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149 BRITISH EMBASSY WASHINGTON, D.C. 26th December, 1931. PERSONAL AND SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, (For the Ambassador) R.I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D.C. 150 Copy No. 14 BRITISH MOST SECRET (U.S. SECRET) OPTEL No. 16 Information received up to 7 a.m., 23rd December, 1941, (I) NAVAL During the night 21st/22nd a small Norwegian ship in the homeward Gibraltar convey was torpedoed. A 7,000 ton British ship was sunk by mine off the East coast on the 21st. (II) MILITARY LIBYA. Reports now received of operations by our advanced columns on the 20th state two large enemy columns containing tanks and guns were successfully engaged near EL KARRUBA, two field guns and much M.T. destroyed, Continuous stream of abandoned M.T. and equipment reported on line of advance of our armoured force from MEKILL. Many prisoners captured. 22nd. There are indications that the enemy, mainly Italian, may try to hold the area EL ABIAR-BENGHAZI. The majority of the Germans are believed to be further south in the JEDABYA area and most of their air forces seem to be operating from south west of SOLUK. In the north our advance on BARCE continue and also on BENGHAZI and the SOLUK area. NALAYA. 22nd. It is believed that enemy suffered heavy losses on GRIK road on the 21st where situation is now quiet. Nothing to report from other sectors. HONG KONG. Our forces continue to hold the north west of the Island and also STANLEY Peninsula in the south. On the 21st the enemy launched a determined attack from the East and have isolated our position at LITTLE HONG KONG where food and ammunition is stored. We are attacking the enemy rear from STANLEY but progress is slow and our forces are showing signs of exhaustion, RUSSIA. The Russians are continuing their offensive on the MOSCOT front and in particular are making strong attacks in the area between VERNHOE and TIM (forty-five miles East of KURSK). (III) AIR OPERATIONS 22nd, Hudsons reported hits on a 2,500 ton merchant vessel and a 6,000 ton tanker off NORNAY. 22nd/23rd. 22 bombers of which ten R.C.A.F., were sent to WILHELM- SHAVEN, all returned safely. Enemy activity in United Kingdom area was negligible. LIBYA. 21st. Our fighter Sweete over a wide area met no hostile aircraft. An enemy bember WILS shot down in the Gulf of BCMBA, 151 -2 21st/22nd, Wellingtons attacked TRIPOLI (L) aerodrome destroying at least seven dispersed aircraft and damaging others besides buildings and hangers. Three 4,000 pound bombs were dropped in the M.T. dispersal area and large fires ere started, KALAYA. 22nd. Two enomy raids by a total of eighteen fighters were made on KUALA LUMPUR aerodrome. One enemy aircraft was destroyed, three of fighters are missing and one crashed, three pilots safe. Three Dutch fighters were reported missing on the same day and a fourth crashed. SIAM. 21st. Our fighters from BURBA destroyed seven aircraft on an enemy aerodrome. HONG KONG. 20th. Three Chinese bombers escorted by six fighters were seen dive bombing the Japanese north of KOWLOON. (IV) BORNEO The Japanese are reported to be improving the aerodrome at MIRI, (v) FRANCE A convoy of some twenty merchant shipe to be escorted by warships is reported to be forming at CASABLANCA for MARSEILLES. Such a convoy is about four times the usual size for this route. 152 Copy No. 14 BRITISH MOST SECRET (U.S. SECRET) OPTEL No. 48 HONG KONG. Situation up to 5 p.m. 23rd December, During previous 24 hours enemy kept up incessant attacks and local raids accompanied by intensive hombardments by artillery mortars and dive bombers, Some ground on MOUNT CAMERON lost during night was recaptured early in morning by party Royal Marines. In afternoon Middlesex at LEIGHTON HILL beat off determined attack, Position generally unchanged, Troope very tired. Enemy in possession of Indian Military hospital but reported behaving well towards wounded, Water position in city and peak most precarious as principal reservoirs are in enemy hands, and pipe lines from others damaged. Strenuous efforts being made to improve position food supplies greatly reduced by enemy action. Health civilian population remarkably good and conduct admirable. Civil defence services run very well. Civilian casualties about 4,000 of whom possibly 1,000 killed. Copy No. 153 BRITISH MOST SECRET (U.S. SECRET) OPTEL No. 47 Following is supplementary resume of operational events covering the period 11th - 18th December, 1941. (I) NAVAL An Italian battlefleet was at sea covering convoys to North Africa, British and Russian submarines had several successes in the Mediterranean and in Northern waters. A Canadian destroyer suffered considerable damage from heavy weather South of ICELAND on 14th. There was little U-boat activity during the period and the general trend of submarine movements to the Mediterranean seem to have continued. A number have passed Gibraltar and there are indications that several may have turned back after having been attacked and damaged. The Japanese losses in the Far East are believed to be one battleship sunk and two damaged in addition to casualties to light craft and transports. Shipping losses have been light although little information from the Far East of Mercantile losses has yet been received. It is known that some British ships have been seized by the Japanese who claim to have captured 120,000 gross tons. TRADE. During the week ending 17th December 998 ships were con- voyed. Imports into the U.K. during the week ending 13th December totalled 1,043,000 tons and included 350,000 tons of tanker imports. (II) MILITARY LIBYA. The enemy forces now much disorganized and consisting of the remnants of the 3 armoured divisions, 2 Italian motorised divisions, and not much more than 2 Italian Infentry Divisions, have retreated Westwards from the DERNA-MEKILI line towards BENGHAZI, where defensive works are reported to be in course of construction, The task of the British Forces is to create confusion among the enemy's troops and prevent him rallying, though the extension of our lines of communication is presenting administrative difficulties in pressing home our advantage. For the enemy also the supply question is acute, and even if fresh convoys succeed in reaching him through BENGHAZI he is likely to have difficulty in stabilising fresh defensive positions East of that town, JAPAN. The gravity of the situation in MALAYA is mainly due to the fact that the enemy, already some 4 divisions in strong th with at least 150 tanks, is able to disembark reinforcements in Southern STAM (chiefly at SINGORA and PATANI) unhindered from the air. In the whole Far Eastern theatre the enemy has at present the great advantage of being able to move his forces in comparative -- 154 freedom from one front to another. The chief factors influencing Japanese stratogy at present appear to be (A) time, (B) the attitude of RUSSIA, JAPAN must obtain quick results in view of her difficult economic situation and the inevitability of defeat, if the UNITED STATES and ourselves are given time in which to build up our strong th against her. She is also anxious not to start another front in the North, whilst fighting is still in progress on the Southern and CHINA front. It therefore appears that after the initial phases of the war are over, the position of JAPAN, who has now been at par for over four years in CHINA, will become precarious if operations are opened on her Northern front, and if there is sufficient time for the UNITED STATES and ourselves to strengthen our military position in the FAR EAST. BURMA. C. in C. INDIA included BURMA in his Command as from 15th December. RUSSIA. The Germans in their retreat are suffering heavy casualties and loss of equipment and it is clear that in some sectors they are being severely haressed and prevented from withdrawing according to plan. Particularly Northwest of MOSCOW, where they have lost KALININ and in the TULA sector, where they had to fall back 60 miles, In the South they still hold TAGANROG and have not retired West of the River MIUS. There is no evidence that any divisions have yet been pulled out for refitting. (III) AIR OPERATIONS UNITED KINGDOM. A slight improvement in the weather enabled our night bombing to be resumed on a fairly heavy scale. BREST was attacked on six nights by a total of 167 aircraft which dropped 277 tons of H.E. Although intense darkness and efficient smoke screens prevented accurate bombing results appeared hopeful, It is estimated that about 13,000 tons of enemy shipping were sunk or damaged by our aircraft. MEDITERRANEAN. In spite of sandstorms and inferior weather con- ditions the retreating enemy was given no respite. By day, our light bombers and fighters helped our ground operations by directing frequent and intense attacks chiefly upon M.T. concentrated and retiring on roads and on aerodromes, Since the enemy had lost at least six forward aerodromos, there was a certain amount of congestion on those in the BENGHAZI area, Full advantage was taken of this situation by our bombers and fighter-bombers, Transport aircraft flying between CRETE and DERNA to relieve the difficult sea route, were also the object of special attack. Heavy night-bombing raids were directed upon the main ports used by the enemy both in AFRICA and Southern ITALY. Our aircraft sank or damaged about 15,000 154 freedom from one front to another. The chief factors influencing Japanese stratogy at present appear to be (A) time, (B) the attitude of RUSSIA. JAPAN must obtain quick results in view of her difficult economic situation and the inevitability of defeat, if the UNITED STATES and ourselves are given time in which to build up our streng th against her. She is also anxious not to start another front in the North, whilst fighting is still in progress on the Southern and CHINA front. It therefore appears that after the initial phases of the war are over, the position of JAPAN, who has now been at war for over four years in CHINA, will beocto precarious if operations are opened on her Northern front, and if there is sufficient time for the UNITED STATES and ourselves to strengthen our military position in the FAR EAST. BURMA. C. in C. INDIA included BURMA in his Command as from 15th December. RUSSIA. The Germans in their retreat are suffering heavy casualties and loss of equipment and it is clear that in some sectors they are being severely harassed and prevented from withdrawing according to plan. Particularly Northwest of MOSCOW, there they have lost KALININ and in the TULA sector, where they had to fall back 60 miles, In the South they still hold TAGANROG and have not retired West of the River MIUS. There is no evidence that any divisions have yet been pulled out for refitting. (III) AIR OPERATIONS UNITED KINGDOM. A slight improvement in the weather enabled our night bombing to be resumed on a fairly heavy scale. BREST was attacked on six nights by a total of 167 aircraft which dropped 277 tons of H.E. Although intense darkness and efficient smoke screens prevented accurate bombing results appeared hopeful. It is estimated that about 13,000 tons of enemy shipping were sunk or damaged by our aircraft, MEDITERRANEAN. In spite of sandstorms and inferior weather con- ditions the retreating enemy was given no respite. By day, our light bombers and fighters helped our ground operations by directing frequent and intense attacks chiefly upon M.T. concentrated and retiring on roads and on aerodromes. Since the enemy had lost at least six forward aerodromes, there was a certain amount of congestion on those in the BENGHAZI area, Full advantage was taken of this situation by our bombers and fighter-bombars. Transport aircraft flying between CRETE and DERNA to relieve the difficult sea route, were also the object of special attack, Heavy night-bombing raids were directed upon the main ports used by the enemy both in AFRICA and Southern ITALY. Our aircraft sank or damaged about 15,000 155 tons of Axis shipping. The German Air Force kept up a large scale effort although the activity of his dive bombers noticeably decreased, probably owing partly to losses and partly to supply difficulties. JU 88's concentrated mainly on frontline target so attacks on back area and communications were rare. German single engined fighters were employed to the utmost. Many ME 109's were shot down but, generally speaking, the German single engined fighters had been handled well, FAR EAST. During the period 7 to 17th a total of seventeen enemy aircraft are known to have been destroyed in KALAYA, of which 13 are claimed by A.A. guns, RUSSIA. On the whole of the Central Sector, the German Air Force supply situation appears adequate for the present requirements of the reduced Air Forces in this area, In the South, Russian pressure appears to be heaviest in the DONETS BASIN but German Air Force commitments in support of operations in the CRIMEA and TAGANROG localities probably prevent them furnishing a sufficient Air Force to cover operations further North. It is thought that for some time the supply situation in the whole area East of the DNIEPER BEND has been acute and probably accounts for the failure hitherto to maintain an intensive scale of activity. (IV) BOULOG NE. On 12th/13th October, 3 barges loaded with fuel oil and 5 motor torpedo boats were sunk in the harbour. Some submarine shelters were damaged. 24 bombers sent. 36 tons dropped. (v) HOME SECURITY Estimated civilian casualties for week ending 0600/17. None killed, four seriously wounded. 156 BRITISH EMBASSY WASHINGTON, D.C. December 26th, 1941 PERSONAL AND SECRET Dear Mr. Secretary, I enclose herein for your personal and secret information copies of the latest reports received from London on the military situation. Believe me, Dear Mr. Secretary, Very sincerely yours, (For the Ambassador) R.I. Campbell The Honourable Henry Morgenthau, Jr., United States Treasury, Washington, D. C. COPY 100. 13 BRITISH MOST SECRET 157 U.S. SECRET. 25th December, 1941. OPTEL No. 49 Information received up to 7 .... " December, 1941. 1. NAVAL Reconnaissionce of BREST yesterday showed that the GNEISENAU had left drydock and gone to 453 torpedo but station. SCHARNHORST and FRINZ EUGEN were still in dock. The Dutch submarine 0.16 which sank four Japanese troopships on the 12th, blem up after entering one of our minefields on her way to SINGAPORE, on the 12th. A 6500 ton Russian Tanker was torpedoed and sunk near the Derdanelles on the 10th. A small Belgian Merchant vessel and a medium sized Greek ship were both sunk by mines off the East Coust on the 23rd and 22nd respectively, and on the 23rd a Greek ship of similar size 188 mined off YARMOUTH and has been beached. A small Britich Merchant ship tras sunk by U-Hoat East of TOBRUK yesterday. 2. MILITARY LIBYA On the night 21/22nd E long range desert patrol destroyed 37 enemy aircraft at JEDABYA. On 22nd our patrols harassed enemy infantry and columns of M.T. in the area Eurt end South of SOLUM. After driving off a German force of 35 tanks and 150 H.T. they captured ANTELAT. In the North our Column directed on BENGHAZI continued its advance "est of EL KARRUBA, 500 prisoners have been taken in this area. On 23rd an enemy column near MAGRUN 45 miles South of BENGHAZI TAB engaged and retreated in disorder leaving fifty German prisoners. Enemy reported destroying aircraft on MAGRUN aerodrome. A total of 92 German and 53 Italian M.13 tanks had been destroyed cr found destroyed by R.E. up to 13th. Enemy still appears to be trying to hold BENGHASI until he has evacuated more equipment and stores. Our advance has been delayed owing to bad going and maintenance difficulties. These are not being overcome and every effort is being directed togards preventing the enemy escaping and then destroying him. MALAYA. 23rd, North West, our forces now hold the line of the PERAK River. North Fast, our forces from KELANTAN have been withiram to the RAUB-BENTONO area. The enemy's line of advance is limited to a single railway and there is no information as yet of any pressure. 158 -2JAPANESE FORCES. It has been reported that mobilisation of ten not divisions has been taking place in Japan since the 15th. This ill bring the total strength up to 72 divisions which it is believed is the maximum that Japan can equip and maintain. Reports indicate that Japanece are employing in the PHILIPPINES about 55000 to 60,000 on LUZON and about 20,000 on MINDANAO. RUSSIA The Russians are increasing their pressure in the LENINGRAD Sector. North West of MOSCO the Germans have been forced back for a con- siderable distance to the West of the KALINIH - MCSCO: Railway. 3. AIR OPERATIONS WESTERN FRONT 22nd/23rd. 21 tons of H.E. and 1,800 incendiaries vero dropped on WILHELISHAVEN. The town WAS identified in spite of much cloud and bursts were seen in the target area. 23rd. A Sunderland probably hit with bombs a 12,000 ton tanker off CAPE FINISTERRE. 23rd/24th. 145 aircraft were sent out COLOGNE 69, BREST 47 Secamminin. Two crashed on return. About 48 enemy aircraft were operating against thin country. MEDITERRANEAN LIBYA. MAGRUN landing ground was heavily bombed on 21st/22nd and on the following day. At least six enemy aircraft were destroyed and others damaged. Our fighters attacked about 25 aircraft :hich term landing and taking off destroying nine of them. Hurricanes attacked Southbound troop carrying vehicles on the JEDABYA - EL AGHEILA Road and Blenheims bombed Testbound M.T. between SIRTE and MISURATA. Lany vehicles were des- troyed or damaged and heavy casualties were inflicted on troops. 22nd/23rd Nine aircraft from Malta bombed TRIPOLI (L) serodrome. FAR EAST RANGOON had its first air raid en the 23rd. A military report states that four enemy aircraft are believed to have been shot down. KALAYA 23rd. Several bombing and machine gun attacks were made by enemy aircraft on IPOH and the PONTOON Bridge over the PERAK Fiver. A petrol dump and amountion train were destroyed at IPOH. BORNEO. Dutch and British aircraft reported on 23rd at least two enemy cruisers, three destroyers and ten transports moving in the direction of KUCHING. Copy No. 13 159 BRITISH MOST SECRET (U.S. SECRET) OPTSL No. 50 Information received up to 7 s.m., 25th December, 1941. (I) NAVAL HOND KONG. One of H.M. Gun Boats was sunk by dive-bombing on the 21st, (II) MILITARY LIBYA. Our troops captured BENINA and REGIMA on the afternoon of the 23rd and occupied BENGHAZI on the morning of the 24th, On the evening of the 23rd 74th Indian Division occupied BARCE after overcoming some resistance about five miles to the East. Our operations in SOLUK area and the occupation of BENGHASI seem to have separated the German and Italian forces and little fight is left in the latter. Further South on the afternoon of the 23rd a fairly large German force, after making a determined stand at ANTELAT, was withdrawing South West having suffered much damage and a heavy loss of vehicles. Strong columns have been directed upon JEDABYA and steps taken to out the road between JEDABYA and EL AGHEIIA, MALAYA. 24th. PERAK, No ground contact. Our forward troops were dive bombed constantly during 23rd/24th and on 24th bombing was haphazard and few casualties resulted. Other sectors nothing to report. SARAWAK. Large enemy concentrations:off SADONG and landings being attempted. KUCHING aerodrome denied and all denial schemes completed 24th, HONG KONG. On the afternoon of the 24th fighting was continuing with undiminished intensity along the same line as previous night. A slight enemy penetration in the central sector towards MOUNT CAMERON was being contained by our troops. Enemy bombardment of our positions from aircraft mortars and artillery of all calibres continues. Position substantially unchanged. (III) AIR OPERATIONS 23rd/24th, BREST, 72 tons of H.E. were dropped and bursts were seen across the docks but the smoke screen prevented detailed observation. COLOGNE. 60 tons of H.E. and over 6,000 incendiaries were dropped on the estimated position of the town over which heavy cloud conditions were met, 13 R.C.A.F. and 7 R.N.Z.A.F. aircraft took part in the night's operations, One New Zealand aircraft crashed, one killed and five injured. 24th. The large tanker, attacked and probably hit by an Australian Sunderland, was again picked up by a Sunderland and was steaming at about 12 160 -2knots with a slight list and escorted by a JU 88. At 9.15 a.m. 24th after engaging the JU 88, Sunderland attacked in face of heavy A.A. fire. At 10.30 a.m. the tanker was again sighted at ORTIGUEIRA Harbour where she was attacked the same afternoon by a Beaufort and hit amidships with one torpedo. The ship was finally beached. One Hampden attacked one of the battle cruisers at BREST and dropped a heavy weight bomb in the target area. MEDITERRANEAN. 23rd. Marylands attacked a landing ground West of EL AGHEILA and Tomahawka destroyed 8 aircraft on the ground at MAGRUN, Hurricanes destroyed a petrol lorry and 8 other lorries on the road West of EL AGHEILA. Little enemy M.T. movement was reported East of this place. 23rd/24th. 7 Wellingtons successfully attacked barracks and M.T. parks at MISURATA, A nuisance raid lasting 10 hours was made on TRIPOLI (L). Enemy aircraft attacked MALTA without causing serious damage and were suspected of mine laying. On the 24th four JU 88's with heavy fighter escort twice attacked MALTA Harbour, One bomb hit a merchant vessel and one of H.M. ships was slightly damaged. Three JU 88's were destroyed and another probably destroyed by A.A. and fighters. One Hurricane is missing. FAR EAST. MALAYA, 23rd. One of our aircraft attacked PATANI aerodrome where about 100 enemy aircraft had been located. BORNEO. 24th, Five Blenheims attacked an enemy force off KUCHING and obtained one hit on a transport and six near misses. A heavy enemy attack on SINKATIANG aerodrome rendered it unserviceable but no aircraft were destroyed. BURMA. Further reports of air raids on RANGOON on 23rd indicate that of 60 Japanese bombers escorted by fighters 10 aircraft were shot down for the loss of three from air Volunteer Group Squadron. One pilot is safe. The R.A.F. had no casualties. Unconfirmed estimates of casualties give 400 persons killed. Anti=personnel bombs were largely used and damage to the Harbour was slight. 161 INFORMATION BULLETIN MILITARY INTELLIGENCE DIVISION No. 4 MID 461 WAR DEPARTMENT Washington, December 26, 1941 NOTICE The information contained in this series of bulletins will be restricted to items from official sources which are reasonably confirmed. This document is being given an approved distribution, and no additional copies are available in the Military Intelligence Division. For provisions governing its reproduction, see Letter TAG 350.05 (9-19-40) M-3-M. EMPLOYMENT OF GERMAN ANTITANK REGIMENT ON NON-TANK MISSIONS SOURCE This bulletin is based on a report submitted by an American official observer in Berlin. The translated article originally appeared in the Militar Wochenblatt, a semi-official German military journal. CONTENTS 1. INTRODUCTION 2. AN ANTITANK COMPANY IN ACTION 3. COMMENTS BY OFFICIAL OBSERVER 162 EMPLOYMENT OF GERMAN ANTITANK REGIMENT ON NON-TANK MISSIONS L. INTRODUCTION The regimental antitank company, the 14th Company in the German infantry regiment, is composed of four platoons. Each platoon has three antitank-gun squads and a light machine-gun squad. During the Campaign in the West in 1940, antitank units were equipped with the familiar 37-mm. gun. It is believed that this weapon is being replaced by the 50-mm. antitank gun. Current newsreels and published photographs of the Russian Campaign show both the 37-mm. and the 50-mm. weapons in action. All German antitank units are motorized, and the weapons are normally towed by motor vehicles. In combat, however, as the article translated below indicates, situations occasionally arise which necessitate the movement of regimental antitank guns by other means, such as man power or horse power. When German assault infantry regiments are not threatened by hostile tanks, the weapons in the antitank companies of these regiments are frequently used to supplement the fire of infantryaccompanying guns. The action described in this article indicates how regimental antitank weapons have been used on non-tank missions. 2. AN ANTITANK COMPANY IN ACTION "Prior maneuvers and combat firing exercises had given us confidence in our antitank guns, and our faith in these weapons increased after our first few days of actual combat experience. "Early on June 20, 1940, we finally approached the enemy, who was methodically covering his retreat to the south with heavy and well-aimed artillery fire. The east bank of the Meurthe at Flin had been in our possession since early in the morning and our mission was to force a crossing over the Meurthe, and then to attack and pursue the defeated forces. In spite of the strong artillery fire, which was intended to prevent us from crossing the river, and the destroyed bridge, we reached the other side with our small arms, often wading through water up to our hips. The advanced elements of our regiment quickly occupied the outskirts and the exits of the village. Reconnaissance was immediately started by patrols from the bicycle company and the regiment and we were ordered to attack hostile units which had obtained a footing and were offering tenacious resistance at a point 2 miles south of Flin. As the regiment prepared to attack, we moved our antitank weapons to the crest of a ridge. At first, strong hostile machine-gun fire prevented us from crossing this ridge, and in spite of all our efforts it was impossible to discover the exact location of the enemy's resistance nests. "There were apparently 2 heavy machine guns directly south -1- 163 of us at a range of about 1500 yards, and some others had been brought into position at the edge of the woods to our right. Before we could safely carry out the attack, these weapons had to be put out of action. We fired about three rounds from each anti- tank gun into the suspected machine-gun positions, and the regimental infantry-accompanying guns also fired on these targets. Presently the fire coming from the south subsided, but it continued from the woods on our right and from the heights on our right front. As the attack progressed, our infantrymen on the left advanced at a good pace, and the word was passed around: 'Antitank guns, keep up close--continue advancing.' "Our motor vehicles were not available because they were unable to cross the Meurthe until the pioneers had built a bridge. The terrain sloped slightly to the south, however; we advanced without difficulty, towing our guns by hand and carrying our ammu- nition the same way. The machine-gun and rifle fire on the right ceased after the infantry on our right flank penetrated the woods. "The advance continued without complications in the direction of Domptail, and our assault elements were soon out of sight. With much exertion on the part of the gun crews we crossed the ridge quickly. After we had proceeded about 500 yards, the projectiles began whizzing over our heads and striking in the farmyard behind us. We had already learned that rapid, uninterrupted advance is the best protection against hostile artillery fire. "We covered the 3 miles to Domptail without our motor vehicles. One crew, however, found a horse and used it to tow their gun. Other crews attached theirs to passing motorcycles, and one gun was towed by an abandoned French tank. "Then the assault elements entered Domptail, they were met with heavy fire. Consequently, we rushed forward with our guns to assist our endangered comrades. After passing the first few houses, we too were greeted with deadly fire. The men from the rifle companies were forced to go into shelter, while we sought protection behind the shields of our antitank guns. One house after the other was taken under fire by our guns, which always used an antitank projectile first* and foIlowed with an H.E. shell. Gradually the hostile fire subsided. "The infantrymen followed on either side of the street and cleared the houses systematically. At a turn in the street we began firing again, presuming that it was safe to advance. A hostile machine gun opened up, however, and wounded five men, one mortally. It was impossible to determine the exact location of the machine gun, but we suspected it to be in one of two houses down the street on our right. Consequently, we fired six H.E. shells into each of them. When one house began to burn, the *Probably to determine accuracy by means of tracer. G-2. -2- 164 machine gun ceased firing and we renewed the advance. In accordance with combat-proven procedure, the infantrymen, protected by the walls, advanced on both sides of the street and searched all the houses. The machine gun was discovered in a cellar entrance, camouflaged with branches to make it invisible from the street. A few hand grenades silenced the snipers firing from the roofs. "After an hour and a half, the village was completely in our hands. Clouds of smoke rising into the sky and burning houses gave evidence of the bitter struggle. We antitank men were proud that we had been able to give such excellent assistance to our comrades in the rifle companies." 3. COMMENTS OF OFFICIAL OBSERVER a. Although the German antitank gun is normally towed by a motor vehicle, gun crews are frequently required to move their weapons for considerable distance by hand. In the action described in the above article, guns were moved at least 5 miles without the assistance of their normal prime movers. b. Although the primary mission of antitank weapons is to combat tanks, some current German training pamphlets (for example, Das Kommandobuch by Colonel Reygendorf, published in 1941) state that in special situations, such as combat in villages, antitank guns are especially effective in subduing hostile strong points. Naturally, such employment is recommended only in the absence of a hostile tank threat. C. It is logical for the Germans to take advantage of the mobility, fire power, and the limited arrier protection of their regimental antitank weapons to use then against ground targets checking the advance of assault units. They believe it is an inefficient use of available material to have such wcapens and their crews remain idle during combat, if they can be used effectively against menacing hostile targets and if there is no threat from enemy tanks. The author's statement that his guns alternated antitank projectiles with H.E. shells when attempting to neutralize hostile fire coming from houses on a village street is noted with interest. Later, when the source of the hostile fire was localized to one of two buildings, he states that H.E. shells were used. -3- 165 INFORMATION BULLETIN MILITARY INTELLIGENCE DIVISION No. 4 MID 461 WAR DEPARTMENT Washington, December 26, 1941 NOTICE The information contained in this series of bulletins will be restricted to items from official sources which are reasonably confirmed. This document is being given an approved distribution, and no additional copies are available in the Military Intelligence Division. For provisions governing its reproduction, see Letter TAG 350.05 (9-19-40) M-B-M, EMPLOYMENT OF GERMAN ANTITANK REGIMENT ON NON-TANK MISSIONS SOURCE This bullotin is based on a report submitted by an American official observer in Berlin. The translated article originally appeared in the Militär Wochenblatt, a somi-official German military journal. CONTENTS 1. INTRODUCTION 2. AN ANTITANK COMPANY IN ACTION 3. COMMENTS BY OFFICIAL OBSERVER 166 EMPLOYMENT OF GERMAN ANTITANK REGIMENT ON NON-TANK MISSIONS 1. INTRODUCTION The regimental antitank company, the 14th Company in the German infantry regiment, is composed of four platoons. Each pla- toon has three antitank-gun squads and a light machine-gun squad. During the Campaign in the West in 1940, antitank units were equip- ped with the familiar 37-mm. gun. It is believed that this weapon is being replaced by the 50-mm. antitank gun. Current newsreels and published photographs of the Russian Campaign show both the 37-mm. and the 50-mm. weapons in action. All German antitank units are motorized, and the weapons are normally towed by motor vehicles. In combat, however, as the article translated below indicates, situations occasionally arise which necessitate the movement of regimental antitank guns by other means, such as man power or horse power. When German assault infantry regiments are not threatened by hostile tanks, the weapons in the antitank companies of these regiments are frequently used to supplement the fire of infantryaccompanying guns. The action described in this article indicates how regimental antitank weapons have been used on non-tank missions. 