Full text of Diaries of Henry Morgenthau, Jr. : Volume 449 : Part 2

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L 661
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64

OCT 9 1941

My dear Mr. President:

There is respectfully submitted to you herewith for
your approval an amendment to the Rales and Regulations for the
Anchorage and Movements of Vessels and the Lading and Discharge

ing of Explosive or Inflamable Material, and Other Dangerous
Cargo, prosulgated with your approval pursuant to section 1,

Title II of the Act of June 15, 1917, 40 Stat. 220 (U.S.C. title
50, sec. 191), and your Proclamation of June 27, 1940.
The proposed amendment to the Regulations enlarges

the bombing area danger some adjacent to Hemilton Field Air Base

in San Pable Bay, California; designates certain special
anchorage areas wherein vessels under 65-feet is length need not

exhibit ancher lights; designates Claremont Terminal, Jersey City,
New Jersey, as en explosive Loading terminal; establishes anchorage

areas is New London Harber, Connectious; establishes a restricted
seaplane operating area is San Juan Harbor, Puerto Rice; establishes

restricted areas above and below certain structures of the
Tennessee Valley Authority: and amends paragraph 1 of the General

L 661

225

Provisions of the Rules and Regulations to provide that the
captain of the part in the administration and enforcement of

the Regulations shall be subject to the supervision of the
Secretary of the Treasury, acting through the Commandant of the
Coast Guard. Approval of the amondment is recommended.

Faithfully yours,
(Signed) a. Morgenthau, Jr.

Secretary of the Treasury.

The President,
The White House.

Typed 10-1-41

rhewor. mampson
By Messenger

12:00 Noon

n.m.c.
Gr.4:ab

601
64

TITLE 33 - NAVIGATION AND NAVIGABLE WATERS
CHAPTER I - COAST GUARD, DEPARTMENT OF THE TREASURY
AMERIMENT TO PART , - ANCHORAGE AND MOVEMENTS OF

VESSELS AND THE LADING AND DISCHARDING OF
EXPLOSIVE OR INFLAMABLE MATERIAL, OR OTHER
DANGEROUS CARGO.

Pursuant to the authority contained is section 1, Title II
of the Act of June 15, 1919, 40 Stat. 220 (U.S.C. title so, see.
191), and a Preelamation issued June 27, 1940 (s Fed. Reg. 8419),
The Rules end Regulations Governing the Anchorage and Movements

of Vessels and the Lading and Discharging of Explosive or Inflam-

a Material, or Other Dangerous Cargo, approved October 29,
1940 (5 Fed. Eng. 4401), as amended, are hereby further amended
as follows:

7.10 (e) is amended by adding the following subparagraphs:

8 7.10 Anchorage regulations for certain parts of the United
States,
.

.

.

.

.

.

.

.

.

.

(e)

(17) San Pable Day. Californial Hamilton Field Air Base.
The bombing area danger some heretofore established in San Pable

Bay, California, adjacent to Hamilton Field Air Base (e Fed. Reg.3892)

is hereby enlarged to include the firing range at Hamilton Field,
the danger zone being redefined as follows:
The area in San Pablo Bay, California, bounded as follows:

Beginning at a point on the western shore of the Bay 180 feet

south of the south side of the Hamilton Field Boat House, thenee

south 54° east (true) 6,980 yards, these true north 7,360 yards,
thease true west 4,200 yards to the shore line, thence southerly

along the share line to the point of beginning.
No vessel or other exaft, except vessels of the United
States, OF vessels daily authorised by the captain of the part OF

the Commanding officer, Hamilton Field, California, shall a
ancher, or mean within the above area. The provisions of this
subparagraph shall be enforced by the captain of the part and the
Commanding Officer, Hamiltes Field, California.
(18) The following areas are designated as special anchorage

areas wherein vessels not more then sixty-five feet is length,
when at anchor, shall not be required to carry OF exhibit ancher
lighter
Reymonth Fore River Boston Merber. Massachusette. South-

westerly of . line having a bearing of 119° true from the outer
and of the shart at Net Island; northwesterly of a line having a
bearing of 199°30' true from Pig Book Light to the easters end
of Raccoon Island; northerly of Raccoon Island and a line from its
matern extrenity having a bearing of 245° tree from Beacon 2A;
and easterly of the shore of Houghs Neck.
Mystic River, Boston Marber. Massachusette, Anchorage A:

West side of Chelsea Bridge North. Northerly of the northerly

fender pier of Chelsea Bridge north and a line joining the wasterly
end of the shoreward face of fender pier with the southeasterly
corner of the wharf projecting from the Naval Hospital grounds;

easterly of the aforesaid wharf; southerly of the shore of the
Naval Hospital grounds; and wasterly of Chelsea Bridge North.

228

Ascherage B: Best side of Bridge North. Northerly
of the nertherly fender pier of Chelsea Bridge north; easterly
of Cholsea Beilgo north; southerly of the these line; and

wasterly of a line having a bearing of " true from the easterly
end of the afteresaid fender pier.

Darahaster Bay. Boston Marber, Handwrite Eastward
of a line bearing 22 true from the stuck located a short
distance northwestmank of the Darehester Yacht Club, southward

of a line bearing ⑉ tree from the southerly channel pier of
highway bridge; westuard of the highway bridge and the shoreline;

and northeard of the shore line to its interestion with a line
bearing 21° true from the aforesaid stack.

Sataey Bay, Bestee. South of a line starting
from a point bearing m true, 5,510 yards, from stack of
pumping station - Net Island, - extending thence 506° true to
the shares mest of a line bearing 190° two, estending from the

aforesaid point to the share; north of the above line to its
interession with the eastern boundary: and east of the shore

line to its interestion with the nerthers boundary.

Silver Beach Member. North Felmouth. All
the waters of Silver Beach Masber northward of the isner end
of the entrence channel shall comprise a special anchorage area

wherein vessels not more than sixty-five feet is length, when

at ancher, shall not be required to carry or exhibit anober
lights.

Lynn Marber, Masochusette. North of a line bearing 244°

true from the tower of the Metropolitan District Building, extending from the shore to a point 100 feet from the east limit
-3-

of the channel; east of a line boaring me° true, extending
themes to a point 100 feet east of the northeast corner of the

turning basing south of a line bearing 08° true, extenting
these to the shore, and south and west of the shore line to
its intersection with the south boundary.
Yeakers. New York, Northward of a line on reage with the
footbridge across the New York Central Railroad Company tracks

at the southerly and of Oseystene Station, esstuard of a line on
range with the square, red brick chimney west of the New York
Central Railroad Company tracks at Hastings-on-Rudses and the

easterly yellow brick chimney of the Bloswood power house of the
Yeakers Electric Light and Fever Company, end southward of . line
on range with the first New Yesk Central Railwood Company signal

bridge north of the Yeakers Yeahs Club. (See U.S.C. & 0.5.
Chart No. 768)

New York. Northwind of a line on range
with the northerly face of the elubhouse of the Tewer Ridge Teaht

Club, eastward of a line on range with the elevated tesk of the
Associate wire and Cable Company and the channelward face of the

northerly building on the water front of the said Company's pro-

party, and southward of a line on range with the first footbridge
across the New York Central Railroad Company tracks, north of
the Tower Ridge Teaht Club. (See U.S.C. & C.S. Chart No. 748)

(19) Glassmont Terminal, Jersey City, New Jersey, is
designated as explosive leading terminal at which explosives may
be leaded or discharged directly between vessels and the share OF

between vessels. The regulations for the Part of New York
(33 CFR 208.25) affirmed and adopted as a part of these regulations
are amended accordingly.
-4-

The following new section is inserted:
I 7.28 New Leader Earth Connecticut. Anghorage At Located
is the Themes River east of Shows Gave and is included wi this the
following pointer
(A) 1,400 yards 845° true free Monument, Gyoton;

(B) 985 yards 246° true from Groton;
(0) 1,560 yards 8190 true from Monsment, Gyotons

(D) 1,450 yards - true from Monument, Cystom.

This anchorage is for barges and small vessels drawing loss than
18 feet.

Anchores B: Located is the Themes River southward of New

London and is included within the following points:
(4) 2,460 yards n° true free New Lender Harbor Light,
(D) 2,480 years " true free New London Marber Lights
(c) 1,198 yerds 26 true from New Lendes Harbor Lights
(D) 1,099 yards e° true from New London Marber Light.
Anchorage 01 Located is the Themes River southward of New

London Marber and is included within the following pointer

(A) 450 yards 100° true free New Leades Marbor Light,
(B) 596 yards 270 true from New Lendon Ledge Light;
(c) 1,450 yards 870 true from New London Ledge Light.
America D1 Located is Long Island Sound approximately two
miles west southwest of New Leader Ledge Light and is included

withis the following points:
(4) 2.6 siles 946° true firm New Lender Ledge Light
(a) 8.1 siles BAF true from New Lender Ledge Light:
(c) 8.1 miles ass true from New London Ledge Light,
(D) 8.6 siles ass true from New Leader Ledge Light.

The regulations for Sea Juan Marbor, Puarte Rice, are a
by adding a now paragraph as follows:

, 1.55 Sea Jean. Parte Rice.
.

.

.

.

.

(b) (1) That portion of San Juan Bay located to the east and
south of a line extending from Isla Grande Light to Buoy No. 16,
-5-

thenes to Buoy No. 14, thence due south to a line Funning due
west from Catano Point is designated a restricted compleme

operating area. Except as noted in subparagraph 2 of this
paragraph, se vessel shall operate or ancher within this area
excepting these attendant upon seaplane operations.

(2) Limited portions of the area are excepted as described
below:

(1) Areas in Catano and Pueble Wiejo Bays located west of
a north and south line passing through Catano Point. These

areas may be utilized for the anchorage of small craft.
(11) The channel and turning basis to the Graving Dock
and the channel connecting the Graving Dock turning basia with
the Martin Pena Channel. These areas may be utilized for the
passage of vessels to and from the Graving Book and the Martin
Pena Channel.

(111) The channel from the U.S. Army Terminal in Pueble
Vieje Bay connecting with the Graving Deek Channel at a point

near Buoy No. 16. This area may be utilized for the passage of
vessels to and from the U.S. Army Terminal.
(3) In the event of an emergency, the movement of vessels
in the areas exempted from the restrictions outlined above may be
prohibited during such periods when their presence would endanger

aircraft using the restricted areas.
The following new section is inserted:
I 7.91 Waters of the Tennessee Valley Authority. Restricted
areas are hereby established not exceeding twenty-five hundred

(2,500) feet above and below each of the river structures of
the Tennessee Valley Authority and of the Sar Department hereinafter

listed. Such areas, including approaches through the locks at
such of the structures enumorated where locks exist, shall be
defined by the captain of the port by means of buoys, signs or
other appropriate markings placed OF posted is conspieueus and
appropriate places.

No vessel, beat, raft, or craft of any kind shall enter OF
remain is any restricted area established by this section, except
when proceeding directly to a lock for passage therethrough and
then only by way of the designated and bucy-marked channels of
ingress and agress.

The river structures of the Tennessee Valley Authority and
of the War Department which are included by this regulation are
as follows:
Pickwick Landing Dan, Tennessee River, Tennessee.
Wilson Dam, Tennessee River, Alabana.
General Jee Wheeler Dan, Tennessee River, Alabama.
Cantereville Dan, Teanessee River,Alebama.
Hales Bar Dam, Tennessee River, Tennessee.
Chickensuga an, Fennessee River, Tennessee.

Batte Bar Dan, Teamessee River, Temmers
Mossie Dan, Clinch River, Tennessee.

Charokee Dam, Heleton River, Tennessee.
Hiwasace Dam, Hiwassee River, North Carolina.
00000 No. 1 Dam, Ocese River, Tennessee.
00000 No. 2 Dam, 00000 River, Tennessee.
Blue Ridge Dam, Tacooa River, Georgia.

Great Falls Dan, Caney York River, Tennessee.
Great Falls Intake Dea, Gollins, Tennessee.

Primary responsibility for the enforcement of this regulation
shell rest upon the captain of the port, but officers and employees
of the Tennessee Valley Authority stationed at the various river
structures are authorized to assist the captain of the port under
such mutual arrangements as any be made between officers in charge

of each river structure and the captain of the port.
the 7.95 (a) (peraprach 1 of the General Provisions, 5 Fed.
Reg. 4410) is assended to read ne followe:

I 9.95 General Provisions, (a) Whonever the term "captain
of the ports is used is these Bules and Regulations, it shall
also be construed to include such enferement officer, other than
the captain of the port, as may be designated by the Secretary
of the Treasury pursuent to section 2 of the Regulations issued
by the Secretary and approved by the President on June 27, 1940.

The captain of the port is the officer of the Goast Guard
designated as such by the Commendant of the Coast Guard for

certain parts and territorial waters of the United States. In
the administration and enforcement of these Aules and Regulations,

the captain of the port shall be subject to the supervision of
the Secretary of the Treasury, asting through the Commandeat of
the Coast Guard.
(Signed) E. Morgenthau, Jr.

Secretary of the Typesary.

Approved:

The White House,
1961.

-8-

V

234

L 661

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OCT 9 1941

The Honorable,

The Secretary of the Navy.
My dear Mr. Secretary:

Enclosed herewith is an amendment to the regulations,

United States Coast Guard Reserve, prescribed by the Commandant

of the Coast Guard with the approval of this Department.

If you an our in the amendment, it is requested that 11
be returned to this Department for publication.

Very truly yours,
(Signed) a. Morgenthan, 3w.

Secretary of the Treasury.

File to Mr. Thompson

By

Messenger 12:00 Noon

TITLE - - NAVIGATION AND NAVIGABLE WATERS
CHAPTER I - COAST GEARD, DEPARTMENT OF THE TREASURY
ANNIEMENT TO PART a - REGULATIONS, UNITED STATES COAST
GUARD RESERVE

The Regulations, United States Coast Guard Reserve,

1961 (6 Federal Regulation 1988 D. I.). are hereby as follows:

a 0.8108 (b) is meated to read as follows

8 0.8108 Preferrence poliey - .

.

(b) Persons whose availability for active duty is
considered by Housquarters to be incompatible with the

availability requirements is paragraph (a) of this tion shall not be appointed or enlisted in the Records

# 8.8108 (a) is - by striking out the words
"ement that the member of appointments made from this

source shall not emoond so parent of the total when
of appointments to be under where they appear unier the

First professess.
a 0.0108 (a) 10 emented to read as followes

a 0.8106 Presented of officeres
.

.

(a) (1) The provisions of paragraph (e). (a). (a),
and (8) of this section are not applicable to the proauroment of temperary officers of the Reserve except

that such officers shall be required to qualify physically. Temporary officers of the Reserve will be
appointed by the Commendant in grades and ranks up to

and including that of lieuteannt commender on the TO
commendation of district commenters, who will satiety
themselves as to the professional, moral and general
qualifications of the candidate recommended.

(a) The provisions of paragraph (a), (d). (a).

and ($) of this section are not applicable to the auroment of Reserve officers from personnel of the Reg-

ular Coast Ganza. Qualifications of such personnel for
appointment will be determined by an examining board convened by the Commentant at Headquarters.

8 0.8105 is mented by adding a now paragraph at

the and thereof as follows
8 8.8105 Procedure in making application for ap"
pointment.
.

.

(o) The provisions of paragraphs (a) and (b) of

this section are not applicable to the personnel of the
regular Goact Goard, except such parts thereof as my
be required by the examining board convened in accord-

ance with # 8.8108 (s) (2).*
6 8.2201 is mented to read as follower
I 0.2801 Munational requirements, complexioned offlears. A candidate for appointment as a commissioned

officer is the Reserve, except a candidate who is a chief

warrant officer, warrant officer, or enlisted man of the
regular Coast Guard, must be a high school graduate and

have sufficient experience in the operation of motorboate

or yashte or on seagoing vessels to justify the appointment desired, provided, that boat or seageing experience

shall not be required of candidates who are found by the
Gemmandant so be qualified by reason of their education

and experience for special duty.
g 8.2203 is assended to read as follows

8 0.2003 All for original appointment as officers.
(a) The limiting ages for original appointments is the
Reserve, except for temporary officers and for personal

of the regular Coast Guard, are prestribed as follows
Smale

Ass

Lieutement ( 1.5.)

a to 45

Ensign

a to so

Chief Warrant officers

86°

Warrant officers

30°

Minimum

Upper age limits are to searest birthday.

officers, other than temporary officers, will not be
given original appointments in grades above lieutemant

(junior grade).
(0) No age limite are preceribed for temporary of-

ficers or for officers appointed from the personnel of
the regular Coast Guard."
The introductory paragraph of a 8.2204 is amended

to read as follows:
# 0.8804 Estrance examinations.

A candidate for appointment as a commissioned officer

238

in the Reserve must pass the written entrance examination prescribed with a BAFK of 70% or better in each

subject to be eligible for appointment, except that
the written exemination will not be required of regular Coast Guard personnel or of candidates being son-

sidered for special duty. The seepe of the entrance
examination is as follows
as 8.5101 to 8.5110 are stricken out and the
following new 8 # 8.5101, 8.3102, and 8.3103 are promulgateds

8 3.3101 officers will be promoted only when they
have been found physically and professionally qualified

for promotion by the Comandant. The findings of the
Commandant may be based upon the recommendations of a

Board of Officers, examination, the service record of the
officer, or such other evidence as be may does sufficient."
a 8.3102 Limiting percentages of officers in higher
grades. Officers of the rank of lieutement commander
and lieutement shall not exceed the percentages of 10
and 25 respectively of the total number of commentioned

officers as may be authorised from time to time by the
Commendant."

a 8.5103 Promotion of temporary officers. If a
temporary officer of the Reserve is qualified for a rank
or grade other than that which he is holding, the Comeandant may, upon the recomendation of the district commender,
revoke the extant appointment end reappoint the officer

in the THE or grade for which qualified.
y 8.3801 in intended to read 110 follows:

8 8.3201 Officers required to appear for examinations.
officers not on active duty authorized to appear before a
Board of Officers or to appear for examination (physical or
professional) for promotion in accordance with the provisions
of 8 8.3101 are required to appear without expense to the
Government."

