Full text of Diaries of Henry Morgenthau, Jr. : Volume 414 : Part 1

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DIARY

Book 414

June 26, 1941

-BBook Page
Bata Shoe Company

Relations with Government discussed at 9:30
meeting - 6/26/41

414

China

See War Conditions

-DDefense Savings Bonds
See Financing, Government
F-

Falk Corporation - Milwaukee, Wisconsin
Tax evasion (possible) in connection with Government
contracts discussed at 9:30 meeting - 6/26/41
a) Secret Service Agent's report
b) HMJr-Patterson conversation - 6/27/41:

See Book 415, page 22

c) HMJr's letter to War Department, and answer:
Book 415, pages 25 and 26

d) HMJr's letter to Navy Department:
Book 415, page 27

e) Helvering memorandum - 7/25/41:
Book 424, page 285

Federal Bureau of Investigation
See War Conditions: Foreign Funds Control
Financing, Government
Defense Savings Bonds:

Trust Funds: Regulations concerning issuance of
savings bonds discussed at 9:30 meeting - 6/26/41.

Conference: present: HMJr, Kuhn, Odegard, Graves 31,46

6/26/41

a) Discussion of

1) Schurs, Carl: Life story as example of
one forced from Germany

2) Army Camps: Branch office of United
States Treasury in each one
(See Bell report - 6/30/41: Book 415,

page 364)

3) Automobile stickers and buttons

4) Wrigley offer of billboards
a) Wrigley letter explaining plane -

7/15/41: Book 421, page 208

b) Liberty Bell sounding discussed by Dietz and
HMJr - 6/26/41

59,66

1) For Dietz telegram OK'ing and Treasury
letter to Mayor Lamberton (Philadelphia),

see Book 415, pages 29 and 30
Sales compared for May and June 1941

- F - (Continued)
Book Page

Fourth of July
Proclamation by FDR:
Discussed by HMJr and MacLeish - 6/26/41

414

157

Biddle - 6/27/41: See Book 415,
page 80

-H-

Harrison, Pat (Senator, Mississippi)
Funeral discussed at 9:30 meeting - 6/26/41

11,70

-NNetherlands
See War Conditions: Lend-Lease

-UUnited Kingdom

See War Conditions: Military Planning
-WWar Conditions
China:

Stabilization Board: Legality of action without
British member discussed in Fox memorandum 6/26/41

182

Extra American help for Fox discussed in Cochran
memorandum - 6/26/41

183

Exchange market resume - 6/26/41
Foreign Funds Control:

179

Federal Reserve Banks' cooperation discussed at
9:30 meeting - 6/26/41
Federal Bureau of Investigation cessation of

reports in view of general freezing order

discussed in Klaus memorandum - 6/26/41

a) Foley memorandum after discussion with
Gaston, Irey, etc.: Acheson; Shea 6/30/41: Book 415, page 356

b) Agrees to continue to monitor accounts of
unfrozen countries and will not disband
present organization - 7/2/41: Book 417,
page 191

188

Book

Page

War Conditions (Continued)
Lend-Lease:

Ferrying of planes to Middle East via Takoradi
discussed by Hopkins and HMJr; HMJr, White,

and Purvis - 6/26/41
a) Phillips memorandum - 6/27/41:

414

77,81

See Book 415, page 201; Book 416, page 69

1) HMJr's idea of having planes ferried
by Navy personnel, thus saving

British substantial amounts of dollar
exchange, discussed in White
memorandum - 6/30/41: Book 415, page 316

b) Speed-up of shipment of material discussed
by HMJr, Cox, and Mack - 7/2/41:
Book 417, pages 134, 136, and 139

1) "No request as yet" discussed by HMJr
and Hopkins - 7/9/41: Book 419, pages
191 and 421

Aid to Britain discussed by HMJr, Foley, Cochran,
White, Purvis, Phillips, Keynes, Thompson,
Childs, Boddis, Cox, Viner, Archer, and Coyne 6/26/41

a) Agenda for meeting

92,151

Netherlands-United States agreement: Draft approved
by HMJr - 6/26/41
Phillips' memorandum: "New Cash Expenditures by

British Air Commission" - 6/26/41
Military Planning:
Report from London transmitted by Halifax -

145
165

6/26/41

194

missions - 6/26/41

197

War Department bulletin: Aircraft for observation
Purchasing Mission:
See War Conditions: Lend-Lease

Wrigley, William, Jr., Company
See Financing, Government: Defense Savings Bonds

Book

Page

War Conditions (Continued)
Lend-Lease:

Ferrying of planes to Middle East via Takoradi
discussed by Hopkins and HMJr; HMJr, White,

and Purvis - 6/26/41
a) Phillips memorandum - 6/27/41:

414

77,81

See Book 415, page 201; Book 416, page 69

1) HMJr's idea of having planes ferried
by Navy personnel, thus saving
British substantial amounts of dollar
exchange, discussed in White
memorandum - 6/30/41: Book 415, page 316

b) Speed-up of shipment of material discussed
by HMJr, Cox, and Mack - 7/2/41:
Book 417. pages 134, 136, and 139

1) "No request 88 yet" discussed by HMJr
and Hopkins - 7/9/41: Book 419, pages
191 and 421

Aid to Britain discussed by HMJr, Foley, Cochran,
White, Purvis, Phillips, Keynes, Thompson,
Childs, Boddis, Cox, Viner, Archer, and Coyne 6/26/41

a) Agenda for meeting

92,151

Netherlands-United States agreement: Draft approved
by HMJr - 6/26/41
Phillips' memorandum: "New Cash Expenditures by

British Air Commission" - 6/26/41
Military Planning:
Report from London transmitted by Halifax -

145
165

6/26/41

194

missions - 6/26/41

197

War Department bulletin: Aircraft for observation
Purchasing Mission:
See War Conditions: Lend-Lease

Wrigley, William, Jr., Company
See Financing, Government: Defense Savings Bonds

June 27, 1941
9:25 a.m.

HMJr:

Hello.

Colonel
Halsey:

Yes, sir.

HMJr:

Halsey, Morgenthau.

Yes, sir.

HMJr:

How are you?

All right, sir.

HMJr:
H:

HMJr:

I think our monetary bill come up today.
Yes, sir. Senator Glass spoke to me
about it yesterday.
You know how we stand on it - are we

all right?
Well, it's in awful good hands. Byrnes
been working with Glass on it and I think
it's in kind of good shape, I don't know.

HMJr:

Have we got the votes?

I don't think that's been canvassed to
any extent yet.

HMJr:

Could you do a little inquiring?
Yes, I will and I'11 let you know.
Will you - it comes up today doesn't it?

Oh yes. Senator Glass wanted them to meet

HMJr:
H:

HMJr:

at 11, but of course with the death of
Houston, I don't know whether they'11 be
in session or not.
Gee whiz - you know this thing expires
June 30, you know. We'11 be in a nice

pickle if they don't pass it.
H:

Uh huh.

-2HMJr:

You see. The whole Stabilization Fund,
everything expires June 30.

Well, I'll impress that upon them, but
I doubt - I don't know - it's been

always customary when a Senator died to
adjourn immediately, and that come upon

the question of these Appropriation

Bills too, you know. The bills - the
fiscal year ends here, June 30.

HMJr:

When - will they meet again on Monday,
do you think?

Oh, it will be tomorrow if they don't
adjourn - don't sit today.

HMJr:

Oh, they would meet tomorrow.

Yes.

HMJr:

Well, if you'd interest yourself in it,
I'd appreciate it.
I'll do 80.

HMJr:

Thank you.

Goodbye.

June 26, 1941
9:30 a.m.
GROUP MEETING

Present:

Admiral Waesche
Mr. Thompson
Mr. Haas

Mr. Bell

Mr. Schwarz
Mr. Graves
Mr. Kuhn
Mr. Odegard
Mr. Johnson

Mr. Viner

Mr. Cochran
Mr. White

Mr. Foley

Mrs. Klotz

H.M.Jr:

Good morning, Gentlemen.
Norman?

Thompson:

Here is a letter here you might sign.

H.M.Jr:

I would like to give him that myself.

Thompson:

H.M.Jr:

He isn't here this morning.
He isn't here?

Thompson:

No, he is gone for the day. That is all

Bell:

We received subscriptions totaling five
hundred and thirty-seven million for cash
and a hundred and ninety-nine million dollars

I have.

of exchanges.

-2H.M.Jr:

How much?

Bell:

A hundred and ninety-nine of the two eleven.

H.M.Jr:

You know, George, for the first time Henry

Murphy particularly was much too conservative
on investments. He wanted January. I wheedled

him into April. It should have been a full
three years.

Haas:

Yes. I think the difficulty there, Mr. Secretary, on the prices of the outstanding issues
mean very little. They are so closely held
there is no trading. I think that is what
threw Henry off on it.

(Mr. Foley entered the conference.)
Bell:

Well, the chart was all right. We should
have eliminated the chart for this pricing.

That is what New York did. They used their
judgment.

H.M.Jr:

They were right and we were wrong.

Haas:

That is right.

H.M.Jr:

You admit it?

Haas:

Absolutely.

H.M.Jr:

All right.

Bell:

But no harm was done.

Haas:

The paper chart was not of much value.

H.M.Jr:

That is right.
But there was no harm. It didn't cost a

Bell:

lot.

-3Haas:

I suspected that was a possibility, but I
would rather have it work this way than
on the other side.

H.M.Jr:

Oh yes, but I just wanted to let you know
I knew it too.

Haas:

Yes, I suspected you did.

Bell:

The way this circular was worded, it was

really a five hundred million dollar issue.
I would like to allot seven percent. That
would be three fifty. Then the total combined with the exchanges would make about

five forty. Six percent gets you right on

the dot of three hundred million.
H.M.Jr:

Jesse wants this Monday.

Bell:

I know he does. That is the reason I am
recommending it.

H.M.Jr:

It is all right with me.

Bell:

We have had a great deal of correspondence
and several conferences with people on our
regulations concerning the issuance of savings

bonds where it involves trusts, particularly
trusts created by an individual for himself

and revokable. We provided that they can't
buy those bonds at all.

Last week we had a conference with represen-

tatives of the Corporate Fiduciaries Association

in New York, and we have had many letters from

the Chicago area saying there is a lot of

money in there if we wanted to change the

regulations. I don't think it would do any

harm, and I recommend we change them so we

can get some of that money; and if they do
revoke them or have the bonds transferred to
them for cash, they get them at the discount

value rather than the face value.
H.M.Jr:

Bell:

It is all Greek, but if you say it is
all right -I am sure it is.
That is a letter to Cox on the Lease-Lend
Agreement he sent you some time ago for one

of the countries paying cash.
H.M.Jr:

Now, I have a letter from the President, and
I don't know what to do with it. Undoubtedly
Cox wrote it. It says here, "Section 3A2

of the act of March 11, 1941, Lend-Lease Act,
empowers me to authorize you to transfer to
any country whose defense is vital to our
defense, articles procured from the funds

appropriated prior to March 11 to the extent

of one billion three. Will you please let

me know as soon as possible what defense

articles your Department has available and

will have available for transfer under this
section now month by month until the end of

the fiscal year '42." What did Oscar mean
when he got the President to do that?
Bell:

There is your Coast Guard vessels or anything
that would come under Coast Guard, paid out

of appropriations made available prior to
March 11. I don't know of anything else,
do you?

H.M.Jr:

Anyway, I will tell you --

Foley:

It is whatever there is in the Department.

H.M.Jr:

I will appoint a committee of Bell, Waesche,
and Foley to bring me in a report Tuesday
morning, and I will - you (Mrs. Klotz) give
them each a photostat of that, please.

Bell:

That is all I have.

-5H.M.Jr:

Dan, I was reading this. I hate to criticize these defense quiz things because I

think they are wonderful, but in this thing

here, "What happens if I suddenly need the
money I put into Defense Savings Bonds?"
Answer: "You can cash your bond any time

after sixty days."

Wouldn't it be clearer if you said, "Any
time after the first sixty days"?
Graves:

That isn't right, anyway.

H.M.Jr:

You mean what I am saying isn't right?

Graves:

What this says is not right. In the case

of the E Bond, no notice whatever is required.
They may be cashed on demand. That limitation
applies to the F and G, doesn't it, Dan?

Bell:

Yes, that is right.

Graves:

That answer should never have been --

Viner:

What about the thirty days' notice?

Graves:

Thirty days' notice is not required for the
E Bond, They are redeemed on demand.

H.M.Jr:

Harold, how could this go out without being
checked?

Graves:

It should have been. I am at fault.

H.M.Jr:

You are at fault?

Graves:

Yes, sir.

H.M.Jr:

Isn't this a terrible crowd? Haas says it

was a mistake and he missed the boat. What-

is-his-name says he is at fault. Aren't you
going to let me scold anybody? Is it in hand?

-6Graves:

I didn't know about it. To tell you the
truth, I didn't read those.

H.M.Jr:

Well, you shouldn't have to.

Graves:

H.M.Jr:

Bell:

Well,
I should have seen that somebody else
read them.
Shouldn't they go to Accounts and Deposits?

No, Public Debts. Mr. Kilby or Mr. Broughton,
it seems to me, should go over everything that
hasitstoterms.
do with the subscription of the bond
or

H.M.Jr:

I meant Public Debts. That is what I meant.

Graves:

That is inexcusable.

H.M.Jr:

I meant Broughton.

Bell:

I think that is right.

H.M.Jr:

Are you all right?

Bell:

Yes, I am finished.

H.M.Jr:

Harold?

Graves:

You have sent me a number of notes. If you
like, I will comment on them now.

H.M.Jr:

I will tell you what let's do. Let's go

around the room, because I have got a lot

of things I would like to talk to you about.
Graves:

All right.

H.M.Jr:

And then I may ask you to stay behind. Anything
of general interest?

Graves:

Well, unless it is the picture that you

-7wanted to know about showing tonight. That
might be of general interest.
H.M.Jr:

Yes.

Graves:

That will be available. It is not complete
and not perfect, because the background part

of it they haven't shot yet, but the Barry

Wood song and orchestra and all of that is
there.
It is about a ten minute picture
as
it stands.
H.M.Jr:

Well, my movie impresario, Sam Klaus, Esquire,

if he could find some other picture to go
with it and if you will let me know at ten

o'clock. Otherwise, we could just go downstairs any time today and see it.
Graves:

I have one routine matter. Mr. Mack has
given me a report about certain people certain independent oil operators in Texas
wanting to donate oil to the Lease-Lend thing.

He has given me a memorandum.
H.M.Jr:

Yes, What-is-his-name, Oscar Cox said that
What-is-his-name
had been so very helpful
on that.

Graves:

That is merely for your information. There

is nothing for us to do about it. It is well

in hand. The Procurement Division function
will be simply to provide receiving and

storage facilities and so on.

H.M.Jr:

And I am not going to give away those glass

boxes today, on second thought. I just don't

like to do it. I sent them all out. I mean,
I won't say anything about it. If you stay
behind with Odegard and Kuhn, we will have a
little
session.
Graves:

Yes, sir.

-8H.M.Jr:

Bell, are you ready with a report on install-

ment buying?

Bell:

No, I am having a luncheon tomorrow with
Mr. Parry of the Federal Reserve Board to

go into it.

H.M.Jr:

Lubin was over here on another matter and

brought it up, and I told him what you were

doing and told him to call you. I don't

know whether he did or not.
Bell:

Yes, he did, and I called him back three
times and couldn't get him. He was out
yesterday.

H.M.Jr:

But he is very much excited and I told him

to talk to you and --

Bell:

All right.

Klotz:

Is that finished?

H.M.Jr:

No, still pending.

Graves:

May I ask Mr. Foley to tell you what he did
about Patterson?

Foley:

I called Patterson on the telephone and he
said he would like forty-eight hours to go

over it and think it over, and wanted to

know if he could have some literature and
I called Harold and Harold sent him the

outline and stuff.

Graves:

We ought to be hearing today, I would think.

Foley:

Yes, he promised to let us know.

H.M.Jr:

I gather Sullivan isn't going to show up.

I didn't want to tell this story without

his being present, but yesterday morning

-9at around six, having sent my car for him,

I figured, well, if Sullivan did the usual

thing and came late, it wouldn't be so bad.
I didn't have to wait for him, but he had
my car. So I had the Treasury operator
call him at six o'clock to wake him.
So when I met him - so when he came down,

he said to me very seriously, "I am sorry

you have lost complete confidence in me.

After all, to have to have me called and

that sort of thing." He said, "After all,

my alarm clock went off at a quarter of six,"
and he said, "I reached down and turned it
off and went to sleep again."

He said, "I don't know why you lost confidence in me. (Laughter)
So I said, "What does Mrs. Sullivan do under
those circumstances?" And he said, "I will

have to take it up with her. I went sound

asleep," and when the telephone operator called
him, he would have been sleeping yet if she

hadn't called him.

I wanted him to tell it himself, because he

tells it very well.

It was some trip, oh boy!
Foley:

What time did you get back?

H.M.Jr:

We landed to the dot at midnight at the
Washington Airport. To the dot.
And as they lowered the body, not being able

to hear the minister because I was too far

away, Senator Russell said to Senator Connally,

"I am sorry, Tom, we can't get that appropriation until the new fiscal year." (Laughter)

- 10 The other thing that happened, the mayor

of Biloxi, who had his four motorcycle

escorts who had never escorted anybody in

their life and pretty near killed me in
though I live here, if I had stayed there

the process, he said to Sullivan, "Even

five minutes longer at the church they would
have had to carry me out."

John says, "You are wrong; if it had lasted
five minutes longer no one would have been

there to carry you out." (Laughter)
Klotz:

He is funny.

H.M.Jr:

It rained just before, and the steam just
boiled. The fellow says, "You ought to

be here in August. It is lovely now."
(Laughter)

We will get to you, Harold -Were you (Foley) through? He is taking forty-

eight hours to read Harold's literature. I

have no comment on that,
Harry?

White:

Nothing.

H.M.Jr:

Are you going to have an agenda for me this
afternoon? Three o'clock? You, Harry White.

White:

I don't know what is going to happen.

H.M.Jr:

Well, I expect a progress report from the
English.

White:

They are coming here at three this afternoon?

H.M.Jr:

Yes. Check up on it.

- 11 Bell:

Yes, they are due here.

H.M.Jr:

I expect them, and I want Cox and all and
I hope that they are going to tell me something is done and I expect progress.

White:

All right, we will have it.

H.M.Jr:

If nothing has been done, they had better do
it this morning.

Bell:

Well,
they have been meeting with Cox. I
know that.

H.M.Jr:

Well, if you could get Cox over here a little
bit before three, a quarter of three, and

the Treasury crowd could have a little session
before that, because if we don't show progress,
I am going to get very impatient.

Bell:

By the way --

H.M.Jr:

Who will communicate with Cox? Will you,
Foley?

Foley:

Sure.

H.M.Jr:

Harry had better. Because you (White) and
he have got to have an agenda for me.

White:

We will have it.

H.M.Jr:

Quarter of three. I expect Bell and White
and Viner and Cochran.

Bell:

I have a meeting of the Board of Directors

of the Federal Farm Mortgage Corporation.
They haven't had one for about three months,
and they have got some important things
coming up. Do you think you need me on this
thing?

H.M.Jr:

What time is it?

- 12 Bell:

Two-thirty. It will last about three
hours.

H.M.Jr:

Bell:

Have you got to go to the other one?

I haven't got to, but I think they will

have some bills up that I would like to

be there when they discuss.
H.M.Jr:

Ask them to show you the agenda before you

go, will you please?
Bell:

O.K. I don't think I am needed on this. I
think Cox and Harry have the story, and

Merle.

H.M.Jr:

All right. Well, take a look at the agenda,
will you?

Bell:

All right.

H.M.Jr:

Chick?

Schwarz:

Depending upon your thoughts with respect

to this - the tax anticipation notes and
the whole increase in taxes generally, I
think we ought to plan definitely on - I
would like to have a few field people, West,
South, and Middlewest, just a few, from now

until March 15. I think there is a big job
that needs to be done at this time. I believe it would much more than reflect itself
in revenue.

H.M.Jr:
Schwarz:

Why?

I think there is so much impact upon the
American citizen at this time from various

sources that in order to get a clear picture
of new taxes and of tax anticipation notes,
precise and distinct from other things, that
we need to do a specific job.

- 13 H.M.Jr:

I will tell you what you do. See if you

can sell it to Kuhn and Odegard and bring
it back at nine-thirty tomorrow morning,

will you? See if you can sell it to them.
Bell:
Schwarz:

I think we have got to be careful that we
don't interfere with the Savings Bond program.
That is what I have in mind.

Graves:

It seems to me, Mr. Secretary, that whatever

is done on publicity on this tax certificate
has got to be definitely tied in with our -

we can't have two Publicity Departments
around here on the promotion of bonds.
Schwarz:

We should be very, very distinct about it
and very clear --

H.M.Jr:

Are you willing to let Kuhn and Odegard
represent you, Harold?

Graves:

Represent me? I am very willing.

H.M.Jr:

Well, I mean they will try it out and they
will bring back a report tomorrow morning,
how is that?

Graves:

All right.

H.M.Jr:

All right, Dan?

Bell:

Yes.

H.M.Jr:

Chick gave me this all prepared for my

signature, you see, and I shot it back
at him and told him to bring it up now.
Schwarz:

I think definitely it should be thought
about in advance.

