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227 SEP 5 1943 My dear Mr. Secretary: This is in reply to your letter of September 9. 1943, attaching airgrem dated July 22, 1943, from the American Embassy at Thungking, reporting that the Executive Yuan of the Chinese Government is now considering a plan for the sending of seven hundred students annually to the United States for a period of five years to be trained as technical personnel, all expenses to be paid by the Chinese Government. The Treasury Department agrees that the carry- ing out of this plan would be of advantage both to China and to the United States. The financial aid agreement entered into March 21, 1942, sets forth the purposes for which the $500 million could be used and the training of Chinese students in the United States clearly appears to be consistent with the purpose to "effect further social and economic measures which promote the welfare of the Chinese people". The Treasury, therefore, has no objection to your indicating to the Chinese authorities that the Treasury Department would agree to a request from the Chinese Ministry of Finance, if such a request were made, that the sum of $20 million be earmarked from the $500 million financial aid to China for the purpose of financing this project. There are still sufficient sums in the $500 million financial aid that have not been utilised or earmarked for other purposes to permit the setting aside of $20 million for this project. Sincerely yours, (Signed) H. Mergenthas, Jr. Secretary of the Treasury. The Honorable, The Secretary of State. ISF/efs 9/13/43 IAL DEPARTMENT OF STATE for to WASHINGTON September 9. 1943 My dear Mr. Secretary: I am attaching hereto an airgram, dated July 22, 1943, 12 noon, from the American Embassy at Chungking, reporting that the Executive Yuan of the Chinese Government 18 now considering & plan for the sending of seven hundred students annually to the United States for a period of five years to be trained as technical personnel, all expenses to be paid by the Chinese Government. The Department of State believes that the carrying out of this plan would be of advantage both to China and to the United States and the Department would be prepared to offer its good offices in all appropriate ways to insure the success of the plan. A prerequisite to the success of the undertaking would be a reliable financial foundation and it occurs to the Department that it would be advisable, if the Treasury perceives no objection thereto, to intimate to the Chinese authorities through the Embassy at Chungking that the Treasury Department would agree to a request from the Chinese Kinistry of Finance, if such & request were made, that Bum adequate to carry out a program of technical training in the United States be earmarked from the credit of $500,000,000 already extended to China. It to roughly estimated that the carrying out of the project a would require an expenditure of approximately $20,000,000 over a period of five or six years. The Department would appreciate learning from the easury Department whether there remains the sum of ,000,000 in the credit mentioned that is not utilized id not earmarked for other purposes and, if BO, whether the Honorable Benry Mogenthau, Jr., Secretary of the Treasury. -2the Treasury Department would approve a notification to the Chinese Government in the sense indicated, Sincerely yours, Enclosure: Airgram no. A-19 dated July 22, 1943, from Embassy, Chungking. Rone From: American Embassy, 2RD Chungking Date: July 22, 1943 Rec'd: Aug. 4, 4 p.m. ARY OF STATE, CONFIDENTIAL FASHINGTON. 19 July 22.12 noon According to recent Chinese press reports which have been firmed by Chinese officials a plan has been submitted to the recutive Yuan by the Ministry of Education for sending one thousand Chinese students each year for the next five years to the United States and Great Britain. Informed sources state that 700 students will be sent to the United States and 300 to Great Britain each year under this plan. of this number 500 are to be chosen by examination and 500 are to be appointed by istitutions, with the approval of the Ministry of Education. ose appointed are generally to be older persons up to the age 40 and will include professors, who must have engaged in tudy within the previous 15 years, a nd government officials. students to be eligible for examination must have graduated com college within two years previously or must be among the Lrst three in recent graduating classes. Government officials of 17 be drawn from the Ministries of Economic Affairs, Communi tions and Agriculture and Forestry and from the National 1th Administration. Women will be eligible for examination appointment. All expenses wf13 be paid by the Chinese vernment and students are to be sent for two-year periods, Jeet to extension. 231 -2- The project has arisen from the lack of trained technical onnel in China and the anticipated needs for the post-war construction program. An informed Chinese states that at beginning of the Sino-Japanese war, the Chinese Government dopted a policy of discouraging the sending of students and technicians abroad on the ground that their services were needed in China. It subsequently developed that through the deterioration of Chinese university standards during wartime the caliber of Chinese graduates was lowered and trained technical personnel became inadequate. Dr. Wang Shih-chieh, Secretary General of the People's Political Council and of the State Planning Board, is reliably reported as having urged that 30 per cent of the students to be sent abroad under the plan should be in the social sciences but a member of the Executive Yuan states that approximately 80 per cent of the students will be in technical fields. A qualified foreign observer views the insistence upon such a large number of technical students as a bid by the CC clique for a share in the Chinese post-war industrialization and technological development. This observer feels that the National Resources Commission and the Ordnance Department include most of the technical skill needed for Chinese industrialization; that the weakness of the CC leaders has lain partly in their lack of technicians capable of building new China; and that this program represents their effort to chieve a dominant position in post-war development. An Informed Chinese source takes a similar view but feels that the -3- ching Hsueh Hs1 group (so-called Political Science group) GOO strong a hold in the technical field through Dr. Wong hao, the National Resources Commission and industrial ints under his control to lose its leading place in the economic elopment of China. While Tseng Yang-fu, Minister of Communitons, is a member of the CC group, the technicians of his inistry are said by this Chinese to be followers of Dr. Wong. The Embassy feels that this plan which is expected to reeive the approval of the Executive Yuan offers an opportunity to the Division of Cultural Relations to accomplish an effective extension of its cultural relations program for China. Plans could be made to bring to the appointees an appreciation of the American way of life and a personal interest could be taken in them which would make their stay in the United States more than a pure study of technical subjects. Only a small number of students may be expected to be sent this year, full effectuation of the program to be achieved in 1944. ATCHESON /hff CC 233 Bombey MLR This telegram must be perephrosed before being communicated to anyone other then a Governmental agency. (58) Dated September 15, 1943 Rec'd 1:09 p.m. Secretary of StrtE, Wr shington. 630, SEptEmbEr 15, 5 p.m. Your 356, August 19 for the Treasury Department. (#)A September 15 gold rupees 73 onnes 8 per tola fine, silver PUPEES 117 rnnes 8 per 100 toles. RESERVE Bank of Indic has sold to GATE approxime tely 800,000 toles of gold bullion. DONOVAN MR (#) Omission (serviced) 234 CORRECTED COPY AMT This telegram must be Paraphrased before being Bombay communicated to anyone Dated September 15, 1943 other than a Governmental agency. (BR) Rec'd 1:09 p.m. Secretary of State, Washington. 630, September 15, 5 p.m. Your 356, August 19 for the Treasury Department. A. September 15 gold rupees 73 annas 8 per tola fine, silver rupees 117 annas 8 per 100 tolas. Reserve Bank of India has sold to date approximately 800,000 tolas of gold bullion. DONOVAN MRM eh:copy 9-17-43 NOT TO BE RE-TENSITIVED 235 COPY NO. BRITISH MOST SECRET U.S. SECRET OPTEL No. 305 Information received up to 10 A.M., 15th September, 1943. 1. NAVAL No: known that the U.S. and H.M. Gruisers reported damaged in OPTEL No. 304 were both danaged by rocket bombs. is navel party landed at CAPRI on the 12th and occupied the island. An Italian squadron of 2 battleships, 4 cruisers and 4 destroyers wan smiled from MALTA to ALEXANDRIA under escort yesterday. U.S. air- crift senk a U-bont on the 12th southwest of SARDINIA. 20 of the crew very seen in the wr.tor. 2. MILITARY ITALY. 5th Army. On 13th afternoon heavy German counter attacks lod to confused fighting on either side of the River SELE. U.S. forces were withdrew blightly to conform with the British withdrawal from B/TTIPAGLIA. 56th Division positions consolidated and linked with U.S. Division on right. On 13th/14th 2 Sottalions of 82nd U.S. Airborne Division landed successfully by air at mouth SELE River. On 14th P deep salient about 2 milos wide was made in U.S. front astride the River SELE. A naval burruge was used to brank up an enemy tank offensive 3 miles from the beach. The unloading of M.T. ships in the southern area had been stopped End store ships made ready to move out of rungo of shore butterios. At one A.M. this morning General Clark reported he had visited the front areas north and south of SELE and that the situation north was l'avourable although a further withdrawal h been necessary. The position south TITLE vulnerable but every effort was being made to correct the situation. SALERNO Port under sholl lire and at prosent out of use. 8th Army. The 8th Army has advenced further, Canadian patrols being more then 12 siles beyond COTFONE while British leading alements have pushed on rst COSENZA to BELVEDBEE. In PARANTO Sector our troops edvenced some 20 miles to the southwest of BARI without mosting opposition. Roads in this area were clear of traffic. 3. AIR OPERATIONS BASTEIN FRONT. 14th. Fighter tombers attacked shipping off HOLLAND and FRANCE. An ermed euxiliary vessel, 2 small neval craft, 3 constors and 2 tugs core damaged. Enemy cenuelties 2, 0, 1. 1/th/15th. Aircruft despatched - BAPLIN 8 Mozquitoes, one missing, Intruders 8, Kabi-shipping 7, one minning. A small anval crai DRIVE sunk and 4 loconotives end 6 barges damaged. ITALY. 12th/13th. 131 Medium and Light bombers attacked objectives and reade at TENZA, AULETTA (20 miles est-south-west of POTENZA), and CASTELNOOTO 25 miles northerect of CAPRI Cropping 186 cons. 34 other light bomboro attacked = concontration or 100 M.T. southwest of POTENZA it HRI:NZA. 13th. 63 belvy and 119 medium tembers attacked communic tions in the NAPLES and POTENZA 01050. HURNA. On 11th/12th nd 13th henvy and medium bombirs attacked Killay objectives in the MALAY eron and at P.INMANA 200 ailes north of On the IRIAPADDY and in the HAMPEE oran anny river crift were sunk or damaged. 236 September 16, 1943 9:00 a.m. GROUP Present: Mr. Bell Mr. Gaston Mr. White Mr. Thompson Mr. Blough Mr. O'Connell Mr. Sullivan Mr. Haas Mr. Smith Mrs. Klotz Mr. Paul H.M.JR: One of the things that disturbed me - I only have a few minutes as I go to the White House at nine-thirty - was that - did you read that statement from Lehman? MR. WHITE: From England? H.M.JR: From Governor Lehman. MR. WHITE: The telephone conversation? H.M.JR: Yes. MR. WHITE: Yes, I did. We have something prepared for you. H.M.JR: I don't want - why should I ask - when we send a cable over should a cable be held two or three weeks in the State Department? MR. WHITE: Because there have been a lot of telephone conversations at a lower level, which indicates difficulties there, and we just drafted a letter. 237 -2I just gave it to Herbert and asked him if he thought it was too strong. We were all in favor of a strong letter. We wanted to talk to you about it, if you want to glance at it. H.M.JR: This will be my only chance today. If anybody has got anything pending that is important that won't wait until Monday, they had better holler. (Draft of letter addressed to Secretary Hull handed to the Secretary by Mr. White.) H.M.JR: That is all right. MR. WHITE: I am a little bit - do you think it is strong, Herbert? MR. GASTON: It is a fairly stiff letter. My real objection to it is the repetition of the word "such" in there. MR. WHITE: Well, let me work it over with Herbert. MR. GASTON: The last paragraph might be modified slightly. MR. WHITE: They shouldn't have acted that way, no about holding these cables for that an official request. long there without is question getting Weisthe got buckthere it at levels which show that somebody passing and doesn't want to take the matter up. And the mere fact that we got our information through Lehman to you about what they want from you and the request that they want from you - judging from that conversation, I think it is inexcusable. So if there is agreement-(Mr. Paul entered the conference.) H.M.JR: Of course there is another way to do it not make a record of it but just call Hull on the phone. 238 September 16, 1943 9:08 a.m. HMJr: Hello. HMJr: Mr. Hull is not there. Mr. Stone is on the line. All right. Operator: There you are. Operator: John Stone: Good morning, Mr. Secretary. HMJr: Hello, Mr. Stone. S: Mr. Hull isn't in yet, sir. Can I have him call you? HMJr: S: No. I'll make it easy for him. All right, sir. HMJr: I'll give you the message. S: All right, sir. HMJr: Have you got a pencil? S: Right, sir. HMJr: On August 30th I transmitted to Mr. Livesey S: HMJr: S: HMJr: Yes, sir. ....a cable to be sent to our Mr. Adler in Chungking. Yee, sir. And I've been informed through the "grapevine" that it hasn't gone. S: For heaven's sakes! HMJr: Now, I'd like to know why. S: I'11 check into it, Mr. Secretary. HMJr: Wait, there's another one. On September 4th I sent to Mr. Bernard Meltzer of your office - M-e-1 -2- S: Yeah. HMJr: .... a cable I wanted sent to Bern and I understand S: HMJr: S: HMJr: 239 that hasn't gone. Right, sir. Now, if you could let me know why I'll look into it right away, Mr. Secretary, and - and call Mrs. Klotz back? If you would - and here - here's - if - this is for future - if I send over a request for a cable, I think it's just plain courtesy to let me know within the same day if it's not going to go. HMJr: S: HMJr: S: HMJr: S: Exactly. I I think it's an unheard of - that somebody should hold up the cable of the Secretary of the Treasury without advising him. Naturally. I understand perfectly, Mr And - uh - just plain courtesy to me to say, "Well If for no other reason. Yes. So, if you would transmit that to Mr. Hull, I'd appreciate it. I'11 be glad to, sir. HMJr: Thank you so much. S: Good bye, Mr. Secretary. " S: 240 -3-- MR. GASTON: I think that might be an excellent thing, to call Hull up. H.M.JR: There are two cables, one-MR. WHITE: One about Shanghai, and the other to Bern, Switzerland. You see, this is quite within your administrative and legal authority under the Tradingwith-the-Enemy Act. It is something that you would be expected to do in a routine, regular way. H.M.JR: Let me just get hold of Hull and mention these two cables. I would like to know if they have been sent and if not, why not. I think it should have been done the same day. MR. WHITE: It was. H.M.JR: No, for them to let me know. MR. WHITE: Oh, it has been weeks. H.M.JR: They should let me know the same day. Norman? MR. THOMPSON: I have a deferment case, Mr. Hoffman, Assistant Director under Pehle. He is over in North Africa. He is going to be there for the duration. (The Secretary held a telephone conversation with Mr. Stone, secretary to Mr. Hull.) MR. WHITE: Of course they did let us know, but lower down the line. It is all right. H.M.JR: Mr. Hull didn't let me know. Listen, one minute you want me to be strong-- (Laughter) MR. WHITE: No, that was all right. (Deferment papers of Mr. Michael L. Hoffman handed to the Secretary by Mr. Thompson.) 