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187
UNITED STATES FLEET
March 12, 1942
Dear Mr. Secretary:
I have your very kind note of March 10th
and wish to thank you for writing it.
It is good to know that people with responsibilities like yours have confidence in my capacity - I
shall need the confidence in the months of rough
going that lie ahead.
With sincere appreciation - and with all good
vishes, I am
Sincerely yours,
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
188
March 10, 1942
Dear Admiral King:
21
This is just to send you my
heartiest congratulations on your
new appointment.
Every time you are assigned to
greater and more responsible duties
It brings real satisfaction to those
who know you and admire you as I do.
I truly believe that the country
will have reason to congratulate itself
on your appointment.
Sincerely,
(Signed) Henry Morgenthall, Jr.
Admiral Ernest J. King,
Navy Department,
Washington, D. c.
FK/egk
By Messenger
189
V
THE COMMANDANT OF THE UNITED STATES COAST GUARD
WASHINGTON
March 12, 1942
My dear Mr. Secretary:
I warmly appreciate your congratulations
and the sentiments which went with them. While
I personally feel honored upon the nomination,
I can not escape the feeling that it is just
as much a tribute to the Service which was
built up to such high standards while under
your jurisdiction. I am happy in the thought
of your continued interest.
Sincerely yours,
annaushi
Honorable Henry Morgenthau, Jr.,
Secretary of The Treasury,
Washington, D.C.
190
Waesche ToBe
Vice Admiral
March 11, 1942.
Rear Admiral Russell R.
Waesche, commandant of the
Coast Guard, was nominated today
by President Roosevelt for promo-
tion to the rank of vice admiral in
the Coast Guard. which now is
operating as part of the Navy.
The President also nominated
Coast Guard Captains Stanley V.
Parker and Edward n Jones to be
rear admirals
Capt. Freeland A Daubin and
Ky dear Admiral Waesche:
Capt. Robert M. Griffin were non
inated for promotion to the or
It is always a pleasure when someone once
associated with the Treasury Department goes
forward to new honors. As you know. I have not
of rear admiral in the Navy.
lost my interest in the Coast Guard, and I therefore was very wach pleased to hear of your pro-
action to the rank of Vice Admiral. I want to
congratulate you upon it, and upon your conduct
of your difficult office during these trying days.
Sincerely,
(Signed) E. Morgenthau. Ja.
Vice Admiral R. R. Vaceche,
Commandant of the United States Coast Guard,
Washington, D. C.
n.m.c.
By
GEF/dbs
Veach 3:50
190
Waesche ToBe
Vice Admiral
March 11, 1942.
Rear Admiral Russell R.
Waesche, commandant of the
Coast Guard, was nominated today
by President Roosevelt for promo-
tion to the rank of vice admiral in
the Coast Guard. which now is
operating as part of the Navy.
The President also nominated
Coast Guard Captains Stanley V.
Parker and Edward n Jones to be
rear admirals
Capt. Freeland A Daubin and
Ky dear Admiral Vaesche:
Capt Robert M. Griffin vere nom
It is always a pleasure when someone once
associated with the Treasury Department goes
inated for promotion to the on
of rear admiral in the Navy.
forward to new honors. As you know, I have not
lost my interest in the Coast Guard, and I therefore was very much pleased to hear of your pro-
action to the rank of Vice Admiral. I want to
congratulate you upon it. and upon your conduct
of your difficult office during these trying days.
Sincerely,
(Signed) E. Morgenthau, Jue
Vice Admiral R. R. Vaccahe,
Commandant of the United States Coast Guard,
Washington, D. C.
n.m.c.
By Messenger
GEF/dbs
Veach 3:50
191
MAR 12 1942
Dear Loon:
I read your letter of March 2. 1942, with great interest.
The letter reached us the day before I appeared before the
Vays and Neans Committee to present the Treasury tax program.
Like you, I as disturbed, and have been disturbed for a
long time, by the threat of inflation. I gather that you think
our recently submitted program which, of course, was designed
to carry into effect the President's Budget Message of
January 6, 1943, is inoufficient and needs to be supplemented
by a drastic compulsory saving program to yield 5 OF 6 addi-
tional billions of dollars. This would mean a total program
of approximately 14 or 15 billions of dollars, including additions to social security.
Since we have already submitted our suggestions to Congress
it is scareely feasible for the Treasury a few days later to
present a new and different program. It night be helpful, however,
if you would annear before the Vaye and Means Committee and give
the Committee the bonefit of your ideas on the subject of inflation and the need of vigerous measures for its prevention.
Sincerely yours,
(Signed) N. Morgentham. in
Secretary of the Treasury
Honorable Leon Henderson,
Administrator,
Office of Price Mainistration,
m.c.
Washington, D. 0.
By Messenger Teach 3:50
file to champson
REPIARE
3/10/42
192
March 12, 1942
Dear Bob:
Thank you for your letter of
March 10th.
Your cooperation in receiving
the men from the Fisher Body plant
at Pontiac is much appreciated and
I am delighted to know that they are
to have a share in the defense work.
Yours sincerely,
(Signed) Henry
Hon. Robert P. Patterson,
Under Secretary of War,
War Department.
filonm C.
By
Messenger Veach 3:50
193
THE UNDER SECRETARY OF WAR
WASHINGTON
phank
for
1st
3
(153)
March 10th, 1942.
Honorable Henry Morgenthau,Jr.
Department of the Treasury,
Washington, D. C.
Dear Henry:
The men from the Fisher Body plant at
Pontiac called on me yesterday.
You will be pleased to know that the
mounts for the 90 mm. antiaircraft gun are to be
made at this plant. The announcement will be made
today or tomorrow. I cannot say whether this work
will enable the plant to work at full capacity, but
I am sure that it will be a large operation and that
it will afford employment to a considerable extent.
With best regards, I am
Sincerely yours,
RLIPP#
Robert P. Patterson,
Under Secretary of War.
rpp:lm
lets Go
U.S.A.
CONFIDENTIAL
194
MAK 12 1942
Dear Rex:
This will acknowledge receipt of your letter of
March 3, 1942, enclosing copy of proposal dated February 20, 1942, from the Commandant of the Tenth Naval
District at San Juan, Puerto Rico, to the Secretary of
the Navy, contemplating the erection of a prophylaxis
station for use of Army and Navy personnel on a site in
Puerto Rico believed to be under the jurisdiction of
the United States Treasury Department.
The property in question was originally held by the
Office of the Supervising Architect of the Treasury Department. This organization subsequently became the
Public Buildings Branch of the Procurement Division and
later the Public Buildings Administration of the Federal
Works Agency, and is now in the process of being set up
under the new National Housing Agency. Negotiations
leading to the transfer of the lot in question should be
conducted with this agency by the Navy Department. Mr.
John B. Blandford has recently been designated Administrator.
In an effort to pave the way for expeditious
handling of this matter, I have had the proper personnel
in Mr. Blandford's office approached and acquainted with
the purpose outlined by Vr. Hoover, and an pleased to
inform you that I have been iven assurance that the property in question will be made available to the Navy Department promptly upon receipt of an official request
from that Department. In order to expedite further these
negotiations, I have in a communication today acquainted
Secretary Knox with the procedure to be followed for
acquiring the property, furnishing him with a copy of
your letter and Mr. Hoover's memorandum, the original of
which should already be in the Navy Department.
Sincerely yours,
(Signed) E. Morgontham. Jr.
Honorable R. G. Tugwell,
Governor of Puerto Rico,
San Juan, Puerto Rico.
CSB:em/10
3-11-42
195
LA PORTALEZA
SAN JUAN, PUERTO RICO
OFFICE OF THE
GOVERNOR
March 3, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. c.
Dear Mr. Morgenthaus
I an enclosing memorandum from Head-
quarters of the 10th Naval District, in
connection with a transfer of a parcel of
land from the jurisdiction of the Treasury
Department to the Navy Department for the
purpose of construction of a prophylaxis station for use by the Army and Navy personnel.
The need for such a station is extremely
urgent and the Insular Government is doing
everything possible to begin construction of
the station as soon as the needed parcel of
land is transferred to the Navy.
May we have your cooperation in obtaining
an early decision on this matter.
Sincerely yours,
(signed)
R. G. Tugwell
R. G. Tugwell
Governor
Henry:
Thanks for anything you can do on this. I's told
many a sailor will be saved from these diseases if
we hurry.
Rex T.
196
HEADQUARTERS
TENTH NAVAL DISTRICT
SAN JUAN, PUERTO RICO
ND10/N1-13
/ed
( 1842 )
February 20, 1942.
From:
The Commandant.
To :
The Secretary Of The Navy.
Via :
(1) The Chief of the Bureau of Medicine and Surgery.
(2) The Chief of the Bureau of Yards and Docks.
Subject:
Transfer of parcel of land from jurisdiction of the
Treasury Department to the Nevy Department.
Enclosures:
(A) Description of subject parcel of land in municipality of San Juan.
(B) White print of plan of Federal Property Lot
located in San Juan, Puerto Rico.
(c) Copy of plan of Proposed Army-Navy First Aid
Station, San Juan, Puerto Rico.
Enclosure (B) 18 a plan of a lot located in San Juan,
Puerto Rico, lying between Recinto Bur and Comercio Streets, belonging to the United States and under the jurisdiction of the United
States Treasury Department. This lot is now entirely unoccupied and
unused except as a parking lot for automobiles of Navy personnel and
1.
others.
2.
There is shown by diagonal red lines on enclosure (B)
the parcel which it is desired to have transferred to the jurisdic-
tion of the Navy Department, and enclosure (A) is A description of
this parcel shown in diagonal red lines.
Enclosure (c) shows the front elevation and floor plan
of the proposed first aid station to be erected on the parcel referred
3.
to in paragraph 2 hereof.
4.
The materials and equipment for this first aid station
have been provided for by the Governor of Puerto Rico, and arrangements
have been made whereby the labor for construction will be furnished by
the York Projects Administration. The maintenance and operation of the
processed station will be under personnel of the Navy. The station is to
be available to both Army and Navy personnel.
197
HEADQUARTERS
TENTH NAVAL DISTRICT
SAN JUAN, PUERTO RICO
ND10/N1-13
/ed
( 1842 )
February 20, 1942.
Subject:
Transfer of parcel of land from jurisdiction of
the Treasury Department to the Navy Department.
Due to the high rate of venereal infection in the
San Junn area, the need for a station of the sort proposed as
5.
a
convenient place for prophylaxis, 1e regarded as urgently needed
for the protection of the military and naval forces in the San Juan
area.
It is recommended that the transfer from the Treasury
Department to the Navy Department of the parcel referred to in paragraph 2 hereof be obtained, or that said parcel be otherwise made
available to the Navy Department for the purpose of the proposed
6.
first aid station.
J. H. HOOVER
198
MAR 12 1942
Dear Frank:
I am attaching copy of letter received from Rex
Tugwell, enclosing copy of communication addressed
to you by the Commandant of the Tenth Naval District,
requesting the release of a certain piece of unimproved property in Puerto Rico for use of the Navy
Department in constructing a prophylaxis station for
Army and Navy personnel.
From this correspondence you will note that the
Commandant of the Tenth Naval District is of the
opinion that the property in question is held by the
Treasury Department, when, in fact, its release will
have to be arranged for through Mr. John B. Blandford,
Administrator of the newly created National Housing
Agency.
I am bringing this matter to your attention in
order that you might have expedited the request from
the Navy Department to Mr. Blandford, for ft is
apparent that the original of Mr. Hoover's communication is now before your Department for consideration.
Sincerely,
(Signed) Henry
Honorable Frank Knox,
Secretary of the Navy.
n.m.c
(tve Messenger
CSB:em:ic
9:10
Treasury Department
Division of Monetary Research
Date
199
March 11, 1942
XX
Secretary Morgenthau
To:
From:
Mr. White
HDW
(1) Attached is a letter for your signature
informing Under Secretary of State Welles
that this Department is willing to organize 8 small mission to Honduras.
(2) You will note that the letter indicates
that you will approach the Farm Credit
Administration and the Board of Governors
of the Federal Reserve System to suggest
that they each name a member to the
mission.
(3) In order to solve the problem of staff
for this purpose, we would not want to
send this mission to Honduras until the
Cuban Mission has largely completed its
work.
MR. WHITE
Branch 2058 - Room 2141
200
MAR 12 1942
My dear Mr. Welless
Reference is made to your letter of March 7,
1942, informing - that the President of Honduras
has recently been authorised by the Honduran
Congress to obtain a loan from the United States
which would, in part, be used for the establishment
of a National Bank. I note also that it is the
belief of your Department that before there is any
undertaking to assist the Honduran Government in
the establishment of such a bank, the banking
needs of Honduras should be carefully studied
by qualified experts and you therefore inquire
whether this Department could undertake, at its
earliest convenience, the sending of a small
technical mission to Honduras to make such a study.
This Department, in the interest of cooperating
in this Government's policy of friendly assistance
to other of the American Republics, will try to
arrange & small mission for the above purpose.
Following your suggestion, an effort will be made
to include in this mission an expert from the Farm
Credit Administration. He shall also inquire into
the possibility of having someone from the staff
of the Board of Governors of the Federal Reserve
System added to the mission.
Sincerely yours,
(Signed) E. Morganthan. Jr.
Secretary of the Treasury.
Honorable Summer Helles,
Acting Secretary of State,
tr.white
By Messenger3:50
each
Please return to Secretary's office
FAS reah
3/11/42
201
STATE
DEPARTMENT OF STATE
WASHINGTON
reply refer to
March 7. 1942
My dear Mr. Secretary:
The President of Honduras has recently been authorized
by the Congress of that country to obtain a loan of
$15,000,000. The Minister of Honduras at Washington has
indicated to this Department that the principal purposes
for which this loan is desired, in the order of their
urgency, are the construction of the Honduran section of
the Pan American Highway, the establishment of a National
Bank and the development of a national plan of public
roads. A credit for highway construction 18 already being
considered by the Export Import Bank.
With respect to the establishment of a National Bank
the Government of Honduras has indicated that it may wish
to make such a bank the sole bank of issue and to have it
devote itself to both general banking operations and the
extension of agricultural mortgage credits. At the present
time there are but two banks in Honduras both of which are
privately
PORDEFENSE
The Honorable
BUY
UNITED
STATES
Henry Morgenthau, Jr.,
Secretary of the Treasury.
202
-2-
privately owned and possess the note issue privilege.
It is the belief of this Department that before
there is any undertaking to assist the Honduran Government in the establishment of a National Bank the banking
situation and needs of Honduras should be carefully
studied by qualified experts. I would accordingly be
grateful if your Department could undertake at its
earliest convenience the sending of a small technical
mission to Honduras to make such a study. In view of the
emphasis which the Government of Honduras has placed on
the agricultural credit functions of the proposed bank the
Treasury Department may wish to consider the advisability
of requesting an expert from one of the agricultural credit
agencies of this Government to accompany the mission.
Sincerely your
D
Secretary
Delhy
203
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON D.C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments of British Air Commission
who enclose Statement No. 24 - Aircraft Despatched
- for week ended March 10, 1942.
The non. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
March 12, 1942.
204
MOST SECRET
STATEMENT NO. 24
AIRCRAFT DESPATCHED FROM THE UNITED STATES
DURING WEEK ENDED
MARCH 10
DESTINATION
cobra
ASSEMBLY POINT
U.K.
U.K.
Russia
Basrah
BY SEA
BY AIR
FLIGHT DELIVERE
FOR USE IN CAN.
63
SING
U.K.
U.K.
U.K.
U.K.
4
5
ton III
IDATED
grator II
2
"ISS
tybank
Canada
2
BARWAN
:more
Middle East
Port Sudan
India
Bombay
11
RUN
tlet II
9
CHEED
U.K.
U.K.
turn Bomber
U.K.
Canada en route
8
1
turn I
H AMERICAN
tang
U.K.
U.K.
U.K.
U.K.
4
THE
TOTALS
Brite sh Air Commission
Mark 12th, 1942.
1
Stimson 0 49
105
2
3
205
Photostat to
mr. White
3/13/92--
Willard Hotel,
Washington, D.C.
March 12, 1942.
Dear Mr. Secretary,
When you saw the Ambassador and myself
recently you were good enough to express your continuing
interest in proposals which affected our dollar position.
I have not thought it right to trouble you with minor
matters in this connection, but we are now putting
forward to OLLA a request for their acceptance under
lend-lease of our sugar purchases in the Caribbean.
The sum involved is very substantial and may amount
to $51 millions. It is possible that shipping
difficulties may compel some reduction in this
programme, but in any case the sum involved is not likely
to be less than say $33 millions. Our proposals
are supported by the Department of Agriculture.
proceeds.
I will let you know how the matter
Yours sincerely,
Hhillips
The Honourable
Henry Morgenthau, Jr.
Secretary of the Treasury,
Washington,
D. C.
. Copy of Mr. Brand's letter of March 12 to Mr. Stettinius
is attached.
206
March 12, 1942
Mr. E. R. Stettinius, Jr.,
Lend-Lease Administrator,
515 22nd Street, N. W.,
Washington, D. C.
Procurement of Caribbean Sugar under Land-Lease
Dear Mr. Stettinius:
Towards the end of last year, during the visit of Sir William
Rook, the Director of the Ministry of Food's Sugar Division, a series
of discussions were held in Washington between representatives of the
State Department, the Surplus Marketing Administration, the Agricultural
Adjustment Administration, the Office of Foreign Agricultural Relations,
the Office of Production Management, and British and Canadian representatives. These discussions were concerned with the procurement of Caribbean sugar for the United States, the United Kingdom and Canada, and any
other allied countries whose requirements might have to be net out of
Caribbean supplies. After a survey of the supply and shipping possibilities, as well as of the requirements of the United Kingdom and Canada
for sugar (exclusive of molasses) in non-British Caribbean countries,
agreement was reached concerning the machinery of procurement and allocation as between the different countries whose requirements have to
be net.
In regard to San Domingo and Haiti, it was agreed that the
British Ministry of Food should immediately proceed to negotiate for
the purchase of the entire 1942 crop of those two countries, estimated
at between 400,000 and 450,000 tons for San Domingo and 20,000 to 25,000
tons for Haiti.
In regard to Cuba, it was agreed that the United States government, through the Defence Supplies Corporation, should negotiate for
the purchase of the entire 1942 Cuban crop, and that this was subsequently to be divided between the United States, the United Kingdom and
Canada. After making allowance for inevitable reductions, owing to a
tight supply position, and for the procurement by the United Kingdom of
the entire San Domingo and Haiti crop, the requirements for Cuban sugar
of the United Kingdom and Canada (which oo-ordinates its purchases with
207
2r. E. R. Stettinius, Jr.
March 12, 1942
those of the United Kingdom) were stated at 400,000 long tons. It was
agreed that to this quantity there should be added the quantities of
sugar which had been or could be shipped from the United Kingdom to
Russia in the months prior to the making of the new sugar crop in Cuba.
At present these shipments amount to approximately 55,000 long tons, thus
making the total British requirements for Cuban sugar approximately
455,000 long tons. According to Surplus Marketing Administration letter
No. 301 of March 5, 1942, this quantity is considered available for the
United Kingdom.
Since this agreement was reached, contracts have been signed,
both by the Defence Supplies Corporation for the entire 1942 Cuban sugar
crop, as well as by the British Ministry of Food for the purchase of the
entire 1942 crop from San Domingo and Haiti, the price in each case being
2.65 cents per 1b.
The above mentioned discussions coincided with the Congressional
hearings on the Second Lend-Lease Appropriation Bill. There was at that
time considerable uncertainty about the Lend-Leasing of foodstuffs procured in countries other than the United States. Since then, however, the
Department of Agriculture has recommended in a number of instances the
procurement of foodstuffs from countries other than the United States,
and Lend-Lease requisitions covering such procurement have been approved
by the Office of Land-Lease Administration.
As you are well aware, the British dollar position has become
particularly difficult since the fall of Malaya, and we are anxious to
obtain approval for the procurement of Caribbean sugar by the United
Kingdom under Lend-Lease. The Department of Agriculture is prepared to
recommend that British requirements for Caribbean sugar should be brought
under Lend-Lease, and provision has been made accordingly in the estimates
recently submitted for the Third Lend-Lease Appropriations which have now
been passed by Congress.
The meximum total amounts of money involved would be approximately as follows:
Cuba
455,000 tons $27,000,000
San Domingo 400,000 - 450,000 tons $20,000,000 to $24,000,000
Haiti
20,000 - 25,000 tons $ 1,200,000 to $ 1,500,000
We are accordingly filing a programme for a total amount of
930,000 tons of Caribbean sugar (at an estimated cost of $51,500,000),
representing the portion of Cuban sugar available for the United Kingdom,
plus the 1942 San Domingo and Haiti sugar crop bought by British Ministry
of Food in agreement with the American authorities.
It is, however, impossible to state how much of these maximum
quantities and dollar amounts would, in the outcome, in fact, be involved out
in British Land-Lease requisitions. Between 100,000 and 150,000 tons
208
-3-
Mr. E. R. Stettinius, Jr.
March 12, 1942
of the 1942 Cuban crop are provisionally ear-marked for Canada and any
supplies which go to Canada will involve a reduction in the total of
British Lend-Lease requisitions. Furthermore, in view of present rapid
changes in shipping possibilities, there will have to be continuous reallocation of sugar supplies. As far as Cuban sugar is concerned, the
present shipping situation is such that we do not think it would be fair
for us to ask for more than 250,000 tons at the present time, Arrangements are at present being made for the shipment of Australian, and
possibly Fiji, sugar to the United States of America. This sugar will
be consigned to the Federal Surplus Commodities Corporation, but its
ultimate destination and, therefore, any consequential re-allocation of
Caribbean supplies remain to be arranged. The necessity to meet Russian
requirements may also involve changes in the original allocation of
Caribbean sugar.
No would, therefore, propose, if you are agreeable, to follow
up the programme with requisitions for:
255,000 tons Cuban sugar
450,000 tons San Dominican sugar
25,000 tons Haitian sugar
These requisitions could then be handled in such the same way as the
requisition for Icelandic fish and fish products, that is, payments would
be made against vouchers in respect of actual oargoes of Cuban, San
Dominican or Haitian sugars consigned to the United Kingdom. There would,
no doubt, be various technical matters concerning payment instructions,
documentation, outturn reports and settlement of final differences which
would require discussion between the appropriate officials.
We should, of course, be very happy to discuss any points with
you.
Yours sincerely,
R. H. Brand
HEAD, BRITISH FOOD MISSION
RMB 1 p
209
PARAPHRASE OF TELEGRAM SENT
American High Commissioner, Manila, (Fort Mills),
Philippine Islands.
DATE: March 12, 1942, 1 p.m.
TO:
NO.: 30.
The following is from the Secretary of the Treasury
for Mr. Bayre.
We are in receipt of your communications of January 21
and January 27, also supporting data.
WELLES
Asting
(FL)
210
C
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
March 12, 1942
FD 855.51/843
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
encloses copies of e paraphrase of telegram no. 155,
dated March 11, 1942, from the American Consulate,
Algiers, Algeria, concerning a shipment of gold to
France.
Telegram No. 148 was sent to the Secretary of the
Treasury in this Department's letter of March 9. 1942.
Enclosure:
From Consulate, Algiers,
no. 155, March 11, 1942.
copy:kma
0
211
0
P
Y
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Consulate, Algiers, Algeria
DATE:
March 11, 1942, 4 p.m.
NO.: 155
Reference is made to telegram no. 148, sent by the
Consulate on the 9th of March, 1942.
A plane to France today lifted five hundred kilograms
of gold.
COLE
copy:loma
212
March 12, 1942
Mr. Livesey
3. W. Bell
will you please send the following cable to the American Commissioner,
New Delhi, India, as the reply to his No. 58 of February 28, 1 p.m.
"From Treasury.
The contents of year No. 58, February 25, 1 p.m., have been
passed on to the appropriate British official is Washington, who
is communicating with Lender. You will be atvised of any further
developments.
FD:da:3/12/42
213
C
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FD 102.1/6420
March 12, 1942
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
copies of telegram No. 188, dated March 12, 1942, from
the American Consulate, Bombay, India.
Telegram No. 68 to the American Consul regarding the
procedure for the negotiation of checks drawn on the
Treasurer of the United States was transmitted to the
Secretary of the Treasury in this Department's letter of
March 2, 1942.
Enclosure:
From Consulate, Bombay,
No. 188, March 12, 1942.
Copy :2-13-42
214
GRAY
CB
Bombay
Dated March 12, 1942
Rec'd 1:55 p.m.
Secretary of State,
Washington.
188, March 12, 5 p.m.
Department's 68 to Calcutta.
Total amount of United States Treasury checks
cashed by National City Bank of New York at Bombay
and delivered to this Consulate is $2,023.03. Bombay
branch of National City Bank of New York desires
confirmation when payment is effected. Arrange in this,
and in future transactions, for the National City
Bank of New York at New York to advise its Bombay brench when
payment is effected. Inform Treasury.
DONOVAN
WSB
Copy:b 3-13-42
215
Rio de Janeiro
KD
This telegram must bE
paraphrosed before being
communicated to anyone
other than C. Governmental
agency. (BR)
Dated March 12, 1942
Rec'd. 8:28 c.m.,13th
Secretary of State,
Washington.
835, March 12, midnight.
The Bank of Brozil has refused the request of
the Enskilde Bank of Stockholm to authorize the
agents of Swedish ships in Santos to utilize
approximately $10,000 of the special account of the
Finnish Government with the Bank of Brazil (SEE my
telegram no. 670, March 3, 6 P. m.) to supply Swedish
ships at Santos.
It appears that the Swedish Bank is trying to
purchase Brazilian products for Finland.
INFORM TREASURY.
CAFFERY
RDS
=
216
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 12, 1942
TO
Secretary Morgenthau
CONFIDENTIAL
FROM Mr. Dietrich
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£32,000
& 2,000
Open market sterling remained at 4.03-3/4, with no reported transactions.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
11-7/8% discount
Argentine peso (free)
.2361
.0516
.5775
.2064
.5295
.2820
Brazilian milreis (free)
Colombian peso
Mexican peso
Uruguayan peso (free)
Venezuelan bolivar
Cuban peso
7/32% premium
There were no gold transactions consummated by us today.
No new gold engagements were reported.
In London, spot and forward silver remained at 23-1/2a, equivalent to
42.67
The Treasury's purchase price for foreign silver was unchanged at 35$
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/80.
We made no purchases of silver today.
217
COPY NO
13
BRITISH MOST SECRET
(U.S. SECRET).
OPTEL NO.90.
Following is a supplementary resume of operational events
covering the period 5th-12th March.
1. NAVAL.
TIRPITZ which left Trondheim with almost certain intention of
attacking a convoy to Russia put in to Narvik after the attack by our naval
aircraft. No attack was made on the convoy which arrived safely. An
Italian convoy of four ships reached Libya. About 40 U-boats were operating
during the week including those on outward and homeward passage the main
concentration was still in the Western Atlantic and Caribbean Sea. Others
were off Freetown and there was renewed activity in the Hebrides-RockallIceland (c) area. Weekly shipping losses which include Dutch Ships scuttled
at Java to avoid capture were heavy. Shipping losses for February so far
reported were 83 ships totalling about 471,000 tons. About half this total
was British tonnage. 28 of the ships were tankers, 11 being British. Most
of the casualties occurred on the Atlantic seaboard of North America and in
the West Indies and were due to Submarine attack. Losses in the Far East
and Pacific were mainly caused by aircraft and surface craft during the final
attacks on Singapore. Four ships were sunk by Japanese Submarines in the
Indian Ocean. During the week ending 11th March 887 ships were convoyed.
Imports into Great Britain amounted to 627,000 tons including 137,000 tons of
oil.
2. MILITARY
LIBYA. There are indications that the enemy intends to
organise a defensive position based on a line running from Vadi Derna to
Mekili.
BURMA During the fighting in the Pegu area our troops
inflicted severe casualties. Part of our force that was surrounded only
succeeded in breaking out after repeated attempts. One Division of the
Chinese fifth Army is about to move into the Toungoo-Pyu area and a Division
of the sixth Army has almost completed its concentration in the northern area.
These Divisions are about equal in strength to a British Brigade group in
France. Movement of German troops to Russia continues but is presumably
counterbalanced by others returned for rest and refit although little evidence
of this received. Estimated strength still 27 German Divisions.
BALKANS No signs of imminent military move against Turkey.
German strength here unchanged.
RUSSIA. Russian position improved during the week. Their
severe pressure on many sectors, successfully maintained in spite withdraw of difficult
weather conditions, at a time when the Germans urgently need to
forces in preparation for the spring, is satisfactory feature.
3. AIR OPERATIONS
WESTERN FRONT. Large forces of night bombers were sent to
Essen where a total of 336 aircraft dropped 397 tons of H.E. and nearly
78,000 incendiaries. Some Lancasters took part for the first time. Fifteen
aircraft were lost.
LIBYA. Our fighters maintained offensive patrols over forward
areas and also provided protection for shipping. Enemy operations bombers were
mainly directed against our aerodromes for which purpose fighter were
largely used.
Our aerodromes were again repeatedly and heavily
Naval MALTA. aircraft from Malta and also Beauforts from Libya made
attacked. successful attacks on an isolated ship and a convoy on the Italy-Libya supply
route.
4
218
-
EXTRACTS FROM PHOTOGRAPHIC AND INTELLIGENCE REPORTS ON RESULTS OF AIR
ATTACKS ON ENEMY TERRITORY IN EUROPE
4.
PARIS. Eye witnesses report very heavy damage throughout
Renault Works except in one department and the adjacent Salmson Works gutted.
Severe criticism of German High Command by Nazi party authorities owing to
unprotected condition of factory. Majority of PARIS public express great
satisfaction and surprise that attack had not been made before.
KIEL. Photographs taken 2nd March show considerable repair
work in progress in GNEISENAU.
MANNHEIM. During one of the February 1942 raids a petrol
tanker barge exploded and sank, other barges were hit and several cranes
were badly damaged in the docks.
Copy No.
15
219
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 84
Information received up to 7 A.M., 12th March, 1942.
1. NAVAL
12th. One of H.M. Destroyers was damaged in collision off DUNGENESS.
Another of H.M. Destroyers escorting a convoy to RUSSIA has sustained ice damage.
The following ships have been reported lost by enemy action in FAR EAST:- One gun
boat, one armed trader, one boom defence vessel, five auxiliary minesweepers and
five M.L.'s.
On 7th a U.S. steamship of 4,600 tons was sunk by U-boat off CUBA and
on 11th a British steamship of 7,000 tons was sunk in FREETOWN area, passengers and
crem being landed, A Panamanian tanker of 10,000 tons has been damaged by gun fire
and torpedo in the CARIBBEAN but is now in port, whilst a Brazilian steamship of
5,000 tons has been sunk off the American Atlantic Coast.
