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246
JAN 13 1942
Secretary Morgenthau
Mr. Foley
Last Saturday, in accordance with your instructions, I sent . copy
of the mezorandum, which you sent to the President last Friday, relating
to our investigation of the General Aniline and Film Corporation, to the
Secretaries of State, Far, Navy, Agriculture and Commerce, the Attorney
General, the Comptroller General, the Coordinator of Information, the
Chairman of the Securities and Exchange Commission, and the Office of
Emergency Management. These agencies have had relations, contract or
otherwise, with General Amiline. In each letter of transmittal I suggested
the advisability of taking steps to eliminate situations of the character
described in the memorandum.
If you agree, we now propose to take the following additional steps:
(1) Freeze the funds and suspend and bar from the premises of the
company the following officials who inearnate its I. G. Farbon domination
Rudolph Huts
Hans Aickelin
- vice president and director of the
company - salary, $80,000 & year,
- vice president and production manager
of the General AN ine works analy, $60,000 n year,
- acting general manager Agf Ansee
Leopold Eakler
Division - salary $27,000 a year,
William VOS Rath - vice president and secretary of the
company, supervising the Oselid
Division - salary $46,000 a year,
F. W. von Weister - general manager Ozalid Division salary, $18,000 a year.
All of these officials are naturalized American citizens with German
backgrounds who, prior to their arrival in this country from Germany, were
associated with I. G. Farben.
(2) Ne propose to subject to freesing control, on 5 restricted
special license basis, twenty-five additional employees of the com any
*hose names appear on the attached list. Like the foregoing officials whom
ae to suspend from the company, these individuals have German original
(twelve of them being German cities) and have been closely identified with
I. G. Farben for anny years. At the present time we do not intend to suspend
these persons, but will supervise then through control of their funds pending
further investigation.
247
-The actual operations of the General Aniline and Film Corporation in
all significant respects have been, and are, dominated and controlled by
I. G. Farben, the German Dye Trust - which is the Nasi Government.
As I indicated in ay peporandum of January 7, 1942, the Omalid Division
of the company, ahose active heads and guiding spirits are William FOR Rath,
known to have beet connected with the German Secret Service in the United
States and Switserland during the last war, and F. F. VOD Weister, VOR Rath's
relative and junior side, constitutos G wide-apread organization with uncaralleled access to industrial defense plants and government agencies. To
have evidence that the operations of this division included the sending of
information to Germany.
We have found that the liff Anaco Division of the company has a number
of government contracts for the development of film relating to vital military
secreta. No have also found that, until recent rooks at least, the Division
has been conducting experimental work in aerial photography and related sub-
jeets with the Aray. The seriousness of this situation 18 emply indicated
by the fact that film development work for the Army has been carried on under
the supervision of German aliens and naturelised German sliens who personify
I. G. Farben domination.
The General Aniline Division of the company, which is engaged in the
production of chemicals end dyes, is also permeated by I. G. Farbon men and,
in many instances, by avoid Nazis. A major part of the work of this Division
is the production of materials for other industrial concerns having government
contracts and orders.
Te already have ample evidence to support the foregoing conclusions and
to justify the steps we propose to take. As we proceed with our examination
of the affairs of the company and its personnel, additional moves will be in-
dicated, including more definitive action with regard to the individuals referred to in this memorandus.
If this action meets with your approval we will issue the necessary
instructions to the Federal Reserve Bank of New York and John E. Mack, the
resident of the company.
Approved:
1 13/42
248
Werner Alexewics
Karl W. Braun
Freen Philipp Bluennel
Ferdinand Busse
George W. Brottschneider
Frits H. Dersch
Hermann Duerr, Dr.
Krich C. Pott
P. Raeder
Ludwig Richter
Horst Rinne
Bruno Charles Roehrl
Dr. Erich Ressboch
Hans Werner Sachs
Karl H. Foesten
Dr. willy h. Schmidt
Dr. H. W. Grimmel
Frich Schoder
Hermann Hoerlin
Osker Schults
Carl Mueller
Emay Stoockel
Fritz Walter Helmuth Mueller, Dr.
J. Rudolph Worch
Paul Hawiasky
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE JAN 13 1942
TO
to Morgenthau
play
last Saturday, in accordance with your instructions, I sent a copy
memorandum, which you sent to the President last Friday, relating
investigation of the General Aniline and Film Corporation, to the
Les of State, War, Navy, Agriculture and Commerce, the Attorney
the Comptroller General, the Coordinator of Information, the
of the Securities and Exchange Commission, and the office of
Management. These agencies have had relations, contract or
Ase, with General Aniline. In each letter of transmittal I suggested
advisability of taking steps to eliminate situations of the character
described in the memorandum.
If you agree, we now propose to take the following additional steps:
(1) Freeze the funds and suspend and bar from the premises of the
the following officials who incarnate its I. G. Farben domination:
Rudolph Hutz
- vice president and director of the
Hans Aickelin
company - salary, $80,000 a year,
- vice president and production manager
Leopold Eckler
- acting general manager Agfa Ansco
William vom Rath
of the General Aniline works salary, $60,000 a year,
Division - salary $27,000 a year,
- vice president and secretary of the
company, supervising the Ozalid
Division - salary $46,000 a year,
F. W. von Meister - general manager Ozalid Division salary, $18,000 a year.
All of these officials are naturalized American citizens with German
unds who, prior to their arrival in this country from Germany, were
ted with I. G. Farben.
(2) We propose to subject to freezing control, on a restricted
license basis, twenty-five additional employees of the company
names appear on the attached list. Like the foregoing officials whom
pose to suspend from the company, these individuals have German origins
of them being German aliens) and have been closely identified with
Farben for many years. At the present time we do not intend to suspend
persons, but will supervise them through control of their funds pending
investigation.
2-
The actual operations of the General Aniline and Film Corporation in
all significant respects have been, and are, dominated and controlled by
I. G. Farben, the German Dye Trust - which is the Nazi Government.
As I indicated in my memorandum of January 7, 1942, the Osalid Division
of the company, whose active heads and guiding spirits are William vom Rath,
known to have been connected with the German Secret Service in the United
States and Switzerland during the last war, and F. W. von Meister, vom Rath's
relative and junior aide, constitutes a wide-spread organization with unparalleled access to industrial defense plants and government agencies. We
have evidence that the operations of this division included the sending of
information to Germany.
We have found that the Agfa Ansco Division of the company has a number
government contracts for the development of film relating to vital military
secrets. We have also found that,until recent weeks at least, the Division
of
has been conducting experimental work in aerial photography and related sub-
jects with the Army. The seriousness of this situation is amply indicated
by the fact that film development work for the Army has been carried on under
the supervision of German aliens and naturalized German aliens who personify
I. G. Farben domination.
The General Aniline Division of the company, which is engaged in the
production of chemicals and dyes, is also permeated by I. G. Farben men and,
in many instances, by avowed Nazis. A major part of the work of this Division
is the production of materials for other industrial concerns having government
contracts and orders.
We already have ample evidence to support the foregoing conclusions and
to justify the steps we propose to take. As we proceed with our examination
of the affairs of the company and its personnel, additional moves will be indicated, including more definitive action with regard to the individuals referred to in this memorandum.
If this action meets with your approval we will issue the necessary
instructions to the Federal Reserve Bank of New York and John E. Mack, the
president of the company.
m
proved: JAN 1 3 1942
Erich C. Pott
Braun
P. Raeder
lpipp Bluennel
Ludwig Richter
d Busse
Horst Rinne
7. Brettschneider
Dersch
.
lexering
Brumo Charles Roehrl
Dr. Erich Rossboch
Daerr, Dr.
Hans Werner Sachs
Foesten
Dr. Willy A. Schmidt
W Grimmel
Erich Schoder
Hoerlin
Oskar Schults
iter
Emmy Stoeckel
uter Helmuth Mueller, Dr.
J. Rudolph Worch
insky
252
January 13, 1942
11:10 a.m.
LOANS TO SMALL BUSINESS of China Joan-
Present: Mr. Viner
Mr. Bell
Mr. Morris
Mrs. Klotz
Mr. Kades
MR. BELL: Did you get it all settle d?
H.M.JR: With the President? Yes. The President
says this, on the Chinese thing. He said, "You can
tell T.V. Soong for me, I am very enthusiastic about
the idea, and that - I told him about the State Department's objections to our hiring troops. He says, The
State Department doesn't know what they are talking
about. Supposing I want to make an arrangement with
Chiang Kai-shek, who is chairman of that board that
he has the defense troops, and I want a million attack
troops, and I am going to put them under General Drum.
I may want to take Shanghai. I may want to support the
Philippines. I may want to do anything, but I need
a million troops under General Drum, attack troops.
Now, T expect to pay for them. I will pay for them out
of my own fund, Lend-Lease, as Commander in Chief. He
says, I will pay them five dollars for maintenance,
to the Government to maintain them, per month, and five
dollars to the troops themselves." And then he says,
"We will call it the dimo, d-i-m-o, democracy, the new currency.
MR. VINER: D-e-m-o.
(Mr. Kades entered the conference).
253
-2MR. MORRIS: I asked Chuck to come in.
H.M.JR: That is all right. He pronounced it the
demo.
MR. VINER: Yes, that is right.
H.M.JR: D-e-m-o.
MR. BELL: Demo currency.
MR. VINER: You have started something.
MR. BELL: I am afraid you did.
H.M.JR: I said, "Well, do you like it?" He said,
"Oh, this is wonderful." And I told him about the idea
to raise the old trade dollar. He said, "Call it the
demo, and you can fix it up any way that you want."
MR. BELL: Backed by silver?
H.M.JR: He wasn't interested in details, but he
says, "If I want a million shock troops, as Commander in
Chief of the United States Government, I can get them and
pay for them, whether they are Chinese or whatever they
are." He says, "It is ridiculous to tell me I won't
get them."
MR. VINER: Well, we will have to hear from the
Chinese.
H.M.JR: Well, they are coming in at a quarter of
three. I sent word to them. So that is that, and if
anybody is interested in Alien Property Custodian, get
Ed to tell you what the President said on that.
MR. BELL: On the Custodian?
H.M.JR: Well, on what I am doing now, how I
am moving in on Aniline Dye. Get Ed to tell you.
254
-3You ( Morris) look sleepy.
MR. MORRIS: I am (laughter).
H.M.JR: Well, I just wanted to know whether I was
imagining something or not.
MR. MORRIS: I have worked long and late, and came
down on the train.
H.M.JR: What is my bond worth this morning?
dead.
MR. BELL: It hasn't changed. The market is rather
H.M.JR: I have been trying to catch my breath.
The President was in fine form this morning. He loved
this idea of troops.
(Mr. Hadley entered the conference).
MR. BELL: That is what we thought when we went
back in the other room.
MR. VINER: We were afraid he would like it too
much.
H.M.JR: How is my refunding?
MR. HADLEY: No change in the market today. Every-
thing is just flat.
H.M.JR: Perfect. Thank you.
(Mr. Hadley left the conference).
MR. VINER: How are the subscriptions coming in?
MR. BELL: We got a hundred and ninety million
last night.
H.M.JR: Now who is here representing the little
business man? I dare him to raise his hand. All right.
255
-4MR. MORRIS: I have had many talks with the
Army and the Navy and OPM and the Federal Reserve.
H.M.JR: Why do you leave out the Marine Corps
and the Coast Guard?
MR. BELL: They are included now.
MR. VINER: They are in the Army and "avy.
MR. BELL: Coordinated.
MR. MORRIS: The Army, I think, is quite keen for
Mr. Eccles' plan of having a corporation that will make
advances up to a million dollars to small businesses.
It will be run by the Federal Reserve. They will try
to do it through the various banks, as much as possible,
letting the banks either participate or act as servicing
agents to come into the Federal Reserve Banks of their
branches to get the final O.K. on a loan. The Navy
is just acquiescent. They think they can run things
without much help. I don't altogether agree with them.
I think they can get some value out of it. If the
RFC was run along different lines they have the authority and the money and they ought to be the ones to do
it, but they are not set up to do it. They are only
set up to pass on loans in Washington as a centralized
agency, and they have always tried to make money on
all their loans, instead of trying to do the job, so
I am very sceptical of the RFC doing it. Now, even if
you approved it, you have got the political problem
that Mr. Jones will certainly jump up and say he is
doing a beautiful job, and point to a lot of things,
and there you are.
H.M.JR: Well, let's just leave Mr. Jones out of
it for the moment. I take it the thing is that I should
publicly get behind this bill?
MR. MORRIS: Well, that is what it will probably
amount to. At this point Mr. Eccles simply wants
256
-5the Treasury approval, but that will mean publicly -MR. BELL: Eventually, you would have to, but
not now.
it?
H.M.JR: Do you recommend that I should get behind
MR. BELL: If we are going in that direction, I
recommend you get behind it. I think we ought to discuss here a little further what we are going to do
about Jones and Eccles, because I think Jones will
kill the bill on the Hill unless he is sold before it
goes up. I am in favor of turning the hundred and
thirty-nine million dollars over to the Federal, and
letting them go ahead in making these loans if we can
get Jones' agreement to go along, or at least get his
promise not to fight it on the Hill. I hesitate
to recommend that the Federal Reserve set up a corpora-
tion around the Board, but I guess it is about the only
thing we can do at the present time. I don't like
the corporation borrowing from the Federal Reserve
Banks, but I understand that is a minor point, and
that Eccles says he is perfectly willing to borrow
from the Treasury like the other corporations do,
but, in general, I think that in view of what the
Army says that they can not get accomodations from
Jones, that we ought to go ahead with Eccles if we
can get Jones to keep out of the picture, but I think
he ought to be consulted before it comes out in the
open.
MR. VINER: I would put a little more emphasis on
the last. I think we ought to give Treasury support to
a proposal for a set-up, but that you ought not to
continue working with Eccles without the knowledge of
Jones on this, and you ought to say that you are per-
fectly willing to give Treasury support to this, if
and when Eccles calls in Jones , so that Jones
knows what is going on.
257
-6Partly because I think that is good administration,
and partly because I think it may be conceivable that
you can get Jones to say "That is all right, if you stay
out of the loans over a million, I am glad to get
rid of the small ones." That is a possibility, I think,
and they might split the field that way, and they might
do it without quarrelling, without a fight, and with a
good chance that the bill will go through, because
Jones won't be blocking it. Jones may say, "Sure, fine."
And I would do it orally with Eccles. Clear with
Eccles, say, "Why don't you try Jones on this?" And
then if the thing comes to an issue and Jones is block-
ing it, then you may say, as long as it is open, you
will give the proposal your support, but I wouldn't
give it your support while Jones hasn't been informed.
He is a fellow Cabinet member of yours and this is
his field.
H.M.JR: Chuck?
MR. KADES: I feel the same way as Jake does, Mr.
Secretary.
H.M.JR: Well, this is the way I feel. I mean,
I am not trying to duck this thing. I think everything
that you people have said is right. Now, it gets down
to whether Bell wants to do it or whether he wants
to let Dave Morris try to carry the ball, let him go over
and call on Mr. Jones, or let him go over to Mr. Eccles,
or let Bell, Eccles, and Morris go over and see Mr.
Jones.
MR. BELL: Well, I should think maybe that we ought
to tell Eccles just about how we feel about it.
MR. VINER: Yes, orally.
MR. BELL: And let Eccles call a conference, a
general conference of all the interested agencies
and let the Treasury be represented too.
H.M.JR: That is smart.
258
-7MR. VINER: And we can tell Eccles in advance that
he won' t get any opposition from us, that we believe
in the proposal, but that we don't believe in this way
of dealing with it. We want it open.
H.M.JR: Now, I have got a suggestion. In order
to do this thing, it certainly can't do any harm, I
would suggest, Dan, if you don't mind, and I would like
the credit for this if you think well of it, the
suggestion th t Harold Smith have a representative,
because the bill has got to go through him, so he can
sit in at the beginning.
MR. BELL: Yes. That is all right.
H.M.JR: In other words, he sits in at the beginning. I think Eccles should call a conference, and the
Director of the Budget should have a representative there
and - so that he knows about it. But I will underwrite
everything that you people said, and I would get them
active. I would help.
MR. BELL: Yes, I think we ought to help after
we once --
MR. VINER: We ought to offer our cooperation
on drafting and on anything else they want.
H.M.JR: O.K. gents.
259
January 13, 1942
11:52 a.m.
HMJr:
Leo
Crowley:
HMJr:
Hello. Leo?
Yes.
Are you alone?
Yes.
C:
HMJr:
Good. Leo, I went to see the President today
with a recommendation that I had in regard to
General Aniline.
Yes.
C:
HMJr:
And after making a very careful study, we felt
that we ought to suspend the top five fellows.
Yeah.
C:
HMJr:
And then freeze their personal funds, and then
I recommended that we freeze the funds of about
thirty-odd other people, and I've had I. G. Farben's
background.
C:
HMJr:
C:
HMJr:
C:
Yeah.
The President was very much interested, and he
said that if anybody asks you what I said, he
said that you can tell them that I said, "Kill
the sons of bitches. .
That's right. That's right.
So
I saw the report that Ed sent to you, and
there's no doubt but what that's the thing to
do on that thing. You can't be too tough on
those kind of people.
HMJr:
Well, that's the way that I feel, and I was
delighted to know how the President felt; and
Ed has a copy of the recommendation which he
made to me which the President went over word
by word.
--
260
Yeah.
C:
HMJr:
C:
HMJr:
And I'd like you to see it 80 that you'll
know what we're doing.
Fine.
And naturally, we'll get a comeback from John
E. Mack on this thing, so
HMJr:
That's perfectly all right.
But if - I'm sure that I can count on your
C:
Absolutely. You tell Ed that - I've been working
C:
support.
with Ed a little bit. He's been doing all the
work and he calls me once in awhile, but I'm
sure that you're doing the right thing over
there.
HMJr:
Well, I wanted the President to know and I
didn't know just how strongly he felt; but
when he used that kind of language, I said
I can understand it. And one thing, for
instance, which happened - I don't know whether
they told you - we found that the Aberdeen
Proving Grounds sent moving pictures up of
some secret war things.
C:
No, I didn't know that.
HMJr:
And they were being developed at the Agfa
C:
HMJr:
C:
Ansco film thing
Is that so?
and the President was quite excited about
that.
Well, now, anything in the world that you want
me to do on that thing there, or any men you
want, or anything else, we're with you a thousand
per cent.
HMJr:
Well, all I want on this is, I want you to know
about it. Ed's got the memorandum, and he'll
261
-2call you up and get in touch with you; and
then if there's any backfire, I just want your
backing.
C:
Well, if we do, we'll divide it anyhow.
HMJr:
Well I can handle it. I mean, I'11 not -
C:
HMJr:
but I mean, I just don't want any
There won't be any backfiring or anything like
that.
When I talk backfire, I meant from the Department
of Justice.
C:
Oh, oh. Well, there won't be any trouble about
HMJr:
Well, that's what I meant. No, I'11 take care
that.
of the rest; but I meant from the Department of
Justice.
C:
Fine. Well, I'11 be glad to go along and okay
the thing, tell Ed. And get in touch with me.
HMJr:
Wonderful.
C:
Thanks.
HMJr:
Thank you.
C:
Good-bye.
262
January 13, 1942
11:56 a.m.
HMJr:
William H.
Hello.
McReynolds:
Good morning, sir.
HMJr:
Hello, Mac, how are you?
Mc:
First rate, thank you, sir.
HMJr:
Mac, what have you been able to do on that
non-Civil Service Order for one Leo Crowley?
Mc:
Well, I haven't got the clearance with the
Attorney General yet, because I haven't been
able to reach him. I've got the Civil Service
Commission here in my room now.
HMJr:
You have?
Mc:
Yeah, the whole group of them.
HMJr:
On this thing?
Mc:
No, not about this; although this was one of
the subjects that came up.
HMJr:
Well, you're going to town on it?
Mc:
Yes.
HMJr:
What?
Mc:
Yes, we're going ahead with it.
HMJr:
Well, when do you think
Mc:
HMJr:
Mc:
HMJr:
Mc:
I hope to get it done today.
Well, if you do, let me know; I'm interested.
You bet I will.
Because I'm a friend of Civil Service.
I know it.
-2-
263
HMJr:
And I don't want to prostitute it.
Mc:
They all know it.
HMJr:
Well
Mc:
Righto.
HMJr:
You might make a - I want them to keep their
Mc:
(Laughs) Okay.
HMJr:
(Laughs)
Mc:
Well, how are you feeling?
HMJr:
Well, how do I sound?
Mc:
You sound swell.
HMJr:
Okay.
Mc:
(Laughs) Okay.
HMJr:
Thank you.
Mc:
Good-bye.
amateur standing.
264
January 13, 1942
2:45 p.m.
FINANCIAL ASSISTANCE TO CHINA
Present: Dr. Soong
Mr. Coe
Mrs. Klotz
Mr. Bell
H.M.JR: You haven't heard anything yet from your
Government?
MR. SOONG: No.
H.M.JR: Well, I saw the President this morning
and he authorized me to say to you -(Mr. Bell entered the conference).
Mr. Bell, you know Dr. Soong?
The President authorized me to say to you that he was
very enthusiastic about this suggestion, that we will
work out some way mutually agreeable to the two Governments, that we compensate, possibly up to one million
soldiers, at the rate of, say, five dollars U.S. currency
a day - a month, for their pay, and five dollars a month
for their maintenance, and he said he thought that the
five dollars a month for their maintenance would help in
stabilizing your currency, and that the five dollars
pay would be good for the morale. He has some quite
ambitious plans. He is very much - he really was quite
excited about it. I think I won't go further than that.
He also gave me his thought which is, he has been
interested in a kind of a currency called the demo,
meaning democracy, which would be a unit of currency
which he said you and I could work out, but the idea-
265
-2you see, we used to have, after all, the trade dollar
and - in China, and then there was the Maria Theresa
dollar, which was used in -MR. SOONG: Mexico, wasn't it?
MR. BELL: Austria?
H.M.JR: No.
MR. COE: Abyssinia.
H.M.JR: Abyssinia. So he was, as I say, really
very much interested in it. This of course is confidential, but I had a chance to be with Mr. Churchill last
night, and I told him something of your troubles, and
something of the suggestion that I had, and he liked it
very much, and Mr. Churchill said, "I authorize you,
Mr. Morgenthau, to go ahead and make any arrangements
you want with Dr. Soong, and I will back you up one
hundred per cent."
MR. SOONG: Good.
H.M.JR: He says, "You make the arrangements, and
anything that you do, I am saying now, I will back
you up, so that is pretty good work.
MR. SOONG: Yes. You are running the Treasury of
two countries now (laughter).
H.M.JR: No. And last, but not least, inasmuch as
Mr. Churchill seemed in a very good humor, I said I would
like to make another suggestion. I said, "Have you ever
heard of a man called Sir Otto Niemeyer?" Then he said,
"Absolutely. He worked for me when I was Chancellor
of the Exchequer." He said, "He is nothing but a pennypinching tool of the Treasury. What is he doing?"
I said, "He is out there, and he is asking for mortgages
on customs when China is trying to free itself of all
those kind of things, and he said, "Whoever sent him
266
3-
out there?" And he called this fellow, Max, he said,
"Come over here, listen to this." And he went on
for about an hour. I understand they were going to
send cables last night to recall him, because he has
been a thorn in your side, hasn't he?
MR. SOONG: Yes, due to a misunderstanding of
the situation.
H.M.JR: Well, as Mr. Churchill said, he is too
much of an old-fashioned banker. He is not like Mr.
Bell, you, and me. We can adapt ourselves to the demo.
MR. BELL: We are flexible.
H.M.JR: To the demo.
MRS. KLOTZ: The demo exchange.
H.M.JR: To the demo, you see.
I hope that your Government now will be as
pleased as Mr. Roosevelt seems to be, and as Mr. Chur-
chill is, and as I say, I think when the President
gets down to it, I would rather have him tell you what
his idea is about the Army, because he appreciates that
the Generalissimo is in charge of that area out there,
but he has some ambitious plans which I take it he will
take up directly with the Generalissimo, but I feel
that I can go away now at least with the suggestion.
Mr. Roosevelt likes it, Mr. Churchill likes it, and
I hope the Generalissimo will like it. Mr. Bell will
be here, and I hope I can stay down there without
any worries for a week. I would like not to have any
worries for a week, because I am very tired. We have
kept Mr. Currie informed, and they have got all kinds
of worries about the Gresham Law, and what it is going
to do, and which is going to attract which, and all the
rest of that, but I am not going to worry about the
Gresham Law or any other kind of law.
MR. BELL: That is like the law of demand and supply.
It has been repealed (laughter).
267
H.M.JR: Or suspended.
MR. BELL: I think it has been repealed, hasn't it,
Frank?
268
January 13, 1942
3:10 p.m.
TAXES
Present: Mr. Paul
Mr. Sullivan
Mr. Knollenberg
Mr. Blough
Mr. Viner
Mr. Morris
Mrs. Klotz
M.JR: I am not going to be able to handle
this thing because I am too tired. This is what I have
got to suggest. One of two things can happen. I
can take Paul and Sullivan and Blough with me if they
would like to go. They don't all have to go. It is
volunteer. But I am either going to do one of two
things. I am either going to fly to Norfolk, which
would give you an hour with me tomorrow, you see,
uninterrupted, and come back - and I will know within
an hour, or I am going to go down to Jacksonville, and
you could co me back from there, but I couldn't absorb
anything now. If you want an hour or three hours with
me.
MR. PAUL: Well, we want it, even if we have to
fly to get it.
H.M.JR: Well, the old bean just isn't working.
I will know within an hour.
MR. PAUL: That will be tomorrow, Mr. Secretary?
H.M.JR: Yes, we are supposed to leave at nine
o'clock promptly from Anacostia. In the one case we
269
-2would go to Norfolk, and you will have to figure your
own way to get back, but if you went with me to
Jacksonville, I have already made the arrangements.
You would leave there at four-something and get back.
MR. PAUL: Who would that be, Mr. Secretary?
H.M.JR: You and Sullivan and Blough. There is
no use my trying to take this thing on now. But nobody
has
to go. I don't know whether anybody wants to fly or
not. John?
MR. SULLIVAN: I always have.
H.M.JR: Roy?
MR. BLOUGH: I would be very glad to fly. I may
be in the way though, in a conference of that kind.
Don't hesitate to say you don't want me along.
H.M.JR: I have asked you.
MR. BLOUGH: I would be very happy to go.
H.M.JR: Well, I am sorry, Randolph, but one
hour fresh in the morning - you could do a lot, couldn't
you?
MR. PAUL: Oh, yes.
H.M.JR: And I can't do a damn thing now.
MR. PAUL: Well, you will let us know then?
H.M.JR: But I did clean up the Chinese thing in
the last twenty-four hours.
270
January 13, 1942.
MEMORANDUM
Judge Justine Wise Polier (Mrs. Shad Polier) was in this
afternoon, on my invitation and pursuant to the Secretary's direction,
to talk about the Emerson case. She had a copy of a memorandum which
had been written by Emerson and sent to the Secretary, to which she
referred. We talked of the general character of the report, which I
agreed was deplorable and dealt with a lot of hazy gossip based mainly
on material obtained from F.B.I. She raised in particular two points:
First, as to appointments said to have been made by Emerson in the
National Labor Relations Board. These complaints were made by two disgruntled employees of the Board and the fact is, she said, that Emerson
did not have responsibility for making appointments but only made
recommendations to Fahy, who in turn made recommendations to the
Board. It seemed to her that if we were at all interested in the
question of the character of the appointments under Emerson at the
Board, the two logical men to be interviewed were Fahy, now Solicitor
in Justice, under whom Emerson worked, and Herbert Wexler, who has
been advising the Civil Service Commission on legal appointments and
has stated that the best job anyone has done in recruiting a legal
force for a defense agency is that done by Emerson for OPACS.
The second main point related to the Lawyers' Guild statements
cited by one of the persons interviewed, which were to the effect that
all but communists had left the Lawyers' Guild along with Robert Jackson
and others and that the Lawyers' Guild had refused to adopt a resolution condemning the invasion of Finland by Soviet Russia. This, Judge
Polier said, was totally wrong on two counts. First, the Lawyers'
Guild did pass a resolution strongly condemning the invasion and
second,Enerson was not present at the meetings at which the matter was
considered. Among those who remained in the Lawyers' Guild and who
might with equal justice be called communists, or fellow travelers,
are Federal Judges Julian W. Mack, Edgerton, Rutledge and Madden of the
Court of Claims; Judge O'Brien of Detroit; Judges Sischa and McNulty
of New York; Governor Stassen of Minnesota; Robert W. Kenny, a State
Senator of California; Professor Lloyd Garrison of the University of
Wisconsin; Professor Fry of the University of Pennsylvania; Professor
Sharp of the University of Chicago and Arthur Garfield Hays, New York
attorney. The fact is, she said, that a large and responsible group
of lawyers and judges, who were strongly anti-communist, preferred the to
stay in the Lawyers' Guild and to fight communist influences for
sake of the liberal purposes for which the Guild was founded.
271
-2I told Judge Polier that my recommendation to the Secretary
would be that we formally withdraw this report, dated November 12,
on Emerson and that we then proceed to reinvestigate and substitute
which would be carefully considered and fair.
a
I was able to talk to the Secretary at his home a little after
5:00 P.M. and he accepted this recommendation.
MG,
C
0
P
272
Y
January 13, 1942
Dear Mrs. Purvis:
The excellent photograph of Arthur, which
you were so good as to send me, has given me
great pleasure. I am delighted to have it and
also the unusual old box which belonged to him
and which for this reason I shall particularly
cherish. The fact that it also bears my
initials gives it an added significance.
Thank you most warmly for your thought in
sending both the photograph and the box.
Mrs. Morgenthau joins me in sending cordial
regards and best wishes.
Sincerely,
(signed) Henry Morgenthau, Jr.
Mrs. Arthur Purvis,
1020 Pine Avenue, West,
Montreal, Canada.
aim mail
n.m.c.
first Machouals
273
JAN 13 1942
MEMORANDUM FOR THE PRESIDENT
We have worked out a plan with Interior and
with representatives of the Philippine Government, for
imposing a strict control over Philippine securities
and impounding all Philippine currency within the United
States. Simultaneously, the Philippine Government will
take action in an effort to prevent such assets from
being liquidated abroad.
This action is intended to destroy any possible
"black market" in the United States for such currency and
securities as may have been looted by the Japanese and
might otherwise be snuggled into this country. These
measures, together with others already taken under freez-
ing control, also will seriously affect the marketability
of these looted assets in foreign markets. This general
type of program has been used by us for the last eighteen
months with a high degree of success in preventing the
Axis from liquidating securities looted in occupied Europe.
The basic documents which we propose to issue are
attached. If you approve we will act at once to cappy out
this program.
(signed) H. Morgenthau, Jr.
I approve the foregoin action.
Delivered by Service Secret
10.30
Chandler
THE WHITE HOUSE,
January , 1942.
File to Thompson
274
Notice to holders of Philippine
currency and Philippine government
and serverate securities.
In order to protest bone fide holders of Philippine currency
and securities from the effects which would otherwise result from the
disposition of such securities and currency which may have been looted
during the texporary occupation of parts of the Philippine Islands, the
following notification is hereby given on behalf of the Government of
the Common wealth of the Philippines.
All holders of Philippine paper currency elsewhere than within
the Philippine Islands are notified to deposit such currency on or before
February 1, 1942 for registration and safekeeping in a reputable bank
located outside, and organised under the laws of a country other than, an
enemy country, or territory occupied or controlled by an enery. Depositors
of such currency should obtain an appropriate receipt from such bank identifying the currency by kind, denomination and serial number. Banks receiving
such surrency for such deposit or holding such currency for their own account
are hereby notified to hold it is safekeeping pending further instruction.
Each such bank should immidately foreard to the New York agency of the
Philippine National Bank, 25 Broadway, New York, New York, a report in
three counterparte, certifying the names and addresses of the depositors
of such currency, the date of deposit, the amount so deposited by each
depositor and the description (including serial number) of the currency so
deposited. Such reports should be placed in the nail on or before
--
275
February 15, 1942. Each counterpart should, if fescible, be dispatched
by separate means.
