The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
159
DEPARTMENT OF STATE
ASSISTANT SECRETARY
March 24, 1943
Copy for The Honorable
The Secretary of Treasury.
A. A. B. , Jr.
House
COPY
DEPARTMENT OF STATE
Memorandum of Conversation
DATE:
Tentative Stabilization
SUBJECT:
March 24, 1943
Fund Proposals
PARTICIPANTS:
Sir Frederick Phillips;
Mr. A. A. Berle, Jr.
COPIES TO:
Copy to Mr. Harry White
... 1-1490
Sir Frederick Phillips came in to see me at his re-
quest. He had received a cable from London commenting on
the proposed press statement by Treasury. He said:
(1) Did we contemplate publishing the American
stabilization fund proposal now? I said we did not.
(2) The British Government still hopes that in our
press statement we could carry a reference to the fact
that a plan had been put forward by British experts. I
noted the point.
(3) They hoped that the phrase which reads: "fixing
values of currencies in terms of gold" in the proposed
press statement could be changed to read: "fixing values
of currencies by relating them to gold.' He enlarged this
point slightly. He said there was a large and choate body
of public opinion in England which was definitely opposed
to return to the old gold standard. It was an article of
political doctrine with the Labor Party. They feared an
endless number of questions and comments as to whether the
British Government proposed to revert to the deflationary
policy which prevailed after the last war. I said that we,
on the other hand, had a considerable body of public opinion
that still thought in terms of the gold standard and that
the
160
161
-2-
the Treasury would have to determine & little what was
meant. Sir Frederick agreed that of course we had a per-
fect right to describe our own proposal as we saw fit,
but he hoped we would modify on this point.
(4) He considered the last sentence of paragraph 3
of the press statement, giving an opinion of Secretary
Morgenthau that the stabilization fund might "point the
direction for international cooperation" as going pretty
far. He thought this indicated a degree of American
commitment to the plan whereas it had been circulated
merely as a tentative proposal. He hoped we might modify
this line so that it would read that the proposals of
American experts might "form a useful basis for discus-
sions directed towards international cooperation". I
said I thought that, of course, was a matter for the
Secretary of the Treasury to decide, though it seemed to
me a point of minor importance either way.
ans
A.A.B.,Jr.
A-B AAB:AA
(
16.
THE BRITISH SUPPLY COUNCIL IN NORTH AMERICA
Box 680
BENJAMIN FRANKLIN STATION
TELEPHONE EXECUTIVE 2020
WASHINGTON D.C.
March 24, 1943.
Dear Mr. Secretary,
I understand that the Algiers meeting
was supposed to take place before the end of this month,
but that it is now unlikely to be quite so early, as
General Catroux (who is due to precede General de Gaulle
in Algiers by 5 few days) has been held in Syria by local
business. It should, however, take place in the near
future.
Yours sincerely,
Hillips
(F. Phillips)
The Honourable
Henry Morgenthau,Jr.,
Secretary,
United States Treasury,
Washington, D.C.
163
March 24, 1943
Dear Summer:
This is to acknowledge receipt
of your letter of March 23 and to thank
you for sending me a copy of the personal
letter to you from Ambassador Braden.
Yours sincerely,
(Signed) Henry
Honorable Summer Welles,
Under Secretary of State.
"Personal and Confidential"
on envelope
File in Diary
164
THE UNDER SECRETARY OF STATE
WASHINGTON
March 23, 1943
Personal and Confidential
Dear Henry:
I am sending you for your information a copy
of a personal letter I have received today from
Spruille Braden under date of March 20.
Believe me
Your very sincerell,
Nelly
Enclosure
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
165
COPY
AMERICAN EMBASSY
Habana, March 20, 1943
Dear Sumner:
In case you have not seen the report by Messrs. Young
and Brister of the Inter-American Navigation Corporation on the possibilities of constructing wooden vessels
in Cuba and particularly by Jose Arechabala, S. A., I
am pleased to inform you that it entirely confirms
previous findings to the effect that the boats could
be built here providing we supplied everything with
the sole exception of hardwood frames and labor. Moreover, the cost of the ships will exceed that of those
which can be built elsewhere in the Caribbean area. We
would have to put up $85,000 for the amplification of
the Arechabala yard and would have to send an expert
here at our cost. In short, it is evident that Arechabala
misled Secretary Morgenthau by their undue optimism and,
in fact, are probably well satisfied not to have any
contract awarded them.
This relieves my mind because while we cannot pretend in as large an organization as this Embassy that
we do not occasionally make a mistake, I certainly did
not want to be in a position of having slipped up on
anything so important as this.
With all best wishes,
Faithfully yours,
SPRUILLE BRADEN
The Honorable
Sumner Welles,
Under Secretary of State,
Washington, D. C.
166
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
March 24, 1943
FROM Frances McCathran
CONTROVERSIAL ISSUES BEFORE CONGRESS
1. Salary Ceiling - By a vote of 74 to 3, the Senate passed
and returned to the House yesterday the Debt Limit Bill
with the new Senate Finance Committee salary ceiling rider
providing that no salaries or wages shall be restricted
below the level reached between January 1 and September 15,
1942. This rescinds the President's Salary Ceiling Executive Order and also replaces the Disney amendment passed
by the House. In the Senate discussion yesterday Senator
Langer quoted a speech by Representative Burdick which condemned the attaching of the salary amendment to the Debt
Limit Bill as "foxy legislation. "Every person with just
a common understanding of parlimentary law, Langer quoted
Burdick as saying, "will see that the matter of the Presiissue rather than being sneaked in under cover of legislation that everyone favored anyway." Senator Barkley also
regretted the attachment of such "extraneous" matter to
"essential and emergency legislation, claimed that the
President had every right to his interpretation of the
Stabilization Act, and added that it might not be so easy
"to convince eight or ten million American soldiers, who are
required to serve their country for $600 a year, that the
President has done any very great injustice in limiting
salaries to $25,000 a year." Nevertheless, Barkley said
he felt it was his "duty to vote for the Senate Committee
amendment and to vote for the bill.
dent's order should have come before the House as a direct
2. Tax Legislation - As the House prepares to begin debate on
the tax issue tomorrow, Representative Forand yesterday
introduced a proposal similar to one submitted to the House
Ways and Means Committee by Representative Robertson but
rejected by them. The Forand plan provides for: (1) cancellation of 6% normal tax and 13% surtax on 1942 income;
(2) a 20% withholding tax of which 3% would be Victory Tax
and 6% income tax; (3) discounts up to 6% for voluntary
advance payments on that part of tax not withheld at the
167
source: (4) exemptions up to $3,500 for members of the
armed forces; (5) cancellation of taxes of those who die
in service. Meanwhile Representative Celler told the House
yesterday that the Treasury's position on the tax issue
was "like a green apple--it agrees with no one.' Representative Hebert also attacked the Treasury's position on
tax legislation, saying, "The issue is whether the American
people will have what they want or what the Treasury Department is determined to force down their throats.
3. Criticism of the Treasury - Senator E. H. Moore yesterday
criticized the Treasury Department for a War Bond advertisement which said that although all the materials required
for rural electrification are out for the duration, "far-
mers of the nation can start now buying rural electrivication
and all the equipment which goes with it through purchase
of War Bonds. Your War Bonds today will buy rural electrification tomorrow and give you back $4 for every $3 you
invest." Senator Moore then charged that since "the rural
electrification activity is conducted by a Governmentsponsored corporation" whose "capital is contributed by
the Government" and since "money is expended from the United
States Treasury only by appropriations made by Congress,
the "Treasury of the United States is without authority to
represent to the purchasers of War Bonds that the proceeds
of the War Bonds will be used for rural electrification.'
4. Steel Investigation - A Truman Committee investigation of
the Carnegie-Illinois Steel Corporation of Irvin, Pa.
revealed yesterday that inspectors, allegedly acting on
instructions from their superiors, had altered the results
of various tests to make it appear that steel, some of
which was earmarked for lend-lease shipments, met required
specifications. In Committee hearings yesterday a statement
by George E. Dye, supervisor of inspection, was introduced
to the effect that since July, 1942, he had been "aware
that the mill was shipping badly laminated and piped plates
to U. S. Navy and Maritime shipyards and that defective steel
was being supplied on U. S. Treasury lend-lease orders."
Dye's statement claimed that he had brought the matter to
the attention of his superiors but that "no appropriate
measures" were taken.
5. Farm Parity - Despite the War Labor Board's warning that any
"radical change" in the price of food, might result in a
168
revision of the "Little Steel" industrial wage formula, the
farm bloc gave every indication of continuing their attempts
to revise farm parity prices. The House expects to consider
today the Steagall bill, a companion measure to the Senateapproved Bankhead bill, to include all Government subsidies
in parity computations, and on Friday the Senate is expected
to take up the Pace bill, already approved by the House,
which would require the inclusion of all farm labor costs,
including that of the farmer and his family, in farm price
ceilings. Although a Presidential veto is predicted for
both of these measures if passed, the farm bloc claims to
have the necessary two-thirds majority to override it.
169
DO
COPY NO
13
BE RE-TRANSMITTED
BRITISH No MOST SECRET www. NOTOFO
U.S. SECRET
OPTEL NO.97
Information received up to 7 a.m. 24th March, 1943.
1. NAVAL.
Before dawn 23rd. Eight Motor Torpedo-boats sighted off
TERSCHILLING a west-bound convoy of eight ships heavily oscorted. The Motor
Torpedo-bonta attacked and seriously damaged one of the escort and hit two
others, No hits seen on convoy. Motor Torpedo-boats sustained slight damage.
One of H.M. Submarines is overdue at ALGIERS and must be prosumed lost. May
have struck a mine since no enemy claim made. This was to have been her last
patrol before coming home.
2. MILITARY
TUNISIA.
ground
On 22nd United States Infantry attacked the high
south-east of GAFSA. At last night the attack was still in progress.
An enomy counter-attack 23rd made somo penetrationa along the GABES-GAPSA ROAD
towards GAFSA.
Eighth Army. A strong enemy counter-attack MAS launched against
our MARETH Bridgehead in the early afternoon of 22nd but at last night we still
hold the main Bridgehead and only a little ground, between ZARAT and the Coast,
had to be yielded. Fighting continued throughout 23rd. Prisoners taken this
area nov over 2,000. South of KL HAMIAA some of our arnoured forces, who had
advanced North from KSAR RHILANE, attacked enemy positions on 21st and took thom
after heavy fighting. By morning of 22nd our forces had made gaps in the ninefields and crossings over anti-tank ditches, thus establishing a Bridgehood
against which the enemy, on the afternoon of 23rd, launched a tank attack.
Fighting continued throughout the afternoon. By evening 23rd our forces had
reached a lins roughly parallel with the EL HAMIA-KEBILI ROAD about six miles
South of it and twelve miles South-west of EL HAMMA.
3. AIR OPERATIONS.
WESTERN FRONT. 22nd/23rd. ST.MAZAIRE. 584 tons high explosive
and 324 tons incendiaries were dropped, including 1253 1000-lb. high explosives.
Bright moonlight, only thin cloud; most crews could identify objectives visually
in spite of smoke-screen and some ground haze. Main attack from 9.30 - 10.50 P.M.
Bombing well concentrated in docks aron, where fires developed satisfactorily.
One very large explosion reported. Moderate anti-aircraft, inoffective search-
lights, fighters active
23rd. Twelvo Mosquitoes made C. low-level attack on Nentes
Locomotive Works. Many hits on the buildings were soon. Four enemy aircraft
crossed the South Coast. One WILS destroyed by anti-aircrnft.
23rd/24th. Following aircraft despatched - Ses Mining 45 (one
missing), Leaflots LILLE and ORLEANS 21 (one missing), Offensive Patrola 11.
TUNISIA. 21st/22nd. Twelve Wollingtons bombed SFAX an 52
Medium ene Heavy Bombers attacked enemy concentrations near GABES. 22nd. PALERMO
vas attacked by 24 Fortresses. 78 United States Fightor and itodium Bombers
attacked enemy positions in the ZARAT area. "Hurri-tankbustors" and Kittyhawks
attacked concentrations of enemy tanks at KL HAMAA destroying nine. Fighters
flow offensive patrols. A large ship was probably sunk by Harauders off CAPE-BON.
A total of 577 sortios was flown during the day. Enony casualtics 27.11.20.
Ours - 11 missing.
ITALY AND SICILY. On 21st/22nd five Liberators bombed Naples, and
on 22nd/23rd Multa Mosquitoss destroyed four loconotivos.
BURMA. 21st. FifLeon United States Liberators bombed and hit the
viaduct at GOKTEIK north-cast of MANDALAY. 22nd. 23 escorted Elenheias attacked
an enemy camp at PROME.
170
March 25, 1943
10:00 a.m.
Re: MR. FRANCIS GOODALE
Present: Mr. Bell
Mr. White
Mr. Paul
Mrs. Klotz
H.M.JR: I just wanted to tell you gentlemen about
Mr. Francis Goodale of Boston, who has been very highly
recommended, and who is here today.
He is in with Mr. Gaston. He is going to make
appointments with you different people. What I have in
mind is just as general assistant to me, personally.
He will come down here with no administrative
responsibility - just sit here. I have some things
which I don't have time to study, and I am going to give
them to him.
He may have nothing to do for a week, and he may be
very busy. I want him to look into Procurement. If
he wants to find out something about taxes, he can do
just what Justice Byrnes does. He can ask you people's
advice. If he wants to know something about the cost
of living, he can go to you (Bell), or to Harry White.
In my talking with him - it would be sort of a
trial for a month to see if he decided he wanted to come
and I decided I want him. But I very, very much need
somebody of this type. He is a man about sixty; he
enjoys an excellent reputation. He voted three times
for Roosevelt. He is a man of very moderate means.
MR. PAUL: Was his father Treasurer of Amhersty
171
-2-
H.M.JR: Might be. He must have gone to Amherst.
He is that type of person.
MR. PAUL: They don't stick out that way, do they?
(Laughter)
H.M.JR: Yes, these New England high vests I mean, he is distinctly very, very much Boston.
MR. PAUL: There was a fellow there at the time I
was there, I think he was Treasurer - a man named Goodale.
H.M.JR: A nice twinkle to his eye - Looks to be
shrewd. I said to him, "I hope you are liberal to the
left."
He said, "I am as much to the left as the New
Republic and The Nation." I said, "That suits me.
He is an ardent supporter of the Loyalist Spanish
business. He has never met Thomas Jefferson Coolidge.
(Laughter)
MRS. KLOTZ: That is in his favor. (Laughter)
(The Secretary held a telephone conversation with
Mr. Biddle.)
him.
H.M.JR: Anyway, Gaston will ask each of you to see
In his favor I had Greenbaum do some checking
amongst the lawyers in the Army, and they said the minute
that I said I didn't want him they want him, and have
got a very responsible position for him. They just
couldn't understand how they overlooked him.
He was recommended to me - although he doesn't know
him - never met him - by Ben Cohen. General advisor on
anything that I need where my desk is overflowing and I
can't do it.
172
-3I mean to say, it may be Procurement. I am worried
a little bit about Procurement. Right now I am worried
because the Labor people are worried about what is
happening in War Bonds. I have got to see the Labor
press on Saturday.
I might say, "I want you to go into this whole
thing and meet the Labor people. What is their problem
and why are they worried - what are they worried about?'
Anything which I happen to be handling.
As I say, if he wants legal work done, then the
General Counsel's office would do it. I realize that
normally it isn't the kind of thing, but if I had a
vacancy as Assistant Secretary, he is the kind of person I would make Assistant Secretary. He is that caliber.
So, if you people would talk to him, and then come
back and see me at quarter of three and tell me what you
think--
MR. PAUL: I will try to do it. I may have to be
up at - debate starts today. I have to go back now and
write an additional statement for Doughton for his speech.
I probably ought to be up there.
H.M.JR: Well, anyway, my schedule is - I told
Gaston I would see him - and you people - at quarter of
three, and then I would see Mr. Goodale at three-thirty.
MR. PAUL: If I can't be here, I can tell Gaston
or Dan.
H.M.JR: Does anybody have any question?
MR. WHITE: The only question I might ask - do I
understand he is to be your advisor, that it isn't
another channel between us and you - we don't have to
go through him to you? It is not a general assistant
in that sense?
H.M.JR: No, it is just somebody that will sit
173
-4in that chair half the time. I mean, right now I have
got to impress on these people that they can't just
slap Labor down after I have built up this beautiful
relationship. Somebody has to sit down and say, "What
is the trouble? What are you worried about?"
If he is here, I will say, "All right, go into it
with Houghteling and tell me what I can do to satisfy
Labor." I have to face them Saturday morning.
MR. WHITE: I have a problem which I want to take
an opportunity to ask you about, that might fit.
Ben Cohen wrote me a letter about selling the Army
and Navy stuff. I turned it over to Gamble for a report.
The report that Gamble gave me - the table looks to me
to be one that will create considerable criticism; not
the quality of the report, but the fact that only fortyfive thousand, if I remember the figures exactly, of
the entire Navy personnel are having pay-roll deductions -
forty-five thousand out of over a million. If I send
that report to Ben, I know we will hear of it some way.
Now, I told Ted that I would have Ben get in touch
with him, but I don't know who you want to handle that.
I don't want to get into that. I am sure it will create
some kind of subsequent discussion and criticism that
it is not being properly handled.
Now, is that the sort of thing you mean?
H.M.JR: Yes.
MR. BELL: That ought to go to Barte# as Chairman
of the Interdepartmental Committee. I question the
figure you give. The Navy is way ahead of everybody
else.
MR. WHITE: You are talking about personnel. I
was talking about sailors.
H.M.JR: Enlisted men?
174
-5-
MR. WHITE: The men in the Navy Department have a
very excellent record. I am speaking of sailors and
soldiers, which is what Ben Cohen inquired about.
H.M.JR: You mean only forty-five thousand sailors
who are deducting their pay?
MR. WHITE: Yes. There are others who are buying,
of course, in the various places. Of that they don't
have figures.
MR. PAUL: That ties in--
it.
MR. WHITE: I didn't know who was supposed to handle
H.M.JR: It is the overflow things that I don't
get the time off to digest. Look at that pile there.
It is not somebody - you would come to me and I would
say to Mr. Goodale, "Now look, I want you to listen to
what Harry White has got to say." And he would sit
there.
I will say, "Now think it over. If you are not
satisfied, go talk it over with Harry. What do you
think I should do?"
Take this whole postwar business - I mean, take this
thing - should there be a release or shouldn't there?
I acted very fast yesterday. Maybe I am right; maybe I
am wrong.
MR. WHITE: Quite all right.
H.M.JR: I mean that kind of thing. Supposing
England published it. I just want another wise head.
He said, "What are the qualifications?" I said,
"Just good common horse sense.
You see what I mean. I don't want the most brilliant
person in the world - a person necessarily generating ideas.
I want a person who will listen.
175
-6-
MR. WHITE: We always had more of those around in
the past years than recently.
H.M.JR: Gaston said, "We are all so busy signing
mail, nobody around here has got a chance to think."
Does that explain it to you?
MR. WHITE: All except the last sentence. (Laughter)
H.M.JR: He (White) always gets so personal. (Laughter)
176
March 25, 1943
10:02 a.m.
HMJr:
Operator:
Hello.
Mr. Biddle.
HMJr:
Right. Hello,
Francis
Biddle:
Henry?
HMJr:
Speaking.
B:
This is Francis.
HMJr:
Good morning.
Henry, in reference to that Fish matter, I
looked at the file and I find that January
29 we returned it to - to the Bureau
B:
HMJr:
Yeah.
for appropriate disposition of civil
B:
liability.
HMJr:
Yeah.
B:
Now I didn't know if, in view of that, you
wanted us to discuss the ground of civil
liability. We think there is ground for it,
and I'll be very glad to go over it with with your people if you want us to.
HMJr:
I see.
B:
In other words, it was sent back for
HMJr:
Oh, I know.
action on civil liability.
B:
HMJr:
Well, it's a thing that - the reason I took
it to the President was there was this letter,
which I think - you got all the correspondence
B:
I have.
177
-2HMJr:
and where the Commissioner of Internal
Revenue wanted me to sign, you see?
B:
Yes.
HMJr:
Approving.
B:
Yeah.
HMJr:
And I didn't want to do this without the ap-
B:
I understand.
HMJr:
And that's why I gave it to him.
B:
I understand, yeah.
HMJr:
B:
HMJr:
B:
proval of the President.
So you think there is grounds for civil?
Well, I think there probably 18. Of course,
it' 8 a matter for your determination.
Yes. Well, I tell you what I'd like you to
In other words, you'd assess the tax against
him.
HMJr:
Yeah. Would you send me back those papers?
B:
Yeah, you bet, yeah. All right, and then
HMJr:
And
B:
you can consider it, and if you want a con-
ference, then let me know.
HMJr:
Right.
B:
Fine.
HMJr:
Thank you very much.
B:
All right.
178
March 25, 1943.
10:10 a.m.
TAXES
Present:
Mr. Bell
Mr. Paul
Mrs. Klotz
MR. PAUL: I have one problem here which has to
be faced.
About a week ago John McCormack asked me for a
description of the various plans that had been offered.
I didn't - I couldn't, in fact, do anything about it
until recently because the Republicans have just
changed their plan yesterday, but he asked for infor-
mation, and I have written a letter in response. He
renewed his request day before yesterday, and I have
written him a purely informational letter.
As a matter of precaution, at the end I put the
sentence, "You will recall that Secretary Morgenthau
has announced his full support for the Ways and Means
Committee plan." I think that is all right to send
him, isn't it? (Referring to letter and report to
Mr. McCormack.)
H.M.JR: You are asking my advice?
MR. PAUL: Yes.
H.M.JR: What I would do is, before I show it to
him, I would tell old Bob Doughton just what you are
telling me. He can't refuse, you see, to let you do it.
But I would say, "Now, Bob, if you don't want it, all
right, but we want you to know we are going to play
ball with you. Here is the leader of the House that
wants this thing.
MR. PAUL: I don't see how you can refuse the leader.
179
-2-
H.M.JR: You can't, but if you are asking me -
what do you think, Bell, where Doughton is so sensi-
tive on this thing?
MR. BELL: Yes, I think it is better.
H.M.JR: To show it to Bob first?
MR. BELL: Or tell him about it. He probably
won't read it. It is long, isn't it?
MR. PAUL: Eighty pages.
MR. BELL: The report doesn't cover the various
plans?
MR. PAUL: Yes, it does.
MR. BELL: I mean, the committee report. It goes
into a lot of them.
MR. PAUL: No, it doesn't cover these. That is
why he wants the information. He wants it so he can
act if some emergency arises.
H.M.JR: I would walk in there and tell Bob, "I have
this thing; I can't refuse it, but I didn't want to do
anything without talking to you first." The chances are
he will say, "O.K."
MR. BELL: I think he will. I don't think he can
refuse it.
MR. PAUL: The only difficulty is one of time, now.
18
March 25, 1943
11:26 a.m.
Grace Tully:
Mr. Secretary, how are you?
HMJr:
I'm fine.
T:
That's good. Mr. Secretary, the President
said, "Fine," take that up with him on
Friday after Cabinet, hmmm?
HMJr:
oh, you got my letter?
No.
HMJr:
T:
Oh.
Just this minute. I haven't even opened
it, but - but somebody did bring over to
me an envelope which I haven't yet
opened. It'
HMJr:
Well
just been handed to me a second ago,
T:
but I had intended to call you before he
came in and I didn't know it related to
that.
HMJr:
Well, I don't - I don't even - I had
written you a letter and sending you a
copy of what I wanted to take up with
him.
T:
Yes, all right.
HMJr:
And I don't know whether it's gone yet.
T:
Yes, it's here. I think I've - wait a
minute, I haven't opened - let me open it.
HMJr:
T:
HMJr:
I don't think it's gone yet.
No, this - no, that isn't
Well, you move so fast I can't keep up with
you.
T:
(Laughs)
HMJr:
But it will be over there shortly, and I
thought he might want to - give - give it
to him so he can read it before Friday.
181
-2T:
All right, fine. I'll do that, and then will
you mention it to the Secretary of State or
do you want me to?
HMJr:
T:
I think it would be nice if you would mention
it, and he's 80 formal, you know.
Call him up and say the President would like to
talk to you and him after the Cabinet about this
matter in North Africa, hmm?
HMJr:
That's right.
T:
The French franc - all right, I'11 do it.
HMJr:
Thank you 80 much.
T:
Fine, Mr. Secretary. Goodbye.
182
March 25, 1943
1:04 p.m.
HMJr:
Operator:
Hello.
Mr. McCormack.
HMJr:
Oh, yes. Hello.
Operator:
Go ahead.
Cong.John
McCormack:
Hello, Henry?
HMJr:
Yeah.
M:
John McCormack.
HMJr:
Right.
M:
Henry, on Bill Schulte - you know Bill.
HMJr:
Yes.
M:
HMJr:
I just wanted you to know the Speaker and I
have a very fond regard for him
Oh.
close attachment
M:
HMJr:
Good.
always right
M:
HMJr:
M:
Good.
and dependable and - while the Speaker's
away, I know I speak his sentiments, but I I recommend him strongly to you, and I know
the Speaker would and also that you try and
give him -- if he's appointed - if you make
an appointment -- the best break you can from
the salary angle.
HMJr:
Yeah. Well, of course, we're limited on that.
M:
I see.
183
-2HMJr:
But I - I did make him an offer, you know.
M:
Yeah.
HMJr:
Yeah.