- 14 H.M.Jr:

Well, see whether they think it is necessary
and then bring it back tomorrow morning. I
personally don't see it, but maybe they do

and
maybe I don't understand what you have
in mind.
Schwarz:

Just so the record is there. I think it is

a good idea.
H.M.Jr:

Well, I gather that.

Schwarz:

Very much so.

I have had handed to me a letter from the
Bata Shoe Company. As a public relations

matter, they are trying to clear up their

reputation with the Government departments
with which they are now doing some business.

It is State, Justice and Treasury. It is

addressed to you saying, "We are good boys."
H.M.Jr:
Schwarz:

What do they want to do to prove it?
They recite some facts and they say, "We

have in our files a lot of material," with

which we could check their assertions.
H.M.Jr:

I mean, what do they want to do, give us a
radio hour or something?

Schwarz:

That is an idea. Or some shoes. For the
Army?

H.M.Jr:

Tell them the Treasury is barefoot.

White:

The Foreign Funds has a great deal of

material on this corporation; so should
anything come up --

H.M.Jr:

What is the name of this company?

- 15 White:

Bata Company.

H.M.Jr:

Before you do anything with them, you had

better take it up from the labor union angle.

If we want to get into it. I don't see why

we should.
Schwarz:

They are simply trying to convince us, that

is all. They are asking nothing at this time.
H.M.Jr:

Ibusiness.
would forget about it. It is none of my

Schwarz:

It is simply a matter of information addressed
to you.

H.M.Jr:

Peter, will you stay with Harold?

Odegard:

Yes.

H.M.Jr:

George?

Haas:

I have nothing this morning.

H.M.Jr:

Professor Viner?
Jake, make sure these Treasury boys are going
to have some accomplishments this afternoon.

That is what you are here for this week. Will

you?

Viner:

Hear that, boys?

H.M.Jr:

When they come in at three - you know, you

and I have been sitting around all week just

waiting on them.
Viner:

I think they are making real progress.

Bell:

We have been sitting around, too, haven't we,
Jake?

- 16 H.M.Jr:

When are you (Bell) - aren't you going to
give me a report on Eccles' idea on that
tax certificate?

Bell:

Yes, we can.

H.M.Jr:

When?

Bell:

I thought maybe you ought to have a conference on that, possibly tomorrow morning.

H.M.Jr:

I want a Treasury conference first.

Bell:

All right, any time you say. They would

like to put it off until tomorrow.

H.M.Jr:

Must I meet again with Eccles on the thing?

Bell:

You promised him you would call him at a

conference. He said yesterday it wasn't

necessary for him to come over when you had
your conference.
H.M.Jr:

Why not have one at ten thirty tomorrow
morning? The same people that were here last

time. Is the Treasury together?

Bell:

Pretty well. We met for three hours yesterday on the thing.

H.M.Jr:

Who won, Jake?

Viner:

What would you say?

Haas:

Both were on the floor at the end.

Viner:

I would say it was a very polite gathering.

H.M.Jr:

Do you mind my being very sarcastic?

Viner:

Not at all.

- 17 H.M.Jr:

You must have had a good time.

Viner:

Because it was polite?

H.M.Jr:

I thought you said impolite.

Viner:

No, polite.

H.M.Jr:

I take it all back. (Laughter)

Haas:

You would be bored to death.

White:

I thought you were slipping.

Viner:

Of course, Ed Foley wasn't there.

H.M.Jr:

I asked your permission to make a wise crack.

I thought you said it was a very impolite
conference.

Bell:

Very polite and very argumentative.

H.M.Jr:

What else, Jake?

Johnson:

I can just say that Herbert Gaston is busy

covering Coast Guard and Customs in Los
Angeles and San Diego. He is now on his way
to San Francisco.
H.M.Jr:

Any trouble keeping the wrong people in the

United States?
Johnson:

No. It has been pretty small fish so far. We

have set up a regular plan of clearing each
case and are handling them quite promptly.

It is coordinated with Immigration.
Foley:

They have arranged for a boat to leave New

York around the fourteenth or the fifteenth
of July to take about six hundred of the
German and Italian consuls and certain
others out of the country, and, at the same

- 18 time, another boat bringing our people back
is supposed to leave Lisbon. Our boat doesn't

go until the other boat sales. We are work-

ing on arrangements as to the amount of search

and the amount of inquir that will be made
of the consular officers when they board the
boat.

H.M.Jr:

Admiral?

Waesche:

One of the items I think under that LendLease program is due to the - before the

Appropriations Committee of Congress yester-

day on our ice-breaking bill. They went

a great length to cut that from sixty million to forty-seven million, and the report
said that the other thirteen million should
be furnished from the Lend-Lease appropria-

tion. Otherwise, it would have an effect

of increasing the Lend-Lease appropriation.

So they cut that appropriation of sixty million - authorized all the ships, but cut the
appropriation from sixty million to fortyseven million and said the other thirteen

million should be furnished from the LendLease fund.
H.M.Jr:

On what theory?

Waesche:

On the theory that these ten vessels were given
to Great Britain and the actual construction
cost plus the rearmament cost for those ten

ships was thirteen millions of dollars.

H.M.Jr:

That is a great victory for me, you know,
because that was the position that I took

with Hopkins. That is the position I took

with Hopkins.
Waesche:

Well, that is exactly the position the

Appropriations Committee took, and they

reported it out favorably. It was passed

- 19 by the House yesterday.
H.M.Jr:

That is the position I took with Hopkins,

and Hopkins wouldn't go along. That is

fine.

What else?
Waesche:

We have a request here to put an exhibit on
an exhibition train. The Army, Navy, State
Department, Labor, Maritime Commission,

Interior, Agriculture, Office of Emergency

Management, and others have already accepted

space on it, and I would like permission
to go along with that.

H.M.Jr:

Where does the train go?

Waesche:

To thirty-nine of the cities of the United
States.

This letter is from Cook and Sons, who are
running this thing for the manufacturers of
the country. They said, "We have been re-

question by a number of leading manufacturers

to assist them in organizing a national defense
program exhibition train which will make a
tour of the United States from coast to

coast following the itinerary attached to

this letter.
H.M.Jr:
Waesche:

Wait a minute.

The itinerary goes all around the coast and

up into Canada.
H.M.Jr:

Kuhn and Odegard have to pass on it.

Waesche:

All right.

Kuhn:

We ought to be on that train with our Savings
Bonds.

- 20 H.M.Jr:
Kuhn:

Well, see what kind of a - how it is put up.
That is not new. It is an idea that has
been going around. We have had it for
several months.

H.M.Jr:

You pass on it and it doesn't have to come
back to me.

Kuhn:

Right.

Waesche:

Those transports sailed at six o'clock this

morning, the three transports from New York

sailed at six o'clock this morning. The

Maritime Commission have taken over, or will
take over next Monday, the Italian and German ships which we have had guards on. They
have also taken over direct the Lithuanian,
Esthonian, and Latvian ships, of which there

were three in our harbors. They are taking
those over, I believe, today.

H.M.Jr:

Would you stay behind, because I want to ask

you a secret question alone, a minute, if you
will stay behind.

Waesche:

Yes, sir, I will. The Finnish vessels up in

New York, I communicated with the State Department yesterday as to whether we should take
any action.

Baylis reports that the crews of those

Finnish ships are very pro-Nazi and suspects

that they probably will be sabotaged if
Finland actually goes to war; and, of course,
she has gone to war. They discussed that over
at the State Department but are not ready to
take any action on putting guards aboard those

ships at this particular time. We made a

report yesterday to the Navy Department on
five vessels in the Great Lakes, to recommend that they be taken over for this weather

- 21 patrol on the basis that the Navy would
purchase the ships and give us one mil-

lion seven hundred fifty thousand dollars

to repair them, and then we would put them
in shape and release the three hundred
twenty-seven foot cutters to the Navy.
They have been very, very anxious to get
those three hundred twenty-seven foot cut-

ters, and this is the best bet we have been
able to get for any ships for that purpose.
I think that covers everything of any particular importance.

The Japanese have some trawlers up in the

middle of the Bering Sea right now. That is
nothing unusual.

Cochran:

You said you were interested in other films.

I still have that colored film of the

Burma Road from Archie.
H.M.Jr:

Will you give it to Sam? I am thinking of
having some movies tonight. I don't know

yet.
Cochran:

I will pass it on.

H.M.Jr:

Give it to him.

Cochran:

And Howland Shaw telephoned me yesterday that

that Coe arrangement is entirely agreeable

to the Ambassador. It is just a question
of arranging with Harry as to the time, I
think.

H.M.Jr:

And I want to talk with Coe and Harry before

he goes, Harry.
Cochran:

And Stopford gave me yesterday a memorandum

which you asked him to prepare on LatinAmerica.

- 22 H.M.Jr:

Oh, yes.

Cochran:

I haven't distributed it yet.

H.M.Jr:

Well, give it - a copy to Foley, White, and
Bell, please.

Cochran:

All right, sir.

H.M.Jr:

I will keep the original.

Cochran:

You said you might want to send it to Mr.
Acheson.

H.M.Jr:

Yes.

Cochran:

So I have a copy.

Foley:

I would like to ask the president's of the

Federal Reserve banks to send in a man who

is handling the foreign funds business in

the branches for a meeting next week. We
have had very good cooperation up in New

York, but we aren't getting cooperation in
Philadelphia, and Towson got on the train

yesterday morning and went up there. The
situation he found up there wasn't good.
H.M.Jr:

Who went on the train?

Foley:

Towson. He is Pehle's assistant.

H.M.Jr:

I know him.

Foley:

I think it would be a good idea to have a

meeting here, and then afterward I think Towson
and somebody from Bernie's shop ought to go
around and spend a couple of days in each
bank with people and have meetingswith the
bankers.

H.M.Jr:

Well, if you and Bell will work it out. Will

- 23 you please?
Foley:

Yes.

H.M.Jr:

It is a good idea.
Anything else?

Bell:

Of course the other banks haven't had much

to do up until this last order. New York

had all the work to do.
H.M.Jr:

If you and Ed will work it out.

Bell:

They probably need some instructions.

Foley:

I think they ought to come in here first, and

then I think we ought to send people around
to them and let them call in the bankers and
let them have some group meetings.
Bell:

I think they would be glad to do this, and it

would be an education for them.

(Mr. Sullivan entered the conference.)
(Laughter)

H.M.Jr:

Not thinking you were coming, I told the
story of you how you got up yesterday.

Sullivan:

You picked the wrong day. (Laughter)

H.M.Jr:

I hope you rested well.

Sullivan:

I did, very well.

H.M.Jr:

Good. You earned it.

Sullivan:

When I woke up I felt as though I had walked

both ways. (Laughter) So I rolled over.

- 24 Foley:

Forrestal wrote us a letter and asked us if

we had an income tax case pending or in
preparation against the Falk Corporation of

Milwaukee, because they had given them some

contracts, and they wanted to give them some
more, and they would like to know about this
income tax angle, particularly whether it

involved criminal culpability on the part

of the present management before they went

any further.

H.M.Jr:

Who is this?

Foley:

The Falk Corporation, F-a-l-k, of Milwaukee.

H.M.Jr:

Who wants to know it?

Foley:

Jim Forrestal.

The president of that company is a civilian
consultant in the War Department. The

company has--

H.M.Jr:

What?

Foley:

The company has padded its costs under the

Vinson-Trammell Act, and there is criminal

culpability there, and while the investigation

has been going on they came in and volun-

tarily paid four hundred twenty-five thousand
dollars, and we think that they owe some-

where in the neighborhood of seven hundred

fifty thousand dollars for Vinson-Trammell
and excess profits taxes.

I have got a letter here that you might want
to sign to the Secretary of the Navy setting

forth the facts, also a copy of it with a little
letter of transmittal for your signature to

Bob Patterson.
H.M.Jr:

No, the Secretary of War.

- 25 Foley:

The Secretary of War. We are saying that
"I thought you would be interested in this
information not only because the War Department may also be dealing with the Falk
Corporation, but also because I have been

informed that a Harold S. Falk is Civilian

Aide to the Secretary of War. The President

and Works Manager of the Falk Corporation,
who handles its shop management, is named
Harold S. Falk."

I think anybody that does a thing like that

on Government contracts and who is down here
in the War Department working on Government

contracts should not be here.

H.M.Jr:

Well, how far do you go.

Foley:

Oh, I just bring the matter to their atten-

tion, that is all. I don't know why this

case - this case has been investigated for
two years, and while the agent has recommended the fraud penalties and all the rest
of it, they haven t decided yet what they

want to do. The Falk family is a very
important family in Milwaukee, and I think
it is probably the most prominent family
there, but this is a very bad--

White:

Does the public know anything about the

activity of the Treasury in examining these
contracts with a view to protecting the
tax payer against undue charges? I don't
think that the public knows we are doing it,

and I think it would be very salutary if

this is a good case, and it appears to be,
some publicity could be given, not from
the angle of the Army and the Navy, but from
the angle of the Treasury watching these

matters.
Foley:

Harry, we can't give it any publicity because

- 26 -

this is information gotten from the income
tax returns.
Viner:

He means the general procedures.

White:

Well, they paid four hundred million dollars,
didn't they? Four hundred thousand dollars?
Isn't that public?

Foley:

Well, they just came in and paid it volun-

tarily. They admit the liability. They
admit they did it. They - and the officer
of the corporation that did it admits it

and - but the management's excuse is that it

didn't know anything about it, but it is

impossible for the management not to know

about a thing like that.
White:

There may be legal reasons. I can't see
why, certainly from the point of view of

public policy, it isn't an excellent thing
to exploit from the point of view of publicity value.

H.M.Jr:

White:

H.M.Jr:

Well, Harry, you are right, but I can't call
up - do that to Mr. Stimson. I have got to
give him his chance first to do it himself.
That is right.
Now, what I want to do is - let me see this what I want to do is, I want to call up
Stimson and Knox and tell them that this is

coming. I want to read this myself. Then
my thought was, that after all there are two

members of the OPM - that all of these people
are down here.

I willtalk to you (Foley) later on that.
White:

Just one word more, Mr. Secretary--

- 27 Foley:

Do you want me to fix up this letter? I
wrote the transmittal letter to Bob Patterson.

H.M.Jr:

Well, just take this part and write it to the
Secretary of War.

White:

I wasn't thinking of it only from the point
of view of the fact that they have a consultant. That is bad enough. That is their
business. But from the point of view of

Treasury care in examining contracts; and
that, it seems to me, is Treasury business and

not Army and Navy business.
H.M.Jr:

Well, let Ed think that angle over; but, as

I say, I don't want to crack down on Stimson
without
giving
him a chance to clean up his
own house
first.

All right?
Foley:

Yes.

Oscar Cox is now off our payroll, and I would

like to put Joe O'Connell in his place, if

that is agreeable.
H.M.Jr:

O.K.

Foley:

That involves an increase of five hundred

dollars for him. He is getting seventy-five

and it will give him eight. If it is all

right with you, I am going up to Saranac
late tonight to make that speech tomorrow.
I will be back Sunday night.
H.M.Jr:

All right.
That is all. I would like to see Graves and
Kuhn and Odegard.

6/26/41
Extract from Special Agent's Report dated March 17, 1941

"Mr. Harold S. Falk is President and Works Manager of the

Falk Corporation. He is about 57 years of age and is a nephew
of Herman, Otto and Clarence Falk, brothers. He owns 3.97

percent of the outstanding stock of the Corporation and handles
its shop management and general policies. He has many outside

activities such as President of the Vocational School; Civilian
Aid to the Secretary of War; Trustee and a member of the Finance
Committee of the Northwestern Mutual Life Insurance Company, one

of the largest life insurance companies in the United States;
Director of the Employers Mutual Life Insurance Company of Wausau,

Wisconsin, the Heil Company, Mississippi Valley Electric Company,
and many others."

Copied:
6-26-41

June 26, 1941
10:15 a.m.
RE DEFENSE SAVINGS BONDS

Present:

Mr. Kuhn
Mr. Odegard
Mr. Graves

H.M.Jr:

Sit down, gentlemen, and let me clear my

couple of things first. I have got a

couple of things I want to clear.

I talked night before last with Howard Dietz

about seeing Carmer. I wonder what happened.

He said he would either talk to you or get
hold of Carmer direct.
You know nothing about it?
Odegard:

My understanding was that he was to get
hold of Carmer in New York.

H.M.Jr:

But you don't know whether he did?

Odegard:

No. Carmer would report back here.

H.M.Jr:

I have got a call in now. I am arranging
to see Dietz myself over the week-end.

Kuhn:

Good.

H.M.Jr:

I just want to say this. I read the Carmer
stuff, you see, and I --

-2Odegard:

H.M.Jr:

I haven't seen it.

Well, I am going to give it to you. I am
not very enthusiastic about it. It doesn't
thrill me, you see. I mean, I am disappointed.

Odegard:

This is what he did the other day?

H.M.Jr:

Yes. I am disappointed.

Kuhn:

We quit doing those.

H.M.Jr:

I want the idea, but in the first place,
it is very amusing. Practically everything
is revolution against the British.

Kuhn:

Some of it, yes.

H.M.Jr:

You read it?

Kuhn:

Yes, I read it.

Odegard:

Did you read this, Ferdie?

Kuhn:

Yes.

H.M.Jr:

Half of it is revolting against the British
and at this time I don't think it is 80
good, and that story which I read in the
Hudson River' of this fellow who went

down to New York and back.
Odegard:

You mean Mehitabel?

H.M.Jr:

Whatever his name is. I don't see where

that is applicable.

Kuhn:

The one about the manor lords, of course,
was not so good.

H.M.Jr:

We are always honest with each other. Now,

-3I have got a suggestion I want you two

fellows to look into. I mean, I still
want to do it, but I don't know that that
is the script to do it on.
Now, here is a suggestion which, if you
could look up today for me, from James

Landis. He says, couldn't we - we got

talking. This is after lots of talk. To
me - I mean, I think this has got possibilities.
He said, "Can't we show what it was that
made those people leave Germany and what

drew them here," and out of it came the

possibility of doing the life of Carl Schurz,

you see. One, what drew him to America and
what forced him out of Germany.

He says that Josephine Goldmark has written

a wonderful book on the forty-eighters and
I thought that you people might kind of
look it up, you see.
Kuhn:

That is a full length film, the life of

H.M.Jr:

I know, but the idea that appealed to me

Carl Schurz. It is a real one.

there was what forced him out of Germany,
and in reading those books on foreign

affairs that got on to Germany, going back
a hundred and a hundred and fifty years -

I read that foreign affairs book. It

goes into the whole thing, trying to show
that the Germans - well, this thing that

the Germans are doing today is the seed
which has been sown over a hundred and

fifty years. It isn't something which

has just suddenly cropped up. You know
the book I am referring to?
Odegard:

It is published by the Council of Foreign
Affairs.

-4H.M.Jr:

The one that your (Graves') son is - the

same series. It is very interesting.
group. They need that kind of stuff. It

You can circulate it amongst your own

is the background of what is Nazism and
how did it happen.
Odegard:

It is an interesting thing in that connection.
I have been receiving for the last year and
a half or more from various German agencies

in the United States, material just exactly
like that and Carl Schurz figures very promi-

nently in Nazi propaganda in the United States.
The way in which the Nazis threw the news

of the week, and this information offers
us just the very things, for example, to
establish a -H.M.Jr:

Entente cordiale?

Odegard:

Yes, what the German population is told is
amazing. It seems to me that can be done,

but I think it might be a good thing to

look at the way in which they have used
these people.

H.M.Jr:

The reason - I let him read the Carl Carmer
stuff, you see, going down on the plane.
He was on the plane with us. I had read

it and I was disappointed. I still want

the idea. The fact that it is difficult

doesn't make me want to do it any less.
Kuhn:

Mr. Secretary, I spent two hours yesterday
with the Life people up in New York on this

very subject. They are lending us for two

weeks their promotion man, the man who has
these ideas and works them out up there,

just to come and sit down here and think

over this problem and recommend methods of

getting the thing done. Will that be all
right with you?

-5H.M.Jr:

Wonderful.

Kuhn:

They were most cordial and helpful. They

were first of all flattered, and secondly I am convinced that they believe in this
job.

H.M.Jr:

Did you get --

Kuhn:

I got Roy Larson, who is president of all
the companies there and is the circulation

man. Luce is out of town. I spent an

hour with William Geer, who is this mysterious
fellow in the organization who is coming down
here for two weeks. He is only coming down

to explore. We don't commit ourselves. If

we don't like his recommendations, we don't

have to take them, but --

H.M.Jr:

I think that is swell.

Kuhn:

I would like him to sit in this building
and not over in the Defense Savings --

H.M.Jr:

Put him downstairs.

Kuhn:

And just regard this as a special problem.

H.M.Jr:

Well now, the thing that I - depending upon
how this picture looks, you see, my idea of

doing the difficult thing - I mean, this

thing we are talking about - I sent a notice
to somebody that I wanted "America the

Beautiful" done in four colors. Did I
send it to you?
Kuhn:

I got that this morning.

Graves:

I got it in Mr. Kuhn's absence and sent it
to Mr. Powel, but I haven't had a report
from Powel yet.

-6H.M.Jr:

Well, I am going to take it up with Dietz

direct and also the "Ballad For Americans.