" 8.3208 and 8.3803 are stricken out.
8 8.5803 (a) is amended to read as follows

# 8.5308 Training duty without pay. (a) Incorvists who
desire to perform training or other duty without pay OF allowances may apply to the district commander of their district.
District commanders are authorised to approve such requests

when the duty is to be performed at activities or aboard

vessels within their jurisdiction. In the case of requests
for training duty without pay is other districts or abourd
vessels outside their juriediction, district commenters coiving the requests will forward same with recommendation

to the district commander concerned for approval or disapproval and submission to Headquarters for action.
8 8.7101 is amended to read as follows:
a 6.7101 Active duty and training duty pay and allowances,

commissioned officers, chief warrant officers, warrant officers
and enlisted man. Commissioned officers, chief warrant officers,
warrant officers, and enlisted mon of the Reserve when engaged

on active duty, on active duty while undergoing training, on
training duty with pay. or when engaged in authorised travel to
or from such duty, shall receive the same pay and allowances

as are received by commissioned officers, chief warrant officers,
warrant officers, and enlisted men of the Nevel Reserve of the

same rank, grade, rating and length of service. In determining
length of service for pay purposes there shall be included,

(1) All periods of active duty, excent active duty while under-

going training; (2) All other service for which credit for pay
circoses 10 give to carbers of the regular Cosat Gent."

240
8 0.7103 is amended to read as follows:
# 0.7103 Pay for the Slot day of the month. when members

of the Reserve perform active duty, training duty with pay.

or active duty entergoing training. including time spent in
traveling to and from such duty, for . period of less than so
days, such duty performed - the Slot day of the month shall

be paid for at the - rate as for other days.
9 0.7104 is another to real as follows

8 8.7104 Reservate is travel status entitled to my,
The pay status of members of the Reserve ordered to active

duty OF training duty with pay begins at any hour prior to
midnight on which they are ordered to entrain for such duty,
and ends at midnight on the day on which they could have
reached their homes by the shortest usually traveled moste

after release from such duty.
, 8.7106 is amended by adding the following sentence

at the end thereof:
When authorised training or other duty without pay is performed officers may be furnished with transportation to and
from such duty, with subsistence earoute.
8 8.7109 10 annualed by adding the following sentence at
the end thereofs

Then authorised training or other duty without pay 10
performed onlisted man may be furnished with transportation

to and from such duty, with subsistance earoute."
a 0.7108 is emented by revising the last sentence there-

of to read as follows
They are entitled to transportation of dependents at
Government expense from home to place of reporting for active

duty, and from place of release from active duty to home.
8 8.7109 is amended to read as follows:
# 8.7109 Transportation of house-hold effects. (a) Com-

missioned of ficers, chief warrant officers, warrant officers,

241

and enlisted - of the first, - and third, pay grains
of the Reserve while on active duty are consected to trease

partation of household goods as - expense - meas change of station as present bed in Coast One You -

Supply Instructions for officers and onlisted - of atalian
make, smoke, and satiago of the regular Coast Smale. -

listed - of the - - - estitled to transportation of
household effects at - expense from h to please of
reporting for active duty - from place of release from assive

duty to have under the - conditions - subject to the limitations prescribed for enlisted - of the regular Coast

Guard - change of station.
(b) officers of the I are embities, when called to
active duty, and release therefreen, to transportation of I
held effects as presertbet for officers of the regular Class

Goard - change of station."
8 7110 is - to read as follows

8 7110 and miles (a) Commissioned officers,
chief warrant officers, and werepant officers of the Reserve

while in pay status, are entitled to the subsistence allenance
proceribed for their respective my periods or ranks is Tay
and supply Instructions.

(b) Enlisted - of the Reserve while - assive duty,
training duty with you. - active duty while entergeing
training are entitled to rations in kind, commited rations,
or whetetenee allowances as processing is Pay and Supply Is

structions for enlisted personal of the regular Count Guard
attached to the was at which each duty is performed.

(e) When authorized by subsistence is kind
will be farmished enlisted man while performing authorised
training duty without pay and subsisted in general moss.
The commanding officer of the vessel or unit at which such

duty so performed will inform the district commer of the

extimated total cost of for each mas pertending
date without pay. The for subsistence furnished

in this - will and be charged to the district committer's
allowment under the Reserve appropriation. The distintes menter's reports of training, however, will inciunts as cettmate as to the total cost of such subsistence.

(d) officere and salisted - of the Reserve while detailed
to training duty without pay my be furnished a notice is kind,
commited suties, or subsistence allowance as my be prescribed
by Bookquarters.

, 9111 (a) is - by inserting the words - reales
after the words "pay partete".

8 0.9118 (a) 10 - to read as follows
8 0.9118 Matters allergies (a) Upon first reporting
for active or training duty with pay, at a location where
uniforms are required to be ware, commissioned or warrant

officers of the Reserve shall be paid a - not to emond
6200 as miniurement for the purchase of the required mi-

forms and thereafter shall be paid an additional - of for the - purpose upon completion of each posited of 4 years
is the Receive except that this letter amount of $80 shall not

become 4a any officer until called to active or training duty
after the completion of the previous 4 year period.

a 0.7118 10 further - w adding the following paragrephe (a). (e). and (8):
(a) In addition to the uniform allowance authorised in
peragraph (a) of this section, officers of the Coast Guard
Reserve, upon first reporting for active duty during time of
was or actional exergency, shall be paid a further sum of $180

for the purchase of required uniforms. Crediting of this additional sum shall be effected in the same manner BE is pre-

seribed for the regular welfort

(e) In time of BRY or national emergency, onlisted men

of the Reserve, upon first reporting for active duty shall be
credited with uniform allowances in the same amount as pre-

seribed as clothing bounty for enlisted man of the regular
Coast Guard upon original enlistment. Enlisted non of the
Coset Guard Reserve, upon reporting for active duty in time
of war or national emergency who have been previously exelited

with clothing allevence, may be issued without cost such additional articles of uniform and bedding as may be necessary

to complete their outfits, such issues not to exceed in value
the amount prescribed as clothing bounty for onlisted - of
the regular Coast Guard upon original enlistment.
(8) Items of uniform clothing. bedding and equipment
issued to members of the Coast Guard Reserve under authority

of the proceding articles will remain the property of the
Government. Upon separation from the Service the Incorrist

may be required by his ammanding officer to return the

clothing 00 secure. When clothing is turned in, a credit
shall be made in the man's service record and, in addition,

the officer earaying the alothing account shall be notified
of such return."
a 8.9801 (b) is emended to read as follows:
8 0.7801 Compensation for injury. under United States
Companyation Commission.
.

.

(b) Any reservist, other than a temperary reservist,

who if called or ordered into extended active service in

excess of thirty days, suffers disability or death in line
of duty from disease or injury while so employed shall be
doomed to have been in the active service of the Coast Guard

during such period, and such reservist or his beneficiaries
shall be in all respecte entitled to receive the same pensions,

or may hereofter to provided by lav or regulation for members
of the Naval Reserve who suffer disability or death under

stafler conditions. Any such reservist who is also eligible
for & pension under the provisions of section 8.7808 OF conpensation from the United States Repleyees' Compensation can

mission as set forth in paragraph (a) or this section shall
elect which benefit he shall receive.
a 8.7205 (e) is amended to read as follows:

8 8.7205 Certificate for disability allowance.
.
.

(a) The following affidavit will be required of every
Reservist upon reporting for active duty or training duty
with or without pays
"I

U. S. donet Guard

,

Reserve, being first duly sworn, upon oath depose

and any that I an not drawing, nor have I a claim

pending for a pension, disability allowance, dieability compensation, or retired pay from the
Government of the United States.

Subscribed end swern to before - this
.

, 19

of

day

(Signature and Official Title)*
# 8.7205 is further amended by adding the following
now paragraph (a)

(a) Upon being furnished the foregoing affidavit the

officer to whom the Reservist reports for active OF training

duty, shall indorse on all coving of the reservist's orders,
the following certificates

245

"I certify that the above-marsed officer has

assested the required affidavit stating that
be is not drawing a pension, disability allowands, disability compensation, or retired pay
from the Government of the United States."

R. N. WASSONS,

Bear Matrel, U. a. Coast Goard,
Commandant.

the Nevy Department sensure

is the foregoing -

Approveds

OCT 9 1941
Date

Date

(Signed) R. Morgenthan, Jr.

Secretary of the Mavy

Secretary of the Treasury

246
Analysis of Proposed Amontments to Coast Guard Reserve Regulations.
8 8,2108 (b)

The wording of this maniment is substantially the same as that in
the present Regulations, but with reneval of the previous restriction
on appointment
OF enlistment is the Reserve of civilian employee in the
Coast
Guard.

8.8103(a)
A considerable number of chief warrant and warrant officers and onlisted man in the regular Coast Guard who, by reason of their training
and experience will be of greater value to the Coast Guard, in an advanced
status during a war or national emergency. This amondment removes the TOstriction on the number of appointments that can be made from this source.
8.2103 (g) (1)
Same as 2103 (s), present Regulations (except for minor changes in

wording).

§ 8.2103 (g) (2)

Insmuch as the physical, moral, professional and general qualifies-

tions of persennel of the Regular Coast Guard can best be determined from
their Service records on file at Headquartere, the purpose of this amounment is to provide a more efficient and simpler method of determining the
qualifications of such personnel through an examining board at Coast Guard

Headquarters.

8 8.2105 (e)

Paragraphs (1) and (2) require submission of an application on a prescribed form accompanied by certain information such ass
(a) evidence of citizenship
(b) finger print records
(c) prior military OF navel service
(d) photographs, etc.

This information is available at Coast Guard Headquarters in the cassa
of applicants who are regular members of the Coast Guard.
& 8,2801

Many chief warrant and warrant officers of the Coast Guard are not
high school graduates, but have had the equivalent thereof or more through
correspondence courses or in Service Training schools which fully qualifies
them, as to education, for an appointment is the Reserve. The term "high
school graduate" clarifies the present wording #high school education* in
regard to other applicants. This change will also permit the commissioning
of mon qualified for special duty such as investigative work under Captains
of the Fort, Instructors at Coast Guard Academy, etc.
$ 8.2203

This amendment removes the upper age limit for personnel of the

ionally well qualified, but

247
8.8204

a

The present regulations require all applicants to take the written
general examination and exempt Count Guard personnel, who have had B years

or more experience as commenting or engineer officer or watch officer, deek
or engineering, en a Coast Guard Gutter, from the professional emmination.
This amendment will creampt Sease Grant personal from all written emmiss.
tions and will also make possible the appointments of other qualified seevice personnel who would be of greater Value is as advenced status. This
change also exampte from the written examination personnel who might be

particularly suited for certain types of special duty.

@ @ 8,3101, 8.5108

The substitution of those new paragraphs to replace paragraphs 5201

to $109 inclusive is to leave the following items to the discretion of the
Commendants
(1) system for determining order of diversement.
(2) Promotion requirements for Reserve officer.
(s) Service in grade requirements.
(4) Active service requirements.
(5) Instructions for emaining bounds.
Le.sige
This is the same as the previeus paragraph 0.5110.
$ 8,3801

This change is is line with changes given in 0.5101 to 0.3102.
8,5303. 8.7104. 0.7107. 0.9110

This rewards the present articles to cancel the restriction on

allowing travel expense when training duty is performed without pay.

This authorised by Act of July 11, 1941 (Public 166).
8 . 7101

This gives Coast Guard Reserve personnel the - pay and allowances
as the Naval Reserve in assordance with the provisions of Ast of July 11,

1941 (Public 166).

8.7105, 8.7104

Changes the wording of the present articles to clarify the pay status

of a man performing training duty with pay.
8 8 8.7108 and 8.7109 (a)

Permits transportation of dependents and household effects at government expense from home to place of reporting for active duty.

Previous articles did not give this authorization.
8.7109 (b)

for transportation of household effects from temchange allowance.

248
(a). 0.7232
Miner change in wording.
8 6,7118

Allows additional uniform allowance as authorised in the Act of
July 11, 1961 (Fublic 166).
8.7118 (b) (any)

Makes provision for requiring issued uniforms to be returned upon
completion of service and clasifies the governments interest in elething
issued.

8.7801 (b)
The wording 10 changed to being certain benefits accruing to members
to comply with the low in which temperary nombers do not receive retiremost pay of regular persomel.

Includes nooded provision for certification and before pay and allerances
may be paid.

.

249
October 9, 1941
9:45 a.m.
Sen. Walter
George:

Hello.

HMJr:

Hello, Walter?

G:

Yes.

HMJr:

Henry talking.

G:

Yes, Henry.

HMJr:

Thank you for your message on your conver-

sation with the President on Social Security.

G:

Well, of course, that's confidential to John
and you.

HMJr:

I understand.

G:

I called you and you were out. You had gone

HMJr:

home, and I told him to tell you.
Well, I was all in after making up my mind on

that billion and a half issue.

G:

Oh, I guess so.

HMJr:

And so I thought I'd get a breath of air.

G:

Yes.

HMJr:

Well, thank you very much and we'll be guided
accordingly.

G:

Well, now that's what he - that's what the - I
learned, and I think it's going to work out
that way.

HMJr:

How about some of those administrative amendments?

G:

Oh, you mean on the tax bill?

HMJr:

Yeah.

250

-2G:

HMJr:
G:

Yeah. Well, I think we ought to do something
with that this winter and get through with it
while we can. I think the Ways and Means will
be
ready to start at almost any time that you
are.

Well, we'11 keep working. They're not.....
Around November. I don't think before November

you could do - get along with it. They've got
80 many things on right now.

HMJr:

Yeah. Well, we'll keep working with Stamm and

G:

All right.

HMJr:

Thank you so much.

G:

All right, Henry.

his crowd.

251
October 9, 1941
10:30 a.m.
Robert
HMJr:

Good morning, sir.
Hello. Rouse?

R:

Yes,

HMJr:

How's the weather in New York bond-wise?

R:

Bond-wise the wind - well, there's a draft

Rouse:

blowing up, I guess.

HMJr:

I see.

R:

Should I put Mr. Morris on the wire, too?

HMJr:

Yes, surely.

R:

Fine. He's right on now.

HMJr:

Good.

R:

Well, at first blush this morning we had a
bid for our entire holding of a hundred and
three and three-eighths.

HMJr:

Yes.

R:

The market yesterday afternoon stayed at about

the same level as it has been up until almost
four o'clock, when the guessing got pretty

good.
HMJr:
R:

HMJr:
R:

Yes.

And they closed at a hundred and two and fiveeighths, approximately.
Yeah.

This morning, the first thing we heard was
a hundred and three and a quarter, and then
this bid came in from the First Boston Corporation

for forty-three million, which they believed we

252

-2 owned.
HMJr:

Yeah.

R:

.....at a hundred and three twelve.

HMJr:

Who, the First of Boston?

R:

Yeah.

HMJr:

Yeah.

R:

In addition, at that same time, I knew of
another dealer that had a very substantial
buying interest which, including whatever

their client got on allotment, totaled about

fifty million dollars.
HMJr:

Yeah.

R:

Well, it's entirely clear that in selling any
such order that we would accomplish nothing.

HMJr:
R:

Yeah.

Except take away any cushion of buying that

might be needed tomorrow.
HMJr:

Yeah.

and when the dealing in the billion and

R:

a quarter begins.
HMJr:

Have you got authority to sell your rights?

R:

Well, I have talked with my committee and asked

them to think about it overnight. Their disposition when I talked with them about it was it was
a one day thing and that it was unfortunate. I
think, in general, if the Treasury wanted us to
sell, they'd be glad to go along, but they rather
felt that the volume of demand was so big that
it would be a drop in the bucket and wouldn't do
any good.

HMJr:

Yeah.

253
-3
R:

Unless we later in the day at some point
could begin selling it in a small way, and
the indication of a supply coming into the
market might then do some good.

HMJr:
R:

Yes.

I have informed the Board this morning of
the price situation, and I've informed the
other - one other member of the committee -

Allen - and I will Leech, and then discuss
it with them again.
HMJr:

Yeah. Well

R:

Have you any idea

HMJr:

Well, my people

what you'd like us to do?

R:

HMJr:

Well, supposing you sell the forty - fifty
million you've got?

R:

HMJr:

Sir?

I don't think - I think this is a tidal wave
and I just think that you'd - it would only
stop it for a second.

R:

HMJr:

Well, that's my own feeling and I've expressed
it to them, and I think that's the basis for
their feeling that way.

No, I wouldn't urge you to sell them. I mean,
unless

R:

But you'd have no objection to it if at some
point it looked like it was - had gone entirely
too far.

HMJr:

If at some point the blood pressure goes 80
high it looks as though something is going to
burst, why sell them.

R:

Yeah.

254
-

HMJr:

But unless - I have no objection.

R:

Right.

HMJr:

Or no - I mean, if it looks as though the
thing was going to blow off the lid, I'd
sell them. See?

R:

HMJr:

Yeah. I get you.
But I - in other words, I agree with you.
Are they taking good care of Dave Morris?

David

Morris:

Yes, sir. They're looking after me very
nicely here, and I'm getting a liberal education.

HMJr:

Good. Have they got you in the swivel chair
and all that?

M:

Yes.

HMJr:

What?

M:

Yes.

R:

We've got him here pushing buttone and watching

the lights flash yellow and green and so on.

HMJr:

No redlights?

R:

No red lights here.

HMJr:

(Laughs) If there's any change, give me a

ring.
R:

Yeah. Glad to.

HMJr:

Are you all right, Dave Morris?

M:

Yes, sir. Fine, thank you.

HMJr:

How's the weather up there?

M:

Very nice.

255

-HMJr:
M:

HMJr:
M:

Good. Was your family surprised?
They were surprised and very pleased and

grateful.

(Laughs) All right.
Do you want me Saturday morning or not until
Monday?

HMJr:

I don't want you until Monday.

HMJr:

All right; thank you very much, sir.
You re welcome. All right. Good-bye.

M:

Good-bye.

M:

256
October 9, 1941
10:56 a.m.
Marriner
Eccles:
HMJr:
E:

indication of it. By tomorrow I think

we could tell a good deal more about it.
Well, I'm very happy.

I'd sooner have it go this way than be going
the other way.

Well, the financial community right now could
stand a little good news.
E:

I tell you, the billion six hundred million this long an issue to go this way - it only

shows the the demand for investment opportunity.

HMJr:
E:

HMJr:

Uh huh.

And it seems to me that it gives us a good
deal of assurance to look into the future.
Now, Marriner, if you're free Tuesday for lunch,
I'm having Viner and Stewart here on that day;

and I want to talk about future financing. will

you be free Tuesday?
E:

Gosh, I agreed about two months ago - in a weak

moment - to go and talk to this National Tax
Association at Minneapolis.
Oh, damn. Well, now

I wish I could get out of it, but it's an

association that's about fifty years of age.
I know.

And it's supposed to be

I know all about it.
E:

and I thought I might be able to do a
little good with them.

257

-2- HMJr:

E:

I know about it. Well, now, who will be

here; because I want to - who

They've got to have somebody. Well, I tell

you the
HMJr:

Who will you send?

E:

Of course, I could have Ransom come up and

come over. He's down at the Springs.

HMJr:

Oh, I wouldn't - I don't want to spoil his
holiday.