All holders, outside the United States and elsewhere than ithin
the Philippine Islands, of securities issued by, or the obligation of,
either the Government of the Commonwealth of the Philippines, including
political subjivision thereof, or any corporation or other organization
organized under the laws of that government are notified to follow a imilar
procedure. Banks receiving such securities for registration and safekeeping
should identify them BE completely as possible in the receipts iven to depositors and in their reports which are forwarded to the New York agency of
the Philippine National Bank. Such reports should include the name and
address of the depositor, date of deposit, and the description should include
the name of the issuing party, the issue, the total number of securities, the
serial or certificate numbers, and the name of the registered owner, if any,
and in appropriate cases, the denomination.
The Government of the Commonweelth of the Philippines has requested
the United States Treasury Department and the Department of the Interior to
make appropriate provision for the registration of Philippine government and
corporate securities located within the United States, and to adopt such
regulatory measures 0.5 will assist in carrying out the purposes of this notification with respect to both currency and securities. Compliance with the
provisions of General Ruling No. 10 issued by the United States Treasury
Department, under Executive Order No. 8389, ea amended, shall be deemed to
be complience with the requirements of this notice.
276
-3All Philippine securities and currency not registered pursuant
to this notice will be prosused by the Government of the Commonwealth of
the Philippines, is the absence of clear proof to the contrary, to have
come under the control of the enemy.
J. M. Elisside
Resident Commissioner of the Philippines
to the United States.
1/12/42
277
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE
Press Service
No.
At the direction of the President, the Treasury Department acting
n ecoperation with the Department of the Interior today issued 6 general
uling under the freezing regulations imposing a strict control over Philippine
equalities and impounding all Philippine paper currency within the United
tates.
These measures, taken at the request of the Philip inc Government,
To designed to thwart any attempt by the Axis to dispose of looted Philippine
assets in the United States. Simultaneously the Philip inc Government took
ction to prevent looted assets being liquidated in markets outside the
United States. It was pointed out that not only does this interfere with
the Axis WGT effort but in addition it may contribute materially to inisizing
Axis looting in the Philippines by removing the incentive for such action.
Under today's general ruling all Phili ine paper currency within
the United States must be deposited in blocked currency accounts in banks on
or before February 1, 1942. Currency placed in such account may be recoved
only with permission of the Treasury Department under a freezing control
license. On or before February 15, 1942, banks must report all Phili inc
currency in their possession. All dealings in such currency are prohibited.
This is intended to destroy any ossible "black market" in the United States
for looted hill in currency which night otherwise be sauggled into the
country.
278
-The general ruling also curbe all dealing in securities issued by,
or the ulligation of, - Philippine Government OF if company time
organised under Philippine law unless a "clearance certificate" KING as
Treasury Department Form TFEL-2 has been attached. Persons within the
United States holding any such securities will be able to have the clearance
certificates attached to their securities before February 1, 1942, with a
minimus of inconvenience since the Federal Reserve Banks will autountieally
attach the certificates upon presentation of the securities accompanied by
their description. After February 1, 1942 the clearance certificates will
be attached to Philippine securities only after the holder has satisfactorily
explained his possession of the securities and the reasons & clearance
certificate was not attached prior to February 1, 1942.
The Treasury Department called attention to the notice of the
Philippine Government to all holders of Philippine securities and currency
which was issued today. This notice directed all holders of such securities
and currency in all countries except enemy countries to deposit their holdings
with banks and forward a registro tion report through their bank to the New
York office of the Philippine National Bank. The full text of such notice
is as follows:
(Here take in notice of Philippine Government)
1-12-42
279
OF FEDERAL REGULATIONS
31 - Money and Finance: Treasury
Mapter I - Monetary Offices, Department of the Treasury
art 1)1 - General licenses under Executive Order No. 8389,
April 10, 1940, as amended, and regulations issued
pursuant thereto.
TREASURY DEPARTMENT
Office of the Segretary
GENERAL LICENSE NO. 83
UNDER EXECUTIVE ORDER NO. 8389, APRIL
10, 1940, All AMENDED, AND REGULATIONS
ISSUED PURSUANT THERETO, RELATING TO
TRANSACTI NE IN FOREIGN EXCHANGE. ETC.
A general License is hereby granted authorizing the detachment
of coupons from securities of the type referred to in General Ruling
No. 10, the presentation of such coupons for collection, and the
performance of such other nots and effecting of such other transactions as say be nece: earily incident to such collection, notwithstanding the fset that Treasury Department Form TFEL-2 say not have
been previously attached to the securities from which such coupons
are detached.
This general license shall not be deemed to authorise any
transaction rohibited by reason of any provision (or ruling or
regulation thereunder) of the Order other then General Ruling No. 10.
This license shall expire at the close of business on
February 1, 1942.
Acting Secretary of the Treasury.
.
ection
131.83
Part 131; Sec. 5(b), 40 Stat. 415 and 966; sec. 2, 48 Stat. 1,
54 Stat. 179, Public No. 354, 77th Congress; Ex. Order 8389, April 10,
1940, RP assested by Ex. Order 8765. June 14, 1941, Ex. Order 8832,
July 26, 1941, Ex. Order 8963, December 9, 1941, and Ex. Order 8998,
December 26, 1941; Regulations, April 10, 1940, as amended June 14,
1941, and July 26, 1941.
280
TREASURY DEPARTMENT
Office of the Secretary
GENERAL RULING NO. 10
UNDER EXECUTIVE ORDER NO. 8389, AS AMANDED,
AND REGULATIONS ISSUED PERSUANT THERETO.
RELATING TO TRANSACTIONS IN FOREIGN EECHARGE KIG.
(1) The acquisition, disposition or transfer of, or other dealing
in, or with respect to, any of the following is hereby prohibited except
as authorised by license expressly referring to this general rulings
(a) Any Philippine paper currency)
(b) Any security issued by, or the obligation of, either
the Government of the Counonwealth of the Philippines,
including political subdivisions thereof, or any
corporation or other organisation organised under
the laws of the Philippine Islands, unless Form TFIL-2
has been previously attached to such security by, OF
under the direction of, the Treasury Department.
Form TEE-2 will be attached to any security referred to herein if
presented to any Federal Reserve Bank on or before February 1, 1942,
accompanied by a description thereof on Form TFR-10. Subsequent to
February 1, 1942, Form TPEL-2 will be attached to such securities only
in the discretion of the Secretary of the Treasury and only upon the
filing of appropriate application with a Federal Reserve Bank tracing
the ownership of such security since January 1, 1942 and satisfactorily
explaining the reasons the security was not presented to a Federal
Reserve Bank on or before February 1, 1942, for the attachment of
Form TEE-2. Such form will be attached to stemped securities of the
type referred to in section 2A(1) of the Order only pursuant to existing
procedure relating to stemped securities.
(2) Except as authorised by license expressly referring to this
general rulings
(a) All Philippine paper currency held within the United
States is hereby required to be deposited on or before
February 1, 1942, in a blocked currency account with
either a domestic bank or with the New York office of
the Philippine National Bank.
(b) The bank of deposit shall hold such currency for the
account, or pursuant to the instructions, of the
depositor.
(e) On or before February 15, 1942, every bank holding
any blocked currency accounts shall file a report
on Form TFR-110 in tripliente with the appropriate
Federal Reserve Bank.
281
-2used in this general ruling and in any other rulings, licenses, inAs structions, etc., the term #blocked currency account" shall mean an
account from which no payments, transfers, or withdrawals may be made,
and no other transaction or dealing may be effected with respect thereto,
except pursuant to a license expressly referring to such account.
(3) Philippine paper currency which prior to January 1, 1942 was
recognised special value to collectors of rare and unusual currency,
or which is held as part of any collection of rare and unusual currency,
is hereby excluded from the provisions of this general ruling.
of
By direction of the President.
Secretary of the Treasury.
THE SECRETARY OF THE TREASURY
282
WASHINGTON
January 13, 1942
ORANDUM FOR THE PRESIDENT
We have worked out a plan with Interior and
with representatives of the Philippine Government, for
imposing a strict control over Philippine securities
and impounding all Philippine currency within the United
States. Simultaneously, the Philippine Government will
take action in an effort to prevent such assets from
being liquidated abroad.
This action is intended to destroy any possible
"black market" in the United States for such currency and
securities as may have been looted by the Japanese and
might otherwise be snuggled into this country. These
measures, together with others already taken under freez-
in; control, also will seriously affect the marketability
of these looted assets in foreign markets. This general
type of program has been used by us for the last eighteen
months with a high degree of success in preventing the
Axis from liquidating securities looted in occupied Europe.
The basic documents which we propose to issue are
attached. If you approve we will act at once to carry out
this program.
I approve the foregoing action.
Founda
WHITE HOUSE,
January
1942. pentato
originalizely g
283
Notice to holders of Philippine
currency and Philippine government
and corporate securities.
In order to protect bona fide holders of Philippine currency
and securities from the effects which would otherwise result from the
disposition of such securities and currency which may have been looted
during the temporary occupation of parts of the Philippine Islands, the
following notification is hereby given on behalf of the Government of
the Commonwealth of the Philippines.
All holders of Philippine paper currency elsewhere than within
the Philippine Islands are notified to deposit such currency on or before
February 1, 1942 for registration and safekeeping in a reputable bank
located outside, and organized under the laws of a country other than, an
enemy country, or territory occupied or controlled by an enemy. Depositors
of such currency should obtain an appropriate receipt from such bank identifying the currency by kind, denomination and serial number. Banks receiving
such currency for such deposit or holding such currency for their own account
are hereby notified to hold it in safekeeping pending further instruction.
Each such bank should immediately forward to the New York agency of the
Philippine National Bank, 25 Broadway, New York, New York, a report in
three counterparts, certifying the names and addresses of the depositors
of such currency, the date of deposit, the amount so deposited by each
depositor and the description (including serial number) of the currency so
deposited. Such reports should be placed in the mail on or before
284
2-
February 15, 1942. Each counterpart should, if feasible, be dispatched
by separate means.
All holders, outside the United States and elsewhere than within
the Philippine Islands, of securities issued by, or the obligation of,
either the Government of the Commonwealth of the Philippines, including
political subdivisions thereof, or any corporation or other organization
organized under the laws of that government are notified to follow a similar
procedure. Banks receiving such securities for registration and safekeeping
should identify them as completely as possible in the receipts given to depositors and in their reports which are forwarded to the New York agency of
the Philippine National Bank. Such reports should include the name and
address of the depositor, date of deposit, and the description should include
the name of the issuing party, the issue, the total number of securities, the
serial or certificate numbers, and the name of the registered owner, if any,
and in appropriate cases, the denomination.
The Government of the Commonwealth of the Philippines has requested
the United States Treasury Department and the Department of the Interior to
make appropriate provision for the registration of Philippine government and
corporate securities located within the United States, and to adopt such
regulatory measures as will assist in carrying out the purposes of this notification with respect to both currency and securities. Compliance with the
provisions of General Ruling No. 10 issued by the United States Treasury
Department, under Executive Order No. 8389, as amended, shall be deemed to
be compliance with the requirements of this notice.
285
-3All Philippine securities and currency not registered pursuant
to this notice will be presument by the Government of the Commonwealth of
the Philippines, in the absence of clear proof to the contrary, to have
come under the control of the enemy.
J. M. Elizalde
Resident Commissioner of the Philippines
to the United States.
286
TREASURY DEPARTMENT
Washington
Press Service
FOR IMMEDIATE RELEASE
No.
At the direction of the President, the Treasury Department acting
in cooperation with the Department of the Interior today issued a general
ruling under the freezing regulations imposing a strict control over Philippine
securities and impounding all Philippine paper currency within the United
States.
These measures, taken at the request of the Philippine Government,
are designed to thwart any attempt by the Axis to dispose of looted Philippine
assets in the United States. Simultaneously the Philippine Government took
action to prevent looted assets being liquidated in markets outside the
United States. It was pointed out that not only does this interfere with
the Axis war effort but in addition it may contribute materially to minimizing
Axis looting in the Philippines by removing the incentive for such action.
Under today's general ruling all Philippine paper currency within
the United States must be deposited in blocked currency accounts in banks on
or before February 1, 1942. Currency placed in such account may be removed
only with permission of the Treasury Department under a freezing control
license. On or before February 15, 1942, banks must report all Philippine
currency in their possession. All dealings in such currency are prohibited.
This is intended to destroy any possible "black market" in the United States
for looted Philippine currency which might otherwise be smuggled into the
country.
287
-2The general ruling also curbs all dealing in securities issued by,
or the obligation of, either the Philippine Government or any corporation
orgenized under Philippine Law unless a "clearance certificate" known as
Treasury Department Form TFEL-2 has been attached. Persons within the
United States holding any such securities will be able to have the clearance
certificates attached to their securities before February 1, 1942, with a
minimum of inconvenience since the Federal Reserve Banks will automatically
attach the certificates upon presentation of the securities accompanied by
their description. After February 1, 1942 the clearance certificates will
be attached to Philippine securities only after the holder has satisfactorily
explained his possession of the securities and the reasons a clearance
certificate was not attached prior to February 1, 1942.
The Treasury Department called attention to the notice of the
Philippine Government to all holders of Philippine securities and currency
which was issued today. This notice directed all holders of such securities
and currency in all countries except enemy countries to deposit their holdings
with banks and forward a registration report through their bank to the New
York office of the Philippine National Bank. The full text of such notice
is as follows:
(Here take in notice of Philippine Government)
288
CODE OF FEDERAL REGULATIONS
Title 31 - Money and Finance: Trensury
Chapter I - Monetary Offices, Department of the Treasury
Part 131 - General licenses under Executive Order No. 8389,
April 10, 1940, as amended, and regulations issued
pursuant thereto.
Section 131.83
TREASURY DEPARTMENT
Office of the Secretary
GENERAL LICENSE NO. 83
UNDER EXECUTIVE ORDER NO. 8389, APRIL
10, 1940, AS AMENDED, AND REGULATIONS
ISSUED PURSUANT THERETO, RELATING TO
TRANSACTIONS IN FOREIGN EXCHANGE, ETC.*
A general license is hereby granted authorizing the detachment
of coupons from securities of the type referred to in General Ruling
No. 10, the presentation of such coupons for collection, and the
performance of such other acts and effecting of such other transactions as may be necessarily incident to such collection, notwithstanding the fact that Treasury Department Form TFEL-2 may not have
been previously attached to the securities from which such coupons
are detached.
This general license shall not be deemed to authorize any
trensaction prohibited by reason of any provision (or ruling or
regulation thereunder) of the Order other than General Ruling No. 10.
This license shall expire at the close of business on
February 1, 1942.
Acting Secretary of the Treasury.
Part 131; Sec. 5(b), 40 Stat. 415 and 966; Sec. 2, 48 Stat. 1;
54 Stat. 179; Public No. 354, 77th Congress; Ex. Order 8389, April 10,
1940, as amended by Ex. Order 8785, June 14, 1941, Ex. Order 8832,
July 26, 1941, Ex. Order 8963, December 9, 1941, and Ex. Order 8998,
December 26, 1941; Regulations, April 10, 1940, as amended June 14,
1941, and July 26, 1941.
*
289
TREASURY DEPARTMENT
Office of the Secretary
GENERAL RULING NO. 10
UNDER EXECUTIVE ORDER NO. 8389, AS
AMENDED, AND REGULATIONS ISSUED PURSUANT THERETO, RELATING TO TRANSACTIONS IN FOREIGN EXCHANGE. ETC.
(1) The acquisition, disposition or transfer of, or other dealing
in, or with respect to, any of the following is hereby prohibited except
as authorized by license expressly referring to this general ruling:
(a) Any Philippine paper currency;
(b) Any security issued by, or the obligation of, either
the Government of the Commonwoalth of the Philippines,
including political subdivisions thereof, or any
corporation or other organization organized under
the laws of the Philippine Islands, unless Form TFEL-2
has been previously attached to such security by, or
under the direction of, the Treasury Department.
Form TFEL-2 will be attached to any security referred to herein if
presented to any Federal Reserve Bank on or before February 1, 1942,
accospanied by a description thereof on Form TFR-10. Subsequent to
February 1, 1942, Form TFEL-2 will be attached to such securities only
in the discretion of the Secretary of the Treasury and only upon the
filing of appropriate application with a Federal Reserve Bank tracin
the ownership of such security since January 1, 1942 and satisfactorily
explaining the reasons the security was not presented to a Federal
Reserve Bank on or before February 1, 1942, for the attachment of
Form TFEL-2. Such form will be attached to stamped securities of the
type referred to in section 2A(1) of the Order only pursuant to existing
procedure relating to stamped securities.
(2) Except as authorized by license expressly referring to this
general ruling:
(a) All Philippine paper currency held within the United
States is hereby required to be deposited on or before
February 1, 1942, in a blocked currency account with
either a domestic bank or with the New York office of
the Philippine National Bank.
(b) The bank of deposit shall hold such currency for the
account, or pursuant to the instructions, of the
depositor.
(c) On or before February 15, 1942, every bank holding
any blocked currency accounts shall file & report
on Form TFR-110 in triplicate with the appropriate
Federal Reserve Bank.
-2-
290
As used in this general ruling and in any other rulings, licenses, in-
structions, etc., the term "blocked currency account" shall mean an
account from which no payments, transfers, or withdrawals may be made,
and no other transaction or dealing may be effected with respect there to,
except pursuant to a license expressly referring to such account.
(3) Philippine paper currency which prior to January 1, 1942 was
of recognised special value to collectors of rare and unusual currency,
or which is held as part of any collection of rare and unusual currency,
is hereby excluded from the provisions of this general ruling.
By direction of the President.
Secretary of the Treasury.
291
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Y
1/13/42
POINDEXTER
GOVERNOR
HAWAII
You are authorized to liquidate, under laws applicable to Hawaii, by receivership
or conservatorship as you may deem expedient, the offices in the Territory of
Hawaii of: (a) the Pacific Bank, (b) the Sumitomo Bank of Hawaii, and (c) the
Yokohama Specie Bank, Ltd. In connection therewith you may, by license or
otherwise, authorise, among other things, payments to depositors, sales of
securities, delivery of collateral, payments of salaries and other expenses,
and all other acts appropriate to the orderly liquidation of these bank offices.
Amounts due to blocked nationals should generally be transferred to blocked
accounts in domestic banks. It is expected that complete records will be
established and maintained in connection with the liquidation.
It is assumed that you have the personnel necessary to accomplish the orderly
liquidation of these banks or that additional personnel can be acquired locally.
Should you require additional trained personnel from here, you should promptly
advise us of your needs.
/s/ E. H. Foley, Jr.
Acting Secretary of the Treasury
BB:JWP:mgb 1/13/42
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292
P
Y
BY SAFE HAND
BRITISH EMBASSY,
WASHINGTON, D.C.
W.T.1100AA/12/42
13th January, 1942.
Dear Mr. Dietrich,
Further to my letter of 10th January, I now enclose the copy of the text of the order freezing Philippine
assets in the United Kingdom as received from London
yesterday.
Yours sincerely,
(Signed) RJStopford
Mr. Frank Dietrich,
Room 279,
U.S. Treasury Department,
Washington, D. C.
RJS:QB:MLC
CC. Mr. J. W. Pehle
Dr. Frederick Livesey
Cory:bj:1-14-42
MEMORANDUM
293
Freezing of Philippine Assets
in the
United Kingdom
1. The Treasury by virtue of its powers under Regulation 2a of Defence
(Finance) Regulations 1939 (SR & D 1940 No. 1939) directs that, except with
permission granted by or on behalf of the Treasury, no banker shall carry out
any order given to him by or on behalf of a) the Philippine Commonwealth, the
Government thereof or the United States High Commissioner of the Philippines
or any person resident therein, or b) any body corporate which is incorporated
under the laws of Philippine Commonwealth, or is under the control of any
verson resident therein, insofar as the order 1) requires persons to whom
the order is given to make any payment or to part with any gold or securities,
or 2) requires any change to be made in persons to whose credit any sum is
to stand or to whose order any gold or securities are to be held.
2. The Treasury hereby grants permission and authority, so far as the
provisions of Trading with the Enemy Act 1939 may be concerned, to bankers:A) To honour their obligations under confirmed credits ovened
prior to January 9th, 1942 on account of the Philippine Commonwealth, the
Government thereof or United States High Commissioner of Philippines or any
person or body corporate referred to in paragraph 1 a) or b):
B) To accept bills or drafts and to pay cheques, bills or drafts
drawn by or for the Philippine Commonwealth, the Government thereof or the
United States High Commissioner of the Philippines or any person or body
corporate referred to in paragraph 1 a) or b). if presented by or on behalf
of any person or body corporate who, being in possession thereof, became a
holder for value before January 9, 1942.
3. Nothing in the foregoing authorizes any transaction prohibited by or
under any other provision of the Defence (Finance) Regulations, 1939.
NOTE. All unconfirmed credits opened on account of the Philippine
Commonwealth, the Government thereof or the United States High Commissioner
of the Philippines or any person or body corporate referred to in paragramh
1 a) or b) should be cancelled forthwith, but cheques bills or drefts drawn
under such credits and falling within terms of paragraph 2 b) may be honoured.
Attention of bankers is however drawn to the fact that all authorizations
issued by the United States High Commissioner of the Philippines have been
revoked.
Sums receivable for accounts of the residents of the Philippine
Commonwealth may be credited to such accounts.
13th January, 1942.
QB:MLC
Copy:bj:1-14-42
294
TREASURY DEPARTMENT
WA
INTER OFFICE COMMUNICATION
DATE January 13, 1942
Secretary Morgenthau
TO
FROM
D. H. Morris, Jr.
Subject: Comments on bond market obtained in New York
Monday, January 12, 1942
In connection with the New York reserve situation
attention is particularly called to the figures given in
Table I showing "Net" Excess Reserves. Because of the condition shown by these figures New York has no funds with
which to buy Government bonds and as a result has only a
nominal interest in the market. Consequently when inquiries
are made by anyone from outside New York, the response is
unenthusiastic and so the inquirer also loses interest in
the market. (For comparative purposes figures are given in
Table II for reporting Member Banks outside New York City )
If tap issues are put out it would probably kill
the open market. In other words, it is not believed that
the two types of issues can exist side by side.
Attention is called to the importance of embarking
on a firm policy of keeping interest rates at least as low
as present levels because if the war has to be financed on
a higher one, it will become an overwhelming burden. It is
also pointed out that if higher interest rates are allowed,
all the Savings Bonds will be turned in for redemption so as
to get the higher interest rates on other issues.
Copies to Messrs. D. W. Bell
Haas
Murphy
Lindow
Hadley
295
TABLE I
(millions of dollars)
New York City Weekly Reporting
Member Banks
rdinary Deposits
Demand
Time
Mar. 5
Oct. 1
1941
Nov. 5
1941
Jan. 7
1941
1942
11,007
10,672
10,162
10,165
751
760
769
746
3,947
3,976
3,664
3,428
587
563
580
588
16,292
15,971
15,175
14,927
14
129
336
842
16,306
16,100
15,511
15,769
3,203
1,692
768
936
14
129
336
842
3,189
1,563
432
94
6,168
7,002
6,967
6,983
10,843
12,237
12,195
12,225
Inter-Bank Deposits
Domestic
Foreign
total - Excl. U. S.
S. Deposits
total
Gross Excess Reserves
less U. S. Deposits
ET EXCESS RESERVES
S. Bonds Incl. Gtd.
loans and Investments
296
TABLE II
(millions of dollars)
Weekly Reporting Member Banks
Outside New York City
Mar. 5
Oct. 1
1941
1941
12,355
Nov.
5
1011
Jan. 7
4/14
1942
13,605
13,714
13,719
4,718
4,669
4,683
4,572
5,261
5,693
5,591
5,616
57
61
62
62
22,391
24,028
24,050
23,969
319
470
341
770
22,710
24,498
24,391
24,739
3,232
3,498
2,642
2,454
less U. S. Deposits
319
470
341
770
NET EXCESS RESERVES
2,913
3,028
2,301
1,684
7,064
7,299
7,639
8,162
15,825
16,888
17,328
17,907
Ordinary Deposits
Demand
Time
Inter-Bank Deposits
Domestic
Foreign
Total - Excl. U. S.
S. Deposits
Total
Gross Excess Reserves
- S. Bonds Incl. Gtd.
Loans and Investments
TREASURY DEPARTMENT
297
INTER OFFICE COMMUNICATION
DATE January 13, 1942
TO
Secretary Morgenthau
FROM Mr. Haas M
1. Attached to this memorandum are tables
showing (1) the number of agents cualified to issue
Defense Savings Bonds, Series E, at the close of
business on January 10, classified by type of agent,
and (2) the number of such agents on selected dates
since last May.
2. On Jenuary 10 there were 17,576 agents
other than post offices qualified to issue Series E
savings bonds, an increase of 428 since January 3.
3. On January 10 there were 12 corporations
qualified to issue Series E savings bonds on payroll
allotment plans in accordance with the instructions
contained in your tele ram of December 27 to the
Federal Reserve Banks.
the
Attachments
flaor
at
?
in it
right
degree
gifts.
Can
gone
Classification of the number of agents qualified to issue
Series E Savings Bonds, on January 10, 1942
Building:
: and
Banks: loan
:associa-
Credit
unions
tions :
Other
corporations
All
others
Total
2
Corporations and Associations
Federal Reserve District of
Boston
12
1,188
-
-
1,703
58
-
30
969
322
216
-
1
1,689
155
81
961
121
127
Chicago
2,264
404
90
St. Louis
1,283
1,276
125
39
52
37
1,703
161
108
-
816
99
139
-
544
217
183
-
13,832
2,144
1,529
12
-
-
-
13,832
2,144
1,529
830
194
152
1,171
233
299
820
61
1,150
1,014
Atlanta
New York
Philadelphia
Cleveland
Richmond
Minneapolis
Kansas City
Dallas
Sen Francisco
Sub-total
Post Offices
Grand Total
Office of the Secretary of the Treasury,
Division of Research and Statistics.
1 / In accordance with telegram of December 27, 1941.
Except post offices.
2
-
-
1
4
-
8
4
-
-
-
12
2
6
-
3
59
1,251
1,213
2,770
1,447
1,367
1,978
1,054
947
17,576
-
16,883
59
34.459
January 13, 1942
299
Number of agents qualified to issue Series E
Savings Bonds, May 7, 1941
to date
Other corporations 1
All others
:
Credit unions
: 30
30
: Jan.
Jan.
: 10
:
Building and loan associations
:
Banks
: 31
:7
:
agent
: Nov.
: Sept.
: July
: May
1942
:
Type of
1941
7,676
9,996
11,571
12,746
13,688
13,832
739
1,380
1,481
1,729
2,064
2,144
197
389
723
1,368
1,529
-
-
-
12
8
-
-
21
7
27
35
28
59
8,430
11,594
13,468
15,233
17,148
17,576
Post offices
15,812
16,231
16,429
16,614
16,883
16,883
Grand total
24,242
27,825
29,897
31,847
34,031
34,459
Total other than post offices
Office of the Secretary of the Treasury,
Division of Research and Statistics.
1
In accordance with telegram of December 27, 1941.
January 13, 1942
300
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
December 31 to date
(In thousands of pieces)
manufactured
today
Unfilled
orders
at close
of
business
Stock of
"B" type
bonds
deliveries
this
on
hand
IBM
day
:
:
today
:
received
:
:
:
:
:
:
:
:
:
:
: business
orders
Bonds
:
of
:
at opening
:
orders
New
:
Day
Unfilled
Dec.
919
31
Jan.
829
1
285
none - no mail
375
829
61
350
400
429
61
388
2
429
932
370
991
61
400
991
600
420
1,171
61
400
3
61
400
4
1,171
none - no mail none - closed 1,171
1,171
257
445
1,255
333
310
1,255
425
450
1,408
511
520
1,408
639
450
1,597
511
525
1,597
460
460
1,597
511
450
1,597
649
500
1,471
236
550
10
1,471
155
525
1,101
236
575
11
1,101
560
541
236
600
12
541
595
805
236
625
5
6
7
8
9
none - no mail
859
Office of the Secretary of the Treasury,
Division of Research and Statistics.
January 13, 1942
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Ten Business Days of January 1942 and December and November 1941
(November 1-13, December 1-11, Jenuary 1-12)
(Amounts in thousands of dollars)
: January
over
December
:
:
1942
1941
1941
$ 64,225
$ 19,812
$ 17,435
$ 44,413
$ 2,377
173,341
37,335
29,793
136,006
7,542
364.3
237,566
24,880
98,495
57,147
8,182
55,763
47,227
8,621
54,907
180,419
16,698
42,732
9,920
315.7
204.1
76.6
$560,940
$121,092
$110,755
$239,848
:
December
439
-
856
$ 10,337
:
:
:
:
Office of the Secretary of the Treasury, Division of Research and Statistics,
: December
:
over
November
:
:
Total
:
Series F - Banks
Series G - Banks
over
: December
:
Series E - Total
November
:
:
:
Series E - Banks
December
Percentage of Increase
or Decrease (-)
:
:
:
Series E - Post Offices
January
or Decrease (-)
January
:
Item
Amount of Increase
:
Sales
224.2%
over
November
13.6%
25.3
21.0
5.1
1.6
198.1%
9.3%
January 13, 1942.
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.
302
CONFIDENT
UNITED STATES SAVINGS BONDS
Daily Sales - January, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
All Bond Sales
Bank Bond Sales
Bond Sales
Series 3
Series E
Series F
Series G
Total
Series E
Series F
Series G
Total
$ 3,982
$ 10,229
$ 1,964
$ 7,605
$ 19,798
$ 14,211
$ 1,964
$ 7,605
$ 23,780
4,802
4,457
10,736
9,557
2,056
1,278
7,779
5,453
20,571
16,289
15,538
14,015
2,056
1,278
7.779
5,453
25,373
20,747
10
9,684
6,711
6,748
7,509
5,746
4,398
26,724
7,659
21,267
21,297
12,359
16,031
3,240
1,341
3,692
3,821
1,798
1,858
13,704
6,778
18,832
12,871
4,765
6,355
43,668
15.778
43,790
37,989
18,923
24,244
36,408
14,369
28,015
28,806
18,105
20,429
3,240
1,341
3,692
3,821
1,798
1,858
13,704
6,778
18,832
12,871
4,765
6,355
53,352
22,489
50,539
45,498
24,669
28,641
12
10,187
37,483
3,830
14,353
55,666
47,670
3,830
14,353
65,853
$ 64,225
$173,341
$ 24,880
$ 98,495
$296,715
$237,566
$ 24,880
$ 98,495
$360,940
January 1942
1
2
3
5
6
7
8
9
Total
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.
January 13, 1942
303
January 13, 1942
My dear Bob:
Thank you very such for your letter of
January 12th, which enclosed facts and
figures in connection with the contracts for
motor vehicles.
I was very glad to have this information
and appreciate your sending it and your
comments upon it.
Sincerely,
(Signed) Henry
Honorable Robert P. Patterson,
Under Secretary of Var,
Washington, D. C.
File n.m.C.
GEF:hmd
304
WAR DEPARTMENT
OFFICE OF THE UNDER SECRETARY
WASHINGTON, D.C.
January 12th, 1942.
Honorable Henry Morgenthau, Esq.,
Department of the Treasury,
Washington, D. C.
Dear Henry:
You may be interested in the attached figures on
contracts for motor vehicles awarded since December 1st, 1941.
The transactions where a letter of intent has been issued are
marked by an asterisk, but in these cases also, the contractors are going full speed ahead.
You will note that the total is 577,860 motor vehicles to be delivered to the Quartermaster Corps. Additional
contracts for some 11,733 motor vehicles are now under negotiation, and these when completed vi 11 raise the total to
589,593. These are all for procurement during the calendar
year 1942, and they will represent practically the entire present program for motor vehicles, both for our own Army and for
Lend-Lease.