M:
Well, I didn't know - I didn't know what the
HMJr:
Well, I told what's-his-name from Indiana, you
status was, see?
know.
M:
Louie Ludlow?
HMJr:
Yes.
M:
Yeah.
HMJr:
M:
that we'd be glad to pay him $5,000, and
I told him that about a month ago.
Yeah.
HMJr:
Then he turned us down; then he came back and
M:
Yup.
HMJr:
M:
said he'd like to have it. So I said, "Well,
the job is still there."
So that's....
Well, that's fine, Henry.
HMJr:
Right.
M:
Now while I get you, on Goodale..
HMJr:
Yes.
M:
I have made inquiry. I sent you a report a letter that I got from one - a very good
friend of mine, a very reputable lawyer in
Boston.
HMJr:
Oh, yes.
M:
You'll get it tonight or tomorrow morning.
184
-3HMJr:
M:
Yeah.
Mr. Goodale is a gentleman of unimpeachable
reputation and character and an outstanding
man in the - and a man whom this friend of
mine has checked
HMJr:
M:
HMJr:
M:
HMJr:
Yeah.
and I have never received - I've never seen
a finer recommendation of anyone than I - than
the one I received from this friend of mine, and
which I've transmitted to you.
Fine.
I just wanted you to
Well, I - I asked some lawyers that I knew over
at the War Department to check him, and they
did, and they said, "My God! How did we overlook him?" They said, "If you don't want him,
we do."
M:
HMJr:
M:
Hmm. Well, he's a top-rate man and the interesting - he's a Democrat.
Oh, he voted three times for Roosevelt.
Yeah, but he's a registered Dem. too.
HMJr:
Good.
M:
He goes further than that. He's a registered
Dem.
HMJr:
Yeah.
M:
Yeah.
HMJr:
M:
HMJr:
Thank
I thought - I thought you'd be glad to hear
that, and you'll - you'll get that - you' 11
get my letter to you - sent to you personally
Yeah.
185
-4M:
and with the enclosure that I received from
this friend of mine.
HMJr:
Ever 80 much obliged.
M:
Thanks, Henry.
HMJr:
Take care of him.
M:
Goodbye.
186
March 25, 1943
2:50 p.m.
Re: FRANCIS GOODALE
Present: Mr. Gaston
Mr. Bell
Mr. White
Mrs. Klotz
H.M.JR: Now, would you please - what about
Francis Goodale?
MR. GASTON: He looks like a pretty high-grade
character to me. I liked him a great deal.
H.M.JR: Do you think he will be useful to me
around here?
MR. GASTON: I think he might be very useful.
H.M.JR: Liberal enough?
MR. GASTON: Liberal enough - not an extremist,
not a fanatic - good balance, I thought. I don't know
his reputation as a lawyer, but he seems to be with a
good firm.
H.M.JR: His reputation as a lawyer is the highest.
MR. GASTON: As a personality I liked him, his
temperament, and so on.
H.M.JR: Good sense of humor?
MR. GASTON: Yes.
Did you get my little note about what John
McCormack said to Randolph Paul?
187
-2H.M.JR: I am just two days behind.
MR. GASTON: That was just this morning. Randolph
Paul phoned me that John McCormack said to him that the
word he got about Goodale from Boston was that he was
exceedingly fine. John is sending you a letter which
he got from a pal of his in Boston - a lawyer in Boston.
H.M.JR: He called, and said he is tops.
MR. GASTON: You saw the letter?
H.M.JR: No. He called me on the phone.
him.
MR. GASTON: Then you got the message direct from
H.M.JR: John called. He said he is tops. He said,
"Henry, he is even a registered Democrat." (Laughter)
MR. GASTON: He told me he was born and brought up
a Republican, but he became a Woodrow Wilson Republican
in 1912, and he has never voted for anybody but a
Democrat since then.
H.M.JR: According to John McCormack, he is a
registered Democrat.
Anything else? Harry?
MR. WHITE: I liked him. He made a favorable
impression on me.
I have no way of judging competence or his
imagination - that is something that you will have to
get elsewhere or take a chance on. But his personality
I found attractive.
He is a man who apparently also has sufficient
drive and social interest to undertake outside of his
work to pursue problems of adult education. He has
started and conducted some classes. From him I got
this. I think it is something in his favor.
188
-3-
I did not get any definite impression as to his
ability, but I did get the feeling that he is a kind
of fellow who might well be useful and who would not
be a source of friction.
He is certainly worth a try.
H.M.JR: Bell?
MR. BELL: I only had a few minutes with him. I
just got started, and then went into the other room.
But he favorably impressed me, and I think he impresses
you more as you talk with him. At first I don't think
you get a very good impression of him. He hasn't such
a good personality at first, but I think after you talk
with him a little while-MR. GASTON: What I like about him is that he has
none of this high-pressure front about him. He is the
old-shoe, New England intellectual kind.
MR. BELL: He seemed a farmer rather than a lawyer.
H.M.JR: Did you see his hands? Do you remember
that other man that came in, his hands always bothering
him - didn't know what to do with his hands.
MR. BELL: He looks like a dirt farmer.
He has had quite a bit of experience. He has
worked in the United States Attorney's Office, or the
State Attorney's Office.
MR. GASTON: United States District Attorney's.
He handled antitrust and war contract cases in Boston
under the famous Judge Anderson, who was the liberal
New England judge of the Circuit Court of Appeals. He
was the district attorney during and after the last war,
and Goodale served as assistant to him.
H.M.JR: That doesn't ring a bell with me, but it
does with you?
189
-4--
MR. GASTON: Yes.
MR. BELL: He has had enough Government experience
to know something about it. I mean, he isn't particularly
lost. He knows he is up against a certain amount of red
tape. He wouldn't be particularly lost in a job in the
Treasury.
I think he would like to come. He said the prospects
are interesting, but he has got some trouble in his own
firm and also has family responsibilities, which he told
me about.
H.M.JR: He is not a man of means.
MR. BELL: He has four children, all of whom are
married. One boy has been called into the Army and
kept at school - he got married while he was at school
so he has that family to support.
I think he told me he has three daughters, all of
whom are married, and the three husbands are liable to
be called to the service at any minute. He says, "If
they are I will have to assume the responsibility of
those three families. 11
He has a brother that has had very hard luck, and
he helps there.
H.M.JR: It is amazing how little he has been
earning considering the reputation of his firm.
MR. BELL: He said the firm's work had kept up
well. There were twelve partners at the top - I don't
know whether he called them senior or not - and they lost,
I think, eight of them into the Government service in
one form or another. If he left it would leave three to
carry on the work of twelve.
He sai d, "That is what I am up against, and in
considering this job I have to think of the family
troubles and firm troubles. But he said, "If there
190
-5is a job to be done, I am willing to take that chance."
H.M.JR: My proposal is for him to come down and
try it for a month. I don't want to take a chance.
But the people - anybody asked about him - just go into
raptures about this fellow.
In all my life I never heard Eddie Greenbaum - he
doesn't know him, but all the people he checked with in
the War Department give this fellow such a reputation.
MR. WHITE: A month is not an awfully long time.
H.M.JR: I just said a month.
MR. GASTON: That is one thing I didn't do. I
didn't send him over to Eddie Greenbaum.
H.M.JR: Oh, well.
You people are all favorably inclined?
MR. WHITE: I am.
MR. BELL: Try him.
H.M.JR: The way I feel is this. Bill Douglas
recommends two fellows. One of them turns out to be
a character witness for Schenck, the movie man, and
was put in there by Schenck as comptroller--
MR. BELL: Director of finance.
H.M.JR: He is now a chief justice of the State
court of California. A couple of years he was just a
leg man for Schenck, wasn't he?
MR. BELL: Yes, just about that, I guess. He was
a practicing attorney in California. He apparently had
an inside track to Schenck. Olson got him in the
campaign for his informative service.
191
6-
H.M.JR: I don't know what the other fellow is like,
but this fellow - I don't think he is going to set the
world on fire. I don't want anybody to set the world on
fire. I have enough people doing that. I just want the
fellow to sit as a judge and advisor.
MR. BELL: I don't know what he does. Harry said
he was interested in certain social activities.
MR. WHITE: Outside of his law. This was prior to
the war.
MR. BELL: He didn't know Charlie Spencer, and you
say he never met Coolidge. I know a pretty able lawyer
in Boston, and he never heard of him. So apparently he
keeps pretty close to his own clique.
H.M.JR: I will have another talk with him at
three-thirty. I think I could do a lot worse, don't
you?
MR. GASTON: I am sure you could.
H.M.JR: The man is certainly thoroughly respectable.
He is on the right side on the Spanish question.
MR. BELL: He looks like a fairly honest individual.
H.M.JR: As I say, I was surprised, being with that
kind of a firm, that his income was as moderate as it
is.
MR. WHITE: Did you know Codman of Boston?
MR. GASTON: No.
MR. WHITE: He apparently did a lot of work with
him. He is rather a well-known, upstanding figure
in Massachusetts.
H.M.JR: Peter Odegard checked him through
192
-7-
Civil Liberties. They think very well of him. I mean
of the Massachusetts - he is not a national figure.
But all I can say is if I don't tak e him the Army
is going to snap him up in a second and give him a very
important position.
All right, gents.
ASSISTANT SECRETARY OF THE TREASURY
March 25, 1943.
MEMORANDUM
TO:
Secretary Morgenthau
FROM: Mr. Gaston
Randolph Paul phoned that
John McCormack told him that the
report he got on Goodale was
exceedingly good. McCormack is
sending you a letter from a lawyer
friend in Boston.
{
TO message
from
mr. Paul
the
Mr. Paul saw mr.
Goodale on the hell
this afternoon and
is favorably impresed
Paul to Can be reached
three
office Cong. if you me wish Cormacki
to speak with him .
3/25/43
2:57
From: Mr. Fitzgerald
195
Treasury Department
Division of Monetary Research
Date March 25
To:
194 3.
Mrs. Klots
This is a report I received on
Mr. Goodale from a friend who did not
know Mr. Goodale himself but who in-
quired of a reliable friend.
H. D. White
MR. WHITE
Branch 2058 - Room 214
196
Mr. Goodale is a fine and kindly gentleman. He is a
member of the much-respected Boston law firm of Hill, Barlow,
Goodale and Wiswall. Some four or five years ago I tried a
suit in equity wherein Goodale represented a Cambridge
Savings Bank, I considered him the kind of a fellow who
would be on the money side in a law suit. To my surprise,
as I did not think of him as having such interests, he
became somewhat active in the civil Liberties Union of
Massachusetts. He is a liberal in the sense of being for
the Bill of Rights. No one would suspect him of being
radical, which he is not, but he is a fine fellow and unquestionably a good lawyer. His law firm is one of long
standing and was formerly known as Hill, Barlow and
Homans. I seem to recall that he has a son who is also
a lawyer, but I am not sure of this. Should you want
more detailed information I can get it readily enough by
inquiring from some of the Civil Liberties boys.
cc - Mr. Graves
197
Mr. Gamble
March 25, 1943
3:03 p.m.
Operator:
Go ahead.
HMJr:
Hello.
Gardner
Cowles:
Hello, Mr. Secretary.
HMJr:
Yes.
C:
This is Gardner Cowles in New York.
HMJr:
In New York?
C:
HMJr:
Yes, sir.
Yes, sir !
C:
Chet LaRoche and I have been talking with
Frank Tripp of the Gannett Newspapers
HMJr:
Know him - know him very well.
C:
And we have persuaded him to be the chairman
HMJr:
Yes.
C:
....of this Allied Newspaper Council.
HMJr:
Good!
C:
Now he makes one request
HMJr:
Yes.
C:
which seems to be reasonable. You have
a man working for you now in the Treasury
named Don Bridge.
HMJr:
Bridge?
C:
B-r-1-d-g-e.
Never heard of him.
HMJr:
198
-2Well, I don't think he has a very important
job there, and he's in the War Savings -
C:
Consultant, I think that's his title.
HMJr:
Yeah.
C:
He wants to have Don Bridge assigned to him
HMJr:
Yes.
for the next couple of months to help
C:
organize the newspapers adequately.
HMJr:
Well, I - he can't be terribly important or I I would have known about him, but I would say
off- hand unless - well, we'll - we'll - I'11
say "yee." I don't know what the man's doing.
C:
All right.
HMJr:
Don - Don Bridge.
C:
That's right.
HMJr:
I'11 say "yes."
C:
Now I wanted Frank Tripp to come to Washington
HMJr:
Yes.
C:
HMJr:
.... to talk to you briefly
Good.
at your earliest convenience.
C:
HMJr:
Well
C:
And I wondered how Monday suits your schedule.
HMJr:
Well, we'll make it suit it. What time Monday -
C:
Any time you say.
HMJr:
Well, let's say eleven o'clock.
around what time of the morning?
199
-3- C:
Eleven o'clock. All right, I'll
HMJr:
Wait a minute - wait a minute, I've got some-
C:
All right, ten-thirty Monday morning.
HMJr:
Will you bring him over?
C:
I'll bring him over, yeah.
HMJr:
And that's yourself and Tripp - and the man that
body else. Ten-thirty.
you want again is who?
C:
Don Bridge.
HMJr:
Don Bridge.
C:
B as in "baby"
HMJr:
Right.
C:
.... r-1-d-g-e.
HMJr:
Right.
C:
Okay. Thank you, Mr. Secretary.
HMJr:
Thank you.
C:
Fine.
200
March 25, 1943
4:48 p.m.
HMJr:
Would you tell Senator O'Mahoney, please,
that I have today sent over to the
President of the United States Mrs. Ross'
reappointment.
Senator
O'Mahoney's
secretary:
Oh, fine!
HMJr:
Will you tell him that?
S:
HMJr:
S:
Yes, indeed, and he'll be delighted.
And I imagine it'11 shortly go up to the
Hill.
Yes, indeed. Well, thank you so much, sir,
and he'll appreciate that.
HMJr:
Give him my very best regards.
S:
Yes, sir, I shall.
HMJr:
Thank you.
S:
Thank you.
201
March 25, 1943
My dear Mr. President:
I thought you would be interested in the en-
closed clipping from the New York Herald Tribune
of March 23rd.
Our meeting last Saturday was most success-
ful. General Marshall gave one of the best offthe-record talks on the war that I have ever heard.
It is most encouraging to me to have the newspapers
enthusiastically behind our April War Bond Drive.
Sincerely yours,
(Signed) H. Morgenthau, Jt
The President,
The White House.
Sent by S.S.A.gout
18145- - P.M-
202
NEW YORK
Herald Tribune
MAR 23 1943
Nation's Press
To Aid U. S. in
13-BillionDrive
that their buying be stepped up for United States Treasury War Flthe period of the drive. Pay-roll de- nance Committee, the combined
ductions are producing approxi- facilities of the War Savings Staff
mately $400,000,000 a month. Ad- and the Victory Fund Committee.
"It is planned further to organditional war-bond purchases total
ize hard-hitting local committees
approximately $500,000,000
month. The April goal for non- who know how to get things done.
bank subscriptions is eight out of Representatives of the committees
total of $13,000,000,000.
in charge will shortly call upon
This money can be raised only you for your help and advice.
Those of us who attended Secthrough investment in more gov-
Allied Newspaper Council
ernment bonds by every man, retary Morgenthau's meeting heard
his story and that of General
Set Up to Back Biggest woman and child.
These
figures
will
give
you
Marshall.
It was an effective. tellLoan Appeal in History
some idea of the magnitude of ing presentation of a critical situthe job which confronts the Treas- ation. We are sure that had you
WASINGTON, March 21 (AP).
Representatives of America's ury Department in its financing been present. you would have ofnewspapers formed an Allied of the war. It's a job which must fered immediately your complete
Newspaper Council Sunday to sup- be accomplished on the home front support and assistAnce.
give
this
port the Treasury's $13,000,000,000 If we are to bring the war to an We know that you will
Second Victory Drive, the greatest and successful conclusion. drive the same responsive, cofinancial undertaking in history, Furthermore, the responsibility for operative and general help that
persuading our people to put their proved so effective in the scrap
which starts April 12.
The council was organized after surplus funds in the safest invest- campaign, and that, as leaders of
the
newspaper representatives ment in the world lies largely with public thought, you will accept the
heard Secretary Henry Morgen- the newspapele. This is very defl- challenge that has been placed bethau Jr. and General George nitely a sales job which we can do. fore you by your government."
"As time vital, representatives
Membership of Council
Marshall, chief of staff.
The council issued the following ofwere
the newspaper
profession
who The Allied Newspaper Council
in attendance
at the meet-
is
statement:
"At the request of the Secretary ing formed a committee, to be made Walter
up of the following
president,
Dear,
of the Treasury. Henry Morgen- known as the Allied Newspaper
thau Jr., a group of editors and Council; pledged their complete American Newspaper Publishers
publishers representing the vari- support to Secretary Morgenthau Association.
vice-president,
ous newspaper organizations, met and assumed the responsibility for John S. Knight,
in the Treasury Building Saturday transmitting this important mes- American Society of Newspaper
sage to you. The newspapers of Editors.
morning. March 20,
The meeting was called by the the nation were almost entirely Basil L. Walters, secretary.
Newspaper
Secretary for the purpose of ac- responsible for the outstanding American Society of
quainting the newspapers of this success of the scrap campaign. Editors. and president of the Mancountry with the necessity of driv- Here is another opportunity to aging Editors
Association.
E. H. Abels.
president, National
ing home to every American citi- help our country win the war
Editorial Association.
zen the vital importance of the the earliest possible date.
A. C. Hudnutt, president, Inland
M.
at
$13,000,000,000 Second War-Loan
Drive, to be launched April 12.
"Every one present was tremendously impressed with the magni-
tude and importance of the task
which lies immediately ahead,
explained by Secretary Morgenthau and amplified by General
Marshall. who presented the mil.
Itary aspects of the present situation.
Need to Speed Victory
The job at hand must be done
locally. The only way that the
message can be brought to every
citizen is through your newspaper
That is where you can help. This
war should not be permitted to
continue one minute longer than
is absolutely necessary. if we are
to save the needless loss of precious
"This war-loan campaign
will
be the greatest financi undertaking in the history of the world. and
will demand the participation of
O. G. Andrews, president. New
England Daily Newspaper Association.
Charles P. Manship, president,
Southern Newspaper Publishers
Association.
Cranston Williams, general
manager. American Newspaper
Publishers Association.
Frank E. Gannett, president,
ing of money. If those of us on Gannett newspapers.
the home front fall to do our part
Roy D. Moore, vice-president
and general manager, Brushin every possible respect, the end
of this horrible conflict will be Moore newspapers.
lives and avoid the useless spendGreatest Drive of Kind
Daily Press Association.
tragically delayed.
H. W. Stodghill. general manager, The Philadelphia Evening
every person in the United States,
"As the plan is now set up, the
president of the Federal Reserve
money individuals are currently investing in war bonds, it is essential
chairman. He will have, under the American Society of Newspaper
No matter how much of their Bank in your district will be area
Bulletin.
Linwood I. Noyes, vice-president,
Editors.
E. S. Friendly, "The Sun," of
New York.
203
March 25,
1943
Ted Gamble
Secretary Morgenthau
I understand from Robbins that he left you in charge
of the New York meeting at which I am going to speak. I
wish you would find out as much as you can about it. Who
are the speakers? I want to be consulted.
I heard yesterday from Houghteling that they're thinking of having Murray and Green, and I think it's a mistake
to have them there in New York. I think they should have
New York State labor leaders and not national labor leaders.
Anyway I want to be consulted, please.
204
March 25. 1943
TO THE SECRETARY:
Fellowing your instructions that I look into the War
Department bond situation, I called upon General Carter, Chief,
Fiscal Service, War Department, yesterday afternoon. This
afternoon I called on General Loughry, Chief of Finance, under
whose jurisdiction the work falls. Present at the meeting with
General Leughry were General Heuper and Colonel Tillman who is
in immediate charge. I will give you a more detailed report
upon my return from Newark. Meanwhile, here are some of the
highlights.
There are roughly 4 million accounts, civilian and
military. These accounts will involve the posting of roughly
23,000,000 pay-roll deductions.
They now have about 2,000 employees working in the Bond
Issue Division, with absenteeism running about 20 per cent,
sometimes as high as 30 per cent. The actual working.time; therefore,
is equivalent to about 1,600 or 1,700 employees. They are running two shifts.
Between 50 and 60 per cent of the help is colored, a
great percentage being inexperienced. Some of them cannot read
figures: some cannot add, but apparently they are the best that
can be obtained. They need about 1,000 more employees. They
would have enough space if they should run a third shift.
Under the present slow and tedious ledger-posting process,
assuming that there would be provided additional help, and
asseming further that a large part of the civilian accounts
should be returned to the field, the military accounts might be
processed about as follows, although as a matter of exution, the
figures cannot be accepted without careful analysis and recheck:
Month is
which deductione were
Month no
coived in
War Dept.
made
October
November
December
January
February
March
November
December
January
February
March
April
Total
Number of
pay-roll doductions
(postings)
Number of Approximate
bonds to
be
issued
1,500,000
2,000,000
3,000,000
3,500,000
3,500,000
3,500,000
300,000
400,000
600,000
700,000
700,000
700,000
20,000,000
3,400,000
date when bond
delivery would
be completed
April 30
May 31
July 15
September 1
October 15
December 1
205
-2In January they issued about 200,000 bonder in February,
218,000. In March they will probably increase to 235,000 bonds.
From this it will be seen that the above estimate of December
first for clean-up is 100 optimistic. It is more likely to run
up to 15 or 16 months unless something drastic is done with
respect to a change in procedure.
with this in mind, I took the liberty of making a sug-
gestion to General Loughry this afternoon, making it clear that
it was not to be taken as a recommendation since is had not been
discussed at the Treasury. General Loughry, General Heuper. and
Colonel Tillman expressed keen interest in the suggestion since
they are anxious to find a satisfactory solution to the problem.
I suggested that if the idea appeared to have merit from a
practical standpoint, after careful study in the War Department,
and if the Treasury should agree, the matter might be discussed
jointly by the War Department, Treasury, and the General Account-
ing Office. In considering the procedure, I stated that there
should be weighed the effect on the morale of the soldiers and
their families, and the saving in administrative expenses against
the probable loss which the Government might sustain. In this
connection there is for consideration the fact that the saving
of administrative expenses and manpower would undoubtedly outweigh
the loss, if any, which night occur.
The suggestion is this Instead of posting the earliest
pay roll first, to be followed by the separate posting of each
subsequent roll, we would take the most recent pay roll. In
every case where the bond deduction as shown on the most recent
pay roll is exactly the same as the deductions which had been
made consistently on earlier pay rolls, we would assume that all
of the intermediate deductions are the same, and bonds would be
issued accordingly. This sight take care of 75 to 90 per cent of
the load. This would leave the other bonds to be taken care of
under the present or modified procedure. This latter group would
contain a large member of cases where the bond deductions are only
$1.25 a month, on which the soldiers would not be entitled to
bonds matil a future date.
I informed General Leughry that the Treasury would give his
all the help that it could in the way of clearing any changes in
accounting procedure with the Comptroller General. Also, if they
would agree to some change in procedure, I would make available
for a reasonable time one or two of my best men who could serve
in - advisory espacity, directing or organising work, where
necessary, or in training new and inexperienced employees.
206
-3Incidentally, General Carter has assigned three men to
go through the Bond Issue Office for the purpose of determining
what steps might be taken to clear the situation up.
The other day, when I called at Colonel fillman's office,
I learned that arrangements had been made to return civilian ascounts to several of the areenals for the processing of bonds in
the field. Yesterday afternoon I learned that General Carter is
opposed to this movement on the grounds that 18 might delay the
current issuance of bends under the new decentralised program.
It is my hope that General Garter will not insist upon this in the
event the arsenal can assure the War Department that by taking
over the ensee prior to December 31, there will not result a
delay in the issuance of bonds.
3. F. BARTELY
EFBihbw 3/26/43
207
Copies to Beer Barlet
WAR DEPARTMENT
OFFICE OF THE UNDER SECRETARY
WASHINGTON.D.C
March 24, 1943.
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
Dear Henry:
I have looked into the situation on issuance of
War Bonds to people in the Army. There have been serious delays
in the delivery of bonds.
The plan was set up a year ago. Experience has
shown that the procedure was unduly complicated in a number of
ways. There were too many choices extended as to monthly subscriptions. Again, the plan was one of pay reservation rather
than of pay allotment, and the pay reservation idea required too
much work in the way of checking records.
The chief difficulty, however, has been in the
character of office personnel assigned to do the work. The War
Bond Division had to be built up at a time when the Civil Service
Commission was sending us employees of the lowest skills, people
utterly without experience or aptitude for office work. These
employees were unfitted to do good work, and the rate of absenteeism and rate of turnover were very high.
The volume of subscriptions has been heavy, with
3,250,000 subscriptions from soldiers, 850,000 subscriptions from
civilians employed by the War Department. This volume of subscriptions was more than the working force could handle with
promptness. Deliveries are now some five months in arrears.
Sometime ago the following remedial measures were
taken:
a. The existing plan for purchase by
military personnel was cancelled, to be effective
the end of March.
b. A new allotment plan was instituted,
to be effective April 1st, with the number of plans
limited and monthly deductions made for a full bond
or a part of a bond.
3/25/43
208
c. A new War Bond office was opened in
Chicago in February, to operate the new plan. The
office is in charge of an officer selected from
industry and specially commissioned for the purpose.
