Full text of Diaries of Henry Morgenthau, Jr. : Volume 4 : Part 1
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BOOK #4 PRESIDENT ROOSEVELT March 1, 1941 thru December 31, 1941 0826 March 1, 1941 1:05 p.m. Present: Mr. Foley Mr. Cox Mr. Young HM Jr: We had this meeting over at the White House, and I don't know, Phil, how much you know. Have you seen that (see attached photostat)? Young: Is that a new table? HM Jr: Well, it's the only one I have. I'll lend it to you over the weekend (gives table to Young). What happened over there is this - they spent a half hour on this bill and they stepped out to tell McCloy, Lovett, and a whole crowd they had waiting outside about what had happened, and I told them to tell you fellows about it. Well, it took a half hour just to get Cordell Hull to get in touch with the Senators, which he is going to do tomorrow, and Harry is to act as Chief of Staff. I-really should tell this to each of you individually, but I haven't the time and I know you will understand and treat it confidentially. Well, Harry said that what he wants to do is to take Cox. The President said "Who's Cox?" and I said "Oscar Cox. He is Foley's assistant. Harry never told him that you worked in the Treasury. I told the President that you (Cox) were Foley's assistant and I said, "You know Foley, don't you?" The President said, "Yes I know Foley but I never heard of Cox." So I told him that Foley has been the man who has been if working on the bill and Cox is his assistant. After the meeting, Harry said that he didn't tell the President that you (Cox) were in the Treasury. You're just Oscar Cox. Oh, I have seen that happen before. That's the way works. Then he said that Hull doesn't want Foley and Cox to go up there when I go, and the President said no one should he take their assistants. Well, I am going to do what I always -2- 0327 do. I'm going to take the same ones as always go with me. What I am going to do is to take Foley and if Foley wants to take you (Cox) it is agreeable to me. Am I right? Foley: Sure. HM Jr: I mean I would like to have time to explain to each of you but I haven't the time. Foley: You don't have to explain. HM Jr: Well, there just can't be any feelings in this thing. Foley: No feelings. assistant. HM Jr: I am going to take \just who I want as my But this is the way Harry works. He didn't tell the President that you (Cox) were on a lend-lease basis or anything else like that. We have a wonderful relationship here, and I am going to keep it that way. Harry said he was going to get me over there to work on this this afternoon. I'm not going to work this afternoon. All they want are examples and there isn't any difficulty there, is there? Foley: No, not as far as I know. McCloy knows. HM Jr: Did McCloy get in touch with you (Cox)? Cox: No, sir. HM Jr: Why don't you (Foley) get in touch with him? Foley: Fine. -3- 0828 HM Jr: And then the other thing that came up was the appropriations bill, and the President said we should get to work on it. I said, "Mr. President, that's what your Director of the Budget is doing. He is the fellow to do this." Of course, I am talking very confidential. Then the President said, "But I haven't the time," and I said, "It's the Director of the Budget who should work on that bill. I don't want you working on the appropriations bill." The President had an agenda before him that he was reading. I asked Hopkins why he didn't give each of us a copy, and Hopkins said that he had a copy for everybody but the President said not to give them out. He reads it but we can't have a copy of it. Then I read the whole thing myself because I knew he wouldn't read out loud that part on the Russian business. You'd ought to know about that, Phil. It would take down your blood pressure considerably and that of your assistants. Then I read this memorandum of yours (Young's) on this Russian matter (see attached copy), and I asked the President, "Does this fall within the purview of this group?" and he said, "Yes." Then I asked him if he was willing to have them work on it and bring it back to him, and he said, "Yes." So I gave each of them a copy but that's all. Nothing much was decided. The Navy got quite excited and said that if the English want some technical person to come over there, why doesn't the British Admiralty ask the Navy representative in London? Harry said that he could explain that all right. You know this thing of going direct from Churchill to Hopkins to the President isn't so hot - I don't like it. But what I am saying here is triple confidential and only for the family here. Now do you want to ask me anything? Foley: There is no meeting arranged at all, but if Hull wants you to attend a meeting of the Senators tomorrow 0829 -4- HM Jr: I am available, but as to this afternoon, I am not going to do it. Foley: Was anything said about Bulgaria? HM Jr: Yes. I spoke to Hull about Bulgaria and he said, Well, we are not quite sure." And I said, "Will you let me know personally?" and he said that he would. Foley: We are having a meeting in Shea's office at 1:30. Acheson is to be there - you know in line with the President's memo. HM Jr: When are you going to eat? Foley: I'll eat before I go over there. Young: Should anything be done about this (photostat of chart which HM Jr gave him at beginning of meeting, copy attached)? HM Jr: No. It is all on Hopkins. You put the pressure on Hopkins and take it off of me. It is off of me. Young: If I have any more problems like Russia, do I take those to Hopkins? HM Jr: Yes, yes. Young: All right. HM Jr: Okay? Foley: Yes, sir. HM Jr: I'm just not going to let anybody spoil the excellent organization and relationship which we have here. I just won't let them do it. We've worked together for a long time and nobody is going to come in and spoil it. THE WAR DEPARTMENT INDICATED DOLLAR VALUE OF EQUIPMENT OF INDICATED DOLLAR VALUE OF WAR DEPARTMENT EQUIPMENT REMAINING TO BE DELIVERED M DEPARTMENT TIPE DESIRED FOR DELIVERY FROM C. S. INDISTRY AFTER JAN. 1, 1941. British current Orders 1.9 billion dollars U. 8. Deficiencies 9.5 billion dollars AFTER JAN. 1, 1941. Appropriated for equipment, PT 1941, to include 3d 5.6 billion dollars Supplemental Withdrawals (to 1/1/41) British Deficiencies to 6/30/42 .6 billion dollars 5.3 billion dollars Balance 5.0 billion dollars 16.7 billion dollars In current estimates 2.7 billion dollars Not submitted (2/28/41) 1.8 billion dollars 9.5 billion dollars If British Deficiencies Calendar Years 1941 and 1942 are used, this figure becomes 22.8 billion dollars Franklin D. Roosevelt DECLASSIFIER 000 DIE. - (0/87/99) Date. 8-3-71 Signature RHP NAVY DEPARTMENT INDICATED DOLLAR VALUE OF EQUIPMENT OF RAVY TIPE NOT YET CONTRACTED FOR AND DESIRED FOR DELIVERY FROM U.S. INDICATED DOLLAR VALUE OF EQUIPMENT OF KAVY TYPE OT YEST CONTRACTED FOR AND DESTROD BY V. 8. KAVI FOR DELIVERY BY 30 JUNE 1942 INDUSTRY BY so JUNE 1942 Deficiencies to so June 1941 # 5,501,053,013 UNITED STATES 811,888,000 BRITISH Current estimates Regular F.Y. 1942 # 5,812,611,018 Total Note: For these figures to be on the same basis as 5,558,732,186 3,065,000 First estimated deficiency Estimated additional deficiency TOTAL $ 959,255,827 1,000,000,000 $5,301,053,015 Note: For these gares to be on the same basis as the corresponding Army figures it would be the corresponding Army figures it would be accessary to add British current orders for necessary to add current U. s. Navy orders this type of equipment and current U. 8. Mavy remaining to be delivered. Figures for this orders remaining to be delivered. Figures for heading are not now available with sufficient these two headings are not now available with accuracy to warrant inclusion. sufficient accuracy to warrant inclusion. Franklin D. Rodeevelt Library DECLASSIFIER 000 ME. 5899.0 (9/87/94) Date. 8-3-71 Signature. RHP 0831 March 1, 1941 To: The Secretary From: Mr. Young Re: Russian Clearance Problems Requiring Immodiate Attention. It was agreed in a conference at the State Department held on February 11th that the Russian Ambassador would clear all future orders for machine tools and other critical items through the Limison Committee in accordance with the established procedure. The Ambasandor also agreed to supply A list of orders outstanding as of February 15, 1941, which could be used as a basis for production, settling export control and priority questions. Since that time the Ambassador and representatives of Amtorg have cooperated fully in every respect. The list referred to above was supplied on February 20th, and since February 15th about ninety preliminary negotiation reports have been filed with the President's Limison Committee covering proposed new orders. In all the interdepartmental conferences held on this Russian situation it has been apparent that there is no unanimity of opinion as to the policy to be taken on these orders nor any technique established for their coordinated consideration by the interested United States Government agencies. This latter problea is solved by the willingness of the Ambassador to cooperate in every way in clearing orders through the Limison Committee. The Committee, however, is now confronted with serious questions of policies on decisions which can no longer be delayed. Speci- fically, the following: 1. The problem of forming a policy with respect to Russian orders which will serve as a definite basis for priority and export control decisions. 2. The assignment of priority ratings consistent with the policy to orders already placed which require such ratings. 9. Reesevelt ETErary DEGI per T.D.160 - 0832 3. The reexamination of the basic list of orders on the basis of this policy and the issuance of export licenses consistent with the policy. 4. The necessity for reconciling through the Lisison Committee production clearances secured from War, Navy, and the Office of Production Management with priority and export control action to avoid inconsistency. I cannot overemphasise the necessity for immediate action on these problems. Attached as Exhibit 1 are specific examples of the types of situations which are being brought " our attention daily. Attached as Exhibit 2 is a summary of outstanding Russian orders in dollar value classified by commodities. PY:bj Exhibit I 0333 Cases Illustrative of the Need for Immediate Attention on Russian Orders Aeme Well Supply Company Amtorg has offered this company an order for auxiliary oil well drilling equipment which will amount to from $150,000 to $450,000. The Liaison Committee has cleared this order from the production standpoint with War, Navy, and OPM. We hesitate to send out a production clearance, however, until arrangements have been made for priority and export license action which will be consistent with the production release. American Pulverizer Company Amtorg placed orders with this firm for seven crushers in January, 1941. The value is about $25,000. Delivery is promised May 15, 1941. The manufacturer is anxious to go into production, but is awaiting decision on export license. An application for export license was filed on January 24, 1941, but action has been held up pending final coordinated decision on policy on Russian orders. Babcook and Wileox Here as in the case of Aome Well Supply, Amtorg has offered the company a substantial order. In this case it is for 15 complete steam generating units valued at from $3,500,000 to $5,000,000. Conferences were arranged between representatives of the manufacturer and the Navy, and it now appears that there will be no objection from the standpoint of production. Here, too, we hesitate to issue a production clearance until assured that consistent export control and priority action will be taken. Bellis Heat-Treating Company Amterg ordered 16 electric furnaces valued at about $115,000 from this company on January 16, 1941. The order is included in the list submitted by Amtorg as of Febru- ary 15, 1941. The company has promised delivery between 0834 March and July, 1941, but hesitates to put the order in production until an export license has been issued. The manufacturer has applied for a license, but decision on it is being deferred pending determination of a consistent policy and procedure on Russian orders. Congressman Shanley's office has expressed an active interest in this order. Gardner-Denver Company This company accepted an order from Amtorg on October 11, 1940 for 48 power slush pumps valued at about $200,000. Sixteen pumps are completed and the remaining 32 are in process. Delivery of the entire order is to be completed this spring. These items were recently placed under export control, and the company filed an application for export license for the entire order on January 9, 1941. At the suggestion of the State Depart- ment, they substituted two new applications on February 7, 1941 -- one covering the 16 completed pumps and the other the 32 in process. These applications are held up pending the determination of an over-all policy. In addition, Amtorg wishes to place an order with this firm for an additional 40 pumps valued at about $175,000. Request for clearance on this order will be filed on a preliminary negotiation report, but final action on such requests, even if approved from the standpoint of production, is impossible without a procedure which will assure consistent priority and export control decisions. 835 Franklin 3. Roosevelt Morary 0835 ORDERS PLACED BY AMTORO AND IN EFFECT FEBRUARY 15. 1941 (In thousands of dollars) Commodity group Orders requisitioned requiring export Exhibit II CTRIOTLY ANNIGHT Orders requiring export licenses Orders not DECLASSIFIED per T.D. 160 Licenses granted Total licenses Licenses Licenses rejected pending and diverted: by U. S. Total Orders Government 1. Airframes - 3,907 - - - - - - - - - 874 - 1,510 - - - - - - - - - - - - - - - - - - - - - 93 3,907 - - - - 967 20. Timber - - 543 1,798 - - - 18. Ships - 17. Animals - - 16. Petroleum products - - - 15. Foodstuffs and tobacco - 3,907 14. Textiles and clothing - - 13. Non-ferrous metals 360 - - - - 12. Iron and steel 360 - 1,438 19.403 - - 10. Tanks and tank equipment 3,699 167 - - - - 9. Ordnance equipment 19. Electrical equipment 1 8. Ammunition 11. Motor vehicles - 7. Explosives and propellants 5.536 - 6. Chemicals 3,208 - 4,392 59 - 13,136 38 1 2,568 21 - 108 108 1 - 5. Machine tools 167 38 - - - 4. Total aircraft products 21 - - 59 - 108 - 3. Airplane accessories 108 - 2. Airplane enginee 21. All other 15,647 10.545 22. Total non-aircraft products 20,196 28,916 4,453 3.302 21,161 3,699 52,811 23. Total commodities 20,196 29.083 4,561 3.323 21,199 3,699 52,976 20,196 29.083 4,561 3.323 21,199 3,699 52,976 1 26,192 - - 25. Grand total 10,483 - 24, Capital 61 Office of the Secretary of the Treasury Division of Research and Statistics. Prepared February 28. 1941 Source: Statement compiled by Antorg. 0 March 1, 1941 So called Byines accordment he asked C.Hull to take matter of with Sen atar george and Senates Byrines (This exact suy gistin Iniade to Presive Hipkins) 0836 churchill said S.O.S. to his to Help hichways then In. W. Paivaje need gives hadley we they want now. 3/1 Present. t Hull - them sen # Forestal - adimal Injury maintain Hopkin am I 1941 Jasked Hull to let - me know personally when we should huge Bulgania 0837 gave Pres + H.Hopkins C copy of letter on 10 cutters. game everyone hosent copy of youngs memo in Phil Russia n Pres said this group to the should work Jr my am agement Hull he wanted to stop backage isfats of lubricating to Europe oil and 77TH CONGRESS 1st SESSION H. R. 1776 IN THE SENATE OF THE UNITED STATES FEBRUARY 26 (legislative day, FEBRUARY 13), 1941 Ordered to lie on the table and to be printed AMENDMENT Intended to be proposed by Mr. BYRD to the bill (H. R. 1776) further to promote the defense of the United States, and for other purposes, viz: 1 On page 3, line 10, after the period, insert the follow- 2 ing new sentence: "Defense articles procured from funds 3 hereafter appropriated shall not be disposed of in any way 4 under authority of this paragraph except to the extent 5 hereafter specifically authorized by the Congress in the Acts 6 appropriating such funds or otherwise." 