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254 Treasury Department Division of Monetary Research Date To: March 4, 1942 19 Mrs. McHugh In accordance with the Secretary's request of March 3rd, six copies of his tax statement before the House Ways and Means Committee on March 3, 1942, were turned over to Mr. Dietrich today for transmission by airmail pouch to Mr. Casaday in London. - SentL. Shanahan MR. WHITE Branch 2058 - Room 214 255 March 3, 1942 Harry White Secretary Morgenthau Please send a half dozen copies of my tax statement to your representative in London. 256 Statement of Randolph Paul, Tax Adviser to the Secretary of the Treasury, Before The Ways and Means Committee of the House of Representatives March 3, 1942. My purpose in appearing before you at this time is to discuss in greater detail some of the matters mentioned by the Secretary in his statement, and also to present some additional matters of a more technical nature. While it is not possible to mention all the technical suggestions we would like to present to this Committee, I believe that & description of the more important matters will help to acquaint taxpayers with our views. I will follow as far as possible the order of treatment contained in the Secretary's statement. 1. Individual Income Tax (a) Earned Income Credit. In the field of the indi- vidual income tax the Secretary has indicated the suggested rates of surtax. As the tables he presented indicate, no lowering of the present exemptions of $750 for individuals and $1500 for married persons, or of the $400 allowance for each dependent, is suggested. The tables do indicate a change from the present law with respect to the earned income credit, which we suggest should be eliminated. The value of the present credit -- only $12 of tax for a tax- payer having $3,000 of income, with a maximum of $56 for a taxpayer having $14,000 of earned income -- is out of all proportion to the complexities which the credit produces in the computation of the tax. The elimination of the credit permits fixing of the surtax rates at a slightly lower level in the lower brackets than would be the case if the credit were retained. 30-55 257 -2(b) Withholding at the Source. The Secretary has stated the essential need for a system of withholding at the source. He suggested withholding at the source as a means of collecting part of the income tax -- not as a method of imposing additional taxes. He pointed out that such withholding should be flexible both as to the time when it should be started and the rates at which the tax should be withheld, up to 10 percent. The suggested method may be briefly described as follows: Tax would be withheld at the source upon wages, salaries, corporation dividends and corporation bond interest. with respect to wages and salaries, the withholding would be on a net basis. The tax would be withheld only upon the excess of wages and salaries over the taxpayer's personal exemption, credit for dependents, and a fixed percentage of such exemption and credit representing an average ellowance for deductions. The amounts thus relieved of the withholding requirement would be broken down by payroll periods, so that the employer would know how much to deduct if the employee is paid by the week, by the month, or by any other period. The employee would be required to file with his employer an exemption certificate supplying information on his family status. Thus, there would be exempt from the withholding tax about $16 a week for a single person, $32 a week for a married person, and $40.50 for a married person with one dependent. The greet majority of domestic employees and part-time hourly employees earning small sums with respect to which it is impracticable to apply a withholding system would thus be removed from the scope of the proposed system. The employer would remit quarterly to the Treasury the amount withheld. He would also at the end of the year, or upon termination of employment, give the employee a receipt for the amount of tax withheld. 258 3- At the end of the year the employee would compute his tax liability and file his return in the usual manner. He would include in his income the full amount of the wages payable to him and not merely the balance after withholding. However, he would receive a credit against the tax due for the amounts withheld at the source. In the rare case when the amounts withheld at the source exceeded his entire tax liability, the employee would be entitled to a refund. A system would be instituted whereby theme refunds could be made promptly. With respect to dividends and bond interest, the withholding would be on a gross basis, but at the same rate as for wages and salaries. Withholding on a net basis is impracticable because an individual may hold stocks and bonds in many corporations. Of course, any amount withheld in excess of tax liability would be refunded to the tax- payer. Recipients of wages and salaries, dividends, and bond interest would thus, to the extent of the amounts withheld, have effected a prepayment of their tax liabilities. In order to achieve a speeding up of payments by recipients of other types of income upon which it is impracticable to collect tax at the source, it is suggested that all tax- payers be required to pay one-half of their 1942 tax liabilities on March 15, 1943 and the remaining one-half in installme n'ts thereafter. Those taxpayers whose incomes are not subject to withholding would be obliged to save in 1942 sums sufficient to meet the increased March 15, 1943 payment. These taxpayers would thus be placed in a somewhat equivalent position to the recipients of income subject to withholding, who would be able to use their receipts for the amount withheld to meet their March 15 payment. 259 -42. Corporate Taxes (a) Excess Profits Tax. The Secretary has made two recommendations with respect to the excess profits tax: (1) An increase of 15 percentage points in each bracket, providing a range of rates extending from 50 percent to 75 percent, and (2) An expansion of the relief provisions. Our growing experience with the excess profits tax indicates that our present relief provisions require amplification. While normal earnings can ordinarily be ascertained by reference to the base period years used in the statute, 1936-1939, those years may not always have been representa- tive years for the corporation. The wide range of causes which may make the base period unrepresentative indicates the need for expansion of the present relief provisions which extend to only a few of those causes. At the same time, this variety of causes also gives rise to administrative problems of serious proportions. Some of these problems can be met in the manner indicated in the present law -- the applicant for relief must show that the hardship complained of is a severe one and that the relief requested will make a substantial difference in tax liability. These tests are helpful, although they should be made more stringent in view of the general increase in the tax burden. Other problems can be met by placing the administration of the relief provision in the hands of a special board, whose members and staff would be technically competent to deal with the economic and industrial problems that will arise. In this connection it will of course be necessary to reexamine the relief provisions in the present law, including those that might be described as mechanical, such as the growth formula and the deficit rule. It will also be necessary to reconsider the relief provisions dealing with the ascertainment of the current year's income to see if they are adequate. 260 5 The remaining changes in the excess profits tax largely relate to the improvement of its technical operation. For example, Supplement A, which deals with the computation of the base period credit in the case of consolidations and other exchanges, is defective in a number of respects and should be revamped. There are a number of other provisions which experience has indicated are in need of modification, and weCommittee shall be prepared to date. present these technical changes to the at a later (b) Corporation Normal and Surtaxes. For corporations with net incomes over $25,000, the war surtax would be 31 percent; for corporations with net incomes under $25,000, the war surtax would be 16 percent. An integral portion of the pronosed treatment of corporations having incomes over $25,000 is the special credit to be allowed against the war surtax. A corporation whose current year's surtax net income is less than the average surtax net income of the years 1936 to 1939 inclusive would be allowed a credit of 10 percent of that difference. Such credit, however, would be limited to a maximum of 20 percent of the surtax net income. For example, if as corporation had an average surtax net income for the years 1936-1939 of $150,000, and a 1942 surtax net income of $50,000, its gross war surtax would be 31 percent of $50,000 or $15,500, but it would be allowed as a credit against that sum io percent of the difference between $150,000 and $50,000, or $10,000, so that its war surtax would be reduced to $5,500. Its normal tax would remein 24 percent. If the average surtax net income for the years 1936-1939 had been $200,000, 10 percent of the difference would come to $15,000. However, such $15,000 is in excess of 20 percent of the surtax net income for 1942; the credit therefore would not exceed such 20 percent figure, or $10,000. As suggested by the Secretary, it is believed desirable that such portion of the tax on any dollar of corporate income as exceeds 80 percent should be set eside by the 261 -6Government for the account of the corporation. After the war the amounts so set aside would then be repaid to the corporation for the reemployment of labor, either directly or in the construction of capital needed in shifting operations from wartime production to peacetime production. This does not mean that a corporation must have an average effective rate of tax of more than 80 percent before any amount would be set aside under this provision. Whenever the receipt of an additional doller of income would give rise to & combined excess profits tax, war surtax and normal tax of more than 80 cents, the amount above 80 cents would be recorded in the name of the corporation for the purpose mentioned. If the corporation were subject to excess profits tax of 60 percent or more it would have some income subject to more than the 80 percent rate and accordingly would have part of its tax set aside. 3. Estate and Gift Taxes The Secretary has mentioned the changes in the rates and exemptions which we are suggesting for the estate and gift taxes. Other changes suggested by the Treasury with respect to these taxes will be discussed at a later point in my statement. 4. Excise Taxes With respect to the increases in the excise taxes discussed by the Secretary, it is suggested that in the legislation imposing such increases the Congress state the policy that the increases are not to be considered a justification for increasing wages and are not to enter into the computations of parity prices for agricultural products. One additional matter may be mentioned. A few of the new excise taxes which were imposed under the Revenue Act of 1941 have not proved to be productive of any appreciable revenue. These few taxes are all imposed upon articles the manufacture of which has been or may be expected to be drastically curtailed. In addition, certain of these taxes 262 -7 have imposed an administrative burden upon the Bureau of Internal Revenue far out of proportion to their revenue yield. Accordingly, it is suggested that the excise taxes on the manufecture of rubbor articles, electric signs, optical equipment, and commercial washing machines be reported. 5. Removal of Social Privileges In the portion of his statement dealing with the climination of special privileges the Secretary stressed three items: Tax-exempt securities, percentage deplotion, and separate returns by married persons, end mentioned a number of others. The first of those. requires no additional discussion to make our recommendation clear. (a) Percentage Depletion. With respect to percentage depletion, we suggest that the avoidance of tax now permitted be eliminated by discontinuing the allowance for percentage depletion. Taxpayers would hereafter be permitted to obtain depletion only on to cost basis. If the Committee desires to continue some allowance for those taxpayers who have developed properties in the belief that percentage depletion would be obtainable, WC suggest that this might be accomplished C.S follows: For oil and gas properties which became productive prior to January I, 1942, porcentage depletion should be permitted at a rate of 15 percent of the gross income from the property in the case of those taxpayers who elected to charge intangible drilling and development costs to capital account in prior taxable years. Taxpayers who elected to charge such costs to expense in prior years should be limited to a percentage deplotion allowance of 5 percent, the 10 percent difference being approximately the advantage obtained by this group of taxpayers through expensing such costs. For metal mines, and non-motal mines or deposits including coal mines, which became productive prior to January 1, 1942, percentage depletion should be permitted at a rate of 10 percent in the case of metal mincs and 5 percent in the 08.80 of other mines for taxpayers who capitalized intangible development cxpenses, and et 5 percent and 2-1/2 percent, respectively, if such items were expensed. 263 -8 If the Committee desires to offer a tax advantage as an inducement to new discoveries, we suggest that this might be accomplished as follows: A taxpayer who in the future discovers a new pool of oil or gas would obtain percentage denletion with respect to all production from his entire acreage within such pool at the rate determined upon, but not to exceed 27-1/2 percent. In the determinetion of a new pool, each new zone or horizon would be considered a new pool. Such allowance of percentage depletion would be limited, however, to those taxpayers who contribute substantially toward the cost of the exploratory well. Contributions would be deemed substantial if equivalent to 25 cents or more per foot of hole drilled for wells less than 6000 feet in depth, and 50 conts for wells in excess of such depth. As to metal mines, and non-metal mines or deposits including coal mines, hereafter developed, the allowance would be 10 percent and 5 percent, respectively, for texpayers who beer the burden of the cost of exploration, development and operation of the property. Finally, the existing option to capitalize or expense intangible drilling and development costs should be eliminated for both oil end gas wells and minos, and hereafter such costs should be charged to capital account. (b) Joint Returns. The third itom mentioned by the Secretary, separate returns by married taxpayers, WCS considered by this Committee last year. A provision was inserted in the bill as reported by the Committee requiring a husband and wife living together to file a joint return. Under this provision the tax liability would be computed upon the basis of the combined incomes of husband and wife. However, if either spouse so desired the actual tax burden would be allocated between them, so that neither would be forced to pay the tax due from the other. Our suggestion this year is substantially the same as the provision adopted by this Committee, with one modification. The adjustment for earned income mentioned by the Secretary would be com- puted as follows: A tax would be computed separately on the 264 -9husband's earnings up to e maximum amount, and on the wife's earnings up to the same maximum. There would then be com- puted the tax on the total of such earnings. The difference between the tax on the combined earnings and the sum of the taxes on the separate earnings would be allowed as a credit against the tax based upon the entire joint income. If both husbend and wife earn less than the specified amount of earnings and receive no other income, the liability under a joint return would be no greater then the sum of the liabilities under separate returns. (c) Capital Gains and Losses. The Secretary has stated that our treatment of capital gains and losses is another example of a special privilege in our tax laws. On the one hand, the present maximum tax rates apolicable to gains from capital assets held 18 months or more are unusually low. They have been left at their 1938 levels, while the rates on other incomes have been substantially increased. On the other hand, the present privilege of deducting capital losses from ordinary income has under recent rate increases encouraged an unusually large amount of capital loss realization. This practice was particularly noticeable during the last few weeks of 1941. We have two major suggestions to meet these defects. As to long-term capital gains, one holding period of over 18 months would be substituted for the present complicated double holding period of 18 months and 24 months. Such long-term capital gains would be included in income nt 50 percent of the amount of the gain, which is the present percentage for assets held over two years. At the same time the maximum effective rate on long-term capital gains would be increased from the present 15 percent and 20 percent the to a single rate of 30 percent. These changes will bring tax on long-term capital gains into closer harmony with the suggested increased rates on other incomes. 265 - 10 - As to long-term capital losses, it is suggested that such losses would not be permitted as a deduction against ordinary income, but only against long or short term capital gains. Short-term capital losses can be applied under present law only against short-term capital gains. It is suggested that they be permitted as a deduction from long-term gains as well. To prevent hardship in the case of a taxpayer having small income and sporadic losses, it is suggested that $1,000 of capital losses, whether long-term or short-term, be allowed against ordinary income. Moreover, a five-year carryover would be allowed for the excess of capital losses over capital gains. (d) Life Insurance Companies. Another example of special privilege pointed out by the Secretary is the present treatment of certain insurance companies. The life insurance companies of the United States have assets of 30 billion dollars. During the year 1939 these assets earned investment income of over 1 billion dollars. Yet the life insurance companies in the United States paid a total income tax of only $459,000. There are two major reasons why life insurance companies pay practically no tax. First, they are allowed to deduct from their investment income an amount equal to 3-3/4 percent of the mean of the reserves required by law, although the average rate actually earned is less than 3-1/2 percent. Second, while tax exempt interest is excluded in computing investment income, that portion of the tax exempt interest which is attributable to the reserves is excluded a second time through the deduction of 3-3/4 of the mean of the reserves. It is suggested that this double exclusion of tax-exempt interest be eliminated by reducing the reserve earnings deduction by the percentage that taxexempt interest bears to total investment income. 266 - 11 Further, the deduction of 3-3/4 percent of the mean of the reserves should be reexamined in the light of present day realities. It is suggested that this deduction be reduced to an average of 3-1/4 percent and the actual rate of interest assumed by the company in computing its reserves. In ascertaining this average, a weight of 65 percent should be given to the 3-1/4 percent and a weight of 35 percent to the actual interest assumption rate. Such a formula avoids the unfairness of using either a fixed rate, which discriminates against those companies using a higher actual rate and thus possessing smaller reserves, or the actual rate alone, which discriminates to an even greater degree against companies using a low rate and which injects to an undesirable extent considerations of tax consequences into the determination of the rate to be used. Today, most insurance is written on a 3-1/2 percent or 3 percent basis. As the suggested formula when applied to the reserves under such rates produces an approximate equality in the allowable reserve earnings deduction, discrimination is thereby avoided. Finally, the restriction of the tax base for life insurance to investment income would be confined to the actual life insurance business of a company. A life insurance company also doing a health and accident business on a cancellable basis would be taxed as are casualty insurance companies on that portion of its business. (e) Mutual Insurance Companies Other Than Life. Many of the mutual casualty insurance companies, large as well as small, are given an outright exemption from taxation under Section 101 (11), although that section was originally designed to exempt only small and local mutual companies. Other mutual companies, while nominally subject to tax, ordinarily pay no tax under the present method of computing in their income. This has resulted in a serious disparity tax treatment between such mutual companies and the stock casualty companies. 267 - 12 - It is suggested that the exemption in section 101 (11) be confined to those mutual casualty companies whose net taxable income does not exceed $25,000 and which do not write insurance on any prop- crty having a value of more than $50,000, regardless of whether reinsured. It is further suggested that the remaining mutual companies be taxed on the sum of their investment income and the additions to their surplus which are free from claims of policyholders. (f) Pension Trusts. The tax avoidance poten- tialities of pension trusts are well known. The use of these trusts as a tax saving device for key officers and employees has been stimulated by incrersing rates of tax. To prevent such tax avoidance we suggest that a trust should be required to meet the following standards in order to be tax exempt: (1) The right of the employee to his portion of the employer's contribution to the trust, and to its earnings, as well as to his own contribution, should be fully vested; (2) The trust should cover either (2) 70 percent or more of all em- ployces, excluding employees who have been employed for less than a minimum period not exceeding five years, The suggested basis for the taxation of these companies is as follows: They would be taxed on the sum of their net investment income and net premiums received, less a deduction for the portion of the losses, underwriting expenses, dividends paid to policyholders and additions to policyholders' claimable reserves paid out of premium income, and a deduction for any net loss of the prior year. The portion of losses, expenses, dividends and additions to reserves paid out of premium income would be determined by deducting from such amounts the net investment income remaining after allowence for the tax to be paid on such income. 268 - 13 and casual, part-time and seasonal employees, or (b) such employees as qualify under a classification set up by the employer and found by the Commissioner not to be based upon any favoritism for employees who are officers, shareholders, supervising employees, or highly compensated employees; (3) The system of contributions and benefits under the trust should not discriminate in favor of officers, shareholders, supervising employees or highly compensated employees; and (4) If the pension benefits of an employee in such a tax exempt trust exceed, let us say, $7,500 a year, such employee should include in income currently his pro rata share of the employer's contribution to the trust and of the earnings of the trust. 6. Hardships and Inequities. The Secretary has pointed out that war time rates make it imperative to eliminate as far as possible existing inequities which distort the tax burden of certain taxpayers. I should like to discuss the in- equities which the Secretary mentioned as well as a few additional hardships. (a) Investment Expenses. Under existing law taxpayers are allowed to deduct expenses incurred in connection with a trade or business. Non-trade or non-business income, however, is also subject to tax. It would therefore be equitable to provide for the deduction of expenses incurred in the production of such non-trade or non-business income. If the Committee approves this suggestion, the change should be made applicable to all prior years, subject, of course, to the statute of limitations and like restrictions. (b) Amortization Option. The five year amortization option with respect to emergency facilities contained in section 124 is allowed at present only to corporations. With increasing expansion of our war production, many individuals and partnerships menufacturing war materials will find it necessary to 269 - 13 and casual, part-time and seasonal employees, or (b) such employees as qualify under a classification set up by the employer and found by the Commissioner not to be based upon any favoritism for employees who are officers, shareholders, supervising employees, or highly compensated employees; (3) The system of contributions and benefits under the trust should not discriminate in favor of officers, shareholders, supervising employees or highly compensated employees; and (4) If the pension benefits of an employee in such a tax exempt trust exceed, let us say, $7,500 a year, such employee should include in income currently his pro rata share of the employer's contribution to the trust and of the earnings of the trust. 6. Hardships and Inequities. The Secretary has pointed out that war time rates make it imperative to eliminate as far as possible existing inequities which distort the tax burden of certain taxpayers. I should like to discuss the in- equities which the Secretary mentioned as well as a few additional hardships. (a) Investment Expenses. Under existing law taxpeyers are allowed to deduct expenses incurred in connection with a trade or business. Non-trade or non-business income, however, is also subject to tax. It would therefore be equitable to provide for the deduction of expenses incurred in the production of such non-trade or non-business income. If the Committee approves this suggestion, the change should be made applicable to all prior years, subject, of course, to the statute of limitations and like restrictions. (b) Amortization Option. The five year amortization option with respect to emergency facilities contained in section 124 is allowed at present only to corporations. With increasing expansion of our war production, many individuals and partnerships manufacturing war materials will find it necessary to 270 - 14 - obtain new facilities. It is therefore suggested that the amortization option be extended to individuals and partnerships. (c) Recoveries of Bad Debts and Taxes. If a taxpayer who has taken a bad debt deduction later re- ceives payment of such debt, such payment must be included in his income even though he obtained no tax benefit from the deduction in the prior year. while this result is theoretically proper under our annual system of taxation, it may produce severe hardships in certain cases through a distortion of the taxpayer's real income. At the same time, any departure from our annual system of taxation always produces administrative difficulties which serve to impede the collection of taxes. It is believed that the hardships can be removed and the administrative difficulties kent to a minimum by excluding from income amounts received in payment of the debt to the extent that the deduction on account of the debt in the prior year did not produce a tax benefit. The troublesome question whether a benefit resulted should be determined pursuant to regulations prescribed by the Commissioner with the approval of the Secretary. It is also suggested that this treatment be extended to refunds of taxes pre- viously deducted. (a) Consolidated Returns. At the present time corporations subject to the excess profits tax are permitted to file consolidated returns for the purposes of that tax if they meet certain standards of consolidation, and if they consent to regulations pre- scribing the method of computing the tax on a con- solidated basis. Except for railroads and certain corporations in foreign trade, these corporations, however, are not permitted to file consolidated returns for the purposes of the corporation income tax. This divergence in treatment makes for considerable com- plexity in the application of the two taxes, a com- plexity which burdens taxpayers and the Bureau of Internal Revenue alike. Moreover, an accurate measure of the income of a group of affiliated corporations 271 - 15 can only be obtained through the use of consolidated returns. Under the rates of tax now suggested for the corporation income tax, the inaccuracies that occur through separate returns may work a severe hardship. It is therefore suggested that affiliated corporations be given the privilege of filing con- solidated returns for the purposes of the corporation income tax as well as the excess profits tax. Any group of corporations electing such privilege should be required to do so for both taxes. The Committee may wish to consider the desirability of having a differential in tax for corporations electing to file consolidated returns. (e) Income Accrued at Date of Decedent's Death. Under present provisions income accrued to the date of a decedent's death must be included in the return for his last income tax period. The "bunching un" of income that may occur under this provision can work a severe hardship, as the income of the decedent may in effect be artificially raised to a much higher surtax bracket. The Supreme Court has indicated that under this provision a lawyer's share of the fees from cases pending at his death is includible in the income tax return for the year in which his death occurs even though such fees may not be collectible until years later. The same result may follow with respect to the commissions of insurance agents, executors and trustees, and the fees of doctors and other professional men. To avoid this hardship, it is suggested that the present method of treating such income be eliminated in favor of a method that taxes the income to the persons who actually receive it. Thus, the income would be made taxable to the estate or to the heir or legatee as the case may be. It is also suggested that this change be made retroactive to all open years under proper safeguards insuring payment of the tax by the recipients of income in such years. 272 - 16 - 7. Additional Examples of Special Privileges A. Income Taxes (a) Tax Exempt Corporations Engaged in Business. Our revenue laws have been generous in exempting cer- tain corporations from the income tax. Thus charitable or educational corporations are not subject to the cor- porate income tax. Many exempt corporations, however, have so far departed from the purpose of the exemption as to engage in trades and business completely unrelated to their exempt activities, and yet the income of such business activities remains exempt from tax. If a college operates a hotel, the earnings of the hotel are exempt; if an orphans' home operates P. water works and an electric power and ges company, the earnings of these utilities are exempt; if 8 charitable organization operates a bath- ing beach, the earnings of the beach are exempt. In this way sources of considereble tax revenue are withdrawn from the scope of the tax. At the some time privately owned businesses arc forced to compete with other businesses not subject to an income tax. It is believed that the exemptions accorded to such organizations should not be so distorted. It is there- fore suggested that such corporations be texed on the income derived from a trede or business not necesserily incident to their exempt activities. Thus, it is not intended to tax an institute for the welfare of the blind on the proceeds from the sale of articles made by those aided by the institute. It might also be desireble to allow a flat exemption of $5,000 regardless of the nature of the business activity. (b) Basis of Property Acquired from Decedent. Under present provisions the basis for determining gain on an asset acquired from a decedent is the market value of such asset et the date of death. Appreciation in value in the hands of a decedent thus becomes frozen in the basis accorded to the heir or legatee. A large part of the capital gains inherent in the in- 273 17 creased value of property thus escapes income tex as the assets are handed down from one generation to the other. To remove this special privilege, it is suggested that the basis of property to the recepient for the computation of capital gains and losses be the same as it was in the hands of the decedent. (c) Annuity Trusts. A beneficiary of & trust is taxable on the portion of the trust income currently distributable to him. If, however, the beneficiary's share is made a charge upon the trust corpus, the courts have ruled that the trust, and not the bene- ficiary, is taxable. This is so even if the amounts received by the beneficiary are paid out of the income of the trust and in no way diminish the trust corpus, and even if the relationship between the yearly amount to be paid to the beneficiary and the trust income makes it inconceivable that the corpus will ever have to be resorted to. This situation offers C ready method of tax avoidance to trust grantors, since without any real inconvenience they can shift the tax from beneficiary to trust so as to avoid the higher surtax brackets. It is suggested that this special privilege be eliminated by taxing to the beneficiary the amounts paid to him to the extent that they are paid out of the trust income. (d) Amortization of Bond Premium. Holders of a tax exempt security purchased at & premium are today in the unique position of being relieved of tex on the interest paid on the security and of receiving a deductible loss upon redemption or other disposition of the security to the extent of the premium. As the premium at which a bond is obtained represents to the holder merely an effective yield lower than the actual interest rate, the holder is entitled merely to tax exemption solely with respect to such effective yield. The difference between the yield and the actual interest rate is simply C. return of capital and should be treeted as such rather than 8S E capital loss. On the other hand, the holder of & taxable security pur- 274 18 chased at a premium is in the unfortunate position of being taxed upon the interest at high rates and of receiving E capital loss upon redemption whose deducti- bility is subject to the restrictions placed upon capital losses. Since the yield rather than the actual interest rate reflects the true income to the taxpayer, only that income should be subject to tax and the capital loss should disappear. Proper tex treatment in both situations may be obtained through emortization of the premium. It is suggested that such emortization be mendatory for wholly tax exempt securities, and for pertially tax exempt securities held by & corporation. For all other securities, the amortization should be at the taxpayer's election. (e) Non-business Bad Debts. At present taxpayers are permitted to reduce their taxable income by daductions for bad debts even though the loans giving rise to the deduction have no connection with any business activity of the taxpayer. Moreover, such 8 bad debt deduction (other then losses on corporate securities) is not subject to the restrictions on capital losses. To insure a fairer reflection of taxable income it is suggested that only the first $500 of a non-business bad debt be deductible in full, end that the balance be treated E.S a capital loss. (f) March 1, 1913 Earnings and Increase in Value. A stockholder is normally taxable on the earnings of a corporation distributed to him as E. dividend. If, however, the distribution is traceable to earnings of the corporation accumulated prior to Merch 1, 1913 or to en increase in the value of property which occurred prior to that date but WCS reelized by e sale theresfter, the distribution is not taxable to the stockholder. There is no velid policy ground for according such a privilege to a few fevored shareholders. Nor is there any Constitutional requirement for this exemption, for the Supreme Court long ago ruled that 275 19 a distribution of this nature could be taxed if Congress chose to do so. Moreover, the perpetuation of this exemption is responsible for much of the complexity attendent upon the provisions dealing with corporate distributions. It is therefore urged that the exemption be eliminated. B. Estate and Gift Taxes (c) Powers of Appointment. Since 1918 the estate tax has expressly included in the decedent's estate property which passes under C. general power exercised by the decedent. Experience with this provision has disclosed a number of serious defects. The language of the statute provides a generous loophole for the evoidance of tex if the decedent simply refrains from exercising his power. Even if the power is exercised, principles developed by the Supreme Court and the lower courts ber the imposition of an estate tax where the recipients appointed by the decedent are the persons who would take the property in the absence of exercise. Finally, the existing provision reaches only general powers, thereby granting immunity to powers of disposition which are in effect as broad as general powers although technically they do not qualify as such under rules of property law unrelated to taxation. In order to overcome the foregoing defects the following changes are proposed: (1) The estate tax should reach all property subject to a power of appointment, whether exercised or not, other than powers expressly excluded by statute; (2) The powers excluded from the reach of the estate tax should be limited to (a) powers to appoint among the decedent's spouse, his descendants, and spouses of such descendants, (b) fiduciary powers, and (c) powers to appoint for charitable purposes; (3) The executor should be authorized to obtain reimbursement from the appointive property for that portion of the tax which is attributable to such property; (4) The gift tax statute should include the exercise or surrender of all powers subject to the estate tax. 276 20 (b) Life Insurance. The life insurance provision of the statute should be amended to state explicitly the criteria of taxability with respect to life insurance. It is suggested that insurance proceeds should be taxed as part of the decedent's estate if he has either paid the premiums on the policy or possessed at death incidents of ownership in the policy. (c) Contemplation of Death. The existing rebuttable presumption that a gift is in contemplation of death if made within two years of death has been productive of litigation but not of revenue. It is therefore proposed that the provision be amended to provide that all transfers made by a donor over the age of 65, to the extent that such transfers to any one beneficiary exceed, in the aggregate, a specified sum, shall be subject to the estate tax. (d) Limitation Upon Deductions for Contributions to Charity. Amounts bequeathed or transferred for specified charitable purposes are deductible in computing the estate subject to tax. The statute contains no limitation upon the amount of the deduction for such gifts to charity and thereby effords to wealthy indi- viduals an opportunity virtually to escape ell liability under the tex. The provision also enables decedents to perpetuate, through charitable trusts and corporations, family control over their wealth without paying the estate tax. The policy underlying the deduction for gifts to charity GOCS not justify such results and it is suggested that the deduction be limited to a specified percentage of the decedent's estate. 8. Additional Exemples of Herdships end Inequities. A. Income Taxes (e) Alimony. Generally speaking, alimony payments are not subject to tex in the hands of e divorced wife. Even where irrevocable trusts have been established, and the husband has no further interest in the trust 277 21 property, the income of the alimony trust is nevertheless taxable to him because it is used to pay on alimony obligation. Rising tax rates have in some cases absorbed the entire income of the husband required to pay the tax on his income and that of his divorced wife. At the same time, divorced wives receiving tax free alimony possess a privileged status under our tax laws which relieves them of any share of the tax burden. The fair solution is that recommended by the Senate last year, namely to tax alimony payments to the divorced wife. We suggest that this solution be adopted. (b) Personal Holding Companies. While, generally speaking, the special high tax placed on a personal holding company is nct applicable if it distributes all its income, in some cases this tax will be applicable even though such 8 complete distribution of income is made. This results from the fact that the net income upon which the company is taxable and the earnings end profits upon which its credit for distribution turns may be computed differently. For example, E cepital loss reduces earnings end profits but does not reduce net income. If the earnings and profits are lower then the net income A distribution of the entire income may produce P. credit equal only to the earnings and profits, leaving the company still subject to tax cn the belance. As there is no justification for this result, caused entirely by technical defects in the present tax, it is suggested that relief be accorded to such companies. The relief, which should be made retroactive to 1937, would make the tex inapplicable if the shereholders sgree to include in their income any actual distribu- tion made (or consent to texation under the consent dividends credit C.S if a distribution had been made), to the extent of the discrepancy between income and earnings and profits. Another inequity under the present operation of this tex is its coverage of industrial loan end invest- ment companies. Such companies, organized end regulated under State laws, are operating companies whose purposes 278 22 end activities are not of the type intended tc be rerched by this tax. It should be noted that licensed personal finance companies have been specifically exempted from the tax and these companies fell in the same general cetegory. It is, therefore, suggested that industrial 1cnn and investment companies be relieved from the tax under appropriate safeguords. (c) Statute of Limitations on Bad Debts and Worthless Stock Losses. The difficulties surrounding the deduction for bad debts and worthless stock losses have long been familiar sources of irritation to taxpryers and the Commissioner elike. It is for from easy to ascertain when P. debt is bed or when 8 share of stock becomes worthless. At the same time, the taxpayer must select the proper year before the statute of limitations has run with respect to that year. Much litigation is cccasioned by the artificial barrier thus thrown up by the statute of limitations, ES E taxpayer who chose one year only to be met with the claim that an earlier but barred year WAS the correct year must battle to defend his choice or lose the deduction entirely. It is believed that this useless litigation and mcny of the difficulties in this field can be evoided by, first, eliminating the sseertrinment of worthlessness and the charge-off requirement in the case of brd debts (including securities producing capital losses); and, second, allowing e seven year statute of limitations with respect to refund claims relating to C deduction on account of these items. Interest should nct be allowed for the interval between the expiration of the normal statute of limitations rnd six months after the claim WAS filed. (d) Mutual Investment Companies. The Revenue Act of 1936 provided that mutual investment companies meeting certain standards prescribed in that Act were to be taxed only en the income which they did not distribute to their shareholders. This provision in substantially the same form is now contained in the Internal Revenue Code. Since the passage of the Revenue Act of 1936, the Securities and Exchange Com- 279 - 23 mission has given intensive study to the question of investment trusts, and its work has resulted in the Investment Company Act of 1940. This Act provides for the classification and regulation of investment companies by the Securities and Exchange Commission. In the Excess Profits Tax Act of 1940 recognition was given to these developments through C. provision which exempted from the EXCESS profits tax not only those investment companies which met the special standards set forth in the Internal Revenue Code, but also those companies which were registered as diversified companies under the Investment Company Act. It is believed that the different classifications in the income tax and the excess profits tax should be harmonized with the Investment Company Act as far as is feasible. It is therefore suggested that the special treatment under the income tax and the exemption from the excess profits tax be allowed to those mutual investment companies which: (1) Qualify under the Investment Company Act as diversified companies; (2) Derive at least 90 percent of their gross income from dividends, interest and gains from the sale or other disposition of stock or securities: (3) Do not derive 30 percent or more of their gross income from the sale or other disposition of stock or securities held for less than 3 months; and (4) As respects the income tax, but not the excess profits tax, distribute to shareholders as taxable dividends not less than 90 percent of their net income, exclusive of short-and long-term capital gains. (e) Interim Reports Under Last-In First-Out Inventory Method. The provisions permitting a taxpayer to use the last-in first-out inventory method at present require that for the year of change, as well as any year thereafter, the taxpayer shall not use any other method of inventorying to ascertain profit or loss for the purpose of reports to shereholders or creditors. This requirement applies alike to annual reports and interim reports. Taxpayers who were using the first-in first-out method in 1941 may in some cases 280 - 24 - have found it desirable as a protection against price rises and inflated inventories to change to the last-in first-out method for that year. If such taxpayers, however, had issued interim reports in 1941 on the first-in first-out method, they would be prevented from making the change until 1942, at which time the protection afforded by the change might be greatly diminished. As the interim report requirement serves no real purpose and operates to discriminate unfairly between taxpayers who follow the practice of issuing interim reports and those who do not, it is suggested that the requirement be eliminated, and that the elimination be made retroactive to 1941. (f) Compensation For Services Rendered Over a Period of Five Years or More. Taxpayers receiving compensation for services rendered over 8 period of five years or more are permitted to treat the compensation as having been received over the years of service if not less than 95 percent of the compensation is paid upon completion of the services. This provision has been construed to require that the services extend over at least five calendar years, so that services rendered over a period as long as 70 months but not covering five calender years would not be within the provision. A more sensible result would obtain if the period were changed to 60 calendar months and the allocation made on a monthly basis. At the same time consideration might be given to reducing the percentage requirement. It is suggested that if these changes be adopted they be made retroactive to 1941. B. Estate Taxes (a) Pledges to Charity. Under present law pledges to charity which are enforceable against a decedent's estate are not deductible unless they are supported by a commensurate monetary consideration. Thus pledges are not deductible even though there are expenditures and commitments by the charitable organization in reliance upon the decedent's pledge. This produces an in- equitable result, since the executor must satisfy 281 - 25 the pledge but the amount so paid does not serve to reduce the estate subject to tax. The statute should therefore be amended to allow a deduction for payments 01' pledges or subscriptions made by the decedent and enforceable against his estate. (b) Credit for State Death Taxes. Existing law allows a credit for state death taxes against the basic estate tax. If the decedent has made gifts during his lifetime which are subject to the estate tax, a credit against the estate tax is allowed for the gift tax paid with respect to such gifts. This allowance of gift tax. credit may have the effect, however, of diminishing the allowence of the state death tax credit. This results from the fect that the state death tax credit is computed after the allowance of gift tex credit. It is recommended that the order of credits be reversed, so that the credit for local death taxes would be ellowed prior to the credit for gift taxes. (c) Federal Apportionment Statute. At the present time there is no provision apportioning the estate tax liability among the beneficiaries of the estate other than a provision relating to life insurance. There is no sound basis for having an express provision apportion- ing liability in regard to life insurance without similar provisions covering other transfers subject to the estate tax. It is therefore suggested that there be incorporated in the estate tax an apportionment pro- vision which would apportion the liability for tax in those cases in which the decedent did not himself prescribe E method of apportionment. 