The office has now been organized and it is safe to
say that all bonds will be issued promptly.
d. The handling of subscriptions by civilian
personnel was decentralized to the as December
31, 1942, thus relieving the of all
responsibility for
Measures have clear
up the work of the old War Washington
with speed. The division as soon
as the present arrears are
e. subscriptions will also Bond cleared Washington be been Division after liquidated field up. taken that office in to date. of
Sincerely yours,
PLaPPott
Robert P. Patterson
Under Secretary of War.
RPP:er
209
O
UNITED STATES TREASURY WAR FINANCE COMITTEE
Bulletin
March 25, 1943
Presidents, Federal Reserve Banks:
We have arranged through the cooperation of the NBC and Mutual
radio networks, facilities for holding a nation-wide zero hour rally
of the workers for the Second War Loan.
The networks will provide for a closed circuit broadcast from
Washington on Saturday, April 10th from 1 to 1:15 PM Eastern War Time.
Closed circuit means that the broadcast will go out over the wires from
here into the studios of the networks but not on the air.
The plan is to have Secretary Morgenthau deliver an inspi-
rational talk to the workers who will be gathered in the radio studios
of the network cities.
This will need quite a job of organization in these cities. It
will be necessary for one of your local representatives to call on each
station in your district (list attached hereto), make sure the station
plans to receive the broadcast, and determine the number of people who
can be accomodated in the studio. He will then need to invite the
number of workers who can be accomodated, and arrange for them to be
there.
In some cases, where studio facilities are limited, it may be
possible for the radio station to arrange for the broadcast into the
ballroom of a hotel or some other large meeting place. All stations
have been advised to expect a call from your representative, It
would probably be helpful to the drive and important in our radio
relations if your representative were to invite the studio personnel to
listen to the broadcast.
This is obviously a program which must be organised through
your office, but we will be glad to be of any help we can.
Stuart Peabody
Head Advertising Specialist
Attachment (1)
ADV 5
210
MUTUAL BROADCASTING SYSTEM
AMERICA'S STATION OPERATED NETWORK
NEW YORK OFFICE: 1440 BROADWAY
CHICAGO OFFICE: TRIBUNE TOWER
All Programs Listed Current New York Time - WEEK BEGINNING SUNDAY April 4, 1943
Aberdeen, S. Dak
Aberdeen, Wash
Abilene, Texas
Akron, Ohio
Albany, Gá
Albany, N. Y.
Albany, Oregon
Albert Lea, Minn
Amarillo, Texas
Appleton, Wisc,
Ashland, Wisc.
Ashland-Huntington, W. Va.
KXRO
KRBC
Dalton, Ga
WBLJ
Danville, Va.
Decatur, Ala
WBTH
WJW
WALB
WABY
KWIL
Denver, Colo
Des Moines, Iowa
KATE Detroit-Windsor
KFDA
Devil's Lake, N. D.
Easton, Pa
Emporia, Karis
WRDO Eric, Pa,
Eugene, Ore
Austin, Texas
KNOW
KFHC
Eureka, Calif
Baltimore, ldd
Bangor, lie
WFBR
Everett, Wash
Big Spring, Texas
Binghamton, N. Y.
Birmingham, Ala
KBST
Fayetteville, N. C.
WNBF
Fergus Falls, Minn,
Fitchburg, Mass.
Fond du Lac, Wisc
Fort Dodge, Iowa
Cedar Rapids Iowa
Centralia-Chehalis, Mash,
Charlotte, N. C.
Chattanooga Tenn
Chicago, ni.
Chico, Calif
Cincinnati, Ohio
Clarksville, Tenn
Cleveland, Ohio
Columbia, S. C:
Columbus, Miss
Columbus, Ohio
ADV-5
KDLR
Duluth-Supérior, Ninn
KAST
Canton, Ohio
CKIN
WCMI
WATL
Buffalo, N. Y.
Burlington, N. C,
KSO
WATN
Astoria, Ore
Atlanta, Ga
Bismarck-Mandan, N. D.
Boston, Mass
Bowling Green, Ky
Bridgeport, New Haven, Conn.
KFEL
KDTH
E1 Centro, Cálif
Elmira, N. Y.
Bartlesville, Okla
WMSL
WDSM
WISE
Bakersfield, Calif
WRR
Dubuque Iowa
WHBY
Asheville, N. C.
Augusta, life
KRIS
Corpus Christi, Texas
Dallas, Texas
KABR
WLBZ
Fall River, Mass.
KITON
Fargo-Moorhead N.D.
SSN
KGCU
WNAC
WLBJ
WICC
WGR
WBBB
WHBC
WMT
KELA
WAYS
VDEF
WGN
KHSL
WKRC
WJZM
WHK-VICLE
Fort Lauderdale, Fla.
Fort Worth, Texas
Fresno, Calif
Gadsden, Ala
Gainesville, Fla
Goldsboro, N. C.
Grand Forks, N. D.
Grand Junction, Colo.
Grand Rapids, Mich,
Great Bend, Kans
Greeley, Colo.
Greenfield, Mass.
Greenville, N. C.
Greenville, S. C.
WCOS
Hagerstorm, Md.
WCBI
Harrisburg, Pa
VHKC
Hartford, Conn.
WEST
KXO
WENY
KTSW
WLEU
KORE
KIEL
KRKO
WSAR
KVOX
WFNC
KGDE
WEIM
KFIZ
KVFD
WFTL
KFJZ
KFRE
WJBY
WRUF
WGBR
KILO
KFXJ
WLAV
KVGB
KFKA
WHAI
WGTC
WMRC
WJEJ
WKBO
WTHT
211
2
Hazleton, Pa
Helena, Ark
Holyoke-Springfield, Mass
Hot Springs, Ark,
Houston, Texas
WAZL
KFFA
WHYN
Ogden-Salt Lake, Utah
Oklahoma City, Okla
Olympia, Wash
KLO
KOCY
KGY
KWFC
Omaha, Neb
KBON
KXYZ
Opelika, Ala
WJHO
WBHP
Paris, Texas
KPLT
WIBC
Pine Bluff, Ark
KOTH
Ironwood, Mich.
WJMS
Philadelphia, Pa,
WIP
Jackson, Tenn,
WTJS
Huntsville, Ala,
Indianapolis, Ind
Jacksonville, Fla
Jamestown, N. D.
Pittsfield, Mass
WJHP Pittsburgh, Pa
KSJB Port Arthur, Texas
Janesville, isc.
WCLO Portland, Ore
Jefferson City, Mo
KWOS
Jonesboro, Ark,
Joplin, Mo
Kansas City, Mo
KBTH
Klamath Falls, Ore
Knoxville Tenn,
Laconia, N. H.
La Grange, Ga
Lake Worth-Palm Beach, Fla
Lancaster, Pa
Lewiston-Auburn, Me
Lexington, Ky
Lincoln, Neb
WIBH
WHB
KFJI
WBIR
WLNH
WLAG
WWPG
Portsmouth, Ohio
Portsmouth, Va,
Poynette, Wisc
WBRK
WCAE
KPAC
KALE
WPAY
WSAP
WIBU
Providence, R. I.
Price, Utah
WEAN
Provo, Utah
Racine, Wisc,
KOVO
Raleigh, N.C.
Redding, Calif
WOAL Richmond Va
VICOU Roanoke, Va
WLAP Rochester, N.
KFOR Rockford, Ill
KEUB
WRJN
WRAL
KVCV
WRNL
WSLS
WSAY
WROK
Little Rock, Ark
KGHI
Rock Is, -Davenport-Moline, Ill.
Longview, Wash,
KWLK
Roseburg, Ore
KRNR
Rutland, Vt.
St. Louis, Mo
WSYB
Los Angeles, Calif
Louisville, Ky
Lowell-Lawrence, Mass
Lubbock, Texas
Lanchburg, Va.
KHJ
WGRC
WLLH
KFYO
WIVA
Macon, Ga,
WBML
Manchester, N. H.
WFEA
Marshfield, Ore
KOOS
Marysville, Cálif
KNYC
Memphis, Tenn
WHIPS
Merced, Calif
Midland Texas
Minneapolis-St. Paul, Minn
Minot, N. D.
Mobile, Ala
Monterey Calif
KYOS
KRLH
WLOL
KLPM
WMOB
KDON
Muscle Shoals, Ala
Nashville Tenn,
WLAY
New Bedford, Mass
New London, Conn
New Orleans, La
New York, N. Y,
WNBH
ADV-5
WSIX
St. Petersburg-Tampa, Fla
Salina, Kans.
Salisbury, lid
Salisbury, N. C.
San Angelo, Texas
San Antonio Texas
San Bernardino, Calif
San Diego, Calif
San Francisco, Calif
San Luis Obispo, Calif.
Santa Ana, Calif
Santa Barbara, Calif.
Scranton, Pa.
Seattle, Wash,
Selma, Ala,
Sheboygan, Wisc
Sherman, Texas
WNLC
Sioux City Iowa
WNOE
Spokane, Wash.
WOR
Springfield, Mo,
WHBF
KWK
WTSP
KSAL
WBOC
WSTP
KGKL
KABC
KFXM
KGB
KFRC
KVEC
KVOE
KDB
WARM
KOL
WHBB
WHBL
KRRV
KTRI
KFIO
KTTS
212
-3Steubenville, Ohio
Syracuse, N. Y.
Tacoma, Wash.
Temple, Texas
Texarkana, Texas
Toronto, Ont
Tulsa, Okla,
Valdosta Ga,
Vernon, Texas
WSTV
WAGE
WDAK
KFBI
Vilkes-Barre, Pa.
WBAX
KTEM
Willmar, Minn.
KWIM
KCLIC
Vilmington, Del
Wilson, N. C.
WILM
KOME
Winona, Minn.
KWNO
WGOV
Winston-Salem, N. C.
Wisconsin Rapids, Wisc.
Worcester, Mass
WFHR
KMO
CKCL
KVWC
Waco, Texas
MACO
Wallace, Idaho
Washington, D. C.
Waterbury Conn
KWAL
Wausau, Misc.
Weslaco, Texas
West Point, Ga,
Wichita, Kans
WOL
WATR
TSAU
KRGV
Yakima, Wash.
WGTM
WATR
WAAB
KIT
York, Pa,
WORK
Hilo, Hawaii
KHBC
Honolulu, Hawnii
Ketchikan, Alaska
KGMB
KGBU
The following frequency modulation stations regularly broadcast Nutual programs:
W71NY - New York City, N. Y. # W43B - Boston, Mass. W39B - Mt. Washington, N. H.
K45LA - Los Angeles, Calif. " W59C - Chicago, Ill.* W49PH - Philadelphia, Pa.
ADV 5
213
NBC AFFILIATED STATIONS
BASIC
BAS
BAS SUPP(AV B) BASIC SUPP(AVAIL BLUE)
AS SUPP(R)
MTN
MTN(AV B)
PACIFIC
PAC SUPP(AV B)
PACIFIC SUPP(AVAIL BLUE)
SC.
CIN CINNATI OUTLETS(AVAIL
SE
SOUTHCENTRAL
SOUTHEASTEAN
S MTN(AV B)
SOUTHMOUNTAIN(AV BLUE)
FLORIDA
SW
SOUTHEESTERN
MIDSOUTH(AVAIL BLUE)
SW. SUPP(AV B)
SPEC SER(AV B)
SOWESTERN (SUPP(AV BLUE)
SPECIAL SERVICE(AV BLUE)
BLUE)
MOUNTAIN
NORTH MOUNTAIN(AVAI BLUE)
CBF MONTREAL QUE
CBL TOHON TO ONT
CRM MONTREAL QUE
aix HAVANA CUBA
KANS WICHITA KANS
KARK LITTLE ROCK ARK
KDKA PITTSBURGH PENN
KYW PHILADELPHIA PENN
CAN
KGHL BILLINGS MON
CAN
SPEC SERV(AV B)
WAPO CHATTANOOGA TENN
SW
WAVE LOUISVILLE KY
BAS
WBAL BALTIMORE
WBAP FOLT WORTH TEX
BAS
SW
BAS
MTN(AV B)
MTN(AV B)
KGIR BUTTE MONT
KGIU SAFFORD ARIZ
KGNC AMARILLO TEX
PAC SUPP(AV B)
KGU HONOLULU T H
SPEC SERV(AV B)
KG PORTLAND ORE
PAC
KHQ SPOKANE WASH
PAC
KIDO BOISE IDA
KMED MEDFORD ORE
MTN(AV B)
PAC SUPP(AV B)
KMJ FRESNO CALIF
PAC
KOA DENVER COLO
KOAM PITTSBURGH KANS
KOB ALBUQUERQUE N 1.
MTN
SW
SW SUPP(AV B)
NTN (AV B)
KOMO SEATTLE WASH
PAC
KPFA HELENA MONT
N MTN (AV B)
KPO SAN FRANCISCO CALIF
PAC
KPRC HOUS TO TEX
SW
KREM BOZEMAN MONT
KRGV WESLACO TEX
KRIS CORPUS CHRISTI TEX
KROC ROCHESTER MINN
KSD ST LOUIS MO
KSEI POCATELLO IDA
KS00 SIOUX FALLS S D
KSTP ST PAUL MINN
KTAL PHOENIX ARIZ
MTN(AV B)
SW SUPP(AV B)
SW SUPP(AV B)
BAS SUPP(AV B)
BAS
N MTN(AV B)
BAS SUPP(AV B)
BAS
PAC SUPP(AV B)
KTBS SHREVEPORT LA
SW
KTFI TWIN FALLS IDA
N MTN (AV B)
S MTN(AV B)
PAC SUPP(AV B)
KTSM EL PASO TEX
KVOA TUCSON ARIZ
KVOO TULSA OKLA
KYSM MANKATO MINN
KYUM YUMA ARIZ
BAS
WALA MOBILE ALA
WAML LAUREL MISS
CAN
KDYL SALT LAKE CITY UTAH. MTN
BAS SUPP(AV B)
KELO SIOUX FALLS S D
BAS SUPP(AV B)
KFAM ST CLOUD MINN
PAC
KFI LOS ANGELES CALIF
NW(AV B)
KFYR BISMARCK N D.
BAS SUPP(AV B)
KGEX SPRINGFIELD MO
ADV-5
PAC
BASIC SUPP(RED)
CAN
MID S(AV B)
NORTHWESTER
CANADIAN
CINN OUT(AV B)
FLO
NV(AV B)
SW
BAS SUPP(AV B)
PAC SUPP(AV B)
SC
SC
SC
SW
WBEN BUFFAIO N Y
BAS
WBLK CLARKS BURG W VA
BAS SUPP(AV B)
BAS SUPP(AV B)
WBOW TERRE HAUTE INL
WBRC BIRMINGHAM ALA
WBRE WILKES BARRE PA
WBZ BOSTON MASS
WBZA SPRINGFIELD MASS
SC
BAS SUPP(AV B)
BAS
BAS
WOOA PENSACOLA FLA
SC
WCRS GLEENHOOD SC
SE
WCSH TLAND ME
BAS
WDAF KANSAS CITY MO
BAS
WDAY FARGO N D.
WDEL WIIMINGTON DEI
WEAF NEW YORK N Y
WEAU EAU CLAIRE WIS
WEBC SUPERIOR WIS
WEEU READING PA
WFAA DALLAS TEX
WFBC GREENVILLE S C
WFBG ALTOONA PA
WFEA MANCHESTER N H
WFLA TAMPA FL
WFOR HATTIESBURG MISS
WGAL LANCASTER PA
WGBF LVANSVILL IND
WGGV CHARLESTOP W V
WGL FORT WAYNE IND
WGY SCHENECTAIN N Y
WHIS BLUEFIELD F VA
WHIZ ZANESVILLE OHIO
WHLB VIRGINIA MINN
WHO DES MOINES IOWA
WIBA MADISON WISC
WIOD MIAMI FLA
WIRE INDIANAPOLIP IND
WIS COLUMBIA S C.
WISE ASHEVILLE N C
WJAC JOHNS TOWN PA
NE (AV )
BAS
BAS
BAS SUPP(AV B)
BAS SUPP(AV B)
BAS SUPP(R)
SW
SE
BAS SUPP(AV B)
BAS SUPP(R)
FLO
SC
BAS SUPP(AV B)
BAS SUPP(AV B)
BAS SUPP(AV B)
BAS SUPP (R)
BAS
BAS SUPP(AV B)
BAS SUPP(AV B)
BAS SUPP(A.V B)
BAS
BAS SUPP(AV B)
FLO
BAS
SE
SE
BAS SUPP(AV B)
214
-
BAS
EJAR PROVILENCE R I
TJXX JACKSONVILLE FL.
JLA JACKSON MISS
KBH LACROSSE WIS
KBO HARRISBURG PA
SKPT KINGSPOLT TENN
KEY OKLAHOMA CITY OKL
.L.C. LAKELAND FLus
BLE2 BANGOL NE
LOK LINA OHIO
L. CIN CINNATI OHIO
IMAQ CHICAGO ILL
MBG LICHMOND V.
MC MEMPHIS TENN
MFG HIBHING MINN
"MRF LEVISTOWN PA
MYA MARTINSVILLE VA
ZOAI SALL ANTONIO TEX
FOOD GRAND RAPIDS MICH
TOPI BRISTOL TENN V:
ORK YORK PENN
or OMAHA NEB
WPTF FALEIGH N C
WEAK ILLIN'SPORT P.
Who READING PRINT
WRC T..SHI GTON D C.
ERIO AUGUSTA ME
WHOL KNOXVILLE TENN
SAI CINCINNATI 0
FLO
SC
BAS SUPP(AV ) WTIC HARTFORD CONN
BAS SUPP(AV B) WTMA CHARLESTON S C.
WTMJ MILK.UKEE IS
SE
WWJ DETROIT LICH
SW
FLO
BAS SUPP(AV B)
BAS SUPP(R)
CINN OUT(AV H)
BAS
BAS SUPP (R)
SC
BAS SUPP(AV B)
BAS SUPP(A.V B)
SE
SW
BAS SUPP(AV B)
SE
BAS SUPP(AV H)
BAS
SE
BAS SUPP(A) B)
BAS SUPP(R)
BAS
BAS SUPP(AV B)
SC
CLAIM OUT(AV R)
SSAN ALLENTORN PENN
BAS SUPP(AV B)
SSAV SAVANNAH G4
SE
ISB ATLANTA Get
SFA NONTOOMELY ALA
NSJS WINSTON SALEM N C.
TSM NASHVILLE TENN
ASMB NE ORLEANS La
..SOC CHARLOTTE N C
SC
ASPD TOLE DO 0
K.B. HUTCHISON KANSAS
S.M. SAGIN.M MICH
ALV-5
WSYR SYRACUSE N Y
WTAM CLEVELAND 0
WTAR NORFOLK Va
SC
SE
MID 5 (AV B)
SC
SE
BAS
BAS
BAS
SE
B.S
SE
BAS
BAS
215
TREASURY DEPARTMENT
House
WASHINGTON
OFFICE OF
COMMISSIONER OF INTERNAL REVENUE
ADDRESS REPLY TO
ONER OF INTERNAL REVENUE
March 25, 1943.
AND REFER TO
Memorandum for the Secretary.
With my memorandum of March 17, 1943, I attached
tabulations prepared from 146 telegrams received from
various local unions of the American Federation of
Labor and the Congress of Industrial Organizations in
connection with a canvass of their membership in respect
to filing of income tax returns. The tabulations covered
all telegrams received to midnight, March 16.
Since that time, 24 additional telegrams have been
received, the last of which was received March 23. The
attached tables have been revised to include the original
146 telegrams previously reported to you, as well as the
24 additional telegrams subsequently received. The
additional telegrams have not materially changed the situation as compared with that reported to you in my memorandum
of March 17. There follows a summary of the revised tables.
PORDEFENSE
BUY
216
-2Number of workers canvassed
52,805
Number claiming exemption from filing
income tax returns
Number filing before midnight, March 15, 1943
Number with return forms available but not
14,440
35,947
filed at time of canvass
2,418
Commi scioner.
Cumulativo total of telegram
received through March 23. 1943
Telegrams with sufficiently definite data
Total
:
number of :Number of:Number of:workers : workers
filing
telegrams :telegrams:workers :exempt
:filing
before
:returns
midnight
March 15
:
Alabama
4
5
Arizona
4
4
Arkansas
1
1
California
Florida
5
3
Georgia
2,322
1,977
1,461
1,014
252
418
-
252
49
362
797
1,332
2,600
2
2
504
of workers
:suffi-
return
:data
before
midnight
March 15
:ciently
:definite
to file
filing a
of workers
exempt from
filing a
return
22
63
67
-
45
51
-
-
100
-
7
2
87
12
51
31
-
-
357
896
1
471
1
-
-
-
-
-
with a
return
but not
yet ready
return
:canvassed:from
:telegrams
:without
workers
:
States
Number of Percentage : Percentage
:Number of: Number of : Number of
2
2
Illinois
48
Indiana
14
Kansas
13
4,983
3,310
-
-
28
4,320
2,315
618
951
-
-
20
45
44
1
-
87
12
70
29
-
-
68
10
63
37
-
-
2
2
Kentucky
1
Louisiana
Maine
2,041
10,091
1
4
5
1,388
6,330
-
-
209
-
-
3,761
4414
-
-
1
1
1
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Mebraska
Nevada
1
1
4
2
1
7
2
2
12
15
12
3,496
1,400
520
2,851
1,100
300
101
575
2
2
255
204
2
2
39
125
6
468
-
6
690
125
495
1,345
3,627
64
772
47
725
-
3
-
-
80
15
79
21
81
18
10
53
72
27
94
-
Oklahoma
Ohio
2
Virginia
Total
1,017
336
-
-
-
-
-
-
-
99
1
2
75
25
-
-
1
1
3
618
-
-
2,272
2,649
482
2,933
3,267
8
11
-
-
-
-
2
-
-
-
-
-
179
5
8
77
16
81
19
-
-
-
-
Tennessee
197
3
1,353
3
5
13
Pennsylvania
Rhode Island
200
1
1
6
-
1
1
New Hampshire
New Jersey
New York
5
82
-
-
-
2
-
1,310
5,036
-
-
-
3
3
8
5
-
4,214
-
1,126
3,013
-
75
-
3
1
1
170
102
52,805
14,440
35,947
2,418
68
71
-
68
26
-
27
Table 2. - Distribution of telegrams with sufficiently definite data by size groups of workers canvassed
Cumulative total of telegrame received through March 23, 1943
Number
Size group
of workers
of telegrams
Number of
workers
canvassed
canvassed
workers ex-
Number of
workers
empt from
filing a
Number of
filing
a return
return by
midnight
March 15
Under 50
50 under 100
100 under 250
250 under 500
500 under 1,000
1,000 under 1,500
1,500 under 2,000
2,000 under 3,000
3,000 and over
Total
226
10
17
30
19
10
7
4
3
2
102
48
178
Number of
workers
with a re-
Percentage
of workers
filing a
turn but
not yet
midnight
ready to
March 15
file
-
return by
Percentage
of workers
exempt from
filing a
return
79
21
29
1,205
4,687
6,516
7,081
8,900
6,554
6,041
11,595
353
800
52
66
1,349
1,305
2,281
2,623
2,227
1,234
3,020
3,202
5,108
4,088
5,956
3,877
4,288
8,450
136
68
29
103
78
20
52,805
14,440
35,947
712
58
32
321
67
29
450
59
34
519
71
20
125
73
26
2,418
68
27
219
March 25, 1943.
Dear Mr. President:
I am enclosing herewith a suggested reply
to the letter of Senator Tunnell of Delaware,
dated March 17.
Sincerely,
(Signed) H. Mergenthan T.
Secretary of the Treasury.
The President,
The White House.
By Mess. Bundy 5:25 3/25/43
Photo file in Diary
File in Gaston's office
220
My dear Senator:
I wish to acknowledge your letter of March 17th
in which you repeat your recommendation of February
25th that Norman Collison of Bridgeville, Delaware,
be appointed Collector of Internal Revenue for that
District.
I thought you would like to know that I have
requested the Secretary of the Treasury to look
into this matter.
Sincerely yours,
Honorable James M. Tunnell,
United States Senate.
221
The Senator's previous request of
Fe - . 5th was turned down in a letter prepared
by Treasury for President's signature. Reason
given was that President would like to defer
consideration
until after the March 15th payment
date.
The attached letter for the President's
signature is just an interim acknowledgment.
Mr. . Gaston is handling the matter with Mr.
Ewing of Democratic Committee.
222
THE WHITE HOUSE
WASHINGTON
March 20, 1943.
MEMORANDUM FOR THE
SECRETARY OF THE TREASURY
FOR PREPARATION OF REPLY
FOR MY SIGNATURE.
F.D.R.
223
(COPY)
THE WHITE HOUSE
WASHINGTON
March 18, 1943
Memorandum for Miss Grace Tully
Herewith is transmitted to you for presentation to
the President a letter from Senator James Tunnell concerning the appointment of his candidate, Norman
Collison of Bridgeville, Delaware, to the position of
Internal Revenue Collector.
I shall be grateful if you will advise me after
the President has acknowledged this letter.
Sincerely yours,
(Signed) Gene
Eugene Casey
Special Executive Assistant
to the President
224
COPY
UNITED STATES SENATE
Committee on Foreign Relations
March 17, 1943.
Hon. Franklin D. Roosevelt
President of the United States
The White House
Washington, D.C.
Dear Mr. President:
I am again writing with reference to the position
of Internal Revenue Collector for the District of Delaware.
