Full text of Diaries of Henry Morgenthau, Jr. : Volume 537 : Part 1

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

DIARY

Book 537

June 5-8, - 1942

-ABook Page
Airplanes

Aircraft despatched, week ending June 2. 1942 - British
Air Commission report - 6/5/42
Shipments to British Forces - Kamarck report - 6/8/42.

537

183,185
318

-BBoard of Economic Warfare

Minutes of meeting June 4, 1942 - 6/8/42
a) Discussion of
1) American Republic supplies

281

2) Wooden vessels

3) Shipping requirements' reduction through
adjustments in food production and types of
food being moved

4) Cargo planes

Brame, Samuel (Collector of Internal Revenue, Richmond, Va.)
See Glass, Carter
Business Conditions

Haas memorandum on situation, week ending June 6, 1942 6/8/42

286

-0
Canada

See Gold
China

Central Bank of China to be sole bank of issue in future a Kung victory - 6/8/42
Collector of Internal Revenue (Richmond, Virginia)

352

See Glass, Carter

Correspondence

Mrs. Forbush's resume' - 6/5/42

145

-DDeferments, Military
Senate Committee reports on "conservative attitude of
Treasury" - 6/8/42

234

Dutchess County

See Financing, Government: War Savings Bonds

-FFinancing, Government

Securities Industry: Report on efforts made on recent

issue of 2% Bonds, 1962-1967 - Buffington memorandum 6/5/42

Government securities - recent changes in prices and
yields: Haas memorandum - 6/5/42.

90

92

- F - (Continued)

Book

Page

Financing, Government (Continued)
War Savings Bonds:

St. Louis, Missouri, invites HMJr to speak at
meeting of National Display Men's Association 6/5/42

Payroll Savings Plan:
Treasury report on - 6/5/42
Analysis as of May 30, 1942 - 6/5/42
Dutchess County report for May - 6/6/42
E, F, and G Bonds-sales by States, May 1942 - 6/6/42

537

49

95

119
214
221

238

a) Gamble memorandum - 6/8/42

b) Tickton report on pledges - only about 30 6/18/42: See Book 540, page 177

Progress report - 6/8/42
$1 billion-a-month program: Letter and "Minute Man"

sent to Cabinet members, Senators, Congressmen, etc. -

241

253

6/8/42

(For acknowledgements, see Book 538, page 91)

-GGasoline Rationing

See Revenue Revision

Glass, Carter

Asks HMJr to reappoint Brame (Samuel) Collector of
Internal Revenue, Richmond, Virginia - 6/5/42

51

Gold

Canada: Purchase and earmarking of gold in Canada

discussed in letter from De Surinaansche Bank, N. V.,
to Federal Reserve Bank of New York - 6/8/42.

348

-HHansen, Alvin H.

See Inflation

IInflation
Hansen (Alvin H.) asks HMJr's help in pushing release
of Government loan stocks of wheat and corn and

effective wage stabilization - 6/5/42

60

Internal Revenue, Collector of (Richmond, Virginia)
See Glass, Carter

-KKades, Charles L.

Letter on leaving Treasury for the Army - 6/5/42

134

-LBook Page
Lend-Lease

See also Procurement Division
United Kingdom: Federal Reserve Bank of New York
statement showing dollar disbursements, week ending
May 27, 1942 - 6/5/42

537

178

-M-

Maybank, Burnet R. (Senator, South Carolina)
See Revenue Revision

Military Reports

British operations - 6/5/42, etc
Coordinator of Information reports:
British PWE French subdirective, June 7-14 - 6/8/42.

202,227,
229,360
361

British PWE analysis of German Home Propaganda 6/8/42

363

British PWE Italian directive, for June 5-11 RAF
offensive - 6/8/42
Missouri, St. Louis

365

See Financing, Government: War Savings Bonds

Morgenthau, Henry, Jr.
Affiliated Young Democrats of New York recommend HMJr
for Governor - 6/8/42.

231

-PProcurement Division

Mack fears plans for taking over of Lend-Lease buying
by Service of Supply, War Department - 6/5/42

2

-RRevenue Revision

Maybank (Senator, South Carolina) discusses with HMJr
reimbursement to State for losses suffered through

gasoline rationing - 6/4/42

a) HMJr-Sullivan conversation
Richmond, Virginia
See Glass, Carter

42
45

Roosevelt, Franklin D., Jr.
Correspondence concerning one of five Secret Service

men detailed to protection of his children - 6/5/42.
-S-

St. Louis, Missouri
See Financing, Government: War Savings Bonds

Secret Service

See Roosevelt, Franklin D., Jr.

128

- S - (Continued)
Book Page
Securities
See Financing, Government

Stabilization Fund

Report for April and May, 1942 - 6/5/42

-Taxation
See Revenue Revision

-War Savings Bonds
See Financing, Government

537

88

June 5, 1942
9:00 a.m.
Daniel

Bell:

I thought we ought to all be talking the same
language as long as I'm going to be here and
you fellows are going to be in there.

HMJr:

I see.

B:

And we've got a memorandum we thought we'd

HMJr:

Well, I'11 be ready a little later.

B:

It won't take you a minute.

HMJr:

Only a minute?

B:

Well, it'11 only take you - just long enough

like to have you read over.

to read a little over a page memorandum, and
if there's any comment, we ought to change it

before either one of us go into conferences.

HMJr:

Well, I can do it right now.

B:

All right.

HMJr:

This second.

cc - Mr. Thompson

June 5, 1942
9:50 a.m.

Clifton
Mack:

Yes, sir.

HMJr:

I'm sorry. I've got all these meetings this

M:

morning, so let's take a couple of minutes and
you tell me what you have on your mind.
Very good. I have a hunch that the War Department's Service of Supply - that's Somervell's
organization, you know

HMJr:

Yeah.

are getting ready to take over some of the
Lend-Lease buying that we're doing. Now, that's

M:

only a hunch on my part, but I think I've got a
pretty good basis for it.

HMJr:
M:

Yeah.

And I don't want to be in the position of them
writing a letter saying- to Lend-Lease-or taking

action, and then we re on the defensive, you see.

HMJr:

Yeah.

M:

So I thought - I hated to bother you with it -

but I thought that if sometime when it's convenient
if you could just get in a word to McCabe about
why can't - how's the Treasury getting along and
could they - are there other non-military items
the War Department is buying that we should get,
because it seems to me that the trend should be
the other way, you know, and

HMJr:

Well, what sort of things does Somervell want
to buy?

M:

Well, the Engineer's Division are thinking in

terms of taking over equipment - road building
equipment.

HMJr:

Yeah.

M:

And all that. Well, we've been buying that for

3

2-

years. We're equipped to handle it. We know it.
And they're thinking in terms of, as a matter of

fact, of taking over a lot of these so-called
non-military purchases that we're now handling
for Lend-Lease. Now, this is information that

I get from some of the men that have gone from
War Production Board over to Army, and they have
fancy commissions, you know, now.

HMJr:

Yeah.

M:

And they're thinking in terms of enlarging their
buying, you see.

HMJr:

Well, Clif, I really don't think - and in the
mood I'm in right now, I don't think I'd fight
it myself very much.

M:

HMJr:

I see.

I mean - it's a war, and if that's what the Army

wants
M:

HMJr:

Yeah. Well, I can see that view.

I mean it's - if we fight it and then they don't
get the stuff, then we hold it up, and then it's
our fault.

M:

Yes. Well, I can see that. of course, my thinking
is, that here we have an organization. We know
we can turn out stuff faster than they can, you
see.

HMJr:

I know.

M:

But I can see your view on that.

HMJr:

But it's - I would expect you to bring it to my

M:

Sure.

HMJr:

And that's what you're there for, to fight for
your own organization; but if I don't put up
a real fight on that front, I hope you re not

attention.

too disappointed.

4

-3M:

No, that's perfectly all right, and I'd understand it. Now, there's one other thought, that

sometime - there's no rush about it - but sometime when you have a few minutes, I'd like to
talk with you. It has to do with conservation
of materials and equipment like that

HMJr:

Yes.

M:

field service.

HMJr:

Yes.

M:

And it

in terms of the all-over Treasury Department

HMJr:

What would you want to do on that? What's your idea?

M:

Well, I have in mind this, that - you see today,

there's great stress on conservation of equipment

and space, and manpower
HMJr:

Yeah.

and you know the Treasury agencies through-

M:

out the field, they've grown up more or less in
independent space

HMJr:
M:

Yeah.

and they're operating independent with
each other as the investigative units used to

do before you had that survey made and brought
them together.
HMJr:

Yeah.

M:

Well, now, my thought is that - for example, in

a city such as Chicago, where we have a good many
Treasury agencies located in probably a dozen

different locations.

HMJr:

Yeah.

M:

If they could be brought together, for example,
in a building like the Merchandise Mart

5

-4- HMJr:

Yeah.

and then we could have consolidated space,

M:

consolidated service functions, we could save
terrifically on equipment - which is tremendously
important because later on we're not going to be
able to get equipment - and the sooner we start

HMJr:

to conserve, the better it is.
Well, you don't have to wait to talk to me.
Talk with Norman Thompson.

M:

Very good.

HMJr:

And if the two of you agree, go ahead.

M:

Fine.

HMor:

You don't have to - if the two of you agree,
go ahead.

M:

Very good.

HMJr:

You don't have to wait on me.

M:

Well, that's fine.

HMJr:

What else?

M:

HMJr:
M:

HMJr:
M:

Well, those were the two principal things.
No, don't wait on me. Talk it over with Norman.

All right. And as soon as I get something that
looks specific, we'11 send it over to you.
That's right.
Fine. And we're taking over all buying of
paper. We're doing that the first of July.
We're going to do a real job on that, I know.

HMJr:

Good.

M:

Fine.

HMJr:

Thank you.

M:

Yes, sir.

6

June 5, 1942
9:55 a.m.
HMJr:

Daniel

Hello.

Bell:

Hello.

HMJr:

Bell.

B:

Yes, sir.

HMJr:

If you think well of it, that special advisory

group that I had, George Harrison and that
bunch

B:

Yeah.

HMJr:

What would you think of inviting them to come
down' a week from Monday?

B:

HMJr:

Be all right.
And tell them to be prepared to stay for two
days.

B:

All right.

HMJr:

So then they could get hotel accomodations and

that thing, you see. That would be before the

financing.
B:

Yeah.

HMJr:

Then I'd like to talk things over with them.

B:

You want the same group?

HMJr:

Same group.

B:

What would you think of this time inviting them
through the presidents of the Federal Reserve
Banks.

HMJr:

Oh, no, no, no.

B:

All right. Well, I just thought maybe it would
make them feel better.

D

-2HMJr:

Well, why should I invite George Harrison?

HMJr:

Oh, I - what do you mean?
I mean - and

B:

Through them?

HMJr:

Yeah.

B:

I see. Well, I just thought maybe it would make

HMJr:

Well, don't they feel all right?

B:

Well

HMJr:

Are they in your room there?

B:

A couple of them, yeah.

HMJr:

Well

B:

Do you want somebody from the Coast this time?

B:

THE

them feel better.

I haven't gotten any name which I'm entirely
satisfied with.

HMJr:

Well

B:

I just have a couple of names.

HMJr:

There's an awful good banker down there at
Los Angeles. A trust company.

B:

I got - you don't remember his name?

HMJr:

No, there's some trust company president down
there.

B:

Well, I've got a name there.

HMJr:

What?

B:

I've got a name. I got a name from Los Angeles

Cy Upham gave me.
HMJr:

You don't know what it is?

8

-3B:

Just a moment. George M. Wallace.

HMJr:

Who?

B:

Wallace, President of the Security First
National.

B:

No, that's not the man.
And a fellow by the name of Motherwell.

HMJr:

No.

B:

Wells Fargo, at San Francisco. He said those

HMJr:

were the two best suggestions he could make
for the Coast.
HMJr:

Well, I don't know these people. I don't want
to invite anybody I don't know.

HMJr:

Yeah. I don't know, and I can't
No. We'll let the West Coast go. Marriner

B:

Well

HMJr:

No, I want to invite these people personally,

B:

Eccles can represent the West Coast.

to come down personally to - with me.

B:

All right.

HMJr:

And they've got nothing to do with the Federal

B:

HMJr:
B:

Reserve. No.

You don't want - you said Eccles. You don't
want Eccles in on that group?

No, I want to get a chance to talk.
All right. This same group.

HMJr:

If you please.

B:

I'll invite them.

HMJr:

Thank you.

B:

All right.

9

June 5, 1942
10:00 a.m.

WAR BONDS

Present:

Mr. Graves
Mr. Gamble
Mr. Coyne

Mr. Mills

Mr. Isbey
Mr. Doherty

Mr. Collins

Mr. Moore
Mr. Manning

Mr. Patterson

Mr. Ford
Mr. Ludlow

Mr. Carstens

Mr. Pulliam
Mr. Smith

H.M.JR: Gentlemen, we asked you to come down here

because the various States of which you are in charge
are the more important States that we hope will sell
the F and G Bonds.

I guess Mr. Graves has been telling you that we

here feel, and I am sure that you will agree with us,
that we have really got to begin to sell the F and G
Bonds. Up until now I don't think either Mr. Graves
or I have put particular pressure on anybody to sell

them, because I think we thought we would save that
for June and July when we needed the money to make the

quota; but this is the fifth of June and we haven't
gotten off to a very good start so far in June on our
sales in relation to what we need.

Now, there has been an awful lot of argument back

and forth as to who is going to have the responsibility
to sell them, but we felt here that it has taken us
almost a year and a half to build up this organization.

I have got confidence in it, and I think, if given the

proper help, that you men can give us what we need, and

10

-2we thought we would have a meeting-first with me. I

take it you know what it is all about. I would just

like to go around the room and hear from each of you
as to what you think you can do and what you think

of this suggestion, which I take it Mr. Graves has laid
before you. I think if we just go around and you tell

me whether you think you can make it or you can't make

it in June - you see, a lot of people in this town, for

one reason or another, hope we are not going to make it.

They have got their own selfish reasons, but I think with

enough push and help - we have got all these people that
want to get in and help us sell F and G Bonds, and I

think the thing to do is to take advantage of their offer.
MR. COLLINS: I will make the quota in June, and
the War Savings Staff and the Federal Reserve Bank are

in perfect accord. We have already called in our various

committee members for the Victory Fund, as well as appointing a committee for the F and G's. We have already discussed our county organization and the two chairmen of the
F and G and the Victory Fund are in accord, so that we
are working perfectly and in perfect cooperation wi th the

Fed. I am sure I will be all right, Mr. Secretary.

H.M.JR: Well, let me ask you this, because the

statement that I have heard, not in relation to Illinois,
but the criticism is that you have tried to sort of

fight for the same men. Now, how are you divided up
in Illinois between yourselves, the Federal Reserve and
the Victory Fund Committee on the F and G? Where do
you draw the line?
MR. COLLINS: Well, Mr. Young, president of the
Federal Reserve Bank, has appointed his committee, and
he consulted me in appointing that committee. Then
Mr. Young and I discussed the F and G committee, and in

perfect accord we decided on a man who would organize
our chicago and Cook County committee; and then between
Mr. Young and myself we decided how we are going to
operate through the county, and we have men on each

committee. They are intermingling, but it is perfectly

understood that one man on the F and G reports directly
to me and has full charge of F and G over and against the

Victory Fund Committee.

11

-3H.M.JR: Does the man who is in charge of F and
G - does he have to be on the Victory Fund Committee?
MR. COLLINS: He is on the Victory Fund Committee.

H.M.JR: What position does he hold?
MR. COLLINS: Just a member.

H.M.JR: He isn't their-MR. COLLINS: He isn't their chairman or executive
manager.

H.M.JR: He is not?
MR. COLLINS: No, sir. Our man is Mr. Whipple.
H.M.JR: He is the best man?
MR. COLLINS: I think so.

H.M.JR: Do you think he is as good as the executive

manager of the Victory Fund?

MR. COLLINS: Yes, I do. He has been quite active

in our organization in the past with the investment

bankers.

H.M.JR: I see.
MR. COLLINS: Very good man, very cooperative.

H.M.JR: But you think you will get the results?
MR. COLLINS: I think we will, yes, sir, and

they are cooperating very well.

H.M.JR: Are you satisfied with the setup?
MR. GRAVES: With Illinois there has never been any
change. Mr. Young, the president of the Federal Reserve,
and Mr. Collins have always worked in complete harmony

in relation with the setup.

12

-4H.M.JR:

But you are satisfied?

MR. GRAVES: Perfectly.

H.M.JR: Harold, have you told the people of this

readjustment on the eight hundred million?

MR. GRAVES: I have told them. I told them we had

to sell three hundred fifty million dollars of F and G

Bonds in June if we are to make our June quota. They

all know that and know, I think, their respective shares
in that job.
H.M.JR: They know about the shift, about expecting

more F and G's?

MR. GRAVES: That is right.

H.M.JR: And take all the E's you can get.
MR. GRAVES: Yes, they know.

MR. LUDLOW: Mr. Secretary, for Pennsylvania, without
setting up a special F and G top committee, in May on

our fifty-four million dollar quota we reached thirtynine percent in F and G. Those are the actual figures.
H.M.JR: Thirty-nine?
MR. LUDLOW: Thirty-nine percent, just under forty

percent, which I think is pretty close to the National
average of F and G two months ago. I don't know what
it was a month before that. After the Victory Fund
Committee was appointed, Dr. Williams, the President

of the Philadelphia Federal Reserve, sent for me. He

was working under the misapprehension that they were

to begin by largely selling the F and G and gradually
take it out of our county committees and end up by our

having only the E Bonds.

I immediately sent word to Mr. Graves that that would
entirely disrupt our sixty-seven county organizations,

13

-5that we can't work all for E and let the F and G go to

a new group. We have built up an organization and
under the plan submitted this morning we can work

admirably if Dr. Williams understands that that is the
way that they are to do.
(Mr. Pulliam entered the conference.)
MR. LUDLOW: Of the million of the three hundred and

fifty for June, I am sure that Pennsylvania under the
proposed plan can make its very full share - no doubt
of it, but not if they break our committees down and
give us simply the E and pass the F and G to some new

group.

H.M.JR: You have seen this draft?

of it.

MR. LUDLOW: Yes, and we are very much in favor

H.M.JR: That is all right.
MR. LUDLOW: It is quite workable and I know if

Dr. Williams is told that that is the understanding

of the Department - the man he has brought in, Bendere,

as his special assistant, will do a magnificent job
with us. As 1 understand, we are responsible for

the quota and therefore I want my county chairmen to

be responsible. I am going to set up in each county

a special F and G committee, the head of which can be
chosen by Dr. Williams and myself working together.

That is our understanding of the plan, and it is a very

workable plan.

H.M.JR: The thing that I want in each county or
each locality is the best man, irrespective of his
tag. I don't care who he is. He might be a lawyer

or a doctor.

MR. LUDLOW: In many cases he will not be a banker
in Pennsylvania.

14

-6H.M.JR: But whoever the best man is, with no

tag on him, I want him to work for us. See? I mean,
I don't care - he might be a lavyer; he might be a doctor,
or he might be anything.

MR. COLLINS: In smaller counties where we have a
other

particularly professions is outstanding all-commanding, citizen he whose might word be the to

very

desirable man in that county. I have such in mind.

H.M.JR: Now, Harold, is that all right with you?
MR. GRAVES: Yes, it is.

H.M.JR: You are satisfied?
MR. GRAVES: You notice the qualification; he says

if Mr. Williams will accept this program that it will

work.

H.M.JR: Mr. William's capacity is my fiscal agent;

he will accept it.

MR. LUDLOW: That makes it a very workable thing in
Pennsylvania

H.M.JR: He will. He is there as my hired man.

I mean, I don't know whether you gentlemen know, but

we pay pretty nearly two-thirds of their expenses. I
don't know whether you know that or not. Isn't it
something like that?

MR. GRAVES: Yes.

H.M.JR: I think for the Federal Reserve Banks that
we pay pretty nearly - what we pay the Federal Reserve
Banks makes a difference of profit and loss. It makes

a difference of about - I may be a little wrong, but it
is somewhere in there. I think we pay about two-thirds
of the expenses. The only work they have got, practically,
is Treasury work. I mean, it has been that way for a

-7 -

15

long time. They now do some other work, but for a long
time-

Now, how about Massachusetts?

MR. DOHERTY: Mr. Secretary, up until now our F and
G program has been worked out under the auspices of the
Massachusetts Bankers' Association, with a chairman

in each one of the fifteen clearing-house districts,

and the liaison between my office and the Federal Reserve
hasn't been, probably, as good as it might be.

We haven't exerted any particular pressure up until
lately on the sale of F and G Bonds, except locally on
the part of organizations and municipalities.
H.M.JR: Excuse me - did you say if Williams accepts
this thing, Pennsylvania will give me the quota?
MR. LUDLOW: Absolutely - no doubt.
H.M.JR: Excuse me.

MR. DOHERTY: I think under the proposed setup that
I would have to revamp my plans, but the question was

raised on the occasion of Mr. Sparks' visit up there on

the twentieth of May by a number of bankers as to pressure
being exerted for accelerating the sale of F and G
Bonds; and I thought it was good judgment to have a
consistent statement, a resume of the contents of the

memorandum on F and G Bonds, go out under the sponsorship

of the Massachusetts Bankers' Association and that has
gone out to every bank in Massachusetts.

So I, personally, am of the opinion that in the

main the real substance for realization of these quotas
is going to come from numerous and well-developed pay-

roll allotments, and that is what we have been con-

centrating on.

H.M.JR: I don't - I mean, Massachusetts won't make
its June quota unless you sell a great many more F and G's.

16

-8MR. DOHERTY: I realize that now.

H.M.JR: Mind you, it is the E's that we want and
we want it from the pay-roll allotment plan. That is
what we want, but towards the public, so that they won't
condemn the whole thing, I have got to get this F and
money. Now, there is a little hokum in the thing, and
G

I realize it, but until this organization can get going

and go through this mass of details to get the factories
to put in the plan to become issuing agents, and all the

rest of that stuff which takes so much time - until this
thing can get rolling, we have got to put the pressure
on the F and G and make up that which we may not get. And
another thing, I realize perfectly well there is all this
controversy in the papers about this tax bill; until that
is passed, our job is doubly hard.

MR. DOHERTY: There is no question but that publicity

is a detriment in the installation of pay-roll allotment
plans. I have found repeatedly--

H.M.JR: How are you as of ten-fifteen this morning

on your June quota?
MR.

DOHERTY: That I don't know.

H.M.JR: Not going to make any promises?
MR. DO HERTY: You mean promises for the realization

of the June quota? I don't see any reason why we shouldn't
make it because we have got the ability to make it.
H.M.JR: Are you going to?
MR. DOHERTY: I would say we ought to.

H.M.JR: Is this arrangement now all right, I mean,

this on F and G's?

MR. DOHERTY: Yes, I have read and discussed the

outline of organization. I think it is feasible and

workable and practical in every way.

17

-9-

H.M.JR: But you have got to make some changes?
MR. DOHERTY: Yes.

H.M.JR: O.K.
MR. MOORE: Mr. Secretary, I can't "commit Ohio so

strongly to make its June quota. I don't believe we
could make it without the extra support of F and G,

but so far as the new plan of the Federal Reserve
pumping up the F and G Bonds I think that would help
very much and we will find no difficulty whatsoever

in getting cooperation in getting it.

H.M.JR: How is your man in Cleveland in the

Federal Reserve?

MR. MOORE: He is very splendid. We have without knowing of this plan, we have already subordinated

the State organization more or less to the Victory

Fund Committee.

H.M.JR: You will have to make a readjustment?
MR. MOORE: I think we will in local communities,

not so far as the State or ganization is concerned. I

don't think we will have any trouble with that at all.
H.M.JR: That means that in Ohio it will be one
way, Illinois another?
MR. GRAVES: I don't think they will be different.
He doesn't mean that they will be different. It will
be substantially the same--

H.M.JR: That is all right-MR. GRAVES:
in both Ohio and Illinois-H.M.JR: That is all right as long as they get

the results.

18

- 10 MR. MOORE: That was my point a while ago. I don't
see that it makes any practical difference who is

subordinate so far as Cleveland, Ohio, is concerned. It

may make a difference in Cincinnati or Dayton or Toledo,

but those points we will have to iron out, and I think

we can.

H.M.JR: How about Indiana?

MR. PULLIAM: I didn't - I have just read this

memorandum. The first thing that we did out there after

setting up - the first thing was the Labor Advisory

Council to make sure we had the support of organized

labor on pay-roll allotment - very successful. The

next thing was to set up, which we did in January, what

we called the Victory Sales Council. I think it is largely

the same type of thing that you are talking about here.
We have twenty-two of the leading bankers or large investment bankers in the State. Those men have been

given - every county in the State is covered by this

Sales Council. We didn't have to put very much pressure
on that sales organization for May. We knew our May
quota was in the bag without too much pressure.
Now then, they are already doing an excellent job
for us on the June quota, and I believe that supplementing

this I wouldn't like to disturb this Victory Sales Council
in Indiana, because it is really set up to do just what

you are talking about. They are charged with only one
responsibility, to sell F and G Bonds. They know every-

body in the State that can buy F and G Bonds.

H.M.JR: Well, supposing - you didn't have the
benefit of this talk with Graves and the others from
nine to ten, so I think we had better-MR. GRAVES: I think it might be well to pass Mr.

Pulliam and let me talk aside with him. As I see it,
Mr. Pulliam's problem there will be to adopt his present
setup to this proposed organization, which I have no
doubt can be easily arranged with Mr. Young. I wouldn't

19

- 11 -

anticipate any difficulty in working out an arrangement
that would save your present organization exactly as it
is.

MR. PULLIAM: If you set up another organization,
we would use the very members we have got in there. We
have got everybody in the State who is really on his

toes in this kind of a thing into this work now.

MR. GRAVES: Indiana has been ahead of the pack for

a long time on this F and G proposition. I have known
that they have a peculiar problem, and for that reason
Mr. Pulliam has always had a strong F and G organization

for the last several months, but I think it can be fit
right into this pattern without any-H.M.JR: How do you feel about your June quota?

MR. PULLIAM: We will make it without question. We
have got pledges already for F and G Bonds for better than

twelve million dollars that will be bought in June, July,

and August. This Victory Sales Council already has those
pledges. Now, that will be increased to around twenty

million by the end of this month, so there is no question
about our quota.

H.M.JR: Do you know what happened Tuesday at the

Allison plant?

MR. PULLIAM: I know all about it.
H.M.JR: What happened?

MR. PULLIAM: The company union won by a vote of

fifty-eight to thirty something and about three percent

not voting.

H.M.JR: By fifty-eight, which was fairly - was it

fairly close?

MR. PULLIAM: The CIO got thirty-eight percent,

20
- 12 -

and the company union fifty-eight or fifty-nine, and
I think that would leave about three or four percent

not voting at all. The participation there on pay-roll
allotment there is a hundred percent now, and they are

bringing it up. They have got the thing organized;
about five hundred workers in the plant are soliciting
the employees, to bring their pay-roll allotment up to ten
percent.

H.M.JR: It is working all right?
MR. PULLIAM: I think it is going to work very
nicely. This labor situation had something to do with

holding back until after it was out of the way. It
hasn't affected their participation, but it has affected
the drive to get it up to ten percent.
H.M.JR: Those men must be getting pretty high
pay.

MR. PULLIAM: Very high pays and the CIO leadership

is not bitter over this thing. They are going to go along
with us. After the election was over I got hold of the
CIO leaders, and they said they weren't going to hold

back, that they would go ahead the same as though they
had won the election.
H.M.JR: As far as they were concerned there were no
bad feelings?
MR. PULLIAM: No.

H.M.JR: I am trying my best in our labor relations
to stay on bonds, not to get into any other angles on
labor, and there are plenty of them.
MR. PULLIAM: Our main difficulty has been the

difficulty between AF of L and CIO, our original
trouble. That is ironed out. They are working together
in fine shape.