9. Procedural Provisions At this point I should like to mention two important procedurel changes which we are suggesting. (a) Suits Against Collectors of Internel Revenue. At the present time the legal rvenues available to E. taxpayer desiring to sue for F tax refund present elternatives which serve only to crente confusion and unnecessary litigation. A texpayer mey in some instances 282 - 26 - either sue the United States in a District Court or the Court of Claims, or sue a Collector of Internal Revenue in n District Court. The action against the Collector has been fittingly described by the Supreme Court as an "anomalous relic of bygone modes of thought. This antiquated procedure has no present justification, for the alternative procedures afford adequate remedies. The right to sue the Collector tends to prolong tax controversies, since a taxpayer may first sue the Collector and then if he is defeated sue the United States all over again on what is in effect the same cause of action. It is suggested that this situation be remedied by the elimination of suits against the Collector. (b) Refund Jurisdiction on Board of Tax Appeals. The jurisdiction of the Board of Tax Appeals is limited to proceedings arising under a deficiency letter issued by the Commissioner. While the Board has authority to find an overpayment in certain cases, it does not possess any general authority to hear refund claims. The Board is a tribunal specially skilled in tax matters and there is no sound reason for denying to taxpayers the opportunity to present their refund claims to such a forum. As the great bulk of tax cases are at present tried before the Board of Tax Appeals, the addition of refund jurisdiction will not unduly burden the Board. It is therefore suggested that an appropriate procedure be devised under which the Board may hear refund cases if the taxpayer desires to utilize that forum instead of the District Courts or the Court of Claims. The matters which I have discussed do not cxhaust all of the changes which we believe should be presented to the a number of minor at this which Committee. do not There merit are enumeration time. technical In addition matters there are other matters which we are still studying and with respect to which we may be able to present our views to the Committee at a later date. tile 3/3/42 283 OFFICE OF PRICE ADMINISTRATION WASHINGTON, D.C. LEON HENDERSON March 2.1442 The Honorable Henry Morgenthau, Jr. Secretary of the Treasury Dear Henry: I have been increasingly uneasy about the price situation. Sitting with Don Nelson, I have seen the production program increasing week by week, and I have seen item after item of civilian production cut. The supply available for civilian use is already down sharply from the levels of midsummer, and now looks as though it will be cut 1 per cent a month for the rest of this year. The total supply was 75 billion in 1941. It cannot exceed 65 billion this year, and the chances are it will be cut to 60 billion. On the other hand, the reports I have been getting indicate very alarming increases in buying during January. I have had my research staff look into the movement of income payments, and I must confess that the story confirms my worst fears. Income payments to individuals have grown at an accelerating rate ever since August, 1939. They were increasing by 2 per cent per month between March and December. In December they increased by 2 per cent. If the current rate of increase of income payments continues, consumers expenditures over and above savings and the new taxes will exceed supply by 3 to 4 per cent per month this year. This means an increase in the cost of living of at least 3 to 4 per cent per month this year. As you know, I talked to the War Labor Board several weeks ago and put to them as strongly as I knew how the necessity for preventing any increase in wage rates at this time. I am sending you a copy of my statement to them. Even if the Board were to succeed in preventing any increase whatever in wage rates, the increase in employment and production will lift income payments by 1/2 of 1 per cent per month. Even in this circumstance, therefore, and in view of the cut in the supply of goods available for consumption, we face a rise in the cost of living of 1 to 1 per cent per month, or an excess of consumers demand over supply of 12 billions of dollars. This, remember, is after the increase in taxes which you are about to propose to the House Ways and Means Committee. Now, I expect to do my level best to hold retail prices, but that will not be enough. With an excess of demand of 12 billion, I would have to ration practically everything in sight. While I am prepared to 284 The Hon. Henry Morgenthau, Jr. - 2 ration a considerable number of items, I am not prepared and I can see no possibility of rationing all consumers goods. The amount of the rationing which has to be done will depend directly on the amount of excess purchasing power available to consumers. What I am saying in substance is this: In spite of the tax program, the price situation remains explosive. New and even more-draptic measures, moving far beyond the pending tax program, must now be taken. The withholding tax must run beyond the 10 per cent that is now contemplated. But in my opinion even an increase in the percentage withheld would not be sufficient. I can see no alternative but to introduce, in addition, a system of compulsory saving to yield a further 5 or 6 billions of dollars. This saving should reach down to incomes which are not now taxable. I believe that a lowering of the credits and exemptions for the purposes of a compulsory saving plan would not be unfair, since the people subject to it would have an asset to draw on when the war is over and supplies are again available. Such a system would certainly be more equitable than the dissipation of their income through the further rise in the cost of living that is otherwise inevitable. Furthermore, a rise in the cost of living would be unfair not only to the persons in income groups exempt from income taxes, but to those persons who have bought bonds voluntarily. The more I have studied the situation the more concerned I have become. That is why I am hastening to get this note into your hands before you make your recommendations to the Ways and Means Committee. Sincerely yours, Leon Administrator 285 This material was supposed to have reached Secretary on March 2, but it did not arrive until the morning of March 3 and the Secretary did not see it until after his return from the Hill. 286 March 3, 1942 Paul COPIES TO: Mr. Bell Mr. Haas Mr. White Mr. Paul Mr. Sulliven Mr. Blough Mr. Tarleau FROM: THE SECRETARY 287 NATIONAL WAR LABOR BOARD EXECUTIVE MEETING (WITH MR. LEON HENDERSON) HELD IN HEARING ROOK C, SOCIAL SECURITY BUILDING WASHINGTON, D. C. February 6, 1942 PRESENT: Mr. Leon Henderson, Administrator, OPA Mr. David Ginsburg, General Counsel, OPA Public Members: Mr. William H. Davis, Chairman hr. George ". Taylor, Vice Chairman Dr. Frank P. Graham Mr. Wayne 4. Morse Employee Representatives: Mr. C. S. Golden hr. Robert J. Watt Employer Representatives: Mr. Roger D. Lapham Mr. A. W. Hawkes Other Mr. George Kirstein, Executive Secretary 34-1470 -1- 288 (The meeting convened at 10:30 a.m., Friday, February 6, 1942. ) MR. DAVIS: Well, Leon, this honorable body, created in the fashion which you know about, is evidently headed into important negotiations which involve vages in various forms, and we are going to get this steel case right away, and we are apparently going to have to take up this General Motors double-time on Sunday business, which, after all, is wages in a way. The question is that everybody is wanting to work around the clock, and on Sundays, all that sort of thing. However, there is a rage question involved. I notice that my friend Walter Reuther, in setting forth his first demand on the new General "otors contract, says that they vant a doller a day--I believe that is the figure-because they want to cover the increased cost of living, and get some of the General Motors very large profits. we had the Aluminum case here yesterday, and a great deal was said about the undeniable large profits of the 4luminum Company. In fact, the two sides got to talking about that so much that I felt that as a public member, you see, and representing the consumer for the momont, that if the two of them were quarreling about sharing excess profits, perhaps they had better give them to the consumer. MR. HENDERSON: Or the tax-gatherer MR. DAVIS: Yes, or the tax-gatherer. In other words, as you know, of course, one of our biggest diffi- culties, and I think the labor side will agree with this, is this. For instance, take this double-time. Any question of payment comes in there, and if you say to the boys, "Why don't you make a sacrifice for your 34-1470 -2- 289 country?" they are going to say, "That is fine. I am making a sacrifice for my country, but I am not going to make it to increase the profits of # General Motors." Well, that profit thing comes in all the time. Then, I hate to mention the figures because, as I often say, I never could tell an upward soiral from a vicious circle, I am not economist enough for that. But we are always told that "hatever we do is going to affect, for good or evil, this question of inflation. So we asked you to come over here and tell us something about your point of view and your thoughts, anything that you think would be of interest to us, including questions of continued liaison with your office, if that is desirable. MR. HENDERSON: In the first place, I think I ought to say that whatever the burden of my remarks today, you ought to consider them as coming from a sort of impersonal calculating machine. That is, I'm not advocating a policy that represents my personal attitudes and sympathies. I'm simply giving you the story the factual evidence dictates; just as if the keys of a machine had been punched and the machine was grinding out its answers. Those answers bear on the situation we face in trying to keep prices from getting out of hand through 1942, including the part that wage policy will play in that situation. Let me start by giving you a brief summary of by position. I have consistently held that the OPA was not the type of agency suited to wage regulation and that responsibility for the regulation of wages should be vested in an agency especially set up for the purpose, 34-1470 290 staffed by men experienced in the complex factors involved in wage nego- tiations, and acting under a declared national wage policy. On the other hand, I have consistently held that inflation cannot be prevented if wages are allowed to rise unchecked at a time when consumers have more money income than there are goods for them to buy at existing prices. Wage increases can be inflationary in two ways, on the cost side and on the demand side, and we cannot afford to forget either. First, an increase of vages may increase the labor cost of producing a commodity to an extent that may require an increase in the price of the commodity. Second, a wage increase may exert inflationary pressure by increasing the buying power in the hands of labor. An increase of wages does not necessarily increase labor costs per unit. Under ordinary circumstances, increases in output per man-hour permit of an increase of wages which does not increase labor costs of production. Through spring of 1941, the increase of wage rates was more than matched by the increase of productivity and rising wages did not force up labor costs. Since that time, however, the increase of average hourly earnings has been greater than the increase of productivity and labor costs per unit have been rising. This is the situation which we face from now on, Swift conversion of our facilities to war production entails inefficiencies which will prevent any increase of productivity per man-hour. while there may be ex- ceptions here and there, for industry as a whole this is the outlook for the duration. The case for wage increases matching increasing output per 34-1470 291 man-hour-- case which under ordinary circumstances is very strong-does not stand up under the conditions we face today. In view of this situation, wage increases either cut into profits or force an increase in prices. In the latter event, I must enter a strong protest. I am charged with the responsibility of preventing inflation. Even where profits permit of the absorption of wage increases, there are two considerations to be borne in mind. First, a large part of any increase of wages will come not out of profits but out of the United States Treasury. I estimate that under existing conditions and taxes, 50 to 60 percent of increased wages will be at the expense of revenues under the excess profits tax. If the excess profits tax is in- creased, as I expect it will be, this fraction will be even larger. Second, increased wages would increase the total purchasing power in the market at a time when the supply of consumers goods is shrinking, and thus would constitute a powerful inflationary factor. Let me review briefly the developments since the outbreak of the war in September, 1939. They fall roughly into three periods. During the first 18 months of the war, which I have often referred to as the Golden Period, we witnessed one of the most remarkable expansions in production in our history. The increase of buying power, generated by exports and our own defense program, was matched by an increase of output and prices remained practically unchanged. The reason for this is obvious. We had tremendous slack in the economy: idle mon, idle machines, idle resources, In February, 1941, the situation changed and we entered the second period. We reached capacity operations in many industries and we 34-1470 292 -5- increasingly felt the pinch of shortages of raw materials and skilled labor. During this period the increase of output only partially offset the increase of demand, and prices began to rise sharply. In the fall of 1941, we entered into the third phase. While total productioncontinued to increase, the production of consumers goods and services began to decrease. It will decrease further month by month. with buying power increasing as total production increases, and with the supply of goods available for consumption decreasing, the price situation we face is extremely serious. Part of this story is told in the chart I have here entitled, "Increase in Income Payments and the Cost of Living." In the 19 months between August, 1939 and March, 1941, income payments to individuals in- creased by 16 per cent. So large was the increase of supplies of con- sumers goods and services, however, that the retail prices of clothing increased by only 2 per cent, the retail prices of goods by only 5 per cent, and the total cost of living by only 2 per cent. The increase of demand was just about matched by the increase of supply of these goods. In the 9 months between March and December, 1941, the situation changed significantly. In this period the increase of income payments was associated with a very much larger increase in the prices of clothing and of foods and the total cost of living. While income payments increased by 19 per cent, clothing prices increased by 12 per cent, food prices by 15 per cent, and the cost of living generally by 9 per cent. The reason is clear. In this period the increase in the output of consumers goods and services was only half the increase in income payments. 34-1470 293 -6- As a matter of fact, the output of consumers goods and services has been declining since last fall, and the outlook is for continued and drastic decrease. We estimate that the output of consumers goods and services, which totalled 74 billions of dollars in 1941 will be cut this year to 65 billions of dollars in terms of 1941 prices. On the other hand, income payments, which were 90 billions in 1941, will rise to 102 billions this year. In 1941, out of the 90 billions of income payments, 4 billions went into personal taxes, 12 billions were saved, and 74 billions were spent on consumers goods and services. This year, I estimate that out of the 102 billions, the normal savings and new taxes now under consideration will absorb 22 billions, leaving 80 billions to be spent on consumers goods and services: 80 billions of demand as against 65 billions of supply, or an excess of demand over supply of 20-odd per cent. In estimating the increase of income payments this year, we took into account the expected increase of employment. the expected increase in the length of the working week, and a rising average of hourly earnings resulting from upgrading and from minor wage adjustments. We did not take into account any major increase in basic wage rates. An increase of 15 per cent in basic wage rates such as is now being proposed, if generalized throughout the wage structure, would increase waze and salary disbursements by 9 to 10 billions of dollars, and would bring the excess of demand over supply to 25 billions, almost 40 per cent. The situation which would result would be explosive and unmanageable. In fact, quite apart from the proposed wage increases, very drastic measures must be taken, (1) to increase taxes, and (2) to encourage or require an 34-1470 -7- 294 increase in savings, if the excess of demand over supply is to be brought down to proportions which are manageable. If these wage increases go through, I cannot see how a disastrous in- crease in the cost of living can be avoided. I have always argued that price control alone could not hold the line; that it had to be supplemented by monetary, fiscal, and wage measures. Only if appropriate measures on these three fronts are teken can we hold the fourth front, that of direct price control. Labor must recogise this situation which we face. Under ordinary circumstances, if we produce more we can consume more. Today we must pro- duce more but consume less, if we are to have the planes and tanica and guns we must have to win the war. As I said, the total output of consumers goods and services is shrinking rapidly. It vas 74 billions last year; it will be 55 billions this year. Lore dollars in pay envelopes will not and can not do anything to increase this total. It can only result in the bidding un of prices. This decreased output of consumers goods and services spells a de- crease in our standard of living as a nation. There is no way of ducking this hard fact. Under these circumstances ve can't all of us protect our standard of living by pushing up our incomes to match the increase in the cost of living. Just as raoidly as we bush up our incomes, we shall push uo prices. Spending increased wages at such a time is one way to make sure that you don't get anything to snow or them except increased prices. The only question at this time is whether the decrease in the standard of living which is inevitable will be shared equitably or not. If one 34-1470 295 -8- group, by getting more income, succeeds in maintaining its standard of living, it will force some other group to take a cut which is even greater than the average cut which we as a nation must take. Now there are unquestionably some groups whose standard of living is already at a subsistence level, groups which cannot, therefore, take a cut without impairing their health and efficiency. There are other groups whose living standards are so high that they can stand a greater than average reduction. I am not arguing against any change in the distribution of the pie, but I am stressing the fact that' it is going to be a smaller pie and that it is vital for us to see that the cuts in the pieces come where they will do the least harm to our national strength and our national morale. In the situation which confronts us, the principle of adjusting wages to the cost of living must be limited to those workers who are on a really sub-standard wage. The spread between the wages of workers in this group and the wages of better paid, better organized workers must be reduced. If wage increases are permitted according to bargaining power, this spread will be increased. The stronger bargainers will hold their standard of living at the expense of others, and these others will suffer a double burden, getting an even smaller piece of a smaller pie. If broad wage increases go through, we shall be forced to secure an equitable distribution of shortened supplies through rationing. I don't like that prospect. Let me confess that the job of rationing is much more difficult than the job of price control. I don't think labor will like general rationing any better than I do. put if these wage increases go 34-1470 -9- 296 through, I cannot see any alternative. Labor's position, it must be remembered, has improved enormously since the outbreak of the war in September of 1939. Average hourly earnings in manufacturing have risen since that time by twice as much as the cost of living. Average weekly earnings have risen by three times as much as the cost of living. In December 1941 both hourly and weekly real earnings were at their highest levels of recent years, Real hourly earnings were 11 per cent above the level of September 1939; real weekly earnings were 25 per cent higher, If labor takes the cut which the entire nation must take this year, roughly a cut of 12 percent in the standard of living from the high level of 1941, real hourly earnings will be back about where they were at the outbreak of the war, and real weekly earnings will remain 12 per cent above what they were at that time. On the other hand, if workers recognize the arithmetic of the situation and voluntarily forego large demands at this time, they have every right to demand that their contribution does not accrue to the advantage of management and others. They have a right to demand more drastic action on excess profits taxes. They have a right to demand a drastic increase in individual taxes, levied according to the ability to pay. They have a right to demand control over the cost of living. They have a right, in short, to demand that the burdens of war be distributed equitably. I want to see them make this demand, and I want to see it met. This is the sort of policy the situation calls for. 34-1470 297 -10- So much for an introductory summary. In starting to go into more detail, I will say that I am decidedly interested in the War Labor Board's determinations, and I would like to give the Board something of the background of the relation between wage control and price legislation. I was given the general assignment of watching prices when the National Defense Advisory Commission was formed. From the outset I found that the job of controlling prices reached out into a Food many fields. For the first 6 to 7 months we undertook to influence the factors that determine prices, in addition to completing a staff to man the observation towers, For example, ve threw out weight into the settlement of the tax amortization policies, knowing that the war programs of France and England, particularly, had been delayed by a failure to come to grips with the terms under which industry would go forward with expansion, various forms of government financing of defense plants, and things like that. We interested ourselves in the nature of the escalator clauses in defense contracts with, I think I ought to say, none too great success. It seemed very difficult, in those quiet days, to conjure up any imagery of what could happen in consequence of the escalator clauses, because at that time, as you know, we had an excess of man-power, industrial capacity and raw materials. We interested ourselves in the stimulation of the supply, particularly of the basic raw materials, feeling that if the supply side vere taken care of we would have fewer price problems. In this ve had 34-1470 298 -11- some success, but not enough. One of the things to which I think we contributed in this period was the arrangement for the importation of copper. (There vas a short off-the-record discussion.) MR. HENDERSON: About February of last year we began to see that at key points demand was catching up with the supply of idle mon, machin- ery, and materials, and with the first effect of the reduction in available shipping we were faced with acute shortages. So we passed out of what I would call the phase of observation and of Attempting to influence price via the factors which affect it; and ve entered into the administrative phase, in which we tackled prices directly. In the main, our early price actions dealt with important basic materials, We took an interest in farm-price policies initiated about this time by the Department of Agriculture, and we were forced to take a very lively interest in the effects of the wage dispute and adjustment in bituminous coal-mining, especially in the wage increase which took place in the steel industry in April, and acted as a "bell-wether" for wage increases in the basic industries generally. The main problem, as we faced it at that time, was whether the ware increase would necessitate an increase in the price of steel, by occasioning an increase in costs which the weaker companies, especially could not absorb. We would have preferred a smaller increase than actually took place, thinking it safer from the price standpoint. 34-1470 -12- 299 When the larger increase was granted, our first answer was: "Hold prices and wait and see. We think there's a fair chance that a pricechange may not be necessary." The final answer has been a qualified one. The basic price-schedule has been maintained, with the help of some adjustments, which meant that some increased costs were passed on to the buyer. In April, the President created OPACS, which brought together price and the question of civilian supply, and since that time we have moved forward until, at the wholesale level, we have between 45 and 50 per cent of what is contained in the wholesale price index under some kind of formal or informal control. It was apparent in June and July that the need of a statutory basis for price regulation was almost upon us. I had talked with the President at various times about price control and with Mr. Baruch, who had made it one of his prime interests since his experience in the last var. He had found that it touched everything. He often said that it touched everything in the war and it touched everything at the peace table. So we approached the President, and the question at that time was whether or not price control should include all prices and all income payments, which would include, of course, 'vages and saleries. There was considerable pressure to include wages. life took the position that the price control type of mechanism was not suited for wage regulation, and that problems of wage adjustment should be approached from the standpoint, first, of the existing agencies, 34-1470 -13- and second, possibly, of the creation of an emergency board which would handle them under some national policy generally announced and agreed upon. On that representation the President decided to let us go forward with a commodity price regulation, which also included rents. One of the major questions in the House and in the general dis-cussions by the public was that of wages, and as the time for voting on the bill in the House-which was delayed several months-approached, I again took up the question with the President and said that it seemed imperative to me that he should tell the Senate and House leaders that he was prepared to meet the question of the inflationary effects of vage increases by other instrumentalities. I suggested at that time that the experience of the War Labor Board in the last war indicated a pattern that night reasonably be followed. Wo kept to that line and resisted all attempts to merge wage and price regulation. But along with this we always took the position that prices could not be kept in line and inflation could not be avoided if wages were to be left free in a period in which you had an increase in the volume of purchasing power accompanied by a reduction in the available amount of goods. So I was, of course, extremely gratified to see the war Labor Board created. Now the Price Control Act contains a general statement on wage policy. Are you familiar with that, or should I read it into the record at this time? 34-1470 300 - 14 - 301 MR. DAVIS: I wish you would because, so for as I am concerned, I am not familiar with it. MR. HENDERSON This is from Section 1 (a) of Public Law 421, 77th Congress, which is the Price Control Bill. "It is hereby declared to be in the interest of the national defense and security and necessary to the effective prosecution of the present war, and the purposes of this Act are, to stabilize : to protect persons with relatively fixed and limited prices incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities and pensions, from undue impairment of their standard of living "It shall be the policy of those departments and agencies of the Government dealing with wages, including the Department of Labor and its various bureaus, the Mar Department, the Navy Department, the Mar Production Board, the National Labor Relations Board, and the National Mediation Board, the National War Labor Board, and others heretofore or hereafter created, within the limits of their authority and jurisdiction to work towards the stabilization of prices, fair and equitable Wages, and cost of production." 34-1470 -15- 302 MR. LAPHAM: That is all it says that would affect us? MR. HENDERSON: Yes, that is all that would affect you in the act. Now, Mr. Ginsburg and I, having carried the legislation from August on, are familier, to some extent, with what was in the minds of the managers of the bill, and I think that the bill is consistent with the representations that we were making as to the difference between wages and prices. and also as to the necessity of considering that it was pos- sible for vazes, like any other elements in the cost of production, to evert an inflationary effect. It is worth noting, too, that persons on fixed incomes are mentioned alongside of wage-earners as persons to be protected from "undue impairment of their standard of living." That phrase: "undue impairment," constitutes, it seems to me, recognition that our national standard of living, the national pie, must shrink, PS we expand war production, and constitutes further a declaration of policy that no share shall be inequitably reduced. Let me remind you again of the arithmetic of the national pie. This past year. 1941, the national income was 94 billion dollars. Out of that 94} billion, 90 billion was paid out as income to individuals, the rest of it representing business savings, social security contributions, and some transfer payments. Now of the 90 billion, 4 billion represented personal taxes, 12 billion was saved, and 74 billion was soent for consumer goods and services. Look- ing at the figures another way, out of 941 billions of income, 74 billion represented consumption. 12 billion represented defense expenditures, and g billion represented new private end public (non-defense) investment. 34-1470 -16- 303 DR. GRAHAM: That was 1941 MR. HENDERSON: Yes, that was 1941. Now we estimate that, while the price tags on the national income are bound to change because of some inevitable rise in prices, and the national income may be 16 or 17 percent higher this year than last, the physical volume of goods and services available for consumption will be reduced by about 12 percent. DR. GRAHAM: Could you translate those into figures? MR. HENDERSON: All right, I will translate it into figures. DR. GRAHAM: Both for the national income and the consumer and war durable goods. MR. HENDERSON: Yes, I was just about to do that, Dr. Graham. The national income will be 109 billion, but the actual increase in physical output of goods and services will be only 6 percent. In terms of 1941 prices, the national income will be 100 billion dollars. DR. GRAHAM: Is the 94 billion analagous to the 100? MR. HENDERSON: Yes, both figures are on the same scale. Now, we shall produce something like 40 billion dollars' worth of war goods, as compared to 12 billion in 1941, but not all of this increase will be at the expense of consumption. Some of it will come out of the increase in production I mentioned Some of it will come out of curtailment of new investment for purposes of producing civilian goods. We estimate that nine billions of it will come out of a decreese in the standard of living: that is, that the supply of goods and services available this year for consumption will total 65 billion, measured in 1941 prices, as compared to 74 billion last year. 1470-34 -17- 304 On the demand side, income payments to individuals will be 102 billion. Subtracting from this personal taxos of 6.4 billion-this figure includes taxes now under discussion-and normal savings of 15 billion, we arrive at a demand for consumers! goods of 80 billion, 15 billion greater than the supply. This is the inflationary gap that people talk about. Unless vigorous steps are taken, this means a minimum increase of 23 percent in the cost of living, Taking into account the pyramiding effects of price increases and the run-up of wages and other incomes, the increase of prices could be 2 or 3 times as great as this. As I pointed out earlier, this estimate of income payments does not allow for the increase of basic wage rates which is now under discussion. Fifteen percent increase in wage rates would increase income payments by a further 9 to 10 billion dollars. Now when I talk about 65 billion dollars' worth of consumers' supplies, I may be optimistic. I may be optimistic in supposing that the tremendous war effort will not ruthlessly cut civilian production. For example, it might interfere with the textile industry, where we are getting a large part of these goods. We are using about a million bales of cotton a month right now, the highest level that we have ever used. Well, that textile machinery-as George knows, maybe better than I--has been running the last several months like it never ran before. Either they have got to have new machinery or they have got to have help of some kind. If the war effort makes impossible the replacement of machinery as it wears out, we won't use a million bales of cotton, we won't produce the textiles. Now, it also represents an optimistic view because it is difficult to say how large will be the amounts of goods that we shall have to ship 34-1470 -18- 305 overseas for expeditionary forces of our own or for other countries. MR. LAPHAM: That is war materials. MR. HENDERSON: I am talking about blankets and warm clothing and woolen goods and foods, too. Part of the Germen retreat right now is due not to the fact that their airplanes won't work, but to the fact that their troops don't have sufficient warm clothing and other supplies, As you know, we are probably going to have to send some sugar or things containing sugar back into areas that produced hundreds of thousands of tons of sugar in recent years. The same is true of rubber and lots of other things. In view of the supply situation that faces us, I say that any increase in basic wage rates will compound an already almost unmanageable problem, and when I say that, I am thinking of what is happening right now in the consumer markets. As to the prospects of handling it, if we assume for example that we have a ceiling such as Canada's, that is, a complete freeze, no more increases of any kind on anything, we would still have this problem of tremendous excess demand. We just don't dare permit that excess demand to increase. On the contrary, we have got to draw off some of that purchasing power, and the two outstending ways are by taxes and by savings. Now, the disturbing thing about current bond sales, which are running along in dollar values very satisfactorily--s billion in January and the prospect of 900 million in February-- is that a large part of that total is a diversion from other types of savings: and a further disturbing thing is that the tremendous increase in merchandise purchases that we are 1470-34 -19- 306 witnessing now-as I will illustrate later--probably also represents expenditure not out of current income but out of cash balances and savings accounts; that is, a flight from money into goods. People are buying things because of the prospect of shortages. In the bond program the most gratifying thing has been the increases in the employee purchases, that is, out of current wages. General Electric, as J recall just offhand, went from 15 percent of the employee participation up to about 95 percent, between the Pearl Harbor incident and January. I think the basis there is a payroll deduction. MB. HAWKES: Leon, it might be interesting for you to know that out of three plants we are 100 percent in our biggest plant, we are 98 percent in our second largest plant, and 95 in the third plant, total membership: and it is not just one purchase but it is a continuing purchase on the wage allotment plan. MR. HENDERSON: Yes. I am saying we have what looks like a tremendous amount. However, a large part of the bond purchases represent no additional saving at all, but a diversion of normal saving. So far as that is the case, they represent no reduction in the figures we have used for dollar demand in our calculations of the gap, and therefore they do not reduce the gap. We have a great threat by reason of the way a shortage of goods, or a threatened shortage, speeds up buying. Information gets around that of course there are going to be no more refrigerators, there are already no more automobiles, and you ought to go out and buy this and you ought to 1470-34 -20- 307 go out and buy that. Well, that is what I would cell the over-all global picture of the supply of purchasing power, as against the picture of goods that are available to be bought. I should say something about the tax situation. I don't know exactly what the tax program will be as Mr. Morgenthau takes it to the Congress. It is likely to represent, I believe, about an additional 9 billion to be collected in fiscal 1943. That 9 billion will represent more corporate taxes, more personal income taxes, more social security taxes, probably as much as two billion, and some increases in excises, but it is very, very evident that there will have to be additional withdravals. This might be done dither by way of a sales tax of some kind-- a retail sales tax--or a manufacturers' gross volume tax; or it might be done by a forced savings program of some kind, That is, we just simply cannot face the prospect of letting the price level be compelled to absorb all the dollar income that is going to be left, over and above the total of real net savings by voluntary subscriptions to defense bonds, and what taxes are now in prospect. It may be necessary to withdraw more than Congress, under the strain that it is under, would be willing to take in the form of taxes. DR. GRAHAM: What about bank credit in this situation? Any control by the Federal Reserve System? MR. HENDERSON: Yes, but put it this way. The Federal Reserve System is already controlling installment credit. This merely prevents a compounding and an increase of our problem. It does not reduce the excess 1470-34 308 of demand I have been discussing. DR. GRAHAM: As you point out, it probably can just prevent compounding. MR. HENDERSON: That is right, What I am saying, of course, is that we are up against a more serious situation than I would like to have the public know. We have been literally holding our breath not GO much to get complete control over prices, but to get something much more effective. That is, we need to be able to exert more resistance to the pressures that are developing in the areas we have already covered, and we also need the mechanisms by which we can get into the field of retail price control. DR. GRAHAM: Is the Secretary of Agriculture going to exert control under the law that is going to be effective? MR. HENDERSON: We are going to exert control, We have worked out our difficulties very happily and the actions which Wickard has taken and the pronouncements he has made have been entirely consistent with our policy. We have insisted from the start that price control itsolf WAS not a complete anti-inflationary control, as I indicated in the beginning: supply has much more to do with it. If ha is not prevented from using his powers to sell, he can definitely affect the price picture. DR. GRAHAM; There is a great reservoir of cotton, for example, MR. HENDERSON: We worked out a procedure on that, Frank, to release some of it to the War Department. We put it under what we call Governmentfurnished category. The War Department would supply it to the cotton mill so they wouldn't have to be bidding for it in the market. We may 1470-34 -23- 309 get as much as three million bales diverted that way. I would like to run through some charts now. DR. GRAHAM: When you have more people with more money to buy goods, you have something. MR. HENDERSON: I think so. There has never before been as dynamic a price situation in this country as exists right now. DR. GRAHAM: There are more people working and more money than ever in the history of this country, and there are less goods for them to buy. MR. HENDERSON: And, as I say, I em anxious that particularly the fellowe on the labor side of the table shall understand that this is merely punching the separate elements of the supply and demand situation into the calculating machine and telling you what the machine says is the net result. This first chart represents the price behavior of the 2'8 basic commodities; that is, the primary raw materials. These prices have risen 65 percent since August of 1939. Notice the powerful upward surge which set in in August of 1940 and has continued almost without interruption. Some of the items in this series, particularly the metals, we've had under control since last spring. It'a the foods and fibers that account for the upsweep. These 28 are the most sensitive prices. When they move up, other prices will be moving before long. Now consider these charts, which represent the wholesale prices of nearly 900 commodities. The general level of wholesale prices is up 26 or 27 percent from their level at the outbreak of the war. 1470-34 -23- 310 MR. LAPHAM: From September 1939? MR. HENDERSON: Yes, and in this connection you should keep in mind that the price level in the last war doubled--that was during the warand took a further rise in the post-war period, when the restrictions were taken off and prices bounded up. DR. GRAHAM: That was how much? MR. HENDERSON: About 26 percent. In other words, we have gone one- quarter of the way toward another war-time doubling of prices. But the important thing is that since Pearl Harbor the increase has been 3 percent, which is a decided increase in the rate. DR. GRAHAM: Is that included in the 26 or added to it? MR. HENDERSON: It is included in the 26. I will put it this way. In the period up to August 1940, after the first tilt in prices, we had very little increase in prices, because of our surplus capacity. They started moving that August and took a sharp jump in February, as these charts show, and have been moving up sharply ever since, Following Pearl Harbor, the tilt has been even sharper. Notice that the metals and the fuels have not moved up as rapidly as other groups. We exerted our greatest pressure here. MR. WATT: Is there any particular percentage, Leon, on food and clothing? MR. HENDERSON: I am coming to those: I have those, Bob. We exerted our greatest pressure against the industrial raw materials. Based on my knowledge of the last war as to the importance of steel and of copper and other nonferrous metals, we threw our weight there first. 34-1470 -24- 311 We have been pretty generally on a keep-off basis, so far as agricultural commodities are concerned, because of a national policy, and except where there was a decided inflationary trend we have not inter- vened. However, despite all that, we kept the industrial raw commodities to something like 146, or a 46 percent increase. Since Pearl Harbor everything except the metals and fuels has shown substantial increases. Here are building materials, chemicals. The black line in each chart represents that category of goods. The thin line in each chart represents the movement of the general index, House furnishings have been above the generel level, This one--fuel--has leveled off because of some action we took on petroleum and fuel oil, and some pressures we exerted against retail cost prices and things like that. Hides have been running up, partly because of increased Army demands, of course. This chart gives you an idea of what the recovery of farm products has been. MR. WATT: What year was that when it hit the bottom there? MR. HENDERSON: That was 1932. MR. WATT: What is the thin line on the top on the farm products chart? What does that represent? 