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Propared by: Mr. Mornett
Mr.
221 so
Mr. Than
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE Jan. 30, 1942
TO
FROM
Secretary Morgenthau
Mr. Haa 8
Subject: Mr.
Winthrop W. Aldrich's Proposal for "United
States Annuity Bonds"
I. Description of Proposed Bonds
The annuity bonds proposed by Mr. Aldrich would be in
two series -- one for large and the other for small investors.
In the description given by Mr. Aldrich, the yield of each
series is 2-1/2 percent. He states, however, that this rate
is used for illustration; it is not put forward as a
recommendation."
Each of the bonds, as described by Mr. Aldrich, would
be issued at $92.82 and would appreciate in value (at 2-1/2
percent interest) to $100.00 at the end of three years.
During this period, and during an additional six months
before the disbursement of the first annuity payment -total of 3-1/2 years -- the bonds would not be redeemable.
Since it is also proposed that the bonds be non-negotiable,
the holders would have no way of realizing on them during
this so-called "grace period.'
a
Commencing 3-1/2 years after issue date, the bonds
would be liquidated by a series of equal semi-annual annuity
payments, each paid partly out of principal and partly out
of interest. In the case of the bond designed for large
investors, these payments would be $3.00 per $100.00 and
would continue until 25 years after issue date, the last
payment being only about $1.20. In the case of the bond
designed for small investors, the semi-annual payments would
be $7.80 per $100.00 and would continue until 10 years after
issue date, the last payment being a little over $8.00.
222
Secretary Morgenthau - 2
The bonds of each series would be redeemable at the
option of the holder at any time after the initial 3-1/2
year grace period, but only at substantial discounts from
their unpaid principal balances. The bond for large in-
vestors, for example, would be redeemable at $90.70, 3-1/2
years after issuance at $92.82 and after the payment of one
semi-annual annuity of $3.00. This is equivalent to an
investment yield of 0.25 percent per annum for the period
held, and compares with 1.04 percent on Series G savings
bonds redeemed after being held for an equal period. Investment yields for the period held increase gradually
thereafter, reaching 0.80 percent at the end of 5 years;
2.05 percent at the end of 12 years (the maturity date of
the present Series F and G bonds); and 2.50 percent at the
end of 25 years.
The bond designed for small investors gives a yield of
2.50 percent if held for the entire 10 year period; but, as
the intermediate redemption yields are only as great as those
of the series designed for large investors, the penalty for
redemption prior to maturity is much greater. This is, of
course, just the reverse of the relationship between the
present Series E bonds on the one hand and Series F and G
bonds on the other.
Mr. Aldrich suggests that a provision be inserted in
each series analogous to that in the present Series G savings
bonds providing for the redemption of the full unpaid principal balance in the event of death.
II. Merits Claimed for Proposed Bonds
Mr. Aldrich believes that the bonds which he proposes
would have the following advantages:
(1) They would be attractive to investors.
(2) They would lighten the burden of the
demand debt imposed on the Treasury by
the present savings bonds.
(3) They would provide for a more systematic
liquidation of the debt during the post-
war period.
223
Secretary Morgenthau - 3
III. Evaluation of Proposed Bonds
It is believed that the proposed bonds, if offered,
would not sell well for the following reasons:
(1) It would be difficult to popularize a
security neither redeemable nor negotiable for a 3-1/2 year period.
less
of
The market
security
is abe
it
is
an would
(2) A term annuity such as the proposed
interest than an
security current security.
for
securities
as
with
premium securities is an example of the
believed discount traditional attractive or a that "wasting either at preference such any interest asset" given appreciation asset of compared rate the and
relative unpopularity of "wasting assets."
If a security is to be repaid in the form
more popular dollar-for-dollar of actuarial value if it were payable in the form
of an annuity for a period certain or for
life, whichever is longer, rather than
for a period certain only.
of an annuity, it would probably be much
(3) The suggested yields of the proposed bonds
would be unattractive in the present market
and compare very unfavorably with those
offered on the present savings bonds of
all series. (It should be noted in this
connection that Mr. Aldrich says that the
proposed yields are for purposes of illustration only.)
It should finally be noted, from the standpoint of
public policy, that the proposed method of repayment of
the securities by periodic principal payments would impair
the flexibility of Treasury policy in handling the debt in
the post-war period.
Attachment
53
A Proposal
Pogue 224
Shebad Magan
from
Enjene Black
UNITED STATES ANNUITY BONDS
Winthrop W. Aldrich, Chairman Board of Directors
of the
Chase National Bank of the City of New York
Introduction
Any proposal, worthy of serious consideration at
this time, must recognize the magnitude and com-
plexity of the Treasury's task in providing funds for the war effort.
The proposal must go further and look to the nature of the Treasury's
responsibilities in the transition from war to a peace economy. The
bond issue herein described is designed to appeal to the public and at
the same time regularize the Treasury's financing without increasing
its immediate cash outlay. It is adapted to the basic economics of
the present and future situation of the nation, in so for as that situation can be appraised. It is believed that the bond would utilize the
present needs of the Treasury for new money to furnish a bridge into
the post-war reconstruction of the nation by providing purchasing power
to the nation when it will be needed.
Briefly, the form of the proposed bond is patterned on the
characteristics of term loans as developed in recent years by commercial
banks. After a three and one half year grace period, during which interest
accumulates, principal and interest would be returned to the purchaser in
equal instalments BC as to retire the bond at its maturity. Purchases
would not be limited to any fixed amount. It is believed that the bond
would appeal to large purchasors, as well as to those with medium or small
resources. It should attract those whose income during the war will exceed their prospective post-war income, and those who, by reason of age,
would be interested in annuities.
-2-
225
The introduction of such a bond would give added strength
and security to the fiscal position of the Treasury. For, to the
extent that the Annuity Bond finds favor with investors, the shortterm indebtedness of the Treasury would be thereby reduced. The fact
that the principal repayments are spread over a period of time would,
in itself, ease the burden of debt retirement in the post-war period.
Although tax revenues will increase, the projected war expenditures of the federal government will be financed, for the most
part, by the sale of its obligations. Estimates contained in the
President's budget message of January 7 indicate the sale of over
$19,000,000,000 of obligations in the fiscal year 1941-42, and
$34,000,000,000 to $35,000,000,000 of obligations in 1942-43. These
are sales that must be made in addition to those government issues
placed with trust funds under the Social Security and other legislation.
The Status of
with such requirements confronting it, the Treasury
Defense Bonds
must exercise the utmost skill in handling its
finances. The security issues most importantly used in the financing
of the Treasury are of two types, the general money market bonds issued
under the Second Liberty Loan Act (together with Treasury notes and
bills) and the "defonee bonds" issued in Series "E", "F" and "G". 1/
It has been estimated that of total borrowings, exclusive of trust fund
borrowings, approximately $9,000,000,000 to $10,000,000,000 annually
will be realized from the sale of defonse bonds. These issues are not
negotiable but are redeemable. The Series "E" and "F" bonds are purchased at a discount of par and are redoomable at successively higher
1 Series "E" bonds are designed for smaller purchasers and the Series
"F" and "G" for those with larger resources.
226
percentages of par value. The Series "G" bonds are purchased at par
and redemption value varies between 94.7 per cent of par and par dur-
ing the life of the bond. For the most part, defense bonds are sold
to individuals, institutions, and other non-banking purchasers. It
is highly desirable that a still larger part of the Treasury's borrowing be done in this manner.
The sale of these defense bonds began last May. In the final
eight months of 1941, a total of $2,538,000,000 was sold. Of this total,
45 per cent went to smaller purchasers in the form of Series "E" bonds,
and 55 per cent to larger purchasers in the form of Series "F" and "G"
bonds, Interestingly enough, December sales reversed these percentages,
65 per cent consisting of Series "E" bonds and but 35 per cent Series
"F" and "G" bonds. Series "F" and "G" bonds contributed about 45 per
cent of total defense bond sales in the Second Federal Reserve District
from January 1 to January 23, inclusive. The present series of defense
bonds appear to be of limited suitability for purchases in substantial
amounts by those with large resources. For this and other reasons, it
is proposed to supplement and, perhaps, replace the Series "F" and "G"
bonds by an issue of United States Annuity Bonds.
In addition, the Series "F" and "G" bonds have another objec-
tionable characteristic from the standpoint of the Treasury. After six
months, they become redeemable on the first day of any calendar month,
on one month's notice in writing. The Series "E" and "F" bonds are redeemable at not less than the cost price. The Series "G" bonds are redeemable at moderate discounts of the cost price but at not less than
cost price when interest payments are included. Heavy demands on the
Treasury in the future might occur under unfavorable circumstances should
the sale of defense bonds reach large levels. The one month's grace per-
iod would not provide the same relief for the Treasury that it provides in
the case of a bank. In so far as redemption might be demanded by the
-
227
public in successive months, the defense bonds constitute a liability
on the Treasury's books of uncertain nature, but one more akin to a
demand than to a time obligation with a fixed maturity.
Requirements of
a Desirable
Issue
Three important requirements occur in considering
the most desirable type of obligation for the
Treasury to issue. The bond should appeal more strongly than the
Series "F" and "G" bonds to potential purchasers who possess large
idle balances. The demand liability position of the Treasury should
be prevented from increasing in so far as possible. There should be
no unnecessary addition made to the cash demands on the Treasury in
the immediate future. If a bond can be devised to accomplish these
objectives, a highly desirable revision will result in the Treasury's
financing program.
The United States It is hoped that the United States Annuity Bond
Annuity Bond
herein described may accomplish these purposes.
The form of the bond, in substance, constitutes a term annuity. The
issue would be dated as of the first of the month in which purchase
is made, and would be extinguished 25 years after the issue date. It
would be purchased at a discount and interest would accrue at 2 1/2 per
cent compounded semi-annually for three years from the issue date. The
2 1/2 per cent rate is used for illustration; it is not put forward as
a recommendation. By setting a purchase price of $928.17 a/ per $1,000,
the 2 1/2 per cent rate enhances the purchase price to $1,000 principal
amount after the three-year period has elapsed.
a/ If desired, this figure could be rounded out by accruing interest
for three years at a slight variation of the 2 1/2 per cent rate.
-5-
228
Semi-annual payments of principal and interest begin 3 1/2
years from the issue date. These semi-annual amortization and interest
payments are made in equal aggregate amounts, $30 each six months on a
$1,000 bond. The interest paid progressively decreases, while the
principal reduction payments progressively increase until maturity
when the total principal will have been returned to the purchaser. The
net yield, 1f held to maturity, is 2 1/2 per cent. The return to the
holder after three years is 6 per cent per annum, including both interest
and return of capital.
The Treasury would mail checks on a single bond each six months.
Since bonds would be sold in each month, different bonds would be dated
differently and the Treasury would mail checks to various holders on the
first day of each month in the calendar year. Each check would carry a
notation of the amount to be credited to interest and the amount to be
credited to return of principal. The interest accrued during the first
three years would be paid out with other payments of interest and principal, beginning 3 1/2 years from the issue date.
The schedule which follows shows the semi-annual return of
principal with semi-annual interest payments computed at 2 1/2 per cent
per annum on the respective unpaid balances of principal at successive
intervals of time. These combined payments amount to $30 per $1,000
bond every six months over a period of 22 years, after the lapse of
the three and one half year grace period during which interest accumulates
on the original purchase price at the rate of 2 1/2 per cent compounded
semi-annually.
6
229
U. S. ANNUITY BOND
Payment and Redemption Value Schedule of a $1,000 - 2% Interest bearing Bond producing $60.00 per
$30.00 each six months. This is a 25 Year Bond with annuity payments commencing 3) years from the annum, issue date. or
These $30. annuity payments become due over 44 semi-annual periods or 22 years.
(Not redeemable until end of H year period)
Approx.In- Approx.Yield
Payments
annum
principal, at and
1,000.00
982.50
17.72
964.78
884.
17.94
946.84
864.
18.16
18.39
928.68
910.29
891.67
847.
872.82
799.
853.73
834.40
781.
764.
30.
12.28
12.06
11.84
11.61
11.30
11.15
10.91
10.67
10.43
814.83
748.
30.
10.19
795.02
774.96
754.65
734.08
713.26
692.18
670.83
649.22
627.34
605.18
732.
582.74
543.
560.02
537.02
519.
3
4
30.
30.
30.
30.
18.62
18.85
19.09
19.33
19.57
19.81
20.06
30.
9.94
9.69
10
30.
9.43
20.31
20.57
10
30.
9.18
20.82
21.08
21.35
21.61
21.88
22.16
22.44
22.72
23.00
30.
30.
8.92
11
30.
8.65
12
30.
8.39
12
30.
8.12
30.
7.84
136
30.
14
30.
7.56
7.28
7.00
14
30.
15
30.
6.71
30.
6.42
30.
6.13
30.
5.83
17
30.
17
30.
30.
5.53
5.22
4.91
30.
4.60
19
30.
4.28
19
30.
3.96
20
30.
3.63
30.
3.30
16
16
18
20
21
21g
22
22
23
23th
24
24
25
30.
2.97
30.
2.63
23.29
23.58
23.87
24.17
24.47
24.78
25.09
25.40
25.72
26.04
26.37
26.70
27.03
27.37
$
30.
30.
13
939.78
$ 17.50
30.
11
Redeemed
$ 12.50
$ 30.00
30.
4)
of Bond
951.52
963.42
975.46
967.65
of the 3rd Year.
31
of Income
over Cost
if
907.00
831.
817.
680.
662.
644.
625.
602.
584.
561.
501.
477.
3.30%
.40%
3.42%
3.50%
3.53%
3.58%
3.59%
3.64%
.60%
.80%
1.00%
1.20%
1.30%
1.40%
1.50%
1.60%
1.70%
1.80%
1.85%
1.90%
1.95%
2.00%
2.05%
2.05%
2.10%
2.10%
2.15%
5.75%
5.70%
6.37%
2.32%
2.33%
2.34%
2.35%
2.37%
269.
330.83
337.83
237.54
210.51
183.14
222.
173.
343.83
348.83
354.83
2.435
148,
359.83
2.45%
121.
362.83
365.83
368.83
372.83
373.42
2.46%
28.41
98.96
1.24
70.20
67.
30.
.88
28.76
29.12
29.49
11.59
41.08
41.
11.59
11.59
4.57%
4.60%
2.30%
246.
1.59
4.345
297.83
294.
30.
4.30%
5.33%
367.77
342.37
316.65
290.61
264.24
30.
3.91%
3.96%
3.99%
4.09%
2.25%
343.
94.
3.80%
3.83%
2.25%
2.31%
197.
3.77%
3.79%
4.95%
4.95%
5.32%
2.30%
319.
3.73%
3.75%
2.15%
2.20%
2.20%
302.83
-0-
Date to
.25%
308.83
314.83
320.83
325.83
155.43
127.37
Redemption
tion Date
Maturity
(Average Life Method Used)
367.
28.06
$301.73
to Redemp-
391.
27.71
.14
Issue Date
392.86
1.94
.51
38.83
52.83
68.83
80.83
92.83
105.83
119.83
416.
699.
459.
2.29
11.73
15.83
25.83
435.
717.
513.73
30.
30
$ 8.83
133.83
148.83
160.83
171.83
183.93
195.83
206.83
213.83
225.83
232.83
244.83
250.83
262.83
268.83
280.83
286.83
490.15
466.28
442,11
417.64
30.
Totals $1,301.73
if Redeemed
$ 928.17
Subscription price -
of $928.17 onhandes to $1,000.
Yes.
Payable
#
End of
Balances
-
Yr.
Principal
Reduction
vestment on Redemption
Yield from value from
-
Subscription price)
Principal
20% per
Net Dollars
-
Years Hence
Payments
Interest at
Dollars
-
Semi-Annual
Annuity
Semi-Annual
-
Sami-Annual
Periods
Semi-Annual
6.75%
Yields from
this period
on, increase
quite rapidly
2.39%
2.41%
2.47%
2.48%
2.49%
2.50%
373.56
$1,000.00
Increment of $71.83 represents an accumulation of 21% interest compounded semi-annually on the $928.17 subscription price.
Dollar units were maintained when arriving at Redemption Values.
-7 -
Registration
230
The bonds would be issued in registered form in
denominations of $1,000, $5,000, $10,000, $50,000,
$100,000 and $500,000 and made non-negotiable. The rules that now
apply to the registration of the defense bonds might be used in connection with the United States Annuity Bond.
Redeemability
The issue would not be callable by the Treasury
Department, but on one month's notice in writing
may be redeemed prior to maturity after 3 1/2 years from the issue
date at the owner's option at fixed redemption values, as provided
in the accompanying schedule. These redemption values represent a
greater discount of the face value of the bonds than is now the case
with defense bonds.
Provision should be made for redemption in full upon the
death of the registered owner at the then prevailing principal balance.
This is equivalent to making the bonds acceptable for payment of estate
and inheritance taxes. Or, if it is preferred by the holder, the
annuity payments might be continued after death by registering the
bonds in two names, or by naming a beneficiary in the bond's registration.
Annuity Bonds
For Smaller
Incomes
The foregoing description and table outline the
features of a bond that should appeal to those in
the middle and higher income groups. It is entirely possible that the
annuity feature could be applied also to a bond designed to draw off
-8-
231
the abnormal wartime incomes of many in the lower income ranges.
Industrial workers particularly should look with favor upon an instrument in which they could place enhanced incomes today, and have their
incomes returned with interest over a period of years in the future.
A bond designed for this purpose should have a shorter
maturity; should pay out in, perhaps, ten years. Since the annuity
feature would be its chief attraction, it might carry a moderate rate
of interest. Cash outlays of the Treasury to service a bond paying
out this rapidly would be heavier, and the amount issued in any year
to any one person might be limited to $2,500. Denominations should
be limited, perhaps, to $100 minimum in order to minimize clerical
expenses in servicing the issue.
The following table describes a $100 bond, at 2 1/2 per cent,
to be retired in 10 years. After the three and one-half year period of
grace, semi-annual payments of $7.80 would begin. A somewhat larger
payment would be made on the maturity date, so as to return principal
with interest in full.
232
U. 5. ANNUITY BOND
Payment and Redemption Value Schedule of a $100. - 2/6 Interest bearing Bond producing $15.60 per annum,
$7.80 each six months. This is a 10 Year Bond with annuity payments commencing 30 years from the issue date. or
These $7.80 annuity payments become due over 14 semi-annual periods or 7 years.
(Not Redeemable until and of year period)
Approx.In- Approx.Yield
-
.
$ 1.25
$ 6.55
1.17
6.63
6.71
1.09
1.00
92
6.80
6.88
2
to
-
-
.
"
3
$
"
"
4
.
"
5
7.80
7.80
.57
"
7.80
.48
"
7.80
.38
6.97
7.06
7.14
7.23
7.32
7.42
7.80
7.80
.29
7.51
.20
8.20
.10
Totals $ 109.68
$ 9.68
$ 100.00
"
"
6
of
"
7
.
70
8
0
"
9
"
"
%
10
.83
.74
.66
Payable
of Income
over Cost
if
Redeemed
93.98
95.15
96.34
97.55
98.77
100.00
93.45
86.82
80.11
73.31
66.43
59.46
52.40
45.26
if Redeemed
on Redemption
Yield from value from
Issue Date Redemption
Date to
to Redemp-
tion Date
Maturity
(Average Life Mathod Used)
#
85.90
$ 00.88
.26%
78.80
72.00
1.58
2.50
3.78
5.08
6.48
.41%
6.00%
.60%
7.00%
65.40
58.90
52.50
45.60
38.70
7.38
8.20
.81%
1.01%
1.21%
1.30%
1,40%
1.50%
1.60%
38.03
30.71
23.29
15.78
31.90
9.28
24.90
18.10
10.08
11.08
1.70s
11.10
11.88
1.80%
7.60
8.18
2.80
12.38
1.85%
8.18
-0-
-
-
*
-
1
7.80
7.80
7.80
7.80
7.80
7.80
7.80
$ 92.82
Net Dollars
$
-
at end of 3rd
year.
-
hances to $100.
-
-
at
Payments
-
30
annum
Balances
of Bond
Subscription price of $92.82 on
10 Yrs.
+
Principal
Reduction
vestment
Dollars
-
(Subscription price)
End of +rr.
Principal
21% per
-
Payments
Years Hends
Interest at
-
Sami-Annual
Annuity
Semi-Annual
Periods
Semi-Annual
-
Semi-Annual
5.15%
Yields from
this period
on, increase
quite rapidly.
16.86
Increment of $7.18 represents an accumulation of 2% interest compounded semi-annually on the $92.82 subscription price,
Dollar units were maintained when arriving at Redemption Values,
"
10 -
233
Economic
Effects
The economic effects of using annuity bonds as
a supplement to Series "E" defense bonds and,
perhaps, as a substitute for Series "F" and "G" bonds may be considered from the standpoint of the Treasury, the holder of the bonds,
and the general economy of the country.
Effect on
the Treasury
The present defense bonds create a contingent claim
upon the Treasury in any month that holders may
wish to redeem. The amount of this contingent claim increases in pro-
portion to the success realized in selling the defense issues. There
are two principal reasons why holders might demand payment. Individuals
may need funds from time to time which they can conveniently obtain by
redeeming their defense bonds. This could result in a large number of
demands upon the Treasury in the event of a post-war deflation with
rising unemployment. But it is improbable that the aggregate dollar
demands from this source would be great or would be difficult for the
Treasury to handle. Moreover, redemption in these circumstances would
supply purchasing power to the community when it would be desirable.
The most important potential demand upon the Treasury in dol-
lar amount is provided by the possibility of a material revision in the
economic expectations of the larger holders of defense bonds. A state
of high business activity with booming prices might induce redomption of
the Series "F" and "G" bonds especially. In these circumstances, unlike
those in a situation of large unemployment, redomption on a large scale
would provide the community with now purchasing power at a time when it
is most undesirable that purchasing power be increased.
A highly desirable feature of the United States Annuity Bond
18 that it is redeemable at sizablo discounts of the face value. In
this circumstance, a holder confronted with the decision of redoeming
- 11 -
234
the bonds to acquire funds to use in other investments must accept a
known loss for a contingent gain. It seems less likely that a large
"run" on redeemable government bonds could occur in this situation.
Even if open-market bonds should decline in market price
to a level making it profitable for the holder of Annuity Bonds to
cash his holdings and purchase the open-market government obligations,
the Treasury would find itself in the enviable position of realizing a
net decrease in its debt as a result of the transaction. But this is
an improbable contingency in view of the announced intention to main-
tain comparatively easy interest rates.
After the three year accretion period, the service of Annuity
Bonds would require greater cash outlays than other types of government
issues. The following table uses the 25-year Annuity Bond to show just
how much greater this service would be for outstanding amounts from
$10,000,000,000 to $40,000,000,000. To the extent that it is not financed
with new issues, the additional cash outlay represents a reduction of debt
and a strengthening of government credit. In addition, it is a determinable amount, whereas the cash outlays to service an equal amount of Defense
Bonds might fluctuate within wide ranges, depending upon the rate of their
redemption.
ANNUAL DEBT SERVICE TO CARRY DEFENSE PROGRAM
(in millions of dollars)
Six per cent
Principal
and
Interest
Service
Amount
$10,000
20,000
25,000
30,000
40,000
Per Annum
Two and one-half
per cent
Interest on
"Long" Bonds
in any event
Additional Cash
Outlays of
Treasury--Applied to
Principal
Reduction of
"Defense" Debt
$ 600
$ 250
$ 350
1,200
1,500
1,800
2,400
500
700
625
875
750
1,050
1,400
1,000
- 12 -
235
Effect on
the Holder
The holder of Annuity Bonds has somewhat less to
fear from changing economic developments than
would be the case if he possessed a marketable government bond of the
customary type, which he held to maturity or was forced to sell in
the market at an inopportune time. In the third year after issuance,
semi-annual return of principal begine in progressively larger Amounts
until the issue has been fully paid at its redemption date. These
successive principal payments provide the holder with the opportunity
of reinvesting successive parts of his original funds over a period of
time so that the average conditions that pertain over the life of the
bond are available to him in his reinvestment decisions. This provides
him with the opportunity of mitigating the effects of broad economic
change upon his personal affairs.
Moreover, it provides the holder with a convenient means of
saving wartime income that would be returned in instalments with
interest over a period of years in the future. This 18 especially true
of the 10-year issue designed to appeal to smaller income receivers.
Effect on the
The effects of the Annuity Bond issue upon the
Economy
general economy, and more specially upon the money
markets, depend largely upon the extent of their sale. To the extent
that the bonds are sold in large amounts to people who use existing
dormant deposits, the result is an activating of those deposits. Since
the annuity feature of the bonds is designed to appeal to those who have
substantial resources, it is reasonable to believe that this would be one
of the results. No other type of government issue has been conspicuously
successful in tapping these large unused funds.
- 13 -
236
To the extent that the Treasury might succeed in financing the
war effort in this way, there would be a reduction in the amount of new
general money market bonds which it had to sell. Perhaps the most d1fficult problem today associated with war finance occurs in connection
with the now indicated necessity of large bond purchases by the commer-
cial banks of the nation. From the standpoint of the money markets,
this problem can be eased Bomewhat by the Treasury gradually reducing
the maturity of its outstanding obligations and concentrating the bulk
of its forthcoming financing in the short-term market. But it still
remains true that for many reasons, it is highly desirable for the
government to sell as large a part of its issues as possible to nonbanking purchasers. Anything that can divert the forthcoming Treasury
financing away from the banks and toward the public will serve the
national interest and is worthy of serious consideration. The Annuity
Bonds appear to possess the necessary features to attract large balances
from private sources and thus to ease this phase of government finance.
Finally, the method of repayment should have a beneficial offect on the economy. Repayment of the Liberty and Victory bonds of the
last war occurred at irregular maturity intervals. This released funds
to the money markets that were used to stimulate some of the undesirable
financing of the 1920's. In contrast, the provisions of the Annuity
Bonds would insure that new funds would arrive in stabilized amounts.
To the extent that the bonds might be widely held, funds would be
returned to all sections of the nation and not concentrated in the large
money markets.
January 28, 1942
CONT IDENTIAL
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
January 15 to date
:
:
: business
:
orders at
:opening of
:
: Unfilled
In thousands of pieces)
Unfilled
Bonds
New orders
orders
at
manufactured
received
close of
today
today
business
Stock of
bonds
on hand*
IBM
deliveries
this day
Jan.
15
550
660
750
455
231
1,000
16
455
773
775
426
204
750
17
426
672
800
298
204
1,000
18
298
none-closed
298
204
soo
19
298
204
800
202
704
825
20
202
204
800
86
1,000
21
86
411
800
59
1,184
1,546
22
59
697
800
86
1,000
23
86
569
800
50
1,676
1,871
24
50
727
800
28
25
28
none-no mail
26
28
27
7
none-closed
1,000 1
1,000 1
1,000 2
1,000 2
29
490
434
7
6
474
407
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Bonds in Washington vaults only.
1
28
7
7
6
8
875
1,000
1,922
1,922
1,000
2,011
2,177
2,102
2,000
-
-
2,000
2,097
January 30, 1942
Includes 400 thousand pieces manufactured for inventory in the field.
Includes 600 thousand pieces manufactured for inventory in the field.
-
28
none-no mail
CONFIDENTIAL
Stock of Series E Savings Bonds on Hand 1
January 15, 1942 to date
(In thousands of pieces)
:
: beginning
of day
:
Stock on hand
Sales
this day
Bonds
manufactured
this day
Stock on hand
close of
day
IBM
deliveries
this day
:
Jan.
1,000
775
6,999
7,329
163
800
7,966
1,000
7,966
none-closed
none-closed
800
665
800
218
800
21
7,966
8,101
8,683
337
800
7,966
8,101
8,683
9,146
22
9,146
381
800
23
377
800
263
800
25
9,565
9,988
10,525
none-closed
none-closed
26
10,525
487
27
11,038
186
28
11,852
251
1,000
1,000
1,000
29
12,601
265
1,000
320
750
445
17
6,569
6,999
7,329
18
19
15
16
20
24
Office of the Secretary of the Treasury,
Division of Research and Statistics.