2, MILITARY
BURMA. 17th Indian Division, 7th (U.K.) Armoured Brigade and 82nd
Indian Infantry Brigade are continuing their withdrawal up the RANGOON-PROME Road,
Formations are intact but heavy casualties have been sustained, Demolitions carried
out in RANGOON on 7th were extensive. A Chinese Division has arrived in the PYNAMO
YEDAS HE area and anti-tank, pioneer and engineer units have passed through MAYMYO
towards the south, the troops creating a very good impression. The final echelon
of a further Chinese Division is moving south from LASHIO.
FAR EAST. Air reconnaissance reports Japanese troops landing from
eleven transports at LAE (North East coast of NET GUINEA).
RUSSIA. The Russians are continuing to attack strongly at several
points North and East of SMOLENSK.
3. AIR OPERATIONS
WESTERN FRONT. During night 10th/11th 11 R.C.A.F. and 11 R.A.A.F. air-
craft took part. 1 R.C.A.F. and 1 R.A.A.F. aircraft missing.
LIBYA, 9th/10th, 7 Wellingtons attacked BENGHAZI Harbour obtaining 4
possible hit on a ship. 12 Blenheims and Hurricanes attacked a large concentration
of aircraft on MARTUBA landing ground.
NEW GUINEA. 8th/9th. PORT MORESBY was attacked by 11 heavy bombers,
the runway being damaged.
4. GERMANY
The following are recent indications of the drive to meet the labour
shortage in GERMANY,
220
-(a) Demands have been made on BELGIUM and FRANCE to provide between
them 600,000 additional workers for GERMANY,
(b) Youths may now start their labour service at the end of their
17th instead of 18th year,
(c) 200,000 schoolboys have been released from school before the
end of their school year for work in armament factories. Regulations dated 7th
February under which fines may be imposed for breach of discipline in factories
are part of the endeavour to get the fullest use of existing labour resources.
221
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 12, 1942.
Secretary Morgenthau
TO
Mr. Kamarck
FROM
Subject: Summary of Intelligence Reports.
Great Britain - Home Opinion
The British Home Intelligence report for the week ending
an increasingly questioning mood coupled with doubt as to the
worthwhileness of the struggle" are cropping un. What people
desire above everything else is an offensive attitude on the part
of the fighting forces, instead of continued retreat and defense.
March 2 states that morale is still low. "Disquieting signs of
The attitude of the Government toward India is being discussed more critically and widely than ever before. There is gen-
uine sympathy for Indian ascirations and demand for generous
action.
There is a feeling of disappointment over "America's inactivity'
despite intense public admiration for MacArthur. Working class
critics say: "Lend-Lease means that after the war we shall have
to work for America for nothing."
(C.O.I. Cable, March 10, 1942)
France - Home Opinion
Because of fear of the effect on French opinion of a break
between Vichy and Washington, and because of American pressure,
it is generally felt in France that Vichy is trying to avoid sending supplies to Rommel. (That is, it is fear of the French people's
reaction to a break with the U.S., and not the shipment of American
supplies to North Africa, which acts as a brake on Petain's col-
laboration with the Germans.)
(C.O.I., March 9, 1942)
Germany - Home Propaganda
German home propaganda takes the line that "the British Empire
18 being taken care of by Japan. Germany's only serious enemy is
Russia and when she is beaten, the rest will be easy, though not
of necessity short. America 18 too weak to help. Production in
America 18 inadequate to replace the huge losses and is propaganda
bluff." When propheaying the results of the coming spring
222
-
offensive, great caution 18 being displayed.
(C.O.I. Cable, March 9, 1942)
Other European Countries
(According to the available sources, there is a general feeling
in
European
countries
that the decisive crisis in the
war willmost
occur
this Spring.
)
(a) Italy
Mussolini's paper, the Gazetta del Popolo, writes: "Stalin
is ready to throw into the battle a formidable army and Germany
also is preparing its own army. In the two camps, the war factories
are
andof
night.
The sun of the Russian spring will see
the working
greatestday
battle
all times.
(FFC, Foreign Broadcast Monitoring
Service, March 7, 1942)
(b) Turkey
The official Turkish radio, broadcasting in Turkish to its
own people, summarizes the situation:
"Reports trickling out of Germany do not present a very bright
uance of Soviet resistance, is all-pervading.
"However, it is obvious now that everything depends on the
outcome of the spring offensive.
If Germany 18 able to crush Russia by the end of next summer,
German morale will have been saved. But should the fighting
picture of the internal situation. Low morale, due to A contin-
continue through September, many people are of the opinion that
Germany will not be able to continue the struggle."
(FFC, Foreign Broadcast Monitoring
Service, March 6, 1942)
223
SECRET
NUMBER 22
COORDINATOR OF INFORMATION
THE WAR
THIS WEEK
March 5-12, 1942
SECURITY CO
COOPES
Printed for the Board of Analysts
Copy No. 6
history of the Treasury
SECRET
MARCH 5-12, 1942
Coordinator of Information
THE WAR THIS WEEK
The collapse of Java finds Japan in virtually complete possession of the "great barrier" extending from Burma to New
Guinea. She faces now the most crucial decision since the
war began-the choice among strategic alternatives, which
may well condition the whole future course of the war in the
Far East. Is Japan to be content with the relatively inexpensive conquest of Burma and the protective screen of the
Melanesian islands, a strong defensive position? Or will she
proceed from that defensive position to play for the highest
stakes in a field where the alternatives are Australia, India,
and eastern Siberia? Current analysis of Japan's position in
aircraft and shipping would seem to indicate caution. But
her successes to date and the general temper of her policy
suggest the more adventurous course.
In the Mediterranean theater the ominous pause continues,
but preparations, as indicated by the accompanying map,
seem to foreshadow early action. Here the Axis again is
faced by alternatives-Egypt, Syria, Turkey-but the complexities of the situation are such as to make forecasting in
the highest degree hazardous.
Finally, on the Russian front, the Soviets have recently
made unquestioned progress, thrusting irregular salients into
the German line and infiltrating behind enemy positions.
But the Russians have yet to win the decisive advantage
which would come with a genuine disorganization of any part
of the German front.
1
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The Conquest of Java
With the establishment of three beachheads on the
accessible northern shore of Java and the rapid attainment
of supremacy on the sea and in the air, the Japanese swept
on to the reduction of Java at a speed disconcerting even to
seasoned military observers. Apparently only seven or
eight days separated the initial landings from the final
collapse of Bandoeng. And the Japanese go so far as to
claim the unconditional surrender of the defending forcessaid by them to number 93,000 Dutch and 5,000 British and
American troops.
Coordinated Offensive on New Guinea
One of the principal characteristics of the present Japanese
offensive has been its unremitting and wide-ranging character, forcing the enemy constantly to disperse his forces
and often to submit to the element of surprise. On the
same day as the Dutch announcement of the fall of Bandoeng,
the Japanese renewed their distant attacks on bases in
Melanesia. Bombing raids, then two landings were made on
the northeastern coast of New Guinea at Salamaua and Lae.
A third landing followed at Finschafen on the same shore.
And despite a heavy Australian air assault on Wednesday,
which sank seven or more transports, Japanese reinforcements
continued to arrive.
Spearhead and Encirclement
The Japanese again employed tactics which have become
completely familiar, isolating and surrounding the enemy at
key points by the use of rapidly moving spearheads. In the
east one spur of the spearhead operating from Rembang
promptly bisected the island and its east-west communications system, while a second spur moved on the naval base
at Soerabaja.
In the west, a twin spearhead rapidly encircled the capital
at Batavia. The government had only time to order a hasty
program of demolition before it fled to Bandoeng. Finally, &
central spearhead, based on Indramayu bay, reached and
apparently surrounded Bandoeng, center of Allied military
operations. This city's position on the Preanger plateau
(2,400 feet) was believed to be distinctly defensible.
The fate of forces remaining on the islands is still in doubt,
with the Netherlands government claiming that guerrilla
warfare is continuing. With only one practicable avenue
for evacuation-the port of Tjilitjap on the south shore of
Java-apparently few escaped.
The design of Japanese strategy in this area is transparent.
By occupying Salamaua and Lae, the Japanese have halved
the flying time of bombers to Port Moresby, 150 miles distant
on the southern shore of New Guinea. Moresby occupies a
position of strategic command over the shipping lane through
the Torres Strait and likewise would constitute a base for
Japanese bombers striking at northeastern Australia. Its
early occupation is probably to be expected, and troop transports have already been reported in this general area.
This step will probably be only the first in a series by which
the Japanese will attempt to acquire a line of bases in the
Melanesian islands, which screen the northern and eastern
shores of Australia. Here the objective might be either the
isolation of Australia, through the interruption of Allied
supply lines, or an eventual attack on Australia itself. Newspaper correspondents report that civil defense preparations
in Australia vary according to the distance from the Netherlands Indies-Brisbane is blacked out and entrenched, Sydney
is "browned out," and Melbourne shows few outward signs of
civil defense preparations.
3
2
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New Caledonia and the Free French: Strategy and Politics.
At the southeastern extremity of Melanesia lies the island
of New Caledonia, whose strategic and political situation has
suddenly given it new prominence. New Caledonia went
over to the Free French shortly after the Armistice of June
1940, and full support was given by the New Caledonians to
the declaration of war on Japan by the French National
Committee in London (following Pearl Harbor).
With the enlargement of the Japanese menace, the American government formally recognized the sovereignty over
New Caledonia of the French National Committee in London
and prepared the way for effective American cooperation with
the Free French on the island. Specifically it was recognized
that the French island possessions in the Pacific area were
"under the effective control of the French National Committee
in London" and that the American government would cooper-
ate "with no other French authority" in that area (public
statement of the High Commissioner of New Caledonia,
February 28).
New Caledonia has a landlocked harbor at Port Noumea
which offers a sheltered anchorage to vessels of all sizes. The
docks, however, can accommodate only ships clearing 24 feet
or less. The shelter for sea planes is excellent.
The island also has great mineral wealth, and is for its
size perhaps the richest area in the world in terms of the
amount and variety of commercial minerals available for
exploitation. In 1939 more than 49,000 tons of nickel ore
and 9,300 tons of nickel matte were exported. The increasing importance of the island in Japan's economy is indicated
by the fact that shipments of nickel ore to the Japanese rose
from 13,400 tons in 1937 to 39,400 tons in 1939. Before the
inception of the Free French movement in New Caledonia,
the Vichy regime had agreed to sell the total nickel output
4
to Japan, whereas the Free French have allotted the entire
output to the United Nations.
From the extensive reserves of chromite in New Caledonia
more than 39,000 tons were exported in 1939, nearly half of
that amount going to the United States (slightly more than
ten percent of our total imports of chromium). A very
reliable source reports that the producers of chrome had
earlier been hesitant to increase the output in the fear that
stocks might fall into Japanese hands at a time when they
considered the defense of the island inadequate.
The Japanese Shipping Position
Although competent military observers still envisage the
possibility of an early attack on Australia's main defensesthe southeast sector-further investigation of the Japanese
shipping position would now appear to provide additional
support for the view that Japanese objectives in this area
may be limited to the interruption of Allied supply lines.
Although Japanese losses in merchant tonnage thus far in
the war have been roughly offset by new acquisitions, her
estimated tonnage available March 1, 1942, was thought to
be fully occupied. According to the tentative figures so far
assembled, only that margin of ships which might be released
as a result of dwindling operations in active battle areas could
be devoted to new operations.
Spelled out statistically, the total estimated tonnage,
6,250,000, minus tonnage requiring repairs (normal repairs
as well as those arising from damage in action), would
amount to 5,600,000 tons. Of this tonnage, according to
information assembled by the Economics Division of the
Coordinator's office, 3,200,000 tons, it is estimated, are
absorbed in necessary inter-island shipping about Japan,
trade with China and Manchuria, and the supply of military
5
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SECRET
forces in China. Another 50,000 tons are used for such
essential civilian services as ferrying. It is estimated that
2,200,000 tons are being utilized to supply expeditionary
forces in the southwestern Pacific, and another 300,000 tons
are in use as naval auxiliaries. The total, 5,750,000 tons,
actually exceeds the tonnage available, and this situation
means that the deficit can only be made good by drawing
upon stock-piles rather than imports for current production.
If it is assumed that the Japanese are able to consolidate
their gains in the southwest Pacific and withdraw a consider-
able number of troops, there might be available from the
2,200,000 tons in use in this area a total of 1,500,000 tons for
new operations. But if this shipping were devoted to an
offensive against Australia, the great distances to the cities
in the southeast probably would permit an expeditionary
force of fewer than 200,000. And Japan would risk the entire
marginal merchant tonnage available to her.
Japanese Air Losses
Another factor which may be a deterrent to far-ranging
Japanese ventures is seen in their losses in the air. Although
military observers have revised upward their former production estimate of 400 planes per month (now thought to be
nearer 500), only some 300 to 325 of these are believed
to be front line planes. In three months of war, it is
estimated that approximately 1,800 planes were lost, about
half in combat and half in other operations (largely accidents
and forced landings). With a total air strength of some
5,000 planes, of which fewer than 4,000 are available for
front-line operations, the Japanese air fleet, at this relatively
high rate of expenditure, would disappear in from 14 to 16
months.
One possible explanation for high Japanese plane losses
has been suggested by an American formerly associated with
the Japanese branch of a large and famous rubber company.
During his stay in Japan prior to the war, no orders had come
from the Japanese for self-sealing gasoline tanks. And he
thinks it unlikely that older Japanese planes were equipped
with such tanks.
The Fall of Rangoon
A new development appeared in the fighting in Burma this
week when American-built tanks, which could not be used in
the earlier jungle fighting, were committed in a battle in the
open Abya country, 60 to 70 miles northeast of Rangoon.
The resulting check to the Japanese advance proved, however, only temporary. The invaders, after occupying points
on the railroad north of Pegu, infiltrated across to the north of
Rangoon to encircle the city. Meantime, Japanese landings
on the shores of the Bakir and Rangoon rivers threatened to
isolate British units defending Pegu.
To escape this trap, the British evacuated all southern
Burma, after extensive demolitions at the ports of Bassein
and Rangoon. Their new defensive position is reported as
running roughly from the Chittagong district of India to the
northern border of Thailand. Against them, the invaders
appear to have been using two divisions in the Pegu area, a
third in reserve near Moulmein, and a fourth which they are
reported to be moving up to supporting positions from bases
in Thailand.
North of the Pegu area the logical objectives of the Japanese
are Mandalay, Bhamo, and finally Myitkyina. If they can
take Myitkyina, they will effectively sever the last practicable
land route from India to China (see The War This Week,
Feb. 12-19, 1942). The tremendous stake involved in the
7
6
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conquest of the Mandalay-Myitkyina area-isolation of
China from India-suggests that the Japanese probably will
throw heavy reinforcements into this area, if it proves
necessary.
Tightening of Sino-American Military Relations
Meanwhile, the informal Sino-American military alliance
has been further implemented by the appointment of Lieutenant General Joseph Stillwell, U. S. A., as Chief of Staff
Chinese Interests in Malaya and Singapore
Newspaper editorials continue to appear in Chungking,
exhorting Anglo-Americans to greater effort in the war in
Asia. These appeals are of course grounded in self-interest,
nowhere better illustrated than in the dismay which followed
the final debacle at Singapore. Here Chinese concern over
the quality of Allied defense sprang from a direct and vital
interest even more close and more personal than that of
England.
under Chiang Kai-shek. While the Magruder mission,
The population of Singapore and Malaya is predominantly
Chinese-a young and vigorous immigrant group, strongly
announced last August, was sent to expedite lend-lease aid to
knit together by nationalist organizations, and intensely
China, the Stillwell mission is obviously concerned with
patriotic. For years their contributions in money have
active military operations in China, as well as with supplying
China across India and Burma.
flowed steadily to the support of the nationalist cause in
In the event the Japanese take northern Burma, the
presence of this considerable body of American officers and
men in China would buttress the Generalissimo's policy of
active collaboration against Japan. General Ho Ying-chin,
China. The Central Government of China has maintained
constant contact with them through its National Overseas
Affairs Commission. The appearance in Chungking of the
slogan, "Defend Singapore," reflected this same self-interest
and so, no less, do the reiterated promises of Chinese leaders
Chinese Chief of Staff, has been viewed by some as a possible
appeaser, who might try to supplant Chiang once appease-
that the fall of Singapore or of Rangoon will not diminish
ment became a political possibility. Ho Ying-chin's relationship to General Stillwell has not been reported.
A full-fledged Chinese military mission is also coming to
Washington under General Hsiung Shih-hui, a fifty-year-old
veteran of Sun Yat-sen's revolution. General Hsiung grad-
The one major result of recent disasters, according to this
view, has been to put China on a plane of moral equality
with the Anglo-Saxon powers. The white man, having lost
although barely recognized-partners, now remains an ally,
uated from the Japanese Staff College in Tokyo and has
but is no longer superior.
been in charge of Kiangsi province for ten years past, where
he has fought both communists and Japanese. His experi-
The Moslem Issue Bedevils India
ence in Kiangsi, which is half surrounded by Japanese
occupied territory, should clearly be of value in mapping
future operations.
China's war effort.
an empire in which the Chinese had become important-
In Mr. Churchill's statement to the House of Commons
that Sir Stafford Cripps was going to India in an effort to
obtain the acceptance by nationalist and Moslem leaders of a
plan for India's political future worked out by the British
9
8
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government, the Prime Minister did not specify the nature
of that plan. It may be a long time before he feels in a posi-
support has become less essential. On the other hand, many
Britishers prefer to uphold the Moslems against the Hindus
tion to make a definite announcement. Meantime reports
because they think the former make better soldiers. And
from New Delhi indicate that despite a tremendous news-
reports from Afghanistan indicate that Nazi agents are doing
their best to spread the idea of Pakistan along India's north-
paper build-up, pessimism about Britain's intentions has
begun to set in. But the nationalist position remains unchanged. Pandit Nehru has made that as clear as crystal
by his statement at Allahabad that nothing except Indian
freedom "will make a vital difference or move our millions
to effective action."
Nehru further gave assurances that his party, if placed
in power, would give "all reasonable and possible protection
to minority groups." But rumor had it that Moslem objections to a Hindu-controlled India would prove to be the
chief obstacle to Sir Stafford's conciliatory efforts. A recent
study prepared in the Coordinator's office indicates, however, that the Moslem League in demanding Pakistan (the
division of India into separate Hindu and Moslem states)
may not voice the opinion of a majority of Indian Moslems.
For instance, in the 1937 elections for the provincial legislative assemblies, out of 482 Moslem seats, League candidates
won only 108. Furthermore, several of the most prominent
Moslems in India have publicly withdrawn their support
from Mr. Jinnah and repudiated Pakistan. Finally, many
observers feel that even Mr. Jinnah is using Pakistan as a
bargaining point and will ultimately settle for a less drastic
solution.
The scanty reports of Chiang Kai-shek's meeting with Mr.
Jinnah, during the former's recent visit to India, indicate a
west frontier.
The Mediterranean Prepares for Spring
A highly placed observer of the European scene has predicted that a Mediterranean campaign of broad scope will
begin before April 1 or early in that month, preceding a
closely related campaign in Russia. Whether the Axis
attack will be through Egypt, through Turkey, or through
Syria via Cyprus, he does not feel in a position to judge.
But certain stray indications-Bulgarian precautions against
bombing, an effort to put Italian capital ships in service for
actual operations, and reports from German informants that
an assault on Turkey is intended for March-lead him to
believe that one phase of the campaign may be an effort to
seize the Dardanelles and Bosporus so that Italian warships
can get through to the Black Sea. Thus far, however, the
eastern Mediterranean remains ominously quiet.
Although activity on the Libyan front has again been
restricted to air operations-with the capture of enemy positions in Fezzan (southern Libya) by the Free French appear-
ing as the only dramatic military event of the weeknervousness is apparent in Turkey and in areas occupied by
the forces of the United Nations. Mystery still veils the bomb
explosion which almost killed German Ambassador Franz
reciprocal lack of favorable impressions. And it is also
von Papen in Ankara. While the Turks maintain that the
possible that the British government, which once leaned on
the Moslem League as the only group on which it could rely
to oppose the Congress party, may now feel that Mr. Jinnah's
man carrying the explosive material was a communist born
in Yugoslavia, and only a naturalized Turk, there remains
some anxiety that the Nazis may use this incident as a pretext for aggression.
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The Axis Line-up in the Mediterranean
The accompanying map indicates the formidable military,
naval, and air strength that the Axis has concentrated in the
eastern Mediterranean. The figures shown are, of course,
simply estimates by the most competent American military
authorities and may be subject to further correction. It
should also be borne in mind that the units mentioned are of
very uneven strength.
The Italian divisions in Sicily and Italy, for instance, are
of uncertain value, and should be considered as a "potential
reserve," not likely to be thrown into the struggle at any very
early date. Italian divisions in Libya, while impressive in
number, are reported as greatly depleted in strength-not
in a most miscellaneous fashion, and whose navy and air force
are extremely weak, would, in case of invasion, probably be
obliged to fall back on their rugged terrain and their famous
fighting spirit for the defense of Asia Minor.
The German mountain division on Crete is no doubt an
elite force. This and the powerful Axis air force in Crete and
Greece are a constant threat not only to the Turks-whom
advanced Axis bases in the Aegean islands also threatenbut to the Free French in Syria and to the British in Egypt.
These last have not been content to remain on the defensive,
however, and during the last week their planes have raided
Axis-held islands in the Aegean, and even the city of Athens
itself.
at all to be compared with Rommel's Panzer divisions, which
are now estimated to be three in number. Axis air strength
in these areas is not only very considerable but much of it is
In the 21-month old succession of Axis offensive and Allied
counter-offensive in the Mediterranean, the next move appears
to be with the forces of the Axis, strongly poised for the attack.
of superior quality. To this the constant raids on Maltawhich last month piled up a record score of 433 civilian
The Russians Make Fresh Gains
casualties-bear eloquent witness.
The Italian fleet presents a special problem. Despite terrific losses in cruisers-notably in the battle off Cape Matapan
on March 28, 1941-that fleet still presents a formidable
threat to British sea power in the Mediterranean. Reports
concur, however, in stressing the lack of fighting spirit in the
Italian navy, and it appears to be impossible to get definite
evidence on the state of repair of the two new battleships
Littorio and Vittorio Veneto, severely damaged by the British
in earlier engagements.
On the Russian front this week the Soviets have made
clear-cut and definite gains. They advanced to points west
of the Volkhov river in the region south of Leningrad, and
at Staraya Russa they were continuing the two-week old
encirelement of units of the German Sixteenth Army. Above
all, west of Moscow, their capture of Sychevka and Yukhnov,
coupled with their previously established salient at Velizh,
constitutes a definite threat to the German Rzhev-VyazmaSmolensk defensive area-prime bases for the renewal of a
Nazi offensive in the spring.
In the Balkans and Greece, the calibre of German and
Italian divisions is difficult to judge. The Bulgarian army
Smolensk, and maintained that they had reached the out-
is probably not to be taken too seriously. So far it has not
seen action, but the Germans might use it in an attack on
skirts of Orel, Kursk, and Kharkov. The German High
Command countered with the contention that they had
Turkey. The Turks, who have equipped their large army
repulsed Soviet attacks east of Kharkov. The Nazis further
The Russians, moreover, claimed further advances on
13
12
SECRET
SECRET
claimed that the pockets of Germans left behind the Russian
line of advance represent "island fortresses" which have often
been able to stab the Red Army in the back and hinder its
movements. According to the Nazis, these fortresses-provisioned almost exclusively by air-are intended to accelerate
a German spring offensive once it is launched.
Meantime the Nazis are reported to be circulating in
Stockholm a strange story to the effect that Hitler has
concocted a plan for immediate peace with Russia on the
basis of the evacuation of all Soviet territory and a return to
the status quo of June 22, a story which might be designed
to induce Japan to attack Russia. More substantial reports
indicate that the Russians have been putting pressure on
(located on an adjoining island in the Seine) which was only
slightly damaged. Estimates of civilian casualties run from
about 250 to 400 killed and from 1,000 to 2,000 injured-an
unavoidable result, since the Renault plant is set in a thickly
settled suburb, Boulogne-Billancourt, where workmen's quarcrowd near the factory buildings.
British and American press comment justified the raid on
the basis that the plants bombed were working for the
Germans. Despite the Vichy contention that French factories have produced no war equipment for Germany directly,
the Allied claim appears to be justified. The British have
captured German planes equipped with Renault engines,
Renault tanks have been discovered on the Russian front, and
the ministry of economic warfare maintains that Parisian
their British allies to recognize the boundary of June 22including, of course, the annexation of the Baltic states.
plants are making 40-man transport planes for the invasion
According to observers in London, Sir Stafford Cripps has
of England.
maintained before a select gathering of 300 members of
parliament that Russia would regard such recognition as the
Nazi-influenced publicity in Europe and North Africa has
ignored the damage to industrial objectives and played up the
acid test of Britain's attitude and as an indication that the
civilian fatalities. Uninfluenced French utterances, how-
Anglo-Saxon powers were not trying to interpret the Atlantic
ever, have been characterized by sadness rather than anger
for the most part. The keynote was struck by the preacher
Charter in an anti-Russian sense. The Soviets, Cripps
implied, will make no further territorial demands.
The British Air Raid on Paris
Technically the recent British raid on Parisian industrial
suburbs can be considered a success. Operating with perfect
visibility and in bright moonlight, 249 planes (of which all
but two returned safely) dropped 462 tons of high explosives,
including 26 bombs of 4,000 pounds each.
French eyewitnesses agree that the damage to the an-
of the funeral sermon in Notre Dame, who shuddered,
apparently ambiguously, at the responsibility which weighs
upon those who have contributed to multiply such catastrophes throughout the world.
Now that the bombardment of French industry has begun
and the Nazis have made out of it what capital they can, it
would be difficult to suppose that attacks will not continue.
Because of its nearness to British bases, its concentrated
industry, and its lack of anti-aircraft defenses, Paris repre-
sents an unusually favorable target for the RAF. And for
nounced objectives of the air attack was very great. One
the next few weeks, flying weather too will favor Paris as
said it completely destroyed the Salmson plant and also all
against more distant targets farther east.
parts of the Renault works except the tank department
15
14
SECRET
SECRET
Crisis in Brazil
The Axis submarine offensive has sunk probably five
Brazilian ships in the last three days, has caused President
Vargas to assume sweeping emergency powers, and has
brought Brazil measurably nearer war. Behind these developments, and probably intimately connected with them,
are two ominous reports received by Vargas: (1) that some
one hundred and fifty Condor and Lati pilots, who formerly
operated in Brazil, are now training in France to fly large
bombers, and (2) that certain well organized and armed
Japanese colonists, led by Japanese army officers, were prepared to attack vital spots in and around the great industrial
city of São Paulo, while the Germans farther south staged
a simultaneous series of uprisings. As a result of these
critical developments, observers here expect Brazil to ask
the United States for active support.
Axis Undercover Activity Continues in Latin America
Although the severance of relations with the Axis, which
either to the United States or directly to their respective
countries, enjoying nearly everywhere, meanwhile, some free-
dom of movement with only slight surveillance. Arrangements have been made with Ecuador, Peru, and Bolivia for
the early removal of Axis diplomats to the United States.
Brazil has recently imposed special restrictions on the Japanese staff in retaliation for similar measures taken by Tokyo
against the Brazilian mission, but the German and Italian
staffs still come and go as they please.
The problem of exchanging diplomatic delegations is at best
difficult, and it has been deliberately made more so by the
Axis countries, which seek to delay the return of their staffs
as long as possible. Where Axis diplomats have been re-
moved, the Spanish legation or Vichy mission frequently
serves as a coordinating center for illegal Axis operations.
In Mexico, which has never recognized the Franco regime in
Spain, the Portuguese legation serves the same purpose, although the Spanish Falange maintains a large and effective
clandestine organization. The Mexican Government has
eighteen of the twenty Latin American nations undertook
lately taken steps to curb Nazi activities more effectively.
before and after the Rio Conference, has on the whole hampered Axis conspiracy and propaganda, these activities have
obviously not ceased, and in many cases they are carried on
with considerable freedom.
Known agents, nevertheless, circulate with comparative ease.
Although Cuba is at war with the Axis, its courts have shown
a disturbing tendency to release Axis agents apprehended by
In some of the American republics Axis diplomats have
already departed. As a result of decisions reached before
the Conference, all Axis representatives from Mexico, Cuba,
general continues to play a pro-Axis role, and is apparently
not discouraged from doing so by the temporal governments.
Haiti, and the Central American states are now at White
Sulphur Springs in the United States. Some of the foreign
delegations have left Colombia and the Dominican Republic.
In Chile and Argentina, on the other hand, where relations
with the Axis have not been broken, Axis diplomats operate
with full facilities.
Elsewhere in Latin America the Axis staffs await transfer
16
the police. Throughout Latin America, the Church in
Chile Fights Shy of a Break With the Axis
Contrary to the impression of many observers in the
United States (an impression fostered in large part by the
American press and by the undue optimism of Rossetti, the
outgoing Chilean foreign minister), recent developments in
Chile indicate no strong possibility of a Chilean break with
the Axis in the near future. The two determining factors in
17
SECRET
Chile's foreign policy continue to be the popular anxiety over
Chilean security (in view of the failure of the United Nations
to stop the Japanese in the Pacific and to control German
submarine activity in the Atlantic), and the specific attitude
of President-elect Rios regarding the course which Chile
should pursue.
Although Rios will not be inaugurated until April 2, he
already exerts powerful influence on the government, and
appears to be a "strong man." Soon after his election he
declared his opposition to a break with the Axis powers,
intimating that he thought Chile's problems could be met in
other ways. He opposed a special session of Congress to
consider the Rio Agreements, and the Ministry of Interior
has in fact recently announced that no special session will
be called. Ratification of the agreements cannot possibly
be had, therefore, until later in the spring, and will very
likely be postponed beyond that.
The Chilean protest to the Axis, February 27, against the
sinking of Brazilian and Venezuelan ships was perhaps a
compromise measure, representing the present limit to which
the Chilean Government cares to go. Rios has selected as
his foreign minister Ernesto Barros Jarpa, an eminent lawyer
and statesman friendly to the United States. It is thought
here, however, that the appointment may be an attempt to
obtain the support of conservative elements, and that in any
case it will not hasten a decision to break with the Axis.
Rios realizes that Chile needs economic assistance to raise
her low standard of living, but he deprecates what many
Chileans have regarded as Rosetti's obsequious trading of
political concessions to the United States in return for economic benefits. Rios' attitude reflects the fact that there is no
widespread support in Chile for a break with the Axis. The
only important person who has made an unequivocal public
statement in favor of a break is Gonzales Vedela, former
minister to Vichy; and the only newspaper consistently of
that persuasion is the Communist journal, El Siglo.
18
GOVERNMENT PRINTING OFFICE 1943
224
RESTRICTED
MID 319.1
Situation
No. 656 M.I.D., W.D. 11:00 A.M., March 12, 1942.
8-11-41
SITUATION REPORT
I.
Pacific Theater.
Philippines: No change in the situation to report. Burma:
Thai troops are reported active in northern Thailand. The British
forces were awaiting an attack from the south at Prome and Toungoo.