34-1470 -25- 312 MR. HENDERSON: That represents the entire wholesale index, all commodities, about 900 of them in the BLS index, What this chart shows is that after being below the general index for many years, the farm products index has come back into balance. In fact, it is tending to go ahead and will go ahead, of course, unless it is checked. In the case of foods, we have had a similar situation-also in textilos. In the case of textiles, we have a floating kidney kind of arrange- ment. That is, we don't have a ceiling on cotton itself; we fix the mill margin and then add the cotton price. The price of cotton, of course, has doubled in the last year. The significant thing about all those charts is that all parts of the wholesale price structure are now moving up at an increasing rate. The movement is no longer confined to one group here and one group there; it is general. Let me show you now what is happening on the retail price front. On all these charts, movement of retail and of wholesale prices is indicated. The movement of wholesale prices forecasts the shape of things to come for retail prices. The wholesale price represents the cost to the retailer, and therefore, as the retailer turns over his inventory, he is obliged to mark up his prices. Up to this time we have had excellent cooperation from the retail groups. They have not marked up their prices in advance of an increase of cost. But if we are going to be in this thing for a long time, the lag between retail and wholesale prices is bound to be made up. In looking at what is happening to the cost of the things the consumer is buying, bear in mind that up until now we have had no real authority, 34-1470 -26- 313 or mechanism, or organization for control of prices at retail. Please notice that in all these charts the increase of retail prices set in last February. Up to that time, increase of supplies matched the increase of demand. Since that time, the increase of supply has fallen / further and further behind the increase of demand, and prices have moved up sharply. This chart shows the movement of prices of woolen blankets at whole- sale and at retail. You see what has happened to the wholesale index, and here is retail, coming along here. MR. WATT: What is the reason for the great differential, then, between wholesale and retail? Early in the spring of 1939 retail was considerably below wholesale, whereas in the middle of 1941 wholesale swung up way above retail. MR. HENDERSON: Well, that was the increased cost of wool; with the Government coming into the wool picture for uniforms, it made a real dent in the supply. We made an adjustment the other day and brought wool up to 110 percent of parity. The reason we brought it to 110 percent of parity was to get a ceiling and keep it from going beyond. We are going to have to limit the amount of virgin wool that can be used by civilians, and that will run from 25 to 35 percent of what it used to be. Retail prices, of course, are now catching up fast. MR. LAPHAM: In keeping your retail prices down, has that been more or less the voluntary action of retailers? MR. HENDERSON: What I would call acquiescence and cooperation both. We have been after them all the time, but there have been no penalties, 34-1470 -27- 314 I will put it that way, Mr. Lapham Here is the chart on men's topcoats, I will just run through these charts, and you stop me if you want to. On wool suits, we do not have recent retail quotations, but if you had January on here, the index would start up again. Some retailers are limiting the number of suits they will sell to any buyer. Richman Bros. for example, are limiting customers to two suits. You see, we have a lot of clothing that is sold on a fixed price basis. You may have seen an ad in the paper today by one of the chains that said "Prices have to go up, but until February 15th we will sell our stock." There has been a tremendous run, of course, and that means they will go up still further. Here's the picture on shoes. You can see the retail price index caught up and went ahead of the wholesale price index. Here are trends in food prices. That is the retail price of food DR. GRAHAM: Of what? MR. HENDERSON: This line is the index of prices received by farmers; then this line is the index of wholesale price of food, and that line is the retail price index. Now, this is the significance of this chart. Notice that farm prices, wholesale prices, and retail food prices have fanned out. That is because the first represents the beginning of the process and there is a lag between farm prices and wholesale food prices, and a further lag between wholesale prices and the prices the housewife pays. So that regardless of what we could do, if we could stop off this price received by farmers, by a combination of Wickard's efforts and ours, any time something got up to 110 percent 34-1470 -28-- of parity 315 regardless of that, the retail price would continue on up because of the lag between markets. We anticipate that the demand for food, as represented by what people will have to spend, will be about 14 percent higher this year than it was in 1941. The amount of food on the shelves that they can buy will be up only 3 percent. DR. GRAHAM: We have to be arbitrary. MR. LAPHAM: I guess we will eat less. MR. HENDERSON: Well, we won't eat less, but there will be an awful scramble. This is the sugar chart. We held that down for quite a long time. MR. LAPHAM: Your wholesale price is less than retail, is that right? MR. HENDERSON: No, this is an index. That chart shows cents per pound. What these represent over here are not prices, they are indexes. It doesn't mean that the actual cents price or dollar price is different, it is the index, the relationship; but this sugar chart is the actual cents price. We fixed the price of sugar. It started to run up and we intervened and brought the price down to 3. and now, as you know, because of the agreement with the Cubans, we have to move it up. Here is the chart on bread in cents per pound. You will notice that the margin--that is, what the baker and the retailer get-has not increased. I would have said last year when we started out that we could not keep control over bread prices, but we tried it. The industry happens to be concentrated in the big units, and the detailed cost figures they keep enabled 34-1470 -29- 316 us to get a control despite the rising cost of the ingredients. We allowed the retail price to go up only as much as the cost to the maker of the bread went up. We held his margin; in fact, we cut his margin. There are several States in which we have had to lift the price of bread for the baker because of those fair-trade laws, you know, which prevent your selling below a cost plus mark-up. We have had excellent cooperation from all but one of the big bread makers. They have not only given us cost figures, but they have let us put our accountants right on their books and talk with their accounting firms, and so.on. We have a couple of tough industries right now that don't want either to give us any information or to let us look at the books, but that will be corrected soon. This chart is on sheets. We are exerting some pressure in the price of sheets. This one is on house furnishings. This one is my Waterloo, fats and oils, but we have hold of it and we are going to hang on. Here is the trend in meat prices. Now, I said that the demand for food, representing what workers and everybody else have in their pockets to buy with, will be 14 percent more and the supply of foods in general will only be 3 percent more than in 1941, As for meats, the increase of demand this year over last will be 19 percent, while the supply will be unchanged. We face a bad situation on meats. MR. TAYLOR: Why that dip? MR. HENDERSON: Part of it was our program; just some general hell- 34-1470 -30- 317 raising, George, that is just about the size of it, coming at a good, seasonal time. That is about it. It was just going way out of reach, and then Wickard got in and sold corn to lower the cost of feeds, and did a very valiant job there. We shall have to meet the question this month: what to do when hogs go up to 110 percent of parity? This morning they stood at about 107.39, as near as you could compute it. Three more points and we will have a question, Do we or don't we? Now in the case of some of the foods, I must say that we have got an increased amount of supply by letting the price run up, and it is true that we are badly off on hogs and fats. Here is the chart on cheese prices. The rise in prices is due largely to shipments to Britain. The English would rather have cheese than almost any other food we can give them. MR. WATT: And onions. MR. HENDERSON: Yes. Here is the milk chart, and that has just been a gradual fight, right on up, a cent here, a cent there, and so forth; another cent now in prospect in New York, Here is the chart on dairy products. IR. GRAHAM: Is milk included in your parity limitation? MR. HENDERSON: Yes, it is. Here is clothing. Here is our old, familiar work-shirt, Bob, from the NRA days. You remember? And this represents what I would say is not a runaway trend, taking advantage of the market; work shirts very often are sold by chains and by the Sears, Roebuck type of company and they tend to keep their prices pretty well in line. 34-1470 - 31 - 318 Now this is really a key chart, and I an not so sure that I an going to be able to get the full explanation over to you. NR. DAVIS: Give us the title for the record. MR. HENDERSON: This is, "Increase in Income Payments and Cost of Living (for Selected Periods). " It covers two periods; the first from August 1939 to March of 1941, the second from March to December, 1941. Now, in that first period, as you can see, the income payments went up about 16 percent, but the items in the cost of living went us only 3 percent. R. WATT: The middle one is what? Food? MR. HENDERSON: Yes. During this period the increase in the supply of consulers goods about matched the increase in demand, and prices moved up hardly at all. HR. TAYLOR: Wes that reflected in increased saving down there? MR. HENDERSON Chiefly in increased consumption. Consumption increased along with income payments because there was lots of Black in the system. The standard of living rose. During the second period, from March of last year to December, the story is different. Income payments increased by 19 percent. That's 2 percent a month, almost 3 times as great a rate of increase as took place during the first 19 months following the outbreak of the war. This represents one of the most rapid increases in income payments in our history. Nov, while the sayly of goods also increased, it did not increase as rapidly as demand, and therefore prices rose. The cost of living rose by 9 percent, clothing prices by 1a} percent, and food prices by 15 percent. 34-1470 - 3a - 319 HR. MATT: Clothing went up? WR. HENDERSON: Clothing went up 12 to 13 percent. Since last fall, the surply of consumers goods has actually been de- creasing and, as I pointed out, will total only 65 billion this year in 1941 prices. On the demand side consider this chart, entitled "Average Hourly Earnings in Wages and Salaries in Manufacturing Industries Compared with the Total Wages and Salaries. If Remember that wages and salaries constitute about tvo-thirds of income payments. MR. LAPHAN: When you say, "salary," does that fix it at a certain amount? Is that the lover-bracket salaries? HR. HENDERSON: No, this is all salaries. This is taken from the monthly income payments report of the Department of Commerce. DR. GRAHAM What proportion of that is wages? MR. HEIDERSON: Well, on that total I'd say about 60 percent of it. The lowest line revresents average hourly earnings in manufacturing industries. Average hourly earnings in December were up about 24 percent over August 1939. The middle line represents total wages and salaries. These rose by nearly 50 percent. The top line shows wages and salaries in manufacturing. These were up 87 percent. MR. MATT: Why is there such a great differential between the average hourly earnings, which runs pretty level, and the big increase in wages and salaries? HR. HENDE SON: The difference is due to the great increase of employ- ment and to the increase in the length of the work week. 34-1470 - 33 - 320 The thing which I think is most significant in this lower line, showing average hourly earnings, is that the effect of the wage increases in the basic industries, which took place last spring, can scarcely be noticed, so rapidly did the increase spread throughout industry. Steel was the bellwether, but the flock was not far behind, This bottom line shows here very plainly what took place in average hourly earnings. It shows how fast that particular ringing of the bell was communicated into the rest of the wage structure. HR. WATT: We knew that. (Laughter) MR. HENDERSON: I mean, Bob, you people picked the wage increase in steel for the same reason that we picked steel prices as the first one to control, the first one of the big industries to control, not only because it affects, by example, price and wages, but because its price is a constituent cost of so nany products and thus affects so much more of the price structure. 12. MATT: On that last chart, Leon, where would the line go if you were usian one of the cost of living and running it with average hourly earnings? MR. HENDERSON: Well, your average hourly earnings have increased, you see, about 24 percent, and the cost of living has gone un about 12 percent since August 1939. In other words, real hourly earnings, that is, hourly earnings corrected for the cost of living, are up 12 percent. Weekly earnings are un 37 percent since August 1939 and, corrected for the increase in the cost of living, they are still up 22 percent. MR. MATE: Overall? H.R. HENDERSON: Yes. HR. GOLDEN: Mr. Henderson, there are a couple of things I'd like to 34-1470 - 34 - 321 ask you, about the steel prices and wages, and so forth. If I understand it correctly-and I don't claim to be an economist- what you've got in the steel industry is a price structure which has been evolved that breaks even the costs that are involved. Of course, there is a profit. HR. HENDERSON: The break-even point for steel is usually at about 45 percent of capacity, something like that. MR. GOLDEN: Now, for a great many years, they never worked over any extended period at anything like capacity. Now, starting from that price structure, based in that manner, they have had a long period of a sustained, high rate of operations. M.R. HENDERSON: That's right. 1.3. GOLDEN: Now, then, in spite of the wage increases granted last word, their profits are zooming up. R HENDERSON: Their wage payments have zoomed up, but they have absorbed them. R GOLDEN: and a Good deal besides. R. HINDERSON: Well, the earnings of Bethlehen on a reported basis show less t'an 1940. U. S. Steel shows more; Republic's, out today, shows more. Their gross earnings, before setting aside depreciation and other reserves are to froix 1040 levels. I haven't checked into this, and I wouldn't want to be held too close to it, but ay guess is that gross earnings after taxes, but before reserves, are up some too. 3. GOLDEN: It was in 1941, vasn't it, Mr. Henderson, that the long period of sustained capacity production took place? 12. HINDERSON: The industry got us to a his level of operation in 34-1470 - 35 - 322 September and October of 1940. MR. GOLDEN: Yes, the end of the year, the third quarter. HR. HENDERSON: That's right, but they have been running at capacity operation since. We had a request, of course, for an increase in price due to the wage increase, and our calculations--and I am very proud of this-were much better than the steel companies calculation as to what would be the net result, taking all the factors together. Now, what has happened has not only been the increase in wages, but the materials that they buy, which they have to purchase on the outside, have Cone.up, and they have absorbed those also. MR. GOLDEN: But there have been lots of other arrangements whereby the price range has fluctuated a Good deal in one form or another, hasn't it? on special items? and upgrading? and things like that? IR. HENDERSON: Yes, there has been some edging up, but we've held the basic prices. You've got to look at the overall earning rate, and I think you will find that that has tended to stabilize. I think the price fixing that we did last April-and we've made a little adjustment here and there, but in the main we've kept that stable-has been a very, very healthy thing. If ve had permitted steel prices to go uo, it would have thrown an additional rocket into the price structure generally. Let me say this--and not in derogation of the requests for increases that have been made-in my opinion anything like the wage increase that is asked of the steel mills would force an increase in price for two reasons, only one of which needs to be stated. That is, the standards of the Act would require us to consider what had been the change in the 34-1470 - 36 - 323 structure of their cost of production, and we'd have to take that into account. Now, I an very proud of the fact that we put standards into our bill. You may not be aware of it, but there are no standards in the Canadian act; there are no standards in the English act; or, as I recall, in the +ustralian. We put standards in there, and ve would be compelled to consider them. NR. LAPHAN: In the corporation reports that you mention, is it a fact that increased taxes have tended to stabilize the net income? HR. HENDERSON: Well, they have tended to, yes. That is, they took a larger part of the gross income. HR. DAVIS: Leon, what do you mean by "earning rate?" HR. HENDERSON: In connection with the steel company? R. DAVIS: Yes. MR. HENDERSON: It's their profits rate. That is what I mean. 34-1470 - 37 - 324 NR. DAVIS: Well, is it profits per ton, or total profits? MR. HENDERSON: No, total profits. MR. HAWKES: Mr. Henderson, isn't it important for us to remember that the ability to take up increased cost that was there from lower production to full production is gone? You haven't got that factor any longer to rely on? NR. HENDERSON: That's right. And that is what we counted on in forcing the to absorb the wage increase of last spring. That is, we just held firm on that. We said weld reconsider it as the end of a quarter, and then that quarter went by, and the next quarter went by, and the third ouarter went by. I have seen them recently, and not one of them has men- tioned applying for an increase, except if their costs are changed. MR. WATT: When your office, Leon, is considering this whole matter of the price structure, does the U. S. Steel, Bethlehem, Republic, or all of the others, use the same base upon which to estinate contingency and depre- ciation funds? Or is there a great leevay? HR. HENDERSON: There is a difference. MR. WATT: For instance, does your office also take into consideration the capital structure of the concern itself? I mean, in relation to how such water is probably there, and so forth? MR. HENDERSON: The capital structure is not our primary standard for price-fixing, though we have to take it into account sometimes. But we have not used our price control powers as a means of remodeling the prevailing price structure, which might have resulted from a monopoly or from a watered capital structure or anything like that. Our mandate was to control the price structure to prevent a runaway inflation. And so we have, for example, 34-1470 - 38 - 325 accepted the basing-point system as a part of the marketing mechanism and pricing mechanism of the steel and other industries. MR. WATT: Does the basing-point system take into consideration the question of contingencies and depreciation and the capital structure? MR. HENDERSON: The prices they quote, under the basing-point system, I would say, reflect that because of the commetitive situation. HR. GOLDENT: Well, the basing-point system is an entirely different thing today from what it was a few years ago, isn't it? by the process of multiplying the basing points? MR. HENDERSON: Yes, it's a different thing. But put it this way: The base prices are usually set by Carnegie-Illinois with a weather eye on its rivals. Up until quite recently, with a subnormal volume of production, the efficiency of operation of Republic and National just made it highly unwise for Carnogie-Illinois to raise the base prices as they might when they had 60 to 70 percent on the market in the old days. When they still had 40 percent of the total steel produced, they didn't have that much in the automobile sheets and things like that, for which Inland and Republic got geared up. I'll put it this way: I'm not trying to make out a case that the steel price structure represents a fully competitive price structure. I would say this: through the basing-point system, they have been able to hold prices, in a period of depression, above where they would otherwise have gone, by reason of just trying to keep them at the existing level. Now, there has been price-cutting and chiseling, of course, but not nearly as much as there would have been if the basing-point system hadn't existed. Our contention has been, and I think it has been sustained in many 34-1470 - 39 - 326 instances, that if it had not been for the basing-point system, there would have been a larger volume of steel activity, a larger volume of business done, and the country would have been better off and they would have made as much profit in the periods of decline. HR. GOLDEN: Do you know how many basing points there are? MR. HENDERSON: I don't recall, offhand. MR. DAVIS: Leon, when we were trying to write the obituary of the NRA in '35 or 36, we made an effort to try to get some figures on how vage increases affected the cost of production. For instance, say the wage cost in a ton of steel is 45 percent, or whatever figure you take, and you increase the wages 10 percent, you'd think offhand-you might think-that that would mean a 4 percent increase in the cost of production-4 percent. Of course that isn't always true by any means, and the Bureau of Labor Statistics didn't have much in figures on that at that time. In fact, we couldn't get anything at all that was any good. I was wondering if you have any figures on that. HR. HENDERSON: Well, I have an entirely different approach to the price situation. I look at the balance sheet and the profit and loss statements and I can tell, in fact, with our accountants, we came within a plus and minus of 2 percent of what the steel corporation would earn with the new rates. If you try to get into the cost of all those items, and try, too, to look at the book of extras on steel products, and try to do it on a product basis or a cost basis, it's just impossible. That is what they tried in the last var, and I made up my mind against it. I want to see how a company is going generally. If it happens that some of their individual products are 34-1470 327 out of line, then we ask for specific cost figures. But pretty generally, we have relied up to now on what had been their annual earnings. Pretty generally, if annual earnings have been such as to sustain the industry over a period of time, and let it replace its equipment, we regard them as a satisfactory standard. Variations from time to time are due to a lot of factors. MR. GOLDEN: In calculating the costs of the steel corporation, you have access to the figures of the individual, effiliated producing com- penies? or is it an overall figure? MR. HENDERSON: We get the individual figures. And of course, Mr. Golden, during the TNEC we went into all these things very, very minutely with the companies. MR. GOLDEN: Well, the figures that are usually available about the profits of U. S. Steel are based, aren't they, on some sort of a consolidated statement of various subsidiaries, including railroad and water transportation, and so forth? MR. HENDERSON: Yes. MR. GOLDEN: Then, when you arrive at some calculation there, relative to cost, doesn't it put the fellow who doesn't have all these other supplementary facilities at a disadvantage? MR. HENDERSON: You mean with regard to U. S. Steel? MR. GOLDEN: Yes. MR. HENDERSON: Well, do you want this on record or off the record? MR. GOLDEN: I'm not trying to make a record. MR. HENDERSON (Statement off the record.) MR. LAPHAM: Clint, what you have in mind is that in the steel corporation there are certain companies that just do nothing but manufacture steel? 34-1470 -41- 328 MR. GOLDEN: That's right. MR. LAPHAN: Now, in the Corporation, you have these side issuesrailroads, shipyards, or ship companies, and whatever they may be. When you are considering the industry as a whole, what is the proper price structure or wages, and so forth and so on, then you should cast aside the incidentials. Now, are the incidentals in the by-play in the whole? MR. HENDERSON: As a matter of fact, if you didn't take some of those into consideration, prices might be set higher. It is one of the most interesting pictures that I ever saw, just as a student of industrial enterprise. Some of the other companies were just making mincemeat out of the Corporation's business, and there wasn't anything they could do about it. MR. GOLDEN: I think there was one time the Corporation had 65 per cent of the ingot production, and it dropped down to 35, and that represents the period in which the other fellows ascended. KR. HENDERSON: That's right. And it would have dropped further if they hadn't got on this other basis. I'd like to run through a few more things, and then I'm done. DR. GRAHAM: How many of those can we have photostatic copies of? MR. HENDERSON: We'll get you photostats of any of them that you went--all of them, if you say. MR. GOLDEN: They're all pretty interesting. MR. TAYLOR: We'd like to have them all. MR. HENDERSON: We'd be glad, if you have no staff that is doing this for you, to be of any assistance to you that we can. DR. GRAHAM: Mr. Chairman, I'd like to move that we ask for photo- static copies of all these, and that he keep us up to date as others are available. 34-1470 42- 329 MR. GOLDEN: Second the motion. MR. LAPHAN: Mr. Chairman, I'd like to ask, while Mr. Henderson is here-velve got this broad subject of wage policy--whether it's proper to ask Mr. Henderson if he cares to express himself further. As I understand it, we have proceeded, on the old Mediation Board and up to date, more or less by trying to settle things as they come along, and by compromise, and we, every now and then, have made a definite recom- mendation. But I judge that much more is coming up to us. I don't know whether it's proper to ask him whether he wants to throw out any ideas to laymen like myself. MR. DAVIS: I don't know what to say, Roger. You see, we've all got engagements. How much more time have you got? MR. HENDERSON: I don't need much more time. There are only a few more charts I want to show you. These charts relate income payments and retail sales. They show that retail sales are very closely related to the movements of income payments. The increase of income payments this year can be confidently expected to result in an increase of sales at retail, the magnitude of which can be forecast with a high degree of accuracy. In the case of the durable goods, sales have dropped well below their normal relationship to income payments. The reason for this is obvious: the goods just weren't there. The next chart I wish to show you presents the movement of department store sales and retail store sales since August 1939. Those series are seasonally adjusted. Let me call your attention to the bulge in department store sales in July and August. That represented a wave of hoarding in anticipation of shorteges and price increases. 34-1470 330 During January, there was another upsurge, department store sales running 36 per cent over what they were in 1941. This buying wave is not confined to durables, but includes textiles and canned goods and anything else that people can stock up. The pressure on prices is mounting day by - day and they are moving steadily upward. The situation is extremely serious. Now, suppose you ask me -questions. MR. TAYLOR: What about March 15 income tax payments coming in? Is it going to affect such a thing as this retail demand? MR. HENDERSON: Well, it will affect that some, but it will probably affect the increase in the savings bond program as well. We will probably dip into savings to meet those March 15 payments. As I have indicated, we are on a downward trend in the availability of goods. Apart from the goods that war is taking from civilian use, lack of shipping will cut the goods available to consumers. Every man we send abroad has to have 9/10 of a ton of goods moved to him by ship per month. Now, if it's Australia and New Guinea, and it's a 4-month turnaround, that means you've got to have 4 tons of shipping for every man you put out there. Suppose you put-this is just for illustration- half million men in Australia or in that area as an expeditionary force. In addition to all that is necessary to get them there on the convoy, after they are there it takes 2 million tons of shipping to keep them supplied. MR. LAPHAM: Based on a 4-month turnaround? MR. HENDERSON: Yes, based on a 4-month turnaround, and that is ex- clusive of the convoys that have to go. Well, that is 2 million tons of shipping in addition to what is already a strained load, and what is a worse load with the U boat campaign. 34-1470 -44 331 Well, that just means that every time we look around, they want to take something away from me, as civilian supply director, that we get by way of imports. MR. LAPHAM: Who has been controlling the prices of shipping? Does that come under your end of it? MR. HENDERSON: No. MR. LAPHAN: I want to say here what I said to Admiral Land a few days ago. I have had some experience in it. I know what price control has been on charters. Excuse me for diverting to something particularly, but nevertheless you brought it up. There has been a hell of a lot of inconsistency in this price control. Well, I advocated to Admiral Land what I though right along, that shipping be requistioned--requisition everything; put it all in the Army on the same rate, that is, based on valuation, speed, whatever it may be. But that thing has just been hit or miss, and I can tell you of a case where it happened to be in our own company. We have had a ship tied up for 30 days in Seattle that the Army needed because the Maritime Commission wouldn't requisition it. We wanted to get clear and know where we were. That has been my position all the way through - for some clearcut way of a hundred per cent requisitioning on the same basis. MR. HENDERSON: I think that is getting cleared up now. MR. LAPHAM: I think it is too, but it's taking a long time. MR. HENDERSON: I am interested in it. MR. DAVIS: Take our immediate problems. I want to give you a little picture of it. Perhaps you already have seen it. But the old Mediati on Board, you see, was primarily a mediation board. Even the few decisions it made were almost all the result of collective bargaining. Now, take the 34-1470 -45- 332 General Motors case as an instance. There was a demand there of 10 cents across the board. Well, in the bargeining operations. the offer got up to 74. you see, just by collective bergaining. Then the question of the union shop came in there, and it really was a horse trade on that. It wasn't a decision of the mediators. They were simply presiding, and these fellows made that bargain. General Motors would rather pay 10 cents without the union shop than 7t with it. And that is pretty characteristic of the Mediation Board's efforts. You see, they were medicting individual cases, as has always been remarked, without any policy, not having any power, really, to make a national policy on wages. Now, with this Board, you see, everything is changed. The whole picture is changed anyway, and we are going, probably. to have to make decisions which are less of a bargaining decision and more of an absolute decision. I think that is what Roger had in mind. MR. LAPHAM: Yes. MR. DAVIS: Well, take the steel which is coming up here; probably General Motors will come up--if you saw Walter Reuther's plan in the papers this morning. And no doubt the decision that we made in steel will be a precedent, damn near a policy, if you ask me. I have in mind, as you have, what happened with the old War Labor Board. They started out with certain declarations of wage policy in February. By July, they had thrown them all overboard, and they came out with the statement which said that, "We have had to interpret these policies in the light of certain principles," which they recited, which knocked the policy for a loop, you see. There was nothing left of it. They started out on the idea of prevailing wages in the community, the decent living wage, the recognized propriety of the desire on the part of the workingmen and their representatives to improve 34-1470 -46- 333 their standards of living, and so forth. Along by July, they were talking about maintaining the real wage which, of course, they were not able to do. They decided that neither management nor labor should make excessive profits out of the war. They referred to the condition as an interin in which all parties had to lay down their normal ambitions on the subject, and so forth. Now, how much enlightenment we can get in our consideration of these problems that lie ahead of us on wages is our immediate concern, how far it fits into your work--that is, how far cooperation is possible--and then we have always in our labor questions, as you see in Walter Reuther's statement this morning, the question of the profit of the company. That always comes prominently into the discussion, and so forth. Now, your talk this morning has been very enlightening, even to me, and that is a pretty difficult job on these matters. I am thinking very, very vaguely about how we could work together, or if we could work together-- if it is possible to set up any liaison. We don't want to wish on you all our problems, or anything of that kind. MR. HENDERSON: No, but I think they go together, and as I indicated earlier, we would have got some kind of a wage control basis, I am quite sure, in the atmosphere that prevailed in September and October and November, if we hadn't taken the position we did and postponed the passage of our bill. They would have given us wage control, in fact, there were plans on foot to do it. And we said at the time, "We aren't interested." I was asked, "What will you do?" I said, "I would like to have the right of intercession and appearance in any wage determining board, to bring to them what are the implications in terms of what the price problem is." MR. DAVIS: Well, I judged from what you said in the first part of 34-1470 -47- 334 your remarks that you are really thinking of the War Labor Board as the vago-policy-determining agency, when you said that you have told the President you thought he ought to tell Congress that there would be some kind of wage-determining agency. MR. HENDERSON: Well, I had in mind that it would either be the determining or the administrative agency: that it would be guided by labor policy; either one that it developed itself or in conjunction with other labor agencies, or one it was directed to follow by the President of the Congress. I don't see how you can decide these things on the matter of the relative bargaining strengths any more. I think that there are higher considerations. The Price Control Act contains general standards which are intended for the guidance of all agencies concerned with wage problems. MR. DAVIS: Well, in England what they did, as you know, with wages was they had a big fight over there, and finally left it to collective bargaining, but I imagine with some considerable control nevertheless. Bob may know more about that. MR. WATT: Considerable democratic control-considerably more than we have here. MR. HENDERSON: That's correct, and as far as the prices of the things which enter into the cost of living are concerned, they entered into bonus arrangements, and things like that, similar to what Canada has done. But my main point sums up to this: The volume of goods that can be made in the next year can't be varied much, and it will fall far short of what the total amount of wages and salaries and other income payments will be. MR. DAVIS: Let me try to translate that into our problem, I under34-1470 -48- 335 stood that very clearly, that there are mechanisms for absorbing 25 billion dollars in taxes and savings, MR. HENDERSON: No there aren't. I was pointing out that while there are the mechanisms, they aren't being used drastically enough. The addi- tional taxes won't run, in my opinion, much more than 7 to 9 billion in fiscal 1943. This year they'11 run far short of that. And as for savings, even if we continue at the rate of a billion dollars a month, that may be only 50-50 between additional savings, and savings diverted from other saving channels. Much of the new saving is coming from workmen--largely through actual payroll deductions. In spite of all this, there is still 9 to 10 billions of excess buying power. New taxes, going further than what have been considered, and compulsory savings are necessary to bring that excess buying power down to manageable proportions. MR. DAVIS: I didn't mean it would absorb it all. I mean it would reduce it, leaving a gap. MR. HENDERSON: Yes, but that gap is still unmanageable as things now stand. MR. DAVIS: It is unmanageable and is going to result in some increases in prices, whatever you can do. Now, then, on that assumption, and looking at it from any consumer's point of view, whether he is a workingman or a recipient of a salary, or interest, or what, he is going to be squeezed by the higher prices and the lack of available material. Then, in the wage issue, that really presents the question of maintaining or trying to maintain the real level of wages. MR. HENDERSON: That can't be done. It's physically impossible to do it. 34-1470 336 MR. WATT: How would a compulsory savings system work, similar in character to the Keynes plan, operating not altogether like the English system, but operating on the basis of a certain standard of wages. MR. HENDERSON: It would work very well, and I think, frankly, that that is implicit in the situation, if we are to avoid runaway inflation. I am hoping for it, and I think it would be the part of labor statesmanship to advocate it. I think labor would be immeasurably better off to have the money with which to buy goods when they are again available rather than to dissipate their gains now in higher prices. I wholeheartedly agree with you. They stand to win. DR. GRAHAM: Not now, but later. MR. HENDERSON: They stand to win on both counts: now and later. MR. WATT: It is true that it does accomplish two things as I viewed it, at one and the same time. It gives a degree of stability and flattens out that curve that you were talking about, that gap, over which you have no control, plus the fact that it is actually an investment in the protection of our scheme of things. MR. HENDERSON: I'll tell you another thing it would do. Itwould help tremendously on the rationing, holding down the need for it. MR. TAYLOR: Yes. MR. MORSE: Yes. MR. WATT: That's right. MR. HENDERSON: And between us, rationing procedures and techniques, and 80 forth, scare us more than the price control techniques. 34-1470 -50- MR. WATT: You agree thoroughly, then, that if any compulsory savings is put into effect, some of the nations have made the mistake of putting them down too far below-MR. HENDERSON: That's right. MR. WATT: --and distorting the ability to save, you see. MR. HENDERSON: It is that group, the very low group, that needs this Board's attention. That is speaking very frankly, and I am not trying to prejudice the Board in any decision; since you have none be- fore you, maybe I can say this: When you talk about the cost of living as a basis for a wage rise, that is peculiarly appropriate to a level of income that is now not up to a decent standard, and that is going to be fearfully prejudiced by these increases which we can't help--such as wholesale prices that just haven't been passed on through the retailer to the consumers, yet. Compulsory savings or even income taxes reaching down into that level, it seems to me, would be very misguided. MR. WATT: I agree with you. MR. HENDERSON: Now, on the matter of the higher wage levels, there simply must be recognition that you cannot maintain the real wage: that what you should be interested in is maintaining a decent level of living, which is more appropriate. But I think, too, that when labor sets aside its rightful peacetime aspirations, it has a right to demand that the community go to the ultimate in taxation of profits. It has every right to demand that those in charge of supplies, of goods-and of the control of prices and the cost of living-make every effort also to help them balance out. 34-1470 337 -51- 338 That is, I think it is a joint program. MR. DAVIS: Well, you follows came to the next question I have to ask. That was in my mind, and that is this substandard stuff. It always comes up in our consideration, and you have touched on that and agree about it, I guess. Then we are presented with the difficulty, Leon, of knowing what is substandard and where the line is between a decent standard of living and an indecent. Of course, we have some views and facts. MR. HENDERSON: I think you can get to that. George may know a little more about that than I do. He has been closer to it. The doubtful range is not as big as you might assume. I'd say that you can get to it within limits. You can at least-and I speak with feeling on this-determine that groups that have had better than average raises in both their rates and their earnings, and are at the highest levels, are not the first to be considered when there is adjustment of the pie to be made. I say that because my father was the unorganized worker. and my uncles were members of the glass bottle blowers' association, which was the aristocracy; and I noticed that every time the aristocracy negotiated a nice increase, somehow or other the terms and wages of the others suffered a little bit or failed to increase. MR. WATT: The wage spread was widened a little. MR. HENDERSON: Yes, the spread W&B widened. MR. DAVIS: That is the point I have heard made, that in such a time the fellows who do improve their standard of living, if anybody 34-1470 -52- 339 did, are putting a terrific burden on the substandard people who don't and the price goes up and they are unable to meet it because their income- MR. HENDERSON: In ordinary times, it doesn't work that way. In ordinary times--and this may sound highly unorthodox-an increase in the general wage level, particularly if it's reasonably well absorbed from an industry's margin, excites and increases the supply of goods that is available, and it stimulates the consumer goods industries tremendously and lets them experiment with markets for the lower groups, which really tends to raise the level all around. Today it's quite a different matter. DR. GRAHAM: You can't experiment much because the goods are not available. MR. HENDERSON That's right, and I am worried; every time I look around at the War Production Board, they're taking something else away from the civilian community, and I think the President picked me on that job because I get ornery and nasty and holler about it, and demand justification, and everything else. Of course, when it gets down to cases, and Army and Navy are going to get it, and they should have it. MR. DAVIS: Well, Leon, we are tremendously obliged to you. And we have passed this resolution: That Leon Henderson be requested to supply the War Labor Board with various charts exhibited by him in this discussion before the Board today. and to keep the Board up to date on such information. We also made a note, Leon, of what you said on the discussions in Congress. And now, you want to be consulted and cooperated with by this 34-1470 -53- 340 Board? MR. HENDERSON: Yes. Now, do you have a secretary or some person who could be in contact with Dr. Gilbert, the head of my research staff, so that we could get these things? MR. DAVIS: Yes, George Kirstein, MR. HENDERSON: I might say that I a great deal of pride in my research staff. I think I have reason to be. I think they have guessed right oftener than others. How they will come out in the war period, I don't know. But when you individually want something, I wish that we could have that arrangement, that you could call Dr. Gilbert, and within the limits of his time, we'll give it to you. MR. DAVIS: That in fine. We have a set-up here, Leon, that George Taylor is the head of--that is under him. It is a bureau of statistical information, not research, you see. MR. HENDERSON: You'd probably want to see Gilbert. MR. TAYLOR: I'd like to see Gilbert. MR. HENDERSON: I'11 tell him about it. MR. TAYLOR: I'll be in touch with him, and we can chat this statistics problem over. MR. DAVIS: Thanks so much. MR. WATT: Are we all through for today? MR. DAVIS: 2:30. (Meeting recessed at 1:00 p.m.) 34-1470 28 BASIC COMMODITIES PRICES AT WHOLESALE WEEKLY AS OF FRIDAY INDEX (AUGUST 1939-100) INDEX 180 (AUGUST 1939-100 180 170 170 160 160 150 150 140 140 130 130 120 120 110 110 100 100 M o 5 F D o N $ A A 1939 1940 1941 1942 SOURCE: Bureau of Labor Statistics OFFICE or PRICE ADMINISTRATION DIVISION OF RESEARCH are 342 WHOLESALE PRICES 1926 = 100 INDE* INDEX 120 120 FARM PRODUCTS 100 100 ALL COMMODITIES 80 80 60 60 40 40 120 120 FOODS 100 100 ALL COMMODITIES 80 80 60 60 40 40 120 120 TEXTILES 100 100 ALL COMMODITIES 80 80 60 60 40 40 922 923 1924 1925 1924 1927 1920 1929 930 1931 1932 1933 1934 1935 1934 1937 1934 939 1940 194 1942 1943 UNITED STATES DEPARTMENT or LABOR BUREAU OF LABOR STATISTICS 343 WHOLESALE PRICES 1926 100 INDEX INDEX 140 140 METALS 120 120 AZ 100 100 80 80 ALL COMMODITIES 60 60 40 40 140 140 BUILDING MATERIALS 120 120 100 100 80 80 ALL COMMODITIES 60 60 40 40 140 140 CHEMICALS 120 120 100 100 so 80 ALL COMMODITIES 60 60 40 40 1922 923 984 less - NET - 1929 1930 ⑉ 1932 - 1834 1930 1934 937 1934 999 1940 - 942 943 UNITED STATES DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS 344 WHOLESALE PRICES 1926 = 100 INDEX INDEX 140 140 HOUSEFURNISHINGS 120 120 100 100 80 80 ALL COMMODITIES 60 60 40 40 140 140 FUEL 120 120 100 100 ALL COMMODITIES 80 80 60 60 40 40 140 140 HIDES 120 120 100 100 80 80 ALL COMMODITIES 60 60 40 40 on 1923 1924 1925 1928 927 424 929 1930 1931 1932 IREA 1934 1638 1934 1837 1938 1039 1940 1941 1942 1943 UNITED STATES DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS RETAIL AND WHOLESALE FOOD PRICES 1935-39=100 INDEX INDEX 200 200 180 180 WHOLESALE 160 160 RETAIL 140 140 Mum 120 120 N 100 100 80 us - ENTERED 80 ENTERED ENDED STANTED STARTED WORLD WAR NO. WORLD WAR NO : . 