750
825
1,000
875
1,000
9,565
9,988
10,525
10,525
1,000
1,000
11,038
2,000
11,852
12,601
13,336
-
-
2,000
-
January 30, 1942
1 Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,
(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
Last Twenty-three Business Days of January 1942 and December and November 1941
(November 1-29, December 4-31, January 3-29)
On Basis of Issue Price
(Amounts in thousands of dollars)
$141,850
457,554
$ 97,439
$ 37,997
228,701
Series F - Banks
Series G - Banks
599,405
67,492
277,331
Total
$944,227
Series E - Post Offices
Series E - Banks
Series E - Total
over
December
:
:
1941
January
:
1941
December
over
November
over
December
:
1942
January
:
November
:
January
December
Percentage of Increase
:
:
Item
Amount of Increase
Sales
December
over
November
156.4%
45.6%
$ 59,442
71,478
$ 44,411
228,853
157,223
100.1
220.0
326,140
30,446
135,983
109,475
18,978
105,035
273,265
37,046
141,348
216,665
11,468
30,948
83.8
121.7
103.9
197.9
60.4
29.5
$492,568
$233,487
$451,659
$259,081
Office of the Secretary of the Treasury, Division of Research and Statistics.
111.0%
91.7%
January 30, 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
CONFIDENTIA
Daily Sales - January, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
January 1942
1
2
3
5
6
7
8
9
10
12
13
14
15
16
17
19
20
21
22
23
24
26
27
28
29
Total
All Bond Sales
Bank Bond Sales
Bond Sales
Total
Series E
Series E
Series F
Series G
Total
Series E
Series F
Series G
$ 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
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
10,187
7,902
4,706
6,444
5,721
4,830
37,483
15,059
19,939
16,597
26,239
6,933
3,830
2,507
3,701
2,243
4,319
55,666
29,510
37,933
32,123
44,637
10,700
47,670
22,961
24,645
23,041
31,960
11,763
3,830
2,507
3,701
2,243
4,319
759
14,353
11,944
14,293
13,283
14,078
3,008
759
14,353
11,944
14,293
13,283
14,078
3.008
65,853
37,412
42,639
38,567
50,358
15,530
8,835
5,155
4,886
5,161
5,908
4,655
39,000
10,549
19,375
22,257
23,392
15,820
3,946
2,285
3.538
3,973
2,652
2,239
16,599
10,551
15,566
9,850
8,004
5,344
59,545
23,385
38,479
36,080
34,048
23,403
47,835
15,703
24,261
27,418
29,300
20,476
3,946
2,285
3.538
3.973
2,652
2,239
16,599
10,551
15,566
9,850
8,004
5,344
68,380
28,539
43,365
41,241
39.956
28,058
7,095
4,967
5,318
4,826
39.997
11,504
18,394
20,123
5,022
3,569
2,656
3,223
17,516
23,125
18,636
12,422
62,535
38,199
39,686
35.768
47,093
16,471
23,712
24,949
5,022
3,569
2,656
3,223
17,516
23,125
18,636
12,422
69,630
43,165
45.004
40.595
$150,635
$478,519
$ 71,513
$292,714
$ 842,746
$629,153
$ 71,513
$292,714
$ 993,380
Office of the Secretary of the Treasury, Division of Research and Statistics.
January 30, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Figures have been rounded to gearent not accessarity add to totals,
20
24o-A
January 30, 1942
TO: HAROLD N. GRAVES
SUBJECT: PROGRESS REPORT FROM DEFENSE SAVINGS STAFF
BALL OF BONDS
Actual cash receipts from the sale of E, F and
G Bonds for the last twenty-three business days of January (January 1 excluded) totaled $929,006,000, an increase
of 100.6 per cent over sales for the corresponding number
of days in December. Sales for the last twenty-three
business days of December were ¥463,093,000, and the same
period in November, $233,487,000.
Sales of Bonds on Monday, January 26, totaled
$69,630,000, setting the highest daily record si ce the
start of the Defense Savings Program.
Series E Bond sales for the last twenty-three
business days of January were $589,993,000, an increase
of 95.1 per cent over Series E sales for the same period
in December. Series E sales for the first twenty-three
days of December were $302,350,000.
PAYROLL SAVINGS PLAN
The estimated number of employees now exposed
to Payroll Savings Plans totals 12,148,735. These are
the employees of 14,722 firms from which reports have been
received through State Administrators.
2/3/42
240 B
-2-
Four thousand forty-three firms employing
500 or more workers report 10,844,061 employees exposed.
Five thousand nine hundred thirty-three firms
employing between 100 and 500 workers report 1,136,464
employees exposed.
Four thousand seven hundred fifty-six firms
employing less than 100 workers report 168,210 workers
exposed.
SPECIAL
Life Magazine's current issue, on newsstands
today, devotes a double spread of ten pictures and text
to the promotional efforts undertaken for Defense Bonds.
(Copy attached.)
VICTORY HOUSES
Standard oil Company of California has informed
the Treasury that it will continue the Victory House in
Los Angeles "for the duration," and that a similar House
to promote the sale of Defense Bonds and Stamps will be
opened in San Francisco in February.
240. C
-3-
NEWSPAPER CARRIERS
Returns through January 24 show that the newspaper carriers of 604 newspapers have sold 66,673,928
ten cent Defense Savings Stamps, or the cash equivalent
in Bonds or stamps of larger denominations. This is an
increase of 26 per cent over the returns reported as of
January 19. The dollar increase since the January 19 report amounts to $13,841,901. (Statistical chart showing
carrier boy sales by states is attached.)
EDUCATION
Copies of the new Education Committees handbook
are being distributed to all education representatives on
local and state committees this week by State Administra-
tors. (Copy attached.)
The Education Division has completed arrangements
to set up a Defense Savings Stamp booth at the Civic auditorium in San Francisco during the national convention of
the American Association of School Administrators from
February 21 through February 26. The Education Director
is booked to give three talks at both general and committee
meetings of this convention.
Plans were cutlined at the National Executive Board
meeting of the Parents Teachers Association in Chicago by the
Education Division, calling for expansion of the Defense Savings Program both by PTA members and in Schools. At this meeting, the National PTA body invested $25,000 in Defense Bonds.
240-D
-4-
In response to numerous requests from school
officials, two small pamphlets are in preparation, designed
to explain the meaning of Bonds and Stamps to school pupils.
One of these booklets is being prepared expressly for students
of high school age; the other for elementary school pupils.
(Copy of Defense Savings article in "School Life" attached.)
RETAIL STORE ACTIVITY
Governor Stevenson of Texas, has advised the
Treasury's Retail Advisory Committee, that he will issue
a proclamation on February 16, making every pay day De-
fense Bond Day throughout the entire state. Arrangements
are being completed to have volunteer workers man Defense
Savings booths in department stores, hotels and theatres.
Friday, January 30 is Defense Savings Day in Al-
toona, Pennsylvania. Clerks in all stores have been assigned
$10 worth of Defense Savings Stamps to sell to customers. A
large parade is scheduled and all schools will be closed in
observance of the day.
Retailers of the State of Pennsylvania have set
themselves an $80,000,000 goal in their Defense Savings
Drive; while chain stores of Pennsylvania have advised
that their goal is $25,000,000.
Since January 2 through January 23, Schulte Cigar
Stores in New York City area report that they have sold
$106,000 worth of Defense Savings Stamps.
24.-E
-5-
WOMEN'S ORGANIZATIONS
Replies from 250 questionnaires to women's
organizations throughout the country are being analyzed
by the Women's Division. The questionnaires were drawn
up to determine what individual organizations have done
and plan to do for the Defense Savings Program, and also
to learn in what way the Defense Savings Staff might best
aid them. Publications of these organizations are also
being studied to determine the type of Defense Savings
articles best suited for them.
The Women's Division in cooperation with the
General Federation of Women's Clubs is working out details
of a nationwide pledge-signing contest through local and
state member clubs.
Arrangements were completed for members of the
American Woman's Voluntary Service to sell Defense Savings
Stamps in cooperation with local and state committees.
ENTERTAINMENT
Sabu, the "elephant boy" movie star, began his
nationwide tour of newspaper carrier meetings this week,
making appearances in Washington, D. C., Baltimore, Philadelphia and Pittsburgh.
The Defense Bond Doll Tour of Miss Audrey Kargere,
stylist and sculptress, opens on February 2 at the Jordan
Marsh Department store in Boston, Massachusetts.
240-F
-6-
Miss Lucy Monroe, concert and radio star, begins
her extended songfest tour in February. (Copies of Press
Releases on the Kargere and Monroe tours are attached.)
SPECIAL COMPAIGNS
"Buy a Bomber," through the purchase of Defense
Bond campaigns are being started Sunday, February 1, by
the New York Journal American and the Los Angeles Examiner.
Similar campaigns are scheduled to start on Wednesday, February 4 by the Washington Post and Radio Station WJSV in
Washington, D. C.; the Chicago Herald-American and the San
Francisco Examiner.
NEWSREELS
The Defense Savings Staff now has a library of
newsreel film, picturing citizens from all walks of life,
from the states of Minnesota, Wisconsin, Michigan, New York,
Massachusetts, Rhode Island, Connecticut, Pennsylvania,
Maryland, Virginia, North Carolina, South Carolina and Georgia.
Two newsreel crews are now working, and this week
will cover the states of Louisiana, Texas, Oklahoma, Ohio,
West Virginia and Kentucky.
Release of these films to theaters in these
regions will begin on a continuing basis through the
five newsreel companies on March 5.
240-G
-7-
MOTION PICTURES
The Motion Picture Theaters Section of the War
Activities Committee of the Motion Picture Industry has
passed a resolution that they will make every effort to
place Stamps on sale at special booths or at the box offices
or candy counters as soon as possible in every one of the
13,000 theatres which they represent.
Special "Bugs Bunny" animated cartoon produced
by Leon Schlesinger to promote Defense Savings, is being
distributed to theatres throughout the country.
BUSINESS PUBLICATIONS
Replies have been received from 250 business
publications advising that they will run the second advertisement on Payroll Savings in their February or March
issues.
In addition to publishing the first Payroll
Savings Advertisement, numerous publications are carry-
ing special cover illustrations featuring Defense Bonds
and Stamps. A typical example is illustrated in attached
tear sheets from American Agency Bulletin.
Coupon requests from the first Payroll Savings
advertisement now total 2,855.
Newsweek Magazine publishes Payroll Savings
advertisement in current issue. (Copy attached)
240-H
-8-
HOUSE MAGAZINES
House magazines publishing the first one column
feature release "Defense Bonds Buy Tanks," now total 700.
RADIO
Total of 2,581 Minute Men already have broadcast,
in English and eleven foreign languages, over 814 radio
stations throughout the country. (Copy of Treasury Department citation given to Minute Men is attached.)
Twenty-seven of the ninety-six United States
Senators have already made recordings in the interest of
the Defense Savings Program. Others are making their records
daily. These transcriptions will be distributed to all radio
stations in the senators' home states. Senators who have
completed their records are:
Robert M. LaFollettE Jr., of Wisconsin; Alexander
Wiley of Wisconsin; Henry Cabot Lodge, Jr., of Massachusetts;
Scott W. Lucas of Illinois; Harry S. Truman of Missouri;
Joseph H. Ball of Minnesota; George W. Norris of Nebraska;
Arthur H. Vandenberg of Michigan; Wall Doxey of Mississippi;
Theodore G. Bilbo of Mississippi; Millard E. Tydings of
Maryland; Hugh A. Butler of Nebraska; Raymond E. Willis
of Indiana; James E. Murray of Montana; James E. Mead of
New York; George D. Aiken of Vermont; John Thomas of Idaho;
James M. Tunnell of Delaware; D. Worth Clark of Idaho;
Arthur Capper of Kansas; Albert B. Chandler of Kentucky;
240-I
-9-
Charles W. Tobey of New Hampshire; William J. Bulow of
South Dakota; Eugene Millikin of Colorado; Joseph Rosier
of West Virginia; Edwin C. Johnson of Colorado; and C.
Wayland Brooks of Illinois.
Foreign language radio stations and program
directors are announcing daily the amount of Bonds bought
by foreign language organizations, in addition to schedu-
ling Minute Man speakers. (Typical foreign language
Minute Man address attached.)
Farm program directors are scheduling Minute
Men daily on 214 stations. New Minute Man announcements
have been sent to 870 radio stations for daily use, (samples
attached) along with regular announcement for use five
times daily. (Samples attached.)
Employees of Standard Oil refineries of New
Jersey have pledged $600,000 out of 1942 wages for purchase of Bonds.
Broadcasting Magazine story of January 19 on
radio stations participation in Defense Payroll Savings
is attached.
PRESS
Editors of fourteen movie and radio fan magazines
met with Defense Savings Staff representatives in New York
this week to develop plans for further promotion of Defense
240.3
-10-
Bonds and Stamps. Each editor present pledged his magazine
to all possible support of the program and each promised to
develop individual means of supporting Defense Savings.
Miss Dagmar Norgord, representing the publishers
of All-American Comics, Inc., met with staff representatives in Washington to present a plan for organizing the
more than 40 publishers of comic magazines in support of
Defense Savings. A further meeting with a committee of
publishers is being arranged for next week, when a plan
for reaching children through these comics will be out-
lined in detail.
The Press Section contacted leading representatives
of religious publications of all faiths to discuss means of
furthering the Defense Savings Program through this valuable
medium. A meeting with a group of various Protestant denominational leaders is scheduled for next week to advance
these aims, with representatives of all faiths expressing
a desire to help in all ways possible.
Mat releases this week including mailing of the
third set of comics -- Abbie 'n Slats, Silly Milly, Winnie
Winkle and Rube Goldberg -- to all daily newspapers, along
with the February set of four editorial cartoons.
Payroll Savings clip sheet (copy attached) was
mailed to all newspapers.
Copies of newspaper pages with photographs pro-
noting sale of Defense Bonds and Stamps are attached.
240-K
-11-
LABOR PRESS
Members of the abor Division and Labor Press
Section met this week with American Federation of Labor
representatives to outline cooperative plans of publicity
in connection with the AFL campaign for $1,000,000,000
Defense Bond goal.
The CIO News carried a special article, prepared
by Labor Press Section, on Secretary Morgenthau's Detroit
visit.
Publication of Aluminum Workers of America, CIO,
publicized with picture of a submarine, their goal to raise
$6,000,000 in Defense Bonds. (Copy attached)
DIRECT MAIL
Total Sales of Defense Bonds through the medium
of Direct Mail, as of January 28, were $18,045,620. The
Second Customer Mailing, to a roster of 894,000 newly
available names, has produced $1,527,926 in 43 days of
pulling.
TREASURY DEPARTMENT
W241
INTER OFFICE COMMUNICATION
DATE January 30, 1942
TO
Secretary Morgenthau
FROM
Mr. Kamarck
Subject: of Possible Interest: Some British Military Criticism
of British War Policy
In connection with the debate in the House of
Commons on mistakes and inefficiency in the conduct
of the war, it might be of interest to note that
there has been considerable criticism along these
lines from British military circles themselves. This
attack is not directed against Churchill. There was
a great deal of criticism in the war of 1914-18 of
Churchill's policy as being too rash, too adventurous
and too much in disregard of official military and
naval advice. This attack did result in Churchill's
losing his post as First Lord of the Admiralty.
Churchill appears, after the war, to have agreed with
this earlier criticism himself. He says in his book,
"The World Crisis" published in 1923: "Looking
back with after-knowledge and increasing years, I
seem to have been too ready to undertake tasks which
were hazardous or even forlorn." (Volume I, p. 348)
In this war, the criticism runs in the opposite
direction: that the conduct of the war is too much
governed by the slow-moving, conservative and inefficient military hierarchy. According to a British
officer, who worked in the Admiralty in the first year
of this war, almost directly in contact with Churchill
as First Lord of the Admiralty, he said that, in his
experience, Churchill allowed himself to be lulled by
his naval subordinates into a policy of inaction.
This British officer, incidentally, agrees with the
criticism of Churchill's conduct in the last war.
-2-
242
Admiral Sir Roger Keyes told the House of Commons last
November, on leaving his post as the head of the Commandos,
that this force, created primarily for daring offensive,had
been hobbled by the War Office. He stated flatly:
"After fifteen months of directing the
Commandos and having been frustrated in
every worth-while offensive action I tried
to undertake, I most fully endorse the Prime
Minister's contention of the strength of the
negative
which controls the war-making
machine power
in Whitehall.
"Today we have a fighting Prime Minister,
but unfortunately he is handicapped not only
by the same kind of machine in Whitehall as
existed in the last war, but with an even
greater force apparently with constitutional
power."
Admiral Sir Herbert Richmond makes a similar criticism:
"At the beginning of the War the pernicious
catchword was 'Time is on our side'. That delu-
sion was swept away when France capitulated, but
now a new and not less mistaken catchword is
taking its place, 'the allied resources outweigh
those of the enemy'. The importance of resources
is unquestioned, but he wins who uses them with
foresight, intelligence and vigour. So far there
has been little of these in the direction of the
war. Opportunities have been missed - Trondhjem,
Dakar, Crete and, if Admiral Keyes is right, in
the refusal to make any use of the picked and well
equipped Commando forces. The bravery of the
fighting men at sea, on land and in the air can
do nothing if the hands which direct lack the
qualities needed."
("The Fortnightly", January, 1942)
243
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON. D.C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
Bith the compliments of British Air Commission,
who enclose Statement No. 18 - Aircruft Despatched for week ended January 27, 1942 - Dated January 29, 1942.
The Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
January 30, 1942.
244
STATEMENT NO. 18
AIRCRAFT DESPATCHED FROM THE UNITED STATES
DURING WEEK ENDED JANUARY 27, 1942
DESTINATION
TYPE
ASSEMBLY POINT
BY SEA
BY AIR
FLIGHT DELIVERED
FOR USE IN CANADA
CESSNA
Canada
T 50
12
CONSOLIDATED
Cataline Caneda
1
CURTISS
Kittyhawks Middle East Port Sudan
39
Canada
14
GLENN MARTIN
Baltimore Middle East Port Sudan
24
GRUMINA
U.K.
5
Martlett II U.K.
NORTH AMERICAN
Canada
Mustang
U.K.
1
Harvard II
U.K.
42
FAIRCHILD
U.K.
U.K.
1
9
VULTEE
Stinston 049 U.K.
TOTALS
British Air Commission
January 29, 1942.
U.K.
4
115
28
245
C
0
P
Y
SAFE HAND
BRITISH EMBASSY,
WASHINGTON, D.C.,
CONFIDENTIAL
W.T.612/12/42
30th January, 1942.
Dear Mr. Dietrich,
I enclose a copy of a secret memorandum which I have
received from London on the subject of postage stamps. I am
afraid this has taken a long time to reach me owing to a delay
in the mail, and it is probably now rather out of date particularly in view of the action which you have taken under the
Freezing Order. However, I am sending it in case it contains
any new information which is of interest to you.
Some of the information in the memorandum comes from
secret sources and it should therefore be treated with rather
more than ordinary care.
Yours sincerely,
(Sgd) W. Ritchie.
Mr. Frank Dietrich,
Room 279. U.S. Treasury Department,
Washington, D.C.
WR:TMI
T.612/12/42
COPY
246
HEMORANDUM
SECRET.
ENEMY EXPORTS OF POSTAGE STAMPS.
GENERAL.
1.
The German authorities have for years controlled the
external and internal traffic in postage stamps with almost
greater severity than the movement of notes, securities,
bills of exchange, cheques and coins. The reason for this
very close attention is that rare stamps afford an easy opportunity for hoarding and transferring capital without attracting public notice.
Purchases of stamps in Germany by foreigners or for
foreign account officially have been permissible only when
such transactions were paid for in foreign currencies or
"free"marks. The use of registered marks or other mark
2.
categories has been strictly prohibited. In addition, there
has been a system of export licensing.
3.
Direct purchases and sales - normal business between
dealers - has been permitted but, apart from this, recognised
dealers have often been permitted to exchange single stamps,
lots or collections with dealers in other countries. Such
traffic has been subjected to very close and expert supervis-
ion to ensure that no illicit transfer of capital takes place.
THE HOME MARKET.
4.
There is evidence that many German citizens are buying
stamps as a protection against inflation. In this they are
merely following the practice adopted during and after the
last war, when it was found that the possession of postage
stamps WAS a convenient and inconspicuous way of investing
capital with an international value. A recent visitor to
Germany confirmed that foreign stamps were commanding a much
higher price in Germany than in other countries.
-2-
247
There is a report from Geneva that Swiss stamp-dealers
are doing a roaring trade with German buyers, and prices have
5.
risen 50 per cent in the last few months. (It is not clear
how this is achieved under existing arrangements but paragraph
16 may provide the answer). The Germans show a particular
interest in complete sets of British Colonial issues because
these have a good international value.
6.
It is significant that on October 4th the Reichswirt-
schaftsminister issued a decree forbidding trade in used or
unused stamps of enemy countries. The order prohibits the
exhibition, offer and sale of such stamps either singly, in
lots or collections.
Special mention was made in the order of issues of
Great Britain and all her Colonies, Dependencies, Protectorates and Mandates; Australia: India: Indian States; Canada;
New Zealand; South Africa (including South West Africa): Sudan;
Egypt: Irak; and the Soviet Union.
7.
The effect of this order has been to immobilise much
of the German dealers' capital.
8.
OUTSIDE INTEREST IN GEHMAN ISSUES.
9.
German military victories have resulted in intense
interest in German issues. The philatelist is an inveterate
"headline hunter" and will pay high prices for any stamps
which have a "news value".
A report from Stockholm shows that there is a special
interest in provisional issues, 1.e. the normal peace-time
10.
issues of overrun countries which have been surcharged to
show that these countries are under military occupation.
THE EXTENT OF OFFICIAL INTERIST IN EXPORTS.
The key point is the extent to which the German Government are interested in the export of enemy issues to the outside world, and particularly to the Americas. Other and more
scrupulous Governments have shown so much interest in postage
stamps as a means of obtaining revenue and foreign exchange
11.
that it seems unlikely that the Nazis have overlooked this
road to easy money.
248
-3- If peace-time activities are a guide to war-time tactics, then the German Government are involved up to the hilt.
12.
Between 1935 and 1939 they issued nearly 100 special issues
over and above those required for ordinary postal needs and
these were mainly for the foreign collectors. The German
postal authorities maintained a special department to supply
collectors with all current German stamps - or issued under
German auspices - at face value. This is an old dodge in
the philatelic game, and in considering it one must remember
that almost the entire proceeds are profits. As no services
have to be given in return for the sale of the stamps, the
only expenses to offset against receipts are the costs of
printing and material.
13.
There has also been a suggestion that the Germans are
&eliberately issuing stamps which have certain deformities,
counting upon the fact that collectors will pay higher prices
for these "deformities". This is very likely, but there is
no information to confirm it.
14.
It is interesting to note that the issues of enemy-
occupied territories can be obtained in unused condition in
Germany at less than face value. There is also evidence that
the Germans have been buying up copies of a 50 franc French
stamp, recently issued, which bears the portrait of Guynemer
(the French air ace of the last war).
ENTHODS OF EXPORT.
It seems to be generally agreed by those who have investigated the stamp traffic that the most prevelent method
15.
of exporting to the Americas is by the L.A.T.I. service.
Large quantities can be exported without taking up much
space. There is also a suggestion that the diplomatic bag
is used for the purpose.
16.
There is information from a reliable source that the
Commercial Secretarist of the German Legation in Berne are
sending stamps to the Americas by L.A.T.I. on a large scale.
British Colonial stamps (see paragraph 5) are their special
interest. It may seem odd that the Germans should purchase
stamps for the sake of re-selling them, but there is a simple
explanation of this. A complete set of a certain issue will
raise a higher price than if the stamps were sold individually.
This, German dealers may have incomplete sets which can be
increased considerably in saleable value if the missing stamps
-4-
249
can be purchased. Furthermore, stamps bought in Switzerland
are paid for in Swiss francs, whereas they can be sold for
American currencies.
There is also the suggestion that Germany may have
despatched dies to South America and are having German is-
17.
sues produced locally for collector purposes. There is no
information to support this, but it is a possibility which
cannot be excluded.
THE USE OF NEUTRALS.
Certain neutral dealers are assisting the Germans by
exporting their stamps. This has been proved by intercep-
18.
tions and seizures at Bermuda and Trinidad. Whether they
are acting for the Germans or dealing independently for personal profit is immaterial. Each stamp which is sold outside
Germany represents additional revenue, usually paid in
foreign exchange.
The principal dealers are in Switzerland and Liechtenatein - Staiger of Zurich, Babaeff of Geneva and Stauffenegger
of Vaduz are three of the more prominent. There are also one
or two dealers in Portugal and, in a small way, in Sweden.
19.
SMUGGLING.
20. It is believed that, apart from L.A.T.I., the chief
method of export is to have them smuggled by a member of a
ship's crew. Because they are such small articles - several
hundred can be packed into a medium-sized envelope - it is
exceedingly difficult to find them. Even if a ship were
combed from top to bottom, it is probable that a hoard would
not be discovered. It is a battle of wits between the smuggler
and the searcher, with the cards stacked in favour of the
former.
There is reason to believe that many of the Portuguese
ships sailing to New York have "collections" on board, and
that Spanish ships sailing to the Americas are similarly used.
21.
The only clear evidence is that the crews of the American Export Line ships are working with gangs of snugglers
22.
operating in Lisbon, and that their activities are on a grand
scale.
There are two gangs at work. One is organised by a
Swiss named Kubli, assisted by a Belgian journalist L'Ohr and
23.
-5- -
250
a Portuguese, A. Lomelino Lyra (known as Toni) of the International Trading Corporation, Rossio 93. Lisbon. They work
with three members of the Exeter crew. John Boning, linenkeeper, who is believed to be brains of the trip; Harold
Ehlers (known as "Long Harry"), a deck steward aged 39. who
recently carried a parcel valued at 1,500 dollars and brought
back the money in notes on the return voyage: and an IrishAmerican who has not yet been identified.
24.
The second gang is organised by Sulmanis, a dealer in
Lisbon who is known to be in constant communication with
Germany. They work with members of the crew of the Excalibur,
of whom Frank Horning is the leader.
According to one report, these two gangs are despatching unused German stamps, which can be sold at a profit of
500 per cent in the United States.
25.
AMERICAN BUYERS.
26.
The principal buyers are said to be refugees from
Europe, operating in New York.
J. & H. Stolow are probably the most prominont offenders.
Many consignments to this firm have been seized at Bermuda
and they are known to be using the L.A.T.I. service. They
are also receiving many of the stamps snuggled in the American
Export Line ships.
27.
28.
Other buyers are:-
Eliot M. Malton, Inc., New York.
Agruba, New York.
Schoenbach's Stamp Exchange, New York.
Bolaffi, New York,
Stamp Export & Import Corp. (President Bela
Sekula), New York,
Tankel, New York,
Fatoullah, New York
Atlantic Stamp Co., New York.
Carl Marks & Co., Inc., New York,
H. B. Zeitlin, New York.
CONCLUSIONS.
29.
It seems clear that there is an extensive traffic in
enemy stamps and that this is operated with the assistance or
the approval of the German Government.
-5-
250
a Portuguese, A. Lomelino Lyra (known as Toni) of the International Trading Corporation, Rossio 93. Lisbon. They work
with three members of the Exeter crew. John Boning, linenkeeper, who is believed to be brains of the trip; Harold
Ehlers (known as "Long Harry"), a deck steward aged 39. who
recently carried a parcel valued at 1,500 dollars and brought
back the money in notes on the return voyage; and an IrishAmerican who has not yet been identified.
24.
The second gang is organised by Sulmanis, a dealer in
Lisbon who is known to be in constant communication with
Germany. They work with members of the crew of the Excelibur,
of whom Frank Horning is the leader.
According to one report, these two gangs are despatching unused German stamps, which can be sold at a profit of
500 per cent in the United States.
25.
AMERICAN BUYERS.
26.
The principal buyers are said to be refugees from
Europe, operating in New York.
27. J. & H. Stolom are probably the most prominent offenders.
Many consignments to this firm have been seized at Bermuda
and they are known to be using the L.A.T.I. service. They
are also receiving many of the stamps snuggled in the American
Export Line ships.
28.
Other buyers are:-
Eliot M. Malton, Inc., New York,
Agruba, New York.
Schoenbach's Stamp Exchange, New York.
Bolaffi, New York.
Stamp Export & Import Corp. (President Bela
Sekula), New York,
Tankel, New York.
Fatoullah, New York
Atlantic Stamp Co.. New York.
Carl Marks & Co., Inc., New York.
H. B. Zeitlin, New York.
CONCLUSIONS.
29.