I wish that I could give you, also, the dollar value
of these contracts, but the compiled figures do not include this
item.
The program is E vast one and will entail the utmost
exertion both in the line of deliveries and in the line of field
maintenance. These figures do not include the motor vehicles of
a combat character, such as tanks, mounts for guns on self-propelled
mounts, armored cars, scout cars and half-track carriers, which are
procured by the Ordnance Department.
Sincerely yours,
Robert P. Patterson,
Under Secretary of War.
rpp:lm
Encs.-
305
QM 451 16-P
January 9, 1942
MEMORANDUM FOR: The Honorable Robert P. Patterson
Under Secretary of War
SUBJECT:
Motor Vehicle Procurement
1. You may be interested in the attached figures on contracts awarded
for motor vehicles since December 1, 1941, in accordance with the verbal
directive and authority recently given us to expedite these awards. The
total is 577,860 vehicles.
2. There is also attached a list of contracts now under clearance or
negotiation for 11,733 vehicles which, when completed, will raise the total
to 589,593 vehicles. Those contracts which are committed only by letter of
intent have been designated by an asterisk. In every case, however, the
manufacturer is proceeding with all possible speed to get into production
on these contracts and is also accelerating his schedules on earlier contracts.
3. All of these vehicles are to be produced during the calendar year
1942, and this represents almost the entire present program for motor vehicles
for this year. When produced the program will completely equip the Army of
3,600,000 with sufficient added quantities in addition for maintenance reserves,
and also will fulfill all of our present obligations under Defense Aid that
must be delivered during 1942.
E. B. ORSGORY
Major General
The Quarternaster General
2 Encls.
1. List of Contracts
2. List of Contracts under
clearance and negotiation
Vehicles on Contract
Motor Transport Division
Production Control Branch
Since December 1, 1941
January 8, 1942
TYPE OF VEHICLE
CONTRACTOR
DA-V-398-qm-189
M-M-398-qm-187
DA-V-398-qm-190
D4-V-398-qm-191
DA- I-398-qm-188
DA-W-398-qm-182
DA- K-398-qm-181
D4-V-398-qm-203
DA-V-398-qm-210
DA-M-398-qm-221
D4-V-398-qm-204
D4-V-398-qm-205
K-398-qm-11244
K-398-qm-11401
K-398-qm-11399
M-398-qm-11410
W-398-qm-11420
K-398-qm-11419
K-398-qm-11426
K-398-qm-11201
K-398-qm-11532
K-398-qm-11533
K-398-qm-11508
Truck, & ton, 4x4
Willys-Overband
K-398-qm-11546
W-398-qm-11506
K-398-qm-11421
M-398-qm-11509
M-398-qm-11424
W-398-qm-11422
W-398-qm-11423
W-398-qm-11592
W-398-qm-11510
K-398-qm-11595
M-398-qm-11593
W-398-qm-11597
W-398-qm-11594
DA 3-898-qm-247
Truck, 1 ton, 4x2
Truck, 1g ton, 4x2
Truck, 1 ton, 4x2
Truck, 2g ton, 6x6 & 6x4
Track, 10 ton, 6x4
Truck, 5-6 (7) ton, 4x4
Truck, 21-5 ton,6x4,Cargo
Truck, à ton, 4x4
Motorcycles, Solo
Trucks, 24 ton, 6x6
Trucks, 2g ton, 6x6
Trucks, $ ton, 4x4
Trucks, 5 ton, 4x2
Trucks, $ ton, 4x2
Trucks, 4-5 ton, 4x4
Trucks, 3/4 ton, 4x4
Trailer, 1 ton
Trucks, 2 ton, 6x6, 15' Body
Ford
Fargo
Chevrolet
Studebaker
Mack Manufacturing Company
F.W.D.
Yellow Truck & Coach Mfg.Co.
Fargo
Harley-Davidson
Yellow Truck & Coach Mfg. Co.
Yellow Truck & Coach Mfg. Co.
Fargo
International Harvester
Fargo
Autocar
Fargo
Checker
Yellow Truck & Coach Mfg. Co.
NO. OF VEHICLES
16,608
4,500
2,500
2,000
12,810
500
700
4,700
2,718
400
4,858
4,208
39
250
773
1,750
5,100
425
60
International Harvester
200
Chevrolet
216
Semi-trailer, 6 T.Van & Stake Body Checker
Trucks, 1 T.4x4, Tel. Const.& Maint.
Chevrolet
& Earth Borer & Pole Setter
Chevrolet
Trucks, Panel Delivery
411
Trucks, a ton, 4x2, dump
Trucks, 1 ton, 4x2, Tractor
Tracks, Stake Bodies
Trucks, 6 ton, 6x6
Trucks, 4 ton, 6x6
Trucks, 2 ton, 4x4
Trucks, 3/4 ton, 4x4
Trucks, & ton, 4x4
Trucks, $ ton, 4x4
Trucks, 1à ton, 4x4
Trucks,2 ton, 6x6 & 2-5 T6x4
Trucks, 2) ton, 6x6 & 2-5 T.6x4
Trucks, 10 ton, Cargo
Trucks, 40 Ton, Tand Trans.
Motorcycles, 30/50
Ford
White
Diamond T
Ford
Fargo
Willys-Overland
Fargo
Chevrolet
Yellow Truck & Coach Mfg. Co.
Studebaker
Mack Manufacturing Company
Diamond T
Indian
306
217
100
1,803 .
5,156 .
63,146 .
64,918 .
43,601 .
8,120
35,415 .
137,481 .
17,100 .
700
.
CONTRACT NO.
2,400 .
13,105 .
Motor Transport Division
Production Control Branch
Vehacles on Contract
Since December 1, 1941
January 9, 1941
CONTRACT NO.
TYPE OF VEHICLE
CONTRACTOR
DA-V-398-qm-220
DA-V-398-qx-252
DA-V-398-qu-241
DA-K-398-qm-243
DA-V-398-qm-240
DA-V-398-qm-231
Trucks, 10 ton, 6x4
Trucks, 1 ton, 4x4, Cargo
Tracks, 1 ton, 4x2, Carryall
White Motor Company
Chevrolet
Chevrolet
Chevrolet
Chevrolet
1,500
6,650
International Harvester
3,000
DM-398-qm-233
DM-V-398-qm-169
DA-V-398-qm-165
DA-V-996-qm-170
MAY-398-qm-186
K-398-qm-11596
K-398-qm-11605
M-398-qm-11604
V-398-qm-11620
DA-V-398-qm-183
K-398-qm-11616
W-398-qm-11618
W-398-qm-11615
W-398-qm-11617
W-398-qm-11607
D4-V-398-qm-232
W-398-qm-11603
M-398-qm-11606
DA-V-398-qm-244
DA-V-398-qx-242
V-398-qm-11010
W-398-qm-11611
V-398-qm-11642
Trucks, 1 ton,4x4,3 Panel Delivery
Trucks, 1 ton,4x2, Gargo
NO. OF VEHICLES
100
75
200
Trucks, 2-5 Ton, 6x4, Gargo
Trucks,10 Ton,G.S.Load Garrier
Tracks, 20 Ton, Tank Transp.
Trucks, 40 Ton, Tank Transp.
Mack Manufacturing Company
Federal
Diamond T
500
Semi-Frailer,20 T.Tank Transp.
Trailer,40 Ton,Tank Transp.
Trailer Company of America
750
Rogers
Trucks, 4-5 Ton,4x4
Federal
frailer, 3/4-1 Ton
Tracks, 5-6(7)Ton,Finber Hauler
Trucks, 6 Ton,6x6,Ponton
Tracks,20 Ton,Fractor
Tracks,20 Ton,Tractor
250
Ben Fur
Checker
F.W.D.
15,142
35
Mack
Rec
Trailer Company of America
Ford
Chevrolet
1,060 .
800 .
1,600 .
2,400 .
6,000 *
6,744
6,884 .
Ford
Trucks, 6 Ton, 6x6
Corbitt
Trucks,4 T.6x6,Wrecker w/spare
Diamond T
parts & Gargo w/spare parts
Pass.Cars, light sedan
Trucks, 1 Ton, 4x2, K-18
Trailers, K-19
Chevrolet
Yellow Truck & Coach Mfg. Co.
600
117
A.J.Miller
50
109
109
six contracts
Passenger, Dars
Ford
Semi-trailer,7 T.Chassis & 7) T.
six various companies
DA-V-398-qm-245 & 246
frailer,40 Ton, Tank Transp.
Trailer,40 Ton, Tank Transp.
750
2,050
Cargo
RA-W-398-qm-246
W-398-qm-11621
W-398-qm-11623
V-398-qm-11750
W-398-qm-11750
1g Ton, 4x2
Ton, 4x2
Ton, 4x2, Dump
5 Ton, 4x2, Dump
R.E.
Winter Weiss
Ford
Ford
.
5,000 .
Federal
Trailer, 20 Ton
Trucks, 1 Ton, 4x4
Trucks, 1 Ton, 4x2, (CKD)
Cars, 5-Pass., Light
750
1,948 .
21,600 .
Mash-Kelvinator
frailer, 3/4-1 Ton & 250 Gal.
Trailer, 3/4-1 Ton
500
International Harvester
International Harvester
150
100
10,500 .
3,500 .
2,000* .
100 .
.
Vehicles under Contract
Motor Transport Division
Production Control Branch
Since December 1, 1941
January 9, 1941
CONTRACT NO.
K-398-qm-11624
V-398-qm-11757
V-398-qm-11749
TYPE OF VEHICLE
CONTRACTOR
5-6 Ton, 4x4, Tractor
Autocar
6 Ton, 6x6, Ponton Crane
Brockway
Motorcycles, Solo, 30/50
Indian
NO. OF VEHICLES
958 .
655 .
13,330 .
577,860
Letter of intent indicated by asterisk
Motor Transport Division
Vehicles under Negotiation and
Production Control Branch
January 9, 1941
Clearance Since December 1, 1941
CONTRACT
REQUISITION
TYPE OF VEHICLE
CONTRACTOR
L of I
4392
1) Ton, 4x2, Cargo
1g Ton, 4x4, Radio
Ford
C-300
0-437
C-251
C-251
C-251
C-251
C-251
L of I
L of I
L of I
L of I
L of I
160
20
Trailer, 3/4-1 Ton, Cargo
Trucks,2 2g T., 6x6, Cargo w/w
Trucks, 2g T.6x6, Cargo w/w
Trucks,4 Ton, 6x6, Wrecker w/w
NO. OF VEHICLES
75
TS & CMC
400
IT & CMC
70
81
Trailers, 3/4-1 Ton, Cargo
Trucks,2 Ton, 6x6, Chassis
1g Ton, 4x2
IT & CMC
Fargo
Trailer,40 Ton,Tank Transp.
Trailer,40 Ton,Tank Transp.
Rogers Bros.
Winter Weiss
Trailer,40 Ton, Tank Transp.
Semi-Trailer, Comb. Animal & Cargo
Freuhanf
Highway
854
Trucks, 7g Ton, 6x6, Prime Moves w/w
Mack
403
135
35
7,500
500
300
1,200
11,733
310
FOR THE PRESS
INDEDIATE RELEASE
JANUARY 13, 1942
STATEMENT BY THE PRESIDENT
By Executive Order I will establish the War Production
Board, which will be granted the powers now exercised by the
Supply, Priorities and Allocations Board.
I will appoint Donald Nelson as Chairman of the War
Production Board. In addition to being Chairman of the Board,
he will be energed with the direction of the production program, and have general supervision over all Production Agencies.
His decision as to questions of procurement and production will
be final
Mr. Nelson will report to the President as to the
progress of the program. He will no longer serve as Director
of the Priorities Division but will devote his entire time to
directing the production program.
Vice President Nallace, as Chairman of the Economic
Defense Board, will serve as a member of the War Production
Board, as will the other members of S.P.A.B.
TREASURY DEPARTMENT
311
INTER-OFFICE COMMUNICATION
DATE January 13. 1942
Secretary Morgenthau
TO
Mr. Dietrich
FROM
Sources of Silver Purchased under the Silver Purchase Act
(In thousands of dollars. at 35 cents per ounce .999 fine)
ew production Silver
Argentina
Bolivia
Craada
Honduras
Meth. East Indies
Peru
Not Designated
Total New Prod.
Nov.
$ 282
$
--
2,506
1,053
--
$ 70
$10,441
--
35
$105
--
Other Silver
Canada
Chinn
Total
Total
1941
1940
282
332
--
---
253
2,443
3,904
Dec.
$
1941
Jan.-Oct.
35
2,576
1,053
5,298
1,249
253
111
2,478
3,904
4,699
14,000
$10,546
$25,724
--
--
232
$
$ 282
$
282
1,800
54
Japan
918
918
Mexico
175
175
691
691
4,698
8,972
$ 2,066
$ 2,066
$15,756
$12,612
$41,480
Not Designated
Total Other
Grand Total
$12,507
$105
After deduction of $586 from 'Peru and $068 from 'Not Designated'
representing new production silver purchase contracts cancelled in
June ($149) and November ($1,105).
.
C
0
312
P
FEDERAL RESERVE BANK
Y
OF NEW YORK
OFFICE CORRESPONDENCE
Date January 13. 1942.
TO Mr. Knoke
SUBJECT:
FROM P. Lang
Mr. Spaulding of Handy & Harmen informed me today over the
telephone that he had received an inquiry from Mr. Studer of the
Pan American Trust Company indicating that the latter wished to
buy about 1,000,000 ounces of silver for export. According to
Mr. Spaulding, Mr. Studer would not reveal the name of the
country to which the export was to be made, whereupon Mr. Spaulding
told him that he had no silver to sell. Subsequently, it appears
that Mr. Studer approached one of the refiners, probably American
Smelting and Refining Company. and made the following proposition:
Pan American Trust Company would deliver 1,000,000
ounces of silver in New York to the refiner against
delivery by the refiner of 1,000,000 ounces of
silver in Mexico.
As for as Mr. Spaulding knows, the proposition made by the Pan
American Trust Company was not acceptable to the refiner.
It occurred to me that there might be some connection between Pan American Trust Company's desire to buy silver end the
recent reports in the market that Portual vented to buy silver
for coinage purposes. In this connection, the following excerpt
from the Foreign Commerce Weekly of January 10. 1942 may be of
interest:
"Portugnl-Increase in Silver Coinage Authorized An increase in the silver coinage of Portugal
from 157,000,000 escuios to 197,000,000 escudos
313
-2-
(approximately $7,880,000) was authorized by
decree-law No. 31,600 published in the Diario do
Governo of November 22, 1941. No period of time
has been announced for completion of this program."
According to the 1936 Handbook of Foreign Currencies, the Portugese
Government "found that the silver coins in circulation, especially
those of 10 escudos, were insufficient for the country's needs.
A decree-law (No. 23593 of February 23. 1934) was therefore promul-
gated which increased the authorized total of silver coins from
100,000,000 to 120,000,000 escudos, divided as follows:
6,500,000
8,500,000
5,000,000
10-escudo coins
5-escudo coins
2-1/2-escudo coins"
Apparently since 1934 the total has been increased from
120,000,000 to 157,000,000 escudos and now a further increase to
197,000,000 escudos has been authorized. This increase of 40,000,000
escudos in silver coinage would require approximately 1,340,000
ounces of silver, taking as a basis the 10-escudo coin which has a
gross weight of 12.5 grams and a fineness of .835. The smaller
coins have a fineness of only .650.
However, upon checking with Mr. Funck, I learned from him
that he had an order from the Portugese Government to ship 39 tons
of silver which is equivalent to approximately 1,140,000 ounces
.999 fine. A British navicert had been approved about three days
ago which was good until the end of March. Applications had been
filed with our Foreign Property Control Department for licenses to
export about 300,000 and 840,000 ounces respectively. At the moment,
314
-3-
Mr. Funck said that he had only about 150,000 ounces of silver
available for shipment and was endeavoring to purchase the remainder.
It seems that the entire transaction had been cleared with various
people in Washington, including Mr. White at the Treasury.
I met Mr. Studer personally some years ago when the Pan
American Trust Company was appointed an agent to buy silver on our
behalf and if you think it advisable I shall be glad to telephone
him and endeavor to get some information from him as to the silver
order he apparently has on hand.
PL:DB
Copy:1c:1/16/42
0
0
315
P
Y
FEDERAL RESERVE BANK
OF NEW YORK
OFFICE CORRESPONDENCE
To Mr. Knoke
Date January 15. 1942.
Subject:
From P. Lang
With reference to my memorandum of January 13. 1942, I
called Mr. Studer at the Pan American Trust Company regarding the
reports we had received that he was endeavoring to purchase silver
in this market. Mr. Studer said that they had received a telegram
from one of their correspondents in Mexico reading somewhat as follows:
We propose export silver bars to South America.
Entire Mexican production tied up in New York.
Can you arrange to purchase 1,000,000 to
1,500,000 ounces?
According to Mr. Studer, he spoke to Handy & Harman and
also to the principal refiners of Mexican silver (American Smelting,
American Metal and United States Smelting) and tried to find out
whether a swap could be arranged for delivery of silver in Mexico
against silver in New York. The refiners apparently were willing
to make the swap but only at a cost to him of about 1/2 a cent
per ounce which would mean that the cost of the silver to the
Mexican correspondent would be about 36$ per ounce. Mr. Studer
felt that this price was too high and that silver could be bought
in this market and shipped to Mexico for less than 36$ per ounce.
He did not mention the name of his Mexican correspondent but did
say that it was not Credito Minero. He had not been told to what
country in South America the silver would be exported but guessed
316
-2-
that it might be either Brazil or Argentina.
He concluded by saying that probably nothing would come of
the inquiry although Mi. . Glenn might follow up the matter since ine
was down in Mexico at the present time.
PL:DB
Copy:1c:1/16/42
TREASURY DEPARTMENT
Office of the Secretary
Secret Service Division
317
MEMORANDUM
January 13, 1942
In.
The Secretary of the Treasury
From:
Chief, Secret Service
Attached is article by Osgood
Nichols which appeared in Washington
Post Magazine, Sunday, September 9.
1934.
1gal
AM
318
Extract from WASHINGTON POST MAGAZINE, Sunday, September 9. 1934, Pages 1, 2.
Flinging Challenge to the Oldsters,
A LONE GIRL SEEKS TO LEAD
Nation's Youth to Victory
(Photograph of Viola Ilms)
By Osgood Nichols
"The youth of America are about as effective as a rubber toepick".
So Viola Ilma, young, dymanic hopeful of the American Youth Movement, summed un
the situation recently for the delegates assembl ed in New York University for
the First American Youth Congress.
Boos, catcalls from hecklers greeted the first attempt to get representatives
of the youth of America together under one roof for a threeOday conference. Two
hours after the opening of the first session the delegates were hopelessly divided and the First American Youth Congress split into two groups and petered
off into nothing.
The rise of Fascist governments of recent years in Eymope, largely through the
energy of organized youth, has occasioned much speculation in this country as
to the possibilities of an American Youth Movement.
The Slav is Colorful Figure
But the only hope for such a movement at the moment lies in the whirlwind per@
sonality of "the Slav" as her intimate friends call Miss Ilma. Her activities
along that line have raised her, at 23, head and shoulders above the young women
on the American scene.
She is one of the most colorful personalities tossed up by the depression. The
reason for the publicity which she has received can be found not in what she
has done, but in the Slay herself. She is completely unique and newspaper men
seize upon her because she always makes good copy.
She is not averse to that publicity and even goes out of her way to call up the
city editor when she arrives in town. But she does that for the cause which
she is supporting, not for any personal glory. She is well aware of the fact
that without it she could not hope to have any effect on the incohesive, apathe@
tic youth of the country.
Her personality has brought her devoted friends and violent enemies. No one can
meet her and carry away a lukewarm impression. She is too positive, too electric.
Some whom she stire up to a high pitch of enthusiasm go away and think it all over,
sometimes wondering why they were so convinced.
318
Extract from WASHINGTON POST MAGAZINE, Sunday, September 9, 1934, Pages 1, 2.
Flinging Challenge to the Oldsters,
A LONE GIRL SEEKS TO LEAD
Nation's Youth to Victory
(Photograph of Viola Ilma)
By Osgood Nichols
"The youth of America are about as effective as a rubber toepick".
So Viola Ilma, young, dymanic hopeful of the American Youth Movement, summed un
the situation recently for the delegates assembl ed in New York University for
the First American Youth Congress.
Boos, catcalls from hecklers greeted the first attempt to get representatives
of the youth of America together under one roof for a threeOday conference. Two
hours after the opening of the first session the delegates were hopelessly divided and the First American Youth Congress split into two groups and petered
off into nothing.
The rise of Fascist governments of recent years in Europe, largely through the
energy of organized youth, has occasioned much speculation in this country as
to the possibilities of an American Youth Movement.
The Slav is Colorful Figure
But the only hope for such a movement at the moment lies in the whirlwind per@
sonality of "the Slav" as her intimate friends call Miss Ilma. Her activities
along that line have raised her, at 23, head and shoulders above the young women
on the American scene.
She is one of the most colorful personalities tossed up by the depression. The
reason for the publicity which she has received can be found not in what she
has done, but in the Slav herself. She is completely unique and newspaper men
seize upon her because she always makes good copy.
She is not averse to that publicity and even goes out of her way to call up the
city editor when she arrives in town. But she does that for the cause which
she is supporting, not for any personal glory. She is well aware of the fact
that without it she could not hope to have any effect on the incohesive, apathe@
tic youth of the country.
Her personality has brought her devoted friends and violent enemies. No one can
meet her and carry away a lukewarm impression. She is too positive, too electric.
Some whom she stire up to a high pitch of enthusiasm go away and think it all over,
sometimes wondering why they were so convinced.
-2-
319
It is not her personal beauty which takes them in, for though she is attractive
that is not her forte. She looks like a Slav, hence the nickname. One is conscious of high cheek bones, an underslung lip and extraordinary flashing eyes.
There are practically no eyelashes so that the pupils stand out as if alone.
They command attention under a shock of reduish bobbed hair which she wears
pompadour fashion.
It is her dynamic energy and enthusiasm which are so impelling. She has so
much energy that she has to throw some of it off in gestures, wild, mannish
gestures to emphasize her point. There is a great deal of boyishness in her
make-up. She is fond of wearing a shirt and tie, and standing hands on the hips.
Once, just back from a trip to Africa, she walked in on Ellery Sedgwick, the
dignified, Groton trained editor of the Atlantic Monthly. In usual, informal
fashion, she perched herself on the corner of his desk, feet and arms flying.
After he had regained his composure, Sedgwick turned to her and said, *Miss
Ilma, I feel obliged to tell you that you are no longer in Africa. This is
Boston."
But that personality has accomplished for her things impossible to any other
person. In almost no time she raised money for the Youth Congress, interesting
such people as Mrs. Roosevelt, Miss Anne Morgan, Mrs. August Belmont, Christopher Morley and Arthur Garfield Hayes.
She has been to Washington several times and counts many high Government off10
cials interested in her aims. Bweildered by the baffling problem of millions
of unemployed youths, they listen eagerly to her constructive suggestions.
From her father she gets the exotic elements of her character. Her mother is
Quaker. According to Mis S Ilma, her paterhal grandfather went to Abysinnia
a at one time and married the daughter of the Prime Minister. She is fond of callo
ing her father Prince All Youssuf and herself the Princess, though her acco-
ciates finally put a stop to that.
Miss Ilma lives in New York with her family in a second floor in the West
Eighties. Her father, an amateur wrestler and a singer, is an enormous man
with a huge chest, a deep voice, and great affability. From him she gets her
boundless energy.
Decided Upon Her Career.
As a girl, she went to Julia Richmond High School in New York. There she was
everything in her class--president, head of the student council, &c. She down did
so well that she was offered a scholarship for college, which she turned
because she didn't want to repeat her high school career and was eager to get
out into life.
320
-
3
While she was still in school, she wrote a story for Liberty magazine entitled
"The Aim of the Modern Girl", which gave her her original interest in the problems of youth. In it she had a questionnaire which was filled out by several
thousand girls. The discovery that 90 per cent of them wanted, more than anything else, a happy married life came as a real shock in those bath-tub gin
days of 1928.
Her inexhaustible energy carried her from one thing to another. She appeared
in a play by Floyd Dell, and worked as an artist for a large advertising cone
corn. But none of these things satisfied her. She broke off and went abroad.
When she saw what was being done for youth and by youth in Europe, she made up
her mind what she was going to do.
She came back to this country to find, in the fall of 1932, that the depress
sion was deepening. More and more young people were being turned out of our
educational institutions, taught to live in a world which didn't exist. They
found that they were not wanted. Everywhere they turned a blank wall greeted
them. They were a helpless, pitiable, disillusioned, incoherent mass.
Inspired by what she had seen in Europe, Miss Ilma determined to make that mass
vocal, expressive. Immediately she thought of a magazine. Magazines were
failing right and left, but she had the courage to state a new one. Out she
went by bus to Chicago and on to a small town in Illinois, where she heard that
there was a publisher who might listen to her ideas.
The town was Mount Morris, Ill., the publisher Kable Bros., publishers of Outdoor Life, the Elks Magazine, and others. McGuire, editor of Outdoor Life, told
her that she wouldn't get very far with the Kables. They were hard-boiled
business men and there were depression days. Confidently, she strode into see
them. A few hours later she was flying back to New York with a contract and
some advance money in her pocket. Modern Youth, the name of her short-lived
magazine, was off.
Voice of the Younger Generation.
In February last year a modernistic face was seen on the newsstands. It was
subtitled, *The Voice of the Younger Generation". In it Miss Ilma announced
that no authors were to exceed 30.
"We propose", she said in a front page editorial entitled, "We Take the Baton",
"to take the debris that our fathers have left us and fashion from the more
substantial fragments of their fallen towers a new and more enduring happiness
.Tomorrow's pundits will be found in this magazine today---and their comments today have a spontaneous verve which will be lacking when they have repu-
tations and rheumatism." That is clear, bold talk.
Miss Ilma sat in the office of the magazine and read thousands of manuscripts
and letters which poured into her from youth all over the country. Others
321
4
-
came in to see her and from them all she got a vivid picture of the trials and
tribulations of a thwarted generation. Little did it matter that she was finally forced to close the doors of her brain child and declare bankruptcy for
several thousand dollars.
She had received her education and saw her goal. It was nebulous, and yet
again definite. She wanted to do something for that youth and once she had
made up her mind, that was that. As she expressed it in her magazine, *There is
nothing that vigor, courage and confidence can not attain, and to a greater extent than any previous generation we have thrown ourselves into the torrent of
life.'
Last July she spoke at the International Congress of Women in Chicago, where she
told them that they should stop petting Pekingese dogs and do something. They
liked it, 80 much so that they sent her to Geneva to attend a conference there.
Calls On Roosevelt To Aid Youth.
She came back from Europe last December to announce to the press that "The
Youth of America are at loose ends and have no ideals, no ambitions, no oppor-
tunities, and what is more, they don't care, which is the worst of it. It is
time for the yough to back Roosevelt and time for the President to back them.
Hitler, whatever else may be said about him, has given them self@respect, courage, and a new vitality."
Returning here, Miss Ilma started crusading with increased vigor. There seems
to be no end to her energy. "Here is potential material," she proclaimed in a
feature article in the New York Times this spring, "keen, intelligent, reliable
material, needing only organization to throw itself wholeOheartedly into the
reconstruction of a nation."
By the end of March she had founded the Central Bureau of Young America to be
"clearing house for all youth groups, organized and unorganized, a foundation
a
on which to build a youth movement which will represent in general the largest
common denominator of American Youth." In July it was sponsoring a course of
lectures at New York University Summer School on the various problems of youth.
Turns Down Rich Offers.
Her activities had brought her great publicity. She was offered the job of
organizing the Young Republicans in New York State. A prominent Detroit auto
mobile manufacturer offered her a fantastic sum if she would start a young Fascist movement. She turned them both down for she wanted to remain unattached
and money had no lure for her.
-5-
322
In almost no time she had written and had published "And Now Youth", which was
put out by Ballou as one of his Black Top books with a striking picture of Miss
Ilma on the cover. The forceful way in which she portrayed the plight of the
younger generation caused quite a stir. The book is now in its second edition.
In it Miss Ilma offers no program. She really had no definite program. She
believes that when youth gets together it will work out its own expression and
its own destiny. Incoherence will become tangible action and the movement
will sweep the country. But first they must be brought together.
Miss Anne Morgan, sister of J. P., and president of the American Woman's Association and me of the many prominent people Miss Ilma, by her dynamic personality, has been able to enthuse, dared her to try and get a youth congress together and try and keep them together. It was a challenge backed up by
financial support.
Motley Mixture Attends Congress.
Miss Ilma, who thrives on obstacles, started out and ina few weeks had raised
$4,000 and the hospitality of New York University. Invitations went out to
500 varefully selected representatives of youth organizations and unaffiliated
persons. On August 15, 200 or so delegates from all over the country convened.
It was a motley mixture all the way from Junior Leaguers to the Young Communist
League of U. S. A. "From the cross section thus secured, a brochure confi-
dently stated, "a common denominator may be extracted which may be expressed
succinctly as youth's basic needs. To this must be added the method or methods
proposed, acceptable to all, wherein and whereby such needs can be fulfilled."
The result was what might be expected. No mathematician could be found to supply the common denominator. After a few good speeches on the opening morning
by Mayor LaGuardia and A. A. Berle, the meeting was thrown open to the floor
and confusion. The radicals had decided, in their usual fashion, to break up
the meeting, and they were old hands at the game.
Miss Ilma had made one fatal mistake. In order to keep the congress from being the usual incoherent flop because of lack of organization, she had gone to
the other extreme and overorganized. The delegates arrived to find that the
Central Bureau of Young America had decided everything in advance. Rigid
rules had been made and Miss Ilma was already chairman.
The radicals seized on this and started howling for "democracy". Pandemonium
broke loose with shrieks and howls and people popping up all over the floor.
One young girl got up and literally shivered with hatred. The congress split
into two irreconcilable groups, each claiming that they were the official one.
Three days later the Ilma group met and drew up a few resolutions about birth
control and war, formed a permanent governing committee, decided to hold a
second congress the next year, and dispersed.
323
-
6
-
Carrying on the Good Work.
Undaunted, Miss Ilma is carrying on the good work. In spite of the fact that
the congress could be termed a flop, she believes that it is only the beginning, and the growing pains of anything are rather discouraging. But the
woman has infinite pluck and can't be downed by a few setbacks.
It seems highly improbable that the various youth movements which have sprung
up in this country as a result of the depression will ever amount to much on
a national scale. The young men and women are too individualistic and apathea
tic. As soon as they get a job, they forget about the troubles of their fellows.
Miss Ilme Is Logical Leader.
Perhaps, if they continue long enough intheir present state of joblessness and
despair, they will forget themselves, and, like the youth of Germany, band together and follow the leader who promises them the most. Youth can not be
denied too long.
Viola Ilma is the logical person to lead them. But her views are too moderate
to hold them for long. Some demagogue would soon appear on the scene and
history might cross the Atlantic and repeat itself.
NOTE: Captions under the three pictures of Miss Ihma contained in the two
pages of this article are as follows:
1 (First Page)
center
2 (Second Page)
top 1
right
3 (Second Page)
bottom left
"Viola Ilma, 23-year-old whirlwind authoress,
magazine launcher, hopeful youth leader extraordinary."
"Expressive indeed are Vila Ilma's hands when
she is speaking. . .here she is as she addressed
the first American Youth Congress, held at New
York University recently."
"Miss Ilma in a characteristic post at the Youth
Congress, her brain child. All her efforts to
hold the congress together were unsuccessful and
the first real effort to start a National youth
movement received a temporary setback,"
324
DEPARTMENT OF STATE
WASHINGTON
In realy refer to
FF $40.51 Frozen Credits/5008
January 13, 1942.