I wrote you on February 5th of this year about this matter,
and on February 18th you wrote me stating that you should
like to defer for a time consideration of any change in the
Delaware district because of the March 15th payment date.
I thought your suggestion was a wise one, but have noticed
that there are some Internal Revenue appointments being made
since the 15th of this month.
The present Collector, James H. Latchum, has held
the position for several years. He is a man of ability, and
my request is not connected with any allegation of dereliction
or incompetency. However, I believe that the appointment of
some one else is now desirable. I again suggest the name of
Norman Collison of Bridgeville, Delaware, who in my opinion
is in every way competent to perform the duties of the office.
Thanking you for any consideration you may give
to this matter, I remain
Very sincerely yours,
(Signed) James M. Tunnell
JAMES M. TUNNELL
JMT:F
225
March 25, 1943.
MEMORANDUM
TO:
Secretary Morgenthau
FROM: Mr. Gaston
Referring to the attached file of correspondence
with Prentiss Brown, the situation is this. Elmer
Irey, Frank Wilson, Dwight Avis and Mal Harney had a
conference on Monday of this week with representatives
of the O.P.A.
There are several difficulties to over-
come, including questions of: (1) authority to operate;
(2) funds; (3) inadequacy of punitive provisions of the
law; (4) machinery for getting quick action where
necessary. The plan is to hold further conferences and
I expect to be able to give you something more definite
the first of the week.
wr
Santa o I 226
OFFICE OF PRICE ADMINISTRATION
WASHINGTON, D.C.
MAR 22 1943
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
washington, D. C.
Dear Henry:
I wish to thank you for your letter of March 9
with respect to the use of the Treasury enforcement agencies
in connection with counterfeiting and theft of ration coupons
and in connection with gangster operations in the black
market. We appreciate immensely your very generous offer of
cooperation. I understand that Mr. Thomas Emerson, Chief of
our Enforcement Division, has already been in touch with your
people regarding the details.
Sincerely yours,
Administrator
FOR VICTORY
BUY
WAR
WAR
BONDS
STAMPS
FROM:
TO:
MR. SCHWARZ'S OFFICE
The Secretary
Bert Andrews, chief of the
New York Herald-Tribune bureau
here, just called to ask about
a "hot" rumor from New York that
you planned to resign and would
be succeeded by George Harrison.
He said he thought the tip had
come out of Wall Street. I
reassured him and reminded him
that Nick Gregory of his staff
had asked the same question
a few weeks
ago. @ 3/15 -5.05pm
228
MAR 25 1943
My dear Mr. Stricker:
I have received your letter of March 18
and thank you for sending me copies of your
correspondence with the editors of Time Maga-
zine on the subject of the article printed in
their issue of January 25. I appreciate greatly
not only your generous action in coming so
vigorously to my defense with respect to an
article that I also thought somewhat unfair
but more especially your fine loyalty to our
President and his Administration in the time
of such great difficulty.
With the freedom that our Press enjoys
there are bound to be instances of prejudice
or partisanship that can only be effectively
restrained by a critical attitude on the part
of readers who are willing to form their own
judgments. I think well-reasoned remonstrances
have their effect even though it may not be
immediately apparent.
At any rate, I am highly grateful for what
you have done in my behalf.
Sincerely yours,
(Signed) H. Mergenthan. Tv
Secretary of the Treasury.
Mr. Sidney G. Stricker,
Ridge Road, Amberley village,
R.R. 6, Box 31-A,
Cincinnati, Ohio.
HEG:pm
Mrs
SIDNEY G. STRICKER
RIDGE ROAD, AMBERLEY VILLAGE
V
R.R. 6 BOX 31 A CINCINNATI, OHIO
March 18, 1943.
Honorable Henry Morgenthau,
Secretary of the Treasury,
Washington, D.C.
Dear Mr. Morgenthau:
In the classic lines of Chaucer:
"The earth trembled, the mountain shook,
And 101 there came forth a mouse."
Time finally replied to my letter of February 2nd. I
enclose copy of letter dated March 8th, received last
week, to which I am replying, as per copy attached.
While not a complete retraction, you will notice they
say the Article "gives understanding credit to Henry
Morgenthau's strong qualities: bravery, loyalty,
honesty, highmindedness, and sincerity", which is
quite a backdown from the scurrilous and gratuitously
insulting Article they featured in their issue of
Time of January 25th.
It is, perhaps, too much to expect of Time, but I have
asked them in my reply to make public apology to you
and the President in their column, for the contemptible Article they published in Time on January 25th.
My statement that the Article is "not privileged and
constitutes a willful and malicious libel" may give
them something to think about.
I am not suggesting that you bring suit against them
for libel, and was very careful to say I had no
authority to speak for you, and never met or spoke
to you in my life. But my experience with newspapers
is that they are very sensitive on the subject of libel.
You will recall that Theodore Roosevelt, after he was
President, if my recollection serves me correctly -
229
230
page 2.
Honorable Henry Morgenthau,
3/18/43.
brought a suit for libel against one of the leading
Chicago newspapers, that referred to him as a
"drunkard". When the case was reached for trial,
Roosevelt went to Chicago to appear in court to
testify in his own behalf. The newspaper backed
down, printed a public apology, paid the costs of
the suit, and by consent the case was dismissed.
There are no end of cases in the books and precedents where editorial and news publications of men
high in public office were held not to be privileged.
If Time consults their counsel they may pull in
their horns or at least think twice before they
take advantage of their columns to satisfy their
partisan spleen and prejudice.
Sincerely yours,
Sidney G. thricker
Sidney G. Stricker
subscriber
231
March 18, 1943.
Time Magnatine,
Time & Life Bldg.,
Rocksfeller Center.
Miterial Offices,
New York, N.Y.
Centlement
This is to asknowledge receipt of year letter of
March 5th, in reply to my letter of February 2nd.
I ass not your Article, OF "yespert"
as you call 19, in regard to Secretary Mergenthon,
published is Time of January 55m. I have real 11
again. in the light of your letter of March 5th,
which only confirms my original conclusion. The
Article was a willful and solicious libel. published
for the purpose of discrediting Secretary Morgenthen
and destroying public confidence in his Administra
tion.
Your reference to his laged and distinguished father,
former Mainsenter to Tarkey, appointed by Weedses
Wilson, who served se croditably during the World War,
as a . "distinguished Jewish lawyer and philasthropist,
who made a fortune in Breas real estate", had but one
objects to all public attention to the fact that
Secretary Morgoathes 10 of Jewish origin - intended
to stir up race hatsed and prejuitee against his
Ministration.
Your statement that,
"Young Beasy was restless in school, never took
a seller degree, had a few unhappy tries at
finiing a casess."
*Then at m. he bought a $55,000 farm in New
Total's Dechase County. Balf the money was put
w by Md father, the other half was his own.
from a 9900 Brone let his father gave him
years before."
232
page 2.
Time Magasine,
3/18/43.
"Gentleman Farmer Morgenthau unde a & of his
property, from the start. He also not am-
ether gentleme farmer who dwelt only 25 miles
assay - Franklin Roosevelt."
"He went to Albany, with Governor Receevelt (as
a farm official) to Washington with President
Receevelt," etc.
The picture you painted was of a man born and reared
in ebscurity, suddenly lifted to a position of great
national responsibility, utterly incompetent, untrained,
with little OF no education, who had made a failure of
his early until he became a "Centlessa Farmer'
and not another "gentleman farmer who lived 25 miles
away - Franklin Reesevelt". The same mm. if you
please, who you say, in your letter of March 8th, has:
"Strong qualities: bravery, loyalty, honesty,
highwindedness, and sincerity."
(Italics mine).
I have no authority to speak for Secretary Morgenthau,
in fact, never not or spoke to him in my life. But
there are same limitations to the right of free speech
and liberty and freedom of the press, which even Time
10 bound to respect.
When under the guise of constructive criticism, you
indulge in false statements. willful and melicious
ridicule, bitter partisan projudice, and descend to
race Instrud, your publication is no longer privileged,
and affords no protection against liability, legal and
moral, for willful and sulicious libel. Your counsel.
I think. will tell you, this is the law.
If. as you say. "Times founders stated in their
original prospectus 'its not founded to premigate
projudious. liberal or conservative'". you have
drifted afar from the prespectus of your founders in
the Article you published about Secretary Morgenthan,
to say nothing of the carisature on the cover page.
Men, high in office and public office. are tee fre-
questly made the target for personal abuse by scandal
mangora and as unbridled and irresponsible press.
I have no desire to influence or orntrol editorial
233
page 3.
Time Magasine
3/18/43
policy of Time. The public in due time will put
its own appraisement on the value and fairness of
your editorial comments, if they have not already
done so.
If you did your plain duty, you would publicly
apologise in your columns for the melicious, false
and gratuitously insulting attack on Secretary
Morgenthan and President who have the
hardest warting jobs in our history. They are doing
their best to win thoms, and in my opinion and all
fairminded persons not blinded by partisan projudies,
are doing a good job of it. They are entitled to
encouragement and support, free from petty bickering
and backbiting. vicious parties and race projudice
which, unfortunately, your columns frequently reflect.
You owe this to the soldiers overseas and at home, the
men and women of America and our Allies, who are
sacrificing their lives and all they possess, is order
that free people and civilization may survive.
Sincerely,
Sidney G. Stricker
234
Sidney G.Stricker
March 18, 1943.
Hon. Stephen Early.
Secretary to the President,
White House,
washington, D.C.
Dear Mr. Early:
Time Magnaine finally replied to my letter of
February 2nd, in regard to the Article featured
in their issue of January 25th about Secretary
Morgentham.
I enclose herewith copy of their letter dated
March 8th, to which I am replying as per copy
attached.
Although their letter is not a complete retraction.
credit" qualities:
11 that they give understanding
bravery. honesty,
sincerity".
I know has far more
questions to about than vaporingo of Time If you think subject
is gratifying the to loyalty, President Heary (Italies Magnation. worry Morganthen's mine). highmindedness, "strong the partisan important the and
worthythe President's attention. OF will interest
him, you are at liberty to bring this to his attention.
Sincerely yours,
Stiney G. Stricker.
235
Note:
The president will resall that I was the Democratic
candidate for Congress in the First District of
Ohio, who made the mas against Longoorth is 1918:
and again in 1922. Longoorth was elected both
times, with the aid of the Republican Bone Gox
Machine. although I assessed in outling down Longworth's normal majority of 30,000 to 6,000 in 1918.
The President will also receil, I had charge of the
Campaign in Ohio for Report of the Fighteenth Amount-
mont.4t the Constitutional Convention I introduced
the Resolution for Repeal, which furnished the
necessary three-fearth majority of the States that
put ever Repeal.
After fifty years of active practice of law, I TOtired neveral years age and as new enjoying the
laxury of being a Country Centlemen and am out of
politics, but - Democratic instincts were aroused
by the countly and insulting article that appeared
is Time against Secretary Morgenthau which, in
reality, we a threet against the Administration,
which was my only interest in the matter.
Sidney 0. Stricker.
COPY
M
Time & Life Building,
Rockefeller Center
E
T
New York
The Weekly Newsmagazine
Editorial Offices
8 March 1943
Dear Mr. Stricker:
No. TIME has no prejudice against this
Administration, nor any other. As TIME's founders
stated in the original prospectus for the Newsmagazine,
it "its not founded to promulgate prejudices, liberal
or conservative." But this does not mean that an Administration's fiscal policy may not be open to criticism;
nd, surely, any informative study of the Secretary of
the Treasury and the enormous job ahead of him must take
into account the strengths nd weaknesses he brings to
the task.
There are some things that Morgenthau definitely
is not. But I hope that you will glance again at TIME's
report, for I think you will find that it gives under-
standing credit to Henry Morgenthau's strong qualities:
bravery, loyalty, honesty, highmindedness, and sincerity.
Sincerely yours,
Janet Morison (signed)
Janet Morison
For the Editors
Mr. Sidney G. Stricker
Ridge Road, Amberley Village
R.R.6, Box 31 A
Cincinnati, Ohio
10:4:cr
236
237
March 25,
1943
Herbert Gaston
Secretary Morgenthau
materials
In regard to the individual who is in Shepherd Pratt
Cochman
Hospital at Towson, Maryland, I wish you would make some
arrangement with her doctor there that we be notified at
least a week in advance of her being considered to be
allowed out of that hospital. Let me know whether this
can be done. Thank you. See memo from Gaston
3/25/43
238v
March 25, 1943
My dear Cordell:
pated 3/24/13
Sir Frederick Phillips handed me the
enclosed memorandum yesterday afternoon.
Herbert Feis was present.
I would like to come over and discuss
this with you the first thing Friday morning
if that is convenient for you. The President
is going to discuss it with you and me after
Cabinet on Friday.
Sincerely yours,
(Signed) Henry
Honorable Cordell Hull,
Secretary of State,
Washington, D.C.
Sent by SSIgnt 11:30A.M.
0 unstain envelop addressed
to John F. I to any to Hall
Room 212, Stat Dept.
239
March 25, 1943
Dear Grace:
I am sending herewith a copy of the memoran-
dum handed to me by Sir Frederick Phillips-yesterday. This is the memorandum that I would
like to discuss with the President and Secretary
Hull after Cabinet.
Sincerely yours,
(Signed) Henry
Miss Grace Tully,
Secretary to the President,
The White House,
Washington, D.C.
Sent by
3/25/13- 12:45
P.M
-
reduted 3/04/19
for
240
the
Mobilist
MAR 25 1943
Secretary Morgenthau
Randolph Paul
In August, 1942, and again in September, 1942,
I raised with you the request of the American Embassy in
Panama that two competent investigators be sent to Panama
to assist in investigating commercial and financial
activity on behalf of the enemy, particularly in the
diamond trade, in foreign exchange transactions, and in
the activities of international holding companies
cloaked under Panamanian names.
You were willing that Foreign Funds Control
furnish the necessary investigators, but felt that the
State
Department should get diplomatic status for these
men.
State has persisted in its attitude that it is
unwilling that such personnel be given diplomatic status
or diplomatic passports.
The State Department now has again raised this
matter with the Treasury. Since we have acquiesced in
Treasury men going to North Africa without getting
diplomatic passports, ve would seem to have little if any
ground for continuing to insist on diplomatic status or
passports for investigators going to Panama. Accordingly,
I recommend that we advise State that under the
circumstances we are willing to furnish investigators,
if still needed, even if diplomatic status or passports
cannot be obtained.
(Initialed) R.B.P.
JWPehle:cwh 3-23-43
241
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
Secretary Morgenthau
TO
FROM
March 25, 1943
Frances McCathran
CONTROVERSIAL ISSUES BEFORE CONGRESS
1. Salary Limitation - After a joint Senate-House conference
committee agreed to accept the Senate version of the salary
limitation rider to the Debt Limit Bill, the House voted
its acceptance yesterday and sent the conference report
back to the Senate, which is expected to act on it today
and send the measure to the White House.
2. Tax Legislation - The first phase of the "Battle of Taxes"
begins today as the House opens debate on at least two
major tax plans: (1) the House Ways and Means Committee
version; and (2) the Ruml Plan as embodied in a proposal
by Representative Carlson. It is also said that a compromise plan originally suggested by Representative Robertson
may turn the battle into a three-sided struggle. The supporters of all three plans claim to have lined up enough
votes to pass their respective measures, but House Majority
Leader Ramspeck predicted that the House would draft a bill
of its own, containing a partial forgiveness feature. Preliminary verbal skirmishes between Congressmen, both on the
floor of the House and outside, indicate that the discussion
today will be bitter and heated. Calling it "that sweet-
scented tax-gypping proposal of Banker Ruml, Representative
Gearhart said yesterday that to date no Congressman had been
willing to sponsor the Ruml Plan in its entirety although,
he added, Representative Carlson had come closer to it than
anyone else. Carlson, however, cited figures of the number
of Americans borrowing to pay their income taxes as an
example of what he said was the necessity of putting the
nation on a current tax basis.
3. Farm Parity - The House passed yesterday the Steagall Bill
prohibiting the deduction of subsidy, conservation, or any
other benefit payments in determining the parity price on
agricultural commodities. The legislation now goes back
to the Senate which has passed a similar measure introduced
by Senator Bankhead. The Senate also expects to consider
242
today another measure which is said to threaten the whole
Administration anti-inflation program, the Pace Bill, which
provides that the cost of all farm labor be included in
agricultural price ceilings.
4.
Civilian Supply - The Senate Banking and Currency Committee
yesterday heard Joseph L. Weiner, Director of the Office of
Civilian Supply, urge their approval of the Maloney Bill to
set uo an independent civilian supply administration under
the technical supervision of the Director of Economic
Stabilization. Weiner warned that failure to protect civilian
needs and failure to maintain the home front, might result
in loss of the war.
5. Post-War Planning - The Senate Foreign Affairs Committee,
which is now considering the Ball-Hatch-Burton-Hill Allied
Council Resolution, yesterday voted unanimously to have
Chairman Connally appoint and head a subcommittee to study
all proposals relating to post-war settlements and cooperation
between the United Nations.
also
2
28
3
30
COPY NO
NOT TO BE RE-TRANSMI ED
BRITISH MOST SECRET
U.S. SECRET
945
OPTEL NO.98
TUNISIA. 8th Army. During night 22nd/23rd onemy continued
his counter-attacks on our bridgehend in ZARAT area held by 50th Division and
by first light had regained most of ground which he had previous lost.
OPTEL NO.99
Information received up to 7 a.m. 25th March, 1943.
1. NAVAL.
One of H.M. Gunboats bonbarded GABES on 22nd in support of
8th Army operations. H.M. Submarine has sunk 2 heavily laden ships off EAST
CALABRIA. The 19,000 ton Merchant Ship mentioned it Optol No.95 has sunk.
Casualties bolieved very fow.
2. MILITARY.
TUNISIA. 7th Army. 23rd. Fighting continued during afternoon
both on right flank and south-west of EL HAMMA. By nightfrll our positions in
general remained unaltered. 50th Division word havily shalled all day. Lato
in morning an attempt of onemy to cross an anti-tank ditch 3 tiles south-oast
of ZARAT was checked by our Artillery, and in early afternoon a second attack
in same locality by unony infentry and tanks vas again repulled by accurato
shollfire. 51st Division hoevily sholled during the day. Non Zonland Corps
destroyed fifteen abandoned anomy guns.
23rd/24th. Regrouping of our forces took place in MARETHZARAT sector.
50th Division withdrawn eapt of WADI ZIGZAOU.
United States Soctor. 23rd. United States armoured patrols
were activo east of MAKNASSY. United States Infantry positions eleven miles
east of EL GUETTAR wore attacked by two ancay infantry battalions sup orted by
about 40 tanks. Attempted advance eastwards by Fr nch troops about DOVEN
milon south of MDILLA met strong onomy resistance. 24th. Light attack by onomy
infantry with artillery support at 6.30 a.m. in aron immodiately south of
GAFSA-GABES road wea ropulsed.
3. AIR OPERATIONS.
WESTERN FRONT 24th. Fourteen enemy circraft divo-bombad
ASHFORD where southorn ruilway works word hit and 43 persons reported killed
and throu missing. Enomy consultion 2, nil, 1. Ours - 2 lost, one pilot safe.
One Mosserschnidt 210 INS also destroyed off the ORKNEYS 24th/25th. About 25
anomy aircraft crossed the north-onst const and did some scattered bombing ovor
TYNESIDE and thon scattered ovor a wide area comprising chiefly south-enstorn
and western Scotland. Enery casualties 4, nil, 1.
TUNISIA. 23nd/23rd. 98 tona of bomba word dropped on onomy
concentrations noor KATENA. Several fires were started among mechanical
transport and a bridge W.S hit. 28 tons were dropped at SFAX. 23rd. 555
offonsive sorties word flown in the MARETH GABES aren. Accurate bombing was
carried out against enomy positions, n large number of fires wore started among
mechanical transport and ,several guns were siloncod. About 46 tons of bombs
were released. at BIZERTA.
McDITERRANEAN. 23rd/24th. A Beaufort torpedood an east-bound
escorted 5000 ton ship off TRAPANI.
RUSSIA. 23rd. Russian aircraft continued their raids on ports
in the TAMAN and KERCH PENTASULAS and attacked Gorman troops in the KUBAI.
244
March 26, 1943
9:02 a.m.
HMJr:
Hello.
Operator:
Congressman Doughton.
HMJr:
Hello.
Cong.
Doughton:
Oh, yes, Henry.
HMJr:
Bob, I called up to congratulate you. God,
you re some scrapper.
D:
Why, I thank you. Think it's all right?
HMJr:
Oh, it was wonderful.
D:
Thank you very much. That's very sweet and
gracious of you to say that.
HMJr:
No punches pulled, and - and you certainly
let them have it. It was a wonderful show you
put on yesterday.
D:
Well, I thank you. I put it on under rather
adverse and difficult circumstance. Didn't
have time to get my speech prepared like I'd
like.
D:
I know, but
But the boys were mighty - very gracious about
it. The Republicans have been more complimentary, if possible, than the Democrats.
HMJr:
Well, I heard that both Democrats and Republi-
HMJr:
cans applauded you when you got through.
D:
Yeah, they gave me an ovation, a most unparal-
leled and unusual ovation on both sides. But
they've come round, a good many of them.
HMJr:
Well
D:
Old Man - Old Man Treadway said - he said,
"You certainly 'dood' a wonderful good job
for your side." (Laughs)
245
-2HMJr:
D:
Yes. Well, I - I was - I was thrilled when
I read about it in the papers.
Yeah, well, if you have time you might - along
between naps you might - hard work you might
read my speech in the record.
HMJr:
I'll do that.
D:
Yes.
HMJr:
I'll surely do that.
D:
Well, I think we got - had a fine day yesterday.
HMJr:
Well, I - I - I just - I couldn't let the day
D:
go by without calling you.
Well, I thank you, and I appreciate it and I
appreciated the statement you gave out - I told I ought to have called you.
HMJr:
Yes
D:
But I told Paul to tell you how much I appreci-
HMJr:
Well, the newspaper boys asked me again yester-
D:
Well, I thank you, and I appreciate that. We're
ate it.
day, "Where do you stand?" and I said, "I stand
four-square right behind Mr. Doughton."
going to whip the Ruml plan.
HMJr:
Good for you.
D:
Yeah, we're going to do it. Well, thank you.
HMJr:
Okay, Bob.
D:
Your staff has worked wonderfully this time.
HMJr:
Good.
D:
As I said yesterday in my opening remarks -you've seen my speech
246
-3HMJr:
D:
Yeah.
they hadn't tried to write the bill.
They've been helpful. "
HMJr:
Right.
D:
Well, thank you very much. I want you to
read the opening remarks of my speech, what
it said about your staff.
HMJr:
I'll - I'll - I'll get it right away.
D:
Thank you, Henry. Goodbye.
247
March 26, 1943
10:15 a.m.
FRENCH FRANC RATE; EDEN'S VISIT;
STATE-TREASURY AUTHORITY OVER FISCAL
MATTERS; AND GOVERNOR LEHMAN'S STATUS.
Present: Mr. White
Mrs. Klotz
H.M.JR: I called on Secretary of State Hull. He
had Mr. Jimmy Dunn present, and Mr. Collado. According
to Mr. Hull, it seems that he has turned over to Jimmy
Dunn the fifteen or twenty things which he said Eden
left undone, for Dunn to try to work out with Eden.
Amongst these was this question of the rate with
the Free French. During the conversation it turned out
8.259
that there was a cable that the President sent on February
7 through the State Department to Churchill, although I
had asked Mr. Hull that very question and he said that he
would find out about it. He never let me know. But it
turned out that they looked at the cable and found out
that Feis had never seen it.
MR. WHITE: Feis did call me up in response to your
telephone call, and informed me that there was no cable.
I asked him again if he was sure and if he would know if
there was one. He said that he thought he would.
H.M.JR: Jimmy Dunn knew about it, but Feis evidently
didn't. They protected him. They were saying his initials
weren't on it. I have asked for a copy of it.
Hull said there are lots of things that go on that
he doesn't know about. So I made the point that if things
transpired, either from the President or through the
Secretary of State, with any country having to do with
financial affairs I would like to be kept informed. Hull
said that half the time he didn't know and that these were
things for the President. I still said, "If they are
financial I would like to know about it." And after repeating
248
-2it two or three times Hull finally gave instructions that
I should be advised.
The question came up of how to handle this memorandum
of March 24 from Sir Frederick Phillips, and they all
agreed that they should go ahead and hold this meeting in
Africa between the DeGaullists and General Giraud, and
they suggested that it be worked out there. Then I said
that Feis made a very good suggestion that if they do work
it out we will impress upon them that it can be worked out
at the rate of two hundred francs to the dollar, which they
all agreed to.
Then Hull said to Jimmy Dunn, "We will inform Eden
that this is going to be done."
So I said, "Wait a minute, this was delivered to me
by Sir Frederick Phillips," and I said, "The little prestige
that the Treasury has got left - in these matters I think
we should answer him.
Dumagain said, "Yes, that is right;" and Hull said
nothing. Then he again said to Dunn, "Now you inform
Eden about it."
I said, "Now wait a minute, this is 8 financial
matter. It has been delivered to me and I think I should
answer it.
Dunn said, "That is absolutely the way it should be
done."
Hull said, "Well, all right, but you al so tell Eden."
Then somebody said, "Would you have a cable drafted
to Robert Murphy so that we could keep him advised as to
what would be done." I said that I would ask White to
draft such a cable, so that after we saw the President and
agreed that this was the way this should be handled Murphy
could be advised, if you would have the cable ready.