I want those two things put into shorts.
I mean, that could be done very quickly,

you know.
Odegarde:

Yes.

Kuhn:

Yes.

H.M.Jr:

That wouldn't take - if Dietz wanted to do

Kuhn:

Just to show you how minds run along the
same line --

H.M.Jr:

I think the idea of appealing to patriotism

it, he could do it in a week.

through music - I don't know any better way.
Nothing has stirred me as much as Irving
Berlin's song. I am crazy to see the movie.
Have you seen the movie?

Graves:

No. Just got it here yesterday.

Kuhn:

I just thought in connection with the "Ballad
For Americans", Fortune's defense issue for

August is having a full page with nothing

but the words of the "Ballad For Americans"
and all around it a frame of American faces.
H.M.Jr:

American what?

Kuhn:

American faces.

Odegard:

You see, they scoop us.

Kuhn:

Irish and Frenchmen, Czechs and Poles.

H.M.Jr:

That is all right. Have you got the thing?

Have you got the - that page?
Kuhn:

No, but Geer will probably - can bring it
down.

7H.M.Jr:

Well, I wish we could get Robeson to do
it because I have heard Robeson do it
and I have heard Bing Crosby do it. Landis

said Bing Crosby was better, but I don't
think we can use Robeson. Personally, I

don't know why we can't use the man that

did the other song for us.
Kuhn:

There is another Negro singer who has done

that thing in the same way.

Graves:

Jules Bledsoe.

H.M.Jr:

Do you want a Negro to do that? "I Am An

American." You have got a third of the
population. Do you want to do that?

Kuhn:

Well, it is the resonant voice --

H.M.Jr:

But not for a movie.

Kuhn:

Oh, I see, for a movie.

H.M.Jr:

For a movie.

Odegard:

No, I don't think so, not for the movie.

H.M.Jr:

No.

Now, one other thing - I am going to let

you talk, Harold, don't worry. And this

you should tell Bell about. I told - I

wish you would make notes on this. I told

The Comptroller of the Currency over a week
ago - he was bothered because he had been

criticized by the Giannini people because
he won't let them have branches in California.

So I told him to look into the possibility

of having a Treasury office at every camp in
the United States, patterned after the
Consolidated Ticket Office down here, where
a man can go either to cash a check or make
a deposit.

38
-8Odegard:

Or buy a bond.

H.M.Jr:

Now, and that is the thing I didn't tell
him, or buy a bond. You beat me

a and the
see. was there

you Is big waste I land, down by yesterday. fifteenth to it, It

of September they are going to have twentyfour thousand soldiers learning how to be
mechanics at Biloxi,

Now, whatever the finance office is, where

the men get paid, you see, in the Army camps,
the United States Treasury should have an

office where they will sell bonds, stamps,

cash a check or make a deposit for any bank
in the United States. Do you see, Harold?
Graves:

Yes, sir.

H.M.Jr:

And I don't want to be told it can't be
done. It can be done. I can go down to
Union Station and buy a ticket to Seattle
and come back via Los Angeles and make

twenty different stops, and they can work
out their bookkeeping. Certainly we can

do it. They will tell you it can't be done.
I want it done, and it is great advertising

for the Treasury, you see. Service to the
soldiers. I mean, we cash this check, let
them make a deposit, remit it to the bank,
or sell a bond or stamp, and it should be

in the office - don't you think so - how

do they pay soldiers and where do they go
to get their checks?
Graves:

I think there is a paymaster with every unit.

H.M.Jr:

Do they have to line up?

Graves:

I think so. I don't know

H.M.Jr:

If they don't have to line up, then I would
rather have it in these United Service things,
that is where I would rather have it.

Kuhn:

Isn't there more than one paymaster in a camp,

Harold?

-9Graves:

Well, there would be one paymaster-in-chief

H.M.Jr:

Well, will you, Harold, put a high pressure

and I think--

fellow on that, because when you go up against

the regular Treasury organizations they will
give you all the reasons why it can't be done.

Graves:

You want me to do it myself?

H.M.Jr:

I want you to handle it yourself. I said
"high pressure".

Graves:

You also mentioned Dan.

H.M.Jr:

I said tell him because the Comptroller is
under him, but Dan has had nothing to do with
this.

Graves:

The agency which would supervise this for us

is Bartelt's organization, which also comes

under Dan.
H.M.Jr:

And Preston Delano.

Graves:

Yes.

H.M.Jr:

But I want you to do it.

Graves:

Yes, sir.

H.M.Jr:

Now I am sorry to have taken up so much time,

Graves:

I have only a little item. In the first place,

but I am full of this.

I thought I would tell you our appropriation

situation. We went down with the request
for a supplemental appropriation amounting to

six million dollars, of which three and a half

million was for the defense savings staff,
and two and a half million was Broughton's

-10-

routine operations. The House Committee gave

us five and a half million of our six, without
indicating where it was to be used. Dan and
I agreed that we would let that stand. We

may run out of money-H.M.Jr:
Graves:

We can go back again.

We will go back. I told you about the picture

and I suppose I ought to hear from Sammy Klaus
about that.
About Ford: We have through our Michigan
State organization a promise from the CIO

organization in the Ford plant and the promise of Edsel Ford himself, personally,

that they will install the savings plan in
that plant. It hasn't been done yet. As

you know, they have been busy on settling their

dispute. It is now settled and I think in ten
days--

H.M.Jr:

You have already told me that.

Graves:

I mentioned it over the phone.

H.M.Jr:

Yes.

Graves:

Your button--

H.M.Jr:

Yes.

Graves:

I didn't get a button, but there is a replica.

H.M.Jr:

You know, I am switching.

Odegard:

On buttons?

H.M.Jr:

I am thinking about it.

Graves:

I think I had better take Odegard to one side

and --

-11-

H.M.Jr:

I am switching.

Graves:

And push him around a little bit.

H.M.Jr:

I am switching. America loves buttons. Well,

all right, you take --

Odegard:

That is one reason why --

H.M.Jr:

Go ahead, finish.

Odegard:

You have buttons for your United Service
Organizations. You have buttons for Greek

Relief, you have buttons for British Relief,

you have buttons for everything under the sun,

and if you start going in for buttons for

the Defense Savings Staff now as a designation
of someone who is cooperating with this program, you run into competition simply because

Americans like buttons so much. They like

buttons. They don't like to wear half a

dozen buttons. They like to wear one button.
H.M.Jr:

Have you seen any stickers on automobiles?

Odegard:

No, I think that is a different thing.

H.M.Jr:

How about a sticker for an automobile.

Odegard:

I think that is O.K.

H.M.Jr:

Will you go along on that? I haven't seen a
sticker on an automobile.

Odegard:

No. I sent Mr. Powel very early a memorandum
summarizing the things that were done in
the Liberty Loan drives. You (Graves) may
remember that.

Graves:

Yes.

-12Odegard:

They put out forty million stickers. The
second
Liberty Loan drive, forty million
stickers.

H.M.Jr:

For cars?

Odegard:

For cars and so on. There is no reason we
couldn't do that.

H.M.Jr:

HOW about stickers for cars?

Odegard:

That is what I am speaking of.

H.M.Jr:

All right. Will you put it down? Harold,
think about it. Now, are you finished,
because I have got one other thing.

Graves:

I am not finished, but I will wait.

H.M.Jr:

All right. I was tremendously impressed
with this billboard poster which I saw that

the First National Bank was doing downstairs.

Now-Odegard:

It is a very nice job.

H.M.Jr:

A beautiful job. Now, your friend Harford
Powel said that Wrigley offered us all of
his billboards. I don't know whether he was
talking through his hat or not. When I
spoke to him--the thing that always happens
is, instead of kindling my enthusiasm, he

always throws a cold bucket of water on it.

Now, a suggestion I would like you to make
to him today, and give me an answer in twentyfour hours--he could get on the telephone--

if the statement he made is true, that Wrigley

has offered us all of his billboards, then
I would like to know--] have changed. I said
no billboards at the beginning. Couldn't we

take that exact thing and where it says on
sale or something at the bottom, First National

-13-

Bank of Chicago, I am not interested any

more in saying where it is on sale. Simply say,
"Through the courtesy of the Wrigley Manufacturing Company," you see. Just Through the

courtesy of the Wrigley--' so it would be

the same color and everything, but where it
says First National Bank of Chicago", instead
of that, simply say "Through the courtesy of--"
I mean, it doesn't have to be exactly those

words, but where the printing is "First Nat-

ional Bank of Chicago," I would put in, "Through
the courtesy of the Wrigley Manufacturing Com-

pany, Manufacturers of Chewing Gum, etc.
Kuhn:

The same poster?

H.M.Jr:

I want exactly the same poster. The only
difference, where the word is the "First
National Bank of Chicago", I would put in
the word, "Through the courtesy of the Wrigley Manufacturing Company". I would just

like to call Mr. Harford Powel's bluff. He

made the statement that the Wrigley people

had offered us all of their billboards; is
that right?

Odegard:

H.M.Jr:

That is right.
I want to call his bluff, and I would like an

answer tomorrow morning. He can get on the
phone. They may say, well, we may have to

print those posters for them. Well, that

would be reasonable. But that exact poster.
Are you with me, Gentlemen?
Graves:

Yes.

Odegard:

I would suggest--Ferdie and I looked at it.
I would suggest one change. It isn't serious.
The poster now reads, "for defense and investment." Investment is not a plus symbol for

-14-

most Americans, but security is. "For
defense and security." It seems picayunish,
but it makes a better-H.M.Jr:

Defense and security?

Odegard:

Yes.

H.M.Jr:

I like it.

Kuhn:

Now it reads, "For defense and investment."

H.M.Jr:

One balances the other.

Odegard:

Yes.

H.M.Jr:

I agree.

Odegard:

After all, defense is for security.

H.M.Jr:

Do you agree with me as to just throwing that
on the billboards?

Odegard:

Oh, yes, I think that is fine.

Kuhn:

It is a beautiful poster.

H.M.Jr:

Down below it says "First National Bank of
Chicago" say "Through the courtesy of Wrigley

Manufacturers.
Kuhn:

That is what Powel has done with all these
other manufacturers who have put out posters

for us. They simply say, "Through the courtesy of Simmons Beds" and so forth.

H.M.Jr:

But it is all of that trick stuff. But this

is a beautiful job.
Odegard:

To come back to the stickers, Mr. Secretary,

if I might clarify that, if possible and not

-15-

inconsistent with the Bureau's policy, if

we could reproduce the original stamp design
of America on guard, rather than "For Defense"

on the stickers, instead of having it read,
"I have invested in America" or something

like that, just have the S ticker on a car,
not for the purpose of designating this car

as someone who has invested, but for the purpose of getting a broader impact for our

program.
H.M.Jr:
Graves:

Check on that. I agree with you.
In other words, we just put a poster on a

car, that is what that amounts to. It doesn't
designate the owner of the car as belonging to
a club or anything.
Odegard:

I checked, and it would be a grand job for the
Boy Scouts, the stickers. Now, are you all
right?

Graves:

Well, I did want to bring you up to date
about this field organization thing.

H.M.Jr:

Well, you had better come back, because I have
got my press now.

Odegard:

Are you going to take up this check thing?

H.M.Jr:

Wait a minute.

Kuhn:

Mr. Secretary, you have an 11 o'clock that

is cancelle d; you remember, you changed the
date on him and he can't come this morning.

H.M.Jr:

All right. You can have 11 o'clock. Gentle-

men, I will you see you again at eleven.

June 26, 1941
11:00 a.m.
RE DEFENSE SAVINGS BONDS

Present:

Mr. Graves
Mr. Kuhn
Mr. Odegard

Mrs. Klotz
H.M.Jr:

I have got a call in for Howard Dietz and
I asked him to come to the farm either
Saturday or Sunday. He would like to

come Sunday, but he said he was asked to
come down here Monday by Harford Powel.

He would like to get out of it. Does

anybody know what Powel wants him for?

Graves:

I only suspect that it has to do with the

memorandum that you sent to Mr. Kuhn yesterday.
H.M.Jr:

Let's get Powel on the wire.

Kuhn:

I know that Dietz hasn't been down here for
a long time, and there were various matters

that Powel, I think, wanted to talk to him

about.

Klotz:

He is not well. I gather from his conversation that he didn't want to come, but

didn't want to turn them down.
H.M.Jr:

Who did you speak to?

Klotz:

Dietz.

H.M.Jr:

Dietz himself?

-2Klotz:

Yes, I talked to him.

H.M.Jr:

Good.

(Unrecorded telephone conversation with

Mr. Powel)

Klotz:

Of course, I am just reading into this,
you know.

H.M.Jr:

Yes.

Klotz:

I thought you could ask him.

Graves:

While you are waiting for Mr. Dietz, I

might tell you a little gossip. I spent

last night with Callahan because I broadcast a couple of minutes on a program at
nine o' clock and again at midnight.
H.M.Jr:

You broadcast?

Graves:

Just a couple of minutes on the Texaco Hour
to announce the Treasury program for next
week. Callahan told me that he had heard

that Dietz was very tired and wanted to get

out of this job. He didn't tell me who told

him, but said he had heard that. I thought

maybe it was something you should know.
H.M.Jr:

Well, he was keen to come to the farm,
wasn't he?

Klotz:

Yes. Well, he thought of it as a lark,
coming to see you, so much so that he wanted
to take his wife.

Graves:

I think he is overworked. He has this

Texaco Hour on his hands and the motion

picture thing on his hands, and it takes
a lot of his time. I know when I last saw
him he said that he was tired.

-3H.M.Jr:

Well, he said something about he hoped

he would get this thing through, but he
said that he had gotten somebody to help

him now on the Texaco Hour and he hoped

to turn it all over to him.

Graves:

He probably means Monroe.

H.M.Jr:

No, another name. No, he has gotten some-

body else. No, it was not Monroe.

Graves:

I asked Callahan if anything should happen

to Dietz if that would cripple us on the
Texaco thing, and he said not at all, that

we were far enough along, that we could go
ahead on that without Dietz.
H.M.Jr:

Has Dietz given it much time?

Graves:

That I don't know.
(The Secretary held a telephone conversation with

Mr. Dietz as follows.)

June 26, 1941
11:07 a.m.

HMJr2

Hello.

Operator:

Howard Deitz.

HMJr:

Hello.

Howard

Deitz:

Hello, Mr. Morgenthau.

HMJr:

How are you feeling?

Well, I feel a little

weak, but I feel perfectly
able to function.
HMJr:

Are you home?

No, I'm in my office.

HMJr:

I see. Mr. Deitz, if you
are 80 inclined, I'd love
it if you and Mrs. Deitz

would come over to see me

in the country.

HMJr:
D:

Well, I - your secretary
told me about it and I'd

like to very much.
Will Mrs. Deitz come too?

Yes, she'd love it and I was
given a choice of either
Saturday or Sunday, is that
right?

HMJr:
D:

That's right.
And I thought Sunday would
be better.

-2HMJr

Now, where could we pick
you up?

I should say that La Guardia
Field wouldbe the most
convenient.

HMJr:

Is that the

The La Guardia Airport.

HMJr:

There's no place down there
where you live?

Well, I live out at Sands
Point and to find any there are a few private
airports, but I think that
the best place will be it's only about 30 minutes
for us to drive to La Guardia,
I see. Well, you are near
Sands Point?

HMJr:

Yes.

I'll have our people look it

over and see 1f there's anything

near there.
D:

Is it - is it land or sea?

HMJr:

Both, it's an amphibian.

HMJr:
D:

HMJr:

oh well, then you could land
right in Port Washington.
You could?

Oh yes, right at Port Washington
at either the Manhattan Yacht
Club or the Sands Point Bath
Club. Seaplanes have come in
there or the regular former
Clipper landing.

Well, you know - you familiar
with either one of those?

I'm familiar with all of
them.

HMJr:

Which
is the easier, do "you
know?

Well, the - I don't know
what they call it - you know
where the Clipper went off

HMJr:

Where the Pan American

Yes, the Pan American Airway

there - I don't know whether
they ve discontinued that as

HMJr:

I tell you what I'11 do, so

that - if you - I'll have our

men look it over and who could

they let know in your office

80 they won't bother you.
D:

HMJr:

Well. they can just call me
and I'11 tell my secretary
to take the call.
All right, and I'11 have them
look it over - what spot that's Port Washington?

Yes.

HMJr:

And is 2:30 a good time?

2:30 is a fine time.

HMJr:

I'll have a Grumman Amphibian

at Port Washington for you.
D:

That sounds very exciting.

HMJr:

What?

That sounds very exciting.

HMJr:

And they'11 take you and

Mrs. Deitz over to our

airport which is just 20

minutes from where I live.
D:

Good.

HMJr:

We'll land you on the airport
there.

Well, that will be fine. Now,

Mr. Morgenthau?
HMJr:

Yes.

Is one of the things that we're

HMJr:

to discuss, the radio programs.
The thing that I have most -

is not the radio, no.

HMJr:
D:

I tell you the reason I....
No, it's not,- go ahead, please.
The reason I said that was, I
was going to take with me

HMJr:

No..

But I won't. No.

HMJr:

No, this 18 not radio - let that's what I want to tell
you what it is.

I see.

HMJr:

What I'd like to talk with you

is the possibility of putting

on Ballad for Americans in the
movies, you see.
D:

HMJr:

Yes.

I don't know whether you ever

heard it.

5D:

No, I don't think I have.
I mean - you don't mean
this

HMJr:

Yes,

on yes, I think I have heard
that.

HMJr:

Yes. Have that ever been done
in the movies?

I don't think 80. I'll find
out. (talks aside)

HMJr:

Well, there's two records,
there's one by Robeson that
I don't think we could use,

I mean Robeson and the other
one, Bing Crosby's on the
record.

Yes.

HMJr:

Which is fair.

Yes.

HMJr:

You might want to get the
Bing Crosby and hear it.

I got it last night, but I
thought to do that - it 80

happened when I had this

idea, I didn't know it -

Fortune magazine is printing
the poem in August with the
photograph of the various

people mentioned.
D:

HMJr:

Yes.

All through the pictures, I

mean all through the book,

you see. They got the idea

also, but I got it first (Laughs)

Yes.

HMJr:

And then the other thing

that I want to put into the

movies if it's never been
done is, America, The
Beautiful.

America, The Beautiful.

Now, what - that - Ballad
for Americans, I'm very

familiar with. I know it
all the way. America, The
Beautiful, I don't.

HMJr:

America, The Beautiful is

a hymn.
D:

It's a hymn.

HMJr:

And it has - if you could

send for that and have it,

I'd like
D:

America, The Beautiful, I
want to get.

HMJr:

And in that, I want it in

In technicolor?

HMJr:

Yes.

Well, I don't see why it

four colors, if I

can't be done. The

HMJr:

My thought on these two

things - that's what I
wanted to talk to you -

I mean, I've gotten more

thrill out of Irving Berlin's

song, you see. I don't know
and these two things, if you
thought well of them and the
moving picture industry thought
well of them, we could put them
on and all we want out of it

how it affects the public

would be, my thought would be

just - well; at the beginning

-7or the end, Under the Auspices
of the Treasury Defense Savings
Bond Section, you see?

HMJr:

Yes.

No
advertising, but this thing
for morale.

I tell you the first consideration

before we get to a real discussion
of it, I will have done some preliminary work about it before I
see you.

HMJr:
D:

Yes.

But the first consideration is
this. If we are to release these
films as a regular film service for
which the theatres pay, that is
one type of distribution. If we
are to get - ask them to run it
as a patriotic service, that
almost practically involves,

that we give them the print free.
Now, there are two ways, I don't
know which is the most satisfactory
from our point of view.
HMJr:

Well, from my point of view it that isn't important. What
I want to try to do is this that's why I want to talk to you.
Until Mr. Roosevelt has the
I want to do
morale

all I can, you see, with your
help.

Good.

HMJr:

And it's on that front that I
want to talk to you about.

8D:

Good.

HMJr:

Not about the Texaco hour.

Good. Now, we'll make an

over all plan and probably

get some where on Sunday.
HMJr:

That's what I thought.

Well, that's very fine.

HMJr:

And a - and we'll get you
back in time for supper
because they got to take
off before sunset there.
I mean, they'11 have to
land before sunset.

Well, I'll be ready and
waiting.

HMJr:

I don't think it'11 take

you more than 30, 40 minutes

to fly over you see while if
you did it in a car it would
take you, I don't know how

many hours.
D:

Yes.

HMJr:

Now, Monday - forget Monday.

All right.

HMJr:

Cancel out Monday.

And a......

We don't want to use a good
thing too much.
I see.

HMJr:

Or wear out our welcome.

HMJr:

57
9D:

HMJr:

I see, yes.
I mean, Monday was a silly

thing anyway. Powell is

running a plane down here,

they're opening 80-called
"Treasury House".

Yes.

HMJr:

Outside here in connection
with Standard 011 of New

Jersey, but I wouldn't wear
myself out unless - unless
it's something you want to
do.

HMJr:

I see. Well, I think
It's not necessary from our
standpoint.

Well now that's fine, then
I won't do it because I have
a number of things here to
do and after I've talked to
you on Sunday, I think I'll

have an additional program to
embark upon.

HMJr:

You mean, for us.

For us, yes.

HMJr:

And as I say, I hope that you
will say you' a have time
enough to do this sort of thing

and once the Texaco is launched -

you say you got somebody now
to help you anyway.
D:

I think 80. I think I can

get out from under on that.
HMJr:

That'11 be wonderul.