The Secretary of State presents his compliments to the
Honorable the Secretary of the Treasury, and transmits two
copies of a telegram dated January 10, 5 p.m., from the American
Embassy, Buenos Aires, concerning an Executive decree number 110790
issued January 8, 1942, which places under control of the national
Ministry of Finance, all transfers of funds abroad and internal
movements of funds by enemy alien firms and nationals.
Enclosure:
Two copies of telegram dated
January 10, 1942.
eh:copy
1-15-12
C
0
P
325
Y
PLAIN
Buenos Aires
LM
Dated January 10, 1942
Rec'd 5:52 p.m.
Secretary of State,
Washington.
January 10, 5 p.m.
Embassy's 58, January 9, 10 p.m.
Executive decree number 110790 dated January 8 which has just been
issued, after referring in the preamble to the need to protect Argentine
interests from complications connected with enterprises here managed or
controlled by foreigners or controlled from abroad and the need to permit
such enterprises to function properly and after citing the need to increase
the control already provided by various decrees states:
"Article one. During the present emergency, there are subjected to the
control of the national Ministry of Finance transfers of funds abroad and
internal movements of funds which may have a direct or indirect relation to
such transfers by firms or enterprises managed or controlled by persons who
have the nationality of a country at war or are domiciled in it. The American
Republica are excepted from this provision.
Article two. The Ministry of Finance will exercise the control referred
to in the preceding article through the intermediary of the Central Bank of
the Argentine nation, which will conform to the regulations issued by the said
department."
A long press release of the Ministry of Finance states that enterprises
which faithfully comply with the existing laws and regulations regarding
-326
transfers of funds abroad and whose transactions are entirely legitimate
will not be effected or burdened by the new control, but that in other cases,
extreme measures will be taken and that therefore this should be P warning.
It states that offenders will be dealt with according to provisions of c
new decree of the Ministry of the Interior.
Texts are being sent by airmail.
ARMOUR
CSB
eh:copy
1-15-42
PARACHRASE or Telechol SHIT
TO:
American Embassy, Madrid, Spale
To:
.:
January 13, 1942, 7 p.m.
35
Reference is made to telegrams nos. 1110 of the 26th
of December, 1114 of the 29th or December, and 1074 of
the 18th of December, 1941.
The general question or one control 01 currency of the
United States held outside of the country WED discussed
by the British Government and the Department of State.
The De artment (3) oots best the TOURD will be Further
discussed with the Department of Treasury. It sauns to
the Department inadvisable to enter into a specific
arrangement 60 HEB book suggested In your telegram referred
to above with the Spanish .xchange Institute, pending
the working out of some general plan of dealing with the
situation.
The suggestion 10 made that as for 1.0 you are concerned
the matter be allowed to continue in propende especially
since the sale of doll OUTPORT in John any be discouraged
by the lowerin, of its rate and since the alligment of large
amounts of currency seem to be effectively prevented by
ritish opposition.
USE
(D..)
328
INCOMING CABLE
From: Batavia
Date: January 13. 1941
Federal Reserve Bank of New York
12
You will receive for our account $1,400,000 by order of
Wederlandeche Indische Handelsbank Batavia from Guaranty Trust
Company of New York New York.
Sell for our account for immediate delivery about $20,000,000
gold bare earmarked in our name. Our intention is to use proceeds
for payment to be made at request of government here. Proceeds
to be credited to our account Guaranty Trust Company of New York
New York City. Cable when executed.
agd. De Javasche Bank
Rec'd by phone from FRB NY - 1/13/42 - kma
TREASURY DEPARTMENT
329
INTER-OFFICE COMMUNICATION
DATE January 13. 1942
Secretary Morgenthau
TO
FROM
CONFIDENTIAL
Mr. Dietrich
Registered sterling transactions of the reporting banics were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£48,000
210,000
Open market sterling held steady at 4.03-3/4. The only reported transaction consisted of 21,000 sold to a commercial concern.
In New York, closing quotations for the foreign currencies listed below
vore as follows:
Canadian dollar
Argentine peso (free)
Brazilian milreis (free)
Colombian peso
Mexican peso
11-5/8% discount
.2355
.0516
Uruguayan peso (free)
Venezuelan bolivar
.5775
.2065
.5250
.2675
Cuben peso
Par
The Bank of Jave caoled instructions to the Federal Reserve Bank of New
York today to sell about $20,000,000 of their earmarked Cold. Accordingly, the
following amounts of gold were released from the Jave Bank's earmarked account:
$18,100,000 at the Federal Reserve Bank of New York (sold to the stabilization
Fund).
1,883,000 at the Federal Reserve Bank of San Francisco (sold to the San
Francisco Mint).
$19,983,000 Total
Phis sale merce a reversal in the Java Bank's position 80 a neevy buyer of gold
from the stabilization Fund during the past year.
The Federal Reserve Bank of New York reported that the Central Reserve Bank
01 Peru will ship $1,300,000 in gold from peru to the Federal for its own account.
disposition unknown.
In London, spot and forward silver were again fixed at 23-1/2d end 23-9/100
respectively, equivalent to 42.67F and 42.78c.
330
-2The Treasury's purchase price for foreign silver was unchanged at 35.
Handy and Harman's settlement price for foreign silver Was also unchanged at
35-1/8$.
We made no purchases of silver today.
D
CONFIDENTIAL
331
BRITISH EMBASSY
WASHINGTON, D.C.
PERSONAL & SECRET
January 13, 1942.
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
15
332
MOST SECRET
(U.S. SECRET).
OPTEL 10.22.
Information received up to 7 A.K. 11th January 1942.
1. NAVAL.
10th. One of H.H. Cana ian destroyers essorting a homeward
Convoy war severely damaged by we: her south of Green land. Reconnaissa
of Brest showed that the PRINZ EUGE had moved from ula dry dock. A
2,600 ton Merchant Vessel bound for Colombo was sunk by gun fire from
a Submarine 60 miles south of Java on the 4th.
2. MILITARY.
Libva. By the afternoon of the 9th, our patrols had reached
point some twenty miles south-west of Agheila. The enemy were still
holding positions between Agheila and Jedabya which were being engaged is
our mobile columns.
Malaya. 9th. Our forces north of Kuala Lumpur were heavily
engaged and suffered severe casualties.
Netherlands East Indies. General Wavell arrived with f.
nucleus staff at Batavia on the 10th.
in
Russia. The Russian claims to have made further progress
the area West of Kaluga are probably correct. The Germans are counterattacking South of Kursk.
3.
AIR OPERATIONS
Western Front.
Brest. 85 tons. Results were mainly unobserved owing to cloud
and a smoke screen. 10th/11th. 124 aircraft were sent to !ilhelmshaven
and 30 to Enden. A few others were sea-mining, operating against shipping
and patrolling over enemy aerodromes. Six aircraft are missing, and two
crashed. At dusk 10th, R.C.A.F. Hudsons, operating off the Dutch coast,
hit amidships a 7,000 ton merchant vessel in convoy and a 2,000 ton tanker
which was left in flames. Enemy activity was on a somewhat larger scale
than of late and was chiefly over the Liverpool area. Of 24 aircraft
plotted overland, one was shot down by a Beaufighter of R.A.A.F.
Mediterranean,
Libya. 8th/9th and 9th. Successful bombing attacks were made
on H.T. near Agheila and several direct hits and near misses were
obtained on 75 H.T. moving westwards near l'arsa Brega. Halfaya defences
were also bombed. Enemy aircraft attacked Tobruk and Ganbut by night
without causing damage.
Halta. 9th/10th. 18 enemy aircraft dropped bombs on the Islan
For net
Burra. 9th. Seven fighters of the American Volunteer Group
and six Buffaloos attacked two enemy aerodromes in Siam. Three
Japanese aircraft were destroyed on the ground and four others damaged.
10th. Two more enomy aircraft we e destroyed at Heacd Aerodrone.
Halaya. 9th. Tie demolished Kuala Lumpur aerodrome. Our
bombers attacked the railway, warehouses and shipping at Singora and
successfully bombed the aerodromes at Ipol and Sungei Patani. Large
fires were started at all those objectives. Two of our aircraft are
missing. On the 10th our fighters destroyed an enemy bomber. Enemy
aircraft attacked the mail train to Singapore on the 10th and caused a
few casualties.
333
BRITISH EMBASSY
WASHINGTON D.C.
PERSONAL AND
January 13th, 1942
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.J. Campbell
The Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D.C.
334
COPY NO.
2
MOST SECRET
(U.S. SECRET).
OPTEL NO. 13.
Information received up to 7 A.M. 12th January 1942.
1. NAVAL.
A 9,000 ton British Merchant vessel, independently routed from
Canada to the United Kingdom, was torpedoed 170 miles south of Halifax on 11th.
One Norwegian and three British ships, totalling nearly 30,000 tons, in an
outward convoy to Canada, have been damaged in heavy weather.
2. MILITARY.
Libya.
10th. The enemy withdrew from his positions 12 miles southwest
of Jedabya and continued his retreat towards Agheila. A small second line
transport unit, moving up to a forward area, ran into a minefield and was then
surrounded by enemy armoured cars. Seven vehicles lost. By morning 11th,
further areas southwest of Jedabya were reported clear of the enemy and our
mobile columns were keeping contact.
Malaya.
Our forces were engaged in fierce fighting with the enemy in Western
Halaya on the 10th and have withdrawn further south.
Netherlands East Indies.
A Batavia communique announces that the Japanese have attacked
Tarakan Island (Dutch Borneo) and the Ninahassa District in North Celebes.
No details received.
Russia.
(1) Russian air staff who were extremely confident stated on 9th
January that
(a) Russians hoped to close pincers behind Home in next few
days and that Germans withdrawing from this sector 100 being heavily
bombed.
(b) It was believed Germans would NOT stand o: Cholencia line but
would continue withdrawal to pre-liar Polish-Russian frontier.
(c) It was regretted that German withirawal provessed Russian
offensive from achieving full effect.
(2) Picture as seen by British M.A. is
(a) Finland and Leningrad sector. No fresh
information.
-2-
335
(b) Central sector. Virtually no change except for minor
Russian advance in area west of Kaluga.
(c) Ukraine. In Oboyan area Russian attacks have been
followed by German counter-attacks. Russian offensive in Kharkov
sector still appears probable.
(d) Crimea. Germans are making great efforts against Russian
forces in Feodosia area. Additional Russian landings have been
made west of Feodosia and north of Sevastopol. Little is known of
their progress except that landing at Eupatoria has been repulsed.
No change in situation at Sevastonol.
(e) Conclusion. In central sector Russian advance has been
on nothing approaching same scale as in previous weeks. Although
Russian Staff are very confident (vide para. 1) too early to
estimate whether slowing down is due to
(1) Increased German resistance.
(11) Inability of Russians to maintain effective pressure.
(111) Voluntary pause by Russians to permit regrouping
necessary to mount further offensive. Any withdrawal to Polish
frontier seems highly unlikely.
3.
AIR OPERATIONS
Western Front.
10th/11th. Eilhelmshaven. 105 tons, including 4,000 pounders
and over 5,000 incendiaries dropped. Variable could hindered observation
but the railway station is believed to have been hit, and many large and
small fires were seen in the town and docks area. Emdon. 31 tons and
over 2,000 incendiaries, some large fires reported. Eleven R.C.A.F.
and 12 R.A.A.F. aircraft took part. One Australian among those missing.
11th. One German bomber was destroyed and another damaged off
our coast. One Spitfire is missing. A Liberator attacked a ship with
depth charges and damaged two Heinkel seaplanes.
11th/12th. 26 bombers were sent to Brest. All returned.
No reports yet. 39 enemy aircraft were plotted, 35 of them in the
Thames Estuary.
Mediterranean. Libya.
9th/10th. Three Wellingtons started large fires among dumps
at Buerat E1 Hsun. Single Wellingtons bombed dumps at Sirte and
attacked Tripoli Harbour.
10th. Severe sandstorms considerably restricted operations.
336
-3 Malaya.
No operations other than reconnaissance owing to weather.
4.
Dover.
11th/12th.
Dover was shelled in the evening. 19 out of 20
fell in the sea.
5.
The Germans continue to purchase Spanish trawlers and small
coasting steamers for service on the African supply routes. They are
first sent to Piraeus via Genoa and Naples, reliable crews being
unobtainable in Naples, efforts are being made to recruit Spanish
crews to work the ships beyond that port.
TREASURY DEPARTMENT
337
INTER OFFICE COMMUNICATION
DATE January 13, 1942
Secretary Morgenthau
TO
Mr. Kamarck
FROM
Subject: Summary of Military Reports
Russo-German War
A Finnish Intelligence officer reports that the
Nazis are out of place in the war on the Far Northern
Murmansk front. The ineffectual attempts of the
Germans in this area are winning the contempt of their
Finnish Allies.
(O.C.I., The War This Week, January 1-8, 1942)
Battle of Atlantic
In the afternoon of January 9, A British naval
minesweeper was damaged by an acoustic mine. (Thia
is one of the few references to successful use of the
acoustic mine. The mine is laid in shallow water and
detonated by the sound of propellers passing overhead. )
(U.K. Operations Report, January 10, 1942)
Malta
The airdromes at Tekali and Halfar were unserviceable on January 6 (due to intensive German bombing)
(The Germans are making determined efforts to neutralize
British air bases on Malta. So far, the purpose seems
to be to permit German reinforcements to pass to Libya.)
(U.K. Operations Report, January 8, 1942)
--
338
Italian Navy
The Italian battleshio Cavour, sunk at Taranto on
November 11, 1940, was raised early in July and pleced
in dry dock at Taranto. She has now left probably for
Genoa or Trieste. These are the only ports likely to
be sufficiently equipped to undertake the extensive
repairs necessary to out the ship into condition.
(Since the damage to the other ships tornedoed at Taranto
was much smaller than to the Cavour, it is likely that
they have been completely repaired by this time. Excluding the Cavour, Italy would, therefore, have five
battleships in commission. )
(U.K. Operations Report, January 8, 1942)
Next German Move
The Turkish Minister to Sweden believes that the
Germans are preoccuried with preparations for a spring
offensive against Russia. They will, therefore, make
no move elsewhere this winter.
German planes are still reported AR arriving in
considerable numbers in southern Italy and Sicily.
Air reinforcements are also reported in Greece There
is no evidence of any concentration of German forces
in preparation for A move through Spain, however.
(o.c.I., The Wer This Week, January 1-8, 1942)
339
RESTRICTED
G-2/2657-220: No. 599
M.I.D., U.D. 11:00 A.M., January 13, 1942.
SITUATION REPORT
I.
Pacific Theater.
Philippines: Artillery battled along entire front all day
yesterday. Enemy targets were heavily engaged upon exposure or dis-
covery. Our counter battery was particularly effective, silencing
eleven hostile batteries and dispersing groups of armored vehicles,
foot troops and mechanized columns. Enemy artillery positions have
been forced back along the entire front. Japanese dive bombers were
active over the front. Hawaii: Negative reports. Malaya: No
further reports from the East. According to the press heavy fighting
is going on slightly south of Kuala Lumpur, which apparently is in
Japanese hands. Press indicates that large flights of Japanese war
planes have been attacking the Singapore area during the last twentyfour hours. These attacks were said to have caused little damage.
The Japanese plane loss was heavy. Netherlands East Indies: The
press states that heavy fighting is raging at Tarakan (off the northeast coast of Borneo) and in the Celebes. West Coast: No further
reports of hostile activity have been received.
II.
Eastern Theater.
Fighting continues on the Russian central front. No change
in the situation has been reported. (The situation map will not be
issued today).
III.
Western Theater.
Air: According to the press, German bombers made a daylight
attack yesterday on military objectives on the northeast coast of
England. The Germans claim some damage by several bomb hits and state
that German planes also machine gunned their objectives. The R.A.F.,
according to this morning's communique from Cairo, subjected Halfaya
Pass to heavy bombardment again.
IV.
Middle Eastern Theater.
Ground: No major actions in the Agheila-Agedabia sector.
British Hiddle East Headquarters announced the capture of Salum.
Halfaya Pass apparently remains in Axis hands.
Air: Axis planes continue to bomb Malta. Axis and British
planes continue harassing activities in rear supply areas in Cyrenaica
and Tripoli.
RESTRICTED
340
January 14, 1942.
My dear Mr. Henderson:
Secretary Morgenthau has asked me to reply to
your undated letter which he received yesterday, en-
closing a copy of the letter addressed to you by
Dallas Dort, Director of Central Administrative Services, Office for Emergency Management, summarizing
the investigation made by Treasury agents of Thomas
I. Emerson, Associate General Counsel of the Office of
Price Administration.
I have reviewed with Mr. Elmer Irey, Chief,
Intelligence Unit, Bureau of Internal Revenue, the
report submitted to Mr. Dort and we agreed that it
contains irrelevant material, that it is deficient
in other respects, and that it should not have been
submitted.
I have accordingly instructed Mr. Irey to
write to Mr. Dort recalling the report for further
investigation and subsequent report. The additional
material enclosed with your letter in the form of a
memorandum from Mr. Emerson will have our attention
in that connection.
Very truly yours,
..
(Signour
Herbert E. Gaston,
Assistant Secretary of the Treasury.
Mr. Leon Henderson,
Administrator, Office of Prime Administration
Washington, D. C.
cc: Mr. Arthur S. Flemming, Chairman,
Civil Service Commission
Board of Legal Examiners.
HEGI ds
341
OFFICE OF PRICE ADMINISTRATION
WASHINGTON, D.C.
HENDERSON
The Honorable
The Secretary of the Treasury
Washington, D. C.
My dear Mr. Secretary:
I am enclosing herewith a copy of e letter addressed to me by
Dallas Dort, Director of Central Administrative Services, office for Emergency Management, summarizing an investigation made
by the Intelligence Unit, Bureau of Internal Revenue, Treasury
Department, of Thomas I. Emerson, who is Associate General Coun-
sel of this agency. I enclose also a statement prepared by Mr.
Emerson in answer to the charges made in the Treasury's report.
My judgment, based upon these documents, my knowledge of Mr.
Emerson, and the assurances I have received from David Ginsburg,
my General Counsel, is that R serious injustice has been done to
Mr. Emerson. The investigation conducted by the Intelligence Unit,
as I think you will agree from an examination of the documents
alone, seems to fall seriously short of that standard of competence
and impartiality which should be required by responsible agencies
of the government in matters of this sort.
Under the circumstances I join with Mr. Emerson's request, as
stated in his memorandum, that the matter be reopened and R full
and impartial investigation made.
Yours sincerely,
Leon Henderson
Leon Henderson
Administrator
cc: Arthur S. Fleming, Chairman,
Civil Service Commission
Board of Legal Examiners
Enclosures.
342
COPY
November 14, 1941
PERSONAL AND CONFIDENTIAL
Mr. Leon Henderson, Administrator
office of Price Administration
Temporary Building D
Fourth and Independence Avenue, S.W.
Washington, D. C.
In re: Thomas Irwin Emerson
3547 Quebee Street, N.W.
Washington, D. C.
Associate General Counsel
Excepted
Dear Mr. Henderson:
This is with reference to the character investigation of the
above-named employee.
The investigative report contains considerable testimony
charging Mr. Emerson with membership in the Communist Party, also
he and his wife are alleged to be "fellow travelers" and members
of organizations affiliated with the Communist Party.
Information obtained from the Department of Justice and
taken from the files of the Federal Bureau of Investigation
disclosed testimony of one informant, a former member of the Communist Party, now & Government employee, who claims he knew
Mr. Emerson was once a member of the Communist Party, and may or
may not be at the present time. The same informant related that
persons in Seattle, Washington, had told him that Emerson WAS 8
member of a Communist unit with them.
Mr. Emerson together with Nathan Witt, are stated to have
been among the founders of the National Lawyers Guild, and leaders
of its extrene pro-Communist faction. Mr. Earl Browder, in his
testimony before the Dies Committee, stated that the Guild WAS
R "transmission belt" for the Communist Party.
In connection with Mr. Emerson's activities in the National
Lawyers Guild, the following should be noted. The report reveals
that in 1940, there was brought before the Guild for adoption A
resolution for the condemnation of Communism. Mr. Emerson and
his followers refused to adopt the resolution. This caused the
resignation from the Guild of such members as Mr. Adolph Berle,
343
-2Mr. Leon Henderson
In re: Thomas Irwin Emerson
Assistant Secretary of State; Justice Douglas, Justice Jackson;
Solicitor Margold of the Interior Department; Thurman Arnold,
and other men of equally high standing and reputation.
Although some information was obtained from the Dies Com-
mittee, it was not possible to get complete coverage of the data
contained in the files of that Committee. It appears that the
case file on Mr. Emerson is being assembled for the purpose of
issuing a statement to the press in the near future.
An investigator of the Dies Committee stated that Mr. Emerson together with Mr. Shad Polier, the latter a New York attorney
who resides at 280 West Fourth Street, New York City-- the address
which Mr. Emerson states to be his legal residence--are both
members of the Executive Committee of the International Juridicial
Association. This Association is alleged to be an affiliate of
the International Labor Defense (the defense agency for Communists
in the United States) which is in turn affiliated with the Inter-
Red Aid in Moscow. The authority for this statement comes from
the proceedings of the International Labor Defense 1936-37, which
it is stated is on file with the Dies Committee. Among other
members listed in this group are the following:
Joseph R. Brodsky
Counsel for Earl Browder
Caroll Weiss King
Counsel for Harry Bridges
Dirk DeJonge
Communist, State of Washington
John P. Davis - Representative
American Negro Labor Congress
Isaac E. Ferguson - Charter member
of the Central Executive Committee of the Communist
Party
Yetta Land, Chairman of the Communist Party of Ohio
David J. Bentall and Leo Gallagher,
Candidates for office on the
Communist Party tickets.
(Consumist organisation)
Testimony obtained from employees of the National Labor
Relations Board where Mr. Emerson was employed as Assistant General
Counsel indicates that certain employees were not promoted to
supervisory positions inasmuch as they were not considered enough
leftist. The persons in question have been promoted to the
higher positions since Mr. Emerson and Nathan Witt, who was
mentioned above, severed their employment with the Board.
-3-
344
Mr. Leon Henderson
In re: Thomas Irwin Emerson
Employees of the National Labor Relations Board, referred
to above, alleged in their statements that Mr. Emerson would
attempt to control personnel appointments in his new office and
proceed to fill them with Communists. One of the informants
stated he knew of others of Mr. Emerson's kind who were in
National Defense work, but refused to mention any names.
Mr. Charles Fahy, Acting Solicitor General, United States
Department of Justice and former General Counsel of the National
Labor Relations Board, stated that he was instrumental in getting
Mr. Emerson in the Department of Justice, and had high regard
for his capabilities. He intimated that Mr. Emerson was not recommended in the investigative report of the Federal Bureau of
Investigation, but that he together with Solicitor General Biddle,
now Attorney General, and Justice Douglas were "instrumental in
having the appointment pushed through".
Mrs. Emerson, better known as Bertha Parst, is stated to be
a leading member of the League of Women Shoppers, as well as a
"fellow traveler" as mentioned above.
The above information disclosed, as a result of the investigation of this case, appears to be of such a serious nature that
it is being called to your immediate attention.
Sincerely yours,
Dallas Dort,
Director
co-Civil Service Commission
Personnel Officer, OEM
REM/hin
C
345
0
P
Y
JAN 14 1942
Mr. Bell:
In connection with the question which I
raise toward the end of the second paragraph of this
letter, I am adding at the end of the digest (last
sheet thereof) an excerpt from the Secretary of State's
letter to the Secretary of the Treasury of January 10.
Copy:1c:1/16/42
0
0
346
P
Y
DEPARTMENT OF STATE
WASHINGTON
January 14, 1942.
CONFIDENTIAL
Dear Mr. Bell:
Mr. Coe, speaking, I understood, under instructions
from the Secretary of the Treasury, informed me yesterday
afternoon of latest developments in the matter of the
proposed new financial assistance to China.
Without undertaking in this context to express an
opinion regarding the merits of the plan which I understand
was decided upon by the Secretary of the Treasury and the
President yesterday, and laid before Dr. T. V. Soong, I
wish to go on record as asking, on my own responsi-
bility and in light of the fact that the Treasury has
drawn me into the discussion of the matter, whether the
procedure envisaged in this plan, whatever may be the
other objectives which it might serve or effects which
it might have, can be expected to serve substantially
The Honorable
Daniel W. Bell,
The Under Secretary of the Treasury,
Washington, D. C.
347
-2-
either the political or the economic objectives which apparently have been in Chiang Kai-shek's and H. H. Kung's
minds in connection with the appeals which they have made
for a loan and in the minds of Mr. Gause and Mr. Fox in
connection with the comments and suggestions which they
have offered in relation to the question of a loan, and
which have been in the minds of officers of the Department
of State who have studied those appeals, comments and
suggestions and the situation out of which they arise.
I am sending you here enclosed, for strictly confidential use, a digest of telegrams which have borne on
this subject.
Yours sincerely.
(Signed) Stanley K. Hornbeck
Stanley K. Hornbeck
Adviser on Political Relations
Enclosure:
As described above.
CONFIDENTIAL
Copy:1c:1/16/42
348
CONFIDENTIAL
On September 25 the Secretary of the Treasury sent
a telegram to Fox informing him that Mr. Cochran was due
to arrive in Hong Kong October 7 and that it was hoped
that his visit would make possible "a round table
discussion of the various American, British, and Chinese
views toward a quick solution of the pending problems"
relating to the Stabilization Fund, the Chinese Foreign
Exchange Control, and the United States Freezing Control.
Copy:1c:1/16/42
349
CONFIDENTIAL
On November 9. according to Mr. Cochran's report
to Secretary Morgenthau, Dr. H. H. Kung proposed to
Mr. Cochran, inter alia, that the United States Treasury
set up in the United States a new and special fund in
United States dollars to constitute a reserve backing
for the Chinese currency. He said that the British
Government would be asked to act similarly if the United
States Treasury approved of such a plan. Dr. Kung did
not think it would be necessary to utilize such funds,
feeling that the psychological effect would be sufficient.
Dr. Kung also suggested that there be a consolidation
of the last three, or perhaps four, American Export-Import
Bank loans to China, extending the term and increasing the
total amount.
Copy:1c:1/16/42
CONFIDENTIAL
0
On December 16 the Secretary of the Treasury
telegraphed to Fox and requested Fox to convey to
Dr. Kung his regrets for not having had, as yet, the
time and opportunity to focus on the additional
proposals which Dr. Kung made to Mr. Cochran. "Dr. Kung
may be assured, however, that any proposals which he or
the Generalissimo may make will be received with the
attention and respect due to a nation which has so
courageously and successfully resisted Japanese
militarism. We are proud to take our place beside
China in a struggle that can only end in a complete
and lasting victory for the free peoples of the world."
Copy:ec:1-16-42
350
C
0
CONFIDENTIAL
P
Y
On December 21 Ambassador Gause telegraphed to
the Department of State a regume of China's financial
position as given orally by Sir Otto Nieneyer, in the
course of which statement is made that it is unofficially
known that the Chinese Government was then contemplating
a request to the United States Government for a loan of
$500,000,000. Niemeyer is stated as believing that such
a loan would be a mistake and as suggesting consideration
of a loan which would permit the issue of bonds to the
value of two billion Chinese dollars, half supported by
the British Government and half by the United States.
(In an immediately preceding telegram of the same
date Mr. Gause summarized a memorandum prepared by
Niemeyer which included a recommendation for foreign
support for the issue of an internal loan.)
Copy:ec:1-16-42
351
352
On December 30 Ambassador Gauss informed the Department
of State by telegram of views expressed to him on that day
by the Generalissimo in substance as follows:
Whereas intelligent Chinese do not lack confidence
in final victory of the anti-Axis powers there are the
uninformed masses, the doubters and those who are as-
sociated with the Chinese traitors who do lack such
confidence. The initial Japenese successes and Japanese
exploitation of these successes for propaganda purposes
have affected morale. China can help the common cause
with fighting manpower but Britain and America must help
China financially in order to prevent further deterioration of the economic foundation, confidence in the Chinese
currency, et cetera. Such help would go far to strengthen
morale and would silence doubtful and critical elements.
The Generalissimo wants a credit of about one billion
American dollars. He has asked the British Government
through the British Ambassador to supply about half of
this total or 100 million pounds, the United States to
provide the balance or about half a billion dollars. He
asked that I transmit his request to my Government and
that I emphasize the importance of such aid to Chinese
morale coming at this time toward overcoming Japanese
propaganda and toward giving needed support to the Chinese
economic
353
-2-
economic structure. He said that the proposed loan would
be used in part [to support17: a domestic bond issue
which would be designed to curb inflation.
Ambassador Gauss continued substantially as follows:
I informed the Generalissimo that I would of course
faithfully and immediately report his request and his
observations to my Government and said that I was
confident that we would be disposed to give sympathetic
consideration to any reasonable proposals for aid to
China in her resistance to Japan. However I suggested
that for the consideration of his request and for the
purpose of approaching Congress for necessary legislation
to authorize American participation in a loan or credit
to China there should be prepared a careful outline of
the needs of the situation based upon the recommendations
and studies of the financial advisers and experts of
the Chinese Government together with an outline of the
measures which it was proposed would be undertaken to
meet the situation, including measures which would be
taken by China to help herself. I added that I was not
suggesting that the terms of any proposed loan should be
outlined but rather that the needs of the situation and
definite measures to be taken to meet them be set forth.
The
354
The Generalissimo said that plans for the use of
the proposed loan or credit were being worked out by
advisers and experts but that meanwhile he desired
that I make the proposal to my Government and when the
loan is assured proposals for its application can then
be put forward.
The British Ambassador tells me that he has been
approached for a British loan of 100,000,000 pounds
and that he has referred the matter to London. He was
also without any specific proposals as to the manner in
which, if granted, the loan would be applied to China's
difficult economic situation: the Generalissimo considered that it is urgently necessary that he should be
able to show to his people and his armies that the
British Government has faith enough in victory to give
China quick and (?)
In a telegram dated December 31 Ambassador Gause
added substantially the following as his comments:
Initial Japanese successes are being exploited
in the Japanese radio propaganda which is directed
toward China at the same time that the Japanese armed
forces in China are again taking the offensive, have
the
.
undoubtedly affected the morale of the people, including
355
the upper classes. It remains to be seen how the
army has been affected.
The Generalissimo described the proposed loan as
a political measure. Although we have known from the
inside that before December 7 China was proposing to
ask for this loan, while at the same time failing
realistically to face the drastic domestic measures
which ought to be taken to deal with the deteriorating
economic situation, the problem now takes on full
political character.
The absence of definite proposals for the use of
the loan, except for support for a domestic bond issue
designed to slow up inflation, makes for difficulty.
However, I suggest that Congress might be asked to
authorize the granting of loans or credit up to a
specified amount under agreements to be entered into
by the executive branch of our Government.
With this action as an immediate measure to bolster
the situation here and an indication of support of the
Generalissimo as the leader of the policy of resistance,
the actual issuance of the loan or credits might follow
the presentation and the consideration of specific
proposals as to the use to be made of the loan or credits.
We
O
356
-5-
We know that the recommendations and advice of the
financial advisers and experts of the Chinese Government
have been given but scant consideration. They may be
able to work out proposals permitting a helpful and
sane application of the financial assistance sought.
Our information indicates that a domestic bond
issue would perhaps attract Chinese $2,000,000,000 and
not more than Chinese $4,000,000,000, the amount depend-
ing largely upon whether distribution is primarily
among the public at large as distinguished from the
governmental banks. Grants of loans, backed or supported
by foreign credits, to encourage domestic production
independent of imports might amount to Chinese $1,000,000,000.
This total of Chinese $5,000,000,000 might be doubled
in order to provide for psychological or political factors,
or for other legitimate demand, but still the total would
not exceed Chinese $10,000,000,000 as compared with the
equivalent of Chinese $20,000,000,000 requested by
General Chiang from ourselves and the British combined.
I think that credits not exceeding the above would
satisfy requirements, and that credits in excess of this
would invite attempts at misuse and would be misleading.