Australasia: A Japanese Invasion Fleet, which is reported to be
moving toward Port Moresby, was attacked on March 11 by Australian
bombing planes. Japanese aircraft bombed Port Moresby on March 11.
A Tokyo broadcast acknowledges the loss of three Japanese ships sunk,
and six others damaged as a result of Allied bomber attacks on
Japanese convoys off New Guinea.
II.
Western Theater.
There is nothing to report.
III.
Eastern Theater.
Fighting continues on the southern and central fronts.
There is no change in the general situation. (A situation map will
not be issued this date.)
IV.
Middle Eastern Theater.
Press reports ground action in this theater is confined
to patrol activity supported in some cases by air fighters. The
aerial bombardment of Malta continues. Conflicting reports
continue to be issued regarding the naval action north of Misurata
March 10.
RESTRICTED
225
March 13, 1942
TO:
Mr. Sullivan
Mr. Paul
FROM:
The Secretary
Last night, at 6:30, on Baukage's time,
Crawford of P M took his place. Please get a
copy of what Crawford said. He was particularly
good on the interpretation of taxes. He would be
excellent to use to present out side of taxing
State and Municipals.
Sunhmitted 3/16.
226
TREASURY DEPARTMENT
Washington
FOR RELEASE, MORNING NEWSPAPERS,
Friday, March 13, 1942.
The Secretary of the Treasury, by this public notice, invites
tenders for $150,000,000, or thereabouts, of 91-day Treasury bills,
to be issued on a discount basis under competitive bidding. The
bills of this series will be dated March 18, 1942, and will mature
June 17, 1942, when the face amount will be payable without interest,
They will be issued in bearer form only, and in denominations of
$1,000, $5,000, $10,000, $100,000, $500,000, and $1,000,000
(maturity value).
Tenders will be received at Federal Reserve Banks and Branches
up to the closing hour, two o'clock p. m., Eastern war time,
Monday, March 16, 1942. Tenders will not be received at the
Treasury Department, Washington. Each tender must be for an even
multiple of $1,000, and the price offered must be expressed on the
basis of 100, with not more than three decimals, e. g. 99.925.
Fractions may not be used. It is urged that tenders be made on
the printed forms and forwarded in the special envelopes which will
be supplied by Federal Reserve Banks or Branches on application
therefor.
Tenders will be received without deposit from incorporated
banks and trust companies and from responsible and recognized
dealers in investment securities. Tenders from others must be
accompanied by payment of 10 percent of the face amount of Treasury
bills applied for, unless the tenders are accompanied by an express
guaranty of payment by an incorporated bank or trust company.
Immediately after the closing hour, tenders will be opened at
the Federal Reserve Banks and Branches, following which public
announcement will be made by the Secretary of the Treasury of the
amount and price range of accepted bids. Those submitting tenders
will be advised of the acceptance or rejection thereof. The
Secretary of the Treasury expressly reserves the right to accept or
reject any or all tenders, in whole or in part, and his action in
any such respect shall be final. Payment of accepted tenders at
the prices offered must be made or completed at the Federal Reserve
Bank in cash or other immediately available funds on March 18, 1942,
provided, however, any qualified depositary will be permitted to
make payment by credit for Treasury bills allotted to it for itself
and its customers up to any amount for which it shall be qualified
in excess of existing deposits when so notified by the Federal
Reserve Bank of its district.
30-69
(over )
-2The income derived from Treasury bills, whether interest or
gain from the sale or other disposition of the bills, shall not
have any exemption, as such, and loss from the sale or other
disposition of Treasury bills shall not have any special treatment
as such, under Federal tax Acts now or hereafter enacted. The
bills shall be subject to estate, inheritance, gift, or other excise
taxes, whether Federal or State, but shall be exempt from all taxation now or hereafter imposed on the principal or interest thereof
by any State, or any of the possessions of the United States, or by
any local taxing authority. For purposes of taxation the amount of
discount at which Treasury bills are originally sold by the United
States shall be considered to be interest. Under Sections 42 and
117 (a) (1) of the Internal Revenue Code, as amended by Section 115
of the Revenue Act of 1941, the amount of discount at which bills
issued hereunder are sold shall not be considered to accrue until.
such bills shall be sold, redeemed or otherwise disposed of, and
such bills are excluded from consideration as capital assets.
Accordingly, the owner of Treasury bills (other than life insurance
companies.) issued hereunder need include in his income tax return
only the difference between the price paid for such bills, whether
on original issue or on subsequent purchase, and the amount
actually received either upon sale or redemption at maturity
during the taxable year for which the return 18 made, as ordinary
gain or loss,
Treasury Department Circular No. 418, as amended, and this
notice, prescribe the terms of the Treasury bills and govern the
conditions of their issue. Copies of the circular may be obtained
from any Federal Reserve Bank or Branch.
-000-
227
REVENTY-SEVIDITH CONGRESS
ROBERT L DOUGHTON N. c., CHAIRMAN
ALLEN v. TREADWAY MASS
THOMAS M GILLEN N.Y.
FRANK GROWTHER N.Y.
TENN
=
KNUTSON MINN
DANIEL REED, M. Y.
BOENNE m.,INR.
NERE I COOPER DISNEY OKLA
NOT a WOODRUFF MICH
COMMITTEE ON WAYS AND MEANS
THOMAS A. JENKINS OHBO
DONALD H. MCLEAN N.A
BENTRANDW.GEAMART,CALIF.
VA
HOUSE OF REPRESENTATIVES
FRANKCARLSON,KANS.
WASHINGTON. D.C.
INJAMINJABRETT.PA
MILTON WEST.
WESLEY a JOHN PATRICK WILLIS DINGELL ROBERTS BOLAND TEX. MICH PA.
BAYMONE MCKEDUGH KNOTE MILL WASIS
ARTHER D. HEALEY
A. F FORD, MISS
MASS.
BARRON K. ORDER CLERK
MARION Y. MC CANLESS ASST. CLERK
March 13, 1942
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
(appreciate very much your kind letter of March
12th expressing your thanks to the other Members of our
Committee and myself for the manner in which we handled
the Public Debt Legislation.
I wish to assure you that it is always a pleasure to cooperate with you in any matters in which you
and your Department and our Committee have a mutual interest.
Thanking you for your many courtesies and with
my kind personal regards, I am
Verx sincerely ours,
R. L. Doughton
RLD:d
228
MAK 12 1942
My dear Mr. Chairman:
I want to take this opportunity to thank you and the
members of your Committee for the courtesy which all of
you extended to me and the other representatives of the
Treasury in connection with the consideration by the House
of our Public Debt legislation.
I also want to congratulate you on the manner in which
you handled the bill on the floor of the House. The vote
on the measure - 367 to 0 - is a well deserved tribute to
the Ways and Means Committee and its able chairman.
Sincerely yours,
(Signed) H. Korgenthau, Jr.
Secretary of the Treasury.
Honorable Robert L. Doughton,
Chairman, Committee on ays and Means,
House of Representatives,
Washington, D. C.
n.m.c.
se- Thompson
LJB:ims
3/11/42
By Messenger Dead 3:15
229
READING COPY OF STATEMENT READ BY
SECRETARY MORGENTHAU BEFORE SENATE COMMITTEE ON FINANCE
ON INCREASE IN DEBT LIMIT
3/13/42
230
The bill H. R. 6691, now before you for
consideration, would raise the limitation on the
power of the Treasury to issue public debt
obligations under the Second Liberty Bond Act,
as amended, from sixty-five billion dollars to
one hundred twenty-five billion, and provides
greater flexibility to enable the Treasury to
conduct its war financing operations. I am glad
to have this opportunity to discuss with this
Committee the situation with respect to the
public debt.
-2-
231
It is urgent that this bill be promptly
enacted. The balance of our borrowing authority
at the end of February, 1942, was about one billion
four hundred million dollars. By the end of March
it is anticipated that the borrowing authority
will be insufficient to cover the debt issues that
will be required during the month of April.
In February, 1941, I appeared before your
Committee in support of a bill to increase the total
borrowing authority from forty-nine billion dollars
to sixty-five billion dollars. It appeared at that
time that a limitation of sixty-five billion
dollars would be sufficient to enable the Treasury
to finance the estimated deficit in the Budget
until the end of the present fiscal year and
provide some margin.
-3-
232
But we could not foresee then that we would be
engaged in a war that would require our all-out
effort. Our defense program at that time amounted
to approximately twenty-eight and a half billion
dollars in appropriations, contract authorizations,
and recommendations. The war program now exceeds
one hundred forty billion, exclusive of commitments
by governmental corporations.
The 1943 Budget submitted to the Congress
early in January indicates that the deficit for the
current fiscal year ending next June 30 will amount
to eighteen billion six hundred million dollars and,
in addition, that the Treasury will be required to
advance to governmental corporations approximately
three billion dollars to finance their activities.
-4-
233
On the basis of these estimates the public debt
on June 30, 1942, will amount to seventy billion
six hundred million dollars. The estimated deficit
in the fiscal year beginning July 1, 1942, after
taking into consideration contemplated additional
budgetary revenues of seven billion dollars from
new tax legislation, will amount to thirty-five
billion, four hundred million dollars. We will
also be required to raise four billion four hundred
million dollars for governmental corporations,
principally to meet defense expenditures by the
Reconstruction Finance Corporation.
-5-
234
The estimated increase in the public debt for the
fiscal year beginning July 1, 1942, based on these
estimates, will thus be thirty-nine billion eight
hundred million dollars and leave us with a public
debt on June 30, 1943, of one hundred ten billion
four hundred million dollars.
While these figures are huge in amount, they
are made necessary by the great task to which the
Congress and the American people have dedicated
themselves, namely, the task of winning this war.
Whatever the cost may be we are ready to face it.
We are strong enough to bear it, and we know that
it will be worth it in the end.
-6-
235
As I have suggested before, our production of
overwhelming quantities of war materials, an effort
that makes this debt necessary, should frighten no
one but our enemies.
2.2
The bill before you proposes certain changes
which are needed in order to facilitate the
Treasury's financing operations, in addition to the
increase in the debt limitation. Briefly, these
are as follows:
1. The Secretary of the Treasury would be
authorized to issue Treasury marketable securities
on a discount basis or on a combination interest-bearing
and discount basis.
-7-
236
At the present time we have authority to issue
regular marketable securities on a discount basis
only 1f the maturity date is not more than one year
after their date of issuance. We also have
authority to issue Savings Bonds on a discount
basis. But this additional authority would give the
Treasury more flexibility and permit it to design
its issues to conform more closely to the
investment requirements of particular classes of
purchasers.
2. The Secretary of the Treasury would be
authorized to accept in his discretion in payment
of any taxes imposed by the United States any
obligations of the United States which are redeemable
upon demand of the owner.
-8-
237
This, in effect, can now be accomplished by the
holder of such demand obligations turning them in
to the Treasury and getting the cash and then
using the cash to pay taxes. The new authority
would simplify the procedure and would make it
more convenient to the taxpayer.
3. The Secretary would be authorized to
offer any new Treasury obligations in exchange for
outstanding obligations of any agency or
instrumentality of the United States which are
guaranteed by the United States as to both principal
and interest. The Treasury has taken over all the
financing of the various governmental agencies which
formerly issued marketable guaranteed obligations
and now provides them with funds by purchasing
their securities.
-9-
238
We are also in process of refunding the outstanding
guaranteed obligations of these agencies into
Treasury securities, but in view of the language of
the various statutes under which guaranteed
securities are issued, it is now necessary to refund
them indirectly by purchasing the guaranteed security
and selling the holder a Treasury security. This
proposed amendment would simplify these operations
and permit us to offer Treasury securities directly
to the holders of these guaranteed obligations in
exchange for such obligations, in the same manner
as Treasury securities are now refunded.
- 10 -
239
4. A provision is included to clarify the
authority existing in Section 19 of the Second
Liberty Bond Act, which as originally enacted in
1934, was intended to permit the Treasury to buy
any of its securities in the market at or before
maturity out of the proceeds of any public debt
securities previously sold. The present language,
however, is ambiguous and might be interpreted to
mean that the authority may only be used, in effect,
for the exchange of one security for another. This
amendment would clarify the language in that
section.
- 11 -
240
5. The Postmaster General would be authorized
to transfer the liability for outstanding Postal
Savings Stamps to the Treasury, and his authority
to issue such stamps would be terminated as of the
date when the Treasury makes Treasury Savings Stamps
available to the public under Section 22 of the
Second Liberty Bond Act, as amended. . The Treasury
will then assume the liability for redeeming such
outstanding stamps and such stamps will become a
public debt obligation.
- 12 -
241
When we initiated our present Defense Savings
program last year we deemed it advisable to utilize
the facilities of the Postal Savings System because
it was already issuing savings stamps and had the
facilities for immediately carrying out an
expanded program. The question is now often raised
by the purchaser of Postal Savings Stamps as to
whether the funds thus provided go into the Treasury
for the purpose of helping to pay for the National
Defense. Of course such funds do come into the
Treasury and they are available for that purpose,
but it is sometimes a little difficult for the
purchaser to understand.
- 13 -
242
In view of the fact that the Defense Savings
program is carried on in the Treasury, I believe
that it would clarify the whole program 1f we could
eliminate Postal Savings Stamps and issue instead
Treasury Savings Stamps. It would only result in
confusion 1f the Treasury were to issue its stamps
at the same time that the Postal Savings System is
selling stamps. These new stamps would also be
sold through Post Offices as well as other agencies.
The Postmaster General concurs in this proposed
.
change.
- 14 -
243
6. A provision is included to remove the
tax-exemption privileges on income from shares of
stock issued by Federal agencies and instrumentalities
which were inadvertently omitted from a similar
provision in the Public Debt Act of 1941. This
would put these shares of stock on the same basis
as obligations issued by the United States and by
its agencies as provided in the Act enacted last
year.
With this enlarged borrowing program before
us it is necessary more than ever that the Treasury
exert every effort to obtain its funds from the
current income of the people. We have, therefore,
materially expanded our campaign to sell Defense
Savings Bonds.
- 15 -
244
Since last May first, when the present Defense
Savings Bond program was inaugurated, we have
received approximately four billion three hundred
million dollars in cash through the sale of these
securities. Up to December first, just prior to
the attack on Pearl Harbor, the sale of these
securities averaged about three hundred million
dollars a month. In the month of December we sold
five hundred million dollars, in the month of
January over a billion dollars, and in the month
of February approximately seven hundred million
dollars. The American people are responding
splendidly to our efforts to place these securities
in the hands of the real investing public.
- 16 -
245
within the past few months we have inaugurated a
plan for voluntary pay roll deductions to purchase
Savings Bonds. Many business institutions have
already adopted such plans and the number is
increasing each week. At the present time more than
one-half of all persons working in trade and
industry have this method for buying Savings Bonds
available to them. It is hoped that within the
course of the next few weeks practically all
businesses will have adopted these plans.
The Treasury has a tremendous program ahead
of it. No one appreciates the magnitude of our
problems better than those of us in the Treasury.
- 17 -
246
We are facing the facts squarely, and we are
working continuously in our endeavor to finance
the war program as much as possible from current
savings in order that our fiscal operations may
be a positive force in winning the war and in
preventing inflation.
-000-
247
March 13, 1942
12:07 p.m.
HMJr:
Hello.
Operator:
Lewis Douglas.
Hello.
HMJr:
Lewis
Douglas: Yes, Henry. How are you?
HMJr:
I'm alive.
D:
(Laughs)
HMJr:
And kicking.
D:
Well, I'm kicking; I'm not quite alive.
HMJr:
Lewis
D:
Henry, can you do it on April the eighth?
HMJr:
No, no.
D:
Well, I was afraid of it.
HMJr:
D:
I want to thank you for thinking of me.
Well, I'd have loved it, Henry, if you could.
HMJr:
But it's
D:
I know why.
HMJr:
It's very nice, but I don't think I'd better
take on anything like that just now.
D:
HMJr:
D:
All right, sir. I understand thoroughly, and
I'm disappointed.
But thanks for the compliment.
(Laughs) All right, Henry.
HMJr:
Okay.
D:
Hope I see you soon.
248
-2HMJr:
I will. I've just been testifying and all that.
I'11 give you a ring next week.
D:
All right. Fine, Henry.
HMJr:
Thank you.
D:
Good-bye.
249
March 13, 1942
12:08 p.m.
HMJr:
Hello.
Edward R.
Stettinius,
Jr:
Hello, Henry.
HMJr:
How are you?
S:
Good.
HMJr:
S:
I wondered if anything had happened before I
went to Cabinet on this question of coordination
on transportation?
Bob Patterson had a meeting in his office
yesterday
HMJr:
Yes.
on the whole business.
S:
HMJr:
Oh, did he?
S:
At three o'clock.
HMJr:
That was good.
S:
And he had the Maritime fellows there, and the
War Department fellows there
HMJr:
S:
Yeah.
and I don't know what the final result is,
but he tackled it immediately after you brought
it up.
HMJr:
S:
Well, I'11 call him.
I would call - Henry, if I were you, I would
call him and say you heard he had a meeting and
that he made good progress and that it is being
solved.
HMJr:
Good. I'11 call him.
250
-2S:
That thing was most helpful yesterday.
HMJr:
Was it?
S:
Yeah.
HMJr:
Good.
S:
And we're getting - we're working now on a
coordination of the entire thing.
HMJr:
Good.
S:
And I'll be talking to you again in another
few days about the whole business.
HMJr:
will you? And there's one thing which was
mentioned that I think that I might suggest,
I think you ought to take up. You know, Bob
said they got nowhere with the oil coordinator,
on oil machinery or gasoline machinery.
S:
Well, hell, we've been taking that up weekly.
HMJr:
Yeah.
S:
We've been telling Harry Hopkins about that
weekly.
HMJr:
Well, if you want me to barge in there, I'm
perfectly willing to.
S:
Well, Henry, boy, listen.
HMJr:
Yeah.
S:
If you want to take a crack there at Cabinet
meeting today
HMJr:
Yeah.
S:
you're on awful safe ground. You're on
awful safe ground just to raise the
HMJr:
Well, I'd have to have the facts.
S:
Just for you to say that you had had a discussion
251
-3on the Russian protocol, and one of the items
that you understood had bogged down completely
was the matter of some machinery for processing
manufacture of oil, petroleum.
HMJr:
Well, I'd have to have more than that, because
Harold Ickes would know more about it than I
did.better.
I think I'd better be prepared a little
bit
S:
Do you want a private memorandum?
HMJr:
Yes.
S:
For next week?
HMJr:
Yes.
S:
HMJr:
All right, old boy.
And then I'll take it up with the President.
S:
Thank you, Henry.
HMJr:
Thank you.
252
March 13, 1942
12:12 p.m.
HMJr:
Hello.
Operator: Mr. Patterson.
HMJr:
Hello.
Robert
Patterson: Hello.
HMJr:
Henry talking.
P:
Yes, Henry.
HMJr:
I hear you had a meeting yesterday afternoon,
and I wondered if you'd care to tell me what
the results were.
P:
Well, I'm still bogged down on that, but I hope
to see some daylight today.
HMJr:
P:
You do.
Yes. Somervell does not agree with Douglas -
Lew Douglas with
HMJr:
Where the hell 18 Lew Douglas in this?
P:
He represents Land.
HMJr:
I see.
P:
He represents Land, and Turney represents Eastman.
HMJr:
Yeah. Are you going to mention it at Cabinet?
P:
Well, I'm not sure I'm going. I think perhaps
the Secretary will be back.
HMJr:
P:
HMJr:
Oh, I didn't know that.
I'm not sure. He's not in yet.
Well, I'm not going to bring it up.
P:
No.
HMJr:
But I mean, as long as you're handling it, I
won't mention it.
253
-2P:
HMJr:
Yeah. Well
But if you did go, you might think it over
about mentioning it.
P:
HMJr:
Yeah.
Because
I think it ought to be solved, don't
you?
P:
Yes, indeed.
HMJr:
Yeah.
P:
Yes, indeed.
HMJr:
Right.
P:
All right, Henry.
HMJr:
Thank you 80 much.
P:
Thank you. Good-bye.
254
March 13, 1942
4:35 pm
RACIAL PROBLEMS
Present: Mr. Graves
Mr. Kuhn
Mr. Odegard
H.M.JR: Gentlemen, sit down. I haven't got a
long time to make a speech, but what I have got to
say I have thought a long time about, and that is
this. I am sorry to say that some time in the not
too distant future unless this administration does
something about our negro problem, we are going to
have race riots in this country. Now, I am just
as confident about this as I am that six months from
now or very much sooner they are going to be hanging
with their tongues out for some kind of propaganda
picture to keep us going in this war, against the
Germans particularly, and I have kept throwing out
suggestions and suggestions. One is this idea of
starting with a community sing where negroes could
come, and I just don't feel that I am getting any
place, see.
MR. GRAVES: Did you get any response from Mr.
Duffus about that?
H.M.JR: Well, Mrs. Morgenthau was over there,
and she said that she had a very pleasant meeting.
She was there with them.
MR. GRAVES: Both of them?
H.M.JR: I don't know whether Duffus was there.
They had somebody there from RCA.
255
-2MR. GRAVES: Yes.
H.M.JR: But just so that the record is straight,
I am not seeing you because Mrs. Morgenthau complained
or anything, because she said that Mahan couldn't
treat her nicer. So it isn't a result of that. It is
something that I heard at Cabinet. That is what has
got me so upset. They just take it perfectly for
granted that we are going to have race riots, and I
know nobody is doing anything about it.
MR. ODEGARD: We are having them.
H.M.JR: Now, I think that we in the Treasury
again through Defense Bonds can make a contribution
by showing the way. I think we can do much more. One
thing Mrs. Morgenthau did tell me, which she pointed
out to Mahan, went all through this next magazine
issue, there isn't a single picture of a negro in the
whole thing. They have a little piece about it, but
there isn't a single photograph anywhere of a negro.
MR. GRAVES: "Our America."
MR. KUHN: There is one.
MR. GRAVES: Pickens' picture is in it.
H.M.JR: No, there is not.
MR. KUHN: Yes, we saw it.
MR. ODEGARD: Pickens' picture is in with the
article, but in the group of children, that is what
they resent. They resent being set aside.
H.M.JR: That is what she said. Now, look, you
have got enough brains. If you disagree with me,
tell me so, see, but if you don't, let's go somewhere
and let's start - give me a community sing in New York.
What I want to know is, what the hell is the drag that
this Lucy Monroe has on us? Now, one thing that I can't
256
-3understand, in Baltimore she is managed by a paid
representative of the National Democratic Committee.
Did you know that?
MR. GRAVES: No.
H.M.JR: Well, she is. This man who takes care
of her is the paid radio man of the National Democratic
Committee. Well, he is. And they told Mrs. Morgenthau
they have got to wait until Lucy Monroe gets back before
they can do anything.
MR. KUHN: Well, that-H.M.JR: Now, there is something wrong, see.
MR. KUHN: Irrespective of Lucy Monroe, you can
have somebody there who can arouse singing in the
people.
H.M.JR: Well, my God, out of the whole country,
Ferdie--
MR. ODEGARD: Well, you have people who are pro-
fessionals.
H.M.JR: Well, we don't have to sit on our
behunkus waiting for Lucy Monroe to come back, but that
is what they are doing. Now, the broad picture is what
we are interested in. I would like to make a contribution to my country by doing something for the negroes,
see, and this is the only little idea I have had, is a
community sing, which is, I suppose, so big, and the
problem is so big (Indicating larger.) and I want you
three fellows to put your brains on it, and we have
got to do something, and if we set the way and the others
do it better again, God bless them, and they can take it
over. Now, am I crazy, Peter?
MR. ODEGARD: I think not, decidedly not.
H.M.JR: As I say, this thing - and only one
other thing I would like to do. This little thing
257
-4Ithe
would
like my way. I want to charge ten cents for
people to come in.
MR. GRAVES: To that sing?
H.M.JR: Yes.
MR. GRAVES: You mean ten cents in money?
H.M.JR: In cash.
MR. GRAVES: Not stamps?
H.M.JR: In cash, to defray the expenses. Now
again, this is silly. I was Conservation Commissioner
of New York State, and we had a toboggan slide down
mount something-or-other at Lake Placid. I forget the
name of the mountain. And who would think that anybody
would pay ten cents to go look at it in the summer time
when the grass was growing. I took in enough ten cent
pieces in the summer time from tourists to more than
pay for the maintenance of the run and the big expenses
in the summer time. And they came there and paid ten
cents to look at it, and paid for my watchman, kept
people from getting hurt, people from hurting the run,
and we were able to maintain it. Now, I would like to
try one - it cost four or five hundred dollars here,
cash out of pocket. If you had had ten cents, you would
have broken even.
MR. GRAVES: That is right. Much more.
H.M.JR: Well, there would have been enough to start
another one. Now, let me try one my way with just a dime.
MR. KUHN: At the stadium?
H.M.JR: Wherever it is. I don't wan t to get into
detail. I don't want to be looking at the tree and lose
sight of the forest, but I do want to do something for
the negroes.
258
-5MR. ODEGARD: Mr. Secretary, your idea isn't, as
I understand it, to have separate community sings for
negros?
H.M.JR: No, Harold told me I am-MR.like.
ODEGARD: That is precisely what the negro
doesn't
H.M.JR: No.
259
March 13, 1942
4:41 p.m.
HMJr:
Hello.
Robert
Patterson: Hello.
HMJr:
Hello, Bob.
P:
Henry?
HMJr:
In person.
P:
General Somervell reports that he came to a
complete agreement this afternoon with Jerry
Land and with Eastman
HMJr:
Yes.
P:
whereby this whole business of traffic at
the ports will be coordinated under Army direction
with their cooperation, and says that the con-
jestion at Philadelphia will be relieved.
HMJr:
Well, that's fine. That's a little bit better
than doing it on April 1, isn't it?
P:
Yeah.
HMJr:
What?
P:
Yeah, I think so.
HMJr:
Well, I'm delighted. I'm going to keep sending
a man up there once a week until
P:
Yes, indeed.
I see.
HMJr:
P:
Yes.
HMJr:
And I'11 send you a copy of what he reports.
P:
Yes, I'd like to see it. Thank you, Henry.
HMJr:
I thought that meeting was good.
260
-2P:
HMJr:
Yeah.
I think it clarified things a great
deal.
It was a sort of a - everybody got rid of a
grudge or something.
P:
HMJr:
Yeah. I think it clarified things a good deal.
Well, 17 it did nothing else but this traffic
thing, that would be worthwhile.
P:
Yes, indeed.
HMJr:
What?
P:
Yes, indeed.
HMJr:
Yeah.
P:
That's right.
HMJr:
Thank you 80 much.
P:
Good-bye.
HMJr:
Good-bye.
261
March 13, 1942
4:55 p.m.
HMJr:
Hello.
Operator:
Miss Tully.
HMJr:
Hello.
Grace
Tully:
Hello, Mr. Secretary.
HMJr:
I wanted through you to give a little memorandum
to the President.
T:
HMJr:
T:
Yes, sir.
He asked me to get together everybody that had
anything to do with Lend-Lease for Russia
Yes.
and give them the works.
HMJr:
T:
Yeah.
HMJr:
Well, we had everybody together yesterday morning.
T:
Yes.
HMJr:
A very good meeting.
T:
Yes.
HMJr:
And I'm able to report this much progress.
T:
Yes.
HMJr:
It developed there was fight as between General
Somervell and Jerry Land and Eastman as to who
should handle the traffic to the ports.
T:
HMJr:
Yes.
Because there's been all this congestion in
not getting the care to the ships, you see.
T:
Yes.
HMJr:
And they said they were going to have it settled
262
-2-
by April first.
T:
HMJr:
T:
HMJr:
Uh huh.
I told
hours.
them they had to do it in twenty-four
Yeah.
And Patterson just called me up and said that
they've come to an agreement, and General
Somervell 18 going to handle all traffic to
the ports and Maritime and Eastman are satisfied.
T:
All right, fine.
HMJr:
So that's at least a little something done.
T:
I should say 80.
HMJr:
What?
T:
I should say 80.
HMJr:
And tell him I'm keeping after it.
T:
All right, fine.
HMJr:
Thank you.
T:
Thank you very much, Mr. Secretary.
263
approx 3/13/42
BRITISH EMBASSY.
WASHINGTON D.C.
Dear Im Magenthan
I do thank I
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much intended u A
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263
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COPY
264
OFFICE OF LEND-LEASE ADMINISTRATION
Five-Fifteen 22d Street, NW
Washington, D.C.
March 13, 1942
The Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Treasury Department
Washington, D.C.
My dear Mr. Morgenthau,
Thank you for your letter of March 9th.
I appreciate your giving consideration to my
request for the transfer of Lawrence J. Bernard
even though you were not able to give your
approval.
Sincerely,
/s/ Thomas B. McCabe
Thomas B. McCabe
Deputy Administrator
265
MAR 9 1942
Dear Mr. McCabe:
I have your letter of March 2, 1942,
in regard to the transfer of Lawrence J. Bernard,
Assistant
General Counsel of the Treasury Department.
While I appreciate the need in your or-
ganization for people with government experience,
I find that the situation in the Treasury is such
that the services of Mr. Bernard cannot be dispensed with at this time.
I have talked the matter over with my
General Counsel who tells me that Mr. Bernard has
decided, after consideration of all aspects of
the matter, to remain in the Treasury.
Sincerely yours,
(Signed) B. Merganthaue Js.
Secretary of the Treasury.
Hon. Thomas B. McCabe,
Deputy Administrator,
Office of Lend-Lease Administration,
Five-fifteen 22d Street, N. W.,
Washington, D. C.
Lota file A.M.C
EHF:vls - 3/7/42
By turges
1:20
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON, D.C.
March 2, 1942
My dear Secretary Morgenthau:
If agreeable to you, I would like to request
the transfer of Lawrence J. Bernard of your Office.
We have need for top administrative personnelparticularly those who are familiar with and have
had experience in the Government--for service here
in Washington and in the field. It is our thought
to get a small number of such top personnel for an
intensive training here, so that they can perform
the functions required either in the Washington
office or in the missions abroad.
We are exceedingly reluctant to ask for a person of Mr. Bernard's experience and qualifications,
but, if you can see your way clear to release him,
we will be most appreciative.
Sincerely yours,
Floomas B.M. Calic
Thomas B. McCabe,
Deputy Administrator.
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Treasury Department,
Washington, D. C.
267
March 13, 1942
My dear Commissioner:
Our Defense Savings Staff in New York recently
sought the cooperation of WPA bands in connection
with rallies that had been planned to push the sale
of Defense Bonds and Stamps. The WPA authorities
there were anxious to be helpful, but cited a rule
forbidding them to use their bands for fund-raising
activities.
I am writing, therefore, to ask your help in
this matter, on the assumption that such a rule
cannot possibly apply to the raising of funds for
the Government. The WPA bands would be of immense
assistance to our program and I sincerely hope that
some way may be found to make them available to us.