2. AN ANTITANK COMPANY IN ACTION "Prior maneuvers and combat firing exercises had given us confidence in our antitank guns, and our faith in these weapons increased after our first few days of actual combat experience. "Early on June 20, 1940, we finally approached the enemy, who was methodically covering his retreat to the south with heavy and well-aimed artillery fire. The east bank: of the Heurthe at Flin had been in our possession since early in the morning and our mission was to force a crossing over the Meurthe, and then to attack and pursue the defeated forces. In spite of the strong artillery fire, which was intended to prevent us from crossing the river, and the destroyed bridge, we reached the other side with our small arms, often vading through water up to our hips. The advanced elements of our regiment quickly occupied the outskirts and the exits of the village. Reconnaissance vas immediately started by patrols from the bicycle company and the regiment and we were ordered to attack hostile units which had obtained a footing and were offering tenacious resistance at a point 2 miles south of Flin. As the regiment prepared to attack, we ;moved our antitank weapons to the crest of a ridge. At first, strong hostile machine-gun fire prevented us from crossing this ridge, and in spite of all our efforts it was impossible to discover the exact location of the enemy's resistance nests. "There were apparently 2 heavy machine guns directly south -- 167 b. of us at a range of about 1500 yards, and some others had been brought into position at the edge of the woods to our right. Before we could safely carry out the attack, these weapons had to be put out of action. We fired about three rounds from each anti- tank gun into the suspected machine-gun positions, and the regimental infantry-accompanying guns also fired on these targets. Presently the fire coming from the south subsided, but it continued from the woods on our right and from the heights on our right front. As the attack progressed, our infantrymen on the left advanced at a good pace, and the word was passed around: 'Antitank guns, keep up close--continue advancing.' "Our motor vehicles were not available because they were unable to cross the Meurthe until the pioneers had built a bridge. The terrain sloped slightly to the south, however; we advanced without difficulty, towing our guns by hand and carrying our ammunition the same way. The machine-gun and rifle fire on the right ceased after the infantry on our right flank penetrated the woods. "The advance continued without complications in the direction of Domptail, and our assault elements were soon out of sight. With much exertion on the part of the gun crews we crossed the ridge quickly. After we had proceeded about 500 yards, the projectiles began whizzing over our heads and striking in the farmyard behind us. We had already learned that rapid, uninterrupted advance is the best protection against hostile artillery fire. "We covered the 3 miles to Domptail without our motor vehicles. One crew, however, found a horse and used it to tow their gun. Other crews attached theirs to passing motorcycles, and one gun was towed by an abandoned French tank. "Then the assault elements entered Domptail, they were met with heavy fire. Consequently, we rushed forward with our guns to assist our endangered comrades. After passing the first few houses, we too were greeted with deadly fire. The men from the rifle companies were forced to go into shelter, while we sought protection behind the shields of our antitank guns. One house after the other was taken under fire by our guns, which always used an antitank projectile first* and foIlowed with an H.E. shell. Gradually the hostile fire subsided. "The infantrymen followed on either side of the street and cleared the houses systematically. At a turn in the street we began firing again, presuming that it was safe to advance. A hostile machine gun opened up, however, and wounded five men, one mortally. It was impossible to determine the exact location of the machine gun, but we suspected it to be in one of two houses down the street on our right. Consequently, we fired six H.E. shells into each of them. When one house began to burn, the *Probably to determine accuracy by means of tracer. G-2. -2- 168 machine gun ceased firing and we renewed the advance. In accordance with combat-proven procedure, the infantrymen, protected by the walls, advanced on both sides of the street and searched all the houses. The machine gun was discovered in a cellar entrance, camouflaged with branches to make it invisible from the street. A few hand grenades silenced the snipers firing from the roofs. "After an hour and a half, the village was completely in our hands. Clouds of smoke rising into the sky and burning houses gave evidence of the bitter struggle. We antitank men were proud that we had been able to give such excellent assistance to our comrades in the rifle companies." 3. COMMENTS OF OFFICIAL OBSERVER a. Although. the German antitank gun is normally towed by a motor vehicle, gun crews are frequently required to move their weapons for considerable distance by hand. In the action described in the above article, guns were moved at least 5 miles without the assistance of their normal prime movere. b. Although the primary mission of antitank weapons is to combat tanks, some current German training pamphlets (for example, Das Kommandobuch by Colonel Reygendorf, published in 1941) state that in special situations, such as combat in villages, antitank guns are especially effective in subduing hostile strong points. Naturally, such employment is recommended only in the absence of a hostile tank threat. C. It is logical for the Germans to take advantage of the mobility, fire power, and the limited arrior protection of their recimental antitank weapons to use then against ground targets checking the advance of assault units. They believe it is an inefficient use of available material to have such weapons and their crews remain idle during combat, if they can be used effectively against menacing hostile targets and if there is no threat from enemy tanks. The author's statement that his guns alternated antitank projectiles with H.E. shells when attempting to neutralize hostile fire coming from houses on a village street is noted with interest. Later, when the source of the hostile fire was localized to one of two buildings, he states that H.E. shells were used. -3- 169 RESTRICTED M.I.D.,W.D. G-2/2657-220; No. 581 11:00 A.M., December 26, 1941. SITUATION REPORT I. Pacific Theater. Philippines: In the north fighting continues in the general areas previously reported upon. Enemy air activity continues. The situation in the south is obscure. According to the press, General MacArthur has declared Manila an open city. Hawaii: No further reports of enemy activity have been received. Malaya: Fighting continues along the Perak River in the west. The Japanese have been bombing British communications in that sector. In the east the British have withdrawn slightly without contact. Hong Kong: The press reports that the British Colonial Office has confirmed the fall of Hong Kong. Borneo: The Dutch claim new naval successes off Sarawak. Japanese have conducted air raids on Singkawang (southwest coast) and Tarakan (northeast coast). West Coast: No further reports of hostile action. II. Eastern Theater. There is no indicated change on the Russian front. Both sides report hard fighting in the Moscow area. The Germans continue to hold the line: Orel-Kursk-Kharkov. III. Western Theater. Air: No reports on British offensive action. On the night of December 24, German Air Force sent out several planes and a number of long range bombers, but only one of these aircraft was seen inland over Great Britain. IV. Middle Eastern Theater. Ground: With the fall of Bengasi on December 24, control of Cyrenaica virtually passed into British hands. Groups of isolated Italian troops remain in Cyrenaica, but the remainder of General Rommel's Armored Forces are endeavoring to break through to Tripolitania via Agedabia, where the British are pressing the retreating forces. Inclement weather continues to hamper the R.A.F. and British Lotor Transport. Air: It has been reported that a number of German planes were destroyed on the ground by Axis forces before their evacuation of Bengasi. Numerous Axis aircraft at Agheila airdrome were reported grounded by fuel shortage. British bombers carried out a nuisance raid of several hours' duration on Tripoli. RESTRICTED 170 PARAPHRASE OF A SECRET SECRET MESSAGE RECEIVED AT WAR DEPT. (a. m. at 4:30 December 27 . 194.1 (Classification Stemp) } From Cairo Filed 9:10 p.m. December 27 . a.m. Received in I.B. 22:15 BOTH p.m. December 26 , 1941 194_1 No 21 I For Arnold from Atkinson about your oable No. 198. (A.F. No. 540) The following troubles developed among the 4 B-17 C planos which reachod the Middle East on November 1, 1941. 1. Bombs hanging in rucks, which has been corrected by putting sleeves on British bombs and using American racks. 2. Bomb Joors failing to close when opened. Have not discovered reason. 3. Automatic piloting rudder control freezing, reason not known. 4. Gunny substance of self-sealing compount in fuel tank causing one engine to freeze. 5. Excess oil consumption by number 2 and 3 engines - up to 19 quarts - cause not determined. 6. Tachometer freezing - oil reaching generator with no drainage in oil system. 7. High oil and cylinder head temperatures. 8. Loss of ongine power - caused by exhaust manifold leakage. Three high-altitude daylight missions have been performed by these planes as follows: November 8: 2 planos, with a mission against Benghazi, a total distance of about 1240 miles. On their return one plane force landed because of lack of fuel about 200 miles short of none base in energy country. The plane and bomb sight were destroyed and the crew unhurt. The loss of I.B. No. 171 PARAPHRASE OF A SECRET CONFIDENTIAL RESTRICTED MESSAGE RECEIVED AT WAR DEPT. a. m. (p.m. (Classification Starp) a.m. p.m. Filed From I a.m. Received in I.B. p.m. 194 194 I at SECRET . 194 No. . the plane was attributed in large part to errors by the service crew and pilot. Its flying time WILLS 5 hours 55 minutes. November 14: One plane, Benchazi mission, approximately 720 riles and a time of 4 hours. November 19: One plane with Derna target, a mission of about 860 miles and 4 hours 25 minutes flying time. No additional missions have been executed until the excess con- sumption of oil is investigated. We are sending a surmary report. All planes were loaded with 8500 pounds of bombs and 1400 imperial gallons of fuel. FELLERS (0-2 Comment: This cable complies with direction of Deputy Chief of Staff for report summarizing operations, missions and performance of B-17 planes now in Ecypt.) Paraphrased by Captain Dean Rusk All copies informational. 21 1.B. No. mck Indicate distribution by check for one copy, by figure for more then one. Message center Indicate recipient of par- Scular copy by drawing circle. State WPD ONI GH Q OASW ASWA CAAF OCAO SW C/E USW ACS. 00 ACE, G-3 ACS, 0-4 I 6 2 9 Ch.18 MA FL X CIB X X BES Alr 5 WES SES CES EES LAS FES Armd. St. 2 WAR DEPARTMENT acsus DAD OLLA NA Mr. Curre Gen Arnold 2 RS Sec Treas JIC I X X Mission , 2 X X Classification Stamp SECRET 172 December 27, 1941 10:24 a.m. Harry White: got in touch with several other things, and everything's in the mill. I hope to get something by eleven o'clock. HMJr: The way I esked you this morning. W: That's right. EMJr: Now, what W: But I think I'd like to come in and see you five HMJr: minutes before you see them. That's all right. Since talking to you this morning, up to very recently the biggest users of trucks are the Russians. W: I have Mr. Gromyko right here. HMJr: On this thing? :: That's right. I'11 tell you why. HMJr: What? W: HMJr: W: I will explain to you why when I see you. Well, give him my regards. I'll do that. HMJr: Can he hear me? W: He can hear me. HMJr: But can he hear me? W: No. HMJr: Well, here's vodka in his eye. W: (Laughs) Okay. HMJr: All right. W: Good-bye. 173 December 27, 1941 10:29 a.m. HMJr: Hello. Operator: Mr. Swope. Hello. HMJr: Gerard Swope: Good morning. HMJr: This is Henry Morgenthau, Jr. S: Good morning, how are you? HMJr: Fine. How are you? S: Very well, and I hope you had a lovely Christmas. HMJr: I did, and I hope you did. S: HMJr: We did. Mr. Swope, I'm calling you up for this reason. I wonder if you would care to come down to Washington to talk with me about the possibility of coming down here to help me? S: HMJr: Well, that sounds very alluring. Well, I want to tell you what I have in mind. We have three departments in the Treasury where I need help. One is the Procurement section, where we're buying both for the Government and Lend-Lease and we're buying at about a rate of about a billion dollars a year. Hello. S: HMJr: Yes. And non-military goods. For instance, we buy all the steel for the Allies, all the copper, all the metals. We don't buy the oil - the Navy does that but all the non-military goods under Lend-Lease we buy. S: HMJr: Yes. They're trying to get me to buy more every day, and 174 -2I'm reluctant to take it on for fear that we won't be able to keep up our good record. (Laughs) S: HMJr: Then the second thing is the Bureau of Engraving, which I suppose is the biggest printing plant in the world. We employ sixty-five hundred men there, and we're having our troubles to print these bonds fast enough. You see, it's a big production job. And then we've got another manufacturing job in the Bureau of the Mint, where we make the hard money. S: Yes. HMJr: Well, all of these things are running fairly well; but what I hoped to get was somebody like yourself, with manufacturing experience, who could look the thing over and tell me where we're weak, where we have to strengthen ourselves. It's as big a business as any business in the country S: Yes. the three combined HMJr: S: HMJr: S: Yes. and that's what I had in mind, and I wanted to talk to you about it. Well, I'11 be glad, anyhow, to come and talk to you about it; and maybe suggest a better man. HMJr: No. Now, I talked to the President and he said he'd love to have you come down. S: HMJr: Is that so. Well, supposing I come down anyhow and talk to you and see what the thing is. Well, why don't - would you like to have lunch with me on Monday? S: I'11 have luncheon with you on Monday, yes. HMJr: In the Treasury. -3- 175 In the Treasury. S: HMJr: Yes. S: What time? HMJr: One o'clock. S: One o'clock. I'll be there. HMJr: S: HMJr: Well, that'11 be fine; and you be thinking about it, will you? I'11 be thinking about it too, yes. And - because I take it you're so situated that you could come down. S: Well, except that, of course, I'm Chairman of the New York City Housing Authority. HMJr: S: Yeah, but you've got no money up there. (Laughs) But we're still building. It's still an administrative job. Yes, you' re quite right about that. Anyhow, I'm coming down and talk to you and look over it with you. HMJr: S: HMJr: S: Will you do that? I'll be there at luncheon on Monday. Thank you SO much. And thank you for thinking of me, and a happy New Year to you and great success. HMJr: Well, I need help to make the success. S: Well, if I could help, I'll love to do it. HMJr: But this particular - particularly the buying of this non-military for the Allies is where we need the most help. S: I'll come anyhow and talk to you and just look over it. 176 HMJr: Thank you. S: Good-bye. HMJr: Good-bye. CONFIDENTIAL 177 December 27, 1941 MEMO ANDUM FOR THE SECRETARY'S FILES Conference in Secretary Morgenthau's Office December 27, 1941 11:15 a.m. Present: Secretary Morgenthau Messrs. Rubin and Swetz, Dodge Local--United Auto Workers Mr. White Mr. Swetz and Mr. Rubin called on Secretary Morgenthau at 11:15 Saturday morning. They explained to the Secretary that they represented the United Auto orkers local in the Dodge Plant, where 25,000 men were normally employed. They stated that 17,000 of these workers had been laid off last Thursday, and there were no prospects of their being reemployed, so far as they knew. They added that they were unable to get any definite information from the management as to when they might be reemployed, but had been told vaguely that there was something favorable in prospect. They said that they expected that the remaining 8,000 men would be laid off on February 1. They also stated that there were only 25 persons in the whole plant who were working on defense projects. This group had been working for many months on designing a gun. More recently, they said, there were a small number of tool and die workers working on some project which might possibly be a defense project, but they had no specific information about it inasmuch as the plant's management was reluctant to give them any information about such matters. They further stated that they thought that their plant could be adapted to making commercial trucks with very little change in machinery, and larger trucks with possibly 6 weeks or 2 months for retooling and readjustments, if only one shift of key men were em- ployed. If three shifts were employed, they thought the job of retooling could be completed within a month. They stated that their Local, not having any prospect of work, had in desperation sent themselves as representatives to Washington to see if they could get any help. They had made inquiry at the OPM and had learned from one of Mr. Brown's assistants that the Chrysler Corporation had $108 million of orders for tanks which were being produced in the tank factory which had been especially constructed for this purpose. In addition, the company had $8 million of contracts for other defense articles, but it had no more. OPM was unable to give them any definite information as to prospective or possible defense orders for Dodge. 178 -2- Division of Monetary Research The Secretary told them that he would see what he could do to help them, and telephoned Mr. Stettinius and explained to him very briefly the situation at the Dodge Plant, and asked him whether he did not have some trucks that he wanted. Mr. Stettinius replied that he did. The Secretary asked whether he could come over and discuss the matter with him and with the men from the Union. Mr. Stettinius said he could. Secretary Morgenthau pointed out the need for urgent action, and asked Mr. Stettinius if it would be possible to have a meeting immediately. Mr. Stettinius agreed to come to the Treasury for a conference at 12:15 p.m. 179 December 27, 1941 11:29 a.m. HMJr: Hello. Operator: Mr. Stettinius. HMJr: Hello. Edward Stettinius: Hello, Henry. HMJr: How are you? S: Good, sir; how are you? HMJr: All right. Ed, are you so you can talk a S: HMJr: minute or two? Yes, sir, I am. Ed, representatives of the union in the Dodge main plant at Detroit are here in the room with me now. S: Representatives of the union of the Dodge plant. HMJr: Yeah. S: Right. HMJr: Their complete manufacturing unit - they've got twenty-five thousand men, or did have, at work they laid off seventeen thousand last week. S: Right. HMJr: There are only twenty-five men on defense work. S: Twenty-five men on defense work. HMJr: Out of twenty-five thousand. S: Out of twenty-five thousand. Mrs S: Now, they could be converted very rapidly into 8 truck plant - it's a complete plant from foundry right up straight through. I know the plant very well. I've been there. 180 -2HMJr: Now, you need lots of trucks for Russia and other places We do. S: HMJr: and I wondered if you'd let me be helpful in this instance and see if we can't get for this plant enough work to keep these men busy, indefinitely. Right. I think it's a swell idea, and we'd be delighted to go along with you on it. S: HMJr: S: Well, now, they're here now. What can we do still today about it? Well, of course, the first thing we've got to do is to take these requisitions away from the War Department and give them to Treasury Procurement HMJr: I see. and turn the matter over to you. S: HMJr: Yes. That is, Lend-Lease to ask you to buy trucks rather than the War Department to buy trucks. S: That's the first major operation. HMJr: Well, how many have you got? Well, we have - about a month ago, Hillman got after Patterson and we gave them a clearance to go ahead with the truck orders. S: HMJr: Yeah. S: Now, I think the situation is, Henry, we'll have to go back and find out how many trucks the War Department have contracted for and then take the requisitions back from them and give them to you. That'11 take a little while to HMJr: figure out. How long do you think it would take? 181 -3Well, I might be able to do it - I could review the thing probably and cell you back in a little S: while. HMJr: Well, what I was thinking - do you work Saturday efternoons or not? Sure. Yes, sir. S: HMJr: What? Yessiree. Sundays, too. S: Jr: Do you think you could have the whole story together, maybe, by four o'clock? I think we can get it before that. How long S: are you going to be there now? HMJr: Well, I'm going to be here until one, or a quarter of one. Well, now, let me get some preliminary things S: and see if I can't call you back pretty quickly. HxJr: S: And Just hold the wire one second. Let me ask a question here in the room. HMJr: All right. S: Henry. HMJr: Yes. S: I can cell you back within a half an hour and give you some preliminary figures. HMJr: Fine. And then I'd like to get together with you S: We will. HMJr: S: on it today. I'd like you to meet these men. Are they going to be over there until noon? 4HMJr: 182 They can be. Well, now, let me round up these figures and I'11 call you back within twenty minutes; and then we can talk to do the next step. S: HMJr: And then might you have time to slip over? S: Sure. HMJr: What? S: Sure. HMJr: Who is your truck man? S: Well, General Spaulding has been handling that - the over-all truck thing - for us; but what we do when we get the requisition from the foreign government, why that goes to the War Department. The War Department, of course, actually makes the purchase, just like Mack does, you see. HMJr: S: I see. But we haven't got a truck specialist here in Lend-Lease. We'll get the - chances are that Oscar and I'll come over together. HMJr: Do you want - all right, that would be wonderful. S: All right, old boy. HMJr: And you'll call me and let me know before? S: I will call you back within twenty minutes. HMJr: That would be perfect. S: Right, fellow. 183 December 27, 1941 12:08 p.m. HMJr: Hello. Operator: Mr. Stettinius. HMJr: Hello. E. R. Stettinius: Henry. HMJr: Yes. S: I'm five minutes late. I tried to reach you through the White House wire, but it didn't answer. HMJr: Oh. S: Now, we're in a position to do business with you. HMJr: Come on over. S: All our - all the customers need trucks. HMJr: Yeah. S: The British, in their future requirements future estimates - are talking in terms of a hundred thousand and the Russians about fifty thousand. The concentration is between a quarter ton and two and a half ton. HMJr: S: HMJr: S: Yes. Now, we've got some money in a certain category, unallocated, that we can give you immediately. Wonderful. Now, the first thing we ought to do, though, is to have one of the Dodge men come and look at the requirements and see what truck he is in a position to make; and then we can go to town in a hurry. HMJr: Well, I agree with you; but - this is, if you 184 -2don't mind my saying so, good public relations to meet with these fellows. S: HMJr: You'd like us to come over. Well, I'll send them over to you if you'd rather have it. S: Well HMJr: Are you busy? S: No, we're all right here - Phil and Oscar and Joe Rowe and I are all in my office, and we can come over there, or we'll wait here until they get here. HMJr: Well, I'd like to talk to you. Is it asking too S: We'll come right over. HMJr: What? S: We'll be over there in ten minutes. HMJr: That'11 be wonderful. S: much if you came over? All right, old boy. CONFIDENTAL 185 December 27, 1941 MEMORANDUM FOR THE SECRETARY'S FILES Conference in Secretary Morgenthau's Office December 27, 1941 12:15 p.m. Present: Secretary Morgenthau Messrs. Rubin and Swetz, Dodge Local-United Auto Workers Messrs. Stettinius, Young, Cox, and Rowe--Lend-Lease Mrs. Klotz Messrs. White and Ullmann This conference had been arranged an hour previous over the phone by Secretary Morgenthau. The Secretary began the meeting by stating that he was very desirous of accomplishing two chief objectives: (1) to help to utilize the facilities of the Dodge Plant for production of trucks needed in the Lend-Lease program. (2) to get the 17,000 Dodge workers who were laid off last Thursday reemployed as quickly as possible on defense work. He asked Mr. Stettinius how he thinks they might proceed the most rapidly. Mr. Stettinius replied that the Lend-Lease did need some non- military trucks between 1/4 and 2-1/2 ton sizes. He stated that it was his opinion that the Dodge Plant could be rapidly converted within two or three weeks to producing trucks of the smaller sizes, that is 1/4 to 3/4 tons. He stated that Lend-Lease funds were available and that he had the discretion in the choice of agencies used to make the purchases and he would like to select the Treasury to place the orders. Mr. Morgenthau said that he would like to clear the matter with OPM. The question was raised by Mr. Cox as to whether or not some pro- cedure would not be violated if Dodge were singled out for this order. Mr. Morgenthau replied that he felt that the fact that 17,000 men are out on the street was sufficient reason to take any immediate action that is possible, but that he certainly wanted to call Mr. Knudsen and obtain his support and help. Mr. Morgenthau telephoned Mr. Knudsen, and told him that he wants to help his friend Stettinius and certainly wants to help those 17,000 186 -2- Division of Monetary Research men who are without work. He added that out of 25,000 men normally engaged in the Dodge plant, only 25 were working on defense work; and it appears that there is something wrong somewhere. After his telephone conversation, Mr. Morgenthau said that Mr. Knudsen had agreed that he would not stand in the way of the Treasury's doing what it could on this matter. Mr. Cox said that since it is Mr. Knudsen's job to allocate all orders, Knudsen's giving clearance to this matter indicates that the Army has not asked Knudsen to place any substantial orders with which this would interfere. Mr. Morgenthau then telephoned Mr. Keller (in Detroit) of the Chrysler Corporation. After this conversation, Mr. Morgenthau said that Mr. Keller had said that Dodge has some Army orders but that Chrysler might be able to squeeze this order in ahead of Army orders if the LendLease authorities were willing to accept standard light trucks. Secretary Morgenthau had asked Mr. Keller to come in with plans of the trucks it could produce. Mr. Keller had agreed to come into the Secretary's Office on Monday morning at 9:00 a.m. to bring plans and to discuss the matter. Mr. Morgenthau asked Mr. Stettinius if any of the Lend-Lease recipients needed small trucks. Mr. Cox and Mr. Stettinius replied that the smallest truck that the Russians want is 1-1/2 tons--larger than the ones discussed with Mr. Keller. However, the British want some small trucks, as light as 1/4 ton. Secretary Morgenthau suggested that Mr. Stettinius get in touch with the British and Russian purchasing agents over the week-end to determine whether their governments could use the standard commercial trucks in the lighter weights. Mr. Stettinius thought such a move should not be made until after the meeting with Keller. Mr. Morgenthau pointed out that it would save time if Mr. Stettinius could obtain some opinions on this point prior to the meeting--in order to talk more effectively with Keller. Mr. Stettinius agreed to get in touch with the British and Russians at once. It was agreed that Mr. Stettinius would attend the Monday morning meeting with Mr. Keller. Mr. Knudsen, by telephone, agreed to send Mr. Stevenson, head of the OPM Automotive Division, to the meeting. This meeting was terminated at 1:00 p.m. 187 December 27, 1941 12:35 p.m. Operator: Operator. HMJr: Get me Mr. Knudsen, will you? Operator: Right. HMJr: Hello. Wm. S. Knudsen: Yes. HMJr: Bill. K: Yes. HMJr: K: HMJr: This is Henry talking. Yes, sir. How are you? HMJr: Fine, sir. How are you? Bill, Ed Stettinius is on the phone here with me, and we have a couple of Union representatives from the Dodge main plant in Detroit here. K: Yes. K: HMJr: Now, Stettinius wants to ask Treasury Procurement whether we'll buy some trucks for Lend-Lease. Hello. And - small commercial trucks, he'11 tell you - and before I take this on, I'd like to feel that I've got your backing and can get your help. K: What size truck is it? E. R. Stettinius: It's concentrated between - chiefly - between a quarter ton up to two and a half. The Treasury Procurement have been buying commercial stuff for us that wasn't military specification in the past. K: How many involved? 