The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
DIARY
Book 520
April 23 - 26, 1942
A
Advertising Council
Book
Page
520
251
See Financing, Government: War Savings Bonds
(Payroll Savings Plan)
Airplanes
Aircraft despatched - British Air Commission report 4/24/42
Alien Property Custodian
See Foreign Funds Control: General Aniline and
Film Corporation
American Bankers Association
Executive Council meeting - report on - 4/24/42
Aurand, Evan - Lieutenant
McCloy suggests to HMJr as participant on a War
Bond broadcast - 4/24/42
Australia
261
245
See Gold
Automobiles, Treasury
HMJr asks Thompson to investigate car-sharing plans
of employees and use of cars by Treasury officials -
4/27/42
a) Thompson memorandum - 4/27/42:
369
See Book 521, pages 101 and 203
b) FDR's letter - 4/28/42: Book 521, page 218
c) First report to FDR - 5/29/42: Book 534, page 29
-BBarth, Alan
"Editorial Opinion on the War": Reports suspended 4/23/42
98
a) MacLeish offers HMJr successor report:
Book 522, page 121
Budget, Bureau of
Revised budget figures - 4/24/42
258
C-
Campobello, New Brunswick, Canada
Automobile ferry correspondence - 4/23/42
(See also Book 524, page 66 - 5/5/42)
Censorship, Office of
Films and other photographic material entering and
leaving United States: Customs cooperation
extended - 4/23/42
91
95
China
Stabilization Board: Chinese Treasury notes instead of
fapi and circumstances governing inclusion of that
portion of United States $50 million which has been
secured by purchase of yuan by Secretary of Treasury
discussed in cable from Adler at Chungking - 4/23/42
Chinese assistance to British Army in Burma: General
Stillwell's telegram to Generalissimo - 4/24/42
Hong Kong and Shanghai Banking Corporation: Establishment
of branch at Chungking discussed by Hall Patch and
Gauss - 4/25/42
137
278
396
- c - (Continued)
Book
Page
520
222
Correspondence
Mrs. Forbush's resume - 4/24/42
a) Sales tax opposition still great
b) Lotteries advocated extensively
-E-
Exchange Market
153,295,403
Resumes - 4/23/42, etc
--Federal Reserve Bank of New York
See Stabilization Fund
Financing, Government
War Savings Bonds:
For War-Navy-War Production Board-Treasury talk, see
Speeches by HMJr
West Los Angeles Post Office: Lack of stamps discussed
in correspondence with Post Office Department 4/23/42
Payroll Savings Plan:
5000 or more employees - Federal Reserve System letter
to all Federal Reserve Banks urging support of
program - 4/23/42
Operations of in March - 4/24/42
Advertising Council offers assistance - 4/25/42
Conference of staff - 4/24/42
a) Issuing agents, Payroll Savings Plan, etc.,
83
86
214,217
326
165
discussed
Phelps-Dodge Corporation: Qualifying as issuing agent 4/24/42
199
Work Projects Administration worker in Illinois dismissed
because of purchasing of War Savings Bonds; reinstated
later - 4/24/42
(See also Book 521, page 316)
Progress report - 4/24/42
Comparative statement of sales during first 20 business
days of February, March, and April, 1942 - 4/24/42
Godwin, Earl: To be provided with kind of material he
wishes for broadcasts - 4/25/42
200
203
220
325
Foreign Funds Control
General Aniline and Film Corporation: Crowley asks for
release of all control to Alien Property Custodian and
transfer of all records and files - 4/24/42
a) Treasury transfer
266
270
France
Review of situation by John Wiley upon advent of Laval
to power (April 21, 1942)
122
-General Aniline and Film Corporation
Book Page
See Foreign Funds Control
Glass, Carter
For "Glass Plan, # see Revenue Revision
Godwin, Earl
See Financing, Government: War Savings Bonds
Gold
Java: Shipment arrives in New Orleans with bullion
value of $2,539,000 to be placed with Federal Reserve
Bank of New York earmarked for account of De Javasche
Bank, Batavia - 4/25/42
a) Shipment delivered in Australia also reported
520
376
Government Bond Market
Recent Changes in Prices and Yields of Government
Securities: Haas memorandum - 4/24/42
264
-HHawaii
Bearer securities discussed by Ickes and HMJr in view
of possible Japanese invasion - 4/23/42
Ickes, Harold L.
See oil
24
--
Inflation
See also Silver
Interest Rates: FDR to be urged in message to Congress
to announce that interest rates will be held at
present levels for duration - Bell memorandum 4/23/42
18
Office of Facts and Figures offers support in voluntary
savings program - 4/23/42
Interest Rate
See Inflation
80
-JJapan
Atrocity Stories: HMJr asks Kuhn to check for use on
Treasury broadcasts - 4/25/42
374
Java
See Gold
-LLAFAYETTE, USS
See Ships
Lend-Lease
Report on purchases for week ending April 25, 1942
U.S.S.R.: Shipment of planes and tanks to - Kamarck
report - 4/25/42
385
392
-MBook
Page
520
254
McCarran, Pat (Senator, Nevada)
See Silver
Merillat, Herbert
Editorial Opinion on Taxes: Waiting for Guidance 4/24/42
Military Reports
British operations - 4/23/42, etc
Coordinator of Information reports:
The War This Week, April 16-23, 1942.
British Home Intelligence Report, week ending
April 22, 1942 - 4/25/42
British Ministry of Warfare Weekly Propaganda
Digest - 4/25/42
Kamarck summary - 4/23/42
154,155,297
404,429
158
405
407
159
-NNew Zealand
Dollar telegraphic transfers, etc.: Procedure for
negotiation with British Government outlined in
cable to American Consulate General, Wellington -
4/23/42
(See also Book 521, page 190)
148
United States paper currency and official drafts:
Plan of procedure for disposal of - 5/8/42: See
Book 526, page 319
-0
Office of Facts and Figures
See also Inflation
"Editorial Opinion on the War": Barth (Alan) reports
suspended - 4/23/42
a) MacLeish offers HMJr successor report:
98
Book 522, page 121
011
Conversion to Coal: Ickes asks about deduction on
income taxes - 4/23/42
a) Ickes-Treasury correspondence - 5/12/42:
25
Book 527, page 341
P-
Phelps-Dodge Corporation
See Financing, Government: War Savings Bonds
-RRevenue Revision
Glass (Carter) Plan: Sullivan memorandum describing 371
4/25/42
Tax-exempt Securities: See Roosevelt, Franklin D.
(Message to Congress)
*b) Ickes-HMJr further correspondence - 5/29/42: Book 534, p. 128
- R - (Continued)
Roosevelt, Franklin D.
Book
Page
520
298
Message to Congress:
Rosenman-HMJr conversation - 4/25/42
Draft 2
Treasury suggestions
Draft 4
a) No net income over $25,000 a year after payment
of taxes
301
314
410
b) Interest from State and local securities should
at least be subject to surtaxes
c) HMJr's letter to FDR (not sent) advising against
taxing directly or indirectly outstanding
Federal obligations wholly or partially tax-
exempt on any basis violating present exemptions
1) HMJr sends FDR copy of press conference
on - 4/27/42: Book 521, page 56
-Securities, Government
See Government Bond Market
Shipping
Port of New York: Daily report on vessels - 4/23/42
a) Transmitted to Douglas (Lewis), United States
103
Maritime Commission - 4/23/42
109
Ships
USS LAFAYETTE (formerly NORMANDIE): Congressional
report on capsizing - 4/25/42
382
Silver
Possible rise in price discussed in Henderson-Treasury
correspondence - 4/25/42
Legislation: Senator McCarran (Nevada) consults Treasury
about possible recommendations for repeal - 4/25/42
(See also Book 521, page 206 - 4/27/42)
a) White memorandum - 4/27/42: Book 521, page 112
377
379
b) Conference: present: HMJr, HM III, White, Foley,
B. Bernstein, and E. M. Bernstein - 4/28/42:
Book 521, page 273
Speeches by HMJr
Nation-wide War Savings Bonds broadcast May 4: Stimson,
Knox, and Nelson asked to participate - 4/23/42
a) Nelson accepts - 4/24/42
b) Knox: unavoidable engagement - King will
substitute: Book 521, pages 86 and 295
72
198
c) Stimson-HMJr conversations - 4/28-29/42: (Book 521, page 288
522,
d) Talk postponed
38
.
521
296
522.
40
Army's Payroll Savings Plan for Civilian Employees:
HMJr's talk with Stimson for the newsreels - 4/24/42
Stabilization Fund
Federal Reserve Bank of New York: Services rendered resume of - 4/24/42
196
276
-
T
Book Page
Tanks
Production goals reviewed by Kamarck - 4/23/42
520
89
-UU.S.S.R.
See also Lend-Lease
Purchasing Commission thanks HMJr for courtesies 4/23/42
128
-WWar Savings Bonds
See Financing, Government
Work Projects Administration
See Financing, Government: War Savings Bonds
m
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
1
DATE April 23, 1942.
TO
Mr. Morgenthay
FROM
Mr. Gamble
2/2
Answering your memorandum of today's date, we have a War
Bonds Speakers' Bureau in every State organization and in
every local community handling most of the speaking
requirements. Occasionally, the Field Director's Office
here in Washington is contacted for an outside or national
speaker; such requests are channeled through Mr. Sloan's
office.
2
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Ted Gamble
FROM
Secretary Morgenthau
April 23, 1942.
Who handles requests for men and women speakers
for War Savings Bonds? Please let me know today.
in 3-
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Mrs. Klotz
FROM
Mr. Gamble
April 23, 1942.
The Secretary has asked me to give you a memorandum of various
and sundry pieces of work which he assigns to me from time to
time so that you will be able to follow up on such activities.
There is attached a copy of a memo regarding information for
handling War Savings Bonds speakers (the original has already
gone to Mrs. McHugh).
{
I am checking on future appropriate speaking engagements for
Mrs. Morgenthau. Also, I'm checking on capable people to
relieve Mr. Kuhn of some of the work in preparing speeches.
finished
Attachment.
Completed Comy rather
in 7,ATH
n
April 25, 1942.
Mr. Morgenthan
Mr. Gamble
Answering your memorandum of today's date, we have a War
Bonds Speakers' Bureau in every State organisation and in
every local community handling most of the speaking
requirements. Occasionally, the Field Director's Office
here in Washington is contacted for an outside or national
speaker; such requests are channeled through Mr. Sloan's
office.
of
12th
5
April 23, 1942.
Mr. Harold Graves
Secretary Morgenthau
Be sure and talk to me today about Keith Morgan.
See Graves memo 04/35/42
6
Mr. John Sullivan
April 23, 1942.
Secretary Morgenthau
This will confirm my telephone conversation
with you last night. I want to go after the companies,
like the Jacks & Heintz Company in Cleveland, who are
paying excessive salaries, and let's settle the question
once and for all if we have the power to disallow those
salaries. I think it's outrageous in companies with
war contracts to pay these high salaries, and it will
make for bad feeling in the country. I think it is up
to the Treasury to take the leadership to either disallow them or go after legislation which will make it
impossible. In any event, I would like you to start this
at once. Please inform Mr. Helvering, who in turn
should inform his people, that I mean business. I want
an answer on this Cleveland Company by Friday if
possible.
See Sullivan's memo of 4/20Sullhism Lathed
this 4/85
See mino sandmitted
by Sullivan 5/8/42.
See Hopi's testimony
5/28/47
MEMORANDUM
April 23, 1942.
TO:
The Secretary
FROM:
Mr. Sullivan
Ins
The Bureau of Internal Revenue has talked with
Cleveland and we expect a preliminary report on the salaries
and bonuses of officers and employees of the Jacks & Heints
Company tomorrow morning, Friday, April 24th.
8
April 23, 1942
8:30 a.m.
Vincent
Callahan:
Good morning.
HMJr:
How are you?
C:
Fine.
HMJr:
C:
HMJr:
Are you at your office?
Yes, sir.
Bright and early. Vince, I sent you over a
memo that ought to get there in a little
time
C:
HMJr:
All right.
suggesting that we send around to the
home of every Congressman a notice of this
broadcast.
C:
Good.
HMJr:
Tonight.
C:
All right.
HMJr:
You'll get it, and you can work it out somehow
C:
HMJr:
or other.
Well, we can get the post office up there to
deliver it or something.
Somebody. Now, the thought I had is, I saw
the notice, for instance, you sent Mrs. Morgen-
thau. That's all right, but the envelope isn't.
You ought to have some kind of an envelope that
they know that - from the outside - it's a
broadcast.
C:
Well, we can find something.
HMJr:
What?
C:
We can find something. I don't know offhand.
9
-2HMJr:
Well, if you can't get anything else, use
my own personal envelopes.
C:
HMJr:
The Secretary's? All rightie, fine.
And then mark it - couldn't they do it in
longhand?
C:
Well, let's see - well, what we got - I'll
tell you another mark that would be better -
"By Special Messenger".
HMJr:
Well,
something so that it will catch their
eye.
C:
Yeah, something distinctive.
HMJr:
See?
C:
Yes, sir.
HMJr:
I just thought we'd give this thing a little
distribution.
C:
Fine.
HMJr:
And you'll be getting it shortly.
C:
All right, sir. It's going to be a grand
broadcast tonight.
HMJr:
Do you think so?
C:
Oh, I know so. The men who are doing the
writing
HMJr:
Yeah.
they came back from Mr. Kuhn, who had been
C:
talking with you, and they were very enthusiastic.
HMJr:
Good.
C:
They had to re-write it, of course, and they
said they didn't mind it in the least, that
interest in it. They were thrilled.
it was 80 much better and had so much human
10
-3-
C:
Well, that's a nice spirit.
Yeah, it's grand spirit. Well, you started
it yesterday when you dictated it, and they
all got a great kick out of it.
HMJr:
Okay.
C:
Okay, sir.
HMJr:
All right.
C:
Good-bye.
HMJr:
11
April 23, 1942
10:10 a.m.
PRESIDENT'S SPEECH
Present: Mr. Sullivan
Mr. Kuhn
Mrs. Klotz
H.M.JR: These two memos that you gave me of
which I have no copies, the one I call the political see 4/22/42
speech, and the one on profits, please give copies to
Mrs. Klotz for my file, because the President kept
them both; and the part at the end where it said about,
"If you freeze salaries, or something like that, "it
would have a bad psychological effect. He says, "That
is nothing but clap-trap. If He says, "That is living
twenty years ago.
MR. SULLIVAN: That was in the memo, I think.
H.M.JR: Whatever it was, he said, "That is just
clap-trap. If
MR. SULLIVAN: That is the memo you want a copy of?
H.M.JR: Now, it was lucky I went over. In the first
place, I think he entirely forgot that he promised me he
would back me up on the War Bonds. When I reminded him,
he said, "Of course, of course." He is only talking
thirty minutes, but he said he was going to do very
little taxes. This is what the President dictated. He
said, "Give me something like this." Then we will have
to give Mr. Kuhn a copy. "The Volunteer tax plan is
working so well that it is believed not essential to
change at this time to compulsory savings until we have
had a chance to step up the volunteer plan to try to
make it include practically everybody in the country."
"
12
-2MR. KUHN: In other words, he is holding the club
of sompulsory savings over their heads.
H.M.JR: Well, that is what he dictated, it is
not essential at this time.
MR. KUHN: That implies that--
H.M.JR: What is the matter with that?
MR. KUHN: It is going to discourage buying and
enthusiasm. It is the worst possible way to help the
volunteer thing. It is better not to speak of it at all,
in my opinion, than to make that kind of statement about
it. I would rather have him neglect it altogether.
H.M.JR: Well, leave out - you see, this doesn't
check, because when he told me that I should go out
Wednesday and Thursday night - I want to get away from
the controversial question of compulsory and volunteer.
MR. KUHN: And there is the controversy right off.
H.M.JR: Listen, is Peter in town today?
MR. KUHN: I don't know. I haven't seen him. We
have that material that went over to Rosenman.
H.M.JR: Anyway, Ferdie, if we clear our script
this morning - we will, won't we?
MR. KUHN: I hope so.
H.M.JR: We have got to. Then right after that,
go on to this, will you?
MR. KUHN: Surely. I would like to go back to the
stuff that was sent over to Rosenman, which can be shortened.
H.M.JR: But he is only talking thirty minutes, and
I gather that twenty minutes will be on prices. He is
going to say - I understood him to say he will say
-3-
13
Nothing on taxes. He said, "Well, Henry, if I say
anything - this is all very nice, but I have got to
talk twenty minutes on the prices and then ten minutes
about the war." lie says, "I haven't got any time to
talk about your taxes. Well, now, what I don't get
is this, and as I say - but he did tell me - he now
wants to go back and I told him I didn't remember it.
I didn't want to give it. The reason I am so nervous,
you know these fellows work and try to pump this into
me in thirty minutes and this tax thing, I can't get it
that fast. The Carter Glass plan of '33 or '34, he
says, as he remembers it, left out any normal tax on
Government bonds and you compute your income from the
Government tax exempts and then apply a surtax. Well,
you know what he is talking about.
MR. SULLIVAN: That is right.
H.M.JR: Now brush it off, will you? I said, "Do
you want it for this speech?" He said, "No. But he
says, "We have got to do something about the unusual
cases of the corporation or the man who escapes, you
see. Now, I read this stuff and he says it is
all good, and John, if the old elbow ever was right,
I was right last night when I told you fellows to go
after these - the Jack and Heintz cases, and the
Diamond T cases, and the rest of them, you see. We
have got to do something sensational along those lines.
If we don't we will get something that nobody likes,
see. Now, we have got an organization over there.
Let's go to it, see. I told the President - I mean,
I am looking up to see whether he can use any of this
stuff. But, certainly, I am personally going to go up
and present it to the Joint Committee on Taxation. Now,
I don't have to say it is an executive meeting. I will
just give it to them and let them do the rest. Let
them find out why the Diamond T employs three men at
two hundred fifty thousand dollars a year here when
I am ninety percent sure they can't take an order and
they are most likely loaded up to here now. Now, he
has told me unhesitatingly that I can see his speech
-4-
14
where it affected the Treasury. I have got a call
in a for Grace Tully, so pending that-MR. SULLIVAN: Has it been written?
H.M.JR: I don't think so, but he said he was going
to work on it today and tomorrow. but I am here this
weekend, but until I see it, I am not satisfied. The
way he talked to me was as though he was surprised to
think that I thought he was going to talk about taxes.
MR. SULLIVAN: Well, I think the reason we are
surprised is that all of the newspaper publicity has
indicated that it was an over-all speech.
H.M.JR: Well, I don't want - my guess is, you see,
from what he told me about not asking for legislation,
that he has taken my advice. My advice to Rosenman was,
"Appeal to the hundred and thirty-five million people
that they should do their part on prices, etc., etc.
Use what you have and don't ask for any legislation.
Instead of doing what the other fellows--' They wanted
him to go with a message to Congress which was written.
Now, I said, "I wouldn't do it that way. I would go to
the country rather than the Congress, because you will
get licked if you go to the Congress and I think you
will win if you go to the people. Now, it looks as though
he is going to do it my way. Now, the other day when
Henderson told his man Gilbert who told Harry White Gilbert told him - that they completely wiped me off
the slate this week. I didn't have a leg to stand on.
Now, it looks as though the President is going to take
my advice, but I don't believe until I see the thing
in print and then hear it on the radio - I don't know,
so I don't want to get too excited.
MR. SULLIVAN: I am not too much disappointed
about leaving taxes alone because unless he was going
to be with us--
H.M.JR: Well, really there is nothing more for
you (Sullivan) to do until I get the copy from Grace
-5-
15
Tully.
MR. SULLIVAN: Except Jack and Heintz.
.M.JR: Well, and-MR. SULLIVAN: And you want a memo to bring you up
to date on Carter Glass. see mm
H.M.JR: Yes.
MR. SULLIVAN: The Glass plan.
H.M.JR: Yes, but John, old man, Jack and Heintz
is one.
MR. SULLIVAN: Well, I was using it just as a
symbol.
H.M.JR: Now, the way 1 would do, if I may make
a suggestion, there are three hundred fifty companies,
roughly, who have got eighty-five percent of the contracts, and I would take that list of three hundred
fifty and say to your boys, "Of these which have made
returns, I want to go after those first," see. You can
get that list from Nelson, the three hundred fifty. And
there is no use fussing around with those that haven't
made returns, but those who have, check them off.
MR. SULLIVAN: That is right.
H.M.JR: And then just as soon as we have got a
dozen good ones that we have done, then we will go up
on the Hill and say, we want a joint committee, and
we will say it. We will leave it to these fellows to
spread the word. What?
MR. SULLIVAN: That is right.
H.M.JR: And - but if we don't do that - I mean,
we will never get this bill through unless - on our
basis. We will get something terrible. You tell them
+/25/42
-S-
16
that it is orders from me and I think these corporations
should know it now, no more extensions after the fifteenth
of May unless it goes across my desk, and I won't give
it to them. These companies with war contracts, no more
extensions, see. But let's go after the boys that have
filed. There are three hundred fifty companies who have
got eighty-five percent of the business. It would be
awful if the Utah Construction Company doubled the
salary of the chairman of their board. (facetiously)
Listen, John, put yourself in the frame of mind of a
fellow, you are going to run from your district and
you want some of this stuff, see.
MR. SULLIVAN: Sure.
H.M.JR: Blood and meat. Go up there on the thing
and say, "By God, we took this thing. Sure this company
did this thing, but did it benefit them? No, we disallowed it. What happened to the girl that got forty
thousand dollars? Well, we got twenty-five thousand
of it. We can't control that, but did the company
benefit? No, it was disallowed and added to their
taxes. We have got to get a little political on this
stuff.
MR. SULLIVAN: I am for it.
H.M.JR: Now, Ferdie, there may be a meeting. If
I hear, I will let you know. On this - there is supposed
to be one between eleven and twelve on the Economic
Board. If I hear of it I will let you know, but otherwise,
we will do the radio script at eleven.
MR. KUHN: Yes. Now, I have got those Lord and
Thomas people. Do you want them in here at eleven or
later on sometime? They are not interested in radio
script primarily. They have got a bunch of ads that
they have made that they want to show us. Our little
group is meeting at two-thirty, Mrs. Morgenthau and
Gaston--
17
-7H.M.JR: At two-thirty?
MR. KUHN: Yes. And we will go over those ads.
H.M.JR: O.K.
MR. KUHN: I can present your apologies to them
for this morning.
H.M.JR: Now, what are we going to do - this other
man, what's his name?
MR. KUHN: Masius?
H.M.JR: Yes. I have got a job I want him to do.
MR. KUHN: He is here.
H.M.JR: Well, I can take him off your hands, but
what about Weir?
MR. KUHN: Well, Weir will stick with me. I want
him to look at that script, too.
H.M.JR: Well, you can use Weir?
MR. KUHN: Yes.
18
Treasury Department
Office of the Under Secretary
Date: 4/23
To: The Secretary
From:
Here is memo
about which I spoke
over phone.
DWF
19
Interest Rates and Price Freezing
According to the press, President Roosevelt will send
a message to Congress next Monday and speak to the people
of the country on the radio the same evening on the subject
of inflation. In this message he is expected to advocate a
freezing of prices and costs, including, perhaps - at least
to some extent - wages.
This naturally brings up the question of whether some
mention should be made of interest rates. The President's
message would seem an ideal occasion to announce that in-
terest rates will be held at around present levels for the
duration of the war. Such a declaration, if incorporated
in the President's message and talk, should probably be
brief and non-specific.
Such a declaration would appear to be opportune from
two points of view:
(1) It would be helpful to public morale
if the country were assured that
interest receivers will get no more
favorable treatment than wage earners,
business men, and landlords.
(2) It should aid in steadying interest
rates at a time when the volume of
Federal financing is expanding very
rapidly, and assist in bringing to
the market funds which have been
waiting for higher rates.
HCM
20
April 23, 1942
10:11 a.m.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Yes.
Jease
Jones:
Henry?
HMJr:
Yes, Jesse.
J:
How are you?
HMJr:
okay.
J:
HMJr:
Are you going to that BEW meeting at eleven?
I haven't got any notice yet. Well, I tell
you, I've been over at the White House, and
I don't know what my appointments are. Why?
J:
Well.....
HMJr:
Well, wait, let me ask my man, will you?
J:
Okay.
HMJr:
Just a minute, please.
J:
Yeah.
HMJr:
(Talksataside)
Have I any notice on the White
House
eleven?
They told us yesterday it would be between
eleven and twelve, Jesee, but I haven't had
any confirmation.
J:
Ithe
see.
Well, but you're - are you going to
meeting?
HMJr:
At the White House? Sure.
J:
will you take somebody with you?
HMJr:
No.
21
-2J:
It's - I didn't know - it's BEW business,
you know, and I didn't know whether you took
some of the boys with you or not.
HMJr:
Well, if I get the notice, I'd go alone.
J:
I see. Okay.
HMJr:
It's this - see if we're talking about the
same - it'e this Economic
J:
Board of Economic Warfare.
HMJr:
Yes. They said it would be sometime between
eleven and twelve.
J:
HMJr:
I see.
Why, do you mean about - you're thinking about
yourself?
J:
Yes. I was going, of course, and I was wondering
if - I'd like to take Clayton along because he's
been doing most of that work.
HMJr:
Yeah.
J:
And I just wondered whether or not
HMJr:
Well, if I go, I'm going alone.
J:
Okay. Thanks.
HMJr:
You're welcome.
22
April 23, 1942
10:28 a.m.
HMJr:
Randoloh
Paul:
Randolph, are you where you can listen?
Yeah, I'm in a pay station.
HMJr:
Well, I don't want to raise your hopes too
much nor mine, but I think we're all right.
P:
Oh, good.
HMJr:
I think we're all right, and we're
P:
You've come back from there, have you?
HMJr:
Yeah.
We're going to see the copy that affects
the Treasury
P:
oh, swell.
HMJr:
and he seemed to be surprised to think
that I thought he was going to write anything
on taxes. How did I get that way?
P:
Hmm.
HMJr:
He didn't have time to fool around with taxes.
P:
Hmm.
isn't it?Well, that's kind of baffling though,
HMJr:
What?
P:
That's baffling, ien't it?
HMJr:
Yeah.
P:
Well, I'm glad to hear that.
HMJr:
But anyway we're going to see whatever he
says.
P:
HMJr:
Yeah. Well, that's
And, as I say, he seemed - his attitude was,
well, what makes me think that - he's only
23
-2got thirty minutes. He hasn't got time to
go into all this stuff.
P:
Yeah.
HMJr:
So that was his attitude.
P:
Yeah.
HMJr:
I thought I'd cheer you up.
P:
Thanks very much for calling me.
HMJr:
And that's just very, very much between us.
P:
Okay.
HMJr:
But we are going to see the speech.
P:
HMJr:
P:
Well, that's swell.
So - but he seemed to think, well, where did I
get those funny ideas from.
(Laughs) Well, that's curious.
HMJr:
Yeah.
P:
Curious and kind of baffling, but I feel encouraged.
HMJr:
Okay.
P:
Thanks for letting me know.
HMJr:
Thank you. Good-bye.
First half of this sent to D. W. Bell; second half to Mr. Paul.
24
April 23, 1942
11:04 a.m.
HMJr:
Yes. Harold?
Harold
Ickes:
Henry, two things.
HMJr:
Yes.
I:
A
fellow from - went over to Hawaii - Hossack
of RFC.
HMJr:
Coseack?
I:
H-o-s-s-a-c-k.
HMJr:
Yeah.
I:
He tells me that there are an enormous lot of
bearer securities over there, and that if the
Japs should SWOOD down there, all they have to
do is to pick them up.
HMJr:
Oh, oh.
I:
And he said that so far, all they've ever done,
the Army has invited those who owned Government
securities to deposit them
HMJr:
Yeah.
I:
with them, but nothing is done about these
general securities.
HMJr:
Well, I'll be glad to have it looked into. We
did a good job in the Philippines.
I:
You did a wonderful job, and we don't - God,
they - there's - I think he said there's two
hundred million over there.
HMJr:
Really?
I:
And we certainly don't want to be caught - we
don't want a financial Pearl Harbor.
HMJr:
No. Well, I'11 have it looked into right away.
25
-2I:
And, of course, we'11 be willing - I - you
know
I've got
a damn good man over there,
and - Ben
Torron.
HMJr:
Oh, Torron.
I:
Torron's over there
HMJr:
Well, then, if
I:
HMJr:
I:
a special representative of the Secretary
of theasInterior.
Right.
And he's a damn good man. You know that Ed
Foley's worked with him for years.
HMJr:
Good.
I:
And we'll give you all the help that we can.
HMJr:
Well,
I'11 have the boys look into it right
away.
I:
Now, another thing.
HMJr:
Yeah.
I:
In cases where it's going to be necessary to
turn - to convert from oil heating to coal
heating
HMJr:
Yeah.
I:
it's going to throw - now, just in my own
case, I'm checking up on the thing because I'm
getting ready to convert - it's going to cost
me at least a thousand dollars.
HMJr:
Yeah.
I:
Now, wouldn't it be worth considering allowing
that as a deduction on income taxes?
HMJr:
(Laughs) I don't know, Harold.
26
-3I:
Well,
HMJr:
Yeah.
I:
There's only one section of the country
affected - the East Coast.
HMJr:
Yeah.
I:
It's a general war cost.
HMJr:
Yeah.
I:
Not only that, but they'11 probably have to
pay more for oil and gasoline here.
HMJr:
Yeah.
I:
now, here. Just consider this.
It seems to me that it throws an inecuitable
burden.
HMJr:
Yeah.
I:
Think it over, anyhow.
HMJr:
Sure. Harold
I:
Yeeh.
HMJr:
let me ask you. Did you make 8 joint
statement with Nelson on either Friday or
Saturday?
I:
On oil?
HMJr:
Yes.
I:
Yes.
HMOr:
Well, now, what day was it, because I didn't
see it. Was it Friday or Saturday?
I:
I didn't see it either, as a matter of fact,
but I think it was Friday.
Yeah. Well, I
HMJr:
27
-4I:
I know it wasn't Saturday.
HMJr:
Somebody
didn't
see asked
it." me about it, and I said, "I
I think it was Friday.
I:
HMJr:
Friday.
I:
Yeah.
HMJr:
Could
to sendyou
me -a would you mind telling your man
I:
I'll send you a release.
HMJr:
Would you have somebody send me over a copy of it?
I:
Sure, I'11 be glad to.
HMJr:
I:
And on the other thing, I'11 look into it.
All right.
HMJr:
I thank you.
I:
Good-bye.
28
April 23, 1942
11:13 a.m.
HMJr:
Hello.
John J.
McCloy:
HMJr:
I just wondered whether you're up to date on
this - on these take-overs. Have you been
talking
about it?to - has White kept you informed
The only thing that I knew, he said he thought
you were about ready to do something.
Mc:
Yes. We're going to give you a check, but
it turns out that the cost of those planes -
the entire cost of them, which, as I understand,
is being approved by the President today,
only runs to about sixty-seven million dollars
instead of the eighty.
HMJr:
Mc:
I see.
So that figure is somewhat reduced. The other
figure,
the ordnance
we're putting through
a
directive
today on figure,
it
HMJr:
Yeah.
Mc:
subject only to clearing up with - between
White and Phillips as to how the operation ought
to take place. I have a clearance now from the
Secretary, and we're all set.
HMJr:
Wonderful.
Mc:
Now, but that is going to reduce it - it's going
to make it necessary to pick up other money
HMJr:
That's all right.
Mc:
same place else.
HMJr:
I suggest that the nicer way to do it would be
to have you come over here to my office with a
letter or check, and have Sir Frederick Phillips
here, and have the thing done right here.
Mc:
Okay.
29
-2HMJr:
I thought that would be a nice way to do it.
Mc:
Okay. I'll bring that old letter with me
and you can re-deliver it.
HMJr:
(Laughs) I'll
Mc:
How'd you make out with Brink and Clear?
HMJr:
All right, but to be perfectly frank, it would
have been better if I'd have had them separately.
Mc:
Yeah.
HMJr:
I think it kind of held back a little bit.
Mc:
One waiting for the other to talk.
HMJr:
Yeah.
Mc:
Well
HMJr:
Who was the man who was a full Colonel?
Mc:
The full Colonel was
HMJr:
The man who was not in Bataan.
Mc:
That was Brink.
HMJr:
Brink.
Mc:
Brink.
HMJr:
He made a particularly good impression.
Mc:
He's very good. The other fellow is a little
emotional. He had quite an experience out
there. I didn't think he was quite as good
as the other chap.
HMJr:
Well, I tell you, I didn't ask him about Bataan
or the details, because I imagine that so many
people have.
Mc:
Yes.
30
-3HMJr:
Mc:
HMJr:
But I appreciate very much your sending them
over, and I did get a lot out of it.
If you want to talk to any one of them - either
one of them individually again, why we can
arrange it, but it's up to you.
What I would like you to keep in mind is this.
radio - we're having as our guest star, so
We're starting something new tonight on the
Mc:
HMJr:
to speak, Lieutenant Commander O'Hare.
oh, yes.
And with us - working it in - and I'm going on
the air for the War Bond sale, you see.
Mo:
HMJr:
Yeah.
Now, if you bring back any fellow that - who's
made
some outstanding accomplishment for the
war
Mc:
HMJr:
All right.
.....I wish you'd let me know; we'd like to use
him on the air and to help us.
Mc:
Right.
Right. They're coming back all the
time.
HMJr:
Well, the first one that comes back who has done
some outstanding thing, will you let me know?
Mc:
All right, I will.
HMJr:
Fine.
Mc:
Okay.
HMJr:
And then, I take it, when you're ready, you'll
come over, and we'll have Phillips and we'11 -
I'll provide the liquor.
Mc:
(Laughs) Okay. What is White's first name?
HMJr:
Wait?
31
-
4
-
Mc:
White, your
HMJr:
Harry.
Mc:
Harry?
HMJr:
Harry.
Mc:
Okay.
HMJr:
Yeah.
Mc:
Thank you very much.
HMJr:
Thank you.
32
April 23, 1942
11:34 a.m.
HMJr:
Hello.
Operator:
Secretary Morgenthau is ready.
HMJr:
Hello.
Grace
Tully:
Good morning, Mr. Secretary.
HMJr:
How are you?
T:
All right, sir. How are you?
HMJr:
T:
HMJr:
Okay. I saw His Highness this morning.
Yes, sir.
(Laughs) And he said that I could see that
part of the speech, as it went along in draft
form, that in any way affected us.
T:
Isend
see.you
Alla right,
fine. I'11 tell them to
copy of it.
HMJr:
So will you do that for me?
T:
I will, indeed.
HMJr:
And yea sooner yea better.
T:
Well, look, I tried to get Mrs. Klotz yesterday
too, Mr. Secretary. While I have you on the
wire would you be good enough to ask her - she
was busy with you - but now that I have you,
will
you let me know much we owe you on Missy's
bonds.
HMJr:
Oh.
T:
I want to send you a check for it.
HMJr:
Really?
T:
Yeah.
HMJr:
Really?
33
-2T:
So if you'd just ask her to let me have a
written memorandum, you see, of the bill for
Baby Bonds
amount.
for Miss LeHand, you see, and the
HMJr:
Yeah. I'11 do that.
T:
So that I'll have it for the record.
HMJr:
Right. Did you leave word you called for her?
T:
Well, yesterday I called, and they said, I think,
"She's in with the Secretary."
HMJr:
Oh.
T:
And
80 I said, "All right, I'll try again this
morning."
HMJr:
Righto. I'll tell her that, and then you'll
see that as the speech progresses, that I'm
kept furnished with copies - just the part that
affects the Treasury.
T:
That affects the Treasury, right.
HMJr:
Righto.
T:
All right, sir.
HMJr:
Thank you.
T:
Right. Good-bye.
34
April 23, 1942
3:30 p.m.
HMJr:
Hello.
Operator:
Mr. Mack is at home ill, but he can come to
the phone.
2.
HMJr:
Who's there in Procurement?
Operator:
HMJr:
I have his secretary on the wire.
Let me talk to her.
Operator:
Right.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Hello.
Clifton
Mack's
Secretary:
Yes, Mr. Morgenthau.
HMJr:
Mr. Mack is ill?
S:
Yes, he has a sore throat, so he decided
he'd better stay out. I think he's some
better today, and
HMJr:
How long has he been sick?
S:
Yesterday and today.
HMJr:
oh, just yesterday.
S:
Yes.
HMJr:
But he's better.
S:
Yee, he's some better today, and expects
to be here tomorrow.
HMJr:
Will you tell him that Mr. John Martin is
in purchasing. Hello.
here from South Africa to represent them
35
-2S:
HMJr:
S:
HMJr:
Yes.
And
he's heading up the South African Purchasing
Commission.
Yes, sir.
And he'll be calling you for an appointment,
and I'd like Mr. Mack to see him and to help
him in every way that he can.
S:
Yes, sir. I'11 give him that message.
HMJr:
John Martin.
S:
Yes, sir.
HMJr:
Thank you.
soon.
Tell Mr. Mack I hope he'11 be better
S:
Yes, sir. I'11 tell him that.
HMJr:
Thank you.
S:
Thank you.
36
April 23, 1942
4:10 p.m.
HMJr:
This is only a little thing, but I'd like you
to pass the word. The copying of this release
for tonight
Harold
Graves:
Yes.
HMJr:
they'd
it over here in the Treasury,
we'd ifhave
haddone
Multilith
G:
Yes.
HMJr:
which
a nice job. I've been crying for
that for
two is
years.
G:
Yes.
HMJr:
We have a Multilith here.
G:
Yes.
HMJr:
Now, over - they did it over in War Savings
G:
Yes.
HMJr:
a.....and they used the old Mimeograph, and it's
G:
Bad job, I know.
HMJr:
Well, you know - a bad job. And see that they
have a Multilith put in there from now on.
G:
I'11 do it right away.
HMJr:
Because it makes such a difference in presenting
it.
G:
Yes.
HMJr:
And as a result of it - if it had been Multilith,
each man could have used that; now they ve got
to re-type one copy for each person.
G:
Yes, I see. I'11 take care of it.
37
2HMJr:
G:
HMJr:
G:
HMJr:
You agree with me on that.
I do, I do.
Is that what you call it?
That's right - Multilith.
Well, I've fought for that for two years, so
I think now we have it, and have them put it
in over at War Savings.
G:
HMJr:
G:
HMJr:
G:
Yes, sir. I'11 do it.
It - don't you agree with me?
I do agree.
Can I forget about it?
You can, yes, sir.
HMJr:
Thank you.
G:
I'll see that it's taken care of, you bet.
HMJr:
Right.
TREASURY DEPARTMENT
38
WASHINGTON
DEFENSE SAVINGS STAFF
April 23, 1942
MEMORANDUM
TO: Mr. Fitzgerald
FROM: Mr.
Gilchrest igh
Herewith a list of the people who will be at the
broadcast tonight from the Secretary's office:
Mrs. morgenthan
Secretary Claude R. Wickard
William Green, President of A.F. of L.
William P. Witherow, President of the National Assn. of Mgrs.
Thomas C. Cashen, Chairman, Railway Labor Executives Ass'n.
Mr. J. G. Leuhersen, Executive Secretary, Railway Labor
Executives Ass'n.
John W. O'Leary, Chairman, Executive Committee of the
United States Chamber of Commerce
Colonel and Mrs. E. W. Timberlake (with Mr. O'Leary)
Mr. Philip Pearl (with Mr Green)
Lt. Comdr. H. B. Miller
Also the B. Millen
Lt. Comdr. Ed. H. O'Hare
Mrs. Ed. H. O'Hare
Mr. Gerald P. Flood, Asst. Director of Press & Radio
Mr. Vincent F. Callahan, Director of Press and Radio
Mr. Charles J. Gilchrest, Chief, Badio Section
Mr. John Greene, Special writen
Bryson Rasch, NBC - Announcer
Jack Roney
Don - NBC
"
Donald Fisher Marine Barracks
andrew Hunter I Engineer Dumn NBC ass to me Houghtulm
(much)
Harold B. Gebson Graves O' Leary's Secretary
Ted Gamble
me Chick This Schwary Ray Brough
Ferdinand Kuhu
Sil Hyott (Haughtelings office)
W. Elmer Dowel Houghthings Pine)
N
Secretary's
Reading Epp.
39
40
DOLLARS IN THE WAR
Thursday, April 23, 1942
10:00 to 10:30 PM, EWT, Blue Network
Launching of the Treasury Department's War Bond Quota and
10% Pay Roll Savings Campaign in which Labor, Management
and Agriculture Pledge Support.
LIEUTENANT COMMANDER O'HARE - RECENTLY AWARDED
CONGRESSIONAL MEDAL OF HONOR
SPECIAL GUEST
The Program
Henry Morgenthau, Jr., Secretary of the Treasury, will speak
and preside
Claude R. Wickard, Secretary of Agriculture
William Green, President, American Federation of Labor
Philip Murray, President, Congress of Industrial Organizations
W. P. Witherow, President, National Association of Manufacturers
John W. O'Leary, Chairman, Executive Committee,
U. S. Chamber of Commerce
T. C. Cashen, Chairman, Railway Labor Executive Committee
Music by the United States Marine Band
41
NOUNCER:
Ladies and Gentlemen, this is
(announcer)
speaking from the Office of the Secretary
of the Treasury of the United States.
Present in Secretary Morgenthau's office
are representatives of Agriculture, Labor,
Management, and the armed forces in the
person of the crack Navy combat pilot,
Lieutenant Commander O'Hare. In just a
few minutes you will hear from Lieutenant
Commander O'Hare, and these leaders of
the nation's basic activities, but first
we switch you to the Marine Barracks
where the United States Marine Band plays
"The Stars and Stripes Forever".
BAND:
STARS AND STRIPES (TWO MINUTES)
-2-
ANNOUNCER:
And now, Ladies and Gentlemen, Henry
Morgenthau, Junior, Secretary of the
Treasury. Mr. Morgenthau.
SEC. MORGENTHAU: Good evening. Last Tuesday, at the
White House, the President awarded the
Congressional Medal of Honor to an
outstanding American hero, a young naval
aviator who fought alone against nine
Japanese bombers. I should like to
read what the President said about him:
42
-3-
43
MORGENTHAU: "Without hesitation, alone and unaided,
(CONTINUED)
he repeatedly attacked this enemy
formation at close range in the face of
their intense combined machine-gun and
cannon fire, and despite this concentrated
opposition, he, by his gallant and
courageous action, his extremely skillful
marksmanship, making the most of every
shot of his limited amount of ammunition,
shot down five enemy bombers and severely
damaged a sixth
As a result of his
gallant action, one of the most daring if
not the most daring single action in the
history of combat aviation, he undoubtedly
saved his carrier from serious damage. If
-4-
44
SEC. MORGENTHAU: That man, Ladies and Gentlemen, is with
(CONTINUED)
me in my office at the Treasury tonight.
I am happy to introduce him to you:
Lieutenant Commander Edward H. O'Hare.
O'HARE:
Thank you, Mr. Secretary.
SEC. MORGENTHAU: Commander O'Hare, I wish you'd tell us a
little something more about your
experience with those Japanese bombers.
Perhaps something that wasn't in the
citation.
O'HARE:
Well, Mr. Morgenthau, it wasn't anything
so very special. It might have happened
to any other pilot on my ship. Those
Japs just came along when I was in the air.
=
-5HARE:
45
A few minutes sooner and it might have
(CONTINUED)
been one of the other pilots. I just
got the breaks.
SEC. MORGENTHAU: You're very modest about it, Commander.
O'HARE:
There wasn't much more to it, Sir.
After I closed in on the bombers, I was
too busy to think about anything except
shooting down as many of them as I could.
SEC. MORGENTHAU: And the result was highly satisfactory ---
You were telling me a few minutes ago,
Commander, that a good many of the men on
your ship are buying War Bonds. The shore
establishments of the Navy have rolled up
a total of nearly twelve million dollars
to help their country and help themselves.
-6(
HARE:
Well, I don't believe they were thinking
about their investment, Mr. Morgenthau.
We just want to do everything we can to
beat those Japanese.
SEC. MORGENTHAU: You don't like them much, do you,
Commander?
O'HARE:
I sure don't! And from what I've seen of
the Japanese, Mr. Secretary, I'd say that
if we can meet them on anything like even
terms, we can beat them! Just give us
enough trained men, enough ships and
planes to approach even terms, and we'll
come out on top!
46
-7Sec.
47
MORGENTHAU: Thank you 80 much for coming here,
Commander. I'd like to shake you by
the hand.
MUSIC:
(COLD) "OVER THERE"
ANNOUNCER:
And now a message to the nation from the
Secretary of the Treasury. Mr. Morgenthau.
SRC. MORGENTHAU: Ladies and Gentlemen: I have invited
Lieutenant Commander O'Hare to be here
tonight, with the leaders of American
labor, agriculture and industry, because
this one man has proved that Americans have
what it takes. He has proved that the
American soldier or sailor of today is
still just as good as the men who fought
and won in 1918 "over there".