It seems clear that there is an extensive traffic in
enemy stamps and that this is operated with the assistance or
the approval of the German Government.
-630.
251
The traffic can be divided into two categories:(a) The export of new unused issues in enemy and occupied
territories which are in demand in neutral territories. This trade can be carried on without any inter-
ference with internal trade because the supply of
stamps is always equal to the demand, although this
does not necessarily mean that sufficient can be exported to meet the demand;
(b) The export of stamps which have an international value.
In this category can be included used and unused
stamps of all countries which are rarities or are in
special demand. The British Colonial issues mentioned
in paragraph five are an example. The export of such
stamps would be made from stocks or from purchases
within the European area.
31.
It is possible that as regards (b) there is a tug of
war between private and official interests inside Germany.
As shown in paragraph four there is a tendency to hoard
stamps as a protection against inflation, whereas it is in
the official interests to prevent money being invested in
postage stamps which might otherwise be lent to the State.
It is also in German interests to sell these stamps overseas
and so to convert them into foreign exchange.
These facts give added significance to the recent
decree forbidding trade in British stamps. The effects of
32.
this are fairly clear. There will be a certain number of
"black market" dealings, but, in general, dealers will find
that a large part of their capital has been frozen. Probably
the next step will be an official offer to purchase these
stamps and they will then be sold overseas.
The extent of the existing traffic cannot be estimated reliably. It has been suggested that it amounts to
33.
about £5,000,000 per year, and it would be unwise to assume
that this is an over-estimate. The stamp trade is always a
flourishing one, and if skilfully exploited it can yield substantial results.
The fact must be faced that so far the Germans have
been very successful. Control at Bermuda over packages sent
34.
through the mails is probably effective, but most of the
trade does not pass through Bermuda. It is also reasonable
to assume that the Germans will expand this trade if possible,
and the r ecent decree regarding British stamps foreshadows a
drive in a new direction. If this is to be defeated, it is
essential that prompt action is taken.
252
-35.
As regards the smuggling, there are two ways of try-
ing to check this. The first is to have a careful search at
Bermuda. The second is for action by the United States
authorities. There can be no doubt that the latter would be
the more effective, partly because more time would be available
and partly because there would be greater opportunities for
examining the crews as they tried to go ashore with their
hauls.
GENERAL SECTION,
Neutral Trade Dept. I.
M.E.W.
Copy:ec 12-2-42
253
PLAIN
AF
London
Dated January 30, 1942
Rec'd 1:45 p.m.
Secretary of State,
Washington.
442, thirtieth
FOR THE SECRETARY OF THE TREASURY FROM CLSADAY.
In addition to the daily and WEEKLY press sum-
maries prepared by the British Ministry of Information
and which, at the Ambasandor's request, are being forwarded regularly by air to Washington with one copy
marked for Treasury, attention is now called to a
telegraphic press digest prepared by the Embassy representative of the Coordinator of Information and
forwarded daily to the NEW York office of the Coordinator of Information and thence by teletype to
its Washington office. The Ambassador suggests that
this SERVICE likewise may be of interest to the SEC-
retary of the Treasury C.S well as to SOME officials
of the State Department.
WIN.NT
DD
254
January 30, 1948
Mr. Livesey
Mr. D. W. Bell
will you please send the attached cable from the Secretary of the Treasury
to High Commissioner Sayre, Manila (Fort Hills).
FD:kaa 1/29/42
c
255
0
P
Y
DRAFT OF CABLE TO BE TRANSMITTED TO THE HIGH COMMISSIONER OF THE
PHILIPPINE ISLANDS
For Sayre from Secretary of the Treasury.
Reference your No. 30 January 26th. Account of Philippine Treasury
credited with $23,000,000 during the period November 27th through
December 24th, including last credit of $10,500,000 based on radio No.
10, December 23, from Queson. Apparently Treasury has reimbursed
Philippine Treasury for substantial amount of checks now in your
custody. Please furnish separately total amount of payments, receipts
and deposits for restoration of balance shown in the account Treasurer
of United States with Philippine Treasury subsequent to transcript of
account of November 25th, the last received by Treasury. Upon receipt
of such information consideration will be given to further credits to
account of Philippine Treasury if it can be determined that it is
entitled to further credit. Can it be accertained from information
available to you whether checks in your custody are included in total
payments in account of Treasurer of United States referred to above.
WTH:mlb 1-29-42
Copy:00:1-30-42
256
TELEGRAM SENT
MEV
This telegram must be
paraphrased before being
communicated to anyone
January 30, 1942
4 p.m.
other than a Governmental
agency. (BR)
UNITED STATES HIGH COMMISSIONER,
MANILA (FORT MILLS, PHILIPPINE ISLANDS)
18
For Sayre from Secretary of the Treasury.
Your 30 January 26, 10 a.m. Account of
Philippine Treasury credited with $23,000,000
during the period November 27th through December
24th, including last credit of $10,500,000 based
on radio no. 10 DECEMBER 23, from Quezon. Apparently
Treasury has rEimbursEd Philippine Treasury for substantial amount of checks now in your custody. Please
furnish separately total amount of payments, receipts
and deposits for restoration of balance shown in the
account Treasurer of United States with Philippine
Treasury subsequent to transcript of account of
November 25th, the last received by Treasury. Upon
receipt of such information consideration will be
given to further credits to account of Philippine
Treasury if it can bE determined that it is entitled
to further credit. Can it be ascertained from information available to you whEthEr checks in your custody
are included
257
-2- #18, January 30, 4 p.m., to Manila.
are included in total payments in account of
Treasurer of United States referred to above?
HULL
(FL)
FD:FL:BMcB
Treasury Department
'Division of Monetary Research
Date
To:
Miss Chauncey
For your files.
MR. WHITE
Branch 2058 - Room 214
258
19
259
Buenos Aires
JW
This telegram must be
paraphrased before being
communicated to anyone
other than a Governmental
Dated January 30, 1942
Rec'd 6 p.m.
agency. (br)
Secretary of State,
Washington.
182, January 30, 6 c.m.
Referring to the 110 million dollar loan
credit for Argentina arranged with the Treasury
Department and the Export-Import Bank in December
1940 official statistics published here yesterday
indicate that Argentine in 1941 had en aggregate
positive trade balance of 187 million pE808 88
compared with n negative balance of 71 million pe808
in 1940 and had A positive belence with the United
States (allowing for estimated differences between
"tariff values" and "real values") of roughly 175
million pesos PS contrested with n substantial negative
balance for 1941 enticipated at the time of the
financial conversations in 1940. As the official
Export figures are understimpted the true trade
balance with the United States was probably at least
250 million DESOS.
It is believed the above may be of interest
to Warren
260
-2- #182, January 30, 6 p.m. from Buenos Aires.
to Werren Pierson in view of talks I had with him
at Rio de Janeiro. HE and the Secretery of the
Treasury may also wish to consider what would be
their position in the EVENT that Congress when it
meets should approve the loan credit.
ARYOUR
KLP
261
February 4, 1942
Secretary Morgenthau
Mr. White
In connection with our Stabilization Agreement with
Argentina - as yet unratified - you may be interested in the
attached cable.
Ambassador Armour reports in the cable that Argentina's
total trade balance in 1941 showed an excess of exports of
187,000,000 pesos compared with an excess of imports of
71,000,000 pesos in 1940. The excess of exports with United
States will probably be officially reported at 175,000,000
pesos in 1941 (actually possibly as much as 250,000,000 pesos)
contrasted with Argentine predictions of excess of imports
during the negotiations in 1940.
Ambassador Armour suggests that these data may be
interesting should the Argentine Congress approve our Stabilization Agreement at its forthcoming session.
AS:da: 2/4/42
262
CABLE
From: Lisbon
Dated: January 30, 1942
Rec'd: January 31, 1942
Federal Reserve Bank of New York,
New York.
#5
In order strengthen our gold reserve request you
obtain license and convert $10,000,000 into gold to be
held by you earmarked our account. You will receive
Bank Manhattan New York $7,000,000. Please cable execution.
(Signed) Banco de Portugal.
(Received by telephone from Federal Reserve Bank, New
York, 11:00 a.m., 1-31-42)
ec
TREASURY DEPARTMENT
263
INTER-OFFICE COMMUNICATION
DATE January 30, 1942
TO
Secretary Morgenthau
CONFIDENTIAL
FOR
FROM Mr. Dietrich
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£39,000
£12,000
Open market sterling remained at 4.03-3/4, with no reported transactions.
For account of the Central Bank of China, the Federal Reserve Bank of
New York purchased £200,000 from the Bank of England at 4.03-1/2.
The Canadian dollar discount narrowed to 11-5/8% at the close, compared
with 11-7/8% yesterday.
The Cuban peso, which had been quoted at par until January 28 and at a
premium of 1/16% thereafter, advanced to 1/4% premium today.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Argentine peso (free)
Brazilian milreis (free)
Colombian peso
Mexican peso
Uruguayan peso (free)
Venezuelan bolivar
.2360
.0516
.5775
.2065
.5250
.2720
There were no gold transactions consummated by us today.
No new gold engagements were reported.
In London, spot and forward silver remained at 23-1/2d and 23-9/16d
respectively, equivalent to 42.67$ and 42.78
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.
2
RESTRICTED
G-2/2657-220;
264
No. 616 M.I.D., W.D. 11:00 A.M., January 30, 1942.
SITUATION REPORT
I.
Pacific Theater.
Philippines: There was light fighting all along our lines
yesterday, with enemy air activity negligible. Activity in Mindanao
is limited to patrolling. In the Visayans there is no change. Hawaii:
No further reports of hostile activity. Malaya: Official communiques
report Japanese advances on the east coast and in the center. No
change on the west. Air action continues over Singapore. Burma:
Preperations for an attack on Moulmein continuo. Air action over
Rangoon is reported on a reduced scale. Australasia: No further reports have been received on the progress of the Japanese convoy in the
Macassar Straits. It is believed, however, that that force is still
being subjected to heavy Dutch and American air and sea bombardment.
Aerial activity by both sides continues, but there is no important
change in the general situation throughout this area. West Coast:
further reports of enemy activity.
II.
No
Eastern Theater.
Ground: Both sides report continuous fighting in spite of
deep snow and severe cold. The Germans report defensive fighting in
the Donets area. The Russians claim to have captured Barvenkova and
Lozovaya (75 miles south of Kharkov).
III.
Western Theater.
No activity of importance has been reported.
IV.
Middle Eastern Theater.
Ground: British Middle East Headquarters announced the
capture of Benghazi by Axis forces January 30. Press reports indicate
the British forces south of Benghazi were forced to retire from the
city. The main Axis effort was northward along the coastal plain
coordinated with a flanking attack northwest out of Zt. Msus. This
flank attack succeeded in cutting the road north of Benghazi and the
status of British forces in this area is somewhat obscure. An Axis
screening force is in operation east and northeast of Zt. lisus, Minor
actions are reported from this area.
Air: Malta is still under Axis air bombardment. Present
aerial activity in North Africa is largely confined to attacks on rear
areas and supply lines.
RESTRICTED
265
January 31, 1942
9:07 a.m.
HMJr:
Colonel
Donovan:
Yes, Bill.
I've followed all that through. Now I'll give
reaction right off.
you something in writing, or I'll give you my
HMJr:
I' d rather have your reaction.
D:
My reaction is that while weaknesses - the important weaknesses can be cured by help.
HMJr:
I see. Financial?
D:
of any kind.
HMJr:
of any kind. I see.
D:
HMJr:
D:
And even though it's so important - you see,
they're containing a greater force up there than
are being used below.
I see.
And even if it weren't for this, it's got to be
taken, that's my judgment.
HMJr:
D:
Yeah. And you think it's.....
And I think that would - it's particularly important
because Burma will probably be lost.
HMJr:
Or closed.
D:
Yes.
HMJr:
To Rangoon.
D:
That's right.
HM,Jr:
D:
Right. Well, that's all -- I don't need any more.
All right.
HM,Jr:
Very much obliged.
D:
All right, Henry.
266
January 31, 1942.
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Mr. White's Office
January 31, 1942
9:30 A. M.
Present: Mr. White
Dr. Soong
Dr. Soong called on Mr. White at Dr. Soong's request.
Dr. Soong said that he would like to have Mr. White inform the
Secretary of his conversation with the President on Friday, January 30.
The Ambassador and Dr. Soong had arranged through the State
Department for a conference with the President. Dr. Soong said he
had wished to take up two points with the President, as follows:
1. To make a plea for greater participation by the Chinese Goverrment in the Committee (presumably British and the United States)
now deciding the distribution of war materials as among the various
countries. He said that he appreciated the fact that they could not
have an important say in this distribution, but that they would like
to have their relationship to the problem formalized so that China's
point of view could be assured of an adequate hearing. Soong did not
indicate what the President's reply to his request was.
2. The second point he took up with the President was that of
providing means of transportation by air line between India and China.
He said if they could get 100 planes like the Douglas transport planes
(but wi thout the seats and other unnecessary equipment) they would be
able to transport 12,000 tons of freight each month between Kunming
and Sodiya, after allowing for enough gasoline to carry planes both
ways. They had been promised 35 such planes during 1942. Soong was
pressing for 100 such planes quickly, inasmuch as they feared that the
Burma Road would be interrupted. He said that Rangoon was now closed
by enemy submarines, for how long he did not know.
The President seemed favorable to the idea and told Soong to take
it up with Hopkins and some others. The President thought some planes
could be taken off the present commercial lines for the purpose.
267
-2Dr. Soong said that he had not intended to speak to the
President of the loan because his understanding with Secretary
Morgenthau was that they were to await Mr. Fox. However, while he
was talking with the President, Secretary Hull telephoned to the
President about something relating to space in the Japanese Embassy
and according to Dr. Soong, the President asked Hull about the
Chinese loan. Soong gathered from the President's subsequent remarks that Hull said they were going to take the matter up with
him at the cabinet meeting and that it might be done through legislation. Dr. Soong remarked to the President that it might take too
long to have the loan arranged if it were to be done by a Congressional Act and thought it might be done more quickly through LendLease arrangements. The President said they would see.
Mr. White asked Mr. Soong whether he still thought that consideration of the loan could wait for Fox's return. Mr. Soong said,
"No, in view of the delay in Fox's arrival, and at the rate things
are going in Malaya, Singapore might fall soon and it would be unfortunate if it fell before monetary arrangements were completed."
He thought it would be a great help if both the monetary arrangements
and the Planes they were asking for could be announced soon and
simultaneously.
268
January 31, 1942
10:04 a.m.
HM, Jr:
Mr. Harry
Harry.
Hopkins:
How are you?
HM,Jr:
I missed you last night.
H:
Well, I am sorry, but, by God, along about 5
o clock I kicked up a devil of a fever,
HM,Jr:
H:
HM,Jr:
H:
So I only heard
But thie morning I feel fine again.
You do?
Yeah. I took some medicine and went to sleep.
My fever is all gone.
HM,Jr:
Good for you.
H:
I think I got a little cold.
HM,Jr:
Oh, that's too bad!
H:
Hen
HM,Jr
Yes, sir.
H:
There's organized in town here ...
HM,Jr:
H:
HM,Jr:
Yeah.
you know, when Churchill was here, the joint
staffs
Yeah.
and they are going to have three or four
H:
very important sub-committees.
HM,Jr:
H:
Yeah.
And the work of those things is going to be
extremely important during the war.
269
-2HM,Jr:
H:
Yes.
Now, they ought to have a place to work where
they've got real security
HM,Jr:
Yeah.
H:
and where
and nobody
elsenobody
is there.can get in the building
HM,Jr:
Yeah.
H:
Now, I, of course, as usual, have some bright
ideas. And the War Department - Marshall called
me up about it, and I thought of the Federal
Reserve Building.
HM,Jr:
Yeah.
H:
And I called up Marriner.
HM,Jr:
Yeah.
H:
And Marriner gave me, of course, a long song and
dance about what he was doing for the Army and
for you, all of which I know nothing about.
HM,Jr:
Yeah.
H:
And it may be perfectly true.
HM,Jr:
Yeah.
H:
But I wonder if you could give me any hint as
to whether you think that should be followed up
HM,Jr:
or not, or should we let it drop. He promptly
came back and offered us a couple of rooms and
twenty office rooms, but that won't do the trick.
Well, the President, at Cabinet yesterday, told
H:
He did?
HM,Jr:
Yeah.
H:
Well, that's just as good, of course.
them that he had turned over to them the Public
Health Building.
270
-3HM,Jr:
He told Paul McNutt then and there that they
could move in at once.
H:
Uh huh.
HM,Jr:
To Public Health.
H:
You mean this joint staff?
HM,Jr:
Yeah.
H:
He had the two buildings in mind.
HM,Jr:
Well, he said the joint staff could have the
Public Health Building here, and that they
could move out temporarily to Bethesda.
H:
Uh huh.
HM,Jr:
So Paul McNutt said, "How?" He said, "Well, see
H:
HM,Jr:
McIntyre."
(Laughs)
So McNutt, who's smart, says, "But Mr, President,
you ve already spoken to McIntyre."
H:
Yeah.
HM,Jr:
But the President told him that he would have to
H:
Good.
HM,Jr:
So I think that takes care of you.
vacate at once.
H:
Yeah. What do you think
HM,Jr:
What?
H:
HM,Jr:
W:
What do you think about the Federal Reserve. Do
you think they'11 last here? Throughout the war?
Is it going to last?
Well, I mean do you think they can hold onto that
building with the
-4HM,Jr:
271
I don't know.
H:
.....with the pressures that will be around here.
HM,Jr:
I don't know. They - I'd like to turn that over
H:
All right.
HM,Jr:
H:
in my mind.
Because...
There's no hurry about it at all, because what I
wanted was a building for this.
HM,Jr:
Well, I.....
H:
And I thought about those two buildings.
H:
Well, as of yesterday, you have those buildings.
Wonderful, because that Public Health Service is
HM,Jr:
Yes, it is.
H:
Yeah.
HM,Jr:
And you can protect it.
H:
Yeah. All right, old boy.
HM,Jr:
Okay. Now, take care of yourself.
H:
I'm going to.
HM,Jr:
Thank you.
H:
Good-bye, Henry.
HM,Jr:
a damn nice building.
272
January 31, 1942.
MEMORANDUM FOR THE SECRETARY'S FILES
Conference in Secretary Morgenthau's Office
January 31, 1942
10:30 A.M.
Present: Secretary Morgenthau
HOW
Secretary Jones
Dr. Viner
Mr. White
(Mr. Foley was later
called in.)
Mr. Jones said that he would like to know about the Chinese pronosal now being considered. The Secretary asked him what he would like
to know about it and Jones replied that all he knew of it was what he
heard at the Cabinet meeting on January 30. Secretary Morgenthau then
stated the State Department and Treasury Department had been working
for more than a month on the proposal and recounted very briefly the
developments during the past month up to the time of the Cabinet meeting. The Secretary gave Jones a copy of the letter which he had sent
to Secretary Hull on Thursday and which he said would give the gist of
the points to be discussed. Jones read the letter carefully and asked
whether there was agreement that aid should be given. Secretary
Morgenthau told him that he had talked with Stimson and Marshall and
they felt it was important to give China financial aid, as did the
President and Secretary Full. The Secretary then showed Mr. Jones a
draft of the suggested joint resolution and said the Treasury thought
that might be adequate along with a brief letter from the President.
He also gave Secretary Jones a copy of the draft of a message which
the State Department had prepared.
The Secretary commented that the draft was probably too long.
Secretary Jones agreed and felt that the joint resolution accompanied
by a brief letter would be adequate.
Secretary Jones said he had but one suggestion to make in the draft
of the resolution and that was to substitute "Secretary of Treasury with
the approval of the President is hereby authorized" for the phrase
"the President is authorized". He said it would give more protection
to the President and "take the heat off him". The change would make
it necessary for the Chinese to come to the Secretary of the Treasury
rather than to the President for terms, funds, etc. Secretary Morgenthau
acquiesced. Secretary Morgenthau stated that it should be clear that
the request for financial assistance by China of this amount was justified only on political and military grounds.
273
-2The Secretary asked Jones what he thought the next step should
be and Jones said that they should get Hull to agree to the resolution and then submit it to the President. Jones thought that there
wouldn't be any trouble in Congress in securing passage of the Bill.
Secretary Hull was telephoned and Mr. Jones explained to him
over the phone that he (Jones) agreed with Secretary Morgenthau's conclusion that the loan had best be asked of Congress and in the form
indicated in the resolution. He also explained to Secretary Hull the
change he (Jones) would like to make in the wording, substituting
"Secretary of the Treasury with the approval of the President" for
"the President". Secretary Hull agreed with the change and with the
resolution. In the conversation it was agreed that they would try
to see the President as soon as possible to obtain his approval.
It was decided that in the meantime Mr. Jones would get a let-
ter from Secretary Hull to the President, setting forth his (Hull's)
reasons why he feels financial aid should be given at this time; while
Secretary Morgenthau was to draft letters from Secretary Knox and
Secretary Stimson to the President setting forth their reasons why
they favored financial aid to China now, and also prepare a draft of
a letter from the President to the Speaker of the House and of the
Senate which would accompany the resolution.
An hour or so later the Secretary and Secretary Jones saw the
President. The Secretary had with him a preliminary draft of a letter
which was to accompany the resolution. The President approved the
resolution and changed a few words in the letter and approved the
letter.
Drafts of letters for Secretary Stimson and Secretary Knox were
also prepared and sent to each of them (Stimson was in New York and
Knox was in North Carolina) to obtain their signatures. They signed
the letters and they were returned by Monday morning.
Nell
1/31/42
274
This is a photostat of
JR given to Secretary yesterday
with handwritten notations and
changes by J.H.Jones.
This is your copy. Does it
take care of what you had : in mind?
FM
MR. FOLEY
1/80/48
JOINT RESOLUTION
275
To authorize the President of the United
States to render financial aid to Chine,
and for other purposes.
China has for then four years valiently
orces of Japanese agression; and
financial and economic alc to China will
.er ability to oppose to Forces of am sion; and
AS the defense of Clina it vital to the clease
sited States: Therefore be It
esolved by the Senate and House of Letives
with the
approval
nited States in Congress assembled, That President
authorized, on behalf of the Ited States, to loan
extend credit or ive other financial rid to China in an
mt not to exceed in the aggregate $500,000,000 at such
or times and upon such terms and conditions as the
of the Treasury w it The approval of the
meal shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
ition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
the Treasury not otherwise appropriated, such sum or sums
to exceed $500,000,000 as may be necessary to carry out
provisions of this Joint Resolution.
:38 ;HW; BB: SS/ mp 1/30/42
HDW
Responsible officials, both of this Government and of the
Government of China, have brought tc my attention the existence
of urgent need for the immediate extension to China of economic
and financial assistance, going beyond in amount and different
in form from such aid 88 Congress has already authorized. I beLieve that such additional assistance would serve to strengthen
China's position as regards both her internal economy and ber
with aket milder effectiveness
capacity in general to function affective
in our common effort.
I urge, therefore, the passage by Congress of appropriate
legislation to this effect and attach therewith suggested draft
of a joint resolution which would accomplish this purpose.
JOINT RESOLUTION
277
To authorize the President of the United
States to render financial aid to China,
OK
and for other purposes.
the
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
278
Letters prepared but not submitted to the
sident for signature.
279
January 31, 1942
My dear Mr. Speaker:
Responsible officials, both of this Government
and of the Government of China, have brought to my
attention the existence of urgent need for the immediate
extension to China of economic and financial assistance,
going beyond in amount and different in form from such
aid as Congress has already authorized. I believe that
such additional assistance would substantially strengthen
China's position as regards both her internal economy and
her capacity in general to function effectively as an
ally with us in our common effort.
I urge most strongly, therefore, the immediate
consideration by Congress of appropriate legislation
to this effect and attach hereto a suggested draft of
a joint resolution which would accomplish this purpose.
Yours sincerely,
The Honorable,
The Speaker of the House of Representatives.
280
Responsible officials, both of this Government and of the
Government of China, have brought to my attention the existence
of urgent need for the immediate extension to China of economic
and financial assistance, going beyond in amount and different
in form from such aid 88 Congress has already authorised. I be-
substantially
lieve that such additional assistance would serxe to strengthen
China's position as regards both her internal economy and her
capacity in general to function effectively as an ally with us
in our common effort.
mn may
counderation
I urge, therefore, the passage by Congress of appropriate
a
a
legislation to this effect and attach therewith suggested draft
of a joint resolution which would accomplish this purpose.
JOINT RESOLUTION
281
To authorise the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or suns
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
282
Copies to Secy hull and Secretary Jones
'e delivered by messenger. Copies to
Secretary Stimson and Secretary Knox were
handed to Dr. White who will see Asst. Secy
Patterson this afternoon and will enclose
Secretary Knox' copy in a letter which is
being transmitted to Secy Knox today.
283
January 31, 1942
FROM:
THE SECRETARY OF THE TREASURY
TO:
THE SECRETARY OF NAVY
For his information.
284
January 31, 1942
FROM:
THE SECRETARY OF THE TREASURY
TO:
THE SECRETARY OF WAR
For his information.
285
January 31, 1942
FROM:
The Secretary of the Treasury
TO:
The Secretary of State
For his information.
286
January 31, 1942
FROM:
THE SECRETARY OF THE TREASURY
TO:
SECRETARY JONES
For his information.
237
January 31, 1942
My dear Mr. Vice President:
Res onsible officials both of this Government and of the Government of China, have brought
to my attention the existence of urgent need for
the immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such additional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with ;reat military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto B suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
The Honorable,
The Vice President of the United States.
288
January 31, 1942
My dear Mr. Speaker:
Responsible officials both of this Govern-
ment and of the Government of China, have brought
to my attention the existence of urgent need for
the Immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such additional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto a suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
The Honorable,
The Speaker of the House of Representatives.
289
JOINT RESOLUTION
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
figh
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WAEREAS financial and economic aid to China will
increase ner ability to oppose the forces of aggression; and
see
IREREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed 500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
290
DEPARTMENT OF STATE
WASHINGTON
January 31, 1942
Dear Mr. President:
I refer to Generalissimo Chiang Kai-Shek's request
for an immediate credit to China of $500,000,000 to
assist him in China's prosecution of the war.
China is now in her fifth year of war against
aggression and has had to draw very heavily upon her
own resources. Certain loans have been made to China
through the Federal Loan Agency, mostly in connection
with the purchase of strategic materials. These loans
have been used to buy supplies in this country, but
China now needs cash to be used within, or from within,
its own borders, and I strongly recommend that you ask
Congress to authorize loans, or credits, or both, to
China up to $500,000,000. The brilliant resistance to
aggression which the Chinese have made and are making,
and their contribution to the common cause, deserve the
fullest support we can give.
Sincerely yours,
The President,
The White House.
Greener
291
THE SECRETARY OF THE NAVY
WASHINGTON
January 31, 1942
My dear Mr. President:
I refer to the urgent request which this
Government has received from Generalissimo Chiang
Kai-shek to help him, by financial assistance, to
maintain more effectively the morale of the
Chinese people. Recent military developments in
the Pacific and difficult economic and financial
conditions in China have made necessary remedial
action of a substantial character.
The military operations which the armies of
China under the Generalissimo are carrying on and
are planning to carry on are of extreme importance
to us. It would be very unfortunate if we were to
overlook any possibility of checking the impairment of China's morale resulting from the growing
internal difficulties in China. I am convinced
that the financial assistance which the Generalissimo has requested would make an effective contribution to the maintenance of China's morale and
military strength.
I strongly recommend, therefore, that we should
grant the Generalissimo's request without delay.
Faithfully,
The President,
The White House.
Frank et nor
January 31, 1942
My dear Mr. President:
I refer to the urgent request which this
Government has received from Generalissimo Chiang
Kai-shek to help him, by financial assistance, to
maintain more effectively the morale of the
Chinese people. Recent military developments in
the Pacific and difficult economic and financial
conditions in China have made necessary remedial
action of a substantial character.
The military operations which the armies of
China under the Generalissimo are carrying on and
are planning to carry on are of extreme importance
to us. It would be very unfortunate if we were to
overlook any possibility of checking the impairment of China's sorale resulting from the growing
internal difficulties in China. I am convinced
that the financial assistance which the General-
issimo has requested would make an effective contribution to the maintenance of China's morale and
military strength.
I strongly recommend, therefore, that we should
grant the Generalissimo's request without delay.
Faithfully,
Frank Knox
The President,
The white House.
