The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
,..
. .
)
. :127
- '25 . - .
MR.
BUFFINGTON: : You have got to lay· a little nior·e
ground work here, I thi~.
wa~
MR'. ~RYCE : We ll ~ .you have got the. background.
talking· about trY-ip.g· to sell some }?onds.
I
MR. HAAS : Couldn't you put . in most of the terms?
You could probably say you · a~e going to have a half ..
percent, and it would ~ less than· a year:. In oth.e r
words, you wo:uld ju~t leave open the maturity partof
it which would give the person a prettY- good idea what
that security is; _ If y-ou just say, "A' certificate; no
coupon, no· maturity, and so on," it might 'be - you 'could
•
.
sa-,, "A half percent and less .than a year. 11
r
MR •. BRYCE : But the importan~ thing is the order.
mean, you wire Johnsons and Company you are going to
have something, and he come·s ba9k and· says he wants· a
half million, and he can't say that until he knows what
· you are talking about. That to a bO'n.d man is the ·
important .news.
r
Oh, r · see ·.
MR. HAAS:
~.
BRYCE: Do you see my point? And I should think
any .corporation that had any' sense . and had a .letter
fr.om the Secretary· of the Treasury saying, ·uDo you want
to hear this thing, 11 would automatically
write .back and
say, "Yes, I want to hear about it, 11 whether he buys it.
or not. That is something else. If he buys it, ·that i s·
what yoQ·are · interested in . You want him to buy tt right .
along •. Th~t i.s my - coming' in fr e sh here, that is ·.my
slant.
· ·
th~t
MR. BUFFINGTON:
·that-H.M.JR:
Well; Jerry, the reason you say
You wouldn't know whether ~e bought. it.
MR. BUFFINGTON: But we have talked other types· of
securities t.han · qertificates of indebtedness .
MR •. BRYCE :
You would ha·v e it coming. ba·ck here; and
128
- 26' - .
you would have contr'ol of the· thing. Doe·s that .make
any sense?
MR. BUFFINGTON: I like the idea of· it coming back
he·re.
' /
MR. BRYCE: You could run the whole show right .here."
H.M. JR: Well, yo~are not thinking .. of their sendin~
checks
in here. ·
, t
the
·MR. 'BELL: 'No, just the indications as to whether
they· are interested and all the mailing 11sts would be
here, the ·way George plans. We mail out the material
from Washington .
, ·
H.M. JR: Well , I have . gotte~ over in these fifty
minutes what I had in my 'mind • . Have· y.ou got 'time to·
continue the thing a l ittle bit right · now, Dan?
MR . BEll:
Yes.
H.M.·JR: Well , · will, tomorrow morning be all right?
I would like to- when do you .think you will be ready
to have ~nother talk?
MR. B:f;LL: ·Tomorrow.
H. M. J~: . How ·early? ·
MR.·. BELL: Oh, I think - it won't ·take very long to
revamp thes~ . ~etters .
H.M. JR : ·want to start at n~ne-fifteen?
.MR. BELL: . I think we wi~l be ready.
H.M.JR: Well, let's start again at nine~fift ee~ . .
Now, when do we wan~ to see .Eccles and~proul?
MR. BELL: Well, I think we ought to see them not
later than Wednesday .
\
\
•
..
I
,,
.
L
.·
f.
:129
27 - ·
H.M.JR: . I think\ that is too far of£.
MR. BELL: Do you want _to see
H.M. JR:
the~ tomorrow afternoon?
I was g9i)lg to say eleven .o·' cl~ck tomo.rrow.
MR. BUFFINGTON : Could we set this to ten because
- there are one . or two things I wou1d iike to talk over·
with Mr. Bryce about the.. ._ inves"tment bankers' activity in
this thing wh~ch · is another in:tportant point, if y~u are
(
going to use them on the six.th of April. ·
·
1
H. M.JR: .We could make it ten o'clock.
It -w ould give us a li
. tt.le more
'"'
\
H.M.JR.i An hour to cl.e ar ourselves and ask Eccles
and Sproul to come over. here at ·eleven. ·
MR. BELL:
H .M~JR:
Yes .
Or w.o uld you rather h~ve it ill th·e af~ernoon?
~ . BELL:
No, I think that is all ri ght.
Sproul will come down t<;might. . ·
I think
H~M.JR: -But if we tell ' them what the thing is at
eleven in the morning, they can go back and chew the· rag
and come back ·and see us in the afternoon. I think it ·
ought to · be ·settled tomorrow. You could be. telling tal king _it over with your own boys on the assumption
that a. lot of . this stU:f.f would come · in, how would you
·handle it .
·
··
· ' ·
..
..
MR. BELL: You ' mean the list?
H. M. JR; Yes. You see, · I don't know- let me give
.you one other thought . I don ' t know whether businesses ·
are interested in a six-months or five•year or twentyyear. ·1 don't ·know when they begin-to subscribe. I ~hink
t~e only way to tell,. is if w.e are going ~o get out this
klnd of. thing· that. every one of these th1ngs· we should .
/
..
)
'1.30
make a r.eal effort to~ go to them direct, a~d I think -that
just the .way I signed ·millions of letters to .~o q~t over
rrzy- sirnature every. mont~ 'f?r. the people. in Defense Bond.s · - I don9 t 'know how many m1ll1ons of lett·ers I mailed -a
· ,
mon~h, but .~ there ~as ~l) ·this tremendous. ·circulation to
·people hop1ng that they would subscr.ibe to one hundred
dpllars. Why shouldn 't the Secretary. or· the Treasury
send a letter . to the ·f ellow·s , that· might invest a million?
We are literally sending_, I suppose, ·severa+ ~llion
letters a mo~~h over my signa~ure begging p~ople . to buy (
twenty- five dollars ·a month. Now, why should the Secretary o.f the· Treasury send - why ·shouldn"t I s~nd a .letter ·
to th~se? That is what I a~ trying to· do; and, .as I said,
I want to get other groups in selling . I don't want. it
to be in the hands of one- kind· ·o f people. . I would lik~
a little competition.
· ~
\
MR. · BRYCE:
H. M. J R:
B."
~or
y·o u.
l!_ave you got it in you.r~ mind now?
MR. BRYCE:
t oo much. .
H.M.JR:
others:
We will vrork that out
I have _been t alking a lot her~~- probably
I mean, if you go in with
M. Edward . il?n't
Mr.
Bell and· t he
in town, is he?
MR . BEL~: · He will be here Wedne·sday morning . .·
MR. BRYCE :· I wrote him a le t ter the other: day.
wasn't i.n 'towri then.
MR . BELL:
mee ting.
He
He will. be . here Wednesday morning. at that
H. M.JR: Vfhat I would like to haYe is somebody to come
.in and say, ·"If we ~re going to do it , this }.s the kind ·
of lett er we .would like to see you sen~ ou!, and t~en
the thing will step right through .and we w1ll have a _plan •.
MR. BRYCE:
All right.
.
I· .
'
.
·\\
.
• I
.,
...
.
~·
.
1.31. "
- 29
.
.
H.ll.JR: .Now, if .:_i t · is rushing to much", · let's tell
Eccles and· the others to come in at three, ·nan. ~you ·
think i~ is rushing you a ~little bit t~o .muCh? Maybe it_·
. is.
MR . BELL:
Well, 1~t' s try it anyho~.
MR . BUFFINGTON:
O.K.,
w~
will try it at ten.
"""'
:
MRS. KLOTZ: · You can't ma~e it at thre~.
(
H. M. JR: Let~s try· it, because if we are going to do
it, the re is an awful lot of work to be done . ·
MRS. KLOTZ:
MR. BELL:
other stuff?
Yes.
Do you want
~o
hear any of this
'·
MRS. KLOTZ:
H. M. JR:
Are you -going to tell him?
You have press.
I have pre·ss in three minutes .
an
MR. BUFFINGTON; Did you have
opportunity to _read
the other memorandum of ·the di scussions I had with these
• pe~pl e?
H.M: JR: · No, . I did _not . .
MR . "BUFFINGTON : I am having this one proofre-a~.
Would you mind re13-ding i.t just to ge t a little idea: where
tho.se funds are?
H.M. JR:
No , ·send it · up to the .house.
What ape the . other things, Dan?
MR. BELL: Well, there are a good many other things.
One is the wire we .sent ·to the Federals asking them to
comment. on this certificate of indebtedness .
H.M.JR.:· Well , I will read that·_- stuff between nine
and ten .tomorrow mQrntng.
,
{
\
'.
'
.
:132
30 -
MR. BELL: O.K • . \ Then I h~ve got this fifty
Bonds, statistics on them.
~housand
Seri~s G
H.ll. JE_: Will you· come ·in at. nin·e:...{ifteen tomorrow
morning, and we won't , e~pect these other· gentlemen until
ten.
·
·
MR. -BELL:
All right.
.
..........
H.M. Jr; .And you and I wil;L work fortyrfive .minutes (
on the other thing.
'
~
MR. BELL:. This is just information that y'{)u wanted
to have, that is all.
H.M•.JR:
How is nine- fiftee·n \
MR. BELL·:
H.M.JR:
Fine.
Qeorge, are we movine too fast for you?
No, I think it is all right.
MR. HAAS:
H.M. ~R :
' .
What do you think?
MR . HAAS:
It is ali right ..
H.M.JR :· Think about the money market end of it.
MR. HAAS: · WelJ,. , it gets difficult. It is on~. of
those problems , but I think there are solutions for it .
I agree ytlth pan we have got so many problems, le t ' ~ n?.tma:.ke anoth.e r . one, but it is one of those problems I th1nk
you can solve! ·
.
.
H. M.JR: Sure you ~an s.olve it.
lots worse ones ' than _this .
J
MR.
HAAS:
Dan has solved
He ·will' ~~lve that one, too, as far as that
goes .
H. M.JR: The wor.se thing that can. happen to us is
that we .get · cash instead of ten percent down •
...
I .
..
J
: t3.3
31 MR. BELL:
· the pr·oblem. ·
H. M. JR:
i~
No,
will be cash.
T'en per cent i.sn' t
.
.
gett~ng
But I say we will be
cash.
MR. BELL : It is ' the . full cash ·for a · billion- doll ar
issue on the day you offer· it.
I
H. M. JR:
one . ~her--
Now,
I
MR. BELL:
(
That you don 't want.
H. M. JR : .Don ' t forget we want to decide on the· .allot- . .
ments too , and I think we ought to put that in the letter.
I think that is most impo.rtant', up to fifty thousa·nd· or a
hundre~ thousand sub.scriptions will be allotte.d in full.
.
~
·. MR. BELL : Well , that_ ~s the thing that I wanted to
. discuss with you.
· ·
.
'
MR. BRYCEf Will be allotted in ~ull?
H. M. JR: 'Yes, that ·is the important thing . ·
.'
llR. BRYCE :
flood
'
I
I just wondered what if you got a big
of .orders.
H: M. JR :- We will take them all.
.
.
MR. ·BUfFINGTON:
.
We ha.ve go t plenty to sell.
.
.
MR. BELL: We had better make this a three-billiondoilar is sue then. .
·
..
. MR . BUFFINGTON :
. MR. BRYCE :
there. .
We will take· them all.
Yes, I get it.
I was a little slow
.·
H. M.JR: But. the point is, ff a fellow ~ows ~bat
up to fifty· or a hundre d ·thousand .dollars he 1s go1ng
to get full . ailo tmeri.~ , I think he wil~ be more interested .
1
MR. BRYCE : )es, -h~ wi.ll ·get what· he is after .
•.
)
':134
- 32 .-
MR.
BELL:
-
We have
:never said that. · . ·
~
You shpulan't s~nd me
H. M. JR: I knpw we haven't.
·out to the· desert .
·
\
MR. BELL:
It is ' t'errible .
MRS. KLOTZ :
He should- ~o with you, I think.
MR. BELL: We hav~_s aid "preferred ai19tment," but
we· have never · said ''allotment in full." ,
·
,
H.M • .J'R. :
MR . HAAS:
Well, you· should~ 1 t sen~ me out'.
That is the height of preferred .
\
'·
.·
\.
}
.
.
'
)
"135
,........,
.........
'
o.er p J&f ftM...
/
a, 1 1a\e ft'le w&
1a ....~••• wl \b ,...,. l"'le ••1e a.ae
ne luk e 1a .
Nl
reto
U..
a\
u
.
.
\
ooap ur ott1 o1al a lat
'
.the tollo w1a l o1U eol
.........
I
..... .. , . •••• Mlw •e•t. •
hU .l,, NlU J.pa
Olof tlaD A, Ob1o
(
waa
\OA Mr. Al»tlo\ Mlll• ..OOa paaie 4 M \o Soi \o
t
Lo.U
'·
wen\
pr utn \ at. \he lA$ei"Y1ewt lbef t.. He ·Shea
•
t1A4
~
aa&e
••
r
orde
1A
loaa
..
~
a lone \o o on4~ o\ t1a1la~ 41ao
.
pslf
1ns• 1A all fOQP 41t\ riot a a•a1 laol e \o ~o~ p•oa
11 bel q pr.ep anct ·a «e~a11~- aooo ut. or , \he
a\ ooopuO& oorpvn•
t11l41n8'• 1A •••h of .no toW ' 11\lt a. Wl\htn
la w1\b ~· p..!be~
.
\ion ottlo lal a are rea4 J aDd
gru ~o ti.AU OI ~e war.
lD sa47. 1Aat aaoe a
aaal•~•
\he
t.o ooopera
1D4~• ~r1al
~
ooap aa1t a b0l41AK
1 aA4 1\ 1 1 upeo t.e4
14lt oath bt.l&Gola haYI l.ara a war oon trao\work 1DS oap1 \al. ·o.aator
1r~
req"
t..
a ~&oh of \htte tG84 a w1U
t1AaDola l lnt'1'~11oaa,
tral lJ, 1ntu raae e ooap aa1t t aA4 o lntr'Y11
wed, ...,aN IU ~.P
ol.htr t h&B gaftka Wbleb ..... AO\ 1A\Il
L1te ~.~.. · ..-p aalt a
.
•tA\
\
a
e
1AY
tor
a
111u •• ae •~1 \a l•. a.ti
n
aura aleo t.o pol1 orbo l4er a ~\ t.he
• r• n r1nns to ean \be
1•1•
!lol4
1A
a10A
expu
tor
oe
ts>pa'ar a \o be rooa f.# aoa\ por, tol1
·
ot OoYeroaar&\ ato"" 1&1 ea.
•ve4 1n Boa \GA ·
V.t. \h OAe eSGt p\lO A, U\e paop lt 1A\ar~
dl'11 te4 ~ ellt iU\ t
u pr tflt4 . ~t bopo IU' IOriO ~He 00~ DeGo•a raatA \ 1aeu a •
tor
\ be neae u1\t ot pa4d la& a\&Oaorip Uoa • a ppro
•• •••ee a1Y I a~,alaaar1p.
'o
d
aalt
AI
bel
are
t
\\ea
.t.
oou
i"'1Raooe
n~1ae \bet a
all
!her
.
H ool \.o at•~• ft4-a lre4 · aUo \. .a••·
·
3•
ooarJ 1\lltn \e . ., beM •e laaaa:r4ot&a.
l&t'M &AU• .....
Tn• u.- bll t 1A4 u\•1 1D flt UOl \ hat
f...S • ·
of
~
ro
aDtlo
\o
lt
lU.e
r
ppea
a
· b\lt. 4tt tnte
1D
,
.
..
a
1&Ye
'
.UU
1, lHI . A laN ha,1 &1 pars ot
eoauae••
.U••
af\tl ' J'l.l7
d l"'la ri ,._. .. ot
prooe u 11 troa ea. t1ae ooa pule a 1Aia n1aw
Aaea 1 11ab 1U' ' • naa l
Atv oara la 4tal en• baD4 a •• a ooa\1
a1w auo a aow e•er. AI aa
he
\
,
...
uU
Uq" aau a ot ... ••••
. "
..
r;
\
)
-··
136 ·
-·
.. ...
.,,..,, . . . . 1a • 181 ., ...... ,... . . ...... .. ....
ti'M .... .... ...., . .. . . . ..... .....
-·
... baft .... ·~,. . . . . . I'Me l•lal ..,., ., ia
"'"
....,..
·
·
·
.
a.
..
tor ...,,., ,
.
_
...-w .... \llll....
1a ~..bll& ·~·~
ftal
.
.....
....
,
.
.
,
.
.
.
.
~
~·1
e
uue
.
.
.
0
...
caD 1ll,. , et
••1ft4
·••••'Ill•
u• u.
, ot a- .... __....,.
ukr rt•- ' u ·• .r ...-..- ..-. a ._.,la
,...
1M ta\M N.
1-.aa
ND.l.
s.u; , , pntdl or trl.U ....u.
~
w.Ul.
'11'
411\1
oaio
enl ot •• abel •• Jpeai ea u U.
!441U ooa.l ltlaa t ft~NAM ._..1 '7 Ut.U ,..,.
'·
-.
-
\
/
on: &'10
)
\
ua IIJ U! IPJ
~
or 1JM.1 IU •lll l• ruw
Boa\OA W.U ral
tollow1A& "op le . . ./ 1a& en1 ew4 ' ' UM
Rtst l"ft 8aAk
OA f.ae~ 1. ·~
2.
~
Jpbp
BM MM
24, li.2 1
I d y l 1ilt t .Iae vug e Qt• -.pr
''~"· sk u
Xr . ti\o hel l
.
...
6.
,,,,..,".e
.
lA..., . , .• .,. .,
\ee
rv.a
!
le7,
Bow
llr. ~•• ~.
Cya o11 4'1: : Iat••"" P' ma t
er uor 7, ' "" '''
Mr.
6•
.
l.
.,.
l11
•t.t ed tba '
'• Jtr. 8a1 \ll
lilgl •pQ I Mtu el J4f t I pee rep tl Cloi QM
1A :Qo .,.,. ..a,
.
th17 baf t 1Af tt\e 4 app rox lu'l tl7 20'
.
.
.
b&Yt f'• reae ed e011ewba\ \be ll'
ltOI.U"1 U ea . . l ll reo ea\ aoll \ha thl7
\ ~ I Yir& ll rate· of
hol 41nge in v.\11~\J -.a4 a 1a o~er \o 11t
re,loll'tl.
• arnl aC ·
ah~ 3 ....~J
'fo cla\ t \h!F haY ! ~ID ~bl• \0 u1
luaf tA\1 1 5o pol1 1JA ol41 H •
lfh1t h hat IAaD ltMl b a \0 OOf tl" ~ ~-
.....
_)
,.
('
.·
)
.
'
- ·a-
.
~. , ~-
:138
.
poea llale
wUh lowe r 1At ere• • •••• •• ~• baa oalJ' .._
1a- -••t& U'i ' ·Nee rYe • IIi'. ·IUU l .
,b70Uih u.& ater of
e.u•••••
ta14
\be' ~ben
baa
~. . ••
.pp...laltl e laef ta••
l ·a
~·· oa
of . U•J.Aa 11&7 · .
al$bo.acJa a. eOD UAa e4 ..iae ftao e la UM. ..,,
.
N. R• t\a\e el ~'
rua U 111 a · A11 Ur ra\e of loe. u ·1a \he fa\t&
5\a' 1• Uoa 1D4 '-oa\ e
'i~t1 ooapaA1e t .,.. n4M la& fUl l IIOI "'Ca p•.
lt ao1 q 1a~ GoYe n'ia~ a eul) et.aa Ual pan of \hl~N4ae\1u
pol1o1~•
•
I
aea~ eeo~1t.1oa •
• , ra t
1D
1n ~ht
1Dw reot.e4
Ua t1naao.1Ag Pro P-a. bgS 1e a.o' par\ 1o.U arlJ
r ase be1Ai belo w .\U
long t.ap 1oau e1 oa aoo ou• ot
'.h•
lue l ot t.he1 r
2.
·IUJ"aal~•••
\o
poUopold•~·
IV·
Jo)m l•l tH l a,y l Lite h•V MU Qe~
OOIIP I.D7 hat
eeoll1'1Uta .
appr oz1 tut.e lJ 14~
O'f
!bit
1ta hol41A&t 111 Gof traa ea'
The7 D811eYe a lOA& \ ap 1aau
wou l4 · oa a t.$N 0,1f t
it.t.e e woul d be 1DS eret t.e4
and Mr. 9\ aok \hoq bt. h1a exeo ut.1Y e oon
Appa ren' l-6
&JDOWlt.t .
in p~rohaa1Ag ·~ AD 1aaue 1n auoa , ant.1 al
\he l aws
ot
11~1 a\& \ee pJ"oY14e · t.ba\ all asse t.•
••1•
ot 1newo&rlo a
.
at \he ·d1a ore t.1ol1 ot- \be
are a~l)Jee\ .\o 1sae 41a \e .
a
ooapanie
~
or1t._1ea woa14 r.aa ri.
Board. ot D1reo •ora . Jut . bow \he at.a t.e &\l~
111 Ula prop oae4 \ap
\ht neoe uarT re4 np UOA not.1 oe proY 1ded
1t. w1 ll be ~roa417
1eauea. he doea no\ 'uow Dut. he O.l1 e'N•
ll' pw-obaa1 AI ·u.p 1aeu ea •
in terp ret.a4 an4 aot. 1Jiw Jtter e w1 t.b. t.Jie
3.
ll, S, Spt1 $'D' e Ret tpt y
•r! K1A ipg Cgp epr.
Mr. K~er
l a apeA41AC liON \bal l
1\~\tl ~hat at. t.be prea ea\ \1. .· \u eoap aDJ
aa4 4eYelo~Dt. work .
thei r &n.n\l&l depr ee1a t10A 1P exp lora \on
~·1 ~Ye appz roa1 aa\e l7
,000 ,000 ot Ule t\IDd a. - lA add1 i1on ,
.
""
,.
'\
. )
.....
·.
,. '
....'
)
-.-
1.39
...••, ••
ooo.
. , , . , a tif t s.u... ... ,.. . •t t1,ooo, .
iale
~~.. ot ..llib • . · . •• aa aalU
4oi• aot r~pli'l tt1Ua . . wl~ aft _. ~o 111q.
tor thel l' ue4 •, ~ Ml- 1•• •• ..._. •IIP M7
)
,.._ 1 oas •pla 'eA
••
t1Y e-J' ear
up
D. ., . fn. ll Ssnsrx ~
lai lu.• .
/ ... CeoUta•
bel 1ef tl all. evp era - ..
ea\ lD lt1~1• aa1 ee" -lt lah •
\loa • ~rtq eue ae eaa b abo lll4 lAY
e- ,
. b1q \he t1Y
M7 WU l· De ~~- \o
of 1JI4 e-\e da•• •· *ll e bla ••P........_
a.wJIIUieA' • E-.
aa .ett o•• $0 ooo pen w v1 ~ \b~
ta
d•
11s
tap
,u
1
·\b1 1 \Jp e ot 100"'-1"1'7. 11 a
- ht ·be l1e nt \ha \ \be la• uao • ot
be 1&1'1• l"M. .p,1 oa• a\ a
sa1iU k1 b1o aue he \blD k• \he re MJ
t1A &D e1q ~ a\ pre nat .
Uae leta ta~orable tor GoYeJ'IIlMJn
\
Ll'D \e4l J baf t
the OoUecl fN l \ C•p aaJ wll l wdo
an
lAO n&I H
'·
-
~heir lh1pb\l1141DC PNI J'& I'.
~
Be 'Deli•~•• also.. 1 t . S:a a a1.1 \ak1
•r•
aD4 •G• bOD4a 1Du aLle h
1aoreas1 \hi aruuaal pU' Oha •• 11a 15 ot
i"WMD\ ot 1ar tna b\lt J'&\.tler
•• he d011 not rep. J"d \he a a• aa 1aat
~ollov
r ecl •pU onl U7
Go~enaea5 5o ntt naa ae.
~aYJ
as ao iAYet~Dt ·aa4 bel 1ef tl ~'
.
at an 1noppon \&ae Uae
ltm .
t•• \be
Bot h K11 an . Row ler &Dd
ao rr exp reea ed \he op1D1o.o
tha t
.Dt • 1 otte rtng a t't Te- jeu tap
~here 11 eo• • ba&U"Cl 1n the Gove ...
ha\l e ~ 1D41~14ull.
Uo nt
lt tale • aft rea \rto Ucl to oo.r pora
lt.•a4 5o a aoh l1q~a51oa 1ll
hov ner . the r clo no\ be.U e•• .15 w111
lef t UUt re w1l l be 115 \le ta~ht gen enl ur ui . .~, ala o O.l
•7• aM •a• ~1141 'bJ tru1 \1
lrta ae 1o t h e wl .._ 0 r · pt& nba lel of
•aah u \be. 7 tee l \b.a
t he lUa tt 1a. ral• e4 ·~!'· too,ooo 1DA
1t·
\
/.
).
\
)
-·-
. 1.4.0
..' tu b. ·
11a 1., la ..,. .... ._ tu _ , V
.
.
.
.
tN le. !M -.IIIW...UM baa
trp
Cl
r
P"'
MJ
·I••
.
.
.
.
e. Ua15
'
flae 7
pl~ ~~ •• ~· PH ••• s1 ...
n;r
oo
o,o
,oo
tl&
7
app ro.x 1U tel:
u11 nu: :' \&~• tor ua.U.
eul 14 er t1Y e"'""J•& r "\Q 1a •u· •"· b1U e
l. . . U.. a••_. ._ , 87 PQ Nb a.e laC
w1U
tM
pef
eoo
~
l
ala
.
be
o
al•
laa •-. .b •• \b.e7 b& ft AO.
otr Ut 1o a\e a ot 1114ebte4Aeaa.
pn~tat
)
u....
a
u4
I
1D 4tt1 Ait e aDd \lle 7
w~
\l:l ere ton lU e \o
&Y01d~
r
l t poa a1b la,
-.
of llh ort -\e ra aeo~1\1ea. · "'
\ ht oontin'-led rei nY ea\ Mi ll
pre aen t t1. . \be 7 are
D~iD&
a
!ax _S&T1aaa Do\e e a&a 1A a\ \nl
\
'1.
+oa .
Dn1 \eA -Ca rr ha \en er Oo rpo ras
tba \ \he r are bol41ng as $1\e
preae~\
·M.r .
11~0.11
a\a \e4
\1•ae l,ooo. ooo Taz
nD &•
~
rea ee 1nv ent orJ •~ba taa\1&117
I\ hae oeera neo eae arr so 1no
a-u pla a
11k el1hoo 4 of ~e1r ba.Y1A8 aDJ
\le
llt
vaa
·
re
the
d
sai
he
and
No \ea . lie De- .
aboYe p .aN haa e ot Tax S& Y1 qa
Rotu .
flAM·• tor 11l Yea \MA \
a oeo l"'t ena a& e4 ln det ene e wor~ are
l1tYes \ha t IUA7 oo..ap&Aiea no
at• • ~ tee lt
IIeD \ ot b1 pe r lab or r
1og 14l e t~a \bro\al~ tlle paJ
a
ino rea ae the pw -oh aae ot Ser le
the re aho \lld be ·ao ett or \ t o
1no rea aec l ear n1A ga.
bonds by elllploJ ••• o"\ of
··£·
- ....... - - -
e4
h whoa l \al ked 1D Bo a\o a aak
With one exo ep\ 10A , Sho ae wl\
ell a1A a\e
so \ak e M7 tu. l"a .Jt 1\e pa \o
1t \he Goftl"IUa~D\ pla aae 4
el'llllen\
lar &e _av. bao rlp Uo aa· tor GoY
~he neo •ee 1tJ of 1>' &\U q 1a
exp rea ae4
all o\a ea\ a. SeT era l peo ple
••o~1t1ea \o •••~ dea lre 4
ab o"'
Ye .-1 ,\e ea . . . . a.a 1$& Jl\
· \be op1D1on .'h at ~ir uee a\1
\
\
---
)
-·-
141 .
••.....n-.uc., ......_., a ... .. ., ..._ ,,. .,
- _,_- -- -
1q 1A'f ii\. .A'•
OD t~wre4y, .... _
ze,
~~~
.-.
to~_. _..,._.,·ioa
l Bea e"e - _ of
ott1 t1al a • " 111 '-"t. e.... a' )be ' "•N
~ebol\& '
l.
(
2• .
RtJ n1J Y& W pee eer
er
Kr. Ara U' D• . 8pe Me r, fre aavai
ia\a
llaa
,
\uo
Mr. Pqa oa a•. roe
!rea aur e• aD4 fraD tfer A&e n\
~.
\.
S9t 'Mt =R 1lly ~
••
Mr. V&l\ er s .
:\\o n, Prea l4en \
Mr. Wllltam· M. Dillo n, Vlee Prea i4en \
.,.. i . J,. IW'f OA GU M''
.... 1fil liaa .A. Pe\ aold , Traa awo er
l.
6.
hr4 HoS ft g.p ear a, Cbl et Gene ral AY4 1wr
Mr. L. i . Brig
8.
§ tep4 •r4 Msr l4pJ , l.at Kp tt ·Cta ptpr
Mr. L. l . l ll".k , t rea a1.11' 1r
laa h-l tln yM r
OOapaDJ 18
DOW 0~7t1ag
cqn on'A AA·
Mr. Egan • ••~14 "'- ' the
a l"el ll"'f l tdt \ 0( $10 1 000 ,000 , hal f
a -\&& .1"1 \J
.J"i\ 1ea w1\b
)
vhlob 11 1n'f eat. a 1a lloYO l"D. .D' •*oa
Of
ot
1a a Yef t&l •'"" 1\i et
f ear . or lea• allll ~ bal ooe il 1AYea \e4
1,100, \Ae7 baY • ~le uah 1a
· ot appr oz1 a\e lJ (in rea re. 111 1144
It 1\ wn poa albl e \o
\ht b.aa1 neaa ot .,pn s11 1a,o 1r te,ooo·, OOO..
OAt
Mr ~ ~&u a M\1 4 \ba \
P.,. .D\ . oa O.Y eNa ta\ ooa \no '••
, •eo eltn \e
('
\
\
·.
-. -·
(, .
. , ...a·..._ u.. ~··· Wlk1lll
:142
..,,~ ,.a ·u... .-
.., . ., ... • ..
Ia ••• •' -.u
.
,._. Ub~Ul111
u 1,.aae $lieU laftA~ t l81 oOo,OOO MIA au . 11
uoaal ,....,.. .
t•• laft e._ .,.
)
~
;
u .. ..87 ..,.11 0-·
-''~pre···'
\~\ t.utS M• lUN UII llq . . . . . . . .. . . , .
ta,ooo,ooo et tbe'~ 1Af ta\e l7 Npreaease&
/
·oan 1• tN••· la 1140 u.. MIIP ••7' •
prox 1Uh !T
dor• a4 t1A18he4
1alU Wft l ti,OOO,OOO.
.
aa4 Uw1 ~11••• Cb.le .,• . ,
ooo,o
. oo ot
'*•llle•• J.a
.
-
Laa ' JeaP
~--~ illeN &II4 &e t lii,OOO,OOO•,
u..., _.....,.
rn.
.
tare,~,ooo ~
a. . .PM7
~,,.,,..
IN• •·
b1lU 7 ot 1AYea\1AC a441 ,1oa al t\aa4e 1D
.
400, - 1
aeea U5U e peaa 1-
t.
Geft.fta~Ma\ •~1,1ee
a5
· ·
••a n,
nw U.l4 ·a Ull1zo rea. ern
ot 1D4e~5e4ae aa • .
\bt7 will UA4o•D\e4 1J ~ b1ll a aD4 oerl lt1oa,ee
'·
azar 11_hol4~aa
2. Bvn ••)t • Mf' M "'lit '-• • 9«u M'• !he ooap
00 ..1D Go'fi.....D5 IIIU 1Ue l
S.~OOO ,~ 1a !U Sa'f1D&1 Ko'e a, 16,0 00,0
an ad41Uof:l&l, ,000 ,000
with an tftn &e . .,111"1\J ot tov 1•ar • , aD4
t h.i l Uu ~"' •• eHY P1 Uea
r.q_~ln allIt aow appe&J"a -\ ba5 CHf traat n\ .oa5 raot e v1ll
the eo:ap aAJ wlll lMa7
41 Uoa al wor kiq qp1 \al. Ia ' be aeu •1ae
1a oaah .
r regU lar pure bale
otr,1 t1oa\ea ot 1D4eb•e4D••• 1a al41 ,1oo to thei
of 'tax Sart qe • ••• •··
3. Rt5n 1,5 f41 a• a'IR M'•
oot\ t
w1ll aate 1'
1apoaa1~le
laen aee4 labo r aD4 aate r1al
tor \ he eompaA1 to 1DYee$
1a GoYer&-
pl a ' ex!her baYe 1D ~ teap la~1oll' 5h1 a J•ar
.
h ¥111 &Deor.O t.be1r .....
hDt1 0Da ot appi 'Ox1 M,e1 J 11,0 00,0 00 Wlblo
00,~
to• 4epn e1a, 1oa ~- . . ..1.. appr oxl -'el J ,1,0
aeo\ eeeu1 51e a..
Ure r~" "•
tile ...., ...., 11 ean7 1A& t l,IOO,OOO 1oq -,ll •
\0 4o •oa•
t¥114. !MJ will
~1.
1441Uoaa1 eaab .
G_oni"DIIIau 1a
· f1~o1aa \ble . ,.~;
ba••
•••ul"
,.
r
'\
·,
'
.. .
..)
T
\
.
)
_,.;
6.
lft1 Me =l'l 1e I
ey,.
oa ••_ . , o f ., la
~.... .
eD4 tht iaab 1111 J ~· s . . . . .
1 taaU al 4ttl~
1a
•U. s.
1.4 3
fM
p-~J• e~ao~.
u...s....
~~
Ns. net 1ou ,
s
uaa ... ..,. ··· ·"-
a s ....
~ ll1ll e alii
an· bol4 t-c
ar1J 1•s. !be~..,.
a11o bal'IAI o\b. er ebo r$-t eN· fJo• •....•• ...
Jtar. &114 na1 s ·~o
iaaJ aoo .-la 1e • OM Ule Hab la lor 1a 1lie
.
ael • P~·
fl•a
1be
l
tr1U
ooop erale
(
fht l. L. 'riM A gaM er.
6.
.
!M sale s YOl ..-e eo· tu 1A1 t
1
30• o'f'o r 19"1 , repr eeen lel
7ear eho n ali lllo nue ot appi oozi aate l7
are ~J1.q fu SaTl JICt I~ lee
larg elr })J high er prto es. fbe7
.
. '
8441 lion art tan71A&
aga1 al1 tt11 aa1e 4 Ju req ur..ea\a &D4 1A
\
\ht ooap aa,
lOD g:-Je N CloYei'DM-_1. aeou r11i ee. Whi le
$ ~,000,000
ot
aeea l111 le 11ke l1bo od
ot &n7 '1Ro rtate
.in ~lt twad s, \he7 llkt
~
the t1Tt -Jtal " lap 1stt&O &.114
&l't
anxi ous
Govel"'llleD.t in ita· t1AA no1n g PJ'OCI"U•
desi rabl e to
~itt ~•
·rant
6.
11a1 1 on
MO\Or CM RIP '·
•p•
~ o oopera~e
vi-\11
~
Ml". ~etzo.lA oon d.dt rt 11
&Dd *G 1 bond s.
The ooap anJ' e oa ah }las dtol1 Aecl
ot lae~ JO&r . · Il
tro• $1~,000,000 Jo $100~000,000 e1no e JulJ
sl oorp orat e f .Q.Dde
hu been a pol1 o7 o~ Jhe ooap aB.J not Jo inTe
'' a i nTen 1ol'7 aaou~a
nen 1n eho rl-J eN aeou r111 ts. !he · ooap&DJ
Brig gs ea1111&tea apto approx111&1elJ t lo.o ,ooo ,ooo of 111b1oll Jlr.
"
.
esen led b7 eea1 -t1n 1sbt 4 plea e.uo t
repr
1•
,000
000
$76,
prox1~~atelr
~ d\ll'&1.1.on. 'Whi le ..._
oar PUl a, aoa t· ot 1dli ab 1e ~~til tor
.4 JMe lr ~
nace a ·aaa1Aet Clcn 'e... .aJ eou rieJ e ·baT t oue
l111 lt oppor,~117 ot
capi tal poa1 ,1oa 80...- at, Kr. Bt1g ge seta
bart Da tud e aT& UaW .e tor 1nY et\a en,.
-< .
;
a .t.&J ~ aa the
,~
OOO
P&J rolla an Pu.Dot•c .at · Uut ra~e ot ··tl,
. \he Pol"d Kola r. Coap&JI7' 8
r
'
\
'
_)
-.-.
teli M of Ge nrt a •'
petU lOA
)
·14 4
-.la eee U. .ue e, ~•· -.
u:i. 4M l1M
.
.U li'
eau·
, . . . .•• .
s.~
u7 bae
Rtu~.. .a.~
ta,Ooc>,ooo 1a . . . aa4 -.,ooo,ooo 1a. ca....,..., . ..
••,ooo,ooc;. ·!ba ••••ar baa
1aYea\OJT . . . . .._ So ap.,...UU\e~
)
'· &· ··Il l IIW A•nsy~ : a. •• ...
'
.
.
\elT
laa
l
appr o:
' /
ta,ooo,ooo
\le4 liP 1a .... . 1a
4eal:erallau4a *I. e
.eoa tla~on fl.i ure a K\ MJt. f erP J'
\hiJ clo DO\ 1ao lulo 1a Cbe 1r laf
.
...._
.
r
~· ~-'
·
for
\J
U1
lla"
t14e ra the. OOIIp&GJ ~· a
ear a ..,.. MYe ct oa s
D aaa 1t
••U.S•'
'he••
u.aU l ~ne ear a aft aol 4 • .. lfbe
~~ 1f1 ll be 1a a poa 1\1 0D
ot cit al er e' baD41 , !lr. POP rJ l&a\ecl \ha \
Of \he ·-8 ,000 1 000 1Jl abo l't-\ eN
~0 1DYU \ a IU. ba'- A\i al pan
•
A\ She pre aeD \ U a e
Aut .
ot
·
&i,ooo ,ooo
~ a1h
poa1 \1on
per
wu .
~\11 ~•1
\he~
'
' .
paJ Nll . 11 I'WUUAg a\ . tAe .ras e
1r
He 4oe a 110\ f eel \beT O&A 1"'14~• .ne
OD
41a po ta of \ he ooa \1ng en\ 11a b11 1\J
oar • 1n dea l era> baAAe •
. 8.-
on hud
. the Ooa paA J laae
Ste w..l£4 Me j4e p\ Iae tjry st Cn pyr
ea\ _boA4e
jOOO 1a . .all, t lo,ooo,ooo of GoTe l'lla
i ,e&o
600 1 000 Of 00 YII' JlHDl
·u t ll1'1Dg ODI Jo f1T e p ara . aa4 $V 1
11&\uria& t1 Ye \o tit \e ea
,•,ooo,ooo
aa\\&1"1Jal
\ ht7 ~an proper.~
reu a .
4~
.a.q a
HOII&Pi~e a
! he OOIIPAAJ' wi ll baTe appl-ox iaa \.e ll
••
\N oY~"reas T•a r aD4 Mr. 1 1~ ~l 1••
ar sap
a\uaU~ aao u\ of \he fiYe--7a
•ab
h tQtt • ..
On
rru 17.,
\10 D off. la1 ale
JliN I& f!1, ·~e toU ovl al ..i-p on.
were ·u \ an1ewect
a•
al& Dil
'-he- Pe4 era l lle aarY e leak of CloY
\'
\
)
:.
-
1.
2.
)
··-
. 145
....
..
.....
a·s. 1L. . -...
f lf•J
llll lf(l:.
~...
au•.;,
. i •.......... s.a".. n..
...'EC
\
tftoU .MI Ml Dl...' - ·..
:
••
6.
(
,.
'·
la51 oy1
l.
.....
Plu'lt•a
"· !:'h•r •M
*Jl. ••»•
tn4
OM "''
\
Clte ttgp Qo.
S \~•1
1M . _ , . . ,
TUi ~" h0l41 Aa N.aA o-r
owa $1,00 0,000 !u 8aY1 Jl&a. lo5ea .
t l,260 ,000. llr. P~nJ' o\a'- 4
\b&' ~ eoaPa.aT. a.eecla ~ alA~
l laa5 ,...,
oaah ot 4~,'1&0 , 000 tt~J- t.bal r aoi. al operaU~t . · S&l.t
:so,ooo,ooo aA4 5h1a ,ear will. na ol.oao So ..o,ooo,ooo.
aaaoantecl k
b7 Sop5 eaD! r
h appia n \he 0011p a117 11411 be bol'ro w1ac troa Duke
\ tUa rear.