2-26-41-A 838 0840 March 3, 1941 HM Jr called the President this evening at 6:35, in thethe presence of Mr. Foley, and the following is HM Jr's end of conversation: "Hello. How are you? How is your cold? "As you know, we have been working on an order to extend the freeze control to certain European countries. Cordell called up this morning and said he was willing to go ahead on Bulgaria, but I took the position that since the other order was almost ready, Bulgaria could be included in that order, and we should wait until that order was completed and present only one order to you for signature. "We would leave out Great Britain, Russia, Yugoslavia, Turkey, Greece, Spain and Portugal. "We would include Germany, Italy, Switzerland, Sweden, and some other countries I can't remember right off-hand. "Well, those are the two back doors. They are the most important, particularly Switzerland. Now I have just been handed a memo addressed to you and signed by Cordell Hull which reads as follows: (Memo dated March 3, 1941) "I have examined the draft of the proposed Executive Order amending #8389 of April 10, 1940, and it is my opinion that the draft meets and complies with your recent order or memorandum to the Secretary of the Treasury, the Attorney General, and the Secretary of State, directing action along these lines. "You, of course, are aware of the doubts and misgivings I have expressed during past weeks as to the proposed action, but now that you have decided the matter I shall cheerfully do my part in carrying out your instructions. C. H." 0841 2- "Well, that's why I am calling Papa. Now I just talked to Bob. You know this was drawn Largely over there in Bob's office with Shea and Dean Acheson and our people sitting in. "Yes, it was done over in the Department of Justice. "I see. Well, supposing I send this little memo over to you, and in view of that you think we had better go ahead with Bulgaria? "Better do Bulgaria and you take care of this memo. It was given to us in lieu of his approval of the order to be transmitted to the President. "Who gave it to us? Just a minute I'll ask Foley he is sitting right here. (Foley told the Secretary that Hull gave it to Acheson and Acheson gave it to the Treasury people.) "It was given by Hull to Dean Acheson and he gave it to one of our lawyers who brought it over to me and said we were to give it to the President. "Send it back. That's all right. I think you are absolutely right. I was bothered and I talked to Bob, and he said he was bothered so that is why I called you. Yes, I think you're right. It should go direct from Hull to you. "That's right. "Absolutely. "Well, I'm sorry to have bothered you but everything else is all quiet. Take care of yourself. Good night.' After the Secretary hung up, he said that the President told him that he couldn't take a memo from Cordell Hull through HM Jr, and that we should give it back to Dean Acheson and tell him to give it to Hull. The President said he wants an agreement, an affirmative agreement, concurred in by the State Department. DEPARTMENT OF STATE 0842 THE SECRETARY March 3, 1941. Memorandum for the President I have examined the draft of the proposed executive order amending #8389 of April 10, 1940, and it is my opinion that the - proposed draft meets and complies with your recent order or memorandum to the Secretary of the Treasury, the Attorney General, and the Secretary of State, directing action along these lines. You of course are aware of the doubts and misgivings I have expressed during past weeks as to the proposed action, but now that you have decided the matter I shall cheerfully do my part in carrying out your instructions. CH March 6, 1941 0843 I showed the President these plans for the defense savings bonds and he was very much pleased with them. He asked me cer- tain questions about trust accounts which I could not answer and I said that we were studying them. I told him I would like him and Mrs. Roosevelt to buy bonds No. 1 and No. 2, and he said he would. I then told the President that Ambassador Bullitt had been to see me, and was very much upset about not getting a definite job. The President said he had nothing definite and he asked me why I didn't put him in charge of this savings bond campaign. I said, "Well, it would be too much emotion." The President said, "You will get emotion before you get through any way," and I said that we really did not want it. So I did some quick thinking, as I think Bullitt would be terrible at this job. Then I said, "Well, what Bullitt really wants is to work for you, Mr. President - to be at your side. He doesn't want to work for me. The President said, "Well, I just don't have anything definite to offer him now. I then gave the President the memo which he had sent me in regard to McReynolds asking us to do investigations, and he said he had not signed it because he wanted to know whether I wanted to do it. I said that I would do it on his written say-so. He said, "Okay," " and signed it. I asked the President about the Coast Guard cutters to be loaned to England. He said he thought the 250-foot cutters were too new and too good, and asked, "How about the old 165-foot cutters?" I told him that we would look into it, and he said that we should do that. I also told the President that I had sent Harry Hopkins a memo on machinery and tools for Russia, and that the Russian Ambassador had /been in to see me and was very much upset because he wasn't getting anything. I told the President how important the whole Russian-Turkish-Greek situation was, and I hoped some- thing could be done, so the President told me, in strictest confidence, that he had gotten a tip-off that the Germans had made up their mind that they were not going to be able to take England and, therefore, they were going after Russia, and that is why the Russians are so nervous. I also mentioned to the President that Clark of Canada had been down and wanted to get in on the Lend-Lease Bill. $5.000.00 0844 Comparison of Present United States Savings Bonds with Proposed New Bonds for the Small Investor Number of semi- annual periods held Issue price 1 2 4 34 5 0 6 7 8 9 10 Redemption value Present bonds $75.00 75.00 76.00 77.00 78.00 79.00 75.00 75.50 76.00 76.50 80.00 81.00 82.00 83.00 84.00 14 15 90.00 16 92.00 94.00 96.00 98.00 12 13 17 18 19 20 bonds $75.00 85.00 86.00 87.00 88.00 11 Proposed 100.00 Yield during period held Present bonds - .00% Proposed bonds - .00% .67 77.00 1.33 1.76 1.97 2.09 .88 .99 1.06 78.00 79.00 80.00 81.00 82.00 2.16 2.21 2.24 2.26 2.28 1.31 1.49 1.62 1.72 1.79 83.00 84.00 86.00 88.00 90.00 2.29 2.29 2.30 2.30 2.45 1.85 92.00 94.00 96.00 98.00 100.00 2.57 2.67 2.76 2.84 2.90 2.57 2.67 2.76 2.84 2.90 1.90 2.12 2.30 2.45 Treasury Department, Division of Research and Statistics. Yields are nominal annual rates compounded semiannually. $50.00000 0845 Proposed New Appreciation-Type Bond for Larger Investors Number of semi- annual periods Redemption value Issue price $ 75.00 held 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Yield during period held - 75.00 75.20 75.40 75.80 76.20 .27 .35 .53 76.70 77.30 78.10 78.90 79.80 .86 1.02 1.13 1.24 .00% .64 .75 82.00 83.10 84.20 85.40 80.90 1.38 1.49 1.58 1.66 1.74 86.60 87.90 89.30 90.80 92.40 1.81 1.88 1.95 2.02 2.10 94.10 95.90 97.80 100.00 2.17 2.25 2.32 2.41 Treasury Department, Division of Research and Statistics. Yields are nominal annual rates compounded semiannually. & 0846 Proposed New Income-Type Bond for Larger Investors (Paying a current return at the rate of 2.40 percent per annum) Number of semiannual periods held Redemption Issue price $100.00 1 2 M 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 value 98.80 97.80 97.00 96.20 95.50 Yield during period held - .00% .20 .40 .51 .61 95.00 94.60 94.30 94.10 94.10 1.00 1.12 1.25 94.20 94.30 94.40 94.50 94.70 1.38 1.49 1.58 1.66 1.74 94.90 1.80 1.88 1.95 2.03 2.10 95.20 95.60 96.10 96.70 97.40 98.10 99.00 100.00 .75 .88 2.18 2.25 2.32 2.40 Treasury Department, Division of Research and Statistics. Yields are nominal annual rates compounded semiannually. THE WHITE HOUSE WASHINGTON 0047 March 3, 1941 MEMORANDUM FOR HON. HENRY MORGENTHAU To speak to me about. F. D. R. Enclosures Pres asked we if it was ok with me said yes and he - s jued modile 1941 th THE WHITE HOUSE 0848 WASHINGTON February 28, 1941 MEMORANDUM FOR THE SECRETARY OF THE TREASURY: I have just received a memorandum from Mr. McReynolds to the effect that investigations of persons proposed for employment in the several defense organizations which he has requested of the Federal Bureau of Investigation have been unsatisfactory because of the slowness with which the Bureau was able to handle them. I have, therefore, instructed him to turn over to you all cases requiring investigation and I wish you would have your investigative service arrange to handle them very promptly and thoroughly. McReynolds will make the usual form of request for this work to be performed by the Treasury under authority of the provisions of the Economy Act. 0849 March 10, 1941 At lunch today the President said, "I have just had a session with Harold Smith, and we have arrived at a figure but I don't want to spoil your lunch so I won't tell you until afterward." He said, "We have got the whole thing fixed. Hopkins has been talking with Jimmy Byrnes and with Smith, and we have decided to have one ap- propriation for the Lend-Lease Bill divided up into about seven different items. 20% of any one of these items can be transferred from one item to another." He also said, "We are having a meeting tomorrow with the people on the Hill on this matter, and I expect you to sit in. After lunch, the President told me that the amount was seven billion, which surprised me because I had expected more. He said that Jimmy Byrnes had first said they should make it four or five billion in appropriations and the rest in authorizations, but more recently he thought it might as well be the whole thing in one amount. He said that the American people didn't differentiate between authorizations and appropriations, and I agreed. I told the President that I thought it was going to be more. He said he was most pleasantly surprised at the way Barkley and Rayburn took it this morning, so I said, "I think they were prepared for it because in my testimony on the debt limit I said that for the regular expenditures we needed 58 billion, and everybody jumped to the conclusion that the extra seven billion was for Lend-Lease." I said, "So I plowed the ground for you. I then asked the President what his plans were, and he said he hoped to leave on the night of the 17th, one hour after he dedicates the Mellon Gallery. He said he was going South for six or seven days, but I think that before he gets through it will be nearer two weeks. I asked the President whether Sullivan and I could get together with him Thursday or Friday and talk about taxes, and he said, "Yes." He said, "You know Baruch's plan is that we would get another $2,000,000,000 through increased volume of business and ask for another $1,500,000,000 of taxes. I said, "Yes." Then the President said, "There was some such plan and I don't know whether Herbert or I originated it, but you remember in New York State we added an emergency tax of 2%." I said, "You did that." Then he asked, "Well, when you come to Line 31 on 2- 0850 this tax statement, why can't you make a Line 32 and add a certain amount for an emergency tax?" I said, "I don't think that you have made out your income tax because you will find that you have to add 10% as a defense tax.' So the President said, "That's right. I had forgotten about that." I then told the President that now that we know the whole picture on national defense, we can, pretty well lay out a tax program, and I would come over with a half dozen different plans, and he said, "Fine. Then I got back on this question of his plans for operating the Lend-Lease Bill, and the President told me that he and the Chiefs of Staff had arrived at a number of unimportant things they were ready to give to the English Bill. Well, I had to keep pushing him to try to find out how he was going to do it, and I asked him, "Don't you expect the Treasury to do the mechanical work on this?" He said, "Yes." I then asked him, "What do you expect in return for what you give?" He didn't seem to know. He said, "If we give them four cutters we will ask them, say, five years after the war is over to return to us four ships at a value that we will place on them when we turn them over. If the English can build them cheaper," he said, "We will take the American value.' I asked, "What about the $7,000,000,000 appropriation?" He answered, "Well, I am not going to make any plans for that for the time being. He said, "That seven billion runs to July 1, 1942, and I just don't have to make any plans until the stuff starts to come off the lines." I kept pushing him, and I satisfied myself that he had not thought the thing through and he really didn't have any solution worked out. I asked him if he was thinking in terms of taking over the English Fleet or the British Isles in the West Indies. He said, "I don't want the British Fleet because by the time we got it, it would be too antiquated. Then he added, "As to the West Indies, I am too tired and too old to try to solve that problem." He said I should read the article in this month's Harper's on the West Indies, and then he said, "If we could only divide up the land and run the West Indies with our own islands as one unit, and if we could give these people enough to eat, they would then be at least as happy as they were 150 to 200 years ago when they came out of Africa." Then he said that at 0851 . present, according to this article in Harper's, the people down there are ready for revolution, Nazism, or anything else. "But," he repeated again, "I am too old and too tired to take on anything like that.' So I said, "Well, Mr. President, you are tired because you have been sick for a couple of weeks. There isn't anything the matter with you that a week or two of rest won't cure." "That's right; that's right," he said, "there's nothing the matter with my headpiece, but I am just now very tired." As a matter of fact, through my whole conversation, he stuck strictly to business, and I have never seen him thinking more clearly than he was today. I then took the opportunity to give the President this memorandum (copy attached), and I went over the whole financial aspect of the British situation. He gave me enough time to cover the entire picture, and I said that everything was clicking with the exception of Sir Edward Peacock, and that if he approved I would tell Lord Halifax tonight that if by the end of the week Sir Edward had not accomplished something, I was going to ask that he be withdrawn and somebody else take his place. The President said, "That's all right. I emphasized to the President that all their securities and direct investments were pledged against their present purchases, and that the investments in munitions plants were in the process of being sold to Jesse Jones, but that I didn't think Jones had actually bought any. I also said that their munitions contracts were being bought up by Army and that as far as I could learn they had only bought up $5,000,000. I said that both RFC and Army are very, very slow. He then took a pencil and paper and said, "I am going to give you something priceless," and he wrote out in longhand this memorandum (Photostat attached). In sketching this financial picture, I went over the question of Belgian gold and the earmarking of it, and he said, "I would like to have a cruiser go down again to South Africa to pick up the gold." He said he was going to talk to Admiral Ingersoll about it at three and see about getting a cruiser. The President said, "Why don't you go down on it and have a nice vacation?" I said, "No, [enjoy spending my holiday with my wife and children." 