188 -2 Well, that hasn't been determined. It will be - S: the British need many thousands in their new program, and also Ruesia; and we have available some funds to immediately allocate for this pur- pose. K: Isn't the Quartermaster Department supposed to place all of them? S: No. no. That's within our discretion as to what K: Uh huh. S: In other words, I have that decision whether I agency we ask to make these purchases. ask Quartermaster or Treasury Procurement to purchase the truck after I approve the requisition and appropriate the funds. K: S: I see. And I'm perfectly willing to - would be happy to allocate a given amount of money for a given number of trucks of two or three months production to this Dodge plant, for smell half ton or ton trucke. K: S: All right. And it's - as I say - it isn't military specifi- cation, it's a commercial item; and it 1 sn't anything that the Quartermaster should get his nose out of joint on. K: I see. Uh huh. HMJr: Well, Bill. Hello. K: Yes. HMJr: The thing - one of the principal things that interests me 18 they've got seventeen thousand men on the street without a job for over a week. K: Uh huh. HMJr: I mean, they've been there: and they think, 88 189 -3far as they know, the rest of them are going to be laid off. Uh huh. They wouldn't have the material for K: these trucks anyway, would they? HMJr: What? K: You wouldn't have the material for these trucks HMJr: Why not? K: Well, they wouldn't have them in stock, I don't anyway, would you? suppose. S: Well, they would for quarter ton and half ton. K: Uh huh. You see, a lot of the assemblies could go right into that, you see. They have to change the instrument board and the steering wheel and the fenders, but a lot of the basic stuff could be assembled that they've got in stock for S: passenger cars. K: Uh huh. S: Is that right? K: Well, I don't know. That depends upon what kind S: Yeah. K: of a truck it is. If it's a standard half ton with four-wheel drive, why then they wouldn't have. S: K: No, they wouldn't, no. So if it's a half ton, two-wheel drive, straight small truck S: K: Yeah. .....I haven't any objection to you placing that. 190 -4Yeah. S: If there's any four-wheel drive stuff in it, it K: ought to go through the Quartermaster Department, because they control the axles and the steering gear. Well, that's understood; anything of a military S: specification we'd buy through the War Department. K: Uh huh. Well, if you want to buy stock trucks, you can buy them from anybody you like as far as I'm concerned. S: Okay, old boy; that's the answer. K: Yeah. HMJr: Bill. K: Yeah. HMJr: Are you going to be here tomorrow? K: Yeah. HMJr: In town? K: Yeah. HMJr: Well, in case I can get hold of Keller or some- body to come down here and settle this tomorrow, could you give me a half an hour? K: Certainly. HMJr: What? K: Certainly. HMJr: Because what I'd try to do is settle this tomorrow. K: HMJr: Certainly. And if K: I'11 be right here in the office. HMJr: You '11 be there tomorrow? K: Yeah. 191 -5HMJr: HMJr: K: HMJr: I'11 try to get hold of him. All right. But I mean, I just - I want to see if I can't help by getting this thing settled. Are you thinking of - are you sure you're remembering that there are other people that are just as bad off without any truck orders. Sure, but my friend Stettinius wants to do something for - carry out his end of the job for Lend-Lease. K: Yes. HMJr: And I want to help him, and I want to help these men that haven't got any work. Uh huh. It's all right with me. You call me K: HMJr: any time you want to. There's twenty-five thousand men out there, and twenty-five of them are working on defense orders. How many? HMJr: Twenty-five. - K: Uh huh. HMJr: Out of twenty-five thousand. K: Yeah. HMJr: K: Something wrong somewhere. Of course, the reason for that is that Keller hasn't got up his Bofor gun quick enough, see? After he gets through, he's going to have - with the orders he' got now, he's got work for sixty per cent of his men, and we take are HMJr: just giving him more work 80 that he can care of the rest of them. But as for as you're concerned, if we want to give 192 -6K: If you want to buy stock trucks, Mr. Morgenthau, you can buy them anywhere you want. HMJr: Thank you. K: And you call me tomorrow any time; I'll be right here. HMJr: Thank you. K: All right. HMJr: Good-bye. S: Righto. 193 December 27, 1941 12:44 p.m. HMJr: Hello. Operator: Mr. Keller. HNJr: Hello. r. K. T. Keller: How do you do? HMJr: Mr. Keller. Yes, sir. Henry Morgenthau, Jr. Yee, sir. HMJr: K: HMJr: K: H.Jr: It's a long time since I've talked to you. Yes, it 18. I hope I have better luck this time. (Laughs) Well, we were all right the last time. It was quite a confused situation there. Yeah. Mr. Keller, Mr. Stettinius is here on the Lend-Lease, and there are two representatives from your Dodge moin plant of the union. Now, they came to us to see whether we couldn't help on getting work for this plant. K: Yes. HMJr: And Mr. Stettinius has asked Procurement in the Treasury to place some orders for small trucks, non-military, with this plant. We talked to Bill Knudsen, and he said it's all right with him. F: Yes. HMJr: Now, do you suppose you could come down here tomorrow and sit with me personally for long enough tomorrow to clean this up 80 that we could give you the order and you could go home with it? -2- HMJr: Why, I'm planning to be there Monday. You're planning to be there K: What? K: HMJr: 194 You're planning to be there Monday? Yeah. I'm going to be in Washington Monday and I'm going to stay as long as necessary. K: HMJr: Well, Monday I'm supposed to raise money to pay you fellows. K: Yeah. HMJr: You couldn't give me Sunday? K: Sunday ? HAJr: Yeah. K: I'll see what I can do. HMJr: Because I K: But I've got all my head managers in here. We're in a kind of a long conference right now. HMJr: Yeah. K: But if I can possibly make it, I'll wire you. HMJr: Well K: We're working on an order for 84,000 half ton jobs, but we've got to tear hell out of everything to get them out in time. HMJr: Well, where are you going to place those? K: What? HMJr: What plant would that be? K: In the Dodge plant. HMJr: That would be in the Dodge plant? 195 -3Oh, yes. K: HMJr: Well In other worde, if we take this - if they K: give UB this order on these 84,000 jobs, it's going to take the entire engine capacity of the Dodge plant; and it's going to - I've got to take my assembly lines from the Dodge plant and put trucks in. HMJr: Well, where does this order come from? It's coming from Gregory in the Quarter- K: master's Department. HMJr: Who? K: General Gregory. HMJr: General Gregory? K: Yeah. HMJr: Well, now, you don't know whether that's for K: HMJr: K: HMJr: K: Lend-Lease or for the Army. No, that's for the Army. That's for the Army. Yeah. Now, we have taken orders for Russian jobs, which we're making 2,500 of them. Yeah. As a matter of fact, we're going to have a flat spot in our truck production in February because we haven't got orders now; and if the orders - if we get the orders now, we can't get the materials in time to keep from having a straight shut-down there. HMJr: Well, when would you know if you could be here K: I'11 let you know by two o'clock. tomorrow or Monday? -HMJr: Well 196 hello. I'11 call you back. Now, how many trucks what I'd better do is look up what I'm going to talk to you about, see? K: HMJr: Yeah. K: Now, if you tell me how many trucks and HMJr: I'll let Stettinius talk to you. K: Okay. what size. HMJr: (Talks aside) He wants to know what kind of trucks Mr. E. R. Stettinius: K. T. Hello, Stet. This is Ed. How are you, boy? K: S: K: S: Fine. The Russians and the British and all the foreign governments will need a vast quantity of small, non-military trucks during the first six months of the new year. K: Yeah. S: Now, the heavy concentration from a quarter ton up to a ton and a half and two ton. K: Yeah. S: Now, of course, we feel that the Quartermaster, K: Yeah. S: But anything of non-military specifications, that is, Gregory, naturally would procure military specifications stuff. that was a standard commercial item, we would like to place the order through Procurement of the Treasury 197 -5Yeah. K: which the Secretary just described. S: Yeah. Now, it would seem to me that you could get if we could give you a large enough order to take about three months' production for a quarter ton, helf ton, and a ton, that you could convert over awful quickly in the course of a few weeks. Yeah, that's right. K: And you could put - maybe take care of ten or twelve thousand men that aren't going to have anything to do in the meantime until you get up in your big stuff in your Bofore program. There are things - I tell you what we can do. S: K: If there are parts that we could use out of what might be called "passenger car production" Well, there are, K.T. we'll be okay. We can't do anything - at this time we can't do anything in ton and a half on that then because it's the axle capacity and things like that. I know, but from a quarter ton un to a ton there are many parts - including the axles - that you S: S: can convert right over from passenger to small trucks. K: Well, that's just what I'm putting on here on the S: Yeah. K: S: three quarter tons. The military specifications don't work out that way. Now, these are the rear wheel drive only. Well, now, what I would do on this is this. I would ask you to get your boys to draw up a new specification of what size truck and kind of -6- 198 truck you could deliver, and what quantity at what price, over what period of time. And then we in turn would go back to the various foreign missions and say, "Here's something K: we can give you in a hurry; will you take it?" Well, that's just what I was thinking about when I told the Secretary that I didn't know whether I could be there tomorrow or Monday. S: K: Because you know there's an awful lot of spinach in some of these foreign specifications. You see, what I'm thinking about is this. It's idle for me to come down there and not say, This is what we can do." Now, the train leaves at 5:35 here, you see S: K: S: K: S: Yeah. and that don't give me enough time, I'm afraid, to get together what we can do and present you a picture. Yeah. You see, that's why I thought I may not be able to do it until Monday. Well, now, K. T., I think the sensible way to approach the thing would be this, that assuming that you were going to get an order for twenty thousand trucks quick K: Yeah. to put in that plant. What size would that S: truck be, and what would the general specifications be, and how much would it cost, and how long would it take to deliver them? K: Yeah, I understand. Now, here's what I'm thinking about, see? I'm here at a meeting this morning, and we've been talking something all morning S: Yeah. K: .....88 to how to get out 84,000 jobs for the Army - 199 -7three quarter ton, four-wheel drive - and get them by July. Yeah. S: K: And we've been - I've got the whole geng in here and we've been over every actual part and everything on the job, what machinery we need and so forth and so on. Now - and that's just a starter, they tell me. S: K: Yeah. Now, then, the thing that I've got to find out is what can I build while I'm getting the things lined up S: K: S: K: S: That's exactly it. for this new job - what kind of a truck can it be That's exactly it. that I have the materials for, and what can we give you that they could use That's exactly it. and whether they can use it. K: S: Right. K: Now, I don't see how I can get that done and HMJr: Well, Mr. Keller, I've been on the phone. K: Yeah. HMJr: If that's the case, I'd rather see you sharp nine catch that train this afternoon. o'clock Monday morning. K: Okay. HMJr: See? K: Yee, I'll do that; and then that'll give me 200 -8- HMJr: tomorrow to whip this thing together. But your thought is that while you're getting ready for the Army, you might take a standard job and keep the plant busy in the meantime. That's just exactly it, but we've got to the K: place where we've got to count our material. HMJr: Well And the K: HMJr: that would be fine. That would please everybody - please Stettinius and please the men - because you' re I don't want to come down there and talk nonsense K: to you. HMJr: Well, I'11 tell you what I'11 do. Does your train get in so that you can be here at nine? It does, yes, sir; if it isn't late. K: HMJr: K: Well I'll be on the B & 0, which gets in there at 8:15 when it's on time. HMJr: Well K: And I'll come right HMJr: Ed Stettinius says he can be here at nine, and I'll ask Bill Knudsen to drop in. K: All right. HMJr: See? K: HMJr: K: All right. I'11 ask Bill to drop in so that we won't have to be fuesing around with priorities. Okay. Well, we'll be right on the job. 201 -9HMJr: And then I'11 look forward to seeing you at nine o'clock in the Treasury, my office. K: Thank you very much, sir. HMJr: And thank you. S: Good-bye, K.T. K: Yeah. S: Okay, boy. K: That's the right way to get at it, isn't it? S: Yeah, that's exactly right, fellow. K: Thank you very much. S: Righto. K: Good-bye. 202 December 27, 1941 12:55 p.m. William S. Knudsen: Hello. HMJr: Bill, Keller 18 going to be at my office at nine o'clock Monday morning. He said he'11 have the answer then. Could you drop by? K: No, I can't, Mr. Secretary; I've got a staff HMJr: Who's your automobile man? K: The automobile man is a fellow by the name of meeting here every morning at eight-thirty Stevenson. HMJr: Stevenson. Could he - Ed asked whether Harrison couldn't come. I don't know who he 18. K: Harrison? HMJr: Yeah. Bill Harrison. I don't know whether Harrison will be back. He's out in Chicago looking at some plants out K: there, but HMJr: Well, send whoever you rely on over here, will you? K: HMJr: Yeah, all right. Will you - but you'd better let me know. HMJr: Well, I'11 send Stevenson. You'll send Stevenson. K: Yeah. HMJr: What? K: Yeah. K: HMJr: Stevenson. K: That's right. -HMJr: K: And you rely on him. Yes. HMJr: Thank you. K: All right. HMJr: Thank you. 203 204 December 27, 1941 Mr. Knudsen called me up Saturday night a little after seven o'clock and asked me how did I get into this automobile truck buying business. So I said that these two labor union sen came in to see me and wanted my help. And he said, well, why didn't they come to see him or Sidney Hillman or Douglas Brown. I said, "They've tried to see somebody and couldn't see anybody, so they've come to see me.' Well, he just couldn't understand it. He said that anybody could see him. They could see him in the hall. I said, "Well, they haven't been able to see anybody." He was quite disagreeable over the phone, and spid he hopes that before I gave any orders for any trucks that we out our order into the general pool. He said that Sidney Hillmen had finally persuaded Under Secretary Bob Patterson of the War Department to give him an order for 90,000 trucks, and that they expected to allocate these amongst all the automobile companies on January fifth. He implied that if I gave this to the Dodge Company, I'd be showing favoritism. He said, "Now, don't throw any monkey wrenches into it.' said, "How can I throw any monkey wrenches into this thing when there are seventeen thousand men in this one plant alone walking the streets without any work? I can't understand why I you haven't let them know if there are going to be any orders. So he said, "Well, thet's up to Keller, the President of Chrysler." So I said, "Well, what about these hundreds of publicity men that you've got over at the OPM?" Well, he said that I might throw a monkey wrench in. I got cuite disagreeable myself, and I didn't see any reason why I should take it from him. So he said, "Well, I celled up Stettinius, and Stettiniue said he didn't know anything about it," and that I had just sent for him. That shows what kind of a fellow Stettinius is. So I said, "Well, after all, Knudsen, before I did anything I called you up on the phone and I don't see what you've got to complain about, or words to that effect. He kept repeating, "Now don't place any orders without giving it to me, Knudser, for a chance to allocate it. It's our job to allocate it." And he kept saying, "If you give it to Dodge, why you'll be showing favoritism. Sc I think the joke is on Knudsen, because after all, Keller told me that they were figuring on either an eighty or 205 -2ninety thousand truck order from the Quartermaster General, and I gather that that's the whole order there is to be placed; and if that isn't favoritism to give the whole order to Chrysler, don't know what is. But evidently Knudsen doesn't know this. So I'm going to find out and be sure to get my facts right; and if the Quartermaster General is giving the whole order to Chrysler, without giving any other companies e chance, that certainly is favoritism. I Knudsen's conversation left a very bad taste in my mouth. I told Knudsen this. I said, "Now look, I'm going to see these people Monday; and before I decide to do anything, I will cell you uo personally and discuss it with you. Outside of that, I made him no promises of any kind, although he tried his best to pin me down. I thought something like this would happen, and why they have to weit until January fifth and why they can't just allocate these automobiles right away, I don know. Oh, another thing he said. He said, "We had everything arranged all right. Then along came Pearl Harbor, and they took the rubber away from us, and we had to cut down on the production of automobiles." But he kept repeating this as though this was a tragedy; namely, cutting down on the number of automobiles. And he tried to make P case that before December seventh everything was okay, but that they just hadn't had time to get enough truck orders to take un the gap of the additional decrease in the number of automobiles manufactured due to lack of tires. That's his story, anyway, and it just doesn't add up to four. I just don't think it makes sense, and I'm certainly going to pursue it and get to the bottom of the thing; and if Knudsen blocks me, I'll go directly to the President. I'm going to call up either Patterson or McCloy and find out about this automobile order, because what I imagine has happened is that the War Department has gone directly to Chrysler without letting OPM know. 206 December 27, 1941 At five minutes of nine, I called up Jack McCloy and asked him whether Stettinius had talked to him about this and he said he had and that as for as he was concerned, as long as these were non-military trucks it was all right for the Treasury to buy them. So I said, "I understand the Quartermaster General is trying to buy either eighty or ninety thousand trucks from Chrysler, and I don't want Chrysler to give ae the run-around. I'd like to have the low-down on it. And he promised he'd let me know tomorrow morning. 207 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION CONFIDENTIAL DATE Secretary Morgenthau December 27, 1941 (12:45 P.M.) TO FROM Dave H. Morris, Jr. Subject: Capital Funds Committee The historical background which I have been able to develop so far is as follows: October 1940: Mr. Jerome Frank sent to the War Department a memorandum suggesting the creation of a Capital Funds Committee. This memorandum was subsequently sent to the President by Judge Patterson. Nov. 30,1940: The above-mentioned memorandum was received by "the Budget" from the President. (As far as can be determined, no subsequent proposal was ever received by the Budget; and after investigation, the Budget apparently decided no action was necessary.) Mar. 18,1941: Mr. Jerome Frank wrote you concerning the creation of a Capital Funds Committee, and, as a result, there was prepared in this office, a proposed Executive Order creating such a Committee, together with a letter for your signature transmitting the proposed Executive Order to the President. (Saturday) You apparently (the records unfortunately are not clear) took up and left with the President, the proposed Executive Order. Apr. 11,1941 You had a telephone conversation with Mr. Frank, Apr. 5. 1941: (Friday) in which you told him that you had left with the President the "interdepartmental committee" memorandum (which presumably is the one cover- ing a Capital Funds Committee). You added 208 -2that he seemed interested, but it was not a matter you felt could be pressed. Dec. 12, 1941, to date, is covered by the suggested transmittal memorandum to the President, attached hereto. samp Copies to: Mr. D. W. Bell Mr. Foley Mr. White Mr. Haas Attachments. 209 DRAFT MEMORANDUM FOR THE PRESIDENT: Re: A Capital Funds Committee. In accordance with your instructions, I enclose herewith a suggested reply to Mr. Eicher's memorandum of December 17th. In considering the suggested reply, you may be interested in the following recent background. On December 12, 1941, at Mr. Eicher's request (he being confined at home with a cold), I saw Mr. Purcell, who suggested that active consideration be given again to the establishment of a Capital Funds Committee, and he left with me a proposed Executive Order creating such a Committee. On December 16th, after having reviewed this situation within the Treasury, and after having discussed it informally with Mr. Eccles, we sent copies of this proposed Executive Order, with a request for comments thereon, to the following: The Vice President, The Secretary of Agriculture, and The Administrator of the Federal Loan Agency. On the same date we notified Mr. Purcell of this action. On December 27th, the Department of Agriculture notified us that they would like to have a round-table discussion at a time mutually convenient to all concerned. To be signed: Henry Morgenthau, Jr. 210 DRAFT A THE WHITE HOUSE Dear Mr. Eicher: Thank you for your memorandum of December 17th, giving me the Security and Exchange Commission's current thoughts on the desirability of a Capital Funds Committee. As you may, or may not. know, this matter has come up at various times during the past year or so - the last time being in April (1941) when Mr. Morgenthan, following a talk with Mr. Jerome Frank, discussed it with me. In view of this, I took up your current proposal with Mr. Morgenthan. It seems that your memorandum to me crossed in the nail with a letter from the Treasury to Mr. Purcell, saying that they had just sent to the various interested departments and agencies copies of the revised Executive Order proposed by the Securities and Exchange Commission. Under these conditions, I suggest that the matter be allowed to continue in the way it has been started and, in due course, I shall be interested in hearing what conclusions are reached. Sincerely yours, To be signed: Franklin D. Roosevelt 211 DRAFT B THE WHITE HOUSE Dear Mr. Eicher: Thank you for your memorandum of December 17th, giving me the Security and Exchange Commission's current thoughts on the desirability of a Capital Funds Committee. Because of the many ramifications involved in this matter, and in view of the consideration already being given to it by various groups - such as the Supply, Priorities and Allocations Board; the Treasury Department; the Board of Governors of the Federal Reserve System; the Department of Agriculture: the Federal Loan Agency: and the Bureau of the Budget - I suggest you continue in touch with them. Sincerely, To be signed: Franklin D. Roosevelt 212 OFFICE OF THE SECRETARY OF THE TREASURY December 27, 1941 To: Mr. Clifton Mack For your information. Please return to Room 287. 11/18/11 can 213 December 24, 1941. Dear Mr. Perkins: Thank you for your letter of December 23rd which encloses a copy of the statement recommended to the Presi- dent by the Joint Defense Production Committee. I have been glad to read this and to pass it on to the Procurepent Division in accordance with your offer to suggestion. supply additional Thank you copies for your if we desire to have them. Sincerely, (Signed) E. Morgentham, Jr. Mr. Milo Perkins, Chairman, American Section of the Joint Defense Pro- duction Committee, Board of Economic Warfare, Washington, D. C. 214 BOARD OF ECONOMIC WARFARE ECONOMIC-DEFENSE BOARD WASHINGTON D.C. OFFICE OF THE EXECUTIVE DIRECTOR DEC 23 1941 Dear Mr. Secretary: Enclosed is a copy of a statement of policy for the better integration of war production in the United States and Canada. This statement was recommended to the President by the Joint Defense Production Committee of the United States and Canada and was approved by him in letters to the Members of the Committee. A copy of this letter is enclosed. I think that Treasury Procurement will be in- terested in this statement and I hope that you will pass it along to them and give it your personal blessing. Sincerely yours, Milo Parkins Milo Perkins Chairman, American Section of the Joint Defense Pro- duction Committee P. S. Mimeographed copies of the joint policy statement are available and my office will be glad to supply you with as many copies as you need for members of your staff. The Honorable The Secretary of the Treasury 215 STATEMENT BY THE PRESIDENT December 23, 1941 The Joint Flar Production Committees of Canada and the United States have unanimously adopted a declaration of policy calling for a combined all-out war production effort and the rcmoval of any barriers standing in the way of such a combined of- fort. This declaration has mot the approval of the Canadian War Cabinct. It has my full approval. To further its implementation, I have asked the affected departments and agencies in our Government to abide by its lotter and spirit, so far C.S lies within their power. I have further requested Mr. Milo Perkins, the Chairman of the American Committee, to invostigate, ith the aid of the Tariff Commission and other interested agencies, the extent to which logislativo changes will bc necessary to give full effect to the declaration. Through brute forco and enslavement, Hitler has socured a monsure of integration and coordination of the productivo rosources of C. large part of the continont of Europe. T/c must demonstrate that integration and coordinction of the productive resources of the continent of America is possible through domocratic processos and free consont. 216 STATEMENT OF WAR PRODUCTION POLICY FOR CANADA AND THE UNITED STATES Having regard to the fact that Canada and the United States are engaged in a war with common enemies, the Joint War Production Commit- tee of Canada and the United States recommends to the. President of the United States and the Prime Minister of Canada the following statement of policy for the war production of the two countries: 1. Victory will require the maximum war production in both countries in the shortest possible time; speed and volume of war output, rather than nonetary cost, are the primary objectives. 2. An all-out war production effort in both countries requires the maximum use of the labor, raw materials and facilities in each country. 3. Achievement of maximum volume and speed of war output requires that the production and resources of both countries should be effectively integrated, and directed towards a common program of requirements for the total war effort. 4. Each country should produce those articles in an integrated program of requirements which will result in maximum joint output of war goods in the minimum time. 5. Scarce raw materials and goods which one country requires from the other in order to carry out the joint program of war production should be so allocated between the two countries that such materials and goods will make the maximum contribution toward the output of the most necessary articles in the shortest period of timo. 6. Legislative and administrativo barriers, including tariffs, import duties, customs and other regulations or restrictions of any character which prohibit, prevent, dolay or otherwise impodo the froo flow of necessary munitions and war supplies betwoon the two countrios should be suspended or otherwise oliminatod for the duration of the war. 7. The two Governments should take all measures nocessary for the fullost implomentation of tho forogoing principles. Membors for Canada G. X. Sheils, Chairman R. P. Boll H. J. Carmichaol J. R. Donald W. L. Gordon H. R. MacMillan Mombers for the U.S. Lilo Perkins, Chairman J. V. Forrestal W. H. Harrison R. P. Patterson E. R. Stottinius H. L. Vickery 217 EC, 23 1941 2 Hon. H. L. Vickery Vice-Chairman U. S. Maritime Commission Washington, D. C. My dear Mr. Vickery: The policy statement of the AmericanCanadian Joint Production Committee adopted at its December 15 meeting has been pre- sented to me and has my approval. I am asking the Chairman of our American section to work with the Tariff Commission and the Bureau of the Budget on the legislative sug- gestions made. It will be appreciated if you will thoroughly aoquaint the members of your staff with this statement and secure their support in making it effective in aotion. Very sincerely yours, (F.D.R.) 217 EC. 23 1941 2 Hon. H. L. Vickery Vice-Chairman U. S. Maritime Commission Washington, D. C. By dear Mr. Vickery: The policy statement of the AmericanCanadian Joint Production Committee adopted at its December 15 meeting has been presented to me and has my approval. I am ask- ing the Chairman of our American section to work with the Tariff Commission and the Bureau of the Budget on the legislative sug- gestions made. It will be appreciated if you will thoroughly acquaint the members of your staff with this statement and secure their support in making it effective in aotion. Very sincerely yours, (F.D.R.) 218 DEC 27 1941 Ky dear Mr. Easteens I have to advise you that I have designated Mr. W. R. Hayghe, Chief, Traffic Division, Procurenear Division, as the Treasury Department represents- tive to maintain formal limison with the Office of Defense Transportation, as provided in paragraph 6 of Executive Order No. 8989 of December 18, 1941, establishing the Office of Defense Transportation. Sincerely yours, (Biomed) H. Morgenthan, in Secretary of the Treasury. Honorable Joseph B. Eastean, Director, Office of Defence Transportation, Interstate Commerce Commission, Washington, D. c. cc- thoupan n.m.c. INTeaja 219 DEC 27 1941 Dear Mr. Hayghes You are hereby designated as the Treasury Department representative to maintain formal lisison with the Office of Defence Transportation, established under the provisions of Executive Order No. 8989, approved December 18, 1941, and printed in the Federal Register of Thursday, December 25, 1941. Sincerely years, (Signed) N. Morgenthan, JF. Secretary of the Treasury. Mr. W. E. Hagghe, Chief, Traffic Division, Procurement Division, Treasury Department. n.m. Copiesto Thompan ANTIAJO 220 DEC 27 1941 Dear Dr. Soong: I wish to express my appreciation for your kind letter regarding the victory of the P-40's. I was very happy to hear of this accomplishment and I am confident that it will be followed by many more. Needless to say I will always work for the close coordination of the efforts of our countries in their common struggle against the aggressors. Sincerely yours, (Signed) 1. Morgenthan. Jr. Secretary of the Treasury. Dr. T. V. Boong, Minister or Foreign Affairs, Republic or China, Chinese Embassy, Washington, D. c. New/efe 12/26/41 HDW FILE COPY 221 2871 WOODLAND DRIVE WASHINGTON, D.C. 22nd Dec., 1941 Dear Mr. Secretary: You have probably heard that the P-40's you were instrumental in getting for us scored their first victory with four Japanese bombers shot down near Kunming. I am sure you must have thrilled with joy, as we are with gratitude to you for this success. At the same time we cannot but indulge in the vain regret that if the Air Corps had followed your batch with more squadrons till we had built up our modest plan of 350 pursuits and 150 bombers we would today be a thorn in the enemy's flesh as we would be on the flank to their present advance. Since we have more than a hundred airfields and an extensive air-raid warning system, as against the handful of fields in Malaya and the Philippines our squadrons could not be bombed out even by a very numerous enemy. With kindest regards, Yours gratefully, T. V. Soong has organization 222 December 27. 