2.
WVP •r IR" · he•• r I""P J•
!b1e eo.Pa a:r nona l.l7 ..4oea
ot ·
annUl. Yolwae of .:approx1aa~lJ t•,ooo,ooo w1\h an 1AYM 5oi'J
A.He ea15 a'laa
t l,OOO,OOO. Salo a \hie TH7 w1ll rwa SIO, OOO,OOO
~
I
u 1nore a•• 1a 1Aft ll\o1 7 '.0
ta,ooo,ooo.
llr. a.lui a ·• ••• U5U e
<." "'
,
1a 0.YU 8Mil 5
OOU1b 1l1\J ot ~ Mill! MG." J.Afta~UC ~ . 1
•
l o\ea .
AI•
S.Yl
fax
ba•••
pwro
ar
..pl.
'
\bell
ezee p'
_ltlllP 1
n..
ot
••
,. ~t ~
!he7 are D\a;r1aa fu sanA ,• leMa e¥ne a,l7 •' ~· ..
ru., Jl., ot 12,0 00,0 00.
h ,OOO,OOO --~ .oa aa ~~~1-\e4 '&X tor _
_)
I
.-1-
·18 -
1. JU ffM '
IJt.la ••1111•7 ..,~a... : te eala a
?"•
0
0
0
t•
°
._. ·a. . · · ' \11. p.....,
Ua~H, ·app.i'Ul aa. .\l7 ' 100~
l9t2 vlll
.
u .. ~.,are o.s..i '-h l •t t l'.\,ooo,ooo.
)
a
Ia• M\e itla l ·. . ., .
0
•
0
, ,.... • 1ew .1.
1a ••• · ua~••• are .. •• ~ aa ~ • .., .1U
•a npl aM . . .\&1ja
~1• .u a.iap aar .ay . ., • ula 1a \M ta._ ..
·raw
ae\a rlal. a *la k
~ lap e.._
r.., &lla ·l'u
&u \, a.N~7 1a-
llkel~ at ~......
ona t1q . . .,.., Ulo lr •••h , ~~ ••• ..
twada tor tn•••·--••.
•· !0'!•• lt'H
A\ \ha
1n 19,0 .
lara•
A
banke .
4va Uon ot \ba war.
reqa lred \o P&1
1Df0 10tl
\0
\hO
!U aoap aar a~o\a tb&l i \be1 r
Cen nspr .
pr•••• '1aa ,
par \
are
~J!OWlq
2,00 0 , 000
troa
tor ua.
1a
Ua4 ar pra to\ .arn qoa •qta , \he aoap aar
oa\a~a
...it
~-,
~11" prea elit 14Y aa\O rJ 1a tro& tn
ot
(
YaD4ora aDd
f.a.Dda
ho-l4 1Ai
·to.re ~h!7 reoo 1Yt p.,.. .nt. .
Ultil ' WOJ'k lQc oap1 Ul.
aA4 a~ba1\ _ reaa1 p\e4
• ~p~l1era
a4Ya AOe 4
b7
\bt CloYO....tA\ Cta-
''laC "'P
\hei r •r:e41' aa\1 Ut•
tb11 prao \1oe .neo oaa1 \a\ea
'l'ha eoap aa7 D.U ona
p.,. .a\ whio h wo~ re4·waa
~hea \o dl"av 4eVD t'all4 t 111. d•u oe of
~ht DOW l\ Of
fioa '\ ftqU rK
)0
alta r 0\1\ aidt
liV• ht! Sla• Ry> gM ppy .
o.
p l.li'O ha Stl •
ft.a ooapuJ i a no\ uaa& •4
ly aa~oriala ~ aaa7
d1re o\l7 1A 4ote nao ..rk allbo~ ~•1 •~pp
A'C the prH tA\ \1M
cupa n1ea \fb1oh haw GeY an.a \ aOD \n.ot .a .
4M llaa ill 1aft A\o i'J MA·
\he OOaPIJll •••• 11, \lo · poaa 1at1 Ul7 of a
ti'M $h air MAk • lt!ttO N \be • D4
b•U •••• t.nar .v111 lHt
J.A \anu a.
a\ . .
\he rear ; ,..., an ""J' lac tu .sa•&aa• l o\of
0
0
•
-.rrowlq
.
ot
,w.ar
\
\
,
)
14 7
- 11 -
,
a.
Jtp •,) lt 1\n l.
llae 11... nst 1a ~
ealh pol 1'1o a· •• .. .) PN ••• ' tiM .
IM J aa.
t&,IOO,Ooo
.be
1,000,~.-. l \
e& tu of
fu sart.&~ lo$ ea ap laa ' aa ea' uu\
e •• • la pla a' . 1.P NY. . . .\a aa4
bal MeA ntO tll. ., M apea4 las
ft·
1H .na ae4 O:qMM1~tl 111 ~'"'li
. \bt 1011~1 lOK I for wu & . .
4 of ao~-l.a\ia• ADJ 141~
~lt \he ••P IA7 ... . •• l.U e11 Mo
•
•
•
0
•
I
. ., t... a. aY& 1l.a ne tor '-he
ouh , tht7 vod A be 1Ae11aeA \o ~·
.
I
.
t.
\le
o1
•••u
owa
1r
tb.e
ot
lt
oha
plll'
•
·7.
P1e lr•e i•. !t5 be '
iP' 9n •ar .
Kr. SAerwJ.A
,._,14 \hat.
·14.11 ll& b &ft 1la Plt
baa DIT
\ht P1o k&D 41, Ka\ ber ~
- IJ". ba4
.
\be 1r. .i.ab\a14.1ar1ta ,· lll\ erl akt
1n the pana\ ooa paa J ~• oae ot
oe tUAd ot 2,0 00, 000 aa4
S\ea 2ab ip Ooapaar, oar .r1e t an 1ae ar.rold .U. ,tl7
pre aen ' Us e, 14l t t~a ot app
1n aA4U1on n.a•,
blt t\&Dda baY t ner e•o tor e ·Me a
oo,ooo. Hoa • ot ~1r aft 1la
''· \he
~
t~,o
a \en •o \We lTe 7ea ra." Be
1ne eh4 1n· tloT enu aen •• rLLDAI.A& .tro
t tor
1D4 el)\ 14.n eta wo\ ll4 be a\\r ao\ 1T
.btUtT~ t oer \1t1 oa\ et ot
eO. pan 7 wil l ala o oon a14 tr \be
\ht1 r purp oae ~. bel 1eT ea ~
oui'Ohaet ot \be t1Y I-J tar 'ap
.
/
f
•
111~1.
.·
('
\
)
f
(
.•
.}
14 8
' TR EA SU RY DE PA R-T ME NT.
INT ER OFF ICE COM MUN ICA nON
ent hau
fO
Subject:
'
cur ren t bU7ing and sav ing
Obta - 1ng int ora ati on ·on inoo
11e gro ups .
med1wa and low
inf orm ati on 6n the pre sen t
In res pon se to you r reque·s~ tor
·
a and low
ot _co nsu aer s in the mediu
·
buying and sav ing hab 1t8
'
.
t o rep ort
income group a, I hav e the fol loW ing
ila ble to show act uai our~
No int ora ati on is as yet ava
ups ,
ilie s ot dif fer ent inc omeg gro
ren ' exp end itur es -by famine
ect ed
sel
a
erin
d by ~ s~ey cov
the
wbioh can onl y be det erm
by
e
aad
ng
bei
nov
vey is
pop ula tion .am ple . S~ch as, sur
0
100
ely
mat
~xi
app
ng
eri
cov
Bureau or Labor Sta tis tic ies
ilie a
, and one tor rur al tam
cit
ed
ect
sel
6o
in
es
nomloa .
tam111
Eco
e
Hoa
ot
eau
the Bur
is expected -soon to be sta rte d by'
vey s.
ort to exp edi te the seedsurori
We have 11ade eve~ etttic
gin all y
end
int
s surVey was
The Bureau or. Lab or Sta tis end
yei r
ar
end
cal
the
in
! tur es
to obt ain inf orm atio n on exp sur vey
2•
194
tor
d
nne
pla
e
wer
s
1941, att.er wh ich . qua rte rlyect ed to be avail~ble in JUl J . At
The dat a tor 194 1 wer e. exp rea u con tac ted its fie ld dir ect ors
Bu
our req ues t, how eve r, the San
and
Fra nci sco bY. tele pho ne,e dat
and
o
a
at .N·ew York, Oblcag
lud
inc
t
Je~
pro
s
thi
on
rs
asked .tha t the t1e ld wo rke
!he
.
ve7
sur
t
194 2 wit h the pre sen
t or the t1r st ·q uar ter ot
use as
ina ry tab ula tio n -to r you r saa
lim
pre
a
Bureau Wi ll make
ple have.
al
tot
the
ot
ird
ut· one -th
ple te4.
aoon as ret urn s tro m abol1a
coa
be
to
1na ry tab ula tio n ia
;·
been rec eiv ed. thl·s pre st
.
week ot Ka7
by the end ot Ap ril or fir
win g d~
m· thi s sur vey the f ollothe
· We exp ect to obt ain trocal
fir st
and
1
194
end ar yea r
tall ed inf orm atio n tor theave rag
aur ve1 :
the
in
d
ere
cov
11l7
e t&1
. qua rte r or. 194 2, tor· the
g non-money)
l . Cash inc om e, and tot al (1n olu d1n
·
inc oae .
.
ily
fam
2 . lwa ber ot per son s 1n
pos es:
3. Ex pen dit ure s tor the fol low ing pur
a . roo d.
b . l{ous1ng.
c. rue l, lig ht, eto . .
d. _H ous eho ld ope rat ion
('
\
(
.
..
.
/
)
·14 9
2 -
e. Bou eeb old equ ipa ent
tvn iah -
.
iDS•· :
t. A1l toa obi le.
g. lled 1oa l oar e.
h. !ob aoo o.
1. !ra~el aad tra nsp ort atio n.
J. E4Uoation and reading~
.
k. Beo pea tion .
e, eto .
lfar
we
ity
1. Gif ts, commun
•
e
car
al
son
Per
n. Dir ect tax
, es.
"
••
the~ fora of
ok- (
a. Bank bal anc es 1n sav iQg e and .che
ing aoc oun ta.
ena e Stamps
b. Gov ern aen t bonds and Det
sal es) . and
and
(da ta on pur cha ses
es.
aot
tax aav ing s
c. Repa111ent ot deb ts .
d. Oth er sav ing e.
\
eau of H011e Economics,
Bur
the
bf
d
nne
pla
vey
sur
ilar
The sim
ilie s in
end itur es -of ~bout 100 0 fam
covering inc oae s and exp
eau has
Bur
!he
k.
rte 4 thi s wee
4o ru:r al cen ter s, wil l be sta
t9
n
tio
ula
tab
in
ty
g~ve p~iori
ind icat ed a Wi llin gne ss nto
are
we
and
ry;
asu
Tre
the
by
ded
nee
the item s of 1Dt orm atio lec
sur vey ,
a
'l'hi
.
ted
edi
tio n ot dat a exp
seeking t·o hav e the col
tinu ed
con
be
ll
Wi
s,
tic
tis
like t~t ot the . Bur eau of Lab or Sta
'
qua rter ly thro ugh 194-2.
es
ima tes ot oon saa er exp end itur
· The OPA ·ia- wor kin g up esttor
·
2,
~94
r
yea
ar
en4
oal
the
and 8avinga b1 1no()lle gro upe
the yea r 1914-1. At our retor
e
ucl
ly
ent
re.o
t
tha
to
sim ilar
·and the
jec t haa bee n exp edi ted , s.
quest the work on thi s pro
The OP.A
day
tew
a
hin
ava ilab le wit
data are exp ect ed to beval
b~ble.
pro
the
ue as an ind ica tion ot
figu res may be ot aom~
me
inco
er
low
.
ing in 1942 in the
pat tern s ot spe ndi ng and aav
l
ica
tor
his
on
ed
gel y bas
groups, alth oug h the y are lar
ual cur ren t dat a •
act
on
han
t
_
her
rat
.experience
4. Sav ing s, in
I
,.
.·
,.
\
.
150 .
)
1-1 E M 0 ·R A N D U M
~--------- ""
.
.I NVESTMENT
RE:
OF
oh 30, 19.42.
.
IDLE BUSINESS FUNDS
'
The fo llowtng
pe9ple were ~_nterviewed at the Boston Federal
J
/
Reserve Bank on Tuesday 1 March 24, 1942;
1.
New England: Mutua1 L11',e I nsuranc e ·CompanY
Mr. G. "W. - ~ th, President
·
M_.r. S. S_~ Hall, Jr.,_ Financial·. ~ecret_ary
. 2 • . John Hancock Mutual Life Insurance Comp~Y
Mr . St a c k
1-ir . Mitchell
.
.
3.
U.. s. Srnel ting . Refinlng and lUning . Co.
. ._
. · 1-tr; George. t-iixer., Secretary
and Trea surer
'\
4.
United Fruit ComPanM·.
Mr. T. J e ff~rson Coo·l idge , Chairman·
o~ Board of Dir ectors
5 • . Massachusetts Investor s Trust
Mr. Charl~s F . Rowley, Trustee
Consolidated I nvestment Trustr
Mr. ' Roger Amory, Trustee
1.
6.
United .Shoe Machinery Cor.noration
Mr. H_. G. Donham , E;:xecutive ·vice President
Mr . w
. M. Kemp , Treasurer
?.
United-Carr Fastener Corporation
Mr . Arthur w. Kimbel l , Vice Pre s ident
. and Gen~ral Manager
.
N'ew England ,Mutual Life Ins urance ComPanY.
.
l-ir. Smith
.
s t ated that -they have inves ted· ·a pproximate ly 20% in Government
securitie s .
In recent months t h ey have increa·sed somewhat their
holding? in utility borids ·in
return .
o~er
to l ift the average rate of
To da:te they have been able to maintain 3 . 30% earning
h.i ch has enabled t hem t o co-v er t h e 3% guarantee to
"1
/
...
po~i cyholders •
)
151
- '2 -
pos sibl e
With lower inte rest rat es , thi s has only ·be.en
throu gh t ransf er of exc esse s i n _mort ali ty rese r ves/. Mr • .smith
n ~oans · on
said t hat t here has been no appr eci able incr ease i
of livin g may
polic i es ~ltho ugh a cont inue d .i ncre ase. in t he. 90Bt
stated that
r esult in a.hig her rate of loaija in t he futur e. He
stic s indic ate
::1os t com:)ani es ·are redu cing farm mort gage s . Stati
into Governt hat a subst an tial part of this , redu ction i s goin&
.
rate with t he Gove~n~ent secur ities . The company want s to coope
I
ested
in its finan cing p rogra m' but is not parti cula rly inter
g below ~he ·
i n t he long tap issue s on acco unt of t he r ate bein
level of t heir guara ntee s to polic yhol der s .
~ent
'\
2. John Hanco·c k Mutua l Life Jnsurance Company . This
rnmen t
company has appro xima tely 1 4% of its hold ings in Gove
attractive
secur itie s . They bel i eve a long tap issue would ·be
be i n t eres ted
and ~~r . Stack thought hi s exec utive co:nm i tt ee would
~
an i ssue in subs t an tial amou nts . Appare ntly
insu ranc e
t he la\'; s o.f many ·st~tes pr ovide ' t hat ali a s sets of
creti on of · t.h e
com.9a nies are subje ct to i mmediate s al e at the dis
would regarO.
Board of .Dir ecto rs·. · J ust how t he State auth orit ies
1n
p~rch as ing ~uch
osed tap
- t he neces sary rede mpti on notic e prov ided i n the prop
broad ly
iss ues , he d~es not know but he belie ves i t will oe
tap iss ues .
i nterpreted and not inte rfer e with thei r purcha sing
Mr. lU xer
3. .U . S. Smel ting , Refin ing and Mining Company.
ding more than
state s that at the prese nt time the company i s . spen
nt work~
the ir annu al d~preciation i n expl orato ry and deve lopme
• •. In addi tion ,
They have appr:o xima tely $4,00 0 , 000 of idle funds
'·
-.
.'
.
l
)
.
.1.52
- 3. theY carrY a _tire insurance fUnd of $1,0<?0 , 000.
ile l-1r. Mi xer
9
do~· not re_g.a.rd bi~ls ~d · cert 1
_ ficat,es of. ~ndebted ( ess as__sui table
for their needs, h~ ~elieve s the . comp any can well ·afford ~o buy
the contemplated, five ye.a.r -tap ~·ssue • .
4.
Un~ted Frul t CompanY., -~Mr. Coolidge pei+eve:s all corp ora- '
ti'ons having excess cash s-hould i nvest in bills and certificates
ot: indebtednes s .
While h is c_ompany wi,ll ·be glad to buy t h e five
·~
.
'
ear t ap issues in an· .e ffort to · cooperate with the' G-over nment J
Y
- he believe~ t h at the issuance of t h is type of securit~ . is a .
r·
-nis t ake becaus-e he thinks there may be large redemptions at a
- .
time l e s s favorable for Government financing than at p~es~nt.
'
The. United Fruit Company will undo ubtedly have an i ncr eased
.
' .
amount of idle funds because they have ha4 to s uspend temp orarily
the ir shi ppuilding program .
He believes also " i t .i:s a mistake to
increas e t he annual -purcha~e limit of
11
F. 11 and
l
11
11
G bonds inasmuch
as he does no t regard them as an instrument of saving out rath er
as an f nves1iment and belie ves that heavy·r edemptions may fol l ow
.
at an inopportune time for the Government to refinance.
5.
~.
Massach~setts Investors Trust ;
Bo th
Cons olida ted Investment
l-1 es ~rs. Rowley and Amory e xpressed t he op inion t hat
the r e i s s ome h azard in t h e Governme nt 1 s offering a five year tap
issue to individuals.
If sales are re s tricted to col;'Poration·s
ho\vever , they do not 'oelieve ·it will lead to much liquida tion in
the. general mar ket .
They
~so .be~ieve
there will b e l i ttle in-
crease in the V:9lume of p urchases of ·11 F 11 and "G" bonds by t r usts
if 'the limit
is . raised · abo-:.e~ · $ 50 ,000
inas.muc.h as they feel the
('
/
\
'
..
·
)
1.53
..
4 -
present limit· is adequa t e tor ·mo s't t~ust f'unds-.
.
.
6. United Shoe Hachiner Y C·~rporati'on.· · The ·c?ll"p.or a t ion has
. .
.
\
approximatelY $15 ,ooo ,000 surplus _c ash at the present. ·.tim~··. They
.
)
consider a - five year: tap- issue .s ui table for
the-1~- ne_ede and. will:
. also be glad' to coope r ate with" the Governmen~ by purchasing o·i lls
.and certificates ot indebtedness ~ I na,smuc):l as · t hey h ave no
.
.
seasonal demand, any ne ce~sity for increased working c·wital ·is
(
l
inde finite and they would therefore like to avoid, 'if p oasible , t he continued reinvestment · of sh ort- term securities.
At the·
9resent time t h ey are buying Tax ~avi.ngs Notes against t h is·
yeer 1 s t ax- requirements .
United- Carr· Fastener Corpcwation .
?•
1•1r . Kimbell stated
that they are hol ding at the present. time $1,.000 , 000 Tax Savings
Notes .
It has been necessary to increase invent ory subs~ahtially
and he said the r e was little likelihood of their having any surplus
-funds .for investme.nt above p urchase of Tax_ Saving~ Notes .
He be-
lieves that ·many .companies. not engage(J. in defense work are ·a osorbing i dle fund s through .t h e p ayment of hi gher labor r ates and
11
there should be an ef.fort to incre as e the purchas.e of SerieS' "E
bonds by employees out · of increas~d earnings.
- - - - - - \'lith one exception , t h ose with whom I talked in ·Boston asked
i f t he Government
.
pl~ned
to t .ake any further step s to
.
el~minate
the necessity ' 0 -,: putting in iarge ·subscriptions for . Government
securities to assure· desired allotments.
Several p e?ple expressed
the opinion that· their ·e xe-cutive committees . were hesitant about
/
.
)
\
('
- 5-
suoscri·bing for bonds in exce s s ot the ~ount of
f unds s e ek-
1ng i nvestment.
-' - - - on Thursda~, March 26, 1942 , th~ · followi~~ ~orp oration
officia.l s were intervi·ewed at t)le Federal Res-e rve · Bank of Detroit:
1.
Nash• Kelvinator Cor porat i on
Mr. G. v. Egan, Treasurer ·
•
2.
3.
I
Burroughs hdding .lJachine CompanY
Hr.· J . L .. StEniart, ·Treasurer, and
1-1r . L. A. F~uhar, A.s·sistant Treasurer
(
Detr oit .E di.son CompanY:
~
Ur . Arthur D. Spencer , Treasurer
l>1r. Payson B. Foster , Assistant
Treasurer and Tran-sfer Agent ·
'\
4.
. 5.
6.
. ?.
8.
1.
Scotten- Dillon Comp~Y
Mr . \claTter S. Sc·o tten , Pres·i d:ent
.
}ir. William 1-i. Dillon , Vice President
The J. L. Hudson CompanY
Mr. l/lillia.m A• Petzold , Treas urer
Ford
l~ otor Company
l.fr. L . E ~ Briggs , Chief Gene ral :Auditor
Pack ard Motor Company
· · Mr. Hugh Ferry, Secretary- Treasurer
Standard. Accident In s urance Comoany
Mr. L. K. Kirk , Treasurer
Nash- Kelvin.a tor Corporation.
company is nol·l
c·arryin~
1>1r. Egan sta ted that the
a reserve fund of
$~0, qoo ,0 00 ,
half of
\.;hich is invested in GovEH"(lment sec uri ties with a mat urity or
one year or less and t he balance _is invested. in ave rage matur ities
.
.
of approximately .five years . In ·aadi tion , they have idle cash in
t h.e business of approximatel y $6,000 , ooo • . If it were· possible t o
acceler a te payment· on
Gove~nment oontrac~s,
Mr . Egan stated that
.• .
/
\
\
'\
)
155
- 6 '
t here
theY woul d requ ire lese wor king capi tal and
ths, ~e
tion al fund s for inve stme nt . In. rece nt mon
.
have add ihave
h~
to
.
)
e is some like liho od
incr ea.se thei r inve ntor y $12, q~o~ooo and ther
At the pres ent t~ me ap- .
t hat furt her incr ease s may be necessa~y .
refr iger00 of thei r i~ventory repr esen ted by
proxima~ely $5,0 00,0
/
In 1940 the ~ompany ' e gros s
en.
froz
is
care
shed
fini
and
s
atpr
ease d to $125 ,000 , 0 00
· sale s v1ere $72, 000 ,000 . Las t yeax th~y i,ncr
$375,000 ~opo to $400 ,- r
and they bel ieve ~is yea r they hav e from
company sees litt le pos si_ 000, 000 of busi ness in pros pec t. The
ernment secu rit ies at
oili ty ·or inve stin g add itio nal fund s in Gov
r rese rve fund. matur e,
t'lis time but as sec uri ties now held . in thei
a tea ' of inde bted ness .
t hey \'1111 ·und oubt.edly buy b ills and cert if'1c
'·
company i s hold ing ··
2. Burr oug hs hadi ng Mach ine CompanY. The
$5 ,·000 , 000 ill Gove rnme nt sec uri ties
~ 4 , 000 , 000 in Tax Sav ings Note s ,
an addi tion al $5 , 000 , 000
with an aver age mat urit y of four · yea rs, and
trac ts will' requ ire adin cash . I t now appe ars t hat Government con
ditio nal
wor~ in g
capi tal .
In
t h~
meant ime t he
~ompany
wi ll buy
thei r r egul ax purc ha se
cert i fi cat.e s of· indeb tedn ess in add itio n to
of Tax Savi ngs Notes . ·
3. Det roit Edis on CompanY·
Incr ease d labor and mater ial
any to i nves t in Gove rncost s will make 1t impo ssib le for the comp
.
t his year plan t exment securiti e s . They have in cont emp lati on
h will abso r b thei r ent ensions of appr oxim atel y $15, 000 , 000 whic
1
, 000
000
,
$6
y
atel
appr oxim
t1re res~ rve for dep reci atio n and. requ ire
$1 , 500, 000 long- term
addi tion al cash~ The company is carr ying
-
.
Governments ,in thei r casualt~ fund .
They .wil l· have t o do some
finan cing this year .
,.
\
- 7 4.
tobacco.
and
The company manu
. ctures c h ewing
·account o.f. tin plate. shortage·, . sugar· r s~ri~t-ions ,
Scotten-Dillon CompanY·
On
.
the inability to secure li6orice , the company expects a su"oThey · are ·holding 90~ay bi ils a.hd
st antia.l decline ,in· sales .
also buying other s hort-term Go-..rernmen"t sec uri ti~s...
The company
f!!B.Y accumulate s orne idle cash Ja t er i n t he year and "'ants to .
(
cooperate with the fi nancing program. ·
5.
The J. L. Hudson Company.
The sales
vo~ume
I
(
so far
thi~
ye~r· sho\~B an · increase of appr oximately 30.% ove-r:· 19 41 , -represented
la.rgely{oy higher prices.
They are buyi ng Tax Savings Notes
.,
aga inst es~imated . t~ requirements and in \ddi t ion are carrying
t 3 ,000 ,000 of long- term Government ~e curi ties .
',ifli le the comp any
sees little lik elih ood _of any increase in _ idl~ funds , they like
the five - year tap issue and are anxious to cooperate wi t h - t :O.e
Governme nt -in its fina nc ing p r ogram.
desirable
to lift
t he l i mit on
.
.
.
6.
Ford Ho_tor Company.
11
"f·ir . Petrzold considers 1 t
F 11 and
11
CP bonds .
The company 1 s c a sh h·as declined
froCJ ~150 , 000 -, 000 to $100 , 009.1 000 si nce July of iast -year.
has oeen a pol:icy
.oi
t h e cpmpany not to invest corp orate funds
even i n short-term .securitie s .
to
a~:>:proximately
It
The company ' s. i nventor y aroou_
{ lt6 .
$100 , 000 , 000 of which Mr. Briggs estimat_es ap._
.
.
proximately $?5 , 000 , 000 ~s repre sented by semi- f~r11shed pleasure
car parts , most of which i s frozen f or the duration.
lofhile ad-
vances against Government contract's have eased t heir working
capital position somewhat, Mr. Brigg s ·s ees ·l i ttle opportunfty of
th.e .Ford. 1-iotor Company ' s
p
havi~g
funds availa ble for investment .
.
-ayrolls
are running at· t he r ate of $1,000 , 000 a day and as the
I
.
8
volume of Government bus ine s s fncre aeee, he . be1-ieve
·their cash
position may d~cline )fur~hel:>
7 • . Packard l·fotor Company. :, The company has approximately .
. ·.
$s,ooo-,ooo in cash a~d $ 4,00Q,OOO in Gov:ernment sec.uriti.e s . ·. Their
inventory' amo unts to a pproximateiy ~5 , 000 , 000.
The ·company has
' /
~pproximately
$8 , 000,000 tied up in cars in dealers hands whi ch
t hey do no_! i nclude in their i nventory <figures but Hr. F.erry con-
.
"--.
(
siders the company has .a . c onti~gent l i abi lity f or t hi St amoun t
unti l . the cars are sold.
When and if t h ese c ars are mov~d out
of dealers ~ands , 1-ir. Ferry stat'ed that they w+ll be in a p osi tiop
t o i nvest a substan·tial part of th:e - ~8 ~ 000 1 000 1n short - ~e rm
securit i es pending
ness .
th~
time when i t may be absorbed in t he bus i -
,_
At the pr esent time t heir p ayroll i s running at the rat.e
of ·$1 , 0 00 , 000 per we ek .
He doe s not fee l t hey can .reduce theJr
cash position until ~hey disp ose of t he _contingent liability on
f
cs.rs i n deale rs hands .
St~d ard Acciden t Insurance Comoani. · The company has
.
. ·,
.
.
orr hand $2 , 250 000 i n cash , $10 1 000 1 000 of Government bonds
1
8.
mat uring one to ~ve years and $7., 500 , 000 of Gover nment se c u.ri ties
mat~ring five to fi f t e en years .
,.4 , 000 , 000 maturing
duri'~g
The company will have appr oximately .
the-- c urrent year
and l~r .
Kirk believes
they can properly buy' · a sub·stantial a mount of t he fi ve year tap ·
i ssues .
- .· -
-
..
On Friday , March _27, t he followin g corp ~ration officials
J
\·:e r e interviewed at the Federal· Reserve Bank of Cleveland :
/
..)
")
\C
)
1.58
2 . · 1tlarne~ and SwaseY -Company
. .
· Mr • . I. C. Bo2-ton, Treasurer and Di-rector
3.
Glidden CompanY
. .
.
, Mr. Robert H ~ -Horsblirgh, Senl:or· Vice
. President and Director
·/
·4.
l.
White Motor Company
Mr. Robert C. Lee, Treasurer
5.
Harshaw Chemical Coi9pany'
Mr. Drake T. ~erry, Secretary, Treasurer
and Director
t
6.
Repubii~ s teel
?.
Pickapds . Mather and -Company
'Mr. Sherwin
(
l<lr. Reschl Assistant Treasure·r
\
National 1-ialleable and. Steel
Castings Co .
e
o\oms ~1,000 , 000 Tax Savi ngs No:tes.
~~ ~ 250 , coo .
The company
They are ~olding casn of ·
Mr. Pomeroy stated that the company ne-eds to - main tain
.
.
cash o~ $1,750,000 for their normal operation~ .
Sales last year
aZJounted to ~r 30 ,_000,000 and t h is year will run close to $40,000 , 000 .
It a ppear·s -the company will be porro\ving from oan·k s by Septemoer
this year .
2.
i:larner and Swasey Corrmany.
Th is company normally d9es
a.n annual volume of approximately _$4 , 000 , 000
~vi-th an inventory of
Sales this y ear will run $50 , 000 , 000 necessitating
$1,000 , 000 .
·an increase in inventory to $ 5,000 , 600.
Hr. · Bolton sees little
possibility of the company investi ng anything in Government
se curities except their re gular purchases of Tax Savings Notes .
They are buying
~1 !ooo ,ooo
Tax
monthly
/
savings Notes currently at the rate of
~n
an estimated tax for this year of $12,000,000.
('
\
\
..
'""' ;
)
:159
.,
10
3.
Glidden CompanY.
· l 942 will
i
This company estimates
inc~ease a~proximatel.'~ .10~7&' over : i94~.
.
.
'
u me t hey are owing a total of $ 21,_000 , 000.
in soile i ns tances ' ar~ up as much as
Raw
A
l
sales tor
the pr.e se.nt
mat~rial
.
dosts
ias.i year~ s level.
100% over
·.f--1ile t he .company may not be abl~ in the future to. rep lace certain.
.
r e.\IT mBterials which are_ imported from ~he Fa r E·a st·, thereby ih-.
creasing sometvhat their CS;Sh , they see no likel1hood Io'f
haViiH~
.
(
f unds ror investment.
· 4.
Wnite Motor Company.
The company expec ts that their
/
sal es i n 1942 \'lill be approximately three times t ile :v:olume done
i n 1940 .
banks .
At t he present time , they are bor~owing $ 2 ,000 , 000 from
A large p art ·of their pr esen't· inventory is fr ozen for t he
dur a tion Qf the war .
Und er pres ent arrangemerr\s , the company is
r equired to pay outside vendors ~nd s upplie r s and submit receip t ed
invo ices to the bank holding f unds ad va.nced by the Gove rnment .oe.
.
This
practice
ne
cessitate
s
tying up
f ore tne~ receiv'e payment.'
the ir ivorlci rtg cap ital.·
The company believes t heir cre~:li t entitles
t hem t o draw d own funds .in advance of payment ~nich wo uld reduc e
the amount of float required to c~ear outside ·purchases .
5.
Harshaw. Chemical CompanY·
The co m9any i s no._t engaged · ·
di re ctly in de f ens e work .al ~hough th_ey suppl y. rna terial s to many
co~pan ies \'mi ch h ave Government contracts.
At the pr esent time
v
the company sees littie p ossibility of a decline i n inventory
.b:lieves they will be- borrowing from thei.r banks be.fore the
..
of the year .
Thiey are
\
·.
- ..
..
e~d
)
buying _~ax savings Notes _at regula~ i ntervals.
(
/
~d
...
., .
)
160
.'
li 6.
Rep ubli c ·ste el .
The comp any is wor k i ng
cash .posi tion · at t he) pres ent time .
They are hold 1n
r est~ i ct ed
a
$31 ,500 , 000 .
tax ot $4l,O OO, qoo . · It
Tax Savl ng s Note s agai nst an es'ti m·a t ed
·in p lant i mprove~ente and
has been nec e ssar y to spen d larg e sums
expe ndit ures in the f utur e .
.t he company l ooks forw ard to incP ease d
ac ~ umulatin g any idle .
:·{hile the company s ee s no l ikel ihoo d of
fund s
cash , they woul d be i ncli ned t o use any
ies .
uurc~a se of thei r own sec urit
7.
Pick ands . l·ia the r and Company .
t he Pi ckan ds·, }-lather Comp any has
n~ve~
avail~ble
for t h e
r
I
Mr . Sher win stat ed that
had idle cash ava ilab le
'
subs~diaries , I nte rl~e
i n the p aren t comp any but one of t heir
ranc e fund of $~ , 000 , 0 00 and
S tea~ sh i p Company, c a rrie s an insu
e fu~d s of appr oxi mate l y
in addi t i on has , at t he p rese nt time , idl
s have h eret ofor e be en
: 3,000 ,000 . Most of t heir a~ailable fund
to twel ve year s . He
inve sted in · Gove rnm ents r unn ing fro m ten
ness .wou ld oe a~tract i ve for
'Q elie v~s cert ifi.c ates of inde bted
\•rill also cons ider the
t hei r our pos e anQ. beli eve s t h e com pany
~u rchase
of t he five year t ap iss ue .
('
\
.·
.,
~
. 1.61
.
.
~tniieb ,$~· - ~ ,
. CXIMM..n.. ON
~TION AND LAIIOf'
March 30 ,. 1942
• /
Honor able Henry Morgantha~ , J r.
The Secr etary of the .Treasury~
Washington,_ D. C•
(
I
My dear Secretary Morgi?Ilthau:
Thanks very mUch for your letter of March 21
with respect to you.r testimony -before the Joint
\
.
Committee on Reduction of Nonessential
~ederal
, ..
Expenditures and its interpre~ation during the·
consideration of the bill, S. 2295, which is being .
_considered by·. this
c9~ttee.
Your letter was :read into the record of the
heari.pgs which ar~ be.ing held ·on this bill and every
effort has been made to see that your views are expressed as ~ou desire -them to be .
Elbert D. Thomas
-~
,·
•,
.. .
.
:
·-
Da1.1Y. cha nge.s
........
..
.
.
22
IIB.rch i 6
'
I
~
"
r- . •
·~ ~ ...
!o
[ •" (
•
·.
\__,
U.Q..
;
•'
26,56'9
..
. 26,721
300
-
300
!f
this da
26,g61 ·
I
659
26, 90 2
I
600
.
,/
none - cl osed
26,74:0-
22
none- cl osed
none- clos ed
26, 74-o
. .
26, 72g·
:; I
I
75Q
I.
.,..
I
31 2
I
300 •
,
1 29
300
?6, S99
l g6
300
27 ,01 3
25
26
211
'·3 0Q
'
300
I'
'
I
l gl
· 1 32
/
>
none- cloa-e·9,
'
\.
••
-
1 62
I
/' "•
..
I
..
27, 1 02
27,221
.,
I .....: -600.
27 , 0g9
e . reasur y.,
8tat1 st1 os.
,
d,el1 ver1es
.?1
2S
~ ··
~
300
2:7
,.
~~··-- on hand£/·
25.9
24-
..
.... v _._ . ..... "'
300
23
0
..
o a ' "·
i 6o
20
1 ,,
•
1 4-g
. 1 9.
'
•
- ~ "~-·
( In t hou sands o~ p i e c es )
St ock on hand
t.f,. mh<> Y' n'f :n:teces t
' at clos e of· .
da
li.L.L ..L 0
I
26,4-1 3
300
1 4-4
i
lg
.
-""
:· t hi s o.a
271
17
'
the stoclc
:
·
.;
l. n
.
~
.
.
. l
Includes stoc~ 1~ handS or (1) Federal ~eserve· Banks and branOhes, (2) Post- of fices,
(3') Fe deral. Reserve Bank.·1 ssu1ng. a gents,. and {4-) Treasury vaults i n 'faah1rigton.
.
.
l ,
..
'--
UNITED STATES SA.VINGS :BONDS
~"'"""
Comparative Stat e~ent of Sales During
Firat Twenty-tour :Business Day• of Marc~, FebruArY en~ January 1942
(March 1- 28, February 1- 28, January 1-28)
· On :Basis of hsue Price
·.
{Amounts ._in thousands of dollars)
'
Amount O,f · Incre&ee
or Decreaee (-)
: Percent ace o·f Increa.c.e
:
a,r Decrease (-) '
March ·
:
·
8ales
:·
:
•
I tem
: , JebruarT
March
!
:
J'ebruary
., ·-. I..
~-.:
•'
·.
Seriee Jl - Tot al
Seri es J - $ariks
Ser ies ~ - BBnks
Total
_,........_
$ 79.224
2J1 1 483.
·$ 86 , 938
.3,11 1051
$145,808
4S8 aJ96
310,708
37. 828
165 . 902
397.989
51,820
25J. J9l
604~204
68 , 29'0
280 , 292
$_514~
$703~200
$.952. 7_86 .
v
SoUl"oe:
Note :
',
-$ 7. 714
- · ·~8,870
- 1 !.3!!5
--
~
/
DiTi~ion
of
-
:r!l .s6s ·
87, 281
13.992
sy .489
-$.188 . 1~
206,215
- ·1f ,470
- 2 . 901
- ·249.!286
-- 25. 6
8.~
- 21.9
"- - 27.0
-~
-u
~search
and Statistics.
All; figures are depo_s its wi'th -t he Treasurer of tlle Unit ed States on aoeount of proceeds
of sales of Uni t ed State• taVinge bonds . ·
ligures have been rounded to nearest thousand and wil l not necessarily add to ' total t.
.
1 . l'ebru8r7'
1 ..., over
.J _.
./
Office of the ·Secretary of the Treasury.
·' v
--
J anuary ·:
:.
Series ~ - Poet Offices
Series S - Banke
March ·
'
- 4o·. 4~
- , 2.1
·, ' - 34.1
' .. ·- -24. 1
-~
.,
-~-
'
S B O NDS
UNI TED S 'rA'rl a:S a.A.V ;tNG
2
Da 11y ~a1e a - Mar c h , 194
'
of I s sue P rice ·
· (In thous and s of dol lars )
On l3ae 1e
-·-Bon d Sa'leo
Dat e
1942
2.
lfar ch
~
5
6•
7
9
10
11
12
1
.i~
16
17
18
19
20
21
23
24
. 25
•
v
..----.
26
27
28
. !ot al
1
-
Ser ies E
All Bon d Sa.l e •
Ban k Bond Sa les
Po et Off i ce
Ser ies E
I Se~iee F I
•
Seri~e G]
Tot al
II'
2,043 $ 8,]26 $ 26 ,636
$ 15,868
5,81:J.
1~,868
8,780
1,629
S,459
2,975
24;048
58
12,5
58
'2,6
8,833
3.395
98
23.9
11;870
. 1,6so
10,448
3,869
79
23,2
25
10,8
1, 759·
10,696
4,179
99
19,4
8
6,32
1,586
11,586 ,
. . ),480
.31,o6·s
S,4SS
3.944
18,636
7
4,96
11,246
2
4,16
I
1,365
5.719
2,8o4
18,823
7
7,28
1,533
10,002
3,156
14,l50
4
5.50
3
1,13
8,i l4
2,686
16, 66
5
7
1,06
,.00
10,'594
2,682
12,463
•745
~,102
6,616
2,797
8,693 . 23'.301
1,415
13 ,193
4.464
9.961
61
.2,5
5
1,01
6,384
2,967
731
17',
3
1
9.43
1,20
7,097
2,552 . .