HDW:JV:8P 1/31/42
293
WAR DEPARTMENT
WASHINGTON
January 31st, 1942.
My dear Mr. President:
The confidential information which has been
coming to me during the past few weeks indicates that
the difficult economic and financial situation within
China is impairing her military effort.
Our information indicates further that substantial financial aid must be given to China quickly
if we are to have assurance that recent and prospective
military developments will not too seriously weaken the
morale of the Chinese people.
Any substantial financial help that can be
given to China at this time can not but help strengthen
her striking power.
I therefore urge for your consideration that
the financial assistance which I am informed the
Generalissimo is requesting be granted expeditiously.
Faithfully,
The President,
The White House.
Hungththmuson
294
January 31st, 1942.
My dear Mr. President:
The confidential information which has been
coming to me during the past few weeks indicates that
the difficult economic and financial situation within
China is impairing her military effort.
Our information indicates further that substantial financial aid must be given to China quickly
if we are to have assurance that recent and prospective
military developments will not too seriously weaken the
morale of the Chinese people.
Any substantial financial help that can be
given to China at this time can not but help strengthen
her striking power.
I therefore urge for your consideration that
the financial assistance which I am informed the
Generalissimo is requesting be granted expeditiously.
Faithfully,
The President,
The White House.
O.K.
R.P.P.
(Srq) Harry h Stimom
295
Suggested Draft.
My dear Mr. President:
The confidential information which has been
coming to me during the past few weeks indicates
that the difficult economic and financial situation
within China is impairing her military effort.
Our information indicates further that substantial financial aid must be given to China quickly
if we are to have assurance that recent and prospective military developments will not too seriously
weaken the morale of the Chinese people.
Any substantial financial help that can be
given to China at this time can not but help
strengthen her striking power.
I therefore urge for your consideration that
the financial assistance which I am informed the
Generalissimo is requesting be granted expeditiously.
Faithfully,
Henry L. stimson
The President,
The White House.
As
HDW:JV:gp
taken
to
1/31/42
Under
Jan. 31, 1942.
1/31/42
the
JOINT RESOLUTION
296
To authorize the President of the
United States to render financial
aid to China, and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with he approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
297
THE WHITE HOUSE
WASHINGTON
January 31, 1942
My dear Mr. Vice President:
Res onsible officials both of this Government and of the Government of China, have brought
to my attention the existence of urgent need for
the immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such additional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto a suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
Principal
The Honorable,
The Vice President of the United States.
THE WHITE HOUSE
298
WASHINGTON
January 31, 1942
My dear Mr. Speaker:
Responsible officials both of this Government and of the Government of China, have brought
to my attention the existence of urgent need for
the immediate extension to China of economic
and financial assistance, going beyond in amount
and different in form from such aid as Congress
has already authorized. I believe that such additional assistance would serve to strengthen
China's position as regards both her internal
economy and her capacity in general to function
with great military effectiveness in our common
effort.
I urge, therefore, the passage by Congress of
appropriate legislation to this effect and attach
hereto a suggested draft of a joint resolution which
would accomplish this purpose.
Sincerely yours,
finance Minuel
The Honorable,
The Speaker of the House of Representatives.
1/31/43
299
Secretary Jones' suggested revision
(first line of third WHEREAS)
JOINT RESOLUTION
300
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
SHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is of vital importance:
Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time OF times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
from attached
photostat
JOINT RESOLUTION
1/31/4
301
To authorize the President of the
United States to render financial
aid to China, and for other purposes.
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will increase
her ability to oppose the forces of aggression; and
WHEREAS the defense of China is of the greatest possible
importance: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the Secretary
of the Treasury with the approval of the President is hereby
authorized, on behalf of the United States, to loan or extend
credit or give other financial aid to China in an amount not
to exceed in the aggregate $500,000,000 at such time or
times and upon such terms and conditions as the Secretary of
the Treasury with the approval of the President shall deem
in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
JOINT RESOLUTION
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
hith
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
TREASURY DEPARTMENT
303
INTER-OFFICE COMMUNICATION
DATE
TO
FROM
Secretary Morgenthau
January 31, 1942
E. H. Foley, Jr.
Attached is a copy of the Joint Resolution as approved
by the President.
Secretary Jones suggests the following:
"WHEREAS the defense of China is of the greatest
possible importance"
in lieu of the third "Whereas" clause which reads:
"WHEREAS the defense of China is vital to the defense
of the United States. II
Our language in this respect follows the language of
the Lease Lend Bill. Secretary Jones' point is that the
Generalissimo can come back and ask for another loan if
Congress in a special bill says that the defense of China
is vital to the defense of the United States.
S., 7h.
JOINT RESOLUTION
304
To authorize the President of the United
States to render financial aid to China,
and for other purposes.
with
WHEREAS China has for more than four years valiantly
resisted the forces of Japanese aggression; and
WHEREAS financial and economic aid to China will
increase her ability to oppose the forces of aggression; and
WHEREAS the defense of China is vital to the defense
of the United States: Therefore be it
Resolved by the Senate and House of Representatives
of the United States in Congress assembled, That the
Secretary of the Treasury with the approval of the President
is hereby authorized, on behalf of the United States, to loan
or extend credit or give other financial aid to China in an
amount not to exceed in the aggregate $500,000,000 at such
time or times and upon such terms and conditions as the
Secretary of the Treasury with the approval of the President
shall deem in the interest of the United States.
Sec. 2. The authority herein granted shall be in
addition to any other authority provided by law.
Sec. 3. There is hereby appropriated out of any money
in the Treasury not otherwise appropriated, such sum or sums
not to exceed $500,000,000 as may be necessary to carry out
the provisions of this Joint Resolution.
305
January 31, 1942
I asked T. V. Soong to come and see me at quarter of
seven Saturday night, and I read to him the joint resolution
and told him how I had started last Thursday to work on
this thing and told him what we'd done and how we were
going up Monday on the Hill, and he should let the Generalissimo know, but impress upon him not to give out any
publicity until the publicity came out of Washington.
Any leaks would be very harmful. Soong said this would
be very pleasing to the Generalissimo to learn that this
was going to go through. He asked me how long it would
take, and I said I thought from one to two weeks. He said
he hoped it would pass before the fall of Singapore. I
asked him if he thought it would fall, and he said, "Yes."
He said that if for no other reason, the water question.
He said there was a great shortage of water, and that they
got most of their water from Johore. Then he went on to
say that weren't things terrible in Bengasi, and he said
that until Americans got into this thing he didn't think
the thing would go well. The Americans have demonstrated
that they know how to fight.
He told me that when he was with the President Friday
morning, that the President called up Hull about some question
of taking over the German and Japanese Embassies, and in-
cidentally mentioned the question of a loan. Then Hull told
the President that Hull and I were going to talk to the
President at Cabinet, and that we were recommending to do
it through Congressional action. He said the President
seemed a little bit surprised and also showed by his remarks
that he had heard nothing about it. So I said that we had
only worked it out that morning, and that when I brought it
to the President today, it only took him a few seconds to
read the resolution and to approve it. And I told him we
appreciated how much the Chinese had done during the last
four years, and they of all people should receive help at
this time.
306
JAN 31 1942
My dear Mr. President:
Attached for your information is a
copy of a press release relative to the suspension
by the Treasury Department of personnel in Schering
Corporation who have been closely associated with
the Schering Company in Germany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our investigation.
Faithfully yours,
(Signed) E. Morgenthau. In
Secretary of the Treasury.
The President,
The White House.
Enclosure
Search Service is 12:30 pm
n.m.c. copies to Thompson
307
JAN 31 1942
My dear Mr. Secretary:
Attached for your information is a copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated
with the Schering Company in Germany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our investigation.
Very truly yours,
(Signed) 3. Morgenthan, its
Secretary of the Treasury.
The Honorable
The Secretary of the Navy.
Enclosure.
n.m.c
by Messenger
DJS:BB:1hh/mp 1-30-42
Steen 2:00
copies to Thompson
308
JAN 31 1942
My dear Mr. Secretary:
Attached for your information is 8 copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated
with the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) R. Morgenthan, and
Secretary of the Treasury
The Honorable
The Secretary of War
Enclosure
By Messenger Steen 2:00
DJS:BB:1hh/s 1-31-42
copies to Thompson
n.m.c.
309
JAN 31 1942
My dear Dr. Sush:
Attached for your information is a copy
of a press release relative to the suspension
by the Treasury Department of personnel in
Schering Corporation who have been closely
associated with the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) N. Morganthau, Jr.
Secretary of the Treasury.
Dr. Vannovar Bush,
Office of Scientific Research
and Development,
Washington, D. C.
Enclosure
n.m.c.
By
Messenger
File
DJS:BB:1hh 1-30-42
Saby
Thoupan
310
JAN 3 1 1942
My dear Mr. MeNutt:
Attached for your information is a
copy of B press release relative to the suspension
by the Treasury Department of personnel in Sehering
Corporation who have been closely associated with
the Schering Company in Germany.
Treasury representatives have been
supervising American Schering since the United
States entered the war, and the action referred
to in the press release resulted from our investigation.
Very truly yours,
(Signed) H. Morganthau, Jr.
Secretary of the Treasury.
Hon. Paul V. MeNutt,
Administrator,
Federal Security Agency,
Washington, D. C.
Enclosure
m.c.
By Hand- Soley 1:40
DJS:BB:1hh 1-30-42
311
JAN 31 1942
My dear Dr. Jewett:
Attached for your information is a copy of
a press release relative to the suspension by
the Treasury Department of personnel in Schering
Corporation who have been closely associated with
the Schering Company in Germany.
Treasury representatives have been supervising
American Schering since the United States entered
the war, and the action referred to in the press
release resulted from our investigation.
Very truly yours,
(Signed) E. Morgenthan. Jr.
Secretary of the Treasury.
Dr. F. 8. Jewett,
President,
National Academy of Sciences,
Washington, D. C.
Enclosure
Copies Thoughou
By
Messenger Saby 11:46
n.m.e.
DJS:BB:1hh 1-30-42
312
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Thursday, January 29, 1942.
Press Service
No. 30-3
The Treasury Department today suspended Dr. Julius Weltzien,
$60,000-a-year president of Schering Corporation, Bloomfield, N. J.,
manufacturers of anti-shock vaccines, hormones, sulfa compounds
and other pharmaceutical products essential to the war effort.
Seven others were also suspended from further activity as
members of Schering's staff. Three of the seven were:
Ernst Hammer, promotion manager, salary $22,000, formerly in
the South American department of Schering A. G., Berlin, and at
one time its representative in South America.
Hans Erdmann, director of engineering and maintenance
departments, salary $10,000, formerly a designer of chemical
equipment for Schering A. G., Berlin.
Martin Bernhardt, head of the Schering legal department and
comptroller of the corporation, salary $9,400, a former vicechairman of Schering A. G., Berlin.
The suspension bars the eight individuals from the Schering
premises, blocks their personal accounts, and all employees are
forbidden to communicate with them without Treasury consent.
The Treasury Department believes that today's action smashes
completely a long-range German scheme to control an important
segment of the pharmaceutical market in the western hemisphere,
and enables the United States to take full advantage of the vital
research now under way in the Schering laboratories at Bloomfield.
Dr. Weltzien as late as 1938 held one of the most important
positions in German industry as president of Schering A. G. Berlin,
the second largest pharmaceutical corporation in Germany and the
control board of Schering's subsidiaries concentrated in South
America and other parts of the world.
As early as 1933. Schering A. G., Berlin, undertook a longrange scheme to maintain its world-wide economic position. The
Treasury charged that, as a part of this scheme, Hermann Goering
in 1937 ordered the sale of Schering's subsidiaries in the western
hemisphere to Swiss interests.
Dr. Weltzien, who personally directed the expansion of the
German Schering interests in South America and other parts of the
world, transferred his offices from Berlin to this country in 1938
when he assumed the presidency of the Bloomfield plant.
312
TREASURY DEPARTMENT
Washington
FOR IMMEDIATE RELEASE,
Thursday, January 29, 1942.
Press Service
No. 30-3
The Treasury Department today suspended Dr. Julius Weltzien,
$60,000-a-year president of Schering Corporation, Bloomfield, N. J.,
manufacturers of anti-shock vaccines, hormones, sulfa compounds
and other pharmaceutical products essential to the war effort.
Seven others were also suspended from further activity as
members of Schering's staff. Three of the seven were:
Ernst Hammer, promotion manager, salary $22,000, formerly in
the South American department of Schering A. G., Berlin, and at
one time its representative in South America.
Hans Erdmann, director of engineering and maintenance
departments, salary $10,000, formerly a designer of chemical
equipment for Schering A. G., Berlin.
Martin Bernhardt, head of the Schering legal department and
comptroller of the corporation, salary $9,400, a former vicechairman of Schering A. G., Berlin.
The suspension bars the eight individuals from the Schering
premises, blocks their personal accounts, and all employees are
forbidden to communicate with them without Treasury consent.
The Treasury Department believes that today's action smashes
1
completely a long-range German scheme to control an important
segment of the pharmaceutical market in the western hemisphere,
and enables the United States to take full advantage of the vital
research now under way in the Schering laboratories at Bloomfield.
Dr. Weltzien as late as 1938 held one of the most important
positions in German industry as president of Schering A. G. Berlin,
the second largest pharmaceutical corporation in Germany and the
control board of Schering's subsidiaries concentrated in South
America and other parts of the world.
As early as 1933, Schering A. G., Berlin, undertook a longrange scheme to maintain its world-wide economic position. The
Treasury charged that, as a part of this scheme, Hermann Goering
in 1937 ordered the sale of Schering's subsidiaries in the western
hemisphere to Swiss interests.
1
Dr. Weltzien, who personally directed the expansion of the
German Schering interests in South America and other parts of the
world, transferred his offices from Berlin to this country in 1938
when he assumed the presidency of the Bloomfield plant.
313
-2-
Prior to Dr. Weltzien's entry into the United States, other
key personnel from the Schering staff in Berlin had been sent into
this country and assigned to important tasks in the Bloomfield
Schering Corporation. Hammer, Bernhardt and Erdmann were brought
here as a part of this plan, Treasury officials said.
At the outbreak of the European war the network of western
hemisphere Schering corporations, then headed by the Schering
Corporation at Bloomfield, drew closer together in the effort to
hold markets for Schering A. G., of Berlin, until the end of the
war. In addition the entire network was used as a tool to raise
foreign exchange for the Nazi regime.
The Nazi scheme showed promise of succeeding until the
Treasury Department blocked all German nationals under the
President's freezing order in June of 1941.
The Treasury blocked Schering funds on June 14, 1941, and
installed supervisory representatives in the plant shortly after
the attack on Pearl Harbor. Production of Schering's vital
pharmaceutical products has continued since June under Treasury
control.
Heretofore the United States government has been unwilling
to exchange pharmaceutical secrets with Schering Corporation in
order to further development of vital drugs because it felt that
important scientific discoveries might be made known to German
agents and benefit the Axis. With the German elements removed,
cooperative experiments will be made possible and the full benefit
of Schering's important pharmaceutical research will be made
available to the United Nations.
-00o-
THE SECRETARY OF THE NAVY
WASHINGTON
February 3, 1942
314
My dear Henry:
Thank you for that letter of January 31 including the statement concerning the offices of the
Schering Corporation. I was glad to have this
information.
Yours sincerely,
Transatora
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
315
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE JAN 31 1942
TO
Secretary Morgenthau
FROM E. H. Foley, Jr.
Re: Werner von Clemn
Pioneer Import Corp.
A Federal grand jury in New York on Thursday
indicted Werner von Clemm and certain of his associates
for conspiracy to violate the freezing regulations and
customs laws. The basis for the indictment is that Werner
von Clemm, operating through the Pioneer Import Corporation,
conspired with other persons, including his brother in
Europe, and certain German officials who were acting in
cooperation with the German army, to bring diamonds confis-
cated by the Nazis in Belgium or Holland into the United
States for sale.
The conspiracy contemplated that the diamonds
would be marked as originating in Germany and thus brought
into the country without obtaining a license from Foreign
Funds Control, because at the date of the transactions
German assets were not yet frozen, although both Belgian
and Dutch were. Werner von Clemn is a cousin of von Ribbentrop's
wife.
-2-
Foreign Funds Control and investigators of
the Customs Bureau have been working with the United
States Attorney's office on this case for over a year.
It is contemplated that the trial will begin within
approximately a month.
9.47h
316
317
515.32
JAN 04 1942
My dear Mr. Secretary:
I have received your letter of January 27,
1942 (Eu 811.34544/1610) in which you state
that the Secretary of the Navy has requested
that the question of the admission into the
United States under bond of articles for use in
or aboard British ships being refitted in the
United States be taken up with the Treasury
Department.
In connection with this matter, your atten-
tion is invited to the communication addressed
to the Treasury Department by the Department of
State under date of April 7, 1941 (PR), requesting. in view of A note from the British Ambassador,
that the collectors of customs at all seaports
be authorized to admit free of duty, as an act
of international courtesy, all articles consigned
to the British Advisory Repair Mission, in care
of the Commandant of any United States Navy Yard.
In response to this request, the Treasury
Department, in a letter of April 21, 1941
(515.32), to all headquarter customs seaports,
directed that free entry be accorded to all
articles, the property of the British Government, when consigned to the British Advisory
Repair Mission, in care of the Commandant of
any United States Navy Yard in this country,
and intended for the repair or refitting of
British ships of war in the United States. A
copy of this authorization was forwarded to the
Department of State with the Treasury Department's
letter of April 21, 1941 (515.32). In a letter
318
515.32
-2of November 6, 1941 (515.32), the same collectors
of customs were directed in a blanket authorization
to accord articles of the character referred to
free entry, as an act of international courtesy,
when imported by air, as well as when imported in
vessels of war or in merchant ships. This blanket
authorization was in response to the request contained in a letter received from the Department
of State dated October 27, 1941 (PR), and a copy
of the authorization was transmitted to the Department of State with the Treasury Department's letter
of November 6, 1941 (515.32).
It is now and has been the practice, since
May 23, 1941, to accord free entry, as an act of
international courtesy, under the conditions laid
down in this Department's letter to your office of
May 22, 1941 (515.32), to articles intended for the
repair and maintenance of vessels of the British
Mercantile Marine, upon the receipt, in each instance, of a request for free entry on that basis
from the British Ministry of War Transport (formerly
the British Ministry of Shipping).
As it is now the established practice, under
the procedure outlined above, to accord free entry
unconditionally, as an act of international courtesy,
to the articles referred to by the Secretary of the
Navy, this Department would appreciate advice as to
anything further it might do to accomplish the proposal of the Secretary of the Navy.
Copies of the Department's authorizations
referred to above are again transmitted for your
ready reference and possible transmission to the
Secretary of the Navy.
Very truly yours,
(Signed) 1. Morgentham. JR.
Secretary of the Treasury.
The Honorable
The Secretary of State.
Enclosures.
Photo file n.m.c.
file to Thompeon
51532
DEPARTMENT OF STATE
9a
with
WASHINGTON
refer to
January 27. 1942
ALL, 34544/1610
My dear Mr. Secretary:
The Secretary of the Navy has asked me to take up
with you the question of having dutiable articles, consigned for use in or aboard British ships being refitted
in United States yards, admitted into the United States
in bond. I am glad to endorse the Secretary of the Navy's
proposal and should be grateful if you can give effect to
it.
Sincerely yours,
The Honorable
Henry Morgenthau, Jr. ,
Secretary of the Treasury.
R
of
515.32
COPY
November 6, 1941
CONFIDENTIAL
The Collector of Customs,
Portland, Mo., and to all other headquarter seaports and Honolulu, T. H.
Sir:
Reference is made to the Department's letter of April 21, 1941
(515.32), authorizing the admission free of duty and import tax as
an act of international courtesy of all imported articles consigned
to the British Advisory Repair Mission, in oare of the Commandant
of any United States Navy Yard in this country.
The Department is now in receipt of a request from the Depart-
ment of State that blanket authority be issued to collectors of
customs for the admission free of duty of articles of this character
when imported by air as well as on board vessels of war and merohant
ships. In compliance with the request received from the Department
of State, the Department's letter of April 21, 1941 (515.32), is
hereby extended to cover articles imported by air consigned to the
British Advisory Repair Mission, in care of the Commandant of any
United States Navy Yard in this country.
This letter shall be blanket authority, and specific authorisations in each instance shall not be required.
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT E. GASTON,
Assistant Secretary of the Treasury.
COPY
515.32
MAY 22 1941
My dear Mr. Secretary:
Reference is made to your letter of May 17, 1941 (PR 841.
85/480), enclosing a copy of a note dated May 10, 1941 from the
British Ambassador concerning the question of free entry into
the United States of certain repair parts, supplies and so forth,
which may be required for the repair and maintenance of vessels
of the British mercantile marine.
The British Ambassador requests that consideration be given
to the free entry of this material under the following conditions:
(1) The materials must be the property of the British
Government or of a department thereof.
(2) The materials must be destined for the maintenance
and/or repair of vessels of the British mercantile
marine or of vessels coming under the control of the
British Government.
(3) A request for free entry should in the case of each
ship be addressed to, and filed in advance of arrival
with, the Commissioner of Customs at Washington, D. C.
by the Ministry of Shipping.
(4) This request should in each case give assurances on
the points raised in (1) and (2) above and should
include the name of the consignee, the port at which
entry will be made, the name of the conveying vessel,
a broad general description of the materials together
with the marks and numbers on the cases, and the number
of packages of which each shipment is composed.
The Department can see no objection to the admission free
of duty of repair and maintenance material under the conditions/outlined by the British Ambassador provided that there is no waiver of
any license or permit required by law in connection with such importations. Further, in view of the statement made in the second
paragraph of your letter, no objection is perceived to the adoption
-2-
515.32
-
practice of according free entry to such material on
sceipt of requests for free entry which are addressed
tly to the Commissioner of Customs by the British Ministry
o
ipping.
By
direction of the Secretary:
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT E. GASTON,
Assistant Secretary of the Treasury.
Honorable,
The Secretary of State.
515.32
COPY
April 21, 1941
CONFIDENTIAL
The Collector of Customs,
Portland, Mo., and to all other headquarter seaports and Honolulu.
Sir:
You are hereby authorized to admit free of duty and import
tax, as an aot of international courtesy, all imported articles
consigned to the British Advisory Repair Mission, in care of the
Commandant of any United States Navy Yard in this country.
Suoh articles will in each case be the property of the British
Government and will be used in connection with the repair or refitting of British ships of war in the United States. Some ship-
ments will arrive on board vessels of war and some in merohant
ships.
The shipments will be composed of "articles, the immediate
delivery of which is necessary" within the meaning of section
448(b) of the Tariff Act of 1930, and may be released prior to on-
try in accordance with the procedure outlined in article 354 of
the Customs Regulations of 1937. In view of the nature of the
transactions the requirements of article 354 with respect to the
giving of bonds are hereby waived and it is requested that you expedite in all possible ways the release of the shipments.
In oases where it is desired to invoke the provisions of ar-
tiole 770 of the Customs Regulations of 1937, as amended, the re-
quirements of that article with respect to the giving of bonds or
stipulations are hereby wrived and all possible facilities should
be extended.
This letter shall be blanket authority for the treatment of
all importations of the character herein described, and specific
authorizations in each instance shall not be required.
Very truly yours,
(Signed) Herbert E. Gaston
HERBERT E. GASTON,
4-16-41
CB-mc
WRJ-esb 4-17-41
Assistant Secretary of the Treasury.
324
You are right, Secretary Knox; the Navy has once
more set an example and offered a challenge to the rest
of the country. On behalf of the Treasury Department
I am happy and proud to receive this ma nificent investment in America.
It is doubly welcome to me because it comes from the
shore establishments of one of our fighting services. It
shows that the men and women who work in the navy yards
and other shore stations are doing a double job for their
country. They are working day and night to supply our
fighting men with fighting weapons. At the same time
they are saving systematically, week after week, to supply
our fighting men with fighting dollars.
It will be grand news to those who serve at sea to
hear that the men and women on shore are giving them this
In , *
-2-
325
kind of active and continuous support. After all, the
men of the Navy must have new ships, planes, guns and
shells in a steady stream if they are to do their part
in winning the war. The workers in the shore establishments
and millions of others in war industries throughout the
country are making it possible, by their savings, to
provide those weapons that will smash our enemies.
I wish that I could thank every one of the thousands
who have contributed to the check that you have just handed
to me. Since that is impossible, I am going to thank them
through you, Secretary Knox. ( The people who work in the
Navy' 8 shore establishments have shown by their wonderful
response that they are all out for victory just as much as
the men who serve on the ships of war. Let the Nazis and
the Japanese look at that response, and look at it well.
-3-
It is just another example of the spirit that is going
to win the war for freedom.
326
327
January 31, 1942
My dear Mr. Luhrsen:
Immediately after the railroad wage settlement
your Association, through you and through the presidents
of many of your member brotherhoods and unions, informed
me that Railroad Labor was giving the word "Full Steam
Ahead!" to its members for participation in the Defense
Savings Program. This prompt and wholehearted support
from yourself and these other leaders was very good news
for the United States Government in facing the heavy
burdens of financing the war.
In these circumstances I am somewhat troubled to
learn from members of the Defense Savings Staff that
reports so far received on Payroll Savings Plans set up
at our request by the transportation companies show that
in general only a minor percentage of railroad employes
are taking part. These reports show that, in the case
of 72 railroads with a total of 907,657 employes, only
94,962 of that number have filed Payroll Allotment
Authorizations. I am attaching to this letter a list of
those railroads, showing the number of their employes,
the number of Payroll Authorizations filed and the percentage of participation.
Since the date on which your organization gave me
these assurances, the war effort of the United States
has been intensified and all our national needs have
increased tremendously. It is vitally important that
members recognize this situation clearly; and having
your before them the facts here presented, set themselves
without delay to make good on their undertaking of all-out
328
-2cooperation with the Government in this essential part
of its war program.
We are counting on you to pass this word on to your
associates.
Sincerely yours,
(Signed) Henry Morgenthau, Jr.
Mr. Julius G. Luhrsen,
Executive Secretary-Treasurer,
Railway Labor Executives' Association,
10 Independence Avenue,
Washington, D. C.
Attachment.
cc- Shoupson
n.m.c.
JLH
FK/hkb
STATEMENT OF RAILROAD EMPLOYEES PARTICIPATION
329
Number of
Railroads
P. L. & W.
Employees
Participants
55
40
Soo Line
7677
C. of Ga.
Ga. & Fla.
5132
5524
2625
St. L. & S. F. of Texas
N. E. Okla.
C. & W. I.
Monon
Belt Ry. Chicago
Lehigh & Hudson River
Chicago Union Station
583
Per Cent
72.7
72.0
51.1
50.3
46.8
46.3
32.2
474
293
222
160
74
1129
2250
1570
700
31.1
483
30.8
27.1
364
321
87
1000
250
225
56
6546
1557
5000
383
41
54380
53700
5729
5500
30000
3000
4400
432
25.0
24.9
23.8
21.7
21.5
21.2
21.1
19.8
19.1
19.0
16.9
16.8
16.5
15.7
15.6
15.5
14.9
14.4
14.3
13.6
13.6
12.4
12.4
11.7
10.8
10,7
10.5
10.2
10.0
9.8
15300
26451
1482
9.7
2538
Toledo Terminal
300
27
Norfolk & Port Belt
340
30
28500
2500
9.6
9.0
8.8
8.8
8.6
8.4
8.3
8.0
Burlington Rock Island
T. & P.
Pullman Co.
I. & G. N.
23000
3489
749
L. & N.
Ann Arbor
Union Ry. Memphis
C. & S.
C. G. W.
29000
6150
2143
262
800
158
1550
4000
296
C. B. & Q.
A. & W. P.
K. O. & G.
28000
4731
Des Moines Union
D. & H.
T. & N. O.
Clinchfield
M. & St. L.
758
3000
503
735
121
235
37
8400
1311
2400
15500
1249
2500
186
360
Wab.
72700
1814
Erie
24170
3291
3300
8738
1083
15000
1853
Virginian
M. K. & T.
Frisco
D. & R. G.
Lehigh & N. E.
Chicago Tunnel
B. & O. Ry.
Southern Pacific
C. M. & St. P.
W. M.
D. L. & W.
New Haven
C. & N. W.
C. St. P. M. & O.
Ill. Term.
