 1/16/41 British Marchant Shipping Situation: Chief of Staff memorandum Silver: Spain: State Department asked by Cochran concerning problem of refining and paying for approximately $750,000 worth of Spanish silver - 1/17/41 313 333 315 323,324,325 352 196 197 320 Steel: British Requirements for Steel in United States: Haas securation - 1/17/41 a) Game Dunn provided with estimate of requirements - 1/17/41 White, Harry R To assist Tagner am monetary study - 1/17/41 313 333 303 Willkie, Tendell L Trip to England and men to accompany him discussed at 9:30 meeting - 1/16/41 110,175 1 January 15, 1941 9:35 a.m. RE AID TO BRITAIN Present: Mr. Tuhn Mr. White Yr. Schwart Yr. Bell Yr. Foley Yrs. Klotz Yr. Cochran E.M.Jr: Now, I want to find out, where is the White: This is the one which includes Canada statement now? Has it been mimeographed as you wished. E.V.Jr: Yes. Now, what I want to do is this. Did you (Schwarz) have this thing mineogranhed. Schwars: Yes. H.M.Jr: I take it Foley wants to go up on the Eill, to be there now, don't you, Ed? Foley: All right. I - not going up until later. You can H.M.Jr: whome m. I OR not at all well, and I - going to stay here. I want Harry White to stay and I would like to get a chance to go over some of this stuff with him, but Chick, I want you to look at me. Until I personally tell you to release this thing, 2 -2you don't give it to anybody. Schwarz: I will stay right with you. H.M.Jr: No, you go up there. Schwarz: H.M.Jr: I will go up now, and wait for you. what is the other one that is there? Schwar-: There are three. (See attachments 1, 2, and 3.) H.M.Jr: Have you got them numbered White: There are just those two. H.M.Jr: What is the third one White: The third one is a list of the various H.M.Jr: Have you got those mimeographed? White: Yes, but I doubt whether you want to distribute them. H.M.Jr: Just so we understand it, Chick, you go up there now so you will be up there, and you Empire assets which are not confidential which you may or may not want to refer to. can take one of the Negro messengers with you to sit on it, or one of your boys; but if this stuff gets out until I tell you to -- Schwarz: It won't get to anybody. H.M.Jr: I won't accept any excuses, do you understand? Schwarz: Right. White: Does Mr. Feis know that? 3 -3Cochran: At your request I am getting this to Feis. I was just sending it over there to his office. H.V.Jr: Has it gone Cochran: Hawkey is over there. I can ston him. H.M.Jr: You had better go and tell him until I want the thing released, it is not to be given out. Cochran: I will stress that. White: You had better call him right away. Cochran: I will get Mr. Hull's office directly because Feis is there. H.M.Jr: Well, just get that word to them, will you? Cochran: Surely. H.M.Jr: Then come back. Schwarz: That means the committee or nobody. H.M.Jr: Nobody until I give you the word personally. I don't want this to be given to anybody, do you understand, and I won't accent any excuses now. Schwarz: You won't be given any. H.M.Jr: All right. It went over this morning to Feis White: Just now. He said he had instructions to give it to him. It was about ten minutes ago. The British had a copy last night. H.M.Jr: That is all right. Tell, you (Schwers) might -4as well get un and don't you (Foley) want to get up on the Hill I don't want to troop in the whole bunch at once. I will be here, Ed, and you let me know how the thing is going. I mean, supposing - in any case, you give me e call not later than 10:30. Now, where is the place Foley: It is the House Ways and Means Committee hearing room, Ways and Means, where we go on taxes. That is the new House Office Building. They moved it from the Foreign Affairs Committee hearing room because it wasn't big enough, and they are holding it in the lays and Means. E.Y.Jr: I don't know who is going with you, but you can 20 and Kuhn, you go on un on the Hill and I think it would be useful if you would let Professor Odegarde go with you. Tubm: All right. E.M.M. And tell him to listen and if he sees something - now, for instance, he said one thing walking home last night. I tried out this thing on the question of collateral. He said one thing, "Tell, if they want collateral, it seems to me that Angland is offering at sufficient security through the fighting that she is doing now. Kuhn: Offering us our security as collateral. E.M.Jr: I mean just - well, she is giving us security through doing our fighting and through the Fritish fleet, but I mean I want him there in case he catches something and he can write it out and give it to Harry White and Harry White will give it to me, but anyway, it is 8 treat for him. I am doing it largely for that reason, do you see? 5 -5 (Mr. Cochran entered the conference.) H.M.Jr: Did you catch him? Cochran: I got Mr. Hull's office. They hadn't given it to him yet, and I told Hawkey to wait and give it to Feis personally. H.M.Jr: Hawkey Cochran: Hawkey is my assistant. H.M.Jr: Give it to Fels? Cochran: Yes, Feis is in with the Secretary now. H.M.Jr: What message did you give to Feis Cochran: Feis is with the Secretary, and I told him it was not to be shown to anyone except Full until you released it, until you use it yourself before Congress. H.M.Jr: That is right, and you told that to Hawkey Cochran: No, I told it to Brown who is the Secretary H.M.Jr: I see. How many copies are there over there? Cochran: Just one of each. H.M.Jr: Well, Hull is entitled to it. Cochran: Yes. It was understood I should give it H.M.Jr: Bell: to the Secretary. to him. That is right. Non, Danny, are you going uo when I go uo or what well, I will leave that to you. I will go 6 -5 whenever you want me to. E.M.Jr: Well, my thought was this. Ton never know what they are going to ask, you see, and I think that your brain on this balance sheet would be useful to me, so when I begin to go over it, I would like you to listen and you might pick - something. I think if you and White stay here, but be prepared. Have your own man un there and have everything public then and everything. What is his name? Bell: Heffelfinger. E.M.Jr: Have him ready and I would like to go over Bell: All right. You mon't go before 10:30° E.F.Jr: No, but I am going to start working on this this stuff with you and White. right now. Now, does employed went to tell me anything? Folay: Do you want John there - the taxes E.M.J.: No. Haven't you got it? White: Te have it, but I thought you might - we have the table but in case you went to call him to give you a rest, let him discuss it. It might give you a few minutes' rest. H.M.Jr: What, the comparisons? White: If they call on a comperison, I thought you might say that their debt is very much larger, probably almost as much as ten, but Mr. Sullivan is here who follows that closely, and that might give you several minutes' rest, if you are being pushed. 7 -7H.M.Jr: Yes. Have you got the stuff? White: Yes. H.W.Jr: Have you (Foley) got it° Foley: Harry has got it. He has got the charts. You can submit the charts for the record. It seems to me that no detailed explanation is necessary. E.M.Jr: No. O.K., gents. You call me in any event. Foley: I will call you in any event before 10:30. E.M.Jr: When are you going to go up? Cochran: Do you need me? H.M.Jr: I want you on the Hill. Cochran: When you go - H.M.Jr: That will be time enough. I will see you later. (Mr. Kuhn, Mr. Schware, Mr. Foley and Mr. Cochran left the conference.) E.M.Jr: Have you got a copy of this? White: No, I will give him one. Bell: Have you got a prepared statement you are going to read? H.M.Jr: You are going to hear it now. Nobody could give me a statement that I liked, so I an going to do it my own way. You people could sit both in front of me and make life a little easier. 8 -8Have you (White) got something for Mrs. Klotz White: I was just looking for another copy. H.M.Jr: Odegarde has got an interesting mind. Just to digress a minute, the thing that interests me, he is going to do all of this studying on how to approach the thing, and he says, "Now, Mr. Morgenthau, do you want to do it the way the Armor Company does? They take it and say to their employees, 'Now, you can buy these baby bonds. Or -" this will interest you - he said, "Now, I am afraid you are not going to agree with me. Would you rather, for instance, go to the unions and have them spread it to the union members and let it come from the bottom un rather than from the employers down," so I said, "There is no choice. The whole purpose of the thing is to get the morale of the people I am more interested in getting people interested, you see, in this thing rather than have it from the employer down;" so he said, Now let me ask you another one. I am just giving you this. I know I am killing time, but I want to. The other thing, he said, "Which way would you prefer, if a county raises a hundred thousand dollars, present them with an American flag, or would you like to say to them, 'If you raise a hundred thousand dollars, that will pay for a pursuit ship. White: Well, the second. H.M.Jr: Well, I know, but I am giving it the way he is thinking, you see, so I said, "Well, we can't say honestly that that hundred thousand dollars will go, because we don't know about the bookkeeping; but you can say 9 -9that a hundred thousand dollars will buy a pursuit ship." He said, "That is correct. I just want to give you the kind of thing that he is talking to Bryan and these other fellows and when we finally get something in writing, I want you to sit in, but the fellow is approaching it -White: A fresh approach. H.M.Jr: From the way I wanted. In other words, he is just as determined, I mean without my putting - to have the thing come from the grass roots up rather than from the banks down. It is interesting to have a man like that around. White: I would like to send for another copy of this. H.M.Jr: That is all right. He says that some of the advertising during the World War was the most God awful stuff you ever saw. He saw a picture of the bombing of the Woolworth Tower, the Woolworth Tower crumbling, and they say unless you buy a bond, this is what is going to happen, what they call fear. Bell: Yes. Of course, that was made un rather quickly. They didn't have any experience and a lot of it was terrible. H.M.Jr: When I told a few things to MacLeish last night, he said, "Gee, can I meet that man? I want to meet him. He sounds good to me. So I have arranged that he should see MacLeish. But as Harry put it, it is a fresh viewpoint. White: He has imagination. (Discussion off the record.) 10 - 10 E.M.Jr: Nom, this is not my reading copy, I hope. White: I an sorry, but it is. The can have & larger one made for you. H.M.Jr: That is what Yrs. Klots is here for. Earte you got two more conies? White: Yes. H.M.Jr: Give one to Yes. Elots. "EstimateE Dollar Exempitizes and Receipts of the British Entire, Excluding Danada. That is THIS isn it hite: It excludes what Demada gets in receipts, but It doesn't exclude what England and the rest of the British Empire has to TAT to and from Demacke. E.M.Jr: Say that artiz, will you please? White: This excludes what Canada may get or lose. You rementer, as I told you, she will probably get about 200 million dollars of role & year but that is not Included: but it does include what England, for example, will have to TAT to Canada, and this is the only may it DEZ be extressed. The tried it in a dosen different ways. It is the only accurate TAY. It is the receipts of the British Empire without Canada. .M.Jr: . I don't like to hurt anybody's feelings. tell, I thought they said they wanted Canada in. White: Tell, Canada is in, but not Danada's receipts. Canada is treated like a foreign country, so for as this thing is concerned. H.M.Jr: Well, where is she* 11 - 11 Bell: Town at the bottom there is a deficit. E.M.Jr: I don't understand it yet° Thite: I think it will be clearer if you go through It and then we will go back to the title. '1., United Kingdom Payments To Be Made On Total British Purchases From The United States. (Yr. Dochran returned to conference.) F.M.Ne have you (Cochran) got a copy of this Cochran: Yes. I just smoke to Feis in Mr. Hull's office, and he is telling Mr. Hull he has this but he is not letting him take it un to the Hill, even. He is afraid if he had it in his papers, it might get out; so Feis is going to hold onto it and they will phone IS if they need - if they press Mr. Hull for any information, but they are not going to DB this: and Fels is not even going to tive it to him to take up on the Hill. F.M.Mr: Eas Hull started" Cochram: Ee was just leaving there. They were just rutting some finishing