50 1913 1914 1915 1916 1917 1910 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 60 UNITED STATES DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS CH. I TRENDS IN FOOD PRICES AT DIFFERENT MARKET LEVELS JUNE, 1939 TO DECEMBER, 1941 INDEX (JUNE (939-100) INDEX (JUNE (939-100) 160 160 Prices Received By Farmers 150 150 Adjusted for Foods Only 140 140 130 130 120 120 Wholesale Prices 110 110 Retail Prices 51 Large Cities 100 100 90 90 M o 0 s N o $ 1940 0 . D 0 s A 1939 1941 SOURCES WHOLESALE PRICES and RETAIL PRICES converted from date of Bureay of Labor Statistics PRICES RECEIVED BY FARMERS derived from data of Agricultural Marketing Service OFFICE or PRICE ADMINISTRATION INVISION of RESEARCH #0 563 TRENDS IN MEAT PRICES AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX INDEX (JUNE 1939-100 (JUNE (939-100) 160 160 Prices Received by Farmers (Meat Animals) 150 150 140 140 130 130 120 120 110 Retail Prices 110 51 Large Cities 100 100 Wholesale Prices 90 90 1939 1940 1941 SOURCES Price received by Formers converted from date of Agriculture Marketing Service Wholesale and Reteil Prices converted from date of Burees of Labor Statistics OFFICE OF PRICE ADMINISTRATION RESEARCH 348 PORK MARGIN BETWEEN FARM VALUE AND RETAIL PRICE CENTS CENTS 30 30 25 25 Retail Price Per Pound (Principal Pork Products) 20 20 15 15 Form Value (Live Hog Equivalent- IN 10 10 5 5 0 0 0 1939 1940 1941 MARGIN . CENTS CENTS (Form-Refer) 20 20 15 15 10 10 5 5 0 0 J 1939 1940 1941 SOURCES RETAIL PRICE: Basic Date from Bureau of Labor Statistics FARM VALUES Bureau of Agricultural Economics OFFICE OF PRICE ADMINISTRATION DIVISION RESEARCH 349 LAMB PRODUCTS MARGIN BETWEEN FARM VALUE AND RETAIL PRICES JUNE 1939 - DEC.1941 CENTS CENTS PER POUND PER POUND 35 35 Retail Price Per Pound (Principal Lamb Products) 30 30 25 25 Form Value Margin (Live Lamb Equivalent) 20 20 15 15 10 LO 5 5 0 0 1939 CENTS PER POUND 1940 1941 CENTS MARGIN PER POUND BETWEEN FARM VALUE AND RETAIL PRICE 15 15 10 10 5 5 0 0 A J J 1939 1940 SOURCE Farm Voice Bureau OF Agriculture Economics Retail Price Basic Date: Bureau of Labor Statistics 1941 OFFICE OF PRICE ADMINISTRATION DIVISION OF RESEARCH 40.598 350 CHART II RAW AND REFINED SUGAR MARGIN BETWEEN WHOLESALE AND RETAIL PRICES JUNE 1939 TO DECEMBER 1941 CENTS PRICES CENTS PER POUND PER POUND 7 7 RETAIL PRICE 6 6 (Refined Sugar 51 Large Cities) 5 5 WHOLESALE PRICE (Rew Sugar A1 New York) MARGIN 4 4 3 3 2 2 0 1939 1941 1940 MARGIN CENTS CENTS (REFINER, INLAND FREIGHT, DISTRIBUTOR AND RETAILER) PER POUND PER POUND 3 3 2 2 0 0 1939 1940 SOURCE Basic date from Bureau of Labor Statistics 1941 OFFICE or PRICE DYSCR OF RESEARCH NO. 644 TRENDS IN PRICES OF CHEESE AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 CENTS CENTS PRICES PER POUND PER POUND 35 35 Retail Price of Cheese 30 30 (51 Large Cities) 25 25 Wholesale Price of Cheese (Whole Mile. Chicago) 20 20 15 15 10 10 5 5 0 0 D J 1939 1940 1941 OFFICE OF PRICE ADMINISTRATION SOURCE Basic Date from Bureau of Labor Statistics DIVISION or RESEARCH NO 580 351 TRENDS IN PRICES OF DAIRY PRODUCTS AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX INDEX (JUNE 1939-100) (JUNE 1939-100) 170 170 160 160 Prices Received By Farmers 150 150 Wholesale Prices 140 140 130 130 Retail Prices 5 Large Cities 120 120 110 110 100 100 90 90 D 1939 1940 SOURCES WHOLESALE AND RETAIL PRICES. basic date from Bureev of Labor Statistics PRICES RECEIVED BY FARMERS, basic date from Agricultural Marketing Service 1941 OFFICE OF ADMINISTRATION DIVISION RESEARCH NO 501 353 CHART IV MILK MARGIN BETWEEN DEALERS' BUYING & RETAIL PRICES JUNE 1939 TO DECEMBER 1941 PRICES CENTS CENTS (PER QUART) (PER QUARTY Retail Price 15 15 (Delivered a Store, 51 Cities] to 10 10 MARGIN Dealers' Buying Price* 13.5% Butterfet 107-125 Cities) 5 5 0 S J 1939 1940 1941 CENTS MARGIN CENTS (PER QUART) (DEALER AND RETAILER) (PER QUART) 10 10 5 5 o 1939 1940 SOURCE RETAIL PRICE. basic date from Bureau of Labor Statistics DEALERS BUYING PRICE. basic date from Agriculturel Mar. keting Services NOTE a Converted from dealers' buying price per 100 pounds 1941 OFFICE or PRICE ADMINISTRATION DIVISION OF RESEARCH NO see CH TREND IN MILK PRICES AT DIFFERENT MARKET LEVELS INDEX JUNE 1939 TO DECEMBER 1941 INDEX (JUNE 1939-100) LUNE 1939-1001 130 130 120 120 Dealers Buying Prices Retail Prices 135% Butterfat 107-125 Cities) 151 Larga Cities) 110 110 100 100 90 90 1939 1940 SOURCE RETAIL PRICES, basic date. from Bureau of Labor Statistics DEALERS BUYING PRICES basic date from Agriculturel Marketing Services 1941 OFFICE or PRICE ADMINISTRATION DIVISION or RESEARCH NO BAP 355 CHART III BREAD MARGIN BETWEEN COST OF INGREDIENTS AND RETAIL PRICE JUNE 1939 TO DECEMBER 1941 PRICES CENTS CENTS PER POUND PER POUND 10 10 Retail Price (White Bread) 8 8 6 6 MARGIN 4 4 Cost of Ingredients 2 2 0 0 J 1939 1940 1941 MARGIN CENTS CENTS (BAKERY AND RETAILER) PER POUND PER POUND 8 8 6 6 4 4 2 2 0 0 , 1939 1940 1941 SOURCE RETAIL PRICE. basic data from Bureau of Labor Statistics COST OF INGREDIENTS. basic date from Agriculture Marketing Service OFFICE or PRICE ADMINISTRATION DIVISION RESEARCH NO 545 TRENDS IN PRICES OF FATS AND OILS AT DIFFERENT MARKET LEVELS JUNE, 1939 TO DECEMBER, 1941 INDEX INDEX (JUNE 1939.100) (JUNE 1939.100) 220 220 200 200 Wholesale Prices (Lord Only) 180 180 160 160 Retail Prices 140 140 (All Food Fets and Oils) Wholesale Prices (Food Fats Other Than Butter and Lord) 120 120 100 100 80 80 60 60 o 1939 1940 1941 SOURCES: Wholesale Prices and Wholesale Price of Lord Basic Date Bureau of Agricultural Economics Retail Prices Besic Date Bureau of Labor Statistics ADMINISTRATION 357 NAVY BEANS MARGIN BETWEEN FARM VALUE AND RETAIL PRICE JUNE 1939 TO DECEMBER 1941 CENTS CENTS PRICES PER POUND PER POUND 10 10 9 9 Retail Price 8 8 7 7 6 6 5 5 Form Value 4 4 3 3 2 2 I I 0 0 A 1939 1941 1940 , J CENTS MARGIN PER POUND (FARM RETAIL) CENTS PER POUND 4 4 3 3 2 2 I I o 0 s 1939 1940 1941 A , J OFFICE OF PRICE ADMINISTRATION SOURCE RETAIL PRICE, Basic Date, Bureeu of Labor Statistics FARM VALUE, Bureeu of Agriculture Economics DIVISION of RESEARCH NO 579 358 ORANGES MARGIN BETWEEN FARM VALUE AND RETAIL PRICE JUNE 1939 TO DECEMBER 1941 CENTS CENTS PRICES PER DOZEN PER DOZEN 40 40 Retail Price 30 30 20 20 MARGIN Farm Value (In of box) 10 10 0 0 1939 1940 CENTS PER DOZEN 1941 MARGIN CENTS (FARM-RETAIL) PER DOZEN 30 30 20 20 10 10 O 0 J D 0 1939 1940 SOURCE RETAIL PRICE Basic Date, Bureau of Labor Statistics FARM VALUE, Bureau of Agricultural Economics 1941 OFFICE or PRICE ADMINISTRATION DIVISION of RESEARCH 573 TRENDS IN PRICES OF CLOTHING AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX INDEX (JUNE 1939-100 130 (JUNE 1939.1001 130 10 120 120 Wholesale Prices 110 110 Retail Prices 100 100 90 90 N o D S A J 0 o S 1939 SOURCE, Basic date Burees of Labor Statistics 1940 1941 OFFICE OF PRICE ADMINISTRATION DIVISION OF RESEARCH NO are CONFINENTIAL TRENDS IN PRICES OF MEN'S WOOL SUITS AT DIFFERENT MARKET LEVELS JUNE, 1939 TO DECEMBER, 1941 INDEX INDEX I JUNE 1939-100) ( JUNE 1939-100) 125 125 120 120 115 115 110 110 Wholesale Prices (Worsteds . 105 105 Retail Prices (Wersteds) 100 100 95 95 90 90 D J 1939 1940 1941 V Composite indes of 100 quotations escless and worsteds 2/ lades of lerge cities based on four qualities all hard Weished worsteds SOURCE Besic date from Bureau of Labor Statistics OFFICE PRICE ADMINISTRA TRENDS IN PRICES OF MEN'S TOP COATS AT DIFFERENT MARKET LEVELS SEPT.1939 TO DEC.1941 INDEX INDEX (SEPT 1939 100) (SEPT 1939 1001 120 120 115 115 101 Retail Prices 110 110 (b) Wholesale Prices 105 105 100 100 95 95 90 90 o SOURCE Basic date from Bureau of Labor Statistics (0) Not priced in summer. Based on two qualities evereged for large cities, approximately above quality (b) Based on one quality from one manufacturer 1940 0 1939 1941 OFFICE OF PRICE ADMINISTRATION DIVISION OF RESEARCH NO 504 COMPARABLE PRICES OF WORK SHIRTS AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX (JUNE 1939-100) INDEX (JUNE 1939-100) 150 150 140 140 130 130 120 120 Wholesale Prices 110 iro Retail Prices 100 100 - 90 90 J 1939 1940 1941 SOURCE Basic date of Labor Statistics OFFICE OF PRICE ADMINISTRATION DIVISION RESEARCH NO 576 COMPARABLE PRICES OF OVERALLS AT DIFFERENT MARKET LEVELS JUNE 1939 TO DEC. 1941 INDEX INDEX JUNE 1939.100 JUNE 1930 - 100 145 145 140 140 135 135 130 130 125 125 120 120 Wholesale Price 115 115 110 110 105 105 Retail Price 100 100 95 95 0 1939 SOURCE: Basic date from Bureeu of Labor Statistics 1940 1941 OFFICE or PRICE ADMINISTRATION DIVISION of RESCARCH 40 509 363 COMPARABLE PRICES OF WOMEN'S SILK HOSE AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX INDEX (JUNE (939-100) (JUNE 1939 1001 120 120 115 115 110 110 Retail Prices Wholesale Prices 105 105 100 100 95 95 90 90 1939 SOURCE Wholesale prices Basic date from Buredu of Labor Statistics Retail prices Bureau of Labor Statistics 1940 1941 TRENDS IN PRICES OF SHOES AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX INDEX (JUNE 1939-100) (JUNE 1939 100) 120 120 Wholesale Price (All Shoes) 110 110 Retail Price (Men's Work Shoes) 100 100 90 90 o o s A . J 1939 1940 1941 SOURCE Basic Date from Bureev of Labor Statistics OFFICE or PRICE ADMINISTRATION DIVISION OF RESEARCH NO 977 TRENDS IN PRICES OF SHEETS AT DIFFERENT MARKET LEVELS JUNE 1939 TO 1940 INDEX INDEX (JUNE 1939-100) (JUNE 1939.100) 160 160 150 150 140 140 Wholesale Price 130 130 120 120 Retail Price 110 110 100 100 90 90 D 1939 SOURCE Basic date from Bureau of Labor Statistics 1940 1941 OFFICE OF PRICE ADMINISTRATION DIVISION or RESEARCH NO 583 CONFIDENTIAL TRENDS IN PRICES OF BLANKETS, WOOL AND PART WOOL AT DIFFERENT MARKET LEVELS SEPTEMBER 1939 TO DECEMBER 1941 INDEX (SEPT 1939-100) INDEX (SEPT 1939-100) 130 130 125 125 120 120 115 115 Wholesale Prices 110 110 Retail Prices(a) 105 105 100 100 95 95 90 90 o 1940 0 $ 1939 1941 SOURCE Burees OF Labor Statistics (e) Priced is Fell And Wister Only OFFICE or PRICE ADMINISTRATION ..... DIVISION OF RESEARCH COMPARABLE PRICES OF AXMINSTER RUGS AT DIFFERENT MARKET LEVELS INDEX INDEX (JUNE 1939-1001 (JUNE 1939-100) 130 130 Retail 120 120 Wholesale 110 110 100 100 90 90 $ o A J 1939 1940 1941 SOURCE Base date from Buredu of Labor Statistics OFFICE of PRICE ADMINISTRATION DIVISION TRENDS IN PRICES OF HOUSE FURNISHINGS AT DIFFERENT MARKET LEVELS JUNE 1939 TO DECEMBER 1941 INDEX (JUNE 1939 100) INDEX (JUNE 1939-100 120 120 110 110 Wholesale 100 100 Retail 90 90 s A o 1939 1940 1941 OFFICE or PRICE ADMINISTRATION SOURCE Basic Date Bureev of Labor Statistics COVISION or RESEARCH NO STR 369 TRENDS IN PRICES OF FURNITURE AT DIFFERENT MARKET LEVELS JUNE, 1939 TO DECEMBER, 1941 INDEX INDEX (JUNE, 1939 -100) (JUNE, 1939-1001 135 135 130 130 125 125 120 120 115 115 Retail 110 110 Wholesale 105 105 100 100 M SOURCE Wholesale Prices Basic Date Bureau of Labor Statistics Retein Prices. Besic Date: FAIRCHILDS PUBLICATIONS (based on sales in department stores) D 1940 1939 1941 orner oror PRICE REMARCH - see 371 INCOME PAYMENTS AND NONDURABLE RETAIL STORE SALES 44 day 42 40 38 36 34 32 037 30 28 26 24 22 20 18 40 50 60 70 80 90 100 110 INCOME PAYMENTS (Billions, Annual Rate) SOURCE Department of Commerce series NOTE. Monthly points are for 1941. December is preliminary estimate OFFICE OF PRICE ADMINISTRATION DIVISION of RESEARCH NO.608 372 INCOME PAYMENTS AND DURABLE RETAIL STORE SALES 20 18 only 16 - glus SALES 14 0011 12 10 CARRIER 8 6 0'33 4 40 50 70 60 80 90 100 110 INCOME PAYMENTS (Billions, Annual Rate) SOURCE Department of Commerce Series NOTE Monthly points are for 1941. December is preliminary estimate OFFICE OF PRICE ADMINISTRATION DIVISION OF RESEARCH NO 601 373 INCOME PAYMENTS AND TOTAL RETAIL STORE SALES 70 65 60 O July May 0 55 POO 0June New 0 Dee 0 Sapt 00ct 50 oze 40 45 ado'st " 40 35 " 30 25 330 20 40 50 60 70 80 90 100 110 INCOME PAYMENTS (Billions, Annual Rate) SOURCE: Department of Commerce Series NOTE: Monthly points are for 1941. December is preliminary estimate OFFICE OF PRICE ADMINISTRATION DIVISION of RESEARCH NO COS 374 INCOME PAYMENTS AND TOTAL CONSUMPTION 100 90 Amp 80 MM Sept. April .OH 70 IL 30 'se 60 " 32 50 '34 33g 40 40 50 60 70 80 90 100 110 INCOME PAYMENTS (Billions) Annual Role SOURCES: Income Payments, Department of Commerce Series Total Consumption, O.R.A. Saries NOTE: Monthly points are for 1941. December is preliminary estimate OFFICE OF PRICE ADMINISTRATION DIVISION OF RESEARCH NO. 608 DEPARTMENT STORE SALES AND RETAIL STORE SALES (SEASONALLY ADJUSTED) AUG. 1939-JAN.1942 - INDEX INDEX (AUG 1939-1001 (AUG. 1939-100) 160 160 150 150 Dept. Stores 140 140 130 130 120 120 All Retail Stores 110 110 100 100 90 90 1939 1940 1941 1942 SOURCE: Department Store Seles U.S Department of Commerce, Bureey of Foreign and Domestic Commerce All Retail Store Sales Board of Governors, Federal Reserve System NOTE Jan 1942 estimated OFFICE OF PRICE ADMINISTRATION DIVISION RESEARCH ... INCREASES IN I..COME PAYMENTS AND COST OF LIVING FOR SELECTED PERIODS AUGUST 1939 TO MARCH 1941 MARCH 1941 TO DECEMBER 1941 PER CENT PER CENT 20 20 11 15 15 10 10 5 5 O o INCOME PAYMENTS TOTAL FOOD CLOTHING COST OF LIVING SOURCES Income Payments, Bureeu of Foreign and Domestic Commerce Cost of Living, Bureeu of Labor Statistics INCOME PAYMENTS TOTAL FOOD GLOTHING COST OF LIVING OFFICE or PRICE I I RESEARCH 80.000 AVERAGE HOURLY EARNIN S AND WAGES AND SALARIE,IN MANUFACTURING INDUSTRIES, COMPARED WITH TOTAL WAGES AND SALARIES AUGUST 1939 TO DECEMBER 1941 INDEX INDEX (AUG 1939-100) (AUG 1939-100 190 190 180 180 170 170 160 160 150 150 (a) 140 Total Wages and Salaries 140 Average 130 130 Hourly Earnings (Manufacturing Industries) Wages and Salaries 120 (Manufacturing Industries) 110 110 100 100 1939 . 120 1940 includes wages and salaries in commodity producing distributive and service industries, government and work relief. 2 Preliminary figure SOURCES: Total Wages and Salaries Bureau of Foreign and Domestic Commerce Average Hourly Earnings and Wages and Salaries is Manufacturing Industries, Bureau of Labor Statistics 1941 OFFICE or PRICE ADMINISTRATION DIVISION or RESEARCH NO 599 INDEXES OF AVERAGE CASH AND REAL WEEKLY EARNINGS IN MANUFACTURING INDUSTRIES JANUARY 1939 - DECEMBER 1941 INDEX (AUGUST 1939-100 INDEX (AUGUST 1939-I00 140 140 130 130 Cash Weekly Earnings 120 120 110 a Real Weekly Earnings 110 100 100 90 90 J 1939 1940 cost of index 1941 a Derived from endex of cash weekly earnings deflated by living December 1941 preliminary by OFFICE OF PRICE ADMINISTRATION SOURCE: U.S. Burson of Labor States DIVISION RESEARCH NO - INDEXES OF AVERAGE CASH AND REAL HOURLY EARNINGS IN MANUFACTURING INDUSTRIES JANUARY 1939- - DECEMBER 1941 INDEX INDEX (AUG 1939-100) (AUG 1939-100) 140 140 130 130 120 120 Cash Hourly Earnings 110 110 Real Hourly Earnings 100 100 90 90 1939 1940 1941 Derived from indes of cash hourly earnings deficied by cost of living indes. a December 1941 preliminary a SOURCE U.S Burees of Labor Statistics OFFICE or PRICE ADMINISTRATION DIVISION OF RESEARCH no. 000 OFFICE OF METROPOLITAN AREA CIVILIAN DEFENSE DISTRICT BUILDING WASHINGTON D.C. D JOHN RUSSELL YOUNG U.S. Coordinator COL LEMUEL BOLLES U.S.A., March 3, 1942 Executive Director. Hon. Henry J. Morganthau, Jr. Secretary of the Treasury Washington, D. C. Dear Mr. Secretary: Colonel Bolles has told me of the great efforts that you and your associate, Mr. Swope, went to in an attempt to secure priorities on the Gamewell Horns needed by the District of Columbia for the establishment of an adequate air raid warning system. I am deeply concerned that your efforts were not successful, but I wish to express to you my sincere appreciation. Sincerely yours, gavran John Russell Young U. S. Coordinator JRY/ht DEFENSE BUY 380 381 MAR 3 1942 Dear Mr. Swope: I have just been handed your letter of arch 2, in which you indicate why it is necessary for you to give up the work you are doing in the Treasury. I fully understand why you find it necessary at this time to make yourself always available in connection with the lawsuit which the Department of Justice has brought against the General lectric Company of which you were formerly president. I know that your decision to accept your country's call in these difficult times by coming into the Treasury after having retired from 8 long and active business career was another example of your patriotism and devotion to the public welfare. I take this opportunity to express my very sincere appreciation for the help, advice and counsel which you have so ably and generously given to me and my associates during the time you have been connected with the Treasury. It is with a good deal of regret that I accept your resignation, as you requested, to be effective on March 7. 1942. I hope that when your private affairs no longer require your full time you will again let me know. Sincerely, (Signed) Henry Morgenthau, Jr. Gerard Swope, Esq., 570 Lexington Avenue, ew York, New York. erF:vls - 3/2/42 Photo file m.mc. Hander to me Swope 3/4/42 Ong fire to thompson 382 TREASURY DEPARTMENT INTER-OFFICE COMMUNICATION DATE TO FROM March 3, 1942 Secretary Morgenthau E. H. Foley, Jr. I am attaching Mr. Swope's letter of resignation, which appears to be in order, and a suggested reply for your signature. 9.71.76 Attachments GERARD SWOPE 570 LEXINGTON AVENUE NEW YORK March 2nd, 1942. HONORABLE HENRY BURGANTHAU, JR., Secretary of the Treasury, Washington, D. C. Dear Mr. Secretary:- I nave just been informed that a civil suit instituted HOLIC months ago by the United States Dep rtment of Justice against the General Electric Company is to go to trial this month, and that the counsel esti ates that the trial will last several months. AS the suit involves matters on which the Supreme Court of the United States rendered an unanimous decision in favor of the General Electric Company in 1926 when I was it's president, I ELIII advised that it will DE neccestry for me to appear S.S a witness and that I aust De available at the call of counsel and the Court. Consequently I must give up the work for the Government us Assistant to the Secretary of the Treasury, and I hope it will not inconvenience you to make this effective March 7th, 1942. I do SO with confidence that the divisions of the Treasury that you asked me to supervise will to along smoothly, 30 they are headed by responsible and competent people. I apprecia te the opportunity you gave me of working with them and with you. with Lest wishes, I am Sincerely, GERARD SWOPE 570 LEXINGTON AVENUE NEW YORK murch 2nd, 1942. ONORABLE HENRY MORGANTHAU, JR., Secretary of the Treasury, Washington, D. C. I Dear Mr. Secretary:- I have just been informed that a civil suit instituted some months ago by the United States Department of Justice finst the General Electric Company is to go to trial this month, and that the counsel esti ates that the trial will last several months. AS the suit involves matters on which the Supreme Court of the United States rendered an unanimous decision in favor of the General Electric Company in 1926 when I was it's president, I am advised that it will be necessary for me to appear as & witness and that I aust De available at the call of counsel and the Court. Consequently I aust give up the work for the Government as Assistant to the Secretary of the Treasury, and I hope it will not inconvenience you to make this effective March 7th, 1942. I do SO with confidence that the divisions of the Treasury that you asked me to supervise will GO along smoothly, SE they are headed by responsible and competent people. I apprecia te the opportunity you gave me of working with them and with you. with best wishes, I am Sincerely, 384 March 3, 1942 Vincent Callahan Secretary Morgenthau Please send to Mrs. Morgenthau at the house the script on The Statue of Liberty which I believe was written by Latouche. Thank you. Sent to house by callshan 3/9/42 - 385 TREASURY DEPARTMENT WASHINGTON March 3, 1942. MEMORANDUM FOR THE SECRETARY: I agree thoroughly with your comment about using Miss Gene Tierney, motion picture star, in the publicity connected with the inauguration of our billboard campaign, and I have passed it on to Mr. Mahan. As you know, promotion "stunts" like this are occurring all over the country, and we are having the collaboration of many motion picture people. Generally speaking, I believe that their employment on our project is very helpful. GRAVES. 386 March 2, 1942 Dear Harold: Is it necessary for us to get a Hollywood actress "swathed in mink over a blue and white print dress" to launch our new billboard campaign? Personally, I think it is awfully cheap. Secondly, I would much rather have a girl from the Amalgamated Clothiers' Union swathed in a pair of overalls. H. M., Jr. The state Sun FIRST OF BIG DEFENSE BOND POSTERS IS HERE WE CAN WE WILL WE MUST! Franklin D. Roosevelt BUY DEFENSE And Tierney motion aids in the posting in Times United GENE and TIERNEY HERE Movie Sond Star Drive stamps There 388 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE March 3. 1942 TO Secretary Morgenthau FROM Mr. Haag Off 1. Attached to this memorandum are tables showing (1) the number of agents qualified to issue Defense Savings Bonds Series E, at the close of business on February 28, classified by type of agent, by Federal Reserve Districts, and (2) the number of such agents on selected dates since May 7, 1941. 2. Agents other than post offices qualified to issue Series E savings bonds numbered 20,165 on February 2S, an increase of 171 since February 21. 3. On February 28, there were 686 corporations qualified to issue Series E savings bonds on payroll allotment plans in accordance with the instructions contained in your telegram of December 27 to the Federal Reserve Banks. This represented an increase of 72 corporations over last week. Attachments Number of agents qualified to issue Series E Savings Bonde May 7, 1941 to date Type of agent Sept. May 30 7 Commercial and savings banks Feb. Jan. 31 7 14 : 1942 Feb. 1941 Feb. Feb. 21 28 7,676 11,571 14,097 14,155 14,191 14,222 14,240 739 1,481 2,434 2,476 2,515 2,541 2,560 08 389 2,080 2,229 2,321 2,424 2,479 Other corporations 1 - - 351 457 552 614 686 Investment industry - - 37 48 54 61 63 7 27 99 118 123 132 137 8,430 13,468 19,098 19,483 19,756 19,994 20,165 15,812 16,429 17,123 17,604 17,604 17,925 17,928 24,242 29,897 36,221 37,087 37,360 37,919 38,093 Building and loan associations Credit unions All others Total other than post offices Post offices Grand total Office of the Secretary of the Treasury, Division of Research and Statistics. 1 In accordance with telegram of December 27, 1941. March 3, 1942 Classificntion of the number of agents cualified to issue Series E Savings Bonds, on February 28, 1942 :Building and Credit loan Banks :associa unions tions : Other :corpora- tions 1 Investment industry All others Total 2 Corporations and associations: Federal Reserve District of : Boston New York 835 242 220 37 1,168 253 404 55 14 848 110 114 159 - - 1,173 380 339 44 7 1 1,024 190 136 30 8 Atlanta 1,025 154 183 23 - - Chicago 1,385 2,338 477 250 198 17 21 1,371 156 67 41 8 2 3,301 1,645 1,281 57 71 4 Philadelphia Cleveland Richmond St. Louis Minneapolis Kansas City Dallas San Francisco Subtotal Post offices Grand total 1 1,770 172 16 2 857 122 223 58 3 300 21 2,560 2,479 686 - - - 2,479 686 14,240 - 14,240 235 2,560 2 1 1,349 1,946 1,231 1,944 1,389 3 1,416 35 2,179 5 3 3 1,268 1,112 63 137 20,165 - - 17,928 63 137 38,093 Office of the Secretary of the Treasury, Division of Research and Statistics. 1 52 - 184 550 14 March 3,1942 In accordance with telegram of December 27, 1941. Except post offices. 330 391 BARKLEY United States Senate CONFERENCE OF THE MAJORITY March 3, 1942. My dear Mr. Secretary: Let me thank you for your letter of February 20 concerning my remarks in the Senate on the Donald Duck film and the payroll-savings plan for the purchase of Defense Bonds. With all good wishes, I am, Sincerely yours, allieu Barully Honorable Henry Morgenthau, Jr., The Secretary of the Treasury, Washington, D. C. ? 42 "FRITZ BAUER, FARMER" Property of WALT DISNEY PRODUCTIONS HOLLYWOOD CALIFORNIA 393 "FRITZ BAUER, THE FARMER" -0- Wallace R. Deuel March 3, 1942 March 2, 1942 FRITZ BAUER, Farmer -0A Droll Tale -0by Wallie Deuel Who Knows Absolutely Nothing About Farms SCENE 1 - THE FARM - Evening of a Spring day, 1932. Opening shot, general view of the farm from the air. It is a 300-acre farm near Allenstein, in East Prussia, devoted partly to truck gardening, partly to rye and sugar beets and partly to the raising of livestock: four cows, half a dozen pigs, geese, ducks and chickens. The farm ha 8 two horses. No machinery is in use. View of farm and buildings to suit this picture. The only animation in this opening scene is for Pa (Fists) Bauer, plowing in the distance. Wilhelm, 7 years old, is riding on the back of the plow horse, as an American farm boy night. During this opening shot, Voice as follows: 394 395 Page 2 - NARRATOR A good many poets have had a lot to say about the joya and beauties of life on the land land can be a thing of joy and beauty but while there may be beauty, there isn't much joy in the life of Fritz Bauer on the land -- not, at least, this Spring day, toward sunset, of the year 1932. Everything seems to have gone wrong with Fritz and his farm in East Prussia, up in the -- and they are right, too: life on the Northeast corner of Germany, not far from the town of Allenstein. Fritz is typical of tens of thousands of other German farm- ers, too -- hundreds of thousands of them -- and what has happened to him is typical of what has happened to them, too, and what happened to him and what he did about it is vitally important to us, too -- not only farmers in America but everybody else as well. So let us see what is happening to Fritz Bauer and his family and what he thinks about it this Spring day of 1932, and then find out what happened to him later and what that means to us today. As the scene opens, one gets the impression that all is reasonably well with the farm, but this is due partly to the fact that it is toward the end of day and the light is not very bright, also owing to the fact that the opening view is a long shot that does not show details. The opening music is a pastorale without either jcyful or sad overtones. The camera, however, trucks down to nearer views which -- with the closeups as indicated -- show signs of hard times and poverty; at the same time, a melancholy note creeps into the music. The camera now trucks down from the distant panoramic shot of the farm to Fritz plowing, with Wilhelm riding the horse, then to the plow itself turning over the furrows, and the horse's hooves and perhaps Fritz's feet following the plow. You see that the horse is a bit of a nag, looking thin; also, its harness and other gear are 396 Page 3 - on the shabby side and much-repaired. The music gives a few notes of something like The Old Gray Mare, to indicate that all is not well. To sustain interest during the shot of the plow, maybe signs of flora and fauna being disturbed by the plow. Mice, for instance, being disturbed and annoyed about it ants, warms, bug a to suit - and perhaps birds following the horse -- in a nice way, of course. Grows could caw and wheel overhead if necessary. PRITZ (he is speaking partly to himself, partly to his 7-year-old son, Wilhelm, and partly to the horse. He is a man of 38 in 1932, ha looks weatherbeaten, much as an American farmer might, but older, grimmer, more bulky, and bowed down by fate. He speaks, now bitterly, now resignedly, but never with joy) Ach, ja, my Willi You see what comes of allowing this city sota to run our country Donnerwetter, noohmals! It is a Sahweinerei WILHELM (Closeup of him tickling the horse's ears with a straw; he is a 7-year-old boy, neither saint nor devil, not very intelligent looking or appeal- ing, but not a swine, either; neutral) What is a Schweinerei, Vati? (he is asking to be polite more than out of real interest) Page 4 397 FRITZ Tschal Even during the war, these big land-owners had everything their way. Oh, they did their share of the fighting, all right -- although all of them were officers, of course, and they lost the war for us, didn't they! WILHELM (still politely rather than with any real interest; he is now making passes at a butterfly that is hover- ing over the horse's ears) Yes, Vati. FRITZ And in the meantime they made so much money with their big estates that they bought up a lot of the little farms all around The little farmers -- they fought - and as common soldiers and non-commis- sioned of ficers, tool And they lost every- thing at home while they were away. No money at the bank 1 No hands to help in the fields! Everything sequestrated by the state Ach, ja, it was a fine warl WILHELM (as before; now he has caught the butterfly and is holding it by the wings, looking at it very closely) Yes, Vati. FRITZ And now everything is worse than ever These city soum I All they are interested in is running us into debt some more so their good-for-nothing loafing people who are out of jobs will be able to eat cheap! Mortgages 1 High prices for what we must buy, and low prices for what we HEIST sell1 Page 5 398 FRITZ (continued) Taxes The middle-men who take everything and give nothing Aad always their holy bureaucracy and interference and moddling (be is increasingly more and more) bitter as he grunbles And now they won't even lot us get in the Poles to help us any mcrell Good Germans must farm the land, they tell us!! And what are these good Germans they send US? More soum from the cities, who don't know a plow from a pickle I tell you, it is all no good -- no good!!! If I could still go to America, I tell you I would go tomorrow WILHELM (all he has caught of this diatribe is the word "America"; this delights him; closoup showing his eagor face; he is still clutching the butterfly; he turns about, almost falling off the horse, in order to get his father's full attention) Amerika, Vati I oh, that would be fine, so fine Let's go to Amerika, Vatill We could get a farm near the one Onkel Otto has, and we would all be richil Everybody in Amerika is rich, Vativ Let's go to Amerikall But right away, Vatizz FRITZ (bitterly) Ach, wo 1 Amerika I First, we cannot leave. We have no money. And then (hopelessly) we would not be happy in America, of theri of that I on sure. They are a people with- out culture, my son. I know. I fought against them in the ware Good soldiers -that they are I But would you believe it? We took some prisoners ones -- later wa got taken prisoner by them - and I asked one of them, I said to him, "Listen, you 1" (Fritz barks like a Prussian drill sergeant, which he was) "Why do you some over here and interfere in our affairs? Why did you not stay at Page 399 FRITZ (continued) home, where you belong?" And do you know what this barbarian said to no? WILHEIM (on seeing that there is no chance of going to America, he has registered disappointment; now he has really lost interest, and has let the butterfly gol it flies off drunkenly, its wings dam-> aged) Wilhelm watches it "stumble" to the ground; he asks, with bare politeness, all the more scenty because he has heard this story countless times before) What did he may, Vatif PRITZ (in soorn) He said he had come to keeck our beloved Kaiser in the pantal (pause) (then sadly) Yes - and he did, Bool Fritz is now at the end of the furrow. Long shot of same, with oun setting and chadows of Frits, horse and WilheIm leng- thening on the ground. Fritz puts his hands over the small of his back, which is tired, and stretches He turns the plow around and starts down another furrow, toward the farm house in the distance: a faint light (from a kerosene lamp) shines from one window in a wall which is in shadow. Gamera back to a closeup of the plow, motionless in t he earth for an instant, than starting again as Frits is heard sayings Page 7- 400 Ach, jal to wast do the best we can here at home. And new - will plow this - more farrow sonight and than we will have supper, which Name will be making ready for us now. CLOSKUP of Mama doing precisely this; in a leap-lit kitch on with an old-fashioned wood-burning stove, into which she checks a couple of sticks of wood; a big stew pan over one bure nor; a coffee pot over another; a mutt hound dog that sniffs esstatically at the smells from the stew pan; Mana is the same age as Frits but looks older; she is a "typical Hausfram" country style; dampy, homely, honest-looking, blend; a sort of counterpart of the old shoemaker in Pitocchio. She goes to the back door, which is open, and calls out) MAMA Elisabeth Supper's almost ready Haven't you finished with the oows year Shot of Elisabeth, aged 14, milking a cow in the barn; she is just a nonentity, an average, miscellaneous 14-year-old farm girl; it is fairly dark in the barn by now, which saves trouble in characterising her (now do you see why the scene takes place at sunset?); brief shot of her at the oow; then eloseup of her hands at the teats, with milk squirting into the pail; than of a kitten sitting beside the pail, its mouth watering. ELIZABETH (nicely) Ja, Ja, Mutti 1 I am almost ready. (then, to kitten) 401 Page 8 - - ELIZABETH (continued) No, Patsi, this is not for you. And don't try tripping me up 80 I spill some milk for you, like you did yesterday (the kitten looks guilty. Elisabeth calls out again to her Mother) Mutti Muttil MANA (from the distance, calling) Ja? ELIZABETH (calling to her) Are Radi and Karl home yetr MAMA (as before) They are just turning in off the road now! Shot of Rudolf, aged 12, and Karl, aged 11, leading another horse down the lane from the road, toward the house. They are bringing the other mare back from the blacksmith's, whither they have taken her to have her sheed. They, also, are fairly general types, barely indicated in the conveniently gathering dusk. They are hungry, and are pulling at the reins of the horse to make her go faster; at the same time, they are talking intently. 402 Page 9 - RUDI You are erasy to want to go to seal You even know if you will get seasick don't or not KARL You are the crasy one 1 or sourse I won't get seasick Why should IT He leans down and picks us a alod of earth and shies it at one of half a doz en pigs greedily snuffling up their supper of swill from a trough. The pig grunts and lifts its head. The other pigs immediately Growd into the space where the first one's head and shoulders had been. The pig looks annoyed but then becomes resigned when it sees who it was that threw the clod of earth. Then it tries to get back into the trough, but cannot do so. Its rage is really roused then, and it oinks in fury at Karl. Karl laughs. Camera back to Rudi and Karl. HUDI Why should anybody? But a lot of people do. Nope, not for me. No for the city. Make more money. Work eight hours instead of 18. Be your own boss evenings. Go where you like. Have fun. 00 to the pictures as often as I want tol Camera trucks back up into the air again, showing same scene as at opening, but now it is almost dark and we see, just indicated, Fritz with the plow horse still bearing Wilhelm, Elizabeth with two full milk pails and Karl and Rudi with the second mare, all converging on the house. Light pours out of the windows into the dark, and from the open kitchen door, abou 403 where Mama is standing. Padeout and into the family meated around a plain table which has been set in the kitchen. A kerosene lamp stands on the table, providing a light that is adequate without obliging the artists to go too much into detail. The table has no cloth on it. Just big plates in front of each place, with an enormous portion of stew and several boiled potatoes on each plate; also thick slabs of rye bread beside the plates. No butter. Thick mugs of steaming coffee. The cat and hound are sitting side by side, noses wiggling and mouths watering, beside Elizabeth. Everybody is wolfing down the food. Sound of same, and clinking of heavy implements on plates. FRITZ (PA) (he speaks indistinctly because his mouth is full; he brandishes a fork full of stews closeup of the dog and cat looking hopeful that some may fall; as Fritz talks, he waves the fork around, the dog and cat following it with their eyes; when Fritz finishes speaking, he a the whole fork-full into his mouth intact, whereupon the dog and eat register chagrin) It is just as I tell you, Mamal Us small farmers, we suffer, and the big land-owners, they get rich They and their special relief funds from the government! Break up the big estates, like they said they would do ? They don't dream of doing it, those city soum in Berlin Ach, it is a Schwindell MAMA (she is not arguing, but trying to soothe Pa) But Fritz -- the Herr Pastor, be says it is the will of God -- that and the British and French and the reparations --- 404 Page 11 - FRITZ (bitterly) Will of God -- Quatsch: Nonsense It is the big landowners, I tell you! of course the Herr Pastor (sneeringly) says it is the will of God Who gives the Herr Pastor his church and his job and his living? The Herr Baron in the castle up on the hill, and and of if you Title Prussia, I The von zu estates Herr that's (bitterly please, Baron your from who, worship, your and the und mockingly) Excellency grateful you if you Bieberstein, know please kings it 11 Controls thousa nds of acres of land, and a church or two and a school or two, and is Lord Lieutenant of the County, if it please your Graciousness: With a nice, rich wife with a dowry of factories and mines in the Rhineland, Your Exalted Nobody Achi They make me sick, these great nobles!!! During this diatribe, the scene FADES OUT and into: SCENE 2 - THE SAME EVENING - The same time - in the dining room at the modest castle of the Biebersteins. They are seated at table, eating, too, each insofar as possible in a position corresponding to that of the member of the Bauer family most like him or her. The Baron- ess sits at the same relative position as Frau Bauer, the Baron at the position corresponding to that of Fritz Bauer; where Elizabeth sat, we now see Martha, the 21-year-old daughter of the Baron and Baroness. Heinrich, the oldest son, corresponds to Rudi; Paul, the second son, to Karl; and Emile, the third son, to Wilhelm. The personalities and setting are, however, very different in other respects, of course. The general atmos- Page 12 - 405 phere is like that in an old-fashioned Union League club: dark panelled walls; oil paintings of fierce-looking ancestors in uniforms of historic wars; a white plaster bust of Frederick the Great on a side-board; the long dining table beautifully set with linen, silver, porcelain; lighted by tall candles in a handsome candelabra; aristocratic serving dishes; Mosel wine in silver ice buckets; a bottle of claret lying on its side in a cradle; liveried servants indicated by arms reaching in with and for plates and filling glasses. The personalities indicated as much as possible in keeping with the following data: The Baron von und zu Bieberstein, as Fritz has already indicated, is the local magnate. His "castle" is half-way between a handsome country house and a real small castle. It has two or three acres of park around it, but in general is practical and honestly rustic rather than suburban. The Baron has a telephone, for example, and electric light on the first floor, but running water only in the kitchen and in the barns. He is 51 years old, lean, with a semi-military haircut, a narrow, aristocratic face with duelling scars gashed across it -- a cruel face. A reserve officer, like virtually all East-Elbian eldest sons, he fought all through the last war. His wife, the Frau Baronin, is 45. She is the former Emmie Schornstein, daughter of an industrial magnate in the Rhineland, who brought a good dowry to the Bieberstein fortunes when the go od Baron married her. She is a by no means alto- gether repellent type: of medium height and build, she has the touch of grace and humor about her that is fairly common among Rhinelanders. She carries herself well, with an air. Page 13 - 406 She has a gentlewoman's voice and manner. Heinrich is their eldest son. In this scene he is 24. He will inherit the estate and, like his father and forefather before him, he is a reserve officer. He looks much like his father. Paul, the second son, is 23. True to family type, he is an active army officer. He is in uniform tonight. He is home on a brief leave. Emile, the third son, is 19. About him there is a touch of the cynical adventurer which is not apparent in the other members of the family, who are true Prussian aristocratic types of a sort standard since Frederick William I. Emile is a nazi, an intelligent and therefore a cynical one. This fact has rather shocked the rest of the family, but they are loyal to him since he is of their blood. Emile is "studying" at Heidelberg: that is, he is a member of the same exclusive student duelling corps as all of the men of his family, and spends most of his time drinking and roistering and engaging in political demon- strations, and virtually no time at all in studying. Martha, the only Biberstein daughter, is 19. She is rather an attractive type, in the general spirit of a tweedy English "county" daughter, although physically and mentally sturdier and even coarser: a sort of tougher version of Joan Fontaine in "Suspicion." She has recently announced her engagement to a young career diplomat in the German Foreign office, a youth of the same class as herself and her family; the marriage is to take place in a few weeks' time. We have a shot of Martha, with a glass of white wine in her hand, poised to drink, then of just the glass itself, in Page 14 - 407 her hand; she is twirling it gently as she speaks; when she finishes speaking, she drinks a sip of the wine, leaving the glass half empty; olosoup of her hand putting it back on the table -- and showing the good-looking silver on the fine linen at her place; the liveried sleeve of a servant, and his hand holding the Mosel bottle, are seen pouring Martha's glass full again. MARTHA I ran into two of the Bauer boys on the road as I was driving up. They're get- ting to be great big lummoxes, aren't they? I must say their manners don't improve any wi th age. (she is reporting ob jectively and not unpleasantly; she is not much put out about it) THE BARON (bitterly and savagely) Do you know anything, my dear, that improves with age in this benighted Republic? (his contempt for the Republic fairly blares in his voice; he is brought into the camera by the following sly and ounning device, entirely original on the part of The Author: the camera dissolves on the servant's hand pouring into Martha's glass and comes back in on ditto pouring into the Baron's glass, which the Baron then raises to his lips and drinks from.) THE BARCNESS (she rallies him on his pessimism, but gently, because she is fond of him and respects him -- and rather agrees with him, at heart. Shot of her knife and fork at work on a bit of fish, then of fork being raised to her lips) (continued Page 15 - 408 THE BARONESS (continued) oh, come now, Friedrich Do cheer up. Surely it's not as bad as all that. THE BARON (he is fond of his wife, and respects her, too, and he is not really entirely pessimistic, but he is in a bad mood, and wants to talk himself out) It is worse than all that. And the Bauer boys' manners are more important than you may be willing to admit. It is the result of allowing 01 ty soum to rule Germany Agrarian bolshevism, that's what it is The Herr Feldmarsohal is quite right I Socialism, if you please! Socialism in- deed! It is bolahevism, pure and simple The Bauer boys, and their father and that flibberty-gibbet of a daughter of theirs, and all the other peasants -- they are almost as bad as the soum in the cities Manners ?? Their manners are a sign of the times. No respect for their betters, no respect for anything or anybody If matters go on like this, there soon won't be any property for you to inherit, Heinrich (The Baron has grown increasingly bitter during this speech -- although, being a gent, he has not raised his voice unduly. He drinks off two glasses of wine in the course of his remarks) THE BARONESS (gently to her husband) Eat up your fish, darling. All the rest of us are waiting on you now. (now to Hainrich) And are your friends in the officers' corps worried, too, Paul chen? 409 PAUL (he has finished his fish and is smoking a cigarette. Closeup of him taking a deep drag on it, then tapping ashes off into a small silver tray at his place and exhaling) Yes, Mand (he accents word) the second syllable of the ... they are worried, too. And I must say -- although for the love of God don't say I said this -- I must say that the Minis- ter himself seems to be up to some very funny business HEINRICH (shocked and even somewhat alarmed) The Minister himself I? (he is smoking, too) PAUL (he shrugs his shoulders) All I know is, he is trying to make some kind of a deal with some of the trades union people -- and they say he has even been flirting with some of the nazis -- your fine friends, Emile. (he speaks in a fond, friendly tone to Emile, but with a note of raillery in his voice, too) EMILE (he is toying with the silver at his place; he shrugs his shoulders and grins, not altogether without charm) My dear and revered brother, how much more is it going to take to make you realize that the Good Old Days are gone forever and will never return? Oh, yes, I know, it is too bad. It is a great pity. I deplore it as 410 Page 17 - EMILE (continued) much as you do -- all of you. But you see, deploring it won't cure it. The Min- ister may flirt with whome ver he chooses, and we may complain all we like about the Bauer boys' manner -- which are rather bad, to be sure -- and it won't make the slightest bit of difference. Nothing will make the slightest bit of difference, until we make a clean sweep of all these dear people and make a fresh start. (he speaks with affection for them all, almost gaily) THE BARONESS (sweetly and amusedly; she does not take this "crazy" son of hers very ser- iously as a politician) You and your clean sweeps and fresh starts! And who are these clean sweeps to be, my son? (with gentle mockery) Your precious Fuehrer ... (she overstresses the wordbox with gentle mockery) and all his wild men? (she nods to a servant as a signal to clear the table) EMITE (he is not in the least taken aback or, still less, offended) Yes, Mama mon. ... (he, too, accents the second syllable) my precious Fuehrer and all his wild (he imitates her tone of voice, but nicely) Page 18 - 411 THE BARON (decisively) Preposterous The Old Field Marshall will take care of these wild men of yours 1 (he leughs, half amusedly and half cynically) The Old Field Marshall is now a big landowner himself, my dear boy: Why do you think he would admit this crazy Fuehrer of yours to power? He might appoint him a postman. But nothing more, I assure you. Why do you think we all got together and presented a fine estate to Hindenburg? Because we love him? Well, of course, we do love him, in a way. But the estate -- that had a practical purpose. It was to familiarize him with the point of view and the predicament of lic the I big land-owners in this rotten RepubEMILE (respectfully, but of the same opinion but with amused and cynical indifferonce stating things he knows to be true, even if the others won't see the true position) still; not pressing his point of view, Ah yes, Father, I agree perfectly that it is a rotten Republic. But all your fine presents to the Old Gentleman won't do any good. Not in the long run. Look, let us be hone st -here, at least: the big land-owners are all going bankrupt, and have been for at least two generations, haven't they? THE BARON Well, and what if you are right? EMILE (as before) And the only thing that has kept our whole class alive all this time has been a constant stream of money from the State, hasn't it? page 19 - 412 THE BARON (grudgingly) Not altoge ther, you young imp. EMILE Not altogether, no. Only just enough to a fairly pleasant existence and a good regiment for Paul, there, and go od corps for all of us in good universities, and a dowry ... make the difference between bankruptoy and (aythis point he bows with affectionate but mo ok devotion to Martha) for our charming sister. MARTHA (she is not offended, but affectionate and amused with her funny brother) Fie and for shame 1 EMILE (affectionately) Fie and for shame it is, my pet. And why has the State gone on pouring this money into the big estates -- some of which, of course, has gone into trips to the R1- viera and new Rols Royces and fine bathrooms and -- saving your presence, dear Mama... (with mock but effectionate deference) ... even into ohorus girls from Berlin -- why has the State gone on pouring money into the big estates? I will tell you: It is partly because our class is the only class in Germany that is politically adult and knows what it wants and knows how to go about getting it and will stop at practionly nothing to get it -- no, no (as murmurs of protest arise from the others) let us be honest, at least with ourselves. And then, of course, there is anothor reason why we have had all this money from the State -- even from your despised socialist Page 20 - 413 EMILE (continued) Republic -- and that is because my dear and revered brother here, and his fellow officers, see quite clearly that only the big estates can produce a surplus of grains that thewars. army must have if it is to fight its glorious HEINRICH And what if all you say is true -- which I do not admit for an instant -- what then? EMITE What then? I will tell you what then. This blessed Republic is breaking up in pieces in our the 01d Marshall nor von nor -- no, nor -can is doomed. a now Fuehrer andprecious will be ruling because who know how they are men make hands. Herr to the seize Germany Bauer (as the And before) Neither power only Papen boys besides year other and from keep ourselves the his save Minister who wild it, Field my it. will and mon It Germany great again, and then, my dear and revered brother, you will have some more glorious wars to fight. And your blacksheep brother, Emile, will save the family fortunes yet once again. THE BARONESS (amused by this discourse, which she has, of course, heard many times before) Oh, Emile 1 You and your speeches. Come now, eat your dinners, all of you, be fore everything is spoiled. Musical effect for this scene, perhaps one of the Brandenburg concerti, or something else very Prussian, chamber music, aristocratic, with strength and character. For business to sustain interest, the activity of the servants in clearing away dishes, filling glasses, etc; a shot of the bust of Frederick the Great, if identifying it will make it mean anything Page 21 - 414 as a symbol, which it probably wouldn't; no animals would be allowed in the Bieberstein dining room; a pair of love birds in a cage might be used, though, if desirable. A good, corny storm outside -- rumblings of impending revolution, eh, what? -is another possibility, of course; this would have the added advantage of giving us an exouse to have a shot of a servant opening an outside door and letting in a wet and furious cat, which could then lick it self dry; also the servant could draw the shades as symbol of trying to shut out the unpleasant realities. FADE OUT and into: SCENE 3 - ALLENSTEIN - FRITZ IS CONVERTED - The camera opens on a shot of a street in Allenstein, which is the county seat of Fritz! and the Biebersteins county. It is a town of several thousand people, an old town, as towns go in most of East Frussia, quiet, with a substantial air about it. It has the air of the era of Bismarck, rather than that of the Republic. There is at the same time an air of poverty and hard times about it, with meagre displays in shopwindows, fonc- es in a state of disrepair, here and there a house or store boarded up, farm wagons looking in bad states of repair, dejected-looking town-dwellers and farmers in for the day, patched clothing, hungry-looking dogs and cats; and yet there is virtually no filth, such as wind-blown paper, or trash, because every thing is kept neat even in these hard times. It is a faw days after Scenes 1 and 2, toward afternoon. The street where we open is brick-paved. We see Fritz, mad, dejected and Page 22 - 415 altogether in a bad state of mind. He is walking down the cement sidewalk with an aggressive, alert, intelligent but coarse type of gent beside him; the gent is arguing with Fritz, working on him to convert him to national socialism; he is a party organizer, who has picked up Fritz outside the bank, where Fritz has been to try to renew his note, and is now accompanying Fritz to a pub to buy him a drink and work on him some more. The organizer is in "Sears Roebuck" city civilian clothes. He wears a party pin in his lapel. He is a type like the party official who calls on Hans Hasenpfeffer's mother when Hane is sick, as depicted on the board for that story. Behind Fritz and the organizer follows Fritz' mutt hound dog -- a sort of Pluto type. It looks lean and hungry and is somewhat alarmed by the unwonted sounds and sights of the town, starting at the noises of a street car, an automobile horn, etc. Gloomy music. The camera opens on a general, distant view of the street, then trucks down to Fritz and the organizer, then still farther down to the two men's feet, walking, and the mutt trailing along behind. Is it possible to distinguish between the two men's walking feet so clearly that the exchange of dialogue between them can be indicated by showing shots of each one's feet while he is talking? For instance, Fritz might be wearing boots, and the organizer long high-water, peg top pants, with cheap-look= ing, pointed tan shoes. 