B. & A.
C. R. I. & P.
449
8000
935
928
100
5000
432
1492
1200
22372
126
100
1779
330
STATEMENT OF RAILROAD EMPLOYEES PARTICIPATION
Number of
Railroads
Employees
Participants Per Cent
5047
406
8.0
145
114
7.9
147813
15000
12150
11159
11174
7.6
7.3
52000
3541
6.8
6.8
6.8
8014
531
6.6
15200
19000
935
6.2
1158
K. C. Term.
1625
98
C. & E. I.
N. C. & St. L.
4500
270
6.0
6.0
5699
332
5.8
T. R. R. A.
3636
207
5.7
C. V.
Sou By.
N. & W.
1500
82
5.5
42229
2125
1000
K. C. S.
Cambria & Ind.
P. R. R.
G. N.
C. N. J.
L. V.
C & O, N. K. P., P.M.
G. T. W.
B. & M.
Reading
I. C.
S. A. L.
N. Y. C.
A. C. L.
F. E. C.
Jax Term.
1100
821
756
6.1
5.0
36500
15500
1700
121000
4000
17000
495
4.8
4.7
4.6
3.3
2.9
2500
59
2.4
700
15
2.1
21000
721
331
TREASURY DEPARTMENT
WASHINGTON
January 31, 1942.
MEMORANDULI FOR THE SECRETARY:
I attach the report you asked for
about the companies which have been awarded
the Navy "E" flag.
GRAVES
332
Existence of Payroll Savings Plans in
Industrial Plants Receiving the Navy "E" Flag
Number of companies listed as receiving
the Nevy "E" Flag
82
Number of the listed companies reported
to have established a payroll savings
clan by the State Administretor
(see attached list)
45
Number of companies reported to have es-
tablished a cayroll savings plan from
which progress reports have been received by the Treasury
9
Of the 9 companies reporting to the Treasury, 3 had plans operating
in December and the percentage of participation among their employees
WAS 88 follows:
Consolidated Machine Tool Corporation,
Rochester, N. Y
Westinghouse Electric Elevator Co.,
Jersey City, N. J
E. I. DuPont de Nemours & Company,
Wilmington, Del
824 emoloyees
93%
1,281 employees
66%
62,000 employees
13%
The other 6 companies reported their plans were not in operation
December but would start on the following dates:
Carrier Corporation,
Syracuse, N. Y
Pollak Manufacturing Co.,
Jan. 1
Arlington, N. J
Jan. 1
McKay Co.
Pittsburgh, Pa
Jen. 10
J. A. Roebling's Sons Co.
Trenton, N. J
Jen. 20
Bridgeport Bress Co.
Bridgeport, Conn
Control Instrument Co.,
New York, N. Y
Feb. 1
Feb. 15
333
Existence of Payroll Savings Plans in Industrial Plants
Receiving the Navy "E" Flag
City and State
Name of company
Administrators
January 24 report
on existence
of payroll
savings plan
ontinental Gin Co.
orris Stamping & Mfg. Co.
ridgeport Brass Co.
hase Brass & Copper Co., Inc.
I. DuPont de Nemours & Co., Inc.
lehle Printing Press & Mfg. Co.
088 Printing Press Co.
ngersoll Milling Machine Co.
erican Steel Foundries
ropp Forge Co.
antam Bearings Corp.
merican Steel Foundries
R. Mallory & Co., Inc.
he Magnavox Co.
th Bend Lathe Works
Birmingham, Ala.
Los Angeles, Cal.
Bridgeport, Conn.
Waterbury, Conn.
Wilmington, Del.
Yes
Chicago, Ill.
Chicago, Ill.
Yes
Rockfort, Ill.
Granite City, Ill.
Yes
Yes
Yes
Yes
Yes
No
No
Chicago, Ill.
No
South Bend, Ind.
Yes
Indiana Harbor, Ind.
Indianapolis, Ind.
Fort Wayne, Ind.
South Bend, Ind.
No
No
No
Yes
oosier Lamp & Stamp Corp.
Evansville, Ind.
Yes
riumph Explosives, Inc.
No
heem Manufacturing Co.
Elkton, Md.
Baltimore, Md.
ational Fireworks, Inc.
West Hanover, Mass.
No
olaroid Corp.
Cambridge, Mass.
Yes
Detroit, Mich.
Detroit, Mich.
Yes
Pontiac, Mich.
Yes
Detroit, Mich.
Yes
Port Huron, Mich.
Minneapolis, Minn.
Minneapolis, Minn.
St. Louis, Mo.
Beatrice, Nebr.
Hoboken, N. J.
No
eneral Motors Corp., Fisher Body Div.
ickers, Inc.
Motors Corp., Pontiac Motors Div.
federal Screw Works
ueller Brass Co.
ofthern Pump Co.
flour City Ornamental Iron Co.
onsanto Chemical Co.
eatrice Steel Tank Mfg. Co.
Keuffel & Esser Co.
Pollock Mfg. Co.
Westinghouse Electric Elevator Co.
Crucible Steel Co. of America
John A. Roebling Sons Co.
Arma Corp.
Bausch & Lomb Optical Co.
Yes
Yes
Yes
Yes
Yes
No
Yes
Arlington, N. J.
Jersey City, N. J.
Yes
Harrison, N. J.
Trenton, N. J.
Brooklyn, N. Y.
Yes
Rochester, N. Y.
No
Yes
Yes
No
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
January 31, 1942
334
Existence of Payroll Savings Plans in Industrial Plants
Receiving the Navy "E" Flag
(continued - 2)
City and State
Name of company
Administrators
:January 24 report
on existence
of a payroll
savings plan
rd Instrument Co.
neol Machine Tool Corp.
Long Island City,N.Y.
Rochester, N. Y.
lipse Machine, Div. of Bend1x,Avia.Cor.Elmira N. Y.
Yee
Yes
No
Syracuse, N. Y.
Schenectady, N. Y.
Yes
Yes
ternational Mickel Co.
Brooklyn, N. Y.
Brooklyn, N. Y.
Long Island City,N.Y.
New York City, N.Y.
Brooklyn, N. Y.
New York City, N.Y.
march Machine Tool Co.
Sidney, Ohio
Yes
nduckey Foundry & Machine Co.
Sanduskey, Ohio
No
Yes
Edvale Co.
Cleveland, Ohio
Dayton, Ohio
Cleveland, Ohio
Cleveland, Ohio
Nicetown, (Phila.), Pa.
extile Machine Works
Reading, Pa.
No
tie Forge Co.
ansdowne Steel & Iron Co.
Erie, Pa.
Yes
Morton, Pa.
No
esta Machine Company
Pittsburgh, Pa.
No
Carrier Corp.
erican Locomotive Co.
ntrol Instrument Co., Inc.
Item Corp.
merel Bronz Corp.
- York Airbrake Co.
ward L. White Co.
Permold Works
tional Cash Register Co.
teel Improvement & Forge Co.
he Warner & Swasey Co.
stand.Steel Wks., Div. of Baldwin Loco. Burnham, Pa.
Erie, Pa.
rie Works of General Electric Co.
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
willehem Steel Co.
Bethlehem, Pa,
Yes
arnegie-Illinois Steel Co.
Homestead, Pa.
No
Pittsburgh, Pa.
Irvine, Pa.
Philadelphia, Ps.
No
Midland, Pa.
Pottstown, Pa.
Pottstown, Pa.
No
openstall Co.
tional Forge & Ordnance Co.
KF Ball Bearing Co.
Crucible Steel Corp.
Doehler Die Casting Co.
New England Auto Products Corp.
No
Yes
No
No
Yes
Wyckoff Drawn Steel Company
Pittsburgh, Pa.
Pittsburgh, Pa.
Bethlehem Foundry & Machine Co.
Bethlehem, Pa.
No
The McKay Co.
No
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
January 31, 1942
335
Existence of Payroll Savings Plans in Industrial Plants
Receiving the Navy "E" Flag
(continued - 3)
:
eadwell Engineering Company
on existence
:
:
City and State
Name of Company
: Administrators
:January 24 report
savings plan
Easton, Pa.
ansylvania Electric Steel Casting Co. Hamburg, Pa.
Nicetown, (Phila.) Pa.
erican Pulley Co.
Philadelphia, Pa.
jiing Engineers Inc.
Philadelphia, Pa.
rard G. Budd Mfg. Co.
Providence, R. I.
owne & Sharp Mfg. Co.
Knoxville, Tenn.
Fulton Sylphon Co.
ceron Iron Works
edegar Co.
keside Bridge & Steel Co.
uis Allis Co.
of a payroll
No
No
Yes
Yes
No
Yes
No
Houston, Texas
No
Richmond, Va.
Yes
Milwaukee, Wisc.
Milwaukee, Wisc.
No
Office of the Secretary of the Treasury,
Division of Research and Statistics.
No
January 31, 1942
TREASURY DEPARTMENT
336
INTER OFFICE COMMUNICATION
DATE January 31, 1942
TO
Secretary Morgenthau
FROM
Mr. Haae 104
Subject: Operation of Payroll Savings Plans in Large Companies
during December 1941
1. Attached to this memorandum is a table showing
some preliminary information on the operation of payroll
savings plans in 86 large companies during the month of
December 1941. The data shown in the table were obtained
from the companies listed therein through the direct mail
reporting system which we established two weeks ago. They
represent actual results for December in the companies listed.
2. The 86 companies shown in the table employed
506,000 persons in December. Of this number 93,850 or approximately 18-1/2 percent had pledged themselves to purchase
Savings Bonds under payroll savings plans. The average deduction from pay under the plans amounted to approximately
1 percent of the aggregate payroll of the various companies.
3. The companies listed in the table represent a random
sample of large companies operating payroll savings plans in
December. (The companies selected were those whose reports
were included in the first week's replies received to our
questionnaire.) A random sample such as this should be more
or less representative of the operation of the plan throughout the country during that month.
4. Employee participation in payroll savings plans is
undoubtedly higher at the present time than it was in Decem-
ber because the companies have had more time to canvass their
employees. We shall have preliminary data on the extent of
this participation in about three weeks when the replies to
our February 10 questionnaire begin to come in.
337
Operation of Payroll
Savings Plans in a Selected Group of Large
Companies During December 1941 1
J. Worsted Mills, Gera
kills Branch, Garfield, N.J.
lyne Manufacturing Co.,
%synesboro, Va
1,020
980
96
824
766
93
1,048
973
93
1,147
1,001
87
3,850
3,084
80
12,464
8,715
70
2,900
1,950
67
1,600
1,060
66
1,281
842
66
1,562
992
64
2,242
1,439
64
2,494
1,480
59
1,087
553
51
1,200
600
50
3,150
1,537
49
1,819
877
5,500
2,530
11,000
4,625
42
2,388
880
37
Testinghouse Electric Elevator
Co., Jersey City, N. J
Event Electric Co.
Bridgeport, Conn
Cleveland Twist Drill Co.,
Cleveland, Ohio
Kilwaukee Electric Railway &
Transport Co., Milwaukee Wis.
Bendix Aviation,
Detroit, Mich
Store, The
New York, N.
4
H. Hanes Knitting Co.
Winston-Salem, N. C
Firestone Cotton Mills,
New Bedford, Mass
Central of Georgia Railway,
Savannah, Ga
R. J. Reynolds Tobacco Co.,
Winston-Salem, N. C
Wisconsin Electric Power Co.,
Milwaukee, Wis
: payroll
4
2
48
46
2
2
2
4
2
1
Manufacturing Co., Inc.,
Carden, N. J
:savings plan
: ducted for
2
West Allis, Wie
pating
partici-
1
Perney-Trecker Corp.
savings
plans
:payroll de-
2
Rochester, N. Y
Machine & Foundry Co.
Cleveland, Ohio
!Iweukee Gas Light Co.,
Kilwaukee Wis
in payroll
of
employees
1
cellisated Machine Tool Corp.
:participating
Percentage :Percent
of
company's
.
Carbury, Conn
persons
employed
Number of
employees
1
ank H. Lee Co.
of
:
Name and address
of company
:
:
Number
3
1
1
2
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plans.
Less than .5 of 1 percent.
1
338
Operation of Payroll Savings Plane in a Selected Group of Large
Companies During December 1941 1
(Continued - 2)
Percentage
of
:participating: employees
persons
in payroll
particiemployed : savings
of
:
bore Drop Forging Co.
Number of
employees
:
Name and address
of company
:
Number
plane
pating
1,400
451
32
1,442
450
31
1,940
560
29
1,122
298
27
1,000
250
25
New York, N. Y
ith & Wesson,
4,287
1,055
25
Springfield, Mass
olley Carburetor Co
1,258
300
24
1,476
350
24
4,200
980
23
1,730
366
21
1,707
359
21
40,454
8,514
21
3,365
723
21
2,100
445
21
1,992
421
21
875
20
1,010
202
20
1,400
260
19
4,990
970
19
2,200
389
18
1,677
297
18
Springfield, Mass
rker Pen Co.
Jenesville, Wis
ask Thread Co
Hewark, N. J
Percent of
company's
payroll de-
ducted for
payroll
savings plan
2
2
1
tanley Works American Tube
Co., Omaha, Neb
M. Karagheusian, Inc.
Freehold, N. J
ew York Telephone Co.
New York, N. Y
anufacturers Trust Co.,
New York, N. Y
eatherhead Co.
Cleveland, Ohio
incinnati Street Railway Co.
Cincinnati, Ohio
orthrup Aircraft Manufac-
turing Co., Los Angeles, Calif 4,320
ombustion Engineering Co.
Inc., New York, N.
G. Corporation,
New York, N. Y.
White Motor Company,
Cleveland, Ohio
1
1
2
1
1
1
leveland Railway Co.
Cleveland, Ohio
1-State Telephone & Telegraph
.
1
Detroit, Mich
1
ew York Life Insurance Co
2
1
Jacksonville, Fla
1
Stemping Plant,
Bridgeport, Conn
nn-Lovett Co
Chicago, Indianapolis &
Chicago, Ill
Nevada Consolidated Copper
Corp., McGill, Nev
1
Louisville R. T.,
2
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December cuestionnaire
on payroll savings plans.
Less than .5 of 1 percent.
1
339
Operation of Payroll
Savings Plans in a Selected Group of Large
Companies During December 1941 1
(Continued - 3)
:
of
persons
employed
:
behester Transit Corp.
Rochester, N. Y
artford Machine Screw Co.,
Hartford, Conn
:
Name and address
of company
Number of
employees
:participating
in payroll
savings
plans
:
Number
Percentage
of
employees
:savings plan
188
18
1,600
265
17
2,712
452
17
1,239
210
17
30,600
4,800
16
5,493
866
16
1,330
200
15
Gastonia, N. C
ones & Lamson Machine Co.,
2,063
300
15
Springfield, Vt
gin, Joliet & Eastern Railway
Co., Chicago, Ill
2,045
300
15
5,975
845
14
4,141
589
14
62,000
8,070
13
1,238
161
13
66,194
8,327
13
2,393
306
13
1,983
252
13
1,397
186
13
8,267
992
12
10,986
1,286
12
19,536
2,423
12
5,249
553
11
non-Bush Shoe Co.
Milwaukee, Wis
buisville & Nashville
Railroad Co., Louieville, Ky.
hesapeake & Potomac Telephone
Co., Baltimore, Md
erican Writing Paper Corp
Holyoke, Mass
irestone Cotton Mills, Inc
arke-Davis & Co
Detroit, Mich
I. DuPont de Nemours & Co.
Wilmington, Del
onde Nast Publications, Inc
Greenwich, Conn
hrysler Corporation,
Detroit, Mich
entral Hanover Bank & Trust
Co., New York, N. Y
leveland Trust Co.
Cleveland, Ohio
linchfield Railroad Co.
Erwin, Tenn
cuntain States Telephone &
Telegraph Co., Denver, Colo
Northwestern Bell Telephone Co.
Omaha, Neb
Bell Telephone Co. of Pa.
Philadelphia, Pa
Chesapeake & Potomac Telephone
Co., Washington, D. C.
1
High Point, N. C.
Company'
:payroll de-
for
partici- : ducted
payroll
pating
1,032
Name-Millis Corp
:Percent of
1
1
1
1
.
1
1
1
.
1
.
1
1
1
1
1
1
(continued)
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plane.
Less than .5 of 1 percent.
1
340
Operation of Payroll Savings Plans in a Selected Group of Large
Companies During December 1941 1/
(Continued - 4)
:
persons
employed
:
ational Bank of Detroit,
Detroit, Mich
1,222
:participating
in payroll
:
of
:
Name and address
of company
Number of
employees
savings
plans
:Percentage: Percent of
:
Number
: company's
of
: payroll de:
for
partici- : ducted
payroll
pating
:savings pla
employees
131
11
1,831
11
5,000
550
11
Providence, R. I
iche, Incorporated,
1,529
172
11
.
1,700
170
10
.
Corp., Kimberly, Nev
nited Electric Railways Co
Providence, R. I
orthwestern Mutual Life Ins.
1,022
104
10
1,120
96
1,577
138
11,420
940
26,316
1,970
4,441
318
2,108
148
2,264
131
15,200
935
1,041
62
1,966
111
3,300
190
1,280
75
1,040
52
1,000
35
4,101
147
5,500
211
merican Telephone &
Atlanta, Ga
onsolidated Copper Mines
Co., Milwaukee, Wis
hio Bell Telephone Co
Cleveland, Ohio
uthern Bell Telephone &
Telegraph Co., Atlanta, Ga
estern Maryland Railroad
Co., Baltimore, Md
S. Metals Refining Co.
Carteret, N. J
tomac Electric Power Co
Washington, D. C
ston and Maine Railroad,
Boston, Mass
ity Bank Farmers Trust Co.
New York, N. Y
rter 011 Co.
Tulsa, Okla
rginian Railway Co.,
Norfolk, Va
amilton Manufacturing Co.
Two Rivers, Wis
Loane-Blabon Corp
Trenton, N. J
Carlton Interests,
Colorado Springs, Colo
Terminal Railroad Association
of St. Louis, St. Louis, Mo.
National City Bank of
New York, New York, N. Y
(continued)
1
9
*
9
1
Bartlesville, Okla
rragansett Electric Co.
1
ities Service 011 Company,
1
1
Telegraph Co., New York, N.Y. 16,176
8
1
7
.
7
7
6
6
6
6
6
6
1
5
4
1
4
4
*
Office of the Secretary of the Secretary,
Division of Research and Statistics.
1
Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plans.
Less than .5 of 1 percent.
341
Operation of Payroll Savings Plans in a Selected Group of Large
Companies During December 1941 1/
(Continued 5)
Number of
employees
:
:
New York, N. Y.
67
4,611
132
7,765
166
4
.
Aerican Airlines, Inc.
1,737
:savings plan
:
:
Cleveland, Ohio
: company's
of
:participating employees : payroll depersone : in payroll
partici- : :ducted
employed :
savings
payrollfor
pating
of
plans
lidland Steel Products Co.
:Percentage :Percent of
:
Name and address
of company
Number
3
est Point Manufacturing Co
West Point, Ga
Office of the Secretary of the Treasury,
Division of Research and Statistics.
2
January 31, 1942
1/ Companies selected are those with the largest number of employees among
the first 2,000 replies received to the Treasury's December questionnaire
on payroll savings plans.
Less than .5 of 1 percent.
342
TREASURY DEPARTMENT
WASHINGTON
January 31, 1942.
MEMORANDUM FOR THE SECRETARY:
Your request that we have a "Gallup"
poll about the pay-roll allotment plan
has been handled by Messrs. Kuhn, Odegard,
and Powel.
Mr. Odegard reports that he expects
the tabulation of the results will be completed the middle of next week.
GRAVES.
FIELD
ORGANIZATION News Letter
DEFENSE SAVINGS STAFF
TREASURY DEPARTMENT. WASHINGTON D.C.
JANUARY 31, 1942
NUMBER 37
WANTED-FIGHTING DOLLARS
MAKE EVERY PAY-DAY
B
BOND-DAY
UNITED STATES
DEFENSE
BONDS-STAMPS
Ask about pagrell sarings plan
The second poster in the Defense Savings Staff's new war series.
This poster, designed for display by concerns and organizations that
have adopted Pay Roll Savings, will soon be available. Also adapted
to newspaper use, it is illustrated in mat form as Campaign No. 5Ad No. 2, in the Portfolio of Newspaper Advertisements (DSS-195) recently released to State Administrators and the press.
News Letter
News Letter
Stamp Act Of '42
MUSICAL DOLLS TO BOOST SALES OF DEFENSE STAMPS
zu
7209
A notable collection of dolla - beautifully costumed and authentic
replicas of American women of history, wives of the presidents, great
ladies of all history - will soon be seen in prominent department stores
to
sell Defense
fothroughout
the Stamps
countryand
in connection
with special efforts of these stores
cus attention upon other phases
of National Defense.
YOU LICK IT
The "Defense Doll Tour
opens in Boston's Jordan
Marsh store February 2. Miss
Audrey Kargere, owner of the
collection, will be in attend-
ance and will explain the
many interesting features of
the exhibit. State Administrators will be advised of the
date of Miss Kargere's arrival
in their community.
When the dolls reach
Joliet, Illinois, on March 16,
where they will be shown by the
AND IT WILL LICK THEM
Gene Elderman Washington Post.
M. A. Felman Company. their
arrival will, it is confidently
predicted, be celebrated by
announcement that the 201 employ-
ces of this store have purchased
IN THIS ISSUE
NEW PAY ROLL SAVINGS Poster - Page 1
DEFENSE DOLL Tour - Page 3
FIELD ORGANIZATION NEWS - Pages 4 to 7
LABOR AND INDUSTRY - Pages 8 and 9
$50,000 worth of Defense Bonds.
Miss Audrey Kargere with one of
her collection of famous doll
dresses.
This is the goal of the campaign
now under way, according to Personnel Manager Marjorie Buckley, who points
out that the nearby Kankakee and Elwood Ordnance Plants have made citizens
of Joliet "national defense" conscious,
A DEFENSE STAMP BALL
SPECIAL PROMOTIONS - Pages 10 and 11
BANK Program Expands - Page 12
STAMP ALBUM Shortage - Page 13
MORE FILM STARS On Tour - Page 13
NEW YORK AND DALLAS Retail Store Plans - Page 14
NEW HANDBOOK For Education Committees Page 15
An unusual Defense Stamp Ball was held in the cities of Rock Island
and Moline, Illinois, and Davenport, Iowa, on January 23. Sponsored by
the Alpha Chapter of Phi Mu Kappa fraternity, the ball took place simultaneously in three different hotels in this metropolitan area, now an
important center of arnament production.
TO THE LADIES - Pages 16 and 17
ARTIST Contributions - Page 18
RADIO Programs and Pay Roll Savings - Page 19
PICTURES Page 20
Admission to the dance was $1 per couple but two twenty-five cent
Defense Stamps in an album were given upon presentation of admission
tickets at the door. The hotels and orchestras donated their services,
and the receipts of the check-room were given to the Red Cross.
How about promoting such an affair is your community?
-2-
News Letter
FIELD ORGANIZATION NEWS
South Dakota's state organization, which was only brought together
following the Chicago meeting in December, is progressing by leaps and
bounds. Already the state boasts a News Letter - first issue January
24 -- which includes the following highlights:
100 Rapid City firms enrolled in pay roll savings the first ten
days of a drive by a committee in charge of Marty Beckers.
More than 100 Sioux Falls firms similarly enrolled since January
10 by the Minnehaha County Committee assisted by 80 Sioux
Falls insurance men.
Bond and Stamp sales sky-rocketing in Bennett County, 0. E. Hodson,
chairman, where more than a dozen snappy rallies have been
held.
Sully County, Luther Nelson, chairman, has recorded every man,
woman and child a bond or stamp owner, including Harvey, 36hour old son of Mr. and Mrs. Arthur Haub of Onida.
John Morrell and Company, Sioux Falls, has given a stamp album with
a ten-cent stamp to each Sioux Falls school child - 9,000 of
them.
(Left) T. Henry Foster, PresBUY A SHARE IN
AMERIC
ident of John Morrell & Company,
exchanging smiles with one of the
30,000 children in Sioux Falls,
S. D., Topeka, Kan., and Ottumwa,
Iowa, to whom the company is
furnishing an album and a stamp.
"We are going to start the ball
rolling in this way," said Mr.
Foster, "and expect that the boys
SE SAY
DS AND
and girls will then help carry on
the war against the aggressor
and also start themselves on the path of patriotism
nations.
and thrift."
Chairman Andrew Hedman of Day County is an effective committeeman
in his own right, while his son, Duke, is credited with downing five Jap
planes on Christmas Day.
"We are most happy," say Administrator Christopherson and
State Chairman Walter Burke, "When we hear that your banks and
post offices cannot keep enough bonds and stamps on hand. That's
what we want to do -- sell them faster than they can be had."
News Letter
FIELD ORGANIZATION NEWS
Clermont. Florida, records the purchase of $63,315 worth of Defense Bonds and Stamps, an average of $37 for each of its 1,680
people.
WATCH OUT HITLER! When
Republicans and Democrats in
America join hands, they mean
business.
In the picture are (left),
Mrs. Pearl Waters, Republican
National Committeewoman, and
Mrs. Lennard Thomas, Democratic
National Committeewoman, getting
together for Defense Bonds at
the meeting of the Women's Division of the Defense Savings
Committee for Alabama, held
January 14.
Ted Jones. Chairman of the state theatres sub-committee for New
Mexico, brought out last August a 20-page manual offering local theatre
owners and managers a great variety of suggestions on how to make their
audiences Defense Bond conscious. Recently Chairman Jones circularized
his associates with a 7-page supplement bringing his earlier program up
to war tempo.
"A country worth fighting over
is a country worth fighting for"
--
Clarence Coleman (seated, left),
Democratic State Chairman for Washington, and Thomas Oakshott (seated,
right), Republican State Chairman,
signing joint statement in presence
of Joel E. Ferris (standing, left),
Chairman Washington State Advisory
Committee, and Saul Haas (standing,
right), State Administrator.
The 7,000 party workers of the
two political organizations were put
at the disposal of the Defense Savings Staff.
"ENLIST WITH THE DEFENDERS - BUY DEFENSE BONDS!"
-5-
1
News Letter
es
FIELD ORGANIZATION NEWS
News Letter
et
FIELD ORGANIZATION NEWS
A special meeting of the Oklahoma State Defense Savings Committee
was held in Oklahoma City on January 8. The meeting was an all-day
In Sheboygen, Wisconsin, Mr. O. L. Hall, President of the Bank of
Sheboygan, delivered an enlightening address on Defense Bonds to the
session and was featured by the announcement of Honorary Chairman,
Governor Leon C. Phillips. that 15,000 State employees under his supervision would immediately sign up for the regular purchase of Defense
Bonds and Stamps.
local Woman's Club. In the course of his talk he made the following
remarks, which should be taken to heart by everyone.
"We Americans will have to make up our minds to buy Defense Bonds in ever increasing amounts or we are going to
find that instead of the personal privilege we now have of
saving and investing a part of our earnings to provide the
purchasing power for the adjustment period which is sure to
come, it will be taken away from us by taxation in one form
or
another. Let there be no question in our minds about
that."
Pictured here from left
to right, Governor Phillips
State Chairman L. H. Wentz,
and Administrator H. Jones
conferring on the State enployees participation in the
Defense Savings Program. A
large portion of the all-day
meeting was turned over to
promotion of the Pay Roll
Hear what Goehring did to Hitler! Only it wasn't the Goering of
the German air force it was L.F. Goehring of Flaxville in northeastern
Savings Plan in Oklahoma.
Montana. who announced recently that his town had raised $65,975 in Defense Savings sales since last May, which is an average of $244.35 for
each inhabitant. The Flaxville per capita sale of Series E Bonds for
December was $62.50. Has any community exceeded this figure?
Picture at right shows
some of the more than 1500
,
(
At the University of Oklahoma
students recently conducted A whirlwind campaign which resulted in the
starting of more than 3,000 twentyfive cent stamp books on the campus.
employees of Frederick &
Nelson Department store in
Seattle, Washington, filing
up to stage to turn in pay
roll savings authorization
cards at the conclusion of
talk by Deputy Administrator Karl M. Richards.
Defense Savings Stamps are now on
sale regularly in every fraternity
and sorority house, and every campus
shop.
1
New State Leaders for Delaware
Secretary Morgenthau announced
January 27 the appointment of Henry
T. Bush. Wilmington banker, to the
chairmanship of the Delaware State
Committee. and the appointment of
Donald P. Rose. also of Wilmington,
Pledge Campaign Launched in Oregon
as State Administrator. Mr. Bush
is a former president of the Wilsington Chamber of Commerce, and
president of the Wilmington Music
School. Mr. Rose for many years
has been active in banking and
business circles in Delaware.