E:

Well, the thing to do would be to have Golden-

weiser. He's, of course, thoroughly familiar
with the problem.

HMJr:
E:

All right.
Gosh, I'm sorry. I'm terribly anxious to be
there.

HMJr:

Well, will you send Goldenweiser?

E:

Yeah. That's Tuesday when, you said?

HMJr:

At one o'clock.

E:

At one o'clock.

HMJr:

Yeah. And then I want - I'm going to do this

E:

Yeah. Well, then I'll be there a week from

once a week from now on.
Tuesday.

HMJr:

Sure, we'll fix it up.

E:

Let me ask you this. Who's going to be there?
Viner and who?

HMJr:

Well, from outside I'll have Viner and Stewart.
And I'm going to ask Allan Sproul to come up.

E:

Yes.

HM rr

See?

258
-

E:

Yes. Well, I think that's - Allan has, of
course, got lot of responsibility in this

picture as the Vice-Chairman of the Open
Market Committee and also President of the
New York Bank, so I'm glad that he's coming.

HMJr:

E:

HMJr:

E:

HMJr:

So I was going to have Allan Sproul and so tell Goldenweiser to be thinking about
1t.

Yes, I'll do that.
And then - I want to do this once a week now
until we
Well, I'11 plan my schedule accordingly; and
of course, had I known before, I would have

Well, this - we've all got to go out of town,
but

E:

Well, I don't go out much; and as a matter of

HMJr:

Yeah.

E:

But I don't know how I'd get out of this one

fact, I don't like it a damn bit.

now.
HMJr:
E:

All right.
All right. Fine.

HMJr:

I 11 be seeing you

E:

Good -bye.

259

October 9, 1941
11:00 a.m.

DEFENSE SAVINGS STAFF

Present:

Mr. Graves
Mr. Olney
Mr. Callahan
Mr. Mahan

Mr. Iseby

Mr. Poland

Mr. Dallas
Mr. Sloan

Mr. Kuhn
Mr. Edward
Mr. Odegard
Mrs. Kuhn

Mr. Duffus
Mr. O'Malley
Mr. Houghteling

Mr. Buffington
Mrs. Klotz

H.M.Jr:

At your service.

Graves:

Suppose we begin by having Mr. Iseby bring us
up to date about--

H.M.Jr:

Where is Frank?

Graves:

Right there with the patch on his chin.

H.M.Jr:

Frank, is that what the juke boxes did to you?
You almost stuck your chin out too far.

Iseby:

Well, we have augmented that, Mr. Secretary.
Cunningham printed five hundred thousand copies

260

-of that song and spent some five thousand

dollars for advertising in the newspapers,
giving the song by clipping a coupon out of
the newspaper to everybody in the City of
Detroit who wanted a copy of it. They
have printed a half million copies of "Any

Bonds Today" and spent five thousand dollars

last week in our three papers advertising.
(Mrs. Klotz entered the conference.)
H.M.Jr:

How much?

Iseby:

Five thousand of our own money.

H.M.Jr:

Mrs. Klotz, Mr. Iseby hit his chin against his
juke boxes.

Klotz:

It looks very suspicious.

Iseby:

In addition to that, the last time I left

here I addressed the Ford shop stewards out

at the Dearborn auditorium. Ford, of course,
is in a peculiar position because they pay
in cash. The payroll is in cash, not voucher.

Of course it is taking a little longer there
to work out a payroll deduction scheme than

in some of the other plants.

Tomorrow evening the West Side CIO Local,

sixty-nine plants, are calling in all the

union heads of the sixty-nine plants on the
West Side, and we are going to talk payroll
deductions for these plants at one time.
This group that you met of the tool and die
people - you remember the chap fainted at

the office. They have been out to do a fine

job, and every day now they take one of their

locals for one of the plants, vote for payroll

deductions, then notify us, and then we in
turn send a man out to the corporation and
arrange for a payroll deduction plan to be

261

-3 installed, so I still stick where I did

before, that the success of this plan

and no other will be the school program

and the faster that it gets started the
quickerthis money is going to roll in and
it can only be one way.

At Niles, Michigan, where we had - well,

we had thirty cities. I kind of copied

our pattern in Michigan. I was going down

the main street and stopped the school
children when school was out and said, "What

do you know about Defense Savings?" Down

at Niles they hadn't started the school

program and these girls and boys didn't
know much about it. Before we got through
that evening the president of the bank as
well as the superintendent of schools and the
professor of economics at Notre Dame Uni-

versity sat along side of me at the dinner,
and he said he was--

H.M.Jr:

You are coming up in the world, I see.

Iseby:

Yes.

H.M.Jr:

Sitting next to the professors. (Laughter)

Iseby:

They asked about that six percent, too, you
know.

H.M.Jr:

You had a good answer?

Iseby:

Yes, I think that was great, particularly

H.M.Jr:

I have got one here on that. It says here,
a letter to the Tribune, "All newspapers

where I am traveling, among the labor group.

emphasize the semi-Communistic tinge of the

recent six percent.
Iseby:

It has been very well accepted with labor and

262

-4all those that I have contacted. So I feel
that we are getting along all right. We will
have to keep on plugging, but there is no
other way that the door will be open, and I
don't care, I have traveled up and down this
land, and that is the school program.

H.M.Jr:

I don't know so much about it. you have
time today and if he is in town, I. F. Stone,

who writes for The Nation, could you put him
and Frank Iseby in touch and let Iseby give

him a little story on the volunteer plan.

Kuhn:

If I can get him.

H.M.Jr:

Would you do that?

Kuhn:

I will try.

H.M.Jr:

Because he writes very well. You can invite
him for lunch or something, you see. See if
you can't get Iseby to give him that story
and get him to write it up for The Nation.

It is I. F., isn't it?

Kuhn:

Yes.

H.M.Jr:

How many people have you got helping you on

addressing meetings in Michigan? How is that
going?

Iseby:

We haven't any additional help on the union
meetings so far.

H.M.Jr:

I thought you were going to get four or five

people in Michigan.
Iseby:

But that was going to take a week. I figured

H.M.Jr:

You mean you are waiting on Washington?

that today I would find out whether we had the
authority.

263
-5Iseby:

Yes. They said it would take about a week

H.M.Jr:

Oh, I thought that was cleared.

Graves:

It is clear. Perhaps we have not made this
clear to Mr. Iseby, but we did get authority
from the Civil Service Commission to put any

to clear.

people on.
Iseby:

Oh, well I didn't know about that.

H.M.Jr:

So go to town on it now.

Iseby:

Yes, because we are getting--

H.M.Jr:

If you don't get them, come to Uncle Henry.

Iseby:

I will be glad to answer any questions. We

are addressing ninety-seven meetings we have

now of Rotary, Kiwanis, Lions Club. That is
separate from this other.
H.M.Jr:

But the payroll deduction, you are my example

number one.
Iseby:

Well, I say by next week - I had a man on
the train coming down, and I notified him I
would be out at the Naval Arsenal. He is
president of the Hudson Motor Car Company.

Their switch-over, Mr. Secretary, is going to
be a little bit better than some of the other
corporations on this payroll deduction.
Ford, as you know, will be all right, moving

to the bomber plant, but Mike Manning, who is
head of the West Side local, mentioned to me
about Federal Motor Truck. He said, "Federal

will be out in another three weeks. All em-

ployees will be out." They are making carriages
for bombers, for the hauling of these bombs,

-6-

264

and he said, "They have no additional work."
So they are worried, of course, about getting
this change-over.
H.M.Jr:

Harold, amongst the thousand memos I have sent

you, have I sent you one about going after
Government arsenals and Navy yards particularly?
Graves:

No.

H.M.Jr:

Would you consider that. I mean, the Army
arsenals and the Navy arsenals. I would like
to start as number one, because they tell me
they have got a particularly high morale, the
Federal Shipyards at Kearney, where there are
seventeen thousand workers.

Graves:

As a matter of fact, I think--

H.M.Jr:

I would like to start up there.

Graves:

The Navy plants of that kind are well covered
by the Navy Department allotment plan. I was

just going to call on Mr. O'Malley over there

to tell you what we have done nation-wide on

this payroll allotment plan as a result of

our conversations with Mr. Iseby and of my

talks with you. He can cover it, if you like,
that point of Navy yards.

H.M.Jr:

Well, whatever he has to say.

O'Malley:

The Navy yards proper are being taken care of
through the Navy Department themselves. They

are installing the payroll allotment for the

convenience of their own employees outside of
Washington. They are working on the plan now.
They are going to cover every one of their own

Navy yards, arsenals, and things within the

Navy Department themselves.

265

-7H.M.Jr:

Have they started yet?

O'Malley:

Yes, sir, they are spreading out to the

H.M.Jr:

How about the Washington Navy Yard?

O'Malley:

They have started on the Washington Navy Yard,

field now.

the Norfolk Navy Yard. They have started in

San Diego and they are also spreading up to
the Mare Island Navy Yard and the New York
Navy Yard.

H.M.Jr:

Of course they wouldn't consider Kearney a

Navy yard. They have got a beautiful situation
up there, and I thought you might go in there.
There are seventeen thousand employees there.

O'Malley:

That, Mr. Secretary, is pending decision by
the Secretary of Labor about the kick-back law.
They can't install those payroll allotment plans
until they get clearance from the Department

of Labor that there is no infraction of the
kick-back law in those employers for filling
Federal contracts for construction.

H.M.Jr:

By just the Navy yard?

O'Malley:

Not just the Navy yard. Ship building is one
of those industries that come under that.

Graves:

I understand, Mr. Secretary, the ship building
concerns generally throughout the country,
beginning at Seattle, as I recall, and now in

Maryland and elsewhere, have objected to the

installation of payroll allotment plans be-

cause of rulings of the Department of Labor
which forbid any check-offs from pay, whether
voluntary or involuntary. We have turned

that over to Mr. Foley now who is trying to
clear that up with the Department of Labor.
think you signed a letter to the Secretary of

I

266
8-

Labor within the last week asking for her
early decision and an announcement.

H.M.Jr:

Well, give me another letter.

Graves:

You mean an additional letter?

H.M.Jr:

Sure.

Graves:

I think that this letter has been signed
within the last three or four days. It would

be a little early to follow up.

H.M.Jr:

O.K.

Graves:

I would like Mr. O'Malley to describe

what we have done outside of Government plants

on payroll allotments. I mean the control
system that we are setting up.

O'Malley:

Well, we have set up cards, five - three by
five cards gotten from the records of the
collectors of Internal Revenue of each state
showing employers of a hundred or more employees.

Two sets of those cards are being maintained in

the field in the State Administrator's office.

Two are being sent here to Washington. One

is being maintained in our office as a master

file for future records of the participation by

the various industries and corporations in the

payroll allotment plan. The bulletin went out

to the State Administrators here about ten
days ago advising them of that set-up, advising
them of the installing of the approach of
those corporations having more than five
hundred employees at first, have them set the
example to be followed by the smaller com-

panies. The cards will be maintained in the
State Administrator's file and will be distributed to the local committees to follow
up in their communities. Records will be
sent into Washington. We will compile the
records from those cards.

-9H.M.Jr:

267

Well, what about the - these master lists of
Social Security?

Graves:

That is what this is. These were taken from
Social Security.

H.M.Jr:

Oh, these were taken from Social Security?

Graves:

Yes, Title 8 records.

O'Malley:

Social Security records in the collectors of
Internal Revenue offices of the United States.

H.M.Jr:

And that is this?

O'Malley:

Yes. As of June 30 this year.

H.M.Jr:

Any company that has a hundred or more em-

ployees you take it over, but you only work
with those that have five hundred?
O'Malley:

We are starting off with those that have
five hundred or more. Those that have under
five hundred that have not by that time in-

stalled the plan, we will solicit.

Graves:

One set of cards that Mr. O'Malley is talking
about is for George Haas. That is being re-

tained in the collectors' offices so that the

collectors may endorse on those cards the

data from the June Social Security tax returns
showing the amount of taxable wages and the

number of employees on the roll at the last

pay period in the June quarter. I think

those cards probably have not begun to come

in yet. Is that right, Mack?

O'Malley:

We have the majority of them in now.

H.M.Jr:

The cards for Mr. Haas that carry this special
information on the back?

268
- 10 O'Malley:

Yes, sir, we have those too.

Graves:

So we are practically set up mechanically to

H.M.Jr:

If I want to say, "Well, let's see really how

control this thing.

good is Iseby, we can get out the cards of

Michigan and see"?
Graves:

That is right.

Iseby:

We are going to do the jobs first before we
send any of that in here. I won't answer the
mail.

Graves:

I think Mr. Houghteling might tell us what he
is doing on the labor aspect of this payroll
allotment thing.

Houghteling:

As you know, during this - these last few

months when there have been a great many labor conventions, we have succeeded in getting a number

of the key international unions of both the
A. F. of L. and C. I. O. to adopt resolutions
specifically endorsing the payroll allotment
plans. I was able to send out to Mr. Hyatt
at the A. F. of L. convention at Seattle a
mimeographed pamphlet with eight of these

resolutions. We plan to have the A. F. of L.
convention, if they will, adopt a resolution,
a similar resolution, but, however, the time
of resolutions is pretty well past. We want
to go on getting them, but the question is to

get it turned into action.

Now, I have applications for positions with

us from George Dunn, who was formerly Vice

President of the Brotherhood of Railroad

Clerks; Leo Goodman, Research Director of the

United Shoe Workers of the C. I. 0.; and James

Barrett, Southern Publicity Director of the

A. F. of L., all of whom come to me sponsored

- 11 -

269

by their organizations as good men for us to

put on our - to put out to work in going
directly to the international unions and down
through them to the local unions to actually
turn this program into action. We feel that

the initiative of the local unions, national

and local unions, is very important, and also
the pressure that can be put through the
national union on the local union in connection

with this information that Mr. O'Malley will
have for us as to what shops where there are

payroll allotment plans--

H.M.Jr:

Just one minute.

Houghteling:

What shops where there are payroll allotment
plans are really doing a good job and where

they are not, we believe the best way to put
the percentage of participation from a low
percent up into the higher percents is to get
to the labor unions and say, "Now, your people
aren't doing their part," and that is what we
expect to use these field men on.

H.M.Jr:

Well, now, your field men and the ones that are

Houghteling:

We dovetail, yes. We always--

Graves:

Mr. Houghteling's men will not go into any
state except under the auspices of the state
administrator.

Houghteling:

Yes, we will always go to the state administrator and to the members - chairman of the

in the state, they will all be--

state labor committee.

Graves:

Tell the Secretary how much you know about
Gardner Jackson's willingness to come with
us.

Houghteling: Well, Gardner Jackson has said to me several

- 12 -

270

times that as soon as Mr. Appleby came back
from England, which he has recently done, he
was going to ask for leave of absence and would

like to come over and tackle this job for us
himself along with these other men, all of
whom he knows about and has checked up on.

Graves:

If we are successful in what Mr. Houghteling
is saying, Mr. Morgenthau, we will have five
men on our staff here from organized labor.
There is Mr. Hyatt and the people you mentioned.

H.M.Jr:

Is it all right?

Odegard:

Sure, it is all right. I talked to Jackson last

Graves:

week, and I was just smiling because I thought
maybe there was a little malice in Harold's
question. (Laughter)

Not at all. I talked myself with Gardner

Jackson, and he has said to me the same thing
that he said to Mr. Houghteling. Do you have

some later information?

Odegard:

No, you remember we talked Friday about Gardner
Jackson, or Saturday?

H.M.Jr:

He is certainly all right with you Civil
Liberty fellows.

Odegard:

Gardner is all right. I am having lunch with
him today.

H.M.Jr:

I have known him eight or nine years, and he

is motivated right.

Houghteling: That is all I have.
Graves:

I think Peter might tell you what progress has

been made on this school program here since

Mr. Iseby's last visit. He has conferred this

271

- 13 morning with the people who are working on

this thing, and I think he can bring you up
to date on that.

Odegard:

Well, we have the rough draft of a school manual
that I assume will be ready within the next
few days to go to all the state committees
and the educational workers in the local com-

mittee as well which will set forth in more

detail, more explicitly, the activities in

which the schools may engage in connection

with this program. In addition to that we have
here this morning Mr. James Clark who has been

head of the Readability Laboratory of the

Teacher's College for a good many years and
an experienced educational editor whom I hope
we can persuade to come down and help us with

the preparation of materials for the schools.

It is a specialized job and a job that requires
the kind of training that he has.
In addition to that, I had luncheon with Lyman
Bryson who has been for many years one of the

officers of the American Adult Education Association and was also educational adviser for
Columbia Broadcasting Company. Mr. Bryson

was very helpful and was going to try to help
us to find one or two people who can assist in
doing what Mr. Iseby has done in Michigan, to

assist in field work, of getting a contact with
the educational representatives there, seeing
that the program actually goes along instead
of merely waiting for something to happen and

that is about the status of the--

Graves:

When do you think we can get that out, Peter,

that bulletin to the - to our forty-eight
states?

Odegard:

I should think next week.

Dallas:

There will be one reason for delay, Mr. Graves,

272
- 14 -

and that is that in considering it we felt
that it might be necessary or it might be

wise to have the names of the outstanding
educators with their endorsements included
perhaps on the back of the publication, which
would make it more acceptable to teachers and

administrators. That might take - well, it

would take two or three days or a week for

some one to go and see those people and pre-

sent the manuscript to them and ask for their
endorsement.

Graves:

Within a couple of weeks, I would say, at the
outside, to the time when we will have something
standard in the hands of all our state organizations on this school program. I would like

Mr. Iseby to see that draft, Peter, if it
could be arranged while he is here.

Iseby:

I think you have got to be very cautious. I
am going to be frank in making a statement on
that. I had a few statements this morning to

make. I have sounded out a good many of these

teachers and it is the teachers that are going
to have to do this job. Unless it meets with

their approval, it will not be done. It doesn't

make any difference where it comes from. I
have had a meeting with them, and that is the

general attitude. They have to do it so it
will have to be with their approval and it

won't make any difference how many other people

approve it. Unless it comes direct from the
school teacher groups who say that they are
satisfied that that is the type of program.
Dallas:

That is the people we are going to submit it
to.

Iseby:

It must be to the teachers. They don't care
about anybody else. They flatly told me.

There are eight thousand school teachers in
Detroit and thirty thousand in Michigan saying

273
- 15 -

they will not do it. They will say, "Yes, we

will take it." But if they don't care to start
a program, they won't. I hope that--

Graves:

I think Mr. Iseby's suggestion there is followed by our program, isn't it, Peter? This
is going to the teachers through the school
authorities.

Odegard:

Oh, yes indeed. That is the emphasis. It is
quite obvious, of course, that you can't

submit a preliminary draft to every teacher
in the United States to get his or her approval
before you print it. The best you can do is
to get the approval of the people who are
forward in the field of education and who know
the teachers and teachers' organizations.