touches on the statement. Thite: Te have the British order program down. E.M.Jr: That last thing they gave me marked January 6th or 8th, the thing that Purvis gave me which I gave to the President, is the thing which gives the quantities but not the dollars that they will need, you see. You (McKay) had better fine out from Young's office if he has got that un on the Hill with him. Ee is us there to be useful. If he hasn't got it, somebody 12 - 12 - had better take it up to him. Now, "United Kingdom Payments To Be Made On Total Purchases From The United States. "1- Sums to be paid during 1941 on orders placed before January 1, 1941, one billion, 274 million. (In addition, $119 million will fall due after January 1, 1942.) "2- Imports from the United States not purchased through the British Purchasing Commission, largely on private accounts, 280 million. Total, one billion 554 million. "B., Purchases By Empire Countries (excluding U.K. and Canada) from United States during '41. Now, where have you defined "Empire Countries"? White: I didn't think "Empire Countries" need to be defined, because every time we mention Empire Countries, we have to exclude Canada because Canada shouldn't be included. H.M.Jr: What are they? White: Australia, India, New Zealand, South Africa, and the Colonies, Hong Kong. H.M.Jr: Colonies? What colonies? White: Hong Kong, British West Africa. Cochran: It is really all of the British Empire except Canada. E.M.Jr: Do you know how many there are? Forty-four? White: Forty-four? I didn't know there were that many. 13 - 13 Cochran: I see, Bermuda and the West Indies H.M.Jr: Yes, I think there are 44. I think there are 44 governors, if I am not mistaken, for all these different things. "1- Commodity imports. "2- Payments for shipping, tourist expenditures, interest payments, etc. "C. Purchases by Empire countries, excluding Canada, from areas outside the U.S. recuiring gold or dollars." That is excluding the U.K., what White: That is right. If I may have just one word of explanation, maybe it will clear it up. The have to exclude Canada every time we say the British Empire, but beyond that, the first one, A, is what the United Kingdom buys from United States. The second one is what other parts of the Empire buy from United States, and the third is what the whole Empire, always excluding Canada, buys from other countries besides United States. H.M.Jr: Purchased by the Empire countries, excluding Canada. Outside the United States. "1-Purchases by Empire countries (chiefly U.K.) from areas outside the United States and Canada requiring dollars, 247 million. "2-Payments by Empire countries (chiefly U.K.) to Canada and Newfoundland. I see. White: That is the one item they wanted to add, 14 - 14 and it was because of that item that we had to shift around all the -- Bell: Why do they require dollars outside of -- White: Well, they claim they have to pay dollars for Bolivian tin and Paraguayan lead, and they say there are some things they can't buy without paying dollars or gold, and that is what it amounts to. That is not 3 net figure, because they also get some. That is what they pay cash. Bell: I say there is a tynographical error in (2) under "C", countries". I don't know whether you want to correct it or not. White: Oh. It is a little late. Bell: Yes. H.M.Jr: Well anyway, "By Empire countries, (chiefly in the United Kingdom to Canada and New- foundland) 880, so the total dollar resuire- ment for all transactions for the coming year is a little over three billion dollars. Bell: That is already on the books. White: What did you say? Bell: This is what is already in the mill, on White: Well, this is their estimates of this coming the books. year. Bell: But the first item is just on contracts, White: Already in the mill, placed before January 1. or just on orders already placed° 13 - 15 It doesn't include anything placed after. There has been very little placed, I understand, during the first ten days, with no orders. well, got the thing last night, seven different memorands from Philip Young, which I read this morning between four and five, and including those ships in December they placed orders for 110 - Ilion dollars. hite: This year^ E.v.Nr: December. bite: Oh, December. ell, that should be in here. Tt must be : here. Mile: Yes. The only thing - it should be in here because got Philip's figures yesterday and made another confection, and changed them so the only thing that shouldn't be in there 333 they Inced next to nothing, is what they +Isce5 since January 1, and my but : = not sure. You know the joke is, where the pressure is coins to come to get this thing through, Bill Knutsez talked to it yesterday. won't place 37 oppers for these engines with gekard and Studetaker because they tell me that you won't let the Enclish -lace any more orders. sale, Tell, we can't -lace the orders. the ell, you had better come over and see me. e have been telking about this thing for two months. hite: It is all right. 16 - 16 F.V.J.: It is all right, that is just the way I "hite: That is your responsibility. They can place the orders, but they - they know that they feel. I mean, temporarily. can't be placed. F.V.Jr: I am tickled because Knudsen may tomorrow 20 up and say in his testimony, Tell, Mr. Morgenthau said I couldn't tlace these orders. White: And then you can say you are not termitting them to place them because you are not certain that they will have the cash svailatle to pay for them. They may, but you want to -- H.M.Jr: That is why I think it is all to the good. Ail right, so far, Dan Do you see any holes Bell: No. I have got of question when you get down to the bottom. E.V.Jr: You see what I am proposing to do, Tan, is to just say a few words. Now, gentlemen, I have come un here. take it what you want to know from me is, what is the balance sheet of the United Kingdom as we have we have it and as the information has been given to us by the British Treasury. Noz, for the first time in history I am going to be able to give you this information. want to kind of show that this is something that has teen so secret and everything else, But I feel that the situation is such that before you gentlemen want to vote or cass on the question of whether or not the United States Government should lend these materials to England, naturally you want to know her financial condition. 17 - 17 White: It is a momentous occasion for a country at war to inform the public exactly what their foreign exchange assets are. H.M.Jr: And I am doing this with the knowledge and the approval of the British Government. I mean, they have given me the permission to do this. Don't you think I ought to say that? White: I think so. Bell: Yes. Klotz: Yes. H.M.Jr: And I mean this is something which has never been done before. It wasn't done during the last war. But before you people take this step, the Administration feels that you are entitled to know the exact situation. White: That statement is important. Would you want H.M.Jr: No. Harry, I mustn't do anything to criticize to say that they were a little reluctant but they realized, et cetera. them. White: Well, that won't be criticism. It would show the importance of the data. H.M.Jr: Well, I want to say that it was only after careful deliberation. Cochran: They left it to your discretion, do you want to put that in? H.M.Jr: No, and this is going to be just as much a surprise - just as much news to their own people as it is going to be to the people 18 - 18 - of the United States, But we feel, at least I do, that the first thing before you gentlemen take any steps at all, you are entitled to know what is the condition of the British present. White: That is the important statement. H.M.Jr: And we certainly aren't roing to make the mistakes that ze made during the last war. You see, Mrs. Roosevelt said something I can't cuite paraphrase. She said to me, "Henry, unless you tell these people everything, we are no different than J. P. Morgan was during the last WAT. White: Do you think they will understand what you mean by "not going to make the same mistakes unless you 20 on and explain that, because they are liable to think you are referring to the mistake of lending money? You might H.M.Jr: 20 into a further explanation. The point that I want to get over, here is something that has been guarded so secretly that nobody knows it. As far as I know, never in the history of the world has one government completely opened its tooks to another government, but the situation being 'hite: She hasn't omened her books. H.M. Why haven't they^ White: They have made : statement. H.M.Jr: White: Tell, it is the information that is in the books. Yes, but we haven't seen it. 19 - 19 H.M.Jr: Well White: I mean protect yourself that way, that is all, that this is information they have given you. H.M.Jr: But I want to give this a little build-up, see. Bell: I don't want to disturb your line of thought that you worked out, but I would change the term "balance sheet to show them the financial status of the British Government as it relates to the United States dollar, because they were very particular in their cable, as I understand it, that this doesn't mean that they are out of cash internally, and the other thing is that this is not a balance sheet, it it more in the nature of an operating state- White: ment, see, call it a financial status. Financial status in relation to the United States dollar. E.M.Jr: That is a good one. It is the financial Bell: In relation to the dollar only. It is status. financial status of the Pritish Government as to their dollar position. White: H.M.Jr: Yes, that is all right. Status and position. As to their dollar - as to their dollars. As to their dollar position. Bell: You could say as to the dollar. White: As to their dollar position. Bell: That is all right. 20 - 20 E.M.Jr: You speak of taking the position in dollars and taking the position in sterling. Cochran: E.M.Jr: It is the dollar position. This is the financial status of the British White: Dollar assets and needs. H.M.Jr: Well -- Fell: Position covers the needs and assets. E.M.Jr: Well, a word won't matter. As to their dollar position. White: H.M.Jr: Put you are going to say it orally. Well, I on roing to have this, but I an going to say it orally. Thite: It is not going to be in the printed statement H.M.Jr: No. Dollar Receipts. Government as to their dollar position. Or, as to their dollar needs. at all "A. Dollar receipts by U.K. from U.S. "1- U.K. exports of merchandise to U.S., 165. 12- Net balance -- these 478 all estimates, aren't they White: These are all their estimates. H.M.Jr: I will out that down as soon as I get the other sheet. These are all estimates, are they? - 21 - 21 Flots: It says so on top. E.W.Ir: Well then, why not say "The financial status Why not say, Estimated financial status"? Well, I think that is implied when you say Tinancial status." Whites Fell: Your statement will carry that through, because this, I take it, will be inserted in the record. White: Yes. Any dollar receipts by United Kingdom in United States. "1- U.K. exports of merchandise to U.S. "2- Net balance from U.S. to U.K. on shipping, tourist expenditures, interest payments, etc. "B. Dollar receipts by Emoire countries (excluding Canada) "1- Commodity exports." White: That is rubber, tin, wool. E.M.Jr: I see. "2- Australian gold exports to U.S. "S- South African exports of gold." You separated those two for some reason? White: well, some comes direct to United States and the others get to United States eventually, through Great Britain. E.M.Jr: Now, "Canadian assistance to U.K." What is that? 22 - 22 White: That is in the form of repatriated securities. That is, England expects to pay Canada during the year 260 million dollars in her own securities. She will give back securities which Englishmen had owned. It is just the way she give us back our securities. H.M.Jr: that happens to the Canadian gold? Thite: Well, they say it isn't there, it is Canada's. H.M.Jr: Yes, but what does Canada do with it? White: Canada's position with United States, Canada will in her relations with us gain gold. She will have about 200 million dollars more at the end of this year than she has now. She has a favorable balance. Bell: Even in spite of her war purchases in '41° Thite: Yes. I have her sheet if they ask for it. I didn't want to bring it up. H.M.Jr: You had better not. But she has? White: Yes. That is one of the reasons why they H.M.Jr: Harry, just remember this, we don't have the permission of the Canadian Treasury to release may not like to include it. But they have a surplus of United States dollars to be received by Canada during 1941, 198 million dollars. their figures. Hait a minute, just a second, take it easy now, so therefore if I have to stall I can simply say, "Gentlemen, I am not prepared, but in a week I can come back again if you want me to, to give the Canadian position." 