University of Oklahoma students
receive Stamp Albume for distribution.
To test procedures to be used in other states in conducting the
pledge campaign which will get under way throughout the country in
February, Oregon is now engaged in its pledge undertaking. A kick-off
broadcast was held the night of January 20, and the first completed
pledge cards began coming in about twenty-four hours later. High mountain roads and trails in the northeast corner of the state were covered
with snow and ice, necessitating many deliveries on horseback. A full
report on this very important experiment will be soon forthcoming.
"JOIN IN THE CAUSE BUY DEFENSE STAMPS!*
News Letter
News Letter
LABOR AND INDUSTRY
LABOR AND INDUSTRY
Last week's News Letter, page 12, carried the story of the A.F. of L.
billion-dollar goal for 1942. On January 23, the United Mine Workers of
America (CIO) issued a circular letter to officers and members of all local
unions, urging co-operation with the Defense Savings Program
of Washington last week, consideration was given to the purchase of Defense
Bonds by the various branches of our organisation and by our members.
"This is not a 2% war. declares Bulletin No. 5 of the Idaho Defense Savings Staff. Enforcing the same theme in Idaho comes a letter
from J. J. O'Connell, manager of the Potlatch Forests. reminding its
employees that "We are not playing for the little white chips now. We
are playing the big game where they use the yellow ones. Many of us
are too old to enlist in the forces defending our country, but we can
do a lot by supporting those who are in where the going is tough by increasing our Defense Savings Bond purchases. Ask yourself the ques-
"The International organisation in 1941 purchased $50,000 worth of Defense
which is the
maximum allowed any one organisation under the regulationsBonds,
of the Treasury
Department.
tion of the first button to be issued by
"At the meeting of the International Executive Board, held in the city
tion, Am doing all I can and should to back up the
On the right is an enlarged reproduc-
the Defense Bond Club to employees of Weir-
"On January 1 of this year, the International Union again made a similar
limit purchase. If rules and regulations of the Treasury Department later
permit, we will be glad to make larger purchases of these bonds.
members of the club have completed paying
for their bonds, they will receive a
similar button in red, white and blue.
"The International Executive Board endorses and urges vigorous support
of the purchase of Defense Bonds by our members. We approve the Treasury
Department's pay roll allotment plan applied to the Defense Savings Program.
We urge upon our Districts and Local Unions, and their members, that this
"This was the procedure followed generally in the mining industry in
the last World War for the purchase of Liberty Bonds.
"This is also a practical way for our members to back the armed forces
of our nation, thousands of whom are from the ranks of the United Mine Workere of
America;
many
of whom have already given their lives in defense of
our
nation
and its
institutions.
"The International Executive Board, therefore, calls upon all branches
of our organisation and our members to lend their fullest assistance in this
all-out means to total victory. We urge the of ficers of the various branches
of the organisation to co-operate fully with our members in the Local Unions,
with the respective coal operators' associations and with the government in
working out the necessary details so as to meet local and individual needs
and requirements in order to insure the success of this great program."
Signed "Yours for Victory," by John L. Lewis, President,
Philip Murray, Vice-President, and Thomas Kennedy, Secy.-Treas.
P. T. Fagan, President of District No. 5. United Mine Workers of America.
has sent a similar letter to the Local Unions in the Pittsburgh, Pa. district.
President Fagan's message asks local members to maintain the proud and envi-
able record set by the United Mine Workers during the first World War. "We
are hopeful," he concluded, "that you will continue to do your part in the
battle of freedom by buying Defense Bonds, and more Defense Bonds.
A similar method of encouraging the
purchase of Defense Bonds out of income has
been launched by the Dry Dock Savings Institu-
(
plan be utilized so that part of the earnings in stated pay periods may be
utilized and set aside for the purchase of Defense Bonds.
BOND
ton Steel in West Virginia. while they are
paying for their bonds. The button has a
white background and red letters. When
V
B.
tion of New York City. Its Victory Club operates
like a Christmas club, with weekly deposits ranging from 50d upward.
Members of the club receive the button pictured below. The National
Association of Mutual Savings Banks (60 East 42nd Street, N. Y. c.)
offers its member banks similar buttons, with the individual branch
name inserted, at moderate cost.
a Year's
JOIN THE DRY DOCK
VICTORY
CLUB
and help
WIN THE WAR
From the New York head-
quarters of the American
Thread Company. whose mill
is located in Vilimantic,
Connecticut, comes the news
that 1,516 employees joined in Pay Roll Savings be-
tween December 20 and Jan-
vary 3, authorising weekly
deductions of $1,997. In
addition to the foregoing.
the mill made cash sales
of Series E Bonds to 85
employees, with a maturity
value of $20,300.
News Letter
News Letter
SPECIAL PROMOTIONS
SPECIAL PROMOTIONS
On January 22, the Pocatello (Idaho) Central Labor Union adopted
a war resolution pledging its members to *co-operate fully with all
local, state, and Federal agencies for the civilian and national defense and to purchase all the Defense Savings Stamps and Bonds
that we are financially able to buy.'
The Walter Field Company. Chicago mail order house, plans to
distribute to its customers this coming year some 800,000 circulars
inviting you to "Join the 'Loyal Order of Americans' by buying as many
Defense Savings Bonds as you can." The reverse of the circular gives
an order form for purchase of Series E Bonds direct from the Treasurer
of the United States. Many business firms carrying on an extensive mail
order business or conducting a large volume of correspondence are distributing similar forms.
President Herbert Z. Hopkins of Civitan International has suggested that each Civitan Club begin immediately a Buy-A-Bond-A-Day campaign.
To stimulate club rivalry, the bond sales will be scored for purposes of
national publicity -- a $25 bond to count 10 points, $50 bond 15 points,
$100 bond 20 points, and so on. President Hopkins has pointed out that
Civitan was founded during World Var I to help solve civic problems
created by the crisis. "Civitan is now in a position to work effectively
on
a nation-wide
added,
urging
continuance of Buy-A-BondA-Day
campaignsbasis,
for ashe
long
as the
needthe
lasts.
Merrill Lynch, Pierce, Fenner and
Beane, one of the country's largest
stock exchange firms, has launched a
plan for merchandising Defense Bonds
in its 93 offices in cities through-
Pictured at the left is the
Stamp booth in Grand Central
Terminal, New York City, which
was recently opened "for the
duration." Postmaster Albert
YOUR DEFENSE SAVINGS
STAMPS HERE
TODAY!
Goldman and Deputy Administrator
John Whitney Richmond are selling stamps to children as they
sanctioned by the Treasury Depart-
marily as an investment, "on the
theory that a greater investor appeal can be made on this basis than
by patriotic argument alone, said
Leo G. Griffith, Pittsburgh Manager
of the firm. The small poster
averaged nearly $1,000 a day
tively printed in red, white, and
illustrated at the right is attrac-
since this booth was installed.
two shades of blue.
Fraternal
The January issue of Life Alsociation News carries full information on the activities of the National
Association of Life Underwriters in
have been designated as contact
men with local Defense Savings
Committees. These men, and the
organization they represent, can be of much assistance in the forthcoming pledge campaign. But the co-operation of the Lions Club is not
limited to the pledge plan - it is a long-range offer to help the De-
fense Bond Program at every point.
"SUPPORT THOSE WHO ARE SERVING -- BUY DEFENSE BONDS!*
FOR SAFETY-INCOME
ment, emphasizes Defense Bonds pri-
break their banks. Sales have
The Lions International
organization has offered to
assist the Defense Savings Progran in any way possible. State
Administrators are now being sent
cards giving the names and addresses of individual Lions who
10
out the United States. The plan,
co-operation with the Defense Savings
Program.
'Selling Bonds is no longer a hobby," said Mr. William H. Andrevs.
Jr., National Chairman of the Life Underwriters' Committee for Defense
Savings. the original peace-time idea of one day a month is
underwriters
out. Everyone in the country is working overtime
must do that too." Approximately 10,000 life underwriters are actively
at work in the country as volunteers selling bonds. They have made contact with about 8,500 firms, large and small, and have made preliminary
contacts with more than 3,000,000 employees, of which more than 1,600,000
have now been enrolled in the Pay Roll Savings Plan.
Impressive as this figure seems after little more than two months
of work, the Underwriters realise that it is less than three per cent of
the amount of Liberty Bonds sold by their organization during 1917 and
1918. The Association is asking its members to redouble their efforts.
11
News Letter
News Letter
Banks
Left, lobby desk
of the First National
Bank of Lincoln. Nebr
where customers may
conveniently purchase
Defense Savings Bonds.
Defense Stamps are not
sold at this desk, but
are available at all
Temporary Shortage of Stamp Albume
Not only has the public demand for Defense Savings Bonds run ahead
of the supply since Pearl Harbor, but the demand for Stamp Albuma has
practically exhausted post office stocks of this item.
An order for 60,000,000 Stamp Albums, in 10, 25, and 50-cent denomi-
nations is now in production. Delivery of 2,500,000 albums to two distributing centers the Fourth Assistant Postmaster General in Washington
and the Postmaster for New York City - is scheduled before the and of
January.
Re-distribution
to post offices throughout the country will be
made immediately
thereafter.
of the cashiers' cages.
Howard Freeman. cash-
ier of the First
National, has arranged
special lobby displays on Defense bonds at the bank since last summer.
The American Institute of Banking launched January 14 its national
program on behalf of Defense Savings Bonds and Stamps. Although banks
have co-operated with the Treasury since the beginning of the Defense
Savings Program, stated President George T. Newell in his letter to the
Institute's members, this initial work can be supplemented in many ways.
All bank employees, whether immediately engaged in the sale of defense
securities or not, are to be educated
on the major aspects of the Defense Bond
Program so that they can pass on this
information to the general public outside
of business hours as well as during the
working day. To get this program under
way, President Newell' letter was ac-
companied by a statement of seven objec-
tives in the defense-financing program,
and a list of ten suggestions for the
educational foruma which are to be held
by Institute's committees on public
relations.
"The var has a job for you, too!"
Defense Bond Advertisement of the Rhode
Island Hospital National Bank, Providence, Pawtucket, and Woonsocket, R. I.
"Tackle this job earnestly. Buy
Defense Bonds Now!' and make continued
purchases a regular part of your budget.
Film Stars
Recent issues of
the News Letter have con-
tained stories on the
Defense Savings activities of Dorothy Lamour
and the late Carole
Lombard. Sabu, the
Elephant Boy, is now
a Minute Man for the
Treasury Department.
The young Indian star
and his pigny elephant
will tour the country
as guest of the newspaper carrier boys to
aid them in their canpaign to sell Defense
Stamps and Bonds. The
services of Sabu have
been placed at the disposal of the Treasury
by Alexander Korda, producer of Rudyard Kipling's "Jungle Book,"
Sabu, the *Elephant Boy
starring Sabu. United
Artists will furnish Bernie Kamber, of the Publicity Department, to be
in charge of the tour. Sabu visited Washington briefly on January 26;
his itinerary will take his to 24 other cities in the country.
Judy Canova. famous Republic Pictures singing star, visited Charlotte, N. C., on January 18. as an honor guest at the thirtieth annual
convention of the Theatre Owners of North and South Carolina. Miss
Canova participated in a public sale of Defense Bonds by the Mecklen-
Evening Bulletin, Providence,
burg Defense Bond Committee, along with James J. Walker, former Mayor
of New York City.
Rhode Island.
12
13
News Letter
IN THE SCHOOLS
Another Cartoonist Recruit
PORJICTORY
BUY
News Letter
J. R. Williams, creator of
AND
THIS
the famous "Out Our Vay" charac-
ters, has drawn the cartoon (left)
for the exclusive use of the American Labor Press on behalf of the
Defense Savings Program for Vic-
tory.
Parent-Teachers Invest in Defense Savings
The National Congress of Parents and Teachers, Inc. invested $25,000
of its endowment funds in Defense Savings Bonds last month when its Executive Committee net in Chicago. Mrs. James K. Lytle, of Los Angeles, as
national treasurer, made the purchase. She said it was done to encourage
state P. T. A. congresses, districts, councils, the 28,000 local units,
and
thefashion.
2,500,000 members of the association to invest their own money in
similar
NEW YORK STORES PUSHING SALES OF
STAMPS AND BONDS
Shortly before the Executive
Committee sessions opened, James
A detailed plan for the promotion and sale of Defense Savings
Clarke of the Education Division,
Defense Savings Staff, conferred
with Mrs. Lytle, Mrs. William
Kletzer, president, and other DA-
Stamps and Bonds by New York stores
has been prepared by the Retail
Publicity Committee of the Greater
New York Defense Savings Staff.
The plan is presented in a nineteen
UNTIL THE JOB' DONEI'
tional P. T. A. officials about
page mimeographed brochure which
ways in which the organisation
could expand its Defense Savings
activities among its members and
Committees can secure from William
General endorsement of the Defense
Savings Program has been part of
the chairmen of retail divisions
of large city Defense Savings
Howard of R. H. Macy & Company.
Some of the suggestions in this retailers manual:
"Wherever possible a permanent window should be assigned to the
promotion of Defense Savings Stamps.
"Telephone order board transactions should be concluded with
some such reference as:
in co-operation with the schools.
Mrs. James K. Lytle, national P. T.
A. treasurer, and James Clarke, De-
the National Congress official
program for a good many months.
fense Savings Staff, Washington, D.C.
Handbook for Education Committees
Pictured at right is the cover of the
new Handbook for Education Committees,
And how many Defense Stamps can I charge to your account
today,
Mrs. Jones?' or.
'Mrs. Jones, I thought you might be interested to know that
Blanks has made arrangements to sell Defense Stamps. We
have a special booth on the Street Floor and I hope you will
buy some the next time you are in the store.
"Each store should establish its own sales goal for a specified
period of time. One method would be to take 1% of the
store's annual volume as a goal to be reached in two months."
Courtesy copies of this manual, and of the Dallas, Texas. retail
stores plan will soon be sent to State Administrators.
prepared by the Education Division of the
Defense Savings Staff after consultation
with many Defense Savings workers in the
field. The Handbook is intended to help
Education representatives on State and
Local Committees, or sub-committees, with
problems of procedure connected with the
promotion of Defense Savings among pupils
and teachers. It will also help Education representatives co-ordinate their
work with other local Defense Savings
HANDSOOK
Education
COMMITTEES
SEITER
STATES
activities.
Copies of this Handbook for every Defense Savings Committee member who
Education may be obtained through State Administrators, 179.
vere representing recently notified of its publication in Field Memorandum No.
14
15
News Letter
TO THE LADIES
News Letter
TO THE LADIES
General Federation Women's Club Pres-
ident Signs First Pledge in the East
At the annual session of the
General Federation of Women's Clubs
held in Washington last week, Mrs.
Sara Whitehurst, President, signed
the first of the new Defense Savings pledges in the East. Setting
an example to the members of her vast
organisation, Mrs. Whitehurst promised
to invest $100 in Defense Bonds every
month.
Harold N. Graves, Assistant to
Secretary Morgenthau, watches
The General Federation offered to
co-operate with the State Defense Sayings Committees in the pledge campaign
scheduled for this Spring. *Our State
Federations will help in any way that
they can," Mrs. Whitehurst said. *Perhaps we can most effectively aid by
educating our members to the need of systematically purchasing Defense
Bonds and Stamps. They must understand that it is only by putting money
while Mrs. Whitehurst signs
pledge.
regularly into Defense Savings that they will help ward off inflation.
Mrs. John D. Robinson, Chairman of Bonds and Stamps for the General
Federation, announced a contest to be held among the States, with prises
to be offered the three State Federations having the highest percentage
of members (or their husbands) signing pledges. Mrs. Robinson said,
"This does not mean that our members must canvass for pledges, although
we will be happy to do that if it helps the local Defense Savings Committees. But it does mean that we will check our clubs to find out how many
members have signed the new pledges. The first prise for the contest
will be a $100 Series , Bond, contributed by Mr. William P. Witherow,
who was a speaker at the General
Federation's Defense session.
American Women's Voluntary Services, Inc.
Helps to Sell Defense Bonds and Stamps
Attractively uniformed, Mrs. TreherneThomas, who is Secretary of the American
Women's Voluntary Services, Inc., and Mrs.
Alexander Hamilton of the New York Branch,
cane to Washington to offer the services
of their organization to retailers through-
out the country who might wish to set up
booths to sell Defense Stamps and Bonds
and distribute literature. Major Benjamin
Name, who heads the retailer a advisory
committee on Defense Savings, introduced
them to retailer's representatives who
had come to Washington to discuss the promotion of Defense Savings in their stores.
A week after this visit the National
Major Name, Mrs. TreherneWomen's Division of the Defense Savings
Thomas, and Mrs. Alexander
Hamilton
Staff called upon Miss Anita Phippe.
Chairman of the Washington Unit of the
American Women's Voluntary Services, to
supply volunteers for the Defense Savings booth at the General Federation of Women's Club annual board meeting at the Mayflower Hotel.
ANVS Pledge Canvassers
The American Women's Vol-
untary Service workers answered
questions put to them by the
delegates to the General Federation of Women's Club Board Meeting about the forthcoming pledge
campaign. They also managed to
secure quite a number of signatures from women attending the
convention, who promised to buy
Women of the General Federation
listened intently to Harold N Graves
Defense Bonds and Stamps regu-
and Leon Henderson. who talked about
larly and in specified amounts.
methods of controlling inflation.
Mr. Graves spoke on the regular purchase of Defense Bonds: Henderson on
the need for effective price control
legislation. Afterwards the audience
participated in a lively discussion
on the subject of inflation, and kept the two speakers busy answering
questions. (See picture at right).
- 16
Other Units of the AMVS,
AWVS volunteers sign up GFWC dele-
gates in pledge campaign held at
Washington's (D. c.) Mayflower
Hotel. Army officers look on.
17
are active throughout the country,
and can be of help to Defense
Savings projects.
News Letter
News Letter
ON THE AIR
Artists
Almost every mail brings
to the Defense Savings Staff
ideas for slogans and posters.
Some of the sketches submitted
are indifferent; many of them
very good; and all have been
Radio Program for the Coming Week:
Monday, February 2. "FOR AMERICA VI SING, Dr. Frank Black's Orchestra and Chorus Guest Stars: Felix Knight. Tenor and Mary Eastman,
Soprano. 9:30-10:00 PM (EST). NBC Blue Network.
submitted in a spirit of help-
fulness and patriotism.
Monday. February 9. "FOR AMERICA WE SING. Dr. Frank Black's Orches-
tre and Chorus - Guest Stars: Arthur Carron Metropolitan Opera and
The painting illustrated
at the right was submitted by
Mr. William B. Ingraham of
Lydia Summers - Soprano, The New Opera Company, 9:30-10:00 PM (EST),
NBC Blue Network.
Springfield, Illinois. The
full effect of this striking
painting cannot be appreciated
without the colors, but Uncle
Sam's determination to wipe
the blot of the Japanese
A total of 159 radio stations have informed the Radio Section of
the Defense Savings Staff that their employees have signed up 100 per
cent for the Pay Roll Savings Plan. Sixty-six other radio stations
have installed such plans and have signed up a large number of their
islands off the flag of the
employees.
$48,000 Salary Increases in Defense Bonds
In voting the appropriation ordinance for 1942, the Mayor and
Council of Macon, Ga., granted a 10% increase in the salaries of all
City employees making less than $175 per month, the entire increase,
amounting to about $48,000 to be paid in Defense Bonds or Stamps.
"I wish it were possible, wrote
Mayor Charles L. Bowden to State Ad-
ministrator Allen, "for every firm who
grants an increase to make it on the
The total pledges from this one program amounted to $16,000 which runs the total of the three broadcasts to date to $42,000. Public
response is mounting and the sponsors of the program have definitely
decided to continue it through several weeks to come.
poster work for the Boeing Aircraft
The Williamson Candy Company of Chicago, III., was recently congratulated by the Treasury Department on their radio program, "Famous
Jury Trials, for the splendid job the company and its employees have
done on their Pay Roll Defense Savings Plan.
and its protection always.
BONDS
AND
STAMPS
Eight out of seventeen stations in Kansas are signed up 100 per
cent, making the best record by proportion of any State in the Union,
although Texas has largest number of 100 per cent stations, eleven
followed by California with ten and New York with nine.
The "Invest in Victory sketch
(left) was designed by Phil von Phul
of the things they gave to us -- for
U.S.
Indiana, Springfield, Missouri, and Albany, New York, each having two
radio stations.
our Government needs us and our support now, and we need our Government
is here when it shall be a privilege
to give back to the Government A part
ICTORY
makes these two cities the first 100 per cent cities in towns of three
or more radio stations. Other 100 per cent cities are Evansville,
The third in the weekly series of one-half hour radio shows sponsored jointly by Boston's Hotel Statler and Radio Station WBZ took place
on Saturday night, January 24. Featuring the music of Leighton Noble
and his orchestra, guest appearances and announcements on behalf of Defense Bonds and Stamps were made by Mayor Maurice F. Tobin. of Boston:
Lynn U. Stambaugh, national commander of the American Legion: Baby Rose
Marie and Pat O'Brien. motion picture stars.
same basis as we have done. The time
HUY
Participation in full by the employees of KARK, KGHI, KLRA, of
Little Rock, Arkanaas, and KFJZ, KGKO. and WBAP at Fort Worth Texas
-
United States is very evident.
and Associates, who have been doing
splendid work for the King County De
fense Savings Committee in the State of
Washington. This concern also handles
Company.
19
18
News Letter
PULLIAM EMPLOYEES BUY BONDS, TOO!
Eugene C. Pulliam,
president of Central
Newspapers, Inc., and
executive chairman of
the Indiana Defense
Savings Staff, had
been so busy urging
all firms in the State
to co-operate in the
Pay Roll Savings Plan
that he had forgotten
his own plants until
the managers of his two
radio stations and three newspapers presented him with signed applications from 209 employees. The five plants are enrolled 100%. Shown in
above, (left to right), are Howard Zinn of the Huntington Herald-Press;
Jess Batterton of the Lebanon Reporter; Victor Lund of Station WAOV,
Vincennes; Howard Greenlee of the Vincennes Sun-Commercial: Gerald A1-
bright, treasurer of Station WIRE, Indianapolis; and (seated), executive chairman Pulliam.
RAYMOND IS NO SISSY!
Eleven-year-old Raymond Bowman
of Atlanta, Ga., who is too
young to fight, but plenty big
to launder the dishes, has contracted with his mother to wash
'em up after every meal -- at
so much per washing -- to earn
money to buy Defense Stamps.
Besides this, he is scouring
the neighborhood daily for old
papers and boxes.
- 20 -
NTIAL
Stock of Series E Savings Bonds on Hand 1
January 15, 1942 to date
(In thousands of pieces)
this day
Bonds
:
Sales
:
:
Stock on hand
beginning
of day
this day
: manufactured
Stock on hand
close of
day
IBM
deliveries
this day
:
Jan.
15
16
17
6,569
6,999
7,329
19
7,966
7,966
20
21
18
320
750
445
775
163
800
none-closed none-closed
6,999
7,329
1,000
7,966
7,966
1,000
750
800
665
800
8,101
825
8,101
218
800
8,683
1,000
337
800
875
381
800
377
800
263
800
9,146
9,565
9,988
10,525
25
8,683
9,146
9,565
9,988
10,525
none-closed
none-closed
26
10,525
487
186
28
11,038
11,852
29
12,601
265
1,000
1,000
1,000
1,000
30
13,336
283
800
22
23
24
27
Office of the Secretary of the Treasury,
Division of Research and Statistics.
251
10,525
11,038
1,000
1,000
1,000
-
2,000
11,852
12,601
13,336
13,853
-
2.000
-
2,000
January 31, 1942
1 Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post offices,
(3) Federal Reserve Bank issuing agents, and (4) Treasury vaults in Washington.
CONFIDENTIA
Unfilled Orders for Savings Bonds at the
Federal Reserve Banks and the Post Office Department
January 15 to date
Unfilled
orders at
:opening of
business
Jan.
(In thousands of pieces)
Unfilled
Bonds
orders at
New orders
manufactured
close of
received
today
today
775
204
750
672
800
298
204
1,000
none-no mail
none-closed
298
204
800
800
202
704
825
1,184
1,546
1,676
1,871
1,922
1,922
1,000
2,011
2,177
2,102
2,097
2,000
1,869
2,000
750
16
455
773
17
426
298
19
298
204
204
800
86
20
202
21
86
411
800
59
59
697
800
86
22
86
569
800
50
23
50
727
800
28
24
25
26
28
27
7
434
28
7
474
none-closed
1,000 1
1,000 1
1,000 2
1,000 2
28
28
none-no mail
490
30
8
this day
1,000
660
6
on hand*
deliveries
231
550
29
bonds
IBM
455
426
15
18
business
Stock of
407
426
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Bonds in Washington vaults only.
800 2
7
7
6
8
6
875
1,000
1,000
1,000
-
-
2,000
-
January 31, 1942
Includes 400 thousand pieces manufactured for inventory in the field.
Includes 600 thousand pieces manufactured for inventory in the field.
346
CONFIDENTIA
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
Last Twenty-three Business Days of January 1942 and December and November 1941
(November 1-29, December 4-31, January 5-30)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
1941
1941
$142,323
469,591
$ 97,439
$ 37,997
$ 44,884
:
Total
1942
over
December
:
Series G - Banks
November
January
over
December
228,701
71,478
240,890
157,223
46.1%
105.3
611,914
70,059
286,310
326,140
30,446
135,983
109,475
18,978
105,035
285,774
39,613
150,327
216,665
11,468
30,948
87.6
130.1
110.5
$968,282
$492,568
$233,487
$475,714
$259,081
$ 59,442
: December
:
Series F - Banks
:
Series E - Total
December
:
Series E - Banks
January
December
over
November
:
Series E - Post Offices
January
:
:
:
Item
Percentage of Increase
Amount of Increase
Sales
96.6%
over
November
156.4%
197.9
60.4
29.5
220.0
111.0%
January 31, 1942.
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.
Daily Sales - January, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
January 1942
1
2
3
5
5
6
7
8
9
10
12
13
14
15
16
17
19
20
21
22
23
24
26
27
28
29
30
Total
All Bond Sales
Bank Bond Sales
Bond Sales
Total
Series E
Series E
Series F
Series G
Total
Series E
Series F
Series G
$ 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
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
10,187
7,902
4,706
6,444
5,721
4,830
37,483
15,059
19,939
16,597
26,239
6,933
3,830
2,507
3.701
2,243
4,319
55,666
29,510
37,933
32,123
44,637
10,700
47,670
22,961
24,645
23,041
31,960
11,763
3,830
2,507
3,701
2,243
4,319
759
14,353
11,944
14,293
13,283
14,078
3,008
759
14,353
11,944
14,293
13,283
14,078
3,008
65,853
37,412
42,639
38,567
50,358
15,530
8,835
5,155
4,886
5,161
5,908
4,655
39,000
10,549
19,375
22,257
23,392
15,820
3,946
2,285
3,538
3,973
2,652
2,239
16,599
10,551
15,566
9,850
8,004
5,344
59,545
23,385
38,479
36,080
34,048
23,403
47,835
15,703
24,261
27,418
29,300
20,476
3,946
2,285
3,538
3,973
2,652
2,239
16,599
10,551
15,566
9,850
8,004
5,344
68,380
28,539
43,365
41,241
39,956
28,058
7,095
4,967
5,318
4,826
4,930
39,997
11,504
18,394
20,123
21,594
5,022
3,569
2,656
3,223
3,845
17,516
23,125
18,636
12,422
14,432
62,535
38,199
39,686
35,768
39,871
47,093
16,471
23,712
24,949
26,524
5,022
3,569
2,656
3,223
3,845
17,516
23,125
18,636
12,422
14,432
69,630
43,165
45,004
40,595
44,802
$155,565
$500,112
$ 75,358
$307,147
$882,617
$655,677
$ 75,358
$307,147
$1,038,182
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.
Figures have been rounded to nearest thousand andwill not necessafily add to totals.
January 31, 1942.
348
TREASURY DEPARTMENT
WASHINGTON
January 31, 1042.
MEMORANDUM FOR THE SECRETARY:
In answer to your inquiry, through
Miss Chauncey: Mr. S. Albert Phillips,
who is being appointed State Administrator
for Kentucky was suggested by Senator
Barkley, as was Mr. Ben Williamson, our
State Chairman.