But it's just a question of -

you see some of the people -

58
10 -

it's just a question of

direct contact. I mean
others are not as able to
ask
the person to do something
as I am.
HMJr:
D:

HMJr:

I'm sure of that.

And that's all there is to
it, really and looking at
the script, I just wanted
to be sure that the scripts
don t get silly.
Well, you see, I happen to
be prejudiced in favor of the
movies, as against the radio,

and that's why I'd like to

do more through the movies
than we have been doing.

I was in touch - I've been

in touch with Carl Carmer.
HMJr:

Oh, fine.

And he's sending me his

script and then he's coming

in - he lives right near me,
and I will surely follow that

out. I told him I thought it
preliminary talk until I read

wasn't necessary to have a

those sketches and he's sending
them to me by mail today.

HMJr:

And that's another thing I
want to talk to you about.

Well, I ought to have had them
and read them by the time I
see you.

HMJr:

It's about these, what I call
for a better name, shorts on

civil liberties.

Yee, maybe we can make movies

out of those too.

59
11-

HMJr:

Well, that's - that - I

didn't have those in mind

for the radio. I had them
in mind for the movies.

Well, I see. Well, maybe
we can do both if there's if you have no objection to
that.

HMJr:

No, no, but the movies to me -

I think it lives longer, and
that's why I'd like to do

the movie thing first and
then if they want to pick
it up on the radio afterwards,

that's all right.
D:

May I ask this one question
while you're on the telephone.
On the question of the

Liberty Bell striking on this
program, is that a pet idea
of yours? I mean

HMJr:

No. It's a - I would call
it a nuisance idea.

Well, I'm trying it and it
looks as if it is a nuisance
idea.

HMJr
D:

HMJr:
D:

Forget it.
We can't forget it.
It's Powell's pet, not mine.
Well Powell had the pet and

I thought it was yours and if
it was I'd have followed it
right through and naturally

we'd do it, but as it's
switching lines, and an

awkward switch, and not much

to be gotten out of it. We
have enough vitality on the
program to create a patriotic
atmosphere.

- 12 HMJr:

I think they announced it
last night.

Yes, they did announce it.

HMJr:

I'm afraid so.

I wonder if that's a betrayal
if we don't do it. Perhaps we'd

have to come through on that.
HM

HMJr:

I'm afraid they - I'm afraid

they announced it last night.

Yeah, I heard it announced.
I heard Mr. Graves. But I
was wondering whether the

public really pays attention
to that, you know (laughs)

HMJr:

Well

I wonder if I can still

throw it into the optional

class.
HMJr:

Yes.

Or whether it'e a must.

HMJr:

Don't let it worry you.

I won't, but I'11 - at our
conference today I'll see

HMJr:
D:

what - just what it involves.
Don't let it worry you.
Thank you very much and then

I'll wait for a message about
Sunday.

HMJr:

Nov, just SO I - what is
your telephone number in

Long Island?

My telephone number in Long

Ieland is Port Washington, 560.

HMJr:

Port Washington, 560. Now just I'11 get you the name of the

officer who'e going to contact

you - now, just a moment please.
(Talks aside) Captain Baylie.
D:

Captain Baylis.

HMJr:

Yes, he's a - he's the -

Coast Guard.

Captain Baylie of the Coast
Guard and he will call here

at this office.

HMJr:

He'11 make the arrangements.

He can call your secretary and
also you - I'm going to make
him responsible for getting
you over there.

Thank you very much and I'll

HMJr:

His name is Captain Baylie.

And I'll be waiting and looking
forward to seeing you.

HMJr:

All right.

Thank you very much. Goodbye.

4Kuhn:

He didn't sound so weak on the phone.

H.M.Jr:

I remember the first time I did that.

Klotz:

It
is exciting. What about the Liberty
Bell?

Graves:

Well, the function that I performed last

It is fun, isn't it?

night on the Texaco Hour was to announce
the first program, and we not only announted

that the Liberty Bell would be rung, but

we made a little feature of it and it would
not do, in my opinion, to omit the Liberty

Bell after what was said in the announcement.

H.M.Jr:

Well, you heard what he said. If the man
is worried and it is going to be a nuisance,
do you feel let down?

Graves:

Oh, I don't feel let down; it is the Treasury
that is being let down.

Odegard:

It should be done, because it is really a

historic thing. The Liberty Bell is not

sounded - I don't think it has ever been
sounded before.

Graves:

I have never heard of it.

Odegard:

Like this, and I am inclined to think that
it - particularly in view of the announce-

ment that many, many people, thousands of

them, will listen to that program because

they will say, "Here you will hear the
Liberty Bell for the first time and perhaps
the only time.

Graves:

I have assumed that Mr. Dietz knew and
approved that.

H.M.Jr:

Because it was submitted to me and I made

-5-

no inquiry about any feature of it. I

think
it is too far. You can't officially
announce it and not do it.

Kuhn:

You couldn't begin your programs by letting
them down on something you announced.

Graves:

Because that is important. I have the
same feeling that Peter has, that a lot
of people are going to listen to that
program to hear the Liberty Bell.

Klotz:

It is silly, but never mind.

Graves:

Yes --

Klotz:

Yes, I mean --

Odegard:

The Liberty Bell was taken on tour some
years ago and the crowds were so great --

Klotz:

Terrific, I know.

Odegard:

for the opportunity to come and touch

it. In fact, It got very maudlin, because

many of the D.A.R Chapters and Sons of the
American Revolution arranged to kiss the

Liberty Bell. (Laughter)
Klotz:

As I say, it is silly but that is how they
feel about it.

Graves:

Well, a lot of people are sentimental about

it, Mrs. Klotz.

Kuhn:

I think we could do ourselves good in

Philadelphia, also. I think if this were
done from Philadelphia, it would --

Graves:

If it is not going to cause Mr. Dietz any
trouble because --

(Mrs. McHugh entered the conference and

the Secretary diotated a telegram.)
H.M.Jr:

Mr. Howard Dietz, Metro Goldwyn Mayer,

at the New York address, whatever it is,

rush telegram:

"Harold Graves, Ferdinand Kuhn and Peter
Odegard disagree with me one hundred

percent." (Laughter)

Klotz:
H.M.Jr:

That is marvelous.

"They feel that it is most important that

the Liberty Bell be sounded in connection
with our July 2 program."
Klotz:

Be rung.

H.M.Jr:

"Period." Put in the word "paragraph."

"Such is the life of the Secretary of the

Treasury." (Laughter)
Klotz:

That is marvelous. That is really wonder-

H.M.Jr:

Signed, Henry Morgenthau, Jr.

Graves:

May I suggest one addition to that?

H.M.Jr:

You would spoil it.

Graves:

I don't think so. I was going to suggest,
particularly in view of last night's

ful.

announcement.

H.M.Jr:

No, he heard that. No, no, excuse me, that
weakens it.

You (Mrs. McHugh) initial it and let it go.

Mark it rush.

-7-

Mrs. McHugh: All right, sir.
(Mrs. McHugh left the conference.)
Klotz:

Am I unpatriotic?

Odegard:

No, sir.

Kuhn:

You had better give that to Gaier when
he goes over the Treasury papers.

H.M.Jr:

It is all right.

Klotz:

We have got many such, Mr. Kuhn.

Kuhn:

I know it.

H.M.Jr:

That is all right. That is why you fellows
stick around.

We can't have civil liberties right here

in the middle of us and then have somebody
pound his desk and say, "That is how I
want it. "

TREASURY DEPARTMENT

STANDARD FORM No. 14 A
APPROVED BY THE PRESIDENT

WASHINGTON

MARCH 10, 1926

TELEGRAM
OFFICIAL BUSINESS-GOVERNMENT RATES

CHARGE TREASURY DEPARTMENT APPROPRIATION FOR

(The Official which payable must be stated on above line)

RUSI

JUNE 26 1941

MR HOWARD DIETZ
METRO#GOLDWYN-MAYER
1540 BROADWAY
NEW YORK NEW YORK

HAROLD GRAVES FERDINAND KUHN AND PETER ODEGARDE DISAGREE

WITH ME ONE HUNDRED PER CENT THEY FEEL THAT IT IS MOST
IMPORTANT THAT THE LIBERTY BELL BE SOUNDED IN CONNECTION
WITH OUR JULY SECOND PROGRAM PARAGRAPH SUCH IS THE
LIFE OF THE SECRETARY OF THE TREASURY

HENRY MORGENTHAU, JR.

2-14117

67
Secretary Morgenthau
Room 280

DEFENSE SAVINGS STAFF
ADVANCE NOTICE RADIO PROGRAMS

THURSDAY - JUNE 26, 1941

Time:

8:45 - 9:00 A.M.

Time:

Program:

Hymns of All Churches

Program: John's Other Wife

2:30 - 2:45 P.M.

Station: WMAL

Station: WJSV

Time:

9:45 - 10:00 A.M.

Time:

Program:

Woman of Courage

Program: Portia Faces Life
Station: WRC

Station: WJSV

Time:

4:15 - HISO P.M.

10:45 - 11:00 A.M.

Time:

5:45 - 6:00 P.M.

Program: Aunt Jenny

Program: Lowel Thomas News

Station: WJSV

Station WMAL

Time:

1:15 - 1:30 P.M.

Time:

9:15 - 9:45 P.M.

Program: hystery Man

Program: Professor Quiz

Station: WRC

Station: WJSV

Note: In addition to the above, each of the 868 radio
stations in the United States, territories, and
possessions are broadcasting five Defense Bonds
and Stamps announcements each day.

THESE PROGRAMS PROMOTE SALE OF DEFENSE BONDS AND STAMPS.

68
CONFIDENTIAL
UNITED STATES SAVINGS BONDS AND SAVINGS STAMPS

Sales in June Compared with May, 1941

On Basis of Issue Price

First Twenty-one Business Days
(May 1-24, June 1-25)

(Amounts in thousands of dollars)

Series E - Total
Series F - Banks
Series G - Banks
Total

Stamps

May

Series E - Banks

June

Series E - Post Offices

Increase or
Decrease (-)
Amount :
Percent

Sales
:

Item

$ 33,788

$ 34,366

52,501

49,650

2,851

86,289
18,540
115,827

84,017
35,714
215,626

- 17,174
- 99,799

- 48.1
- 46.3

$220,655

$335,356

-$114,701

- 34.2%

$ 2,489

$ 2,982

- 16.5%

578

2,272

Treasury Department,

Division of Research and Statistics.

493

1.7%

5.7
2.7

June 26, 1941.

Source: Division of Savings Bonds. Figures shown as post office sales of
Series E bonds are deposits by postmasters with the Treasurer of
the United States. The bank figures are taken from Federal
Reserve Bank reports (daily) and include their own sales. Stamp
figures are estimated by the Post Office Department; figures
through June 7 have been prorated to agree with complete reports
by postmasters which are made quarter-monthly.

Note: Figures have been rounded to nearest thousand and will not

necessarily add to totals.

Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
prorated to agree with complete reports by postmasters which are made quarter-monthly.
their own sales. Stamp figures are estimated by the Post Office Department: from June 2 through June 7 they have bee
the Treasurer of the United States. The bank figures are taken from Federal Reserve Bank reports (daily) and include
Source: Division of Savings Bonds. Figures shown as post office sales of Series E bonds are deposits by postmaters with
June 26, 1941.

treasury Department, Division of Research and Statistics.

$2,489

$115,827

$ 18.540

$ 52,501

$186,868

$ 33,788

$115,827

$ 18,540

$ 86,289

$220,655

123

6,124
5,653
5,126

1,004

2,334
2.955
2,583

9,462
9.513
8,372

1,378

6,124
5,653
5,126

1,004

3,712
3,738
4,938

10,840
10,296
10,727

1,532
2,131
2.772
2,655
2,227
2,498

5,883
8,519
8,325
9,434
7,006
8,608

3.596
5,641
4,729
6,145
4,100
5,294

755

3,213
3.721
4,332
3,824
2,921
4,890

7,564
10,109
9,886
10,604
7,701
11,001

1,335
2,193
2,324
2,575
2,792
3,021

4,418
8,196
8,048
8,495
7,978
8,542

1,108
1,582
1,356
1,524

2,444
3.776
3,679
4,098
3,675
6,145

5,526
9.778
9,403
10,018
8,861
11,666

1,090
1,193
1,265
1,541

1,631
2,453
2,800
3,110
3,143

1,500
2,283
1,813
1,707

$ 1,097

$ 3,437

5,808
8,969
12,674
17,291
10,817
$ 10,511

116
126

3,596
5,641
4,729
6,145
4,100
5,294

115

125
157
156

143

2,572
5,254
4,933
5,169
4,403
4,710

100
120
100
99

124
121

135

3,246
5,425
8,681
12,916
6,133

134

$ 5,976

118
101
108

906
663
755
747
825

634
679

817
510
749
791
751
783

811

930

783

2,355
1,681
1,590
1,560
1,169
694

2,393

883

3,124

2,572
5,254
4,933
5,169
4,403
4,710

906
663

747

825

634
679
817
510
749
791
751
783

811

971

3,246
5,425
8,681
12,916
6,133

$ 2,333

1,090
1,193
1,265
1,541

3,131
4,736
4,614
4,817
4,113

$ 5,976

$ 1,097

7,308
11,252
14,487
18,998
11,788

$ 5.771

$ 12,844

930

Total
25
24
23

20
19

18
17
16

13
12
11
10
9

June 1941

Series 6

Series F

Series E

Stamps

Savings

Bank Bond Sales

Total

Series E

Series G

Bond Sales

Post Office

(In thousands of dollars)
On Basis of Issue Price
CONFIDENTIAL

Daily Sales - June 1941

UNITED STATES SAVINGS BONDS AND SAVINGS STAMPS

Series F

Series E

All Bond Sales

Total
Date

June 26, 1941
11:50 a.m.

HMJr:

Hello,

Jesse
Jones;

Hello, Henry.

HMJr:

How are you?

All right. Did you have

HMJr:

a pleasant trip?
Well, it was an awfully
hard trip, Jesse.

What time did you leave
yesterday morning?

HMJr:

7:20.

And what time did you get
back?

HMJr:

Exactly at midnight.

Huh?

HMJr:

Exactly at midnight.

You did?

HMJr:

Yeah.

Well you did have quite

HMJr:

It was 940 miles each

a hard trip.

way, but I'm awfully glad
I went.

Yes. Lot of people down

HMJr:

A lot of people. Lot of

there I suppose.

friends of both you and me.

Good many people from the

HMJr:

From where?

From the Congress - Hill.

Hill

And a lot of the very
prominent a were all there.

HMJr:

Yeah.

HMJr:

George and Jimmy Byrnes

Well, that's fine. I'm

HMJr:

Yes.

and Tom Connally and lot
of people.

awfully glad you could go.
Well, now we're getting along
just fairly well with our
friends discussing terms and
conditions and things of that
kind. We - you may have seen

about Journal

three where
days they ago got
Istory,
don'the
t know

it - indicating we are going

to do this and using some rather
large figures.

HMJr:

No, I didn't see it.
And then, 60 yesterday I
made a very small release
to the effect that we were I suppose you saw that one

HMJr

That I saw and I had an awfully
hard time at my own press
conference on account of it.
Yeah, did you have one this
morning?

-3HMJr:

Yeah. Very difficult

but I told them that you
and I started to talk about
that about three months ago

and I said that I thought
that your foresight in this

matter proved to be correct.
Now, in order to keep my

position straight in view of,
particularly Arthur Krock I don't know whether you saw

that today or not.

I glanced at it, but I didn't
read it carefully. I don't
even remember what it was.

HMJr:

Well, what I told them was

this. As usual he's trying

to make trouble and that
you were loaning these people proposing to lend them this
money with my full knowledge

and approval - in fact I
sent them to you.

Yeah.

HMJr:

And that, however - I mean
they went back to my testimony
and sometimes we have to be

consistant, but I hadn' changed
my position and eventually the
themselves of their
English just
American holdings. Now, I don't

know whether that 2 and 2 makes

4, but at least, but that's

what I testified, and 60 I'm
sticking by my guns.

That's right.

HMJr:

Now, they said, "How much were

you going to loan them" and I
said tha was your business

and your responsiolllly.

Year

HMJr:

But they were trying awfully

hard to drive a wedge between
the Tribune wa 8 on the war
path this morning.

us. This fellow, Gregory of

He was, eh?

HMJr:

Yes, he's very difficult.
And a - so - I don't know
how it will look in the papers
but anyway

HMJr:

I'm sure you took care of

yourself, all right.
Well, I tried to take care
of you and me.

Well, I appreciate that.

HMJr:

In fact I used your name and

I said that I'm sure that

you could ascribe to what

I said.

Gregory called me up - I
think it was yesterday or

day before and he asked me

a direct question which I
said was not a fact. He

could have asked hie question

differently and I would have and he might have gotten an
@vasive or different answer.

HMJr:

Well, he - at my press conference

he said he called you in front
of everybody, but he didn't say
what it was, but he tried to make
out as though what you said was
contrary to what I was telling
them at the press conference.

Yeah, I see.

74
4

HMJr:

What I told them at the press

conference was that Sir Edward
Peacock had come in to see me
to say goodbye and that he was
entirely satisfied with the
Viscose deal.

Yeah.

HMJr:

So then Gregory said, well that

Well he didn't - Gregory hasn't

isn't what Jones told me.

even talked to me about the

Viscose deal.
HMJr:

Well

He asked me about this thing
here and he said, "Have you
agreed to make a loan?" and

I said, "No."

HMJr:

Well, what they were trying
to prove, Jesse, was that you
were making this thing to
elap down J. P. Morgan and

Wall Street. That's what they
were trying to build up, you
see?

I see.

HMJr:

And I told them that this

thing was a matter that had
been - that we discussed over
three months ago.

That's right.

HMJr:

And that was long before we
knew there was such a thing
as Viscose.

Yeah.

-5HMJr:

Bo that's the position I
took.

Okay.

HMJr:

What?

Well, now that's the - that's
about the status, we're still as I say, we're still dickering
and we will tomorrow, I think
we're to meet their lawyers

again tomorrow and I just wanted
to keep you

HMJr:

Your issue went over with R
big bang.

Marvelous, wasn't it?

HMJr:

Yeah.

Marvelous.

HMJr:

They seem to like your
securities.

Yeah, well that's a nice

rating - yet it's not a high
rate at all.
Well, the way it looks now,

we could have gone to 3 years.
I never know what tomorrow

is going to bring and I'm on
the conservative side.

HMJr:

Well, not only that, Henry,
it doeen't cost any more dollars,
we just three months difference.
Only three months difference,
it doesn't cost you a penny more.

That's right.
That's right.

HMJr:

Well, that's fine.

I'm happy about it.
Well, I'm glad you're
happy.

Okay. Thanks.

HMJr:

Goodbye.

June 26, 1941
12:03 p.m..

HMJr:

Hello.

Operator:

Mr. White.

HMJr:

Hello.

Operator:

Go ahead.

HMJr:

Harry?

Harry
White:

Yes, sir.

HMJr:

I had an amusing incident

me
me
to
use with

happen. called Harry up to Hopkins get

Sir my Frederick good offices Phillips

in connection with something

the British want to do.

That's very funny.

HMJr:

What?

That's very funny.

HMJr:

Isn't that emusing.

Yeah, very amusing.

HMJr:

what it is. If I can
it
off
get This is my mind and you
bring it up at quarter of
three.

HMJr:

Right.

He - they've worked out an
arrangement with the British
to

ferry planes
from Takoradi,
here
through
Africa
-

you see.
W:

Yeah.

-2HMJr:

They're going to form

an American corporation

who will be the contractor -

making a new Lend-Lease,

everything except the
paying of the personnel.

In the corporation or

who do the ferrying?
HMJr:

No, the corporation - I
mean, the Lend-Lease

get except paid the for actual everything
paying

of the personnel.

Who make up the corporation?

HMJr:

Who make up the corporation.

Right. And they can - yes.

HMJr:

And Hopkins and Air Marshall
Harris wants the way prepared

for them with Phillipe - 80
you supply the dollars for
this.

He gave no indication of

what the magnitude might be.

HMJr:

10 million dollars.

10 million a year.

HMJr:

Right.

And you'd like me to raise

HMJr:

Yeah.

By the way

that at quarter of three.

-3- HMJr :

Doesn't that sound
amusing?

It's very amusing, I'm
surprised (Laughe)

HMJr:

What?

I don't quite understand

HMJr:

What?

it.

I don't understand why

he doesn't do it himself.
By the way, I want it
clear, Mr. Secretary, I
don't have the responsibility
for pushing this thing 80 that's understood, isn't it?
HMJr:

No.

Well, I mean it's in Bell's

hands. He makes the meetings

and not - it's a little bit

embarrassing for me. I suggest
a meeting and he takes it
on his hand, SO I don't want

to take the responsibility

they the

for when they meet or how

often meet. whenever
do, they I participate but to

fullest extent, of course.
HMJr:

I'm calling a meeting this

afternoon.

Yes, you are, but I wanted
that I'm not

not
my
office and so on - I'm not

it calling they' understood re the meeting meetings in and

complaining in any way, but

I just want you to understand
it.

HMJr:

Well, in another few

days we'll get it straightened

out.
W:

HMJr:
W:

Okey, air.
Another few daye.