Copy:bj:1-16-42
0
0
ONFIDENTIAL
P
357
Y
On January 3 Mr. Fox in a telegram to the Secretary
of the Treasury stated, inter alia, that he found "much
talk in Chungking and also in Yunnanfu of a loan by the
United States and Great Britain to China The talk in
Chinese Government circles is of a United States dollars
500,000,000 loan by the United States and of a pound
100,000,000 loan by Britain."
Mr. Fox stated that for some time prior to the outbreak of war he had felt that in view of "the extreme
gravity of the internal economic situation" in China a
new loan was needed. This feeling, hemid had been
reinforced since the outbreak of war because of the
effect on political opinion in China of the initial
Japanese successes, and of "the perceptible strengthening
of defeatist elements in Chinese Government circles."
Mr. Fox said that "a substantial loan to China, the
bigger the better," would, under these conditions, "be
invaluable in keeping China going as an Anti-Axis power."
He added that the very fact that most of such a loan could
not be made use of was an argument in favor of making it
as large as possible.
Mr. Fox continued substantially as follows:
Although the internal economic effects of such a
loan might not be commensurate with its size after the
initial psychological effects have worn off, because of
the physical difficulties in the way of importing goods,
the
358
-2-
the economic effects would nevertheless be beneficial.
And, what is of more importance, the advantages of a
political nature would be very great. "A loan might
make all the difference between a victory of the
Chinese defeatists (and they are lukewarm) and their
neutralization." As pointed out earlier, the actual
outlay would be much smaller than would be the nominal
amount of the loan. The political effects of the loan
would be reinforced if no specific guarantees were
required. It would also be desirable if the loan were
used as an occasion for insisting upon the strengthening
and improvement of the Central Bak and of the banking
system of Chim.
Copy:ec:1-16-42
C
0
CONFIDENTIAL
P
359
Y
On January 6 Fox in a telegram to the Secretary
of the Treasury stated that on the previous day he had
discussed a loan to China with Niemeyer and Hall-Patch.
Fox said that Niemeyer seemed to realize, first,
that the political situation is bad and that financial
and economic considerations are secondary and, second,
that a loan to China is desirable, the only question
being the amount of the loan. However, Niemeyer believes
that goods can not get into China and that the request
for the loan will be turned down. Fox said that he (Fox)
thought that this "would be an unfortunate mistake" and
that he believed that as far as Great Britain is concerned
it is more important to offer to supply goods such as
cotton yarn and cotton from India and from Burma and
steel from India if it is possible, rather than to supply
a large amount of money.
Copy:ec:1=16=42
CONFIDENTIAL
On January 9 Mr. Fox in a telegram to the Secretary
of the Treasury transmitted a message from Dr. Kung in
which Dr. Xung stated substantially that:
The preliminary proposal which he had sent through
Cochran is no longer practical since the spread of var
in the Pacific which has altered the economic as well as
the strategic situation. For four and a half years China
has with untold sacrifices and heavy strain on her resources
fought a war of resistance. China's economic and financial
situation is now in a precarious state. The soldiers at
the front are ill-clothed and ill-fed while the livelihood
of the people is difficult due to rising prices. It is
necessary to keep control of currency and prices without
curtailing production. If the economic and financial
front, which is already in a very critical condition,
should collapse it would be impossible to carry on the war.
Present developments in the world war make it impera-
tive that the democratic countries pool their economic and
military resources as their and survival and existence
are interdependent. I therefore appeal to you for a
political war loan of $500,000,000. We have also approached
Britian for a loan of 100,000,000 pounds in order to cover
the total amount needed, and we are awaiting their reply.
I am confident that if you will lead they will follow. The
purpose of the loan is to replenish reserves in order to
restore confidence in currency, to restrain prices, to offset
360
-2-
CONFIDENTIAL
361
decreased imports by increased production, and to meet other urgent
war needs. On economic grounds and from the point of view of a joint
military front the loan can be soundly justified but "frankly my
reason for approaching you is above all political." The significance
of such a loan would be "even more important than that of the Lease
Lend Bill." In order to show that China's confidence in the allied
powers is matched by equal confidence of the allied powers in China
in the most crucial months of emergency immediately ahead, "timeliness
is the essence of such a move". An early announcement of the loan
would have an immediate effect throughout Asia, including our common
enemy, Japan, as well as electrifying Chinese public opinion. My
appreciation of your continuing and keen interest in China gives me
confidence in sending this telegram to you.
Also on January 9 Mr. Fox sent his comments on Dr. Kung's
message, as follows:
(i) attitude here has during the past few days changed from one
of despair to an attitude of firm insistance on financial aid. I
doubt whether any formal restrictions can now be imposed. Some form
of control is highly desirable in order to assure that the maximum
benefit from the loan would go to China and to the Chinese people.
I believe that if an early announcement can be made of a large loan,
it would have the desired psychological effect and would provide a
better opportunity, should all controls prove impossible, for obtaining
some informal safeguards.
If it is impracticable to tie up the Stabilization Board with the
CONFIDENTIAL
-3loan could American representation be provided in order to make
certain that the most effective use of the loan would be made in
strengthening the economic and financial structure of China?
eh:copy 1-16-42
362
CONFIDENTIAL
363
On January 10, the Secretary of State in a letter
to the Secretary of the Treasury made, inter alia, the
following statements:
"... I feel that, as an act of wartime
policy and to prevent the impairment of China's
military effort which would result from loss
of confidence in Chinese currency and deprecia-
tion of its purchasing power, it is highly
advisable that the United States extend financial assistance to the Government of China in
amounts up to $300,000,000 at the present time.
I believe that a determination of this Govern-
ment's policy to this effect need not await
ascertainment of the attitude to be taken by
Great Britain on the similar Chinese proposal
with reference to sterling credits.
"I feel that the greatest possible expedition
in reaching a position where an announcement can
be made is highly important. I feel also that it
would seem to be highly desirable that the British
Government be kept currently informed of our views
and decisions in regard to this matter in order
that the British Government may be afforded oppor-
tunity, should it so desire, to take simultaneous
and comparable action."
eh:copy
1-16-42
364
JAN 14 1942
My dear Sir Frederick:
Thank you for your letter of January 3, 1942
regarding the Chinese loan proposals. I am very
glad that you sent me your views and those of Sir
Otto Niemeyer.
As you know, we have received the same
proposals which General Chiang Kai-shek made to
the British Government. As soon as we have had
a chance to study these proposals and your own
I think that you and we should confer about the
problem.
Sincerely y urs,
(Signed) H. Morgenthan. Jr.
Secretary of the Treasury.
Sir Frederick Phillips,
The British Supply Council
in North America,
Willard Hotel,
Washington, D. C.
by Messenger Peach 11.15
File n.m.c.
ISF/efs
1/9/42
VFC
FILE COPY
365
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE January 7, 1942
Secretary Morgenthau
TO
H. D. White
FROM
Subject:
Letter from Sir Frederick Phillips of January 3, 1942,
regarding loan to China.
1. The British Government requests the Secretary's
general reaction to the Chinese proposals for a $500 million loan from the United States and 6100 million from
the United Kingdom.
2. It is said to be difficult to see how far large
dollar and sterling credits could enable China to face
the problem of checking currency inflation.
3. Sir Frederick expresses the hope that the United
States Ambassador in Chungking could support Sir Otto
Niemeyer's suggested reforms.
4. Sir Frederick asked the Secretary whether Sir otto
Niemeyer's proposal that the United States and the United
Kingdom, in amounts not exceeding $40 million each, guarantee
an internal gold loan secured on custom receipts, appeals
to him.
5. If the information and intelligence about the
political situation in China received from Fox, Currie and
Ambassador Gauss is correct, this proposed loan would do
more harm than good because: (a) it is so small as to be
insulting, and (b) to place another lien on China's Customs
receipts would infuriate the Chinese.
366
Willard Hotel,
Washington, D.C.,
January 3, 1942.
Dear Mr. Secretary,
Yo will of course be aware that the
question of further American and British assistance
to China has been raised in the last few days and
that in particular Chiang Ksi-shek has suggested
to the two Ambassadors that China ought to receive
additional loan assistance to a total of 500 Lions
and 6100 millions.
The British Government would be very inter-
ested to know what are your general reactions to this
proposal. The sums mentioned are of course, enormous
and it is the reverse of obvious how for large dollar
and sterling credits could enable Chine to race her
realproblem, which is to check the enormous inflation
of Chinese currency resulting from the war. It appears
that the Chinese Budget is being net 90 or more by
note printing. Nothing is being done to meet the
situation by the borrowing oi enuine savings, but in
order to restrain F. still greater rise in prices Chan
has at present occurred it seems essential to make a
decided effort in this direction. Prices have already
risen over July 1937 by nything up to thirty times,
mostly since June 1940 and the momentum is growing.
Sir Otto Tiemeyer is pressing on the Chinese
Government certain obviously needed reforms such is
controlling the grant of credit by private banks and
rates of interest, and measures to make more effc 'tive
transport control, particularly on the Burns Road, and
to check rice prices. We no ve that it may be foll.
possible for the U. Ambassador to live support to
these ideas, which however b. themselves 0.00 clearly
inadequate.
I am not aware how for it would be possible
for you to give further financial assistance through
channe 5 already established but ac 1 practical cetter
the problem seems to be not to give China more foreign
exchange (need for foreign exchange must have been
grea tly reduced by the closing of Changhai -120 Son
Kong, reducing Chinese imports to WITH she can get
over the Burna Road, and most of the letter is covered
by lend-lease) but to check the enormous increase in
the internal circulation of bank notes. To desl with
this latter point Niemeyer proposes that the Chinese
Government should be urged to issue an internal gold
loan for say fifteen years secured on customs receipts
the Honourable
Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
367
-2-
after existing loans, repayments to start five years
hence, and principal but not interest to be guaranteed
as to one tranche by the United States, and as to the
other by the United Kingdom, amount not exceeding say
L10 millions ($40 millions) for each tranche. The
proceeds of this loan would be used to redeem local
currency and reduce the circulation. I mentioned this
proposal recently to Dr. White,and I should be Blad to
learn whether in general principle it appeals to you.
Yours sincerely,
Hhillips
TREASURY DEPARTMENT
368
INTER-OFFICE COMMUNICATION
DATE January 14, 1942
TO
FROM
Secretary Morgenthau
Mr. Coe
Subject: U.S. Dollar-Yuan Stabilization Fund.
In connection with your current consideration of further
financial assistance to China you may wish to have before you
the following report on the status of the Stabilization arrangement which you entered into with China last April.
1. The Federal Reserve Bank of New York reported as of
January 12 the following condition of the U.S. Dollar-Chinese
Yuan Stabilization Fund of China, Special Account:
Total receipts
Total payments
$20,106,500.00
13,356,278.01
Balance
$ 6,750,221.99
The $20.1 millions in receipts represent the $20,000,000
contribution by the Chinese Government Banks and $106,000 of
export exchange acquired by the Stabilization Board. As
above figures show, the Chinese Stabilization Board has
instructed the Federal Reserve Bank of New York to make payments of about $13,000,000.
2. The Stabilization Board has not requested you to purchase
yuan as provided in paragraph 3 of the Stabilization Agreement
whereby you agreed to make such purchases up to the equivalent
of $50,000,000. The Stabilization Board has, therefore, so far
been operating entirely out of the dollars made available by
the Chinese Government Banks.
369
JAN 41942
ORANDUM FOR THE PRE IDENT:
As you know, with your approval the following steps
have been taken in connection with eneay property:
1. I have instructed High Commissioner Sayre to
meet the war emergency in the Philippine Islands by exercising
any or all of the powers conferred upon you under Title III of
the Irst Mar Powers Act, 1041. Sayre has advised us that he
as taken large quantities of gold, currency and securities
with him to Fort Mills. NO have instructed him to destroy or
otherwise dispose of such property to prevent its falling into
the hands of the enery.
2. I have also instructed Governor Poindexter that
he may exercise the same general powers in lewall that we have
already given Sayre with respect to the Philippines in order to
take care of any emergency that may arise and specifically to
liquidate three Japanese banks in Honolulu.
3. In cases in which American banks are not willing
or able to dispose of non-strategic materials consigned to the
Philippines and other points in the Far East and which now will
not be shipped, the Treasury Department will proceed to take over
the goods in the name of the United States and make appropriate
disposition thereof.
These new situations have now arison:
1. Governor Tugwell of Puerto Rice has strongly urged
that an administrator be appointed for 2 German corporation whose
officers have resigned or been Interned.
2. Governor Marwood of the Virgin Islanda has made
inquiries as to similar action being taken with respect to certain
German and Italian corporations in the Virgin Islands.
3. Serious delays are occurring in the delivery of
Japanese-owned raw silk for the manufacture of Army parachutes
370
-2-
because in many cases all signing officers of the Japanese
firms are in custody.
4. The Japanese firm of Mitsui has safes and other
office supplies in New York which the Military Intelligence
Division needs. In this connection, the Navy Department
recently told us that the Commandant of the 13th aval District
had to have additional space in Seattle immediately. Without
specifically obtaining your approval, we arranged for three
Japanese firms to be moved out of an office building and their
space made available to the Commandant.
with your approval, we will take appropriate action
in the above situations and other similar cases which say arise.
If you approve, it will be appreciated If you will so indicate
below.
(Signed) H. Morgentbau Jr.
I approve the foregoing action.
The White House
bl.Timmons:cps 1/13/42
THE SECRETARY OF THE TREASURY
WASHINGTON
JAN 1 4 1942
ORANDUM FOR THE PRESIDENT:
As you know, with your approval the following steps
have been taken in connection with enemy property:
1. I have instructed High Commissioner Sayre to
meet the war emergency in the Philippine Islands by exercising
any or all of the powers conferred upon you under Title III of
the First War Powers Act, 1941. Sayre has advised us that he
has taken large quantities of gold, currency and securities
with him to Fort Mills. We have instructed him to destroy or
otherwise dispose of such property to prevent its falling into
the hands of the enemy.
2. I have also instructed Governor Poindexter that
he may exercise the same general powers in Hawaii that we have
already given Sayre with respect to the Philippines in order to
take care of any emergency that may arise and specifically to
liquidate three Japanese banks in Honolulu.
3. In cases in which American banks are not willing
or able to dispose of non-strategic materials consigned to the
Philippines and other points in the Far East and which now will
not be shipped, the Treasury Department will proceed to take over
the goods in the name of the United States and make appropriate
disposition thereof.
These new situations have now arisen:
1. Governor Tugwell of Puerto Rico has strongly urged
that an administrator be appointed for a German corporation whose
officers have resigned or been interned.
2. Governor Harwood of the Virgin Islands has made
inquiries as to similar action being taken with respect to certain
German and Italian corporations in the Virgin Islands.
3. Serious delays are occurring in the delivery of
Japanese-owned raw silk for the manufacture of Army parachutes
-2because in-many cases all signing officers of the Japanese
firms are in custody.
4. The Japanese firm of Mitsui has safes and other
office supplies in New York which the Military Intelligence
Division needs. In this connection, the Navy Department
recently told us that the Commandant of the 13th Naval District
had to have additional space in Seattle immediately. Without
specifically obtaining your approval, we arranged for three
Japanese firms to be moved out of an office building and their
space made available to the Commandant.
With your approval, we will take appropriate action
in the above situations and other similar cases which may arise.
If you approve, it will be appreciated if you will so indicate
below.
,
I approve the foregoing action.
The White House
373
CONFIDENTIAL
WAR DEPARTMENT
OFFICE OF THE CHIEF OF STAFF
WASHINGTON
January 14, 1942.
MEMORANDUL FOR MR. MORGENTHAU:
Re Ordnance films processed by Agfa-Ansco
Film Corporation.
The Military Intelligence Branch has investigated
this situation. Apparently the Ordnance Department made a
contract last January with Williams, Brown and Earle of
Philsaelphia to make motion picture films. The services
rendered by this firm were not satisfactory and with the
approval of the Ordnance Department Williams, Brown and
Earle made a sub-contract with Agfa-Ansco to do the
desired work. The officer who arranged this procedure
is Lieutenant Sidney Grazi, Supervisor of the Photographic Section at Aberdeen.
The films handled by Agfa-Ansco included studies
of tests of tanks such as endurance tests; maneuverability,
track, drive and turret operation; firing tests; and passage
of obstacles. The finished productions are usually classified
as "Restricted" (to be communicated only to persons of known
loyalty).
Instructions have been given to have no more classified photography sent to Agfs-Ansco until cleared by the
War Department.
That
W.B.S.
CONFIDENTIAL
374
C
0
P
January 14, 1942
Y
Dear Mr. McNutt:
Secretary Morgenthau sent the attached memorandum
in regard to General Aniline and Film Corporation to
the President January 9th.
He has directed me to send a copy to you and the
other interested departments and agencies of the overnment having contracts or d ealings with this company,
with the suggestion that steps be taken to eliminate
situations of the character described in the memorandum.
Some details concerning contracts between your
Agency and General Aniline and Film Corporation have
been a ssembled here. I am attaching a memorandum set-
ting forth, as to contracts affecting your Agency, the
Contract Number, Date, Supplies Covered, Amount, and
Division of General Aniline involved, in the hope that
it may be of some assistance to you.
Sincerely,
(signed) E.H.Foley, Jr.
Acting Secretary of the Treasury.
Hon. Paul V.McNutt,
Administrator, Federal Security Agency,
25th and E Streets, N.W.,
Washington, D. C.
Attachments.
C
0
Px
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
FEDERAL SECURITY AGENCY
Division of
Bureau
General Aniline
Contract
Number
Date
Supplies
Amount
$75.00
Agfa Ansco
SAph 9776
4/3/41
Processing 35 mm
Public Health Service
U.S.Marine Hospital
Agfa Ansco
SAph 5627
4/11/40
Bromide paper,
31.80
Public Health Service
U.S.Marine Hospital
Agfa Ansco
SAph 10161 3/25/41
Bromide paper,
31.80
Public Health Service
Bethesda, Maryland
Mobile, Alabama
Mobile, Alabama
glossy, used on
electrocardiograph
glossy, used on
electrocardiograph
376
(COPY)
January 14, 1942
Dear Mr. Secretary:
Reference is made to my letter of January 10,
1942, concerning Government contracts with General
Aniline and Film Corporation.
Some details concerning contracts between your
Department and General Aniline and Film Corporation
have been assembled here. I am attaching a memorandum
setting forth, as to contracts affecting your Depart-
ment, the Contract Number, Date, Supplies Covered,
Amount, and Division of General Aniline involved, in
the hope that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
The Honorable,
The Secretary of Agriculture.
Attachment
5-10-42
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
AGRICULTURE
Division of
Bureau
General Aniline
Contract
Number
Date
Supplies
Amount
Agriculture
Ozalid
Als-20662 1/15/40 Ammonia developing $ 566.60
Agriculture
Osalid
Als-25775
Agriculture
General Aniline Als-19378 6/13/39 Cameras
machine
9/19/41 Ammonia developing 1,601.00
machine
268.31
Completed
5-10-42
377
378
(COPY)
January 14, 1942
Dear Mr. Attorney General:
Reference is made to my letter of January 10, 1942,
concerning Government contracts with General Aniline
and Film Corporation.
Some details concerning contracts between your
Department and General Aniline and Film Corporation
have been a ssembled here. I am attaching a memorandum
setting forth, as to contracts affecting your Depart-
ment, the Contract Number, Date, Supplies Covered,
Amount, and Division of General Aniline involved, in
the hope that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
The Honorable,
The Attorney General.
Attachment
5-10-42
GENERAL ANILINE AND FIL CORPORATION
GOVERNMENT CONTRACTS
DEPART ENT OF JUSTICE.
Division of
Bureau
General Aniline
Contract Number
Date
Supplies
Amount
Supplies
Agfa-Ansco
J-17468
5/12/41
Micro-films
$ 2,740.00
Supplies
Agfa-Ansco
J-17414
4/30/41
Micro-films
2,056.00
Supplies
Agfa-Ansco
J-17370
4/5/41
Micro-films
1,386.48
Bureau of Prisons
Agfa-Ansco
JIc-8926
1/25/40
General Photo-
5-10-42
graphic supplies
145.38
380
(COPY)
January 14, 1942
Dear Dr. Hunsaker:
Secretary Morgenthau sent the attached
memorandum in regard to General Aniline and
Film Corporation to the President January 9th.
He has directed me to send a copy to you
and the other interested departments and agencies
of the Government having contracts or dealings
with this company, with the suggestion that
steps be taken to eliminate situations of the
character described in the memorandum.
Some details concerning contracts between
your Committee and General Aniline and Film
Corporation have been assembled here. I am
attaching a memorandum setting forth, as to contracts affecting your Committee, the Contract
Number, Date, Supplies Covered, Amount, and
Division of General Aniline involved, in the
hope that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
Dr. J. C. Hunsaker,
Chairman,
National Advisory Committee for Aeronautics,
Navy Building,
Washington, D. C.
Attachments
5-18-42
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS
Division of
Contract
Number
Date
Supplies
Amount
Agfa Ansco
NaW-874
8/6/40
General photographic
supplies
$ 14.66
Agfa Ansco
NaW-1159
7/19/41
Services and materials
necessary, processing
General Aniline
300.00
391
382
(COPY)
January 14, 1942
Dear Mr. Lynn:
Secretary Morgenthau sent the attached
memorandum in regard to General Aniline and Film
Corporation to the President January 9th.
He has directed me to send a copy to you and
the other interested departments and agencies of
the Government having contracts or dealings with
this company, with the suggestion that steps be
taken to eliminate situations of the character
described in the memorandum.
Some details concerning contracts between
your Authority and General Aniline and Film
Corporation have been assembled here. I am
attaching a memorandum setting forth, as to con-
tracts affecting your Authority, the Contract
Number, Date, Supplies Covered, Amount, and
Division of General Aniline involved, in the hope
that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
Honorable David Lynn,
Chairman, Alley Dwelling Authority,
Room 1202, 1300 E Street,
Washington, D. C.
Attachments
-18-42
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
ALLEY DWELLING AUTHORITY FOR THE DISTRICT OF COLUMBIA
Division of
General Aniline
Agfa Ansco
Contract
Number
AD(H)-395
Date
4/9/40
Supplies
This type of film can
only be supplied by
Agfa Ansco; reversible,
high speed, fine grain,
panchromatic film.
Amount
Contract
cancelled.
383
384
(COPY)
January 14, 1942
Dear Mr. Eicher:
Reference is made to my letter of January 10,
1942, concerning Government contracts with General
Aniline and Film Corporation.
Some details concerning contracts between your
Commission and General Aniline and Film Corporation
have been assembled here. I am attaching a memorandum
setting forth, as to contracts affecting your Commis-
sion, the Contract Number, Date, Supplies Covered,
Amount, and Division of General Aniline involved, in
the hope that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
Hon. Edward C. Eicher,
Chairman, Securities and Exchange Commission,
1778 Pennsylvania Avenue,
Washington, D. C.
Attachment
5-16-42
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
SECURITIES AND EXCHANGE COMMISSION
Division of
Contract
Amount
Supplies
Date
Bureau
General Aniline
Washington Office
Ozalid Corp.
SE-246
6/27/40
Ozaphane film
Washington Office
Agfa Ansco
SE-247
6/27/40
Fine grain micro-
SE-254
6/29/40
35 mm. photographic
Washington Office Ozalid Corp.
Washington Office Agfs.Ansco
5-16-42
Number
SE-315
9/10/41
$ 900.00
film
film printer and
3,774.00
developer
1,500.00
Recordak, microfilm
2,770.00
386
(COPY)
January 14, 1942.
Dear Mr. Secretary:
Reference is made to my letter of January 10,
1942, concerning Government contracts with General
Aniline and Film Corporation.
Some details concerning contracts between your
Department and General Aniline and Film Corporation
have been assembled here. I am attaching a memorandum
setting forth, as to contracts affecting your Depart-
ment, the Contract Number, Date, Supplies Covered,
Amount, and Division of General Aniline involved, in
the hope that it may be of some assistance to you.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
The Honorable,
The Secretary of the Navy.
Attachment
5- 16-42
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
NAVY DEPARTMENT
Division of
Bureau
Purchasing Office
N. Y. C.
Supplies and
Accounts
General Aniline
Agfa-Ansco
Agfa-Ansco
Contract
Number
Supplies
Date
NI40s-83223 7/1/40 Cut film
Amount
$ 291.00
NOs-77692 10/12/40 Films
6,062.50
4,918.00
Bureau Aeronautics
Pa. Navy Yard
Agfa-Ansco
N156s-17847
11/1/40 Films
Purchasing Office
N. Y. C.
Agfa-Ansco
N140s-83059
6/29/40 Paper, glossy bromide 132.50
Agfa-Ansco
N140s-79029
6/15/39 Electrocardiograph
Purchasing Office
N. Y. C.
Agfa-Ansco
NI4Os-79026 6/15/39 Motion picture film 1,750.00
Navy Yard, Philadelphia, Pa.
Agfa-Ansco
N156s-15139
Purchasing Office
: Y. C.
551.50
Paper
6/15/39 Photographic materials
films, supersensi-
tive, etc.
22,378.90
387
Division of
Bureau
General Aniline
Contract
Number
Supplies
Date
1/12/40
Amount
$ 545.85
Film
General Aniline
N171s-48451
General Aniline
N181s-43785
12/6/40 Film, radiographic
709.23
General Aniline
N171s-50435
12/4/40 Printer and developer
760.00
General Aniline
N181s-40298
2/28/40 Films
1,255.00
N156s-21510
8/25/41 Photographic Equipment
1,635.40
Agfa-Ansco
Agfa-Ansco
N204s-20637
7/28/41
Photographic paper, film
N140s-79393
Completed
7/20/39
8/3/39
Film, photographic
Navy Purchasing
N220s-50058
Completed
5/31/39
7/22/39
Film, Aero
Naval Aircraft
Factory, Phila.
Agfa-Ansco
N156s-21113
8/18/41 Acids, alum, potassium,
Naval Aircraft
Factory, Phila.
Agfa-Ansco
N156s-21670
9/17/41 Photographic material
Bureau Supplies
& Accounts
Agfa-Ansco
Nos69630
Navy
Navy
Navy
Navy
Naval Aircraft
Factory, Phila.
U.S. aval Air
Station, Pensa-
cola, Florida
lavy Purchasing
office, .Y.C.
Agfa-Ansco
San Fran., Calif. Agfa-Ansco
Supplies
802.85
609.85
1,357.50
889.01
etc.
11/13/39 Film
2,089.74
10,688.75
388
389
(COPY)
January 14, 1942
Dear Mr. Secretary:
Reference is made to my letter to you of
January 10, 1942 concerning Government contracts
with General Aniline and Film Corporation.
I have been informed that Contract No. CC 3205,
dated July 8, 1941, in the amount of $1,441.31, be-
tween your Department and the Agfa Ansco Division of
General Aniline and Film Corporation covers aerial
photographic films.
This is being sent to you in the hope that it
may be of some assistance.
Sincerely,
(Signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
The Honorable,
The Secretary of Commerce.
5-10-42
390
C
0
P
January 14, 1942
Y
Dear General Hines:
Secretary Morgenthau sent the attached
memorandum in regard to General Aniline and
Film Corporation to the President January 9th.
He has directed me to send a copy to you
and the other interested departments and agencies
of the Government having contracts or dealings
with this company, with the suggestion that
steps be taken to eliminate situations of the
character described in the memorandum.
Some details concerning contracts between
your Administration and General Aniline and
Film Corporation have been assembled here. I am
attaching a memorandum setting forth, as to con-
tracts affecting your Administration, the Contract
Number, Date, Supplies Covered, Amount, and Divi-
sion of General Aniline involved, in the hope that
it may be of some assistance to you.
Sincerely,
(signed) E. H. Foley, Jr.
Acting Secretary of the Treasury.
Brig. Gen. Frank T. Hines,
Administrator of Veterans' Affairs,
Veterans' Administration,
Washington, D.C.
Attachments
SK/jba
C
0
P
Y
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
VETERANS' ADMINISTRATION
Division of
General Aniline
Contract
Number
Date
Supplies
Amount
Agfa Ansco
VaP 13633
2/24/39
Electrocardiograph
$1,584.00
Agfa Ansco
VaP 16967
3/18/41 Electrocardiograph
1,579.40
accessories
accessories
392
(COPY)
January 14, 1042
Dear Mr. Secretary:
Secretary Morgenthau sent the attached
memorandum in regard to General Aniline and Film
Corporation to the resident January 0th.
lie has directed me to send a copy to you
and the other interested depart ents and agencies
of the Government having contracts or dealings
with this company, with the suggestion that steps
be taken to eliminate situations of the character
described in the memorandu .
Some details concerning contracts between
your Department and General Aniline and Film
Corporation have been assembled here. 1 am
attaching a memorandum settin forth, as to contracts affecting your Department, the Contract
Number, Date, Supplies Covered, Amount, and
Division of General Aniline involved, in the hope
that it may be of some assistance to you.
Sincerely,
(Signed) S. H. Foley, Jr.
Acting Secretary of the Treasury.
The Honorable,
The Secretary of Interior
Attachments
-1 -42
(COPY)
GENERAL ANILINE AND FILM CORPORATION
GOVERNMENT CONTRACTS
DEPARTMENT OF THE INTERIOR
Division of
Bureau
Bureau of Mines
Pittsburgh, Pa.
General Aniline
Agfa Ansco
Contract
Number
Im 801
Date
9/20/40
Supplies
Invitation bid, not
offered, for reversible film
Amount
$166.50
2533
394
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE JAN 1 4 1942
TO
Secretary Morgenthau
FROM Mr. Foley
Attached is a third report prepared by Mr. Bernard's
office to assist you in your work as a member of the Joint
Senate and House Committee on economy.
You will notice that the veterans pension "grab" bills,
H.R. 4 and H.R. 4845, are to be considered in executive session by a subcommittee of the Senate Committee on Finance
on Tuesday morning, January 13, at 10:30 o'clock. This was
also mentioned in the memorandum I sent you Saturday,
January 10.
We shall continue our check on legislation which might
be subject to attack for economy purposes.
ENT
395
Report as of January 8, 1942 on Pending Legislation Wherein
There is Possibility of Non-Defense Economies.
H.R. 4 and H.R. 4845, veterans pension bills, mentioned
in previous reports as involving estimated first-year costs
of more than $33,000,000 will be considered by a subcommittee
of the Senate Committee on Finance at 10:30 o'clock Tuesday
morning, January 13. Our previous report as of December 1,
1941 indicated that there had been hearings on November 27,
1941, but that the subcommittee had not met in executive ses-
sion to consider the bills further.
The following bills mentioned in the report as of December
1, 1941 have since been enacted into law: S. 1544, Pan-American
road bill, Public, No. 275, approved December 26, 1941, and H.R.
6009, providing wartime rate pensions for service personnel,
Public No. 359, approved December 19, 1941.
There has been no new action on H.R. 5993, the Omnibus
River and Harbor bill, except that the Rules Committee has been
asked for a rule which has not yet been granted. One item in
the omnibus bill has been introduced as a separate bill in the
Senate (S. 2132, listed below).
Investigation reveals that nothing has been done by the
House on the numerous bills for veterans legislation, and no
396
-2-
action is presently contemplated by the Committee on World
War Veterans' Legislation, to which the bills were referred.
The previous omnibus veterans bill (H.R. 6106) is probably
dead, since the introduction by Chairman Rankin of the Com-
mittee (by request) of H.R. 6229 which corrects errors in
H.R. 6106 and adds a new section, which new section is also
embodied in H.R. 6246 (noted below).
On December 15, 1941 H.R. 4937, "To amend an Act entitled,
'An Act to authorize an appropriation for roads on Indian reservations'" (previously reported) was stricken from the House
Consent Calendar upon the objection of Representatives Cochran,
Wolcott, and Cole. Representative Cochran, expressing his
objection, said, "This is one of the broadest authorizations I
ever read, because it is unlimited in amount and places the
discretion in the hands of the Secretary of the Interior".