0852 -4I may be mistaken, but I don't think that the President has in mind to do anything very dramatic to help England at this time. However, he said he would show me a list on Wednes- day of what he had in mind. I did not press him as I figured that I could afford to wait, but I did get a chance to go over the whole English financial picture the way I haven't been able to do before. I told the President that they had enough money to last until the first of April and, to my surprise, the President said that he always had in mind that they would have enough money to last until the first of May. In talking about the monies to be gotten for the English through the Army and RFC, I said that I had told the English that money could be used for non-United States standard materials, and I also said that all the monies that they got from the sale of their securities or properties were pledged against outstanding or existing contracts, and that I would keep putting pressure attitude. on them on that front until he told me to change my I know that the President got everything I said because I repeated most of the things a couple of times, and I feel that as far as my financial relationship with the English is concerned he at least understands it, and that he won't be giving some orders through Hopkins or anybody else to change it without first talking to me. At least, that is my hope. 0853 March 10, 1941. Secretary Morgenthau Mr. Cochran (abridged by F. K.) These are the channels through which the Treasury obtains detailed inform- tion about the British financial position: FINANCES (1) Ever since the Fall of 1939 the Secretary has had confidential access to the accounts of the Bank of England's special fund in the Federal Reserve Bank of New York for the purchase of war materials here. The Federal Reserve Bank reports to him weekly as to the exact total and movement of funds in this account, including the identity of payees. (2) The Federal Reserve Bank supplies the Treasury weekly with & statement showing all disbursements, through the British Purchasing Commission and otherwise, made from the accounts of the British Government and the Bank of England with the Federal Reserve Bank of New York. This gives in detail the sources of such funds, whether coming from sales of gold or securities or from other credits. (3) Foreign Service Officers report to the Treasury whenever gold shipments to the United States are made. (4) Constant liaison with Sir Frederick Phillips and his assistants in Wash- ington has enabled the Treasury to obtain such information as the British have regarding (a), their own and foreign gold holdings, (b) the amount and location of gold belonging to the British Government, and (c) any special information we may require. SECURITIES The Treasury is kept informed daily of the activities of the security expert sent here by the British Government to manage the sale of officially owned securities. At the start of this arrangement, the British provided the American Treasury with a detailed list of all American securities registered with the British Government. The daily report shows, (1) total sales of securities, indicating the number of shares and the dollar proceeds, and (2) an itemised list by name and amount of all securities sold each day. DIRECT INVESTMENTS The Treasury and the S. E. C. are in close touch with Sir Edward Peacock, who was sent to this country at the end of January to oversee the liquidation of British direct investments in the United States. His various propositions are studied by the Treasury's General Counsel before being consummated. COMMITMENTS For the past two months the British Purchasing Commission has sent the Treasury daily list of the contracts it would like to place. Each such list is counter- signed by Sir Frederick Phillips to indicate that funds are available. The British are not free to proceed with these contracts until they have the approval of the Secretary of the Treasury in each case. - 0854 Hing Because of The general finminel picture (wor you harry info (4) R+C taking was of British payment. made for the Na Oft. Inking were, 17 material payments mail by th. British 150 at Runch march 10th 1941. - 0855 March 16, 1941 Sunday 2. P.M. OFFICE OF THE SECRETARY THE INTERIOR Pces. said have achesin telt Mugualania simister that Pas bermally held of the gold over the week end with the hope that they would resist But for leaver sofe not to wheat the act more of transferring food 0856 March 17, 1941 Present: Mr. Cox Mr. Young Mrs. Klotz H.M.Jr: I am going to dictate as much as I can remember and as much as I want you to hear lunch. of what I did with the President at The President brought up the question of the ten Coast Guard Cutters, and he was very anxious that anything that we do should be kept a secret until after the seven billion dollar bill passed. He asked if I thought it should be kept a secret. I said I thought that if he would tell the Navy that he wanted these put in shape and that the English would be informed they were coming as soon as the bill passed, that they could get their crews to Halifax and be ready. He tried to get Admiral Stark, but he was out; but he left word he should call him as soon as he came back. / I brought up the question of who was going to look after Harry's work while he was gone, and the President asked me whether I didn't think Philip Young could do it. I said yes, I thought he could. I didn't say that except after careful consideration. I thought it was terribly important that -2- 0857 the thing kept going. I said that I had heard some gossip that there was talk of putting Dick Fuller in, and the President said, Oh no, " Dick Fuller was doing too important work now. I then asked the President if it would be agreeable to him if the English, beginning today, placed an order during the next two weeks for three hundred million dollars worth of materiel, twenty per cent down, so that when the bill passed, they could be reimbursed for this; and he said it would be all right. This (speaking to Mrs. Klotz) should be photostated, and anybody in the office who is interested in the Lend-Lease Bill should get that. The President said that he>. - that we should come early tonight, that he and Harry and I would settle who should handle the things while Hopkins was gone. I then stopped by and saw Hopkins, and told him of this; but Hopkins is still flirting with the idea that General Burns should be detached and assigned to him, and Vickery should look after the Maritime Commission, and Young the rest. I told him I thought it was a mistake, that we never would get an Army man really to go after the Army, because I had found that to be so, and that he should use Young in just the same capacity that I did, but I to sell this to because said,independent "You he willas is hell havementally Young, and I am not trying to sell Young to you, 0858 -3because there are a half dozen different spots that I can use him for," so.I said, 'You are not doing me any favor by taking Young." Right? Young: Right. H.M.Jr: But I get the feeling that Harry is still sort of fishing around and really doesn't know what he wants. There is one thing evident, though, that the President doesn't want to do anything for he English other than what has already been done until the seven billion dollar bill passes. I spoke to Hopkins and asked him to go ahead now with the English on their new orders. He said could I meet now in the Cabinet room with him and Purvis, and I said no, that I would be tied up until 4:30, but I thought they would have to bring Sir Frederick Phillips into the picture. So he said he would try to do it, and if he needed any help, he would give me a ring. I also told the President what we had done in regard to Yugoslavia, and he seemed pleased. Young: Any response to that purchasing letter? H.M.Jr: I asked the President, wouldn't he please sign this letter in response to mine. I safe "You never read my letters any more." He laughed. He said, "What letter? And if Cox could only get Hopkins to dictate that letter, I think we would get the President to sign it tonight. Cox: How about giving him a draft of it? H.M.Jr: Well, that is what I hoped, that you would have one for him. THE WHITE HOUSE C859 WASHINGTON March 17, 1941 MEMORANDUM FOR H. M. Jr., I approve giving con- sideration to British library holdings of rare books in connection with trade or financial terms to be worked out under the Lend-Lense Bill. or --Such ormanuscripts even or -- $ books prints inure to the should, benefit paintings of of course, the Smithsonian, the National Museum, or to the Library of Congress. F. D. R. 0860 April 2, 1941, 3 p.m. (Dictated April 3rd) Meeting at the White House. Those present were Mr. Hopkins, Secretary Knox, Secretary Stimson, General Marshall, General Holcomb of the Marine Corps, the Attorney General, the Secretary of State and myself. I had two lists which Gaston gave me, explaining the armament on the 250 foot and 327 foot cutters. The President kept them. (Copies are attached.) The President decided that he would lend-lease the 10 250 foot cutters to the English. I so informed Gaston on my return. Also, that the Maritime Commission should furnish us the ships from the coastwise trade to do thefoot weather patrol work that we are now doing with the 327 cutters. The President also said that we should call up the Director of the Budget and tell him to send to the President the Coast order consolidating all steamship inspection under the Guard. The President told Hopkins to tell Purvis that the U. S. Government was waiting for them to send us commercial ships to be prepared; that we were ready, and that the English had not sent us any ships. The President told the Army and Navy that he had asked for 48 hours for the Mediation Board to act on the Milwaukee strike. His attitude towards them was please not toacrowd him during the 48 hour period, to give this Board chance. The President said that public opinion was not yet ready for the United States to convoy ships. This 0861 -2- was his whole attitude anyway, that he seemed to be still waiting and not ready to go ahead on "all out aid for England". I raised the question about what disposition should be made of the Danish ships and after much discussion and a review again on the part of the Attorney General of the situation, the President approved of a memorandum handed to him by Hull which evidently authorized Hull to introduce legislation to make it legal for us to take over the Danish ships. The President directed me to have Coast Guard immediately take up with the Maritime Commission the question of having the ships repaired. The President wanted Coast Guard to supervise this. At the meeting Admiral Stark gave a very glowing account of how Coast Guard had taken over the ships and he was very generous in his praise of Coast Guard. ADDRESS THE COMMANDANT U. s. COAST GUARD AND REFER TO NO. OP-618 TREASURY DEPARTMENT 0862 64 601 UNITED STATES COAST GUARD HEADQUARTERS WASHINGTON 2 April, 1941. MEMORANDUM TO ASSISTANT SECRETARY GASTON. Weather Patrol. If ten cutters of the 250-foot or 327-foot classes are transferred, it will be impracticable for the Coast Guard to maintain two weather patrol stations in the North Atlantic, using its own vessels. It will be practicable for a limited period, provided there is no objection on the part of the Maritime Commission, to maintain one weather patrol station using the Maritime Service vessels AMERICAN SEAMAN and AMERICAN SAILOR. R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. ask Maritime cauni to give us the shifs to maintain Put whether weather totale. Coast guard wen in these 1.mm ships OP-618 64 601 2 April, 1941. MEDDANDOM TO ASSISTANT SECRETARY GASTON. Weather Patrol. If ten cutters of the 250-foot or 527-foot classes are transferred, it will be impracticable for the Coast Guard to maintain two weather patrol stations in the North Atlantic, using its own vessels. It will be practicable for a limited period, provided there is no objection on the part of the Maritime Commission, to maintain one weather patrol station using the Maritime Service vessels AMERICAN SEAMAN and AMERICAN SAILOR. R. R. NAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. 0863 April 2, 1941 (Dictated April 3rd) Hopkins said he would give us a memorandum at ten o'clock today authorizing this. He told me this as I was about to leave the room. 0804 0865 OP-2000 64 2 April, 1941. MEMORANDOM TO ASSISTANT SECRETARY GASTON. Replacement vessels. The same type of vessel will be constructed as a replacement for vessels of the 250-foot and 327-foot classes. The proposed replacement vessel will be of the same general type as vessels of the CAYUGA class. These vessels have proven of great value and service, performing all types of Coast Guard duties. In general, the new vessels will be 250-feet in length, 42 to 44 feet beam, maximum draft about 16 feet, displacement approximately 2,000 tons, speed 16 to 18 knots. They will have sufficient strength structurally to enable them to operate in the ice. The vessels will be given the equipment necessary to enable them to carry out any type of Coast Guard duty which may be assigned vessels of their class. The estimated cost of constructing and equipping proposed ves- sels, based on current prices, is - $2,500,000 per vessel. Total for ten vessels $25,000,000. iquid may Pus saip R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. out of Thillion Hopkins fucking an it se 6 THE BRITISH SUPPLY COUNCIL IN NORTH AMERICA 0866 copy Box 680 TELEPHONE REPUBLIC 7860 BENJAMIN FRANKLIN STATION WASHINGTON. D. C. April 1st 1941. Dear Mr. President: COAST GUARD CUTTERS It is requested that a release be made to His Majesty's Government of ten Coast Guard Cutters for convoy purposes. It is particularly asked that say five of these cutters be 20 knot speed type as distinct from the normal 16 knot speed. The Germans have been using submarines on the surface at night as torpedo craft. These submarines retire at 16 knots speed immediately after delivering the attack: the experience of the British has therefore been that ships of 16 knot speed cannot overhaul the submarines. As it is very vital these cutters be in active use promptly, the British Admiralty would welcome them in their present condition and with their present armament. If, however, any annament is missing and would take time to obtain or install, the necessities of the situation are so great it would be preferable to have the ships as they stand. Furthermore, if high angle armament is not fitted, this could be fitted later in the United 0867 Page 2. April 1, 1941. Kingdom at some appropriate opportunity. The Admiralty advises by cable that crows for such outters could be made available from ships now en route to U. S. ports for repair. Yours very truly, Chairman The Honourable Franklin D. Roosevelt, The White House, Washington, D,C. Urgent Questions Concerning best-lease Operations 0868 (1) Are the following countries considered to be within the lead-lease area although purchasing operations may be carried on for cash either by a direct purchase transaction or by cash reimbursement to the United States Treasury: Poland British Bepire Iceland Norvey Turkey Greenland Greece China Belgium (including Belgian Gonge) Netherlands (insluding Netherlands East Indies) (2) If this list of countries cannot be approved. can the various parts of the British Empire. the various parts of the Methoriands Empire, and Nervey be treated as within the land-lease area even though purchasing may be carried on for cashi (3) Should the smaller British Allies coming within the land- lease area, such as Greene. Hervey and Belgium (excluding Methorlands Repire) have all requisitions for defense articles countersigned by the British before submitting them to the United States Government? Note: In connection with the purchasing operations of such countries as Nervey and Belgium there is a problem looming up as to when these countries should be extended credit even though they may have a certain amount of cash resources left. For instance, with respect to the immediate request of Norway for areament for merchant ships, the treasury Division of Monetary Research advises me that Norway has approximately 88 million dollars in gold, 10 million dollars of official balances, and 85 million dollars private balances. Yet the implication from the note from the Minister of Norvey is that this armanent should be secured on lend-lense credit. As a matter of practical operation, I should think these problems could be worked out in individual instances as they occur and in conjunction with the British Treasury which has information as to the financial state of its allies. PY:bj 4/2/41 Copy for the Secretary 0869 April 2, 1941 KENORANDON To: Mr. Hopkins From: Mr. Young Re: Definition of Countries Within the Lend-Lease Area. On March 29th, I addressed a memorandum to General Burns concerning the definition of countries within the lend-lease area, copy of which I enclose. This matter is becoming urgent in connection with dominions of the British Empire, such as Canada and Australia, and in connection with the Netherlands East Indies. For the present it is assumed that such parts of the British Empire as Canada and Australia will continue to pay cash for their purchases; that is, purchases may be made by the United States Government under the Lend-Lense Act with a direct cash reimbursement to the United States Treasury or by a separate negotiation conducted directly between the purchaser and the supplier. In the latter case the transaction would not be performed under the lend-lease provisions. Canada is very anxious to have the United States Government place orders for it under the