Then Hull went on about how difficult times were and
how he had to take it as though from a trip hammer, how
249
-3-
he had been criticized first on the Japanese, then on
the Spanish and Africa, and in every case he had been
proven to be wholly right in the position he had taken.
I didn't answer him.
MR. WHITE: I think that is correct with the exception of the word "right". In every case events have
proven him to be wholly wrong.
H.M.JR: Should I have said that to him?
MR. WHITE: No, no. I just didn't want to let the
record go uncommented on.
H.M.JR: All right.
MR. WHITE: Did you want a memo to take to the
President or will it be in the form of a cable?
H.M.JR: Just oral.
MR. WHITE: I am glad you spoke that way because
they are unquestionably whittling away our authority
gradually.
I have a letter I just received from Feis in which
he says they are setting up an interdepartmental economic
committee on China to discuss economic, financial, and
is
monetary problems. Feis is doing it himself. He
inviting me to attend. I mean that--
H.M.JR: Well, I have found this; when you go and
face Hull, he can't take it. He doesn't take it, you
see. I knew just what I was doing, and the funny thing
is, a fellow like Jimmy Dunn completely sided with me
in front of Hull.
MR. WHITE: well, until a year or so ago, there
never was any question as to who should take the leadership on financial and monetary and economic questions.
This is a development of the last few months.
250
-4-
H.M.JR: Harry, I am partly - it is partly my fault.
MR. WHITE: I think so.
H.M.JR: I know it is.
(The Secretary held a telephone conversation with
Admiral Brown of the White House, as follows:)
251
March 26, 1943
10:24 a.m.
HMJr:
Operator:
HMJr:
Admiral
Brown:
HMJr:
Hello.
Admiral Brown.
Hello.
Good morning, Mr. Secretary.
Admiral, I thought you'd like to know that I
have located that cable.
B:
oh, have you?
HMJr:
It was February 7.
B:
February 7.
HMJr:
And it was sent by Mr. Hull to Mr. Churchill
at the request of the President.
B:
oh. Thank you very much.
HMJr:
I just was over to see Mr. Hull, and they re-
B:
Oh.
HMJr:
B:
HMJr:
B:
ferred to some cable and I said, "What cable?"
And he sent Jimmy Dunn out to get it
and they're going to let me have a para-
phrase of it.
I see.
But if you want your files complete, that's
where it is.
Thank you very much. I - I - we suspected -
well, we felt that that was the only possible
remaining clue
HMJr:
B:
HMJr:
Yeah.
but we didn't pursue it. here.
No. And, you see, I called up Mr. Hull Saturday a week ago and asked him, and he said, no,
there was no such cable.
252
-2-
on - oh, I see, I see.
B:
HMJr:
But this morning Dunn referred to a cable, and I
said, "Well, I'd like to see it," " and he went and
got it.
Oh, yes. Well, I'm going to see the President in
a few minutes and I'll tell him that. I know
he'll be interested.
B:
HMJr:
Well
B:
And - because he had lost track of how it had gone.
HMJr:
B:
That's it, and if - if you want a copy so - for
your files, you know how to get it.
Yes, sir. Yes, sir. Thank you very much, and may
I
HMJr:
B:
HMJr:
B:
I'm sorry to have bothered you, but I....
No, I'm glad to have it brought up.
But I knew there must have been someone somewhere
because they - Churchill couldn't have been referring to something unless it existed.
Yes. May I tell the President about how you made
out with your discussions with Halifax?
HMJr:
Well
B:
Or have you already done that?
HMJr:
No, he - Hull and I are seeing the President after
B:
Oh, I see, I see.
HMJr:
On that.
B:
Oh, yes. Yes
HMJr:
And
B:
Cabinet on that.
Thank you, Mr. Secretary. I'11 - I'll - I think
I will try to get a copy for our files.
253
-3HMJr:
Righto.
B:
Thank you. Goodbye.
HMJr:
Goodbye.
=
254
-5-
H.M.JR: Harry, after all, from the first of January
until the first of - whenever I came back, about two
months - I was ill - and then I had to get this war Bond
thing going, and during that time, until I had the new
organization going, that was my job. And then I had
to get myself straight with Congress on the tax bill,
and not being too immodest, I got myself in beautiful
shape vis-a-vis Mr. Doughton. I got myself straightened
out on my "ar bond drive. The thing is going to go.
And now for the first time I can get my breath and help
you.
MR. WHITE: I am glad you are going to pick up the
strings. You are the only one strong enough to defend
our position. I can follow you; I can follow instruc-
ti ons. But unless you take the initiative in making
certain that they don't take anything away from us, we
are licked because nobody else in the Treasury can do it.
H.M.JR: Harry, I know that, and what I do in my
own mind - I plan my work as best I can.
Now, just to go over a little history, if you don't
keep on top of it - look what just happened to Claude
Wickard.
MR. WHITE: Sure, exactly - it is not similar, because he isn't doing a good job on his own.
H.M.JR: But supposing I didn't get this job
straightened out; supposing I didn't get-MR. WHITE: First things first, of course.
H.M.JR: That is right. And we haven't lost so
much ground opposite the State Department that we can't
pick It up.
MR. WHITE: Of course not.
H.M.JR: Because there is a divided house.
255
-6MR. WHITE: The chief thing is that first, you
should recognize what is happening. I am glad you do.
And secondly, that you pick up the strings. We haven't
gone too far. But I think the important thing is to
know what I have said before, that unless you protect
us in the larger way, they are too strong for us. No
one else can defend our position.
H.M.JR: I am perfectly conscious of it, and I
also realize we were slipping, but it is a question of
where it would do us the least damage.
MR. WHITE: It is not too late, in any sense.
H.M.JR: I don't think it is. I demonstrated it
this morning, just with a wave of the hand. Hull said,
"Jimmy, you tell Anthony Eden," and I said, "No, no."
I know I am repeating myself. The interesting thing
is that Jimmy, in front of his boss, should say, "Mr.
Morgenthau, you are right."
MR. WHITE: It is only a few there, but they are a
very important few, who are pursuing a definite policy.
I don't think it includes Welles.
H.M.JR: I don't understand what you mean.
MR. WHITE: I mean, there is apparently a definite
policy to assume control over all matters pertaining to
foreign Governments whether they are fiscal, monetary,
foreign exchange, or political. That is a new develop-
ment.
You see, formerly, many times Hull has said - many
times the others have said - "Well, in the matter of foreign
exchange or loans, that is Treasury business." I have
heard them say it, and I have heard you repeat it.
H.M.JR: Often.
256
-7-
MR. WHITE: It is changed now. The idea now is that
anything that affects a foreign country is State Department
business, whether it is agriculture, economics, foreign
policy, or anything, and that is the tactics they are
adopting on North Africa, of course. They have taken the
jump from the fact that they have defeated Wallace in
that issue and that that would apply to every country.
That lead Feis, for example, to announce at 8 meeting
which we had here of several departments, BEW, LendLease, State, and Treasury, when we were discussing
exchange rates of France and Holland to state very clearly
and definitely, and go out of his way to do so, to make
it clear that such matters were under the jurisdiction of
Hull.
H.M.JR: I asked Hull what Anthony Eden was doing
over here. He said, "He has come over here to find out
just as much as he can about everything. He is interested
in how Germany should be divided up after the war; he is
interested in what our attitude should be toward the
German colonies - should we supervise them from the outside
or from the inside. He is interested in this, that after
the war Russia should not pull back into its shell.
He said, "He is interested in all those kind of things
and he is over here to find out just as much as he can,
and I think he was telling me the facts. So much for that.
If
While we are on the State Department - at a meeting
two or three weeks ago - this is also very confidential -
Governor Lehman was talking about going to Europe, and I
strongly advised him not to go to Europe, although he was
crazy to go,until he got himself straightened out vis-a-vis
the President. Well, he was crazy to go. I said, "No,
you will make a great mistake. You should not go until you
have the thing.
He said - he asked me what to do.
I said, "Hull is away. why don't you try to see
Welles?"
257
-8He said, "I have never seen Welles. Welles doesn't
know anything about this thing. "
So I said, "That is all the more reason to see Welles."
He asked to see Welles four or five days, and Welles
wouldn't see him. He couldn't even get an appointment.
Then he called me up again - Lehman did - and he said,
"He hasn't seen me. What do you think about what you
said first, to do that and then write the President a
letter?"
I said I would go ahead and send him this letter,
which he did; and as a result of that the President didn't
sign the Executive order which had been lying, according
to Lehman, on Harold Smith's desk for three months; but
he did write him a letter which Governor Lehman said he
would send me. If he hasn't sent it to me, ask Schwarz
for it. It has been given out to the press. I would like
to see it.
Then Lehman called me up two nights ago and said
three times, "I can't begin to thank you for your advice.
It was absolutely correct. I never can begin to thank
you enough for what you did. Now I am all set. I have
the authority; I can go ahead and coordinate. Now I know
where I am at.' Nothing pleased me more, because it would
have been an outrage to bring a man like Lehman down, give
him the kind of job he was given, and then have the ground
cut out from under him, as has happened to so many other
people. Now he is ready to go places.
MR. WHITE: He was heartbroken the last month or two.
H.M.JR I wish you could have heard him the other
night on the telephone. It was pathetic - his thanks. He
said, "Everything you have advised me to do has been right. "
You have been just a hundred percent right on everything.
MR. WHITE: What you said surprised me, because I
heard from good source that an Executive order was signed.
258
-9H.M.JR: No, and I might add, just for the record,
that the difference between Lehman and Nathan Straus was I gave Straus just as much time, and when Nathan Straus
was riding high he would high-hat - me; when he was down
and low then he would come around and cry on my shoulder.
That is the difference between the two men.
MR. WHITE: Lehman strikes me as much more of a man.
259
PARAPHRASE OF TELEGRAM SENT TO:
American Enbassy, London,
No. 797,
Dated - February 5, 7 p.m.
FOR MATTHEWS
The President desires that, as early as practicable
upon the return of the Prime Minister, the following
message be delivered to him:
"The pound and the dollar rates of exchange in
French North and West Africa have, in accordance with
our conversations, been reduced from 75 to 50 franes
to the dollar, and equivalently in terms of pounds. I
earnestly request that, by raising the rate from 43 to
so france to the dollar and by a corresponding change in
the pound-frane rate, the exchange rate in the territories
under the control of the Fighting French be brought
into conformity with these rates established in North
and West Africa. I request that action is view of our
common undertakings in the French situation and in the
assurance that you will recognize the importance of
immediate action."
HULL
(EA/G:KGC:MJO0
261
2HMJr:
Yeah.
D:
"As for salary, I would need something which
would have some relation to the added expense,
but I'm sure that that could be worked out.
I'm taking for granted it would be under
$8,000."
HMJr:
Under eight, he said?
D:
Yeah.
HMJr:
Yeah.
D:
"For which Senatorial approval will be neces-
sary." There - I didn't involve you in this,
Henry. I just said that some people with
Treasury and so on.
HMJr:
Well, now let me ask you one - I made a few
inquiries. Did you know that one of the
reasons that they - he - no, that - it wasn't it isn't Radin. Was it Radin that wanted to
be - they wanted to put on the court?
D:
HMJr:
D:
The Supreme Court of California, yeah.
Yes. And he was supposed to have tied up somehow or other with the Communists?
Yeah, well, it's a lot of hogwash. Max is
no - no more a Communist than I am.
HMJr:
D:
HMJr:
D:
I see. I see.
He - he was in a political fight out there.
I see.
There's absolutely nothing to worry about on
that score.
HMJr:
Well
D:
Absolutely not.
HMJr:
Well, now, Bill, give me another day or two
because I got a fellow down here from Boston -
hello?
-3D:
Hello.
HMJr:
I got a man down here from Boston
D:
Yeah.
by the name of Francis Goodale
HMJr:
D:
Yeah.
who was recommended very highly.
HMJr:
D:
Yeah.
HMJr:
And just between us, he's considering it.
D:
Yeah.
HMJr:
Now I'11 know in another day or two.
D:
Yeah.
HMJr:
And then if he doesn't, then I'd like to call
D:
Sure.
HMJr:
D:
HMJr:
you up and talk to you about Radin.
I - I - there's no question about the man's
intelligence and his integrity.
Yeah.
I just don't know what kind of political scrap
he was in in California.
D:
Well, it doesn't amount to anything.
HMJr:
Yes,
D:
HMJr:
It was just a - purely some political sniping
on the part of the opposition that's now in
power out there. That's all there was to it.
Well, it was terribly kind of you, and I'11 be
calling you Monday or Tuesday.
D:
Well, the guy is - can come on if you're interested.
262
263
-4HMJr:
Well
D:
And if you're not interested, nobody's em-
HMJr:
Right.
D:
You bet.
HMJr:
Perfect.
D:
Fine.
HMJr:
Thank you.
barrassed.
264
March 26, 1943
10:40 a.m.
Operator:
Mr. Milton.
HMJr:
Hello.
George F.
Milton:
Good morning, sir.
HMJr:
How are you?
M:
Just fine, thank you.
HMJr:
Mr. Milton, last night I read in the Saturday
M:
I see.
HMJr:
By Blair Moody - and quite frankly, because
Evening Post an article called "Mr. Smi th
Doubles for Roosevelt.
I'm a frank per. - after reading it I hesitate greatly to turn over all of my most
confidential material to the Bureau of the
Budget.
M:
Well, now may I make this observation, Mr.
Secretary?
HMJr:
You may.
M:
This committee
HMJr:
Yeah.
M:
is a committee that is only theoretically
under the Bureau of the Budget.
HMJr:
Yeah.
M:
The - the material of this committee is under
a private lock and key, and Smith does not
see it and has nothing to do with it.
HMJr:
M:
Well, it's still - you're on the - you're on
the article. See
Well, I'11 get it and read
his - the Bureau of the Budget payroll. Read
265
-2HMJr:
I mean see - see what they do to Smith and
see what they do to me.
M:
Well
HMJr:
In the article - I mean.
M:
What - in what general - I haven't read the
piece.
HMJr:
Well, there's - the thing is that
M:
That's this week's issue?
HMJr:
Well, it's - I mean it's - let me just see a
minute. It's March 27.
M:
March 27.
HMJr:
Yeah, I mean
M:
I'll get it during the day and
HMJr:
They use me as a stepladder to - to build
Smith up and push me down, and
M:
HMJr:
Good God. !
and it's just a vicious article. I don't
know where Blair Moody got his material from,
but there' 8 confidential material about stuff
that took place in the Cabinet Room
M:
Oh, good God !
and all at my expense, all at my expense.
HMJr:
M:
HMJr:
M:
That sounds vicious as hell.
Your language is perfect.
(Laughs) Well, I'll read it and - but I have
had no - nothing that I write
HMJr:
M:
Yeah.
goes to Smith.
266
-3HMJr:
M:
Well
And nothing that I take up, nothing that I
accumulate goes to Smith.
HMJr:
But if you
M:
And
HMJr:
You read the article, and I think that you'll
M:
Why, of course you are.
HMJr:
M:
understand - I mean after all I'm human, and
and to build him up this way -- solely at
my expense, nobody else is picked out -- cannot
be an accident.
Well, let me - let me read it, and I'11 give
you my thoroughly frank reaction to it, and
HMJr:
M:
Do it
and should I then not come over there this
afternoon?
HMJr:
M:
For the time being, all bets are off.
Well, can I after I've read it - can I have
the chance to discuss with you and
HMJr:
Yes, definitely.
M:
Sometime, say, early next week?
HMJr:
Absolutely. Call up Gaston and I'11 see the
two of you.
M:
HMJr:
M:
HMJr:
It's - why in the hell is somebody always doing things like this to happy birds?
Well, I mean it's - you ask that of Smith.
(Laughs) Well, I mean - I didn't
This isn't the first time.
267
-4M:
HMJr:
It's
This isn't the first time. It's a regular cam-
paign
M:
HMJr:
I see.
which has run against me, and it's like the
we're against the Ruml plan, Mr. Smith said, is
remark the paper said he made that the reason
because I didn't think of it first.
M:
HMJr:
oh, hell !
And that - I've been cartooned on that from coast
to coast.
M:
Well, I'11 read the thing and I'll call Gaston
HMJr:
Yeah.
and we'll - we'll have a talk, and.
M:
HMJr:
Do that.
if it's - that sounds to me terrible. I'm
M:
affected from two standpoints. I had a very
happy relation with you over there, and I hate
to see a friend of mine have a knife thrown in
him.
HMJr:
M:
Well, that's the way I feel.
Well, I'11'look at it and I'11 call Gaston.
HMJr:
If you please.
M:
Okay.
268L
March 26, 1943
10:50 a.m.
OCCUPATION CURRENCY
Present: Mr. Bell
Mr. White
Mr. Pehle
Mr. Luxford
Mr. Aarons
Mr. Friedman
(Agenda for conference handed to the Secretary by
Mr. White, copy attached.)
H.M.JR: Six things in ten minutes?
MR. WHITE: What I might suggest we do is run down
very briefly and tell you our tentative conclusions.
The first question is, shall we use U. S. regular
currency, such as we used in North Africa, with some
slight additional distinguishing mark, or a special
currency, such as the B.M.A. notes, during the initial
stages of our next invasion operation.
The British felt rather strongly that they did not
want to follow the practice used in North Africa and
that they wanted to go back to what they originally
suggested, that is, their using B.M.A. notes but we
using something similar, a military dollar, which would
not be identical with the dollar.
H.M.JR: May I ask a question. How did our gold-
seal notes work?
MR. WHITE: Very satisfactory.
H.M.JR: Why change?
269
-2-
MR. WHITE: That is the way we feel about that,
and with other reasons. The British have given several
reasons why they would like the change, and we have
examined them and evaluated them in each case. We don't
think they are cogent, that they are valid.
H.M.JR: Kosher? (Laughter)
MR. WHITE: It means the same thing. (Laughter)
So we will be glad to go into the various things they
describe, if you like.
H.M.JR: I don't care. Personally I think it is
silly. I think the thing worked. We picked up forty
million.
MR. WHITE: More than that. We don't know yet.
We have cabled to find out exactly.
H.M.JR: Our Army seems to know what it is. I
don't see any reason to change.
MR. WHITE: The chief reason which they had in
mind was that North Africa was a small country and that
not much money was involved, whereas if they go into
Italy or France they might have to use a lot more
currency and it may be more expensive to them.
We don't feel that that is true. We don't think
it need be.
H.M.JR: Expensive from the standpoint of printing?
MR. WHITE: No, expensive from the standpoint of
redeeming. The arrangement we had in North Africa was
those B.M.A. notes are just as good as dollars.
H.M.JR: B.M.A.?
270
-3MR. WHITE: British Military Authority. That
currency is as good as dollars. In London they said
that if we used our regular currency, as we plan to
do, and they used this stuff which wasn't regular
currency, theirs would go to a discount.
I said that we could fix that easily by making
them interchangeable. I said that we would take any
British Military Authority notes,and give dollars, of
any local merchant or anyone else that wanted them.
They thought that was all right until I suggested that
of course we would take that only for them, and any
British Military Authority notes that we collected we
would
over to them and they would give us our
dollarsturn
back.
MR. BELL: Any evidence of hoarding of our goldseal notes in North Africa?
yet.
MR. WHITE: We have asked for that. We don't know
MR. BELL: Was there a run on the gold-seal notes?
MR. WHITE: They prefer the gold-seal to the British.
MR. BELL: That is one reason the British are
objecting.
MR. WHITE: They didn't use these very long, the
B.M.A. notes, as they went into francs, which is all
right and which we recommend.
But what it does mean to the British is that they
are forced to make this currency as good as dollars.
Otherwise it would go to a discount, which has dis-
advantages both from their point of view and ours.
They objected in the North Africa episode. They
wanted to reopen the question, which we had already
determined here. At a meeting of the British Treasury
the day before I left, you remember I told you, they
271
-4-
wanted to reopen it for North Africa. I said at that
time that I was sure they would let them reopen the
general question any time but they couldn't reopen the
North Africa question because all the machinery had
stopped.
H.M.JR: Have you all considered this? I don't
see any reason to change.
MR. WHITE: We have all considered it. We have
had a number of lengthy discussions. I am sure the
Army feels as we do, and we are agreed that we ought
to pursue the same practice.
H.M.JR: I feel like - you know the custom they
have at the Bank of England, they wear the high hat and
the pink vest. They don't change; they go on forever.
(Laughter)
MR. WHITE: And they are successful. Even the
bombs missed them. (Laughter)
MR. PEHLE: We are forcing the British, in effect,
to change.
H.M.JR: Why?
MR. PEHLE: Because although they use the B.M.A.
note in order to make it work side by side with our
note they have to be interchangeable.
H.M.JR: Interchangeable with what?
MR. PEHLE: U. S. dollars, yellow seal.
MR.
of that.
BELL: I should think they would be glad
MR. PEHLE: That means, in effect, that we are
forcing them not to use B.M.A. notes which they have
been using in other areas.
272
-5- MR. WHITE: No, they use the same notes, but what
means is that the note represents the equivalent of
ait dollar.
MR. LUXFORD: Redeemable in dollars.
H.M.JR: I think that when we go into an occupied
country we should be square with the population.
MR. LUXFORD: I think the British would agree that
they also feel that way, Mr. Secretary. They say, though,
that doesn't mean they have to drain their foreign
exchange assets in order to go into this country and
turn them over to them. What they should do is agree
to give them local currency. Then they have no obligation to strain their foreign exchange assets to liberate
these countries.
MR. WHITE: I think that is a little bit confusing.
H.M.JR: If they can get away with it and give them
occupational currency which has no mark, no standing in
the world in exchange markets, they would like to get
away with it.
MR. BELL: That is the way it appears on its face.
H.M.JR: I say to hell with it. Then we would be
no better than the Germans are in France.
MR. WHITE: That is the way it would appear to
some people.
Actually even the dollars that they get, that a
foreign country gets, let's say Italy - the dollars
which you spend there in the initial part and which
finally land - most of it - in the Central Bank - even
that we can get back, but for a very different device.
You g e t it back through any claims or any arrangements
that you wish to make later by requiring them to pay
for certain things, which is exactly what we are doing
in North Africa.
273
-6-
In North Africa we use the regular dollars, but
they are not in effect keeping them because it is like
the arrangements we are making on Lend-Lease, requiring
them to pay for the imported goods because they have
these dollars. If they didn't have these dollars they
would get that stuff for nothing.
H.M.JR: Now, Feis said that Lend-Lease goods we
are getting paid for with francs.
MR. WHITE: But we use those francs and .we otherwise
would have to buy them.
H.M.JR: What do we use them for?
MR. WHITE: Our troops and expenditures.
H.M.JR: I think it is working beautifully; le ave
it alone.
Let's go to the next thing.
O.K. with you, Bell?
MR. BELL: Yes.
MR. WHITE: It will not be more expensive than
they suggest, to--
H.M.JR: Oh, well, it is a question of good faith.
After all, we are going in to free the se people, and
one of the first things you want to do is give them
something on the up-and-up and not a gold brick.
MR. WHITE: The Army asks this question. They
said, "Can you guarantee that the public will accept
without question and as easily a strange note as they
would a regular dollar?" The answer is, "No, we can't
give you that assurance. We don't know.
274
-7Therefore, the Army said, "Under those circumstances we can't afford to take any chances or any
risks. Ne want the regular currency when we go in."
H.M.JR: Let's go on to the next.
MR. WHITE: There is only one other point I might
make, which may come up to you.
The British claim that the Allied governments,
the exiled governments, would not like us to use our
currency in going in - regular currency. The reason
they give does not seem a valid one to us, and I am
a little bit skeptical about it; but that is what the
British say.
They say if we use American currency the other
countries will be afraid they won't be able to reestablish their own. It doesn't make a great deal of
sense to me.
H.M.JR: You have leaned over backwards giving
the opposition viewpoint. (Laughter)
MR. WHITE: Because they will raise it.
These recommendations which you are agreeing to -
it is our suggestion that we have a meeting with the
Army and State and say, "This is the Treasury recommendation" - whenever you want to call such a meeting.
The second question is, shall we begin at once
the manufacture of local currency.
There is general agreement with the British, ourselves, and with everybody here, that we should not that we should move--
H.M.JR: Excuse me.
(Discussion off the record.)
275
-8H.M.JR: Where were we?
MR. WHITE: On the local currency there is agreement that the forces should move just as quickly as
possible from the use of currency, dollars and sterling,
into local currency, francs. There is complete agreement on that.
The question as to how soon they could move would
be a military decision, depending on how things are
there.
But the moment they feel they can appropriately
do it they ought to begin paying in local currency,
just as they did in North Africa. Very quickly they
began paying in francs to the soldiers, and so forth.
The question then becomes the preparation of an
adequate supply of the local currency because in most
areas they may not have any. The local supply consists
of what already is there that they may be able to get
from the banks. In the case of the friendly countries,
what the various exiled governments are preparing - and
we have a list of just what they are preparing, and I
will raise that question in a moment. The other source
is what the British Government has been able to get or
can get.
For example, it is going to take all the lira
notes which now circulate in Libya, replace them with
another note, which will raise another question which
I will take up later. And they will have a lot of lira
to go into Italy, and I assume they will allocate that
among the various United States and British forces.
In France they have a lot of francs except in
low denominations. But the other territories are
mostly friendly territories, and they are proceeding
and discussing now the printing of notes in preparation
for that.
