Full text of Diaries of Henry Morgenthau, Jr. : Volume 805
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DIARY
Book 805
December 23-31, 1944
-ABook
Page
Appointments and Resignations
White, Harry D.
See also Book 796
FDR agrees to send appointment as Assistant Secretary
to Senate - 12/28/44
805
162
-BBaruch, Bernard M.
See Post-War Planning: Germany
Bretton Woods Conference
See Post-War Planning
Broadcasting Magasine
See Financing, Government: Var Savings Bonds
(6th War Loan Drive)
-0China
Hu Shih thanks HMJr and Stimson for their continued
friendship to China - 12/30/44
252
-FFarm Bureau Federation
See Post-War Planning: Bretton Woods Conference
Financing, Government
Refunding since July 1, 1944, and results: Resume by Bell 191
12/29/44
War Savings Bonds
Hill, Philip T. (Postmaster, Santa Monica, California):
Thanks HMJr for citation on originating V-Mail
Christmas Bond Certificate - 12/29/44
Freesing of War Bonds: Mrs. FDR-Treasury correspondence
concerning statement denying - 12/30/44
6th War Loan Drive: End of Drive
HMJr confers with group and congratulates them -
192
236
220
12/30/44
a) Possibility of helping War and Navy
Departments discussed
Broadcasting Magasine asks for statement and HMJr
agrees - 12/30/44
234
Koussevitsky acknowledges HMJr's letter of thanks 240
12/30/44
France
See Post-War Planning: Germany
-G-
Gillette, Guy M. (Senator, Iowa)
War Refugee Loard appointment suggested to HMJr by Treasury
group; HMJr tells group Gillette is to be appointed to
Surplus Property Board - 12/30/44
219-M
-H-
Book Page
Hill, Philip T. (Postmaster - Santa Monica, California)
See Financing, Government: War Savings Bonds
Hu Shih
See China
-I- -
Italy
Financial negotiations discussed by Treasury group 12/23/44
805
A
a) HMJr's undated memorandum to FDR: Technical
mission now here: shall discussions develop
specific U.S. program regarding financial and
economic reconstruction of Italy?
b) FDR suggests Treasury-State conference
c) HMJr consults Stettinius - 11/22/44
d) Stettinius agrees to conference - 11/23/44
resund of State Department point of
view - 12/16/44
f) HMJr's reply attaching suggested statement for
mission after State and War Departments approval -
V
U
T
S
.
e)
12/23/44
0
M
-JJews
See War Crimes Commission
Josten, Peter W.
Status in glider school in Lubbock, Texas, discussed by
HMJr with General Giles - 12/23/44
28
-K--
Koussevitsky, Serge
See Financing, Government: War Savings Bonds
(6th War Loan Drive)
-L Lend-Lease
United Kingdom: Federal Reserve Bank of New York statement
showing dollar disbursements, week ending December 20, 1944 167
12/28/44
M-
Morgenthau, Henry, Jr.
For discussion of proposed book over HMJr's signature see
Post-War Planning: Germany
-PBook Page
Paul, Randolph
See Switserland
Pell, Herbert
See War Crimes Commission
Post-War Planning
Bretton Woods Conference
Farm Bureau Federation approves - 12/23/44
805
FDR's support in Budget Message or State of the
Union Message discussed by Treasury group - 12/30/44.
41
219-H
Germany
Proposed book entitled "The Morgenthau Plan"
See also Book 791
Gaston opposes HMJr's signature - 12/27/44
Baruch-HMJr correspondence concerning - 12/30/44
France: Bidault (Foreign Minister)-Ambassador Caffery
conversation concerning treatment of Germany 12/31/44
148
260
303
Reconversion of Industry: DuBois resume of those urging
an immediate start and those who have urged that we
merely begin to plan - 12/24/44
Surplus Property, Disposal of: Income tax of personnel, etc.,
63
discussed by HMJr and Pehle - 12/23/44
Puerto Rico
1
Garment work under Surplus Property to be turned over to
unemployed there - 12/30/44
219-P
-RReconversion of Industry
See Post-War Planning
-SState Department
See War Crimes Commission
Stettinius, Edward R., Jr.
Exchange of season's greetings with HMJr - 12/26/44
Surplus Property, Disposal of
136
See Post-War Planning
Switzerland
Paul (Randolph) consults Treasury on ethics involved in
representing Swiss bankers now negotiating with Treasury
on blocked assets - 12/30/44
219-I
-TTreasury Department
Pay Envelopes: HMJr suggests letters on various subjects
be included - 12/30/44
a) Typewriting analysis of Baruch documents - 1/3/45:
See Book 807. page 77
219-W
UBook Page
United Kingdom
See Lend-Lease
-WWar Crimes Commission
Jurisdiction over murder of Jews and steps taken to date
805
reviewed in Pehle memorandum - 12/23/44
a) DuBois memorandum on conference with Herbert Pell -
8/17/44
b) Pehle memorandum to Stettinius - 8/28/44
1) State Department cable to Winant for Pell
c) Declarations advocating punishment of Axis war
criminals for crimes against the Jews - 8/25/44
d) Pehle's letter to Stettinius - 12/23/44
8
11
16
18
22
27
War Criminals
McCloy (Var Department)-Treasury correspondence
concerning - 12/30/44
White, Harry D.
See Appointments and Resignations
274
December 23, 1944
10:05 a.m.
ITALIAN FINANCIAL NEGOTIATIONS
Present:
Mr. D. W. Bell
Mr. White
Mr. Pehle
Mr. Glasser
Mr. Luxford
Mr. DuBois
Mrs. Klotz
H.M.JR: Good morning, gentlemen.
MR. WHITE: Good morning.
H.M.JR: This is to discuss the letter about Italy.
In the first place, the form in which it is written--I
read it very hastily--are they trying to use this as a
kind of bait or trap, saying, "From now on we will tell
you what--within what limits the Treasury should work?"
MR. WHITE: My reaction to the letter was somewhat
different, but somewhat along those lines. I felt as I
read that letter one would get the feeling that they had
thought this matter over carefully and these are lines
along which we ought to work.
H.M.JR: You have seen this, the Stettinius letter
(indicates letter to the Secretary, dated December 22,
1944)?
MR. BELL: Yes.
MR. WHITE: As a matter of fact, all of the points
made here were the points which were made by the Treasury--
by the boys discussing it. They presented it to the State
Department, and they agreed. That is P. minor matter, and
I said you would never get it from that letter.
O
B
-2H.M.JR: I got the impression from reading the letter
hastily that the State Department was telling us what we
could and couldn't do, that they were laying the foundation
for future relations. I don't know.
MR. BELL: I didn't know just what they were driving
at in the letter. I got the impression that there was
something wrong, or they had suspicions about this Commis-
sion, that they wanted to be very careful as to how they
were going to handle it. Not knowing the background, I
didn't know just what they were driving at.
MR. LUXFORD: I thought that they were trying to give
us their views on the political side of what should be
done and what shouldn't be done with this Commission.
You will note that the points they were stressing were
largely political points.
MR. BELL: I didn't get anything sinister out of it,
but I thought that was something they were being cautious
about.
(The Secretary leaves the conference temporarily.)
MR. BELL: Mr. Glasser says he has the background of
all this.
MR. GLASSER: The State Department in thinking of a
reply--I spoke to Collado about it when the letter first
went over, and he said that--he told me that their reply
would consist of a sympathetic attitude toward the Italian
Mission. Then as the course of these technical discussions
proceeded, the State Department developed these ideas
in discussions with us at the committee, and we talked
over each of the points that came up. Then they just added
what was agreed upon between ourselves on the technical
level--they just added that to the letter. I don't know
whether that would be a precedent or not, but it was just
an attempt on the part of the drafters to be precise.
I don't think there is any implication beyond that. They
don't give creditto the discussions.
C
-3MR. LUXFORD: In many respects it is a helpful letter
in speeding up our work.
H.M.JR: For your guidance, to assist me, Stettinius
said this suggestion for a committee of finance with myself
as chairman has been referred by him to Acheson and Clayton,
and they are going to study and report back to him. Well,
he told me before that Acheson--he said that this is something that Acheson gets all excited about, and with Clayton
it is a question of whether Clayton should be chairman
or whether I should be chairman. I can imagine how Acheson
and Clayton are going to react. I mean, they both are
going to say it should be Clayton.
But Stettinius didn't seem to want to rush it, and that
is all right with me, because there are certain reasons
why by waiting we can gain time.
But at Cabinet yesterday something came up that pleased
Mr. Crowley--something that happened in the foreign loan
field.
MR. WHITE: There was an answer drafted. I think we
can do better this morning. It is along the lines that
we agreed with them, because whatever is in here has
already been agreed upon.
MR. BELL: Why don't we say in the letter of reply that
these matters have been discussed?
MR. WHITE: That is what the letter doesn't contain,
and that is why I think we ought to rewrite it.
H.M.JR: Do you think it could be rewritten and finished
by everybody here in the room and back to me--by when?
MR. WHITE: Today.
H.M.JR: Wait a minute, not today. I have to do my
mail between two and two-thirty.
MR. WHITE: It can be redone then.
-4H.M.JR: Can I have it when I am doing my mail between
two and two-thirty?
MR. WHITE: Yes, you will have it by two o'clock unless
you don't agree with some of the things which are indicated
here.
Harold, you are more familiar with this than I am. Why
don't you give it?
H.M.JR: Is that a greeable to you, Dan?
MR. BELL: Two o'clock?
H.M.JR: No, that they do it over and then show it to
you.
MR. BELL: Sure.
MR. GLASSER: This is a report on what the Commission
decided. We had, I think, five or six meetings with the
Italians, each meeting lasting about two or three hours,
and they did not talk about reconstruction aid.
They tried to do the following things. They want us
to give to the Bank of Italy whatever assets we give to
Italy now.
H.M.JR: May I interrupt you now? That story in the
New York Times made me so GD mad this morning--the one on
the front page that this fellow Mr. Dulles announced, the
details of turning over two hundred and twenty-million
dollars worth of gold to Belgium for France, and vice versa.
MR. BELL: It was a suit between the French and Belgians
and it was settled out of court, and I think he had the
right to announce it.
MR. LUXFORD: We were working on it, but we were working
on it from a very narrow point of view, namely, to get
them to release fifty million dollars before we knew they
were going to work out an over-all settlement. We worked
E
-5with them on that side of it, and we also worked with
them to get a gold license and freezing license at that
time. They negotiated their settlement in Belgium, and
they instructed their attorneys here to work it out.
H.M.JR: So there is nothing for me to be mad about?
MR. LUXFORD: No, sir.
H.M.JR: I will find something else, then.
MR. GLASSER: May I give a little sidelight on that
transaction?
H.M.JR: Yes.
MR. GLASSER: Just before they completed the deal of
transferring gold, it almost broke up when the sheriff
of New York asked for his cut for doing nothing at all.
He never touched a bar of gold, but according to some
old New York law he gets a percentage.
MR. WHITE: They tried to get the law changed. That
took them months. That is the same story as the Polish
gold.
MR. GLASSER: The French and Belgians put three million
dollars
in suit.
escrow to cover the possible success of the
sheriff's
MR. WHITE: And the State is trying to pass a law--if
they haven't already passed it.
H.M.JR: You remember when I sent these ships down to
South Africa for gold. there is an old naval code which
says that the captain of the ship is entitled to ten
percent of any gold he transports. The President of the
United States told me that the captain and his crew are
entitled to ten percent of the gold they transport.
BELL: I would be more in favor of that than seeing
theMR.
sheriff
get it.
F
6-
H.M.JR: He has the most amazing memory. I was just
amazed yesterday when Harold Ickes brought up the question--
and the Attorney General. They are now going to force this
issue as to whether the Federal Government can get oil within
the three mile limit outside of California and Texas.
The President said, "Aren't you going to go further?"
He said, "Yes, we are, but we are going to do each one
gradually.
in
The President said, "Go much further."
The Attorney General said the old custom is to go to
the twelve mile limit, "All you can do is shoot a gun the
first three miles.
The President said, "No, Henry Morgenthau settled that
in 1933 when he wanted to go out and meet the rum-runners
wherever they were, and I interpreted the law so he could
do that."
MRS. KLOTZ: He remembered that?
H.M.JR: Just like that.
MRS. KLOTZ: It is amazing.
H.M.JR: On those kinds of things he has the most amazing
memory.
Harold, I am sorry White keeps interrupting you.
MR. WHITE: That is the third time, but he is used to
it; he has worked for me a long time.
MR. BELL: Why don't you just file a report, Harold?
MRS. KLOTZ: That is a slow way.
H.M.JR: Again Harry interrupts you. When you wanted
permission to go to Italy, you gave a report on it.
7-
MR. WHITE: I saw the excellent clean-up work that was
done.
MR. GLASSER: These Italians are trying to build up the
Bank of Italy, and by giving the troops pay in dollars
and turning it over to the Bank of Italy rather than the
Italian Government, and turning over to the Bank of Italy
the proceeds from the sale of civilian supplies, leaving
the Italian Government with all the obligations, what they
are trying to do is get a stable financial organization
with real assets in it and let the Italian Government
bear all the obligations that Italy might have toward
the United States in the peace settlement.
Now, we can go a small distance with that, but essentially
that is an Italian problem. We deal only with the Italian
Government. If the Italians want to work out a deal with
the Bank of Italy, that is up to them.
O
Now, the second thing they wanted to do is to get information, and we think that the reason for their getting
information is principally to draw up a bill of how much
they contributed to the war in terms of money, and we
think they are justified in doing that. It probably would
be a very good thing in Italian American relations, as
well as general international policy if they were going
to do that, and we have been proceeding to give them infor-
mation. We gave them some more during the course of the
Mission, and State, the British, and the War Department
are now taking steps for the Allied Mission to give them
all the information that they have.
H.M.JR What do I do about this letter from Stettinius?
MR. WHITE: You sign a letter to him telling him you
are in general agreement, and what'it has done for the
Italians simmers down to encouraging or recommending
that their Government be given wider financial powers.
MR. GLASSER: I could read the recommendation if you
would like.
H.M.JR: No.
H
-8MRS. KLOTZ: That is that.
MR. WHITE: These are the preceeding letters, your
letter to Stettinius, and his brief note of reply (hands
Secretary Secretary's letter to Stettinius of December 16,
1944, and Mr. Stettinius' reply of December 22, 1944).
H.M.JR: On my part, or your part?
MR. WHITE: It looks like your part.
MRS. KLOTZ: It is.
H.M.JR: What do I do? I want to clean this matter
up. There will be a letter coming in around two o'clock?
MR. WHITE: Yes, a letter around two o'clock.
MR. GLASSER: Next week you should see the Italian
Mission.
H.M.JR: I won't be here.
MR. WHITE: They will be glad to stay around.
MR. BELL: Does that mean that the dollars will be
turned over to the Italian Bank and they merely have a
claim?
ment.
MR. GLASSER: We turn them over to the Italian Govern-
MR. BELL: They are going to use them for supplies?
MR. GLASSER: They must use them for supplies.
MR. BELL: I didn't get it from this report. I have
been trying to find out whether or not that decision has
already been approved, and now there is an amendment to
make a--
MR. WHITE: The Government is to have the power of
note issue; we are recommending that.
I
-9-
C
MR. GLASSER: The really important point we are
making here is to give to the Italians the issuing authority
over Allied Military in Europe.
MR. LUXFORD: The same as the French have today.
H.M.JR: That is an important move.
MR. BELL: They assumed that obligation in the armistice
terms.
MR. DuBOIS: They don't get the issuing authority.
MR. BELL: But they assumed the obligation.
H.M.JR: Are you gentlemen in agreement that they
should have authority?
MR. WHITE: We are under the assumption that the
better policy is to build up and help the Italian Government.
That is what this will do, and apparently that is what the
State Department--and I gather you would know whether
the President wants that, but that is what this does. It
is a decidedly strengthening factor of the Italian Govern-
ment, and it also greatly improves the relationship between
the Italian Government and the Americans, because they
will know that the Americans permit and force the British
to make them pay for their lira, which they are doing now.
H.M.JR: Before I see these people I will spend time
enough on it to understand it, but I'm in a holiday spirit
today.
MR. WHITE: Do you feel that before then it is
necessary to get clearance as to whether the President
wants this done to Italy? Or do you have a clear enough
indication?
H.M.JR: On a thing like this, I don't wan t to go
over Stettinius' head. I think what we might do before
we finally settle it is to clear with him whether he has
cleared with the President.
J
- 10 -
I am going to give Stettinius every benefit of the
doubt up to the time that he cuts my throat.
MR. WHITE: I think that is a very good policy, as
long as he is showing he is cooperating a hundred percent.
MR. LUXFORD: There is only one point here.
H.M.JR: Up to the time he tries to cut my throat.
MR. LUXFORD: It is about the question of playing
safe on these Italian negotiations. Instead of writing
back and saying that we agree with what they are saying
on the theory that State makes the ultimate decision, that
we want to favor this Government, and why should we take
the responsibility for that end?
MR. WHITE: I think we can work this out so that this
is a financial policy.
MR. LUXFORD: Based on your foreign policy.
MR. WHITE: Based on the policy of supporting the
Italian Government, so they will be sure they are making
the policy.
(Mr. Pehle enters the conference.)
H.M.JR: What else do you have?
MR. WHITE: That is all. You asked about Italy, and
that is all there is.
H.M.JR: I know you (Pehle) will feel uncomfortable
in this crowd.
MR. WHITE: That is all there is on Italy.
We are getting into a little trouble in China. There
is some disagreement, and I wondered if it would be approp-
riate for you to check with the President on the question
of giving them gold, because they are going to raise it
with him if we keep holding off.
- 11 H.M.JR: Look, next week why don't you have Donald
Nelson in and talk with him about this thing. He is just
back from, the Philippines.
MRS. KLOTZ: And chop suey.
H.M.JR: Did you hear the story about Donald Nelson
that Friedman told? This General somebody or other who
is, as he puts it, the Grover Whalen of China. He sent
for Friedman because he was sort of worried, and had him
down to dinner. After dinner he said to Friedman, "I am
really worried, and I need your help." "
Friedman said, "That is out of my department, but I
will be back; this is really a problem .
"
The General said, "Do you know, I have been working
for days on the menu for Mr. Nelson, and after the twelfth
day I have to repeat myself. Do you have any suggestions?"
MRS. KLOTZ: He has probably fixed that story up.
H.M.JR: No, I think I minimized it.
MR. WHITE: During the next week we are going to
continue to hold our line on that and not give them any
gold, with the expectation that the President won't be
able to get at it until then. They are getting very upset
over it.
H.M.JR: Talk to Nelson; he just came back. They are
going to make a million trench tools, and are very pleased
about it.
MR. WHITE: There is a sidelight on this, the British
dealing with the Chinese. The British are going to give
the Chinese a million dollars worth of gold in Calcutta in
exchange for which the Chinese are going to give them a
million dollars here, but the British are charging them
five percent on a million dollars.
H.M.JR: That is almost as good as the sheriff of
New York.
- 12 -
But this withholding of the gold and making it
difficult for them to ship is something that you people
are all in agreement on?
MR. WHITE: Well, yes, we have taken that position
right along. We have been stalling for over a year, you
see, and we have been able to give them only twenty-six
million; although they have been pressing for much more,
we have been finding excuses, but they suddenly discovered
they could send it on commercial boats.
H.M.JR: Why don't I write the President a little
memo and tell him what we are doing, and tell him if he
wants to do something that would please them very much we
could ease up on this thing. This has been the policy for
the past year, and I would like to have his advice, and
"We have been doing this with the knowledge of State and
the War Department."
MR. WHITE: Some time ago he said he wanted to send
them gold. It was all confused. I remember later on it
was twenty-five million dollars a month.
H.M.JR: "We are doing this with the knowledge of State
and War?"
MR. WHITE: We didn't ask War; we told them.
H.M.JR: "With the knowledge of State and War, and
we felt that this was the policy to pursue."
Now, if he wants us to ease up on this decision, or
wants us to continue, we will be very happy-MR. WHITE: Or, we can not mention about the past,
but say that the Chinese want a lot of gold.
H.M.JR: I would mention the past.
All right, gentlemen.
M
DEC 23 1944
Dear Ed:
This is in reply to your letter of December 16 concerning
the Italian Financial Mission now in this country. The Treas-
ury will be guided by your statement that it is politically
desirable for the mission to attain some accomplishments during
their visit here, and that the discussion should be directed
towards finding practical steps which would assist the Italians
and enable them to assume fuller responsibilities over their own
affairs. I understand that the financial discussions with the
Italian Financial Mission have been proceeding along this course,
and that in the technical discussions between the reprenentatives
of your Department and the Treasury, agreement has been reached
on the type of program which might be given to the Italian Mis-
sion. I note that this is essentially the program which is inclu-
ded in your letter of reference.
There is attached a suggested statement which I might give
to the Italian Mission as the accomplishment of the financial
discussions, after your Department and the War Department have
indicated approval. It is not intended that this statement be
given publicity, but that an appropriate press release be pre-
pared at the time the mission leaves Washington.
Sincerely,
(Signed) Henry
Secretary of the Treasury
The Honorable,
The Secretary of State.
Enclosure.
HG:Drl -12/23/44
N
"The U. S. Government has viewed sympathetically the explanations
and proposals of the Italian Financial Mission, and expresses its desire to take such steps as may be appropriate and fessible to restore
to Italy responsibility and authority for its financial administration
at the earliest possible moment.
"1. The U. S. Government will consider the negotiation of a written agreement or "understanding" between the two governments on the pay-
ment to Italy of troop pay dollars and of the procedures involved for
the payment of funds and the use of the funds by the Italians.
"2. The U. S. Government will take steps directed towards providing the Italian Government with all the information available on the
financial transactions which the Allies have carried out in Italy.
"3. The U. S. Government will initiate steps leading to an agree-
ment between the United Kingdom and the United States on the one hand
and the Italian Government on the other hand which will transfer to
the Italian Government the issuing authority for the Allied military
lire.
"4. The U. S. Government will assist the Italian Government in
its efforts to mobilise to the maximum extent the foreign exchange
assets of Italy with the objective of permitting Italy to assume the
greatest amount
struction
of Italy.of responsibility for the rehabilitation and reconIt is understood that the United States Government must act in
concert with the Government of the United Kingdom and the other interested United Nations in carrying out these steps and that the interests of these other governments must be fully considered.
12/23/44
0
10:00- copies to D.N.B.H
ADDRESS OFFICIAL COMMUNICA
THE SECRETARY OF STATE
WASHINGTON,
10:30- White,
DEPARTMENT OF STATE
WASHINGTON
Runstin todinus
it with day
10/20-
In reply refer to
December 16, 1944
FMA
Dear Henry:
I refer to your letter of November 22 regarding the
Italian Technical Mission which is now in this country,
and to my reply of November 23. I had originally thought
that we might talk the matter over, but since you have
been out of town, it seemed to me that it might be
helpful to set down our ideas on what we should attempt
to work out with the Mission.
The Italian Mission came to the United States as
a result of a request of the Italian Government to send
experts and technicians to Washington and London to
discuss the urgent economic and financial problems of
Italy. The Department agreed to receive technical
representatives to discuss such problems in an unofficial
capacity. We were informed that the British Government
was unwilling to receive such a group prior to the establishment of an Italian diplomatic mission in London.
After its arrival in Washington, the Mission sub-
mitted to the Department an agenda covering a number of
points, particularly in the financial field but also
touching on trade and other matters. A copy of this
A number of the subjects listed involve our Allies and
can be definitively discussed with the Italians only on
a combined basis. Others are more directly concerned
with Italo-American relations.
agenda was immediately furnished to your Department.
We feel that the Mission should receive a sympathetic
hearing from the various Departments and agencies concerned
on all the subjects which it wishes to discuss. In the
case
The Honorable
FOR VICTORY
BUY
UNITED
SAVINGS
BONDS
AND
STAMPS
Henry L. Morgenthau, Jr.,
Secretary of the Treasury.
P
-2-
case of some of the matters involving our Allies, it
may be possible only to allow the Italians to explain
their problem, to tell them why the Allies are involved,
and to suggest that the appropriate procedure for seeking
specific solutions 18 for the Italians to take them up
with the Allied Commission. In the case of questions
involving the United States only, it is our feeling
that the discussions should be as detailed as possible
and that the United States' viewpoint on the subjects
should be frankly indicated to the Mission to the
extent that this can be done. We also consider it
important that the Mission be provided with as much
in the way of factual information bearing on the economic
and financial problems of Italy as can be given to it.
While the Department believes that the American
Government agencies concerned should be giving serious
consideration to the extent to which the United States
could assist Italy in dealing with its reconstruction
problems, it does not seem possible at this time for
the United States Government to develop, in consultation
with the Italian Government a program for Italian reconstruction. In view of the basis on which we agreed to
receive the Technical Mission, we had not contemplated
that any formal agreement would be reached with the
group. Nevertheless, I am sure you will appreciate the
political importance, particularly at this stage of
affairs, of our not allowing the Mission to return to
Italy without some accomplishments. It seems to me that
matters involving only United States-Italian relations,
particularly those concerning current financial relations,
should therefore be discussed with the Mission with a
view to determining whether there are practical steps
which the Government of the United States could take
which would in any way assist the Italians and enable
them to assume fuller responsibility over their own affairs.
The discussions which have already taken place with
the Mission have, I understand, indicated the possibility
of some measures of this character. The points in the
financial field which we think should be explored are the
following:
1. The steps which the United States
Government
Q
-3-
Government could take to facilitate the centralization
of the Italian note issue in the Bank of Italy.
2. The possibility of formalizing the present
arrangements under which the dollar equivalent of the
lire expenditures out of the pay of American troops
in Italy are made available to the Italian Government, by incorporating these arrangements into an
agreement with the Italian Government.
3. The possibility of permitting the use of the
troop pay dollar account for any essential expenditures of the Italian Government which are approved by
the appropriate combined agency.
4. The extent to which this Government can indicate to the Italian Government its attitude toward
steps which might be taken to give the Italian Government greater control and responsibility in the field
of Italian fiscal matters.
The Department is considering the feasibility of
other measures, particularly in the field of trade,
which could be discussed at least in a preliminary
way with the Technical Mission.
As I have already said, we do not contemplate
entering into an agreement with the Mission which is
now here. Any agreements with the Italian Government
for the present would necessarily have to be made
through our diplomatic mission in Rome. However, if
it appears from the discussions with the technical
group which is now here that something can be done on
any of the subjects which have been taken up, I think
we should be prepared as a minimum to indicate to the
Mission our willingness to enter into negotiations
with the Italian Government on these matters. I
think it will also be necessary for us to make some
kind of press announcement at the conclusion of the
discussions with the Mission.