It will be greatly appreciated if you will send
word to your New York people that the bands are free
to play on behalf of Defense Bonds and Stamps.
Sincerely,
(Signed) E. Morgenthau, JE.
Commissioner Howard 0. Hunter
Work Projects Administration
1734 New York Avenue
Washington, D. C.
FK:blb 3/13/42
n.m.c.
"FOR AMERICA WE SING"
268
Blue Network Program
In Behalf of
The United States Treasury Department
SPONSOR
Blue Network For United
States Treasury Departs
DATE OF BROADCAST
March 16, 1942
DATE OF RECORDING
musical production is
property of the United
as Treasury Department
is being used under
DAY Monday TIME
9:30-10:00 PM EVT
CHAIN OR STATION
Blue Network
MUSICAL DIRECTOR
Dr. Frank Black
PRODUCER AND
AUTHOR
Frank Hummert
CONTRACTOR OF
PRODUCTION
Blue Network
APPROVED BY
SPECIAL SUBJECT
MATTER:
al arrangements by the
Defense Bonds and Stamp
Network.
y not be broadcast,
shed, or made into a
on picture or stage play,
United States Treasury
Department
ARTISTS:
Rose Bampton
Lansing Hatfield
out specific individual
risstion in writing,
each performance thereof.
March 13, 1942
269
(COLD) "FOR AMERICA WE SING": ... with Rosa Bampton
NOUNCER:
2 and Lansing Hatfield as tonight's stars&
SINESS: 3 THEME UP AND OUT...
4
NOUNCER:
(COLD) In behalf of the United States Treasury Department
the Blue Network presents
5
IT
6
FOR AMERICA WE SING"
=
7
8
9
10
The program of the United States of America (PAUSE) - inspired by the promise of all and every one
of us : to do our share .. our part on our all : for
Our Country -- with the help of God.
11
ORCHESTRA UP WITH SIGNATURE MARCH
NESS:
12
13
14
15
(OVER MUSIC) Here again is America's own 48-star musical
production ... "FOR AMERICA WE SING" presented in the
interest of United States Defense Bonds and Stamps.
Featured artists on tonight's performance are
16
17
18
Rose Bampton, leading dramatic soprano, and Lansing Hatfield,
baritone, of the Metropolitan Opera, with Dr. Frank Black,
in the music and melodies of a Mighty Country -- Your
19
Country, Your America.
20
ORCHESTRA
SIGNATURE MARCH "FOR AMERICA WE SING"
21
22
23
24
25
26
27
Continuity No. 35
Page No.
1
270
(OVER MUSIC) Now - we present our stars -
NNOUNCER: I
2
3
4
5
6
Rose Bampton and Lansing Hatfield, with the entire
cast in a feature production of music from our own
Southland, in which you will hear the colorful
"Mardi Gras" from Forde Grofe's "Mississippi Suite",
"Go Down Moses", "Kingdom Coming", and the heart-
7 touching "Deep River"
8
9
ORCHESTRA:
"MARDI GRAS"
HATFIELD
& CHORUS:
"GO DOWN MOSES"
ORCHESTRA
"KINGDOM COMING"
10
& CHORUS:
11
BAMPTON
12
"DEEP RIVER"
& CHORUS:
13
NOUNCER#4
15
(OVER MUSIC) Dr. Frank Black gives you the
"King Cotton March".
ORCHESTRA:
16
"KING COTTON MARCH"
17
18
SOUNCER
Music)
19
20
21
Hate off to the laboring men of America -- to the C.I.O.
and the A.F. of L. who, in just a few weeks, have invested
millions of dollars in Defense Bonds. The locals of the
22
American Federation of Musicians in two short months have
23
bought seven hundred thousand dollars worth of Defense Bonds.
24
The followers of thrifty Ben Franklin, the pressman of the
25
Chicago Printing Union, have signed up for forty thousand
26
dollars worth. New York locals of the A.F. of L. have raised
27 nine hundred thousand dollars, and they're out to make it
Continuity No.
35
2
Page No.
27/
fifty million dollars. And the O.I.O. is matching
NOUNCER:
ont'd)
that. They want to pay for another battleship Arizona,
to take the place of the Arizona sunk at Poarl Harbor.
2
3
4
Worlmen, everywhere -- sign up to buy Bonds through
5
SINESS:
6
a Payroll Savings Plan and do it now 1
ORCHESTRA
SIGNATURE MARCH
******
7
8
9
10
11
-
(OVER MUSIC) And now, we bring you two overlastingly
lovely Scottish airs! First - the Chorus and Orchestra
in the traditional
"Blue Bells of Sootland", and
12
then Lansing Hatfield, of the Metropolitan Opera, will
13
sing
14
"Flow Gently, Sweet Afton".
ORCHESTRA
"BLUE BELLS OF SCOTLAND"
& CHORUS:
15
HATFIELD
& CHORUS:
16
UNCER:
17
18
19
20
21
"FLOW GENTLY SWEET AFTON"
(OVER MUSIC) America's greatest martial music reflects
the determination of a Mighty American people to win this
Dr. Frank Black gives you John Philip Sousa's
immortal march
"The Stars and Stripes Forever".
war&
ORCHESTRA
"THE STARS AND STRIPES FOREVER"
22
23
24
25
26
27
(OVER MUSIC) Today more than ever before do we realize
the precious value of our American heritage -- as 130
million of us are free to worship God as we choose to pray for His divine strength and guidance without
which there oan be no real viotory or true freedom.
3
Continuity No. 35
Page No.
272
To close tonight's performance of "FOR AMERICA WE SING",
2
we present Rose Bampton, leading dramatic soprano of the
Metropolitan Opora, singing the inspiring "Ave Maria"
000
3
4
followed by the hymn ... "All Hail The Power of Jesus
Name with the Chorus and Orchestra.
5
6
BAMPTON
"AVE MARIA" (Bach-Gounod)
ORCHESTRA
" All HAIL THE POWER OF JESUS NAME"
7
& CHORUS:
8
direct segue to
9
ORCHESTRA
10
& CHORUS:
******
11
12
13
Music
4
15
16
17
" "THE STAR SPANGLED BANNER"
Millions of Americans have the opportunity this
week to go on record as to the amount of sugar their
families need. From this week on, it's share and share
alike. Well, that's the way you want it to be, don't
you? Isn't that the kind of world we're fighting for?
18 A world in which no one grabs it all and no one goes
19 without. That kind of world is worth fighting for.
And the fight is worth paying for. That's why the
20
21
Payroll Savings Plan is so popular. Under the plan,
22
every working man and woman, every payday, can join in
23
and invest in Defense Bonds. If you haven't a Payroll
24
Savings Plan at the place you work, ask your boss or
25
your union representative to get it going.
26
ORCHESTRA SIGNATURE MARCH "FOR AMERICA WE SING"
27
Continuity No.
35
Page No. 4
273
I
NOUNCER:
(OVER MUSIC) The United States Treasury Department
2
thanks the distinguished artists who gave their talents
3
4
to this performance - Rose Bampton, Lansing Hatfield,
Dr. Frank Black, and the Blue Network.
5
"FOR AMERICA WE SING" will be on the air
6
next Monday night at this same time, 9:30 P.M.,
7
Eastern War Time, with Margaret Daum, colebrated
8
soprano of radio and concert stage, and Conred Thibault,
9
distinguished baritono, as its stars.
10
This is Larry Elliott speaking and bidding you
11
12
13
good night.
THEME UP AND OUT
This is the Blue Network.
14
This program came to you from New York.
15
16
17
18
19
20
21
22
23
24
25
26
27
Continuity No. 35
Page No. 5
274
March 13, 1942
TO: HAROLD N. GRAVES
SUBJECT: PROGRESS REPORT FROM DEFENSE SAVINGS STAFF
SALE OF BONDS
Actual cash receipts from the sale of E, F and
G Bonds for the first nine business days of March were
$232,100,000, a decrease of 35 percent from the receipts
for the first nine business days of February. Sales for
the first nine business days of February totaled $357,003,000,
and for the corresponding period in January were $295,087,000.
SERIES E BONDS
Sale of Series E Bonds for the first nine business
days of March were $134,882,000, a decrease of 31.3 percent
from the sales during the first nine business days of February.
Sales during the first nine business days of February totaled
$196,359,000, and for the same days in January were $189,896,000.
-2-
275
SPECIAL
Rand McNally and Company, map engravers and publishers,
sent out more than 18,000 letters to banking institutions
urging their adoption of "The Victory Club Participlan".
Samples of the promotion material to be used in this campaign
are attached.
PAYROLL SAVINGS
Fifty-seven percent of the nation's industrial payroll
employees now have the Payroll Savings Plan available to them.
This includes 17,373,204 of the country's estimated 30,400,000
industrial workers.
All but 2,205 firms with more than 500 employees have
installed Payroll Savings Plans to date. The Plan is now available to the employees of the other 70 percent, or 5,187 firms.
BANKING AND FINANCE
Four representatives of the Defense Savings Staff
spoke at the conference of Investment Bankers in Chicago on
Thursday, March 5, and Friday, March 6. Their talks were primarily
in connection with the activities of Security Dealers in promoting
the sale of Bonds and Stamps. One hundred forty-nine security
dealers' representatives have been designated to devote virtually
all of their time to this work.
-3-
276
RETAILERS
Attached is the promotion material being distributed
by the National Cash Register Company in its nationwide campaign
to place Defense Stamp displays on all cash registers in the
country.
EDUCATION
The first of a series of "Sharing America" leaflets,
designed for classroom use in schools, are now being distributed.
Four other publications - two for elementary and high school
pupils, one for college professors and deans, and one in dramatic
playlet form for use by high school pupils, are being prepared.
Representatives of the Education Division addressed
the following clubs at the Convention of the American Association
of School Administrators: Department of Physical Instruction,
National Education Association; National Association of Secondary
School Principals; Association of California Junior College
Presidents and Secondary School Heads; and the Department of Home
Economics, National Education Association.
The Department of Home Economics, National Education
Association, passed a special resolution including Defense
Savings as an important part of the emergency program for education.
BUSINESS PUBLICATIONS
To date, a total of 373 business publications have
advised that they will use our latest Payroll Savings Plan
advertisement in forthcoming issues.
-4-
277
BUSINESS PUBLICATIONS (Continued)
The March issue of AMERICAN BUSINESS is an example of
the combined advertising and editorial support which important
business publications are providing the Defense Savings Program.
This publication has a total audited circulation of 20,300, of
whom 14,196 are either presidents, vice presidents, or general
managers of large corporations.
COMPANY PUBLICATIONS
A sample of our March mailing (copy attached) for April
release was sent to 1900 company publications.
RELIGIOUS PRESS
A meeting of Defense Staff representatives and members
of the newly formed Advisory Religious Press Committee will be held
in Washington. Members of the Advisory Committee are: Donald
Sheehan, Director of Public Relations, National Catholic Welfare
Conference; Bernard Postal, President, American Jewish Press Club
and Editor of B'NAI B'RITH NEWS; and John L. Fortson, Director of
the Public Relations Commission of the Federal Council of Churches.
(Religious Press clippings attached. )
COLLEGE PRESS
A representative of the Press Section addressed editors
in the annual meeting of the Columbia University Scholastic Press
Association in New York, furnishing ways and means by which these
publications could aid in the Defense Savings Program.
-5-
278
COLLEGE PRESS (Continued)
(News clippings and program attached.)
To date 304 replies have been received from college
publications in response to our first mailing. All promised
wholehearted cooperation.
PRESS
The cooperation of all book publishing houses was so-
licited in letters sent out this week. Following receipt of
information, the Book-of-the-Month Club has already adopted our
suggestion to reproduce a Minute Man on all book jackets, and
similar cooperation by all publishing firms to carry our message
to millions of book readers throughout the nation, is expected.
RADIO
Effective immediately, all Defense Savings copy sent
to radio stations is being curtailed considerably. Daily announcements to all radio stations are being cut from five to three. All
Minute Man copy is being stopped. Appeals to women are being
reduced by 50 percent. Foreign language and farm announcements
are also being cut by one-half.
The National Broadcasting Company has arranged to carry
from seven to nine Minute Men weekly on network sustaining programs.
Similar broadcasts are scheduled by the Columbia Broadcasting
System and the Blue Network, and tentatively by the Mutual Broadcasting System.
-6-
279
RADIO (Continued)
Through the nation, 405 radio stations now have
established Payroll Savings Plans for their employees. Of these
308 report 100 percent membership.
Sixteen prominent band leaders advise that members of
their orchestras have signed up 100 percent in Payroll Savings
Plans. Other band leaders are establishing similar plans and all
are publicizing their undertakings in their radio broadcasts.
A description of "The Treasury Star Parade" transcription
series is attached. Also attached is an example of newspaper
publicity on these broadcasts of this series.
The "American Album of Familiar Music" program of Sunday,
March 8, was given over to the Treasury Department on behalf of
income taxes. Assistant Secretary John L. Sullivan delivered a
one-minute address during this program. Incidentally, recordings
of five-minute talks by Mr. Sullivan were sent to all radio stations
on March 4, 5, and 6.
Attached are three articles from the current issue of
BROADCASTING MAGAZINE describing radio activity in behalf of the
Defense Savings Program.
Here are outstanding examples of local station exploitation in promoting sale of Defense Bonds and Stamps show:
-7-
280
RADIO (Continued)
Station WIOD, Miemi, Florida, on certain days devotes
19 hours daily to sales of bonds through telephonic pledges. On
Saturday, February 21, listeners purchased $100,000 worth of
bonds. The total raised thus far is $1,500,000.
Periodically, radio stations stage broadcast "battles"
to determine which one can sell the larger amount of Defense
Savings Bonds in their communities. In four such radio "battles"
a grand total of $1,251,328 was reached.
In Tulsa, Oklahoma, radio station KTUL and the First
National Bank of Tulsa sponsored prominent civic organizations
in competition, urging them to outdo each other in selling Defense
Bonds. In one regular half hour broadcast sales totaled $240,000.
These competetive broadcasts are held twice weekly on Tuesday and
Thursday. In two weeks sales netted $692,000.
SPORTS
Major League Baseball has adopted a seven point War
Program. The Defense Savings Program is featured in two of their
seven undertakings. First on their list is:
"The Program calls for every league and club official
to allot as high a percentage as possible of income to the purchase
of Defense Bonds, from 10 percent scaling upward. This phase of
war effort will enroll 100 percent of all league and club employees,
umpires, players, scouts, office and operating employees, to the
limit of their ability to pay."
-8-
281
SPORTS (Continued)
Point Number Seven of their Program states:
"Ball parks to fly Defense Bond Banners on their
flag-poles; players to wear Physical Fitness emblems on their
uniforms; officials and players available for speaking and
morale work with the Physical Fitness department of the Civilian
Defense Committee. 11
NEWSREELS
The Defense Savings Staff Newsreel Crews operated this
week in communities in Indiana, Illinois, Oklahoma, Arkansas,
Mississippi, Oregon and Washington.
Special newsreel shots in connection with the Pledge
Campaign were made of State Administrators in Oklahoma and
Pennsylvania.
STAGE AND SCREEN STARS
Ray Bolger made a personal appearance in behalf of the
Defense Bond and Stamp sale in Allentown, Pennsylvania, on March 12.
Simone Simon made a personal appearance in the same
community on March 16.
Tyrone Power, Janet Gaynor and Cornelia Otis Skinner
were guest stars at the New York State Defense Savings Workers
Committee Meeting at the Waldorf Astoria Hotel in New York City
on March 6.
-9-
282
MAGAZINES
As the result of negotiations conducted by Fred R.
Semmis, Fan Magazine Consultant for the Defense Savings Staff,
the entire women's group of magazines of Fawcett is using as
a full-page ad, the Treasury's poster "You Buy 'Em, We'll fly 'Em".
This group of publications includes: HOLLYWOOD, MOTION PICTURE,
MOVIE STORIES, ROMANTIC STORIES, SCREEN LIFE, and TRUE CONFESSIONS.
Mr. Sammis, our Consultant, has just been named
Executive Editor of Photoplay Magazine, one of the largest and
most influential of the movie fan publications.
NEWSPAPER CARRIER PLAN
Newspaper carrier boys of 843 daily newspapers -- more
than one-half of the nation's total daily news publications -as of March 12, have sold 159,662,705 ten cent Defense Savings
Stamps or their equivalent in Bonds or Stamps of higher denominations
(Detailed chart showing sales in relation to population attached.)
(Issue of Newspaper Boys for Defense paper, published by Treasury
Newspaper Advisory Committee also attached.)
Secretary
NDLING 50,000 BONDS
in annual maturity value.
This big bond business represents a tremendous and costly
load added to G-E routine
been to assume as its sha
in
ANUARY 22 the Federal Reserve Bank of New York
General Electric an issuing agent for United States
Savings Bonds, Series E (payroll-deduction type).
Determ
of this step becomes obvious when it is realized
ompany is handling one of the largest volumes of
U.S use Bonds of any private U.S. concern Latest figures
indicate more than 100,000 employees have authorized
paymell deductions alone, involving more than $20,000,000
two Office shifts
employees Program glad The working Bond
bonds each month To mak
requires the services of two sh
Pictures on this page illus
must be taken by the Compa
subscriber by payroll deductio
and that proper records will b
1. Here an employee makes out an
authorization for payroll deductions
toward the purchase of o bond Forms
go to her payroll office, are there
checked for correctness recorded
and sent to the Bond Office of
Schenectady where they are checked
again and sorted
2. Nameplates are prepared and
checked against authorizations lists
are prepared and checked, and
authorizations are returned to payroll
offices. More than 60 extro employ-
ees are required to check and sort
the authorizations prepare addressograph plates etc.
2
3. A1 the end of each month payroll offices review deduction cards,
list employees and bonds due them,
and send the list to the Bond Office
which orders the bonds from the
Federal Reserve Bank, checks them
upon receipt, and performs other
routine checking operations
4. Names and addresses are im
printed on the bonds together with
date of issue It is estimated that
an average of 50,000 bond pieces
will have to be prepared each month
Duplicate bond stubs are imprinted
simultaneously with the original
bonds
5. Bonds and stubs are separated
and run through a machine which
imprints the date, G-E name. and
RETURN TO
FEDERAL RESERVE
3
OF NEW TORS
A
a
A
address on them at the rate of 15,000
impressions on hour. Stubs are then
photographed for record, and bonds
are checked against records and
folded for mailing.
6. Together with o notice to the
employee bonds are next automatically enclosed and sealed in envelopes, which are boxed and shipped
to payroll centers, where they are
distributed to employees. Finally,
bond stubs are sorted and sent to
the Federal Reserve Bank.
284
Analysis of Exposure to Payroll Savings Plane
March 7, 1942
Number exposed
to payroll
savings plans
Total number
Percent
in the
of total
country
(estimated)
exposed
Part A - Summary by Number of Organizations Exposed
I. Business organizations
(1) Large railroads
(2) Other firms with 500 employees or more
(3) Other firms with 100 to 499 employees
158
167
5,224
11,878
7,277
26,865
(4) Subtotal - large firms
17,260
34,309
(5) Firms with less than 100 employees
(6) Total business organizations
22,887
95
7?
50
.
40,147
II. Governmental organizations
III. Grand total
40,147
Part B - Summary by Number of Employees Exposed
I. Business organizations
(1) Large railroads
(2) Other firms with 500 employees or more
(3) Other firms with 100 to 499 employees
(4) Subtotal - large firms
(5) Firms with less than 100 employees
(6) Total business organizations
1,273,260
13,353,643
2,614,267
17,241,170
604,357
17,845,527
30,400,000 1
898,048
1,700,000 1
2,700,000
59
II, Governmental organizations
(2) State and local governments
.
(1) Federal Government
4,400,000
(3) Total governmental organizations
III. Grand total
Office of the Secretary of the Treasury,
Division of Research and Statistics.
33
18,743,575
34,800,000 1
54
March 13, 1942
Excludes agricultural employees, military personnel, employees on WPA or NYA or CCC projects,
proprietors, firm members, self-employed, casual workers and persons in domestic service.
Data not available.
1
285
Firme Employing 100 to 499 Persons Participating in Payroll Savings Plane
(As reported by the Defense Savings Staff's State Administrators)
Number of firms with payroll
Jan. 10
Feb. 28
17
Arizona
15
35
Arkenses
22
33
37
160
420
436
Colorado
Connecticut
95
Percent ofsavings
total having
payroll
plane
number
of firms
Mar. 7
Alabama
Northern California
Southern California
Total
savings plans
(estimated)
Jan. 10
Feb. 28
Mar. 7
33
36
26
66
67
142
15
23
26
489
33
86
89
42
57
58
104
285
39
58
6
495
668
679
1,171
64
105
246
107
170
38
62
63
62?
16
40
41
100
Delaware
255
84
0*
0
0
0
o
State
0
26
36
152
17
24
Florida
48
104
112
139
35
75
81
Georgia
56
94
98
589
10
16
17
Idaho
19
26
26
50
38
52
825
916
2,252
310
321
586
92
97
271
272
102
272
272
106
312
97
119
184
42
46
198
32
99
111
405
53
544
137
528
557
585
1,523
1,022
4
114
Louisiane
0
Maine
3
399
143
21
6
Sevada
7
North Caroline
171
12
664
35
123
14
17
24
66
68
145
273
300
869
31
31
1,603
4,239
29
149
157
499
South Dekots
Tennessee
Texas
Utah
773
136
21
164
145
174
345
29
713
1,393
1,441
20
31
35
24
89
89
12
35
38
14
Virginia
Washington
2,032
71
224
22
55
62
32
35
84
84
18
18
13
13
48
51
31
146
164
71
181
200
47
58
207
222
14
14
26
19
448
0
1,375
ill
26*
26
0
55
69
63
338
328
12
23
23
47
76
81
43
49
55
61
17
21
9
22
272
680
0
14
1
0
2*
30
33
100
100
100
100
94
94
42
44
2
2
Total
28
35
8
174
184
175
0
Railroads
31
24
39
0
317
79"
79
ó
30
Alaska
30
42
16
16
5
Vermont
Wyoming
47
39
61
56
13
13
Wisconsin
58
46
52
138
124
49
63
44
675
74
West Virginia
90
8
South Carolina
90
6
29
1,739
0
Pennsylvania
Rhoue Island
56
58
5
35
52
57
33
1,484
Ohio
Oklahoma
Oregon
56
505
North Dekota
34
0
39
70
8
New Mexico
New York
57
88
51
Nebreaks
New Hampshire
New Jersey
37
356
35
27
36
49
22
24
52
351
371
23
3
30
342
31
21
13
181
0
34
25
8
45
Missouri
Montana
0
7
Mississippi
100
33
0
Minnesota
100
24
5
Neasechusetts
Michigan
42
7
Meryland
36
7
Kentucky
75
55
34
5
Kensas
52
41
53
2
Iowe
0
0
1
48
37
2
8
Illinois
Indians
5
District of Columbia
0
46
49
49
3,541
11,172
11,927
52
26,917
88
13
March 13, 1942
Office of the Secretary of the Treasury, Division of Research and Statistics.
Date are for February 28, inasmuch 88 no March 7 report was received.
Firms Employing 500 Persons or More Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)
Number of firms with payroll
Alabema
42
9
15
Arizona
Arkenssa
Northern California
Southern California
6
114
(estimated)
76
19
19
19
16
16
18
143
146
196
79
33
158
158
165
Colorado
22
23
23
32
Connecticut
97
142
146
185
Mar. 7
Feb. 28
55
57
100
100
89
89
73
74
75
96
96
69
72
72
52
77
79
46
50
27
47
50
24
36
36
80
90
90
44
61
63
7
2°
28
2
2
23
52
26
12
24
Florida
18
31
33
Georgia
35
51
52
District of Columbia
Jan. 10
12
43
123
Delaware
savings plane
of firms
Mar. 7
Feb.28
Jan.10
Percent of total having payroll
Total
number
7
State
savings plans
66
143
10
9
Idaho
9
8
Illinois
Indiana
lows
Kentucky
Louisians
111
180
37
38
53
16
32
32
32
19
37
40
70
24
31
42
54
54
Maine
40
99
Meryland
370
333
92
102
105
83
87
256
320
101
261
325
11
41
Nessschusetts
Michigan
Minnesota
Mississippi
12
15
15
Missouri
0
305
100
100
50
57
53
27
36
28
0
54
100
100
78
26
154
64
65
69
71
96
98
97
969
54
54
43
28
147
147
136
0
72
70
17
85
100
62
61
23
109
41
9
Kansas
634
398
384
277
100
93
o
100
100
80
88
5
83
5
5
4
Montana
28
96
5
Nevada
61
5
3
New Hampshire
New Jersey
28
27
17
59
6
Ohio
Oklahoma
Cregon
Pennsylvania
Rhode Island
South Caroline
103
29
168
507
104
1
North Dakota
799
49
0
51
336
521
58
73
100
83
4
21
Tennessee
Texas
Utah
Vermont
Virginia
4
36
10
10*
12
12
10
27
19
187
71
57
14
92
77
13
84
43
87
80
41
53
44
95
74
51
67
41
14
99
61
137
137
135
84
72
59
55
2
69
100
21
31
71
92
92
74
61
100
100
100
100
100
O
1
Wisconsin
51
58
8
Washington
West Virginia
22
4
106
3
South Dakota
22
81
100
4
3
85
63
75
4
100
81
28
96
66
74
54
64
90
73
60
27
625
532
61
61
35
69
69
69
51
62
38
38
22
84
80
557
470
444
285
100
100
1
North Carolina
435
60
62
61
1
New York
32
1,350
5
0
New Mexico
100
100
83
6
6
95
94
78
238
227
224
185
28
100
100
100
60
5
Nebraska
68
41
36
34
0
Wyoming
0
3*
3
3
Alaska
Railroads
Total
95
95
85
4
70
72
O
98
3,185
109
5,187
109
5,333
115
7.392
Office of the Secretary of the Treasury, Division of Research and Statistics.
Data are for February 28, inasmuch as no March 7 report was received.
March 13, 1942
-
-
-
-
-
-
625
-
-
625
625
IBM
800
this day
deliveries
March 13, 1942
day
24,386
24,582
24,922
25,251
25,551
500
500
25,841
25,630
25,630
25,786
26,163
26,271
500
500
300
344
123
192
10
11
26,414
at close of
500
500
500
300
this day
none-closed
none-closed
none-closed
manufactured
(In thousands of pieces)
: Number of pieces : Stock on hand :
:
:
304
160
171
200
210
211
157
none-closed
none-closed
Number of
pieces sold
: this day
Daily changes in the stock of Series E savings bonds on hand 1
2
3
4
5
6
7
8
9
12
in Washington.
Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post
offices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults
Division of Research and Statistics.
Office of the Secretary of the Treasury,
Mar. 1
1
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Ten Business Days of March, February and January 1942
(March 1-12, February 1-12, January 1-12)
On Basis of Issue Price
(Amounts in thousands of dollars)
January
:
Series E - Post Offices
Series E - Banks
Series E - Total
Series F - Banks
Series G - Banks
Total
$ 37,321
: February
:
:
:
February
March
over
:
March
Percentage of Increase
or Decrease (-)
or Decrease (-)
over
March
over
: February
January
February
: January
February
:
Item
Amount of Increase
:
Sales
over
-$ 7,127
- 61,512
- 3,468
- 36.2
- 2.0
237,566
24,880
98,495
- 68,640
- 23,244
- 32.0
- 9.8
- 57,099
3,506
43,129
- 40.3
$360,940
-$134,795
$ 23,391
- 35.1%
$ 64,225
108,361
$ 44,448
169,873
145,682
19,329
84,525
214,322
28,386
141,624
$249,536
$384,331
173,341
- 9,057
-$ 19.777
Office of the Secretary of the Treasury, Division of Research and Statistics.
- 16.0%
- 31.9
- 30.8%
14.1
43.8
6.5%
March 13, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
CONFIDENTIA
UNITED STATES SAVINGS BONDS
Daily Sales - March, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
All Bond Sales
Bank Bond Sales
Bond Sales
Series E
Series E
Series F
Series G
Total
$ 5,811
$ 15,868
$ 2,043
$ 8,726
$ 26,636
2,975
3,395
3,869
4,179
3,480
8,459
8,833
10,448
10,696
11,586
1,629
2,658
1,680
1,759
1,586
8,780
12,558
11,870
10,825
6,328
4,967
2,804
3,156
2,686
18,636
5,719
10,002
8,114
3.944
1,365
1,533
1,133
$ 37,321
$108,361
$ 19,329
Series E
Series F
Series G
$ 2,043
$ 8,726
$ 32,447
18,868
24,048
23,998
23,279
19,499
21,678
11,434
12,228
14,317
14,875
15,066
1,629
2,658
1,680
1,759
1,586
8,780
12,558
11,870
10,825
6,328
21,843
27,443
27,867
27,458
22,979
8,488
4,162
7,287
5,504
31,068
11,246
18,823
14,750
23,604
8,523
13,158
10,800
3,944
1,365
1,533
1,133
8,488
4,162
7,287
5,504
36,035
14,050
21,979
17,436
$ 84,525
$212,215
$145,682
$ 19,329
$ 84,525
$249,536
Total
March 1942
2
3
4
5
6
7
9
10
11
12
Total
Office of the Secretary of the Treasury, Division of Research and Statistics.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
March 13, 1942.
TREASURY DEPARTMENT
WASHINGTON
OFFICE OF
March 13, 1942.
CHIEF. INTELLIGENCE UNIT
BUREAU OF INTERNAL REVENUE
My dear Mr. President:
I deeply appreciate your personal letter of
March 9, in which you commend the Intelligence
Unit on the twenty-third anniversary of its organization under my leadership.
Unpopularity resulting from our persistent
effort to collect taxes due the Government is not
of very great concern either to you or to me.
Doing your duty as you see it, regardless of public
clamor or criticism, is especially characteristic
of you, and I am glad that I may share with you
even in a small way duties which may bring criticism of this nature.
I am grateful for the wholehearted and enthusiastic support which has been so generously given the
Intelligence Unit by you and Secretary Morgenthau
during the nine years we have served under your direction. This support has contributed in great measure
to any success which has come to us.
The individual officers of our organization will
be thrilled to know of your expression of pride in the
accomplishments and reputation of our Unit.
May I express to you the appreciation of my as-
sociates, as well as my personal gratitude, for your
thoughtfulness.
Very sincerely yours,
Hon. Franklin D. Roosevelt
The White House.
TH
HITE HOUSE
WASHINGTON
March 9, 1942
Personal
Dear Ar. Irey:
On March fifteenth neither you nor I
are particularly popular. On this coming March
fifteenth we will be unpopular with more millions
of tax payers than ever before. Since we are to be
companions in misery, I feel I should take a
moment to tell you of my pride in the work of the
Intelligence Unit.
It has just como to my attention that
twenty-three years aco this coming Friday, March
thirteenth, you organized the Intelligence Unit
under my old friend, Dan Roper, who at that time
was Commissioner of Internal Revenue. As the
years have gone by, the Intelligence Unit has
become a shining mark not only of incorruptibility
but what is just as important, of A-1 efficiency.