Iseby:

Their representatives which they have.

Dallas:

They are direct representatives of the teachers.

Graves:

I would like Mr. Olney to tell you where we
stand on this state organization. You fixed
a deadline of October 1 for getting a start
in every state. I am sorry that we have not
been able to meet that deadline.

H.M.Jr:

By four states you are down?

Graves:

I think it is five.

Olney:

Five states, Mr. Secretary, but one of them,

Delaware, is - we have this new chairman who

does not wish to be officially appointed until
he secures a state administrator. He has indicated that he will accept. So we only have
four and we have contacts in those four states
preparing now to secure the proper man for our
organization.

274
- 16 -

H.M.Jr:

Well, that is pretty good.

Graves:

There is one state, Louisiana, and I think
you would understand why that might be
a problem for us.

H.M.Jr:

What is Mrs. Huey Long doing? Isn't she

available. (Laughter)

Graves:

I haven't heard about that. I think
very quickly now we will be able to clear
up those five states. I think Louisiana
is apt to be the last one that we get

started.
H.M.Jr:

There is a newspaper publisher down there

that is a humdinger. He just fought
and bled and risked his life on this

fight, and he is the man who discovered

that truck that led to the undoing of

the president of that university. It

was his newspaper. It was his newspaper

that sent out - what was the the president of that college, Smith, was that his

name?

Graves:

Smith was his name.

H.M.Jr:

Well, there is a newspaper publisher down

there that fought and bled and died for

us.

Callahan:

Leonard Nicholson, the Times Picayune.

H.M.Jr:

Well, now, if that is correct, why

- 17 -

don't you go to the publisher of
that paper and ask him to take it on?
Graves:

Well, at least we could go and consult with him.

H.M.Jr:

Well, he might take it.

Graves:

Another man that we had in mind con-

sulting down there is the present
president of Louisiana State University.
H.M.Jr:

But this Times Picayune - I mean, they

did do a beautiful job on that situation

down there.
Graves:

I am glad to have that.

H.M.Jr:

After all, most of the money is in New
Orleans anyway. That is a suggestion.

Graves:

Well, I am very glad to have that.

H.M.Jr:

What do you think of that, Peter.

275

276
- 18 Kuhn:

It is a very good paper.

H.M.Jr:

I mean, as an idea.

Odegard:

It seems good.

Kuhn:

Harold, who is the man who is being considered?

Graves:

The man that I am considering in my own

mind - he has not been told of this at all,
but we have a retired Army officer named
Hodge who is now president of Louisiana

State University, and has a very fine

record. I have gone into that. His brother,
a twin brother, by the way, is a planter in
the northern part of the state, and he has
spent his last ten years fighting Huey

Long and Huey Long's gang in northern
Louisiana, and I had in mind seeing Hodge.

Not ask him to do anything, but to get his
advice on what we might do.

H.M.Jr:

Another man you can put on the committee
a own there - what was the member of the
Farm Credit we brought up from New Orleans

who did so well? He was young and aggressive.

You could find out. In Farm Credit we had
a very bright young fellow come up. He had
a little cooperative down there. He came up
and helped me for a while. He was in Farm
Credit. He was a very able fellow. The
Farm Credit people would know.

Graves:

I will make a note on that.

H.M.Jr:

He is a very able fellow, and his attitude

Olney:

Mr. Secretary, we have added to our field

H.M.Jr:

Good.

on the colored question was very progressive.
staff seven new men.

277
- 19 Olney:

They are specially trained in payroll
allotment, contacting the State Administrators and pushing the payroll allotment and
cooperating with them. Those men will be
finishing a class this next week, and be

ready to go out in the field.

Graves:

How many field men does that give us in

Olney:

Fourteen.

H.M.Jr:

Fourteen for you, and you (Houghteling) have

Graves:

That is right.

Olney:

Yes, sir.

H.M.Jr:

Good.

Graves:

Of course, there is a long job of training.

Houghteling:

I may need some more before I get through.

all, travelling from Washington?

five? Is that in addition to his fourteen?

It is very hard to get the type of men we

need because we need top-notch men in labor,

and labor is so active that there are very
few top-notch men that are unemployed and

available for this kind of work.
H.M.Jr:

Fine. What else have you got?

Graves:

Now, Mr. Mahan, I think, can answer some

of the questions that you have been asking

me about posters.
H.M.Jr:

Fine.

Graves:

And he has, I believe, the two portfolios
that you asked for, one for yourself and
one for the President.

- 20 -

278

H.M.Jr:

Nobody ever showed me anything.

Graves:

Have you got that in here, Sid?

Mahan:

Yes.

Graves:

Suppose you begin with that.

H.M.Jr:

They hide their light under a bushel, these

Mahan:

These are duplicates, Mr. Secretary.

H.M.Jr:

Fine. Who are the people who get it out?

Mahan:

Warwick is the man who has been contacting
newspapers for advertising.

H.M.Jr:

That is just what I wanted.

Mahan:

In summary, that adds up to one million four
hundred fifty thousand posters.

H.M.Jr:

What do you call this advertising business
when you have a layout to present?

Mahan:

Presentation.

H.M.Jr:

That is right.

Mahan:

Now, that represents twenty-one different
types of outlets that those posters appear

advertising men.

in. For instance, furniture stores, paint

stores, automobile dealers, men's wear, a
great many outlets that - where we are
shy of posters that gets us into those
places.

H.M.Jr:

Is this series finished?

Mahan:

No, it is continuing, and there are more
coming in all the time, and at the back of
the book there are six, I believe, that
are just in black and white form. They

279
- 21 -

haven't been printed yet, but they are all
approved.

H.M.Jr:

Well, would you get me one - I would like
one for the Vice-President and one for Mrs.
Roosevelt.

Mahan:

In addition to the one we have here?

H.M.Jr:

Yes.

Mahan:

I have an additional one.

H.M.Jr:

Well, I would like --

Graves:

Two more.

H.M.Jr:

Three more. Oh, give me four more. That
would make six in all.

Mahan:

That would make six in all.
Now, one of those, the comic weekly poster,
also ran on the back page a comic weekly.
That has five million seven hundred thousand

circulation. It is that one right there.
That is the ad as it ran.

The Willard Storage Battery ad, which is one

that is being produced now, will run in
Life on November 17. That is with a circulation
of approximately three million.

H.M.Jr:

Now, who gets the credit - whose brain

Mahan:

Why, I think it came from Warwick originally,

child is this?

Mr. Secretary.

H.M.Jr:
Mahan:

Who is Warwick?

Warwick is Warwick and Legler, an advertising
agency, and he represents large producers of

280
- 22 -

that material, and Mr. Legler started with
this idea, and it is amazing the manufacturers
that have cooperated with him.

H.M.Jr:

And he gets the business?

Mahan:

Yes, his firm - his client gets the business.

H.M.Jr:

Well, bring them down next week. I would
like to meet them and shake them by the
hand. Could you do that?

Mahan:

I would like very much to have you do that.

H.M.Jr:

I think that is very, very swell. The

Mahan:

black and whites will be colored, won't they?

Oh, yes, those are just projected posters
that haven't been produced yet, and the
Willard one is the one that will appe ar in
Life on November 17, as an advertisement.

Kuhn:

Which one?

Mahan:

Willard Battery.

Odegard:

I was going to ask if it wasn't possible to

Mahan:

I think we are going to be able to do that.

H.M.Jr:

Well, bring the man down.

Mahan:

I would like to very much.

H.M.Jr:

I would like to meet him. And if somebody
else, Harold, has something like this, I
would like to see it, you see.

Graves:

By the way, where are we on these Kudner
advertisements, and the Young and Rubicam?
Have you seen the Kudner things yet?

have them use some of these in magazine ads.

281
- 23 Mahan:

No. I understand they are there, but I haven't
had a chance to look at them this morning.

Graves:

Will you tell the Secretary also where we
stand on our own posters, Sid?

Mahan:

This is a summary report. We have distributed
of our own posters the Minute Man, Buy a
Share in America, and the Hands Clasping,

which is on order, we have distributed five

million of them. That includes the retail

store posters, beginning November 15, including a Thanksgiving -H.M.Jr:

You see, what you ought to do is this: If

you were doing the advertising for a private

company, you would want your board of directors
to know something about it, wouldn't you?

Mahan:

Certainly.

H.M.Jr:

If you will give me this thing, I will distribute it to the Cabinet and let them know.

I can't do it unless you can give it to me.
You take that hand clasping thing. I have
asked four times for a copy of that poster
and I can't get one.

Mahan:

I don't understand that.

H.M.Jr:

I saw one in Chicago in Collins' office,
but I have asked repeatedly to put one

up here. You know, one of those little
ones, I have got one on the President's
desk now. The only way I can let the President or anybody else know what we are doing

is if you give it to me. But I have asked

for that hand clasp thing again and again.
If Collins in Chicago can have one, why
can't I have one? (Laughter).

282

.

- 24 Mahan:

You shall have one.

H.M.Jr:

Seriously. When you are sending me too much,

I will tell you, but here I am. Supposedly
the President is concerned, and I have got
a chairman of the board, which is the
President, and a board of directors, and
I would like him to know what we are doing

and I keep asking for the stuff and I

don't get it.
Mahan:

Why don't I make you a similar presentation
to that on our own posters which we have
already distributed?

H.M.Jr:

Anything, anything that you are doing.
For instance, on the billboard stuff, some

photographs of this billboard, what the billboards are doing. You must have sold once,
didn't you, or you wouldn't have been where

you are now.
Mahan:

We have a billboard plan --

H.M.Jr:

Give me some photographs of some billboards.

Mahan:

We have such a book in preparation on pos-

I don't get any of this stuff.

ters and billboards. That is just starting,
as you know. We have possibly a dozen

locations, and within another month -H.M.Jr:

That campaign in Chicago of the First

National Bank. That is out and finished.
It is out on the billboards. When I went
through Detroit I saw the Wrigley posters.
They were out on the billboards.

Graves:

And the car cards.

Mahan:

We have some car cards that have been donated.

283
- 25 H.M.Jr:

When you give me too much I will tell you,

Graves:

How many of that handclasp poster were ordered,

but I don't get anything.

and how many have been delivered?

Mahan:

Just preliminary copies have been delivered
of the thing. Two hundred thousand are on

order, and there will be fifty thousand

of the very large two-sheet one which is

a payroll allotment poster that will be

used -H.M.Jr:

Well, give it to me visually like this.

Mahan:

I will make it up in such presentation as that.

Graves:

How about your post office program, Sid?

Mahan:

The post office manual which --

H.M.Jr:

Now, somebody sent me by accident a couple

of weeks ago a folder that one of the unions
got out in New York, their own four-page
bulletin. It was the Needle Workers' Union
or something.

Kuhn:

The Amalgamated Clothing Workers. Miss

Dallas sent it to me to give to you, and
I did.
H.M.Jr:

And the same day it went over to the Presi-

dent with a little letter. I try to sell

him what we are doing here, but you fellows
have got to feed it to me.
Graves:

That, as I understand, is for distribution
to all postmasters. It tells them what
to do.

Mahan:

Fifty thousand of those will be distributed.

284
- 26 H.M.Jr:

Well, fix me up a letter, Harold, explaining
what it is, addressed to the President of
the United States, and I will send it over
to him.

Mahan:

Do you want to keep that?

H.M.Jr:

Yes. He likes to see the things, you know,
and he reads them and he has got ideas. I
like to get him interested.

Graves:

Do you want to speak at this time about

our tabloid that is to be a part of this

post office thing?
Mahan:

That will be ready in nine days, and that
is when I think we should talk about it.

We will have two dummies, and we will have

the whole plan laid out.
Graves:

That is the thing, Mr. Morgenthau, that we
are pla nning to distribute through the mails.

H.M.Jr:

I know. I have never seen it, but when it
is ready, I would love to see it. You are
the first advertising man I ever met I had
to accuse of being a shrinking violet.
(Laughter).

Mahan:

I enjoy the distinction, sir.

Graves:

Was there anything else you had, Sid?

Mahan:

No, I think that covers it. I will get some
presentations ready.

H.M.Jr:

Do that.

Mahan:

I will.

H.M.Jr:

I want to be sold so I can sell the rest of
the Administration. We are actually doing

285
- 27 something, while everybody else is sitting
around talking about morale, and with staffs
of two hundred fifty to five hundred people

all falling all over each other, and I am

proud of what we are doing, and I would

like to tell the people here in Washington

what we are doing.
Graves:

You asked Dan Bell and me a couple of weeks

ago to install a booth in a branch post
office here in Washington, at which we

would have Treasury people to sell Bonds

and Tax Anticipation Notes. I would like
Mr. Duffus to tell you where we stand on
that project.
Duffus:

Well, it is the Post Office Department policy

H.M.Jr:

O.K. Where did you go from there?

Duffus:

We went to Garfinckel's and Woodward and

H.M.Jr:

But you are not letting the Post Office
lick you on this thing, are you?

Duffus:

It is still under discussion, but --

Graves:

Postmaster General Walker has been out of
town, and the officials down there wanted to

not to have any booths of any nature in
any post office.

Lothrop's and Friday we go into Lansburgh's,
the Willard Hotel, and as soon as soon as
the booth - the Red Cross booth is out of
Loew's Capitol Theater, in about ten more
days, we go in there.

await his return before they came to grips
on that thing. We have not given up.

H.M.Jr:

Oh, don't give up.

Mahan:

As a matter of fact, I was to see him this
morning, Mr. Graves.

- 28 -

286

Duffus:

We will be in the Post Office, but it is

Graves:

As a matter of fact, we are accomplishing
the object you had in mind in locating these
booths in these locations with Treasury

something he has got to straighten out.

personnel.
H.M.Jr:

Have you started one?

Duffus:

Yes, five days ago we started in Garfinckel's.

H.M.Jr:

Are you doing anything on Tax Anticipation

Notes?

Duffus:

We have Tax Notes, all bonds, and the stamps.

H.M.Jr:

Mr. Buffington, here is one for you to go
over and see what they are doing. Mr.
Buffington has come down to help us on
Tax Anticipation Notes.

Duffus:

We have been working with Mr. George Barnes

very closely and he has trained the people
to go in so they know about the Tax Antici-

pation Notes.
H.M.Jr:

Buffington, you go over and see how good a
job they are doing.

Duffus:

We sold three Series E Bonds in Garfinckel's
in five days, and a hundred and six dollars'
worth of stamps.

Graves:

How about Tax Notes?

Duffus:

We have sold none.

At Woodward and Lothrop's we have only been

open three days, and we have sold one
Tax Anticipation Note.

287
- 29 H.M.Jr:

You are back on the floor, Buffington,

so you can't fall out of bed. I mean, you
can only go up. (Laughter).

Buffington:

That is right.

H.M.Jr:

If you sell one, you have got a hundred
per cent increase.

Duffus:

We have had trouble keeping these booths
open, because the money had to be back here

at the Treasury by three thirty in the after-

noon, to the Treasury vaults, and we are
now making arrangements with the stores to
leave the Treasury money in their vaults
over night, so that we can keep these booths
open until the store closes.
H.M.Jr:

What about the hotels?

Duffus:

The hotel will open on Monday. They had
Red Cross booths in there, and their lobby

was so cluttered we didn't go in. We open
there Monday and in another department store
on Friday.
H.M.Jr:

Well, if you make one sale, Buffington, it is

Buffington:

All right.

H.M.Jr:

You might get in on that.

Buffington:

I would like to.

Graves:

Tell us about your juke boxes and your songs.

Duffus:

Well, the average popular song sells about
four hundred thousand copies over the music
counters of the country. By November 1
we will have distributed upon direct request

a hundred per cent increase.

to the office over a million copies.

- 30 -

288

H.M.Jr:

Wonderful.

Duffus:

....

H.M.Jr:

Wonderful.

Duffus:

We have had a very fine meeting with the
heads of the five mechanical phonograph
companies last week, and the three recording
companies. The week of November 9 to the 16th

of "Any Bonds Today".

has been set aside as their week for national
defense, at which time "Any Bonds Today"

will be in the number one position on every
one of over two hundred seventy-five
thousand juke boxes in the United States.

They are printing up all of the display

material necessary at their own expense,

and they are also organizing their eight

companies, the five phonograph manufacturers

and the three recording companies. They
are going to go down and establish payroll
allotments through the proper people in
our department, and at one meeting of the

Seeburg Company in Chicago, they had four-

teen of their officials in and started off
so that they could tell all of their sales-

men and distributors they were behind it they bought twenty-eight thousand dollars'
worth of bonds, the fourteen of them, just

to start the ball rolling, and they are
publicizing it in that way. But we have a

set-up with them so that as we have another

song later on, if we do, we will be able

to duplicate it at - very fast and push it
forward.

H.M.Jr:

Don't be discouraged if this booth thing
doesn't work right at the beginning.

Duffus:

We are going ahead and we will have one in
the Benjamin Franklin Post Office very

shortly. It was just a case of the Post-

master General being out of the city.

289
- 31 Graves:

Have you anything else, Carl?

Duffus:

Yes, on the Treasury Houses, we have now
completed arrangements with five oil companies

nationally, which blanket the United States.
Practically the entire budget of Standard
Oil of California has been allocated to
Treasury Houses for the year of 1942.

H.M.Jr:

You mean advertising budget?

Duffus:

Yes.

H.M.Jr:

You said the entire budget.

Duffus:

I mean the. entire budget, pardon me. Being
an advertising man, that is the one that

interests me. But they are going to start

and they will cover with portable Treasury
Houses, leaving them as long in a city

as is desirable, they will cover nine

western states and Hawaii and Alaska, starting

the first of December. We are getting a

lot more military equipment, now that maneuvers

are over. We are also working with Phillip's
66 and with the other oil companies, so

that we will have them all over the country.

There is a closing report on the Boston and

New York Treasury Houses which compare

very favorably with Washington.
H.M.Jr:

Very good. Are you trying to get in a booth
with General Motors on their travelling show?

Duffus:

That is all set up. We opened day before
yesterday in Springfield, Missouri, and

they have constructed the booth, and each
State Administrator receives an advice sheet
and provides the people with the petty cash

fund that he works out locally for the sale

of stamps at their show.

- 32 H.M.Jr:

Swell.

Duffus:

In addition, we have tried out a Treasury
House stunt, more or less, at the State
Fair at Dallas, Texas, and an exposition

290

in Omaha, both of which are on now, and
we will go into the Home Defense Show
in Baltimore, the Junior Chamber of Commerce Exposition in Chicago and in Buell

Institute in Pittsburgh. We cooperate with
the people to get the military equipment
and they set up a Defense Stamp booth.