I believe that progress along the lines I have
indicated can probably best be made by permitting
the conversations with the Mission to proceed along
the
R
-4-
the lines that they have already taken. I hope that
it will be possible to bring them to a conclusion
within two or three more weeks.
Sincerely yours,
Thank
S
THE UNDER SECRETARY OF STATE
WASHINGTON
November 23, 1944
Dear Henry:
Thank you for your letter of
November 22 enclosing photostatic copies
of your memorandum for the President and
his reply to you on the matter of Italian
reconstruction I would be delighted to
talk to you about this any time at your
convenience.
With best wishes,
E
Sincerely yours,
The Honorable
MOA
sv
Henry Morgenthau, Jr.,
Secretary of the Treasury.
November 22, 1944
Dear Ed:
Just before leaving to spend Thanks-
giving with my son at Norfolk, I am sending
you a photostatic copy of a letter which I
sent to the President together with a copy
of his memorandum to me. I would be glad
to hear from you on this matter.
Yours sincerely,
(Signed) Henry Morgenthau, Jr.
PerHSK
The Honorable Edward R. Stettinius, Jr.,
Under Secretary of State,
Washington, D.C.
THE WHITE HOUSE
WASHINGTON
November 21, 1944.
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY
Please talk this over with
Ed Stettinius.
F. D. R.
V
THE SECRETARY OF THE TREASURY
WASHINGTON
MEMORANDUM FOR THE PRESIDENT
At invitation of the State Department,
the Italian Government has sent a technical
mission to Washington to discuss financial
questions leading up to the reconstruction
of Italy.
Do you want these discussions to develop
into a specific program of what the United
States might do to help in the financial and
economic reconstruction of Italy?
FOR VICTORY
BUY
UNITED
STATES
WAR
BONDS
AND
STAMPS
1
December 23, 1944
10:30 a.m.
SURPLUS PROPERTY PERSONNEL
Present: Mr. Pehle
Mrs. Klotz
MR. PEHLE: Now, one of the things, Mr. Secretary, I
wanted to get your reaction on that we need down on the
Surplus side is an Industrial Research Section, composed
of a few people who will devote their time to figuring out
uses for property which were made for war purposes but which
are of no value for civilian goods, unless somebody with
ingenuity can devise uses for them.
Now, to some extent the Treasury will do that, but to
the extent we can do it and make it public--and I'd like to
go ahead with the planning: to set up a small section which
can draw on university research, which can draw on the
Government's various agencies for research so that we can
get some of this stuff used instead of selling it to one
guy who invents a use for it and makes a fortune out of it
and then everybody complains.
H.M.JR: In other words, to devise uses for the
military--
MR. PEHLE: And to make them public as we devise things
and to stir up private people to do it--to stir up universities to do it--foundations--and to tie it in that way.
One of the problems is to get Federal agencies to take
surplus goods. Congress feels very strongly the Federal
agencies should take surplus, but the trouble is, of course,
the procurement of Federal purchasing is done all over. It
was supposed to have been consolidated in Procurement. It
was not, because Procurement has never been ready to take it
on. That is a long-range thing. But immediately we have
got to have a workable way of seeing that Federal agencies
go first to Surplus to get their needs.
2
-2Now, I had a talk with some of the key Procurement
people around town this week, and I threw out to them
the suggestion that what if we took the market value of
the goods and cut twenty-five per cent off when we sold
to Federal agencies. It just changes their whole think-
ing. It is all out of the same bin. It is all the
Government property. All you are doing is transferring
it from one Government agency to another, but the fact
that they could get the twenty-five per cent reduction
just changes the whole picture.
H.M.JR: They get it cheaper than who?
MR. PEHLE: Than if they bought it in the market.
In addition to that, all of the goods are shopworn in
the sense they have been transferred from the Army to
other places and all around, and they are all to some
extent goods that have deteriorated, although in some
cases that is not material. Now, if that makes sense --
and I am quite sure it does -- I would like to follow
it up informally with Budget and try to sell it so that
we are not going to get kick-backs from the Appropriations
Committee.
H.M.JR: Well, if Mayor LaGuardia, who is very active
in this -- he has a proposition that agricultural people
can buy this for seventy-five cents on the dollar.
MR. PEHLE: There will be trouble. One of the
problems is, will you distinguish between Federal and
state agencies -- and I think you can hold that line.
But if we don't dispose of these goods to the fullest
extent to Government agencies, we are going to be in
serious hot water. Congress will just go wild.
H.M.JR: Explore it.
MR. PEHLE: That is what I am doing. Then we will
have to sell it to the new Board when they start to
operate. Two of them have been appointed, but there is
no sign they are taking over.
H.M.JR: I heard indirectly that Colonel Heller was
operated on in Boston for phlebitis.
3
-3MRS. KLOTZ: For heaven's sake! Didn't he say to
you he would have to have something done?
H.M.JR: I don't remember.
MR. PEHLE: Well, we will go ahead and develop that
and I will clear it with you.
I asked for two income tax returns -- probably out
of channels. One of them was on Duncan who is down
there. Another one is on Hilton who is down there, also,
but whom I have on the way out.
H.M.JR: If you will send me a little memo on it --
a request --
MR. PEHLE: Sure. I just did not want to -H.M.JR: I sent that word back to you, myself.
MR. PEHLE: I know. I realize that.
H.M.JR: I cut corners the other day. I made the
first mistake. Well, if you will give me a little
formal memorandum -- what do you want to know?
MR. PEHLE: I want to see the returns because
these guys are in very key positions. When they are
investigated the investigator goes to see their returns,
but I just want to be sure. With one of them I have
serious doubts.
H.M.JR: You just send me a little formal memorandum.
It comes to me.
MRS. KLOTZ: But you won't be here.
H.M.JR: I am telling you now that I approve.
MR. PEHLE: I am issuing a very strong order to the
Staff about methods of doing business, of not doing any
procurement business off the premises, about not taking
gifts of any kind, and so forth. I think we have to lean
way over backwards.
4
-4H.M.JR: When you do that, please look up the order
that
I issued to Alcohol Tax, and I think you will find
it almost a model.
MR. PEHLE: All right. I will clear it with
Charley Bell's office.
H.M.JR: Yes, I think you will find the one to the
Alcohol Tax people was about as tough as it could be.
MR. PEHLE: That is what I want to get.
H.M.JR: I go much further on tax, for instance, on
what kind of securities they can own and everything else.
MR. PEHLE: Well, what we are doing on that is not
prescribe, because we are in a little different situation,
but we are requiring a full report of that they have. I
mean, they have to report everything they are holding as
of a particular date. At least we have a cut-off so we
know where they stand, and a complete reporting of all
business relationships they have had so we know whether
they have had relationships with a certain company.
H.M.JR: I would like to see that, myself, before
you put it into effect, because I am very much interested
and I more
behind
it. or less did the Alcohol Tax -- I mean, I was
MR. PEHLE: One of the sidelights I ran into, we had
a fellow down in the Washington Surplus office here who
was hired with the knowledge that he had been in jail
for manslaughter. It was a domestic squabble, and he shot
somebody and he was in Lorton for several years. Well,
that could be explained away, but they investigated and
found he had also been in jail for embezzlement, and
Irey's office reported it down there. About the time I
got down there, the people down there reported back to
Irey's office and said they did not want to fire the guy
because he was doing very good work.
But that to me is just indicative of very dangerous,
lax procedure.
H.M.JR:
Was that on the Surplus side?
5
-5MR. PEHLE: It was in the middle.
H.M.JR: Cliff Mack ought to know better than that.
MR. PEHLE: The fellow was working on the surplus
side, but we have let him go since; but he was working
down there and he had been in jail for embezzlement and
he had not reported it in his application.
H.M.JR: Inexcusable!
MR. PEHLE: Yes. We are having some trouble on Staff
down on the Surplus side in the sense that when Olrich
went away, particularly in connection with the Textile
side, he left us in a very weak position because we had
this fellow Fleming from Marshall Field who is a very
good man, but he had just been down there temporarily
and he was leaving -- had been leaving. There had been
no attempt made to set up a staff under him. The same
is true with a lot of the others, so I am just having to
take the bull by the horns and get hold of some staff,
because otherwise the place would just fall to pieces.
But the main job remains to get the top man down there.
That we will have to focus on.
There are two things on refugees I would like to
mention to you, one is that I have been trying to do what
I can from this end to keep Stettinius from assigning this
Refugee thing to the wrong guy over there, and it is very
easy to do because the most of them are wrong. The only
possibility I see of even making it look acceptable to
the public is to have the thing assigned to either Acheson
or MacLeish. Anybody else I think you might as well
assume is not going to do anything. I just wanted to tell
you that in case it came up in any way, so if you wanted
to say something to Stettinius
H.M.JR: Who is this fellow Bohlen whom he has
assigned to look after the White House? He will most
likely assign him to me, too.
MR. PEHLE: He has been on the Russian desk over
there. It is Bohlen, I think. He is a young fellow
and apparently the President took a liking to him and
took him on several conferences.
6
-6H.M.JR: He is an interpreter.
MR. PEHLE: He is a little more than that, over
there.
H.M.JR: I mean an interpreter for the President
with Stalin.
MR. PEHLE: Yes, probably he is the one. As far
as I can tell, I liked him. I heard some place that
he comes from the Krupp family, but I am not at all
sure that that has been verified.
H.M.JR: The German Krupp?
MR: PEHLE: Yes.
Now, we have also been putting a little pressure on
Stettinius on war crimes from the War Refugee Board side,
because as long as the Germans are fully aware that the
German atrocities against the Jews are not considered to
be even war crimes by this crazy War Crime Commission --
H.M.JR: You know about Peter Bergson having been
here and the point he made?
MR. PEHLE: Yes, I just wanted you to know. I have
been pushing Stettinius very hard on that thing. Here
is another letter if you care to read it. (Refers to
file)
H.M.JR: No, not today.
MR. PEHLE: I am going right ahead and pushing him
all the way along. The War end is still doing a pretty
good job, and State, as far as refugees are concerned;
but of course the new group over there are going to be
in the hole very badly.
H.M.JR:
P. M. had the whole story last night.
MR. PEHLE: That is right.
H.M.JR:
Did we send that up to the Committee?
7
-7MR. PEHLE: No, the Committee never asked us for any
of it. Pearson had the whole story, too. He told me over
the telephone. I was very happy about what you did on
this meritorious promotion thing yesterday. I think there
are a lot of things like that, Mr. Secretary, which you
can do an awful lot of good on, where the policy in the
past never got to you. You get individual cases, but
you don't see policy that way, and where we could just
change the whole feeling.
H.M.JR: And they keep it a secret -- that is the
silly part.
MR. PEHLE: Meritorious promotions are little things,
but they can be used to give more people comfort that they
are doing a good job than anything I know.
MRS. KLOTZ: These little, lowly salaried people -MR. PEHLE: They do monotonous jobs, day after day,
counting checks.
H.M.JR: So is mine monotonous!
MR. PEHLE: Whatever the job is, it is not monotonous!
0
0
8
December 23, 1944
MEMORANDUM RE JURISDICTION OF WAR
CRIMES COMMISSION OVER MURDER OF JEWS
1. Last August in London Mr. DuBois learned from
Mr. Herbert Pell, American Representative on the War Crimes
Commission, that most of the Commission's members were of
the opinion that the term "war crime," as defined by the
Commission, did not include acts committed by the Nazis
and their satellites against Jews of "Axis" nationality
and other stateless persons. This would mean that persons
guilty of atrocities against German, Hungarian, Bulgarian
and Rumanian Jews would escape punishment as war criminals
unless they also happened to have committed crimes against
United Nations nationals. Mr. Pell indicated that the view
of the Commission might well change if a strong cable of
instructions were received from Washington setting forth
the disagreement of the United States Government with any
such restrictive definition of the term "war crime."
2. On August 28, Mr. Pehle transmitted a memorandum
to Mr. Stettinius recommending that a cable be sent to Mr.
Pell advising him of the declared policy of this Government
that all Axis nationals guilty of atrocities, regardless of
whether the victims were or were not of the same nationality
as the criminals, should be tried and punished as war criminals.
On September 4, Mr. Pehle received a reply stating that the
War Refugee Board would be advised as soon as a decision
was reached within the Department of State.
3. Nothing further was heard from the Department
of State. Each time that an inquiry was made by telephone -and there were more than five such inquiries in the past
three months -- the Board was advised that the matter
was still "under consideration" by the Office of the Legal
Adviser to the Secretary of State and the War and Navy
Departments.
4. When Mr. Herbert Pell called on Mr. DuBois two
weeks ago asking why he had not received a cable of instructions from Washington, inquiry was again made of the Department
of State. This time the Board's representative received the
0
9
-2"impression" that the State Department had been unable to find
a "legal theory" to justify the punishment of Germans for killing German and other Axis Jews. Four or five days later, a
letter was received from Mr. Stettinius stating that the whole
war crimes situation was still under "active consideration" by
the Department of State and other interested Departments.
5. Mr. Pehle and Mr. Friedman have since had another
discussion with a representative of the Department of State
with regard to the question of war crimes. They were advised
confidentially that the War and State Departments are "considering" what action can be taken and propose to submit a program
to the President within the near future.
Attachments:
(1) Memorandum dated August 17, 1944, of Mr. DuBois'
conversation with Mr. Pell.
(2) Memorandum dated August 28, 1944, transmitted by
Mr. Pehle to Mr. Stettinius, together with proposed cable to
Mr. Pell.
(3) Memorandum setting forth the various declarations
by United Nations Governments promising retribution for Axis
war criminals guilty of crimes against the Jews.
(4) Copy of letter from Mr. Pehle to Mr. Stettinius,
dated December 23, 1944.
10
1.
11
August 17, 1944
MEMORANDUM FOR THE FILES
Following are the highlights of my conference today with
Herbert Pell, American member on the United Nations Commission
for the Investigation of War Crimes:
1. Mr. Pell said that he wanted to give me some
information concerning the Commission which has not been made
public, but which I could feel free to pass on to the War
Refugee Board. Specifically referring to the work of the Board
Mr. Pell asked whether or not it was my understanding that
machinery had been set in motion to deal with the crimes being
perpetuated by the Nazi against minority groups. I told Mr.
Pell that I had knowledge of this Commission which had jurisdiction over such matters, but that I was not very familiar
with the background of the Commission. Mr. Pell then went on
to explain that his Commission did not have jurisdiction over
many of the crimes which the Nazi were perpetuating. Thus, for
example, he stated that the Commission had taken the point of
view that "war crimes" must be established in accordance with
the definition of "war crimes" as used in international law and
that it only relates to crimes committed by one belligerent
against another belligerent (or its citizens) and sometimes
crimes committed against neutrals; that war crimes could not
include an act committed by a nation against its own subjects
or by a nation against the subjects of one of its Allies.
Applying this to the case of the persecution and annihilation
of minorities in occupied Europe, crimes as the Commission
defined it would include crimes committed against Polish
citizens by Germans, but would not include acts against German
citizens by Germans, Hungarian citizens by Hungary, etc., or
the crimes by Germany against Hungarian citizens, Rumanian
citizens, etc.
I told Mr. Pell that whatever the definition of "war
crimes" may have been in the past to make the distinction he
was talking about in the light of the realities of the present
war did not make sense to me, and that many of the concepts
0
o
12
-2developed in international law had to be revised in the light
of the facts of the present war; that merely because war crimes
may have been defined in such a narrow sense in relation to past
wars should not be used as a necessary precedent in relation to
the present war.
Mr. Pell said that he agreed with this point of view but
that the other members of the Commission (most of whom were
lawyers -- Mr. Pell not being a lawyer) disagreed and took the
position that they were bound by the concept of war crime which
had already been accepted in international law.
Mr. Pell said that he felt that crimes such as the crimes
by Germany against its own citizens and citizens of Hungary
should be brought within the jurisdiction of his Commission.
He said that he felt that the best way of tackling this problem
was not by trying to convince the members that the definition
of war crimes should be broadened but rather that each country
should instruct its representatives on the Commission that these
particular crimes should be dealt with by the Commission.
Specifically he suggested that if the United States Government
should instruct him to this effect he felt that this would go
a long way towards getting this position adopted. Pell further
suggested the possibility of having it appear in the press of
the United States that the United States Government had so
instructed its member. Pell added that in connection with any
such instructions the point should be borne in mind that machinery
for dealing with bringing such crimes to the attention of the
Commission should be thought out inasmuch as the machinery used
for bringing to its attention crimes against United Nations was
not appropriate. For example, in the case of crimes committed
against France the Commission relies upon the French Government
to bring these facts to the attention of the Commission and
some machinery would have to be worked out for bringing to the
attention of the Commission crimes committed against enemy
subjects.
2. In discussing the general work of the Commission Mr.
Pell pointed out the following facts:
(a) In so far as membership is concerned all
the United Nations are entitled to have representation
on the Commission. However all United Nations have not
designated a representative. For example Russia has not
13
-3designated a representative. I asked Mr. Pell why Russia
had not designated a representative and he said it was
probably because Russia was dealing herself with crimes
committed against her people.
(b) The Commission does not actually engage in
investigative work itself but allows the respective
members on the Commission to bring to the attention of
the Commission crimes committed against its people.
(c) The Commission will not actually itself mete
out punishment but in accordance with the Moscow
Declaration will do what it can to see to it that the
criminals are sent back to the country in which their
crimes were committed.
(d) Pell said that he thought that most of the
United Nations in Europe would actually punish war
criminals but that the United States and Great Britain
would probably be very soft hearted about the matter.
The arch criminals such as Hitler, Goering, etc., would
not be dealt with by the Commission but rather be dealt
with on a political level by the Governments of United
Nations.
(3) In discussing the general work of the War Refugee
Board Pell said that there were two schools of thought as to
the question of the extent to which publicity of the threat
of punishment was helpful. One school took the position
that it did more harm than good to publicly threaten punishment, while the other group took the position that the threat
of punishment would deter the prosecution of the crime. I
told Pell that the War Refugee Board had definitely adopted
the latter point of view. Pell seemed to be sympathetic and
pointed out that if we could get instructions of the kind he
was talking about to the Commission it might be helpful in
connection with the work of the War Refugee Board if such
instructions were made public. Pell said that to date the
attitude had been that no publicity should be given to the
work of the United Nations Commission but that he thought that
this policy would be changed soon. I told him that I thought
that publicity would be a healthy thing and he said that he
agreed.
14
-44. Throughout our discussion Pell continually made the
point that the Jews were not the only groups in Europe being
persecuted and that many minority groups, particularly the
Catholics, were being persecuted. He said that the only
difference between the Jewish groups and other groups was that
the Jewish groups were much larger. I pointed out that however
true this might be the Jews of Europe were the only group with
respect to which the Nazi had adopted a systematic policy not
only of persecution but also of extermination. Pell said this
is probably right.
5. Pell said that another type of crime which did not
fall within the jurisdiction of the Commission was the looting
of property in occupied countries, particularly through
apparently legal devices such as purchasing the stock of
corporations, etc. Pell specifically mentioned the case of
France and what the Germans had done there. He said that so
far as he was concerned he hoped that some group other than
the Commission would be assigned the task of dealing with this
job and he wanted no part of it.
6. Pell made it clear that he hoped that I would take up
the matter of the scope of the jurisdiction of his Commission
over "war crimes" in Washington. He specifically mentione d
that it might be brought to the attention of Secretary Hull
and reiterated that if he could get the proper instructions
from Washington he could carry on from there.
J. E. DuBois, Jr.
0
15
0
COPY
16
August 28, 1944
MEMORANDUM FOR MR. STETTINIUS
As you know, a major activity of the War Refugee Board
has been psychological warfare designed to induce and persuade the enemy to cease the persecution of the Jews and
other minorities. The basis of this program, which has been
carried out in cooperation with the State Department, Office
of War Information and other agencies, has been the threat
to punish every Axis war criminal who has participated,
directly or indirectly, in such persecution. Threats of
this nature had been made by the United Nations, including
various branches of this Government, even before the War
Refugee Board was established, and they have since been
repeated with increasing tempo. For your information we have
collected and are attaching hereto those declarations which
specifically set forth the determination of the United States
and of other United Nations to punish the perpetrators of
atrocities and other crimes against Jews and other minorities
even where the victims are or were nationals of Germany or
of a satellite power.
We had assumed that one of the primary functions of
the United Nations Commission for the Investigation of War
Crimes which was created in 1943, would be to devise procedures for the gathering of evidence and the ascertainment,
trial and punishment of those enemy nationals who had par-
ticipated in such war crimes. Much to our surprise we were
informed by our General Counsel, Mr. Josiah E. DuBois, upon
his return from London recently that he understood from a
conversation with Mr. Pell, the United States representative
on the Commission, that the Commission takes the view that
war crimes under international law do not include crimes
committed by an Axis nation or its nationals against its
own subjects or the subjects of another Axis nation. Accordingly, it appears that the Commission is not making any
provision for the just punishment of such war criminals.
Needless to say, it would be a fearful miscarriage of
justice if such war criminals were permitted to escape
punishment for their inhuman crimes. Moreover, the failure
to implement the numerous threats of punishment would not
17
-2only subject to ridicule the authors thereof, but would
render it far more difficult to deter similar criminal conduct in the future. The failure to punish the criminals of
World War I may well have removed a deterrent to the commis-
sion of brutalities against civilian populations in this war,
including the mass murder of the Jews.
According to Mr. DuBois' report, Mr. Pell is not satisfied with this position of the United Nations Commission for
the Investigation of War Crimes, but seems not to have received instructions from this Government in the matter. Mr.
Pell believes that the most effective way of inducing the
Commission to broaden the scope of its work to include the
punishment of all Axis war criminals, including those guilty
of crimes against persons in the above categories, would be
to have the United States Government instruct him to urge
the Commission to include such crimes in its program and, if
possible, to have the other governments represented on the
Commission instruct their representatives along similar lines.
Another suggested step would be to publicize such an instruction by releasing it to the press.
Accordingly, we suggest that the Department advise
Mr. Pell along the lines of the proposed cable attached hereto
indicating clearly that the declared policy of the United
States Government is to ensure the just punishment of all Axis
war criminals, including those guilty of crimes against the
Jews and other minorities whether or not the victims of such
crimes are of the same nationality as the evildoers; and
that Mr. Pell should insist upon the formulation of a program
by the Commission effectuating this policy.
(Signed) J. W. Pehle
J. W. Pehle
Executive Director
COPY
O
18
CABLE FROM
THE DEPARTMENT TO AMBASSADOR WINANT FOR H. C. PELL,
LONDON,
ENGLAND
In connection with Mr. Pell's work on the United Nations
Commission for the investigation of War Crimes he should be
advised of the following:
A joint statement was issued on December 17, 1942 by the
Governments of the United States, Belgium, Czechoslovakia, Greece,
Luxembourg, Norway, Poland, Russia, United Kingdom and Yugoslavia
and the French National Committee condemning the brutal slaughter
of the Jews of Europe by the Germans. The statement concludes:
QUOTE The above-mentioned Governments and the French National
Committee condemn in the strongest possible terms this bestial
policy of cold-blooded extermination. They declare that such
events can only strengthen the resolve of all freedom-loving
peoples to overthrow the barbarous Hitlerite tyranny. They
reaffirm their solemn resolution to insure that those responsible for these crimes shall not escape retribution and to
press
on with the necessary practical measures to this end.
END QUOTE
The United States Congress in March 1943 passed a concurrent
resolution, which after reciting the atrocities inflicted on the
Jews by the Nazis, resolved as follows:
QUOTE That these brutal and indefensible outrages against
millions of helpless men, women, and children should be, and
they are hereby, condemned as unworthy of any nation or any
regime
which pretends to be civilized:
RESOLVED FURTHER, That the dictates of humanity and
honorable conduct in war demand that this inexcusable slaughter
and mistreatment shall cease and that it is the sense of this
Congress that those guilty, directly or indirectly, of these
criminal acts shall be held accountable and punished in a
manner commensurate with the offenses for which they are
responsible. END QUOTE
On March 24, 1944, President Roosevelt issued a statement
condemning the systematic torture and murder of civilians by the
Nazis and of civilians and American soldiers by the Japanese. He
also made the following specific reference to the slaughter of the
Jews and the punishment by the United Nations of those who
participated therein:
-2-
o
19
QUOTE In one of the blackest crimes of all history - begun
by the Nazis in the day of peace and multiplied by them a
hundred times in time of war- the wholesale systematic
murder of the Jews of Europe goes on unabated every hour.
As a result of the events of the last few days hundreds of
thousands of Jews, who while living under persecution have
at least found a haven from death in Hungary and the Balkans,
are now threatened with annihilation as Hitler's forces descend
more heavily upon these lands. That these innocent people,
who have already survived a decade of Hitler's fury, should
perish on the very eve of triumph over the barbarism which
their persecution symbolizes, would be a major tragedy.
It is therefore fitting that we should again proclaim our
determination that none who participate in these acts of
savagery shall go unpunished. The United Nations have made
it clear that they will pursue the guilty and deliver them
up in order that justice be done. That warning applies not
only to the leaders but also to their functionaries and
subordinates in Germany and in the satellite countries. All
who knowingly take part in the deportation of Jews to their
death in Poland or Norwegians and French to their death in
Germany are equally guilty with the executioner. All who
share the guilt shall share the punishment. END QUOTE
On March 30, 1944 Anthony Eden stated on the floor
of the House of Commons that His Majesty's Government wholeheartedly
concurred in the above views of President Roosevelt. He said
further
QUOTE Evidence continues to reach His Majesty's Government
and Allied Governments that the Nazi policy of extermination
has not been halted. The persecution of the Jews has in
particular been of unexampled horror and intensity. On this
His Majesty's Government in common with their Allies, now
that the hour of Germany's defeat grows ever nearer and more
certain, can only repeat their detestation of Germany's crimes
and their determination that all those guilty of them shall
be brought to Justice. But apart from direct guilt there is
still indirect participation in crime. Satellite governments
who expel citizens to destinations named by Berlin must know
that such actions are tantamount to assisting in inhuman perse-
cution or slaughter. This will not be forgotten when the
inevitable defeat of the arch enemy of Europe comes about.