23 - 23 White: That is a good way to do it. Then you won't have to tell them you haven't got permission to give it. H.M.Jr: Oh no. Check, Dan? Bell: Yes, it is very good. White: But I think you could say, Mr. Secretary, if they do ask, that they are not in the same position as England. They don't one us - give them a general idea what it is. H.M.Jr: I can say this. "I have simply been assured by Mr. Clark, representing the Canadian Treasury, that as far as they are concerned White: for this year, they are all right." They are in a different position. They are all right. Bell: They can take care of their requirements up to September. White: For next year? H.M.Jr: For this year. That is what he said. White: And then you can give them the exact data. H.M.Jr: And then if they say, Well, why doesn't Canada help England more?" "Well, they are buying back their securities as fast as they can." White: They are buying back -- H.M.Jr: I can say that is a matter between Canada and England, and I am not prepared to talk about it. 24 - 24 White: I think so, because there may be some doubt as to whether she is buying them back so fast. H.M.Jr: They tell me yesterday, just to digress a minute - your were here, Dan - that the night before last this syndicate offered 80,000 shares of Montgomery Ward at three o'clock at the price it closed at the market, and inside of E few minutes the whole thing was sold. White: They probably could have done that any time. H.Y.Jr: And this BET of Dominick & Dominick, "You know, Mr. Margenthau, it is the easiest thing I ever se and none of us can explain it. Te can't understand why a group will buy 80,000 shares of Homitgemery Ward at the market's close, one minute after market closed, but they won't Buy it one minute before, so I said, "Well, maybe there is something wrong with the New York Stock Exchange if they don't want to buy it." And I thought Schenker would fall out of his chair with laughter. Ee loved White: it. Ee thought it EES marvelous. I told Sir Frederick over the phone because he raised the question again about Lever Brothers and I told him what our information was and he said he Was surprised, he didn't know it. be didn't say it wasn't so, he just said he was surprised. H.M.Jr: Yes. Thite: I think you are up to "C", Dollar Receipts. C. Canadian assistance to U.K. 260. Total dollar receipts by Empire countries excluding Canada, one billion 155 million. Total deficit to countries other than Canada during '41, 844. H.M.Jr: 25 - 25 That means - total dollars to other countries. Does that mean other countries in the Empire? White: No, me are now talking of the whole empire. H.M.Jr: Does that mean the whole world? White: Yes. Bell: Including the United States White: Every country. H.M.Jr: Inc then the total dollar deficit with Countries other than Canada. Canada, 620. They want to make that stick out, do they? H.M.Jr: That is the difference between the sale of securities, 260 and the 880, see. It shows right up in England. There is the 880° White: On the expenditure side. Bell: The last item. White: Payments ty Canada. H.M.Jr: Total deficit of the British Empire, one tillion, 460. Gee whiz, they raised that Fell: on me, didn't they? Now, before we go on, do you want to say anything, Dan® Bell: line relates to the next statement. We show a deficit of one billion 464, and I take it that what you are trying to show here is that the British can't place any more orders because that have just got enough liquid assets in the billion 775 to take care of the one billion 464. 26 - 26 No, out it the other way around, if you don't mind. What I an trying to show with all the power that I have got in me, is that they have got enough money to pay for the orders they have already placed. Fell: That is right. But no new orders. Now, E.M.Jr: That is the point. I- other words, the coint they will raise, Mr. Secretary, they are all right, they have got plenty of money to meet their deficit and they have got 300 million dollars left Fell: where we go from here -- over from these statements without explanation. E.M.Ir: That is right. But I am willing to say, But these figures, the direct investments, 900 million, I don't know how much they can cash in on them. It is going to take time and - but the point is, gentlemen, that if they were able to get a humdred cents on the dollar, of which I have grave doubts, they have got enough money to finance them- selves to the end of the year. Whites and they have to have some working balance. But what I have been trying to show you is that the reason me need this bill is that these requirements that they want - new orders that they need so desperately to continue fighting, they haven't got the money. White: That is right. E.M.Jr: They just haven't got the money. Cochran: There has already been a retardation in the placing, hasn't there? 27 - 27 H.M.Jr: Oh yes. White: I have something on that that I would like to give you after that, but I called Sir Frederick about that billion dollars. H.M.Jr: The direct investments White: Direct. I said, You must have E figure." Ee wanted to make it lower, and we finally compromised on the 900 million, because you had used it before; and I said it wasn't far from what Jones 00 others might use, and we made it about. 5e would have preferred to say "not to exceed, because he thinks it will be closer to six or 700, so the only difficulty between this and what we would have liked is, they have direct investments, of about 900; and he would have liked to say "not to exceed, but I think he is under- stating. E.M.Jr: Say, that 205 has shrunk since yesterday. Tasn't it more then that? White: Well, we were including some gold that we mon't get here since January, 245, so me decided we had better DATE it as of January 1 and exclude that. H.M.Jr: "The British Government has 33 million dollars of gold scattered in various parts of the world. Most of this gold, however, is in areas from which it cannot be shipped quickly or safely to the United States. "British banks, private tersons and corporations have balances in the United States of 305 million. The British Government feels that these balances are at the minimum level necessary for the continued conduct of business, and are therefore not available for use by the British Government." 23 I think it is all right. Fell: You - the galit is not includen, Harry, White: No. That gale is included in their regular receipts during the per cell: The 2050 White: Yo, not the 205. That is the assets on which Bell: The emorts from Smith Crick menthy minet" White: Yes. Bell: That is SET estimate of the mines. That isn't which will - in - they will have to seet that deficit. available imediataly either. It is over the year. In that statement there, you were worrying abmit - estimate. If you wanted to - the other me, the financial status. Tow mile SET BE DESCRIPT = estimatee, "As nearly BE - CET esting = this time." White: It is the British Sometiment that has estimate most of it - not the orders, but the other. Time - SET, " merity as can be estimatet, this figure of Insurance securities reported in Iritian as of January E, 616 million dillars, that drea must include 140 million fillers of varions times of securities which the are not certain wer the marketed easily- In fact, them i think they could The marketed easily- See are Australian dallar securities." H.M.Jr: Say that again White: There is 140 million 29 - 29 - E.I.Jr: In the 616* White: In addition to the 516. There is 140 million dollars which has been frequently mentioned here. E.M.Jr: That is what kind of securities White: Well, it is Instrulian and New Zealand and dollar securities, or optional dollar. They doubtless have some value. E.M.Jr: There are the properties located White: They are loans of other countries - the investments are not in the United States. They are loans that have been floated in dollar securities. E.M.Jr: well, if - White: E.1.Jr: There is E little bit more velvet is all. That do they call Australia White: Commonwealth of Australia. E.M.Jr: If they wanted to borrow 10 million dollars, they might have horrowed it in New York. White: That is right and floated E dollar loan. Some of them are optional. Non, they do have some market value, so that in case - Bell: Well, that isn"t the kind of a -I think it is more. Dochran: Bell: That is not the kind of an obligation you are talking about. 30 - 30 White: They floated an Australian loan in dollars. Bell: I take it that Australia may have borrowed, say, from Belgium, in Belgian francs, and there is a provision in the bond that the Belgians, the holders, can get American dollars. White: That is optional. There are a lot of them and all together they make 140 million. H.M.Jr: I think when I get through, I have got to say this, "Now look, gentlemen, this is a rough estimate. I may be off 50 or a hundred million dollars, or I may be off 200 million dollars, but this is as good you have got the best that I can give you. White: And you got it from the British Government. H.M.Jr: "And I got it from the British Government." Thite: They accept the responsibility for these things. H.M.Jr: "I got this from the British Government. I may be off a couple of hundred million dollars, but at least I am giving you the best that I have got; and if, while the bill is in the progress of going through Congress I get any additional information, I will furnish it to you promptly. White: Or if you want any information that we can get. H.M.Jr: See? Bell: They may come back with the question, "Well, have you checked these figures and do you feel them fairly reliable?" 31 - 31 White: They are very apt to ask you that question. Now -- H.M.Jr: I know how to answer that. White: It is a difficult question. H.M.Jr: I can answer that. "I want to say that in my dealings with the British Government during the past seven years, at no time have White: they ever wilfully misled me. As far as I know." E.M.Jr: Tell, I mean -- Bell: No, he can't say that. Cochran: You have no evidence of ever being misled. H.M.Jr: I an going to say, "In my dealings with the British Treasury, I have been entirely satisfied and I have never known an instance where --* White: That is right, "You have never known an instance where they have given you misinformation. H.M.Jr: "And I have no reason to believe that this information they have given me isn't correct within the realms of human margin of error. Bell: That is not unusual in this kind of state- H.M.Jr: And I will say, "After all, you gentlemen ments. have got to remember that they are being bombed daily"and can I say - they have meter said it, you know - "You know the British Treasury is -"is it 11 Downing Street Do you know it has been completely destroyed? 32 - 32 White: No, I didn't know that. E.M.Ne all their records and everything. Bell: Is that right Sure, he told me this when he came here. He said to me, "You know, Yr. Yorgenthem, you asked me for these things. Tell," he said, "the British Treasury is no more. Dechrant You see, it faces on Whitehall, Earry. It is just around the corner from No. 10 Downing. White: It would be very interesting if you could say that. (Unrecorded telephone conversation with Yr. Poley.) White: The President wrote part of Hull's state- ment. E.Y. Ir: White: Ee 616° Some preliminary portion, I don't know how much. E.N.Are Tell: There did you get that from? White: Berle. Fell: lirote mhom? White: The President contributed part of the statement. Cochram: They were still revising there when I E.M.,Yr: I suppose for me to go up this may is just unheard of, but I an not going to get calé talked to them both times. feet at this time. 33 - 33 White: Oh, I think that this is indeed the best way. Particularly after his prepared statement. I don't see what you could add. This is the important information. The minute the Press gets this, they will disappear and come back later. H.M.Jr: Now, have you got your South American White: Yes. H.M.Jr: There is that? White: I would like to take up something with stuff* you before that, if I may. H.M.Jr: The President of the United States calls me up at 20 minutes to eleven to tell me what to say. He calls me up and said, "I just wanted to kid you. And then he proceeds to tell me what to say. I don't know if I understood what he said, but he said, "Non, don't be too definite" and so forth and so on and be sure of what Mr. Hull says and if they offer any islands as security, remember that they had better pay us to take the islands. I says, "Don't worry about that. I know how you feel about the islands." Well anyway, I can't -(Unrecorded telephone conversation with Mr. Foley.) H.M.Jr: Anyway, I told the President what I proposed to do about my statements, and everything 34 - 34 - else, and he said, "That is all right." White: Mr. Secretary, Mr. Bloom is going to ask you some questions which we planted with him, and I have got to have time in the car to tell you what they are. I don't know if you can do it right now. H.M.Jr: No, do it in the car. 35 Estimated Doiler Expenditures of Pritish Enpire, Excluding Canada, from January 1, 1941 to January.1. 