~7
14,·
7
9
5.52
1,01
1
7,91
2,559
1
20,
4
5.52
1,511
13,·306
3.510
33
12,8
/
4
2
3.71
1,12
. 7.998
2.,6b2
24,107
> 8,199
1,·95)
13.955
4,362
9.8333.6o4
900
5.330
2,297
65
19,2
9.076
2,207
7,982
3.003
85
17.7
1
6.39
2,002
3,045
9.3~3
19
14.5
6
5.05
8,1 9
1,3 1'
2.•515
3
67
2
5,21
2,489 '
-- - --. - - .-•'
•
Ser ies E
I 'Series J!' I Series G
$ 21,678
11,434
12,228
14,317
14,875
15,066
23,664
.8,523
13,158
10,800
13,276
9 ·413
11.658
9.351
9.6~
10,470
16,817
10,660
18,317
7,628
10,985
, 12,437
,10,664
$ . 2,043
1,629
2,658
1,68o
1.759
1,586
3.9114
1,365
1,533
1,133
1,o65
'\. 1,102
1,415
1,015
1,201
1,019
1,511
1,122
1,953
.900
2,?o7
I
•
8,726
!,780
12,558
11,!70
1.0.!25
6,328
Tot al
• 32,1641
s.w
4,162
7.2!7
5.504
/'
2,002
h and Sta tist ics .
the Tra eur y, DiT isio n of Rea earc
on aceo unt · of proc eed. • of
Tre asu rer of t he Uni ted Stat •.•
the
h
:-r.it
a
osit
dep
are
.ru
J.l1 figa
bon ds.
tale a of Uni ted Sta tes eav inge
a~arily add· to
reet thou sand and ~111 ~t nece
J'ic ure • ' han be~n roUd~d to · nea
,,00 7
.~
8,693
2,~1
9. 33
5.527
5.52~
J, 714'
· ;:~ · 9.076
6,
21,$~3
27.~3
27,167 '
27.~8
22.97;9
36,035
14,050
.21,t79
17 ,=J
19,
. 15,260 :
27,76' '
~.921
20,283
17,016
23,852
15.~
28~1669
1 65.
RY LEGAL D1·v·1S I ON
MORGENTHA!J SAYS TREASU
VER STOCKS INZWAR
!
SI.HPYING, USE OF ITS SIL
,.
RKING .· TH IS
WO
IS
:
Y.
UR
AS
RE
.·T
YS
SA
I~DUS,laRY ~
UNCED NEXT
Y BE ANNOr.-t
G PLAN WHICH MA
•
,....
111
;w
. ~INANGIN
'11M
h
lPN ••
it&WV"'IIi::."Uiill G NCt
.
.
·WE
_EK.
OF THE TREASURY
N
SIO
VI
DI
L
· WASHN -T HE LEGA
IB LE
G VHE QUESTION OF POSS
DEPARTMENT IS STUDYIN
-S S I LVE~ ~TOCK~ FOR
UEE OD THE DEPARTMENT
AU
ES SEC~ETARY MORGENTH
WAR INDUSTRIAL PURPOS
E~NCE TODAY
SAID AT HI S PRESS CONF
ER TH F TREASURY ~AS
TH E QUESTION IS WH ETH
~S
LEND SI L VER FOR WAR US
THE LEGAL AUT~ORITY TO
HNED ..
THA T IT WOULD BE RETU
WITH THE UNDERSTANDING
OR REPLACED LATER ON '
L,
RGENTHAU SAID HE ST IL
MO
MR
E
TIM
ME
SA
E
TH
AT
ALL SILVER L'EG I SLAT I ON~
·FAVORS THE REP EAL Of
_;'Co s(L :c- $,(L~ ER
r.:)t!f!~!t~
; I Ct:t w6 U! ~: gg£mn:xa
~c.'!.. ~~ ~u ~.'.!9_M~RE
J: f!..O.M.J T~_P.Rfsus ~T-...~
PRESENT ~
.._
LL IO NS OUNCES AT ' ~
O BI
TW'"
N .~THA-........... ~,.,..,..-~'"'--....,.......~'~~I NTO THE POSS IB IL IT Y
G
I~
OK
THE TREASURY IS LO
AT .
ITS S IL VER UN q ER LOAN
OF REL EASING SOME OF
EODUCTION BOARD SECR
PR
R
WA
OF
N
TIO
ES
GG
SU
THE
AS SERTED
T~ RY . MORGENTHAU
Y·
UN I TED STA TES TREAS UR
HE E XPLA I ~ED THAT THE
TT ING ANY SILV ER FROM
AT THI S TIME IS NOT GE
A
BECAUS E .TH ERE HAS BEEN
~ OREIGN SOURCES
R SILVE~
M INDUSTRIAL US ER S FO
SU~ D EN QE~AND FRO
PPER
AS A SUBSTITUTE FOR CO
N
ATED THAT HE BEGA
THE SECRETARY ALSO S~
PL AN S AND THAT WORK
WORK TODAY ON FI NANCING
G
OSE PREPARATIONS DU RIN
WOULD CONTINUE WITH TH
HAVE
E TREASURY EXPECTS TO
THE NEXT FEW DAYS - TH
JOR
XT WEEK ON TH E NE XT MA
AN AN NOUNCEMENT BY NE
ICH WIL L CONSJST OF AN
FINANCING OPERATION WH
ERM CERT IF I CAT ES OF
OFFERI~G OF SHORT-T
THAN
A ·MATURITY OF NoT · MORE
INQEBTED~ESS WITH
2
.....
ONE YEAR
-v-.
"
r
'\
'
.
:.)
.;
r
.. .
166
J
TR~ASURY DEPARTMENT
INTER OFFICI: COMMUNICATION
· Se.oretary .».or'g e.nthau
TO
Mr. Whi t,e ·
FROM
Three Newspaper Arti.cle_,s -·on S1.l ver :
Herbert Bratter : New York·Herald. Tribune 'March
T~ H. Carmica l: New York Times, Ma..r·c b 2§
Ernest K.· Li ndley: Wa·shingtol) Po~t, MB:rC'h · 30·
29
''--..._
All these articles · emphasi:ze 't he potential va.lue. 6t the
Tr ea.sury ' s silver a-a· ~ - substitute f<?r tin, .c opper, antimony ·
and ot her metals ·essential i~ war 'production.
'
The Government's silver policy is , severely cri t ic-ized
'and t he silver bloc pointed to a s an example of a selfish
group working .cqh'l;irary to . ·the. best war interests of the
coun try.
\
The consensus of ·the writers is 'that the silver now held
unused by the Treasury Department ·could be ·very profitably
used in war industries and that the Seoreta:ry of the Tr easury.
it' availap~e
should be given the pow er to seil silver and
to indu s try ·a t a price lowe r than the present artificial price
!ll!'.intnined by silver _purcha..ses. Several hundred million ounces
of silver could be used 1-n industry if the silver w·e ·re availc:.bl e nt e. lower ·p rice or if the s ilver could.· be loaned to
industry. This· would relea:se thousands of t9ns of scarce
metals for e.s~en tial war pu_rpose~ . ·
make
\.
Llr. Carmical states in his article . that it is the opi ni on .
in ·so!Jle quart ers that the. Treasury .j_s a lready permi-tted to· ·
sell below the statuto;ry 'p rice any si,lver which it has . not
:·placed 11 1n the cur rency stream. 11 • Wll' . Lindley sugge.ste that
le g.i sla.tion m;;~.y not be .required to use Tre·asury silv_er tor
so me ind'\lS tri~l purposes; sino~ the law requiring the Govern- .
ment t o amass the silver does not spe cifY where 1 t shall be
kept . M.r . ·Lindley asks, " Why not 1 store' it .in elec.t ric
equi pment , like tr~t at Mu~ole Shoals or Niagara Falls?"
7:e have already su~mitt~d to the Leg~l Division for an opinion a
~roposal to .l et some 120' rnillion ounces of free silver be used ~s bus
·
bars i n the. manufacture of aluminum and a pr·e limina!7 opinion of the Legal
~ivision is that they think it might be done but they want to check it with
the Attorr.ey General's o.ffice if YoU approve_.
.
,
'
_)'
:
'
.;·
'
/
'
-
-" ~
• I
·.
.
-
,•
• •
I
'
.. \
/
'
.
.._
.
. '·'
)
I
-·
.
,
1.68
.statei!lent of Rando~ph _E. · Paul, .
·,
Advlsqr
to
t~~ Secret~ry of the rreasury;
Tax
Bef.qr.e the ' Ways and Means' Comml ttee . ·
of the ~ouse of Represent atives
on H. R. 63-58
March 30, 194·2
/
On Marc-h 12, i942, I submitted a statemcnt ." t1 your
·cJnnittce discussing H. R. 6358, and ,the .Tr easury' s proposals for~ -thE: trca tme:-~.t of cc.pi-tal gains and los scs .
Sine~? then .a nU!il.ber or vd tnesses have ap.p earcd be.for/e your
co!iTill ttee or have sub:n.i tted sta te::tcnts in suuport 'Jf H. R.•
- 6358 and in ~ppos i tion to · the Tre·a sury' s pro2osals .
.
I
· I should like now to Dresent further evidence on the
Trcasur•y' s r e cJ:lliTtonda tL:ms on capital gains c.nd l osses , . .
clarify t~e Treasury's position, and analyze the 'J b jections
that hflve been rais·ea ,by the propon~nts of' H. R'. 6358.
'
.
.
. Our - analysis leads to the. conclusion tha't ·the ad- ·
vantage s clai1~ed for H._ R. 6358 with r Gspect . to the r.evenue
and the e conorJ.ic and market effects · arc illus::>r-y and dJ not
jus tify ·any sacrifice Jf equity.. The taxation of capi t ar
gains at a. flat 10 -percent rr..t G is indefensible v1hc:q.
simultaneously we n.rr:; pr opJsing t hl'.t other sJtU'ccs of in: 9o::rre ~e taxed ~ t ratGs as high as 90 pcr·cent •.
L
REVENUE. AND TAx AVOIDANCE
The t axRtion of capital gains P.vnd .losse s n.ffe cts
r o.venue both di~ectly and indirectly. It affects revenue·
dir eytly through· the· t axes paid · on ·capital ga ins·. . It
·
a~fects rcv:enue -.indire ctly by rc.ising or lowerin~. the ·
lflelds of other .taxes ; parti eulnr ly corpora to a~><l pers onal
mcJme taxes . The prJponents of H. R• 6358 cla.1n that taxc~
~aid directly on capital gains and. losses wi.l l be . gre~tly
~~creased ; thoy t ~ke littl e account, if any, Jf 1ts· 1n~
d1rect effects on · thc yiclas . of Jthor taxes . T~e Tre a~ury
beliGves , f irst, th~t tr£ di r6ct yield fr)? .cRplt~l ga1ns
and loss-es will b e less ·undvr H• .-R. 635"8 tnan under the '
T:e?.sury· propo:;>al ; second, · that H. R. 6358 will lead to a
s1gnificant loss in. revenue fr om Jther t axes .
30-88 .·
...
/
\
I
. )
·.
.;
·1.69
- 2
...
yield from capital gains
A. Direct
. .
.
..
.
)
~
The· yield from capital gain_s depe~ds on. ·m~ny ~n
c~rtain fact?rs : tbe level of the marke.t , ant.icipati"ons.
of future pr1ces and future t axes , the c.ost or basis of
the as.s ets· in the han.d s of the holders~ the distribution
of the assets .bY, income brackets,, and the er.tent to ·w hich
· fndJ viduals holding assets with g~ins als.o hold · as.sets
with ' losses •.
·Furthe:,_ the immediate and t~ long r~~ effe~ts.of
any change 1n the method of taxat1on may d1ffer w1dely~
·Even if lower.i ng the tax on capi te.l gain's Increased tlie
volume o'f gains taken for a . sbor t p-er"iod - . which mie;ht
happen if the tax c.h ange were not · expected to be _".ler!Ilane·r it . any such immediate increas e in yield- vmuld be; at the cxp<mse
· of future yield~ Such a temporary increase in the volume
of gains ·occurr.ed ~s a result of the imi'os.i tion of a· low
flat r ate mg.ximum t ax on long- term gains un&er tho Revenue
Act of 1938. .The cst.irria t ed total n et capital gains (before
applicati<:m of statutorjr i_)erc enta.ge s) · of individuals and .
t axable fi-duciaries filing .income tax r e turns rose f rom
$661. million. in 1937 to $817 million in 19.38 . · ~That . this
incr.ease wa,s tem-porary is. sho-vm by a de cline in estimated ~
total not cap ital ga.ins from 19.38 · to 1939 desp ite .a .moderate
rise in the s tock· pr·ice avcr'age . In bo t h 1939 and 1940 the
estimated total not cani t o.l r; ains vJere below the correspondfrib amO.unts .in- 1935·,
. 1936, or 1937 . (Exhi
.
. b.i t 1)
It is fmi_:lo rtnnt to no te· that C.espi te the t ~I!l'JOrary
increase in the volume of ne t ca;?i tal cains for 1938 it was
not ·suffi cient to overc.ome the r evenue e'ffoct of lowering
the · rate. The ost·ima t(:;d r eve nue r .:_alized f rom capital
trans·actions declined from $58 million in 1937 to '$53 ·
million for 1938. ·
· The prooon<mt o.f H. R. 6358 who pre sent ed the most ·
detailed statistical evidencG , Mr. Elisha M. Friedman,_
cslimatod that, entirely a~ ide from its i~cdia t~ effects ,
the bill would -bring: a permanent annual y1el~. of be tween
$?00 miJ.lion and $6'00' million, as .compared w1 th an average,
.Yleld of $30 millio~_. a yoar durine the decade 1931- 40.
Equall¥ extravagant' es~ i~atcs ?f yi_c ld. were. ~ade wh?n the
1938 b1ll via:s under cons1derat1on. It was tnen ost1matcd
by. a lc~~ing prop~ncnt of low.. tax rat'cs on call i-tal· ~ains
/
..
)
17 0
- 3
by .
cnt · a~corded ca :Ji tal za · ns
tha t a ret ur n to . tlle . treatmd a~la~ ra te of 12 - l/2 pe rce nt
osc
·
of
the 1921 Act , w~1ch ~m?uld
;rod11ce a yi e:ld in cx c·c ss 1938
wo
,
1ns
go.
on lonG- ter m
of
t
Ac
In f ee t, th9 Revenue ra tc of . 15 '
$330 mi lli on a ya ar .
na ti ve ef fc cti ve tax
which imposed a fla t al tcr yi elfte d on ly $53 mi lli on in
sub . per c en t on lon g- t erm ga ins
tho es tim ate of $41 mi lli on
1938, r eas on ab ly cl os e to Tr ea su ry Dep art me nt fo r a ve ry
_mi ttc d at th at time by the
, ·
sim ila r r_)r opo sal . _g/
t the 10 pe rce nt :nat r at0e
Mr . Fr i edman ' z es tim ate t ha
d $60
uld yi el d be tween $200 an'on
and
proposed by H. R. 6358 woir
lli
bie thn .t botw.Jen $2
le
ab
ax
- mi llio n a ye ar would r equ
t
on
ga ins be re uo rted
nt
$6 bi lli on of ne t ca pi tal
ca ,i t al los ses of the cu rre
ret urn s , af t en of fse tti ng es carri~d ov er fro m ear li er ye ars .
yea r and ne t ca pi tal lo ss on as se ts ho ld ov er 2 ye ars have '
Sincc ' l93 8 ca pi tcl ga ins fla .t al t erhc. ti v~ cff e ct i ve to.x
en the re
been su bje ct to a maximum
rthcl es s,, c; ven in 1938, wh
, on ly .
ins
rat c of 15 pe rc ent •. Ne vcin
ga
·
m
ter
of longe
lum
vo
e
s
rea
inc
ary
r
_ was a tempo
r ep ort ed on
no t l9ng t erm gn ins were 19
~bout $65 7 mi lli on of
39 on ly
irr
fid uc ia. rie s r..nd
ret urn s of ind ivi dual s o.n d . Evt n tho pro ?o nc nts ·of the o ill
$468 mil lion wvro r ep or tedlow eri ng of the cf fc ct i vc ·r otc ·fr on
t ma int ain th at th. e
do no
.
1.'hys P.nd Mean s , House
s bofo r c the Committve~roon
..!7 Hearingrvs
~rd ·s ess ion ) on
en tat ive s (75th Con ss ,
.
of -R ep
39v .
Rcvonue Re vis i on 1938 , p;ni. ttc o on Fin cn cc , Uni t ed . Str.. tes
Com
~/ H~c.dnP's be fo re· t he
Se ssi on ) on Revenue Act of
d
.3r
s,
res
ng
Co
5th
"'(1
r..tc
was
Scn
.l. fo r which the est im ate
osr
op
pr
e
Th
.
710
·
·
:?
by
8,
t
193
vis ion s of the 1938 Ac
m
me.dc dif fer ed fr om the pro
ain s or l os ses as t hose fro~ct
(l) de f in ing sh or t- t erm-g or
8
l ~ ss_,. rJ~c~ cus the 193
ho n
due
as se ts· he ld fo r one yor..r
de
the
g
tln
u
llr
; (2)
dr ew the lin e at 18 monthsot her: income -to $2 , 000 bu t ..
m
Act
of lon g- ter m lo sso s froca
rryov0r , whcr~ns the ·l9 38 .lo s s es
ar
ye
per mi tti ng a one
er bu t al lowed lon g- t ermiz ed
·pe rm itt ed no su ch ca rry ov
income in the ye ar r eal ~ed '
to be de du cte d fro m oth er
edu
. t t he t ax co uld no t b? rlu
d1ng
wi tho ut lim it exccp~tho
of the ne t los s ; (3) ~c ereas the
by mor e tha n 15 · perc~nt te
rm gc ins. or l?s so s, wh se ts
50 pe r ce nt of ul l lon- grcent of ga1 ns fro m as
1938 Act inc lud ed 66 2/3 pe s •
nth
he ld be twe en 18 and 24 mo
ll
/
.
"•
I )
('
\
)
1.71
- 4
.
.
nt . long ~
15 to 10 perce~~ woul d gr eatl y _in~rease the · amou
gain s
term
t
term ga·in s r·aa.;.lzcd . Consequcn~ly , net shorin
r·.
orde to
alone · would have to be abou t $1~ 1/Z bill ion r evenue·. Thi~
yield the minimum, e~timate of $200 mill ionover the 1'.333 a nd
would requ ire almo st a ten- fold . incr ease
lled $160 a nd
1939 ga:n s when shor t- term capi tal' eain s equa
lExh ibit 2) . To . yiel d the
~175 mill ion, resp ecti vely .
fold
maxi:mtun estill Vlte of. $600 mill i on almo st a .thir ty'
·
·
1ncrc ase woulC!. be need ed.
)
x;Jv ~t'ine:
The ·only r casor. tha t 'h!ls been a.dduceC. f:rr c si s th~t
such ph.:;nomc.n al incr ea ses in net shor t - t c:rm gain vity in
acti
- a low tax r ate woul d stim ulat e the volut1c of shor t-term
of
k
bul
t
groa
the
c
th~ secu rity mark cte ':lhcr
merk0 t
gains a.1•is c . Ne t tr. xabh · gain s from incr east ed
onJ ~ro up ,
nctiv i ty v10uld incr e(:.SC only to the c·x tcnt hr!t
anoth~r -r..: cei vcd the gu.i ns from the shor t svri ngs whJl e ze for tax
group suff ered loss os . tha~ they coul d not utils i by -ten- fol d
pur;_Joses . Conse quon tly, to . incr ease ·not eain
se i n volume .
migh t r equi re much more than a ten- fold incr ea
wh<;:n t he number
Yet even in the f e veri sh boom y(.ar of 1929 , ange
wa:s the
of share s trade :d on the iicvr York Stoc k Exch many ~ha re s .
lar-ge st in hist ory, l ess than se ve n tim·~s as ,
.
v;ere trade d· as in 1941 . l/
t ax b~ cep i tal
It is claimed that t he pre; se nt me thod of als_
.
ha.ve
gains saer ifico s r cvenu0 also beca us e indi vidu
r to
orde
in
a stron g i riG0n tive t o_ r eal ize l ong- t e r~ los ses
o
t
e
offse t them agai nst othe r incon.e . Th is incedntiv
the
b~
te
ina
elim
be
d
~oul
es
s
s
reali ze long - t e rm lo
$1, 000
only
that
ide
prov
they
e
~inc
Treasury ' s prop osal s
.
me
of l os ses be nllow ed .as an off set to ordi nary inco
of man;;'
The, methoc of taxi ng ca?i tal gain s i~. only one
r
Othe
facto rs affe ctin g the· amount of ga ins reau ze-d.ng t he 15
DUri
facto r~ 1.!l'rrneo.r to · be f ar mor·e i:npor tant .
ta~;in6 capi tal
?f
od
meth
the
,
1940
~gh
ye ~rs fro~- 1926 thro
Yet . the. est1m atea ne~ rev~nue
ga 1~s ch~ngcd seve rul time s .
dire ctio n
from ca21 tal gain s ·and loss es var1 ed 1n the snme ; 1932 ,
.1929
as the stoc k uric·e inde x in all yce.rs excespt in
v1hich a change
year
e
thes
of
one
only
1937 and 1939: The
!7 ln 1929, 1, 125 mill'-ion- shar es we re traa ed; in 1941,
171 mill ion. .
_)
.. ....
:\
1.72
- 5 ...
in th~ ·tax trea:ttnen.t of _c apital ~-~ins and losses vras 'made was 1932 and the revenue change. 1n ·that year v;as favor·able,~ .
(Exhibit 3 and C}\art 1). DUr i~~ .the .~er iod fr~m ~926 to
1931, the ·tax trea tmen~ of cap1 tal ga-1 ns .and loss.c s was·
.unchangeC., yet the revenue var-ie-d ·from: a peak Jncome of
$576 million in 1928 to a revenue loss of $89. mil~1on in
1931.
It is thus clear the. t changes in revenue have .b een
determined primarily by changes 'in stock prices rn.~hflr
_than. by changes. in. tax methods.
.
. .
The importance of · s.to~k prices in determining the
realiza'l;ion of capital r;ains is shovm a.l so b.y Chart 2, .
which compares· changes i.n the a·g,:;regatc volume of net
capital gf'..iris with change s tn stock pr ices\
·
It is also claimed that ir.C.ivi~uals wi th high income
pay no tax or. short- term capital gdns be cause they
·.realize ·none.· This contention is no.t supportc~d by the
e..vailablc evidence . In 1938 , for axamplc , 22. 8 perce·n t of
all short- term · gains rcportGd. by· inU.i vi duals ';ii th ·net ·
incon).e Vlcre reported by individuals v:i th inc~mcs over
$25,000 , e.l though this group rcpo'rted only 10.4 percent of
total·net income. The corre s!_)onding figures for 1939 ~rc
22. 2 percent of short- term capital ge.ins· but only 10,..0
percent of ·net income, cnc for 1940, 20.1 and 7 .-4 .
\Exhibit 4) .
ains and loss
B. Indirect effects of
er
sources
on revenue.
The. ~ipi_tal .. gains te.x is designed not on~;y to yield
revenue directly, ~ut also · to prevant the ~vo1dan?c of
other taxes. The imnosition Df a · tax · rate on cap1tcl
- ~~ins 'S':\bstanticlly belOW th~.t· l eVied 'on Ot~er sources. of
1ncome would give t~xp~yers a strJng inccnt~~e to conv~rt
ot~er in~ome into cP..pi..tal gains, . ·There D.re mcny way~ 1n
wh1ch tilis can be done . Fbr excnipl?, corp?rat? ~~rnmgs
. can be retained instead of being :pr.1d out 1n d1v1den~s;
~ the consequent ·increase in the val~c of ~he corpor~t1on' s
assets would tend ·t 0 .... be reflected 1n the value· .of 1 ts
capital' sto·ck.· : Tliis increr.sed . vo.lue can be reRlize(\ as
a c~pit~l gain by selling t~c stock.
'
.
. ..
.,\
)
..
-
~
1.73
6
. . Similarly, ·a S\Ocfc_ma;r ·b e ~urchased e~~divideha, i.e.,
immediately afte~. tn~ paYI!lent of · ~~e 'di vidcnd, and .~o.ld- cUlll- ·
dividend at a·ga1n, 1mmod1atclJ- ~r1or to tho na~rmcnt ' of tho
next di vi don C.. The · dividend, v:p.i ch accounts for '9art of '
the difference in, price, . is ·in e~·fect realized _as~-a capite.i .
gain•.
.
~
/
. Bonds offer additional opportunities of the s?JmG kind.
A bond wi t_h a low coupon may be purchase~ at e. .discount and
held to . maturity, . part .of the interest thereby being converted 1nto a ca::;n tal ga1n. The· --demand for bonds of t his
type would make it pro.f:itable . for. borroviCrs to issue' /them...
-
. The use of - devices of · this typo to a void- taxe s has _
b~Jcn experienced in Grc.at Britain whe r e some cap ital go.'in~
are exempt· from tax.
The liquida.t i.on of clo sely hold eor-mrations ;1rovides '
still another cxa!llple o.f how ar.. undu~y low 'capital- gains
tax may l t, ssc.n the yie l d of other t&.xes . The ·stockholders
of o: _profitable corporation :nay liqu'ida te· thett ·corporation,
paying a -low fla t r at e ~apit~l gnins .t a x on any_increase in
value of cor::_:>oratc prope rty or accur.mlutcC. earnings of the__
corpor ~ ti.on. _They rne.y then trP.r.s_f er t h.:: pr,operty -r.ccei ved
on liqu:aa tion to ~. new corp orr-ti on, and thus at ·small tax
GOSt obtain the bcnefi ts· or C. r..ow a:ncl higher 1Rvostod cap ital
Q!!-Sis .for e xc0s~ profi ~s tax purpo se s :3.nd· n· ;wr.r and high.z r
basis foi.: d9prcciu.tion purpos~s • . \ 'i t h ~orp or".tS _t~.xcs ~-t
.
the l evels · propo_scC. by t hl- . Trcr.sur y, t1q s ;ncthoa. of t.vo1dc.nce
would become mor e i nti'ortr.nt t~1t1.n i t l:n.s been in tho past .
J:
.2.
ECOHOMIC E-FFEeTS
:Ji TP.E CAPITAL GAII~S TAX
cs
b
A. Eff...; ct on. the . m·ic
of
cani t i l - ~sso ts
.L
•
It is clr.ime·a that the -orcsent tr cati!lcnt of ·ca-pi t d
gains imd. lossc8 a cG<mtu:::.tcs· fluctu~tions in sc.curi ty pri.~Gs , .
~r.olonging periods of f n.llin6 r.nd rising :.>rice ~ . T~1c · a r gument
1s thc.t u fall in ·pric.es - is .prolonO'cd 'occauso 1nvcs~ors c.re
encouraged to realize losses deductible from .other 1ncomc
and a:rc . d-iscoura.gcd from repurches;i ng by the t~x on short_term ga1ns . Th~ Treasury proposal , by prevcnt1ng lo~se s f:o~
- being offso.t against". other i~come , -wo'!'ld r c.movc t he 1ncentlve
to loss rcalizi tion; ' by pr~vi~ing a f1vc-year ~arryover of
-
\
J
-,, ..
. I
\
)
J.74
.:.
- 7 .
.
)
.
losses , it woul.d. remove reluctan~c to repurchas e 'after the
r ealizntion of .los~es ·since la\tt;,r gains could b e offset
against carli~r ro·ss?s • Under t:hc. Treasury propose) , ·thcr.e ·fore , thE; cP. rntal g.a1ns .tax could not contribute to tho prolonga tion of a decl,ine in securi t;r prices ..
· ·
.
/
. · It is maintained that a risQ in s . .: curity pri_ces is
.prolongud bccr.u~e investors a re· reluc tant .tor cP.lize ga ins
on which they w1ll have to pr:.y the talJC. ·The effect of the
capita l gains tax on the prolon~tion of a pri~c ris e depends
on whether it merely disc·.ourl;l.gcs peopl e from switching from ·
one sccuri ty to nnoth er or al so discourages sc.1cs 'by persons
- who ·wo uld npt at once buy · ~orne other s cctiri ty. ·The: di()coura.gcment of 11 svri tchinr, 11 sales . clearly h2.s l i ttl
c or· no 11 effect o·n ·
11
t he level of stock market ;?r.iccs . In a switching sale t'he
purchase of one stock, which tends to incr~asc .i ts .Qr ice, ~s
r>r cecdC;d or r.c compani od· by the sale qf r.nothcr stock, v;hi ch
tends to r educ e. the pr ic e of that stock • . \
.
'·
.
.
. On the .other hr.nd, to the .;;xt cnt t hat t he capi t al ga ins . .
tax d-i scouragc s sc.les t.ho. t riould not. have boon follov:cd
· promptly by rcpurch~ ses the level of tho market o.ffc ctGd _,
might be eff e cted. Howcve:r, if an indi viduc.l pl c..ns ·to get
out of the . mr.rlcGt, ·he v;ill \'{ant · to gc t out ay ncar t h0 top
~s possibl e , t~x or no t ax • . It is clea rly in his interest
.t.o pay the tax .on ::. l q.r ge r gc..i n than on a smnllcr g~.in.
As evid cnc c . the.t the c ap itr)·gai~s
t ends to p~olong
v. price ris e , dc.. t a have been cited to the effc;ct t hr-t· 1n
1~29 stock }?ric es did not r each thoir peak in this country
tin til some time c.f t er stock pric es in Grca ~ Bri tc.in had
.
sto:rtc:'d to decline . ·This find i ng . is contradi cted by t vm
v1idcly s.ccep t ed Br~ tish stock :)rice series (~he B~n~crs .f
Ma~azinc and the . Lo~do~ a nd. Car:lbr idge . Econom1 c Ser-;:1 c~) !
wh1ch show no subst~nt1al d1ff er enc c 1n tho do.tc s ... t 1:-Jh1ch
· . stock oriccs bc('l'e.n ·tlKir d3nrcssion declines in the t wo
C91;ffitrics . The ·Bo.nkors ' · ~:Juga zinc stock pr1~c s·? nes ·1s
plotted in Chart 3 r.lonr wi t.h a com;,:>rchcnsl vc 1ndox· for
this country. · Both scri~ s roach their peak at. ::;.b out the .
same time . · True,- both the ri-se ·r.nd the fnll i~ stock
. prices wer e Jr.ildcr in Great Br.it ain the.n in ~1,s ~ountry'
· but a s Chr.rt 4 reveals , t his \"IC.S e.l~o · true. of the m?vc:mcnts
~ of the index of production, ~~}1i ch r efl ects chr.ng(:,.s 1n gen.
er al cc~mo~ic activity.
tax
.1:
{')
1.:
•
...
•
•
•
.
0
)
'·
17 5
'
- 8 tha t flu ctu a t ion s in
These cha rts str ong ly sugges t ate
d to cha nge s in.
rel
stoc k mar ke t pri ces are clo sel y ar t . 5 giv es fur t her evi gen era l economic con dit ion s . ·chtha t cha nge s ih· sl9 ck .
dence on thi s poi nt . I t sho ws
e mo ?d in ·rou gh cor•respondence·
')ri ces in t!ll s cou ntr y havinco
me .
~'.'i th cha nge s in na tio nal
ivi ty
B.- Eff ect on the volume of ma rke t act
"'-...
.
in some c i rcumstanc~s
Wh i.le . the cap ita l gai ns tax maycti ons , it is onl y one
nsa
affe c t the volume of cap i tal trable sta tis tic al ·evi den qe
ila
- of many fac tor s , and the avaare far more imp ort ant .
sup ges ts tha t oth er f ac.t ors
ume of act ivi ty seems to
A ve ry imp ort ant fac tor in the vol
·
be sec uri ty pri ces .
4- ±931 when the
For example , dur ing the per iod 192ica lly .unchanged and
ed p-r act
norma~ and sur tax r a t es rem ain
jec ted t o a maximum_tax· of
sub
long- term cap ita l gai ns were share~ tra ded on t he !1!ew York
l2- l/2 per cent, the number ofmi llio n in 1924 'to ~ ' 125
Stock Exchange ros e fro r.1 284 to .577 mi lli on in 1931 •
~i l li o n in 192 9 and dec lin ed
or t ed on tax ret urn s flu ctu . . The ne t ca~ital gai ns rc~llio
n in 1928 to a low of
ate d from a hig h of $4 , 862 mi ctuations were obv iou sly
' $501 mil lio n in 1931. ?he se i fl~
gai ns tax rt>.t es r:hi ch
independent of . the fixe~ ca.~J ~al. Sim ilar ly the volume of
pre vai led thr oug hou t the per iod x ret urn s inc rea sed from
net ca.2ita.l gai ns rep ort ed on t a 5 to $1 , 456 mi llio n in
an est ima ted $762 mi llio n in 193ris e .in sec uri ty pri ces and
1936 in harmony \Ht h a gen erasl of tax . (Sec Ch art 2) .
desp ite inc rea se? in the r ate
C.
Eff ect s· on def ens e fin anc ing
~ - ---
t8d tha t the cap.itnl
Some of the wit nes ses have st~ .def
ens e fi~ancing,
on
gai ns tax has an adv ers e eff ecttnx , by dep res s1n g the
(l) bec aus e the cau ita l gai ns
, lea ds t _o hig h yi eld s wit h
111P..:ket pri ce for c~nunon sto cks ·-:ten
t bonds must com pet e;
wtuch the low y:ie lds on Govcrn1e of equ i ti cs to sec ure fun ds
· (2) be Gaus e it re t ar.ds the sal (3) bec B..1:1'~ e it makes peo ple
to pur cha se def ens e bon ds· and s , thu s. inc:ca~ing . the
reluc~ant to inv est in -cqti~ ti'eing def ens e 1nd ust r1c s.
Government ' s bur den in fin anc
I
)
1.76 .
-. 9
The Treasury -proposal tha.t c.a .pital losse·s not be permi tt.ed as an offset to ordinary -~Ii.come . v:ould i:·.emovc' .· .
. . tcndeiJ.cics· to rea.liz~ c.Cpital 'los se~ and thus · eliminate
an:y depressing effect that sales . ~o .e stablish tax loss.es·
might h~ve o~ ~he ItJ.ar·k~t. Th·e s~c?nd cdl~~entio~., . th~t
the cap1 tal ga1ns t a x - 1nterferes w1 th defens·e f1nanc 1ng
by retarding the sale of equities A or the purchase of
defense · borids is invali~ Increases in funds tn the
hands of sellers wo.uld mean decreases in :funds in the
hands of purchasers; As for t he third eontention, any
effect on the willingness o_f inves't-ors to purchase equitw
securities -- · and we do not agree ·that there would bQ- a.n
advorse effe ct-- would. not interfere with the defense
e-ffort.- At a. time like the ·prest;_nt~ there is no !iced fo r ·
. further investment in indus tries-not engaged in the war
·e ffort. In ~he expansion of the wa-r industries , on the .
oth0r hand, the Go·.rernment must, in.·any case, bear a -l arge
share ·of t he. cost ·bccausc of the risks . inher{(nt in the war .
'
D.
Effects on ri..sk....capital
'·
. ·.All taxc s influence -Gcono:;-n.i c ac t~:vi.ty; and ..practically
c.ve ry tax affects the willingne;ss of persor.s to invest
. their capital in hazard·o us cnter!)risos . Hor:cver , it would .
· not be dc sirabie for · that . reason- to do wi thoutr taxes , fo r
the alternative, additional borrowing, would have wor~e
dfe~ ts .. Accorci.i·n gly th:.; question is not whether taxing
capital gains . rcC.uccs ·t he will i.ngness to i-nvest, b:ut
r!hcthcr t hi's ·effect is. R"rcator than i s that of the tRxes
~mposcd on oth~r incor.1e~ The Treasury proposal is des~gned
to assur e that the effect of tho capital gains tax on
~
. ~nvcstnent will not. be . gr eater than the effects ·of oth~r.
· ~nc0ne taxes . It grants special relie f to person~ ·dcr~v1ng
. 1ncomes from capital~ gains , pro.vidi ng ~ .lower ;:uaximUlll rate
'. on long- term canital ·gains ' than on oth0r income and by
· providing for a" fi ye - year . carry- forwa,rd of los·scs •. The ·
Trea$ury proposal on .1osses is more generous than H. R._6358,
which vvould prov~de~..,-for only .a two- year .P.a rry- forward .
·. 3_.- BRITISH AND CANADIAN TREATI11E·NT OF CAPITAL . GAINS
\
The British ·include in · regnlar income, . and tax at the
regular prqgressl-ve rates , gains fron · t~a.nsactions that .
are part of the taxryayer ' s tradc ~or bus1ness . · The cxenp t1on
0
J.: ••
' ,.
)
- 10
.
)
.
.
.
·.
of capital g·ains appli-es only to· :gains tha f a.rise. f om
casual ·or i sola_ted _trans_ac~ion'S_. . Many trans-actions that
in this country w~uld rece1 ve f.ayQrabl? capital gains tax
treatnent are sub,Jected to the high Br1 tish ord~nary.-tax
rates .
· /
. Transactions in assets that are not part' .o·f the taxpayer ' s ~ra~e or business nrc r elatively; l9ss· important in
Great Br1ta1n and most· European coun~rics than in the United
Stat~ s , and hence give rise to l es s serious problems of
accwmulation of wealth witho~t taxation.
.
1
· The Br~ tish and·. the Cnna,dians, who f ·o llow the British
lavt, have found it extrer.to·l:Y di~ficul t tO draw t he line between . taxa·b le ·and tax- exempt gains from. transactions in
assets . A~ examination of Britis~ cas ~s illustrates this
point. (See Exhibit 5) ~
\
A severe indictment of the British fornula for the .
tr eatment of i ncome from transa·c-t-ions in as.sets was made'
· in . the r c ~ort of the 1920 Royal Cou~ission. (?ee ~xhibit 6) .
Professor Robert Murray ·Ha ig of ColTh~bia University,
a leading authority· in th.; f i eld of taxa tion,/ who has made
ex t cnsi vo studies on· the spot of capital ga:in_s taxation in
.
E~gl an~. and other European countri es , . in a .serie s of articles
on the t-axation of.' capital gains ,. . published in t}:te Wall Street
Journal in . 1937 ,. r eached the following conclusions . about the
British tr e-atment : ·
· ·
" It ha:? .bcc·n shown: (1) that . th<:. . excnption.
of cr.pi tal gains in Engl'and is f a.r more na·rrow than
it is COilliuOnly conccivc·d to be; (2) that t he partial
exem!? tion o£: eap·~.b.l gr..i:p.s under thei r law involves
draw.i nr; ri.n .r:rbi trary line betwc.en taxable and e~cmp t
trr.nsacti ons wi t h uncer·tain· and · inc qui tabl e rcsul ts·
?.S be tween i~di viduals in substantially similar
circu.rastances; (3) thp.t the British themselves are
far from satisfied with their formula, a: Royal Commission having ~o-~e so. far as· :t o doclo.re tho. t it
'cannot bc . just1f1ed'; (4) that the formu~~ plnc?s a
prcmill!'l Qn the transformc. tio~ {)f tax~. b.~e 1ncomc 1nto
exerapt capital gains a urem1um· sufflc1e.n t.ly sub. stap.tial to . gi-ve ris~ to~· tax o.vqidanc.c and loss of
/
...
.
.
r.
~·
~n
·:178
sup~
~
\
·.r? venue. ln s pi!"' of Eng lar.d 's
r i or -admin i t,r a- .
hon and ~or h1ghqr degre~ of taxpayer co- onere.ti'on ·
and ( 5.) that .t he· ·devices for t .a.x a.v oidance ~aus·c . '
investor~ to b~y and. sell securi ti.es· at 'unnatural '
~iines ,. w1 th consequcnpes for ~he : :na.rket th~t. ·nay be
cxpecte~ to be accentuated, ~d.er .American cori,di tion s ."
4.
A.
CONSIDERATIONS. OF EQUITY.