I know how much quiet pride you have in
the reputation of the Unit. I am taking this
opportunity to 1ct you know I share in that pride.
I hope you will let your staff know of my feeling.
Very sincerely yours,
Honorable Elmer L. Irey
Chief
Intelligence Unit
Bureau of Internal Revenue
Washington, D. C.
R. Paul should get
292
this each week
am.g
MEMORANDUM FOR THE SECRETARY.
/ happened
Lad I nit
Mail Report
March 13, 1942.
Needless to say, taxation letters led all the rest
during the past week. They were received at the rate
of several hundred a day, and taking a representative
group, divided in the following proportion: General
letters of comment, usually with a critical approach,
but not violently so - 240. Of these, at least 10%
urged Government economy, and almost as many spoke of
the labor policy. In addition, there were 25 letters
on the subject of economy alone, to 16 urging taxation
of Labor Unions. There were 43 letters for the sales tax,
as against 14 strongly opposed to it. 10 workers felt
abused by the new taxation schedule, and 2 farmers.
85 "white collar" or lower bracket office employees sent
bitter protests. There were 55 abusive, anonymous communications; 18 anonymous ones that were critical, but
not violent. There were 7 reports of tax evasion; 14 requests for a lottery; and about 75 protests in letters
and telegrams of the 5% cabaret tax.
10 Philadelphians sent indignant letters enclosing
a page from the Philadelphia Inquirer with a very nasty
story about the abandonment of a CCC Camp. The story was
given first-page display, with pictures of a great number
of automobiles left to rust; clothing burned, etc. Some
of these letters spoke of the taxation program; others of
the Bond sale campaign, and they ranged from penciled notes
on cheap paper, to letters from heads of large firms.
The general mail remained about the same, with letters
and con on Bond sales, etc. There is considerable repro sentment, apparently, of the assumption that people as the a
whole are complacent, and the tendency is to return
compliment, with interest, so far as Government officials
Congress is not quite as unpopular as it was last week,
but go. there are still evidences of resentment and a feeling in
that, as a whole, Congressmen lag behind the country
their prosecution of the war effort.
See Page
15
Page 18
293
-1GENERAL COMMENTS ON TAXATION
Miss Marion R. Hogg, Scarsdale, N. Y. Would you be good
enough to call your Albany dogs off me? I keep getting
bills from Albany saying that I owe them rising amounts
on my 1940 income. (Describes case.) * * * The Govt.
did send me a refund but I returned it, and have a letter from Victor Self acknowledging receipt of the check
and saying that it had been cancelled. I have written
two long letters to Albany, sent them the block number
of my original check, and the carbon copy of the letter
which Mr. Self very kindly sent me. But all I can get
from Albany is more bills and more interest charged on
them: * # * I am enclosing a carbon copy of the second
letter which I sent to Albany, and it seems to me that
anybody with a slight knowledge of English and math
could look the matter up and see where the mistake was.
Chas. R. Long, President, Chester Times, Chester, Pa.
I wish to acknowledge your letter to the Chester Times
in which you request that this newspaper should comment
editorially upon the necessity of taxpayers meeting
their liabilities as early as possible this year. The
Chester Times would be only too glad to comply, but unfortunately, is unable to do so. The Chester Times suspended publication on November 5 last, after the Newspaper Guild of America, through its Philadelphia Chapter,
called a strike after breaking off negotiations for a
contract between the Chester unit and the Times management.
The Chester Times agreed to many of the major principles
involved. # # # The chief issue which precipitated the
strike was the closed shop proposal, on which the Guild
insisted, despite the fact it had negotiated various contracts in recent months which the open shop permitted.
* * The Chester Times in its 65-year old history, always
has supported the Government, editorially and in its news
columns. It has fought for many of the steps of progress
which are now law. It is the only daily newspaper in the
county and therefore possesses an unusual degree of leadership.
# # # But its effectiveness and worth are paralyzed
294
-2by the strike and the 310,756 residents of the city
and county in these perilous wartimes are unable to gain
any intelligence of local defense measures, of blackouts,
etc. The local industrial area is one of the most important in the U. S. today, with its hundreds of millions
of dollars worth of defense orders. We sincerely believe
the closed shop issue should be shelved for the duration,
and we are patriotic in declaring this.
Bernard J. O'Connell, Lawyer, Philadelphia, Pa. At the
present time I am setting aside a sum each month and de-
positing it in the bank to meet the income tax to be paid
next year on this year's income. I receive no interest
on the deposit and it occurs to me that there is no reason
why this deposit should not be made directly with the Collector of Internal Revenue and credited to my account.
Should the amount be insufficient on the filing of the
return, the balance can then be paid; or, if it should be
an overpayment, it can either be credited on the next year's
income tax or refunded. I know that the Treasury is selling bonds at a slight rate of interest, which can be used
for the same purpose, but it is too much of a nuisance to
buy them, the return is too small, and in any event, you
have to pay income tax on the interest and the whole thing
is not worth while.
Karl P. Harrington, Middletown, Conn. In reading your
statement yesterday concerning the changes to be expected
in the new tax law, I wonder If in referring to "pension
trusts", you contemplated removing Carnegie "retiring
allowances" from the non-taxables? These retiring allowances, arranged many years ago, are still available for a
few of the older generation of college teachers, a notoriously underpaid class. * * # Such of these beneficiaries
as still survive in old age have but few years to live,
no appreciable opportunity to add to their income, and
the certainty of expensive illness and death for themselves and wives in the near future. Their income cannot
increase, as does that of the ordinary laboring man in
these days, but grows practically less as inflation inexorably advances. * * For men of this type, it would
be cruel and needless hardship at the close of life to be
taxed materially on this slender income, on which by thrift
and economy of expenditure they may manage to finish their
lives without incurring other debts till the final day
comes.
295
3-
John W. Rust, Lawyer, Fairfax, Va. * During my
eight years in the Virginia State Senate I studied
the question of taxation, and I am of the opinion that
the only manner in which the United State Government
can obtain the necessary funds for the prosecution of
the war is by a general sales tax. As you probably
know, Virginia is practically out of debt, and has
followed the "Pay as you go" plan, and I feel that
this is a sound policy for the United States Government. * # # I know of no fairer tax than a general
sales tax which is based upon the money you spend.
If one person desires to pay $100 for a suit of clothes,
he pays a large tax, and if another person desires to
pay $10 for a suit, he pays a tax in the same proportion.
If the continued heavy burden of taxes is to be carried
over years to come, it will be a detriment to future
generations. * * At the present time, a great many of
the laboring men are making more money than professional
men, and are wasting every dollar of it by spending it in
the most lavish manner, and their spending should cer-
tainly be taxes. * #
Louis H. Parrot (Life Insurance), Boston, Mass. It is
my belief that you can block a hole by which many millions
of dollars are ducking taxation through this Retirement
Income Pension Plan. A certain number of these Corporations are to be commended; however, many of these plans
are being put in force by Corporations mainly to take
care of their executives, using enough of their employees
to legalize the plan, and enable them to live up to the
letter of the law. This method accomplishes two things.
(1) The plan is nontaxable - whereas (2) if it were paid
to the stockholders in the form of dividends, the Government would receive their share of the income.
296
-4-
Robert R. Appel, Attorney-at-Law, Lancaster, Pa. I wish
to congratulate the Government of the United States for
the very fine job it is doing in financing the War. Defense
Bonds, regulation "W", and increased taxes in all respects
meet with my approval. All American citizens should feel
great pride in the fact that our Government has profited
by the mistakes made in financing the last War. # You
propose to increase income, estate and gift taxes. My
suggestion is that these taxes be increased two, or if
necessary, three times, but that the increase be evidenced
by non-interest bearing certificates of deposit, maturing
in ten or more annual installments, commencing at a fixed
period, one year or more after the war is over. (Other
suggestions.) * * # It makes me very happy to feel that
I may write to you in this way with perfect propriety, and
I hope that forevermore a private citizen of this country
may send his ideas to his public servants with full con-
fidence that they will receive the attention they merit.
Louis K. Forberger, N.Y.C. While our great country and
the overwhelming majority of its people are straining all
their physical and material efforts to overcome our enemies,
it grieves me and makes me fighting mad to know that one
group of men and women workers fail to make any income tax
returns. I am referring to the many thousands of waiters
and waitresses in the hotel and restaurant industry.
Failure to make any return is invariably explained with
the reason that employers actually pay them less than $750.
I have spent my whole adult life in this industry as a
worker and as an executive. This daily contact enables
me to state the fact that tips range from $15 to $60 per
# Not more than 20% of these people earn less
than $1,500 annually. There are over 10,000 members in
the several locals organized in New York City alone, and
week.
half as many working in open shops. There is a million
an
am
dollars collectable in this city alone
I
American, 59 years of age, and a manager of a very busy
restaurant on Times Square. I am sorry that I cannot en-
list to fight, but I am eager to help in the way I know
I able to. If you find any merit in what I have had
to am say, I ask you, Mr. Secretary, to refer me to the proper
person to see here in New York City.
297
-5A. H. Eichholz, Long Island, N.Y. When the State won't
permit deduction of the Federal income tax, and I thus
have to pay State income tax on the income tax I've paid
the Federal Government, isn't that the double taxation
forbidden in some part of the Constitution? And as the
Federal Government, of course, is the country, while a
State is only part of the nation, can't the Federal
Government stop such double taxation on the part of the
State, insisting that Federal income taxes can be de-
ducted when paying State income tax? * # * Why can't the
tax experts work out a simple and practical method for a
tax on gross income, thus bringing the Government the
revenue necessary to operate it and at the same time avoiding these terribly complicated income tax forms, avoiding
all the minute detail they require? It's done, as a method,
with Social Security. I just can't see why one couldn't
state he earned so much, gross, during a year. The gross
income tax would be whatever it would be. The tax would
be figured in one minute. No deductions of any kind, it
other than OTHER TAXES PAID - property tax, etc., and
would all be a great relief. It certainly would save
enormous sums of money for keeping millions of tax records,
investigations, and so on. # * *
Mrs. Henry Bryant, Waukesha, Wis. The Treasury is to be
congratulated on the simplified income tax return, Form 1040A.
Terry Staples, Saugerties, N. Y. If there is not a complete elimination of all non-defense expenditures, you
will not have any support from me for your new tax measure.
Also, if you make joint returns compulsory, I will get a
divorce.
298
-6Favorable Comments on Taxation
Percy W. Darby, Vice President, The Marine Trust Company,
Buffalo, N.Y. I received a letter today from a young
woman for whom I have prepared income tax returns for a
number of years, usually amounting to about $300.00.
This year the figure is $1,212.00, and the comment on this
increase is in such a loyal spirit that I am passing it on
as a pattern for the folks who are complaining about the
amount of their tax: "This year I'm sure I can pay $1,212,
and if the Government uses the money wisely, I am happy to
pay it. Next year with falling sales and rising taxes,
things may be harder, but one has to live from hour to
hour. Already we all want so much less than we did three
months ago. There is a real pleasure in making what one
has do. I am sure that the majority of our people have
this same attitude.
Mrs. Raymond J. Ferguson, Hartford, Conn. The enclosed
clipping expresses so well my and many other persons' opin-
ion on this great question of taxation. Each day as one
reads and hears over the radio the billions spent and to
be spent, respect and almost awe is felt for the persons
responsible for the planning. Nevertheless, there are a
few questions in Mr. and Mrs. Average Citizen's mind. As
one of these, may I express a few of my thoughts? I am so
very thankful that thus far, there has been no general sales
tax. It surely is not a fair or equitable tax. I hope we
may always avoid it. (Remainder of letter somewhat unfavorable.)
John P. Davenport, The University Club, Buffalo, N.Y.
Please accept my wholehearted support for the Treasury
Department's 1942 taxation proposal. It may seem like a
heavy schedule to the rank and file, but I believe deeper
thinkers will readily agree that a sound taxation program
in times so critical is the best protection against inflation. * * # I urge you strongly to maintain your beliefs
on this matter. # #
V. B. Glisson, Pritchardville, S.C. In my section of the
country we heartily approve of your tax recommendation.
How about snuff and chewing tobacco - the dirtiest habits
on earth. In fact, all kinds of foolish things. A general
sales tax would be even better.
299
-7Mrs. Sidney J. Beaum, Newark, N.J. Your proposed tax
Bill to Congress is both sound and equitable, and if
followed by that body, would be a step forward in the
right direction. An excess profits tax on invested
capital will do much to control profiteering. I was
pleased to see that your department did not advocate
a general sales tax.
Charles F. Watkins, Detroit, Mich. I want to commend
you for your remarks before the Taxation Committee when
you asked them not to incorporate the withholding tax
in their bill. You were right in telling them that the
voluntary plan is working satisfactorily. If the Committee will come right out and say definitely that there
will be no payroll withholding tax, there will be a rush
on the part of public employees to buy Bonds. If we
buy the Bonds and then Congress follows with the withholding tax, we will be sunk. We won't have anything
left to live on. There are 7,000 school teachers in
Detroit alone who will be 100% for Bonds. It is the uncertainty that delays. # # # I come from a large family
up in the Thumb of Michigan, where they grow good boys
like Frank Murphy. All of our folks voted over and over
for Frank's father for Prosecuting Attorney. I started
out in 1896 by voting for Wm. J. Bryan. We all come
honestly by it. I watched your father's career as U. S.
Ambassador to Turkey. He was a busy man. It was nice
of Mrs. Morgenthau to come to Detroit. She justly deserved
a fine welcome.
Samuel L. Bodek, Yonkers, N.Y. I write this letter to
tell you of the "New Spirit" that has sprung up since
"Pearl Harbor". It is the spirit of the "Taxpayer" who
in the past felt uncomfortable when tax time came around,
but who in the present feels that they are doing their
part in this all out effort. I can tell you this because
of my position as a Practicing Public Accountant. #
That we are creating a new spirit in our clients, a spirit
that it is wonderful to pay taxes, and that they are mak-
ing a down payment on their liberty and to make a better 15th of
world
for them and their children. # # After the
March we hope that the computation of taxes collected will
be optimistic, and I want to assure you that if my country
calls for more taxes, I will be on the front line seeing
that they get them.
8-
300
Charles F. Stickney, Daytona Beach, Fla. The attached
clipping from the local morning paper greatly increases
my already high regard for your position, re taxes.
("Low Incomes Taxed Enough"-H.M.Jr.) # * * You have the
second toughest job in Washington, and whatever the out-
come of the tax problem is, I shall always have a high
regard for your stand, as per enclosed clipping. I have
voted a straight Republican ticket for 49 years, but I am
now behind "My President" 100% for the duration, and after.
R. L. Prince, Charlotte, N.C., I like your tax program
and I want you to continue to insist on higher taxes.
It is not fair to my children to pass such huge national
debts on to them when we could be paying much of them now.
I am a member of a labor organization but I do not approve
of the attitude taken by our various union officials, and
I think you do not. The union officials who preach the
least work for the most money" are the most despicable
type of saboteurs I ever heard of # # # There is no rea-
son why I should have had a holiday on Feb. 22, and there
is no reason why I should work only 40 hours per week.
My group of employees could very well absorb enough work
to release 20% of our workers for the armed forces, or
other war work, and we would like to do it for straight
pay, not time and one-half or double time. Paying too
much for anything is waste, whether it is material or
labor. We must have a revision of our labor laws, and a
definite labor policy if we are to hope for this Administration to ever have the full confidence of the general
public. Mr. Morgenthau, please use your influence to help
bring about such an adjustment. The CIO and AFL are not
too big to handle if we begin at the top.
-9-
301
Unfavorable Comments on Taxation
Albert E. Barnett, Nashville, Tenn. (Copy of letter
addressed to the President.) According to radio
and newspaper announcement of Mr. Morgenthau's new pro-
posals to Congress, my tax next year will be not wholly
to pay for the defense costs, but also to keep me from
spending foolishly and thus helping create inflation.
There are multitudes who will be financially benefitted
by this defense program. I will not make a cent on
it. It will cost me my older boy, just turned twenty,
will increase the cost of living for my family, and will
probably cause salary reductions due to the vanishing of
income from endowed funds. I have a bank loan of $1,150,
a mortgage on my house, and obligations for insurance that
I may have to drop. When Mr. Morgenthau talks about taxing
me to prevent foolish spending, I should like to invite him
to try to discharge my obligations on my annual income.
Last week, I was in the office of another salaried
friend. He remarked that he was that date dropping a $5,000
endowment insurance policy, the quarterly premium for which
was $65.00. He is a man with four children and his health
is precarious. His reason for doing this was that the addition of income tax and the promised steep increase in tax
schedules would make future payments on his insurance im-
possible. It is unjust that this man should be taxed
out of his insurance when there are corporations profiting
so heavily from war contracts that dispassionate investigation sets as high as 251% as the measure of their net take.
I have no word of criticism of so-called non-defense
spending. When people never friendly to the New Deal, such
as Harry Byrd and his ilk, begin to howl for a reduction in
non-defense spending, I immediately begin to suspect that
this is about the only spending the Government is doing The
that is apt to benefit the masses of the people.
Congressman who votes a tax Bill on the American people in
predicted on the reasoning attributed to Morgenthau the
press and radio yesterday and today, is going to face an
irate constituency. My own feeling is that an increase in
so-called non-defense spending, even including Mayris attack Chaney,
is distinctly preferable to reduction. I thought the brutal and
on Mrs. Roosevelt at this point was dastardly and
un-American. The people are getting somewhat suspicious
302
- 10 that those "Dollar-a-Year" men so generously loaned to
the Government are being permitted not only to get fat
contracts for their companies and the inside track in
the matter of priorities, but that they carry a weight
at the council table when tax schedules are being fixed
that the little man cannot stand, and for which his only
relief will be his ultimate revolt at the polls.
C. H. MacVey, Canton, N.Y.
# The millions of other
Americans who have to pay the bills have a Fight to demand that the Government spend this money intelligently,
and that they immediately eliminate all public spending
not necessary for the winning of this war. On a recent
trip to Washington I was utterly disgusted at the prodigal
spending of public funds for useless purposes.
R. H. Hostins, Anchorage, Ky. I am writing you to ask why
you do not demand that the Unions - A.F.L. & C.I.O. pay
their share of Federal Income Taxes the same as any business,
large or small, partnership or corporation. * I understand they are the largest depositors nationally at this
time. Also A.F.L. and C.I.O. do not even have to report
their income -- if this is true, it certainly is a shame.
I know of no one in the Administration in Washington who
has the nerve to demand that such existing condition be
corrected at once, without fear or favor or politics,
except you, Mr. Morgenthau. Also I advise that a national
sales tax at the source be collected. Let all pay in this
emergency -- this is not time for politics -- so inform
the Ways and Means Committee.
Leslie Lacroix, Evansville, Ind. (Copy of letter addressed
to Congressman John W. Boehne, Jr.) # N # The suggested
income tax is unfair to salaried people because they are
the only ones whose income is definitely known and who pay
100 per cent of the tax. Those in business, the professions,
farmers, etc., not on a salary, whose income is not fixed
and is difficult to ascertain, do not pay as much
in taxes
# Now as
under the income tax plan as a wage earner.
to a sales tax being hard on poor people. If Secretary
Morgenthau is referring to those on Relief, W.P.A., c.c.c.,
N.Y.A., Food Stamp Plan, etc., his statement overlooks the
303
- 11 fact the Government takes care of these people anyway.
As to the rest of us; in my judgment there is no tax
fairer than'a sales tax. You pay as you buy and in
proportion to the amount you buy. The farmer, the
doctor, the lawyer, the wage earner, business man, or
politician will pay the amount of the tax when and as
he buys, and you will not have disputes as to the amount
of tax due under the income tax plan, with some taxpayers settling with the Treasury on a 50, 70 or 80%
basis - such as a U. S. Senator from Pennsylvania re-
cently did. # *
Clifford Mecouch, Asbury Park, N.J. Because of greatly
increased food prices, and the increase in the cost of
living generally, it is impossible to pay income taxes
out of current income. Instead it was necessary to drop
$3,000 of life insurance and realize the cash value in
order that I can pay 1941 income taxes. # # * In the name
of Almighty God, and for the sake of America, STOP PLAYING
POLITICS with taxes and give us a direct sales tax of 10,
15 or even 20%, if necessary, to raise war funds. Keep
away from the asinine withholding at source plan, thereby keeping a large percentage of earnings from being
thrown back into the country's business structure. * # #
What we need in Washington is First - Taxation on an
honest basis; Second - Discontinuance of boondoggling
with the billions being handled; Third - A FIVE BILLION
reduction in non-defense expenditures, and elimination
of about 90% of the various Commissions now set up whose
efforts overlap and nullify the actions of each other;
Fourth and last - A law passed by Congress making it an
act of sabotage to cause to be called or to call a strike
for the duration, or an alternative law that will permit
the boys being called into service the same right to
strike as is accorded labor misled by subversive, Communistic, Racketeer Leaders that they are unwilling or
unable to dethrone.
#
*
#
- 12 -
304
Comments on Present Emergency
Myrion Isaac Velozquez, Rio Piedras, Puerto Rico.
I have the pleasure of sending you my first dollar recibe working. I ham in 8th grade at Hawthorne School.
I earned these money helping mother when she come of
school. I send you this dollar with much joy, and I
think that all the childreom shall give his first dol-
lar recibe working for the nacional defence. With all
the respects, (Signed) Myrion Isaac Velozquez.
Russell Whitebear, Secretary, Tribal Council, Crow Agency,
Montana. (Letter addressed to the President and referred
to us by the White House.) The General Council of the
Crow Indians on January 6, 1942, adopted a Resolution,
the purport of which was to assist you in your war effort
by turning over $10,000 of their Tribal funds, now in the
Treasury of the U. S., and any and all natural resources
on the Crow Reservation to use as you saw fit, without
any charge, for the duration of the war. This includes
oil, bentonite, coal, and any other deposits which are
now known to exist here. This Resolution was presented
to you through the Commissioner of Indian Affairs, and to
date we do not know whether you received same or not, and
in the event same has been dispatched to you, will you be
so kind as to let us know so the information may be passed
on to the Tribal Council.
J. H. Stagg, Beaumont, Texas. (Telegram) Stop all soil
conservation and parity payments. The Army and Navy need
it more than the farmers. I think the farmer should help
support the Government, and not the Government support the
farmer. From a cattleman and rice farmer.
Mrs. Olive Simpson, Detroit, Mich. Information has reached
me to the effect that you feel rationing of all consumers'
items is essential now. If this is the truth, I wish to
state as an observer and social worker that this would be
the most constructive movement the Administration could put
into effect.
305
- 13 -
A. Rogers Mielly, Houston, Texas.
People of this
nation as a whole are not complacent as charged by many
#
people in Washington, who are not familiar with the facts.
Perhaps leadership is lacking in some quarters, and with-
out leadership that sets the pace, I truly ask in all
sincerity what are the people supposed to do? One day
we are asked to save razor blades, and tooth paste tubes,
and the next day we learn that the Govt. is not ready to
make use of 10,000 tons of old street car rails which one
can observe in Houston each morning when going to work,
for it is buried in the street pavement. # We also get
considerable gossip down here, which does no one any good,
such as the information disseminated by Peggler, and others.
First we hear that Henderson is going to stop the sale of
some commodity because it's a critical material, and immediately the price goes up, and the rush is on. We also
hear that Mr. Welles wants Mr. Hull's job, and so and so.
We understand that the President is difficult to deal with,
and every one must get on with Harry Hopkins if he wants
the President to act favorably on any project or proposal.
If any business was operated the way our affairs are in
Washington, and the leaks got out to the employees, it certainly would be too bad. In conclusion, I want to say as
one good American Citizen in Texas, that we know we are at
War, and we want to pay our just tax as it becomes due.
# Tell us what to do and we will do it, and last but
not least, cut out some of those columnists in Washington
who keep everyone upset.
J. Brooks Mellor, Severna Park, Md. # # " At times I am
so mad that my weakened heart is affected when I think of
the criminal negligence that has pervaded some of the
Departments in Washington. We had all the money in the
world to buy up wheat, corn, cotton and the things of
which we had a superabundance, but no one gave a thought
to the purchase of the things we had not, and on which we
were absolutely dependent such as rubber, tin, manganese.
Today you frankly tell the people how much greater taxes
will be and this is, of course, to be expected, but how
can we do it. * # # Every dollar I earn is earned by the
use of a car, and I could not earn a cent without one. 90%
of all money after a careful check of last year's disbursements went to others who are absolutely dependent on a car
to make their living.
I may be presumptuous, but it
306
- 14 -
certainly seems to me that if the right kind of com-
mission headed by Mr. Summer Welles were at once dis-
patched to Brazil, and that country made to see the
importance of rubber shipped to us, that regardless
of the cost of the rubber, it would be forthcoming im-
mediately from the Brazilian Jungles where we formerly
got it.
Eagle Foundry Company Employees, Belleville, Ill. We,
the undersigned employees, use this method of calling to
your attention the effect that curtailment of materials,
caused by the Defense Program, will have upon the lives
of the workers of this community. * * * The Management
of the Eagle Foundry Company called upon us, and through
a personal explanation, worked out a plan which they were
willing to handle, in regard to the purchasing of Defense
Stamps and Bonds, by taking out a portion of our salary
each week. Every worker has purchased at least one Bond,
and the prospects are that these workers would buy more
Bonds, if permitted to work. We have supported the
President's National Red Cross Relief Fund 100%. This
firm has been manufacturing stoves, (both heating and cooking) some for Civilian, and a large amount for Defense
Housing Projects, and if given materials could give their
employees steady work. * * # We urge you to do whatever
you can to help us in this matter, and will greatly appreciate any service you or your Department can give us.
W. C. Simons, The Lawrence Daily Journal-World, Lawrence,
Kansas. I have before me your undated circular letter in
which you ask the cooperation of the Journal-World in try-
ing to secure early payments of income tax. Everyone wants
to do his or her part in aiding the United States to win
the war, but the one thing that hangs like a millstone
around the neck of everyone is the atttitude of the Administration towards organized labor. Why in the name of heaven
the Administration does not expect of labor the same sacri-
fices that are made by everyone else, I don't know. It
simply doesn't make sense to send our boys into the army
where they will have to work twenty-four hours a day for
$21 a month, and then pay other men exorbitant wages toit
furnish the supplies that the soldier needs. # # If
is possible for you to exert some helpful influence along
- 15 -
307
this line, it would be the most popular thing with the
masses that could possibly occur, outside of complete
victory over our adversaries. As far as the Journal-
World is concerned, it has done everything possible to
aid the Government, and will continue to do so.
George W. Miller, President, The Detroit - Wayne County
Tool & Die Council, Detroit, Mich. Our country is engaged
in the greatest tooling program in the history of the
world. The national interest requires that this program
now be completed with utmost dispatch. Yet this gigantic
and important tooling program is proceeding in the most
unorthodox and inefficient manner. There is absolutely no
planning or coordination in the tooling effort. It is
proceeding on the theory: "Every man for himself". The
result: Chaos and confusion. This, we believe, is the
greatest weakness of our War effort. # We would not
write complaining about these matters, if we did not believe something could be done about it. We submit herewith
a Tool Procurement Plan which we believe will go a long
way in the direction of reducing the time necessary to retool the Automobile Industry. We ask you to study it. Get
the opinion of experts (not corporation men), and if possible have the Government put the plan in operation. We
suppose that by this time you are wondering why we have sub-
mitted this plan to you, the Secretary of the Treasury. We
shall be frank in our answer. This plan was drafted early
in December, 1941, and on December 29, 1941, was submitted
to the now defunct Office of Production Management, together
with other U.A.W. - C.I.O. proposals. It got the usual O.P.M.
run around. A management group in Detroit, announced in the
public press that they were adopting some of the proposals
(without reference to source) on a voluntary basis. While
this attests the soundness of our plan, never-the-less it
was a futile gesture. # # * We are sending this letter and
plan to you, Mr. Secretary, because certain recent events
have created a very high respect for you among the rank and
file of our Union. You are known here as a man who gets
things done. Short on Words, long on Action. It is known
that you will take an interest in problems in relation to
the War Program, outside of your jurisdiction, when there
is a sound basis for so doing. # # # If our presentment of
this plan fails to arouse any interest in you, please do
not refer it to the people who have been kicking it around.
Just throw it in your waste basket. If it contains merit,
we shall be glad to come to Washington and explain it at
length.
308
- 16 Favorable Comments on Bonds
Richard Roy Readely, Mount Vernon, N.Y. I am not too
well acquainted with the Government in the respect that
I didn't quite know who to write. I am thirteen years
old and realize I'm a bit too young to fight, and I want
to do something. I have bought a $25 Bond already and am
starting on a second but I felt I would like to do something more than just buy them, and that's why I have
written to you. I should very much like to sell Bonds
and Stamps. I would be very grateful to you if you would
send me a certain amount of Bonds and Stamps each month
for me to sell. Upon receiving the Bonds and Stamps I
will mail you the money of the ones I had sold of previous
shipment.
Mrs. Antonette Kalal, Roy, Mont., submits a poem to aid
the sale of Defense Bonds -I
I wish I could do something grate,
As not to live in vain,
To safe our dear democracy
Made dictators act humane.
II
Naw the are wild like jungel wolfs
Just destroy dount care how.
Day come when we call them to acaunt,
I wish it could be don naw.
III
I will buy all the BONDS I could,
When ever possibili
To safe our freedom our country,
Wake up wake up brotherhood.
Charles Getchell, San Marino, Calif. It's awful hard
for a boy to sit at home and read in the newspaper about
the brave men on Wake Island, and the Bataan Peninsula
309
- 17 -
and not be able to help them. I'm only twelve years old,
so I can't fight for Uncle Sam on the battlefield yet;
but I'm going to join up as soon as I can. Right now,
though I want to help Uncle Sam in a different way, by
selling Defense Stamps. I know that the Government needs
billions of dollars to build ships, tanks, and guns.
I want to raise a share of that money by selling Defense
Stamps. We can't let those gallant soldiers down. Please
let me help.
Fred Addonizio, Ritz Hotel, Washington, D.C. I am taking
the liberty of writing to you. I am quite sure if many
others in my line of work also took this opportunity of
expressing their true feelings, and gratitude, in which
this wonderful country of ours is offering us employees
in organized labor today, our sad war in which so many of
our brave boys are fighting today, would be over very
shortly. The point that I am getting at is this -- our
country needs help badly at this present time; it is our
sacred duty here at home to buy as many Defense Stamps as
we can afford to buy. The question today is not how much
we can afford to buy in Defense Stamps and Bonds; the
question is - why can't you, Mr. Secretary, suggest to
Congress to try and pass a Bill making it compulsory for
men on defense projects to purchase Defense Bonds. Most
men employed on these defense jobs earn from $118 per week,
plus overtime, which I would say amounts to about $140 per
week! # # I pray to God in Heaven that such a Bill, if
introduced to Congress, passes by a unanimous majority.