Lend-Lease Act and then reimburse the Treasury. I might add that the reimbursement to the Treasury goes into a revolving fund in such a way that there is no drain on the lend-lease appropriation. In the case of the Netherlands where over 95 per cent of the purchasing program is destined for the Netherlands East Indies, it seems to me that all parts of the Netherlands Empire should be included within the lend-lease area although, of course, the Dutch will continue to pay cash either on direct purchase transactions 0870 -2- or on lend-lease transactions with reimbursement to the United States Treasury. I believe that the Datah should be included in this area and allowed to purchase under lend-lease provisions, first, because of their close relationship with the British and the need for increased coordination between the Motherlands Purchasing Commission and the British Purchasing Commission: secondly, because of the vital importance of the Far Eastern situation to the United States; and, thirdly, because more active control and supervision over this large purchasing progres, which is having a direct effect on our production and our economy, can be secured in the lend-lease area than if the Datch are left to shift for themselves. Further, the fact must be taken into account that the United States is receiving vital strategic and critical materials from the East Indies and that this flow should be preserved at least for the time being. There is a third remification of this situation, namely, there must be coordination and cooperation between the British Purchasing Commission and the British allies asking for release of goods under the Lend-Lease Act. For instance, Norway is ourrently requesting certain guns and ammution, as outlined on the attached list, to arm 250 Norvegian merchant ships which are oper- ating in the war sone and in the interests of the British. I an now trying to find out if the Navy can make available any of the equipment requested, and is is my feeling that all such requisitions from British allies, with the possible exception of the Datch, should only be made if approved by the British Supply Council. In connection with this specific request, it would seen to me such easier to release guns for the Norvagian ships that are being used to help the British than to build new ships to replace them. I attach a list of urgent questions which if they could be answered would immediately help clarify the situation and speed up lend-lease operations. (Initialed) P.I. PY:bj 0871 March 29, 1941 U KEMORANDOM To: General J. H. Surns From: Philip Young Re: Definition of Countries Within the Lent-Lease Area. In a letter to the Secretary of State, dated March 18, 1941, the Secretary of the Treasury stated that purchasing operations for countries outside the lend-lease area would be turned over to the State Department for handling. and that purchasing operations for countries within the lendlease area would be handled by Herry Nopkins. Countries within the lend-lease area were listed as Poland, Iceland, Greenland, Netherlands, Greece, China, the British Repire. and Norway. Arrangements have been made with Assistant Secretary of State Acheson to handle the countries outside the lend-lease area on the same Form 8 which may be used by the lend-lease countries and in accordance with the same procedure so that there will do maximum standardisation and the least confusion. These countries will also be handled by the State Department under the same filing, classification, and control systems established for the lend-lease countries. In order that the purchasing missions of these various countries may be officially notified of this change in precedure, it is absolutely necessary to secure an approved list of countries falling within the lead-lease area. For example, Canada, which presumably as a part of the British Depire should come within the land-lease area, would like the United States Government to place certain orders for it and would then make direct cash reimbursement to the Treasury on delivery. 0872 -- The same situation is true with respect so the Metherlands Purchasing Commission which would like the United States Gevern- meat to place certain ordere for the Motherlands East Indies which are vitally needed for defense of the Indies. In this instance, also, direct cash reimbursement would be made to the United States Treasury. It would be appreciated both by this office and the Depart- ment of State if A definite list of countries, of course subject to future adjustment, could be approved as lend-lease countries. I attach herewith a list of countries which I believe should be considered in the lend-lease area and treated accordingly even though they may continue to buy for cash either under the LendLease Act with a cash reimbursement to the United States Treasury or by direct purchase on a Form 2 (PM). (Initialed) P.Y. PY:bj 0873 Countries Considered to be Within the Lent-Leese Area even though Purchasing Operations may be Carried on for Oach. Poland Iceland Greenland Netherlands (including Netherlands Rast Indies) Greece China British Empire Norway Turkey Belgium (including Belgian Dange) Approved: [COPY] 0874 CITIAL ROYAL NORWEGIAN LEGATION Washington, D.C. March 21, 1941. My dear Mr. Summer Welles, May I express to you my sincere appreciation of your understanding attitude when I took up with you today the very urgent matter of armament for Norwegian merchant vessels in the war zones., I was particularly gratified, and I know that my Government will be gratified, to learn that the Department of State takes the position that Norway is definitely among the countries which should be entitled to benefit by provisions of the 80-called Lend-Lease Act. I need hardly repeat what I said to-day with regard to the extreme importance of Norway being enabled to install on Norwegian ships in the war zones such guns, anti-aircraft and machine guns which are necessary to protect them as far as possible against enemy submarines, raiders and bombing planes. There is a very real danger, which already is making itself felt, that the crews of these Norwegian The Honorable Summer Welles, Acting Secretary of State. The Department of State, Washington, D. C. 0875 -2- vessels - officers and men who have so far exhibited great courage and loyalty under dangerous conditions - will show a natural and increasing reluctance to expose themselves to enemy attacks without the least chance of defending themselves. It is evident also that indisoriminate sinking of these vessels employed in carrying American supplies to the battle lines in Europe will mean a very serious loss not to Norway only but to Great Britain and all nations engaged in the supreme defense of freedom and civilization. I have discussed the question of armaments for our ships with my naval, military and maritime advisers and of course also with the Norwegian Director General of Shipping, Mr. Divind Lorentzen, who is at the head of the Norwegian Shipping and Trade Mission, London and New York. As you know, the entire Norwegian Merchant Marine outside of Norway, that is about 4 millions tone of shipping, is sailing to-day under the direction of said Mission and under the Norwegian flag. The information given me by these experts is to the effect that there are still about 250 Norwegian mer- chant vessels, sailing in the various war zones in the interest of the British Empire, which are to-day without any armament. It is the considered opinion of my advisers that an adequate armament for each of these vessels would be: 0876 -3- One 4" or 3* gun according to the tonnage of the vessel, facilities for mounting, etc. One 20 mm. or 37 mm. anti-aircraft gun. Two .50 calibre machine guns. All with an adequate amount of ammunition, viz. About 200 rounds per low angle gun, 2000 anti-aircraft gun, and 5000 . .50 calibre machine gun. For the 250 vessels the total amount of guns and ammunition would be: 250 4" or 3" guns, 250 20 mm. or 37 mm. anti-aircraft guns, 500 .50 calibre machine guns, 50 000 rounds of ammunition for the low angle guns, 500 000 anti-aircraft 2 500 000* the machine guns. guns, and It is possible that additional guns and ammunition may be needed later on as danger zones are being extended and as ships are being transferred from non-danger zones into danger zones, but at present no accurate figures can be given. May I at this time also call attention to the necessity of procuring foundations and of mounting in American ports any such guns, etcetera; which we may receive for Norwegian vessels, and ask for your kind guidance as to how we should go about this phase of our problem. I-should be deeply grateful to you for letting me 0677 know at your earliest convenience whether and on what conditions under the Lend-Lease Act The President might be willing to transfer to my Government the guns and ammunition specified above. The urgency of this matter as well as the common interest of our Governments in the safeguarding at this fateful time of these irreplacable ships and cargoes, makes me hope that the Government of the United States may find it possible and expedient to give this matter preferential treatment. Believe, me, my dear Mr. Welles, very sincerely yours, WILHELM MORGENSTIERNE WM.MES. RECEIVED MAR 25 1961 Treasur artment Office of Philip Young 0878 WAR Aircraft Ordnance Tanks Facilities Miscellaneous $ 679,585,000 153,470,000 90,767,000 8,000,000 17,000,000 $948,822,000 NAVY Ordnance Aircraft Facilities $ 73,563,000 34,980,000 15,000,000 123,543,000 PROCUREMENT, TREASURY Steel, and other industrial products 8,500,000 AGRICULTURE Food (including tobacco) 11,300,000 $1,092,165,000 Allocation No. 1 April 2, 1941. 0879 OP-2000 64 2 April, 1941. MEMORANDUM TO ASSISTANT SECRETARY GASTON. Replacement vessels. The same type of vessel will be constructed as a replacement for vessels of the 250-foot and 327-foot classes. The proposed replacement vessel will be of the same general type as vessels of the CAYUGA class. These vessels have proven of great value and service, performing all types of Coast Guard duties. In general, the new vessels will be 250-feet in length, 42 to 44 feet beam, maximum draft about 16 feet, displacement approximately 2,000 tons, speed 16 to 18 knots. They will have sufficient strength structurally to enable them to operate in the ice. The vessels will be given the equipment necessary to enable them to carry out any type of Coast Guard duty which may be assigned vessels of their class. The estimated cost of constructing and equipping proposed Ves- sels, based on current prices, is - $2,500,000 per vessel Total for ten vessels - -$25,000,000 R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. OP-618 64 601 2 April, 1941. MEMORANDUM TO ASSISTANT SECRETARY GASTON. Weather Patrol. If ten cutters of the 250-foot or 327-foot classes are transferred, it will be impracticable for the Coast Guard to maintain two weather patrol stations in the North Atlantic, using its own vessels. It will be practicable for a limited period, provided there is no objection on the part of the Maritime Commission, to maintain one weather patrol station using the Maritime Service vessels AMERICAN SEAMAN and AMERICAN SAILOR. 9 R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. 0880 0881 E1-200 0161 2 April, 1941. MEMORANDUM FOR ASSISTANT SECRETARY GASTON: Subject: 327-foot Coast Guard Cutters. There is forwarded herewith a descriptive tabulation of the seven 327-foot Coast Guard Cutters. 1. R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. PBE/EMM 0882 E1-200 0161 2 April, 1941. MEMORANDUM FOR ASSISTANT SECRETARY GASTON: Subject: 250-foot Coast Guard Cutters. 1. There is forwarded herewith a descriptive tabulation of the ten 250-foot Coast Guard Cutters. R. R. WAESCHE, Rear Admiral, U. S. Coast Guard, Commandant. PBE/EMM U. 8. COAST, GUARD 327-Foot cutters a Fire Degaussing BIBB. Temp.D.G. 2 inst. 3 3 last last. calibrated Do. 2 5 Liston, 4 CAMPHELL inst. inst. Portugal do. 3 Norfolk inst. inst. Controls Sound lights 1 set tks. 1 set 1 need. delvd.not.in delvd. 1 set tks. need. set 1 set delvd. controls but not needed inst. do. & set altimtr. & needed needed 3 3 calibrated trks & 6 Mass. inst. inst. inst. inst. 1 Temp.D.G. Est. date of Phone Braten 54 jack Radio 1 TCE trns- 26 bomes mtr. freq. May need. netr need. 1941 go controls 3 mater last inst. System do. Gainby WILL go to Beth-Steel Co. reaks) S.I.Yd.om return to U.S. 54 Jack do. 10 & meterboxes May & as. needed needed 1941 2 8 mtr. inst., 1 Calo 3 3 2 inst. 3 Temp.D.O. 3 not inst. York, inst. 4 need. inst. set delvd. controls not needed. last do. 1 New Alet inst. gc 1 @limetr. needed 1 # metr. & mount need do. Apr. 1941 inst. Tonnage Cruising gross Radium Date Building to 2141 9000 1957 20 BEH 9000 1954 20 2141 9000 1936 20 2141 9000 1937 20 2141 9000 1936 20 2141 9000 1937 20 2141 9000 1956 16 1573 7500 1932 1632 7500 1929 7500 1928 bine-twin Returns to Beth.Steel 00. Balt imore rd.,15 Apr.'41 WILL report to Chief of Naval Operations on April 1941 as relief for CAMPBELL 5415000 do. 81 boths adidas do. 1 last 4 need. Mass. SPENCER 6200 H.P. Deared Tur (See So. May, Returns to Beth.Steel Co. Boston Td., May, 1941. 1941 do. Returns to Beth Steel Co. 2 1 set trks. 1 2 inst, last. inst. 1 do Boston Return to Beth Steel Co. Baltimore, May, 1941. Speed and be completed in 3 wich altimer. last. Power screw needed DUANE Remarks Come inst. needed inst.,not 1 altatr mount need controls Doston Finders 1 2g mtr & not inst. 1 set tks. inst. 4 need. Vs. OW centrol Range needed 2 inst. 3 HATTLEON 1 Search- 1 set contle. needed 1 Vs. inst. 4 inst. N.G. A.A. water 1 5*/51 24" H.I. 1 Calibration Y-Oun Under 1 Location Norfolk, 50 Cal. 3*/50 and 1 Present Depth Chg. Tracks & 1 Name & needed June N.Y. S.I. Yd, 19 May, 1941 1941 sta.-Honolulu, inst.,not inst. T.H.,(mow ca calibrated. Issed. a inst. 2 3 4 need. need. do. 1 Temp.D.O. need. 1 set delvd. do. 1 TANET. to. (See do. needed Renke) sion in 4 weeks after return to Mare Is. N.Yd. inst.not Line,Is.cruise Comp. rearmanent conver- comp. 250-Foot Customs 2 3 inst.,not 4 Temp.D.G. Boston,Mass now in inst. inst. inst. inst. inst. 1 GAYUGA,-sta. Comp. calibrated. 00 inst. ecap. 2 need. 12 2 18*HI that. meter System Cimp. 1 TCE tras- Comp. mtr. freq. 3200 H.P. Turbo Eled as required mater needed. inst. will be made available in May 1941 for minor work 4 2 3. do. inst. inst. need. need. inst. 1 -sta N.Y.,N.Y.-now do. do. do. 00 jack do. 1 CLOWPLAIN Single screw Omealand Apr. borea Comp. at Phila,N.Yd beided 1941 Assigned to International 3000 H.P. Ice Patrol 1941,commence Turbo Elec. ing April, 1941. 16 Single screw 2 4 inst. a inst. Phila.N.Yd.) 1 Boston(now do. do. do. do. do. On departure N.Yd.,Phila 2 do. inst. need. Apr. 1941 1 good. # 3 4 Temp.D.G. Diego Calif inst. inst. 1 ITADGA 3*/23 calibrated inst. need 1 set tks. & set contla. do do. do. do. 28 Apr. enroute to inst. 1941 Available at M.I.N.Y. 14-88 Apr. 1941 for conversion completion. inst. 1 3 4 inst inst. 2 inst. inst. do. do. 2 now at N.YA. Temp.D.O. inst. & calibrated inst. Comp. System do. 3000 H.P. : 3 do. do do. last. inst. inst. inst. System do. 1929 1633 7500 1938 1573 7500 1930 1573 7500 1930 16 1573 7500 1930 16 1632 7500 1928 16 1941 4 3 2 now N.Y. 1 last. inst. do. inst do. do. 2 Calventon, last. inst. Grate do. 3200 H.P. 16 Turbo Elec Apr. Comp. Single 1941 N.Yd. sorow 2 inst. inst. 3 need. Trke.b Contis inst. 2 need. 18"HI do. delivered. calibrated 3 2 inst. 4 auth., inst. 3"/23 do. 20 do. do. in progress at Norfolk 1941 Navy Yd. 16 Conversion in progress May at Coast Guard, Yard, 1941 Cartie Bay, Md. auth. in progress Completion of conversion Apr. needed do. delvd. inst. need. do. go 35 Jack boxes inst. do. 1 Temp.D.O. do. 2 1 inst. 3 Temp.D.G. inst. 1 now Curtis Bay 7500 Apr. Comp. 1 do. 4 calibrated inst. 1 now N.Y. N.Yd SARANAO, -sts. San Francisco, 1632 16 Single 1941 2 inst. not now at N.Yd. 1930 Single 4 Perm.D.O. eta.-N.Y..N. SHOSHONE -sta 7500 screw PONTCHARTRAIN Norfolk, Va. 1573 16 Turbo Elec Apr Comp. N.Y. SKBAGO, -ata 3200 H.P. Turbo Eled screw 1 -ata. 1632 course for calibration; reports to International Ice Patrol 10 Apr. 1941 M.I.N.Y. Norfolk, Va. 16 proceeds to degaussing Md. 4 is 2 inst. & calibrated inst. inst. Inst. 1 Temp.D.G. inst. inst. Comp. QC inst. comp. 2 2) 2 New Bedford, Mass. now at inst. meter System 2 TAHOE,-Sta. do. Comp. Apr. last. 1941 3000 H.P. Turbo Elec Single screw New York. 0 0884 April 4, 1941 At Cabinet today I brought to the President's attention the fact that the Senate agricultural bill was 450 odd million dollars in excess of the amount the Budget had asked for. I also reminded the President that some time last November he made the remark that he would cut non-defense items to the bone. He didn't seem to like my reminding him of that remark, but as a result of my bringing this matter to his attention he said he would see Wallace and Wickard, Harold Smith, and myself sometime tomorrow. 