END QUOTE
O
O
20
-3Secretary Hull on July 15, 1944, addressing himself specifically to the brutal persecution of Jews in Hungary, said:
QUOTE Reliable reports from Hungary have confirmed the
appalling news of mass killings of Jews by the Nazis and
their Hungarian quislings. The number of victims of these
fiendish crimes is great. The entire Jewish community in
Hungary, which numbered one million souls, is threatened
with extermination. The horror and indignation felt by the
American people at these coldblooded tortures and massacres has
been voiced by the President, by the Congress, and by hundreds
of private organizations throughout the country. It is shared
by all the civilized nations of the world. This Government
will not slacken its efforts to rescue as many of these
unfortunate people as can be saved from persecution and
death.
The puppet Hungarian government, by its violation of
the most elementary human rights and by its servile adoption
of the worst features of the Nazi 'racial policy', stands
condemned before history. It may be futile to appeal to the
humanity of the instigators or perpetrators of such outrages.
Let them know that they cannot escape the inexorable punishment which will be meted out to them when the power of the
evil men now in control of Hungary has been broken. END QUOTE
The foregoing emphatically declares the policy of the United
States, as well as of other United Nations, to see to it that all
Axis nationals guilty of war crimes, including those against Jews
and other minorities whether or not the victims were of the same
nationality as the criminals, shall be ascertained, tried and
punished.
Please advise whether the United Nations Commission to
investigate War Crimes has devised a program and procedures to
effectuate the foregoing policy with respect to war crimes against
the above-mentioned groups. If no such program and procedures
have as yet been formulated, you are instructed to inform the
Commission of this Government's policy with regard thereto and
of its dissatisfaction with any program adopted by the Commission
that will not take into account the punishment of Axis war
criminals for crimes against Jews and other minorities whether
or not they are nationals of enemy countries.
0
21
COPY
22
DECLARATIONS ADVOCATING PUNISHMENT OF AXIS
WAR CRIMINALS FOR CRIMES AGAINST THE JEWS
1. Joint statement of Belgian, Czechoslovak, Greek, Luxembourg,
Netherlands, Norwegian, Polish, Soviet, United Kingdom,
United States, and Yugoslav Governments and also of French
National Committee on December 17, 1942. (State Department
Bulletin, Vol. VII, Dec. 19, 1942. p. 1009.)
"The attention of the Belgian, Czechoslovak, Greek,
Luxembourg, Netherlands, Norwegian, Polish, Soviet,
United Kingdom, United States and Yugoslav Governments
and also of the French National Committee has been drawn
to numerous reports from Europe that the German author-
ities, not content with denying to persons of Jewish
race in all the territories over which their barbarous
rule has been extended the most elementary human rights,
are now carrying into effect Hitler's oft-repeated
intention to exterminate the Jewish people in Europe.
From all the occupied countries Jews are being trans-
ported in conditions of appalling horror and brutality to
eastern Europe. In Poland, which has been made the principal Nazi slaughterhouse, the ghettos established by
the German invader are being systematically emptied of
all Jews except a few highly skilled workers required for
war industries. None of those taken away are ever heard
of again. The able-bodied are slowly worked to death
in labor camps. The infirm are left to die of exposure
and starvation or are deliberately massacred in mass
executions. The number of victims of these bloody
cruelties is reckoned in many hundreds of thousands of
entirely innocent men, women, and children.
"The above-mentioned Governments and the French
National Committee condemn in the strongest possible
terms this bestial policy of cold-blooded extermination.
They declare that such events can only strengthen the
resolve of all freedom-loving peoples to overthrow the
barbarous Hitlerite tyranny. They reaffirm their solemn
resolution to insure that those responsible for these
crimes shall not escape retribution and to press on with
the necessary practical measures to this end."
23
-22. Congressional Resolution adopted in March, 1943. (Congressional Record, 78th Cong., 1st Sess., March 18, 1943, p. 2221.)
"Whereas the American people view with indignation
the atrocities inflicted upon the civilian population in
the Nazi-occupied countries, and especially the mass
murder of Jewish men, women, and children; and
"Whereas this policy of the Nazis has created a
reign of terror, brutality, and extermination in Poland
and other countries in eastern and central Europe: Now,
therefore, be it
RESOLVED BY THE SENATE (THE HOUSE OF REPRESENTATIVES
CONCURRING), That these brutal and indefensible outrages
against millions of helpless men, women, and children
should be, and they are hereby, condemned as unworthy of
any nation or any regime which pretends to be civilized;
"RESOLVED FURTHER, That the dictates of humanity and
honorable conduct in war demand that this inexcusable
slaughter and mistreatment shall cease and that it is the
sense of this Congress that those guilty, directly or
indirectly, of these criminal acts shall be held account-
able and punished in a manner commensurate with the offenses
for which they are responsible."
3. Excerpt from statement of President Roosevelt on March 24, 1944.
(State Department Bulletin, Vol. X, March 25, 1944, p. 277.)
"In one of the blackest crimes of all history--begun
by the Nazis in the day of peace and multiplied by them a
hundred times in time of war--the wholesale systematic
murder of the Jews of Europe goes on unabated every hour.
As a result of the events of the last few days, hundreds
of thousands of Jews, who while living under persecution
have at least found a haven from death in Hungary and the
Balkans, are now threatened with annihilation as Hitler's
forces descend more heavily upon these lands. That these
innocent people, who have already survived a decade of
Hitler's fury, should perish on the very eve of triumph
over the barbarism which their persecution symbolizes,
would be a major tragedy.
24
3-
"It is therefore fitting that we should again pro-
claim our determination that none who participate in
these acts of savagery shall go unpunished. The United
Nations have made it clear that they will pursue the
guilty and deliver them up in order that Justice be done.
That warning applies not only to the leaders but also to
their functionaries and subordinates in Germany and in
the satellite countries. All who knowingly take part in
the deportation of Jews to their death in Poland, or
Norwegians and French to their death in Germany, are
equally guilty with the executioner. All who share the guilt
shall share the punishment."
4. Excerpt from statement by Anthony Eden on floor of House of Commons, March 30, 1944. (Cable 2647 of March 31, 1944, from
London.)
"Evidence continues to reach His Majesty's Government
and Allied Governments that the Nazi policy of extermination has not been halted. The persecution of the Jews has
in particular been of unexampled horror and intensity. On
this His Majesty's Government in common with their Allies,
now that the hour of Germany's defeat grows ever nearer
and more certain, can only repeat their detestation of
Germany's crimes and their determination that all those
guilty of them shall be brought to Justice. But apart from
direct guilt there is still indirect participation in crime.
Satellite governments who expel citizens to destinations
named by Berlin must know that such actions are tantamount
to assisting in inhuman persecution or slaughter. This
will not be forgotten when the inevitable defeat of the
arch enemy of Europe comes about. "
5. Excerpt from President Roosevelt's message to Congress in connection with the bringing of 1000 refugees to Fort Ontario.
(State Department Bulletin, Vol. X, June 17, 1944, p. 554.)
"Above all, the efforts of the Board have brought new
hope to the oppressed peoples of Europe. This statement
is not idle speculation. From various sources, I have
received word that thousands of people, wearied by their
years of resistance to Hitler and by their sufferings to
the point of giving up the struggle, have been given the
will and desire to continue by the concrete manifestation
of this Government's desire to do all possible to aid and
rescue the oppressed.
O
25
4-
"To the Hitlerites, their subordinates and functionaries and satellites, to the German people and to all other
peoples under the Nazi yoke, we have made clear our deter-
mination to punish all participants in these acts of
savagery. In the name of humanity we have called upon
them to spare the lives of these innocent people."
6. Statement of Secretary Hull on July 14, 1944 on Hungarian
atrocities. (State Department Bulletin, July 16, 1944, p. 59)
"Reliable reports from Hungary have confirmed the appal-
ling news of mass killings of Jews by the Nazis and their
Hungarian quislings. The number of victims of these fiendish
crimes is great. The entire Jewish community in Hungary,
which numbered one million souls, is threatened with
extermination. The horror and indignation felt by the
American people at these cold-blooded tortures and massacres has been voiced by the President, by the Congress,
and by hundreds of private organizations throughout the
country. It is shared by all the civilized nations of
the world. This Government will not slacken its efforts
to rescue as many of these unfortunate people as can be
saved from persecution and death.
"The puppet Hungarian government, by its violation
of the most elementary human rights and by its servile
adoption of the worst features of the Nazi 'racial policy',
stands condemned before history. It may be futile to
appeal to the humanity of the instigators or perpetrators
of such outrages. Let them know that they cannot escape
the inexorable punishment which will be meted out to them
when the power of the evil men now in control of Hungary
has been broken."
8-25-44
26
O
27
COPY
O
December 23, 1944
Dear Ed:
Thank you for your letter of December 14, advising
me that the whole question regarding war crimes is still
under active consideration by the Department of State and
other interested departments.
As you know, psychological warfare has played an
important part in this Government's efforts to persuade the
enemy to cease the persecution and slaughter of Jews and
other minority groups. The concurrent resolution passed by
Congress in March 1943, the President's statement of March 24
of this year and the subsequent one of former Secretary Hull
on July 15 were all vitally important parts of this psychological program.
In view of the fact that an unfortunate impression
has been created that the United Nations have no real intention of punishing those guilty of crimes against stateless
persons, I think it would be an extremely propitious time
for you, as the new Secretary of State, to reaffirm publicly
this Government's intention to punish all war criminals,
including those who have committed crimes against stateless
and Axis nationals. Such a statement would be particularly
effective if you were to declare specifically that in the
eyes of this Government persons who commit crimes against
Axis Jews are war criminals.
I would appreciate an early response to this letter.
Sincerely,
/s/ John
Honorable Edward R. Stettinius, Jr.,
Secretary of State,
Washington, D. C.
MJM:nlf 12-22-44
28
December 23, 1944
10:55 a.m.
HMJr:
Hello.
Operator:
General Giles.
HMJr:
Hello.
General
Giles:
Hello, Mr. Morgenthau.
HMJr:
How are you, General?
G:
This is General Giles. Merry Christmas to you.
HMJr:
Same to you and a Victorious New Year.
G:
Thank you, sir.
HMJr:
G:
HMJr:
General, you were kind enough to have been helpful
in regard to my nephew, Peter Josten
Yes, sir.
when he was washed out, and then he went
HMJr:
into gliders.
=
Yes, sir.
Well, he's right up now to the end. He's supposed
to graduate on the 30th, and I'm not sure how he's
doing. I wondered if you would mind sending out
an inquiry to make -- to see whether he's going to
be able to make the grade or not.
G:
All right, sir.
G:
HMJr:
If you don't mind, I'll give it to you over the
phone. It's P. W. Josten -- J-o-s-t-e-n.
G:
Yes.
HMJr:
And he's twenty-five, twenty-seven, AAF.
G:
Twenty-five, twenty seven, AAF.
HMJr:
AAF it says.
G:
Yes.
HMJr:
Section H -- H like in Henry.
-2G:
That's right.
HMJr:
At Lübbock, Texas.
G:
That's right. We pronounce that Lubbock, Texas.
That's down in -- out on to the west of Dallas.
HMJr:
Yes.
G:
I'll send an incuiry out, and try to get the
information back and give to you by six o' clock
today.
HMJr:
Well, that will be wonderful. He's supposed to,
they say, to come through by the -- he's in a
class that's supposed to graduate on the 30th.
G:
The 30th of this month.
HMJr:
All right, sir, I'll get -- make an inquiry and
HMJr:
let you know within a few hours.
That's very kind and I hope I haven't asked too
much.
G:
No, that isn't. We'll be very glad to do it, Mr.
Secretary.
HMJr:
Thank you. Bye.
29
30
December 23, 1944
3:40 p.m.
INS, AP, UP CONFERENCE
Present:
Mr. D. W. Bell
Mr. Gamble
Mr. Shaeffer
Mr. Little
Mr. Sias
Mr. Harrison
Mr. Hall
Miss Joan Morgenthau
Mrs. Klotz
H.M.JR: How do you do?
MR. GAMBLE: Mr. Sias, Mr. Harrison, and Mr. Hall,
Mr. Secretary.
H.M.JR: Well, I thought it was satisfactory to give
out the next to last statement on the 6th War Loan to you
gentlemen. Have you had a chance to read this (indicating
attachment A)?
MR. HALL: Yes, it is very fine, indeed.
H.M.JR: That would be for, I think, Monday morning.
Sunday is a little late now.
MR. HARRISON: That is right.
H.M.JR: I didn't know whether you people wanted to
ask Mr. Bell, Ted Gamble, or myself any questions.
MR. HALL: I just wondered, Mr. Secretary, what the
E bond figure was by now.
H.M.JR: Do you mean on the record, or off the record?
MR. HARRISON: Either way.
31
-2MR. GAMBLE: Two billion, one hundred and seventy-six
million; nine million under the beam. We did not credit the
forty-one million dollars, and won't until Tuesday. Tuesday
we will go twenty-five to forty-five million over the beam.
H.M.JR: Are you releasing that?
MR. GAMBLE: No, sir, but the total is in sight now,
Paul. We can almost tell you where it is.
H.M.JR: We are confident of what we see in the works,
and I can make this kind of a statement, which is a little
unusual. We have never done this sort of thing before. I
am confident that we will make the E bonds, just as I was
onthat
the extent.
five billion individuals. So I will put my neck out
to
MR.
SIAS:
Everybody
very
good
about
the Drive.around the Treasury seems to be feeling
H.M.JR: Well, I think we have reason to be. I know
that Mr. Bell and I feel that War Bonds under Ted Gamble's
leadership have done a superb job, and having this thing
divided up in States--State chairmen, county chairmen, and
city chairmen, gives them a pride in this matter that is
perfectly amazing. They just take the ball and go with it.
Each community is very much on its toes and very conscious
of what each community is doing. With help from you newspapermen and all related avenues of communications to the
public, it has been a. hundred percent. So, all together I
think it has been wonderful teamwork as between the public
and the Government. And I think it is one of the finest
examples we have of this team-play; what can be done if we
are called upon to do it.
I think the American public will do anything that they
are asked to do properly. I don't think they will refuse to
do anything. And I think through our War Bond organization
we have found a way to ask them. They will do anything we
ask
within
and
I think they will do anything on any
other
call ifreason,
they are
asked.
32
-3MR. HALL: Is there any indication, Mr. Secretary, when
the next War Bond Drive will take place?
H.M.JR: I know that Gamble put you up to that. He has
been trying to find that out this morning.
MR. HALL: No, he hasn't.
H.M.JR: He looks as innocent as a thirty-seven year old
child.
MR. GAMBLE: I admit it.
H.M.JR: No, just for you, off the record, he was in,
and I suggested that he and Mr. Bell get together this coming
week with out statisticians. It will be somewhere between
May and June--we hope it will be June, but we don't know.
You see, the expenditure for December now look as though
they are below seven billion.
MR. BELL: No, a little above.
H.M.JR: Very close.
MR. BELL: They are as high a s we expected to go a few
days ago.
H.M.JR: I would say that we will make up our minds early
in January. It will be somewhere between May and June.
MR. HALL: The reason I asked you that, Mr. Secretary, is
because we are looking forward to covering the next trip.
H.M.JR: Fine. You did a swell job. We will push it into
June if possible, but if they need the money, we will have to
do it in May.
Now, from all accounts we hope you will all be back
doing it over again.
MR. HALL: We enjoyed it.
33
-4H.M.JR: Have you men any suggestions as to how we can
improve our public relations on war bonds?
MR. HARRISON: Mr. Secretary, I think the general form we
have worked out in this operation this time is positively
foolproof, and I think we improved it as we went along.
think that will probably happen again. Offhand, I can't
think of any specific trouble with it; possibly we didn't
get enough breaks for afternoon papers, that is about all I
I
can say!
H.M.JR: Are you U.P.?
MR. HARRISON: Yes, sir. (Laughter)
H.M.JR: I have heard the U.P. cry before.
MR. HALL: As you know, Mr. Secretary, we have been very
much satisfied with the way the thing was operated. My
boss, Mr. William K. Hutchinson, said the other day that
to him it worked out very nicely, and he said that as long
as he had been in Washington he didn't recall when a news
story had been covered that way, as completely and as
easily.
H.M.JR: That is good.
MR. GAMBLE: Lyle Wilson wrote in a similar report. It
was a unique experience to them to have had that kind of an
opportunity to serve, and they would be delighted to do
anything they could in the future to help us.
H.M.JR: That is fine.
MR. GAMBLE: In line with the thought you just expressed
about the American people doing things they are asked to do
by the Government--and I think using your plea for Christmas
buying as a springboard, the things we subsequently did-we talked this morning to New York, Washington, D. C. to
Indianapolis, Detroit, and Christmas bond buying in the banks
is very heavy, which I think is a response to some extent
to the appeal that was made.
34
-5-
H.M.JR: It is good, because it has two effects, particularly the one of buying a bond for the man overseas. I
think that is one of the nicest gestures a family can
make; it has a counter-inflationary effect.
Mr. Bell, do you want to say something?
MR. BELL: No.
H.M.JR: How do you feel about it?
MR. BELL: I feel very good. Everything has gone very
nicely.
H.M.JR: You don't want to tell them anything?
MR. BELL: No, I haven't anything to tell them. I think
everything has been told up O date.
H.M.JR: Well, it is very pleasant to have a nice little
love fest like this on Christmas Eve.
MR. HARRISON: That is what it is.
H.M.JR: I hope you all have a very happy holiday, and
again thanks to you and your wire services for what you have
done. There will be more, and I hope they put you on the
job again.
MR. HARRISON: Thank you very much, sir. A Merry Christmas,
Happy New Year, and a Happy Seventh War Loan.
A 35
WASHINGTON, DEC. 00 - Secretary of the Treasury
Henry Morgenthau, Jr., announced today that, "War Bond
sales already tabulated and reported by the Federal Reserve Bank for the Sixth War Loan total $20,360,000,000
or more than 6 billion in excess of the 14 billion dollar
quota set for the Drive.
"Reports of sales to individual investors which have
been pouring into the Treasury since the close of the Drive
now show a total of $5,010,000,000. This is 10 million
dollars in excess of the 5 billion quota for individuals,
and with another full week left in which to receive reports,
this means a substantial oversubscription from individuals.
"Based on preliminary figures now available, I am
happy to announce that the important "E" Bond quota of
2Ã billion dollars will be oversubscribed. Final figures
will not be available until January 2.
"Never before in the history of our War Loan program
have the people of America responded so enthusiastically to
the Nation's appeal," he continued. "The record which will
be established by the final figures will convince the whole
world, of our people's determination to stay in this fight
until final victory."
36
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
AA
DATE Dec. 23, 1944
TO:
FROM:
Secretary Morgenthau
S. George Little
Re: OWI handling of December 16 speech.
A further discussion with OWI reveals the following
facts. The speech was teletyped to their New York
office and then portions of it cabled to the following points: 750 words to London for distribution
throughout England; 170 words to Cairo to be fanned
out from there, and 4Q words to Paris and other
points in France.
37
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE Dec. 23, 1944
TO
FROM
Secretary Morgenthau
Mr. Shaeffer CB.
Attached is the Congressional Record of December 12,
1944, in which appears the two letters Representative Crawford
of Michigan inserted which deal with post-war Germany. Nowhere
is there direct reference to you and the so-called Morgenthau
Plan.
O'Donnell will be in his office this afternoon when I
will discuss the matter with him.
38
CONGRESSIONAL RECORD-APPENDIX
1944
The report showed that the total freight,
Canadian and American, was 9,188,408 tons,
of which 8,900,762 tons were handled by the
they are to remain forever, that I believe it will be of interest to many people to read excerpts from two letters
American locks and 287,736 tons by the Canadian lock
written by two of our American sons now
Down-bound (east-bound) freight totaled
7,528,849 short tons and up-bound (west,
many.
bound) freight totaled 1,659,559 tons
or the east-bound freight the major item
was ore, 5,188,689 tons, and the major westbound item was coal, 1,444,988 tons.
Lock reports were suspended after Pearl
Harbor for reason of military security
The lock report for November follows. given
in board feet. short tons, cords and barrela
East-bound
1,033
Passengers
44
Wood products:
Lumber
Shingles
Pulpwood
Flour
250
97,980
Wheat
Grain, other than wheat
58,631,973
25,059,746
Copper, lake
Copper, electrolytle
Zine
Iron ore:
Scrap iron
5,183,589
16,032
8,276
Manufactured Iron and steel
Stone
900
General merchandise
59,030
West-bound
Vessel passages
942
Passengers
52
Coal, soft
1,444,988
Coal, hard
Iron ore
Manufactured from and steel
Salt
Automobiles
Prior to entering the military service
as a chaplain, he was pastor of one of
our large churches, and his life thus far
has been a successful one.
October 15 and October 24, 1944, Bruce
Kelley. captain in an armored division
under General Patton, forwarded to his
family. who resides in my district, the
two memorandums here submitted.
The comments of these two young men
will serve to considerably stimulate our
thought on the present developments in
Germany and other western European
countries:
FRANCE November 20. 1944.
DEAREST MOTHER: Of course, we don't
know. but I feel very certain that this
Christmas will see us well lodged in Ger.
many we'll have a real "Weihnachtafest"
to look forward to. Things are moving
ahead with a real push now, and by the
Germany just as speedily as we went through
86,060
50
Vessel passages
1,975
Passengers
96
Freight:
East-bound
West-bound
7,528,849
1,659,559
Total freight
9,188,408
VESSEL PASSAGES
Vessel passages for December 6, from 6:00
a. m. to 8:00 P. m.
Up-bound: Sir T. Shaughnessy, G. Hind.
man, Mathewston Algoway.
Down-bound: Algocen, Laketon, Hagarty,
Westmount, Windoc R. 8. Misener, Starbuck
Vessel passages for December 7. from mid-
night to 6:00 a. m.:
sive fortifications that is hard. Since I last
wrote you we have moved our headquarters
We are now located quite near the German
border in one of their ancient towns of Lorraine. We have our office in a very fine
building which the Germans recently used
as one of their Hitler youth schools All
of their equipment was left intact here,
which gives anyone interested an apportu-
nity to study their education methods at
first hand. In the principal schoolroom
there hangs a very handsome photograph
of "der Fuhrer' himself. Would you like
me to send It to you?
The textbooks of the school were all stored
neatly away, and I had a wonderful time
going through them. (I'm glad I can read
German!) All of the stuff is thoroughly
propagandized from beginning to end
tory-the purity of the Nordica, the great
achievements of the Aryana, and the world
& really palatial residence which until recently was occupied by the director of mines
of this region- thoroughgoing Next. He
EXTENSION OF REMARKS
OF
HON. FRED L. CRAWFORD
OF MICHIGAN
IN THE HOUSE OF REPRESENTATIVES
Monday, December 11, 1944
Mr. CRAWFORD Mr. Speaker, the
people of the United States are now so
deeply and tragically involved in the
racial hatreds, internecine warfare, and
other problems of western and central
Europe, and so many of the sons from
American families are now being permanently located on German soil where
do over again all too soon
We had all our Protestants in the battalion
at one service yesterday. Seeing them all
together, about 125. was an inspiring sight,
and I tried to give them my best. Their attention was excellent.
Much love,
DICK
France. It is breaking through these defen-
destiny of the German people.
Staff officers are housed in the chateaus-
Letters From Servicemen
T doubt If the leaders themselves. including
we get going again that we'll go through
Great emphasis is put on German rectal his-
Up-bound: None.
Down-bound: Lethbridge, W. M. Schupp.
tional pitch where they would sacrifice
Hitler, take It too seriously. It was simply
a talking point to sell their case to the world.
The real reason Germany risked this war
are in the charts, the graphs, and the texts
on world economics These are highly intellectual, but her method of putting over
the war to her own people has been chiefly
emotional and what a beautiful job she
has done of it. These books issued to the
children are not printed on cheap paper, as
English books are. They are ultra de luxe
illustrated with photography which ranks
with the best that Americans are capable
of producing Everything these Germans do
is so deucedly well done. They are the
ablest people in Europe unquestionably
If only they were not so wrong-headed
What to do with them after the war is tremendous problem. In my OWD thinking I've
come to the conclusion that we must be
very severe. I think the Nazi virus has so
deeply corrupted their whole system, that
we shall have to be pitiless in the penalty
to be inflicted on them. Half-measures this
time win mean we'll have the whole job to
standing families of this Nation. He
1,546
12,439
29,432
70,109
about racial purity, the supremacy of German stock. and the glory of dying for the
fatherland, I am convinced. is simply used
to work up their own people to the emo-
grew up under the Instruction of a very
devoted and devout Christian father and
mother. and he graduated from some of
the leading American and British univer-
time this reaches you I think some startling
progress will be made. I prophesy that when
Stone
the rest of the world was decadent It was
a gamble- and worth trying All this talk
everything they had in a try at another war
34,900
Petroleum products
General merchandise
Dick is a boy I have known for many
own military prowess and she believed that
years. He is a member of one of the out-
sities.
according to commodity
Vessel passages
serving in our military forces in Ger-
A5055
lived in grand style; his house is magnin.
cently furnished, and he has a very fine personal library of about 800 books all in Ger-
GREMANY, October 15. 194
Glad to hear that you got my Purple
and liked It. I won't get any more
kind of awards, so don't worry.
Have had some real good Germa
and Jam and Jelly lately. I'm gind
fighting on German soil now. It was
sad to have to destroy towns in other 4
tries but here- have very little pity
people who made this possible by welcoming
and applauding a leader like Hitler. No mat.
ter how much these people may deny being
Nazia, they are to blame. Their houses are
full of evidence of plenty of pro-Dazi-ism-
Hitler youth organizations, etc. Nearly all
houses are full of religious pictures crucifixes, Madonnas Christ, etc. do you can discount what you've heard of the Germans
abandoning the Christian religion. They
seem to be deeply religious. There are many
more religious pictures, Bibles, and prayer
books than you would find even in American
homes
Also I've been very much surprised at con-
ditions, The French were not badly off at
all-certainly not starving- and for the most
part not treated so horribly by the Germans.
Belgians have a rich country good stock,
good land. The Dutch look very prosperous,
and these Germans seem to have everything.
man, and a good deal of it Neal literature,
geopolitics, and all that sort of thing. Huge
and learned works on geography and economics to prove that England was getting
the lion's share of world markets and that
unless this condition was halted Germany's
opportunities for growth and development
would be nil. This, I am convinced, to the
I hope these people will be glad to be free
have their own governments, and be assured
another world war. She had calculated in
cold-blooded mathematical fashion that un-
our saying anything about what France shall
reason that Germany staked her all in
less world geography could be changed radi-
No: Europe does not give the impression of
being a starved, tortured, ragged bunch of
people.
of a future of peace. but I do hope that we'll
never again come half across the world to mix
up in other peoples' affairs.