Franky Hober, Brooklyn, N.Y. I know you will think I am
a pest, but I just had to thank you from my heart and from
my "Help America" club. It was really swell of you to
answer us. If you ever need us for anything, we are always
there to help you. Each time I receive a letter from you,
I get such a thrill. Our club is saving up money to buy
Defense Stamps and First Aid Savings Kits. Our club is
going on for a month; in that time we have an $18.75 Bond,
and we are learning First Aid from the Journal. Let me
thank you again. From "Help America" President, Franky
Hober. P.S. Our theme song is, "You're A Sap, Mr. Jap".
310
- 18 Unfavorable Comments on Bonds
Mrs. R. T. Bright, Dallas, Texas. *
*
Some assurance
that our buying of Defense Bonds is being matched by
other defense efforts will do more to stimulate the buying of them than the best radio programs that could be
put on every night in the week.
D. G. Fisher, Davenport, Iowa. Referring to current
radio broadcasts, and your printed matter urging the pur-
chase of Defense Bonds regularly from pay checks, I would
like to know whether you and the employees of your office
are doing this, and the approximate percentage. I would
also like to know whether the members of the Congress and
the Cabinet are so doing, and the approximate percentages.
Horace S. Archer, Tampa, Fla. I note from today's "Tampa
Morning Tribune" that Major Benjamin H. Namm, a representa-
tive of your (our) Treasury Department has stated that it
may become necessary for the Government to force people to
buy Defense Stamps and Bonds! I would just like to inform
you, Mr. Secretary, that if you, also the Administration
from the President down, all those Senators, Representatives
and yourself too, would stop playing politics, you would
find that you - the Administration - would have the backing
of the American people 100%. # * # Right here in Tampa there
is a shipyard. Well, last week a man - "a free born American
citizen" - who wanted to work, went out to the yard. Oh,
yes, they could give him a job, but first, he would have
to see a Union Labor Leader and get a card. Well, the man
called on the Union Leader. "Oh, yes, we will give you a
card, but it will cost you $132.50. If you don't have the
money to pay for the card, we will take it out of your
wages, $2 per day
Now Mr. Secretary, what are you
doing about taxing these Labor Unions? I did not read in
Wednesday's papers that you made any mention of them when
you were on the stand on Tuesday
LUETZOW
John C. Lintzon, Mt. Vernon, N.Y. I just wish you to know
I am discontinuing my monthly Defense Bond subscription be-
cause your Dept. refuses to give me an intelligent answer
to my request regarding a Bond which was inadvertently
destroyed. I have been corresponding with your "Fiscal
Service", ref. CL-SS &ASB since November last, and am getting
no
Dan where. Bell- * why ? Why ?
311
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
March 16, 1942
TO THE SECRETARY:
Regarding your note on page eighteen of
the weekly memorandum of mail comments, there has
been quite a bit of correspondence between the
Public Debt Service and Mr. John C. Luetzow (not
Lintzon) of Mt. Vernon, New York, regarding a lost
bond.
That Division has been trying to get a
description of the bond as well as the number in
order that a caveat may be placed against the
redemption of that bond in the Public Debt Service
records. The number was just received from the
Federal Reserve Bank on March thirteen, and a letter
went out today advising Mr. Luetzow of the steps
that will be necessary for him to take to secure a
duplicate.
DWB
DEFENSE
BUY
UNITED
STATES
SWINGS
BONDS
PUSLIMES
312
For your information.
March 13, 1942.
Archibald MacLeish
To
From Alan Barth
EDITORIAL OPINION
ON THE WAR:
THE DEMAND FOR ACTION
Urgency
Appreciation of the war seems to be shifting from an
intellectual to an emotional level. American newspapers no
longer chronicle events in the Far East as mere stages in
a remote, though exciting, drama; they have lost some of the
detachment of spectators, and have become participants. Accord-
ingly, they are beginning now to portray the war as a real and
vital and immediate concern of their readers. A genuine sense
of the seriousness of the situation is seeping through news and
editorial pages.
Awareness of danger has, of course, brought with it
a strident demand for action. Many and varied, yet generally
unspecific, are the formulae proposed. The commentators know
only that they want desperately to hit back at the enemy; they
are, for the most part, pathetically conscious that as armchair
strategists they lack the information indispensable to the
-2-
313
determination of policy. Out of the frustration and impotence
thus created, there surges, naturally enough, anger, impatience
and discontent.
Only drastic action can assuage these feelings. "Scorch
the comforts," The Washington Star admonishes. Mrs. Roosevelt,
Walter Lippman and George Gallup urge full mobilization of all
men and women in America. Donald Nelson's two strong radio
pleas for increased production are fervently endorsed by the
press. Every editorial page exhorts the public to serve and
sacrifice - rarely telling it in more than the most general terms
what services and sacrifices to render.
Regarding the battlefronts, there is a similar jangle of
editorial pep-talking. The commentators are beginning to realize
that offense and defense are not necessarily separable. "Having
failed to send adequate reinforcements to Java in time to save
that extremely valuable bastion," " says The Washington Post, "the
Allies must do everything in their power to make Australia impregnable
The successful defense of Australia would make possible
that ultimate offensive against Japan without which the war in the
Pacific cannot be won. "
But The Chicago Tribune, customarily the leading exponent of
neo-isolationism, wants the offensive against Japan to be launched
without delay. "World strategy," this newspaper reasons, in spite
-3-
314
of its normal hostility to Communism, "demands that Russia be
given every aid to keep her in the war against Hitler." Asserting that the most effective supply route to Russia is closed by
Japan, The Tribune argues: "By beating Japan we can see that
supplies for Russia again move over the trans-Siberian railroad.
The situation demands that we concentrate our strength against
the Japanese
It will be fatal folly if we fail to recognize
that at this time she is our most dangerous enemy and the one
by whose defeat we can contribute most to the eventual victory
of our associates all over the world."
There is a rather widespread revival, on the other hand,
of the hope that Europe can be invaded from the West. Continuance of the Russian counter-offensive, the Nazis' admission
that they have suffered a million and a half casualties on the
eastern front and the success of recent British air raids have
led some commentators to suggest that the time has now come for
British and American forces to attempt the opening of a new
front in Europe. Even if the attempt fails, they reason, it
can have great value in relieving the pressure of the anticipated
Nazi spring offensive on the Russians. Whether or not this sort
of thinking has any sound basis in the military realities, it
seems eloquently indicative of the eagerness for drastic and
dramatic action now.
315
-4Dupes
The Axis nations, prior to the outbreak of war, made
a practice of freely distributing radio receiving sets to those
peoples, particularly in "backward" countries, to whom they were
desirous of addressing their propaganda. They felt no need,
however, to go to any similar trouble or expense in such an
"advanced" country as the United States. They relied upon the
American press, because of its competitive nature and its zeal
for the complete coverage of the news, to distribute their
propaganda for them.
American newspapers, along with domestic radio stations,
have, in fact, made themselves outlets for Axis "news" and have
given it a currency and circulation far beyond the poor powers
of short wave transmission to achieve. They have, moreover,
put upon it the imprimatur of their own reliability and respectability, disarming Americans who would be prepared to discount
it if it came to them directly via the short wave with its
propaganda purpose undisguised.
During the past week, for example, American newspapers and
radio stations have announced that American troops surrendered
in Java. They received this "news" from Tokyo - without
corroboration from any other source - and printed it freely
-5-
316
without further investigation. By disseminating this story,
the American press helped unwittingly to spread discouragement
and dismay, serving as an instrument in the psychological warfare of the Axis.
American front pages likewise publicized a Vichy version
of the recent R.A.F. raid on Paris suburbs, highlighting the
anguish and indignation of the stricken French yet virtually
ignoring the contributions made by French industry to the German
war machine. Planted Axis stories from Berne or Ankara or
Stockholm often find their way to our front pages, confusing
American readers with groundless gossip of enemy plans and
projects.
In their editorial pages, most of the newspapers which thus
serve as transmitters for the Axis line disparage and condemn it.
They recognize its purposes and vehemently warn their readers to
be on guard against rumors and propaganda. But they seem trag-
ically off guard themselves. They fail to protect the public
from the prime factor in Axis psychological strategy - the use
of "news" as a weapon.
317
For your information.
March 13, 1942.
To Ferdinand Kuhn, Jr.
From Joseph Melia
EDITORIAL COMMENT ON TAXES:
THE COMPLAINTS GROW LOUDER
Throughout the country most editorial writers still find
little reason to complain over the tax program proposed by the
Preasury. But that important section of the press which demands
a broadening of the tax base is growing steadily. Although
still in the minority, these newspapers are becoming increasingly
critical of the Treasury's tax recommendations.
They protest that while the "unorganized and already overburdened" middle-income group is being called upon to accept an
even heavier tax load, the Treasury would continue to exempt the
low-income wage earners and farmers who have had the greatest
increase in inflationary spending power.
By their editorials and their headlines over prominently
displayed news stories, these newspapers seek to create the impression that there is a widespread popular demand for a sales
tax. They assure their readers editorially that Congress in all
likelihood will heed this "public demand" and drastically alter
the Treasury's tax program before enacting it into the law.
-2-
318
Recently there has also been a flurry of editorials questioning the wisdom of the Treasury's corporate income-tax proposals.
The recommended corporate income tax rates "suggest caution" to the
New York Times. "That they will mean the reduction or elimination
of dividends by many corporations is clear," it declares. "But
beyond that they may mean the serious weakening of corporate
capital structures such as would bring severe penalties in a subsequent period of hard times."
The Washington Post denies that industry is "garnering vast
profits while demanding that the universal sacrifices required by
war be borne exclusively by labor." It asserts that it is "by no
means certain that private industry would be able to support such a
heavy (new) tax load without impairment of efficiency and consequent
slowing down of war production." And The Richmond News Leader
argues that the Treasury program would "increase corporation taxes
to the point where many industries unrelated to war work will be
crippled beyond the hope of even making necessary replacements."
The criticisms of the Treasury for not advocating a broadening
of the tax base are mixed with fear, sympathy and hope on the part
of the critics--fear that the suggested tax program would fail as
an anti-inflation measure, sympathy because of the load it would
impose on the white collar class, and hope that it will be
drastically altered in Congress in answer to the "rising public
clamor" for a sales tax or lowered exemptions.
-3-
319
Fear
The former New Dealer Ralph Robey, for example, in the
current issue of Newsweek, states that the Treasury's recommenda-
tions on taxes "have no more relation to what must be done" to
halt inflation than "night has to day." He lists what he considers
to be the three "basic" weaknesses of the Treasur program as:
"1. It leaves some 50 per cent of the total national income
untouched, except for the relatively insignificant changes in
excise taxes.
"2. Fundamentally it is a program designed to tax potential
savings, thereby hindering an expansion of production, while at
the same time permitting the volume of purchasing power in the
hands of those who will spend it for consumption to go on increasing
under the impact of the war prosperity.
"3. Under this program the business units which would be
hardest hit are those which economically are benefiting least
from war prosperity.
He concludes that while business and the upper 10 per cent
should be taxed higher than at present, the only tax system that
would be effective in halting inflation must include either a
sales or withholding tax without exemptions, or a combination of
the two.
-4-
320
Sympathy
Frank R. Kent, persistently critical of the Administration,
also advocates either an income tax with no exemptions or a sales
tax. "Everyone who earns anything should carry a share of the tax
burden," he writes in his widely syndicated column.
Instead,
"
the tendency of the new bill is toward the practical extermination
of the upper and middle bracket incomes, already taxed to the point
of diminishing returns, and a continued exemption of millions of
the lower incomes "
The New York Times is more explicit. "Few families in this
class can relinquish a quarter to a third of income without some
drastic retrenchment," the Times declares. "They will have to
move to cheaper living quarters, give up some life insurance, take
a son or daughter out of college or make some other big adjustment
if they are to continue to live within their incomes." Similarly,
the New York Herald Tribune argues: "A program which doubles the
existing income taxes of one group in the economy one year and then
redoubles them the next year overlooks the pertinent fact that a
great part of the budget of a person in the middle income brackets
consists of fixed charges which cannot be sloughed off in the same
way that one can cut down purchases of civilian goods. The only way
the average citizen can keep up such expenditures and pay income
-5-
321
taxes is to raise money through loans. When a condition obtains in
which such borrowing becomes substantial the point of diminishing
returns has been reached and it is time to look about for new
sources of taxation. There is much evidence that under the Treasury
program we are already at or near that point."
Hope
The widespread belief that Congress will drastically revise
the Treasury's tax program in answer to "public clamor" for a sales
tax is reflected by the Providence Journal. "It is clear" to the
Journal that "the Treasury fears an eventual stampede to the sales
tax." "Sentiment for such a levy," it reports, "is increasing
among Committee members
There is a growing popular feeling in
the country that the vast majority of citizens must expect to
become contributors to the Federal Treasury on a scale that hurts.
But the Treasury is patently resisting this popular mood, despite
strong evidence that many among the smaller income groups would be
willing tax contributors."
The Kansas City Star is even more hopeful. "The head of the
Treasury has a rather persistent habit of submitting fanciful tax
ideas that fail to register, either with Congress or a good part
of the country, " the Star declares. "It should be understood, too,
that any tax program is at the outset largely a 'trading' proposition--
-6-
322
that is, you ask for a lot more than you expect to get. And when
it comes to trading, Mr. Doughton's Ways and Means Committee of
the House and Mr. George's Finance Committee over in the Senate
know a fair assortment of tricks.
Liberal and Labor
Most of the Treasury's critics are consistently antiAdministration, but this week they were joined by that staunch New
Dealer, The New Republic. This magazine complains that the
Treasury's program is "timid," although "probably much better than
the bill Congress will pass." It criticizes the measure because
it would provide too little revenue, leave "enormous loopholes"
for excess profits to escape, and fail to lower exemptions or
provide for enforced savings. It recommends a 100 per cent excess
profits tax and the lowering of personal income tax exemptions to
$1000 for married persons and $500 for single.
The labor press still has not commented editorially on the
tax program, apparently preferring to wait until the tax committees
of the A.F. of L. and the C.I.O. have taken their stand on the
Treasury's proposals.
323
MAK 13 1942
My dear Mr. Secretary:
In connection with the handling of matters requiring
information to be obtained abroad and affecting the
Treasury Department, especially those matters relating to
customs, foreign funds control, and allied matters, it is
the desire of this Department to station at the places
indicated the following representatives of this Department:
Dolor Joseph DeLagrave - Vichy, France.
Francis X. DiLucia
- Madrid, Spain.
Charles B. Dyar
- Berne, Switzerland.
J. Ray Olivera
- Lisbon, Portugal.
A brief biographical outline covering the educational
background and past governmental experience of each of the
above employees is hereto attached.
It is requested that appropriate representations be
made to the foreign governments affected looking to the
accrediting of the employees mentioned to the respective
United States Embassies and Legations. Should the assignments of these representatives meet with the approval of
the foreign governments affected, it is further requested
that such employees be accredited as attaches to our respective foreign missions and furnished with diplomatic
passports to establish their status and facilitate their
official travel abroad.
Sincerely yours,
(Signed) E. Morgenthan, see
Secretary of the Treasury.
The Honorable
The Secretary of State.
G-fmm 2-26-42
WRJ-esb 2-28-42
n.m. C
Felera thompson
By Messehger Simmons
5.30
324
ASSISTANT SECRETARY OF THE TREASURY
March 4, 1942.
MEMORANDUM
To:
From:
Secretary Morgenthau
Mr. Gaston
I am attaching a letter to the
Secretary of State for your signature
as to the four men whom we propose to
send to Europe. I informed David Bruce,
of Donovan's office, that we could not
consent to sending the men unless State
would give them diplomatic passports.
Bruce has talked to Assistant Secretary
Shaw, who asked for a letter from us.
Donovan has said that if State should
turn us down on the passports, he
imself will appeal to Hull, since he
S extremely anxious that we send the
en.
first
325
Vessels at Philadelphia Loading Lend-Lease Materials for
STRICTLY CONFIDENTIAL
Russia
March 9-13, 1942
Nationality, rig,
name of vessel
Date of
arrival
in port
*Nature of Lend-Lease
cargo loading
I. Vessels that were in port on March 9
Foodstuffs, metals, trucks,
Feb. 23
Am. s/s Bayou Chico
Percent
loaded
Feb. 24
Foodstuffs, metals, trucks,
100
Am. S/S Winons
Feb. 25
Foodstuffe, motals, trucks,
100
Am. S/S Wacosta
Feb. 27
Foodstuffs, metals, trucks,
67
Am. s/s Carlton
Feb. 27
Foodstuffs, machinery, trucks,
90
Am. S/S Mormacsul
Feb. 28
Foodstuffs, metals, miscel-
Am. S/S Texas
Feb. 28
Am. S/S Alcoa Banner
date of
departure
Cause of delay, if any,
in loading or departure
Sailed Mar. 10
100
miscellaneous
Am. s/s Zebulon B. Vance
Expected
Mar. 13
miscellaneous
Sailed Mar. 13
miscellaneous
Unknown
Delayed by fire.
Fire in boiler room. Indefinite
delay expected.
miscellaneous
Mar. 13
Broken cranes - cars not promptly
95
Mar. 13
Care not promptly placed; lack of
Foodstuffs, trucks, metals,
75
Mar. 14
Cars not promptly placed.
Mar. 3
Foodstuffs, trucks, tin plate,
65
Mar. 16
Repairs.
Mar. 4
Foodstuffs, machinery,
60
Mar. 15
Lack of cargo.
Am. s/s Mormacrey
Foodstuffs, metals, machinery,
33
Mar. 15
Lack of cargo.
Am. S/S Syros
Mar. 5
Mar. 6
Foodstuffs, metals, machinery,
30
Mar. 15
Lack of cargo.
Pan. S/S Troubadour
23
Mar. 14
Am. S/S John Randolph
Foodstuffs, trucks, machinery,
Lack of cargo.
Mar. 6
11
Mar. 13
Belg. S/S Ville D'Anvers
Foodstuffs, miscellaneous
Lack of cargo.
Mar. 7
55
Mar. 18
Repairs.
Mar. 7
Foodstuffs, machinery, metale,
Am. S/S Alamar
heavy metals
laneous
miscellaneous
miscellaneous
miscellaneous
miscellaneous
miscellaneous
miscellaneous
Russ. S/S Shehors
Mar. 9
Auto parts
Mar. 9
011, metals, foodstuffs
Mar. 13
Aluminum ingots
Tanks loaded or to be loaded as top oargo on each of these vessels.
Mar. 21
7
Am. S/S Hybert
derricks.
miscellaneous
II. Vessels that arrived in port since March 9
Am. S/S Massmar
placed.
Undeter-
Unknown
mined
Undetermined
Unknown
.
326
STRICTLY CONFIDENTIAL
Vessels in American Ports Loading Lend-Lease Materials for
Russia
March 13, 1942
in port
Feb. 24
Feb. 27
:
: arrival
:
:
:
:
Am. s/s Zebulon B. Vance
Am. S/S Carlton
at which
loading
Phila.
Phila.
:
Name of vessel
Date of
Date
Per-
loading
cent
began
Feb. 24
Feb. 28
Expected
loaded
date of
departure
:
Port
Reasons for
Nature of cargo
delay in loading
1f any
90
Mar. 13
Mar. 13
Food, metals, trucks
Trucks, flour, canned meats
Unknown
Food, trucks, metals
Fire on ship
Repairs.
100
Am. S/S Vacosta
Phila.
Feb. 27
Feb. 28
67
Am. S/S Alcoa Cadet
Boston
Feb. 27
Feb. 28
85
Mar. 15
or 16
Airplanes, tanks, foodstuffs
Feb. 28
Feb. 28
Mar. 13
Lack of derricks.
95
Copper, auto bodies, foods
Am. S/S Mormacsul
Phila.
Feb. 28
Mar. 2
Steel, flour, tin plate
Lack of cargo.
75
Mar. 14
Am. S/S Texas
Phila.
Boston
Mar. 3
Mar. 4
99
Mar. 13
Airplanes, tanks
Am. S/S Yaka
Mar. 3
Mar. 5
65
Mar. 16
Am. S/S Alcoa Banner
Phila.
Phila.
Mar. 4
Mar. 4
60
Mar. 15
Foodstuffs, tin plate
Flour, auto parts, steel
Phila.
Mar. 5
Mar. 7
33
Mar. 15
Auto chassis, chemicals
Mar. 6
Mar. 7
30
Mar. 15
Flour, tin plate, auto parts
Am. S/S Mormacrey
Am. S/S Syros
Pan. S/S Troubadour
Am. S/S John Randolph
Am. S/S Alamar
Belg. S/S Ville D'Anvers
Am. S/S Robert Wentley
Am. S/S Hybert
Am. S/S Massmar
Rus. S/S Shehors
Phila.
Phila.
Mar. 6
Mar. 6
23
Mar. 14
Phila.
Mar. 7
Mar. 8
55
Mar. 18
Flour, auto parts
Flour, lard, autos
Mar. 7
Mar. 9
11
Mar. 13
Tin plate, wire
Mar. 9
Mar. 10
Mar. 13
Canned meat, auto parts
New York
75
Mar. 9
Mar. 12 Undeter-
Unknown
011, metals, flour
Phila.
Mar. 21
Phila.
Mar. 11
Auto parts
Mar. 9
Unknown
Aluminum ingots
Mar. 13
Mar. 13
Phila.
Phila.
mined
7
Undetermined
March 8.
Repairs.
Lack of cargo.
Lack of cargo.
Lack of cargo.
Lack of cargo.
Repairs.
Lack of cargo.
Lack of cargo.
327
STRICTLY CONFIDENTIAL
Vessels in American Ports Loading Lend-Lease Materials for
United Kingdom
March 13, 1942
Date of
arrival
in port
Date
loading
began
Percent
loaded
Br. S/S Empire Cougar
Br. S/S Daloross
Br. s/s Empire Ptarmigan
Baltimore
Phila.
Phila.
Feb. 12
Feb. 18
Feb. 19
Mar. 9
Feb. 19
Feb. 19
Norw. S/S Henrik Ibsen
New York
Feb. 20
Feb. 20
Br. S/S Bosworth
Boston
Feb. 22
Pan. S/S Spokane
Jackson-
Feb. 25
Feb. 27
Pan. S/S Leonatus
New
Feb. 26
Mar. 6
Br. S/S Badjestan
Charleston, Feb. 27
Br. S/S Torr Head
Norfolk
Mar. 4
Mar. 5
100
Br. S/S Queen City
New York
Mar. 4
Mar. 7
50
Br. B/S Flowergate
Phila.
Mar. 4
Mar. 5
28
Norw. M/S Kollbjorg
New
Mar. 5
ville
Feb. 24
Feb. 27
70
Mar. 14
95
Mar. 14
100
Steel, cotton, airplanes
Auto parts
Repairs.
Repairs.
Machinery, steel, food, oils
Lack of cargo;
Steel, copper, food, machine
Tractors, oil, ammunition
Repairs in engine
Foodstuffs, steel
Repairs.
100
Mar. 13
Food, naval stores
Inability to
Mar. 14-
Steel billets, cotton, lumber, Repairs.
50
Mar. 24
or 25
Steel billets, wire
Mar. 12 Undeter-
Unknown
Aviation gasoline
Mar. 19
Lumber, machinery, food,
steel
Autos, tanks
New York
New York
New
Mar. 8
Mar. 8
Orleans
New York
Mar. 8
Mar. 10
New York
Br. S/S Gloucester City
Phila.
Am. S/S Ponce de Leon
New
Mar. 9
Mar. 9
Mar. 10
Mar. 9
Mar. 10
Mar. 10
Mar. 10
Mar. 10
Mar. 11
Mar. 10
Mar. 10
Mar. 11
Mar. 11
Mar. 11
Not
44
91
75
5
New York
Baltimore
New York
New York
Mar. 16
Mar. 21
Mar. 20
Repairs.
Copper
Rubber, machinery, airplane
parts
100
Mar. 13
Motor trucks
66
Mar. 19
Steel, machines, airplane
54
Mar. 17
Locomotives, food, trucks
Diesel oil
Unknown
Discharging
ballast.
parts
Pumping ballast.
started
Machinery, food, chemicals
25
Mar. 14
Mar. 20
100
Unknown
Tin plate
Mar. 12
Mar. 12
Mar. 11
Mar. 11
100
Kerosene
Bad weather.
Lumber, meats
Awaiting cargo.
Mar. 12
20
Mar. 13
Mar. 17
Mar. 13
Mar. 15
Mar. 14
25
Orleans
Galveston
propellers
mined
Br. S/S Tyndareus
Swed. S/S Axel Johnson
ammunition, food
Wire, wool, tires, ammunition Discharging
ballast.
Mar. 7
Mar. 9
Mar. 11
Galveston
obtain crew.
Mar. 17
Mar. 5
Mar. 8
Mar. 8
Am. S/S Swiftlite
room.
Steel, foodstuffs, lumber,
Phila.
Baltimore
repairs.
Mar. 14
Br. S/S Everleigh
Br. S/S Generton
if any
Mar. 16
-
Orleans
delay in loading
65
18
Mar. 6
Norw. S/S Belinda
Br. S/S Jamaica
Br. S/S San Demetrio
Norw. S/S Laurite Swenson
Swed. S/S Malaren
95
S.C.
Mar. 5
Br. S/S Arabian Prince
Mar. 18
Mar. 14
Mar. 18
60
Nature of cargo
Orleans
Baltimore
Am. S/S Steel Traveler
date of
departure
parts
Dutch S/S Zypenberg
Br. S/S Pacific Shipper
Reasons for
Expected
:
at which
loading
:
Port
Name of vessel
15
90
20
Steel, foodstuffs
Gasoline, alcohol
Airplane parts, tools
Food, steel, airplane
engines
(Continued)
Lack of labor.
Repairs.
328
STRICTLY CONFIDENTIAL
Vessels in American Ports Loading Lend-Lease Materials for
United Kingdom
(Continued)
March 13, 1942
Norw. 8/3 Alb. L. Ellsworth
:
Port
Name of vessel
Date of : Date
: Per- : Expected
: in port : began : loaded : departure :
at which : arrival : loading : cent : date of
loading
Corpus
Christi,
Mar. 11
Mar. 12
100
Nature of cargo
Mar. 13
Gas, oil
Mar. 18
Foodstuffs, machinery
Reasons for
delay in loading
if any
Tex.
Norw. S/S Fernhill
Br. S/S Ocean Liberty
Baltimore
Mar. 11 Mar. 12
Portland,
Mar. 12
Me.
83
Mar. 12 partially
Mar. 14 Foodstuffe
Discharging
ballast.
329
Vessels in American Ports Loading Lend-Lease Materials for
Destinations Other Than Russia and United Kingdom
STRICTLY CONFIDENTIAL
March 13, 1942
Port
Name of vessel
All. S/S Cathlemet
at which
loading
New York
Date of
Date
arrival
in port
loading
Feb. 5
Mar. 9
began
Percent
loaded
90
Expected
date of
departure
Mar. 14
Nature of cargo
Reasons for
delay1finany
loading
Tin
plate, steel
sheets
Drydock Feb.
Mar. 9.
5-
Destination
Br.W.Africa
Pan. S/S Johnstown
New York
Feb. 9
Mar. 12
40
Mar. 13
Airplane parts
In drydock.
Br. India
Br. S/S Enpire Hawk
Phila.
Feb. 16
Mar. 12
15
Mar. 20
Flour
Repairs.
Egypt
Dutch S/S Kita Tjandi
New York
Feb. 17
Feb. 17
100
Unknown
Trucks, auto parts
Awaiting sail-
Br. India
Br. India
Br. India
ing orders.
Br. S/S Bernard
New York
Feb. 27
Mar. 4
75
Mar. 16
Steel, wire, ingots
Repairs.
Br. S/S Tredinnick
New York
Feb. 27
Mar. 3
50
Mer. 14
Machine parts,
Bad weather Repairs.
Discharging
ammunition, steel
Br. S/S Empire Wagtail
Phila.
Mar. 2
Mar. 9
45
Mar. 19
Br. S/S Harmattan
New York
Mar. 2
Mar. 2
98
Mar. 15
Steel billets
Steel, tractor
Br. S/S Orfor
New York
Mar. 4
Mar. 7
55
Mar. 14
Steel
Br. S/S Appledore
New York
Mar. 5
Mar. 5
95
Mar. 15
Auto parts, air-
2 days.
Br.Middle East
Egypt
parts, trucks
ballast.
Br. India
Egypt
plane engines,
medicinal stores
New York
Mar. 6
Not
Br. S/S Port Halifax
Newport
Mar. 7
Mar. 9
Apr. 4
Machines, cables
In drydock.
Curacao
65
Mar. 14
Planes, tin plate,
Repairs.
Australia
62
Mar. 14
Steel
Mar. 21
Tires, airolane
Mar. 14
Ammunition, guns,
Mer. 13
Chains, cable
Unknown
Aircraft engines,
-
Dutch S/S Flora
started
News
Aa. S/S Courageous
New York
Mar. 8
Mar. 9
Br. S/S Moorby
New York
Mar. S
Mar. 12
Smed. S/S Mirrabooks
Los
Mar. 9
Mar. 9
Mar. 10
Mar. 12
5
90
Angeles
Br. S/S Thursobank
New York
Swed. S/S Nuolja
San Fran. Mar. 11 Mar. 13
5
-
oil
parts, emmunition
r.Ministry,
Buenos Aires
Discharging
ballast.
Egypt
Australia
planes
drugs
Discharging
bellest.
Suez
Australia
330
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
FROM
March 13, 1942.
Secretary Morgenthau
Mr. Kamarck
Subject: Shipment of Planes to British Forces.
1. In the week ending March 10, 1942, a
total of 110 combat planes (no trainers) were
shipped to British forces.
2. Evidently, the British are concentrating some of their naval forces off India.
This week's statement reports the shipment
of nine Grumman Martlet fighters to India.
The Martlets are designed for use from air-
craft carriers. Presumably the British have,
or will soon have, a carrier in the Indian
Ocean.
3. A variation of the Lockheed Ventura
first time this week. The Ventura I is designed
primarily for long-distance reconnaissance: the
reconnaissance bomber is mentioned for the
Ventura Bomber is designed primarily for bomb
carrying and carries more bombs and less gas
than the Ventura I.