0885 - Cabinet. THE WHITE HOUSE WASHINGTON 0885 - 7, Pentines < says coal minus willgr back to work monday 7. Perkins says 7ad strike will be settled by monday or Tuesday. Have today carefer with But Patterson an + Bob Jackson of taxing cost plus by defense contracts , 0886 April 6, 1941 I spoke to the President at 12:30 and asked him if I could be of any assistance. He was in the doctor's office. He asked me whether I had heard two things: One, that Cox had told Hull that Russia had signed a mutual as- sistance pact with Yugoslavia. I said that I didn't think that was correct as I had just listened to the radio and they didn't say that. The other thing was that Germany had declared war on Yugoslavia. The President then said that I should get in touch with the Yugoslav Minister in the morning and ask him which would be of the greatest use to them - to keep their funds frozen or unfreeze them, and that I should say on behalf of the President that we were ready to do whatever would be most useful to his government. The President was very chatty and in an extremely friendly mood. April 7, 1941 0887 I gave the President the original of this letter on Danish ships. I also gave him the original of Foley's letter on quid pro quo. I spoke to him about the legislation on the Danish ships and he said that he knew nothing about it and he did not know what Cordell Hull was talking about. (Hull had told me he had sent it back to the President. On the quid pro quo, the President said he wanted us to do it in consultation with the State Department. 0888 April 7, 1941. Memorandum for the President: Subject: Seized Ships Of the 27 Italian, 2 German and 35 Danish ships seized by the Coast Guard on Sunday, March 30, 26 Italian ships and one German ship had been sabotaged by their crews. All of the Danish ships were found to be in good order. AB to the ships which were sabotaged, the Attorney General plans to initiate actions for forfeiture under the Espionage Act as soon as he has State Department approval. However, it is the Attorney General's informal opinion that we have authority to proceed immediately to put the ships in operating condition. At our request the Maritime Commission now has surveys in progress to determine the extent of the damage and prepare plans for making repairs. It is our understanding that it is the opinion of the Attorney General that legislation is desirable if we are to take title to the remaining ships which are undamaged, consisting of 35 Danish, 1 Italian and 1 German. We understand that a draft bill has been prepared and is before you. It would appear advisable that it be introduced at the earliest possible date. It seems clear that responsibility for repairs and operation of any ships that may be acquired would rest with the Maritime Commission. Secretary of the Treasury. C 0889 0 P Y Secretary Morgenthau April 2, 1941 Mr. Foley Attached is a redraft of the over-all Agreement to cover defense articles made available to the United Kingdom which incorporates the suggestions made by the President at our meeting with him and Harry Hopkins on March 14, 1941. At that time the President said he was in no hurry to sign the Agreement and suggested, after the appropriation measure was passed by Congress, that we take up the redraft, first, with the State Department, second, with the Attorney General, and third, with the Director of the Budget, and, subject to Harry Hopkins' first clearing with Dean Acheson as to the attitude of the State Department, begin discussions in a preliminary way with the British. I called Dean Acheson last Friday and told him that we were ready to sit down with him and go over the redraft, but I haven't heard anything from him although he promised to give me a call not later than last Monday. I suggest that you ascertain at the meeting this after- noon whether or not Treasury or State is to take the Agreement up with the British. (Initialed) E.H.F., Jr. Attachment C 0890 0 P Y WHEREAS, the President of the United States is authorised by the Act of the Congress of the United States of March 11, 1941 (Public No. 11, 77th Congress, and hereinafter called the Act) to sell, transfer title to, exchange, lease, lend or otherwise dispose of, and to take certain further action with respect to, defense articles to the government of any country whose defense the President deems vital to the defense of the United States, on such terms and conditions as the President deems satisfactory, and WHEREAS, the President has determined that the defense of the United Kingdom is vital to the defense of the United States, NOW, THEREFORE, it is agreed by the United States and the United Kingdom as follows: 1. From time to time and in such amounts as the President may determine, the United States will, pursuant to the Act, (a) furnish to the United Kingdom certain defense articles; (b) test, inspect, prove, repair, outfit, recondition dr otherwise place in good working order any defense article, or procure any or all such services by private contract; and (c) communicate defense information pertaining to any defense article furnished herounder, as valued and listed or otherwise described in schedules, . -- 0891 appropriately identified, now or hereafter to be attached to this Agreement. 2. Within such period or periods as determined by the President, notice of which determination shall be given to the United Kingdom, (a) The United Kingdom agrees to redeliver to the United States such defense articles furnished to the United Kingdom hereunder which, in the opinion of the President, are not used up, worn out, destroyed, or otherwise rendered incapable of effective use. (b) The United Kingdom agrees, in the case of defense articles, other than agricultural commodities, which in the opinion of the President are used up, worn out, destroyed, or otherwise rendered incapable of effective use, to furnish to the United States an equivalent amount of similar defense articles, which, in the opinion of the President, are of a quality, efficiency and relative value substantially equal to the defense articles furnished hereunder to the United Kingdom. (c) The United Kingdom agrees, in return for (i) agricultural commodities, and (ii) other defense articles, services and defense information, furnished to it hereunder and for which the United States has not otherwise received full reimbursement, to furnish to the United States an equivalent in tin, rubber, jute, and other products and commodities -- 0892 produced in the British Empire or elsewhere and which, in the opinion of the President, are needed by the United States. Such products and commodities shall be furnished in such quantities and at such time or times as shall be determined by the President. (d) In lieu of returning or furnishing the defense articles or similar defense articles as provided in paragraphs (a) and (b) above, the United Kingdom may, at its option, furnish or transfer to the United States any raw materials or other property, services, information, facilities, or other consideration or benefits acceptable to the President. To the extent that, during such period or periods , determined by the President, the United States shall not have received pursuant to paragraphs (a), (b), (c) and (d) full reimbursement for the defense articles, services, and defense information furnished to the United Kingdom here- under, the United States shall be entitled to receive or otherwise acquire, and the United Kingdom agrees to furnish or otherwise transfer property, services, information, facilities and other consideration and benefits acceptable to the President. 3. By future agreement, the parties may substitute, in lieu of Section 2, any other payment or repayment in kind or property, or any other direct or indirect benefit to the United States, which the President deems satisfactory. 0893 - 4. The President shall determine the fair value of any property, services, information, facilities or other consideration or benefit received by the United States from the United Kingdom; and the United Kingdom shall be credited therefor on account of the defense articles, services and defense information furnished to the United States hereunder. For any defense article returned to the United States pursuant to paragraph (a) of Section 2 above, the United Kingdom shall receive a credit equal to the value given to such defense article in the schedules now or hereafter to be attached to this Agreement. The parties to this Agreement shall periodically review the status of the accounts arising under this Agreement, and the President may from time to time determine any credits to be given to the United Kingdom by reason of any consi- deration or benefit which the President determines shall have been received by the United States from the United Kingdom. 5. The United Kingdom agrees that it will not, without the consent of the President, transfer title to or possession of any defense article or defense information furnished to the United Kingdom hereunder or permit its use by anyone not an officer, employee, or agent of the United Kingdom. 6. If, as a result of furnishing to the United Kingdom any defense articles or defense information, it 0894 -5is necessary for the United Kingdom to take any action or make any payment in order fully to protect, pursuant to the Act, any of the rights of any citizen of the United States who has patent rights in and to any such defense article or information, the United Kingdom will do so, when so requested by the President. 7. Any defense articles, materials, or other personal property to be returned, furnished, or paid to the United States hereunder, shall be delivered or paid by the United Kingdom at such place or places in the United States, or any place subject to the jurisdiction thereof, as from time to time shall be determined by the President. Any de- fense article or other property, service, information, facility, or other consideration or benefit to which the United States shall become entitled hereunder shall insofar as the rights, powers and privileges of the United States may thereby be affected, be exempt and imsume from any taxes, charges, restrictions, regulations and controls of any nature under the laws of the United Kingdom or any political subdivision thereof. 8. The United States may at any time cease furnishing the defense articles, services and defense information referred to in Section 1 above. Such cessation shall not affect any of the rights, powers, or privileges of the United States or of the President hereunder or of any of the duties, liabilities, or obligations of the United Kingdom, all of which shall continue in effect until the 0895 - United Kingdom shall have fully performed its duties and obligations and discharged its liabilities hereunder. Any default by the United Kingdom in the performance of any of its duties or obligations or in the discharge of its liabilities hereunder shall entitle the United States, by appropriate action to be determined by the President, to enforce its rights, powers, claims and privileges hereunder. 9. The President may exercise any power or authority conferred on him hereunder through such officer or agency as he shall direct for that purpose. The terms "defense article" and "defense information" as used in this Agreement shall have the same moaning as defined in the Act. 10. Any notice under the hand of the President or any officer designated by him shall be deemed and taken as the notice of the United States and the President and shall be sufficient if delivered at the British Embassy at Washington, D.C., or at the office of the Permanent Secretary of the British Treasury in London; and any notice by the United Kingdom shall be sufficient if delivered to the American Embassy in London, or to the Secretary of the Treasury of the United States at the Treasury of the United States in Washington, D.C. Any waiver of any notice required hereunder shall not extend to or affect any subsequent notice or waive any right of the parties to require notice hereunder. 0896 -78. The parties to this Agreement, and the officials signing this Agreement on their behalf, each for itself, himself, or themselves, represent and agree that the execution and delivery of this Agreement have in all respects been duly authorized, and that all acts, conditions and legal formalities which should have been performed and completed prior to the making of this Agreement have been performed and completed as required by, and in conformity with, respectively, the laws of the United States and the United Kingdom. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate at the City of Washington, District of Columbia, this day of , 1941. THE UNITED STATES OF AMERICA By (Title) HIS MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM By (Title) 0897 April 14, 1941 The Secretary gave the original of Mr. Mack's report with the President when he had lunch today. The President was tremendously interested and said he was going to use it at his press conference. 0898 April 11, 1941 MEMORANDUM TO THE SECRETARY: Negotiations have been concluded for the purchase of the first list of equipment and supplies for the British Purchasing Commission, as detailed on the attached sheet. As reported to you orally the remaining items on the list furnished by the British Purchasing Commission have been withdrawn. We have received further requisitions for which purchases will be negotiated promptly upon receipt of priority and production clearances from the Office of Production Management. A requisition for 1,000 rolls of metal screening, specifying shipment from New York April 13, is now in process. The purchase of the supplies for Greece and Yugoslavia will be made upon receipt of notification of allocation of funds which matter is now before the Bureau of the Budget. Clifton E. Mack, Director of Procurement. Att. 0899 LIST OF EQUIPMENT AND SUPPLIES FOR THE BRITISH GOVERNMENT COMMODITY QUANTITY AMOUNT CONTRACTOR Spare Parts for Road Rollers 200 Sets $ 62,008.71 Bituminous Tar Kettles 170 80,750.00 Standard Steel Works 80 208,376.80 Lancaster Iron Works 20 36,380.00 Bitumen Paddle Mixers and Spare Parts Stone Heaters Stone Crushers and Spare Parts 120) Chipping Granulators Bituminous Distributors ) and Spare Parts White Mfg. Co. Diamond Iron Works, Inc. 15) 18,930.00 6 Portable Air Compressors 50 Tractors 32) raders 11) Tractors 13) Graders 423,506.16 Huber Mfg. Co. 6) Tractor Winches 18 Road Graders 18) Tractors 36) E. D. Etnyre Co. 108,250.00 Worthington Pump & Machinery Corp. 250,249.43 Caterpillar Tractor Co. 123,550.46 Caterpillar Tractor Co. 29,520.00 Willimette Hyster Co. 128,124.50 Caterpillar Tractor Co. Hewitt Rubber Co. Fire Hose 600,900 Ft. 210,000.00 Fire Hose 250,000 Ft. 87,500.00 Quaker Rubber Corp. Fire Hose 50,000-Ft. 17,500.00 Whitehead Bros. Rubber Co. $1,784,646.06 0900 April 17, 1941 At Cabinet today the President said he had a talk with Mr. Hunter, the new head of WPA, and I gathered the President had only expected to reduce the cost of WPA by some $150,000,000. Nobody said a word. I then spoke up and suggested that the Army and Navy pay for all work done for them out of their regular appropriations and that WPA confine itself to giving jobs to men out of work. To my amaze- ment the President said, "That's fine. We can cut the WPA appropriation that way around $900,000,000. Then, of course, Stimson and Knox spoke up and backed me up. But if I had not spoke up the thing would have gone by the same as it always has. I also pointed out that if we didn't get WPA down now to a basis of only giving jobs to people who are out of work, we will never break the grip which WPA has on us. 0901 April 21, 1941 As I went in to have lunch with the President today, Lauch Currie came out of the President's office. The President said to me, "We have to do something for the Chinese in order to save their face." He said, "I want you to make that $50,000,000 loan right away." I did not say anything for a few minutes because I wanted a chance to get control of myself. Then I said, "Well, Mr. President, that is just like throwing it away." He said, "I know but it is a question of face saving.' Then Mr. Hull called him up on the phone and made a similar request and also one about the Argentine. I was so upset and