GRAVES.
349
JAN 31 1942
Dear Eleanor:
I know you will be glad to hear
that we have been able to find a place
for Mrs. McAdoo with our Defense Sav-
ings Staff.
Her appointment was effective
January 22, and she will be stationed
at Los Angeles.
Affectionately,
(Signed) Henry
Mrs. Franklin D. Roosevelt,
The White House.
mff
Sunct Service 12:30
n.m.c.
350
January 22, 1942.
Mrs. Kleanor Wilson McAdoo,
Loe Angeles, California.
Dear Mrs. McAdoo:
You are hereby appointed a Senior Defense Securities
Promotion Specialist, CAF-12, on the Defense Savings Staff
of the Office of the Secretary, with compensation at the
rate of $4,600 per annum, payable from the appropriation,
"Expenses of Loans", Act of September 24, 1917, as Amended
and Extended. This appointment is to be effective on date
of entrance on duty and continue for the duration of the
national defense program.
Sincerely,
(Signed) E. Morgenthan. Jr.
Secretary of the Treasury.
JJ:jd
n.m.c.
Copies to Thompson
351
JAN 31 1942
Dear Harolds
I went to tell you of my genuine appreciation for the
excellent way in which you have handled your assignment in
supervisory charge of the Procurement Division, the Bureau
of Engraving and Printing, and the Bureau of the Mint. As
you know, the only reason I am relieving you of this assignment is because you have taken over the arduous task of
carrying on the operations of the Defence Savings organi-
sation. This in itself is more than a full-time job and
its success is due in no small measure to the tireless and
able manner in which you are directing this major activity
of the Department.
Sincerely,
(Signed) Henry Morgenthan, Jr.
Mr. Harold N. Gravee,
Assistant to the Secretary.
WNT:cf
Original Handed to Mr. Green ty buy
Thompson n.m.c. cying
352
WAR DEPARTMENT
WASHINGTON
JAN 31 1942
WD 029.21
(1-28-42) MB
Honorable Henry Morgenthau, Jr.,
The Secretary of the Treasury.
My dear Henry:
It was extremely good of you to take the time
from your busy day to interest yourself in our office space
problems. Because of your consideration of our needs by
allowing the Public Buildings Administration to remain in
your Procurement Building, the War Department will occupy
temporarily Temporary Building "T". This will help relieve
some of our congestion and will very materially help in the
war effort.
I take this opportunity to express to you my
appreciation and that of the War Department.
Sincerely yours,
Herry L Strunson
Secretary of War.
353
OFFICE OF FACTS AND FIGURES
WASHINGTON
January 31, 1942
Dear Henry:
Thank you for your letter of January 5th. We
have now received replies from all of the agencies represented on the Committee on War Information, agreeing to
the poster coordination plan approved by the Committee on
December 29.
I note that you have appointed Mr. Ferdinand Kuhn,
Jr. as liaison between the Treasury Department and the
Office of Facts and Figures. Our Graphics Division will
communicate with Mr. Kuhn within the next few days with the
view to working out with him specific plans for coordination.
I feel sure that this cooperative machinery we are
setting up together will be an effective means of clearance
and review, and will result in more effective use of war
posters by the government.
Faithfully yours,
am
Archibald MacLeish
Director, Office of Facts and Figures
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D.C.
THE WHITE HOUSE
354
WASHINGTON
January 31, 1942
Dear Henry:
I received the record, Civilian
Defense Series, of the re-interpretation of
the Constitution, and my talk on Medical Progress
on the other side. I want to thank you very
much for sending it to me.
Affectionately,
Thank Thanksett
355
JAN 31 1942
My dear Mr. Landis:
I have your letter of January 23 with reference
to your Community Planning and Organization Program.
The matters to which you refer will have our prompt
attention and you will be further advised.
Sincerely,
(Signed) 5. Morganthau, Jr.
Secretary of the Treasury.
Hon. James M. Landis,
Executive Director,
Office of Civilian Defense,
Washington, D.C.
WNT:cf
file teschompson
Photo file n.m.c.
little
Maginthan
OFFICE OF CIVILIAN DEFENSE
1/29/47
WASHINGTON D. C.
January 23, 1942
Mr. Henry Morgenthau, Jr.
Secretary of the Treasury
Department of the Treasury
Washington, D. C.
My dear Mr. Morgenthau:
The Civilian Participation Office of the Office of Civilian
Defense is now organizing a Community Planning and Organization
Program Division. Although the program is not yet fully under way I
believe it would be helpful to the federal agencies to know something
at this time of the contemplated plan of operation.
Carrying out the executive order which established the
Office of Civilian Defense, the Division will serve as a center for
coordinating federal civilian defense activities which involve relations between the Federal Government and state and local govern-
ments in other than the field of protection from air raids and similar
emergencies.
It will keep informed of problems which arise from the impact of the industrial and military war effort upon local communities.
It will take necessary steps to secure the cooperation of appropriate
federal departments and agencies in dealing with these problems and
in meeting the emergency needs of local communities in other than the
protective fields.
It will consider proposals, suggest plans, and promote activities designed to sustain the national morale and to provide op-
portunities for constructive civilian participation in the defense
program. It will review and integrate civilian defense programs of
federal departments and agencies involving the use of volunteer services in order to assure unity and balance in the application of such
programs. It will seek to assist state and local defense councils
and other agencies in the organisation of volunteer service units and
in the development of their activities in other than the protective
fields.
It will review existing or proposed measures relating to or
affecting state and local defense activities, and recommend such ad-
ditional measures as may be necessary or desirable to assure adequate
civilian defense in terms of maintenance and strengthening of necessary community services.
Mr. Henry Morgenthau, Jr.
-2-
January 23, 1942
We are now proceeding to set up our Clearing House of Infor-
nation on state and local defense activities in our field of operation
in cooperation with appropriate federal departments and agencies. It
is our hope that we may count on the cooperation of your Agency. so
essential
if the purposes for which this office is being set up are to
be
fulfilled.
At this time we would appreciate it very much indeed if you
will make available to us a list of your regular, periodic printed reports, locality and field surveys which contain information as to social and industrial problems arising in local communities in your field
as a result of war activities, and which may be put at the disposal of
the Clearing House of Information.
May we also have whatever material you can put at our disposal
bearing on such problems, in your field of operation associated with
activities in (1) the Hampton Roads area; (2) Detroit and the surrounding automobile industry area; (3) Spokane; (4) Fort Worth.
Ye would be glad to have you indicate such information as
should be considered confidential, and to return to you any material
which cannot be permitted to leave your files for more than a short
time.
Would you be good enough to let us know whether there is, in
addition to the reports you are sending us, further information on these
areas which would be of assistance to this office but which cannot be
permitted to leave your files. If so, could you arrange to give a member of the staff of the Clearing House of Information access to these
for study in your office?
It would be helpful if you would let me know to whom we should
address future requests for material with regard to specific fields of
your Agency's work in other geographical areas.
Ye shall be deeply grateful to you for your assistance.
Very sincerely yours.
James M. Landis
Executive Director
358
stoceroup up
Feb. 49
ck with with to see
the kept 9. incoming.
359
JAN 31 1942
Honorable Harold L. Ickes,
Secretary of the Interior.
My dear Mr. Secretary:
Further reference is made to your letter of December
10, 1941, requesting information on the use of solid fuels
within the Treasury Department.
The information desired by you is now at hand and I
take pleasure in transmitting the completed forms showing
the solid fuel requirements within the Treasury Department.
Very truly yours,
(Signed) 1. Morgenthau. Jr.
Secretary of the Treasury.
Encl.
Photo file n.m.e.
Copies to shampoon
UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON
ESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE
UNITED STATES GOVERNMENT
BITUMINOUS COAL
June of Federal Government Department or Agency
Bituminous coal
State or
territory
in which
bituminous
coal is
consumed
Estimated consumption in calendar year 1941
Percent delivered direct
to burning equipment
Net tons
In carload
In truck or
lots
wagon
100
110
labama
Transury Department
Estimated
consumption
in calendar
year 1942
Estimated
stocks on hand
Jan. 1, 1942
(net tons)
(net tons)
110
45
22
15
risona
kansas
Mornia
alrado
nnecticut
22
100
elaware
ist. of Columbia
100
230
210
7
lorida
orgin
18
aho
Ilinois
diana
NEL
insas
135
intucky
xisiana
100
200
100
10
100
5
010
5
7
dine
ryland
usachusetta
chigan
imesota
2
4
ississippi
Issouri
100
13
15
15
290
100
branka
pshire
Jersey
"xico
290
Brolina
kota
101
100
100
(Continued on reverse side)
104
9
167477
361
-2-
UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON
Bituminous coal
State or
Estimated consumption in calendar year 1941
Percent delivered direct
to burning equipment
Net tons
In truck or
In carload
territory
in which
bituminous
coal is
lota
consumed
WALEON
Estimated
consumption
in calendar
year 1942
(net tons)
ESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE
UNITED STATES GOVERNMENT
Estimates
stocks on
COKE
Jan. 1,19
(not tog
at of Federal Government Department or Agency
No Requirements
State or
Ohio
territory
Oklahoma
in which
Oregon
Coke
Estimated consumption in calendar year 1941
noka
Ponnsylvania
is
Rhode Island
consumed
South Carolina
Net tone
Percent delivered direct
In carload
lota
South Dakota
Treasury Department
In truck or
welzon
Estimated
consumption
Estimated
in calendar
stocks on hand
year 1942
Jan. 1. 1942
(net tons
(net tons)
ibass
Tennessee
isona
Texas
Utah
20088
Comia
Vermont
orado
N
Virginia
recticut
Washington
West Virginia
t. of Columbia
Wisconsin
rida
Wyoming
rgia
bo
Alaska
inois
Canal Zone ......
Ioland Poss. in:
Atlantic Ocean.
518
Pacific Ocean .
tucky
.
Caribbean Sea
isiana
be
Total
nand
achasette
osota
issippi
apphire
100
olina
(Continued on reverse side)
177178
UNITED STATES
DEPARTMENT OF THE INTERIOR
OFFICE OF THE SECRETARY
WASHINGTON
State or
coke
UNITED STATES GOVERNMENT
Estimated consumption in calendar year 1941
is
consumed
Net tons
Percent delivered direct
Estimated
consumption
to burning equipment
In carload
In truck or
Ln calendar
year 1942
stocks on base
(net tons)
(net total
lots
wagon
ANTHRACITY COAL
Estimate
of Federal Government Department or Agency
20
in which
ESTIMATED CONSUMPTION AND STOCKS OF SOLID FUELS BY THE
Coke
territory
Ohio
Treasury Department
Anthracite coal
Oclahoma
State or
Pennsylvania
Rhode Island
territory in
Estimated consumption in calendar year 1941
which
South Carolina
thracite coal
South Dakota
Net tons
is consumed
Tennessee
Percent delivered direct
to burning equipment
In carload
In truck or
lots
Texas
Utah
Vermont
Estimated
consumption
in calendar
year 1942
Estimated
stocks on hand
Jan. 1, 1942
(net tons)
(net tons)
Laona
Virginia
Lifornia
Washington
Lorado
West Virginia
inecticut
Wisconsin
sware
Droming
it. of Columbia
Alaska
rida
rgia
Canal Zone
ho
Island Poss. in:
inois
Atlantic Ocean
liana
Pacific Ocean
Caribbean Sea
1848
tucky
isiana
Total
no
223
100
226
100
20
110
yland
40
a
154chisetts
aligan
masota
dissippi
180ur
itana
ranica
167
upshire
versey
Mexico
(Continued on reverse side)
147476
-2THE SECRETARY OF THE INTERIOR
WASHINGTON
at
DEC 10 1941
Anthracite coal
State or
territory in
which
Anthraci to coal
is consumed
Estimated consumption in calendar year 1941
Percent delivered direct
Net tons
to burning equipment
In carload
In truck or
lota
New York
Estimated
consumption
Estimo
in calendar
year 1942
This is to request information on the use of solid fuels within
(net
(net tona}
wa gon
your Department.
40
North Carolina
The President, in asking me to act as solid fuels coordinator
for national defense, specified certain duties, among which is the
100
40
North Dakota
the
Ohio
one to obtain current data on fuel needs. In this regard, it is es-
state
(klahoma
My dear Mr. Secretary:
sential that I have information on fuel requirements of the United
States Government which is a large user of coal in particular. A
similar request is being sent to the other Federal Agencies.
b
Oregon
Pennsylvania
Rhode Island
The information reported will be tabulated to show the fuel consumption of the Government by regions during the present calendar
year, stocks on hand at the end of the year, and the estimated requirements for 1942. Enclosed are forms upon which the data may be
South Carolina
South Dakota
Tennessee
Texas
listed. It is urged that the information be submitted as promptly
Utah
Vermont
Virginia
as possible.
15
100
It may happen that the information to be listed in the above
forms is not available in your central office and its assemblage
15
Washington
West Virginia
will necessitate A canvasa of field offices or local installations.
Wisconsin
For purposes of such A canvase, a special form, S.F.C. No. 4, has
Wyoming
been prepared, copies of which will be furnished to your fice upon
request.
Alanka
Canal Zone
I earnestly recommend that all Agencies of the United States
Government plan their fuel purchases to provide a comparatively large
supply for storage purposes. Government activities must be protected
from interruptions due to temporary fuel shortages caused by disturbances in mining and distribution.
Island Poss. in:
Atlantic Ocean
Pacific Ocean
Caribbean Sea
Sincerely yours,
Total
Enclosures.
Hon. Henry Morgenthau, Jr.,
9
Secretary of the Treasury.
Harved
Secretary of the Interior.
Treasury Department
364
Division of Monetary Research
Date 2-4-42
To:
19
Miss Chauncey
1 think the Secretary will be interested in glancing at this.
H.D.W.
to Bell
7yt
copy sent to25142
Haw
I've 00 to d also by read
MR. WHITE
Branch 2058 - Room 214
faculty
365
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE January 31,1942.
TO
Secretary Morgenthau
FROM Mr. White
Subject: British Tax Reserve Certificates.
The Chancellor of the Exchecuer announced recently the
forthcoming issue by the British Treasury of a security which
taxpayers may tender for tax payments, along the lines of our
tax anticipation notes.
We have just received & despatch from the American Embassy
in London, giving further information regarding these Tax Reserve
Certificates, which were first offered to the public on December 31,
1941. This information can be summarized as follows:
1. Description of the issue:
8. Issued in units of b 25 ($100) and multicles thereof.
b. Sold at face value, through banks.
C. May be tendered in payment of national income,
excess profits and land taxes, for taxes due from
the certificate holder at any time not less than
two months and not more than two years from the
date of the certificate.
d. If used in paying taxes, the certificates bear
interest at one percent per annum. Otherwise
only the principal is repaid.
e. The interest is exempt from income taxes.
2. Advantages of the new security, as stated by the Chancellor
of the Exchequer, are:
a. Preventing bank deposits from being swollen by
funds set aside to pay taxes.
b.
Helping to smooth out the flow of revenue into
the Treasury.
C.
Certificates not used to pay taxes are in effect
interest-free loans.
3. Press reactions were generally favorable, although it is
considered to be of technical interest rather than of fundamental
importance, since it will not affect inflation or the amount of
saving.
One editorial points out that the tax-exempt feature is
regressive in principle.
(
4. Sales of tax reserve certificates between December 23 and 30
totalled E 16.8 million ($67.2 million), which is considered a good
response for the Christmas holiday season.
(Embassy despatch No. 2463, London,
Dec. 29, 1941)
366
TREASURY DEPARTMENT
PROCUREMENT DIVISION
WASHINGTON
OFFICE OF THE DIRECTOR
Jenuery 31, 1942
TO THE SECRETARY
There is submitted herewith the operating report of
Lend-Lense purchases for the week ended January 81, 1942.
During the past week emphasis has been placed upon
the clespence of requisitions which have been pencing in
the or Production oará and, 0.5 8 result, the total has
been reduced from 138,000,000 to $00,000,000. Certain
of the requisitions involving rather substantial amounts
that spe still under consideration by the (or Production
osra are for tire end tube requirements and certain nonferrous metal recurrements.
The present indications are test the requisitions
thus for received, end those which we reasonably may ex-
sect to receive up to February 28, if entirely completed
through purchase action would still leave 0 balance of ap-
proximately 150,000,000 of the funds originally elloted
by Lend-Lease for estimeted purchases, which fact the have
reported to the Office of Lend-Losse A information.
FORDEFENSE
UNITED
STATES
BONDS
100STAMPS
your
irector of Procurement
BUY
us.
367
OPERATING REPORT - LEND-LEASE PURCHASES
WEEK ENDED JANUARY 31, 1942
$825,722,879.00
OTAL ALLOCATIONS
PURCHASES PREVIOUSLY
REPORTED
PURCHASES THIS WEEK
TOTAL PURCHASES
REQUISITIONS IN PRO-
(
SS OF PURCHASE
$441,863,654.57
18,261,008.97
$460,124,663.54
72,133,790.03
ISITIONS IN PRO-
CESS OF CLEARANCE BY
AR PRODUCTION BOARD
UNOBLIGATED ALLOCATIONS
88,660,412.00
620,918,865.57
$204,804,013.43
368
JAN 31 1942
My dear Mr. President:
I am enclosing report on our exports
to some selected countries during the week
ending January 17, 1942.
Faithfully,
(Signed) &. Morgeathan. Jr.
Secretary of the Treasury
The President,
The White House.
Enclosure
nm.c.
Secret Service 12:30 pm.
copies to in w hite
HDW:mah
1/21/42
Ret to Secin office
369
JAN 31 1942
My dear Mr. Perkins:
five
I - enclosing 5 copies of the report
- our experts to some selected countries
during the week ending January 17, 1942.
Sincerely yours,
(Stamed) N. Morgenthan. Ind
Secretary of the Treasury
Mr. Mile Perkins,
Executive Director,
Warfare,
Board
of Economic
2501 Que
Street, N. W.,
Washington, D. C.
Enclosures
n.m.c.
1/28/42
By Messenger Steen 12:3
Capital on Dr white
Ret to Rm. 2141/2
370
JAN 31 1942
My dear Mr. Secretary:
I am enclosing copy of report on our
experts to some selected countries during
the week ending January 17, 1942.
Sincerely yours,
(Signed) E. Morgenthan. Jr.
Secretary of the Treasury
The Honorable,
The Secretary of State,
Washington, D. C.
Enclosure
n.m.c.
By Steen, 2:35
Messenger
HDW:mah
1/21/42
capin GDWWite
Ret to Secip's office
371
JAN 31 1942
My dear Colonel Donovan:
I am enclosing copy of report on
our exports to some selected countries
during the week ending January 17, 1942.
Sincerely yours,
(Signed) E. Morgenthau, Jr.
Secretary of the Treasury
Colonel William J. Donovan,
Coordinator,
office of Coordinator of Information,
old National Institute of Health Building,
25th and ED.
Streets,
Washington,
C.
N. ...
Enclosure
nm C.
HDWsmch
1/21/42
By Messenger
Copies to white's ffire
Ret to Secip office
372
January 28, 1942
Exports to Russia, China, Burse, Hong Kong, Japan
France and other blocked countries, as reported to
the Treasury Department during the week ending
January 17, 1942.
1. Exports to Russia
Exports to Russia as reported to the Treasury during the
week ending January 17, 1942 amounted to about $5,800,000.
The chief items were motor trucks and chassis and landplanes.
(See Appendix C.)
2. Exports to Chins, Burma and Hong Kong
Exports to Free China amounted to about $1,700,000. of
which printed matter and motor trucks and chassis accounted
for nearly fifty percent. (See Appendix D.) Exports to Burma
amounted to $447,000. (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 exporte to France were reported during the week ending
January 17, 1942.
5. Exports to other blocked countries
Exporte to other blocked countries are given in Appendix A.
373
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 17, 1942
(In thousands of dollars)
July 28
Total
Democric Exports
Week ended
Week ended
Jan. 3
January 10
January 17
$80,548
$ 8,247
8 5,874
$94,669
28,369
91
1,695
30,155
Surma 2/
7,002
1,073
447
8,522
3/
6
to
U. S. S. R.
Free China
France
Occupied France
-
-
6
-
-
2
-
-
2
of
Unoccupied France
-
Spain
2,329
Switcerland
5,061
11
11,515
1
Sweden
4,488
Portugal
of
5
155
Treasury Department, Division of Monstary Research
207
2,334
5,279
11,516
824
5,467
January 21, 1942.
1 Many of the export declarations are received with a lag of several days or more. of
Therefore this campilation does not accurately represent the actual shipment
a particular week. The longer the period covered, the closer will those figures
come to Department of Commerce revised figures.
2 From September 11, 1941 to date - it is presuned that a large percentage of
material listed here, consigned to Burma, is destined for Free China.
3/ Includes both Occupied and Unoccupied France through week ending October 4, 1941.
Occupied and Unoccupied France separated thereafter.
W Less than 8500.
1/21/42
Exports from the U.S. to China, Burma, Hong Kong, Japan and U.S.S.R.
as reported to the Treasury Department, July 28, 1941 - January 17,1942.
(Thousands of Dellars) 1
Total
Exporte to China
To Chinese
controlled
controlled
To Japanese
ports
ports
July 28 - Aug.
2
Aug. 4 - Aug. 9
937
542
2,79
2,794
Aug. 11 - Aug. 16
Aug. 18 - Aug. 23
Aug. 25 - Aug. 30
1,278
1,352
Sept. 8 - Sept.13
3,038
Sept. 2 - Sept. 6
Sept.15 - Sept.20
Sept.22 - Sept.27
Sept.29 - Oct.
4
Oct. 6 - Oct. 11
Oct. 13 - Oct. 18
Oct. 20 - Oct. 25
Oet. 27 - Nov. 1
Nov. 3 - Nov. 8
Nov. 10 - Nov. 15
Nov. 17 - Nov. 22
Nov. 24 - Nov. 29
Dec. 1 - Dec. 6
Dec. 8 - Dec. 13
Dec. 15 - Dec. 20
Dec. 22 - Dec. 27
Dec. 29 - Jan. 3
Jan. 5 - Jan. 10
Jan. 12 - Jan. 17
5,864
552
267
399
438
164
158
473
120
272
668
5,210
1,836
3,009
1,701
3,359
Burma 3 Hong Kong
1,233
-
5
35
584
-
269
403
1,243
-
4,772
1,672
2,851
1,228
3,239
58
342
-
88
624
283
303
1,021
600
1,364
1,325
-
-
-
204
2,281 2
3,822
110
852
61
791
3,025
688
2,337
18
123
12
37
35
91
36
44,554
1,657
1,157
1
64
1,695
Japan
1,225
5,312
2
80
to
449
684
1,350
1,305
Exports
654
983
235
234
742
634
456
389
810
297
309
462
3,978
Exports
to
to
395
969
735
693
757
156
352
736
897
Exports
159
42
6
-
2,333
323
5
-
-
-
2
-
-
-
35
-
91
1,073
-
-
1,695
447
-
-
32,758
7,409
11,796
11,629
2,735
1,023
4,280
5,217
-
-
196
551
986
-
-
1
U.S.S.R.
4,523
752
-
8
to
-
-
111
Exports
1,869
6,845
1,924
5,623
4,484
4,552
2,677
3,581
2,436
3,609
12,040
4,580
1,829
3,993
8,247
5,874
95,017
1.These figures are in part taken from copies of shipping manifests.
2.Figures for exports to Free Chine during these weeks include exports to Rangoon which are
presuued to be destined for Free China.
3.It is presumed that a large percentage of exports to Burma are destined for Free China.
Treasury Department, Division of Monetary Research
January 23, 1942
375
APPENDIX 0
Principal Exports from U.S. to U.S.S.R.
as reported to the Treasury Department
during the week ending January 17, 1942.
(Thousands of Dollars)
$ 5,874
TOTAL EXPORTS
Principal Items:
Motor trucks and chassis
1,101
1,029
Landplanes, powered
Molybdenum are and concentrate
632
480
195
184
158
Military tanks
Refined copper
Men's boots and shoes
Ethy1 fluid
Insulated copper wire
155
Aluminus plates, sheets, bars, strips
and rode
Drilling Machines
Aircraft engines
153
146
116
117
111
110
110
Brass and bronse plates and sheets
Relief supplies - olothing
Aircraft parts and accessories,n.
Engine lathes
Other lathes
96
-
Treasury Department, Division of Nonetary Research
Jenuary 26,1942
376
APPENDIX D
Principal Exports from U.S. to Free Chine
as reported to the Treasury Department
during the week ending Jenuary 17. 1942.
(Thousands of Dollars)
TOTAL EXPORTS TO FREE CHINA
Principal Items:
Printed matter
Motor trucks and chassis
Ink
$ 1,695
561
243
so
Auto replacement parts
98
Tires and tubes
Conper wire (bare)
60
Relief supplies - hospital
Wheels
Aircraft instruments and parts of
Steel bare
74
50
36
EMERGENCY
Hand tools
Treasury Department, Division of Monetary Research January 23,1942
377
APPENDIX E
Principal Exporte from U.S. to Burna
. reported to the Treasury Department
during the week ending January 17,1942.
(Thousands of Dollars)
TOTAL EXPORTS
$ 447
Principal Items:
Motor trucke and chassis
Automobiles
Proprietary medicinal preparetions
Auto replacement parts
Iron and steel sheets
Evaporated milk
133
83
48
I
19
11
Petroleum and gas well-drilling
apparatus and parts
Metal-grinding machines and parte
Typewriters and parts
Gotton piece goods
Industrial chemicals
Dried skimmed milk
Cotton GRAVES articles
Treasury Department, Division of Monetary Research
ISF/efe
1/26/42
2
8
COP
|
sn
Jenus Py 26,1942
378
January 32. 1942
Mr. Livesay
Mr. Districh
will you please send the attached cable to the American Commissioner
at Delhi, India for transmission to Consul at Karachi, for Fax free the
Secretary of the treasury."
FDIGH
379
January 31, 1942
American Commissioner,
Delhi, India.
For transmission to Consul at Karachi.
FOR FOX FROM THE SECRETARY OF THE TREASURY:
Regret very much that you are delayed end we are
trying to expedite your journey. Because of the urgency
of the matter we feel we must proceed with the negotiations and therefore would appreciate very much if you
would cable us as much as you feel can be cabled of the
Generalissimo's views and ovinions.
KSF/efs
1/31/42
380
TELFGRAM SENT
January 31, 1942
HRL
This telegram must be
paraphresed before being
communicated to anyone
other than A Governmental
7 p.m.
agency. (BR)
AMERICAN COMMISSIONER,
NEW DELHI (INDIA).
21
For transmission to Consul At Kerachi.
FOR FOX FROM THE SECRETARY OF THE TREASURY.
Regret very much that you are delayed and WE are
trying to Expedite your journey. BECAUSE of the urgency
of the matter WE feel WE must proceed with the negotiations
and therefore would appreciate very much if you would
cable us P 8 much as you feel can bE cabled of the
Generalissimo's VIEWS and opinions.
HULL
(FL)
FD:FL:B1cB
381
TELEGRAM SENT
January 31, 1942
HRL
This telegrom must be
peraphrased before being
7 n.m.
communicated to anyone
other then 0 Governmental
agency. (BR)
AMERICAN CONSUL,
CALCUTTA (INDIA).
26
TO CONSUL GENERAL PROV SECRETARY OF THE TREASURY.
QUOTE. Hewlett, Secretary to Mr. Fox, American
member of the Chinese Stabilization Board, has recently
arrived in Calcutta from Chungking for medical treatment.
Please transmit following message to his and confirm
to us that Hewlett has received it:
INNER QUOTE. Hewlett from the Secretary of the
Treasury:
All possible sters being taken here to errange
for your passage home by clipper. It is advisable that
you stay in Calcutta until the necessary arrangements
have been made for your return home. END INNER QUOTE.
END QUOTE.
HULL
(FL)
FD:FI::EMcB
Copy:bj;2-2-l2
Copy dmh - 2-7-12
382
JAN 27 1942
My dear Mr. Secretary:
Mr. A. M. Fox, the American member of the
stabilisation Board of China, has informed me by
cable that his secretary, Mr. Herbert Hewlett, is
all and should return to the United States for
treatment. will you be good enough to make the
necessary arrangements for his transportation back
to the United States.