331
-2Table A - Shipments by Area
Week
Total Shipped Total Shipped
Ending
in 1942
to date
March 18. 1942
since
Jan. 1, 1941
the United Kingdom
Light and medium bombers
14
Heavy bombers
106
2
Naval patrol bombers
67
358
22
53
--
O
Total to the United Kingdom
110
669
8
O
1
Pursuit
Army Cooperation
Trainers
1,143
19
2
84
24
409
2,105
To the Middle East
Light and medium bombers
11
110
0
0
o
149
0
12
O
8
Heavy bombers
Pursuit
Army Cooperation
Trainers
440
5
Total to the Middle East
11
997
12
150
1,604
279
to the Canadian Forces
Light and medium bombers
Naval patrol bombers
o
Pursuit
Trainers
58
4
0
2
11
19
30
72
125
o
Total to the Canadian Forces
1,299
1,448
170
2
to the British Pacific Forces
Light and medium bombers
Naval patrol bombers
Pursuit
Trainers
o
35
O
0
9
19
o
0
Total to Pacific Forces
130
27
187
105
449
54
9
the Forces in Russia
Light and medium bombers
Pursuit
49
o
0
Total to Russian Forces
77
33
4
126
33
4
otal
Light and medium bombers
Heavy bombers
Naval patrol bombers
Pursuit
Army Cooperation
Trainers
Totals
1,848
201
29
111
2
2
o
19
156
78
556
1,974
34
65
133
1,578
1
o
110
945
5,732
332
-3Table B - Shipments by Types
Week
Ending
March 10,1942
Bell Airacobra
63
Boeing B-17
Boston III
Total Shipped Total Shipped
in 1942
since
to date
Jan. 1, 1941
169
323
o
20
0
22
9
Brewster Buffalo
61
0
168
o
Cessna T-50
0
Consolidated Catalina
0
Liberator
86
634
19
156
2
91
2
Curtiss Kittyhawk
191
2
Tomahawk
573
593
o
0
Douglas Boston I and II
Boston III
o
Fairchild 24 R-9
Glenn Martin Baltimore
16
455
o
24
46
113
181
11
Maryland
O
14
9
Lockheed Hudson
55
856
37
0
Lightning
Ventura I
0
3
3
12
8
Ventura Bomber
12
1
1
1
North American Harvard II
o
Mustang
4
Pitcairn Autogiro
0
47
944
179
259
0
5
Vought Sikorsky Chesspeake
Grand Total - All Types
150
0
Grumman Martlet II
Vultee Stinson-049
82
0
0
0
1
110
0
50
10
14
945
5,732
in 1941
Week
Ended
1941 to date
of shipments
March 3, 1942
March 10, 1942
Weekly Average
Total shipments
January 6, 1942
since January 1,
February 3, 1942
February 24, 1942
29
1,848
February 17, 1942
33
26
January 27, 1942
January 20, 1942
January 13, 1942
February 10, 1942
12
9
33
8 3
24
24
32
medium
Light and
bombers
2
111
0
O
0
0
O
o
o
0
O
2
Heavy
bombers
Table C
156
1
O
2
2
3 3
1
o
2
5
3
Naval
patrol
bombers
Plane Shipments to the British by Weeks
1,974
78
80
86
41
59
10
14
100
58
30
27
Pursuit
65
1
6
7
7
4
0
5
0
0
4
1
tion
Coopera-
1,578
5,732
O
110
O
113
1
0
129
62
4
99
4
30
13
143
60
82
42
105
9
28
72
92
Trainers Total
334
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 13, 1942.
TO
FROM
Secretary Morgenthau
Mr. Kamarck
Subject: The Shipping Situation
(charts attached)
returned
1. According to the preliminary figures, merchant marine
losses in February increased sharply to almost 500,000 tons. These
losses have been exceeded in only four months of the present
war: June, 1940 (Dunkerque evacuation); March, April, May, 1941
(Axis Spring air and submarine offensive, evacuation of Greece
and evacuation of Crete).
2. Losses in February were considerably greater than
launchings. In spite of a continual increase in launchings, on
balance over the past eight months, sinkings have been large
enough to result in a small net decrease in the amount of shipping
available. At the same time, demand for shipping has greatly increased.
3. The February sinkings bring the total of losses of
Allied and neutral shipping in the present war to over 9,000,000
gross tons, or equivalent to half of the British pre-war fleet.
If the Axis losses of over 3,000,000 tons are counted in, about
one-fifth of the world's merchant shipping has been destroyed.
4. Experience has verified our conclusions of over A year
ago. In our study of December, 1940, the points were made that
the British shipping situation was not then critical. However,
the British request that the United States increase its ship-
building rate by at least 3,000,000 tons WAS judged to be reasonable.
This was because a reserve of shipping was needed for a possible
rise in losses, to meet new military and naval demands and "to
supply possible continental allies. All of these contingencies
have
since occurred and are stretching the available shipping to
the limit.
Military Intelligence in its study, furnished to the Treasury
and prepared around the same time, on the other hand, concluded
that the British would have a surplus of a million and a half tons
over minimum requirements on December 31, 1941. Naval Intelligence
refused
to commit itself on the ground that the available data
were insufficient.
335
Mr. Livesey
March 13, 1948
D. W. Bell
Referring to telephonie conversation, will you please send the following
cable to the American Consulate General, Sydney, Australia:
"Frem Treasury.
With reference to cable No. 53 dated March 12 sent by the
Commonwealth Bank of Australia, Bydney, to the Federal Reserve
Bank of New York, the fellowing procedure is suggested with respect
to checks drewn on the Treasurer of the United States.
1. All United States dollar checks drawn on the Treasurer of
the United States negotiated by the Commonwealth Bank of Australia
are to be delivered to the American Consul General, Sydney,
accompanied by a list in triplicate with complete description each
check as follows: name of drawers symbol number: check number:
amount: payee's name: date of check.
Consular officer will carefully verify checks against list and
advise Treasury by wire through State Department aggregate amount of
checks delivered by bank. Upon receipt of this advice, Treasury
will effect credit in corresponding amount to account of Commonwealth
Bank of Australia, Sydney, with the Federal Reserve Bank of New York.
Censular officer should instruct Commonwealth Bank of Australia
to use all possible diligence in identification of payee and
determining validity of endorsements. The Commonwealth Bank of
Australia should endorse checks as follows: Quote. Pay to the
336
order of Preasurer of the United States for credit of our account
with the Federal Reserve Bank of New York. Signed Commonwealth
Bank of Australia. Unquete. Treasury will look to bank only for
usual guaranty under laws applicable in Australia.
Censular officer should forward checks accompanied by one
con of list to Treasurer of the United States, Washington, as
promptly as possible by safest means available. Second COW of
list should follow by separate earrier at earliest possible date.
Third COW should be retained by consular officer.
2. Censular officer should make no arrangements for insurance
as shipments will be covered w Government Lesses in Shipment Act.
3. The designation of the Commonwealth Bank of Australia,
Sydney, as a depositary of public monies of the United States is
hereby extended to carry out the procedure outlined in this telegram.
4. Please advise Commonwealth Bank of Australia, Sydney, and
other United States Government officials appropriate parts hereof."
The Department approves the foregoing. Any expense incurred in carry-
ing out the instructions contained in this telegram should be included in
regular accounts as separate item for billing Treasury in accordance Sec. V-45,
Foreign Service Regulations.
FD: day 3/13/42
Treasury Department 337
Division of Monetary Research
Date March 19 1942
To:
Miss Chauncey
From:
H. D. White
I think the Secretary will be interested in seeing this.
338
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 13, 1942
TO
FROM
Mr. White
Mr. Friedman
Subject: Digest of cable for Fox from Mr. Adler.
1. Meeting of Chinese members of Stabilization Board and
banking and financial experts called by Dr. Kung.
Dr. Kung stated that on the advice of New York benkers
2.
T. V. Soong had recommended:
(a) That the exchange rate be lowered to four cents;
(b) That loan be used as a guarantee to encourage new
savings deposits in Chinese banks;
(c) That savings deposits be redeemable in foreign
exchange after period of years;
(d) That Stabilization Board might be used to carry
out (b) and (c).
3. Dr. Kung favored rate of five cents.
4.
Dr. Kung said that the Generalissimo desired to have a
stock market in Chinese Government securities opened in
Chungking.
5. Dr. Kung opposed the unfreezing of Chinese assets in
the United States.
339
PARAPHRASE OF TELEGRAM RECEIVED
FROM: American Embassy, Chungking, China.
DATE: March 11, 1942, 10 a.m.
NO. 215.
This is message TF-20 and is strictly confidential
for Mr. Fox, care of the Secretary of the Treasury, from
Mr. Adler.
1. It has been informally reported by Chinese members
of the Board that a meeting of Chinese Board members and
banking and financial experts was called by Dr. Kung on the
9th of March.
Dr. Kung stated that on the advice of New York bankers
Mr. T. V. Soong had made the following recommendations
a. That the exchange rate be lowered to four cents;
b. That the loan be used as a guarantee to encourage
new savings deposits in Chinese banks;
c. That such savings deposite be redeemable for about
one, two, and three years in foreign exchange; and
d. That the Stabilisation Board be used possible as an
instrumentality to carry out (b) and (e).
Dr. Kung regarded the reduction suggested in (a) as
too precipitous and he was inclined to regard with favor a
rate of five cents. Also, in connection with proposed dollar
backed issues, there is inelination on his part towards using
di fferential exchange rates. Nothing definite emerged from
the
340
-80
the meeting, the whole discussion being tentative.
2. Participants of the meeting were told by Dr. Kung
that the Generalissimo desires to have a stock market in
Chinese Government securities opened in Chungking. He
added that if there is such development of a stock market,
it should include a market in grain futures, if possible.
3. Head of Bank of Communications, Minister of Food,
and newly appointed (?) Secretary of Central Bank argued
strongly at the meeting for restoring free exchange market
here and for unfreesing Chinese assets in the U.S. but
these suggestions were opposed by Dr. Kung.
4. We have just received your cable of March 4 and
your proposal (9) to the next meeting of the Board.
This is the end of the message from Mr. Adler.
GAUSS
341
C
0
,
Y
This telegram must be
paraphrased before being
Yunanfu via Chungking & NR
communicated to anyone
Dated March 13, 1942
other than a Governmental
agency. (BR)
Rec'd 9:18 a.m. : 17th
Secretary of State,
Washington.
March 13, 4 p.m.
Reference my telegrams of November 19, 4 p.m.
and November 24, noon.
Rice price situation has again become acute in
Kunming and Provincial Government has established a
few retail depots where sales are fixed at $465
per picul with poorest grade only now available there.
Black market rate for better qualities is between
six hundred and seven hundred dollars per picul.
Chairman Lung Yun in a public speech has stated that
speculators and dishonest merchants are chiefly
responsible for the situation which is artificial.
He has threatened severe punishment for profiteers
and commercial sales are said to be closely supervised
with consequent closure of many shops. With completion
of new census, residence cards will be issued to
populace for use in buying public rice.
PERKINS
WWC
Copy:bj:3-18-42
342
C
0
P
March 13, 1942
Y
Mr. Livesey
Mr. D. W. Bell
Will you please send the following cable to the American Embassy
Chungking, China:
2
"From Treasury:
With reference to cable No. 101, February 14, 2 p.m.
paragraph 4, please advise the Central Bank of China, Chungking,
that its designation as a depositary of public moneys of the
United States has now been extended to permit that bank to accept
deposits and maintain accounts to the official credit of United
States Army and Navy officials. Advise Lieut. General Stillwell
and other Army and Navy officials accordingly. Please bring to
the attention of the officials of the Army and Navy that their
local currency requirements should, so far as possible, be met
in accordance with cable No. 101, paragraph 6. .
EDS:AD:ew
Copy:1c:3/13/42
343
TELEGRAN STNT
CB
This telegram must be
perephrased before being
communicated to anyone
other then C Governmental
agency. (BR)
March 13, 1942
11 C.M.
AMERDASSY
CHUNGKING, (CHINA).
170
FROL TREASURY
QUOTE With reference to coble no. 101,
February 14, 2 P.M. paragraph 4, please advise
the Central Bank of China, Chungling, that its
designation 0.3 = depository of public moneys
of the United States has now been extended to
permit that bank to accept deposits and mointain
accounts to the official credit of United States
Army and Nevy officials. Advise Licut. General
Stillwell and other Army and Havy officials
accordingly. Please bring to the attention of
the officials of the Army and Havy that their
local currency requirements sh uld, so for C.S
possible, be met in accordance with cable no. 101,
paragraph 6. END QUOTE
WELLES
(Acting)
(FL)
PD:FL:ME
5978
Y
REQUIRED
AIR MAIL
(In accordance with Department's un-
numbered circular instruction of
February 10, 1942, file No. 851.5
x 851.51)
No. 142
CUBAN HOLDINGS OF GOLD, SILVER AND
FOREIGN EXCHANGE AND RESERVE REQUIREMENTS
From:
Albert F. Nufer
Commercial Attache
American Embassy, Date of Completion: March 12, 1942
Date of Mailing:
March 13, 1942
Habena, Cuba
Approved:
Ellis O. Briggs
Charge d'Affaires ad interim
File No. 851.5 x 851.51
AFN/cd
Distribution:
Original and six copies to Department
One copy to Consulate General
344
-1- -
345
No Central Bank
or Bank of Issue in Cuba
There is no central bank or bank of issue in
Cube, nor any private institution authorized to issue
coin or currency.
Reserve Requirements of Commercial Banks
Commercial banks operating in Cube must, according
to Article 180 of the Cuban Code of Commerce, maintain cash
reserves equal to at least 25 per cent of their total deposits*.
According to the Cuban Monetary Law of October 29, 1914
(as modified by Decree-Law No. 410 of August 10, 1934),
the dollar is legel tender in Cuba; banks therefore carry
deposits in United States currency and in Cuban currency**.
On August 2, 1938, the Cuban Ministry of Finance (in an
effort to bolster the then declining exchange value of the
Ouban silver peso) issued a resolution requiring local banks to
maintain
*The President of Cuba, in a message to Congress of
February 7. 1942, recommended the enactment of legislation
which, inter alia, would permit the reduction of the minimum
reserve requirements of local banks from 25 per cent of their
total deposits to 12-1/2 per cent. The corresponding bill
was approved by the Cuban Senate on February 28, 1942, and is
now before the House. Please see report No. 141 of March 5,
1942, "Financial Report for Fortnight Ended February 28, 1942".
*The theoretical Cuban monetary unit is the gold peso,
which is of the same weight and fineness as the gold dollar.
The Cuban silver certificate, which is the currency actually
in circulation in Cuba, is guaranteed by one silver peso coins
which are also of the same weight and fineness as our silver
dollar.
--
346
maintain at least three-fourths of their legal cash reserves
in Cuban silver pesos. The percentage of the reserves which
banks were thus required to maintain in Cuban silver pesos
was reduced to 56 per cent by a Resolution of June 24, 1941,
while a subsequent Resolution issued on December 31, 1941, when
the exchange value of the Cuban silver peso (due to a
material improvement in economic conditions and an at-
tendant increase in the demand for circulating media) was
again more or less at par with the dollar, provided that
thenceforth the banks minimum cash reserves should be
maintained in the legal tender currencies (dollars or pesos) in
which the deposits were made*.
Required Reserves against
Notes (Silver Certificates) Issued by the Cuban Government
The Cuban Government itself has from time to time during
recent years issued silver certificates in an aggregate nominal
amount of 79,478,712 pesos. Decree-Law No. 176 of April 28,
1934, which authorized the issue of silver certificates, provided that they were to be guaranteed by en equivalent amount
of one peso Cuban silver coins (which were given unlimited
legal tender value by Decree-Lew No. 244 of May 22, 1934)
deposited in the Cuban Treasury.
A total of 78,238,000 pesos in silver certificates
have
*Please see report No. 137 of January 7. 1942,
"Financial Report for Fortnight Ended January 3, 1942".
347
-3-
have been issued against silver peso coins and, pursuant
to a law of December 20, 1939, an additional 1,240,710
pesos in silver certificates were issued against an equivalent amount of gold coin in the Treasury*.
Gold, Silver And
Foreign Exchange Holdings
of Cuban Government
On December 31, 1941, there were in the Cuban Treasury
79,230,000 pesos in silver coin (including fractional silver
money) and 1,240,712 pesos in gold coin. Of these amounts,
78,238,000 pesos in silver coin and 1,240,712 pesos in gold
coin represented, as previously mentioned, the coverage for
the 79,478,712 pesos in silver certificates which the Cuban
Government has issued to date.
As previously mentioned, the dollar has unlimited legal
tender value in Cuba; moreover, a low of July 8, 1939 made,
in effect, and with certain exceptions, dollar obligations
payable in pesos and vice versa. For that reason, United
States currency held or circulating in Cuba cannot be considered as foreign exchange. Therefore, although the Cuban
Treasury on December 31, 1941, had a balance of 337,745 dollars
in
The gold coin in the Treasury against which the above
mentioned 1,240,712 pesos in silver certificates were issued
was calculated on the basis of 8886/10,000 of a gram of fine
gold per peso, which represents the fine gold content of the
theoretical Cuban monetary unit, i.e., the gold peso, as fixed
by Decree-Law No. 410 of August 10, 1934.
348
-4in its so-called Exchange Stabilization Fund*, only a part
of this amount, namely, 136,733 dollars, which were held
abroad, i.e., on deposit with the Manufacturers Trust
Company in New York, the Fund's fiscal agents, can properly
be considered as the Cuban Government's dollar exchange
it's
holdings on that date. No sterling or other foreign exchange was held by the Cuban Government on December 31, 1941.
Foreign Exchange Held
by Commercial Banks and Other
Private Entities
Existing regulations permit the holding of foreign
exchange by commercial banks and private individuals and
concerns. As previously mentioned, however, United
States
*The Exchange Stabilization Fund was created by Decree
No. 1358 of June 20, 1939, which required exporters of Cuban
products to pay a certain percentage of the dollar proceeds
from their sales abroad into the Fund, in exchange for pesos
at par. In practice the decree was applied only to exports
of sugars and syrups and the percentage which exporters of
these products were required to pay into the Fund in exchange
for pesos at par was originally fixed at 20 per cent, but
increased to 30 per cent by Decree No. 2222 of September 12,
1939. The purpose of the Fund was primarily to assure the
Government of an adequate supply of dollar exchange with which
to meet its foreign debt obligations, as the peso at the time
the Fund was created was at a substantial discount in terms
of the dollar. As a result of the recent improvement in the
exchange value of the peso, which is now at a slight premium
over the dollar, the operation of the Fund has become unprofitable.
The Government nevertheless does not propose to abolish the Fund,
as it is felt that it will be a valuable adjunct to the
central bank which Cuba proposes to establish, but an
Administrative Order issued by the Ministry of Finance on
February 25, 1942, reduced the amount of dollars which exporters of sugars and syrups must deliver to the Fund in
exchange for pesos to only 1 per cent.
349
States currency circulating in Cuba cannot properly be considered as foreign exchange although dollar deposits by local
banks with the parent concerns and correspondents abroad may
be so considered. On December 31, 1941, the several banks
operating in Cuba had a net total of 22,384,274 dollars on
deposit with their parent concerns and correspondents abroad,
which amount therefore represents their foreign exchange
holdings on that date.
No data are available as to the dollar and sterling exchange holdings of private individuals and concerns. Some
local business enterprises reportedly maintain dollar balances
in the United States and it has been the custom for many years
among certain well-to-do Cubans to place a part of their cash
resources abroad. The amount of the foreign exchange thus
held by private individuals and concerns has been estimated at
from $15,000,000 to $20,000,000, although the actual amount may
be considerably at variance with this estimate*.
The amount of sterling held by commercial banks or other
private entities is believed to be insignificant. In former
years part of the funds carried abroad by wealthy Cubans were
placed in London, but it is understood that since the outbreak
of the present war this practice has been largely discontinued.
*More accurate information on the dollar balances held in
the United States by concerns and individuals in Cuba can doubt-
less be obtained direct from banks in the United States. It is
understood that the United States Government is presently inquiring
as to the nationality of the owners of deposits in American banks
and if so, the information under reference can assumedly be obtained
in the course of that investigation.
File No. 851.5 x 851.51
AFN/cd
350
- 5 (a) Sources: Treasury contacts: banking contacts;
Ministry of Finance statistics; other
material on file in Embassy.
File No. 851.5 x 851.51
AFN/cd
Copy eh:1 bj:3-23-42
351
PARAPHRASE OF TELEGRAM SENT
TO:
DATE:
NO.:
American Commissioner, New Delhi, India
March 13, 1942, 11 a.m.
50
Reference is made to telegram no. 58, sent on the
28th of February at 1 p.m. by the American Commissioner.
Following is a message from Treasury.
The appropriate British official in Washington has
been given the contents of your telegram under reference.
He is communicating with London. Any further developments
will be made known to you.
WELLES
Acting
(FL)
352
0
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FD 740.0011 European War,
March 13, 1942
1939/19998
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
encloses copies of a paraphrase of an excerpt from a
telegram dated March 7. 1942 from the American Consul
Casablanca, Morocco, transmitting a message from Mr.
Murphy.
Enclosure:
From Consul, Casablanca,
March 7. 1942.
Copy: :1c:3/13/42
C
353
0
P
Y
PARAPHRASE OF EXCERPT FROM TELEGRAM
FROM: American Consulate, Casablanca, Morocco
DATE: March 7, 1942
A prominent French businessman, who recently arrived here,
asked me yesterday why nothing had been done to prevent the
flow of Polish and Belgian gold to Germany through Algiers and
Marseilles. (Refer to my telegrams from Algiers) He stated
that 205 tons of Polish and Belgian gold out of a total of 325
tons which were stored in Africa have been shipped already. He
has information that three Lufthansa planes are now being made
available by the Germans to ship the remaining 120 tons to
Marseilles from Algiers.
Copy:b :3-13-42
March 13, 1942.
Note:
Approximately $548,000 in gold is
being sold to De Surinaamsche Bank today.
F.D.
354
AIRMAIL
355
C
0
P
DE SURINAAMSCHE BANK N. V.
Telegramadres: Bank.
PARAMARIBO, 6th November 1941.
The Federal Reserve Bank,
NEW YORK, N.Y.
Dear Sirs,
Some time ago we requested the Chase National Bank at your place
to furnish us with some particulars regarding the possibility of purchasing
gold bars and having them earmarked in order to strengthen the cover of the
banknotes issued by our institution. In their reply the Chase National Bank
intimated that we had to approach you directly in the matter, as your
Institution is the only one authorized to purchase and to earmark gold.
The same information has reached us in the meantime from the Royal Netherlands Legation at Washington.
As the Board of Directors of our Bank has deemed it desirable to
have under earmark gold to a value of $530.000.-up to $550.000.- for
the purpose of partialcover of the banknotes issued by us, we should feel
extremely obliged by your rendering us your assistance in buying gold under
earmark up to the abovementioned amount. In the event our request would
meet with no objections either from you or from the United States Treasury
Department, to which we understand you have to apply for a licence, we
shall be glad to receive your conditions for buying gold and holding same
for our account under earmark.
For your information we may mention that our institution is the
Central Bank for Surinam, in which capacity we have been operating since
1865 with the exclusive right to issue banknotes in this country.
Herewith we are enclosing a certified list of signatures engaging
the Bank, whilst a copy of our by-laws and statutes are at your disposal
at the Royal Netherlands Legation at Washington.
In the meantime we have authorized the Chase National Bank of New
York, Pine Street Corner of Nassau, New York, to pay to you on your request
up to $550.000.- for the purchase of gold.
Thanking you beforehand for your co-operation and soliciting the
favour of a reply by airmail at your earliest convenience, we beg to remain,
dear Sirs
Yours faithfully,
DE SURINAAMSCHE BANK,
COPY - dm - 4/13/42
356
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE March 13, 1942
TO
FROM
SecretaryMorgenthau
Mr. Dietrich
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£34,000
£84,000
Open market sterling held at 4.03-3/4, with no reported transactions.
The Canadian dollar discount widened to 12-1/16 by the close, as compared
with 11-1/46 two weeks ago. The general easiness of the rate so far this month
may reflect some liquidation of Canadian balances by Americans for tax purposes.
It is also reported that some advance payments in Canadian dollars have been made
since the beginning of March to holders of Canadian Pacific Railway bonds coming
due on March
15.S.
American
received
into U.
dollars. holders may have been attempting to convert the funds
The Argentine free peso, which closed at .2361 yesterday. advanced to a
final quotation of .2367 today.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Brazilian milreis (free)
Colombian peso
Mexican peso
.0516
.5775
.2064
Uruguayah peso (free)
Venezuelan bolivar
.5295
.2820
Cuban peso
7/326 premium
It was reported that one of the commercial banks in Portugal cabled its New
York correspondents that it was no longer E buyer of dollars. It is not yet known
whether this represents a general condition in Portugal or whether action has simply
been taken by a single bank. Portuguese benice have been quoting a buying rate for
dollars of 24.55 escudos, equivalent to $.0407 for that currency.
The Federal Reserve Bank of New York purchased 355,000 Swedish kronor in New
York at the rate of .2385-1/2 by order and for account of the Central Bank of the
Uruguayan Republic. The latter advised that these kronor were being used to pay for
imports into Uruguay.
357
-2In order to increase the Stabilization Fund's gold balance, ve purchased
$2,000,000 in gold from the General Fund through the New York Assay Office.
No new gold engagements were reported.
42.67
In London, spot and forward silver remained at 23-1/2d, equivalent to
The Treasury's purchase price for foreign silver was unchanged at 35
Handy and Harman's settlement price for foreign silver was also unchanged at
35-1/8
We made no purchases of silver today.
A
CONFIDENTIAL
COPY NO.
BRITISH MOST SECRET
(U.S. SECRET)
15
358
OPTEL NO. 85.
Information received up to 7 A.M. 13th March 1942.
1. NAVAL.
A Russian submarine was damaged by depth charges north MURMANSK
on the 12th. On the 12th an Armed Merchant Cruiser intercepted a
Spanish vessel 300 miles south of Cape Verdes Islands.
2. MILITARY.
Libya. 11th. Normal patrol activity.
Burma. 10th. Our withdrawal up the Rangoon - Prome road has
continued without enemy interference.
3. AIR OPERATIONS.
Western Front. 12th. Our Fighters destroyed an enemy aircraft
off North Wales and set fire to a minesweeper near Dunkirk.
12th/13th. 135 aircraft were sent out. Kiel 68. Emden 40.
Sea mining off German coast 26. Leaflets Rouen 1. 7 aircraft missing.
At Kiel about 70% attacked. Weather good, slight haze. Bursts seen in
shipyards and Naval barracks, fires started. Intense A/A and searchlights.
Emden very few aircraft attacked. Almost complete cloud. Results
unobserved. 13 R.C.A.F., 3.R.A.A.F. and 11 New Zealand aircraft took part
without casualties.
Libya.
shot
down
one
11th Tomohawks protecting shipping off Sidi Barrani
enemy aircraft. Probably destroyed another and damaged two
more.
Malta. 12th. 58 enemy aircraft attacked Taeali aerodrome
damaging service buildings and motor transport and making numerous craters.
- Burma. Blenheims bombed railway bridges south of Nyaunglebin.
On the 10th enemy aircraft damaged railway yards at Letpadan Junction 10
miles north of Tharrawaddy.
359
RESTRICTED
MID 319.1
Situation
No. 657 M.I.D., W.D. 11:00 A.M., March 13, 1942.
8-11-41
SITUATION REPORT
I.
Pacific Theater,
Philippines: Nothing to report. Burma: The Chinese continue to build up their forces in central and eastern Burma to block
the roads to Mandalay and the upper Burma Road. British forces withdrawing from Rangoon will extend the Chinese line to the west.
Australia: Heavy air action occurred in the New Guinea area where
the Japanese seem to be headed for airfields in central New Guinea in
preparation for an assault on Port Moresby. Japanese vessels have
been severely handled by Allied bombers.
II.
Western Theater.
The Air Ministry reports that British bombers carried out
a heavy attack on the north German Base of Kiel on the night of
March 12-13.
III.
Eastern Theater.
Hard fighting continues especially on the southern frent.
There 18 no change in the general situation. (A situation map will
not be issued this date.)
IV. Middle Eastern Theater.
No change in ground situation. R.A.F. bomb attack Benghazi
and Axis air forces continue aerial bombardment of Malta.
RESTRICTED
360
N.B.S.1
ADDRESS BUREAU OF SHIPS, NAVY DEPARTMENT
AND REFER TO No.
NAVY DEPARTMENT
ENCLOSURES
BUREAU OF SHIPS
WASHINGTON, D.C.
march 14, 1942
Hon. Hanry Maganthaw.
Dear un
I no scewed word from
Chicago yasterday than the Collector of
Internal Rumme bad accepted tax antic
pation bonds held by me in Payment
of mus kuntess and my tax due was 15
I would you to know than I deeply
appreciate you countesy and a boor all
the gracious way in which you took
care of this matter. I shall remem
her it a long time as it said me
much worry.
Vem respectfully
wa kun fess
Lisis. Camdr USUR
2120 16tl St aw
360
N.B.8.1
ADDRESS BUREAU OF SHIPS. NAVY DEPARTMENT
AND REFER TO NO.
NAVY DEPARTMENT
ENCLOSURES
BUREAU OF SHIPS
WASHINGTON D.C.
March 14, 1942
Hon. Hanry Maganthan.
Dear un
I received word from
Chicago yasterday than the Collector of
Internal Rummer bad accepted tax antic
pation bonds held by me in payment
of mas kunfess and my tax due was 15
I would you to know than I deeply
appreciate your countesy and a boor all
the gracious way in which you took
care of this matter. I shall remem
her it a long time as it said me
much worry. Vem respectfully
wa knotess
Lisus. Counds USUR
2120 16tl st aw
STRICTLY CONFIDENTIAL
Daily changes in the stock of Series E savings bonde on hand 1
(In thousands of pieces)
:
:pieces sold
:
Mar. 1
:
: this day
Number of pieces
manufactured
this day
Stock on hand
at close of
day
IBM
deliveries
this day
none-closed
none-closed
24,386
-
304
500
24,582
-
160
500
24,922
171
500
25,251
200
500
25,551
625
210
500
25,841
-
211
none-closed
25,630
none-closed
none-closed
25,630
-
344
500
25,786
-
10
123
500
26,163
11
192
300
26,271
2
3
4
5
6
7
8
9
12
157
300
26,414
13
193
300
26,521
Office of the Secretary of the Treasury,
Division of Research and Statistics.
1
:
: Number of
625
-
625
-
-
800
-
March 14, 1942
Includes stock in hands of (1) Federal Reserve Banks and branches, (2) Post
offices, (3) Federal Reserve Bank issuing agents, and (4) Treasury vaults
in Washington.
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Eleven Business Days of March, February and January 1942
(March 1-13, February 1-13, January 1-13)
On Basis of Issue Price
(Amounts in thousands of dollars)
:
February
January
:
:
$ 40,003
$ 47,158
$ 72,127
118,956
178,899
188,400
158,959
20,394
89,532
226,057
29,433
146,008
260,527
27,386
110,439
$268,884
$401,499
$398,352
:
Total
: February : January
March
over
: February
:
Series G - Banks
:
Series F - Banks
:
:
Series E - Total
over
:
Series E - Banks
February
:
Series E - Post Offices
March
over
Percentage of Increase
or Decrease (-)
:
:
:
: March
or Decrease (-)
:
:
Item
Amount of Increase
:
Sales
February
over
January
-$ 7,155
- 59,943
- 9,501
- 33.5
- 5.0
- 67,098
- 34,470
- 29.7
- 30.7
- 38.7
- 13.2
- 56,476
2,047
35,569
-$132,615
$ 3,147
- 9,039
-$ 24,969
- 15.2%
- 34.6%
7.5
32.2
- 33.0%
Office of the Secretary of the Treasury, Division of Research and Statistics.