In some instances -H.M.Jr:

May I interrupt you? The Home Defense Show

in Baltimore was started originally at my
suggestion.

Duffus:

Was it?

H.M.Jr:

When Mac-something was Administrator there.

Duffus:

Well, it is going to be the most successful
show of its kind this year, because the

What is his name? He has left there now.
FHA, but I suggested that originally.
automobile shows didn't have anything to
display.

H.M.Jr:

That was my original idea.

Duffus:

Over there now we have arranged for

eighty-eight thousand square feet of floor
space for a military show with a big

booth set up right in the middle of it.

Some of these shows we have arranged with

the State Fair Commission or the people

in charge that instead of an admission to

the show, you only have to purchase a.
Defense Savings Stamp. Now, down at

291
- 33 -

Dallas we will have a million three hundred
thousand people to work on in fourteen days.
I don't know how many we will get started,
but we are going to then produce a manual

on the various plans and sent it out so
that we can work it nationally next year
all over the country.

H.M.Jr:

You see, all these places you can get

Duffus:

We use ponies now for the children and

H.M.Jr:

What are you going to give Buffington?

Graves:

Does that wind you up, Carl?

Duffus:

No, I would like to present the newsreel.

Graves:

Oh, yes, do that.

Duffus:

We have sent out bids and are going to take
on a newsreel crew of a camera man, a director, a sound man, and an electrician. We

free rides, Buffington. You will get a
free ride on a lot of this stuff.
jeeps for the adults. (Laughter).

will then work - for instance, we are going
to start in the State of Michigan and get
together with Mr. Iseby and have a list of

a hundred people in the State that should be
obligated to his office on Defense Savings.
They will each speak for the newsreels,
a hundred to a hundred and fifty word
message in regard to Defense Savings.

We will be able to work in payroll allotment
messages by the heads of unions and by the
factory and shop owners. We can work in

the school program by having children say -

give some messages, school teachers, ParentTeacher heads and the like, and the Womens'

Clubs. We will take them all in. Those

292
- 34 will be presented, two a week, on each one
of five newsreels which are distributed

H.M.Jr:

to every theater in the State of Michigan,
so that we will be able to do, I believe,
a very fine job.
You localize it?

Duffus:

We will localize it. If a person is state-

wide in his prominence he will get statewide coverage. But if Mr. Iseby has somebody
at Marquette that he would like to use up

there in the northern part of the state,

we will use him and we will go into every
state and duplicate it.
H.M.Jr:

I think that is fine. Just one thing - I
think that is swell. I have gone to the

newsreels here, and I will see something
about the high school graduation in Washington.
They show it. They do show the local stuff.
Duffus:

Oh, yes.

H.M.Jr:

Now, will you tell Mr. Howard Dietz that
the movie industry hasn't given me - what do

you call it, a short - since that seven

minute one.
Duffus:

Yes. That is still being distributed, you
know.

H.M.Jr:

I know, but it takes at least a month and if

he would take it up with his moving picture

industry National Defense Committee, I
would love to have another five minute movie,
because I haven't had one -Duffus:
H.M.Jr:

That was released in June.

Well, ask him if he can't get me out another
five minute movie very, very soon. Will you
tell him that?

Duffus:

I certainly will.

H.M.Jr:

This is going so big that we ought to have

- 35 -

293

another. Preferred"?
That was seven minutes, wasn't it,
"America
Duffus:
H.M.Jr:

About nine. We have had to re-order, as I think
I told you before, two hundred additional prints.
Tell Howard Dietz. I know he is busy but if
somebody could get me out another five or -

five minute movie. A serious one. I don't

want a - I mean, something on the order of
"America Preferred." I mean, I have got no
ideas,you,
but Peter?
I think we ought to have another one,
don't
Odegard:

Yes, Carlton and I have talked about this a good

many times. Early in the year, you may remember,
we had a communication from Karel Dodal,
who is a Czech animator. He has done some
magnificent work, some of which Ferdie and I
saw one afternoon. I have been hoping that Mr.
Dietz would some day get around to Mr. Dodal,
because he can make, I think, some very excellent
things for us and do exactly what we want.
H.M.Jr:

Well, I would like to tell - tell Howard Dietz
I would like another short very, very soon. They

owe me one. Will you tell them?
Duffus:

I will call him today.

Graves:

Do you want to close promptly at twelve?

H.M.Jr:

No, I am having a good time.

Graves:

All right, then. I would like Mr. Poland to tell

you a little more than I did yesterday of his
visit with Mr. McLean.

Poland:

I saw Mr. McLean and with him, the editor and the
general manager and the assistant circulation

manager of the Bulletin. I understood the

purpose of seeing him was to endeavor to make

effective some wider adoption of the Bulletin plan.

Mr. McLean assured us that he would lend -H.M.Jr:

Does everybody know what they are doing? Would

294

- 36 you take a minute and explain?
Poland:

H.M.Jr:
Poland:

I would be glad to.
Take
there. a minute and explain what we are doing up

The Evening Bulletin, through a system of
carrier boys, has made each one of them Official
United States Defense Agents. "Each one" is
too strong, because they haven't yet got their

entire list of carriers enlisted. They had a

carefully formulated plan by which they got
the boys together first for breakfast, explained

it to them, afterward got all their carriers

at a movie and the carriers then signed a
pledge in which they stated their allegiance to
the American form of government and their desire
to enlist their services as salesmen for the

Treasury Department.
H.M.Jr:

Mr. Poland, when you have time, could you fix

me up a little booklet, kind of the story,
giving me each thing that they do, with a

Poland:
Graves:

little booklet, you see, so it is consecutive?
Here it is.

I will see that that is done. I was skipping

perhaps a little rapidly but I think it is all
there, Mr. Secretary.

H.M.Jr:

That is all right.

Poland:

Each boy, after having been enlisted, was

provided with this material which he left with

his customers on a given day, a pre-determined

day in the week, and then on the final day, just
before they make their collections, this
reminder was also given to the customer. That
contains an order blank. The customers signify
the number of stamps which they might desire and

- 37 -

295

the boys then are provided with stamps in these

envelopes. The Bulletin is buying fifteen

thousand dollars worth a week and putting them
into these envelopes and the boys take them

out on order. When they are delivered, they
collect the money, furnish the customer with
a special album which contains $18.70 worth of
ten cent stamps which, when surrendered with

five cents at the postoffice, entitles them

to the Series E Bond. The customers are given
one of these stickers to go with the album.

H.M.Jr:
Poland:

I want this all put in a booklet for me.
Certainly. I was just handing it to you for

your immediate observation.

So that they have also a - when the boys have
sold $18.75 worth of stamps to their customers
they are given an award of merit, a bronze
button. When they sell $37.50 more they get a
silver one. When they sell $75.00 more they get

a gold one. They get a certificate of merit

that goes home and they can show it to their

parents.
Graves:

Did you show the Secretary the button? That

is for the boy.

H.M.Jr:

I think it is wonderful. I think it is grand.
I am very much excited about this.

Poland:

They have prepared, I think, perhaps what Mr.
Duffus or Mr. Mahan would call a presentation

of this whole plan on a large - I saw the

dummy for it. It is a large double sheet effect,

so that they can tell other folks what they have
done, and I think on the front of that they

are reproducing what they have given to each

boy, which you may recognize as emanating
from the Treasury Department, a telegram from the
Secretary.

- 38 H.M.Jr:
Poland:

296

I see.

I talked over the long distance telephone with

Rochester, Minnesota, with the man who has been

chiefly instrumental in doing this, who is there
at the Mayo Clinic with a member of his family,
Mr. Stodgill.
H.M.Jr:

Now, he is the circulation manager?

Poland:

That is right. The one thing which seemed to
move forward was the fact that Mr. McLean thought

that Stodgill will soon be attending the

annual convention of circulation managers. Has
Mr. Graves told you about that?
H.M.Jr:

Yes. Now, the only thing I want to do is, I want
to get Stodgy to come down with us for two or

three months. I want to get him a leave of

absence and have him come on down here and help

us do this for other papers because that fellow
has got originality and you told me he is one of
the best and highest type circulation managers.

Knowing what kind of a man McLean is, I think we

could borrow Stodgy, if that is his name.

Poland:

Stodgill.

H.M.Jr:

Stodgill. There is nothing stodgy about him.

For two or three months to come down here and

do that thing for us because I know enough

about circulation and those things. They are a
very peculiar ilk and it takes one circulation
manager to talk to another. They are very
peculiar people. They are something like Secretaries
of the Treasury.

If you could get that man, Harold, to come down
here for three months or long enough to start
with the Evening Star and these other - what

Ferdie calls "fat and dull" papers, to do this,
but I think you will have to get a man who can

297
- 39 -

talk to another circulation manager to do it
and as I told you yesterday - I told Harold
Graves yesterday, if it is. a question of paying
for that stuff we will pay for it, if that is
going to hold it up.
Poland:

That is one question Mr. McLean raised.

H.M.Jr:

We will pay for it. We have got to. We have
got to be willing to say to a newspaper, "If

you will do this we will pay for the material.
Then it will go, because they are not all as
rich as the Philadelphia Bulletin. Which is
your "fat, dull" paper in Detroit?

Iseby:

Detroit News. They will go for that and so will

H.M.Jr:

Will they pay for it?

Iseby:

The Free Press will but the other may not.

H.M.Jr:

Will you think of that, Harold, getting this

the Free Press.

man on loan to come down here, long enough to

put it across?

Graves:

Yes, I think that could be arranged and I will
talk with Mr. Poland about that, afterward.

H.M.Jr:

Aren't you very enthusiastic?

Poland:

I was. They did an excellent job and it was well
thought out and well executed.

H.M.Jr:

It takes a long time to think a plan out like

that and when we have got it I would like to

ride it.
Graves:

Now I would like Mr. Callahan to answer a
question or two that you raised with me about
house organs and trade journals.

298
- 40 H.M.Jr:

I want you to know that the Secretary of the
Treasury's paper, in the lower left hand corner,
has
that?the defense emblem on it. Did you know

Graves:

Yes.

Callahan:

This is from the Bureau of Engraving.

H.M.Jr:

Have they got you doing this?

Callahan:

I happened to be there when it happened. Here

is another one. Mr. Hall originated that himself, didn't he, Mr. Graves?
Graves:

Oh, no.

Callahan:

I mean this particular thing.

Graves:

That was put in for all the Treasury stationery

and the time when it will come in depends on
when the present stocks are exhausted.
Callahan:

I meant that he had the printing facilities
himself and did it first.

Graves:

Oh, I suspect --

H.M.Jr:

I would like - I don't know - this fellow sells
an idea to an engraving concern that is in the
business and then they get this out. I would
like to get a man who is in the business of
selling letterheads, papers, to concerns, and

sell him this idea so that whoever manufactures
the letterheads - I mean - you know. We have
got a big concern - you know this concern that
you give them a dollar and you get your name on
the paper? American Stationery, somebody like

that. If you could get them interested in these

various stationery concerns, big ones, so they

will suggest that we are willing to put this on.

- 41 -

299

Graves:

That
about.is commercial printers you are talking

H.M.Jr:

Yes, big ones. What else have you got, Vince?

Callahan:

We are starting a campaign in all of the trade
publications of the country for the purpose of
acquainting the business men with the payroll
allotment plan and any other messages which

they have. We plan to do that through four
page insertions over a period of a year and to
be continued after that.
Graves:

In what?

Callahan:

In trade publications.

H.M.Jr:

Are you handling trade publications?

Callahan:

Yes, sir.

H.M.Jr:

Besides radio?

Callahan:

No, I have the press. That is included.

H.M.Jr:

I see.

Callahan:

These are a series of four which we have had
made up.

H.M.Jr:

But this is to go into trade publications?

Callahan:

Trade publications.

H.M.Jr:

Have Peter Odegard and Kuhn seen these?

Callahan:

Yes, sir.

Kuhn:

They are very good, Mr. Secretary. I would like
you to see the inside of one or two of those,
I think they are very clever.

300
- 42 H.M.Jr:

Now,
these aren't the ones that we have from
Life?

Kuhn:

No, I have those any time you want to see them.

H.M.Jr:

I am waiting.

Odegard:

Did
Mr. Barrett do these or were they done outside?

Callahan:

Barrett got assistance from outside but supervised the whole thing.

H.M.Jr:

When they are ready could you give me the things

in a booklet formally?

Callahan:

Yes.

H.M.Jr:

Good.

Callahan:

In addition to approaching the business men, we
are going after the labor papers and we have
employed a man who will concentrate on payroll

allotment material and other stuff directly
for the labor papers. That is the way we are
attacking in a publicity way the payroll allot-

ment plan.
Graves:

You might tell the Secretary who that is and

where he is.
Callahan:

Mr. Izard is now in Seattle at the A.F. of L.

Convention with Mr. Hyatt and getting a list
of all the editors and he is getting around
to meet them. It will probably be a couple of
weeks before he actually gets started to
sending out any stuff. We are sending out
announcements to all the football games. I
thought you might glance at that.
H.M.Jr:

That came to me through the weekly thing.

301
- 43 Callahan:

We are doing the same thing with a heading for
farmers and the same thing with a heading
for foreign language papers.

H.M.Jr:

It is very attractive.

Callahan:

You might be interested to know that in our

announcements we checked the other day and found

out that we have used the Navy material in
about fifty-five thousand announcements, Army
material in about a hundred and twenty-five
thousand and Marines in thirty-two thousand.
All of our announcements include something
about the branch of the service, beginning about

a month ago. That is about all I have.

About the house organs, we are hoping to get

this particular material in the house organs.

H.M.Jr:

Fine.

Callahan:

We are compiling a list now of about four hundred
of them.

H.M.Jr:

Five more minutes and I have got to stop.

Graves:

I was trying to have an answer to a good many
questions that you have been asking me.

H.M.Jr:

I haven't got time.

Graves:

If you have anything further on your mind --

H.M.Jr:

No.

Graves:

Then let's hear from Mr. Edward about the banking
thing.

Edward:

Mr. Secretary, during the month of September,
nine hundred and fifteen other banks qualified as
issuing agents for Series E Bonds. Eleven thousand
five hundred and seventy-one out of fourteen

302
- 44 thousand seven hundred and fifty-four banks

are now in. That does not include about a

thousand branch banks who are also in. Here
is a little memorandum here and I think probably

you have seen some of it. Virginia is a hundred

percent, along with four other states. Virginia's
record is better than any other because they

have a good many banks. New York also has a
very favorable showing where they have two hundred

ninety-six out of three hundred national banks
and four hundred twelve out of four hundred
twenty-five state banks.
Graves:

And all the mutual banks have qualified.

Edward:

The country as a whole, eighty-nine percent
of the national banks are in, ninety percent of
the mutuals and seventy-two percent of the state
banks.

H.M.Jr:

Very good.

Edward:

Banks are continuing their efforts in promoting
the payroll savings plans, they are working with
the school people, and they are also putting out trying to help in the program on the buy by the
month plan. The A.B.A. has printed a form
which they are selling to the banks and I had a
list the other day of something like a hundred
banks that had already bought them. I have

written letters to those banks, inquiring of

them as to how it was going over. That is a plan
where the depositor signs an order on the bank
directing the bank to charge to their account

bonds for a certain interval.

I had a call this morning from Akron, Ohio from
a banker, Mr. Iseby, on this school plan. They

are trying to start it there where they have
forty-five thousand children in school. I

immediately contacted the field division there.

They are sending the deputy administrator to Akron

- 45 -

303

to work with him and get it under way.
H.M.Jr:

Harold, the one thing that I want your help on,
I had a very interesting thing happen. I was
before this banking and currency committee in
the House. I was coming up and they said,
"Look out for the Congressman from Oklahoma;

he is tough." Well, he started out - before

he said anything, he said, "Mr. Morgenthau, I

want to compliment you on your Defense Savings
Program in my state." He was pleased and

instead of being tough he treated me very
nicely.
Now, somebody in your organization should

think exclusively of how we can let the

Senators and Congressmen know. Now, let me

finish - and members of the state legislatures.
Senators and Congressmen, stuff to feed
them - not the weekly letter; they wouldn't

read that, but what they are doing, and members

of the state legislatures.

Now, I went up there and this fellow, evidently
he - somehow or other, he happened to know and
instead of being rough with me he treated me

nicely. That is only a small thing, but it

happened to be a personal experience. But this
is important enough that somebody should be

thinking exclusively how to sell the elected
representative of the people on this program.
I would like somebody. It is a big enough job
just for one person.
Graves:

You wouldn't think it would be advisable to

try that other bulletin, do you?

H.M.Jr:

Not the one we use for ourselves. They won't

go through it and I don't want to go after

them every other week. They want something

unusual. It is really important. It will help
you if we need some more money, too.

304
- 46 Graves:

You remember my introducing you to Mr. Jones,
our Oklahoma administrator the other day, and

I told you the story about an editor who had
become a convert. You asked me to get that.
I have a clipping here on that.

H.M.Jr:

Want me to tell a story about him?

Graves:

No.

H.M.Jr:

You don't?

Graves:

As you like.

H.M.Jr:

I want to tell a story.
All right.

Graves:

H.M.Jr:

I was in retreat at Tucson and this Mr. and Mrs.
Lorton arrived. He told the man, Dick Jenkins,
"Now, I am a very old friend of Mr. Morgenthau's.
I am a very old friend. I have dined with him
and I am an old friend of his." So Dick Jenkins
said, "Well, Mr. Morgenthau doesn't see anyone.

"Well, you tell him I am a very old friend of

his and I have got to see him absolutely alone.

Nobody can be present."

Well, I broke my rule and I said I would see him.

So he came up and he says, "You remember me. You

know that dinner at the White House in 1933
when you and I dined with the President? Well,
that was when we dined together." And then he

said, "I have got to see you alone." I said,

"I am sorry, whatever you have to say, you can
say in front of Dick Jenkins and Mrs. Morgenthau."

"Well, it is too confidential, so finally he

whispered that he was involved in a national
lottery scheme to keep the Government from

going broke. That is your Mr. Lorton.
Graves:

Well, he is a convert now to your Defense Savings
Program.

305
- 47 H.M.Jr:

Well, he is also a nut. (Laughter)

Iseby:

I would like to have you know, Mr. Secretary,
that a week from Sunday, this coming Sunday,

every Italian society - never before in this
last crisis - this means Fascists and all. This
is going to have national importance throughout
the country. Every one in Wayne County, a
hundred and thirty-two representing over a
hundred thousand Italian people and all their
societies, are going to have a banquet dependent entirely on the Defense Savings Program,
all of them announcing one hundred percent
support, every one of them buying bonds, Fascists
as well as pro and con, all of them.

Two weeks from that day - I will talk to Harold
about it - I want two speakers. They must be

Cabinet members. They are the A.F.of L. teamsters
group with Dan Tobin and twenty-two presidents
of teamsters from twenty-two states.