-848
Soc. MORGENTHAU: He has proved that we Americans can win
(CONTINUED)
every time if we get anything like an
even break.
Lieutenant Commander O'Hare didn't
have an even break. He was up there alone,
one man against nine bombers. He dared to
do the unbelievable, and he won. Every
day men like O'Hare are doing the
unbelievable on far-off fronts, holding
the battle line of freedom until we can
overcome the head-start of our enemies.
In Lincoln's time, at the start of
the War Between the States, they sang
this song: "We are coming, Father Abraham,
a hundred thousand strong. If
-949
Sco. MORGENTHAU:
This time we are coming millions
(CONTINUED)
strong. We are coming with machines and
men in overwhelming numbers, but in the
meantime we can thank God for all the
O'Hares, in all our fighting forces, who
are keeping the flame of freedom alive.
You and I, as civilians, are just as
deeply involved in this war as Lieutenant
Commander O'Hare when he fought those
Japanese bombers. It is now high time for
us civilians, as individuals, to make our
own declaration of war against the enemy --
to fight, to work, to save with all our
heart and soul.
- 10 -
SEC. MORGENTHAU:
(CONTINUED)
50
In a nation at war "spending as usual"
is as dangerous as "business as usual". We
2
can't have all we want for ourselves and
still give Lieutenant Commander O'Hare and
his millions of comrades-in-arms the
weapons they need. Nearly ten million
Americans are now cutting down spending and
buying War Savings Bonds instead, but with
the war costing 120 million dollars every
day, ten million savers are not enough.
All of us have got to save and buy bonds
on a vastly greater scale.
All of us have got to think war and
act war in our personal lives.
- 11 -
SEC. MORGENTHAU:
(CONTINUED)
All of us who get a regular income
should set aside at least ten percent of
it every pay day for War Savings Bonds,
and those who have been earning especially
high pay in the war industries are going
to set aside even more.
The most convenient way to do this is
through the Payroll Savings Plan, under
which an employee authorizes his employer
to set aside a certain percentage of his
pay for bonds. If you are not doing this
already, one of your first jobs in the war
is to sign up tomorrow; if you have signed
up already, then one of your first jobs in
the war is to increase the amount of your
savings every pay day.
51
- 12 -
SEC. MORGENTHAU:
(CONTINUED)
52
We on the home front have got to do our
part as well as O'Hare did his.
We have got to reach our goal of a
billion dollars a month in savings by July,
and every State and every county has got to
do its share.
We have got to enlist an army of 50
million War Bond buyers.
Some people say it can't be done.
Well, here in my office tonight is a man
who last year announced a production
program so big that some people said it
couldn't be done. He called upon the
farmers of America to produce vast new
quantities of food for freedom.
- 13 53
SEC. MORGENTHAU: The farmers answered his call and they are
reaching his goals. He is here to tell us
what he thinks of our new War Savings goal:
my friend and Cabinet colleague, the
Secretary of Agriculture, Claude Wickard.
SEC. WICKARD:
As you said, Mr. Secretary, this country
can count on its farmers to produce all the
food that is needed for victory. I know
it also can count on farmers to buy their
full share of the War Savings Bonds that
are needed for victory.
I am confident that I am speaking for
all American farmers when I tell the rest
of the nation that farmers are ready to
do everything they can -- to make every
possible sacrifice -- in the fight to
preserve our democratic way of life.
- 14 SEC. WICKARD:
54
They are going right ahead, in spite of
scarcities of materials and of labor.
Our country needs dollars to win the
war and War Savings Bonds are one of the
ways of raising that money. Already farmers
are buying those bonds out of their larger
incomes this year. I want to urge every
one of you, as strongly as I can, to buy
as many more bonds as you possibly can.
Some farmers, especially those with debts
to pay, may not be able to meet the goal
of using ten per cent of their net incomes
for bonds. But others, I am sure, can do
much better than ten per cent.
- 15 55
Farmers are hit hard when inflation
SEC. WICKARD:
(CONTINUED)
gets out of hand. Buying War Savings Bonds
is a way to check inflation. Farmers may
need nest eggs if the present period of good
prices ends. Bonds will provide that nest
egg.
Those are two very practical reasons for
joining in the plan for systematically buying
War Savings Bonds. But I know that the real
reason why farmers will do their share is
because the country needs their help. If
that means going without things they would
like to have, farmers will make that
sacrifice gladly. They are producing for
victory and they will save for victory.
- 16 -
56
COND ANNOUNCER: A few minutes ago, Mr. Morgenthau, you
called on us all to double our purchases of
War Bonds. In the traditional American way,
the way of democracy, you put the problem
before us... the people. Here are spokesmen
for millions of people.
ANNOUNCER:
William Green, President of the American
Federation of Labor.
MR. GREEN:
The cost of living directly concerns every
American. When it gets out of control and
shoots sky-high we have inflation .an
economic disaster which America must prevent
by every practical means. It shrinks the
dollar of the workingman by raising the
prices of necessities he must buy for
himself and his family.
- 17 -
57
GREEN:
CONTINUED)
It forces the Government to pay much more
for the war supplies for our armed forces.
Labor has consistently urged action to
keep the cost of living within reasonable
bounds and has supported to the fullest
extent every measure taken by the Government
in this direction.
Among these measures, the War Savings
Program holds a major place. That is why
the American Federation of Labor, just two
months ago, launched its billion-dollar
drive for War Bonds. We called upon our
five million members to buy War Bonds -and buy them every week out of their pay.
Our members are responding in a wonderful
way. More than $300,000,000 already has
been subscribed.
- 18 MR. GREEN:
(CONTINUED)
58
Have no doubt that labor will do its
part in the War Bond Campaign. Secretary
Morgenthau has just said that ten per cent
of the national income must go into War
Bonds. Every worker will, I am sure, keep
up with this quota. This is a voluntary
program. It is thoroughly American. The
whole American people have their hearts and
souls in this war and will not hold back
with their money.
To every member of the American
Federation of Labor I say -- "Put yourself
on this ten per cent War Bond quota AT LEAST
and stick to it for the duration. If
- 19 NOUNCER:
59
William P. Witherow, President of the
National Association of Manufacturers.
MR. WITHEROW:
The majority of the officers and employees
of the eight thousand firms we represent
in our organization, the National Association
of Manufacturers, already are investing
heavily in War Bonds. I am asking tonight
that they invest more, much more than ten
per cent of income in the Bonds which buy
our fighting men the planes, tanks and
torpedoes they must have.
But our job, as executives of
manufacturing concerns throughout the
country, is more than the job of ourselves
investing ten percent of our income in
Bonds.
- 20 -
MR. WITHEROW:
(CONTINUED)
60
It is our responsibility to cooperate with
our employees and their labor representatives
by establishing a Payroll Savings Plan
=
through which they may invest at least ten
per cent of their pay in Bonds every pay day.
Already more than eighty percent of our
members have put these Payroll Savings Plans
in operation. And I believe you can count
on every firm
every factory
every
one of the eight thousand firms we represent,
to move immediately to make this wonderful
voluntary plan available to every employee.
Our efforts must know no waste. This
war for survival permits no squandering of
assets.
- 21 61
MR. WITHEROW:
CONTINUED)
It is a struggle in which the idle or
hoarded dollar is a soldier asleep at his
post. The man who dissipates his income,
the woman who insists on having what she
can easily do without - they are betraying
their country as if they were furnishing
military information to the enemy. We
heartily approve of this American way of
financing our war: The voluntary way and
we will voluntarily do more than we are
asked to do, week after week, month after
month, until the war is won.
ANNOUNCER:
Thomas C. Cashen, Chairman of the Railway
Labor Executives Association.
- 22 -
MR. CASHEN:
62
Employees operating the Rail Transportation
System of our country are on their toes to
speed up the movement of raw materials to
factories, and finished materials of war to
waiting ships.
We have also established committees of
our unions and the management urging every
employee to purchase United States War
Bonds under the Payroll Savings Plan.
Most employees have already signed up.
Within the next few days, the others will
be called on again.
Our members realize that every possible
dollar of their earnings must go into War
Bonds.
- 23 C.. CASHEN:
(CONTINUED)
63
Speaking for the railroad employees of this
country, I can assure our Government that
we will do our share and more than our share.
And I make this further pledge: We are
going to invest to the fullest extent of
our ability by purchasing U. S. War Bonds
for the purpose of assisting our country
to win this war. I am confident we will
exceed ten per cent of our total income.
I repeat, the one million, two hundred
and fifty thousand railroad employees will
not only keep men and munitions rolling and
arriving on time, but we will buy the Bonds
to help pay the bill.
- 24 ( NOUNCER:
64
John W. O'Leary, Chairman of the Executive
Committee of the United States Chamber of
Commerce.
MR. O'LEARY:
Voluntary action of the people is fundamental
in representative democracy. Because your
plan, Mr. Secretary, is based on voluntary
action, it presents a challenge which the
million business men comprising the underlying
membership of the Chamber of Commerce of the
United States will do their utmost to meet.
Within the year business and industry
has been called upon to increase production
at what seemed an impossible rate. The
goals then set are now either reached or in
sight.
- 25 'LEARY:
65
The achievement has given us courage that
CONTINUED)
we can also reach the goal which you have
set in this essential campaign to provide
the funds for war. So, Mr. Secretary, you
may be assured of the spirit and temper of
the vast membership of the Chamber of
Commerce of the United States expressed in
the determination to do everything humanly
possible to double monthly investments in
War Bonds and to accomplish this goal to
promote investment of ten percent of income
in these securities regularly, through
Payroll Savings Plans.
We recognize the need for speedy action.
To attain that end we give our full support
to your voluntary plan of investment.
- 26 C NOUNCER:
66
Philip Murray, President of the Congress
of Industrial Organizations.
MR. MURRAY:
As President of the C.I.O. I am proud of
the record our affiliated organizations
have already made in the purchase of War
Savings Bonds.
Their response has been generous,
wholehearted and practical. Members of the
C.I.O. responded to the attack on Pearl
Harbor when the United Automobile Workers,
one of the great bodies affiliated with the
C.I.O., pledged $50,000,000 worth of bonds
to help finance the replacement of the U.S.S.
Arizona which was sunk in that attack.
They raised $50,000,000, and pledged a
second $50,000,000.
- 27 C. MURRAY:
67
Many other unions in the C.I.O. have set
CONTINUED)
themselves tremendous goals which have
been a spur to all workers, and not alone
those organized in the trade union movement.
Now we have cet ourselves the task of
increasing our purchases, 80 that we may
make our contribution toward the Treasury
goal of a billion dollars a month.
But, we must remember, some workers
cannot, under their present earnings, maintain
their well-being in health and decency and
lay aside any of their meager earnings in
savings, either under the present voluntary
system or under a compulsory program which
has been proposed.
- 28 MURRAY:
68
That is one reason why the present voluntary
(CONTINUED)
system, with real participation in its
administration by labor as well as management,
can provide that flexibility which makes it
possible to distinguish between those who
can and those who cannot participate in the
program.
However, we are not setting ourselves
a goal of only ten per cent. Those of our
workers who have a high level of earnings
have set themselves higher goals. We feel
that the voluntary nature of the present
program is best designed to build the
enthusiastic support for both the War
Savings Program and the war effort as a whole.
- 29 C: MURRAY:
69
Organized labor is doing its share to
CONTINUED)
set the pace for the community as a whole
to follow. Only full participation by
every segment of our community will make
this program a success. We pledge,
Mr. Secretary, that we will do our share.
SEC. MORGENTHAU: Gentlemen. I know that I can count on
you all. Thank you, very much.
ANNOUNCER:
On this program you have heard Henry
Morgenthau, Junior, Secretary of the Treasury,
call on this nation to double previous
purchases of United States War Bonds and
War Stamps.
- 30 NOUNCER:
70
You have heard the leading representatives
(CONTINUED)
of Agriculture, Labor, and Management pledge
whole-hearted support: The Honorable Claude
R. Wickard, Secretary of Agriculture,
Mr. William Green, President of the American
Federation of Labor, Mr. William P. Witherow,
President of the National Association of
Manufacturers, Mr. Thomas C. Cashen, Chairman
of the Railway Labor Executives Association,
Mr. John W. O'Leary, Chairman of the Executive
Committee of the United States Chamber of
Commerce, Mr. Philip Murray, President of
the Congress of Industrial Organizations -and Lieutenant Commander Edward H. O'Hare of
the United States Navy.
- 31 ANNOUNCER:
71
(CONTINUED)
Ladies and Gentlemen -- The National Anthem!
MUSIC:
"THE STAR SPANGLED BANNER"
=
72
April 23, 1942
Dear Henry:
I am writing to ask whether you would be willing
to appear with me on a nationwide War Savings broad-
cast from my office on the evening of May 4th.
As you know, we are out to get ten per cent
of the nation's income invested regularly in
War Savings Bonds, and we have developed definite
quotas for every state and county. This particular
program, to be called "What Happens to our Money?"
is designed to show the nation how War Savings
money is being spent in the war effort.
The program will be broadcast from 9:30 to
10:00 P.M. Washington time over both the Blue and
Mutual networks. I sincerely hope you will be
able to participate. May I hear from you soon?
Sincerely,
Aigned) Heary
Honorable Henry L. Stimson
Secretary of War
Washington, D. C.
FK:blb
n.m.c.
Teddompson
by Messenger Dinons
73
April 23, 1942
Dear Frank:
I am writing to ask whether you would be willing
to appear with me on a nationwide War Savings broad-
cast from my office on the evening of May 4th.
As you know, we are out to get ten per cent
of the nation's income invested regularly in
War Savings Bonds, and we have developed definite
quotas for every state and county. This particular
program, to be called "What Happens to our Money?"
is designed to show the nation how War Savings
money is being spent in the war effort.
The program will be broadcast from 9:30 to
10:00 P.M. Wash ington time over both the Blue and
Mutual networks. I sincerely hope you will be
able to participate. May I hear from you soon?
Sincerely,
(Signed) Heavy
Honorable Frank Knox
Secretary of the Navy
Washington, D. C.
FK:blb
My Messenger
A
iam 5.29
74
April 23, 1942
Dear Donald:
I am writing to ask whether you would be willing
to appear with me on a nationwide War Savings broad-
cast from my office on the evening of May 4th.
As you know, we are out to get ten per cent
of the nation's income invested regularly in
War Savings Donds, and we have developed definite
quotas for every state and county. This particular
program, to be called "What Happens to our Money?"
is designed to show the nation how War Savings
money is being spent in the war effort.
The program will be broadcast from 9:30 to
10:00 P.M. Washington time over both the Blue and
Mutual networks. I sincerely hope you will be
able to participate. May I hear from you soon?
Sincerely,
(signod) Heart
Honorable Donald M. Nelson
Chairman
War Production Board
Washington, D. C.
FK:blb
cc.mmc.
By Memories Dixon 5:20
STANDARD FORM No. 14 A
TREASURY DEPARTMENT
APPROVED BY THE PRESIDENT
75
WASHINGTON
MARCH 10. 1926
TELEGRAM
OFFICIAL BUSINESS-GOVERNMENT RATES
CHARGE TREASURY DEPARTMENT, APPROPRIATION FOR
Expenses of Loans Mar Savings Staff
(The appropriation from which payable must be stated on above line)
2-14117
Mr. H. W. Anderson
Vice President
General Motors Corporation
April 23, 1942
Detroit, Michigan
I was very such interested to have your report on the splendid employee
participation achieved in the first four days of your War Bond Drive. The
goal you have all set for yourselves to be reached by May first is indicative
of the results which can be attained when employees and employers work as
one mind for the interest of our country.
Hm &
Henry Morgenthan, Jr.
Secretary of the Treasury
76
WU E 41 80/75 GM
1942 APR
22
DM
1
DETROIT MICH APR 22 1222P
8
HENRY MORGENTHAU JR
SECRETARY OF THE TREASURY WASHDC
I KNOW YOU WILL BE INTERESTED IN PRELIMINARY RESULTS OF
G
GENERAL MOTORS EMPLOYEES WAR BOND DRIVE FOR VICTORY.
A
WITH INCOMPLETE REPORTS IN FOR FIRST FOUR DAYS OF CAMPAIGN:
36 PLANTS OR DIVISIONS ARE 100PERCENT; 41 PLANTS OR DIVISION
ARE 90 TO 100PERCENT; THE REMAINING 17 ARE BETWEEN 60 AND 90PERCENT;
NONE BELOW 60PERCENT . GENERAL MOTORS EMPLOYEE FAMILY AS A WHOLE
OVER 90PERCENT PARTICIPATION. BY MAY 1ST EXPECT ALL PLANTS WILL
BE ELIGIBLE FOR TREASURY FLAG
H W ANDERSON.
116P
77
Treasury Department
office of the Under Secretary
Date: 4/23
To: The Securation
From:
Comptroller's
letter to worders
on Detroit situation
DWD
COMPTROLLER GENERAL OF THE UNITED STATES
78
WASHINGTON
COPY
April 23, 1942
B-23888
The Honorable,
The Secretary of War.
My dear Mr. Secretary:
There has been informally presented to me this date by the
Office of the Undersecretary of War a proposed directive emplifying
the procedure approved by my letter of February 20, 1942, B-23888,
relating to the reimbursement of contractors for amounts deducted from
salaries and wages for the purchase of War Savings Bonds. The pro-
posed directive is as follows:
"1. The procedure proposed by the Secretary of War and approved by the Comotroller General of the United States in his decision of February 20, 1942, B-23888, is for application, except that
in the case of a manufacturing establishment the contracting officer
may approve a modification of the procedure 8.8 outlined herein. Under
either procedure, reimbursement for salaries and wages may include payroll deductions made for the purchase of War Savings Bonds.
#2. The contractor will withhold from each pay roll the
amounts authorized in writing by the respective employees. The total
resount withheld will be deposited immediately with a bank insured by
the Federal Deposit Insurance Corporation in a separate account or
accounts, but it is unnecessary to use a separate account for each
contract. Such special bank account or accounts shell be no designated as to indicate clearly their special character and purpose and
withdrawals from such accounts shall be only for the purpose of purchasing War Savings Bonds for delivery to employees, or for refunding
emoloyees' payments on subscriptions. Refunds by the emoloyer of employees' deductions may be made by checks drawn on the special account
or out of the employer's funds, in which latter event the employer may
withdraw an equivalent amount from the special account.
79
-2"3. The employer will maintain appropriate records of all
transactions involving employees' subscriptions including a periodic
reconcilement of the total amount of employees' payments on unissued bonds with the balance in the special bank accounts. The
transactions in the special bank account or accounts and the subscription ledgers showing the individual employees' accounts are to
be subject to audit by authorized representatives of the Government.
Upon termination of the pay-roll deduction plan, the contractor will
furnish to the contracting officer a summary of the transactions and
lists of undelivered bonds and unclaimed account balances.
The procedure proposed appears to be satisfactory, and will
meet the requirements of this Office.
Sincerely yours,
(Signed) Lindsay C. Werren
Comptroller General
of the United States.
80
APR 23 1942
April 17, 1942
Dear Archie:
This is just to thank you for your
letter of April 11th in which you tell me
about the views of your Board regarding
compulsory savings.
As your letter indicates, the Board
did not have the benefit of an actual survey
of public opinion before reaching its decision.
If you should decide to have such a survey
made, I should be very much interested to
hear of the results.
Incidentally, I should like you to know
how much I appreciate the offer of help and
cooperation which you gave me at luncheon
yesterday. I know that the Office of Facts
and Figures can be of immense help in making
our voluntary savings program a success.
Sincerely,
(Signed) Heary
Hon. Archibald MacLeish,
Director, Office of Facts and Figures,
Washington, D. C.
Photofreennme.
FK/cgk
fill To thomson
OFFICE OF FACTS AND FIGURES
WASHINGTON
April 11, 1942
Dear Mr. Secretary:
Your department has asked for the views of the Board
of the Office of Facts and Figures on the question of public
morale involved in a compulsory savings plan.
I take it that there are two main questions involved:
(1) Whether the public at large would resent compul-
sion in this matter.
(2) Whether compulsory savings would destroy a feeling
of voluntary participation which the bond purchasing program
stimulates.
Although this Office has not undertaken a specific
test of public reaction on this question, we believe that we
have enough background information to be able to make a judgment.
On the first question, it is the view of the Board
that the public would not resent compulsion in this matter any
more than it resents compulsion in the payment of heavy taxes,
or compulsion in being drafted for the armed service. Our
indicia of public opinion have pointed again and again to the
fact that the country is ahead of the Government in its desire
to accept restriction and sacrifice if necessary for winning the
war.
On the second question, it is the view of the Board
that, although the bond program has made a valuable contribution
in stimulating 21 sense of voluntary participation, our entry into
the war and the increasing opportunities for direct participation
in war industries and in civilian defense have diminished the
necessity for the stimilus which the bond program has given.
Indeed, there may be some question as to whether the fact that
the purchase of bonds involves no risk and carries with it a
profit in the form of interest does not divert the sense of
sacrifice which the war has called forth.
4/11/42
The Secretary of the Treasury - 2 -
It would seem to me that a good deal of whitever
public resentment might result would be diminished if a compulsory savings plan were based on a principle of graduation eccord-
ing to ability to pay, in the light of income tax schedules.
If I may, I should also like to point out what you have,
of course, considered, that a compulsory savings program could be
put before the country as a positive contribution to post-war
reconstruction, in that it would provide a fund of purchasing
power to stem a possible post-war recession.
Faithfully yours,
and
Archibald MacLeish
The Director
The Honorable
The Secretary of the Treasury
Washington, D. C.
83
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
FROM
April 23, 1942.
The Secretary
Harold Graves
I am attaching a letter from the Third Assistant
Postmaster General, enclosing to Mr. Mahan a report from
the postmaster at Los Angeles regarding the alleged lack
of facilities at the West Los Angeles post office for
the purchase of Defense Savings Stamps, about which Mrs.
Elizabeth Hill of West Los Angeles complained to you.
m thanks
DIVISION OF POSTAL SAVINGS
84
IN YOUR REPLY REFER TO:
Post ® ffice D epartment
THIRD ASSISTANT POSTMASTER GENERAL
Hashington
April 20, 1942
Mr. Sydney D. Mahan,
War Savings Staff,
Treasury Department,
Washington, D. C.
My dear Sir:
There is enclosed for your information a copy of a letter
written by the postmaster at Los Angeles, California, to Miss
Elizabeth Hill in reply to her letter of March 11 to the Secretary of the Treasury in which she made the statement that no
bank or post office in West Los Angeles had savings stamps of
the 10-cent and 25-cent denominations for sale.
Very truly yours,
Rammy S Black
Third Assistant Postmaster General.
Enclosure.
LKB
COPY
85
UNITED STATES POST OFFICE
al Savings Section
Los Angeles, Calif.
AJA
April 15, 1942.
Miss Elizabeth Hill,
634 S. Gramercy P1.
Los Angeles, California
My dear Miss:
Your letter of March 11 addressed to the Secretary
of the Treasury concerning the lack of facilities for obtaining
Defense Stamps at West Los Angeles, has been referred to this
office for reply. Your statement to the effect that the post-
master at West Los Angeles advises he cannot secure the stamps
is not understood. The post office at West Los Angeles is
operated as a regular station of this office and a sufficient
supply of Defense Stamps is available at all times to meet the
normal requirements. The address of the station is 1544 Purdue
Ave.
You are also advised that banks are permitted to purchase
Defense Stamps from the post office for resale to the public.
Of course, you understand we cannot compel banks to carry Defense
Stamps purchased from their own funds but insofar as we know
every bank in California is cooperating.
Please advise me of any specific instance where there is
a bank or post office not selling Defense Savings Stamps.
Very truly yours,
MARY D. BRIGGS, Postma ster
by Frank Huber
Money Order Cashier.
CC: 3rd Asst. P.M.G.
Postal Savings
REP/AJM
approx
4/23/42 86
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
COPY
To the Liaison Officers of All Federal Reserve Banks
Dear Sir:
At the informal request of the Treasury Department, there is enclosed a photostat copy of a statement prepared by the Department's
Division of Research and Statistics relating to the operation of pay
roll savings plans (for the purchase of War Savings Bonds) by companies
having 5,000 or more employees. The statement shows, for your District,
the name and address of each company, the number of employees, whether
company has a pay roll savings plan, and whether company is an issuing
agent.
For the information of the Office of the Secretary of the Treasury,
it will be appreciated if you will furnish us at your early convenience,
the following information with respect to each company shown in the
statement as having a pay roll savings plan that has not qualified as
an issuing agent:
1. Whether your Bank has contacted the company, and, if so,
whether by correspondence or by personal visit (or both).
2. Brief statement of the reasons given, if any, for not
qualifying.
3. If the information is readily available, what agency is
now issuing the bonds sold under the pay roll savings plan.
4. Any additional information or comments which you feel may
be of interest to the Office of the Secretary in this con-
nection.
It will be appreciated if you will furnish the above data in dupli-
cate so that one copy may be turned over to the Office of the Secretary
and the other retained in our files.
We have been advised informally that Mr. A. L. Mills, Jr., Technical
Assistant, Office of the Secretary of the Treasury, has been designated
by the Secretary as the Department's contact representative to cooperate
with the Federal Reserve Banks in their efforts to increase the number
of large corporations qualifying as issuing agents, and will be glad to
furnish all possible assistance in this connection.
Very truly yours,
L. P. Bethea,
Assistant Secretary.
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Nineteen Business Days of April, March and February 1942
(April 1-22, March 1-23, February 1-23)
On Basis of Issue Price
(Amounts in thousands of dollars)
Series E - Banks
169,969
195,418
269,925
Series E - Total
Series F - Banks
229,140
27,659
117,592
261,294
30,731
137,927
$374,391
$429,952
:
Series G - Banks
Total
: February
over
:
:
$ 74,939
:
$ 65,877
Series E - Post Offices
March
over
:
:
$ 59,172
over
February
March
:
:
:
March
:
:
April
Percentage of Increase
or Decrease (-)
March
April
:
:
Item
Amount of Increase
or Decrease (-)
March
April
:
Sales
over
: February
- 12.1%
-$ 6,705
- 25,449
-$ 9,062
- 74,507
- 13.0
- 27.6
344,863
43,917
208,842
- 32,154
- 3,072
- 20,335
- 83,569
- 13,186
- 70,915
- 12.3
- 10.0
- 14.7
- 24.2
- 30.0
- 34.0
$597,622
-$ 55,561
-$167,670
- 12.9%
- 28.1%
Office of the Secretary of the Treasury, Division of Research and Statistics.
- 10.2%
April 23, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
88
CONFIDI
UNITED STATES SAVINGS BONDS
Daily Sales - April, 1942
On Basis of Issue Price
If
(In thousands of dollars)
Post Office
Date
April 1942
1
2
3
4
6
7
8
9
10
11
13
14
15
16
17
18
20
21
22
Total
All Bond Sales
Bank Bond Sales
Bond Sales
Series E
Series E
Series F
Series G
Total
Series E
Series F
Series G
Total
$ 2,476
$ 10,517
$ 2,380
$ 9,608
$ 22,504
$ 12,993
$ 2,380
$ 9,608
$ 24,980
2,999
3,222
2,778
8,264
7,572
9,292
2,119
1,185
1,387
7,570
6,235
5,334
17,953
14,992
16,013
11,263
10,794
12,070
2,119
1,185
1,387
7,570
6,235
5,334
20,953
18,214
18,790
4,961
2,958
2,309
2,906
2,730
2,150
13,035
5,722
9,610
9,304
8,052
5,224
2,329
8,027
8,983
6,562
5,715
5,261
2,720
23,391
15,539
17,314
15,974
14,885
8,613
17,996
8,680
11,919
12,210
10,782
7,374
2,329
8,027
8,983
6,562
5,715
5,261
2,720
28,352
18,497
19,623
18,880
17,615
10,762
4,619
2,513
2,584
3,472
2,690
3,111
17,572
6,152
5,102
10,008
8,076
7,175
2,432
1,076
1,251
1,400
8,604
3,333
5,374
7.773
3,695
3,303
28,609
10,561
11,728
19,180
12,621
11,426
22,192
8,665
7,686
13,480
10,766
10,286
2,432
1,076
1,251
1,400
8,604
3,333
5,374
7.773
3,695
3,303
33,228
13,074
14,312
22,652
15,311
14,537
5,252
2,517
2,925
13,334
6,845
9,112
2,227
24,562
11,525
17,830
18,586
9,362
12,037
2,227
1,925
9,001
3,703
6,793
1,925
9,001
3,703
6,793
29,814
14,042
20,755
$ 59,172
$169,969
$ 27,659
$117,592
$315,219
$229,140
$ 27,659
$117,592
$374,391
834
1,142
955
1,573
668
850
948
977
834
1,142
955
1,573
668
850
948
977
Office of the Secretary of the Treasury, Division of Research and Statistics.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
April 23, 1942.
89
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 23, 1942
Secretary Morgenthau
TO
Mr. Kamarck
FROM
Subject: of Possible Interest: The New Tank Production Goals.
1. According to the figures which were made available to
me by the War Production Board, the most important change
in the new production program is in the tank goals. The
over-all program is being slashed 15 percent and tanks
40 percent.
In March we were producing tanks at the rate of 12,000
year. (The March production figures are in round numbers:
no heavy tanks, 600 medium and 400 light, or a total of
&
1,000 tanks.) We were achieving this rate in spite of the
fact that only 10 to 15 percent of the plants which could
produce tanks were converted to war production.
The new production program, in round figures, is as
follows:
Old
Tanks
Light
Medium
Heavy
New
20,000
25,000
10,000
15,000
500
150
Total
25,000
45,000
Other Fighting Vehicles
Armored cars
Oun carriers (on light tank
12,000
chassis carrying mostly
35 mm., with a few 57 mm.
guns)
Total
8,000
20,000
2. The importance of the change in the tank production
program cannot be under-estimated. Tanks are undoubtedly
one of the most important armament items. From the standpoint of the 1942 campaigns, tanks probably out-rank planes
and ships in importance. Both the British and the Russians
-2-
90
are not greatly inferior to the Germans in the air. The
German successes in Russia and in Libya have been mainly
due to German tank superiority: Stalin informed Beaverbrook and Harriman that tanks were the most vital Russian
deficiency. In Libya, the British have been driven back
because of their tank inferiority, in spite of their
superiority in the air.
3. The 12,000 armored cars and 8,000 gun carriers which
the new schedule calls for can not be regarded as substitutes for tanks. They do not even approach being a
match for light tanks. The Germans do have a few armored
cars in their panzer divisions which they use for
reconnaissance work, but the serious fighting is done by
the tanks. The organizational tables of our motorized
divisions now call for tanks instead of armored cars to
perform reconnaissance.
The 8,000 gun carriers will mount guns no larger than
those mounted in a light tank, but will not have the armor
protection of a light tank.
4. The crux of the tank program is the production of
medium and heavy tanks. It is doubtful if the Germans
have any light tanks left in their armored divisions.
Over a year ago, they started replacing the light tanks
in their armored divisions with medium and heavy tanks.
Our new armored divisions likewise are being built around
the medium tank. Our 1942 production goal of 15,000
medium tanks (cut down from the original goal of 25,000)
is to be compared with our army's estimate that the
Germans have 15,000 tanks on the Russian front now.
Conclusions
1. The new tank production goals represent a drastic
retreat from the Victory Program.
2.
In view of the requirements of our expanding army,
it is more than probable that the reduced program
means that the vital tank needs of our Allies will
not be met.
91
APR 23 1942
My dear Mr. President:
I have your memorandus of April 21,
1942, transmitting a letter addressed to
Mrs. Roosevelt on April 3, 1942, by Mr.
0. L. Brown, President of the Lubec
Chamber of Commerce, relative to a fee
charged the Caapobello Auto Ferry,
apparently for overtime services of customs
officers.
I have requested that a report be
obtained from the collector of customs
concerned and as soon as his report is
received I shall advise you further in
the matter.
Faithfully yours,
(Signal) N. Normouther. m
Secretary of the Treasury.
SS. agr 5:55
The President,
The White House.
n. M.C. Pharm File
first Thousan
THE WHITE HOUSE
WASHINGTON
April 21, 1942.
MEMORANDU FOR
THE SECRETARY F T.LL TREASURY
Till you let us know
about this?
R.
COPY
129.15
Lubec, Maine 4/3
Mrs. Franklin D. Rosevelt
Dear Madam:-
The Campobello Auto Ferry will not be able to
run this summer providing the customs fee are not
changed. As at present the fee is $13.00 on a Sunday
one car or a dozen.
As you know there is no such charges on the
Campobello side.
Thinking you might get some relief for us in
this matter I am writing you in behalf of the Lubec
Chamber of Commerce and the Campobello Board of Trade.
Yours very truly
(Signed) C. L. Brown
Pres. Lubec C. of C.
1942
94
23 58
Dear Ouy:
I am very much pleased with the work the Bureau of
Internal Revenue has done during the last week in assembling
the requested information on the list of fifty-three companies
with large war contracts furnished to - by Mr. Donald M.
Nelson, Chairman of the War Production Board.
will you please convey to Deputy Commissioner Mooney,
and those members of his unit who worked on this project,
my thanks and my congratulations for a good job quickly done.
Sincerely yours,
4.
Honorable Guy T. Helvering,
Commissioner of Internal Revenue.
n.m.c.
JLS:kb
copies to Thompson
95
APR 23 1943
Mr. Byron Price,
Director, The Office of Censorship,
Washington, D. C.
Dear Mr. Price:
The receipt is acknowledged of your communication
dated April 8, 1942, stating that Boards of Review will
be established at Los Angeles, California, New York,
New York, and Rochester, New York, to aid in the censorship of films and other photographic material entering and leaving the United States, and that provision
will also be made at Miami, Florida, New Orleans,
Louisiana, E1 Paso, Texas, San Francisco, California,
and Seattle, Washington, and other postal censorship
stations for examining photographic material not passed
upon by the Boards of Review.
You request to be informed of the name of someone
in this Department who would be available for consultation with the Boards at Los Angeles and New York. You
also request that an alternate be designated. You ask
if anyone will be available for consultation in the
other cities mentioned.
Mr. Gregory W. O'Keefe, assistant collector of
customs, has been designated as the primary consultant
to the Board of Review at New York, and Mr. Irving
Fishman has been appointed as an alternate.
Mr. Henry J. Nord, deputy collector of customs,
has been designated as the primary consultant to the
Board of Review at Los Angeles, and Mr. Hugo Wallenfels,
Treasury representative, has been designated as an alter-
nate.
Messrs. Frank Gallagher, Jr., and John E. Caufield,
Bureau of Customs employees, will be available for consultation to representatives of the Office of Censorship
at Rochester, New York.
96
-2All persons named above have been given full
authority to present the viewpoint of this Department
in connection with censorship problems.
After consultation with appropriate field offi-
cials, a further communication will be addressed to
you informing you of representatives of the Treasury
Department who will be available for consultation at
other ports where postal censorship stations are
located.
Sincerely yours,
(Signat) #: Morkentbene
Secretary of the Treasury.
Phospin m.c
My Dixon 5:20
File to Gaston
Thorpson
THE OFFICE OF CENSORSHIP
WASHINGTON
April 8, 1942.
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
My dear Mr. Secretary:
To aid in the censorship of films and other photographic material entering and leaving the United States, we soon will establish Boards of Review in Los Angeles, New York, and Rochester,
N. Y. Provision also will be made at Miami, New Orleans, El Paso,
San Francisco, Seattle, and other postal censorship stations for
examining photographic material not passed upon by these Boards.
This work undoubtedly will raise questions in which various
Government agencies will have a direct interest. It would be
extremely helpful if the Boards could have opportunity to obtain
advice on specific films from a representative of your Department
whenever such consultation might be helpful.
Will you please give me the name of someone in your Department who would be available for consultation with the Boards at
Los Angeles and New York? I shall appreciate it if you also will
designate an alternate. will anyone be available for consultation
in the other cities mentioned? In every case, these representatives should have full authority to present the official viewpoint
of your Department.
I am enclosing an outline of the film censorship program. If
I can supply any further information, please do not hesitate to request it. Any suggestions will be welcomed.
Sincerely yours,
Im him
Byron Price,
Director.
Enclosure.
(COPY)
97-A
OFFICE OF CENSORSHIP
Washington
FOR RELEASE TO MORNING PAPERS
OF FRIDAY, MARCH 27, 1942.
A system for the examination of all kinds of films entering and
leaving the United States was announced today by the Office of Censorship.
Boards of Review will be established at Los Angeles and New York
to inspect motion picture productions and newsreels offered for export. Personnel of the boards has not been announced.
Facilities for examining pictures of many types are available
also at other ports, and all material will be cleared as rapidly as
possible, said the announcement by Byron Price, Director of Censorship. He explained that newsreels in particular would be handled so
that views of happenings abroad would be available to the American
people with a minimum of delay.
The Bureau of Customs is cooperating in the film censorship
program, and other Government agencies will be asked for advice on
individual films. Besides applying to commercial motion pictures and
newsreels, the examination will include amateur movies, still photographs, and all other forms of photography intended for import or export.
Removal from the United States of exposed but undeveloped films
is being prohibited, except to Canada, and such films will be returned to the sender. The same regulation covers unexposed raw
film unless especially licensed. These provisions apply to travelers
as well as to professional photographers and commercial organizations.
Exposed films coming into the country will be examined after being
developed under Government supervision, but importation of unexposed
films except from Canada is banned.
Following is a detailed outline of the program:
I.
ADMINISTRATIVE MACHINERY
for export 1. and In films order imported to review into films the United produced States, in the Boards United of States Re-
view will be established at Los Angeles and New York. The Los Angeles
Board will be concerned chiefly with commercial motion pictures at
97-B
-2-
the point of production (Hollywood and environs), while the New York
Board will be concerned with newsreels, motion picture productions
and other photographic material produced or processed in the East
for export from the United States, as well as with newsreels and film
dramatic productions offered for import into the United States which
the Bureau of Customs may submit for review. The Boards will act
in general as advisory bodies to the Office of Censorship and the
Bureau of Customs and-will be under the chairmanship and the adminis-
trative direction of the Office of Censorship.
The Boards will have opportunity to seek the advice of
Federal agencies having a special interest in photographic problems.
Among these agencies are: the State Department, the War Department, the
Navy Department, the Board of Economic Warfare, the Office of Coordinator
of Information, the Office of Coordinator of Inter-American Affairs, and
the Office of Coordinator of Government Films. These agencies represent
the various elements in problems posed by exportation of films - military security, Latin-American relations, extermal propaganda, and
economic warfare.
2. Postal Censorship will provide facilities at appropriate
points to review photographic material routed for export from or import into the United States. For material transmitted in the mails
the Postal Censors in general will act without reference to any other
agency. Postal Censorship offices will review material submitted by
Collectors of Customs and give advice as to whether the shipment should
be permitted to proceed, or they may recommend submission of the material
to a Board of Review. Material received from Customs will be returned
to the appropriate Customs officer with a recommendation.
3. Unless special provision has been made for examination elsewhere, Collectors of Customs at the points of exit or entry will examine
all shipments of photographic films, plates and prints outside the mails
and such material in mail packages requiring inspection for tariff purposes. Where no doubtful circumstances exist, they will license the
export or permit the entry of the material. They will refer doubtful
cases to Postal Censorship, which will return the material with appropriate advice.
II. FILMS AND PRINTS FOR EXPORT
1. The bulk of commercial films, including dramatic and
newsreel films, will be reviewed during production by the Boards of
Review. For that purpose the Boards will establish contacts with
the Motion Picture Producers and Distributors' Association and with
other representatives of producers and exporters for assistance in
97-C
-3-
working out review methods. On request of the producers or the Bureau
of Customs, the Boards will review completed films offered for export.
In concert with representatives of the producers and with the Customs
Service means will be adopted for identifying true copies of films approved for export, and Customs representatives at the point of origin
will license, mark and seal shipments so as to make any further examina-
tion unnecessary. This approval will obviate delays in the export of
motion picture productions.
2. Collectors of Customs, where appropriate facilities for
examination exist, will be authorized to examine at the point of origin,
developed films, plates and prints and, if their export is to be permitted, to license and seal the packages so as to obviate examination at
the point of exit. In doubtful cases, the nearest Postal Censorship
office will be consulted.
3. Postal Censors will examine to the extent deemed desirable
photographic materials passing through the mails. All films, plates
and prints which have not been licensed for export or approved by
Postal Censors will be examined by Collectors of Customs at the port
of exit. Doubtful cases will be referred to Postal Censorship, which
will return them with recommendation. Collectors of Customs may license
such shipments, detain them or return them to the senders as circumstances warrant.
4. All exposed films or plates are to be regarded as com-
munications. Since they cannot be examined without development, their
export, except to Canada, will be prohibited. This will be done by
declining to license, under the Trading with the Enemy Act, the export
of any undeveloped negatives. Exposed and undeveloped film offered
for export will be returned to the sender.
5. In view of the difficulty of determining in all cases
whether film has been exposed, the export of any raw film to any
destination other than Canada will be prohibited except under special
Export Control license. Such licenses will be issued only to approved
manufacturers, distributors and others who can supply adequate reasons
for licensing a particular shipment.
III. IMPORTS
1. Developed films, apparently intended for general showing
in theaters, should be sent to the Collector of Customs at New York or
Los Angeles for examination by the Board of Review. Other developed commercial films, when imported outside the mails and consigned to points
other than New York or Los Angeles, will be examined at the port of entry
97-D
if facilities are available; if no facilities are available, the films
will be sent to the Collector of Customs in New York or Los Angeles
for examination. If such films are imported in the mails, they will be
examined by the appropriate office of Postal Censorship.
2. Exposed and undeveloped commercial motion pictures, ex-
cept newsreels, whether imported in or outside the mails should be forwarded to the Collector of Customs at New York or Los Angeles for processing in approved laboratories and examination by the Board of Review.
Exposed and undeveloped newsreel films should be sent to the Collector
of Customs at New York, whether imported in or outside the mails, for
similar processing and examination.
3. Importation of unexposed film, other than that coming from
Canada, will be prohibited except under special license.
4. All exposed and undeveloped still or motion picture film
and plates presented for importation outside the mails will be examined
at the port of entry if facilities are available, and if not, will be
forwarded to the nearest Collector of Customs having facilities for processing and examination. However, when the importer of such film (including such film in the mails) designates a specific laboratory for the
development of his film, and the laboratory designated has been approved
by the Office of Censorship, the film shall be forwarded to the Collector
of Customs in whose district the designated laboratory is located for
processing and examination. Collectors of Customs will consult the
nearest offices of Postal Censorship in doubtful cases. Where the volume
of business of a particular laboratory warrants, examination of such film
will be made by a committee consisting of a representative of the Office
of Censorship, as chairman, one or more representative from the Customs
Service and representatives of any other agencies deemed desirable.
5. All developed non-commercial films, motion or still, in-
cluding photographs and plates presented for importation outside the mail,
will be examined at the port of entry if facilities are available; if not,
it will be forwarded for examination to the nearest Customs house having
facilities. In doubtful cases, Collectors of Customs will consult the
nearest Postal Censorship office. Postal Censorship will examine all
undeveloped and developed non-commercial film imported in the mails.
98
April 23, 1942
Dear Archie:
I am very sorry indeed to hear that you have
decided to suspend distribution of the weekly
analysis of Editorial Opinion. I had been missing
it and wondered what had happened to it.
Personally, I feel that this little review
gave me information which I could not get from any
other source, inside or outside the Government.
If you should reconsider your decision and resume
publication, please be sure to put me on the
mailing list.
Sincerely,
(Signed) Heary
Honorable Archibald MacLeish,
Director
Office of Facts and Figures,
Washington, D. C.
Photo file n.m.c
FK:blb
By Messenser Manus,1.30
4/25/12
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE FOR EMERGENCY MANAGEMENT
WASHINGTON, D.C.
Aeril 20, 1942
Dear Mr. Secretary:
Because of the pressure of other work,
it has been decided to suspend distribution of the
weekly analysis of Editorial Opinion on The nar which
you have been receiving from this office. We hope that
it has been of some interest and usefulness to you in
the past.
Faithfully yours,
Amanium
Archibald MacLeish
Director, Office of Facts and Figures
Hon. Henry Morgenthau, Jr.
Secretary of the Treasury
Washington D. C.
100
APR 23 1942
Dear Jesse:
I have your letter of
April 21 and a copy of your letter
to the President in regard to the
use of silver as a substitute for
copper in defense factories.
I am assuming that you
have sent copies of this COFFEEpondence to Donald Nelson.
Sincerely yours,
(signed) years
(Signed) Heary
Honorable Jesse H. Jones,
Secretary of Commerce,
Washington, D. C.