I knew that I was showing it, so I decided to tell the President why. I said, "Mr. President, I just want to tell you why I am upset at your request and why my back is up." I said, "Next to you, nobody in Washington has tried to do more for the Chinese than I have, but I can't help but get angry when I am put under pressure by people like Tommy Corcoran." I told the President that either Tom Corcoran or his brother is getting $30,000 to represent the Chinese and I said that besides that Lauch Currie was paid by them to go to China. This upset the President very much, especially the part about Tom Corcoran. I don't believe he ever heard about it before. He then went into a long story and told me how Tom Corcoran's father had borrowed $90,000 from Tom Corcoran's brother's wife's father, and when they pressed them for the money, Tom Corcoran had gone on the note. The President knew about Corcoran's being retained by Mr. Kayser, receiving $100,000, and he knew about Tom saying he was going to make a million in a year. The President then said, "When you see the Chinese I wish you would tell them that it is not necessary for them to hire special representation in Washington." So I said, "If you don't mind, I would like to put it a little differently. I am going to tell them that through their hiring special representation, it has simply slowed me up and made me be much more careful than I would be ordinarily. The President said, "Fine. You do that." 0902 -2The President then said, "I'll tell you what you do, Henry. This is a matter of face saving. Let them have the $50,000,000, but get them to give you their word of honor that they will not use more than $5,000,000 a month over the $20,000,000." I told him that I would go along with that. The President really tries to be fair, and I wanted to help him with that. I then said, "Well, Mr. President, as long as you told me about this, I want to get another thing off my chest. I want to tell you about Marriner Eccles being an officer of the Utah Construction Company, and getting $6,000 a year." The President said, "I think that's terrible. He said, If Marriner Eccles owned stock before he came down here and subsequently the company got a government contract, one couldn't say very much about that, but for him to keep on taking salary as an officer, I think it is terrible." The President asked me whether Watson or Early knew Eccles better, and I told him that perhaps Early did. The President said, "I am going to have Early send for him and give him a talking to and say, 'The White House hears, " He then buzzed for Early, but Early unfortunately was not there. However, I got him to write it down. I then gave him these figures on the tanks and he said, "You know, Henry, I have been trying to have Barney Baruch to get figures for me like you used to give me which would show how much revenue we expected to get and how much we would need during the year, etc., but Barney has been unable to get them from OPM." So I said, "Well, I will get them for you out of the Army." He didn't give me very much encouragement, but he didn't say no. I said, 'I have got to have those kind of figures to estimate expenditures." Well, to my surprise, the President kept the figures on the tanks. He said, "I am going to send these over to OPM, and then ask them why I can't get figures like that from them." The President said OPM would never find out where the figures came from and I said that I didn't care if they did. Then I also gave him the whole new set of charts showing production of each company, and he kept those, too. 0903 -3I tried my best to get over to the President that when he says we aren't doing well enough on production, and then OPM says everything is lovely that you can't expect the people to rise up and demand quicker and better production. However, I just couldn't seem to get to first base although I tried awfully hard. Then he said, "The trouble with all of these production figures and delivery figures is this - take the case of the Navy. The Navy says it has a contract to deliver and build a destroyer in 30 months. They build it in 16 months and then say, 'Look how smart we are. He said, "If we ride these people too hard on deliveries, they will simply exaggerate the delivery date or prolong the delivery time so that they can come within the time limit." Of course, I don't agree with him, and I am going to get Haas to make some more of these charts for me and then keep feeding them to him. But this is either the second or third time I have gone after this, and maybe if I keep on I will get somewhere. COME Medium Tanks - Scheduled and Actual Deliveries 0904 Jan. Feb. Mar, : : : : Monthly Total Actual Scheduled Deficiency (-) OF surplas (+) 6 o 6 Aray & Havy Actual Scholaled Deficiency (-) or surplus (+) 6 6 7 - 20 15 -14 6 7 0 15 20 +6 -8 -14 0 0 0 British Actual Scheduled Deficiency (-) or surplus (+) 0 0 0 0 0 0 Commissive Total Actual Scheduled Deficiency (-) or surplus (+) Aray & Herry Actual Scheduled Deficiency (-) or surplus (+) 12 19 25 25 40 60 -13 -21 -35 12 19 25 25 40 60 -13 -21 -33 British Actual Scheduled Deficiency (-) or surplus (+) Office of the Secretary of the Treasury, Division of Research and Statistics. 0 0 0 0 0 0 0 0 0 April 21, 1941. Source: Statistics Branch, Office of the Under Secretary of War, and British Purchasing Commission. Franklin Reosevelt Library per T.D. 160 RHP8-3-71 ) CONCIDENTIAL 0905 Light Tanks V - Scheduled and Actual Deliveries Mar. Feb. Jan. : Monthly Total Actual Scheduled 3 25 Deficiency (-) OF surplus (+) 32 16 28 72 4 -56 Army and Navy Actual 16 Scheduled Deficiency (-) or surplus (+) 72 + -22 -56 British Astual Scheduled Deficiency (-) or surplus (+) 0 0 0 0 0 0 0 0 0 351 383 363 391 -12 -8 Oumulative Total Actual Salisduled Deficiency (-) or supplue (+) Army and Navy Actual Scheduled Deficiency (-) OF surplus (+) 391 383 363 391 -12 -s British Actual Scheduled Deficiency (-) or surplus (+) 0 0 0 0 0 0 0 0 0 Office of the Secretary of the Treasury. Division of Research and Statistics. April 21, 1941. Source: Statistics Branch, Office of the Under Secretary of War, and British Purchasing Commission. V Includes combat ears. Franklin B. Roosevelt Library DEAL pexT.D. 160 RHP8-3-71 0906 DELIVERIES OF PURSUIT PLANES C DURT TOTAL Franklin 3. loverall Merry By Company, Two Week Periods June 9. 1940 to Date 1940 1941 NUMBER DECLASSIFIER 1940 1941 NUMBER CURTISS-WRIGHT BUFFALO BREWSTER 110 40 100 30 TOTAL 90 20 TOTALN 80 10 AN BRITISH 0 70 30 GRUMMAN 60 20 TOTAL 50 10 40 rhww BRITISH 0 30 30 REPUBLIC BRITISH 20 20 TOTAL 10 10 MANA BRITISH N o $ 0 0 J A D N s A 20 D o 20 CURTISS-WRIGHT - ST. Louis NORTH AMERICAN 10 10 TOTAL TOTAL BRITISH - BRITISH 0 0 20 20 BELL LOCKHEED 10 10 TOTAL BRITISH BRITISHA TOTAL 0 F 0 o A J Division / and 1940 M Office of the Secretary of the Treasury 1941 A 1940 1941 I - 170 OTHIATE DELIVERIES OF BOMBERS 907 v COME Resents in - By Company, Two Week Periods June 9, 1940 to Date DECLARRIER per T.O.160 1940 1941 NUMBER 1940 1941 NUMBER DOUGLAS LOCKHEED 50 60 40 50 TOTAL TOTAL 30 40 20 30 10 20 +BRITISH and 0 10 -BRITISH 40 GLENN L. MARTIN 0 30 40 NORTH AMERICAN 20 30 Wth TOTAL 10 TOTAL 20 BRITISH 0 40 10 BRITISH CONSOL IDATED m 0 30 30 BOEING 20 20 TOTAL 10 10 TOTAL And BRITISH 0 0 o A CURTISS-WRIGHT TOTAL VOUGHT-SIKORSKY N 10 BRITISH $ 20 o 20 X TOTAL 10 BRITISH 0 0 20 20 NORTHRUP VULTEE TOTAL 10 10 M - BRITISH 0 0 J Office of the Secretary of the Treasury Dividen - - Refere 1941 J 1940 TOTAL A BRITISH 1940 1941 I 169 OTHICTLY COMPANY 908 PARKING CONTINUED DELIVERIES OF ENGINES OVER 1000 HORSE POWER Premise 3. Residents DECLASSIFIER per T.0.160 By Company, Two Week Periods June 9. 1940 to Date 1940 1941 J NUMBER NUMBER WRIGHT 500 500 400 400 TOTAL 300 300 200 200 BRITISH 100 100 0 0 N D 500 500 PRATT AND WHITNEY 400 400 TOTAL 300 300 200 200 100 100 BRITISH 0 0 D o N 300 300 ALLISON 200 200 MW TOTAL 100 100 BRITISH+ a 0 0 J M 0 $ A J J J D N o $ A J 1940 1941 Office of the Secretary of the Treasury Division - 168 0910 Sunday, April 20, 1941 The President called me at 9:30 Sunday night with of Canada next to and my should the Prime Minister out asked Prime Minister advice sitting give him, statement tonight or tomorrow in Canada. He put the Prime Minister on the phone and he then read the statement which incorporated my suggestion to him of last week. The Prime Minister said he might be criticized for being out of the country and must return to Canada; therefore, could not see me in Washington. I advised him to give statement out tonight with the result that he did. NEW YORK TIMES - April 21, 1941 JOINT STATEMENT The joint statement read as fol- U.S. JOINS CANADA Among other important matters. the President and the Prime Mia TO SPEED OUTPUT ister discussed measures by which the most prompt and of fective utilization might be made OF AID TO BRITAIN of the productive facilities of North America for the purpose both of local and hemisphere de- President and Prime Minister fense and of the assistance which Agree on Cooperative Steps both Canada and the United States are rendering to Great in addition to their own program at Hyde Park Parley Britain and the other democracies. It was agreed as a general principle that in mobilizing the A CONTINENTAL EFFORT resources of this continent each country should provide the other with the defense articles which We in Turn Will Obtain Some it's best able to produce, and, Vital Materials-Financial above all, produce quickly, and Help on Dominion Buying be coordinated to this end. While Canada has expended its By FRANK L. KLUCKHOHN since the beginning of the war, that production programs should productive capacity manyfold Special to THE New YORK TIMES HYDE PARK, N. Y., April 20- nounced tonight in a joint statenent by President Roosevelt and other hand, there is existing and potential capacity in Canada for the speedy production of certain kinds of munitions, strategic ma. Canada, The statement was made public after a conference between the two it Hyde Park house which lasted terials, aluminum and ships, which are urgently required by the United States for its own purposes. nearly seven hours. Under the agreement Canada will obtain certain defense articles from the United States and will in turn produce certain kinds of "muni- While exact estimates cannot yet be made, it is hoped that during the next twelve months Canada can supply the United States with between $200,000,000 and tions, strategic materials, aluminum $300,000,000 worth of such defense States. articles. This is a small fraction the total defense program of United States, but many of th articles to be provided are of and ships" which it is stated are urgently required by the United The statement declares that during the next twelve months Canada can supply the United States with $200,000,000 to $300,000,000 worth of such defense articles. The United States agrees to help Canada fl. nance the purchase of the materials It wants from the United States Technical and financial details will be worked out later. This agreement is expected to make for speedier production of the sinewa of war which Britain so urgently needs. It is obvious that the collaboration between the United States and Britain's largest dominion which was announced tonight is the most far-reaching of its kind ever made between the United States and another New World nation. It will not only permit Canada to obtain the financing barred for a belligenrent under the Neutrality Act, but it will provide for a prac- tical merging, as far as the war effort is concerned, of economics of the two nations. Since Canada will technically be obtaining money, United States dollars, in payment for materials delivered no loan in violation of the Neutrality Act seems to be involved Dressed in grey suit and carrying a cane, Mr. Mackenzie King stepped from his private car at Poughkeep sie at 2:34 P. M. to be met by Wil- the United States, and purchases be even greater in the coming year than in the past On the Mackenzie King, Prime Minister of ter. liam D. Hassett. Presidential secre- in the production of war materials for embattled Britain was an general-principles which have been agreed upon between the President and the Prime Minis tary. He was driven immediately to the Hyde Park estate, which he did of this character by Canada will the United States for cooperation talls will be worked out as soon as possible in accordateewuthe there are still numerous defense articles which it must obtain in An agreement between Canada and The technical and financial de- of th vital imoprance. In addition, it is of great importance to the economic and financial relations between the two countries that pay- ment by the United States for these supplies will materially assist Canada in meeting part of the cost of Canadian defense pur- chases in United States In so far as Canada, defense purchases in the United States consist of component parts to be used in equipment and munitions which Canada is producing for not leave until shortly before his departure at 9 P. M. for Ottawa The President himself is scheduled to be back at his desk in Washington tomorrow morning. Mr. Mackenzie King graciously granted the requests of tographers upon his arrival Poughkeepale but he told reporte that "I will have nothing to say. Vacation Cut Short for Talks By The Associated Press HYDE PARK, N. Y., April 20- Prime Minister Mackenzie King of Canada cut short a vacation on the Virginia seashore to come to Hyde Park for his conference today with President Roosevelt Greebland a Concern of Canada By The United Press HYDE PARK, April Among hemispheric problems growing out of Canada's war effort which possi- bly came within the preview of the Mackenzie King-Roosevelt conference today was that of Greenland. Under the virtual protectorate which the United States has assert ed over this Danish possession, Can- ada, as any of the other New World nations, has full rights to utilize American bases on Greenland. Since the German war zone ex- tends to within three miles of Greenland and Greenland harbors may become of immense strategic importance in maintaining the 'bridge of ships" over which Amer- Ican material aid is flowing to Brit ain. this subject may have been one Great Britain, it was also agreed of the major problems reviewed in that Great Britain will obtain today's conference. these parts under the lease-lend act and forward them to Canada ter's arrival this afternoon, Mr. Until the Canadian Prime Minis for inclusion arti- Roosevelt had, been seeking com- clea. on his own private reforestation plete relaxation in his home here He was supervising Spring planting project on the 1.300-acre estate, and spent much of the morning in the Franklin D. Roosevelt Library making planedomplesing his private papers in the Federal archives there. 