H.M.Jr:

It was a good meeting, Harold. I think this is

a very good meeting, and thank you all for what
you are doing. I am very much pleased.

the

ilaska

SOUTH DAKOTA

IOWA

NEBRASKA

ILLINOIS

KEY

E
E

State and Local Committees Organized
State Committees Organized

Administrators and/ or Chairmen appointed

Hawaii

1 Not started

Thing

500 MARE

FORM 7926-A

309

TREASURY DEPARTMENT

BUREAU of ENGRAVING AND PRINTING

TREASURY DEPARTMENT

BUREAU OF ENGRAVING AND PRINTING
OFFICE OF THE DIRECTOR

MEMORANDUM

POPDEFENSE

BUY

310
TREASURY DEPARTMENT

BUREAU OF ENGRAVING AND PRINTING
WASHINGTON D.C.

DEFENSE

-

BUY
UNITED

BONDS
NOVEL
AND TAMPS

14.754 Banks in u.s. Have qualified as issuing agents Series E
A.so- 11571 approx. mately VIBOLMIA 1.000 BANKERS Branch 00 OVER Banks THE TOP have qualified Bonds

All Virginia Danks, 130 national and 184 state chartered institutions,
a total of 314, have now qualified as issuing agents for Series X Bonds.
Virginia thus becomes the fourth state in which the banks are cooperating
*100%" with this phase of the Defense Savings Program. Insamich as Virginia has many more banks than the first three states to attain 100% status
(The District of Columbia, Nevada and Oragon) the achievement is especially

311

noteworthy.

All National banks in the following states (in addition to the District
of Columbia, Nevada, Oregon and Virginia) have qualified according to the
Treasury, September 30 report on the member of qualified issuing agents:
Arisona, Florida, Maine, South Carolina, Utah and Washington. New York
with 412 out of 425 National banks qualified also merits special mention.

All State banks have qualified in only the four 100% states. But again
New York with 296 of its 300 state abartered institutions qualified has an
outstanding record.

newfersey
All mutual savings banks in nine states have now qualified: the District

of Columbia, Maryland, Minnesota, New York (134 banks) Ohio, Oregon, Termont

and Washington. Maine with 30 out of 32 such banks qualified is close to
the goal.

For the Country as a whole. 89% of all National, 72% of all State, and
90% of all autual savings banks have now qualified

These figures are impressive tributes not only to the patriotism and
sound judgment of bankers generally but also to the untiring efforts of many
leaders of the banking fraternity. Secretary Morgentham, addressing the
annual meeting of the American Banker's Association in Chicago, October 2,
said:

"You have given mignificent help and given it unselfishly
and cheerfully. in the selling of Defense Savings Bonds
and Stamps. In this effort the Treasury will continue to
depend greatly upon the bankers of America, not only no its
agents in selling Defense Bonds but also as missionaries in
spreading the gospel of savings in times like these.
.

.

.

BANKS MAY NOW STOCK BONDS WITHOUT PUTTINO UP COLLATERAL

The Treasury has recently announced that it is no longer necessary for
banks to put up collateral for the Series B Bonds which they keep in stock
for their customers.

... Every director. officer and employee of the Lincoln National Bank
in Newark, N. J. - has purchased at least one Defense Bond. The bank is
advertising this fact with the comment: "Have you?"

TREASURY DEPARTMENT
WASHINGTON

October 9, 1941

DEFENSE SAVINGS STAFF

"TREASURY HOUSE"

New York

Closed

Number of Days
Number of Stamps
Number of Albums
Amount of Money
Boston

September 29
27

65,120
7,612
$28,034.10

Closed

October 5

Number of Days
Number of Stamps
Number of Albums
Amount of Money

32

53,094
5,635

$46,293.95

312

are

TREASURY DEPARTMENT

313

WASHINGTON
OFFICE OF

October 9, 1941

TREASURER OF THE UNITED STATES
IN REPLYING QUOTE INITIALS

BOND AND STAMP SALES

GARFINKLE'S
Bonds,
Stamps,

5 days.

3 G $18.75 - $ 56.25
106.85

$163.10

WOODWARD & LOTHROP

Bonds,

3 days.

14 @ $ 18.75 - $ 262.50

6 @ 37.50 - 225.00
1 @ 75.00 - 75.00 E
$562.50

Tax Bond, 1 @ $ 25.00 - 25.00
Stamps

220.50

$808.00

I n. Broctor

good

DETROIT

OCTOBER 1941

OFFICIAL PUBLICATION

AMSTER
of JOINT COUNCIL no.43

VOL. 1. NO. 7

Dedicated to the Mutual Interest of All Engaged in the Trucking Industry

Secretary of the Treasury Morgenthau, Frank Isbey, Chairman of the
Michigan Defense Bonds and Savings Stamp Committee, and
Officials of the Teamsters Union
Photograph taken during Mr. Morgenthan's address to the teamsters, thanking them for
their cooperation in the sale of defense bonds and stamps during his recent us
Detroit

to

Railway Eynrece Agency Switchoc To Teameters

October 9, 1941

2:30 .m.

HMJr:

Hello. Hello. Hello.

Operator:

One moment.

HMJr:

Hello. Hello.

Allan
Soroul:

Hello. This is Allan Sproul.

HMJr:

Oh, Allan

S:

Sorry I wasn't able to get to the telephone
soon enough this morning.

HMJr:

That's all right.

Sproul:

The market has cuited down 85 you know, and I

think they '11 be over this one day corner in
rights and have a little more orderly market

when the trading on the when issued basis begins.
I got your message and am planning to be down

Tuesday for lunch. Is there anything else

you wanted to see me about?
HMJr:

Well, the point is, I want to take a look next
at those independent agencies and that sort of
thing, and I want to talk to - if we're going

to do anything about them, we ought to announce

it, you see?
S:

Yesh.

HMJr:

That's all I wanted to tell you.

S:

All right, fine. I'11 be down there Tuesday
for lunch.

HMJr:

I invited Eccles and he couldn't come. He's
sending Goldenweiser in his place.
I see.

-NJr:

See?

S:

All right. I'll be there.

MJr:

Thank you.

Thank you

Treasury Department
TELEGRAPH OFFICE

1 WN E 87 NT
SEATTLE WASHN OCT 8 1941

y AM 7 :

HON HENRY MORGENTHAU JR
WASHNDC

WE ARE TERRIBLY DISAPPOINTED OVER YOUR INABILITY TO COME, HERBERT

GASTON WILL DO A GRAND JOB, AND IT WILL BE GOOD TO SEE HIM , AND
WE WILL HAVE TO WAIT TO SEE YOU UNTIL WE COME EAST, WHICH MAY BE
NEXT MONTH. COULD HERBERT STAY OVER FOR THE EXPRESS PURPOSE OF
ADDRESSING OUR SIX HUNDRED CARRIER BOYS ON SATURDAY MORNING, AT
WHICH TIME WE ARE LAUNCHING OUR DEFENSE STAMP AND BOND DRIVE,

-

HOPE VERY MUCH HE CAN DO THIS, AND WOULD APPRECIATE YOUR TELLING
HIM so REGARDS.

JOHN BOETTEGER- 745A

317
October 9, 1941
2:45 p.m.

HMJr:

Herbert

Herbert?

Geston:

Yes.

HMJr:

How are you?

G:

HMJr:
G:

I'm all right. How are you?
I'm all right. How did the thing go?
Well, it hasn't gone. I sent word through
Customs - perhaps it didn't get to you that this speech is postponed until two-

HMJr:
G:

thirty this afternoon.
No. Nobody told me, but that's all right.
Oh, I'm sorry. I sent a message saying that
the speech had been postponed until two-thirty
and that if it was satisfactory and you wished,

I would call you after it, and I thought about
seven o'clock in the evening if you wish it in
your time, it would be four o clock here. If

HMJr:

you would like to talk to me then.
Two things, Herbert, I wanted to tell you.

G:

Yes.

HMJr:

Three things. First, thank you for going out,

G:

It was a pleasure.

HMJr:

to take my place.

Two, John Boettiger wanted to know if you could
stay over to Saturday to address six hundred

carrier boys who are going to start a drive on
Defense Stamps.

G:

Yes.

HMJr:

Well, that rests with you.

318

-2G:

Well, I talked to John. What do you think?

HMJr:

Well, seeing it's John Boettiger, I'd do it.

G:

HMJr:

G:

HMJr:

All right. I'll do that.
And the third thing - now it's come out definitely Harold Ickes made the statement at Cabinet. This
is the principal reason I want to talk to you
Yes.

that Saul Haas, through his radio station,

is playing hand-in-glove with Senator Wheeler.

G:

Uh huh.

HMJr:

Now I want to know whether he is or whether he

G:

Yes.

HMJr:

See?

G:

Yes.

HMJr:

G:

HMJr:

G:

isn't.

He said that Saul Haas and Bone are playing
hand-in-glove with Wheeler.
Uh huh.

Now we might - I mean, while you're out there,
you ought to be able to find out.

Well, yes. Yes. I'm going to have dinner with
John Boettiger and the Boettigers tonight, and
I've also talked with Ed Fussell, and I can get
the dope.

HMJr:

Well, I wish you would; because I'd like to
lay it to rest one way or the other.

G:

Yes. Good.

HMJr:

Will you?

G:

Yes, I'11 do that.

319

-3-

G:

All right. Are you feeling all right?
I'm feeling all right, yes.

HMJr:

Good. Well, give the Boettiger's my best

G:

I will. And then that will mean my leaving

HMJr:

regards.

here, probably, Saturday night.

HMJr:

Yes.

G:

It'11 be about - I don't know - it'11 be about

HMJr:

Wednesday or Thursday morning when I get back.

Well, I think as long as you're out there, you
might as well do that for John Boettiger.

G:

All right. I'll be glad to.

HMJr:

Okay.

G:

All right.

HMJr:

Thank you.

G:

Good-bye.

October 9. 1941

Mr. Bell

Mr. Dietrich
At 10:15 a.a. this morning Mr. Canarea of the Federal Reserve Bank of New
York told no that Mr. Funck of the Chase National Bank had informed his that a
Russian ship, the 8. 8. Micharian, was due at San Francisco the last part of this
week. Mr. Funck said that he did not know if this ship was carrying any gold.

AS 10:30 a.s. I called the Russian Charge d'Affaires, Mr. Gronying, and in-

quired of his if there was any gold on this ship which the intended to

deposit at the Mist at San Francisco for account of the Secretary of the Treasury
under the arrangement of August 15. Mr. Grenyko replied that 11 was imperative
that he obtain an appointment today with the Secretary for himself and Mr. Inkasher,
President of the Anterg Trading Corporation. and that the subject of discussion
would be the earge of two Russian ships, one the S. s. Micharian and the other
the name of which he did not know. now on their way to the United States. I tamediately prepared the attached nonerandum to the Secretary and upon submitting 11

to Mr. Bell for his approval, Mr. Bell said that he understood the Secretary in-

tended making a new gold agreement with the Russians. Mr. Bell then initialed my
nonorandum and I delivered it to Mr. Pitagerald at 10:55 a.m. for presentation to
the Secretary.

At 11:10 a.s. Mr. Fitsgerald called me and said that the Secretary had set
the appointment for 2:45 p.m. Mr. Pitsgerald also said that my memorandum had been
seat to Mr. Felay for study by the Legal Department. I immediately called Mr.Gromyke
and advised his of the hour of the appointment.

FD:1ap-10/9/41

TO:

321

mr. Fole

The Secretary

asked me to

pass this on to

you for your
study
Fitz
From: MR. FITZGERALD

TREASURY DEPARTMENT

322

INTER-OFFICE COMMUNICATION
DATE

TO

Secretary Morgenthau

FROM

Mr. Dietrich

October 9. 1941

Mr.Gromyko, Russian Charge d'Affaires, has requested me to obtain an
appointment today with the Secretary for himself and Mr. Lukashov. President of
the Amtorg Trading Corporation.

Mr. Gromyko said that it was imperative that he obtain this appointment
today and that the subject of discussion would be the cargo of two Russian ships,
one the S.S. Michurian, due in San Francisco late this week, and the other. the
name of which is unknown, now on their way to the United States. While I am not
sure what he means by cargo, I presume that Mr. Gromyko is referring to gold which
may be on these ships.

A
Thus.

swB Smth. apply
Andrei Gromyko - Counsellor and Charge d Affaires of Soviet
Embassy

Konstantin Lukashev, President of Amtorg Trading Company

323
October 9. 194
Files

Ms. Districh
AS 2:45 p.m. Mr. Groughte Russian Charge d'Affaires, and Mr. Lakashev.

President of the Asterg Trading Corporation, called upon the Secretary is accerdand with the appointment which I had made for them. Mr. Velay also attended the
conference.

After the meeting was ever Mr. Felay told me that the Fuscians had inquired
if they could Sales the gold arriving es the S. B. Micharian and sell 11 for their
ova account rather than deposit 11 for the account of the Secretary of the Treasury.
Mr. Felay further said that the Secretary suggested that the Russians apply this
gold against the agreement of August 15 and that the Secretary would be willing
to provide them with a similar agreement for as additional amount of gold.
Mr. Felay said that be would write up the meeting with the Russiane and forward a copy to no.

Late this afternoon the Secretary informed me that there were five tens of
gold arriving early next week which the Bussians would deposit for the account of
the Secretary of the Treasury under the agreement of August 15.

-10/9/41

October 9, 1941.
MEMORANDUM FOR THE SECRETARY'S DIARY

At 2:45 on Thursday afternoon, October 9, 1941,
Andrei Gromyko, Counsellor and Charge d'Affaires of the
Soviet Embassy and Konstantin Lukashev, President of
Amtorg Trading Company, called on Secretary Morgenthau.
Mr. Foley was present.
The Russians told the Secretary that two Russian

ships were arriving in United States ports with gold bars,
one early next week and the other the latter part of this

month. They requested that the gold arriving on the first
boat be free from the commitment in the letter dated

August 15, 1941, wherein the Soviet Government agreed to

deliver 301,000 ounces of gold within ninety days of the
date of the agreement.

The Russians stated that sufficient gold would be
brought in on the second boat to repay the obligations
owing to the United States. Secretary Morgenthau inquired
the approximate dollar amount of gold on the boat arriving
next week. The Russians stated that there would be about
5 tons of gold amounting to approximately $5,000,000 aboard
each vessel.

The Secretary then proposed that the gold on the

boat arriving next week be sent to the Mint in the regular
way so that he would be in a position to announce that the
Russians had delivered the gold several weeks earlier than
they were required to do under the agreement. He said
that this would create a good impression both on the Hill
and with the public. He said he would then make a new
arrangement with the Russians whereby they could have

credit against the future delivery of gold in whatever

amount they would indicate to him was necessary for their
purposes. The Russians indicated that this would be
entirely satisfactory to them and that they would communicate it to their government and let Secretary Morgenthau
know early next week how much additional credit they

would need.

325

OCT 9 1941

My dear Mr. Secretary:

I am enclosing a record of the conference
held Wednesday afternoon in your office, together with an account of my later meetings

with the British and Russian representatives.
Sincerely yours,
(Signed) B. Morgenthau, Ja.

Secretary of the Treasury.
The Honorable,

The Secretary of State,
Washington, D. C.
Enclosures

etc meeting washed 2000 10/7

and not wed

Copies to Mr. White
By Messenger 4.07tm
HDW:d1m 10/9/41

326
October 9, 1941
4:13 p.m.
HMJr:

Hello.

Morris
Wilson:

I just want to say how sorry I was I missed

HMJr:

Well, I am, too.

W:

HMJr:
W:

your lunch.

I was storm-bound in Canada. I got here just
when your lunch finished.

oh, I'm sorry.

I was very glad that you weren't hurt in that
accident the other night. You gave us a fright.

HMJr:

Oh.

W:

I came out of a theater, and a boy was yelling

and selling an armful of newspapers, "Morgenthau

in air accident!'

HMJr:

Oh.

You know how these headline writers do it.
HMJr:
W:

Where was this?

I had to spend three cents to find out that
you were alive.

HMJr:

This was Montreal?

W:

What? No, down here.

HMJr:

Oh, for heaven's sake.
Oh, it was down here.

HMJr:

Oh.

Well, you were very lucky.
HMJr:

Yes, I was.

327
-2
W:

HMJr:

Oh, I'm very grateful. You should be, too.
I am.

W:

Because these things happen very easily.

HMJr:

I'm very grateful.

W:

Oh, yes. Now, I haven't overlooked this thing
that you gave me the other day - this complaint -

but it has led us off into some pretty distant
fields and we want to make it comprehensive;
but I promise that by Saturday I'll have it,

and of course, the minute I get it, I'll put it
on your desk.

HMJr:

Good. I want you to meet Chester Barnard, who's

W:

Ah, I'd like to.

HMJr:

And that was the purpose of the luncheon.

W:

HMJr:

with us now.

Yes, I heard from him - I suspect that - well,
Lew was there and he told me he met him. Very
attracted to him.
Yeah. Well, that was the purpose; and he's very
able and he's here and he wants - I want him to
help.

W:

Yes.

HMJr:

So some time

W:

Can I slip over some time and see him?

HMJr:

I wish you would.

W:

Yes, I'11 - if - I know it's getting near your
Cabinet meeting and week-end of the week and

your week-end away; but early in the week if I

might give you a ring, I'11 slip over and you
can send your boy in and introduce me. I'd
like to have a chat with him.

328

-3HMJr:

I wish you'd do that.

W:

I know who he is.

HMJr:

You do?

W:

of
course. And, well, I read the papers, of
course.

HMJr:

He's a good man.

W:

Oh, I would think 80.

HMJr:

Right.

W:

And when I read it, I thought you were very
lucky to get him.

HMJr:

Thank you.

W:

Let me give you a ring early in the week, if I may.

HMJr:

Thank you.

W:

Thank you. Good-bye.

329
October 9, 1941
4:27 p.m.

Ex-Senator
Bulkley:

Hello, Mr. Secretary. I appreciate your

HMJr:

How are you?

B:

calling me.

Just fine. Say, I have been asked by the
City Club of Cleveland to give you a good

word in favor of an invitation that they

have sent you to come out and address the

City Club Forum. The City Club is the very
best kind of an open-minded organization, and
the Forume there are really famous. And they

have not only an excellent audience before

your eyes, but they broadcast it over the
radio and get a big hearing outside; and I
don't know what other invitations you have
from Cleveland. They say that probably you
have some others and they feel that they're a

little in competition to get you; but I'm sure

you couldn't have a better Forum than the City
Club.

HMJr:

Well, Senator, it's very nice of you to bother.
I wrote them last night and said I'd try to
come out on the 29th.