Photo filinme.
ity Dixon 5:20
EHF mdm
4/22/42
fill Hampson
OF
DEPARTMENT
ALL
THE SECRETARY OF COMMERCE
WASHINGTON
STATES OF SECURITY
April 21, 1942
Dear Henry:
I hope you agree with me that
this is all Defense Plant Corporation
should undertake to do in connection with
the silver.
You will recall that at Cabinet
meeting the idea of any loss from abrasion
or otherwise was pooh-poohed.
Sincerely yours,
June
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
C
0
P
Y
THE SECRETARY OF COMMERCE
WASHINGTON
April 21, 1942
Dear Mr. President:
You will recall at Cabinet a week ago the
question of Defense Plant Corporation using silver
in lieu of copper in the construction of aluminum
plants.
Defense Plant Corporation is prepared to
bear the cost of transporting the silver to fabricating plants, the cost of fabricating this silver
into bus bars and conduits, the restoration of the
silver to bar form, and its return to the Treasury,
less incidental weight lossage due to abrasion and
fabrication, when requested by the President or the
Secretary of the Treasury.
I think this is all that should be expected
of Defense Plant Corporation.
If you concur, please advise the Secretary
of the Treasury and me.
Sincerely yours,
(signed) Jesse H. Jones
Secretary of Commerce
The President
The White House
103
ASSISTANT SECRETARY OF THE TREASURY
April 23, 1942.
MEMORANDUM
TO:
Secretary Morgenthau
FROM: Mr. Gaston
The attached daily report of vessels
in New York harbor, as of Monday of this
week, is rather interesting. You will
notice that of the 304 vessels in port
29 were discharging and 42 lading, a total
of 71 actively working cargo. Of the re-
mainder 36 were idle at dock, 87 were in
the stream and 110 were undergoing repairs.
The repair item, according to Durning, is
the chief bottleneck. There are many
alterations to be made, besides ordinary
maintenance and repairs due to war damage.
0 In addition, Harry says, the work proceeds very slowly at the shipyards and
there is a great deal of loafing, probably
due largely to green crews and lack of
proper direction. The actual handling
of cargoes is in general proceeding fairly
well.
2919
104
ROOM 125, GARGO DIVISION,
MONDAY, APRIL 20, 1942.
001
DAILY REPORT OF VESSELS IN THE PORT OF NEW YORK
Argentinian
Belgium
Brazilian
British
Cuban
5
1
4
50
1
Dutch
French
Greek
Honduran
17
3
4
2
Nicaraguan
Norwegian
Panamanian
1
39
25
Philippines
1
Polish
3
Portugese
Russian
Swedish
Swiss
2
6
2
2
United States
Yugo Slav
TOTAL
132
4
504
ACTION ON VESSELS
Discharging
Idle
Lading
Repairs
Streets
TOTAL
29
36
42
110
87
304
STREAM
87
Ballast
19
Coastwise
Enroute
13
Laden
30
TOTAL
25
87
105
W420-42
SHEET TWO
FIAC
NAME OF VESSEL
PIER FLAG NAME OF VESSEL
ACT.
DISTRIOT 2
DISTRICT 1
Dat.* Tjileboet
Amer. Constellation
Amer. Santa Elisa
Amer. Joseph T. Dickman
Amer. West Lashaway
Amer. Oregonian
Amer. Columbian
Amer. Caribstar
Amer. Perismine
Amer. Gulfdise
Amer. Windrush
Amer. Coloradan
Pol.* Narvik
I 1 Bush
I 69th St.
R Morses ID
.
R
.
R
.
R
L 3 Bush
I 5 Bash
.
L
R 8 Bush
.
R
R 17th St.
.
R
as
.
R
R 23rd St.
"
Russ. Aserbaidjan
R
Amer. Atlantic Trader
#
R
R 27th St.
Pass. Michurin
.
Nor.* Mirlo
R
.
Dut. Hermes
Phil. Dona Aurora
Pan. Hindoo
Amer. Kentucky
R
.
R
.
R
.
R
.
R
Pan. Alcedo
R
Amer. Nevada
R
Nor.* Solitaire
Amer. Millinocket
Braz. Tiradentes
Braz. Midosi
Braz. Mogy
Braz. Pocone
Amer. Vermont
R
.
.
.
I
L
Amer. Cristobal
Amer. Gulfbird
Amer. Tydol
Amer. Nancy Lykes (Aks 4)
Amer. Coastwise
Amer. Panamoco
Br.
Request $183
Amer. Dorothy Luckenbach
Br.
Empire Ibex
Nor. Scebeli
Port. G11 Eases
Nor. Molda
Nor.* Tenesis
Nor.* Siranger
Nor.* Polycastle
Amer. Empire State
Amer. Hilton
Amer. Bestrice
Swiss St Gergue
I 30th St.
I
Pan. Pontias
Br.* Empire Razorbill
:
.
R
R Cranee DD
.
R
Amer. Madison
D
Amer. Norluna
Pan. Norlys
.
L
R 44 Bklyn.
R
Arg. Norte
R
.
L State Pier
R Robb. DD
Amer. Rio Parana
D 4 Bush
R
Amer. East Indian
.
I
a.* Yemasse
I.
I Briwater
.
R
#
.
D
Pan.* Norvik
Swiss St Gotthard
.
R
L 2 Erio
.
Nor.* California Express
Nor. Magnhild
.
Amer. Lone Star
Nor.* Noreg
Amer. Silver Sword
Amer. Meantieut
L
Barrdale
R Robb. DD
R
Amer. F.O. Barston
Dut.* Arundo
Amer. Numarib
.
R
Br.* Flimston
Br.* Davila
Nor. Hoegh Silvereloud
.
Stanbank
Amer. C/S Koolmotor
Br.* Silverash
.
R
Rio Chico
Nor. Primero
.
R
Br. Livingston
Br.
.
R
Pan. a alvator
Amer. Pillery
Br. Empire Widgeon
*
R
Br. Dunelmia
prt. Tanimbar
Br.
.
R
Nor.* Alaska
Arg.
PIER
ACT.
L 31st St.
Swed. Astri
Amer. Brooklyn Heights
.
R
/
#
R
R 3 Erio
R Boards DD
R
.
R 45-Bklyn.
R Robb. DD
.
R
.
R
.
R
#
R
.
R
R
.
.
R
.
R
D 33.Bklyn.
L 34 Bklyn.
L 36 Bklyn.
L 37 Bklyn.
R 38 Bklyn.
L Com. Whf.
L 22 Bklyn.
L 23 Bklyn.
L 24 Bklyn.
D 24 Bklyn.
R 29 Bklyn.
I 30 Bklyn.
106
SHEET THREE
LAC
NAME OF VESSEL
ACT.
PIER FLAG NAME OF VESSEL
Dat.
Cottica
Tiberius
Dr.* Bradburn
Nor.
Farm
Belg.* Belgian Airman
Br.*
Dut.
Dut.
Grk.
Empire Lapwing
Medea
Crijessen
Constantinos H
Amer. Challenger
Nor.* Fernbrook
Empire Wagtail
Br.*
D 4 Bklyn.
D 4 Bklyn.
L 5 Bklyn.
L 6 Bklyn.
L 8 Bklyn.
L 8 Bklyn.
L 10 Bklyn.
L 11 Bklyn.
I 16 Bklyn.
L 18 Bklyn.
L Oak St.
D Huron St.
Ile de Noirmoutier
veti Duje
Yes
Hond. Howard
Grk.
er.
Fr.
I 14 E.R.
I 15 E.R.
R 28 E.R.
R 2 NoR.
L 3 N.R.
Amer. Proctor
Nor. Cadmus
R 9 NoR.
Ioannis P. Goulandris R 9 N.R.
George Washington
Ile de Quessant
Fr. Mont Everest
L 18 N.R.
I 26 N.R.
I 26 N.R.
DISTRICT 5
I 57 N.R.
Amer. Lillian Luckenbach
Dr.* H.M.S. 149
R 37 N.R.
D 42 N.R.
I 54 N.R.
Amer.* Oldhem
D 57 N.R.
D 57 N.R.
L 58 N.R.
Pan.* E1 Lago
Amer. Falcon
Amer. American Leader
D 59 N.R.
L 61 N.R.
Amer. Alchibe
Amer. Santa Teresa
I 59 N.R.
DISTRICT 6
Br.
Br.*
Portia
Cairneak
Br.*
Empire Ibex
Amer. Lafayette
Br.*
E
Br.
I 75 N.R.
L 86 N.R.
L 86 N.R.
I 88 N.R.
Sourabaya
I 90 N.R.
Lochkstrine
Jamaica Planter
I 96 N.R.
Dut. Aruba
Nor.* Tai Shan
I Edgewater
L *** Whn.
L.
Nor. Bajamar
Amer. Narbo
D 9 WS RR
Amer. Lafayette
Amor. Ipswich
Amer. Excellency
R Fletchers DD
.
R
L 95 N.R.
L 97 N.R.
L 97 N.R.
.
R
.
R
Nor. Brush
Br.* Empire Jet
.
R
.
R
Amer. Louise Lykes
Pan.* Elwood
.
R
.
R
.
R
Amer. Robert E. Lee
Pan. Carmona
Amer. Siboney
Amer. Shickshinny
.
R
.
R
.
R
.
R
Pan. Carbella
.
R
R T & L DD
Amer. F.W. Green
Amer. Rio de Janeiro
Amer. African Meteor
Amer. Oklahoman
Amer. Seven Seas
.
R
Amer. Hamlin F. McCormick
Amer. Behuregard
.
R
.
R
.
R
.
R
Amer. Kentuokian
R
Pol. Blask
D
Pol. Resewie
Br.* Markland
D 34 N.R.
D 36 NoR.
Amer. Cherokee
Amer. Medina
Amer. Panuoo
Amer. Kahuku
Amer. Persoverence
Amer. Alcoa Guard
Pan.* Belgian Gulf
DISTRICT 4
Amer. Angelina
PIER
ACT.
DISTRIOT 7
DISTRICT 3
Dut.
4-20-42
.
I 15 Hob.
.
L 6th St.
I 1 Hob.
Amer. Peter Kerr
R 2 Hob.
Pan.* Lookout
Amer. Tidewater Associated
Bass. Friedrich Engels
Amer. Cold Harbor
R
R
.
.
#
R
Russ. Tbilisi
Pan. Vagrant
Amer. West Nohno
Amer. Virginia Dare
Amer. Gateway City
Arg. Rio Iguama
Amer. Aldebaran
R
.
.
R
.
R
D 3 Hob.
I 4 Hob.
I 6 Hob.
R 6 Hob.
107.
SHEET FOUR
PIER
ACT.
PERTH AMBOY
FIAG NAME OF VESSEL
Br. Irone Myrtle
DISTRICT 8
D 9 Erio
I Pt Newark
Amer. Potlatch
Pan. Denny
Nic. Managua
Nor. Askeladden
Amer. Exceller
Amer. Emouth
w
L
I WD" J.O.
D "H" J.C.
Nor. Biscaya
MST. Aleon Scout
D Con Hook
R Bayonne
.
#
R Beth DD
.
R
Apr. Standard Arrow
X. Motorcarline
Amer. Wallace E. Pratt
Amer. Esso Charleston
Cub. Caribe
Amer. Jean Lykes
R
#
R
.
.
R
.
R
R Brewers DD
R
.
I Gulfport
.
R
Pan.* K1 Almirante
Amer. Gulfpride
Amer. Greylook
Port. Guine
Br.* George Washington
Amer. Evelyn
Dut.* Kota Inten
Dut. Java
Nor. Danio
Br.* Imperial Monarch
Br.* Rhexenor
Br.* Calgarolite
Pan. Passe
Br. Western Head
Pan. Loida
Pan. Makena
Pan.* Peter Hur11
Pan.* Tournine
R
Nor.* Egda
Amer. Java Arrow
Amer. Yacht 0
D 2 S.I.
D 8 S.I.
I 9 S.I.
R 9 S.I.
L 10 S.I.
L 10 S.I.
L 19 S.I.
L 19 S.I.
D 21 S.I.
R 23 S.I.
R 24 S.I.
FOREIGN TRADE ZONE
Swed. Lima
Ys. Franka
Ys. Kupa
Amor. Altair
Amer. Carter Braxton
Amer. Arispa
Amer.* Algic
Br.* Becheville
Br.* Charles F. Meyer
Br. Penhale
Dut.* Breedijk
Dut.* Noeseniwi
Grk. Tessis
Nor.* Hoegh Silverdawn
Nor.* Leiv Eiriksson
Nor.* N.T. Nielson Alonso
Nor.* Primo
Nor.* Tortugas
Amer. Marine
Nor. Para
Br. Paz
Arg. Ernesto Tornquist
Amer. Jason
Amer. Achilles
Amer. Harry Bowen
Amer. Kopperston
Amer. Thomas P. Beal
Amer. Mm. H. Machen
Amer. Freeman
Amer. Plymouth
Amer. Christopher Newport
Dut, Themisto
I (Laden)
I (Laden)
I (Ballast)
Amer. Walter D. Noyes
Amer. Remeon Heights
Amer. Dynastic
R (Laden)
Amer. Suffolk
Amer. Berkshire
Dut. Laertes
NEWARK, NEW JERSEY
Nor. Evita
I
D
Pan. Colin
#
L
R
.
R Pt Johnson
Grk. Maliakos
Br. Ungava
ALBANY, NEW YORK
D Claremont
R
Russ. Donbas
Amer. Eagle
D
VESSELS AT ANCHORAGE AND IN THE STREAM
DISTRIOT 9
Pan. J.H. Senior
R
I "J" J.C.
D "J" J.C.
D 7 C. RR
Amer. Wolverine
Amer. Broad Arrow
.
D
Nor. Pleasantville
Amer. Knoxville city
Br.* Port St. John
4-20-42
L
Amer. Corozal
Br. Starstone
Amer. Thomas Tracy
Amer. Michael Tracy
Amer. Winding Gulf
L F A. 20-A
B F.A. 21-B
L F.A. 21-B
B F.A. 49.0
B F.A. 23
L F.A. 23
B F.A. 21-B
L F.A. 19
c F.A. 21-B
c F.A. 23
L F.A. 24
L F.A. 49-C
L Febs 2014
L F.A. 23
L F.A. 23
L F.A. 23
B Fab. 23
B F.A. 21-B
L F.A. 49-0
L F.A. 23
L F.A. 23
B Feb. 21-B
L Fats 23
L 32 Bklyn.
E Street
L Streem
L Street
E Stream
E Streem
E Streem
E Stream
0 Streem
E S tream
E Stream
E Streem
C Streem
E Streem
C Stream
E Stream
0 Streem
E Streem
C Streem
C Street
E Streem
108
SHEET FIVE
SELS AT ANCHORAGE AND IN THE STREAM CONTINUED
I
Amer. Maurice Trasy
Br. Athelprince
Empire Lightning
Amer. James L. Riehards
Br.
Amer. Tennessee
Ye. Anto Matkovic
Amer. Eastern Crown
Br. Bulkoil
Amer. Achilles
Amer. Koro
Amer. Alcoa Polaris
Nor. Vest
Nor. Tabor
Dut. Waterland
Port Huon
Empire Mahseer
Br.
Amer. Yankee Sword
Br.
Amer. Wellhert
Ville de Tematave
Br.
Br.
Empire Temar
Nor. Olaf Bergh
Ii
Br. Banffshire
Br. Cymbula
Br.
Br.
Exama Bakie
Stad Vlaardingen
Empire Snow
War Admiral
Nor. Kaia Knudsen
Amer. Wn. McTarnahan
Amer. Wm. A. McKenny
Nor. Kong Haskon VII
Nor. Boreas
Russ. Ashkhabada
Nor. Siljestad
Arg. Rio Gualeguay
Br.
Br.
Empire Zeal
James E. Hughes
Amer. H.R. Mallory
Br.* Empire Drum
Amer.* Santa Cruz
Hond. Juniata
Amer. West Kebar
Pan. E1 Oceano
0 Streem
E Streem
E Streem
E Stream
E Streem
E Stream
E Streem
E Streem
E Stream
0 Streem
L 58 N.R.
E Stream
B Streem
L Streem
L Streem
B Streem
E Streem
C Streem
L Streem
B Streem
E Streem
L 38 Bklyn.
B Streem
L Streem
B Stream
B Streem
B Street
B Stream
c Streem
C Stream
B Streem
# Streem
L Streem
B Streem
L Streem
E Streem
B Grafesend Bay
L Streem
L Gravesend Bay
L Gravesend Bay
B Streem
L Stream
L Gravesend Bay
Key to Stream List
B - Ballast
0 - Coastwise
E Enroute
L Laden
* ARMED.
4-20-12
I
109
April 23, 1942
Dear Lew:
For your confidential infor-
mation and guidance, I am enclosing
herewith a memorandum from Mr. Gaston
on the situation in the port of New
York.
To say that it is shocking
is an understatement. Can you do
anything about it?
Yours sincerely,
tsl Henry
Mr. Lewis Douglas,
Chief Adviser, War Shipping Adm.,
U. S. Maritime Commission,
Washington, D.C.
gile n.m.c.
By Messenger Surgin,
1
109
April 23, 1942
Dear Lew:
For your confidential information and guidance, I am enclosing
herewith a memorandum from Mr. Gaston
on the situation in the port of New
York.
To say that it is shocking
is an understatement. Can you do
anything about it?
Yours sincerely,
tsl Henry
Mr. Lewis Douglas,
Chief Adviser, War Shipping Adm.,
U. S. Maritime Commission,
Washington, D.C.
File n.m.c.
By Messenger Seargia, 12:00 mm
ASSISTANT SECRETARY OF THE TREASURY
April 27, 1942.
MEVORANDUM
TO: Secretary Morgenthau
FROM: Mr. Gaston
The attached table lists the number
of vessels, their nationalities and their
action status, in the ports of Boston,
Philadelphia, Baltimore, Norfolk, Charleston, Savannah, New Orleans, Galveston
(including Houston and Corpus Christi),
Los Angeles, San Francisco, Portland, and
Seattle on April 24, 1942.
It will be noted that of the 358
vessels at the fourteen ports listed on
Friday, April 24, the "action status" was
as follows:
Total working cargo:
Discharging
56
Lading
89
Repairing
Idle
35
Total in stream:
In ballast
19
Laden
12
Coastwise
Enroute
145
141
1
5
37
358
NO. OF
NATIONALITY
VESSELS
American
Discharging
Repairing
5
2
British
Discharging
2
Lading
2
Repairing
1
Panamanian
Lading
1
Repairing
2
Norwegian
Lading
1
Repairing
3
Greek
American
Lading
1
TOTAL
Philadelphia
Repairing
1
Honduran
21
Discharging
6
Lading
4
Repairing
Idle
In stream.
9
5
1
British
Lading
Repairing
3
Lading
1
Idle
1
Swedish
Panamanian
Discharging
1
Repairing (loaded)
2
In stream Ballast
1
Belgian
Portugese
Lading
1
Discharging
1
TOTAL 41
ore
American
Coastwise
Discharging
2
3
Norwegian
ACTION STATUS
2
2
Discharging
Lading
NO. OF
VESSELS
Repairing
28
Idle
3
In stream Ballast
2
British
Discharging
1
Lading
1
Repairing
Idle
In stream
3
1
1
Panamanian
Lading
1
Repairing
3
1
1
1
Belgian
In stream
1
TOTAL
American
Lading
Lading
1
Cuban
Ballast
55
Discharging
2
Lading
7
Repairing
Idle
In stream
7
1
4
If
Ballast
Laden
4
Lading
1
British
Repairing
2
In stream
1
Panamanian
If
IT
Laden
Ballast
1
Repairing
1
Norfolk
Repairing
Idle
Idle
1
Brazilian
Greek
Laden
Discharging
1
Norwegian
Yugoslav
ACTION STATUS
If
NATIONALITY
Portuguese
Yugoslav
In stream Laden
1
1
TOTAL 33
Repairing
-3NO. OF
NATIONALITY
VESSELS
American
Discharging
Repairing
In stream
1
4
2
British
In stream
1
Honduran
Panamanian
Ballast
Lading
1
Yugoslav
ACTION STATUS
Laden
Ballast
n
"
1
Repairing
In stream
En route
1
1
TOTAL 12
American
Repairing
Idle
1
3
Panamanian
TOTAL
American
6
Discharging
9
Lading
5
Repairing
2
Idle
1
In stream
1
British
Repairing
Discharging
1
Norwegian
Lading
1
Repairing
In stream
6
1
n
1
Honduran
Discharging
3
2
Lading
Repairing
1
Panamanian
En route
Lading
2
1
Orleans
Repairing
2
"
Savannah
3
1
Lading
Repairing
Laden
En route
NO. OF
NATIONALITY
Dutch
Mexican
Canadian
French
Italian
VESSELS
2
1
1
1
1
TOTAL 47
ACTION STATUS
Discharging
Lading
Idle
Idle
Repairing (the ADA o)
NO. OF
NATIONALITY
VESSELS
ACTION STATUS
PORT
American
Calvest
Discharging
3
Lading
4
(Inclusive Houston
and Corpus Christi)
Repairing
7
6
1
British
1
1
1
Repairing
1
American
30
Lading
2
Los Anables
Lading
1
TOTAL
Repairing
4
Idle
3
In stream
1
British
Lading
1
Repairing
2
Dutch
Repairing
Idle
Repairing
Discharging
2
Mexican
2
Honduran
1
Argentinian
1
TOTAL
21
American
Discharging
5
16
Lading
14
Repairing
4
British
Idle (ooastwise schooners
under 600 tons)
Idle
Idle
3
1
800
Lading
1
USSR
Laden
Lading
1
Norwegian
Ballast
Repairing
1
Mexican
Laden
Lading
1
Swedish
In stream
Repairing
In stream
1
Panamanian
Ballast
Discharging
Lading
Repairing
1
Norwegian
In stream
-6NO. OF
NATIONALITY
VESSELS
PORT
Francisco
Continued
Dutch
Norwegian
Panamanian
Swedish
Lading
2
Repairing
1
Lading
Lading
2
1
San
Phillipine
Lading
Idle
1
1
USSR
Repairing
Idle
5
2
TOTAL
Portland, Ore.
58
American
Lading
1
1
1
USSR
American
5
5
4
2
Dutch
TOTAL
Repairing
Repairing
Idle
In stream
Idle
1
Norwegian
Discharging
Lading
9
USSR
Laden
Enroute
6
1
Seattle
In stream
In stream
Repairing
3
TOTAL
ACTION STATUS
1
28
Lading
Enroute
NO. OF
VESSELS
NATIONALITY
American
40
52
84
20
24
TOTAL
6
In stream
Discharging
12
Lading
11
Repairing
Idle
In stream
2
1
32
Canadian
U.S.S.R.
Discharging
Lading
Repairing
Idle
220
British
TOTAL
ACTION STATUS
1
14
4
Idle
Repairing
Idle
In stream
1
TOTAL 19
1
Panamanian
7
12
4
TOTAL 24
Discharging
Lading
Repairing
In stream
NO. OF
VESSELS
Discharging
4
Lading
3
Repairing
In stream
1
1
TOTAL
Norwegian
9
Discharging
1
Lading
6
Repairing
Idle
In stream
14
1
3
TOTAL
25
Dutch
Discharging
2
Lading
3
Idle
1
TOTAL
Swedish
6
Discharging
1
Lading
2
TOTAL
Greek
3
Lading
1
Repairing
.
Honduran
ACTION STATUS
.
NATIONALITY
1
.
TOTAL
2
.
(
Portuguese
Discharging
In stream
1
1
TOTAL
2
NO. OF
VESSELS
NATIONALITY
Yugoslav
Repairing
Idle
In stream
1
1
1
TOTAL
Brazilian
3
Idle
1
Argentinian
Repairing
1
Cuban
Lading
1
Philippine
Lading
1
Idle
1
TOTAL
Mexican
2
Repairing
1
Idle
2
OTAL
Belgian
3
Lading
1
In stream
1
French
Italian
TOTAL NUMBER OF VESSELS
2
Idle
1
TOTAL
ACTION STATUS
1
358
repairing
120
April 24, 1942
Dear Admiral
am sending
I Land:
youherewith
United a n.Y.
Treasury memorandum. I should be
glad to have any comment that you care
to make.
Yours sincerely,
(Signed) H. Morgentham. It.
Rear Admiral Emory S. Land,
Chairman, U. S. Maritime Commission,
Washington, D.C.
File n. m.c.
dy Manual
10:30 am
4/25/42
121
April 24, 1942
Dear Admiral Land:
I am sending you herewith a
Treasury memorandum. I should be
glad to have any comment that you care
to make.
Yours sincerely,
(Signed) 3. Morgenthan, the
Rear Admiral Emory S. Land,
Chairman, U. S. Maritime Commission,
Washington, D.C.
By Messaneer
handed to
m wiley
ROUGH
1942
DRAFT Security April by 21, april 23 1942 John A-122 st
The advent of Pierre Laval to power in France suggests
the urgent necessity = of intensifying efforts to impede in
every way possible the course of French collaboration with
Germany. Points of strategic interest in these efforts are:
(1) The French Navy; and
(2) North Africa, Madagascar, and other strategic
regions in the French colonial empire.
Since the middle ages, security to a Frenchman is repre-
sented in terms of money. With the extreme frugality of
the French nation, economic considerations are believed to
play an important role in the average Frenchman's attitude
towards the war. There has already been friction, indeed
considerable difficulty, between the Free French and the
British over the question of pensions and family allocations
for the naval and military forces under General de Gaulle
(Source: Admiral Auboyneau). If means could be devised where-
by the French Navy, the armed forces in North Africa and,
perhaps, the Colonial Civil Service too, could be assured
by the United Nations that -- come what may -- salaries,
123
-2pensions and family allocations would be guaranteed to all
those who remained true to the cause of France and the
United Nations, it might conceivably have an important
propaganda value at this time. French contacts with the
Foreign Nationalities Branch insist that the question of
financial security among these categories of Frenchmen and
their families could almost be the decisive factor in shaping
their decisions in a moment of crisis.
We are now presumably going to urge the French Navy
to beware of a coup on the part of collaborationists and
Germans; to beware of convoy duty in the guise of legitimate service to France, which might lead into the transport
of contraband for Germany and into conflict with the United
Nations. Our propaganda to the armed forces and authorities
in North Africa will probably follow much the same line.
The question may now be posed: Cannot our propaganda be
substantially fortified by a declaration with respect to
the salaries, pensions and family allocations? Would not
such a declaration overcome, in some measure, the pecuniary
reluctance in the minds of otherwise patriotic Frenchmen
to turn against Vichy in the approaching moment of crisis?
124
-3From a financial point of view, the obligation assumed
would not be great; from a psychological point of view, the
advantages to be derived from such a declaration might be
substantial. In any event, we are in a period of the war
where no opportunity to improve the situation should be
overlooked.
Figures are extremely difficult to get -- at least without prolonged and detailed researches. The following are the
best we have been able to obtain so far.
In so far as the appeal is addressed to the Navy, it
could probably be addressed to so much of it as is now in
commission. It might be possible to estimate the fleet now
in North African waters, but these personnel figures represent estimates for the whole fleet for 1941.
Officers' salaries
Crews' salaries
Family allocations
$3,600,000
$10,000,000
$1,500,000
(Note that all costs are estimated at the present
rates of exchange - roughly 40 francs to the dol-
lar. All are in round figures.)
Estimates for the "Colonial Army" (#) for 1942 allow:
Personnel
"Social expenses"
$20,000,000
$1,000,000
It is extremely difficult to get figures for colonial adminis(#) These figures may include West Africa - in which case the
figure for North Africa should be a little more than half
of those given.
125
-4tration. Algeria, Tunis and Morocco have separate budgets
as well as different methods of administration, making com-
parisons difficult. Figures for the latest years are unavailable. The following figures are given subject to considerable qualifications.
For Tunis for 1939 we have lists of salaries for personnel - including the central administration and Ministers,
the "mixed tribunal", the French Justice and Police - totaling about $578,000. For Morocco for 1939 we have a list of
personnel - including the civil list and central administration - totaling $1,800,000. The administrative personnel of
Algeria - including the personnel of the central government,
the Departments and the Communes, total $800,000. Various
pensions, indemnities and allocations - difficult to classify or characterize - would probably total another million
dollars in this budget.
These figures, rough and inadequate though they are,
would seem to bear out the suggestion that the problem is
not primarily one of economics. Indeed, a declaration on
the subject belongs more to the realm of propaganda than
to that of financial guaranties. When the United Nations
126
-5win the war, the French armed forces and civil authorities
who are on the winning side will be taken care of anyway.
If the United Nations should be so unfortunate as to lose
the war, their commitments would have lost all importance.
An item of considerable significance in respect of any
financial commitments with regard to France is that the
United States is the custodian of frozen French gold reserves to the amount of $501 millions.
From a psychological point of view, any propaganda
based on such a declaration by the United Nations would
have to be delicately shaped in order not to convey the
impression that we were attempting to hire mercenaries;
the emphasis should be on our complete readiness to see
that French soldiers, sailors and civil authorities within
specified areas received what was their due under French
law. There might be an implication that those of the uniformed and civil services who might choose the wrong side
in the conflict would not fare equally well.
An objection to the proposal, of course, is the fact
that any guaranty made to elements of France might provoke
pressure on the part of governments-in-exile to obtain similar commitments for themselves -- unless they could be dis-
127
-6suaded from a dog-in-the-manger attitude towards a maneuver
that would be a purely strategic one.
JCW:BJ
128
bable Address
"Saspurchase Washington
The Soviet Government Purchasing Commission
in the U.S.A.
April 23, 1942
3355 16th
Washington Db
Dear Mr. Morgenthau:
I wish to thank you for the courtesies
extended to Admiral Akulin, Mr. Lukashev and
me during our visit to your office yesterday,
and to assure you of my appreciation of the
cordial reception accorded us.
I look forward to a most pleasant and
gratifying relationship with you and your
associates.
Sincerely yours
A. I. Belyaev
Major General
Chairman
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
129
Treasury Department
Division of Monetary Research
Date...April.25, 19 42
To:
Miss Chauncey
From: Mr. Southard
For the Secretary's files.
Need not be brought to his attention.
MR. WHITE
Branch 2058 - Room 214}
c
130
NOTE
April 24, 1942
In the attached despatch, conflicting figures
are reported for United States imports of U.S. currency
a Argentina in January and February, 1942.
The Second Federal Reserve District's reported receipts
: U. S. currency (which are collected and given to the press
of the Federal Reserve Bank of New York) were as follows:
Total Receipts from all countries
Of which from Argentina
January
February
$1,248,000
$571,000
505,000 253,000
F. D.
131
C
0
P
Y
DEPARTMENT OF STATE
Washington
In reply refer to
FF 840.51 Frozen Credits/6042
April 23, 1942
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and transmits for
the information of the Treasury Department a copy of a despatch
from the American Embassy at Buenos Aires, no. 4696, April 10,
1942, concerning repatriation of United States currency from or through
Argentina.
Enclosure:
From American Embassy,
Buenos Aires, no. 4696,
April 10, 1942.
eh:copy
4-24-12
DUPLICATE
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0
132
P
Y
Buenos Aires, Argentina, April 10, 1942.
No. 4696
Subject: REPATRIATION OF UNITED STATES CURRENCY
FROM OR THROUGH ARGENTINA
The Honorable
The Secretary of State,
Washington.
Sir:
Referring to the Embassy's despatch No. 4396 of March 12, 1942,
in regard to the repatriation of United States currency from or through
Argentina, and with reference also to despatch No. 4647 of April 4,
1942, I have the honor to report that two conflicting news despatches
were published here on March 12 under New York date lines. One of these,
a United Press despatch published in La Prensa read, in translation, as
follows:
"The shipments of United States currency made
by Argentina in the month of February reached only
253,000,000 dollars, as contrasted with 505,000,000,
which they amounted to in January, according to a
compilation of the Treasury Department.
"Several financiers are of the opinion that
this very pronounced reduction indicates that
Germany has stopped its shipments to the United
States, through Argentina, of dollar exchange
appropriated in Europe."
On the other hand, the Associated Press despatch
published in La Nacion, which purported to be based on information
made available by the Federal Reserve Bank of New York, read as follows
(also in translation):
"The Federal Reserve Bank of New York has reported
that Argentina has been the country which sent the most
United States currency to the United States in the last
month. The shipments amounted to 571,000 dollars, or about
half the United States money received in the United States in
February.
"Argentina also had first place in the month of January
with shipments totalling 505,000 dollars."
Respectfully yours,
File No. 851
JWG: cec
For the Ambassador:
Edward L. Reed,
Counselor of Embassy
133
April 23. 1948
Mr. D. v. Bell
Mr. Dietrich
with reference to my of April 20 regarding the acquisition of
F
1,200,000 ounces of silver for colmage purposes by the Federal Reserve Bank of
New York for the Commonwealth Bank of Australia, the Federal today purchased an
additional 500,000 cusses at 35-1/20 per curse .999 fine for delivery seller's
option April-Nay. This sakes a total of 656,000 ounces purchased w to date.
TD:10:4/23/42
C
134
0
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Y
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
FD 811.51/4168
April 23, 1942
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses
a copy of despatch No. 232, dated April 9, 1942, from
the American Consulate General, Winnipeg, Canada, regard-
ing proposed "Free Nations Victory Loan".
Enclosure:
Despatch No. 232, dated
April 9, 1942, from
Consulate General,
Winnipeg, Canada.
THE FOREIGN SERVICE
OF THE
NO. 232
135
UNITED STATES OF AMERICA
AMERICAN CONSULATE GENERAL
Winnipeg, Canada, April 9, 1942.
SUBJECT: Proposed "Free Nations Victory Loan".
THE HONORABLE
THE SECRETARY OF STATE,
WASHINGTON.
SIR:
As of possible interest to the Department, in particular the
Treasury Department, I have the honor to report that in talking to the
leaders of the many foreign racial groups of Western Canada, I gathered
the distinct impression that a "Victory Loan" sponsored by the Free
Nations (but actually by the United States), would be of considerable
interest to them and similar groups in the United States, perhaps even
more than a Canadian or an American loan. In discussing this matter with
interested persons, I reached the conclusion that a "Free Nations Loan",
of which the proceeds would be used exclusively for the purchase of war
weapons for the armed units of each respective group, would be of practical
benefit. In the Province of Manitoba, for instance, there are thousands of
Ukrainians, of which at least ninety percent are anti-German, but whose
participation in the recent Canadian Victory Loan was not in proportion to
their numbers or financial capacity. They prefer to help the Ukraine in a
direct way, and are not satisfied with indirect help given the Ukraine by a
subscription to a Canadian Victory Loan. This is also true of the Poles,
Dutch, Norwegians, and other racial groups.
As I am not a banker I am unable to discuss the detail operation of such
a financial measure, but I am assured by my local banker friends that the
136
proposed measure is not without merit.
Respectfully yours,
A. W. Klieforth
American Consul General
In triplicate; one copy sent to
the Legation at Ottawa.
711
AWK/1t
A true copy of
the signed orig-
inal. (1) L.T.
Copy bj:4-23-42
137
April 23, 1942
To:
Adler, Chungking, China
From: The Secretary of the Treasury and Mr. Fox
Reference your cable of April 9, 1942, No. TF25.
1. Your paragraph No. 1 regarding Stabilization Board. According to
the Agreement of April 1, 1941 the fund includes that portion of the US$50
million which has been secured by purchase of yuan by the Secretary of the
Treasury through the Federal Reserve Bank of New York at the request of the
Central Bank of China. As yet there has not been any yuan purchased by
Bank
the Treasury because the Federal Reserve/have not received from the
Central Bank of China a request to that effect, and, therefore, the fund
as yet does not include the US$50 million or any part of it.
2. Your paragraph No. 2 advises us that Central Bank is opening an
account for Federal Reserve Bank in New York for the Chinese currency
equivalent of US$5 million. The Secretary is, of course, prepared to
purchase through the Federal Reserve Bank of New York the Chinese currency
equivalent of US$5 million in accordance with the procedure outlined above.
3. Your paragraph No. 2 also outlines proposal of Board to hold Chinese
Treasury notes instead of fapi. Since we presume that a quorum of the Board
was present when this decision was made this proposal would seem to be in
accord with the Agreement of April 1.
4. Your Section 2 gives gist of memorandum Board proposes to submit
to Dr. Kung. Mr. Fox is inclined to oppose the proposal and thinks that it
would be unfortunate if such action was taken. Treasury officials here feel
138
-2-
that the Stabilization Board should take no steps which would weaken its
long-run position as this proposal would seem to do. We believe that the
proposed curtailment of the sphere of activities of the Board is not
compatible with its effective functioning.
5. Your cable of February 3, TF17, paragraph 4, asks for information
to be obtained for Fox. A visit by Fox to New York banks has confirmed
previous impression that information is not available as to amount of fapi
held in Shanghai on Board's account nor as to amount of set-offs on books
of bank not yet credited to the Board. The Bank of China in New York has
kindly furnished Fox with a record of all transactions with the Board which
can be forwarded to Chungking, if such information is not available in the
Bank of China's offices in Chungking. However, information contained in
your cable of April 18, No. TF28, would seem to make this unnecessary.
ISF/efs
4/23/42
139
4
London
I'M
This telegram must be
paraphrased before being
communicated to anyone
other than a Governmental
agency. (BR)
Dated April 23, 1942
Rec'd 8:15 a.m.
Secretary of State,
Washington.
2086, April 23, 9 a.m.
FOR SECRET.RY OF THE TREASURY FROM CASADAY
Department's 1511, April 10.
Figures for 1939 are not available without much
Extra labor. BECAUSE 1939 was a year of transition
from PEACE to war, it was felt that comparisons with
pre-war 1938 and the war years 1940 and 1941 would
not be significant. Consequently the basic data were
never prepared.
OnE. The figures for total United Kingdom direct
tax liabilities for the calendar years 1938, 1940
and 1941 in millions of pounds are, respectively, 474,
896 and 1,306. THESE figures include national defense contributions and EXCESS profits tax as well
as income tax on the undistributed profits of oompanies. They are found by adding items two and four,
table E, Page six of the new White Paper, command 6,347
and subtracting from that sum the death duties and
property
Prober.
140
-2- #2086, April 23, 9 a.m. from London
property transfer tax figures found in item 12, table
2, page 11 of the SOME document. It will be noted
that the figures given above for 1938 and 1940
represent slight revisions of the figures shown
in item 15, table B of last year's White Paper,
command 60,261.
Two. The figures for total United Kingdom
personal incomes after deduction of direct tax
liabilities are found by subtracting the sum of
items 11 and 13 of table 2, page 2 of command
6,347 from item 8, page 10 of the SAME document.
The revised figure in millions of pounds for calendar
1938 is 4,256. The revised figure for calender 1940
is 4,982, while the figure for calender 1941 is 5,309.
Command 6347 and other budget material requested
in State Department's 1593, April 15, 7 p.m., WC.S forwarded by air pouch April 17.
Three. No prepared data are available on the
number of persons in the various income groups in
the United Kingdom but the Board of Inland REVENUE
has agreed to furnish SOME material on this subject
C.S soon as limited staff facilities will allow. When
this has been done, the data will be forwarded by
air pouch or by crble if the Treasury so instructs.
RR
MATTHEWS
141
April 83. 19th
Mr. Livesay
Rs. District
will you please and the attached telegrae to the American
Leston, "for Casales from the Secretary of the -
142
To Mr. L. W. Casalay,
American Nabuary,
Lendon, Regland
From the Secretary of the Treasury
Please send w air yeach the following reports listed is
recent weekly summaries of reporting activities: (1) Administration of Consumer Rationing and Limitation of Supplies.
(2) Consumer Rationing-Stocks of Consumer Goods and Consumer
Needs.
-4/22/42
143
TEIEGRAM SENT
DM
This telegram must be
paraphrased before being
April 23, 1942
2 p.m.
communicated to anyone
other than a Governmental
agency. (BR)
AMEMBASSY,
LONDON, (ENGLAND) .
1745
For Casaday from the Secretary of the Treasury
QUOTE. Please send by air pouch the following
reports listed in recent WEEKLY summaries of reporting
activities: (1) Administration of Consumer Rationing
and Limitation of Supplies, (2) Consumer Rationing-Stocks of Consumer Goods and Consumer Needs.
HULL
(FL)
FD:FL:BMcB
144
April 23. 1942
Mr. Livesay
Mr.
Is accordance with telephonic conversation, will yes please send the follow-
ing sable to the american consul. - page Iolandes
"year Treasury.
Reference your compates No. 60. april 11, 1942.
1. For year information the British Government has agreed to the
negotiation of dollar telegraphic treasfore, checks dreve os the Presenter
of the united States and the sale of United states currency for official
purposes at the rate of 04-03-1/2 per point ast is Great Seitain and
Treasury
Nerthern Ireland and the understands that the British Government has
cabled the Deminica central Deak respecting similar arrangements on the
basis of 04-03-1/2 per pound not is the starting area.
a. is order to facilitate the aagotiation of and improve the rate
for the sale of United States currency and checks dream on the treasurer
of the United States, the following presenture is suggested.
3. is the case of excess United states paper currency, instruct the
Beak of New South valoa. save, to prepare 1100 is cheeting
the assest of each denomination of each kind of separately, and
for Federal Receive notes and for Federal Receive Beak actoo, the list
must show separately the I of each denomination of the issue of each
beak, out CUSTOMER is half vertiently and stang or write - of beak on
each helf is tak. then deliver both belves and 11st is - to
.2.
145
american comoul. save.
4. Censular officer will verify amount of currency delivered to
his against 11st prepared w beak and then he will telegraph Treasurer
of united states through State Department the assess of - dolivered to him. then treasury receives this advice, payment is correspending amount will be node to the New York correspondent for the
account of the Bank of New south valoe, save. Please include is your
first telegram asse of correspondent. Upes receipt and emaination
Treasury reserved right to elais reinbursement for any surrency which
is not gennine. Each set of helves should be forwarded by coperate
earries accompanied w a copy of the list. The third oopy of list should
be forwarded by still another earrier. the American censular officer
will retain fourth - of list.
5. All United states dollar cheeke assum on the treasurer of the
United States negotiated by the Bank of New south sales, seven are to be
delivered to the American General, sure. accompanied by list is triplicate
with complete description of each cheek as follows: Name of drawers
cyclobal members cheek members amounts payee's names date of check.
Geneales officer will carefully verify checks against list and as
vise Treasury by telegram through state Department aggregate assest of
checks delivered by beak. Upon reseipt of this advice, treasury will
effect payment is assume to the New Test correspondent of
the Beak of New South Valee.
Generales offices should instruct Bank of New south valoo to see all
possible diligence is identification of payee and determining validity
of enterements. Beak of New south valoo should endorse chocke as follower
146
3-
Issue quote. pay to the enter of the treasurer of the United States
for erodise of our account with (asso of beak). signed Beak of New
south valoe. sure. and Incor quote. treasury will Look to Beek of New
south valoe only for usual gastrates under love applicable in the page
Islands.
Generaler officer should forward checks accompented w one enjoy of
list to treasurer of United States, Washington, as promptly as possible
by seffect means available. second copy of list should follow by coparate
carrier at empliest possible date. third copy should be retained w
censular officer.
6. Geneular officer should wake se arrangements for incurrence as
shipments of both checks and currency will be covered by Government
Lessee is Shipment Act.
7. the designation of the Beak of New south sales as a depository
of public acnies of the United States. as entitned in the Treasury's letter
to the Need office of the Beak as sydney. dated December 31. 1941. is hereby
extended to carry out the procedure outlined in shie telegram.
8. Please advise the Beak of New south vales, save. the Bank of New
seaload, seen, and other United States Government officiale of appropriate
parts horest.
9. TO sistaine number of checks dream on the treasurer of the united
states, suggest that you advise disbursing officers that they should cable
through their respective departments their local customer requirements.
assengements will then be note to advence dollar credits to the Beak of
New south Vales, sure."
147
4
the Department aggistrac the foregoing any expense incurred is enerying
eat the instructions contained is this telegram should be included in regular
accounts as separate item for billing Treasury is assertance with see. 1-43.
Foreign service Regulations.
148
April 23. 1942
Mr. Liveray
are D. W. Bell
is accertance with telephonic conversation, will you please send the follow
ing cable to the american consulate General, wellington, New zealand.
offen treasury.
1. For year information the British Government has agreed to
the segotiation of dollar telegraphic transfers, checks I $ the
treasures of the United states and the sale of United states currency
for official passposes at the rate of $4.03-1/2 per pound not is event
Treasury
Britaia and Northern Ireland and the understands that the British
Government has cabled the Deniales Central Beake respecting similar
assengements on the bosts of 04-03-1/2 per pound set in the sterling
area.
2. In order to facilitate the segotiation of the sale of United
states OUTFORM and cheeks dream - the treasurer of the United States,
the following proceture is suggested.