1941. Dear Dr. Seong: The fine new Atlas of China has reached mo, and I vast to thank you for 11 very such. This marral compilation of maps of the lead, air and see routes will be meet useful, and I appreciate your thought in sending 11 to no with your compltneate. This also gives - as opportunity to add a personal word of greeting and best wishes for the New Year. Sincerely, (Signed) E. Morgenthan. Jr. Dr. T.V. Soong. China Defence Supplies, 1601 V Street, S.V., Washington, D. c. GEFidbs 223 CHINA DEFENSE SUPPLIES 1601 STREET N.W. WASHINGTON D c ( cetlas With the compliments of Dr. C. I. Soong new ather of China Land an + sea Rontes 224 It was impossible to deliver this Daessage, either through State Department facilities or commercial wires. 225 December 27. 1942 Mr. Livesay Mr. District will you please send the attached eable to President Queson at Mamila. (See attached cable) FD:1ap-a2/27/41 226 TELHORAN SING COPY Fordinand Kaha, Jr., Est. 332 treasury Department Washington Charge Treasury Department, Appropriation for official His Excellency Manuel Queses President of the Commenwealth of the Philippines Manila, Philippine Islands Deeply appreciate your good wishes. Our hearts go out to you as this time. You and your people are giving a segnificent example of courage to all of us. Heary Morgenthan, Jr. Secretary of the Treasury. OOPT:1ap-12/27/41 227 EUGENE T. KINNALY W. SECRETARY McCORMACK JOHN 12TH DIST. Office of the Majority Leader House of Representatives H.S. Washington, D.C. PERSONAL. December 27,1941. Honorable Henry Morgantheau, Washington, D.C. Dear Henry;- I tried to reach Senator Walsh, as I advised you in my telegram, before he left Washington, but I was unable to. I receive 1 wordthat he had left for his Clinton home. I tried sev ral times over hristmas to contact him there, but was unable to contact him. I am advising you so that you will know the efforts I have made to get in touch with him. It looks to me, 30 far as I am concerned, that the same willhave to wait until I have an opportunity of seeing him in Washington. With kindregards, and the Compli ents of the Season to you and Mrs. .Morhanthoau, inwhich Mrs McCormack joins with me, I am Very sincerely yours, Johnson wp137 103GOVT XC 41 Fole, CLINTON MASS DEC 27 1941 120P 6 HON HENRY MORGANTHEAU JR SECY TREASURY I REGRET TO NOTIFY YOU THAT I RESENT YOUR GETTING PROMINENT 1941 DEC 27 PM 2 12 PEOPLE IN BOSTON TO BRING PRESSURE UPON ME TO FAVOR THE CONFIRMATION OF DEAN LANDIS. YOU KNEW MY POSITION ON THIS MATTER AND YOU KNOW THAT MY OPPOSITION IS A MATTER BASED ON PRINCIPLE AND NO PRESSURE FROM POLITICIANS OR MEN OF MY OWN POLITICAL PARTY IN MASSACHUSETTS WILL OR CAN CHANGE MY no answer made by try 228 WP137 SHEET 2 CONVICTION OF THE UNSUITABILITY OF YOUR SELECTION. AS I SAID TO YOU BEFORE YOU CAN SELECT DEAN LANDIS FOR ANY POSITION THAT DOES NOT REQUIRE MY APPROVAL BUT I CANNOT BE A PARTY TO HIS CONFIRMATION BY THE SENATE SENATOR DAVID I WALSH. 206PM on 1/2/12. THE WHITE HOUSE WASHINGTON December 27, 1941 MEMORANDUM FOR MRS. ROOSEVELT: I have been looking over the various engagements ahead, which were made a long time ago. I see that you said that you would receive the members of the General Federation of homen's Clubs (between 700 and 800) on Monday, January twenty-sixth, at four o'clock. In view of the fact that you are going to their dinner on Friday, January twenty-third, would you care to say that you will greet the delegates there, and will cancel the reception at the White House? Further, a group of Institute of National Government students (approxi- mately 200) are scheduled to visit the white House on February fifth, and a second group again on April third. Shall I cancel these dates? Edith Helm Treasury Department Division of Monetary Research 230 Date December 27, 19 41 To: Secretary Morgenthau From: H. D. White On November 12 we cabled Casaday for a full text of the Oxford Institute of Statistics study of the Minister of Labor's efforts to draw married women into war work and the effects of the new income tax on those answering the call. Mr. Casaday has advised us that the Institute of Statistics has not or undertaken any the effects of the new on Oxford published British income study of tax married women engaged in war work. There 1e appended a summary and etudy by the Institute. 231 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE December 18, 1941 TO FROM Mr. White Mr. Hoflich Subject: Oxford Institute of Statistics Article on Employment. Casaday states that the Oxford Institute of Statistics has made no study of the effects of the new income tax on married women engaged in war work. We requested Casaday to send the text of such a study, in cable No. 5133 of November 12, 1941. He has sent to us the appended copy of an article, "Quantitative and Qualitative Full Employment", appearing in the Oxford Institute of Statistics Bulletin for November 1, 1941; also the attached clipping from the Manchester Guardian of November 8, 1941, pertaining to the article. The latter gives the impression that the Oxford article treats the subject of taxation in relation to married women, whereas it does not. Casaday thought that this or a similar newspaper item might have created the same impression here, therefore he sent the Oxford article as the one probably referred to in our cable of November 12. The following interesting points are made in the article, "Quantitative and Qualitative Full Employment". 1. The author makes the useful distinction between quantitative and qualitative full employment. a. Quantitative full employment, the traditional peacetime concept, means the absence of involuntary employment, i.e., no more persons willing to work at the prevailing wage levels. b. Qualitative full employment, the ideal under war conditions, refers to a 100% use of the male and female population in the jobs considered most essential to the war effort. 2. Full quantitative employment had been reached in Great Britain in August, 1941, when there were 220,000 wholly unemployed insured persons, most of whom were unsuitable for industrial work. 3. Progress in the direction of qualitative full employment, re- sulting in further increases in war output, can be achieved: a. From the existing gainfully occupied labor force, by shifting from non-essential to essential industries. 232 -2- - b. By drawing on trades with low productivity (chiefly the distributive trades). C. By bringing in new workers from the household (housewives and domestic servants). 4. As an indication of the possibilities under 3 b and c, the author estimates that, in 1941, there are 13 million persons aged 16 to 64, or 45% of the population in the 16-64 age group, either unoccupied or occupied in commerce and finance (mostly in the distributive trades) and in household and personal service (including hotels, catering and laundries). 5. The following specific measures are suggested to approach the goal of full qualitative employment: a. Reorganization of the retail trade. (1) Call up of men and transfer of women from the retail trade, and the consequential closing down of the "weakest" retailers - the method now apparently being followed by the Government. (2) Replacing full-time employees by the part-time work of housewives. (3) Spreading the work more evenly - reducing the peak load - by fixing shopping days and hours for various groups of shoppers. b. Reorganization of the domestic household. (1) Some specialization of household functions to free housewives for industrial employment, such as (a) communal feeding and works canteens, (b) school meals, (c) day nurseries, (d) communal laundries. COPY 233 INSTITUTE OF STATISTICS OXFORD Bulletin Vol. 4 November 1, 1941 No. 15 QUANTITATIVE AND QUALITATIVE FULL EMPLOYMENT The concept of full employment commonly used in economic theory refers only to gainfully occupied persons. Peace-time full employment means the absence of involuntary unemployment in the sense that there are no more workers willing to accept a given real wage, (1) or to put it in another way, given the level of real wages no employer can increase his staff without reducing the staff of another employer. (2) The introduction of conscription of labour during the war, however, puts the problem in an altogether different perspective. We are now concerned not only with the shifting from one job to another of that proportion of the population which is willing to work for a given wage, in order to obtain maximum output of war material, but with the wider task of shifting about the entire able-bodied population so that no individual is engaged on a task, whether paid as in industry or unpaid as in housework, from which he or she can be spared for more essential work. Not only the volume but also the direction of the available labour force comes into the foreground. Thus in a war economy the concept of full employment must be extended to cover the occupational and industrial changes of the hitherto gainfully occupied (1) Keynes, J.M., "General Theory of Employment, Interest and Money", p. 12. (2) Robinson, J., "Essays in the Theory of Employment" P. 15. 234 - occupied and those "unoccupied" who can be drafted into trade and industry, 1.0. into gainful occupation. We may denote the traditional concept implying merely the absence of involuntary unemployment by 'quantitative full employment' and the wider concept as 'qualitative full employment bearing in mind that in practice the two concepts shade into one another. (1) We may say that qualitative full employment is the limit to which the constant process of shifting of the occupations of the population should tend, this limit being a 100 per cent use of the male and female population in directions which are considered as more essential than others. account being taken of particular abilities and inabilities of sex and age. In August 1941 there were 220,000 wholly unemployed insured persons, most of whom were unsuitable for industrial work. Full quantitative employment had been reached, though it is generally admitted that further increases in war output can be achieved from the existing gainfully occupied labour force in employment by shifting from 'non-essential to 'essential' industries. During the next stage of the war it will be necessary to draw particularly on those trades whose progress in integration, mechanization and scientific management has encroached least on the heritage of the nineteenth century, and to bring in new workers from domestic households. In 1941 the distributive trades, whose productivity is very low, and domestic households (2) accounted for about 11 million adults (aged 16-64) (3) or a quarter of the total population of Great Britain. TABLE 1. Gainful workers in Year Popula- Produc- Distrition bution 100 130 100 100 132 163 197 239 166 tion. 1870 1880 1890 1900 1910 1920 1930 274 196 243 268 318 271 Volume of goods produced and distributed per Distribution. worker in Production 157 100 133 100 112 257 378 145 175 94 513 657 877 209 278 335 91 99 113 104 (Twentieth Century Fund: 'Does Distribution Cost Too Much?' 1939, .379.) (1) Germany in 1938 was, for instance, an intermediate case, and 'involuntary' overtime raises other questions of definition. (2) The following table is based on U.S.Census data and the index of physical production prepared by the research department of the Federal Reserve Bank of New York. (3) According to the Census of Population, 1931,2.6 million persons were occupied in the distributive trade, 1.5 million 235 - TABLE II Total Popula- Year tion Numbers Index '000 Persons occupied % to in Private Domes- total tic Service Numbers 000 Index 1,630 1,366 1,626 100 1,465 1,394 1,269 100 Index popu- lation a Great Britain: 1911 1921 1931 40,831 42,769 44,796 100 105 110 81 96 4.1 3.2 3.6 100 2.7 2.2 1.9 100 78 88 b) Germany: 1907 1925 1933 54,991 62,410 65,218 100 113 119 95 87 81 70 It took about two years during the last war to break down finally the customary barriers to the employment of women in industries which had hitherto been considered as suitable only for men. Similarly, peace-time conceptions of full numerical employment and industrial distribution (looking at labour from the demand side) can be traced in the Government policy during the first two years of the present war. The size of the labour market was defined by the size of the population hitherto occupied (employed and unemployed) which reflected after all only the existing peace-time capital equipment of the country, and the distribution of the peace-time national output. If the question of the unoccupied population was touched upon it was only in order to estimate how many women hitherto unoccupied have to replace the called-up men, and not how best to utilize the whole population in the war effort. The following table is arrived at by applying to the 1939 Unemployment Insurance data the proportion between the figures of occupied as given by the Census of Population and the Health and Unemployment Insurance statistics of 1931. TABLE III million in private domestic service, and there were 8.6 million unoccupied married and widowed women. It has been assumed above that the numbers occupied in the domestic households, consist of 1.5 million paid employees and 7.1 million unpaid married and widowed women. 236 -TABLE III Estimated Occupied and Unoccupied Population (Great Britain, July 1939) 000.8 Males Ages 16-64 15,207 Females All ages 22,289 17,711 All ages Total population Ages 14 years & over 1,701 Unoccupied aged 14 and over Occupied aged 14 14,827 2,275 16,010 2,525 Commerce & Finance 766 838 380 years and over Personal Service Ages 16-64 24,111 19,651 16,617 12,745 10,367 6,906 1,188 2,052 6,250 1,051 1,861 It follows that in July 1939, 17 million persons, aged 16-64, i.e. 52 per cent of the population (aged 16-64) were either unoccupied or occupied in commerce and finance (mostly in the distributive trades) and in personal service (including hotels, catering, laundry). No data are available since 1939, but it would not be unreasonable to estimate that the above proportion in the summer of 1941 is not less than 45 per cent (assuming a decrease of about 3-4 millions in the number of persons unoccupied or occupied in commerce and personal service) or about 13 million persons. Miss Iris Douglas (1) shows on the basis of the 1931 Census of Population that the ratio of persons occupied in the retail trade (i.e. retail owners, managers and employees, clerical staff excluded) to the total population in England and Wales is 40 per 1,000 varying from one county to another, the lowest ratio being 29 per 1,000 in Carmarthen, the highest being 50 per 1,000 in Sussex, and the ratio for London being 45 per 1,000. (2) Assuming that one-fourth of the total population forms the regular shopping (3) population, we find that one person in (1) "Journal of the Royal Statistical Society,1935" Part III (2) The ratio in the U.S.A. in 1933 was 40 per 1,000, i.e. the same as in England and Wales; in Canada 38 per 1,000, 27 per cent of the numbers of full-time employees in the U.S.A. and 15 per cent in Canada are part-time workers. (U.S. Dept. of Commerce: Census of American business,1933, Retail Trade. 17th Census of Canada 1931, Retail merohanshop dise trade.) (3) That part of the population is meant which/evenly every week throughout the year, mostly in connection with housekeeping. This proportion is short of all those persons who shop regularly every week but do not spend a long time in the shop (at stationers,tobacconists,etc.) or shop irregularly, but spend more time in the shop (textile, clothing,etc.) 237 -5in the retail trade, on the average, served six customers weekly. Each customer could therefore claim, on the average, about 18 hours weekly of the person occupied in the retail trade. These conditions became accentuated in the years 1931-1939. The following table indicates the growth of the distributive trades in 1931-1939 (Great Britain). TABLE IV July 1931 July 1939 Distributive Trades (ages 16-64) Unemployment Insurance Data Total population (all ages) (000's) 1,837 44,831 % of increase 2,046 46,400 11% 3% On the basis of the 1931 proportions we may estimate that in 1939 five instead of six customers were served weekly by one person in the retail trade: or that the average claim of one shopper on the time of the retailer increased from 8 hours weekly to 9 hours weekly. This tends to show that there is room for some contraction in services and, as was shown in a recent BULLETIN (1), particularly in the non-food retail trade. The necessary re-organization of the retail trade will hardly take place without Government intervention. The call up of men and the transfer of women from the retail trade without planned concentration and the consequential closing down of the 'weakest' retailers seems to be the method followed by the Government. The pairing of retailers suggested in the article quoted above would seem to have some advantages. Moreover, full-time employees (particularly in the food trade) could be partly replaced by part-time work of housewives, and queueing could be reduced by fixing shopping days and hours (including evenings) for streets or household groups in order to facilitate the shopping of women working full time in industry. Such 'dilution' in retail trade is closely connected with some reorganization of the domestic household. The average housewife performs the function of housekeeper, cook, charwoman and nurse, and her (household) equipment and training are for this small scale enterprise. It may be that specialization of housewives in groups would free some for industrial employment, such a scheme. But quite apart from the psychological obstacles to such a reorganization, communal feeding and works canteens, school meals and day nurseries, and communal laundries might prove easier to execute and have a greater displacement effect. It particularly if the 'equipment' could be adjusted to (1) "Rational Retailing in War Time", by G.D.N. Worswick, Bulletin, Vol. 3, No. 13. 238 -6It seems evident, however, that to draw upon the reservoir of labour in the distributive trades and the domestic sphere, some planned reorganization of both spheres is desirable in order to obtain the optimum effort with a minimum of hardship. H. FRANKEL. 239 DISTRICT BANK LIMITED HEAD OFFICE MANCHESTER NEARLY 600 BRANCHES FINANCE AND BUSINESS Tel. London Central 3918 FULL EMPLOYMENT IN A TOTAL WAR EFFORT Highlin FROM OUR FINANCIAL EDITOR LONDON, FRIDAY. V Some time in the current year we reached in this country the state of full employment which the Germans first experienced in 1938. In August there were only 220,000 wholly unemployed persons left on the register. and most of these were unsuited for indus- trial work. For peace purposes this uld mean full employment as all sons able and willing to work for a given wage had obtained jobs. Actually the employment of the population had gone further, for many men and women who had not previously worked for wages had taken up work to replace the men called up for service Up to that point it was fairly easy to supply the man-power demands of industry, but the demand for labour has continued to increase and from now on it must be supplied by drawing on the large reserve of people who can still be spared from unessential occupations or who Have not yet taken up paid work at all. That this reserve is very large is shown in valuable survey published by the The two main sources of further Oxford Institute of Statistics. man-power for war work are the distributive trades and the households, which together account for about 11,000,000 adults, or a quarter of the entire population In the retail trade the productivity of labour is so low that on the average one person serves only five customers which means that each shopper claims about nine and a half hours week of the working time of one shopkeeper or assistant It is obvious that concentration is possible. and with the growing urgency of the labour shortage in war industries the Government will have to replace its present haphazard methods by a planned system of telescoping Efforts are being made to draw married women into war work. and there is no doubt that many thousands Id be attracted But organisation is Luired to make the shift possible. There is need for more canteens and feeding centres, school meals, day nurseries and communal laundries In addition some tax revision is urgently needed for the assessment of married women whose wages are at present liable to an inordinate rate of income tax wherever the husband's income exceeds the lowest range Hong-Kong and the Chinese Dollar The suggestion of the Chinese Government that Hong-Kong should directly assist in the effort to stabilise the national dollar currency has now been accepted In agreement with the Stabilisation Board which includes British and American members, and the Chinese Ministry of Finance the Hong- Kong Government has to-day issued regulations forbidding all dealings in and possession of Chinese national cur- rency, This measure will permit a complete control of transactions. but Called nov. 13. considerable facilities are provided for dealings within the control. Authorised banks may undertake transactions at 473 buying and 469 selling. After November 14 it will be illegal for any person to possess $5,000. and for any firm to possess $30,000 with- out permit and such holdings must be registered at once. During the period of adjustment. moreover. all applica- tions for the export of national cur- rency to China will be granted without question, and withdrawals up to $1,000 a month will be allowed without permit Paid TREASURY DEPARTMENT PROCUREMENT DIVISION WASHINGTON OFFICE OF THE DIRECTOR 14/00/11 me 240 m December 27, 1941 EMORANDUL TO THE SECRETARY There is submitted herewith the operating report of Lend-Lease purchases for the week ended December 27, 1941. Arrangements have been worked out with Lend- Lease Administration to allocate immediately all moneys earmarked for the Treasury Department, Procurement Division. I FORDEFENSE BUY UNITED STATES BONDS Clifton 3. lack of Director Procurement grow 241 OPERATING REPORT - LEND-LEASE PURCHASES WEEK ENDED DECEMBER 27, 1941 $572,245,640.00 TOTAL ALLOCATIONS LESS: REVOLVING FUNDS $125,330,609.00 FUNDS AWAITING CLEARANCE BY O.P.M. 8,680,000.00 NET ALLOCATIONS #REQUISITIONS APPROVED FOR 134,010,609.00 $438,235,031.00 $382,525,025.33 PURCHASE PURCHASES PREVIOUSLY REPORTED PURCHASES THIS WEEK TOTAL PURCHASES REQUISITIONS IN PROCESS INCLUDING THOSE AWAITING SPECIFICATIONS $319,419,727.47 22,639,834.07 342,059,561.54 $ 40,465,463.79 THE DIFFERENCE BETWEEN NET ALLOCATIONS AND REQUISITIONS APPROVED FOR PURCHASE REPRESENTS ALLOCATIONS IN EXCESS OF COMMITMENTS, REQUI- SITIONS TRANSFERRED TO OTHER AGENCIES, AND CANCELLED REQUISITIONS. 242 FORDEFENSE BUY News Letter FIELD ORGANIZATION DEFENSE SAVINGS STAFF TREASURY DEPARTMENT, WASHINGTON, D. c. NUMBER 32 DECEMBER 27, 1941 TO THE FIELD STAFF: A great responsibility now rests upon the thousands of committees and the tens of thousands of individuals making up the Field Organization. It is up to us to prove that the American public, voluntarily, will support the great financial demands of war. Each month the Treasury will expect many hundreds of millions of dollara from the sale of Defense Bonds. Only a great nation-wide acceptance of plans to buy regularly and systematically will answer this mobilization of investors behind the Government's call. To accomplish this purpose, all work must be intensified. There must be an active local committee in every community in America. All citizens must be impressed with the importance of continuous investment in the Treasury's Defense securities. The methods of marketing which simplify and encourage continuous purchasing are well known and are being promoted by every active committee. These same methods - with the addition of pledges from every American, which will demonstrate to the Treasury just how much the public is willing to invest monthly - can and will succeed to a degree unparalleled in history. The complete use of all plans now available will be America's answer to any challenge to the belief in voluntary action. America is aroused. Our task is to put this spirit into action. Success calls for sacrifice on the part of the buying public - for both work and sacrifice on the part of every committeeman. The signal to go out and do the biggest financial task of all time has been given. It is up to us to produce the results expected of us. With greetings of the Season and every good wish for the strenuous year ahead, Sincerely yours, GALE F. JOHNSTON, Field Director, Defense Savings Staff. News Letter News Letter CHICAGO CONFERENCE CLEARS DECKS FOR ACTION POLITIES MORE THAN 300 members of the Field Staff, State Administrators, State Chairmen and many members of state and local committees, met in Chicago December 16 and 17, for an intensive twoday conference on ways and means to step up sales of Defense Bonds and Stamps to meet the demands Tbe Quickest, Surest Way YOU Can Help Win This War of a war economy. PRESENT FROM WASHINGTON for this conference was Secretary Morgenthay, those of his immediate advisors and assistants who are concerned with the Defense Savings Program, and the directors, assistant directors and field representatives of the several divisions and sections of the headquarters Defense Savings Staff. Buy Defense BONDS-STAMPS THE MEETING WAS OPENED Tuesday morning by Field Director Gale F. Johnston. First speaker was Earold N. Graves, Special Assistant to the Now! Secretary of the Treasury, who has been in impediate charge of the Defense Savings Program since the campaign was launched early this year. Mr. Graves outlined the philosophy and economic reasoning underlying the efforts to have Defense Bonds and Stamps purchased with money which would otherwise be spent for goods produced in competition with the production of war materials. How to on Up-to-the Minute Man Werner in the Chicago Sun "It is our job," Mr. Graves said, "to see to it that we manufacture guns, planes and tanks to win this var. The individual citizen must step aside to let the government have the facilities with which that can be IN THIS ISSUE FIELD ORGANIZATION LEADERS Confer in Chicago - Page 3 done." 4 GOALS SET and NATION-WIDE CANVASS Planned - Pages 3 and SECRETARY MORGENTHAU Keynotes New Effort - Pages 6 and 7 ONE BILLION DOLLARS Retailers 1942 Goal - Page 8 BOND SALES SOAR - Page 9 NEW F BOND Available - Page 9 FIELD ORGANIZATION NEWS - Pages 10 to 13 BATTLESHIP ARIZONA the Goal of UAW - Page 14 RAILROAD WORKERS to Invest Back Pay - Page 14 NEW APPEAL for Allotment Plan - Page 15 ALLOTMENT Progress Notes - Page 16 FOR THE SCHOOLS - Page 17 TO THE LADIES - Page 18 RADIO Programs - Page 19 RADIO MINUTE MEN Being Recruited - Page 19 BUILDING AND LOAN Association Recruits Dollars for Defense - Page 20 MISSISSIPPIANS Line Up for Bonds - Page 20 -2- Mr. Graves pointed out that sales of the Series F and G Bonds plus the sales of the Series E Bonds of the $500 and $1000 denominations accounted for an estimated $1 705,000,000 of the seven month sales total of $2,008,000,000 for all denominations of all three Series. From this fact it might be assumed that approximately $303,000,000 of the total investment in Defense Savings Bonds has come out of current earnings rather than accumulated savings. "This would mean that wage earners were investing in the bonds about $40,000,000 a month," commented Mr. Graves, "and that's only one-tenth of the job." AS A GOAL FOR STATE ORGANIZATIONS Mr. Graves tentatively suggested: "TRIPLE THE PRE-VAR MONTHLY AVERAGE OF PURCHASES OF SERIES E BONDS OF ALL DENOMINATIONS." News Letter News Letter CHICAGO CONFERENCE CHICAGO CONFERENCE (Continued) shortly after the first of the year a nation wide canvass would be launched to get every person who has a regular income to pledge himself to make a regular, systematic invest ment in Defense Bonds for the duration of the var. Jerry Costello Albany News PLEDGE CARDS. in triplicate will be prepared by the Treasury Department for use in connection with this canvass. COMPLETE INSTRUCTIONS as to the procedure to be followed in distribut- ing these cards and suggestions as to the handling of this tremendous undertaking will be forwarded to State Administrators in the near future. THE SECOND SPEAKER at the first general session of the conference was Peter Odegard, professor of political science at Amheret College and a special consultant to Secretary Morgenthau since the inception of the Defense Savings Program. His inspiring address will long be remembered by those who attended the Chicago conference. THE RESIGNATION OF MR. JOHNSTON as field director, effective January 1, was announced by Mr. Graves at the conclusion of the first general session. Mr. Johnston, who is returning to his company, the Metropolitan Life Insurance Company in New York City, will be greatly missed by all members of the Field Staff who have been privileged to become acquainted with him. During the past nine months he has devoted himself, heart and soul, to the develop ment of the field organization. Fortunately he will continue to serve the Treasury in a consultative capacity. MR. ROBERT W. SPARKS, an associate field director since early in May, has been appointed field director to succeed Mr. Johnston. Mr. Sparks is on leave from his position as vice-president of the Bowery Savings Bank of New York City. SECTIONAL MEETINGS were held Tuesday afternoon and Wednesday morning. The conference was divided into four sections of approximately equal size. Each section took up each of the principal phases of the Program with twelve representatives of the Washington office, moving from section to section and leading discussions of those phases of the program in which they are specializing. FORDEFENSE fense Savings Program. BUY THE FINAL SESSION of the conference was a luncheon meeting tendered to the delegates by the Federal Reserve Bank of Chicago at which Secretary Morgenthau was the principal speaker. Extracts from his significant address are presented on the next two pages of Rube Goldberg the News Letter. Sun. New York City SOME OF THE OTHER HIGHLIGHTS of this memorable luncheon meeting were: the introduction of the Secretary by Federal Reserve Bank President C. Young: the stirring, extemporaneous address by Missouri State Chairman, Branch Rickey: the "call to action" sounded by Gencral Charles G. Daves: and the timely and pertinent