416 Page 23 - ORGANIZER (reiterating a point) Well, they wouldn't renew your note, would they FRITZ (bitterly) The swine At this point a farm wagon goes past with an enormous porker in it; the wagon is open, so that the pig is visible; he is a type from the Farmyard Symphony. The mutt looks at the pig, the pig at the mut t; the pig aneers; the mut t growls, but helplessly -- there is nothing he can do about it. ORGANIZER But how do you ever expect to get justice from people like them? What do they care for our farmers -- for you -- even for the country? You may call them swine, if you like, but you are flattering them. Swine have some character. They are good for something. I tell you that they are just poodles, these people -- poodles We will sweep them away -- all of them -- and take over the country ourselves. Then you will see a government that knows how to do things! At this point, who should appear but our old friend Martha -- ********* with a poodle (French) on a leash; Martha is in town to do some shopping. Shot of her, approaching from opposite direction; then down to the poodle, who looks supercilious as can be, picking its way around puddles on the side- walk and with its nose in the air. The Mutt, reacting to the organizer as before, bristles and lifts its lip and growls Page 24 - 417 ferociously at the poodle; the poodle thereupon cowers and scrams as far out of the way as the leash allows. There is a subdued blare of heavy march music, which subsides as the humans and dogs are separated by their continuing talks. FRITZ (gloomily) That is all very well, but just what do you think your people are going to do to help people like me? I have heard a lot of promises in my day. (he spits, contemptuous of promises, at a fire plug they pass at this moment. The camera moves to the fire plug. The Mutt gets an idea from Firts' expectoration. He approaches the plug in the classical manner.) At this point, Fritz and the organizer reach the pub, which is called Zum Koenig von Preussen (At the King of Prus- sia), and enter. Long Shot of their doing so. You can probably find pictures of such a pub. It, too, has the air of the era of Bismarok about it, both outside and in - not quaint and roman- tic, but substantial, bourgeois, stolid. Fadeout from Fritz and the organizer entering to the two of them sitting at a round, clothless table in a big bar room -- except that there is no bar in this Second Reich place, of course. Fritz has put some clumsily-wrapped parcels on an extra chair. The Mutt come a in, looking pleased with himself, and flops down on the floor be- side Fritz' chair. There is only an old-fashioned metal ashtray on the wooden table top. If you want more atmosphere of the interior to set the stage better, a deer's head and a lot of little roebuck antlers mounted on the walls, and a portrait Page 25 - 418 of Hindenburg. ORGANIZER (ahouting) Herr Ober! Waiter 1 WAITER (calling out) I'll be right there. He appears, an unhappy type, fat, short-cropped hair, stupid, with a white apron around his middle. As the organizer gives the order, aloseup shot of the water's grubby hand writing the order on a pad. ORGANIZER (In the Voice of Command) Two Mochas and two cognac and let me see a good 20-pfennig cigar and hurry! WAITER (deferring to the air of authority) At once, gentlemen, at once The Mutt meers at this deference; then his eye is drawn to a great, big tomoat asleep on a chair pulled up to a table nearby. He looks interested and a bit bellicose. The cat, without moving, opens its eyes, fixes them steadily on the mutt, and glares at him; he subsides, meekly. 419 Page 26 - ORGANIZER (continuing and high-pressuring Frits) I will tell you what we will do for men like you tatesI First, we will break up the big es(he pounds on the table. Closeup of same, with a sh-tray jumping. Shot of the Mut t, jumping with apprehension. The oat sneers at the mutt and closes its eyes again.) FRITZ (skeptically) I have heard that story before -- so often before. ORGANIZER (as before) That may be. And you will hear it again, my friend. You will hear it until you are sick of hearing it. You will hear it until the Fuehrer comes to power, and then you will see it done. At this point, shot of the table top as the grubby hand of the wretched waiter puts down two thick mugs of steaming coffee, two liquer glasses of cognac, and an opened box of olgars down on it. Coffee spills out of the cups and into the saucers as be does so. The hand of the organizer grabs sever- al of gars out of the box and stuffs them into his out side upper coat pocket. The waiter departs. During the following dialogue, the camera concentrates on the coffee cups, the liqueur glasses, the hands and lips of the speakers as they pick things up and smoke and drink, and on the mutt, who scratches for fleas, exchanges dirty looks with the cat, jumps and yelps when his 420 Page 27 - tail is trod upon by a passing bumpkin, etc. etc. FRITZ (still skeptical) Maybe. May be. ORGANIZER (as before) Not maybe at all, but for sure. I tell you the Fuehrer is not like one of the se old party hacks. This is a revolution we are fighting, not an election -- Oh, I know, we have to talk politely most of the time so as not to scare some of our Better Elements ... (he speaks scornfully) but you and I, we can be honest with each other, at least here. We understand each other. And I tell you that the big estates will be broken up 1 (he pounds on the table again; the Mutt jumps again) And not only that. I tell you also that you will get fertilizer cheap and you will also have electricity in your house I tell you that the prices of your produce will be doubled! I tell you that these verdammten middle men will be driven out of their filthy trade I tell you that you will have tax relief -- and I tell you that you will get your note renewed at the bank when you want it renewed As the Organizer now continues, the scene in the pub fades out and into Fritz' dreams of what he may hope for -he is being convinced and converted by the organizer -- when Hitler comes to power. At first the dream shows Fritz' own farm, but now resplendent, with the house half again as big as before and shiny with good care and well-being. The out-build- 421 Page 28 - ings, too, are now more numerous, bigger, handsomer, more modern. A con crete road has replaced the muddy lane that form- erly led from the highway. There is a two-ear garage. There are fifty sleek cows, 100 fine pigs, etc. The longer the organiser talks, the more elegant does the vision become. In the end, as the organizer talks about the glorious ancestry of the Bau- ers, Fritz appears as a heroic figure in an ancient Teuton's get-up; as the organizer concludes, this get-up fades out and into Fritz gotten up to look exactly like the Baron, with sleek riding breeches, a riding crop in his hand, shiny riding boots, a riding jacket with a stock, clean-shaven, oruel, with a monocle in his eye, and smoking a cigarette with a terrific air. ORGANIZER (still high-pressuring Frits) The farmer is the backbone of the country, I tell you, and our Fuehrer knows it l This shrinkage in farms, this rush to the city, must stop Our Fuehrer knows that, tool And he will not just talk about it; he will do something about it l Why are there always more and more factories and fewer and fever farms? I will tell you why. It is because the country is in the hands of the soum of the oities -- who are ruining everything. No I tell you that we will make the farmer great and prosperous and happy again -- so that his sons will stay on the land, when they grow up, and not run off to the cities or to sea. The land must be sacred. It is not an article of barter and bickering. It is the holy source of the pure blood of our people. And Germany must be proof against the blockade. Never again shall it be possible for the verdammten Englaender to starve us out, as they did last time 422 Page 29 - ORIENTIZER (continued) But it is not just military strength we must have. We must have a pure-bred race again. (at this point the howlingly ob- vious mongrel Mutt nods his head sagely in agreement; the cat sneers at him; be looks goofy) And what is the source of the pure-bred race? The soil The sacred soil of Germany my friend. Do you know what our Leader of Reich Yoemen saya? Wait, I will read it to you. (he fumbles in an outer coat pooket reads the following words of Darre) and pulls out a leaflet, from which he "By being able to take fast root in his inherited soil, the yooman should be enabled to become the instrument of the racial regeneration of the German people." You see, now, how different is our approach to the farm question, my friend? To this 90cialist soum in the cities, you are just a rube and a hick! But to our Fuehrer, do you know what you are I will tell you you are the last of a line of a Great Race -- of the Nordies You are the descendant of the tall, slender, blue-eyed rade that came out of the primeval Teutonic forests and conquered and civilized the globe! In your veins runs the best blood of history It is you who are the true new nobility, as our Reich Leader of peasants says. It is you who must be secure in your land 1 It is you who are the true aristocrat, proud of his noble heritage of blood, proud of his rich lands, ro oted in his saored soil, handing down his blood to his children and their children's children and so on till the and of time, when Germany -- your Germany -- will rule the world. Toward the end of this speech, brassy march music has been coming gradually into the musical background until it is Page 30 - 423 so loud that it dominates. Also sound of marching boots. A nazi parade is coming down the street. Fritz and the Organizer get up from the table and g outside and watch. A column of SA men goes past the pub, tough-looking guys in their middle thirties, their caps strapped under their chins, a band in front, a nazi flag, and the other usual appurtenances. The band and boots make so much noise that no conversation can be beard, but a shot shows Martha, watching with contampt, then shrugging her shoulders and walking away. This is followed by another shot of the organizer shouting something inaudible to us into Fritz' ear as he does so; he is pointing to the column and using it as an example of the power, the discipline and the glories of the movement. Fritz shrugs doubtfully as he watches and listens, but he is obviously impressed. In the end, he nods his head in acceptance. The Organizer slaps him on the back as the parade ends. PADE OUT and into: SCENE 4 - THE NAZIS HAVE TAKEN OVER, AND NOW, AT FIRST, EVERYTHING SEEMS FINE. - The march music blends into another, gayer march, mingled with the sounds of loud and amused, happy laughter. The sound of horses! hooves on pavement also comes in. Another parade is under way. The scene fades into what seems at first to be a peasant woman dressed elaborately in old-fashioned, romantic, folk-lore peasant dress, dancing curiously in a stiff way. As the picture becomes clearer and the camera trucks back it becomes apparent that the "peasant woman" is a tiny porcelain figure representing same, about an inch and a quarter high, 424 Page 31 - fastened in the lapel of a man's coat. The man, a nonentity civilian, is one of thousands of people lining Unter den Linden in Berlin. Down the street passes a series of farm floats representing typical farm scenes, cottages, products, etc. It is the nazi Harvest Thanks Festival, 1933, the first following the seizure of power. First, a general view of the parade from above, then closeups of several floats, while the Voice speaks: NARRATOR And ao the precious Fuehrer and his wild men, as the Baroness called them -- yes, and the Or ganiser who converted Fritz Bauer -- have come to power. It is the Fall of 1933, and Germany is celebrating its first nazi Harvest Thanks Festival. And the Bauers have done pretty well by themselves, so far. It is true that there are still difficulties. But things are much better, on the whole. And this harvest festival has provided the Bauers with one of the big- gest treats of their lives. For they have been brought to Berlin to take part in the parade itself -- and with all expenses paid, too. The camera concentrates on a float drawn by a horse, which reveals Fritz Bauer, Mama, Elizabeth and Wilhelm riding on it. The float is a very simple, almost primitive one. It consists of a representation of a mediaeval Teutonic farm house. The members of the family stand around the sides, dressed in folklore costumes, laughing, happy, throwing confetti and streamers at the crowds lining the sidewalk, and having same thrown at them in turn. Music in the spirit of "Ach, du Lieber Augustin" or "Roll Out the Barrel," from a Hungry Five dressed like rubes in a wagon ahead. Everybody is having a good time, every- Page 32 - 425 body is laughing. Even the mutt dog is up on the Bauer float; he has a cardboard gold crown tied on his head, and is looking proud at first, but soon wearies of this, the crown gets ook eyed, he tries to get it off, getting into all kinds of goofy predicaments in the process, finally succeeds and proceeds to chew up the crown, gradually assuming a disgusted expression as the bad taste of the paper and glue makes itself felt; he ends by sneezing out a mouthful in disgust and scratching his ear vigorously. During this business, the following di alogue between Fritz and Mama, between gales of daughter and impact and throwing of confetti and streamers: FRITZ Sieh's du, MAma (he accents the first syllable of the word) Wie Schoon! Isn't it fine? (he gets some confetti in the eye and laughs uproariously; he throws a handful at the crowds lining the street) You see, everything is going to be all right again now1 It will be like the good old days. It will be as the Reich leader of peasants said at the meeting last night -- but we are not peasants any more: Now we are Hereditary YeomenT How do you like being a noble lady, Mama? MAMA Ach, Fritz! You and your noble lady! With some of these new-fangled words I do not hold I But still -- yes, I am sure things will be much better now. Page 33 - 426 FRITZ And our 11 ttle farm -- now it is a Hereditary Freehold I tell you, Mama, the Fuehrer, he really understands us 1 Vait until I tell that banker Dinkelspiel what I think of him! Now he can do with the notes and the mortgages, what he likes i Never again can he make remarks about evictions and auctions Our Fuehrer will take care of people like him 1 MAMA And the new prices, they are wonderfull More for our hens, more for our eggs, more for our milk and butter Ach, now we shall not need to worry any more 1 And the feed for our GOWS and chickens and pigsi The Fuehrer says we shall have what we need -- and at prices we can afford! (she al ghs, tired but happy) Ach, jal It is very fine, Fritz -- at last, and before we are too old to enjoy it, too l And the man said last night, now we shall have plenty of hands to help us again, like it was also in the good old days ! FRITZ Also, Mama, I will tell you something we are not supposed to know yet, but I heard it at the Koenig von Preussen the night before we left. (he speaks more softly in her ear) All of these verdammten middlemen -- they are going to be taken over MAMA (delighted) Ach, Fritz, how fine, but how fine! Are you sure? 427 Page 34 FRITZ of course I as sure. Wait. You will see. The stock dealers, the millers, the dealers, the processors -- all of them 1 Ach, ja -- a clean sweep and a new start! During this dialogue, the business of Pluto -- who also gets oonfetti on him, in his ears, where it tickles like a flea, in his mouth, causing him to make funny faces trying to get it out, etc. etc.; Fritz and Mama being hit by confetti and streamers and throwing them, too, the Hungry Five tootling in the wagon ahead; streamers and confetti tickling the horse's ears, which he twitches annoyedly and makes funny faces with displeasure; Elizabeth being saucy with a lummox of a farm boy her age on a float following theirs; Wilhelm in seventh heaven, aiming confetti and streamers at pompous-looking matrons and elderly gents among the spectators; shots of funny spectators, if you like; the shouts of the crowd, laughter, music, the clop of the horses' hooves, etc. This scene fades out on a view of the horse drawing the Bauer float, as seen by Pa Bauer -- who is driving, of course'-from the rear, and into: SCENE 5 - THE SPRING OF 1939. ON THE BAUER "HEREDITARY FREEHOLD. The camera, which has faded out on the rear view of the Bauer's horse plodding along Unter den Linden drawing the float in the parade six years before, fades in on the same view of the same horse, also plodding as before, but without any signs of confetti or streamers and without the sound effects -7 which now fade into typical rural noises like crows cawing, etc. As the Page 35 - 428 camera trucks back, you see that the horse is drawing the plow, with Fritz guiding it, as in Scene 1. The whole scene, in fact, duplicates the opening one, except that it is shorter As the Gamera trucks back to a distant shot of the Bauer farm, one sees that Wilhelm is missing; Fritz reaches the end of a furrow, put s his hands to the small of his tired back and stretches, then turns the horse and plow around and starts back, toward the house; it is sunset again, and the shadows lengthen and the light shines from the windows; the Hereditary Freehold looks exactly the same as the farm; nothing has changed except that no young people are around. The camera shows Fritz and the horse and plow moving slowly down the furrow toward the house. Fritz is silent. Same music as in Scene 1 -- some kind of a neutral pastorale except that now there is a sinister undertone in it, with a trace of the same brassy march as that used for the SA parade in an earlier scene. During these shots, the Voice: NARRATOR Almost six years have passed since that happy day in 1933 when the Bauer family went to Berlin with all expenses paid for the Harvest Festival, and everything was going to be all right. It is the Spring of 1939. Much has happened in those six years. Fritz was right: His farm is no long- or called a farm, but a Hereditary Freehold. He himself is no longer called a peasant, but a Hereditary Yeoman. Fritz has come into his own as a descendant of that...great race, the Nordics. He is, in fact (with satire, but not too much) as Darre said he would be, "an instrument of the racial regeneration of the German people." Nor can he be evicted from his farm, because 429 Page 36 - NARRATOR (continued) he is forbidden to use his farm -- or... (again satirically, but not too much so) Hereditary Freehold as security for a loan. Fritz knows all these things, because his Fuehrer has told him so, and laws have been passed saying that they are so. And yet -- And yet -- But let's sit down at the dinner table with Fritz and Mama and listen in on what they themselves have to say about things. Toward the end of these remarks, the scene fades out and into Fritz and Mama mated at the table in the kitchen as be- fore. They are alone. There is no sign of the children. They both look, not only six years older, but also even more/tired than they were before. They speak more slowly and eat more slowly. The mutt and cat are older, too, and even they look more tired and act more slowly and with less elan. The plates are empty; Fritz and Mama have finished eating. The table looks messy and disorderly. Fritz is using a toothpick, noisily. Mama is spelling out, with some difficulty (she can read, but not too easily) a letter, reading it aloud, partly to herself and partly to Fritz. MAMA (reading with some hesitation) Liebe Mutti and Vati: Our regiment is being transferred elsewhere fairly soon, so do not write any more letters to this ad- dress. I will tell you later where to write, If I am allowed to say. (the brassy march comes in stronger, with a suggestion of the distant rumble of guns - Mama adjusts the steel-rimmed spectacles Page 37 430 MAKA (continued) she is wearing on her nose, makes a face as one who is having trouble read- ing. clutchen the letter more tightly, and goes on) "If I am not allowed to let you know, the radio and the newspapers will tell you why. I have not heard from Karl for some time now. Have you? I heard the other day that his regiment was being transferred, too, but we are not supposed to talk about these things. Do not speak of what I have said. And nor a piece of bad news. All summer leaves have been cancelled, and I won't be able to see you until Fall and probably Karl will not be able to come home for a while, either. Do not be too disappointed. It is for the Fuehrer and Fatherland. Love, Rudi." (Mema's disappointment has been keen, and so has Fritz! as they learn that neither of their two older boys will be coming home for some months at least. At the reading of this passage, the march music has been more and more dominated by the sound of guns firing, and now the sound of diving planes is also recognizable. Mema takes her spectacles off, very carefully although clumsily, and puts them away in an old-fashioned care. Closeup of same, with her grubby fingers closing it and then resting on the case. At first her hand just rests on it; then as she speaks, her fingers twitch nervously, then tremble, and then, at the ol Limax of her remarks which follow, the hand is withdrawn and the Gamera shifts to a view of her with her head bowed on her arms on the table top). MAMA Ach, Fritz: (she is terribly disappointed, and appre- hensive as well. Her apprehension grows Page 38 - 431 MAMA ( can tinued ) as she thinks over the possible signi- ficence of the letter) It is hard It is hard Both Rudi and Karl, no far away, and we see them so seldom And even Willi is away so much now with his Hitler Youth business! It is lonely, Fritz, very lonely And now all these movements of troops 1 And leaves cancelled oh, Fritz I am afraid I am afraid of what may happen FRITZ (he feels pretty badly himself, but he tries to comfort her) There, there, Mama. You must not feet and worry. It is hard, yes, I know. Every day it is hard. with the boys away and Elizabeth with a family of her own to care for 1 Ja, and now we don't get any hands any more at all. Those verdammten Poles, they do not come be- cause they are afraid. And these boys and girls from the city -- achi They cannot even pluck a goosel But (he tries to change the subject and get onto something more normal and natural) ... how was it with the new pastor today? Did he come, as he said he would? What sort of a man do you find him? MAMA (she has been upset by the pastor's call, too; Fritz search for a harmless topic has failed) Ach, Ja, he was here! But Fritz, he is a strange sort of pastor for people like us 1 (Mama raises her head) 432 Page 39 FRITZ How so, then, Mama? MAMA Fritz, he is of the new church -- the German Chrbatians. (she hesitates over the termp it is new to her and she is not quite sure of it) At least so I heard on the radio they are called. FRITZ What does that mean, "German Christian?" Me, I do not listen to these things much on the radio. MAMA I do not exactly understand, myself. But the new Herr Pastor, he does not talk -as the old one did -- of the forgiveness of singwand humility and the Resurrection of Our Lord Jesus Christ. He talks --FRITZ (interrupting; he speaks bluntly, as a plain-spoken man with no nonsense about him) Then what does he talk about, if he does not talk about these things? What else should a pastor talk about, then? MAMA (she is puzzled and clearly is more than somewhat alienated by this strange language of the new preacher) Well, he talks instead about the Resurrect- ion of Germany, and about revenge, and glory, and the holiness of the soil. He talks, actually, very much like the Yeoman Leader in Page 40 - 433 MAMA (continued) town talks. Also, he said that God had sent the Fuehrer to us and that the Fuehrer is maybe a greater man than Christ. FRITZ (he dismisses this as arrant nonsense) Quatschi Nonsense Our Fuehrer is a very great man, that we know. Perhaps the great- est of our history. But greater than the Saviour? What nonsense 1 MAMA Ja, ja, Fritz, I know. But that is what the new pastor said this very day, sitting at this very table drinking coffee from this vory oup. (she lifts her own a few in ohe s off the table in illustration) FRITZ (he is annoyed) Ach, it is the doing of that Emile ! Him and his fine tricks! Always these big landowners manage somehow to come out on top. And now it is that Emile who picks our pastor for us. I would rather have that dried-up old fool we had before Better, maybe, no ideas at all than nonsense like this. Fritz has been lighting an old-fashioned, simple pipe during this exchange. As his ire increases, he tamps the tobacco down violently with his thumb, strikes a match savage- ly under the table top, lights up and puffs furiously. The cat and dog get a sniff of the smoke and look queasy, then look with knowing apprehension at each other, then get up and walk away. 434 Page 41 FRITZ (continuing with mounting anger) Coffee indeed of coffee they can get plenty at the castle Lat Emile provide his precious pastor with coffee. Us poor people, we can hardly get coffee any more. It is those verdamaten Amerikaner. They have bought it all up. I read about it on a poster. At any rate, we cannot spare oof fee for the new Herr Pastor Next time he comes, give him some of that ... Herb tea (he speaks with scorn) that we are supposed to drink now instead. Herb teal It is bilge, that is what it 131 MAMA (now that Fritz is aroused, it is her turn to try to change the subject to something harmless; she tries a feeble joke) But if we don't get some money pretty soon, I won't be able to offer the pastor even herb tea. FRITZ (this "joke" was a mistake; he is madder than before) Money1 Money 1 Moneyl Ja, Mama, I know it is not your fault. (now in some bewilderment) I don't know whose fault it is. We get better prices for our things, our feed and fertiliser cost us less -- but still we are as poor as ever before. MAMA (going straight to the heart of things: just like a woman) But Fritz, you know why we are as poor as ever It is the taxes that eat up everything. The taxes, and then we cannot get any more money from the bank at all, now -- not even 435 KAMA (continued) the way we could from Dinkelspiel. FRITZ (he agrees; he snorts bitterly) Tachal Ach, this Hereditary Freehold stuff1 Hereditary Freeholds and hereditary Yeoman and ancient race and holy soil and precious blood (his anger is mounting and mounting) "Never will the bankers be able to foreolose," they said. (he speaks bitterly) Ja, and for a very good reason indeed Because I cannot borrow against my Hereditary Freehold as I could on my Farm And if I cmnot use my Hereditary Freehold as security, then I have no security, and if I have no security, I cannot borro at all oh, it is a fine Sahwindel 1 It is a Schwindel, I tell ou, feed will be cheaper," they said! Ja, it is cheaper, all right It doesn't co at me anything at all, because there is none to be had It is those verdammten Englaender and Amerikaner. So it said in the poster. They prevent us from getting these things we must have. No oil cakes for the cowal And so the Mama -- a Schwindel and a Schweinerei. The poor GOW S give less and less milk, and what they do give has less and less fat And ... (now he comes to a fresh grievance) ... by the time all those bureaucrats get through marking it down in their books and filling out their forms and snooping around in my barn and writing down everything in their books -- the milk has probably all evaporated anyway But that Emile 1 with him, everything is all right. If our Willi were a few years older, But not now. Now it is Emile who has all he would probably have some influence, too l the influence: Page 43 - 436 FADE OUT and intos SCENE 6 - The same hour of the same day in the dining 10 om of the Biebersteins. Here, too, the family has finished eating and is sitting around the table. The scene is the same as before except that Martha's place is empty and Heinrish sits in his father's place. The old Baron ha a died. Martha is now mar- ried to her diplomat, as will appear. Paul is in his old place, in uniform as before. Emile is also in his place; he now wears an SS uniform with the regalia of an of ficer. (See the picture of Heydrich on a recent "Time" cover or still from the pictures "Underground" or "Manhunt."1 The Baroness is also at har place. The scene and atmosphere much as before -- at least the members of the family have not changed in character; they are the same as before only more so; also, the air of prosperity is even greater than before, for the Biebersteins have prospered under the new dispensation. But there is a note of drama in the room and the voices, too, and this note deepens toward a climax as the picture nears its end. THE BARONESS I am so pleased for Marthal After all, her Richard is only 30 -- and now to be made First Secretary of Embassy already, and in such a fine post as Washington, too She was so proud in her letter today (she drinks from a claret glass, almost emptying it; the liveried arm and the hand of a servant appears holding the claret bottle very carefully and half- filling the glass). He is such a fine boy, and so brilliant 437 Page 44 - EMILE (he smiles mL th cynician but also with filial affection for his mother) Mama, you are so sweet -- and so guileless THE BARONESS (there is a note of more respect in her voice for this "wild" son of hers, for now he and his fellow wild men rule Germany, and he is a man of some impor- tance in the SS and the nazi farm organibelieves in the avowed aims of the regime even less than he does) zation; yet she still chaffs him, for she Well, my fine SS Colonel or whatever your latest rank is today -- I can't keep track of you any more -- and what is so guileless about that? EMILE (as before) My darling Mama, do you really suppose it is her Richard's brilliance that has won him his promotion? THE BARONESS That is precisely what I suppose. And pray what else would have won it for him? Oh -- I will admit that with his background and connections -- well, they do not exact- ly harm his advancement. EMILE (sweetly mocking, he sighs) Darling Mama 1 You are so little of this naughty, naughty world. His background and connections indeed They are the very background and connections to ruin his career. But don't you see, even now, Mama, that the old world is dead and gone 1 A fresh start and a clean sweep, Mama, as I believe I may have said before. 438 Page $5 - THE BARONESS (she is beginning to suspect the truth) Oh, Emile I You mean to say ... ? really are an imp1 Do you EMILE (amused at her reaction ) Yes, Mama, I mean to say. Why do you suppose I asked you to invite the Minister's adjutants to a shoot? Why do you suppose I dance attendance on the Undersecretary? Why do you suppose I flirt with the Chief's agoing and silly daughter? THE BARONESS (really shocked a little, but pretend- ing to be worse shocked than she is) Emile 1 You naughty child EMILE Yes, Mama, a .naughty child -- in a naughty world 1 It is a matter of background and connections, as you say. But not Richard's. Mine. Anyway ... (with a deepening of the cynical note) ... Martha might just as well enjoy Washing- ton while she still can. It won't last much longer. HENRICH (he is still the incurable Junker; not very bright, in this strange new world where his s camp brother is so much at home; direct, simple, rather stupid) What are you talking about -- "It won't last much longer?" 439 Page 46. - XXXXXXEX The camera shows Paul in his army uniform, his head slightly bowed, twirling his alaret glass and looking fixedly at it; he pretends to ignore the subject which has now arisen. The music of the badd creeps in. EMILE My dear and revered brother, it is true that America may try to stay out of the war ... THE BARONESS (she speaks quickly and almost breath= lessly; she is now really alarmed; she casts a quick look at Paul; he pretends not to notice it, and goes on watching his wine glass as he twirls it; the two love birds in the cage, which have been twittering and billing and cooing, "freeze The hand of a servant, filling a glass, goes on pouring out wine until the glass slightly overflows) War, Emile? (she tries to banish the idea by sheer will power) There will be no war EMILE (now with sadly mocking affection) A naughty, naughty world, Mama. Yes, I know. "There will be no war." "The Fuehrer will get what he wants again without a war." (he sighs) But there will be a war. A much worse war than last time. It is all or nothing this time, Mama. Ask Paul -- or rather, do not ask Paul. He cannot say, even here, what he really thinks. (with friendly mockery to Paul) Can you, Paul? 439 Page 46 - XXXXXEXX The camera shows Paul in his army uniform, his head slightly bowed, twirling his claret glass and looking fixedly at it; he pretends to ignore the subject which has now arisen. The music of the band creeps in. EMILE My dear and revered brother, it is true that America may try to stay out of the war ... THE BARONESS (she speaks quickly and almost breathlessly; she is now really alarmed; she casts a quick look at Paul; he pretends not to notice it, and goes on watching his wine glass as he twirls it; the two love birds in the cage, which have been twittering and billing and cooing, "freeze The hand of a servant, filling a glass, goes on pouring out wine until the glass slightly overflows) War, Emile? (she tries to banish the idea by sheer will power) There will be no war EMILE (now with sadly mocking affection) A naughty, naughty world, Mama. Yes, I know. "There will be no war." "The Fuehrer will get what he wants again without a war." (he sighs) But there will be a war. A much worse war than last time. It is all or nothing this time, Mama. Ask Paul -- or rather, do not ask Paul. He cannot say, even here, what ha really thinks. (with friendly mockery to Paul) Can you, Paul? 440 Page 47 - Paul looks briefly at Emile, wt th a non-committal expression whi ah breaks into a grim, grudging grin, then quickly glances at his Mother and away, picks up his wine glass, emp- ties it at a draught, shrugs his shoulders and puts the glass down again and regards it fixedly once more, without replying in words. HEINRIGH (still stupid) Ach, wo, Emile You and your precious Fuehrer and his wild men 1 A little campaign in Poland, perhaps, yeal A matter of a few weeks. The swine need to be taught a lesson they will never forget 1 But nobody else will go to war to help the Poles! And America least of all. You are mad. EMILE Yes, I am mad. And so is the world, as I have been trying to make you see for several years now. (he is patient and affectionate, although with a touch of mockery, to- ward his family; he is also a little sad over the prospect; yet he knows what will happen) I assure you that the others will fight. THE BARONESS (she refuses to admit the truth of What Emile says) For Poland, Emile? 441 Page EMILE or course not for Poland, Mama. For themselves. They are not completely mad -- although I most admit they have often acted as if they were, these past several years. But this time they will fight. Oh, yes, I assure you they will. Including America. THE BARONESS But why, Emile? Why? EMILE (he loves his mother, and feels sincerely sorry for her; he speaks sweetly, although still always with the underlying note of cynicism) Why, dear Mama? Because they must fight -that or hand themselves over to us, bound hand and foot, without fighting. It is a matter of life and death. Look: it is really very simple. They have things we want. Power, prestige, riches, navies, naval bases, high standards of living -- everything. We intend to have these things. We prefer to fight rather than keep on going without them. They prefer to fight rather than to give them up. At least I assume they will prefer to fight rather than give them up. It will not be pleasant for them. Because of course we shall have to take them over and run them; otherwise we could never take all the things away from them we intend to have. It is we or they, my darling and revered family. There is not room enough in the world for the French and British Empires -- and the United States -- in anything like their present forms and for the Germany we want to create. One side or the other must go under, once and for all. And of course going under is most unpleasant. Ask the Czechs. HEINRICH I still say you are mad, Emile. The French and British, perhaps, but America? Never. 442 Page 49 - EMILE (mookingly) "America, never1" Oh, no, not ever, ever, ever My dear and revered brother, how long do you suppose the Americans could go on living the free and relatively happy and prosperous lives they now lead if France and Britain were beaten? HEINRIGH Indefinitely. Why not? We can do business with the Americans. EMILE (ironically again) "Indefinitely." # Oh, dear me yes. Dear Heinrich, don't act the landed gentify to me. Let us be honest with each other -- at least here. of course we can do business with the Americans. But you see, the Americans ear.not do business with us. Because we only do business on our own terms, and those are always unconditional surrender. Look I Did you ever hear of a man named Chamber lain? HEINRICH (contemptuously) He is an old fool! EMILE Precisely. He is an old fool. But do you really suppose, my dear and revered brother, that you are the only one who now sees that Chamber- lain with his silly umbrella is an old fool? Why don't you give the Americans, at least, the credit for some sense? They have newspapers over there, you know, and radios, and they have heard all about Chamberlain -- yes and Schuschnigg and Banesah and all the others, too. Oh, no, they will fight. Of that you may be sure. Even if they would rather not, they will fight. 