H.M.JR: While we are on that labor thing, have
any of these AF of L field workers hit Indiana yet,

21

- 13 these organizers who are working now exclusively on the
AF of L--

MR. PULLIAM: The bond thing - I think there have

been one or two in there in the last sixty days.
H.M.JR: This would be the last week.
MR. PULLIAM: No, then there hasn't been.

H.M.JR: Maybe they haven't got there.

MR. COLLINS: I have had one in Illinois.
H.M.JR: They are supposed to be working exclusively

for us.

MR. DOHERTY: They have been in Massachusetts.

H.M.JR: Are they - I mean, as they travel around

they are supposed to confine themselves--

MR. PULLIAM: Our trouble on labor is not going to

be - bringing up to ten percent - is not going to be in
the organized labor plants; it is going to be in the unorganized labor plants.

H.M.JR: Of course that is one of the things they

keep throwing - well, we had this General Motors show

before the Ways and Means Committee. They asked Walter

Reuther, "All right, that is organized labor; what about
unorganized labor?" He said, Well, that is simple
enough. Let them join the CIO and everything will be all
right." Remember? You weren't there, were you?

MR. ISBEY: No, but I heard about it.
H.M.JR: That was his answer. Who comes next?

MR. ISBEY: We will make our quota, Mr. Secretary,
for June and July. We haven't pushed at all the F and
G Bonds because we felt we were going to need them in

22
- 14 June and July for our pay-roll - savings, to catch up.

We have good cooperation from the investment bankers
and they have one man that has been assigned to us

that is paid by them to help do the job. As far as

the Federal Reserve Banks are concerned, we are getting

along fine, complete cooperation, so there is no trouble
there.

H.M.JR: How about this plan we have drawn up?

MR. ISBEY: As long as you keep up at the top -

if you start getting the divisions in all these things,
that is where the trouble comes. You have got to
keep them together. That is fine. I say it is O.K.
We can work fine.

H.M.JR: Well, will many of the men on the Victory
Fund, do you think, be working on this?
MR. ISBEY: Right. We haven't scratched the surface

in Michigan on the F and G Bonds.

H.M.JR: You have got to begin to scratch. (Laughter)
MR. ISBEY: We will show you the results, too, and
our E Bonds, of course, are now coming strong - pay-roll
savings.

H.M.JR: Have they got all of your issuing agents?
MR. ISBEY: Yes, Ford set up a complete department.

It is a pleasure to go out there and see. They are
entitled to the Treasury flag at the Rouge plant. They
have got their ninety thousand men, and I would like
to have you come out and--

H.M.JR: You mean - I was supposed to go tomorrow

with Don Nelson, but I am not going. He invited me
to go with him and Captain Lyttelton. They are going
out to the Ford plant, but I thought I would come
sometime on Bonds.

MR. ISBEY: They asked for you, if you would present

the flag - Mr. Ford--

23

- 15 H.M.JR: Mr. Who?

MR. ISBEY: Ford.
H.M.JR: Which Ford?

MR. ISBEY: They have gone all-out for the Treasury
program.

H.M.JR: Which Ford?

MR. ISBEY: Edsel, and Harry Bennett.

H.M.JR: If these men haven't seen this thing, they
ought to see this new ruling on issuing agents that the

Comptroller General has just made, which permits these
companies to deduct as expense the cost of issuing these

bonds. For instance - even if Ford, for instance, wanted

to hire somebody to do it - if he didn't want to do it -

he could hire somebody to do it and deduct the expense and
charge it to Government contracts.

MR. ISBEY: Our problem is solved then. We can get

them all.

H.M.JR: You know about it, Mills?
MR. MILLS: Yes, sir.
H.M.JR: You ought to get-MR. MILLS: Do you want it explained, Mr. Morgenthau?

H.M.JR: Before they leave town; but they can charge

it up as an expense. With that on now, I think-MR. ISBEY: Fine, excellent.

H.M.JR: They even asked to go so far as to charge
publicity - for instance, could General Motors charge

their publicity - they said no, but they could charge

the bookkeeping and all of that as an expense and add

to the contract, everything but the publicity.

24

- 16 MR. ISBEY: Our greatest problem is solved.

H.M.JR: Everything but the publicity.
MR. ISBEY: That is fine.

H.M.JR: So, Mills, do your little job.
MR. MILLS: It is only on the cost-plus fixed-fee

contracts and the manufacturers. It doesn't extend
right down through all of the issuing agents, Mr.

Secretary. It is the larger ones and those are the

problem ones to look after.

H.M.JR: but it is particularly the Detroit and
Los Angeles, and San Diego - if that doesn't settle the
eight airplane companies in Los Angeles and San Diego

I shouldn't think anything would. Wouldn't that be
helpful in southern California?

MR. MILLS: Very, and in Washington with the Boeing

people in their middle western--

H.M.JR: It is just on the cost-plus-it?

MR. SMITH: That would help Connecticut, wouldn't

MR. MILLS: Yes, United Aircraft, probably have a
bearing on them.

MR. MANNING: In New Jersey, Mr. Secretary, we have
set up a special committee for F and G's headed by Colonel

Franklin D'Olier of the Prudential Insurance Company, and
I am certain we will have no trouble with the Federal

Reserve. We have a difficult job for June, but I am sure
we will make it. I am positive we will make the July quota.
H.M.JR: Really?
MR. MANNING: Well, we have a lot of new business

that will come in. Lifting the limitation is very, very

helpful.

- 17 -

25

H.M.JR: But your E Bond thing is rolling nicely?
MR. MANNING: E Bonds coming along very nicely and

we have, as you know, two Federal Reserve Districts in

New Jersey, and both members of the Victory Committees
are members of my committee, Mr. Corbin, in Newark, and
Mr. Archer in Camden.
.

H.M.JR: How is Curtiss-Wright in Hackensack?
MR. MANNING: Well, they have been beginning to step

up their quota very nicely the last three weeks.

H.M.JR: They must have an enormous number of employees.

MR. MANNING: Yes, they have, twenty-thousand. They

are coming along very nicely, and so is Bendix.

H.M. JR: How about some of your shipyards?
MR. MANNING: New York Shipbuilding - we have had

some difficulty with them, but they are coming along
very nicely. I think the Philadelphia Federal Reserve

people will probably tell you the difficulty in trying

to have them become issuing agents, but this information

this morning I think would clear up that, so that we

will--

H.M.JR: But this new suggestion on F and G is all
right with you?
MR. MANNING: Fine.

MR. SMITH: I think we are going to be all right,
Mr. Secretary. I think we will make our June quota; if

there is any question about it - this will be a big

boost for us if we get the proper man.
H.M.JR: If you get what?

MR. SMITH: The proper man. If the Federal Reserve
and ourselves can agree, and I don't think that there
is any doubt about it, because our State chairman is

- 18 -

26

very, very well thought of in Boston. And I think,

with the assistance of Mr. Paddock in Boston - I
don't think there is any doubt. . about it.

H.M.JR: Are you worried about June or July?
MR. SMITH: No, sir.
H.M.JR: You are not?

MR. SMITH: Not a bit, no, sir.
MR. GRAVES: These fellows are willing to let us

do all the worrying, I think. (Laughter)

H.M.JR: You tell them we do plenty.
MR. SMITH: I think, Mr. Morgenthau, if you could
come up there it would be a big help to us on the F
and G, particularly.
H.M.JR: Well-MR. SMITH: The Dawes' statement in Chicago went
right through New England.
H.M.JR: The Dawes' statement

MR. SMITH: He was willing to go along with you on
any project which you were-H.M.JR: Oh, that went back to that American Bank
in Chicago?

MR. SMITH: Chicago, yes, sir. That took all the
politics out of it, and he was very emphatic, I thought.

They publicized it all through New England.

H.M.JR: We can get plenty of Republicans to en-

dorse this thing if you want that.

MR. SMITH: Will they get out and go to work?

27

- 19 -

H.M.JR: Yes, I think if that would help you any yes, we can give you some prominent Republican speakers.
Well, what happened in New York?

MR. FORD: Dewey spoke for me two nights ago.

H.M.JR: How did that go?
MR. FORD: Very well, indeed.

H.M.JR: Nobody told me anything. Did it rain?

MR. FORD: We had bad luck. It did not rain. We
had between ten and twelve thousand people. The stadium
holds about seventeen at capacity, but that audience

stayed there from half past seven until eleven.
MR. PATTERSON: It threatened to rain.
H.M.JR: But Dewey spoke?

MR. PATTERSON: Yes, I think they will report to you

it was entirely satisfactory.

MR. FORD: Dr.Tobias expressed himself - very pleased

with it.

H.M.JR: Who? I thought you said Dr. Devine.
MR. FORD: No, we are saving that for the up-the-Hudson
meetings.

MR. SMITH: We are still using Mrs. Morgenthau's

recording in the radio stations up there.
H.M.JR: I am pleased to hear that.
MR. SMITH: Round table discussion.

H.M.JR: Didn't know there was one. But otherwise

you are all right?

28

- 20 -

MR. SMITH: I think so, yes.
MR. PATTERSON: Mr. Secretary, speaking for New
York, this memorandum is completely workable, and we

just hope that the presidents of the Federal Reserve
banks won't try to change it, because that might mean

ambiguity of responsibility and division of responsibility.
If that is the case, we would respectfully protest.
We already have our F and G committees set up. We

have fifteen of the partners of the largest investment

houses in New York who are heading up a committee of
nearly two hundred top investment bankers. They have been

working for two weeks, beginning to get our county F and
G Bond committees organiz ed.

We can work with Allan Sproul. We like him. We
trust him, and we can get along with him.
We feel, sir, that we want to have as much complete
freedom in New York as you care to give us. And so
far as New York is concerned, if we don't make good

over-all it won't be your fault. You have given us

the tools and complete cooperation. We have a man
by the name of Perry Hall who has been appointed as

the executive director of the Victory Committee there.

He hasn't appointed his committees, but we propose to

talk with him and Allan Sproul, and work this thing out.

H.M.JR: You think it is all right?
MR. PATTERSON: I do, sir.

H.M.JR: It may work out that Perry Hall would

work for both?

MR. PATTERSON: Yes, Perry Hall would be the executive

director who would work for both.

H.M.JR: You mean it might work out that way?
MR. PATTERSON: No reason why he shouldn't work

for both. He is satisfactory to us.

29

- 21 H.M.JR: Hasn't he been in charge for you since
January?

MR. PATTERSON: No, he has never - he hasn't been
in charge at all. He has been a committee member and
we have had a great many committees, but Allan Sproul

appointed Perry Hall as the executive director of
the setup and I think we can work with Arm.

H.M.JR: And how do you feel about June and July?
MR. PATTERSON: I am not 80 - I wouldn't want to

commit ourselves for June. It is easy to do that here,
but I am not going to do it. I am in hopes that we
can make our June quota if this memorandum sticks.

H.M.JR: It will stick.
MR. PATTERSON: We have nearly twenty-one percent

of the total sales in the country allocated to New York,
twenty point eight - one hundred and sixty-one - million,

seven hundred some thousand. We will put up the damnedest

fight possible to make it. We don't want to feel it is

going to be a fight because it is a good program, and

we have got, we think, the best committees in New York

State and we are just beginning to roll. I would say,
seven of our eight cylinders are functioning, and the
eighth will be in operation, we hope, without delay.

Now, I repeat, with this memorandum sticking, I am
in hopes, Mr. Secretary, that we can make our quota.
H.M.JR: Do you want to add anything?

MR. FORD: I don't think there is anything to add.

I just say the reverse of what Dick said. If we can't
have this F and G Bond I know we can't make our quota.

That is just impossible, because it isn't possible to

get the amount of money that has been allocated to us

out of pay-roll sales in New York State. It just isn't
there. We have got to get the majority, and I think
more than we have been counting on, out of the F and G
Bond sales; so this is life and death to us, this discussion, pretty much.

30

- 22 -

H.M.JR: It is?
MR. FORD: I think so.
H.M.JR: Ted, do you want to say something?

MR. GAMBLE: I would only like to say, Mr. Secretary,

that I think this report tells you that these gentlemen

have done some work on F and G's prior to this meeting.

I think they are very understanding of this whole problem,
and I think you have gathered from them the willingness
to avail themselves of every possible piece of talent in
these States. I think this memorandum has defined and
made it possible for them to do that and yet stay on

top, which they must be able to do if it is going to work.
H.M.JR: Harold, have you got any after-thoughts?
GRAVES: I don't believe so.
MR.

31

June 4, 1942.
MEMORANDUM FOR UNDER SECRETARY BELL:

As a guide to our discussions tonorrow with State

Administrators and the Federal Reserve Bank people, I
suggest that we submit the following arrangements and
procedure for promoting the sale of F and G Bonds.
This represents my understanding of, or at any rate

is consistent with, the instructions given us yester-

day by the Secretary.

1.--The State and local organizations of the War
Savings Staff will be held primarily responsible for
the sale of F and G Bonds. At the same tine, however,
these organizations will be expected to take advantage
of the facilities which have been tendered by the

Federal Reserve Banks, including, among other things,
the services of members of the Victory Fund Committees

as individuals, to the extent that the State Adminis-

trators (or Chairmen) may consider that such services
will be helpful in increasing the volume of F and G
Bond sales.

2.--In instances where the State Administrators
(or Chairmen) consider it practical to do so, and
especially in States in which a substantial volume
of F and G Bond sales is to be anticipated, the State
Administrators (or Chairmen) will invite the President
of the Federal Reserve Bank for the District in which
the State Headquarters of the War Savings Staff is
located, to serve as Chairman of a special F and G
Bond Group, whose function it will be to supervise
the promotion of F and C Bond sales throughout the

State as a whole. This Group will perform its functions
as an adjunct of the State organization of the War

32

Mr. Bell-2.
Savings Staff. The President of the Federal Reserve Bank
will be expected in any such case to deputize a subordinate

officer to represent him in the performance of his duties

as Chairman of this Group.

3.--The Chairman of the F and G Bond Group in each

State in which this arrangement is adopted, in collaboration with the State Administrator (or Chairman), will be

charged with the responsibility of selecting qualified

persons in each county or community of the State to pronote F and G Bond sales in such county or community.

The persons so selected will constitute a special F

and G Bond Group for the county or community concerned,

and they will perform their duties as a part of the

activities of the regularly-established War Savings Committee for that county or community. The Chairman of
the State F and G Bond Group will, however, be authorized to communicate directly with the members of the
F and G Bond Groups in the several counties or other

local communities with reference to matters within the
Group's jurisdiction.
1.--The use of the Victory Fund Committee as such
is not contemplated by the foregoing, and the persons
to be employed as members of, or workers under, the
State and county F and G Bond Groups referred to, will

be selected with regard only to their qualifications

for employment in promoting the sale of F and G Bonds
and without regard to whether they are or are not
members of the Victory Fund Committee.

5.--The arrangements here outlined will be undertaken subject to the understanding that no administrative expenses will be incurred by State or local F and

G Bond Groups as a charge against the Treasury Depart-

ment except with the prior approval of the State Administrators (or Chairmen) of the War Savings Staff
and the Executive Director, War Savings Staff, Washington, D. C.

Harold N. Graves
HNG/mff

Assistant to the Secretary.

33
June 5, 1942
11:35 a.m.
WAR BONDS

Present:

Mr. Graves

Mr. Bell
Mr. Buffington
Mr. Eccles

Mr. Gamble

Mr. Mills

Mr. Bryce

Mr. Isbey
Mr. Doherty

Mr. Collins

Mr. Moore
Mr. Manning

Mr. Patterson
Mr. Ford
Mr. Ludlow
Mr. Carstens

Mr. Pulliam
Mr. Smith
Mr. Sproul
Mr. Williams
Mr. Paddock
Mr. Young
Mr. Wagner

Mr. Fleming
Mrs. Klotz

H.M.JR: Well now, we had this meeting, gentlemen,
with the presidents of the Federal Reserve Banks, with

Mr. Eccles acting as liaison. They feel that they don't
want anything in writing; they don't want anything
formal on it. They don't want any Washington, in other

words, and I don't blame them.

But this is the agreement that we have come to,
that I say to you gentlemen who are chairmen of the
War Bond committees in each State, "Would you, Mr. X,

34

-2-

please go to the president of the Federal Reserve Bank

of your district and say to him, 'Bill, I want to go

into your office and sit down and lock the door, and I
want you to help me put across this F and G quota in

my State. I want you to give me all the help that I
can get.

If each of you State chairmen will go to wherever
your president of the Federal Reserve Bank is and ask

him to give you that kind of help, in the way of selling
help, each of these presidents of the banks - and it has
the entire approval of Mr. Eccles - has agreed that they
will give you their enthusiastic help and backing.
Now, the representative for the presidents of the
banks is Mr. Sproul, and he can say his piece, what you
are ready to do.

MR. SPROUL: I think you have said it, Mr. Secretary.

You asked the presidents of the Federal Reserve Banks in

their capacities as fiscal agents of the Treasury and as
chairmen of the Victory Fund Committees in their districts
to give all the help they can to the War State Savings
Bond organizations. You asked the War State Savings

Bond organizations to get in touch with us and to see
how that help can best be given. We sit down with them
in our respective districts and work out whatever plans
we can to give them all the help we can in selling F
and G Bonds under their June and subsequent quota
arrangements.

H.M.JR: Is that the way you understand it?
MR. ECCLES: That is t he way I understand it.

H.M.JR: Is that agreeable to you?
MR. ECCLES: Perfectly.

H.M.JR: There is nothing in writing, simply
verbal; no titles, no names, no nothing, but plenty
of good will.

35

3Now, does any State chairman not understand this,
or is any State chairman not entirely agreeable to work
on this basis?
MR. LUDLOW: Mr. Secretary, I both understand it,

and I am agreeable to it. I still want to know whether
in a State like ours where Dr. Williams has the Philadelphia Reserve and has the Cleveland Reserve, whether

I go to him for help through the whole State or only
his part of the State.

H.M.JR: I tell you what you do, you flip a coin.
that.

MR. LUDLOW: I would lose with him every time on
MR. ECCLES: We have that situation in a good number

of States, and I would think you would have to go - the

western part of Pennsylvania would go to Cleveland and

the eastern part would go to Philadelphia.

H.M.JR: What I was going to say was flip a coin

as to which Federal Reserve Bank chairman you see first.

Now, let's take plenty of time. Any other State

chairman that wants to ask a question?

This all, gentlemen, instead of having anything

in writing, gets to the matter of good will. These
State chairmen tell me they will give you all the time,
all the help at their disposal, to help put across
this June quota. See? So it just gets down to human
beings and the question of good will.

I don't want anybody to go out of this room wi th

any doubt in his mind as far as War Bonds are concerned.
MR. PULLIAM: Mr. Secretary, may I*ask what is

the specific function of the Victory Fund Committee
setup of the Federal Reserve organization, as far as
each State is concerned?

36

-4-

H.M.JR: As they say on these over-the-air forums,

that is a very good question. I will try to answer it.
The function of the Victory Fund Committee is this,
in the language we use - I think we use larger financing-MR. GRAVES: Larger investors.

H.M.JR: I have to raise, as I told you gentlemen

earlier, beginning with the first of July, four and a

half billion dollars in new money each month; and on
the assumption and hope and belief that you gentlemen

will do a billion, it leaves three and a half billion
dollars that somebody has got to sell.

Now, in our efforts to sell that - you may remember

the Federal Reserve Banks never were equipped to sell

securities, and under the SEC Act of '34, I believe,
or '33, the selling of securities was separated from

banks. So we face a situation where we want salesmen
who know how to sell securities, regular Treasury

securities. We don't think of it as blocks of ten
thousand dollars or over, but usually in blocks of a
million dollars or over.

What we want is these trained salesmen - and they

sought me out; I didn't seek them. They said, "What
can we do to help?" I need all kinds of help, and they
are going to help me on what I call the regular Treasury

financing, which will go largely to banks and institutions, insurance companies, and so forth and so on.
Does that answer your question?

MR. PULLIAM: It answers it up to a point. The
question has been raised frequently in the last two

weeks. We have a Victory Sales Council in Indiana.
The impression has gained headway very rapidly in the
last few days that the investment bankers are going

37

-5-

to receive some sort of a small token commission on the
sale of Government securities other than F and G's

That question, I think, if it is possible, should be
settled one way or the other. In other words, if it
is possible to have you answer that - that is the
question that is raised every day.

H.M.JR: Well, I have had the heads of various
securities organizations in here several times, and

they have never asked for any compensation. They are

here as representatives for these various organizations. Mr. Bryce is here as a volunteer representative,
and they have never asked to be compensated. So I think
that is the answer.
MR. BRYCE: Who is the head of your F and G's,

Ed Wuensch?

MR. PULLIAM: No, Mr. Peterson is the head.
MR. BRYCE: You get hold of Wuensch and he will

straighten you out.

MR. PULLIAM: The investment people are against

the commission idea in Indiana, but they are still

inclined to believe, because of this New York meeting,

that there is going to be something of that kind. If
the answer is no--

MR. BRYCE: I was in the New York meeting, and that

wasn't touched on at all. They got the wrong impression

over a highball in the cocktail room, or something. It
is true in the Victory Fund setup there are certain men

in the Federal Reserve district that will be paid,
executive managers.

MR. PULLIAM: But that is not a commission.
MR. BRYCE: No, but they have a few paid men, one

in each district, and three or four on a voluntary
basis.

38
6-

MR. PULLIAM: That is the way to do it.
MR. BRYCE: As they organize the Victory Fund
Committee and take on the job. the Secretary talked
about, through the Federal Reserve Bank on a reimbursable basis their expenses will be compensated.

H.M.JR: Harold, are you satisfied?
MR. GRAVES: Yes.

MR. BRYCE: There is no commission involved in
it whatsoever.

H.M.JR: Sproul, are you satisfied?
MR. SPROUL: Yes.
MR. ECCLES: Yes.

H.M.JR: Ted?
MR. GAMBLE: Yes.

H.M.JR: Now, any other questions? If there are

no other questions - a number of you State chairmen are
here and a number of the Federal Reserve Bank presidents

are here, and I would tackle them now. I wouldn't lose
any chance. They are all in a good humor and full of

Washington fresh air.

May I just say this. I don't underestimate the
job. A lot of you people are giving your time for
nothing, and this is a terribly big job. Now, in my
job even if I wanted to fool anybody I couldn't fool
anybody. We get out a daily statement every night;

we show just what we sell. It can't be like the

question of rubber shortage - I mean, you can't do
that in the Treasury - I mean, they know every night
just how much we have sold. As I say, even if we want
to fool them we can't.

39

-7-

So we have got an extra tough job, and I like to

continue to feel - the President feels this is one
thing he hasn't had to worry about yet, that is, is he

going to get the money to pay for the guns and the ships
and planes; and with the help of you gentlemen and the
good will everybody has expressed I feel that I can
continue to tell him that he won't have to worry about
the money for the guns and the ships and the planes.
I appreciate your coming down here, and I am going

to be like some of these State chairmen. I am going to
stop worrying. (Laughter)
MR. ECCLES: You should.

H.M.JR: Thank you all.

40
June 5, 1942
11:53 a.m.
HMJr:

Hello.

Operator:

All right.

HMJr:

Hello.

Ronald
Ransom:

First, I hope you enjoyed "Candida" Monday night as
much as I did.

HMJr:

Yes, it was fine.
That was a magnificent coming-in scene. Henry, I
have this pretty constant question that comes up
in connection with our effort to make people pay
personal debts and stay out of debt.

R:

HMJr:
R:

Uh, huh.

The question of listing the relative importance of
the means of absorbing consumer income is rather easy,
of course taxation is the principal and most important

one. Then the question of buying War Bonds and paying
personal debts

HMJr:
R:

Yeah.

fall along behind that. I would like to follow
your own personal preference. As far as I'm concerned,
I - I would like to say in two or three talks that I've
got to make to registrant groups, that the payment of
personal debt at this time out of current income is
serving the national purpose as is the purchasing of
War Bonds.

HMJr:

Well, look, do you mind doing this?

R:

Yeah?

HMJr:

Just because, I - I just got through an awful tough
meeting and I'm not sure whether I'm clicking.

R:

Yeah?

HMJr:

If you've got something like that, write it out

R:

Yes?

HMJr:

..... and if you didn't mind sending it over to

Ferdinand Kuhn, K-u-h-n

41

-2Yes.

R:

HMJr:

And let - let Ferdie look at it.

R:

Yes.

HMJr:

He lives and breathes this all day long

R:

Yes.

HMJr:

R:

and I might say something to you now that
was out of tune.

All right.

R:

So, if that isn't asking too much?
Not at all.

HMJr:

Well, if you were going to make a speech or something

R:

Yeah?

HMJr:

And, ah, Ferdie will drop over and see you - ask him

R:

Well, I'll - well, I'll do this, if it suits you,

HMJr:

to come over and see you.

when I get this damn speech drafted, I'll send him a
copy of it and ask him to take a look at it and see
that it doesn't - cross up with any campaign you
people have on hand.

HMJr:

Well, it's terribly nice of you calling me, and I

R:

Yes. One other thing - on the radio last night I

appreciate it.

heard a young girl make a suggestion that - of course,
it might not have come to your attention - she said
that she had been selling War Bonds and doing well,

but that she'd do better if the slogan was, "Invest

HMJr:

in War Bonds", not, "Buy War Bonds".
I see.

R:

I was afraid that you might miss that one.

HMJr:

That's a good idea.

R:

Okay.

HMJr:

Thank-you.

R:

Good-bye.

cc - Mr. Sullivan

42

June 5, 1942
11:58 a.m.
HMJr:

Hello.

Operator:

Senator Maybank.

HMJr:

Hello.

Operator:

Go ahead.

HMJr:

Hello.

Senator
Maybank:

Hello, Mr. Secretary.

HMJr:

How are you, Senator?

M:

I'm sorry I missed your call yesterday, and
this morning I've been over in Appropriation
meeting.

HMJr:
M:

Yeah.

What I called you up about yesterday, I was
just merely making observation so to speak

HMJr:

Please.

M:

Dick Russell and myself have got a little bill

that we might introduce on Monday to the effect
that through the Treasury of the United States,
these states that are on gasoline rationing

be reimbursed by the loss of state taxes. Of

course, that would take a great deal of money,

but what our real idea is is to - if this
gasoline rationing is to get as serious in
the Seaboard States as we re led to believe,
and it's not going to be put into effect in

the other parts of the country, what we really
want to do is to protect our bond finances.
Of course, any new road construction or any-

thing like that is out of the question.

HMJr:

Yeah.

M:

But we did believe that the Federal Government,

through rationing and through the necessity of

43
2

rationing, all of which we have no complaint
against and want to help with in every way we
can if it's necessary on account of transportation, but then at least our bonded - bonds
and reimbursements be protected, because if
they shouldn't be protected and something should
go wrong, it would merely hurt all the other
bonds in the state and would merely hurt all
the sale of War Savings Stamps and everything
HMJr:

M:

else. That was just the general
Well, what you're raising - of course, you
realize - is a very important question.

Yeah. Well, of course, if the national gasoline rationing goes in, why we'd just forget
about the thing.

HMJr:

M:

HMJr:

What I'd like to do is this. Do you know John
Sullivan, Assistant Secretary of the Treasury?
I think I've met him.
Now could I ask - could you and Dick Russell
see him any time today and let him talk to

you about this? I'd like him to talk to you.
What time would you like to see him?

M:

Well, now, the only thought is, I just left
Dick Russell over there. He's Chairman of

this Free Conference Committee on Agriculture

HMJr:

Well, I mean, when

and Appropriations, and they're having

M:

quite a
HMJr:

Well, when - well, when would you - when would

it be all right

M:

Well, now, any time this afternoon would suit

me all right. I don't know what time would suit

Mr. Russell though.
HMJr:

Well

M:

Could he call Mr. Russell up and tell him that

44

-3any time would be agreeable to me?
HMJr:
M:

HMJr:
M:

I'll have him call up Senator Russell.
Yeah. Any time that Senator Russell says is
agreeable to him is agreeable to me, this afternoon, after two o'clock.
I'11 do that.
I slipped over here from Appropriations Com-

mittee. I'm going on back over there directly,
but I know we'll be through by two.