remarks of Texas State Administrator Frank Scofield. Oregon State Chairman Palmer Hoyt. Massachusetts State Administrator Daniel J. Doberty, New York State Chairman Robert W. Patterson, Utah State Administrator Charles R. Mabey and Termont Chairman Levi P. Smith. A NEW APPRECIATION of the importance of the Defense Savings Program, and a new and better understanding of the goal to be reached and the meth- ods to be used to achieve this goal, came to all who were privileged to attend this notable gathering. In the words of Secretary Morgenthau: "The decks are cleared for action and it is up to us to follow through." . BUY . FORDEFFASE FROM THESE MEETINGS and the discussions which they engendered came a fruitful interchange of ideas and a spirit of confidence and determination on the part of state leaders that they could and would discharge the responsibility which they had accepted; and discharge it in such a way that citizens of their respective states would always be proud of the part which their state had played in the De- . TO BRING A DIRECT PERSONAL APPEAL to buy Bonds regularly to every one of the estimated 35,000,000 recipients of regular income in the United States, Mr. Graves announced that (Continued) THE FIELD STAFF'S ROLE "Without discounting the importance of the radio, press and other agencies of BASE impression, the ultimate success or failure of the Defense Savings Program will de- pend upon the work of this field organisation. It is, in the last analysis, through this channel that the Treasury hopes to approach its goal--the enlistment in national defense of every man, WOMAN and child in the United States." Dr. Peter Odegard. News Letter News Letter 'IT IS UP TO US TO FOLLOW THROUGH" "IT IS UP TO US TO FOLLOW THROUGH Extracts from Secretary Morgenthau's Address To the Defense Savings Staff delivered in Extracts from Secretary Morgenthau's Address (Continued) Chicago, December 17, 1941. OUR GOAL DECKS CLEARED Now that we have cleared the decks for action, it is up to us to follow through answering with a money figure because I have been much more interested, firstly, in reaching vest numbers of individuals, and, secondly, in absorbing current income rather than accumulated savings in the banks. But I will tell you now what my goal 18. what our goal shall be and must be. It is to reach quickly, within the next few months. every single recipient of regular current income in the United States, and to have every one of these 35 million people setting aside some part of their pay recylarly within the shortest possible time. And when I MAY 'some part of their pay, an not thinking merely of a token contribution. I mean a real investment, the very limit that each person can afford without actually taking food and other necessities from himself and his family. FOR ACTION "We must follow through, not only in terms of a few million individuals or a couple of billion dollars, but by a determined effort to reach every individual in this country "Not all of us can pilot a bombing plane or fire a gun from the deck of a battleship. Those of us who are too old or too young to get into uniform will be asked to work longer hours and pay heavier taxes and do without many of our accustomed comforts; but in this Defense Sanings effort we are not even being asked to give our money. We are just being asked to lend our money to the Government. to invest our savings for victory. OUR PROBLEM THE "That, it seems to me, is a call to which everyone will want to respond. We will want to do it to the very COUNTRY LOCKS limit of our ability. TO US of our anamies make any mistake about it, we are going to win it. Our allies in all continents, who have been fighting our battle with our common enemy for long, hard years, are looking to us, and also the oppressed peoples in the conquered lands who are now living in darkness - they, too, are looking to us to sweep that darkness away. "For that reason, it seens to no, our major effort now must be directed particularly at those in all walks "Inflation feeds on current income, rather than on the money that now rests in the vaults of savings banks. It may seem heartless to speak of excess spending on the part of millions of people in the middle and low income groups; but in wartime, in the face of a limited and dwindling supply of civilian goods, there is such a thing. In wartime, excess spending means the buying of any commodity that we can safely do without. "Therefore, the most effective course for us, as we have known from the very beginning, has been to enlist current income and to divert excess spending, to persuade our people to set aside a part of their pay every pay day in Defense Bonds and Stamps. Let's now make every DAY 1 EXCESS SPENDING Our fighting men in the Philippines and Iceland, in Hawaii and Wake and Midway, in all the posts of danger on all the seven seas, are looking to us to supply them with the planes and guns they need. The whole country is looking to us. right here in this room. to raise billions of dollars to win this var - and let none "Our problem, as you all know, is one of financing the enormously expanding cost of the var while avoiding the immense and dangerous evils of inflation. of life who receive regular pay from wages and salaries. "I have been asked many times whether we have a goal. a quota for the United States. I have always avoided THE GREAT TEST "It is by far the greatest test and the grandest opportunity that has ever come to our country. We in The this room must prove ourselves worthy of that challenge. words that Winston Churchill addressed to his own people a year ago can now be applied to ours: "Let us so bear ourselves, that if these United States should last for a thousand years, men will still say, 'This was their finest hour. IN day Bond Day (Underlining by the Editor of the News Letter) News Letter News Letter BOND SALES SOARI RETAILERS GOAL: ONE BILLION DOLLARS IN 19421 SALE OF ONE BILLION DOLLARS worth of Defense Bonds and Stamps is the 1942 goal of American retailers. Announcement of this goal was made on December 16, at the Chicago conference of Defense Savings leaders by Benjamin H. Name. President of the Namn Store, Brooklyn, New York and Chairman of the Treasury Department's Advisory Committee. "I an happy to announce upon behalf of the Retail Advisory Committee, that we have established a quota of one billion dollars for the sale, in 1942, of U. S. Defense Savings Stampe and Bonds by retail stores throughout the country," said Major Name. "In setting this large quota our Commit- tee has been mindful of the fact that it is several times in excess of the total amount raised by retail stores during the entire period of the last var. We believe however, that the men and women who are engaged in retail distribu- tion. will all welcome this concrete opportunity to show their mettle. Many reports from the field and preliminary sales figures being compiled Washington, indicate that the sudden increase in bond sales which was America's immediate reaction to war was not a more spurt and that sales everywhere are continuing at new high rates. Supplies of both bonds and stamps have at times been exhausted in many cities despite combined efforts of Federal Reserve Banks, the Post Office Department and the Bureau of Engraving and Printing to produce and distribute ample supplies to meet all demands. in In last week's News Letter, we presented figures comparing sales by representative large city banks in the first three days of war with the sales made by later these figures banks comparing in the first sales three during days the of first the previous week of week. war with Here sales are during some the previous week:- In 45 key cities, banks reporting to the American Bankers Association sold 177% more Defense Bonds during the second week of December than they did during the first week. Some notable percentage increases: THE RETAILERS "QUOTA" of one billion dollars is approximately two per cent of the estimated volume of retail sales for the coming year. To achieve this objective retailers will redouble their efforts to sell bonds and stamps to their customers, solicit orders from their wholesale sources of supply, and substantially increase their own purchases of both bonds and stamps. Clerks who handle cash will be trained to say, "May I give you part of your change in Stamps?" Contests among sales-clerks, special Defense Savings window displays. and every form of advertising will be used to swell the volume of Bond and Stamp sales. Customers who buy merchandise through charge accounts will be given an opportunity to buy bonds in the same way. In that event the retailers will accept bond orders from customers, assume the credit risk, buy the bond from a bank, and deliver the bond to Palm Beach, Fla.-First National Bank - 8,691% Baltimore, Md. -Union Trust Company - 3,477% Los Angeles, Calif.-Security-First National Bank - 4545 Chicago, ni.-Harris Trust and Savings Bank - 621% In 91 representative cities, post offices reported an increase of 146% in the sale of Defense Bonds during the first week of the war. Particularly outstanding increases were reported by the post offices in Phoenix, Aris. 562% Dallas, Tex. 503% Miami, Fla. 487% Providence, R. - 363% Syracuse, N.I. 337% Sacramento, Calif. 328% the customer. * All officers and employees will be urged to buy bonds through pay roll allotment plans or to join *Buy-a-Stamp-e-Veek clubs. Upon concluding his summary of the Retailers Program, Major Namm declared: "Retailers neither seek nor expect any public favor for doing what we regard as our simple patriotic duty. And ve shall always keep in mind that such effort as we may make, no matter how large it seems to us, will always be small in comparison with the effort and sacrifice that will be made by the young man of our country who are giving of their all in the armed defense of our nation." NEW BOND FOR ORGANIZATIONS A new denomination Defense Savings Bond will be available in the Defense Series F, on and after January 1, 1942. Maturity value of the new bond will be $25 and the issue price $18.50. The new bond is being provided because many small associations have found it difficult to participate in the Defense Savings Program. The sale of Defense Savings Bonds of Series E is restricted to individuals; therefore, the smallest denomination bond available for issue to associations and corporations has been the $100 denomination Series F Bond. The new $25 denomination Series F Bond will meet the demand of many small associa- tions and organisations for a security in which they can conveniently "invest for Defense" funds which might otherwise contribute to the stream of current consumer spending. -8- News Letter News Letter FIELD ORGANIZATION € IOWA. Members of the Burlington Youth Council. all of high school age, sponsored a widely publicized and well attended "Defense Savings Stamp Dance. December 11. To gain admission, an individual or a couple had merely to show possession of a Defense Stamp album containing at least four 254 stamps. Members of the Youth Council put on an enthusiastic stamp selling campaign during the ten days prior to the dance, more than redoubling their efforts after the attack on Pearl Harbor. Stamps and albume were also available at the door for dancers who had not previously purchased them. Expenses of the DISTRICT OF COLUMBIA. A special Defense Bond committee composed of faculty and student representatives has been formed at Howard University famous Negro educational institution in Washington. President Mordecai Johnson reportsof that up to December this committee of the purchase more than $2,100 of13, Defense Bonds, had secured pledges FLORIDA FLORIDA. The state WPA Art Project has vided posters in full color in 100 the striking regional otherDefense to be proused conferences and Defense Savings Stamp Dance were borne by the Burlington Lodge of Elks, which also awarded prizes to individuals and teams selling the largest number of admissions. When the boys found themselves taking orders for Bonds as well as Stamps, the lodge promptly offered a suit of clothes to the boy whose Bond orders totalled the highest amount. Savings meetings. One of these is reproduced at the left. "Florida Buys For Victory" is the slo- gan incorporated in all of these posters. The 700 students of Shenandoah Junior High STATES INTENNE BOXDS INDIANA MAINE. Purchase of a $1,000 Defense Bond by Androscoggin Local 280 of the Textile Workers Union of America. CIO, was announced December 15 by School at Miami, Florida, recently heard Mr. T. A. Cadore. Bond Superintendent of the Miami Post Office, outline the efense Savings Program. Following his address, several employees of the Miami Post Office spent more than two hours in the building, selling Defense Stamps. Thousands of dollars worth of Defense Bonds and Stamps are being given away by the Indiana Flour Company in a new sales promotion. Any sack in which Tender Flake and Swans Down flour is packaged is now exchangeable for a 10-cent Defense Stamp. Dealers, jobbers and salesmen of the company are competing for special prises of Defense Stamps and Bonds. Radio, newspaper and outdoor advertisements which announce this new sales promotion plan explain Defense Savings Stamps, their value, how they help the country, and how they lead toward the ownership of Defense Bonds. State Administrator John L. Fahe co-operated with the general manager of the Indiana Flour Company, John Jennison. in developing this campaign. Mr. Jennison is a new member of the Trade Division of the Florida State Committee. GEORGIA. The Grand Theatre in Fitzgerald shows a special Defense Bond movie trailer at each of its performances. The trailer, with martial music and a the flag theatre. background, urges movie goers to purchase Defense Stamps as they leave George Jabar. State Director of the union. Mr. Jabar also said the local would campaign among its own members for the sale of Defense Bonds and Stamps. The Brunswick Savings Institution has volunteered to keep the Defense ( UNITED FIELD ORGANIZATION NEWS Stamp Albuma belonging to school children of Brunswick in its vaults and to send them by special bank messenger to the schools on each regular "Stamp Day." The bank messenger also carries to the schools a supply of stamps for resale to the students. MARYLAND. Governor Herbert R. O'Conor has accepted appointment as honorary chairman of the Maryland Defense Savings Committee. MASSACHUSETTS. Boston's First National Bank reports that, as a result of the mailing to its customers of the bank draft form illustrated on page 5 of the News Letter for November 15th, hundreds of its customers have authorized regular monthly purchases of Defense Savings Bonds. MINNESOTA. Defense Bonds as bonuses for overtime work is the plan which the Northern Pump Company of Minneapolis is using with highly gratifying results. The company is engaged in producing essential equipment for the areed forces. Faced with the problem of working the plant seven days a week, it first offered men volunteering for the late Saturday night and early Sunday shifts, time-and-a-half overtime pay. Then the company put up Defense Bonds as special prizes for the men on these two shifts. As each work- or enters the plant, he puts his card into a barrel, and at the end of the INDIANA. All city and county executive chairmen in the state were invited to attend a conference in Indianapolis, December 19. This conference was called by State Chairman Pulliam for the purpose of reporting on the Chicago conference and passing along to the local committees some of the inspiration and information secured from this meeting. On a recent Saturday afternoon. practically every county Farm Bureau in the State held meetings at which representatives of local Defense Sav- ingo Committees were guest speakers. 10 shift names are drawn. The man whose name is drawn first wins a $100 Bond, plus his overtime. Several $50 and $25 Bonds are also awarded. The CODpany estimates that this plan produces an extra 4,000 non-machine hours of production per week. In Austin, the county Defense Savings Committee, M. F. Dugan. chairman, has developed and put into effect a "creamery check allotment plan" to enable farmers who are regular creamery suppliers to buy Defense Bonds conveniently and systematically. 11 News Letter News Letter FIELD ORGANIZATION NEWS FIELD ORGANIZATION MISSISSIPPI. The City of Tupelo has made an interesting decision: it has decided to distribute to customers of its electric distribution system a $31,000 rebate in the form of Defense Bonds and Stamps. Ordinarily, the surplus earnings of the Tupelo system would be passed on to customers by further reductions in electric rates. This year, however, it was felt that to encourage increased use of power by a reduction in rates would not be advisable in view of the heavy demands which defense industries are making on the power resources of the Southeast. Distribution of the surplus in Defense Bonds and Stamps was decided upon by city officials as both a practical and a patriotic solution to this unusual problem. MISSOURI The special milk bottle CAD shown at the left was designed by the Robert S. Leonard Company of Kansas City. The company reports that dairies in Missouri are now buying the new cap in large quantities. DONOR State and local labor organizations in this state had invested, prior to November 15, more than $273,000 in Defense Bonds. State Administrator Dan M. Nee or Deputy Administrator Earl H. Shackelford have personally appeared before and addressed most of the labor organisations reporting Defense Bond purchases. NORTH CAROLINA. The unusually attractive Defense Savings float shown at the right was entered in Charlotte's annual Christmas parade by the American Trust Company of Charlotte. In addition to the "Give Defense Bonds legend at the side, a large replica of a Defense Bond served as the background of the float. OKLAHOMA. Oklahoma City's "Victory House" -- formerly "Defense House" or "Treasury House" was formally dedicated on the evening of Decem- ber 4. At the dedication ceremonies K. S. Mame. president of the Phillips Petroleum Co., which constructed the "Victory House" as one of its contributions to the Defense Savings Program, formally presented it to Hugh Harrell. chairman of the Oklahoma City Defense Savings Committee. Other speakers included Frank Phillips. chairman of the board of Phillips Petroleum Co.: U. S. Senator Elmer Thomas: Gale F. Johnston. Field Director, and Earford Powell. information director of the Defense Savings Staff: State Administrator H. C. Jones: and Neal Barrett. chairman of the County Defense Savings Committee. Below are pictures taken at the dedication ceremonies. MONTANA. This year a Defense Bond instead of a gun will be the prize for the best trapper in Garfield County, we are informed by E. L. Alexander, Defense Savings chairman for the county's wool growers. A gun for the Army instead of one for a Garfield County hunter! NEW JERSEY. The Banking and Finance Division of the Newark Defense Savings Committee sponsored a Defense Stamp booth in connection with the recent display of a full-size replica of the 28 ton M3 Army Tank in the showroom of a Newark Chrysler dealer. Officers and BUY US.DEFENSE SAVINGS STAMPS HERE employees of all commercial and savings banks in Newark volunteered their services in manning the booth. according to Ray E. Mayham. president of the Newark Clearing House Association and chairman of the Banking and Finance Division of the Newark Committee. NEW YORK. The advertisement reproduced at the right has been attracting attention in New York City newspapers during the past several weeks. Attention MR STORK THE AMERICAN "Victory House" hostesses and, from left to right, K. S. Adams, Senator Elmer Thomas and Frank Phillips. Replica of a ship's bridge erected near the "Victory House" to serve as a stage for the many special events planned for each day. eral pieces of mili- tary equipment on dieplay near "Victory House. OREGON. Enthusiastic Defense Bond rallies, each with a speaker and special features on the program, were recently held in the five main CODmunities of Yamhill County multaneously. A talk on bonds was made to all five groups, over Radio Station KEX, by State Chairman Palmer Hoyt. as leading event of the evening. County Chairman J. C. Compton, accompanied by State Administrator Ted R. Gamble and Deputy Administrator George H. Godfrey, by also appeared on the programs, travelling from one meeting to another fast car. 13 12 Mr. Phillips and Senator Thomas try out an Army Jeep, one of sev- News Letter News Letter ALLOTMENT ALLOTMENT UAW'S GOAL - THE BATTLESHIP ARIZONA! Railroad Brotherhood and Unions Plan Bond Campaign (Continued) The United Automobile, Aircraft and Agricultural Implement Workers, CIO The suggestion of the Secretary has been heartily endorsed by Mr. Luhrwho has addressed a letter to the chief executives of the 20 railway labor affiliate with an active membership of more than 700,000, will shortly launch a campaign for the purchase of $50,000,000 worth of Defense Bonds by its nonbers and of ficers. organizations sen, affiliated with Railway Labor Executives Association, urging them "to exercise extraordinary powers of appeal to their membership to fall in line with the Secretary of the Treasury's recommendations." On December 20, R. J. Thomas, president of the UAW, wired Secretary Mor- genthau: of pride and satisfaction to the entire industry. a "As part of our defense of America from aggressor nations I am anticipating today a drive among 700,000 auto and aircraft workers to sell to our entire membership and of ficers in as short time as possible $50,000,000 worth of Defense Bonds. With the allotment plan already installed by most railroads, and with active support now being mobilized for the Defense Bond Campaign by railthe employee organisations, there is solid assurance that railroad workers will road soon establish a record for Defense Bond purchases which will be a source "The son of a UAW-CIO member went down on the Arizona. He was Secretary Morgenthau Asks Business Men to Install Allotment Plan killed in action. We are answering that dastardly attack by pur- chasing these Defense Bonds to replace the U. S. S. Arisona as In a letter addressed in the first instance to the executives of approxi1,500 business and trade associations and forwarded by them to individ- speedily as possible in order to stop forever the brutal aggres- sion of our enemies.' sately ual business executives throughout the country, Secretary Morgenthau has asked that "every American business concern" establish a voluntary pay roll allotment plan or similar machinery for systematic savings as one of its contributions to the war effort. Additional information about this great Bond campaign will be given in the next issue of the News Letter. "The pay roll allotment plan for the purchase of Defense Savings Bonds provides an effective way for you and your employees to march together against a common enemy-enemy which seeks to destroy free enterprise throughout Railroad Brotherhoods and Unions Plan Bond Campaign A similar pledge was sent to the Secretary by B. M. Jewell, president of the Railway Employees Division of the American Federation of Labor and, during the recent wage negotiations, spokesman for the 14 organisations of "non-operating" rail workers. "The representatives of approximately 800,000 railroad employees in session today have agreed to return to their respective carrier properties and urge their membership energetically to participate in the campaign to purchase Defense Bonds," wired Mr. Jewell on December 18. the world," the Secretary's letter says in part. 1 Pledging "unreserved support of the Victory Program," the Railway Labor Executives Association, through its executive secretary, J. G. Luhrsen, wired Secretary Morgenthau on December 11, that railroad brotherhoods and unions were "formulating plans on a nation-wide basis for the systematic purchase of Defense Bonds. "In this plan you provide the machinery-your employees provide the money. Since the success of the plan is dependent upon enthusiastic and informed participation by your employees, it is urgently suggested that you take this matter up with your employees through your customary channels of communication with them. Thus, you will be assured that they understand and endorse the terms of the plan.' State CIO Councils Urge Members to Buy Bonds In his reply to Mr. Luhrsen, Secretary Morgenthau made the suggestion that railroad workers invest immediately the $75,000,000 which they will soon receive in lump sums as settlement of wage increases dating back to last September 1. The Secretary pointed out that the immediate investment of these accrued back wages would "finance the building of a fleet of heavy bombers or a battleship, as a direct and effective contribution to the victory which this nation has set itself to win." On December 16, the Maryland-District of Columbia Industrial Union commit- Coun- cil passed a resolution calling for the establishment of Defense Bond for tees by all affiliated local unions #for the purpose of creating machinery and the promotion of the sales of these stamps and bonds among our membership to the public at large." Similar resolutions of endorsement have been adopted recently by the Industrial Union Councils of Connecticut and New Jersey. -15 14 News Letter News Letter FOR THE SOHOOLS ALLOTMENT Comments Allotment Progress Notes:- Sharing America Each of the 1,200 employees of the Charleston, S. C. Navy Yard has pladged himself to purchase one or more Defense Bonds. Announcement of this pledge was made at the launching of two destroyers on December 20, as an additional indication that Navy Yard workers were determined to meet the challenge of A DEFENSE SAVINGS PROGRAM FOR SCHOOLS Pearl Harbor. -A State Director of Curricula in a Rocky Mountain state. PREFACE (1,200 employees). "Information of the type contained in this America are fighting in the ranks of that armed forces Sharing America bulletin is very timely and will be very useful in the school program." A The Crosley Corporation, in conjunction with Crosley Local No. 1061, InBrotherhood of Electrical Workers (AFL), is installing the allot... ment plan for its 3,500 employees, according to a recent announcement by R. C Congrove, vice president of the corporation. Subscriptions for the purchase of least $150,000 worth of Defense Bonds are to be sought in a drive now getting under way. Harold Latimor, president of the I. B. E. W. local and genoral chairman of the allotment campaign, who is appointing committees to conduct the campaign in each department of the plant, reports that many workers have volunteered to help with the campaign. A feature of the drive will be the playing of "Any Bonds Today?" over the plant-wide public address system Southern State Supt. of Education. They of vital inThe All of the Lycoming Hosiery Mills' 225 employees in Philadelphia and Prepared by THE DEPARTMENT with THE U. OFFICE OF EDUCATION Pottstown, Pa. are allotting three per cent of their weekly salaries for the purchase of Defense Stamps. The company contributes an additional one per cent and the total Defense Savings allotment is paid in Defense Stamps each pay day. The plan became effective Christmas Eve. each containing one 25 stamp will be presented by the company to all - ployees at meetings in the company's stores, warehouses and of fices throughout the country. At these meetings, employees will be urged to resolve to purchase Defense Stamps at the cashiers' windows each pay day. Sears, Roebuck & Company has installed the allotment plan for its more than 75,000 employees in all parts of the country. "I an particularly for correlating this with Printed copies of SHARING AMERICA (See COV- er, above.) are now available in sufficient quantity to supply every school teacher in America. Advance mailings will be made the first week of January to State Administrators, who are asked to distribute them among school principals and superintendents and find out how many more will be needed to supply all teachers in their states. Requests for copies of SHARING AMERICA should be made to State Administrators, who can obtain them from Washington. This suggested Program for schools has the approval of the Office of Education, and was prepared with the advice and consultation of the Commissioner John W. Studebaker, members of his staff and other leading educators. the teaching of regular subjects of the currioulun. - A Deputy Commr of Education of a New England State. "SHARING AMERICA will be helpful to school people. It brims over with suggested projects and ideas. City school superintendent in the capital of a Western State. a fine piece of work, and suggestions to better it will be very modest. Vice-pres. of a Midwestern State Teachers Asan. -16- The Director of School Savings, in a large Northwestern city. impressed with the plans 1 Every one of the 80,000 employees of the F. W. Woolworth Company will soon be started on the way toward the ownership of a Defense Bond. On January 2, according to Executive Vice-President Clark L. Motley, Defense Stamp Albums portance to the development of the Defense Savings Program each morning. selves to invest at least 10% of their wages in Defense Bonds "for the duration." David Schatz is the chairman of the workers committee in charge of the campaign. basis. Elementary Education and Records of 100% participation in the pay roll allotment plan have been made by two large cotton mills in South Carolina-the Sonoco Products Company of Hartsville (1, 300 employees) and the Inderson Cotton Milla of Anderson Approximately 300 employees and executives of Albert Turner, Inc. of of New York City, meeting recently at headquarters of the Amalgamated Clothing Workers of America (all of them being members of this union), pledged then- especially happy to read the cautions against putting Defense Savings on a competitive 17 News Letter News Letter ON THE AIR TO THE LADIES Mrs. Ostrom Talks About Democracy Radio Programs for the Coming Week: Out in Chicago, at the Defense Savings Sessions last week, Mrs. Henry E. Ostrom, Chairman of the Women's Organization Committee of the Marion County (Indiana) Defense Savings Staff, presented her Indianapolis women's program as a lesson in "practical democratics." Monday, December 29 "We are fighting the war for Democracy out in Indianapolis, Mrs. Ostrom said. And we believe that in order to win for Democracy abroad, we've got to fight democratically on the home front. In the Defense Savings program "FOR AMERICA WE SING" Dr. Frank Black's Orchestra and Chorus GUEST STARS: Thomas L. Thomas Vivian della Chiesa, soprano Tuesday, December 30 we have been urged to get all of the people to buy Bonds and Stamps, and that is what we are going to try and do. At the same time we will have failed before we have begun if we do not give all of the people representation on THE TREASURY HOUR: Women's Committee radiates to tens of thousands of women. "We are trying to make our Indianapolis women feel that the Defense Savings Program is their program, regardless of race, creed or politics. For we know that when they understand that they will make every sacrifice to buy Bonds and Stamps. We also know from experience that salesmanship is twice as effective with most people if the salesman is one of their own leaders-someone they know and trust." This is what is known as "practical democratics. Women Leaders Attend Chicago Conference Attending the sessions of the Defense Savings conference held in Chicago, last week, were committeewomen from the Illinois and Chicago and Cook County area as well as of "MILLIONS FOR DEFENSE" 8:00-9:00 PM (EST) NBC Blue Network Variety program with leading entertainers of stage, screen, and radio. our Defense Savings Committees. "That is why, in setting up the Women's Organization for Marion County-which incidentally includes 1/7 of the population of Indiana--we have tried to do it democratically. Our committee includes Democrats and Republicans, Catholics and Protestante, Jews and Gentiles, Negroes and Whites, College and Non-College women. Each member is President of a large, influential organization of the city or county, and in most instances the organization is a council or federation with numerous units such as clubs, branches, chapters or auxiliaries. They are key women who have natural access through the regular channels of their organizations to hundreds of women. Thus our 9:30-10:00 PM (EST) NBC Blue Network Thursday, January 1 AMERICA PREFERRED" 9:00-10:00 PM (EST) Mutual Network Alfred Wallenstein's Orchestra: Deems Taylor, Commentator GUEST STARS: Outstanding musicians of foreign birth RADIO MINUTE MEN are now being recruited for the Defense Savings Staff by a special committee headed by David Sarnoff, chairman of the board of the Radio Corporation of America. The Minute Men will be widely known Americans representing many walks of life who will make brief talks on the Defense Savings Program on the three regularly scheduled Treasury programs and on other nationally sponsored radio network shows. Plans are also being developed to recruit Radio Minute Men to appear on local broadcasts of every radio station in the country. "ON GUARD AMERICA" is the title of a series of five-minute dramatic progrand on Defense Savings being written for the Treasury Department by 16 of the country's leading radio script writers. The series will be released to all radio stations at an early date. A SERIES OF RADIO PROGRAMS to boost the sale of Defense Bonds and Stamps was inaugurated December 1 in Memphis by Mayor Walter Chandler over Station WMC. Prominent local speakers, including members of the Shelby County Defense Savings Committee, have been secured for the series. An essay contest on the subject, "Why We Should Buy Bonds for Defense," is being conducted in connection with these programs, with Station WMC offering a $25 Defense Bond as the ficials of several large women's or- first prise. Seated on the sofa in the picture at the right are: Mrs. Kenneth F. Rich, Women's Chairman for Illinois, and Mrs. John Alden Carpenter, who will head up the women's organization for Chicago and the Cook County area. 18 At the right, one of a number of special announcements rushed to all radio stations by the Radio Section of the Defense Savings Staff within a few days after the declaration of war. E ganizations. 