When this is over the French will resent
do: the British will minimize our contributions especially financial and will want to
cally, shifting from Britain's favor to her
own, that she would drop down to a posttion of third or fourth rate importance here
have the big voice at the peace table, and she
in Europe. She had great confidence in her
thing.
will probably have It. It will take real diplomacy and far-sighted wisdom to settle this
38
CONGRESSIONAL RECORD-APPENDIX
A5056
I do not like to hear about some of these
politicians at home talking about how we will
have to split Germany up into small agricul-
tural states, take away her industries, etc.
That talk will only make ber fight harder
and longer. and Lord knows It's bitter enough
For that reason I desire to present a
letter written December 6, 1944, to the
President by Mr. Millard W. Rice, the
national service director of the Disabled
American Veterans. It is as follows:
now. Why don't these politicos with the
DISABLED AMERICAN VETERANS,
NATIONAL SERVICE DEPARTMENT
smart ideas keep their traps shut and just let
Germany guess what her fate will be. Better
to Jet her think that she'll get off easy and
then give her the works after she's laid her
guns down. I'm not making a plea for Germany. but I am angry about some loud people at home who think the war is over and
all we have to do is to decide what we'll do
to the Germans.
Let me say that I don't think Germany
can last long. I'm not pessimistic, but the
fighting is still bitter, and I don't want to
give the "master race" any more incentive to
fight than they already have
OCTOBER 24, 1944.
Two weeks from today you should have a
pretty good Idea of who will be in the White
Washington, December 1944.
The
PRESIDENT.
The White House, Washington, D.C.
MY DEAR Mn. PRESIDENT: H. R. 1744, which
would extend pensions to dependent widows
and children of deceased 90-day veterans of
World War No. 1 who, at time of death, were
not suffering from any service-connected dis.
abilities, on the same basis as heretofore
provided for the dependent widows and chil.
dren of deceased World War No. 1 veterans
who, at time of death. were suffering with
service-connected disabilities now before you,
deserves your careful consideration before its
approval, for the following reasons:
1. It would, for the first time, provide a
service pension system, for the dependent
House for the next 4 years. Whoever it is,
I do not envy him. There will be a great
many problems confronting the next Presi-
widows and children of 90-day deceased veterans of World War No. 1 who never had any
service-connected disabilities whatsoever, at
require real statesmanship, courage, and
wisdom to direct our United States through
the war. through the peacemaking period,
and through the post-war period. It is my
idea that Dewey would prove very sound,
and I would like to see him in office
On election eve I shall be able to picture
tions as heretofore provided for the depend-
dent- peace, domestic. It is going to
you all, hovered over the radio as the returns
come in. Well do I recall last election eve.
I was with Janet listening to the returns.
Don't know what I'll be doing this election
eve. but I know it will be quite different
from the last. If 4 years ago someone had
told me that T would cast my next ballot in
Germany, I would have told them they were
azy.
The war seems to be going well. Naturally,
11 like to see It move rapidly, but there
und to be periods which go slower for
son or another. So many factors have
considered, supply. weather, consoli-
of gains already made, changes in
y dispositions, etc. The landings in the
lippines are very impressing and encouraging When you stop to think of the
large areas in which this war has been fought
I think we can be quite content about our
progress. We have steadily grown in
strength, and, though It has been a long
process. our strength has been pretty well
distributed and effectively applied.
Views of Disabled American Veterans
EXTENSION OF REMARKS
OF
HON. CLINTON P. ANDERSON
OF NEW MEXICO
IN THE HOUSE OF REPRESENTATIVES
Tuesday, December 12, 1944
Mr. ANDERSON of New Mexico. Mr.
Speaker, there is before the President of
the United States, H. R. 1744, to extend
pensions to dependent widows and children of deceased 90-day veterans of World
War No. 1.
In connection with that legislation, the
Disabled American Veterans have certain
pronounced views. There are a great
many disabled veterans in the State
which I represent and I feel that they
are entitled to an opportunity to state
their case.
the same rates and under the same condi-
ents of such veterans as, at time of death,
were suffering with service-connected disa-
bilities.
2. It would extend pensions to dependents
of deceased 90-day veterans of World War
No. 1 who never had any service-connected
disabilities, in response to the pressure of
numbers-without any comparative considerations by congressional committees or the
two Houses of Congress, as to the various
factors involved- while at the same time
proposed legislation to correct and liberalize
existing inadequacies, inequities, and inequalities as to benefits for war service disabled veterans and their dependents, and
the dependents of our war dead, remains
sidetracked, including, among others, the
following objectives:
(1) To provide dependency allowances, on
a cost-of-living basis, for all service-connected disabled veterans (H. R. 4280).
(2) To require the Veterans Administration to underwrite all State workmen's com-
pensation costs as to service-connected disabled veteran employees (H. R. 2950).
(3) To increase the basic monthly allowance payable to service-handicapped veter-
ans of World War No. a while undergoing
vocational training to the same amount as
payable for total disability, for which there
is an urgent need now (H. 5516).
(4) To provide death compensation, or a
cost-of-living basis, for the widows and chil-
DECEMBER 12
ents, and the dependents of our war dead,
such as those above indicated, and others,
should be regarded as a primary obligation
of the Nation and ought, therefore, to be
among the first legislative bills concerning
veterans and/or their dependents to be
enacted into law. During the last year,
however, such proposed justifiable legisia.
tion, based on service-incurred disabilities,
has been ahunted aside in Congress to give
right-of-way to proposed legislation to pro-
vide benefits to able-bodied veterans and
the non-service-disabled veterans and their
dependents.
Because of the recent sudden change by
the Veterans' Administration and the Bureau of the Budget from expressed opposition to service pensions for veterans or for
their dependents to endorsement of H. R.
1744, and because of the speedy action which
followed in the two Houses of Congress con-
corning these potentially expensive service
pensions, there was practically no opportunity to present these viewpoints before congressional committees, d-before officials of
the Veterans' Administration.
Incidentally, your approval of H. R. 1744
would inevitably invite the subsequent enactment of other more liberal and costly
service pension legislation. Therefore, we
could not permit the silence of the D.A.V.
as the only congressionally chartered organ-
igation composed exclusively of America's
disabled defenders- to give rise to any false
assumption that service disabled veterans
and their dependents have already been ade-
quately provided for. Matters of first im.
portance ought to be the first to be taken
care of.
Without expressing any opposition to the
proposal of providing service pensions to
veterans, or to the dependents of veterans,
not based on any service incurred disabilities-as to which we have no convention
mandate we take this opportunity to emphasize that this proposed legislation to
grant the same benefits to dependents of
the nonservice disabled as to dependents
of the service disabled, would be a grave
departure from precedent, as well as the
previous statements of policy enunciated by
you, by the Bureau of the Budget, and by
the Veterans' Administration.
May we look forward to early favorable
consideration and action to provide ade.
quate, highly justifiable, badly needed, libcralizing legislation on behalf of our service
disabled veterans and their dependents, and
the dependents of our war dead, notwith.
standing your approval or disapproval of
H. R. 1744?
Respectfully yours,
MILLARD W. RICE
dren, and dependent parents, of deceased war
veterans who shall have died while in serv.
Ice or subsequently by reason of serviceincurred disabilities (H. R. 841).
(5) To provide more adequate pensions,
on a cost-of-living basis, for the dependent
widows and children of deceased war veterans
of World War No. I and World War No. 2
who, at time of death, were suffering from
service-connected disabilities (H. 915).
(6) To provide full compensation for single
veterans while hospitalized (H. R. 979)
(7) To provide minimum 10-percent ratings for wounded or gassed veterans (H. R.
738).
(8) To provide increased compensation for
service-connected disabilities on the basis of
increased ages-long ago provided as to the
service pensions granted to veterans of wars
prior to World War No. 1 (H. R. 754).
(9) To restore full compensation for the
so-called presumptives (H. R. 797).
Paraphrasing your own oft-repeated em-
Field Marshal Sir John Dill
EXTENSION OF REMARKS
OF
HON. SOL BLOOM
OF NEW YORK
IN THE HOUSE OF REPRESENTATIVES
Tuesday, December 12, 1944
Mr. BLOOM. Mr. Speaker, the learned
gentleman has given the membership of
this House an accomplished picture of
the great service which Field Marshal Sir
John Dill has given to his own country
and to the United States during our time
believes that highly justifiable, badly needed,
of common peril. I have listened with
closest attention, because I share the
gentleman's high admiration for the
service disabled veterans and their depend-
great field marshal. I should like to take
phasis as to first things first, the D. A. v.
liberalizing legislation on behalf of our war
39
Times
s Herald 12/19
WASHINGTON. D. C.
TUESDAY.
CAPITOL STUFF
By JOHN O'DONNELL
N THE last fortnight an amazing change has come
over this world- war Capital of the world,
Gone are all the cheerful Presidential campaign
certainties
an easy walk that we were winning the war in Europe in
Vanished is the happy picture that the world diplomatic set-up
is
allhappy
hunky-dory because F.D.R. Winnie and Pal Joey are just
one
trinity
who
understood
another.
one
Gone
too
is
the
notion they have tossed off so much caviar and vodka together at
Teheran while planning how to make the world wag. that it would
be a trick to amash the winning combination by breaking
friendship
Americanbeautiful
New
Dealer.
of British Tory, Russian Commy and
now, to speak sooth everything has gone to hell on the
world front. The Dumbarton Oaks anointed
eam.
the dead
pompduck
and ceremony of a Broadway press agent's
And is the New Deal proposition that the Senate of the
United States kiss good-by to the ancient doctrine of the Republic
that a bargain with foreign nation is important enough to re
quire the okay of two-thirds of the Members of the Senate
A A matter of cold fact, this Christmas season is the grimmest
and most discouraging that the American people have faced
since the Japs. back in December 1941, made the over-all military
diplomatic strategy of Commander in Chief Franklin D. Roose
velt look ridiculous by cashing in on the greatest military crime in
history (responsibility, Washington, C.). and so achieving their
mighty victory at Pearl Harbor.
The shock that came last week to the American people by the
discovery (thanks to the forthright Churchill) that we don't see
eye to eye with our beloved Allies the British and Russians on
the diplomatic front in Europe wouldn't have been so bad if
hadn't been covered up the White House during the Presidential
campaign.
THE same applies to the situation of our armies on the Euro
pean front.
And responsible officers from the Facific are now returning to
say privately that expect at least four years more of war
to lick the Japs- the pessimists here are saying It may take ten.
None of this was heard before last November 7.
One of the encouraging facts (because It shows we can take the
truth) is that now hearing very blunt observations
from the American fighting men in Europe whose curses, loud as
well deep, are coming through from the fighting
front
their this side.
The Congressional Record some lively reading Mem
bers of Congress are to the heart-felt views of the boys on
the battlefields along the Rhine. They have rough but very
sound and practical idea that come peace the returned veterans
are going to run the political show in this nation and hence the
healthy respect
HARSH and brutal are the messages from the front which place
directly on the doorstep of Secretary of the Treasury Henry
Morgenthau Jr. personal responsibility for increasing the number of American casualties.
This bitter charge Is based on the belief by GI's that Mor
genthan's personal plan to punish defeated Germany played
directly into the hands of Dr. Goebbels and so transformed Ger-
mans willing to into fanatic warriers eager to die to
defend the "Holy Land" of Germany from the postwar proposals
of arch enemy Morgenthau.
MICHIGAN'S Representative Fred L Crawford put some letters
in the Record last week, one from a chaplain "graduated,
said Crawford. from "our American and British univer-
sities."
the other from Capt Bruce Kelley in Patton's armored division.
are Crawford's
cerpts Both
are interesting
district Some of the ex.
The tank captain in Patton's outfit writes:
"I not like to hear these politicians at home
talking Germany
up into
pieces,
Industries
etc.small
harder
knows
and
longer
these
and
Lerd
with
Ideas
let Germany get what
her smarthome
fatewho
will
lousy people
at
is decide what we will
the
do
ON THE question that are the enemies of-Christian
Catholic, the Congressman's
chaplain
reports
from
scene
in occupied
writes:
"Nearly
Madonnas
the actual
all houses are of religious pictures Cruelfixes,
about ists, discount what you've heard
C
to be deeply
the Ger
nans the
They seem
religious.
ThereChristian religion
more
pictures.
religio
Bibles homes and prayerbooks than find in American
"Also I've been The French
part
badly
off
and
for the most
not treated
horribly
by the
Germans
country-with stock. woodland Belgians have a rich
were
and these The Dutch look very prosperous
Germans seem to have everything No! Europe does
give the impression of being a starved, tertured. ragged bunch not of
people.
It
40
PM, FRIDAY, DECEMBE
GIs' Letters Butchered
To Plug for Soft Peace
'Daily News'
Writer Fits Phrases to
Own Ideas
O'Donnell quotes several passages
that read like an eloquent apologia
for the Nazis:
"Nearly all (German) houses are
etc.-so can
By ELIZABETH DONAHUE
full Madonnas, of religious Christs, pictures-crucifixes, you
WASHINGTON, Dec. 22.-John
O'Donnell, New York Daily News
columnist has used distorted excerpts from two letters from overseas in an apparent effort to plug
for a soft peace for Germany.
O'Donnell's sources are letters
inserted in the Congressional Rec-
the Germans abandoning the Christian religion.
PM's Bureau
ord by Rep. Fred Crawford (R.,
Mich.)
The letters- one from a chaplain
and one from a soldier in Gen.
Patton's armored division-were addressed to their families.
Patton's tank captain, O'Donnell
points out, wrote:
"I do not like to hear about some
of these politicians at home talk-
ing about how we will have to
split Germany up into small pieces.
that talk will only make her
fight harder and longer and Lord
knows it's bitter enough now
Why don't these politicos with
smart ideas keep their trap shut
and just let Germany guess what
her fate will be
Whiplash Left Out
O'Donnell's version of the story
ends there. But the tank captain
added, according to the full text of
the letter published in the Record:
"Better to let her (Germany)
think that she'll get off easy and
then give her the works after she's
laid down her guns."
The author of the same letter
wrote: "No matter how much these
people may deny being Nazis, they
are to blame.
O'Donnell, disregarding large
portions of the letters, makes this
comment:
Harsh and brutal are the messages from the front which place
directly on the doorstep of Secreincreastary personal of the responsibility Treasury Morgenthau
for
ing the number of casualties."
discount what you've heard about
'Nazis Have Everything
"The Dutch look prosperous. The
French were not badly off at all.
Belgians have a rich country
and these Germans seem to have
everything.
While quoting this pretty picture
of life under Nazism, O'Donnell ignored the same writer's preceding
remarks which damned the Nazis
and all their works:
"I'm glad we're fighting on German soil now. It was pretty and to
have to destroy towns in other coun-
tries, but here have very little
pity for people who made this possible by welcoming and applauding
leader like Hitler.
"No matter how much these people may deny being Nazis, they are
to blame. Their houses are full of
evidence of plenty of pro-NazismHitler youth organizations, etc.
O'Donnell omitted all that.
Another of the correspondents
upon whom O'Donnell relied for
his first-hand knowledge of the soft-
hearted attitude of troops toward
the Nazis, declared emphatically
that "the Germans are the ablest
people in Europe if only they were
not so wrong-headed. Half-measures this time mean we will have
to do the whole job all over again.
O'Donnell omitted all that,
Treasury Department
41.
Division of Monetary Research
Date December 23 1944
To:
Secretary Morgenthau
You will be interested to learn
that the Farm Bureau Federation has
come out in favor of the Bretton Woods
proposal.
H.D.W.
MR. WHITE
Branch 2058 - Room 214-1/2
Treasury Department
Division of Monetary Research
Date
42
December 16, 1944 19
To:
Mr. White
From:
E. M. Bernstein Emb
The Farm Bureau Federation has come out
for the Bretton Woods program. I heard of this,
now reported in the Times, at Chicago. Some of
the economists of the Federal Reserve Bank of
Chicago were called in on this point.
PEACE TALKS HAILED
BY FARM FEDERATION
tween groups in our country, to
the end that maximum employ-
ment and production may be
achieved throughout the world."
Special to THE New YORK TIME
The group further urged "the
CHICAGO, Dec. -Approval of adoption and maintenance of ecoUnited States cooperation in world
nomic policies and relationships
affairs as outlined at the Dumbarton Oaks conference and Bretton
Woods and through the proposed
international food and agriculture
organization was voted in resolu-
tions today by delegates to the
convention of the American Farm
Bureau Federation.
While stressing the need for economic stability on a domestic basis.
also
barriers the federation's "that be foreign gradually resolutions and adjusted domestic urged
or
removed so as to facilitate the
maximum exchange of goods and
services between nations and be-
necessary to assure a fair exchange
value for the products of industry
and agriculture and the maintenance of continuous and substan-
titl wages for labor in line with
such a balanced price level."
Retention of the Agricultural
Adjustment Act was insisted upon,
along with price stabilization for
basic commodities and price supports for non-basic commodities
under the Steagall Act. Parity
prices in the marketplace were
urged, while subsidies in lieu of
fair prices were scored.
Other resolutions opposed com-
pulsory military training. but fa.
vored the training as part of the
42
educational system; favored coverage of farm labor by old-age and
survivors' insurance under the Sodal Security Act; emphasized the
need for freedom of speech, press
and the radio, and urged a program opening opportunities for
war veterans in farming com-
munities.
43
DEC 23 1944
My dear Mr. Secretarys
I know that you will be pleased to learn that we
have successfully terminated the rather difficult and
arduous negotiations with Dr. Kung with respect to
U. S. Army yuan obligations in China. In this connection I would like to tell you that Mr. John Carter
Vincent was most helpful to me.
In our settlement with Dr. Kung we agreed to the
payment of $21.0 million in settlement of all U.S. Army
obligations incurred up to September 50, 1944. We also
agreed to have quarterly adjustments and settlements
with regard to yuan obligations of the U. S. Army inour
red after September 30, 1944. I - now taking the
necessary steps to obtain the information needed to
the renewal of the negotiations in the near future for
settlement of obligations incurred during the next
quarter of 1944.
I am forwarding for your files copies of exchange
of letters between Dr. Kung and myself covering this
agreement.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
The Henorable
The Secretary of State
Enclosures
ISF/efs 12/22/44
THE SECRETARY OF THE TREASURY
WASHINGTON
November 25, 1944
Dear Dr. Kung:
I am informing the War Department that we have success-
fully terminated the negotiations with respect to U. S.
Army yuan obligations in China. The terms of the settlement
of theseare
negotiations
this morning
as follows:as agreed upon at our conference
1. The war Department shall transfer to the account of
the National Government of China or the account of
such agency of the National Government of China as
the National Government of China designates a sum
of One Hundred and Eighty-five million U. S. dollars
(US$185 million), in addition to the Twenty-five
dollars (US$25 million) transa total of Two Hundred million
U. million ferred, S. dollars making U. S. (US$210 and already Ten
million) in settlement of all
1944. U. S. Army obligations incurred up to September 30,
2. This settlement does not include the yuan expended by
the Government of the Republic of China for board and
lodging of American armed forces in China. This sum
will be credited to the National Government of China
as reciprocal aid under Article VI of the Mutual Aid
Agreement of June 2, 1942 at the request of the
National Government of China.
3. As stated in paragraph 1 above, this settlement
liquidates all our obligations for U. S. Army expendiup to September 30, 1944
exceptionparagraph
tures
in2 China
of (with the
above) with the understanding
that as the appended minutes of conversati ons at
Bretton Woods on July 16, 1944 and in Washington on
November 25, 1944 indicate this settlement is without
BUY
-2prejudice to the Chinese cont ntion that the cost of
the Chengtu airfields is not included in the amounts
referred to in paragraph 1 but should be treated as
an item of reciprocal aid under Article VI of the
Mutual Aid Agreement of June 2, 1942.
I wish to take this opportunity to say how much I
appreciate the cooperative attitude you have invariably
displayed in your dealings with the U. S. Treasury and
the contribution you have thereby made to the further
cementing of the friendly relations between our two
countries.
Sincerely yours,
Secretary of the Treasury.
Dr. H. H. Kung,
Minister of Finance,
National Government of China,
Washington, D. C.
Excerpt From Minute of Conversation at Bretton Woods on July 16, 1944:
"General Clay: Well, Doctor, going back to what we have been
discussing, and this view which you have just stated, if we paid
you a gross of one hundred and twenty-five million now - a lump
sum of a hundred million with twenty-five million having been
paid - that would leave remaining the food and lodging and the four
billion dollars would be presented by you as a claim under Reverse
Lend-Lease. It would have no effect on the twenty million dollars
for the next three months, which would be paid in cash, and for
which you would provide us with the yuan that we need and would
not prejudice that arrangement in any way; that we would pay you
the lump sum of a hundred million dollars immediately, and in any
Reverse lend-lease agreement to be effected, you could, in addition
to the food and lodging which you would put forward as a claim,
include also this four billion dollars.
"Dr. Kung: I wish I could do it, you know.
"H.M.Jr.: Excuse me. May I add one thing that we talked about,
that in admitting this Chengtu four billion dollars, the claim, we
in no way prejudice or go back on the cable of the President which
we interpret was all inclusive. I would like to make that clear.
I mean, we claim that this telegram of the President's meant
twenty-five million a month, and included the construction of
everything.
Now, what we are saying in view of what you have said - but not
in any way going back on that - we still hold to this cable. But
if you wish to put that claim under Reverse Lend-Lease for four
billion dollars, we would raise no objection. Do you mind my
making that suggestion?
"General Clay: That is right, sir. And we would do it in
the interest of harmonious relations and appreciation of the COoperation which you have given to us.
Excerpt from Minute of Conversation in
Secretary Morgenthau's office, Treasury Department
November 25, 1944
Secretary Morgenthau: Now let me see if I understand it
correctly. You will accept how many U.S. dollars for how
many months in payment, so we get that clear?
Dr. Kung: To the end of September, October first, 185
million.
Secretary Morgenthau: That you will take $185 million
until October first. And that is in full payment with the
understanding with respect to the claim. Is that right?
Dr. Kung: Yes.
Mr. Chi: In addition to that the claim for the Chengtu
air fields can be put in.
Mr. White: I want to make certain, Mr. Secretary, that
you and Dr. Kung are in agreement. I presume that you are
both using the word claim in the sense which we use it in
the United States, namely, that the Chinese Government could
advance the cost of the Chengtu air fields as a claim in
mutual aid on the basis that such cost had not been included
in the figures submitted to us by the Army. Whether that
claim will be recognized or not is. a matter to be determined
by subsequent examination of the data. In other words, the
word "claim" does not mean a charge but rather the right to
claim that a charge should be made for credit to reciprocal
aid.
Secretary Morgenthau: To go a step further so that
there can be no misunderstanding - when we pay over this
$185 million we will state that that is in full payment
for all obligations incurred by the United States Army
from the first of March to the first of October.
Mr. Pei: I beg your pardon, Mr. Secretary. With the
understanding that the Chinese Government will put in a
claim.
Secretary Morgenthaus May put in a claim
That
if subsequently additional information comes to light,
furnished either by our Army or the Chinese Government, the
Chinese Government may submit a claim as reciprocal aid.
MINISTRY OF FINANCE
NATIONAL GOVERNMENT OF CHINA
November 25, 1944.
Honorable Henry Morgenthau, Jr.
Secretary of The Treasury
Washington, D.C.
Dear Mr. Secretary:
I am in receipt of your letter of November 25, 1944 in which you stated
that you were informing the War Department of the successful termination of the
negotiations with respect to U.S. Army Yuan obligations in China on these terms:
"1. The War Department shall transfer to the account of the National
Government of China or the account of such agency of the National Government of China as the National Government of China designates a sun of One
Hundred and Eighty-five million U.S. dollars (U.S.$18 million), in addition to the Twenty-five million U.S. dollars (U.S.825 million) already
transferred, making a total of Two Hundred and Ten Million U.S. dollars
(U.S.$210 million), in settlement of all U.S. Army obligations incurred
up to September 30, 1944.
"2. This settlement does not include the yuan expended by the Government of the Republic of China for board and lodging of American armed forces
in China. This sum will be credited to the National Government of China as
reciprocal aid under Article VI of the Mutual Aid Agreement of June 2, 1942
at the request of the National Government of China.
"3. As stated in paragraph 1 above, this settlement liquidates all our
obligations for U.S. Army expenditures in China up to September 30, 1944
(with the exception of paragraph 2 above), with the understanding that as
the appended minutes of conversations at Bretton Woods on July 16, 1944
and in Washington on November 25, 1944 indicate this settlement is without
prejudice to the Chinese contention that the cost of the Chengtu airfields
is not included in the amounts referred to in paragraph 1 but should be
treated as an item of reciprocal aid under Article VI of the Mutual Aid
Agreement of June 2, 1942."
On behalf of the National Government of China I wish to confirm this
settlement as set forth in paragraphs 1, 2 and 3 and also to take note of the
appended minutes of conversation.
the
In making this settlement I wish to state that my Government agrees to
above terms in the interest of Chinese-American cooperation and in order to
clear the way for closer collaboration in strengthing the war effort against our
common enemy. Furthermore, I wish to express my deep appreciation for the unending
sympathy and painstaking effort which you have taken throughout the negotiation.
Yours sincerely,
H. Kung
Minister of Finance
MINISTRY OF FINANCE
NATIONAL GOVERNMENT OF CHINA
Excerpt From Minute of Conversation at Bretton Woods on July 16, 1944:
"General Clay: Well, Doctor, going back to what we have been discussing, and
this view which you have just stated, if we paid you a ross of one hundred and
twenty-five million now - A lump sum of a hundred million with twenty-five million
having been paid - that would leave remaining the food and lodging and the four
billion dollars would be presented by you as a claim under Reverse Lend-Lease.
It would have no effect on the twenty million dollars for the next three months,
which would be paid in cash, and for which you would provide us with the yuan
that we need and would not prejudice that arrangement in any way; that we would
pay you the lump 311m of a hundred million dollars immediately, and in any Reverse
lend-lease agreement to be effected, you could, in addition to the food and
lodging which you would put forward as a claim, include also this four billion
dollars.
"Dr. Kung: I wish I could do it, you know.
"H.M .Jr.: Excuse me. May I add one thing that we talked about, that in
admitting this Chengtu four billion dollars, the claim, we in no way prejudice
or go back on the cable of the President, which we interpret was all inclusive.