HMJr:

Thank you so much.

M:

Thank you, Mr. Secretary.

45
June 5, 1942
12:01 p.m.
John

Sullivan:

HMJr:

Yes, Mr. Secretary.
I talked with Senator Maybank of South Carolina.
fifteen minutes.

You'll have a copy of it within the next ten or
Yes, sir.

S:

HMJr:

If I understand it - I may not understand it

correctly - but they want some kind of a refund
to the States on what they lose in the gasoline
tax through rationing. That's what I understood,

you see.
S:

HMJr:

Yes.

I might not have understood it correctly. But

anyway, he - I suggested that you could see him
and Dick Russell, SO he said if you would call

uo Senator Russell's office, of Georgia, and say
that any - that Senator Maybank said he's available
any time after two o'clock, that Senator Russell
is available. See?

S:

Yes.

HMJr:

And that you would go up and see the two of them

S:

Yes, sir.

HMJr:

Can you do that?

S:

Why certainly, sir.

HMJr:

Because this is something which certainly both

wherever it's convenient for both of them.

Nelson and Henderson ought to know about, and,

of course, it's the most - if I understand it,
it'11 be the most terrific raid on the Treasury.

S:

Oh, there's no doubt about that.

HMJr:

I mean, we just couldn't stand for anything like
that.

S:

Oh, no.

46

-2HMJr:

But can I leave it in your hands?

Yes, sir. And I won't have an opportunity to
speak to you, probably, after you get out of

S:

Cabinet. will you want me to acquaint Leon
and Nelson with this matter?

HMJr:

Yes. If you please.

S:

I will. Now

HMJr:

After you've - I'd see Russell and Maybank

S:

Oh, yes.

HMJr:

S:

HMJr:

first

and get the story right. I may not have

it right.
Yes. Well, I won't call Russell until I get
the transcript of your conversation.
That's right.

S:

Now, I have seen Doughton and George.

HMJr:

Yeah. What did they say?

S:

And they were opposed to giving the names out,

HMJr:

Yeah.

S:

HMJr:
S:

and as a result of those conversations, I have
written for your signature
a letter which describes our meeting with
the Joint Committee, and their consideration as
to whether or not at a later time they would
give out the information.
Right.

Then I say that section 55 of the Code rigidly

prescribes the committees to which the Treasury
can divulge any data.
HMJr:

That's right.

47

-3 S:

And that his committee is not one of those
we're authorized to give the information to;

but inasmuch as the Joint Committee on Internal
Revenue Taxation possesses the authority to

give it to them, I refer them to Doughton.

HMJr:

Good.

S:

Now, both Doughton and George agreed with that.

HMJr:

Good.

S:

And
I - shall I send this in for your signature
now?

HMJr:
S:

If you'd send it in right now, I could sign it.
I'11 send it right in right away. And then I'11

be back from Russell and Maybank by the time you
HMJr:

get out if you want to hear anything about it.
Well, I don't.

S:

But I doubt

HMJr:

Well, it's one of those things. They're just
feeling us out.

S:

HMJr:

S:

Right. Well, I hope you have a very good holiday.
Thank you. And, John, if you give this to Stephens,

or have your girl give it to Stephens, I can sign
it right now.
I'11 send it in this minute.

HMJr:

What a time I had yesterday!

S:

Well, incidentally, Mr. Doughton spoke about that
this morning.

HMJr:
S:

Yeah. What did he say?

And he wanted me to tell you that he was - the
quotation was, "wonderfully pleased", and in fact,

he used it twice, and he wanted to tell you (talks aside) this goes right in to Lieutenant

Stephens right away - and he wanted me to tell

48
4-

you that he thought you handled yourself extremely well.

HMJr:

Thank you.

That he thought that the committee would insist
that Boehne call in the offending newspaperman
and really give it to him, and he thought that
you should do the same thing.

S:

HMJr:

(Laughe) Well, I'm not going to call in any -

as far as I'm concerned, it's a closed book.

S:

Well, I drove Doc Crowther down.

HMJr:

Yeah.

S:

Crowther was waiting for a cab, and I saw him

and I picked him up and drove him back down.

That was this morning early. I went up to
see Doughton.

HMJr:
S:

Yeah.

And Crowther said he thought it was the most
ridiculous performance yesterday, having you
come up there, a busy man, wasting your time

on a thing like that, that he'd seen since he'd
been in Congress.

HMJr:
S:

Well, Crowther was helpful, incidentally.
Yes. I'm awfully sorry he's leaving that committee.

HMJr:

Righto.

S:

Have a good time, sir.

HMJr:

Thank you.

S:

All right.

(Long-distance call from St. Louis)
49
June 5, 1942
12:13 p.m.
HMJr:

Mayor

Hello, Mayor Becker.

Becker:

Yes, Mr. Secretary. How are you?

HMJr:

I'm fine. How are you?

B:

I've been trying to get hold of you. I wanted

to report to you on what our plans are here on
the 29th, and hope you might be able to come.

On the 29th here, they're having a very large
luncheon, at which we will have representatives
from all over the United States at that National
Display Men's Association.

HMJr:
B:

Yeah.

And in the evening we thought that it would be
wonderful for you to come and attend our opera.

You know we have nine thousand and ten thousand

HMJr:
B:

people a night at this Municipal Opera of ours.
I was there in '33.
Well - in '33. Fine. We want you to come, and
if there'd be any possible chance for you to
come on the 29th, we'd like to have you at the
luncheon, make a little talk, and then in the
evening go to the opera. You see?

HMJr:
B:

HMJr:

Well, Mayor

At the opera, merely introduce you so that the
audience would know that you're there, and you
could make a talk for a minute or two, you see.

Well, it's terribly nice of you, and I feel

honored that you want me; but the way it is
now, I'm not making any speaking dates for the
time being.

B:

I see.

HMJr:

I just can't do it. I mean, the job here in

Washington has just got me swamped.

50

-2B:

Well, I imagine it would be.

HMJr:

And I haven't now for some time accepted any

B:

Yeah.

HMJr:

But I do appreciate it, and I want to thank you

speaking dates. I occasionally talk on the
radio, but I can do that from my desk.

80 much, and I hope some other time I'11 be able
to accept.

B:

HMJr:
B:

Fine. I wanted to speak to you on your other
matter, the one regarding the heroes.
Yes.

We've got everything under way here, already
lined up in good shape, and everything's set
to go.

HMJr:
B:

HMJr:
B:

HMJr:

Well, that's wonderful.

Thank you for calling me. I tried to get you,

and I

Well, I was up on the Hill testifying yesterday.
I know the Jam, and I'm sorry to have to bother
you personally. I know how busy you are.
No, I'm always glad, and I'm indebted to you for
what you're doing to help us.

B:

Well, fine. Thank you.

HMJr:

Thank you very much.

cc - Mr. Thompson

51

June 5, 1942
3:42 p.m.
HMJr:

Hello.

Operator:

Senator Glass.

HMJr:

Hello.

Senator
Glass:

Mr. Secretary?

HMJr:

Yes, this is Henry talking.

G:

This is Carter Glass.

HMJr:

How are you, sir?

G:

I'm fairly well. Mr. Secretary

HMJr:

Yes, sir.

G:

So many years ago that I hate to mention it,
I appointed Sam Brame in the Revenue Office
in Richmond.

HMJr:

Yes.

G:

He'll be seventy years old the first of August.

HMJr:

Yes.

G:

He's infinitely capable

HMJr:

Yes.

G:

and young for his age - very young for his
age - and I would like very much to have him
continue.

HMJr:

G:

HMJr:

Well, I'll ask the President to do it, and I'll
recommend it. I'11 be very glad to.
Well, that's very good of you.

I unhesitatingly - I think this is the first
thing you've ever asked of me, and I'11 un-

hesitatingly do it.

52

-2G:

Well, that's very good of you. Brame is - he's
a fine man, a fine character, fine intelligence,
and has made, I think you '11 find, a splendid

official.

HMJr:
G:

HMJr:
G:

HMJr:

Well, that's enough for me that you say so.
And he's really young - infinitely younger than
his years would indicate.

Well, if he's as young as you are, he's all right.
(Laughs) Well, he's much younger.
Well, he must be almost at his mother's breast.

G:

(Laughs) Well, thank you very much, Mr. Secretary.

HMJr:

All right. Good-bye.

G:

Good-bye

53

June 5, 1942
3:50 p.m.

GROUP

Present:

Mr. Bell
Mr. Buffington
Mr. Sullivan
Mr. White
Mr. Foley
Mr. Blough

Mr. Kuhn
Mr. Gamble
Mr. Haas
Mr. Schwarz

Mr. Paul

Mr. Thompson

Mrs. Klotz

H.M.JR: This is just sort of a friendly-like

meeting - no business. I hope to leave in about five

minutes.

MR. BELL: A good-by meeting.

MR. WHITE: If this (indicating papers) isn't

business, it goes under the name of something else.
(Laughter)

H.M.JR: I said friendly-like, and I will read

your memorandum. You see that I have got a clean desk.

I have got a satchel this big full of papers. I hope
to bring them back--

MR. BELL: The same way? (Laughter)

H.M.JR: We really had a good meeting this morning,

after three days' sweating, on this F and G. Don't you
think so, Dan?

54

-2-

MR. BELL: Very good.
H.M.JR: The boys made me sweat.

That is about all I have got. The President asked
me to keep a plane up there all the time so I can come
down--

MR. SULLIVAN: That puts us all at ease, Mr.
Secretary. (Laughter)
MR. BELL: How long does it take to get down?
H.M.JR: An hour and twenty minutes.
MR. BELL: Stay within an hour and twenty minutes

of the Treasury. (Laughter)

MRS. KLOTZ: Don't go too far away.

H.M.JR: I think I wouldn't be more than three
hours away without checking in on the phone. I mean,
the President has only asked me to do that once before.
MR. SULLIVAN: Chick and I were going to Chicago

next week end.

MR. SCHWARZ: Friday.

H.M.JR: I think what he has in mind is this battle
which is evidently going on right now.
MR. SULLIVAN: We were leaving Friday night.

H.M.JR: I mean, with Bell here and Norman, I would
keep in touch with them. I mean, so if something happens,
you know, Bell, so there will always be somebody around.
MR. BELL: Yes.

H.M.JR: To take care of Harry White in case of

emergency. (Laughter)

55

-3MR. WHITE: I will be within three hours, but not

much closer.

H.M.JR: I guess that is about all. Got some stuff?
MR. WHITE: Just two things, very quickly-H.M.JR: You can ride over with me to the airport.

MR. WHITE: All right, I will be glad to. It isn't

that important, but I would be glad to.
MR. BELL: This is the telegram.

(The secretary signed a telegram dated June 5,
1942, addressed to the presidents of the Federal Reserve
Banks.)

H.M.JR: This is all right with everybody? Have

you seen this?

MR. BUFFINGTON: Yes, sir.

MR. BELL: And the five presidents were in there,

and Harold mentioned it.

H.M.JR: Where is Harold?

MR. BELL: Up at the committee.
H.M.JR: Everybody happy on F and G's?

MR. BELL: Ted, you haven't seen it.
MR. GAMBLE: Mr. Graves spoke to me about it.

H.M.JR: Take a look at it; and you, Ted Gamble,
will see that Harold Graves, as soon as he has had his
hearing, gets out of here and stays away.

56

-4MR. GAMBLE: He is thoroughly booked, is leaving
tomorrow evening at eleven forty-five.
H.M.JR: Where is he going?
MR. GAMBLE: He is going to the West Coast.

H.M.JR: Is he?
MR. GAMBLE: Yes.

H.M.JR: Is he going to do that?
MR. GAMBLE: Train trip - he relaxes on the train.
MRS. KLOTZ: That is what he likes to do.

H.MR. All right. I think it is crazy, but if

that is what he wants that is what he wants. Is it?
MR. GAMBLE: Yes.

MRS. KLOTZ: He loves to be on the train, and I
think-MR. GAMBLE: He takes all the slow trains.

H.M.JR: Is that what he does?

MR. GAMBLE: He took a slow train trip, Illinois
Central - took three days to get to Georgia. (Laughter)

H.M.JR: All right.
MR. PAUL: I wondered if there was any chance of

getting you to take up this Reader's Digest thing.

H.M.JR: No. I read it, and if you don't mind
my saying so I think it is about as far removed from

war work as-anything that I would be interested in.
I wouldn't touch it, if it were me; I mean, if somebody

57
5-

else wants to go to bat for them, O.K. If they were

doing that Disney picture, there would be some excuse.
MR. PAUL: They are.

H.M.JR: No. Frankly, I can't see it. I read it.

I think Don Nelson would laugh at me.

Would you (Bell) mind, either you or - I think it

had better be you - Purcell, either once a month or
once in three months, gets out a bulletin analyzing

savings, and all the rest of that, you see, and it has

done us a lot of harm both times. Yesterday Lauch

Currie said he thinks they are only two billion dollars

off in their figures.

MR. HAAS: I called him up. You asked me to call
him up, and I did. He said he would be very glad to

submit it to the Treasury prior to releasing it in the

future.

H.M.JR: Oh, did I ask you to do it?
MR. HAAS: You asked me, and I called him.
H.M.JR: You mean from now on Purcell--

MR. HAAS: He is going to submit it to you.
H.M.JR: Have you followed through with Lauch

Currie?

MR. HAAS: No. When Lauch left he sai a he had a
memorandum he was going to send to me. It hasn't come
yet.

H.M.JR: And I spoke to Jesse Jones, so their

bulletin, also, from now on they will give us a chance
to see. Lauch Currie said he thought they were only

off two billion dollars in their figures.
Are you all right, young fellow?

58
--6-

MR. BUFFINGTON: Yes, sir.

MR. SULLIVAN: I tried to see Senator Russell. I

talked with Senator Maybank on the phone, and I know what

they want. You may forget it.

H.M.JR: It is out, isn't it?
MR. SULLIVAN: Sure.

H.M.JR: Is that right, all they want is to have

the United States Government refund what the State of South
Carolina loses through gasoline rationing?
MR. SULLIVAN: You are wrong. They understand that
Nelson has appointed a committee, and they want somebody
from either Georgia or South Carolina on the committee.

H.M.JR: That is all?
MRS. KLOTZ: That is not what he said.

MR. SULLIVAN: I know, I had a transcript of it,

but I think this is just a build-up for the other.
H.M.JR: Am I not right as to the final--

MR. SULLIVAN: Yes. I mean, the purpose of the

bill is the same.

H.M.JR: I will call up, gentlemen, once a day.

That doesn't mean you have to be here. If somebody has
something really important, leave word with the operator,

and they can talk to me. I will try not to fuss with
you, and I will appreciate it-MR. BELL: "If you don't fuss with me"?

H.M.JR: If you don't fuss with me. And everybody
take it as easy as they can this coming week.
Give my regards to the flyers.

59
7-

MR. KUHN: I will.

H.M.JR: I talked to the mayor of St. Louis. He

said he was waiting to hear from you.

You got B. Baruch and Fiorello all right?
MR. KUHN: So far so good.

H.M.JR: That is Monday night?

MR. KUHN: Monday, yes, sir. They will be down
here Saturday and Sunday. I will let you know what
McIntyre sends back about the White House.

MRS. KLOTZ: Did you sign the letter to McIntyre?
H.M.JR: Oh, yes.

All these things, if they are going well let them

go,* but if you need me, really need me, O.K., but I
really am tired. I am going away particularly happy
that we got this F and G thing straightened out.
You haven't heard from Sam?

MR. FOLEY: Not a word. Have you?

H.M.JR: I don't imagine he got in to see the
President. Captain Lyttelton is here, and I imagine
he has got his hands full, but I think that was in
pretty good shape.

60

peen saw
Hansen
onm6/24/42
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE
TO THE BOARD

June 5, 1942

Honorable Henry Morgenthau, Jr.
o/o Robert Guex

Fishkill, New York
My dear Mr. Secretary:

Please let me say that this note is entirely
personal and unofficial. As your secretary told you, I

had hoped to be able to see you for a few moments today but
found your day completely occupied. I am happy, however,

to take advantage of your kind suggestion that I might
write you this note.

The matter I wanted to talk with you about is
I feel of the utmost urgency and a matter upon which
prompt action appears to be imperative.

As it looks now, the Congress is going forward
with legislation which will tie up the government loan
stocks of wheat and corn until the prices of these oom-

modities reach parity. The effect of this action will be
to raise the cost of feeds to a point which will make it
utterly impossible for the price administration to hold
the ceilings on the end products particularly at the
retail level. It is easy to see how disastrous this
situation will be for the whole program of price stabilization.

The reason why I particularly wanted to see you
was that I am well aware of the strong and statesmanlike
stand that you have on more than one occasion taken with

respect to this particular problem of the effective
utilization of the stocks in the government loan pool and
I know from your past utterances and record your vital
interest in this important problem.

DRVICTORY

BUY
STATES
DEPENDE

BONDS
STAMPS

61
Honorable Henry Morgenthau, Jr.

June 5, 1942

Page 2.

In the event that Congress ties up the stocks,
as may likely have occurred by the time you get this
letter, it would seem imperative (if we really mean
business on price stabilization) that the President

should veto the bill which carries this rider. If he

does so, however, it would seem necessary at the same
time to take stronger measures than have yet been taken

effectively to stabilize wage rates. Without attacking
the wage situation it appears quite impossible to attack
the farm problem. It is always the wage argument which

is used by the farm bloc to justify their position.

I am informed that already in several consumers
goods industries increases in wage rates now occurring or
impending make it impossible to continue operation at the

price ceilings fixed by the price administrator. Thus on
two fronts -- the wage front and the farm front -- price
stabilization is currently most seriously imperiled.
What is needed is to obtain the acceptance of
this program by the top people in the labor movement and

I wanted to talk with you in the hope of enlisting your
active support in pushing simultaneously for (1) a release
of the wheat and corn stocks and (2) for effective wage

stabilization.

With kindest personal regards,
Very sincerely yours,

alain H. Hansen
Alvin H. Hansen

P. S. Could I perhaps see you for a few moments
upon your return to Washington?
A.H.H.

62

June 5, 1942

The following received letters enclosing printed copy of report

Secretary presented to Joint Committee on Internal Revenue
Taxation on May 28, on subject of Wartime Tax Avoidance. Dated

June 4. Copies to NMC.

The President
Hon. Harry Hopkins

Vice President Wallace
Hon. Stephen Early
Hon. Cordell Hull
Hon. Henry L. Stimson
Hon. Francis Biddle
Hon. Harold L. Ickes
Hon. Claude R. Wickard
Hon. Jesse H. Jones
Hon. Frances Perkins
Hon. John W. McCormack

Hon. Joseph W. Martin, Jr.
Hon. Alben W. Barkley

Hon. Sam Rayburn

Col. Edwin A. Halsey

Hon. Charles McNary
Hon. John Taber
Hon. Clarence Cannon

Hon. Gerald P. Nye
Hon. Carter Glass

62

June 5, 1942

The following received letters enclosing printed copy of report

Secretary presented to Joint Committee on Internal Revenue
Taxation on May 28, on subject of Wartime Tax Avoidance. Dated

June 4. Copies to NMC.

The President
Hon. Harry Hopkine
Vice President Wallace
Hon. Stephen Early

Hon. Cordell Hull

Hon. Henry L. Stimson
Hon. Francis Biddle

Hon. Harold L. Ickes

Hon. Claude R. Wickard
Hon. Jesse H. Jones
Hon. Frances Perkins
Hon. John W. McCormack

Hon. Joseph W. Martin, Jr.
Hon. Alben W. Barkley
Hon. Sam Rayburn

Halsey
Hon. Col. Charles Edwin A. McNary

Hon. John Taber
Hon. Clarence Cannon

Hon. Gerald P. Nye
Hon. Carter Glass

63

June 4, 1942

My dear Mr. President:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,

on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) a. Morgentham. ⑉

The President,
The White House.

Delivered by Sturger 11:10
6/6/42

64

June 4, 1942

Dear Harry:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Hon. Harry Hopkins,
The White House.

By Messenger Staying 11:10

1/5/42

65

June 4, 1942

Dear Steve:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,

on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Stephen Early,

Secretary to The President.

By Messenger Struggs 11:10

6/5/42

66
June 4, 1942

Dear Frances:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,

on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Frances Perkins,

Secretary of Labor.

67

June 4, 1942

Dear Jesse:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Jesse H. Jones,
Secretary of Commerce.

68

June 4, 1942

Dear Claude:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Honorable Claude R. Wickard,

Secretary of Agriculture.

69

June 4, 1942

Dear Harold:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Honorable Harold L. Iokes,

Secretary of the Interior.

70

June 4, 1942

Dear Francis:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.
Yours sincerely,
(Signed) Henry

Honorable Francis Biddle,
The Attorney General.

71

June 4, 1942

Dear John:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Honorable John W. McCormack,

House of Representatives.

72

June 4, 1942

Dear Joe:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Joseph W. Martin, Jr.,
House of Representatives.

73

June 4, 1942

Dear Alben:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Alben W. Barkley,
United States Senate.

74

June 4, 1942

Dear Sam:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Sam Rayburn,

Speaker of the House of Representatives.

75

June 4, 1942

Dear Colonel Halsey:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) E. Morgenthas, 32.

Colonel Edwin A. Halsey,

Secretary of the Senate.

76

June 4, 1942

Dear Charley:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Charles McNary,

United States Senate.

79
June 4, 1942

Dear Congressman Taber:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) N. Morgenthau, Js.

Honorable John Taber,

House of Representatives.

78

June 4, 1942

Dear Congressman Cannon:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) a. Morgenthau. 38.

Honorable Clarence Cannon,

House of Representatives.

79

June 4, 1942

Dear Senator Nye:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,

on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) H. %orgenthau, Jr.

Honorable Gerald P. Nye,
United States Senate.

80

June 4, 1942

Dear Senator Glass:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) H. Morgenthau, see

Honorable Carter Glass,
United States Senate.

81

June 4, 1942

Dear Henry:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Honorable Henry L. Stimson,
Secretary of War.

82

June 4, 1942

Dear Cordell:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,
(Signed) Henry

Honorable Cordell Hull,
Secretary of State.

83

June 4, 1942

Dear Henry:

I am sending you herewith a

printed copy of the report which I presented to the Joint Committee on Internal Revenue Taxation, on May 28th,
on the subject of Wartime Tax Avoidance.

Yours sincerely,

(Signed) Henry

Hon. Henry A. Wallace,

The Vice President.

84

WARTIME TAX
AVOIDANCE

A Report by Secretary Morgenthau to the
Joint Committee on Internal Revenue Taxation
May 28, 1942

UNITED STATES

GOVERNMENT PRINTING OFFICE
WASHINGTON 1942

Statement of

SECRETARY MORGENTHAU
before the

Joint Committee on Internal Revenue Taxation
Thursday, May 28, 1942

T

HE VERY HELPFUL interest in tax collection problems shown by the members of the Joint Committee on

Internal Revenue Taxation, under the able leadership
of your Chairman, Mr. Doughton, encourages me to appear
before you to discuss an administrative matter.
I know that this Committee and the Congress are determined

that no man and no corporation shall be permitted to make
exorbitant profits out of the war effort. It is the responsibility
of the Congress to draft legislation to achieve that purpose. It
is our responsibility at the Treasury to use all the powers the
Congress has given us to see that all taxes are fully, honestly
and justly collected. It is our responsibility to see that by no

form of trick or chicanery is any one taxpayer permitted to
escape his just share and thus to throw unjust burdens on others.

I have come before this Committee tonight to tell you of
some instances of what seem to me to be particularly unpardonable attempts to escape wartime taxation, and I should
like to report what the Treasury is doing and intends to do to
stop these practices. In every instance the method used by the
taxpayer was to inflate expenses with the evident purpose of
avoiding normal and excess profits taxes on corporation earn-

ings. The devices used included the payment of excessive
salaries,
the distribution of unearned bonuses and the payment
453874*-02

of unreasonable sums for purported services to persons closely
connected with the management of the companies involved.

It will be obvious to members of this Committee that these
practices, if successful, would reduce the revenue of the Govern.

ment,
the
war.the revenue we need so urgently for fighting and winning

We do not intend that this shall happen. We do not intend
that any of these practices shall succeed. The Congress has
already given power to the Treasury to deal with cases of this

kind, and that power is being exercised.

The instances I shall mention to you were discovered as a
result of speeding up our investigation of 1941 returns of corporations holding war contracts. Reports of the examination

of 31 returns for 1941 are now available. Let me mention
briefly seven cases illustrating the practices with which we have

to deal.

Company A makes an important airplane part. This corporation is owned by one man who hired himself as its sales
representative. His compensation in 1941 was $1,656,000.

by two brothers and their wives. It paid dividends of $40,000
in 1940 and $100,000 in 1941, while salaries totaling $128,000
were paid in 1941 to the president, his wife and his brother.
Company E makes forgings. The stock is owned by three
families. From 1938 to 1941 the salaries of employees who
were stockholders and relatives of stockholders increased 523
percent. Excessive salaries for 1941 have been disallowed to
the amount of $568,000.

Company F makes equipment for airplanes. Three principal officers of this corporation took salaries of $100,000 each
and the corporation claimed it had set aside over $575,000 in
bonuses. Salary and bonus payments totalling $516,000 were
found to be excessive. Other disallowed deductions included

$16,000 paid for watches given to employees, $14,000 for
banquets and picnics, $4,000 for photographs taken at banquets and picnics, and $1,900 for tickets to football games.
Other important deficiencies were found in the tax return.
Company G makes a device important to aviation. This
corporation is owned almost entirely by one man, his wife and

By consolidating these earnings with those of the corporation,

his brother. The two men increased their salaries from $12,000

we have blocked this obvious attempt to divert profits and we
have increased the corporation's income tax by $1,117,000.

and $15,000 in 1939 to $72,000 and $90,000 in 1941. The

Company B makes steel. All stock in this corporation is held
by three families. Excessive salaries were paid to officers who
were also stockholders. The Revenue Agent has recommended

disallowance of $82,000 in salaries, and the company has
already agreed to this disallowance.

royalty rate on the patent jointly held by them was increased,
with the result that with expanded sales for war purposes, the

royalties paid to them increased from $87,000 in 1939 to
$1,179,000 in 1941.

You will note that I have not named any of the corporations
or the individuals concerned. I leave it to this Committee to
decide whether that should be done. Personally I am inclined
to believe it would have a very wholesome effect.
Assistant Secretary Sullivan and Commissioner Helvering

Company C makes vital equipment for airplane pilots. This
corporation paid $31,104 in rent in one year to the wife of the
president for using property which had cost her $45,412. A
brother of the principal stockholder, without special training

are here tonight to give you further details of the results of

or ability, drew a salary of $15,000 a year and a son and

some of these investigations. They stand ready to come before

daughter, just out of school, got $7,500 a year each.
Company D makes tools and dies. This company is owned

you from time to time and to report the results of further
investigations now in progress.

2
3

It should be noted that these cases all deal with returns for
1941. It is of course true that all of the contracts for war work
covered by these 1941 returns were signed before the United
States entered the war and that nearly all the earnings represented in the tax-dodging devices attempted were pre-war

earnings. But I think that changes the situation very little,
An attempt to escape lawful taxes while we were actually at
war would be only a slight degree blacker than an attempt to
escape taxes which would pay for arming and equipping our
Army and Navy when we stood in imminent danger of attack.
It may be that these instances are an isolated few and that

not many more of the same kind will be found. I sincerely
hope that will be the case. I am wholly confident that the
great and overwhelming proportion of American corporations
are too patriotic even to consider such practices.
We are taking two steps to detect and deal with the evils
I have mentioned. In the first place, we are expediting examination of the tax returns and records of all corporations, be-

ginning with those who have war contracts, to determine
whether excessive expenses are being claimed. Ordinarily our
investigation of returns filed for the year 1941 would not begin

until July 1, 1942, and this work would continue through the
fiscal year ending June 30, 1943. Under present circumstances

we cannot afford to wait so long before acting. By speeding
up our investigations we expect to check unlawful practices
of this sort at an earlier stage.