19 - News Letter "RECRUITING DOLLARS FOR DEFENSE" JACKSONIANS RESPOND Recruiting DOLLARS FOR DEFENSE BUY DEFENS SAVING BOND To the President's historic address of This is the slogan of the Hollywood Building & Loan Association in Los Angeles. Above, Los Angeles Postmaster Mary D. Briggs unfurls the association's banner in the presence of an R.O.T.C. color Tuesday evening, December 9, by lining up Wednesday morning to buy Defense Bonds. The above picture was taken at that time in the Deposit Guaranty Bank & Trust Com- pany, Jackson, Mississippi. CHINESE CHARACTERS guard from Hollywood High Make the Minute Man School. FIREMEN INVEST UNITED STATES SAVINGS BONDS poster understandable to customers of the Oriental Branch of the Bank of America in San Francisco. Inrest in Liberty. SONDS TAMPS JOS SCHLITZ BREWING COMPINE In Defense Bonds. Above are officers of the Portland (Oregon) Fire Fighters' Association, Local No. 143, looking over one of their recently purchased securities. The association has already invested more than $2,000 in Defense Bonds. The poster shown above, the con- tribution of the Schlitz Brewing Company, may now be seen on more than 2000 billboards in 413 cities. In full color, it is indeed an impressive display. - 20 - PRINTING OFFICE 243 December 27, 1941 TO: DR. HAAS FROM: THE SECRETARY These estimates for sales for January, February and March are ridiculously low and it is absolutely no basis on which to figure the production at the Bureau of Engraving and Printing CONFIDENTIAL TREASURY DEPARTMENT 244 INTER OFFICE COMMUNICATION COPY DATE December 26, 1941 Mr. Graves TO FROM Mr. Haas Subject: Estimated number of units of Series E savings bonds by denominations and by months through May 1942. In accordance with your verbal request, Mr. Reagh has prepared a schedule showing the estimated breakdown of Series E defense bond sales by denominations and by months through May 1942. In accordance with your instructions, the attached schedule is based unon the assumption that the monthly sales of Series E bonds will increase from the present level to about $450 million in May 1942. It VAT further assumed that the increase in the number of units of each would be uniform from January through May 1942 when the denomination distribution would agree with the estimate given in my memorandum to you dated December 24, 1941. On the basis of actual sales through December 23, December sales will approximate $300 million. Sales in January will undoubtedly fall below this figure. The estimate of $200 million for January, although only about two-thirds of the December sales is approxinately double the actual sales in November. It should be noted that the distribution by denominations depends largely on the volume of total sales, i.e., the larger the volume of sales the greater the probable proportion of the smaller denominations. Attachment ( 245 CONFIDENTIAL COPY UNITED STATES DEFENSE SAVINGS BONDS - SERIES E Number of Units by Denomination October and November 1941 -- Actual December 1941 - May 1942 -- Estimated Units by Denomination (in thousands) $100 : : : $50 : : : $25 $500 $1,000 : Month Issue Price (in millions) Total 62 1,484 $123 52 1,430 109 128 4,300 300 100 80 3,085 200 878 105 82 5,291 262 1,168 1,085 110 85 7,498 325 1,484 1,292 115 88 9,704 388 6,725 1,800 1,500 120 90 11,910 450 8,400 : 1941 October 706 269 382 65 November 711 257 354 56 December 2,240 760 1,020 152 January 1,700 535 670 February 3,375 851 March 5,050 April May December 26, 1941, Office of the Secretary of the Treasury, Division of Research and Statistics. 246 December 27, 1941 As a result of my laying the law down to Harold Graves this morning, he sent the following cable to all the State Administrators and Chairman. 247 FORM STANDARD NO. 14 Office of the Secretary FROM PRESIDENT THE 1926 MARCH BUREAU TELEGRAM CHG. Defense Savings Staff APPROPRIATION Expenses of Loans OFFICIAL BUSINESS-GOVERNMENT RATES 10-1724 December 27, 1941. All State Administrators and State Chairmen: The Secretary desires that in every State a drive be made immediately to secure adoption of payroll allotment plan by all employers of five hundred or more, this to be completed if practicable by January tenth. Stop. It will be possible to make contact with all such firms not already reached on basis of cards furnished the State Administrator by Internal Revenue. Stop. Contact should be by visit if possible, otherwise by letter enclosing our descriptive amphlet and urging adoption of plan. Stop. Insurance underwriters an. other qualified volunteers should be used on this project to the fullest extent necessary. Stop. When firms employing five hundred or more have been covered, drive should be continued as rapidly as ssible to include employers of more than one hundred, beginning with the largest. Stop. On January tauth, please submit to the to the Secretary by air mail list of names of all companies in the State which have agreed to adopt the plan, giving for each one the address and the approximate total number of employees on payroll. Stop. This list should include firms previously reported to Washington headquarters. Stop. Similar lists of firms subsequently agreeing to adopt plan should be submitted air mail each Saturday until project is completed. Stop. This matter is urgent and should take priority over all other activities excepting only the completion of local committee organizations in more populous communities. Stop. Acknowledge. By direction of the Secretary: HAROLD N. GRAVES Assistant to the Secretary. Under Secretary's Office - 222-1/2 248 Exp. Loans DEC 27 1941 To Presidents, Federal Reserve Banks: Boston, Mass. New York, N. Y. Philadelphia, Pa. Cleveland, Ohio Richmond, Va. Atlanta, Ga. Chicago, I11. St. Louis, Mo. Minneapolis, Minn. Kansas City, Mo. Dallas, Texas San Francisco, Calif. Any organisation incorporated under the laws of any state or the District of Columbia which in your opinion would issue a sufficient number of Series B bends to their employees to warrant designation may be designated subje of to termination at any time an issuing agent for such bonds under the conditions stated hereinafter and you are hereby authorised to designate and qualify say such corporation applying for such designation. Any such applications made to your bank should be by the corporation over the official signature of the President or any vice president setting forth (a) that it operates a payroll alletment plan and (b) that it agrees, if designated an issuing agent, to (1) remit in advance the full issue price of all bonds requisitioned; (2) comply with Treasury Circulars 653 and 530 as revised; (3) comply with instructions relating to transactions in and accounting for the bonds and stubs thereef and (4) be responsible for acts of its officers and employees in the custody, issue and sale of the bonds STOP The Treasury will interpose no objection if in your judgment further requirements or stipulations should be imposed is any instance. 249 Upon receipt of the foregoing is satisfactory form your beak should advise the corporation of its designation and furnish appropriate instructions for carrying out the required duties. The funds received in propogment for the bond stock sequisitioned should be deposited is the Treasurer's general account as unclassified sales of United States Savings Bonds eyebel No. 48032 until the stube representing such bonds are received in proper order at which time said account should be charged is amount corresponding to total sale value represented by the stube and a 14kc amount credited as a public dobt reseipt in the usual manner. 20 is important that elube be returned to you as promptly as possible. Dating stamps should be furnished those agente by your bank. the issue date of each bond will be the first day of the month is which the payrell deductions of the employee whose same is to be inscribed thereon accusulate to the full issue price of the bond to be issued, provided the issue date shall not be earlier than the first day of the month next proceding the month in which proporment is made to your beak. The dating story imprint will show the current date on which the board is inscribed. Federal Reserve Seaks will be authorised to reimburse corporations designated as leaning agents for accessary postage and registry fees. All provisions of Circular 657 inconsistent with the foregoing are hereby vaived. In authorising this procedure the Treasury Department accuses so responsibility to my parees by reason of payroll deductions w the corporation or the application by such corporation of such deductions to the purchase of Hmg N. - sa. bonds. Initialed by EDB-RR-HZ-TWC-ELK-WSB-GBaves-GCH-Tickton-WH-DWB EDB10W 12-26-41 IDENTIAL UNITED STATES SAVINGS BONDS Comparative Statement of Sales During First Twenty-two Business Days of December, November and October 1941 (October 1-25, November 1-28, December 1-26) On Basis of Issue Price (Amounts in thousands of dollars) October $ 82,799 $ 36,563 $ 34,205 $ 46,236 $ 2,358 183,417 69,176 65,762 114,241 105,740 18,051 100,260 99,968 18,530 100,746 160,475 7,874 25.914 $224,050 $219,244 $194,264 : $418,314 over : November over October 126.5% 6.9% 3,414 165.1 5.2 5.772 151.8 43.6 25.8 5.8 479 - 486 - $ 4,806 86.7% - 2.6 - : : Total October : Series F - Banks Series G - Banks 266,215 25,925 126,174 : Series E - Total : Series E - Banks over November : Series E - Post Offices over November December Percentage of Increase or Decrease (-) : December : November : : : Item or Decrease (-) : December : November : Sales : Amount of Increase .5 2.2% December 27. 1941. Office of the Secretary of the Treasury, Division of Research and Statistics. 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 - December 1941 On Basis of Issue Price (In thousands of dollars) Post Office All Bond Sales Bank Bond Sales Bond Sales Series F Series G Total Series E Series F Total Series E Series G Series E $ 1,333 $ 7,220 $ 12,458 $ 6,880 $ 1,333 $ 7,220 $ 15,434 $ 2,976 $ 3,904 2,592 2,734 4,036 4,805 2,293 5,750 5,289 7,530 12,357 2,776 8,964 8,893 12,292 18,314 5,725 3,821 4,244 6,447 6,820 3,294 623 1,229 1,510 2,411 2,015 1,001 623 5,750 5,289 7.530 12,357 2,776 10,193 10,403 14,703 20,329 6,726 1,011 3,810 4,996 2,612 3,423 3,768 2,120 9,585 9,475 6,668 8,905 9,437 7.734 8,046 5,706 5,217 6,672 7.785 7.798 1,011 3,282 1,828 1,651 1,909 2.773 2,767 4,764 3,877 3.566 4,763 5,012 5,030 3,810 4,996 2,612 3,423 3.768 2,120 12,866 11,304 8.320 10,814 12,211 10,501 1,022 1,180 1,337 1,172 1,270 4,462 1,901 6,327 6,826 5,214 5,921 17,162 6,750 17,257 19.793 16,591 19,081 18,864 6,069 13,914 17,012 16,201 15,981 1,022 7,185 2,113 4,164 5,382 5,995 4,091 11,679 3,956 9,750 11,630 10,205 11,890 1,180 1.337 1,172 1,270 4,462 1,901 6,327 6,826 5,214 5,921 24,347 8,863 21,421 25,175 22,586 23,172 2,490 1,972 1,629 8,067 6,831 8,900 33,826 19,445 23,613 34,185 15,035 16,698 2,490 1,972 1,629 8,067 6,831 8,900 44,742 23,838 27,226 24 10,916 4,393 3,613 23,269 10,642 13,085 3,536 10,076 43,547 39,527 10,076 53,140 26 29,934 3.536 9,593 $ 25,925 $126,174 $335,515 $266,215 $ 25,925 $418,314 $183,417 $126,174 $ 82.799 Date December 1941 1 2 3 4 5 6 8 9 10 11 12 13 15 16 17 18 19 20 22 23 Total 870 726 1,152 656 601 491 719 658 584 893 870 726 1,152 656 601 491 719 658 584 893 A December 27, 1941. Office of the Secretary of the Treasury, Division of Research and Statistics. 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. 252 TREASURY DEPARTMENT OFFICE OF THE SECRETARY December 27. 1941 CONFIDENTIAL Received this date free the Federal Reserve Bank of New York, for the confidential information of the Secretary of the Treasury, compilation for the week ended December 17. 1941, showing dollar disbursements out of the British Empire and French accounts at the Federal Reserve Bank of New York, and the means by which these expenditures were financed. A FDilap-12/27/41 253 FEDERAL RESERVE BANK OF NEW YORK December 26. 1941 CONFIDENTIAL Dear Mr. Secretary: Attention: Mr. H. D. White I am enclosing our compilation for the week ended December 17. 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/ L. W. Knoke L. W. Knoke, Vice President. The Honorable Henry Morgenthau, Jr., Secretary of the Treasury, Washington, D. C. Enclosure Copy:vw:12-29-41 AND PROTCH ACCOUNTS (Millions of Dollars) CREDITS DEBITE Total Debits PERIOD Gov't Expenditures(a) Proceeds of Sales of Total Credits Other Debits Securities Other Gold first year of war (8/29/39-8/28/40)* War period through December 1940 Seoond_yearof war (Official)bb Week Ended December 17. 1941 Confidential Not Inor. (+) or Dear.(-) Credit((c) in Balance Gov't Expendi- Other Other Debits Total Credits of Gold tures (d) Sales Credits 866.3(e) 416.6(e) 449.7 1,095.3(e) 900.2 195.1(e) +229.0 900.2 196.2 +220.1 8.8 -30.1 Total Debits in Balance 1,793.2 605.6 1,187.61,828.21,356.1 52.0 420.1 35.0 2,792.3 1,425.6 2,356,72,793.1 2,109.5 108,0 575.6 10.8 878.3 421.4 456.9 1,098.4 1,193.7 274.0 722.1 - 13.2 38.9 4.8 34.1 8.8 20.1 0.8 2.0 154.1 449 0.3 0.5 0.3 0.2 0.3 0.3 0.3 0.5 150.1 133.6 - 21.5 16.1 16.1 0.4 0.2 - 15.7 +0.1 -0.1 2,203.0 1,792.2 410.82.189.8 - 1941 Aug. 28 Oct. 1 Oat. 2- Oat._29 Oct. 30 Dea, Dec Dec. 37. 140.9 109.0 105.9 35.0 77.3 KITY 176.2 150.9 156.1 111.6 44.5 134.6 20.6 39.2 29.5 14.2 6.4 32.1 24.6 13.2 7.1 1,0 - +35.3 0.3 - - - 1942 E ENDED Nov. 26 Deca 3 10 17 17.8 4.9 4.6 9.1 67.6 8.0 18.7 - 1.0 - - - - - of AUTHORIZED Emenditures Since DAN 19,1940) $19.0 England (through June 19,1940) 27.6 million England (since June 19,1940 42.1 Million *For monthly breakdown DOG tabulations prior to April 23 19cl ooFor monthly breakdown see tabulations prior to October 8, 1961. (See attached sheet for other footnotes) 8.1 67.6 8.0 18.2(c) - 11.5 +28.4 -21-5 0.9 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 (g) (g) - 0.2 0.2 (e) - = - Transfers to Bank of - -forCommittee Account Beek ended December 17, 1951 Cumulation from July 6, 1940 - 162.7 -0.1 (e) Willion million (a) (b) Includes payments for account of British Purchasing Commission, British Air Kinistry, Brittah Supplier Supply Timber Control, and Ministry of Shipping. Estimated figures based on transfers from the New York Agency of the Bank of Montreal, which apparently represent the proceeds of official British sales of American securities, including those effected through direct negotiation. In addition to the official selling, substantial liquidation of securities for private British account occurred, particularly during the early months of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy. According to data supplied by the British Treasury and released by Secretary Liorgenthau, total official and private British liquidation of our securities through December, 1940 amounted to $334 million. (c) Includes about $85 million received during October, 1939 from the accounts of British authorized banks with New York banks, presumably reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since October, 1939 apparently represent the acquisition of proceeds of exports from the sterling area and other currently accruing dollar receipts. (d) Includes payments for account of French Air Commission and French Purchasing Commission. (e) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day. (f) $8.5 million transferred from New York accounts of British authorized banks. (g) Because of17, further December 1941. attachments on the French account here, there were no transactions in this account during the week ended Strictly infidential GAAD and Canadian Government BAK Transfers Proceeds to Total Debite PERIOD Official British A/C December. 1940 of Other Total Debits Credits Gold Transfers Transfers from Official British A/C For Own For French Sales A/O A/C Other Credite Net Incr. (+) or Decr. (-) Total in Balance Debits Official British A/C Tet Proceeds to (-) or of Other Total Debits (Credits Gold Sales Other Credits in Balance 306.4 412.7 20.9 32.4 +181.7 31.2 3.9 27.3 36.1 30.0 + 4.9 504.7 38.7 6.1 16.6 460.6 534.8 20.9 110.7 41.0 +230.2 57.9 14.5 43.4 12.3 + 6.5 707.4 50.1 16.6 62.4 477.2 460,4 462.0 246.2 3.4 123.9 88.5 1.6 72.2 16.7 55.5 81.2 23.1 52.2 21.2 31.0 29.1 10.7 0.5 10.2 2.8 62.9 2.1 18.3 0.7 - 7.9 2.7 3.4 2.1 + 0.2 9.0 2.6 1.3 32.5 5.5 6.9 52.7 8.2 10.3 5.9 19.7 11.9 19.3 8.0 37.4 E.7 9.9 8.2 Second year of war (8/29/40-8/27/21⑉ 460.4 23.1 Aug. 28 - Oct. - - - - 1 1941 Oct. 2- Oct.29 Oct. 30 - Dec Dear. (-) 323.0 First year of war (8/29/39-8/28/40)* War period through DEBT CREDITS DEBITS 37.4 52.8 - 0.1 - 7.8 - 13.2 - - 17.7 - 20.3 11.6 + 9.0 Dec. D-Coc. 31 1942 WEAK ENDED: Nov. 26 8.2 14.4 10 3.9 17 17.8 14.4 3.9 - - 17.6 4.8 4.0 Weekly Average of Total Debits Since OutbreakSettion of War ++ 3.2 6.2 2.8 - 2.6 Through DecerLer 17. 1941 7.6 For monthly breakdown see tabulations prior to April 23, 1941. For monthly breakdown see tabulations prior to October 8, 1941. - 6.2 ...1.2 2.1 5.6 2.0 +.0.9 2.6 2.0 1.4 - 13.8 1.3 2.6 0.9 0.1 0.5 1.1 0.1 3.7 0.6 - 1.3 0.5 0.1 = 3.4 0.2 0.5 0.3 0.6 0.3 -2.1 +12 +0.5 -0.8 Treasury Department Division of Monetary Research 257 Date Feb. 11,1942 To: Miss Chauncey I don't think it is necessary to show these to the Secretary. However, I have called the attention of Mr. . Bell to these cables. H.D.W. MR. WHITE Branch 2058 - Room 214} 258 TELEGRAM SENT Plain CJ December 27, 1941 AMEMBASSY LONDON. (ENGLAND). 6041, Twenty-seventh. FOR THE ANDASSADOR. The following has been received from Jesse Jones: QUOTE Referring to Ambassador Winant's cablegram fourteenth, will be glad to have full particulars as how England has met air raid damages UNQUOTE. This supercedes Department's 5915, Seventeenth. HULL (RHG) DCA:RHG:MGS Copy: bj:2-10-42 EU 259 December 27. 194 Mr. Mr. District will you please send the attached sable to the American Changing for Fex from the Secretary of the treasury. (See attached cable) 30:1ap-12/27/41 250 COPY CABLE FROM SHORETARY OF THE TREASURY TO FOX, CHUNOKING - Dec. 27. 1941 On December 26 the President extended the Treesing Order to Heag Keng. The now Executive Order also provides for automatic freesing of assets of any other territory occupied by Axis forces. As of same date Treasury Department issued Public Circular No. 10. revoking General License No. 57: amending General License No. 13 by deleting Hong Kong and Pessage amending General License No. 53 by excluding occupied territory from "generally licensed trade areas": and also containing the fellowing provision: "The offices within Hong Kong and occupied China of banks named in Schedule A of General License No. 58. shall, as of the date hereef, cease to be appointed banks, and, as of the date hereef, such offices shall also cease to be generally licensed nationals within the meaning of General Licenses Nes. 59. 60. or 61, and such general licenses are to such extent hereby reveked. Initialed: D.W.D. OOPT:Lap-12/27/41 261 PARAPHRASE OF TELEGRAM RECEIVED FROM: American Embasay, Chungking, China. DATE: December 27, 1941, 7 p.m. NO.: 542. The Embessy refers to the Department's telegram No. 325, noon, dated the 24th of December. TFV. The following 10 from Adler on behalf of Fox for the Secretary of the Treasury. with reference to telegram No. 325, on December 16 Mr. Fox departed for Kunming. This was before the arrival of telegram No. 293. Since the 12th of December we have had no definite news of Taylor and Frese. That the American colony in Bank Building, Hong Kong, 1 5 unharmed has been reported indirectly. The information given several days Ago by the Embassy would tend to be e confirmation of this report. When Mr. Fox returns from Kungming he will answer other questions in the Department's telegram No. 293. GAUSS 262 FEDERAL RESERVE BANK OF NEW YORK December 27, 1941. Sir: Attention: Mr. Frank Dietrich As authorised and requested in your letter of December 23, 1941, we, as fiscal agent of the United States, cabled The Central Bank of China on December 24, 1941, granting an extension of the arrangement for the purpose of supplying the Republic of China with dollar exchange as outlined in our letter of July 14, 1937. as amended. We enclose a copy of our cablegram of De- cember 24, 1941, and a copy of the reply of The Central Bank of China, dated December 26, 1941, con- firming its agreement to the extension. Respectfully, (Signed) D.J. Cameron. D. J. Cameron, Manager, Foreign Department. The Honorable, The Secretary of the Treasury, Washington, D. C. Encs. Copytec 12-29-41 C 263 0 P COPY OUTGOING CABLEGRAM DECEMBER 24,1941 The Central Banic of China Chungicing No. 19 With reference to your cable number 20 requesting & further extension of the arrangement between us for purpose of supplying Republic of China with dollar exchange the Secretary of the Treasury has authorized us as fiscal agent of the United States to modify further paragraph 6 of our letter of July 14, 1937. as modified, by deleting "December 31, 1941" wherever such words and figures appear in such paragraph as modified and inserting in lieu thereof "June 30, 1942". Please confirm your agreement to such modification of the arrangement. FEDERAL RESERVE BANK OF NEW YORK Copytec 12-29-41 264 C 0 P Y COPY INCOMING CABIEGRAM December 27, 1941. Chungking, Dec. 26, 1941. Federal Reserve Bank of New York New York No. 22 Your cable No. 19 We confirm. The Central Bank of China. Copy:ec 12-29-41 265 0 P Y DEPARTMENT OF STATE WASHINGTON December 27. 1941 In reply refer to YF 840.51 Frozen Credits/4799 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmits herewith a copy of air mail despatch no. 1423 of December 16, 1941 from the American Embassy at Caracas, and its four enclosures, a translation of a note dated December 12, 1941 from the Foreign Minister, as well as a copy and translation of the enclosure therewith (Official Gasette Special No. 5. December 12, 1941), containing the measures adopted by Venezuela prohibiting the transfer of merchan- dise, funds et cetera, and withdrawals from credit institutes by governments or nationals of countries at war with an American nation. Enclosure: From Caracas, no. 1423, December 16, 1941, with enclosures. Copy: VW: 12-30-41 266 Caracas, December 16, 1941. No. 1423 Subject: Transmitting copy and translation of Executive Decree prohibiting the transfer of merchandise, funds, etc., and withdrawals from credit institutes by Governments or nationals of countries at war with an American nation. The Honorable The Secretary of State, Washington. Sir: I have the honor to refer to the Department's Circular telegraphic instruction of December 7. 7 p.m., and to my telegram No. 296 of December 12th on the above mentioned subject, and to enclose a translation of a note dated December 12, 1941, from the Foreign Minister as well as a copy and translation of the enclosure therewith (Official Gazette Special No. 5. December 12, 1941). containing the measures adopted by Venezuela. As contemplated in Article 4 of the Decree, it has now been announced in the Official Gasette of December 13. 1941 (No. 20669, page 135,036) that the Minister of Finance has delegated the Banco Central of Venezuela and the agencies of the Banco de Venezuela in the interior to issue the permits referred to in Articles 2 and 3 of the Executive Decree of December 12. Respectfully yours, Frank P. Corrigan. Enclosures: 1. Translation of Foreign office note. 2. Copy of official Gazette, Special No. 5. 3. Translation of enclosure No. 2. 4. Translation from official Gazette of December 13, 1941. 851 JF/tw A true copy of the signed original -- 267 Enclosure No. 1, to Despatch No. 1423, from the Embassy at Caracas. TRANSLATION Direction of Economic Policy No. 5031 Economic Section. Caracas, December 12, 1941. Mr. Ambassador: I have the honor to inform Your Excellency of the receipt of your esteemed Note No. 546, of the 8th of this month, as well as of the memorandum of December 9. concerning the means applicable for preventing the transfer or withdrawal of funds belonging to the Japanese Government or subjects, pending the establishment of a common policy concerning this matter. In reply I am glad to send to Your Excellency, attached hereto, a copy of the Executive Decree of December 12, 1941, by which are prohibited the exportation of merchandise or securities and the remission or transfer of funds to the territory of the states at war with any American nation, or occupied by them, or which are destined or consigned to nationals of such states, whatever may be the place where the beneficiary or consignee resides. By the same decree are also prohibited the withdrawal from credit institutes established in Venezuela, funds or securities belonging to, or in which there is an interest, of the Governments or the nationals of states at war with an American nation, or persons or entities domiciled or resident in territories occupied by such states. 268 -2- I avail myself of this opportunity to renew to Your Excellency the assurances of my highest consideration. (signed) C. Parra-Peres. Enclosure. To His Excellency Frank P. Corrigan, Ambassador Extraordinary and Plenipotentiary of the United States of America, Caracas. 269 Enclosure No. 3 to Despatch No. 1423, December 16, 1941, from the Embassy at Caracas TRANSLATION FROM OFFICIAL GAZETTE OF THE UNITED STATES OF VENEZUELA, SPECIAL NO. 5, December 12, 1941 ISAIAS MEDINA A. President of the United States of Venezuela. WHEREAS A state of war exists between American Republics and non-American States, which affects the political and economic interests of the whole Continent and demands the adoption of measures for the defense and the security of the Nation; in accordance with Resolution XV adopted in the Second Meeting of Foreign Ministers of the American Republics; In the use of attribute 23 of Article 100 of the National Constitution; in conformity with Article 36 and of the first numeral of paragraph 2 of numeral 13 of Article 15 of the said Constitution, with the Cabinet in Council; DECREES: Article 1. The exercise of individual guarantees specified in numerals 2, 8, and 9 of Article 32 of the National Constitution is restricted throughout the territory of the Republic in the terms of the present Decree. Article 2. The exportation of merchandise or securities and the transmission of remittances, drafts, or money transfers is prohibited to 270 -2- States at war with any American Nation or occupied by then or which might be intended for or consigned to nationals of such States whatever the place might be of the addressee, consignee or beneficiary of such exporte, drafts, transfers or remittances. In the case of exports, drafts, transfers or remittances not covered by the prohibition referred to in this article but which are intended for non-American countries a special authorization of the Federal Executive will be required. Article 3. Without obtaining a permit from the Federal Executive the withdrawal of funds from banking and savings accounts, the moving of said accounts and the withdraval of articles on deposit or securities under custody is prohibited from any institution of credit established in Venezuela which belong, are subject to the order of or in which there is an interest of the Governments or nationals of States at war with any American country or of persons or entities domiciled or resident in territories occupied by such States. The Federal Executive, for the purpose of avoiding a paralisation of normal and legitimate economic activities, may grant the said permits, on the request of the respective institutions which should make proper payments provided the following conditions are met: a) That the beneficiary of such permit undertakes to separate nationals of States at war with an American Nation from every interference, employment or activity in the enterprise at the earliest possible moment. b) That the suns applicable to the permit correspond to the bulk of 271 - business considered as normal for the enterprise, or to special operations properly justified; c) That the beneficiary binds himself to afford all facilities that the Federal Executive may deem necessary in order to inspect the operations properly. d) Any other formality or requirement which the Federal Executive may call for through the issuance of Executive Orders. Article 4. The permits referred to in this Decree will be granted through the Ministry of Hacienda, which may, through the issuance of special orders, delegate this function to the Banco Central de Venezuela and to other entities which it may deem proper to choose; and it may also establish regulations and formalities for the functioning of this service. Through orders and special instructions of the Federal Executive a list of persons or entities included in the restrictions which this Decree establishes may be drawn up; and the necessary measures will be adopted to inspect the bulk of business and operations of those enterprise or entities to the end that their activities may not be exercised in a manner detrimental to the national or continental security or economy. Article 5. Banks, credit institutions and houses authorized to receive deposits, established in the country, must declare to the Ministry of Hacienda, within the maximum period of fifteen days, counting from the publication of the present Decree, the accounts, assets and funds referred to in Articles 2 and 3 of this Decree. Article 6. Infractions against the provisions of the present Decree 272 -4- will be penalized with fines imposed by the Ministry of Hacienda of not less than one hundred bolivares and not in excess of the amount of the operation with respect to which an infraction has been committed. Article 7. The present Decree does not affect in any way the provisions of the existing Decrees concerning restrictions on the exercise of constitutional guarantees. Article 8. The Minister of Foreign Relations and of Hacienda are especially charged with the execution of the present Decree. Issued, signed, sealed with the Seal of the Federal Executive and countersigned by the Ministers of the Executive Branch in the Federal Palace in Caracas on the eleventh day of the month of December nineteen hundred forty-one. 132nd Year of Independence and 83rd of Federation. 