0911 0912 April 25, 1941 H.M.Jr: At Cabinet today, I told the President that the Chinese were asking for three things. One, the fifty million dollar funding through in toto. That they get armament under the Lease-Lend; and three, that the Chinese funds be frozen, and that I was ready to recommend that the total fifty million dollars be advanced without any restrictions, particularly in view of the fact that K. P. Chen had been made Chairman of the committee to handle it. The President seemed to be confused on it, but I repeated my recommendations and I said I wanted to do it at five o'clock this afternoon; and he said, "All right." He gave me the impression he thought it had already been done. In regard to the Lend-Lease, he also wasn't familiar with that, but said he was sure that Hopkins would take care of it. On freezing the funds of China, Mr. Hull said that that matter was entirely in the hands of Dean Acheson. I then read Cable No. 467, Matthews, paragraph on page two beginning, "According to my informant, ample hidden dollar assets are held in the United States by the Reichsbank, mostly through 0913 -2Spanish and Swiss channels, which assets are sufficient for the present needs of Germany. I was again asked by him why the United States does not block the balances of Germany and Italy in the United States. The French find it very difficult to understand why this has not been done, If pointing out that the French could not understand why we didn't freeze German and Italian funds. Mr. Hull made the surprising remark that he had gotten the impression that some people didn't think he was handling that matter in the proper way, and therefore he turned the entire thing over to Dean Acheson. In other words, he washed his hands of the whole thing, and that Dean Acheson was in touch with the Attorney General and the Attorney General could have called the President on what is being done. I gathered that they were doing something about registering the property of aliens, but nothing else to speak of. I doubt if anything will be done. I then brought up the question that Frank Knox had reported that both Forrestal and Harriman had sent word that the British Admiralty questioned whether their crews could run Coast Guard cutters on account of the electric drive. I reported that both Captain Palliser and Admiral Pott, Naval Attache of the British Embassy, reported that they were satisfied that the British crews could run our cutters, and then read a report from Captain Dempwolf saying that the first tests on the Pontchartrain and Saranac were satisfactory. I then wrote the President a little note saying had he heard that the first Boeing 17 had made 0914 -3a successful raid over Germany at 33,000 feet and had dumped a full load of bombs and that the English were simply delighted, because this was using a new technique; namely, flying at a height and a speed at which they could not be reached and that they would dump their loads and run rather than doing what they had heretofore done, using very heavily armored and gunned English planes and going in at low levels and trying to fight their way through. The President had not heard about it, but he told the Cabinet and Mr. Stimson said he had gotten a cable on it just before he came over He told me later that at this height there is nothing the Germans have that can reach the Boeings. Sir Henry Self was my informant, and he tells me that there are ten of these finished, waiting at Seattle for some reason or other. These are part of the twenty which I originally got for the English in exchange for motors that our Army needed. It seems inexcusable that half of them should be still lying in Seattle instead of being in England; but at least it is encouraging to find out that we have sent them something which is better than what the Germans have got. 0915 April 25, 1941. 12:13 P.M. Following phoned by Coast Guard: From: Commander New York District Action: Commandant, U. S. Coast Guard Confidential - For Admiral Waesche PONCHARTRAIN and SARANAC returned Navy Yard, New York, 0930 (9:30 A.M.). Trial run very successful. British crews caught on quickly, stood watches, handled machinery and guns satisfactorily. [of The Lieutenant Commander Grogan reports Captain Palliser Malaya concurs. TAHOE and MENDOTA expect depart 1400 (2:00 P.M.) today for trials followed later by CHELAN. Plan final transfer four vessels, possibly five, to British 1030 (10:30 A.M.) April 30. (Signed) Captain Dempwolf. 0916 HOTEL PENNSYLVANIA NEW YORK 24 hi april 41 hear adinal Waesche, M reply to your vectal question the trausfer of the CrusTguard Cutters is proceeding kept Jack factority, + Subject to the Incree of Iea Trials was in provess I anticipate keinn ready to take ner the first four nexT beducoday 30th april your faithfully Captain RN. Cannet (COPY) 24th April 41. HOTEL PENNSYLVANIA NEW YORK Dear Admiral Waesche: In reply to your verbal question the transfer of the Coast Guard cutters is proceeding most satisfactorily, and subject to the success of sea trials now in progress, I anticipate being ready to take over the first four next Wednesday, 30th April. Yours faithfully A.F.E. Palliser Captain R.N. Lad Halifar Tdnical Pott 0917 09.8 COPY FOR SECRETARY Cames C 0 P 0919 Y PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embassy, (Paris) Vichy DATE: April 21, 1941, 4 p.m. NO. : 467 FOR THE TREASURY FROM MATTHEWS. Last evening I saw Couve de Murville. He was down for a day from Wiesbaden and Paris. He told me that the Germans have a total of approximately sixty billion france in unexpended balances with the Bank of France at present, and there is no indication that they have any important plans for using any considerable amount of the balances. He did not seem to think it likely that the French could get any reduction in the daily tribute of four hundred million france which they must give to the Germans. Couve said that the note circulation of the Bank of France is approximately 225 billion france at present. Couve maintains that much of the gold belonging to the Belgians is still in Africa, and implied that not much of the gold is being transported to France by airplane, but that other means of transportation are being used. There is a bare possibility that the United States could cut off the transfer of the gold from Africa to France if the United States required a pledge that no gold would be moved out of -2- 0920 of Africa by any means, in return for supplying the small quantities of gasoline which Dakar requested for commercial planes of Air France. My informant maintains that the French refused to deliver the Polish gold. As for the gold belonging to France, he maintains that Germany has never made a formal demand for its transfer. He stated that the authorities of the Reichabank have not made unreasonable demands of the Bank of France. Also, when the German military wanted to have Janssen of the Bank of Belgium removed from office, the Reichsbank people had spoken in his defense. According to my informant, ample hidden dollar assets are held in the United States by the Reichabank, mostly through Spanish and Swiss channels, which assets are sufficient for the present needs of Germany. I was again asked by him why the United States does not block the balances of Germany and Italy in the United States. The French find it very difficult to understand why this has not been done. \ Better organization to work for German account is slowly developing for French industry in the occupied zone, and a more adequate supply of raw materials for the purpose is being furnished, according to my informant. This confirms impressions I have received from other sources, among them Auboin of the BIS, who passed through Vichy a few 0921 -3- few days ago. The average rate of French production is 30 to 35 percent of normal, Couve estimates, as compared with the figure two months ago of 15 to 20 percent. Practically all economic and financial negotiations have been transferred from Wiesbaden to Paris because of suspicion on the part of the German delegates at Wiesbaden to single out their opposite numbers in Paris. Therefore de Murville spends more of his time at Paris now than he does at Wiesbaden. He told me, incidentally, that the Germans are obviously becoming much more suspicious of French negotiations with our country, and the fact that the Germans look on the United States "as an enemy" is not concealed. LEAHY EA:LWW Copy: bj :4-23-41 0922 April 28, 1941 Lunch with the President. Asked him about the broadcast. His only comment was that it was done by a young professional script writer and was too long. Only comment he had to make. Said to take it up with Steve Early. I said to the President, "I am sorry I could not be with you Thursday, but I was up on the Hill testifying. And he said, "Yes, how did it go? I said, "I think it went all right. How did you think it went?' He said, "Very well." I said, "Did you read my statement?" He said, "Yes." So I said, When are you going to make a public statement backing me up on the taxes?' He said, Well, I will tell you what I will do. He said, "If you will give me a letter written to Bob Doughton, I will send it to him telling him I hope that they will pass the Bill and outlining what the Bill stands for and what the Administration stands for. And I said, "Can I add something about saving money?" He said, "Absolutely!" He said, "I want you to put in the letter, though, that we are cutting down on Public Works and building up a reserve of projects for when the war is over. I showed the President George Haas' statistics and the President said, "That's all right, but is this the complete tank with ammunition and guns ready to go into I said, action?" He said, "If it isn't, it's no good. "If that's what you are asking for, I don't think we have any tanks ready, but I will find out.' I then took up the question of Mrs. White going on this trip and the President approved it. I also let him read the Prime Minister of Canada's letter and his comment was, "Well, you know, Henry, you and I do this kind of thing every day and they don't seem important to us, but to the Prime Minister of Canada this was 0923 -2- very important and that's why I was so indifferent to it," he said, 11 'and perfectly willing to let the Prime Minister decide as to the publicity and all." 00o-00o-00o 0924 April 28, 1941 My dear Mr. President: At lunch today you asked me to write you a memorandum of the conversation that we had. I asked you what you thought of the idea of having the Queen of England or Lady Reading make a broadcast to the American people for food for the undernourished women and children of England. You made a counter-suggestion; namely, that the broadcast be made in the United States by Mrs. Franklin D. Roosevelt making an appeal for food for the women and children of England; Mr. Hull making a ten-minute talk on democracy in general and the saving of English democracy particularly, and Mr. Knudsen talking ten minutes on the need of food for the munitions workers of England. My own thought is that it is too much to expect the English people to fight on empty stomachs, and that condition is not very far off. It is my belief that we must transfer a great number of our ships at once to the English flag for the transportation of food, and a broadcast of the kind that you and I discussed would help mold public opinion. Yours sincerely, /s/ Henry- The President, The White House. 925 May 6, 1941 0925 Original given to the President at the 11:30 meeting in the library of the White House. TO+ - The Secretary Verwill be a 11:30 meeting in the library while House of the praper, this In or ring. Securaty Hull " gazewillan " " Knot Several man shall " arnold (adminal stark0926 From: LIEUT. STEPHENS 0927 Memorandu for the President That Rat Materials will Germany Gain from the Balkane and what may she Gain from a Conquest of the Meditorranean? 1. Petrolena -- The Meditorranean Basin would adequately supply Germay's needs. Germany's (and occupied territories) annual wertime requirements: from 100 to 125 million barrels, of which only 30 to 40 million barrels (including synthetic) are produced in Germany and Poland. Rumania produces about 45 million barrels, but not all of it can yet be transferred out of Rumania because of lack of transport facilities. Iran and Iraq produce over 100 million barrels a year. Over one-half of their output could be transported to Genea and Marseilles by the Italian tanker fleet if the British fiest were forced out of the Mediterramean. 2. Cotton -- Egret alone would supply all the raw cotton Germany needs. Germany, in 1938, imported 660 million pounds of cotton. Egypt, in the same year, exported over 770 million pounds of cotton. (Germany would also get substantial amounts of wool from the Mediterranean countries but not enough to meet her requirements.) 3. Fats and 011s -- Conquest of the Halkan and Meditorraneaa areas will abbotentially improve Germany's position OR those materials but whether it will completely satisfy their vital requirements cannot be determined on the basis of the Information which we now have available Germany has already been obtaining the bulk of the Balkan exportable surplus of oils and fats. By plandering the inventories and livestock reserves, she can add small quantities to her supply during the coming months. 0928 2 The Mediterranean Basia does not have an exportable surplus of fats, and though its olive oil output is large, we do not believe it is large enough to satisfy Germany's requirements of edible oils. Should Germany slaughter a large portion of the existing livestock is this area, she would acquire a large supply of industrial fats for the production of nitro-glycerin, other munitions, and soaps. (North Africa and the Near East have over 15 million head of cattle and 60 million sheep. ) 4. Perro-Allove -- The Meditorranean Basin would help Germany's situation. but would not apply all her deficiencies. Germany has already been getting Turkey's chromium output, which amounts to over 200,000 tone annually and is more than Germany needs. She could make up one-half her manganese deficiency from Turkey and North Africa -- and would gain more than she needs if she conquered as far south as the Gold Coast. Germany could get some tin in Nigeria if she gets that far -- perhaps 11,000 tons. Neither the Balkans nor the Mediterranean areas have significant quantities of tungsten, molybdenum, or nickel. 5. Copper -- The Meditorranean Basin would help. but not nearly solve. Germanz's conner problem. In 1938 Germany imported over 270,000 tone of copper and 650,000 tons of copper ore. Yugoslavia produces 40,000 tons of copper, but has already been exporting a substantial portion of her supply to Germany. The remainder will now become available. Cyprus produces about 30,000 tone of copper (in ore form). 6. Gitrous fruits. grapes. dates. tobacco. and wine are produced in largé countifies in the Meditorranean Basia and would be very useful to Germany. HDW/jm 5/5/41 0929 May 17, 1941 When I saw the President at six o'clock this evening, he said, "I am waiting to be pushed into this situation." He had previously said that he thought something might happen at any time, and I gathered that he wanted to be pushed into the war rather than lead us into it. This is no doubt what he meant. Franklin 1. Keesevelt Mbrary DECLASSIFIER per T.O. 160 RHP 8-3-71 May 22, 1941 4:30 p.m. 0930 War Cabinet Meeting with the President Present: Secretary Hull Secretary Stimson Secretary Knox Secretary Morgenthau General Marshall Admiral Stark Head of the Naval War College Several Army and Navy Officers Harry Hopkins The President first asked the group's advice as to whether he should announce next Tuesday in his radio talk that he has been bringing a considerable proportion of the Pacific Fleet around to the Atlantic. Both Stimson and Knox firmly advised against it. The President said that now that Knox had such good cooperation- from the papers perhaps the press wouldn't print it. Knox suggested that the best way would be to pass it around by word of mouth. Both Stimson and Knox were very emphatic that the President should not announce it, and I don't think that he will. The President then asked what plans the Army and Navy had for taking over the Azores. The Army and Navy said they had a plan but they felt that it wouldn't be a question of taking over. They might actually have to fight for it because they believed that the Portuguese would fight for any base, even against troops from the United States. The Army and Navy officials, en masse, thought that it was very important that we take not only all of the Azores, but also the Cape Verde Islands, and it would take 25,000 troops at each, or a total of 50,000, and they should be prepared to fight both when landing and after they had landed. The President asked how long it would take to get ready, and Admiral Stark said, "Three months," and the President said, "We've got to be ready in one month." I gather that Stark has only about four vessels. He needs 57, and he's been having considerable trouble in getting these because Admiral Jerry Land of the Maritime Commission won't move unless he gets something in writing from the President. The President told Hopkins to get Land and Stark together after the meeting, and bring him some- thing in the morning. Knox said under his breath - he was sitting next to me - "The only way you can get Land to do anything is to hit him over the head with an axe." -2- 0931 I was present when both Stark and Marshall said that this was a very difficult job and it must be done well. It must be successful in order to impress anybody. Marshall said the troops were ready, but the whole thing came down to the question of transports. I gathered that they would take the First Division of the Marines and the First Division of the Army. As the discussion went along, and Stark kept telling how hard the plan was, although Knox did say he would see that they were ready, the President sort of weakened and became indecisive. The President's attitude toward Stark certainly must have been enraging because every time the President asked him anything, he did it with a sort of a mocking or sneering laugh, and nobody seemed to laugh with the President. All the rest of us were very, very serious. I was disappointed that the President let himself be argued out of the thing. The question came up about our relations with South America, because it seems we didn't take three or four of the best ships which are on the run to South America. One of the Army or Navy officials said, "Well, the best thing we could do for South America would be to make a successful landing some- where, and that is far more important than the four ships that went down to South America." Through all of this discussion Cordell Hull took practically no part and neither did I. The President's idea is that there's a very good likeli- hood that Germany will move into Spain and Portugal at any moment, and when they do, then he wants to take over these islands and wants to be ready. I think he's perfectly right. After listening to the discussion yesterday, if I were in his place, I would have just issued an order and told the men to get ready. I was impressed with the tremendous undertaking and that we're not ready, and it would be next to impossible to get ready in a month because the ships to carry the troops have not been prepared for the job. The meeting lasted about an hour and a half. They also mentioned that the English have about 22,000 troops in Iceland now, which they'r going to take over if we get into the war. There's considerable criticism of the way the English run the airplanes over from Takoradi. There are about 150 planes waiting at Takoradi. 