In the second place, we are disallowing excessive expendi-

for the purpose of determining profits. In applying the law
and regulations, the Bureau of Internal Revenue has often
disallowed expenditures which seemed to lack sound business

justification and which were, in effect, distributions of profits.
Today, however, the problem has assumed major importance
in view of the huge increases in income of a great number of
corporations resulting from the war effort.
In presenting this problem to you, I am anxious to be as
constructive as possible. It seems to me that the businessmen
of this country are entitled to know not only the extent of our
legal powers but also the standards that we have adopted in
applying them. Accordingly, it may be helpful if I outline the
following general considerations that will guide us in examining expenses claimed in tax returns.
1. Salaries and Bonuses Paid to Officers and Employees.

Deductions claimed for greatly increased salaries and extraor-

dinary bonuses paid to officers or employees will be disallowed unless the taxpayer proves that the payments are, in
fact, for services actually rendered and are reasonable.
In determining whether the payments are reasonable, it will
be assumed that reasonable compensation is only as much as
would ordinarily be paid for like services by like enterprises
under like circumstances. The factors that will be considered

in determining the reasonableness of such payments are the
duties performed by the recipient, the character and amount
of responsibility, the time devoted to the enterprise, and the

tures which have the effect of reducing corporate tax liabilities.

peculiar ability or special talent of the particular officer or

We are compelling the corporations to include such amounts

employee. Where the payments are to relatives or to shareholders, the taxpayer must show that family considerations
have not influenced the amount paid and that the payments

in earnings, and at the same time we are requiring the recipient to pay full personal income taxes on the amounts received.

The disallowance of excessive expenditures does not represent a new procedure. The law and regulations permit the
deduction only of ordinary and necessary business expenses

are not distributions of profits in disguise. Large profits
attributable to causes entirely unrelated to the activities of the
officers or employees, which are not unusual in these abnormal

4

5

times, do
payments.

not of themselves justify or warrant large salary

such deductions where it is not shown that the expenditures are

in fact for repairs instead of for improvements or betterments
2. Rents, Royalties and Other Payments to Shareholders.

Deductibility of rents, royalties or other payments to share-

upon such charges are in fact

payments use of property and are not
reasonable holders device depends for distribution for whether the fair merely and

a of profits. Any shareholder should be
entitled only to a fair return on his investment in the property

which he permits the corporation to use.

3. Payments to Profit Sharing or Pension Trusts.

which should be capitalized.
5. Expenses or Allowances Paid to Obtain Government Business,
Including Fees Paid to Washington Representatives or for Other
Professional Services.

Whether deductions for items of this class will be allowed

depends upon whether they meet the test laid down in the
Internal Revenue Code, that is, whether they are necessary
and ordinary and reasonable. If such items are considered
exorbitant or unreasonable, they will be disallowed as deduc-

The deductibility of payments to pension trusts is governed
by section 23(p) of the Internal Revenue Code. If payments
to such trusts are reasonable, their deduction will be allowed.
If the payments are unreasonable in amount, or if the trust is
not created for the exclusive benefit of employees, or if it is a
device to distribute profits to shareholders, the deductions will

be disallowed. It is also our purpose to set up a barrier to
deductions of large salaries, bonuses, or insurance premiums

for officers under the guise of payments to a pension trust.
4. Payments for Repairs.

The deductibility for income tax purposes of costs of repairs

depends upon whether the expenditure is actually for repairs,
or is in fact a capital expenditure which should be added to
capital investment or charged against reserve for depreciation,
since the costs of repairs are deductible while capital expendi-

tures are not. We must guard against the

years to make extensive and to

the high cost profit of such improvements tendency charge during
improvements against profits under the caption
of repairs.

tions. Many of the factors that apply in determining the deductibility of salaries and bonuses will apply also in determining

the deductibility of items of this class. Particular attention
will be given to deductions for payments which are against
public policy, and all such deductions will be disallowed.
6. Amounts Paid for Advertising.

The test of whether expenditures for advertising are deductible is whether they are ordinary and necessary and bear
a reasonable relation to the business activities in which the

enterprise is engaged. This is not intended to exclude institutional advertising in reasonable amounts or good will advertising calculated to influence the buying habits of the public.
If such expenditures are extravagant and out of proportion to
the size of the company or to the amount of its advertising
budget in the past, or if they are not directed to public patronage which might reasonably be expected in the future, such
payments will be disallowed as deductions.

With these standards as our guideposts, we are progressing
as fast as practicable with our investigation of the 1941 returns.

It will be our policy to scrutinize carefully the items claimed
as deductions for expenditures for repairs. We shall disallow

Those who are engaged in this work must, of course, think not
only of the best interests of the Government but also of the

6
7

need of being completely fair to the taxpayers. The Committee, the Congress and the country are entitled to know that
the unscrupulous and selfish few are not being allowed to distort their tax returns so as to escape their fair share of the costs

of the war. I can assure the Committee of this: that nothing
is being left undone which will expedite our work. If we find
that our existing powers are not adequate to deal with the evil
I have been discussing, I shall not hesitate to come before the

appropriate committee to ask for any additional authority that

may be needed.

FOR VICTORY

BUY
WAR
BONDS
STAMPS

8

U.S. GOVERNMENT PRINTING OFFICE 1948

85

JUN 5 1942
Dear Mr. Chairman:

I wish to acknowledge receipt of your letter of May 20th,
asking - to furnish your Committee the names and addresses of
the companies referred to in my discussion of tax avoidance with
the Joint Committee on Internal Revenue Taxation on May 28th, and
also to give you the names of other compries engaging in similar
practices.

At this meeting on May 28th the question of publishing the names
of the offending corporations was discussed at length and the Joint
Tax Committee decided to postpone decision on this question until after
the taxpayers in each CASO had been given the usual opportuni ty to file
a protest to our proposed action in asserting a deficiency and thereafter had a reasonable opportunity to present their explanation of the
particular transaction or practice being questioned by the Internal
Revenue Bureau. After these conferences between representatives of the
Internal Bevenue Bureau and the taxpayers have been concluded, the
Joint Committee on Internal Revenue Taxation will then decide whether
the names of these corporations should be published.

Section 55 of the Internal Revenue Code rigidly prescribes the
Committees to which the Treasury may divulge "any data of any character
contained in or shown by any return", and your Committee is not one of
those to which we are authorised to give such information.
Inasmuch as the Joint Committee on Internal Revenue Taxation

possesses the authority to submit relevant and useful information obtained through income tax returns to the Senate and the House, and
since the Treasury does not have this authority, may I suggest that
the request embodied in your letter of May 29th be addressed to
Chairman Robert L. Doughton of the Joint Committee on Internal Revenue

Taxation.

Sincerely yours,

(Signad) m
Secretary of the Treasury.
Honorable Carl Vinson,

Chairman,
Naval Affairs Investigating Committee,
Photofir n.m c.
House of Representatives.
By Messenger Brown I:15
J15:kb

file to Thompoon

86

JUN 5 1942
Dear Mr. Chairman:

I wish to acknowledge receipt of your letter of May 29th,
asking me to furnish your Committee the names and addresses of

the companies referred to in my discussion of tax avoidance with
the Joint Committee on Internal Revenue Taxation on May 28th, and
also to give you the names of other companies engaging in similar
practices.

At this meeting on May 28th the question of publishing the names
of the offending corporations was discussed at length and the Joint
Tax Committee decided to postpone decision on this question until after
the taxpayers in each case had been given the usual opportunity to file
a protest to our proposed action in asserting a deficiency and thereafter had a reasonable opportuni ty to present their explanation of the
particular transaction or practice being questioned by the Internal
Revenue Bureau. After these conferences between representatives of the
Internal Revenue Bureau and the taxpayers have been concluded, the
Joint Committee on Internal Revenue Taxation will then decide whether
the names of these corporations should be published.

Section 55 of the Internal Revenue Code rigidly prescribes the
Committees to which the Treasury may divulge "any data of any character
contained in or shown by any return", and your Committee is not one of
those to which we are authorized to give such information.
Inasmuch as the Joint Committee on Internal Revenue Taxation

possesses the authority to submit relevant and useful information obtained through income tax returns to the Senate and the House, and
since the Treasury does not have this authority, may I suggest that
the request embodied in your letter of May 29th be addressed to
Chairman Robert L. Doughton of the Joint Committee on Internal Revenue
Taxation.

Sincerely yours,

/s/ H. Morgenthau, Jr.,
Secretary of the Treasury.

Honorable Carl Vinson,
Chairman,

Naval Affairs Investigating Committee,
House of Representatives.

JLS:kb

EDML TO '4. TOLAND
GENERAL COUNTEL

ROOM BET House OFFICE BLDG

House of Representatives H.S.
Nabal Affairs Investigating Committee

Washington, D.C.

May 29, 1942

Honorable Henry Morgenthau, Jr.

Secretary of Treasury
Treasury Department
Washington, D. C.
Dear Mr. Morgenthau:

It has come to my attention through the public press
that yesterdey you informed the Committee on Ways and Means of

the existence of flagrant examples of tax avoidance through

various devices. It is my further understanding that your exemples were some 13 in number. I would appreciate very much
if you would furnish the Committee the names ana addresses of

the companies you referred to. along with any other similar incidents that have come to your attention, in oruer that the
Committee may investigate further along the lines of its auties
AS authorized by House Resolution 162 of the present Congress.

Very truly yours.

ber Vinson
Carl Vinson
Castron

88

TREASURY DEPARTMENT
INTER-OFFICE COMMUNICATION

DATE June 5, 1942
TO

FROM

Secretary Morgenthau
Mr. White

I am giving you herewith a comparative statement of the
earnings and expenses of the Stabilization Fund for the months
of April and May, 1942.
Earnings

Interest earned on investments
Interest earned on Yuan
Total

Profits on handling charges on gold
Grand Total

April 1942

May 1942

$ 19,568.41

$ 20,220.69
24,389.84

$ 43,142.42
93,641.23

$ 44,610.53

$136,783.65

$184,276.65

$ 16,496.70

$ 20,502.61

1,395.94

1,445.86

23,574.01

139,666.12

Expenses

Salaries
Telephone and Telegraph
Stationery

All others

Total
Net Earnings

838.77
39.14

173.16
756.00

Travel
Subsistence

295.34

18.68
457.09

$ 19,117.14

$ 23,302.15

$117,666.51

$160,974.50

-

The increase in earnings for May resulted mainly from a

rise in the volume of gold transactions with foreign countries
on which the 1/4 of 1% handling charge was collected.

The various expense items fluctuate from month to month.
In March they totaled $28,076.60.

89

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE

TO

FROM

June 5. 1942.

Secretary Vorgenthau

for

Mr. Haas

In accordance with your request, I telephoned Mr. Purcell
Chairman of the Securities and Exchange Commission, and he said that he

would be very glad to see that in the future no report on savings was
relensed until it had been submitted to the Treasury.

90
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

DATE June 5, 1942
TO

Secretary Morgenthau

FROM

George Buffington GTS.
You asked some time ago that the Securities Industries submit

to you a report of their efforts made on the recent issue of U. S. Treasury
2% Bonds, 1962 - 1967. Herewith is a report received today from the
National Committee of the Securities Industry for War Financing. The
report shows under column one that the industry sold $376,532,300.
Column two shows that they made approximately 90,000 calls and column

three shows that approximately 6,500 of those contacted purchased the
bonds.

It is my opinion that the figure of $376,532,300 is somewhat

optimistic, inasmuch as certain sales reported in districts like New York
might have been made without the efforts of the Industry.
You may want to sign the attached letter to the Committee

thanking them for their efforts.

91
THE NATIONAL COMMITTEE OF THE SECURITIES INDUSTRY
FOR WAR FINANCINO

FINAL REPORT of June 1, 1942

Memo of Sales of Treasury 20's 1962-67 as Reported
By State and City Chairmen for Period from May 4 to 14, 1942
Received at Chicago office May 15 to June 1, 1942
10

12

11

9

8

7

6
5
4

3

2

1

Partners

154,000
647,000
48,100
790,600

143

Salesmen

Days

9

728

33

30

148

220

382

447

89

155

614

822

47

10

11

107

112

61

40

50g

19

41

33

28

25

99

10

10

143

688

94

69

43

50

175

37

339

54

12

17

563

79

12

33

535

27

25

196

32.

21.

770

88

8,659
4,639
1,482

577

117

325

79

71

223

134

65

64

66

112

27

33

59

105

584,900

47

68

10

72

115

588

805
257

530

194

235

156

231

30

76

123

104

83

26

283

156

42

310

182

80

35

67

13

86

103

42

44

48

50

10

11

29

11

28

178

14

32

78

344

842

1,661

932

1,917

1,042

122g

144

18

35

32

80

132

89

7,305,500
14,591,300

1,762

35

90

135

3,905

398

222,000
227,500

141

16

582

11

7,062,400
3,235,500

4,047

220

1,011

88

201,400
30,000

1,092

28

1,450,500
14,571,000
1,997,500

454

24**

2,126
296g

255

134

34

10

27
2

11

4

14

3

9

100

106

100

55

78

280

15

10

122

57

30

26

49

33

498

52

61

29

91

364

23

12

58

87

42g

8

33

20eee

43

38

22

28

62

38

86

443

2648

154

169
82g

67

10

100

5

1.

7.

30

48

1,230

183

33

13

55.

49

378

14

95

148

121

484

4

10,000

30

82

3

No Report

15

2,808

9

34,144

352

9

133

20

803

6*

658,100

634

45

1,300,000

70

10

25

120

30

14
13
7>

11

1
1

1

6

348

7

1

3

3

56

9

1,341

110

56

6,515

1,611

77

167

81

133

40

48

3,546

1,002

1,139

198
2

1
1

8

20,000

65

110

379

314,000

968

71

83

1.
29

59

42

258

530

220

165

1.

1.

475

No Report

9,900,500

155g

110

24

820

1,125,000*

73

57

10

42

31

2,599

183,018,300
3,164,900

72

9

...

35

3,731,500

$376,532,300

..

73

6,453
1,104

4

54. Wyoming

42

23

227

500,000*
1,555,200
No Report
1,450,000
2,770,500

53

10

1

53. Wisconsin

632,000

215

6

52. West Virginia

3,412,900
2,140,000
29,697,300
6,378,600
1,169,500

2,445

6

51. Washington

164,000

14

18

7

50. Virginia

17

15

90

6

48. Utah
49. Vermont

55

112

32

30

4

47. Texas

2,732,000

31

3

46. Tennessee

22

31

2

42. Do.-Western
43. Heade Island
44. South Carolina
45. South Dakota

489

26

14

47

6

41. Penn-Eastern

303,200
720,800

918

.8

6

39. Oklahoma
40. Oregon

25

43

9

35. North Carolina
36. North Dakota
37. Ohio-Northern
38. Do.-Southern

103

870

23

51g

16

3

31. New Hampshire
32. New Jersey
33. New Mexico
34. New York

610

Sales

223

278

6

29. Nebraska
30. Nevada

25

1,344,800
1,041,900
346,000*
5,910,700
25,838,300
5,679,000
6,870,100

286

24

32

6

28. Montana

68

62

21

116

5

27. Do. -Western

926

6

25. Mississippi
26. Missouri-Eastern

69

57

200

1

23. Michigan
24. Minnesota

117

106

80

1

22. Massachusetts

2,346

63

1

21. Maryland

2,401,100
1,401,300
15,711,400

49

2

19. Louisiana
20. Vaine

24

7

18. Kentuoky

82

6

17. Kansas

1,237

9

16. Iowa

26

138

18

1

15. Indiana

14

8

14. Illinois

89

8

12. Georgia
13. Idaho

27

178

7

$

11. Florida

8

10. Dist. of Columbia

9

-Southern

9. Delaware

14

6

Do.

8.

6

7. Connectiout-Northert

5

6. Colorado

50

5

Southern

11

9

Do.

5.

7

4. California-Northern

12

11
1

7

3. Arkansas

Days

Days

1

2. Arisona

Personnel

3

1. Alabama

18

Days

3

Calls

Executives

Reporting

Sales

Amount Sold

Clerical
3

Committees

Total

Total

or

1

Principal

Firms

90,115

Interim report figures from May 4 to 9 - no other report received.
50 firms reported on Nos. 1, 2 & 3.
32 fires reported on Nos. 1, 2 & 3.

2,288

3,255

4,507

7,797

7,940

92

TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION

DATE June 5, 1942
TO

Secretary Morgenthau

FROM

Mr. Haas

Subject: Recent
Changes in Prices and Yields of Government
Securities

During the week ended last night, the market for
Government securities fluctuated within a narrow range.
Prices of both taxable and tax-exempt securities tended
to decline, except for some of the longer term bonds.
The taxable 2-1/2's of 1967-72 closed last night at
101-8/32, an improvement of 1/32 over the price a week
ago. The new taxable 2'8 of 1949-51, however, showed a
net drop of 2/32 for the week, closing at 100-19/32. The
new 1-1/2 percent notes also declined, their premium of
13/32 last night being 2/32 less than that of a week ago.
A comparison with the March 19 benchmark shows no

change in the general situation which has existed for
several weeks. Prices of long-term securities, both

taxable and tax-exempt, have improved, while prices of
medium and short-term securities have declined. (See
attached chart and tables).

For the third consecutive week, the bill rate stood
at 0.36 percent. Certificates of indebtedness improved

moderately, closing last night at 0.46 percent as compared

with 0.48 percent a week ago.

Purchases by the Federal Open Market Account during

the week totaled $56 millions, including $43 millions of
bills and $8 millions of the new 1-1/2 percent notes.
Sales aggregated $11 millions, resulting in a net increase

of $45 millions in the portfolio.

Attachments

93
Table I

Price and Yield Changes of United States Securities
May 28, 1942 to June 4, 1942

(Based on mean of closing bid and asked quotations)
Prices
Security

May 28,

June 4,

1942

1942

Yields
Change

May 28,

June 4,

1942

1942

(Decimals are thirty-seconds)

Change

(Percent)

Bills

Average rate last issue

-

-

-

.36

36

.00

.48

.46

-.02

.51

.55

.89
.94

.92

.95

+.04
+.03
+.01

1.10

1.13

+.03

1.39wi

1.41w1

+.02
+.01
+.01

Certificates

11/1/42

-

-

1/2%

Notes

1-1/2

100.06
99.22
99.11
99.20
100.15wi

100.05
99.20
99.10
99.17
100.13wi

-.01
-.02
-.01

101.15
100.11
104.03
101.15
103.11

101.14
100.22
100.19
100.12
104.04
101.14
103.10

-.01
-.01
-.02
+.01

101.07

101.08

100.20
100.30
100.26
100.25

101.05
101.00
100.17
101.06
100.19

100.19
100.27
100.26
100.25
101.04
100.31
100.16
101.04
100.17

-.01
-.01
-.01
-.02
-.02

102.31
103.16
104.17
107.24
105.20
105.10

102.28
103.14
104.14
107.22
105.15
105.06

-.03
-.02
-.03
-.02
-.05
-.04

6/15/46-48
6/15/46-49
10/15/47-52
12/15/47
3/15/48-51

109.19
107.09
107.23
115.08
104.22
107.23

109.16
107.06
107.20
115.08
104.21
107.22

9/15/48
12/15/48-50
12/15/49-52
12/15/49-53
9/15/50-52
6/15/51-54

107.02
104.22
110.28
106.24
107.00
108.30

107.00
104.20
110.28
106.24
107.01
108.29

55-60

110.30
105.15
104.04
105.19
110.17
109.28
110.01
110.17

110.30
105.15
104.00
105.19
110.18
109.30
110.04
110.17

12/15/46

-.03

-.02

Taxable Bonds
100.23
100.21

2-1/2

6/15/52-55
3/15/56-58
/15/62-67
9/15/67-72

1.74
1.90
1.91

1.96

.00

2.03

-.01

2.09
2.22

2.09
2.22

.00

+.01

2.44

2.43

-.01

-.01
-.03

1/32*

1/32*

0/32*

+.01

-.01
-.01

+.01

.00

-

2-1/2
2-1/4
2-1/2
2-1/2

1.73

1.89
1.90
1.96
2.04

Wholly Tax-exempt Notes
1-1/8
1-1/8

6/15/44
9/15/44
3/15/45

+.12

.03

.00

.35

.00

.40

-.02
-.01

.39

+.02
+.01
+.01
+.02
+.02

.37

.44
.49

.45

.48

.50

.54

.56

.53
.70

.71

+.03
+.01

.91

.84
.92

+.01

1.01

1.05

.97

1.00

-.03
-.03
-.03

1.16
1.15

+.01

.00

1.31

-.01
-.01

1.13

1.17
1.17
1.18
1.30
1.13
1.36

.50

Bonds

2-3/4
2-1/2

4/15/44-46
12/15/44-54
9/15/45-47
12/15/45
3/15/46-56

3-1/8

2-3/4
2-1/2
2

3-1/8
2-1/2
2-1/2
2-3/4

2-1/4
2-7/8
2-3/4
2-3/4
2-3/4

WAS

9/15/56-59
6/15/58-63

12/15/60-65

Treasury Department, Division of Research and Statistics.

Excess of price over zero yield.

.82

1.17

1.36

.56

+.02
+.04
+.03
+.02
+.01

-.01
.00

.00

1.33
1.26

.00
+.01

.00

1.33
1.25
1.59

1.59

.00

.00

1.55

1.55

.00

+.01

1.60

1.59

-.01

-.01

1.68

1.68

.00

.00

1.72
1.63
1.59

1.72
1.63
1.60
1.73
1.94
1.95

.00

-.02
-.02

.00

-.04
.00

+.01
+.02
+.03
.00

1.73
1.94
1.96

2.02
2.06

.00

+.01
.00

.00

2.01

-.01
-.01

2.06

.00

June 4, 1942.

94

Table II

Price and Yield Changes of United States Securities
March 19, 1942 to June 4, 1942

(Based on mean of closing bid and asked quotations)
Prices
Security

Yields

March 19,

June 4,

1942

1942

Change

March 19,

June 4.

1942

1942

(Decimals are thirty-seconds)
Bills

(Percent)
.20

-

-

Certificates
1/2%

11/1/42

-

1-1/2

100.12
99.31
99.21
99.29

-.14
-.14

1.67
1.83

100.12
103.23
101.06
103.05

.00

100.27

3-1/8
2-1/2
2-1/2
2-3/4

-

101.08

+.13

2.46

2.43

-.03

101.04
101.11
101.04
101.03
101.16
101.10
100.27
101.16
101.00

100.19
100.27
100.26
100.25
101.04
100.31
100.16
101.04
100.17

-.17
-.16
-.10
-.10
-.12
-.11
-.11
-.12
-.15

5/32*
2/32*

1/32

102.28
103.14
104.14
107.22
105.15
105.06

-.25
-.24
-.24
-.21
-.23
-.22

.41

.56

12/15/45

103.21
104.06
105.06
108.11
106.06
105.28

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

109.16
107.06
107.20
115.08
104.21
107.22

-.24
-.22
-.20
-.12
-.02
-.06

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

107.00
104.20
110.28
106.24
107.01
108.29

-.07
-.01

110.20
104.29
103.10
104.28

110.30
105.15

6/15/62-67
9/15/67-72

6/15/43

3/15/44
6/15/44
9/15/44
3/15/45

4/15/44-46
12/15/44-54

2-1/4

2-1/4
2-7/8
2-3/4
2-3/4

1.41wi

+.13
+.08
+.05

2

2-1/2

-

1.96
2.09
2.12
2.24

2

2-3/4

1.13

1.02

-

+.16
+.11
+.11

+.07

Bonds

3-1/8
4-1/4

.95

+.07

1-1/8

2-3/4

.84

+.18

1.90
1.91
1.96
2.03
2.09
2.22

Tax-exempt Notes

3/4

.55
.92

-

1.74

2-1/2

1

.37
.76

101.14
100.22
100.19
100.12
104.04
101,14
103.10

101.28

2

1-1/8

-.07

99.20
99.10
99.17
100.13wi

101.04

2-1/2

100.05

-.11
-.11
-.12

12/15/46

Taxable Bonds

2-1/4
2-1/2
2-1/2

.46

-

-

Taxable Notes

+.16

.36

-

Average rate last issue

Change

3/15/55-60

12/15/60-65

110.00
109.10
109.12
110.00

104.00
105.19
110.18
109.30
110.04
110.17

Treasury Department, Division of Research and Statistics.

Excess of price over zero yield.

.15

.00

-.06
-.03
-.02

-4/32*
-5/32*

.34

.45

.37

.50

.39

.50

+.11
+.13
+.13
+.11
+.13
+.11

.41

56

+.15

.22
.26

.26

.57

.71

.72

.84

.91
.94
.90

.92

+.15
+.14

1.00

+.12
+.01
+.11
+.10

1.11
1.09
1.13
1.33
1.15

1.17
1.17

+.08

1.18

+.05

1.30

1.38

1.36

-.03
-.02
-.02

1.33
1.26
1.59

-.02
-.06

+.11

1.33
1.28
1.65
1.60
1,66
1.74

+.10

1.78

+.18

1.70
1.68
1.80
2.00
2.01
2.07
2.10

1.72
1.63

+.06

+.08
+.13

+.22

+.23
+.18
+.20

+.24
+.17

1.05

1.13

1.55
1.59

1,68

1.60
1.73

1.94
1.95
2.01
2.06

+.06

.00

-.05
-.07
-.06
-.06
-.07
-.08
-.07
-.06
-.06
-.06
-.04

June 4, 1942.

95
Departmental in Washington only.

Reports from Field Offices are not
complete, but all of those received
thus far are over 10%.

I

96
WAR SAVINGS BOND CAMPAIGN ALLOTMENT OF DEPARTMENTAL
EMPLOYEES

Percentage of Pay Roll

June 2

June 3

June 4

Treasury
8.3

-

Office of the Secretary

10. *

Bureau of Accounts

8.5

9.5

9.7

Office of the Chief Clerk

7.6

8.7

9.7

Comptroller of Currency

9.3

10.3

Bureau of Customs

8.4

8.6

9.4

.3

1.7

2.7

Foreign Funds Control

6.1

8.7

8.6

Office of the General Counsel

1.8

3.3

5.1

Bureau of Internal Revenue

5.7

8.7

10.1 +

10.1

10.2

10.2 *

Division of Monetary Research

9.4

10.2

11.3'

Bureau of Narcotics

6.7

8.1

9.3

Personnel Division

8.1

10.2

10.2

Procurement Division

3.8

7.3

8.9

Bureau of the Public Debt

1.6

8.1

8.1

10.5

10.1

10.3

Division of Research and Statistics

6.5

8.9

9.4

Secret Service Division

7.1

9.1

11.3

8.0

9.9

10.4*

Division of Tax Research

6.2

7.6

7.8

Treasurer of the United States

4.0

7.3

7.3

4.8

7.0

7.7

Bureau of Engraving and Printing

Mint Bureau

Processing Tax Board of Review

Superintendent of the Treasury Building

War Savings Staff

Total, Treasury Department

10.5 &

a Barren
3.9

6.2

7.2

6/5/42

Mr. Kuhn reported that this memo has
been taken care of with the exception

of the part pertaining to Mrs. Morgenthau,
been and she able is to in contact the country her. and he hasn't

Mrs. Khotz said fonget 6/5/22

98

June 2, 1942

FOLLOW-UP FOR THE SECRETARY:

Is the attached memo to Mr. Kuhn finished?

99

May 30, 1942
Ferdinand Kuhn

Secretary Morgenthau

Think over the idea of letting Mrs. Morgenthau
make the bond speech appeal at Madison Square Garden

when the English war heroes come.

Another suggestion I have is if we could work

this, and you thought well of it, bring the English
war heroes directly to Washington and let then be
received by the President and then start them off on

their tour; but above all, let them come to the White
House and be received by the President. I think that
would give the whole thing a wonderful send-off.