273 Enclosure No. 4 to Despatch No. 1423, December 16, 1941, from the Embassy at Caracas TRANSLATION FROM OFFICIAL GAZETTE OF THE UNITED STATES OF VENEZUELA, DECEMBER 13, 1941 MINISTRY OF FINANCE United States of Venezuela - Ministry of Hacienda (Finance) Division of Economy and Finance. Caracas, December 13, 1941. 132nd and 83rd. RESOLVED: In exercise of the authority conferred upon this Ministry in article 4 of Executive Decree dated December 11, 1941, the President of the United States of Venezuela has decreed that the Banco Central de Venezuela be delegated to grant permits referred to in articles 2 and 3 of the said Decree and also the branches or agencies of the Banco de Venezuela located in the interior of the Republic. The same permit application may not be made either simultaneously or successively to two of the entities herein mentioned. The Superintendency of Banks is likewise charged with the in- spection and control of operations of the enterprises or entities referred to in the last paragraph of article 4 of said Decree, which functions must be exercised in accordance with the Resolutions and special instructions given by the Federal Executive. Other organizations or entities may be likewise designated under separate Resolutions and they may be similarly delegated, should the Federal Executive deem it convenient, to grant permits and exercise control. To be communicated and published. For the Federal Executive Copy:vv:12-30-41 A. MACHADO HERNANDEZ 0 274 0 P Y DEPARTMENT OF STATE WASHINGTON December 27, 1941 In reply refer to IF 840.51 Frozen Credits/4826 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmits herewith a copy of air mail despatch no. 3143 of December 18, 1941 from the American Embassy at Habana, and its enclosures, a clipping and translation thereof from the Official Gagette No. 716 of December 16, 1941, containing a decree no. 3366 by which the Cuban Government prohibits remittances of funds to countries with which it is at war and to those which restrict payments to Cube. Enclosure: From Habana, no. 3143. December 18, 1941, with enclosures. Copy:ec:12-30-41 275 C 0 P Y Habana, December 18, 1941 No. 3143 AIR MAIL (Cuban Government prohibits remittances of Subject: (funds to countries with which it is at war (& to those which restrict payments to Cuba The Honorable The Secretary of State, Washington, D. C. Sir: I have the honor to enclose a copy and translation of Cuban Decree No. 3366, dated December 15, 1941, promulgated in Official Gazette No. 716 of December 16, 1941, which prohibits the exportation of means of payment of all kinds to countries at war with Cuba or which have restricted the payment of credits belonging to Cubans or residents of Cuba. The decree under reference complements that part of Decree No. 3343 of December 12, 1941, of which a copy and translation were enclosed with the Embassy's air mail despatch No. 3119 of Decem- ber 16, 1941, and which froze all funds in Cuba belonging to enemy aliens, In addition, however, it prohibits the exportation of all means of payment to countries which impose restrictions on payments to Cuba. In this respect the decree is largely a re- petition of a bill introduced in the Cuban Congress early this year and of which a translation was embodied in the Embassy's report No. 77 of February 27, 1941, entitled "Proposed Establishment of Exchange Control Measures in Cuba". As was mentioned in the confidential section of report No. 77, this measure is directed against Spain, where Cuban ex- porters, especially of tobacco and tobacco products, have frozen credits which at the time the report was written, were estimated to total $2,000,000. The Department's attention is invited to the second paragraph of Article III of Decree No. 3366, 276 -2which provides that all firms or individuals remit- ting funds abroad or receiving remittances from abroad must in a sworn statement declare the nature and object of such remittances. This particular provision of the decree was also included in the bill described in the Embassy's report No. 77, and was the subject of the Embassy's confidential air mail despatch No. 1661 of February 28, 1941. At that time Mr. Eduardo Dyruthy, the Director General of Statistics of the Cuban Ministry of Finance, assured the Embassy that the requisite in question would not result in any delays or complications in financial operations and that the data obtained would be used primarily for statistical purposes. One of the leading local American bankers, with whom this point was discussed, informed the Commercial Attache that in his opinion the preparation of the sworn statements provided for in Decree No. 3366 would constitute no undue burden on those remitting funds to the United States or receiving funds from that country. Moreover, under existing war conditions, the Fendassy does not feel that any objections could properly be raised to this requirement as the Cuban Government is doubtlessly justified in adopting such measures as it may deem adequate to safeguard against possible re- mittances of funds to undesirable destinations. Respectfully yours, A true copy of the signed original Enclosures: GEORGE S. MESSERSMITH 1. From Official Gazette No. 716, December 16, 1941 2. Translation thereof File No. 851 AFH/cd Copy:ec:12-30-41 C Enclosure No. 2 to Despatch No. 3143 dated 0 December 18, 1941, from the Embassy at Habana, P Y (Translation) Decree No. 3366, Official Gazette, December 16, 1941. WHEREAS: Commercial relations between Cuba and several other countries are presently subject to difficulties arising from the intervention of the State in the monetary and credit systems of those countries. WHEREAS: In view of this situation, under which at the present time many citizens and residents of Cuba find themselves subject to restrictions in connection with the collection of legitimate credits which they have against entities or individuals in the nations which follow this practice, the Government of Cuba must adopt measures to protect them as adequately as possible and which consist of reciprocal measures prohibiting or restricting exports of capital, money, or credits to those countries. WHEREAS: Under the authority conferred upon me by the Constitution and by the law of June 8, 1939, at the proposal of the Ministry of Finance and upon the approval of the Cabinet, I RESOLVE: First: To prohibit the exportation of all kinds of money, credits, capitals, or meals of payment of any kind, whether by means of their physical extraction from the territory of the Republic, or whether by means of transfers, drafts, or any other financial operation destined to that end to the countries which are at war with Cuba or which have restricted the payment of credits belonging to Cubana or residents of Cube. Second: To authorize the Minister of Finance to establish reciprocal restrictions on the exportations of means of payment mentioned in the preceding paragraph to nations at war with Cuba or which have established any kind of restrictions on the circulation of their capitals or means of payment to Cuba. Third: To prohibit the withdrawal of funds, securities, and other property from the banks in which they are deposited by nationals of countries at war with Cuba. 277 278 -3- Any natural or juridic person receiving or remitting funds, credits, or any other means of payment to or from abroad must set forth, by means of a sworn declaration, the purpose, character, cause, and object of said financial operation. Fourth: To authorize the Minister of Finance to issue the necessary resolutions in order to regulate and to insure compliance with the provisions of this Decree. The banks within a period of not more than fortyeight hours will inform the Minister of Finance of the funds, securities, and other properties referred to in the Third Article of this Decree, and will likewise submit a report within that period on the cash operations and on the deposits and withdrawals made by natural or juridic persons from December 7 to date. Fifth: Those violating the provisions of this Decree will be liable to the penalties established by the law of June 8, 1939. Sixth: The Minister of Finance is charged with the application and fulfillment of the provisions of this Decree, which will become effective upon its promulgation in the Official Gazette of the Republic. Signed at the Presidential Palace in Habane, December 15, 1941. F. BATISTA, President. Carlos Saladrigas, Prime Minister. Oscar Garcia Montes, Minister of Finance. Copy:ec:12-30-41 C 279 0 P Y DEPARTMENT OF STATE WASHINGTON December 27, 1941 In reply refer to FF 840.51 Frozen Credits/4792 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmits herewith a copy of air mail despatch no. 1698 of December 10, 1941 from the American Legation at Tegucigalpa, and its enclosure, a photostat copy of Circular No. 37 of the Ministry of Finance, quoting the provisions of Executive Order No. 466 of December 9, 1941, setting forth the freezing control measures over Japanese funds and credits in Honduras. Enclosure: From Tegucigalps, no. 1698, Decem- ber 10, 1941, with enclosure. Copy :bj:12-30-41 280 No. 1698 Tegucigalpa, D. C., December 10, 1941. Subject: Transmitting Copy of Honduran Freezing Control Regulations. AIR MAIL The Honorable The Secretary of State, Washington. Sir: I have the honor to refer to the Department's circular telegram of December 8, 6 p.m., and to enclose one copy of the Executive Order No. 466 of December 9, 1941, setting forth the freezing control measures over Japanese funds and credits in Honduras. It will be observed that the freezing order applies to commercial agents and creditors, as well as banks: all such firms or persons must report their holdings or the obligations due then on behalf of Japanese interests before December 13, 1941. As soon as these data have been compiled by the authorities here, the Lega- tion will attempt to prepare a complete report in the premises. Since the Honduran Exchange Control Commission is now prohibited from releasing any funds on behalf of Japenese firms or persons, there is no danger of any subversive use of the Japanese deposits in this country. Respectfully yours, John D. Erwin Enclosure: (in single copy) Circular No. 37 of the Ministry of Finance, quoting the provisions of Executive Order No. 466 of December 9, 1941. Copies to: American Vice Consuls at La Ceiba and Puerto Cortes. File No. 851. RDG:AJL A true copy of the signed original. AJL Copy:bj:12-30-41 Enclosure 281 from american Legalion Jegucigalpa SECRETARIA DE HACIENDA, CREDITO PUBLICO Y COMERCIO REPUBLICA DE HONDURAS N° 37 . Tegucigalpa, D. C., de diciembre de 1941. Para su conocimiento y efuctos consiguiontes, troscribo L Ud. el acuerdo que dice: "SECRELARIA DE HACIENLA, CRULITO PUBLICO ! COMERCIO.- 466.- Tegucigalpa, L.C., 9 do diciembre de 1941, -CONSIDERANDO: que el dia de aver al Congreso Nacional decreto el Estado de Guerra entre Honduras y E1 Japon y, como consecuancia de éste, el estado de sitio en la Republica; y- CONSIDERAYDO:que como una medida do defensa nacional es necesario que el Gobierno ejerza control sobre fondos que existen on los sancos dol pais y algunas agencias comorcialos, pertenciontes a personas naturales O jurídicas do nacionalidad japonosa, POR TANTO:- El Presidente do la Ropublica- ACUERDA: 1°.-A partir do opto fecha y mientras subsisted el ostado do guorra ontro Honduras y E1 Japon, quodan inmoviles O congelados todos los fondos existontos husta 01 dia de hoy y quo en lo sucusive existioron, on poder do las institucio- nes do cródito y agencias comorcialos ostablecidos on 01 país, portoneciontos a personas naturalos o jurídicas do nacionalidad juponess.- 2 2.-Las institucionos do crédito y didos on el artículo anterior, doborán doclararlos a la Socrotaria do Facionda dentro do (3) tros dius a contar do USta focha, y 01 último dia hábil do coda mus deburán enviar un estado do tales fondos a la Socrotaria moncionada. 32.agencias comorcialos quo tongan on su podor fondos compren- Los repro sontantos logalos quo on cumplimiento d su mandato hayan porcibido fondos provoniontos do cobros do cual- quier naturalezo portonocientos a personas naturalos O jurídicos do nacionclidad japonoan, doburán doclarcilos 4 la Socrotaria do Hacionda dontro del tsrmino sonalado on 01 artículo quo antocodu y dupositorlos on 01 mismo plazo on uno do los bancos dol pais, con cródito a sus mondatarios. 4°. -La Comisión do Control du Cambios Intornacionales y Eatabilisación dol Sistomo Monotario no autorizará domandas do cambio que hayan do cubrirs con los fondos moncionados on oato acuordo. -5°. -Siondo ostu disposicion una modida do 282 SECRETARIA DE HACIENDA CREDITO PUBLICO Y COMERCIO REPUBLICA DE HONDURAS No Tegucigalpa, D.C., -2defensa, su violación será juzgada por los Tribunales Militares y penada conforme a las leyes de la materia. -COMUNIUESE. -CARIAS A.-E] Secretario de Estado en el Despacho de lacienda, Crédito Público y Comercio, -- JULIO LOZANO h.-" De Ud. atento y S.S. Crédito JULIO LOZANO h. Homenth APV. C 0 P 283 Y DEPARTMENT OF STATE WASHINGTON In reply refer to FF 840.51 Frozen Credits/4824 December 27, 1941 The Secretary of State presents his compliments to the Honorable the Secretary of the Treasury and transmits herewith a copy of air mail despatch no. 378 of December 11, 1941 from the American Embassy at Montevideo, and its enclosures, a copy and the English translation of a decree published in La Manana of December 10, 1941, prohibiting financial and other trade transactions on the part of Japanese nationals and entities. Enclosure: From Montevideo, no. 378, December 11, 1941, with enclosures. 284 EMBASSY OF THE UNITED STATES OF AMERICA MONTEVIDEO, URUGUAY No. 378 Montevideo, Uruguay, December 11, 1941. Subject: Decree Freezing Japanese Funds and Transactions in Uruguay. BY AIR MAIL LEAVING MONTEVIDEO DEC 13 1941 The Honorable The Secretary of State, Washington. Sir: 1/ 2/ With reference to my telegram No. 532 of December 10, I have the honor to enclose the text, together with a translation in English, of a decree of December 9, as it was published in La Manana of Decem- ber 10, prohibiting financial and other trade transactions on the part of Japanese nationals and entities. Respectfully yours, William Dawson. SC:rvm Enclosures: No. 1- Text of decree as published No. 2- Translation in English A true copy of the signed original. rvm Copy:bj:12-30-41 Enclosure No. 2 Despatch No. 378 December 11, 1941, 285 American Embassy Montevideo, Uruguay DECREE OF THE EXECUTIVE POWER The Executive Power through the Ministry of Hacienda issues the following decree: In view of the state of war existing between the United States of America and the Empire of Japan and the solidarity which has been declared with the aggressed American State, and in accordance with the principles proclaimed by the Lima and Havana conventions, the President of the Republic decrees: Article 1-There is prohibited until further order the transfer of funds abroad in general, in direct or indirect form, or for whatever purpose, in favor of Japanese persons or entities. The present prohibition is extended to the export of merchandise and the transfer of bonds or securities of whatever nature. Article 3-Likewise there is suspended until further order transactions in Uruguayan or foreign money which may imply or originate debits in accounts already opened or which may be opened in the name of Japanese persons or entities. Article 3--Qualified banks are authorized to carry on exchange transactions, to sell exchange for the currencies in which may have been drawn drafts originating in Japan or from Japanese firms in general with the sole purpose of cancelling the same as respects the debtor. The corresponding settlements will be effected at the rates which the Bank of the Oriental Republic of Uruguay shall fix and the banks shall collect the respective amounts, holding in suspense the respective reimbursements and depositing these amounts in the Bank of the Oriental Republic of Uruguay. Article 4-The Bank of the Oriental Republic of Uruguay is empowered to authorize wholly or in part according to circumstances of the individual case and time, as it may judge necessary or convenient, transactions which are prohibited or suspended by the present decree. Article 5--The Customs Houses of the Republic, the Posts, the Comptroller of Imports and Exports, the banks, the savings banks, private banks, and exchange houses established in the country are charged with the strict enforcement of this decree. Article 6-To be communicated, etc. Signed: BALDOMIR Javier Mendivil Copy j:12-30-41 286 DEC 27 1941 Dear Dr. Baxter: This is to acknowledge receipt of the weekly bulletin on the war prepared by your office. I found this bulletin of considerable interest, as I have found other material provided by you. I would appreciate receiving this bulletin regularly in the future. If you have available the first nine numbers of this bulletin, I should like to have them to complete the file. A report on German losses in manpower and material during the Russian campaign is mentioned as having been written in your office. I would like to receive this report, if it is available. My best wishes for the New Year. Sincerely yours, (Signed) A. Morgenthan, Jed Secretary of the Treasury Dr. James P. Baxter, 3d Director, Branch of Research and Analysis, Coordinator of Information, Washington, D. C. 12/26/41 FILE COPY 287 COORDINATOR OF INFORMATION WASHINGTON D.C. December 22, 1941 SECRET COORDINATOR OF INFORMATION My dear Mr. Secretary: Enclosed is a copy of the latest weekly bulletin on the war compiled in this office, which I thought might be of interest to you. With best wishes. Sincerely yours, 8th James P. Baxter, 3d Director, Branch of Research and Analysis The Honorable, The Secretary of the Treasury. 288 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE December 27,1941 TO FROM Secretary Morgenthau Mr. Kamarck Subject: Summary of O.C.I. Report on Martinique 1. Martinique does not represent a danger to the United States, as any German movement towards the island could be easily intercepted and destroyed. 2. The 100 Curtiss planes are being kept in good condition, but cannot be used for lack of A landing field. 3. The armed forces, principally the sailors 2,0003,000 strong, would resist any attempt at invasion. Their motivation is a desire to "defend the empire", as neither the Americans nor the British have promised to restore French colonies to France after the war. 4. The population is composed of 5,000 whites and 250,000 mulattos and negroes. Fear of being subjected to the American Southern treatment of negroes has increased the loyalty to France of the black population. REPORT ON MARTINIQUE BY PAUL EMILE VICTOR. Mo28 A.The Country, A.I. The Island. 1. Dimension. ; as the crow flies, greatest length: 70 kms (50 miles) greatest width 30 (20 IT ) ) shortest width 12 If (8 11 2. Tectonic Aspect: a) Character: Volcanic island (Mont Pele, active volcano.) Land frequently chaotic. Vegetation tropical and dense. b) Plains or plateaux rare: Plain of Lamentain (enter) Plain of St. Anne peninsula (South) Plateau between Basse Pointe and Macouba (North) c) Coast generally rugged and steep, especially in the Northern part. A few long sandy shores, especially on the western coast and towards Trinite (Bast). 3. Climate: Tropical. Rainy season from July to October. 4. Ressources: Sugar cane. Fishing products. Native vegetables: sweeet potatoes, Indian potatoes, bananas, -1- different tubercules. A. II. Settlements. Three important settlements: Fort de France (capital) Trinite. Le Lamentin. A fourth SaintPierre, which had a population of 40. 000 inhabitants before the 1902 catas- trophy ( destruction of the town by the erruption of Mont Pele) at present has only 7000 inhabitants. The others are only little towns, villages and hamlets. A. III. Means of communication: 1. Roads: a) The network of roads, rather complete nevertheless very bad (in surface quality outline(?) because of the nature of the ground (chaotic) and of the climate (tropical). b) Two good roads: One from Fort de France to St. Pierre via Fonds St Denis and the other from Fort de France to Gros-Morne via St. Joseph. 2. Navigation: Only one port where ships of a certain tonnage can dock: Fort de France. Only very small ships can dock or anchor in most of the other ports. The northern ports (between le Precheur and le Marigo) are entirely impracticable and it is impossible for even small boats to anchor. A. IV. Economic Situation. 1. Martinique has always been an economic burden for France (and a center of political disturbances). . 2. The lack of supplies and of means of exportation means has seriously aggravated the economic situation (the political situation has improved). . The inhabitants and their state of mind at present. There are approximately: 250.000 coloured people. 2.000 white natives. 3.000 whites ( officials, officers and sailors coming from France.) 1. The coloured population: a) The negroes: are the most numerous. Labourers in the factories (sugar refineries, rhum manufacturies.) Fishermen. Cultivators. They are French citizens and have the same rights as the white men. They are generally proud to be French. The documents on German racialism and on the conditions of negroes in the United States have recently strengthened (in spite of the defeat) their French feelings. b) The mulattos: generally well-to-do. Despise the negroes and hate the whites. Went to France for their graduate studies. They were the leading politicos before 1940 and fomented disturbances during elections. As well as the negroes, the mulattos have strong French feelings and fear to loose their prerogatives and class privileges which they believe assured as long as the French flag flies over Martinique. Note: Before 1940 political life was the main interest in Martiniquese life. Every election (comunal, "cantonal", and national) was marked by shooting and noisy demonstrations which very often ended in riots. Since 1940 everything has been calm and not the slightest incident could be reported. 2. The native whites: Generally old aristocratic French families, descendants of the early colonials. They own the sugar refineries and rhum manufacturies and share the land with the mulattos. They do not officially take part in political affairs (for example, they always abstain from voting) but the election issue was often controlled by their money. Business suffers very much because of the impossi- bility of sending rhum and sugar to France. (three crops are in the cellars and some factories have already from 10 to 15 million francs deficit) they are loyalists to France but their business needs are pressing. 3. Whites coming from France. For the most part officers, officials and sailors stationed in Fort de France or on board the old air-carrier Bearn which is used as a floating barracks and on the modern cruiser. Emile Bertin (besides these two ships there is a banana freighter transformed into a light auxiliary cruiser). Their morale, while good is influenced sometimes by the remoteness of their country, lack of news and even their inactivity. Some sailors attempt each month to cross to the English islands Dominique and Santa Lucia in order to join General de Gaulle's forces. But the great majority has confidence in Marshal Petain. They are all violently anti-German. 4. The Foreigners. Up to July 1941 ships coming from Morocco brought to Martinique a great number of imigrants, some French, some Germans or other nationalities, generally Jews on their way to the U.S.A. This coming and going came to an end in July 1941. In July 41, (date of the departure of the author) there was not one foreigner in the country, not even a German Jewish immigrant. No German or Italian commission, no German or Italian official had landed up to that date. According to recent news the situation in this regard appears unchanged. C. The leaders. 1. Admiral Robert: Commissaire General des Territoires de 1'Amerique ( Guadeloupe, Martinique, French Guyana). He has the reputation of being an excellent diplomat and a perfect gentleman. He is loyal to Marshal Petain. Violently anti-German and wishes a German defeat. For the time being, he adheres to the policy of all the French colonies:"defense of the Empire". He is ready to fire on anyone who would attempt a landing in Martinique, including the Germans. It is even possible that he would do so in spite of orders from Vichy. 2. Admiral Battet: Captain of the Emide Bertin, Chef des Services Coloniaux de la Martinique. Young and very brilliant officer. A personal friend of Admiral Darlan. Has probably the same attitude as Admiral Robert. 3. Colonel Quenardel: Commandant en Chef des Troupes des Territoires Francais de 1'Amerique. The defeat of France was a particularly heavy blow for him. He is reorganizing the troupes on the basis of solid discipline and intensive trianing. He would obey any orders from Vichy. Violently anti-German. Governor Nicol: Governor of Martinique. Arrived in Martinique 1941. Is not and has never been a politician. Very honest and upright. He has taken in hand the social organization of the colony. Loyal to Marshal Petain. Violently anti-German. D. The Forces. 1. The Navy: It is the most important force in Martinique (from 2 to 3000 men.) Well trained. The morale is good in spite of a certain inactivity that the officers try to overcome by giving the sailors agricultural labor. The Navy occupies the principal positions: Colonial police, Navigation Police, Information and Propaganda Service. Violently anti-German but not very Anglophile. 2. The Aviation: Nonexistant. No landing fields therefore the 100 Curtiss airplanes can not be used (these airplanes are in parts but in very good condition and well kept up) Only a very few old hydroplanes are used for coastal patrols and for flight training service. The Army: Entirely recruited among the natives (with the exception of the officers). Well trained and well prepared since the arrival of Colonel Quenardel. Is employed in fortification work and road improvement. Good morale. Would blindly obey any orders (native soldiers). 4. The people: The social reforms which have been made since the arrival of Governor Nicol, the recent calm of the country, the fear of racial reforms should they make trouble, have kept the people quiet. Generally speaking they are fairly satisfied with the reforms already accomplished. In spite of a few exceptions, the people have confidence in France for their citizen rights are equal to the white man's. E. Martinique as a Base. The Bay of Fort de France: On the map, this bay appears sufficient to shelter the whole of the American Fleet. Shoals however do not permit more than three or four big warships to anchor. (See a Naval map.) This bay presents one real immediate interest, 'it could be a splendid landing surface for hydroplanes. 2. Value of Martinique as an American Base The American bases in the Bahamas, in Guatana Bay, Kingston, San Juan, St-Thomas, Antigua, St-Lucia, Trinidad, Georgetown and in Dutch Guyana (see added map) constitute a defense network, to which it seems that Martinique could only add a weak positive link. 3. Danger of Martinique as a German Base: a) Before reaching Martinique German ships and their supplies would have to cross all the southern Atlantic. b) The American bases of St. Lucia and Antigua would permit an immediate counter measure and the probable destruction of the German ships. c) To establish a base in Martinique the Germans first would have to be able to land and secondly insure their line of supplies. d) The daily American Naval and Air patrols which cruise around Martinique would prevent any attempted incursion. e) The American observers (consuls, special Naval attache ) would instantly report any suspicious ship. f) The French forces of Martinique would pos- sibly resist the landing of German troops. g) Even supposing that the German forces suc- ceeded in landing in Martinique, the proximity of British and American bases would permit a quick and immediate elimination of the invadors. F. Conclusion. 1. In the Anglo-American defense network in the Caribbean, Martinique would seem to be of only slight interest and a still slighter danger. 2. Any German incursion (improbable) could be immediately crushed. 3. Any strategic advantages which an American base could bring, would perhaps not be worth while because of: a) the moral consequences, similar to those which followed the English attacks on Oran and Dakar; b) the economic burden of the country. 