I would like to make that clear.
I mean, we claim that this telegram of the President's meant twenty-five
million a month, and included the construction of everything.
Now, what we are saying in view of what you have said - but not in any way
going back on that - we still hold to this cable. But if you wish to put that
claim under Reverse Lend-Lease for four billion dollars, we would raise no
objection. Do you mind my making that suggestion?
"General Clay: that is right, sir. And we would do it in the interest
of harmonious relations and appreciation of the cooperation which you have
given to us."
MINISTRY OF FINANCE
NATIONAL GOVERNMENT OF CHINA
Excerpt from Minute of Conversation in Secretary Morganthau's
office, Treasury Department November 25, 1944.
"Secretary Morgenthau: Now let me see if I understand it correctly. You
will accept how many U.S. dollars for how many months in payment, so we get
that clear?
"Dr. Kung: To the end of September, October first, 185 million.
"Secretary Morgenthau: That you will take $185 million until October first.
And that is in full payment with the understanding with respect to the claim.
Is that right?
"Dr. Kung: Yes.
"Mr. Chi: In addition to that the claim for the Chengtu airfields can be
put in.
"Mr. White: I want to make certain, Mr. Secretary, that you and Dr. Kung
are in agreement. I pressume that you are both using the word claim in the
sense which we use it in the United States, namely, that the Chinese Government
could advance the cost of the Chengtu airfields as a claim in nutual aid on the
basis that such cost had not been included in the figures submitted to us by the
Army. Whether that claim will be recognized or not is a matter to be determined
by subsequent examination of the data. In other words, the word "claim" does
not mean a charge but rather the right to claim that a charge should be made for
credit to reciprocal aid.
"Secretary Morgenthau: To go a step further so that there can be no misunder-
standing - when we pay over this 3185 million we will state that that is in full
payment for all obligations incurred by the United States Army from the first of
March to the first of October.
"Mr. Pei: I beg your pardon, Mr. Secretary. with the understanding that the
Chinese Government will put in a claim.
Secretary Morgenthau: May put in a claim That if subsequently additional
information comes to light, furnished either by our Army or the Chineae Government,
the hinese Government may submit a claim as reciprocal aid."
/
DEPARTMENT
OF
STATE
OUTGOING
December 23, 1944
This telegree must be
paraphrased
being
is
6 p.m.
one
other than & Government
Agency. (SECRET-0)
ALSMBASSY,
CHUROKING.
1944
CONFIDENTIAL
DEC
text For security reasons
be of this message
1695
closely guarded.
FOR ADLER FROM TREASURY
With reference
26
U
DEPARTMENT:
AM
4
estimates disposal of surplus
you maky have to go to Delhi in near future. Further
instructions will be sent you later.
STETTI NIUM
(GL)
FMA&E00:ja
OF
=
of Indian supers discussed here, it is likely that
12/23/44
51
COMMUNICATIONS
AND RECORDS
TELEGRAM
DGS
communicated
DIVISION OF
OF STATE
52
December 23, 1944
Dear Ed:
I would appreciate it if you would send the
following telegram for me to Ambassador Caffery:
"Saxon has just returned from Paris, and
informs me that you have given the Treasury
hearty support in the work which we are carry-
ing on at the present time in France. I
would like to thank you, and wish you a
Merry Christmas and a Happy New Year."
Sincerely yours,
(Signed) H. Morgenthau, Jr.
The Honorable Edward R. Stettinius, Jr.,
Secretary of State,
Washington, D.C.
DEPARTMENT
DIVISION OF
OUTGOING
OF
TELEGRAM
STATE
DIVISION OF
TE
COMMUNICATIONS
AND RECORDS
Treas
1944 DEC 26 AM III 43
ecutary's
DECEMBER 23, 1944
MAM
This telegram must be
paraphrased before being ATIONS p.m.
communicated to anyoneRECORDS
other than a GovernmentSON)
Agency. (RESTRICTED)
AMEMBASSY
PARIS
833
FOR AMBASSADOR CAFFERY FROM SECRETARY MORGENTHAU
Saxon has just returned from Paris, and informs
ME that you have given the Treasury hearty support
in the work which WE are carrying on at the present
time in France. I would like to thank you, and
wish you a Merry Christmas and a Happy NEW Year.
STETTINIUS
(PTC)
WE PTC MDM
12/23/44
53
office
54
MF-1547
This telegram must be
paraphrased before being
Sofia
communicated to anyone
other than a Government
Agency. (RESTRICTED)
Dated December 23, 1944
Rec'd 5:58 p.m., 27th
Secretary of State
Washington
32, December 23, noon.
Have now been informed by Palestine office here
that all refugees detained at Starasagora and Kasedanlik
have been cleared by Russian authorities for onward
passage to Tubkey. (Reference your telegram No. 4,
November 20, 9 p.m. to Caserta). Please inform Department for War Refugee Board.
Sent to Ankara, repeated to Caserta as No. 32.
BARNES
JM
55
THE FOREIGN SERVICE
OF THE
UNITED STATES OF AMERICA
CONFIDENTIAL
AMERICAN EMBASSY
Quito, December 23, 1944
No. 2524
Subject: Assistance to Refugees from Enemy Persecution
The Honorable
The Secretary of State,
Washington.
Sir:
Referring to the Department's airgram No. 514 of
November 8 last regarding the special immigration procedure that had been adopted by the United States
Government in favor of persons in enemy=controlled
territory, I have the honor to enclose a translation
of a note from the Minister for Foreign Affairs, dated
December 20, 1944, replying to a note which the Enbassy
had addressed to the Foreign Office on November 22,
1944 in pursuance to the Department's airgram under
reference.
It will be noted that the Foreign Office communica
tion states that existing legislation does not permit
the granting of special assistance to holders of ex-
pired Ecuadoran visas and that it is necessary under
Ecuadoran law that such individuals apply for new visas
in the same manner as originally.
Respectfully yours,
Enclosure:
Translation as stated.
Copy to Consulate General, Guayaquil
File No. 840.1
JWGsmjp
56
(TRANSLATION)
REPUBLIC OF ECUADOR
CONFIDENTIAL
Ministry of Foreign Affairs
101-DDP-33
Quito, December 20, 1944
Mr. Ambassador:
I have the honor to acknowledge the receipt of your
esteened note No. 460, of the 22nd of last month, in which,
with reference to the conversation which Your Excellency
and Mr. Jacob Landan of the Executive Committee of the
American Jewish Committee of New York had with His Excel.
lency, the President of the Republic, the Minister of
Government and the undersigned, on the 27th and 28th of
September concerning the granting by the Government of
Ecundor of immigration visas to a number of European
refugees, you were good enough to inform - that you had
received information from the Department of State that
referred to the measures taken by the United States Govern
ment for the benefit of certain persons in enemy=controlled
territory.
2. Your Excellency adds that the Government of the United
States of America has adopted a special procedure with
relation to the said persons and that this system has been
made known to the Swiss Government by meens of instructions
sent to the American Legation in Berne.
3. I have read with interest the procedure which the
United States has adopted regarding this subject, as well
as the summary of the instructions sent by your Government
to the United States diplomatic mission in Switzerland.
4. Your Excellency took occasion to inform me of the
desire of the Government of the United States that Ecuador
adopt similar measures which might be extended to other
categories of persons or to a definite number of victims
of the enemy, taking into account the fact that in areas
dominated by the enemy there is a possibility that there
are a small number of individuals with expired Ecuadoran
visas and that these persons are subject to the persecution of the aggressor nations.
5. In reply, I beg to inform Your Excellency that the
position maintained by this Foreign Office in the matter
is that the persons who possess visas which have expired
are in a situation similar to that which governs the
obtaining of these documentsfifortthefirst'time
57
-2 6. Consequently, bearers of holders of authentic Ecuadoran
visas which have expired, desiring to enter Ecundor, must
comply with the legal regulations which govern the issuance
of visas and which the Foreign Office is not able to fail
to observe strictly.
7. By virtue of the above, the Government of Ecuador
regrets that it is not able to take measures similar to
those adopted by the United States of America, for any
other position would be absolutely contrary to the clear
and precise rules of the existing legislation.
I avail myself of the opportunity to renew to Your
Excellency the assurances of my highest and most distinguished consideration.
(Signed) C. Ponce Enriques
His Excellency
Mr. Robert McGregor Scotten,
Ambassador Extraordinary and Plenipotentiary of the
United States of America.
TR:JWGsmjp
4-63
9:30 AN
Dec. 23, 1944
SENT BY SECRET AIRGRAM
AMLEGATION
BERN
The following for McClelland is WRB 337.
With reference to situation in Slevakia, the following information was
received from Vatican City:
QUOTE Vatican under date of December 16 transmits report
OR subject dated December 5 from Slovak Government of which
following is substance:
The German military authorities began deporting from
Slovakia in October, 1944 the Jews who had been assembled by
the Slevakian authorities in labor craps. in Slevakia. In ad-
dition they deported Jews with American passports who had been
residing in the Marianka Castel near Bratislave. When the
Slavic Government protested against these measures, the Germans
replied that the Jews in Slevakia, after having obtained arms
from the partisans, attacked German soldiers with these arms
and since Slovakia is becoming the battlefield (according to the
Germans) a group of persons who would take up arms again to fight
against the Germans when a faverable occasion arises cannot be
allowed to remain on this territory. As for the Jews with American passports, the German authorities have indicated that all
these Jews will be exchanged against Germans. Until the arrival
of the Germane from the United States, the Jews are being detained on German territory where naturally they will be treated
in a preper (convenable) manner. The report from the Slovak
Government ends with the statement that at the time of writing,
the representative of the International Red Cross committee is
in Bratislava and can see for himself what the situation is.
UNQUOTE
With reference to assistance to Jews in Belsemberger helding Latin
American passports, Board is informed by Apostolie Dele gate in Washington
that Apostelie Nuncie in Berlin took up this matter with the German Government authorities and received a reply to the effect that these Jews, as
American citizens, were represented by their own preper protecting powers.
STETTINIUS
(GHW)
WRB:MMV:3M
12/22/44
WE BE CE SWP
58
59
CABLE TO AMLEGATION, BERN, SWITZERLAND, FOR MCCLELLAND FROM THE DEPARTMENT
AND WAR REFUGEE BOARD
Attention of Department and Board has been called to the case of
Mrs. Frederica (Frieda M.) Muller, nee Halmos, whose last known address is
Terez Korut 26, Budapest, Hungary, born in New York in 1894, who lost her
American nationality by marriage to Hungarian citizen in 1915, but, since
that marriage was dissolved in 1919, may be in a position to regain her
American citizenship under Act of June 25, 1936, by taking an oath of
allegiance before American consular officer.
Please advise Swiss Government that Mrs. Muller is eligible for
exchange under Department's 3082 of September 6, item F, and that until ad-
vised to the contrary, she is entitled to protection and treatment as United
States citizen pursuant to Department's 1269 of April 13.
It will be appreciated if Swiss Government will take necessary action
in this matter vis-a-vis German and Hungarian authorities.
THIS IS WRB BERN CABLE NO. 338.
9:00 a.m.
December 23, 1944
BA:FH;hd 12/22/44
60
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Legation, Bern
TO:
Secretary of State, Washington
DATED:
December 23, 1944
NUMBER:
8288
CONFIDENTIAL
The following message is from McClelland from WRB.
Reference Legation's 8044 December 9 and Department's
3927, WRB's 280, November 18.
Concerning second paragraph your message under reference,
I have carefully studied all evidence in possession of ICRC
to date with regard to distribution of CRISTINA packages and
find that it is as satisfactory as could be anticipated under
circumstances precluding in POW camps as regular and tight
controls.
With the exception of Feldpost zero seven (*) zero two
and Bergen-Belsen, in the case of every camp where these
packages were sent, ICRC delegates were able to visit and find
out from the camp commander and from men of confidence, particularly in a number of camps, that intended beneficiaries received
the packages. ICRC's estimate the most important evidence
of successful distribution was constituted by such visits on
the part of delegates and their reports.
Returns have been satisfactory, in general, in case of
collective shipments where individual receipts were enclosed
in packages. For example 3,799 packages to Dachau brought
names on receipt cards of over 8000 internees who received this
food to Geneva. In a high percentage of cases receipt tags from
packages addressed to individuals in Bergen-Belsen have
returned, although often they have come back many weeks after
package was sent. As in certain concentration camps
(Ravensbrueck) no individual internee is permitted to mail out
receipt tags, while in others (Buchenwald) only certain
categories of internees are allowed to correspond, ICRC points
out that percentage of receipt tags or cards returned cannot
be considered conclusive check.
Receipts from men or women of confidence are available in
some camps as in Ravensbureck's case, from which ICRC received
a written statement from the camp commander acknowledging
receipt of 2,522 packages of out of 266(?) despatched from Switzerland
as well as receiving 7 seven signed receipts from women of
confidence of several national groups.
61
Additional evidence of an indirect nature of satisfactory
receipt comes to ICRC in the shape of a large number of
postcards from relatives, in particular from Holland, Norway,
Denmark and Poland.
As ICRC has evidence that a sufficiently high percentage
of packages despatched to Mauthausen do not reach prisoners,
they have recently informed me that the committee can no
longer undertake to forward packages there.
It is my feeling that the evidence which ICRC places
becore me is sufficient for us to accept their formal assurance
that they will distribute only in camps where they can ascertain
to their satisfaction that the major part of packages arrive
safely, in the absence of homogeneous control system for packages
despatched to unassimilated individuals.
There is no evidence in the hands of ICRC that the commanders
distriminate against Jewish prisoners (of which there are many
in Buchenwald, for example) inside concentration camps with
regard to distribution of packages.
Recently I ralked with a young Frenchman who had escaped
from the Flossenburg concentration camp and who stated that
literally he would never have survived, if it had not been for
packages he received through ICRC. Consequently, I make an
urgent plea that this invaluable WRB service be continued.
Regarding the proposed World Jewish Congress shipment of
10,000 pounds of clothing for Bergen-Belsen, ICRC expressed
sincere hope recently that even though they had been officially
denied permission to visit this camp, that the committee would
be permitted to ship clothing to Bergen-Belsen.
HUDDLE
(*) Apparent omission.
DCR:MED:MEM
12/27/44
62
NOT TO BE RE-TRANSMITTED
COPY NO.
4
SECRET
OPTEL No. 414
Information received up to 10 aim.) 23rd December,
1944.
1. NAVAL
Last night our coastal forces on convoy route to
20th aircraft from two of H.M. Escort Carriers attacked
warehouses, railway yards and oil installations Belawan Deli
on N.E. coast Sumatra. Observation results difficult owing
to cloud but oil and petrol cisterns set on fire. Later on,
fighters attacked airfields Sabang area and small craft off
N.W. Sumatra. One Japanese aircraft shot down. Our forces
Antwerp engaged E-boats several of which reported sunk. On
had no casualties.
2. MILITARY
WESTERN FRONT. On southern flank of breakthrough
fighting continues vicinity Bastogne and faward German
elements, bypassing the town, have reached St, Hubert and
Moircy. On northern flank situation remains firm. Enemy
exorting pressure between Malmedy and Stavelot, while his
armoured spearheads are moving westwards towards Hotton and
Marche.
ITALY. North of Faenza our troops continue to
press on against enemy who is gradually withdrawing.
BURMA. Our forces have advanced further eastwards from Kalewa to a point about 11 miles west Pyingaing
where they are held up by mines and road obstacles. Forces
advancing down Indaw Mandalay railway from Wuntho have
captured Kawlin.
30 AIR
WESTERN FRONT. 21st/22nd. Politz - 711 tons,
Cologne railway centre - 497, Bonn - 552.
22nd. Weather again restricted operations all
sectors. 36 Mitchells attacked troop concentrations south
of Duron. 341 fighters and fighter bombers (4 missing)
operated over the battle area destroying or damaging about
200 rail and road vehicles. An enemy ship left on fire
off Dutch ccast.
22nd/23rd. Bomber Command sent out 311 aircraft:
railway centres Koblenz - 168 and Bingen - 106 (3 missing):
bomber support .. 37. Preliminary reports: Koblenz - some
cloud, visual identification not possible, but flares well
placed and attack appeared well directed. Bingen - moderate
clud, but bombing appeared well concentrated.
MEDITERRANEAN. 21st. 84 escorted Liberators
(1 missing) dropped 175 tons unobserved on 2 railway centres
Rosenheim, 24 Marauders and 269 fighters and fighter
bombers attacked communications, etc., Northern Italy. 34
Wellingtons dropped 67 tons on communications Yugoslavia.
12/24/44
63
64
From mm
12-24-44
BRIEF SUMMARY
Public statements of prominent persons concerning the
reconversion of industry may be divided into two categories.
(1) Those who have urged that we start some actual
reconversion now.
Donald M. Nelson, Maury Maverick, Joseph Keenan,
and Clinton S. Golden have advocated immediate reconversion
to
even
before
the
civilian
production
termination
labor and materials of the
European war in industries where surplus
are available. They have been supported by Senators Murray,
Mead, Truman and George; by labor leaders such as William
Green and Walter Reuther of the United Automobile Workers;
and by Henry J. Kaiser, Eric A. Johnston (President of the
U. S. Chamber of Commerce), Harry Woodhead (of Consolidated-
Vultee Aircraft), and George H. Bucher (of Westinghouse
Electric). Charles E. Wilson, President of General Electric,
and formerly Executive Vice Chairman of the War Production
Board, at one time advocated immediate reconversion; at
present, however, he is highly critical of those who have
supported this position.
(2) Those who have urged that we start planning for
reconversion now.
President Roosevelt, James F. Byrnes, Bernard M.
Baruch, and certain other members of the administration, have
advocated the preparation of plans and the passage of legis-
lation relating to reconversion so that the nation will be
prepared to avoid economic disturbances during the transitional
period after the termination of the war. The Senate Committee
on Post-War Economic Policy and Planning, Senators Barkley,
Vandenberg, O'Mahoney and Kilgore, Richard T. Frankensteen
of the UAW, the National Association of Manufacturers, and
various industrialists, principally from the automotive
industry, have supported this position.
65
66
PUBLIC STATEMENTS CONCERNING THE RECONVERSION OF INDUSTRY
(1) Persons Urging Immediate Reconversion
Donald M. Nelson, Chairman of the War Production Board, is reported to have pledged resumption of some civilian manufacture
even before close of European war at meeting of nation's top
industrialists. Journal of Commerce, January 18, 1944, p. 19.#
Although on March 8, 1944, Mr. Nelson warned that it might be
from six to eight months after the collapse of Germany before
large-scale civilian production would be resumed, he has been
fairly consistent in advocating a switch to civilian output
wherever there is available manpower and equipment not essential
to war production. New York Herald Tribune, March 9, 1944, p. 20.
On March 9, 1944, Mr. Nelson asserted:
"If without interference with the war effort we can
give a manufacturer in a non-critical manpower area
materials and parts to resume production of things
the civilian economy needs, I think it is to the
public interest that we do so without waiting until
another concern in a critical area is permitted to
resume production If New York Times, March 10,
1944, p. 21; see also New York Times, July 16, 1944,
p. 22.
On August 16, 1944, Mr. Nelson asserted that the fall of Germany
will enable American industry to increase non-war production
by 30% New York Times, August 16, 1944, p. 51.
Charles E. Wilson, Executive Vice Chairman of the War Production
Board and President of General Electric, recommends to House
Special Committee on Post-War Policy that reconversion begin
immediately. Mr. Wilson stated that, while it would necessarily have to be done on a small scale, the importance of
that fraction of the effort would be indispensable to a return
of normal production out of all proportion to its volume.
New York Times, March 23, 1944, p. 31. Subsequently, Mr. Wilson
was quoted as predicting that 35% of the nation's productive
* All page numbers refer to the Appendix following.
67
-2capacity now tied up with war work would be available for
peacetime production upon the defeat of Germany. Mr. Wilson
also discussed the necessity for a plan for "carrying out
essential civilian production coincidentally with war work"
by using manpower and facilities freed after a successful
invasion. New York Herald Tribune, April 28, 1944, p. 48.
(Note that on July 13, 1944, Mr. Wilson expressed agreement
with the Four Reconversion Orders issued by Mr. Nelson.
New York Times, July 14, 1944, p. 49. However, according to
the Washington Post of December 13, 1944, Mr. Wilson presently
attributes the "mess we are in as a nation" with regard to
war supplies to those who were shouting for reconversion last
July.)
Maury Maverick, Chairman of the Smaller War Plants Corporation,
urges reconversion plans, stating it essential for small business to consider reconversion to civilian production now, and
urged that "we start talking about it and planning now.'
New York Herald Tribune, January 27, 1944, p. 23. On September
14, 1944, Mr. Maverick declared:
"Speed into reconversion of little business which
should have started yesterday, is imperative so as
to prevent a dangerous lag in production. So, to
emphasize, let small business start in civilian
production immediately. The Christian Science
Monitor, September 15, 1944, p. 24.
Senator James E. Murray (Dem., Mont.), Chairman of the Senate
Small Business Committee, warns that a program must be laid
down at once to encourage resumed civilian manufacture by
small plants. Attacks argument that it would be unwise and
unjust to permit small civilian goods manufacturers to reconvert
while their big competitors in same field are still tied up in
war work. Statement concurred in by Senator James E. Mead
(Dem., N.Y.), active member of the Committee. Journal of Commerce, February 9, 1944, p. 25. Both Senator Murray and Senator
Walter F. George (Dem., Ga.) have made continual appeals in
Congress in order to expedite action on their Demobilization
Bill. On May 31, 1944, Senator Murray urged speedy measures
to avoid repetition of incidents such as the Brewster "sit-in"
strike. New York Sun, June 1, 1944, p. 26; See also Washington
Post, June 13, 1944, p. 27. Joining Chairman Nelson and Senator
68
-3Truman in urging the immediate inauguration of WPB re-
conversion plans, Senator Murray stated that the chief
opposition came from big industrial interests which "do
not want to see smaller concerns resume civilian production
while they are tied up with war contracts." Washington
Post, July 10, 1944, p. 28.
The Truman Committee's third report urges that industry be
permitted to return to unrestricted production of civilian
goods as rapidly as materials and manpower not needed for
the war become available. Wall Street Journal, March 7,
1944, p. 32; Journal of Commerce, March 17, 1944, p. 33.
Senator Truman (Dem., Mo.), siding with Chairman Nelson
in manpower controversy, argues that:
"The Army and Navy representatives want to create
a surplus of manpower with the hope that the consequent pressure on unemployed workers would result
in some of them shifting to occupations or areas
in which there is still a (war production) manpower
shortage * Baltimore Sun, July 10, 1944, p. 34.
Senator James Mead (Dem., N.Y.), replacing Senator Harry
Truman as chairman of the Special Committee to Investigate
the War Program, assails military opposition to resumption
of civilian production and states that he plans to have the
Committee investigate the subject. New York Times, August
12, 1944, p. 38.
William Green, President of the A. F. of L., urges immediate
approval of plans "for starting reconversion now, without
waiting for the end of the war."
Executive Council of American Federation of Labor seeks
immediate acceleration of reconversion program wherever it
can be accepted without interfering with the even flow of
vital war production.
"America should take heed of the statements of
responsible war leaders that the war against
Germany may end sooner than expected. If the
fighting in Europe ends suddenly the impact upon
our domestic economy will be shattering unless
preparations are made in advance to cushion the
shock." New York Times, August 23, 1944, p. 46.
69
-4Robert R. Nathan, formerly with the War Production Board, tells
members of the Junior Board of Commerce that if WPB doesn't
"loosen up on reconversion orders" the country is faced with
post-war unemployment of more than 18 million people. Mr. Nathan
said: "The time to start reconversion is now. If the war were
to end tomorrow, the country will be totally unprepared to cope
with the situation." Washington Star, August 24, 1944, p. 39.
Eric A. Johnston, president of the U. S. Chamber of Commerce,
urges immediate conversion on the largest possible scale
that will not interfere with the war effort, at a meeting
sponsored by the New York Times on March 16, 1944. New York
Times, March 17, 1944, p. 30.
Henry J. Kaiser, industrialist, states at a meeting sponsored
by the New York Times on March 16, 1944, that the peak of war
production has passed; that stockpiles have begun to appear;
that war contracts are being terminated every day; and that,
accordingly, it would be a blunder to wait until the declaration
of peace to begin conversion. Similar views expressed by
Walter P. Reuther, Vice-President and Director of the General
Motors Division of the United Automobile Workers. New York
Times, March 17, 1944, p. 30.
Harry Woodhead, President of Consolidated-Vultee Aircraft
Corporation, Testifying before War Contracts Subcommittee
of the Senate Military Affairs Committee, states there is no
reason why companies whose war contracts are terminated or
cut back should not resume civilian production. The following
other leaders in the air industry joined in urging the adoption
of unified cutback policies and prompt termination of war contracts:
Eugene E. Wilson, vice chairman of United Aircraft Corporation;
Joseph T. Gueting, vice president of General Aircraft Corporation;
and J. Carlton Ward, Jr., president of Fairchild Engine and
Aircraft Corporation. Journal of Commerce, July 11, 1944, p. 11.
George H. Bucher, President, Westinghouse Electric and Manufacturing Company, declares:
Reconversion of all our plants to peacetime pursuits should be accomplished in a matter
of months. The Washington Post, January 2,
1944, p. 18.
70
-5Arthur R. Tucker, Managing Director of the Comptrollers
Institute of America, at a meeting of the District of
Columbia Control held February 29, 1944, advocates im-
mediate action on the Baruch-Hancock plan, stating that
no matter how the plan is effectuated, "the important
thing for business and the country is to translate it
into action now." The Washington Post, March 1, 1944,
p. 29.
Robert H. Wells, President of Corrigan, Osburne, and
Wells, Inc., management consultants, predicting the end
of European hostilities in the winter of 1944, calls upon
business to "begin at once the important task of changing
over from war to peace production." New York Times,
November 23, 1943, p. 16.
71
-6(2) Persons Urging the Preparation of Plans
for Reconversion
President Roosevelt, in his Budget Message to Congress, states:
"Demobilization begins long before hostilities
end * * just as economic mobilization for total
war required many inter-related measures, so adequate
reconversion to civilian production will require many
inter-related adjustments of fiscal policies, production policies, price policies and labor policies
*
* it is therefore imperative to develop a uniform
program to deal with the inter-related problems of
contract termination, surplus property disposal, and
industrial reconversion * * * " The Christian Science
Monitor, January 19, 1944, p. 4a.