3. Is the case of encess United states paper currency. instruct
the Beak of New seeland, vellington, to prepare 11st in andreplicate
showing the amount of each denomination of each kind of currency sage-
rately, and for Pederal Reserve notes and for Federal Receive Beak
notes, the list much show separately the assess of each demonication
of the Lease of each beak, one CUSTOMER in half vertienlly and stomp
OF write same of bank on each half is tak. then deliver both halves and list
.8.
149
is astroplicate to american General, Bellington
4. censular officer will verify amount of - delivered
to his against list prepared w beak and then be will telegraph
greasurer of United States through State Department the - of
currency delivered to him. whoo treasury receives this alviee, sent is corresponding amount will be note to the New Tork cerrespen-
dont for the account of the Beak of New Zealand, wellington. Please
include is your first telegras area of correspondent. Upon receipt
and essamination Treasury receives right to claim reinbursement for
any CUSTOMER which 10 not gennise. Each est of halves should be for-
varied by coparate earnier accompanied w . - of the list. the
third cow of list should be forested w still another earnier. the
American censular officer will retain fourth easy of list.
5. All United States dollar checks - on the treasurer of
the United States segetiated w the Beak of New sealand, Wellington,
are to be delivered to the american General, wellington, accompanied
by list in triplicate with complete description of each check as for
leuse Sane of Issuers symbol - check members amounts payee's
asmes date of cheak.
Geneuler officer will carefully verify cheake against list and
ofvice treasury w telegraph through State Department aggregate assest
of checks delivered w bank. Upen reseipt of this advice,
will effect payment is corresponding account to the New Yesk correspon-
deat of the Beak of New sociale, Vellington.
Censular officer should includes Beak of New realand to use all
150
-3possible diligence is Identification of payee and determining validity
of enteresments. Beak of New Sealand should enteres checks as follower
Isser quote. Pay to the order of the Presenter of the United States
for crodite of - account with (amo of beak). signed Beak of New
restands-wellington. and Isser quote. Treasury will look to Beak of
Now sealand only for usual guarantee under love applicable is Bow
tealsad.
Censular officer should favore checks accompanied w e copy
of list to treasurer of United States, washington, as properly as
possible w seffest means available. second - of list should fellow by separate earrier as earliest possible date. Third copy should
be retained w censular officer.
6. Censular officer should make as attragements for insurance
as shippents of both - and chocos will be covered w Government Leases in shipment set.
7. the designation of the Beak of New sealand, wellington, as
a depository of public monice of the United States, as outlined is
treasury's letter dated April 4. 1942. is hereby extended to easty
out the presentare entitued in this telegran.
6. Please advice the Beak of New Sealand, vellington, and other
United States Government officials of appropriate parts hereof.
9. to alainise number of checks drew - the Treasurer of the
United States. suggest that you advise disbursing officers that they
should cable through their respective departments their local ready requirements. assengements will then to sade to advence dollar
151
.4.
eredite to the Beak of New sociana, wellington .
the Department approves the foregoing. any expense income is enerying
est the instructions contained is this telegram should be included is regular
- as separate item for bassing treasury is accordance with see. V - 45.
pereign service Regulations.
mm
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152
Y
April 23, 1942.
To:
Mr. Bonsal
From:
Mr. Southard
Below is the cable concerning which I spoke to you by
phone this afternoon. Will you please send it to the American
Embassy at Montevideo.
"The Federal Reserve Bank of New York informs us that they
have received an inquiry from the Central Bank of Uruguay inquiring
about shipment by air of $5 million of gold bars. The Treasury
Department is prepared, of course, to approve the shipment of
gold to Uruguay whenever the Central Bank so requests. However,
the Treasury is interested in ascertaining why it is regarded
necessary to ship gold from New York to Uruguay at a time when
the risks of shipment are so great and when the costs of shipping
are so high.
Please make discreet inquiry and cable us at once as we
would not wish to delay shipment if the Central Bank of Uruguay
decides to have the shipment made."
HDW:FAS:dmh
4/23/42.
153
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE April 23, 1942
TO
Secretary Ergenthau
FROM
Mr. White
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£32,000
£10,000
Open market sterling was again quoted at 4.03-3/4, with no reported
transactions.
In New York, closing quotations for the foreign currencies listed below
were as follows:
Canadian dollar
Argentine peso (free)
Brazilian milreis (free)
Colombian peso
Mexican peso
Uruguayan peso (free)
Venezuelan bolivar
Cuban peso
12-1/2%
.2372
.0516
.5775
.2064
.5295
.2860
3/16% premium
There were no gold transactions consummated by us today.
No new gold engagements were reported.
In London, spot and forward silver remained at 23-1/2d, equivalent to
42.67
The Treasury's purchase price for foreign silver was unchanged at 35+.
Handy and Harman's settlement price for foreign silver was also unchanged at 35-1/8
In execution of an order from the Commonwealth Bank of Australia for the
purchase of 1,200,000 ounces of silver, the Federal Reserve Bank of New York bought
500,000 ounces in New York today at 35-1/24 per ounce. It had previously purchased
156,000 ounces on April 20 at 35-3/8 This silver is to be used by the United
States Mint to fulfill a coinage order for the Australian Government.
We made no purchases of silver today.
154
Copy No.
13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 133
Information received up to 7 A.M., 23rd April, 1942.
1, COMBINED OPERATIONS
In the early hours of 22nd April a minor raid by two parties was
carried out on the coast near BOULOGNE, The northern party landed without oppo-
sition and carried out a reconnaissance but failed to reach their objective, one
slight casualty. The southern party was unable to land oving to enemy opposition.
The naval escort engaged enemy armed trawlers one of which was damaged and
another left on fire. No British ship was damaged and naval casualties were very
slight.
2. NAVAL
21st/22nd, Off ORFORDNESS two motor gunboats engaged at least six
E-boats one of which was set on fire. One motor gunboat was damaged, 22nd, An
A/S patrol motor boat was attacked and damaged by enemy aircraft south of FOLKESTONE,
3. AIR OPERATIONS
WESTERN FRONT. 22nd. Beaufighters damaged a six hundred ton merchant
vessel off the Norwegian coast. 22nd/23rd. Aircraft were despatched COLOGNE 69;
HAVRE 23; Seamining (BALTIC KIEL and HELIGOLAND) 64; Leaflets (ROUEN) one. Four
aircraft are missing and one crashed. About seven enemy aircraft crossed the
Boast between POOLE and WEYMOUTH. A few bombs were dropped near WAREHAM, causing
neither damage nor casualties,
LIBYA, 20th/21st, Wellingtons one of which is missing bombed
BENG HAZI and laid sea mines in the harbour.
MALTA, Between 13.59 hours 21 and 13.49 hours 22, 166 enemy bombers
with fighter escort attacked aerodrome. Five of our aircraft were destroyed on
the ground and eight damaged. Ten Spitfires were damaged in combat but all pilots
are safe. Fighters and anti-aircraft gunfire destroyed eight enemy aircraft,
probably destroyed two and damaged nine.
155
COPY NO.
13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 139
Following is supplementary resume of operational events covering period
16th - 23rd April, 1942.
1. NAVAL
It is reported that GNEISENAU was being towed from KIEL to GDYNIA
about 11th. 6 merchant ships totalling 39,000 tons arrived TRIPOLI (L) during the
week and 4 totalling 5,600 tons are believed to have arrived at BENG HAZI probably
from TRIPOLI (L). There are indications that the Japanese aircraft carriers re-
cently operating in the INDIAN OCEAN and several cruisers have returned to Japanese
waters. The main enemy submarine concentration was still in the West Atlantic
several being on outward and homeward passage. Others were at work in the BARENTS
SEA. 3 U-boats and a supply ship were reported in the South Atlantic on the 19th,
Some were also operating off SYRIA. Shipping losses were lighter. Attacks on 11
ships were reported, 4 of which were sunk, During the week ending 22nd 936 shipe
were convoyed.
Imports into the U.K. by ships in convoy during the week ending 18th
totalled 679,000 tons including 165,000 tons of oil, Non-tanker imports for March
were 1,981,50 tons, slightly more than half was food. A French Naval tanker and
an armed merchant cruiser with 2 submarines are reported to have arrived at DAKAR
on 20th. The tanker is probably one which was due to leave DIEGO SUAREZ on 15th
March with 9,000 tons of fuel oil, the armed merchant cruiser left TAMATAVE on 4th
March, It is estimated that 250,000 tons of Japanese shipping has been sunk since
JAPAN went to war.
2, MILITARY
In spite of the thaw fighting continues along almost the whole Russian
Front and is likely to increase as the ground drics. It still seems probable that
the main German attack will be towards the DON accompanied by simultaneous subsidiary attacks further north to threaten MOSCOW and to pin down Russian troops
which might be divorted to the southern front. A German attack in the CRIMEA as
a prolude to the chief operation may soon be expected. Evidence is still lacking
that the Germans at present contemplate any large scale operations elsewhere than
against RUSSIA. The number of German divisions on the Russian Front is 179, including 5 in Finland, there are also believed to be about 200,000 Humanian troops
(9 to 10 divisions) and about 30,000 - 46,000 Hungarians, the latter engaged only as
forces of occupation. Between is and 16 Finnish and 3 to & Italian divisions
complete the Axis array. In LIBYA Rommel is continuing to build up his strength
especially as regards mechanical transport. The Japanese advance in BURMA con-
tinues while at the same time they appear to be regrouping their forces in the
occupied territories. Their immediate strategy seems to be to isolate CHINA, con-
solidate their gains and be ready to soize any further opportunities. Their attitude towards RUSSIA is probably undecided and is likely to be formed by the turn
of events,
3. AIR OPERATIONS
WESTERN FRONT. Although this period was notevorthy for 2 outstanding
daylight operations, the Lancasters attack at AUGS BURG and the record number ofby
fighters sent over Northern France in 1 day - 653 - night work was curtailed
unfavourable weather and only included 1 heavy attack on HAMBURG. Nevertheless
Bomber Command carried out nearly twice the amount of sea-mining as in the previous
period and laid 253 mines.
MALTA. The scale of attack averaged about 190 sorties per day and cost
enemy in destroyed and damaged 104 aircraft. Although our own lesses in air
fighting were only 4 Spitfires and 2 Harricanes our losses on the ground were
the
heavy our total casualties to 22 fighters destroyed and at loast 37 damaged.
defence HALTA the last 3 months has
part
of the
German
Airduring
by(A)containing
about
The stubborn
bringing
by Force capacity
absorbed 300 an 400
important-aircraft and
which might have been used elsewhere and (B) by causing wastage in aircraft
trained crows. It is estimated that since 1st January 228 German aircraft including 104 JU 88's have been destroyed over MALTA to which must be added normal
active-service wastage.
156
The scale of effort by the German Force available shows that the utmost
being extracted from thom and implies that 2 sorties per day by aircraft must be
common and even 3 per day by no means rare particularly by fighters and dive bombers.
This intensity over a small heavily defended area must be producing a high rate of
wastage apart from aircraft actually destroyed and there are good grounds for
thinking that the number of aircraft lost to the onomy excoods MALTA's claims, It
is
is not too such to say that with the ronewal of full-scale operations in all
theatres the wounds inflicted by the defonders of MALTA will be felt by the German
Air Force for a long time.
4. EXTRACTS FROM PHOTOGRAPHIC AND INTELLIGENCE REPORTS ON RESULTS OF AIR ATTACKS
ON ENEMY TERRITORY IN EUROPE
DORTMUND. From photographs 16th April, a group of factories to the east
side of the town all engaged in constructional ongineoring work have been extensively
damaged besides other buildings in the vicinity. 3 workshops, a warehouse and
several sheds in the docks have been gutted.
DUIS BERG. On the 9th/10th March a steelworks manufacturing chiefly
plates for ships was very badly damaged.
RHEINBERG. From photographs 11th April, a factory which is thought to
produce 10 percent of the total German output of sodium carbonate was badly damaged.
The population of the RUHR is stated to be uneasy. There is a marked desire to
BLOVO outside towns but it is forbidden for work people to live more than ten kilonotres away from their work.
NORTHERN FRANCE. Photographs confirm that at ROUEN and CAEN hits were
obtained on the power stations and at LE HAVRE part of the power station roof has
been burnt.
5. OPERATIONAL AIRCRAFT BATTLE CASUALTIES
Metropolitan Area - British in the air, bombers 18, fighters 9, Coastal
8, Army Cooperation 1, Total 36. 4 pilots are safe.
Enemy
Destroyed
1
2
6
4
7
Nil
1
11
9
2
Total
Damaged
3
Bombors
Fighters
Miscellanoous
Probably
Destroyed
6
MIDDLE EAST including MALTA - British
In the Air
Bombers
On the Ground
6
3
Fighters
16
8
Nil
Total
2
Others
16
19
11 pilots safe.
Enomy
Nil
47
10
34
13
5
Fighters
Miscellaneous
Total
35
12
1
Bombers
Damaged
1
Destroyed
Probably
Dostroyed
16
48
Of the above totals, 30 were destroyed, 7 probably destroyed and 24
damaged by A.A.
Far East British and Allied in the air, bombers 2, fighters 4, total 6.
157
-3Enomy
Destroved
Fighters
Miscellaneous
Total
7
Probably
Destroyed
2
Nil
8
2
Damaged
4
Nil
4
NOTE: No account is taken of enemy aircraft destroyed on the ground in
any theatre or of British naval aircraft casualties.
6. HOME SECURITY
A1 though some bombs were dropped on every night except 1 most of thom
fell in open country. Estimated casualties to 0600/23 killed 33, seriously wounded
74.
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NUMBER 28
COORDINATOR OF INFORMATION
THE WAR
THIS WEEK
April 16-23, 1942
HOMELAND DEPARTMENT
Printed for the Board of Analysts
Copy No. 6
The decretary of the Treasury
APRIL 16-23, 1942
SECRET
Coordinator of Information
THE WAR THIS WEEK
With Petain's acceptance of Laval and the creation of a
frankly collaborationist government in France, the Germans
have won a diplomatic victory of far-reaching implications.
In the end it may involve the transfer to Axis control-in
effect at least-of the French fleet and bases. Present indi-
cations, however, suggest that Laval will move slowly at
first, attempting above all to consolidate his domestic position.
In the Far East, there is an enigmatic pause in the Battle
of Bengal, and the Japanese are withdrawing from that area
important elements of their fleet, including heavy units.
This may reflect a decision that the costs of an assault on
India would be too high, as suggested by the Japanese air
losses over Ceylon. Or it may mean merely the withdrawal
of carriers to obtain fresh complements of planes. Meanwhile the recent doubling of Japanese air strength in Man-
churia and Japan suggests an increasing interest in the
Siberian area. At the same time the Japanese have again
been feeling out the North Australian defense zone, but here
their heavy air losses-as compared with those of the
Allies-would scarcely encourage a significant forward
movement.
On the Russian front, the Soviets continue to claim gains,
but the best evidence indicates that Russian attacks are
aimed primarily at seriously hampering German preparations for the expected spring offensive. Military observers
credit the Russians with no advances of importance for several
weeks past.
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Pétain Yields to the Collaborationist Tide
On Sunday last Marshal Pétain asked the French people
to follow him as it had on the occasion of the armistice of
World War was enough to convince large numbers of people
that his advice should be taken and that France should lay
June 1940. With full knowledge that the assumption of
down her arms. His popularity and prestige, together with
a fundamentally egotistic belief in his own political impor-
power by Laval would be considered as nothing less than an
unfriendly act by the United States, the Marshal declared:
"Pierre Laval will exercise under my authority the internal
their own personal ambitions. Pétain's lack of faith in the
and external policy of our country. It was with him at the
most tragic moment of our disaster that I founded the new
order which must assure the resurrection of France.
"Today is a moment as decisive as that of June, 1940;
I again find myself with him to resume the national task, and
that of European organization for which we together have laid
the bases."
The somewhat enigmatic nature of Pétain, and the vacil-
lating character of his policy have given rise to justifiable
differences of opinion as to his willingness and ability to
resist the collaborationist demands of the Germans in the
past. Now, however, his frank acceptance of Laval, who has
promptly embarked on a candid program of cooperation with
the Germans, has destroyed faith in the sincerity and usefulness of Pétain. The most striking index to this new attitude
is quite obviously the recall for consultation of Admiral Leahy.
In future the Marshal is apparently to be viewed as a political
front for the Laval regime, of value merely in winning for
that regime political adhesion among parts at least of the
French public.
One close observer of the French scene points out that
Pétain's present action accords with much in his past. When
France in the summer of 1940 was faced with the decision
whether she should surrender to the Germans or continue
resistance in the colonies, the character and personality of
Pétain played a decisive role. His great prestige in the first
tance, permitted such traitors as Laval to gather about him
and to support his political pretentions while seeking to foster
cause of French democracy and his defeatist tendencies, as
recorded by Clémenceau and Foch from the last war, made it
only too appropriate that he take advantage of France's
prostrate condition in order to force upon her in 1940 his ideas
of what a French government should be. This cast of mind
has now made it perfectly possible for Pétain, despite his
notorious personal enmity for Laval, to accept a regime
pledged to full cooperation with the Germans.
Laval Maps a Collaborationist Course for France
Laval's formation of the new government obviously fulfills
hopes which he has long cherished. It is even reported on
high authority that some years ago (and long before the
collapse of the French republic) Laval conceived an antidemocratic regime, to which Pétain had declared himself
sympathetic, and of which he, Laval, would be the effective
leader, covered by the cloak of the Marshal's popularity.
Without the popularity of Pétain, Laval obviously realizes
that in the present juncture he could do little, unless he
were prepared to seek the full support of the German Army.
In his Monday broadcast to the French people Laval
declared: "I have always affirmed that rapprochement be-
tween France and Germany was a condition of peace in
Europe
Today no menace will prevent me from seeking entente and reconciliation with Germany."
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Only the future can reveal the precise form to be taken by
the policy here described by Laval in unvarnished terms. He
has reserved for himself the key posts of Foreign Affairs,
Interior, and Information (propaganda). He has chosen as
colleagues notorious collaborationists or men who are in any
event fully expected to do his will in realizing the new policy.
It is true that Darlan has been named successor to Pétain
and commander in chief of all the armed forces, responsible
only to the Marshal. But observers point out that the extent
of Laval's power, notably over the Ministries of War and the
Navy, will enable him to exert significant control over the
armed forces of France, and probably as a result to undermine
rapidly the position of Darlan.
manded the Strasbourg in the British attack on Oran, has been
given the naval command In Tangier the Germans are
planning to establish diplomatic or consular representation,
and are attempting to establish a regime of extraterritoriality.
A very recent report tells of the arrival in Tangier and North
Africa of "an extraordinary number of Germans" who, it is
claimed, are coming for espionage and counter-espionage
purposes.
While Allied suspicions have been aroused over plans
regarding the movement of French warships from North
African ports, it is reported that the French are calling for
more arms from the Germans to "protect" themselves against
the British. In Dakar, the press and the radio, through
directed propaganda efforts, are vehemently stressing loyalty
to Pétain, while from Martinique Admiral Robert claims
Laval's Apparent Intentions
It is believed that Laval will make no spectacular changes
at once. According to Anthony Eden, he will lie low for a
time to quiet apprehensions in America as well as in France.
Laval probably hopes to mediate between Washington and
Berlin and to acquire enough prestige in the New Order to
feather his own nest and that of France. He will do nothing
about Vichy warships for a time, Eden indicates, and neither
contemplates nor desires allowing Berlin to have them. He
might, however, use them to protect the trade of France with
her dependencies. Laval would no doubt permit Nazi penetration in these areas, so that a naval clash with Allied forces
might well result. He will foster the transfer to Germany of
French workers, but is unlikely to embark on so ambitious a
project as the conquest of territories held by the Free French.
Eden concludes
Certain changes are already in evidence, however. In
French West Africa Rear Admiral Paul Collinet, who com-
that his relationship with Pétain and Darlan has not changed.
Aris Naval Dispositions and the French Fleet
This week's map presents in diagrammatic form the
locations of the naval units in Europe that the United
Nations must watch-themselves heavily engaged in Atlantie, Pacific, and Far Eastern waters. Notable are the badly
battered but still powerful Italian battle fleet at Taranto;
the German naval concentration at Trondheim-threatening
both the British Home Fleet and the Allied supply line to
Russia, while guarding against an assault on Norway; and
the scattering of the remaining Nazi fleet units among numerous ports of the North and Baltic Seas, cleverly guarding
against a repetition by the British of surprise torpedo-plane
successes such as those at Taranto and Pearl Harbor. Here
the central question is, of course, what the future will bring
when the damaged Scharnhorst and Gneisenau (perhaps along
with the pocket battleship Lützow and the aircraft carrier
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Graf Zeppelin) are ready to join the Tirpitz and Scheer to
form a formidable battle line.
With Laval again in power at Vichy, the immediate issue,
however, is the French fleet. Here, one can distinguish four
separate elements of the French navy, in ascending order of
importance. First, there are the units already in Allied
hands-or as good as in Allied hands-including the old
battleships Paris and Courbet in British ports, the battleship
Lorraine and three heavy cruisers demilitarized at Alexandria, and the aircraft carrier Bearn at Martinique.
Second are the ships at Dakar and Casablanca on the
Atlantic Coast of Africa. Here are France's newest battleships, the Jean Bart and the Richelieu. The former, however, is incomplete (nor does Casablanca appear to offer
adequate facilities for its completion); the latter, damaged
by the British and with its bottom fouled, is probably of use
only as a sort of floating shore battery. Furthermore, to
join the main body of the French fleet naval units from
Africa would be obliged to run the gauntlet of Gibraltar.
Such a venture, hazardous at best, probably would have to
be attempted without the formidable air protection that was
in large measure responsible for the successful passage of the
Straits of Dover by the Scharnhorst and Gneisenau.
Third in importance are the vessels in Mediterranean ports
in North Africa. Lacking heavy naval strength, these units
would be of real significance only if they joined the main
French fleet at Toulon. It is barely possible that the resistance of local authorities might prevent their junction with
the bulk of the Vichy navy in any frankly collaborationist
gesture.
Fundamentally, however, it is the fourth group, the fleet
at Toulon, including four heavy cruisers and perhaps three
battleships fit for service-the old Provence, and the new,
fast Dunkerque and Strasbourg-to which commentators
refer when they speak of the "menace" of the French navy.
Meantime, press reports of the presence of two British
battleships, one of the new King George V class, in waters
near Toulon, suggest that the United Nations will not be
caught napping by any surprise move of the new Vichy
regime.
French Alternatives
The present danger, however, is more complex than a mere
"surrender" of the fleet would suggest. There is also the
question of bases, notably Bizerte, in Tunisia. The use of
Bizerte as a base for supplying Axis armies in Libya last winter caused a grave crisis in Franco-American relations. And
if the new Vichy government were to turn over all its facilities
to the Germans and Italians, the Axis naval and supply problem in the Mediterranean would be considerably simplified.
Yet the change would not be so great as some press commentators have suggested. There is considerable evidence
that the British are no longer attempting to control the
Western Mediterranean. The recent convoy to Malta, for
instance, came not from Gibraltar, but from Alexandria.
Gibraltar apparently remains as a sort of naval outpost.
But to neutralize Gibraltar, as Malta has already been largely
neutralized, would be of clear advantage to the Axis. For
this purpose, the use of the French base at Mers-el-Kebir
(Oran), less than 300 miles from Gibraltar, would be an almost
indispensable prerequisite.
Laval's announced intention is eventually to reconquer the
French colonies that have passed to De Gaulle. One observer
suggests that an ultimate Vichy attack on Syria would not
only be in line with this policy, but would also give Laval a
splendid pretext for what would amount to a surrender of his
Mediterranean fleet to the Axis. For an effort to reunite the
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French Empire, even though it meant joint action by the
French and Italian navies against the British, would no doubt
fire the imagination of at least one wing of patriotic French-
men. Certain naval officers in particular, outraged by the
British attack at Oran, and their fomenting of "civil war" in
Syria, are reported to be thirsting for vengeance on their traditional enemies.
Mediterranean Danger Spots
In Syria itself, a personal struggle between General
Catroux, the chief of the Free French authorities, and General
Spears, the British commander, is embittering relations
between the two occupying forces. A report from Beirut
suggests that Catroux, alarmed at the fact that the British
are more popular with the natives than the French, is about
to reorganize the government of the Lebanon in cooperation
with the Maronite Patriarch, spiritual director of about a
content with the practical mastery of these waters which they
have already obtained. On the other hand, the advice issued
by the government of Madras for all non-essential civilians
to leave the city, and the news of increased enemy merchant
ship movements in the Bay of Bengal, would point to a continuing Japanese menace.
With the Indian peninsula on the alert, post-mortem statements on the failure of the Cripps mission were not lacking.
The Chinese press reaction has in general been one of great
disappointment, tempered by the feeling that the Indian
problem is of such urgency that British and native leaders will
perforce continue negotiations and reach a satisfactory settlement. British newspapers see a certain gain from the break-
down of negotiations: now the responsibility for India's
future rests squarely with the Indians themselves. Furthermore, the British have won understanding and support from
an initially hostile public opinion in the United States.
third of the Lebanese.
In Libya, sandstorms during the early part of the week
completely stalled military operations. Although Malta,
The Japanese Shift Fresh Strength to the North
Britain's much-bombed island fortress, last week suffered
somewhat less damage and fewer casualties than in the
disappointment at Japanese failure to attack Siberia "as
preceding period, its situation apparently remained as critical
as before. In an unprecedented gesture, the King awarded
the George Cross to Malta's entire civilian population.
Pause in the Bay of Bengal
It is difficult to interpret the present lull in Japanese opera-
tions against India. On the one hand, the report that the
While an unconfirmed report from Finland pictures German
expected," a reallocation of plane strength indicates increasing Japanese interest in that area. The number of military
planes in Manchuria and Korea was increased in the first
half of this month from about 300 to 700, and in Northern
China (including Chahar) from 60 to 200. In Japan the
number was nearly doubled, rising from about 400 to more
than 750.
At the same time seven divisions, which were supposed to
have been in Japan proper, have dropped out of sight. Some
Japanese have withdrawn all the battleships and all but two
of the aircraft carriers previously concentrated in the Bay
of them are thought to be now in Manchuria, where there
of Bengal, might suggest that for the present at least they are
Maritime Province). In addition, a convoy bearing a large
have recently been 18 divisions (12 on the border facing the
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number of Japanese troops recently left Singapore, bound
northwards. It is believed that its destination may be Dairen,
Renewed Activity in Australasia
were reported by Japanese sources to have struck at Tokyo.
And on the European continent there was increasing evidence
that the Germans were speculating with some anxiety as to
just where Britain and the United States might conceivably
be planning to open up a second European front.
With General MacArthur's sphere of authority delimited
at last, and with United Nations aviators taking the offensive
been at Serqueux near Forges-les-Eaux (Seine-Inférieure) in
against Japanese air bases at Kupang, Salamaua, and Rabaul,
Occupied France, according to a report from Vichy. The
Allied optimism about Australia was on the increase. Ac-
Belgian government in exile has stated that the Germans are
cording to Lieutenant General Brett, United Nations Air
evacuating civilians and laying land mines in the Sambre
Commander, his fliers are destroying six Japanese planes to
every one of their own lost in action. At Rabaul, for instance,
Allied airmen destroyed 40 Japanese planes on the ground.
More recently, however, Japanese heavy bombers returned
and Meuse region. And a Swiss report suggests that German
press quotations of American and English newspaper predictions of a coming offensive represent a real endeavor to
to the attack on Port Moresby (New Guinea). Coupled
with reports of decreased activity in the Bay of Bengal, this
new attack suggests that the Japanese for the moment at
least have abandoned aggressive intentions against India,
and are again feeling out the defenses of the north Australian
Reichmarshal Goering and his staff since April 4 have
determine where such an attack might come. Here frank
curiosity is a more convincing explanation than a claim,
ostensibly from Berlin, of complete information on "Roosevelt's plan."
Wednesday's commando raid on Boulogne has revealed
once again the vulnerability of the channel shores of Occupied
France-presumably one of the areas which the Nazis are
protecting most heavily. With an estimated 900,000 men
zone.
Toward an Allied Initiative?
Thus far in the war, the Axis has held the initiative.
Operating on interior lines, and able to concentrate its
strength with speed and a reasonable degree of secrecy, it
has forced the United Nations to scatter their own troops
and naval units over the whole globe-to defend all points
to guard the whole European coast from Bordeaux to Trondheim, German forces for once are themselves spread danger-
ously thin.
The Japanese Radio Reacts to the "Bombing"
The still mysterious American "air attack" on Japanese
cities elicited copious comment from the Japanese radio.
at once and none of them adequately. The result has been
defeats, withdrawals, and defensive actions.
Last week there were signs that in some theaters at least
direction of the China continent. A characteristic propa-
the initiative was passing to the Allies. Apparently taking
advantage of the fact that Japanese carrier strength was
ganda note was sounded in the story of the machine-gunning
of a school and the death of a student. And finally a sombre
heavily engaged in the Bay of Bengal, American bombers
chord was struck by Major General Takaso Hiraguchi,
10
Various broadcasts declared that the planes escaped in the
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member of the Imperial Headquarters Information Board,
who warned that such raids may be repeated on a large scale
and that as for parachutists: "Such soldiers are different from
ordinary prisoners of war. If I am to state my personal
opinion very frankly, they should have their arms, legs, and
The Burma Road in Review
American observers recently returned from China and
realistic Chinese army officers in Washington for some time
have objected to the term "life-line" as descriptive of the
Burma Road. They point out that the Road can provide
heads lopped off."
certain priceless materials for Chinese arsenals and industries,
The Chinese Take Over in Burma
but not the heavy supplies for an army in the field. Even
with the loss of Rangoon and Southern Burma, however,
After rescuing a large number of British encircled at
Yenangyaung, Chinese forces in Burma, according to reports
from Chungking, recaptured this oil center and took over the
greater part of the Burma front. This development followed
the destruction of the Yenangyaung oil wells, successfully
executed by the British in the face of strong Japanese efforts
to save the wells. Meantime, the former British defenders of
the Irrawaddy sector have apparently retired to the north for
a much-needed rest.
Despite the successful Chinese counter-attack, and Allied
bombing of Rangoon and Port Blair in the Andaman Islands,
observers pointed out that there was little reason for opti-
mism about the Burma front. Chinese withdrawals in the
Sittang area have paralleled those of the British on the
Irrawaddy, where the invaders have now returned to the
assault at Yenangyaung. And the Japanese are evidently
adding to their attacks in these two sectors a third offensive
northwest from Thailand in the Bawlake area. Press reports
suggest that the recent Japanese naval concentration in the
Bay of Bengal may have been for the protection of troop
convoys going to Rangoon. When these reinforcements
reach the fighting front, the Chinese defenders of Burma
may well be seriously outnumbered, and may also find themselves in a still more disadvantageous position with respect
to heavy war equipment.
12
the road will continue for some time to be a source of supply
for China.
According to an American transport expert who inspected
the Road last summer, it will require from a year to 18 months
to move into China the materials collected at Lashio and in
dumps along the lower part of the highway. Other reports
confirm this estimate. An official survey conducted between
November 30 and December 29, 1941, showed roughly
150,000 tons of goods of all categories in Burma en route to
China. Of this total, almost half was already at Lashio or
points north. A month later, 22,000 tons of specifically lendlease goods were on hand at Rangoon, of which 10,000 to
12,000 tons were trucks able to move out under their own
power. Officers engaged in the evacuation of Rangoon have
reported that it was possible during February to move up-
country the great bulk of the lend-lease goods which had
accumulated there.
It is somewhat difficult to determine how much of this
material has already arrived in China. Perhaps 15,000 tons
a month would be a safe estimate. But of this total, threefifths may be gasoline. Fundamentally, then, logistic difficulties on the Road remain as crucial as ever. In a China
where every gallon of gasoline is precious, and where the
current revival of stage transport indicates a supreme effort
to utilize every available conveyance, however primitive, the
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shipment of lend-lease materials to their final destination
must necessarily be slow.
Although by now the ground is dry in the Crimea, such an
attack as that envisaged above is perhaps not to be antici-
The reverse side of the coin is the difficulty encountered in
getting strategic materials out of China to the United States.
pated until the first or second week in May. Furthermore,
some military commentators believe that a war of nerves
As of mid-March, there were on hand for shipment from
China more than 300 tons of bristles, 50,000 tons of tung oil,
200 tons of silk, 1,450 tons of tungsten, 1,850 tons of tin, and
5 tons of mercury. Air transport, for the present at least,
would scarcely be adequate to move such large cargoes out
of China.
may go on until June, and that then the Germans may launch
their main effort on Moscow, with only a holding attack to
the south. Such a "northern" school of thought draws
attention to Soroka and Murmansk as possible points of
German interest in the very near future-as lend-lease shipments over the Arctic Sea route steadily increase in volume.
Germany Reduces Her Rations
German Spring Strategy
As the period draws near when climatic conditions will
permit a German spring offensive, newspaper speculation on
the direction and character of such a drive has become
increasingly plentiful. Press commentators, apparently obsessed with Germany's supposed need of oil, have largely
restricted themselves to predicting an attack in the extreme
south directed at Rostov and the oil fields of the Caucasus
area.
Informed military observers point out, however, that a
drive for oil will doubtless be secondary to an effort to
destroy the Russian southern armies. If the latter objective
were attained, the former would naturally follow. Such an
offensive of annihilation might very well come in the form of
a pincer movement on Stalingrad-the southern attack from
the direction of Rostov, the northern from Kharkov or even
from Kursk. The eventual objective would most likely be
the port of Astrakhan on the Caspian Sea, whose capture
would isolate the Caucasus from the rest of Russia, except
for somewhat roundabout routes using the Caspian Sea
itself.
The new German food rations effective April 6 involved
average reductions of about seven per cent in bread and cereal
products, 19 per cent in meats, and 17 per cent in fats and
oils. For normal consumers, heavy workers, and long or
night workers, the cuts were proportionately greater than
average. For very heavy workers, however, the reduction
was below the general average, with the result that their
favored position became still more marked. Apparently
these new rations will continue to provide an adequate diet
for those in special working categories, but for normal consumers a diet only on the margin of adequacy.
Although these reductions are actually of a magnitude
previously unparalleled for any of the commodities affected,
they scarcely justify over-optimistic hopes. On the basis of
a study prepared in the Economics Division of the Coordinator's Office, it appears that the changes do not reflect a
critical situation in the food balance for the current crop
year (ending July 31). This is true even for fats and oils,
in which the German position is particularly tight. Rather,
we must look elsewhere for the reasons that have dictated
so drastic a step.
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Estimates of probable consumption requirements under the
new rations suggest that bread grain supplies in the future
should more than meet requirements; here the Germans may
even accumulate some surpluses as emergency reserves. Adequate quantities of meats are in all probability also assured
for the crop year 1942-43. Even fats and oils should be able
to fill present ration requirements through the same period.
The new reductions apparently represent an effort to adjust
consumption to the long-run supply outlook. Conscious that
the agricultural potentialities of the conquered lands cannot
soon be realized, the rulers of Germany are probably anticipating a less favorable supply situation, particularly after the
end of 1943. Essentially the rations reductions reflect,
therefore, some preparation for the possibility that the war
will not be won this year or even the year following.
In addition to the importance of these reductions in adjusting the food balance, they may also act as a positive morale
factor: the new rations are more closely comparable with the
prevailing rations in countries actively cooperating with
Germany-Finland, Hungary, Rumania, and Italy. Moreover, the obvious Allied interpretation that the step reveals
German weakness today may lead again to disappointed
hopes-an item of no small value in the Nazi war of nerves.
the defendants are not being given a fair hearing. According
to one story, the Turks have refused a direct request of the
Russian ambassador that the defendants be allowed to return
to the Soviet Union. In fact, Russo-Turkish tension has
become so great that the Turkish ambassador to Moscow
has felt obliged to leave for Ankara.
Thus far, the Turkish government has restrained its press.
But according to a report from Ankara, the Turkish premier
recently told a conference of editors that he would give them
free rein if the Soviets continued their provocation. After
the meeting, the report continues, the chief of the Turkish
Press Bureau warned that if the dispute came to a showdown,
Turkey would not hesitate to go to war with Russia. More-
over, diplomatic opinion in Ankara apparently views the
present Soviet press offensive as an effort to induce the British
to make a definite commitment respecting Turkey's post-war
frontiers.
Furthermore, on his return to Berlin, the Turkish ambassa-
dor to Germany declared that after repairs to the Maritza
bridge have been completed in June, traffic between Germany
and Turkey will be resumed on a "vast scale." The ambassador added that he was returning to Germany with hope for the
development of the traditional friendship and mutual confidence between Turkey and the Reich.
Russo-Turkish Tension
The Turks are still keeping everyone guessing. Although
a prominent British statesman has recently expressed himself,
in confidence, as pretty well satisfied with the state of AngloTurkish relations, strong indications last week appeared to
point in a different direction. The trial of the "Communists"
accused in the recent assassination attempt on German
Ambassador Franz von Papen has evidently aroused the
wrath of the Russian government and press, convinced that
16
Plebiscite in Canada
Voters in Canada on Monday will decide whether to release
the government of Prime Minister MacKenzie King from its
pledges regarding conscription for overseas service. Competent observers are taking a gloomy view of the prospective
repercussions, both for Canadian national unity and possibly
for her war effort.
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It is considered likely that the government will obtain a
large, but not necessarily overwhelming, majority in favor of
release. Wide support is anticipated in the English-speaking
provinces, but the French Canadians, who constitute onethird of Canada's 11,400,000 inhabitants, are expected to
oppose the government's appeal by majorities of between 65
and 75 percent, according to authoritative estimates. Prime
Minister King has made it plain, however, that an affirmative
vote in the plebiscite will not decide the conscription issue
definitively. The final decision can only be taken by the
government and Parliament.
The apparent issue in the plebiscite, additional man power,
could perhaps be more justly stated as controlled allocation
of existing man power-a sufficient number of volunteers for
overseas service (from 15,000 to 20,000 a month for all the
services) are being regularly enrolled at the present time.
But it is certain that the result of volunteer enlistment is a
great inequality of sacrifice between English-speaking Canadians and French Canadians. This fact serves to exacerbate feeling between the two groups. Furthermore, volun-
tary enlistment does not enable the government to plan
wisely the application of its man power as between service
on the war and home fronts. Conservative industrial and
mining interests in Toronto see the new law as a means of
providing them with a more adequate labor supply. This
implies not only that the factories and mines in Ontario are
losing productive capacity as part of the price of their
fighting zeal but also that their loss is Quebec's gain. Finally,
it is reported, Canadians are anxious to remove any sus-
picions among their Allies-above all the United Statesthat they are not accepting equal sacrifices in the war effort.
Opposition in the Province of Quebec
French Canadian antipathy to conscription is not attributed by observers to pro-Axis sentiments, but rather to the
inherent isolationism of the habitant, whose interests are
described as resting solely in North America, and to the
unfortunate experiences in 1917-1918, when thousands of
young French Canadians fled to the backwoods to escape the
draft officer.
Opposition to the plebiscite in the province of Quebec has
been both vocal and turbulent. Student demonstrations have
been widely organized and serious. The provincial government has avoided taking a collective stand, and its individual
members have either avoided the issue or advocated a negative
vote. The Catholic Church authorities have made no official
pronouncement. While the hierarchy is said to be remaining
within the strict bounds of loyalty to the government, priests
in the back parishes are reported to be openly counselling their
flocks to vote "no." The only important support from
Quebec has come from that province's representatives in
Parliament, a majority of whom have supported the
government.
Observers feel that a negative majority in French Canada
will mean a definite slowing of Quebec's war industry, which
among other things supplies vital aluminum stocks for the
Allied war effort. Passive resistance to the application of
conscription is considered a certainty, along with considerable
political turmoil. This will probably be accompanied by an
increased interest in the "separatist" movement, whose ultranationalist supporters believe that Quebec should become a
separate Catholic and French-speaking state on the banks of
the St. Lawrence.
18
19
SECRET
SECRET
The Significance of the New Role of General Ureta of Peru
The promotion of able General Eloy Ureta, who commanded and trained the northern Peruvian army which invaded Ecuador last July, to a post in which he can dominate
Peruvian policy, has led to serious conjecture as to what his
future attitude will be. His new role as commander of all
Peruvian military, naval and air forces, coupled with his
vast popularity with the masses and army and his outstand-
ing military talents, make him one of the more strategic
personalities of Latin America.
Observers differ as to whether Ureta has pro-totalitarian
sympathies, and wonder what influence he may have upon
the outwardly pro-United States attitude of the Prado
Administration. It seems perfectly possible that, as a
strong exponent of national expansion, he may sooner or
later initiate a drive to wrest further territory from Peru's
neighbors. In domestic affairs he may represent a stabilizing influence.
While Ureta undoubtedly wants to be Peru's next president,
he appears at least outwardly loyal to President Prado, and
seems willing to wait until he can succeed him legally at the
next election, in December, 1945. Meanwhile Ureta's strong
following among the Indian masses and the increased strength
of Prado's administration resulting from the victory over
APPENDIX
THE JAPANESE IRON AND STEEL POSITION
Steel capacity provides perhaps the most basic indicator of
a country's industrial potential for war. Japan's steel
capacity of eight million tons, as compared with ninety million
for the United States, sets a definite upper limit to her ability
to replace losses in armaments and in naval and merchant
tonnage. Moreover, it is difficult to expand steel capacity
under present conditions. If losses are heavy, Japan's basic
industrial limitations definitely restrict her ability to recuperate.
In the past decade, under the stimulus of rapid industrializa-
tion and military needs, the Japanese steel industry has
made great strides. At the same time, the industry became
increasingly dependent on foreign raw materials-a situation
reflected chiefly in steeply mounting imports of scrap from the
United States. Now she finds important sources of ferrous
materials denied her just at the time when she needs to
increase her steel production by about fifty per cent.
Ecuador, should enable Prado to pursue a stronger internal
policy henceforth.
Japan's Steel Position in 1935
In 1935, when Japan was still at peace, her total supply of
iron in all forms was nearly seven million tons, of which
about two-thirds was from foreign sources. These imports
were distributed in approximately the following percentages
of the total supply: scrap-29, ore-28, pig iron-8, and
steel-11/2 (see table). Most of the foreign scrap came from
the United States, partly in the form of ships for dismantling,
20
21
SECRET
SECRET
and undoubtedly much of the scrap recovered in Japan consisted of iron mined abroad. The imported ore came chiefly
from British Malaya and China, with substantial amounts
already from expanding exploitations in Australia and the
Philippine Islands. The pig iron came from India, a normal
source of supply, and exceptionally from Russia.
APPROXIMATE ORIGIN OF JAPANESE IRON RECEIVED
IN 1935
Percent of total
Japanese-empire origin
33.1
From ore (metal content)
3.0
Korea
4.5
Manchuria
8.3
Scrap
17.3
Foreign Origin
66.9
From ore (metal content)
British Malaya
China (excluding Manchuria)
12.9
9.2
3.5
Philippine Islands
Other countries
2.5
.1
Pig iron (metal content)
7.9
India
4.6
Russia (unusual)
3.3
Foreign ships dismantled in Japan
4.9
Scrap
the foreign sources of ferrous materials dried up, notably the
scrap exports from the United States. In response to this
situation, the Japanese steel industry drastically reduced
the ratio of scrap to pig iron in steel-furnace charges and
increased its pig-iron output so as to maintain the sharp
upward trend in the production of steel. It is understood
that pig-iron productive capacity has even outstripped steel,
and is now estimated at 10 million tons per year for the
This situation probably indicates that steel producing
facilities lag behind pig iron capacity. Unless Japan is to
develop further steel capacity within the empire-a difficult
and highly involved industrial problem-she would need to
seek these much needed additional steel facilities elsewhere.
Short of central Siberia, however, the only important steel
centers open to potential Japanese conquest are the Calcutta
region in India and the Newcastle region in New South Wales,
Australia, neither of which has an annual capacity of much
more than a million tons.
28.2
Australia
As a result of Japan's aggressive policies, a number of
empire against about 8 million tons for steel.
15.8
Japan
Japan's Iron Sources Shrink
The Iron Ore Bottleneck
29.3
Imports
United States
Other countries
Steel (net imports)
Even to find the resources required for her present pig-iron
capacity of 10 million tons a year, Japan faces obstacles of
24.4
unusual difficulty. To produce that ten million tons of pig
19.
5.0
iron, Japanese blast furnaces would require about 20 million
1.5
100.0
tons of iron ore, nearly 15 million tons of coking coal, and
three to four million tons of limestone. The limestone and
coal are obtainable in Japan itself, except for about three
million tons of high grade coking coal which must be imported
from North China to blend with the low quality Japanese
coking coal.