100
THE WHITE HOUSE
WASHINGTON

6/5/42

dres Henry

This is same
in are

us of the ing, creational about which

spoke with you last

might

Cadeady

fam

101
TREASURY DEPARTMENT
DEFENSE SAVINGS STAFF

FICE OF STATE ADMINISTRATOR

June 2nd, 1942.
TO THE PRINCIPALS:

1. "SAVE FOR FREEDOM DAY""PROGRAM

In carrying out the resolutions adopted at the meeting of principals
and teachers of which we wrote you last week, we have prepared a suggested program
for "SAVE FOR FREEDOM DAY", June 15th, 1942. We are enclosing herewith a copy

of this suggested program and we urge upon you complete cooperation in the conduct
of this program.

2. SPECIAL RADIO BROADCAST (WQXR - 1560 on your dial)

In connection with the assembly on Monday afternoon, June 15th, we will
have a radio broadcast over WQXR from 5:00 to 5:15 P.M. This broadcast will consist of addresses by Walter Reed Wolf and Frederick F. Greenman, and a playlet

for children especially prepared for the occasion. In order to fit this broadcast
into your program, you should commence your assembly program not later than 4:45

P.M. The radio broadcast can be fitted in between items three and four on the
outline of the assembly program. In arranging for a radio broadcast, we were
aware that a large number of schools were furnished with radio sets in connection
with the defense activities. If your school does not have a radio, we suggest
that you have either a teacher or a pupil bring his or her radio to school for
the occasion.

3. WAR SAVINGS STAMP BOOKS

You will receive before June 15th books in which War Savings Stamps can
be pasted. These books are furnished by the Treasury Department and on the back

of them the letters J representing Jewish Education Committee are printed.
One of these books should be placed in the hands of every child in your school.

The Savings Stamps to be pasted in these books can be purchased at any one of the
thousand places provided for the sale of Savings Stamps by the Treasury Department,

such as post offices, drug stores, motion picture theatres and department stores.
You may, if you so choose, arrange for the sale of the Stamps at your school in
such manner as you please. The children may already have books from public
schools or other sources. We suggest that each child also obtain a JEC book and
that the child paste some of his stamps in this book.
4. PLEDGES TO BUY WAR SAVINGS STAMPS

You have or will soon receive printed pledges to be signed by the children
for the purchase of War Savings Stamps. Please have these pledges
signed and retain them in your school. These pledges should be signed
BUY
even though a child may have signed similar pledges elsewhere. The
program, enclosed herewith, makes provision for the taking of this
pledge orally in unison by all of the children, and we hope that you
will make this part of your assembly program.

FOR VICTORY

STAMPS

102

-20

5. FALL PROGRAM

Between now and the Fall, representatives of principals and teachers

working with us will devise fuller plans for the promotion of the sale of War
Savings Stamps in the Jewish religious schools. If you care to make any suggestions, please send them to me.

6. PARENTS AND FRIENDS OF PUPILS

Children should be encouraged to spread information concerning these

activities among these parents, members of their families and their friends.
We appreciate the cooperation which we have received from the schools
in the conduct of our program. We desire to express our thanks for such coopera-

tion.

Very truly yours,

Tues in 7%henman

FREDERICK F. GREENMAN, Representative

U.S. Treasury Department for the Promotion
of War Savings Stamps and Bonds.

Countersigned
nevil Ford
State Administrator

QUESTIONS AND ANSWERS FOR QUIZ ON FREEDOM

The Questions

1. What Jewish holiday is known as the festival of freedom?
2. who was the great Jewish emancipator?

3. What Jewish holiday tells about the fight of the Jews for religious

liberty?
4. What Jew helped win the American War for Independence by saving and
giving his money to the Government?
5. Who was the great American enancipator?

6. How does a knowledge of the Torah help us believe in freedom? 26, 1942.
7. What are the Four Freedoms
8. Which of the Tour Mendoms are important to the Jews?

9. What did freedom have to do with the coming of millions of Jews to
the

United States invited to attend a LUNCHEON, Mah Jong
Party, on Tuesday afternoon, June 2nd, at 12:30

10.
What seying d's THE Bet the home of Mrs. Murray J.
11. From what book df the Brath Are the
Sand

to
to
12. What is the Jewish Beateas whose poem Proceeds is inscribed
on the
the
Statue of Liberty Kindergarten Fund.
go

13. What does the poem teach us?

have Do COME and bring of we have arranged

14. Why Jeys Arternoon for you. We are looking
15. freedom?
How does
buying Bardenbel presser
to make Mrs. Sand happy.
Looking

forward

1. Passover
4. Hayim Salomon

to

2nd,

I

am,

2. Moses Very sincerely Four Hanukkah
5.

Abraham Lincoln Patman Freedman

6. The Torch has many laws and stories which holp us to understand what
freedom means and how to live as free Chadrman.

7.

(1) Freedom of speech; (2) freedom of religion; (3) freedom from fear;

(4) freedom from want.

8. All four.

9. They came here to seek freedom.

10. Proclaim liberty throughout the land, unto all the inhabitants thereof.
11. Leviticus (Chapter 25, 10).
12. Emma Lazarus.

13. That America is the land of freedom.
14. Because it has been part of our faith.
15. (Develop answers through discussion).

-8-

103

"SAYE FOR FREEDOM DAY"
JUNE 15TH, 1942

Suggested Program and Activities For Jewish Schools

It is suggested that "Save For Freedom Day" be observed by

suitable educational activities and programs by each class, and also by the
school as a whole assembled in the auditorium. Below is a list of suggested
classroom activities,* and an outline of an Assembly Program. Each school,
of course, will want to make such changes and additions as local circumstances
require.

A. Classroom Activities
1. Reading and discussion of sayings about freedom - See sayings
and statements in the source material appended to this

outline. The teacher, of course, will select several state-

ments in accordance with the ages and knowledge of the pupils
in his class.

2. Stories a. The story of Hayim Salomon, illustrating the importance of

saving and of contributing to the Government Treasury in the
winning of the Revolutionary War, and therefore in the founding
of the Republic of the United States.
Reference: "Hayim Salomon, Son of Liberty" by Howard Fast.
b. Other stories on freedom from Jewish and American sources.

3. Quiz on Freedom - Questions and answers will be found among
the appended source material.

4. Poems and Songs - several appropriate selections will be
included in this program.
B. Assembly Program

1. Salute to the American flag by the children.
2. Star Spangled Banner.

3. Readings from the Bible - choose one or two of the following
a. Psalm 140.

104
b. Defiance of the Tyrant, Isaiah XIV:13-23 - selection to
C.

be read by an individual or by a chorus.
Days, Isaiah II, 2-4 - This could be
In the End of
read effectively in responsive fashion as suggested on
page 9.

4. Talks by a pupil, and by principal or teacher on the subject of
"Save For Freedom" - talks ought to emphasize the importance of

this war to the United States, the Jewish people, and to the
whole world and the role each one of us must play toward
achieving victory. (See article by Frederick F. Greenmon,
included here.)

5. Toward Freedom - Mass recitation. See page 10.

6. Pledge to Save - recited by children in unison. A copy of this
pledge is included here.

7. Prayers.

a. Prayer for the Government. A suggested prayer is
included on page 9.

b. General Jewish prayer, such as

11"5y 3003 301

8. America the Beautiful and Hatikvah.

Note: Several items in this program will require preparation in
the classroom so that all the children may know their parts,
particularly the responses in the Bible Reading, the mass
recitation of "Toward Freedom, the pledge, and the prayer for the
government.

2-

105
FIGHTING ON THE ECONOMIC FRONT

By Frederick F. Greenman

(Summary of speech delivered at the conference of principals and teachers
of Jewish schools on May 21st, 1942 at the Hotel Pennsylvania, New York.)

I do not know where I can go to find a group of men and
women who are more expert in the knowledge of impregnating the hearts and
minds of children to do something. This has frequently been called a

Total War. It is a hackneyed phrcse, but very little understood. Some
people think it means that the difference between this war and all other
wars is that a civilian can be killed by bombs. That seems to be the

general opinion; but it is not the reality. It is a total war because

it requires everybody to enter into it and because everybody can suffer
from a disastrous outcome. It is frequently said that the wer is being

fought on three fronts; the military front, the production front and

the economic front. There are three functions to be performed; fighting,
producing and there is the saving. Those are the three functions which
are being performed at the present time. Each one is a big job. I think,
personally, the biggest one is the military one. Like most democracies,
we always start late. But we also have another characteristic in
democracies; we seem to got extra time. My only explanation is that
there is Divine Providence that gives us the extra time. We are not
responsible for it. If we had not been attacked at Pearl Harbor, we
would not have seen the action we have now for at least another six
months. Up to the time it happened, we shrugged our shoulders and
said it cannot happen here.

The military job will probably be the best job we shall
do. Our men will probably perform feats, the equal of which you have
never seen, because it is so challenging to the individual. From the
view point of any person who knows anything about military tactics it is
a tremendous achiovement to bring us into the position where WO may be
thinking of an offonsive at the present time. But none of us can do

that job. It is not a question of desire on our part; for the most

part, we are not young enough for the military job. So we come to the

production job; it is not a front line job, it is not as spectacular
as the military job, but it is just as necessary and important. At the
present time we have already equaled the product. on of Germany. If we
have done that already, we can readily assume that within a short while,
we will be heavily outproducing the Axis Powers.

But none of us produces; we do not, directly produce

the munitions of war. Our field is the economic field and what is this
is
economic field, what is it that we can do in it. The economic field
the field within which the sinews of war will be obtained; the money
with which to do all these things. The Treasury does not have the money;
the Treasury is not rich; it has just about enough to get along with.
When Uncle Sam needs some money, he draws a check on whom? On you and on

-3-

106
me, on our children; that is where he gets his money from. And we
have to furnish that money. But we also have another function to perform

which is equally important. This nation will probably earn in this year
the stupendous sum of 110 billion dollars. Of that sum we will probably
pay about 30 billion dollars in taxes; that leaves 80 billion dollars to
be spent. We are told by the Price Administrator that the inventory of
commodities will soon reach the 1932 level, which means that we will

spend out of the national income an additional 50 billion dollars. He
states that if we are to spend the whole of the 80 billion dollars on
these commodities, we will all be competing for these commodities and

the prices will rise and inflation will have to come into effect. This

means that 30 billion dollars must be put into war bonds and savings
stamps if we are to avoid inflation.

We are not doing the job well at all. What have we
relied on to do the job? A number of posters, some radio speeches and
a great many places where you can buy savings stamps. That means we

have provided a great many cash registers. Salesmanship is not
operating when you ring up a cash register. Selling is done by
advertising, building up good will and many other things. And so
Mr. Walter Reed Wolf came along with the idea - Mr. Wolf, a man with a
social mind, who is also a banker - and said, what you need is a motor,
something to start the pulleys moving to the point where there will be
an urge and an understanding as to why war savings stamps and bonds

should be bought. Now, who are the people who can do that? The people

who are connected with the religious institutions, the churches, the
synagogues, the religious schools; you can reach about one-half of the
population in a way in which it can be done from day to day. The average
citizen can read about the Fall of Bataan or Corregidor, but it is
thousands of miles away. What we need is something which will bring
home to us in our everyday life a discussion of the reasons why it is
so important to buy war savings stamps and bonds.
Now why should we buy war savings stamps? What you

are buying is freedom of the press, freedom of religion, trial by jury,
the safety of one's home, freedom from intrusion by search and seizure,
the right to sit in your home and not to fear when there is a knock on
the door, or when the telephone rings, We are buying a way of life, our

way of life; these are the things that you can teach to the children in
the schools. This is an educational campaign; it is education of the
highest order. Education is not worth very much if it does not reach to
some practical goal. It must lead somewhere, if it is to be effective,
either to a better life, better character or to some action, and that is
what this education is.

Whether we shall go on further to find out whether we
are to register this education through the purchase of stamps and bonds
is a question which we can leave for the future. The question is how do
we go about our educational camprign? We feel highly honored that the
Treasury Department should come to us and feel that we can be useful in

a program of this kind. We are all looking for something to do in this

-4-

107
war. We are all saying: what can you use me for? Here is something we
want you to do. You are experts in the field. You know better how to

to it, better than anyone else in the field. We want to undertake at

once, if we can, to register in some very dramatic way in every school

this idea, this impulse which can lead to the desired goal. I do not
want to burden you with all the kinds 01 things that can be done in

schools, such as essay contests, posters, slogans, song contests, honor

rolls. Everyone is capable himself of bringing this message to the
children in the schools. We do not want to over-organize, we do not
want to turn out a tremondous amount of literature. Everyone should
think out his own way of presenting his ideas. To us has been given a

rare opportunity to join in this work. I hope that we take full
advantage of it, get full credit for it and I am sure that everyone of

us will enjoy it immensely.

5

80T
ptus

(SSUTS up pus pre. equity OI)

pue mo TO zonpoid

7ON pue unreadable text ST 'secuet.redxe

pue up our DATU our TO aug outs

047 47TM Account up ATTNI os a STREPT up

*POATT your up Argunoo 047 TO

047 Tee 07 exact MUT

USTMO our 7041 your IO

098 s.reek perpuny - the 0.10m MVT

ST Emques eye UT the

JOJ SUTAIN smer our a say OSTO 7041 JOI 7I
JOI "ge28 sme our pe.redo.rd say so II se HOUSE
CONTITUOUS ut pue up quetted up week POUTBIA

JOI pouedeep 7I 80 TTeM su apen 7I
a SMOT

ULW until. LINDL.CH.
ULIU URCL. AUCH EL. LUFL tweett ILL NGG. ALLO

OUN.Q SLEWS as NOL.du cal usu* 0.10 BULL Call HOLLA'
SH ACI H.BIL.O KNLA MUN.L.NG.O AGU 44.1 CU LLG.O
SHOLING.O A4 6g ALING COL CHOLO
utd. HOL.CH KIOLIO RG ULA.11 UTLIS acc cr. UNLD

up

HU.O. ULK. BELLY HIL ULH u.ail
as WILL
ALMS
wideli
ill HGG.
at.a.

HAN.GL unoldu A4 uno UNOL.GH. casu URAL.D LINE
40.40 AL KLd COMOC UGW.GU UCLIGH USHU U.M AN.OW

no ALLS 0.10 SRO HILLS 110 REAL SGUXI AL

ALLING una.de CACE NU UNUCH GLOIDLA.4* COL el KILL

UKLIU 4014.2 CACE LTA. LUGL 454, HLC
ENLO'

Uss ALKS UOL.O unda 245.41 HU U.UIL.O CORU
140514 45510 HU .KLO 14001L HIS rang BG UCLIG

440 yo GOLD HILD 44,24UNUCH
U... ULLU
CUDIKLd*
RW
ULCU SOLOL
414.0 i°

-9

110
QUESTIONS AND ANSWERS FOR QUIZ ON FREEDOM

The Questions

1. What Jewish holiday is known as the festival of freedom?
2. Who was the great Jewish emancipator?

3. What
Jewish holiday tells about the fight of the Jews for religious
liberty?
4. What Jew helped win the American War for Independence by saving and
giving his money to the Government?

5. Who was the great American emancipator?

6. How does a knowledge of the Torah help us believe in freedom?
7. What are the Four Freedoms of the Atlantic Charter?
8. Which of the Four Freedoms are important to the Jews?
9. What did freedom have to do with the coming of millions of Jews to
the United States?

10. What saying is inscribed on the Liberty Bell?
11. From what book of the Bible was this seying taken?
12. What is the name of the Jewish poetess whose poem is inscribed on the
Statue of Liberty?
13. What does the poem teach us?

14. Why have Jews always been on the side of freedom?
15. How does buying War Saving Stamps and Bonds help preserve and extend
freedom?

The Answers

1. Passover
4. Hayim Salomon

2. Moses

3. Hanukkah

5. Abraham Lincoln

6. The Torah has many laws and storios which help us to understand what
freedom means and how to live as free men.

7. (1) Freedom of speech; (2) freedom of religion; (3) freedom from fear;
(4) freedom from want.

8. All four.

9. They came here to seek freedom.

10. Proclaim liberty throughout the land, unto all the inhabitants thereof.
11. Leviticus (Chapter 25, 10).
12. Emma Lazarus.

13. That America is the land of freedom.

14. Because it has been part of our faith.
15. (Develop answers through discussion).

-8-

111
AND IT SHALL COME TO PASS

(To be read responsively as indicated)
Leader:

And it shall come to pass in the end of days,
That the mountain of the Eternal's house shall be established
as the top of the mountains,

Children: And shall be exalted above the hills;
And all nations shall flow unto it.
Leader:

And many peoples shall go and say:

Children:

'Come ye, and let us go up to the mountain of the Eternal,
To the house of the God of Jacob;
And He will teach us of His ways,
And we will walk in His paths.

Leader:

Children:

For out of Zion shall go forth the law.

Leader:

And the word of the Eternal from Jerusalem.
And He shall judge between the nations,
And shall decide for many peoples;

Children: And they shall beat their $words into ploughshares,
And their spears into pruning-hooks;

Nation shall not lift up sword against nation,
Neither shall they learn war any more.

Isaiah, Chapter 2:2-4
7

A PRAYER FOR AMERICA

Almighty God, bless with health, courage, vision and high purpose,

the President of the United States and all leaders of our country,
that they may govern wisely and justly. Grunt that America continue
to be the land of freedom; that each one regardless of race and

religion may have equal opportunity to live a full, complete and

happy life. Imbue us with respect for law and responsibility for
our fellowmen. Strengthen the bonds of friendship and understanding
among all the people, that we may all work togother to end ignorance
and hatred, to improve health and learning, to seek beauty, truth and
goodness. May our country always strive to establish world peace and

justice for all. Amen.

112
Poems for Mass Recitation and Classroom Reading
TOWARD FREEDOM

(To be read responsively as indicated)
Children

Leader

At a time like this,

We will hold our heads high!

Bow not your head.
Work! Work!

We will work!

We will plow!

Ploughman, plow!
Sower, SOW your seed!

We will sow!

In an evil moment

We will!
We will!

Redouble your effort,
Redouble your toil.
Plant and dig!
Clear and fence!
Level and cast up
The highway of freedom

Toward freedom! toward light!

Toward a day of light.

The path of affliction
Marks the road of rodemption;
And the blood
Drawn by bondsman's lash

Cries out to the soul of the
people:

Labor we will!

RBe aroused and labor!
Be redeemed and redeem!"

We will redeem and be redeemed!
-- David Shimonowitz
*

*

*

THE OATH

We swear for freedom and truth to fight

Till there are no tyrants and slaves,

Till the dark forces are put to flight,
Or the battlefields are our graves.
-- S. An-sky

- 10 -

113
I LOVE THE SOIL

I love the soil upon which I go.
Where fat and fertile the rich saps flow.
Virgin soil, so yielding and sweet.
Her cooling grass is kissing my feet.
Her bowels smell like an apple-press.
And the soft breezes my cheeks caress.

I know my blood has not sanctified

This earth. For elsewhere my father died.

But my son is of this soil a part.
And his heart beats at one with her heart.
-- Israel Jacob Schwartz
(translated from the Yiddish)

OUR OWN

Jews of the great Republic,
Clasped to her mother-breast,
Nestling so warm and peaceful
Within that bosom blest,
Turn to our tortured Europe,
Hark to the myriad moan

Of pinched lips, white with hunger,
That stiffen as they groan,

And remember in these wan creatures runs the
blood that is your own.

Set your lips to the Shofar,
Waken a fiery blast,

Shrill to the heathen nations This slaughter shall be the last!
And send our old Poace-greating

Peeling from cot to throne,

Till menkind heeds the message
On the Hebrow trumpet blown,

And the faith of the whole world's peoples

is the faith that is our own.
-- Israel Zangwill

- 11 -

OFF

a.i.o
N4b4L
NG bqu

stur

is tell

1

adidas 1844

the

days LLLL

in with 4823

4040 DATE

Rali RCL'

time three

inte
like

MED

tiek is

&chous :

'Rac'

SHERL 18241

arria 'sL'

itas STAGE

item TRUL'

LIL achitical

L DRILL

is

48 that

4H TREE EREL.O'

48 is iu
:

4H it's EREL.O'

is itáu 48 this

4H FLIGL 1.5464

DESCRIBE

48 the e4 ind
when

stil.

true taicia
skids cut

RON.O ihain

LIO thain
libit is be.us
DEEK

9TT

SRICU ; 2810 ;
vali& iis LANGE -

tois visitude - e in the

i. CHAIL tthu HOUSE ingle iig-in

- tiku' - CHOEL
int add thru DECEMS
44-04-24 Date' risk use

BILL in bi.du'
u 122a' SHILLO is THE
124-743 to 0.451 th.du!
isidan 84.00 idio RE-TO

iis illi CRICK ;
u " ENGLISH

9TT

ENQ EXICA HOKLACK

all Health

scholl all N° receive

Cost
GHIL
Osh " LILL LILL HGR
THQ UKIGA HORL.CA

a.a heel CRUGAL SACALAL unra*

H.l K... 1111
QLHE! st a.a LLHNIFF GILL...
SHOAL HILLERL
KL 8 SHIL LING H.S ah..
LUICK! Hil 46.01

all L. EALT End KL L.

End L. .041 11.. O.Q
and
ING zates
a.il SOEK suak upsai

GHL HIN SHIL
HIN ELHCA!
SHOAL HGR H.J

ONL Hal UG.44 ani and all race*

INQ 5..4 4 L
all HELUO health

all ING 11. 11...

H.L URL LNG 40h

THL 1... L. Kooa

all SOEK GLAL

L. okca.dr -

all 4.85 will
agso'
LHLall
deart
11KC-

R. GL. K. maka

at SKLRL OHL all 40h
INCO
it:
L. 111
Had

L. K..O - Ka Had dest 4410;

Re Kda L. INCO
L. LINGO LOLISHED -

014 UNGELEE
4100 all aaldel'
LL URLAU - Hgl 4100
LEGG:

KL asa Hill dLNGG as shult
set Had 1. (ILL. O.L

all :

4.8 Had L. KLL C.O.L Hish LIRGERL H.L alia
OLA Had L. RLL LN all OLICUEAL all aRq*

ALL HII. 0.44

disa Casta SIL.C a.a H.L TLIII Hills doggo
UI.CO all N.L

CHE L. all real and and
C,11..0 a,Hes L. BLL r.d a.4 EGSC

0,4.50 BLERD HILKLA a.d UHOR and 410*

NERL 0..1 d.f. all N.L BLL H.S H and

400CC N.I Hab 4.50' Had KHEG.du all St shod

117

10
STAMP
STAMPS

POSTAL SAVINGS PLAN
for the Purchase of

UNITED STATES
DEFENSE
SAVINGS BONDS
Rasias

118

Analysis of Exposure to Payroll

vings Plans

May 30, 1942

Total number

Number exposed

in the

to payroll

country
(estimated)

savings plans

Percent

of total

exposed

Part A - Summary by Number of Organizations Exposed

I. Business organizations
(1) Firms with 5,000 employees or more

475

479

99

6,111

78

(3) Firms with 100 to 499 employees

4,768
18,169

26,998

67

(4) Subtotal - large firms

23,412

33,588

70

(5) Firms with less than 100 employees
(6) Total business organizations

67,006

#

II. Governmental organizations

90,418

*

(2) Firms with 500 to 999 employees

#

90,418

III. Grand total

Part B - Summary by Number of Employees Exposed

I. Business organizations
#

#

18,605,454
.

20,469,817

*

1,864,363

#

(5) Firms with less than 100 employees
(6) Total business organizations

#

(4) Subtotal - large firms

#

(2) Firms with 500 to 4.999 employees
(3) Firms with 100 to 499 employees

7,771,558
6,499,495
4,334,401

"

(1) Firms with 5,000 employees or more

30,000,000 1

68

II. Governmental organizations

(2) State and local governments

1,121,159

2,100,000 1
2,700,000

(3) Total governmental organizations

1,519,140

4,800,000

(1) Federal Government

III. Grand total

397,981

21,988,957

34,800,000 1

Office of the Secretary of the Treasury,
Division of Research and Statistics.
Excludes agricultural employees, military personnel, employees on WPA or NYA or CCC service. projects,

proprietors, firm members, self-employed, casual workers and persons in domestic
Data not available.

19

32

63

June 5, 1942.

1

119

Firms Employing 100 to 499 Persons Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)
savings plans

:
:

Alabama

Arisona

Arkansas

Northern California
Southern California
Colorado

Connecticut
Delaware

District of Columbia
Florida
Georgia

43

49

44

47

Illinois
Indiana

Kansas

Kentucky

Louisiana

of firms

May 30

52

72

73

67

77

77

142

31

33

87

64

49

Apr. 18

May 23

(estimated)

572

589

802

818

171

65

118

118

277

294

300

124
622

91

113

512
756

49

21

49

85

95

95

48

45

49

34

52

71

75

169

171

171

133

203

244

590

58/20

100

99

86

23
79

39

58

58

25

147

31

70

47

152

31

33

100

589

34

41

79

79

65

66

88

92
74

1,300

1,491

2,252

58

1,464
519
200

541

587

71

415

200#

272

61

74

99

276

277

277

99

276

175

44

171

312

136

230

384

179

238

K7

60

76

165

Iowa

savings plans

number

285

209

205

31

Idaho

May 30

May 23

149

:

Apr. 18

:

State

Percent of total having payroll

Total

Number of firms with payroll

100
56

66

62

38

like

198

30

87

54

177

219

44

217

405

47

Massachusett:

639

76

79

779
409

806

Michigan
Minnesota

689

1,523
1,022

45

711

42

692

91

99

413

413

4

43

664

71

84

44

91

4h

110

123

84

21

67

Maine

Maryland

Mississippi
Missouri
Montana

Nebrasks

376

472
40

43

103

108

Nevada

New Hampshire
New Jersey

89

New Mexico
New York

North Carolina
North Dakota
Ohio

569

559

14

463

16

16

100

100

586

636

2,553

282

345

14

1,842
175

Vermont

69

99

2,032

83

224

69

178

41

112

174

199*

403

410

1,376

44*

44

79
64

96

4h

44

24

29

94

348
323

Washington

234

West Virginia

134

140

140

343

373

272
680

278

49

95

95

100

82

84

51

51

94

51
55

100

100

100

100

2

2
2

49

49

49

52

94

94

66

Total

Lo

98

50

100
2*

44

72

18

18

18

17

81

100

30

40

59

271

Railroads

92

57

32

111
63

60

60

449

95

78

91

199

58

91

23

23

22

341

Alaska

66

68

65

264

Wyoming

62

72

66

48

281

Wisconsin

79

60

49

348

Virginia

79

94

154

36

73

78

1,682

326

69

68

271

1,867

Utah

76

69

58

211

Texas

89

76

48

Oregon

199

100

345

257

Tennessee

98
88

1,739

201

21

86

1,188

255

South Dakota

43

1,179

166

71

100

68

Oklahoma

South Carolina

79

29

201

Pennsylvania
Rhode Island

867

499

358

19

1,126

61

53

4,240

2,624

2,060

145

42

33*

33

33

143

62

62

59

67

54

15,365

17,703

18,169

26,998

94

67

57

June 5, 1942.

Office of the Secretary of the Treasury, Division of Research and Statistics.
*

Data are for May 23, inasmuch as no May 30 report was received.

120

Firms Employing 500 Persons or More Participating in Payroll Savings Plans
(As reported by the Defense Savings Staff's State Administrators)

Apr. 18
47

Connecticut
Delaware

District of Columbia
Florida
Georgia
Idaho

Illinois
Indiana

53

69

71

75

75

75

73

73

73

22

124

70

71

71

12/1

175
162

75

78

78

126

127

93

96

25

26

27

76

76

114

116

116

16

16

122
121

89

28

152

75

ZUN

63

24

18

15

18

32

32

32

28

30

30

63

86

105

106

111

to

53

11

44

11

11

11

391

413

88

117

22

29

24

24

24,

23

42

42

71

38
29

37

417

546

121

168

29*

95

100

100

72

76

76

70

72

71

71

100

100

59

59

LB

51

54

Louisiana
Maine

Maryland

Massachusetta
Michigan

Minnesota

Mississippi
Missouri.