241 -4- H.M.JR: I can't do this. If this boy is so valuable, I think he ought to put on a uniform. MR. THOMPSON: Well, we have had a lot of discus- sion along that line, and I don't know - the board may draft him if you don't ask for a deferment. He probably will be drafted out there. They won't commission him, apparently. The War Manpower Commission - the review committee has been unwilling to definitely settle it. This fellow is in the war zone, and they won't say whether we should defer him or shouldn't. H.M.JR: How many other cases-MR. THOMPSON: Pehle is very strongly of the opinion it should be given. H.M.JR: Was the time up on this? MR. THOMPSON: About two weeks ago. I am holding the board up on it. MR. O'CONNELL: Who is this? MR. THOMPSON: This is Hoffman. MR. O'CONNELL: He is one of the three top men in Foreign Funds. MR. THOMPSON: He is going right into Sicily, and he is right in the fighting zone. Perhaps there is justifica- tion for it. MR. GASTON: I should think it is all right if that is the way those people over there want to handle those things. MR. THOMPSON: We have been trying to get the War Manpower Commission people to give us a policy on all of these people abroad, but they won't do it. They let it 242 -5- ride. That is all we can get out of them. MR. GASTON: I don't see much difference between his working over there as a civilian in the war zone and his working in the same kind of work with a uniform on. H.M.JR: Why don't I call up McNutt and ask him? MR. THOMPSON: We can't get very far with it. H.M.JR: He follows these things, himself. MR. BELL: Didn't we have an understanding with these fellows that went into North Africa that they had to make peace with their own draft boards? MR. O'CONNELL: We have requested deferments for a couple of the lawyers over there. Some draft boards have written and asked us what the status of these people was, and we write back and say it is not our intention to request a deferment but that they have been s ent to North Africa at the request of the War Department. I think Hoffman was one who was sent at the request of the War Department. MR. PAUL: That puts a different complexion on it. If Hoffman is over there at the request of the War Depart- ment that is different. MR. O'CONNELL: He was specifically requested by the War Department. MR. WHITE: Hoffman of Foreign Funds? MR. O'CONNELL: The ones we sent were - Murphy and two or three others. I was under the impression Hoffman was in the same category. MR. THOMPSON: The draft boards do not act uniformly. MR. WHITE: We have pursued that - we have said we would not ask for deferment and that it was up to the draft board. 243 --6- MR. THOMPSON: One difficulty is that the draft boards now are not supposed to defer anyone. As a matter of fact, the law provides that they shall not defer on occupation grounds unless the deferment request first is submitted. MR. WHITE: I think there is more justification for asking for deferment than we ever had because the Army is cooperating a hundred percent in taking persons you ask them to and putting them in uniform. So we haven't the argument of saying they are not being utilized. H.M.JR: It isn't inconsistent, but - well, I mean, here is a boy twenty-eight years old, and let's say he gets four or five thousand dollars. He is doing the work, maybe, of a first lieutenant who gets, maybe, twenty-three hundred dollars. MR. PAUL: He is doing more valuable work than that. MR. THOMPSON: He is a sixty-five-hundred-dollar man. H.M.JR: All rigAt, he is a sixty-five-hundred-dollar man. That is the salary of a general. MR. BELL: A colonel. H.M.JR: Why hasn't he become part of General Hilldring's outfit? MR. BELL:, He is in the State Department activity, isn't he? MR. WHITE: He is in the civilian. (The Secretary held a telephone conversation with Mr. McNutt.) H.M. JR: So easy! No recommendation from me - just send it over there. We will see what happens. 243 -6MR. THOMPSON: One difficulty is that the draft boards now are not supposed to defer anyone. As a matter of fact, the law provides that they shall not defer on occupation grounds unless the deferment request first is submitted. MR. WHITE: I think there is more justification for asking for deferment than we ever had because the Army is cooperating a hundred percent in taking persons you ask them to and putting them in uniform. So we haven't the argument of saying they are not being utilized. H.M.JR: It isn't inconsistent, but - well, I mean, here is a boy twenty-eight years old, and let's say he gets four or five thousand dollars. He is doing the work, maybe, of a first lieutenant who gets, maybe, twenty-three hundred dollars. MR. PAUL: He is doing more valuable work than that. MR. THOMPSON: He is a sixty-five-hundred-dollar man. H.M.JR: All right, he is a sixty-five-hundred-dollar man. That is the salary of a general. MR. BELL: A colonel. H.M.JR: Why hasn't he become part of General Hilldring's outfit? MR. BELL:, He is in the State Department activity, isn't he? MR. WHITE: He is in the civilian. (The Secretary held a telephone conversation with Mr. McNutt.) H.M. JR: So easy! No recommendation from me - just send it over there. We will see what happens. 244September 16, 1943 9:14 a.m. HMJr: Hello. Operator: Mr. McNutt. HMJr: Paul Hello. McNutt: Hello. HMJr: Paul? M: Yes. HMJr: Henry Morgenthau. M: Yes, Mr. Secretary. HMJr: How are you? M: HMJr: I'm fine, thank you. Let me ask you this - I know you follow these draft cases 80 closely. M: Yes. HMJr: We've got a man 28 years old in Foreign Funds over M: Yes. HMJr: Now, he does work and they say ne's very valuable in Africa and are now sending him into Sicily. on the Foreign Funds end and my own people have asked me now to request a six month's deferment M: HMJr: Yes. but you must have a lot of cases there of civilians who are working, so-to-speak, under the supervision of the State and Treasury. M: That's right. There a good many of those. HMJr: Now, have you got a policy? M: Yes, and those cases are being taken up one by one. -2- HMJr: M. HMJr: M: Yeah. And where they are skilled and cannot be replaced, we have recommended deferment. Yeah. So, if you will let me have the information on this particular man, I'll go into it immediately. HMJr: Would you do that? M: Yes -- be glad to. HMJr: Well, I just want to do -- I mean I want to be in M; tune with what's being done, but then I There are a number of those cases in the State Depart- ment. HMJr: 245 Yeah. Because - I hesitate to ask for his deferment, but I'11 send it over to you. M: All right. We'll - we'll handle it right away. HMJr: Thank you so much. M: All right. HMJr: Bye. M: All right. 246 SEP 16 1943 Dear Mr. McNutt: In accordance with our telephone discussion on draft deferments, I am sending you the enclosed papers in the case of Michael L. Hoffman, an Assistant Director, Foreign Funds Control. I will appreciate your advice as to the appropriate action to be taken in this case under your policies controlling draft deferments. Sincerely, (Signed) H. Morganthes, Jr. Secretary of the Treasury. Honorable Paul V. McNutt, Chairman, War Manpower Commission, Washington, D. C. Enclosures. WNTsaja SELECTIVE SERVICE SYSTEM AFFIDAVIT-OCCUPATIONAL CLASSIFICATION (Industrial) (AffidavitOccupational Classification (General), Form 42, is provided for use in activities where the items on this form are not applicable) Michael L. Hoffman rant vice 967 Order No. Oberlin Lorain 4. Ohio (City) (County) (Number) 28 Age (State) job Assistant Director, Foreign Funds Control, U. S. Treasury. Also Represen tative, Financial and Control Division, North African Economic Board. State whether journeyman, apprentice, helper, certificated, licensed, professional engineer, etc. - Describe duties actually performed (See attached sheet.) (Be specific-Include name of machine or machine tool, process, materials, etc.) Date entered present job June 17. 1941 Date employed June 17. 1941 revious assignments differ from present job primarily in degree of responsibility.) innual rate of pay, $6500 (plus overtimeAverage hours worked per week Official 48; actual approximately 60 - 70. Prin work experience Research and graduate work with Social Science Research Council in fields of international trade and international economic relations. Several years college teaching of economics at Trinity, Oberlin, and University of Chicago. Employed Treasury since June, 1941, part of this time as a special consultant on a per diem particular qualifications employee's background B.A., Oberlin. 1935; Ph.D. University of Chicago, job) 1942. Three (Fill if nécessary to establish for . out uate study in foreign exchange and related fields on fellowship granted by Lence Research Council. ill it take you to replace this employee? (See attached sheet) steps have you taken to secure or train a replacement for this registrant? (See attached sheet) [OVER] EFIDAVIT-OCCUPATIONAL CLASSIFICATION (Industrial)-Continued. pany U. S. Government, Treasury Department (Corporation, partnership. individual-If self employed, BO state) company Washington, D. (Location C. of plant, office, or division where registrant is employed) Self evident. of the activities of this company State specifically what proportion of your products currently produced are: (a) for use in the war effort (b) for civilian use in expansion or further conversion contemplated in war production Number employees now Number additional Number additional needed in next 6 months needed in next year Explain Contemplated Is a replacement training program in operation Explain This form was completed at the plant or office of the company located at and correspondence relative to this affidavit should be so addressed. do solemnly swear (or affirm) of the above-named company, and that the (Official position) statements are my knowledge and belief. GOVERNMENT REQUEST Agency: Treesurv Department By Agency Committee ribed and sworn to before me this Chairman (Signature) day of 19 (Signature of official administering oath) (Official designation of official administering oath) UCTIONS: This form is to be filled out by an employer or other person who has knowledge of the registrant's Class II deferment as a necessary man in his civilian occupation or activity. If the registrant is deferred must notify the Local Board promptly of any change in the registrant's job status, or if his employment is GOVERNMENT PRINTING OFFICE dbe duties actually performed. As Assistant Director of Foreign Funds Control, Mr. Hoffman is ber of the top policy-forming staff of Foreign Funds Control, United tes Treasury Department, and reports directly to Mr. Pehle, Assistant to Secretary, and Director of Foreign Funds Control. Foreign Funds Control occupies a pivotal position in this try's program of economic and financial warfare against the Axis powers. exercises control over $8,500,000,000 of foreign-owned assets in this ntry as well as the multitude of financial transactions effected daily which involve such assets. It also administers controls over all international financial transactions involving persons or enterprises who are on the Proclaimed List or who are in enemy, enemy-occupied, or the neutral countries of Europe. Foreign Funds Control also cooperates with the War Department and other appropriate Government departments in making plans for coping with the complex monetary and financial problems to be encountered in the occupation by our armed forces of territory now controlled by the enemy. It also plans and assists in the execution of programs of economic and financial controls which are or will be instituted in liberated areas. For example, Foreign Funds Control personnel are now in North Africa in connection with such matters. Mr. Hoffman is now in North Africa, with headquarters in Algiers, as the senior representative of Foreign Funds Control. He is a member of the Financial 'and Control Division of the North African Economic Board, which division is responsible for the initiation, preparation, and execution of programs relating to currency, monetary, fiscal, and exchange control, trading with the enemy matters, and the control of undesirable commercial and financial transactions in the Mediterranean theater. Mr. Hoffman was sent to North Africa at the specific request of the United States military authorities in that area. He has now had over six months of practical experience in North Africa and participated in the planning and execution of the programs applied in Tunisia immediately after its occupation by United Nations forces. Mr. Hoffman is about to be assigned to Sicily and we expect to use him in other liberated areas as necessary. long will it take you to replace this employee? Should we be able to procure a person with similar native ability d formal training in the appropriate fields of economics, which is practically such possible at this time, approximately a year would be required to give to rson adequate training and experience of a highly specialized character Hoffman. ble him to fulfill the responsibilities now being carried by Mr. it specific steps have you taken to secure or train a replacement for this strant? Every attempt is being made to build up a staff of people not ceptible to Selective Service call who will have the ability, training, which and nical knowledge necessary to plan and execute the financial programs the occu- the responsibility of the Treasury Department in connection with on and control by military forces of enemy or enemy-occupied territory. 250 -Paul, do you want to take two or three minutes and tell this gang how you made out last night? MR. PAUL: We had a meeting in Doughton's room before the meeting, and that is where we had our hardest job. Stam didn't want to go along with us. He finally agreed to do it, with some changes in that statement, not for us but for the President of the United States and for Mr. Justice Byrnes, whose name I brought into it as jointly requesting the deferment. H.M.JR: You used his name? MR. PAUL: I think I made it clear to him that the President would hear that he blocked it if he didn't go along with us. Then we went into the big meeting. We brought that question up first. Doughton was very cooperative, and I think you ought to call him up about it. H.M.JR: Who did you speak to first? MR. PAUL: Stam - well, Doughton and Stam. We had some razzing, but the tone, the general climate, was friendly rather than hostile. I was afraid it would be hostile. Of course Knutson and some of the Republicans did 8 lot of kidding - more kidding than real razzing. Gearhart of California said, "Why don't you be frank with us and tell us that you are doing this on account of the bond drive?" I said, "Well, I wouldn't say that that wouldn't be incidentally beneficial to the bond drive, but"-(The Secretary held a telephone conversation with Mr. Doughton.) 