22
23
SECRET
per
Japan herself mines only about a million tons of iron are
year; but, owing to rapid expansion of mining facilities in
Manchuria and Korea, these countries may be able to produce
not only the six or more million tons to meet the estimated
capacity requirements of their own blast furnaces but also
four million for export to Japan-not to mention one and a
half million tons of pig iron. If one assumes another million
tons of ore from China (Yangtze valley), Japan would still
require about eight million tons of ore per year from other
sources. The maximum reported production to date has
been three million for British Malaya and the Philippines
combined, and six million for India together with Australia
Other nearby sources are unimportant as yet.
Unless she achieves further spectacular military successes,
Japan faces a serious mining problem. And to maintain her
blast furnaces operating at capacity she must ship millions of
tons of iron ore long distances over seas dangerously exposed
to attack. Japan's steel furnaces, moreover-predominantly
of the open-hearth type-are readily discernible from the sir
and are considered highly vulnerable. Except in Manchuria, all Japan's iron and steel plants are along the coasts.
The principal works, which include nearly half the empire's
productive capacity, lie in an exposed position at Yawata,
opposite Korea and near the western end of the Inland sea.
24
9.9 GOVERNMENT PRINTING OFFICE 1942
159
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 23, 1942
Secretary Morgenthau
TO
Mr. Kamarck
FROM
Subject: Summary of Military Reports
Russo-German War
The British Army estimates that the expected German
offensive against Russia will probably not occur before
the latter part of May at the earliest. This conclusion
is based on two factors. Owing to the rapid thaw of
unusually deep snow, the rivers are rising and the roads
are becoming unuseable. The continuous Russian pressure
during the last three months must have greatly delayed
the Germans in carrying out their plan to withdraw
divisions for refit during the winter.
(U.K. Operations Report, April 9 - 16, 1942)
Supply Route to Russia
In answer to the German concentration of attacks
on the northern Russian supply route, the British have
increased their escorts by additional destroyers. The
battleships of the Home Fleet are acting as cover for the
convoys.
It is estimated that there are now twenty submarines
operating against the Russian convoys. (This is slightly
less than half the number which have been operating in
recent weeks off the American coast.) The U-boats are
not meeting with a great deal of success. The first report
of a considerable loss was of the sinking of a British ship
on April 16 while carrying twenty Hurricanes and twenty-
five Matilda tanks (light tanks) to Russia.
(U.K. Operations Report, April 9 - 16; April 21,1942)
-2-
160
Malta
The heavy air attack on Malta continues. During
April 20, 240 bombers, escorted by fighters, attacked.
On April 22, 175 bombers were used. In these two days,
the British lost eight planes and 21 more were damaged.
Twenty-three Axis planes were destroyed, nine more were
probably destroyed, and 24 damaged.
Reinforcements of 47 Spitfires reached Malta on
April 20.
(U.K. Operations Report, April 21, 22, 1942)
R.A.F. Activity
From reconnaissance photographs, information on the
results of the heavy R.A.F. March raid on Lubeck is now
available. Nearly half the city, as distinct from the
suburbs, has been almost totally destroyed, principally
by fire, although there are traces of destruction caused
by the two-ton bombs. Severe damage has been caused to
warehouses at the docks and the railroad station in the
northwest.
(U.K. Operations Report, April 9 - 16, 1942)
Japan
British Military Intelligence states that there is
still lacking any evidence of a complete joint plan between the German and Japanese General Staffs. It is still
impossible to ascertain whether the Japanese intend to
move against northeastern India or to stop and consolidate
their present gains.
(U.K. Operations Report, April 9 - 16, 1942)
--
161
OF POSSIBLE INTEREST
The following analyses made by the British Political
Warfare Executive might be of interest:
France
The wheat situation in France is becoming extremely
serious.
with the return of Laval, the end of the Vichy regime,
as we have known it, seems apparent. Laval will probably
go slowly at first. His immediate job is to keep France
quiet during the spring campaigns and to put French economic
resources and manpower at Germany's service. Germany
undoubtedly plans to use the French merchant fleet to provoke a major clash between the French and British fleets.
Laval will not want necessarily to sever diplomatic
relations with America. He considers that he is popular
in America and has family connections there. He lacks
any sense of financial or political morality and he has
great skill and experience in political maneuver and
negotiation. Laval's principal weakness is that he has the
conviction that he is more than a match for anybody. As a
result, he is a bad judge of popular opinion.
The British policy to be followed is: "Toward the
situation our attitude must to a large extent be governed
by that of the American Government." "
Germany
The first real evidences are appearing that the British
bombings are having an effect on morale.
The major worry of the Germans appears to be the cut in
rations and the potato shortage.
(C. 0. I., April 20, 1942)
162
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 24, 1942.
TO
Mrs. Klotz
FROM
Secretary Morgenthau
I would like to have the first draft of my radio
broadcast. Give it to me, please, today. I marked it
myself.
Kift both drafts- feed 4/22/42
163
April 24, 1942
Harold Graves and Ted Gamble
Secretary Morgenthau
Please think over the following suggestion:
I would like to send a telegram to every State Chairman
of War Bonds and ask him to consult each of his County
Chairmen, and after consulting them, I'd like to get his
promise to pledge that he will give me at least our May
quota. Please draft this telegram. I want to make it a
good, peppy sales talk to my State sales manager and let
him consult each of his County sales managers. Please
draft a telegram and after doing it, please talko to me.
I would like to do this before lunch today.
2.R92
Completed
164
April 24, 1942
At lunch I told Harry Hopkins that I had
called up Miss Tully and told her I thought it was
a mistake to put Mr. Brand in as head of the British
Purchasing Commission because of his connection with
Lazard Freres; that word came back that I should
send for Lord Halifax and tell him, in no uncertain
terms, how I felt. I mentioned this to Hopkins and
asked him about it. He said, well, not to worry;
that he knew Brand was not going to head it. I asked
if he would assume the responsibility on the matter
and he said he would and I could forget about it.
165
April 24, 1942
4:35 p.m.
DEFENSE SAVINGS BONDS
Present:
Mr. Graves
Mr. Gamble
Mr. Mills
Mr. Sloan
Mr. Bell
Mr. Gaston
Mr. Haas
Mr. Tickton
Mr. Kuhn
Mr. Houghteling
Mr. Callahan
Mr. Mahan
Mr. Coyne
Mrs. Klotz
H.M.JR: I asked so many of you because there are
so many various things on this War Bonds that I wanted
to check up. The first thing I wanted to ask about is,
how often does the Federal Reserve Bank report on fiscal
agencies, Tickton?
MR. TICKTON: Number of issuing agents?
H.M.JR: Yes.
MR. TICKTON: Every week I get a telegram from every
Federal Reserve Bank giving me the number of issuing
agents subdivided by classes so that I know the number
of corporations, the number of banks. Every Saturday
I get that. You get that on Tuesday.
H.M.JR: And this thing here?
MR. TICKTON: That we get every week. That comes
166
-2from the state administrators.
H.M.JR: That is the state administrators?
MR. TICKTON: Yes. They give us the name of
every company that has the pay-roll savings plan.
Once a week that is brought up to date
H.M.JR: This is a different one?
MR. TICKTON: This is the state administrators.
H.M.JR: And the other thing is every Friday night?
MR. TICKTON: The other thing is every Saturday,
and we get it put together on Monday and you have it
on Tuesday morning. That is from the Federal Reserve
Banks.
H.M.JR: Well, then, on the fiscal agency thing,
New York is in good shape. They have twelve or fifteen
people working there, did you say?
MR. BELL: Ten, I think.
MR. GRAVES: Fifteen, Dan, they told me Wednesday.
H.M.JR: I thought it was ten.
MR. GRAVES: They have just added some additional
men.
(Mr. Coyne entered the conference.)
H.M. JR: Well, let me ask this. Which is the second
most important state after New York?
MR. GRAVES: Pennsylvania.
H.M.JR: Well, what is the fiscal agency situation
there?
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167
MR. BELL: Well, Pennsylvania is divided between
two districts. One is Philadelphia and the other is
Cleveland. I think Philadelphia is working rather hard
on it, but I think Cleveland probably just started,
because they took their men and trained them.
H.M.JR: Well, now--
MR. BELL: I should say that it is not as good in
those two districts, certainly not as good in Cleveland
as it is in New York.
H.M.JR: When should Mills go back to Detroit to
follow up on Ford and those other people?
MR. MILLS: Mr. Bartelt - Mr. Secretary, Mr. Bell
hasn't heard yet from the War Department. He was over
there on other business and the Secretary thought that
he would probably find out during the afternoon whether
it had been cleared through the War Department.
MR. BELL: It has been cleared with everybody up
to the Secretary of War. Now, they were trying to get
that thing out tonight, as a directive to the War Department
agencies. After that is done, we will send copies of it
to the Navy and Maritime Commission and ask them if they
won't adopt the same procedure.
H.M.JR: Well, if you approve, I would like Mills
to start out and, say, go to Philadelphia Monday.
MR. BELL: All right.
H.M.JR: Cleveland Tuesday, and then Detroit, say,
by Wednesday, if they are ready, keeping in touch with
you.
MR. BELL: It is all right.
H.M:JR: And then he might go out to Chicago and
then back.
168
-4-
MR. BELL: I wonder if it would be better for him
to spend a day in New York and see what they are doing?
They seem to be a little better organized on public relations than anybody else, don't you think, Harold?
MR. GRAVES: I do.
MR. BELL: And get that set up and then go around
to the other banks.
H.M.JR: Well, then, why doesn't he do New York
Monday--
MR. BELL: Philadelphia Tuesday.
H.M.JR: Philadelphia, then Cleveland.
MR. BELL: That is right. Then Detroit and then
Chicago.
H.M.JR: Then Detroit and then Chicago, keeping in
touch with Mr. Bell and me by phone, will you?
MR. MILLS: Yes, sir.
H.M.JR: New York, Philadelphia, Cleveland, Detroit
and Chicago. But I would phone in each day.
MR. MILLS: All right, sir.
H.M.JR: Is that all right?
MR. GRAVES: I am just wondering whether it ought to
be Chicago and then Detroit, Dan, in view of the fact
that Detroit is a branch of Chicago.
MR. BELL: Well, that is all right. He is going to
Detroit because of the particular situation that was
created there as a result of this War Department directive,
but I see no objection to reversing them, going to Chicago
first and then Detroit. He would be on his way back home.
169
-5H.M.JR: Well, I would like to leave this so the
minute the War Department directive is cleared, he can
stop wherever he is and go to Detroit; and stay there
long enough until you get those people. The minute
that Mr. Bell says that War Department directive is
clear, then I would like you to go to Detroit and get
those big motor companies. Stay there until you get
them. Is that all right?
MR. BELL: That is all right.
H.M.JR: After all, if you can get what's-his-name
there - our State Administrator said he could get
practically all these big companies in if we could get
that War Department thing straightened out. That would
be a lot of people.
MR. BELL: I think General Motors has indicated that
they are coming in. You remember, I sent you a memorandum.
They were very much pleased with the New York setup. They
were going back to Detroit to see if they couldn't immediately
set up the procedure.
H.M.JR: He will go to New York and he will make that
trip, and when he hears this War Department stuff is cleared,
we will send him to Detroit right away. Then this thing
that I got word to you this morning, Tickton, about
wanting a book for each state-MR. TICKTON: Yes, sir.
H.M.JR: Do you understand what I want?
MR. TICKTON: I understand what you want. Do you
really have to have them go down as low as five hundred?
There are about five thousand firms that will have to be
covered and checked. You want them all the way down?
H.M.JR: Oh, yes.
MR. TICKTON: It will take about fifteen people right
straight through for a week in order to do it.
170
-6-
H.M.JR: That is very few people.
MR. TICKTON: Well, you can't use more than that
if you want to check every one of these companies,
especially--
H.M.JR No, I want it because - I want it.
MR. TICKTON: O.K. (Laughter.)
Will a week be O.K.?
H.M.JR: Well, I don't have to wait for the ten
states.
MR. TICKTON: No, we will give them to you as we
get them.
H.M.JR: What is your deadline, Graves, to go to
Chicago tonight?
MR. GRAVES: Five forty-five.
H.M.JR: What time do you have to leave the office?
MR. GRAVES: Oh, five twenty-five.
H.M.JR: Well, certainly he wants the New York first.
This is a book now.
MR. GRAVES: Yes, I know what it is.
H.M .JR: And I want it from five hundred to five
thousand.
MR. GRAVES: I think that while Mr. Tickton is at it,
I hate to add to his job any, but he might as well go
ahead and give us the forty-eight states. As a matter
of fact, two-thirds of the job will be done when you have
done ten states.
-7-
171
MR. TICKTON: That is right.
MR. GRAVES: And he might as well have all the rest
of it while we are at it.
H.M.JR: O.K. Tickton, somebody told me you have a
dark night shift now.
MR. TICKTON: That is right. I have got thirty girls,
all colored, with a colored supervisor.
H.M.JR: I think that is wonderful. Somebody said
they are graduates of Howard University.
MR. TICKTON: Yes, sir.
H.M.JR: All of them?
MR. TICKTON: Not all of them. I have got more
college graduates on my night shift than on the day shift.
H.M.JR: And they are all colored girls?
MR. TICKTON: Yes. I may not have them next week,
though. If we move these people out to Chicago, they
may not want to move.
H.M.JR: You are not moving him to Chicago, are
you Bell?
MR. TICKTON: The job these particular people are
doing will go to Chicago. The job on pay-roll savings
plans will not go if we can avoid it, because you can't
keep the schedules in Chicago and have the information
here at the same time; but on this job we are doing, it
consists of getting a geographical breakdown by counties,
and it will have to go to Chicago because it will be more
convenient to have it there.
H.M.JR: Is that an Owens setup?
-8-
172
MR. TICKTON: No, that is a machine tabulating job
that is being done aside from Owens.
H.M.JR: How are you going to supervise that?
MR. TICKTON: Well, that job is a self-contained
unit which has been running for six months.
H.M.JR: Can't you use those colored girls on something else?
MR. TICKTON: Well, we probably will. Jobs like
this will provide work for these colored girls.
H.M.JR: Well, I think it is most useful, because
I don't know how other I could get hold of a State
Administrator and tell him, "Now, either you are good
or you are not good, and here is the book and we will
keep sending it to him once a week, you see.
MR. GRAVES: Yes.
H.M. JR: I think it would be very useful to you,
wouldn't it?
MR. GRAVES: Oh, yes.
H.M.JR: Do you want to ask anything on that,
anything else?
MR. TICKTON: No, that - as long as I know that you
want it for each state - and if I have a little time to
get the thing going the first time, after that-H.M.JR: I don't care so much. Just one little who has got a pay-roll deduction plan, and who is a
fiscal agent. The rest of the stuff is just decorative.
MR. TICKTON: All right, we won't have it.
H.M.JR: All right. Is that all right with you,
George?
-9-
173
MR. HAAS: Yes, that is all right.
MR. GRAVES: I think when those things are ready,
we ought to have it in mind to provide copies to the
Feds.
MR. TICKTON: Once we get them, Mr. Graves, we can
provide all the copies that you need.
MR. GRAVES: Because it will be very useful to them
in analyzing their situation, about who is a fiscal
agent and who isn't.
MR. TICKTON: The whole job is the first time you
do it and after that keeping it up to date and dividing
the copies is easy.
H.M.JR: Now, the next thing, did you decide to send
this telegram? I will read it out loud. It is to be
signed by me and to go to the state administrators.
"The whole country will be watching our quota drive
in May. It is the first big chance of the War Savings
Committee with a tangible objective to show their mettle.
Full fulfillment of our May quota not only will stiffen
the morale of the workers engaged in our own important
task, but will give courage to all other parts of the
war effort. Please convey this message to your key city
and county chairmen, and after consultation with them
wire me direct if we can count on your state for this
accomplishment in May." "
Well, the last sentence is all right. I wouldn't
word it just that way, but I haven't got time to fool
with it. Where is Ted Gamble?
MR. GAMBLE: Right here, sir.
MR. GRAVES: Well, I think that that telegram ought
to go, but that it ought not to go until these county
- 10 -
174
quotas have been announced.
H.M.JR: When will that be?
MR. KUHN: Monday, isn't it, Harold?
MR. CALLAHAN: No, Friday, May 1.
H.M.JR: Oh, why not until Friday, May 1? What is
the matter?
MR. CALLAHAN: Well, Mr. Secretary, we have the
problem of covering the entire country in order to do
an adequate and very sure job. That is the only way we
can do it.
MR. GRAVES: Of course the - the state organizations
have been informed. This is a matter of getting it down
to the county, local organizations, and it is a terrific
distribution job to get it into all the papers and whatnot.
H.M.JR: Well, if that is the case, then this shouldn't
go out until - 1 wouldn t send this out until-MR. GRAVES: This time next week.
MR. GAMBLE: A week from today.
H.M.JR: Send it out on May 1.
MR. GRAVES: Yes, that is right.
H.M.JR: And take out some of the fifty-cent words.
MR. GAMBLE: All right, sir.
H.M.JR: Put in a few more Fuller Brush words, you
know.
MR. GRAVES: If we have time, hold it until Peter
is here. ne can put in the Fuller Brush words.
- 11 -
175
H.M.JR: But you agreed to let it go?
means.
MR. GRAVES: Yes, I think it should go, by all
H.M.JR: All right, good. Now, something is happening
over in Virginia.
MR. GAMBLE: That is correct. They are having a
pledge campaign.
H.M.JR: A pledge campaign?
MR. GAMBLE: Yes, sir.
H.M.JR: Well, the only other criticism I have got
on that is that in New York you won't let me go for six
weeks, but in Virginia they have received no instructions.
Mrs. Eugene Duffield hasn't.
MR. GAMBLE: Well, in the rural areas we were going
ahead with a campaign in Virginia, and they were so far
along on the campaign that we didn't want to upset it;
but in the heavily populated areas, such as Norfolk,
they are going to change the campaign.
H.M.JR: Well, there doesn't seem to be any instructions, and she is actually going out and getting
the money.
MR. GAMBLE: Well, there is no instructions to the
people who are going to conduct the pledge to change it,
because we didn't want to upset it.
H.M.JR: Well, in the first place, she has had no
instructions and her interpretation is that she has
been told to get so many dollars.
MR. GRAVES: She means get pledges for so many dollars.
H.M.JR: Why don t you ask her?
176
- 12 -
MR. GAMBLE: Well, I talked with the Administrator
of Virginia--
H.M.JR: But ask Mrs. Duffield. Besides everything
else, she is the head here for the League of Women Voters
of Washington. Why not ask her?
MR. GAMBLE: I will do that.
H.M.JR: She is a smart girl and a New Dealer and
ask her what she has been told to do. Her idea is,
she was told to go out and get the money. She was
given so many names. She says she has got to go out
and get it, but nobody told her how. She is actually
going out and getting the money.
MR. GRAVES: Well, I think there is something wrong
there.
H.M.JR: I think it is wonderful. I don't think
there is anything wrong. That is what I would like.
MR. GRAVES: I don't think she has any such instructions
as that. We will find out.
H.M.JR: Will you?
MR. GRAVES: I might say, generally, about this
pledge thing that we have taken steps to stop the
pledge campaign in states where the thing has not been
begun or scheduled to be begun within the next few days,
and in the states where we stopped the thing we intend
to convert it over into something more like an order taking campaign, such as we are attempting to work out in
New York, and I hope in Chicago, but we are not upsetting
the pledge campaign in states where it is already started
or where it is scheduled to start within the next few
days.
H.M.JR: Now, at the Cabinet the President brought
up the question of a Speakers Bureau, and I have raised
177
- 13 -
that question twice in the last few days and I understand, Gene Sloan, you are the Speakers Bureau. Now
don't look at anybody. Just look at me. They say if
anybody wants a speaker you are the Speakers Bureau and
will handle all speakers. Now don't anybody help him.
Come on now, I won't say who told it. (Laughter) Do
you? Ted Gamble had better crawl under the table.
MR. GAMBLE: Well, that isn't exactly what I said,
sir. 1 said if any of the national departments have re-
quests for speakers, they channel them through Mr. Sloan's
office and get a clearance on the people who are sent to
the field, but our speakers are supplied largely by our
state organizations.
H.M.JR: You remember, I said if you wanted - who
handles speakers and I asked you twice and you said
Sloan.
MR. GAMBLE: I said they channel through Mr. Sloan's
office, sir. We don't have a Speakers Bureau as such.
H.M.JR: Well, you admit that you are a channel?
MR. SLOAN: Well, I admit that I am a channel in so
far as our field organization is concerned, if I under-
stand you correctly. If somebody offers to make a speech
in a certain locality or area for us, or wants to volunteer
his services, we write to clear him with the State Administrator and let him know that he is available and inform
him about it.
H.M.JR: In the reverse, supposing a state wants a
national speaker. What I am trying to find out is, who
do they go to? And I got the distinct impression from
Ted Gamble that they went to you.
MR. SLOAN: They would come to our organization and
in some instances we would supply one man, and in some
another.
H.M.JR: That is correct, isn't it?
MR. GAMBLE: That is correct.
- 14 -
178
MR. SLOAN: We'might supply it through Carlton Duffus,
or Mr. Callahan, or Mr. Houghteling or somebody else in
the organization who happened to know some one who was
well qualified in that field.
H.M.JR: Well, look, I think there is a missing link.
I suggest that somebody be pinned in this organization,
some one man and some one woman, whose job it is that if- -MR. GRAVES: Well, Mr. Morgenthau--
H.M.JR: Just let me finish, please. That if a state
calls
in and they want a speaker that they have them. Go
ahead.
MR. GRAVES: As Mr. Gamble has said, our speakers'
panels are all attached to our state and local organizations.
Now, when people want a speaker out of Washington they
usually want Henry Morgenthau, Jr. We get letters and
telegrams by the dozen asking for the Secretary of the
Treasury to come out and speak. They are not interested
in a speaker. They want the Secretary of the Treasury, and
of course--
H.M.JR: Don't try to butter me, Harold. (Laughter)
MR. GRAVES: No, that is exactly the way it is.
MR. KUHN: That is true.
MR. GRAVES: Now, we usually, of course, stall those
things off and say, "The Secretary is not available.
Then it comes down to a question of the people who are
interested saying, "Well, all right, get Bell or provide
some other person. They are after a certain individual.
I don't think we ever do have any requests from anybody
for a speaker in an anonymous sense.
MR. KUHN: We do occasionally, Harold, get a request
from some little community which wants a speaker and we
refer that request to the State Administrator in his state,
and it has worked out satisfactorily every time.
179
- 15 -
H.M.JR: Well, I had a suggestion to make which I
learned. I think that if this thing is going to be a
success - and incidentally, in the room you will all be
very much amused that when the President in Cabinet came
around to Mr. Landis he said, 'What have you got to report
today?" Landis said, "Well, I would just like you to know,
Mr. President, your suggestion as to town meetings for war,
it is going extremely well. You wouldn't know the Treasury
had a thing to do with it.
MR. KUHN: Well--
H.M.JR: I know. This is the thought I would like
to have you fellows think about. Somebody suggested a
Lawyers Association, labor people. I think we ought to
run a kind of a school for speakers and train them. Not
pay them any salary, but pay their traveling expenses, and
really drill them in this thing so that we don't have to
use the extreme like Mrs. Floyd Odlum, which is an unusual
case, and I think it is well worth considering, trying
to train a dozen men or a dozen women and then have it
grow in various areas, who are trained in what we want
to get over. Take girls who graduate in economics from
Vassar. Those girls have got a good education. They could
be trained. Other girls - it doesn't have to be Vassar.
OPA is doing just that, I think. They have given four
Vassar girls jobs this summer. They are paying their
expenses to go around and just speak. So this isn't
original
with me. But I wish you people would consider
that.
MR. GRAVES: Well, we will consider that.
H.M.JR: Then they would know what we are trying to
get over here and you could send them into various places,
particularly where - there will be lots of places which
won't pick up.
MR. GRAVES: Of course, I think that is not adequate
for our setup. I - there are literally hundreds and hundreds
and hundreds of meetings being held throughout this country
about War Bonds and hundreds of people are speaking and they
- 16 -
180
are speaking under the auspices of our local committees
and our local committees provide the speakers, and so
far, I know of no particular difficulty in getting
speakers who are entirely competent to do that. I don't
know--
H.M.JR: I had in mind-MR. GRAVES: We would do with a small list--
H.M.JR: I greatly doubt that. I will make a
little bet with you that I can go into New York City
and ask them to get their speakers together in a room
and you and I will sit down and let them ask us some
questions, and the questions that they ask us, you will
prove to be wrong.
MR. GRAVES: I will take your bet. I will bet you
as much as a package of Chesterfields, because as it
happens in New York we have a very competent man in
charge of our Speakers Bureau. I forget his name.
At
any rate, he is a professional at this business.
H.M.JR: I will take you on.
MR. GRAVES: A pack of Chesterfields.
H.M.JR: As a matter of fact, you people have got
to sell me on the field organizations and you had better
be thinking how to do it. I am not sold through lack of
knowledge. I don't know.
MR. GRAVES: Yes.
H.M.JR: I don't know. I don't know how you are
training these three hundred thousand people, see.
MR. GRAVES: But on this matter of speakers, I don't
think that is any particular deficiency in our setup.
H.M.JR: Well, do you mind proving it to me by taking
me into a state?
MR. GRAVES: No. You mean you would like to go to New York?
H.M.JR: I don't care.
MR. GRAVES: But that was our bet. Our bet was New York.
(Laughter)
181
- 17 -
H.M.JR: I will go to New York with you. You pick
the state and I will pick the weapons. How is that?
MR. GRAVES: No, but as a matter of fact, I think
New York is very well taken care of. Now, other states,
I suppose
H.M.JR: All right, we will go to New York together.
MR. GRAVES: All right. I would like to. I would like
you to talk to the man who is in charge of speakers'
bureau there. He is a very competent, able fellow and
has done a fine job.
H.M.JR: Now, you won't be here tomorrow, and I am
relying on Gamble to be here at 9:30 to explain to this
advertising group what our job is and I would like Kuhn
here and Houghteling and Callahan and Mahan and Gaston,
if he has the time, please. I would like to start it
at some other place than my office. I would like to get
it going. Do you want to do it in the theater?
MR. KUHN: You can do it in room eighty-one where
we have those conferences.
H.M.JR: Let's do it in room eighty-one.
MR. KUHN: I will try to get that room. That is a
good place for it.
H.M.JR: Let's do it in room eighty-one. But the
idea is to get over to them this thing, right?
MR. KUHN: Yes.
H.M.JR:
Now, anybody that has anything to do with
War Bonds can take a crack at me. Bell?
MR. BELL: No, I haven't any questions.
MR. KUHN: I have some advertisements for you to
clear.
182
- 18 H.M.JR: Well, we can do those as we go home. Do
you mind going home with me?
MR. KUHN: No, but they are great big things.
H.M.JR: I know. I want to live with them over
night. Have you got your MacLeish thing tonight?
MR. KUHN: No.
H.M.JR: When is your next appointment?
MR. KUHN: I have nobody.
H.M.JR: I will put them in my bedroom; and if I
sleep badly, I am against them. (Laughter) Have I
ever told you my story about the lawyer and the elephant?
There is the very famous Hindu woman lawyer, and she was
reatined as a lawyer for the elephant. This elephant - his
master died. This is a true story, about a hundred years
ago. He left the elephant his entire estate because he
was so mad at his family. He left it to the elephant, and
this estate grew very, very valuable, and after a hundred
years the family tried to break the will, so they had a
maharaj jah appointed, and this woman defended the interests
of the elephant. The maharajah would receive all petition-
ers at the top of a high flight of marble stairs. At his
feet was an English bull dog. The woman lawyer ascended
the stairs; and as she got up to the top of the stairs,
she leaned over and patted the bull dog on the head, and
the bull dog wagged his tail, and the maharajah said, "Your
petition is granted, Madam, but I want to explain. Madam,
your petition is granted, and you are dismissed. She
backed all the way down stairs; and when she got down
stairs, the head of the court said, "How did you know the
trick?" She said, "What is the trick?" He said, "If
the bull dog wags his tail, your petition is granted;he
and if he barks, you are refused. That is the way
decided everything. So I will live with these things
tonight; and if I have no nightmares, I will accept them.
183
- 19 MR. KUHN: Some of them you have seen. These are
the things that have been cleared by Mr. Gaston, Mrs.
Morgenthau, Mr. Gamble, and myself.
H.M.JR: In other words, you are daring me to go
home in the car. Can you put them in the car downstairs?
against you. (Laughter) All right, we will take them
MR. KUHN: Yes, sir.
MR. GRAVES: I would like to ask if Dano is going
to have anything to do with this?
MR. KUHN: Sure, he will.
growls
H.M.JR: Dano will look over in the back, and if he
(Laughter)
MR. GASTON: I am afraid they will all be cleared
if Dano has anything to do with it.
H.M.JR: You think his tail will keep wagging?
MR. GASTON: Yes.
MR. GAMBLE: I have nothing.
MR. HOUGHTELING: No, sir.
work?
H.M.JR: Are you getting those AF of L men to
MR: HOUGHTELING: Yes. I talked to them on the long
distance phone today, and I have got an appointment Monday
morning. I have got a table of organization that I am
going to put up to them, and my man Goodman went up to
Philadelphia with Philip Murray, and Philip Murray says
that he will go along on the same sort of a plan, and
that he wants to get together with Mr. Green and you
and talk the whole thing out just as soon as possible.
H.M.JR: Well, the sooner, the better.
184
- 20 MR. HOUGHTELING: All right, sir.
H.M.JR: I will give you either Monday or Tuesday
to invite them for lunch.
MR. HOUGHTELING: All right, fine.
H.M.JR: Including yourself.
MR. HOUGHTELING: Thank you very much.
H.M.JR: I missed you last night.
MR. HOUGHTELING: I am sorry I couldn't be here.
H.M.JR: Well, you can have either Monday or Tuesday.
You had better make it Tuesday. Let's say Tuesday. I
will give you Tuesday.
MR. HOUGHTELING: I will try to get them both here.
H.M.JR: I am crazy to get them started, and I will
have these plants to show them, which plants we have
the pay-roll deduction thing in. I am crazy to get them
going.
MR. HOUGHTELING: All right.
MR. CALLAHAN: Mr. Secretary, you have appointed an
editorial board which has slowed me up.
H.M.JR: Slowed you up?
MR. CALLAHAN: That is right. I am trying to get a
lot of things out for May 1 for the quota campaign, and
I send them over to the Treasury Department, and I don't
get them back for a day or two. It is not a complaint
against Mr. Kuhn or Mr. Gaston or anybody else, but
nothing happens.
MR. KUHN: What have you got in mind, Vincent.
(Laughter)
185
- 21 MR. CALLAHAN: Well, I am trying to put out a news-
paper for May 1, and I have in mind a letter from the
Secretary to be on the first page.
MR. KUHN: It was cleared this afternoon at four
o'clock.
MR. CALLAHAN: We were to go to press day before
yesterday. (Laughter)
H.M.JR: You had better run a time clock on them,
both of you.
MR. CALLAHAN: I am not complaining, I am just--
H.M.JR: Well, you keep on complaining. It is
all right to get results, but the editorial board stays,
so you just put the pressure on the boys.
MR. CALLAHAN: I am not trying to eliminate the
editorial board, I am--
H.M.JR: But they are ready to meet every morning
at ten thirty; and everything that comes over at ten
thirty will be cleared on the same day. Is that right,
gentlemen? If you get it over by ten thirty, it will
be cleared on the same day.
MR. GASTON: Or turned down. (Laughter)
H.M.JR: But you have got to get it to them by
ten thirty, and they meet every morning, and they will
give it to you - there is no reason if they meet at ten
thirty why they couldn't give you an answer by noon.
MR. CALLAHAN: I am talking about forty-eight hours
ago. I am not talking about today.
H.M.JR: Well, I don't know.
MR. CALLAHAN: You appointed the board, and it is
hurting me, not helping me, and I am trying to move very
fast, and I am losing out.
186
- 22 -
H.M.JR: Well, let me give you a little story. I
went over to the Secretary of Wer this morning with a
plan which was given me last night at nine o'clock to
say to the soldiers in uniform that they must buy
Defense Bonds, and I refused to say it. Now, if the
editorial board had seen that, I never would have gotten
it. As a result of that, I never left Mr. Stimson's
office until five minutes of eleven this morning. I was
there for an hour and fifty-five minutes. He kept four
newsreels waiting an hour and three quarters while he
rewrote the thing. Now, that was a question, if there
had been somebody that had seen this thing, I am sure
they would have caught it. I read this thing last night
and this morning, and I said, "I won't say it." I get
over there, and Mr. Stimson says, "I don't like it. I
thought you wanted it." He sends for a man with two
stars on his shoulder, in charge of War Department
propaganda, and he looks at it, and he says, "No, Mr.
Morgenthau is right." Well, Mr. Stimson took the time,
and it took him one hour and three-quarters to write a
hundred and fifty words. So, I am more interested right
now with the thing being right, but like everything else,
Vincent, it takes time to get it started. They are
organized now; and if you will get your stuff into Kuhn's
office by ten o'clock any morning, there is no reason in
the world why by noon it shouldn't be back with a yes or
no. It certainly can't hold you up very much.
MR. KUHN: They will get through most of the time.
I wouldn't guarantee that.
MR. CALLAHAN: I still say that I don't like the
idea of the editorial board.
H.M.JR: And I am saying - I am going to ask you,
will you cooperate?
MR. CALLAHAN: I will.
H.M.JR: And I will get it. But there is no reason
in the world why you shouldn't get a clearance every day;
and if you don't get it, you know these gentlemen.
187
- 23 MR. CALLAHAN: No, I am not complaining about the
gentlemen
on the editorial board, I am complaining about
the idea.
MR. KUHN: Mr. Secretary, sometimes--
H.M.JR: The idea is good.
MR. KUHN: Sometimes a job has to be rewritten.
It isn't just a matter of yes or no. Today Mr. Gaston
rewrote that letter for the newspapers and made it much
better, but it takes time to rewrite. It isn't just a
matter of yes or no.
H.M.JR: Well, Vince, the editorial board stays,
so you will have to live with and like it. (Laughter)
Give me your nice smile, see. When you smile, I always
have to go against myself.
MR. GASTON: I want to say that it is like every-
thing that is new, it will work better after a little
while.
MR. CALLAHAN: Mr. Gaston, I think it will work
better after a little while, but the Secretary of the
Treasury has asked me to do some publicity by May 1.
When May 1 comes and the stuff is not delivered, he
asks Callahan, "Why," and he doesn't ask the editorial
board. Right, Mr. Secretary?
H.M.JR: Well, the purpose of this meeting is to
have an exchange so that everything will run smoothly,
and it is a good point; and I am sure these gentlemen
will do better by you in the future, but I suggest you
put
a time stamp on when it leaves your office. Anything
else?
MR. CALLAHAN: No.
H.M.JR: You see, I don't trust myself, Vince. It
isn't as though© I was passing on it. I have got other
people to do it. I don't want to do what a number of
188
- 24 -
Cabinet officers have done. I would be sick tonight if
I had gone ahead and made that appeal to the men in
uniform to buy bonds, because I think it is wrong.
want this board to catch the things. You and I are both
human. You will be very glad some day if they catch
I
something that will keep you from making a mistake.
MR. CALLAHAN: Mr. Secretary, may I ask that Mr.
Callahan be invited to one of these meetings to see how
they work?
H.M.JR: They don't want you.
MR. CALLAHAN: Well, we could see how quick they
operate and how slow they operate and so on.
H.M.JR: The board makes its own rules, I am
sorry. I am not the editorial board. I picked them up
for their integrity, and they can make their own rules.
I am not going to make any rules. Mahan?
MR. MAHAN: I was going to make that suggestion,
that when there is a plan affecting a man, that he be
allowed to be there to have his inning. I think if a
thing is carefully thought out and planned, he has had
reasons for doing it, and possibly should at that time
be allowed to present his case, so to speak.
H.MR. Well, they can make their own rules. All
I know is how the President works. He asks you for suggestions. Then try to reach him while he is making a
speech. But the board - they are self-governing. I
haven't told them how to work. I just said I want them
to pass on every important piece of literature or anything
that is trying to influence public opinion, I want that
when it is new to be passed on by this board for me to
keep me from doing something like - well, Mr. Knox came
out and talked about the Germans being our enemies, and
the Chinese have never gotten over it. But anyway, you
know these people, and you will have to fight it out with
them, but the board stays.
189
- 25 MR. MAHAN: That is all right.
H.M.JR: Sloan?
MR. SLOAN: Nothing.
H.M.JR: George?
MR. HAAS: I have nothing.
H.M.JR: Mills?
MR. MILLS: No, sir.
H.M.JR: Tickton?
MR. TICKTON: I have the memorandum you sent to Mr.
Bell about the telegrams to the Federal Banks on issuing
agents. Will our current stuff take care of that?
H.M.JR: Yes.
MR. TICKTON: O.K.
MR. BELL:This is apparently what you meant. That
is going out to the Federal Reserve Board.
H.M.JR: This is what?
MR. BELL: This is going out to the Federal Reserve
Board, I understand, today, about Mills' and McKee's
talk.
H.M. JR: I will read this. I didn't know about the
other. I don't want to double up. But that post card
stuff is disappointing to me.
MR. BELL: We may get some more stuff on that later
on.
H.M.JR: I wish Haas and Tickton would think of
another postal card check.
190
- 26 -
MR. BELL:
It is a little early after the pay-roll
deduction
plan, I think.
H.M.JR: Well, personally, I would like to do that -
oh, I would like to do it once a week, George, for a
while, that pay roll thing, sending postal cards to bond
buyers.
MR. BELL: Well, that is a little often unless you
pick a different group, I think.
Well, I am willing to leave it to George,
if youH.M.JR:
are. What?
MR. BELL: I wouldn't do it once a week unless you
are going to change names.
H.M.JR: Oh yes, change names.
MR. BELL: Well, you might do it that way.
H.M.JR: Oh yes, take another bunch of names.
MR. HAAS: We will talk it over.
H.M.JR: All right. Herbert?
MR. GASTON: I have nothing.
H.M.JR: Harold?
MR. GRAVES: Nothing.
H.M.JR: O.K. Thank you all.
MR. BELL: I think on that letter to the Federal,
it had probably better go, but I don't think any more
ought to go from the Federal.
H.M.JR: Tonight?
MR. BELL: I told Mills I thought that one ought to
go. It would be embarrassing to stop it, but I don't
think any more ought to go from the Federal.
191
April 24, 1942.
Dan Bell
Secretary Morgenthau
Please give me the draft of the telegram going
to the Presidents of the 12 Federal Reserve Banks asking
each one of them to give me a report on what they have
done this week, up to and including Friday night, to get
various companies to become fiscal agents. I would like
them to do this each week until further notice. - Tribhta is
Whatever happened to those 12,000 postal cards
that I asked each Federal Reserve Bank to send out - by
now they ought to be back and be analyzed. I should have
the report. Please let me have that by noon Friday.
See report By all
4/29/42 Discussed at Defence meeting 4/24 - Huast
Follow think about sending out portal cards each
to different names -
I his with
192
April 24, 1942
TO:
Mr. Haas
Mr.Tickton
FROM:
The Secretary
Please find out from Mr. Graves or Ted Gamble
which are the ten States they have decided to concen-
trate on for our War Savings Bond drive. After you
get those 10 States, I would like to have you prepare
a book for me on each State showing what companies em-
ploy over 500 but less than 5000 employees and indicate
whether they have or have not adopted the payroll plan
and whether they have or have not become issuing agents.
I want the book just the same as you have given me for
companies with 5,000 or more employees, but only put
in the last three columns in these new books if they
are easy to get. If they are not easy to get, forget
about it.
After you have read this memo, you had better
clear it with me personally to make sure that you under-
stand it.
once.
I would like to get this into the works at
I want this book kept up-to-date once a week.
193
April 24, 1942.
Ted Gamble
Secretary Morgenthau
I understand that across the Potomao in Virginia
they have already started the quota drive. My informant
is Mrs. Eugene Duffield, who told Mrs. Morgenthau. Please
find out what is going on over in Virginia, and have they
started their quota drive. Please report to me.
I've Gambles memo of 4124-
194
TREASURY DEPARTMENT
WASHINGTON
April 24, 1942
MEMORANDUM FOR THE SECRETARY:
In answer to your memorandum inquiring as to
whether or not a quota drive had been started in
Virginia, please be advised that no such campaign
is under way. In some of the rural areas, the
pledge canvass is just now being started. In the
urban areas, the pledge campaign has been stopped
to permit us to accompany this operation with the
firm pledge agreement.
Ted R. Gamble
POP DEFENSE
-
BUY
UNITED
STATES
HOMOR
195
TREASURY DEPARTMENT
WASHINGTON
April 24, 1942
MEMORANDUM FOR THE SECRETARY:
All
With reference to our State organizations
taking advantage of the tour of Lt. Comdr. O'Hare,
please be advised that Ensign Oliphant, Lt. Miller
and Lt. Comdr. Paul E. Smith, in charge of the
public relations activities of the Navy, are attempting to arrange for us a tie-in along the line
of O'Hare's itinerary. I am to hear from them
again later this afternoon and will report to you.
Ted R. Gamble
PORDEFENSE
-E
BUY
UNITED
196
TO:
4/27/42
Mrs. McHugh
The Secretary went to the War
Department April 24th to speak
for the newsreels with Secretary
Stimson. The occasion was the
launching of the Army's Payroll
Savings plan for civilian employees
This is the text of Secretary
Morgenthau's talk.
F.K.
MR. KUHN
file 4/24/42 197
SECRETARY MORGENTHAU:
I am very glad to know that the 600,000
civilian workers in Army establishments are now able
to join the millions of other civilians who are helping
to finance the war with their savings. Nobody would
ask the men in uniform to do any more for their country
than they are doing now. All America is grateful to
them and proud of them.
But the non-combatants in Army service can
set an example to the whole country by saving every pay day
for the purchase of War Bonds. As you know, the Treasury
has begun a nationwide campaign in which every American
who gets a regular income is being asked to set aside
ten per cent of it for bonds and stamps. Whoever saves
in this way will be helping his country now and himself
tomorrow.
198
WAR PRODUCTION BOARD
WASHINGTON, D. C.
April 24, 1942
OFFICE OF
DONALD M. NELSON
CHAIRMAN
My dear Mr. Secretary:
I shall be delighted to appear with you on
the nationwide War Savings broadcast from your
office on the evening of May 4.
As you know, we are anxious to help in any
way we can in the tremendous job you have of
selling war production bonds.
Sincerely yours
Wh Lulan
Donald M. Nelson
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
S+
W
199
THE UNDER SECRETARY OF THE TREASURY
WASHINGTON
April 24, 1942
TO THE SECRETARY:
Mr. Jones of the Federal Reserve Bank
of New York telephoned this afternoon that
Phelps-Dodge - Corporation qualified for its New
York office as an issuing agent for War Savings
bonds. This company also advised the Federal
Reserve Bank that it wanted to qualify each of
its branches as issuing agents, and the Federal
Reserve Bank is securing applications from each
of these branches through the various Federal
Reserve Banks.
I was also advised that the Federal had
had a further conference with representatives of
U. S. Steel Corporation. The Treasurer of this
Corporation is favorably inclined to have the
Corporation become an issuing agent and says he
will take the matter up with the Executive Committee
the next time it meets, which will be the first
part of May. It now looks as if U. S. Steel will
become an issuing agent.
own
DEFENSE
BUY
UNITED
AWINGS
BONDS
200
TREASURY DEPARTMENT
Washington
April 24, 1942.
MEMO FOR THE PRESS:
The Treasury was informed by the Works Projects Administration today that the removal of a WPA worker from the
payroll in Illinois because he purchased War Savings Bonds
resulted from misinterpretation by local officers of the
regulation concerning the continued employment of a worker
upon determination that a family is no longer in need
".
.
"
The discharged worker who had saved enough from his $12 a
week salary to buy two $37.50 War Savings Bonds will be reinstated.
The Works Projects Administration said that in view of
the incident a definite interpretation of the regulation with
particular regard to the purchase of War Savings Bonds is
being sent to all district managers. In substance, the
interpretation will state that if a worker is able to invest
in War Savings Bonds or Stamps out of the comparatively small
salary which he earns, there will be no restriction against
such investment.
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201
TREASURY DEPARTMENT
FISCAL SERVICE
WASHINGTON
AUREAU OF ACCOUNTS
OF THE
April 21, 1942
TO MISS CHAUNCEY:
Referring to your inquiry this morning regarding the
newspaper clipping captioned "WPA Worker Loses Job when he
Buys War Bonds", Mr. W. H. Brummett, Assistant Commissioner
of the Work Projects Administration, has advised by telephone
FIT
that this case was a misinterpretation of the regulations
issued by the Work Projects Administration regarding ineligibility for continued employment on Work Projects Administration projects, and that the employee will be reinstated.