443 Page 50 - THE BARCNESS But why, Emile? Why? EMILE Why, dear Mama? Because so long as there is a free and rich and powerful America in the world, an America which does not approve of our quaint old-world ways of dealing with those we do not like, and as long as this America goes on saying out loud (and they speak very loudly sometimes, these Americans) what they think of us -- just so long will it be impossible for us to hold down all the peoples we must hold down if we are to have the place in the world we want. HEINRICH What difference would it make what the Americans might think and say? EMILE (patiently) It would make this difference, dear and revered brother -- it would give the Czechs and all the others we must conquer and destroy some- thing very precious to them and very tedious to us. It would give them hope, you see. And as long as they hope, they will hate -- us, of course. Naturally. Who wouldn't, in their position? So America must be taken care of, too. It is inevitable. HEINRICH But they can't fight. They only fight with each other. They are so divided among themselves, and so smug and complacent, that they can do nothing. EMILE I devoutly hope that you are right, Heinrich. I devoutly hope so. It is our only chance, as a matter of fact. Page 51 - 444 The Baroness is terribly agitated by the turn the conversation has taken. The music has been coming in stronger and stronger, and the sounds of battle with it. The atmosphere has grown gloomier. The candles in the big candelabra have burned down and are now guttering out, one after another. The love birds huddle close to each other. But the Baroness refuses still to recognize the truth. BARONESS What has gotten into us all tonight. (she tries to be gay and joke away the atmosphere -- and the truth) Oh, Emile, you are an impl No: There will be no wart Paul will go back to his regiment in Allenstein Monday, and he will still be there a year from now and two years from now and three years from now, and Martha will have two or maybe three more babies, peacefully and happily in Washington. I shall grow old gracefully and quietly here at home and Neinrich will find a nice girl and marry her and go on running the estates -- which I must say he does more effectively than your dear father could ever bring himself to do. Come 1 Let's go into the Green Room for our coffee All this time the march music and sounds of battle have been mounting and the Baroness has been raising her voice more and more in an attempt to drown it out, until there is a ghastly forced quality in bot her voice and her mood. She puts down her napkin at her place and pushes back her chair and gets up; the others follow suit. Just as they are almost upright and ready to leave the room, a liveried servant appears in the doorway with a telegram on a silver tray. The family "freeze" and look at the servant. He, impassi vo, bears the 445 Page 52 - telegram with maddening deliberation to Heinrich, bows and holds the salver out to him. SERVANT A gram for the Herr Baron, if I may betele so free. HEINRICH (he picks up the telegram with dread, opens it, and reads it to himself, his lips moving silently. The others remain where they "froze"; Heinrich reads the telegram through twice to himself. Then he looks up and his eyes move from one to the other. He is not frightened, by any means, but startled and shocked by this denouement) It is from the High Command. I am summoned to active duty. I must leave first thing tomorrow morning. THE BARONESS (her heart broken) oh, Heinrich EMILE (cynical to the last; what else can an intelligent nazi be?) Bring us back lots of Poles to work on the estates, Heinrich. And some Frenchmen and Englishmen, too, bf possible. Maybe, in the end, even some Americans. Who knows? And there will be lots of pretty girls, too. He laughs, more and more cynically and loudly. The Baroness is really shocked this time and keeps calling, more and more loudly, "Emile 1 Emile I Emile! Emile ! Stop it, I say Is nothing saored to you?" But Emile goes on laughing and there is a crescendo of his laughter, her cries and the march Page 53 - 446 music and battle sounds. At the very end, just loud enough to be board, Emile's voice speaks: EMILE Sacred, dear Mama? Sacred? No, dear Mama. Nothing at all. Absolutely nothing at all. (he laughs louder than before.) - THE END - "WILLI WUNDERBAR, THE WORKER" 2-19-42 Property of WALT DISNEY PRODUCTIONS HOLLYWOOD CALIFORNIA Feb. 19, 1942 Wallace Deuel 448 WILLI WUNDERBAR THE WORKER A Sad Tale by Wallace E. Deuel Who Also Has Many Another Tale To Tell -0SCENE 1 - A BUILDING PROJECT - somewhere in the Rhineland, in the Year of Presumptive Grace 1928. Willi is a young workman, about 25 years old, a superior type much like a highly-skilled workman in the building trades in this country. He is a structural steel worker. As the scone opens, willi, dressed in his working clothes, is riding a huge girder which an unseen hoist (only the anble is visible) is lifting upward past the steel skeleton of a building in construction. will stands next to the center, where the cable grips the order; he holds on to the sable with one work-glove covered hand and shades his eyes against the sun with the other as he looks upward toward the top of the structure whither he is bound. The girder rises slowly, swinging slightly. Sound effects to indicate general bustling setivity and specific building sounds: donkey engine hoots happily, riveters clatter, subdued background of factory noises, men's voices shouting orders and advice, page 2 - 449 hiss of escaping steam-jet, switch engine puffa and chugs with air of fussy importance, etc. CLOSEUPS of each source of sound, with expressions indicating pride, satisfaction, busyneas, happine 38. As willi goes higher on his girder, the sur rounding countryside gradually comes into view. The steel akeleton of the building on which #illi is working is only six stories high, but it stands on top of a hill, so that a good deal can be seen. The scene is a bustling industrial region: factories with smoke pouring from tall chimneys, long freight trains MOV- ins, trucks entering and leaving big sheds, derricks at work lifting and lowering other girders to other buildings under construction, dredges scooping out an excavation, carpenters ham- mering and sawing, bricklayers, hodearriers, etc. all at their desks -- near enough to be identifiable (by means of CLOSEUPS If necessary) even if only of their tools, which also look busy and happy) but (in the case of the human figures) far enough away to be plausibly animatable without excessive expense and length of time on the screen. Willi is a likeable sort of guy, not exactly giving with Grade A intellect, but by no means a fool. In the first part of this scene, he is half humming and half singing some old German song -- almost any old popular song will do. There is a faint or chestral background. As the girder gets nearer the top of the structure, Willi's gaze tends to level toward the horizontal, since he is keeping his eyes on the place where the girder will be fit into the skeleton. Also, he stops humming as he begins to give his full attention to the job, and holds out his right hand (continuing to hold on to the cable 450 with his left) horisontally as a signal to the invisible donkeyengine hoistman below to be ready to stop the hoist, and b agine to rotate his hand more and more slowly as the girder approach- " its proper level. When it reaches the level, Willi's hand ceases to rotate and he moves it and his whole arm in slow goar tures horimontally and the girder swings horisontally into position at right angles to and between two other girders. Anothor workman sits astraddle each of these girders at the point where the new one is being fitted. These workmen call out to willi, who naturally is between them, still standing at the canter of his girder. By abouts from the two other workmen to willi and by Willi's appropriate gestures to the donkey-engine hoist operatOF on the ground below, the girder is fitted into its place. Then riveting machines with important-looking and happy. aggres- sive expressions start plugging rivets into the rivet-holes on the girder. Their work is brought to a halt by the 5 of clock whistle. The riveting machines taper off - not too suddenly; the riveto ing machines actually look a little disappointed to have to stop. The sound effects of industrial activity all taper off. The seene FADES OUT and INTO the FACE OF A TIME CLOCK, also happy and a little self-satisfied and very busy, with a slot where time cards are being put in, one after another, whereupon the bell rings as the time is punahed on. The clock face shows 3 minutes after 5 o'clook. series of horny hands thrusting cards into slots; first one show nondescript names -- or maybe the name a shouldn't even be legible - and last one shows "Wun- derbar, Willi - Hooh - und Tiefarbeiter - Freitag den 13. Mai 451 1928," and then the conventional indications found on all time cards. This is the and of this scene. During it, the following Voices: NARRATOR It is the year 1938 -- in the Rhineland, the great industrial region of Germany, and business is booming and Willi Hunderbar, the structural steel worker, is a busy man, a tean who is very well off and a man who is reasonably happy. It is true that Germany lost the war, and he thinks of it. But Germany also won the peace. The Allies' terms were not exactly friendly, but they were very mild indeed that still rankles in Willi's heart, when compared with the terms that Germany diotated to Russia and Humania when the Reich defeat- ed those countries. And now the Allies are quarreling among them- selves. The French are still fearful and sus- picious, but the Americans and the British are friendly. American money, especially, is pouring into Germany. It is financing this building that willi is working on -this one and many, many others: the model workman's housing project where Willi lives; the model school where his little boy, Peter, goes every day; the handsome municipal theat- or where Willi and his wife see operas and shows every week at low prices; the lavish public swimming pool in the town. Germany is preferrous and it is growing great and strong again. Altogether, therefore, it is not surprising that willi is a reasonably happy man -- or that he is a firm believer in the social democratie party, which is the strongest in Germany (it corresponds -- or corresponded -- roughly to the democratic party in this country, although it was somewhat to the Left) and which Willi gives much of the credit to for the prosperity of the times -- and in his union, which is also strong and which has protected Willi's rights, gotten him hi her pay and shorter hours and better working conditions and has helped him finance the payments on the flat in the cooperative workers' dwelling where he lives. 452 FIRST WORKMAN (calling out to willi) Languams Slowly now I Take it easy I WILLI (repeating after him) 's gut All rights Slowhy! (he rotates his hand more and more slowly to the hoist man below) 2ND WORKMAN (calling out to Willi) Easy 1 Now 1 Hold it I WILLI (repeating) is gut I Fine 1 Hold it (he stops rotating his hand and makes a horisontal gesture back and forth) The girder swings over and fits into its place and the riveting machines go to work on it. Five o'clock whistle blows, as indicated above. SCENE 2 - WILLI GOES HOME - He is riding his bicycle. At first there are many other workmen riding along in the same direction with him. They ride along a conventional street which passes at first through an industrial district; then the factories, sheds and stores thin out through an undeveloped area of iso- lated houses and flats and open lots; then there is a brief stretch of open country, then a longish coast down a hill and into a neighborhood of unpretentious but very modern workmen's apartment houses, big and nice looking, with flower boxes in 6. 453 the windows. As the ride proceeds, the other cycling workman gradually drop out as they turn off into intersecting streets and at buildings along the way, and by the time Willi gets to his flat building, he is the only syclist in sight. willi is a bit tired but contented. He rides slow17, sitting more upright than most Americans do, but not laugh- ably so. He has taken off his work clothes and left them in his locker at the building jeb where he works, and is wearing a decent blue serge suit and a German workman's cap, which is like a very simple, modest yachting cap, with a peaked visor. Clips around his ankles keep his trouser ouffs out of the sprooket and chain of the bioyole. The bioyole is modest but well-kept and contented, too. Do you want to make the bicycle express its contentment? Willi hamas and/or sings the same song he sang while working on the job, and looks casually from side to side as he rides, taking in lemp posts, a bill-board ad of a pretty girl, trees, bushes, houses, then in the countryside a haystack, a cow, a backhouse just indicated, a duck leading a file of ducklings across a barnyard, a pig and a hound dog, then near his flat building a hurdy-gurdy, birds on a telephone line, etc. etc. (these some into the story with a new significance later. Dramatic, don't you think?) As Willi gets to his own flat building, you see a long stand for bicycles, about half the places already occupied. Willi puts his bike in an empty place, and looks it. As he does so, a little boy of about six pops his head out of a window on the ground floor and waves eagerly to Willi. Behind the boy is Willi's wife. 454 7. BOY Nur schnell, Vater, mar schnelli Hurry, hurryt I've got something to show you. Something I made in school today. The Teacher says it's very good! And besides, I'm hungry. Are you hungry? Do you know what we're having for support Liverwurst, Vater! I like liverwusst, don't your But hurry Supper's ready WILLI (he laughs fondly) Nanu, mein kleiner Junge. What a mallabaloo l So you're hungry, are you? Well, so am I. willi finishes putting his bicycle into the stand and locking it, straightens up and walks toward the entrance of the building, speaking as he goes. The boy hangs farther and farther out of the window so as to keep his father in sight and then, as Willi disappears into the entrance, the boy jumps down inside the room from the window and runs to the door of the flat. Willi contimues to talk to the boy until he disappears into the building. WILLI (continuing) And what is all this excitement about something you made in school? The teach- or likes it, does he? That is good. You must keep after your work, you know, Peter. Ach, well, you are a good boy. Also, you are a very lucky boy. (reflectively) Tachal We are all very lucky. SCENE 3 - Transition from the good times of 1928 to the terrible 8. 455 times of 193. First it is the night of the day we have just been watching Willi. It is a full, rich, busy contented night. The camera opens with a not-too-remote bird's-eye-view of the apartment building where the Wunderbars live. Lighted windows. Warm laughter. An accordion plays. Somebody sings, A baby cries, briefly and not too tragically. A for cars pass in the street. Gradually the camera trucks back, taking in more and more of the countryside. A dog barks, happily. A cricket fiddies. Happy Berceuse music. The lights go out one by one in the buildings and the human sounds fade out. Birds twitter sleepily and then are heard no more. Far off, a train whistles. As the camera takes in a broader and broader view, the factory seene Gomes in, too. It is far off, but enough can be seen to show that the factories are working all night: flames from a furnace, lighted factory windows, the lights of trucks and trains moving across the land scape. The same factory sounds as in SCENE 1, but faintly heard now. There is a full, fat, contented moon. A dog bays at it, faintly - but even the dog is happy. The moon winks. But now a bitter change domes over the scene. There is the sound of a rising, stormy wind. The moon turns bleak. Storm clouds blacken out the moon and store. The trains and trucks in their movement across the landsdape far below slow dom, then stop, and their lights go out. The factory sounds die out, and the lights from the factories and flares from the furnaces. A woman is heard sobbing bitterly in spite of a man's dubious assurances that "there, there, Frieda, every- thing will be all right. You will see. Somehow, KO will pull 456 9. through." The gay, rollicking tune of the accordion recurs, but now sad and inconsolable. Dega bark, but furiously, marling, and ending in the sounds of a dog fight - to the death. There is the march of many booted feet, to a sinister march, and half-heard shouts of "Heil Hitler 1" and "Heil Red Front," and the sound of breaking win- dows followed by running feet, then loud, brutal laughter, then the sound of violent blows being struck, and finally a few shots and police whistles and ambulance sirens. Then silence except for bitterly sad and sinister music. During these changes, the Narrator speaks. all were in Germany --western world getting considered -and making trying a rainy day a better a awith eduNARRATOR Yes, they all did seem very lucky, in 1928. They and to along homes pay save falling looking very had pretty and after a and work. lucky, little everywhere forward in having well, while, love Most something too. to all children and of and in Most marrying them things better the for better people were and job cation for the children than they themselves had had -- and a better chance. A good many people even thought there weren't going to be any more wars. But. (as the change comes over the picture and sound effects) .then same disaster -- disaster and panic and ruin. And in this panio and disaster and ruin, evil men had their chance, in Ger- many. The se evil men had always been there. The re are always evil men in every country. But when times were good, these men in Germany never had a chance to seize the country. The Germans certainly are no angels, and never were. They wanted to get their re- venge for the defeat of 1918 -- most Germans 457 10. NARRATOR (continued) did. And they wanted what they called their Place in the Sun long, long ago. But as long as times were good, there was always the chance that some, at least, of the problems could be worked out. And Gertainly the nasis never could have taken over a prosperous Germany. But Germany was not prosperous. SCENE 4 - DEPRESSION IN WILLI'S ECONOMIC LIFE - The scene fades into a bleak and terrible dawn. Willi's apartment building. It has a desolate air. It is winter. The once-gay flower boxes in the windows are empty. A cold wind sweeps across the yard; the young trees shiver and shudder. Dirty snow lies on the ground. The sidewalks have been cleared but are icy. It is sleeting. Dreary music. The aky is overcast. Willi emerges from the building, hastily closing the door behind him. He is older. Not just because four years have passed (it is now 1932) but because of what has happened to him and his world. He is bent, thinner, harsher in face, without any overcoat, wearing only his blue serge suit and cap, both shabby, and an old muffler around his neck. He looks d1 mally up at the sky and shivers and shudders, hunching up his shoulders. He walks toward the bicycle stand, where now most of the places are filled. As he does so, the face of his boy, now ten and a half and wan, and his wife, appear at the window. They, too, shiver, aboving there is only inadequate heat inside. Both try to brighten up to wave goodbye to wil11, but succeed only in making a pathetic mockery of the busi- ness and quickly disappoar from the window. Willi, too, tries to wave a gay farewell, but is no more successful. 458 11. Leaning into the slanting sloot, he takes his bicycle out of the stand, gets on, and pedals off. As he does so, a starging and freezing our dog comes slinking up, stops and sniffs toward willi and then, as willi, in a black mood, maris at it, slinks away again. But it suddenly stops with its nose to something lying in the dirty snow. CLOSEUP showing this is a bird, frozen to death. The dog eats it. willi ourses at the dog, but the dog only lifts its head momentarily to bare its teeth and snarl at Willi. Willi shrugs in despairing bitterness and rides on, bent over, into the sleet storm, pedalling hard, leaning from side to side to keep going, his head pulled down as far as possible into the muffler, the slush squirting from under the tires. The bioycle, too, has been repaired and mended by an amateur's hand, and the tires are badly worn. CLOSEUP of Willi's feet on the pedals, his shoes just fit to wear -- not too shabby, but in the even more depressing state of careful, neat but necessarily inadequate patches and other mends. Music: Willi's prevlous bicycle song, but now somber and hopeless. He now pedals past the same scenes as in Scene 2, but now everything is desolate. There is almost no traffic in the streets. A few people, pitifully because inadequately bundled up, sourry along the streets. The pig from scene 2 is razorthin, terribly cold, and stands in a state of stupor before an all-but-empty trough. A duck leads ducklings across the barnyard, but they are all furiously angry with the world, and show it by their facial expressions and quackings. The backhouse leans over in the sleet, its door hanging loosely open. The 12. 459 haystack is thin and depleted and seems to be cold, too, as well as wet. The billboard ad with the pretty girl is coming unstuck in strips and satters. Somebody has drawn a mustache on her. Also someone has drawn a orde hamer and sickle and the words "Heil Moseow 1" in one lower corner; this has been crossed through and through and above there is a swastika and the words, "Heil Hitler 1" Willi passes a big, once-impressive bank now shabby and dis- reputable with disuse, with a big sign on its "Closed." Also several empty shops, some with broken windows boarded up. Fin- ally he gets to a do orway where a line of men stand outside in the elect, miserably cold, wet, hungry and despairing. They eye him dully and coldly. He dismounts, wearily, loans his bike up against a wall and takes his place at the end of the line. During this, the following Voices: NARRATOR Business began to slow down in Germany toward the end of 1928 -- almost a year before the orash came in America -- and Willi has had a hard time of it ever since to keep himself and his family alive. The building he was working on in 1928 was finished but few new ones have gone up since. In 1929 Willi did fairly well, in 1930 very badly, and since then it has been only the unemployment insurance payments that have saved the Wunderbars from com- plate disaster. Now it is December, 1932, and business is still getting worse -- jobs still harder to find. Every day will goes to the employment office, every day he stands in line to see if there is any work - but there is almost never any work. 13. WILLI 460 (to the man ahead of him in line) Got a match? Thanks. (he hunches over to light a cigarette, try ing to keep cigarette and match dry in the sleet. After a moment while he is lighting up, he goes on. His voice is dull and peasimistic) Heard of any jobs lately? OTHER WORKMAN (snorts scornfully at the question - ironically) Oh, yes, sure -- all the jobs you want -- in hell! WILLI (dully) I got a couple of days shovelling snow last month. (The line slowly moves up to the window. As it approaches, to an accompaniment of heavy, dreary, music, the voices of the workmen, each at the window, and of the official behind the window, some in stronger and stronger). 1ST WORKMAN Karl Boemer, water. (he is identifying himself) OFFICIAL Nothing today. 2ND WORKMAN Heinrich Vogt, able-bodied seaman. 140 461 OFFICIAL Nothing today. 3RD WORKMAN Adolf Schicklgruber, paper hanger. OFFICIAL Nothing today. 4TH WORKMAN Gerhard Puckelrippen, butcher. OFFICIAL Nothing today. 5TH WORKMAN Gottfried Mueller, hoist operator. OFFICIAL Nothing today. WILLI (it is now his turn) Willi Wunderbar, structural steel worker. OFFICIAL Nothing today. Willi moves on past the window to get out of the way. He stands there, even more dejected than before. He is joined by another workman, who turns out to be an old friend - who also has been told, "Nothing today." 15. 462 FRIEND Na, Willi, wie geht'st WILLI (sareastically and bitterly) Fine & Wonderfull Couldn't be better! (his shrugs; then, still with bitter sancasm) Well, at least now we can go to the party meeting. It'd be terrible to miss that, wouldn't it? EXPUNT. SCENE 5 - DEPRESSION IN WILLI'S POLITICAL LIPE - A small meeting of the social democratic party. It is in a small hall -- like an old-fashioned, small-town lecture room. Behind the speaker's rostrum, on the wall, a picture of Hindenburg. The ralls are a dirty, pale green. Inadequate light enters through unwashed windows. The air is thick with tobacco smoke. There is a babble of voices, all sullen, some raised in anger, now and then a scornful laugh. The whole scene is one of drab, dirty, disconsolate grey-green-blue-black- brown. The meeting is about to open. Less than a third of the seats are filled. The men occupying them, types like willi, are talking with each other. The seats are kitchen chairs, arranged in straggling rows. There is suddenly the knocking of a gavel. The men gradually stop talking and those who have just come in take places. The hall, which will seat about 400 men, is still less than 40 per cent occupied. CLOSEUP of the gavel hitting on the speaker's rostrum. There is also a pitcher of water and a glass. It is all very 463 16. small-tom and measly. Truck back from the gavel and the speakor's restrum to take in the chairman. He is a middle-aged workman trying to look like a govern- ment official. An earnest, honest, well-meaning soul, a little like Papa Hasenpfeffer except that the chairman is rougher-hewn and hi a features and clothes show him to be a workmans his at tempts to look like a government official are represented by a stand-up Prussian hairout, a primitive gates-ajar collar, steelrimmed spectacles and his somewhat uneasy manner. CHAIRMAN (still pounding with the gavel as the sounds of the hall gradually subside) Gentlemen Gentlemen 1 Conrades Follow workers (when he has the attention of the men) The meeting will please some to order If there is no objection, we will omit the reading of the minutes of the last meeting and proceed with our discussion. (pauses) without objection, it is no ordered. Gentlemen, this will be our last meeting before the Reichstag reconvenes. What is it your pleasure that we instruct our deputies? The floor is open for discuss sion. (There is a mattering and shuffling of feet for a moment, and then a voice speaks. It is a workman, like Willi.) WORKMAN What's the use - 464 17. CHAIRMAN (interrupting) he insists on correctly observing the formalities) Herr Schnitzel has the floor. WORKMAN (scornful of the formalities; he speaks bitterly) Mister Chairman 1 What's the use of our tell- ing our deputies anything? A fat lot of good it does us - or them either, if it come a to that. No work. No pay. Unemployment insurance that's not enough to live on but just enough so you can't die But my kids'11 die if this keeps up much longer, that I promise you l (he becomes more and more bitter and passionate, his voice rising, as he from others in the hall) goes ons there are murmurs of approval The banks are bursting with money -- and we starve The big landowners, though -- they don't starve 1 They loot the treasury to pay off their mortgages, and then they go on sprees to the Riviera (he mispronounces the word) and they keep their women and they have their fine estates and their sons are all officers .... (with special bitterness in his voice now) ... and gentlemen, if you please And their very, very fine and elegant friend of the Centlemen's Club, Mr. Papen, runs the country. And the ecomunists are bringing down the country around our ears, I tell you Around our very ears -- the communists and the fine gentlemen in their clubs between themil And what do we do? Nothing, but absolutely nothing. (with bitter disgust) We talk We debate! We pass resolutional Do you know what we ought to doi We ought to go into the streets and fight That's how bad things are -- and we're having the country stolen from us while we go on with our end- 100 465 WORKMAN (continued) less gabble, gabble, gabbles CHAIRMAN (shocked and banging the gavel) Norr Sahmitself Herr Schnitsel! You are out of order! You are gravely out of order I must ask you to sit down You have offendof against the rules and regulations of this meeting - even (lowering his voice fearfully) cooagainst the police regulations, maybe I (raising his voice again) You must know that it is forbidden to make remarks reflecting on the person of the Presi- dent of the Republic. It is he who runs the country, Herr Schnitzel, as you well know and will realise if you will but control your temper and curb your tongue. What, then - you would have us resort to violence? To go into the streets? Absurd, Herr Schnitzel, ridiculous -- and even dangerous, Herr Schnitzel. The police would forbid it. It would be high1y irregular. (he takes a deep drink of water from the glass to soothe his own palpitations at the very thought of such unorthodox preseedings) WILLI (wearily rising and speaking for the floor) Mr. Chairman $ CHAIRMAN Herr Wunderbar has the floor. (the Chairman is torn between relief that somebody else is taking the floor and anxiety lest the new speaker, too, commit some enormity) I must remind you, Herr Wunderbar, to observe the rules of order. 466 19. WILLI (in a sad, resigned voice) Ju, the rules of order It's nice we have such splendid Fules of order, isn't it? What would we over do without them? But don't be alammed I'm not going to break them. I agree with everything our colleague said about our enemies on both the right and the left - both the fine gentlemen and landowners and employers and the communists. And with what he says about the Reichstag, too. But it is even worse than you think. I will tell you what is really wrong. I will tell you whose fault this all really is. It is our own fault - all of us. GROWD IN THE HALL What diya mean it's air fault? (the workmen are sore at this statement of the case) WILLI (continuing) Yes, it's our own fault. I will tell you why. Because we have been the biggest party in Germany, night wahr? And so therefore we have had the biggest responsibility to make the Republic really work, haven't we? And if the Republic were really successful, then these others would never have a chance to get where they are today, would they? oh, our rules are fine and our procedure is fine and we are all perfectly legal and correct. But we have let these others almost steal the country from us because we have had no imagination, no courage, no force of oharaster - and we have even 1st people run our own party and our own unions who haven't the guts of a lot of guinea pigal Do you know that we don't believe in anything -- not really. Not enough to do anything effective what is the worst part of it all! It is about it. No, we must make our ow system work, and that we have not done. 20. 467 (From the Growd there are shouts and scornful laughter and hubbub generally) VOICE What about the reparations that're bleeding us white? 2ND VOICE (sarcastically) A fine speech, oh, a very fine speech But what are you going to do about it now? WILLI (sadly and dully) Do about it? Now? I don't know. I don't know. 3RD VOICE You're a little late with your fine ideas, my friend. 2ND & 3RD VOICE & WILLI (their voices coincide, and as they begin to speak together, they are joined by others so that there is a sort of chant of:) What are you going to do about it? I don't know. Too late. What are you going to do about it? I don't know. Too late. etc. etc. The Chairman bangs his gavel but nobody pays any attention to him. He shouts for order but is ignored. The meeting breaks up in confusion and the men go out in disorder, talking and arguing. As they leave the hall, the scene and sounds FADE OUT and INTO - as 468 6- THE NAZIS TAKE OVER THE STREETS - The outer entrance to the building where the social donocrate have been having their dismal moting. A heavy bress band is warching past, an SA band, playing cruelly and heavily, with lets of brass and horns and permissions a triumphant march. OLOBEUPS of the THUMPING ON THE BASS DRUN, the clashing symbals, the blaring horns, the shrieking fifes - the instruments cruel and sinister, too. In the van of the parade, just behind the band, massed nasi standards, a flood of blood-red banners, surmounted by golden eagles clutching wreaths with swastikas in them. (These probably can be found illustrated somewhere; if not, I can give you a close enough idea of what they look like for our purposes). Held aloft, these standards almost completely conceal their bearers. Then a column of marching SA mm, booted, grim, tough, ready for anything. As willi and his pals emerge from the entrance to their building, they find that more SA men have drawn a cordon along the curb and are preventing the citizens from erossing the street. The SA mon stand, each holding the belts of those on each side of them, one man facing the street, the next facing the sidewalk, the next the street, etc. Willi walks up to the curb. He wants to aross the street. Just as he gets to the cordon, the SA man near him snarls at him. SA MAN Where the hell do you think you're going? WILLI (flaring up) Since when is that any of your business? 22. 469 SA MAN (smeering) oh, a wise-guy Red, hey? He lets go the belts of the SA men on each side and swings on willi with bress knockles. Willi goes dom. The SA man is joined by a dosen others, who all go for willi. Shot of the general scone, with the band and banners and marching column, then narrowed to the melee on the ground, with boots kicking, black jacks flying and general milling around and shouting, granting and cursing, sounds of blows falling on willi, a woman screaming, the band playing through it all. The SOUNDS FADE OUT as the band goes on, the column passes, the crowd di sporses and the SA men tire of their sport of beating the unconscious Willi and leave him to go and join their somrades. Willi is seen lying, bloody and beaten and unconscious in the now deserted street. NARRATOR Yes, you see the nasis made it their business. They took over the streets. They had no au- thority to do so, then, of course. But the were on their side (in complete violation of army protected them, many among the police their oaths to uphold the Republic, of course), the courts usually found the nasis innocent and their viotims guilty -- even the Supreme Court itself solemnly proclaimed in a desis- ion that this was the rule that should be followed in all courts -- and the nasis were grim, determined - and ruthless -- man who knew exactly what they wanted and who stopped at absolutely nothing to get it. And the fumb- ling, con fused, tired people who were trying to stop the nasis didn't know what they want- ed. They didn't know what to do. They didn't know how to do it. And so the nasis, naturally, won. 23. 470 During this narration, the sound of the band and of marching feet PADES BAGK IN, louder and louder, continuing loudly through the next scene. This next scene is an impressionistic representation of the taking over of power by the nasis. SCENE 7 - THE SEIZURE OF POWER BY THE NAZIS - The band music and marching boots continue. Great arowas cheer like orazy. There are massed shouts of "Heill Heill Heild" etc. Also of "Sieg Heill Sieg Heill Sieg Heill, etc." Also of "Heil Hitler, Heil Hitler, Heil Hitler, etc." Also sounds of whips lashing human bodies, sobs, screams, shots, breaking glass. Adult crowds, also massed children cheering. Accompanying these, kaleidoscopie and brief shots of massed marching boots, of band instruments playing, of mobs cheering, of massed flags, and of radio loudspeakers hanging from lamp posts and mounted on rods of their own outdoors and of radio receiving sets indoors. Hitler's voice, ranting. HITLER I'll tell you what is wrong & It is a con- spiracy of world pluto-democratic-bolshevisti They are the ones who have ruined us! They con- trol the labor unions! They control big business and the banks They strangle us in their many tentaclesi They such our life blood They have reduced us to the level of slavesi They seduce your women They steal your jobal They get rich while you starve & They corrupt your morals But I will destroy thems I will restore Germany to liberty and honor II II II II II etc. etc. The kaleidoscopie scenes and sound effects FADE OUT into a brief shot, from above, of a torohlight procession through the Brandenburg gate, then turning at right angles (and, since the 471 procession enters the gate from the West toward the East, making a right angle into the WilheImstrasse). Then a brief shot of SITLER ON A BALOONY watching the procession. Then a BRIBP SHOT of a DISCARDED NEWSPAPER, lying in the street; The Berliner Tegeblatt, of January 30, 1933, with the heading on page 1: "Hitler Chancellor." SCENE 8 - THE NAZIS TAKE OVER THE UNIONS - The same hall where the social democratic meeting was held (Scene 5). But now all is changed. A picture of Hitler hangs beside that of Hindenburg on the wall behind the speaker's rostrum. A nasi banner is draped over the restrum. Other bannore hang on the walls. Along the wall stand tough-looking SA men on the alert, each with his left thrunb hooked in his belt; caps cocked over one eye; straps of caps tight under china; they are there to "keep order" and see that the workmen do as they are told. The kitchen chairs are now aligned in rows of military exactitude. The hall is about as full as before, but the men are standing at attention, each in front of his chair, filling the first several rows neatly and leaving the others empty. The speaker is not yet there. Radio loudspeakers hang from each of the four ceiling corners of the room. The same march as that heard in Scene 6 (The nasis take over the streets), blaring from the loudspeakers. The SA men along the walls finger the big, ugly revolvers in holsters on their right hips. On their right arms, arm-bands with the words, in Gothie letters: "Special Police." 25. 472 LONG SHOT showing this general view. A particularly venomous- looking nasi in an SA uniform strides onto the platform and up to the speaker's rostrum. The louispeakers continue to blare the march music. The SA men raise their arms, violently, like automations, in the salute; they about, raucously, "Heild Heil Heill Heilletc." The speaker also gives the salute. At first, none of the workmen standing at attention in their places gives the salute or shows any other reaction. After an instant, however, one of them in the front row, directly under the nose of the "speaker," slowly raises his arm and be- gine to say, "Heil 1 Heill Heill etc." beginning in only a moderately loud voice but getting lowler. Then another follows suit, then still another, until they are all doing so. willi is the last to yield, but in the end even he does so - without showing any particular enthusiasm about it, however. When Willi, too, has joined, and all the workmen have thus made obsisance, the "speaker" lowers his arm, the SA men follow suit, the work- man lower theirs and fall silent. (All this time the loudspeakers continue to blare their march. Now, however, the mis10 PADES OUT enough to constitute a background, ever-present, inescapable, and cumulatively nerve-wracking). The "speaker" smiles a terrible but satisfied smile. He has won the first round. He speaker SPEAKER (roa rs at them) Take your placesii 473 26. The Men do so, sharply, simultaneously, like automations. They sit stiffly erect in their chairs. Gamera trucks from general view of the hall to the "speaker" at the restrus. There is a new and ugly water pitcher, made up to look vaguely like an SA mn's head, with uniform esp. The water glass is also new, also ugly, and has a big swastika on it. The gavel is no long+ or there. In its place, the "speaker" uses, for beating on the restrum, a short, ugly dog-whip which he holds, doubled up, in his right hand. He also use s this whip for emphasising his gestures, as indicated below. Across the back of the hall, a banner with the following legends "Honor the Worker." SPEAKER (he snarls and rants in the conventional high-pressure, hyper-emotional nasi style) Racial Comrades Fellow Workers! Germane Hardly three months have passed since our beloved Fuehrer... SA_MEN (from their places along the walls, there they have resumed their original post tions, left thumbs hooked in belts and right hands fingering their pistoles they salute, like automations, as usual) Sieg Heill Sieg Heill Sieg Heill etc. The loudage akers blare loudly with their march, then subside as the SA man resume their silence and lewer their arms again. The "speaker" snaps to attention and gives a robot salute as the SA men begin, then lowers his arm as they lower theirs, and continues: 474 27. SPRAKER Hardly three months have passed since our beloved Fuehrer soised power to save Germany from the shame and villainy in which it lay 8 SA MEN (together) Pfooey SPEAKER In these three months the foundations have been laid for securing the future greatness of our country SA MEN (together) Sieg Heill Sieg Heill Sieg Heill etc. SPEAKER And now, my Fellow Workers and German Racial Conrades, I am here to deliver a message of great joy! I am here to tell you that our Beloved Puehrer.... SA MEN (interrupting again; saluting) Sieg Heill Sieg Heill Sieg Heill etc. SPEAKER (brandishes his dog whip, not threateningly, but in a caricature of a typical cheap orator's brandishing of his arm) Yes1 Jawohl Our Beloved Fuehrer, who has the welfare of his workers much on his heart and in spite of the grave concerns of state which weigh upon him -- who has given us the wise and honorable and gentle words that hang upon our walls -- (CLOSEUP of the banner with 475 SPEAKER (continued) the legends "Honor the Worker") weeker Beloved Puehrop has now found a great, a wise, a just and a perpetual solution of the labes question, sool SA MERS (saluting as before) Sieg Heill Sieg Heill Sieg Heill etc. SPEAKER (he responds in the same way to each of these outbursts) Yes, my Fellow Workers, the Fuehrer has solved your problems! He has driven out the plute-demcratio-bolshevistic-sapitalistion who were the cause of your -- and Germany's -- ruin ... SA MEN (as before) Pleasy ! SPEAKER ...And delivered you from their alutches and restored freedom... (he bangs the dog-whip on the rostrums GLOS RUP of same) ...dignity ... (CLOSEUP of the SA men with their right hands on their revolvers) ... and honor to the German worker During these remarks the scene in the hall FADES OUT on the banner, "Honor the Worker," and into the followings 29. 476 It is night, outside Willi's flat, a sinister night. The blaring march from the loudspeakers FADER OUT into only an ugly background. Dinly seen, three OF four big, heavy, black, closed cars some careening down the street, sworre into the curb with a screeching of brakes SA mon pour out of the ears and run into the building. They go upstairs to the second floor, above Willi's flat. One of the union officials lives there. The SA mon knock savagely on the door with revolver butts and blackjacks for an instant. A woman's face, shaking with terror, calls outs "Yes, yes. Who is is: What do you want?" The SA men lengt raucously and gloatingly and shouts SA NEN We want that swine of a husband of yours, that's what we want I THE WOMAN (in worse terror than before, her voice rising toward a sorean at the end as the SA men beat in the door) Ha's not here 1 He's not here, I tell you l He's not here (she soreams) The SA men burst into the room. The man is dragged out from the closet where he has been hiding. The SA men beat him to unconsciousness. The woman goes on screeming until an SA man knosks her out with a blackjack too. They drag the man out and throw him into the car and drive away. The scene shifts back to the hall. 477 30. SPEAKER (continuing) Yes, my conrades, I - happy to say that your freedom, your dignity and your honor are now secured The corruption that stank to Heaven in your union and your party has bumed out wish the ruthlessness of a - geen se that you once again are free The funds which you have paid into their coffers is mostly gone, but what is left is now safel (he now speaks with pompous, theatrical fake-solemity, emphasising his remarks by brandishing his deg-whip) It is By great privilege to inform you that as of today the evils of pluso-demoeratic-bolshehave been wiped out ! SA MEN (as before) Sieg Heill Sieg Heill Sieg Heill etc. SPEAKER (continuing) In the place of the corrupt and evil socalled "trade unions'. (he ancers at the phrase) ... our Fuehrer has created one great, truly national, truly honest, truly inspired, truly Germm, truly nordic, truly social- ist German Labor Front!!! In the place of the corrupt and evil men who led you before -- led you into the abyss - true German raoial courades now will lead youlll All of you who are true patriots and true Germans thereby become members of the German Labor Front 1 You will pay your dues henseforward to the Labor Front -- with nome slight increases 478 SPEAKER (continued) necessitated by the thievery of your former corrupt and evil leaders. Only the evil-doers are, naturally, banned from this great new order of German labor. Hard times lie before us 1 Germany must be restored to greatness. We must all be disciplined We must all obey the Fuehreri He will restore us our honor and our liberty He will bring true socialism to our Reich What is true socialism? I will tell you. "socialism is affirmation of lifel Socialism is community Socialism is struggle Socialism is conradeship and loyalty Socialism is honor, my friend, is blood and FROE, the holy, deep, earnest belief in a god is (no) (his voice rises and rants more and more toward this climax) During these remarks, the following scenes take place: While be speaks of the union's funds being gone, there is a brief flash of an SA man (taken from the rear to save animation as much as possible) with his cap, his Special Police armband, etc., rifling a cash register and stuffing the money into his pooket. When he speaks of the carrupt and evil mon who led the unions before and of their being banned henceforward, there is a flashback to the acone when the SA men are beating Willi's neighbor in his room, his wife is screaming and she is knocked out to silence her. When he speaks of the hard times that lie ahead, there is a brief flash of the shelves of a grocery store with sausages hanging up, a tub of butter, a big chunk of cheese, a box of oranges, bottles of milk, etc. At first these are all full, rich, flowing with vitality and appetizing qualities. Then they fade. The sausage that was bursting its skin and (oo) Quote is from Dr. Robert Ley, leader of the Labor Front) 479 32. looked big and fat and luscious shrinks and wrinkles -- but there is still a fairly good bit of it left. The butter that had been rich and golden and filled the tub sinks down toward the bottom of the tub and turns a sickly white and looks a. little ranoid. The oranges shrink in size and begin to show defects and dimi- nish in numbers until the Grate is empty. Similarly with apples, pears, grapefruit and other fruit. A coffee machine that previously has been happy and busy grinding coffee gradually runs empty, blacks, clatters, squeaks and stops. The shelves that had been full now show half empty. CLOSEUP of a cash register around which a sign has been tied with string readings #30 per sent price increases beginning today." Scene changes back to the hall as the "speaker" finishes. When he does so, he snaps a rigid, robot salute. The SA men follow suit. The workmen jump to their feet like automations, simultaneously, and also give the salute. All break into Deutschland, Doutschland ueber Alles, remaining at the salute as they do so. CLOSEUP, at close of scene, of the radio loudspeakers blaring out the music. SCENE 9 - WHAT WILLI DAINED UNDER NAZI RULE - It is the summer of 1939. willi and his wife and son and a new baby live in the same building. LONG SHOT of it. Flow ers grow in the window boxes again; from a distance they look much as they did in 1928 (s onne 2) and the only difference you 866 in the view at first is that nasi flags hang from every window in the building. The owners trucks down toward a near- or view of the entrance. As it does so, you perceive that 480 33. there is something vaguely sinister about the blood-red newers in the boxes; they all stand and grow rigidly, identically, with mathematical exactness. This is only suggested, however, no more. The whole place has been spruced up since 1932 but there is somehow an air of regimentation and harshness about it again, however, only suggested. The bicycles in the stand are all shiny and new, yet also, same time, somehow grim. Willi emerges from the building, walking with a suggestion (but only a suggestion) of the goose step. As he passes his own windows (from which a nazi flag is also hanging) he turns his head somewhat robot-like toward it; his wife and son appear, in a vaguely automation-like manner, at it; he waves at them with a gesture half friendly, loving wave and half nasi salute. They reply similarly. He marches toward the bioycle stand, takes out his machine, mounts it and sets off to work, all his movements smooking of the mechanical-military. Up to this point all the mechanioal-robot-like quality has been sinister and ugly, not comic. Now, however, a comical note begins to Greep in. The ride to the new job is a parody of the ride in Scene 2 (Willi Goes Home), half grim and half comic. The first comic note is struck when the dog from Scene 4 (Depression in Willi's Economic Life) appears. He is the same dog as before, but is now bigger and stronger and has a look which is vicious, as when he ate the bird, but even worse because now it is obvious he has eaten many birds since 1932 -- birds and other things. He walks with a suggestion of the goosestep, too. He stalks some birds on the ground. They see him coming and fly up onto a telephone wire. He snarls and barks 34 481 at them with sounds reminiscent of the "Speaker" haranguing the workers in Soene 8 (The Hasis Take Over the Unions). They look down at him and say (but in bird-voices), as the SA Men did in Soene 8s "Pfooey." As willi pedals along, robot-like, ha passes scenes and figures parodying those of Seena 2. The hurdy-gurdy has been "go-ordinated," for examples the Italian who operates it is now dressed up in a fascist uniform. He turns the handle, and from a distance it looks like music is coming from the process, but the Gamera shows a docoup revealing something different the box has crossed German and Italian flage and a border of swastikas. (The German flag is bigger, brighter and somehow domineerings the Italian flag is smaller, dingy, listless) And then you see that the real masic (which began when the camera was at some distance, as a typical Neapolitan song, with hurdygurdy effects) has gradually become a typical German band play ing the SA march as before - and the music is easing, not from the grinding of the Italian, but from a radio loudspeaker inside or on top of the box, Now Willi come s to the country scenes as in Scene 2. There is still another duck leading ducklings across the barnyard, but now they goose-step to a animal variation on the SA march. As they approach their house, you see that a radio loudspeaker has been attached to it, from which the march music done s. The haystack is not notably fat and propperous-looking, but rather rigid and storm and military; a radio loudspeaker sticks out of the top of it, blatting away with the same march, not comical now -- but also not yet too minister. The cow and 35. 