251 September 16, 1943 9:18 a.m. HMJr: Hello. Operator: Mr. Doughton. HMJr: Hello. Robert Doughton: Hello, Henry. HMJr: How are you all? D: Oh, about 80-80 thank you. How are you, Henry? HMJr: About the same. D: All right. HMJr: I just wanted to call up and tell you how much I appreciated what you've done -- what you did last night. D: HMJr: D: Well, I thought we worked it out pretty smoothly. I thought it was Bob Doughton at his best. Well, I thank you. Well, the boys cooperated fine, you know. Both Stam and Paul or Paul and Stam -they functioned just fine as could be and everything went along all -- I talked to the boys, you know, and laid the foundation before we got in -- some of our key men. HMJr: Yeah. Paul said you fixed it up nicely. D: Well, we did -- I think we got it all right. HMJr: Well, that gives us all a chance to really get together. We're anxious to get together. D: Well, I know that and we've got to do it. I think our folks will work along something on tax work next week. HMJr: Yeah. D: Some of them may have a few executive -- some want an executive session to talk over a few of the matters among ourselves. -HMJr: D: HMJr: Yeah. And that will give you all more time and we can put in some time on renegotiation and I hope we won't lose any time in the end. I don't think we will. D: Get ready up there as soon as you can though. HMJr: We'll do that. D: Fine, thank you, Henry. Thank you for calling. HMJr: God bless you. D: Good bye. 252 253 -8H.M.JR: That last was for your (White's) benefit. (Laughter) best. MR. WHITE: Ambiguous compliment - "Doughton at his H.M.JR: Watching Harry was like this woman the other night - it was so insincere - thinking of myself. Well, anyway, it doesn't cost anything, Harry. Just remember, when I call you up, Harry, and say, "That was wonderful, that was White at his best.' (Laughter) MR. GASTON: Well, that is different. (Laughter) MR. WHITE: I'd say, "Oh, yeah?" - but not so that you could hear it. (Laughter) MR. PAUL: They ook this matter up firstin the meeting, and then I - and they made a motion to adjourn subject to Doughton's call after conferring with the staffs. And then I got out. I was afraid somebody : would bring up the question if I stayed there. Roy and Stanley stayed on. MR. BLOUGH: Nothing happened, but I think you would very much like to get is dubious started should know on the He that 27th. Doughton very about waiting until the 4th. He asked us to canvass that possibility and see whether it would be feasible to get started on the 27th. H.M.JR: What is the 27th? MR. GASTON: That is a week from Monday. MR. WHITE: Does that open up any date for going before these committees next week? 254 - -9. - H.M.JR: Gee, Harry, I don't know. These fellows yet haven't told me where else they want me to speak. I will know before I leave. MR. WHITE: I think it would be-MR. BELL: Speaking at Los Angeles on the 25th? H.M.JR: I don't think so. These men have suddenly gotten serious about the war, and they don't want me to go to San Francisco. Last night's speech made them serious. (Laughter) MR. PAUL: I even got home in time to hear that. It was fine. MR. WHITE: I didn't hear the speech, but I heard the press commentators repeat some very substantial portions of it - very substantial portions. MR. PAUL: I thought your voice was the best I have ever heard it. MR. BLOUGH: A very substantial portion of it was in the eleven o'clock news. That was the first I was able to get to. MR. PAUL: "Morgenthau at his best." (Laughter) MR. SMITH: The front page of the Tribune - did you see that two column head? The earlier edition - it was on the inside of the Times. It was about half a column long though. MR. WHITE: Well, I think it would be highly desirable to see them before the British Mission gets through, because it will be much more difficult after they are through. H.M.JR: I will let you know before I leave town. MR. SULLIVAN: You recall the Budget turned down the use of the President's emergency funds for that survey 255 - 10 you wanted made. They said they would approve our using the Expense of Loans funds if we got prior approval from Ludlow and Taber. We discovered yesterday that the Department of Labor thinks that this should be a survey of five thousand families rather than thirty-five hundred, and the ante is up from a hundred fifty thousand to two hundred and fifty thousand. I didn't want to go up yesterday afternoon without clearing with you, but if you say so, I will see them this morning. H.M.JR: I wouldn't raise the ante. MR. SULLIVAN: You would keep it down? MR. HAAS: In order to get an adequate sample to cover the situation as we thought it should be covered, we increased it to five thousand, so we are responsible. H.M.JR: I didn't know the Budget turned me down. Nobody told me that the Budget turned me down. MR. THOMPSON: Informally they turned us down. H.M.JR: You want five thousand families? MR. HAAS: Yes, sir. MR. SULLIVAN: I will try to see them this morning. H.M.JR: Paul, have you got time to talk to me as I go across, because I am not going to be able to see you? I finally got somebody at eleven. MR. PAUL: All right. MR. SULLIVAN: Is our date off with Helvering this morning? H.M.JR: No,no. Anybody who wants to come in at eleven-fifteen who has a candidate to succeed Commissioner Helvering is welcome. (Laughter) 256 September 16, 1943 11:50 a.m. THIRD WAR LOAN SPEECHES Present: Mr. Bell Mr. Gaston Mr. Smith Mr. Gamble Mr. Albee Mrs. Klotz H.M.JR: What I want to talk to you people about I told Doob - he is not coming? MR. GAMBLE: He is in New York. H.M.JR: Let's settle what you people want me to do next week. I am going to leave here now maybe in half an hour. They want us to leave early. MR. GAMBLE: One thing I suggest that you do next week is to go to New York. H.M.JR: You know, I want to - to send me clear out to St. Louis to talk to five hundred workers - I think it is crazy. Now, I don't want to go up to New York and talk to workers. I don't think that that is what I should do. MR. GAMBLE: I don't think going to St. Louis and talking to five hundred fifty workers is crazy, because it is the normal type of meeting you would arrange for at this time of year in that part of the country. You can't safely hold a meeting out of doors. It is not just the type of job that is to be the setting for a national broadcast, and certainly it seems to me that it is much more helpful that you talk to the 257 -2- leaders of this work and this drive out there than just talkauditorium to just a handful an inside. of the people you might put into H.M.JR: Well, let's do St. Louis. Was there something else you wanted me to do out in St. Louis? MR. GAMBLE: We have this plant luncheon tentatively arranged. Nothing is definite until you approve. They would like to have a luncheon tomorrow noon at the cartridge company out there. They employ forty thousand people. We would like to - I don't think you should do any more than that because of your speech. I don't think you should attempt any visits tomorrow. H.M.JR: Cartridge company? MR. SMITH: Whose is it? MR. GAMBLE: I believe it is the Federal Cartridge Company. H.M.JR: Will I meet with the workers or just sit down with the executive workers? MR. GAMBLE: You will have lunch at the plant and meet with the workers. H.M.JR: Can I eat in their lunch room? MR. GAMBLE: Yes, I think that can be arranged. H.M.JR: I don't want to sit down with a lot of stuffed shirts. I can't take it. MR. SMITH: Tom Lane had a suggestion this morning. He said your story got awfully good play in the St. Louis papers. He says they have hundred percent blocks out there, where everybody that lives on a block has bought bonds. He suggested that you might go to one of those blocks and go in and see some of the people. That might be & good thing. 258 -3H.M.JR: That could be settled when we get out there. MR. SMITH: Yes, there is no problem. H.M.JR: What advantage is it to go to the cartridge plant? MR. GAMBLE: Only the fact that you are going to be visiting a plant that has forty thousand people on the pay roll. H.M.JR: What do you think? Well, if they have a company cafeteria and I can go in and sit with the workers and eat my lunch there with the workers, I would like to do it; but I don't want to sit up in the front office in an air-conditioned palace like I did at the Ford Company and have to sit next to one of these stuffed shirts. But, if I can go in and eat with the working men and women, I would be willing to do that. MR. GAMBLE: I think that is right. I think that is the way to do it. There is no point in your going out and having lunch with half a dozen executives of the Federal Cartridge Company or any other plant. H.M.JR: Who suggested the Federal Cartridge? MR. GAMBLE: Mr. Head, the chairman. He suggested it only because I started to make preliminary checks with them about whether or not such an arrangement could be made and if we decided, which we usually do, at the eleventh hour to do something like that, I wanted to have a little groundwork. I purposely left it open. H.M.JR: Well, talk up, people. On account of this change in time - I had planned on leaving at two-thirty or three. MR. ALBEE: I have no objection to your talking to only five hundred people, since we are really talking to eight or ten or twelve million on a national hookup. 259 -4H.M.JR: What time do I speak? MR. GAMBLE: Nine-fifteen to nine-thirty. MR. SMITH: Their time. MR. GAMBLE: It is ten-fifteen here. H.M.JR: What station? MR. GAMBLE: It is on the Blue Network. There is no one else on the program except the introducer. H.M.JR: We will do the Federal Cartridge, provided-MR. GAMBLE: I understand. H.M.JR: And this other block thing - I might even do that tonight. But don't let them commit me. MR. GASTON: Why not let them pick some people with fine records on War Savings or Pay Roll Allotment to sit at the table with you from the plant? H.M.JR: That is right. MR. ALBEE: Tonight if you are feeling well enough we might go out and call at one of these blocks with one of the salesmen, and actually the Secretary could make kind of a salesman's visit himself along these blocks. That might be a pickup for newspapers tonight - give them something to talk about before we have the speech tomorrow. That is an opportunity we miss - reporters are always meeting the plane, and we don't give them anything. We should give them something when we get off the plane, too. MR. GASTON: Take the home of a sailor or soldier family. H.M.JR: My inclination is this, to talk tomorrow night and make a report on the war loan. That is my inclination. 260 -5MR. ALBEE: There is not an awful lot to report. You can't report for fifteen minutes. MR. GAMBLE: That can be handled, so long as the subject-- H.M.JR: You will have the figures through tomorrow night, won't you? MR. GAMBLE: Yes, and they will be upwards - past the half-way point by tomorrow night when you speak. H.M.JR: We can start off with that. MR. ALBEE: We just had a chat with Lindow. He said that half way is very misleading because the big money is in now, and from here on the struggle is going to be tough. So let's not indicate any false optimism by saying we are over the half-way mark. MR. GASTON: No. It is going to be tough on the individual and tough on the E bonds, particularly. MR. ALBEE: Lindow said that if we wanted to say anything like that we must point out that the big money has come in and now this is just the beginning of the tough part of the job. MR. GASTON: They told me in Chicago that they were going to have a tough job to get their E bond quota. MR. GAMBLE: They all are. It is a terrific chore. H.M.JR: All right. Now we will have to do the best - what about next week? MR. GAMBLE: I still would like to have you visit New York. MR. BELL: Why New York, Ted? MR. GAMBLE: I will tell you why New York. 261 -6MR. BELL: He has been there once, hasn't he? MR. GAMBLE: Not during the drive, and New York has had more excitement over this drive than anything that has ever happened in New York. Every day in New York there are little rallies of hundreds of thousands of people who are involved in this program, and they have plans now for activity throughout the rest of the drive that are more tious than what their plans have been up to date. They have Grover Whalen on the committee and have been meeting all morning to arrange a show on the 28th, an Army parade to wind this show up in an impressive fashion. They have this war center, a military display. They bring their workers over and talk to them. They have all the organized groups in New York active, and I think it is only proper that the Secretary, sometime during that operation, should visit the most important sales office he has - in New York. I think it is a story. The New York press has been magnificent all through this operation. It has just been the biggest thing that has happened in New York since the war. The head man ought to go there and spend a few hours during this drive. MR. ALBEE: What would you think of a flying visit? He just drops in on New York because it is so important. He makes a flying visit, a talk at the city steps at noon " for two or three minutes, says "Get in there and pull, and then we get in and go on. MR. GAMBLE: I think you ought to go to the war bond center in New York. MR. SMITH: I agree with that. H.M.JR: Is this something you are pushing or something Burgess is pulling for? MR. GAMBLE: We are jointly working on it, and I am just as interested in it as Burgess. I think it is a good thing to do. 262 -7 MR. SMITH: You wouldn't even need a speech for it. MR. GAMBLE: Not a formal speech. He can get up and talk as he does very well when he gets up and talks four, five, or six minutes to these people, and that is all; there is no occasion for an address. H.M.JR: What time of day? MR. GAMBLE: Any time you want to set. I recommend that it be in the early afternoon. MR. ALBEE: What sort of radio facilities - local radio - do they have? MR. GAMBLE: I wouldn't have any radio. I am not now thinking in terms of a job we are going to do for the country; I am thinking of a job we are going to do for the people working right in New York City, the sales force. MR. GASTON: What about your job for the country next week, before the last week of the drive starts? MR. GAMBLE: We don't have a definite plan for it. We have several tentative plans. Then we held them up pending this Fairbanks program. H.M.JR: Fairbanks? MR. GAMBLE: Fairbanks, Alaska. We didn't go any further because of that. And other cities that might properly be visited during the drive - I would like to see you hit the South, New Orleans, possibly, or Atlanta. H.M.JR: Well, I think if I am going to go to New York I am either going to do the thing just sort of passing - pass through New York or else do it properly. I don't think I ought to go into a tent and just get up and make a few casual remarks. I might put my foot in it. There are plenty of radio stations up there. MR. GAMBLE: I am not against that, you understand. To me that is a by-product of the meeting. The important thing from my point of view is your visiting this big sales office and having the New York workers and New York press feel-- H.M.JR: I have never been in New York yet where it has gone off well. That is why I am sort of reluctant to go. 263 8- I want to do it early in the afternoon, because you don't get the afternoon or morning papers. MR. BELL: Would lunch hour be a good time? MR. GAMBLE: Lunch hour is a good time - from twelve to one, or one to two. H.M.JR: Would lunch hour - or would six to seven be better? MR. GAMBLE: Lunch hour. MR. BELL: Everybody thinks about getting home at six or seven. MR. SMITH: I think that it is silly to waste time just doing it for New York. I think you have got to do It for the country if you are going to do it at all. MR. GAMBLE: Then I would be inclined to do it in the evening. MR. SMITH: I think six to seven would be a good time and rig up kind of a "town meeting" and prime people ahead of time so that you really have got something that will go out over the air; then it can continue from the standpoint of just unrehearsed discussion a little bit later. But you could set up something like that and it would work out all right. MR. GAMBLE: Why don't you decide to go to New York next Thursday and I will prepare several programs and submit them to you when you return? H.M.JR: What do you people think? MRS. KLOTZ: I think you should. MR. BELL: Yes. MR. GASTON: I would make a real day out of it as is suggested now, rather than just make it a casual visit. H.M.JR: If I am going to do it I would do it - and I don't agree with you (Gamble) because the country is too 264 - -9 - big. I mean, if I am going to go I will make as much impression on New York as I can, but I think it should go out through the whole country. MR. GAMBLE: I am not against that. I only meant New York is important enough to justify your going. H.M.JR: Well, let's say you are right. Then I say but if we are going to go, let's-MR. GAMBLE: Add to it? H.M.JR: Yes. My inclination would be, so these people can get home, to talk to them about six o'clock in the evening. MR. SMITH: I think that would be good, and let all of the people and you make a speech for a change, instead of just you - just set up a formal, informal meeting. H.M.JR: Town meeting? MR. SMITH: That is what it amounts to. I think it would be good for news. I think it would be interesting - be something different. MR. GAMBLE: Give me a little latitude on it and I will work it out and submit it to you. MR. ALBEE: The Secretary is good on the question and answer business. H.M.JR: Who runs the best town meeting? MR. GAMBLE: George Denny. H.M.JR: He is good, isn't he? MR. GAMBLE: Very good. 265 - 10 - H.M.JR: Why couldn't we get him to run the meeting? MR. SMITH: No reason why you can't. You have got that whole crew up there, and between them and Denny you ought to have a pretty good setup. MR. GAMBLE: I would let New York run the meeting. H.M.JR: Yes, but I want to know - I think this idea of a town meeting of Fred's, and maybe my idea of letting Denny run it, and then questions and answers and not too much formal talk - I think it would be good. MR. BELL: You mean just do it informally? H.M.JR: Yes. He could say, "Mr. Morgenthau, do you want to answer that?" I would say, "No, I will let Mr. Lindow answer that one. " MR. GASTON: The way he runs those - I presume you know - he usually has two or three set speeches - short speeches, about five or ten minutes - and then gets the questions from the audience and passes them to the appropriate speaker. MR. SMITH: You could do that. You could extend that and go out through your tent there. You could get some good people. H.M.JR: They ask me something on taxes and then I am sunk. MR. GAMBLE: Denny has been trying for years to get you on a tax program. MR. SMITH: This is strictly bonds. MR. GAMBLE: That is why I would not introduce that sort of thing. MR. SMITH: I am talking about a formal, informal meeting. I am talking about a show. I don't think you 266 - 11 - would dare go on completely unrehearsed, without knowing what the questions are. All of those have to be set up, and the people have to be picked. For an hour you could carry on, and it would sound on the outside like a per- fectly informal thing, but all lead in the right direction. MR. GAMBLE: I will give you a tentative schedule when you return. it? H.M.JR: That is going far enough in advance, isn't MR. GAMBLE: Yes, you wouldn't want to go any further. H.M.JR: Will you get the figures to me tonight? MR. BELL: Yes. H.M.JR: Where am I staying? MR. GAMBLE: At the Park Plaza, I am sure. The meeting is at the Chase Hotel. You have no objection to a reception committee meeting you at the plane when you get there? that? H.M.JR: Oh, I don't know - must I go through all MR. GAMBLE: I think you almost have to, Mr.Secretary, when you go out to these big cities. It is the usual thing. H.M.JR: All right. MR. GAMBLE: And I will keep your evening completely open. You will have dinner at the hotel by yourself and have nothing this evening. Mr. Head won't be there at your arrival. He will check with you at nine o'clock tomorrow morning. 