Bernard M. Baruch and John Hancock, reporting to President
Roosevelt on February 18, 1944, in a report entitled War and
Post-war Adjustment Policies," recommended that the War ProductionBoard commence work immediately on an "X-Day reconversion
plan, " to be put into effect as soon as Germany is defeated.
The report also recommended that legislation to assist reconversion be adopted as speedily as possible. Washington
Post, February 19, 1944, p. 17.
War Mobilizer James F. Byrnes urges Congress to enact the
Murray-George bill before convention recess and to move ahead
as rapidly as possible on other phases of reconversion. He
predicts that country's war mobilization job will be completed
by the end of the summer. Washington Post, June 13, 1944,
p. 27; see also Wall Street Journal, June 13, 1944, p. 36.
Jesse Jones warns that the end of the conflict may come
suddenly and that all segments of American business had better
prepare now for the reconversion period. Mr. Jones stated:
72
-"The precise day, month or even year when peace
will be declared is not for us to predict. However, it is possible that the most disrupting of
all wars will end suddenly. There will be no time
then to plan calmly and intelligently for a smooth
transition from a war to a peacetime economy."
Times Herald, January 3, 1944, p. 3.
Chairman Paul V. McNutt reported accelerating reconversion
plans after armed services warn that collapse of Germany may
come soon (October 31 set as "outside date") by giving green
light to private industry in connection with its reconversion
plans and by announcing that small plants will not need WMC
approval to go back into civilian production before the defeat
of Germany as long as they do not increase their total number
of workers. The Washington Post, September 14, 1944, p. 41.
The Senate Committee on Post-war Economic Policy and Planning
urges establishment of office of demobilization, and recommends
to Congress that speed be exercised in terminating war contracts and disposing of surplus government property. The Com-
mittee's report stated, in part, as follows:
"No planning for conversion to peace should be permitted
to interfere with the prosecution of the war * * * (or)
be construed as optimism over the early ending of hostilities. However, it is not believed that the making
of plans for reconversion to peace will in any way
interfere with the all-out mobilization effort."
New York Herald Tribune, February 10, 1944, p. 5.
Senate Majority Leader Barkley (Ky.) and Senator Reynolds
(Dem., N.C.) telegraphs absent members of Senate Military
Affairs Committee to return to Washington at once to consider
reconversion legislation. Wall Street Journal, August 1,
1944, p. 37.
73
-8Senator Arthur H. Vandenberg, (Rep., Mich.) demands that
Congress, instead of taking a three-day summer recess, buckle
down to reconversion and demobilization problems. Washington
Post, July 29, 1944, p. 12. After conferring with Senator
Taft (Rep., Ohio) and acting Minority Leader White (Rep., Me.)
Senator Vandenberg told reporters:
"Our opinion is that it is absolutely vital that Congress
should conclude the reconversion legislative program
with the least possible delay, because the battle news
is at least sufficiently encouraging to require that the
home front should be ready for the economic impact of a
German defeat." Wall Street Journal, August 1, 1944, p. 37.
Senator Joseph C. O'Mahoney (Dem., Wyo.) declares at luncheon
of the New York Sales Executive Club on February 15, 1944,
that complete victory over both Germany and Japan "is much
closer than most of us imagine" and that it behooves American
industry to speed its plans for reconversion to peace-time
output. New York Times, February 16, 1944, p. 6.
Senator Harley M. Kilgore (Dem., W.Va.), author of comprehensive demobilization measure, calls for speedy action on
reconversion legislation. Washington Post, July 29, 1944, p. 12.
Representative Forrest A. Harness (Rep., Ind.) tells House on
December 17, 1943, that the very existence of American business
and industry depends upon the solution of problems relating
to postwar demobilization. Introduces bill for establishment
of eight-man reconversion board. Journal of Commerce,
December 18, 1943, p. 2.
Richard T. Frankensteen, Vice President, U-A-W C.I.O., urges
immediate adoption of Kilgore bill for reconversion in order
to assure full employment following surrender of Germany.
New York Times, July 28, 1944, p. 50.
74
-9 War Veterans of United Automobile Workers, C.I.O., close
two-day national conference with adoption of resolution
urging establishment of board to plan reconversion of
industry. New York Herald Tribune, April 8, 1944, p. 7.
National Association of Manufacturers at its Second War
Congress asks prompt conversion plan and warns that prompt
solution of transitional problems by government is essential
for realization of American industry's postwar plans.
Journal of Commerce, December 10, 1943, p. 1.
Alfred P. Sloane, Jr., Chairman of General Motors Corporation,
issues a statement on March 25, 1944, declaring it extremely
important that the time of reconversion of the automotive
industry be held to a minimum because delay will cause
unnecessary unemployment; and further declaring that while
"the first and vital job continues to be the winning of the
war, management also has the responsibility of planning for
reconversion." Mr. Sloane stated:
"If, for example, the war in Europe should end before
the war in the Pacific, it undoubtedly would be
necessary to proceed with reconversion on a basis
of dual operations. Sharp curtailment of war production following the cessation of European hostilities
would permit and require that manufacturing facilities
no longer needed for war purposes be reconverted
promptly New York Times, March 26, 1944, p. 47.
Eugene E. Wilson, Vice Chairman of the United Aircraft Corporation, tells the New England Council Conference that there
must be an early solution of such reconversion problems as
contract surplus disposal and the use of Government plants.
Journal of Commerce, June 17, 1944, p. 10.
Leaders of automobile industry expect recall to Washington to
work out automobile reconversion plan as a result of growing
expectations that German collapse may come much sooner than
was anticipated. New York World Telegram, August 8, 1944, p. 44.
75
- 10 Henry E. Bodman, counsel for the Automotive Council for War
Production, tells American Academy of Political Science
that immediate decisions and prompt action must be taken on
reconversion. New York World Telegram, April 12, 1944, p. 8.
George Romney, managing director of the Automotive Council for
War Production, urges immediate formulation of administrative
procedures and legislation so as to make possible industrial
reconversion. Journal of Commerce, September 9, 1944, p. 13;
see also subsequent statements in New York Times, September 22,
1944, p. 14, and Chicago Sun, October 4, 1944, p. 15.
Ernest Angel, President of the Council for Democracy, in a
letter to the New York Times, dated July 1, 1944, discusses a
letter written on May 12, 1944, by Bernard M. Baruch and John
M. Hancock, authors of the Baruch-Hancock recommendations for
the transfer from war to peace. He states that Baruch and
Hancock admonish the administration to "hurry, hurry, hurry"
with actions to carry out their recommendations which were
submitted in February. He quotes at length from the letter to
emphasize his own recommendations, and reminds the reader that
Churchill has predicted that the war may end this Fall. He
agrees with Baruch and Hancock that Congress should push surplus
property disposal legislation, that definitive action be taken
on planning for a cancellation of war contracts, and that
Congress act promptly on war contract termination legislation.
New York Times, July 5, 1944, p. 16, col. 6 (Microfilm).
Leo M. Cherne, Executive Secretary of Research Institute of
America, urges immediate need for reconversion planning by
government and business to protect against industrial disorder.
Mr. Cherne stated: "German disintegration is not being overemphasized in this country. If anything it is underemphasized.
Early victory over Germany and a shorter subsequent stage of the
Japanese war have immediate basic effects on all industrial
activity. Munitions stockpiles need not be great. Depletion
of reserves available against European needs is far smaller
than ever contemplated. Cutbacks after X-Day will be greater
than heretofore talked of.' New York Times, July 27, 1944,
p. 42.
76
- 11 Charles T. Lucey, Scripps-Howard Staff Writer, states that
recent Allied gains give rise to fears that Government's
industrial reconversion program will not be ready when Nazi
collapse comes. Washington Daily News, August 14, 1944.
p. 45.
The New York Times, commenting on early end of congressional
recess, states:
"The good news from the fronts and the evidence of
serious dissension within Germany have crystallized
in the minds of the leaders of both parties the need
for immediate work" [on reconversion plans].
New York Times, July 31, 1944. p. 43.
77
AM Asks Prompt Conversion Plan
afform for the Post-War
ecommendations to the American for post-war opportunity-jobs-
copie for getting back n the road freedom for the American people.
in Within this framework American
.he"Opportunity-Jobz-Freedom,"
post- years
Indust y can provide the high level
(1) Work together. F lendly and of business rectivity warranted by:
co-operative relations should ex.st) The vart bield!og of demand for
of
riod Usges U.S. Action
n Transitional Program
warning that prompt solution
among all Americans between
Management and Laber. Between
Industry and Agr.cultu.e. Between
Government and Business There
critical transitional problems by
Government is essential for the
lization of American Industry's
must be no pitting of group
t-war plans for opportunities
are commion to all.
against group. The ends sought
D and freedom, was issued by
National Association of Many
turers yesterday at its Second
(2) Make Government one of
laws and not of men. America
must reject all efforts to cand-
4 platform of the association
ich It adopted yesterday unde
title "Today, Production for
story; Tomorrow, Opportunity
bs, Freedom.' The program for
war and post-war periods WA
afted by a resolutions commite
of sixty-two members, headed
reliant efforts. This is the way
J Congress.
ne warning was contained In this
America achieved greatness in the
past and can add to that great-
John Holmes, president of Swif
Co.
After reviewing the achievement
free private enterprise In PK
America with the highest
ndard of living, the platform
ates that this enterprise system
capable of repeating its achieveant in peace time through a high
to of production and distribution.
Transitional Planning Urged
"But American Industry knows
has a duty to tell the American
opie that It will be Impossibile to
We post-war opportunity and jobs
less problems of the transition
priod-reconversion from war to
rplus war goods will not be
capital so that business- and
new-large and small-may provide
the consumer with new and better
products, and the men and women
of America with new and better
progress must continue
(4) Reward accomplishment. Men
and women, be they workers, man-
agers or owners, should be re-
warded In relation to their productive contributions, And those who
so contribute must not be deprived
of their rewards by taxes that de-
stroy Incentive. Tax laws
"Employment In industry will be
eeded up If wartime controls are
ded as soon as practicable after
batilities cease, If wartime taxes
then reduced, and If the Gov-
III not operate plants In competion with private industry and that
ness in the future.
Incentives Seen Basic
(3) Devriop new frontiers, The
road must be cleared for venture
joba. Technical and scientific
pace-are solved wisely.
nment pays its debts promptly
hen It cancels a contract. Emoyment will also be Increased If
overnment makes clear that
ardize human beings in a bureaucratic planned and controlled economy. The sound formula for ER
tional progress is the power and
dignity of the free man. shaping
his own destiny by his own sell-
that
penalize success should be repealed.
it
(5) Restore constitutional government. Legislative powers must be
returned to legislatures. The checks
and balances Inherent In our American system of constitutional government must be restored.
(6) Establish and maintain peace
Prosperity cannot endure with
ware and threats of wars throughout the world. Our country should
umped on the market.
wit these and other reconversion
roblems are solved promptly, then
merican Industry can move forard again w confidence. OtherFisc, the Seat of plans for the fuare cannot be converted into op
ortunity and jobs. Freedom itself
battle
The program made six definite
These are the elements that will
provide the framework necessary
hight be lost.
do its full share together with
other nations in making effective
International co-operation that will
bring about and maintain world
peace, so that the young people of
America should never again be
called upon to offer their lives in
644 and services:
The new processes and new prod-
ue
The great productive capacity of
at
work:
The emendous potentialities of
domestic and world markets.
Let there be no misunderstanding
of the post-wat p'ans of American
Industry The program that is
prepared will not provide somethin- for nothing. Rewards must
be earned not given-Ro the proaram offers opportunity instead o'
a free ride. productive work ite
stead of "rude jobs." self-respect
instead of alms
Ossortunite- Jobs Freedom
for people all over America. With
progress nt home and peace abroad
the whole national economy will
prosper. This is the only way to
attain progressively gher stand.
ards of living and sound economic
security
This is R program for all Ameri-
cans, The goals can be fon-by
working together. And out of this
unity will come A stronger, finer,
greater America.
To the wartime pledge of Product
tion for Victory, American Industry
adds this peacetime pledge
"To do everything within Its power
to produce and distribute better
goods in greater volume at lower
prices to more people, to make op-
portunity and jobs available to
everyone, to help restore and preserve freedom."
The program states that American industry, producing for victory,
in looking to the future. In plan-
ning ahead, industry has developed
program for a better America,
"one that will be worthy of the
sacrifices that are being made by
our men on the fighting fronts and
one on which all citizens can unite.
The program is designed to provide
Hopportunity-jobs-freedom. so that
men and women all over America
may attain higher standards of living and sound economic security
in A land that is free. Industry
aims to achieve those goals, the
program states, by holding to the
sound principlez of the Constitution
and the Bill of Rights and by stay.
ing within the framework of free,
competitive, private enterprise.
JOURNAL OF COMMERCE
DECEMBER 18. 1943
DEC 1819-3
Reconversion
Board Proposed
Journal of Commerce
Harness Seeks Eight-Man
Unit to Handle Postwar
Surplus Goods Sales
(Bureau of Journal of Commerce)
WASHINGTON Dec. 17.-A bill
providing for the establishment of
an eight-man reconversion board
and stringently limiting the post
war sale of Government-owned ma
terials was Introduced into the
House today by Representative
Forrest A. Harness Rep., In
diana)
The bill provides that:
1 The President shall appoint a
reconversion board composed of
four representatives from Industry
and R representative each from the
Army, the Navy, the RFC and the
Treasury
To Hold Strategic Materials
2 Strategic or storable materials
of all kinds owned by the Govern-
ment at the end of the war may
not be sold for a period of three
years. Authority to sell up to 10
per cent of stocks of such surpluses
is given the Reconversion Board if
a serious shortage in any strategic
material develops or if there is
threatened spoilage No sales of
any materials may be authorized
bf the board at more than the mar-
kit price
3. All plants which the Government will own outright at the close
of the War (excluding all those
war-built plants on which private
Industry holds options to purchase)
may not be operated by the Gov-
ernment, but must be held as stand
bys for national security purposes
If they are deemed absolute sur
plus at the end of five years, they
may be sold or scrapped at the dia
cretion of the board.
This measure suggests in a geb
eral way the mechanics to be al
plied in the disposition of the tre-
mendous quantities of materials
and supplies of every conceivable
sort which our Federal procurement agencies will inevitably find
on hand when this war ends." Mr.
Harness told the House
Must Map Plans Now
"Upon the solution of this and
the numerous related problems of
postwar demobilization depend the
very existence of American business and industry. Mr. Harness
said "If we fail to plan intelli-
gently now we are risking a flood
of surplus materials and supplies
in our domestic markets at the
end of hostilities,
The flood can be so great that
It would simply engulf and destroy
these markets right at a time when
our Industries are struggling with
the problems of winding up production for war and getting back
to normal peacetime production.
he continued ** This problem atfects every American
TIMES HERALD
3.
JANUARY 3. 1944
(mes-Hereld 5 A
ones Urges
JAR 3' - 1544
Reconversion
Planning Now
By PHILIP WARDEN
Jesse Jones. Secretary of Com
merce. feels that It is imperative
that all segments of business
start Immediately to prepare to
reconvert to peace
Jones ventured no prediction
when the war would end in an
article written for the January
issue of Domestic Commerce
Commerce Department publica
tion. but made the following ob
servation
"May End Suddenly"
The precise day. month
or
even year when peace will be de
clared is not for us to predict
However it is possible that the
most disrupting of all wars will
end suddenly. There will be no
time then to plan calmly and in
telligently for smooth transi
tion from a war to a peacetime
economy.
Jones emphasized in the arti
cle that small business firms in
particular should make plans
now for the war's end He noted
that some of the larger businesses
and certain civic on unizations
were progressing with their post
war plans, saying
"To be sure there are many
wholesome signs that postwar
plans are In progress, Top-flight
members of the free enterprise
system and civic and b usiness or
canizations are already hard At
work seeking the solutions to ap
parent problems before they arise
W rried About Small Firms
But what of the thousands of
am aller business firms without any
affiliation with groups and lack
ing adequate managerial skill to
plan for their future? What IN
happening to that basically Ameri
can characteristic private initia
tive, the quality that impels men
to broaden their Vision, take
risks? Jones asked
"It Is stenificant to note at
point that the major produ
and consequently the larger
hare
of profits are in the hands it big
business These facts are perfectly
natural in artime economy
Only the hichly organized large
industries of our country could
have wrought the conversion and
production miracles that we are
already taking for granted And
only through such miracles have
we been able to convert and ad
vance to offensive warfare
Individual Concerns Important
"However, IT new behooses us to
give careful thought to all bust
ness outside the inner circle of our
highly profitable present econ
omy. Jones declared
He asserted that places must be
found in our economy for some
2,750 000 individual concern normally employing some 1,350,000
workers Without these small bust
nesses be said. the lareer firms
would reaso to function smoot his
and prosper as they have in the
past
Jones declared that government
big business and private enterprise
must make poster ar plans now for
the little fellows But to make
these plans work. he said there
must be n virile courageous and
revitalized upsurge of private
initiative
4.
WASHINGTON DAILY NEWS
DECEMBER 27. 1943
Tomorrow's Job earn. Daily News
Baruch to Urge Reconversion
Be Started Before War Ends
By EVANS
DEC 27 1943
Bernard M. Baruch's fortheoming report will take the position that reconversion of American industry can and should begin now and be far advanced before
the war ends. It probably will be submit ted soon after Jan. 1.
In effect, Mr. Baruch is expected to advise the Government that many so-called
post-war problems are becoming urgent wartime problems and that there should
be no delay in grappling with them.
He and his associates realize fully that the invasion of Europe probably will
mean the most difficult military effort in history, with desperate fighting and
long casualty lists, They are keenly aware of the necessity for home-front support of this effort, and nothing in the report will encourage complacency among
civilians.
But they are said to be convinced that steps which it is possible to start tak
Mr. Baruch
can do much to overcome fear of economic chaos and mass unemployment after the war, anding
so now
to uphold
morale on the fighting fronts and the
home front alike.
The report, therefore. is expected to
advocate that industries be given all
possible encouragement to work back
toward normal output of civilian good
Just as fast as they can be spared from
war production and AS materials and
manpower can be released from WAS
work.
PICTURE CHANGING
The picture is changing rapidly
Until recently the need was to Increase
rates of war production From now
on It will be, for the most part to
maintain rates which have been attained and in some cases these can be
decreased Shortages of many critical
materials have been It is
expected that many war con-
tracts will be cancelled, eten before
Germany surrenders
The Baruch report. in predicted
much closer co-opera-
contracting Army
Nayr. Maritime Commission and hers
-with the War Production
cutting back production program
The would be make such re-
conversion as can take place during
the war an orderly rather than a hap-
hazard process. The WPH taking avail-
able mandower. materials and other
factors into consideration, would guide
the agencies In cancelling contracts.
DIFFICULTIES FORESEEN
At best, many difficulties are foreseen. For example, It may become posable and destrable to Det some manufacturers go back to civilian production
while their competitors are still needed
In war work Desire to avoid unfair-
ness In such cases has Jed to some
consideration of quota systems. The
Baruch group is determined to protect
Industries against being penalized because they are required to produce fee
the Government Instead of for civilian
customers
The report also is expected to urer
Intensive efforts to simplify the warcontract structure especially by reduc-
Ing the number of and
to embody A standard cancellation
clause in all present and future contracts In place of the differing clauses
heretofore used by the various agencies,
Many sub-contractors is pointed
out, undoubtedly would welcome op-
portunity to return to their normal
activities To enable as many as DOE-
ible to do that would lessen
and confusion when the
practically all remaining
terminated abruptly.
PROMPT SETTLEMENTS
The report will advocate promptly
negotiated cash settlements when con-
tracts are cancelled either during or
after the WA so that the contractors
may have working capital for reconversion. Many Industries Mr. Baruch
is reported to believe will need 90 per
cent or more of the money owed them
by the Government within the first
Reconversion
Awaits Settling of 3 Problems
1/2/44
By Harold Fleming
tract termination. which Is proba-
bly why the Baruch committee
By a Correspondent of
NEW YORK-Due perhaps
the executive genius of Mr. Bernard M. Baruch or perhaps to the
circumstances themselves, the
to
tackled It first. When Mr. Baruch
went to work. a half dozen gov-
for the fine print of war contracts.
outlining who gets what and why
if the contract is suddenly terminated.
ernment agencies had a half dozen
different ideas as to how contracts
should be terminated So one of
his first acts was to help set up a
spade-work of preparing for the "Joint Termination Board of
day of general industrial reconmembers of Army. Navy, Mariversion to peacetime seems to time Commission, RFC. FEA, and
have been divided into three main Treasury
categories and It IS well for them The goal is of course to get the
to be so considered by the layman formulas of ultimate payment on
Only Hits High Spots
It only hits the high spots. I
fixes a maximum profi-th word
is maximum-of 6 per cent on
articles begun but not completed
It fixes A 2 per cent profit on inventories not yet used up when
the contract gets the ax and the
machines are stopped. Some peo-
in this tripartite form In his war contracts settled as soon as
ple say it is liberal-if the gov-
the
threematter
subjects.up in a sequence will be able to get it in a hurry,
now the Baruch Committee, without stopping on the many ancillary
or side-issues in "contract termination. has gone on to the second
budget message the President possible FO that war industry manmore than once referred to the agements in particular (always
three interrelated problems, and called "contractors in stories on
in fact the Baruch-Hancock team the subject out of Washington can
or Postwar Committee is taking know how much they will get and
When the day of victory comes
They are (1) contract termina- the front pages and the air waves
tion: (2) disposal of surplus war will be full of jubilation over vicmaterials: and (3) the financing of tory and puzzlement over the milihow reconversion. will industry Or in be other paiddefeated
words for tary lands,
and economic
in the
butsituation
war plant
war
work.
what
will
the
govern
front
offices
will
be
(everish
ment do with the remainder, and
where will the money come from
to start UID peace production on a
with discussion over what happens next,
Two Big Questions
in advance as far as possible the
lated.
answers to the two $64 questions
All hands apparently agree that Mr. Baruch proposed to a Senate
there is no time to be lost Said the Committee, They were. first, "If
President in his message. "Demo- I'm a contractor doing war work,
bilization begins long before hos- how do I get my money when the
out, these problems are closely re-
tilities end the problems of war ends and the Government de-
adjustment cover a wide range cides that it doesn't need my tanks
to achieve this there must be or shells or planes?' and second
Yrompiness of the Essence
And Mr. Baruch said recently
"If we don't get this worked out
we'll be worse prepared for peace
than we were for war-and that
was bad enough.
for him to borrow or let his people
go-or both.
An instance of the difficulty
came up last fall with the long
tussle over the role of the General
Accounting Office. What GAO apparently wanted to do was to audit
several dollars paid out a year or
so later. It is far more Important
every item-millions of them: and
what everybody else was afraid
of was that for nity cents' worth
of fraud prévention everybody
from disbursing officer through
war industry to unemployed war
worker and demobilized soldier
would have to stand around and
wait for the GAO auditors to go
last dollar."
studies, therefore, is A "uniform
And Undersecretary of the
Treasury Bell said last month
about contract settlements, A dol-
lar paid out in the settlement of
war contracts during the early
reconversion period may terms
of national well-being-be worth
that the settlements be prompt
than that they be accurate-to the
This is particularly true of con-
through all the accounts,
First product of the Baruch
termination clause." It is A formula
plus disposal.
Still unsolved therefore In contract termination are many items
Among them is the very tough one
of "over-all, OF company. settlement." Some biz companies have
hundreds-even thousands-0
save audit work. But then there IS
the risk that some left-wing business-baiting group would get hold
of an instance in which some com-
pany got too much on one contract (ignoring the fact that this
may have been offset by a loss on
another) and then somebody's
name would be scandalized in
1946.
Another contract termination
problem is how to arrange for
concerted effort just as eco- If I'm soldici who has been dis-
conversion.
of this trinity of problems-sur
separate contracts. One over-all
settlement would be speedy. and
erra as the President pointed The problem is to have settled
nomic mobilization for total war charged after the war. how can
required many inter-related meas- get my job back if the factories
ures, so adequate reconversion to aren't making any more tanks or
civilian production will require shells or planes and haven't begun
many interrelated adjustments of making anything else?'
fiscal policies, production policies. More specifically the problem
price policies and labor policies to determine as far ahead as posit is therefore imperative to sible so much of the settlement
develop a uniform program to deal terms that most of the settlement
with fbe inter-related problems of can be instantaneous and the
ontrarttermination. surplus prop- "contractor" or war Industry can
erty Misposal, and industrial re- get its money. The alternative is
ernment buyers finally grant the
maximum. But it seems to have
obtained general approval and
the payment of subcontractors
Still another problem is that of
educating both procurement of
is,
Acers and contractors themselves
on the intricacies of these settlements The layman hardly realizes
how involved they are.
The Army has just graduated
over 100 men front a two-week's
course on the subject and now
operates a regular education mill
for the purpose. Another problem
is appeal procedure, in case the
contractor wants to argue. The
more this is simplified the better
The last of the appeals from World
War I contract settlements are
only now being processed by the
courts.
(To be continued.)
NEW YORK HERALD TRIBUNE
FEBRUARY 10. 1944
Senate Report
Asks Post-War
Free Enterprise
FEB 10 1944
Planning Committee Urges
Promptness in Conversion
of Industry to Peace Basis
N.ByXJohn
TergitTricune
Chabot Smith
WASHINGTON Feb. 9-The
Senate Committee on Post-Wa:
Economic Policy and Planning
urged Congress today to set UID
immediately an office of demobilization with full authority over the
reconversion of industry to peacetime production after the war. and
recommended that the reconversion policy be designed primarily
for "the preservation and
strengthening of the American
system of free competitive enterprise."
To that end. the committee recommended that speed be made a
primary consideration in terminating war contracts and disposing of surplus government prop-
erty. Any financial loss to the
government resulting from the
summary methods the committee
proposed would be more than
made up by the gain in revenue
resulting from a prompt return to
full production, the committee
said.
Senator Walter F. George. Democrat, of Georgia. chairman of the
committee, said that a bill cover-
ing contract-termination procedure would be introduced In R few
days. and that R general bill embodying all the recommendations
of the committee's report would be
prepared soon, probably within
two-weeks.