0932 June 4, 1941 At lunch with the President today he said that Chief Justice Hughes had resigned a year earlier than he expected him to. The President then said he thought there was no reason why in his third term he had to pay particular atten- tion to politics and that, therefore, he was giving careful consideration to the appointment of Harlan Stone for Chief Justice, and that he was by far the best man for the posi- tion. I said that Mrs. Morgenthau and I thought very highly of Justice Stone and Mrs. Stone, and I hoped that he would make that appointment. I said that it certainly would slay such people as Burt Wheeler who had fought the President so hard in the Court fight, and that suggestion seemed to please the President. I sincerely hope that he will appoint Stone. This gave me an opening to ask him what he thought of putting Hull on the Court and making Stimson Secretary of State. The President said both suggestions were not good. To my surprise, he said Stimson did not prepare his cases well, that he came in to see the President often unprepared, and that while Hull was slow he prepared his facts very carefully. The President said that he was not at all sure that Stimson was right in the Manchuria incident and that Hull's tactics might have been better at that time. The President's comments certainly surprised me. We then left that subject, and I went on and gave the President my suggestion that the airplanes at the Bermuda base should be under the control of the Navy. The President thought well of this, but then went on to tell me about his idea. It seems that last fall at Philadelphia he saw a secret device at the Navy Yard where they have a turntable, and put a plane on it and with some kind of a gun, similar to the one they have on a catapult, they shoot the plane off into the wind. He thought that this might be used at Bermuda. -2- 0933 I tried to get the President interested in more long distance Navy flying boats. I think I made an impression on him on my whole program for Bermuda, which I dictated to late Mrs. Klotz when I came back. I left with the President the most recent copy of the orders that have been placed for two and four engine Army and Navy bombers; also the estimate of what the Army and Navy are going to spend in Bermuda. The President said he thought the Army ought to go ahead and finish the air base at Bermuda because they might need it as a stepping stone for troop carrying planes. I thought this could be done with large flying boats, but I don't think I made any impression on him. I don't think the President is giving any original thought to this idea, and is just thinking along the lines of what has been successful for the Germans. My whole thought is that we could do it with flying boats without any air base, and not build an airfield that the Germans might some day use. I am positive that we could do the whole thing with flying boats, and keep the whole thing co-ordinated under the Commander-in-Chief of the Atlantic Fleet. The President is giving a lot of thought to the organization of the Expeditionary Force to the Azores, Iceland, and Cape Verde Islands. He is now thinking of four Expeditionary Forces of 25,000 each, one of which is to be in reserve. All of them are to be ready within three or four months, and the first of them is to be ready in one month, starting ten days ago. The President's whole interest today is in the Atlantic Fleet and getting first to these various outlying islands. He never mentioned any domestic matters to me. The President said he had been trying to think of what Mussolini and Hitler talked about, and he said if he had to make a guess he would say they discussed the various moves they might make. His guess is that they have decided not to attack England this summer, and to go ahead in a desultory way in Syria because this is the bad season in which to try to advance in the region of the Suez Canal. Therefore, he 0934 -3thinks they will take Spain and Portugal and cross over into Africa this summer. I told him my guess was that they would try to take England this summer as they realize it would be this summer or never. I found the President very well. He tells me his red corpuscles are practically back to normal. His mind seems clear, and I would say that he seems less harassed and worried than I have seen him in a long time. 6935 ANALYSIS OF FUNDO ALLOTTED FOR IMPRESS ACTIVITIES AT Allotemite $17,072,500 9,675,000 Army Navy Nermarked but not alletted 1,309,786 Mary Total authorised Appropriation $28,337,286 Contract authorization Total Purpose Area Alletments: Beorgency Fund for the President, War (alleteent to Var Department) 1940-42 $ 100,000 $ 100,000 For assembly, organisation and transportation of field parties: housing and utilities for advance parties; expenses of currey parties in the field. spoing. During. materials and investigation; preparation of plans and specifications. Reergency Fund for the President, Var (alletment to Var Department) 1940-42 2,500,000 2,500,000 For assembly. organisation end transportation of field parties: housing and utilities for advance parties; expenses of currey parties is the field. sapping. bering. materials and investigations preparation of plane and specifications construction operations with priority to air fields. Fund for the President, Nevy (alleteent to Var Department) 1940-41 $ 20,000 20,000 Surveys, berings and miscellaneous investigations and all insidental work is connection therevith on navel and air bases. 296.500 296.500 For assembly. organisation and transportation of field parties; housing and utilities for advance parties; expenses of survey parties is the field. mapping. Dering. materials and investigations preparation of plane and specifications. 775,000 775,000 For assembly. organization and transportation of field parties: housing and utilities for advents parties: expenses of curvey parties is the field, sapping. boring. materials and investigation: preparation of please and specifications: construction operations Fund for the President, War (alletment to War Department) 1940-42 Reorgency Fund for the President. Mar (alletment to Year Department) 1940-42 with priority to air fields. Military construction. defense installations, 1941-42 Total Army allotments 13,381,000 $14,472,500 13,381,000 $2,600,000 $17,072,500 For construction of air field, housing. facilities and utilities. storage. harbor defease. aircraft warning and ratio facilities. law Accreariation Alleteman Anorgency Pend for the President. Nevy (alletment to Mary) 1940-42 9.150.000 Aviation share familities - Partial east of items approved extitive of - - for payment is - wish - products - presention of work. Anorgeany Fund for the President, Nevy (allotment to Havy) 1940-42 225,000 2/ Architectural services - Company. Naval Air Station, Bermale 500,000 Total Many Collateral expense items (mehine teels and equipment). 9,875,000 Researcher but not allosses. Amergency Fund for the President. Many (allotment to Mary) 3/ Naval Air Station. Bermada 3/ Total Navy. carmarked Total Newy alletments and funds Source: 1/ 789.786 600.000 1,309,786 $11,264,786 Dureas of Accounts. Treasury Department. Does not include such items as pay of Army. Army transportation. travel of Aray. etc. which cannot be segregated. Initial alletment made February 24, 194. Marmarked but not allotted. June 2. 1941. Franklin D. Roosevelt Library DEOLASSIFIER T.D.16D RMP8.3-7 0936 ENGINE BOMBERS ATRIOTLY OTHOTLY CONTIDUNTIAL Unfilled 2 7 6 11 140 5 2 1,176 Aug. 1 2 Total British Empire 9 205 5 Total U. S. Navy July 5 971 1943 11 12 21 11 12 21 18 17 27 Sept. Oct. Nov. Dec. Jan Feb. 35 43 58 19 35 43 23 23 23 23 23 23 42 58 Apr. 87 87 86 19 Mar. June July 86 88 91 12 15 98 May Aug. Sept. Oct. Nov. 82 37 36 33 18 21 21 21 21 103 109 103 58 57 54 103 58 57 54 Dec. Jan. Feb. 21 21 10 21 21 10 21 21 10 Mar. Apr. May 79 89 80 58 18 93 96 7 June 25-31 1 1941 Total U. 8. Army 1942 1941 May 3 May 24, 6 orders* and model 9 class of purchaser Total U. S. Aray and Navy May 24, 1941, and Estimated Deliveries, by Months Estimated deliveries 5 Company. Unfilled Ordere* Total South America Total Other Foreign 140 18 7 2 Total Foreign Total U. 3. Commercial Total Unclassified GRAND TOTAL 1,316 13 66 76 96 103 109 89 93 98 87 50 50 50 55 50 50 50 50 50 50 36 BOXING AIRCRAFT 00. U. S. Army 12 30 25 30 10 13 10 13 40 5 1 IB-29 Bember 45 3 515 12 5 Total Boeing 25 1 512 1 B-17E Flying Fortress, 40 51 50 36 36 36 36 46 51 55 36 36 36 37 36 36 12 15 18 12 15 48 CONSOLIDATED AIRCRAFT CORP. U. S. Army 1 29 36 18 29 36 36 33 37 36 33 21 21 21 18 21 21 21 52 54 57 103 109 36 1 18 1 3 & 9 1 43 7 1 IB-32 Bomber 3 5 9 4 2 2 455 7 Total U. S. Army 5 B-24A Bomber B-240 Bember B-240 Bomber 37 U. S. Havy 9 6 3 , 4 1 1 2 204 6 200 9 2 PB2Y-2 Flying Boat PB2Y-3 Flying Boat Total U. S. Navy 21 21 21 21 21 10 21 10 British Empire 2 Total Consolidated 140 799 13 11 12 21 17 17 21 7 18-30 Heavy Bember 18 23 23 23 30 33 36 36 66 76 37 39 43 45 58 57 10 21 21 54 DOUGLAS AIRCRAFT 00. U. S. Army 1 XB-19 Bomber 1 GLENN L. MARTIN CO. U. S. Navy 1 GRAND TOTAL 1 XPB2M-1 Bember 1,316 13 18 17 27 42 Office of the Secretary of the Treasury Division of Research and Statistice. 58 87 89 93 96 *Excluding spare parts. 98 103 58 57 54 21 21 Source: Reports free Individual Companies. 009 10 Date: June 3. 1941. [2] Franklin D. Roosevelt Library DEOLASSIFIER per T.O.160 0937 RMP8-3-71 DEINGINE BONBERS ATRIATIV CONFIDENTIAL CONTIDENTIAL Unfilled Ordere* Company, Unfilled Class of purchaser orders* Estimated deliveries 1941 - May 24. 1941 25-3 Total U. 8. Army 3,699 Total U. S. Navy 573 1942 1943 May June 23 2 and model May 24, 1941, and Estimated Deliveries, by Months July 90 78 15 22 Amg Sept. 82 30 Oct. 75 78 23 17 Nov. Dec. Jan. 227 93 269 16 Total British Empire 4,272 25 2,705 30 105 195 100 224 112 204 98 95 216 370 109 236 283 363 297 254 294 213 268 Mar. Apr. May 300 June 392 300 17 27 36 409 327 336 352 160 160 100 90 11 12 9 Total U. E. Army and Navy Feb. 316 36 July Ang. 420 Sept 395 40 129 169 435 Nov. Dec. Jan. Feb. Mar. Apr. May 62 40 40 40 460 Oct. 102 40 40 40 20 40 40 40 20 Total South America 4 2 Total Foreign 36 2,741 30 195 224 206 220 10 12 307 266 8 Total Other Foreign 276 294 213 160 160 100 594 569 487 436 90 Total U. S. Commercial Total Unclassified GRAND TOTAL 7,013 55 300 324 318 318 371 416 502 575 442 460 169 435 102 40 40 40 20 BOXING AIRCRAFT 00. U. Army L-200 Bember 140 55 U. s. Havy XPEB-1 Patrol bomber 55 30 1 1 British Empire DB-7B Bomber 240 5 Total Beeing 381 10 10 25 40 25 40 50 50 55 55 55 56 55 55 30 5 CONSOLIDATED AIRCRAFT CORP. U. 5. Havy 15 2 . 17 15 11 14 16 11 14 16 10 12 39 37 9 22 30 9 22 6 15 6 2 193 9 17 15 16 15 16 6 22 30 9 22 1 15 60 9 Total U. s. Navy 133 6 PET-5 Flying Boat, PBY-5A Flying Boat British Empire 14 11 25-50 Flying Boat, 3 , 8 3 . 2 4 9 93 10 9 Total British Empire, 19 3 10 79 8 25-5AKE Flying Boat Other Foreign 31 35 34 36 28 9 25 9 2 322 15 16 6 Total Consolidated 36 8 28-500.Flying Boat, Nolland (Continued on next page Office of the Secretary of the Treasury. Division of Research and Statistics *Excluding spare parts. Source: Reports from Individual Companies. 9 0 Date: June 3. 1941. Fresklin D. Roosevelt Library DECLASSIFIER per T.O.160 RHP8-3- ATRIOTLY CONTIDENTIAL Unfilled Orders* Company, Unfilled class of purchaser orders* and model 0938 2-ENGINE BONBERS (Continued) Estimated deliveries 1941 1942 May 24, 1943 May June 25-31 1941 May 24, 1941, by Company and Estimated Deliveries, by Months July ing. Sept Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Ang. Sept Oct. Nov. Dec. Jan. Feb. Mar. Apr. May DOUGLAS AIRCRAFT 00. U. s. Army A-20. A-20A Attack bomber. A-203 Attack bomber A-200 Attack bomber 86 40 12 9 25 999 18 15 27 96 1,460 40 9 Total U. S. Army 70 55 35 105 120 225 200 105 120 225 200 60 375 96 96 131 152 49 87 12 25 18 15 123 157 80 49 British Repire DB-7B(A-20, 4-20A) Bomber. 1 Total Douglas 481 1,941 74 58 77 96 79 10 98 99 89 96 111 79 114 123 132 151 157 120 105 80 200 225 4g LOCKHEED AIRCRAFT CORP. British Empire 414 Bomber 816 125 28 130 99 81 75 72 78 78 50 GLENN L. MARTIN CO. U. S. Army B-26 Bomber 1,075 28 25 30 34 38 45 100 g4 67 54 110 115 115 115 115 40 40 U. S. Navy 1 1 2 5 379 & PBM-3 Bomber 12 20 30 40 40 40 40 40 20 British Encire 1 1,854 1 1 Total Martin 400 6 M-187 (XA-23) Bomber 24 13 40 30 26 34 68 43 86 59 50 104 60 55 124 149 60 168 60 182 135 145 155 40 155 40 40 40 40 20 NORTH AMERICAN AVIATION INC. U. S. Army 1,022 14 25 40 25 41 25 50 30 80 70 1 XB-28A 80 so 80 80 80 80 62 80 1 B-25 Bomber XB-28 1 1 Total North American 1,024 14 25 40 25 41 25 50 30 80 80 71 50 80 81 80 80 80 62 VEGA AIRPLANE 00. British Empire 1 7,013 55 300 2 GRAND TOTAL 675 324 318 5 37 Bomber 318 10 25 371 416 55 502 87 575 100 594 100 569 100 487 100 436 90 442 460 435 169 102 40 40 40 20 / Office of the Secretary of the Treasury Division of Research and Statistics, *Excluding spare parte Source: Reports from Individual Companies. Date: June 3. 1941. [6] 009 0939 June 12, 1941 HM Jr called the President this morning at a quarter to twelve: HM Jr: Hello. This is Henry speaking. The President: Hello, Henry. Who do you think I am in bed with? HM Jr: I don't know. The President: Well, I am in bed with a sore throat. HM Jr: Oh, I am sorry. May I congratulate you on the way you handled the strikes. The President: I think it is all right. HM Jr: I think it is better than all right. The President then told the Secretary that the Robin Moor was sunk by a German submarine, and that there was plenty of chance on the part of the submarine to identify the ship. The President and HM Jr discussed this back and forth for a few minutes. HM Jr: What I wanted to ask you is this: Through Grace Tully, I sent you a question about Lloyd Garrison, and Landis, and I understand you do not want Garrison. Is Landis all right? I spoke to Frankfurter about Landis and he is not so hot for him, and I wondered if that would influence you. He said that his public relations were not so good. That was his only criticism. The President agreed that Landis' public relations were not so good. HM Jr: Do you know of a better man? 0940 -2The President said that he did not. HM Jr: I have not talked to Landis, but I thought that it is an important move, and I wanted to tell you about Frankfurter's criticism. Do you think that is serious enough? The President said he did not think so. HM Jr: I will then get in touch with Landis. I hope your throat will clear up. The President: I will most likely give my cold to Guffey. him. HM Jr: I suggest that you bite him instead of kissing In commenting on Landis, the President said he brought in a Scotch verdict on the Bridges matter. ######### July 2, 1941 0941 I spoke to the President at 6:20. He said he would be back in Washington Saturday as he thought things might be "popping" by Monday - whatever that means. I then gave him my information about the Japanese. He said that it was very interesting and that it was the first tip-off that anybody had given him. He asked me whether I had told it to Summer, and I said that I had given it to Acheson at four o'clock. He said, "Fine." He seemed very much interested. I asked him whether I should let him know if I got anything more, and he said, "Yes, I would like to have it.