1942. (in Killions of U. S. Dollars) Dollar Expenditures A. U.E. payments to be made on total purchases from the U. S. 1. Sums to be paid during 1941 on orders $1,274 placed before Jan. 1, 1941. (In addition, $119 million will fall due after Jan. 1, 1942) 2. Imports from U. S. not purchased through the British Purchasing Commission,-250 $1,554 largely on private accounts. B. Purchases by Empire countries (excluding U.E. and Canada) from U.S. during 1941 1. Commodity imports. 333 2. Payments for shipping, tourist expeniiture, interest payments, etc 5 338 C. Purchases by Empire Countries, excluding Canada, from areas outside the U.S. requir- ing gold or dollars 1. Purchases by Empire countries (chiefly U.K.) from areas outside the U.S. and Canada requiring dollars 2. Payments by Empire Countries (chiefly 247 550 U.K. to Canada and Newfoundland 1,127 $3,019 Total dollar requirements for all transactions. Dollar Receipts A. Dollar receipts by U.K. from U.S. 1. U.K. exports of merchandise to U.S. 2. Net balance from U.S. to U.K. OC shipping, tourist expenditures, interest payments, etc .$ 165 15 $ 180 3. Dollar receipts by Empire countries (exclud time Canada) 1. Commodity exports 2. Australian gold exports to U.S. 3. South African exports of gold 560 75 480 260 C. Canadian assistance to U.K. Total dollar receipts by Empire countries, $1,555 excluding Canada. Total dollar deficit with countries other than Canada during 1941 Total dollar deficit with Canada during 1941 Total dollar deficit of British Empire, excluding Canada, during 1941 Total receipts and deficit on operations with all countries other than Canada during 1941 Treasury Department, Division of Monetary Research. 1,115 544 620 1,464 $3,019 January 14, 1941. 36 CONFIDE TIAL UNITED KINGDOM'S AVAILABLE DOLLAR EXCHANGE ASSETS ON JANUARY 1, 1941 (In Millions) Gold in U. S. or en route Official dollar balances $ 205 54 American securities -- reported by British as of January 6 616 Total liquid assets Direct and other investments Total dollar exchange assets 875 about 900 $ 1,775 The British Government has $33 million of gold scattered in various parts of the world. Most of this gold, however, is in areas from which it cannot be shipped quickly or safely to the United States. British banks, private persons and corporations have balances in the United States of $305 million. The British Government feels that these balances are at the minimum level necessary for the continued conduct of business and are therefore not available for use by the British Government. Treasury Department, Division of Monetary Research. January 14, 1941. 2 37 3 Estimated Long-Term Foreign Investments of the United Kingdom Outside the United States The following estimates are based on a number of studies, most of which were made by British economists before the outbreak of war. Most of the investments are in sterling securities; a large part of the Canadian investment 1s in Canadian dollars, and some of the other investments are in the respective domestic currencies. However, for convenience of presentation, the estimated nominal value of the investments has been converted into sterling. The market values, where given, are calculated from current market quotations of the securities. Since market quotations are not available for a large part of the investment, mo total market value can be calculated. Even where estimates of market value have been made, they have only a limited significance, for the future market or collateral value will depend on the rapidity with which the securities are liquidated, on the general course of the war, and on many other unpredictable factors. Of course, the figures of nominal value are of even more limited significance. (Million Founds) Government Other Total 219 481 3 75 503 1 14 146 Railways In British Empire Canada Nominal Market Australia Nominal Market (410) New Zealand Nominal 131 India Nominal Market 187 75 (70) 425 (125) 300 1 250 550 British Afri a Nominal 188 1 250 438 Malaya Nominal 6 78 84 Other Nominal Total in British Nominal Empire (250) 31 1,125 191 886 2233 38 -2(Million Pounds) Government Railways Other Total In Latin America Argentina Nominal Market Brazil Nominal Market Chile Nominal Uruguay Nominal Market Mexico Nominal Market Peru Nominal Market 45 263 (32) (52) 75 38 Venezuela Nominal Market Nominal Market 390 47 160 (14) (5) (22) 20 20 (5) 65 105 18 14 10 42 (21) (8) (1) (12) 38 90 44 173 23 26 (1) 6 (1) 1, (2) 2 (2) Nil 25 ( i) 3 0.2 (4) (2) ( 5) 18 20 (17) (17) Colombia, Ecuador Bolivia, Paraguay, Central America Nominal International Total in Latin America 28 50 Nominal Nominal (41) ( 2) 25 Cuba 83 6 204 451 317 1002 In Asia China Nominal 200 Japan Nominal 50 East Indies Nominal 50 Philippines Total Asia Nominal 8 Netherlands 308 39 -3In Europe Nominal In Other Areas 2/ Nominal 250 75 Total U.K. Investments outside United States - Nominal Value 1/ 2 3868 Not shown separately. Mainly Iran, Egypt, Iraq and Portuguese East Africa. Treasury Department, Division of Monetary Research. January 14, 1941. 40 COPY COMPARISON OF BRITISH TAX RATES UNDER THE 1938 AND PRESENT FINANCE ACTS 1. Personal income tax rates and exemptions (a) Exemptions Present 1938 Single person L 100 L 100 Married person 180 170 60 50 Each child (b) Earned income credit 16-2/3% 20% (Maximum (c) Normal or standard rates (Maximum to 300) to 250) 8-1/3% 25% On first L 135, 1938 Act and first b 165, present Act On balance 25% 423% First bracket L 2,000 to L 2,500 52% 10% Maximum 4138 475% (d) Surtax rates (On over To 50,000) (On over to 20,000 (e) Amount of normal and surtax for married couple, three children Tax : : : 2,000 4,000 10,000 20,000 100,000 343 579 1,065 4,062 9,975 63,875 1,698 5,985 14,548 86,548 2. Corporation income tax rates 1938 25% Percent Increase 1 to to Present : Act : 1938 : : Income Present 423% 68.8% 59.4 47.3 45.8 35.5 41 -2- 3. Excess profits tax No excess profits tax was in effect under the Finance Act of 1938. There was, however, a National Defense Contribution equal to 5 percent of profits in the case of corporations and 4 percent in the case of individuals and partnerships. The Finance (No. 2) Act of 1939 enacted an excess profits tax at the rate of 60 percent. This has been increased to 100 percent of profits in excess of base period earnings for certain years 1935-1937. 4. Purchase tax Under the Finance (No. 2) Act of August 22, 1940 the British imposed a purchase tax of 33-1/3 percent on the wholesale value of certain luxuries and 16-2/3 percent on certain goods in common use, exempting food. 5. Excise taxes : : : Spirits, domestic, per Imperial proof gallon 1938 : Present 13,12s, 6d 14,178,6d Beer, domestic, per bbl. of 36 Imperial gallons L1, 48 Cigarettes, per thousand weighing 3 lbs. L1, 8s, 6d Tea, Empire, per 1b. Coffee, per cwt. L4, la 12, 18s, 6d : Percent : Increase 34.5% 237.5 105.3 6d 6d - 14s 14s - 42 Well, gentlemen, there is the story. To understand it fully, we must also remember what is happening to British resources at home. The British, with one-third our population, are spending at a rate of $12,000,000 a day on this war. They are spending sixty percent of their national income for war purposes. Their annual rate of expenditure is between four and five billion pounds - an amount that would be between forty-eight and sixty Million dollars a year if we, with three times their population, were putting forth the same effort. of this colossal expenditure the British are meeting over one and one-fourth billion pounds, or about one-third of their annual burden, out of taxation. The normal income tax rate in Great Britain today is 42.5 percent, compared with about 4-6 percent for us. A married man in England with two children, earning $1,600 a year, pays $65 a year in income tax; a married mm with two children, earning $10,000 a year, pays $3,450 a year to his Government. A standard brand of cigarettes in England costs thirty cents a pack today, all of the increase in price having been due to taxation. A purchase tax of 33-1/3 is added to the atolesale price of all luxury goods, and of 16-2/3 on many other commodities. I could go on, but I think I have made my point. That I wated you to remember is that the British people are not only dodging the bombs and fighting for their existence, but that they are also making a stapendous effort to pay for this war by themselves. 43 British Expenditures since the War (in billions of pounds) Sept. 3, 1939 through Ang. 31, 1940 Sept. 1, 1940 through Dec. 31, 1940 2.61 1.39 Total expenditure since the war Expenditures in 4.00 At the annual rate of approximately L 3.5 June, 1940 October, 1940 December, 1940 4.0 4.5 Budget Estimate 1940-41 (July, 1940) Expenditure Revenue Loans L 3,467 million 1,360 .: 2,107 44 British Government Debt as of November 30, 1940 (in billions of pounds) L 10.62 Gross Debt Funded Debt 8.18 Flosting Debt 2.44 Growth of British Government Debt (in billions of pounds) March 31,1936 . 1937 1938 1939 1940 November 30, 1940 7.80 7.80 8.03 8.16 8.94 10.62 45 Estimated revenues of Great Britain for the fiscal year ending March 31, 1941 1/ # Estimate for 1940-41 2 (millions of dollars 2/) Ordinary Revenue: Inland Revenue $ 1,872 Income tax Surtax 332 344 Estate duties 76 Stamps National Defense Contribution) Excess profits tax Other inland revenue duties 1 280 ) Total inland revenue 4 $ 2,908 Customs and Excise 1,141.6 Customs 765.6 Excise Total customs and excise Motor vehicle duties Total receipts for taxes $ 1,907.2 140 $ 4,955.2 Treasury Department, Division of Tax Research 1 The estimates do not include any revenue from the Purchase Tax. The Inland Revenue figure is based on Excess Profits Tax at 60 percent rate; the rate of Excess Profits Tax-eas raised by the Finance Act of 1940 to 100 percent, but the resulting additional yield will not be received by the Exchequer, except to a very minor degree, until 1941-42. 2 Pound converted at $4.00. Source: Financial Statement (1940-41), Supplementary Financial Statement (1940-41). January 15, 1941 10:49 B.E. H.M.Jr: Hello. Operator: Stimson. Henry L. Stimson: Hello, Henry. H.M.Jr: Harry, I got your request that you wanted to know about a statement. II have no state- ment but this is what signing to say. S: Well, someone else has adidas for me. I didn't know it but I'm very glat to hear what you're going a sayH.M.Jr: Well, I have before - what II call the financial status of the British Government as to their dollar position, and they authorized me at 7:00 last night that I could use it. New I'm stanly reading from that. S: H.M.Jr: You're reading fres that From that. It's actually their position as to their needs for the rest of this year and - S: It's a what-do-ou-call-2 - balance sheet? H.M.Jr: Well, I just call is their financial status S: of the British Engine. H.M.Jr: Yes, as it relates a detr dollar position. S: H.M.Jr: Relating to dollar position. And it shows what their deficit is and that they have resources sufficient to cover those for the balance of With year. But my whole discussion will the fin relation to this and I have nothing prepared other than these sheets of pager withinto relate purely to figures, you S: Yes, I see. Well, - I'm sending as I 46 47 -2start out that I assume - here are the words - my language, I was just finishing my paper. *In what I have to say upon this bill I propose to confine myself as far as possible to the matters which have come under my observation as Secretary of Mar. In respect to the wider aspects of world conditions which the bill is designed to meet, I assume that you gentlemen have been fully advised by the Secretary of State; and in respect to the financial questions of credit, security and international exchange which may be involved in the transactions proposed by the bill - covered by the bill - I assume that you have been advised by the Secretary of the Treasury." You see? H.M.Jr: Well, that's right. S: So I'm not going to go into those questions. I'm going in to show the need of this concentration of authority of the competing various purchasing commissions and in the interests of the United States, and in the E.M.Jr: S: interest of speed particularly. Well, there'll be no conflict because as I say I'm going to keep purely on the financial. Yes, I see. Well, I'm keeping purely on the mechanics of production and procurement. H.M.Jr: O. K. S: All right. H.M.J.: I wish you luck. S: Same to you. When do you go on? H.M.Jr: After Hull, whenever that is. I'm going up S: Yes, I see. He went on at 10:00 didn't he? Yes, but they say he was late getting started. H.M.Jr: there now in about five minutes. 