267 September 16, 1943 Congressman Celler came in to see me today, and wanted me to go to the President about the Macdonald- White Paper that is coming up in London. I told him to go to see Judge Rosenman, and that I could not take this up with the President. 268 9/16/43 Ted Gamble Secretary Morgenthau Some of the people from my office went to the Arena last night, and they couldn't hear me very well. It is unfortunate that they can't organize a meeting of that kind so that the loud speakers really work. Please have the matter looked into, and issue instructions to whoever is responsible, so that the next time I speak at a meeting like that the audience will be able to hear me clearly and distinctly. I realize that you were not personally responsible for this, but I direct this memo to you because I know that you like to care of things like this yourself. 269 U. S. CARTRIDGE COMPANY 3rd War Loan Drive September 16, 1943. The results of the 3rd War Loan Bond Drive up to 4:00 P. M. September 16th were approximately as follows: Employees Maturity Value Additional subscriptions secured to the regular pay roll savings plan (approximately a ninety day period) 16,674 $679,975.00 Cash subscriptions 1,405 18,079 94,450.00 Total Employees on payroll % Subscriptions - $774,425.00 29,548 61.18% The effect on the Pay Roll Savings Plan is as follows: Average Pay Roll (per week) Average Pay Roll Subscriptions (per week) 1,150,250.00 105,000.00 9.12% 42,500.00 3.69% 147,500.00 12.81% Cash Subscriptions (this week) 94,450.00 12.18% Bonds to be Issued (this week) 241,950.00 24.99% Subscriptions above $679,975.00 Less 1/4 Weekly Average 12 56,663. 14,164 The total of bonds issued to employees on completed subscriptions including the present week aggregate $5,057,550.00 at maturity value, or $3,793,162.50 in cash deductions. Kim Compholler John 270 SEP161943 My dear Mr. Secretary: On December 8, 1942, you were good enough to order Lieutenant Commander George Gordon Fisher, (SC) USNR, to report to me for duty as the assistant to the Chairman of the Interdopartmental Committee for the Voluntary Pay Roll Savings Plan for the purchase of War Savings Bonds by civilian employees of the Federal Government. As you know, this Committee was established by the President on April 16, 1942. Mr. E. F. Bartelt, Chairman of the Interdepartmental Committee, has informed me that Lieutenant Commander Fisher has rendered in- valuable service as Field Coordinator for the Committee. He has successfully organised Coordinating Committees of Government officials in over twenty cities where there are large concentrations of Federal employees. His enthusiasa and wholehearted interest in this work have won the cooperation and support of officials in each city he has visited, and his efforts have gone a long way in stimulating increased bond purchases by Government employees. The groundwork Lieutenant Commander Fisher has accomplished should have a very wide effect in materially assisting our Bond Program. As Lieutenant Commander Fisher is reporting to the Navy Department for duty, I want you to know how much I appreciate your courtesy in making his services available to the Interdepartmental Committee and to the Treasury Department. Very truly yours, (Signed) H. Mergenthau, Jr. Secretary of the Treasury Honorable Frank Knox Secretary of the Havy Washington, D. C. 9/14/43 271 100000 SEP 8 1943 Forse 10-200 40570 The Chief of Naval Porsonnol. Moutement Commonder Goorgo G. FISHER, SC-V(S), USIR, Office of the Secrotary of the Trensury, Treasury Department. Via: Socrotory of the Troosury. Subjoct: Change of duty. 2. Then directed by the Scoretary of the Treasury you will recard your- 6010 dotached from duty 00 Assistunt to the Choirman of the Interdopart= montal Committee for the Voluntary Payroll Savings Plun for the purchase of for Savings Bonio, Office of the Secretary of the Treasury, Tronsury Department, and from such other duty no may have you, will report is the Chiof of the Bureau of Supplies and Accounts, Wavy Depart= runc, for tomporary duty. RANDALL JACOBS Copy to: DuSCA. Jacket Copy Pink Copy Pers-3107 Poro-3101 166900 1st Endorsement Pere-318-ING September 15. 1943 Treasury Department Delivered. Daty completed this date. Secretary of the Treasury 272 SEP 1 6 1943 To New York Dairy Farmers: As producers of one of the most vital Victory foods, you are well sware that the war is being fought not only on the firing line but on the factory and farm front. Unlike most factory workers, you must not only operate but also finance your farm plant, hence you have an added reason to invest in War Bonds-to store up credit for future hard, equipment and building replacements. In spite of labor and equipment shortages, dairy farm returns are now at a high level. Much of this return you are receiving, however, is not real income but a return of working capital. Normally you would be using increased returns from good years to replace hard stock, to repair and replace buildings and equipment. But because of urgent war needs, many replacements are out for the duration. This period of favorable returns furnishes you an excellent opportunity to "Back The Attack of our boys "over there" and strengthen your own farm future "ever here." The War Bonds you invest in today help finance the war and your future too. There are many ways to determine the sise of your War Bond invest sent. Some farmers estimate the wear and tear on their land and equipment and invest the amount in bends as "depreciation reserves." Others invest in bonds a certain percentage of each milk check, cream check, or other farm produce check. still others invest now in bonds for the things they have always wanted and are unable to buy because of war restrictions. Through bond purchases they are postponing, but assuring, the later possession of a new car, home, landscaping, or interior decorations. Another good reason for investing in War Bends is to build up insurance against lesses resulting from such hasards as flood, drought, insect posts and diseases. I sincerely recommend that you follow a four-point wartine program as endorsed by agricultural leaders: First, produce all you can) second, get your debts into shape, third, avoid speculation; fourth, save all you can-in War Bonds. (Signed) Henry Morgenthan, Jr. Henry Morgenthau, Jr. Secretary of the Treasury 273 June Price of $3.03 U.S.A THE MARKET ADMINISTRATOR'S New York Metropolitan BULLETIN Milk Marketing Area Federal Order No. 27 C.I. Blanford, Administrator as amended 205 East 42d Street, New York 17, N. Y. Revised State Official Order No. 126 Vol. 3, No. 12 June & July, 1943 Within the last two months, the pricing provisions of the federal-state marketing orders governing the handling of milk produced for distribution in the New York metropolitan milk marketing area have been twice amended by the favorable votes of dairy farmers in Amendments Revise Pricing in New York's Milk Orders successive referendums. The first of the amendments. styled Amendment No. I to Federal Order No. 27 by the War Food Administration. revised primarily the formula for determining the price of milk used in making cheddar cheese (Class IV-B). Favored in the final count by a producer vote of 32,163 MARKET ADMINISTRATOR MOVES TO NEW ADDRESS IN NEW YORK Quarters Now Located at 205 East 42d Street The office of the Market Administrator of the New York metropolitan milk marketing area is now located at 205 East 42d Street, and mail to the administrator should be addressed, as follows: Market Administrator to 768. the amendment became effective May 16. Favorable votes were 97.67 per cent of the qualified ballots. Designated Amendment No. 2. the second revision added an entire new section, 927.10. to the federal order which, in effect, prevented producer prices from decreasing as a result of the rollback in butter prices directed by the Office of Price Administration A final tally of the producer vote showed the amendment was approved 31,505 to 60. Qualified votes in the affirma. tive were 99.81 per cent of those cast. The text of each amendment has been printed and distributed to handlers, cooperatives and interested persons in the New York milkshed. Additional copies are available at the office of the Market Administrator. Issued May 10 by Chester C. Davis, then War Food New York Metropolitan Milk Marketing Area Administrator, the first revision was approved by James F. Byrnes, then Director of Economic Stabilization. Fred 205 East 42d Street New York 17, New York ment No. 2. and it was issued June 21 by Jesse W. Tapp A new telephone number also has been assigned to the administrator. and it is: MUrray Hill 2-3103. M. Vinson. successor to Mr. Byrnes, approved Amendas Acting War Food Administrator. (Continued on Page allocation of New York's Winter Supply Demands for milk from the metropolitan pool for fluid and manufacturing uses are at an all-time high. These extraordinary demands, arising largely outside today a question mark - a large, black question mark! the peace time orbit of distribution of the New York If the answer were production and production for the milkshed, could create a crucial condition next NovemNew York market alone, the probabilities favor an ber when production is at its seasonal ebb. The plain opinion that the metropolitan market could travel fact cannot be escaped that the milkshed cannot prothrough the short season with little inconvenience and duce enough in the short season to satisfy all calls for perhaps with an ample margin beyond its requirements. milk. A short supply means But production is not the only simply that the markets A statement by the Market Administrator, New problem involved in maintainoffering dealers the largest York metropolitan milk marketing area, at a food ng an adequate supply. Nor profit will get the milk while forum sponsored by the Dairymen's League Co. New York City the sole other markets go begging. market that is looking to its operative Association, Inc., in New York, N. Y. (Continued on Page 4) Whether New York City will be able to command enough milk in November to supply its fluid needs is ikshed for supplies. THE MARKET ADMINISTRATOR'S BULLETIN Page 2 June July. 1943 COURT UPHOLDS RECLASSIFICATION OF CREAM USED IN MAKING BUTTERMILK AT WADDINGTON Allegations of the Waddington Milk Company Inc., that reclassification of its receipts at a higher price forced company to pay more for milk than competing handlers contrary to the legal intent of the New York marketing order have been denied in an opinion from Judge John Bright of the United States District Court, Southern District the of New York that concluded with the observation that the higher cost "merely establishes the fact that the other handlers had been too leniently dealt with. Agreeing that the Agricultural Marketing Agreement Act limits the price-fixing powers of the Secretary of Agri- culture to the establishment of minimum prices "uniform to all handlers. Judge Bright declared however, of doing business. The controversial revaluation which added $1,142.55 to the cost of the milk received at the company's plant at Waddington N.Y. in July, October November and December 1939. stemmed from the company's practice of adding cream to buttermilk manufactured from skimmilk at that plant. The milk from which the buttermilk and the cream were made was received at that plant. The milk from which the added cream was separated reported as fluid cream (Class II-A). but the Market Administrator revalued it in Class I. the highest priced class in the marketing order, because the cream was embodied in a product that when it left the plant for distribution in New York City, was neither whole milk nor cream Reclassification was based on the "catch all' provision of the order which places in Class any milk used a form for which a specific class has not been es- tablished At the time of the reclassification cultured milk drinks of which buttermilk is one were unclassified Judge Bright declared that "the uncontradicted facts seem to me to compel the determination and classifi- cation made Judge Bright disposed of the argument that the milk should have remained in Class II.A because it was cream on hand at the plant by declaring that the provision of the order classifying cream on hand merely referred "to cream on hand at the and of the month. to be Class II-A milk, the opinion said, would have to be utilized in the form of cream. The milk was not utilized as cream. It had ceased to be cream or whole milk, The form in which, and the pur- pose for which it was used was buttermilk. It was utilized at the plant to make buttermilk and it was of THE MARKET ADMINISTRATOR'S BULLETIN Page 3 JUNE PRICE OF $3.03 CREDITED FLUSH SEASON WITH NEW SERIES OF PRICE AND YIELD RECORDS Announcement of a uniform price of $3.03 a hundredweight for June rounded out the 1943 flush season with iform prices of $3 or better and assured prices higher than that level through September to complete the first twelve months of the operation of the New York federal-state marketing orders in which consecutive uniform rates have exceeded the three-dollar mark. The series began last October with $3.01. will The flush season prices twin rates of $3.04 for April and May and $3.03 for the final month were the direct result of the action of the United States Department of Agriculture in suspending the seasonal variation in the formula for figuring the price of fluid (Class milk does such uniformity depend upon the method moved therefrom as such And buttermilk is not classi fied separately in any of the subdivisions order. Cultured milk drinks are now classified in Class or Class II.A. depending on the amount of butterfat June & July,1943 the plaintiff (Weddington Milk Company) pay more for the milk than another handler performs the two operations of different plants, though both use the milk for the same purpose. accomplish the same result, and sell in the same area." The court. however, refused to agree that the higher cost was discriminatory and contrary to the provision of the Agricultural Marketing Agreement Act specify. ing that marketing orders should fix minimum uniform prices which all handlers shall pay. Commenting that a superficial conflict existed between the ruling and the law. Judge Bright cited the interpretation of the Do partment of Agriculture that 'uniformity is required only as to handlers doing business in the same or similar way. The department further argued that as the company elected to make its cream-enriched buttermilk of the plant at which the milk was received instead of ship ping cream to New York City for that purpose. it must therefore bear the burden of the classification that resulted therefrom This leaves as the remaining question that of alleged they contain. It falls. therefore, within the catch all' clause.' Pointing out that reclassification increased its cost of making buttermilk the company declared that other handlers could buy cream to manufacture buttermilk of equal quality paying only the Class II.A price when the cream was separated at another plant. Judge Bright agreed saying: It is clear that the ruling makes November 1. 