54

38

EX

237

259

260

350

271

272

309

265
26

29

30

103

84

95

95

9/1

79

76

68

85

85

77

134

88

88

86

38

114

114

91

82

7

68

8h

8o

80

79

91

79

107

90

88

83

58

53

48
84

77

39

95

77

100
52

41

48

48

96

Kentucky

60

250

60

Iowa

Kansas

May 30

May 23

16

9

Colorado

12

Apr. 18

9

Northern California
Southern California

77

9

Arizona
Arkansas

(estimated)

55

53

Alabama

of firms
May 30

May 23

savings plans

number

savings plans

State

Percent of total having payroll

Total

Number of firma with payroll

100

100

100

77

77

3
3

3

Montana

3

New Jersey

h

New Hampshire

29

31

142

155

31

31

198

158

796

126

128

1,084

70

160

64

80
79

0

0

412
31

62

50

38

38

85

84

491

420

419

91

53
53

L8

53

61

103

100
5
5
5

Texas

63

West Virginia

Wisconsin

10

10a
12

12

49

71

83

153

100

100

100

97

97
81

72

66

89

100

100

100

100

3
3

Total

3

3

Railroads

89

90

100

1

Wyoming

Alaska

52
63

63

61

137

136

49

52

93

59

54

O

36

127

100

69

56

50

50

16

100

97

97

93

44

12

8

12

142

100

1

Washington

74

74

102

49

1

Virginia

50#

100
49

5

50

85

91

91

82

94

50

92

75

81

94

84

76

100

85

69

69

76

100
92

89

619

570

570

551

Tennessee
Utah
Vermont

86

0

South Dakota

73

73

0

Rhode Island
South Carolina

103

795

100

100

0

Pennsylvania.

759

80

0

Oregon

78

100

0

Oklahoma

5

Ohio

5

North Carolina
North Dakota

72

100

5

New Mexico
New York

94

100

4

4

Nevade

86

80

80
5

Nebraska

74
31

2h

2h

23

95

109

4.86b

109

5,195

109

115

5,243

5,590

95

95

74

79

80

June 5, 1942.

.

Office of the Secretary of the Treasury, Division of Research and Statistics.
Date are for May 23, inasmuch as no May 30 report was received

CONFIDENTIAL

121

UNITED STATES SAVINGS BONDS - SERIES E

Comparison of June sales to date with sales during the
same number of business days in April and May 1942

(At issue price in thousands of dollars)
:
June

:
:

:
:

sales

Cumulative sales by business days
June as
May
April
:
:

daily

:

:
:

Date

June

:percent of May

:

June 1942
1
2

3
4

$ 19,834

$ 19,834

$ 12,679

$ 12.993

8,008

27,841

24,263

24,256

114.7

12,970

40,811

46,532

35,050

87.7

17,388

58,199

55,460

47,119

104.9

Office of the Secretary of the Treasury,
Division of Research and Statistics.

156.4%

June 5, 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.

CONFIDENTIAL

122

UNITED STATES SAVINGS BONDS - SERIES F AND G COMBINED

Comparison of June sales to date with sales during the
same number of business days in April and May 1942

(At issue price in thousands of dollars)
Cumulative sales by business days June as
April
May
percent of May
:

:

:

:
:
:

sales

June

:
:

daily

:

:
:
:

Date

June

1942

1
2

3
4

132.9%

$ 9,705

$ 9.705

$ 7,302

$ 11,987

17,601

15,168

21,677

116.0

7,895

26,235

25,516

29,097

102.8

8,634

13,774

40,009

33,145

35,818

120.7

Office of the Secretary of the Treasury,
Division of Research and Statistics.

June 5. 1942.

Source: All figures are deposits with the Treasurer of the United States on
Note:

account of proceeds of sales of United States savings bonds.
Figures have been rounded to nearest thousand and will not necessarily
add to totals.

CONFIDENTIAL
123

UNITED STATES SAVINGS BONDS - TOTAL

Comparison of June sales to date with sales during the
same number of business days in April and May 1942

(At issue price in thousands of dollars)

May

April

:

:
:

:
:

sales

June

:

daily

Cumulative sales by business days
:

:

:
:

Date

June

June as

:Percent of May

:
June 1942
1
2

147.8%

$ 29,539

$ 29,539

$ 19,981

$ 24,980

45,442

39,430

45,933

115.2

15,903

67,046

72,048

64,147

93.1

21,604

88,605

82,937

110.8

31,162

98,208

3
4

June 5, 1942.

Office of the Secretary of the Treasury,
Division of Research and Statistics.

Source: All figures are deposits with the Treasurer of the United States on
Note:

account of proceeds of sales of United States savings bonds.
Figures have been rounded to nearest thousand and will not necessarily
add to totals.

124
Sales of United States Savings Bonds
From June 1 through June 4. 1942

CONFIDENTIAL

Compared with Sales Quota for Same Pe

(At issue price in millions of dollars

:

:

:
:

1
2

8
9

30

80.2%

89.3
82.1

94.3

June 1

to

to

Date

Date

:

:

29

:

27

:

26

:

24

25

13.8

:

23

19.7
31.9
42.4
51.0
57.6

:

22

$ 12.1

17.6
26.2
40.0

:

19

20

$ 9.7

7.9
8.6

Daily

Quota

June 1

Quota,

$ 29.5

$ 29.5

$ 33.8

15.9
21.6
31.2

45.4
67.0
98.2

51.7
78.3
106.0
130.6
151.3

120.0
132.4
149.6
170.0
189.0
205.6

69.6
77.3
89.5
100.0
108.6
115.1

189.6
209.7
239.1
270.0
297.6
320.7

236.5
251.1
271.3
295.2
317.4
336.9

127.2
134.8
147.1
157.6
166.2
172.7

363.7
385.9
418.4
452.8
483.6
509.6

373.0
390.0
413.5
441.1
466.8
489.2

184.8
192.4
204.6
215.2
223.7
230.3

557.8
582.4
618.1
656.3
690.5
719.5

530.6
550.0

242.4
250.0

773.0
800.0

Office of the Secretary of the Treasury, Division of Research and Statistics.
Source: Actual sales 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 and will not necessarily add to totals.
Takes into account daily trend within the week, but does not take into account the trend by weeks during the month.

:

18

:

17

:

16

$ 9.7

:

15

86.9
87.9
91.5

Date*

:

13

91.2%

as % of

: June 1 : to Date
to

Total

Actual Sales

:

12

27.8
40.8
58.2

32.0
46.4
63.6
79.6
93.7

Date

Quota

Sales

:

10

11

:

17.4

$ 21.7

:

13.0

$ 19.8

to

:

8.0

Date

Daily

:

19.8

Date

to

June 1

Quota,

:

Daily

to

as % of

: June 1 : to Date

June 1

Actual Sales

:

Date

Sales

:

Actual Sales

: Quota,

:

Series F and G

Series E

Sales
Date

to

as % of
Quota
87.3%

87.8
85.6
92.6

June

5.

1942.

.

125
Office of the Attorney General

4 OF

Mashington,I.C.

**

June 5, 1942

Dear Henry:

Thank you so much for your letters of

recent date, enclosing a report of the sales
of War Bonds during the month of May, as well
as a statement showing "Financing During May#.
Sincerely yours,

tremensor

Francis Biddle

Honorable Henry Morgenthau

Secretary of the Treasury
Washington, D. C.

126
OFFICE OF LEND-LEASE ADMINISTRATION
FIVE-FIFTEEN 22d STREET NW.
WASHINGTON D.C.

E.R. Stettinius, Jr.
Administrator

June 5, 1942

My dear Mr. Secretary,

Thank you for your letter of June 3
containing a statement showing financing operations
which produced cash and financing operations which

involved only refunding for the month of May.
I have studied this statement with much

interest and I appreciate your sending it to me.
Sincerely yours,

E. R. Stettinius, Jr.

The Honorable

The Secretary of the Treasury

127

G

THE SECRETARY OF COMMERCE

STATE

WASHINGTON
SECURITY
of

June 5, 1942

Dear Henry:

Thank you for your letters of June 2
and 3, enclosing the May report of War Bond sales,

and the summary of May financing, respectively. I
am glad to have them.

With best wishes,

Sincerely yours,

Secretary of Commerce

Jona
Hon. Henry Morgenthau, Jr.

Secretary of the Treasury

128

June 5, 1942.

Dear Franklin:

I was very glad to hear from you and to have you

raise the question in regard to Agent Gosnell, of the

Secret Service. It is fine to hear that you think so

highly of him.

I asked Chief Wilson for a confidential report on
Gosnell's salary, and also on the salaries of other
agents who are on the detail to guard your children.

I an sending you a copy of his response to my request.
Chief Wilson's explanation of the situation seems to me
a satisfactory one, and I hope it will impress you in
the same way.

I hope that you have completely regained your health
and if, by any chance, you are at Hyde Park during the
next week, we would love to see you, as Bob is spending
his ten-days' leave on the farm.
Sincerely,

Henry Morgenthau, Jr.

copy to Mrs. m.
Lieutenant Franklin D. Roosevelt, Jr.,
U. S. N.R.
East Norwich, Long Island,
New York.
GEF/dbs

Filenme

N

in

-

6/5/42-

FRANKLIN D. ROOSEVELT, JR.
EAST NORWICH

LONG ISLAND, N.Y.

June /

Dear Mr. Morgantheau,

I hate to bother you with a relatively small
matter at times like these but I do not feel that I am in
a position to speak to the chief of the Secret Service
concerning this matter, directly.
I now have five secret service agents on the

detail with my children. The head of this detail is Agent

Gosnell, who has been in the service for five years and has
been with me for the past three years. His record is
excellent and I have never had a reason to complain in any
way and I hope that he will remain at his present post,
especially in view of the fact that as I am away at sea so
much, I feel much safer about the children, knowing that I
have a reliable experienced man taking care of them.

However, it is difficult for him to be
completely happy because of what seems to me to be a

very unfair salary difference between hisand the other
agents on the detail.
Two men have been in the service for approximately nine months and are now receiving $2,900. per annum.
The other two men, who have only been in the service since
this past January, are receiving $2,600. per annum. Agent

Gosnell, with his five years of service, still receives

$2,600. per annum. I feel that he should at least receive

$2,900. per annum.

I know that the problems of salaries in the Secret
Service is a most involved one and that similar difficulties
have been encountered with the outfit in the White House. How-

ever, I feel that this inequality may be remedied if brought
to the attention of the proper people.

in January months
I saw Bobby in Norfolk about
two ago and

it certainly was great to see him in uniform. He seems to
like the service and to be doing a great job. Give him my
best when next you write to him.

Also, I want to thank you for the wonderful
books you sent me in the hospital. I am up and around again

copy 123
6/5/42

N
FRANKLIN D. ROOSEVELT, JR.
KAST NORWICH

LONG ISLAND, N.Y.

June

1942

Dear Mr. Morgantheau,

I hate to bother you with a relatively small
matter at times like these but I do not feel that I am in
a position to speak to the chief of the Secret Service
concerning this matter, directly.

I now have five secret service agents on the

detail with my children. The head of this detail is Agent

Gosnell, who has been in the service for five years and has
been with me for the past three years. His record is
excellent and I have never had a reason to complain in any
way and I hope that he will remain at his present post,
especially in view of the fact that as I am away at sea so
much, I feel much safer about the children, knowing that I
have a reliable experienced man taking care of them.

However, it is difficult for him to be
completely happy because of what seems to me to be a
very unfair salary difference between hanand the other
agents on the detail.

Two men have been in the service for approximately nine months and are now receiving $2,900. per annum.
The other two men, who have only been in the service since
this past January, are receiving $2,600. per annum. Agent

Gosnell, with his five years of service, still receives
$2,600. per annum. I feel that he should at least receive

$2,900. per annum.

I know that the problems of salaries in the Secret
Service is a most involved one and that similar difficulties
have been encountered with the outfit in the White House. How-

ever, I feel that this inequality may be remedied if brought
to the attention of the proper people.

in

January

I saw Bobby in Norfolk about two months ago and

it certainly was great to see him in uniform. He seems to
like the service and to be doing a great job. Give him my
best when next you write to him.

Also, I want to thank you for the wonderful
books you sent me in the hospital. I am up and around again

130

FRANKLIN D. ROOSEVELT, JR.
EAST NORWICH

LONG ISLAND, N.Y.

-2and expect to go back to sea very shortly.

Again, I apologize for troubling you with
my secret service problems, but I can only hope that you
will forgive me, under the circumstances.
Sincerely yours,

Hauldni
Lieut. (jg) U. S. N. R.

The Hon. Henry S. Morgenthau, Jr.

The Secretary of the Treasury

Department of Justice
Washington, D. C.

P.R. I dictated this letter several
wests ago but before of could send

it of I went back to the hospital
with pneumonia and a gueen blood
disease. However I'm obay now and

am leaving for my destroyer in a
couple of days. five my best to
Mr. Marganthan
TORIF

REFER

TO

FILE

No.

TREASURY DEPARTMENT
WASHINGTON, D.C.
OFFICE OF THE CHIEF
U.S SECRET SERVICE

June 3, 1942
Memorandum for the Secretary

From Chief, Secret Service

A letter to you from Franklin D. Roosevelt, Jr., dated
June 1, relating to the salary paid Agent Robert J. Gosnell,

is returned herewith.

Agent Gosnell was employed as a clerk in this Service
at $1440 per year on March 25, 1937, and he was increased

$860 per year, being promoted to the position of Agent at

$2300 per annum on September 16, 1939. He received a promotion of $100 on October 1, 1941, and $200 on February 2,
1942, making his present salary $2600. He had no criminal
investigative experience before becoming an agent in this

Service. He has had three years' experience on a protection
detail for this Service and his salary has been increased
$1160 since September of 1939. His services have been
satisfactory.

Two of the agents on the Franklin D. Roosevelt, Jr. detail have been in the Secret Service for about one year and
now receive $2900. They were experienced enforcement of-

ficers and required no special training upon entrance into

this Service; one has been engaged in law-enforcement work

for eight years and the other for five years. They are
qualified to handle important criminal investigations as
well as to perform duties on the protection detail.

The other two agents on the detail receive $2600 per year,
one having been in this Service for one year and the other
for six months. One of them had been with the Massachusetts
State Police for over ten years and the other with a New York
State Police Department about two years, and their lawenforcement experience qualifies them to perform criminal

investigations as well as to perform duties on the protection
detail.

FORDEFENSE

-

BUY
UNITED

STATES

SAVINGS

BONDS

Agent Gosnell is trained to perform duties on a protection
detail but has had slight experience in the performance of

criminal investigations. In view of the fact that he has

30131

REFER TO FILE No.

30131

TREASURY DEPARTMENT
WASHINGTON D.C.
OFFICE OF THE CHIEF
U. SECRET SERVICE

June 3, 1942
Memorandum for the Secretary

From Chief, Secret Service

A letter to you from Franklin D. Roosevelt, Jr., dated
June
1, relating
to the salary paid Agent Robert J. Gosnell,
is
returned
herewith.
Agent Gosnell was employed as a clerk in this Service
at $1440 per year on March 25, 1937, and he was increased
$860 per year, being promoted to the position of Agent at
$2300 per annum on September 16, 1939. He received a promotion of $100 on October 1, 1941, and $200 on February 2,
1942, making his present salary $2600. He had no criminal
investigative experience before becoming an agent in this
Service. He has had three years' experience on a protection
detail for this Service and his salary has been increased
$1160 since September of 1939. His services have been
satisfactory.

Two of the agents on the Franklin D. Roosevelt, Jr. detail have been in the Secret Service for about one year and
now receive $2900. They were experienced enforcement of-

ficers and required no special training upon entrance into

this Service; one has been engaged in law-enforcement work

for eight years and the other for five years. They are
qualified to handle important criminal investigations as
well as to perform duties on the protection detail.

The other two agents on the detail receive $2600 per year,
one having been in this Service for one year and the other
for six months. One of them had been with the Massachusetts
State Police for over ten years and the other with a New York
State Police Department about two years, and their lawenforcement experience qualifies them to perform criminal
investigations as well as to perform duties on the protection
detail.

FORDEFENSE

BUY
UNITED
STATES
SAVINGS

BONDS

Agent Gosnell is trained to perform duties on a protection
detail but has had slight experience in the performance of

criminal investigations. In view of the fact that he has

132

-2 received three promotions, September of 1939, October 1, 1941,

and February 1, 1942, it is felt that he has been given
favorable consideration. The difference in the salary paid

to the agents employed on the detail with him is because
they came to the Secret Service as trained law -enforcement
agents and are qualified at any time they are released from
the protection detail for immediate assignment on important
criminal cases.

you

133

Supreme Court of the United States
Washington D.C.

June 5, 1942

CHAMBERS OF

USTICE FELIX FRANKFURTER

My dear Mr. Secretary:

I now know the wisdom of giving the Treasury a contingent fund from
which expenditures may be made without accountability. But I am sorry also

to learn that the idea of a rubber dollar did not originate with Professor
Warren or even at Cornell, but is the natural offspring of the Expanso Belt.
And one more though occurs to me. If at the end of administering
the Treasury for an even longer period than Abraham Gallatin held office, and

certainly with not less distinction, you still have too much energy left for
mere retirement, I cannot think of a more prosperous employment of your talents
than as the owner of the Morgenthau Apiary, of which the slogan will be:"A
Honey Belt with Every Jar of Honey".

And so, my dear Mr. Secretary, I remain a grousing taxpayer, but a
most appreciative luncheon guest, with sentiments of esteem and affection,

Faithfully yours,

fruit

Hon. Henry Morgenthau, Jr.

134

June 5. 1942.

Dear Kades:

I have been attempting to answer your fine letter of
April 26 in longhand; hence, the umpardonable delay. Rather
than let your letter remain unansvered any longer. however,
I an now dictating a hasty note, just to let you know how
much I enjoyed hearing from you, and how deeply I appreciate
the high regard that you evidently have for no. You were a
tower of strength in the General Counsel's office, and I want

you to know that I fully appreciate all that you gave of
yourself to the work there. I can assure you that you are
greatly missed in the Treasury.

I admire tremendously your attitude about getting into
active service, and an sure that you will get a great deal
of personal satisfaction out of it. I do hope that when you
return to Washington on a visit, you will come in to have a
meal with me, and tell me all about your experiences.
With kindest regards,
Sincerely,
(Signed) N. Morgeathan, in

Mr. Charles L. Kades,
Apartment 15-A,
Country Club Apartments,
Columbus, Georgia.
GE /dbs

file n.m C.

135

bearus fun you

Dear Kades:

abouty notes pint
I have been attempting to answer your fine letter
of April 26th in longhand; hence, the unpardonable delay.
Rather than let your letter remain unanswered any longer, homerow
I am, (dictating & few lines to to let you know how much
I enjoyed your tter and how region I appreciate the
high regard that you evidently have for me. You were a
tower of strength in the General Counsel's office, and

I want you to know that I fully appreciate all that you

have given of yourself, and youdeeple
are greatly missed. M the Treasury
I admire tremendously your attitude about getting

into active service and am sure that you will get a
great deal of personal satisfaction out of it. I do

hope that when you return on a visit to Washington that
you will come in to have a meal with me, and tell me all
about your experiences.

With kindest regards,
Sincerely,
&

Then

(Incurrent
you

136
CHARLES L. KADES
0004 CLEVELAND AVENUE N. W.
WASHINGTON, D.O.

Sunday april 26th
Dear Mr. Secretary

Barely a mouth has
passed since l left Washington for
Fort Benning, but it plents l much

longer ago than that suppose

that like many other things, one's

associates are most appreciated when

he is deprived of them Much I
enjoyed working with everyone in the

Treasury. never imagined could
and miss so many persons so beenly.

perhaps that is the reason
why a mouth seems to have
stretched into an age

b it is not a
lack of work at the

infantry School is so packed to that believe

one has to experience it the

it possible seven in

morning until five in the afternoon
every day. except Sunday, plus

2.

3

137

at least two mights of field prois

which
anlast until pdst

also weak pretty in mathematics strong stuff as for me one l think as

plus enormous the amount of day

I could even make my checkbook

preparation homework for which following is

balance with the banks statement after

done, and review for decameration

finish this course!

required

- all this concentrated in every

keeps us all busy. the course was

I am taking is called the boulnt
Platoon bordmander Course and forms

was a mine months affair which has
been telescoped into three months

without any material modification
in the subject matter it his daugh
to qualify junior officers The infantry
riple

l have heen very favorably

impressed with the
faculty. business
instructors
know
their and

spare no efforts to pacs on their
knowledge to the student officers I
have not been so favoribly imprised
with have way the the federal Government

has
housing
problem
here the
I don't
know where
the

heavy and compare

responsibility rests but The someone

Since the objective is success in bath

here has bungled are worse badly than Ed and conditions l saw

the are not burdened with any
instruction not directly related to

combat But for a person
like
take a

an the

and long myself out who of couldn't engine assemic again

nd dreakerally of machine gun

in San Diego -and there seems The little

icuse for sucha situation

Public Health Service hasalso fallen
down miserably in dealing with the

the veneral disease problem

knid us automatic rylan
is of complex! and again

cases here are running into thous
ands - and the Federal Security

technique of fire and mapping are

agency sends an old lady here

5.

by the name of the Bascom Johnson

surpposed
a
Philadelphialy
- who blames conditions

138

I fiel that your courage in coming

any issue facing you
your
strict enoughwa they your humanitarlanism have in
instead of striking day to day administration which

at obvious misfearabice of loan
police authorities in failing to hre

given me a perspective It makes

will always treasure me

up commercialized lice sings which
import women from other communi

want to emulate you constantly, and
I find myself unconsorously or maybe

The b Surgeon General, and

subcouscrously testing something what

alumbus need a Sammy
a sanctionamirus pillar of the churs

propose
do by
you
would do to
under
thewondering
Arcunstances.
l do not want to he fulsome, hit

The the lack of statesmanship in

meeting problems of a large milite
postle under present conditions has

emphasized for me I the great

phiniga which have enjoyed
of having on your staff It is
not only that your leadership

and high-mindeduces provider

to

in reservate the treasury of inspiration fortunate for enough those

l come into contact with you
feel it is more than that

d sincerely feel that one had of been the the chief

rewards of my life

opportunity of working for that you

and
feel itlike
so deeply
don'tI even
to write about it
However, I was unable to say goodbye

I because came you were and in cl do hope aryoua you when

understand how grateful when I am for d

all
your
every
was at Treasury Morgenthand couney

my kindest regards Very pincerely, bhuck Kades

139

JUN 5 1942

Dear Archies

In line with our recent telephone conversation, I should like to take advantage of your
generous offer of assistance on nose of our
problems. Accordingly. for our immediate purposes
I should appreciate your taking available to as

as much of the time of Dr. likert and his staff
AS 1 find necessary to CAFFY out the research
which we are planning.

It will take a little time and experimentation
to indicate the full extent of assistance which will
be required, but in the interin would it be agreeable
to you for so to call upon Dr. Likert as freely as
the needs of the situation dictatel
Sincerely,
(Signed) Henry

Honorable Archihald MacLeigh,

Director,
Office of Thats and Figures,
Washington, D. C.

nmc
By Messenger Brown lils
copies to Shompoon
GCH,RL:ek

6/5/42

.

140
THE WHITE HOUSE
WASHINGTON

June 5, 1942

Dear Henry:

Thank you for preparing the letter

to Mrs. Imhoff for me. It is a grand letter
and I have sent it on to Mrs. Imhoff.
Affectionately,

Thann

141

JUN 3 1942

Dear Meason

1 have prepared the attached letter to

Mrs. Inhoff for your signature. I - sorry

that there is no practical way we could help
her with a leas. The Pepper Bill (s. 2540)
referred to is the letter. which is designed
to meet problems like here, was introduced
May 18 and referred to the Committee on
Banking and Currency.

Affectionately,
(Signed) Henry

Mrs. Preaklin D. Reesevelt,
The White House.

n.m.c Hompon
Capital

ss agent 4:45p.m.

142

by dear Mrs. Intern

Your letter of May 22 adds strongly to my deep appreciation of the
difficulties many of us will face in the months about, when the Nation's
war effort west inevitably interfere more and more with normal civilian
life. I admire the courageous spirit with which you are fasing those
difficulties, and I wish that I could suggest some convenient solution.
can, however, give you one OF two ideas which I hope may is some way

I

be helpful.

I wonder If the two problems mentioned in your letter - maintaining
payments on your cottages, and paying your living expenses - could not
be handled separately. Could the payments es your cottages be rearranged,
perhaps suspending the principal payments for a time while you mistaia

the interest Then, with the shortage of manpower that is rapidly

developing. 11 may be possible for your husband to find a better-paying
occupation during the was emergency. I would suggest that he write or
call at your marret United States Employment Office, at 20 Smith Street,
Ukiah, California, for information on possible opportunities.
As you probably know. the Congress and various administrative
agencies of the Government have been giving a great deal of thought to

the problem of relieving distress and financial hardship arising from
necessary adjustments to a full wartine effort. Only recently, a will
to create a over Distress Please Corporation" was introduced in the
Senate. While 1 do not know. of course, what arrangements will finally
be made, I hope and trust a way will be found to assist is relieving
hardships such as yours.

I greatly appreciate your kind words of management to the
President and agreelf. and the strong spirit of patriotism evidenced by

your letter.

Sincerely,

Mrs. Helen Inheff,
Sex 317.

Littleriver,
Mendoeine County, California.

142

My dear Mrs. Inhoffi

Your letter of May 22 adds strongly to my deep appreciation of the
difficulties many of us will face in the months aboat, when the Nation's
war effort must inevitably interfere more and more with normal civilian
life. I admire the courageous spirit with which you are fasing these
difficulties, and I wish that I could suggest some convenient solution.
can, however, give you one OF two ideas which I hope may is some way

I

be helpful.

I wonder if the two problems mentioned in your letter - maintaining

payments on your cottages, and paying your living expenses - could not
be handled separately. Could the payments on your cettages be rearranged,
perhaps suspending the principal payments for a time while you maintain

the interest Then, with the shortage of manpower that is rapidly

developing. 18 may be possible for your husband to find a better-paying
occupation during the war energency. I would suggest that he write OF
call at your meanest United States Employment Office, at 20 Smith Street,

Wish, California, for information on possible opportunities.

As you probably know. the Congress and various administrative
agencies of the Government have been giving a great deal of thought to

the problem of relieving distress and financial hardship arising from

necessary adjustments to a full wartine effort. Only recently, a bill

to create a #Far Distress Finance Corporation" was introduced in the
Senate. Vhile I do not know, of course, what arrangements will finally
be made, I hope and trust a way will be found to assist in relieving
hardships such as yours.

President I greatly and agreelf, appreciate and your the kind strong words spirit of of manuagement patriction evidenced to the by

your letter.

Sincerely,

Mrs. Helen Inheff,
Box 317.

Littleriver,
Mendosine County. California.

143

Has
THE WHITE HOUSE
WASHINGTON

May 29, 1942

36575

Dear Henry:

The enclosed letter presents a
difficult problem. Can not some arrange-

ment on loans be made?

Affectionately,

R.P.

Littleriver Caly

may 2 2 nd 1942

Elas First Sady
With all your other problems
could you offers an answer to
this me , some lime soon?

we small fry in a Country
so grand as ours. with such
grand people at the head of it
we really do have a problems
that 1 will have to admit, do
not know how to cope with
1. juit one of several have
at small cottages on the Ocian
fronT in Membrani County, half
way up the conet which helper

to support uu but not fully
now, then is a tire ration soon

quartine ration
ho night
on
A lighte
my bravel
husband

v a emple carmyny a small wage, but,
not enough to support was we are still

paying on a loan, which we borrowed to

build Collager.
now, D am not complaining Reav

First dady I am accepting it all in

the atride, as Thousands and Thousands

of other are doing But, without
Tourista (which would come for a dayn
wwo is they could) How are we people
going to pay ? Ramines lat State Tax,
insurance income tex, property tax. buy
Was Bonds and samps?
D am fifty seven, my husband
anyty two. These other neighbors an

heav the same age with the our

problems. where my husband is crippled,

they have sickness

The good fishing from the rocks
and abalona we what bung the people

in. the Climate is wonderful to. people
luring inland in the heat come to the
cost TO get out of the heat.
This is not a complaint. but just
a problem. we sum to be at loss to solve
for ouvselves. must we just clone up
and lose what we have worked on hand

An? Because some 7 w are not going
make the grade.

may the good Lnd above care for you

and ow Dear President and key him,
and give him strength to carry his

great burden His freside chale

and your interest in the common people

have made us all ful as though we
were a part of the big family
&

And be heir me most Sincerly

mis Helen Imhoja
Box 317

Letteriver daly

Mendocino creat

145

MEMORANDUM FOR THE SECRETARY.