48 -3S: I see. You'll be through probably this morning, won't you? H.M.Jr: S: H.M.Jr: S: I will if they put me on. Yes. Well, they've called for me at 2:00 o'clock. But my own guess is that they'11 not get through with Hull this morning. Oh, you think he's going to take the full morning probably. H.M. Jr: That's my guess, but we'll know. S: I know. They're having it in the Ways and Means Room are they? H.M.Jr: S: H.M.Jr: S: H.M.Jr: S: I don't know, Harry. I think so, yes. I don't know. My secretary has it. Apparently Sol just missed the chance of having a first-rate, full, 3-ring circus. O. K. Well, I'll be seeing you later. All right. H.M.Jr: Thank you. S: Thank you. 49 January 15, 1941 Copy of the questions to be asked the Secretary at the Hearing before the Foreign Affairs Committee this morning on the "Lease-Lend Bill (Aid to Britain). 1. Deer England have money to My American manufacturers for the orders that she has already placed? 2. Deer England have any more orders she wants to place? 3. DEE the French collapse eat down the money that the allies had planned to use for American war orders? 4. Have morth is the war costing England a day? 5. How is England raising this money? 6. Have fines the English tax burden c compare with ours? 7. Has England increased her tax rates to help pay for the war? 8. How dires it happen that the British Empire has so little reality cash left? 9. Supposing England is no longer able to get military sunlies in this country, how long do you think she will be able to continue fighting? Treasury Department Division of Monetary Research Date 1-15-41 50 19 Mrs. Dotz To: The Secretary and I have a wager (a bottle of Argentine wine as to the number of questions that appear in the appended document that he will be asked during the course of the bearings in both the House and the Senate. I stated that be would be asked at least 50 of the enclosed, and he is betting me that he will not. MR. WHITE Branch 2058 - Room 210 51 PROBABLE - THE - MISSING -----A. thatELLO are the foreign - again of Great I TOTAL READ she have 1. New does such cash does England have - - - - 2. Does Supiret that include the each - gold of - British 3. New - gold dees the British Repire protest yeart Meat that happens to all the British gold - a 4. New can's much cash and- gold have Britain's Alliest England borrow of 100 5. Ism's and can't - England of the - 100 gold is British territory 6. Deem goldi England have other assets bosides 1 - 7. New ties andabout plantsBritish in this holdings constayt of United States 8. United that about States Committee securities and other Register - of 9. that is the value of British foreign I Bestern outside the United States and particularly is 10. Bee such used each,- gold and other foreign assets Inc England alreadys 11. Dees about have myeta., other valuable accepted hasRegions Mr. meal, Mat about is the Bestore 52 B. that is the probable sagnitude of the aid to Britain and other countries to Bay Under we 1. New such is Britain currently buying is this country 2. How much of this is she is a position to pay for free her own resources? 3. Have you any idea have week England will want to buy is the United States on credit during the next yeart 4. IeofBritain unable to place any orders because lack ofnow fundst 5. Under the Lend-Lease Bill, will England pay for nonarmanent purchases herselft Is England able to pay for all her purchases other than arranenta? 6. Do you intend to land England the money to buy fare supplases as well as arranental 7. Are lease going to be made only to England OF to the Deminions and Allies as well? 8. my can't Canada produce more of England's needer why docen't England borrow sere free Genada se that also will have to berrow less fres ust 9. Now does England pay for her purchases from Canadat 10. Are Canadian purchases is this country going to be handled in the same way as British purchases? c. that is the likelihood of our being paid best and how an 18 be domet 1. Have the British proposed any arthod of repayments 2. Do you anticipate that they will pay us back in the - kinds of goods that we lead that 3. New do you propose that they will pay back the garden hom that they have used - the shells that are exploies, the planes that are wreaked, and the - that are were cust 53 -34. After all, Mr. Secretary, ism't this going to be an outright gift? thy not give 11 to them 5. will we vast repayment is kind after the var considering se Digi that our our areanent industry will be 6. If England pays us back is goods, what is the United States Government going to do with the goods? (a) will any of those goods be competitive with our own output (b) How will England be able to buy the things she will need after the war if she gives us the important part of her exports? 7. will the goods they pay us back in have to pay import dutiest who will pay the isport duties? s. If England can pay as is goods which we vast, why can't she sell as the goods we want and pay in seneyt 9. APC these lease going to bear any interest 10. Bee easy years are they going to be given to pay 11 beakt 11. Supposing England loses, what chance have we then of being paid back? 12. If England is se exhausted at the end of the var that she totalcannot loss? pay. are we going to wipe 11 off as a 13. why do you think England is & good credit risk if she been't paid back her last war deber 14. Box such does England owe us free the last wart 15. New such didvart Engined over pay as on what she berroved is the last 16. Supposing England goes socialist, what accurance do you have that they will pay back any of these debts? ... - --I-and for is - . hand - to 3. --- --- CART x - - I - - - I of Seats future - - - - into somer -the land .- asorthe=L.11. for -. --- -- invoice as - - be added a -HItems - - - -towill - a - Million - - --- --- --Interest reason . 6 - - 12 - - - - 3 - - - you State as - is eming the s -- William - - last- your stand a has pass - - - would stand - - about 875 Million & --- expects -If-- Iwith - ismother - to Million a . or $35 Million - Issue defense, - - - inflation .------- a -- - - - - - - relating - to - VAL 54 53 -511. Do you propose to change your tax program if this bill goes through se as to get more taxes 12. What taxes would you recomend be increased 13. How such of our Plant Expansion has England financed? 14. Since we arehaving difficulties filling our our orders for planes, tanks, etc., how are we going to fill additional British orders for the same things? 15. that would happen to the Security Market if England tried to unload all her U. S. securities instead of purchasing on credits extended by the U. S. Government 16. Could England get a fair price for her investments here at a forced sale! 17. Couldn't the R. F. C. take these securities over and held then for ambile! 13. Fouldn't 18 be better to have England leave her securities and investments as collateral against a leas than to try to sell them a 19. Are you going to require the British to put up all their U. S. securities or securities is other countries as collateral for the less? 20. Are you going to take a a on her future production of rebber, tim, gold and other raw materials? 21. Bouldn't 11 be better for this country to take securities and investments which the British have rather than gold) 22. Is there say reason why we shouldn't take over her Argentine securities? 23. New many securities have the British sold already 24. Yes's we really be financing England's wart 25. You't American soldiers fellew American dollars! 26. will this bill be is keeping with the spirit of the Johnson Act? 56 .-27. If this leas is - in ktad, - lease, will - still keep - of 28 in - of - If you so, Mr. Secretary, - 4 you propose to fulles the President's Instructions to gut she of the silly dollar signt 26. Ism't this the beginning of barter trader 29. why not use the Fabilianties Pend to copyly many for British E. Are the British doing all the DEE to 247 for their needs without borroving from 1. New such is the limited Kangés meaning is the present - 2. How much have Signature and the other Demisions spent in this - 3. New does 18 compare with what Britaia and beer Demisions spent is the last - 4. New much of Register's actional 1 is being - on the - New - w - will be dating - most fiscal year! 5. If the British are really surious about want their our reserves to - this - - do they not sell us their System Benisphare - 6. Is England lawrencing her - transition to pay for the was 7. New does the Bythick tax burden compare with a. What is Register buiges definess for the present fiscal years 9. What is the Beitish - letter - have - - 18 increased during the 10. Does Regions have inflation - 11. will our aid to Segiant would infisities is Deginnal 12. Are all the lessee Destates white thats I and foreign - - emiliable for the efforts 57 -?13. APP britain's other Allies using their assets? 14. Love about the dellars which English individuals and businesses have in this country why can't they be wec 15. Is inclant going to sell all her American securities before the lend-lease plan goes into operation? 16. Is site gaing to sell all her breach plants in the 5. 5. before the land-lease plan goes into operation? 17. any street they sold their securities and branch plants are readily? that steps are being taken to sake sure that the bill will x efficiently and with a alaimus cost to the laited States 1. is there any financial reason why the powers granted under the lead-lease bill should not be limited to 2 years 2. Is there any financial reason way a limit should not be set or the amount of credit extended under the lend I bill? 3. If Inclame is going to be permitted to buy non-mar goods, as well as armanents, what limit is going to be set - such non-war purchases 4. s will determine the priority of American and English seeta' 5. 1111 all the British Empire be able to buy whatever roots they want under this bill? 6. Est steps are being taken to make sure that prices are kept reasonable! 7. If - are willing to lend goods and money to England, will they extimus to expert to us all the goods they - or will they use their experts for damping in other countries in competition with American experts! a. APO - going to fisease England's purchases in Latin America as well as is the United States? 9. Mat assurance is there that England will get all she eas free her our Empirel Direct 58 January 15, 1941 The material contained in this mimeographed attachment was the only prepared material the Secretary had when he appeared before House Foreign Affairs Committee to testify on H.R. 1776 (LendLease Bill). He had typewritten copies of pages 1 and 2 with him but left them with the Chairman. 59 Estimated Dollar Expenditures and Receipts of British Empire, Excluiting Ornaña, from January 1, 1941 to January 1, 192. (In Killions of U. S. Dollars) Dollar Expenditures A. U. I. payments to be made on total purchases from the I. S. 1. Summ the be paid during 1941 on orders placed before Jan. 1, 1941. (In addition, $119 million will fall flue after Jan. 1, 1942) 2. Imports from U. S. not purchased through the British Purchasing Commission, largely III. private accounts. 3. Purchases by Empire countries (excluding U.K. and Camada) from U. S. during 1941 1. Creamility imports. 2. Payments for shipping, tourist expenditure, interest payments, etc. $1,274 250 $1,554 333 5 338 C. Purchases ity Empire Countries, excluding Canada, from areas outside the U.S. requir- ing grilli III dollars 1. Purchases by Empire countries (chiefly U.S.) from areas outside the U.S. and Canada requiring dollars. 