The pertinent regulation reads as follows:
#Certification shall be cancelled upon determination
that a family is no longer in need, that no person
is employable, or that no person is otherwise eligible
for employment in accordance with the regulations
of the Work Projects Administration."
Mr. Brunmett also advises that a definite interpretation
of this regulation is being sent out with particular regard
to the purchase of War Savings Bonds, and that a copy will be
mailed to this office. Such new interpretation will state,
in substance, that if a worker is able to invest in War Savings
Bonds or Stamps out of the comparatively small salary which
he earns, there will be no restriction against such investment.
R. W. Maxwell,
Acting Commissioner of Accounts
Attachment
POP DEFENSE
BUY
UNITED
STATES
SAVINGS
BONDS
Schwar
P Id
202
Times A Therald
APR 21 1942
He Did It on $12 a Month:
WPA Worker Loses Job
When He Buys War Bonds
CHESTER. III., April 20 (C.T.
P.S.) -A WPA worker here has
been fired from his job by the
Government because he saved
enough from his salary of $12 a
month to buy two $37.50 war
bonds, It was disclosed today.
The man is Robert L. Daniel
40. bachejor. who for the last year
has been working as a WPA employe in the Randolph county food
stamp office at Sparta.
That Daniel was discharged on
the theory that a man able to buy
war bonds does not need a WPA
job, was admitted at the East St.
Louis district WPA office by Earl
Clark. acting district manager.
Clark said there is no different
tiation between war savings bonds
and any other kind of savings in
present WPA regulations, and that
he had no alternative 10 discharg.
ing Daniel after learning of his
ownership of the bond. through
the quarterly review which WPA
makes of its employee.
202
Times Therald
WATHINGTON
APR 21 1942
He Did It on $12 a Month:
WPA Worker Loses Job
When He Buys War Bonds
CHESTER. III., April 20 (C.T.
P.S.) -A WPA worker here has
been fired from his job by the
the theory that a man able to buy
war bonds does not need a WPA
job, was admitted at the East St.
month to buy two $37.50 war
Louis district WPA office by Earl
Clark, acting district manager.
Clark said there is no differen-
Government because he saved
enough from his salary of $12 a
bonds, it was disclosed today.
The man is Robert L Daniel
40. bachejor, who for the last year
has been working as a WPA em
ploye in the Randolph county food
stamp office at Sparta.
That Daniel was discharged on
tiation between war savings bonds
and any other kind of savings in
present WPA regulations and that
he had no alternative to discharging Daniel after learning of his
ownership of the bond through
the quarterly review which WPA
makes of its employee.
April 24, 1942
TO:
SUBJECT:
203
Z
MR. HAROLD N. GRAVES
PROGRESS REPORT FROM WAR SAVINGS STAFF
QUOTA CAMPAIGN
Quota figures for every county in the
nation are being serviced to all daily and weekly newspapers through arrangements made by the Press Section
with the Associated Press, United Press, International
News Service and Western Newspaper Union.
The figures were supplied to the Washington
offices of the press associations for mailing to their
regional and state bureaus. They will be carried on
state wire services for release in afternoon newspapers
of Thursday, April 30. Copy of news story on the quota
campaign released along with the figures is attached.
In addition to this announcement of the
figures by the press services, Western Newspaper Union
is sending state maps, with the county quota figures
written in, to all newspapers. Sample proofs of these
maps are attached. Western Newspaper Union is also
sending sets of editorial "ears", one column boxes, and
a letter from the Secretary for publication in all papers.
All of this material is being sent in the form of mats,
and for papers which do not have metal casting facilities,
in the form of metal plates.
-2-
204
The quota campaign made front page news
in virtually all newspapers on two days last week, on
Monday, April 20 and on Friday, April 24.
Special quota campaign publicity material
for both press and radio is being mailed to all county
chairmen, and state administrators. These kits include
newspaper statements for release by mayors, county
chairmen, presidents of county bar associations, medical
associations, facts about bonds, radio addresses, spot
announcements, interviews, suggestions for obtaining a
maximum amount of publicity, and farm, club, labor,
women's and sports page newspaper specialties.
PAYROLL SAVINGS
The Payroll War Savings Plan has now been
installed by 63,747 concerns. A total of 19,874,893, or
65 per cent of the 30,400,000 employees of private concerns
are now able to buy War Savings Bonds through Payroll
Savings. An additional 1,420,007 employees of Federal,
State and Local Governments, or 32 per cent of the
4,400,000 in this group, now have the Payroll Savings
Plan available to them.
Executive Order No. 9135, signed by the
President on April 16, established an Interdepartmental
Committee for the futherance of the voluntary Payroll
Savings Plan among employees of the Federal Government.
PAYROLL SAVINGS (continued)
-3-
205
This committee's functions will be to:
(1) Formulate and present to the Departments
a uniform Payroll War Savings Plan
(2) Assist the Departments and Agencies in
its adoption and operation.
(3) Recommend improvements in the program
adopted-32 each department.
Distribution is now being made of the
General Electric booklet which outlines the campaign
being conducted by that company. The plan enormously
increased employee participation in Payroll Savings.
Copies of this booklet have been sent to approximately
22,000 firms employing more than 100 persons where
the Payroll Savings Plan has already been established.
Copies are also being sent to all members of Congress,
the Cabinet, and to all heads of the various independent
agencies and establishments of the Government; to the
presidents and directors of the Federal Reserve Banks,
and to members of the Board of Governors of the Federal
Reserve.
Distribution is now being made of duplicate
copies of the Sales Reports on the progress of Payroll
Savings Plan received from various companies throughout
the country. These sales reports are photographed by
the Eastman Kodak Company on microfilm and distributed
to the State Administrators. The information contained
in the reports keeps the Administrators advised about
the percentage of participation and dollar investment in
Bonds through Payroll Savings Plans in operation in
PAYROLL SAVINGS (Continued)
-4-
206
their respective states.
PLEDGE CAMPAIGN
Two states plan changes in the starting
dates of the Pledge Campaign. In New Jersey, the campaign
starts on June 1, while in Maine, the campaign opening
date has not been set definitely.
In some states the house to house canvass
method is being used. Others are carrying on the campaign
along occupational lines. A few states are using specialized
methods, as in North Carolina, where they have organized
the work along the lines of their annual Community Chest
drive, and workers from the Community Chest organization
recruited. Georgia and Washington have set up their
campaign as a military organization. The workers in
Georgia are known as "Georgia's War Savings Army."
Virginia's campaign is called "The Victory Pledge Canvass",
while Indiana's will be called "MacArthur Week."
In Maryland and Michigan the sugar rationing
program will be used as a means of contacting responsible
citizens for pledges. War Savings Committeemen will then
follow up with the regular house-to-house canvass.
NEWSPAPER CARRIER SALES
Sale of ten cent War Savings Stamps by the
newspaper carrier boys of 864 newspapers now total
238,899,023. This is an increase of 12,370,283 ten cent
Stamps, or their equivalent in Bonds or Stamps of larger
denomination, since the report of April 16.
-5 -
207
RADIO
A special broadcast over the Blue Network
on April 23 featuring Secretary Morgenthau, Lt. Commander
O'Hare and leaders of agriculture, labor and management
highlighted the announcement of establishment of the
county quota system.
Radio Station KV00, Tulsa, Oklahoma, is
using billboards to publicize stars of the "Treasury
Star Parade." These billboards, photographs of which are
attached, are placed in hotels, department stores and other
vantage points.
Proctor and Gamble is sponsoring a $51,000
Bond contest over NBC and CBS networks -- a total of 234
stations -- which brings Bond messages to 25,000,000
homes weekly. This contest is also being publicised
in seven mass coverage magazines, totaling over 26,000,000
circulation.
A sponsor's kit containing material adapted
for sale to local concerns has been sent to all radio
stations. The National Association of Broadcasters
has requested 200 of these kits for distribution at their
annual convention. Hundreds of stations have written
asking for additional kits and have voiced enthusiastic
approval of the idea.
PRESS
Ed Reed, chairman of the Cartoonists Com-
mittee, is now on tour, personally contacting the nation's
-6-
208
PRESS (continued)
leading newspaper artists and editorial writers, to
obtain special cartoons and editorials on the quota
system for use beginning May 1. The decision to personalize our request was necessary because virtually every
War agency is now writing and telegraphing cartoonists
with all sorts of appeals for their help.
A special memo to the Press, released by
the Treasury Press Department, was airmailed to all
State Administrators and State Chairmen at the request
of the Secretary. A copy of the release, concerning the
policy of WPA workers and their purchases of War Bonds,
is attached.
Postal Telegraph-Cable Company advises that
all future printings of their jumbo telegram blanks will
carry the War Savings Minute Man Cut. Sample blank is
attached.
War Bond feature articles by leading American
Writers are now being released to International News
Service, Associated Press and United Press. The material
being given to each service follows:
INS -- Articles by Kathleen Norris, Mary
Roberts Rhinehart, Gilbert Seldes,
Prof. Edwin Walter Kemmerer of
Princeton, Jules Bogen, and a poem
by Mary Craig Sinclair, wife of
Upton Sinclair.
AP -- Articles by Thomas Mann, Carl Van
Doren, Lionel Edie, Prof. Benjamin M.
Anderson and a poem by William Rose
Benet.
-7-
209
PRESS (continued)
UP
--
Articles by S. J. Perelman, Erskine
Caldwell, Dr. Elgin Groseclose and
Rufus Tucker, and poems by Arthur
Guiterman and Robert Nathan.
To date, more than 30 magazines have advised
us that during July, when all major magazines will have
a special American Flag cover, they will include War Bond
appeals on their covers also. Total circulation of the
magazines who will carry War Bond slogans and emblems
on their July covers is approximately 20,000,000.
RELIGIOUS PRESS
War Bond articles written by the Very Rev.
Msgr. William R. Arnold, Chief of Chaplains, U.S. Army;
Charles E. Diehl, Moderator of the Presbyterian Church
in the United States, and by Rabbi Solomon Goldman of
Chicago, were sent out to religious publications.
Editors of the Christian Herald, publication
with the largest circulation among Protestant periodicals,
advise that they will use a War Bond drawing on their
cover in the July issue.
EDUCATION
Ten million School Pledge cards are now
being printed to be ready for distribution by May 5.
The main purpose of this pledge, which is separate
and distinct from the regular pledge campaign, is to keep
the War Savings Program active among school children
during the Summer vacation months. The School pledge
EDUCATION (continued)
-8 -
210
calls for no fixed amount of savings and it gives every
child an opportunity to join in the nation's war effort.
The Pledge, designed in red and blue on a white card,
reads as follows:
"A Pledge
"To Every Soldier, Sailor and Marine
Who Is Fighting to Save my Country
"For you there can be no rest. For me there
should be no vacation from the part I can
play to help win the war. I therefore
solemnly promise to continue to buy United
States War Savings Bonds and Stamps to the
limit of my ability, throughout my summer
vacation and until our victory is won."
WOMEN'S ACTIVITIES
The Women's Division is preparing two special
kits to be distributed to more than 15,000 leaders of
Women's War Savings Committees throughout the country.
Kit No. 1 concerns women's publications and has three
purposes:
(1) To describe all materials that are
available for use by State and Local
Chairmen of Women's War Savings Committees.
(2) To provide these chairmen with some of
the new and revised publications.
(3) To suggest ways in which these materials
can be used effectively.
Kit No. 2 has as its subject National
Women's Organizations. It contains the following material:
(1) A brief statement of the policy of the
Women's Section in working with national women's organizations.
WOMEN'S ACTIVITIES
-9-
211
(2) Methods for state and local committees
to use in working with state and local clubs.
(3) A list of 221 national organizations'
ad case histories of their War Savings Programs.
BUSINESS PUBLICATIONS
An appeal is being made to 1250 business
publications and 2000 company publications urging strong
editorial support of the "ten percent" and "Quota" plans
as outlined by the Secretary in his letter to all business
firms having 100 or more employees.
A new advertising release (copy attached) was
sent to business publications.
COMPANY PUBLICATIONS
Plans have been completed and approved for
a spectacular visual presentation of our company publications
program at the Chicago convention of the National Council
of Industrial Editors Associations on May 14. The presen-
tation is being produced for us by General Motors. It
points up the urgent necessity for all workers to invest
at least 10 per cent of their income in War Bonds.
A. P. Alexander Jr., of the Coca-Cola Company, will assume chairmanship of our Company Publications
Committee, succeeding Merrick Jackson of General Electric,
who has resigned to assume duties with the War Department.
FARM PUBLICATIONS
Thirty-five farm publications report that they
will publish our special farm advertising release, "Let's
Talk About Money and War." The 35 publications represent
- 10 -
212
a combined circulation of approximately 13,500,000 farm
readers. The release was mailed to 50 publications.
NEWSREELS
Special newsreel shot of Secretary Morgenthau
is currently showing in all five newsreels in all theatres
throughout the nation.
A War Bond newsreel feature of Dorothy Lamour
is scheduled for release by all newsreels on May 7.
The War Savings newsreel crews are now
operating in Alabama, California, Florida and Virginia.
COMMUNITY SING
The Lucy Monroe Community Sing in Mobile,
Ala., drew an audience of 15,000. All stores in the
city were decorated and all civic and patriotic organizations took part in a parade in connection with the
song fest.
RALLIES
Ilka Chase, Hugh Marlowe, Jessica Dragonette,
Eli Seigmeister's ballad singers of America, and Barry Wood
made personal appearances at a War Bond rally at Barnard
College. The entire faculty of Barnard College and Columbia
was present, and the event included special promotion on
the university's own radio station; photographs in the
Columbia Spectator, College newspaper, and a fifteen
minute broadcast over the NBC network. Admission was the
purchase of a $1.00 War Stamp. Stamp books and albums
- 11 -
213
RALLIES (continued)
were autographed by the stars for additional Stamp purchases.
TOWN MEETINGS
In cooperation with OCD, the War Savings
Staff staged four "Town Meetings for War" on Saturday,
April 15, in Amenia, N. Y., Hannibal, Mo., Ontario,
Calif., , Tuscaloosa, Ala. Secretary Morgenthau sent special
message to the Amenia meeting, while Donald Nelson sent
a similar message to Hannibal, his home city.
SPECIAL
Gimbel Brothers in Philadelphia have converted
their main show window into a booth for War Stamp sales.
Labeled "Freedom Corner", and "War Stamp Center, U.S.A."
it has proved an attractive display and has resulted in
sale of many Stamps.
214
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
FROM
Secretary Morgenthau
APR 24 1942
Mr. Haas
Subject: Operation
of payroll savings plans in 11,464
companies in March.
1. The attached table summarizing the operations of
the payroll savings plan in 11,464 companies during March
covers about 40 percent of the persons employed by industry
or business exposed to the plan in the middle of that month.
The data shown have been submitted to the Treasury during
the past three weeks in response to your monthly letter to
the companies having the plan, requesting information on the
progress of the plan in their organizations.
2. The 11,464 companies reporting to the Treasury for
March employed 7.1 million persons, some 3.7 million of
whom (approximately 51.5 percent) actively participated in
the payroll savings plan during the month of March. In the
aggregate, these persons authorized their employers to
deduct approximately 4.9 percent of their pay during the
month for the purpose of accumulating funds for the purchase
of savings bonds. On the average, this amounted to $8.08
for each one of the persons participating.
3. On previous occasions tables similar to the attached
have been transmitted to you covering the operations of
the payroll savings plan during the months of January and
February. Those tables covered a smaller number of companies
than appear on the table attached, but the proportions of
the total number of persons exposed to the plan in those
months that were covered were roughly the same as in the
present table, i.e. about 40 percent. A comparison of the
percentages and the per capita figures (rather than the
absolute figures) therefore will provide an overall picture
of the progress made during the past three months in bringing
up (1) the percent of participation in the plan and (2) the
per capita amount of salary deducted once the plan has been
installed. This comparison appears in the table that follows:
215
Secretary Morgenthau - 2
Participation in Payroll Savings Plans
Part I - Percent of total employees participating in plan
Size of Company
Jan.
Feb.
Mar.
10,000 - 19,999 employees
20,000 and over
50.3
38.9
42.1
25.0
29.1
55.2
48.9
43.5
37.6
39.7
57.9
50.5
49.4
43.1
47.8
Total - All companies
37.1
46.5
51.5
Under 999 employees
1,000 - 4,999 employees
5,000 - 9,999 employees
Part II - Average deduction per employee participating
Size of Company
Under 999 employees
1,000 - 4,999 employees
5,000 - 9,999 employees
10,000 - 19,999 employees
20,000 and over
Total - All companies
Jan.
Feb.
Mar.
$6.13
6.49
5.71
6.93
9.97
$6.74
7.09
8.54
7.25
9.31
$7.12
7.75
$7.28
$7.69
$8.08
9.01
8.64
9.45
The second part of the foregoing table has been classified by size of company to show the progress that has been
made in medium-large companies -- those with from 5,000 to
19,999 employees -- since January. The fact that employees
in small companies are deducting less than employees in
the employees all
is without significance, however, since on
large
basis
of average
earnings, payrolls
sizes
arecompanies
authorizing
deductions
fromin companies at about of the
same rate (see next to the last column of the attached table).
216
:
of
:
employees
:
:
:
:reporting:
exposed
participating
in payroll
savings plans
Percentage
of |employees:
employees
:
:
:companies:
:
number
of
participating
Aggregate
payroll
of
employees
exposed
Aggregate
amount
of
deductions
from pay
:
Size of company
Traggregate
: Number
Aggregate
number of
the Treasury by 11,464 companies participating in
the plan in that month)
Percentage
of
aggregate
pay
deducted
:
(As reported to
eration of Payroll Savings Plans in March 1942
:
Summary of the
Approximate
aggregate
payroll of
employees
"participating
Average
Percentage
deduction
pay of par-
employees
of aggregate
ticipating
employees
deducted
for
participating
in
March
:
:
:
Under 100 employees
3,885
194,729
134,871
69.3
28,488,999
1,011,219
3.5
19,742,876
5.1
7.50
499 employees
5,220
1,185,729
694,877
58.6
168,170,808
4,956,605
2.9
98,548,093
5.0
7.13
100
999 employees
1,224
849,323
461,849
54.4
124,038,376
3,229,692
2.6
67,476,877
4.8
6.99
500
4.999 employees
952
1,904,439
961,075
50.5
303,897,298
7,452,858
2.5
153,468,135
4.9
7.75
1,000
5,000 9.999 employees
109
747,049
368,934
49.4
134,434,256
3,322,904
2.5
66,410,522
5.0
9.01
538,476
231,990
43.1
99,267,038
2,005,134
2.0
42,784,093
4.7
8.64
1,676,250
801,766
47.8
311,743,522
7,572,913
2.4
149,013,404
5.1
9.45
7,095,995
3,655,362
51.5
$1,170,040,297
$29,551,325
2.5
$602,570,753
4.9
$8.08
10,000 19,999 employees
20,000 and over
Total All companies
37
37
11,464
Office of the Secretary of the Treasury, Division of Research and Stalistics.
April 23, 1942
217
Analysis of Exposure to Payroll Savings Plans
April 18, 1942
Number exposed
to payroll
savings plans
Total number
in the
country
(estimated)
Percent
of total
exposed
Part A - Summary by Number of Organizations Exposed
I. Business organizations
(1) Large railroads
(2) Other firms with 500 employees or more
(3) Other firms with 100 to 499 employees
158
167
5,815
15,316
7,344
26,853
57
(4) Subtotal - large firms
21,289
36,364
59
(5) Firms with less than 100 employees
42,458
(6) Total business organizations
63,747
79
a
II. Governmental organizations
95
#
#
*
III. Grand total
63,747
Part B - Summary by Number of Employees Exposed
I. Business organizations
(4) Subtotal - large firms
18,869,709
*
3,304,368
#
#
1,005,184
#
(5) Firms with less than 100 employees
(6) Total business organizations
#
1,273,260
14,292,081
*
(1) Large railroads
(2) Other firms with 500 employees or more
(3) Other firms with 100 to 499 employees
19,874,893
30,400,000 1
(2) State and local governments
1,022,026
397,981
1,700,000 1
2,700,000
(3) Total governmental organizations
1,420,007
4,400,000
21,294,900
34,800,000 1
#
65
II. Governmental organizations
(1) Federal Government
III. Grand total
Office of the Secretary of the Treasury,
Division of Research and Statistics.
Excludes agricultural employees, military personnel, employees on WPA or NYA or CCC projects,
proprietors, firm members, self-employed, casual workers and persons in domestic service.
Data not available.
23
38
32
61
April 24, 1942.
1
218
Firms Employing 100 to 499 Persons Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)
:
savings plans
:
:
:
Jan. 10
Apr. 11
Apr. 18
Total
Percent of total having payroll
:
State
Number of firms with payroll
number
of firms
(estimated)
savings plans
Jan. 10
285
Apr. 11
Apr. 18
Alabama
17
137
149
Arizona
15
42
43
58
26
72
74
Arkansas
22
43
44
15
30
31
160
501
512
142
512
31
98
100
753
756
1,171
42
64
65
170
622
38
66
66
16
45
45
21
25
Colorado
Connecticut
Delaware
495
64
112
113
100
277
277
0
District of Columbia
8
18
21
84
51
52
152
0
52
34
34
33
99
100
5
Northern California
Southern California
48
6
Florida
48
145
147
147
Georgia
56
126
133
589
10
21
23
Idaho
19
30
31
50
38
60
62
Illinois
48
1,245
1,300
2,252
55
58
403
415
69
71
153
165
586
271
56
61
275
120
276
276
41
312
24
167
136
179
60
60
198
32
165
177
405
Kentucky
114
75
Louisiana
0
Maine
Massachusetts
3
Maryland
0
100
384
0
2
Kansas
4
2
8
Iowa
0
1
Indiana
99
38
Wh
43
47
30
30
41
44
41
42
66
67
53
626
639
Michigan
137
670
689
1,523
1,022
Minnesota
181
376
376
399
HA
94
94
30
58
59
143
21
4i
4i
472
664
71
71
100
100
22
Nebraska
6
Nevada
8
New Hampshire
North Carolina
40
40
103
123
14
14
24
89
89
145
436
463
867
20
53
33
35
34
94
94
4,239
12
47
49
270
282
499
12
14
29
1,080
1,126
1,739
345
29
4
o
21
164
197
166
211
271
713
1,655
1,682
2,032
49
148
154
224
13
71
71
174
South Dakota
21
19
74
285
326
Utah
Vermont
13
36
36
30
59
Virginia
31
Washington
71
265
232
Test Virginia
0
Wisconsin
0
1
Alaska
8
22
22
7
24
448
0
1,375
48
48
73
78
81
83
66
69
41
41
90
100
44
Wh
21
24
32
63
47
94
94
281
338
9
22
91
272
278
2720
14,864
65
59
17e
O
17
2.
6
2
0
0
3,541
62
32
267
49
57
57
12
2
46
54
41
111
234
134
17
o
21
199e
50
6
14
8
199
Tennessee
Total
50
2,060
29
Railroads
61
33
Oblahoma
Wyoming
58
61
2,008
oregon
Texas
84
58
12
Chic
Rhode Island
South Carolina
33
82
505
North Dakota
Pennsylvania
55
O
New York
171
40
101
5
New Mexico
7
New Jersey
O
5
Montana
472
0
5
Missouri
3
Mississippi
78
83
72
72
33
49
39
41
100
100
100
100
49
52
88
94
94
15,365
26,905
13
55
57
office of the Secretary of the Treasury, Division of Research and Statistics.
. Data are for April 11, inasmuch as no April 18 report was received.
April 24, 1942.
219
Firms Employing 500 Persons or More Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)
savings plans
Jan. 10
:
:
Alabana
Northern California
Southern California
Colorado
Connecticut
15
6
Arkansas
9
Arizona
114
123
50
54
76
12
66
71
21
21
71
100
100
17
17
18
94
94
160
163
196
26
82
170
172
172
72
99
81
27
32
69
97
185
52
17
20
28
29
30
52
35
35
2
Florida
Georgia
35
Apr. 18
Apr. 11
21
152
18
82
83
100
=
84
82
61
71
23
56
58
66
27
53
53
61
64
143
24
43
45
10
10
10
80
100
100
277
435
443
634
44
69
70
41
133
136
180
23
74
76
81
85
48
100
100
27
64
69
46
46
Idaho
8
Iowa
Kentucky
Jan. 10
26
District of Columbia
Kansas
(estimated)
savings plans
152
12
Indiana
Apr. 18
of firms
22
Delaware
Illinois
Apr. 11
Percent of total having payroll
number
7
:
State
Total
Number of firms with payroll
43
9
45
53
16
33
33
33
19
45
48
70
39
39
85
Louisiana
17
0
o
Maine
42
55
55
76
98
100
54
Maryland
40
106
106
154
26
69
69
Massachusetts
41
281
281
370
83
98
98
43
61
61
100
100
8o
100
100
68
98
98
60
100
0
41
17
30
31
31
55
97
100
100
185
249
254
254
73
98
100
5
83
100
100
435
885
888
1,350
32
66
66
49
112
113
168
29
67
67
100
100
92
94
6
6
5
0
1
1
557
51
41
62
35
66
66
70
70
73
100
100
0
514
521
22
41
51
70
336
285
1
Oregon
76
100
162
6
Oklahoma
40
5
North Dakota
Ohio
162
40
28
28
76
100
3
North Carolina
17
103
162
0
New Mexico
New York
17
5
New Hampshire
New Jersey
333
4
Nevada
12
333
103
5
Montana
Nebraska
87
5
Mississipp:
Missouri
305
5
Kichigan
Minnesota
11
92
93
579
584
625
93
58
74
76
90
82
84
27
73
74
96
28
76
77
75
100
100
Tennessee
68
68#
106
4
Texas
61
73
187
19
10
10th
14
57
71
71
77
100
100
40
97
100
59
88
88
67
75
Rhode Island
South Carolina
South Dakota
3
36
Utah
8
Vermont
10
13
13
13
Virginia
41
100
103
103
lile
65
65
45
50
147
150
West Virginia
2
84
Wyoming
1
30
0
3
Total
56
0
3
Alaska
Railroads
150
10
64
64
33
39
98
100
100
100
100
100
0
o
Wisconsin
67
1
Washington
3
Pennsylvania
98
109
109
115
85
95
95
3,185
5,842
5,924
7,459
43
78
79
office of the Secretary of the Treasury, Division of Research and Statistics.
# Data are for April 11, inasmuch as no April 18 report was received.
April 24, 1942.
220
CONFIDENTIAL
UNITED STATES SAVINGS BONDS
Comparative Statement of Sales During
First Twenty Business Days of April, March and February 1942
(April 1-23, March 1-24, February 1-24)
On Basis of Issue Price
(Amounts in thousands of dollars)
Series E - Banks
179,371
200,748
272,263
Series E - Total
241,644
29,464
123,519
268,922
31,630
141,531
$394,628
$442,083
:
$ 76,580
:
:
Series F - Banks
Series G - Banks
Total
over
February
:
$ 68,174
Series E - Post Offices
over
March
: April
over
: March
:
:
:
$ 62,273
February
:
:
March
Percentage of Increase
or Decrease (-)
:
:
April
or Decrease (-)
March
April
:
Item
Amount of Increase
:
Sales
March
ever
: February
-$ 5,901
- 21,377
-$ 8,406
- 71,515
- 8.7%
- 11.0%
348,843
45,065
210,465
- 27,278
- 2,166
- 10.1
- 6.8
- 22.9
- 18,012
- 79,921
- 13,435
- 68,934
- 12.7
- 29.8
- 32.8
$604,373
-$ 47,455
-$162,290
- 10.79
- 26.9%
Office of the Secretary of the Treasury, Division of Research and Statistics.
- 10.6
- 26.3
April 24, 1942.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Note: Figures have been rounded to nearest thousand and will not necessarily add to totals.
CONFIDE
UNITED STATES SAVINGS BONDS
Daily Sales - April, 1942
On Basis of Issue Price
(In thousands of dollars)
Post Office
Date
All Bond Sales
Bank Bond Sales
Bond Sales
Series E
Series E
Series F
Series G
Total
Series E
Series F
Series G
Total
$ 2,476
$ 10,517
$ 2,380
$ 9,608
$ 22,504
$ 12,993
$ 2,380
$ 9,608
$ 24,980
2,999
3,222
2,778
8,264
7,572
9,292
2,119
1,185
1,387
7,570
6,235
5,334
17,953
14,992
16,013
11,263
10.794
12,070
2,119
1,185
1,387
7,570
6,235
5,334
20,953
18,214
18,790
4,961
2,958
2,309
2,906
2,730
2,150
13,035
5,722
9,610
9,304
8,052
5,224
2,329
8,027
8,983
6,562
5,715
5,261
2,720
23,391
15,539
17,314
15,974
14,885
8,613
17,996
8,680
11,919
12,210
10,782
7,374
2,329
8,027
8,983
6,562
5,715
5,261
2,720
28,352
18,497
19,623
18,880
17,615
10,762
4,619
2,513
2,584
3,472
2,690
3,111
17,572
6,152
5,102
10,008
8,076
7,175
2,432
1,076
1,251
1,400
8,604
3,333
5,374
7.773
3,695
3,303
28,609
10,561
11,728
19,180
12,621
11,426
22,192
8,665
7,686
13,480
10,766
10,286
2,432
1,076
1,251
1,400
8,604
3,333
5,374
7.773
3,695
3,303
33,228
13,074
14,312
22,652
15,311
14,537
13,334
6,845
9,112
9,403
2,227
1,925
1,805
9,001
3,703
6,793
5,928
24,562
11,525
17,830
17,136
18,586
9,362
12,037
12,504
2,227
23
5,252
2,517
2,925
3,101
1,925
1,805
9,001
3,703
6,793
5,928
29,814
14,042
20,755
20,237
Total
$ 62,273
$179,371
$ 29,464
$123,519
$332,355
$241,644
$ 29,464
$123,519
$394,628
April 1942
1
2
3
4
6
7
8
9
10
11
13
14
15
16
17
18
20
21
22
834
1,142
955
1,573
668
850
948
977
834
1,142
955
1,573
668
850
948
977
Office of the Secretary of the Treasury, Division of Research and Statistics.
Source: All figures are deposits with the Treasurer of the United States on account of proceeds of
sales of United States savings bonds.
Figures have been rounded to nearest thousand and will not necessarily add to totals.
April 24, 1942.
222
MEMORANDUM FOR THE SECRETARY.
April 24, 1942.
Mail Report
Following the Secretary's statement in regard to
increased distribution of War Bonds through house to
house canvassing and payroll deductions, a great many
letters have come in -- in most cases commending either
or both of these plans. Some general letters in regard
to bonds, both favorable and unfavorable, are included
herewith. A brief preliminary memorandum on the statement alone went down early this week, and an additional
one, covering both favorable and unfavorable reactions
is attached at the end of this report.
Aside from this special group of letters, the general
mail is along the line of that received during the last
two or three weeks.
Opposition to the Sales Tax still outnumbers endorse-
ment of it by a very large proportion. There are a great
many letters from individual telephone employees, many of
them from very old people who are terribly worried about
the threatened taxation program in its relationship to
pensioned telephone employees.
There has also been a great wave of letters advocating lotteries -- many from former correspondents who have
gained courage to present their idea again because of
Senatorial discussion of the possibility of using this
method of raising funds.
There are still complaints about delays in receiving
bonds after money has been sent for them, or in making
necessary changes in the matter of beneficiaries, etc.
I believe, however, that these complaints have fallen off
considerably.
The telegram sent out to the Federal Reserve Banks,
over the Secretary's signature, regarding the postal card
bond questionnaire, brought in a great many responses.
Through Friday morning, April 24th, these numbered 3,419.
gatorbush
--
223
Comments on Present Emergency
Attorney General Biddle transmits a letter from U. S.
Attorney Palmer of Los Angeles, which reads as follows:
The Rafu Shimpo (Los Angeles Japanese Daily News.) con-
ducted a campaign for funds among their subscribers
to be used for the purpose of purchasing an ambulance
for the use of the United States Army. They came to me
to have me deliver the checks to the proper authorities
in the United States Army, and I have received the fol-
lowing checks drawn by the Rafu Shimpo on the First and
San Pedro Office of the California Bank -January 9, 1942
$ 377.50
Total
$3,369.09
January 14, 1942
January 22, 1942
February 10, 1942
473.00
842.38
1,676.21
I am enclosing these checks for your disposition to the
proper Army authorities so that they may be applied to
the purpose intended. We have a list of the contributors,
their residences and the amounts given.
David W. Bailey, Director, Australian News & Information
Bureau, N.Y.C. I have received from the Australian Dept.
of Information an inquiry as to the suitability for use
in Australia of the Disney Donald Duck film "The New
Spirit". I have viewed this film, and it seems likely
that it would be of use for propaganda purposes in
Australia, if it could be made available. I understand
from Mr. Leo Samuels, of Disney Productions, Inc., that
the film is the property of the Treasury Dept., and must that
any arrangements to make it available to Australia
be made through the Dept. I would appreciate any advice
that you can give me on this matter.
224
-2John R. Hendrickson, De Witt, Nebraska. I wish you
would convey to our good President, or those in authority,
that I am willing today to have them authorize our bank,
or some one, to take over my business and property, all
of my income for national defense for the duration of the
war, and I will never ask to have them pay it back to me.
# * * I am not writing you this for publicity or notoriety,
but for the sake of humanity. Please don't ever publish
my name.
Col. L. L. Harris, The Walt Whitman Hotel, Camden, N.J.
I send the enclosed cartoons just to help to relax a busy
mind. With best wishes to a very able and worthy Executive.
Byron H. Clough, Atlanta, Georgia. We know that this world
struggle is our war. The men over 55 years of age cannot
pilot a bombing plane or fire a gun from the deck of a
battleship. Those of us who are too old to get into a
uniform or an ordnance plant to work, still have to pay
heavier taxes. * # War is not cheap, but let me remind
you that it is a million times cheaper to let the men
over 50 or 60 work than it is to lose. How can we make
up our minds to produce and to fight with such an overwhelming number of planes, ships, tanks and guns if we
are not allowed to do our part because we have a few gray
hairs. You say you are in dead earnest when you say millions more must take part in the payroll saving plan; why
not prove it by letting the men over 55, who are able,
work as well as the young men? #
Fred Crumrine, San Diego, Calif. # * * I will be 60 years
of age next June, and very much able-bodied. I have been
in good health and able to do any kind of work in my line.
I have expressed by every means possible my willingness
to go anywhere to work, but to no avail. I answered an
ad from the Los Angeles Drydock and Shipbuilding Co. for
Lead Wiper, Plumber and Pipefitter. They sent me an That ap-
plication blank, which I filled out and returned.
is the last I have heard of it. Next, The Consolidated
Aircraft told me to go home and take civilian employment,
that my age was against me. Next, The Solar Aircraft
told me the same thing. I have tried several times to
enter the Solar. They are responsible for the death of
one of sons, yet I have another son who is employed
with them my as Foreman in the Hammer Dept. I have tried to
-3-
225
get jobs in the Defense Housing Projects to no avail.
Yet I have lost three jobs paying me $10 to $12 per day
in civilian life, owing to Government Priorities on
material. This is getting very much on my nerves. # #
It seems strange that other men should be able to go
into defense work, such as school boys and girls, and
the Government says there is so much man power shortage.
Why don't they take men that have long years of experience
and put them to work? They will make the factories hum
and there will not be so much quibbling about shortages
in this and that. Mr. Morgenthau, please give my
best regards to Mr. Roosevelt, and ask him if he is too
old to work, as he happens to be about 4 or 5 months older
than I. Tell him that I am very proud of him and have
been trying to keep my place in the ranks, but have been
held back by the very Government that I am trying to help.
James L. Crump, New Orleans, La. (Sends copy of letter
addressed to the President.) # Both the N.Y.A. and C.C.C.
have a very definite place in our section of the Country.
The N.Y.A. has helped a lot of young country boys to
secure an education and at the same time remain at home and
help their parents who could not afford to send them to
college. As for the c.c.c, this group of young fellows
have done marvelous work and could render tremendous ser-
vice on the army reservation project and national forests,
and I think should be broken up into units of 100 and 125
men each, so as to speed up the work in all the territories
and thus give each and every boy a chance to join the C.C.C.
and be close to home. Every young man in our section of
the Country, whether white or black, returned from the
C.C.C. camps knowing how to walk and carry himself correctly,
was neat and polite, and knew not only how to receive orders
but also how to give them. I sincerely trust that both
the N.Y.A. and c.c.c., particularly the c.c.c., will be
continued.
226
4Morton McDonald, Miami Power & Equipment Co., Miami,
Fla. I have an idea for raising funds to carry on this
present war. * It is true we are all buying stamps and
bonds in an attempt to do our part, but it is no great
sacrifice for they represent a real investment.
The great majority of the American people would like to
be able to help in a more definite way, especially something that would intimately connect them with the war
effort and not represent an investment. An outright gift
#
to Uncle Sam of some definite piece of war equipment is
my idea. Why cannot a list of costs of war material from
rifles to air planes or ships be made up and offered to the
public? We would all take pride in being able to say,
"I bought a rifle for Uncle Sam today, or "My anti-aircraft
gun is helping me do my bit against the Japs, or "I bought
another parachute today to help some boy make a safe land-
ing". These outright gifts would be more in the American
way of helping to put an end to the Nazis and Japs. They
would really be inspired by patriotism and not by gain.
Suitable certificates could be printed and given to donors
to hang in their homes or offices. Every one would be
proud to be able to show they were doing their part in a
concrete way and not expecting any benefits beyond the
security of our great country.
For you personally,
E. A. Allen, Minneapolis, Minn.
Mr. Morgenthau, while you' 11 likely never try it - and
while I doubt that you have any personal political ambi-
tions, but if you did have - and if you did try it - you
couldn't be elected Dog Catcher of Van Buren, Arkansas, if
the group above $4,000 could stop you. But the great
masses would feel differently. * The depression of the
Thirties took the fat off our bones - stripped us down to
muscle and bone. Our hides are tough. Hitler and the
Japs are fighting a hungry bunch of Wildcats and haven't
a chance. We are getting wilder every day and Heaven help
the tired and poorly fed Jap and German soldier when this
gang of ours really gets going. When I got out of the Navy
in the last war I was handed my rubber boots and a $15 check
and told by my old firm that I couldn't go to work for six
months because they had a war contract.
-5- -
227
Favorable Comments on Bonds
Henry J. Bender Jasper, Ohio. # Would it be possible
to establish a "Soldier's Bond" to be purchased by the
citizens of each County for the use and ownership of its
own boys? The money could be raised by social events
similar to the campaign for Infantile Paralysis. A com-
mittee could buy Bonds and place them in a bank or otherwise make sure of their safety. The Bonds could be
registered in the name of each soldier until his return.
In case of death, the Bond to go to his family. I know
you can realize how good the boys would feel to know they
have money, or will have, upon their return. Kindly give
this a little thought and advise me of your opinion. I
would like to see Pike County, Ohio, be the first to have
the honor of trying out the plan.
C. R. Brown, Tazewell, Va. This morning I received
by mail a bulletin sent out by your Department entitled,
"Our America", in which bulletin you were urging the purchase of War Bonds. As I turned to leave the office,
Miss Louise Hurt, the local postmistress, told me her
family had just been notified by the Navy Department that
the submarine, of which her brother was in command, was
30 days past due, and that he presumably was lost. As I
walked up the main street of our little town I noted that
on the second page of "Our America" was a picture of Gen.
MacArthur and underneath the picture the question, "Do we
deserve them?" -- that is, Gen. MacArthur and his gallant
men on Bataan. I wondered and was still turning the
question over in my mind as I entered a local drug store.
The few tables in the small store were practically full of
people, and as I ran my eye over them, I all at once real-
ized that 9 of them were WPA workers, so-called sanitary
engineers, etc., smoking cigarettes and drinking coca colas,
and then it was that the answer to your question, "ARE WE
WORTHY" came clearly and unmistakably "NO". I believe in
Labor Unions, provided they don't have racketeers at the
head of them, but I do not believe in "business as usual"
by you and your associates of the present Administration,
and there are millions like me. This war is lost to date -
-6-
228
whether we can pull it "out of the fire" is another
matter. If the Administration of which you are a part,
from the President down, will whole-heartedly discontinue
useless spending and quit trying to line up votes for
future elections, and will spend the money we are paying in taxes and for Bonds solely with an eye toward
winning the war, you will be tremendously surprised at
the response from the people as a whole. I know, because
I am just one of those ordinary, commonplace, everyday
folks.
Dr. C. Perry De Boissy, (Retired), Tampa, Fla. I am
old, in ill health, partly invalid and adversity stricken,
and, therefore, I cannot do what I would like to do for
National Defense. Although my earnings are exceedingly
small, at the expense of my health and comfort, by de-
priving myself of necessities of life I have been able
to buy a dollar's worth of Defense Stamps every week,
and, unfortunately, it is the best I can do. Yet, I do
not want any one to believe that I am a slacker and have
failed to do my duty at a time when every man is expected
to do his best. There is nothing I hate more than PUBLICITY,
so I beg you, Sir, to keep this letter as strictly personal.
The only thing I would like to get is something to prove
that, no matter the humbleness of my participation, I am
doing everything in my power to do my duty. I AM NOT A
SLACKER.
Harold 0. Wright, Hollywood, Calif. The Postman left at
our door this morning a fine publication called "Our America",
and published by your Department. There was one inspiring
note to it which I hope you or some one in authority would
follow up, namely, to have the children always give the
hand salute to the flag, and never to use the outstretched
hand salute again. I refer to the beautiful cover page of
the publication. Here they are at hand salute -- it is the
American form of respect to the flag. The faults of the
outstretched hand in salute are obvious - the main one
being the fact that it is too much like the salute of the
Nazis. #
-7-
229
Mrs. W. R. Augur, Fanwood, N. J. I have recently heard
that Clarence Pickett, Secretary of the American Friends'
Service Committee, proposes to ask the Treasury Dept.
to put out Civilian Bonds, in addition to War Bonds, on
the plea that some Friends are opposed to buying War
Bonds. I should like to say that there are those of us
(Quakers) who hope that the Treasury Dept. will not do
this. It would confuse the issue, and it is not necessary as Friends can give to civilian needs in a
number of other ways, and through agencies already established. Many members of the Society of Friends are not
"ultra-pacifist" in this struggle for our country's
survival, and we are enlisting and buying War Bonds just
like other Americans. The American Friends' Service Com-
mittee, in the aspect of pacifism it at present supports,
does not represent the entire membership of the Society
of Friends.
E. F. Conger, Staunton, Va. In the case of one
prospective purchaser of not less than $50,000 worth
of Bonds, I have been asked the probabilities of the
Bonds not being paid when due. I feel that there are
many people who, if they had assurance that the Bonds
would be paid when due, and that the customer would prob-
ably not have the rules switched during the time that he
holds the Bonds, would be purchasers of these issues.
I feel that if a notice could be given to the effect
that under no consideration would the money be withheld
from the customer when the Bonds become due, that you
would immediately tap a tremendous buying power from
people who are very suspicious.
Frederick S. Allis, Jr., Faculty Director of Pledge Campaign the
at Phillips Academy, Andover, Mass. (Telegram) 99.2% of to
undergraduates of Phillips Academy have signed pledges the
buy Stamps regularly, 718 boys in all. Have promised
undergraduate body a congratulatory telegram from you. of Will a
whoever opens this please draft something in the way old
reply with some punch to it? I have referred to "My
friend Henry Morgenthau" in campaign speeches, and suggest the
that reply begin, "Dear Fritz: This would amuse to
little your men no end. Please shoot this off right away
make Wednesday's edition of the school newspaper.
230
-8Unfavorable Comments on Bonds
H. Alfred Clover, Tracy, Calif. My wife is buying every
Defense Bond she can. She was nine when World War I
ended, and she doesn't remember some of the things I do.
I was sixteen then; and I'm still waiting with my Bond
buying. Back in '16 and '17 my father was a farmer
in a small rural community. He was one of the town
"big-shots" on every Red Cross campaign and every Bond
drive. I see them by the score in '42 -- the little
fellow scraping the bottom of the barrel for enough
pennies to buy another Bond, laying his mite on the altar
side
sacrifice for his country. * * * There's another
of the picture, too. I haven't forgotten those harsh days
of
that followed the coming of Peace. The fanfare was over;
the Liberty Loan trains, the speakers, the trophy exhibits,
just a memory. The little fellow in business needed cash.
His Bonds went on the block -- at a sacrifice. There was
plenty of good hard cash to grab them up when ownership
of U. S. Government Bonds meant big profits. " * That
is
always the way it goes. The little fellow sacrifices.