276
-9There still may not be an adequate supply, and
there will not be an adequate supply in enemy territory. Therefore, it is our suggestion that we prepare
ahead of time a currency which the Americans can use,
a currency which will be in terms of local units. In
other words, the United States military forces decree
this is five lira or two lira. That currency can be
prepared here in advance in the Treasury in order to
meet the question of security. The Army is afraid it
will leak out that they are printing lira.
The suggestion is to do one of two things: Either
print simultaneously eight or ten currencies, which
they can do, or print them in blank and at the last
minute fill in the names.
Now, Aarons has been in close contact with the
Bureau of Engraving and ought to be able to answer
all the questions on this. He has prepared a memorandum as to all the techniques involved and the time
element, and so on. So if there are any questions you
want to ask on that he will give them; but it is
feasible it will--
H.M.JR: No, I want to think about this. I can't
answer this right away.
MR. WHITE: We have a long memorandum.
H.M.JR: Why don't you run over this thing once
and le t it soak in, and we can have another meeting.
I haven't allowed enough time.
MR. WHITE: All right. That will take about a
month to prepare from the day you give the signal.
If they use the blanks it will take another two weeks.
MR. AARONS: It will just take a day or so to
get into production if you have the plates ready.
MR. WHITE: Now, the British would be satisfied
with that, and they said if we make some of those they
277
- 10 -
might like to have some made by us for them because
they don't have enough facilities, which would say,
"British Military Authority" instead of "United States
Military Authority.
If
MR. LUXFORD: I think it should be pointed out
we are not intending to use this to finance our
operations in that area. This is because there will
be a shortage of local currency the same as in North
Africa. We are not going to try to buy anything with
it. The thing will be necessary. The population
won't have any currency.
MR. WHITE: That isn't wholly true.
MR. LUXFORD: That is the contingency.
H.M.JR: Was that true in North Africa?
MR. LUXFORD: There was a shortage.
H.M.JR: Did Colonel Bernstein say so?
MR. LUXFORD: We are manufacturing it now.
MR. WHITE: Aarons has been busy for a long time
getting the printing of Algeria and North Africa notes.
MR. BELL: We had the American Banknote Company
and another banknote company in Philadelphia printing
a lot of those notes, and then we got paper and other
supplies for the Algerian situation and are just about
ready to ship it.
H.M.JR: Where is the colonel? Why doesn't he
sit in on this?
MR. WHITE: Well, he will come in after we have
made up our minds. He is in the Army. (Laughter) He
will have to report to General Carter. I thought we
had better make up our own minds on what the Treasury
wants to advise.
278
- 11 H.M.JR: He say S he wears the Treasury label.
(Laughter)
All right, go a little faster. Let me just get
the impression.
MR. WHITE: Next, shall we use local currency
being prepared by the governments in exile. That raises
a political question. These governments want to make
arrangements. Do we want to talk with them as to the
arrangements, or do you want to prepare your own
currency exclusive of arrangements with them? The
exiled governments are extremely eager to enter into
arrangements because that gives them political status,
prestige, and so on.
H.M.JR: From the little I have seen of any of
these governments in exile I would disregard them.
That is the way I feel.
MR. BELL: It seems to me you ought to get on a
local currency basis just as soon as you can after
your forces go in. If these exiled governments - and
most of them certainly have complete authority - can
furnish us this currency, I should think we ought to
buy the currency from them.
MR. WHITE: The currency is available, and we
couldn't buy it in any case - they merely give it to
us on the books, then make a settlement later. The
question is not the availability of the currency because
you can have currency available. The question is
he ther you take all of the currency available through
them, or ours. There are those two possibilities which
need to be discussed. Both ways are possible.
MR. PEHLE: It strengthens their hands politically
if we use their currency.
MR. BELL: The Dutch East Indies are having coins
minted and currency printed and available for the
invasion of that territory.
279
- 12 -
MR. WHITE: That is true of Poland and almost all
of them.
H.M.JR: How much pressure is there on us to clean
this up?
MR. WHITE: The British and the Army are pressing
us, and I should think if you could take it up early
next week - it shouldn't be later than that.
H.M.JR: I didn't allow us enough time on this, and
I can't keep this man waiting indefinitely.
Why don't we meet again at three o'clock on Monday.
Then I am going to ask this group in for nine o'clock
Wednesday.
MR. WHITE: The larger group you mean?
H.M.JR: Yes.
MR. WHITE: The larger interdepartmental group?
H.M.JR: Yes, nine o'clock Wednesday. White plus Army is the Navy interested?
MR. WHITE: State, BEW, and I think the Navy, but
we never have asked them in.
MR. BELL: They haven't been very much interested.
H.M.JR: I would ask them.
MR. BELL: The Navy takes United States currency and
doesn't care about regulations or anything; they use it.
H.M.JR: I am putting you down for an hour Monday.
MR. WHITE: We have a couple of memoranda. They
are rather long. If you could read them over the week
end--
H.M.JR: No, not on your life. (Laughter)
280
Agenda for Conference in Secretary Morgenthau's
office on Occupation Currency Problem
1. Shall we use U.S. regular currency or a special currency
during the initial stages of our next invasion operation?
2. Shall we begin at once the manufacture of local currency?
a. Identical
currency for all areas with blank spaces left
for all legends.
b. Different currency for each of the possible areas with
legends filled in.
3. Shall
weinuse
the local currency being prepared by the governments
exile?
4. Shall we discuss exchange rates with the exiled governments,
as suggested by the British?
5.
Do we approve of the replacement by the British Government
of lira in North Africa with special currency designated
in sterling denominations?
6. Shall the stocks of currency which are being prepared be
kept by the Treasury in places designated by the Army, or
shall they be turned over to the Army?
281
March 26, 1943
11:00 a.m.
Operator:
Go ahead.
HMJr:
Hello.
David
Niles:
Good morning, Mr. Secretary.
HMJr:
How are you?
N:
All right, sir.
HMJr:
Good.
N:
Well now, the chap is still a little confused.
He's gone away to talk about it. He said that
it was suggested that he come down on a month's
trial.
HMJr:
Yeah.
N:
Now he wondered whether that meant, even on a
month's trial, that he had to cut himself off
from everything.
HMJr:
Well, I don't think so. Without asking any-
N:
Well, I think he - I think he would come down
HMJr:
N:
HMJr:
N:
body's advice, my answer would be "no". He
could come down on a month's trial.
on a month's trial if it didn't mean - because
he said, "If at the end of the month the
Secretary doesn't think I'm the man or I don't
think I
Well, he would have burned his bridges.
That's right.
That would be silly.
That's right, and that's why I think if it
could be cleared so that he wouldn't have to
HMJr:
N:
I'll clear it on my own responsibility.
And then I can tell him then that on your responsibility he does not have to
282
-2HMJr:
And instead of saying "a month" I'd say "a month
or two.
N:
Right.
HMJr:
Because a month is a very short time.
N:
That's correct. Well, then I'11 - I'11 just
call him up. He's already left, and I'm going
to call him up and tell him that.
HMJr:
I would say "a month or two."
N:
Fine.
HMJr:
And also on coming down on the week, if it's two
N:
Okay.
HMJr:
From now.
N:
Okay, sir.
HMJr:
But on my own, he can come down. I - I won't
weeks that's all right.
even consult anybody.
N:
Okay, sir.
HMJr:
What?
N:
I'11 call him tonight or tomorrow morning and
HMJr:
And then keep me posted.
tell him.
N:
Righto.
HMJr:
Thank you 80 much.
282-A
FROM:
TO:
MR. SCHWARZ'S OFFICE
The Secretary
Blair Moody said this morning that the
two incidents in which he referred to
you in his Saturday Evening Post piece
on Harold Smith were based on conver-
sations with Smith and others at the
time they took place. He did not show
his copy to Smith before turning it
over to the Post, nor did he clear
those passages with any Treasury people.
He talked with Frank Murphy at some
length before writing the article.
His original copy, he said, contained
a detailed story of the survey made
by you, Merriam and Brownlow to get
8 Budget Director, but this was out
by the Post. He said Smith has objected to the way in which he wrote
the
incidents. @ 2/16/43
2834
March 26, 1943
12:33 p.m.
HMJr:
Hello.
Operator:
Mr. Smith is in a conference and would like
to call you back if he may.
HMJr:
Operator:
Surely. I'm - just leave word I called.
All right.
HMJr:
Thank you.
12:34 p.m.
HMJr:
Hello.
Operator:
Harold Smith.
HMJr:
Hello.
Operator:
Go ahead.
HMJr:
Hello.
Harold
Smith:
Hello.
HMJr:
This is Morgenthau.
S:
How are you, sir?
HMJr:
I am not so good.
S:
Really?
HMJr:
S:
HMJr:
Well, I've just been reading Blair Moody's
article in the Saturday Evening Post.
Oh, yes.
And we asked him where he got this information about the meeting in the Cabinet Room
and all that, and he said he got it from you.
284
-2S:
HMJr:
What part was that?
oh, about where we had a meeting and how
Morgenthau alone dissented and Morgenthau this
and Morgenthau that - Morgenthau did not like
this even a little, which did not worry Smith,
S:
HMJr:
S:
and 80 forth and so on. I think it's terrible,
Harold, that all this stuff
Well, I do too. I do too.
I mean it's bad enough fighting Cissy Patterson
and the McCormicks and all that, but if somebody right out of the White House feeds this
stuff to a man like that
Now I just - I want to look at it and see what
he - what he - what he had referred to before I what - just - do you remember what that - what
HMJr:
part of the article it is?
Well, it's on - it'd be - it's on page - well,
it runs all through - I mean all the way through
the article he deprecates me to build you up.
S:
Well, that - of course, the whole thing is - is just made me sick, including the title, and it's
one of those things that you can't control, and
HMJr:
Well, you
I'm - I'm not conscious -- I'11 look the thing
S:
over -- of having made any critical statements
about you.
HMJr:
Well, all the way through - and, as I say, it's
S:
Yeah.
hard enough functioning these days in the middle
of a war
HMJr:
S:
HMJr:
Yeah.
without having somebody out of the White House
feeding a newspaper reporter critical material
about another Cabinet member.
285
-3S:
HMJr:
S:
HMJr:
S:
Well, I - I - I mean I just don't do that sort
of thing.
Well,
it's here. It's - it's all in - it's all
in the Post, and - and
Yeah.
it's - it's - say, we have - if we can't hold
a meeting at the request of the President in the
Cabinet and have that confidential, what can be
confidential?
Yeah. Well, I'11 have to - I glanced at the arti-
cle. I haven't read it carefully, and I don't
the lead-off on it was equally bad. I tried to I - of course, they wouldn't let me see it. I
know where he got some of his stuff. For instance,
saw the heading in the Post the week before the
whole thing was set up. I tried to get something
done about it, and they always, you know, do the
"man biting dog" stuff and get it distorted, and
I felt - I felt terrible about it, and '11
HMJr:
Well
2
S:
HMJr:
I'll look - I'll look it over and - and see
where some of that stuff came from. Of course,
there's an awful lot of stuff that leaks out.
Well, this story
S:
The food order yesterday, for example.
HMJr:
Pardon?
S:
Yes, well, I checked up on that and the newspaper
people knew all about it and it never came from
this office.
HMJr:
I don't know what - what you're referring to.
S:
Well, the order that appointed Chester Davis
HMJr:
Oh.
S:
and so on. Yesterday the President had to
release it before the Executive Order was ready.
-4HMJr:
Well, this - before I called you I sent my
man to ask Blair Moody where he got it, and
he said he got it from you.
S:
Hmmm.
HMJr:
I mean this stuff about me, and
S:
HMJr:
S:
HMJr:
S:
Well
I just don't think it's done. I really
don't.
Yeah, well
And I - I - I'm
Well, I'm not going to accept that, you see.
I'm not going to accept that until I - until
I look at the part of the article to which you
refer and talk to Moody about it.
HMJr:
S:
Yeah.
Because I cannot recall - I cannot recall having
said anything of the sort, and if I - I'm sure
that there have been times that perhaps I've
been critical of you as you have been of me,
but I would not be spreading that around.
HMJr:
S:
Well, of course, anyway - all - all I have is
what he said. But - but have a look at it.
Yeah, I will. You bet.
HMJr:
And then
S:
Well, I'm awfully sorry about the whole damn
thing
HMJr:
S:
Yes.
because I would have preferred never to
have had it - anything of the sort published.
Every time any of us get any publicity it's
always turned in a way that it a bad turn.
HMJr:
Yeah.
286
287
-5S:
I mean you - you've doubtless noticed that,
and that S been my experience around
HMJr:
S:
HMJr:
Well
here 100%, and therefore I've tried very
hard to stay out of the papers
of course
and stay out of the magazines.
S:
HMJr:
The other thing which I never bothered to call
you up - but it' S been cartooned, me, from one
end of the country to the other, and that was
that -- it was accredited to you - " the reason
that Morgenthau's against the Ruml plan is be-
cause he didn't think of it first. If Now that
ran in the newspaper, and that thing - they ve
cartooned me on that from one end of the country
to the other.
S:
Well, they're just taking advantage of the both
of us on
HMJr:
S:
And - but - well, anyway I wanted to let you
know how I felt direct.
All right. Well, I'm awfully sorry about it.
I - I will - I will get a hold of it, and - and
see what is - what is said and how it could
have originated.
HMJr:
Okay.
S:
All right.
HMJr:
Goodbye.
288
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 26,
1943
TO Norman Thompson
FROM Secretary Morgenthau
I believe there is an Executive Order out signed by
the President calling the attention of the various Cabinet
members and heads of the departments to public criticism.
I would like to have this in connection with a letter that
I am writing to Harold Smith. (denchanged send his letter mund to & did m smith not )
file here
no Eyee order Letter of
any 2 o, 1942, copy attached
cover the subject free
289
August 24, 1942
My dear Mr. President:
I have your letter of August 20th, with
reference to criticisms and statements publicly
made by responsible officials of the Government.
Your instructions have been brought to the
attention of Treasury officials and you may count
upon a full compliance by this Department.
Faithfully yours,
/s/ H. Morgenthau, Jr.
The President,
The White House.
Copies of the President's letter were sent to
members of the Secretary's 9:30 staff and to
the Heads of Bureaus, Offices and Divisions
of the Department.
290
THE WHITE HOUSE
WASHINGTON
August 20, 1942
My dear Mr. Secretary:
In dealing with the many complex war problema which we
face today, it is unavoidable that there be wide differences of opin-
ion between agencies of the Federal Government -- opinions sincerely
and honestly held. However, too often in recent months, responsible
officials of the Government have made public criticism of other agen-
cies of the Government; and have made public statements based either
on inadequate information or on failure to appreciate all the aspects
of a complex subject which 18 only partially within their jurisdiction.
This 18 inadvisable at any time. But in times of war it is
particularly contrary to public policy. It contributes only to the
confusion of the public, which naturally does not know what to believe
on an involved issue when it gets different stories on successive days
from officials of equal standing, though not necessarily of. equal understanding.
Such divergencies, especially when coupled, as they often
are, with express or implied criticisms of other officials are a direct
and serious handicap to the prosecution of the war. Officials divert
to quarrels with each other the time and energy they ought to be devoting to fighting the enemy. The people, confused by these contradictory
voices, are apt to obtain the false impression that the Government AB
whole 16 uncertain as to its objectives and general method and that it
does not know its job.
n
This feeling is of course pounced upon, exploited, and intenaified by opponents of our var effort. Our enemies use this raw material
of discord provided for them by men who ought to be making trouble for
the enemy and not for one another.
One of the duties prescribed for the Office of War Information
is the coordination of var informational activities of all Federal de-
partments and agencies, for the purpose of assuring an accurate and con-
sistent flow of var information to the public and the world at large and
for the added purpose of eliminating conflict and confusion among the
departments and agencies of the Government in the matter of their public
relations. Elmer Davis, Director of this Office, tells me that so far
as written statements from departments and agencies are concerned, very
291
-2satisfactory progress toward this objective is being made. But, he
pointe out that the attainment of the objective is being gravely hampered by verbal statements dealing with matters touching more than one
department or agency made by high officials in press conferences and
elsewhere, - statements which do not contribute either to the accuracy
or the consistency of public information.
In A recent report to me on this situation, Mr. Davis makes
a statement which should be emphasized: "The enemy is constantly at
work trying to undermine public confidence in the government; why should
members of that government help him along by undermining it themselves?"
Where honest differences of opinion exist no one would propose
to suppress them. Nor would anyone attempt to interfere with the free
use by every public official of the normal processes of information to
the public and press. But it is no solution to a controverted question
to argue it out in public. If the agencies would refrain from resorting
to public debate of this kind they would have a good deal more time to
attend to their business, and the nation would have a good deal more assurance that that business was being done right.
These differences between agencies often deal with matters of
fact which can be harmonized by fuller investigation, or questions of
policy which should be adjusted by conference between the agencies or
by reference to DO as the responsible head of the Government. Disagree-
ments either na to fact or policy should not be publicly aired, but are
to be submitted to me by the appropriate heads of the conflicting agencies. The policy of the government should be announced by me, as the
responsible head thereof. Disagreements as to facts can be resolved if
necessary, by investigations and surveys directed by no.
Will you please see to it that your particular department and
itc various bureaua and divisions comply with these instructions.
I am sending an identical letter to the responsible head of
each department and agency of the Federal Government.
Very sincerely yours,
fin the
The Henorable
.he Secretary of the Treasury,
Washington, D. C.
292
March 26, 1943
4:01 p.m.
HMJr:
Hello.
Sir Fred.
Phillips:
HMJr:
Hello. Yes, Phillips speaking.
Phillips.
P:
Yes.
HMJr:
I've had a chance to discuss that memorandum that you gave me on the 24th both with
the President and Mr. Hull.
P:
Yes.
HMJr:
And the President is going to discuss it
with Mr. Eden directly.
P:
I see.
HMJr:
So I just thought I'd tell you that.
P:
Yes, thank you very much.
HMJr:
You're welcome.
294
-2HMJr:
could you - would you mind sending over
to Mrs. Klotz another copy for my records?
D:
Not a bit, not a bit.
HMJr:
And
D:
We'd better send you a couple of them now.
(Laughs)
HMJr:
D:
HMJr:
D:
Well....
Well, we'll see that one gets in your hands
Well, I've given one to the President and one
to Admiral Brown, and if I have one for myself that's enough.
Yes. Well, now we've furnished one to - to
the map room over there because Commander
Mott called me up and said that they didn't
have - have one in their file
HMJr:
Yeah.
and so we - we sent one right over.
D:
HMJr:
Good.
D:
So they have one....
HMJr:
And, look
D:
.... in the President's files now.
HMJr:
Now...
D:
But I'll see - I'll get one in your hands this
afternoon.
HMJr:
And then as these things come along that are -
D:
Yes.
HMJr:
that are strictly financial
you keep your own eye open for me, because
everybody was searching for that cable, including the White House, and they couldn't find
it.
295
- 3D:
HMJr:
D:
HMJr:
Yes, I shall.
And
I - I'll keep that in mind, and
And
in this case, what happened was that the
D:
President was interested in getting this before
Churchill,apparently, and he spoke to the
Secretary about it
HMJr:
D:
Yes.
who didn't - didn't know anything about it
particularly. None of us did.
HMJr:
Yeah.
D:
But he - he wanted him to send that message.
HMJr:
Yeah.
D:
HMJr:
D:
So we just acted as clerks and sent it along.
But I'11 keep you in mind
Because sooner or later
when that comes up.
HMJr:
Sooner or later it comes in my lap anyway.
D:
Yes, yes. Well
HMJr:
So if you'll do that, I'd appreciate it.
D:
Oh, yes, I'11 do that.
HMJr:
And you'll send me another copy.
D:
Yes, sir. Right away.
HMJr:
Thank you.
D:
Very good.
296
March 26, 1943
4:27 p.m.
Nelson
Rockefeller:
Mr. Secretary?
HMJr:
Talking.
R:
Yes, sir. I called up relative to that
matter that you put in my hands a week or
so ago
HMJr:
Yeah.
R:
....on magazines.
That's right.
Since you and I talked
HMJr:
R:
HMJr:
Yeah.
R:
a very strong and long memorandum has
gone down to the Embassy
HMJr:
Yeah.
:
R:
and has been - or is being -- don't know
the date yet -- transmitted to the govern-
ment
HMJr:
R:
Yes.
....on that subject, but it was not designed
primarily for that subject, but is in
answer to a protest of some five months ago
about the Black List, which
HMJr:
I see.
came from the government down there.
R:
They have used, however, this particular
situation, which was under the discussion
you and I had.
HMJr:
R:
Yeah.
....88 the - the heart of the memorandum.
It was written by the man who is running the
Black List, Mr. Dickens
297
-2HMJr:
Yeah.
who works in our office but who is hand-
R:
ling that situation.
HMJr:
Yeah.
R:
He has handled it in an extremely able way and
an extremely forceful way.
HMJr:
Good.
R:
However, at the same time, just in case that
didn't do the trick, although they are hopeful
it will
HMJr:
R:
Yeah.
we are investigating down there the pos-
sibility of handling this situation along the
lines which you and I discussed.
HMJr:
I see.
R:
So that I'11 be able to let you know on both
those angles as soon as we have any informa-
tion.
HMJr:
What's known as the "blow-torch method", eh?
R:
(Laughs) Exactly.
HMJr:
Wonderful.
R:
The "hot air" or the "blow-torch." You see,
HMJr:
I see.
R:
HMJr:
R:
the other one's the "hot air method"
....and sometimes that doesn't work. (Laughs)
Yeah. Well, I appreciate what you're doing
and I appreciate being called.
Well, this other - this memorandum I'm referring to is not known to but a few people in
the department.
298
- 3HMJr:
R:
HMJr:
Yeah. Well
And so I'm giving it to you
Well, the conversation that you and I had was
strictly between us.
R:
That's right, absolutely.
HMJr:
And I haven't - I don't think I - I don't think
R:
I've told it to anybody here.
Well, I didn't either. I just handled it with
this fellow who, as I say, is in our office
but works - runs the Black List.
HMJr:
Right.
R:
And he wrote this memo.
HMJr:
Yeah.
R:
....80 - it's fifteen pages and it's a very
strong one. It's going to put them on the
"hot seat" down there.
HMJr:
Now do you - you present that through the
Embassy?
R:
That was - yes, sent to the Ambassador down
there to present to the government
HMJr:
R:
I hope
and he used the excuse of a memo that they
had raised protesting about the Black List.
HMJr:
R:
I hope they present it, because we sent a
written memorandum down there once about five
months ago which was never presented.
Well, that's why I said to you that I wasn't
sure of the date of presentation, but I
that is being checked for me and as soon as it
has been presented, I'll let you know.
HMJr:
Right.
299
-4R:
I also - we sent a very nice letter down to
the manager of that shipping company down
there
HMJr:
R:
HMJr:
R:
oh.
and that matter is cleaned up too - they they were very pleased about it.
Good.
Sorry not to go ahead, but understood under the
circumstances, and so did the Ambassador. He
feels that the matter has been handled nicely
down there.
HMJr:
Okay.
R:
All right, sir.
HMJr:
Cheerio.
R:
Thanks loads. Goodbye.
300
March 26, 1943
5:18 p.m.
Kathryn
Brady:
Hello.
HMJr:
Mrs. Brady?
B:
Yes, sir.
HMJr:
I've just got word from Mr. Paul on the Hill
B:
Uh huh.
that if the President would call Congressman
HMJr:
Lyndon Johnson
B:
HMJr:
Uh huh.
and ask him to go to work to get us some
votes to back up Bob Doughton, it would be most
helpful.
B:
Uh huh.
HMJr:
Tonight, if possible.
B:
Uh huh.
HMJr:
Do you think you could get that
B:
Yes. Yes, sir. Is that Randolph Paul?
HMJr:
Yes.
B:
All right.
HMJr:
That he came down off the Hill and told me
that -- I shall repeat it -- that if the Presi-
dent would call Lyndon Johnson
B:
HMJr:
B:
HMJr:
B:
Yes.
and ask Lyndon Johnson to go to work
Uh huh.
....to get votes to back up Bob Doughton
It would help.
301
-2HMJr:
A lot.
B:
All right, sir. And by the way, your secretary - your secretary called about your
cigarettes and they're on the way over.
HMJr:
Wonderful !
B:
All right. (Laughe)
HMJr:
Those are expensive cigarettes.
B:
Yes, sir !
HMJr:
On all this rationing.
B:
All right, sir, I'll take care of this.
HMJr:
Thank you.
B:
All right.
2
of / 1050 302
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE March 26, 1943
TO:
Mr. E. J. Fitzgerald
FROM: Mr. Herman Wolf HW
The following persons have been invited to the special labor
press conference at 11:00 a.m. Saturday, March 27th:
no show Philip Pearl, Publicity Director, AFL.
Bernard Tassler, Editor, American Federationist
Len De Caux, Publicity Director, CIO
C. D. Fowler, Publicity Department, CIO
Miss Hollace Ransdell, Publicity Department, CIO
Miss Virginia Gardner, Federated Press
no showliver Carruth or his assistant, International
Labor News Service
Edward Keating, Editor of Labor (Railway Brotherhood)
Ruben Levin, Staff of Labor
jarisins Herbert
Little, Labor Desk, OWI
Would you kindly see that passes are available for these persons
To the best of my knowledge other people attending the conference
will include Mr. Houghteling, Mr. Schwartz and myself, plus Damble
(walf)
Regarding the invitation to Mr. Herbert Little of the OWI
Mr. Schwartz and I agreed that this was a good idea.