B:

Oh, that's fine.

HMJr:

I said I'd try my best to do it.

B:

Well, we'll have to get together with Henry
and arrange a big reception for you.

HMJr:

Well, it's very nice of you to interest yourself,

B:

Well, I'd be very much interested. I certainly

but

hope you're coming.

HMJr:

Thank you so much.

B:

Well, I'm just delighted to hear that you're
coming and

330

-2HMJr:

Well, I told them I wouldn't know up to the
last two weeks, but I would try - I would hold
it and I would try my best.

B:

Anyway, you're putting it on your calendar.

HMJr:

That's right.

B:

That's grand.

HMJr:

Thank you.

B:

Well, we see Henry now and then, and

HMJr:

I know. He enjoys meeting you and

B:

As a matter of fact, he's taking my girl to
the Symphony tonight.

HMJr:

(Laughs) Yeah.

B:

And he's a grand boy. We're awful glad to
see him.

HMJr:

Well, that's terribly nice of you to say that.

B:

Well, good luck and thank you so much.

HMJr:

Thank you, Senator.

331
CONFIDENTIAL

POSTAL SAVINGS STAMPS

Estimated Total Sales, by Months,
Since May 1, 1941

(In thousands of dollars)

:
:

Month

Stamp Sales

:

$ 3,475

May

June

2,802

July

3,288

August

4,454

September

4,924

Total

$18,943

Office of the Secretary of the Treasury,
Division of Research and Statistics.
October 9. 1941.

Source: Division of Postal Savings,
Post Office Department.

CONFIDENTIAL
UNITED STATES SAVINGS BONDS

Comparative Statement of Sales During
First Seven Business Days of August, September, and October, 1941
(August 1-8, September 1-9, October 1-8)
On Basis of Issue Price

(Amounts in thousands of dollars)

:

Series F - Banks
Series G - Banks
Total

September : August

-$ 802

:

:

:

Series E - Total

:

Series E - Banks

over

:

:

Series E - Post Offices

over

Percentage of Increase
or Decrease (-)
October : September
over

over

:

:

September August

:

:

October

or Decrease (-)
October : September

:

Item

Amount of Increase

:

Sales

September : August

- 6.0%

$12,759
21,856

$12,460
19,735

$13,262
24,262

$ 299
2,121

- 4,527

10.7

- 18.7

34,615
6,667
41,128

32,195
5,330
36,378

37,525
7,515
50,864

2,420
1,337
4,750

- 5,330
- 2,185

- 14,486

7.5
25.1
13.1

- 14.2
- 29.1
- 28.5

$82,410

$73,903

$95.903

$ 8,507

-$22,000

11.5%

- 22.9%

Office of the Secretary of the Treasury, Division of Research and Statistics.

2.4%

October 9. 1941.

Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States Savings Bonds.

Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.

UNITED STATES SAVINGS BONDS

Daily Sales - October 1941
On Basis of Issue Price

(In thousands of dollars)
Post Office

All Bond Sales

Bank Bond Sales

Bond Sales
Date

Total

Series E

Series F

Series G

$ 1,286

$ 8,271

$ 14,036

7.977
10,687
8,707

4,479
4,656
5,449
2,966

867

4,324

1,065

6,323
6,400

9,847
12,837
9.978

15,508
6,080
8,106

8,226
3,802
5,037

1,444

821

9,286
2,913
3,611

821

9,286
2,913
3,611

18.956
7.287
9,469

$ 6,667

$ 41,128

$ 69,651

$ 34,615

$ 6,667

$ 41,128

$ 82,410

Series B

Series E

Series F

Series a

Total

$ 1,450

$ 3,029

$ 1,286

$ 8,271

$ 12,587

1,870
2,150
1,270

2,786
3,299
1,696

867

4,324
6,323
6,400

3,449
1,207
1,363

4,778
2,595
3,674

1,444

$ 12,759

$ 21,856

October 1941
1

2

3

4

6

7

8

Total

Office of the Secretary of the Tr
Source: All figures are deposits

1,065
612

572

612

572

Division of Research and Statistics.

October 9. 1941.

Treasurer of the United States on account of proceeds of sales of

United States Savings Bondary
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.

334

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

DATE October 9, 1941

Secretary Morgenthau

TO

FROM

V. F. Coe V.F.C.

Subject: Appointment with Stacy May

done

Mr. Stacy May, Research Director of OPM, who
has recently been to London, and about whom I spoke

to you, tells me that he will be delighted to come
and see you at your convenience anytime after Friday
morning and talk to you about English military
production.

If you wish to see Mr. May, I shall be glad to
arrange an appointment. I would also like to suggest
to him that he be prepared to discuss comparative
figures on British and U.S. production of bombers,
pursuit planes, tanks, ordnance, etc.

Mr. may saw
Hnjr 10/01/41

For Miss Chauncey

335
FEDERAL RESERVE BANK
OF NEW YORK

October 9, 1941

CONFIDENTIAL

Dear Mr. Secretary: Attention: Mr. H. Merle Cochren
I am enclosing our compilation for the week
ended October 1, 1941, showing dollar disbursements out

of the British Empire and French accounts at this bank
and the means by which these expenditures were financed.

Faithfully yours,
/8/ Robert G. Rouse
Robert G. Rouse,

Vice President.

Honorable Henry Morgenthau, Jr.
Secretary of the Treasury.
Washington, D. C.
Enclosure

Copy:VW

10-13-41

ANALYSIS OF BRITISH AND FRENCH ACCOUNTS

Week Ended October 1. 1941

(In Millions of Dollars)

DEBTTS
Total
Debita

PERIOD

Gov't
Expendi-

III

Nov. 27

Doo, 31
emough Deo.

195.16

7.9

8.6

4.4

160.5

6.0

31.4
32.0

1.8

0.5

0.3

259.5
198.0

210.0

31.5

18.5

0.8

0.1

0.7

Q.7

111.4

18.0
26.0

993.1

1,109.5

108.0

60.6
575.6

36.6
10.8

878.3

421.4

2.1
456.9

0.6
1098.4

259.9
101.4

176.2

52.0

31.7

62.5

1.7

1.7

0.5

26.6

26.0

0.2

0.2

103.7
125.6

72.0

- 53.2
+ 8.2

0.2

237.9
218.90

48.8
62.2

0.7

15,0

78.3

0.7
0.9

0.9

6.3

32.0
11.0

167.8

801

841.0
806.85
834.6
2.980.3 12.425.6

28.9

$9.9

87.8

140.5

91.0
105.1

131.2

113,8
75.6
92.2

32,0
26.7
25.8
39.5

149.2

8/27/21)

2.203.0

792.2

Oct.
Oct 2

140.9

105.9

35.0

34.5

29.9

31.9

20.0
18.0

4.6
11,5

Dec.

900.2

6.0

90.6

101.4

the

1.0950

271.5

72.5

122.6

July 30

449.2

308.9
198.5

244,9

24.1

May

416.6 (e)

* 35.0

101.9

July a

Credits

420.1

126.0

BE

Sales

52.0

229.7

Apr. 30

Total
Credits

356.1

162.7
137.8
187.6

Apr. 2

Debits

Other

828.3

197.4
164.6

Feb 26

tures (d)

Expendi-

1,187.

34.7

26.8
32.3

410.

Gold

52.7

0,9
0.4

92.2

35.4

21.5

6.0

55.5

0.5

40

145.2

- 39.9
+17.5

274.0

722.1

2.0

154.1

- 13.2
+35.3

38.9
0.3

2.0

7.0

1.9

176.2

193.7
20.1

2.1

31.6

61.5
2.189.8

+92.9

866.3(0)

(+)

of Gold

605.6

1941

- 29

Proceeds

Give't

Total
Debits

Credito

516.8
196.7

--30

Total

Other

Net Inor.
(+) or
Other
Dear. (-)
Officially(b) Credits( in Balance

Sahutan

Debits

solved

- Oct. 2

DEBADE

CRADITS

Proceeds of
Sales of

OF

tures(a)

year of WILT

9-8/28/40)*

BANK

BANK OF ENGLAND (BRITISH GOVERNMENT

Strictly

Continent

4.2
0.2

-

-

1.0
4.8

21.5

Dear, (-)
in Balance
+229.0
7.3

1.5m

1.3

0.5°

0.5

0.7

0.8km

-

1.5
0.1

+220.1

0.2
17813

1.6
-

0.9

1.2
-

OJB

-

OPEN
-

Other

-

DOL
O.D

120.9

004

- 20.6

0.3

0.3

0.2

1.0

O.S

0.5

0.5

34.1

8.8
0.5

0.5

0.3

=

8.8

30.1

0.2

0.5

3

10
17
24

26.3
21.0
27.2

15.2

22.8
Since

9.0
11.7

8.
5.

32.0

19.6

30.0

0.2
0.3

93.5

And

Outbreak

-

of

War

June 1,990 19.6 million
(through June 19,1940) 27.6 million

(since June 19,1940) 44.4 million

thly breakdown see tabulations prior to April 23, 1941.

-

11.2

-

12.4

25.5
- 20.2
5.7

-

29.8

9.0

0.1

0.1
0.1

0.2
93.2(d) +.66.3
Transfer from Briting Purchasing Commission to
Bank of Canada for French Account
Week ended Oct. 4. 1941
162.7
Cumulation from July 6,1940

0.1

0.2

0.1

0.1
0.2
0.1

0.2
0.1

+

0.1

0.1

+ 0.1

2.0.1
0.2

(See footnotes on reverse side
million
million

EDITION 151A ELITION

to

SOMAH

(a),
(+)

STALLOG 20 unof LLEM OI
BRTTEHIE) THANKS 10

XHAZ

N got
Includes for account of Birth nb Pin-basing Commission, Brit ish Air Ministry British Supply Board Mindatory
20

Supply Timber Control, and Ministry of Shipping.

GOIHY'S

TO TGO 5094

TORAP figures based on transfers from the Now York Agency of the Bank of Montowal, which apparently represent USTH the addition La.

of official Britt 13h sales of Amer-Soen securition, Liioluding those arranded.through direct negitiation during the

theof securities
receipt propobds at for this private Bank nannat Britiah be account idem occurred, (fied with particularly any docureous According
although
thesubstantial
WITH
product to the official elling,
liquidation of the

data to Months supplied by the British Treasury and released by Seoretary Morgenthau, total official and private British liquidation
TOTAL
of OUR Securities through December, 1940 amounted to $334 million.

(a)

one

SHI

200

.voit LC .700

about $85 millton received during October 1939 from the accounts of British authorized banks Now1Yoyk back

Inalydas 6.5m requisitioning of private dollar Other Mango transfers from such Ibonunta 02800 October

bobat
1421

2201 1939 apparently refireting represent the acquisition or proceeds of abports from the starling area and other digress.ly addraing dobier
recognts,

JEAL

(a) Indindes payments for account of French Air Commission and French Parchasing Commissions

HIGH
EAM

(o) Adjusted to eliminate the effect of $20 million paid out on June 25% 1940 and returned the following aby
(c)

TOM

Includes 4.0 $75,000,000 representing
further advance on $425,000,000 Toan made by the R. F. C. on British-owned American -eecurities
$100,000,000)

ziot
SUU IG_YOU

(Initial advance August 1
(2nd

VST an

September 24 25,000,000)

910

dat

OJ

CAC

THE In 289103
MAILClood
Name BORTH

Change to

colilia
get

notifim

our
bra.(sh)
out ban Last
vidzon

"DO"E

-

site

ANALYSIS OF CANADIAN AND AUSTRILIAN ACCOUNTS

(In Millions of Dollars)

O

BANK

Proceeds

of mar

26.7
35.2

of 27

48.0

472.2
53.7

M

30

V

8/87/11)

31.1
60.9
34.9
39.2
45.1
30.6
32.5
460.4

23.1

16.6

-

-

31

Gold

Sales

A/C

3.9

27.3

30.0

412.7

31.2

4.9

+181.7

6.1

32.4

36.1

38.7

0.4

8.7

2.5

6.2

8.0

6.7

1.3

0.7

0.2

10.1

2.6

7.9

6.5

1.4

2.
0.5

3.1

7.5
0.6

4.8
57.9

14.5

43.9

16.4

27.3
14.3

0.3

16.7

3.7

13.7
110.7

4.4

1.9
34,4
12.6

41.0

230.2

15.0

2.0

6.8

3.2

5.0

1.7

19.1

5.8

0.8

10.5

3.8
12.9

0.2
6.8
14.9

1.0

2.8

0.5

9.3

707.4

33.7
31.1

33.9
24.3

16.9

60.9

46.0
35.9

23.1

49.2

-

42.5
20.9

14.3

-

-

12.5
15.8

30.6

25.6
48.2
21.8

32.5

23,6

16.3
15.2
10.0

462.0

246.2

52.2

21.2

460.4
23.1

Total

Credits

20.9

534.8

43.2

British

Other
Debite

Net Inor.
(+) or
Credits Deor. (-)
in Balance

Other

A/C

28.6
69.6
60.6

39.8

in Balance

official

of

A/C

35.2
48.0
460.6

34.9

Total
Debits

Proceeds

Sales

14.0

26.7
-

-

Doo.

44.3

-

504.7

For French

-

3.4

3.4

4.8

3.6
6.8

2.1

4.8

2.0

43.4

62.4

50.1

2.0
12.3

4.8

6.8

5.1

1.7

2.0

3.2

0.6

2.6

1,8

5.0

13.7

12.5

1.2

7.9

2.8

5.9

4.6
4.1

1.3
0.8

1.3

47

3.3

CB

+

3.1
O.5

5.4
10.1
6.4

5.8

4.5

6.3

L.B.

1.5

0.1

5.2

8.3

6.6

1.2

3.1

59.1

81.2

62.9

18.3

10.2

10.2

2.8

2.1

0.2

+24.1

0.9

0.9

0.1

1.0
1.4

1.0

0.1

0.1

Q.9

1.4
6.8

0.2

0.2

1.2

2.1

2.0

0.1

4.2

0.6

0.4

0.1

0.3

0.2

5.4

31.9

5.0

-

6.6

B.B

10.1
6.4

-

10.2

8.9

5.2

88.5
31.0

1.6

72.2

+29-1

26.6

0.7

123.9

2.5
4.8

1.5

4.9

13.7

+

44.5

2

306.4

16.6

-

Oct.

323.0

-

ea/40)*

For Own

Gold

(+) or
Credits Deer. (-)

Other

to

-

-

-

13.1

+

A/C

of

Transfers
Net Inor.

+

Debits Credits

Transfers from official
British A/C

-

Official
British

Total

Other

CREDIT

+

to

Total
Debits

CREDITS

+

Transfers

RAT - JUST

DEBITS

CANADA

+

UNITE

Strietly

Week Ended October 1. 1941

Q.Q

7.9

29

Doe
LINED

Oct.

0.1

2.6

10

2.6
3.5

3.5

26.7
3.4

17

5.8

5.8

684

3.7

10.7

9.6

18.2

7.0

5.3

24

3.2
18.2

Average of Total Debits Since Outbreak million
of War
$ 7.5
Oct. 1, 1941

2.2
3.5

OZ

-

-

-

1941.

0.9
1.1
1.7

-1.4

-7.0

11.2

6.8

0.6

-

0.0

339
HOLD FOR RELEASE

HOLD FOR RELEASE

HOLD FCA RELEASE

October 9, 1:41
CONFIDENTIAL: To be held in STRICT CONFIDENCE and no

portion, synopsis or intimation to be published or
:iven out until the READING of the President's >essage
nas begun in the Senate or the House of Representatives.
Extreme care must therefore be exercised to avoid prenature publication.
STEPHEN EARLY

Secretary to the President

TC MA CONGRESS OF THE UNITED STATES:

It is obvious to all of us that world conditions have
changed violently since the first American Neutrality Act of 1935.
The Neutrality Act of 1930 was passed at a time when the true
magnitude of the lazi attempt to dominate the world was visualized
by few persons. ae heard it sala, indeed, that this new European
war was not a real war, and that the contencing anaies would remain

behind their impregnable fortifications and never really fight.
In this atmosphere the Neutrality Act seemed reasonable. But so
ziu the saginot Line.

Since then -- in those past two trajic years -- war
has spread from continent to continent; very many nations have been
conquered and enslaved; great cities have been laic in ruins;
millions of human beings have been killed, soldiers and sailors
and civilians alike. Never before has such widespreau devastation been visited upon God's earth and God's children.

The attern of the future -- the future as Hitler

seeks to shape it -- is DOA ..S clear and as ominous as the headlines of today's newspapers.
Through these years of war, WE Americans have never

been neutral in thought. 70 have never been inulfferent to the fate
of Hitler's victins. Anu, increasingly, is have become aware of
the peril to ourselves, to our democratic traditions and institutions, to our country, and to our hemisphere.

We have known what victory for the aggressors would
mean to us. Therefore, the American people, through the Congress,

have taken important and costly steps to Ive great aid to

those nations actively fighting against Jazi-Fascist comination.
ite know that will could not defend ourselves in Long

Island Sound or in San Francisco Bay. That would be too late.
It is the American policy to defend ourselves wherever such defense
becomes necessary under the complex conditions of Lodern warfare.

Therefore, it has become necessary that this
government should not be handicapped in carryla out the clearly
announced policy of the Congress and of the people. de must face
the truth that the Neutrality Act requires is couple to Teconsideration
in the light 01 known facts.
The revisions which I Suggest GO not call ior is
acclaration of war any more than the Lunu-LesSu Act called for

is declaration of war. this is a tatter of .sauntial aufons of
can rights.

340

In the Neutrality Act are various crippling provisions. The repeal or modification of these provisions will
not leave the United States any less neutral than we are today,
but will make it possible for us to defend the Americas far more

successfully, and to give aid far more effectively against the

tremendous forces now marching towards conquest of the world.

Under the Neutrality Act, we established certain
areas as zones of combat into which no American flag ships could

proceed. Hitler proclaimed certain far larger areas as zones of
corbat into which any neutral ship, regardless of its flag or
the nature of its cargo, could proceed only at its peril. We
know now that Hitler recognizes no limitation on any zone of combat in any part of the seven seas. He has struck at our shipe and

at the lives of our sailors within the waters of the Western

Hemisphere. Determined as he is to gain domination of the entire

world, he considers the entire world his own battlefield.

Ships of the United States and of other American
Republics continue to be sunk, not only in the imaginary zone

proclaimed by the Nazis in the North Atlantic, but also in the
zoneless South Atlantic.

I recommend the repeal of section 6 of the Act of
November 4, 1939 which prohibits the arming of American flagships
engaged in foreign commerce.