482 the pig are marching off together in search of food, goosestepping in time. As they pass the barn, you see that a cluster of radio loudspeakers has been installed at the peak of the gable. Then they march past the backhouse; the door is tightly closed; instead of the conventional, or James Whitcomb Riley heart-shaped hole in the door, there is a swastika, and a loudspeaker is blaring the same march from within. Further loudspeakers are shown hanging from every tree and concealed in every bush and on the top of every fence-post. As Willi proceeds, however, this business begins to lose its comical aspect. The march music gets louder and lowier, more and more insistent. As be pedals through the factory distriet toward his new job, loudspeakers appear more and more fre- quently, and from every conceivable place: they hang over do erways, from lampposts, on pole a of their own, on top of street cars, on top of water hydrants, on top of automobiles, on bicycles, on baby buggies -- everywhere. And while at first they were just normal loudspeakers, now they begin to look sinister, and gradually take on a resemblance to Hitler. The music gets more and more vicious. During these stirring and dramatic occurrences (ories of "Author Author the following voices: NARRATOR (as Willi leaves his building and starts out) And Willi has made his peace with his now just masters, ao the nazia. Willi was never very sure what he wanted or how to go about getting it, from the time of the terrible depression. He 483 36. NARRATOR (continued) was tired, worn out, confused. He didn't like the nasis. He still doesn't like them. But he saw no practical alternative. And he never foresaw what the nasis would do, once they got hold of the country. He couldn't believe that anybody would do the things the nasis proceeded to do. And then, it was too late, once they got hold of the country. Each time it was too late. (with a change in tone as the first comic note -- the dog and the birds - is struck) So by now -- it is the summer of 1939 the whole country has been taken over and "go-ordinated" -- even the animals, it sometimes seems. (as the hurdy-gurdy gag is shown) And Germany has seemed to prosper abroad as well as at home. Is not Italy the Great and Good Ally of the Reigh? Are not those brave, stout fellows the Italian fascists also being "co-ordinated?" Mussolini has been to Berlin and Hitler has been to Rome and oaths of eternal fidelity have been sworn. (as the barnyard business is shown) so even if things at home are pretty thoroughly regimented, and the military march has become the national music once again, and if the goose-step has become the national dance once more -- well, there isn't much Willi could do about it, even if he wantedstill to, and he doesn't want to, very much. He "Doe an't know" and even more so than before it is "too late" -- Too late" -- "Too late", (echoing the words of Scene 5). Tax Willi pedals through the tow-factory soone, which is bustling with activity and traffic once again) Besides, willi is better off than he was in It's true that his rate of pay per hour has re- 1932 in some ways, as well as worse off in some. mained the same, that he has to pay heavier taxes and that the nasis take more and more for party levies, and that there are many shortages -- there but willi is making good money anyway, because 484 37. NARRATOR (continued) is plenty of work once again -- there is almost too mach work --- and there is still enough to eat in spite of the shortages. Everybody has a job and everybody is working hard. with part of the money they take away from him. the nazis finance cheap vacations and provide him with other kinds of recreation and diversions to keep him as contented as possible. And while willi doesn't fall for most of the propaganda they keep dinning into his ears - he can't help being somewhat influenced by it -- especially since Hitler keeps getting away with everything. (Now typical ranting nazi voices begin to come from the radio loudspeakers as Willi passes them): 1ST VOICE Germany's honor has been restored$1 Once again Germany has its aword and shield and buckler!! Conscription has been restored111 The other powers accept the reality!!! DER FUEHRER SPRICHT111 HITLER'S VOICE (ranting) Never again will Germany lie in shame and humiliation at the mercy of its enemies!!! This was absolutely last demand!ii 2ND VOICE Germany's honor has been restored!! Our to the Fatherland!!! The other powers bow to the inevitable!!! DER FUEHRER SPRIGHT!!! German brothers in Austria have come home HITLER'S VOICE (ranting as before) Never again will Germany lie in shame and 'miliation at the marcy of its enemies!!! This was absolutely my last demand 11: 485 3RD VOICE Germany's honor has been restored$1 Once again our German brothers in the Sudeten Ter- ritories of Grechoslovakia have come home to the Fatherland!!! The other powers are in accord!!! DER FUEHRER SPRIGHT!!! HITLER'S VOICE (as before) Never again will Germany lie in shame and humiliation at the mercy of its one- miesill This was positively my last demand 111 4TH VOICE Germany's hon or has been restored& Our German brothers in Prague have come home to the Fatherland 111 The other powers are helpless to prevent this act of simple justicelli DER FUEHKER SPRICHTESS HITLER'S VOICE Never will Germany lie in shame and humi- liation at the mercy of its enemiesili This was positively my last demand 111 The Voices and martial music, which has been rising and rising to a higher and higher pitch, FADE OUT, and so do the shots of the loudspeakers as Willi arrives at his new place of work. SCENE 10 - WILLI AT HIS NEW JOB - The scene is much like that in Scene 1, subject to changes as indicated. It is a construction job. In the background, the structural steel skeleton of a new building is seen. Radio loudspeakers are fastened on to it at several points. Willi and the other workmen are lined up in rigid military formation, standing at attention. A nazi in SA uniform (like the "speak- 486 39. er" in earlier seene) is standing facing them, where the officer would be in the case of a company. The loudspeakers blare the march music. The SA officer calls the poll: SA OFFICER Karl Boomer VOICS Here 1 SA OFFICER Heinrich Vogt VOICE Hare 1 SA OFFICER Gerhard Puekelrippen VOICE Here 1 SA OFFICER Gottfried Mueller! VOICE Here 1 SA OFFICER Willi Wunderbar 1 WILLI Here 1 487 SA OFFICER Adolf Schiek1gruber VOICE He doesn't work here any-more. OFFICER Heil Our Fuehrer 1 (he salutes) MEN (together and saluting) Heil Our Fuehrer OFFICER To your work The men wheel into a column of threes and march off, goose- stepping. The loudspeakers blare louder and louder. The column of marching men FADES OUT and into a series of CLOSE UPS of the same engines and activities as in Scene 1, but modi- fied: Sverywhere radio loud speakers are up, blatting away at the march. In the background of the sound effects which follow, war sounds, such as heavy guns, screaming shells, rifle fire, diving bembers, etc., at first softly, then rising to a crescendo at the end. The riveting machines look nasi and nasty and they and their working and their sounds FADE OUT into machine guns ditto. The donkey hoist-engine FADES into a tank, carpenters' hammers into an SS man's nailing up an announcement of the execution of three Dutchmen in Rotterdam, the carpenters' saws into other 488 saws making coffins, dredges into shovels digging a mass grave while a line of people with hands tied behind their backs and blindfolded wait to be executed by a firing squad, bricklaying into ditto making a wall around a concentration camp (indicated by barbed wire and machine guns mounted at strategic points, with columns of broken, dejected men, women and children trudging with bowed heads past sentries at one opening in the wire, etc.) The hiss of escaping steam from the safety valve on a locomotive turns into a flame thrower in operation. The fire in the engine turns into the flames of a burning city, etc. etc. etc. All these sights and sounds crescendo, supplemented by shots soming faster and faster of loudspeakers blaring away with Hitler's and other ranting voices, march music, mobs abouting Heils, women screaming, marching boots, etc. During all this, the following Voice: NARRATOR Yes, our old friend Willi is in it now against us, too. He may not be as enthusiastic about the war as some other, but he '11 do his part, and do it extremely well. He's this time -- back at work -- building a new arms factory (here the transformation in the pictures begins) -- a factory that is turning out rifles and machine guns and howitzers and big long- range guns that are being used to batter be used to batter down OUR cities, if Germany gets a change to do it -- and destroy a whole way of life and the people who believe down the cities of other peoples -- that will 489 NARRATOR (continued) in it, and to set up the Nasi Order -- as they call it - everywhere, instead -- the New Order of the Master People, by the Master People, for the Master People. There is only one way to stop them: First, Willi and his friends and the others have to begin to be beaten; and then, second, a true New Order can believe in. has to be created that they et. Story Suggestion for THE RISE AND FALL OF PAPA SCHULTZ Property of WALT DISNEY PRODUCTIONS HOLLYWOOD CALIFORNIA 1-20-44 "THE DECLINE AND FALL OF PAPA SCHULTZ" 491 A Stirring Drama in Many Scenes and Even a Few Acts by - Wallace R. Deuel ***** SCENE 1 - EXTERIOR OF PAPA SCHULTZ' DELICATESSEN STORE with shops on each side and street. Gloomy music, faintly, into which comes a silly little "peedle-de-pump" march which is motif for Pape on the earch. LONG SHOT of Papa coming down the street, so distant as to be only an indistinct figure of a middle-aged, thick German, smoking Meerschaum pipe. March comes in stronger as he approaches shop. During this approach, voice offstage speaks: Offstage Voice WELL, WELL -- HERE COMES PAPA SCHULTZ TO OPEN UP HIS SHOP THIS MORNING. PAPA SCHULTZ IS UNHAPPY THIS MORNING. BUSINESS IS BAD, FOR ONE THING -- AS IT IS FOR A LOT OF OTHER PEOPLE, AS A MATTER OF FACT, FOR IT IS THE YEAR 1932. AND FOR AN OTHER THING, PAPA SCHULTZ IS STILL MAD ABOUT HOW THE LAST WAR CAME OUT, AND HE'S STILL TRYING TO FIGURE OUT SOME WAY TO GET EVEN WITH THE OTHER COUNTRIES THAT BEAT GER- MANY -- ONLY HE DOESN'T ADMIT THE OTHERS BEAT GERMANY AT ALL. HE CLAIMS HE REALLY WON, BUT THAT THE OTHERS CHEATED HIM. (Papa Schultz unlocks the store and goes in) SCENE 2 - INTERIOR OF SHOP - a conventionalized delicatessen store as in this country. Papa stands behind a counter running clear across the shop. Behind him are shelves stacked with cans and pack- ages of foodstuffs. At his right, on the counter, a miserable, disconsolate-looking cash register. Papa is now seen to be a thick-neaked, thickwaisted (and fairly thick-headed middle-aged German with short-cropped 492 air. He is still smoking his Meerschaum. He is sour. He he aves a eep sigh and waits for customers. The door opens, knocking against ringing a funny little bell that hangs over it. The halting, queaky footsteps of an old lady over to the counter. The door closes, anging the bell again. The camera has been on Papa all this time; ow a funny, fat, middle-aged, dowdy Hausfrau materializes at the punter, facing Papa, with her back to the camera. CLOSEUP of a very hin and seedy-looking purse. Hausfrau (rapidly and rudely) GIVE ME SEVEN PFENNIGS WORTH OF SOUP-BONE. LOSEUP OF FAT HAND - reaching deep down into thin purse, scraping round in bottom, finally getting seven wretched-looking 1-pfennig pper coins out and anxiously counting them out on the counter. arse is now completely empty, and sags, disconsolate. CLOSEUP of easly bone on counter, which, badly wrapped, is stuffed by Hausfrau to a seedy-looking shopping bag. Cash register rings a sour note Papa opens it. CLOSEUP of drawers, virtually empty. CLOSEUP of ice at cash register, inconsolable, with sale figure, "000.07" owing. Hausfrau's footsteps over to door, which opens and closes, 11 ringing each time. In each of the following exchanges, tempo speeds a little - voices are different. Series of CLOSEUPS of assorted equally seedy and empty-looking purses, then (omitting hand) sorted sums in coins on the counter, then absurdly small and inadelate-looking items on counter, then face of cash register, even more happy, with amounts showing for sales of 4 pfennigs, 17 pfennigs, 11 ennigs, 3 pfennigs, etc. 493 Customer GIVE ME FOUR PPENNIOS WORTH OF CABBAGE. Customer GIVE ME SEVENTEEN PFENNIGS WORTH OF BEEFSTEAK. Customer GIVE ME ELEVEN PFENNIGS WORTH OF SUGAR. (etc. etc. fading into subdued ringing of door-bell and cash-register and footsteps to and from counter) offstage Voice (fades in) AND so IT GOES. TIMES ARE BAD OTHER PLACES, TOO, OF COURSE - NOT ONLY IN GERMANY. BUT THERE'S A DIFFERENCE. YOU SEE, PAPA SCHULTZ BLAMES IT ALL ON US -- YES, ON US -- ON YOU AND ME. THIS IS THE WAY HE FIGURES IT: IT MAY NOT BE EASY TO UNDERSTAND, BUT PAPA SCHULTZ FIGURES HE SHOULD BE THE LORD OF CREATION. HE THINKS HE'S A SUPER-MAN. FUNNY, ISN'T IT? BUT DON'T LAUGH NOW. WAIT TILL YOU SEE WHAT COMES OF THIS SORT OF THING. WELL -PRPA SCHULTZ BLAMES EVERYTHING ON US. WE CHEATED HIM OUT OF THE LAST WAR, HE FIGURES, AND WE' KE RESPONSIBLE FOR HIS HARD TIMES, AND HE'S LOOKING FOR SOME WAY TO GET EVEN WITH US, AND THE WORSE THINGS GET AND THE MORE HE THINKS ABOUT IT, THE MADDER HE GETS During the latter part of this interpolation, Papa pulls down the hutters on his windows, winds a sour-puss clock, and goes out, looking the door. Shot of the darkening shop -- it is the end of the day -- with the cash register looking gloomier than ever -- also the goods on the shelves and maybe a couple of hungry-looking mice that come out to forage. This FADES INTO the same LONG SHOT of Papa is at the beginning, except that he is going away from the camera. Repeat "Peedle-de-pump" silly march for him.) Page 4- - 494 SCENE 3 - PAPA SCHULTZ' CHESS CLUB - Music, "Roll Out The Barrel," or "Ach, du Lieber Augustine," or any "Hungry five" effect. LONG SHOT of the room, down to CLOSEUP of Pape Schultz himself, sitting at a table with others like him, all smoking pipes. (Maybe they are all replicas of Papa). Same music throughout this scene, fading in and out to let voices be heard. Maybe sound effect of confused voices, laughter, etc. CLOSEUP of Papa's pipe, also disconsolate, then to chessboard, with figures, all conventional but sorry-looking; beer mugs, also unhapDy. During following conversation, alternating CLOSEUPS of chessmen being moved, pipe being smoked, beer mug being emptied and fists pounding on table (making chess-men and beer mugs jump in alarm) to emphasize a point in the discussion. Maybe new mugs, full, being brought to replace old ones, emptied. Papa DONNER WETTER, NOGHMALS, MEINE HERREN, I TELL YOU THIS CANNOT 00 ON I (pounds fist on table) Friends (together) JA, JA, YOU ARE RIGHT, etc. etc. Papa MY BUSINESS, IT GOES TO THE TRUFEL -- UND IT ISS ALL THE FAULT OF THOSE VERDAMMTE FRENCH UND ENGLISH UND AMERICANSI (fist on table) Page 5 495 Friends (together) JA, JA, DOT ISS RIGHT, DOT ISS RIGHT!!! Papa (getting angrier every minute) BY GOTT, I TELL YOU VOT VE MUST DO -- WE MUST LIOK THOSE VERDAMMTE PEOPLE NEXT TIME, AND LICK DEM PROPERLY! VE MUST TEACH DEM A LESSON DEY VILL NEVER FORGETS GERMANY MUST HAVE ITS PLACE IN THE SUNI VE VILL BEAT DEM, I TELL YOU -- AND DEN VE VILL PUT DEM IN THEIR PLACES, AND DEN VE VILL HAFF ALL DE BEST THINGS, AND THEY -- THEY CAN DO VOT THEY LIKE ABOUT IT!! Friends (together - louder - they are mad, too) JAWOHL, JAWOHL!! DOT IS RIGHTIGU DOT IS RIGHTS etc. Papa (suddenly realizes apparent hopelessness of his ambitions) BUT LIEBER GOTT, HOW ARE VE TO DO DESE TINGST DOT IS VOT I DO NOT YET UNDERSTAND. A Friend BUT I TELL YOU, THERE IS A WAY -- AT LEAST, THERE IS A MAN WHO KNOWS THE WAY. HE KNOWS HOW TO DO IT. Friends (together, confusedly, some scornful but most eager) ACH, WO1 VOT DO YOU MEAN IT'S IMPOSSIBLE NOT WHO IS DISS MANT ...etc.etc. AT ALL Page 6- 496 A Friend (proudly and confidently) IT ISS NOT ONLY POSSIBLE -- IT IS CERTAIN DISS MAN -- HE IS ADOLF HITLER. CHUST YOU LISTEN ONOE TO HIM. YOU VILL SEE, DEN, DOT I AM RIGHT. (Sound effects, music, voices and scene FADE OUT and INTO: SCENE 4 - A NAZI MASS MEETING - Sound effect, sound of marching feet. Brass band plays marches with lots of brass and percussions, a glorified and sinister version of the "peedle-de-pump" march which is Papa's signature, Offstage Voice AND so PAPA BCHULTZ GOES FOR HIMSELF TO SEE ABOUT THIS MAN HITLER WHO KNOWS ALL THE ANSWERS. PAPA IS HERE IN THIS MOB - SOMEWHERE. IT'S HARD TO TELL JUST WHERE, BECAUSE HITLER DELIBERATELY DOES EVERYTHING HE CAN TO BLACK OUT THE INDIVIDUAL AND REDUCE HIM TO JUST ANOTHER MEMBER OF THE HERD. HE TELLS ALL ABOUT IT IN "MEIN KAMPF" -- JUST HOW HE GOES ABOUT THIS. BUT LET'S SEE WHAT HITLER IS TELLING PAPA SCHULTZ -- ALL THE PAPA SCHULTZES (Sound effect, satire on Hitler's voice, gibbering in German, which gradually changes into English but still in the same voice. During the following dialogue, the mob cheers, salutes and yells "Pful" as indicated. Hitler gesticulates. It is night, maybe, and floodlights bring out gilded tips of poles on whi ah banners are being carried, and blood-red banners. Huge banners away somewhat. Fire and smoke leap up from great urns, etc. etc. to suit). Hitler (gibbering) MEINE DEUTSCHE VOLKSGENOSSEN IHR SEID NORDISCHE MENSCHEN IHR SEID DIE BESTEN MENSCHEN DER GANZEN WELT111 Page 7- 497 (Mob cheers and roars approval) Hitler (always gibbering) VIER JAHRE LANG HAT DAS DEUTSOKE VOLK IN DEM GROESSTEN KRIEG ALLER ZEITEN SEIN BESTES BLUT AGAINST DIESE VERDAMMTE ENGLAENDER UND FRANZOSEN UND AMERIKANER POURED OUT. (Mob "Heils" and cheers frantically) UND WE HAVE REALLY WON THIS WAR, I TELL YOU.... (Mob cheers and "Heils" as before) BUT WE WAS CHEATED WE WAS ROBBED (Mob cheers and "Heils") BUT DE NEXT TIME, YOU VILL SEE, VE WILL WIN!!! YOU NEED ONLY TO LEAVE IT TO MR, I TELL YOU!! I KNOW HOW THIS ISS TO BE DONE: BUT YOU MUST TRUST ME! I WILL TAKE CARE OF ITI DISCIPLINE!! THAT IS WHAT WE MUST HAVE. ORDERS THAT, ALSO, WE MUST HAVE. SOMEONE MUST COMMAND AND SOMEONE MUST FOLLOW. I WILL COMMAND. YOU NEED ONLY TO FOLLOW. (Music, voice, cheers and scene FADE OUT into SOUND of marching feet and this into "peedle-de-pump" march for Papa and into following scene) SCENE 5 - PAPA'S DREAMS OF RICHES (and empire, but that is the next dream). First shot: Papa's store, but the street is paved with gold, the windows are of oryatal, etc. etc.; in brief, the store looks prosperous as hell, e.g., the bell over the door rings happily and briskly, the footsteps from the door to the counter are numerous and fade into something resembling the march of many feet; the cash register is shiny and fat and prosperous and happy looking, the shoppers' purses bulge with coins and big banknotes, the clock looks happy, a couple of mice are Page 8 - 498 sleek and fat, etc. etc. The cash register rings triumphantly and of ten, the sums laid on the counter are big notes tossed carelessly there, the parcels bought are bulky, maybe rich-look= ing cars drive up to deliver and take away the customers, etc. etc. During this scene, the "peedle-de-pump" march is gay, too). Offstage Voice (explaining the foregoing) WELL, WELL -- LOOK WHAT'S HAPPENED TO PAPA SCHULTZ AND HIS STORE: -- IN HIS DREAMS, OF COURSE -IN THE DREAMS CONJURED UP BY HITLER. THIS IS A LOT BETTER, ISN'T IT? OR RATHER, IT WOULD BE A LOT BETTER IF PAPA SCHULTZ COULD ONLY CASH IN ON HIS DREAM. DOES IT SEEM IMPROBABLE -- OR EVEN RIDI- CULOUS -- TO THINK THAT PAPA SCHULTZ WOULD BE so EAS- ILY SOLD ON THIS DREAM? WELL, IT'S NOT; IT ACTUALLY HAPPENED. IT HAPPENED TO MILLIONS OF GERMANS. OF COURSE, IT DIDN'T HAPPEN OVERNIGHT. IT TOOK MORE THAN ONE MASS-MEETING AN ONE SPEECH TO DO IT. IT TOOK A GOOD MANY. IT TOOK SEVERAL YEARS. BUT HITLER HAD SEVERAL YEARS. AND HITLER MADE LOTS OF SPEECHES AT LOTS OF MASS-MEETINGS. HE WORKED HARD, HITLER DID, TO SELL THIS DREAM TO ALL THE PAPA SCHULTZES. AND THE HARDER HE WORKED AND THE MORE SPEECHES HE DELIVERED, THE MORE DAZZLING THESE DREAMS BECAME. PRETTY SOON, PAPA SCHULTZ NOT ONLY DREAMED THAT HE WOULD MAKE A COMFORTABLE LIVING OUT OF HIS SHOP; HE BEGAN TO HAVE BIGGER AND BETTER DREAMS. FOR INSTANCE, HITLER TOLD HIM THAT HE WAS GOING TO TAKE AWAY ALL THE DEPARTMENT STORES AND ALL THE CHAIN STORES AND ALL THE MAILORDER HOUSES AWAY FROM THEIR OWNERS, AND TAKE OVER ALL THE BANKS, AND GIVE EVERYTHING TO PAPA SCHULTZ. THAT WAS A WONDERFUL DREAM. (During the latter part of this dialogue, SCENE FADES OUT and into Papa Schults (his march) as ..... SCENE 6 - A COLOSSAL BIG-SHOT'S DE LUXE OFFICE - with Papa as President of the bank (but still smoking his meerschaum), all dressed up like a plush horse, pressing buzzers and an swering telephones, etc. etc. Page 9 499 offstage Voice HAWS SCHULTZ CERTAINLY HAS GONE UP IN THE WORLD, HASN'T HET IN HIS DREAMS, OF COURSE. BUT STILL PAPA GOES ON DREAMING. BECAUSE YOU SEE, THREE DREAMS OF HIS CAN'T BE SATISFIED WITHOUT MAKING STILL ANOTHER DREAM COME TRUE. THESE RICHES AND OLORIES GAN'T BE MADE UP OUT OF WHAT GERMANY HAS ITSELF. THEY GAN ONLY BE POSSIBLE IF GERMANY CAN TAKE A LOT OF THINGS AWAY FROM A LOT OF OTHER PEOPLE. PAPA SCHULTZ DREAMS, NOT ONLY OF RICHES, BUT OF SOMETHING ELSE, TOO - OF EMPIRE. (During latter part of this, scene FADES OUT and into PAPA'S DREAM OF EMPIRE): SCENE 7 - Papa, as before, but dressed in elaborate flowing robes and sitting on a gergeous throne (but still smoking his Meershhaum). On each side, cooling him with long-handled pen- cook-feather fans, a Nubian slave. Sounds the silly little Papa Schults March, modified into a comic-langua sort of "Pomp and Circumstance," then fading into ascomic hootehie-kootohie dance. Canora TRUCKS BACK and shows . bromeskinned girl doing a dance. Voice offstage TUTS TUTS DEAR ME -- WHAT IS THIS WE HAVE DISCOVERED IN THE UNPROMISING FIGURE -- AND MIND OF PAPA SCHULTZ? so THIS IS WHAT HE REALLY WANTS MOST. WHO EVER WOULD HAVE THOUGHT IT? FUNNY, ISN'T IT? RIDICULOUS, DON'T YOU THINK! BUT WAIT. DON'T LAUGH QUITE YET. BECAUSE YOU SEE, WHEN MILLIONS AND MILLIONS OF PAPA SCHULTZES BEGAN TO DREAM DREAMS LIKE THESE, AND DREAM OF BEING RICH (sound of cash registers pounding) AND DREAM OF BEING LORDS OF CREATION... (sound of peedle-de-pump march blending into a strong brass band and sound of marching feet) ... THEN IT'S NOT so FUNNY AFTER ALL, IS IT? THERE WERE PEOPLE IN GERMANY, TOO, FOR A LONG TIME, WHO THOUGHT HITLER AND PAPA SCHULTZ WERE VERY COMICAL FELLOWS INDEED. THEY LAUGHED THEIR HEADS OFF. IT WAS TOO FUNNY ALTOGETHER TO BE 500 Voice offstage (continued) TAKEN SERIOUSLY. THEY HAVEN'T LAUGHRD ABOUT IT FOR A LONG TIME, NOW..... NEITHER HAVE A LOT OF PEOPLE IN OTHER COUNTRIES, EITHER -- BUT WE'RE GETTING AHEAD OF OUR STORY. FIRST WE HAVE TO HAVE THE REVOLUTION IN GERMANY -- THE CIVIL WAR IN GERMANY ITSELF - BEFORE WB CAN GO ON TO THE OTHER WAR THATUS SUPPOSED TO MAKE HANS RIGH AND LORD OF CREATION -- AT OUR EXPENSE, OF COURSE. (During the latter part of this, the scene and sound FADE OUT and the sound fades into the Hane Schults march, comical, as at outset, then fading into a "heroic" version of it and the sound of marching feet, and into: SCENE 8 - (THE REVOLUTION HAS COME) - A TOROHLIGHT PARADE through the Brandenburg Gate, at night. Thousands of torches, flags, etc. The Schults March, now big in volume and sinister, with lots of brass and percussions. Sound of myriads of marching boots. The mon in the parado are all in SA uniforms, insofar as they are indicated at all. offstage Voice AHAS so THE REVOLUTION IS HERE. PAPA SCHULTZ -ALL THE PAPA SCHULTZES - ARE ON THE MARCH. THEY DON'T SEEM QUITE so COMICAL, IN SUCH LARGE NUMBERS, DO THEY ESPECIALLY NOT WHEN YOU STOP TO THINK WHAT THEY ARE ON THE MARCH TOWARD. BRCAUSE, OF COURSE, THE REVOLUTION IN GERMANY IS ONLY THE OPENING PHASE OF A MUCH GREATER REVOLUTION THAT THE NAZIS ARE GETTING READY TO FIGHT ALL OVER THE WORLD INCLUDING AMERICA. IT WAS HARD TO BELIEVE THAT THIS CIVIL WAR IN GERMANY WAS PART, FROM THE OUTSET, OF A WORLD WAR AGAINST US. MOST PEOPLE WOULDN'T BELIEVE IT. BUT THAT'S WHAT IT WAS -- AND IS -- ALL RIGHT. HITLER HIMSELF SAID so, LOUDLY, PUBLICLY AND OFTEN. BUT OF COURSE PAPA SCHULTZ DIDN'T EXPECT TO BECOME LORD OF CREATION RIGHT ATAY. THAT WOULD TAKE A LITTLE TIME. HS DID EXPECT OTHER THINGS RIGHT AWAY, THOUGH -- HE EXPECTED TO MOVE INTO THE BANK RIGHT AWAY. so HERE HE IS, NEXT MORNING, ON HIS WAY TO THE BANK TO SEE HOW THINGS ARE COMING ALONG. HIS FEET ARE SORE FROM ALL THE 501 Page 11 - Offstage Voice (continued) MARCHING, BUT THAT'S NOTHING. HE'S A HAPPY MAN. THE REVOLUTION HAS COME, AND NOW EVERYTHING IS GOING TO BE DIFFERENT. (During latter part of this interpolation, scene, music, and sound effects FADE OUT intos) SCENE 9 - Papa Schultz is walking down the street, smoking his pipe, on his way to the bank. Limping and comical version of his march. Perhaps CLOSEUP of limping feet. Enormous swastika banners hang from all the buildings along the street. Despite his sore feet and the comical march, Papa Schults has his chest thrown out as befits a Lord of Creation. Sound of cash register ringing and, faintly, of the hootchie-kootchie dance. Papa heils and salutes banners (and maybe pictures of Hitler in windows, too) endlessly as he proceeds, but he does so proudly, at first, and gladly. He comes to a big bank building (where he was presi- dent, in his dream). As he arrives there, he discovers that two storm troopers have taken up positions at the door, one at each side. They are tough looking bastards. They stand with feet apart and folded arms, SA uniforms, big revolvers on hips. He salutes each in turn and heils. They ignore him. A picture of Hitler and a swastika flag in the bank window. Papa salutes these, too. At this moment, office furniture starts being thrown out the door into the street, where it amashes. (sound effects of same) Papa dodges and watches until a lot has been thrown out. Then another SA man comes out the door and puts up a big sign on the front of the bank reading, "This Bank, formerly a cesspool of 502 Page 12 - international iniquity and a center of plotting against the German people, is now a truly German enterprise." The SA man goes back inside. Papa nods approvingly. Voice Offstage YES, PAPA IS PLEASED. THIS IS WHAT HE EXPECTED. THIS WAS WHAT THE REVOLUTION MEANT, FIRST OF ALL, TO HIM. THE ENEMIES OF THE PEOPLE ARE BEING "MADE HARMLESS" (Ironically) AS THE NAZIS so DELICATELY PUT IT -- AS PART, OF COURSE, OF THE PROCESS OF MAKING EVERYBODY ELSE IN THE WHOLE WORLD HARMLESS, TOO, WHO STAND IN THE NAZIS' WAY. 30 NOW PAPA SCHULTZ IS COMING INTO HIS OWN. HE DECIDES TO 00 INTO THE BANK AND SEE HOW THINGS ARE COMING ALONG. (Pape starts to enter the bank. Without moving, the SA guards snarl at hims) SA Men WHERE DO YOU THINK YOU'RE GOING? Papa (amazed, he starts back, then salutes and heils with great care) I AM A GOOD GERMAN AND A GOOD NATIONAL SOCIALIST. I HAVE COME TO SEE THE DAWN OF THE NEW ERA IN THIS NOW so TRULY GERMAN ENTERPRISE. SA Men (again without moving, except to open their mouths in another anraling expression. They laugh upreariously and cynically) WELL, WELL, WELL -- WHOEVER WOULD HAV BELIEVED IT. (they laugh again. They bark at Papa) ALL RIGHTI 00 AHEAD. 00 IN. ASK FOR HERR PARTY OFFICIAL BLUTTRINKER. (fiercely) AND MIND YOU BEHAVE YOURSELF! Page 13 503 Papa (considerably taken aback by this reception speaks in the manner of a private being bawl- ed out by a top sergeant, standing at rigid attention with hands at his sides - but pipe still in his mouth) YES SIR, ERR SA MAN 1 YES SIR, HERR SA MAN I (he salutes each of them again, then enters, now distinctly timid as well as greatly taken aback - his march, now miserable. As he enters bank, scene FADES INTO: SCENE 10 - INTERIOR OF BANK. - An aisle, with rows of desks on each side, and a door at the end with the word, "President" on it. At each desk, a lout of an SA man, in uniform, idle except that they all look at Papa and follow him, with their eyes, as he walks fearfully down the aisle toward the door at the end. On each desk, a picture of Hitler. At the and of the aisle, outside the door, two more SA men on guard. Silly march as Papa walks down the aisle. offstage Voice WELL, WELL. THIS ISN'T QUITE WHAT PAPA SCHULTZ EXPECTED, IS ITY BUT MAYEE THERE'S A MISUNDERSTANDING. AND AFTER ALL, THE STATE MUST HAVE AUTHORITY. PAPA AGREES WITH THAT. THE STATE MUST BE STRONG. FOR OF COURSE THERE ARE ALL THE OTHER THINGS THAT GERMANY MUST DO, AND TO DO THOSE THINGS GERMANY MUST BE STRONG AND DISCIPLINED. AND BESIDES, PAPA HAS PROBABLY BEEN UNJUST TO THE SA MEN. THEY ARE GOOD, HEARTY FELLOWS -- THE KIND YOU NEED TO FIGHT REVOLUTIONS. LATER THINGS WILL CHANGE. AND THEN, TOO, THE SA MEN ARE IN THE WRONG, FOR HASN'T HITLER PROMISED PAPA SCHULTZ THAT ALL THE BANKS AND DEPARTMENT STORES AND CHAIN STORES AND MAIL ORDER HOUSES WILL BE TURNED OVER TO PAPA AND HIS LIKE? DER FUEHRER WILL TAKE CARE OF EVERYTHING. PAPA IS FEELING BETTER ALREADY. (As this proceeds, Papa perks up and walks with somewhat more confidence, and his march takes on a certain parkiness, too. Page 13 503 Papa (considerably taken aback by this reception, speaks in the manner of a private being bawi- ed out by a top sergeant, standing at rigid attention with hands at his sides - but pipe still in his mouth) YES SIR, ERR SA MAN I YES SIR, HERR SA MAN 1 (he salutes each of them again, then enters, aback - his march, now miserable. As he now distinctly timid as well as greatly taken enters bank, scene FADES INTO: SCENE 10 - INTERIOR OF BANK. - An aisle, with rows of desks on each side, and a door at the end with the word, "President" on it. At each desk, a lout of an SA man, in uniform, idle except that they all look at Papa and follow him, with their eyes, as he walks fearfully down the aisle toward the door at the end. On each desk, a picture of Hitler. At the and of the aisle, outside the door, two more SA men on guard. Silly march as Papa walks down the aisle. offstage Voice WELL, WELL. THIS ISN'T QUITE WHAT PAPA SCHULTZ EXPECTED, IS IT? BUT MAYEE THERE'S A MISUNDERSTANDING. AND AFTER ALL, THE STATE MUST HAVE AUTHORITY. PAPA AGREES WITH THAT. THE STATE MUST BE STRONG. FOR OF COURSE THERE ARE ALL THE OTHER THINGS THAT GERMANY MUST DO, AND TO DO THOSE THINGS GERMANY MUST BE STRONG AND DISCIPLINED. AND BESIDES, PAPA HAS PROBABLY BEEN UNJUST TO THE SA MEN. THEY ARE GOOD, HEARTY FELLOWS -- THE KIND YOU NEED TO FIGHT REVOLUTIONS. LATER THINGS WILL CHANGE. AND THEN, TOO, THE SA MEN ARE IN THE WRONG, FOR HASN'T HITLER PROMISED PAPA SCHULTZ THAT ALL THE BANKS AND DEPARTMENT STORES AND CHAIN STORES AND MAIL ORDER HOUSES WILL BE TURNED OVER TO PAPA AND HIS LIKE? DER FUEHRER WILL TAKE CARE OF EVERYTHING. PAPA IS FEELING BETTER ALREADY. (As this proceeds, Papa perks up and walks with somewhat more confidence, and his march takes on a certain perkiness, too. Page 14 - 504 But just at this point, Papa reaches the door and the SA men, with same business as those at the outside entrance, snarl at him): SA MEN WHERE DO YOU THINK YOU'RE GOING? Pape (startled again, loses all his confidence, snaps to attention, salutes and heils; speaks in respectful tone) EXOUSE ME, HERR SA MAN I EXCUSE ME, HERR SA MENT PLEASE, BITTE, I AN TO ASK FOR HERR PARTY OFFICIAL BLUTTRINKER, IF YOU PLEASE. SA Men (snarling) WHAT BUSINESS HAVE YOU GOT WITH HERR PARTY OFFICIAL BLUTTRINKER? BESIDES, HE IS NOT JUST HERR PARTY OFFICIAL BLUTTRINKER HE IS NOW HERR BANK PRESIDENT BLUT TRINKER. ALSO, HE HAS NO TIME FOR THE LIKES OF YOU! Papa (reduced to despair, but taking it like a good private in the Prussian army should) BITTE, PLEASE, I BEG YOUR PARDON, HERR SA MAN, I BEG TO BE EXOUSED. (timidly) I THOUGHT, NOW THAT REVOLUTION IS HERE - (he fumbles in attempting to express himself) I THOUGHT NOW THAT THE NEW ORDER HAS CONE -- I THOUGHT, EXOUSE ME, PLEASE, HERR SA MAN WELL, ANYWAY, I THOUGHT --- 505 Page 15 - SA Men (interrupting harshly) SHUT UP! IF YOU HAVE LEGITIMATE BUSINESS WITH HERR BANK PRESIDENT BLUTTRINKER, FILE A WRITTEN APPLICATION ON FORM 294K AND SEND IT IN. SIGN IT WITH YOUR FULL NAME. ATTACH A CERTIFICATE FROM PARTY HEADQUARTERS OF YOUR POLITICAL RELIA- BILITY. ATTACH ALSO A CERTIFICATE FROM THE RACE POLICY OFFICE THAT YOU ARE FULLY ARYAN. WIPE YOUR FEET WHEN YOU COME IN. BEHAVE YOURSELF AS BECOMES A FAITHFUL FOLLOWER OF THE FUEHRER AND (in shouts) GET OUT! (Papa stands at rigid attention during all this. At end, he salutes, heils and without another word does about face and marches, robot-like, back down the aisle and goes out, the louts at the desks following him with their eyes as before. Papa does not utter another word. His march is heard, military but humiliated. SCENE 11 - THE SAME STREET AS IN SCENE 1, with Papals store in it. Papa is coming down the street (same shot as opening one in picture, except that flags hang from buildings and Papa is now limping, although attempting to march like a soldier). Pipe still in his mouth. Papa salutes all the flags. Now, though, his salutes are made more in a spirit of duty and discipline, and they lag a bit. Offstage Voice AND so PAPA SCHULTZ IS A LITTLE DISILLUSIONED, THIS MORNING -- ALREADY. THIS IS NOT QUITE WHAT HE EXPECTED. AND YET, IN A SENSE, THIS IS NOT EN TIRELY NEW TO PAPA SCHULTZ, EITHER. HE HAS ALWAYS HAD A GREAT RESPECT FOR AUTHORITY - FOR THE POWER OF THE STATE. HE DESPISED THE REPUBLIC PARTLY BECAUSE IT DID NOT ASSERT ITSELF. DISCIPLINE! THAT'S THE THING, DISCIPLINE! PAPA CAN TAKE IT. IN FACT, DEEP DOWN IN HIS HEART, HE LIKES IT. AND BESIDES, THERE IS ALWAYS THE GREAT DAY OF REVENCE, THE DAY WHEN GERMANY WILL GOME Page 16 - 506 offstage Voice (continued) INTO ITS OWN -- DER TAGE AND MBANWHILE, PAPA SCHULTZ AT LEAST WILL MAKE A NICE LIVING OUT OF HIS STORE. SCENE 12 - Papa approaches his shop, again somewhat happier in mind. To his amazement, however, the shop is already open, the shutters up, the door wide -- and a nazi flag and a picture of Hitler are in the window, also a sign reading, "Truly German Enterprise. Heil Hitler!" Papa's name has been crossed through on the shop front, and there appears above it the legend, "Herr Party Official Gauner -- Enterprise Fuehrer." Papa registers amasement and dashes into shop. SCENE 13 - INTERIOR OF SHOP - as before, except that a big nasi in uniform, tough, proud, possessive, stands at Papa's place be- hind the counter and all the features of the shop -- bell over the door, face on cash register, wrappings on parcels, etc. etc. (and maybe even the mice) have been "co-ordinated: they show severe discipline and no other expression of any kind. Sound: marching feet and brass band, but only faintly. Papa (Enters, is brought up short at sight of nazi official, springs to attention, salutes and heils, returns to attention and waits). Masi (roughly) WHAT DO YOU WANTY Page 16 - 506 Offstage Voice (continued) INTO ITS OWN -- DER TAGI AND MEANWHILE, PAPA SCHULTZ AT LEAST WILL MAKE A NICE LIVING OUT OF HIS STORE. SCENE 12 - Papa approaches his shop, again somewhat happier in mind. To his amazement, however, the shop is already open, the shutters up, the door wide -- and a nazi flag and a picture of Hitler are in the window, also a sign reading, "Truly German Enterprise. Heil Hitler!" Papa's name has been crossed through on the shop front, and there appears above it the legend, "Herr Party Official Gauner -- Enterprise Fuehrer." Papa registers amazement and dashes into shop. SCENE 13 - INTERIOR OF SHOP - as before, except that a big nasi in uniform, tough, proud, possessive, stands at Papa's place be- hind the counter and all the features of the shop -- bell over the door, face on cash register, wrappings on parcels, etc. etc. (and maybe even the mice) have been "co-ordinated: they show severe discipline and no other expression of any kind. Sound: marching feet and brass band, but only faintly. Papa (Enters, is brought up short at sight of nazi official, springs to attention, salutes and heils, returns to attention and waits). Mazi (roughly) WHAT DO YOU WANTY Page 17 - 507 Papa IF YOU PLEASE, HERR PARTY OFFICIAL --- Nazi (roughly, interrupting) HERR ENTERPRISE-FUEHRER" TO YOU. Papa YES, HERR ENTERPRISE-FUEHRER, YES, HERR ENTERPRISEFUEHRER. BUT HERR ENTERPRISE-FUEHRER YOU SEE. MY BUSINESS. (apologetically) (then blurting it out) BUT THIS IS AM HERR SCHULTZI Nazi (unbending a little and speaking as one who tries to explain something difficult to a child) AH, INDEED. WELL, WELL, HEIL HITLER, HERR SCHULTZ. (salutes sloppily; Pape returns salute violently but carefully, remaining at attention) so YOU ARE HERR SCHULTZ. WELCOME, HERR SCHULTZ, WELCOME TO YOUR STORE. I AM VERY GLAD TO SEE YOU. THERE ARE SEVERAL MATTERS I MUST EXPLAIN TO YOU, HERR SCHULTZ -- AND AS QUICKLY AS POSSIBLE. YOU SEE, HERR SCHULTZ, NOW THAT THE REVOLUTION HAS COME (Papa salutes and hails) (Nazi returns salute carelessly) NOW THAT THE REVOLUTION HAS COME, THERE IS A NEW ORDER IN OUR BELOVED FATHERLAND. (Pape heils and salutes. Nazi returns salute carelessly) AND, AS OUR BELOVED FURHRER HAS SAID... (Papa heils and salutes. The nazi ignores it this time and continues) AS OUR BELOVED FUEHRER SSAID, THE COMMON WEAL MUST COME BEFORE SELFISH INTERESTS. Page 18 508 Papa (salutes and heils) JAWOHL, HERR ENTERPRISE-FUEHER JAWOHLI THAT IS RIGHT! HEIL HITLERI HEIL HITLERI (sound effect of marching feet and band) Nazi (bored with all this and only saluting perfunctorily, continues more rapidly and with distinct impatience) AND so, TO SECURE ALL THE BLESSINGS OF THE REVOLUTION AND TO PROVIDE GUARANTIES THAT THE GOODS AND RICHES OF THE NATION ARE SHARED BY ALL ALIKE AND SELFISH ADVANTAGES ARE NOT SOUGHT, THE PARTY HAS APPOINTED ME FUEHRER OF YOUR SHOP AND GIVEN ME DIRECTIVES FOR THE EFFICIENT AND PATRIOTIC CONDUCT OF THE BUSINESS. Papa (gradually wilting during this recital, but bringing himself back to rigid attention each time ) JAWOHL, HERR ENTERPRISE FUEHRER. (Sound of the march of feet, the subdued ringing of the cash register, now somehow melancholy, and the march, now halting) Nazi (continuing; he pulls a stack of questionnaires out from under the counter and slaps them down on the counter one after another as he speaks) FIRST OF ALL, HERR SCHULTZ, HERE IS THE OFFICIAL PARTY FORM FOR MY APPOINTMENT AS FUEHRER OF THIS ENTERPRISE. YOU WILL SIGN THERE WHERE YOU SEE THE CROSS MARKED IN PENCIL. PLEASE TAKE NOTICE THAT MY SALARY, AMOUNTING TO 1,000 MARKS PER MONTH, IS RETROACTIVE AS OF JANUARY 1. I HAVE COMPENSATED MYSELF FOR THE FIRST SIX MONTHS ALREADY THIS MORNING. (Cash register rings a sour note and face of register winces and shows "No sale") 509 Page 19 Naxi (continuing with increasing speed and authority) NEXT, HERR SCHULTZ, HERE IS YOUR APPLICATION FOR MEMBERSHIP IN THE NATIONAL SOCIALIST LEAGUE OF INDEPENDENT MERCHANTS. YOU WILL SIGN WHERE THE PENCILLED CROSS APPEARS. YOU WILL PRESENT THIS IN PERSON TO THE PARTY HEADQUARTERS AND (casually) OH, YES, YOU HAD BETTER TAKE YOUR INITIATION FEE WITH YOU, IT WILL AMOUNT TO 1,000 MARKS. (Cash register strikes same sour note as before, wineing, and again showing "No sale.' Same business with each of the fol- lowing): Nast (continuing) THERD, HERE IS YOUR APPLICATION FOR YOUR WIFE'S MEMBERSHIP IN THE NATIONAL SOCIALIST SOCIETY OF HOUSEWIVES -- ALSO AN AFFIDAVIT THAT SHE HAS RESIGNED FROM ALL OTHER LEAGUES, SOCIETIES AND ASSOCIATIONS. YOU WILL HAVE HER SIGN THESE AND TURN THEM IN AT THE PARTY HEADQUARTERS -- WITH HER INITIATION FEE AND DUES FOR THE FIRST YEAR, WHICH WILL AMOUNT TO 100 MARKS. NEXT, HERE IS YOUR APPLICATION TO THE RACE POLICY OFFICE FOR POWER TO OBTAIN COPIES OF THE FOLLOWING DOCUMENTS -- TO ESTABLISH YOUR ARYAN STATUS: (more and more rapidly) BIRTH CERTIFICATE OF MOTHER, BIRTH CERTIFICATE OF FATHER, MARRIAGE CERTIFICATE OF FATHER AND MOTHER; BIRTH CERTIFICATE OF GRANDFATHER ON MOTHER'S SIDE, BIRTH CERTIFICATE OF GRANDMOTHER ON MOTHER'S SIDE, MARRIAGE CERTIFICATE OF GRANDFATHER AND GRANDMOTHER ON MOTHER'S SIDE; BIRTH CERTIFICATE OF GRANDFATHER ON FATHER'S SIDE, BIRTH CERTIFICATE OF GRANDMOTHER ON FATHER'S SIDE, MARRIAGE CERTIFICATE OF GRANDMOTHER AND GRANDFATHER ON FATHER'S SIDE. THERE WILL, OF COURSE, BE NOMINAL CHARGES FOR EACH OF THESE CERTIFIGATES. NEXT, I MUST TELL YOU FRANKLY, HERR SCHULTZ, THAT YOUR POLITICAL RELIABILITY MUST BE VERY CAREFULLY Page 20 - 510 Nazi (continued) CHECKED BEFORE YOUR STATUS CAN BE ENTIRELY SATISFACTORY TO THE AUTHORITIES. YOU WILL REPORT AT 7 O'CLOCK THIS EVENING TO YOUR LOCAL POLICE STATION FOR THE INITIAL PHASES OF THIS PROCEDURE. AND NOW (he tries to be pleasant; there is a change of tone) WE CAN GET DOWN TO REAL BUSINESS. This SCENE FADES OUT AND INTO: SCENE 14 - INTERIOR OF SHOP - but Fuehrer now stands beside Pa- pa Schultz; Fuehrer is beside cash register, Papa, smaller and distinctly cowed, away from same. During each of following transactions Pape only salutes and heils visitors, looks toward cash register as Fuehrer opens it, hastily looks away and salutes again as Fuehrer takes money out. The Fuehrer is in complete charge and enjoys it thoroughly. As each visitor enters he heils and salutes rigidly. Fuehrer returns greeting with equal rigidity and immediately complies with demands for cash. At first demand, CLOSEUP of drawers of cash register, moderately full, with an IOU from nazi for 600 MARKS. Action proceeds faster and faster, sound of boots of visitors gradually become march of many boots, ringing of sour notes on cash register becomes rhythm for Papa's march, which, however, is sour and at the same time sinister and threatening. (Cash register rapidly empties). First Visitor HEIL HITLER I HAVE COME FOR THE USUAL CONTRIBUTION TO THE PARTY WINTER RELIEF FUND. Nazi HEIL HITLER: gives man a bankmote) Page 21 - 511 Second Visitor HEIL HITLERI I HAVE COME FOR THE USUAL CONTRIBUTION TO THE HITLER YOUTH Nazi HEIL HITLER! (gives him a banknote. This same business for each visitor) 3rd VIsitor HEIL HITLERI I HAVE COME FOR THE USUAL CONTRIBUTION TOWARD THE EXPENSES OF THE ANNUAL PARTY CONGRESS AT NUREMBERG! 4th Visitor HEIL HITLERI I HAVE COME FOR THE USUAL CONTRIBUTION TO THE PARTY SOCIAL WELFARE FUNDI 5th Visitor HEIL HITLERI I HAVE GOME TO COLLECT FOR YOUR ANNUAL SUBSCRIPTION TO THE NATIONAL SOCIALIST NEIGHBORHOOD NEWS1 6th Visitor HEIL HITLERI I HAVE COME TO COLLECT FOR YOUR ANNUAL SUBSCRIPTION TO THE NATIONAL SOCIALIST CHESS JOURNALI 7th Visitor HEIL HITLERI I HAVE COME FOR THE USUAL CONTRIBUTION TOWARD A BIRTHDAY PRESENT FOR OUR BELOVED FUEHRER1 8th Visitor HEIL HITLERI I HAVE COME TO COLLECT FOR THE BEAUTIFUL PORTRAIT OF OUR BELOVED FUEHRER WHICH HENCEFORWARD WILL APPEAR IN YOUR SHOP WINDOWS (etc. etc. etc. This can go on forever - meaning for as long as desired; there is no lack of collections). rage 22 - 512 This fades into: SCENE 15 - PAPA'S CHESS CLUB.