1942 assured dairy farmers of $1,737,294.53 in dairy form income they would not have received if the lower price had taken effect. The additional income was worth 9.8 cents a hundredweight on all the milk in the New York pool in April, 9.5 cents in May, 8.9 cents in June. And the uniform rates. of course, would have been less by those respective sums if the seasonal variation had not been suspended Aided by the additional income flowing from the higher fluid price. the New York pool set a record in farm value in May and then bettered it when the June return reached an all time high. April deliveries how ever, yielded a farm return of only $17,514,354 and fell somewhat short of matching the record yield of $17,800,000 for May 1942. April managed neverthe less, to earn . record with its rate of $3.04 According to a compilation of farm prices prepared by Cornell University, farm prices of April milk since 1910 have never exceeded $3. and that figure was reached only COUNTRY MILK PLANTS CHANGE HANDS Changes in the ownership of four milk plants in the New York milkshed and one pasteurizing plant in New York City have been reported to the Market Admin. istrator in recont weeks. Four of the transactions were purchases and the fifth was the result of merger Titles to the milk plants at Wallingford and West Pawlet, Vt. were transferred June I to the Vermont Milk and Cream Company Inc. The former operators of the plants were. respectively, Vermont Farms, Inc. and Pawlet Creamery Corporation Borden Farm Products Division of the Bordon Com pany also became on June the owner of pasteurizing plant at 798 East 133rd Street New York, N. Y. The plant was formerly operated by C. Fayen. Middletown Milk and Cream Company. Inc., is now the handler of record of the plant at Fort Edward N. Y., which was operated by Dellwood Products Corporation The corporations have merged and the transfer title became effective June 1. Muller Dairies Inc., has reported the purchase of the plant of the Brescia Milk Company Inc., at Mont- discrimination or arbitrary classification," Judge Bright concluded The classification not was arbitrary but in conformity with the act. If it was correctly made in April 1919. as against the plaintiff and have 10 held it was not that of May 1942 to reach a high net farm return of change in ownership was effective July 1. discriminatory. The fact that other handlers who mix cream and skimmik at different plants are charged less does not establish discrimination against the plaintiff, $20,166,113.21. June shattered that record, however when the farm value of the later pool. based on preliminary figures. mounted to $20,873,699.62. The net County has been granted by that county's health de The value of May deliveries however, soared above if the classification as to him is correct. values of the April and May pools include butterfat Prior the argument before Judge Bright. Wadding for Milk Company appealed to the Secretary of Agriculture from the Administrator's ruling. The Secretary sustained the reclassification and the company thereupon brought suit in the Federal District Court. and location payments and have been adjusted to the actual zones of delivery. The preliminary evaluation of MT. JOY COOP PAYMENTS SUSPENDED Cooperative payments due Mount Joy Farmers Co the Otherwise the fluid rate would have dropped 25 cents from $3.50 to $3.25 a hundredweight. Maintaining the rate at $3.50 where it had been since operative Association of Mount Joy. Pa. have been suspended by the Market Administrator and will be held 13.5 per cent for May to a high of 29.2 per cent for June The gain for April was in between at by the Market Administrator for distribution to five 21.5 per cent. The farm value of the 1942 flush pools were: April, $14,410,839.71 May. $17,772,306.38 and June $16,158,418.28. The letter evaluation is figured on basis comparable to the preliminary farm return from the current June pool. operating cooperative were suspended on the ground that the association has failed to meet its cooperati obligations under the federal-state marketing order and does not operate the plant to which its member deliver milk The suspension was effective June 24. partment to the plant of Mobriham Dairies Cooperative Inc., at Brier Hill, N.Y. CHENANGO PAYMENTS AWAIT FIVE PATRONS ruled on the qualification of the association Payments to the association which has been collecting Temporary approval to ship milk to Westchester the June pool does not contain location payments from handlers and has not been adjusted to delivery zones. Gains in farm income in the flush season ranged from in the reserve until the Secretary of Agriculture has them at the rate of 4 cents . hundredweight as gomery. N. According to the handler's report, the Comparison of the uniform prices of both years is further indication of the ascent in the value of milk and milk products. The April rate of $3.04 was 32.2 per cent higher than the price of $2.30 for April 1942 he gain for May was 29.9 per cent with this year's rate at $3.04 against last year's $2.34 The 71-cent (Continued on Page 10) Checks in the amount of $32.69 are still being held former patrons of the plant at South New Berlin, N.Y., of Chenango Farm Products Company. Inc., to make up underpayments for milk delivered between Septem ber 1938 and May 1942. Five other former patrons or their heirs have been located and paid sums amounting in all to $36.82 The patrons whose whereabouts are unknown and their last known addresses are, as follows: Grant Lee Binghamton Pearl Lumn and Clyde Nichol South New Barlin and A. Astrom and C. Rollin Lee unknown accounts which have been paid are these Nett Cock The L J. George Leon Hurlburt, Evelyn B Schou and Lloyd Gates BULLSTIN CODE ANTWORS FOR VICTORY Buy United States War Bonds and Stamps THE MARKET ADMINISTRATOR'S BULLETIN June July 1947 THE MARKET ADMINISTRATOR'S BULLETIN 1943 July, COMPUTATION OF UNIFORM PRICE OF $3.04 Per hundredweight of milk testing 3.5% butterfat at the 201-210 mile zone Per hundredweight of milk testing 3.5% butterfat at the 201-210 mile zone MAY 1943 APRIL 1943 HANDLERS MUST PAY $20,262,860.90* I II-C 2,930 3,324 32,934,609 5.86 2.550 416,843 Plain condensed Fromes desserts and homogenized mixtures Storage cream $ 11-B 1.13 1,326,292 Cream marketing area Milk drinks prices 7,468,727.91 1,099,431.37 3,240 6.03 6,364,791 $3.500 .08 1,268,926 .23 2,430 16,499,227 8.57) Transportation $ 22,379.84 13,670.74 for milk 839,832.53 10,629.50 25,851.86 8,399.90 M-1.11 42.65 11,334.26 30,834.90 1,424.48 131.55 32,127.83 1,491.7) 10,864.67 7,274,463 2.158 1.29 156,982.91 5,942.91 5,162.57 -10.189.82 homogenized mixtures Cream B-E Frozen desserts and homoganized mistores Cream 9,507,302 1.69 7,580,919 1.35 2.154 2,941,651 52 002 13 072 4C 214 homogenized mixtures 12,828,406 2.28 Cream cheese 11,832,746 211 Evaporated 35,028,707 3,249,320 Milk powders 2.058 7,376.18 5,961.65 206,201.82 037 1,684.65 4,991.06 156,617.29 028 2,047.56 $8,489.84 010 4,816.66 162,480.75 024 6.235 .58 15.763.435 2.80 39,917,602 2.683 7.10 26,945.14 5,353.97 27,924.55 1,070,989.26 41,840.40 Cheese-asce cream cheddar Butter Cheddar cheese 5,355,573 95 40,829,324 7.26 7,992,933 Total 562,322,760 Skim milk-Class V.A V-B 1.47 796 2,920,945 78.957.155* Total value 143,690.02 7,506.73 29,458.82 1,254.24 - $16,075,492.26 $435,946.00 30,407.04 1,041 1,066,269.92 607 9,354.11 8,756.76 733,294.66 169,929.84 2.126 100.00 7,774.75 $17,192,169.22 $435,946.09 262,429.24 249,957.58 966,765.35 - -a -a 92,533.23 450.857.51 1,112,829.66 -a 151,196.75 -a $-23,159.22 762,753.48 168,675.60 $16,489,279.13 10,077.91 329.13 1,086,269.92 $-23,488.35 $17,604,626.96 MS drinks Plain condensed Frozen desserts and homogenized mixtures Shorage cream 2,930 5.26 874,219 684,778 80,051,634 Cream special cream 7,935,267.76 1,100,966.71 190,515.60 II-D 044 016 080 198 1.85 Cream 4,634,422 72 Frozen desserts and homogenized mixtures 2,700,536 IVA 027 136 030 $2,932 005 2.30 Cream cheese 14,049,227 2.18 Evaporated Sweetened condensed 39,433,828 7,042,582 Milk chocolate 12,757,336 IV-B Skim mil-Class V.A V-B 7,947.33 905,507.28 189.95 24,097.04 004 201.25 17,363.59 002 $83,649.31 25,029.61 141 093 -19,690.64 2,024,055.03 2.158 257,627.48 9,112.51 2,581.07 264,158.92 041 2,172 349,745.65 10,905.46 -10,089.67 350,561.44 054 100,659.65 2.058 830.66 1,018.94 98,471.37 015 1,935.74 55,134.25 008 120,471.02 6,139.46 3,513.88 123,096.60 019 304,592.71 20,576.40 -10,069.52 315,099.79 049 289,133.09 20,865.61 -10,415.97 299,582.73 047 1,060,375.63 44,726.27 12,132.08 1,344,650.58 77,362.47 2,689 108,804.63 7,414.55 1,796 631,894.69 30,089.58 2,126 118,725.64 748.55 265,738.76 2.295 $18,250,917.69 00.00 2,390,169 1,041 24,881.68 219,924,137 407 1,334,939.54 $19,610,738.91 $33,837.81 for 314 1,492.96 $5,577.03 2.058 24,217.66 1.80 601,986.62 98,490.96 343,044.77 5.45 6,692.30 1,945,254.71 189,375.03 Total value addition to this amount handlers required to pay $30,840.50 for premium to nearby producers 008 924.73 63 11,579,031 643,936,480 030 $2,629.90 1,614.51 1.98 5,584,461 Total .180 194,435.19 22,292.58 7.77 35,183,446 Chaddar Cheese 1,479.03 $1,267 16,640.11 1.09 4,046,286 Butter 1,159,972.48 2.550 6.12 50,005,600 (Cheddar Cheese 8.156.018.49 996.57 91 14,800,423 193 $3.100 42 5,853,791 cheddar - 3,680.97 49.173.39 12.43 2.50 Ma powders Cheese-dicapt cream III 2,440.56 28,326.39 Con per cwt $1,633.33 Frozen desserts and 047 45,324.80 pay for milk 2,430 16,102,470 homogenized mixtures $192,424.34 Transportation 864.281.22 3.71 11,938,252 homogenized mixtures butterfall 1,441 11 24,018,490 Cream 1.76 5,269.79 15,196.43 3,240 1.01 1,497,658 33,993,381 $3.500 5.21 Frozen desserts and 029 163,293.00 264,008.60 243,517.91 939,820.21 87,179.26 422,932.96 6,502,239 area IIF III IV-8 BA 35.21 33,980,454 Cream marketing area 006 204,787.29 60,539.18 162,027.62 2.058 1.40 226.721.936 Outside federal Total amount Class prices Relief ILE 7,873,062 Sweatened condensed Milk chocolate IV.A CCI JEJ 161,993.28 Frozen desserts and 11-F 44,882.62 857,284.49 1,205,170.98 932.54 le marketing area Outside non-federal 014 406.633.32 Frozen desserts and II-D $1.35 189,301.82 794.26 43,825.47 - Differentials for Velye at Pounds Name product Can 1,150,446.24 1,321.71 Cream special cream area 7,627,316.17 186,488.38 44,088.36 400,931.22 1,171,535.37 2.93 48,211,332 butterfall $136,208.42 37,344.13 $ Relief Outside federal II-A 37.95 33,933,067 Extra prices mill with 213.392.226 Total amount I marketing area Outside non-federal Differentials for 1 Name product ration Value at Pounds of Per cent Class $ HANDLERS MUST PAY $17,604,626.96* Class Page 9 COMPUTATION OF UNIFORM PRICE OF $3.04 1 Page 8 1,631.83 - $684,665.7 $684,665.7 -- 1,105,101.90 201,507.11 367,262.43 172 031 .057 -a 1,422,013.05 ->- 661,984.27 103 119,474.19 019 --a -32,479.97 116,219.18 267,370.59 $18,903,103.44 24.17 63.76 --- -32,543.71 221 .018 042 $2,935 004 1,334,939.34 207 $20,262,860.90 $3,146 hearting applied **Corrected figure HOW THE UNIFORM PRICE IS FIGURED HOW THE UNIFORM PRICE IS FIGURED Pounds of milk Pounds of mill Total amounts from totals above Value of adjustment 562,322,760 per cwt. $17,604,626.96 Less: Payments to producers for butterfall in excess Rate percent $3.130 Total amounts from totals above 61,721,093 $338,135.30 -124,644.25 643,936,480 67,675,612 -0.000 Add: Freight adjustment to 201-210 mile zone 17,151,847.41 63,897.99 Add: Freight adjustment to 201-210 mile zone 353,967,786 17,215,745.40 96,361.53 403,630,803 Add: Cash in producer settlement fund +214,176.94 17,333,560.81 Less: Reserve Payments to producers at the Uniform Price 562,322,760 $3,146 $-.077 -021 136,652.06 -635,626.04 -098 19,627,234.86 79,019.63 +.012 19,706,254.49 -110,137.23 -017 19,596,117.26 1.04 +251,898.51 .019 19,848,015.77 1.082 -272,346.75 042 3,048 3,060 3,061 -017 Add: Cash in producer settlement fund* 17,119,383.87 Rate per cet 3,050 +.011 Less: Payments to cooperative associations Less: Payments to cooperative associations Adjustment per cet $20,262,860.90 $ 498,973.98 of 3.5 per cent $-.058 -022 -452,779.55 Total value Less: Payments to producers for butterfat in excess Payments of premium to nearby producers of 3.5 per cent Payments of premiums to nearby producers Adjustment Total value Value of adjustment 3,044 +.039 3,032 -238,948.91 -047 $17,094,611.90 $3,040 Less: Reserve Payments to producers at the Uniform Price "include cheese subsidy payments of $3,314.47 643,936,480 $19,575,668.99 $3,040 THE MARKET ADMINISTRATOR'S BULLETIN Page 10 June THE MARKET ADMINISTRATOR'S BULLETIN June July, 1943 Page 11 PREMIUMS TO NEARBY PRODUCERS Milk of average butter fat test (3.64588 per cent) received in April at the average distance of delivery from New York City (229.6 miles) was worth $3.09 a hundred April 1941 weight at the values determined by the federal-state orders. Pro- ducers the price of $1.92 was computed for September margin by which this year's June price exceeded the rate of $2.32 for June 1942 is a rise of 30.6 per cent. Gains in price surpassed gains in farm income in April and May because the pools of each month contained less milk this year. The volume in April was down 7 per cent. The decrease in pool production in May. 388 4,786 Computation of the uniform prices of April and May shown in side-by-side tables on pages and 9. indicates that increased use of milk in the higher valued classes in May was sufficient in the main to hold the May at the April level The increase in volume of 81,613,720 pounds from April to May in accordance with the ad vancement of the flush season, ordinarily would have reduced the uniform price in the later month however, exceeded that of a year ago by one-half of Class prices in both months remained exactly at the gain in price because June milk this year contained less butterfat. pooled mill Pro. payment 100 Dollars 2,553,820 62,826,890 1,353,983 10 Total 1,276.91 125,653.78 5,274 66,734,693 Pounds -0- 66,283,447 4,854 4,061.95 130,992.64 4.935 -a 121,038.09 1,202,055 3,606.16 61,721,093 124,644.25 LOCATION AREA RECEIPTS cream Class 11-B). Fluid milk, of course, is the ranking price in the order. while Class II-B is the third primary The milk delivered in April and May to plants in the computation tables, but the value of remaining metropolitan milk marketing area and the handlers fluid price increases in the orders regulating those mar. The larger part of the sum was paid for May the quantity manufactured into whole milk powder in deviation of the three forecasts The May pool weighed products associated together in Class III. The price April and May. The April production of dried whole part of May was $2.126. That higher valued classes absorbed the bulk of the seasonal increase in production is attested by the rise of 13,400,000 pounds in volume of fluid milk in the mar. keting area and nearly 40,000,000 pounds in the volume utilized as ice cream in New York City and storage Next Page) CONSOLIDATION OF HANDLERS REPORTED With a rate of $3.04 for March likewise the spring The Market Administrator has been informed that Mor. pool-paid premiums on those deliveries came to $136,652.06 at the rate of 30 cents a hundred weight in the marketing area and 20 cents in the high-valued classes, the most significant shift in the viage of New York-area approved milk was the rise in nearby counties The handlers paid additional premiums in the amount of $33,837.81 at the flat milk in the New York milkshed required 39,917,602 pounds of milk and was 367.2 per cent larger than a rate of 5 cents a hundredweight. May receipts at location-are plants incident year earlier. In May. the whole milk powder plants absorbed 50,005,600 pounds, which was 405.3 per cent more than the quantity dried last year. ally were less in 1943 than in either 1941 or 1942. The producers who shared this year's May pay ments numbered 4,702 and also were fewer than For the use of the milk in all the various classes. the handlers accounted to the area's equalization fund for milk worth $17,604,626.96 in April. In May. their utiliza- in 1941 and 1942 when 5,195 and 4,932 dairy farmers delivered The payments for April deliveries were shared tion required them to account for $20,262,860.90 in approved milk. Aside from the sums deducted each month to set in reserve for the succeeding pool, vir- among 5,637 dairy farmers who delivered 61,721,093 pounds of milk The number of producers and the pounds of milk that they delivered fually all the money represented obligations directly to dairy farmers. The sole exception was the amount taken risania Farm Products Inc., and Public Farm Products Inc., New York City handlers have been consolidated out each month for cooperative payments. In April, it The consolidation was effective June 1. and the organiza- . hundredweight. The amount in May was $110,137.23 and also was equivalent to 1.7 cents a hundredweight. tion will operate under the name of Morrisania Farm deliveries which weighed 67,675,612 pounds The Aside from the increased utilization in fluid and other of evaporated milk, whole milk powder, and