The practice of arming merchant shipe for civilian

defense is an old one. It has never been prohibited by international law. Until 1937 it had never been prohibited by any

statute of the United States. Through our whole history American

merchant vessels have been armed whenever it was considered neces-

sary for their own defense.
It is an imperative need now to equip American merchant
vessels with arms. We are faced not with the old type of pirates
but with the modern pirates of the sea who travel beneath the
surface or on the surface or in the air destroying defenseless

shirs without warning and without provision for the safety of
the passengers and crews.

Our merchant vessels are sailing the seas on missions

connected with the defense of the United States. It is not
just that the crews of these vessels should be denied the means

of defending their lives and thoir ships.

Although the arming of merchant vessals does not

guarantee their safety, it most certainly adds to their safety.
In the event of an attack by a raider they have a chance to
keap the enomy at a distance until help comes. In the case of an
attack by air, they have at least a chance to shoot down the a
enemy or keep the enomy at such height that it cannot make a sure

hit. If it is a submarine, the armed merchant ship compels the
submarine to uso a torpedo while submarged -- and many torpedoes

thus firedmiss their mark. The submarine can no longer rise to
the surface within a few hundred yards and sink the merchant ship

by gunfire at its loisure.
Already we take many procautions against the danger of
minos -- and it seems somewhat incongruous that we have authority
today to "dogauss" our ships as a protection against mines, whereas
we have no authority to arm them in protection against aircraft
or raidors or submarinos.
The arming of our ships is a matter of immediate necessity and extrema urgency. It is not more important than some

other crippling provisions in the present Act, but anxiety for

the safety of our crows and of the almost priceless goods that
Are within the holds of our ships leads me to recommend that you,

ith all speed, striko the prohibition against arming our ships
the statut tooks.

341

There are other phases of the Neutrality Act to the
correction of which I hope the Congress will give earnest and early

attention. One of these provisions is of major importance. I
believe that it is essential to the proper defense of our country

that we cease giving the definite assistance which we are now giv-

ing to the aggressors. For, in effect, we are inviting their
control
of the seas by keeping our ships out of the ports of our
own friends.

It is time for this country to stop playing into Hitler's

hands, and to unshackle our own.

A vast number of ships are sliding into the water from
American shipbuilding ways. We are lending them to the enemies
of Hitlerism and they are carrying food and supplies and munitions

to belligerent ports in order to withstand Hitler's juggernaut.

Most of the vital goods authorized by the Congress are
being delivered. Yet many of them are being sunk; and as we
approach full production requiring the use of more ships now being

built it will be increasingly necessary to deliver American goods

under the American Flag.

We cannot. and should not, depend on the strained

resources of the exiled nations of Norway and Holland to deliver
our goods nor should we be forced to musquerade American-owned

ships behind the flags of our sister Republics.

I earnestly trust that the Congress will carry out the

true intent of the Lend-Lease Act by making it possible for the

United States to help to deliver the articles to those who are in
a position effectively to use them. In other words, I ask for
Congressional action to implement Congressional policy. Let us be
consistent.

I would not go back to the earlier days when private
traders could gamble with American life and property in the hope
of personal gain, and thereby embroil this country in some incident
in which the American public had no direct interest. But, today,
under the controls exercised by the Government, no ship and no
cargo can leave the United States, save on an errand which has
first been approved by governmental authority. and the test of
that approval is whether the exportation will promote the defense
of the United States.
I cannot impress too strongly upon the Congress the

seriousness of the military situation that confronts all of the

nations that are combating Hitler.

We would be blind to the realities if WO did not
recognize that Hitler is now determined to expend all the resources
and all the mechanical force and manpower at his command to crush

both Russia and Britain. He knows that he is racing against time.
He has hoard the rumblings of revolt among the enslaved peoples -including the Germans and Italians. He fears the mounting force
of American aid. Hu knows that the days in which he may achieve
total victory are numbered.

Therefore, it is our duty, as never before, to extend

more and more assistance and ever more swiftly to Britain, to

Russia, to all peoples and individuals fighting slavery. We must
do this without fear or favor. The ultimate fate of the Western
Homisphere lies in the balance.

I say to you soleanly that if Hitler's present military
pluns are brought to successful fulfillment, We Americans shall be
forced to fight in defense of our own homes and our own freedom in
a war us costly and as devastating as that which now ruges on the
Russian front.

342

-Hitler has offered a challenge which we as Americans

cannot and will not tolerate.

We will not let Hitler prescribe the waters of the

world on which our ships may travel. The American flag is not
going to be driven from the seas either by his submarines, his

airplanes, or his threats.

We cannot permit the affirmative defense of our rights
to be annulled and diluted by sections of the Neutrality Act
which have no realism in the light of unscrupulous ambition of
madmen.

We Americans have determined our course.

We intend to maintain the security and the integrity
and the honor of our country.
We intend to maintain the policy of protecting the
freedom of the seas against domination by any foreign power
which has become crazed with a desire to control the world. We

shall do so with all our strength and all our heart and all our

mind.

FRANKLIN D. ROOSEVELT

THE WHITE HOUSE,

October 9, 1941.

344

TELEGRAM SENT
EJ

GRAY

October 9, 1941
3 p.m.
ALEMBASSY,
LONDON.

4324.
FOR ANBASSADOR VINANT FROM THE SECRETARY OF THE
TREASURY.

Referring to your 4348 of SEptEmbEr 17, Treasury
is informed by Cox of Lend LEOSE that the Lend LEASE

Administration is setting up machinery in Washington

for dealing with difficult CCSES on Exports.
HULL
(HF)

EA:FL:PAK

Sa/E

345
PARAPHRASE OF TELEGRAM RECEIVED
FROM:

American Consulate General, Hong Kong, via N.R.

DATE:

October 9, 1941, 5 p.m.

NO.:

404

THE FOLLOWING IS STRICTLY CONFIDENTIAL.
FOR THE SECRETARY OF THE TREASURY FROM FOX.

I have been asked to report that the statement of the
Stabilization Board's operations from August 18 through
September 30, 1941 has been drafted. This report is under
review by the Board at the present time. The Stabilization
Board of the assembly asked me to report this information.
This statement will be sent to the Department by the next

air mail.
In the meantime, for the confidential information of
the Department, the Board wishes to make the following
report:
The applications which have been approved amount
to 1,665.

The applications which have been rejected total
3,755,881 and (?) total 224,291.
The foregoing is a paraphrase of the original message.
OCI

SOUTHARD

EA:PAK

346
Noted

PARAPHRASE OF TELEGRAM RECEIVED

F.

Dietrich

FROM: American Consulate General, Hong Kong.

DATE: October 9, 5, D.M.
NO. $ 404.
CORRECTED COPY NO. 2.

THIS IS IN STRICT CONFIDENCE FOR THE SECRETARY OF

THE TREASURY FROM FOX. THIS IS TF-D.

I have been requested by the Stabilization Board of

China to report that its statement of operations, covering
the period from the 18th of August to the 30th of
September, 1941,has been prepared and the Board is now

reviewing 18. This statement will be sent on the next
Clipper. The Board desires to make the following report
for your confidential information in the meantimes
Applications rejected: 8 5,755,881.
Applications approved: 6,894,108.
Applications rejected: pounds sterling - 224,991.
Applications approved: pounds sterling - 913,665.
The above message is a paraphrase of the original one.
SOUTHARD
10 THE
NPL

LECHNICY
OLLICE

A

OCL

53

0L

THE

bill

&

01

DELVELWEAL

FF:VL

DECEMED

347
CABLE

To: Federal Reserve Bank of N.Y.

From: Stabilization Board of China,
Hong Kong.

Date: October 9. 1941.

#4.

Debit to U. S. Dollar - Chinese Yuan Stabilization Fund
of China Special Account and pay to Bank of China, New York,
for account of Bank of China, Head Office Foreign Department,
Hong Kong, U. S. $6,703,945.16. This amount represents
net amount of all U. S. Dollar payments made by Bank of China

for account of Central Bank of China at direction of Board.
Detailed statements of these payments being forwarded you by

air mail.
(Signed)

Stabilization Board of China
(Rec'd. by phone from Fed.Res.Bk. of N.Y., 12:15 pm., 10-10-41 hr)

348
CABLE
To: Federal Reserve Bank of N.Y.

From: Stabilisation Board of China,
Hong Kong.

Date: October 9. 1941.

Charge U. S. Dollar - Chinese Yuan Stabilization Fund of
China Special Account and pay Chartered Bank of India, Australia

and China U. S. $3,500 for account of Chartered Bank India,
Australia and China, Shanghai Branch Office.
Hong Kong and Shanghai Banking Corporation U. S. $4,500.68
for account of Hong Kong and Shanghai Banking Corporation,
$

Shanghai Branch Office.

Chase National Bank of the City of New York U. S. $35,382.10

for account of Chase National Bank of the City of New York,
Shanghai Branch Office.
(Signed)

Stabilization Board of China

(Rec'd. by phone from Fed,Res.Bk. of N.Y., 12:15 pm., 10-10-41 hr)

0

349

P

Y

Miress Official Communications to

DEPARTMENT OF STATE
WASHINGTON

THE SECRETARY OF STATE

Washington, D. C.
October 9. 1941

reply refer to
611.59A.31/

My dear Mr. Bell:
With reference to our recent conversations regard-

ing our economic relations with Iceland, I enclose for
your information a copy of a memorandum dated October 7.

1941 which has been sent to the British Embassy and

which sets forth the position of the United States
Government with regard to this matter.
Sincerely yours,

(Signed) Adolf A. Berle, Jr.
Adolf A. Berle, Jr.
Assistant Secretary
Enclosure:
Memorandum.

October 7. 1941.

The Honorable

Daniel W. Bell,
Under Secretary of the Treasury.

350
MEMORANDUM

Reference is made to the memorandum of the British
Embassy dated July 29, 1941, proposing to the United

States cooperation in fulfilling parallel obligations to

Iceland. It was pointed out that the British Government
must continue to carry fish and fish oils from Iceland
to the United Kingdom, but that "most of Iceland's require-

ments must to an increasing extent be drawn from the
United States and Canada."

Reference is likewise made to the conversations had
between Mr. Hugh Cumming of the Department and Mr. E.

Wyndham White of the British Embassy, from which proceeded the memorandum of the British Embassy dated September 5. 1941. That memorandum stated that the British
Government would welcome "an arrangement whereby the

United States Government would purchase, in United States
dollars from Lease-Lend appropriations charged to the

British account as defense aid, all future imports from
Iceland to the United Kingdom apart from those covered
by the recent Fish Agreement between the British and

Icelandic Governments." As respects the latter, should
the Icelandic Government press for inclusion of that contract under the Lease-Lend arrangements, the British Government would be prepared to consider such a suggestion
favorably.
The Department has been in communication with the

Icelandic Government, and discovers that the Icelandic
Government now presses for inclusion of the Fish Agreement under the proposed Lease-Lend arrangements, as well

as the other future imports from Iceland to the United

Kingdom.

The Government of the United States, in view of the
very broad obligations assumed by it under the exchange
of messages between the Prime Minister of Iceland and the
President of the United States, considers that the only
practicable arrangement is the purchase by it until

further notice of all imports from Iceland to the United

Kingdom. these to be supplied to the British Government
and charged to the British account as defense aid. The

351
-2-

difficulty of taking only a part of these importations is

obvious, particularly in view of the importance which the
Icelandic Government attaches to this feature, and to
their unwillingness to increase further the balances of
blocked sterling which have been accumulated in London.

The Icelandic Government has also drawn to the attention of the United States the existence of an agreement
made between Iceland and Great Britain on the occasion of

the sale by Britain to Iceland of approximately $2,000,000

of Canadian and United States exchange last summer. That

agreement calls upon Iceland, out of the first incoming
dollars she might receive, to repurchase blocked sterling

and thereby replace the amount of Canadian and American

dollars sold to her.

The Icelandic Government has indicated that it

feels this requirement is oppressive since it had al-

ready shipped goods to Britain represented by the blocked
sterling; and is now obliged to ship further goods against
American purchase under the Lease-Lend operation, and required to use the dollars to repurchase the blocked ster-

ling. Further, since in effect this would result in an

allocation of Lease-Lend funds part of whose purpose would

be to purchase blocked sterling, the officials of the

United States Treasury Department have indicated an objection. The United States Government, accordingly, believes
that this agreement exacted from Iceland should be waived.

Finally, the Icelandic Government has raised the
question as to whether some use might not be made of the

very large balance of blocked sterling accumulated in
London and from which, at present. the Icelandic Govern-

ment can derive no benefit. Specifically, it is

suggested that Iceland be given an opportunity to pay

off or acquire the Icelandic debts held in Britain and
there payable in pound sterling. Note is taken of the
fact that £510,400 from this blocked fund is to be used
in paying off the balance of the Icelandic 5 1/2 percent
loan of 1930. There remain, however, upwards of £800,000

of loans which are held in Britain and which could, perhaps, be reacquired by Iceland against proper debit to
her blocked sterling account.
In view of the need for prompt flow of supplies to
Iceland, the United States Government is proceeding on

352
the basis of the arrangement accepted in the memorandum

of the British Embassy of September 5 referred to above:
and will send a representative of the Lease-Lend organi-

zation to Iceland in the near future.

It is planned to take over all of the unexpired
contracts by which Iceland is obligated to supply goods
to Britain, and by agreement with Iceland the goods

naturally are to be made available to Britain. Those

goods which are not under contract but which are currently
supplied, such as fisherman's cargoes, can be arranged for
on the ground between the representative of the Lease-Lend
organization and the British representatives there.
As the unexpired contracts run out, the Government

of the United States will be glad to confer with the

British Government.

Department of State,
Washington, October 7. 1941.

Copy:1c:10/10/41

353
BRITISH EMBASSY,
WASHINGTON, D.C.

PERSONAL AND
SECRET

October 9th, 1941

Dear Mr. Secretary,

I enclose herein for your
personal and secret information a

copy of the latest report received
from London on the military situation.
Believe me,

Dear Mr. Secretary,

Very sincerely yours,
the Honourable

Henry Morgenthau, Jr.,

United States Treasury,
Washington, D.C.

Halifex

354

TELEGRAM RECEIVED FROM LONDON

DATED OCTOBER 8th,1941

MEDITERRANEAN, October 7th.

British submarine attacked two
merchant ships escorted by two destroyers
north of Crete and obtained one hit.

October 7th, large British tanker
which had left homeward bound Atlantic convoy

was torpedoed 200 miles from Reykjavik. Report-

ed still afloat.
ROYAL AIR FORCE. October 7th/8th.

No operations owing to unfavourable
weather.

SICILY. October 6th/7th.
Hurricanes carrying bombs attacked

aerodrome at Comiso. Bombs fell in dispersal area.
LIBYA,October 5th/6th.
Wellingtons bombed Benghazi harbour and

Blenheims mechanical transport workshops at Bardia.

October 6th/7th, Wellingtons dropped 12 tons of
bombs on Tripoli (L) harbour. Quays and merchant

vessel of ten thousand tons hit. October 6th,
twelve Tomahawks engaged 14 M.E. 109 in Sidi Omar

area. One M.E. 109 destroyed and another probably
destroyed. We lost two Tomahawks.
NORTH RUSSIA. October 6th.

14 enemy bombers and six fighters

borided our aerodromes at Ori otta (Hurmansk).
No damage and only one minor service casualty.

Our Hurricanes destroyed three Junkers 88's
probably/

355

probably destroyed two Junker 88's and one
ME 109 and damaged another six Junkers 88's
I

without loss to themselves.
German forces have reached Vyasma

and Bordyansk and are attacking Oral.

RESTRICTED

356

M.I.D., W.D. 11:00 A.M., October 9, 1941

G-2/2657-220; No. 514

SITUATION REPORT

I.

Eastern Theater.

Ground: There is no additional information concerning the
Leningrad front.

On the central front, the German High Command claims

to have penetrated the Russian positions, creating two large pockets
west of Vyazma, inclusive, and east of Bryansk. Each of these encirclements is considered to contain at least three armies. The Russians
admit the loss of Orel.
On the southern front the German advance north and
south of Kharkov continues. The Germans claim to have surrounded six

or seven divisions along the Sea of Azcv southeast of Melitopol.

The peninsula south and east of the mouth of the
Dnepr has been cleared of Russian troops.

Air: D.N.B. reports heavy bombing of Leningrad last night.
Russian reports asserted that their planes had destroyed many communication facilities and much materiel behind the Smolensk area.
II.

Western Theater.

Air: The R.A.F. was grounded last night in this theater,
as it has been for the past five nights. There is no information on
German activity over the British Isles.

III.

Middle Eastern Theater.

Air: A British raid against the German-held Greek port of
Pireaus, with considerable damage claimed, was the outstanding event

yesterday in this theater.
The Italian communique states that the east coast of
Sicily was raided by the British yesterday, while Fascist bombers hit
at Haifa, Palestine.
British sources in Alexandria claim that Italy has
lost one-third of her merchant fleet.
RESTRICTED

357
CONFIDENTIAL

Paraphrase of Code Cablegram
Received at the War Department

at 7:58 a.m., Osteber 9, 1941.

London, filed: 1:40 P.M., October 9, 1941.

1. British Air Activity over the Continent.
a. Day of October 8. A total of 105 fighters were employed as

follows: 52 in the protection of shipping, 27 on interception patrols, and 26 on special missions.

2. German Air Activity over Britain.
a. Day of October 7. 5 reconnissance aircraft and 5 long
range bombers were used.

b. Might of October 7-8. 20 long range bembers were employed.

G. Day of October 8. Operations were on a very small scale.

3. Aircraft Losses Reported.

a. British lesses. None reported.
b. Axis losses. None reported.

4. British Air Activity, Other Theaters.
a. Mediterranean Theater. Pirasus harbor was attacked by 23
Wellingtons the night of October 6-7. The same night Haraklion was
bombed by a Wellington.

b. North African Theater. The night of October 6-7 motor
transports at Bardia were bombed by 10 Blenhaims. On October 7
supply concentrations mear Gembut were attacked by 9 Maryland bomb-

are protected by 21 P-40's. 1 Me-109 was shot down and another
damaged.

5. Axis Air Activity, Other Theaters.
a. North African Theater. 2 Axis planes attacked a merchant
vessel at Zafarana on October 6. No damage was caused by this raid.

CONFIDENTIAL

358
CONFIDENTIAL
1 He-111 was shot down. Another Axis plane was shot down during an

attack, the I day, by 9 planes on Tebruk. The raid only caused
slight damage.
LINE

I. B. 12 10:15A, 10/9/42

Distribution:
Chief of the Army Air Forces
State Department (2)
War Plans Division

Office of Naval Intelligence (2)

G. H. Q.
Record Section

Intelligence Branch
Secretary of Treasury
A.S.W.A.

Section File
Collection Section
B.E.
0-3
A.C.

B&M

CONFIDENTIAL