All right, sir.

June 26, 1941
12:07 p.m.

HMJr:

Hello, Arthur?

Arthur
Purvis:

How are you?

HMJr:
P;

I'm fine, how are you?
I'm a good deal better.

I'm not quite right, but
I've managed to struggle

along with sort of a
hard day work for the

last two days.
HMJr:

Are you home?

No, I'm down at the office.
I've worked up at home for

a time and came down here.

HMJr:

Thought I'd try and get to
that meeting this afternoon.
Well, that was what I was
calling up about. I wondered
if you were well enough to
come.

Yes, I am. I want to come
because I want to go away
at the end of the week and

I thought I'd like to come.

HMJr:

Good. Arthur, I hope we
are going to be able to show
some progress, are we?

Well, now frankly I didn't I haven't had time to check.
I'm now going to check up

in anticipation of the meeting,

you see?
HMJr:

Yes.

don't know what happened

in the last 48 hours.

HMJr:

Good. I wish - well, if you

I'm going to oheck up straight

had time
away.

HMJr:

And here's something else

which I thought - one of these
things personal between you

and me...
P:

Yes.

HMJr:

Which I thought you'd get a rather a laugh out of

HMJr:

Yes.

Hopkins just called me up.
Could I use my good offices

with Sir Frederick Phillips

HMJr:

Yes? (laughs)

To get him to go along on a
corporation they're forming -

an American corporation which

will ferry these planes via

Takoradi to the middle east.

Well, well, well.

HMJr:

That Air Marshall Harris is
interested in.

That's right.

HMJr:

You know about it?

I knew that there WAS going

to be a flying service put
out, I thought, by the Army

here to get those planes across.

83
3-

They were going to take that

over, but I didn't know it was
being done through - for an
American corporation.

HMJr:

Well, it is. I thought it

was interesting that Hopkins
called me up now to get the

dollars for this thing.

I think that's very amusing.

HMJr:

What?

I think that's very amusing.
(Laughs)

HMJr:

I thought

By the way, Henry, I did....

HMJr:

Now, one second. Would you

tell your people and Phillips
that they'11 know something

about that before three?
P:

Yes, I will.

HMJr:

Will you?

I'11 do that.

HMJr:

See? something before - so
they'11 know about it, because

I'm going to raise it at the
meeting.

There was only one thing, Henry,
that was said to me yesterday

when I got down just for the
luncheon at the Council meeting
and that was a remark by Phillips

to the effect that they were a
little worried as to whether the

very desirable situation which you

had brought about whereby Cox

could speak for Hopkins was be-

ginning to disintegrate and

-4it might get back into

the same old situation
where it went round and

round.
HMJr:

Well, this proves that
that isn't 80.

Well, I think you're right.

HMJr:

Because here's Hopkins
1e raising something and

he wants it cleared at

this meeting.
P:

Yes.

HMJr:

And he calls me up and
asks me to help him.

HMJr:

It seems to me that it
should be all right.

Well, isn't that hearly
perfect?

I think you're right. (Laughe)

HMJr:

Otherwords, he recognizes that
that these meetings are to be
the clearing

Clearing house

HMJr:

Clearing house on all dollar
purchases.

I think it's - I must say it's

grand.
HMJr:

Well, how could it be any better?

No, it couldn't. No, I think
it's going
like
that. very well 1f it's

85
5HMJr:

So - it's that way - and

then this is the first thing

so I think we ought to do
it promptly.
P:

HMJr:

You're quite right. Let's
try and do it. I'11 get
right on to my people now.
And because if we do it
promptly, Hopkins will say

swell, then he'll say I

can
clear everything through
there.
P:

HMJr:

That's right.
But if we fool around with

it, he'll say that doesn't
work, I'11 have to try it
some other way.

Yes. Well, we better have
somebody available this
afternoon who knows that
subject.

HMJr:

Yes, who knows that story.

That's it.

HMJr:

What's the matter with
Air Marshall Harris?

Well, he may be the right

HMJr:

Right.

All right, fine, Henry.

HMJr:

Thank you.

Goodbye.

one. I'11 talk with Phillips.

June 26, 1941
2:35 p.m.

tickets for your son on

Callahan:

Saturday night.
HMJr:

Yes.

Well, I happened to go to

New York and I asked Columbia
for them and Mr. Ruppel heard

about it and told me he wanted

to take care of it personally

for you.
HMJr:

Well, is it nothing to do with
Texaco

HMJr:

Nothing to do with Texaco, no
sir.

oh, I thought it had to do
with Texaco.

No. He just - because Mr. Ruppel
knew you, he just came into the

picture of it.
HMJr:

Yeah. Well now, just let me
read this over again in that

light. (Pause) Well, Bob, of
course wouldn't call up Weber.
Can't - can't they get in touch

with the Chaplain, on the Prairie
State. Bob doesn't want to appear

in it.

Sure. Of course, he did that on

his own, Mr. Secretary.
HMJr:

Well, I know Louie Ruppel much

better than you do, see? Have

any communications gone directly
to Bob?

As far as I know, it hasn't.

HMJr:

Well

I just got this a few minutes
ago.

HMJr:

Well, will you call up Louie
Ruppel and tell him this is
just the way I don't want
to do it, see.

All right, sir.

HMJr:

Now, if they have any tickets

or if they give it to you,

Bob has about 5 minutes in

24 hours off - out of that
and that's all. Now if they

want to send some down to the

Chaplain at the Prairie State,
okay, but please not to mention
Bob's name and leave him ou t
of the picture. He doesn't want

to be in on it.

HMJr:

All right, sir.
But leave him out. But if
the Chaplain on the Prairie
State - if they want to give
him some tickets, it will be
very nice.

HMJr:

Well, what - you see what I
was planning when I left New
York, they were mailing the
tickets to me.
Well, that would be even

better, but if the Chaplain
of the Prairie State
Well, I think it would be
better if I got them
them
outpersonally
and much
sent

and that would take them ou t

of it.

HMJr:

know Louie - he's just

goes off halfcocked always.
C:

Well, that's what he did
on
this. I mean, I didn't
I didn't even talk with him
about this.

HMJr:

All right. Well, thank
you very much.

I'11 take care of it.

HMJr:

Thank you.

Okay.

June 26, 1941
2:43 p.m.

HMJr:

Hello.

Operator:

Go ahead.

HMJr:

Hello.

Marvin

McIntyre:

Hello, Henry.

HMJr:

Yeah.

This is McIntyre over at

the White House. How are

you?

HMJr:

I'm wonderful, how are you?

Fine, thank you. Aren't you
going to get up to Dutchess
County over the week end.

HMJr:

Oh, tomorrow afternoon, I
guess.

Uh huh, wish I were going
with you.

HMJr:

Wish you were too.

Henry, Royal McKenna is a

here
in
town,
a
lawyer
but
he's
he
good
stopped to see me this
morning
a and
a memorandum thinks

he's
an
idea
worth
while. an of
a suggestion whereby
Republican, got by with It's and he letter outline makes he that's

the Federal
of can
tap
a new government
source revenue,
which is always interesting.
HMJr:

Yeah.

-2M:

was ifI

I hate to trouble you with
it. I wondering
send it over to you

HMJr:

What, the letter?

Yes, the letter and his supporting
document.

HMJr:
M:

Sure, send the letter over.
And I want to ask a favor in
connection with it.

HMJr:

Yeah.

You'll probably refer it to your

Counsel or somebody to look into

HMJr:
MY

Yeah.

And I wondered if you'd be good
enough to ask them to get in

touch with McKenna because he has

gone out of his way to do something decent and he's not a New
Dealer in any sense of the word.
HMJr:

Let me take a look at it first,

Yeah.

HMJr:

And I'll take a look at it

Bob, and see what it's about?

myself.

oh well, then that's fine.

HMJr:

Take care of yourself.

I'11 send it over to you. It'11

be there when you get back.

HMJr:

Thank you.

Right, Henry. Give my regards to

HMJr:

Same to you.

Right.

the family, will you?

The part of the conference held in
Mr. Bell's office begins on page 20.

92
June 26, 1941
AGENDA FOR 3:00 MEETING

1. Much progress has been made in clarifying the

steps necessary to be taken to expand the coverage of LendLease
arrangements with Dominions and over various types of
commodities.
Funds have been earmarked by Mr. Hopkins to take care
of reimbursements on contracts over $50,000 each placed after

March 11, but the British have not yet selected and submitted
to Mr. Cox the appropriate contracts to be taken care of.

2. Hopkins' inquiry re possibility of British Treasury

supplying dollars with which to pay personnel of contemplated
American corporations created for the purpose of arranging

the ferrying of planes across the Atlantic.

3. Various memoranda that were promised to be ready soon:

(a) On wool, strategic materials, cocoa,
imports on private account
(b) The recent statement of the cash position
4. Actual contracts under $50,000 placed since March 11,
to be submitted to Mr. Cox, (only three have been submitted).

5. Proposed purchases of the British to be submitted

to the committee for examination.

6. Anything further on Dominion needs and centralization

of Dominion purchases here.

7. Recent developments in proposal to borrow dollars
from the Reconstruction Finance Corporation against collateral.

June 26, 1941
2:50 p.m.
RE AID TO BRITAIN
Present:

Mr. Foley

Mr. Cochran
Mr. White

Mr. Purvis

Sir Frederick Phillips

Mr. Keynes
Mr. Thompson

Mr. Childs
Mr. Boddis
Mr. Cox

Mr. Viner
Mr. Archer
Mr. Coyne
Foley:

Here is that letter about Falk, rewritten
for Stimson.

(Mr. Cox entered the conference.)
H.M.Jr:

Hello, Oscar. I wish you wouldn't write
these funny letters for the President to

sign, such as "month by month how much we

got under the billion three", without

sending over an explanation by Oscar Cox.

Cox:

Well, I thought you could tell us without
the explanation.

H.M.Jr:

What do you think we are, nothing but lawyers
around here?

Cox:

Well, you have got a surplus stock account,
haven't you?

94
-2
H.M.Jr:

of lawyers?

Cox:

No, of material, which is more important.

H.M.Jr:

Well anyway, you will hear from the boys,

if you haven't. I see Goodhart, who is

in England - who else is here?
Foley:

Well, I just showed you that clipping. When
I mentioned it, you said he was in England
and I guess that is right.

H.M.Jr:

If and when the speech is finished, I would

Foley:

O.K. I wanted to bring it in with me now,

like to read it.

but they haven't got it off the mimeograph

yet.
H.M.Jr:

Now, Mr. Hopkins called me up. Were you
there when he called me?

Cox:

No.

H.M.Jr:

I should try to use my good offices with the

British Treasury to get some money for Air
Marshal Harris for the American Corporation

which will superintend the flying of planes
from here via Takoradi to Cairo. Do you
know about that?

Cox:

No.

H.M.Jr:

You don't?

Cox:

No.

H.M.Jr:

Well, I called up Purvis and asked him to
post himself before he came. I thought it

was rather amusing. If it gets that tight,
then this committee will really function.

-3Cox:

Oh yes.

H.M.Jr:

If it gets that tight.

Cox:

I should think 80.
(Mr. White distributed copies of his agenda.)

H.M.Jr:

Cox:

"Funds have been earmarked by Mr. Hopkins

to take care of reimbursements on contracts
over fifty thousand dollars each"?

Yes. I talked to him and he said go ahead
and do anything that I wanted on it, so we
earmarked the funds.

Cochran:

That is, for the total or just the ones that
they have submitted?

Cox:

That is the total of the ones after March --

H.M.Jr:

How much does that amount to?

Cox:

About fifty-two million dollars.

H.M.Jr:

How much are we approaching now toward the
four hundred?

White:

Well, what they would purely call - what they
would call relief, I guess it must be something like two hundred twenty-five million;

but what we would call relief, it is an in-

determinate sum. It is well over four hundred
million, possibly over five hundred million.
H.M.Jr:

Well, I won't bring that up today, but will
you please make a note, Harry, to have that

for me when I get back here Tuesday morning?

White:

Yes.

H.M.Jr:

I would like to have a little memo from you

-4 and Oscar of what we could claim for relief.
Say for Tuesday morning, please.
White:

You shall have it.

H.M.Jr:

Now, will they today, or have you before this,
for instance, had any meetings which they
would bring in what their purchases are going
to be and go over them? Have you done it?

White:

Only in a form which was not adequate.

H.M.Jr:

Good God.

White:

Cox:

And they were supposed to have prepared the

material and submitted to Oscar and I think
he got a few things this morning, didn't you?

Yes. I just got it, but it isn't in par-

ticularly good form. It is coming closer.

H.M.Jr:
Cox:

Well, where is the fault, Oscar?

Well, I don't think they quite still completely understand what it is that is trying
to be done, although I think it is very simple
and very clear.

H.M.Jr:

Why don't you write out the kind of form you

Cox:

I think that is the only thing to do.

White:

Didn't you think it was made clear in the

want and tell them to take it and like it?

discussion?

Cox:

I thought it was made clear two or three
times.

H.M.Jr:

It is you that has to be satisfied, isn't it?

Cox:

That is right. We can work up a form and

-5-

tell
them to go ahead and use it, or the
committee can.
H.M.Jr:

What is the committee?

Cox:

This group that has been meeting.

H.M.Jr:

Are they still paying dollars every day
without submitting it?

Cox:

No.

H.M.Jr:

They are not?

Cox:

They are not doing either.

White:

They are holding everything in suspense.

Cox:

They are holding it in suspense, and that is
the only thing they have submitted thus far.

H.M.Jr:

And is this the way they do it?

Cox:

That is the way we have been doing it, yes.

H.M.Jr:

You can't work with that?

Cox:

No, they ought to have a printed or mimeographed
form of which they submit enough copies so
everybody can look at them.

H.M.Jr:

And you have held this up?

Cox:

That just came in.

H.M.Jr:

Is this the first?

Cox:

Yes, that is the first.

H.M.Jr:

I wish we had more time. I will have to do
my homework before. I mean, this is a - well,
there is no dollars on here, is there?

-6Cox:

H.M.Jr:

Yes, I think there were some dollars.
I don't see where.
(Mr. Viner entered the conference.)

H.M.Jr:

Hello, Jake. You haven't missed a thing yet.
Who are you going to get? I think our own

Procurement people can make us a form which -

if you tell them what you want, unless you

want to do it yourself.
Cox:

No, we will get Procurement to do it.

H.M.Jr:

Why don't you get our Procurement people to
draw up a business-like form?

Cox:

Yes.

H.M.Jr:

I mean, that is --

White:

If it doesn't ask them for information which
they can't get, but you are familiar with

what they can get.
H.M.Jr:

I mean, I am just offering that as a - I mean

as a vehicle. If you haven't got a big staff
and if you want Cliff Mack to draw up some-

thing for you, tell him what you want and I

think he will get it overnight.

Cox:

H.M.Jr:

Good.

I mean, I was just thinking of a way it could

be done. Now, whose initials are these?

Well, now, you see - couldn't I get a copy

of the sheet - the thirty-five million dollar
a week thing? Who has those?

White:

What?

-7H.M.Jr:
Cochran:

Where they submitted the thing every night.
Phil Young is the one who has had those.

H.M.Jr:

Who has that, Philip Young?

Cochran:

He is the only one I know of. I can ask if
George Haas has it.

Cox:

I think he probably has.

Cochran:

Yes,
Lindow
sure he
has it.has it in there. I am quite

H.M.Jr:

You don't mind if I stray from your thing

first, because I would like to --

White:

Oh no.

H.M.Jr:

I would like to do the simple thing first.
I would like to be able to get this thing
so it works. It seems ridiculous.
(Unrecorded telephone conversation with

Mr. Haas.)
White:

So much of the meeting is going to be in the
way of getting further information from them

that I think it might be nice if we started

off with appreciation that some progress has
been made in clarification, because that is
about the only nice thing that can be said.
H.M.Jr:

Do you mind if I don't start that way?

White:

No.

H.M.Jr:

Do you mind if I start just the way I feel?
I am kind of a little mad about this. The
thing that you should - it has been marvelous.

You know, for three days the Germans have

been building up about this great news they

100
8-

were going to get out. The great news was
the announcement, "Things are going better
than we had hoped for, or words to that

effect. It was a complete dud.

You know, for three days each day they -Viner:

Yes, everybody was nervous about what they
were going to say.

H.M.Jr:

Well, that is the great news. This is terrible.

White:

I don't know what stands in the way of their
getting quicker action.

H.M.Jr:

I have lived through this thing. This is so
typical. Don't worry, Jake, I always put on
a good face when they come around.

(Mr. Purvis, Mr. Keynes, Sir Frederick Phillips,

Mr. Coyne, Mr. Boddis, Mr. Archer, Mr. Childs,
and Mr. Thompson entered the conference.)

H.M.Jr:

I hope you gentlemen won't mind if I start

off scolding a little bit. I don't know who
I am scolding, but I want to scold. But it

does seem that as between the British Treasury
and our Treasury, plus the North American -Purvis:

Supply Council. British Supply Council in

North America, I beg your pardon.
H.M.Jr:

That we - I mean the combined brains - maybe

there are too many brains - ought to be able
to get out a form that we could begin to clear
stuff, and Mr. Cox says he can't work with a
thing like that and he says he has explained
three times what he wants.

Now, I don't know - it may fall on the United
States Treasury, but he says he can't work

with a thing like this.

101

-9Childs:

Do you mean these cards, sir?

H.M.Jr:

Right.

Childs:

That is on my head, if that is wrong.

H.M.Jr:

Well, it is, if you have got a big head.
I mean big shoulders. (Laughter)

Purvis:

What is the answer, Childs?

Childs:

Well, we were told to use, as I thought, the
forms which were used some time ago. Since
those forms have gone in, we have worked

with a great deal of vigor to revise it and
make it more pertinent to this, but having
picked up where we stopped off before, we

starting using these cards as we were in a

hurry.

Now, we are revising these forms to make them
more pertinent to the Lend-Lease program, but
those you have there are not the revised form,

sir.

H.M.Jr:

Well, they are just what Mr. Cox just handed
me.

Childs:

That is right. We got them in as fast as we
could, and I promised you we would get them

out that night, which we did.
H.M.Jr:

But they are no good.

Childs:

Then we will have to revise them.

H.M.Jr:

Well, it is ridiculous to say that overnight
this group can't get out a form which would
be acceptable to both - to the English and
ourselves, and as a result of which nothing

is cleared. It is all held up.

102
- 10 Purvis:

Have you - should we have a representative

from your end deputed to help in this,

Mr. Cox?
Cox:

Yes. What the Secretary has in mind, I think

we can make preliminary determinations on the
basis of these because they have got the

substance of the information, but I gather
what the Secretary had in mind at the first

meeting and what he has in mind now is a
counterpart of the form that was used when

he cleared the thirty-five million a week.

Childs:

Yes.

Purvis:

Oh.

H.M.Jr:

On this thing, I mean even if it was just it has neither got Mr. Phillips' name on it,
if he is to sign for the Treasury, nor Mr.
Keynes', whoever is to sign, or Mr. Purvis'
I mean, it has no signatures. I mean, it is
so simple. I should think we could - we could
do it overnight.

Purvis:

We don't need, I suppose, to discuss here what
you want in that way. Can you (Cox) delegate
somebody who can --

Cox:

I think so. I think I have an idea of what
the Secretary has in mind.

H.M.Jr:

Well, I think if someone would listen to

Mr. Oscar Cox for five minutes, he says he
has expressed himself three times and has
been unable to get what he wants.
Keynes:

To who?

Childs:

I think that needs a little explanation, sir.

Cox:

Well, I think --

103
- 11 White:

Oscar didn't say that.

Cox:

The first meeting, the Secretary, as I understood his purpose - one of the major pur-

poses of the committee meeting was to get

scheduled the material along the lines that
it was previously done in the period after
January 1 in his testimony, so that when you
want to place a contract, in advance of the
placing, the Secretary would O.K. it, and it
came in the form of a recommendation in a
document signed by yourself (Purvis) and

Sir Frederick, containing the information

as to what you contemplated doing; and before

the contract was placed, he indicated his

approval.

Now, that was done because you had no dollar
exchange or you wanted to conserve in terms

of the Secretary's being able to say to

Congress that he was reasonably sure that
you could pay for all that you had committed
for.
The problem now is to determine what items
can be picked up under the Lend-Lease in
terms of what you contemplate placing your

own contracts for. Now, I don't think it
is Childs' fault or anybody else's particular
fault; but at each meeting which we had, as

I understood it, there were going to be
presented in substantially that form these
contracts proposed to be cleared, so that

those that might be handled under Lend-Lease
would be handled that way.

Now, I think in the formative stage, in
getting the information quickly, Childs has
produced the substance of it, but I think
the discussions have moved more on other

things than on these where these are the
most current problems in terms of prospective

104

- 12 contracts to be placed.

Phillips:

But Mr. Cox, those old forms which we had
in use before the passage of the Lend-Lease

Bill, they were very general. They had no

such information as appears on these cards.
Do I understand you would be satisfied with
the same form or do you want that form and
these cards in addition?
Cox:

I think what the Secretary has in mind and

the same thing I have, and that is that on

one form without using the duplicates, we
ought to work out the substance of what you

need so that it will come with all the in-

formation and the signatures of the necessary
people and the necessary approvals on them
in terms of placing. The way you pay dollars
as against -H.M.Jr:

Do you want to come up here, Childs?