June 5, 1942.

Mail Report.

It is evident that much of the tax mail which the
Treasury would ordinarily receive has been diverted
directly to the House Ways and Means Committee. Newspaper mention of the Committee has caused many writers
to direct their complaints and suggestions to Congress,
and we have been receiving copies of letters and telegrams showing that this has been done.

Just as the abstract was being written, one telegram
and one letter were received, supporting the Treasury's
program, and calling the Committee to account for failing
to follow Treasury suggestions. A close watch will be
kept on this mail, as a result of this morning's newspaper
statements.

In general, the mail followed the course of the preceding week. Unfavorable comments on lowered income tax

exemption outnumber those approving it by 12 to 1. There
is greater approval for compulsory payroll deduction than
heretofore, and continued suggestions of various ways to
raise money. Quite a number of the latter urged a surtax

on all income in excess of that reported for the previous

year. Letters in favor of the Sales Tax are in the ratio

of 9 as against 4 opposing it.
There are scattered letters, as before, on deductions
for illness, education, etc.; on taxing Labor Unions,
alimony, deductions for Bonds purchased, flat levy on income tax returns, etc.

During May the White House referred 1,428 letters, of
which 816 were acknowledged in this Division. There were
also 209 letters urging the passage of S-860 - Liquor
Control Bill. In May of 1940 we received 548 letters from
the White House; May, 1941, 838.

get

146

-1General Comments

Max Hirsch, Allied Central Casting Co., Long Island
City, N.Y. On March 26, 1942, and on May 6, 1942, we
wrote your Department - Attention, Procurement Division requesting that our name be placed on the Bidders List
for mass purchasing of our products by the Treasury
Department. The reason for our writing to you on this
matter, which is very small, is that we received no

reply to either of our letters, which is somewhat of a
surprise to us.

I. Pearce Edwards, A. M. Collins Manufacturing Co.,
(Paper Products), Philadelphia, Pa. On the 5th of
February, 1942, we made application for a rate of drawback on shipment of photographic facing paper to Canada.

In accordance with standard instructions, a draft of
our entire setup was mailed to you on April 10, but to
date we have heard nothing from you about it. Is there
anything further we should do to speed this thing along,
and if not, can you give us any idea as to when we may
expect to hear from you?

J. W. Caperu, Haddonfield, N.J. Some time ago I wrote

you relative to what I thought to be a local banking injustice. Much to my surprise, I received, through one
of your department heads, a most courteous reply, with

some suggestions. It has been said - "No one can

be truly appreciated but by his equals or superior.
Living in a home - strong in the belief the Republican
creed of principles were superior to the Democratic
party principles, it took our honored President and the

gentlemen affiliated with him to show an average American

the falsity of his opinion. * May I state Mrs. Morgen-

thau's recent radio broadcast was of the quality that
leaves excellent impressions.

147

-2E. A. Skehan, Largo, Florida. The following is an ac-

count of my experience in attempting to redeem U. S.
Documentary Stamps valued at $6.10. # When the
transfer proceedings were held, it was found that a
less amount was needed, so I was left with $6.10 worth
of stamps. Purchased the stamps on March 9, 1942; on
March 16 sent stamps to the Treasury Dept. with explan-

atory letter; March 23 I received a form from your Dept.
which was filled out, sworn to and returned to Washington.
On April 27, I wrote to inquire the reason for the delay;
received reply from D. S. Bliss on May 5 saying that
claim was allowed. On May 9 was notified by Treasury

office in Newark, N. J., that they had my check, but

before it would be released, I must make a statement
that there "were no outstanding Internal Revenue taxes
against me, and that I had not taken credit in my income

tax return for these stamps. # As a Veteran (U.S.N.)

of two wars -- Spanish and World War #1 -- and as a good
citizen of the U. S., owning approximately $700 in Defense
in
Bonds, I rather resent the attitude of the Treasury Dept.

in this small matter. All told, have spent 12g

postage. Newark still has check.

Louis Epstein, Salem, Mass. Inasmuch as I have been
a resident of this country continuously for about 40 years,
and in that time I have received much better treatment in
this country, which adopted me as a citizen, than the
treatment that I had received from my mother country where

I was born, I therefore feel reluctant to accept this divi-

dend check, as I certainly would not accept any dividends

or interest from my foster-mother for a loan. I honestly

and sincerely look upon these, our United States of America,

as my foster-mother. It is therefore with great pleasure
and gratification that I am returning this check (six months'
dividend check for $6.25 on a $500 Bond) to you to be

placed where it will do the most good in the war effort.
Mrs. Harry D. Matteson, Poughkeepsie, N.Y. As the mother
of a son who has been inducted into the U. S. Army, I raise
my voice to High Heaven in protest to your desire that the
boys" (mine was 35 years old) be sent off with Flags and

148

-3-

bands and tumult. How much do you think we mothers
can stand? Maybe you like to see young America led

off to slaughter -- I don't. It is a job to be done
like building a dam or checking a flood or cleaning up
after a tornado. It has to be done. We will take our
medicine for putting the wrong men in high places, but

please don't ask us to follow a band. * * My son is
doing his part, and so are my nephews, and he writes

that a real effort is being made to place men in the

field of service for which they are best fitted. Fine.
But let the fanfare rest until the job is done. Then

let Heaven and Earth ring out the glad tidings of victory.

149

-4Favorable Comments on Taxation

Fred W. Amend, Chicago, Ill. In writing to you at this
time, it is my hope and desire to secure for certain of

this country's taxpayers, a consideration which, to my
knowledge, they have so far not received. # * * Probably
the haunting fear of men and women approaching fifty
results from a realization that for one reason or another
they may become financially dependent. This might not be
true amongst foreign-born, and those who have failed to
make the necessary effort to earn a good living. However,
those true middle-class Americans whose efforts have afforded them a good living, their family a good name, and

their children an education, are the hardest hit by this

real worry. * My experience has, in all probability,
been the same as most men in business. Concentrating on

the job to be done, desiring some protection for the
family (just in case), and insisting on good educations
for the children, believing that when these were properly
cared for, Mother and I could effect some really worthwhile economies for a few years with which to take it
easy for a few more. # # # Anyway, the idea of age as

a

factor in adjusting income taxes is something that many
men and women of long years of service will greatly appreciate.

C. P. Goodman, Portland, Oregon.

We are a queer

bunch, we Americans. Try to take anything from us and

you get a bust in the snoot; ask for it, and you get the
shirt. # # Twelve of us foremen at lunch one day last
week, in talking about the income tax deduction plan,
were for it 100% -- if the money could be collected, at

least a percentage of it, in Washington. Lately every

time you pick up a paper, some more new commissions were
formed.

Louis Scholder, N.Y.C. Continue your work to help the

"little man". Your efforts for a tax program levied on

the wealthier people and corporations are recognized and
will be backed by the people. A Sales Tax of 5% or 10%

150

-5would not be accepted by the people. Moreover, any
Sales Tax should be opposed because it is unfair and
bears disproportionately on the group now affected by

higher living costs. Likewise, any lowering of income
tax exemptions is unfair. It is poor economy to tax
those of the minimum and subsistence levels. # *

J. T. Barrow, Manager, Cash Hardware & Grocery Store,
Reynolds, Ga. (Encloses clipping from the Macon Telegraph,
"Morgenthau Opposes Taking Any More Tax from the Little

Man") You are exactly right in this instance. When you

talk like this, I just can't sit still and not let you

know how right you are. We need more men like you. Keep
up the good work.

151

-6Unfavorable Comments on Taxation

Douglas Curry, N.Y.C. The Office of the Collector,
Joseph T. Higgins, addressed to me a letter concerning
the filing and paying of Social Security taxes.
This letter, instead of being addressed in a courteous
tone, was of such a peremptory nature that I felt

constrained then to write to you that this sort of un-

mannerly treatment of its citizens by their Government

is hardly likely to induce a mutual spirit of good will.

Although I promptly answered the letter, with satisfactory information, I have just received another letter
from the same source which is also officious and arbi-

trary. Both of these letters carry the implied threat

of causing me suffering and uneasiness by Intima ting

"severe penalties". I protest that love and respect

for the governing powers in one's country is not enhanced

by such action on the part of officialdom.

W. T. Anderson, Editor The Macon Telegraph, Macon, Ga.

This editorial Death Sentence for Debtors", by

David Lawrence) so aptly presents the case of these news-

papers in this city, I am taking the liberty of enclosing
it to you. I think 94% tax without permitting deduction
for contracted debt of sufficiently long standing to
guarantee legitimacy will be a repetition of the case of

the goose that laid the golden eggs, or the horse that
was shifted from oats to sawdust by reducing the oat
portion daily and increasing the sawdust -- and just when
the oats were eliminated entirely, and everything was
hunky-dory, the horse died. *

R. N. Wentworth, Jersey City, N.J. It is imperative
that the present proposals of the Treasury Dept. for

the apportionment of the income tax be immediately
abandoned. This most recent proposal is an attempt to
tax the lowest income brackets - those people most unable to bear the tax burden. A most abominable and
outrageous proposition. Taxation must be, rather, reduced in this grouping. Why should the poor bear the
cost of the war - they cannot even live on a decent

152

-7standard. Further, the proposal to collect next year's

income taxes by payroll deduction is preposterous - most
of us would not as yet have paid this year's taxes on
the installment plan. Many would have to borrow the

money. # Elections are approaching. There is just

one thing - Congress must assert itself - refuse these
tax levies on the poor. Tax those who wanted the war the RICH. * # *

Paulsen Spence, President, Spence Engineering Company,

Walden, N.Y. I wish to call your attention to the fact
that one D. J. Conroy, Deputy Collector, Newark, N.J.,

is persecuting me regarding an alleged failure to file

my income tax for 1940. (Encloses copies of correspondence
exchanged with Collector's Office, and photostat of checks,

cancelled by the Collector of Internal Revenue.) *
This Plant works 168 hours per week, exclusively in the
national defense. I work approximately 126 hours per
week. # * # Although my family resides in East Orange,
N.J., I spend all my time either here or on the road.
If I am going to take a day off and go to Newark, and
waste my valuable time interviewing Deputy Collectors,
who apparently have nothing better to do, I am yours to

command - but the papers and members of Congress will hear

about it. * ** I wish to call your attention to the fact
that this Plant and the writer are working for love of

country and not for any financial gain. The writer has
already earned this year's salary, and the Plant has more

than earned the amount allowed it under the proposed excess

profits tax law.

William E. Clow, Jr., Chicago, Ill. I sat informally
yesterday with the Directors of a corporation in which I
have a stock interest. Various matters were discussed,
and various questions of policy - but overhanging everything was the Treasurer's statement to the effect that

depending on certain estimated earnings, the corporation
would have to pay from 78% to 82% of its total net earnings

this year for Federal taxes. # * I won't say that these

men were discouraged - because they are all mighty good

men, but certainly this terrific tax burden was taking

most of the pep out of them. # I know all about this

company. Only in the last few years have they been reap-

ing a profit as a result of long, hard years of work, and

153

-8it is pretty tough - and mighty discouraging - to realize
that if you work hard for a profit now - and plan and

scheme toward progress - that, provided you are successful,

you can only retain 20 on the dollar. It just doesn't

make sense, even in wartimes.

A little over a year ago I
Tracy Diers, N.Y.C.
suffered a rather severe and sudden mental breakdown.
Prompt psychiatric assistance prevented more serious

consequences. Today, as a result of the psychotherapeutic treatments I have been having, I am once again
working and looking forward to a complete cure in the

future. * My salary at present is $24 per week. My

living expenses consume a good portion of this, and the
remainder pays my doctor bill, which runs from $3 to $6

per week. If I pay my entire income tax, it will be impossible for me to continue these necessary treatments

which really are an absolute necessity, not a luxury.
This means that my only alternative would be the clinic,
which has already refused my case because I am working.

I do not wish to become a state charge, but if there is
an interruption of these treatments, there will always
Will be

the danger of this sort of thing happening. *

you please advise me if it will be possible for me to

make some sort of deduction in my income tax? Eventhis
partial

payment will help me to go ahead. I explained

to Mr. Higgins, but I received the impression from his
answer that he does not fully realize the seriousness of

this situation.

Mrs. Robert Henderson, Rutherford, N.J.

Lowering

exemptions, increasing tax rates and/or a withholding tax
will result in placing an additional burden of new taxes
on the group which is now carrying a major portion of

present taxes, i.e., "the middle class worker", office

workers, teachers, professional and other people who are
not in defense industries, and are not protected by Labor

Unions. The present surtax is entirely too heavy on

the salaried middle class, and should be reduced, not in-

creased. By imposing a Sales Tax (however objectionable
to some officials and the Unions) the persons who purchase
the scarce goods now on the market would share in the war

154

-9costs of this nation, regardless of which group they
are in, and the burden on the salaried groups could be

lightened, as it should be, in all fairness. It should

be borne in mind by the Treasury Department, and the

Administration, that the real income of this country

is produced by the people in what the War Production

Board mistakenly refers to as : "the nonessential in-

dustries". The people whose income is produced in
private enterprise are the ones who are really paying
the cost of the war. The defense workers are paid out
of the public treasury, (by reason of working on Government contracts), and only a very small portion of these
workers' earnings are paid into the Treasury in taxes.
#

155

- 10 Favorable Comments on Bonds

I better tell

Jesse A. Lodge, E1 Monte, Calif.
you something about myself so you won't think I am a

horse thief. A naturalized citizen, Lockport,

N. Y., 1919. Second to no man in love for my Adopted
Country; Air Raid Warden in my block - finger printed,

photographed and all. I was out patrolling during the

blackout last night. Also awful stingy -- they say,

but mostly on things for my own use; too long between
haircuts, shave myself, wear patchy shoes and clothing,

roll my own cigarettes -- always with the thought in
mind that I'll be able to pay my own way when I get
old. It was December 8, 1941, that I first was glad

that I had been born in another Country and had taken

the Oath to Old Glory. I got to the bank before opening

time, prepared to put down a good-sized bet on the
winner against the Japanese. Well Sir, the man ahead
of me had a thick chunk of currency and checks for

deposit, so he closed the book, took out a wallet stuffed almost to the breaking point, selected a fiver and
said, "Give me a 25% Defense Stamp". I had $1,500 in
my hand for Unk - was I glad I had been both stingy and

born elsewhere so I could appreciate what I had. I got
a letter from you thanking me for that money. It was me
that was thanking you for a chance to do it.
Thomas G. Pollard, Chairman Third Congressional District
for Sale of War Stamps and Bonds, Tyler, Texas. The
visit of Miss Dorothy Lamour to Longview and Tyler, Texas,
was very well received, and people were inspired to make
additional Bond purchases over the monthly amount hereto-

fore subscribed. In the city of Tyler alone, $234,500 in

Bonds actually purchased and paid for was accomplished.
In the event you expect to continue sending movie stars

over the United States to sell Bonds, may I respectfully
suggest that an experienced Public Relations man represent
the U. S. Treasury Department? You will understand my
hesitancy in making this suggestion, and it is only made
in order that we may go forward in the sale of War Bonds
and Stamps.

156

- 11 Honorable Nat Patton, House of Representatives,

Washington, D. C. * * * There are a number of small
towns in my District, towns I am sure that have not
received a copy of this fine news letter, (The Minute
Man), and if you will send me 100 copies of this news

letter, I will place them in the hands of influential

men in those towns. My office is lined up 100% behind

this war program, and I want to do all I can to co---

operate with you in every way.
John Saraka, Recording Secretary, United Mine Workers
of America, Wilkes-Barre, Pa. The membership of our

Local Union, Dorrance Colliery, authorized me to com-

municate with you and notify you that the officials of

the Lehigh Valley Coal Company, Dorrance Colliery, refuse to deduct, every two weeks, from our pay envelopes

for War Bonds. They claim it is too much trouble. Our

members would like to have them deduct every payday from

their earnings in order to buy more Bonds. Therefore,

on behalf of our membership and our boys that are over

there fighting for our rights, look into this matter and

make the Lehigh Valley officials deduct from our earnings
according to our pledges, so that we can keep on buying
more War Bonds, and also have them take it out every two
weeks instead of every month.

I. G. Thompson, Dallas, Texas. This will acknowledge
receipt of U. S. Government Check #315,133 for $50, cover-

ing six month's interest on four $1,000 U. S. Savings

Bonds, Series G, for which please accept my best thanks.
I have $20,000 worth of these Bonds, and inasmuch as you

are so prompt in paying the interest when it is due, I

#

expect to buy another $5,000 sometime this month. #
I received a letter from a Bond Agency in New York a few

days ago, soliciting my subscription to their service,
in which they mention they would give me a list of ten
stocks that had splendid possibilities for dividends.
I wrote to them that there was only one investment in
which I was interested, and that was War Bonds. I also
told them that after the war is over, we would have
plenty of time to buy stocks and bonds, but until it was
over, the first and highest duty of every citizen was to
subordinate every kind of investment to the purchase of

U. S. War Bonds: that the Government needed the money and

they needed it in a big way, and unless we won the war, no
kind of investment would be worth the paper it was written

on.

157
- 12 Unfavorable Comments on Bonds

Mrs. F. W. Fischer, Tyler, Texas. Stirred as deeply
as I am by the travesty upon true patriotism, your
program is proving to be, in regard to sponsoring these

tours of the movie people, I feel that I should tell

you how I, and every one I have heard speak on the

subject, feel regarding this matter. * # # Very few

people, proportionately, who really have the means with
which to buy large amounts of Bonds, were present at go,

the meeting held here last night. I did not mean to

but my husband consented to speak as a veteran of the
last war, and asked me to accompany him on the platform.
We had bought $20,000 worth of Bonds early in the spring

-- $5,000 for each member of our family -- and, of course,
had intended to invest further. However, as I expressed
myself to my husband, and as he agreed with me, it was
rather galling to us to be seemingly influenced by a
moving picture actress to support Miss
our country
Lamour when
is not its
very existence is at stake.
fitted mentally or by background for this work; she does
not have an orator's voice, which should be the first
requisite for such work; neither does she know anything
to say. She did not even bother to change her attire,
but appeared in the soiled dress she travelled in.
*

Vance B. Duncan, R. R. #1, South Bend, Ind. You have
been quoted in the papers as saying the buying of War

Bonds was on a voluntary basis. Quite a few of the
employees buy only for cash, but the corporation has a
drive on to buy Bonds on the installment plan, and they

are using pressure. Speaking for myself, I will not sign

for over $1.00 per week. That will take nineteen weeks
or about three $25 Bonds per year. By paying cash, I
believe I would be able to buy one every five weeks,
which would be about ten to the year - some difference.
The President, in his last talk, condemned installment
buying. I also think you have. Who gets the gravy from
this procedure?

158
- 13

M. L. Freedman, Milton Music Co., Norfolk, Va.
We are sold on the idea of buying Bonds, but now that
you have sold us on that idea, will you PLEASE make it
less difficult for us to buy them? I saw one woman

stand in line to buy a Bond, and after waiting a considerable length of time, she finally arrived at the
window and was handed a slip to fill out. Then she
could start at the end of the line once more! This has
happened thousands of times, and is not my idea of the

way you would conduct a private business. I guarantee you that when customers come into my store, we

make it as easy as possible for them to make their purchases, and it seems that Uncle Sam is more than willing

to do as much if his employees will just use that little

bit of common sense so valuable in these times.
The above incident, of course, occurred at the Post Office
here in Norfolk.

A. F. Heck, Amsterdam, N.Y. While in the local Post Office
today, a farmer and his wife stepped up to the Bond window
and laying down a handful of crumpled bills, asked the

clerk for two Bonds. The clerk shoved out a blank and

said, "You'll have to fill this out". The old couple were
of Polish birth, and it could be readily seen that they

did not understand the blank. The old fellow pushed the
blank back and said, "You mak' em out". The clerk said,
"We can't help you, you will have to take it with you and
ask some one to help you out". The couple stood speech-

less, looking at the pile of bills. The clerk then asked
another clerk if it wasn't correct that he couldn't help

them out and his reply was, "Nope, can't do it". The couple

gathered up their bills and slowly left the building. I

watched them leave and go into Montgomery Ward's store.

This couple were from a nearby farm. It has been raining
all day here and they took the afternoon off. No doubt

this was a special trip into the city for them. And by
the way, it didn't take a flock of movie stars to drum up
this sale either.

159

JUN 5 1942

My dear Mr. Perkins

I - enclosing five copies of
the report on our exports to some

selected countries for the period ending
May 20, 1942.

Sincerely yours,
(Signed) R. Morgenthan, in

Secretary of the Treasury

Mr. Mile Perkins,
Executive Director,

Board of Economic Warfare,
Room 3710,

Department of Commerce Building,
Washington, D.C.

Enclosures.
By Messenger Dinion 1:55
MDWsmah

Capies to White

6/3/42

Ret to

160

JUN 5 1942

My dear Colonel Donovans

I - enclosing copy of report on
our exports to some selected countries
for the period ending May 20, 1942.
Sincerely yours,
(Signed) 1. Morgeathan. JR

Secretary of the Treasury

Colonel William J. Donovan,

Coordinator of Information,

old National Institute of Health Building,

25th and B Streets, N. W.,
Washington, D. C.

Enclosure.
n. m. C.
By Messenger Discon 1:55
HDW smoh

Copiestor w lite

6/3/42

Ret to Secip office

161

JUN 5 1942

My dear Mr. Secretary:

I - enclosing copy of report on
our exports to some selected countries
for the period ending May 20, 1942.
Sincerely yours,
(Signed) 3. Morgeathan. Jr.

Secretary of the Treasury

The Henorable,

The Secretary of State,
Washington, D. C.

Enclosure.

n.m.c
HDWsmah

6/3/42

By Messenger Dinon 1:55
copies to whire

Rest Secip office

162

JUN 5 1942

My dear Mr. Presidents

I - enclosing report on our exports
to some selected countries for the period
ending May 20, 1942.

Faithfully,
(Signed) 1. Morgenthau. JP.

Secretary of the Treasury

The President,
The White House.

Enclosure.

nm c.
HDW:mah

6/3/42

capito awaiting

By Messenger Winnliss

Ret to Secip offer

SECRET

163

June 2, 1942

Exports to Russia, Free China, Burma and other
blocked countries, as reported to the Treasury
department during the ten-day period ending
May 20, 1942

1. Exports to Russia

Exports to Russia as reported during the ten-day period

ending May 20, 1942 amounted to about $18,000,000 as compared

with approximately $67,000,000 during the similar period in
April. Motor trucks and dried egg products were the principal
items. Military equipment exported included 9 medium bombers,
22 light tanks and 2 medium tanks. (See Appendix c.)
2. Exports to Free China and Burma

Exports to Free China during the ten-day period ending
May 20, 1942 amounted to about $1,900,000, of which military
equipment accounted for more than half. (See Appendix D.)
Exports to Burma amounted to $5,000. (See Appendix E.)

3. Exports to France
Exports to France during the period under review amounted

to $20,000.

4. Exports to other blocked countries
Exports to other blocked countries are given in Appendix A.
Most important were exports to Switzerland and Portugal amounting to $112,000 and $124,000, respectively.

18F/efs
6/2/42

STRICTLY CONFIDENTIAL

164

SUMMARY OF UNITED STATES
DOMESTIC EXPORTS TO SELECTED COUNTRIES
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED

DURING THE PERIOD INDICATED 1/

July 28, 1941 to May 20, 1942.

(In thousands of dollars)
July 28

Period ended

to

Period ended

Total

April 30

May 10 6

3448,689

$28,652

$17,977

$495,318

ree China

73,693

296

1,872

76,861

urna 2/

12,196

-

36

-

S. R.

rance 3/

May 20

Domestic Exports

5

12,201

20

56

2,849

5/

s/

witserland

10,006

5/

112

10,118

eden

17,646

5/

17,731

pain

ortugal

8,795

rench North Africa W

6,283

85

124

5

-

treasury Department, Division of Monetary Research

-

2,849

8,919

6,283

June 1, 1942.

Many of the export declarations are received with a lag of reveral days or more.
Therefore this compilation does not accurately represent the actual shipment of

a particular period. The longer the period covered, the closer will these figures
come to Department of Commerce revised figures.

From September 11, 1941 to date - it is presumed that a large percentage of
material listed here, consigned to Parma, is destined for Free China.
Includes both Occupied and Unoccupied France - no breakdown is obtainable from
Department of Commerce.

Includes Morocco, Algeria, and Tunisia.
Less than $500.

Due to changes in reporting procedure by the Department of Commerce, this report

is incomplete for the period indicated.
Wirl 6/1/42

SECRET
163
APPENDIX B

from the U. 3. to Free China, Burma and
Exports U. S. 8. R. as reported to the Treasury Department

July 28, 1942 - May 20, 1942
(Thousands of Dellars) 1
Exporte to
Exports to
Free China

Burma 3/

U.S.S.R.
4,523

395

July 28 - Aug. 2
Aug. 4 - Aug.

Exports to

9

309

Aug. 11 - Aug. 16
Aug. 18 - Aug. 23
Aug. 25 - Aug. 30

2,735

2
1

Sept. 2 - Sept. 6
Sept. 8 - Sept.13

Sept.15 - Sept.20
Sept. 22- Sept.27

204

4,280

2,281
3,822

752

5,217
like
684

110

1,225

Sept.29 - Oct. 4
Oct. 6 - Oct. 11

1,157

5,312

Oet. 13 - Oct. 18
Oct. 20 - Oct. 25

5

Oct. 27 - Nov. 1

Nov. 3 - Nov. 8

269

403

4,772
1,672

342

1,228

1,022
1,364

58

88

2,851

Nov. 10 - Nov. 15
Nov. 17 - Nov. 22
Nov. 24 - Nov. 29

"

3,239

Dec. 1 - Dec. 6

791

18

iii

2,337

Dec. 8 - Dec. 13

Dec. 15 - Dec. 20
Dec. 22 - Des. 27

8

196

1

Dec. 29 - Jan. 3
Jan. 5 - Jan. 10

2

35

1,073

91

Jan. 12 - Jan. 17
Jan. 19 - Jan. 24
Jan. 26 - Jam. 31

Feb. 10 - Feb. 20
Feb. 20 - Feb. 28 5/

Mar. 1 - Mar. 10

Mar. 10 - Mar. 20
Mar. 20 - Mar. 31 6

Apr. 1 - Apr. 10

Total

5,874

1,695

447

6,938

923

Feb. 1 - Feb. 10

Apr. 11 - Apr. 20
Apr. 21 - Apr. 30
May 1 - May 10
May 11 - May 20

2,333

-

9,608

13,515
26,174

1,054
583

2,921
2,879
8,058
2

4,836

28,119
32,509

-

23

28,550
42,459

3

2

447

66,906

639

50,958
28,652

-

L

296

1,872
$78,464

-

5

$11,088

18,000

$495,832

1. These figures are in part taken from copies of shipping manifests.
2. Figures for experts to Free China during these weeks include
exports to Rangoon which are presumed to be destined for Free
China.

SECRET

166
Page 2
Appendix

B

3. It destined
is presumed
thatChina.
a large percentage of experts to Burna are
for Free
Beginning with February 1 figures will be given for 10-day period
4.
instead of week except where otherwise indicated.

5.

8-day period.

6: 11-day period.
Due to changes in reporting procedure by the Department of
7.

Commerce this report is incomplete for the period indicated.