other last 16 days of May. The price in April and the first amounted to 129,396,705 pounds. hundredweight. deliveries would pot exceed 635,000,000 had the widest shifted upward from $2.683 to $2,689. Amendment of that received the milk Deliveries in those months skimmilk. expressed only as skimmilk for manufacturing volume of 562,000,000. The estimate that the May the federal order formula pricing milk used in cheese making (Class IV-B) lifted the rate to $2.295 for the the producer settlement fund of the New York use outside the marketing area (Class V-B) is 60.7 a mainly in New Jersey and Pennsylvania (Class II.DJ rose utilization been in such adjustment that the same uniform rates applied to successive months, and that was when 87 4,473 BELOW 1941 AND 1942 LEVELS from $2.154 to $2,172. An increase of six mills was recorded in the price of milk used in the manufacture of identical uniform prices in three consecutive months 3,251.82 135,818.65 (Continued from Page 10) unbroken in 1943. The April pool, first in the flush series Only once before had production class prices. and 1,083,942 67,367,385 60,519,038 4,586 Dollars JUNE PRICE OF $3.03 SETS NEW RECORDS contained 562,322,760 pounds against an estimated of 1943 produced unexpectedly an unprecedented series 132,566.83 Pounds trend in pricing in flush seasons The value of fluid milk kets. The price of milk used as cream and ice cream cent measured the difference between the May estimate of $3.03 and the June estimate of $3.02 and the prices that applied to each of those months Dollars Total payment producers $326,994.67 in location payments from 1942. however, came in May. and that month's volume of 725,304,622 pounds is record that went the estimates were projected. The April estimate of $3.01 was three cents under the price, but only one Total pooled in April and May. incidentally, was only slightly less than the uniform price. The class is priced at $2.43 in sold in federal markets other than the metropolitan period of cold rainy weather. accounted for the un- Pre ducars the marketing area and adiacent territory earned area advanced from $3.324 to $3,448 as a result of expected rise. The June volume of 672,057,283 pounds only 57,283 over the estimated quantity. The forecasts in price also were within close range of the actual prices that were computed three weeks after Total payment class from the top. The value of the milk in Class 11-B the peak was reached in June. The crest in production last few days of the month following an extended - - pooled will same level with the exception of the rates applying to four classes. Those prices, moreover, were higher it May than in April in contrast with the usual downward With the advance of the flush season, each pool successively contained a larger quantity of milk until 643,936,480 pounds. and a rapid climb in production April 1943 No. e Total ducers 10 as compared with May 1942. was even larger. The pool report showed 11.2 per cent less milk The June volume one per cent. but the gain in value fell short of the Total Pounds Cents October 1940. (Continued from Page 3) Total 8 JUNE PRICE OF $3.03 SETS NEW RECORDS April 1942 No of No. likewise were less than in 1941 and 1942. The payments the producers received from the pool came to $124,644.25 The handler paid premiums amounted to an additional $30,860.55 amounted to $96,361.53 and was equivalent to 1.7 cents Products PREMIUMS TO NEARBY PRODUCERS COMPARATIVE STATISTICS Deliveries per day dairy (pounds) Uniform price per hundredweight Number of handlers Number of plants Number of producers April 1943 531,031,053 221,975,433 562,322,760 213,392,226 643,936,480 226,721,936 May 1942 May 194 725,304,622 700.078,10 218,519,532 215,175.44 317 347 383 407 376 $3.04 $3.04 $3.04 $2.34 $1.83 134 135 135 143 464 462 53,967 Rate No of payment Pro per cw ducers Cents 30 462 479 54,268 57,477 Total Total pooled milk 3,018,200 68,480,007 151 99 53,951 No. of Pounds 391 1,562,617 payment Total 5.195 73,060,824 Pro- Total Pounds Dollars Total payment ducers Total Pro- ducers 136,960.14 4,687.85 143,157.09 4,351 Pounds Dollars 4,932 72,810,126 145.660.65 216,542 3,649.67 74,046,868 149,310.28 Total pooled milk 1.509.10 492 60,131 May 1943 May 1942 May 1941 May 1943 . Total deliveries (pounds) Class in marketing area (pounds) March 1943 66,374,753 4,614 # 4,702 1,300,843 749.52 102.54 10,652.04 THE MARKET ADMINISTRATOR'S BULLETIN Page 12 June July, SEASONAL VARIATION IN DAILY TOTAL DELIVERIES AND UTILIZATION APRIL 1942 MAY June July, 1943 THE MARKET ADMINISTRATOR'S BULLETIN Page 13 1943 UNI ORM PRICE OF $3.04 PER HUNDREDWEIGHT BY ZONES & BUTTERFAT, APRIL & MAY 1943 Million LEGEND Pounds Butterfat test milk 3.0% (MP All Other Classes 1.10 24 Class II-A Cream 2.98 11.20 Class Outside 21.40 41.60 Class - Mktg. Area & Relief 20 16 8 4 0 July Aug. Sept. Oct. Nov Dec Jan Feb. Mar Apr. 3.14 $3.19 3.6% $3.23 3.18 3.22 3.7% 1.8% 3.9% 4.0% 4.1% $3.27 $3.31 $3.35 $3.39 $3.43 3.26 3.30 3.34 3.38 3.42 4.2% $3.47 43% $3.51 4.4% 4.5% $3.55 $3.59 3.58 3.46 3.50 3.54 3.45 3.49 3.53 1.57 3,465 3.505 3,545 3.01 3.05 3.09 1.13 3.17 3.21 3.25 3.29 3.33 3.37 2,985 3,025 3.065 3.41 3,105 3.145 3,185 3.225 3.265 3.305 3,345 3,385 3,425 3.135 3,175 3,215 3.255 3,295 3.335 3,375 3,415 3,455 3.32 3.36 3.40 3.44 3.48 3.52 2,975 2.96 2.91 2.95 3,015 3,055 3.091 3.00 3.04 3.08 3.12 2.99 3.03 3.07 3.11 3.14 3.20 3.15 3.19 1.24 3.28 3,495 3,535 3.23 3.27 3.31 3.15 3.39 3.43 2.94 3.47 2.90 2.98 3.51 3.02 3.06 3.10 3.18 3.22 3.24 3.30 1.14 2.93 2.97 3.38 3.43 2.89 3.46 3.01 3.50 1.05 3.09 3.13 3.17 3.21 3.25 3.29 1.33 2,875 3.37 3.41 141-150 3.45 1.49 3,071 3.115 3.155 3.195 1.235 3,275 3.315 3.355 3.395 3,435 3.065 3.109 3,145 3.185 3,225 3.265 3.105 3.345 3,385 3,425 3,465 3.215 3,255 3.295 3.335 3,375 3,415 3,455 3.44 2,865 2.855 2,915 2,905 2.895 2.955 2,945 2.935 2,995 2.985 2,975 3.035 1,021 3,015 3,055 3.095 3.135 3,175 3,475 191-200 2.84 2.88 2.92 2.96 3.00 3.04 3.08 3.12 3.16 3.20 1.24 3.28 3.32 3.36 3.40 301-210 2.84 2.88 2.92 2.96 1.00 3.04 3.08 3.12 3.16 3.20 3.24 3.28 3.32 3.36 3.40 1.44 3.15 3.19 3.23 3.27 3.31 3.35 3.39 3.43 3.14 1.18 3.22 3.26 3.30 134 3.38 3.42 2.83 2.87 231-250 2.82 2.86 2.90 2.94 2.98 251-280 2,805 2,845 2,885 2,925 2,965 1.045 3.085 281-290 2.795 2.835 2.875 2,915 2,955 2,991 3,035 3.075 291-320 2,785 2,865 2,905 2,949 2,991 3,025 211-230 June 3.10 $3.15 3.5% 111-120 171-190 May 3.06 $3.11 3.4% 121-140 151-170 12 3.02 $3.07 3.3% 2.97 2.92 71.90 $3.03 3.2% 2,945 2.935 91-110 Apr. $2.99 3.1% 2,825 2.91 2.95 2.99 3.03 3.02 1.07 3.06 3.11 3.10 3.065 1.125 3.165 3.205 3,245 3,283 3,325 3.365 3.405 3,115 3.155 3.195 3.235 3.275 3.315 3,355 3.395 3.105 3,145 3.185 3.225 3,265 3.305 3,345 321-340 3,385 2.77 2.81 2.85 2.89 2.93 2.97 3.01 3.05 3.09 3.13 1.17 3.21 3.25 3.29 3.33 3.37 341-370 2.76 2.80 2.84 2.88 2.92 2.96 1.00 3.04 1.00 1.12 3.16 3.20 3.24 3.28 3.32 3.36 3.35 371-400 2.75 2.79 401-430 2,735 2,775 2.83 2.815 2.87 2,855 2.91 2,895 2.95 2,935 2.99 2,975 3.03 1.07 3,015 3.055 3.11 3.15 1.19 3.23 3.27 131 3.095 3.135 3,175 3.215 3,255 3,299 3,335 May HANDLERS SEEK REPAYMENT FROM POOL STATE LISTS CAPPER-VOLSTEAD COOPS Commissioner C. Chester Du Mond of the New York The Market Administrator has announced that State Department of Agriculture and Markets has de the prices of fluid milk, cream. and skimmilk in termined that 29 cooperative associations in the New July. based on on average wholesale value of 46.75 York milkshed fulfill the requirements of the Capper Volstead Act and therefore, are qualified to distribute their net proceeds among their members in accordance with their contracts. The qualified associations are: cents pound for butter in New York City and on average of 11.313 cents a pound for hot roller process dry skimmilk for the thirty days preceding June 25 will be as follows Class Marketing Area Ander Cooperative Creemery. Inc.: Bennington County Co Centre Cooperative Dairy Canalcherie Cooperative Milk Pro ducers Inc.: Chateaugay Cooperative Marketing Association Chanange Valley Farmers Cooperative Company Inc. Clinton Liste Producers Cooperative Inc.: Lewville Producers Dairy Co operative Inc.: Mallory Producers Cooperative Inc.: Mart 20 Class II.A 2.55 Class V-A 1.041* ber and October 1941 and January, February, and DeKalb Creameries Inc., and Potsdam Creameries Inc. who shipped the milk. are joined in the petition with the Carthage handler in contesting the reclassification The milk was shipped from the DeKalb plant at DeKalb March 1942. The Carthage plant is not approved Nearly all the shipments were used in making butter and, therefore, were reported in Class IV-A, according to the petition. The handlers contend that the Market Administrator was in error in classifying the New York. area approved milk in proportion to the use of all milk received at the Carthage plant. They further assert that unapproved milk received from producers at Carthage was devoted exclusively to the manufacture of cheese and cheese products and that the administrator should Junction, N. Y., and the Potsdam plant at Potsdam recognize the specific use of the pool milk in a less N.Y., both New York-area approved plants in Septem- valuable class is protested in petition to the Secretary of Agriculture seeking refund of $7,547.48 from the producer settle. ment fund of the New York metropolitan milk market. ing area. *The Class Non federal price is determined by adding to Association Inc.: Fly Creek Valley Cooperative Inc.: Hillsdale Producers Cooperative Inc.: H. I Farmers Cooperative Inc.: 2.93 Class -Non-federal operative Creamery Inc.: Boonville Farms Cooperative Inc. Boving County Dairymen's Association: Dairyman's League Cooperative $3.50 Class Relief Reclassification of milk shipped in two months in 1941 and three months in 1942 to the manufacturing plant of Hygrade Food Products Corporation at Carthage, N.Y. the unform July "Class V-A skimmull marketed for fluid in the Marketing ville Milk Producers Cooperative Association: Milton Cooperative Dairy Corporation Montgomery Eastern Dairy Cooperative Inc. Mount Joy Farmer's Cooperative Association New York State Guerntay Breeders' Cooperative Inc. Ontario Milk Producers Co operative Inc.: Poland Milk Producers Cooperative Association Inc.: Preble Mill Cooperative Association Inc.: Producers Co operative Inc Richmond Cooperative Association Inc.: Rock Royal Coopers five. Inc. Schoharie County Cooperative Dairy Inc.: Shawangunk Cooperative Dairies Inc. and Sullivan County Cooperative Dairy Association UNFORM PRICE PRODUCTION PER DAT PER DAIRY Area FOUNDS MA DAY NO KYSERIKE PLANT WITHDRAWN FROM POOL 300 The milk plant at Kyserike N.Y. of Shawangunk Co operative Dairies Inc. a qualified operating cooperative association has ceased to be pool plant approved by the health departments of New York City and West 100 140 is chester County. The withdrawal of the plant was effect five May 4. 2.00 Milk of average butterfat test (3.69372 per cent) received in May at the average distance of delivery from New York City (231 miles) was worth $3.10 a hundredweight at the values determined by the federal-state orders. LSC . THE MARKET ADMINISTRATOR'S BULLETIN Jun July, 1943 June July 1943 POOLED MILK BY STATE AND CLASSES MAY 1943 II-C 11,686,261 97.89% B.D 13,524,295 65.22% 11-E 7,401,026 86.52% B.F III 11,191,087 179,987 1.51% - 7,212,597 34.78% 6,352,499 77.41% 22.02% 93,014,268 15.045.440 82.11% 13.28% 28,518,283 3,648,247 81.05% 10.94% IV-B 17,058,239 -0- 99.39% 513,427,969 79.73% 83,720,054 -0- -0- 1,197,640 57% -- 137,464 .12% 17,632.003 - 1,013 2,717 .01% ---- 2.74% 13.00% 125 12.83% 68,274 -a 22,332,870 1.11% 4,460,871 1.14% 10.68% IVA Total -0- 2,980,675 4.16% 02% -0- 1,083,510 69,791 12.67% 12,507 04% -0- 25,950,838 4.03% 50% and April County 1942 8,554,327 Pounds New York 100.00% 113,285,632 100.00% April 7,347,820 6,906.68 9,688,216 8,900,665 12,476,732 11,716,220 22.3 94,355.85 17.9 23,736,612 607,221.44 721,593.00 183 395,464.48 37.4 643.936.480 Columbia 26,400,932 12,511,755 6,829,332 22,278,988 36,133,142 10.1 100.00% Charango Clinton Cortland Delaware Harkimar Jefferson Lawis 13,317,993 13,401,185 Oswage issues into two has effected a saving of practically one sixth in the quantity of paper annually used to publish the Bulletin. Thus, the Bulletin has reduced its use of paper in keeping with the requirements which the government has im- Otsego Renselear Sarahoga posed on private publications. POOLED MILK BY STATES AND CLASS. APRIL 1943 13,975,756 Founds of pooled milk and percentage of class total I 11-B II-C 11.0 11-5 75.76% 12.92% 27,990,026 83.92% 1,066,034 3.20% $8,052,100 7,278,869 87.99% 11.03% 6,814,291 399,278 93.67% 10,290,956 6,771,707 60.22% 39.63% 9,018,790 III IV-A IVE -0- 19.260.111 5,250,889 78.10% 21.29% 81,101,961 13,904,234 81.66% 14.00% 35,440,364 16.80% 4,652,223 7,992,917 -0- -a 11.39% -0- 59,036 25,558 449.158.864 79.88% 12.88% 648,514 2,595,486 12 -0-0- -0- -0- -0- .03% 62,973 10,814,71 16.03% 58% 100.00% 121,844 24,661.15 .02% -0- -a 4,288,670 4.32% 736,737 1.81% -0- 49% 599 -0- -0- 72,261,422 12.85% 15,598,390 2.77% 22,521,292 4.00% 2,782,792 50% 10,739,726 19,827,253 9,573,930 18,488,598 4,709,165 4,594,306 3,108,848 Washington 7,569,972 Westchester 1,083,942 7.0 1.5 3.6 10.9 6.8 - 35.4 478,726.74 37.7 152,992.16 197,138.92 28.9 $91,260.31 684,715.28 23.7 614.355,14 22.9 145,408.90 189,250.28 30.2 455,955.63 580,730.99 27.4 247,013.70 291,047.43 17.8 456,026.82 108,310.80 23.3 139,666.90 29.0 363,000.35 25.0 272,446.11 25.5 2.5 171,329.67 220,835.12 28.9 10.6 132,456.80 156,743.13 5.0 3.0 10.9 8,803,727 17,388,387 16,444,209 5.4 473,826,310 449,158,864 5.2 1.7 71,503.50 174,109.36 37.3 18.2 89,472.92 25.1 223,311.83 28.3 24,930.67 36,542.47 202,485.72 262,966.23 29.9 399,932.90 499,903.95 25.0 10,898,005.13 13,654,429.46 415,693.98 46.6 25.3 15,812,611 13,674,144 13.5 363,690.05 10,843,471 10,102,543 5.0 249,399.83 313,197.31 25.6 + 23.6 Tioga 14,292,969 13,370,128 9,926,432 8,990,391 33,346,970 84,222,453 72,261,422 8,162,495 6,738,684 Warren 6,753,752 5,837,234 2,855,983 3,022,472 17,772,230 15,598,390 11,550,024 11,239,464 14.3 328,738.29 406,451.89 228,307.94 273,307.89 + 197 22.3 766,980.31 788,096.16 - 14.2 1,937,116.42 2,196,747.23 - 17.4 187,737.38 204,855.99 155,336.30 177,451.91 6.5 9.4 25,924,216 Syster Total $62,053.32 290,435.37 217,077.61 5.3 7,345,784 419,178.94 755,207.96 1,044,027.44 3.5 - 15.8 338,824.55 760,308.29 5.4 2,943,188 1,202,055 2.4 8,650,205 100.00% 100.00 6.4 28.2 771,006.90 347,578.28 2.5 12.4 7.5 23.3 489,632.95 3.0 4.2 10.8 28.1 13.6 + 53 12.2 65,687.61 2.8 13.4 91,883.15 408,761.29 474,191.05 265,650.55 16.0 ermont Addison 40.829,124 562,322.76 16.7 6,225,338 Wayne 100.00% 100.00 37.8 105,529.13 19,102,993 7,264,313 5,156,024 Other Counties Bensington Rutland 100.00 -0- 24,642,367 7,449,116 Total 49,314,631 7992 424,862.98 90,395.20 New Jersey 100.00% 28,192 26,711,093 6,322,126 19,824,158 5,767,687 100.00% 1,732,950 308,227.25 11.7 6,651,833 8,962,043 Other Pean. Counties 7,274,463 17,088.22 -12% 19,173 100.00% 65,979,485 -0- 4.3 - 25,362,069 15,747,590 9,418,157 Bradford Susquehanna 33,351,452 100.00% 1.858 377,553.07 Feensylvania 100.00% 1.02% 15% -0- 100.00% Total 4.23% 4,295,360 98% .81% 83.39% 11-F 6.07% 306,313.84 24,751,358 15,112,099 11,940,801 Total 6.7 - Total 255.016.376 1,064,998.64 3,471,353 34,343,008 Finger Lakes Region Other N. Y. Counties 831,062.27 16,106,347 12,627,625 Uster 1.0 3,930,226 16,599,486 13,056,882 Tioga 473,858.08 12,419,509 St. Lawrence Sulliven 205,488.65 $12,416.72 35,032,850 Schoharie Steuben 157,074.64 30.0 13,788,781 Onandage Orange 287,770.36 6,759,495 14,731,503 dated for June and July. It too has only the usual 16 pages. Consolidation of four 4.0 1.0 13,008,700 25,706,970 Oraida 7.5 15,587,437 Montgomery ILA 24.1 226,402.78 80,029.01 100.00% Conn. & Mass 356,173.09 24.2 + 21.4 185,135.14 however, the issues for March and April were consolidated into a single number of regular size, and this issue (Vol. 3. No. 12) likewise is a consolidated issue Vt 209,963.29 270,580.22 286,964.84 10.8 dated July 1940. Since then the Bulletin has been published regularly. This year, 10,790,869 168,999.81 222,828.97 change Percent 7,447,460 6,484,833 22,523,529 N.J 6.0 8.1 Dollars 3,103,811 Livingston Madison 15,494,623 Dollars Percentage 8,049,354 If ith this issue. the Market Administrator's Bulletin, a government publication, Pe 1943 3,479,522 completed its third year and its third volume. The first issue of the Bulletin was 32.938.188 April 1942 Cayuga Franklin N.Y. Percent April Chamung Greene 193,197,210 change Pounds Brooms Dutchess Class Value of Pooled Milk Percentage 1943 Allegany Cattereuque 17,163,492 3,205,612 Volume of Pooled Milk