Childs:

Or you can use it for the committee recommendation
instead of placing the contracts recommending
the use of Lend-Lease, which would be the
alternative procedure.

H.M.Jr:

Oscar, if you have five minutes after this

meeting and sat down, couldn't you work out
with White and Childs or somebody from the

British side the kind of form we need?

Cox:

I think we could make a good start on it.

H.M.Jr:

Today?

Childs:

Any time you say, sir.

H.M.Jr:

Well, if Oscar Cox has the time, I mean right
after this meeting.

Childs:

That will suit me very well.

105

- 18 Cox:

That is all right with me.

H.M.Jr:

Because I am 80 anxious to get the thing

Purvis:

So are we.

H.M.Jr:

Somebody - I mean, whoever represents - I
don't know whether Mr. Childs represents

started so the stuff will flow.

the British Treasury or Purvis or both.

Phillips:

Mr. Childs knows all about these forms.

H.M.Jr:

I think you had better sit in on this thing.

Phillips:

I will, sir.

Purvis:

He has been handling the Supply Council thing
completely.

H.M.Jr:

Somebody from the British side so when we

get through - we won't run this meeting too
long - when they get through - I had hoped
to come in and get the thing going and this

way it is tied up, isn't it?

Purvis:

Is that the reason it is tied up, Mr. Cox?

Cox:

No, Mr. Secretary, this isn't the reason for
any tie-up, as far as we are concerned.

H.M.Jr:

Well, no contracts - those contracts won't
be signed until --

Cox:

Well, we have already indicated - they have
got a very urgent thing here on training

which we cleared with Boddis. I told him

to go ahead and place the contract pending

a decision on the thing because it doesn't
look as if it can be picked up by Lend-Lease
anyway.

106

- 14 H.M.Jr:

But we here in the U. S. Treasury have no
record of that, that you have done that.

Cox:

No.

H.M.Jr:

So far as I am concerned, nothing has been

Cox:

That is right.

Purvis:

cleared.

You want the record of what we have rejected
from Lend-Lease so as to keep tab on the

total --

H.M.Jr:

Well, going back - when we started, you see,
was on the nineteenth of June. That was the
day I started. I am pushing my own people
as much, because I want to do something.

Purvis:

Yes, so do we.

H.M.Jr:

And if we started on the nineteenth and I thought it would be a day or two and it

would be going.
Purvis:

Yes, I didn't realize it wasn't going satisfactorily. Well, can we get after that form
immediately after?

Childs:
H.M.Jr:

Certainly, sir.
Now, one other thing. I am sorry to start

that way, but as I say, I feel that way and
I want to get it off my chest. Mr. Hopkins

called me up and he is very anxious to have

this project go through that evidently he

and Air Marshal Harris have been working on,
which is an American corporation which will
employ people to ferry planes from here via
Takoradi to the Middle East, and he hoped
that that would go through very promptly.

107
- 15 Purvis:

Under Lend-Lease?

H.M.Jr:

No, they can do it all Lend-Lease except for
the pay of the salaries of the personnel.

Purvis:

Yes.

H.M.Jr:

And he said, I think, it is similar to the
corporation that the Navy had set up to do

a job, I believe, in Scotland.
Purvis:

Yes. I know that one. Is that held up,

Mr. Boddis?

Boddis:

I think so, sir.

H.M.Jr:

Do you think so?

Boddis:

The idea of a corporation, as I understand

it, Mr. Secretary, is merely that they are
continuing an existing arrangement which

was temporarily introduced in order to get
twenty machines over there. Whether there
is any more virtue to the corporation than

that, I don't know.

H.M.Jr:

Well, this committee, so to speak, is on
trial. I told him we would give him immediate

service. I don't know where the hitch is,
but evidently it is of sufficient importance
that both Mr. Hopkins and the Air Marshal
are worried about it and would like to go
to town on it, as we say.

White:

Is it your thought that this is just a
temporary thing to handle the twenty planes?

Boddis:

That is what is going on at the present

moment.

White:

I didn't gather that was the present idea.

108
- 16 Boddis:

The general idea is an extension of the
existing arrangement.

Childs:

It is an extension of this.

H.M.Jr:

No, that isn't what Mr. Hopkins - this is
the plan, to set up, as I get it, more or

less of a permanent organization which will
ferry planes across to the Middle East.

Purvis:

And that must be an extension of the vehicle
which was arranged to get the twenty troop
ships over.

H.M.Jr:

That I don't know.

Boddis:

That is what I understood.

Purvis:

That was Self's understanding, too.

H.M.Jr:

Couldn't somebody get in touch with the

Air Marshal?

Purvis:

I wonder if there is any question in your
mind, Mr. Boddis, about it? Can Air Marshal
Harris do anything about it?

Boddis:

I don't think so. I am not quite sure what
the Secretary's point is.

H.M.Jr:

My point is simply this, that Mr. Hopkins
put a proposal to me, would the dollars be
furnished to finance this new corporation
which is being set up.

White:

By the British Treasury.

H.M.Jr:

By the British Treasury, and he is willing
to do everything on Lend-Lease except the

personnel, and I told him that I would bring
it in before the committee. He particularly
mentioned Sir Frederick Phillips. And get
the thing cleared today.

109
- 17 Purvis:

Well, is that put up by the British Treasury?

Phillips:

No.

Purvis:

I understood this was something that - is it
something the British Treasury is putting up?

Boddis:

Well, I prepared a card this morning for it,
and it was my understanding that it would be
considered this afternoon.

Childs:

I think you had better read it, Mr. Boddis.

Boddis:

Is that a reflection on my writing?
There is rather a lot of it, because I tried
to divide it under the various heads of

It is your writing.

charges, but if Lease-Lend cannot bear the

cost of the salaries of the crews, the other
thing to be concerned with is the use of
ground facilities which are already in existence because they are Pan-American Airways

facilities and gasoline and oil. There is
nothing else in it. So that there are just
those two items.

The use of the ground facilities of PanAmerican Airways and gasoline and oil.

Keynes:

What is the amount of the excluded items?

H.M.Jr:

Now look, just a second. I can't work like

this, Arthur. It is impossible.

Now, Mr. Hopkins calls up. I get word to

you what it is about. Somebody in the whole
British organization ought to be able to know

what it is. I mean, I can't work like this.

I mean, I can't take my time up trying to unscramble British problems. If the British
don't know themselves what it is --

110
- 18 Purvis:

Mr. Boddis, have you any doubts as to whether
you have the whole story?

Boddis:

None at all, sir.

Purvis:

You feel you have the whole story?

Boddis:

Yes.

Purvis:

And so far as personnel are concerned, are
they Army personnel or private personnel?

Boddis:

They are U. S. civilian pilots as things
stand at the present moment.

Purvis:

And they couldn't come under Lend-Lease,
Mr. Cox?

Cox:

Probably not, and that is what I gathered
Mr. Morgenthau is talking about. Under the
present plan of delivering the twenty, the
British are paying the Atlantic Airways the pilot and if you extend that thing and
make it a regular procedure, then as I
understand it, somebody is going to have to

pay the dollars to those pilots.

Boddis:

Yes.

Cox:

Which is the problem.

H.M.Jr:

I can only repeat what Mr. Hopkins said,
that this was very important, Air Marshal

Harris is very keen to have it, but that

when it came to payment of salaries, I don't
know what for, because I didn't ask him,
under Lend-Lease they could not pay for

salaries. I don't know whether it is salaries

of pilots, ground crew mechanics, or the rest

of the stuff, but he said the rest of the

stuff would be taken care of by Lend-Lease.

111

- 19 Purvis:

Is this a British organized thing for the

first time, or did the Americans organize
it?

Boddis:

It was organized by us with the assistance
of the U. S. Army Air Corps, and the scheme
involves the picking up of planes at Miami,
flying them from Miami to Trinidad, from
Trinidad down to Brazil, and from Brazil
over to Takoradi and from there up to Egypt,
employing U. S. civilian crews for the main

because of some difficulties of an international law in Brazil.

Purvis:

Well now, have you put up to Sir Frederick

Phillips the dollar payments for the continuation of this beyond the twenty planes?

Boddis:

It hasn't reached Sir Frederick yet, sir.

It only reached me at five minutes to one

this morning.

Phillips:

As a matter of fact, I had another case of
a somewhat similar type to bring up today,
but I am going to report, Mr. Secretary,
that obviously we have got to meet considerable dollar expense. They are paid
in sterling, of course, these thirty thousand
radio technicians.

H.M.Jr:

Are they?

Phillips:

Thirty thousand is the number they hope for.

But they are going to be paid in sterling,
but, of course, they will have to make allotments for their families, the married men,
and I was going to report that that would
impose a charge on our dollar funds which

I would have to put up to you of ten to
twelve million dollars a year, with the

assumption they got as many people as they
hoped.

112

- 20 -

There is no hope for it. I don't suppose

Mr.
Cox has any doubt. It must be outside
Lease-Lend.
Purvis:

If that is the decision so far as personnel
in these cases is concerned, do we need any
more than that? Is there anything to be
gained if that decision is definite, in
bringing it into the discussions?

H.M.Jr:

Well, the only thing to be gained is that

the clearance for the dollars would be put
through this committee; and in order to do
that, we would want a piece of paper with
you two gentlemen's signatures on it.

Purvis:
H.M.Jr:

Saying the amount of dollars in question?
Yes, and that you people approve it and want

to clear it.

Purvis:

Yes. Mr. Boddis, can that be done in the
early future?

Boddis:

Yes, sir.

Purvis:

I don't suppose Air Marshal Harris can give
that either, because he wouldn't know the
dollars, would he?

Boddis:

No, the trouble at the moment is to find out

the number of machines which are going through,

but we can get a figure which will be reasonably near in a very short time.
H.M.Jr:

Is this the same twenty planes that they have
been talking about for a couple of months?

Cox:

Yes.

Boddis:

The --

113

- 21 H.M.Jr:

The Lockheeds that are up at LaGuardia?

Cox:

Yes.

H.M.Jr:

Do you mean to say they are still up there?

Cox:

No, they started, as I understand it, on
Tuesday, didn't they?

Boddis:

Yes. The first ones are now on their way
to South Africa; but the scheme that Air
Marshal Harris and Mr. Hopkins are talking

about is a further lot of airplanes to be
delivered there to the full extent that we

want them.
Purvis:

As deliveries occur, they will go into this

machine and come out at the other end.

Foddis:

That is right.

Purvis:

And therefore the same principle - the hope
of this committee, of course, was that something could be done to make - bring something
under Lend-Lease that couldn't be brought on

the test cases. Evidently that is out, from

what you say, Mr. Cox, and therefore it is

merely a question of stating a sum of money

and getting authority.

Cox:

There are different cases. I think it has

been pretty well decided on in this air
ferrying that the personnel pay is outside
of Lend-Lease.

Purvis:

Yes. There is no hope of overhauling that
decision?

H.M.Jr:

Well, here is the situation in reverse where
for some reason which I don't care to question,
Mr. Hopkins is anxious that this project go
through, and the other ninety-nine will be
something that you want to go through.

114
- 22 Purvis:

Yes.

H.M.Jr:

I think it is only common sense that where
he shows his interest in a particular project

that, taking it for granted it is something

the English Government wants, that it should

go through.
Purvis:

Well, the principle behind this is established.
Could we then, Mr. Boddis, assume that by, say,
tomorrow, the card could be obtained with the

necessary signatures on it of Sir Henry Self
in that case, I suppose, and the Air Marshal,
if he has to on, and Sir Frederick?

The principle is established. It could be
put through quickly.

Keynes:

It is quite certain, is it, that these

personnel expenses - you know, they are

going to be very large. These things are
coming along very rapidly now.

The other one, Sir Frederick mentioned it,
that is down on our agenda, is thirteen

Purvis:

million dollars alone. I don't know how
large this one is.
More than that, isn't it?

Boddis:

Yes.

Keynes:

Cox:

These are entirely outside any expected outgo

we have, so it is rather serious.

Well, we haven't given up on that. For
example, we have under consideration now

a change in the appropriation language of
some of the War Department appropriations

so that monies appropriated for transportation can be used to transport equipment
whether procured with U. S. or with British

funds.

115

- 23 Keynes:

What is the right moment that we ought to
bring that up?

Purvis:

Yes, when can we - Mr. Cox, I would like to
ask that, too. When does that come up, so

that we can say it is settled, one way or
Lease or against it.

the other, for it or against it? For Lend-

Cox:

Well, the appropriation language change has

already been drafted. It is now going through

the Deputy Chief of Staff's office.
Purvis:

You mean in regard to the existing Lease-Lend
appropriation?

Cox:

No, in regard to existing War Department
appropriations, so that they can use their

appropriations for transportation to transport

goods, whether they were procured by your
money via the Lend-Lease or by Army and Navy
or Lend-Lease money.
Purvis:

Would it be wise for us to put through the

channels something on a basis where we can't

get the personnel paid for and get it crystallized out against the - in favor of our own
dollars and against the other method? Is it
wise to go ahead on that and get it crystallized
out if there is any hope in the immediate future
for change?
Cox:

Well, I think it would be wise to crystallize
out, for example, this plan.

Keynes:

Isn't the right thing to do to say that it
is agreed that it goes through one way or
the other and then we can see which way it
is handled?

H.M.Jr:

Mr. Keynes, just as long as you and I and

116
- 24 -

Keynes:

the rest of us don't wind ourselves up on
red tape that nothing goes through.
Yes, that is what we want to avoid.

H.M.Jr:

And you are not particularly - I mean, as

far as this thing goes, the fact that you

are doing this doesn't mean that we won't
keep searching for ways to keep your problem
easier.
Keynes:

In this particular case it looks as though

there was some hope, but we can satisfy
Mr. Hopkins and the Air Marshal by saying

that it is agreed by the financial authorities

that it goes through one way or the other.
That is all they want to know.
H.M.Jr:

That is right.

White:

I take it that the whole ten million dollars

might not be spent. There might be only one

ortwo. And if the law passes, the remaining
aid would be handled the other way.

H.M.Jr:

Well, I hope the aid will be in Cairo by the
time the law passes.

Purvis:

It could be divided into two lots then,

Mr. Boddis, so that you would take care of

it sufficiently far ahead so that there is

no slow-up in the thing.
White:

That was in the year. That was an annual

estimate of the expenditure, I think.

H.M.Jr:

What was the date that those twenty Lockheeds
landed up at LaGuardia Field, do you know?
They are not all Lockheeds.

Boddis:

It was Miami, actually. They have been down

there about a fortnight. At least a fortnight.

117

- 25 H.M.Jr:

Oh, much more than that.

Cox:

More than that.

Purvis:

Who is handling that?

Cox:

We talked about it almost a month ago.

Boddis:

It is held up on a number of formalities,
mainly with the difficulty of the passage
through Brazil.

H.M.Jr:

They were collected and bought by Procurement fully over a month ago.

Boddis:

Oh yes, fully a month ago.

H.M.Jr:

Let's go on. This is the way White wanted

me to start, in a nice friendly mood, telling
everybody how good they were. (Laughter)

But I just didn't feel friendly toward what
had been accomplished.

"Much progress has been made in clarifying
the steps necessary to be taken to expand
the coverage of Lend-Lease arrangements with
Dominions and over various types of commodities.
"Funds have been earmarked by Mr. Hopkins

to take care of reimbursements on contracts
over fifty thousand dollars each placed
after March 11, but the British have not
yet selected and submitted to Mr. Cox the
appropriate contracts to be taken care of."
Purvis:

Mr. Childs, what is the status of that?

Childs:

I have got those contracts up, sir, making
a final check which Cox asked me to make

last evening.

118

- 26 Cox:

That is right.

H.M.Jr:

And that represents how much in money,
approximately?

Cox:

I think fifty-two million.

Childs:

Forty-one, wasn't it?

Cox:

Yes, forty-one.

H.M.Jr:

Childs:

Well, that is -That is in transit.

H.M.Jr:

That is good. Anybody want to question that?

Purvis:

Don't let's question anything that is good.

H.M.Jr:

Two. "Hopkins' inquiry re possibility of

British Treasury supplying dollars with which
to pay personnel of contemplated American

corporations created for the purpose of
arranging the ferrying of planes across the

Atlantic.

This is - well, that we got. If you haven't
seen this, Mr. Keynes, this is the thing -

this is the way we used to handle it, and
this was the kind of thing that I was looking
for, you see (exhibiting copy of former

British financial report).
Keynes:

Oh yes, I haven't seen that. This is January
and February?

H.M.Jr:

Yes, that is the way they came over and this
is the way the thing came over every night.

Keynes:

What we really want is this, with more

detail behind it.

119

- 27

H.M.Jr:

Yes. You see, what I asked for was this

and then when they didn't have enough detail
they would say, "Well, on the item down

here we want more details. It went on
for about three months.

Keynes:

That is very simple.

H.M.Jr:

Now, I have been asking for this to come
over and Cox agreed that this was acceptable
to him, and then if he wanted something

additional, he could ask for it.

Keynes:

Can we begin the two things, Mr. Childs?

Childs:

Let's talk to Mr. Cox about it.

H.M.Jr:

It doesn't seem as though that was insurmountable. Have you seen this?

Childs:

I think I have, sir.

H.M.Jr:

Three. "Various memoranda that were promised

to be ready soon: (a) on wool."

Phillips:

Yes, sir. I have it here.

H.M.Jr:

Good. Let's go.

Phillips:

Well, it is fairly lengthy, but there you

have wool, sisal and cocoa (handing memorandum

to the Secretary).

Now we have a memo here of the New Zealand

representatives of all their trade and the

things they think could be brought under

Lend-Lease and this memorandum of the hundred

and fifty million which we said we would

have to let outside Lend-Lease because of

administrative difficulties in the U.K.,
that explains the position on that. That is

120

- 28 -

just a note on that thing I mentioned

earlier, the thirty thousand radio
technicians.

White:

It was our thought, Mr. Secretary, that we

would examine those memoranda and then have

prepared for you the opinion of the committee
as to what suggestions they have for you to

go forward on.
Keynes:

Mr. Secretary, I should just like to say a

H.M.Jr:

Please.

Keynes:

Sisal is not a very big thing in itself, but

word on the sisal and cocoa.

it is rather interesting because it raises a
principle. That is, whether we should insist
on the f.o.b. contract, not only giving us

dollars when ships are available, or whether
they should be ready to pay against delivery
in the warehouse on the other side. It would
help us a lot of they could adopt the second
principle.

Of course, the first one is the business-like
thing for them, and therefore unless you
argue that there are other reasons why they
should adopt those - they are not very likely
to.

But I think there are other cases of a

similar kind. I think cocoa is also an

example, but that is not a very good
example.

In this document we are putting the case

very tentatively, because on further inquiry
it doesn't look as though it is a very strong
case. It appears that there are large stocks
of cocoa in this country, which I didn't know

121

- 29 -

before, and that there is a very important
direct shipping question.

Therefore, it is very likely that there is

a good reason for what has been done on

cocoa, but as it impounds our dollar resources by twenty million dollars, this
committee ought to know about it and it
is worth looking at it to make sure that
the dollar position has been considered.
We may have other stronger cases later.
You see, we put it forward very weakly
because I am not very convinced it is a
good one.

H.M.Jr:

I will read it very carefully.
The next thing I have, "Actual contracts
under fifty thousand dollars placed since
March 11, to be submitted to Mr. Cox (only
three have been submitted)."

Childs:

That is in the same state, sir, of transit.

Cox:

That is right. That is in the works.

122
- 30 Purvis:

How long is it going to take to bring it
through, Childs? Is it a massive job,
physically2

Phillips:

Oh, very massive. Didn't they say four or

Childs:

It takes an enormous time to get them all

five days?

working. I think I had better warn you that
it took five to six months to get the other
four contracts that were approved sometime

ago. That is at a later stage, not this
stage, sir. These are entrain at the point
of being initiated.
Phillips:

But Mr. Cox wants to know when he is going

to get his figures. The answer is the end
of this week or something of that kind, but

it is a long job.

H.M.Jr:

Of course I can sit back and say, "Well,
you know, what the hell," but I am putting
pressure on everybody in my shop.

Phillips:

Yes. Of course you have the contracts over
fifty thousand dollars which are at the moment
most important.

H.M.Jr:

You see, I am talking about New York. The
planes are all boxed up in New York.

Cox:

They were shipped from Miami up to Floyd
Bennett and boxed, weren't they.

Boddis:

I don't think so. Most of them had long
range tanks put in.

H.M.Jr:

Well, anyway, that is somebody else's re-

sponsibility. I take it that under the
fifty thousand dollars that that will be

pushed?

123

- 31 Phillips:

Obviously.

Purvis:

Mr. Childs, you can't give an actual date of
the under fifty thousand can you?

Childs:

No, sir, I can't because the advice Sir
Frederick gave us is the latest advice we

have.

Phillips:

The documents are all in New York.

Purvis:

And the man up there is under pressure?

Phillips:

Oh, yes.

Childs:

It is a night and day job. They are working

full tilt on it, I am quite sure of that.

H.M.Jr:

"Proposed purchases of the British to be
submitted to the committee for examination."

Well, I took that up earlier, didn't I?
Are there any today?

Cox:

Yes.

H.M.Jr:

Well, shall we do those now, Oscar, so that
you can get something done today?