The big fellow gains. * * # Our Administration is doing all
it can, but let us not forget that big money that is waiting like a vulture - waiting for that day when the conflict
ends and those who have taken to heart our "Defense Bonds
and Stamps" propaganda of 1942 shall find themselves fi-
nancially stranded and ready to sacrifice anew in order
that they may not perish on the wastelands of financial
chaos. * * *
Twice within a few
R. M. Harper, University, Ala.
weeks I have found the Post Office floor here half covered
with copies of an eight-page circular in several colors,
distributed by your Dept. to unidentified box holders,
urging them to buy Defense Bonds -- apparently the same
circular both times. Probably much the same thing happened
in all other Post Offices though perhaps more than the
average here, because most of the box holders here are
students, who presumably have no income yet. These circulars must have cost several cents apiece, and the Govt.
is not setting a very good example by wasting millions of
them when the public is being urged to save paper. Any one
who can read should already be sufficiently informed about
Defense Bonds, through the newspapers.
231
-9Hamilton Williams, N.Y.C. Upon seeing this picture
(Crashing airplanes published in "Our America") I have
decided never to buy a Stamp or War Bond. I'll not
help kill others in a war into which Roosevelt betrayed
our country at the insistence of a dying British Empire.
Bernard M. Klein, Chicago, Ill. I have been purchasing
Defense Bonds every week, in order to do my part in the
defense of my country. Last night I heard broadcast
over the radio a list of eight firms engaged in defense
work who have been slowing up production. # Therefore, until I can be certain in my own mind that these
firms and others of their ilk are cooperating with the
Govt., I am this date suspending my purchase of Bonds.
Prof. S. L. Hornbeak, Trinity University, Waxahachie,
Tex. I heard over the radio a few days ago that in the
shipbuilding plants they were paying common country
carpenters $115 per week for their work. I have been
buying Defense Bonds when I found it possible, but I am
discouraged from doing so if the money is to be wasted
in paying such fabulous wages.
George H. Gannon, Area Director, War Bond Staff, Yakima,
Wash. It has been my privilege to work with the Defense
Savings Staff since its inception last May. I have followed with a great deal of interest the entire program
and our community of 27,000 people has now paid for
There is one phase
$1,860,000 worth of War Bonds. *
of the program which disturbs me very much. Today I received on my desk the "Minute Man" for March 28, 1942.
*
This is a well-printed and well-compiled piece of literature, but so far as the program is concerned, it is
absolutely useless. I have received in my personal mail
box from your office, five complete sets of information
regarding war securities. I have also received in my mail
box from the local Post Office, several items. Our committee has been flooded with sacks of literature which we
cannot possibly use in the community because it is compiled
by persons who have absolutely no conception of the psychology of our people. It would seem to me, as one on the
232
- 10
firing line, that you would take hold of this matter
and see that your money is put into something where it
would do real good. * * * Certainly those little folks
who put in small amounts, dislike very much to see their
money used and scattered around in useless printing.
This is strong language, but I do not think language
can be made too strong for this situation.
Mrs. Charles E. Bradshaw, Wellville, Va. As secretary
of a Home Demonstration Club, we have managed to save
enough money to purchase a $25 Bond, but according to
the rules governing the purchase, a small club cannot
buy so small a Bond. We have 16 members, meet once a
month, and our dues are five cents monthly. We send our
leaders to State Leaders meetings and pay their expenses,
then we have to pay State and County dues, give a present
at Christmas to our Home Agent each year, so our five cent
dues have to work real hard. I am explaining this because
there are thousands of Home Demonstration Clubs in the
United States, as well as many other small associations,
and the women of the clubs are anxious to help in this
small way. Multiplied by a large number of clubs, this
would make a worthwhile contribution. Please inform me,
and the rest of the clubs all over the U.S.A., how they
can legally purchase a small Bond.
Curtis C. Jordan, Asst. Cashier, The Pulaski National Bank,
Pulaski, Va. On February 12 we sent two $1,000 Bonds to
the Federal Reserve Bank, Richmond, Va., to be sent in for
redemption. # * These Bonds were forwarded to Mr. W. Wesley,
Chief, Division of Loans and Currency, Treasury Dept.,
Washington, D. C., on February 19th. We have written Fed.
Reserve Bank, Richmond, Va., and also Mr. Wesley. The this Bank
tells us that it takes some time to adjust matters of
kind but we cannot get any reply to our letters to Mr.
Wesley. Our customer bought some Bonds from us and also
the local Postmaster and wasn't aware she had bought too
many. * # Mrs. Mullins has called us on numerous occasions
and is worried about her Bonds. She is talking quite a
good deal and will hurt the sale of Bonds that her three friends
might buy. We understand that it takes time, but
months does seem an unnecessary delay. Would it be possible to issue two $1,000 Bonds and date them back to
January, 1942, since the Government has had the money all
this year?
*
233
- 11 George H. Bangert, President, The First National Bank,
Kenmore, N.Y. # Officers from our bank are actively
interested in Western New York Bank Association matters
and although with practically every Treasury offering
we subscribe the maximum amount permitted under our
capital set up, we find many small banks in our section
hesitate to follow this course, fearing that a subsequent
increase in the coupon rate on Governments will result
in a lower market value for outstanding issues, which
could result in such a large book depreciation in their
account as to endanger their capital position. This feeling is prevalent because of the belief that sooner or
later an intensive campaign must be inaugurated to urge
more general subscription to Defense Bonds by people with
money in savings accounts. If this does not increase the
purchases in amounts deemed satisfactory by the Treasury,
then some method of forced subscriptions by individuals
and banks is inevitably necessary. Either one of these
methods will naturally result in a large reduction in the
total savings deposits in the banks and many banks will
be obliged to sell Government Bonds to meet these with-
drawals. At such a time if there is a bad market the
losses can well ruin many small banks, if the withdrawals
for subscriptions continue. To meet these abnormal with-
drawals the banks can borrow on their Government Bonds at
the Federal Reserve Bank, but these loans should be
liquidated and the only way to do that is by the sale of
the Bonds in the market. This hesitancy among small banks
to purchase a substantial amount of each Treasury issue,
provided the maturity fits into their schedule, can be
cured, I think, if the small and medium-sized banks which
cannot "live" on only short term low coupon issues were
reasonably assured that no future issues will carry a higher
coupon than the present 21% issues. #
*
#
- 12 -
234
Favorable Comments on Taxation
Mrs. Eulela Rushe, Nashua, Mont., forwards the following
resolution: Resolved by the South Valley County Farmers
Union in convention assembled this 31st day of March,
1942, that we heartily endorse the position taken by
Secretary Morgenthau in regard to opposing the recommendations of the Chamber of Commerce of New York State for a
Federal Sales Tax, and in advocating increased levies on
income in the higher brackets, and on corporation profits.
L. M. Bates, Philadelphia, Pa. I wish to call your at-
tention to the statement sent out by American Telephone
and Telegraph to their bondholders, which is an indirect
attack on your proposed taxes for the fiscal year 1943.
Your attention is also called to what American Telephone
and Telegraph has really done since the war began in 1939.
They have done a good job for military and civilian war
needs -- but that for them was business as usual, at a
profit. They have done a good job in the civilian air
craft warning service -- but that for them was business
as
usual, at a profit. * # What I cannot understand is
why American Telephone does not convert their telephone
and teletype plants to the manufacture of optical and fire
control equipment for the duration. These skilled workers
are being kept out of vital war work, and worse still,
Western Electric is reaching in to grab at least two materials that we cannot replace -- Malayan tin and plantation
rubber. It looks like our Army and Navy are being deprived
of the use of these plants and materials simply so that Mrs.
Smith can talk to Mrs. Jones over the telephone, or that
the bookmakers can have teletype results and keep money out
of U. S. Bonds. American Telephone and Telegraph appears
to be willing to win the war if it can be done without the
loss of any dividends, the loss of a single residential
telephone, or the loss of one teletype customer.
R. N. Gould, Tax Consultant, Omaha, Neb. I know that
you have strenuously opposed any compulsory buying of
Defense Stamps and Bonds, and think you are absolutely
right, as we Americans do not welcome compulsory measures.
235
- 13 We need go back no further than the 18th Amendment, with
its disastrous results, as an example of taking away the
peoples' rights even if for their ultimate good. From a
Government bookkeeping standpoint, and a method of indi-
vidual accounting, the payroll tax would be simple, and
you would have the past experience of both the Federal
Social Security Tax, and the State Payroll Tax to be
governed by. If some such tax is not put into the Revenue
Act, under the new Revenue laws, I believe the general
trend will be for a Sales Tax, as that is one sure method
of raising our needed revenue.
Bertha Taylor, N.Y.C. I want you to know that I am for
your tax program and against the Sales Tax.
Mrs. C. F. Jones, President, Warwood Woman's Club, Wheeling,
W. Va. * We will support you in any demand for in-
creased taxation or other measures that will cut out the
present alarming disparity between the buying power of the
nation and the fast dwindling supply of consumer goods.
The women of America, who do the nation's buying, look
to our Government for strenuous action before too late.
We know that sacrifice today, however painful, will save
us from tenfold sacrifice later.
236
- 14 Unfavorable Comments on Taxation
Miss Emma Burkart, Chicago, Ill. One of our Chicago
newspapers carried an article recently to the effect
that you were aiming to destroy the private pension
systems of the country, and since I am a pensioner of
an industrial company, I am naturally very much disturbed by such a statement. Mr. Morgenthau, it is hard
for me to believe that you, or any one else connected
with the Administration at Washington, would be guilty
of such a base act, and it would certainly be a relief
to know that nothing of the kind is contemplated. These
people who are old enough to be retired would have a mighty
hard time securing employment in a business world gone mad
on age discrimination. I hope you will pardon me for addressing you, for I know you are a very busy man, but I
felt that I must have the facts.
Wm. J. McKenna, Moorestown, N. J. I am absolutely opposed
to a tax on future issues of State, County and Municipal
Bonds. I am opposed because I am a small home owner and
feel I pay enough tax on my home. Why must the small home
owner continue to suffer when any branch of Government
wants to raise more money? Be fair and honest with the
people. You have advocated this tax. Now tell the people
straight forwardly that a tax on future issues of municipal
bonds is a tax on the home owners of the nation, and not on
the purchaser of the bonds. A higher coupon will be demanded; and who pays the coupon? The home owner in the com-
munities that find it necessary to borrow money for essential
purposes, of course. Do not insult the intelligence of us
citizens by referring to this tax as a tax on rich bond
holders. You know better, or at least, you should.
*
Caroline B. King, Upper Darby, Pa. Since 1924 I have had
a position with The Curtis Publishing Company of this city.
I was Woman's Editor of the Country Gentleman. Earlier I
was appointed Army Dietitian by Surgeon General Gorgas, and
served in France during 1918-19. Still earlier I travelled
over many sections of the United States lecturing on food
conservation. # * # In March, 1942, I was dismissed from the
Curtis Publishing Company because of my age. My work, I was
237
- 15 -
told, was highly satisfactory, but it was decided to put
a younger woman in my place. The company, as is its
custom, gave me no notice that I was to be dismissed, but
in lieu of that notice, I was given a year's salary as a
pension. I am 75 years old, and I feel that it will be
almost impossible to secure another position. Therefore,
this pension - a year's salary - will be all that I shall
have to live upon the rest of my life. # * # My great
worry now, and my reason for troubling you with my affairs,
is my next year's income tax. I can meet the present tax,
1941, but as my company gave me the entire sum of my
pension at once, and as I have no dependents, I shall have
to pay perhaps one-half the total sum in income tax in
1943. The remainder will not support me for a very long
period, and as I said, it will be all that I will have for
the remainder of my life. Doesn't the law make some pro-
vision for cases like mine? # # *
John T. Orr, Arlington, N.J. I have before me a short
abstract which appears in this evening's paper, which is
so incomplete that it does not make clear the intentions
of your Dept., but there is an implication that Mr. Randolph
E. Paul is making recommendations to Congress concerning
pension funds. # An official of the telephone company
says that,
the Treasury recommendations, if en-
acted, would make it necessary for AT&T to dissolve aAs
an
pension plan applying to 380,000 employees.
employee of one of the companies owned by the AT&T, I am
one of the 380,000 employees involved. I can only speak
for myself, but I do feel that a poll of the other 379,999
employees involved would find that most all would agree
with my viewpoint. Of all times in the history of the
world, when every one should be putting his shoulder to the
wheel, we must have at this crucial juncture, large groups
of people sitting down to write their Congressmen, disturbing their own peace of mind and that of their associates,
concerning such proposals, which are highly resented. In
the face of such things, we read daily
theeven
papers
of
# Itinwas
reported
money spent in every direction.
in the papers last month that an appropriation of $900,000
was given to Mr. LaGuardia to fritter away on a WPA project
for training Piano Tuners and for the study of "Musical
Therapy", and the training of persons in the repairing of
torn sheet music. People are commencing to boil over when
they read these things in the paper.
- 16 -
Philip Hochstein, Editor, Newark Star-Ledger, - Newark,
N.J. You may be interested in a survey of retail out-
lets conducted by my newspaper with reference to the
proposed increased Excise Tax on cigarettes. # * *
Every dealer interviewed was of the opinion that the
proposed uneven tax would stimulate the sale of the
lower price cigarette and discourage the sale of a
higher price cigarette. This, as you can see, would
have an adverse effect upon the tremendous income from
the sale of the higher price cigarette.
238
239
MEMORANDUM FOR THE SECRETARY.
April 24, 1942.
Supplementary Special Mail Report on
"Ringing Every Doorbell in the Country" "
To the 19 letters reported in the memorandum
of April 20th may be added 11 others specifically mentioning the house to house campaign. Of these, 6
endorse the idea and are interested in serving as
solicitors; 1 opposes it; 3 counter with plans of their
own; and the last, a Quaker, asks about other ways of
helping.
240
-1Favorable Comment
Frank B. Hartmann, Secretary, New Jersey State Association
of Letter Carriers, Camden, New Jersey. Your
of Stamps
War and
Bonds
to canvass
each homesale
for the
recent
plan
was discussed by the Executive Board of the New Jersey
State Association of Letter Carriers at a meeting on
April 18th. As the Letter Carrier is familiar with every
patron he serves, we feel it gives him the advantage necessary to put over this important work. We therefore volunteer
our service as an added contribution to the war effort.
241
-2Unfavorable Comment
Mrs. Elizabeth Huntington Adams, Winter Park, Flerida.
My neighborhood is being canvassed from door to door each householder being asked to buy U. S. War Bonds or
Stamps.
How can I be expected to pay taxes - my
daily living expenses - help those of my family less fortunate than myself - support church, charities, relief and
all the extra overseas relief, and at the same time buy
U. S. Bonds - when my income is shrinking month by month -
by the Govt. so heavily taxing these fine companies that
pay me dividends?
R. Moulton Pettey, National Director, National Association
for the Calling of a United States Constitutional Conven-
tion, New York City. It is sincerely and respectfully
submitted that a better plan, and one which would undoubt-
edly result in the disposition of many billions of the
face value of these Bonds is to consider the proposition
of effectuating a certain percentage of earnings (compen-
sation and profits) periodically. # For instance,
initial voluntary acquisition by payment of a certain per-
centage of salary or profits at each pay day or income
profit period in bonds graduated in accordance with the
higher salary or profits. On a salary of $25 per week,
prescribe 10%, payable in War Bonds, and graduate upwards
the percentage as the salary is greater. On profits, use
the same ratio. The percentages of 10, 15, 20, 25, and
33 1/3 could be used.
Mrs. Mattie E. Denning, Los Angeles, Calif. I am a member
of the Friends Church. # # * I cannot buy War Bonds, but am
willing to sacrifice for the sake of the country. I have
already bought bonds put out by the American Friends Service
Committee for the support of the Civilian Public Service Camps.
Will that be considered part of the country as a whole, and
will these bonds be recognized as proof that one is doing
# If I buy U. S. Government Bonds instead
his part to help?
of War Bonds, will your representatives accept them as proof
that I am doing my part for the good of the country?
242
MEMORANDUM FOR THE SECRETARY.
April 24, 1942.
Special Mail Report on
War Savings Quota Campaign
Of the 20 communications that refer to the investment
of ten percent of income in War Bonds, only 6 express
opposition to the plan.
--
243
Favorable Comment
Robert Theobald, Louisville, Ky. I want to congratulate
you on your latest plan to advocate that the workers be
urged to invest ten percent of their earning in Defense
Bonds. I believe this plan would do more to combat inflation and would meet with the wholehearted support of every
patriotic American. It would help in more ways than one,
as while it would help to stop inflation, it would give the
worker something to go on after this present emergency was
over.
Josie B. Ames, New Orleans, La. Every employed American
should support this voluntary plan of yours 100%. It contains the very thing in life we are fighting for, THE RIGHT
TO ACT VOLUNTARILY RATHER THAN COMPULSORY. I am notifying
my employer of my decision to invest 10% of my weekly earnings in Bonds.
E. S. Rothchild, Ritz Carlton Hotel, New York. The newspapers are giving you quite some publicity in your well-
deserved endeavor through your campaign which is proposed
to start May 1st to secure funds from the sale of War Bonds.
10% of income to be subscribed in that direction would be
acceptable to many, but primarily there should be a general
enlightenment of the type of Bonds, the advantages under
each particular bond issue that inure to the subscriber,
and the features surrounding each issue.
Walter Kutzleb, New York. This morning's New York Times
carries an item from Washington with the heading "Treasury
Opposes Compulsory Saving". That is good news, because,
after all, saving" has always been regarded a virtue and
that can only be voluntary, if it wants to remain a virtue.
John H. Yearsley, Detroit, Mich. Just read in Detroit Free
Press about voluntarily spending at least 10 percent of your
income for War Bonds. I am in hearty accord with this program.
244
-2Unfavorable Comment
Mrs. Ruth Loomis Flagg, New York City. Have been much
interested in your articles on "COMPELLING" people to
buy Bonds and the concern you have over the falling off
of the sale of Bonds. *
When Washington clean house,
remove the parasites, reduce unnecessary spending and
stop throwing money away, the American people will respond.
You'll have no trouble selling Bonds.
Lloyd Barrick, Jersey City, N.J. Newspaper reports that
every citizen is to be asked to invest ten percent of his
gross income in War Bonds, regardless of his personal
obligations, are disconcerting to one who has debts and
insurance to meet. Such a plan seems indiscriminating.
The income tax seems a fairer way of getting increased
revenue. * # #
245
April 24, 1942
5:26 p.m.
John J.
McCloy:
Did you get the letter signed?
HMJr:
Yes. I was having it photostated for the
President, and I told them to send it over to
you tonight yet.
Mc:
Okay. Good. Now, you said the other day
HMJr:
Yeah.
that whenever we had anybody coming from
Mc:
that area out there, that you'd like to know
about it.
HMJr:
That's right.
Mc:
When is your next broadcast?
HMJr:
May 4th.
Mc:
May 4th.
HMJr:
Yes.
Mc:
I've got in my room General Aurand's boy, who's
just come back from there
HMJr:
Oh, yes.
Mc:
HMJr:
Mc:
who's been dive-bombing the Japanese Navy.
oh, really?
Yeah. And I think he might be the type that
you'd be interested in. He's just told me his
story. It's a very thrilling one, and I suggest
that he might be a possibility.
HMJr:
Well, could I see him tomorrow?
Mc:
What time, Mr. Secretary?
HMJr:
Oh, about twelve o'clock.
246
-2
Mc:
Twelve o'clock. (talks aside) Can you see
the Secretary of the Treasury?
HMJr:
Good, I'11 have him in your office.
Now, what's his title?
Mc:
He's Lieutenant Evan Aurand.
HMJr:
Leven - Lieutenant
Mc:
Evan, E-v-a-n.
HMJr:
Yes.
Mc:
Aurand. Lieutenant Evan Aurand. He's a Navy he's off one of the carriers and he's been on a
lot of those transports.
HMJr:
He's Navy.
Mc:
He's Navy.
HMJr:
Well, I'11 be delighted to see him, but I was
going to try to give you Army fellows a chance.
Well, I - he just happened to be in my room.
Mc:
He's - his old man's Army.
HMJr:
Yeah.
Mc:
Well, we're in on it enough.
Well....
HMJr:
Mc:
HMJr:
Mc:
He 8 - you ought to
I'd like to meet him, anyway.
Right. He has a very interesting story, and
a very nice chap.
HMJr:
Lieutenant Evan Aurand.
Mc:
That's right. I'll have him in your office at
twelve o'clock tomorrow.
HMJr:
Thank you so much.
Mc:
All right. Okay.
HMJr:
Thank you.
247
Willard Hotel
Washington, D.C.
April 24, 1942
My dear Mr. Secretary,
I have just been advised that the Secretary
of War is sending to the President for his approval a
letter recommending that a preliminary payment be made
to His Majesty's Government in the amount of $70,000,000
on account of specified aircraft and related materials
requisitioned by the United States from His Majesty's
Government shortly after December 7, 1941. It is indicated that the full compensation to be paid to His
Majesty's Government will be determined in due course and
any excess over the down payment would then presumably be
paid to us. I hope that this procedure will not involve
delay and that we shall be able to receive the advance
payment by the end of the month.
Yours sincerely,
Hillips
The Honourable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
248
Original with 6 carbons returned to
Mr. McCloy, War Dept., 4/24/42.
Photostat to Dr. White.
2 Photostats to White House.
249
WAR DEPARTMENT
WASHINGTON
The President
The White House
My dear Mr. President:
Pursuant to authority under the Act of October 10, 1940
(54 Statute 1090), the following described property of His
Majesty's Government in the United Kingdom was requisitioned
by the War Department on or shortly after December 7, 1941:
Airplanes
LB-30 Liberator (B-24 4 engine
Consolidated Bomber) complete
DB (A20A 2 engine bomber) Complete
Boeing Aircraft Corporation
Douglas Aircraft, Inc.
Douglas Aircraft, Inc.
Quantity
Estimated Cost
50
14.221.336
213
31,035,246
19,209,432
132
6
75
918,864
10,906,950
322 Lightning (P-38 Lockheed
interceptor 2 engine pursuit)
complete
P-400 Airacobra (P-39 1 engine
pursuit)
Bell Aircraft Corp. - complete
Bell Aircraft Corp. - complete
except for propellers supplied
20
2,222,400
196
12,703,040
10,273,440
156
40
-
2,429,600
Total airplanes
479
60,182,022
Airplane engines
798
11,165,511
under lend-lease
Total estimated cost
71,347,533
The above estimated cost is based upon unit prices set forth
in contracts of His Majesty's Government in the United Kingdom,
with various manufacturers in the United States exclusive of any
undetermined additional charges arising through acceleration,
escalator or other similar clauses.
-1-
250
Insamuch as n fair and just compensation price for the airnes and engines is not determinable finally at this time in
accordance with the Act of October 10, 1940, (54 Statute 1090),
it is recommended that a preliminary payment be made to His
Injesty's Government in the United Kingdom in an amount of
$70,000,000.
Respectfully yours,
Henry L Stumoon
Secretary of War
Recommendation approved for the making of a
preliminary payment of $70,000,000.00 pending
the
determination of a fair and just compensation price.
from Hm March
Tited: 2525 , 1942.
251
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON. D. c.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO
With the compliments of British Air Commission
who enclose Statement No. 30 - Aircraft Despatched
- for week ended April 21, 1942.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
April 24, 1942.
252
MOST SECRET
STATEMENT NO. 30
ATHORATI DESPATCHED FROM THE UNITED
STATES DURING WEEK ENDED APRIL 21,1942
DESTINATION
TYPE
cobra
NG
Fortress II
BY SEA BY FLIGHT DEL'D
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FOR USE IN c
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Canada en route
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IN
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RED
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TALS
ITISH AIR COMMISSION
ril 24th, 1942.
64
57
39
253
MEMORANDUM
April 24, 1942.
TO:
The Secretary
FROM:
Mr. Sullivan
Its
I have a preliminary report of the investigation of Jacks & Heints, Inc. It is available whenever
you wish to see it.
254
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 24, , 1942
TO
Ferdinand Kuhn, Jr.
FROM
Herbert Merillat
Editorial Opinion on Taxes:
Waiting for Guidance
Editorial discussion of taxes and inflation has
dropped off in the past week as the nation awaits the
President's message outlining a broad attack against
inflationary forces. The nature of the anti-inflation
program has been the subject of lively speculation, but
the press appears to be withholding comment until the
program is authoritatively set forth.
Secretary Morgenthau's announcement of quotas and
canvassing to increase War Bond sales has led the press
to conclude that compulsory saving is not on the
program, for the present at least. Papers representing
every part of the country and every shade of opinion
have rallied to support an intensified bond sales drive,
but many doubt whether the campaign will draw off
enough purchasing power to reduce the inflationary gap
to safe proportions. "We are for it, but we wonder if
it will work," " is a typical editorial attitude.
Papers such as the Louisville Courier-Journal and
Minneapolis Tribune, which have been urging compulsory
-2-
255
savings, regard the Treasury's attitude as unrealistic.
The voluntary purchase plan, says the Tribune, "puts a
penalty on patriotism and a premium on slacking." A
compulsory savings plan is necessary to spread the load
equitably. Many editorial writers have pointed out that
if the voluntary purchase program does not show adequate
results, compulsory savings or wage taxes will be
inevitable. The Wall Street Journal and Philadelphia
Inquirer urge that savings be "induced" by providing
reduction or postponement of income taxes on income
used to buy Savings Bonds.
Higher Tax Goal
Although the majority of the press has been cam-
paigning for heavier taxes on low income groups -- a
sales tax or a wage tax -- there has been little editorial
demand for an increase in the tax revenue goal above
the $7.6 billions proposed by the Treasury. Mr. Henderson's
appeal for even higher taxes to combat inflation met
with little editorial approval. Several papers have
advised Mr. Henderson not to disturb tax waters which
are already muddied. Some point out the difficulty in
using taxes to combat inflation, noting that heavy taxes
hit shrunken incomes as well as swollen ones.
The Scripps-Howard papers, however, advocate
heavier taxes than those recommended by the Treasury
-3-
on the ground that such taxes and compulsory savings
are necessary to close the inflationary gap.
"Secretary Morgenthau," they say, "is not representing
the best interests of anybody when he opposes effective
anti-inflation taxes and compulsory investment in
War Bonds." Likewise, Ernest K. Lindley's column
accuses the Treasury of being "the hardest and the
highest" obstacle to an effective inflation-control
program, by continuing to insist on voluntary bond sales
and no increase in taxes above its original recommendations.
Price Control
Editorial comment is varied regarding the role of
price control in the anti-inflation program. Most
papers agree that effective control of wages and farm
prices is a prime necessity. While many find the
Baruch "over-all" price ceiling a simple and attractive
formula, others are disturbed by the inequities involved
in freezing all prices as of a certain date. In general,
however, the press expects and approves much stricter
price control.
The Patterson-McCormick papers stand almost alone
in opposing strict price control. They oppose pricefixing and its handmaiden, rationing, as unnecessary and
256
-4-
irritating. "More and more people are asking why we are
fighting to make the world safe for democracy when the
bureaucrats are destroying democracy right here at
home," says the New York Daily News. "We still think
there is life yet in the law of supply and demand, and
that it might be able to solve our war-shortage problem
better than the bureaucrats can."
257
Release at / pm Audem
258
FOR RELEASE FRIDAY MORNING, APRIL 24, 1942
Harold D. Smith, Director of the Bureau of the Budget, today issued
revised budget figures which indicate much larger war expenditures and
somewhat higher receipts than those included in the original 1943 budget.
Director Smith estimates that during the current fiscal year ending
June 30, total receipts will meet 36 percent of total expenditures;
during the next fiscal year receipts will meet only 31 percent, assuming
enactment by the Congress of the $7 billion of new taxes requested by
the President in his budget of last January. These ratios are based on
the following data in billions of dollars, including expenditures of
the R. F. C. and its subsidiary corporations.
Receipts
Expenditures
Fiscal Year 1942:
Original Estimate
Revised Estimate
11.9
12.7
33.6
35.6
23.5
23.9
63.3
Fiscal Year 1943:
Original Estimate
Revised Estimate
77.5
"As the current fiscal year draws to a close," Mr. Smith stated,
"expanding war production requires that total war expenditures be now
estimated at $28 billion, instead of the $26 billion which the President
included in the budget submitted last January. This total is more than
four times the expenditure of the preceding year. Moreover, the pace of
our war effort is even faster than these annual figures would indicate.
Thus, weekly expenditures have increased rapidly, and are up 70 percent
since Pearl Harbor.
--
259
"Looking ahead into next year is extremely difficult. The scope
of the war program has expanded rapidly. Capacities for increased war
production are being enlarged by construction of new plants and con-
version of industrial facilities. Total expenditures of $70 billion
during the next fiscal year now appeal attainable, as against original
estimates of $56 billion last January. This new estimate is based on
present legislation. and price levels.
"With such all-out war effort, about $50 billion of national
income will remain for civilian use. This sum will provide more of
the necessities of life than during the depression but less than
during the past year.
"Huge financing operations will be necessary next year to meet a
tremendous deficit of $49 billion. This estimated deficit assumes
that the Congress will enact $7 billion of new taxes. Even with that
new tax legislation, total estimated receipts will meet less than a
third of all Federal expenditures.
"During the three years ending June 30, 1943, war appropriations
and contract authorizations enacted or pending amount to $161 billion.
Actual expenditures for the same period are estimated at $105 billion.
"The following tabulation covers in detail the original and revised
budget estimates for this and next fiscal year. In that tabulation
expenditures for other than war purposes have not been revised because
the 1943 budget has not yet been enacted. As submitted to the Congress,
the 1943 budget called for a reduction of $938 million from 1942 norwar
appropriations, excluding interest on the public debt which will rise
by $500 million."
260
ORIGINAL AND REVISED BUDGET ESTIMATES
FISCAL YEARS 1942 AND 1943
(Assumes $7 billion of new taxes)
(In millions)
Fiscal Year 1942
Original # Revised
Estimate : Estimate
Fiscal Year 1943
Original : Revised
Estimate : Estimate
RECEIPTS:
Internal revenue
Railread Unemployment Insurance Act
$12,198
$12,953
9
9
$17,261
$17,820
10
10
Customs
368
Miscellaneous revenues and receipts
375
297
245
241
241
284
284
12,816
13,578
17,852
18,359
872
871
1,365
1,441
$11,944
$12,707
23,997
26,000
TOTAL RECEIPTS
Less net appropriation for Federal OldAge and Survivors Insurance Trust Fund
NET RECEIPTS
$16,487 $16,918
EXPENDITURES:
War
Other:
Legislative, judicial and executive
Civil departments and agencies
General public works program
Veterans' pensions and benefits
Aids to agriculture
Aids to youth
Social security
Work relief
Refunds
Interest on the public debt
Transfers to retirement funds
Supplemental items - regular
Total other
TOTAL EXPENDITURES
EFICIT UNDER PRESENT TAX LEGISLATION
ECEIPTS FROM PROPOSED TAX LEGISLATION
EFICIT UNDER PROPOSED TAX LEGISLATION
52,786
67,000
41
41
43
43
859
859
797
797
578
714
714
578
578
578
590
590
1,117
1,117
854
854
235
235
100
100
462
462
538
538
942
942
480
480
89
89
87
87
1,250
1,250
1,750
1,750
267
267
299
299
25
25
25
25
6,579
6,579
6,141
6,141
$30,576
$32,579
$58,927
$73,141
18,632
19,872
56,223
7,000
49,223
18,632
19,872
42,440
7,000
35,440
2,000
1,019
2,000
1,019
3,000
1,368
3,000
1,368
3,019
3,019
4,368
4,368
21,651
48,961
22,891
48,961
39,808
70,612
53,591
71,852
$70,612
$71,852
$110,420
$125,443
-
-
DVANCES TO GOVERNMENT CORPORATIONS:
War
Other
TOTAL ADVANCES
INCREASE IN PUBLIC DEBT DURING YEAR
C DEBT AT BEGINNING OF YEAR
UBLIC DEBT AT END OF YEAR
4/4/4V
261
Treasury Department
Office of the Under Secretary
Date: 5/2
To: The Secretary
From:
Here an some
notes on the Bankers
meeting last work.
DWB
TREASURY DEPARTMENT
262 by
INTER OFFICE COMMUNICATION
DATE April 24, 1942
TO
Mr. D. W. Bell
FROM David Lilly Dish
Subject: Executive Council Meeting of the American Bankers Association.
A. War Savings Bonds.
The bankers in general were very pleased of their record in the
sale of War Savings Bonds, pointing out that they were the first to enter the
field and that a large percentage (they claimed 80%) of the War Savings Bonds
were sold by them.
Somewhat curiously, there seemed to be no objection to the expense
of sale and issuance of bonds and they seemed quite willing to carry on without
reimbursement. Furthermore, they were sorry that the public did not realize
all that the bankers were doing in the sale of War Savings Bonds, but no
national campaign to acquaint the public with this fact was considered.
B. Government Financing.
When Randolph Burgess suggested to the bankers in his address that
they should take an active participation in the sale of Government obligations
to their customers, he met a mixed reception. Some of the more aggressive
bankers, notably James Leavell of the Continental of Chicago, were quite emphatic
in their belief that the Treasury had not begun to absorb the surplus cash of
various corporations, and, in their opinion, the Treasury was not likely to do
so with the securities it now offers. Mr. Leavell made a suggestion which
seems to me to merit some consideration. He felt, and the feeling was general
among the bankers, that corporations as a rule do not know how to subscribe
to Government issues, in this instance the Certificates of Indebtedness, and
they are not willing to take the chance of finding themselves with more cash
invested than they had planned. Furthermore, the feeling was that the Certificate
of Indebtedness issue did not in most cases fit the cash requirement dates of
the corporations which were asked to subscribe. He suggested that a "tap" issue
be inaugurated which would allow the corporations to pick their own maturities
at approximately 30-day intervals. He felt quite sure that his bank could
raise at least $500,000,000 in the Chicago area alone from corporations at
the first announcement of such an issue, and that there was probably even more
money than this available that he did not know about offhand.
Several of the more reactionary bankers agreed that if the Treasury
were to design a "tap" issue of 30, 60, 90, and 120 days, that the corporations
would buy them readily, picking the maturities which would meet their cash
requirement dates, but these bankers did not feel that it was their place to
--
263
pursuade their customers to buy such an issue. They felt that the sale could
be made to the various industries by their own organizations, such as their
trade associations, the Steel Institute, the Petroleum Institute, etc. Others
were of the opinion that if such an issue were forthcoming, the sale could be
handled by the agency best able to approach the corporation; a security dealer
in one case, a trade association in another, or the corporation's banker in
the third instance. All agreed, however, that such an issue would have a ready
market.
While at the meeting, I had several discussions with Henry Verdelin,
Vice President of the Mutual Life Insurance Company of New York, concerning
an issue designed for the use of insurance companies primarily. He was of the
opinion that his company would be very much interested in a 20-year nonredeemable, non-negotiable bond, bearing a rate of somewhere between 2 and 3%,
if, should the need arise for cash, the company would be allowed to borrow
from the Federal Reserve Bank at / of 1% (or some percentage of the discount
rate) after filing a certificate of distress which would demonstrate the
company's need for cash due to the demands of policy holders. He seemed quite
interested in such an issue and was of the opinion that it would have considerable appeal to other insurance companies besides his own.
264
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE April 24,
TO
FROM
Secretary Mergenthau
1942
Mr. Haas
Subject: Recent Changes in Prices and Yields of Government
Securities
The accompanying chart and table compare the yields
of Treasury bonds and notes at last night's close (April 23)
with those on March 19.
All sectors of the market have been weak during the
past week. Representative declines in taxable securities
for this period have been 12/32 for the 2-1/2 percent
bonds of 1967-72; 7/32 for the 2 percent bonds of 1948-50,
and 3/32 for the 1 percent notes of March 15, 1946. De-
clines in tax-exempt securities have been slightly less.
As a result of these declines, prices of long-term
taxable bonds are now slightly below those of March 19.
This price decline is equivalent to one basis point on
the long-term taxable average -- which has risen from
2.35 percent to 2.36 percent during this period. Prices
of long-term partially tax-exempt bonds are still slightly
above those of March 19. Note prices, which were already
below those of March 19 last week, have slightly extended
their losses.
The average rate on this week's issue of Treasury
bills was 0.32 percent. This compares with 0.28 percent
last week and 0.20 percent in the week of March 19.
During the past week (1.e., commencing last Friday),
the Federal Open Market Account has purchased $55.6 mil-
lions of Treasury bills and sold none (although $10.0 mil-
lions of bills held by the Account ran off during the
period). The only other transactions of the Account
during the period were the purchases on Friday, April 17,
of $2.1 millions of 2-1/4's of 1952-55 and $1.0 million
of 2-1/2's of 1967-72.
265
Price and Yield Changes of United States Securities
March 19, 1942 to April 23, 1942
Prices
Security
March 19,
1942
Yields
April 23,
1942
Change
March 19,
April 23,
1942
1942
(Decimals are thirty-seconds)
Change
(Percent)
Bills
Average rate last issue
-
.20
.32
+.12
-
Certificates
11/1/42
Taxable Notes
2
2-1/2
2-1/4
2-1/2
2-1/2
3/4
3-1/8
2-1/2
2-1/2
2-3/4
2-1/4
2-1/4
2-7/8
2-3/4
2-3/4
2-3/4
101.24
101.01
100.15
103.25
101.07
102.29
100.27
-.04
-.03
101.04
101.11
101.04
101.03
101.16
101.10
100.27
101.16
101.00
100.28
101.04
100.29
100.28
101.06
101.04
100.24
101.11
100.30
-.08
-.07
-.07
-.07
-.10
103.09
103.28
104.28
108.06
106.01
105.22
-.12
-.10
-.10
.41
.49
10/15/43-45
4/15/44-46
12/15/44-54
9/15/45-47
12/15/45
103.21
104.06
105.06
108.11
106.06
105.28
.57
.72
.61
-.05
-.05
.91
.94
.76
.86
.94
-.06
.90
.91
3/15/46-56
6/15/46-48
6/15/46-49
10/15/47-52
12/15/47
3/15/48-51
110.08
107.28
108.08
115.20
104.23
107.28
110.02
107.27
108.08
115.15
104.25
107.28
-.06
-.01
1.11
1.09
1.13
1.33
1.15
1.38
1.10
1.06
1.08
1.31
1.12
1.35
-.02
-.03
-.03
9/15/48
12/15/48-50
12/15/49-52
12/15/49-53
9/15/50-52
6/15/51-54
107.07
104.21
110.22
106.16
106.20
108.18
107.07
104.22
110.25
106.16
106.22
108.19
.00
1.33
+.01
+.03
1.28
1,65
1.60
1.66
1.74
1.32
1.26
1.62
1.59
1.64
1.73
-.01
-.02
-.03
-.01
-.02
-.01
9/15/51-55
110.20
104.29
103.10
104.28
110.00
109.10
109.12
110.00
110.19
105.01
103.18
105.01
110.04
109.12
109.16
110.04
1.77
1.68
1.65
1.79
1.98
2.00
2.06
2.09
-.01
-.02
-.03
-.01
-.02
-.01
-.01
-.01
12/15/43
3/15/44
6/15/44
9/15/44
3/15/45
12/15/51-53
6/15/53-55
6/15/54-56
3/15/55-60
9/15/56-59
6/15/58-63
12/15/60-65
Treasury Department, Division of Research and Statistics.
.
-
101.28
101.04
100.12
103.23
101.06
103.05
100.27
6/15/49-51
12/15/51-55
3/15/52-54
6/15/52-55
3/15/56-58
9/15/67-72
Partially Tax-exempt Bonds
6/15/43-47
2-1/2
.44
-.05
-.07
-.08
-.05
Wholly Tax-exempt Notes
9/15/42
12/15/42
1-3/4
1-1/8
6/15/43
9/15/43
1-1/8
-
100.07
99.24
99.13
99.24
9/15/44
12/15/45
3/15/46
Taxable Bonds
3/15/48-50
2
-
100.12
99.31
99.21
99.29
That
/4
-
-
1/2%
Excess of price over zero yield.
+.03
+.02
+.01
-.08
.00
-.06
-.03
-.05
-.02
.00
-.05
+.02
.00
.00
+.02
+.01
-.01
+.04
+.08
+.05
+.04
+.02
+.04
+.04
.37
.50
.76
.86
.92
.84
1.02
+.13
+.10
+.08
1.07
+.05
1.67
1.83
1.96
2.09
2.12
2.24
2.46
1.69
+.02
+.02
5/32*
2/32*
3/32*
.22
.26
.26
.34
.33
.37
.37
.39
.41
1.78
1.70
1.68
1.80
2.00
2.01
2.07
2.10
1.85
1.95
2.08
2.12
2.26
2.46
.00
.40
.40
40
43
42
-.01
-.01
.00
+.02
.00
-2/32*
-2/32*
+.11
+.11
+.14
+.06
+.03
+.04
+.01
+.08
+.04
+.04
-.05
.00
+.01
-.01
-.03
-.05
April 23, 1942.
266
1933
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON
OFFICE OF THE CHAIRMAN
April 24, 1942
Re: General Aniline and Film
Corporation of Delaware
My dear Mr. Secretary:
I am sending you under separate cover a formal
notification of the fact that I have directed the vesting
in me of the corporate stock of the subject company, and
have requested that you release all control thereof to me.
I understand that a report on the company is
being prepared under your supervision and will not be
completed for two or three weeks. I trust that you will
continue with that work until it is finished; and request
that you kindly send me a copy thereof when it is completed.
I would appreciate your arranging to send to
this office such of your files and records as you think
may be helpful to me in the administration of such property,
including particularly all claims, and notices of claims,
heretofore or hereafter filed with you pursuant to your
vesting order dated February 16, 1942.
Very truly yours,
Leo T. every Crowley
Alien Property Custodian
The Honorable
The Secretary of the Treasury
Washington, D. C.
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON
OFFICE OF THE CHAIRMAN
April 24, 1942
My dear Mr. Secretary:
Under date of March 11, 1942 I delegated to you all
power and authority under Sections 3(a) and 5(b) of the Trading
with the Enemy Act, 8.8 amended, conferred upon me by the President
by Executive Order No. 9095, dated March 11, 1942. I hereby
revoke such power and authority in SO far as they pertain to the
corporate stock of General Aniline and Film Corporation of
Delaware, which WAS covered by your vesting order dated February
16, 1942.
In addition to the foregoing, and pursuant to the
authority contained in the paragraph numbered 3 of Executive
Order No. 9095, dated March 11, 1942:
1.
You are hereby notified that the Alien Property
Custodian has directed (pursuant to Vesting Order
No. 5 dated April 24, 1942, a true copy of which is
attached hereto) that there be vested, and there has
been vested, in him all of the shares of stock of
General Aniline and Film Corporation of Delaware
which were the subject of and covered by the vesting
order issued by you under date of February 16, 1942
(or, in the event any or all of such shares have been
canceled and new shares issued in lieu thereof, then
such new shares representing a corresponding property
ownership or interest in such corporation); and
2.
It is hereby requested that you release all control
of all such corporate stock to the Alien Property
Custodian.
Very truly yours,
Leo T. Crowley
Alien Property Custodian
The Honorable
The Secretary of the Treasury
Washington, D. C.
OFFICE OF THE ALIEN PROPERTY CUSTODIAN
VESTING OF PROPERTY OF
GENERAL ANILINE AND FILM CORPORATION OF DELAWARE
Vesting Order No. 5.
(a) I, Leo T. Crowley, Alien Property
Custodian, acting under and by virtue of the authority vested in me by
the President pursuant to Section 5 (b) of the Act of October 6, 1917,
as amended by Section 301 of the First Tiar Powers Act, 1941, and
pursuant to Executive Order No. 9095, dated March 11, 1942, finding
upon investigation that the shares of stock of General Aniline and
Film Corporation of Delaware which were covered by the vesting order
issued by the Secretary of the Treasury under date of February 16,
1942, and which are described therein, were at the time of the
issuance of such vesting order the property of Nationals of a Foreign
Country designated in Executive Order No. 8389, as amended, as defined
therein, and that the action herein taken is in the public interest,
do hereby order and declare that said shares (or, in the event any or
all of them have been cancelled and new shares issued in lieu thereof,
then such new shares representing a corresponding property ownership
or interest in such corporation), including all interest therein,
are hereby vested in the Alien Property Custodian to be held, used,
administered, liquidated, sold or otherwise dealt with in the interest
of and for the benefit of the United States.
(b) Such property and any proceeds thereof shall be held in a
special account pending further determination of the Alien Property
Custodian. This shall not be deemed to limit the power of the Alien
Property Custodian to return such property or the proceeds thereof, or
to indicate that compensation will not be paid in lieu thereof, if and
when it should be determined that such return or compensation should
be made.
(c) Any person not a national of a foreign country designated
in Executive Order No. 8389, as amended, asserting any interest in said
property, or any party asserting any claim as a result of this order, my
file with the Alien Property Custodian a notice of his claim, together
with a request for hearing thereon, on Form APC-1 within one year of
the date of this order, or within such further time as may be allowed.
the Alien Property Custodian.
This order shall be published in the Federal Register.