The taxation of gains
a.t.,p~og~essive r·ates :
H. ~· 6.358 w?uld ·~o:nplctc1y . abandon. the principle of ·
progress1ve taxat1on w1tn respect to ca?ltal gains of in!lividua.ls! 'Such e;ai.ns would be tr.xcd o.t .a flat .10 Derc·c nt
. rate at · thc same ti~e that· other income, under the Treasury ' s
· proposed ra t c schedule for the irii i vidunl in cone tax, vtould ·
be taxed at rc..tc~ the.t ::tight r oach 90 ?crccnt. So gr eat e. '.
discrimination in ·rc..vor of cai_:li tal e;e ins iS\ ind.:.fensible~
It has beer. m'lir: taincd thr, t th~ · taxv.tion of short-·
t erm capital gc.ins at progress ive r ntos i~ in~ff c cti.ve ,
because the . hiGher ir:cJ~!fc. groups r.Jt.!.liz c no sh<Ht- t orm
cc.pi tal gains . Tha d.a b. for . returns with not inc·:>m<:
sll!lll1larizod in Exhibit 4 r ef ute this co;1tcntion. In all .
three years· for v;hich data 6.rc r;i vcn for r etu'l'·ns vii th n0t
inco;1o , thc:rc .wc.s conccntrr.L·d in cr.ch inco:!lc cl:::-.s s between
$5, 000· r"pd $l , OCO,OOO n lar~ger pcrconto.gc o.f the; short- term
gains than . of the· ·a ggr cgc, to not inc one . · The in~omc·. clr-.ss ..
fron $100,008 to $l·, Q00,000, for· ex{'.np1e , r c_?ortcd 1n 1938
only 2. 5 pe rc ent of r.ggroga t c net i ncome , but i t rcpo.rtcd
·
6. 1 per~ent of net short-tcr~ c~p itnl gQi ns ~ad 27 . 3 per~cnt
... of nat long- t orn e".pi.t o.l e;r~.ins. ·The only c. xcc!Jti?n wc.s in· .·
tb~ Y.0r.Y· highcs.t i·ncome· clr.ss , .$1,000,000 o.nd over, who r ..;
the per.conkge. of shc;>rt- t c rm . cr.p i bl g~rins in. 1940 ' :m.s the
same r..s tho porce'.ntr'.f:(e· of ne t income, nlthour,h cons1do r ably
less in 19?8 r-.nd 19~9; this :nny be. exDlr.i~e(l · ~y th~ hc~.vy ·
concontr a bon of net lonO'... term cr~p 1tnl gr-_lns 1n th1s 1ughost ·
in:cOiilC cl~.s.s . It is clGC.r from this Exhibit .thr. t ~. rcl~ti vely
larger nt'.rt of . short- term cr.ni tr.l gRins · thr.n of ordinr..ry income. is" t .c.xod at progressivo""r~te.s. in the niddlc r.nd higher
brr.ckets . - .
. ·
B.
The distinction· b;twoen short-tern
..;;,.__~.::;::..~:::.=~~--- .- - .
.
and~longtcr~
.
-,
Gains on assets· b.cld less than a y ::;ar ar0 .as cl!rront
as other typ8s of .income e arncd ·C-uring. th..:. -sa.":l.c p<:. r1od.
. . .}
.
gains
.
..
~
)
179
- 12
ved fr m
A large par t·of ~uoh sho rt-term gain s is deriof
secu ring
ay
w
a
specu~ati:rc acti vity•.. . Spccula~id~ i?
ld be .
shou
~c
1nco
Th1s
a liv1ng 1n whole or 1n par t.
hant
rc
me
a
of
:
~e
inco
trea ted exac tly the same as . t he
ati~n .for
ific
just
no
is·
a la~zyer. , or a wa:ge . earner . There t it would r eceive under
giving it th~ favo r.ed trea tme nt )ha
·H. R. 6358 .
' s pr'oThe obje ctio n has. been rais ed to ,the . Trea.sury
h
~hic
ion
ulat
spec
nst
posals that they disc rim inat e agaJ Th~ Treasury prov osal
serve's a usef ul economic func tion . inco~e; it woutd
·
- would not .disc rim inat e aga inst such
s
rate
s~:tme
the
at
-merely sub ject such income· to taxa tion
as -apply to all othe r type s of income .
.
.
ing between longtiat
eren
diff
for
ason
re
r
The majo
~a ins is that -.
ital
term cPpi tal gain s and sh6 rt- ter;n cap
, but are intimethe for1:1er may accr ue over a peri od of purp
oses . The
tax
cluded in a sing le yea r's i ncome f~.
of sale ·
year
the
concentration of the cap ital gain into been if the gain
·makes the tax hi gher than it would haveyear s. ~his is the
had been t~xed as it accr ued over the - term cap ital ~ains
reason for tfie spec ial treat~ent of long
Treasury recor.t"l'tenda hon
und~r the pres ent law and for the
re being included
that long- tern gain s be cut in half befo
taxpayer , that
the
n of
in -taxabl~ income or, at the O!?tio
ect to a flat
subj
be
the actu al a;nount .of long- term gain
·
rate tax o( 30 perc ent .
. be t~een
There is , of course , no exac t divi ding line
hs :11. t~e · .
mon~
set at 18
long- and. sho rt- term ga'ins. It is mnen
d1v1s1on ·
th1s
that
present law, and the Trea sury reco for~s l year , or less ,
be continued. - Gains on .ass ets held
clea rly sho rt-terr.1
rais e no accr ual problei!l and hen.ce are
2 years , or illOre ,
gains; gain s on asse ts held for exac tly clea
l.:mg- teri:l
rais e an accr ual oroble;-;t and hence are linerlyapproximates
gains. The propo~ed 18 months divi'ding
this di visb n.
C. ·The rate on long.:. term g-ai:rts
of l 5 perc ent on
. The pres ent alte rna tive flat rate was
enac ted in lD38
long- term cap ital gain s of il}d ivid uals
" ,
.-
.,
...
)
180
- 13 .,.
·now ar •
when surta x rate s were .uuch lower t han they. been
re.9 mFurther incr.ease s ~n the surt ax ra te.s have
.should
s
gain
tal
c~pi
on
~ax:
The
mended by the Tr~asury .
increa·se alon e Wl th the tax on othe r 1ncome.ate Ifinan1938
opri
alter nati ve rate of 15 perc ent was apprrecon
mends that '
sury
Trea
The
it is far too low today.
to 30 perc ent:
the alte rnat ive effe ctiv e rate be. rais edcapi
tal gain s
on
ax
iiVt
. This will brin g the incr ease
on othe r
tax
in
ease
incr
the
approxina tely in l.ine with
.income .
D. The segr egat ion. of loss~s from othe r incone
'
'
~endations
Bot~~· R~ 6358 and the Trea sury 's reco
_
long- term··
of
y
bilit
ucti
ded
would ellliuna te th: pr;; sent
; the
rely
enti
,
6358
R.
.
H
losses fro:11 othe r 1ncoue -ss of
exce
in
nts
ar;tou
>
:
t
ect
Treasury pr opo sal , with resp
the ,
that
is
ge
chan
ested
$1, 000 . The reas on for t his sucg es v1it{l.Jut limi t
loss
tal
priv ilege of offs ettin g capi
tine the real i agai nst othe r income perm its taxpa~ers to e.
This is
ntag
adva
lU."J.
zation of loss es to thei r ~:mxil'!
ket by
~ar.
the
urbs
dist
prejudici al to the revenue and
inducing tax sale s.
a subs tant ial
In rece nt year s , taxpayer· s have soldcapi
tal l osses
tern
long
volume of asse ts resu lting in
to reduce taxted
t
u
per;.
e
r
we
which , under the pres ent law,
~~ounts of
y
utor
stat
The
ces.
.able income fro~ othe r sour
od
net l~ng - te rm capi tal loss es and gain s for the peri
7.
it
1938- 10~0 are shov-m ln.E xhib
The carr y- over of loss es
of loss es ;
H. R. 6358 wo uld p cr~it a t~~ -yea r carr y- over
-yea r
the Trea sury prop osal v;oul d pcrr.li t a. Jao re libe ral five
carry- over of losse~.
es b~ . d~sal
Sinc e the reco~acndation that ·cap ital ·loss
1t ·lS
use
beca
nade
is
e
lowed as an offs et t o other incJn
r
thei
o
t
e~
loss
tal
capi
possible for taxp ayer s to tir.w
are
es
loss
tal
capi
use
beca
naximum advantage , r athe r than
.
ycarr
th~
at
c.t~
not a pro~c r dedu ction , it is dcsirabl
ble .
eas1
f
ely
at1v
1str
aa~n
is
~ve r of loss es be as gencrvuS as
·'
E.
\.
_)
)
181:
14 to. rea lize cap rta
Taxpayers raay. not b~ in a P?s i t~on huv ing · suf fer e. .a
er
gai ns wit hin a two - yea : p~ nod a~t e-year car ry- over t he
fl~
~
a
~
t1n
m1t
p~r
cap ital los s . By
nco of los ses bec aus e
pos sib ilit y of a cJn plc te d1sall ow~y ~inimizcd • .
the re are no gai ns wou ld be gre~tl
short~ t e rm
Ava ilab le dat a ~n the c arr y~over of8 show tha t t he
.
ce 193
l oss ri s und er the law in eff e ct sin
ly conce~tra ted . in the
ge
lar
are
s
se
unus ~ d sho rt-t erill los
Thi' s ind ica tes thn t
net inco:ne cla sse s und er $25 , 000 . eve r ncr iJd wou ld dis a str ict li~itation of the · carry~
cr~inco::1e clus s,es- .
crb tinc .te aga ins t the rcl cti vel y lov:
nge s in t he zen e.ra l
· F. Ca'Ji tal gai ns ari sin g fr o·m cha
pri ce l eve l
sh,:>uld be given
It i s clai racd tha t cap ita l gai ns
the y nay ref lec t,a gene ral ris e
s~e cia l tr ea tme nt bec aus e
ds . The arg uue nt is
in the pri ces of a l l ass ets and eJorea se the ·v alu e of any
tha t suc h cap ita l gai ns do not incto t he ass ets .Jf an:->ther
one tax pay er ' s ass ets ·r ela tiv ely se. his eco nonj.c p,w!cr or
taxpaye r, and hen ce do not inc rea tho s e of oth e r tax pay ers
tax pay ing llb ilit y re l ati vel y to ty~
wit h sub sta nti al amo unt s of proper
/
ce cha nge s i s not
Th0 pr Jbl em rai sed by gen e r al pri
cap ita l gai ns a nd 1:->sses .
res tr i cte d to the t a x tr eat! :um t of
:->r ae cr0 asc othe r kin ds
General ~r~ce ' cha nge s als o inc rea se wi th res pec t b them
.
:)f incorue and COn 3e.que·n tly the tax
se
rea
inc
ng
i
JJnd
a c.)r res'
·witho ut the r e havincr bee n rcaliz ~.:fid t s and l oss es arc of t en
pr.J
ess
sin
in econowi c power . oBu
the gen eral pri ce lc-y el.
larg ely a r efl ec ti Jn ·or cha nge s vi nf ixe d pe r sJn al oxe~p t1 on
Even wage incr eas~s whi ch , due t
ed to r~gh~r · ef fe ctiye
and pro r,r es siv e rat es , are sub j ect in·creas.~ ~n tax pay1ng
any
ra~e~ . Jf tax Day :tot rep res ent
c.Js t of 11 Vlng ar e equal
the
.
n
i
ab1 h ty bec aus e inc rea ses
t . ~ur ta~ b .ws tJ ::l£C~ ~he
or grc:1ter ~ If. we wer e t o ad jus
l ga1 ns 2.nd los ses a.ue
proble:.l for tha t f rac ti on .Jf ca· nta
be oblig cc. in jus tice
t o gen era l pri ce cha nge , we sho uid i nco:rrc and las s al s o.
t o meet it f Jr tht) oth er for ns of
5.
SUJ.~JAR Y
the foll o·w ing con· ·The · Tre asu ry' s ana lys is .lea ds to
· ··
cl.usions :
,
'
,
.
)
..1:82 '
.
.
. .
1• . The enactment of H. R• .~358 would result in· a· loss
in revenue and would . fa:cili tate :{;aX' avoi.dance .
2. The Treasury proposal would eliminate a:s crffcc- .
tively as H. R. 6358 .·any· prolongatbn of declines 1.n
security pr-ice's due to taxation, ~incc both proposals
segregate capital losses and provi.de for a carry- over of'
such losses .
·
.
3.· Factprs other than the c.a Pl tal gains tax ar~ ):he
maj:Jr deterraihants of the volume of market activity.,
· 4.- There ~s- no basis for the claim that the capital
_gains tax interferes with the _de fense of~ort •
. 5. Great Britain and Canada do not C~r.lpletely exenpt "'
capital gains and losses fron taxation; ~heir procedure
cannot be recorohlended . for this count~y •
. 6. The taxation of capital gains at a lO .ncrcent· rate
cannot be jus:tificd when other income 'is t o be taxe-d at
r ates up to 90 percent .
7. Short- teru capital gains do not differ from
:)rdinary inc-orne . in any respect entitling them_to rccci vc
fc.Vored ·trcatm0nt.
8. · Long- teri·a· capi. tal gains r equire special treat;ncnt
because they accrue over a period of ·years but are taxed
in a single year.
-.
.'
)
18 3"
·zm tbt t 1
.
..
.
.
. .
)
..
.
I
ita l gai n ot 1nd1v1duale
Est ima ted tot al net cap
t1l1 ng Fed era l
·and · tax abl e .t1d uo1 ar1 ee'.
193 4:4 o
et
urn
ret
income tax
and sto ck pr1 oee ·. ·
/
..
.
1934-
Est ima ted
:
: · tot al net
: oap 1ta 1 gal l\!/ :
: ( fl! 000! 000 )'-- :
340
5to ok P~joe .
ind ex .....
(1935-1919
=· 100
76 .6
1935
762
S2. 9
1936
1,4-56
117 .5
;1.937
661
11~ .5
193S
Sl7
1939
643
94-.2
194-o
649
SS. l
Cal end ar
yea r
\.
'
SS.2
.~aroh 25 r 1942
Treasu ry Dep artm ent ,
ch
ear
D1v1s1on ot Tax Res
.
.
9re
ima ted act ual amounts bef
1/ Rep res ent ingotestthe
s,
age
ent
ero
p
ory
tut
sta
app l1c at1 onind ivid ual s and
rep ort ed on all ret urn s by
lud ing ind ivid ual
tax abl e :t1d uo1 ar1 es, .incme.
inoo
ret urn s wit h no ·net
ex o:t 4-02 ind ust ria l,
~Standard and Poo r's ind
_.
cks
ra1 1, and ut1 11t y sto
,.
I
, .
.18 4
bhl blt 2
.)
'
. .
.
-t•r m cap lt& l galn
Net sho rt-te rm and actu al net long
-4o y ·
ot individual~ ~d taza b;te ~lduoiarlee; 19)8
(Amounts ln mil lion • ot dol lars )
' /
Net
abo rt-t erm
cap ital
.:
Sa in
.Year
Xct uil net·
long -ter m
c~ 1.ta l gain
( ea.t1 mat ed)
..
'rot &I
actu al net
caplt~· gain
(eat ima ied)
Amounts
1938
1939
160
175
123
-
1940 2/
\
Per cen t
so.~·
1938
1939
100 .0
100 .0
~ 100 .0
'72.8
81.1 .
1940
Karch 26, 1942
earc h
Treasury Dep artm ent, Div isio n ot Tax Res
the
gain befo re app lica tion ot re! / . Actual . net long -ter m cap ital
unts
amo
ry
uto
stat
trom
ed·
stat utor y· _perc enta ges esti mat
retu rns co~ered . ln
port ed 1n Sta tist 1oa ot Income.no The
net 1noome.
olud e ind ivid ual r etur ns with
.·
E,/ Prel imin ary,
.·
\
\
/
..
}
"\
.)
..
;
-
\
)
..
.·
..
~85 ·
Exh1b1t 3
~
stock pr1c~~· estima~·ed ·n et revenue from tax treatment ot ·capital
gains and los.-es of 1nd1v1duala a)ld ,taxable f14uc1ar1ea . tax·
11ab111t:1 on other 1no~me, and _total.. t 'a x l1abil1tJ, 192~1940 J/
' ./
Calendar
years
stock price . :Estim~ted net
inde·X 2/ . : reven\le from
(J.935-1'9'39 :_capital ·gains
:and losse~
-100
.#/
.
1926
1927
1928 ·
.1929
1930
1931
1932
'1933
1934
1935
1936.
1937
1938
1939
1943 ]/
105.6
1214-.·9
158.• 3
200·. 9
158.2
.99 -5
51.~
67.0
76.6
82.·9
117.5
1~7.5
88.2
94-. 2
. 8S.l
· . . .<In
225,485
296,879 '
.576, 001
420,971
-15,226
-89,001
-79,917
16,167
17, l.97
85, 257 .
201,941
58,l,S8
5~,873
2 ·' 9~5
12,SoS
:Estimated tax·: T·otil
: l~ab111tJ :_. :
tax
: <on pthe~ .
:liability~
: income :!V :. ,
thousands of do.l ia:ra ) .
500,990
533.760
588,253
_580, 967
491,941
335.~28
409}879.
' . 357, 953
494, 203··
572, 182
. l, 01'2, 076~
1, 083,381
712,960
901,699
1,481,211
- 73~.475
8]0,639
1,164i254 '
1, 001,93.8
. 476,·ll5
246,127
329,962
374,:120
511, 4oO
657,439 '
1, 214,017
1·, 141,~69
765 ,833
9.28,'694
1,494,139
March 26, 1942
Treasury Department ·
D1v1s1cn of 1a~ ~esearch
! /' The estimates are ~estricte4 to returns with net income,. ·including ·
howe,er iri 1938-40 taxable. det~ci t retu~ns. Estimated net ·r e,enue
. from o_a pital gains and losses is the difference between a) to·t~l
·
~ax 11~b1lity under the provisions of the · p~rticular: reve~ue ao~
applicable to e·a ch. specified income year and b) estimat~d tax
11abi_1 ity .on other income · if capital gains and losses had be.e n ·
en~irely excluded trom the tax. computation.
.
·
.
Y
·sts.ndard and Poor's index· of. 402 industrial, rail, and ·u tility
·.stocks.
··
J/ Prel1minary.
.•
~ Division of Researoh and Statistics.
\
.
.
.,
·.
. ·1.86
4
Exhibit
l'ercent distribution bf. net in¢om~ ~laaaee ot '
'b) n~t .ahort-t e:rm cap~tal g.aln , a nd
c ) statutory net . l~ng-ternLc&pital · gain ot individual
and taxa~le fiduciaries with n~t lncome ,_ 1938-194<> · · . -
· a l net 1ncom~ ,
.
'
.
Net 1ncome -cl a sses
(I n .t housands.
of dol,1ars )·
....
.
N.et
: · income
•I
~
61+.0 .
2a.6
5
25
50
100
100
" . 1, 000
1, 000 . and over
Under
5 II
25 . "
5!» - II
2:~
2 :~
All returns v1th
net income ·
100.0
lli2
Under
5
n
25
II
.6a~6 .
5
25
50
100
50
II
100
II
l ,OpO .
1, 900· and over
All r eturns
~1th
net i ncome
.
.
'
:
........_
:
~·0
. 2'
1 1~0
~ ..16
.l
100~0
100. 0
\
'·
~1. 5
21. 4-'
3J.1
12.49. 4-
2 . 44-.7
2. 7
Z.)
6.~
N.
.3
.1
6.3
1_00. 0
. 100.0
100.0
a-9
.6
I
1 { . 1+
· 194-0 . (..Preliminary )
. 5
25
.Under
II .
It
75. 417.2
J .41.9
- 1.8
5
25
50
· 50
"
l Ob
100
" . 1,000
1., 000 and over ,
.3
All returns v1 t h
net 1noome
f rea·sury Department
~1+ . 7
5. 2
10.2
4-.9
4-.7
.3
100.0
100. 0
Dlvfslon. of !'ax· Resear~h
100.0
Rarch 26, 1942
.)
.
18 7
Exh ibit. 5
l gai ns and\ los ses und er the Bri tish
Tre atm ent ot cap itaCan
adi an inoome tax
·and
t ot income
is bas ed upon the .con cepGre
The Can adia n income tax law
at
h
bot
n
i.
l,
era
gen
mon law . -"'n
it the
y
as developed b1 Eng lish com
onl
me
inco
e
abl
tax
in
ed
lud
inc
or .
ual
Bri tain and Canada gai ns are
cas
om
r
·
r
ns
a tra de. Ga.i
taxpayer is· l.leld to be car ryi ngtaxonabl e. The ..fol low ihg cas es, cite d
not
.Inc .,
isol ated tran sac tion s are
e ot Commeree Cle arin g House,ill
vic
Ser
Tax
n
adia
in the Can
~strate
o
als
es
atte mp ted . . The qas
dis tin c- illu stra te the d1e tinc tionult
~he
g
win
dra
in
d
tere
ies enc oun
the gre at pra ctic al dif fictax -ex
emp t tra nsa ctio ns.
tion -betw.een tax abl e. and
tha t
se of Lor ds hel d two
·~4~1~. The Hou
ing
buy
of
~~~~~~~~~~O~A~-~0~
e
pos
pur
the
or
e
a syn ca
from the ir
tax abl e on the pro fit der ive dThe
not
e
wer
s
tion
nta
pla
er
rubb
· bas 1s
.
them
el~
dev
ch was to
of
me
subsequent sal e . to a ·companygwhi
sche
ot fac t tha t the re was no thi s was
of the dec isio n was a fin din
~;
ti~
per
ing and sel~ing pro
P.rofit-mak1ng by means of buy
abl ish the
re wa~ no evi den ce to estin
the
and
n
ctip
car ryi ng
an iso late d tra nsa
d
r men wer e eng~ge
con tent ion of the Crown tha t - the fou
on a trad e.
3. Cal ifor nia n Co
e pur pos e o
or
n
s company w_a s orme
•
T. •
mines in
ed
cifi
spe
t icu lar cer tain
acqu r ng m1nes and in parer
or par t of
le
who
the
l
sel
to
ali a
Cali for nia , wit h pow ers int
from it the
ng
uiri
te a company for acq
the und erta kin g aqd to pro moltin
of ita
t
par
d
sol
it
g. In 1902
was .made .
Whole or par t of the und ert.a
fit
pro
A
.
•
e
anc
bal
3 sol d the
pro fit
und erta king , and the n in 190
was
d
lize
-- tha t the surj >lu s so rea
•
on the whole dea l. Hel d as
ss
ine
bus
of
rse
made in the cou
or the ·company ain oe- rtw
.'
\
,
('
\
_)
·.
.·
:..
. 188
Em1b 1t 6
1aa1on .on th~ . Inc~m~ ax (1920 ) ·
statem ent of the Br1t1a~ )RoJ.al Comm_capl
tal ga1na ·and lo aea
ot
ent
treatm
t~e
to
ct
w1th respe
\
na the profi ts '
•86. There are many categ ories or trana actlo
·prop er· subar1s1ng rrom which seem, t9 ~he ordin ary min_d ; emin ently
ed·
··charg
nt
·prese
at
Jects tor Incom.e Tax, altho ugh they .are not that
al
•annu
are
they
~ed
aaser
because 1t canno t be suoc e"stu lly
out
set
-ly'
erate
delib
may
n
persO
a
where
protlt &.' There . are cases
and
e
·incom
as
lt
prot
to make a p~f1t, may qul~e prope rly treat hls
er
great
btedly
undou
be
may
ity
spend 1t as lncom e, his t _a xable capac
the
be
even
·m&l
ga'1,.na
h1s
re:
ventu
his
because of the resul t of
ely escap e
reward of &er.vlces rende red, but yet h1B'- prot1 ts may entir 1
.
·
Income Tax under the prese nt l,aw~"
to the .
ttgg. . Sever al witne sses have c.alle d· our atten tlon·· ue
by widen..: .
reven
the
asing
incre
1b111 ty and the des-1r ab111_ty of
nt are
prese
at.
which
ts
profi
·
admit
to
as
so
1ng the doors or the tax
w
·narro
the
that
d
1sf1e
not regard ed as asses sable incom e. We . ar~ s~t
be
d
shoul
and
fied
Justi
be
scope of the exist ing charg e canno t
life the pres·e nt,
enlarged. We feel very· stron gly that at a time
whole class es of somewhen taxati on is nec..e ssar1l y high, to allow_.outs1
de the ,r,ange or
l1e
to
ns
times highl y pro_f1tab le trans actio
the resul ting
t~t
d
groun
ical.
techn
w
narro
the Income Tax, on the
longe r be perno
d
shoul
rotits are not of a recur ring chara cter,
of tbls
ence
exist
the
that
aware
11tted, and we have been made
lers whosetaxp&
other
by
ance
griev
real
a
be
to
1s :t'el t
are taxed to the full ••••• "
f
'
shoul d be given
s
power
such
that
der
consi
we
ral
gene
•90. In
wlt_h any oases
deal
to
ties
r!
by law a.s. would enabl e .the taxin g autho
t lon that 1s
ac_
trans
a
from
ng
arisi
its
prof
of casua l or nonre~urrlng·:
on the score
since
actio n,
prlma facie a prof~t-se~~ing busin ess transfor
exemp tion
nt
prese
the
said
be
ot equity pract i.call y ·noth ing can
of ·
es
~bang
ary
ordin
from
arise
that
ot these profi ts. Prof its
tax, but
the
of
·the scope
1nvestme~ts shoul d norm ally remai n out side
a
titute
cons
they
w~en
and
1!
·they should neve rthel ess .be charg ed
·
r~gular sourc e o.r J).rof'i t.
prof it made on a trans actio n ·
· "91. We are or oplnl on that any
i.e., a tran1 1actlo n ln whiob
n,
actio
trans
recognizable as a busin ess
t-seeki~, shoul d .
the subJe ct 'tilatt er was acqu ired with a view to prof·i
d not- be
shoul
and
'!'ax,
e
Incom
be brought withi n the scope or the
actio n
trans
the
~e
becau
ly
·simp
al
capit
treate d ae an accre tion ot
or
ess,
bu~1n
11es outs1d e the range. or ·the taxpa yer's ordin ary
y, in
likel
not
are
ts
profi
sue~
because the oppo rtuni ties or maltin g
Any
vals.
inter
short
at
or
larly
regti
occur
to
the nature or thing s
Joint
or
its
prot
SUch chargeab111 ty ehoul d of cours e exten d to the · by way or remun era•entur ee. We furth er consi der that prof it · ~isingbe
r~ndered shoul d
OP consi derat ion -for aerv1 cea rende red or to
ns shoul d
perso
ID&de liabl e in . all o•aea and emplo yers and other
c .
.
"
requir ed t;o make a retur~ ot any' au~~ p8Jm efltS.
.·.
_.
.
\
'
\·
I
. ..
1.8 9
J:zh1b1.t 6
(o.o nt1n ue4 .._ 2)
.
.
lea ses
que at1o n. ot tbe trea tme nt . ot ult
•94. The re· rera··a1n0~a ~·
in
res
'
theJ
n
whe
ch,
vtl1
ent erp rise s
n.
incu rred in tha t cl~
tio
tau
ot
t 1f1th1n the are a
rori t; we ccn side r sho uld be bro ugh
ce
wan
allo
d,
taze
t41 ot thi s nat ure are
~n cou ntrt e.s where pro tigen
t · R.ro t1ts ot the. .
era lly gra nte d onl y aga inst,.o
is
ses
(1! any·) for los
n inc urre d by
s ot thi s ' d:es crip
same ch& ract er. For eDm ple, · a los
·h18' sala rj".
on
ent
ssm
aga ma t'th e asse
a ·sal arie d per son ia not set ott
inst .
aga
ott
set
be
t the los s can
so long as- 1-t is -p roY ided tha.
tici ent
'sut
k,
thin
ve
.is,
re
the
s,
· sou rce
pro fits aris ing trom sim ilarve
ses
los
t
tha
ple,
con side r, · ror exam
ason· ror .thi s lim itat ion ;
inst
aga
ott
eat
be
uld not
rrom spe cula tion in investmen~sry ~ho
~ividends ; but onl y aga inst
or
,.
sala
,
fits
.pro
Ung
ord1n.a ry trac
l wit h
spe cula tion ... When we come l tobedea
d .
subsequent pro fits from suc htit.
roun
wil
it
D
le
s und er Sch edu
the bas is tor ass ess ing pro
riod
e
p'
a
tor
s
lcs
,
Ung
trac
a
forw ard. ot
. that we sug gest . the car ryin g pro
side ring
fits or the kin d we are contion
ual
cas
any
As
rs.
yea
ae to
of six
enda
DUD
reco
t
edu le D,' ·tha
se
·the
v111 tall to be ass ess ed W)d er Sch
to
ly
IY)p
lly
ura
nat
1
·1f11
los ses
.the peri od -tor car uin g torw ard
·
oase s.•
Source:
I!'loome Tax , 192 0,
Rep ort Qt the Roj al CoDUDiseion on the
p·a ges 19- 21.
, .
..
\
;
·'
-
.-. 0
en
7
Exh ibit
r
.
retu rns
a pit al gai n and los s on o
Sta tuto ry net lon g-te rm c'xab
1/
g-4
193
.
es,
ari
uci
fid
le
·of ind i vid ual s and t a
'
(In mil lion s .of dol lar s)
~
Cal end ar
yea r
1938
1939
1946 2/
Agg rega te 1938:-40
Ave rage 19~40
I'}
·.
.Re turn s w1tn net Income
:
~
·
:
All retu rns
--: - · Net
t--we
--;
Net - -: --:
Net
lance
:
~Ba
rm
: lon g-te
long-t~rm
: lon g-te rm : Balance~:· ca_p
:
oss
l
l
ita
cap
: lon g-te rm
:
i t .:..l gai n
: cap 1 tal gai n · : cap l ~lll los e:
331
"
13~
265
832
277
-257
-232
-2go
5g~
.
/ •
46g
545
1, 601
.
533
I
-769
-256
Tax Res ear ch - - -;- --- - -::: !rea aue y CDep artm ent , Dlv ls l on or
325
230
261
g15
°
-71
396
311
3g9
1;102
-87
-128
I
-287
'
271 .
367
1
-96
. . Feb rua ry 10, - "191JZ
0
0
•
St at1 at1 ca · ot I ncome.
1/ Sta tutory amo unts
-gj Pre lim ina ry .
'
Sou rce :
.I
../
)
.19 1 ·
.
.
·NET REVENUE. FROM CAPITAL GAINS irAX .
AND STOCK PRICES. JEARLY 1918·~ I ~
DOLL ARS
Millions
~
500
DO LLARS
MiJlion a
.
spo
/
'
'400
300
400
(
l
-
I
Net Rw.t!nue
(E8tiinat«<)
V
l.t
'I
200
~
.
100
-
.
0
,,. J
'
~~
300
200
n.
7 I\. ~
~
'·
100
I'
.
-·•
.o
.I .'20 '22 '24 '26 '28 '30 '32 3~ .36 38 40 .42 44 - I00
00
. ;.'I 1918
~
.
PE RCENT
PERC ENT
~
4
180
140
[)
100
~
60
~
~
~
~
I
~
180 .
of 402 Stoclcs'
~ Prices1935
~ '39 • 100
'
"
'
20
II
. lIV~
... """"
1918 . '20 '22 . '24 '26 ·'28
•
thrd and Poor'$
*Sttln
Olcoof~Socr*Jolllll T-,
-
.. r . _
1
If
\
.
\·
140
1
·so
1-.J.
~
~ '
.:s2 .S4
•36
~
100
~
~
.88 .40
·60
I·
.42
'44
~"2 ltklw fria/ Rail anti (/fi/it. y Stoclc•.
~ ..-v.
,veJC •
··
20
8·289
·\
\
)
192 ·
_ . STATUTORY .NET CAPITAL GAIN
AND STOCK \PRICES •.YEARLY '1918 ~ 940 .
\
DOLLARS
Billio
DO LLARS
Bil lion•
'
"'
.
/
5
rn
5
'
4
4
1.-;- Sta tUtory N~t .
Capital Gains
J
3
3
~ r+J 'I
2
.
I
0
If
~
~
.
'~
V
A
~
·~
"
~
"
'32
'28 ·so
'24 '26
1918 ·2o '22
2
Actu al Net
Capital Gains
(£$tl'matKI)
~
~ "'
.......
~ .._,_f-
-
~
.40 .42 ..44
~
38
'34 '36
PER CENT
PERC ENT
180
~
..
140
f)
100
60
,~ i'- ......411"
~
~
~
I
180 .
of 402 Stoc/c$'
~ 1'17Ce$19JS'J9 =100
.
.
140
1
.
/ .
\
IV
.·
.
1918 '20 '22
'24
'
l ·~
\
20
0
·~6
~
~
r
"
~
100
~~ ·
60
.'
. . . .
'32· 34 36 3~ 40
I
. '28 'SO
'42
.44
20
.. ..• .l'i
~
)
·.. 193 .
INDEX ·o F sro·CK ·PRICES, U.S. 'AND_ K.
.Monthly, 1927·~· 193f .
·
. ' ·19 . 9
'.·
-
240
_
220
States .:._ ~,_-l-'-+·"'..::::,__
Stoelcs
~'
Standotd i:tnd Poor# /ndfi)(
. -(JnitfKI
L..---
•
-+-- -__:___j:220
_
40~
1935-39• 100 .
200 .
ISO
. .
160
80
· 60 ~--~-~--~~--~~-----T~----~ 60
-·
.'
I
....
...
•·
.P..nf)
\\
I
.5
.
INDEX OF PR OD UC TIO N U.S. AND U.K.
/
By. Qud rter s. 192 8-1 932
PERC~NT
· PERCENT
I
"
~
·'
1 . ~( .· I
120 1
'
~
-
~
.1 I0 1
'
"
I
United Kingdom
~
1: /
~
I
1120
I
Ill o
Bd. of TraCie
.
100
I
.
...too
1924 •100*
. .
.
•'90
90
'
.
.
United Sta tey·
..
I
Fed. ReB. Bd.
'\,[
"- ~
1928 -'25•100"
'
80
. .
'\
70
. 60
•v I .~. .. .
_-.-"\
.
/
• j
501·.
I '
I
..
I
I"
I
1928
I
I.
I
'I
1929
I
I'
I
I
I
1930.
"Adju 1ted f'or S«no no/
. ... .. s.r., .. ... ,_,
-~'- -
..
I.
)
• I
'-
80
,
.
""
I
I
1931
'
I
I.
J
,.,
70
~
..
I
I
- ~~ ·co~
I~
•
1932
.
~
e:-•u
I .·
Y ·
I·~
..
195
-
.
TOTAL. NATIONAL INCOME
AND STOCK PR.ICES. YEARLY 1918 ~ 1· ~
\
"'
.
,n
70
j
J
~
·I t
~
~~
'r
~
Total /fqt!ana
II'~ Income
~
\
v
.
v~
,J
v
,
J
If
~~
'28 '30 '32
'24 '26
,
lA
I'-
'"~
1918 '20 '22
.. ~
I
I
so
DO LLAR$
Bi liona ·
I I I,I I I I ·Il
DOLLARS
Billio
'
I
so
\
I· ·
/
~
-
)
149
I)
100
.J.!
..
1
i'
J~ ~
60
~~
.....
~
~
~
140
-"'-.
.
-
\
(
'24 '26
PE RCENT
of 402 Sto cb '
~ Pric•s1935'J9 =100
'
~
1918 '20 '22
·2e ·so
t_
,)
~~
~
~
-.
. · •
;
.
100
60
IY
. . . .
·~2 ..s4 .36 38 40 42 . 44
,
antllJ ti/ify .Stock~.
*Stan dard and Poor• Index -_, 402 ./ildwfiial ~ail
.
OlotaltloSoa""Jtiii• T-,
~
180 .
1
\
20
'42 ''44
'34 '36 '38 '40
• PERCE NT
180
70
'
.
..
,
20
•
196
J
'
Statement ·o~ . Randolph _E • . PaUl , Tax Adviser
.
to the :Secretary of" the Tre?-sucy,
Before the Ways ~d Means Commlttee 'ot the
.
Hous·e of Re1'resent~ti"'{es on Mand.~tt)ry Join~. n~tur-ns
March 30 , 19i12
The question of re quiring husband and wif-e· ~7-ho are
living together to fi_le a jo int return and compute· tfie . tax
upon their combined net incomes ha~.._been 'fully de'bate.d.
over· t:he past year . The Tre~sury Department ha.'s given· 1. 1
careful study to all ~spects of .this· ·question . It has,
re~ched the condlt[sion_ that a mandatnry joint return provisiol'l:, · applicable· to all income of hu~band .and wife who
are livi~g together, snould. he enacted into lRW.
·
OTHER MA11TERS PERTAINING TO FAMILY INCOlliE
.
\
In connection with. our study o_f -tt1e taxati on of family
income, we have re ~exarnined co.refu:!.ly the entire p.r oblem of .
the exempt ions and cre<li ts allm·ted _under the income· tax for
the pur"?ose of taking int0- account the family stat~s._ ·_ In
view of the incPease s in te.x re.tes _which the present ·-s ituatio~ has n~c~s~ito.ted, ~e f~el that in som~ respects these
exemptions and credits· are .now inadt:ouate. We therefar,e·
suggest to the. Comm~ ttee that to achieve e more equitable
distribution · of the tax burdea, it w9uld be d~s irable to
enact the follqwing c·ha.:1.p;e s:
.
l . M.e dica.l Expenses--A O.ecluct'ion should be all(')wed. ·
for extraord1nary med1cal expenses that are in exc~ ss of
a 'sp·e cified nercentaqe of the fa..rnily is net income. · The
amount allowed unde-/:>.suc'h a ded-uction should, hmvever' be '
_lim~ted t o s_om~. specified -me.ximl:lffi amount .
••
•
t
• • •
•
•
~
...
Credit for .Depe?lO.ep.t Children--Th~ cr~dit -~~r
be. rev1sed l:o allow a cr.edl t !~r
of 18 and 21 who are in .attendance
at school.
·
·
3
Income --~~e re
\ · the .wif e ~;:.;:.:::.::.:~;..::..~.::;:;:.~...;:.:~:-::--::;.;;rr~~;,-Mo~u~se;;;ti0l d ·
expenses
aPe
pre ~e~t ~here
· 2.
~ependent ch1ld.r en should
child~en betweeru the ages
3Q-89•
.19?"
- 2
.(
deYote her full. time to the mainten~nce
the wife .is abl e t0
cf the home . For this reason, it. is suggested that an
additional credit be provided · as f ollmv.s : ··
''
.
There should. be allowed as a .,eredi t · against-. the
tax upon the family an amount equal to 10 pP. rc~nt
of the v1ife ts. earnings . Such ·credit, however ,
shoulC. not exc e·ed $100 .
·
·
.
........._
A similar. credit should be allowed where a ue rs ont
occupying th.e status of he.ad err- the fc.mily, · such'
E S a wid~w , works .
.-
- cOo-
\
.·
'·
I
.·
,. <::
\·
~
··-
1.98
·TRE~_SURY DEPARTMENT .
INTER OFFICE COMMUNICATION ·
I.
.)
secre t~ry·
TO
FROM
Mo.rgen·t hau
George Buffi ngton
1942
''
~·
/
, In accordance with your sugges tion , I intervie~ed
·company officials l ast week at the Federal Res~rve Banks in
the following cities:
·
·~
.Boston, Massachuset ts
De~roit; ·Michigan
C_l eve l.and , O~io
I
1-!r. Abbot lUlls accompanied me to Bos ton and was
nr esent at the interviews t here . He t hen went 'to St. Louis
a lone to c onduct similar dis cuss ions in order . to make 'the find- ·
ings in all tour d-istr.icts available to you promptly .
.
\
.
There
i s being
prepared a detaq.ed account of the
findings _in each of the four cities . _Wi thout excepti.o n , corpo~a
tion officials are r eady and anxious to cooperate wi'th the pr ogr am to finance the '"ar.
·
·
I n many i nstances the indus t i!iB.l · companies holding
idl e cash. balanc es h ave l-arge \var contracts and 1 t ;.s expec.ted ·
much of 'these fund s 1-rill be required for working .c ap ital. Gen erally~ _ insurance companies and othe r financial institutions,
other t han hanks \vh.i ch were not intervie'ITed , regard the tap
,
i ssues as suita~le media tor investment . Life 'in~ura.nce comp anies
are striving to earn tne 3% guar antee to p olicyhol9-ers but t here
appear.s·to be room in most portfolios for expansion in hol~ings
of Government sec uri ties . · ·
·
~lith one e xcept ion , the people i nte rviewed in · Boston
expr es sed the hop e t hat some means could be devi sed to eli minate
t~e nec essi ~Y o·f padd-ing subscrip-t ions- f or .Governl!llent iseu~s .