Cox:

Yes. The first one is modification of bomb
sights, proposed contract with Sperry Gyroscope and a total cost of two hundred seventy-

two thousand eight hundred seventy-five dollars.
H.M.Jr:

Can it, or can it not be lend-leased?

Cox:

I think it can, legally, and I think the
thing to do on it is to put the requisition
in and that is a question of availability of

funds, and I think on all of these things Mr.

Purvis and Sir Frederick have to make up their
minds whether they would rather have relief on

124
- 32 -

the dollar exchange where most of the money

has been allocated or - and forego some other

item. You will have to take something off
your-Purvis:

From our view, we want every - I mean, we are

not covered by a billion - a billion and a
half to two billion of items under the

orders received from London, the program
received from London in January and February,

so naturally our anxiety is looking at it

from the war angle, which to us is all important, is to get initiated orders placed

on everything.
Cox:

That is the essential problem pending going
up for the new appropriation. Do you want to

prevent an initial order being placed to the
extent that you take over and release now

the modification, for example, all, or to
the extent that you pick up the existing
contract?
Purvis:

Our thought was that it might be possible on

all the initiation orders if there was a -

under Presidential directive, I don't know

whether this is possible to get a letter of
intention out - to do them by letter of
intention of the type of thing which we did
once before to close a hiatus. If that can
be worked, then I think the answer to your

point here is that we shall pick up everything we can here and leave the initiation

orders to be covered on a new procedure

while the new funds are available. The
War Department, I think, have some thought

that could be done if they are recognized as

vital things. Do you think there is any
chance of that?

Cox:

I think you can do better than that on certain
items of aircraft and certain items of war

125

- 33 materials if you can get the policy determined
because the War Department now has a new

supply bill in the works which will probably

be passed very quickly.
Purvis:

Our information from the War Department is

that that will probably not be money avail-

able before August, by which time other money

might be available for the actual British
requirement. Therefore, we have got to find
something that will enable us to pick up
these old - the initial orders against the
old program before August, from our view,

because every day is vital.

Cox:

Well, I would suggest on that, Mr. Secretary,
there are three or four of these items in

terms of aircraft which are typical, that Mr.

Purvis and Sir Frederick and I get together
with General Burns who is handling the programing on the financial end on the commit-

ments thus far made in the new program,
because you may want to decide to let these some of these go now and pick them up out of
the new appropriation or you may decide to

pick them up now and forego, and it is just
a question of whether you can place these

initiation orders now in terms of different

types of material.
Purvis:

Of course anything--

White:

Isn't there an answer to - I don't gather
you answered Mr. Purvis' question, which
was whether or not it would be possible to

initiate those orders by a letter of intention which could later be taken up.

Cox:

Well, I don't think so because the ordinary
manufacturer won't take a letter of intention

126
- 34 unless you have got some money available to

commit. Where the appropriation isn't
likely to go through for two or three months,

if it is pending, they will take it.
Purvis:

That is just what I thoughtyou - you could
say that the War Department has certain

monies in its appropriation pending. Well,

to the extent that It has initiated that

drive through Congress to get that money
and provided they are common types, we felt

it should be possible, therefore, to take those
up under a broad letter of intention which
in the case of the U. S. Government letter
of intention, I understand, does not have to
carry the legal background that it does when

we operated with our own money, where the

contractor naturally expected a fully legal

document.
Cox:

That involves going through the program and
then having to go into the Army on monies
over which they have direct control and say-

ing that we think they ought to place an order
on a letter of intent and for so-and-so
equipment, which is of a common type.

Purvis:

Yes.

Well, we have done that, you see. I mean all
this had been done with the War Department

in schedules. Every single item which is
not yet passed through in the form of a

contract has been itemized with the War
Department in the defense committees, and

it is recognized that it is blocked for the
time being unless some way can be found of

this kind or unless a U. S. Army appropriation
might become available prior to any further

monies being made available for Lend-Lease.

That is a condition. It would total some
billion and a half. We have been over that

127

- 35-

with General Burns in considerable detail.
We know exactly where we stand on that. It
has all been itemized. Every single thing
has been washed through.

Cochran:

I know, but in terms of what has been allocated in the War Department for aircraft now,

do you want to have the money used to take

up these modification contracts or to pick

up other things instead of initiating the

order? Now, that is the problem that you

have to face.
Purvis:

Naturally, from our view, I am all for

initiating the order as long as the money

is there at all. We must, from the war

view, take that attitude. I don't think
there is any - we can't dispose of anything

on the basis of initiations on the old program. Continuation orders, yes. That is what
we decided, that we would whittle it down. I
think the answer specifically to Mr. Cox's
question is that we are at this time having
specifically an examination made item by
item of all program requirements from
London which have not been able to be
financed under Lend-Lease so far with a

view to deciding which are initiation orders

which must be placed immediately from our
view irrespective of what happens to the
Treasury of the United Kingdom and the con-

tinuation order which, from our view, can

be postponed wherever production would not

be interfered with by waiting, say, to the
arbitrary date of the end of August. That
examination is expected to be completed in
a day or two.

Burns and I met at their house day before

yesterday. But frankly, so far as we are

concerned, we have no power to postpone the

placing of initiation orders.

128

- 36 Phillips:

There may not be enough of the continuation
orders
that can be postponed to take care of
these.

Purvis:

Except that we are a billion and a half
short. As far as we know, there will be no
hope of covering the initiation orders to
the tune of many hundreds of millions until
a new appropriation becomes available.

H.M.Jr:

To sum up, Arthur, for me, I am rather simple
minded, this particular order, do you place

it or don't you?

Boddis:

If I may interrupt, Mr. Secretary, there is
a practical difficulty about putting that

under Lease-Lend, and that is the contractor
has flatly refused to accept the amendment

to a prior contract.

H.M.Jr:

Well, gentlemen, do you think I would be
unreasonable if I would ask the next time
before we came some of these things,

strictly British things, could be ironed

out before we-Purvis:

Well, it is because we knew of these difficulties, Mr. Secretary, that we have in the
past been paying - this is a pattern. This
is an illustration of a pattern that we are
bringing before the committee to see whether

despite our knowledge that in the past the
contractors have taken this position, some
way could be found for change-orders on
existing contracts to be brought under
Lease-Lend.

White:

I also think, Mr. Secretary, that Mr. Purvis'
point which he made as a possible third

alternative, since he doesn't - he has made

129
- 37 -

a selection as between the two alternatives
which Mr. Cox presented him with, but he
suggested a third alternative and, speaking

for myself, it is not clear to me that an

adequate answer was given that the thing

excluded all possibility of acting on a type

of commitment which he answered.
H.M.Jr:

State it again, the one you are referring to.

White:

There were two alternatives which were pre-

sented. Either to initiate this order and

not make the funds available for relief or to
make the funds available for relief and not
initiate the order. As between the two
alternatives, Mr. Purvis said he is in favor

of initiating the order and forego relief,

but he thought there might be a possibility
of a third alternative which was to have

them initiate the order on a letter of in-

tention. In that way they could have the
order started and then they could still get
relief. The question therefore was whether
it was possible to do that on a letter of
intention.
Mr. Cox pointed out, or Mr. Purvis did, that

the letter of intention would not satisfy
the contractor if the letter of intention

were that provided by the British Govern-

ment, but it might - it would satisfy the

contractor if provided by the United States
Government and the Army, and the question

then still remains to be answered, at least
I haven't heard the answer, there may be

one. Is it or isn't it possible somehow
to get that letter of intention from the

American War Department and thereby making

it possible to both initiate the order and
get relief, which is what you are trying
to do?

130

- 38 Purvis:

That is right.
Doctor, I think your point is very well taken
and I would suggest that what we are lacking

in this meeting at this particular point is

the ArmyS.representative.
Our is
Army will
letter of

done that with the U. that say, intention, information "It can provided be

we have a directive from the President justifying our going out on that as a possibility."
White:

Well, that is the final way out. Then that is

exactly what should be brought up before this
committee and the Secretary may be able to get
you that.

Purvis:

That is right.

H.M.Jr:

What I was asking Mr. Cox was, he said

this particular thing that we are discussing
is something that should be put up to the

Lease-Lend organization and-Purvis:

I thought this committee was the medium for
doing that.

White:

That is right. It was so indicated, Mr. Secretary, and Jake whispered to me something

which I am in agreement with, that this is

one of the tough cases that we thought Oscar

could help us out on. Now ishis chance to
deliver.
Viner:

Mr. Cox promised us that these hard cases
weren't as hard as the English thought they

were. Here is the first one, I see. I would
like to hear some help from Mr. Cox, just

what procedure would he advise.
Cox:

Mr. Secretary, we have got two problems here.
This is a case properly before the committee,

and then you get into an incidental field,

131

- 39 -

which is the War Department field, as to
whether as against their appropriations they
will place a letter of intent for the very
selfsame common article that the British

want to fill out their requirement, and
neither the Secretary nor I tell the British
what they ought to do, and I suggest that it

be put up to Mr. Hopkins, not in terms of
Lend-Lease and such, but in terms of discussing it with the Army and Navy on behalf of

the British and, if necessary, getting a
directive issued that they go ahead and do this.

Purvis:

We have discussed that with General Burns this

week, you see, for instance, in general, and
I don't mean to say that we have come to any

specific cases particularly, but we have
talked over this difficulty. Nobody knows
any way out except - unless this letter of
intention should work. Then our information,
after we are on the British angle of this,
we can't do the American policy end. It is
not our affair. We might get rather kicked

off if we tried. But what we are in the posi-

tion now of wanting to know really is, would
a directive be available to the U. S. Army
if, as we understand it, the U. S. Army
could proceed on this basis?

Now, if we just go back and put this up to
General Burns, we start all over again on

another attack, and I believe we may spend
a great deal of time and be back here a week

later just the same.

H.M.Jr:

Well, I was trying to be helpful. I would
like to make this suggestion. Let's say it

has been brought up here and if it is agreeable to Oscar Cox, I would like to have another
meeting Tuesday afternoon, and between now

and Tuesday, if you could, try to bring an

answer back, you see, SO we know which way

132

- 40 -

we will go with the dollars.
Keynes:

Mr. Secretary, I think we are discussing
entirely two different things. The first
question, is the particular order available
for Lend-Lease? and the second question, if
it is, how is enough money to be found from
one source or another? And the big question
is the second which Mr. Purvis has been talk-

ing about. Mr. Boddis' question is quite a
tiny one compared to that. Are you able to
help us in this particular individual small
case?

Cox:

I think the answer to that is, "Yes," if the

money is found - I mean, one, you make up
your decision that you want to use the money

for this purpose, and I think you are on the
road to a practical solution because the
manufacturer has said to the British alone,
"We won't take this modification where the
modification contract runs between the
United States and us as manufacturers.

Now, it may very well be a different case,

where the U. S. Army comes along and says to

the manufacturer, "We want you to take this
modification contract," because you are an
expiring customer and the U. S. Army is a
continuing customer.

H.M.Jr:

Could I just make a little suggestion?
Whatever my time is worth, if you don't mind
my saying it, I don't think you are making

the best use of it. What I had hoped to
get and I haven't got - I mean, if I could
get it, I could be of some use. I have the
position of the British Treasury as of June
1. I had hoped to get the position each

week. What went in and what went out and
some way to be able to gauge what your dollar
expenditures were on a weekly basis. Now,
I am no nearer that today than I was on

133

- 41 -

the nineteenth, and I have no feel of the
thing,
up
now.and you are getting me all mixed
Keynes:

But that is all back history, and that
we haven't got ourselves and can't give you.
The exchange fund is paying out money on

or andisso
far
provided

all kinds of tickets because

wants as the it BPC Australia orders, that already on. South In Africa so

but the rest of the thing which is the

trouble, we don't know ourselves. There is

no means of knowing.
H.M.Jr:

When will you?

Keynes:

What we are wanting to do--

H.M.Jr:

When will you?

Keynes:

Where we shall be able to set up an organiza-

tion which will be routine to coordinate the

major activities this way, but it will take

a very long time because it is only in the
last week that we have been told that it
was worth while attempting to centralize the
ordinary dominion requirements. There isn't

any organization at all for it.

White:

Mr. Keynes, I think possibly you are talking
about two different things. You are talking

about a further - a more comprehensive statement which you are working toward. I think
the Secretary had reference to the statement
which Sir Frederick said he was going to have
every week, just a cash statement.
Phillips:

Just a statement of the cash balance?

White:

The difference from the previous thing.

134

- 42 Keynes:

It wouldn't tell you anything. It will just

be at the beginning of the week we had a

hundred and thirty-eight million dollars
and at the end of the week we have got a
hundred and sixteen, something like that.
H.M.Jr:

Well, at least it would give me that much
ofweek.
an indication of how much you are using
a

Phillips:

Yes.

Purvis:

That is going to be done, isn't it?

Phillips:

Yes.

Keynes:

It wouldn't even do that.

H.M.Jr:

They have it. Sir Frederick has it.

Purvis:

If the Secretary wants it, I think the point

Keynes:

is that if it will help him in the slightest
and it can be given, let's give it to him.
Yes, certainly, but I don't think it will
get us an inch farther forward. Let's see
what it is worth, but I don't think it is
worth anything.

H.M.Jr:

Could I have a look at it?

Keynes:

Yes.

H.M.Jr:

Because I don't know - I can't tell. As far

as I am concerned, I don't know any more today

than I did on the nineteenth. I don't know

how fast the money is going out.
Purvis:

The fact is, we are a billion and a half short,

approximately.
Keynes:

We have given estimates, and whether it comes

135
- 43 -

this week or next - it isn't exact. We have

provided full estimates of what we think we
are going to spend over a period. If you
take it week by week our estimates will be

inaccurate, but if it is a little less this

week, it may be a little more next. These
commi tments have got to be made some day.

It isn't very important whether they are

paid this week or next week or the week
after.
H.M.Jr:

Well, the estimates as to when you have
reached the end of your rope - I mean, we
have had this now for a good many months and

the situation never turned out to be as bad
as the British Treasury thought it would be.

Keynes:

But all these payments - you will find that in

the estimates we put in a week ago, we don't

expect to be short of cash at any time. After

we have got the proceeds Mr. Jesse Jones has

loaned, we shall for the time being have quite
a lot of money so that the immediate cash

position will be better in July than in any
subsequent month for a long time to come.

H.M.Jr:

Well, just let - I don't want to go by my
memory.

Merle, when was - what was the first month
that we were given the date that the British
Treasury had reached the end of their rope?
Phillips:

June, wasn't it?

Cochran:

No, when we talked to Sir Frederick lastfall.

H.M.Jr:

I have got the date. I will write down what
I think was the first time, but you tell me,
you see. I remember it.

Cochran:

I can't tell you.

136

- 44 Keynes:

It all depends on how fast your contractors

deliver the goods. If they deliver ten percent more we shouldn't have anything.

H.M.Jr:

As I remember it, I think it was January that

you would be out of funds.
Purvis:

Contractors are behind on the deliveries, that
is true, Mr. Secretary. On January, February,
March outgoes on our contracts, April, May,
and June are less appreciably than we expected.
To our great regret, it means that on the
sheets that I get, the bulk of the cases,
contractors are behind. That means our outgo
hasn't been quite so great.

H.M.Jr:

Well, I am extremely anxious to be helpful

to the British Treasury. I want to be just
as helpful as I can. In order to do that,
I have got to get certain information which

may be of no value after I get it, but at
least, I would like to have it. To evaluate
the thing and go back over the picture for
six or ten or twelve months and take a look

at this thing and sort of get a view of the
thing because I went to the President once

or twice on this; and, if I go to him again,
he will say, "Well, they are just crying,

'Wolf,' that is all."

Keynes:

Mr. Secretary, what we are trying to do is,
we thought with your approval to build up a
balance of the order of six hundred million
dollars. We have shown estimates that on
certain assumptions our balances early next

year will be something of the order of two
hundred. Then on other assumptions they
could be larger.

Well, now, nothing that we can show you as

to whether the contractors are exactly living

up to their contracts or not will materially

137
- 45 -

modify that. That is the big factor.
H.M.Jr:

If you don't mind, you work one way, and I

work another. To be helpful, I can only

work in a certain rather slow and methodical

way, and if you will humor me a little bit,

maybe by humoring the old man I can come out

at the end and be helpful, but I have got

to be humored a little bit, and all that I

want is to sort of get this thing now on a

weekly basis, get the mechanics set up for
this committee where they will clear this

thing automatically; and then the difficult
ones, like this particular one, I am more

than willing to put the pressure on Cox or
anybody else to try to get them straightened
out, but I want to get the mechanics. I

mean, I have been here eight years. Maybe

it is eight years too long, but I am getting
to be a regular Treasury official, and I have

got to have my statistics and my weekly balance sheet, and I have got to know what is
going on, just the way with my own check

book, and I haven't got that and the fact I don't want - I have gone to the President
once or twice on this, and I have missed it
by about six months, and I don't want to go
again in your behalf unless I am nearer right
than what I was before, but he has sort of

made fun of me that I have so bearish on
your position, and when I go back he says,

"I told you, you were wrong." That is what

he told me the last time. I don't want to

go back again unless I am sold on the fact
that you people are up against it, which, at
the moment, I am not sold on.
Keynes:

Up against it, in what sense?

H.M.Jr:

For cash.

Keynes:

But we aren't expecting to be up against it

138

- 46 for cash. We have put in estimates which

never fall to zero.
Purvis:

I think it is just - up against it is just

a phrase, depending how you interpret that,

Mr. Keynes. I think the point is, I am the

one who is up against it. I have a program
in the British Government dating back to
January and February which is about a billion
and a half short. You are fluctuating around

a certain number of dollars in the till, but
actually those orders, it is a fact, are

delayed month to month, week to week, and

day to day, and that is my particular problem,
the problem of getting the orders started,
because they will certainly never be produced

until we can get the initiation orders in.

I see no way that - we have examined this with
General Burns with considerable care. I see
no way of bridging that gap so far as being

up against it for placing war orders is concerned except through this temporary letter
of intention.
H.M.Jr:

Well, I think you have got to sell Cox on

Purvis:

General Burns will report that to you because

that.

he has been into it a great deal. He is the

one who is telling us we are short. We are
not telling him because we don't know. He
is the only one who holds the dollars. We
can only say, "Hereare the quantities, but
he has handed us back a list of orders over
his signature, orders which cannot be placed
through lack of finance, item by item, which
we have put in requisitions for some considerable time back.

Cox:

Are you counting to any degree on the three

billion dollars asked for for aircraft in the

Army?

139

- 47 Purvis:

It is entirely apart from that. That is

completely obligated and the letters of
intention around. Every single one of the

manufacturers on heavy bombers has for
a month been proceeding with production.

In all the items I am talking about which
are ordnance, tank items, things of that

kind, there are hundred of them held up
because we are advised by the War Department that they have no funds.
Cox:

Well, now, wait a minute.

Purvis:

And the requisitions are in and it has all

been agreed in regular expenditure programs,
balanced and reconciled, and is in General
Burns' possession.

Cox:

Not to take up your time, Mr. Secretary, but
I think we can help to clear that one up
because there is a War Department appropria-

tion now pending which gives the Chief of
Staff a completely unlimited contract
authorization, to go out and buy tanks and
everything that goes with them, for instance,

with no dollar limit.
Purvis:

We are advised, Mr. Cox, that the War Depart-

ment will not move without Presidential
direction. Bringing that before the committee is our problem.
Cox:

I think the Secretary is right, I don't think
that from that point out is a committee prob-

lem.

H.M.Jr:

I am not - I am not sure that I agree with
you. It is a dollar problem, Oscar.

Viner:

They could go ahead if they had the dollars,
couldn't they?

140
- 48 Purvis:

That is right.

Cox:

You are talking about a billion and a half.

Purvis:

If we could get two or three hundred million,

we could place the most urgent items.
H.M.Jr:
Cox:

I do think it is a dollar problem.
I think they are inter-related, but I think

it is a practical matter. On this open-ended
contract authorization, if you want to get

them together full blast on what our Army will
need for an armored division and on what the

British will need for an armored division,
then the President has got to say to the
Chief of Staff, "Here is the major policy

of the Government," and we want you to order
so-and-so and so-and-so and so many tanks.
White:

Mr. Secretary, I have a suggestion to make.

I am wondering whether much of the discussion
today might have been considerably reduced

if we had an opportunity to have a prior
meeting right before coming in here. Some
of this material was just presented, and
there hasn't been any time to thrash through

much of this before we came in here.
H.M.Jr:

Well, Harry, You will have to, because I
won't go through this again.

White:

So that I suggest the next time that you--

H.M.Jr:

I won't go through it again. Something has
to be worked out that there has to be -

because it is silly for me to sit around
with all of these things up in the air
and have to do all the spade work here.

White:

Well, if you will indicate the next meeting
you want and then we can arrange a prior

141

- 49 meeting right before so that when we come
here there will be complete agreement.
H.M.Jr:

I am ready at three o'clock Tuesday.

White:

Well, if we could meet Tuesday morning, if it
is agreeable.

Purvis:

I am afraid I have got to go away for a few
days.

H.M.Jr:

You should.

Purvis:

I will have somebody else here. I am a little
afraid, myself.

H.M.Jr:

Well, you should.

Purvis:

But we will have a proper representation.

H.M.Jr:

You can switch Alphand. He is down for
three o'clock.

Cochran:

Yes, I will switch him.