2. Payments by Empire Countries (chiefly T.E. to Canada and Newfoundland) 247 850 1,127 $3,019 Total dollar requirements for all transactions. Dollar Receipts A. Dollar receipts by U.K. from U.S. $ 165 1. I.E. exports of merchandise to U.S. 2. Net ballambe from U. S. to U.K. cm shipping, tourist expenditures, 15 interest payments, etc. 3. Dollar receipts by Empire countries (excluding Canada) 560 1. Committy exports 75 2. Australian gold exports to U.S. 480 3. South African exports of gold C. Canadian ansistance to U.I. Total dollar receipts by Empire countries, excluding Canada Total dollar deficit with countries other than Canada during 1941. Total dellar deficit with Canada during 1941 Total dollar deficit of British Empire, excluding Ganada, during 1941. Total receipts and deficit on operations with all countries other than Canada during ngt. $ 180 1,115 250 $1,555 844 620 1,464 $3,019 60 CONFIDENTIAL UNITED KINGDOM'S AVAILABLE DOLLAR EXCHANGE ASSETS OE JANUARY 1, 1941 (In Millions) $ 205 Gold in U. S. or en route Official dollar balances 54 American securities - reported by British 616 as of January 6 Total liquid assets Direct and other investments Total dollar exchange assets 875 about 900 $ 1,775 The British Government has $33 million of gold scattered in various parts of the world. Most of this gold, however, is in areas from which it cannot be shipped quickly or safely to the United States. British banks, private persons and corporations have balances in the United States of $305 million. The British Government feels that these balances are at the minimum level necessary for the continued conduct of business and are therefore not available for use by the British Government. Treasury Department, Division of Monetary Research. January 14, 1941. 61 Estimated Long-Term Foreign Investments of the United Kingdom Outside the United States The following estimates are based on a number of studies, most of which were made by British economists before the outbreak of var. Most of the investments are in sterling securities; a large part of the Canadian investment is in Camedian dollars, and some of the other investments are is the respective domestic currencies. However, for convenience of presentation, the estimated nominal value of the investments has been converted into sterling. The market values, where given, are calculated from current market quotations of the securities. Since market quotations are not available for a large part of the investment, no total market value can be calculated. Erem where estimates of market value have been made, they have only a limited significance, for the future market or collateral value will depend co the rapidity with which the securities are liquidated, on the general course of the war, and on many other unpredictable factors. Of course, the figures of nominal value are of even more limited significance. (Million Pounds) Government Hailways Other Total In British Empire Canada Nominal Market Australia Nominal Market (410) New Zealand Nominal 131 India REPART Nominal British Africa Nominal Malaya Nominal Other Nominal Total in British Nominal Empire 75 167 219 481 3 75 503 (70) 425 : 1 14 146 300 1 250 550 168 1 250 438 75 84 (125) (250) 6 31 1,125 191 356 2233 62 -2(Million Pounds) Government Railways Other Total In Latin America Argentina Nominal Market Brazil Nominal Market (14) (5) (22) Chile Nominal 20 20 ( 2) 65 ( 5) 105 Bruguay Nominal Market 18 14 10 42 (21) Mexico Nominal Market Pera Nominal Market Cuba Nominal Market Venezuela Nominal Market 263 45 (32) (52) 75 38 83 390 47 160 ( 8) (1) (12) 38 90 44 173 23 28 ( 4) ( 5) ( 2) 28 18 20 (17) (17) ( 1) 6 ( 1) 1 (2) 25 2 25 (2) ( 1) N11 3 0.2 Colombia, Ecuador Bolivia, Paraguay, Central America Nominal International Nominal Total in Latin America Nominal (41) 50 6 204 451 317 1002 In Asia China Nominal 200 Japan Nominal 50 East Indies Nominal 50 Philippines Total Asia Nominal 8 Metherlands 308 63 -3Nominal 250 In Other Areas 2/ Nominal 75 In Europe Total U.K. Investments outside United States - Nominal Value 3868 1/ Not shown separately. 2 Mainly Iran, Egypt, Iraq and Portuguese East Africa. Treasury Department, Division of Monetary Research. January 14, 1941. Sew Mergenthan's testinon 64 ABD LOAN LEASE HEARING SECRETARY MORGENTHAN SUMMITTED A STATEMENT OF ESTIMATED DOLLAR DIPOSITURES AND RECEIPTS OF THE BRITISH EMPIRE IN 1941 INDICATING IT WOULD BE SHORT BY $1,464,000,000 OF THE AMOUNT NEEDED DURING THE YEAR. 1/15--25351P ADD LOAN LEASE HEARING AS HORGENTHAN TOOK THE STATE HIS AIDES GAVE OUT a STATEMENT SHOWING THE ESTIMATED DOLLAR - RECEIPTS OF THE BRITISH EMPIRE, EXCLUSIVE OF CANADA, WHICH INDICATED TEAT $3,019,000,000 WOULD BE KDD TO PAY FOR ORDERS IN THIS COUNTRY DURING THE CALENDAR YEAR, OF WHICH $1,464,000,000 WAS LISTED AS THE *TOTAL DOLLAR DEFICIT OF THE BRITISH DMPIRE, EXCLUDING CANADA, DURING 1941.° THIS WAS FOLLOWED BY A STATEMENT MARKED *CONFIDENTIAL WHICH SHOWED TEAT THE UNITED KINGDOM'S AVAILABLE DOLLAR EXCHANCE ASSETS ON JAN. 1, 1941, AMOUNTED TO $1,775,000,000. THE ASSETS WERE BROKEN DOWN AS FOLLOWS: *COLD IN THE U. s. or EN BOSTE--$205,000,000. OFFICIAL DOLLAR BALANCES--$54,000,000. "MERICAN SECURITIES--RIPORTED - URITISE as OF JAN. 6--8616,000,000. *(TOTAL LIQUID ASSETS $875,000,000.) - *DIRECT - OTHER INVESTMENTS. ABOUT --8900,000,000. TOTAL DOLLAR EXCHANGE ASSETS--31,775,000,000. 65 ADD LOAN LOCASE HEARING A THIRD STATEMENT SUMMITTED BY BORGENTHAU LISTED ESTIMATED LONGTERM FOREIGN INVESTMENTS OF THE UNITED KINGDOM OUTSIDE THE UNITED STATES AT 3,868,000,000 POUNDS STERLING. 1/15--25405P 20-0 IDD LOAN LEASE HEARING IN RESPONSE TO A QUESTION WHETHER BRITAIN was IN A POSITION TO PAY FOR ITS PERCHASES, HORGENTHAN SAID: *THIS FINANCIAL PICTURE WHICH I'VE GIVEN YOU I'M SATISFIED WILL PAY THIS YEAR FOR WHAT ALREADY EAS BEEN BOUGHT. WHEN IT COMES TO FINDING THE DOLLARS TO PAY FOR ANYTHING LIKE WEAT THEY MAY NEED, THEY JUST HAVEN'T GOT IT." 1/15--ES412P ADD LOAN LEASE KEARING. IN THE *CONFIDENTIAL STATEMENT OF THE UNITED KINGDOM'S AVAILABLE DOLLAR EXCHANGE ASSETS on JAN. 1, 1941, IT WAS STATED: *THE BRITISH GOVERNMENT HAS $33 MILLION or COLD SCATTERED IN VARIOUS PARTS OF THE WORLD. NOST OF THIS COLD, RECEIVER, IS IN ARIAS FROM WHICH IT CANNOT BE SHIPPED QUICKLY OR SAFELY TO THE UNITED STATES. *MITISH BANKS, PRIVATE PERSONS AND CORPORATIONS HAVE BALANCES IN THE UNITED STATES OF $305,000,000. THE BRITISH GOVERNMENT FEELS THAT THESE BALANCES ARE AT THE MININUM LEVEL NECESSARY FOR THE CONTINUED CONDOCT OF BUSINESS AND ARE THEREFORE NOT AVAILABLE FOR USE BY THE BRITISH GOVERNMENT." A NOTATION REVEALED THAT THE FIGURES WERE FROM THE TREASURY'S DIVISION OF MONETARY RESEARCH. 1/15--80422P C45TE198 66 ADD LOAN LEASE HEARING. IN SUBMITTING THE LIST OF BRITISH ASSETS IN OTHER NATIONS, INCLUDING SOUTH AMERICA, MORGENTHAN EXPEASIZED THAT THEY WERE IN STERLING, NOT DOLLAR BALANCE, AND THAT THEIR LIQUID VALUE WOULD DEPEND UPON WORLD CONDITIONS AT THE TIME THEY WERE CONVERTED TO DOLLARS, AND THE RATE AT WHICH THEY WERE SOLD. NE WAS ASKED IF THE FRENCH HAD ARMS COMMITMENTS HERE THAT THE MITISH COULD TAKE OVER. MORGENTHAN ANSWERED THAT LAST JULY 1, SHORTLY AFTER FRANCE FELL, THE BRITISH TOOK OVER THE EXISTING FRENCH CONTRACTS. *I NIGHT POINT OUT," HE SAID, "TEAT AT THAT TIME FRANCE HAD DOLLAR BALANCES HERE THAT WERE ABOUT TWICE WHAT THE ENGLISH HAD.' HI TOLD REP. HAMILTON FISH THAT THE BRITISH HAD PAID OUT AND TAKEN DELIVERY BY JAN. 1 OF MATERIAL. FISH WANTED TO KNOW HOW HUCK DOLLAR BALANCES - SECURITIES INCLUDING COLD THE BRITISH NIGHT HAVE IN LONDON OR OTHER PARTS or ENCLAND, THAT NIGHT BE "TRANSFERRED HERE FOR CREDIT." "I HAVE LISTED HERE EVERYTHING THAT THE UNITED KINGDOM HAS," MORCENTHAN SAID. *I AM ADVISED BY A STATEMENT OF THE FEDERAL RESERVE BOARD THAT BRITAIN HAS HERE SOMETHING OVER $7,000,000,000," FISH SAID. NE REFERRED TO THE LAST REPORT OF THE BOARD. HORGENTHAU ANSWERED THAT THIS INCLUDED CENTRAL GOLD RESERVES OF THE DOMINIONS AMOUNTING TO $2,735,000,000, ALSO DOLLAR BALANCES OF THE DOMINIONS AMOUNTING TO SEVERAL BILLION. *THESE FIGURES, as FAR AS I KNOW, ARE NOT IN COMFLICT," HK SAID, POINTING OUT THAT THE RESERVE BOARD FIGURES WERE BASED on INFORMATION AVAILABLE LAST AUGUST BEFORE THE *EATTLE OF BRITAIN BEGAN. "I HAVE NO REASON TO BELIEVE THAT THESE FIGURES I HAVE GIVEN YOU ARE NOT ACCURATE," MIRCENTHAN SAID. 1/15--50643P CASTER 67 ADD LOAN LEASE HEARING. FISH ASKED MORGENTHAU UNETHER THE BILL WOULD GIVE THE PRESIDENT POWER TO SEIZE FOREIGN SHIPS IN OUR PORTS AND GIVE THEM TO ANOTHER COUNTRY. "NO," SAID MORGENTHAU. FISH ASKED WHETHER IT CONFERRED POWER TO ORDER THE CONVOY OF SHIPS. "NY INTERPRETATION IS THAT IT DOESN'T GIVE WIN ANY POWER HE DOESN'T HAVE," MORGENTHAU REPLIED. *DOES IT AUTHORIZE NIM TO GIVE AWAY ANY PART OF THE NAVY?* IN REPLY MORGENTHAU READ FISH THE LANGUAGE OF THE BILL AUTHORIZING THE SALE, LOAN, OR "TRANSFER" OF DEFENSE ARTICLES. HE ALSO READ THE SECTION WHICH DESCRIBES THE TERMS AND CONDITIONS FOR SUCH ACTION, REQUIRING A DIRECT OR INDIRECT BENEFIT TO THE UNITED STATES. "I WOULD NOT SAY NK COULD GIVE THEM AWAY," MORGENTHAU SAID. "DOES THIS BILL CANCEL THE JOHNSON ACTT® FISH ASKED. *IN THE TREASURY," SAID MORGENTHAU, *VE FEEL IT DOES NOT. "DOES IT CANCEL THE NEUTRALITY ACTI *IT DOES ALTER IT, YES, AS FAR AS THE CREDIT PROVISIONS ARE CONCERNED." WHEN FISH REFERRED TO THE AUTHORITY TO REFIT AND OUTFIT BELLIGERENT SHIPS, MORGENTHAU SAID THERE WAS *MOTHING IN THE NEUTRALITY ACT IN REGARD TO REFITTING A SHIP so I DON'T SEE THAT THIS CHANGES THAT." "WOULD YOU OBJECT TO THE PLACING IN THE BILL OF A CEILING AS TO THE AMOUNT--SAY $2,000,000.* FISH ASKED. "I THINK THAT IS A MATTER FOR THE COMMITTEE TO DECIDE," MORCENTHAU SAID. *I THINK THE SITUATION CHANGES so RAPIBLY THAT NOBODY I'VE COME IN CONTACT WITH CAN SAY WEAT THE CEILING SHOULD BE, NOT ONLY AS TO OUR OWN DEFENSE BUT AS TO OTHER COUNTRIES." 68 *DON'T YOU REALIZE," ASKED FISH, "THAT IT DOES NOT PUT ANY LIMIT ON PUTTING INTO THE NAMBS OF ONE MAN POWER TO SPEND INITIMITED FIRISS SEMIBODY WILL HAVE TO APPEAR BEFORE THE APPROPRIATIONS COMMITTEE, MORGENTHAU REPLIER. - FIGURE IS KENTINED IN THE BILL BECAUSE IT DOES NOT CARRY AM APPROPRIATION. 1/15--#6457P CASTER ADD LOAN LEASE HEARING. REP. CHARLES EATON ASKED MORCENTHAN TO CITE THE "COMPELLING REASONS FOR THIS PARTICULAR BILL AT THIS PARTICULAR TIME." MORGENTHAU CITED THE BRITISH FINANCIAL POSITION. *THEY NEED VAST ARMAMENT IN THIS COUNTRY," NE SAID. *THIS IS THE ONLY PLACE THEY CAN GET THEM. THEY HAVEN'T GOT THE DOLLAR EXCHANGE TO PAY FOR THEN." HE SAID THE MITISH, GIVEN TO THE IND OF THE YEAR, WOULD BE IN A POSITION TO PAY FOR ALL ORDERS THEY HAVE PLACED. "WE'VE BEEN NEARING A GREAT NURRAN ABOUT GIVING THINGS TO BRITAIN," EATON SAID, DAND UP TO NOW WE'VE BEEN MAKING HER PAY THROUGH THE MOSE, HAVEN'T VE. MORCENTHAU SAID THE ENGLISH HAD BEEN FORCED TO PAY CASH FOR EVERYTHING. "so, IF BRITAIN IS OUR FIRST LINE OF DEFENSE, WE HAVEN'T COVERED OURSELVES WITH ANY PARTICULAR CLORY," EATON SAID. "I AGREE WITH YOU," THE SECRETARY REPLID. TINKHAM ASKED WHY BRITAIN SHOULDN'T SELL SOME OF ITS LISTED SECURITIES. MORGENTHAN REPLIED NK WAS NOT ATTEMPTING AND NAD NO AUTHORITY TO SAY "WEAT BRITAIN SHOULD OR SHOULD NOT DO BUT ONLY WAS GIVING THE COMMITTEE THE FINANCIAL PICTURE OF THE BRITISH EMPIRE. CASTER 1/15--00505P 69 ADD LOAN LEASE HEARING. TINKHAM ASKED IF MORGENTHAU WOULD AGREE TO AMENDMENTS REQUIRING THE BRITISM TO PUT UP GOLD "TO SECURE THE AMERICAN TAXPAYER. "I AM VERY SORRY TO SAY I HAVEN'T THE SAME CONFIDENCE IN THE PRESIDENT YOU HAVE," TINKHAM SAID. *IF YOU WILL PARDON NY SAYING so," MORCENTRAS SAID, "YOU ARE PROBABLY IN THE NIMORITY." REP. ROBER B. CHIPERFIELD WANTED TO KNOW THE FULL EXTENT OF FINANCIAL COMMITMENT INVOLVED IN THE BILL. MORGENTHAU SAID NE WAS NOT PREPARED TO SAY NOW HUCH MONEY WOULD BE REQUIRED TO CARRY OUT THE POLICY INVOLVED IN THE BILL. REP. JOHN M. VORYS TOLD MORGENTHAU NE WAS *FRANKLY AMAZEB* AT THE SMALLNESS OF BRITISH RESOURCES. MORGENTHAU SAID NE HAD INCLUDED IN HIS FIGURES "EVERYTHING THE BRITISH GOVERNMENT CAN LAY ITS HANDS ON TO PAY FOR VAR SUPPLIES. MORGENTHAU ADMITTED THAT THE BILL WOULD MODIFY THX DEBI LIMIT *TO THE EXTENT THAT THE PRESIDENT WILL HAVE TO BORROW FOR OUR OUN DEFENSE AND TO CARRY OUT THE BILL. NE EXPLAINED HOWEVER THAT *IF YOU PASS THIS BILL AS IT IS WRITTEN THE DEBT LIMIT WILL STAY JUST WHERE IT IS. 1/15--V0523P CASTER REP. JOHN M. VORYS, AFTER HEARING SECRETARY MORGENTHAU PRESENT A PICTURE OF GREAT BRITAIN'S IMABILITY TO PAY FOR FURTHER PURCHASES HERE, DUBBED THE ARMS MEASURE THE *LED-LOSE BILL. HE SAID HIS 12-YEAR-OLD see HAD COINED THE PHRASE. /15--W0524P 70 ABD LOAN-LEASE HEARING. IN RESPONSE TO QUESTIONS BY MUNDT, THE SECRETARY SAID "THERE IS VIRTUALLY NO COLD LEFT IN ENGLAND EXCEPT AS IT BELOWES TO OTHER COUNTRIES." HE SAID WHATEVER WAS LEFT WAS "INCLUDED IN TWO ITEMS $205,000,000 COLD IN THE U. s. on EMBOUTE, AND $33,000,000 GOLD SCATTERED IN VARIOUS PARTS or THE WORLD." .I DON'T BLANE YOU FOR ASKING THE QUESTION," MARGENTHAU SAID. *THE FIGURE IS ALWOST INSELIEVABLY LOV. HUNDT ASKED IF A *CEILING* OR LIMIT TO THE AUTHORIZATION SHOULD BE WRITTEN INTO THE BILL. HORGENTHAU SAID NE HAD LEARNED *NOT TO ATTEMPT TO ADVISE A LEGISLATOR ABOUT HIS BUSINESS," AND THAT WAS FOR CONGRESS TO DETERMINE. ASKED BY REP. BARTEL J. JOHNSH NETHER THE BILL CARRIER THE IMPLIED POWER TO DELIVER DEFENSE ARTICLES IN AMERICAN SHIPS, MORGENTHAU SAID: "NY COUNSEL SAYS m. JONKMAN ASKED MIN WHETHER THERE WAS NOT IMPLIED POWER TO "SELL, EXCHANGE OR TRANSFER ANYTHING PRODUCED WITH THE $17,000,000,000 ALREADY APPROPRIATED FOR NATIONAL DEFENSE. AFTER CONSULTATION WITH HIS AIDES MORGENTHAU REPLIED: IN THE TREASURY DEPARTMENT'S OPINION THE ANSWER IS YES. INCLUDING WARSHIPST ASKED JOHKMAN. THAT'S OUR OPINION,* HORGENTHAU SAID. *OTHER DEPARTMENTS MAY DIFFER WITH US. FISH ASKED IF THE STABILIZATION FUND HAD BEEN USED TO EXTEND CREDITS TO BELLIGERENTS. IT HAS NOT BEEN USED, NORGENTHAU SAID, WITH THE EXCEPTION OF LOANS TO ARGENTINA AND CHIMA. THESE LOANS WERE NEGOTIATED ONLY AFTER THE MATTER WAS TAKEN UP WITH THE HOUSE AND SENATE BANKING AND CURRENCY COMMITTEES AND *THEY GAVE US A VOTE OF CONFIDENCE. 