Property
Custodian
CostAlien
LEO
T. CROWLEY,
Secondary
11 24, 1942
269
933
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON
OFFICE OF THE CHAIRMAN
April 24, 1942
Re: General Aniline and Film
Corporation of Delaware
My dear Mr. Secretary:
I am sending you under separate cover a formal
notification of the fact that I have directed the vesting
in me of the corporate stock of the subject company, and
have requested that you release all control thereof to no.
I understand that a report on the company is
being prepared under your supervision and will not be
completed for two or three weeks. I trust that you will
continue with that work until it is finished; and request
that you kindly send me a copy thereof when it is completed.
I would appreciate your arranging to send to
this office such of your files and records as you think
may be helpful to me in the administration of such property,
including particularly all claims, and notices of claims,
heretofore or hereafter filed with you pursuant to your
vesting order dated February 16, 1942.
Very truly yours,
Greeney
Leo T. Crowley
Alien Property Custodian
The Honorable
The Secretary of the Treasury
Washington, D. C.
270
THE SECRETARY OF THE TREASURY
WASHINGTON
APR 4 1942
MEMORANDUM TO THE ALIEN PROPERTY CUSTODIAN
=
In accordance with the request and direction
of the Alien Property Custodian, dated April 24, 1942,
made pursuant to section 5(b) of the Trading with the
enemy Act of October 6, 1917, as amended by section 301
of the First War Powers Act, December 18, 1941, and pursuant to Executive Order No. 9095 and Vesting Order No. 5
issued pursuant thereto, I am transmitting to the Alien
Property Custodian herewith the stock certificates
representing 2,050,000 shares of Common B stock and
459,448 shares of Common A stock of General Aniline &
Film Corporation, which shares were vested in me by
virtue of an Order, dated February 16, 1942, issued pursuant to section 5(b) of the Trading with the enemy Act
of 1917, as amended. All of the stock certificates are
in the name of the Secretary of the Treasury of the United
States of America and have been duly and properly assigned
to the Alien Property Custodian.
271
-2The 2,050,000 shares of the Common B stock of
General Aniline & Film Corporation are evidenced by the
following stock certificates:
BB17 for 100,000 shares
BB18 for 100,000 shares
BB19 for 500,000 shares
BB20 for 400,000 shares
BB21 for 200,000 shares
BB22 for 650,000 shares
BB23 for 100,000 shares
The 459,448 shares of Common A stock of
General Aniline & Film Corporation are evidenced by
the following stock certificates:
Certificate Number
JC/A1
JC/A04
JC/A05
JC/A06
JC/A07
JC/A08
JC/A09
JC/A010
JC/A011
JC/A012
JC/A013
JC/A014
JC/A015
JC/A016
JC/A017
JC/A018
JC/A019
JC/A020
JC/A021
JC/A022
Number of Shares
100
1,500
500
1,500
500
20,000
10,000
10,000
10,000
5,000
5,000
5,000
500
500
500
132
300,000
50
90
726
272
-3JC/A023
JC/A024
JC/A025
JC/A026
JC/A027
JC/A028
JC/A029
JC/A030
JC/A031
JC/A032
JC/A033
JC/A034
JC/A035
JC/A036
500
10,000
10,000
10,000
10,000
10,000
5,000
5,000
5,000
5,000
5,000
5,000
5,000
1,000
1,000
JC/A037
JC/A038
350
I have also transferred and released to the
Alien Property Custodian all supervision, management
and control over General Aniline & Film Corporation.
Homethan In
Secretary of the Treasury.
I, Leo T. Crowley, Alien Property Custodian,
do hereby acknowledge receipt of the aforesaid stock certificates for 2,050,000 shares of Common B and 459,448 shares
of Common A stock of General Aniline & Film Corporation.
I further acknowledge the release by the Secretary
of the Treasury of all supervision, management and control
over General Aniline & Film Corporation.
Tear Alien
Custodian.
Property
OFFICE OF THE ALIEN PROPERTY CUSTODIAN
273
VESTING OF PROPERTY OF
GENERAL ANILINE AND FILM CORPORATION OF DELAWARE
Vesting Order No.
5. (a) I, Leo T. Crowley, Alien Property
Custodian, acting under and by virtue of the authority vested in me
the President pursuant to Section 5 (b) of the Act of October 6, 1917, by
as amended by Section 301 of the First War Powers Act, 1941, and
pursuant to Executive Order No. 9095, dated March 11, 1942, finding
upon investigation that the shares of stock of General Aniline and
Film Corporation of Delaware which were covered by the vesting order
issued by the Secretary of the Treasury under date of February 16,
1942, and which are described therein, were at the time of the
issuance of such vesting order the property of Nationals of a
Order No. 8389, as
Country designated and that the in Executive amended, as Foreign defined
therein, action herein taken is in the public interest,
do hereby order and declare that said shares (or, in the event any or
All of them have been cancelled and new shares issued in lieu thereof,
then such new shares representing a corresponding property ownership
or interest in such corporation), including all interest therein,
are hereby vested in the Alien Property Custodian to be held, used,
administered, liquidated, sold or otherwise dealt with in the interest
of and for the benefit of the United States.
(b) Such property and any proceeds thereof shall be held in a
special account pending further determination of the Alien Property
Custodian. This shall not be deemed to limit the power of the Alien
Property Custodian to return such property or the proceeds thereof, or
to indicate that compensation will not be paid in lieu thereof, if and
when it should be determined that such return or compensation should
be made.
(c) Any person not a national of a foreign country designated
in Executive Order No. 8389, as amended, asserting any interest in said
property, or any party asserting any claim as a result of this order, may
file with the Alien Property Custodian a notice of his claim, together
with a request for hearing thereon, on Form APC-1 within one year of
the date of this order, or within such further time as may be allowed.
by the Alien Property Custodian.
This order shall be published in the Federal Register.
Alien
Leads LEO
T.Property
CROWLEY, Secently Custodian
April 24, 1942
TREASURY DEPARTMENT
274
INTER OFFICE COMMUNICATION
DATE April 24, 1942.
TO
FROM
Mrs. Klotz
Secretary Morgenthau
The memo which Gaston gave me on the shipping
situation in New York - I want to send for Lew Douglas.
I want a copy of that for Harry Hopkins at lunch today.
Also ask Gaston whether he can get a similar report
for Boston, Baltimore, Philadelphia, or any other
important ports on the Atlantic Gulf Coast; also San
Francisco, Seattle and Los Angeles. In other words,
I would like to know what the situation is in all of the
ports as of, say, today. Send out messages and get it
for me. I'd like the answers back in Monday by the
latest. Mr. Tickton can help Mr. Gaston if Mr. Gaston
needs any help. (Mr. garton 4/27-)
Finished-Partish- 4/08/92-
275
April 24, 1942.
TO Supervising Customs Agents or Customs Agents in Charge at Boston,
Baltimore, Philadelphia, Norfolk, Charleston, Savannah, New
Orleans, Los Angeles, San Francisco, Portland, Seattle:
With assistance of Collector please compile following information
and transmit by teletype today total number seagoing oargo vessels in
your port today classified as follows: (1) by nationality (2) by
action status, subclassified as lading, discharging, idle, repairs and
in stream.
Further subclassify in stream as follows: coastwise, ballast,
enroute, laden.
Sent to me Shamharah by Special messing n 10:40am 4-24-42
276
April 24, 1948
Mr. Southard
Mr. Districh
with reference to year name of April Managisting the services the Federal
Reserve Bank renders the Fund, the following is a brief recense of such services.
1. gold.
(a) When the read selle gold to foreign countries in nearly all cases the
gold must be transferred from the Assay office to the Federal Receive
Bank of New Test for earmark. this accessitates the Federal providing
sea to check and reseive the gold as the Assay office, transport 10 to
the bank, weigh 18 and deposit is is earnesk.
08 meet purchases of gold free foreign countries by the Fund the Federal performs
about the same work is moving gold to the Assay office. Whee gold is purchased
OF sold for delivery as the Federal, physical transfer of the gold must be made
from or to the Fund's account at the bank.
(b) Occasionally the Federal sate as our fiscal agent in handling the
movement of special gold consignents from the point of debarkation
to the Assay office OF Nine. A case is point is the recent Bussies
gold shipment that arrived at Halifan.
(e) Gold engaged for shipment to the United States is reported daily to
the Treasury, together with the pertinent details in connection with
such shipments.
(d) Several months age the Federal gave as considerable holp is grouping
gold importe w country of account, this information was collected
for the Division of Monetary Research. Recently, the Federal also
assisted this office in preparing a report for the Menetary Research
ea the Fund's gold transactions for 1941.
(e) From time to time the Federal calculates the shipping costs of gold
from foreign countries to the United States. the recent inquiries
from South American countries on the rising costs of moving gold will
be recalled is this connection.
2. Stabilisation Fund Agreements and Operations.
(a) In the preparation of agreements the Foreign Exchange Division and
the Legal Department of the Federal are consulted.
(b) All operations under the agreements, such as the purchase and sale
of exchange, the purchase and sale of gold, the receipt of a deposit
277
-
to as account such as the Dence do Brasil, or the payment of interest
is reported to this office. The Federal also provides us with all
correspondence is connection with the operations under the agreements.
3. Exchance.
(a) current market developments - New York beake provide information and
the Federal relays 19. Proquently the Federal gate information direct
from foreign central banks and advices this office accordingly.
(b) Exchange regulations - The Federal informs us of any regulations they
receive and assist in our efforts to answer exchange central questions.
Mr. Hawkey is using information supplied by the Federal in preparing
the foreign exchange date for Mr. White's Stabilianties notebook.
4. Dollar and Gold Dalences.
The Federal's Foreign Accounts Division reports daily the transactions in
about 15 important advents, as well as their closing balances.
5. Reports.
the Federal saintains records of all transactions of the Fund and submits,
once a year, a detailed record of operations which is andited by a committee of Treasury employees. When information about the Fund's operations is
needed. the Federal prepares the accessary statements.
6. Statements.
Ve receive from the Federal the following:
2 daily statements of the Fund.
1 daily statement of gold and dollar accounts held by the Federal
for the "tripartite" countries, China and Brasil.
1 daily statement of gold shipments estrate to this country.
1 daily statement of New York banks' sterling transactions with
commercial concerns.
1 weekly statement of gold and dollar balances and securities hold
by the Federal for all foreign accounts.
1 weekly statement of foreign exchange positions of selected banks
and bankers is the Second Federal Receive District.
1 weekly and 1 monthly caulated statement of U.S. international
gold movements.
Although we are purchasing no silver under the Silver Purchase Act at the
present time, the Federal asverthology keeps this office informed of silver market
conditions. It also salatains records of all purchases, from which statements are
prepared for the treasury when requested. As mentioned is my nonorsades to you
dated April 13. say expenses in connection with the Silver Purchase Act are charged
to the Stabilisation Fund's account, but exbeequently the Fund is reimbursed for
such expenses from the Silver Purchase Act account.
278
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DAT April 24, 1942
Secretary Morgenthau
TO
FROM
Mr. Kamarck
Subject: Comment
on General Stillwell's Telegram to the
Generalissimo
1. According to the facts available in Washington,
the picture drawn by General Stillwell appears correct.
2. Translating General Stillwell's telegram out of
its Burmese names, the action appears to have occurred
as follows:
Facing the Japanese, the Chinese held the left
flank; the British, the right flank. The Japanese broke
through the British lines near where they adjoined the
Chinese. Having broken through, the Japanese proceeded
to encircle the British. The Chinese sent their 38th
division to break through the Japanese encirclement. This
was done and the British escaped.
The Chinese had then to fill the 40-mile hole
resulting from the Japanese break-through. Since the new
British lines were now 100 miles in the rear of the Chinese
lines, the Chinese had to fall back from Pyinmana without
executing their planned offensive.
3. The bulk of the "British" troops are a part of
the Indian Army. The troops participating in the fighting in Burma are:
British: 17th Indian Infantry Division
82nd Indian Infantry Brigade (equivalent
to a U.S. regiment)
7th United Kingdom Armored Brigade
(equivalent to a U.S. armored
regiment)
Total of 20,000 men
Chinese: 6 divisions, or 50,000 men.
Japanese: 5 or 6 divisions, or 100,000 men.
279
-24. The Burmese fighting has demonstrated that the
fighting efficiency of the Chinese 18 high. "The British
necessarily indicate that British efficiency is low. The
collapse", of which General Stillwell speaks, does not
British troops in question have been fighting constantly
since the first part of December with little relief, little
air support, few supplies and negligible reinforcements.
They have been forced to retreat constantly through a
hostile or indifferent population.
It is quite likely that in accordance with the
strategy of fighting against allies, that the Japanese
have concentrated on attacking the British troops. In
this way, there is hope of causing dissension in the allied
camp. For political propaganda in Burma, Japanese attacks
on the British rulers are more effective than attacks on
the troops of Free China.
280
SECRET
MINISTER FOR FOREIGN AFFAIRS
REPUBLIC OF CHINA
April 23, 1942
Dear Mr. Morgenthau:
The Generalissimo received the enclosed
telegram dated April 21st from General Stilwell at
the Burma front, in which you will no doubt be interested.
Yours sincerely,
tabron
Enclosure
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
281
SECRET
TELEGRAM TO THE GENERALISSIMO FROM GENERAL STILWELL
DATED APRIL 22, 1942.
"CHINESE TROOPS NOW WITHDRAWING TO NORTH FROM PYINMANA
AREA. CHINESE 38th DIVISION ASSISTING BRITISH ON IRRAWADDY FRONT.
BRITISH FAILURE EAST OF MAGNE TO PREVENT JAPANESE BREAK THROUGH
IS ENTIRE CAUSE OF CHINESE WITHDRAWAL. JAPANESE BREAK THROUGH
RESULTED IN CAPTURE OF YENANGYAUNG OIL FIELDS AND CRITICAL THREAT TO
CHINESE REAR VIA KYAUKPADAUNG AND ROAD TO NORTHWEST THROUGH MYINGYAN
TO MANDALAY. IN ADDITION TO ABOVE A HOLE 40 MILES WIDE HAS BEEN CREATED
BETWEEN KYAUKPADAUNG AND NATMAUK. CHINESE TROOPS FILLING THIS HOLE
QUICKLY AS POSSIBLE. CHINESE FIFTH ARMY WAS ABOUT TO LAUNCH A COUNTER
ATTACK FROM PYINMANA WITH EXCELLENT CHANCE OF SUCCESS AND BRITISH
COLLAPSE CAME AT MOST CRITICAL TIME. IF OTHER COMMUNIQUES ARE ISSUED
WHICH MIGHT REFLECT ON FIGHTING EFFICIENCY OF CHINESE TROOPS, I FEEL
YOU SHOULD KNOW ABOVE FACTS."
SECRET
282
0
0
P
Y
DEPARTMENT OF STATE
Washington
In reply refer to
FD
-
April 24, 1942
The Secretary of State presents his compliments
to the Honorable the Secretary of the Treasury and
encloses copies of telegram no. 231, dated April 23,
1942, from the American Consulate General, Sydney,
Australia, giving the aggregate amount of Treasury checks
received from the Commonwealth Bank on April 22, as $150,415.92.
Enclosure:
From Consulate, Sydney,
no. 231, April 23, 1942.
eh:copy
4-24 42
283
C
0
P
Y
LM
Sydney
This telegram must be
paraphrased before being
Dated April 23, 1942
communicated to anyone
other than a Governmental
agency. (BR)
Rec'd 11:33 a.m.
Secretary of State,
Washington.
231, April 23, 2 p.m.
Reference my telegram no. 216, April 10.
Referring to the Department's telegram no. 100,
March 14, aggregate amount Treasury checks received from
Commonwealth Bank last night $150,415.92.
PALMER.
GW
eh:copy
4-24-42
284
TELEGRAM SENT
PH
This telegram must be
paraphrased before being
communicated to anyone
April 24, 1942
11 Pelle
other than a Governmental
agency. (BR)
MEMBASSY
CHUNGKING (CHINA)
325
For Adler from the Secretary of the Treasury
and Fox.
QUOTE. REfErENCE your no. TF-25, April 9,
1942.
1. Your paragraph no. 1 regarding Stabilization
Board. According to the Agreement of April 1, 1941
the fund includes that portion of the US$50 million
which has been SECURED by purchase of yuan by the
Secretary of the Treasury through the Federal RESERVE
Bon!: of NEW York at the request of the Central Bank
of China. .'s yet there has not been any yuan purchased
by the Treasury because the Federal RESERVE Bank
have not received from the Central Bank of China D.
request to that Effect, and, therefore, the fund as
yet do Es not include the US$50 million or any part of it.
2. Your paragraph no. 2 advises us that
Central Bank
285
2-325, April 24, 11 P.M., to Chungking.
Central Bank is opening an account for Federal
RESERVE Bank in NEW York for the Chinese currency
equivalent of US$5 million. The SecrEtary is, of
course, prepared to purchase through the Federal
RESERVE Bank of NEW York the Chinese currency
Equivalent of US$5 million in accordance with the
procedure outlined above.
3. Your paragraph no. 2 also outlines proposal
of Board to hold Chinese Treasury notes instead
of fapi. Since WE presume that a quorum of the
Board was present when this decision was made this
proposal would SEEM to bE in accord with the Agree-
ment of /pril 1.
4.
Your Section 2 gives gist of memorandum
Board proposes to submit to Dr. Kung. Mr. Fox is
inclined to oppose the proposal and thinks that it
would be unfortunate if such action was taken.
Treasury officials here feel that the Stabiliantion
Board should take no steps which would weaken its
long-run position as this proposal would SEEM to do.
WE bEliEVE that the proposed curtailment of the sphere
of activities of the Board is not compatible with its
Effective functioning.
5. Your
286
-3-335, April 24, 11 p.m., to Chungling.
.
5. Your cable of February 3, TF17, paragraph
4, asks for information to b E obtained for Fox. A
visit by Fox to NEW York banks has confirmed previous
impression that information is not available as to
amount of fapi held in Shanghai on Board's account
nor C.S to amount of set-offs on books of bank not
yet credited to the Board. The Bank of China in
NEW York has kindly furnished Fox with a record of
all transactions with the Board which can bE forwarded
to Chungking, if such information is not available
in the Bank of China's offices in Chungking.
However, information contained in your cable of
April 18, no. TF13, would SEEM to make this unnecessary.
HULL
(FL)
FD:IL:BUCB
Treasury Department 287
Division of Monetary Research
Date April 24, 1942
MrSouthand
To:
From:
Mr. Southard a Gass
I do not believe that
this nude to be brought
to the Secretary' e
attention.
- be
MR. WHITE
Branch 2058 - Room 2141
288
C
0
P
Y
DEPARTMENT OF STATE
Washington
In reply refer to
April 24, 1942
FD
The Secretary of State presents his compliments to
the Honorable the Secretary of the Treasury and encloses copies
of telegram no. 134, dated April 18, 1942, from the American
Consulate, Fort de France, (Martinique), French West Indies,
concerning 66 kilograms of native gold which French Guiana
exported to Brazil in March.
Enclosure:
From Consulate, Fort de France,
no. 134, April 18, 1942.
eh:copy
4-24-12
289
C
0
P
Y
Fort de France
MEV
This telegram must be
paraphrased before being
Dated April 18, 1942
communicated to anyone
other than a Governmental
agency. (BR)
Rec'd 1:37 p.m.
Secretary of State,
Washington.
134, April 18, 11 a.m.
Referring to my despatch no. 193, March 24,
French Guiana exported 66 kilograms native gold to Brazil in
March.
MALIGE
NPL
eh:copy
4-24-42
290
COPY
Calcutta
NMC
This telegram must be paraphrased before being communi-
cated to anyone other than a
Governmental agency. (BR)
Dated April 24, 1942
Rec'd 6:01 p.m.
Secretary of State,
Washington.
RUSH
301, April 24, 4 p.m.
Your 180. April 15. 5 p.m.
Chartered Bank of India, Australia and China requests
procedure be extended to its branches at Delhi, Karachi and
Bombay where American officers now numerous.
SCHNARE
JRL
COPY:lap-4/25/42
291
INCOMING CABLEGRAM
Date: April 24, 1942
From: Basle
Federal Reserve Bank of New York,
New York,
#30
Attention: Mr. Knoke
Please obtain license to buy from United States
Treasury gold bars containing approximately 32,000 fine
ounces to be held earmarked for our own Account No. 2
debiting our Account #B* with countervalue.
(Sgd.) Bank for International
Settlements,
(Received by telephone from Federal Reserve Bank of New York,
N. Y. 4:35 p.m. April 24, 1942)
ime
292
COPY
OUTGOING CABLEGRAM
April 24, 1942
State Bank of the U.S.S.R.
Moscow
No. 20
In accordance with request made by your
Embassy in Washington through United States Treasury
Department please cable how reimbursement to this
bank is to be made for express charges amounting to
$26,445.14 incurred by us on shipment of goods con-
signed to us and delivered to United States Treasury
April 20, 1942.
FEDERAL RESERVE BANK OF NEW YORK
Copy:inc
4/25/42
293
C
0
P
Y
DEPARTMENT OF STATE
Washington
In reply refer to
FD
April 24, 1942
The Secretary of State presents his compliments to the
Honorable the Secretary of the Treasury and encloses copies
of telegram no. 220, dated April 23, to the American Embassy,
Montevideo, Uruguay, transmitting a message for Treasury concerning an inquiry received by the Federal Reserve Bank of
New York from the Central Bank of Uruguay about a shipment by
air of $5,000,000 of gold bars.
Enclosure:
To Embassy, Montevideo,
no. 220, April 23, 1942.
eh:copy
4-24-12
C
294
0
P
Y
TELEGRAM SENT
HRL
April 23, 1942
This telegram must be
paraphrased before being
9 p.m.
communicated to anyone
other than a Governmental
agency. (BR)
AMEMBASSY,
MONTEVIDEO.
220
The following is being sent you at the request of the
Treasury Department: QUOTE The Federal Reserve Bank of
New York informs us that they have received an inquiry
from the Central Bank of Uruguay inquiring about shipment by
air of $5 million of gold bars. The Treasury Department is prepared, of course, to approve the shipment of gold
to Uruguay whenever the Central Bank so requests. However,
the Treasury is interested in ascertaining why it is regarded
necessary to ship gold from New York to Uruguay at a time
when the risks of shipment are so great and when the costs of
shipping are so high.
Please make discreet inquiry and cable us at once as
we would not wish to delay shipment if the Central Bank of
Uruguay decides to have the shipment made. UNQUOTE.
HULL
(PWB)
RA:PWB:MEG
eh:copy
4-24-42
295
TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION
DATE April 24, 1942
chaunces
TO
FROM
Secretary Morgenthau
Mr. White
CONFIDENTIAL
Registered sterling transactions of the reporting banks were as follows:
Sold to commercial concerns
Purchased from commercial concerns
£ 78,000
£127,000
Open market sterling held at 4.03-3/4, with no reported transactions.
The Canadian dollar discount narrowed to 12-3/8% as compared with 12-1/2%
yesterday. It was reported that the Post Office purchased between 200,000 and
300,000 Canadian dollars in today's market.
The Argentine free peso declined 7 points to a final quotation of .2365.
New
were asIn
follows:
York, closing quotations for the foreign currencies listed below
Brazilian milreis (free)
Colombian peso
Mexican peso
.0516
.5775
.2064
Venezuelan bolivar
Uruguayan peso (free)
.5295
.2860
Cuban peso
1/4% premium
We sold $1,120,000 in gold to the B.I.S., which was earmarked in B.I.S.
account No. 2. Gold in this account is the property of that bank.
In order to replenish the Stabilization Fund's gold balance, we purchased
$450,000 in gold from the General Fund through the New York Assay Office.
No new gold engagements were reported.
The Treasury's purchase price for foreign silver was unchanged at 35 Handy
and Harman's settlement price for foreign silver was also unchanged at 35-1/84.
The Federal Reserve Bank of New York bought an additional 40,000 ounces of
silver in New York today at 35-3/84 per ounce, to be used in the 1,200, 000-ounce
silver coinage order that the United States Mint is executing for the Australian
Government. So far the Federal has purchased 696,000 ounces.
We made no purchases of silver today.
296
-2-
The report of April 15 received from the Federal Reserve Bank of New York,
giving foreign exchange positions of banks and bankers in its district, revealed
that the total position of all countries was short the equivalent of $2,048,000.
a decrease of $294,000 in the short position since April 8. Net changes were as
follows:
Short Position
Country
England
April 8
$ 905,000 (Long)
Europe
2,485,000
Canada
1,674,000 (Long)
25,000 (Long)
Latin America
All others
160,000
2,288,000
13,000
Total
$2,342,000
Japan
Other Asia
Short Position
April 15
$1,067,000 (Long)
2,494,000
1,659,000 (Long)
159,000 (Long)
Change in
Short Position*
- $162,000
+ 9,000
+ 15,000
- 134,000
160,000
2,344,000
65,000 (Long)
$2,048,000
--
+ 56,000
-
78,000
- $294,000
. Plus sign (+) indicates increase in short position, or decrease in long position.
Minus sign (-) indicates decrease in short position, or increase in long position.
CONFIDENTIAL
297
Copy No.
13
BRITISH MOST SECRET
(U.S. SECRET)
OPTEL No. 134
Information received up to 7 A.M., 24th April, 1942.
1, NAVAL
A British ship, in coastal convoy was sunk by mine yesterday off the
NUMBER,
2, MILITARY
BURMA. Na report received.
RUSSIA. The Finnish communique of the 22nd claims that Russian attacks
along the line of the River SVIR have been repulsed with very heavy losses. Recent
Russian reports have indicated that severe local fighting has been in progress in
this area during recent weeks, out it is thought that the engagements have not been
on the scale suggested by the Finns. Russian pressure is being maintained against
the German 16th Army surrounded in the STARAYA RUSSA area and at a number of points
in the Central Sector.
3. AIR OPERATIONS
WESTERN FRONT. 22nd/23rd. About 100 tons of high explosive and incendiaries were dropped in the COLOGNE area and large fires were seen. 134 sea
mines were laid,
23rd/24th, 161 aircraft were despatched - ROSTOCK 143, Heinkel Assembly
Works ROSTOCK 18. Four are missing and one crashed, Preliminary reports indicate
that conditions were favourable and the Attack was successful, About 38 enemy aircraft were plotted, of which 21 flew over South-West ENGLAND. Beaufighters destroyed two enemy bombers.
MALTA, Between 3.30 p.m. 22nd and 11.30 a.m. 23rd 130 enemy bombers
with fighter escort attacked the aerodromes. Five of our fighters were destroyed
on the ground and five other aircraft damaged, in the air, two of our fighters were
destroyed and three damaged. Our fighters and anti-aircraft fire destroyed eight
enemy aircraft, Probably destroyed one and damaged eight.
SICILY. 22nd/23rd. Three Wellingtons made three attacks each on
COMISO aerodrome.
4. HOME SECURITY
23rd/24th. Scattered bombing over DEVONSHIRE. Eight persons killed
at Devon Mental Hospital, EXMINSTER, and five in EXETER, Some damage to public
utilities and main railway line,
298
April 25, 1942
10:43 a.m.
HMJr:
Hello.
Operator:
Judge Rosenman.
HMJr:
Hello.
Judge
Rosenman:
Henry.
HMJr:
R:
Can I sell you a few War Bonds?
Yeah, look.
HMJr:
Yeah.
R:
Henry, we wrote out a pretty long speech,
and, as you know, he's going to send a
message first; so last night he dictated
from this thing that we'd written 8 message
HMJr:
Yeah.
which is very rough and not finished. Now,
R:
I could send this over to you just as he dictated it, or this afternoon, I could send you
something that would read a little better. Which
do you want?
HMJr:
I'd like to have something now while my people
are here.
R:
All
andright.
it wasI haven't
dictated even read it, you know,
HMJr:
Can I send a Secret Service man over to get it?
R:
Yeah.
HMJr:
Where shall he come to?
R:
Come to the Cabinet Room.
HMJr:
Well, I'11 have him there immediately. Hello.
R:
Yeah.
299
-2HMJr:
R:
I'll send him over, and I'll tell him to ask
for you.
All right. Now, just remember that this is just
first dictation of his. We haven't gone over
it at all. There are some figures in there which
you might want to correct and send back.
HMJr:
Yes.
R:
will you send this back with the corrections?
HMJr:
I'11 either send it back or walk it back.
R:
All right. Well, don't try to correct any
language or anything, because it isn't final
language.
HMJr:
R:
Well, if we've got anything to suggest, we'll
dictate a memo. How's that?
Well, I haven't a thing now. There's some things
about cost of living which I'll have to get your
economist to finally give us the figures on.
will you have someone around tomorrow?
HMJr:
I'll have them available.
R:
I mean available, yeah.
HMJr:
Yes.
R:
Will you be around tomorrow?
HMJr:
R:
I'll be around until four o'clock.
Well, that's time - if not, after that, whom
should I call?
HMJr:
Well, on what phases of it?
R:
Well, I mean, in case I want to get a figure
checked or something.
HMJr:
Well, I think the best person would be Kuhn.
K-u-h-n.
300
-3R:
Yeah. He could get the people
HMJr:
He'11 get what - Ferdinand Kuhn. You know
R:
And he '11 I be around tomorrow.
HMJr:
R:
HMJr:
I'11 tell him to be around.
I don't mean in the office.
No, no. I'll tell him to stay - to keep in
touch with the Treasury switchboard.
R:
HMJr:
R:
That's right.
But I'll be available up until four. Then we're
going up - it's my father's birthday.
Oh, it is?
HMJr:
Yes.
R:
I told you I saw him.
HMJr:
Yes.
R:
HMJr:
And we're trying to get him to run for Governor.
(Laughs) Well, thanks awfully, Sam, and anything
that I can do, I'm available, and I'll have a
man come over and get it.
R:
All right.
HMJr:
I appreciate your calling me.
R:
All rightie. Good-bye.
301
- second snaft
4- 2 5
TO THE CONGRESS:
In certain ways the present world encircling war
presents problems which were unthinkable during the First World
War. But -- in other ways -- the circumstances of today parallel
those of 1917-1918.
The theatres of combat today cover vastly greater
areas. Many more millions of human beings are involved. The
new factors of mechanical power, in the air and on the land,
have produced radical changes in basic strategy and tactics.
We may take comfort from the fact that in the earlier
war, for nearly four years, the forces of aggression and barbarism
were in the ascendancy; and in this new war the nations resisting the Axis Powers may have to fight for a long time before
they have won on the fields of battle.
Now, as then, the common enemy has all the advantage
TO
at the outset; now, as then, it has cost a those who are defending
our type of civilization bitter defeats and vast losses before
they can establish the vital superiority in men and munitions
which will turn the tide.
--
DRAFT #2
302
TAXINK
Today we -- all the United Nations - are still in
this period of preparation -- producing those twin necessities
for victory, trained men and adequate tools.
The United States was far better prepared for actual
war on December 7, 1941, than it was on April 6, 1917. For over
two years by a succession of Congressional Acts we had Instituted
orinitated
and carried out safety measures for our own defense in growing
#
volume and importance. There were the revisions of the Neutrality
laws, the drastic increases of our Army and Navy and the instruments of war which they needed, the Selective Service Act, and
the Lend-Lease law.
Finally, after Pearl Harbor, the American people adopted
a national program which would have been called fantastic by
most of our population two years before. This program has called
for the shifting of the major part of American industry from
the products of peace to the weapons of war.
Inevitably - but with the full approval of the nation -morning program
10 is dislocating industry, labor, agriculture and finance. It
is disrupting, and will continue to disrupt, the normal manner
of life of every American and every American family. In this, we
303
-3. -
DRAFT #2
follow the pattern of the first World War, although on a vastly
greater scale.
In that earlier war, however, there were certain economic
factors which produced unnecessary hardships, and these hardships
continued long after the signing of the Armistice. I use the
word "unnecessary" because it is my belief that a very great deal
of the suffering which was caused then can be avoided now.
It is about the economic factors in war that I address
essentially
you today. They relate
to an easily understood phrase
a
which affects the lives of all of us -- the cost of living. In
1918 and 1919, because rises in the cost of living which came with
the war were not checked in the beginning, people in this country
paid nearly twice as much for the same things at the end of the
war as they did at the start of it.
The rise in the cost of living during this war has begun
to parallel the last. The time has definitely come when " must
be stoppeds to stop The spinal.
While the cost of living, since the Autumn of 1939, has
gone up about 20% so far, based on the average prices of necessities,
304
--
DRAFT #2
we must now make a determined effort to keep it from rising
another 60% or 80% during the next year or two -- an effort,
indeed, to hold it to somewhere near the present level.
There are three obvious reasons for taking every step
necessary to prevent this rise.
First, when the cost of living spirals upward week
after week and month after month, people as a whole are bound to
become poorer, because the pay envelope and the projit envelope
rising
lag behind
retail prices. Second, the cost of carrying on the
^
war by the Government and, therefore, by the people, will increase
and save
by many billions, and if we do not pay to the limit of our ability
now, we and our children will be burdened with unbearable debts
in years to come. Third, there is an old and true saying that
that which goes up must always come down -- and you and I know
the hardships and heartaches we all went through in the bad years
after the last war when Americans were losing their homes and
were looking
their farms and their savings and/in vain for jobs.
We do not intend to present the same disastrous situation
after the war to those men who today are fighting our battles
in all parts of the world.
305
-5- -
DRAFT #2
We must therefore adopt as one of our principal
domestic objectives the stabilisation of the cost of living.
The Government of the United States should provide a definite
That
program to attain - end.
A
1
Relying on past and present experience, and leaving
out dozens of details which relate far more to questions of
hirto
method than to the objective itself, I recommend to the Congress
the following points which Taken Together may well be
called our present national economic policy
1. To keep the cost of living from spiraling upward,
we must keep personal and corporate profits down to a
reasonable rate, the word "reasonable" being defined at
a low level.
2.
To keep the cost of living from spiraling upward,
we must fix ceilings on the prices which consumers and
wholesalers and manufacturers pay for the things they buy.
3.
To keep the cost of living from spiraling upward,
we must stabilize the remuneration received by individuals
for their work.
4.
To keep the cost of living from spiraling upward, we
must stabilize the prices received by growers for the
products of their lands.
306
-6-
SECOND DRAFT
5. To keep the clost of living from spiraling upward, we
must encourage all citisens to contribute to the cost of winning
this war by purchasing Government War Bonds with their earnings
instead of using those earnings to buy articles for their own
use which of necessity are scarce.
6. To keep the cost of living from spiraling upward, we
of
must ration all commodities which there is a scarcity so that
they may be distributed fairly among consumers and not merely
in accordance with financial ability to pay high prices for
them.
7. To keep the cost of living from spiraling upward we
must discourage credit and installment buying and encourage
the paying off of debts, mortgages, and other obligations;
for this encourages savings and adds to the ability of creditors
so paid off to buy more War Bonds.
I know that you will appreciate that these seven principal
points, each and every one of them, will contibute in sub-
stantial fashion to the main objective - keeping the cost
of living down. I give the solemn assurance to the Congress
that if the objective is not attained, and if the cost of
living does continue to rise substantially) I will so advise
the Congress and ask for any additional legislation which may
be necessary.
307
-7-
DRAFT #2
of the seven points which I have enumerated, it is
my best judgment that only one of them requires legislation at
the present time, for the very good reason that the Congress has
already passed laws with respect to the others which seem ade-
quate to meet the national policy enunciated.
In the one item where legislation is necessary, the
subject is now under consideration in the House of Represent tives.
I refer to the first item -- the purpose of which is to keep excess
profits down and, at the same time, raise further large sums for
the financing of the war.
On this subject, I believe that the objective can be
attained through tax processes. lie are now spending, solely for
war purposes, the sum of about one hundred million dollars every
day of the week. But before this year is over that rate of expenditure will be doubled. This means that a sum equal to more
than half of the entire national income -- more than 55 # out of
every $1.00 made by any business or by any individual in the
United States -- will be spent in the war effort.
Almost the whole of these billions is being and will
be spent within the United States itself.
308
DRAFT #2
-Profits must be taxed to the limit consistent with
continued production. This means business profits -- not only
in making munitions, but in making or selling anything else. Under
the proposed new tax law we seek to take by taxation all undue
or excess profits. It is incumbent upon the Congress to define
undue or excess profits, and anything in excess of that specific
figure should go automatically to the Government.
One of our difficulties is to write a law in which some
clever people will not find loopholes, or in which some businesses
will not be equitably included. I have suggested to the Chairman
of the Committee on Ways and Means in the House of Representatives
that some blanket clause could well cover, by a special tax, all
profits of any kind of business which exceed the expressed defini-
tion of the legal profit figure.
At the same time, while the number of individual Americans
affected is small, discrepancies between low personal incomes and
very high personal incomes should be lessened, and I am inclined
to believe that in time of grave national danger such as this no
American citizen ought to have a net income after he has caid his
taxes of more than $25,000 a year. And any top limit objective
309
--
DRAFT #2
should seek to cover those net incomes which are made up in
whole or in large part by returns from non-taxable securities.
It is my belief that taxing such hitherto exempt incomes, by
the method of surtaxes, would be wholly constitutional.
I earnestly hope that the Congress will pass a new
tax bill at the earliest moment possible. Such action is imperative in the comprehensive all-out effort to keep the cost
of living down.
I do not believe that it is necessary for me to go into
great detail in relation to the other six items which I have
summarized.
The second item, relating to price control on articles
which consumers and manufacturers buy is, I think, definitely
covered by existing law and is being put into effect as rapidly
as possible. It is our effort to be fair, SEX but if our future
experience reveals inequality or unfairness, corrections will,
of course, be made.
The third item, seeking to stabilise remuneration for
work, is also definitely covered at the present time by existing
laws and Executive Orders. If the cost of living remains relatively
310
-10-
DRAFT #2
stable, no one is going to be hurt. Strikes are at a minimum.
Most workers in munition industries are working far more than
forty hours a week and should continue to be paid at time and
a half for overtime.
The question of double time for Sunday, however, is a
very different one. It is true that one day of rest in seven
should be given to every worker. But, if we are going to keep
our plants going seven days a week, that seventh day of rest
will have to be staggered, and it will therefore not fall on a
Sunday for every worker. However, when extraordinary circum-
stances in any plant make it necessary for a laborer to work
on his day of rest -- whether it be Sunday or not -- he should
be paid double wages for that seventh day.
The War Labor Board machinery has been generally accepted
by labor and industry for the settlement of all disputes and
organized labor has given up its right to strike during the
war. Existing contracts between employers and employees must,
in all fairness, be carried out to the expiration of those
contracts. The War Labor Board will, of course, seek to remove
inequalities and to give due consideration to the elimination
of sub-standards of living. I repeat that all of these processes, now in existence, will work equitably for the overwhelming
311
DRAFT #2
- 11 -
proportion of our workers if we can keep the cost of living
down, and this policy will guide all Government agencies.
In regard to item four - prices of farm products -the same general thesis holds true. For nearly nine years
it has been the policy of the Government to seek an objective
known as "parity" - or, in other words, farm prices that give
the farmer an assurance of equality in individual purchasing
power with his fellow Americans who work in industry. Some of
the products of the farms have not yet reached the stage of
parity. Others have exceeded parity. Under existing legislation a ceiling cannot be placed on certain products until they
reach a level somewhat above parity. I am confident however
that with price ceilings imposed in accordance with law, the
average of all farm products can be kept at a parity ceiling.
With respect to item five, the American people know that
if we would raise the billions which we now need to pay for the
war and at the same time prevent a disastrous rise in the cost
of living, we shall have to double and more than double the seale
of our savings. Every dime and dollar not vitally needed for
absolute necessities should go into War Savings Bonds and Stamps
312
-12-
DRAFT #2
to add to the striking power of our armed forces.
I have been urged by many persons and groups to recommend
the adoption of a compulsory plan of savings by deducting a
certain percentage of everyone's income. I prefer, however, to
keep the voluntary plan in effect as long as possible. and as long
as it is effective to meet the needs.
with respect to item six, it is obviously fair that where
there is not enough of any commodity to meet all civilian
demands, those who can afford to pay more for it should not be
preferred over those who cannot. I am confident that as to many
basic necessities of life rationing will not be necessary because
we shall strive to the utmost to have an adequate supply. But
where any article becomes scarce , rationing is the democratic,
equitable solution.
Item seven should be made effective as soon as possible
now that money is becoming plentiful. Those who comply with it
will be grateful that they have done so when money becomes tighter
after the war.
As to all of those items which do not require legislation,
the executive departments and agencies whose functions and duties
313
DRAFT #2
-23-
are involved, will begin as quickly and expeditiously as possible
to carry them out.
The result will be to require of every one of us some
share of sacrifice. Americans all will welcome this opportunity
to share in the common effort of civilized mankind to preserve
decency and dignity in modern life.
sent to Pres 4/31/14
Import vion
Legislative and administrative action to central the cost of (see judge
Rosemar
living must be supplemented by the veluntary action of the American
4/26 send
people.
memo from
/nes of 4/6
I refer new particularly to Item No. 5 in the program I - here
suggesting, which calls for a very substantial increase in the buying
of Far Savings Bonds and Stamps. If these purchases are to have a
material effect in restrining price increases they must be made out
of current income. In almost every individual ease they should be
big enough to mean rigid self-denial, a substantial reduction for
most of us in the state of expenditure that is comfortable and easy
for us. We can't fight this war, we can't exert our seximum effort,
on a spend-as-resul basis. We cannot have all we want if our soldiers
and sailors are to have all they need.
The buying of War Bonds thus has a double value. If we set for
ourselves high quotes, quotas that mean giving up many things we want,
and if we stick to them, we eas help substantially to prevent disastrous
increase in the cost of living. AS the same time, the money we use
to buy the bonds will buy the materials we need to fight the war.
315
Legislation is now needed in the field of taxation. Fortunately an Administration program dealing
with the whole tax field is now under consideration in
the Congress . It is my belief that this tax program
provides an essential weapon to keep the cost of living
from spiraling, and I earnestly hope that the Congress
will enact the entire program into law at the earliest
moment possible. Such action is urgently needed in the
comprehensive all-out effort to keep the cost of living
down.
The Administration's tax program not only provides
for vast new amounts of revenue needed for the war; it
also will have a direct effect in checking the rising cost
of living, by reducing the demand for goods. It calls
for heavy increases in individual tax rates. It makes
possible the collection of a part of the tax revenue at
--
316
the source. It calls for an increase of $2 billion
in social security contributions, and finally, it calls
for taxes on a list of non-essential commodities. Such
a program will have a more direct effect in checking
the cost of living than, for example, a sales tax which
would lift the cost of every commodity and would fall
most heavily on the very poor.
Moreover, the Administration's tax program will
have indirect effects of great importance in keeping
the cost of living down. The mass of individual income
tax payers, including millions of workers, will be willing and glad to accept heavy new taxes, and will not demand wage increases, if they know that excess profits
are being recaptured by the Government.
Accordingly, the Administration's program calls for
a tax of almost 90 cents out of every dollar of excess
-3-
317
corporate profits over half a million dollars. The
10 cents remaining are, in turn, taxed heavily when the
individual stockholder receives them as income. It may
be that these proposed excess profits taxes should be
increased still further, but in any case the enactment
of the present program would, in my opinion, give our
workers the assurance they must have if they are to refrain from wage demands at this time.
What is true of excess profits is also true of high
individual salaries. Under the present tax proposals an
individual would have to earn $289,000 in order to keep
$50,000 of it after paying his taxes. In addition, the
Government has powers, and intends to make full use of
its powers, to serutinise payments for salaries, personal
expense accounts, and other forms of business expenditures
318
-4which may be employed to avoid excess profits taxes.
A company will not be allowed to deduct as business ex-
pense extravagant payments which are in effect distribu-
tions of earnings rather than legitimate payments for
necessary services rendered, but those who receive such
payments will be required to include them in current
taxable income.
At the same time, while the number of individuals
affected is very small, it may be wise to lessen still
further the discrepancy between very low and very high
believe
personal incomes. I sometimes wonder whether, in time character
no
of great national danger such as this, any American
the
citizen ought to have a net income, after he has paid his
taxes, of more than $25,000 a year.
Increasing income tax rates on a scale as heavy as
that proposed makes it a moral duty to remove all
-5-
319
loopholes in the tax law and all special privilege.
It is indenfensible that those who enjoy large incomes
from State and local securities should be immune from
taxation while we are at war. As a minimum program we
should immediately provide for taxing these securities
on the same basis as United States long-term bonds
issued prior to the enactment of the Public Debt Act
of 1940; that is, interest on them should at least be
subject to surtaxes. There is no question about the con-
stitutionality of such a proposal.
320
To Take the Place of No. 1, Page 4
L. To keep the cost of living from spiraling
upward, we must tax heavily and we must keep per-
sonal and corporate profits at a reasonable rate,
the word "reasonable" being defined at a low level.