F~nance committees are ' being asked to approve exce~sive s~oscrip
t i ons to se cure r equired a llotment s . They all rea lize the s e
·
commi_t'ments may become hazardous . :
The automobile i ndus'try in Detroit h a s , some idle cash
out defen se contracts a ppear l ·i kel Y to absorb much 'of these !.und_s
after Jul y 1 , 1942. A substantial part · of their inventory in
pr oce s s is f rozen. The companie s interviewed r egard sto cks of
Itew cars in dealers hands as.· a contingent _liabili. ty • Final
liquidation of new cars will ease the si tuation however . As an
.• .
/
.' .
:1.99
- _2 .-
offse t · t here is a lag of thirty days or more· in p~ents ' e:..
cei1fed 1 fr()m _.t he Gove.~nment on. ~ome con~racts wher~as automo ile
manuf acturers have been accustomed to receiving payment in ' ~sh
for ne•-t cars s9ld.
, ·
· 'The situation in Cl·eveland seems to .b e· much ti~ter
than i n. any of the_ other , citie-s visited. lilost pf the companies
interviewed hav~ war oontra:ots . and a nwnb~r o~ the·m are bor.row.,;,
i ng at gre s ent OJ;" wi-l l require bank lO'Ms in the fut~r.e. · Several of the. steel companies in the Ohio district will require
addit ion~l bl a st furnace cap acity .this year.
Whi_le ' it may be early to deter..Jll,ine ·t he effectivei+-es s,
of t he payroll eavipgs plan, several people i ntervie\·led ex- ·
oress ed disappointme~t in the· ·results j;o dat e. · it appears -t hat
much of _the idle :funds _estimated t;o b e available -in certain industr ies i~ 'be ing abso~bed by h i gher taxea and · hi gh er labor _·
c.os t s . The op i nion was express ed t h a t if earni ngs of the se
companies ar e to b e re·cap t ured by t he Go:vernment t o finance
t he- \o~ar effort , a more intens ive drive 'wi ! l oe required to .i n. crease payrolJ:: s av1ng!3 • .
\
,_
~-
I
\
/
j
. )
..
-~
. ..
20 0
SECRETARY.
MEilORANDUM FOR THE
)
March 30 , 1 942 .
\
.
/
ead in the number · of ·those
· General tax l et ter s sti ll l of
cur ren t int ere st . The
s
rece ived , commenting on matter
, as aga ins t 13 pro rati o advocating the sal es. tax isof30a--w
ithholding- tax is:
. testing- it . The rat io in fav or
I
5 for it , and 2-agai nst .
es inc lud ing - tax
- Anti-la bor let ter s of var iou s typ
in the rat i o of 12, as
the Unions , no str ike s , etc . - are
r, .
economy . The lat ter , howeve
ag~inst 6 on the sub jec t of
~ny
of
tion · fee ling
are the mos t.v iol ent in ant i-Admini-stra
tha t we rece1ve .
\
ome tax pay ers .
There were 4 let ter s from small in~
ent in reg ard to
thanking the Sec reta ry for his stat em
~
lower bracke t tax atio n.
ents signed by te1 e· 6 let ter s and a number of staten;t
on pension~ .
phone employees in regard to tax atio n
ins t joi nt retu rns ,
_There_were 4 l .e tte rs of pro tes t ~taga
and on .thi s ma tter .
and 1 favor~ng_ the Admini str ati on' s
t the advantage ~eing
There wer~ 5 pro tes ts aga insthe
d to pay 1ncome
of
taken by small loa n compan~es from nee
men who had endeavored
t axes . There were 3 complaintsin connec
tion wit h income tax
to· use Tax An tici pat i'on Notes
era l compla int s of the
payments for the ir wives ; and sev
~otes , and re quest~
cumbersome method of cre dit ing the se
for simpli f ic atio n.
\
~
1
.
:
s would
Bond
of
rs
bUye
The f orm l etter ·aski ng wheth er
G were
and
F
es
Seri
on
incre ase ~hei r hol ding s i f ' the limit
most
al
In
··
.
es
epli
raise d, brou ght i n a gr eat floo d of r
move. ·Sumall case s , thi~ was hail ed as a prog ressgivemade
in the ·
bein
maries of the retu rns are doub tless
be of
may
s
ation
quot
proper offi ce , but the follo wing
inte rest :
)
suranc~
B. N. Carvalho , Pre side nt , Met ropo litan Fired Reas
in~
very
be
woul
Co. , Hartfo rd , Conn . ** * ·This Company
if
s
Bond
e
thes
of
teres ted in buyi ng ~ore :than tP.e $50., 000
such
for
s
the limi t were rais ed . We would use as fund ly we ·keep
purch ases , cash we have on 'hand which ordi. nari
tory prein ·-speci fied amounts in prot ecti on of our statu
s of thes e ·
mium and loss rese rves . Add ition al purc hase
ngth en
Bonds wo~d , in our opin ion, not on~y furt her instre
ncin g
fina
.- our Company , but would also be .of grea t help
y one
ever
what
our coun try's all- out war program, which 'is
.
of us is thin king of at t he moment ." ·
Cents Savings
Elle r y L. Voge l, Pres iden t , Spri ngfi eld Five
ibili ty that
Bank, Spr-i ngfi eld , Mass . * ~~ * There i .s a poss
ided we 1 had idle
this inst ituti on would be i~terested, prov
e in the matbalan ces , but the adve rtisi ng from your offic
e that
ter of sell ing Seri es E Bonds has been so effe ctiv
sits from
it has causeO.. a · cons id'e rabl e with draw al of depo
banks in t his.
this bank , as well as from the ' othe r savings over
t he idea
get
part of the coun tr y . We cann ot seem to
ngs ac~avi
r
thei
in
oney
m
r
.thei
e
that people should leav
U. S. Bonds , .and
co~ts because it is. alre aay inve sted in
s out of curre~t i~
· then proceed to .buy ~heir Defense Bond
turn ed, 1t , w1.ll
come. I feel that unle·ss this tren d can be
l~quidate our
shor tly' become neces~ary for us to begi n to Wl
thdra wal of
pre~e nt ·u. S. hol ding s . * ir * We have had a
January..
near ly $600 , 000 in depo sits sinc e the fifte enth of
.·
~gs B~I;lk ,
· ·Hilding N. Olson, Trea sure r, Naugatuck Savi
po1nt , '!e would
v1ew
s
'
stor
inve
an
Nau~atuck , Conn . * i~ *Fro m
pres ent t 1me
be 1n favo r of such acti on altho ugh at the
draw als by O';ll'
with
rmal.
abno
_to
d~e
\ We have no i dle balances
~nd pa~e~t of lndepos ffor s for purc hase s -of Defens~ Bonds 1ngs
, ~t would be
hold
our
ase
come taxe s . In or der to. i ncre
r 1nvestments.
·othe
our
~f
some
e
ne~essary for us to i iqui dat
'
/
\
...
I ,
.)
1
20 2
- 2 -
ge·r .. Bro the rs Company
. ·Raymond H·. Hoffman, Treasu rer , Ber
n wondered why so '
Phila.de1phi~, Pa. * * * We .have ofte
ds or any oth er Bon ds, .
much a.dv er.ti sing was given the se Boh
ry bro a.dcas t asks the
for tha t matter, on which nea rly eve
~ to· the · amount of· pur publ ic to buy , ~d t~en ~i~ts the
e and the lim.i t · ·
chas e. In our IIU.nds , th1 s 1 a IIll.l stak
us greatly tf this
should be withdraWn. Yes, it wil hilp
se add itio nal bonds
lim it is· rais ed, and we wil l purcha
b~e . ·We are unpromptly , as we· now have t~e money availa
materia~~ and nat ura ll y the .
able to buy our ful l lin e ofk,.
re it wil l lie in-· 1
inoney accumulate~ in the ban and the
chase GovernmentpUr
def init ely unl ess we are allo wed to
Bonds . ir * *
, Cit y of Wyandotte , Mich .
Lawrence J . LaCourse , Cit y Cl aerktime
when I was ver y much
;< ;c- · -1c- This let ter arri ved at
any more purchases of
disc ouraged as to th~ promotionmyof reas
ons ·for this atti tud e.
these Bonds , and I sha ll sta te
s. S.r eas ury Department ,
On December 24 , 1941, I vrrote the u. tive to Bonds. dated
rela
Divi sion .o f Loans and Currency,
er ,. we had .rec.eive!l no inemb
Dec
il
unt
up
May 1, 1941 , and
rece ived
January 22; 1942, an answer was Cur
t~rest on sam~ .
rency,
and
ns
from Mr . Wes ley , Chief of Div isio ntioofn Loa
to the
en
giv
be
ld
cou
·· stat ing tha t bef ore any . conside~anis h info rma tion as to the
payment of int ere st, we must fur
chase of the Bonds resow• ce of the funds used for the pur
. We~ley that in
fe rred · to·. · On January. 26 , we informebed Mr
pat rio tic and at the
purchasing the se · Bon~s we wish~dup to
and we sold oth er ~onds .
same time keep our inv estm ents se , fund
purchased Government
owned by t he city , and with the ed anosther let ter from Mr .
eiv
Bonds •. On F~bFua ry 28 we · rechav
e your let ter of January 26 ,
"We
te:·
quo
We ~l ey , which I
lett er · as soon as
1942 . * i< * We sha ll· rep ly ful ly to this
per~ ts ." I shQuld li~e
t he incr eas ing volume of .our wor k we
not be told why we
t o ask if the re is any rea son why Sercan
ie~ "G" Bonds , which
our
are not rec eiv ing i~teres t ont Nov
ember . And , how .can any- .
have b~en pas t due sinc e las
governi ng body of the .
. o~e be expected to recommend to the
y, the purchase of any of th1s
c1ty , or to any governLng. bodin
city ·funds , when we cannot
type of Bonds -fo r invest~nt
t . as tow ny we are not
get any answer from .the Treasury*Dep
Chairman. f or the Sta te
\ r eceiving the int ere st due. * * I eam
anc O~ficers' As sn: , a~d . I
of Michigan ·of the ~icipal Fin
tions 1n answer to ·1nqu1r1es
have rec ently made no reco mmenda
se of t hese ~~nds
from othe r members rela tive to the purcha ~ hav e*I *:;p orte d
fun ds. ~eithe
fo~ · the ir res pectiv~ sink ing ch
. (
1.ved .
.the par ticular- /tre atm ent whi we have r~e
\
-
)
_)
...
20 3
3
(
. Government
. ·Mrs . J. o. Moore , 'Boston~ Mass . * * -s~ ·For
see
I
, 15 ~limit as
Defense Bonds , the $50,000 for 1942
the Government's
te
ec~a
appr
it at. pres ent . We de?pl y
.
ton
h1ng
Was
at
.
fait hfu l , stro ng serv 1ce
'
v~~ · Savings Bank ,
Richard D. Lee, Tre asu rer, · The Dan
buy more of eith er
Danvers , ~ss .- This Bank should not
osit ors 3% . Many of
F or G B'onds as it is paying its dep
t ,upon the small
these ·are eld erly peo ple, sole ly dependen
obli ged to buy more of:
income !"eceived . If we should be idat
ing pres ent inv est- 1
either issu e , it would be by liqu
'
rate .
ment s that are yiel din g a more sati sfac tory
t Savings~ B~ , ·Boston,
Frank D. Lit tlef ield , Pre side nt , Elio
ly, at th~s poin t , tha t ..
Mass . ~• ir * It ·does not appear like
n ~f ·such annual purwe would be inte rest ed in an exte nsio
ed sub stan tial withtinu
con
chase ·un til the exte nt of the
for the p~chase of
drawals by our dep osit ors , oste nsib ly
., . The eve ntu alit y
ned
Defense Bonds , was more clea ply defi
liqu idat ion of
·be
ld
of c~ntinued heavy withdrawals wou es . the
ther e was a
Jf
our most r ead ily marketable securiti
fee l free , .a:nd
ld
wou
we
,
surc ease of the withdrawal demand hases of Ser ies G Def ense
would be glad to incr eas e our purc
Bonds ..
Nationa l Bene fit
M. G• .Kuhe l, Supreme. Tre asu rer , Slovene been wishing- for
has
Soci ety, Chieago., Ill. . Our Soc iety $50;00Q , which may be
it of
some time tha t ·the presen~ limand
G Unite d Stat es Defense
F
ies
Ser
in
y
uall
invested ann
'high er figure .• ~• -~~ * We
Bond ~ , would be rais ed to some
Defense Bonds not only
real ize to the fui les t exte nt · tha t the
h f orev er the
crus
to
off~ r an opp ortu nity fqr the U. S.
fre~doms so ably
four
the
e~emi e s of democracy, d~cency and
1de n:t a1;1d
Pres
by ou:
proclaimed in the At1~ntic Ch~rter
the f1n est
or
f
n1ty
ortu
.. Commande r-in- chi ef, but also an opp
trus t that
we
e
r
refo
The
.
and safe st inve stm ent i~ the world ent
higher
much
a
to
it
lim
tlie Government wil l rais e the pres
.fig ure.
·have fini she d paying rnw
Frank N. Hickey, Chicago , Ill • .Whene I bo_Jl
ds ~
\ '42 taxes , I wil l not have even thes
/
.• .
}.
.
_)
~.·
. (204
4
* .., *
figur~ ~
'
I . c annci.t
.
ng·
aini
rem
the
ng
as to how much income I may have duri
ahead, because the
u~t
j
r
yea
the
.
and
,
y~ar
months of. _the
inte rest ed and
business inte res t in which I am acu tely
trib utio n· to natio~e.l :
which is making a pronounced coned
not .only. by the undefense , is con tinu al1y thre aten
'tion , not to .be reso lved
cert aint ies o~ inc rea sing tax legis"la
by leg islation and adprobably unt il midsummer , but also
ous thr-eats to· the condQct
. min istr ativ e acti on which are serikly
, I am' unable to make
of any ~ndustrial bus ines s .· Fran
:s of any sor t unt il 1
any comm.i tments to purchase U•. S. Bond
bus ines s are bet ter
serious thre ats to exi stin g orga nize dcomp
lica tsd admi~istra
the
reso lved . The unce~tainties ofustr
ial Vlork ers to squ~eze ..
t ive effo rt , agi tati ng the ind
t he othe r side , the
the employers mor e and more , and , onpany
to give more and
effo rt of the WPB to commit oUr com
the war effo rt , ·
more performance to the. fur t.herance ofines
s , as ~ell as for
bus
produce tryi ng situ atio ns for our
a qhanging at ti-·
coun tles s oth ers . It is to be hopedeffthat
.
ort· can be secured
t ude and uni fica tion of government an · eff
,
eve
beli
.I
ld,
wou
ort
readily. The achievement of such
s
sand
thou
of
per plex itie s
go a long wff.y toward set tli ng the ord
inar ily wil ling to ·buy ·
are
who
men
s
of America n bus ines
gover~e nt sec~ities • .
/
Savings Bank of Utica ,
H. A. Hil sing er , Tre asu rer , Thethou
ght tha t the pres ent lim it
Utica ~ N. Y•• * -s~ * I have the
ead of any one year ,
appl ied to a six months ' per iod , inst
e accustomed to semi-a~ual
mi~ht hav.e a spe cial · appeal to thos
study of its cond itio n at
ba1a~c e peri ods , and the clos er
the habi t of
those peri ods . It migh t furt her -est abliofsh seri al ma~uri ties
plan
~Y~.t ~matic buying with . a def i nite
can be accompl1shed by
same
the
t
·1n m1nd. I an mindful · tha
by the fre·quentlle annu al liini. t, but a hab it is established
.
'cies o.f rep etit ion·. · · ·
Inst i.tut ion f or.. 7
Al fred H~ Has~ing s Presid.e~t ' .Springfi ~la· th'
.
' , Mass -. * i~ ·*May I . t~ke . 1s ?ccal)lon
Savings , Spri ngf ield
the
on
mater~al
· to comment tha t the more rece nt advert1s1ngcurren~ income,
Bonds from
subj ect of purc hasi ng s·e ries E of
cap ital or sav1ngs , apns
rath er than pas t accumul atio
bank to be having the
\pear~ from the exp erie nce of this
urge tha t ~he Treasury
y
l
desi red effe ct . * * ~We ·sin cere from
curr ent 1ncome ~ and we
c?ntinue ' to str ess t~e purchase
the same subJeC~ •
· Wll'l continue our loc al aa._.vert_ising . o_~
. ,Henry D. Sha rpe , Pro vide nce , R. I .
,.
...
·\
_)
205
- 5 -
Firs t ·N ati nal
R: A. Coll ins, A._~sista~t Vice Pres iden t, .The
e relig iou .1
Bank , Chicago I Ill. ... * I am sur~ 'that . thestrus
ts would
educational and char it~ble inst ituti ons and
*
a longer matu rity ·.
be inte reste d in. a Government Bond with the
pena lty. !or reand a somewhat _hlgher Petu rn, on which ·that
imposed
demption -could be made muc~ grea ter than orde rnow
t o. make
on ~he redemption of Serl e s G Bond-s.-' ·In ~ shou
ld be a
such an issu~ attra ctiv e to trus tees , th~r
by deat h, t he
provision that if the trus t is term inate dmont
hs rede·emable
Bonds would be in the ·s ever al follo wing
be paid seJRi - :
at par ,· and inte rest on the B~nds shOuldwith
t he inst i tu.t
annually. We are in such clos.e cont:act that y1e
beli eve we
er
lett
this
in
tion al funds refe rred to
tion of 'these
can speak wi t h full assu ranc e 'as to ·the reac
· Government
inst ituti ons to incr easi ng · the'ir hold i ngs ofaili
ng rate s . * * ir
Bonds at ~ somewhat bett er retu rn than p~ev
. ~~ ~ * T~ unce rtain ty
Lammot DuP. Copeland , W~lmington , Del the
1942 Revenue Act
that will exis t unti l the passage of
of cash requ ire- .
etlng
budg
any
precludes the pos sibi lity of
whether
Consequently, I cannot commtt ~self as to ~gs.
ment~ .
bond s .
savi
al
tion
addi
hase
or not I would be ~ble to purc
ing of the limi t However, in prin cipl e , I would favo r the rais
aifd ·might be able to take advantage of it. ~~ * *
, Uni t.ed Fuel Gas Co .,
H. A: Wall ace , Pre si dent & Gen . Manager of
s ~ I have enCharleston, W;Va . *·** In~ purchase ght Bond
the · Government .
deavored to ·pu_r.chase Bonds which I thou cipa
as F. Bonds
would desi re; that is , . t be F Bonds , prin capilly,
tal duri ng t~e
allow the Government the full use of allsfie d and
will ing to
12-year peri od , but I am perf ectl y sati es , rega
rdle ss of
purchase ant bond that our Government issu
allow me .
the inte rest invo lved , that ~ limi ted capi tal will
I
\
...
. ..
_)
I'
06
6' '
- : Genei1al_ .Comments - ,
\
J. D•. B:o?k 1 Winston Sa~ em, N.c. We Anieriq.ans respect.
your. ab1l1 ty. and integr1ty . We feel ·that: our Treasury
is in go o·d hands . We believe you will. do all ~n your· _
power ~o c.~n trol ·the ~aste ~nd unes_~~tial spending now·
preval ent 1n Federal exp!3ndl tures . ~very di me spent _:
should be -. te.n cents di-rected toward "Lickip.g the Ax1s"-.
'
.
.
-~
·F. B. Mundy , Wll'~.t~r Park, .Fla. When_Y,O';l declared upon · 1
a memorable occas_1on that you knew noth1ng about the job_
you _were _undertaking, you were . 100%. correct , and have don.e
nothing since to add to that record . (Com~l&ins re l~bor ,
ris~ng pric es , _ etc~) * o~t- -tl- Washington is a horrible mess
ancl everyb68.y knows it, and it is not only losing the war , ·
but fost~r ing disuni t~ . _
\
Fr anc is S. Murphy , The Hartford Ti mes , Hartford , Conn.
I am enclos ing a check for $100 which was handed to: me
by a man -of little .·means who wanted the Government to
have it. When I talked to him about it , -I spoke ab.out_
buying Def ens.e Bonds , and he told me that he had some, ·
but that he didn ' t want to buy Bonds,- as that wou~d be
selffsh f rom his standpoint , . ana he wanted to gi-ve this
-_to the Government . We had a little story in- our paper
Saturday ni g_ht which I - am enclosing . This man,. arr Armenian, -_
has been here a ' long time , and came over here· when he· was
a small boy. He has· been a -citizen for many years . He
wanted no publicity and he merely· wanted · to show his ap- .preciation for the privilege of living i n this country.
I thought you would be in.t erested, so here is the chec_k
· and t he &tory .
Silas . Blake Axtell , N. Y. C-. A. few years ago , I had occasion
to report to you under ~~gistered.mail , some _ ev~~ence that
I had of bootlegging ·on a farm adJacent-to m1ne _1n Orang~ .
County~ N•.Y. In spite of -the fact that the· place was ra1ded
- by the Fed-eral Government within 5 days ther~afte~, on the
4th day after. my l etter was .sent out, .~omebody having an.
.
adva_n ced. tip, moved into this farm .al'l.-d pulled out the s_t1ll .
\ and : other equipment -of the bootlegge:s ~- ~o apparently no
letter gets into your hands wi t~out 1ts l;>e~ng ope~e~ by ,, * *
somebody' -else first. J: .hope this--letter w1ll reach you. •·
'/
'v
•
>. .
_)
.'
...
..
.
7
..
,
-7
'
M. Shepherd , Winst~n .Salem, N. C. · I. wi s-h- to tha.nk
·and commend .ypu for the spl.en,di d wo~k you ar e do i ng on ,
the Joint Congr essional ·Commit tee on Reduction of None$sential Federal Expend_i tures . Regardless . of the fac~
that our nation -is .fac i ng the most c-r itical s-ituation ·
in· history , it is_ my hon~st:opinion, ')at our people cB.i;l ·
.meet ·an,d overc·o~e our ex1st1ng problems if you and· othefS
. repi:•esent~ng us. in ~ashington will continue to oppo~e ~11
nonessentl~l expend1tures by our Gov~rnmen~. '* * *
.·E.
.A. J . Ba~on , Pr~sident, Texas. State .Assoc-iation -of
1
Electrical Workers., Houston-, Texas . T1-e- purpos.e of thisletter is. to briefly comment on the subver'sive· tactic.s
of some -of the newspapers in Houston, and of some of . the
co~enta.tors , such as H. V. Ka.ltenborn, of the radio .
Mr . · Hob by and his wi fe , _who dicta. te the. po.licy of the
Hous ton ~ost , are av¢wed, de.termi.ned , and consistent
Roosevel t-hater·s arid l'abor-bai ters . They ·have e.arefully
des i gned a. program in th~'ir· newspaper ·an..d. are incl. ting ,
divi ding , and creating dissension amqng th€ people . : This
hysteria. , de-v eloped by vicio'\ls editorial and ~isle~ding
headlines condemning the New Deal and its· agenc i es ,~ an~ .
openly cri tici~ing our Government. officials in Washington,
.. is · very· disloya;L and · extremely dangerous at this. time.~·**
The effects of this insidious campaign o.n labor will have ·
a detrimental back- lash on our defense program. The working people · f~el , that without reason or justifi~ation they
have been sta.bb~d in the back .while wor~ing hard , long hours ,
··trying to do their p'a rt in our · national defense prog: am ~o .
supply their fell ow- members and loved ones who are f1ght1ng
the A._x is Powers . * ~· * C.ongressmEm and Senators are getting
co~fused , doubtful , and fearful of the weapon that ·the.se
·-institutions are. being moulded into and how they are being
misused ag~inst .theiJl. - -· ·
.'
\
.'
.·.
-
\
.}
)
~
·~
.. -
20 8
8 . .
)
Fav ora ble ·comments
~ . Tax at1on
'
C. I wan t .to expres~ .t o·
Har ry C. Bates, Washi,ngt on, D.
the fig ht you are making
you my sin cer e app rec iat ion for
eous
gram adopt'ed~ Your couragthe
t o nave an equitabl e tax pro
to
.
ing
tify
es tax is gra
figh t agains t· a uni ver sal sal
people for it s~ows your
an
eric
Am
vas t .ma jor ity of the
fin anc ial burdens of war amo: ng
de termination to spr ead the bea
r such "burdens . We lcriow
those who are bes t abl e to
sound economically , nor j ~stn
tha t the sal es tax is nei thefr ·i ght
you ar e· making , but eve
I app rec iate the
soc~al ly.
b prompts you to· make
more , the tru ly American sp iri t whic
it .
ch of All Nat ions and.
Charles Au stin , Minist er, TheMayChur
commend you f_,or the tax
Neighborhood House , ·N. Y. C.made forI the
yea r 1943 . It seems
propos als which you have
I am exc eedingly dis to me to be bot h fai r and wi se.
pos als ·mad e by the Nati ona l
turbed about the numerous pro
er gr oups who · ~ould .
Association of Manufacture~staxandandoththe reb y reduce the .taxes
have Congress lev y a sal es
t you to know tha t we are
in the upper bra cke ts . I wan
n· as pre sen ted by you ,
lending our sup por t to · the tax. pla
It pla ces an undue burden
and wil l oppose any sal es tax
on those lea st abl e. to pay i t .
.·
\
'
J
•
· .- 9
Unfa.vorabl~
'
C.oiiUllents .Q.!! .Taxation
E~mer Sumpter , ~ami, Flor~da ~ ; ha've .just looked over
your ~ew tax proposals . Am I be1ng t~xed or sued1 Once .
I .was. afraid of .bankru~tey. Later I .was afraid of inflation • . Then I · was .afra1d ·of war . But n(>w I .am a:fraia · ·
only qf you. Looking over your propos'als I do not .find· ·
any clau&eS· requiri~g me to send in a gallon of blood ·
·and al~ my ba.c k ·teeth . Is this · an oversi~ht? · This is ·.
th.e mos t complete work of its kin<l si~ce Correct Sc.alping".
by Si ttiiig -Bull, and "The Techzl:ique ot'-Pel t and Skin ·
· 1
Removing" by Buffalo Bill. Will you please arrange to
~ake the rest of our . moil~y? - No .on thE? ~ales tax.
.
Minnie Brazil , Oil ton , Okla . · ~~ * '' Mr . Morgenthau, $80 , 000
may not look like much money to you whe~ yqu are used to
thinking in terms of bi1~ions 1 but it looks like a heck ·
.of ~ lot of money tq· u~· little people out he re th.,at think
· i n terms of ten-cent Defense Stamps , so if its just the
· same t~ you, we would rather send that $8'0 , 000 .to the Jap$
in the form of lead pell~ts that f it a machine gun. I don' t
beli eve the ma j ority of t he p-eople need to · be kidded.. into
payi ng their taxes, and I don't beli eve Mr . Disney needs
.. it ~s badly as ·.it is needed elsewhere . · We consi<l:er it almost an i nsult anyway f or any .one t o think we have ~o be
·
kidded into paying our taxes . ~:- * *
H. D. Rums ey, · c~icago, Ill. · .(Telegram) · I respectfully
call your a t_ten ti6n to ·a Bill now being considered by the
House Ways ·& Means Committee , at your suggestion, which
intends . to l evy a heavy ta~ation on trust funds held by
corporati ons . Such a t ax ·iinposed .on the t rust funds of .
The ·American Telephone and Telegraph Company. would ~ffect
the future of nearly a ·million employees - w1 ~h the.::r . ·
families and · dependents , ·a .. to tal of three or four ~ulllon
people . ~" ?t- * Surely, MP. Secretary ,: to rob th~ p~ople of
their only sec~i t~ after · they ~ave wor~ed . m?r e tban 30
years does not seem comp!l~ible wi th ou~ Amerl?,an p:ogra~
for protecting the f9ur freedoms at th1s cruc1al tl~e • ·" "'~
Telephone c.onununications -are im}?ortant ip. our war eff.ort.
To attack' the s·ecuri ty of B'e ll ;:;ystem employees may weaken
~me morale in a vi tal spot • .,,. 1.;<- i t.
.
.
·
*
/
'
)
21 0
·"
- 10 -
I have Jus t r.eceived about 25 . .
. Sidney W. 1/..ay er, N •Y.C • .)B.
Grant , who is abs ent from
te.x not ice s .from Miss ·E.
as a sound- minded
t he city in sea rch of employment,ideand
to · send them to
bus iness man, thought it a goodng to ayour atte nti on the :
you -- the obj ect bei ng to bri t . You have expende~ I .
extr avagance of your Dep_a r t men
ort to cal lec t $1 . 94 • . Sevestimate , over, $100 i n an eff you
.lec tors , all to no
. eral cal ls have been made by ect riblco)
e at pre,sen t . You
avail.· Thi s amount is unc oll g pos
s~le in the way of .
have suggested almost eve ryt hinnal dol
lar s to meet pre sen t1
tax ation to rai s~ a few add itio ent wast es hundreds of
day expense s , the n your Dep artm
_.i s the re anything
dol lars t9 col lec' t a few cen ts. aseNowtel
l it to -me.
·mo r e inconsi stent ~ - if so , ple
. , sends_a copy of a tele J. W. Ful lan , Elmwood Par k , Ill
ti ng the ext ent to which ·
6ram r ece ive d by him _and ind ica
ani zin g aga ins t · a proposed tax
t elephone· companies are orgman
y let ter s , telegrams , and
on pension s . We have had
y one tlla t has quoted
pos t al cards , but thi s is· the onlegr
reads as f ollows :
t he req ues t for pr otest ~ The tel asuam
ry Mor genthau ' s~ pro-.
"Adoptio n of Sec reta ry o-f the. Tre
st Funds means t he end of the
pos al for tax on Pen sio n Tru
s is t he advice rec eived by
Bell Sys t em Pen sio n-P lan . Thi
D. C., by Pre sid ent
tel ephone today'f rom Washi ngt on, Pre
side nt of t he A.T. & T.
Vice
~rif fit h from C. F. Cra ig,
. Compan y's pos itio n is ·
Company , in qharge of ~erson, neasl. pre
sen tly word·ed , i nclude
that Morgenthau •·s pro pos als wil l mak
e the -cos t of mainBell System Pen sion Plan and
hib itiv e . It is urgent tha t
tain~ng the Pensi on Plan pro
pr ote st to all Congressyou immediately tele gra ph a shar pand
the Chai:mah of the
a,
me~ . and Sen ato rs from ~our are
and Means Co~ttee. Ple ase
·House of Rep res ent ativ e s , Ways gram
o thi_s off ~ c.e.: This
send copy of the let ter o_r teled now, t _and speed· 1s 1mpera;
l egis lati on is bei ng con sid ere th, Secretary- Tr~asurer .
t Har
tive . Let ter fol lows . Bertel
egr am is sel f- explan ato ry · · .
ve
-Editor ' s Note : The abo
e every
one Uni -on ' s !>t:otest, we lfl'~
In add itio n to the Teleph
n the
t1o
peh
·to
nds
fr1e
·member of the W. E. I. L.A. and the ir. del ay
to
ts
c
~
tr~
fro m th.e~r. ~is
U.S. Sen ato rs .and Congre ssmenpro
1l
unt
on
at1
po sed leg1sl
any act ion on t his i mport ant can
be heard from.
ed
olv
~ll .employees who are inv
,.
/
,
.
•,
-
21 1
- H
Fa:vorable.)Comments on ·Bonds'
. There .are many .
Miss Hele n Alex , Ma.d~son , .Wi sco nsin
- nat ura lize d c-it izen s
people in the . same s1tu at1 on as I ~nam·OlJI'
nat ive cou ntrf es·.
with rela tive s an~ frie nds s~ill fu·s~ of cou rse , sinc e
We all do what . we can - Amer1ca many of us woul'tl. like to
. this is 6ur chosen cou ntry , but
conquere~ cou ntri es ;
do somBthing for our peo ple .in: the
t not be pos sibl e .
Wou
and this . tho ugh t occ urs to me havel d..!_
them put in a common 1
for us to buy De~ense Bonds and
afte r the war? -tf- * * fund to &s. used for reh abi lita ti on for
use afte r the war ,
ked
If such a .fund cou ld. be ear-marlize
citi zen ry would b.e
·it seems· to me tha t the nat u,ra ad now
- and to the condo ing a double ser vic e , to Am~ric
quered cou ntri es lat er . * * *
Mass . On Sunday morn1mrs hal l W. Gele tte , South Dartmouth,
ette , ~ge five , atte nde d
ing, ~~ rch f irs t , Gra ntla nd W. . Gel
e~ch pre ced ing occ asio n
On
chm•ch ser vic e·w ith his fath er
n giv en hi~ in .the col he had placed the coi n whic h had , bee
withhel d the m<>ney
lect ion box . .This time , however he
t of hi m. His ·
in
when the col lec tor pas sed the box whif ron
to hi m: "Why
er~d
sp
fathe r, sur pris e.d, lean ed over andcol lec tion , Grantland? "
didn ' t you put your money in . the' fen se stamps·, daddy . " So
And the rep ly : "I have to buy
pai gn is rea lly effe ctiv e ,
you ca·n see ~ ..si r , tha t .the sale s cam
g its par t of the
ana the younger gen era tion i s shoulder'in
responsibil ity .
\
.
'
/
' }
. '.
21.2.
12 Unfavo rabl e Comments
J. Glenn Turner , Dal las , Texas.
o~
Bonds
If Defense . Bonds could
of i nc.ome tax es , l
be made leg al ten der f or the payment
con fusi on now
have no doub t tha t a great amountli~of.w?the
be done away ·
exis ting in the minds of the pubt sp1.r1.uld
Defen se .Bond
with , and you .would s.ee the mosthe pubted
ral ly . ·
gene
lic
buyi ng response on the par t of
·tha t · t hey or
pat rio tic
It is· not that the peopl e are not eff
aus
ort , bec e I am .
are not .in sympathy wit h the war sec~~O
o.f the cou ntry
cer tain tha t the peopl e i~ this ord , buth they are unc erta in1
are one hundred per cen t 1.rr acc to be made upon them fina nas tD the cal ls tha t are going ked out whereby all
cia lly and if a ·pla n cou ld be wor
be ava ilabl e as leg al
Government Bqnds purchased would inco
me . ta~es , I , personalTy , ·
S.
ten<!er for the payment of U. ter
for the Government in its
beli eve it would be much bet
~
revenue rais ing program .
ll neV er buy any more
C. F.. Murphy , Elk ade r , Iowa . I sha ht have known when .I
. I mig
tax ant icip atio n cer tifi cat es to
be of no ·advanta ge·... The
e
prov
ld
wou
they
bought them
l Government is so organponderous machi ner y of the Federahere
we turn .
.. ized , it imp i~ge s upon ~s everyw
ter has been asked a
W. W. Gass er , Gary, Ind iana . The wri
per mit ted to buy Defens e
number of times why ·banks are en9t
er cor por atio ns and
Savings Bonas F·.and G the sam as tsothto sel l the Bonds and
ins titu tion s . The Government wan
ks should not be ~iven the
· I can see no good rea son why bantion
s . I am sur e 1£ banks
same pri vile ge as oth er.c orp ora ir lim
it annually of thes e
could do so , the y would buy the
ings Bonds is cos ting
.Borids . ** *Th e sale ~f Defense Savcon
side rab le ~?rk is
e, an<l
t_he banks consid era ble exp-ensshr
an alarm1ng rate
at
ing
ink
involved . Bank ear ni ngs are
led upon for t~o hea!Y a
and banks canno t affo rd to bea~dcalwil
ling · to do ever~th1ng .
lqad , even tho'ugh pat rio tic
wer e formerly per~ tted to
within the ir power . -t~ * * Banks exte
~t of $10 , 000 1n any one
buy U. s . Savings B6nds to ·the
er cor por atfo ns , and I_can
cal enda r yea r , the same as othnot
be p·erml. tted to purchase
see no ceason· why the y sho uld l they
hav~ been . discri~na~ed
fee
\ the?·e Bonds . ~~ i~ * They now iate
your cons1.derat1.on in l1.ft1.ng
ag~1 nst , and I would app rec
th1 s disc rim ina tion . * i< ~~·'
/
'
..
.>
..
•
\
13 -
iona l Women 's :
Elisabet~ Christman, Sec'y.~Treas ., Naton~
D. c.· Thre·e
in~t
. ·Trade Union League .of. America, Washrrse
Sta ff ,
ings
lett ers to t~e Pre ss Sec tion , DefebecaSav
not use
can
e
w
use
aski ng tha t they do no.t send mats
ly been
rent
, have ~ppa
these in our rnimeograph~d bulleti~
ity~ .
lic
pub
of
·form
di sregard~d • . I ~m not aga inst th1s
ot
cann
we
hich
w
l
but agai nst was t~ng Government matserya
'te
was
the
into
make ·use of. Every time thes e mat gothe value of stamps
bask et , 'I fee l as if I am des troy ing
my reg iste ring a
and bonds . You wil l , I know , forg ive
~he only way to stop
complai nt with you , but I fee l it isar.e
doing all we can 1
wasti ng mat eria l . I assu re you we
, which means helpto aid -in the sa:le of stamps and bonds futu
re .
i nJ the Governm~nt and savi ng for the
. Ther e seems to be a
Rob ~rt Ferr and iz , Broo klyn , N.Y
ing Defen se Bonds
variance of opi~io~.regarding con vert
con vert some Defense
i nto cash . Should 1t be nec·essa ry to m
e ·complete and
Bonds into cash , wil l you kindly giveer meth
od of do~ng it?
spec ific inst ruc tion s as to the prop
tion s on the back of
·Please do not refe r me to the inst ruc
sult ed &eems. to have
t he Bond sinc e every pers on I have r con
er , kindly ~efrain
di ffer ent inte rpre tati ons . In you answ
. ~ simple , every day
f rom using com plic ated leg al terms tion
I pref er·. -t; ·* *
En&;l ish exp lana tion is the inst ruc
have an
C. 11. Burke , N.Y. C• . Many corp orat ions. now
ey is coll ecte d
employees ' ' Defe~se Bond purchase plan fundMon
a bank and
each week and deposite d in a spe cial in t hisin fund to pay
hel d unt il each employee bas enoughdoes not get to t he
for t he Bond des ired . Thi s money my own case , it is 15
. Government for qui te some time , in ~ of stamps mys7l~
hase
week s . Formerly , I made the purc
nt1a l Order , ?r Sli1U).ar
side
Pre
a
st
e
·
each week. May I sugg
be turn ed 1nto stamps
decree , req uiri ng tha t all such fundsbeen
deducted f.rom the
v:i t hin one week afte r· the money has
pay of the employee?
It is tota lly
C. S. Landis , Wilmington , Del aware . -rr *t {~such payment for
tha
usel ess to propose ·to most persons be
made to the Treasury ,
ose~
purp
Defense Bonds· for spe cial
e for use as the payee
and that such wil l then be set as1d
F tha t the , prese~t.
\ desi res . We have had 9 yea rs of PROO
duct a prac t1ca l
Adm inis trat i 9n is not only unw illin g to con
}
'
.
)
.·
. - 14 -
14 .