"No planning for conversion to
peace should be permitted to interfere with the prosecution of the
war
(or) be construed as
optimism over the early ending
of hostilities," the report said
However, it is not believed that
the making of plans for reconversion to peace will in any way in(Continued on page 23. column 21
Seuate Report
(Continued from page one)
terfere with the all-out mobiliza-
tion effort. It is the aim of this
committee to set up machinery
not only to co-ordinate all of the
planning for peace, but to co-or-
dinate that planning with the
planning of the ware
tion period out of which theitories, tools and products should
peace economy will arise." Dele- be sold to private Industry where
agencies gation
of power to executive
was
unavoidable
war ever possible. but they should no
unloaded in such a way as to
time
but
should
be
ended
with
the
cause
overproduction or oversup
coming of peace, the committee|
of civilian goods.
said.
in
The director of the proposed
office of demobilization should re-
port to Congress every three
months. and should report every
The office of demobilization
should be subject to the control of
the Office of War Mobilization until hostilities cease, and thereafter
should be responsible only to Con-
thirty days to a committee of gress. It should have the power
three Senators and three Representatives. This committee should
to issue orders to other government agencies regarding reconalso attend all meetings of the version policies: it should survey
full-time board of experts to be government property, and estabappointed by the director. The lish a uniform policy and proceddirector would be appointed by the ure for terminating contracts.
tion is to be passed be gotten President. subject to confirmation
Claims under term nated conby the Senate. and would hold tracts should be settled quickly by
under yay at the earliest possible moment.
office for two years subject to negotiation. with mandatory adreappointment.
The salient points of the revance payments up to 90 per cent
port, which covered a wide range
Surplus government property of the claim, subject to 9 penalty
of details, were AS follows:
should be disposed of in such a of 1 per cent a month ot. claims
Congress should "retain In its way as to encourage competitive found to be excessive. Liberal
The committee said that in order for government agencies to
make the necessary plans for reconversion, it was "Imperatively
necessary that whatever legisla-
recomare
hands the settlement of the broad/enterprise and small business, and/visions for loans also
probasic problems of the demobiliza- to discourage monopolies. Fac- mended.
6
NEW YORK TIMES
FEBRUARY 16. 1944
SPEEDY CONVERSION
URGEDBYO'MAHONEY
Tells Sales Group Victory in
Europe. Far East Is Closer
Than Most Imagine
FEB 16 1944
3 CHOICES OPEN TO U. S.
They Include Free Enterprise,
Totalitarian Regime, Cartel
System, Senator Says
Asserting that complete victory
over both Germany and Japan "is
much closer than most of us
imagine." Senator Joseph C. O'Ma-
000 (ach. Terming this "a truly
new development in naval, war-
fare,' he added that it took 250
men one and a half years to draw
the plans for the first floating dry
dock equipped with machine shops,
cranes and complete facilities for
repairing battleships.
Turning to the peacetime production task facing American industry under a capitalistic system
of free enterprise, Senator O'Ma.
honey warned against thinking
that the pent-up demand for consumer goods will be sufficient to
enable industry to slip easily into
peacetime economy. Emphasizing
honey of Wyoming declared here
yesterday that it behooves American industry to speed its plans for
reconversion to peacetime output.
He spoke at the luncheon of the
the necessity for providing maxi-
York in the Hotel Roosevelt.
Speaking on the subject of eco-
yet there were 9,000,000 unemployed in the country during that
nomic freedom in the post-war
For the post-war. Senator O'Mahoney urged consideration of the
premise that by building up the income of the masses of people they
would be enabled to buy the things
Sales Executives Club of New
world. Senator O'Mahoney warned
that the end of hostilities will
force the United States to make a
choice between a capitalistic system of free enterprise and maximum production which guarantees
job to all who seek employment,
totalitarian regime dominated by
centralized governmental planning
for industry and Individuals, and
L system of managed economy in
which cartels would fix prices and
regulate production without gov-
ernment control. The latter two.
he added, would destroy the freedom of the individual in this country
Senator O'Mahoney said he based
his opinions regarding the possible
duration of the war on the failure
of Japan's navy to prevent penetration of her Pacific island empire by the numerically outnumbered United States Navy, as well
as on the expectation that Germany would not be able to with-
stand the Russian army in the
west and the constant American
and British bombing of her pro-
duction centers
He regarded it as very significant. ne said, that in the recent
occypation of the Marshall Islands
by United States forces not a single Japanese battleship. cruiser,
aircraft carrier or submarine
would accept the challenge of battle. "The tables have been turned
since Pearl Harbor." he declared
J
An interesting fact about the
war with Japan, according to the
Senator, is that the United States
now has floating dry docks in the
Pacific built at cost of $25,000.-
mum employment, he reminded his
listeners that American industry
in 1940 produced more in goods
and services than it had ever produced before in a single year, including the boom year of 1929. and
year.
they want. "We cannot hope to
build a future for a free economy
merely upon the sale of the necessities of life." he added 'We have
to make up our minds that we are
going to sell the luxuries of life
and make it possible for 130,000,000
people to buy those luxuries."
The luncheon was attended by
approximately 300 sales executives
and guests. Dr. Paul H. Nystrom,
president of the group, presided
Senator O'Mahoney was introduced
by Paul West, president of the Association of National Advertisers.
-SPEEDY CONVERSION
URGEDBYO'MAHONEY
1.
Tells Sales Group Victory in
Europe. Far East Is Closer
Than Most Imagine
FEB 16 1944
3 CHOICES OPEN TO U. S.
They Include Free Enterprise,
Totalitarian Regime. Cartel
System, Senator Says
Asserting that complete victory
over both Germany and Japan "is
much closer than most of us
imagine." Senator Joseph C. O'Mahoney of Wyoming declared here
yesterday that it behooves American industry to speed its plans for
reconversion to peacetime output.
He spoke at the luncheon of the
Sales Executives Club of New
An interesting fact about the
war with Japan. according to the
Senator. is that the United States
now has floating dry docks in the
Pacific built at a cost of $25,000.-
000 each Terming this "a truly
new development in naval warfare." he added that it took 250
men one and a half years to draw
the plans for the first floating dry
dock equipped with machine shops,
cranes and complete facilities for
repairing battleships.
Turning to the peacetime production task facing American industry under a capitalistic system
of free enterprise. Senator O'Ma.
honey warned against thinking
that the pent-up demand for consumer goods will be sufficient to
enable industry to slip easily into
a peacetime economy. Emphasizing
the necessity for providing maxi-
mum employment, he reminded his
listeners that American Industry
in 1940 produced more in goods
and services than it had ever produced before in a single year, in-
York in the Hotel Roosevelt.
Speaking on the subject of eco-
cluding the boom year of 1929. and
world, Senator O'Mahoney warned
year.
nomic freedom in the post-war
that the end of hostilities will
force the United States to make a
choice between R capitalistic system of free enterprise and maximum production which guarantees
job to all who seek employment,
totalitarian regime dominated by
centralized governmental planning
for industry and individuals, and
system of managed economy in
which cartels would fix prices and
regulate production without gov-
yet there were 9,000,000 unemployed in the country during that
For the post-war. Senator O'Ma-
honey urged consideration of the
premise that by building up the in-
come of the masses of people they
would be enabled to buy the things
they want. "We cannot hope to
build a future for a free economy
merely upon the sale of the necessities of life." he added "We have
to make up our minds that we are
going to sell the luxuries of life
ernment control. The latter two
and make it possible for 30,000,000
people to buy those luxuries
try
approximately 300 sales executives
and guests, Dr. Paul H. Nystrom,
he added, would destroy the freedom of the individual in this coun-
Senator O'Mahoney said he based
his opinions regarding the possible
duration of the war on the failure
of Japan's navy to prevent penetration of her Pacific island empire by the numerically outnum-
bered United States Navy, AS well
as on the expectation that Germany would not be able to with
stand the Russian army in the
west and the constant American
and British bombing of her pro-
duction centers.
He regarded it as very significant, the said, that in the recent
occupation of the Marshall Islands
by United States forces not a sinlie Japanese battleship, cruiser,
aircraft carrier or submarine
would accept the challenge of battie. "The tables have been turned
since Pearl Harbor." he declared.
The luncheon was attended by
president of the group, presided
Senator O'Mahoney was introduced
by Paul West, president of the Association of National Advertisers.
7.
NEW YORK HERALD TRIBUNE
APRIL 8, 1944
War Veterans of U. A. W.
Urge APR
Planning for Peace
A
Propose National Production
Board for Reconversion
Nutter 11 NET
WASHINGTON, April 7.-The
United Automobile Workers, Congress of Industrial Organizations
afflate and the largest union in
the country. closed a two-day national conference of U.A. W. war
veterans today with adoption of a
resolution urging immediate establiahment of R national "peace production board" to plan, organize
and direct re-conversion of Industry from war to peace.
The delegates, all veterans of
this or the last war. also proposed
a standard thirty-hour week at
forty-hour pay to assure jobs for
all in the post-war era; creation
of a vast public works program
emphasizing housing. "not AN a
glorified W. P. A. but as a permanent part of a healthy, expanding
economy," and Federal operation
of government-owned plants in
monopolistic or semi-monopolistic
Industries strategic to national
relfare and defense."
8.
NEW YORK TELEGRAM
APRIL 12, 1944
Urgent Need Seen
For Prompt Action
On Reconversion
Bodman Fears Chaos
If Contracts Are
Subjectite Revision
Plans for ersion of
industry after the war should be
made now to avert "the longest
breadline in our history." Henry
E Bodman counsel for the Automotive Council for War Production. told the American Academy
of Political Science in the Hote
Astor this afternoon. Half of
America's entire Industry would
shut down with a sudden end of
the war. he declared
Prompt, final decisions must be
made on clearance of government
property from plants and settlement of war contracts, Mr. Bodman said If only temporary set-
tlements are made and they have
to be reviewed by another agency
the termination procedure will be
slowed down and postwar employ-
ment seriously retarded. he as-
serted.
Sees War Effort Slowed
"The proposal that no settle-
ment shall be fenal until approved
by the General Accounting Office
is at variance with the purpose
for which that office was created,
said Mr. Bodman.
To transfer the power to negotiate contracts or settlements out
of the armed services to the General Accounting Office during the
war period will, of necessity interfere with the conduct of the war
Contracts are being terminated almost daily and replaced by
other war contracts. If these terminated contracts cannot be set
t.led by the armed services. partic
ularly with respect to the disposi
tion of materials that may be re
quired for other war contracts O
which should be scrapped and re
newed to make way for other wa
work. and with respect to th
amount payable to subcontractor
and suppliers until the Gen
eral Accounting Office has ha
six months to review these mat
ters. the war effort will be sert
ously impeded.
Against Reviews.
Mr. Bodman declared tha
settlements should be final when
once made and not subject to b
reopened except for collusion o
fraud.
The executive and legislative
branches of the government are
making "serious and commend
able' efforts to assure prompt re
conversion to a peacetime economy
he
said He approved the
Baruch-Hancock suggestion that
joint committee of the Senate and
House, in co-operation with the
Executive Department. should decide upon one termination bill and
urge its passage.
Governors Pine
Now
A
Parley
To
of
Michigan
Next
Winning
GOU'
Calls
in
War
LINCOLN,
MAY
I
Kelly
Issue
JOURNAL OF CO MERCE
JUNE 17. 1944
Wilson Stresses
Conversion Jasks
United Aircraft Official
Urges Sound Surplus
Disposal Policies
CORRECT CC
(Special to Journal of Commerce)
BOSTON June 16 If at the close
of present emergency, our national
policy supports the sound expanion of air transport 80 AS to shift
he load from military to commerial types, the aircraft industry can
become the catalyst of a new
dynamic, expanding economy, Eu.
rene E. Wilson, vice chairman of
United Aircraft Corporation told
the New England Council Confernce today.
A strong plea was made by Mr
Wilson who is chairman of the
Aeronautical Chamber of Commerce, for early solution of such
reconversion problems as contract
Jurplus disposal and the use of
Government plants.
Large Postwar Surplus
"When the emergency is over a
large surplus of transport aircraft
will be available. Mr. Wilson said
"If these are dumped on the market they can easily snuff out the
vital spark of technological devel-
opment. If. on the other hand,
they are disposed of wisely. so that
the surplus can be used to nourish
an expanded private transport
scientific progress will continue
It is entirely possible that through
the use of contract airmail, and the
Intelligent disposal of surplus air-
craft, air transport can be ex-
panded without subsidy in such a
way as to offer employment for re
turning soldiers and create a denand on the part of the newly ea
tablished airlines for improved
models AS they become available.
Mr. Wilson pointed out that air
ower provided the key not only to
prosperity. but to lasting peace.
"Whether we shall recognize the
opportunity and rise to It depends
believe upon whether the people
eturn to those traditional Amerian principles which have already
iven us unquestioned technical
nd numerical superiority in the
ir or choose to follow some other
ource.
Air Now Highway
Mr. Wilson said that pending the
erdict of history as, to whether
be new air power is more Imortant than set power "this much
clear: The air. like the sea, has
ecome A highway And the airlane has certain advantages
Highways end at the shore. sea
nes end At the shore. but the air
knea no such frontiers ..
Mr. Wilson cited the vital role
layed by air transport in the-war
h delivering vital materials easen
al to the split second timing of
ombined operation to assure suc
eas that otherwise could not have
een achieved
Air-Industry Asks
Unified Cutbacks,
Advance Notices
Orderly 11 1944 ersion
Sought, Stressing Output
Design in New Types
JULY 11, 1944
our of
Burrau of Journal of
WASHINGTON, July 10.
ordinated cutback planning
which the Army and the
would undertake to order
terminations in those
which are preducing
during the war
under which planes
would continue to designed
by the War Contracts Supcommit-
tee of he Renate Military Affairs
Committee. leaders of the industry
appearing before the committee
Orderly Reconversion Pla Asked
(Continued from First Page)
retrain workers, thereby avoiding
retraining for existent
that
day, urged the adoption of unified
outback policies by the armed
leas which would
ltous
the prime factor in placing orders.
The
aircraft
manufacturers
want no subsidy. but do suggest
Air Policy which will
fide
design
opportunity to buy or lease the
transport
and
the
subsidy.
time
net
said
manufac
qualified
that
rapid
with non-military
ment
aircraft
version period.
Prompt
stated
plans
given
the
Govern
colleges
by
military
training
and
Aircraft
The
for
Wherever
should
and
tinued
Each company operating
warnment factory should be given
reasonable terms
maintain
to
If
In response to specific queries
submitted to the aircraft Industry
It
produced in the transitional period
to essure American airpower.
advocated today by leaders of the
aircraft industry.
further
for
that
types
Combat
Needs
its
of
further
ends
bartered
or
help
to
be
derly
by
Woodhead
AS
thorough
Defense Plans
respect to planning for
sign. either in
templated If in the opinion
Army or Navy they
of
Sen.
principle
Insurance
defense
Industry
man.
air
development
the
does not believe that
Mr.
They
"an
for
national
that
this
aircraft
early
air
country
supert-
started
military
testified
Disposal of Surplus
On the subject of
industry
urged
Mr.
construction
of landing field
plants
operated
by
research
of
in
Aircraft
E Wilson
of United Aircraft
T Geuting.
General Aircraft
J. Carlton Ward
Fairchild Engine
craft Corporation,
Outlines Labor Policy
With respect to workers involved
of the aircraft
Industry. Mr. Ward said that
Industry
1. with the principle
orderly
and
Relieves that A. new employer
organizations should
Industry
schools
and
and
-
WASHINGTON POST
JULY 29, 1944
Soon as Congress Returns
Byrnes Is Promised Action
On Problems of Reconversion
JUL 29 1944
By Mary Spargo
War Mobilization Director James
F. Byrnes announced last night
that Democratic leaders had pronised Congress would get right to
work when it reconvenes Tuesday
on the twin problems of providing
for warworkers whose jobs are
ended and converting industry to
a peace-time basis.
Demands that Congress. instead
of taking three-day recesses starting August J. buckle down to re-
conversion and demobilization
problems was sparked by Senator
Arthur H. Vandenberg (R., Mich.)
who called a special meeting of
Republican Senators for Tuesday.
Democratic leaders were quick
to seize the ball. although some
scored Vandenberg's statement regarding the "chances of an early
victory over Germany" being "encouraging."
Senator Robert R. Reynolds
(D. N. C.). chairman of the Senale
Military Affairs Committee, in
whose Jurisdiction reconversion
legislation was placed, said he had
asked all members of his commitLee to be in Washington Tuesday,
to consider bills.
Senator Warren R. Austin R
Vt.) ranking minority member. ha
notified his office that he will be
here for the meeting.
In response to a request from
Byrnes, Senate Majority Leader
Alben W. Barkley, Speaker Sam
Hayburn and House Democratic
Geader John W. McCormack sent
telegrams promising prompt consideration of reconversion, demo
bilization and surplus war property
legislation.
Reynolds' committee will consid-
er both the George-Murray and
Kilgore demobilization bills, and
very likely a new Murray bill.
Senator Harley M Kilgore (D
Wr. Va.), author of a very compre-
hensive measure, in calling for
speeding of congressional action.
emphasized that reconversion legis-
lation is needed not only to face
squarely the problems of peace.
but also to maintain an orderly
war production program during
the difficult period of partial cutbacks,
His bill is supported by the
See CONGRESS, Page 3, Column 2
CONGRESS
From Page I
American Federation of Labor, the
Congress of Industrial Organiza-
tions and the Railroad Brother-
hoods,
The special House committee.
headed by Representative William
M. Colmer ID., Miss.), considering
reconversion problems has been
notified by McCormick to return
Tuesday.
Representative John J. Cochran
D. Mo.) joined in the call for Congress to come back to work
"We have passed a law that will
take care of the termination of
contracts so far as the corporaions are concerned, but we have
failed to no anything to prevent
widespread unemployment when
war plants shut down. Plants
cannot be reconverted overnight.
When contracts are cancelled mil-
lions of men and women war-
workers will have no place to go."
Bonus Proposal Offered
Leaders of both parties have ex-
pressed the belief that adequate
demobilization legislation providing for unemployment benefits
might check the rapidly spreading
exodus of warworkers from plants
producing materials of war vitally
needed now.
One suggestion, made by a lead-
ing industrialist, would provide
demobilization legislation specifically divided into two phases-one
covering the situation until after
the collapse of Germany. and the
second covering the period necessary to defeat Japan.
JOURNAL OF COMMERCE
SEPTEMBER 9, 1944
Romney Urges Speedy Government Action
To
Facitate Clearances of War Plants A13
Journal
(Special to Journal
DETROIT, Sept. 8.-Urging the
Government to unshackle industry
for the big reconversion job that
is imminent, George Romney man-
aging director of the Automotive
Council for War Production, today
advocated Immediate formulation
of administrative procedures and
additional legislation to facilitate
war plant clearance.
Until the Government is prepared
to remove this and other obstacles
to reconversion, he warned, industry will not be able to reduce
the period between war jobs and
peacetime jobs to R minimum.
A big gap in our peacetime economic fortification exista because
of the lack of adequate Government
preparation for war plant clearance, he said, even though the passage of the Contract Settlement Act
called for some of the necessary
administrative action.
Plants Seen "Clogged"
"New automobiles cannot roll off
assembly lines as long as manufacturing space is clogged with Government equipment, materials and
other inventories used In war production but useless in automobile
that the Inventoried Items can be
removed from the plants without
holding up during the entire 60-day
waiting period provided for in the
Contract Settlement Act.
Surplus BUI Amendment Asked
As a second concrete proposal
Mr. Romney advocated the immediate adoption by Congress of
Senate amendment to the Surplus
Disposal bill now In conference,
which provides that the military
agencles should be authorized to
determine in advance of war con-
tract termination exactly what
equipment and materials will be
needed for military purposes.
Of the remainder the Government
should decide what has any other
clearly foreseeable use and the bal
ance should be classified and dis
posed of as scrap. Each war contractor should be advised as to the
Government requirements for the
handling. storing and disposing of
the different classifications of the
Government-owned termination inventory.
"Such action would keep an additional burden off the American
taxpayer's shoulders." Mr. Romney
pointed out, "as it would prevent
the wasteful practice of filling valuable warehouse space with war
items that will have no utility except ILM scrap at the very time when
there will be insufficient space to
store the useful war surpluses.
production. And the plants may
Tool Freezing Scored
stay clogged for what will seem to
the nation ILS an interminable period unless steps can be taken be-
"It must be realized that as high
as 90 per cent of some termination
inventories is good for nothing but
scrap. To allow such Inventories
fore the collapse of Germany to
trim this time element down," Mr.
Romney said.
As a specific solution he suggest-
ed that the military agencies as-
n-and train their representatives
now to check and approve Inven-
tory lists as they are being pre-
pared by war contractors after the
war contracts are terminated, SO
to stand in the way of quick
reconversion and re-employment
would be a waste of the nation's
productive plants and manpower."
Various Washington agencies-are
guilty of procrastination In putting
into effect policies formulated by
other agencies in meeting reconversion problems, he said.
An example of such conflict between current regulations and ade-
quate steps to make practical
preparations for reconversion is
that company-owned automotive
machine tools that were converted
to war production are now frozen
to war jobs, even though identical
Government-owned machine tools
are idle and could be used.
"The freezing of such tools makes
It Impossible for the automotive
Industry to do any realistic advance scheduling of the use of
these machines or to begin now to
recondition and retool them for
automotive production despite War
Production Board rulings that
otherwise would permit retooling
preparations." he pointed out.
Another inter-agency conflict concerns the boxing of machine tools,
with one agency's standards not
being acceptable to another. This
results in duplication of effort, expense and red tape.
Lauds WMC Action
Mr. Romney lauded the War
Manpower Commission's action in
calling A meeting for September 14
to discuss with the Industry the
assignment of engineers and technicians to passenger car experimental work.
Mr. Krug's announced decision to
free civilian production from wartime materials and quota controls
following European victory is an-
other heartening announcement
that will unshackle Industry for
the big reconversion job that seems
to be imminent,
"Removal of these and other wartime controls that block the Indus-
try from taking preliminary re-
conversion steps are highly desirable.
"What is now needed is quick,
decisive action from Government
that will clear up the host of other
problems which are overdue in
solution," Mr. Romney said.
NEW YORK TIMES
14.
SEPTEMBER 22, 1944
HITSU S ATTITUDE
ON RECONVERSION
Denyin
spread belief that the Smaller War
Plants Corporation favored sub-
Romney Says Delays in Plans
Have Increased Burden on
Post-War Unemployment
SMALL PLANTS DEFENDED
Adjustment for Little Business
Should Begin Immediately,
Maverick Tells NICB
George Romney, managing director of the Automotive Council
for War Production, charged last
night. in an address at . dinner of
the National Industrial Confer-
ence Board at the Hotel Waldorf-
Astoria, that the "failure of the
Government up to now to authorize
preparatory activities for partia
reconversion already has lengthened the period of unemployment
that will occur during the partial
reconversion period if the war in
Europe ends before December.
Urging that all existing regulations which interfere with preparatory work for reconversion should
be revoked where the work does
not interfere with urgent war production programs, Mr. Romney
contended that cutbacks and reductions in war orders and overproduction of raw materials have
made it feasible to take this step
"without lengthening the war.
Asserting that war production
employment passed its peak last
December, Mr. Romney said the
automotive industry suggested be-
aidizing small businesses, Mr.
Maverick declared that there
should be a system of Federal
credit insurance similar to the
Federal Housing Administration
to insure bank loans to small busi-
nesses He said that small busineas has had to pay an average
Interest rate of 4.5 per cent, while
big business had had to pay only
2.8 per cent on V loans guaranteed by a Federal agency.
Urges Strong Aircraft Industry
Mr Maverick also called for vig.
orous prosecution of the anti-trust
laws to break up monopolies and
cartels which he said, would doom
a free enterprise economy. He de-
clared that if little business was
crushed the United States would
follow the same pattern of a col-
lective economy as Germany, resulting either in war or revolution
William A. M. Burden, Assistant
Secretary of Commerce, said that
one of the most troublesome aspects of the reconversion of the
aircraft industry was the public's
Inadequate comprehension of how
serious a dilemma the industry
faces Pointing out, that the in-
dustry now employs nearly 2,000g
000 persons, he said that a shrink
age of 90 to 95 per cent might
reasonably be expected
He warned that it was important to maintain a strong aircraft
manufacturing industry with con-
tinuing world leadership in research and development, and cautioned against following such pol-
Icien as after the last war which,
he said. delayed the technical prog
reas of the industry for years
Dr. Lionel D. Edie, president of
Lionel D. Edie & Co., said that
paradoxical situation had developed in that while business wanted
return to free enterprise that
ginning preparatory work a year
many business men were afraid to
Production Board's order of July
off. He expressed the opinion that
business generally was making a
mistake in favoring continuance of
price ceilings until there no longer
are any shortages, and predicted
that Congress was likely to refuse
to extend the Price Stabilization
Act beyond next June 30.
ago. He charged that the War
29. permitting the industry to
place orders for machine tools, had
"aroused false hopes.'
Maverick Pleas for Small Plants
"Today most people believe that
automobile plants already are be-
ing reconverted for automobile
production," Mr. Romney said
"Even people in Detroit have been
so misled by public statements.
largely emanating from Washington, that they are asking if they'llfor
be able to buy new car
Christmas
Maury Maverick. chairman of
the Smaller War Plants Corpora-
tion and a vice chairman of the
WPB/contended that the reconversion of smaller businesses should
begin "right now.' even though
some big businesses might not be
able to start as yet.
have the wartime controls taken
CHICAGO SUN
Delay in U.S. Reconversion
Action
Held Menace to Jobs
UCT 4
Automotive Council Manager Asks Immediate
Directive to Aid Workers, Save Small Firms
CHICKES tan
George Romney general manager of the Automotive Council for
War Production, Detroit, yesterday declared that the government's
failure to authorize preparatory activities for partial reconversion to
peacetime production "already has lengthened the period of unemployment that will occur if the war In Europe ends before December."
Each additional day that government fails to take reconver-
sion action "is lengthening the
period of unemployment for
millions of American workers,
he told the 1944 meeting of the
Controllers Institute of America
at the Stevens, and at the same
time he predicted that the delay
would increase the number of
small business firms which would
fail because of inability to "bridge
the gap between contract termi-
nation day and resumption of
civilian production.
Romney advocated Immediate
Last Chance for Decision."
"We must have sane men and
honest men in charge of the gov-
ernment. It will be our last
chance to make a decision about
our destiny during the next 30
years." he said
Clarence A Jackson, vice-president of the Indiana State Cham-
ber of Commerce, told the group
that "a sound, sensible social security system, carefully watched
issuance of an official directive
and run by all the people-with
tory reconversion work from all
existing rules and regulations,
"where the work does not interfere with urgent war production
programs." He forecast that limited volume production of automobiles would require a year.
state. and local governmental
machinery-Is a vital, necessary
part of the free enterprise sys-
exempting planning and prepara-
Johnston Calls for Unity.