71 FISH ANNOUNCED THAT THE FOLLOWING PERSONS HAVE ACCEPTED HIS INVITATION TO TESTIFY JAN. 21 AND 22: WENDELL WILLKIE, JOSEPH KENNEDY, MANFORD MACHIBER, NORMAN THOMAS, WILLIAM J. GRACE, CHAIRMAN, CITIZENS KEEP AMERICA OUT OF WAR COMMITTEE, CHICAGO; GERALD L. K. SMITH, NATIONAL CHAIRMAN OF THE COMMITTEE OF ONE MILLION, DETROIT; VERNE MARSHALL, CHAIRMAN OF THE NO FOREIGN WARS COMMITTEE; AND HUGH S. JOHNSON. 1/15--V0602P CASTER ADD LOAN-LEASE NEARING. IN RESPONSE TO A QUESTION FROM BLOON, MORGENTHAU SAID THE WAR IS COSTING BRITAIN 12 MILLION POUNDS A DAY, or WHICH ABOUT FIVE MILLION, OR ABOUT 40 PER CENT, IS RAISED THROUGH TAXES AND THE REMAINDER BY BORROWING. WHEN BLOOM ASKED FOR A COMPARISON OF BRITISH AND AMERICAN TAXES, MORGENTHAU SAID "THIS IS GOING TO BE A SHOCK TO SOME or YOU. NE READ OFF A COMPARATIVE LIST OF FIGURES SHOWING THAT IN ENGLAND A MAN WITH A $5,000 INCOME WOULD PAY $1,496 IN TAXES COMPARED TO $75 IN THE UNITED STATES, AND so ON UP TO THE MAN WITH A $100,000 INCOME WHO IN ENGLAND WOULD PAY $76,000 AND IN THE U. S. $43,000. 1/15--V0605P CASTER 72 COMMENT ON SECRETARY MORGENTHAU WJSV 6:00 January 15, 1941. Bob Trout: Secretary's financial statement was that Great Britain has not nearly enough dollars to pay for anything like they might need. Great Britain will be nearly & billion and one half short of that amount. Edwin C. Hill: No comment in regard to Secretary Morzenthau. All comment was in regard to Secretary Hull's speech. 10:30 News Secretary Morgenthau's testimony on Britain's financial set-up disclosed the following findings: That Britain will be able to pay cash for three billion dollars' worth of war material ordered BUT when it comes to finding the dollars for anything like what they may need, they just haven't got it. Morgenthau's statement also above that the United States is the only country where Britain can get enough war material to continue fighting. Great Britain faces a financial dilemsa which only President Roosevelt's lend bill can prevent. -00000- 73 COMMENT ON SECRETARY MORGENTHAU WJSV 6:00 January 15, 1941. Bob Trout: Secretary's financial statement was that Great Britain has not nearly enough dollars to pay for anything like they might need. Great Britain will be nearly a billion and one half short of that amount. Edwin C. Hill: No comment in regard to Secretary Morgenthau. All comment was in regard to Secretary Hull's speech. 10:30 News Secretary Morgenthan's testimony on Britain's financial set-up disclosed the following findings: That Britain will be able to pay cash for three billion dollars' worth of war material ordered BUT when it comes to finding the dollars for anything like what they may need, they just haven't got it. Morgenthau's statement also shows that the United States is the only country where Britain can get enough war material to continue fighting. Great Britisa faces a financial dileans which only President Roosevelt's lend bill can prevent. -00000- 74 Paul Sullivan, 6:30 P.N., KJST Secretary Morgenthan, too, is in favor of passage of the bill to aid Britain. Ca the basis of the financial statement be submitted, be said that Britain would pay for everything bought, but that she does not have enough dellars. She simply does not have enough for big-scale purchases. Secretary Morgenthau said Great Britain already had paid out $1,337,000,000 for United States supplies. She is paying out or will pay out. be said, another sum of $1,393,000,000. He also said that Great Britain has in the United States gold balances, securities and investments amounting to $1,775,000,000, also that the United States is is favor of helping Great Britain. John Kennedy, EVAL, 9:30 P.M. Secretary Morgenthan reported today that Great Britain is about broke, and are going to do the same as the people in the book of Oliver Twist, ask for more. At least 50 percent of their War Debt is paid but France and Germany passed the debt up entirely. WJST, 8:55 P.M. Secretary Morgentham stated today that he was satisfied that Britain could pay for the planes and supplies she already has ordered, but that when it comes to paying with dollars, Britain does not have them. He submitted a balance sheet of British assets. 75 January 15, 1941 Falton Lewis, Jr., WOL. 7:00 P.M. There was no nalice in what Mr. Hull said today in support of the President's program. He made it rather clear that he considers that circumstances and events make it necessary to go into a program of this kind at this time, a program which involves a revolutionary departure from American tradition of the past. But Mr. Hull said today that the situation is unlike any we have ever faced in the past; therefore, it requires more drastic action than we have ever taken in the past. Be said the only reason Germany has been unable to cross the English Channel and invade the islands is because those waters are still under control of the British Navy and that we must have complete cont : of the high seas at all times. According to Mr. Hull, if we lose control, Germany may be able to make a direct attack on the Western Hemisphere. For a Secretary of State, Mr. Hull used some very blunt and simple language today. He left the soft gloves of diplomatic language in his Besk at the State Department today. He read his six and one-half page statement and naturally it had been carefully edited in advance and been approved by the White House. He went into the historical background of the present war and he named names--he called Germany, Germany, Italy, Italy and Japan, Japan. He said this Government has tried, on numerous occasions, to convince Japan that the only wise course for it to follow was the course of fair treatment with equal rights to all nations invelved. Be said Japan had, time after time, disregarded the rights of the United States and other Governments in the Far East, and the official Japanese Government had openly declared its intention was the exclusive domination of the Far East. The next step he said was Italy's seizure of Ethiopia and Albania. He said the Kitler Government had steadily followed a course of making promises and breaking them. He said her course was to make even greater demands the moment earlier demands have been met. Ee said there is no hope of a peace understanding because there is no hope of a guarantee or way of getting one, that the Axis powers will live up to the agreement they make. He said that this legislation to aid Britain is absolutely neces- sary: he knows of no other legislation that will accomplish these ob- jectives and he considered this bill to be necessary itself. Mrs. Edith Sourse Rogers asked Hull if he objected to the committee calling in former A bassadore Wilson, Bullitt and Kennedy. He said the decision is is their hands, if they wish to testify, and the only restriction would be that they could not divulge diplomatic, confidential informtion. Otherwise they could say what they wanted to say. There has been a rather peculiar situation developing in the Foreign Affairs Committee. It seems that the Ranking Republican on that committee is Representative Hamilton Fish, of New York. He has given out a list of witnesses who, he says, will appear before the committee next week, including the names of Mr. Vendell Willkie and various other people. -2 - 76 And Chairman Bloom says it's all news to him. be usual rule of procedure is for the Chairman to decide who the witnesses should be and when called. Mr. Fish has no more power than anybody else on the committee so his witnesses may or may not Secretary Morgenthau remained on the stand until nearly six o'clock tonight. Secretary Hull was, incidentally, all alone when he testified. He eat on the chair in the Ways and Meens TERM and answered all questions himself. Mr. Morgenthau, on the contrary, was flanked with advisers on both sides and every time a question was suited be would whisper to them, get advice, confer with them before answering Mr. Morgenthau said the war is costing Great Britain about $61,000,000 a day. which the British Government is paying $40,000,000 by taxation and borrowing the other $30,000,000. He said the British have sufficient cash available to pay for the war another year to come. smilable DT in prospect, but after that time their cash will be exhausted. Be BRID the British had about $3,000,000,000 in the United States in convertible assets at the opening of the war. that is, securities and assets easily turned into cash. He said they had already spent $1, 300,000,300 in this country on materials already purchased and had had shipped to them, and that they had placed orders for additional materials amounting to about another $1,300,000,000. That makes $2,600,000,000 of the $3 billion already gone and so he said that British funds in this country are just about exhausted. He said taxation in Great Britain at the present time is staggering--that the average man in the street, the average workerthe income tax charged him is approximately ten times the income tax that is charged in this country. Perhaps the most important statement by Mr. Morgent ham today was one of policy. One member observed that Great Britain is still getting tremendous gold reserves out of Africa and the member asked Mr. Morgenthan whether that gold shoul be shipped to the United States in part payment, at least, for the materials we provide in the future. Mr. Morgenthan said he does think so: in fact. he said Great Britain should do everything in her power to make part payment for the materials we supply. In connection with Mr. Hull's statement about maintaining control over the high seas there was one highlight that Eight interest you. An Admiral testified before the committee and saled for money for mosquite craft, ranging from 70 to 120 feet long. built in speedboat design, and depending on speed for defense. Thomas - W.M.A.L., 6:45 p.m., 1/15/41. 