Hm g read
10 6 WV
ABOS
303
March 26, 1943.
Dear Allan:
Thank you for your letter of March 23, telling
me of the plane that are now being made for the
rally which will be hold at Carnegie Hall on
April 12. I was such interested in what you said,
and will be glad to have you keep me informed as
to the progress of the plans.
With all good wishes,
Sincerely,
(Signed) H. Morgenthan, Jr.
Mr. Allen Sproul,
Chairman, Var Finance Committee,
Second Federal Reserve District,
33 Liberty Street,
New York, New York.
GEF/dbs
304
tostats to following on 3/24/43 Bell
Robbins
Graves
Famble
Buffington
Peabody
305
UNITED STATES TREASURY
WAR FINANCE COMMITTEE
Second Federal Reserve District
WAR SAVINGS STAFF
VICTORY FUND COMMITTEE
FEDERAL RESERVE BANK OF NEW YORK
33 Liberty Street, New York, N.Y.
Personal
March 23, 1943.
Dear Secretary Morgenthaus
I am delighted to learn that you are going to be
able to come to New York on the night of April 12th, and to
make the principal talk at the meeting we are planning at
Carnegie Hall to give a sendoff in New York, and by radio
throughout the country, to the Second War Loan.
We are in process of forming a committee which will
sponsor the meeting, in behalf of the War Finance Committee,
and as soon as this committee is completed it will send you
a formal invitation. Meanwhile, as Chairman of the War Finance
Committee in this District, I am confirming the informal approach
made to you through Mr. Robbins.
We shall keep you informed as to the development of the
program, and you may be sure that your wishes with respect to your
participation in it will be observed.
Yours faithfully,
rvey
,0172
The Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
Allan Sproul,
Chairman.
306
UNITED STATES TREASURY WAR FINANCE COMMITTEE
BULLETIN
March 26, 1943
Publicity Directors, War Finance Committee:
As decided at our meeting here on March 19th, we will send
advertising and promotional material for the 2nd War Loan Drive direct
to the media and outlets as in the past, and to individuals as follows:
VFC
(1 copy)
(1 copy)
(see later)
War
normally
receiving
such county level.
(1 copy)
Publicity Directors to us the names of additional people
to whom they wish the sent together with quantities. So that
District Federal Regional District Savings material Reserve Managers Publicity Executive material Staff down agreed Presidents VFC Representatives Managers Directors to the write
there may be no delay, will you please take care of this at once.
For your convenience we are attaching a list of key material presently
planned, together with total quantities, and essential facts of distribution
including probable dates of shipment.
If you wish changes made in your district on any of the shipments we
can still catch, please advise us at once.
Stuart Peabody
Head Advertising Specialist
Attachment
Copy to Presidents, Federal Reserve Banks
ADV-7
-1NEWSPAPER ADVERTISEMENTS
7 full page newspaper ads and 7 - 1000 line adaptations.
4 - 100 line newspaper ads - all for local sponsorship.
1 of each size will be used for the week of April 5th.
2 full pages, 2-1000 lines and 1-400 line ad will be used each week
thereafter.
The first ad in all three sizes was mailed to newspapers March 23rd.
Advertisements for the second week of the campaign will be mailed
March 31st and succeeding ads will go out approximately one week later.
Proof's and mats will go direct to daily and weekly newspapers.
1 proof each will go automatically to each Federal Reserve Bank
President, Federal Reserve Publicity men, Regional Managers, Victory
Fund Committee. and Executive Managers, Victory Fund Committee.
All mats and proofs will be mailed from Western Newspaper Union offices
in thirty-four key cities.
Points of Sale Bulletins
This bulletin will go direct to 15,000 banks - two for each bank, They
will be mailed by March 27th from a supplier in Pennsylvania,
Car Cards
75,000 car cards will be mailed completely by March 30th from the Office
of Emergency Management headquarters in Washington. They will go direct
to Transit Companies for displaying in most of the large cities in the
country. One car card will be mailed to each of the Federal Reserve
Bank Publicity men. 10,000 will be sent to our Chicago Mailing Division
for requisition.
Basic Pamphlet
4 million of these 2-color pamphlets are being printed for nationwide
distribution. They will be shipped as follows:
50,000 each to the New York Federal Reserve Bank 30,000 to the Chicago Federal Reserve Bank and
25,000 each to the balance of the Federal Reserve Banks,
1,000,000 to be divided among War Savings Staff State
Administrators,
50 each to 3,800 Savings and Loan associations,
400 each to first class post offices,
100 each to second class post offices,
Delivery will be completed by March 30th. 1 each to Federal Reserve
Bank Presidents, Federal Reserve Bank publicity directors, Executive
Managers Victory Fund Committee, and Regional Managers Victory Fund
Committee.
ADV 7
307
-2Kit for Retailers
This kit will contains
(a) 700,000 1-color bulletins entitled "WANTED - 13 BILLION
DOLLARS" for retail store display.
(b) BIG GUNS - This 4-page tabloid newspaper will tell retailers
how to tie in with the program and will illustrate promotional
materials available,
(c) Mrs. Brown Goes to War - 2 copies of this booklet, explaining
the women's angle, will go into each kit.
(d) A sticker entitled "WE'VE NEVER BEEN LICKED" "BUY WAR BONDS".
(e) A 1-page flier, entitled "OUTFITTING THE OUTFIT" - a special
women's activity.
One copy of each of (b), (d) and (e) above, will go into an envelope to
make up a retailers' kit. From 1 to 6 copies of (a), depending on the
size of the outlet, together with two copies each of item (c) will also
go into every kit, The mailing of this complete kit will begin on
March 25, and will be completed by March 27th. It will be handled by
our Chicago Mailing Division, One complete kit will go to each Federal
Reserve Bank President, Federal Reserve Publicity man, Executive Managers
of Victory Fund Committee and Regional Managers of Victory Fund Committee.
Newsboys For Defense - 11th Edition.
This 4-page newspaper containing information tying in newsboy activities
with the Drive, will be sent to all newspapers which regularly participate
in the Newspaper Carrier Boy promotion. This newspaper is being mailed
from Chicago on March 26 and March 27. One copy will go to each Federal
Reserve Bank President, Federal Reserve Publicity Directors, Executive
Managers of Victory Fund Committee and Regional Managers of Victory Fund
Committee.
Publicity Kit -
A publicity kit containing local promotions for county chairmen and for
general use in the field, will be mailed from Chicago on March 29. In
addition to county chairmen, 10 copies of each kit will go to Federal
Reserve Bank, Publicity Directors and 1 each will go to Federal Reserve
Bank Presidents, Executive Managers of the Victory Fund Committee and
Regional Managers, Victory Fund Committee.
Press Book
Three issues of a syndicated press book containing over-all publicity on
the Drive are to be sent direct to daily and weekly newspapers, together
with mat's and stereos.
ADV 7
309
UNITED STATES TREASURY WAR FINANCE COMMITTEE
BULLETIN
March 26, 1943
Publicity Directors, War Finance Committee:
We are getting a number of requests here in Washington to produce Hollywood
talent for the Drive. This is understandable, of course, because the policy we
discussed at our meeting has not had a chance to percolate into the field.
So that there may be no misunderstanding and so that our organization here may
not be snowed under and our field people disappointed, it seems necessary for you
to advise all of your field people concerned with local promotion of our policy.
Here is a statement you may use, if you wish, to be supplemented or amplified
in any way you see fit.
Hollywood Talent
For the April War Loan Drive we have decided not to call on the
services of Hollywood stars.
There are several reasons for this. First, these people have been
most generous to us in the past. Second, they are currently doing
a tremendous job for the Red Cross which will end shortly before our drive
begins, and they will be pretty well worn down with extra appearances.
Third, we will be having more drives later, and we will need the stars
badly. By letting them off for this one, and letting them know we are
doing it, we will get a better and more enthusiastic response next time.
Beyond all this, Hollywood talent, while always effective, is probably less suitable to this drive because of our theme. We want to relate all
our promotion to the fighting war, the forthcoming offensives, and a comparison of the sacrifices of the armed forces with what we are asking
civilians to do.
We ask you, therefore, not to plan promotions around Hollywood stars
which Washington must provide. Our promotional people in Washington have
already made a statement to the Hollywood Victory Committee as to our
policy. For our own future benefit, we must help them to keep faith.
Therefore, for this drive, please do not ask us to ask Washington
to bring Hollywood talent to your community. If a Hollywood star is in
your city and you arrange with him or her to do a job for you while
there, contact this office, and we will try to clear. Please do not
contact Hollywood direct.
(Signed) District Director of Publicity
All of us here will appreciate sincerely your cooperation in channeling this
matter through your office.
Stuart Peabody
Head Advertising Specialist
<
310
MAR 26 1943
Dear Dr. Day:
I feel I should advise you that I greatly
appreciate your courtesy and cooperation in
making Dr. William I. Myers available for special
work with the Treasury Department. Dr. Myers has
been very valuable to the Department as a Consultant
on the problems which have arisen incident to the
formation of a War Savings program for farmers.
He has a philosophy and a sales approach to this
group that will do much to assist in the financing
of the war and in protecting the economic interests
of the farmers themselves.
I am hopeful that Dr. Myers will be able to
continue his efforts. I am very anxious to see
the farm program completely launched under his
supervision.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Dr. E. E. Day,
President,
Cornell University,
Ithaca, New York.
Copy in Diary
RWC/mbb/fns
File direct to Graves's
office
311
MAR 26 1943
My dear Mr. President:
I have the honor to transmit to you a copy of the
mental Fiscal Relations. This is the Committee which I
appointed in 1941 following your suggestion that we investigate the growing problem of Pederal-State-local
Report submitted to me by the Committee on Intergovern-
fiscal relations in the United States.
The project was financed by special funds provided
for that purpose by the Congress. The Institute of
Public Administration provided funds for such parts of
the work as could not appropriately be financed from
Federal funds.
I believe the Report makes an important contribution
to the problem of Federal-State-local fiscal relations in
the United States and brings together a body of current
information which will be helpful to those who are deeling
with this problem.
It is the view of the Committee that the answer to the
problem of intergovernmental fiscal relations will be found
in coordination and cooperation rather than subordination
and ocereion. To this and it recommends the creation of a
:
Federal-state-Fiscal Authority composed of three members,
one to be appointed by you, one to be designated by the
States, and the third to be selected by these two members.
I as attaching a memorandum which summarizes the recommenda-
tions of the Committee.
I as advised that the Chairmen of the Senate Finance
Consittee and the House Ways and Means Committee have ap-
proved publication of the Report as a Congressional Document.
Release of the Report to the Press is scheduled for March 31,
1943.
Faithfully yours,
The President,
R.TMWHWhate House.
(Signed) H. Mergenthan, Jr.
Copy in Diary
Copies direct to Blough's office
By Mess. Sturgis 5:33 3/26/43
(6 volumes)
312
MEMORANDUM FOR THE PRESIDENT:
Report of the Committee on Intergovernmental
Fiscal Relations
The Committee on Intergovernmentsl Fiscal Re-
lations, which I appointed in 1941 to examine the
problem of Federal-State-local fiscal relations in
the United States, has submitted its Report. The
Committee consisted of Dr. Luther M. Gulick, Director
of the Institute of Public Administration, Dr. Harold
M. Groves, Professor of Economics at the University
of Wisconsin and a former member of the Wisconsin Tax
Commission, and Dr. Mabel Newsomer, Professor of Economics at Vassar College.
The Committee reports that the area and volume
of overlapping Federal, State, and local taxes continue to increase in spite of the universal recognition that tar conflicts are bad for the taxpayer, bad
for the governments involved, and bad for the Federal
system of government itself. It expresses the view
that the answer to the problem of intergovernmental
fiscal relations will not be found in a grand formula
which endeavore to solve the problem for all time or
even for a decade, because there can be no final solution for a continually shifting problem. The Committee takes the view that the answer will be found in
coordination and cooperation rather than subordination
and coercion. The problem calls for a high degree of
genuine mutuality, and the States must be assured that
intergovernmental cooperation will not take the form
of Federal domination.
In the opinion of the Committee, a solution to
the problem of intergovernmental fiscal relations
must satisfy three conditions:
313
2
-
(1) It must be a truly cooperative effort,
willingly joined in by both the Federal Government and the States:
(2) It must utilize legislative and
administrative, not constitutional channels,
in order to permit continual adaptation to
changing needs; and
(3) It must utilize channels which are
permanent, not temporary; governmental, not
private; and impartial and expert, not partisan.
Major Recommendation of the Report
To satisfy these requirements, the Committee proposes that the Congress, with the active support of the
States, create a joint Federal-State Fiscal Authority.
The Authority would administer no taxes and would dietate no decisions to either the Federal Government or
the States. It would be a continuous, official advisory
and negotiating body, qualified to make impartial suggestions on matters of conflicting taxation and joint
fiscal policy to the Congress, to the Executive, and
to the Governors, tax officials and legislators of the
States. The Authority would express advisory opinions
on proposals for intergovernmental fiscal coordination
and from time to time would be required to make recommendation for the solution of specific problems. The
Authority would develop a program for dealing systematioally with local taxation of Federal properties and
State taxation of Federal transactions. It would gather
and disseminate information on intergovernmental fiscal
relations, conduct necessary research, and facilitate
the improvement of public financial reporting by governmental units.
The Committee suggests that the Authority be composed of three full-time members, one to be appointed
by the President, one to be designated by the States,
and the third to be selected by these two members. The
State member would be selected by a conference of delegates named for that purpose by the Governors. The
Committee suggests that the Authority be assisted by an
advisory council representing Congressional Committees
and recognized organizations of States, local, and
Federal officials.
314
3The Committee proposes that an initial annual budget
of approximately 150,000 to $200,000 be authorized; that
half of this fund be appropriated by the Federal Government without any contingent (matching) requirements; and
that the other half be raised from State legislatures
foresees that the process of providing State financial
support will involve delay and uncertainty, and proposes
that the Federal share be sufficient to enable the Authority
through the Governors and their delegates. The Committee
to make a showing.
The Committee recognizes that the idea of & joint
Federal-State agency is not new or original. The areation of such an agency has been widely endorsed. The
Committee takes the view that the creation of an Authority
would provide the stimulus necessary to get coordination
actively under way.
Other Subjects Covered by the Report
The Report of the Committee examines a wide variety
of problems within the general field of Federal-State-
local fiscal relations. In some cases it makes specific
recommendations for the elimination of conflicts: in
others, it confines itself to suggesting possible methods
of approach.
The Report considers in detail the coordination of
Federal and State taxes in the fields of income, death,
tobacco, liquor, automotive, sales, business, stocktransfer, and payroll taxation. In connection with
several of these taxes, it stresses the need for FederalState cooperation in tax administration as one means of
achieving coordination. In the area of tax immunities,
it discusses payments in lieu of taxes, State and local
taxation of government contracts, and tax-exempt securities.
In addition, the Report examines (1) the need for
independent sources of local revenue, (2) the reallocation
of functions among layers of government, (3) the need for
Federal participation in the financing of public education,
(4) the means of removing interstate trade barriers and of
improving the coordination of other interstate relations,
and (5) the cost of tax administration and taxpayers'
complience.
315
MAR 26 1943
Dear Admiral Jacoba:
I have received your memorandum of March 24th,
with which you sent me a resume of the qualifications
of some of your physically disqualified naval officers.
This furnishes me excellent material for consideration
for appointments to positions in the Treasury.
I thank you for your cooperation in this matter
and assure you of my sincere appreciation.
Sincerely,
(Signed) H. Mergenthan, Jr.
Secretary of the Treasury.
Rear Admiral Randall Jacobs, U. S. N.,
Bureau of Naval Personnel,
Navy Department,
Washington, D. c.
Envelope marked "Personal and
Confidential"
Photo File in Diary
Orig. file and material to Thompson
WNT:cf
3-26-43
of
NEW
this
D.C.
NAVY DEPARTMENT
BUREAU OF NAVAL PERSONNEL
WASHINGTON, D.C.
SONAL
March 24, 1943
FIDENTIAL
MEMORANDU FOR
THE SECRTARY OF THE TREASURY.
In pursuance of our recent conversation
concerning physically disqualified Naval Officers I am
sending herewith a short resume' of the qualifications
of several of these officers.
As you can appreciate I cannot vouch for
the complete accuracy of this information but feel that
it is in general true. Certain parts of this information
are confidential and I would appreciate your so consider-
ing all of it.
I hope that the information furnished
will be of use and that you will be able to obtain the
services of some of these men. In case you desire further
transcripts I would be glad to furnish them.
and
Very respectfully yours,
LV
100me
317
MEMORANDUM FOR THE SECRETARY.
March 26, 1943.
Mail Report
So far as new subject matter was concerned, mail
of this past week struck the doldrums, although the
receipts were quite heavy. About the only new suggestion
that emerged was that the Treasury is missing a source
of revenue by not taxing houseboats. Night clubs and
the excessive spending of war wages were mentioned as
"leaks" both from the point of view of taxes and Bond
sales, but there were few other comments on possible
means of raising revenue.
There were only 60 discussions on the pay-as-you-go
tax schedule, 15 endorsing the Ruml Plan, 21 opposing
forgiveness of taxes, and many offering plans of their
own.
:
The CIO-sponsored campaign from Minneapolis and
Akron straggled out with a few final postal cards.
However, 16 such cards opposing the Victory Tax and
the Ruml Plan, and endorsing the Robertson Plan, indicated the opening of a new drive in New York City.
Supporters of the proposed 20% withholding tax
greatly outnumbered those opposing it. The Sales Tax
also reappeared with a number of votes in favor. There
was a great reduction in the number of inquiries and
suggestions on income tax collection. One writer, in
favor of the present plan of payment, suggested stag-
gering of dates for filing returns in order to avoid
congestion on March 15. A number asked simplification
of one sort or another, and there were several comments
on difficulties in connection with Tax Anticipation
Certificates. Decrease in the worth of A gasoline
coupons called for more protest against the Car Use
Stamps.
318
-2Memorandum for the Secretary.
March 26, 1943.
On the Bond front, replies from radio stations
continue to give assurance of full cooperation on
April 12. There were, however, more complaints than
usual in regard to the use of telegrams, and the request for free time.
For the first time in some weeks there have been
inquiries as to civilian Bonds, money for which would
not go to War purposes. Also, there was a flare up
of the rumor that Bonds now being sold would not be
redeemed; the correspondents usually asking newspaper
reassurance on the subject. At least two-thirds of
the 65 complaints about delayed delivery of Bonds came
from war Department personnel. Seven postal cards,
almost identical, requested investigation of delays at
the U. S. Rubber Company of Detroit.
Letters from banks opposing establishment of
Federal Agricultural Agencies came from other areas
beside the West Coast States, but these letters still
appear to be part of an organized drive.
There were several strong denunciations of Eddie
Rickenbacker from labor organizations or Union members.
Pleas for Government economy or control of inflation
appeared occasionally in the general mail.
319
General Comments
R. R. Wright, Jr., Bishop of The African Methodist
Episcopal Church, Wilberforce, Ohio, sends copy of
letter he has written to Congressman Kerr. # # Will
you permit me to say a word in behalf of Dr. Pickens,
whom I have known for quite forty years? # * # I have
known him as an intelligent, dynamic, liberty-loving,
self-sacrificing, outspoken American patriot, whose
patience, sanity, and optimism far surpass most people
of my acquaintance. I believe if America were made up
of people half as American as William Pickens, there
would be an America wherein the "Four Freedoms" would
today be the possession of all its citizens. 4 # Dr.
Pickens is not a member of my church, does not belong
to the political party I follow, does not belong to my
fraternity, or lodge, and has more than once seriously
disagreed with me in the press and on the public platform;
but I have never questioned his Americanism. I shall
gladly come to Washington at my own expense of both time
and money to testify that Dr. Pickens IS NOT A COMMUNIST;
HE IS NOT UNAMERICAN; AND IS THE HIGHEST TYPE OF AMERICAN
I KNOW.
Emmett R. Koehler, Lemay, Mo. I noticed in the St. Louis
Post Dispatch an article stating that the Treasury was
going to launch a big drive this coming month to raise
at least $13,000,000,000. I am enclosing a poem that
will do the trick.
Joseph M. Grossman, Treasurer, Chesed Shel Ames, Asbury
Park, N.J. At a meeting of the Chesed Shel Ames, Hebrew
Burial Society of Asbury Park, a motion was passed to
give to the United States Government $100 to help buy a
bomber. Our organization has purchased Bonds, so has
every member of our organization, but we wanted to do
still a little more; so please accept this small gift in
our name.
320
-2D. B. Plum, President and Publisher, The Record
Newspapers, Troy, New York. I am in receipt this morning of an Associated Press article regarding the meet-
ing of a group of editors and publishers at your office
in the Treasury Building on Saturday morning, March 20,
I want to take
in regard to the coming Bond drive.
this opportunity to ask you to use your influence with
the Government, or perhaps I should say, with many of
the Government officials, to stop abusing the newspapers
and hampering them. Mr. Ickes, for instance, is a
shining example of the attitude of the Administration
towards the newspapers. Another point is the 10% reduction in newsprint paper that has been forced upon the
newspapers. If my understanding of the true situation
is correct, there is no shortage of newsprint paper whatever, and there is none likely to be. The Government
itself through the various bureaus wastes more paper,
in my opinion, than this 10% reduction in newsprint will
save. Just about 99% of the stuff that is sent out by
these Bureaus to the newspapers throughout the country
never gets much further than the wastebasket. I think
if you, with your tremendous influence, would use that
influence with the Government to adopt a more friendly
attitude towards the newspapers, you would find that
you could accomplish a great deal.
321
3Favorable Comments on Bonds
B. T. Whitmire, Manager, Radio Station WFBC, Greenville,
S.C. We cannot answer your telegram instanta. It re-
quires some thought. Our Bond Sales Chairman, Ellis M.
Johnston, has been doing a whale of a job. Greenville
has never yet fallen below a monthly quota, and this is
due just about entirely to Mr. Johnston's work. Frankly,
I do not know when he sleeps. We work closely with him.
We scheduled a remote pick-up from the Japanese Sub-
marine today and had the broadcast under the difficulty
of constant and heavy rain. But Mr. Johnston's personal
suffering because of the rain was intense. His hopes
were built to heaven on selling a Gargantuan total of
Stamps and Bonds, and then Heaven rained on him and
messed up the whole detail. Many hundreds saw the sub,
but with fair weather and the build up that had been given
the event, the crowds could have been counted in the many
thousands.
Herbert E. Wrinkle, Superintendent, Oklahoma City Public
Schools, Oklahoma City. I hasten to express our very
deep appreciation for the contributions of the Treasury
Department through Mr. A. D. Zanzig, and Miss Nancy
Larrick, assistant to Dr. Homer Anderson, to the Music
Educators' Wartime Institute recently held in Oklahoma
City. Dr. Anderson's assistant arranged a very helpful
conference on War Savings in the School Curriculum, and
you would have been thrilled to have observed the beauti-
ful demonstration of unity, loyalty, and patriotism as
Mr. Zanzig conducted a Community Victory Sing in which
approximately 1,200 robed students and 6,000 local citizens enthusiastically participated.
322
-4Unfavorable Comments on Bonds
Mrs. William Pfister, Hamilton, Ohio. My son is in the
U. S. Army and is stationed somewhere in French Northwest
Africa. Before going to Africa he was stationed in
Northern Ireland, and while there he made arrangements
to have an $18.75 War Savings Bond taken out of his pay
each month, to be sent home to me. He writes that a
Bond was taken out of his August pay and another taken
out of his September pay. After that he says they
started on their way to Africa and they were told then
no more Bonds would be taken out. So he asks me in every
letter he writes if we have received those two Bonds,
which we never have. It seems to me I have waited a
reasonable length of time to get these Bonds, so now
I am writing you and asking you if you can have this
looked into. I feel that if he were willing enough to
buy these Bonds, he should at least get them. He sends
home now a $30.00 allotment check that we receive each
month. # # *
John Marmon, President, Local #101, United Rubber Workers
of America, Detroit, Mich. We are taking the liberty of
laying before you a complaint against the United States
Rubber Company, Detroit plant, concerning that Company's
procedure in purchasing War Bonds for its employees from
payroll deductions. This procedure threatens the whole
payroll deduction plan at a plant employing seven thousand
workers -- and, whatever the Company's intentions may be,
amounts to sabotage of the war effort. The Company per-
sists in delivering Bonds to workers from two to four
months after the worker has paid for the Bond. In October,
our Local Union complained about this delay. We were
assured by the Company, and by a representative of the
Treasury Department that the Company would discontinue
the practice of sending Bond purchase money to the Company's New York office, since the Company claimed that
this was the reason for the delay. Workers are still receiving their Bonds - when they get them at all - with a
New York postmark on the envelope - and two to four months
late. Furthermore, the Bonds themselves are often dated
323
-5two months after the worker has completed his purchase.
Thus, the worker is deprived of his interest for this
period - and presumably the Company has had the use of
the worker's money. You can understand the growing
suspicion and annoyance of men who are making a real
sacrifice to buy Bonds. The workers would rather
purchase their Bonds themselves. Any movie theater will
make out a Bond while the purchaser waits. The Union
leadership, of course, feels that the deduction plan is
to be preferred if the Company will cooperate. We are,
therefore, requesting you to take such steps as are nec-
essary to make the U. S. Rubber Company conduct this
business of Bond purchasing in a manner consistent with
our national emergency.