Under House rules, the bill could not be again placed on the
Consent Calendar during the same session. The rule does not,
of course, prohibit its reestablishment on the Calendar now
that the second session has commenced.
H.R. 6008 and H.R. 6108, social security bills, are in- actively pending before the House Ways and Means Committee,
which, we are advised, does not anticipate considering any
397
-3normal social security legislation during this Congress.
There has been no further action on other bills since
our previous report. The new bills introduced since the
previous report are briefly digested below.
Number: S. 2132
Title: "Authorizing the construction of a new lock at
Saint Marys Falls Canal, Michigan, in the interest of national
defense".
Features: Authorizes construction of a new lock at Saint
Marys Falls Canal, Michigan, to improve transportation on the
Great Lakes. This bill is an item in the Omnibus River and
Harbor bill (H.R. 5993), and according to H.R. Rep. No. 1431
on the omnibus bill the item involves an estimated expenditure
of $8,000,000, plus $100,000 a year. The expenditure is said
to be warranted by reason of greatly increased water traffic
on the Great lakes because of the armament program.
Status: Introduced December 16, 1941 by Senator Brown
and referred to the Committee on Commerce which has received
a favorable report from the Federal Works Agency. Time of
further action is not now known.
398
-4Number: H.R. 6246
Title: "To provide $100 monthly compensation for
service-connected disability to World War veterans after
age sixty, and for other purposes".
Features: Increase of disability compensation to any
World War veteran of 60 years of age or more to $100 per
month.
Status: Introduced December 16, 1941 by Representative
Peterson and referred to the Committee on World War Veterans'
Legislation. As noted above, this is part of H.R. 6229, the
omnibus veterans bill.
Number: S. 2142
Title: "To provide for the automatic issuance of national
service life insurance to all persons in active service in the
land or naval forces in such amounts as are necessary to give
them $10,000 of free insurance for the period of the war".
Features: Provides that all persons in active service in
land or naval forces shall have $10,000 of free national service
life insurance during their active service during time of war
and for six months after the termination of war.
399
-5Status: Introduced December 17, 1941 by Senator Lee
and referred to the Committee on Finance.
Number: S. 2172
Title: "To amend the Social Security Act to provide
for a more equitable Federal payment to the States for oldage assistance".
Features: Amends section 3(a) of the Social Security
Act so that the Federal Government shall pay three-fourths
of old-age assistance in any State up to $30 a month to any
one person and one-half of any assistance more than $30 but
not exceeding $40 a month.
Status: Introduced January 6, 1942 by Senator Doxey and
referred to the Committee on Finance.
Number: H.R. 6320
Title: "To amend the National Service Life Insurance Act
of 1940 so as to grant insurance benefits to dependents of cer-
tain civilian employees at military, air, and naval outposts".
Features: Provides that $5,000 policy of National Service
Life Insurance shall be deemed to have been granted to civilians
employed in connection with military, air, or naval base outside
400
-6of the several States and the District of Columbia who
die or have died since December 6, 1941 from injury in
course of employment or by reason of enemy action against
the base.
Status: Introduced January 7, 1942 by Representative
Coffee of Washington and referred to the Committee on Ways
and Means.
Number: H.R. 6319
Title: "To provide for lump sum payments for accumulated
or current accrued annual leave, or both, due to Government
employees at death".
Features: Provides for payment to heirs or estate in
specified order a lump sum equal to compensation for period
equal to accumulated or current accrued annual leave, or both,
of deceased Government employee.
Status: Introduced January 7, 1942 by Representative Downs
and referred to the Committee on the Civil Service.
Number: H.R. 6338 and H.R. 6339 (Identical bills)
Title: "To provide for Federal aid to the several States
in carrying out plans for industrial rehabilitation in the
counties thereof".
401
-7Features: Proposes payment by Federal Government of
one-half of cost of carrying out of State plans for industrial rehabilitation of counties, which plans must be
approved by the Administrator of the Federal Security Agency.
Status: Introduced January 8, 1942 by Representative
Claypool (H.R. 6338) and Representative Jenkins of Ohio
(H.R. 6339) and referred to the Committee on Ways and Means.
Other Veterans Legislation
Features: Separate bills for various sections of H.R.
6229 generally discussed in the last report under H.R. 6106
were introduced as follows: H.R. 6160, December 3, 1941 by
Representative Bates; H.R. 6161, December 3, 1941 by Representative Bates; H.R. 6162, December 3, 1941 by Represen-
tative Claypool; and H.R. 6234, December 15, 1941 by Rep-
resentative Peterson.
402
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE January 14, 1942
TO
FROM
Mr. Coe
H. J. Hoflich
Subject: War Production and Economic Incentives.
The following interesting points are made in a recent article
in the Oxford Institute of Statistics Bulletin:
1. "The failure to achieve optimum war production arises partly
out of the fact that industry is carried on by independent firms whose
structure, organization and personnel of their managements are not
deliberately chosen in view of maximizing the war effort, but are the
result of haphazard development in peace-time."
2. The restoration of profits and other peace-time incentives
cannot solve the problem of maximizing industrial war output.
3. Most of the war production problems "could be solved ideally
by the compulsory pooling of industries through the establishment of
temporary war-time state financed holding operating companies, with
full compensation to the owners".
(T. Balogh, "Money Incentive and the Production Drive", in Oxford
Institute of Statistics Bulletin, October 11, 1941.).
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
January 2 to date
(In thousands of pieces)
Bonds
orders at :
New orders
opening of:
business :
received
manufactured
today
today
:
:
Day
:
Unfilled :
:
:
Jan.
2
3
orders at
close of
business
Stock of
"B" type
bonds
on hand
IBM
deliveries
this day
429
932
370
991
61
400
991
600
420
1,171
61
400
none-closed
1,171
61
400
1,171
4
Unfilled
none-no mail
1,171
257
445
1,255
333
310
1,255
425
450
1,408
511
520
1,408
639
450
1,597
511
525
1,597
460
460
1,597
511
450
1,597
649
500
1,471
236
550
10
1,471
155
525
1,101
236
575
11
1,101
560
541
236
600
12
541
859
595
805
236
625
13
805
423
630
598
236
650
5
6
7
8
9
none-no mail
Office of the Secretary of the Treasury,
Division of Research and Statistics.
January 14, 1942
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Eleven Business Days of January 1942 and December and November 1941
(November 1-14, December 1-12, January 1-13)
On Basis of Issue Price
(Amounts in thousands of dollars)
Total
1941
$ 72,127
188,400
$ 22,586
42,346
$ 18,683
33,654
$ 49.541
146,054
260,527
27,386
110,439
64,932
8,840
59,530
52,337
9,168
58,013
195,595
18,546
50,909
$398,352
$133,302
$119,519
$265,050
$ 3,903
8,692
12,595
328
-
1,517
$ 13,783
Office of the Secretary of the Treasury, Division of Research and Statistics.
January
over
December
:
Series G - Banks
1941
December
over
November
: December
:
Series F Banks
1942
over
December
:
Series E Total
November
:
Series E - Banks
December
Percentage of Increase
or Decrease (-)
:
Series E - Post Offices
January
:
Item
or Decrease (-)
January
:
Amount of Increase
Sales
over
November
219.3%
344.9
25.8
301.2
209.3
85.5
24.1
3.6
2.6
198.3%
11.5%
20.9%
January 14, 1942.
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 - January, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
All Bond Sales
Bank Bond Sales
Bond Sales
Series E
Series E
Series F
Series G
Total
Series E
Series F
Series G
Total
$ 3,982
$ 10,229
$ 1,964
$ 7,605
$ 19,798
$ 1,964
$ 7,605
$ 23,780
4,802
4,457
10,736
9.557
2,056
1,278
7,779
5,453
20,571
16,289
$ 14,211
15,538
14,015
2,056
1,278
7.779
5,453
25,373
20,747
9,684
6,711
6,748
26,724
7,509
5.746
4,398
13,704
6,778
18,832
12,871
4,765
6,355
43,668
15,778
43,790
37,989
18,923
24,244
36,408
14,369
28,015
28,806
18,105
20,429
3,240
1,341
3,692
3,821
1,798
1,858
13,704
7,659
21,267
21,297
12,359
16,031
3,240
1,341
3,692
3,821
1,798
1,858
6,778
18,832
12,871
4,765
6,355
53,352
22,489
50,539
45,498
24,669
28,641
10,187
7,902
37,483
15,059
3,830
2,507
14,353
11,944
55,666
29,510
47,670
22,961
3,830
2,507
14,353
11,944
65,853
37,412
$ 72,127
$188,400
$ 27,386
$110,439
$326,225
$260,527
$ 27,386
$110,439
$398,352
January 1942
1
2
3
5
6
7
8
9
10
12
13
Total
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.
January 14, 1942.
406
JAN 14 1942
Dear Francis:
Thank you very much for the copy of a
Survey of Research on Post-War Problems, which
you sent me recently. It is very convenient to
have a survey which shows, in summary form, the
research now being done in post-war problems
both in the Government and in private agencies.
Sincerely yours,
(Signed) Henry
Secretary of the Treasury
The Honorable
The Attorney General
Washington, D. C.
File n.m.C.
copies to Dr which off
end from
HDMLLE
X or Kimmy COPY
407
OF
(
Office of the Attorney General
SEVENT
Washington, D.C.
USIS
GREAT
December 31, 1941.
Dear Henry,
I am enclosing a Survey of Research on
Post-War problems, recently prepared for the
Twentieth Century Fund, which shows in summary
form the agencies, personnel and type of work
now being done in that field, both in the Government and in private agencies. I thought
you would be interested in this.
Sincerely yours,
Francis Biddle
The Honorable
The Secretary of the Treasury,
Washington
408
(Confidential-Not for Publication or Quotation)
SURVEY
of
RESEARCH ON POST-WAR PROBLEMS
prepared by
George B. Galloway
for the
Twentieth Century Fund
July 1, 1941
409
TABLE OF CONTENTS
Page
RESEARCH IN POST-WAR PROBLEMS
PUBLIC AGENCIES
1
4
National Resources Board.
4
Department of Agriculture
8
Department of Commerce.
8
Business Advisory Council
10
Federal Reserve Board
10
Department of State.
11
Treasury Department
12
U. S. Army Industrial College
12
Production Planning Board of OPM.
15
Post-Emergency Economic Advisory Commission
15
Office for Coordination of Commercial and Cultural
Relations between American Republica
PRIVATE AGENCIES.
American Committee for International Studies.
American Federation of Labor.
American Society of Planning Officials.
The Brookings Institution
Commission to Study the Organization of Peace
Council for Democracy
Counoil on Foreign Relations
Federal Council of Churches
Foreign Policy Association
National Bureau of Economic Research
National Planning Association
New School for Social Research.
INDUSTRIAL ORGANIZATIONS
Automobile Manufacturers Association
Manufacturing Chemists Association of the U.S.
Dupont Company.
General Electric Company.
National Association of Manufacturers
National Industrial Conference Board.
U. S. Chamber of Commerce
U.S. Steel Corporation
INTERNATIONAL ECONOMIC RESEARCH HAVING DOMESTIC
17
17
17
17
18
19
20
22
22
23
24
24
24A
26
29
29
29
30
30
32
32
32
33
33
REPERCUSSIONS
National Policy Committee
Caradian-American Economic Committee.
League of Nations: Economic and Financial Section
34
34
35
410
RESEARCH IN POST-WAR PROBLEMS
The following memorandum is based on a hurried survey of some fifty
public and private agencies in Washington, New York, and Princeton of which
those listed below have taken an interest in post-war problems. These include the numerous departments and offices, both civil and military, of the
Federal Government; the several better known private research organizations
in the East; and some of the leading industrial groups. While the
reconnaissance does not purport to be exhaustive, - particularly as
regards the industrial organizations - it is believed that most of the
interested agencies have been covered.
To appraise or even describe the results of current and future postwar research in the United States is hazardous under existing conditions.
For serious investigation in this field is still in an embryonic stage.
There is widespread recognition, to be sure, of the need of careful planning
for the post-emergency period and much discussion of it in governmental,
professional, industrial, and labor circles. But much of this discussion
is vague, general, shadowy, and evanescent. It is difficult to get down
to brass tactics about post-war problems because of the dynamic nature of
world affairs, the sweeping surge of events, and the conjectural character
of the shape of things to come.
Social research deals customarily with the past rather than the
future. Its tools are adapted to fact-finding about things that have
already happened rather than to speculation in the hazardous calculation
of probabilities. As a result, the researches on post-war problems that
are now getting under way are largely historical and comparative in
character, seeking to learn the lessons of history, to profit by the
experience and mistakes of the post=1918 period, or to discover the
techniques of contemporary practice in the belligerent countries of Europe.
411
2.
There seems to be general agreement that all the problems of government, economy, and society that have confronted the American nation since
the Great Depression will still be with us in greater or less degree after
the present oonflict. The wars that are now dividing, embroiling, and impoverishing mankind are due in large part to our failure to solve these
problems and smooth the frictions within and between nations. The
exigencies of war are accentuating old problems, creating new ones, and
accelerating the long-run centralizing trends in our economic and political
life.
The problems that will face the United States after the current
emergency will be national and international in soope and political,
economic, social, military, psychological, and moral in character. They
will be conditioned by the duration of the confliot, the identity of the
victor, and the state of the nations involved. While these matters are now
unprediotable and the future cannot be blueprinted, it is possible to
anticipate in any event the kinds of internal economic problems that will
call for intelligent planning in the post-war period.
The domestic problems of post-war economic reconstruction will be
concerned with the efficient performance of the functions that any economic
system has to perform, whether it be a planned, unplanned, or a mixed
economy like our own. These functions have to do with the organization
of money and credit problems of savings and capital formation, of industrial
and production policy, maintenance of employment and of minimum standards of
living and adjusting international trade and investment.
More specifically, when the war ends, we will be faced with all the
problems of demobilising a wartime economy of converting defense industries
to peacetime production; of providing employment for demobilized soldiers,
civilian war workers, and workers in defense industries; of taxation, debt
412
3.
adjustment, and fiscal policy; of redistribution of the national income;
of regional development and balance; and, if Germany wins, of maintaining
a fortress economy in a hostile world.
On the socio-economic side there will be the continuing problems of
national health and nutrition, of public education and recreation, of housing and social security. It appeared to be the consensus of opinion that,
regardless of the outooms of the war and of fluotuations in party politics,
the federal government will steadily extend its control over the machinery
of investment and oredit, the management of basic industries, the distri-
bution of the labor force and the national income, and the direction of
foreign trade.
This survey made in June 1941, reveals that all these economic and
social problems of post-war readjustment are on the agendas of public and
private research agencies in the United States. There is much talk and
some thought about the shape of things to come in this country and in the
world at large after the war. More or less ambitious research programs
are being adumbrated, but these are still in their earliest stages and no
agency can claim a corner on any sector of the post-war planning front.
It was general opinion that the more this field is cultivated, the less
likely that some important aspect of it will be overlooked.
There was widespread interest among those interviewed in the pos-
sibility of a Fund study in this field and many offers of cooperation both
from professional and industrial organizations. The need of cooperation
in this task of planning for the future is manifest, both to divide the
labor of an undertaking too vast for any single agency and to develop common
objectives and a unified program.
4134.
PUBLIC AGENCIES
National Resources Planning Board (Washington, D.C.)
The NRPB is projecting all its ourrent studies into the post-war period
in accordance with its habit of taking the long view ahead. These studies
are concerned with three principal fields of planning resources planning,
economic planning, and social planning. Its current studies in the resources field cover the land, water, energy, and science resources of the
country. In the economic field they deal with public works, industrial
location, transportation, fiscal policy. In the social field they deal
with relief policy, education and youth.
At this early stage in the formulation of the post-war agenda, no
precise evaluation can be made of the final results of these post-war
studies. No plans for their publication have yet been made. But they are
the most comprehensive and systematic studies of post-war problems being
undertaken by any Federal agency. The competence of those in charge of them
and the standard set by the reports of the Board hitherto may lead us to
expect that the results will be very substantial, subject to the limits
set by a sense of political discretion.
Persons in Charge
Areas of Research
Economic Planning
1. Public works projects as a post-war
shock absorber: federal, state, local,
including capital budgets for cities
and states. (See NRPB report on
Development of Resources and Stabiliza-
tion of Employment in the United States.
Part I. The Federal Program for National
Development. Part II. Regional De-
velopment Plans. Part III. Functional
Development Policies.)
Frank W. Herring, Asst.
Director.
414 5.
2. Post-war employment planning trends,
Thomas C. Blaisdell, Jr.
problems of labor supply and demand,
absorption of demobilized soldiers and
defense industry workers, dovetailing
public works program with available
labor supply and skills; role of the
service industries in post-war economy.
3. Post-war fiscal policy -
Alvin H. Hansen (on loan
4. Transportation policy -
Ralph J. Watkins, Asst.
Director.
See Fiscal Polioy and Business Cycles.
Post-war problems in all transport
fields. (See report to be published
from Federal Reserve Board).
in summer of 1941.)
5. Agricultural Adjustment -
(See Chapter 11 in Planning for
America - Holt & Co.)
In cooperation with M. S.
Eisenhower, Land Use Coordinator,
U. 8. Dept. of Agriculture.
6. Industrial location policy -
Glenn E. MoLaughlin.
7. International economic relations -
Lewis L. Lorwin.
(See his Philadelphia paper.)
Resources Planning
1. Land development policies (See Development of Resources and
Land Committee, William I. Myers,
Chairman.
Stabilization of Employment in the
United States. NRPB. Part III,
pp. 3-20.)
2. Water development policies (See Development of Resources and
Water Resources Committee,
Abel Wolman, Chairman.
Stabilization of Employment in the
United States. NRPB. Part III,
pp. 21-50.)
3. Energy development policies -
(See Development of Resources and
Stabilization of Employment in the
United States, NRPB. Part III,
pp. 51-59.)
Energy Resources Committee,
Ralph J. Watkins, Chairman.
415
6.
4. Regional development plans -
(See ibid., Part II.)
John Miller.
Social Planning
1. Education and youth (See Chapter 21 in Planning for
Paul R. Hanna and Floyd Reeves.
America.)
2. Nutrition -
In cooperation with Bureau of
Home Economics, U. S. Dept. of
standards and diets,
production and distribution problems involved in reaching standards and remedying dietary deficiencies. (See Chapter 19 in Planning
Agriculture.
for America.)
3. Unemployment relief and social security
policies -
William Haber.
(See forthooming report by NRPB and
Chapter 24 in Planning for America.)
4. Civilian needs - clothing, housing,
recreation, personal services, eto.
Unassigned.
Gaps in the Agenda
(as of June 24, 1941)
1. Production planning - problems of conversion of defense industries,
replacement of obsolescent plant and equipment,
etc. These problems may be tackled later on by
the Production Planning Board of the OPM after
it has solved problems of defense production.
(See Chapters 10 and 32 in Planning for America.)
2. Income distribution - methods of modifying - the role of the social
services, relief expenditures, public works,
taxation, farm programs, social security, labor
and price programs in modifying income distribution
and consumption after the war. (See Chapter 13 in
Planning for America.)
416 7.
3. Public health -
study of health tronds, problems of nutrition and
fatigue, effects of defense program on, new health
problems created by population movements into
army camps and defense industry towns, depletion
of civilian medical services by demande of armed
forces, changes in organization of private medical
practices, replanning of health services. (See
Chapter 22 in Planning for America.)
4. Housing -
Covered by the Fund's Survey.
5. Recreation -
(See Chapter 23 in Planning for America.)
Since December 1940, the NRPB has been giving fortnightly a series
of informal policy dinners for top government officials and a few selected
outsiders for the purpose of discussing post-war problems, stimulating
thought about them, and laying the basis for common assumptions and objectives
in post-war planning.
On July 2 this process of "organizing consent" is to be continued
by a meeting of technical advisers from twenty-two Federal agencies held
under the auspices of the NRPB. At this meeting the Board will submit a
set of assumptions or hypotheses relating to the objectives of post-defense
planning and invite those present to consider the effects of these assumptions
in their particular jurisdictions and by what policies and programs common
objectives can be realized. In this way the Board is seeking to coordinate
and harmonize the post-defense planning activities of the numerous Federal
departments, to break down mental barriers between departments, and to
counteract the tendency to regard particular areas of policy as the special
preserve of this or that agency.
The Planning Board is also making an effort to keep in touch with
post-war planning activities in England. A special section on post-war
reconstruction has been set up in the Foreign Office with which the Board
maintains contact through the British and American embassies, Sargent
417 8.
Florance (a former member of the Board's staff, now at the University of
Birmingham), and Eric Biddle who is making a study in England of the impact
of the war on local institutions.
Department of Agriculture (Washington, D.C.)
The Secretary of Agriculture has appointed an Inter-Bureau Coordinating
Committee on Post-War Agricultural Programs under the chairmanship of Mr.
Tolley, Director of the Bureau of Agricultural Economics. This Committee is
beginning to develop rural works, forestry, flood control, and soil conservation programs as a post-war shook absorber in agriculture. Its formation
was stimulated by a Presidential inquiry as to what the Department was doing
to prepare for the post-war period and by inquiries from the National Resources Planning Board regarding rural work projects as part of that Board's
"six-year shelf" of public works. The Committee does not now contemplate
any extensive new researches in this field, but proposes to develop its
post-war programs in cooperation with the state and local agricultural
planning committees. It is proceeding more or less independently of the
post-defense agenda of the Planning Board.
Department of Commerce (Washington, D.C.)
Under the recent reorganization of the Bureau of Foreign and Domestic
Commerce, two new policy units were created: one on International Economics,
the other on National Economics. These Units are physically situated in
the Divisions of International and National Economy, respectively, but are
functionally autonomous.
Dr. Amos Taylor is in charge of the International Economics Unit
which has two studies under way in the post-war field: (1) a study of the
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9.
international financial position of the United States in terms of balance
of payments, not by calendar years, but by oyolical periods; and (2) a
study of the effects upon our foreign trade and finance of a complete
British defeat. This second study, just completed and transmitted to
Undersecretary Taylor, measures the consequences of a German victory for
(a) our raw material supplies (Butterworth), (b) for our trade with
Europe (Domerateky), (o) for our economic relations with Latin America
(Corliss), and (d) for our economic relations with Canada (Hudson). These
studies are being made quite independently of the post-defense agenda of
the National Resources Planning Board,
Prof. Arthur Upgron of the University of Minnesota has been appointed
head of the National Economics Unit. He was recommended for the post by
Alvin Hansen and takes office on August 1st. Both units will have small
staffs: one P-7 man; two P=6 men, two P-5 men; and such additional personnel
as may be needed.
The Department is also represented by Dr. Amos Taylor on the Interdepartmental Committee on international economic relations of which Dr.
Pasvolsky of the State Department is chairman. The Department receives
numerous requests for factual information concerning commodity supply and
demand, shipping facilities, and the like from the OPM and other federal
agencies. Its Bureau of Foreign and Domestic Commerce is still in the
process of reorganization and precoupied with internal administrative
and personnel problems. Aside from the studies already mentioned thought
about post-war problems in this Department appears to be still in the
embryonic stage.
419
10.
Business Advisory Council (Washington, D.C.)
This Council, organized in the early days of the New Deal. "dems to
have taken a new lease on life with the defense program. It has no staff
to make formal studies, but is arranging a series of informal meetings of
businessmen to discuss immediate defense problems and their long-run im-
plications, with a view to preparing the business mind for future develop=
ments and in the hope of tempering the more radioal proposals of Congress
and the Administration. The agenda of these meetings includes such topics
as priorities, ourtailment of consumer credit, wage and price trends, taxation and borrowing, the dismissal wage, expansion of capacity, etc.
Federal Reserve Board (Washington, D.C.)
The Division of Research and Statistics of the Board of Governors
of the Federal Reserve System is undertaking a special study of the combined effects upon our economy of (1) the enlarged defense program and
(2) probable changes in American external trade resulting from war and
from post-war developments. Various assumptions regarding the dimensions
of our defense program and the changes in the character and volume of
American foreign trade are being examined, and the effects of these factors
upon the intensity of utilization of productive resources and the adaptation of available resources to altered patterns of demand are being analysed.
The implications for monetary policy will be developed. Professor Hansen
of Harvard University is serving as special economic adviser for the purpose
of this study, and various members of the Division's staff, including some
taken on especially for the purpose, are studying special aspects of the
problem.
Prof. Hansen is supervising three studies in the post-war field.
The first is a study of housing and urban rehabilitation being made by
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11.
Guy Greer. The second is a study of federal-state-local fiscal relationships being conducted at the Treasury under the direction of Prof. Harold
Groves of the University of Wisconsin. The third is a study of British
Commonwealth-American relations being made with the assistance of Walter
Gardner (Chief of the International Finance Section of the FRB Division of
Research and Statistics) and his staff. This third study includes an
analysis of the German organization of Europe: its raw materials, industrial
capacity, and the like.
None of these studies at the Federal Reserve Board is expected to
eventuate in published articles or monographs. They are finding expression
rather in a number of internal confidential memoranda which will be used
as a basis for the formulation of administrative policy.
Department of State (Washington, D.C.)
The State Department has created a Division of Special Research under
Dr. Leo Pasvolsky to study international post-war problems. This Division
has a small staff and has begun by attempting to define what these problems
will be.
In addition, Dr. Pasvolsky has organized an informal "consultative
group," erroneously spoken of as Interdepartmental Committee, which includes
representatives of the Departments of State, Commerce, and Agriculture,
Treasury, Federal Reserve Board, and the Tariff Commission. This group is
accumulating historical information on such typical post-war problems as the
diminution of sovereignty and the relief of a prostrate Europe denuded of
raw materials. In the words of one of its members, when the war ends we
will have to do a lot of ad hoo thinking. Our present task is to anticipate,
define, and document as many of these post-war problems as possible so as to
421
12.
reduce to a minimum this area of improvisation. This task is conceived to
be one not of definitive fact-finding, but of interpretative analysis. In
this task of anticipation, definition, and analysis the State Department
welcomes the cooperation of all competent agencies, though the ultimate
decisions on policy and action must, of course, be government decisions.
These decisions will be made by the Nazis, not us, if the war ends with
Germany dominant in Europe.
The Department has entered into a confidential arrangement with the
Council on Foreign Relations to conduct certain studies relating to the
implications for American foreign economic and financial policies of a
Nazi victory and a continental European economy dominated by Germany.
Treasury Department (Washington, D.C.)
Studies of post-war taxation and debt policy are being conducted at
the Treasury under the direction of Prof. Harold Groves of the University of
Wisconsin and a group of advisers including Messrs. Shoup, Heer, Viner,
Gulick, Haig, Martin, Leland, and Mabel Newcomer. Prof. Groves is also
launching a study here of federal-state-local fiscal relationships in 00operation with Prof. Hansen of the Federal Reserve Board. These studies
are still in their early stages and there are no present plans for publication.
U. 8. Army Industrial College
The problems of post-war economic readjustment were assigned by the
Army Industrial College during its 1939-1940 course to a committee of four
officers for study and report. They submitted a 60-page report on May 28,
1940, which contained five parts:
422
13.
1. General considerations
2. Problems of economic readjustment
3. Considerations underlying a solution to these problems
4. A proposed solution
5. Conclusions and recommendations
The problems of post-war economic readjustment visualized by the
Committee in its report are summarized below:
1. Termination of wartime controls
a. Timing of release: immediate, gradual, indefinitely postponed
b. Avoidance of secondary dislocations
C. Dangers involved
2. Financial problems
a. Provision of ample supply of capital and credit to private industry
b. Avoidance of inflation or deflation
C. Maintenance of national income
d. Taxation to reduce public debt and finance recovery
0. Foreign loans for reconstruction of Europe, industrialization of
Latin America, development of backward countries, etc.
3. Labor problems
a. Providing employment for demobilized soldiers and industrial workers
b. Rate of military demobilization
O. Reemployment of civilian war workers, including women
d. Readjustment of hours and wages
0. Restoration of rights surrendered during war
f. Migration of labor from defense industry towns
4. Industrial problems
a. Relaxation of wartime controls
b. Adjustment of unfinished war contracts
C. Disposal of surplus property
d. Disposition of war plants
e. Public and private construction programs
f. Reorganization of methods of production
g. Postwar market conditions
5. Agricultural problems
a. Meeting peacetime food and raw material requirements
b. Reducing production costs
C. Balancing supply and demand for farm labor
6. Trade and commerce
a. Recovery of foreign markets
b. Tariff revisions
423
14.
O. Trade agreements
d. Ship subsidies
6. Use of gold in foreign trade
7. Social problems
a. Rehabilitation of war veterans
b. Care of homeless and disabled civilians
O. Education of youth interrupted by war
d. Unemployment relief
8. Administrative problems
a. Creation of an office of Reconstruction in the OKM
*Discussed by the Committee on Problem No. 42, "Post-War Economic Readjust-
ment," at the Army Industrial College, May 28, 1940, paragraphs 6-15.
The conclusions and recommendations which the Committee reached after
its study were:
1. That a major war will produce wide-spread dislocations in all
aspects of our social, economic, and political life,
2. That the general aim of post-war readjustment should be the
establishment of an advanced and improved economy instead of merely the
reestablishment of the pre-war order.
3. That the solution of the problems of post-war economic readjustment
will require the coordinated and determined efforts of both Government and
private industry.
4. That the public has the right to look to the Federal Government for
leadership toward post-war readjustment.
5. That changes in the economic structure caused by the war must be
continuously studied and analyzed throughout the war period.
6. That the government agency charged with the task of planning for
post-war economic readjustment should be an independent agency created for
this specific purpose.
7. That the execution of government sponsored measures concerning
post-war readjustment should be performed by the existing agencies of
government.
8. That at the beginning of a war an advisory agency directly under
the Chief Executive be created to study and make recommendations concerning
all problems arising as a result of the war which will affect post-war
economic readjustment.
424
15.
Production Planning Board of OPM (Washington, D.C.)
This Board WELS created on February 20, 1941, as part of the Production
Division of the Office of Production Management. It now reports directly to
the OPM Council and has nine members:
Robert E. Doherty, Chairman (President of Carnegie Institute of
Technology)
Brig. Gen. H. K. Rutherford (War Dept. Planning Branch)
J. B. Carey (Secretary of the C. I. 0.)
S. R. Fuller, Jr. (President, North American Rayon Corp.)
Harry L. Hopkins (White House Office)
W. E. Levis (Chairman of the Board, Owens-Illinois Glass Co.)
J. L. Pratt (Formerly Ex. Vice President General Motors Co.)
Admiral W. H. Standley, retired
George Meany (American Federation of Labor)
The Board meets once a week and has no professional staff, although it
may set up a small staff later on if its work requires it. It uses the Bureau
of Research and Statistics of the OPM as a service agency. All the members of
the Board except Admiral Standley have other large responsibilities in government
or industry.
At present this Board is making no formal studies of any kind. It is
concerned rather with the day-to-day decisions involved in the performance of the
functions of the OPM which relate to defense production, purchases, priorities,
and labor problems. In making these decisions, however, it considers their
post-defense implications 80 far as the stress of current events permits. When
the defense program is farther advanced, the Board hopes to have more time to
devote to long=run production planing and to articulate its activities with the
post-defense planing of the National Resources Planning Board with which it is
in touch.
...
Post-Emergency Economic Advisory Commission (Washington, D.C.)
In January 1941, Senator Wagner of New York and Congressman Voorhis of
California introduced a Joint Resolution (H. J. Res. 76) to establish a Post-
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Emergency Economic Advisory Commission. This Commission would be composed of
three members of the Senate, appointed by the President of the Senate: three
members of the House of Representatives, appointed by the Speaker of the
House; and six members appointed by the President. The Commission would be
authorized and directed to study the economic problems likely to confront the
nation upon the termination of the present defense emergency, and to formulate
a comprehensive program for the full utilization of America's resources of men
and machines in maintaining and improving the economic well-being of all the
people.