77 Secretary of State Hull VSE having an interesting time with the Foreign Affairs Committee today. He said Germany can easily cross the Atlantic if Britain is defeated. He was asked if he considered the aid to Britain bill absolutely necessary to our national defense. He replied that he had been unwillingly compelled to believe that it is. He said that it is not a violation of the Johnson Act. He admitted that that bill is in violation of the Eague Conference but explained it would not apply in the present war. Germany and Italy are not parties to that Convention and Germany and Italy --have paid no attention to such principles of international law. Hull said it is ideal for us to rely on the rules and principles of neutrality for safety but that the German program 18 one of world-movement and the only course for us to follow is to aid Britain and be used these words: "I cannot in good conscience advise my fellows to follow the course of Holland and Belgium'. Appeasement - Hill ridiculed the idea that German, Italy or Japan could be appeased. Representative Fish disagreed with the idea that Germany could 80 easily cross the Atlantic. Representative Tinkhan said passage of the bill would set up $ dictatorship. Representative Bloom came to Hull's rescue and rebuked the Representative from Massachusetts (Tinkham). Tinkham then wanted to know if we would rush to the help of Russia if the need arose. Hull answered that the question was too theoretical for answer. Tinkham asked if we had abandoned all neutrality. Hull answered no. but that the law of self-preservation had begun to assert itself. One point made by Congressman Tinkham was that the war aid bill would give the President the power to create an act of war. Hull answered that the President Secretary of the Treasury Morgenthau followed Secretary Hull and showed the Congress statements of Great Britain's financial standing, showing that the British would be unable to pay words for war orders placed in the U.S. this year. In other the British will be short about $1,664 million. W.R.C., 7:45 p.m., following foreign news: 78 Washington: The Administration told the story today why the President has asked for unlimited aid order. There was laid before the Congressional Committee on Foreign Affairs, by two Cabinet Officers who have the inside on the story - Morgenthau and Hull - information which has come to them concerning the financial standing of the British. Hull, Secretary of State, of course, did not deal in dollars. Hull's main argument was propounded in the question as to whether control of the high seas shall pass into the hands of aggressor powers. He said Germany could easily cross the Atlantic if Britain is defeated. Neutrality offers no protection for any man now. He thinks guns are safer. N.O.L., 9:00 p.m., Heatter. Wednesday, January 15, will occupy a permanent page in American history in years to come. -- Some will certainly say that January 15th Secretary of State Hull virtually proclaimed a new policy for America. He said that the old law of self preservation has begun to assert itself. In years to come Americans will read about Bill 1776, a bill in behalf of American safety. Hull said passage of the measure would not mean dictatorship. Mr. Hull spoke quietly: "I must be frank, in my opinion there is danger. Peace or war for America, no man can say." There are 3 groups in Congress tonight: Wheeler group, who say if you vote for Bill 1776 you vote to kill the Johnson Act, to kill neutrality, to move transports and convoys.- Men who say very frankly that ensuring victory for England would mean war The 3 groups in Washington might be characterized as the group still on the fence. They want amendments, they don't want Congress to dosanything opposed by the Constitution They don't want to give Roosevelt extraordinary powers. Some say that we should help England to insure Hitler's defeat, and will guarantee it will keep America out of war. Some men on the fence ask what kind of British are we underwriting aid for? They have heard of a socialist England. Some men in Washington wonder if it means out and out socialism. Churchill knew that question would come up, he picked Halifax for Washington. 79 TREASURY DEPARTMENT INTER OFFICE COMIMUNCTEONN DATE January 15, 1940 Secretary Morgenthan Foley, Jr. I is you suggested, I had Mr. tall to Senator Chairman of the Temporary Tetimal Economic Committee, - bank holding company legislation and the possibility Le and his Committee might be able to give some support to bill. The Sensitor took the position that the President's monopoly message excluded the bank helding company uruillem from the scope of Temporary National Economic Committee investigations, inasmuch as it urgel the immediate emactment of banic inviting company legislation for POLICIES well set out in the message itself. ite also felt that the bill, unce introduced, would be I eferret to the Banking and Committe and that it reuli then become E legislative into which the Temporary Istimal Immomin Committee could itself only with doubtful program He further pointed that TECC errires on April 1 of this per and was extended that date only for the purpose of giving the Committee ad- time to prepare a inalreport. although no final decision has been made, it is not expectat that any more hearings will be held, but rather that the remaining period of life of the Committee will be taken = with the prepared on of its report to Congress. of the The Senstor did indicate that he HELL personally in favor objectives of bank holding company Legislation and, without himself to any particular Para of hill2 indicated that be would be inclined to support such legislation "unless it con- tained something of which he inst nothing and to which he would object. Sith 80 Secretary Morgenthan E. H. Foley, Jr. JAN 15 1941 As you suggested, I had Mr. O'Connell talk to Senator O'Mancy Chairman of the Temporary National Economic Committee, about our bank holding company legislation and the possibility that he and his Committee might be able to give some support to the bill. The Senator took the position that the President's monopoly message excluded the bank holding company problem from the scope of the Temporary National Economic Committee investigations, inasmuch as it urged the immediate enactment of bank holding company legislation for reasons well set out in the message itself. He also felt that the bill, once introduced, would be referred to the Banking and Currency Committe and that it would then become a legislative matter into which the Temporary National Economic Committee could inject itself only with doubtful propriety. He further pointed out that TNEC expires on April 1 of this year and was extended to that date only for the purpose of giving the Committee ad- ditional time to prepare a finalreport. Although no final decision has been made, it is not expected that any more hearings will be held, but rather that the remaining period of life of the Committee will be taken up with the preparation of its report to Congress. The Senator did indicate that he was personally in favor of the objectives of bank holding company legislation and, without committing himself to any particular form of bill, indicated that he would be inclined to support such legislation unless it contained something of which he know nothing and to which he would object. (Initialed) B. H. F., Jr. 330'C/Law 1/14'41 St GRAY GMW Saigen For m Dated January 15, ISCE Eac'd 9045 is. Jan Secretary of State, Washington. 3. January 15, 11 a.m. A new customs tariff became effective in Info China - of I Inte Duties are wholly (1) ranging from 500 to 130% minimum - goods from - countries including France. General rates are three the address Free and prohibited products are subsidiary as before as - the cations though less subdivided. The internal consumtion tax mails = effect. On the basis of prices in Indochine minimum value will for merchandise below which ismorts will not be assessed. Goods which left their country of origin before Nomber 30 - consummated under the old or new tariff. Temporarily the minimum dutyon trucks is 256, automabile are iron steel and medicines are free. The American trade agreement resains effective the - date replacing the former and the intermediate being completed Tariff and covering despatch following by oriinary still stagile - will be sent air mail if desired. Sent to Cavita for repatition = the Department. Hong Kong, Shanghai, Trade Commissioner FLOOD WSB Cory:bj 82 - 15 1941 n - a. - - - submit to you have for a of transitions territiving / of a free the United II w - -- -- -- -I to States to - late-this - to Discover parts. an of - application - for licenses to be -- - - Sa - - Declared I is . - - - Insurance - Subjecting -of - -of/ -- -- Institution - state - quality of - n with to 1 or Mile Separate is of - / with sugar to the several - way - Signature is w. - -- --of - - Supporting of the - Male 83 1. the following applications seek to Survey december to the Designe do 1'Inteshine, and to effect payment w debiting the free account of the do 1'Intechine with the French learless Smoking Corporation for to the destinations influented AND Application In NY 78724 Value Destination $ 650.00 Into-thins fire tubes and old butterics 4,451.00 Into-this 96 - - 1,800.00 Into-thin 800.00 late-thin 8,000.00 Into-this 10,000.00 Into-thin Committee Plates and tools for machines to work leather skins BY 19746 NY 81999 NY SEPUT NY 86499 - Steel Files 1,000 - plates 7,000 Kilee - 'evertopes checkmar a air NY 90018 a realing with NY 90018 100-tea I Joint 4,000.00 Into-thin NY 93.991 Classi silting eresities, otherw busilies stirrers 1,200.00 Into-thins NY 91991 1 extensite dining making 4,000.00 NY 91886 Trustee wheels - steel press 1,000.00 agriage NY 91000 Seating medical ml equipment 140.00 Into-thin E- n - 84 .3. Value Institution $ 6,100.00 late-thin 1,686.00 Into-Skin $ rellers for cala 10,000.00 Into-thins ==- - tess of sise should 16,000.00 late-this - stool have 40,000.00 = BEST - take steal have -III - Ingut - Sublice for - tages -- -- wating erine with destric - status Moving with fund all - 6 pressed stool pote - grature 3,969.00 -- - - Issue = 86330 Redites wire - $1,000.00 = 99404 - tess of pie tree 11,600.00 E 966 se test of breas $6,150.00 s-- 9,000.00 steel for tooks about I - late-this take-this have CHICAGO - THEIR -- 2,686 1 of response - - 2,000 persons of 900.00 Sale-Skins - .1. .- False Invoice NY TOPES N almo 85 of Institution Registration 1,046.00 Sale-this Polansies NY 82796 125 Files of 890.00 Tate-this BY 91506 so teas esignate 695.00 Into-this of alustas - BY 93620 so teas - NY 95382 150 cylinters 6,200.00 Shanghai, Chine NY 96989 Salpher 1,900.00 Into-Skin NY 96000 Pharmacoutis 7,750.00 Into-thin 685.00 Into-thin outplas liquid chlorine protests 1,989.00 BY - Misride of NY 82799 Bottle tubes 3,199.00 Into-Side NY 81999 Ballo costing sets and - 1,989.00 Into-Side NY SHIP s teas hope 6,700.00 Into-this BY 1000 $ teas Santy 5,669,00 late-this sagnosis Oralas BY seas 10,000,000 (tea million) 12,000 Sale-this boothe eape 11. - following applications seek w debit the Medical account of the I do 1'Intechine, Salgon, with the Beak of California, San Pressions, in payment of shipments from the United States to French Sale-Shim as intenteds I M 6 - 8 ama a my se dress - as 2719 $ team of sise SF 2919 18 team of devices as 2725 Ballo parts - sale MAIN cheete extract 1,000.00 I 1,000,00 accounties I 1,300.00 Spare parts for tracters SF 2726 I-I- - 85 I III. The following applications - to dates the - District the shipments as inficients Amplication No. NY 80441 the Meeted - w the Bothlaben Street of Mr. Transite Take -1 SLIN of - plates Expert NY 80939 the Mestred of Mr. Francis with 29,995 1 of sheal - 1,999 Sang - I- the Bothlishes 1 inport Corporation NY 83174 The Meeted - 100 LOUS - of the Olivia Professo of Health Corporation with the NY - leving trust - - Mested ---of Date - mm Origin). 12 bN Balan -The Research Date 1 I'Manager (leteress Idd. - - BECEIVED 87 EMERAPHRASE OF TELEGRAM RECEIVED WHONE American Legation, Belgrade, Yugoslavia IMATE January 15, 1941, 5 p.m. NO.: PP Reference is made to telegram of January 6, 10 p.m., 10. R from the Department, and telegram of January 14, 9 p.m., mm 7 firm the Department. Tribe morning it was informed orally by the Finance of Eugoslavia that the National Bank is interested = guardine If from the Bank for International Settlements 5000 difference of gold. This transaction, he assured me, - namely for the purpose of liquidating Yugoslav obligations - title United States, and was not for the benefit of the Terminal Government or any other foreign government. It is, the other words, just a bookkeeping transaction, due to the imiditity of the Government of Yugoslavia to transfer gold tax the United States because of physical reasons. LANE. 88 PLAIN JR London Dated January 15, 1941 REC'd 9:36 c.m. Secretary of State, Washington. 150, 15th. FOR TREASURY. By way of encouraging the investment of non-residents' sterling funds in British securities the Bank of England announces that any non-resident having sterling in the United Kingdom and wishing to invest it in registered or inscribed sterling securities here will at the time of his purch SE be given c form (form m) which will constitute : license to sell thos securities on any British Stock Exchange. Hitherto permission to sell such stocks hrs rarely been given to non-residents since the restrictions on security sales were imposed CS reported in the Embrassy's No. 1525 of June 6: The license will be valid for on indefinite period. only the SOME type of sterling will be credited to a non-resident selling the securities 0.8 he originally used for their purchase. The arrongement does not (repeat not) apply to blocked sterling accounts CS described in the Embassy's telegrams Nos. 3816 and 3830 of November 22 and 23. The inducement to invest is regarded 89 -2- #150, Jenuary 15, from London. regreded ns fortified by the fact that whereas non-residents may not withdraw capital EXCEPT in certain circumstances, interest on securities held here may be remitted as noted in the Embrssy's telegram No. 1525 of June 6. JOHNSON HPD