.
nt~y,
nistrat~on .of th~ cou
are
y
.8Jld sensib l e busin-ess a~
the
t
t the re 1s pro of tha
s
and of the war eff or t, bu
ult
res
t
ge
nsequently, to
t<Ttally ~ LE to do so . . Co
you wi lli ng to make ar- '
Are
other means are req uir ed leg al niea~~ ~ whereby prosp~c-:
r
rangement , t~ough pro penm
ent Bonds may be pe rm itte d to
ver
Go
of
rs
tiv e pu rch ase
companies
~he Tr eas ure r' of such
rcr aft ,
make p~yment d~re~tly dto A1
rcr aft , Douglas , United AiSte
el
_as B?e1ng , .Conso l1d ate , Ge
hem
neral Motors , Bethh
'
Curt1ss- Wr1gh t , ·Ch rys ler
and
wn
sim ila r widely kno
Unit ed S~ates Ste el Co ., or
be
uld
~ ce rta l'h you wo
CAPABLE armament fir ms . Iresfee
todayt
po nse . Our main concernbe
st'
ast on i shed at the pu bli cays be
The
a UNITED ?TATES .
is tha t the re sh all ~lw giv e the pu bli c an op po rtu nit y to
·way to ins ure thi s islieto
wi ll bri ng the be st res ult s .
inv est where THEY be ve it
obile
ding Se cre tar y, United Automize
d
Stanley V. Houch i ns , Recorrte
hor
~ut
, Ind . I have been
,
a
ian
1orkers of America , La -Po
Ind
,
din e Mfg . C.o. , LaPorte blem of
by the employ ees of the Mo
pro
ist an ce in so lvi ng ~
to seek your ad vic e and . ass
, the employees , are organized
considerable i mpor t ance . We
Ea rly in Februa ry, we voted
100% in the UAW and CIO tar y
ntinuous 10% pa yro ll dedyucunanimous ly for a vo lun Defeco
nse Bonds . We i mmedi at el
tio n for the pu rch ase ofto th e: management and were told tha t
.
presen ted thi s req ue st
wi th the req ue st at tha t time
the company co uld no t comlplytim es sin ce to gai n the cooperaWe have endeavor·ed sev eras ma tte r without succes s . On
The
tio n of management in thi
anded e. de fin ite .answer . ion
~
Monday , March 23rd , we dem
uct
". This vo lun tar y ded are verway .
answer w~s an emphatic "No
we
re on our pa rt , and
ards
a sin cer e , pa tri oti c ge stuatt
itu de of the company towPle
ase
muc~ concer ned ab ou t the
.
t
ve to the war eff or
.
er
thi s and oth er ma tte rs rel atiyou
att
m
.
can .re nd er in the
aclv ise u_s qf any as si sta nce
bacco Record;
r and Pu bli sher , The Tods·
Stamps
Paul Schle issne~ , Ed itoone
of your Defense Bon and was
te
Sauger tie s , N.Y . When
~s.
bad~y dama~ed , the e~ormo '' -~ it
?costi ng pla tes arr ivesd for
.
c1 bly brought to m1nd
·1n your Depar tmen t wa
your adreciation for pu bli shi ngcha
Bonds;
I rec eiv e let ter s of ap~
ar let ter s w~en I pu~ se
by
ver tis ing ma tte r, and s1rnil
d
she
"'l'he magaz1ne publ1
\al s·o · cir cu lar s of al l typ es .
'.
)
·.
15 - .
. y-our .Depa~tment f _6-r _g·e_ne~al . re_~der interest dese~ves
praise as a specJ.men · of th e, pr1nter '.s and engraver ' s
craftsmans~ip ~ but , a c_a reful. persori'al ·check,- up reveals
that it hasn ' t sold one additiona~ Stamp . ~} .*{' There .
isn' t a publi~her in the . country, I dar~ say ,. who wcrul9:
not continue to foster t he sale of J}onds and Stamps if
you requested it and explained that t his was being -done
f or the sake of economy. Please let me call. your atten~
·tiorr to the number of publications that have already·
been compelled to close . Were you to ..:.pay for your advertisements at space rates , you coulq llave them all
continued and the cost would not be greater t han your
promotion~l expense at present • . 'l'< {~ *
'·
/
\
\
.
\
\
•"-
,~. '7!.~
" '
'.
:,.;.
I
J.
TREA SURY DEPA RTME NT
INTER OFFICE COMMU NICATI ON
OOlfnD 1'UL
DATI!
M~ch
30, 1942
entha u
TO
FROM
Subject:
Mr.
/
ne s ·situa tion,
nding March 28, 1942.
SW!llll!l7
I
as a resul t
(1) Indus trial produ ction contin ues t o rise !he
autom obil;
tries.
indus
of furthe r expan sion in leadin g war
ties to
i
tacil
rting
conve
in
ess
progr
. indust ry has made rapid
period
rsion
conve
the
during
nt
lo)1Jle
unemp
and
ction,
war produ
s
Motor
al
Gener
The
has been much less than earlie r expec ted.mater ials at a rate· ot
l(ar
cing
produ
be
o
Corpor ation expec t·s t
tl,OOO,OOO,OOO yearly at the end ot March, as compar ed With a
rate of t6JO,OOO,OOO at the end of December.
'·
renewed upturn in
a
that
.
t
sugges
ations
indic
s
Variou
.
(2}
. way. · Cot~on
under
prices of basic commod ities is gettin g
cents a pound,
20.2
d
;eaohe
prices (10-m arket averag e) have
of basic
index
BLS
The
.
r
earlie
or
192g
the highe st since
t highs ,
recen
above
ateiy
moder
.rose
week
last
s
price
dity
commo
Under
are
ties
1
oommod
28
the
al though nearlJ two-t hirds ot
contro ls.
(3) .Farm lttoo~e i; Febru ary ran 4o perce nt above ye~season al de, e~lier levels , despi te ·& so~ewhat great er than
tly reflec ted
direc
is
se
increa
large
This
ry.
Janua
cline from
ot Commerce
rtment
(Depa
in rural sales ot gener al aeroha nd1se
corres the
above
t
percen
3g
~ndex), which in Febru ary atood
·
ponding month in 19~1.
.(-4} In ooapa rieon with the 4o peroe~t gain in. tarm inare
co"mes , . weekly earnin gs ot tactor y worker s in Febru arylevela
.
arlie~
year-e
above
nt
perce
24
been
have
o
estimated t
total
yed,
emplo
·
s
Taking into ·accou nt the increase~~ worker
over
factor y payro ll• in Febru ary ahowed a gain ot 39 perceotnt the
ning
begin
the
~inca
nt
perce
go
and
year
the previo us
·
defense program in 194<>.
.
.
(5). Depar tment store aales have risen to the highe st onal
.
point s~noe December, as' pre-E aster buyin g has. lent.radditi
levela
stimulus to trade . !he · aales gain over year- earlie
26
to
ately
moder
sed
increa
21
Karch
ended
during the week
·
·
t.
percen
.
I.
'
- .. -- ·-
,.
/
.
21
- 2-
Ipdustr1al produotion at new high
h
.
The FRS adjusted ~~dex ot' induatr1~ production haa ·
been advancing stead117 s1Doe last August, , but actual output
d1d· not rise. aboYe laat fall'• peat until february, when the
previous high • • exceeded b7 a narrow llli'g1a.. !he ac1Ju•te4
"indeX Of 173 iD rebru&rJ represent a a gain Of 54 perofn~ .
s1nce April 194o, shortly 'before the be, ilming of the cletense
.
program ~
Further gains haYe occurred during the current month.
Steel ·output 1n Jlaroh has moYed up to a record hJ:gh, and the
important 1nduatr1es c~pria1ng the traMportat1on equipment
group (including a~roraft ancl ah1pbu1lcUng) 1n. the J'RB 1ncleJtt
ot 1ndustr1al production are reported to haYe shown turther
gains. _
. Details ot the rise 1n industrial production s1noe last
November, before the outbreak ot war in the Pao1tio, show
t hat the war industries -- repres ented 1n ' th"e FRB index
l argely by transportation equ1paent, maoh1ne~y, a~ chemicals - ·have ·u.de extensiYe gains. .{See Chart 1.) On the other hand,
capacity limitations and oth~r taotora hav• prevented ·any
material increase in the eeasonally-aclj~sted output ot certain basio industries vital to the war e!tort, n~tably !ron
and steel · and non-terrous metals.
Automobile industrY converting tac1lities rapi4lY
I
A f eature ot the ,recent war production ettort bas been
the rapidity with which the automobile industry has been
. converting its production. tao111ties to war work. Both labor
· and Stat e Unemployment Insurance ott1oials 1n the Detroit
are~ indicated recently· that- unemployment due to automobile
plant conversion has been considerably less than had been
expected •
. As an indication ot ·the progress that has b.e en made in
converting produot1on, the General Motors Corporat1o~ reported
at the beginning ot lattt week that g6 ot: the company ·s 90
factories were Already producing war aater1als or were being
r e-arranged and re.a.tooled tor war production. It was t urt her
stated that b y the end ·ot t his month; the Corporation will ·
be produci~ war materials' at an annual rate ot $1 1 000,000,000,
as .compared with. annual rates of t63o,ooo,ooo at tne end of
1941 and only $226,ooo·, ooo in the t1rst q~ter ot 1941. Some
units ot the automobile industry have aaae· very rapid progress
on war ~ork. Thus the Buiok d.iYision ot General Motors recen'tly reported that it. was producing bom}.>er engine.s at a
rate origiM;llY planned tor next December.
'
..
.:
'
3Commodity prices continue upward
.
- ·Although .the . BLS -~~~oorkodlty index has ioisen more
out
flattening
a
t
o_
beoauu
~tly
weeks,
rec.el';lt
_gradually in
in prices of bas1c coiDllodit.ies, various indications suggest
that a more rapid advance ·u,- be in prospect. _The BLS price
index of basic coiiiilod1 ties· last week again moved aomevh&t· ·
higher, although ilearl)" two-thirds ot 28 collllodities in the ·
index are _under price ·ceilings or other c6ntrol.
- The a~tion ot agPioultural prices is again disturbing.
Cotton prices r;ose sharply laat ·week to the highest level since
1928 or earlier, the 10-aarket average rea'Ching 20.2 cents a :
1
pound~ Print cloth prices aocor~ingly increased under the
flexible ceiling plan. Wool prices &d-t-anced as. the ceiling '
on wool was r~vised upward. Butter prices turned sbarply UPward Saturday on a contra-seasonal and unexpected 2-oent markup in the Departmen~ · ot Agriculture's buying price. Grain
prices, led by soy beans, also. rose notioea~ly .at· the end ot
the week, with the action ot wheat prices apparently indicating
that the recent aelling movement has placed the wheat._ market
in position tor a renewed advance.
'·
The BLS all-commodity index in the week ended March 21
roae 0. 1 percent, and now stands 29.6 peroent . above the . pre-war
level of AugUst 1939 . (See Chart 2, upper section.) Since our
entry into the war, the index has risen 5.4 percent. Two-thirds
_of this rise occurred in the six weeks f ollowing December 6,
and one-third of the ·ri s e in 'the nine weeks ended Karo~21 .
- Cost ot living higher
The advance in wholesale prices continues t o be reflected
in a sharp rise in the co at ot ' living. (Refer to Chart 2. )
From early indications living costs ~ve continued t o rise
sirice mid-February. Food costs, which constitute on,e -th1rd o~
the average working man's budget, have advanced about 1 .1 percent in the month ended March 15 according to BLS sample data
on 18 foods in 19 cities •
.-
In this- connection; Mr. Dexter M. Keezer: Assistant
Administrator of the OPA, in charge of the Consumer Division,
said in a recent speech,
• .•• The simple tact is that today we are losing
the battle against inflation . Price-s ~e going
up all along the line and at a dangerousl)"
~cce~erated pao, •. ~. - !he records indica~e that,
as a ·whole, retailers ~ave e~eroise~ considerable
;
,
(.
\
..
-- -.
4'lhey , &long w1 th
whio~ are exer e•
toro
by
the rest .ot ·ua, ~e oaugh~
·
pric es. ·
on
sure
pres
rd·
upwa
s
ndou
. ·cisin g a treme
by
• ..• The natu re. ot th1.s · pres sure oan be indic ated
ians
civil
tor
lable
avai
lies
supp
the tact that natio nal
tart
mili
meet
to
h
mont
a
ent
perc
1,
~bout
are b'e ing cu~
lies in
need s, whil e money avai lable to buy these ' supp
inis
,
etc.
its{
prof
the ~orm ot wage s, sala ries,
a
up
sets
This
h.
mont
a
ent
perc
3i
t
creas ing abou
ly
mo~th
a
in
lt
situa tion whic h, lett a2on e, can resu
a
g,
livin
ot
coat
the
incre ase ot 3t perc ent in
ruino us ·rate ot infla tion .•
I
er
high
es
Live stock pric
.
.
of basic commodities
index
the
in
rise
the
While m~st ot
group -- cotto n,
rials
last week was in th~ in~ustr ial mate
hogs in the basic
and
beet
ot
es
print clQth , and wool -- pric
rt).) Hog price s,
Cha
(Bee
er.
high
also
tood stutt s group were
the \ war, have
into
our entry
which have risen 35 perc ent since cont
on hog
ngs
ceili
by
rol
price
recen tly been plaoe d unde r
.
,
produ cts.
re~traint in ra1 sing thei r price a.
nuou.s and unThe rise 1n cotto n pric es refle cts a oonti
t and civil ian
nmen
gover
fill
to
iles
text
prece dente d demand tor
acy of
adequ
the
order s, toge ther With some appre hens ion nover
f is
belie
The
s.
need
mptio
the .. new ·crop to meet pres ent consu
~aok as
tar
as
t
leas
at
ainoe
time
t
firs
groWing that, tor the
h to supp ly
the Civi l War, the tota l orop may not be large eno~g
·
t he n~eds q~ do~estic mil~s.
rtment ot Agri cultu re
The repo rt r;l.~sed ·last week by the Depa
·
that the natio nal
ated
orop plan tings tor ~942 indic
on prosp ectiv e cultu
lish new high·
estab
to
y
likel
ia
ral prod ucts
output ot agri
Poss ible
.
itting
perm
s
tion
condi
her
reoords~th1s year , weat
sho~ttened
threa
limit ation s on crop prod uctio n , however, areinten ded plan tings
the
ages ot ·iabo r and equip ment . Altho ugh suffi cien t to aee_t tully
(as of March 1) ·in most . oase s are not
they 'indi cate an incre ase
th~ Department'& war prod uctio n goal s,
ot 3 to 4 perce nt in tota l orop acrea ge.
OPA enla rges cont rol over reta il price s
ot CPA.' a conThere has reo ent.ly been incre asing · evidenc~
ot which
les
artlc
on
rly
icula
part
cern over reta il price s
to fix
acted
CPA
the
week
Last
t.
·eXis
ages
de~inite. short
dura ble
ehold
hous
on
s
price
retai~ prioe s ' as well as . whol esale
er ourfurth
be
1
1
w1·
h
whic
ot
1on
.1but
distr
goods, prod uctio n or
ns
ictio
restr
taile d or elim inate d in the near tutur e.-. Price
'
I
•
.
.
5-
-
were applied to washin g aaohin es, rad1ot and phOnographs h;
. aec~c
. 1ng and · cooki~g stoves and ranges .! vacuua cleane r•,
l ocic
aevera
Gn
on,
refrige rators, and type~i_ters. ~n add1:-ti
ers
retail
and
le.rs
~h9lesa
s1ona warnings have been given
against unwarr~ted price rises.
rarm income , tar above 1941 levels
In reflec tion ot .the sharp riae in price~ ot tara produc ts
·during the past year, tarm income bas .contin ued to run oon- . at
somewh
siderab ly.abov e· year~earlier levela . Thus, despit e a tings
•marke
trom
income
caah
e,
declin
al
greater than aeason
and government paymen ts during Februa ry totalle d lgg7 ,000 ooo:'
o~ 194i.
1
a gain ot 4o percen t ~bove the cor~~spon~ng mon~h averag
'
e
in
se
increa
the
of
e
measur
a
This is probab l7 also
gross 1nc~mes ot tarm operat ors, since the number ot farm
oper.ators has probab ly shown little change since last year.
·
(See Chart 4; upper sectio n.)
The ·markedly higher level ot ta.rm incom'e has, ot course , ·
,sales.
been accompanied by a heavie r volume ot ruraJ. r _eta11ran
3g perndiee
aercba
l
genera
ot
sales
During Februa ry, rural
grea~er
ly
~ligh~
a
showed
and
,
level~
arlier
year-e
cent above
than season al rise from the post·- holida y lull which occ·u rs in
January. (Refer to Chart 4, lower sectio n.), In conneo tion
kept
with the sharp sales gain above- mentio ned, ~t shouldto beprice
in mind that probab ly one-ha lt of the gain was due
increas es.
Factor y pazrol le at new high
Factory payrol ls are · cqntin uing t o · e~and., and ±~ ~ebru&rT
.
5, payrose t.o a new record · high. As will be seen in Chart
than 'the
more
for
rise
d
rrupte
uninte
rolls ,have shown an alaost
defens e
the
since
gain
the
ry
Februa
by
and
halt,
a
and
last year
.
t
·
~rogram qtar~ed in m1d-194o reached . almost go peroen
After declin ing aodera tely tor ) ~onths, factor y emplot was
ment in Februa r7 showed a small gain, althou gh the rise
that
·
se
disclo
will
5
less than season al. Retere noe to Chart
subbeen
bas
4o
m1d-19
sinoe
ment
employ
the· rise in factor y
la ·h ave been
stantia lly less than factor y payrol ls, ainoe ~ayrol
overtil le ·
and
rates
wage
higher
swelled .by longer workin g hours,
y
tactor
ot
gs
earnin
weeltly
e
payment s. As a result averag
attaine d
ry
rebrua
in
and
g
upswin
ed
extend
~
in
been
have
workers
new high levels • .
earn· ~ indica ted increa se ot 24 percen t in aTerag e weekly ooabe
may
year
last
ot
ry
Februa
over
s
worker
y
taotor
tngs ot
pared with the 4o peroen t 'increa se in gross oa.ab inoo~es ~t
tarm_e rs • .
. ,.
'
-. ...
~·
5were applied to washing Jilaohine·s, rad1o1 ~d phOnogr.aphs, hf, t:.
. 1ng and ·cooking stoves and rang.e~.! vac~ cleaners, .~aechai11o
ref~1gerators, ~d type~i.~ers. In addi-tion, bn several 000 ·
s1ons warn1r;1gs have been given "hc;>lesale:_rs ·and retailers ·
ag~nst unwarr~ted price r _
i ses.
rarm
~ncome , tar
above 1941 levels
In r.etlection ot .t he sharp ri•e in -pl"1ce·s ot ta:rm _p roducts
·during the p~st year, tarm income has .continued to run con- .
side~ably.above· year~earli~r· lev~la.
Thus, despite~ somewhat
greater than seasonal decline, caah income trem ,marketings
and government payments during February tot~lled tSS7 ,000,000:,
a gain of 4o percent ~bove the corr~spond1~g mon~h . ot 1941.
1
This is p~obably also a measure of the · increase. in average · '
gross ino~mes of tarm ·operators, sil\Ce the number ot f a rm·
operators has probably ~hown little change since last year.
( Se~ Chart 4; upper section.)
The ·m arkedly higher le-vel of farm inco1:11-e bas, of course, ·
been acco~~~:pani.ed by a ·heavier volume of rural r .e tail sales.
During February, r~al. sales of g.e neral mercha_n dise r'kn 3g percent above year-earlier levels, and showed a · ~lightly gr~a~er
than .seasonal rise from the post-holiday ~ull which. oocurs in
January. (Refer to Chart 4, lower section. )1 In connection
with the sharp sales gain above-m'entioned, ~t ·Should be kept.
in m~nd that probably one-half of the gain was due to pri~e
increases .
Factory payrolls at new high
.
Factory payro.lls are · cQ·n tinuing to · exJ>and, and. 1:~ ~eb~arr
ro se t.o a new record· p.igh. As will be seen in Chart 5, P.:Y-:
r'o lls.,have shown an alllost uninterrupted rise for .more than the
last year and a halt and by February the-gain since the defense
~rogram qtar~ed in mld-194o re~ched almost SO· percent.
~ter declining aoderately for 3 ~onths, factory emploYment in February showed a sm~l gain, although the rise was
less than season•l. Reference to Chart 5 ·will disclose · that
the· rise ~n taotorr employment sinoe mid-l94o has been sub- .
stantially less than tactorr payrolls, aince ~ayrolla ·~~ve be~n
sw~lled .by longer · work1ng hours, h1gh~r wage rates and overtime
payments·. As a result, average ·w eekly earnings ot. factory
workers have been in an extended upswing and in Februar~ attained
new high levels • .
· .&.n indicated increase of 24 percent in aTerage weekly earntng~ dt factory workers over February ot· last · year may be compared with the. 4o percent 'increase in ~oss oa.s h incomes ~f
farm_e rs. . .
'
/
'
•,
.
\ '.
-
6- .
I
.)
~
Department store sales higher
.. Stimulated by ~gh paJl'alls, scare · by.;ying and the
approach of Easter, departmen~ store sales i~ the week. ended·
March 21 rose t ·o tb;e highes.t levels siiloe .December. !he gain
over year-earlier levels Widened moderately to 26 percent
trom 24 percent in the we,ek ended Karch. 14. . (See Chart 6.')
While a ujor part ·ot the gain over March 1941 levels is due
to price increases, •erohants are report~d· to be gurprised -at
t he strong sales shoWing, since this year 1 s heavier income
tax payments were ~xpected to be a poteRt retarding influence.
A tactor tending, however,. to ~ake recent sale~ oqmpar1sons
~th 1941 s+ightly more favorable is the arrival of Easter one
week earlier than last ;year, thus .118.king .f 'or a slightly ear1i~r
sales peak. -
..•
. A survey recently conducted by the Journal of Commerce is
r eported to have disclosed that. retail stores are now Joining
consumers in the buying rush, despite the tact that most retailers are already heavily stocked With good:s. · rears of .
transportation d1ftio~ties are said to be a dominant factor
in the buying, although anticipated shortages ·in soae lines
has also been a factor. Recent buying of textiles by retailers
1s said t o have broken records ot m&ll7 years ·standing.
· Export freight tor South America and Atri.o a embargoed
.
.
Transportation problems, particularly those arising trom
t he serious ocean shipping .s ituation, continue to me~oe the
war effort and disrupt normal tr~tic movements. As a result
of the lack of ships, the Association of American Railroads
early last week placed all non-government export freight for
· south America via North Atlantic porte under rigid control.
· Suoh freight henceforth W1ll be permitted to move to seaboard
only upon the presentation of reasonable evidence that the
~pments involved can be moved .promptly from the~ port.
At· the time the o ontrol order was made public, the ·
assistant to the aan&ger of port trattio at New York stated.
t hat the action was ~&ken to avoid port congestion, but denied
that such congestion aiready exists. La~er in the week, oo•-mercial export freight destined tor South or last Africa vas
also placed under control and, ac cording to ·one press report,
ocean shipping space tor such freight will not be available
betare May at the earliest.
J
.·
\
(
\
'
\
I,
'.
.
)_,
...
"
130
1·25
I
'f I I
120
115'
110
lOS
i
,.,-v
I
I.
__c_j .
I ~X~~
. ' . . . ! ! J . ~·
I
:
! I
'
·-r
--
'
./ I
r-..
.I
I
I
I •·
.
.
95
.
,
I
.
.;
I'
F M A M
.'·I
I.
I
.•
'
.
.. •I .,
-...,..,.
.
.
\
.
:
120
I
115 '
•
'
110
10.5·
,
~
..
I
.
.
-
'
' .
I
125
.
1/
I,
•
.
-
J
I,......
Jll"-
.I
·.- y _,,, .,
'
.
11 ' ' 'l .
I
..1! I
,
100.
1
I
J A S 0 N 0 J· F M A M J J A S 0 N 0 J
1939
.
1940
J
100
..
'
. •
I
J A S .0 N 0 J
. 1941 .
-
F M ,_ M J
95
F M :A M J
194'2.
Selected Components .'
, .
1935~39. AverasJe .
an_d Feb. t942 ·Compared with
. Nov. 1941
PEA
CENT
Tran6portation EquiPfMIIt
...
300
•
-
275 r-------------~----------------------~~----------~
?
,,
2so
Machinery
'.
I
7
225
,.
1
~
~
.
4
200
175
ISO
,.......1
I
I
I
125 .
.
7/ /
I
7L
7/
~
L
/
J ' .
•
••
s:t:'
.
.
)
COMBINED INDEJC
Textile• ·
f=~ni
~
==~~~.;..,-
-
•
.
I •.
1"
:
~I
~
/•
lr--._ and St!el
~,. :Nonll!rrou• ~etQ/6 · ·
l.Hther, etc.
I
;
.
1
100
- 1935-'lt
• • -100
'( _ ~
_............,.,
..._,
............
~~
Feli. ·
. Nov.
·~·
1~2
.....
~
C·IIJ · C ·~
..
, -,. .-:I
~r ·
72 . :'
'
.. .(
I ' '
i ;_ ' J
I ! '
19'3(,
'
s~
. .eommoditie8, a.L.s~
.
.
' ' t ' ' I ; ' I ,· '
1937
I' '
I
i ' 1·, ;
1938
PER
CENT
I ' '
......., .
I' '
I ' '
I''
1939
I
I ' ' . ' ' I ' '
.
.
I''
I' ' ' '
1940
I
.. j -; :
· ·=
· . ]·
...
'
.
'.
I ' ' ' '· ' I - ' . ' ' I
1941
.
'
.
PER
CENT
Weekly
' '1()4
104
100
100
J96
96 .
I
·..
92
"-
889 Commoi:Jities, B.LS.-...
92
88. ·..
" 88
84
84
. , 80
80
76.:
.•
..
. 72
.
19..42
.I
....
.,.I
.!
=12
'
I
l
'
'
·I
.
I
I
..
'
I
76
'
·72
(
..
68
64
/ I I I ·1 I 1·· I I ·I I I .I 68
I l . ·1 I I.' I I I
., I
I 6 • . , I.
60
•P-1 96-C
,. 100 ·I,
I
.L,.l II .l.,..l II 1 I!JII!!I, 1,.\!,l ,.I.. .I 1.. ..I.. .. I,.l, .. l... I\' ..l.. ..lII
I I
JUNE <AUG. bCT.
19<41
)
!I
I
DEC. FEB.
•
I
A,R. JUNE · AUG.
19<42
OCT.
J 100
DEC.
I
I.."'I..;.J..·...I....:I..:;.I. ...',"''~.1 ,...,..
'140 I,;,hi •• I. ,,J, ,, .. 1..1..1 ..... 1. •••• 1. •••• 1.11!.1. ....
•
I)
zo 11 , '10 " . . • • . 7 • .. . .
DEC.
JAN.
FEI.
I II
I
.!9<41
..
19<42
.
7
..
..
MAR. ·
.-
-
"
PERCENTAGE CHANGE FOR INDIVIDUAL
1939 tO Mar. 2.7,1942
PERCENT
-
12
Fo~ltuffa
J-~o;IISZ.I%
12 foodstuff• '
+40~------------~----~----~--1
/"'
·/
~Of/ow111.61f.
/IV%
1201--------------...:....-~---:
.;r-:...._--~
./
~
J.IN'fl 1/tl.nt
~ -
+30r---~--------~~~~------~
""'""
tq1t
HAC
~- --9%
-~ ~ ~~nn
sol
./. '
IH1C
....
nn
li'.5X
..
···.:
'
,.
..~
604X
/~~
_;;............
401
::::;::aoo.,...........--1
~
4UX
1M
----+-s...-,. ....
o•
.....
·.IX
- ·10
M.~Z7
'
Dec.6.
1942
_..1
Mar.Z7
1942
J
16 Raw lndultiiel
16 Raw Industrial Materiall
.
M.r-.20
. 1942
1941
j.-~--
Materillll
•40r---------~~4----~
..
1 ;/•
\.
·.
<:-30
'
/
•to 1
...........rll....~......
+ ...,
.
_......--'\.
..---........ ..
.
~
._,
/
~
/
:;;a$ .
__
-•o~
·
Dec.6.
. ·~ ,._ ;.w-.. ~,.,T. _.... ,._ ~ .,. .._, _,,.,
.
- -
}
Vf!A,.i.
¢5 .
"' ~-------.
___:-,--....,.....---L---..J·
' .
1941
,·
·I
.
.....
1942
--
-·
·224
I
. Ch:r\ '
"
0
..J '
PERCENT
215 -
\
.
I
I
.
..
Rural Sales of
General MtrchandiH*'
Ullodj. .
r 1929-'31•100
.
j ._
. 275
' .
1-:;
:
. .
..
ftEIICDCr
\
'
'
250
.
225
~
•
'
'
.
'
I
200
19f11\
,
175
150
.·_ 1942v .
/
.•
125
. /,
100
'
-~
~
~
..
....-
V .
/
.......-:,a... <
.....~
...........
..........
.
.
eo
;l
2e
I
'
'/
200
v
./ I
I
/
""v 01940~_./
-'19-'9
~
... .
,.L
I
I
·~
~·~I
/
.
'
' '1 "/.
..
!1..
··,\........
~· ·~./
v
/
v
/
V·
/
:50
e
I
....·
100 .
~
..
/
/
15
JAN.
FEB.
MAR:
APR.
MAY
WNE
. MY
AW.
SfPT.
~
*Ill,.ill c.._._..,...,_,.#/..,_.,.,_.._,. "'-:-''-• ~ nn! --..
..... ................
Olllcle tl .. SecntatJ tl . . ,,..,
~
....
_/
NOv.
DEC.
75
FA C TORY
PAYROLLS
BMPLOYMB·NT •
f •· ~T 6 MoNTHS 0~ 1939
~
._
I
'·
J
'='
= 100, UNADJUSTED
·,
,/
Pf: ll
"
I
I
Ct.NT
r
I
I 9 3 9
~~--~
19 4 0
,- ,-..- r-·
: 1-
-~~-
1
i
..---.--r-,- n --: 1 -~ - ~~1941
- r· ·
·r - , .., .
1 9 4 2
1 '--,-1...--r" l
1- r r
Pt.a
C:t.IIT
I
;
I
220
'.
I
.zoo 1/
'
/
~
~~ I ·
j ·. y
1
I
,
'
.•
I.
I
' 200
l
I
,.
!<40
!20
I
..
-I
...
•
I
·~I
..
220
.
r
I
~
rt=
-
I
z
·.r.·I
'
I
t
la.J
t.
~···
.;
I::
I
I·
)'~:;t:?,..,_
... Y'·
'
\.
1.120
J
/
~
~
N
.J
.. . ,.
/
.J
I 9 4 0
s
. ..
I
N
) ..J
Sou,ac:u B.L.S.
...,.
........
04lou .. ,.. . . . . . , of .... ,,.._,'
~
~
I
I
I
.J
I
s
I
I
I
II
I
.J
I 9 4 I
I
I
.. ...
I
. •..
I
I
I
I
,J
I 9 4 2
I
I
•
I
I
I·~
'
'
c- 414
SYORa
DaP£RYNaNY
lt.JS ;._'39 • 100,
8£Laa
~JMDNsTm
!
t
I
~
rtA
CtNf
-1111 11
1111
I·
Ill
If ,
....,
1111 [1111
[1 1) 11,1111
111: [11 1111. I
\
/
240
I
i
220
220
-;
.
'
!'
I
.
200
I
\
189
..
100
.·· .
I
160
160
140
120
\:~vJ
.
1
.
s
!\\AJ~
~· \J z'\V
~ ~
\
•
. \ \'
; l
\
:
.
\
120
il
\
is
•.
100
i
I
eo
.1
l\.
f ' .
·..a
JJI il l I I t I I !hi i I
IIAII o
eo
!
1
w 'J
I filii I Ill! L I I I I
1
I I•
I I I I Ll I I I II ILl
60
MY
c - 390.
.
.
:F,i el d Trip · Rep ort . by ' Mr • . £i.qney G. · Tick.ton ,.
.
.
Marc~·. 31,
On Monday aft er noon; · Ma;ch 30 , ~ vi~ it ed Mr. Louis Kline
,
Vice President of t he Mo9r e- McCormac k Lines .Colonel H G ·
Willie.ms _, of . th~· War Department 1 s Servic e of Supply , a~c( .~ .
Mr . P·e:fta.ll, As s ista,nt Collector of Cus toms a t · the Phil adelphia
office , ·to di s c uss the movement fr om the Por t of Philadel phia
of. l end- lea se materi als for Rus sia.
. .
· ·
.
'
.
.
A aum~r y of· the dev elopment s a t P~~delphia a~ derived ,
- fr om my conversa tions with t he fo;reg~i ng. gen.t l em·e n fol lows: · 1 '
·
(1'). · Con sider abl e p r og J;'ess haS: been m~de during the pas t
· week towa r d ·imp r o vi ng the r a ilro ad . tra ffic situatio n in Philadelphi a . The number o:f fr eight .car lo ads placed on t h e ·ship s
at port wa s b r ou ght up· s harply during· t he we ek and i s exp ec t ed .
to be mainta ined at a higp l e vel as long a~ s hipp i ng ~ace · ~s
availabl e . .Daily loadi ng.s s i nce Monday , Mar ch 23 , follow:
\
139 .
Ilionday
March 24
l7g ' .
'March 2
Tues day
Wed ne s de.y March 25
I 96
202
MaPc h 25
Thur sday
249
March 27
'Frida y
Mar ch 2g · 252
Satur day
go
March 29
Sunda y
Monday· ·
March 30 . 342 .
/
. The small number of f re·i ght c a r s .l oad ed on Sunday was due to the
heavy r e. in s t orm th;;t t ext ended t hroughout t he· day . ( I have jus.t
· bee,n advis ed b y 1 phone t ha t :the number of c a r .loads placed. aboa rd
ship today , March 31 , vrill be l ow bec aus·e of r a i n t hi s morning .)
( 2 ) The for ego i ng fi g ur.es ·were e i ther ch ec k ed '"ith ·or provided
by .t he· Army officials a t 'Ph iladelphia.. The'se 6f~ ic1als st a te ..
t hat t he statement t ha t 4-00 c a r s '"ere l oaded on · a ny one· day l a st
v:eek . i s in er ro·r , .App~oximat ~ly this number of c a rs' :were
unl oaded on a number of days , but many of t he ca rs w~r.e unloaded
onto the doc ks for ·t empora r y sto.r age and not ont o t he sh i p s ·
.
/
.
(3) Six s b i p s . s a i l e d from t h e Port of Phil~delpbia las t
week. One more ship woul d have sail ed bad t he s tev edor es ·ne t
st opp ed wor ki ng tbree ' hours .befor e the ~qading was eomp~eted
Sat urda y night. · The -Army- off icer em dut y ·'at tJa.e pier made
·nu~erous eff orts on Sat.u rday a fternoon to get the se stevedor e s
t'o ext end t he i r wor k ing_ .daY .but he was not ·suc·c es.sf.ul . Co_l on el
Williams hop e s tc;- bring about ·an i mpX:?vement i n stevedo.r e
,
,
229
-2-
carefU l
cooper ation ·but he says 'that the job will requir e verythat
forced .
l'ed,
recal
is
it
,
le
troub
ore
steved
was
hardlihg. I t
cargo
n
Russia
ng
the l~itime Comm ission to move Ships carryi
··
. out of Boston a f~"' month s ' a go .
.
.
(4) Eleven ships a re expec ted to saiYf rom Philad eluhia be
there will
this week. I nclud ing the ships. that will arrive elphia
by
Philad
of
Port
the
in
about fiftee n ships ~oading
in
ng
~oadi
ships
y-four
twent
h
t
)d
s
This compa re
Saturd~y .
.
.
.
-.
,
23.
March
y,
Monda
1.ast
Philad elphia
I
for
ships
hirty
t
ed
assign
bas
(5) The Mariti me .Comm ission
Auril .
the Russia ns t .o the Port · of Philad el phia for the month200of, 000
and
These ·ships will be able to t ake .betwe en 175 , 000
tons o~ cargo . They will r equi re about 90 , 000 tons of , bottom
. -~ or ~bout 20 000 tone
cargo - - ·steel , t in plate , brass , etc
1 s requir ement s for bottom ·
week
This
week.
each
cargo
of such
s showin g
cargo are assure d , it appea rs , Colon el Will i ams.' reo~d
of
tons
000
,
24
ely.
ximat
appro
ining
conta
that 5S7 frei ght cars
.
ay aftern oon.
~aturd
last
it
ans
r
t
in
were
s
al
such materi
'
strong
a
have
ms
Willia
el
Colon
and
e
· (6) The shipp ing peopl
'l'he y .say
feelin g that cue t.oms pape r work should be stream lined.
i! the
port
of
out
s
boat
g
that they would be. assist ed in gettin
ship
plete
incom
and
ated
elimin
,.,~s
"
ration
"sh-ipper ' s exp ort. decla
pping
shi
ate
elimin
manife sts were accep ted. Any autho rizati on to
.Customs
papers .mus t come from Washi ngton , the Phil adelph ia
ther ein is
ed··
provid
ation
nform
i
he
t
e
offici als told me , becau&
, Lendment
t
Depar
ce
vomme~
,
ment
Depart
State
the
to
t
s
ef intere
as .well
,
re
Warfa
io
~onom
of
Lease Admi nistra tion 1 and. the Board
gton
Washin
to
ed
return
:C
When
(
·
.
tment
as to the 'l'reasu ry Deuar
sions
discus
that
me
told
,
rement
Procu
o£
or
Mr . l~ack , Direct
vustom s and other intere sted agenc ies
b etw~en Procur ement
with regard t .o the ~liminat:i~n of custom s pap,er s 'iere now under
way.)
\
(
)
.
\
....
'r .
.
,•
II'. ~ •• llaGabe
Dei'UV &d•tqSeV.t.r
ottice ot t..ad LeaR Mettilttftt.ioa
,1, - 22114 sv..c.,, •.••
1e.ah1DitQti,
.
I
.D.
Dear Stra
41 reQUMtQd 1D J OUl" ~ of. IUab 2l, 1942,
to the ~ctr.tarr of t.he 'l'reuUJ7 , . to.· P'rocv...\
DhilioD .• ill be TU,. · plMted '\o l"eDder all aftilable ~111\
~o 1a ~ purcbuiaa of-~ prenou.~ - cont.raot.ed
t or-ia tbe U,Dit.4pd -8t&WI bT tbe l•t.berlaaQ D1t ladS.ee. At . ·
· t.b. ~..• t;' t.1M " are ~t&t.ias wUh \bee tor the pUrob&ae
ot e.e. ~u.. .ad alao t.hft ooppni wbicb ther pu:rcbaaed. .
troa the -.raiAal m.!Me.
·
ad.drQe~
lfe DOte t blat it fe 1nt.nded tbat. t.!i.h ma"rial be
purchaatd at coat. I.t. tbil ...Dt t o be 'out ot pocket coet'
t o t he ~toh, auob u ato~e, cc.ilniou, eto., or. ihe ·
i DToloe co1t. of the ..~tall
.p
lg
..
. OUftoD l . 1Me1! ·
Dlnotor
o~ Pr~~~e.at
.·
'
.
\
OFFICE OF L£NP.LEASE ADMINISTRATION
FIVE-FIFJUN 22d STREET NW.
wASHINcTON. o. c.
"
March .21, 1942
v
..
.
MEMORANDUM TO .THE SECRETARY OF TaE TREASURY
Thoma~
FROM~
. , s·UBJECT :
B. · McCabe
J
/
:
Purcha8'e of Mat~rial Owned by the
Netherlands Purchasing Co~~sion ........._
I
-The' Netherl ands Purchasi ng Commission now
OYms'
or has con-
tracted for , in the UDited Stat~s. betwee~ $200 , 000,000 and
$ 300, 000, 000 of military and other material w'nich is no longer
\
\
required since the fal l of the Netherlands East Indies .
.
' .
The
Commission. 'is ·seeking to dispose of thi.s material at cost .
It is . out tho.ug~t that all material which
is
standard
\rith the War and Navy Departments
spould be purchased by War( .
.
and Navy at cost to the Dutch, and paid for- out of their
respective appropriations •.
With respect. to no~- st8.ndard military equi pment and other
material which can be classed .a!) · defense articles under the .
. Lend- Lease .Act , we propose that i~ should be purchased oy t he
Procurement ni~sion of tpe Treasury Department at cost~ th~ ·
Dutch, and paid for out of funds allocated by Lend- Lease • . It could
-~
.
.
then be hel d s~bject to t r ansfe·r to othe~ governments- under the
..
2
'
Lend-Lease ACt•
Vie have a.ske~ the Netherlands Pu~chasing 'commission to
'
.
.
.
supply ·us with a. schedule giving complete i)lformation concerni_ng the ma.teria.l and contracts involved .
~en
it has been
received1 w~ shall send it along to th; Wa~~Navy,{ a.nd '
I
Treasury Departments in· order that 't he classes of mate-rial
may oe determined •..
In the meantime, we woul d appreciate an expression of
your views concerning
t~e
proposed
puro~ase
by your
Departmen~ •
\
I
\
.
;
.
·;
. ..
.,
.
-
3 · ...
TREA SUR Y DEPA RTM ENT
INTER OFFIC E COMM UNICA nON
)
oA n Karch
Secre tary Korge nthau
TO
Mr.. lamar ck'
FROM
Shipm ent of Plane s to . Br1t1 sh Force s, Week End1hg
March 24, 1942
Subje ct :
Karch 24, 1942, a t_otal or 27g
1. In the week
t plane s) were shipp ed to
comba
(194s
.type
all
·plane s o~
Britis h force s.