0.8%
March 14, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds
of sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
CONFIDEI
UNITED STATES SAVINGS BONDS
Daily Sales - March, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
Bank Bond Sales
Bond Sales
All Bond Sales
Series E
Series E
Series F
Series G
$ 5,811
$ 15,868
2,975
3.395
3,869
4,179
3,480
$ 2,043
$ 8,726
8,459
8,833
10,448
10,696
11,586
$ 26,636
1,629
2,658
1,680
1,759
1,586
8,780
12,558
11,870
10,825
6,328
18,868
24,048
23,998
23,279
19,499
4,967
2,804
3,156
2,686
2,682
18,636
5,719
10,002
8,114
10,594
3,944
1,365
1,533
1,133
1,065
8,488
4,162
7,287
5,504
5,007
$ 40,003
$118,956
$ 20,394
$ 89,532
Total
Series E
Series F
Series G
Total
$ 21,678
11,434
$ 2,043
$ 8,726
1,629
12,228
14,317
14,875
15,066
2,658
1,680
1,759
1,586
8,780
12,558
11,870
10,825
6,328
32,447
21,843
27,443
27,867
27,458
22,979
31,068
11,246
18,823
14,750
16,666
23,604
8,523
13,158
10,800
13,276
3,944
1,365
1,533
1,133
1,065
8,488
4,162
7,287
5,504
5,007
36,035
14,050
21,979
17,436
19,348
$228,881
$158,959
$ 20,394
$ 89,532
$268,884
March 1942
2
4
5
unu
7
9
10
11
12
13
Total
Office of the Secretary of the Treasury, Division of Research and Statistics.
Source: All
figures
are deposits
with the
Treasurer of the United States on account of proceeds of
sales
of United
States savings
bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
March 14, 1942.
364
March 14, 1942
Dear Mr. Seubert:
Thank you for your telegram of
March
10,
E. Wilson. 1942, In regard to Dr. Robert
I appreciate very much your help
in making him available for service as a
director of General Aniline & Film Corporation.
Sincerely yours,
(Signed) H. Morgentham, Jee
E. G. Seubert, Esg.,
President,
Standard 011 Company of Indiana,
Chicago, Illinois.
EHF:vls - 3/14/42
Photo file n.m.c.
file to thompson
942 MAR
2
ASP 11 47
WE28 63/62 SER 1 EXTRA
CHICAGO ILL MAR 10 1942 948A
HENRY MORGENTHAU JR
A
U
2
R
SECRETARY OF THE TREASURY
Y
Robb.
REYURTEL NINTH. IN SPITE OF HEAVY LOAD DR. WILSON IS CARRYING
L
IN DEFENSE MATTERS WE ARE WILLING THAT HE DEVOTE HALF TO
G
R
I TWO-THIRDS OF HIS TIME FOR THE FIRST MONTH TO GENERAL
ANILINE & FILM COPPORATION, WITH UNDERSTANDING THAT IF
POSSIBLE HE WILL BF REPLACED OF IN ANY CASE THE DEMANDS ON
HIS TIME WILL BE VERY MODERATE AFTER FIRST MONTH
EG SEUBERT PRESIDENT STANDARD OIL CO OF
INDIANA.
1141A.
T
366
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
March 14, 1942
MEMORANDUM TO THE SECRETARY:
There is submitted herewith the operating report of
Lend-Lease purchases for the week ended March 14, 1942.
The transportation situation, likewise the matter
of working out with the War Production Board the means
whereby we will obtain deliveries in accordance with
production allocation schedules are two major considerations.
As a result of your efforts, it is believed the
transportation situation will be cleared up within the
next day or two through the issuance of an Executive
Order designating unified control.
The problem of obtaining deliveries as scheduled
in allocations is being given most active attention.
ClAfton E. Mack
Director of Procurement
Special
LEND-LEASE
TREASURY DEPARTMENT, PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS
AS OF MARCH 14, 1942
Allocations
Purchase Authoriza-
tion (Requisitions)
Requisitions cleared
for purchase
Obligations (Purchases)
Total
RUSSIA
$195.6
(181.0)
$ 49.3
(932.0)
U. K.
$607.6
(602.2)
$780.3
$549.1
$184.8
$ 43.1
(752.5)
(529.4)
(178.5)
$714.5
(689.6)
$514.7
$932.0
CHINA
( 56.2)
ADMINISTRATIVE
UNDISTRIBUTED &
EXPENSES
MISCELLANEOUS
$ .9
( .9)
$ 78.6
91.7)
$ 3.3
-
( 41.3)
-
( 3.3)
$156.7
$ 39.8
-
(504.2)
(144.0)
( 38.9)
$ 3.3
-
$670.6
$489.8
$143.4
$ 35.0
(629.4)
(478.4)
(113.6)
( 35.0)
$232.8
$200.7
$ 17.5
$ 14.3
-
(222.0)
(195.2)
( 12.7)
( 13.9)
-
( 2.5)
.6
( .6)
$ 1.8
( 1.8)
Deliveries to Foreign Governments
at U. S. Ports
$
(
.3
.2)
Deliveries to foreign governments at U. S. Ports do not include the tonnage that is either in
storage, "in-transit" storage, or in the port area for which actual receipts have not been received from the foreign governments.
Note: Figures in parentheses are those shown on report of March 7, 1942.
368
EXPLANATION OF CHANGES
Allocations:
was a net increase for the week in allocations There
of $1531.23.
The allocations of United Kingdom and Russia increased $5,407,956.29 and $14,562,343.95, respectively.
The Chinese allocations decreased $6,823,121.50,
the funds reverting to undistributed allocations as a
result of the cancellation of two requisitions for
gasoline.
The Purchase Authorizations, Requisitions Cleared
for Purchase, Obligations, and Deliveries to Foreign
Governments at U. S. Ports show increases in total and
with respect to each of the requisitioning governments.
369
For Miss Chauncey
TREASURY DEPARTMENT
OFFICE OF THE SECRETARY
March 14, 1942
CONFIDENTIAL
Received this date from the Federal
Reserve Bank of New York, for the confidential
information of the Secretary of the Treasury,
compilation for the week ended March 4, 1942,
showing dollar disbursements out of the British
Empire and French accounts at the Federal
Reserve Bank of New York, and the means by
which these expenditures were financed.
A
3/14/42
For M US Chauncey
370
FEDERAL RESERVE BANK
OF NEW YORK
March 12, 1942
CONFIDENTIAL
Dear Mr. Secretary: Attention: Mr. H. D. White
I am enclosing our compilation for the
week ended March 4, 1942. showing dollar disbursements out of the British Empire and French accounts
at this bank and the means by which these expenditures were financed.
Faithfully yours,
/s/ L. n. Knoke
L. . Knoke,
Vice President.
The Honorable Henry Horgenthau, Jr.,
Secretary of the Treasury.
Washington, D. C.
Enclosure
Copy:vw: 3-13-42
Strictly
ANALYSIS OF BRITISH AND FRENCH ACCOUNTS
(In Millions of Dollars
BANK
BANK OF ENGLAND (BRITISH GOVERNMENT
Total
Debits
PERIOD
First year of war
(8/29/39-8/28/40)
Gov't
Expendi-
tures(a)
Net Incr.
Proceeds of
Other
Total
Debits
Credits
Sales of
Securities
(amidal)(b)
Gold
OF
DEBITS
CREDITS
DEBITS
Confidential
Week Ended March 4, 1942
(+) or
Decr. (-)
Credita(s) in Balance
Other
Proceeds
Gov't
Total
Debits
FRANCE
CREDITS
Expendi-
Other
tures (d)
Debits
Total
Credits
of Gold
Other
Sales
Credits
Net Incr.
(+) or
Decr. (-)
in Balance
1,828.2
1,356.1
52.0
420.1
35.0
866.3(e)
416.6(e)
449.7
1,095.36)
195.1(e)
+229.0
605.6
1,187.6
900.2
1,793.2
2,793.1
2,109.5
108.0
575.6
10.8
878.3
421.4
456.9
1,098.4
198.2
+220.1
1,425.6
1,356.7
900.2
2,792.3
410.8
2,189.8
1,193.7
274.0
722.1
13.2
38.9
4.8
8.8
-
8.8
30.1
1,792.2
34.1
2,203,0
2.0
154.1
35.3
0.3
0.3
0.5
0.5
0.2
Oct. Oct. 29
0.3
0.3
0.3
0.3
111.6
16.1
16.1
0.4
Dec. 4.- Dec. 31
44.5
18.8
-
156.1
88.4
41.9
-21.5
-
31.7
-
77.3
150.1
-
109.0
176.2
150.9
134.6
51.5
20.1
0.8
-
105.9
35.0
-
140.9
-36.9
0.8
-
0.8
0.4
102.3
23.2
29.1
69.3
0.2
-
0.2
87.2
63.8
23.4
57.2
33.0
30.0
-
14.3
4.9
2.9
14.9
-
6.7
14.3
-
War period through
December, 1940
Second year of war
(8/29/10) Bramm
1941
Aug, 28 - Oct. 1
Oct. 30 - Dec. 3
69.6
-
1,0
-
-
-
133.6
51.5
1942
Jan. 1- Jan. 28
Jan. 29 - Feb 25
0.5
1.0
68.8
56.2
0.4
0.4
- 15.7
0.4
0.4
0.3
0.3
+ 0.2
+ 0.3
0.1
0.1
+ 0.1
0.1
-
0.1
0.1
+0.1
+0.1
0.1
0.1
LICENSE ENDED:
Feb. 11
18
25
4
Mar,
19.2
17.7
22.4
39.3
14.8
15.2
23.7
1.0
10.2
15.6(f) 59.2
-
*For monthly breakdown see tab
e+For
monthly
tab
Tilons
to
9.0
14.3
8.1
2.8
=
0.1
Week ended March 4, 1942
Cumulation from July b, 3940
23,
-
-
59.2(+)+19.9
Transfers from Britth Purchasing Commission to
Bank of Canada for French Account
-
-
Average Weekly +coenditures Since Outbreak of War
France (Chrough June 19, 1940) 199.6 Million
27.6 million
England (through June 19. 1940)
40.2 Million
England (since June 19.
9.2
14.9
-
-
-
0.1
0.4
-
0.1
162.7
1961.
1941.
-
-
O
Includes
payments
for account
of British
Purchasing Commission, British Air Ministry, British Supply Board, Ministry of
Supply
Timbey
Control,
and Ministry
of Shipping.
(b) Estimated figures based on transfers from the New York Agency of the Bank of Montreal, which apparently the
proceeds of official British sales of American securities, including those effected through direct negotiation. represent In
to the official selling, substantial liquidation of securities for private British account occurred, addition the
early months of the war, although the receipt of the proceeds at this Bank cannot be identified with particularly during
to our
datasecurities
supplied by
the British
Treasury
andamounted
released by
Morgenthau, total official and private any accuracy. liquidation Accordin
of
through
December,
1940
toSecretary
$334 million,
(c)
Includes about $85 million received during October, 1939 from the accounts of British authorized banks with New York
presumably reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since October banks,
1939 receipts. apparently represent the acquisition of proceeds of exports from the sterling area and other currently accruing dollar
(d) Includes payments for account of French Air Commission and French Purchasing Commission.
(e) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day.
(1) Includes $4.3 million transferred to official Canadian account here.
(g) Includes:
(1)
$40 million
receivedin
from
R.F.C.
as extended
further advance
$425million.);
million loan secured by British-owned securities and
direct
investments
U. S.
(Total
so far on
- $390
(2) $7.4 million received from New York accounts of British authorized banks;
(3) $1.3
fromrepresenting
New York account
of Bank
de 1'Indo
Chine,
by order of Government of New Caledonia;
(4)
$2.5 million
million received
presumably
proceeds
of wool
exports
to U. Noumea,
S.
Transfers
Proceeds
to
official
Total
Debits
PERIOD
First year of war
(8/29/39-8/28/40)
323.0
War period through
December. 1940
Second year of war
Aug. 28- Oct. 1
477.2
of
Other
Debita
Total
Credits
16.6
306.4
16.6
British
A/C
460.4
-
23.1
-
1941
Oct, - Oct,29
37.4
-
52.8
Dec. L- Deg. 31
NZ
0.1
Oct. - Dec
L
Lier
-
8.1
Sales
() or
Deor. (-)
in Balance
+181.7
31.2
3.9
27.3
36.1
30.0
6.1
+ 4.9
110.7
41,0
+230.2
57.9
14.5
43.4
12.3
+ 6.5
534.8
20.9
50.1
707.4
62,4
460.6
246.2
3.4
123.9
88.5
1.6
29.1
72.2
16.2
81.2
10.7
0.5
10.2
2.8
62.9
2.1
16.3
0.7
+ 9.0
462.0
52.2
55.5
460.4
23.1
- 17.7
8.2
2.7
8.0
5.9
2.1
19.7
7.8
13.2
5.5
11.9
-20.3
10.3
6.9
3.4
11.6
9.0
2.0
4.9
- 25.5
3.9
1.8
2.1
2.8
3.2
2.6
6.0
6.5
4.5
21.2
52.7
32.5
19.3
47.7
22.2
17.3
33.0
27.0
35.7
12.4
5.2
10.H
5.9
16.4
10.3
4.9
5.9
3.3
2.7
8.1
52.4
2.6
31,0
-
-
-
-
23.3
+ 1.6
8.4
-
4.9
5.6
-
7.0
6.1
0.2
-
3.2
1.0
0.2
2.1
4.3
45.5(a)
+.44.3
5.3
-
+ 0.2
+
1.3
- 1.1
10.8
3.1
1.6
1.6
6.3
6.8.
1.5
0.1
0.1
1.4
0.2
-
- 7.9
10.8
4.5
1.5
-
Weekly Average of Total Debits Since Outbreak of
War
million
7.8
through March 4, 1942
For monthly breakdown see tabulations prior to April 23, 1941.
.. For monthly breakdown see tabulations prior to October 8, 1941.
(a) Includes nearly $40 million representing proceeds of U. S. Government checks deposited by War Supplies, Ltd.
U
A/C
Other
Credite
32.4
WEEK ENDED:
4.9
Total
Debits
Gold
38.7
Jan 29 - Fab 25
25
in Balance
Total
Credite
20.9
34.1
-
Decr. (-)
of
Other
Debite
412.7
34.1
5.2
16.4
Other
Credits
to
Official
British
504.7
39.5
18
For French
(*) or
A/C
Jan.
Feb 11
For Own
Net Inor.
A/O
39.5
-
Gold
Transfers
Transfers from Official
British A/C
Sales
37.4
1942
DEBIT
CREDITS
DEBITS
0.2
2.1
0.2
0.6
0.4
-
0.2
0.6
0.4
+
0.04
1.2
374
C
0
6892
P
Y
ELP
Rio de Janeiro
This telegram must be
paraphrased before being
Dated March 14, 1942.
communicated to anyone
other than a Governmental
agency. (BR)
Rec'd 6:07 p.m.
Secretary of State,
Washington.
865, March 14, 3 p.m.
The legislation has seriously affected banking
and commercial transactions in Rio de Janeiro, Sao
Paulo and other banking houses. Government officials
will meet on Monday to draft the regulations. Inform
Commerce and Treasury.
CAFFERY
NK
Copy bj:4-3-42
375
TELEGRIM SENT
PH
This telegram must be
paraphrased before being communicated to anyone
other than 0 Governmental
agency. (BR)
March 14, 1942
1 p.m.
AMERICAN CONSUL
SYDNEY (AUSTRALIA)
100
FROM TREASURY
QUOTE With reference to cable No. 53 dated
March 12 sent by the Commonwealth Bank of Australia,
Sydney, to the Federal RESERVE Bank of NEW York, the
following procedure is suggested with respect to
checks drawn on the Treasurer of the United States.
1. All United States dollar checks drawn on
the Treasurer of the United States negotiated by the
Commonwealth Bank of Australia are to be delivered
to the American Consul General, Sydney, accompanied
by a list in triplicate with complete description
Each check ns follows: name of drawer; symbol number;
check number; amount; payee's name; date of check.
Consular officer will carefully verify checks
against list and advise Treasury by wire through
State Department aggregate amount of checks delivered
by bank.
376
-2-#100, March 14, 1 p.m. to Sydney.
by bank. Upon receipt of this advice, Treasury will
Effect credit in corresponding amount to account of
Commonwealth Bank of Australia, Sydney, with the
Federal RESERVE Bank of NEW York,
Consular officer should instruct Commonwealth
Bank of .ustralin to USE all possible diligence in
identification of payee and determining validity of
Endorsements. The commonwealth Bank of Australia
should endorse checks as follows: INNER QUOTE. Pay
to the order of Trensurer of the United States for
credit of our account with the Federal RESERVE Bank
of NEW York. Signed Commonwealth Bank of Australia.
END INNER QUOTE. Treasury will look to bank only for
usual guaranty under laws applicable in Australic.
Consular officer should forward checks accompanied
by one copy of list to Tregsurer of the United States,
Washington, as promptly 0.5 possible by safest means
available. Second copy of list should follow by
separate carrier at Earliest possible date. Third
copy should be retained by consular officer.
2. Consular officer should make no arrangements
for insurance as shipments will bE COVERED by Govern-
ment losses in Shipment Act.
3. The
377
-3-100, March 14, 1 p.m. to Sydney.
3. The designation of the Commonwealth Bank
of Lustralin, Sydney, as a depositary of public
monies of the United States io hereby EXtEndEd to
carry out the procedure outlined in this telegram.
4. Please advise Commonwealth Bank of
Mustralic, Sydney, and other United States Government
officials appropriate parts hereof. END QUOTE
The Department approves the foregoing. Any
EXPENSE incurred in carrying out the instructions
contained in this telegram should be included in
regular accounts as separate item for billing
Treasury in accordance SEC. V-45, Foreign Service
Regulations.
WELLES
..CTING
(FL)
FD:FL:ME
378
Treasury Department
Division of Monetary Research
O
Date
To:
From:
March 18, 19 42
Miss Chauncey
H. D. White
For the Secretary's files. I do
not think it needs to be brought
to his attention.
of
MR. WHITE
Branch 2058 - Room 214
379
C
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
Eu 842.20 Defense/153
March 14, 1942
The Secretary of State presents his compliments to the Honorable
the Secretary of the Treasury and refers to his letter of May 19,
1941, transmitting a copy of despatch no. 1488 of May 17, 1941,
from the American Legation at Ottawa with which was enclosed a
certified copy of the note from the Secretary of State for External
Affairs of Canada setting forth the guarantee of the Canadian Government to the Government of the United States of commitments, obligations and covenants which the Company, "War Supplies Limited," may
give to any department or agency of the Government of the United
States.
In order that the files of the Treasury Department may be
complete on this subject, there is enclosed a copy of despatch
no. 2624 of February 24, 1942, from the American Minister at Ottawa
transmitting a certified copy of a further note from the Department
of External Affairs regarding a supplemental agreement between War
Supplies Limited and the Government of the United States.
Enclosure:
From the American Legation,
Ottawa, No. 2624, February 24,
1942, with enclosure.
Copy:inc
3/17/42
380
No. 2624
Ottawa, February 24, 1942
Subject: Transmitting certified copies of a note from the
Department of External Affairs regarding supplemental
agreement between War Supplies Limited and the
Government of the United States.
The Honorable
The Secretary of State,
Washington, D. C.
Sir:
In compliance with the Department's instruction no. 853,
February 18, 1942, I have the honor to transmit four certified
copies of Note no. 12, February 3, 1942, from the Department of
External Affairs, regarding a supplemental agreement between War
Supplies Limited and the Government of the United States.
Respectfully yours,
A true copy of the
original signed by:
Enclosures:
Copies of Note.
824
RBJ: I c a
In quadruplicate
Copy:bj:3-17-42
Pierrepont Moffat
381
DOMINION OF CANADA
)
)
CITY OF OTTAWA
)
ss.
)
LEGATION OF THE
UNITED STATES OF AMERICA
I, J. Graham Parsons, Vice Consul of the
United States of America at Ottawa, Canada, duly
commissioned and qualified, do hereby certify
that the annexed copy of Note no. 12, dated
February 3, 1942, from the Secretary of State for
External Affairs of the Dominion of Canada to the
United States Minister to Canada, is a true copy
of the original note in the files of this Legation,
the same having been carefully examined by me and
compared with the said original and found to agree
therewith word for word and figure for figure.
IN WITNESS WHEREOF I have
hereunto set my hand and
affixed the seal of my
office, this 24th day of
February, A.D. 1942.
(s) J. Graham Parsons
J. Graham Parsons
Vice Consul
of the United States of America
Service No. 164
No fee prescribed.
COPY:rca
382
COPY
DEPARTMENT OF EXTERNAL AFFAIRS - CANADA
Ottawa, February 3, 1942
No. 12
Sir,-
The Canadian Government has heretofore by instrument dated May 15, 1941,
guaranteed to the United States Government all commitments, obligations and
covenants which War Supplies Limited might give to any Department or Agency
of the United States Government in connection with any contracts or orders
which might be given to the said company by any Department or Agency of the
United States Government and has agreed to waive notice of any change or
modification which might be made from time to time in these commitments,
obligations or covenants.
War Supplies Limited has, on January 24, 1942, entered into a supplemental
agreement with the United States Government, which agreement modifies and is
supplemental to the following designated contracts between such company and
the Ordnance Department, Air Corps and Signal Corps of the War Department of
the United States Government:
Ordnance Department
W. S. L. No.
DAW ord 13
DAW ord 16
DAW ord 17
DAW ord 25
DAW ord 27
DAW ord 31
DAW ord 39
72-19
72-13
72-12
72-33
72-28
72-34
72-35
72-105
W. ord 571
3.7" Complete Equipments
6 Pdr. A.P. Shells
40 MM Shells
4.5" Barrels
.55" Ammunition
Lee Enfield Rifles
Boys Rifle Anti-Tank
Shell H.E. 4.5" M.65
$30,000,000.00
36,000,000.00
10,000,000.00
3,000,000.00
7,500,000.00
6,000,000.00
5,000,000.00
6,464,080.00
Signal Corps
W. S. L. No.
72-10
DAW 227 sc-27 Canadian G.L. Sets
$24,000,000.00
DAW 535 ac 215 AT-16 Aeroplanes, etc.
$17,741,962.40
Air Corps
72-16
Total
145,706,042.40
and provides for the making of advance payments thereon.
The Canadian Government hereby consents to the execution of said supplemental agreement and the modification of the aforementioned contracts thereby
and declares that its guarantee of the commitments, obligations or covenants
of War Supplies Limited under such contracts including the commitments,
obligations or covenants of such company assumed under such supplemental
agreement shall remain in full force and effect and without diminution or change.
Accept, Sir, the renewed assurance of my highest consideration.
/s/ W.L. Mackenzie King.
The United States Minister to Canada,
Secretary of State
United States Legation
for External Affairs
Ottawa, Canada.
383
AF
This telegram must be
paraphrased before being
communicated to anyone
other than a Governmental
agency. (BR)
Chungking via N. R.
Dated March 14, 1942
REC'D 6 a.m.
Secretary of State,
Washington.
224, March 14, 9 a.m.
Following for Fox, care of Secretary of the
Treasury from Adder:
"TF21.
OnE. RE your 147 of March 4, 2 p.m.
Board accepts your recommendation and asks you
to transmit following message to Treasury. Board desires to EXPRESS its appreciation to the United States
Treasury for consulting with it on freezing cases involving China. The Board has no objection to the
transaction referred to in the message of March 4 being licensed by the United States Treasury.
Two. Could you please cable details Treasury
Order of February 25 in as far as it affects Chinese
residents in America?
Two. Questions on which information particularly
wanted:
(A) Definition of resident, and whEthEr or not
term
384
-2- #224, March 14, 9 a.m. from Chungking via N. R.
term includes Chinese Government official, and
(B) Date from which a person's residence must
COMMENCE in order to have his funds unfrozen."
GLUSS
EDA
385
C
0
P
Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
NE 882.515/34
March 14, 1942
STRICTLY CONFIDENTIAL
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and refers
to a telephone conversation between Mr. Dietrich and an
officer of the Division of Near Eastern Affairs on March 11,
1942, concerning the desire of the Treasury Department to
obtain a copy of the Department's telegram no. 36 of
March 5, 1942, to the American Legation at Monrovia,
Liberia, with respect to the currency problem of that
country.
A copy of a paraphrase of the telegram in question
is transmitted herewith.
Enclosure:
Paraphrase of no. 36,
March 5, 1942, to
Monrovia.
386
PARAPHRASE OF CONFIDENTIAL TELEGRAM TO AMERICAN
LEGATION, MONROVIA, NO. 36, MARCH 5, 8 P.M.
STRICTLY CONFIDENTIAL.
The arrival of American forces in Liberia will raise
a difficult paymester and commissary problem, as you will
realize. The Department would therefore welcome the receipt,
as soon as possible, of your views and recommendations
concerning the problem of currency in Liberia. The War
Department wishes, if practicable, to introduce the use
of United States currency for salary payments and local
expenditures, and officials of the War and Treasury Departments and Firestone are now studying the various aspects
of the matter. The Department would like to be informed
particularly whether it would be opportune at the present
time to open discussions with the Government of Liberia
on the general question of monetary reform. Because of
the need for secrecy, due to the military phase of the
question, any approach to the problem from that angle
should be handled in very strict confidence.
882.515/34
Copy bj:3-15-42
387
LEGATION OF SWEDEN
WASHINGTON, DC
March 14, 1942
Re: Accounts designated "Mr. Wollmar Bostrom and
Mr. Harry Eriksson, acting jointly (property
of Sveriges Rikabank subject to disposal by
Mr. Bostrom, Minister of Sweden to the U.S.,
and Mr. Eriksson, Commercial Counselor of the
Swedish Legation in Washington, acting jointly)"
Federal Reserve Bank of New York,
33 Liberty Street,
New York, N. Y.
Dear Sirs:
We beg to inform you that in pursuance of the established policy to
keep a certain proportion of Swedish foreign assets in gold, it has been
decided to increase the gold holdings for Sweden's account in the United
States by gold bars to the approximate value of $25,000,000.
We should, therefore, be obliged if you would be good enough to increase the amount of gold you are holding for our account as designated
above with fine gold bars to the approximate value of $25,000,000 and
debit the purchase price, at $35 per fine ounce, plus 2.5 promille, to
the dollar account which also bears the above designation.
Very truly yours,
Signed
Harry Eriksson
Commercial Counselor of the
Swedish Legation
W. Bostrom,
Minister of Sweden
Received by telephone from the Federal Reserve Bank of New York, 2:00 pm
March 16, 1942
kma
388
INCOMING CABLEGRAM
Date: March 14, 1942
From: Bern
Federal Reserve Bank of New York
New York
#7.
In order to proportionate better our holdings of gold
and devisen we beg you to earmark for our special earmarked
gold account with you approximately $20,000,000 fine gold
debiting equivalent to the account of our Zurich office value
today Stop Please cable details both parties.
(Sgd.) Banque Nationale Suisse
(Received by telephone from Federal Reserve Bank of New York, N. Y.
9:45 a.m., March 16, 1942)
emk
389
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE
TO
FROM
March 14, 1942
Secretary Mergenthau
CONFIDENTIAL
Mr. Bietrich
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£12,000
£ 4,000
Open market sterling remained at 4.03-3/4, with no reported transactions.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
12% discount
Argentine peso (free)
Colombian peso
Mexican peso
.2365
.0516
.5775
.2064
Uruguayan peso (free)
Venezuelan bolivar
.5295
.2820
Cuban peso
7/32% premium
Brazilian milreis (free)
In connection with yesterday's report that one of the banks in Portugal
had stopped purchasing dollars, another Portuguese bank cabled today that it was
still a buyer of dollars against escudos. The New York bank that received this
advice sold a small amount of escudos to another bank here at the slightly high
quotation of .0413.
There were no gold transactions consummated by us today.
The Federal Reserve Bank of New York reported that the Central Reserve
Bank of Peru was shipping $462,000 in gold from Peru to the Federal for its
account, disposition unknown.
D
COPY NO
13
BRITISH MOST SECRET.
(U.S. SECRET) .
OPTEL NO. 86.
Information received up to 0700/14.
1. NAVAL.
A large vessel heavily escorted passed down the channel
**.
from East to West early this morning. An attack by Dover Coastal craft
was beaten off. Later five of H.M. Destroyers attacked with torpodoes
but no results have yet been reported. One of H.M. Submarines torpedood
and sunk a 7,000 ton escorted merchant ship off the Tunisian Coast on
the sixth sustaining minor damage during the counter attack.On the twelfth.
a small British vessel was sunk by mine off Aberdeen.
2. MILITARY.
Libya. 12th. increased enemy activity in area South of Tmimi.
Russia. The Russians are attacking North East of Kharkov.
3. AIR OPERATIONS.
Western Front. 12/13th. Correction - three New Zealand
aircraft were among those missing. About eightyfour tons of bombs were
dropped on Kiel and about thirtysix tons on Emden. 13th. Eleven
Bostons attacked Hazebrouck Railway centre. The Fighter escort
destroyed eight enemy fighters, probably destroyed four and damaged four.
Six Spitfires are missing, one pilot safe. 13/14th. 188 bombers were
sent out - Cologno 135, Boulogne 20, Dunkirk 19, leaflets Paris area 7,
sea-mining 5, Dutch aerodromes 2. Four aircraft are missing and three
crashed. Most of crews killed. Preliminary reports indicate a
successful attack on Cologne in good visibility.
Malta. 13th. 25 enemy aircraft attacked Takali aerodrome
causing further serious damage to service buildings and stores.
391
RESTRICTED
MID 319.1
Situation
No. 658
M.I.D., W.D.
8-11-41
11:00 A.M., March 14, 1942.
SITUATION REPORT
I.
Pacific Theater.
Philippines: Nothing to report. Burma: A general line
THARRAWADDY-TOUNGOO-SOUTHERN SHAN STATES is stable and inactive with
the exception of a British counterattack in the NYAUNGLEBIN-SHWEGUN
area. Australasia: The R.A.A.F. attacked Gaemata, New Britain, and
carried out reconnaissance operations over that island and New Guinea
without the loss of planes. Japanese landings on additional Solomon
Islands points are reported. The Australian Air Ministry reported that
Japanese Navy fighters attacked Port Moresby on March 14. Other Japanese
planes bombed a point 60 miles to the west of Port Moresby, near the
Yule Island Mission. Grounded Japanese planes were damaged at Rabaul on
March 12 by R.A.A.F. aircraft.
II.
Western Theater.
British Air Ministry reported that R.A.F. bombers carried out a
heavy offensive against the Rhineland City of Cologne during the night
of March 13-14. A few German raiders appeared over Britain during the
night of March 13-14.
III.
Eastern Theater.
The Russians are continuing their attacks including the Crimea.
The German High Command reports the repulse of all attacks with heavy
losses particularly on the Kerch Peninsula. (A situation map will not
be issued this date.)
IV.
Middle Eastern Theater.
Situation remains unchanged.
RESTRICTED