State 100.00% 100.00% 41% include Columbia and Onondaga also in New York 100.00% 20,738,342 35,183,446 -0- 105,253 ranged Seven cent. other upward In addition counties to Westchester's the gains peak more counties, per than cent they St. Lawrence 100.00% 28,849,650 $30 of 46.6 recorded of 30 per to five northern 11,938,252 100.00% -0- 8.01% Northern New York and Westchester County in the marketing area. Northern counties reported with larger production were Clinton Franklin, Jefferson, Lewis, and 100.00% 104.754.993 81% 5,087,730 2,816,920 100.00 34,767,600 151,774 .53% 4.49% 268,702.74 + I 88.18% 4.46% -0- 11,185,374 + 11.8 82.71% 92,366,155 1,549,129 6.49% + II-A 17,426,265 + 14.27% The 74-cent rise in the uniform price however, was large enough to credit every county but one Cortland New York, with an increased return Rises in returns proved milk in April was spread over nearly all the milkshed with the exception of the five counties in Total + 38,340,876 73.97% 28,757,475 The decrease in the volume of New York-area ap- + 198.749.097 Corn Mass Vt + N.J. Pa + N.Y. Page 15 NORTHERN NEW YORK COUNTIES INCREASED PRODUCTION IN APRIL Pounds of pooled milk and percentage of class total Class THE MARKET ADMINISTRATOR'S BULLETIN + Page 14 ) Other Vr. Counties Total Com Mass Grand Total 9,135,036 4,593,396 25,278,456 3,838,981 604,938,430 8,656,228 2,625,600 22,521,292 2,782,792 562,322,760 42.8 105.648.11 341,679.7 263,149 79,811.2 10.9 $81,404.49 684,647.28 88,296.54 $4,596.88 2.7 5.2 27.5 7.0 210.105.83 13,913,583.89 17,094,611.90 28.6 25.2 24.4 17.8 4.2 22.9 THE MARKET ADMINISTRATOR'S BULLETIN Page 16 June & July, 1943 MILK RETURNS EXCEEDED PREVIOUS YEAR IN MAY Decreased deliveries, moreover, were recorded for every other major county in the milkshed. With the exception of Cortland, where the decrease amounted to 32.6 per cent and was mainly due to the withdrawal of plants to serve other markets, the reductions in volume ranged from a low of 1.3 per cent in Clinton, New York, to a high of 18 per cent in Greene, New York. Gains in the value of the milk delivered in May were recorded for all but one of the milkshed's 43 principal dairy counties. The exception was Cortland County in New York, where the value at the uniform rate. as com- pared with May 1942. was down 12.4 per cent. The largest gain was credited to Westchester County, also in New York, . Value of Pooled Milk Volume of Pooled Milk and County May 1942 Pounds New York 9,628,137 Allegany Broome Cattaraugus Cayuga Chemung Chenango Clinton Columbia Cortland Delaware Dutchess 11,679,563 16,093,571 Greene Herkimer Jefferson Lewis Livingston Madison Montgomery Oneida Onondage Orange Oswego Otsego Rensselaer & Saratoga St. Lawrence Schoharie Steuben Sullivan Tioga Ulster Washington Westchester Finger Lakes Region Other N.Y. Counties Total Pennsylvania Bradford Susquehanna Tioga Wayne Other Penn. Counties Total 1943 Pounds 8,430,322 10,444,426 9,137,163 4,118,056 3 L,485,587 14,083,072 8,189,575 3,486,583 27,232,251 16,094,919 15,884,841 7,349,800 7,222,143 25,862,771 42,627,401 14,222,192 17,432,699 39,761,470 16,941,726 4,780,697 Franklin May 21,531,342 32,375,129 13,119,752 16,502,764 3,920,982 18,703,933 30.103.237 18,710,026 8,111,293 17,608,685 7,297,986 29,328,622 18,021,864 32,411,557 24,347,030 15,659,875 27,898,983 Percentage change Percent - 12.4 - - 10.6 - 10.4 12.5 - - 15.3 1.3 18.0 396,436.39 111,868.31 13.1 503,833.40 757,578.02 437,814.61 189,804.26 7.0 5.9 10.0 13.1 686,289.75 421,711.62 13.9 758,430.43 17.0 9,230,512 6,568,994 - 3,496,236 9,291,165 1,216,542 3,270,605 8,542,651 1,300,845 10,134,080 9,566,035 19,303,946 21,644,840 + - 16.2 332,799.29 10,571,603 8,790,024 5,740,570 11,569,033 317,510.55 7.8 - 13.8 273,301.77 376,589.56 997,481.18 5.9 - Dollars 256,281.79 6.7 2.6 3.2 11.7 8.6 5.3 9.0 8,6 4.8 12.6 6.5 8.1 6.9 5.6 10.8 166,864.89 506,684.30 274,539.24 559,521.73 Warren Other N. J. Counties Total Vermont Addison Bennington & Rutland Other Vt. Counties Total Conn. & Mass. Grand Total 335,644.88 22.3 18.2 23.7 153,714.46 267,216.73 174,513.33 81,811.92 99,426.39 215,993.98 19.4 39,545.69 38.9 237,137.47 506,489.26 290,807.47 10,034,627 13.3 2,906,261 43.4 11.2 16,972,128.15 22.6 15.9 586,839.96 97,450.60 93 13.5 21.5 259,696.59 105,050.51 13,009,950 18.7 217,413.26 28,467.08 28.6 14,340,730 11,570,905 5,132,390 23.0 404,725.39 321,376.73 726,430.19 10.9 25.7 1,234,030.94 16.4 17,632,003 6.6 11.8 136,636.88 788,905.48 19,781,276 15.6 7.8 1,003,502.38 342,354.92 270,715.37 305,052.66 12.6 16.9 14.7 335,573.08 270,759.18 120,097.93 7,650,342 6,583,295 3,398,366 6.6 12.9 18.8 536,012.89 9,066,466 7,528,180 3,186,630 9.1 19.8 26.5 162,319.98 462,881.85 15.0 643,936,480 21.4 232,570.40 83,720,058 725,304,622 848,129.08 202,596.82 636,984.27 212,155.30 176,159.41 74,567.14 98,544,929 3,205,612 12.9 2,545,089.76 21.6 4,489,338 476,060.20 2,305,951.34 7.5 25,950,838 22.3 324,749.31 915,687.09 11,839,091 15,430,722 10,682,543 30,121,286 31,044,025 20.8 535,304.02 221,858.77 740,149.71 12.4 641,634.59 New Jersey Sussex 915,138.40 275,033.66 898,798.05 12,996,706 16,685,815 11,753,575 38,410,173 12.4 28.2 21.2 475,651.04 359,908.37 469,093.95 8.9 16.3 10.0 1,208,748.69 398,840.46 501,684.03 119,197.85 568,599.56 304,122.92 390,448.07 15,646,416 16.4 27.7 437,548.64 18,698,660 10.2 13.7 219,553.15 529,954.05 15,608,210.26 513,427,969 Percent 428,125.39 248,963.08 105,992.12 827,860.43 482,899.17 13,371,814.26 571,445,054 change Dollars 605,188.84 32.6 Percentage 225,298.41 171,985.32 1.7 - 42,884,717 14,630,552 1943 736,762.74 376,621.10 13.5 6,664,369 20,953,430 11,040,950 21,106,401 5,339,473 40,593,123 13,313,335 - May 1942 213,809.61 96,362.51 6.5 7,130,978 21,653,175 11,732,446 23,911,185 5,839,183 May 16.7 8.7 18.3 20.1 18.1 1.9 10.4 9.6 13.6 200,132.17 103,310.32 38.5 15.8 + 17.9 395,502.48 12.7 26.4 88,350.34 19,575,668.99 8.6 7.2 15.3 + State 274 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE Secretary Morgenthau September 16, 1943 Fred Smith The Harry Sherman ad ran in 191 newspapers. It was also sent out in proof form to three thousand newspapers, offering mats if the newspaper cared to run the advertisement. o 275 September 16, 1943 Dear Mr. Sherman: I have seen your ad "Shall We Let Him Come Home to This," in several newspapers. I want you to know that I think these advertisements are going to be very helpful in the Bond drive, and on the whole inflation front. It is one of the best contributions that have been made to date, in my estimation. I really think it is a very patriotic thing to do. Sincerely, (Signed) H. Mergenthan, Jr. Mr. Harry Sherman Book of the Month Club 385 Madison Avenue New York, New York FS:gr 9-16-43 276 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE TO Fred Smith. FROM The Secretary. September 14, 1943 I think that Harry Sherman certainly ought to get a nice letter from me on his ad "Shall We Let Him Come Home to This. 11 I understand it's in several hundred newspapers. Will you get the facts and then write me a nice letter of appreciation? I really think he's doing something very patriotic and deserves a letter as well as some of the Hollywood stars. bulleriaMANAGERS Tear DUE this page and OFFICE AND PLANT wherever be this read COFFEE be additional for more Who Bonds HAMBURGER AMERICAN CHEESE ROAST BEEF The SALAMI $1.00 $2.25 $2.25 $1.50 RILL GODAL SHALL WE LET HIM COME HOME TO THIS? Weprices, cannot a great and disorderly rise in all to allow occur Inflation, in this land. Either during the war or after it. That is the supreme reason-among many other sound ones-why every man and woman of us should put every is at the same time piling up the difficulties of preventing a great and disorderly rise in prices, This wartime manufacture of new money must be LESSENED GREATLY, if such a disaster is to be averted. dollar that can be reasonably spared into additional War Bonds now. It is that necessity which explains the WHY behind It may be shocking to discover that you, personally, may have been actively contributing to bring on such the a national tragedy; by mere PARTIAL support of the Government's colossal taxation and borrowing program. You surely know that our Government, if it is forced to do so, could get the extra money it needs to pay its current war bills by running the money off the printing presses, the way Germany did in the twenties. Government in its efforts to raise money for the war. Here is a simple basic truth, about the nation's monetary affairs, which every American must understand Every available dollar which we fail to put into War Bonds compels our Government to CREATE A NEW DOLLAR-to we do not.lend. take the place of the one Have you ever thought, "Why doesn't it? Why does it tax me so heavily? Why does it bother me continuously about loans?" The answer is: the Government, in your long interests, must do everything possible TO KEEP TO A MINIMUM this wartime creation of new money. The best way to lessen this perilous swelling of our It ismonthly. now going on in this country by the billions of dollars Our active money supply has ALREADY increased $43,000,000,000 since the war began. It has more than doubled in that time. If all of fus-individuals and business firms- do not lend money supply is by taxation. The next best way is for all of us-every individual and every business firm-to lend the Government every dollar we can reasonably spare. Whatever you pay in taxes, whatever you lend, LESSENS BYtoso MUCH the new money the Government is obliged create, This is the crucial role each one of us, as an individual, playsour in safeguarding the future of the nation at home, while boys do so abroad. the Government far more than we did in 1042 this increase WILL year GO ON an lasts. estimated rate of at least $30,000,000,000 each theatwar country, in this this basic responsibility of a citizen mustmomentous be added toperiod, it Should this happen, with two more years of war, our money-supply would be inflated to a total almost FOUR TIMES what it was in 1939. whatever the inconveniences and sacrifices may be, how You do not need to be an economist to realize that this progressive enormous inflation of the nation's money-supply THE SUPPORTING FACTS Whatever else you may be humbly doing for your It is hard-and may get harder-on everybody. But will they compare with what will have been done by the 10,000,000 young men and women who at their best years, have broken their careers to win the war? What kind of land shall we let these boys come home to? COMMON SENSE: DOLLAR YOU INTO WAR JOSE HELPS TO WIN THE WAR QUICKLY, . PROTECTS YOUR OWN FUTURE AS AN INVESTMENT. " PROTECTS THE NATION AGAINST DELATION AND AFTER m. . This manufacture of new money in great quantities has Been the root cause of every disastrous inflation recorded history. 278 September 16, 1943 Dear Mr. Mardikian: I received your inspiring letter, and I want you to know how much I appreciate your considerable contribution to our Third War Loan Drive. I have asked the Treasurer of the United States to have these Bonds issued to you by the Federal Reserve Bank in San Francisco. You can expect to get them very shortly. Your letter was very interesting, and I am sure my father would be glad to read it. I am passing along a copy to him. It is the sum total of people like your- self, with an ambition to be a good American, that have made our country what it is. I want to congratulate you. Sincerely, (Signed) H. Mergenthan, Jr. Mr. George Magar Mardikian Omar Khayyam's 196 O'Farrell Street San Francisco, California FS:gr 9-16-43 279 Mrs McHuugh (25) dwy Sept 15.1943 Mr. William A. Day, President, Federal Reserve Bank, San Francisco, California. Dear Mr. Day: I am enclosing herewith photostatic copy of a letter, dated September 10, 1943, to Honorable Henry Morgenthau, Jr., Secretary of the Treasury, from Mr. George M. Mardikian, Proprietor, Omar Khayyam's, in San Francisco, with which he tenders his check in the amount of $20,000 for the purchase of 29% Treasury Bonds of 1964-69. The check, which is endorsed payable to the order of your bank, is also enclosed herewith. Please collect the check and issue the bonds as promptly as possible after communicating with George M. Mardikian to determine whether he desires coupon or registered bonds. Authority is hereby given to waive any interest accruing after September 15 in connection with this purchase. Very sincerely yours, (Signed) D. W. BELL Under Secretary of the Treasury. Enclosures. 12 blu I 22 GOB: hg 9/15/43 280 Omar Khayyam's at 196 O'Farrell Street in San Francisco And 927 Van Ness Fresno George M. Mardikian September 10, 1943 Honorable Henry Morgenthau, Jr. Secretary of the Treasury Washington, D. C. Dear Mr. Secretary: While your father was ambassador to Turkey, he tried to save my father and other Armenian leaders of Constantinople from being sent into exile. I will always be grateful for that. Magar Mardikian was one of the few survivors of those three hellish years but died as the result of the maltreatment soon after his return home. "Ambassador Morgenthau's Story" or "Secrets of the Bosphorus" told the tragic story of those massacres. It was translated into Armenian by my neighbor and good friend Shamdanjian. I am grateful for that permanent record. Naturally I have followed your career with high esteem and deep personal interest. After fighting with the Russians against the Turks and then with ill fated Armenian Legion, I was taken prisoner and all but killed by starvation and exposure to zero temperatures. Another American whom I had known through Boy Scout work, saved my life. Again, my gratitude. I escaped and came to America in 1922. Seeing the Statue of Liberty and later receiving my citizenship papers were the two greatest moments in my life. Both increased my thankfulness that there was such a country as the United States on earth. 281 -2- Like other millions, I have found unlimited opportunities here. I have tried to express my gratitude by becoming a good American -- by doing everything I could to help the country which was and is 80 good to me. Because you are such a worthy son of a worthy father, I want this subscription to go to you personally. Here is my cneck for $20,000.00 to pay for twenty Treasury Bonds of 1964-69. This brings up to date my pledge to invest every cent of profits in War Bonds. May it thank you and all other real Americans for permitting me to enjoy Life, Liberty and the Four Freedoms. Gratefully (Signed) George Magar Mardikian P.S. When in San Francisco, please give me the honor to cook you a real Armenian-American meal. G.M. 282 WORKING-PRESS REPORTERS. FOR THE THIRD WAR LOAN NEWS ROOM 367-391 TREASURY BLDG WASHINGTON D.C. RELEASE NO. 145. FOR RELEASE AFTERNOON NEWSPAPERS, Wednesday, September 22, 1943. WASHINGTON, --- Secretary of the Treasury Henry Morgenthau, Jr., received a check today for $20,000 for the purchase of bonds from an American with a special and personal reason for investing in the Third War Loan. The check's signer was "George Magar Mardikian", of San Francisco, whose letter accompanying the check told a story of undying gratitude. "While your father was Ambassador to Turkey, If he wrote Mr. Morgenthau, "he tried to save my father and other Armenian leaders of Constantinople from being sent into exile. I shall always be grateful for that. My father was one of the few survivors of three hellish years, but died as the result of maltreatment soon after his return home. "After fighting with the Russians against the Turks and then with the ill-fated Armenian legion, I was taken prisoner and all but killed by starvation and exposure to zero temperature, If continued Mardikian. "Another American, whom I had known through Boy Scout work, saved my life. Again my gratitude. I escaped and came to America in 1922. "Seeing the Statue of Liberty and later receiving my citizenship papers were the greatest moments of my life, Both increased my thankfulness that there is such a country as the United States on earth. Like other millions, I have found unlimited opportunities here. I have tried to express my gratitude by becoming a good American. "Because you are the worthy son of a worthy father, I want this subscription to go to you personally. Here is my check for $20,000 to pay for twenty Treasury Bonds of 1964-69. May it thank you and all other real Americans for permitting me to enjoy Life, Liberty and the Four Freedoms. And then, adding a further personal note, Mardikian wrote the Secretary, "When in San Francisco, please give me the honor to cook you a real Armenian-American meal." 000 253 283 25 September 22. 