2. : The week in quest ion is a recor d o~e ~n a number
of re spect s. Durin g this week :
I
~nding
a.
The large st numb~r or plane s ~r ail typ~s were
of
shipp ed; 27g comp ared to a week~y. ave rage in·
2
11
of
ge
avera
y
weekl
a
anq
~00 in 1941,
1942 to ' date.
The large st number or combat plane s were
shipp ed; 194, or more than doubl e the 1941~
weekl y ·avera ge ·or 70, or the 1942 weekl y
avera ge of 94.
c. The ·larg est · number of Lockheed Hudsons .(56)
. and of· .Cons olida ted Catal inas· (12J shipp ed.
in any one week were sent out in this pe riod.
b.
in the .categ ory •To
3· The plane s previ ously included
s: week 's
t he Fo r~es il') Russi a• have. been dropp ed fromanthi'
they are
use,·
Russi
for
are
statem ent . Since these plane s
-.
includ ed in the fig.u res ot Qur expor ts to Russi a and, there
fore, do not belon g here.
.addin g
4 . . Develop~ents in the . war have made necesssary
India .
in
force
a new categ ory· plane s sent to the- Briti sh
sent
were
s
ghter
fi
et
Kartl
an
In the last· we~k five Grumm
to
sent
ously
previ
lets
Mart
nine
the
to
t her·e . These , added
n
India
sh
India , makes a total of 14 shipp ed to t he Briti
f~rc es.
\
.
'
_)
'\
Table A
-
- 2 :.
S~i1p~ente
by Area · .
Week
Total ;Shlpped T
· 1n 1942
to d.at-e.
End1n(
~ar.ch 2 ,1942
42"·
\.
Light and m~diu.m bo~bers
Heavt bombers
Naval patrol bombers·
Pursuit
Arri'ry Cooperatio~
Trainers
otal to the United Kingdom
47
9
0
42
0
67
14
g
470
30
· /
1,.22g
·us
110
·7g1
. 61
___g_!i
__o
:__Q.
9S
5S9
2,322
-""'
I
Lii!'ht and medium bombers
·Heivy bombers
:Pursuit
Army Coope.ratlon
Trainers
Total to the Middle East
Light and medium bombers
Heavy bombers
'Naval Patrof bombers
·
·
P.ursuit ·
Trainers
Total to · the Canadian Forces
ish P
-Li ~rht and medium bombers
."Naval ~·at.ro1 bombers·
Pursui
·
Trainers
•
Total to Pacific Forces
Purs·uit ·
Total to Indian F.orces
Light and medium bombers
Heavl bombers ·
Nava patr'ol bombers
Pursuit"·
Army .Cooperat ion
· Trainers
Totals
17
0
'
1}7
0
155
12
._A
.0
__o0
17
467
5
1 ,00"3
12
_!.5Q
"3 12
1 ; 637'
.\
4
0
12
0
__M
' 19
1
23
30
~
. _gQ2
. 1g7
1
31
72
1 ,·450
1, 7·41
2S2,
100
g4
0
60
26
0
32
179
2~~
_!.Q2 .
_Q
_:_Q
144
51!
~
__2
5-
~
14 .
2,~~! -
-3£~
94 .
9
12
79
0
_ S4
.3
729
1 g
2 ..,~
._au
1.122
1~2
1, 341.
27S
·.
Table B -
Shipm~nta
by Types
Week
Total Shipped·
1n 1942 ·
to date ·
~nd1ng
March 24,1942
11
A1racobra
23g
4'
3
5
24
29
0
0
16g
10
10
0
/
700 .'
6
31
11
16S'
32
249
0
0
631
544
0
0
0
0
0
'·
32
12
Catalina
Liberato r
i ss K1ttyhawk
Tomahawk
as Boston I and. II
Boston III
enn Mart in Baltimore
Maryland
•v~;:~.u,~: t
d Hudson
Lightning
Ventura I
Ventura Bomber
t ee Stinson- 049
Grand Total
S2
410
54
1 40
0
20g
150
5
19
60
56
127
1 , 097
3
3
12
12
23
23
47
944
31
220
300
0
0
5
7.4
75
0
0
50
0
10
14
0
Ch~eapee.ke
\
0
·o
21 .
I
1 00
.17
0
American Harvard II
Mustang
10
S6
0
-.uii~>vJ. 1d~ ted
392
6, 253'
All Types
\
.,
'
\
'
_)
-~
:
...
.,
Tabl.e C
-
•
r
.
Januar y 6,19~2
Ja nuary 13,1.9~ 2
-Tanuar y 20,19lt 2
'Ja~:tuary 27; 1942
Februa ry 3 , 19~2
Februar y 10,19~2
February 1 7, 1942
F.e bruary 2~, 19~2
March 3,19~2
March 1 0 , 19~2
·March 17, 1942
March 2~, 1-9~2
,
....
.•
-..
'
Plane Sh.i pment s to t he Briti sh by Weeks
.....
Li ght a nd
medium
b'ombt9r g
e ekll Averag e
t ·sh1pment .s
1n 194;1.
-
·Heavy
bombe r s
Naval
pat rol
bomber s
Pursui t
Army
Coop erat1on
,,
i~
.
.-.... --..,.....-
..
•
..
"
. Tote.l
Traine rs
.. '
'
2 .2
36
24
~
" 24
9
33
;t2 .
33
26
29
34
~
.
I
I
0
0
0
0
0
0
0
0·
0
2
l
_2_
/
2. 7
5
~-
0
1
3
3
2
2
1
0
0
___ll
.6
2g ·3
30
5g .
14
100
10
~i
g6
go
7g
94
___l!l
4
0
0
~
0
7
~
1
g
_' o_
.
30 . 2
100
9
42
"60
13
72
105
g2.
143
. 30
99
62
. 129'
113
110
1"37
27g '
..
I
4
4
0
1
0.
0
0
~
.
Total shipme nts
·since Januar y 1,
6,253
· 1,.729
73
2,09g
16g
124
2,Q61
1941· to date*
.
.
~
\~'\
.
..
.
.
prior ·to March 17A, which Are not listed
19~2
~"
ed
shipp
ft
aircra
few
a
e
includ
• .. These totals
or. the data, Lend-'L ease ai'rcra ft
ource.
s
the
by
e
in the weekly figure s . Due to a mistak
corre ction bas now been
flight delive ri es were no~ includ ed i n the weekly s t a tement s. The
made in the ' tota~s.
/
r
'
.
.'
TREASURY DEPARTMENT
C .ss Chaunce1
"
f'Of
t
INTER-OFFICE COMMUNICATION
.
.)
March
DATit
,i ·
30.
Secretary Mor genthau
TO
.
...r
.
ST~I CTLV .C0NEIpEN rIAl
).t r . Dietri ch
Official sale a· of :British-owned dollar securi ti.e s under the various :Yestorders si nce .Feb~Y. 1~, 194o :
·No; of. Shar~ s
Sold
$ Proceeds of Nominal .lralue
· Share s Sold
of :Bond·a Sol d
$Proceeds of
· :Bonds Sold
-500
500
. ;9
10
11
12
13
14
500
Sales from
· · Feb. 22, 194o to.
Mar. 7, 1942
q, 84],610- 1{6
281 , 858 ,163
45; 647,516
281 , 858.163
45,648 ,016
1
•
•
Sales from
Feb . 22, 19llo to
Mar . 14, 19 42 - 9 ,84]. 610-1/6
31 , 474,216
~J
I
.'
\
{
'
/
.·
..
I
·yo~ Yiss Chauiloey ·
TREASURY DEPARTMENT
INTE~F'Ft<;:E COMMUNICATION
__
)-
March
DATE
TO
.30, 1942
Secret~y Mor genthau
Mr. Diet'r ich .
\._
·sTR.lc'rLv·coN Flo EN·T1AL
Official ael'e s _of British-owned dollar securities under the Tarious ·vestorders since· February 19 •. 19~:
$ Proceeds of
$ Proceeds of
Shares Sold
Bonds Sold
I
'Total
500
\
,,
500
500 .
Sales from
Feb . 22 , 194o
to Mar. 7. 1942
261,858,763
Sales from·
Feb. 22 , 194o
. to ~~ar . l4,1942' · 281;858,763
37, 473 . 716.
·-----
371 lq4 t 216
319,332,479
/
319,332,979
319, 332,9]9
$ proce.eds of non- vested seolu-i ties· sold:
800 , 000
Mar . 2, 1942 - Mar . 7, 1942 .
$proceeds ·of ·non-vested securities sold.
Sept . 1, 1939 - Feb.· 28 ,. 1942
$proceeds of·· non- ve11ted secV.rities sold.
Se'Ot. 1 , 1939 - l~ar . 7 , 1942
243.900 ,000
244, 700 ,000
244 1700 1000
' 564 , 032,979
GRAND TOTAL
61125
42
123
102,938 .
$
Jan. 7 , 1942 - Cash Dividend on 156 Shares
Jan. q , 1942 - Partial .Liq_uidating Dividend;9 Unit s sold .fr om Aug. 18 , i 941 - l(ar. 14
1942 for .
11 Shares Stock Dividend s old Aug. 18, 1941- Mar. · l 4, 1942 for
56 ,007-Ri~ts ~old from July 24 , ~941 ~Mar. 14, 1942 for
~·
..
/
..,...-
~
. ·-.-
~
...--- .
~Q~!.
OOTGo·nrG .CA.BLEGB.Ul
I
Stabili zation Board of China
Chungking
No. 4
Your Nos . 3
\
a~d
4.
Pa_vments
m~~
Federa l Reserve Bank of New York
..
.oo.
ai
61.25
42
l23
-
.938
\
•
'
,
'I
Karch 30_, l942.
"
Llr.
L·~ve~ey
Mr. D. 1f. J3eli
Will
~ou
/
please send the following cable to the American Embassy,
'·
Chung.lting,
China~
I
IIFrom Treasury :
With . reference to cable No. 101 February 14, 2 p. m. ·.
and. no. 170, March 13, 11 a.m. plea se advi.se
~he
9entre.l
Bank of China, C4ungk1ng, . that its designation as . a dep~itary
of public moneys of the United States has now been extended
-f urther to per mit t hat bank to accept deposits
accounts
~o
ana.
maintain..
the official credit of John Carter Vincent ,
disbursing officer for Division of Disbursements, Treasury
Depar;~J~ent, . or h is successor in office. 11
\
EDB:e-ri 3-28-42
COpYibj
. ... •
3-30-42
1
TEI£GRi~
SENT'
. )
Mnrc~ 3~,
NMC
Tnls tElEgra m mqst bE
pnr o._phra.S Ed bEfOrE bEing
comntun1co. tad t o n~yon.~
othEr thnn o. ·GovErnmEnto.l
agEnC Y~ (BR)
l
1942
p'• nt~ .
'
/
. C·HUNGKING j . (CHINl~ )
I
. '·
'
--
·. From TrEo.sury • ·
FEbruary 14,
?
\
p;m • and no . 1701 March
·13~
,.
11 a ; m•
plEnsE_nd:visE thE IJ.entrc:1 Ba nk of China , · Chungking,
.
-
that its dEsign~tion as a dEpo~itary of public
·· monEys of thE UnitEd StatE s has now bEEn ExtEndE.d
/
f urthEr t ~ · pErrJi t tho t bank to ace Ept dEposits
::.1 rid mni~tn 1n ~ ac.coun ts to fuE offic io.l .crEdits ·.
of · J o}ln Car.t rr V1nc c:n t, disbursing officEr .f or
Division: o f D~sbursEmEnts 1 TrEasury DEpa rtmEnt ,
.
.
or his 'succEssor ·in offic .E.
END QUOTE i
VIE LIES
I..CTING
(FL )
.FD : FL:BMcB
.·
\
.• .;
-. .
..)
'•:
..
I
In reply ·reter to
7i 74o.OOll3
. March 30, 1942
~o~an Yar,
... 1939/3~ . ·
'
.
..
'
I
!!!he
Secr~tary
ot
Stat~ preeent~
his
c~llll>l1mente
.
to the' Ronorab1e· th~ Secretary. of
and
. .the Treasury
..
tran81Di ts herevi th
~aphraeed
copies· of · telegram · '
. no.· 1350 of .March~. ' 1942 from London, concerning
\
German attempts to obtain control of business 'proper~
·· ·
tiel sitUated ' in occupied countriee of Europe• .
I
Encl~surea
From Lonaon,· no. 1350,
March 20, 1942.
.·
\
eh:co-py
3-31...42 ·
L
\
:-
..)
\
P~
:rRO~I
OJ mwcpjv DJfit•
.AJ(INBJ,SSY• J.oll4oa
DA!IDI .. I March 20,
NUMB~Ra
1~. 10
p·•.:.
...
i),O
Pr•I1DI&b17
With an 17~ to· thelr poaition',
at
~ aoD.ference . · ~-
cording to .the ·Bod Of !reA~I I fra4i~ vi th the • • ·hanoll, then i.~ ·
ev~~ence of German attempt• to obtain control OTer the buaineae prope'rt1ee
Qf the .Ul~ea vi thin ·~l'llall coa \rollet. hope . throqb . lqal . •an• wheneTer.:
Developaenta condcleret as ~onf1ra1Di; thh Ti~
ae follovaa
.
tlie'
are.
'
\1) !be purc~ing of outetan41D& boDd.e .in the u'Jihed S~t~e ·f~r
destruction or. for 1,!111ggl1ng into .Gel'JII8D7·
which te
·eetablimed factl
.
an
I
.
'
.
.
.
.
(2~ The tranefer to J!ll~nc~ ~omine•• of Br~ tilh 'bulineu. Pl'~Pertiee in
_.,,._A·- AA• '1. G. RlUltley aD4 PB:laer, maAe coJIIP!lleory . by . a Gel'II8D de~rH; ·
(3) The ·ae~ purcbaee of aa maD1' propert1et as posdbl8 legallf ·~vn.a .
by retugees and locatect 1n ·o~cup1e4 ·territorial of which- .u:t!ieient evidence
exists to conTince the ~r,_ tiah; ·
·
\
··
(4) .The alleged attempt tom~ two monthe ago to force' the a8le to irench
. ci then a of propertJ' in hance belonging to A. Hollander and Son of lew York
City;
.
.
·
·
. ..
a
· ( 5) 'l'he German atte111p~ to make
outdght pul'Cha_ae -of· the Hungarian
company'· of General meet;r.-ic . which the. Tree.~y ,Departmen-t is ·reported tO han
· blocked.
.
.
.
. 1
·
!rhe attempted transfer to · Srl.t zerland of· tht control of the French compan7
.belonging to the lfatioD.al 'o.a-sh Regitrter 18 co~eidered ~a a new $XLd recent ·
deveJ.opm~n t by the floa41Dc vi \h . the Ybew Br~h. The · ~eric:an colllpalll' he• . •
tefu$ed ·tlie authorisation f'Or thie traneactioll aecording to adrlee rece1ft4
from i~t LQndon ·office by the Br.i tieh.
..
.
.
.
.To e·ata~l1eh Swiss majority coJitro:J,· and thus give hbleelt l7 better sta.tue
with the German administrato~· at a repre.sentatiTe· of Swiat ra'ther than Ameri!'an
interest. ~d to faciU,tate the eUJipl$ ·9.f machineJ to .Swiherl&nd f'roa the
·Pa.ris factoey, · the Amal'1can co~~· hropean representat1Te hal propoted thd
~~as bankers ,!urniah three million Jrench f~ance for the purpose o~ ~ncreas~
. th,.e French comp8D1' 1 capital. Becauee o·f his. c.ontidence that GermaDT will gran\
its approval ~ po.illfc to. the eu.epic1on that. the ~.rmane probab~ not onl7 1nep1re4
the arrangement but would w8l.come it, 8ltho'QCh.he appear• to be· innocent in the
matter. A Bern ,report that the repreeentat1Te of the •ational. Oaeh ReP,ater hal .
received information froa ·a Geraan official that .Switserland coul4 obtain mach~••
from ~ Berlin. tactort 8hould a new co-.pa:DT be formed and the preaent ~·· COJilP8Il7
· be permit\ed to die a natval dea~ · len41 eupport ill the matter.
.
.
'
I
•
.
.
•
.
It is suspected: by the :Britilh ~t a political or legal ad.Tantace UT exiet
tor Ge~ by thh ao~e · to uUllM ·a tapc>rai'T neutral a• a ·:repotitorr tor.
·
.
'
.
.· ;
/
' .
oo~trol oni' the . bUII4111 properiT :1ll ocnplel ~,. 'belcnacw -- .&Mrloea
altboucb the.,rea1on1Dc 11 aot ·a.UreJ.T cl~. !be !ra41Ac ~tll taw .• ...,.
·· llranch take• the .view to •t~ o.ut ~t the7 WJ!t 8114. _tha. , 1top lt~.
~
. •.
'
. It 11 intendel by. thle 11111~ to ~all theae tueplcloaa to the atteatlon
of ~· .American goTenaen\ ~ per~fl relna t to aerl~an pOliq ab0ul4
!m'th~r tran.eac:tlonl of thla \JPI be pro}lolel, aD4 101lcitinc for the ~rit.hb
e.Uthoritiea e.rrr conf1~ -I'Yidenct o~ Go~ernaent can f1U'1111h-. !h. backcroun4
iil!ormation ~Jl tbil ceneral 11 tuation. 11 kllo,n by _.,. y•.. Kc;Ooab vho recatly . .
. arriTed in Yaibington ae ~· !ra41Dg 1rith the .__, :Br~chla repreHJlta.tl'te at
. the ;Bri~~lh ·~a1q. ·
.· .
..
.
.I
(
I
,\
•r.·
'·
I
eh:eopy
3-31-42
/
\
.
·'
.
I
..)
TREA~URYD~PARTMENT
INTER OFFICE COMMUNICATION
.
.
.)
CONFI.DENTIAL
Regi~tered aterliDg tr.e.naactiou of the reportinc· banka v.re _aa follcniaa
. Sold to caaercial concerna
- ~oo. 000
PUrchaeed ~rOlll COIIIIlerc~~ concerna . i. o, oop
Qpen market
\
I.
I
at~rling held a~ 4.0~3/4, with no reported tranaactiona.
.
.
In. New York, closing quotations for the foreign currenciea: listed below
·were as follows;
·
. Canadian -dollar · .
Argentine. peao ( free)
Br.a s.ilian milreia (fx':ee)
Colombian peso
Mexican peso
ur.uguqan peso (free)
Vene~elan· bolivar
13~ ·discoimt .
. 2373
.05lb
·5775
\
'·
.2064
·5295
. -2815
1/S'f, premium
Cuban peeo
I
We sold $3;990,000 in gold to the qentral Bank of the ·Argentine Republic,
which was ei!..rma.rke_d for ~ta account.•
·
. we purchased $864,
oOo ·in g~ld from
Resene Bank of- :Peru.
:
the earmarked account . of. the. central
· ··
No nev gold engagement& were repor~ed.
.
.
.
In Lo~oil, sp ot and forw~d sily·er remained at 23- l/2d, e qu,ivalent ·to 42.b7¢.·
T~e Treasury•• purchase ·pric~ for foreign silver w&s unchanged at 351·
Randy and Harman's aettleme~t price for foreign ailver was ~eo unehenged at
3'>-1/8¢.
We
.
~e
:
.
no pUrchaeea of silver toci.q'.
\
;
.
Cow.. -13
,
BRmS~ 1111'1' ~
(u.s.
Bmm'l')
'·
Information received up to 7.
,
A.M., 30th llarOh 1942..
.
.
.
.
Ai;' photographs ot s.T. NAZAIRE on
gate was .missing and t _he
1oc~ ·~·
tlooded.
.
'
~h . sho~ t hat the sea~ look
H~H. Cruis~,
eJlcorting ·a· ~ 0~~1' .tO
RUSSIA, sighted and engaged three enem,y- 4estro~rs abo1,1t 180 miles 'north
MtJRl!A~K co~st
-
.
at 8. 51
a.m.
a.~.
yesterd47• At 9. 8
/
report
'destroyer had been set on f ire and s~ _ was 1n pursuit.
BURMA.
reoorted
TOUN:JOO FRONT.
re~nl'orced
~a
. ot 'tb8
.
recei ved .~t pne
~ ~ ·report._received~
I
At ·4 Pollio 2~h situation obscure.
and. atta~ from the s'outh• . chinese
YEDAS!lE in the morning met ~re resis~ce
Japanese'
coun~~-attack from
than expected • •• considerable · oasualties
on both sides.
SOUT~N SHL"If STATES FRONT.
Two Chinese companies attaCked about 300
Siamese/Japanese troops in the MOIDTON area.
The enemy ret~ed after suffer~
casualties~
3. ·{a.IR OPERATIO}S
m>TERN FRON'r.
LUmX:K.
-
28th/29tp..
.
205 bombers incluaJng 46 heavy
.
I
type, attnck9d from heights varying between 17, 000 ~md 1, .300 .feet, dropping. 163
.c,
.
.
tons· of high explosive .(seventeen 4, 000 pounders} and. :146 tollB
.·
o~
fucerxliari es •
Nearly~ the aircraft, i'ncltiding .2;6 S:t;irli.ngs1 carried incendiaries onlY'• . Bright
•
0
~2 . b7¢ .
moonlight, no cloud.
Anti:-aircr~t sli~ht but. fighter opposition. severe.
J~ers 98
des~oyed• So~
claimed as
crews guided
t~
Two
target. by fires_ seen 100
llile~
auay.- The islalXl centre: or. the town. uas des?ribed ~s blaz~ like one large
.
.
.
.
~
fire, and a machine tool factoi-y was flattened. - Two-other large factori es were
.
.
'
baily damag~, one of t~em being well alight• .· Reports ~e unanimous· in describing
3{). R.C~A.F ., 15 R·. A.A.F. and 10 New ZealalXl bo~S
-az:d one NEi• Zealand were amcilll1i those lost.
attack as most successful.
Two carladian
29t~.
- --
Spitfires set f ire to a
~aval auxll~acy. craft. off
NJEUP(RT a:Jd
Pl't:~bly de:,~troyed an .~nem;y fighter. Two are miss~, Pil:O~ safe• .
·
LIBY..\. 26th. . &stons ballbed ~ ~ ·gr~um. Esc~ llitt y-
German fighter~ and damaged a fourth. Two were lo~to
Nine ~ bomtiers attacked, -c ausing. slight ciVilian
destr~ ey ·ant1-air91'aft( fire and a ~econd we..s da-.g~
hawka proQ&bly destroyed three
J4.AI.TA.
29th.
dlllll!l.ge. One was prob&bl.Y
'by
fighters~
ReWqro--nt s or
.
· arrived· sate,~
•
.' .
·(~, I,~ 00)
Jo.J •
·. · JIE!)ITJjiUWf.AN.
ton
~~n Spitfires;, two -Beaut~ts
~
and three Blenheim&
.
,
·.~28th. ~~ ·c~ torpedoes hi~ an .
oqo 'abip ott' ~AouuS, ~~. . · · . · .-:
.
.)
.
\
- .
~NITED STATES GOVERNMENT
..
•
.
· COORDINATOR
9f'
I~.FORMATION
WABHINGTON , ,D.
c.
March 30, .1942
-I
- The · Honoraole
.
The Secret ary of t he Treasury
V/ashington, D. C.
DeB.r Henry:
\
Attached is t he Briti sh Ho'me
I ntelli gence Report for the week end.ing
March 23 ,
1942.
Since rely ,
(
.
fitt
Vfilliam J . Donovan
Enclosure
.·
\
·.
:·
-
I
'
•
1
. l
.
There does not
change in
~e
ap~~r
to have
sta te or· public contidence
on home and 1n4~tr1al tronts
247.
even though allied initiative 1n the Far East con"'"~ .....r:....
to "a cert~in brigb~ening of the g~neral scene•.
Soae
quarters ope~ly disc~·s "the po$Sib.1 lity of a defeat". ·The
question "do we deserve
to·~"
couple~
is
With this • .• A
certain r eluctance to discuss the war" i s reported from .
/
several. regions.
A demand for inspired, strong and active government
fEladership is reported by t en
'
ge.nce officer s .•
i,.ntelli
regi ~a l
The main r-eaction to new restrictions on f ·uel and clothi{lg/
has been an "almost pathological gratitude" .
as real steps toward a total
ar e not capped
b,y
"If the people's sac r ifices
~ar.
vigorous government acti on a swing towa r d
communism or de·f eatism is t hought likely." .
Reference i s
in f i ve regions .
th~
Both ar.e r egar ded
ma~e_to
\
a sense , of "-l!italism and f rus tration"
It i s suggested
such feelings rise from
~hat
des ire for concr ete evidence t hat we are rea ll~ tackling
war pr6duction and succes sful British military action .
Dis -
/
sati s f action· over production comes both from the many stori es
of holdups and · idleness which are in circulation and from
the direct expe.rience of workers and also from a "lack of
information about what i s already bei~g done." Five RIO ' s
record appr eci a tion o~ Halifax ' s speech in this connection.
Far East .
A more hopeful outlook is apparent in public
feeling about this theatre of war .
Regional intelligence
officers are almost unanimous in ascribing this .mainly to
MacArthur's appointment. "MacArthur's prestige stands higher
than that of any general outs ide Russia.
Evidence i s t~ken
'
from t he hea vy blows dealt the Japanese fleet t hat na t last
the allies can hit and hurt the Japs "~
This news "has counter-
acted the fatalistic depression caused b.1 allied l osses 1n
the J <iva Sea Battle" •
. Cripps has r eceded · a little ~om forefront of ppliti,cal
'
picture i " ~gnitude of his t ask i s ~pprecia ted " but most
~~ople expect .him t~ be successtul~
"the ~e man ,for the job"·..
A typi cal coiDIDent is
It 1:s ho'ped .that he 1til_l not be
(
\
)
r
-2-
1
gone . too long •. !he main Public intere st
India, ~t is stated , is "strat egic rathe r
week,
d with depre ssion,
t contri buted .
althou gh
"Indi~ ~hould
ing.
Ta~ of its fal1 . is being rene~ed.
Singap ore .
a defea t•.
1th this.
The
"A
the f~~st time in histor y that s~ many men have surren dered
withou t a fight.~ · It is felt that "no adequ ate explan ation
has been given" .
ported from
.
•
those
e government
get her fre, dom•
w~th
"Sorro w seems to stifle criticismit · &Jiio~g
missin g relati ves .
/
Austr alia holds increa sing intere st. ~resence of o. s.
la tion as to real
~roops is wel comed but there is specu
......
vhat
streng th of these reinfo rceme nts. ·There is a wide belief
\
1 and clothi ng
eople' s sacrif ices
a swing toward
sm and frustr ation"
feelin gs rise from
really t acklin g
ry action .
Dis-
. the many storie s
"Aus tralia is gravi tating m<;>re and. more'! towa rd the U~ited
Dominion" . · It is
Sta ~es and is "as good as lost to us as a
.
r egarde d by mos t people whq commen t 1;.hus as· a "sound idea
t o have a perman ent link between t he
t han as a disas ter.
two . count~es"
r a t her
'·
There is contin ued admir ation for the 'R ussian
.
effort s but doubts . of t h e accura cy of . t~eir communi~ues grows
The antici pated German eas tern offens ive in the S?ring is
Ru5si a.
I
causin g increa sing anxiet y •
.his conne ction.
There i s a n increa sing belief t hat at
l a st Unit~d Sta tes is ngettL~g a move onn, partic ularly in
·
Aus tralia . The news \ reels of Pea rl Harbo r a re said to have
"brought home · to t he people wha t a handic ap it has been
oparent in public
much was ' los t t here".
tion and from
·om a "lack of
• 11
Five RIO's
'
. intell igenc e
:his mainly to
.i ge stands highe r
·id~nce
is t jiken
1t that· nat la'Bt\
; news "has count erllied losses 1n
. United States .
There is some evidence t hat the
people a re· growin g "more invasi on consci ous in southw est"
on •
with little relian ce on our method s of. comba ting the invasi
Invasi on
Inequ ality of sacr11 'ice .
of politi cal
1ted" but most
!al comment is
t
he •111 not be
Among certai n sectio ns of the
of a feelin g that •every thing
'
is ~o~ fair and equal and theref or e Q~ sacrif ices are not
hil~.n · In pa rticul nr the~e is th~ be~ief that the rich
public there is growin g
evid~noe
w9rthw
are hit less
~ont
prospects~
b,y ' ra~ionin g
than "ordin ary persons.
We poor
begga rs can't get petro l for busin~ ss , yet we see the big
/
bugs ri~ing 1n their push cars • "
.'
.·
_)
GOviRrGarn
· COORDINATOR OF INJIORMAnON
UNITID SrATD
Ma.r dh .30, ·1:942
(
·.
1at
· Honorable B~nry ·Mor genthau, J r .
- Secretar y of the Treasury ·
Washington; n.· c.
'""
Dear Henry:
.Enclosed is
a
summary of G~rman
Home . Propagimda prepared by the
m:.
- sincerely,
NS •
William J •
..
.
R'~~-~
•.
\
£!n~
/
Attachment ·
..on.
ling
l
Lch
L
.
/
.-
r
\
,.,
--=-..
•
..) .
.
\'
1.
Aside from vague references to
from the Ukra~e there is no obvious endeav
. .
.
consola~ion for cuts· in meat, bread, and fat -rati~ns an
·g loomy p~ospects .:flor· the vegetab~ and.-·p~tato situation;
Propaganda
el!lphas.iz~s:
"
(a)
It is worse in Britaui
(b)
The 'military sit'layon ~s improving
(c)
Germany is aiding the New Order by · feeding
Finland and "worthy" elements of occupied, countrie?.
-
-~
2. .Labor drive
~ontinue~
_1 , 700 ,000 vaqanc ies the go.al!
with the filling of
Forty thousand girls are
being drafted into armament industry.
I
1
Decree authorizes
•
compulsor y ~arm work by inhabitahts ·of sm~ll towns and country. ·
.
.
.
~-Under penalty_ of · confineme~t i~ conce~t~ation ~amps in "serious
1
cases" all pnvate travellmg 1s prohrb1..ted..
··I
J.
Russ ia continues t o dominate the news.
of growth of confidence t hat
t~e
IQ spite
worst is over, there is
caution ·in predicting result of· spring offensive! Home
propaganda did not carry Wi lhelmstrasse
denia~
that British
Aoerican· tanks in . ~e in Russ ia. · Instead the destruc:tion
of
}~erican
British planes and tanks cl aimed.
4. For the first time
•hed~ehog "
military positi9n
is lilentioned and. new t ype "cockade " defense is · ci.escribed, --.
5..
Growing attention to Austr alia ,. over wh ich
"British f ! ag will not fly much l onger 8 although not yet
certain whether it will be replaced 'by J apanese o~ American .
flag. · Increase in at tention to ' Aoierican , Philippines , ~ina,
Yediterraoeani decre~e in attention to
war
at .sea, western
f~nt , · Japanes~ ~p~rations .
6. No attention at ail to the follo~ing:
/. (-a)
f
Roum~ian-Hung·~ squabble .
.
·(b) London
.
.debates on... , propaganda to Germany
.
..
• · • (c)
'Trials at Riom
252
2 -
In~tru-~:t.ioxu3 issued to avoid praising. ~U an to
avo1d any
~ommitment
to breakdoWij Cripps
J
n~gQtiatio
s.
/
,_
·~
.l
I
'·
(
.
l .
'
\
'
...
.
.
TREASURY DEPARTMENT
IN-TER O.F FICE· COMMUNICATION
·
DATa
lla!'Oh . 30 1
Secntaey liorgenthau. ·
TO
·Mr. Kamarok
FROM
~ubJeot:
summary 'or Kil1~ary Re.p ort s
' /
Gel!Dlan Y1:1·1 tal'Y Forces
___.:::r
Ca) · German' Na!l
I
The German Navy has . concentrated the· bulk ot _i ts availabl-e '
. s~r~k1ng .toroe at. Tr-ondhe1m .-. .A ·heavy o·r u1ser, Admiral ·Hipper;
was able to reach Trondhe1~ safely ~s a ·replaoement tor the .
.Prinz Eug~n . wh1ch was damaged by a Brit1~h torpedo on. 1ts way
to Trondhe1m. At Trondhe1m, the Germans, thereror~, ·have available for action the. bat.t leship· Ti-~1t·z, the he$VY H1pp,r cruiser,.
and several ~estroyers ... The · only other German ship s th~ are
fit for fi ghting are an aircratt , carrier, two pocket battleships,
an~ four light cruisers.
, .
.
.
The main concentration of submarines still cont in~e s ~o be
~n the West Atlantic an~ the West Indies.
(b)
German ArmY ·
.
/
Coastal detense·s in Norway have been st rengt bened. Five
to ten new coastal .detense ' battalions have been moved lnto the
.country. The main ge.rr1.son still remains at ~ight diV:iei.ons
(160 ,009 men} . · ·
·.·
.. .
·.
(c)
German A1r Force ·
The Ge.rmane. have about 25 tour~motor Condor reconnaissance
bombers ·in · Denmark and N.o rway. . This represents the l~est
concentrat ion ever made ·in this area. It is probably intended
to provide reoonna1ss·a noe to~ ·the- German ·naval units at Trondheim.
Although the Germans have la~~ge numbers ot ·f1ghters 1n
France ~nd Belgium, they are being . used ·with great economy.
There are now over 4oO German planes i n Sioi,ly.. This ~.s .
the l,argest· number 0 r· -German planes ever based -' in· thiS' area.
About o~e-t~1rd ot these are bombers·. This torce is me.1nt&;1n~ng
·.
/
\
;
2 ·- ·
the highest s~a~e ot bo~bing ot ·Malta in the wait to date·.
on th.e .average, 150 pl~n•" a day .a ttack the .\(altese air.
t'1eldsand shippi~~·
\
Ge~an air ·strength in Libya has fallen ott dUe to
the concentration in &icily ,and now totals around '500.
The British have air superiority on the Libyan front.
(d)"
/
Germ~n . Militarr Preparations
·
.
Since January, the Germans have materially increased
· ~hel.r producti.o n· ot TLO (Tank Landing Craft). A humber of
additional yards· have been taken into use . '6ermany is .now
building at a rate of 300-500 a year·. 'f{ithin a relatively
short time·, it is estimated, the Germans will have 127
.TLC a~ailable. (This development is most significant .
There are several likely· explanations:
.
.,
(i) The Germans hope to finish the. war tp1s year,
to crush Russia and to swing around and pe
compl etel·Y prepared to invade England.
\
( 2) As an act of desperation·, the Germans may
attempt · to invade EnglAnd while the bulk·.
ot th~ir army is still tied un in Russia.
(3) The· craft are being built for a rapid invasion
of Sweden.)
(U.K. Operations Reports, March 12-19, 21, 22 , 27:
M.I.D·. Situations Officer, March 25, 194-2)
Japanese Fleet
The main Japanese fleet is. presumed to be 1n home
waters. .Nearly all 1t s cruisers and light craft have been
detached· to ot·her a·r eas. sever8.1 units of the sout.h ern
fleet appear to have· returned to .Japan and the rem·a inder
~re. in the Malay.en area . A naval force 1e .consolidat1ng
· the various bases established or taken over in the Java Sea
area. The . only un1t known to .Qe oper~ting in the Philippines
1s one tloti;l.l_a ot tou·r destroyers. ·
·
The operations ·i n New · G~inea are being c·a rried out by
th~ Fourth Fleet, whose strength, with reinto.r cements fro~
the Main Fleet, is ·estimated to be four g_1nch cruisers, two
6-· 1n~ cruisers, two 5· 5 oru1~ers, t'ffO seaplane carriers, ~~o·
aircraft carriers, eight destroyers, and nine . submarines.
"'~
·.
/
1
255
3
considerable , damage was infliC?ted on this fleet by .Alli.e d
a1-rcrat.~· between· the lO~h and 26>t~ .or Karch . _ Four cru18.ers.
and three destroyers are reported to have been sunk but -·individu$1 ships hav·e not been _ident_1 tied. '
'
.( u. K. Operations Report~ Karch 12-19, 1942)
u.s.
A1rplan'8s in the Far East
/
_ In
Burma, 5.9 J~panese bombers with fighter escorts
..----4ilade three attacks on an Allied ai·rdrome. Eight B1_enbe1m
bombers .were de'stroy:e_d on the ground and sevtm damaged. All
of the P-40 1 s or the American Volunteer Group wer·e damaged
on the ground.
At approximately the same time, British bombers attacke_d
a Japanese airdrome and either destroyed or .damaged 2g Japanese
airplanes on the ground.
(U.K. Operations Report, March 23-24, 1942)
\
'·
~
0
\
.·.
/
.
1
TREAsURY DEPARTMENT
. · WashingtOn
'
\
-. Press· Service
roR RELEASE, MORNING_· NEWSPAPERS,
Tuesd~, March· 31, 194-2. ·
,
. 3/30/
.
.
.
-No. 39-91 . _.
.
'
/
The Secretary ·or t~e •rreasury anno\Uloed. last evening t~t .:
•
~ t ei·de: s
thereabouts, .~r
b~ da·t ed April 1, 1_94-2 and to matu-re
- b111B , to
·wh1ch
for $150,-000, ooo, or
I
7i-aai 'r;..'"eaeury1
1942,
June· lS,
were offered on Ma:roh 27, ·were .op~ned at ·t he· Federal Re~
·serve Banks
pn March
30.
The de'.;a~ls ot this .iB8lJ:e are as . tollpws:
\
Total applied for - $356, 65}, 000
Total accep·i:i ed
150, 435·, OOJ
Range of ao~epted bids:
' .
(Exnep_ting two tenders totaling
$17,000 )
rate approximately 0.152 perc.eri~
High - 99.967 Bqi\1valent·
11
11
11
•
0.240
II
•
Low -. 99.94S
Av e;.·age
rrice
(In
(
99.952
II
II
0.2.21
11
~erc.ent of the amount b.id ..for at the low price
-oOo- ·
\
..
II .
..
W!:t.B
accepted)
.
·.
:
'
'
llarch 31, 1942
10 : 20" a •.m.
J
/
· ~ F:NANCING ·
Present :
Mr. Buffington
I
Mr_. Bryce
- Mr • . Haas
Mr. Bell
Mr~ Hadley
Mr. Kil~y·
\
'
H.M.JR:
Has
Mr. Bell seen these.
Buf~ington gave the Secretary.) -
·· MR•. BELL: I s~w them in the rough.
changed them, have you?
..
. MR. BUFFINGT.ON: . No~ qut ·we have a
· ·H.M.JR:
.
(Dr.af~s that
You haven't
s~ggested
Mr.
f
.change.
Have you got ~ copy for him?
MR. BUFFJ: NGTON:
Yes •
·Here is the suggested ·one.. The only change in this
one is .. that . the .maturity. ~1:1 .b.e about six ·months.
MR. BELL: O. K.
MR.'. BUFFINGTON: We changed just this one sentence.
"The ·maturity will be about six months."
.'
\
H.M. JR: · Which
.·
MR.· BUFFINGTON:
is this?
This is . the latest one • .
L
. - 3
..
be within the 11 about six ~ont~s ~'
H.K.JR:
Have .you tafked to
\
Hadley~
MR •. HAAS.:
· I think we
Hadl~y
have
__.---/
Hadley-, I think, and Pissr · and ·New York - .
are about the same on that; but you might
in and .talk- to him.
~11
H•.M.JR: I will ask him.
I
MR.- BELL! It hasn't- changed materially since we
· t.a~ked before and everybody has two or three thirtyseconds. On six months or a half percent , it doe·s n ' t
· make much dif:f·erence.
(Mr. Hadley entered. the conferen~e.)
\
H.M. JR: Hello, Hadley. : -Hadley, if yoa ·:had to pri.ce.
a certificat~ this morning, what would you price it, how
many months and .what rate ?
MR. HADLEY: . I would still do it six months for- half
-a percent .
(
H.M.JR: ·
~ow
many
MR. HADLEY :
H. M.JR;
t~irty- seconds
velvet?
That ~o~ld give ·you about two or three.
There bas been no chang e?
MR. HADU.""Y: I don't · think so-. I think_on this first
.
one ·we have to oort of make our own answer.
H. M. JR:
·.
O.K.
'Thank yo{1, Hadley.
.
.
(]lr-~ .~adley left the conferenc~.)
. ... MR. BEll.: · You see, in this letter y·ou are deciding
the rate.' You sa.y it. will bear inter.est .a.t the r~te of·.
one half. percent. The maturity you can var,y _a l1ttl: 1n
months ,. ·but we are deciding ~ere the rate, wb1ch I 'Ch1nk
is all right..