Treasury Department, Division of Monetary Research June 2, 1942
ISF/efa
6/2/42

SECRET

167
APPENDIX c

Principal Exports from U. S. to U. S. S. R.
as reported to the Treasury Department
during the ten-day period ending
May 20, 1942

Unit of
Quantity

Quantity

Value
(Thousand da

of dollars)

TOTAL EXPORTS

$ 18,000

Principal Items:
Moter trucks
Dried egg products

No.

1b.

2,306
2,194,409

Landplanes

Medium bombers (2 engines)
Observation plane parts for assembly

1,409

No.

9

-

Ammunition

75 - high explosives
32 - high explosives
37 - armor piercing

75 mm. armor piercing
30 caliber
Sausage, eanned
Pork, canned

61,614
50.395
34,000
8,590

No.
No.
No.
No.
No.

lb.
1b.

Aircraft engine parts and accessories Medium tanks
Lard

2,800,115
2,199,952
-

/2/42

952
715
688

684
No.
No.

22

1b.

4,408,323

2

Treasury Department, Division of Hometary Research
SP/efa

1,007

500,000

Military tanks
Light tanks

3,530

2,278

673

June 2, 1942

SECRET

168

APPENDIX D

Principal Exports from U. S. to Free China
as reported to the Treasury Department
during the ten-day period ending
May 20, 1943-

(Thousands of Dollars)
TOTAL EXPORTS

$ 1,872

Principal Items:
Military equipment
Printed matter

Writing paper
Auto replacement parts

1,069
623

24

Radio transmitters, tubes and parts

17

Lathes

16

Relief supplies

Treasury Department, Division of Monetary Research
ISP/efa
6/2/22

17

June 2, 1942

SECRET

169

APPENDIX E

Principal Exports from U. S. to Burma
as reported to the Treasury Department
during the ten-day period ending
May 20, 1942

(Thousands of Dollars)

TOTAL EXPORTS

$

5

Principal Items:

Relief supplies - drugs and biologies
Relief supplies - Surgical and hospital

Treasury Department, Division of Monetary Research

ISP/efs
6/2/42

June 2, 1942

170

Treasury Department

Division of Monetary Research
Date June 3

A

To:

1942

Miss Chauncey

From: Mr. White

The tables for transmittal to the
Secretary of State, the Coordinator of
Information and Mr. Perkins differ
from those being sent to the President

in that certain military figures
are not broken down.

D

SECRET
171

June 2, 1942

Exports to Russia, Free China, Burma and other

blocked countries, as reported to the Treasury
department during the ten-day period ending
May 20, 1942

1. Exports to Russia

Exports to Russia as reported during the ten-day period

ending May 20, 1942 amounted to about $18,000,000 as compared

with approximately $67,000,000 during the similar period in
April. Military equipment accounted for approximately one-

fourth of the total. (See Appendix C.)

2. Exports to Free China and Burma

Exports to Free China during the ten-day period ending
May 20, 1942 amounted to about $1,900,000, of which military
equipment accounted for more than half. (See Appendix D.)
Exports to Burma amounted to $5,000. (See Appendix E.)

3. Exports to France
Exports to France during the period under review amounted

to $20,000.

4. Exports to other blocked countries
Exports to other blocked countries are given in Appendix A.
Most important were exports to Switzerland and Portugal amounting to $112,000 and $124,000, respectively.

ISF/efa
6/2/42

STRICTLY CONFIDENTIAL
172
SUISMARY OF UNITED STATES

DOMESTIC EXPORTS TO SELECTED COUNTRIES
AS REPORTED TO THE TREASURY DEPARTMENT
FROM EXPORT DECLARATIONS RECEIVED

DURING THE PERIOD INDICATED 1

July 28, 1941 to May 20, 1942.

(In thousands of dollars)
July 28

Period ended

to

R.

free China

urma 2/

rance 3/

rain
tserland
weden

Period ended

mril 30

May 10 6

May 20

8448,689

$28,652

$17,977

73,693

296

12,196
36

5

6,283

5/

5

112

5/
85

17,646

rench North Africa 4

75,861
12,201

20

10,006

8,795

$495,318

-

2,849

Portugal

Domestic Exporte

1,872

-

Total

5

124

5/
-

treasury Department, Division of Monetary Research

-

56

2,849

10,118
17,731
8,919

6,283

June 1, 1942.

Many of the export declarations are received with a lag of several days or more.
Therefore this compilati on does not accurately represent the actual shipment of

a particular period. The longer the period covered, the closer will these figures
come to Department of Commerce revised figures.

From September 11, 1941 to date - it is presuned that a large percentage of
material listed here, consigned to Burna, is destined for Free China.
Includes both Occupied and Unoccupied France - no breakdown is obtainable from
Department of Commerce.

Includes Morocco, Algeria, and Tunisia.
Less than $500.

Due to changes in reporting procedure by the Department of Commerce, this report
is incomplete for the period indicated.

Mr. 6/1/42

SECRET

173

APPENDIX B

Exports from the U. S. to Free China, Burms and
U.S S.R. as reported to the Treasury Department
July 28, 1941 - May 20, 1942

(Thousands of Dellars) 1
Exports to
Exports to
Free China
-

1

204

2,281 2
3,822

Sept.15 - Sept.20
Sept.22 - Sept.27

1,225
5,312

1,228
3,239

Dec. 1 - Dec. 6

Dec. 8 - Dec. 13

Dec. 15 - Dec. 20
Dec. 22 - Dec. 27

Dec. 29 - Jan. 3
Jan. 5 - Jan. 10

1,157

6,845
1,924
5,623
4,484
4,552
2,677
3,581
2,436
3,609
12,040
4,580
1,829
3.993
8,247
5,874
3,885
9,608
13,315
26,174
28,119
32,509
28,556
42,435
51,698
66,906
50,958
28,652
18,000

58

342
88

1,021
1,364

791

6h

2,357

18

111

8

1

196
2

35

Jan. 12 - Jan. 17
Jan. 19 - Jan. 24
Jan. 26 - Jan. 31

Feb. 1 - Feb. 10

5

Mar. 10 - Mar. 20
Mar. 20 - Mar. 31 6

Apr. 1 - Apr. 10

Apr. 11 - Apr. 20
Apr. 21 - Apr. 30
Total

2,333

405

4,772
1,672
2,851

Nov. 19 - Nov. 15
Nov. 17 - Nov. 22
Nov. 24 - Nov. 29

May 11 - May 20

449
684

5

269

Nov. 3 - Nov. 8

May 1 - May 10

752

110

Sept.29 - Oct. 4
Oct. 4 - Oct. 11
Oct. 13 - Oct. 18
Oct. 20 - Oct. 25
Oct. 27 - Nov. 1

Mar. 1 - Mar. 10

2,735
1,023
4,280
5,217

2

Sept. 2 - Sept. 6
Sept. 8 - Sept.13

91

1,073

1,695

447

6,938
4,889
4,853

923

2,921
2,879
8,058

-

1,054
583
-

23
3

2

2

4,836
5,335
2,827

7

U.S.S.R.

986

309

Aug. 11 - Aug. 16
Aug. 18 - Aug. 23
Aug. 25 - Aug. 30

Exports to
4,523

395

July 28 - Aug. 2
Aug. 4 - Aug. 9

Feb. 10 - Feb. 20
Feb. 20 - Feb. 28

Burma 3/

296

1,872
$78,464

447
639
5

$11,088

323

$495,832

1. These figures are in part taken from copies of shipping manifests.
2. Figures for exports to Free China during the se weeks include
exports to Rangoon which are presumed to be destined for Free
China.

SECRET
174

Page 2
Appendix B

3. It are is destined presumed for that Free China. percentage of exports to Burma

4. Beginning with February 1 figures will be given for 10-day
period instead of week except where otherwise indicated.
5. 8-day period.
6. 11-day period.
7. Due to changes in reporting procedure by the Department of

Commerce this report is incomplete for the period indicated.

Treasury Department, Division of Monetary Research
12/ora

6/2/42

June 2, 1942

SECRET

175

APPENDIX c

Principal Exports from U. S. to U.S.S.R.
as reported to the Treasury Depar twent
during the ten-day period ending
May 20, 1942

(Thousand ds of Dollars)
TOTAL EXPORTS

$ 18,000

Principal Items:
Military equipment

Motor trucks
Dried egg products
Sausage, canned

Pork, canned
Lard

Casing and oil-line pipe

Beans

Sole leather

Steel sheets, black
Copper wire, insulated

Treasury Department, Division of Monetary Research

ISF/efa
6/2/42

4,390
3,530
2,278
952
715
673

547
480
390
359
341

June 2, 1942

SECRET

176

APPENDIX D

Principal Exports from U. S. to Free China
as reported to the Treasury Department
during the ten-day period ending
May 20, 1942

(Thousands of Dollars)
TOTAL EXPORTS

$ 1,872

Principal Items:

Military equipment
Printed matter

Writing paper
Auto replacement parts

Radio transmitters, tubes and parts
Relief supplies
Lathes

Treasury Department, Division of Monetary Research
ISH/USA

6/2/22

1,069
623
37

26
17
17

16

June 2, 1942

SECRET

177

APPENDIX E

Principal Exports from U. S. to Burma
as reported to the Treasury Department
during the ten-day period ending
May 20, 1942

(Thousands of Dollars)

TOTAL EXPORTS

$5

Principal Items:

Relief supplies - drugs and biologies
Relief supplies - surgical and hospital

N/A

Treasury Department, Division of Monetary Research June 2, 1942
ISF/ofa

6/242

178

TREASURY DEPARTMENT

OFFICE OF THE SECURITARY

June 5. 1942
CONFIDENTIAL

Received this date from the Federal
Reserve Bank of New York, for the confi-

dential information of the Secretary of

the Treasury. compilation for the week
ended May 27. 1942, showing dollar disbursements out of the British Empire and
French accounts at the Federal Reserve
Bank of New York, and the means by which

these expenditures were financed.

emb-6/4/42

A

179
C

FEDERAL RESERVE BANK
OF NEW YORK

June 4, 1942

CONFIDENTIAL

Dear Mr. Secretary:

Attention: Mr. H. D. White

I am enclosing our compilation for the
week ended May 27, 1942, showing dollar disburse-

ments out of the British Empire and French accounts
at this bank and the means by which these expenditures were financed.

Faithfully yours,
/s/ L. W. Knoke
L. W. Knoke,

Vice President.
The Honorable Henry Morgenthau, Jr.,

Secretary of the Treasury,
Washington, D. C.
Enclosure

Copy:vw:b-5-42

ANALYSIS OF BRITISH AND FRENCH ACCOUNTS

Wook Ended May 27. 1942

(In Millions of Dollard
OF BOLLIND (BRITTEN GOVERNING)

PERIOD

War period through

December, 1940

Second year of war

CREDITS

Total

Other

Total

Debits

tures(a)

Debits

Credits

sum of

Securities

Gold

Oct. 2 - Oct. 29
Oct. 30 - Dec. 3
Dec. 4 - Dec. 31

Decr (-)
Credits(s) Balance
Other

421.4

456.9

1,098.4

900.2

198.2

+220.1

722.1

- 13.2

38.9

4.8

34.1

8.8

-

8.8

-30.1

154.1
150.1

+35.3

0.3

-

0.3

0.5

-

0.5

0.2

41.9

0.3

-

0.3

0.3

-

0.3

133.6

-21.5
-36.9

16.1

16.1

0.4

-

0.4

- 15.7

0.8

0.4

-

04

0.4

0.2

0.2

0.4

-

171.4

- 33.0
- 30.0
+50.0

70.1

-27.5

0.2

1,356.7

2,793.1

2,109.5

108.0

575.6

2,203.0

1,792.2

410,8

2,189.8

1,193.7

274.0

140.9

105.9

2.0

109.0

77.3

88.4

69.6

29.1

69.3

0.5

57.2
171.4
70.6

1.0

51.5

-

1.0

-

51.5

-

Jan. 29 - Feb.25
Feb. 26. - Apr.

Apr. 2.= Apr...

102.3

87.2
121.4
98.1

73.2
63.8
86.4
64.2

23.4
35.0
33.9

0.5

BOOK ENTED

May 6

31.0

23.9

13

19.8

15.9

20
27

16.4
20.5

13.0
15.8

3.9

78.2
14.6

3.4

26.1

4.7

28.6

7.1

Average Weekly Expenditures Since Outbreak of Yor

France through June 19, 1940) 119.6 Million
England (through June 19, 1940) 27.6 million
England (since June 19, 1940) 37.9 million
#For monthly breakdown see tabulations prior to April 23 1941.
**For monthly breakdown see tabulations prior to October 8, 1941.
(See attached sheet for other footnotes)

=

-

-

-

(a)-)

in Balance

878.3

1,425.6

111.6

Other

Credits

+10.8

2,792.3

156.1

Sales

+229.0

35.0

-

of Gold

195.1(e)

420.1

0.8

redits

900.2

52.0

150.9
134.6

Total

Other
Debits

1,09536

1,356.1

20.1

tures (d)

Net Iner.

Proceeds

449.7

1,828.2

176.2

Total
Debits

Gov't
Expendi-

GREDIT

43.6(e)

1,187.6

35.0
31.7
44.5
18.8

G

866.3(a)

605.6

1942

Jan. 1- Jan.28

(*) or

1,793.2

1941

Aug, 28 - Oct. 1

Net Incr.

Proopeda of

Gov't
Expendi-

First year of war

BANK

DEBITS

68.8
56.2

78.2
14.6
26.1

28.6(f)

0.8

-

=

-

-

0.1

-

0.3

-

0.1

0.4

-

0.2

0.4

17.2

0.1

- 5.2
+ 9.7

8.1

0.4
0.3

-

-

-

-

-

=

-

0.1

-

-

Transfers from British Purchasing Commission to
Bank of Canada for French Account
Week ended May 27, 1942
162.7
Cumulation from July 6, 1940

million

million

0.2

0.4

+ 0.3
+ 0.3

04

0.2

+

DEBITS

0.1

+.0.1

0.1

+.0.1

(a) Includes payments for account of British Purchasing Commission, British Air Ministry, British Supply Board, Ministry of
Supply Timber Control, and Ministry of Shipping.
(b) Estimated figures based on transfers from the New York Agency of the Bank of Montreal, which apparently represent the
proceeds of official British sales of American securities, including those effected through direct negotiation. In addition

to the official selling, substantial liquidation of securities for private British account occurred, particularly during the

early months of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy. According
to data supplied by the British Treasury and released by Secretary Morgenthau, total official and private British liquidation
of our securities through December, 1940 amounted to $334 million.

(c) Includes about $85 million received during October, 1939 from the accounts of British authorised banks with New York banks,
presumably reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since October,
1939 apparently represent the acquisi tion of proceeds of exports from the sterling area and other currently accruing dollar
receipts.
(d) Includes payments for account of French Air Commission and French Purchasing Commission.

(e) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day.
(f) Includes: $8.0 million transferred from account of Consonwealth Bank of Australia here.
5.7

.

5.2

"

3.9

received from Defense Supplies Corp. representing final payment on 56 cargoes of Australian wool.
received for credit of U. S. Army.
presusably representing proceeds of wool exports to the United States.

Official
British

of

Total

Gold

For Own

A/C

Credits

Sales

A/C

323.0

16.6

306.4

504.7

412.7

20.9

38.7

172.2

16.6

460.6

707.4

534.8

20.9

460.4

462,0
52.2

246.2
21.2

3.4

23.1

First year of VLL
(8/29/39-8/28/40)*
War period through
December 1940

Second year of war

(8/29/40-8/27/41)

460.4

-

23.1

Aug. 28 - Oct,

-

Transfers

British A/C
For French

Other

37.4

-

37.4

19.7

52.8

0.1

52.7

32.5

11.9
19.3

47.7

22.2

17.3

39.5

33.0

27.0

-

34.1

35.7

-

46.5
37.4

99.3

17.7

Jan 1 Nan. 28

39.5

-

Dac. 31
1942

Jan. 29. Feb. 25
Feb 26 - Apr...1

Apre 2-Apr. 29

-

34.1

46.5
32.4

-

35.9

12.4
20.5
14.2

13
20
27

5.9

12.4
10.6

13.8

=

=

-

5.9

10.3

3.5

12.4

12.6

5.4

10.6
13.8

6.6
13.1

6.5

0.1

of

in Balance

32.4

+181.7

31.2

3.9

27.3

36.1

30.0

6.1

409

110.7

41,0

+230.2

57.9

14.5

43.4

62.4

50.1

12.3

4.5

123.9

88.5

1.6

29.1

72,2
10.7

16.7
0.5

55.5

10.2

81.2
2.8

62.9

31.0

18.3
0.2

8.2
10.3

6.9

2.7
3.4

3.9

1.8

2.1

Credits

A/C

-

A/C

Other

Total

Debite

Credit

-

-

7,8

-

-

13.2

-

-

4.9

- 17.7
- 20.3
-25.5

6.0

6.5

4.5

-

4.5

23.3

8.4

5.3

3.1

71.1

1.6
52.8

7.8

1.3

21.2

1.5

10.9

8.0

6.5
2.9

-

-

-

-

7.7

BEEK ENDED:

May 6

Decr. (-)

to

Official
British

Total
Debits

1941

Oct. 2 - Oct. 29
Oct 30 - Dec. 3

Net Incr.
(+) or

-

6.8
2.2

-

6.5

6.6(a)

Weekly Average of Total Debits Since Outbreak of
War
million
8.0
Through May 27, 1942
.
For monthly breakdown see tabulationaprior to April 23 1941.
- For monthly breakdown see tabulations prior to October 8, 1941.
(a) Includes 83.7 million representing U. S. Government checks deposited by Tar Supplies, Ltd.

the
+0.2
- 4.0

-02

1.2

5.5

0.5

0.3
0.5

8.3

B.O

1.2

Gold

Other

Sales

Credits

2.1

8.0

5.9

11,6
2.8

9.0

2.1
2.6

0.2

2.6

10.8
1,6
3.6
16.8

-

0.3

0.3
2.1

0.5

10.4

0.3

0.9

-

-

10.8
1.6
3.6

16.8

0.3
=

-

2.1
10.4

0.9

9-0

2.9

. 02
-

+

Proceeds

Confidential

+

to

Strictly

Wook Ended May 27. 1942

RED
Transfers from Official

Other
Debite

Total
Debite

PERIOD

(In Millions of Dollars)

+

Transfers

-

TOTIS OF CANADIAN AND AUSTRALIAN ACCOUNTS

1.5

14
6.3

- 6.8
-

L2

+ 5.9

-1.4
+1.8
+99

7.6

183

BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON D.C.
TELEPHONE HOBART 9000
LEASE QUOTE

EFERENCE NO.

With the compliments of British Air Commission
who enclose Statement No. 35 - Aircraft Despatched
- for week ended June 2, 1942.

The Honourable Henry Morgenthau, Jr.

Secretary of the Treasury
Washington, D. C.

June 5, 1942.

184
STATEMENT No. 36

MOST SECRET

ATRCRAFT DESPATCHED THE UNITED STATES
DURTING THE ROSS THE 22nd. 1042
FLIGHT DEL'D
DESTINATION

ASSEMBLY POINT

BY SEA

BY ATR FOR USE IN CA

HPE

SSNA

17 Crane IA

Canada

Canada

9

NSOLIDATED

U.K.

Canada on route

3

24 D

EING

U.K.

ston III

U.K.

2

RTISS

Australia

Sydney

14

Middle East

Port Sudan

18

JDSON IIIA

New Zealand

New Zealand

29A AC 151

U.K.

ITTYHAWK IA
2A

OCTHERD

Canada on route

8

5
6

LENN MARTIN
ALTIMORE

Russia

8. Africa

Basrah
Capatown

7

4

ORTH AMERICAN
USTANG
25B

U.K.
U.K.

Canada

ULTER

ENGEANCE

TOTALS

BRITISH AIR COMMISSION

June 5th, 1942.

36

Canada en boute

4

33

ARMAN

f 27

U.K.

India

Canada

Karachi

9

98

12

42

185

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 weekly Statement No. 54, covering

Aircraft Flight Delivery as at June 2, 1942.

The Honourable Henry Morgenthau, Jr.

Secretary of the Treasury

Washington, D. C.

June 5, 1942.

186
JUNE 3, 1962
CONFIDENTIAL REPORT

REF. NO. D-55

LOCATIONS OF OCEANIC FLIGHT DELIVERY AIRCRAFT - REPORT NO. 54

(Covering Movements through June 2. 1942)

1. LIMERATOR II off Contract MM
( Never taken by A.M.F.
55 delivered to U.K.
5 delivered to M.E. (1 crashed in Africa)

2 in Ieeland AL5
at Montreal

65

(B) Taken and Returned or Kept by

14 delivered to U.K.
3 in Ferry Service (delivered to Montreal)
3 at Montreal
1 at Detroit
3 to be returned
6 retaken by A.A.F.
" kept by A.A.F.
74

2. HUDBON y (LONG RANGE ) off Contract A-1719

173 delivered to U.K.
39 delivered to Debert
1 at Gander

4 at Montreal ( for Dobert )
2 under repair

6 crashed (2 in U.S., 4 after export)
225

3. HUDSON III (LONG RANGE) off Contract A-68

211 delivered to U.K.
4 at Montreal

1 at Detroit
20 for U.S.A.A.F. Familiarisation Program (including 1 known orashi
9 crashed (after export

245

be VENTRAS

(A) LONG RANGE off Contract 1-346

44 delivered to U.K.
8 in Ioeland
3 at Goose
6 at Gander

14 - route Gander
4 at Penfield Ridge
9 at Montreal
156 at Detroit (Including from Montreal, 45 for and West 30 Pala to go Beach to Montreal) - 15 returned

3 on route Detroit
14 at West Pala Beach
1 on route West Pala Beach

1 at Wright Field
crashed (after export)
(a) SHORT DANGE

8 at Mentreal

4 at Detroit
1 on route Detroit
2 at West Palm Beach
2 at Long Beach
17

(10 shipped to U.K. by See

XI Total reported any from plant)

(c) LONG RANGE off Contract A-1748

23 at Detroit
on route Detroit
31

U. S. SECRET - BRITISH MOST SECRET

JUNE 3. 1942
REPORT

CONFIDENTIAL
D-55
NO.

LOCATIONS OF OCKANIC FLIGHT DELIVERY ATRORAFT - KERKLY REPORT NO. 54
5. CATALINAS

(A) off Contracts A-2587. I-210. A-37. AUB-58. CAN-78
105 delivered to U.K.
9 delivered to Singapore

27 delivered to Australia
8 at Dartmouth
2 in Beranda

2 crashed (after export)
153

(B) PEY S-A's off BOO Reg. 10772

10 delivered to U.K.
2 at Montreal
12

6. LODESTARS

(A) C-59's off L/L Contract AC-53. BSO Rec. 1049
7 departed Miami or West Palm Beach
3 taken by A.A.F.
10

(B) 0-60's off L/L Contract A0-53. BBC Reg. 1049
11 departed Miami or West Palm Beach
1 at Miami
3 at West Palm Beach

15

(c) Resasioned 0-60 (Army Release)
1 on route West Palm Beach
7. LEND-LEASE HUDSONS

A HUDSON III-A off Contract AG-5

116 delivered to Debert (800 report
4 at Montreal
2 at Ottam
13 at Montreal for Debert

3 at Detroit for Debert
5 under repair

2 at Long Beach (transition training)

32 for China
20 diverted to U.S. Navy
153 taken by A.A.F.

6 crashed (5 in U.S., 1 after export)

1%

(61 shipped: 49 to Australia; 12 to New Zealand
417 Total off Contract
(a) HUDSON III-A off Contract AC-151
152 delivered to U.K.
18 at Gender
3 on route Gander
9 at Montreal

13 at Detroit
1 on route Detroit
3 at Long Beach

2 for China

9 crashed (3 in U.S., 6 after export)
210

(82 shipped

crashed (on acceptance flight)

298

(G) SUDSON VIA off Contract AG-171
3 at Miami

24 at Nashville
on route Nashville
45 at Detroit
on route Detroit
79

U. S. SECRET - BRITISH MOST SECRET

Page 1
AUTHENTIAL REPORT

O D-36

LOCATIONS OF OCKANIC FITORY DELIVERY ATROBATT - REPORT NO 56

(Covering November through June 2. 1942
S. 0-53's off B60 Reg. 1050
10 departed Miami

2a B-17 E's (Army Release)
10 delivered to U.K. (modified)

2 at Montreal (modified)

4 at Detroit (modified)

2 at Wright Field (modified)

31 at Chayenne (modification center)
12 taken back by A.A.F.
61

10. B-24 D's (Army Release)
9 delivered to U.K. (unmodified)
3 delivered to U.K. (modified)

1 in Ieeland (unnodified)

1 at Gender (modified)
1 at Montreal (unnodified)
8 at Montreal (modified)
13 at LaQuardia Field (nod. center)
13 on route LaQuardia Field

2 created (unmodified) (1 en route od.center, 1 after export)

1 crashed (modified) (after export)

52

11. B-25 Bis (Armed Release)

3 delivered to U.K. (modified)
7 at Montreal (modified)

12 at Detroit (modified)
1 at St. Paul (modification center)
23

12. B-25 C's (Army Release)

40 at Detroit (modified)

2 - route Detroit (modified)

44 at Kansas City (modification center)
8 at St. Faul (modification center)
3 - route Kansas City
29 taken back by A.A.F.
126

13. B-26 A (Arm Release)

2 at Detroit (modified)

65 at Onaha (medification center)
2 - route Omaha

2 crashed (1 on route mod.center; 1 at mod. center)
71

U.S. SECRET - BRITISH MOST SECRET

I

REFORT

D-55

189

JUNK 1. 1942

LOCATIONS OF OCEANTO FLIGHT DELIVERY ATRORAFT - WERELY REPORT NO. 9

(Covering through June 2. 1942

1

2

69

173

A

3

7

6

9

10

10

12

8

TOTAL

13

12

11

,

TORAPHI

TED KINGDOM

211

152

115

44

789.

3

5

5

DOLE EAST

27

27

STRALTA

9
9

IGAPORE

11

1
8

land

2

3

Ferry Service

3

3

,

less
1

nder

18

6

26

1

17

14

route Gender

3

8

almouth

streal

6

17

4

4

field Ridge

26

2

27

7

9

2

4

-

bert

196

116

39

2
2

2
2

randa

8

1

land

20

10

18

parted Mand or W.Palm B.

19

at Pala Beach
route W.Palm Beach
stroit

16

,

2
1

1

1 183

1

61

12

4

40

2

304
16

2

route Detroit
ushille
route Mashville
right Field

12

2

24

24
1

2

1
3

be returned by A.A.F. 3

31

edification centers

13

1

18

2

13

route mod.centers

52

162

65

3

7

5

ong Beach

2

oder repair

5

2

34

34

or China

diverted to U.S. Navy
....F. Fam. Pro.
aken by A.A.F.
staken by A.A.F.
rashed

20

20
20

20

200

, 153

44

47

29

12

6

2

6

9

4

2

15

434

3

139 225 245 315 165 26 645 20 a 62 23 100 71 2103

TOTAL

Dolumn 1. Liberator II off Contract P-677
2. Hudson V (Long Range) off Contract A-1748

3. Hudson III (Long Range) off Contract A-66
5. 4. Venture off Contracts Contracts 4-344 A-8587, - A-1749 F-210, A-37, AU8-58, CAN-78. and BSC Req. 10772 C-60
6.

Flying Lodestars Boats off and 0-60) off L/L Contract AG-53 and 1 reassigned Army L/L Release Contract

7. Hudson III-A off L/L Contracts MC and A0-151 and Hudson VI-A off /AC-A72
s. C-53 off BBC Req. 1090
9. B-17 E (Army Release)
10. Dias D (Away Belease
11. B-25 B (Army Release
12. 3-25 0 (Army Release)
13. B-26 A (Army Release)
AIRFRAME DIVISION
PLANNING & PRODUCTION DEPARTMENT

BITTEN AIR COMMERCIAL

U. S. SECRET - BRITISH MOST SECRET
June 3. 1942