- Same music as in Scene 3 except that it is now all brass and percussion and is a march. Same men, but now in uniform and become brutal, at same table. All is changed. Papa's pipe has a swastika on it. Chess figures are all nasis in uniform. Beer mugs also have swastikas on them. A big picture of Hitler hangs on the wall. A swastika flag, far too big for the position, is standing in a base in the middle of the table, so that the men have to talk over or around it, leaning grotesquely to do so. Papa Schults enters (peedle-de-pump march, normally). He goes over to his table. PAPA "Good evening, my friends, good evening!" (he speaks with relief and satisfaction. self). Now he is among friends and can be himFRIENDS (barking) "Heil Hitler, Party Comrade Schults!" PAPA (meekly, saluting rigidly) "Heil Hitler, Party Comrades all, Heil Hit- ler, Heil Hitler." (he is about to sit down when he sees the portrait of Hitler. He ceremoniously salutes this, also, saying): "Heil, My Fuehrer." (Papa sits down, relaxes, and heaves a deep sigh). Page 23 - 513 PAPA "Ach, ach, ach, Himmell What a day 1" (he takes a deep pull on his beer mug. His friends are silent. Papa continues) "The se blanks! These questionnaires: They will drive me Grazy1" : FRIEND (harshly) "Take care, Schults1 What are you saying? You do not, perhaps, support our glorious Fuehrer?" PAPA (he chokes on his drink of beer, coughs, puts down the mug. The mug - closeup now looks intensely displeased and suspicious. Papa is shocked by this reception) "But my dear fellow ..." FRIEND (interrupting harshly) Party Comrade, to you!" PAPA (hastily apologising) "Party Comrade, by all means, Party Comrade, by all means! No offense intended, my dear -- er, er, well (stammering) . ..my dear Party Comrade. I was only saying --" (his glance falls on the stern picture of Hitler on the wall; Papa gulps) . That is, I was only saying, uh, well, er, yes ..." (now suddenly inspired) "I was only saying that now we shall have some order Page 24 - 514 PAPA (continued) in our beloved Fatherland, some order and some discipline 1 Ach, such wonderful organization $ Such wonderful Now all will be regulated, all will besystem! put in order1" (as he talks, he gradually convinces him- self. Now he is really persuaded -- as, inv deed, he is, deep down in his heart.) CLOSEUP OF PIPE, its displeasure now abated, but still watchful. SHOT OF PICTURE OF HITLER, whose expression has become very storn indeed before, but is now somewhat relaxed also.) PAPA (continuing) . "Ach 1 Yes, now things will be different. (then hastily) and better, too, of course -- much, much better I My Enterprise-Fuehreri Ach, such a fine fellow! Yes, yes, now everything will be fine " (he is pretty happy about it all again by this time. Sound of cash-register ringing its sour note, though) # NAZI COLLECTOR (enters, rattling a tin-can with a swastika on it and a coin slot in the top; he rattles it under Papa's nose) "Heil Hitler, Party Comrades, Heil Hitler! Support our Beloved Fuehrer's work, Party Com- rades!" (he continues to rattle his tin can, with its coins inside) PAPA "But what is this new collection now yet again?" (he is a bit fed up) Page 25 - 515 COLLECTOR (ignores Papa's question and continues to rattle box) (CLOSEUP OF PIPE with harsh expression, of BEER MUG with same, of HITLER PICTURE with same. Papa looks up, sees picture, clamps his mouth shut, and puts a coin in the can. Collector leaves, sound of tin box fading out. Papa looks around at friends at table. They stare harshly at him. He winces and hastily takes another swig of beer.) PAPA (resumes) "Ach, well -- it is a fine thing, this glorious revolution of ours i Yess, we will all come into our own, now, one day." (he is working himself up to it) "Yess, all will be different now -- and much, much better, of course." (suddenly inspired, and now sincerely enthusiastic) "And naturally, when THE DAY comes -- achi THAT will be fine, eh? But that will be fine Think of that 1 THE DAY -- the Day when our Beloved Fatherland comes into its own, night wahr?" (he takes another swig of beer) (Hootehie-kootchie music) "And in the meantime, of course, my little business... (cash register ringing in neutral tone) will do very well, very well indeed. And yet, and yet... (he is thinking of the party EnterpriseFuehrer and the "No Sale" on the cash register) (At this point, CLOSEUPS of the BEER MUG look threatening, dit to the picture. Papa sees them, winces and clamps his mouth . Page 26 - 516 shut again.) PAPA (changing the subject hastily) "Well, well ... (with false heartiness) "my dear friends -- I mean Party Comrades, let us by all me ans go on with our match." (He reaches for a chessman. View of board with all of figures as nazis. They all have big ears, listening, and sour expres- sions. Papa's hand, reaching for one of the figures to move it, draws back in alarm. A "King" is Hitler, looking threatening like no body's business. It grows bigger and bigger; everything else disappears. Camera moves to a figure looking like Papa which has been checkmated in a corner or wherever you get checkmated in choss. The Hitler figure towers above poor Papa, who cowers. This gradually fades out as Voice offstage speaks): VOICE OFFSTAGE "So Papa Schults is cheekmated pretty completely, as you see. He's behind the eight ball. He's in the corner -- and he's going to be in a much tighter corner, before he gets through, too. Maybe you feel a little sorry for Papa Schults? Well, don't lose too much sleep for his sake. Wait -Wait. Papa Schults got himself into that corner, this Papa Schults, and all the other Papa Schultzes. They all got into it because they all want the things that Hitler has promised to get then." (Hootshie-kootchie music blending into brass band and marching feet). "They all want to be Lords of Creation. They all really think they're a Master People. They all look forward, gloating, to der Tag -- to the Day when they will take over the earth -- as Hitler promises them they will. They '11 grumble and complain some, but they'11 do just what they're told because they think they're going to get just 517 Page 27 - VOICE OFFSTAGE what they want -- from US, of course, more than from anyone else, because we HAVE the things that Hitler and the Papa Schultzes want. In fact, the next thing that happens to Papa (it's happened to tens of thousands of Papas) is to put him directly at work on getting ready for the DAY. Let's see the letter that's waiting for Papa when he gets home tonight." SCENE 16 - CLOSEUP OF A LETTER - with Papa's hands holding it while he reads. Across top of letter, in Gothic letters, the heading, "National Socialist German Workers' Party." Under this, in smaller Gothic type, "District -- Berlin." This is a form letter, reading as follows: : "Party Comrade Schulte "In order to carry out the great tasks set us by the Fuehrer for the future greatness of Germany, it has been decided to close certain retail busi- ness enterprises which are unnecessary for the welfare of the Fatherland and which also are econo- mically inefficient. I hereby inform you that your shop has been reported to belong properly to both these categories. "I also hereby inform you that, owing to the spec- ial generosity of the Party District Leadership, your shop will, by a special dispensation, be al- lowed to remain open, but under the Leadership of Party Comrade Enterprise-Fuehrer Gauner, who is charged with making drastic reforms in the conduct of the business. You yourself have been honored by being ohosen to set your hand to certain tasks set by the Fuehrer, to whom you owe this opportunity." "You will report, with one (1) small suitease of ONLY the most essential garments and toilet artieles at 5:30 A.M. tomorrow at the Soblesischer Railway Station. You will be absent from your home and business for an indefinite period. You will speak of this to Nobody, under any circumstances. "Heil Hitler (signed) "Schicklgruber." Page 28 - 518 (During the time this letter is on the screen, Papa's voice, low and muttering, with occasional "Achel" is heard, but only faintly. sound of Papa's march, limping and at the same time brassy. Sound of cash register ringing sourly. This FADES INTO: SCENE 17 2 A conveyer belt in an ammunition factory, along which up-ended shells move. Papa and a long line of others perform tiny mechanical gestures on each shell as it passes on the belt. "Factory" sounds, blending into rhythm of many marching booted feet, coming in stronger and stronger, with Papa's March coming in strong with lots of brass and percussions, too. VOICE OFFSTAGE "So here is Papa, at last in his proper place -his place of preparation for conquest and plunder. Papa is a sorry figure, perhaps, but he is not nearly as sorry a figure as those other people these shells are going to fall and to explode. will be in whose home s and schools and murseries Papa a dream of Empire may seem silly to you and me ... (sound of the hootchie-kootohie dance) "...but it's not silly when you see the sort of thing it leads to." SCENE FADES OUT AND INTO: SCENE 18 - The Hootehie-kootohie dance blends into the heavy, brassy military march, the sound of marching feet comes in stronger and stronger; the scene comes into a map of Europe, with Warsaw, Prague, Copenhagen, Oslo, Brussels, Rotterdam and Paris (and some Russian city?) marked in -- and Berlin, of course. Heavy, hobnailed marching boots in formation gradu- Page 29 - 519 ally appear, huge in size, filling the whole scene, and the map fades out, and into smoking ruins, with the sound of the boots and the brassy march creseendo. VOICE OFFSTAGE "Funny! No, not very. Not funny at all. Hitthis a long, long time. We couldn't believe it, at first. But it was true enough. We know that, ler and Papa Schults have been getting ready for now. Now we have to turn our own lives upside down to stop those marching boots and throw them back in confusion and in rout." # (Sound effect of some patriotic American song coming up through German music and gradually dominating it, of falterings in German boots, and then of panicky running in retreat. Crescendo. "The Stars and Stripes Forever" if available.) - THE END - et. MAGDA, A GERMAN MAIDEN (W. Deuel) Property of WALT DISNEY PRODUCTIONS HOLLYWOOD CALIFORNIA 1-26-42 521 MAGDA A GERMAN MAIDEN By Wallie Deuel (who is something of a wag) SCENE 1 - MUNICH, 1932 - MAGDA'S ROOM Magda is 9 years old. She is the daughter of a clothing salesman in a store in Munich. She has a dachshund puppy, named Fritzi. She is fond of Flowers. She is just beginning to take violin lessons. Her violin, her most precious possession (apart, of course, from Fritzi), with some sheet music, rests on a little table against one wall of the room, a sleek, well cared-for object in its case. on the wall, pictures of Wagner and Beethoven and Mendelssohn (if anybody will recognize them or they can be labelled without cluttering up the scenery). In one corner, a little shrine with a crucifix, with a little vase of flowers in front of it and a candle or tiny lamp burning; Magda and her family are, like most Bavarians, Catholics. The flowers before the crucifix have come, obviously, from a flower-box in the window. For the reat, the room is pretty typical of any 9 year old girl's room, with dolls, a doll house, a music box and other toys. As the scene opens, Magda is pretending to be a social worker calling at a poor home to see if she can't help the family. She speaks in the voice and words of a 9 year old, but pretending to be a grownup. She wears a pair of steel-rimmed spectacles to heighten the illusion (if any) and is carrying a shopping bag from which she takes objects as identified that are supposed to represent the benefactions she talks about. The 'home' of the 'poor family' is the doll house, and the 'family' are the dolls. Fritzi has 522 accompanies Magda on her rounds and is an interested and deveted spectator of the proceedings. The whole scene is one of happy. innocent childhood. Magda is a normal little 9 year old, neither extraordinarily pretty and sweet nor unusual in other respects, bus lovable without being so much so that she can't plausibly turn into a bitch during the course of the dream. The seene opene with a view of the doll house, so repre- sented that it seems at first that it is a real house. The deer is open and the Mama doll stands in the doorway. Actually, of course, she is propped up there, but at first she looks like a real person standing, Magda's voice is heard: MAGDA "Good morning, Freu Mueller, good morning! What a lovely day, to be surel And how well you are looking And how are all the children? And that poor, dear, sick husband of yours - is he better, Frau Muellert I do hope soe (She babbles on half like a child and half like a grown-up Lady Bountiful). As she goes on, the camera trucks back and takes in more and more of the seens, and it gradually become apparent that Fres Meelier! is a Mana doll propped up in her doorway and that her house is a doll's house. Magda is erouched down in front of the dell's house, talking to the doll; her shopping bag is beside her on the floor at one side and Fritsi is sitting at her other side, front legs at ease, hind lega at rest, his head cocked on one side his ears at the alert, his tail wagging slowly with an air of great interest and delight. As Magda speaks, he looks up at her and wags his tail somewhat faster; in the brief pauses when 'Frau Mueller! 523 is supposed to be speaking, Fritai cocks his head to the other side and puts out his nose slightly toward her. Magda is wearing a crucifix on a fine gold chain around her neck. As she crouches down and bends over the doll house, the crucifix swings out and away from her, so that it becomes apparent. MAGDA (continuing in the same manner as before) "I've come straight from early Mass, Frau Mueller, and I've brought you some things. Father Johann spoke to me about you this morning, Frau Mueller. 'Magda,' he said to me, Magda, I do wish you'd drop by at the Muellers' this morning if you would be so good," he said (Magda imitates a man's voice) I'm a little troubled about Frau Mueller, , he said. 'Just you be so kind as to drop in on them and see how she and her good family are this morning.' And so here I am." She opens the front of the doll house, which ninges on each side and opens like a cupboard, and takes off the top and puts it on the floor at one side, beyond her shopping bag. Fritsi follows these proceedings with the greatest interest, giving a yelp of excitement and pleasure, getting up on all fours, wagging his tail delightedly and going over to the doll house and sniffing inside it. Magda speaks with mock severity to hims MAGDA "Why Fritsis What are you doing? Is that polite? First we must be Invited in." Fritzi, abashed, hangs his head, his ears and tail droop, he looks appealingly at her, falls back a step or two and then sits up begging for forgiveness. 524 MAGDA (she forgives hims she Laughs) "There, there, 1th all right, Fritsi. Yes, I forgive you. But mind your manners. What will people think?" Fritsi resumes his previous stance, gratified and eager again. MAGDA (now pretending to be Freu Mueller') "How do you do, gnaedige Frau, how do you do? Good morning, good morning. How kind of you to come, gnaedige Frau. Do please come in, gnaedige Freu." Frites edges closer to the doll house, but casts a careful look at Magda to be sure he is not getting out of bounds. Then he resumes his previous stance again. MAGDA (again the Lady Bountiful) "See what I have brought you, Freu Mueller!" Closeup of Magda's hand taking out of the shopping bag and laying on the toy table in the toy kitchen of the doll house toy articles representing each of the things she mentions, as indicated. MAODA "Some nice cans of beans! (spools) A sack of flour! (a toy sack labelled 'cement') A fine new brooms (a typewriter eraser) And some soaps (a tiny cake of hotel bath soap) And best of all Here she starts to draw a chain of tiny toy sausages out of the shopping bag: Fritsi's tail wags frantically and he yelps eagerly 525 and site up, begging. Magda speaks to him with mock severity: MAGDA "Why Fritsis Aren't you ashamed of yourself? And the Nuellers so poor and you so well off, with a papa who sells fine clothes in a fine store and brings so much money home every week, so that we don't have to worry about anything, even in such hard times as these - but the poor, poor Muellers haven't hardly anything to eat, and we've come to help them, and now you beg for their things? For shame, Fritzis Pfooey, Fritsis Fritsi is not much impressed by these exhortations. His tail stops wagging and he looks a little guilty, but he remains sitting up while the string of toy sausages emerges from the shopping bag and is laid down on the kitchen table, which is now, of course, staggering under the weight and volume of all the things Magda has laid down on it. Fritsi's gaze follows all these proceedings. As the string of sausages is laid on the table, he gives up hope and resumes his previous stance once more, looking sadly dis- appointed. Throughout the rest of the scene, his eyes turn wistfully from time to time toward the toy sausages and once or twice he edges toward them, when he thinks Magda's attention is elsewhere; each time he gets a little closer to the sausages. At the end of the scene, he manages to swipe them unobserved. At first his expression is one of unqualitied joy. Then, as he chews and tries to swallow them, his expression changes to one of bafflement, then concern, then anxiety, then real fear. He burps, looks startled, and runs hastily out of the room. 'Frau Mueller! laughs at him. Magda does not see this by-play. 526 MAGDA (with a change of tone; now she is a nurse) "And now, " Frau Mueller, let me see that husband of yours. Closeup of a male doll, somewhat the worse for wear, lying in a doll's bed in another room of the house. As Magda babbles on in her role of nurse, she takes a full-sized clinical thermometer out of her shopping bag, looks at it with what she thinks is a highly professional air -- whereupon the thermometer grimaces in anticipation of what is coming -- then shakes it, whereupon the thermometer gets diszy, then sticks it clear down the male doll's throat and looks at a toy wrist watch. Closeup of same shows it to be a toy that does not function at first but then, with an apologetic air of 'What can I do? shrugs its shoulders, that is, the hands -- whereupon Magda takes the thermometer out of the doll's innards and looks at it. She shakes her head and she reports that 'Herr Mueller' still has a temperature, the doll looks worse than ever. MAGDA (with forced heartiness in her role as nurse) "Well, well, well, Herr Muellerl And how is our patient this fine, sun-shiny morning? Looking much better, I think -- don't you, Frau Mueller? Frau Mueller' obligingly nods, doll-like, as an automaton, but 'Herr Mueller' immediately looks worse. 527 MAGDA "What? oh, come now, Herr Mueller, that is no way to acti of course you are much better! See -I am going to take your temperature and you will see that you are much better (suiting the action to the word) Closeup of the doll with the thermometer down its gullet. Shifts to closeup of Fritsi sneaking up on the sausages. Magda sees him and calls out: MAGDA (sharply and reprovingly) "Fritail" Fritsi starts guiltily, hangs head, ears and tail droop. He looks appealingly at Magda for forgiveness; she goes on in her role of nurse. MAGDA (as before -- she takes thermometer out of the dollg 'Here Mueller! slumps and looks terrible) "But --" (Magda brightens up artificially) "it's nothing, really -- nothing at all! It's better than yesterday, Herr Mueller. Why, you'll be up and around in no time -- won't he, Frau Muellert" 'Frau Mueller' nods dutifully. Magda shakes the thermometer again, it looks furious and shakes it self like a dog that has been wet; she puts it back into her shopping bag. During this business, Fritsi has been edging up on the toy sausage again, but Magda sees him just in time and calls out to him: 528 MAGDA (sharply and reprovingly) "Fritsil" Fritsi goes through same business as first time. A cuckoo clock on the wall announces 10 o'clock. Magda starts up, closes the doll house front and puts back on the top speedily and unceremoniously. She gets up, picking up her shopping bag as she does so, snatches off her spectacles and slams them down on a chiffonier -- there is no glass in them, so there is nothing to break -- looks at herself in a mirror, picks up her violin case and music and goes out. While she is doing this business, Fritsi snatches the sausages, as described above, and bolts out the door of the room the instant Magda opens it. During this business Magda speaks as follows: MAGDA (startled by the sound of the clock) "Oht Ten o'clock already! My violin lesson! I'll be latel What will the Herr Teacher say? oh, dear, I must hurry." (Just barely keeping up the pretense of the call on the 'Muellers,' she is very perfunctory in her adieus) "Goodby, Herr Mueller! Goodby, Frau Mueller! I'm sure everything will be all right. I'll come by again and see you tomorrow morning, first thing. And I'll tell Father Johann how well you're looking. Oh, dear, do I have all the right music? Is it all heref I guess so." (and so, talking to herself, off she goes) SCENE 2 - THE VIOLIN LESSON The scene opens with a long shot of Magda, carrying her violin case and music, skipping off to her lesson, Eritzi, 529 who has rid himself of the toy sausage, is hurrying to try to keep up. He is still tasting the varnish of the 'sausages,' and making the grimaces a dog goes when it has a bad taste in its mouth. The street scene is a quiet residential district, not wholly unlike such a neighborhood in an American city. At a corner, there is a book and stationery shop. As Magda reaches it, she pauses to look in the window. View of the store front; the window bears the legend, in Gothic letters: Buecher Buero-Bedarf - Zeitschriften. This fades out and into: Books, - office-Supplies - Periodicals. Camera, from behind Magda, trucks down to show contents of window. Fritzi is interested in the contents of the window, too; he puts his front paws up and looks in beside Magda. Camera shows contents including books and magazines with following titles: "Sex Through The Ages," "The White Slave Traffic," "Fun in a Harem," "The Love Life of Cleopatra, "The Third Sex," etc. As Fritzi sees these (maybe one of the books or magazines is open, and/or has on its cover a hot nude just politely and barely indicated) his tail stands straight up, his eyes pop wide open and he assumes a general expression of complete astonishment; this changes into an expression of leering but comical concupiscence -- like Donald Duck looking into the Dance of the Seven Veils dingus at the carnival. But Magda's reactions are different. At first she is startled, then shocked, then fascinated and big-eyed and gazes raptly at the display. Then abruptly she pulls herself together, notices the lewd expression on Fritzi's face and speaks to him with sharp reproof as before, but stronger: MAGDA "Fritzil" 530 Fritsi starts guiltily, Samphes; ears and tail droop; he looks appealingly at Magda, who, however, only stares at him sternly, so he lets his front feet drop down from the shop window ledge and hangs his head. The two resume their walk to the violin lesson. Now, however, Magda is obviously preoccupied with what she has seen; she walks slowly, dangling her violin case and music. Fritzi, too, has been much impressed, although in a less creditable sense. He waddles along, thinking it all over and wagging his head; from time to time the same lowd expression as before comes over his face and he casts regretful looks backward toward the shop window. During all this business, the following voice: NARRATOR "Yes, this is the sort of thing that could happen and with irony but not too obvious irony) of the German Republic -- which is where our story opens. Magda is only 9 years old (it is 1932) and yet just on the short walk to her violia lesson she has to pass such filth as this -- and of course she stops to look at it. Magda's father and mother are dreadto any child in the Bad Old Days (overstressed fully upset by this sort of thing, of course. But there's not much they can do. They spoke to the shopkeeper about it, but it didn't do them any good. He was polite enough -- why shouldn't he be? - but he said there wasn't any law against selling such things OF displaying them, and he sold a lot of them, and as long as everybody else sold them, he guessed he would too. Magda's father and mother are good Catholics, as it happens, like most Bavarians -- they live in Munich -- but the protestants are just as much upset by this sort of thing as the Catholics. Yet nobody can do much about it. And there are a lot more things like this that go on -- so many that a good many people say it's all the fault of the Republic -- it could only happen under such a weak, spineless, and even degenerate, form of government and it's turned a lot of people against the Republic -- that and the hard times that only seem to get worse all the time, with no hope of any improvement. The scene fades out on Magda and Fritzi trudging off down the Page 11 - 531 street and into them at the door of a little one-atory house. on the door there is a brass name-plate reading: Wolfgang Amadeus Geiger - Violin Teacher. Magda stands on tip toes and knocks with a cute. knocker made up to look like a violin. The door opens. Fritai looks eagerly inside but Nagda speaks to him in a businesslike manner: MAGDA (wagging her finger at him German- style) "Fritsil You know you can't come in. Wait here like good dog until I'm through -- and don't get into amischief. Fritzi site up and begs to be allowed to go in too, but as he realizes that his plea is hopeless, he sits down again, looks disappointed, droops his ears and head and watches inconsolably while Magda drops a curtsy to the Herr Teacher, who has appeared in the door, smiling, then enters and the door is closed. At this point Fritzi's attention is attracted by a bussing sound. He lifts his head in eager and innocent interest. A big bee is working on a flower that grows in a bed beside the door. Fritsi is too young to know the dangers he is running. He is only eager and curious and friendly. He waddles over to the flower, which is just high enough to let him put his nose into it. As he does this, the scene outside the door fades out and into the interior of the teacher's home, a typical music-teacher's room, but more fussy and cluttered up with violins, sheet music, a coffee tray on a table, portraits of musicians around the walls: Wagner, Beethoven, Mendelssohn, Bach, Brahms, Mosart, Schubert, Schumann, et al; books everywhere, a shoe on top of the book case, a hat on age 16 - 532 the desk, a cat asleep on a window ledge, etc. The teacher is an attractive type of dishevelled young Bohemian, with long, flowing tie, a velvet jacket, hair too long through carelessness rather than affectation, rather disreputable carpet slippers on his feet, and an eager, likeable air about him. As this scene comes in, he is seated at a baby grand piano that crowds one whole end of the room, softly playing Mendelssohn's violin concerto while Magda prepares to play. She is standing in front of a music stand with the violin part music on it, marked with the name. She is tuning her violin, chalking the cue or what- ever you do with a fiddle to get it ready to play -- silently, however, so that the piano music is not spoiled -- and talking to the teacher as she does so. Just as the scene fades in and before the magic spell of the author's witching scene makes itself felt, there is an agonized yelp from outside as Fritzi gets stung on the nose, a triumphantangry buzz from the bee, and Fritzi's yelps are heard disappearing and fading out into the distance. Magda and the teacher ignore the sound (unless you want to spend all the time and dough necessary to animate the proper reactions if they hear it) and begin their dialogue. MAGDA (eagerly, sweetly, apologetically) "I'm so sorry, Herr Geiger, really I am! I had no idea it was so late! 533 MAGDA (with a change of voice back to her grown-up role of Lady Bountiful and Nurse) "You Herryou Geiger, I had to pay a call today. At thesee, Mueller, know." (she isn't lying to the teacher, only playing a part) "Poor, dear people! They suffer so. with times so bad, you know." TEACHER (indulgently play the part too: he keep on playing softly, though) "of course you had to call on the Muellers. And how did you find them? Herr Mueller is better, Ihasn't hope? Poor mani He's had a bad time of it, he?" (with a change of voice to indicate he is turning from the 'play' to reality) "Nal little gnaediges Frauelein! And won't you be happy when you really grow up and can really help take care of real people!" MAGDA (changes to realities too) "oh yes (eagerly) Herr Geigeri There are so many poor people in Munich TEACHER (sadly) "... and not only in Munich, little gnaediges Fraueleini MAGDA (continuing as before) " and when I grow up I am going to go to the University -- my Papa says so -- and learn all about rage + - 534 MAGDA (continuing) everything and how to take care of poor people and I'm going to be a nurse and then I'm going to be very rich and give lots of good things to all the poor people! TEACHER (he is still playing; he speaks appointments of life, but also sadly, as one who knows the dis- indulgently and sweetly) "of coursel of coursel I'm sure you are Magda, I'm positive you are! (Now with a change of voice - he is ready to get down to business) "Sol And now let us play. I wanted you to look today at Mendelssohn's concerto, just to see what wonderful music it is. But of course that is still a little too difficult for us, I'm afraid. But you see what great music there is in the world? And what happiness there will be for you when you can play it? That is what your lessons will teach you, some day. But for the present, let us try something simpler -- say the Lorelei." He plays a few bars of the song on the piano, then goes back to the beginning and starts again. Magda goes along with him this time, playing not badly enough to spoil the scene but also not too well for a 9 year old. The scene fades out on this scene and this music. SCENE 3 - DINNER AT MAGDA'S HOME A conventional but nice, homey middle class dining room, As the scene opens, a clock on the wall is striking 6 O'clock. It is like one of those elaborate toy clocks in Pinocchio, as fancy as you want to make it. The camera opens on this, then trucks back to show the whole dining room. Around the table sit Magda (on a telephone book atop a regular dining room chair) at one 535 long side and Papa and Meme at the two shorter ends, facing each other. All have their heads bowed in prayer. Fritzi is sitting beside Magda's chair. On the table, plates of split green-pea soup with chunks of sausage in it in front of each place, with steam and aroma rising. Fritzi sniffs ecstatically and thumps his tail. Magda surreptitiously wags a fingers him under the table - Fritsi licks the finger. on the table, a vase of the same flowers as those in the window box in Magda's room and at her shrine. On the wall, another crucifix. Also on the table, a plate of sliced sausage and cheese, a plate of black bread, sliced. A coffee pot and, at Papa's and Mama's places, steaming cups of same. A modest (but by no means meager) piece of butter on another plate. At Magda's place a glass of milk. A bit out of the way at the side opposite Magda a big piece of coffee cake. It is a thoroughly conventional, thoroughly nice, happy homey, middle class light supper. As the prayer is finished (write prayer to suit like an American Catholic grace) the family lift their heads and start to eat and talk, Throughout the following, camera concentrates on Fritsi and the objects eaten as they are picked up on the plates whose loads steadily shrink, to spare as much as possible human animation. PAPA Nat My little Magda, and what have you been doing today? He takes a apponful of soup, blows gently on it and down it goes. On his soup plate is the word 'Vater'. Magda takes her soup from a smaller plate with a kid's pattern around the edge and her name on it. She is more hasty and a little more noisy. Fritsi cocks 536 his head when he hears the sound; his mouth waters. MAGDA "Well, I called on the poor Muellers today and took Herr Mueller's temperature and left them some food" and things and Fritzi was very, very naughty Shot of Fritzi hanging his head at this reminder of his sins; he lifts his head then and makes the same kind of a funny face as he did when his mouth was full of varnish. MAGDA " and then I went to Herr Geiger's for my violin lesson and he played a concerto by Mendel- (she stumbles a little over the name) -- Mendelssohn, and then I played the Lorelei for him and he said I was learning very fast. Papa (without pausing) what's a White Slave? PAPA & MAMA (they speak together, shocked, yet not sharply or reprovingly; closeup of their spoons paused in mid-air; Fritzi looks lecherous) "Magdal" MAMA (she is shocked and hurt; speaks tenderly to Magda) "oh, Magdal" (Mama puts her spoon back into the soup plate, marked 'muster', untasted. Papa follows suit; Fritzi looks bewildered) "Please don't look into that dreadful window anymore. There are so many nice, pure, lovely things in the world -- you are far too young to be thinking about such things. Some day when you are older, Papa or I or Father Johann or one of the Sisters will tell you about some of these things. But now do not think about them or talk about them. Promise me, Magda. 537 MAGDA (disappointed, a little unhappy, still curious but acquiescent) "All right, Mother." MAMA (pressing Magda, but tenderly) "Promise, Magda?" MAGDA (reluctantly but nicely) "I promise, Mother." Mama and Papa sigh with a mixture of relief and disappointment and go back to their soup. Papa finishes and reaches for bread, butter and sausage and makes himself a sandwich. PAPA "As though there weren't enough other things to worry about, without such filth, tool Ach, this Republic!" (He speaks with scorn) "Business only gets worse -- always worsel Silberstein, who sells for Rosenberg, down the street, says it is the same with themi" (He is much discouraged, although by no means broken or despairing) "I don't know. I don't know. All these years I have voted for the People's Party, as a good Catholic should. But I must say they don't seem to know much better than anybody else what to do. Always we are insulted and bled white by these verdammten French and English... Page 18 - 538 MAGDA (politely and eagerly) "But Papa, the English, they are our friends. You have said so yourself. And in school, you know, we exchange letters with English boys and girls in England and you remember how we had a little English girl here for her vacation last year and how Gerhardt went to England and lived at her house how nice and friendly he said everybody wasand to him." MAMA (lovingly but reproachfully) "Nagda darling, you really mustn't interrupt your Father when he is speaking. Now eat up your soup, dear. Seel I'll fix a Butterbrot for you so you won't have to wait for it when you are ready." (closeup of Mema's hands doing same) MAGDA (penitently) "Yes, Name." PAPA "It doesn't matter. It's all right. Yes, the English may be our friends. But everything goes Morals! Political Everywhere there is godlessness and immorality and poverty and disorder -- and always these parties at each other's throats! wrong, always everything goes wrong. Business! Itlin a swindle, a swindle!" (His voice has risen somewhat during these remarks, but he is by no means shouting - now somewhat cooler.) "I was talking to Herr Wagner today. He is a national socialist, you know -- a nasi. I don't know, I don't know. I am beginning to think perhaps he is right." 539 MAMA (hesitantly) she defers to his judgement, but is moved to speak none the ions) "But otto.. PAPA (his mind is all but made up, but he recognizes the force of his wife's unspoken reservations - without, how ever, being moved by them) "Yes, yes, I know. Father Johann says they are godless men -- and not Father Johann alone. And much in this now party I do not like. But something drastic must be done. Better, even, a terrible end than an endless terror. And perhaps these nasis are not so bad, after all, as we have thought. This Hitler -- he is a Catholic, when all is said and done. Also, he is an Austrian, not a Prussian. And he keeps saying he will save religion and morality from the Communists. It is even in the official party program. Herr Wagner showed it to me today. And the nasis say they will do away with unemployment and disorder and immorality and times will be better. I don't know. I don't know. I think I will maybe vote for this man Hitler the next time. At least we could not be much worse off, and maybe we would be better. During this discourse, closeup of the food being eaten, the plates emptying, the soup plates being pushed back, then picked up and stacked and removed, then the clock striking 6:15 o'clock. Magda's attention has wandered. She has finished her soup and received her sandwich and is eating it, drinking her gleas of milk the while. As she perceives that her father and mother are intent on their political discussion, she surreptitiously removes a piece of sausage from the plate. Fritizi by this time is ravenously hungry, His mouth is water, his nose quivering. Toward the end of Papa's last speech, Fritsi sits up and begs, nuzzling Magda's leg with his nose to attract attention and giving a little 540 bogging whine. Magda reaches him down the piece of sausage. Throughout this scene, background of Mendelssohn Concerto, with sound effects of eating. As Papa gets pessimistic about the situation, the concerto falls into a gloomy mood. Come to think of it, The Author failed to indicate sound effects for the earlier scenes) but they're fairly self-evident -- good corn, like a happy childhood melody for the first scene in Magda's room, a cute, comical theme for the doll's house scene, a happy skipping song for the skip to the lesson, with something evil and hot for the shop window. As Papa changes moods in the rest of the scene, the sinister depression-music fades back into the concerto as background. PAPA (he forces himself to forget the harsh world outside and comes back to Magda) "But there! What a dull political discussion for the supper table, to be surel Let's talk about something elsel Du, little Magda, have you been helping Mutti today on Liesl's day off? By the way (he turns toward his wife), didn't Liesl have a day off this week already? Is she sick, then? Mama clears her throat warningly, looks at Magda who, however, is intent on slipping a piece of sausage to Fritsi and misses this piece of busines -- puts her finger to her lips to tell Papa to change the subject, and shakes her head. Papa looks surprised, then puszled, raises his eyebrows, shrugs his shoulders and eats. MAMA "Well, not exactly -- and Magda has been a very good girl, Vati (she is talking fast to cover up) -- a very good girl, and has helped a great deal. rago as - 541 During this business, Fritsi has been at first delighted by the piece of sausage, has dropped down from his sitting up position, his ears cocked up and his tail wagging happily. But just as he is about to wolf down the sausage, a horrid thought crosses his mind. This apparently tasty morsel looks suspiciously like the toy sausage he got fooled by earlier in the day. He makes a grimace and lets the piece of sausage lie on the floor. He regards it with the gravest suspicion. He cocks his head first on one side and then on the other. He shifts his weight from one side to the other. He sniffs at it; it smells good. He is about to attack it again when he remembers once more and makes the same grimace. He walks around it and looks at it from various sides. But his hunger and sense of smell gradually win the upper hand and he picks it up w1 th his teeth and carries it, waddling, over to one corner. He begins to chew on it, hesitantly, prepared for the worst, but as he chews he realizes that this time it's all right, and wolfs down the last bits with an ecstatic expression on his face and dashes back to Magda's chair and sits up at once and yelps just as Papa has finished and Magda replies to him. PAPA "That is good, Magda, very good. I am glad to hear that you have helped Mama. And when you get to be a big girl, and study very hard at the University -perhaps you will even be able to go to other universities, too -- Berlin, Heidelberg, maybe even at Koenigaberg -would you like maybe to go to East Prussia, perhaps? Achi Such good times I had as a students And girls should be educated, too -- bright, intelligent, good girls like you, Magda, anyway. Magda has dropped the piece of sausage and is paying attention to her father; she is delighted by the prospect he holds out; she claps her hands in joy and exclaims: rage as - 542 MAGDA "oh, how fine, Vati How wonderful! oh, yes, Vatil I should love to go to East Prussia. I will study very hard and be a good girl." PAPA (indulgently and fondly) "of course you will, of course you will!" MAMA (nico but she wants to get Hagda out of the way to have a talk with Papa) "so, Magdal And now you have finished, night wahr? And so to bed with you! Kiss Vati good night and run along and I will go up with you and tuck you in and listen to you saying your prayers. Lots of sleep you must have if you are going to be a big girl and go to the university. And tomorrow you must be up early to march in the holy procession to the Cathedrall Magda hastily snitches another piece of sausage for Fritsi. She is unobserved because Papa and Mema are wiping their mouths with their napkins. You can have comical napkin rings, if you want more theater in this, and funny salt shakers, etc. They push back their chairs. Magda drops the second piece of sausage as she pushes back her chair and goes to kiss her father good night, He pats her, then as she leaves the room, he reaches in his pocket and pulls out a Meerschaum pipe which he lights up and sits there, smoking, as the scene fades out. Mama and Magda leave, hand in hand, Fritsi following. He is happily chewing away at the sausage. Just as he follows Mama and Magda out of the room, he burps and a comic-guilty expression comes over his face as the scene fades out. It fades back in on the same scene as before except that 543 the table has been cleared and a doctor is sitting at the place opposite where Magda sat before. Papa and Mema are in the same places as previously. They are at first loath to believe what he tells them, but he is sure of himself and they must accept his diagnosis. Their reaction to his report is one of regret and some moral shock, but they are not pharisaical, being rather concerned almost altogether with the unhappy predicament of Liesl and the means of sparing Magda knowledge of what has occurred. MAMA (she doesn't want to admit it) "But Herr Doktor, are you sure? Liesl has always been such a good girl. The doctor is identified by the stethoscope which he is putting back into his little black bag on his lap; he is a 'type', a middle class doctor, with close-cropped fair hair, a paunch, a gates-ajar collar, a too-elaborate stick-pin in his fore-in-hand tie, a watch chair looped across his waistcoat with a doctor's insignia of the staff of Meroury hanging from it and a clinical thermometer sticking out of an upper waistcoat pocket. He speaks wi th understanding of the family's predicament and he is not callous as to Liesl, but he doesn't take either consideration too seriously; his attitude is that girls will be girls and nature will take its course and it doesn't pay to be too much upset by such things. DOCTOR "Sure? Of course I am sure. Your little house maid is going to have a baby. There can be no doubt. In about 5 or 6 months, I should think. 'Good Girl?' Well, well, very likely. But these 544 DOCTOR (continuing) peasant girls, you know -- they go home to their villages in the mountains for a vacation and poof! the first thing you know they are in love and there is a baby on the way." Papa holds out a box of cigars; the doctor takes one. Papa fills a liqueur glass with Schnapa in front of the doctor. The doctor snips off the end of the cigar and lights it. After a puff or two (all this shown by closeups of glass, bottle, cigarbox, cigar, scissors snipping end, etc.) he exhales rings of smoke, then raises his glass, bows toward Papa and Mama and says: DOCTOR "Zum Wohl Your health!" He drinks down the glass at a single draught, burps slightly exactly as Fritzi did over the sausage, pats his mouth with his handkerchief, and leans back in his chair. MAMA (she sympathizes with Liesl) "Poor girl1 But what am I to do?" PAPA (puffing on his pipe) "It's certain we can't have her have her baby here. There is Magda to consider." MAMA "And yet I can't just send her away. That wouldn't be right. She must have proper care. Why, she has been like a daughter to me!" 545 PAPA (correcting her kindly but definitely) "Now then, Friedal Not quitel After all no daughter of ours would have a baby without having a husband first (he is a little - but only a little - annoyed n th his wife for even obliquely implying such a thing) MAMA (it had never entered her head that such a comparison was possible) "ottol of course not! Whoever thought of such a thing! It was only a way of speaking!" DOCTOR (He smoothes over this exchange) "No, no, of course not, of course noti No, it is these peasant girls -- that and this immoral Republic of ours. I tell you, one bright day our Fuehrer will take power and then you will seel" It now becomes apparent -- or probably this should have been shown in the first shot of the doctor -- that he is wearing a nasi party badge in his button hole. DOCTOR "Then not only the good little girls, but also the peasant girls will be protected against such things." (Here he is struck by an idea) Listeni I have itl We will solve your problem even if we cannot solve Liel's -- if you are willing to spend a little money for her sake?" MAMA & PAPA (together) "Yes, of course, if it is not too much." 546 DOCTOR "Then this is what we will do. We will send Liesl back to her village in the mountains, The third-class fare is not too expensive. You can tell her it is because of Magda. She will understand. And you can give her a little something as a present, maybe, and if you like you can even tell her she can have her job back later, if she can find a way to have her baby taken care of." (His voice changes to a bluffer, heartier tone) "But then Probably she will not want to come back. Probably her boy friend in the village will be delighted that she is going to have a baby and will marry her and that will be the last you will see of your Liesl." He takes out an old-fashioned turnip watch -- closeup of same, showing 7 o'clock -- and the clock on the wall strikes 7 and the doctor puts his watch back in his pocket, pushes back his chair, bows to Papa and Mama and leaves with his bag, saying, during this business : DOCTOR "Achi Seven o'clock already. And little Hans Hasenpfeffer has measles and I am due there to see him. I must go. Thank you, Herr Huemer. Auf Wiedersehen, gnaedige Frau, auf Wiederschen. Gute Nacht, gute Nacht!" SCENE 4 The scene fades out and into a church procession a la the picture for the Ave Maria in Fantasia, except that the procession is seen to consist of little girls bearing the lights; they are led by two nuns in robes. They pass along a Munich street, flanked by old buildings. Devout crowds stand with bared, bowed heads and in silence as the procession passes. Music like the Ave Maria -I don't suppose you want to use the same thing, exactly -- which 547 gradually merges, toward the end, into organ music as the procession passes through the great doors of a cathedral. Use the Munich Dom if you can easily find a picture of the front of it. Some National Geographic ought to have it. If not, any typical Gothic cathedral will do. During this, the Voice speake: NARRATOR "Yes, this is what life was like in the Bad old Days "more ironically overstreased than in last use of this phrase) of the Republic, too. Times were hard - bitterly hard - and there was confusion and uncertainty, and there was some open immorality, too. Also, little girls dreamed of growing up to study in Universities and playing Mendelssohn's concerto on their violins and peasant girls - and not only peasant girls - sometimes had babies before they were married and nice little girls like Magda were shielded from such things as much as it was possible for their parents to do so. But people were bitter - and bitterly divided among thomselves - and they were confused and didn't know what to do and the Republic was weak. That was its greatest sin, It was weak. And so it fell. It was stabbed in the back, Partly by its openly avowed enemies from wi thout, and partly by people who paid lip service to it within and used the very privileges which it granted them to destroy it. And so the nasis came to power and set about creating their New Order, their Brave New World, within Germany as the first step in forcing it on all the rest of the world too. Magda and her father and mother were happy. They had ended by becoming nasis, Papa and Mama, and now Hitler has come to power and everything is going to be all right. Even the sun seems to shine brighter in the park this Sunday - it is what the nasis call "Hitler weather" just as the old Germany used to call it "Kaiser weather" and just as future generations will call it some other kind of weather - and the other people who are taking their Sunday walks in the park are happy and hopeful, too - although some of those who are not walking in the park are neither happy nor hopeful, because for them happiness and hope have died; but everybody tries not to think about these other people - and many even approve of what is happening to them, "You can't make an omelette without breaking eggs," they say, sagely -- meaning of course, heads, not eggs. They say it sagely as long as it is other people's heads that are being broken, that is. When their own heads get groken, they say something else, of course - if they can say anything. But then it is too late. Then it doesn't matter any more what they say. 548 NARRATOR (continued) But for these people in the park on Sunday that is all something that lies far ahead. Most of them don't have any suspicion that it is going to happen at all -- although Hitler himself has said often enough that it will happen. SCENE 5 PROCESSION During this, the religious expression entering the Cathedral and the holy music fade out and into a typical public park scene on a bright, lovely Sunday afternoon, with people dressed in their Sunday best strolling along the paths and the animals playing about, being coaxed and fed by the people. First a general shot, which narrows down as the camera trucks to a closeup of Magda and Pa and Ma at the edge of a pond watching and feeding the ducks. During this scene, the camera concentrates on the birds and animals (including Fritsi), showing for the most part only outstretched hands coaxing and feeding, etc., to save human animation. The family looks happy and hopeful and their voices indicate the same feeling. As the scene fades in, pastoral music, with agreeable animal sounds. Magda is crouched down at the edge of the pond, holding out bread to the ducks. The ducks are circling around in the water; first a drake, then several ducklings, in single file; they want the bread, but they are a little - though not very - apprehensive of Fritzi, who sits beside Magda, eager and interested but friendly, wagging his tail. Gradually the ducks come nearer; then they file past, as quickly as possible, in the same order, each snatching a morsel from Magda's hand and then heading back out into the pond again. A perceptible instant after the next-to-the-last duck