George and Bertha Otis, Laurel Springs, N.J. We changed
our address last October, at which time I notified the
Camden Post Office, also New York Ship Yard, but our
Bonds still go to our address in Camden. I also wrote
to the Bank in Philadelphia (Federal Reserve), all to no
avail. A Bond was sent again to us, dated March 6.
I just got it today, it again had gone to the Camden
address. Now I am writing you in hopes that our future
Bonds will come to the proper place. I have done all
I can here, so am hoping perhaps you can see that the
proper address will be on our future Bonds.
Pfc. Jack F. Hickson, Seymour Johnson Field, N. C.
Some time back I wrote to you in regard to six Bonds,
which were on the payroll deduction class, and you referred me to the War Bond Division, which I did. Now
while at Walter Reed Hospital they telephoned me, got my
serial number -- that was last December. So I have
written five letters since then, asking if there were
anything that I would have to do to receive them, or
even a receipt. Why I am so anxious to have something
to show, I have no beneficiary and would not know the
outcome of them, so that is the reason, once more. I am
taking the liberty to write your office. It is like
-6I
324
told you in my first letter -- we were instructed to
write to your office as soon as we returned to the States,
so kindly let me know what I have to do in order to receive them, and thanking you kindly in advance and oblige.
Abraham Kantor, Feuer & Kantor, Counselors at Law, N.Y.C.
I write concerning a matter which I think should receive
the direct attention of your office. Under date of
October 17, 1942, we had forwarded to the Treasury Department, Division of Loans and Currency, Washington, D. C.,
Defense Savings Bond No. D189145E, registered in the name
of Thomas Rogin, in the face amount of $500.00, together
with a certificate of the Clerk of the Surrogate's Court,
State of New York, Bronx County, certifying to the
issuance of letters of administration upon the estate
of the said Thomas Rogin to Emily R. Oxhangler, etc.,
etc., (other documents). # # January 27, 1943, we again
wrote the Department, advising that the re-issued Bond
had not been received, and asked whether that was due to
oversight or to the delay ordinarily accompanying such
transactions.
February 6, 1943, the Division of
Loans and Currency in Chicago wrote to us advising that
the "evidence submitted is in order", but also added
that a new request for re-issuance and additional proofs
would be required because it was not clear whether dis#
tributees of the estate were involved. We replied stat-
ing that a new request and assurances other than those
already submitted were not required as an Administratrix
had the power to sell, transfer or otherwise dispose of
property in the course of the administration of the
estate, and that in this instance a full accounting had
been rendered in the Surrogate's Court to the parties
interested. * # In reply, the Chicago office wrote
that an administrator of a decedent's estate desiring to
have a Bond re-issued in his own name before final distribution required submission of the proof which had
been heretofore referred to and again therein restated.
At the same time the writer of that letter returned the
executed request for re-issuance which we had forwarded
to the Department with a penned notation thereon "cancelled".
I feel that it is entirely outside of the province or
authority of anyone to take it upon himself to cancel or
325
-7 in any other way mutilate or destroy an executed
instrument. I am sure you will readily appreciate that
such action might have adversely affected the rights
and interests of parties concerned, and I feel that your
office should see to it that there is no repetition of
such an incident. I also feel that the instruments
which we had forwarded to the Department were sufficient
upon which re-issuance of the Bond should have been made.
Be assured that I regard exceedingly any inconvenience
which you may be caused, and write this to you solely in
the interest of the protection of the rights of persons
dealing with your Department, and in the interest of the
efficient conduct of ordinary business affairs.
Mrs. T. E. Knowles, South River, N. J. # # My husband,
through Raritan Arsenal, has been paying for War Bonds
since last May 15th, and up to the present date I have
received only one. He started paying $1.25 a week continuously until October 21, when he increased it to
$3.75 a week. I think, and I know you'll agree with me,
that we have paid for more than one Bond, and that one
Bond was dated January, 1943. You can see why I'm so
puzzled. I'd be ever so grateful if you could answer
my letter and let me know when I'm getting the back
Bonds, and why it took so long for them to come through.
Thank you for your trouble.
W. I. Griffith, Director of Radio, WOI, Iowa State College,
Ames, Iowa. We have received a 210-word telegraph message over your signature announcing the second War Bond
drive, effective April 12. You may count on this radio
station to use all possible publicity on April 12, and
in the countless days that follow, because we realize
the seriousness of the situation, and the necessity for
stimulating the sales of War Bonds. We note that this
beginning date is more than three weeks away, and wish
to protest the use of telegraph facilities in sending
material that could be sent by mail. We understand
that there is a shortage of telegraph and telephone
facilities, and have refrained from sending all messages
ourselves, and we are very sure that the Government must
-9Information. At that time it was impressed upon us that
we were not to broadcast any announcements or programs
for Governmental Agencies unless cleared through the
Office of War Information, and that they were to be the
body allocating the number of these messages to be given
each individual agency, as well as the subject matter
of the announcements or programs. Therefore, we ask that
you kindly take this up with the Office of War Information,
and if they wish to allocate the 12 announcements and
fifteen-minute program on that date to this effort, we
will be glad to cooperate.
Phillip Bonosky, McKeesport, Pa. I was very much
shocked to hear that you were featuring the appeal of
Eddie Rickenbacker -- a man so thoroughly detested among
the workers in this area that almost any appeal coming
from him would be received with suspicion and disgust.
Eddie Rickenbacker, as you must certainly know by now,
is touring the country spreading vicious anti-labor,
National Association of Manufacturers backed propaganda.
He was exposed by the LaFollette Committee as the em-
ployer of stool-pigeons and labor spies in the effort
to break the Union in the corporation of which he is
the head. * He has made speeches in the past glorifying Hitler's methods. I ask that this man's voice be
taken off any records that might be construed as having
the backing of any Governmental Agency. Anything less
would be an insult to those hard-working people who have
given so much of their wages toward the purchase of War
Bonds which will win this democratic war.
J. E. Chiles, Azle, Texas. I am employed on a U. S.
project as a Guard. Last July 7, 1942, I signed the
order for a 10% of my salary, which was then $100 per
month, to be deducted for War Bonds, with the understanding that when I paid in enough for a $25 Bond, it
would be mailed to me here at my present address. They
deducted the $10 per month until about a month ago, and
I had them to cancel it because I have more than four
Bonds paid for, and I can't hear anything about them,
and I have not received a single Bond. My checks are
from Denison, where I am employed. All the other employees get their Bonds just the time when they are
327
- 10 paid out. The other Guards have not received any Bonds
either. I can't understand why they could not give us
our Bonds, as well as anyone else, when we get them
paid for. No one seems to know anything about them, or
tell us what to do, so I am writing this to you. If you
can give me any information, or send the Bonds, if the
money has been sent in to you, it would be appreciated.
* # # I would not have cancelled the Bonds had I received
them as they promised I would.
Mrs. Hiram Bernard, R.D. 2, Gap, Pa. Could you give me
any information on soldiers overseas as my son has been
buying Bonds since September, and we haven't received
any word from them, and he keeps asking if we've received them. Please send information to Mrs. Hiram
Bernard, R.D. 2, Gap, Pa. In other words, should we
have a paper to hold to show he has bought Bonds? The
boy is in Australia somewhere, and started to buy Bonds
September 1, 1942. Thank you.
S. 0. Ward, Manager, Radio Station WIAK, Lakeland, Fla.
* Of course you can count upon 100% cooperation from
this station in any drive that our Government may deem
wise to put on in our war effort. Every request that
you may make to assure the success of this drive will be
carefully carried out by WLAK; however, I would like to
point out to you just how galling it is for a radio
station to receive a 215-word telegram sent to us at the
expense of the taxpayer, requesting us to give free time
and, in addition, ask us to reply at the taxpayers'
expense, thus giving Postal Telegraph or Western Union
two sources of revenue, concerning something that we are
going to give the Government at our own expense. We re-
ceive no tax exemptions, no small fees of any kind to
take care of the increased overhead necessary to take
care of this service and, in addition, we receive no
consideration for this service from the draft boards.
For example, for the last two weeks, we have remained on
the air our normal operating schedule of 17 hours a day
with only one engineer because the previous week the
draft board took two of our three engineers and refused
328
329
- 11 -
to give us any additional time to secure replacements.
There's lots of talk that this situation will be remedied,
and even orders have gone out from the National Selective
Service Board instructing local boards to defer certain
men essential to the operation of radio stations; however,
all of the se orders leave the deferment up to the local
board, and to date, I have never seen a local board
grant any deferment. # In order that this letter may
not be misunderstood, I wish to state again that every
request made from our Government for free radio time will
be granted, regardless of the additional hours of work
imposed upon our staff, and in spite of the fact that
much of the work publicizing various phases of the war
effort is also published through the local newspaper with
paid Government advertisements.
N. W. Hopkins, Manager, WJBK War Programs, Detroit, Mich.
From your statement that the plan has been worked
out with the aid of the Office of War Information, we
assume that we shall be receiving our priorities alloca-
tion from that office. If we do, we shall of course
carry the material in conformity with our agreement with
that office, although we feel very strongly that a daylong harangue in behalf of any single cause will do that
cause more harm than good. We say this, realizing we
lay ourselves open to the reminder that our views in the
matter have not been asked. * # # There is reason to believe that the balanced diet of Government-sponsored
material broadcast under the OWI plan has been doing a
far more effective job for all the agencies concerned
than was ever accomplished by the catch-as-catch-can
methods formerly in vogue. The job confronting each
of these agencies is one of straight selling. Yet those
entrusted with this selling, in several of the agencies,
have apparently let their enthusiasm for the job blind
them to the most elementary rules of salesmanship.
We do not think that overplugging will do any more to sell
War Bonds than it would to sell aspirin or soap. If the
people responsible for this plan to monopolize the air
for one day would ask themselves how they would react to
precisely the same tactics on the part of some effort less
330
- 12 deserving than their own appears to them, we believe
the War Bond program would benefit greatly thereby.
We think our position is sound, for though we
are a low-powered station, only 250 watts, we have sold
nearly a million dollars' worth of War Bonds over our
own counter in less than ten months. This record has
been accomplished, not by wearing our listeners down
simply with tedious repetition, but by carefully organized appeals to our foreign language groups.
Joseph Bilik, Jr., Recording Secretary, Local #130,
United Automobile, Aircraft, Agricultural Implement
Workers of America, Bristol, Pa. The Executive Committee of Local #130-UAW-CIO have made a survey on the
purchase of War Bonds in our Plant, Fleetwings, Inc.,
and we find the situation is very grave. The people
are getting very disgusted and tired of the way Fleetwings has been handling the Bond situation. A great
number of people have discontinued buying their Bonds,
and a larger amount are now contemplating on discontinu-
ing. # The people in charge of this department
employed by Fleetwings, in our estimation, are not
capable, are inefficient, and are not doing their job
# We have formulated plans
the way they should.
to increase the purchase of Bonds, but we cannot start
same until we are assured of prompt delivery of Bonds,
and also capable handling of such matters.
#
331
- 13 Favorable Comments on Taxation
J. E. Banyai, Baldwin, L.I., New York. Several days
ago I read that President Roosevelt at his press con-
ference expressed his opposition to the Ruml Pay-AsYou-Go Plan because it favored the "higher brackets"
at the expense of the little man. # # * Now it seems
there is a concerted drive on to have people send requests by telegram and letter to their Congressmen
urging them to vote for the Ruml Plan, and I would
therefore appreciate it if you would forward me some
data to illustrate the point made by the President.
I am an ardent admirer of Mr. Roosevelt and respect and
have confidence in his great ability, and his regard
for the ultimate good of the majority and the welfare
of our grand and glorious country, and while I am in
favor of the pay-as-you-go form of taxation, certainly
not in the form which would affect the average man to a
greater extent than it would people in high-salaried
groups.
Maurice Alton, The Whitman, Jamaica, L.I., New York,
sends copy of letter he addressed to Chairman Doughton,
House Ways & Means Committee. I listened very attentively
to Mr. Beardsley Ruml's Plan last night over the radio,
and I must say that I was greatly impressed by what he
said, and I cannot for the life of me understand why,
his plan, which seems so simple and practical, is not
gladly adopted by your Committee. # * Assuming that a
few of the rich might benefit to some extent from his
plan, wouldn't that be offset by the millions that would
be helped by the same plan? # * # I think the Ruml Plan
is the only plan for the big majority of taxpayers and
should be adopted and favored both by the Democrats and
Republicans alike, and should not be made a political
football.
332
- 14 Unfavorable Comments on Taxation
Anna F. Hinterleiter, Reading, Pa. On May 28, 1942,
I purchased two U. S. Treasury Tax Notes, in the amount
of $100 each, which are inscribed "Anna F. Hinterleiter".
Since that date I was married and the Collector of
Internal Revenue in Philadelphia refuses to accept
these Notes inasmuch as the name has been changed.
On March 6, 1943, I wrote to the Federal Reserve Bank
of Philadelphia for information as to how I could use
these Notes and not lose the accrued interest. They
replied that at the present time they have not been
authorized to reissue Tax Notes because a name has been
changed by marriage.
* On March 9, I wrote the
Collector in Philadelphia, but up to this time I have
not received a reply. In order to avoid penalty on my
tax for the year 1942, I filed the Joint Return for my
husband and myself and sent my check for the first payment. Inasmuch as I will need these notes to pay the
next installment, I would appreciate it very much if
you will advise me how I will be enabled to make use
of these Notes without losing the accrued interest on
same.
Harvey B. Mann, Pittsburgh, Pa. I would like to buy
War Bonds, but how can I when there is no way of know-
ing what my taxes will be? # * The delay and chaos
in tax legislation is a disgrace.
L. R. Peck, President, The First National Bank, Bell-
flower, Calif. # # # I happen to be the President of
this Bank and I have seen it through one depression,
1929 to 1932, inclusive, and I hope to be able during
the next secession or depression, that in my opinion
is sure to occur within eighteen months to two years
after peace is declared, to be able to pilot this bank
and see that it is in a position at all times to meet
its deposit liability to its customers. In order
to do this, however, I must continue to add to our
capital structure, increase the investment in the bank,
333
- 15 -
and maintain, insofar as possible, the one to ten ratio
of capital structure as of deposits that we are expected
to maintain by the instruction of the Comptroller of
the Currency. # # After paying taxes it will leave
us for our individual efforts the sum of $11,808.56.
Therefore, you can see that we are called upon to pay
to the United States, and to the State of California,
approximately 75% of our net. * * In order to fulfill our written promise to the Comptroller of the
Currency we will be forced during the year 1943 to
again assert ourselves to make a net in order that we
may pay the above 1942 taxes to the United States, and
the State of California, and when we accomplish this,
and in the event this is all we can make, we will then
be called upon during the year 1944 to duplicate the
operation in order that we may pay our 1943 taxes to the
United States, and the State of California. * # # If my
memory is correct, as I remember the history of the
United States, it was excessive taxes assessed to the
colonies that originally caused the Revolutionary War,
and eventually created the United States and the
Constitution of the United States. We now are endeavor-
ing to maintain the Constitution of the United States
by defending ourselves in the present war, but Sir, we
must not forget that in so doing, we may by excessive
taxation defeat the purposes that we are now fighting
for. # I wish to maintain my enthusiasm in business
but Sir, I feel, "What is the use; why continue to exert
myself, working from 8 to 15 hours a day to show a financial residue at the end of each year, and then see that
residue dissipated by taxation?
*
William Waters, N.Y.C. Why is there so much controversy
about the Ruml Plan -- is it because some New Dealers
did not think of it first, or is it too businesslike for
the New Dealers to grasp? This plan would be of most
benefit to the middle and poor clases who have to pay
taxes, whereas your plan benefits the rich, as they
would be the only ones able to pay two years' taxes in
one, thereby getting a 6% discount, whereby the poor man
would be unable to do likewise. It would benefit you
New Dealers, as most of you all are rich men, whereas
the Ruml Plan would benefit the small man most.
334
- 16 -
J. Rothberg, Petroleum Service, Inc., Detroit, Mich.
This is the first time in my life that I have written
to a public official as an adviser. It has always
been the other way around. I am what would be called
a "small businessman". My income tax for 1942 is
approximately $10,000. Without going into debt, it
would be very difficult for me to pay my 1942 income
tax and "pay as I go" for 1943. I have no desire to
save my 1942 tax through a Ruml Plan or any other scheme
so long as our boys are facing death on the battlefields.
I want to pay my 1942 taxes. I believe that my financial problem is the same as that of hundreds of thousands of other citizens and I have worked out a so-called
plan that would work for me, and I believe there is
reasonable ground for feeling that it would work out
for many thousands. (Outlines plan in detail.)
I think it would
C. J. Hahn, Holdenville, Okla.
be of advantage for the Treasury to make an order
permitting persons to report income taxes, who have not
filed a report up to March 15, 1943, for 1942 taxes,
without any penalty whatsoever; provided, such report
is filed on or before June 30, 1943, and give this wide
publicity. # * # I believe there are hundreds if not
thousands, in this County, especially farmers, who should
have filed reports; and I have information that some are
just now learning they should have filed a report. And
if it is true in this County, it no doubt may be true
in all Counties; and some of them are alarmed and fear
they may have to go to jail or pay a big penalty.
335
BRITISH AIR COMMISSION
1785 MASSACHUSETTS AVENUE
WASHINGTON, D. C.
TELEPHONE HOBART 9000
PLEASE QUOTE
REFERENCE NO.
with the compliments of British Air Commission
who enclose Statement No. 77 - Aircraft Despatched
- for week ended March 16, 1943.
The Honourable Henry Morgenthau, Jr.
Secretary of the Treasury
WASHINGTON, D. C.
March 26, 1943.
MOST SECRET
336
STATEMENT NO. 77
Aircraft Despatched from the United
States week ended March 16th, 1943
DESTINATION
TYPE
ASSEMBLY
POINT
BY Flight Del'd
BY
SEA
a AIR use in Canada
CURTISS
Kittyhawk
Middle East
Port Sudan
U.K.
U.K.
50
BREWSTER
Bermuda
8
BEECHCRAFT
Middle East
en route
U.K.
U.K.
Gander en route
Canada en route
U.K.
Bermuda en route
U.K.
U.K.
Canada en route
(a)
(b)
India
India
Beechcraft
6
CONSOLIDATED
Liberator GRV
"
Catagina 1B
1
2
2
DOUGLAS
If
Dakota 1
3
U.K.
1
Boston IIIA
en route
India
Middle East
Middle East
Canada
Canada
1
1
2
FAIRCHILD
Cornell PT 26
GLENN MARTIN
Baltimore IIIA
Middle East
IVA
Middle East
14
28
.
.
LOCKHEED
Hudson VI
U.K.
Gander on route
2
N. AMERICA
Mitchell I
Bahamas
Nassau
1
WACO
Waco Gliders
U.K.
TOTALS
A Exported week ended February 9
B Exported week ended March 9
Movements Division,
Bilitish Air Commission,
March 20th, 1943.
U.K.
4
68
58
12
337
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE
TO
Secretary Morgenthau
FROM
Randolph Paul
You will be interested to hear that after
several months of negotiations with the Swiss and
the Japanese, this Government has finally been
permitted by the Japanese to make $25,000 available
for the purchase of food, clothing, and medical
supplies for the relief of Americans interned in
the Philippines. The Swiss Minister at Tokyo
advised that the Japanese Foreign Office was
willing to accede to a proposal that $25,000 be
remitted through the Swiss in Tokyo to the Chief
of the Santo Tomas Internment Camp, who, in turn,
would deliver the equivalent against receipt to
the American executive committee of the camp.
The executive committee will then make the
appropriate purchases from supplies reported to
be available in Manila, and the Swiss will
endeavor to obtain receipts and bills covering
such purchases. An appropriate Treasury license
was issued to the American Red Cross for the
transfer of this amount to Switzerland.
If the foregoing arrangements are
successful, it is understood that the possibilities
will be explored of remitting further funds to
American nationals held at Baguio and elsewhere
in the Philippines.
338
TREASURY DEPARTMENT
C
INTER OFFICE COMMUNICATION
DATE
Secretary Morgenthau
TO
FROM
March 26, 1943
Frances McCathran
CONTROVERSIAL ISSUES BEFORE CONGRESS
1. Tax Legislation - To a House only about one-third full,
Representatives Doughton and Knutson fired the opening
guns on the tax issue in four hours of heated debate. According to the Wall Street Journal this morning these first
few days of discussion will only "set the stage" for the
real battle which will start around next Tuesday when
amendments will probably be suggested to a full House. Only
feature in the final tax bill appearing certain is some form
of withholding tax which is embodied in all the proposals
suggested to date. Urging the House not to vote a "bonus
of blood money" at the expense of men in the service,
Doughton insisted that the new windfall provisions of the
Carlson Bill do not erase the fundamental fact that one
whole year's tax liability would be completely wiped off
the books in these days of "swollen war incomes." Knutson,
however, claimed that the only thing wrong with the Ruml
Plan was that "the Treasury didn't think of it first,'
and said that by putting taxpayers' budgets in order, it would
spur War Bond purchases. Representative Charles L. Gifford
also charged that if the Ruml Plan isn't adopted the taxpayer must at some time pay two years' taxes in one, but
Representative Jere Cooper joined Doughton in favoring the
Ways and Means Committee Plan. To Knutson's charge that
Doughton himself had voted for every tax forgiveness plan
in the Ways and Means Committee except one and had proposed
three cancellation plans himself, Doughton replied, "I
made a few suggestions but the more I looked at them, the
less I liked them." General consensus of opinion at the
moment appears to be that some form of compromise plan for
partial forgiveness will be offered in amendments next
week. Such a plan is the Robertson-Forand proposal, said
to have the endorsement of the C.I.O., another plan to
place an $8,500 ceiling on the Carlson forgiveness feature,
favored by Clare Boothe Luce among others, or a method,
which Representative Anderson says he will suggest, providing
339
(
half a year's forgiveness rather than a full year's.
2. Farm Parity - Second biggest issue before Congress is probably
the problem of farm price ceilings which if raised may cause
a readjustment of industrial wages and thus upset the Administration's whole anti-inflation program. Yesterday
the Administration took two major steps to prevent this in
the President's appointment of Chester C. Davis as War
Food Administrator and in OPA Brown's statement in letters
to Congress that enactment of the Pace and Bankhead Bills
would result in a complete breakdown of the price and wage
stabilization program. These two Administration moves
were interpreted as another indication that the President
will veto both bills if sent to him. Senate debate yesterday
on the Pace Bill (to include farm labor costs in parity)
and a rumored split in the farm bloc itself, in the face of
this Administration firmness, may indicate that Senator
Lucas will succeed in his motion to recommit the Pace measure.
340
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AMDI my a >
COPY NO
NOT TO BE RE-TRANSMITTED
BRITISH MOST SECRET
U.S. SECRET
OPTEL NO.100
Information received up to 7 a.m. 26th March, 1943.
1. NAVAL,
Trio human torpedoes tried to enter MERS EL KLBIR (ORAN)
on 23rd, One was destroyed and no attack developed. On 22nd/23rd Notor
Torpedo-boats attacked 4 ships in the SICILIAN CHAINEL torpodoing ono and
damaging another by gun fire. Between 10th and 17th one of H.M. Submarines
sank a 5,000-ton ship and torpedoed 2 others in the SOUTHERN TYRRIUMIAN SEA.
On 14th one of H.M. Submarines sank a cased petrol ship off PALERMO.
2, MILITARY.
TUNISIA, Eighth Army. 24th. In the MARETH position there
was spasmodic shelling and patrol activity by our forces. South-vest of EL
HAME our armoured forces made some progress while patrol activity was maintained to the West of DJEBEL MELAB (30 miles South-nest of GABES. It is now
known that in the fighting in this area our forces captured or destroyed 57
.guns and 40 heavy machine guns.
U.S. SECOND CORPS. In the attick against U.S. Infantry
positions astride the GABES road on 23rd 20 enemy tanks were destroyed of
which 10 were actually captured. On 24th U.S. forces continued offensive
operations in the MAKNASSY area and destroyed 4 Gernan tanks. 2 further
attacks were made by the enemy. The first was repulsed, no details yet
concerning second,
3. AIR OPERATIONS.
7, nil. 1.
WESTERN FRONT. 24th/25th. Revised enomy casuelties
25th. 6 Whirlwind Bombers successfully attacked the railway
centre at ABBEVILLE,
TUNISIA, 23rd. No reported a total of 980 offensive
sorties were flown, at least 10 tanks were destroyed and others danaged.
good results seen.
23rd/24th. 56 tons there dropped in the MARETH area and
24th. 419 offensive sorties flown. In ZARAT area 78
bombers attacked M.T. and tanks with success, confirmed by our land forces.
In EL HAMMA Hurri-tankbusters and Kittyhawks destroyed at least 10 tanks and
destroyed or damaged over 70 other vehicles. Enemy casualties during all
operations 6, nil, 2. Ours 11, nil, 3.
SICILY AND SOUTHERN ITALY. MESSINA was bombed by U.S.
Liberators on 23rd and 24th. 88 tons in all were dropped and the Naval fuel
tanks and the whole area of the railway yards was set on fire. Mosquitoes
destroyed or damaged 5 locomotives. Enemy casualties 6 destroyed. Ours 4 lost,
BURMA. 22nd. 16 U.S. Mitchells claimed several hits or near
misses on the GOKTEIK VIADUCT. On 23rd warehouses and rolling tock were
destroyed at THAZI JUNCTION 75 miles south of MANDALAY.