H.M.Jr:

Why not let's say three o'clock Tuesday?

If you can stay behind a minute, Arthur, I
would like to talk to you.
Purvis:

Yes, I will.

H.M.Jr:

And then if they could do that thing in the
morning in your (White's) office.

White:

Yes. Since today is Thursday, I thought we
might try meeting again tomorrow, and no
matter how frequently you meet, I think that
always before we come here we ought to have

a prior meeting.
Purvis:

Yes.

142
- 50 H.M.Jr:

They ought to see my agenda. I think the
English should see my agenda before it is
brought to me.

Childs:
H.M.Jr:

It would be very helpful.

And then if they say they are not ready, it

wouldn't go on the agenda.
White:

Then supposing we--

Keynes:

Mr. Secretary, I think we have our own agenda,

and I think we ought to leave that with your
people first.

H.M.Jr:

Have one agenda and simply say,"We won't bring

this up because we are not ready."

Purvis:

It needs a little secretariat, does it?

Keynes:

Yes.

H.M.Jr:

Well, White will represent me.

White:

Well, then, supposing we meet tomorrow and

we will also meet Tuesday morning. Is that tomorrow in my office at whatever time is
agreeable. Is that too soon, Oscar, to get
some action in?

Cox:

I would think so, because we have a few other
things to do.

White:

Well, tomorrow is Friday.

Childs:

Three o'clock?

White:

It will have to be, then, Tuesday morning.

Phillips:

We could find plenty of material for meeting
tomorrow afternoon, can't we.

143
- 51 Childs:

I can have anything tomorrow afternoon that
anybody wants, any form that is approved.

White:

Let's make it tomorrow afternoon, then.

Cox:

I think we can proceed faster in the Tuesday
meeting if instead of a meeting tomorrow we
map out those things with a smaller group.

White:

Except, Oscar, I have found that every time

we have met, there have been points about
which there has been di isagreement and in

which clarification has resulted. It is

better to clarify as much as you can, and

then you may make progress by the time the
Secretary sees us on Tuesday so that even

if we get together for half an hour - if

we are in complete agreement, we can get

together in fifteen minutes. If we stay

longer it is because there isn't complete
agreement, so it is necessary to stay longer.
I would suggest that we meet tomorrow afternoon, if it can be arranged.
H.M.Jr:

Are you going away?

Cox:

I am going away Saturday morning.

H.M.Jr:

Can't you meet with them at three o'clock tomorrow?

Cox:

I think so, if it won't take very long, because
I have got a lot of other things on the
schedule.

White:

We will try to make it brief. We will con-

H.M.Jr:

All right.

fine ourselves to be as brief as we can.

144

June 26, 1941

AGENDA FOR 3:00 MEETING

1. Mach progress has been made in clarifying the
steps accessary to be taken to expand the coverage of LondLease arrangements with Deminions and over various types of
commodities.

Funds have been carmarked by Mr. Hepkins to take care
of reimbursements on contracts over 850,000 each placed after
March 11, but the British have net yet selected and submitted

to Mr. Cox the appropriate contracts to be taken care of.

2. Hopkins' inquiry re possibility of British Treasury

supplying dollars with which to pay personnel of contemplated
American corporations created for the purpose of arranging

the ferrying of planes acress the Atlantic.

3. Various memoranda that were promised to be ready seens

(a) On wool, strategie materials, 0000a,
imports on private account

(b) The recent statement of the cash position
4. Actual contracts under 850,000 placed since March 11,
to be submitted to Mr. Gex, (only three have been submitted).
5. Proposed purchases of the British to be submitted

to the committee for examination.

6. Anything further on Deminien needs and centralization

of Demision purchases here.

7. Recent developments in proposal to borrow dollars
from the Reconstruction Finance Corporation against collateral.

HDW/MW

6/26/41

145

JUN 26 1941

Dear Mr. Cox:

The draft of agreement proposed to be
entered into between the Kingdom of the
Netherlands and the United States under the
Lend-Lease Act has been examined. I have

no suggestions to offer as to its content as,
assuming a very simple and flexible understanding is the objective, the agreement
sent me would seem to fulfill its purpose
admirably.

Sincerely yours,
(Signed) E. Morgenthan, 387

Secretary of the Treasury.

Oscar Cox, Esq.,

Division of Defense Aid Reports

Office of Emergency Management

Federal Reserve Building,
Washington, D. C.

JJO'C.Jr/Lsw
6/23/41

File to Mr. Thompson

By Messenger

146

June 17, 1941

Copies to:

Mr. Bell
Mr. Foley

The Secretary would like

you to prepare draft of reply for
his signature.

N.M.Chauncey

147
OFFICE FOR EMERGENCY MANAGEMENT

DIVISION OF DEFENSE AID REPORTS
WASHINGTON D. c.

June 7, 1941

Dear Secretary Morgenthau:

I am enclosing herewith a copy of a proposed
agreement to be entered into between the Kingdom of
the Netherlands and the United States under the LendLease Act.

Since the Netherlands Government wishes to
proceed as soon as possible under the Lend-Lease Act,

it would be very helpful if we could have your views
on this proposed agreement at your earliest convenience.
Sincerely yours,

Oscan lot

Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Treasury Department
Washington, D. C.
Enclosure

148

DRAFT OF PROPOSED AGREEMENT

To make possible the establishment of those international
relationships essential for the maintenance of peace with freedom,
the Governments of the Kingdom of the Netherlands and the United

States agree, pursuant to the Act of March 11, 1941, as follows:
1. The United States will supply the Kingdom
of the Netherlands with such defense articles and defense information as the President shall authorize to
be transferred.

2. The Kingdom of the Netherlands will, until
further notice, pay in advance for all defense articles
and defense information requested by it to be trans-

ferred. In the event of its inability to supply any defense articles or defense information paid for in advance
by the Kingdom of the Netherlands, the United States will
refund such advance payments, or credit the Kingdom of
the Netherlands with such payments against other defense

orders then or thereafter presented.
3. The Kingdom of the Netherlands will not, without
the consent of the President of the United States, trans-

for title to or possession of any defense article or

149
-2-

defense information transferred to the Kingdom of the
Netherlands hereunder, or permit its use by anyone not

an officer, employee, or agent of the Kingdom of the
Netherlands.

4. If, as a result of the transfer to the Kingdom
of the Netherlands of any defense article or defense
information, it is necessary for the Kingdom of the
Netherlands to take any action or make any payment in

order fully to protect 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 Kingdom of
the Netherlands will do so when so requested by the
President.

5. 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 authorised, 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

150
-

States and the Kingdom of the Metherlands.

Signed in Washington in duplicate this
day of

, 1941.

ON BEHALF OF THE UNITED STATES
OF AMERICA

(Title)

ON BEHALF OF THE KINGDOM OF THE
NETHERLANDS

(Hale)

MECKINK

COSUKP
ORDERICE

151

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

DATE June 26, 1941

Secretary Morgenthau

FROM

Mr. Hapa AAA

The originals of the files are in Mr. Philip Young's

possession but we have copies. Each transaction consisted
of the following documents

(1) Letter of request from Sir Frederick Phillips
and letter of transmittal from Mr. Charles T.

Ballantyne, together with detailed statements
itemizing the proposed contracts to be placed;

(2) Letter from Mr. Philip Young stating that the

Treasury had no objections to the proposed orders.

On the detailed statements Sir Frederick Phillips indicated his approval by his signature.
There is attached a sample set of the documents involved
in one day's transactions.
Attachment

152

Request-of

Sir Frederick Phillips

THE BRITISH SUPPLY COUNCIL IN NORIN AMERICA
Copy
Box 680

TELEPHONE REPUBLIC 7860

BENJAMIN FRANKLIN STATION

WASHINGTON D. c.

March 6, 1941.

The Honorable Henry Morgenthau, Jr.,

Secretary of The Treasury,
Washington, D. C.

Dear Mr. Secretary:

I write to inform you that I

have approved and noted the contracts contained in
the following statements, entitled "APPLICATION FOR
PLACEMENT OF ORDERS IN THE UNITED STATES THROUGH
THE BRITISH EMPIRE PURCHASING MISSIONS*, dated

March 6, 1941:
Page

Total

Initial

Value

Payment

British Purchasing Commission

Iron & Steel #68-29 $4,541,597.00 $850,109.25

British Air Commission #23 1,187,065.00
Total

590,000.00

$5,728,662.00 $1,440,109.25

Yours very truly,
A

Qudited

2013

RECEIVED
MAR 6 1941
Treasury Department
Office of Philip Young

ISS
THE BRITISH SUPPLY

Letter-of transmittal of
Mr. C. T. Ballantyne

153

MERICA

Copy
Box 680

TELEPHONE REPUBLIC 7860

BENJAMIN FRANKLIN STATION

WASHINGTON D. c.

March 6, 1941

Mr. Philip Young,
Assistant to The Secretary,
Treasury Department,
Washington, D. C.
Dear Mr. Young :

We attach hereto two copies of the
following statements, entitled "APPLICATION FOR
PLACEMENT OF ORDERS IN THE UNITED STATES THROUGH

THE BRITISH EMPIRE PURCHASING MISSIONS", dated

March 6, 1941
Page

British Purchasing Commission

Iron & Steel #66-69

British Air Commission
Totals

#23

Total

Initial

Value

Payment

$4,541,597.00

$ 850,109.25

1,187,065.00

590,000.00

$5,728,662.00

$ 1,440,109.25

We also enclose a letter of Sir Frederick
Phillips stating that these contracts have been noted and
approved on behalf of the U. K. Treasury.
Yours very truly,

Audited
Go

Associate Secretary
Encle.

2013

RECEIVED
MAR 6 1941

Division of

Research and Statistics Treasury Department
Office of Philip Young

154

ORDERS

British Purchasing Commission
STRY

UES IN U. a DOLLARS
SUPPLIER

DESCRIPTION

VALUE OF ORDER
CAPITAL

Plates - Carbon Steel

2300 tons

Billets .

8 130,000.00

1250 tone

53,000.00

Rerelling Billets

3000 tons

120,000.00

Sheet Slabs

3000 tens

125,000.00

Hurry Barris Company

Seamless Tubes

140 tons

7,280.00

- ADD.

U.S. Steel Export Go.

Rerelling State

500 tons

21,000.00

800 tons

33,000.00

Sheet State

1000 tons

41,000.00

Rerelling Slabs

1500 tons

60,000.00

7000 tons

290,000.00

2000 tons

90,000.00

678 tons

130,000.00

ADD.

BISC CS 62

TOTAL

Total False

11/516

Spoc. 228
9

PRODUCT

BISC GS 68

RISC os 60

Bothlehen Steel Export Corp.

ABD

BISC 08

Jense & Lenghlin Steel Carple

BISC CS %
15

JBL/STO

RISC 08 57

IRON & STATE

RISC os %

UNIT AND
QUANTITY

NO.

- 4 2943

CONTRACT

STATEMENT 24

ORDERS PLACED IN THE UNITED STATES THROUGH THE BRITISH EMPIRE PURCHASING MISSIONS

32,509.00
-

7,280.00

Spec. 203

USS/558 ADD.

.
.

BISC 08 66

USS/630 SP.266

Billets
.

BISC 08 65

Sp.253

ams os 64

- Sp.144

BISC as 68

a
12

Spec. 215
44 BISC 08 6

Sp. 289

Bethlobes Steel Export Corp

31.Ng.Steel Round Bare

BISC CS 68

SAND/502 SP. 175

Santwik Steel, Inc.

Bandman Steel

RISC CS 69

BKTR/999 ADD

Bethleben Steel Export Copply

Rerelling Billets

3 tons
750 tons

3,000.00

750.00

33,000.00

5
6

Spec. 265

RECEIVED
MAR

Shall Steel

304 tons

18,000.00

Shall Steel

1533 Tone

90,000.00

Island Steel Company

Rissed Steel Slabe

6500 tons

295,000.00

73,750.00

1714 tons

100,000.00

25,000.00

1000 tem

50,000.00

75 test

6,000.00

1,500.00

800 tens

9,500.00

2,375.00

.251

BISC OS TO

A 2013
6 1941

Division of
.

DM/512 SP.245

8
9

BISC 08 72

BETR/580 SP.#

BISC 05 71

RECEIVED
MAR 6 1941

BISC CS 75

REP/541 SP.279

Republic Steel Corporation

Shell Steel

BISC CS 7%

USS/628 SP.260

U. 5. Steel Export Co.

Forging Hoose

BISC CS %

381/568 57.261

Jense & Laughlin Steel Corp

Round Bare- Cold finished

BISC CS 95

J&L 537 ADD.B

Seanloss Steel Tubes

Treasury Department

Spec. 118

Office of Philip Young

Increase is price.
No increase is test
NUMBER COPIES

STICAL

Detailed Statement

availed

COPY NUMBER

did

155

DOM-1-41

British Purchasing Commission

- -

MINISTRY

PAGE 69

ORDERS PLACED IN THE UNITED STATES THROUGH THE BRITISH EMPIRE PURCHASING MISSIONS

VALUES IN U. a DOLLARS
CONTRACT

DESCRIPTION

QUANTITY

Alleghany Leader Steel Co.
150/1008

758 BISC IN 70

BSC/1003

759 HISC DF 71

Treasure & Williams Steel Forging. Drop Forgings (31 items)
Barrisburg Steel Corporation
Transus & Williams Steel Forging.

( items)
item )

760 HISC DE 72

08/1004

General Motors diversess Corp.

Finish Machined Forgings

761 HISC DF 73

FMC/2006

Ford Meter Company

Machined Forgings (7 items)

Drop Forgings (1 item)

Milmakee Forge & Machine Co.

763 HISC DF 75

SIFC/1020

Steel Improvement & Forge Co.

764 MISC-8

may

SEF Steels, Inc.

765 MISC-9

18/4

Tisken Holler Searing Co.

766 MISC/10

STATES/2

States Marine Corporation

1004

(5 items)

762 HISC IF 74

Total Value

520,000 a (100

$ 42,250,00

39,600.00

9,900.00

13,900.00

3,475.00

184,000.00

46,000.00

19,000.00

4,750.00

6,100.00

1,525.00

258,452.00

64,613.00

265.00

66.25

195 G. Tons

109,000.00

27,250.00

22 G. Tons

8,500.00

2,125.00

165,000.ft. (33)

227 g. Tons

31-3/4 G. tabs
15 G. Tons

(7 items)
+ a. Tons

Ball Bearing Material

150,000.00

915,000.00

Shipping charges - advance for
month of March, 1941

767 MISC-11

Initial Passed

$ 365,000.00

tone)

19 tone

757 NISC DF 69

Bullet Care Steel

7% HISC AS 25

U. S. STual Report Carp.

489/139

BISC AS 24

Cold Drewn Seamless Tubing
.

755

Ohio Seamless Tube Co.

08/103

756

IRON A STEEL - Continued
NISC AS 23

- March 190

VALUE OF ORDER

UNIT AND

Sales Corp. Ferro Alleys
TOTAL a IRON & STREET

SUPPLIER

ITEM

352,000.00

616,000.00

154,000.00

A 2013

8 850,109.25

RECEIVED

$4,561,597.00

MAK
&

TOTAL PAGES Note. 68-69

4,541,597.00

6 1941

$ 850,109.25
Division

Research and Statistics

APPROVED ON BEHALF OF THE U. K. TREASURY

RECEIVED
By

MAR 6 1941

1:00pm

Treasury Department

Office of Philip Young

COMMISSION
YORK

audited

NUMBER COPIES
COPY NUMBER

156

British Air Classication

MINISTRY

ITEM
NO.

PER

CONTRACT
NO.

SUPPLIER

DESCRIPTION

UNIT AND
QUANTITY

Regulation
ATROPAPT PRODUCTS

05/10/1956

5th

- - 4 2943

FORDERS PLACED IN THE UNITED STATES THROUGH THE BRITISH EMPIRE PURCHASING MISSIONS

VALUES IN U. a. DOLLARS

m- I

Bundis Aviation Corp.
(HoLipos Division)

WELL

VALUE OF ORDER

Notal Value

Spare parts for

Bouth
8 990,000.00

$1,387,065.00

starters, etc.

TOTAL - AIRCRAFT PRODUCTS

8 990,000.00

$1,287,065.00

APPROVED ON REMAIR OF THE U. L TREASURY

A-2013

RECEIVED
MAR 6 1941
Division of

Research and Statistics
BRITISH PURCHASING COMMISSION
STATISTICAL DIVISION. NEW YORK

RECEIVED
MAR 1941

100 pm

Treasury Department
Office of Philip Young

NUMBER COFFER

Audited

NUMBER

157
June 26, 1941
4:20 p.m.
Archibald
MacLeish:

I've got a problem I want to put up to
myself sort of sticking our necks out
and we may be all wrong about it, but I
don't think we are. Our question 18
whether the President oughtn't to issue
a Fourth of July proclamation this year
which will not only mo to the press the
day before the Fourth for publication in

you. I - this is - Francis Biddle and

all newspapers on the morning of the Fourth,
but which would also be broadcast by him
at a morning hour which would reach this
country as a whole and which would be an
afternoon hour abroad.

HMJr:
M:

Yes.

That proclamation could be a - well,
another Declaration of Independence
in terms of the Freedoms involved and
the present situation both internally and
externally. In other words, a very
ambitious thing. Now, we not far enough
in talking about it to think that maybe I
might try to produce some sort of a dead
cat for people to throw eggs at, you know,

provided if there's any possibility at
all of the President being willing to

undertake it. What we have in mind is
something so ambitious that it seems to me
we oughtn't to prepare it and then go
running up there sometime next week a day
or two before hand and then say, don't you

think you ought to do this? In other words,
it seems to me that we ought to get to him
with the inquiry now to see whether it's
something that he cares to do. Hence we
turn to you. What do you think about it?

HMJr:

Well, whether he should do something on
the Fourth?

158

-2M:

Yes, two questions - one, should he - 1f it
is a good idea at all to really try to do a
very serious job of a Fourth of July
proclamation covering a lot of ground aimed
abroad as well as here and, secondly, if it
18 a good idea - should we try to go to him
with it as a question now or wait until we
get the thing drafted and if it's any good
at all take it up and see how he feels about

it.

HMJr:

I could give you my horseback opinion - I
mean, I'd present something to him, you see,

and then if it appeals to him he can do it.

Of course, it's a little harder on you that

way.
M:

That's - that's all right., It's just a

question of time now and have got the
week end to work in.
HMJr:

HMJr:

Well, that would be my horseback opinion I mean, to get something and then - that
you think is good and then say well here's
something, now does this appeal to you for
the Fourth of July?

Yeah. Well how do you feel about it as a
general idea? Do you think - this seems
to me that it's one of the greatest moments
that it oughtn't be allowed to go by.
I think that the Fourth of July would be
a grand time to do something.

HMJr:

I think it would be a grand thing

I think - I think it would be a grand thing.
I don't think that - well, he just hasn't
done anything like that and I think it's

high time that he did.
M:

HMJr:

All right, Henry, thank you a lot.
I - it appeals to me very strongly.
All right. Good.

159

-3HMJr:

Is that what you wanted?

Yeah, that's what I wanted to know, yeah.

HMJr:

It appeals to me very strongly.
All right, Henry, thank you.

HMJr:
M:

And

If I get something done could I bring it

out and show it to you - are you going
to be here this week end?

HMJr:

No, but I'll be back either Monday
night or Tuesday morning.

Well, I might even shoot it up to you
by mail, if you're going to be up the
farm.

HMJr:

Yes.

You wouldn't mind looking at it?

HMJr:

No, I'd love to look at it, but

you better do it through my office

because they sometimes send mail up
to me.

All right, fine.

HMJr:

Thank you.

160
June 26, 1941
4:28 p.m.
HMJr:

Morgenthau, speaking.

Josiah

Bailey:

All right, Mr. Morgenthau,
this is Senator Bailey.

HMJr:

How are you?

HMJr:
B:

All right, sir. I hope you
are feeling all right.
I'm all right, thank you.
I wish to call your attention
to this matter of the Eouster

Paper Company in North Carolina
HMJr:
B:

What Company?

The Ecuster Company which

manufactures the cigarette
paper now for most of the
cigarette people.
HMJr:
B:

HMJr:
B:

Yeah.

Down in my state and it seems they came over from France
3 or 4 years ago.
oh, yes.

Now, they find that they have
ehortage of chlorine gas
and they are having great
a

difficulty - they can't store

it - they tell me that they need
about 3 tons out of one thousand
tons and that's all they ask for.
HMJr:

of chlorine gas?

161

Yes. Now, if we don't get
it we have to let up in
the cigarettes and that
will cost us some taxes.
I thought that would interest
you.

HMJr:

Well, it's a little bit

out of my line (laughs)
Well, the taxes are not

out of your line.

HMJr:

a here

No, we are supposed to

do lot of things

but - 18 this a War
Department thing?
B:

Yeah, but I wanted to get
you interested from a

tax point of view. I'm

going to send you a little
note and then I'11 deal

with the War Department,
or
or the
the OPM or whatever it is

to deal with.

HMJr:

Well, I'm afraid you'll
find there's plenty.

What?

HMJr:

I'm afraid you'll find

Yeah, but I wanted to get

HMJr:

there S plenty. (laughs)

your interest from the tax.
Well, I appreciate your
bringing it to my attention.

All right, sir.

HMJr

Thank you.