Congressman Voorhis also introduced on January 10, 1941, a Joint Resolu-
tion (H. J. Res. 59) to establish a National Unemployment Commission whose duty
would be to develop a program for post-war economic adjustment. "The Commission
shall give special attention to measures to be taken at the time of the return
of the Nation to a peacetime economy in order that the reduction of defense
expenditures will not result in depression and severely aggravated unemployment."
Hearings on both these resolutions were held by the House Committee on
Labor between June 24 and July 1, 1941. Testimony in support of the resolutions
was submitted by members of Congress, and representatives of farm groups, labor
unions, business associations, consumer cooperatives, and church organizations.
Similar hearings in the Senate have been delayed by the long illness of
Senator Wagner. The proposal to establish a Post-Emergency Commission is
opposed by some businessmen in the belief that it would be just another TNEC
dominated by the Administratione It is also opposed by the National Resources
Planning Board which is developing its own post-defense agenda and believes
that it is the proper place in which to study methods of preventing a post-war
depression
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17.
office for Coordination of Commericial and Cultural Relations between
American Republics
This organization, set up by the President under the defense program
with Nelson Rockefeller in charge, is conducting extensive studies on leading
questions involved in post-war inter-American relations. The primary emphasis
in current research is on trade mechanisms and procedures. Problems under
investigation include export credit insurance, foreign trade competition
immigration and resettlement, disposition of hemisphere surpluses, financial
development, policy considerations, and activities of inter-American Development
Commission and Export-Import Bank. There are no plans for publication, as the
research findings are to be used for internal guidance of public policy.
PRIVATE AGENCIES
American Committee for International Studies (Princeton, New Jersey)
This Committee was set up by the Rockefeller Foundation to serve as a
clearing house for studies in the international field. It has issued an
annotated bibliography on Peace Aims and Post-War Reconstruction by Fawn Me
Brodie (February 1941) and Notes on Studies Currently Under Way in the Field
of International Relations (April 10, 1941). This listing of studies in progress
is confined largely to research projects and related scholarly activities which
are under institutional auspices, which have a direct bearing on the contemporary
world situation, and which are not confidential in character. The studies listed
are almost entirely in the field of post-war international reconstruction
American Federation of Labor (Washington, D.C.)
In an article in the American Federationist for March 1941, entitled
"After the Emergency - What Then?", the American Federation of Labor outlines the
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"problem of the aftermath". While the demands of defense must be given foremost
consideration today, provision for the post-emergency readjustment must be made
with equal care.
What productive peacetime use can we find for the
machinery and equipment we are installing at great
public cost for defense production?
What peacetime use can be found for thousands of
workers unemployed or intensively trained for defense
work?
This and a number of equally essential problems which
are now receiving little or no attention should be
subjected to searching study without a moment's delay.
The AFL has endorsed the proposal of Senator Wagner to establish a PostEmergency Economic Advisory Commission and suggests a series of measures to
avert mass unemployment and economic collapse at the end of the emergency.
These include incentive taxation, a shift from heavy industries to consumer
goods industries, public works, a post-emorgency housing program, factory
allocation with a view to its maximum peacetime utilization, coordination of
labor supply, careful planning of the post-emergency relief problem, revision
of the social security program, and active participation by the United States
in the economic reconstruction of the post-war world.
American Society of Planning Officials (Chicago, Illinois)
This Society, composed of 850 members of the boards and staffs of public
planing agencies at all the levels of American government, is concerned that
the principles of community planning shall be effectively applied both to the
immediate national defense program and to the ultimate probleme of readjustment.
It held a conference on planning problems, defense, and urban rehabilitation in
Chicago, February 13-14, 1941, and has issued a memorandum to its members on
"National Defense and Community Planning."
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19.
Many communities have master plans for their physical development. The
Society recommends the establishment of close liaison between defense and plan-
ning authorities at regional, state, and local levels so that all major defense
projects may be selected, located, built, and operated with an eye not only to
the requirements of the defense program, but also in a manner consistent with
the master plans and principles of long-term community planning for housing,
transportation public utilities, subdivision design, regional development,
municipal finance, and the like. It urges local planning agencies, meanwhile,
to study the problems which their communities will face when the emergency has
passed, including a determination. of the probable use and level of activity of
the defense plant in normal times, and the changes in the community which are
to be expected in the transition from emergency to normal activities. These
probleme of post-war readjustment at the local level are being studied by
regional, state, and local planning boards throughout the nation. See, for
example, the report of the National Resources Planning Board, Development of
Resources and Stabilization of Employment in the United States, Part II.
Regional Development Plans. January 1941.
The Brookings Institution (Washington, D.C.)
The current publication program of the Brookings Institution contemplates
the projection of its past studies into the reconstruction period so far as
circumstances allow. It is pursuing an "opportunistic" policy and is limited in
its inquiries by the reduced amount of money available for research, the disinclination of donors to finance studies of subjects that seem remote, and the
scarcity of competent personnel. Two members of the Institution's staff - Dr.
Pasvolaky and Dr. Rowe - are on leave in government service. In general, the
Institution has tended in its publications to treat current and past economic
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problems and programs rather than to look very far ahead or venture into the
realm of policy recommendation.
The following studies make up the current Brookings agenda:
Author
Subject
1. A sequel to Industrial Price Policies
Edwin G. Nourse
2. Taxation and retrenchment of federal
Harold G. Moulton and
Charles O. Hardy
expenditures
3. Nazi Europe and World Trade (published
Cleona Lewis
June 11)
4. Highway Finance
Charles Dearing
5. Nazi regimentation of industry
Dr. Hamburger
6. Regulation of Air Pay
7. Relation of corporate structure to the
entrepreneur function
8. Administration of unemployment relief
Francis Spencer
9. The philosophy of democracy
Dr. Millspaugh
Dr. Gordon
Lewis Meriam et al.
*
Commission to Study the Organization of Peace (New York)
This Commission was created in the spring of 1940 under the chairmanship
of Prof. James T. Shotwell. Its formation was sponsored by the American Association of University Women, the American Union for Concerted Peace Efforts, the
Church Peace Union, the League of Nations Association, the National Board of the
YWCA, and the World Citizens Association It is composed of more than seventy
persons, experts in their respective fields. "Its purpose is to study the
reorganization of the world for peace, in preparation for the vast work of reconstruction, which will face the world upon termination of this conflict."
To date, the Commission has published (1) a Preliminary Report which is
an interim statement of fundamental principles and general objectives to serve
as a guide for further work; (2) a series of fifteen radio broadcasts on the
question "Which Way to Lasting Peace?", delivered over the network of the
Columbia Broadcasting System; (3) a course of study based upon the recommendations
of the Commission including a section upon special problems confronting the
United States at present (November 1940) and a bibliography; and (4) a collection
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of monographs which were published in International Conciliation No. 369,
April 1941. Of these monographs, six are especially noteworthy here:
1. Effect of Economic Policies of Postwar (post-1918) Period,
by Ernest Minor Patterson
2. The Economic Organization of Peace, by Eugene Staley.
3. The importance of Antidepression Policy in the Establishment
and Preservation of Sound International Relations, by
Alvin H. Hansen.
4. International Financial Organization by Walter Lichtenstein
5. Unemployment and War, by Spencer Miller, Jr.
6. Population Factors Relating to the Organization of Peace, by
Frank Lorimer.
As the next phase of its work, the Commission is now engaged in the
study of the problems of demobilization and transition immediately following
the cessation of hostilities. On the assumption that the war will end with a
German defeat, the Commission has set up sub-committees to work upon the
following topics:
1. The nature of the Peace Conference
2. Political control in the transition period
3. Economic reconstruction
4. Migration and settlement
5. Health
6. Development of backwardwareas
7. Social welfare
On June 7, 1941, the Commission made public a seven-point program of
general aims or guiding principles for the consideration of the American people.
"We believe," they said, "that the United States should be prepared to assist
from our abundant resources in meeting the post-war emergencies of starvation
and disorder and in restarting the wheels of peaceful industry everywhere.
These efforts should be planned as part of the whole program of reconstruction
and should lead into the permanent organization of peace."
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Council for Democracy (New York)
The Counoil for Demooracy is not primarily a research agency, but an
educational organization which, like many others organized in recent months,
is dedicated to the propagation of an American faith in democracy. It is
seeking to do this in a variety of ways: in a guidebook for local activities,
by conducting a test project in a Massachusetts community, by written memoranda,
furnishing clipsheets to the press, in a "Letter About America," by magazine
articles, newspaper editorials, organization programs, etc. It aots as a
clearing house and headquarters staff for all kinds of work in the realization
and promotion of practical democracy.
Its officers are Raymond Gram Swing, Chairman of the Council; C. D.
Jackson, Chairman of the Board; Ernest Angell, President; C. J. Friedrich,
Chairman of the Executive Committee; Peroy S. Brown, Treasurer; and Evans
Clark, Secretary. The Council is supported by grants from foundations and
private contributions. The Council is contemplating the preparation of a
popular booklet reviewing the development of American thought on post-war
problems and policies.
Council on Foreign Relations (Now York)
The Council is making a number of studies in the field of post-war international economic relations for the State Department. These studies are being
carried on by a special staff at the Council under the general direction of
Mr. Francis P. Miller. However, they are highly confidential in character
and Mr. Miller was not at liberty to disclose any information about them. From
other sources it was learned that they pertain to the foreign economic and
financial policies of the United States vis-a-vis a German economic empire, having
Europe as its base and the world as its sphere of influence, rejecting use of
gold in international exchanges and employing a system of bilateral trade
treaties and clearing agreements.
432
23.
Federal Council of Churches - Commission to Study the Bases of a Just and
Durable Peace (New York)
This Commission was instituted by the Federal Council of Churches (1)
to clarify the mind of our churches regarding the moral, political, and economic
foundations of an enduring peace; (2) to prepare the American people for assum-
ing their appropriate responsibility for the establishment of such a peace;
(3) to maintain contacts with the Study Department of the World Council of
Churches; and (4) to consider the feasibility of assembling representative
gatherings of Christian leaders to mobilize sentiment to bring about a Christian
peace. It is composed of representatives of various religious organizations.
Its first aot was to publish a handbook in April 1941, containing the
principles of a just and durable peace recommended by responsible Christian
leaders and a short resume of ten oonorete proposals for a now world order.
These materials were published for study and discussion by Christian groups.
Its second step was to publish a Memorandum in May 1941, embodying the
preliminary views on certain basic questions of its Committee of Direction. This
Memorandum stresses the economic interdependence of the modern world and the
economic foundations of major world maladjustments. It proposes that Congress
should not take any action affecting the international movement of mon, money,
or materials that might injure other nations without first considering the
effects of such action upon people elsewhere. In this way American Christians
may begin to learn and live the way of peace.
Thus the Commission is taking the religious approach to world peace.
It has no further publications in view, but is planning to organize a series
of study groups and regional conferences in the fall of 1941.
433
24.
Foreign Policy Association (New York)
The FPA has published one report that looks ahead to the world beyond
the war: "Toward A New World Order" by Vera Micheles Dean, May 15, 1941.
This exploratory report is an able summary of "some of the major tasks that
confront the makers of a future peace, as well as some of the principal plans
that have been formulated in Britain, the United States and Germany regarding
ways and means of fulfilling these tasks. It is intended to prepare the
ground for detailed studies of specific problems that the Foreign Policy
Association expects to publish in the future, in the hope that they may prove
of use both to the American public, and to any official group similar to the
House Commission of Inquiry in 1919 which might be appointed by the United
States to prepare material for a peace conference." Mrs. Dean discusses the
philosophy of peace aims, the revolutionary effects of industrialization on
democracy, and planning for post-war controls. She contrasts Nazi and AngloAmerican plans for a new social, political, and economic order and adumbrates
a now imperialism. Her report is well documented with footnote references to
most of the best recent literature on international post-war reconstruction
Although the Foreign Policy Association is not undertaking any other
major post-war studies on its current agenda, it is concerned with raising
for consideration issues which will develop in the post-war era.
National Bureau of Economic Research (New York)
The National Bureau and its collaborators are continuing their extensive
researches in business oyoles, income and capital formation, production and
productivity, prices, financial research, and fiscal policy. These inquiries
are based for the most part upon scientific analysis and interpretation of
statistical data and trends for varying periods of time in the calculable past.
434
24. -A
Their findings no doubt contain weighty implications for present and future
policy, but these do not become overt except in the case of research on prices
and fiscal policy. The Bureau's price research is having immediate utility in
connection with the price controls of the Office of Price Administration and
Civilian Supply, while the research in fiscal policy is pertinent to some of
the most crucial economic issues of the defense and post-defense periods. Although none of the Bureau's current researches is focused directly on post-war
problems, all the phenomena of modern industrial society which it is carefully
measuring, analyzing, and interpreting will be vitally affected by the war and
will call for further exhaustive researches thereafter. A complete account of
the Bureau's work in 1940 and its plans for 1941 will be found in the Twenty-
First Annual Report of the Director of Research
National Planning Association (Washington, D.C.)
Shortly after the outbreak of the second World War, this Association
began to concentrate its attentions on two areas of problems and policies:
immediate defense and post-war reconstruction. It organized a number of groups
or committees to study problems in both areas. These committees have had a
changing membership ranging from 10 to 25 in number, composed for the most
part of government officials, as well as business and labor representatives,
who serve on a personal, voluntary basis. The committees have met from time to
time, and have discussed such problems of our defense economy as the utilization
of industrial resources, expansion of capacity, institution of priorities, and
labor, price, and fiscal policies.
To date, one group has been organized under the chairmanship of Alvin
Hansen to consider post-war problems of employment, investment, and the utiliza-
tion of industrial facilities. In addition, the Association plans to set up
three new groups in the fall of 1941: on social welfare and security, on our
435
25.
foreign economic policy, and on international reconstruction and world order.
Out of these group discussionshave come (1) a number of confidential
Notes summarizing the committee discussions; (2) a series of "planning pam-
phlets" on war and our Latin American trade policy, post-war reconstruction
in Great Britain, labor policy and defense, and German plans for a new economic
order in Europe; and (3) a number of books and reports on radio broadcasting,
population policy, agricultural problems in war and peace, and economic 00operation between the United States and Canada for defense. By-products of the
Association's group studies of defense and post-war problems will continue to
appear from time to time in its "Planning Pamphlets" published ten times a year.
The staff of the National Planning Association consists at present of a
Director, an assistant to the Director, an Editor of the Public Policy Digest,
and two assistants. Its main financial support in recent years has been in the
form of annual grants from the Whitney Foundation. This aid has recently been
augmented by a grant from the Carnegie Corporation to study German plans for the
organization of world resources developed by the geopolitik group under the
leadership of Karl Haushofer, this work to be done by Prof. Hartshorne of the
University of Wisconsin and Prof. Whittlesey of Harvard; by a small grant from
the American Committee for International Studies to prepare a memorandum on
Anglo-American Relations, to be done by Prof. Eric Beecroft of the University
of California.
The Public Policy Digest (formerly the NESPA Guide), monthly periodical
of the Association, is being enlarged to include a section devoted to informa-
tion on post-war reconstruction and national defense. It will note studies in
progress, summarize significant findings, review reports, carry bibliographical
references, and include brief articles.
***
436 26.
New School for Social Research - Peace Research Project (New York)
The New School is carrying on numerous research projects relating to
the national emergency and the post-war period. A brief statement on each
of these projects follows:
Research in Current Problems of War and the Future Peace. Financed by the
Rockefeller Foundation, some of its projects outlined and assigned by the
Advisory Council on National Defense. Started last year and prolonged by
the Foundation. Includes a study of international monetary institutions,
democratic and totalitarian, a theoretical and historical survey of methods
used or suggested to oombine stable employment ("internal equilibrium") and
stable exchange rates ("external equilibrium").
Research on Influence of Income, Income Distribution and Prices on the Demand
for Various Consumers' Goods. Financed by the Rockefeller Foundation. Dr.
Marschak will have one full and one part time assistant. The recent investigation of Consumer Purchases by the National Resources Planning Board makes it
possible to estimate the influence of income changes on total consumption of
various goods; using the data of total national income in various years, this
most important factor of "demand shifts" can be eliminated and the influence
shown on consumption of prices only. This method was outlined by Dr. Marsohak
in Econometrica 1939 and in the Review of Economic Statistics, 1939.
Research in Totalitarian Communication. Financed by the Rookefeller Foundation,
material furnished by the British Broadoasting Corporation. The project covers
German propaganda theory and radio broadcasts from totalitarian countries, home
and foreign transmissions. Two assistants and four Rockefeller Fellows under
the direction of a member of the New School Faculty and a member of the Graduate
Faculty.
437 27.
Research and study Trip in Latin America, financed by the Rocksfeller Foundation
for Dr. Fernando de los Rios in preparation of a book. Dr. de los Rios occupies
a position of commanding prestige throughout Latin America - his articles, even
his occasional lectures make headlines in all the important newspapers of
Central and South America.
He will be accompanied by an economist of the New School Faculty and two
or three students, to make direct contact with our South American neighbors and
study the problems of business and international trade. The same foundation, in
cooperation with Dr. de los Rios, will finance lectures at the New School by a
group of the ablest Latin American scholars in order to begin a systematic
cultural exchange between the two continents in philosophy, art, economics and
politics.
Research on Social and Economic Controls in Germany and Russia. A systematic
and far reaching study financed by the Rockefeller Foundation to determine
how the much vaunted efficiency of totalitarianism really works. The origin,
function and social position of the industrial manager. The legal and economic
position of the worker; the development from collective bargaining to compulsory
labor. The formation of new social strata. Eight research assistants under the
direction of Drs. Feiler, Lowe, Marsohak, Staudinger, Wunderliche
Research on Changes in the American System of Government by the New Deal and
its Administrative Agencies. In preparation. Comparison with similar attempts
in European countries. Continuous study of changes during the national emergency
with reference especially to the constitutional structure of the state. Three
assistants under the direction of Dr. Ascoli.
Housing Research and Education. The first comprehensive educational program
established at the New School in collaboration with the USHA and now in its
second year, has resulted in placing two important men in the field at C.C.N.Y.
400
28.
and at Columbia University. In this time of large scale building programs for
defense, the extent of what can be accomplished in the housing field is limited
only by the effectiveness of those active in it. Under the auspices of the New
School, the effort is being made to set up a similar educational program in
Washington.
Two individual research projects have been conducted at the New School as
an outgrowth of these courses. One has to do with rent regulation which becomes
inevitable in the housing shortage incident to the concentration of defense indus-
tries. The other has to do with financing of public housing.
.
The Peace Research Project of the Graduate Faculty of Political and Social
Science organized under the New School has issued the following publications to
date:
*1. Fritz Lehmann
The Gold Problem. Reprint from Social
*2. Kurt Lachmann
The Franoo-British Bloc. Social Research,
Research, May, 1940.
May, 1940.
3. Jakob Marsohak
Peace Economics. Reprint from Social
4. Arthur Feiler
Worship of Bigness. Reprint from Social
5. Hans Speier
Treachery in War. Reprint from Social
6. Kurt Laohmann
War and Peace Economics of Aviation.
**7. Hans Staudinger
Research, September, 1940.
Research, September, 1940.
Research, September, 1940.
Reprint from Social Research, Nov., 1940.
The Future of Totalitarian Barter Trade.
Reprint from Social Research, Nov., 1940.
8. Frieda Wunderlich
British Labor and the War. Supplement III
9. Kurt Laohmann
The Hermann Goring Works. Reprint from
10. Arthur Feiler
11. Erich Hula
to Social Research.
Social Research, February, 1941.
Conscription of Capital. Reprint from
Social Research, February, 1941.
Control of the Conquered. Reprint from
Social Research, May, 1941.
*Available only in Social Research, May, 1940.
**Available only in Social Research, November, 1940.
439 29.
The New School considers it to be its national duty when the war is
over to help, so far as it can, to restore the world to normal conditions. "But
for this we must have a thorough knowledge of the various countries of the world.
We have in the New School and in the University in Exile, more expert knowledge
of the various countries of the world than any other institution in the country.
We are developing into an Institute of World Economics with the friendliest ap-
proval of other institutions of higher learning and with the sympathetic interest of the U. S. Office of Education."
INDUSTRIAL ORGANIZATIONS
Automobile Manufacturers Association (Now York)
Washington
The AMA as a group is not making any formal or systematic studies of
post-war problems. This seems to be true, indeed, of trade and industrial groups
throughout the country. Personally, however, Mr. Charles R. Weaver, Manager of
the Export Department of the AMA, has been thinking of post-emergency industrial
problems. He is a member of both the National Policy Committee and the Economic
Policy Committee. He believes that domestic and foreign problems and policies
are interdependent and that American national economic policies in the post-war
period must be oriented to the international situation.
*
Manufacturing Chemists Association of the United States
(New York) Washington
What with defense orders from the OPM, increasing British requirements,
the constant readjustment of production programs, and current investigations of
various branches of the industry by the U. S. Department of Justice, the manu-
facturing chemists have little time left to think of post-war problems. The
Association has recently been approached in this connection by the Business
Advisory Council of the U. S. Department of Commerce and its members recognize
the importance of planning ahead. Mr. Watson offered to convey any Fund proposals to his membership.
440
30.
Dupont Company (Wilmington, Del.)
The Dupont people are giving daily thought to the future in accordance
with their customary habit of thinking ahead about now processes, products, and
markets. Their laboratories and engineers are studying the development of syn-
thetics and substitutes; their economists are watching costs and prices; and
their personnel officers are pondering post-war employment problems.
The defense program has had far-reaching effects on the activities of
this company. A year ago 99 per cent of its employees were engaged in nonmilitary production. Today more than 50 per cent are producing military supplies
for Great Britain and the United States. The labor force of the company has
doubled during the past year. But Dupont is not making any money out of its
defense contracts.
Advance industrial planning for D-Day is handicapped by many unknown
factors in the future situation. How long will the defense program continue?
What will government do to industry in the meantime? What will industry do to
itself? What will be the terms of peace? Will private enterprise survive this
war? The defense program was not of industry's making, but the public will hold
industry responsible for discharged workers and ghost towns after the war.
Mr. Lincoln, when interviewed in his office in Wilmington, expressed the
opinion that the Fund would render a real public service if it succeeded only
in formulating a olear statement of our post-war problems and outlining possible
lines of action.
General Electric Company (Schenectady, N.Y.)
In an address before the Edison Electric Institute at Buffalo on June 5,
1941, Mr. D. C. Prince, Manager, Commercial Engineering Department, General
Electric Company, challenged the electric power and manufacturing industry to
"make a plan showing how we think the transition from a war-time to a peacetime economy should be made. The plan should contemplate progressively higher
standards of living brought about by greater power consumption. If it is a
good plan, we should be able to sell it; but we will have to start soon if we
441
31.
expect to have our plan ready in time." Mr. Prince prophecied a marked decrease
in business activity after the war unless we are able to plan a program now that
will enable us to replace the defense effort with productive peacetime activity.
"If we oreate and carry out a plan whereby Government and business can cooperate
in democratic free enterprise for the interests of the whole people, we can
prove the value of free enterprise. Therefore, we must have a plan and carry it
out."
Mr. Prince's address examined the relation of power development to national
income and estimated the probable effect of the defense program on the American
economy as well as the possibilities of renewing the growth in our standard of
living after the ware He estimated that our national output should be $28 billions
greater by 1946 than in 1940 in order to raise the average of 18 million families
to the $1,500 level, provide for population increase, for families above the
$1,500 level, for national security, and for new plant and equipment. A national
income of $110 billions in 1946 would require the full employment of 57,000,000
people for 43 hours a week or 123 billion man-hours.
In a paper admirably documented with a series of nine charts, Mr. Prince
argued that "if the Nation can produce 110 billion dollars' worth of product for
war, it can do it for peace; but it will have to work almost as many hours to
do
it.... Our partnership of power and manufacture will not have to create the
1946 economy out of whole oloth... Classical economists supposed that such
things were automatically taken care of by the laws of supply and demand. We
know to our sorrow that either by nature or due to human interference our machine
age is unstable and does not regulate itself. The problem is to decide as between Government and Business who will do the regulating."
44%
32.
National Association of Manufacturers (New York)
The NAM is not planning to conduct any formal studies in the post-war
field. It is not equipped or staffed to carry on intensive research. It
recently sent a questionaire to members of the American Economic Associa-
tion, polling their sentiment on post-war policies and programs. A summary
of the replies received with typical quotations is being published by the
NAM in the form of an eighty-page pamphlet. Mr. Gebhardt hoped that the
Fund would make a study of post-war problems and offered his cooperation.
National Industrial Conference Board (New York)
The Conference Board has thought about post-war problems, but has
not yet developed a study program in this field. Its special interest would
be in the role of the individual enterprise and industry in post-war readjustment. Later on the Board may study this aspect of the matter, but the
efforts of private enterprise will be conditioned, so it is believed, in
incalculable ways by governmental measures now and in the post-war period
and by international developments. Talk of post-war industrial planning is
in the business air, but it is still vague and indefinite. Mr. Kuvin hoped
that the Fund would sink a shaft in the post-war field and indicated that
the Conference Board would be glad to cooperate.
U. S. Chamber of Commerce (Washington, D.C.)
According to its Director of Research, Mr. Redpath, the U. 8. Chamber
of Commerce is focussing its attention upon current developments affecting
industry and commerce in the United States. It is concerned with problems
of national defense, employment relations, federal finance, prices, merchant
marine, petroleum, foreign trade, taxation, etc. See the Report of its
443
33.
Resolutions Committee to the Twenty-Ninth Annual Meeting, May 1, 1941.
While the Chamber peers as far as it can into the future, it does not now
contemplate any systematic research into post-war problems.
U. S. Steel Corporation (New York)
Mr. Bradford Smith, Economist of the Corporation, offered an over-
all interpretation of the present situation in which he said that although
the steel industry was patriotic to a man in complying with government
demands, under existing conditions of control and future prospects, it was
unable to make preparations for the post-emergency period. Existing
government policies would condition the whole post-war economy and render
it futile for industry to make advance plans for D-Day. Mr. Smith personally has made a study of the problems which may confront the United
States after the war growing out of the possible increased influence of
Germany in world affairs and the wide extension of barter methods in
international trade. The results of this study condensed in a memorandum,
"Foreign Trade After the War" have been given limited confidential circulation among interested persons.
INTERNATIONAL ECONOMIC RESEARCH HAVING DOMESTIC REPERCUSSIONS
Many private agencies are carrying on post-war research in the field
of international economic relations that impinges upon the domestic interests of the Twentieth Century Fund. Most of these agencies and their
current research programs are reported in News Letter No. II of the American
Committee for International Studies, dated April 10, 1941. No attempt is
made in this Memorandum to cover this aspect of the subject since it has
already been competently covered by the American Committee. This Committee
444
34.
is planning to hold a conference in New England in September 1941, on "North
Atlantic Relations." The conference will deal with Anglo-American and AngloCanadian relations and will emphasize the post-war situation, the transition
from war to peace, the European relief problem, etc.
The leading research agencies in this international field are the
Foreign Policy Association, the Commission to Study the Organization of
Peace, the Institute of Pacific Relations, the New School for Social Research, the World Peace Foundation, the National Policy Committee, the
International Labour Organization, the Economic and Financial Section of
the League of Nations, the Council on Foreign Relations, the Harvard-
Radcliffe Bureau of International Research, and the University of California
Group under Professor J. B. Condliffe.
National Policy Committee (Washington, D.C.)
This Committee during recent years has conducted conferences and
discussion groups on various current social and economic problems, and has
published the results in pamphlet form. Attention is invited to three of
these Special Committee Memoranda which are concerned with post-war problems :
No. 9 - Steps Toward a Durable Peace; No. 11 - Implications to the United
States of a German Victory; No. 13 - What Are We Fighting For? (in press);
also "Memorandum on Economic Problems in the Change from a War- to a Peace-
time Economy" prepared by Dr. Frank Carlton of the Cleveland Policy Committee,
published in NPC Occasional News Letter for June 10, 1941,
Canadian-American Economic Committee (Washington, D.C.)
The appointment of this Committee so-called, was announced on
June 17, 1941. They are designed to parallel the Canadian-American Defense
Board in the field of defense and post-defense economic cooperation. The
American members are Alvin H. Hansen, Chairman; William L. Batt (OPM),
Dana Durand (Tariff Commission), and Harry White (Treasury). They are
445
35.
being serviced by the International Finance Section of the Division of
Research and Statistics of the Federal Reserve Board.
League of Nations: Economic and Financial Section (Princeton, N.J.)
This Section is now located at the Institute for Advanced Study in
Princeton, New Jersey. Its fields of interest and inquiry are economic,
financial, and demographic. Its studies are national and international
in scope, primarily the latter. Its director, Alexander Loveday, has four
guiding principles in his work: (1) that it is not possible to do any
elaborate planning or blueprinting of the future; (2) that we must find
out what went wrong last time, 1. ... learn the lessons of the last twenty
years; (3) that the dynamic demographic and economic forces that are operat-
ing in the world today will be accentuated by the war; and (4) that we must
collect and collate the essential facts on (2) and (3) in preparing for the
future. Thus his main emphasis is upon historical research in international
economic and population problems.
Mr. Loveday believes that governments may lesson the risk of a major
post-war depression by abstaining from creating avoidable strains on trade,
on post-war commercial relations, and the balances of international payments;
by having plans for public works ready: and by establishing the machinery
for synchronized and constructive, joint, anti-depression policies.
In a confidential memorandum Mr. Loveday has suggested a series of
short studies on ten types of post-war problems:
Commercial policy
Raw materials
Demographic questions
Economic depressions
440
36.
446
Relief and reconstruction
Currency problems
International capital movements and national capital supply
Debt: national and international
Agriculture and nutrition
Adjustment to peace conditions
Some of these studies are being carried on in Princeton or Geneva. A few
of them have been finished and printed. These documents will not be pub-
lished, but they will be made available to the appropriate bodies when
the time comes.
...
447
JAN 14 1942
My dear Mr. President:
I an enclosing report on our experts
to some selected countries during the week
ending December 27, 1941.
Faithfully,
Signed) 5. 124
Secretary of the Treasury
The President,
The White House.
Enclosure
Vina Secur Service 11:40
nmc
Copies comulites office
1/1/42
448
January S, 1942
Exporte to Russia, China, Burus, Hong Kong, Japan, France
and other blocked countries, as reported to the Treasury
Department during the week ending December 27. 1941.
1. Exports to Russia
Exports to Russia as reported to the Treasury during the
week ending December 27, 1941 amounted to about $1,800,000, the
lowest figure for any single week since October 18. The principal
helf of the total amount. (See Appendix C.)
item 185 motor trucks and chassis, which accounted for about one-
2. Exports to China, Burna and Hong Kone
Exports to Free Onina were valued at only $1,000, the lowest
total for any single week since the beginning of September.
(See Appendix D.) Exports to Burns, however, amounted to $196,000
of which printing ink and motor trucks and chassis were the principal items. A large percentage of the exports to Burea are for
reexport to Free China. (See Appendix F.)
Exp rts to Occupied China amounted to $36,000.(See Appendix E.)
No exports to Hong Kong were reported during the week under
review.
3. Exports to Japan
No experts to Japan were reported during the ree's under review.
4. Exporte to France
No exports to France were reported during the week ending
December 27, 1941.
5. Exports to other blooked countries
Exports to other blocked countries are given in Appendix A.
STRISTLY CONFIDENTIAL
449
SUMMARY OF UNITED STATES
DOMESTIC EXPORTS TO SELECTED COUNTRIES
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED
DURING THE PERIOD INDICATED 1/
July 28 to December 27, 1941
(In thousands of dollars)
July 28
Week ended
Dec. 13
December 20
Week ended
December 27
Domestic Exports
$70,146
$ 4,580
8 1,829
$76,555
Occupied China
11,262
12
Free China
28,222
111
to
0. S. S. R.
Japan
1,870 2
Burma 3/
6,798
France w
coupied France
-
8
Free France
5/
o4
-
1,870
196
7,002
5/
112
Switserland
5,017
42
10,397
703
346
10
Treasury Department, Division of Monetary Research
6
-
-
2,217
French Indochina
28,334
1
-
Spain
Sweden
11,310
36
-
-
6
2
Total
2
.4
2,329
1
414
-
5,060
11,514
356
December 30, 1941.