I understand that Mr. Hewlett is visiting
Calcutta January 29 for a supply of medicine mobtainable in China, and for a thorough examination.
If the State Department advises us that it is desirable
for Mr. Newless to remain in Calontta util return
transportation is arranged, we will cable him to this
effect.
Very truly yours,
(Signed) K. Morgenthan, Jr.
Secretary of the Treasury
The Menorable
The Secretary of State
By Messenger Staught 530
cc.m.m.
VFC:ISFoice
1/22/42.
Ret to says office
383
January 31. 1948
Ms. Livesay
Ms. Districh
will you please send the attached cable to the United States Geneal
General, Calcutta, India.
384
January 31, 1942
U. S. Consul General,
Calcutta, India.
TO CONSUL GENERAL FROM SECRETARY OF THE TREASURY:
Hewlett, Secretary to Mr. Fox, American member of the
Chinese Stabilization Board, has recently arrived in Calcutta
from Chungking for medical treatment. Please transmit following message to him and confirm to us that Hewlett has
received it:
"Hewlett from the Secretary of the Treasury:
All possible steps being taken here to arrange
for your passage home by clipper. It is advisable that
you stay in Calcutta until the necessary arrangements
have been made for your return home."
ISF:gp
1/31/42
385
TELEGRAM SENT
January 31, 1942
HRL
This telegram must be
being
7 p.m.
communicated paraphresed before to anyone
other than a Governmental
agency. (BR)
AMERICAN CONSUL,
CALCUTTA (INDIA) .
26
TO CONSUL GENERAL FROM SECRETARY OF THE TREASURY.
QUOTE. Hewlett, Secretary to Mr. Fox, American
member of the Chinese Stabilization Boerd, has recently
arrived in Calcutta from Chungking for medical treatment.
Please transmit following message to him and confirm
to us that. Hewlett has received it:
INNER QUOTE. Hewlett from the Secretary of the
Treasury:
All possible steps being taken here to arrange
for your passage home by clipper. It is advisable that
you stay in Calcutta until the necessary arrangements
have been mede for your return home. END INNER QUOTE.
END QUOTE.
HULL
(FL)
FD:FL:EMcB
386
C
0
P
Y
BRITISH EMBASSY,
SAFE HAND
WASHINGTON, D.C.
W.T. 1030/AA/6/42
31st January, 1942
Dear Mr. Dietrich,
With reference to my letter W.T. 1029/AA/2/42 of 19th
January about freezing measures in the countries of the West
Coast of South America, I am now able to give you a few further
items of information which we have received from the same source.
Colombia
The German compensation funds which were "technically"
but not physically blocked some time ago are said to have amounted
to some 8 to 9 million pesos. The Banco de la Republica had a
list of all German credits in compensation account but did not
collect them and hold them under their jurisdiction. In the
meantime, German agents approached the Colombian importers who
held these credits and offered them exceptional and favourable
terms under which they could pay their debts to Germany, at the
same time giving them proofs that the German Government at the
end of the var would make no further claims against them. It is
not known to what extent funds were actually paid to the Germans,
but it is naturally hoped that effective measures will be taken
to see that whatever funds are still in German hands are blocked
in the real sense in the Banco de la Republica.
As regards the Banco Aleman Antiocueno, certain
Colombians have for a considerable time been studying the
possibility of opening P new Colombian bank in Medellin.
The Banco Frances e Italiano is said to be losing ground
very rapidly in Colombia and evidence that it is worried about its
deposits is shown by the fact that credit terms at special rates
are being offered. In this connection I have just heard that the
position of the Banco Frances e Iteliano in Santiago is believed
to be even more acute than that of the branch in Bogots, due to
the withdrawal of deposits and the impossibility of contacts
abroad. There are rumours that the bank is about to close its
doors and will probably be finally liquidated somewhere around
September.
387
-2-
The Vichy Government is understood to be endeavouring
to procure payment of French debts to their Minister in Colombia,
as we have heard that they are also doing in Venezuela and
Ecuador.
Ecuador
No measures with regard to German and Italian funds
have been taken as yet. German compensation funds at the beginning of the war amounted to 11 million sucres which were held by
"Le Provisora" Banco Nacional de Credito. the biggest bank in
Ecuador. I take this opportunity of sending a copy of a memorandum
regarding this bank which I have already sent to Mr. Pehle and Mr.
Hiss.
Italian funds are at a low ebb and it is anid that the
Italian Legation were unable to pay their servants for one month
until the Banco Italiano-Lima came to the rescue with a loan.
The Italian Consul at Quito has weekly meetings with his nationals
in order to raise loans.
Bolivia
With regard to freezing mensures in Bolivia, I would
like to draw your special attention to our Memorandum JIN. 409/42
of 28th January.
Yours sincerely,
(sgd) R. V. Palin
LA PREVISORA BANCO NACIONAL DE CREDITO
388
"La Previsora" Banco Nacional deCredito is the official agent for
the Deutsche Sudamerikanische Bank of Hamburg and Berlin. It is the only bank
in Ecuador which effects cable transfers of askimarks, and it should be noted
that although the amount of this compensation exchange available has for some
time been exhausted owing to the complete absence of exportation, La Previsors
still continues to negotiate in askimarks in any quantity however large.
The pro-Nazi procaganda carried on by the directors of La Previsors
is well known, and more especially that of its General Manager, Senor Victor
Emilio Estrada who is often to be seen in the afternoons in conference with the
German Consul, Mr. Bruckmann in the latter's office in the Malecon.
The travelling representative of the International Harvester Export
Company of New York, Mr. Roland G. Kaiser stated in Gueyaquil that the principal
motive for withdrawing the agency which his company had entrusted to Sr. Enrique
Gallardo, son-in-law of Sr. Estrada, was that all the concerns in the control of
Sr. Estrada and of the Previsors were Nazi in complexion. At a sumptuous dinner
which Sr. Estrada gave to Mr. Kaiser, the former extressed the wish that the
agency should be transferred to one of the many concerns of which he is principal
shareholder on the score of Previsora investments. Mr. Kaiser, however, flatly
refused and gave the representation to Mr. Augusto Dillon, Manager of the Italian
Bank of Guayaquil.
Many United States and United Kingdom companies are avoiding the services of La Previsors and are collecting through the Banco de Descuento and the
Bank of London and South America.
The following firms are under the control of Sr. Victor Estrada,
General Manager of the Previsora, and he is the principal shareholder in each:
Commenia General de Comercio y Mandato S.A.
Agencies and importers
Companie General de Construcciones S.A.
Building construction and importers of materials
Distribuidora de Autos S.A.
Agents for Ford, Mercury, Lincoln and Packard cars
The Gusyaquil Bottling Company S.A.
Bottlers of Coca-Cola and importers of essences.
J. E. Estrada & Co.
General importers
E. Gallardo
Sr. Gallardo is Sr. Estrada's son-in-law and imports
general merchandise.
Compania Radiofusors del Ecuador S.A.
Established by Sr. Estrada who owns 80 of the shares.
9th Jan./42
RVP:OSB
Copy:bj:1c:2-2-42
LA PREVISORA BANCO NACIONAL DE CREDITO
389
"La Previsors" Banco Nacional deCredite is the official agent for
the Deutsche Sudamerikanische Bank of Hamburg and Berlin. It is the only bank
in Ecuador which effects cable transfers of askimarks, and it should be noted
that although the amount of this compensation exchange available has for some
time been exhausted owing to the complete absence of exportation, La Previsors
still continues to negotiate in askimarks in any quantity however large.
The pro-Nasi propaganda carried on by the directors of La Previsors
is well known, and more especially that of its General Manager, Senor Vistor
Emilio Estrada who is often to be seen in the afternoons in conference with the
German Consul, Mr. Bruckmann in the latter's office in the Malecon.
The travelling representative of the International Harvester Export
Company of New York, Mr. Roland G. Kaiser stated in Gusyaquil that the principal
motive for withdrawing the agency which his company had entrusted to Sr. Enrique
Gallardo, son-in-law of Sr. Estrada, was that all the concerns in the control of
Sr. Estrada and of the Previsors were Nasi in complexion. At a sumptuous dinner
which Sr. Estrada gave to Mr. Kaiser, the former expressed the wish that the
agency should be transferred to one of the many concerns of which he is principal
shareholder on the score of Previsors investments. Mr. Kaiser, however, flatly
refused and gave the representation to Mr. Augusto Dillon, Manager of the Italian
Bank of Guayaquil.
Many United States and United Kingdom companies are avoiding the ser-
vices of La Previsors and are collecting through the Banco de Descuente and the
Bank of London and South America.
The following firms are under the control of Sr. Victor Estrada,
General Manager of the Previsors, and he is the principal shareholder in each:
Compania General de Comercio y Mandato S.A.
Agencies and importers
Compania General de Construcciones S.A.
Building construction and importers of materials
Distribuidors de Autos S.A.
Agents for Ford, Mercury, Lincoln and Packard care
The Guayaquil Bottling Company S.A.
Bottlers of Cooa-Cola and importers of essences.
J. E. Estrada & Co.
General importers
E. Gallardo
Sr. Gallardo is Sr. Estrada's son-in-law and imports
general merchandise.
Compania Radiofusors del Equador S.A.
Established by Sr. Estrada who owns 80% of the shares.
9th Jan./42
RVP:0SB
Copy:bj:1e:2-2-42
C
0
390
P
Y
PD
GRAY
Rio de Janeiro
Dated January 31, 1942
Rec'd 7:45 p.m.
Secretary of State,
Washington.
311, January 31, 5 p.m.
I recommend inclusion in Proclaimed List of Centro
de Mel, Porto Alegre, name under which Lang and Cia, a
listed firm, also does business.
CAFFERY
LMS
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DEPARTMENT OF STATE
WASHINGTON
January 31, 1942
In reply refer to
FF 840.51 Frozen Credits/5210
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and transmits
a copy of air mail despatch no. 882 of January 26, 1942
from the American Legation at Ciudad Trujillo, concerning
freezing control provisions instituted by the Dominican
Government since December 8, 1941.
Enclosure:
From Ciudad Trujillo,
no. 882, January 26,
1942.
Copy: :2-2-42
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No. 882
Ciudad Trujillo, D. R., January 26, 1942.
Subject: Freezing Control Provisions in the
Dominican Republic.
The Honorable
The Secretary of State,
Washington, D. C.
Sir:
I have the honor to refer to the Department's
circular telegram of January 24 - 4 p.m. and the Lega-
tion's telegraphic reply no. 20 of January 26 concern-
ing freezing control provisions instituted by the Dominican Government since December 8.
The measures reported in the Legation's despatches
nos. 814 of December 12 and 828 of December 18 continue
in effect, and the three banks operating in the Dominican Republic are adhering closely to the regulations
laid down by the Dominican Secretary of State for the
Treasury
393
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Treasury on December 16, as reported in despatch no. 828.
The Secretary of the Treasury has fixed a limit of $1000,
up to which amount enemy aliens may make withdrawals from
banks in the Dominican Republic at the discretion of the
banks. Sums over that amount must receive the authorization of the Department of the Treasury.
All local banks have informed the Legation that they
are giving particular attention to accounts held by enemy
aliens and that they are prepared to deny the right of
withdrawal of funds to any enemy alien at any time if not
satisfied that the purpose for which the funds are to be
used is legitimate.
The Dominican Department of State has authorized the
Banco de Reservas and the Royal Bank of Canada to permit
withdrawal of sums up to $5000 by the Compania Exportado-
ra of Puerto Plata, in which an Italian holds a large
interest, to enable the company to continue its normal
business. The Banco de Reservas, which is managed by
American citizens, is continuing to watch these withdrawals carefully, as is the Royal Bank of Canada.
The public suspect list mentioned in the Executive
Decree of December 16 has not yet been issued. In the
meantime, in accordance with the policy adhered to prior
to
394
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to the entry of the Dominican Republic into the war, the
Banco de Reservas holds no accounts and does no business
with firms and individuals on the American Proclaimed List.
The other two banks in the country - the Royal Bank of
Canada and the Bank of Nova Scotia - follow the same
policy as concerns persons and firms on both the British
Statutory List and the American Proclaimed List.
The banks are aware of the fact that this policy
permits greater freedom of action to firms on the Proclaimed List than to enemy aliens not considered suspicious.
They anticipate that the Committee whose appointment was
reported in despatch no. 862 of January 13 will meet
shortly after the return of the Foreign Minister from
Rio de Janeiro with a view to considering what appropriate
action might be taken on this matter. The Committee also
expects Senor Despradel to bring back from Rio information
on action taken by other American republics on this subject,
and it may attempt to incorporate into the Dominican
regulations measures taken by other countries which are
applicable here.
Respectfully yours,
ROBERT M. SCOTTEN
851
WB:vmm
A true copy of
the signed original.
VMM
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DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FF 840.51 Frozen Credits/5211
January 31, 1942
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
transmits herewith a copy of air mail despatch no. 3346
of January 27, 1942 from the American Embassy at Habana,
concerning freezing control measures which have been
instituted by the Cuban Government since December 8,
1941.
Enclosure:
From Habana, no. 3346,
January 27, 1942.
396
No. 3346
Habana, January 27, 1942
AIR MAIL
(Freezing control measures adopted by the Cuban Government--
Subject: (Department's circular telegram dated January 24, 1942, 4 p.m.
The Honorable
The Secretary of State,
Washington, D.C.
Sir:
I have the honor to refer to the Department's circular telegram
of January 24, 1942, 4 p.m., requesting the Embassy to submit by air
mail a report on the freezing control measures which have been instituted by the Cuban Government and on the actual application of such
measures at the present time, and to inform the Department by telegram
of the numbers and dates of any despatches or telegrams submitted in
the subject matter since December 8, 1941.
In reply, the Embassy telegraphed the Department today, listing
despatches No. 3119 of December 16, 1941, No. 3143 of December 18, 1941,
No. 3148 of December 18, 1941, and No. 3188 of December 27, 1941, which
contain full data on all the important measures enacted by the Cuban
Government since December 8, 1941, in respect of the freezing of the
funds of enemy aliens.
With regard to the application of those measures in Cuba, no hard
and fast rules and regulations have as yet been established, but Mr.
Manuel Perez Benitoa, the Enemy Property Custodian, has assured the
Embassy that it is his intention in respect thereof to follow as closely
as possible the policies of our Government. Enemy aliens who have deposits in local banks or who own other property here, are being authorized
to withdraw at periodic intervals sufficient funds for their living expenses.
Banks receiving payments from abroad in favor of enemy aliens are
authorized to accept such remittances provided the proceeds are deposited
in blocked accounts in favor of the beneficiaries, who must then look
to the Enemy Property Custodian for authorization to make withdrawals from
such accounts.
With regard to properties owned or controlled by enemy aliens not
residing in Cuba, as well as by enemy aliens who have been interned, or
who for other reasons are unable to administer their properties, the Enemy
Property Custodian is appointing supervisors who will administer such
properties as long as the existing situation endures. A case in point
is the "Aevos" razor blade factory which is owned or controlled by Mr.
Eugen Hoppe, a German national whose name is included in our Proclaimed
List. Mr. Perez Benitos has appointed a supervisor who will direct the
operations of this factory, and he proposes to do likewise in the case of
other business establishments or properties with respect to which a similar
situation exists.
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Mr. Perez Benitoa has informed the Embassy that he has been
cooperating closely with the British Legation and the Canadian Trade
Commissioner, and the Embassy and the Consulate General have likewise
been rendering him every possible assistance. The Embassy hopes
that Mr. Perez Benitoa will continue to cooperate with it and with
the Consulate General, especially in view of his avowed intention, in
applying the freezing control measures adopted by the Cuban Government,
to follow as closely as possible the system adopted by our Government.
It is assumed that as soon as Mr. Perez Benitoa's office has been
fully organized some definite system embodying all phases of Cuba's
freezing control measures will be worked out, and the Embassy will keep
the Department informed of further developments with regard thereto.
Respectfully yours,
For the Ambassador:
Ellis O. Briggs
First Secretary of Embassy
File No. 820
AFN/ed
A true copy of
the signed orig-
inal. (I) cd
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PLAIN
Istanbul
Dated January 31, 1942
Rec'd 8:12 a.m.
Secretary of State,
Washington.
24, thirty-first.
Sermet Djadjouli Albanian national independent
Albania formerly Consul General in Yugoslavia resident in Turkey since July 1939 has requested assistance in obtaining Treasury authorization to withdraw
for current expenses $3000 from his account with the
Credit Suisse New York. Djadjouli is well known in
independent Albanian circles and it is suggested
that withdrawals when requested be given favorable
consideration.
HONAKER
RR
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KD
This telegram must be
paraphrased before being
Cairo
communicated to anyone
Dated January 31, 1942
other than a Governmental
agency. (BR)
Rec'd. 12:01 p.m.
Secretary of State,
Washington.
178, January 31, 9 p. m.
The press reports that the Council of Ministers has
approved the draft of the 1942-1943 State Budget but thus
far the explanatory note embodied in the draft is not
available to the Legation. Revenues are estimated at
Egyptian pounds 52,000,000 and expenditures Egyptian
pounds 53,500,000, the deficit to be taken from the reserve
fund which in April, 1941, amounted to Egyptian pounds
28,960,363 of which Egyptian pounds 16.533.292 was free
(Reference my despatch no. 148, December 5. 1941).
KIRK
RDS
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400
DEPARTMENT OF STATE
P
Y
Washington
In reply refer to
FF 840.51 Frozen Credits/5069
January 31, 1942
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and,
referring to aletter dated January 16, 1942 to the
Secretary of State from Mr. J. W. Pehle, Assistant to
the Secretery of the Treasury, transmits copies of telegram
no. 5, dated January 23, 1942 to St. Pierre, concerning
certain payments to be made by the Western Union Telegraph
Company and the Marden Wild Corporation.
Enclosure:
Copies of telegram no. 5,
dated January 23, 1942 to
St. Pierre.
eh:copy
2-2-42
TELEGRAM SENT
401
LM
This telegram must be
paraphrased before being
January 23, 1942
6 p.m.
communicated to anyone
other than a Governmental
agency. (BR)
AMERICAN CONSUL,
ST. PIERRE-MIQUELON.
5.
Your January 3, 1942.
Department has discussed your telegram with the
Treasury Department. Payments by Western Union Telegraph
Company and Marden Wild Corporation should be made into the
special free accounts of Banque Pierre Andrieux with Bank
of Nova Scotia, New York, or with the French-Americen
Banking Corporation, New York, or into the special free
account of the Banque des Iles with the Guaranty Trust
Company, New York.
HULL
(DA)
840.51 Frozen Credits/5069
FF:ASF:LM
eh:copy 2-2-42
Eu
A-A
TREASURY DEPARTMENT
402
INTER-OFFICE COMMUNICATION
DATE January 31, 1942
TO
Secretary korgenthau
FROM Mr. Dietrich
CONF DENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
£12,000
Purchased from commercial concerns
£ 8.000
Open market sterling held steady at 4.03-1/2, and there were no reported
transactions.
Continuing its improvement, the Cuban peso was offered at a premium of
5-16% against the dollar. Until January 27, the peso had been quoted approximately at par.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
Argentine pe so (free)
Brazilian milreis (free)
Colombian peso
Mexican peso
Uruguayan peso (free)
Venezuelan bolivar
11-5/8% discount
.2360
.0516
.5775
.2065
.5250
.2720
We sold $3,000,000 in gold to the Bank of Portugal, which was added to
its earearked account. An additional $7,000,000 in gold will be sold to that
bank on Monday.
No new gold engagements were reported.
As WAS the case in December 1941 we made no purchases of silver during
the month of January.
D
403
BRITISH EMBASSY
WASHINGTON, D.C.
31st January, 1942.
PERSONAL AND SECRET
Dear Mr. Secretary,
I enclose herein for your
personal and secret information a copy
of the latest report received from
London on the military situation.
Believe me,
Dear Mr. Secretary,
Very sincerely yours,
(For the Ambassador)
R.I. Campbell
The Honourable
Henry Morgenthau, Jr.
United States Treasury,
Washington, D.C.
404
Copy No.
13
BRITISH HOST SECRET
(U.S. SECRET)
OPTEL No. 35
Information received up to 7 A,M., 29th January, 1942,
1. NAVAL
28th/29th, Enemy coastal batteries ineffectively shelled a Channel
convoy off DOVER,
22nd, A small merchant ship was sunk by gunfire from a U-boat 120
miles southwest of RANGOON.
24th, A medium sized Allied ship in supply convoy was mined and
sunk 27 miles southwest of SINGAPORE, and a medium sized Portuguese steamer is
reported to have sunk by mine off NEWPOUNDLAND,
2, MILITARY
LIBYA. Enemy columns from the ISUS area are pushing east, north
and northwest. South of BEIGHAZI, our forces covering the town have been forced
to withdraw by strong enemy attacks from the south, Northeast of ISSUS, our armoured forces are advancing to attack the enemy.
HALAYA. East. On 27th, Australian forces were in contact near
JEMALUANG, inflicting about 250 casualties on the enemy and suffering 32. Our
troops have now retired to ULUSEDILI, some 30 miles south of JEHALUANG,
Centre. There has been some infiltration by enemy south of SIMPANG
RENGAN,
West. 15th Indian Infantry Brigade is still southeast of SENGGARANG, but about 1,000 of the troops isolated there managed to rejoin our forces
on 28th.
BURMA. Japanese forces, including cavalry, are reported to be ap=
proaching the MOULMEIN area from the east and south,
RUSSIA. The Russians are continuing their pressure to the west of
RZHEV and in the KHARKOV sector, but German resistance has increased north of the
line OREL - BRYANSK and in the KURSK area.
3g AIR OPERATIONS
TESTERN FRONT. Six R.C.A.F. aircraft took part in operations 27th
28th without casualty. 28th/29th, 183 aircraft sent out - MUNSTER, 84; BOULOGING
48; ROTTERDAM, 29; aerodromes in HOLLAND and NORTHERN FRANCE, 20; and leaflets
over PARIS, 2. Seven aircraft missing. There was thick cloud over MUNSTER, but
conditions at BOULOGNE and ROTTERDAN were good.
405
-2
LIBYA. On night 26th/27th Wellingtons attacked mechanical transport on the EL AGHEILA - JEDABYA road, and, on the 27th, until bad weather pre-
vented further operations, our fighters attacked mechanical transport in the MSUS
area and on the road west of SIRTE. 13 vehicles were destroyed and at least 35
damaged. 27th/28th. Wellingtons attacked shipping in TRIPOLI (L) harbour,
scoring hits on the Spanish Mole and Main Quay.
SICILY. Night 27th/28th. and 28th. 53 enemy aircraft attacked the
island at HAL FAR, aircraft on ground being slightly damaged.
BURMA. 27th/28th, Blenheims attacked BANGKOK area, 26th/27th,
Eight enemy aircraft attacked HINGALADON aerodrome, destroying an ammunition
store and one Hurricane, The attack was repeated by 30 aircraft on 27th/28th,
These were intercepted by Tomabanks of the American Volunteer Group, which des-
troyed seven aircraft and probably destroyed a further six for the loss of one
aircraft.
NETHERLANDS EAST INDIES. 26th. Attacks were made by enemy fighters
on aerodromes at PARE PARE, YYKASSOR, BIMA, KOEPANG, DILLI (PORTUGUESE TIMOR),
AMBON and NAMLEA,
The results of the action against the enemy convoy in MACASSAR
STRAITS, believed to have consisted of three cruisers, 12 destroyers and 30 transports, now appear to have been, at a conservative estimate, one large cruiser
sunk by American submarine, one cruiser hit by Dutch submarine, all three cruisers
hit by bomb, one destroyer sunk, one or two destroyers hit by bombs, ten transports sunk and several transports damaged.
4.
AIRCRAFT CASUALTIES IN OPERATIONS OVER AND FROLL THE BRITISH ISLES
Enemy - none reported
British - eight (one R.C.A.F. Spitfire)
5. IRON ORE
Total shipments of Swedish iron are to GERMANY during 1941 were
9,554,734 tons (of which 738,255 tons via NARVIK) compared with a total of 9,172,
807 tons (473,312 tons via NARVIK) during 1940. Exports in December totalled
569,000 tons, of which 24,000 were shipped via NARVIK. This is 409,000 tons less
than shipments in December, 1940. The Germans are said to be pressing for increased deliveries to NARVIK.
TREASURY DEPARTMENT
406
INTER OFFICE COMMUNICATION
DATEJanuary 31,1942
TO
Secretary Morgenthau
FROM
Mr. Kamarck
Subject:
Summary of Military Reports
Far East
Up to January 25, only two Chinese divisions had been
given permission by the British to enter Burma. Of this
force, only one regiment has, so far, arrived. This regi-
ment had to enter by A difficult and circuitous route. It
is now occupied in defending the northern route from Theiland into Burma. The British did not allow the Chinese
troops to use the Burma Road for entering Burma until January 25.
(o.c.I., "The War This Week", January 22-29)
The U.S. submarine which obtained A hit on a cruiser
or aircraft carrier in the Macassar Straits is the U.S.
Sturgeon. (The "Sturgeon" is a 1,500 ton submarine, 1.e.,
A sea-going submarine, carrying 8 torpedo tubes. It WAS
launched in March, 1938 and has a crew of 55 men. ) American and Australian anti-submarine units have sunk one large
and probably one smell Japanese U-boat off Port Darwin,
Australia.
(U.K. Operations Report, January 28)
The British estimate that the Japanese are producing
350 planes A month. Our Military Intelligence estimates Japanese plane production at 500 a month. (The Japanese air
strength is evidently going to be one of Japan's weakest
points, once the United Nations bring enough air strength
to bear in the Far East. )
(O.C.I., "The War This Week", January 22-29)
Russo-German War
According to reports reaching the Coordinator of Infor-
mation, the Germans are sending another division from France
to the Russian front. This makes A total of 9 divisions
transferred from France to Russia in the lest few months.
(O.C.I., "The War This Week", January 22-29)
-2407
Germany
The Germans are probably turning out submarines at the
rate of 18-20 per month. A total of 250 are under construc-
tion at any one time. Fifty more are building in Italy and
five in France. (In this connection, it might be of interest
to note a memorandum written by Churchill on the last war, in
which he stated that the difficulties of providing suitable
submarine personnel, rather than production of submarines
impose an absolute limit." "There is no personnel that
requires more careful training than the submarine personnel.
All the experience of our officers shows that a submarine
depends for its effectiveness mainly upon its captain. ")
(O.C.I. , "The War This Week", January 22-29)
011 to Italy
The British report that in a further check-up of recent
reports on oil shipments to Italy from Germany, it was found
that during the last fortnight of December, 40 trains of 35
oil tank cars each passed daily through Basle, from Germany
to Italy. This amounts to a shipment of no less than 300,000
tons of oil from Germany to Italy in two weeks. (This is to
be compared to the Italian estimated minimum requirements of
100,000 tons of oil a month.)
(U.K. Operations Report, January 28)
408
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No.
M.I.D., W.D.
617
11:00 A.M., January 31, 1942.
SITUATION REPORT
I.
Pacific Theater.
Philippines: Sporadic enemy.attempts at infiltration were
repulsed. Air activity was light yesterday. Hawaii: No further reports of hostile action. Malaya: The press reports that the British
forces have successfully withdrawn to Singapore Island, after destroying the causeway connecting that island to the mainland. Burma:
Light fighting continues in the area of Moulmein. There has been a
slight decrease in air activity throughout this sector. Australasia:
According to the press, Japanese have made a landing on the Island of
Ambon, east of the Celebes. Both sides continue active in the air
throughout this theater. Ground fighting is obscure, with reports of
enemy gains in western Borneo. West Coast: No further reports.
II.
Eastern Theater.
Ground: Fighting continues along the general front. The
German High Command claims successful counterattacks against a Russian
break-through northeast of Kursk. (No situation map will be issued
this date.)
Air: On the Moscow front, the Russians claim the destruction
of five JU-52's on January 30.
III.
Western Theater.
The press states that units of the German Air Force raided
objectives in North Ireland yesterday.
IV. Middle Eastern Theater.
Ground: British Headquarters in the Middle East have stated
that two brigades which were defending Benghazi have successfully re-
joined the British main force. The press indicates that fighting is
now sporadic, with both forces bringing up supporting troops.
Air: On the 30th, the R.A.F. carried out heavy attacks against
Axis motorized columns, supply lines, and bases in western Cyrenaica.
Axis air forces continue the desultory bombardment of Malta and the
support of ground troops.
RESTRICTED