·
/
'·
'
I
.
.:_
. - 4 .)
.;•
. H~M.·JR: .Well~- with Eccl~s coming \in..in thirty-five · '- _·
DUnute·s, we might JUst a$ ·well decide it tb:is morning.
(Laugh ter.)
What . 1 s. flllley?
·
·
..
,
MR. BELL:
H.M. JR:
-
Just. that.
/
Why? .
MR. BELL:
You seem to think it
wil~be
s~ortly afte~ward. .
: .\
I
H. M. JR: - Oh, I don ' t mean that.
were thinking?
MR. BELL:
announc-ed
Is· that what you
That is the way I took it. - ·
H.M.JR: I didn ' t get it. Well, th~t. is · true,\ ·too.
Is that sentence true, about many corporations?
.
· lR. BUFFINGTON:
MR. BELL:
Yes,
sir ~
That is the -result of George's trip.
.
H.M.JR:
.
By April 3, isn't .that too late?
r
.
MR.· .BELL:· .No, we wo~ld get it out ~f here l).o t · late~
. than Saturd'ay ev:en'ing. . .
H.M. JR_
: .And then you would hav:e to use telegrams.
MR. BELL: Well, they would g~t it .Monday morning.
even if we mailed it .
· ,.....
MR. BUFFINGTON: That ·a~te was predicated on th~.
seventh offering. When you. ~ack the off.eri~g to the
sixth-- ·
H.M.JR:
Oh, you :figure that - ·isn't that too close?
,'
MR. BUFFINGTON:: W~ll, i ~ is· close.
\
MR. BEll: We a·r e traveling under 'pretty" close ·o~de.rs.
_) "
'
.
- 5-
.
We contemplated
.
\
airmaili~g
west of the w.s·sissippi• and<
mailing everything east of the Mississipp.i: . ·
'
MR. BUFFINGTON:
.
Tonight . ·
'
/
MR. BELL:· Ye~, tonight.
H. M.JR ~
.Tonight?
I
MR. BElL·:
· night.· H. ¥.JR:
·'
Wedne-sday--night, excuse me, tQmorJ;'ow
You would use mail . instead· of--
MR. BELL: That is ~4at we -are contemplating . You
see, if you get out Wednesday n~ght by air m~il - i _t will
get to the West Coast by Thursday evening, ~nd they will
have Friday .to consider it and telegraph. us that they a·r e·
interested!
MR.• BUFFINGTON :
weather .
MR • .BEL~:
H.M. JR:
Providing there. i~ ~o delay in
(
That is right.
Well;.· nob~dy" has sent for Western Union?
,.,
MR. BELL : - No, we have not.
.
~~ BRYCE: I think your air-mail stamp puts a ~ood
touch on it. Even around here , that attracts attent1on
when it come-s air. mail fr·om: t~e Treas.1;1ry ~· but you have
though that all out .
·
H. M:.JR:
thi~g . '
Who
I am not sati~fied on . the mechanics of that
handles the mailin-g of this stuff?
MR. BELL!
\
H.M~JR :
He is gett i~g the ~1st.
Kilby.
Do you mind if _I send for him. later on?
MR. BELL~
·,
~
No \ndee~~
.
"
.
'.'
.·.·
·.
}
..
.... .
. •-.--;
_)
'· '
-.
-
:26
~
- ·6..
·•
· H.M•.JR: Well, I think you ~ught to ·put this: "If
.you :trill tele~raph me no_t later · than Friday evening that
. y.ou ~ould be 1nterested." .You don't say. wha~ · you want
·
to telegraph~ It -is all' right. Wouldn't you say .that· · .·
you would like-·
·
, /
·
. MR. ~UFFINGTQN: We consider that you are · ~sking .
two quest1ons, and it seemed to me that you Will get a·
response, and we wanted as many response-&, as. po·ssible to
get 'the size of the: lll$.rket a.nd. that is wl}.y I purposely
left th~ question ~ . little vague.
·
.
H.M.JR: Would a man. understand that? 'What · is he
to telegraph'· about?
MR~ BUFFINGTON: . "If. you will telegraph me not
later than Friday ·evening~ April 3, I sha+l be ~laa to
send you before ·the offer1ng date complete ,d.e ta1ls o!
the terms of this issue ... :."
H. M.JR:
.
I see.
.
MR. BUFFINGTON :
by subsequent-- 11 •
" .... and see that you · are adyised
(
.
H.M~JR: ·w~ll , this is saying a lot. Do you think
.. the average fellow :-would know what that is all about? r ·
mean, I understand it.
·
MR. BElL:
I think so.
· -· I:f.M.JR:·.· Well~ as a new. offering .- as it may only be
opell<Olle
prompt action is nece.ssary -~f he wishes to.
participate~ ·' Prompt action on telegraphing me?
.
as.v,.
MR. BElL: No, what you are . telling him is that ·on
April' 6 you are going to have· this -offaring and. !~at it
may.only be open one d~y, so he had hette:_ ~et h1~ _s~b~
scr1ption in that day if he wants to part~e1pate 1n t~e
·... offering.
\
.,
R. J{.JR:
Do .you say Kilby
'
is your··man· on · th~s?
..
~·
..
...
'.'
I
-.... 7 .
.
'
.
.
)
..
.
.
-
the --
· ·~. BELL: Y~s. · As long a·s· you ha,e . cut out
second_ senten?·Et. 1n th~ firs_t ·par~graph;' I .w onder if
you sho~ld el1nu.1~ate 1n the last paragraph .'ab,o ut .the ·
·
·
subse.quent o:ffer1ngs.
H.-M. JR:
No .
, /
- ~ffi •. BUFFINGTON:
Oh 1 the.t is general.
- ~.M.JR:· · No ~ that is. general. You -wo11-l dn ' f have ti'nie · . \
to have -stamped on, the outside 1 " ' Announcement ef · Treasury 1
financing " ? Couldn 1.t they
just run. them. through?
'
.
.
· MR~ BELL: They ·couid put o-n t here in red, 11 Iinpo~tant . "
or "Special 1 T·reasury t epa:rtment Business·. 11 I ~hink if
you put · that air mail st~p on that will draw· attention.
H. M. JR: . Well, ·you c.ould do· t hat· and just run it
through 1 "Treasury financing . offering . "
, .
·
'
MR. BRi~CE : I would like it _to go the ot~er way. .1
think it l ooks like . you are having to put a touch on and
you don't . You j -u~t stick an air mai-l st~p on and that
attracts the attenti on and it is a nice di gnified attention
1
and away i .t go es. · If you put that on it might appear that
you are .having
you don ' t have to do..
..
. to do something
H. M. JR: Who will se e ·the air ·mail stamp? The preside~.t
1
'of the co r poration won t' see 'it..
·
MR. BRYCE :
Well , I think it wili g~t rushed into the
nres id~nt Is ' desk# "He re is an. air mail from vJashington .
·. h~r.-Kilby entered ~he conf'e'rence~
..
Mh. BUFFINGTON : .· Mr . Sec.retary, you ~ay be rig~t,
that in that first ' sentence . in · th~ last pa~~graph 1f you
would ~ay, 11 If you will te legraph m~ not later t-han .
Friday evening indicating your· interest; or that . you are
interested,·.. shall be ·· gl ad to sent yoU: the information,"
and so forth~ . Would you r ather have that?..
~
-r
\H. M•.JR: Yes. Kilby, could you - who -types thi~
for you·? I will get Miss Chauncey a:nd tell her to re-:type it. Kil by1 on ,the ~ech~~Cf! .- do ·you know anything ·
. ,.
.·--.....--=-
8 -
about this lette r?
MR. KILBY :
H.M.JR:
'
Yes sir .
How do you propose to do it;? ·
. MR. KILBY: On. the corpo ration s, about
seventy-fiv~
hundred af them, we are starti ng this mo rning ,to' pull sed
addressograph. plate s and the envelopes ~1 be addres
on a'ddressograph pl~tes. I under-stand there are about
eleven hundre d of these -othe r office s and we· would typewrite the ad4re sses on .those .
You see, we have no pl ates for the-.
those .
on
all
at
UR. KILBY : v:e b.ave no pl ates
\
'
would
I
wh~t
you
tell
H.M. JR: ~ell, now, I will
today,
send
you
Would
like yo~ to do for me , will you?
Uni~n
thia mo rning, for r epres entati ves of both Western . .here,
ok
~'Lo
them,
o
t
say
and
,
see
and Posta l Telegraph,
you ·
gentlemen, how m~ch would you charge if we would give them
bute
distri
could
you
that
so
t
th~ se addres ses tonigh
to your variou s branches within the zones?' so theysowirll
that
get them jnto the lowest zone , you see. l mean,
what
know
t
'
don
I
.
sent
and
sort~d
be
each one ·could
. they will - if it .is - let ' s say that they have a night
· lett er rate of fifty cents f.or fift y words . J.. don 't
know. Let's · say that is the lowest that they can be
.is like
distri buted to go wi thin the. - ·you ~et me . It
- so
you
mean,
I
ogs.
.catal
order
r~il
oebuck
R
Sears
they would get i n tne lowest zone.
MR. BELL:
MR. KILBY :
Yes .
MR. BEll: In other words, they send this ~.etter· t~
Chicago and it would be aistri buted to all of the
corpo ration's in the ·ehic ago zone . We onl ! pay !or t he ·
t ransm ission of a wire one~ , pl us the del1v ery 1n that
·
·
terri tory.
v
.
\
MR . BRYCE : That is the ·way t hey do it in ·the bond
'busine ss.
/
I
265·
.- 9 -
•
. I
•)
MR.
KILBY: .· Now, do we ·have the li~t 'yet?
H•.M. J]t:
I 'didn't kriow . it, but I was- sl.ire .it · could .
MR. BRYCE :
I t is a good thought . , / .·
~ave
hffi. BELL:
Murphy will
·MR. KILr Y:
Do you have the list on - ~'?
.
I presume. so . ·He is getting .it from
MR •. HAAS :
that today.
I
-Census • . - .
H . ~t. .
Jli,:
'l1e ll, I' take 1 t they would · have it
tonight~
you see •
MR. BELL :
H . ~11. JR:
Tha:t is 'r ight.
\
'.
Kilby'?
MR. KILBY: That woul d be
eigh.ty7five l:undr.e d:
11
coverag e the n of ·abou't.
H.M.JR: Yes , ·and that thi.s . t hing would _be distributed
t o each zone which is the lowest zone and they would send
out the names, · the address es, which could be made ayail- ·
.
·able to them tonlght. and ' then tomorrow is· what ?
.
.
Mh. BELL :
·'
Wednesday •.
· H. M...J.H.: And· the letter would be ma de available to
t hem tomorrow-, you see . So the y could get these...names
to~igl_lt whic.h , t _}).ey V!'ould ·s end out in _a~~ance and. then .·
one lett er would go to ea:ch zone and from there 1t ~ould
be dis tributed. Now; in this thing , it . is g~od for _them
. becaus.e we are asking each p erson to telegram t hem back
so it is business for them, you ~ee. Find -out what kind .
of a deal we could make with them.
MR. KILBY :
And the time would be 1 tliat --
\ H.:kl. JR: '.l..'he names.- would· be made available tonight, and
the l_~tter would . be made available tonight and it would :be re
-..
/
266 ·
10
;
.
.
.
MR •. ~ELL: .Well, if you can clear the whole thing
up today, it wo~ld be better if it went o~t tomorrow.
It would _give them one more day to make )l ·· ~~ci-sion •.
MR. BRYCE:
Y?_u
~an
tomorrow night?
'
_ R.:M. JR:. No, vvhat I am getting _at is~his : · If we get
the ·thing ·.1 the .n~ s into th~ hands of tlie t-ei.egraph
I
company tonight and the letter· if you wish, then what
I am talking about is a night letter leaving their zone . .
Wednesday night so it would be in the hands of these people .
Thursd~y morning, be o·n their desks Thursday morning .
·
Tha·t certainly can be done.
MR. BELL :
I
MR. KILBY:
it over, Dan·.
MR. BELL:
•
\
That wi 11 give
them tw9 day:s
.
' . to think
·No .
MR,.- KILBY:
to decide.
AssUming that th~y take Wltil Friday evening
1
MR . BELL: ·. ~hursday and Friday.
, . H. :M. JR:
MR. -BELL:
Yes, 'it would gi ve them two days, Dan.
That is all right.
· H:M. JR: · Could you gi.ve the)ll those names 2
MR. HAAS: I :'do.n 't ·know ... .- 1 think so.
MR;· BELL: .Well, 'Murphy was 'getting them Fr~day", · · and I think they w~re available yesterday.
.
. R. M.JR:
.You could find out.
.'
\ MR •.·BELL: They were getting about eleven hundred
nanie s fr.o.m the Gensus •.
~
H.M.JR:
Viell~.
·r
do~·'t ·know how
it
is dol\~. b~tween
...
'
,,.
.•
- l i ':'
.,.
.
(
Po.sta.l· and Western Union·.
send . fer both . of them.
~pu.
MR. BELL:
MR.
KILBY:
H. M. JR:
.,...--/- to do.
don ' t
1
0
kno~.,' :but you co~id
•
•
•
might , have to divide: up the business ..
.
-
Yes·
.
/
Well ,· I think tha:t is the only
f~ir ~hing.·
.....___
I
We have done. that .b efore,· <li vided up the
MR. BELL:
business .
H.M.JR: ·They .have· handled· thi s before.
a _Jl.i!W t,hing .
MR. KILBY:
ng
This isn't
It. is an ·o ld story to them.
\.
· H. M.JR: . It can't be an ·original idea. ' It i& original
with me because I thought i t out but it ·can ' t be for them,
and I think that the shortness -of the time there .·and · ~
ev.e rything else - don ' t you think getting a telegram from ·. ·
the Treasury would be that much more i mpressive?
-
.
.
MR.- BRYCE:
H. M.JR:
.
I
Oh., sure, you bet!
What~ ·
MR. BRY.CE: Sure. That ;,.ill get ri ght in there . where
t hey· will read it -fast •
. H.·M. JR: And it will ·be a night letter. The.s e aren ' t ·
very long, you see.· l would j:us.t J:ike to have t~at as
agai rist the mail~ Dan. · ~ mean, we c·an see what 1 t costs .
We have got money enough to do ' this?
MR. BELL: Oh yes, this won't break us,· ~ut it is
.
expensive financing. .
.H.M. JH.: Vtell , I figure the telegrams: won ' t cost ·
OVE!f. a .doll ar apiece. .
.
.
'
MR. BRYCE: You ar·e: .going to get . ~or'e answer~, this
way' and tb,a t is. what you . want .
•.
.
..
·
.268
. '
- 12 -
·.
MR. BELL: . ~t might be . possible ~
.
.
.
MR. BRYCE : On your first try. .
•·
H.M.JR: · Thls thi ng at.'the outsicle can't cost ten . thousand -dollars • . My GoA, in seven hundfed fifty million· ·
~it _
i s nothing . \Ve~l , Ki l by:, get on that •.
MR. KII,.B.Y: Right away sir .
H. M. JR:
Will ~ou?
.......
I
'
I
.
MR. KILBY:
R.M·. J H.:
Yes sir .
•.
George, are we relying on you for ·anything?
·
MR. HAAS : We -are r·elying on uenry to get thes~ names
and- he can .get in touch with llenry as soon· as ·he goes
out.
' ·
·
.
H. M.JR:
~
~
If there is any tr~)Uble let Geo·r ge: know . · ~
.MR. KI LBY:
'F ine .
I
1ffi. BELL:
That
There are some changes in that letter, Ed .
approximate words •
gives · you · t~e
. H. M. JR : · But get on· that.
1ffi. KILBY:
11
Fine .
I am interested .
..
-
(Kilby le.ft the conference.)
. H ~M.JH. : . Now" in thi~. thi~g y~u 'fello!is have. left off',
See ~our banke_r . ' Oh , that ge.es 1n the c1rcular.
MR . BRYCE :
Yes.
MR. ·BUFFINGTON£ Yes.
H-. M-. JR: What have you. done;? You wanted an hour ·
this ~o rning. VV~a t did you do with it ?
··
.\ MR..:' BUFFINGTON:
hour from Cleveland.
We. had .some bankers in here for an
)
..
~-
T '
·269-
- .18 - .
.·
~.
What did you do .with ·yourzh6ur?
H. M.Jir:
MR.: BRYCE:
We caught' ~m without any ·t~ eth .
·
.
He was supposed ~P go to the den.tis~ this II).orning, but- · · . ·
he got_here. ·We tal~ed ~o ~he pres1dent ;Pf ~h~ Cleveland
.Investment Bankera Assoo1ah on, and Fulton of the National
·sec~i t y Dea:lers and that covers t4e crowd we were talkin~;
about . 1ou get lllOst of your b~.okers in those ~ss<r9iations
~ tgo •. There .is ·no question i~ t~eir rilind .~t what ~hey
can g1 ve a hand. .They are ntt1ng downst.u rs now JUSt
waiting to hear . we· can thro~· them into it any~ · you
want th~ . That involv~s maybe getting a ·man fro~
Chicago here ·o r l'iew .York or something like that ·and just .
getting th~ thing tuned: up. ·
·
'
I
.
H ~ M.JR:
Can you do it . by Mpnday?
\
Mit. BRYCE: . Oh, sure . Just hoVi much they are going
'to do you will have to wait and 'see but they" are willing .
a.nd ·will try, · you don '-t have to worry a.bo'ut that • .
·
MR. BUFFING'JX)N:' If agreeable, I .woul a l ike to move
mor.e rapidly than ' that to give the~ the story and have '
some one from New . York here tod.ay and have this all d.e.cided
by noon tomorrow which we can do very easily .
MR. BRYCE: ~You can work fast on it. : Now, what the
· results will be, we · don' t know, but they will · try and·
l think they ought to be able to get some good results·;.
·
i-i. M•.JR: · Well, we will . laiow by noon, today . When
the Federal Reserve ·Board comes .in we will tell them the
story at eleven o'clock and .make up o~r mind
noon .
or. sooner. I am riot · going to .. spend an hour w1th them.
I won't ·spena an hour with ·them. We will know by el~venthinty.
·
?Y
. MR. BELL: No , I don ' t think you have got very m~y
questions to decide her~.
· H.•M.·JR: Have they 1 ~aised the 9.u~st~on of to _whom
the fellow gives his check
or. anyth1ng h~e that? ·
.· ;
I
--
.:.
..)
·.
. - 14
.)
MR. BRYCE:.. Yes, they .d id bring tliat'up .
In ,an·swer to your thought yesterd ay
about not d1stur..b1ng the money market, a:ll of the·se in- ··· .
ves tment people who ~11 be making t hese/ offers to
· corpor ations have· thei r princi pal l>ahking .account where
they do their bankin g. They would go to -these banks and
subscribe· and have the checks go into those banks .where
they woul d be debite d. They would debit -t)ie acco~t or
a 'che?k wo~ld come through from. the corpor ation and. be
deposl ted l'n the banks to their accoun t and the checks
in the main would stay in the member banks . We would ls .
ask them t o do that · to keep the funds in banking channe
MR. BlJ!FINGT?N :
~
. .
H.M. JR:
How is that?
MR. BELL: It is all right .
H.M. JR: Well, take this· time .
ask me - -
\
.
gentlemen
Even. if ' you
MR . BUFFINGTON: There i s one questio n . In the last
pa-ragr aph of this ~etter , we say, "I shall be glad to
send you before the offerin g date the complete details ."
To expedi te that and set up the machine ry for future
issues an:d it· seems t o· be in accordance with this state·ment, f would like. to see ·those letter s or of~erings , or
·detail s of the offe'rin gs ·go Gut . to the corpor ations via
the Fadera l Reserve Banks who are our fisc al agents rather
than us to send it out direct ly from here , and we could
Then tell the i nvestment bankdep end . upo~ them t o do it~
es
ing · grou~ , since this becom public the minut~ the.
corpor ahons r~cei ve the telegrams , "Go to work umned1 .ately
on the corporAtions to enlist their intere st in making
their subscr iptions through their investment baRkers or
through ~he banks , " if there is n.o object i on to that.
· H. M. JR :
You mean. the next _time?
MR. BUFFINGTON : This time . We will ·send this letter·
dir~c tly,but the detaile d offerin g will be .sent by you
to them through t he Federa l Reserve Banks.
.
.·
~·15
MR~ .BELL: I . ·wou~d say· then, "I e l l .be·. glad to
have sen't to you before 'the . offei"ing date c~mplete
de~ai ls .·" ·
MR. BUFFINGTON: . ~ell, .1 used it. thi,.s ·way, thinking·.
·that theiP being our f1·scal agents· th1s statement was ·
all . ·~ i gh~.
·
~
..
H.M. jR:. Now, if we get th.e se telegr·~ S~day ,
how the he11 are .·you. going to get these names?
h
· MR • ...BELL: - Oh, w~ will send these name·s tomorrow
night to the Feds if you plan o~ that •
. H. M. J R: Well, .you are only going to send. thes e
people ~irculars who te1~gra::h bac'k and s ay t hey want
.
\
. it .
M,R • . BELL : Well, what .we will do is,_aft·ell we. get ·
the telegram ·back we will have to send it to the Federal
Reserve Banks and a~k them to put the~e peopie on their ..
mailing. list '3.
·
.
.
.
. ~ . M . J R.: I .f .the telegrams come 'in Saturday mor ning,
can you get those names to the Fed Saturday so they ·
:will
go qut >!>aturday
.
...
. ni ght 7.
.Mlt. BELL:
H.M.JR :
the
'Fed~ral
Yes;
Five thousand n~e-s , yo-u .can ge·t them to
Reserve Banks?.
MR. BELL : No , we would send them
to~o rrow
night by mai l. · .
··
·
a- full list
.·
H.M. JR.: But that do esn·' t e.n ~:wer me, Dan. You will
send them a· full l ist bu.t yp~ don t want t o send -~y
body· on that list a cir~ular unles s he says he wants
it.
''
.
.
\ MR. :BUFFINGTON : I think you do .. . 1 think a·s we do
in the investment business, you-want to send your circular
; .
I
·.
.- 16 ...
.
.
)
.
to dl .people· on the· li-st whether they indicate they· ·
. are interested or not.
_.
· \
·
MR~.rrBRYCE: . ~e point is tha~ he is. .s aying ir1 his · . . :
}f you want. tQ.e oop.e I Wlll send it to you·," ·ana .
he 1s go~ng to send 1t .to them any-way. , That is· what -is'.
·
_ ·bothering y~ . .
let~er I
~
·
H. M. JR: .Yes • . The fellow -says, "I didn 1 t <te.li him·.
~d damn it ·he. i~ sending the ~ tuff anywa)t-." I mean ,
some fe l low who 1s mad at the G.overnment ·and we .send
him a telegram, "Here· is the Secretary of · the .T reasury,
· .he _spent- a ~ollar of my· taXp ayer 1 s ·~oney · and I didn 1 t
·
want the thrng and then he sends me a circula
r
besides.
·
What the . hell is the matter with that man 11 .?
I
t:AR. BR!CE: What ha:v~.· . the Federal lteserve. been doing?
'What l ·S· the1r regular pro?edure? Do they r.e,gularly\i end
to some of these corporat1ons?
, .
MR. BELL:
.
.
.No doubt many of them are on their. mailing
. list, and we would have t o eliminate t.hem if we didn 1 t "
want · them to send. them to them. The re will pro.b1 ably
be ·a lo.t of co rpo ra~i cins on their l .i st that won t be on
ours, employing.. les s than five hun.d.r ed people.
.. /
,
..
MR. B·RYCE:· • You could. change that letter . and. catch
,that so it would ti~ up a .. li t tle qi t.
·
1at. BUFFII~TON : ·Or we coul~ des ignate from those
lists· you are sending out the - names to ~hom they are to
.send t4e se c-irculars on Saturday. .
H.M. J R: V:hy da· yo\l want .t o - that -c.hanges the whol~
thing . Why aor·you want the. t hing to go out from _the Fed.
.....
MR. · BUFFINGTON: Just to simplify it . ··There i ~ no
need 6f it ·be.c ause Dan- thought· it would simplify our
work in Washington s).nce t~ey_ had the lists.·
\
MR. BELL:
And there will ·b.e dupl~cations if we do.n t
1
.
.•.
.'
- 17 .... '
·
..
)
'
do that. They w.ill get two, o.ne from hEN:-e · and one from
the Federal Reserve Bank.
· ·
· ·
.
H·. t£. JR: ··Well , ·Dan, just s top and t hi .nk . Let's
say you ge-t five ~ho~~~nd names .· As they/ begin t o
·
come in thr~ug~ the ~ys tem, can you send. those things . ·
all day long? Can you clear them to the twelve districts?
~
(
MR. BELL: I think w~at we should do·-is send each
District a · l ist and each name would be numbered ann then
when these come in we ..((an say' ·~send your circulars . to the
following- corporations corresponding to the · numbers on
your list . One, two; . t~ree and .so forth ."
H. iv(~ JR:
Y0u woul'd
l.ffi. BELL:
. H.1k. JR:
·
ju ~t
,.
have to send one nuni.ber?
\
Just one number .
' .
I think that wo.uld be all right.
MR. BELL:
That . would be one way_ of get ting it
a~curate, and eliminating them also fr.om their mailing
list, not duplicating that, ~ot giving them a notice in
case they didn ' t ~ant it . ·
~
'
.· H. M. J R: And. then if a fellow happens to be on their
list who didn ' t answer, it wouldn't be any· great trag~dy .
~
I
•
•
·.
•
MR. BELL: No, I don' t think so. They could el~minate
from their list· if they had t ime to pull tho se plates
on Sa tur.d ay. ·
H. M.JR:
Ye.s.
i'fow, who· works that out?
MR. BELL : ·That ,) 'fill be done through Kilby's off:tce •
....
'
H. M.JR: r · think if every one . of these could_be
numbered and._t_h~y c.ould . be sent to · the ·Feder~l ~eserve,
then .you could jus~ check them as they co~e .. ~n . Thatwouldn't take so long .
\
MR. ·BELL":
. ~.M. JR~
.
.
.•
No, that .wouldn't take so long •
..
Bec:ause some of these telegrams will begin
/
~·
"
I
.
.·
.'
to come . ~n Friday· mo~ing~·
MR .• -B~: · We might ge~ some of them . ~hursday.
MR.· BRYCE:
Oh, sure.
'
/
Ji.M. JR: 'And as .they come in they co~ld ·begin .t~
' ~le~r the nrum~ers.
MR. BELL : That is right.
H. M. JR: And then have.· it - and · then mai l t.hem 'to
·the t ederal Reserve Satui.'day night. . Everybody will
get it Monday morning .
·
MR. BRYCE .: l should .t}+ink your best an-swers would
cone the first day. 'They are the ones that .really wa.Itt
it and the oth,ers answer because they think i. ~is the
thing ·to do. But on · Thursday when you get. the wire;.
· they - well, . they ought to come i t! fast.
.
.
H-.M. JR: If ·you. mai 1 it Saturday n.ight you gain
Sunda.y '·s · train time s.o everyb.ody will h·ave it Monday
morning. : You ·haven't sold me yet not to keep it open.
two days th~~gh, Mr .· Bell~
MR. BEll :
1
.
haven.' .t I?
'
H.f'A . JR: .Not on all of this thing , no •
.- MR•...B.ELL:. Well , I don t t see much advantage in
keeping it open and I .d on't -think you will get many
more -.subscriptions and I do·n '-t . think yo.u w~uld g~t . many .
·subscriptions the first day. All of them would wa1 t
unt.il the· second day to subsCI.'i be just. like t~ey always
have in the ex~hanges. You do . run a l1ttle- cn~ce . After
all) you' are · announcing this on Saturday or malnng _up .
your· niind on. Saturday. . That means you ·don 't get the
results until Tuesd.a y night.
..
K.M. JR: Vfueri a·re you going to put it in the paper,
Sunday or Monday morning'l ·
.
t .
/
2?5·
.-:- 19
·.
..
.
.
.
.I. think we would ge t a li t'tle better
Monday'·s ·pape-r ; d'dn ' t you'? ':
_
.
MR~ BELL:
p:ubli~ity ·~n
of-
H. M.-JR: I ~hink s.o. , What do yo.u think
putting . · . .
the . announcement of thi.s on .t he ·air for, Mfon'day'?· Would
anybod~ listen?
·
MR.
BRYCE:
Not the crowd you are after.
H.M.JR: Then i~ would be just conf~~g. Well,
give me ten minutes to get .the cobwebs· out of my hair .
I would like both of ·you to cop1e back at eleveri. Geo rge,
vou ·too •
•
MR. · HAAS :
O. K.
, _
I
·.
\
{
.
I
~
.
. ·;
'
I
...
.
•
.
t
t
!J-IV'I' •"-•' upee\e \o -a~ ,UUe
otter.lac et aMtlt tno,ooo,ooo of ,,....u"T oenltleatee of
1Dctelt\e4M•• oa ....._,, Aprll 6, 1~2. · • · •nlft.•tee
!be
s.a-.,...,
I
will \1 lffei'H a\ par ..,_ vtll "b•r
d U.. ,.,,
of 1/'2$, -,.,altle "b7 enpoa• . 'l"h1 •hrl\r..wlll be alNnt\ da
IIOD\Iae.
. .~
·...._, oel"ppauo.. ~aaw s.auoa-.4 ..._ telln to tmat
O'IU'ru\ an
l•Uoa of "bGa~ti• tu4e la \ble , , . of ••nrl\7.
l u calli~~« \lt.le line \o J0V aUID\loa 11a01 U OOOVI \o \
• \ha\ 70V ootpora\loa . . , vleb ~o o"b\ala .... ot ~••
Uee oa 41no\ ev.beorlpUoa;
" ·
·~
1
••OUJ'l
April
~·•
J,
•••t
lt 70U will
\o~
. . ao\- lawr thu hldq enuq, · ~
1~, 1a4loa\lq JO\ll' iDMNI\, I eball N «1&4 \0
to 701l "befon Uw otteria« 4&\o _,1•~ 4A1Wle of
the· \eftla of \b11 heu ud ... \bat IOU an adT1ee4
a\ou~
uv
Goni"JUMD\ HftJ"lU••· Ae \he
be opoa onl.T ou 4q. pr.pt a oUoa 1e DIOIII&J'7
nba•,ua\ offerl.P ot
ofteriq ..:t
1f you vhh· to parUolpa\e.
.
~1AOII'I]¥ 70Ul'l,
.
,
I
,.
\
\
..)
4
,
·'
277--
..:.
_)
to
(Zf~ OP· !D IIAD 'AMD~--.)
ta
m .(amr JWCU'tln ornca> •
<em / · > .......
<--•
OR)
(DlftlUI)
-
'
... "'...., ~ ...... to . . . . ~-.;,...._
of • ' - ' .,,0001000 "' !1'11: . •» eil'tlftoahe _, t=t..,.ifalll
oa ....._,, Jp1rU be 1,.... fte ..Ufloa\ee wiU 'h en.... at
pal'_..a will be&~" ta~ •' U. h\e .t' 1/t$, ~ ._, ·
on:poa. !be aa\1111. '7 wlll be a'nt dx
••\he.
l!hmiotp.lUl. . kft l.D41aat.e4
aceuala\ioa of· fD&e ta. tide 'n•
thle li.U to jo1ll' aUe\loa · a1ac•
S\&t.e (ctu. Ona\7, Dte\rle\) UJ1
eeaan\lea oa 4l.nft .u..lp\la•
-
\he clfttft to lBYMt. oiwn•t
of aMU'tQ. 1· • eaUS..
U ocean toM \bat,_ \
whb \o oMala MM of \heM
'·
lt TOV. WU \el~ • Mt lat.ll' \han hlclq ~~
·
J, 1~, blleathe 7""' tatereet. l aWl 'be~ to haft ~
eat. to 7ft 'belen thf ott.tilc 4&\e COIIIplete utatle of tbl .
\II'IU o" We teeae ..& 111 that. yn ua a4YlM4 alo\1\ .-Paequat.
offert.ap ot Get..
1U.D' ......ut... A. tl;ae ... offll'bc -r \1 '
op• 1D17 ou u,, .,.._.,, aeU.o• h ..ce•MI"1' tf ~u wlllh to
parttclpat.e.·
:
April
\
.-
..
'
...
·. )
• '
'
278 .
/
tile !Ita· •1 ~_.....to_. a P"'bl1e
ott..UC ~ at.d ~OC»~ ~ ~ ~
ot iJIMM tln• • ~. Apftl I, 19.42- 7 tliF .
a:i ..,_
I I ,
nt tUft• PIS k
alia'
wiil.
...
JIU'
a\
MIIIMl. a. ·. .nuu. te. tdl1 be aa....
.
OOQJ:l-.
bT
~
1/2$,
beu' ~ at the ate el
..t.U.
m
be~
w1ll
TU abltr7
r• ....
'Dd'..W t.bi 6N1ft to~
a tla1a ~ ef .....-1\7'•
faDeei
l e U . .t
~ &10
~ .S..O. 1~ oeeva
7fiR
to
I a •'l'nc tibia S...
'o • t.Mt .,.r state (Clv, oa:it;, ~t)-., w:lab
to~ . . . ot.. . . ..e.iU M • cl1not ~ca.
a
\
l~pd.iU.. ~
,
. ~ tW;,, _
~ ~.'19WV ~- ~
. .JIIril. 3,
,.. w1l1 ~ • l'lidq ....wac
. ~
be ,w ·w ..- ., . w.- u. att..ua _
·1942/i ~ ...u.
el tile t,awa' ot tb1a i .... aD! . .
-
4de ·~
tbat ,_an~ about ~t ott~ ot ~ ··
_ . IMIII'it. iea. .u tM .., atfft.1Da. ~ t. Cll*l ..q CM
1t 1"'111Uil to pu'Uaip ate.
ia
dq, jJI'CIIIpt
..ru-
···-17
5'FT1re l1·7Gar lt
\
;
'
')
__
.. ,
I
·,
279.
/
to -
..,_,IC:. UH 'Wa
,_1811 fJI -
a.
r£11 . ,
~ fill ~
ot. hl's\tt..LIF a
.0 ..-a p.;.u.
o11 _. ••., ..un-w
April IJ lt0. ' ts& .
.,....,_ooo
J.
••iut
~
l,
1 '...,....
I
P M1
I 3 '
lt()ls 'I' ••
. . . . . ~ 1llll- tfta:ad d pe ... tdll
bar ~ ._, . . - - - - l/2$, P'QIIbl• ~ .... -~
!be -~-- win 118 . . . . .u ...... .
*ert• tiMIJI
e.u. .._ .
77. ,...
11aa7 ...,...U.. bPa iw41eW tM
1Jnoeft . . . . . . ••
trPe o4 _..__
'"''
-1~ ·~--
~ .
s.•
'•U. fill
I •
1a 1iiWt
.....
entnc tb1a ' - to , -
113. . .
~- -~,...
....-.u..
~ W'illl t. o1*1a .... fill - - .....1U.• - ~
-·~
~.£)
Jiri!),
)t~~'..
~~atter!JII
be allil to -.t 70IIl
I
.
't
.
.
betCift tt..
~
1942~
. da\e ~ tet.n. f/6 . . - - t4 tbU 1 - . Md
' . . ., JWa ..... ~ ~ ~-- atter!ilp ol
Coftlt I I \ .....-lU... U the _. oltw1J2c _, be apeD
~ JW w1ab t.o
oalJ - - · pftlllpt. ..u. u M08UU'7
.
pvUoipate._
..
'
.I
I
)
I
_-.L .
I.
.
. '.
.280
.
.•
...
,.
¥aro'h 31,, 1942
11:00 am
'
/
FINANCING
~Present :
:
~
.
Mr. Haas
'-
Mr~
Buffington
Mr . Bryce ·
Mr. HaQley . · .
. .v- - Dr . · Goldenwei s·er
Mr. Eccles ·
. · Mr . Piser
Mr . Dra·p er
. Mr •. S~ymc:?ak
Mr . Baker
Mr. Williams
. Mrs, Klotz
~
I
\
'·
...
us
R.M. JR: Dan, take a minute and tell
where we
stand between nOW and the first df July, Will you,
please?
I
. MR. BELL : Well, . it .lo'oks as though our reven.ue
astimates are going to be about five hundred million
doll~rs more in March than we anticipated, so that is
going to give us a balance going· out of' March of about
two ~nd.·a half billion . Carrying that on through to ·
April with a billion ·and ~ ' half financing in April we .
would go out of ·April with about two billion one-, ~liminating the two . hundred m~ l.lion bills that we had
ln there before •
.. H.M.JR:
Just ·say that again, Dan~
MR. BELL: · If we have a billion. _ahd a .half financip.g\ in ~pril~ . as was or~ginally co~tEmplated, and
'
,.
p:·. . .
,•'
.281.
·- 2 -
..
·•
elimin~ting · the increase .in bill.s .and wi~h the increase
in .. rev-enue that -we have go.t·, we will go out of April .
with abou~ ·two b~lli_on one. ·And then in Jl&y we con tem-. . .· :
plated another .-b~lli?n and a .hal£ financi~ .:and ~wa hundred
mHlion· do.l lars 1n b1l-ls.
' /
. ·
·MR. ECCLES:
~
That
i~ . t~o
hundr·e·d million a we'ek?
- MR. BEL!;: · Werl, it is t wo hun.dred
a month.
mi~ion. ~xtra
1
f r~
.MR. ECCLR$: Go
a hundred 'and £1fty up to two.
MR.~ ··BELL:
Tha.t is right . We wou~d go out of May
with about a ·billion and a hal f . · Then in June ·we con. templated two billion ·dol lars in financing and two h~
drea million dollars in bills, so· eliminating .t he two
hundred million dollars in bills , and assuming·we get .
about thr-ee hundred million dollars in extra taxes, ··we
ought to go -out of June with about two bi l lion . do l lars. · ~
In the· three months. that contemplates f ive billion
dollars in financing. We will go out of Jun~ with about
a two billion dollar · balance·.
· ·
1
incr~asing bills how .much in
'" ..
·
·
MR.'. BELL: That .isn It' increasing bills at al l.
That is leaving bills ~s - they no~ stand • .
MR. ECCLES:. That is.
that, Dan?
1iR•.·ECCLES:
I thought·- -
MR. BELL: We ·did have a. bill progrwn· in the original
but .I eliminated
the
bi ~l s.
...
.
.
.
set~up,
MR; ECCLES: ·That leaves them ~t. a billion nine,
doesn't. it, about?
.
: · '\
.
Y~s.
. MR. BELL:
Now, if you inyrease , bill~ dur~ng
the three months, 'it woul~ decrease your June f1nanc1ng,
which\:is . set out here .as two b,illion dol~ars.. · . . _
..
.•;
I
·.
282
·- 3.
.
.
.
·'
~
I
MR. ECc-LES: · . That contemplates a bi\l.li.on and a half'
in April _of certi~ic~tes, and then a billio~- and· a . half
in -May., and two b1.ll1.on · in, June, or five billion. ·
a
.
.
MR • .BELL:
bills .
·
That could be· ae·c reased- by addi tiona].
____./
MR. ECCLES: Two hundr-ed million of bills a ~eek .
·
Let's . see, you ·. paid off some of the .bills·~uring this
.
tax period . There were some maturi tie _s . ·
·
.
1/Jli. - BELL:
I
We a~e getting those back-.
And you will haye those al l back by
. MR •. -ECCLES:
when?
-
MR. BELL: April eighth.
.
....
\
.
MR. ·ECCLES: And then it will be· a: turnove-r of
two hundred million a we~k?
.. MR.. BELL i
No,. a hundred . and· fifty million.
.
-~
.
ECGLES ~ W~ll, in those ·fi-gures you talked of
'two hundred million a week .-
1
MR.
· H.M. JR: I think he _misspoke
~imself ~
¥R,. BELL : ·No, I wa.s. speaking of1 extra money a
month . This. estimate was made up·, you recall, when·we
had ~he. · last ·.~eeting .
:MR. ECCLES -: You sa.id fi:ve ~ billion ot .new financ-.
ing without biils.- In discussing your program I thought
y~>U were talking .about -gett-ing fifty: million ·e xtra a . ·.
week in bi~ls .
·
·MR. BELL: No, sir. I was eliminating that as I
went along.
\ MR..·. ECCLES:
I see;
.· ;
/