V Many of the export declarations are received with a lag of several days or more.
Therefore this compilation does not accurately represent the actual shipment of
a particular week. The longer the period covered, the closer will these figures
come to Department of Commerce revised figures.
2/ Of this total $1,864 thousand was reported from July 28 to August 23, inclusive,
and shipped prior to freesing orders.
Domestic exports from August 23 through week ending Dec. 6, amounted to $6,106.
From September 11, 1941 to date - It is presumed that a large percentage of material listed here, consigned to Burma, is destined for Free China.
Includes both occupied and from France through week ending October 4, 1941. Occupied and Free France separated thereafter.
Less than $500.
STRISTLY CONFIDENTIAL
12/30/41
Exporte from the U.S. to China, Burns, Hong Kong, Japan and U.S.S.R.
reported to the Treasury Department, July 8, 1941 - December 27, 1941
(Thousands of Dollars) 1
Exports to China
Total
To Japanese To Chinese
controlled
ports
July 28 - Aug.
Aug.
2
4 - Aug. 9
Aug. 11 - Aug. 16
Aug. 18 - Aug. 23
Aug. 25 - Aug. 30
Sept. 2 - Sent. 6
Sept. 8 - Sept.13
Sept.15 - Sent.20
Sept.22 - Sept.27
Sept.29 - Oct.
4
Oct. 6 - Oct. 11
Oct. 13 - Oct. 18
Oct. 20 - Oct. 25
Oct. 27 - Nov. 1
Nov. 3 - Nov. 8
Nov. 10 - Nov. 15
Nov. 17 - Nov. 22
Nov. 24 - Nov. 29
Dec. 1 - Dec.
Dec. 8 - Dec. 13
6
Dec. 15 - Dec. 20
Dec. 22 - Dec. 27
Total
937
542
2,794
1,278
2,794
1,352
1,350
736
897
735
969
controlled
ports
757
462
156
352
1,305
80
5,864
1,701
3,359
552
267
399
438
164
158
473
120
852
61
123
12
37
36
42,733
11,796
654
983
235
234
Exports
to
Japan
U.S.S.R
1,657
4,523
159
551
42
986
6
742
634
1
3,978
688
Hong Kong
2
204
3,025
Burma 3
Exports
to
309
2,281 2
3,522 2
5,210
to
395
693
1,836
3,009
Exports
to
-
3,038 2
272
668
Exports
-
2,735
1,023
4,280
1,225
449
684
456
389
810
297
5,312
1,157
1,233
5
35
584
269
403
1,243
4,772
1,672
2,851
58
342
624
283
88
303
-
1,228
1,021
600
-
3,239
1,364
1,325
-
791
64
-
-
18
-
-
-
-
4,580
-
-
1,829
110
2,337
111
1
30,937
00
196
887
11,629
-
5,217
-
752
-
2,333
-
323
6,845
-
-
-
-
5
1,869
1,924
5,623
4,484
4,552
2,677
3,581
2,436
3,609
12,040
76,903
1. These figures are in part taken from copies of shipping manifests.
Figures for exports to Free China during there weeks include exports to Rangoon which are
presumed to be destined for Free China.
3. It 18 presumed that a large percentage of exporte to Burns are destined for Free China.
2.
Treasury Department, Division of Monetary Research
January 6, 1942
451
APPENDIX 0
Principal Exporte from U.S. to U.S.S.R.
as reported to the Treasury Department
during the week ending December 27, 1941
(Thousands of Dollars)
TOTAL EXPORTS
S 1,829
Principal Items:
Motor trucks and chassis
Alkylate (Petroleus blending agent)
Barbed wire
Refined copper
Bress and bronze plates and sheets
Anti-knock compound
Aluminum plates, sheets, bars,
stripe and rods
910
196
132
127
91
77
71
Treasury Department, Division of Monetary Research January 6, 1942
STRISTLY CONFIDENTIAL
452
APPENDIX D
Principal Exports from U.S. to Free China
as reported to the Treasury Department
during the week ending December 27, 1941
(Thousands of Dollars)
TOTAL EXPORTS TO FREE CHINA
$1
Principal Item:
Auto replacement parts
1
Treasury Department, Division of Monetary Research January 6, 1942
STRICTLY CONFIDENTIAL
453
APPENDIX E
Principal Exports from U.S. to Occupied
China as reported to the Treasury Department
during the week ending December 27, 1941
(Thousands of Dollars)
TOTAL EXPORTS TO OCCUPIED CHINA
$ 36
Principal Items:
Cigarettes
Upper leather
8
Glucose
5
Sardines
2
Fruits and preparations
Sole leather
Motion-picture film
4
I
3
Medicinal preparations
1
Treasury Department, Division of Monetary Research January 6, 1942
STRICTLY CONFIDENTIAL
454
APPENDIX F
Principal Exports from U. S. to Burna
as reported to the Treasury Department
during the week ending December 27, 1941
(Thousands of Dollars)
TOTAL EXPORTS
$196
Principal Items:
Printing ink
Motor trucks and chassis
Condensed and evaporated milk
Crude sulphur
Auto assembly parts
Landplanes (partial shipment)
Medicinal preparations
Petroleum well drilling apparatus
Auto replacement parts
59kg
46
30
11
5
2
2
STRICTLY CONFIDENTIAL
mary Department, Division of Monetary Research
-ef 1/5/42
January 5, 1942
455
:
JAN 14 1942
my dear Mr. Secretary:
I - enclosing copy of report on our
exports to - selected countries during
the week ending December 27, 1941.
sincerely yours,
(Signed) 1. Horgentham. Jr.
Secretary of the Treasury
the Reservable,
the Secretary of State,
Washington, D. C.
Enclosure
n.m.c. By Messenger Vearh 11:45
1/1/42
capies is white's office
Ret to Secy's office
456
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE January 14, 1942
Secretary Morgenthau
Mr. White
TO
FROM
Subject: Exports to Russia, China, Burma, Hong Kong, Japan,
France and other blocked countries, as reported to
the Treasury Department during the week ending
January 3, 1942.
1. Exports to Russia
Exports to Russia as reported to the Treasury during the
week ending January 3, 1942 amounted to about $4,000,000 as
compared with approximately $1,800,000 during the previous week.
Military tanks and parts accounted for more than one-half of
the total amount. (See Appendix C.)
2. Exports to China, Burma and Hong Kong
Exports to Free China amounted to $35,000. (See Appendix D.)
Exports to Burma amounted to only $2,000. (See Appendix E.)
No exports to Occupied China or Hong Kong were reported
during the week under review.
3. Exports to Japan
No exports to Japan were reported during the week under
review.
4. Exports to France
No exports to France were reported during the week ending
January 3, 1942.
5. Exports to other blocked countries
Exports to other blocked countries are given in Appendix A.
January 10, 1942
Treasury Department, Division of Monetary Research
3. It is presumed that a large percentage of exports to Burma are destined for Free China.
presumed to be destined for Free China.
Figures for exports to Free China during these weeks include exports to Rangoon which are
2.
1. These figures are in part taken from copies of shipping manifests.
80,896
3,993
1,869
1,829
4,580
11,629
-
-
-
-
-
-
-
-
3,581
1,325
-
2,677
-
600
303
35
11,796
35
36
37
8
111
12
123
18
2,337
688
3,025
64
791
852
1,364
1,021
61
1,228
3,359
1,701
3,009
1,305
1
3,239
88
2,851
283
624
342
58
-
1,243
1,672
4,772
403
269
584
35
5
-
1,233
1,157
5,312
297
810
684
449
1,225
80
110
352
156
757
693
735
-
323
-
2,333
-
752
-
5,217
4,280
1,023
2,735
6
986
551
159
389
456
634
742
234
235
983
4,523
1,657
654
U.S.S.R.
Japan
-
-
42
to
to
Exports
Exports
3,822 2
2,281 2
395
204
1
2
309
Hong Kong
to
Exports
Burma 3
to
Exports
ports
controlled
To Chinese
Total
42,768
-
120
473
158
164
438
399
267
552
5
5,623
1,924
6,845
2
196
-
4,552
4,484
30,972
-
-
12,040
3,609
2,436
5,889
1,836
5,210
668
272
5,864
462
3,978
3,038 2
897
736
1,350
1,352
969
2,794
1,278
2,794
542
937
Dec. 29 - Jan. 3
Dec. 22 - Dec. 27
Dec. 15 - Dec. 20
Dec. 8 - Dec. 13
Dec. 1 - Dec.
6
Nov. 24 - Nov. 29
Nov. 17 - Nov. 22
Nov. 10 - Nov. 15
Nov. 3 - Nov. 8
Oct. 27 - Nov.
1
Oct. 20 - Oct. 25
Oct. 13 - Oct. 18
Oct. 6 - Oct. 11
Sept.29 - Oct.
Sept.22 - Sept.27
Sept.15 - Sept.20
Sept. 8 - Sept.13
4
Sept. 2 - Sept. 6
Aug. 25 - Aug. 30
Aug. 18 - Aug. 23
Aug. 11 - Aug. 16
Aug. 4 - Aug. 9
July 28 - Aug. 2
ports
controlled
To Japanese
Exports to China
(Thousands of Dollars) 1,
Total
reported to the Treasury Department, July 28, 1941 - January 3, 1942.
Exports from the U.S. to China, Burma, Hong Kong, Japan and U.S.S.R. as
458
APPENDIX C
Principal Exports from U.S. to U.S.S.R.
as reported to the Treasury Department
during the week ending January 3, 1942.
(Thousands of Dollars)
Total Exports
$ 3,993
Principal Items:
Military tanks and parts
2,054
Motor trucks and chassis
498
205
120
107
101
Lathes
Wheels of artificial abrasives
Explosive shells and projectiles
Barbed wire
Diesel engines
Brass and bronze plates and sheets
Thread-cutting and automatic screw machines
Forging machinery and parts
Drilling Machines
Teasury Department, Division of Monetary Research
98
97
94
73
73
January 9, 1942
459
APPENDIX D
Principal Exports from U.S. to Free China
as reported to the Treasury Department
during the week ending January 3, 1942.
(Thousands of Dollars)
Total Exports to Free China
$ 35
Principal Item:
Landplanes (partial shipment)
Treasury Department, Division of Monetary Research
35
January 9, 1942
460
APPENDIX E
Principal Exports from U.S. to Burma
as reported to the Treasury Department
during the week ending January 3, 1942.
(Thousands of Dollars)
Total Exports
$2
Principal Item:
Paraffin wax
2
Treasury Department, Division of Monetary Research January 10, 1942
461
SUMMARY OF UNITED STATES
DOMESTIC EXPORTS TO SELECTED COUNTRIES
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED
DURING THE PERIOD INDICATED 1
July 28, 1941 to January 3, 1942
(In thousands of dollars)
July 28
Week ended
Dec. 20
Week ended
December 27
January 3
U. S. S. R.
$74,726
$ 1,829
Free China
28,333
Burma 2
6,806
to
France 3
28,369
7,002
4
-
-
2
Unoccupied France
2,329
Switzerland
5,059
2
04
Spain
Portugal
35
6
Occupied France
Sweden
$80,548
196
-
Domestic Exports
$ 3,993
1
6
Total
-
-
.4
-
4
2,329
1
1
5,061
11,100
414
1
11,515
4,450
22
Treasury Department, Division of Monetary Research
16
4,488
January 6, 1942.
1 Many of the export declarations are received with a lag of several days or more.
Therefore this compilation does not accurately represent the actual shipment of
a particular week. The longer the period covered, the closer will these figures
come to Department of Commerce revised figures.
2 From September 11, 1941 to date - it is presumed that a large percentage of material listed here, consigned to Burma, is destined for Free China.
Includes both occupied and unoccupied France through week ending October 4, 1941.
Occupied and Unoccupied France separated thereafter.
Less than $500.
3
462
JAN 14 1942
My dear Mr. Smith:
This will acknowledge receipt of your letter
of January 3rd, concerning the possible suspension
for the duration of the WR." of certain statistical
series hitherto released at regular intervals.
Ve have come to no conclusions on this matter.
but I will let you know as soon FIR possible what
conclusions we reach. In the meantime, if you
should care to have someone from the Treasury at n
roundtable conference, please let he know and :
shall be glad to send n representative.
Sincerely,
(Signes) 0. Corgantbau Jr.
Secretary of the Treasury
Honorable Harold D. Smith,
Director. Bureau of the Budget.
Executive office of the President.
Washington, D. C.
n.m.c.
fill
DHM./r./DMB
1/6/42
EXECUTIVE OFFICE OF THE PRESIDENT
BUREAU OF THE BUDGET
WASHINGTON D.C.
JAN 3 1942
My dear Mr. Secretary:
It has been brought to my attention that several government agencies have suspended for the duration of the MLP publication
of statistical series hitherto released at regular intervals. This
raises an important problem of policy. It is necessary to step
publication of statistics which my reveal information useful to the
enemy, but indiscriminate stoppage may deprive the public of infor-
nation to which it is entitled.
I believe that it is of the utmost importance to arrange
for a coordinated program respecting ourtailment of information for
general release. Accordingly, I have requested the Division of
Statistical Standards of this Bureau to arrange conferences with
representatives of the agencies concerned to obtain their views and
advice upon the several problems involved.
In the meantime, I should like to know whether any COB-
sideration is being given to this problem in your agency and if so
whether conclusions have been reached as to general types of sta-
tistics or particular series which should be withhold from publication for the duration of the var. I should appreciate it if you
would address an early reply to Mr. Stuart A. Rice, Assistant
Director in Charge of Statistical Standards,
Very truly yours,
The Honorable Henry Morgenthan, Jr.
The Secretary of the Treasury
Treasury Department
Washington, D. O.
464
JAN 14 1942
Dear Bill:
I am replying to your letter of January 5,
in which you asked me to name someone to represent
the Treasury Department on an interdepartmental
committee which is to consider the problem of ob-
taining needed publications from foreign countries.
I am designating for this purpose Mr. W. L.
Ullmann of the Division of Monetary Research of the
Treasury Department.
Sincerely,
(Signal) Houry
Secretary of the Treasury.
Colonel William J. Donovan,
The Coordinator of Information,
Washington, D.C.
Veach
HEG/mah
1-13-42
Rv Messeoper
//: to
File Thompson
COORDINATOR OF INFORMATION
165
WASHINGTON, D.C.
January 5, 1942
Honorable Henry Morgenthau
Secretary of the Treasury
Washington, D. C.
dear Mr. Secretary:
The declaration of war by Germany and Italy has
greatly accentuated the problem of securing from Continental Europe and other places, newspapers, periodicals,
official publications and other intelligence of this
type. So long as individual agencies of the Government
make separate efforts to provide themselves with such
material, there is apt to be a great deal of confusion
and duplication.
In order to avoid wasted effort, I requested the
Director of Research in this organization, Dr. William L.
Langer, to organize a group of men from various departments who are interested in dealing with it. Mr. Samuel
Klaus of your office sat informally in this conference
and contributed generously of his advice.
On December 22, 1941, the President approved the
establishment of a formal Interdepartmental Committee
466
to serve as a general clearing house for all questions
connected with the gathering of materials such as described above. The Department of State, the Treasury,
the Department of Commerce, Library of Congress, Army
and Navy, should be represented on this committee, and
others might well be added as seems desirable.
I should, therefore, very much appreciate ft 11,
you would name someone from your office to represent your
department's interests in this activity. Since the whole
subject is one of some urgency and importance, word from
you at an early date would be helpful.
Sincerely,
have
William 3. Donovan
Miss Chauncey
TREASURY DEPARTMENT
467
INTER-OFFICE COMMUNICATION
DATE January 14. 1942
TO
Secretary Morgenthau
FROM
Mr. Dietrich
TRICTLY CONFIDENTIAL
Official sales of British-owned dollar securities under the vesting order
effective February 19, 1940:
$ Proceeds of
Shares Sold
Jen.
5
6
7
8
9
10
$ Proceeds of
Bonds Sold
Nil
Nil
Total
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
24
Nil
24
281,856,896
37,437,648
310,294,544
281,856,920
37,437,648
319,294,568
24
Nil
Nil
24
Sales from
Feb. 22. 1940 to
Jan. 3. 1942
Sales from
Feb. 22, 1940 to
Jan. 10. 1942
S proceeds of non-vested securities sold
Dec. 29. 1041 - Jan. 3. 1942
S proceeds of non-vested securities sold
Sept. 1. 1939 - Dec. 27, 1941
proceeds of non-vested securities sold
Sept. 1, 1939 - Jen. 3. 1942
319,294,568
200,000
240,800,000
241,000,000
241,000,000
560,294,568
g
GRAND TOTAL
Jen. 7. 1942 - Cash Dividend on 156 Shares
$
Jen. 9. 1942 - Partial Liquidating Dividend
9 Units sold from Aug. 18. 1941 - Jan. 10. 1942 for
11 Sharee Stock Dividend sold Aug. 18, 1941 - Jan. 10. 1942 for
61
125
42
123
10
170 Rights sold on Jan. 8. 1942 for
55,828 Rights sold from July 24. 1941 - Jan. 8. 1942 for $102,928
56,007 Rights sold from July 24. 1041 - Jan. 10. 1942 for
&
$102,938
$
Miss Chauncey
TREASURY DEPARTMENT
468
INTER-OFFICE COMMUNICATION
DATE January 14, 1942
TO
Secretary Morgenthau
FROM
Mr. Dietrich
STRICTLY CONFIDENTIAL
Official sales of British-owned dollar securities under the vesting order
effective February 19, 1940:
$ Proceeds of Nominal Value $ Proceeds of
No. of Shares
Nil
Nil
Jan. 5
6
of Bonds Sold
Shares Sold
Sold
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
24
Nil
Nil
281,856,896
45,610,016
37,437,648
281,856,920
45,610,016
37,437,648
Nil
Nil
2
24
7
8
9
10
Nil
Nil
Nil
2
Bonds Sold
Sales from
Feb. 22, 1940 to
9,847,581-3/18
Jan. 3, 1942
Sales from
Feb. 22, 1940 to
9,847,583-3/18
Jan. 3, 1942
A
JAN
Dear Dr. Clark:
Thank you for the information which you submitted on Canada's
dollar exchange position and on the effects of the end-Lease
decision not to purchase completed defense articles in Canada for
transfer to other parts of the British Empire.
We have studied the data and have discussed the problem with
officials of the Land-Lease Administration. e recognize that
this decision of the Lend-Lease authorities will curtail Canada's
receipts of U. S. dollars, and we also note that, partly because
of it, you estimate a drop in Canada's exchange assets during the
current year, more particularly during the last six months. But
in view of the fact that the resultant adverse effects upon anada's
dollar exchange position will not be immediately of large magnitude,
it does not seen that the Treasury would be warranted at this time
in pressing the Land-Lease Administration to reverse its decision.
AS you know, the Land-Lease position is based on considerations of
policy with ranifications beyond the present problem.
I am anxious that the exchange problem shall not stand in the
way of maximum war production. But : take it that the goods in
question will be produced and used to the best advantage, whether
payment is in United States dollars or some other form.
This decision is based upon the present outlook. if the actual
experience in the next short period proves to be different from your
estimates, and Canada's exchange position worsened substantially,
would want to reconsider the matter. Therefore, hope that you will
keep me informed of actual developments and that you will feel free
to raise this and other questions relating to Canada's dollar position
when you think it necessary.
Sincerely yours,
(Mezed) to Margonthese Jr.
ecretary of the Treasury
Dr. S. C. Clark,
Deputy Minister of Finance,
Department of Finance,
ttawa, Canada,
1/6/42
the
470
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
DATE:
NO.:
American Embassy, Rio de Janeiro, Brazil
January 14, 1942, 9 P.M.
9, Section One
This message is in strict confidence from Mr. White
for the Secretary of the Treasury.
The wish was expressed by Mr. Welles to present a
resolution, similar to the attached draft, on International
stabilization, if you and anyone else you feel necessary
approve the presentation or the resolution.
It is my sug estion that if you desire the presentation of the draft at this Conference you have Berle and
perhaps Ecoles approve it. Since there is some importance
attached to this matter and the eventual calling or a
conference of associated and united nations is implied,
you may even want the draft or merely the idea approved
by the President before you recommend it to be submitted
here. The statement was made by Mr. Welles that the idea
of a stabilization fund for the period after the was has
in general been approved by the President, but Welles did
known to
not indicate that the specific proposal was
the President.
The pertinent rules of the conference require
unfortunately that resolutions must be submitted by
noon
-
1
-2-
471
noon on January 16 (Friday). Since it was first necessary for me to discuss the idea in general terms with
some of the financial representatives of the other American
republica in order to ascertain the prospects of favorable
reception at the present Conference I have not been able to
send you this message sooner. For rather obvious reasons
the general idea was enthusiastically received by those
with whom I have discussed the matter.
In view of the fact that the resolution only calls for
participation in E conference which would be called to
consider the establishment of a fund and in view of the very
general terms in which the resolution is stated, the clearance of the phraseology of the draft should not take very
long. It is of course possible that the President may consider some other time more appropriate for the initiation
of the idea. That question has been discussed with Mr.
Welles and he decided that it would be all right for the
United States Government to submit it here if you approve
the resolution. It is possible that you will feel that there
is not time to clear the matter In a way which would be
satisfactory to you. If this is the case it is probably
better that some other time be selected to advance a proposal
for the establishment of a stabilization fund. In the opinion
of Mr. Welles the submission of the resolution here would be
very helpful but postponement is to be preferred to difficulties. A reply before Friday noon would be appreciated whatever your decision may be.
WELLES
c
0
472
P
Y
TRB
GRAY
Rio de Janeiro
Dated January 14, 1942
Rec'd 10:35 p.m.
Secretary of State,
Washington.
TRIPLE PRIORITY
9, January 14, 9 p.m., (SECTION TWO).
"Resolution on the stabilisation fund of the united
and associated nations. Whereas, one. In the attainment
of the economic objectives of the Atlantic Charter the
more effective mobilisation of foreign exchange resources
is of indisputable importance and such mobilisation should
be of assistance in the war of freedom and liberation which
the united nations are conducting and for the defense of
other free and sovereign nations associated with them; and
Two. The united nations and other nations associated
with then can cooperate in creating an organisation to pronote stability in foreign exchange rates, encourage the
international movement of productive capital, facilitate
the reduction of artificial barriers to the free movement
of goods, help correct the maldisposition of gold, strengthen
monetary systems and facilitate the settlement of public and
private international debts:
473
The third meeting of consultation of the Ministers
of Foreign Affairs of the American Republics resolves:
One. To recement that the Governments of the
American Reyublice participate with the Governments of
the united nations in a special Conference of Ministers
of Finance or their representatives, to be called for the
purpose of considering the establishment of a stabilisation
fund of the united and associated nations:
Two. To recommend that participation in the conference
shall be open to all nations that subscribe to the objectives
of the Atlantic Charter
Three. To recommend that the conference, in considering
the establishment of such a fund, shall formulate the plan
of organisation, powers and resources necessary to the
proper functioning of the fund, shall determine the conditions
requisite to participation in the fund, and shall propose principles
to guide the fund in its operation; Four. To recommend that
among the conditions requisite to participation in the fund
there be included is the deliberations of the conference the
following: cooperation in adopting harmonious policies looking
toward the gradual adoption of free foreign exchanges with
reasonable stability in foreign exchange rates, the removal of
arbitrary and discriminatory restrictions on international transactions, and the maintenance of monetary policies that avoid
serious inflation or deflation."
(END OF MESSAGE).
WELLES
NIM
Deptibj:1-16-42
474
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE January 14, 1942
TO
Secretary Morgenthau
CONEIDENTIAL
FROM Mr. Dietrich
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£253,000
£ 38,000
Of the sterling purchased, £170,000 were bought by a grain house.
Open market sterling remained at 4.03-3/4. and there were no reported
transactions.
The Canadian dollar, which closed at a discount of 11-5/8% last night.
improved to a final quotation of 11-1/2% today.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
Brazilian milreis (free)
Colombian peso
Mexican peso
Uruguayan peso (free)
Venezuelan bolivar
Cuban peso
.2365
.0516
.5775
.2065
.5250
.2675
Par
The Federal Reserve Bank of New York purchased 180,000 Swedish kronor in
New York at the rate of .2384-1/2 for account of the Centrel Bank of the Uruguayan
Republic. According to the latter, these kronor are needed to pay for imports into
Uruguay.
There were no gold transactions consummated by us today.
No new gold engagements were reported.
In London, spot and forward silver were again fixed at 23-1/2d and 23-9/16d,
respectively, equivalent to 42.67 and 42.78d.
The Treasury's purchase price for foreign silver was unchanged at 35+ Handy
and Harman's settlement price for foreign silver was also unchanged at 35-1/8
We made no purchases of silver today.
475
BRITISH EMBASSY
WASHINGTON D.C.
PERSONAL AND
January 14th, 1942
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,
Halfar
The Honourable
Henry Morgenthau, Jr.,
United States Treasury,
Washington, D.C.
Copy No.
476
BRITISH HOST SECRET
(U.S. SECRET)
OPTEL No. 16
Following is supplementary resume of operational events covering
period first to eighth January.
1, NAVAL
The enemy succeeded in pushing through a convoy of nine ships
into TRIPOLI largely under cover of bad weather and heavy escort. Two Dutch submarines are overdue at SINGAPORE and SOURABAYA respectively, There was little
activity by enemy submarines though it appears that several are moving westward
in the Atlantic and others are patrolling in the AZORES area. Shipping losses
were light but enemy minelaying persists off the East Coast. Merchant shipping
losses during December reported to date were 262,847 tons which include 143,160
tons sunk in the Pacific Trade. During the week ending 7/1 886 ships were convoyed. Imports into the U.K. by ships in convoy during the week ending 3/1 were
648,000 tons which included 271,000 tons oil imports, Some mines are reported to
have been swept off SOURABAYA.
2. MILITARY
LIBYA. BARDIA was captured by a force consisting mainly of South
Africans, The higher direction of the operation being in the hands of Major
General Willoughby=Norrie, In western CYRENAICA pressure was kept up against the
enemy by the comparatively small force which could be maintained in the forward
area. The enemy however succeeded in countering our attempt to envelop his
southern flank, Strenuous efforts are being made to build up a supply organisation capable of maintaining a strong force, As soon as the port of BURGHAZI can
be fully used our administrative situation in the foremost areas should be greatly
relieved.
MATAYA. The Japanese are pushing their offensive strenuously on
all fronts thoug! not without considerable losses. Reinforcements of one Indian
Infantry Brigade have so far arrived at SINGAPORE. The Trans-Pacific Air reinfor
ment route via HAITAIT-CANTON ISLAND-FIJI-IES CALEDONIA-AUSTRALIA was onaned on 28
12.
3. AIR OPERATIONS
PREST was bombed on five nights without any known
definite reautio being obtaine against the Gernan warships, A totel of 514 tons
of H,E. and 24,000 incendiaries were dropped by bomber consend, Throu bembers
were lost during the week. It is estimated that 15,000 tons of enemy shipping mer
damaged by our aircraft.
477
-MEDITERRANEAN. Our American Kittyhank fighters made a success-
ful debut. Blenheims co-operated in the capture of BARDIA and were employed
later in bombarding the HALFAYA defences, Enemy aircraft showed increased activity against our sea bases in CYRENAICA.
MALTA. Heavy day and night attacks on our aerodromes continued.
Our fighters were often unable to operate oving to bad weather.
SICILY. The attack on CASTEL VETRANO aerodrome where 75 closely
packed transport aircraft had been photographed was most successful.
RUSSIA. Heavy knowfalls in South RUSSIA have probably added to
the operational difficulties of the German Air Force which has been unable to
exert its maximum effort. It is reported that Russian aeroplanes are extensively
fitted with skis but there is no evidence to show that German aircraft are so
equipped.
MALAYA. The Japanese have already brought five north Malayan
aerodromes into use.
478
Copy No.
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 14
LIBYA-SOLLUM surrendered 0900 12th January.
No details yet received .
479
Copy No. 13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 15
1, NAVAL
Information received up to 7 a.m., 13 January, 1942,
A small British merchant vessel this sunk by mine off HARWICH
yesterday while in convoy. A Dutch 7,000 ton vessel was torpedoed and sunk near
JAVA on 2nd, Two British ships one of small and the other of medium tonnage were
sunk by bombs off MALAYA on 11th and at HANILA on 29th December respectively.
2. MILITARY
LIBYA. Our forward troops in the Frontier area are in contact
with an enemy position about 35 miles East of AGHEILA.
MALAYA. 11th, The withdrawal of our forces to an area 30 miles
South-South East of KUALA LUMPUR continued. Those on the right were unmolested
and those on the left were followed up on the ground and subjected to continuous
air attacks in the NEGRI SEMBILAN Area, Enemy air raids have continued and in-
clude leaflet raids aimed at causing disaffection amongst Indian troops.
BURMA. 11th. Our forces encountered a mixed Japanese-Siamone
patrol about 100 strong on the frontier east of TAVOY.
RUSSIA. South West of MOSCOW the Russians have made further progress and may even have reached the VYASMA-BRYANSK railway, German counter at-
tacks in the area South of KURSK have made slight progress.
3. AIR OPERATIONS
WESTERN FRONT. 11th/12th, BREST 42 tons. The smoke screen made
observation difficult, Some bombs fell in the target area and in the town, otherwise results unobserved. 12th and 12th/13th. Nothing to report.
MEDITERRANIAN.
LIBYA. 11th. Bad weather restricted operations, Blenheims suo
cessfully attacked about 250 mechanical transports West of AGHEILA and started
a large oil fire, HALFAYA defences were bombed at intervals 10th and 11th.
11th/12th. Wellingtons bombed shipping in TRIPOLI (L) Harbour and probably hit
a merchant vessel, On the 11th enemy dive bombers escorted by fighters attacked
our troops near MARSA BREGA.
FAR EAST.
BURMA. Three enemy aircraft attacked NOULMEIN but caused no service damage. TAVOY and HINGALADON aerodromes were also bombed, Slight damage
was caused,
480
-2MALAYA. 11th. Enemy aircraft bombed SEREMBAN but the main com-
munications are still open.
4.
STAM. There are indications of Japanese preparations for operations in MESOD area.
5.
NETHERLANDS EAST INDIES. Japanese landings at TARAKAN and MINAHASSA are confirmed.
481
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G-2/2657-220:
No. 600
M.I.D., W.D.
11:00 A.M., January 14, 1942
SITUATION REPORT
I.
Pacific Theater.
Philippines: Japanese suffered heavy losses yesterday when
their reconnaissances in force, well supported by artillery and aircraft, were repulsed. Our losses were comparatively light. Hawaii:
Negative reports of hostile military activity. Malaya: Situation
virtually unchanged, with the British in position slightly south of
Kuala Lumpur. According to the press, Port Swettenham is in enemy
hands. The press also states that Singapore suffered another heavy
air raid yesterday, but damage was slight. Netherlands East Indies:
It is reported by the press that Tarakan (off northeast Borneo) and
Kema (north Celebes) have been occupied by the Japanese. Dutch planes
have been bombing these enemy forces. Burma: Light enemy air activity
continues. West Coast: No further reports.
II.
Eastern Theater.
Russian pressure continues along the eastern front. The
Russians claim the capture of Kirov (north of Lyudinovo). The Germans
claim the repulse of Russian attacks east of Kharkov and only minor
action in the Crimes and Donets Basin.
III.
Western Theater.
No further reports have been received.
IV.
Middle Eastern Theater.
Ground: The Halfaya Pass area is still undergoing heavy
bombardment from artillery, air, and naval guns. Minor actions only
are reported from the Agheils-Agedabia sector.
Air: Axis continue bombing Malta. The press reports an
apparent increase in Axis aerial activity in Western Cyrencies.
Harassment of rear supply bases and supply routes is being carried or.
by both Axis and British Air Forces.
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