1943. Dear Mr. Mergentheus The Secretary felt that you would be interested in seeing a copy of a letter he has received from Mr. George Nagar Mardikian, of San Francisco, as well as a copy of his own reply. and I as very glad to forward the correspondence to you. with best regards, Sincerely yours, (Signed) H. 8. Klotz Mr. Henry Morgentime, 1133 Fifth Avenue, New York, New York. Enclosure. capicolf the from to me mardebeare KP/dbs 284 HENRY MORGENTHAU 1133 FIFTH AVENUE NEW YORK CITY September 24, 1943 Mrs. Henrietta S. Klotz Treasury Department Washington, D. C. Dear Mrs. Klotz: Mr. Morgenthau received your letter of the 22nd with the Mardikian correspondence enclosed. That's real gratitude and Mr. Morgenthau was very much interested. Thank you for sending it. With best wishes, Sincerely yours, Emily Unit 285 25 September 16, 1943. Dear Ere. Vateens New that I am back is Washington, I vast to tell you how much I enjoyed - delightful stay with you while I was in Charletteeville. Your home is such a charaing one, and your hospitality was so ware that I felt 10 a privilege to be with you during my brief visit there. I shall always look back on 18 with a great deal of pleasure, and thank you again for all that you all to make my stay a pleasest ene. with certifical regards, Sincerely. (Signed) H. Morgoather, Jr. Mrs. Edula n. Natuon, The 8133 Connections Avenue, N.W., Washington, D. a. P.S. Tell the general I stallflying "freehead GEF/dbs 286 September 16, 1943. The Honorable San Rayburn House of Representatives Dear Mr. Speaker: In the absence of Secretary Morgenthau from the city I have the following message from him for delivery to your "The Honorable Sam Rayburn Speaker of the House of Representatives Congress of the United States I congratulate a great Speaker on three years of most distinguished service to his. people and his country. Henry Mongenthau, Jr. Secretary of the Treasury" Very truly yours, Herbert E. Gaston Assistant Secretary of the Treasury. 287 NEW YORK Herald Tribune SEP 16 1943 and the foreign economic activi- Foreign Relief ties of other government agencies Row May Lead Lehman to Quit without separate powers. State Department Plan to Co-ordinateAgenciesSeen Leaving Him Figurehead By Bert Andrews WASHINGTON, Sept. 15.-An article appearing in the current issue of an authoritative State Department publication, "The Ameri- can Foreign Service Journal," served today to lend credence to persistent reports that some new trouble has developed in the department-as a result of a fight over control of the various economic agencies operating in foreign countries. The talk has largely revolved would leave the O. F. R. R, O. A hint that such action is contemplated was contained in The Foreign Service Journal." Articles in the publication must be ap- proved by a board of editors. Furthermore, when they involve existing or possible controversies. they must be approved by higherups. Thus the article was widely regarded today as representing the thoughts of persons powerful in the department. The article emphasizes that it is the duty of the State Depart. men, "as the agency responsible for the nation's policy." to co- ordinate and develop the activities of various affected agencies "into implements of that very foreign policy." "The absence of any such co- ordinating agency," the article adds, would create a situation as disastrous as a ten-herse chariot without a charloteer, or as diff- cult as (that of) the man who leaped on his horse and rode off State tween around Department some reported persons differences and within the Office be- the of Foreign Relief and Rehabilitation Operations, headed by former Governor Herbert H. Lehman of New York, and it has waxed so warm that the O. F. R. R. O. has received repeated inquiries as to whether Governor Lehinan has resigned. Mr. Lehman has denied he intends to quit, but it is said to be an open secret that he may change his mind If pending reorganizattion plans involving the various agencies make him too much of a figurehead, since he believed when he took the job that he would be the top man in handling foreign relief, both in recaptured countries during the war and generally after the war. rapidly in all directions. "No organization is successful where uncertainty of authority exists nor where temporary emergency creations are not recognized as such. In the management of anything so complex as foreign policy, the simplest possible organization recommends itself." The article does not mention the O. F. R. R. O. or lend-lease by name, but on the general ques- tion of co-ordination it says: "Foreign policy in time of war is to hate one's enemies; in time of peace to love one's friends. But just as the activity of army divi- sions and naval ships must be fol- lowed and co-ordinated within the framework of war by a carefully selected general staff, so must the activities of the various peace agencies be followed and co-ordi- nated within the framework of peace by a carefully selected per- Mr. Lehman's friends say he has sonnel in a ministry for foreign beeh displeased by reports that a affairs." broad plan for co-ordinating the Office of Foreign Economic Coordination. the O. F. R. R. O.. the Office of end-Lease Operations, the Office of Economic Warfare c 288 0 P Y FEDERAL RESERVE BANK OF NEW YORK September 16, 1943 CONFIDENTIAL Dear Mr. Secretary: Attention: Mr. H. D. White I am enclosing our compilation for the week ended September 8, 1943, showing dollar disbursements out of the British Empire and French accounts at this bank and the means by which these expenditures were financed. Faithfully yours, /s/ L. W. Knoke, L. W. Knoke, Vice President. The Honorable Henry Morgenthau, Jr., Secretary of the Treasury, Washington, D. C. Enclosures COPY Strictly LYSIS OF CANADTAN AND AULTRALIAN ACCOUNTS (In METIONS of Dollars) to Total Debits PERIOD Debits A/C Transfers Transfers from official British A/C of For Own For French Credits Sales A/C A/C Total Gold Other Credits Net Incr. (+) or Decr.(-) in$Punded Proceeds to official Total Debits British of Other Debits A/C 323.0 16.6 306.4 504.7 412.7 20.9 38.7 32.4 181.7 31.2 3.9 27.3 period PATOUS December 1940 477.2 16.6 41.0 230.2 57.9 43.4 123.9 88.5 1.6 72.2 525.8 525.5 566.3 3.4 7.7 14.5 16.7 Third year of war (c) 534.8 246.2 198.6 110.7 460.4 707.4 462.0 20.9 Second year of war(b) 460.6 460.4 360.0 40.5 107.2 57.4 46.3 53.6 13.2 40.4 7.3 20.5 44.9 51.5 34,9 6.6 56.5 80.8 48.2 43.9 16.6 14.4 2.9 52.5 35.1 36.2 217.1 Sept. 30 Sept. 30 Oct, Oct. 28 Oct. 29 Dec. Dec. Dec. 2 30 46.3 44.9 56.5 0.3 - - - 48.2 - 52.5 - 1923 Dec. - Feb. Feb. 4 - Mar. 3 3 31 A-rp-Apr. 28 June 30 July Sant 28 1 AND August 18 25 Santambar 1 of 35.1 36.2 29.0 79.9 53.8 - - 29.0 - - - 79.9 53.8 102.1 - 101.2 - 51.6 - - - - - - 125.0 - - - 139.1 84.7 7.7 113.1 113.1 14.5 7.5 2.2 2.2 12.1 4.7 18.6 12.1 4.7(a) Expenditures war YEAT of war year of war (through September 8, 1943) - - - - - 20.1 0.2 27.6(c) 4.1 6.2 million. million. 10.1 nation. 9.6 million. - 55.5 49.8 Gold Sales 62.4 6.1 50.1 12.3 18.3 95.0 9.0 18.1 9.9 14.6 0.3 9.4 0.8 11.7 2.4 81.2 62.9 112.2 17.2 18.1 12.0 7.5 2.3 5.5 4.7 14.6 9.4 11.7 4.9 30.0 - 4.5 5.0 66.4 24.3 28.0 14.3 10.2 41.0 4.3 14.1 8.0 6.1 92.1 164.6 16.2 15.9 8.0 8.2 17.3 15.0 0.9 16.0 7.1 5.0 2.1 6.7 6.7 16.4 15.3 19.3 19.3 27.3 27% 12.5 12.5 6.7 27.4 11.6 66.1 63.5 - - 61.8 102.1 139.1 - 37.7 - 39.6 95.8 77.2 - - 51.6 39.61 15.4 10.6 15.9 200 77.2 61.8 23.4 20.0 40.3 77.0 54.4 19.2 13.8 7.0 18.6 98.6 16.4 + First year of war [OI Total Credits 36.1 Net Incr. (+) or Dec. (-) Other Creditain $ Funds 3.2 0.3 0.1 0.1 0.9 3.6 12.6 1.7 0.5 0.9 23.5(c)+ 22.9 14.0 17.3 - 27.4 11.0 0.2 15.7 + 16.0 6.3 2.8 0.2 8.0 19.9 19.0 20.0 - 1.1 0.1 16.0 - 20.1 0.3 3.6 12.6 0.5 + 04 2.9 IV 7.3 + Proceeds C REDITS DEBITS CREDITS Transfers Official British Others COMMONWEALTH BANK OF AUSTRALIA (and Australian Government) CANADA (and Canadian Government OF + DEBITS BANK Week Ended September 8, 1943. Confidential 0.1 3.5 11.2 15.2 For monthly breakdown see tabulations prior to April 23 1941. October For monthly breakdown see tabulations prior to October 51 1941 1073 prior a (f) Reflects monthly changes breakdown in dollar holding payable on damand's or naturing in one year. Does not reflect transactions in short term U.S. securities. Includes 12.7 million deposited by War Supplies, Ltd. and $10.6 million received from N. Chartered Banks. Strictly ANALYSIS OF BRITISH AND FREICH ACCOUNTS (In Millions of dollars) 2.793,1 2,109.5 2,189.8 1,193.7 108.0 274.0 223.1 1,361.5 21.8 19.0 81.6 19.3 57% 31.6 33.0 18.2 July 29- Sent 51.1 27.4 August 18 25 September - 7.7 19.6 8.1 4.6 1.9 7.4 5.4 0.2 18.1 8.8 4.1 7.5 Average Expend tures Since Outbreak of War 87.4 16.1 103.4 20.0 14.8 16.0 130.7 100.5 131.5 4.0 12.9 2.1 64.9 5.6 1.8 5.2 France (Strough June 19, 1940) 199.6 Million England (through June 19, 1940) $27.6 million England (June 20, 1940 to March 12, 1941) $54.9 million England (since March 12, 1941) $21.3 million 19.6(1) 14.5 561.1 1,098.4 +220.1 705.4 10.8 13.2 878.3 16.7 38.9 5.5 57.4 1,276.8 125.9 18.5 8.8 4.4 30.1 - 14.1 0.5 20.5 60.6 25.5 10.1 0.4 12.0 10.8 - 5.5 45.5 78.2 12.9 0.2 8.0 43.9 21.5 8.0 109.7 15.0 50.9 105.8 5.0 59.4 29.1 15.1 12% 50.4 19.0 84.4 13.0 20.0 110.7 99.1 16.0 84.5 67.5 11.0 120.5 20.4 - - - - - - - - - - 64.1 20.7 +299.0 - - - - - - 14.0 12.9 64.9 0.3 0.3 - - - - - - - - - - 6.7 - www 5.6 1.8 5.6(1) 1.5 O. - - 33.6 9.7 0.3 - - - - - 11. July July - 22.4 (1,095.3(f) - 74.3 16.3 58.9 120.8 866.3(f) - 90.4 - 22.7 KING 35.0 - 12.9 SIN 51.9 (d) (e) - 35.3 37.0 125.0 3.7 17.1 in $ Funds - 20.9 61.1 (e) Net Incr. (+) or Decr. (-) - 168.6 - (d) Total Credits - 3 2 35.5 13.3 (c) Total Debits 416.2 - 6.6 30.4 - - Account Credits or Decr. (in $ Funds - 27.4 - (5) Other - 46.7 30 3.9 407.4 Oct. 28 June 52.0 1,335.8 37.1 June 1,356.1 3.4 7.7 56.1 28 1,828.2 20.9 Sept. Sept. 30 tralian Gold 2,782.3 906.8 Ants Total Credits 20.9 12,235.6 37 Other 605.6 1.425,6 1,792.2 Feb. Canadian Account Net Inc. Transfers Offi 461 Aust 1,793.2 2,203.0 - Proceeds_of Official Debits 1,166.7 (a) year of war Third your of war 1940 she Transflure to - BAP period through tures CREDITS + - First year of war Total Debits Gov't Expendi- BANK OF FRANCE BANK OF ENGLAND (BRITISH GOVERNMENT DEBITS PERIOD Week Ended September 8, 1943 Confidential - - See attached sheet for footnotes. S (a) Includes payments for account of British Ministry of Supply Mission, British Supply Board, Ministry of Supply Timber Control, and Ministry of Shipping. (b) Estimated figures based on transfers from the New York Agency of the Bank of Montreal, which apparently represent the proceeds of official British sales of American securities, including those effected through direct negotiation. In addition to the official selling, substantial liquidation of securities for private British account occurred, particularly during the early months of the war, although the receipt of the prooeeds at this Bank cannot be identified with any accuracy. According to data supplied by the British Treasury and released by Secretary Morgenthau, total official and private British liquidation of our securities through December, 1940 amounted to 8334 million. (c) Includes about $85 million received during October, 1939 from the accounts of British authorised banks with New York banks, presumably reflecting the requisitioning of private dollar balances. Other large transfers from such accounts since October, 1939 apparently represent current acquisitions of proceeds of exports from the sterling area and other accruing dollar receipts. (d) Reflects net change in all dollar holdings payable on demand or naturing in one year. (e) For breakdown by types of debits and credits see tabulations prior to March 10, 1943. (f) Adjusted to eliminate the effect of $20 million paid out on June 26, 1940 and returned the following day. (g) For monthly breakdown see tabulations prior to April 23, 1941. (h) For monthly breakdown see tabulations prior to October 8, 1941. (1) For monthly breakdown see tabulations prior to October 14, 1942. (j) Includes $3.1 million apparently representing curront and accumulated dollar proceeds of storling LOS services and merchandise exports. 292 TREASURY DEPARTMENT INTER OFFICE COMMUNICATION DATE Sept. 16, 1943 FROM Secretary Morgenthau Mr. White Subject: Conditions in Spain and Germany TO The following represent the observations of a confidential agent, based on a recent trip through Spain: (1) The fall of Mussolini created a sensation but the public was not demonstrative, due to fear of repression. (2) The mass of the Spanish people, as well as the intellectuals and the middle classes, is opposed to Franco, but leadership and a plan for action are lacking. While the Army is somewhat undermined by discontent, no uprising is probable except with strong outside assistance. Fear of a violent revolutionary movement resulting in anarchy and civil war is a major factor keeping Franco in power. (3) General opinion is that Great Britain favors restoration of the monarchy in Spain, whereas the United States favors a republic. (4) Spanish nationalists greatly fear the spreading of communism in Europe, and visualize the Iberian Peninsula as a base for defense, or for operations against Russia. (5) From conversations with Germans it was ascertained that internal demoralization of Germany has set in, though offset somewhat by hopes of a new weapon against air offensives, combined with resumption of submarine warfare. Fear of air raids is spreading. This informant states that all Germans to whom he has spoken "declare that before the Allies can get to Berlin they will open the doors to Russia 80 that they can get their revenge for defeat through Russia. 293 NOT TO BE RE-TRAJSMITTED COPY NO. 13 BRITISH MOST SECRET U.S. SECRET OPTEL No. 306 Information received up to 10 A.M., 16th September, 1943. 1. NAVAL MEDITERRANEAN. 13th/14th. Two French Destroyers lended 600 French troops at AJACCIO at present occupied by Italians who are fighting Germans in North, West and Centre of CORSICA. BASTIA and part of the Island still under German control. Unloading over beached at SALERNO continued satisfactorily on 14th with less enemy shelling of the port. Two of H.M. Battleshipa bombarded objectives in SALERNO area yesterday. During 14th and 15th 28 more small Italian naval craft arrived at PALERMO. The hospital ship reported set on fire in OPTEL No. 304 has now sunk. 2. MILITARY ITALY. 5th Army. No further details received of fighting in SALERNO bridgehead. During 14th our air forces heavily bombed the enemy's positions in the battle area which were also subjected to intense naval gunfire. As a result no further serious enemy attack developed. Our troops continue to be reinforced. 8th Army. Good progress maintained during 14th. Patrols of 5th Division roached SCALEA on the west while Canadians occupied SAN GIOVANNI and pushed on to n point 7 miles east of SPEZZANO. In TARANTO Sector situation is satisfactory. RUSSIA. Additional to communique. In ROSLAVL area Russians are approaching River DESNA. They have crossod the River SULA at several places and occupied SENCHA 20 miles northeast of LUBNI. Further south GULYAI POLYE 50 miles east- south-cast of ZAPOROZHE, POKROYESKOYE 50 miles oast-north-oast of ZAPOROZHE and KUIBESHEVO have been occupied by the Russians. 3. AIR OPERATIONS WESTERN FRONT. 15th. PARIS. 138 Fortresses attacked Hispano Suiza Works with good results and also Renault. 370 tons were dropped. 76 nore Fortresses dropped 212 tons at ROMILLY-SUR-SEINE airfield and 125 honvy and medium bombers attacked other airfields in Northern France. From these operations six heavy bombers and three fighters are missing. 15th/16th. Aircraft despatched - Dunlop tyre factory MONTLUCON 374, missing; DORTMUND-EMS Canal embankment at GREVEN, north of MUNSTER 8 Lancestors 13, 3 escorted by five fighter Nosquitoes (5 Lancasters missing) BERLIN 7, Leaflets Intruders 57 (2 missing, one enemy aircraft destroyed). At MONTLUCON there Of was medium cloud over the target but a fair bombing concentration is reported. the Lancasters which returned from GREVER, two attacked the objective but saw no 3 breach in the embankment. 17 enomy aircraft operated over home counties, 3 penebrating to LONDON. 30 more were sen-nining in THAMES Estuary, 3 were destroyed for ha loss of one night fighter. Some damage to houses at ASHFORD and one person killed in vicinity. ITALY. 13th/14th. Medium and light bombers dropped 257 tons on con- horve in the BOMPEII-SALEENO area. On 14th 896 tons were dropped by 683 unications erizum and light and fighter bombers in concentrated and effective attacks two on E. around SALERNO Bridgeheed. One Fortress was lost for am estroyed. positions The railway contre at PISCARI, 95 miles AME Wreaked 37 Liberators. EE 7. I'd Ll das 5961 30 301330 101's