4. A premature attack against Martinique (for example, Dakar) would risk being more to Germany's war advantages than to the American. Grand.RiviERE BASSE-POINTE CORRAiN MARIGO AjoupA BOUILLON MORNS ROUGE hesqoile Cazavelle. de la TRINITE fonds GROS-MORPE ROBERT S.JOSEPA o 00 COMNERS FORT-de FRANCE LAMENTIN VAUCLIN THESPRIT DIAMANT MARIN SCANNE O O 10 Kometes . i ST. PIERRE Placentia Bay BERNUDA Y MAP from F New YozkT es Nov.30. 1001 BABANAS OZ Guantanamo Bay SANSUAN SLYBOMAS Person STON MATHINIQUE HLUCIA TRINIDAD GEORGETOWN DUTCH GUIANA Bases Americanes Maste rigue no 28 MARTINIQUE Sommaire Page 1. A. Le Pays. II.L.Les L'ile. agglomérations. Page 2 III. Les voies de communications.pye 2 IV. La situation économique, Page 2. 1. Les "colores". Paye 3. 2. Les blanca du pays. Paye3 B. Les habitants. 3. Les Blancs de France. Paye4 4. Les étrangers. Paye4 C. Les hommes. 1. L'Amiral Robert. Paye4 2. L'Amiral Battet. Paye5 3. Le Colonel Quénardel, Paye 5 4. Le Gouverneur Nicol. Pafe 5 D. Les forces. 1. La Marine. Pays 2. L'Aviations. PayeG 3. L'Armée. Paye 6. 4. Le Peuple. Page 6. E. La Martinique comme base. Paye7 1. La baie de Fort-de-France, 2. Valeur de la Martinique comme base Americaine, 3. Danger de la Martinique comme base Allemande, 4 F. Conclusion, Paje 8. ortant Les notes suivantes sont basées sur un séjour de mois à la Martinique, Ce séjour a pris fin en Juillet 1941. Washington D.C. 5 Décembre 1941. 1. A. Le Pays. L'ile, 1. Dimensions : à vol d'oiseau, plus grande longueur: 70 kilom plus grande largeur : 30 Kilom plus petite largeur : 12 Kilom 2. Aspect Tectonique: a) Caractère: Ile volcanique(Mont Pelé,volcan en activité) Terrain fréquemment chaotique. Végétation tropicale dense. b) Plaines ou plateaux rares: Plaine du Lamenthin(centre) Plaine de la Presqu'fle de Ste Anne(Sud) Plateau entre Baase-Pointe et Macouba(Nord) c) Cotes généralement escarpées et abruptes, surtout dans la partie Nord. Quelques longs rivages de sable,surtout à l'Ouest et vers Trinite (Est). 3. Climat: Tropical. Saison des pluies, de Juillet à Octobre. 4. Ressources: Canne à sucre. Produits de la pèche. Légumes du pays: patates douces, ignames, bananes tubercules divers. 2 Les agglomérations, Trois agglomérations importantes: Fort-de-France(la capitale Trinité. Le Lamentin. Une quatrième, St-Pierre, qui comportait une population de 40.000 Ames avant la catastrophe de 1902(destruction par l'éruption de la Montagne Pelée)n'est que de 7000 habitants environ. La plupart des autres a glomérations ne sont que des bourgs. A.III. Les voies de communications. 1. Routes: a) Le réseau des routes,assez complet est cependant très mauvais(en qualité et en profil),de par la nature du terrain( chaotique) etde par Le climat( (tropical). b) Deux bonnes routes: celle de Fort-de-France à St) Piere par Fonds-St>Denis, celle de Fort-de-France à GrosMorne par St)Joseph. 2. Navigation: Un seul port ou des navires d'un certain tonnage peuvent accoster : Fort-de-France. Seuls des navires de tres faibles tomages peuvent acces- ter ou mouiller dans la plupart des autres ports. Les ports du Nord(entre le Prêcheur et le Marigo) sont entièrement impraticables et même le mouillage de tout petits batiments est impossible. IV. Situation Economique, 1. La l'artinique a toujours été pour la France une charge économique(et un centre de désordres politiques) 2. Le manque de ravitaillement et l'absence de moyens d'exportations a grandement aggravé la situation économique(1a situation politique s'est améliorée) 3. Les habitants et leur état d'esprit actuel. B. Il y a environ : 250.000 colorés, 2.500 blancs du pays, 3.000 blames de France(essen tiellement Officiers et Marins). 1. Les colorés: a- Les noirs : ce sont les plus nombreux. Travailleurs dans les usines(sucreries,rhumeries Pecheurs, Cultivateurs. Sont citoyens français et ont les mêmes droits que les blancs.Sont généralement fiers d'être français.Des do cuments sur le racisme allemand et sur 1'état des I nègres en Amérique ont raffermi dernièrement chez eux(et malgré la défaite)leurs sentiments français. b) Les mulAtres : généralement fortunés. Méprisent les noirs et détestent les blancs. Allaient faire des études supérieures en France. Menaient la politique du pays avant 1940 et fomentaient les troibles au moment des elections. Comue les noirs les mulâtres se sentent trèsfrançais, craignant de perdre leurs rangs et prérogatives de citoyens français. Note : Avant 1940 la vie politique était la chose prin- cipale à la Martinique, Chaque élection( comunale cantonale,nationale)était marquée de coups de few et de grandes manifestations bruyantes qui se terminaient fréquemment par des bagarres. Depu S 1940 tout est calme et pas le moindre incident ne pourrait etre signalé. Les blancs du pays Généralement vieilles familles aristocratiques frencaises, descendants des premiers colons. Possedent les sucreries et les rhumeries, et se partagent la terre avec les mulAtres. s'occupent pas officiellement de politique(ils se sont toujours abstenu de voter ,par exemple) ,mais ont toujoun payé les elections. Leurs affaires souffrent beaucoup de l'impossibilité d'envoyer leurs rhumes et le r sucre en France(trois récoltes sont Ne dans les caves,et certaines usines ont des découverts de 10 à 15 millions de Francs.) 4. Ils sont loyalistes vis à vis de la France La majorité a confiance dans le Maréchal Pétain. Une petite minorité est de Gaulliste.Tous sont viollement anti-allemands. 3. Les blancs de France : Essentiellement officiers et marins stationnes à Fort-deFrance,ou embarques sur Ie vieux porte-avion Bearn(servant de caserne flottante) et sur le croiseur moderne Emile Bertin. (A part ces deux batiments, 11 y a encore un bananier transforme en croiséur léger auxiliaire) Leur moral tout en étant bon se ressent parfois de 1'éloignement du pays, du manque de naivelles et quelque fois même du deseouvrement. and stausie Quelques marins tentent chaque mois de passer dans Wiles anglaises de la DominiqueApour se joindre aux forces du General de Gaulle. Mais la très grande majorité de ces hommes a confiance dans le Maréchal Pétain.Tous sont viollement anti-allemands. 4. Les étr ngers : Jusqu'au mois de Juillet 194 les navires venant du Maroc amenaient à la Martinique de très nombreux émigrés,certains français, la plupart allemands, généralement juifs en route pour les U.S.A. Ce mouvement de transit a été arrèté en Juillet 1941. Actue lement il n'y a pas un étranger dans le pays(même pas un émigrant juif allemand) Aucune commission Al- lemande ou Italienne,aw officiel Allemand ou Italien n'ont jamais débarqué à la Martinique. C. Les hommes. Amiral Robert: Commissaire Général des Territoires Français de LAmerigue(Guadeloupe,Martinique,Guyane Francaise). A la réputation d'être un excellent diplomate et un par- fait gentilhomme. Loyal au l'aréchal Pétain. Violemnent anti-allemands, et comme tous les Français, désire la défaite Allemande. Pour le moment s'en tient à la politique de toutes les colo- 5. (1) nies Françaises : "défense de l'Empire". Est prèt à tirer sur quiconque essaierait de débart uer A la Martinique, compris et surtout les Allemands(probablement meme si Vichy env yait l'ord e de les accu- eillir). 2. Amiral Battet: Commandant 1'Emile Bertin,Chef des Services Co- loniaux de la Martinique, Jeune et très brillant officier. Ami personnel de 1'Amiral Dar lan. Même position que l'Amiral Robert (probable menty 3. Colonel Quenardel : Commandant en Chef des Troupes à la l'artinique,a la Guadeloupe et en Guyar.e Frongaise. Frappé par la défaite de la France. Reorganise les troupes sur une base de solide disci, line et d'entrainement intensif. Obeirait à tous ordres venant de Vichy. Violemment anti-Allemand. 4. Gouverneur Nicol : Gouvern ur de la Martinique. Ar. ivé à la Martinique en Vers 1941 N'est pas et n'a jamais été un hom e politique. Très ho nête et très droit. A pris en mains essentiellement l'organisation sociele de la colonie. Loyal au Maréchal Pétain. Violement anti-allemand. 1 D. Les Forces. La Marine:C'est la force principale de la No. tinique(de 2 à 3000 hommes). Bien entrainée. Moral bon malgré un certain desoeuvrement cue les officiers essayent de combler par des travaux d'agriculture. 1) Aucune assurance n'agant jamais été donnée,ni par la GrandeBretagne,ni par les U.S.A. que les bases prises dans les colonies françaises seraient rendues à la France après la guerre. 6. La Narine occue les principaux postes : Police Colo- niale, Service d'Information et de Propagande, Police de la Navigation, Violemment anti-Allemande et pas très Anglophile, 2. L'Aviation : Inexistante. Pas de terrain d'aviation terrestre permettant l'utilisation des cent Curties inutilisés(Ces avi ns sont démontés, en ties bon état et trés bien entretenus) Seuls quelges vieux hydravions sont utilisés'pour la surveillance des côtes et les heures de vols d'en- trainement. 3. L'Armée : I Entièrement de recrutement indigène(à l'exception des des officiers). Bien entrainée et bien préparée depuis l'arrivée du Colonel Quénardel. Est occupée à des travaux de fortifications et d'amelioration des routes. Moral bon. Obeirait aveuglément à tous ordres(soldats indigènes). 4. Le peuple : Les réformes sociales faites depuis l'arrivée du Gouverneur Nicol. le calme récent du pays,la crainte de 4 l'état d'esprit raciste, font que le peup e se tient satistranquille.II est d'une façon générale fait du changement. Malgré de rares exceptions le peuple a confiance dans la France, dont ils nt citoyens au meme titre que les blancs. 7. E. La Martinique comme base. 1. La baie de Fort-de-France: Sur la carte,cette baie semble une base suffisante pour abri ter toute la flot e américaine. Des hauts fonds ne permettent cependant pas le mouillare de plus de trois ou quatre grands bâtiments de guerre(voir une carte Marine). Cette baie n'a qu'un seul interêt immédiat réel,celti d'être un magnifique plan d'eau pour l'aviation. 2. Valeur de la Martinicue comme base Américaine: Les bases Americaines des Bahamas, de Guantane Pay,Kingston, San Juan,St-Thomas,Antigua, -Lucia, Trinidad,Georgetov.n, et d la Guyane Hollandaise(voir carte jointe) forment un réseau de défense serré, auguel il semblerait cu.e la element positif Martinique ne viendrait ajouter nouveau, grown 3. Danger de la Martinique comme base Allemande : a) avant d'atteindre a Martinique e les navires Aelemands(et leur ravitaillement )auraient à traverser tout l'Atlantique Sud. b) Les bases Americaines de St-Lucia et d'Antigua permet- traient une riposte immédiate et la destruction probable des navires Allemands. c) Pourque les Allemands puissent établir une base utili- sable à la Martinique, il faudrait d'abord qu'ils puissent s'y installer, puis s'assurer leur ravitaillement. d) Les patrouilles journalières, navales et aériennes américaines qui croisent autour de la Martinique empecheraier tout essai d'incursion. e) Les observateurs Americaines consuls ,AttacheNaval spécial) signaleraient immédiatement tout bâtiment suspect probablement f) Les forces Françaises de la Martinique s'op oseraient d'elles mêmes au débarquement de troupes Allemandes, g) En supposant meme que des forces Allemandes réussissent un debarquement à la l'artinique, la proximité immediate des bases Britanniques et Americaine permettrait un nettoyage rapide et immédiat. 8. F. Conclusion. 1. Dans 1 réseau de défense Anglo-Américain de la Mer Caraibe, la Martinique ne semble offrir qu'un faible interet,et un plus faible danger encore. 2. Toute incursion Allemande( improbable) pourrait etre anéantie immediatement. 3. Les avantages stratégic es que représenterait une base Américaine à la Martinique,ne sera ent peut e rre pas compensés pour le moment par : a) les conséquences morales, analogues à celles cui ont suivies les attaques Anglaises contre Oran et Dakar; b) la charge économique du pays. 4. Une attaque prématurée contre la l'artinique(comme sur Dakar,par exemple) risquerait de servir davantage les intérèts de txxx la guerre Allemande, que les interèts Americaine. 313 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE Dec. 27, 1941 TO Secretary Morgenthau FROM Mr. Kamarck Subject: O.C.I. Material: Secret Instructions of Spanish Merchant Ships (The instructions, dated April 1941, are evidently to ensure that the Spanish merchant ships reach a safe haven before Spain enters the war. The British secured them from the drowned corpse of a Spanish captain.) 1. The first section of the "Instrucciones Secretas" order the captain to maintain a radio vigil and to open the second sealed section upon receiving the code message "At 460 - 15' Lat. N. and 29°- 25' Long. W., a group of mines was found in the ship 's course. 2. The second sealed section directs the captain, upon hearing a second code message verifying the first warning, immediately to head for a safe port. If the ship is not within 48 hours of a Spanish port, it should head for either a Norwegian port or an Argentine port. (My emphasis, AMK). 314 SECRETO E.M. DE LA ARMADA TRANS MIS I ONES CUADERNO DE INSTRUCCIONES SECRETAS A CAPITANES DE BUQUES MERCANTES DELA HOMELAND MAYOR 4 TRANSMISIONS Ejemplar núm. 177 1 315 Instrucciones Secretas para el uso de este cuaderno Ante la posibilidad de que el Estado Mayor de la Armada tenga que darle órdenes, se servirá Vd. seguir exactamente las instrucciones siguientes: 1.° - Mantener en inmejorables condiciones de eficiencia los servicios de Radiotelegrafia de su buque, tanto en lo que se refiere al personal, como al material. 2.° -Cuidará - personalmente de que las horas de escucha reglamentarias se efectúen con toda eficiencia y seriedad. 3.°-Se ordenará, que por el personal de la Radio se preste la mayor atención a los avurnaves de las estaciones de R. T. españolas, tanto civiles como de la Marina de Guerra, y que se le avise inmediatamente de recibir alguno, cualesquiera que sean las horas y circunstancias. 4°-Cuando - Vd. reciba exactamente el siguiente avurnave "En 46° - 15' Lat. N. y 29° - 25' Long. W. fué avistado grupo de minas a la deriva," procederá a abrir el documento que se encuentra cosido y lacrado al final de este Cuaderno de Instrucciones Secretas, cortándolo, precisamente con unas tijeras, por la raya punteada. 5.°-Se abstendrá de participar ni comentar con persona alguna, distinta de las autoridades de Marina, el contenidory a existencia del presente documento. Esta*reserva será llevada hasta el extremo de negar su exis. tencia, alegando ignorancia, cuando sea interrogado por cual. 316 2 quier persona, aunque ésta sean alto personal de la LESS arma dora o compañeros de profesión. 6.° El Cuaderno de Instrucciones Secretas debera ser conservado en lugar perfectamente seguro y caso de que sufra extravio o se observe alguna anormalidad en el deberá dar cuenta inmediatamente a la autoridad de Marina española o Consulado del primer puerto que visite, si el Consul es espanol. En caso contrario enviará al E. M. de 1a Armada el si guiente cable o radio urgente: Liegué (nembre del puerto) espero instrucciones. Capitán. Cuando por cualquier circunstancias cese en el mando del buque. entregará el Cuaderno de Instrucciones Secretas a la autoridad de Marina espanola para que ésta a su vez lo cm- tregue al Capitan que le releve. 8.° Tan pronto llegue a cualquier puerto deberá presen tarse, sin delegar para ello on nadie, al Comandante o Ayudante de Marina de dicho puerto con el Cuaderno de Ins. trucciones Secretas para que le sea hecha la anotación correspondiente por el propio Comandante o Ayudante de Marina. 9.° El texto de la avurnave podrá cambiarse con frecuencia recibiendo oportunamente el nuevo texto. 10.° - En caso de variación de estas Instrucciones recibira las nuevas por el mismo procedimiento y con el mismo ca. racter que le son entregadas éstas. 11.° Una vez el Capitán del buque en posesion de este Cuaderno será el único responsable de su conservación y custodia. 2 o La pérdida. o deterioro manifiesto, del Cuaderno I 317 - 3 -de Instrucciones Secretas, traerá consigo automatic amente para su poseedor la inhabilitación perpetua para mando de huques, sin perjuicio del fallo que emita el Consejo de Guerra que lo juzgará por el delito de Alta Traición. Madrid, 30 de abril de 1941 De orden del Almirante Fefe del E. M. de la Armada. - 11 - 318 A. Revistado and día de hoy el presente C.I.S. no resenta anorm FilMad alguna. H de Julio En La Autoridad de Marina. DEPARTMENT his HUELVA de 1941. U (Firma y sello.) Colectius Kernandez Revistado en el día de hoy el presente C.I.S. no presenta anormalidad alguna. de 1941. En Bollow a 17 utoridad de pulis de Marina. VITTAN Revistane ser G en * el a de hoy el presente C.I.S. no lic Iguna. de april La Autoridad de Marine with (Firma sello.) ye y di 1941. 319 13 Revistado en el día de hoy el presente C.I.S. no possenta anor MaRdad alguna. it Pabrica // de agorts de 1941. La Autoridad de Marina, (Firma y sello.) Revistado en el día de hoy el presente C.I.S. no presignta anormalidad alguna. The 20 da Agarts de 1941 La nuchidad de Marina, (Homa y sllo.) 8 ILLITARene día de hoy el presente C.I.S. no Revistado resenta anormalic d alguna. n de agoito de La Autoridad the Marina, 1941. (Firma y sello.) electives Normanta - 15 -- 320 Revistad on eD OTH de hoy el presente C.I.S. no presenta na. En Enal de Piphe de La Aquridge de Marina, 1941. y sell6 Revistado en el día de hoy el presente C.I.S. no presenta anormalidad alguna. at En finle a to de sple de 1941. is Autoridad Marina, de Hale (Firma y sellox) of de woy el presente C.I.S. no resent enormal 184 lguna. PB Revistado en TO En r alains de Septicula de 1941. La Autoridad de Marina, (Firma y sello.) P.O all Banales --- 17 - 321 Revistado en el día de hoy el presente C.I.S. no use to anormalidad alguna. de La Autoridad Octube de Marina, e 1941. Firma sello.) evistado en el de hoy el presente C.I.S. no essent nalid guna. de Octube de 1941. a Autoridad de Marina, (Firma yello.) James Chorograini Ravistado en el e hoy el presente C.I.S. no idade una. de Octuber 1941. . de Autoridad Moring (From VIGO 322 - 19 Revistado en el día senta anormalidi ente C.I.S no de 1941 Toial Maria La DEPARTMENT Revistado en el día de hoy el presente C.I.S. no resenta alguna. n Lobe ESPARAZEN e formilate de Generali 1941. Espana v sello.). Revistado hoy el presente C.I.S. no presenta anormalidad alguna. En a de La Autoridad de Marina, (Firma V sello.) de 1941. THE VIEVAS INSTRUCCIONES (en esta hoja se estamparan por la Autoridad de Ma is modificaciones o nuevas instrucciones que reciban referente al C.I.S.). 324 21 i vistado en et dia de hoy el present no wenta anormalidad alguna. de a 1941 La Autoridad de Marina, (Firma . sello ) Revistado en . . da de hoy el presente C.I.S. no senta an cmalidad alguna. de a de 1941. La Autoridad de Marina. (Firma y sello.) Revistado en el dia de hoy el presente C.I.S. no resenta anormalidad alguna. a de La Autoridad de Marina, (Firma y sello.) de 1941. MINISTERIO DE MARINA ESTADO MAYOR DE LA ARMADA OPERAC ONES ASUNTO: Instrucciones secretes con arregio a las cuales debe proceder inmediatamente que se reciba el avurnave de aviso. 1) Con objeto cerciorarse que el avurnave recibido de del Estado Ma r de la Armada, deberá ordenar al per- TEXTO: sonal radio que continue a escucha sobre la onda y Estacion que dió el avurnave de aviso 2) Media hora espues de haberse recibido el avurnave de aviso, deberá recibir ctamente este otro: Eviten navega en zona 50 millas alrededor punto avurnave ante ior. lo que le confirmará su autenticiprocedente del tstado Mayor de la Armada 3) Una vez cerciorado de este punto procederà inmedia timente a dirigirscaul puerto na Jonal mas próximo. 4) De no poder alcanzarlo antes de las 48 horas, de. hera dirigir su buque. segun su situaci in geografica y reserva de combustible : puerto Norvego. pasande por el Norte de Irlandia, o de la Amer del Sur, con preferencia en este caso, Argentino De to oder realizar lo expuesto en el parrafo anterior por talta de 12. se dirigirá a puerto espanol aunque tarde mas 48 horas. Je 5) Desde el momento en que reciba el avurnave de confirmacion se abstendrá en absoluto de emitir ninguna senal radiotelegrafica, quedando desuk se momento en suspenso la orden de dar la situacion al mediodu 6) Del exacto cumplimiento Je estas instrucciones será responsable con arreglo a 1.. leyes de Guerra M Ind, 28 de Abril de 1941. Do orden de E Aimirante Jafe - Estado May de to Armeda. DE SECURITY SECURITY - MINISTRY OF MARINE 326 NAVAL HEADQUARTERS OPERATIONS - SUBJECT: TEXT: SECRET INSTRUCTIONS WHICH WILL ENABLE YOU TO RECEIVE IMMEDIATEEY THE WARNING NOTICE. (1) In order to make certain that the warning received emanates from Naval Headquarters, you will instruct the wireless operator to keep tuned in on the wave-length and station that gave out the warning. (2) One half hour after receipt of the warning, you should receive the following : "Avoid navigating within a zone 50 miles from the position previously warned against.", which will confirm the authenticity of the message as having come from Naval Headquarters. (3) As soon as you are reassured on this point you should proceed immediately to make for the nearest Spanish port. (4) If you are unable to reach a Spanish port within 48 hours, you should immediately make for, depending on your position and your fuel reserves, either a Norwegian port, taking a coubse North of Ireland, or a South American port, preferably in this case, Argentine. If you are unable to follow the instructions in the preceding paragraph for lack of means, you will proceed to the nearest Spanish port even though this will require more than 48 hours. (5) From the time you receive the confirmation of the warning, you will refrain from sending any wireless signals, ignoring from that time the order to report your noonday position. (6) You will be held responsible for the exact carrying out of these orders, in accordance with the laws of warfare. MADRID, April 28,1941. By Order of The Chief Admiral of Naval Headquarters The Vice-Chief (STAMP) (RAPALLO.) 327 MINISTRY OF MARINE TRANSMISSIONS Book of Secret Instruction to Captains of Merchent Ships Model No. 177 328 SECRET INSTRUCTIONS FOR USE WITH THIS BOOKLET In the possibility that the Navy High Command must give you orders you must follow exactly the following instructions. 1. The radio services of your ship must be kept in the very best condition, not only in regard to personnel, but also as far as material is concerned. 2. You must take personal care that the regular listening hours be kept with every efficiency and severity. 3. Orders must be given that the radio personnel gives every attention to the warnings of the Spanish radio stations, civilian as well as war marine, and that they be immediately advised upon receiving any, whatever may be the hours and circumstances. 4. When you receive exactly the follow- ing warning: "At 460 --15' lat. and 290 --25' Long W. a group of mines was found in the ship's course," -1- 329 you will proceed to open the document which is found sewn and sealed at the end of this book of secret instructions, cutting it exactly with scissors along the punctuated line. 5. You will abstain to communicate and comment with any person, outside of the Navy authori- ties, the contents and existence of this document. This reservation will be carried out to the extreme of denying its existence, alleging ignorance when questioned by any person unless it be a high personage of the ship owner's firm or professional companions. 6. The book of secret instructions must be kept in a perfectly safe place and, in case of misplacement or observing any abnormality in it, immediate account of this must be given to the Spanish Navy authorities or consul of the first port which you visit if the consul is Spanish. In the contrary case, send the following cable or ur- gent radio to the Ministry of Marine: "Arrived (name of the port) awaiting instructions. Captain." 7. If for any reason you are relieved of the ship's command, the book of secret instructions -2- 330 must be delivered to the Spanish Marine authorities so that they, in their turn, can deliver it to the captain who will relieve you. 8. As soon as you arrive at any port you must present yourself, without delegating anybody else, to the commander or assistant of the Marine of said port with the book of secret instructions so that proper note can be made by the corresponding commander or assistant of the Marine. 9. The text of warning may be changed fre- quently and a new text will be received in time. 10. In case these instructions should be changed, you will receive new instructions by the sane procedure and of the same nature as these. 11. Once a captain of a ship is in possession of this book, he alone is responsible for its preservation and safety. 12. The obvious loss OT destruction of the book of instructions will immediately bring upon its possessor the perpetual disqualification for commanding ships without prejudice to the verdict pronounced by the War Council, which will judge him for the crime -3- 331 of high treason. Madrid, April 30, 1941 By order of the Admiral-in-Chief of Marine. 332 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE December 27, 1941 For TO Secretary Morgenthau FROM Mr. Dietrich CONFIDENTIAL Registered sterling transactions of the reporting banks were as follows: Sold to commercial concerns Purchased from commercial concerns £28,000 & 8,000 Open market sterling closed at 4.03-3/4, and there were no reported transactions. The Canadian dollar, which closed at a discount of 13-7/87 last night after reaching a new low of 143/8 held steady at 13-7/87 today. The New York bank that has been converting an American customer's Canadian funds into U. S. dollars reported this morning that it had already sold 225,000 Canadian dollars under this order. About 160,000 remains to be sold; the customer has placed a limit of 13-7/8% on this balance. In New York, closing quotations for the foreign currencies listed below were as follows: Argentine peso (free) Uruguayan peso (free) Venequelan peso (free) .2360 .0516 .5775 .2065 .5310 .2700 Cuban peso Par Brazilian milreis (free) Colombian peso Mexican peso There were no gold transactions consummated by us today. No new gold engagements were reported. D 333 BRITISH EMBASSY WASHINGTON, D.C. 27th December, 1941. PERSONAL & SECRET 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, (For the Ambassador) R.I. Campbell The Honourable Henry Morgenthau, Jr. United States Treasury, Washington, D.C. Copy No. 14 334 BRITISH MOST SECRET (U.S. SECRET) OPTEL No. 51 Information received up to 7 a.m., 26th December, 1941, (I) NAVAL Report from HAIFA states that on 25th a British 6,000 ton tanker was on fire and a Norwegian 7,000 ton Tanker had been severely damaged by fire. No further details but thought the result of air attack, A naval anti-submarine vessel was destroyed by enemy aircraft at PENANG on the 12th. Two medium sized British merchant vessels and one of smaller tonnage have been mined off the east coast. The two former have sunk, (II) MILITARY LIBYA. Pockets of enemy troops still remain and are showing fight in the area north east of BENGHAZI. BARCE aerodrome is not yet considered safe from ground attack. On the 24th enemy columns of M.T., armoured cars and some tanks were attacked by our mixed columns in the GHEMINES-BEDA-FOM area, The enemy is still showing signs of life in the JEDABYA area and will undoubtedly do his best to avoid being cut off. The pursuit is being maintained. MALAYA. Enemy troops have reached KJALA TRENGGANJ on the east coast. RUSSIA. The enemy attack on SEVASTOPOL is continuing. (III) AIR OPERATIONS WESTERN FRONT. 25th/26th. Thirty-nine enemy aircraft were operating mainly in the THAMES ESTUARY. MEDITERRANEAN. 23rd/24th. Seventeen Wellingtons bombed the landing ground at EL AGHEILA and another one in the vicinity starting fires. hundred enemy aircraft were found destroyed on BERCA landing ground. 24th, Our fighters attacked 11.T. and troops in the EL AGHEILA area. Many vehicles were destroyed or damaged and casualties inflicted on troop Three Blenheims attacked a large schooner in ZOUARA Harbour, probably damaging 11 below the water line, Enemy aircraft dropped twelve mines on BENGHAZI eleven of which fell outside the harbour. 24th/25th, Nine Wellingtons bombed TRIPOLI Harbour and also a Cruiser and three Destroyers ten miles outside steering a N.N.Wly. course. Six naval aircraft also laid rines, Three enemy aircraft were over MALTA for eight and half hours. No damage was caused. (IV) A Japanese division probably from SIAM is reported to be concer trating in the KRA Isthmus on the railway between PRACHUAB, KHIRIKUN and CHUMPORN, 335 PARAPHRASE OF A SECRET CONSID MESSAGE RECEIVED AT WAR DEPT. at 19:08 a. m. p. m. SECRET December 27 + 1941 (Clessification Stamp) From Kuibyshey Filed 12:42 a. m. p. m. Received in I. B. 04:30 a.m. p.m. December 26 194 December 27 , 194_1 No 133 1. U.S.S.R. officials decline to give information on air routes, which was requested separately by Griffis and by me. They state that agreement made in Washington specifies that planes will be delivered to Russia at Basra, and that it is no longer necessary to furnish the air route information sought. 2. I requested data required by oable 107 (12/5/41), but in view of Soviet refusal of information on air routes, this data will probably not be furnished. 3. At the same time, Russians ask that P-40 parts be forwarded immediately as follows: a. For every ten ships; five relays and governors, two vacuum pump propellers and two fuel pump propellers, both complete with extra blades, one complete under-carriage assembly, tail wheel, cleo, and retraction assembly, as well as motor valves, bearings, connecting rods, and spare pistons; b. For every twenty ships; one complete set of control cables and one electric hydraulic pump; Co Dry batteries of 4 15, and 120 volts. 4. As of December 27, Russians state that 35 out of 228 P-40's are completely out of commission, and the rest are operating without generators. 5. Is it desired that I discourage or encourage Russiane in I.B.No. 336 PARAPHRASE OF A SECRET CONFIDENTIAL RESTRICTED MESSAGE RECEIVED AT WAR DEPT. (a.m.) 1p.m. From SECRET 194 . at (Clessification Stemp) a.m. p.m. Filed a.m. Received in 1. B. 194 p.m. , 194 No. -2- discussing matters of P-40 supply with me, which they have been doing since December 1st? I have cooperated with them, hoping to bring about some change of attitude as to Military Attache functions. 6. From statements in conversations I gather that use of armored motor sleds, at least experimentally, is probable. (G-2 Comment: Cable of 12/5/41 referred to contained a list of questions submitted to Soviets by Air Corps, concerning important details of equipment, armenent and fuel, in connection with the preparation of planes for U.S.S.R. shipment.) MICHELA Paraphrased by Major T. K. Swett Action copy to Chief of the Air Corps: others informational 2. 12/28/41 I.B. No. dhe Indicate distribution by check for one copy, by figure for more than one. Sculer copy by drawing circle. State WPD ONI GHQ DASW ASWA OCAC CAAF SW Message conter indicate recipient of parC/S ACC.0-3 USW ACS.04 I 5 x 10 CLIB 6 9 NA FL C1B BES Air SES WES CES EES LAS FEB St. And 2 X 2 WAR DEPARTMENT acswe DAD Russis OLLA Carrie X Sec. Cleasification Stamp RS Treas x Mission Mr. 2 I X SECRET