Eric A. Johnston, president of
the U.S. Chamber of Commerce
addressed the convention banquet
the present co-ordinated federal.
tem.
Disposals Top 88 Million.
F. R. Atcheson, deputy director
of operations of the procurement
division. U.S. Treasury Department, told the controllers there
will be surplus property valued
at billions of dollars to be dis-
tional unity, greater national
security and "an economy of
posed of after the war.
During the past year, disposals
totaled $88,260,017. as compared
with $9,076,000 during the pre-
peace returns "the world will be
nels have become the chief
last night, calling for greater na-
adundance" in the postwar period
Johnston predicted that when
engaged in a titanic race between
collectivism and individualism
between the big state and the big
individual, between autocracy and
freedom."
'All over the world." he said
"the tide will be running strong
to state control, state dominance,
state ownership."
Wagner-Murray Bill Hit.
John T. Flynn, economic analyst and author, said the American people will face a generation
of frustration and disorder if
they do not have the vision to
see and understand how their political and economic system being destroyed and "have the cour-
age to drive out of power those
vious year. Commercial chanmarket for surplus goods, where
government agencies and military
services formerly took most of
the property, Atcheson said.
Retiring Head Toastmaster.
John C. Naylor, vice-president
and controller of the Pet Milk
Co. and retiring president of the
institute, acted as toastmaster at
the banquet which was attended
by 1,200.
The new president, Edwin W.
Burbott of the A. B. Dick Co.
in his acceptance address called
for maintenance of "dynamic
and progressive concept of controllership.' asserting that the enlightened controller must inquire
into the effects of political and
who are destroying it.
economic influences upon legisla-
war is over will be a mess such
as this country has never known
in all its history and alongside of
end that they be integrated into
Flynn asserted that the "condition that will come when the
which the crises of 1929 and 1933
were mild.
tion, and "give cogent voice to
resulting convictions in the de-
liberations of management, to the
sound policies."
NOVEMBER 23, 1943
OOM UNMATCHED
IN HISTORY SEEN
Y.
these
Wells Calls on Business Men
for Change-Over at Once
to Get Ready for It BI
NOV-23 1943
Forecasting unprecedented post-
war opportunities for expansion
and A ten-year boom unmatched
in history. Robert H. Wells, prési-
dent of Corrigan, Osburne & Wells
Inc., management consultants, yesterday called upon business to "be
gin at once the important task of
changing over individually from
war to peace production.
"This country now is beginning
to gear up for the greatest industrial comeback of the century." he
said, emphasizing that the opportunity for widespread prosperity
with employment and wages at
high levels is unexampled in the
history of industry.
In A special analysis, entitled
"Getting Down to Earth on PostWar Work," issued by his company, Mr. Wells envisaged:
Four-Point Forecast
1) The end of hostilities in Europe in the winter of 1944:
(2) six months of slowdown in
early 1945:
(3) Three years of a prodigious
domestic replacement boom from
As management consultants
with contacts in many different
Industries, we are in R position to
see the uneven effects on industry
na the war load sporadically light-
ens. Pt is within our observation
that the job of conversion is net
being undertaken As wisely and
thoroughly as it might. except by
the leading companies and certain
of the more enterprising among
medium-sized corporations.
Not Informed on Changes
"We find that business men as R
whole are not well-informed about
the changes they must face when
peace comes: the new materials,
new processes of manufacture, new
grades and qualities of product.
all resulting from the tremendous
focusing-down of our productive
brains on war work."
The way back to production for
peace. Mr. Wells emphasized. is by
no means simple and unobstructed
Business as a whole. he said, con-
fronts many large problems, particularly government's present po-
sition in industry and its future
policies toward private enterprise.
including taxation. inflation and
labor relations.
Under conditions where costs
must be more carefully weighed
by the individual companies con-
cerned and when the time for conversion can be and must be appreciably shortened, he declared. it is
imperative that business men
frankly face the facts. take an af
firmative part in all dealings with
Government that admit of arbitra-
vide the greatest ten years of
tion, make the necessary decisions
and actually get started on a definite war-peace conversion program.
making physical changes in plant.
product, processes and even marketing methods, wherever circum-
this country will see in this cen-
was said
1945 to 1948:
(4) Then two years of serious
setback followed by R world rehabilitation boom which will proprosperity from 1950 to 1960 which
tury.
'Changing over to meet an opportunity of this world-embracing
size," declared Mr. Wells, "im-
poses on all business men A strong
obligation to do this job thoroughly. This country suffered a military
Pearl Harbor at the beginning of
the war. Let's not suffer an economic Pearl Harbor at the end of
the war. If business men exhibit
complacency. indifference and lack
of vigorous application, this is no
imaginary but a real threat which
could seriously delay the expected
upturn. It could result in wide-
spread unemployment. The figure.
of 12,000,000 unemployed has been
mentioned in this connection. In
my judgment this is as unrealistic
FLB it is unduly pessimistic. A likelier figure, I believe. would be no
more than 6,000,000. The degree of
unemployment will be determined
of course, in large measure by the
degree in which industry applies
itself to the job of war-peace con
version.
stances warrant such action. it
'A start has been made." said
Mr. Wells "Much remains to be
done, particularly by the great
body of manufacturers and producers. We have the greatest opportunity of the century before us
-and the greatest responsibility
Management is equal to the task
If it will rouse to the imminent
need for action. if It will take ad
vantage of the informed and wise
counseling that first-hand contact
with war production has made
available for peace production.
there is no question this country
will be placed on a solid footing
that will bring about our greatest
prosperity period and ehable us to
influence importantly the estab-
liahment of just and lasting
world peace.
BARUCH
Baruch Calls for Start Now
5.
On 'X-Day' Reconversion
19 1944
House Releases
120-Page Report
On War, Postwar
Adjustment Policies
By Ben w. Gilbert
Bernard M Baruch,
Highlights of Baruch Report
On Policies of Reconversion
task
Emphasizes
BERNARD M. BARUCH
not
only
In
the
Safeguard Against
Early Nazi Collapse
tightening
Groups
Are Condemned
JAN 2
Paskington Pnet
Conversion
TrendLooms
In New Year
By Thomas D. Hagenbuch
Atriciated Press Financial Editor
New York, Jan 1.-The Nation
starts the new year with its industrial might roaring at the highest
level in all history. We have
achieved almost undreamed of
heights of production in planes
ships, munitions and other vital
materials need for victory and
now we begin to see the defeat of
Germany in 1944 and of Japan pos.
sibly in 1945.
But very fact that we have
come so far in producing the mass
of weapons which has set us definitely on the road to victory brings
up the question of what will happen
to our economy if Germany is
knocked out of the war early in
1944. For that reason alone some
uncertainty attaches to the new
year,
At the turn of the year we have
about reached the rate of productionave set ourselves at the start of
the war. Raw materials are no
longer a problem. the manpower
situation is less critical. We are
prepared to continue our great output of war goods as long as they
are needed.
Top Output Asked
The War Production Board.
which cannot afford to bet on the
chance Germany will be defeated
1944. is calling on American industry for continued top productjor_n the new year.
Nevertheless there seems to be
little question that if Hitler is
Jicked in 1944. there will be some
far-reaching changes made in the
production picture.
For one thing. it will not be
necessary to supply so vast an army
of ground troops as we now need.
Then again. we will mass our fight-
ing ships and planes in the Pacific for an all-out war on Japan,
instead of spreading them over the
globe. and it is probable we may be
able to ease production in many
lines.
Radio
Leveling-Off Indicated
Even as the fighting in Europe
Intensifies. there is some indication
of a leveling-off in a few branches
of war industry. such as the recent
decision of the Maritime Commission to end Sunday work on cargo
ships and discontinuance by several
plants of the manufacture of small
arms and ammunition,
Estimates of the cutback in war
production which would follow
Germany's defeat vary, One economist puts it at 80 per cent. Others
say it would be nearer 25 per cent.
In 1943 the Nation produced approximately 60 billion dollars worth
of war goods. Over-all industrial
production was climbing toward
David Sarnoff. president. Radio
Corp. of America-Latest estimates
reveal that radio production in the
United States is up to 250 million
dollars a month against 30 million
dollars a month a year ago-all for
the armed forces When the war
ends American industry must not
be without a chart for the future
Radio as an industry is fortuDate to have television as a postwar
development. There should be
no expectation. however. that when
the war ends the air will be transformed overnight to television. It
will require from 3 to 6 months to
get the machinery in operation to
resume the manufacture of civiliar
broadcast receivers It may require
A year before television set
available within the price range
from $200 to $300.
three times as much as the countrs's output average for 1935-39.
Electric
A once. turned out approximately
Westinghouse Electric & Manufac-
to a close production was at the
rate of 100.000 planes a year. In
laboratories and out of the skilled
technique of workmen come the
apparatus with which victory will
The aircraft industry. for in-
£0.000 planes. and as the year drew
1939, we made only 2600 planes.
Vast Naval Construction
Merchant ships estimated at 19
million tons left the Nation's shipyards, and naval construction "was
on such a vast scale it was forecast
that by July, 1944, the U. S. Navy
would have more than 41,000 vessels, representing almost 20 times
the 2136 it had in July, 1941.
Payment for all this torrent of
war materials boosted the national
income over the 150 billion mark.
The aggregate of corporate and
private savings bulged toward 100
billions a tremendous reservoir of
buying power for postwar years.
Taxes. boosted five and six or
more times prewar levels si-
phoned off something like 40 billions. but this was still below the
Government's original goal of pay-
ing at least half the war cost in
taxes.
George H. Bucher. president
turing Co.-From the research
be won Notwithstanding the
fact that in the first nine months
of this year we manufactured and
shipped more apparatus than we
did in the entire 12 months of 1942
our backlog of unfilled orders still
continues to be over billion
dollars. Reconversion of all our
plants to peacetime pursuits should
be accomplished in a matter
of
months.
Food
Clarence Francis. chairman. General Foods Corp.-War and weather
permitting the American food in
dustry expects to handle a record
tonnage in 1944 But if the industry produces and distributes
every possible pound of food there
still will not be enough of all kinds
of food in 1944 that people will be
willing to buy because food will
continue to be a maior outlet for
part of the increased incomes of
millions of Americans.
Says Reconversion Will
Depend on Success of
Major Offensives
JOURNAL OF COMMERCE
ACTION INDICATED BEFORE
19.
JANUARY 18, 1944
ARMISTICE IS SIGNED
JAN 18 1944
Industrialists at Meeting With
WPB Head are Reported
Pleased With Proposals
By HARRY G. BORWICK
WASHINGTON. Jan. 17.-A
group of the nation's leading industrialists received a pledge today that business would be given
the green light for a partial largepending major offensives on the
European continent has been
Industry Gets WPB Output Pledge
assured.
(Continued from First Page)
This pledge la understood to have
been made by Donald M. Nelson at
could be made available in the next
the widely-heralded meeting to
which top executives had been
few months by permitting Immediate reconversion of such plants
1 have completed their war work
summoned to review reconversion
problems.
Satisfaction Reported
While the official statement 1ssued by the War Production Board
this afternoon stressed the point
that "no general resumption of civ-
Illan production' is possible now, it
Was reliably learned that Mr. Nel-
son and Charles E. Wilson. vice
chairman of WPB, had given the
would in any case H small: and
that It is the course of prudence
to hold such facilities in reserve
against the possibility that our
landings might encounter more se-
Flous resistance than is expected
In that case, It is pointed out, manpower demands of the Army would
be such as to preclude any diver-
sion of labor to more than the
barest civilian essentials
With our biggest battles com-
On the other hand, many materi- is primarily R means of substituting
is which were then easy are now
steel. which is comparatively easy,
in the making of baby carriages.
very scarce. Consequently WPB is
making A number of re-substitu-
and is re-examining the various or-
terials and to meet essential elvillan
the use of all these materials is de-
infactory end product.
dera and controls through which
He emphasized that an easing in
the supply of a basic materialsuch as ingot aluminum-does not
to divert any substantial quantities
Immediately be thrown Into the
Europe had clarified the probable
less essential civilian production.
There certainly cannot be any re
turn to volume production of lean
essential goods until the war picture is A great deal clearer."
after the prospective landing in
course of the war.
It was emphasized here that the
discussions today were of A general
character and that no specific programs were brought under review
Nevertheless, the meeting. as well
as others that are to follow. is expected to dispel the fears that had
been voiced in industry quarters
that reconversion planning would
be delayed needlessly by those in
authority in the capital.
While there has been considerable
of materials, labor or facilities to
Mr. Nelson explained that the situntion respecting raw materials ha
changed substantially since many
of the controls affecting non-military production were originally de
vised. Some materials which were
extremely scarce A year or more
go are now comparatively easy.
disappointment recently over the
failure of WPB to move more
rapidly in the allotment of mate
rials for civilian goods, Life industri-
alists present at today's meeting
were described as well satisfied
with the approach towards recon-
version outlined to them by Mr
Nelson and Mr. Wilson
Won't Await Armistice
What was particularly reassuring
to those present nt the meeting. it
is understood, is the Implication in
statements made today that the
WPB does not intend to wait until
an Armistice has been signed be-
fore giving Industry the signal to
go ahead with reconversion.
Orice the landings in Europe have
been successfully mounted and
military leaders are able to appraise somewhat more accurately
the probable length of the enemy's
resistance to our advancing forces
WPH will be in position to deter
mine the volume of facilities and
materials that can be released for
resumed civilian manufacture
(Continued on Second Page
6
The official attitude appears to
be that the volume of goods which
days It will be followed by a similar
meeting with leaders of organized
labor.
of Itself bring a corresponding
easthg in fabricating capacity for
forward with its reconversion plans
"this emphatically is not the time
Today's meeting was one of the
number of informal consultations
on current problems. Within N fett
Example Given
Ing up" Mr. Nelson told the group.
group every reason to believe that
need for a more durable and sat-
termined
that material. Hence, while some
surpluses of certain materials do
Industry will be permitted to go
The net effect of the program,
therefore, is to save critical ma-
tions in the use of these materials
exist today, these surpluses cannot
production of consumer goods
On the contrary. It la necessary
to take advantage of the opportunity these surpluses present to relieve the drain on other materials
that have grown increasingly tight
during the past year
An example of this sort of thing
Mr. Nelson said. is the present pro-
gram to permit the manufacturing
of some 900,000 steel baby carriages, Far from being a "relaxa
tion" of the restrictions on civilian
Attending today's meeting were
J.
scale resumption of civilian manufacture as soon as the success of
L. McCaffrey International
Harvester Co.: Alvan Macualey,
Packard Motor Car Co.: James H.
Marks, Packard Motor Car Co.:
Eugene Grace, Bethlehem Steel
Co.: Henry M Reed, American
Radiator & Standard Sanitary Cor-
poration: A. W. Robertson, West.
inghouse Eelectric
Henry J. Kaiser, Kaiser Co.. Inc.
Tappan Stannard, Kennicott
Copper Co.: Fred Lazarus, Jr., F.
R Lazarus Co.: Otto Seyforth
United States Chamber of Com-
merce A H. Nicoll, Graybar Eleotric Co. Henning W. Prentis, Armstrong Cork Co.: Fred W. Nichol,
International Business Machine
Co.: Robert Gaylord, National Asproduction, he said, this program sociation of Manufacturers.
NEW
YORK
TRIBUNE
HERALD
MARCH 9. 1944
Nelson Warns return first to civilian production
our sole criterion will be the publie
Reconversion interest. Our decisions cannot
Be Fast
Tells
Business
tives
It May Take 6-8 Months
N. Her bure
After Germany Collapses
From the Herald Tribune Bureau
be expected to satisfy every business concern which they affect.
"It will not always be possible
for example, to give Identical-tre
ment to competitive concerns,
"In order to obtain early pro-
duction of items needed by civil-
lans, manufacturers in areas
where man power is available may
have to be permitted to resume
production of those items before
WASHINGTON March B-Don- power
areas."
manufacturers
in critical manald M. Nelson, chairman of the
War Production Board. warned
"Such decisions." the W. P.B.
two hundred of the nation's most chairman admitted frankly, "may
Influential advertising. business cause 8 certain amount of heartand newspaper executives tonight ache here and there: butif those
that it may be from six to eight decisions are demanded by the
public interest, they will be made."
Mr. Nelson's remarks were deliv-
months after the collapse of Germany before large-scale civilian
ered at a dinner meeting at the
Statler Hotel, following a day of
goods production can be resumed
Addressing a conference planned
conferences for the visitors In the
morning they heard off-the-record
by the Office of War Information
and the War Advertising Council
to convince the visiting executives
of the gravity of the war situation
talks by high military and naval
officers and in afternoon visited
nd discourage over-optimistic
Roosevelt.
the White House to meet President
"glamour" advertising of post-war
goods, Mr. Nelson declared that
It was reported that the morning session failed to impress the
"efforts to beat the gun on the
executives. Having come to Washreturn to civilian business will be
unavailing.' Their only result, he ington to hear genuine "inside
said. will be to slow up war pro- stuff." they were overheard to
complain that they had learned
duction. "No business concern
needs to become agitated now nothing they did not already know.
about Its position on the unknown
day he
when
der."
said.Germany will surren-
Noting that the nation is "better
prepared than ever before in its
history to anticipate the problems
that lie ahead, and to overcome
them by wise action." Mr. Nelson
said he "certainly would oppose
any attempt to put the post-war
jacket."
economy in & totalitarian strait-
"To regulate the peace-time
economy in detail would be to do
In the afternoon the visitors
were addressed by Mr. Nelson
Charles E Wilson, W. P. B. exec-
utive vice-chairman and other
W. P. B. officials. Mr. Wilson told
the closed meeting that any slack
in production facilities will be
taken up in the immediate future
by other war programs and by
essential civilian production. Mr.
Nelson advised the advertising
men not to anticipate any appre-
clable production of consumer
goods until the European war is
over.
Irreparable injury to the free-
In his evening address. Mr. Nelenterprise system in the United
States." he said. "Regimentation son admitted there have been
would almost certainly tend to "some weeds in every victory garchoke off new competition and to den' but praised both labor and
management for their performdrain away the personal initiative ance.
which has been and is a source of
tion."
ever-repewed
strength to the na-
Giving a hint of W. P. B. plans
for reconversion, Mr. Nelson said:
"In designating the areas and the
The armed forces are demand.
Ing more paper products than ever
and the supply is less. Save
this copy of the Herald Tribune
and every bit of paper to peed
plants which will be allowed toltory.
the waste-paper drive-and vic-
20.
NELSON ANNOUNCES
CONVERSION POLICY
by
Hi Times
For Switch to Cidihan Obtout
Where Possible but Plans
Curb on New Companies
MAR-1-0-1944
GIVES VIEWS TO MALONEY
NEW YORK TIMES
MARCH 10. 1944
Tells Connecticut Senator He
Opposes Permanent Limit on
Business Competition
New York TIMES
March
head
NELSON ANNOUNCES
CONVERSION POLICY
Continued From Page Twenty
terprise system in the United
"It my that
States
should
cease
Injury free
Continued on Page Twenty
22.
NEW YORK TIMES
JULY 16. 1944
Reconversion
Times
new engagement WAA fought In,
the Battle of Washington last week
At issue was the troublesome subject
of reconversion of Industry to civilian
production. The disputants were Donald M. Nelson, chairman of the War
Production Board, on the one hand and
on the other A group of military and
manpower officials Mr. Nelson had
advocated an immediate though limited
start on reconversion, fearing that IC
all industry were kept geared to war
until the fighting was over there would
ensue A period of economic vacuum,
including widespread unemployment
until factories and businesses could
shift over. His opponents had objected
on the grounds that any move which
took workers and facilities out of war
production would handicap the over-all
war effort.
TLI 16 1944
Before the engagement could develop
Into anything more than a skirmish
both sides threatening to take matters
to the White House or the Senate's
Troman committee, War Mobilization
Director James F. Byrnes ordered the
dispute ended, and in WPB's announce-
ment that the Nelson plan would get
under way at once it appeared that he
had won out.
The Nelson Plan
The details of this plan were contained in A set of directives announced
by Mr Nelson on June 19 and originally to take effect on July 1. One directive lifted some of the restrictions on
civilian use of the growing stockpiles
of magnesium and aluminum. Another
provided limited quantities of machine
tools for civilian industries. A third
permitted the development of a "mini-
mum number" of models of civilian
products for "strictly experimental purposes," and set up machinery to allow
manufacturers with facilities "not
needed for the war effort" to make
certain civilian articles. By the agreement reached last week all of these
orders are to stand, becoming effective
on various dates between yesterday
and Aug. 15.
In the background of the controversy
was the long-drawn battle which began with Mr. Nelson's appointment in
January, 1942 Basically this has been
a struggle between civilian and military authorities for control of the na
tion's wartime economy. Arguing that
y'ar production affected all phases of
civilian life and should be controlled by
A civilian agency, the WPB head won
the early rounds Then shortages of
materials became the principal problem. This WAR met by increased pro-
duction, priorities and by rationing
More recently, AS the nation found itself overstocked in certain war goods
and curtailments began, the problem
of reconversion developed. In this Mr.
Nelson's task has been complicated by
the fact that the principal shortage
now is In manpower in certain critical
lines. Some Government circles have
feared that even limited reconversion
at this stage of the war might arouse
more "cut-back jitters" and CAUSE a
rush of war workers to etvilian industry.
NEW YORK HERALD TRIBUNE
JANUARY 27, 1944
Maverick Says
He Will Assist
Small Business
NY HERALD TRIB.
Promises Agency Will Help
to Make Raw Materials
and Surpluses Available
JAN -07 1944
A pledge that the Smaller War
Plants Corp. will under his leader-
ship aggressively seek to "get
things done" for small business
was made by Maury Maverick
newly appointed chairman of the
war agency. in a press conference
yesterday at S. W. P. C. regional
offices in the Empire State Building. The agency. he asserted, intends to take the lead in making
available to small plants the increasing supplies of raw materials
as they become available and the
allocation of surplus materials and
equipment. not "just as an adjunct of the War Production Board
but as an active proponent of the
enterprise."
Urges Reconversion Plans
Mr. Maverick said that it was
essential for small business to con-
sider reconversion to civilian production now. and urged that "we
start talking about it and planning
now The S. W. P. C.. he said.
has extended its planning in this
respect to such matters as termina-
tion of contracts. financing for
small business during reconversion.
an post-war production, although
actual policies on these topics have
not yet been formulated.
Discussing his immediate plans
for applying the theory of private
enterprise in S. W. P. C., he de-
clareti
"I think we should have the
power to get allocations to-certain
concerns that would not get them
otherwise. And I am going to see
that we get representation on all
those Washington committees, and
mean all of them."
Calls for Free Enterprise
"If we've got a capitalistic country. we've got to be free for enter-
prise. and that's what I'm for."
Mr. Maverick added, explaining
that "small business should have
tain advantages."
"In other words," he continued,
I propose we do for every small
business man what we've done for
the farmer. One thing I've been
attacked for but will advocate is
that there should be technical and
going to interfere with private
enterprise but help it."
He said that he was against car-
tels, dividing of markets, trusts,
and cutting down production to
keep up prices.
I
scientific advice made available
for the small business man.
don't mean by this that they stop
private research, and this is not
THE CHRISTIAN SCIENCE MONITOR
SEPTEMBER 15, 1944
Maverick Wants Reconversion
Of Small Plantsto Begin Now
for The Christian Science Monitor
B+
NEW YORK Sept. 15 - This started yesterday, TS imperative,
country must begin reconverting
now, Maury Maverick, Chairman
of the Smaller War Plants Corporation, declared here yesterday
while outlining a 10-point pro-
gram to start things moving toward
his postwar goal of 1,000,000 new
business concerns in the United
States.
Spot authorization of materials
is a fraud unless you have something to do it with, Mr. Maverick
said at a press conference during
the meeting of the Research Institute of America at the WaldorfAstoria Hotel, suggesting that the
release of materials, "just around
the corner." should go first to the
little businessman.
His program calls for the acceptance of the principle of free
enterprise and private initiative
by the American worker. farmer
and businessman, but along with
it the principle of governmental
responsibility, which includes "as
many reasonable laws as are
necessary."
Mr. Maverick deplored the
tendency in some quarters to "let
business alone" and to "keen poli-
tics out of business and indus-
try." asserting that the result
would be the destruction of all
competitive business as it is now
known, financial chaos, unemploy.
ment and economic collectivism.
Lashes at Cartels
He lashed out at monopolies
and cartels. urging that the Department of Justice expand its
present program of prosecuting
illegal restraints of trade. Honest
big business wants this, he said,
and small business must have the
freedom from unlawful combinations and restraints
"The war has revealed that our
national safety was threatened by
the existence of German cartel
arrangements with American con-
cerns," he added "Let us have
nothing to do with cartels except
to wipe them out."
This country can look ahead to
full production, high wages, low
costs and expansion so that all
business can move ahead and ex-
plore new fields of economic ac-
tivity, he declared Capital will
flow into dozens of industries it
competition is free.
Recalling that when Germany
is defeated, there will be 30 per
cent or more in cutbacks Mr
Maverick told the businessme
attending the three-day conference that meantime civilian pm
duction must get under wa
"without further talk-talk.
"Speed into reconversion of Iit
the business. which should hav
so as to prevent a dangerous leg
in production," he warned. "SG
emphasize, let small business start
in civilian production imme
ately."
Pockets of Surplus Labor
The more production that can
be begun now, the more it will
cushion the concussion of reconversion. he asserted stressing that
in some areas today there are
pockets of surplus labor while in
others there are surpluses in materials, Bring the two together. he
said,
He praised the Government
Contract Settlement Act, stating
that without it all business, big
and little would face confusion
and widespread bankruptcies. No
expense, he said, should be spared
in makips it possible for the machinery of this Act to move with
utmost speed.
Mr. Maverick proposed the establishment of policies concerning
disposal of all types of surpluses,
adequate financial opportunity for
small businesses including interim
financing and reconversion loans:
a tax program to encourage venture capital a system of technical
advisory assistance. aid to vet-
erans in setting up businesses, and
reasonable unemployment compensation.
Tomorrow's sessions of the conference will include panel discussions of the future of small business, contact termination, reconversion and postwar planning palicies. James V. Forrestal, Secre-
tary of the Navy. will make an
off-the-record talk to Institute
personnel on Saturday.
JOURNAL OF COMMERCE
25.
FEBRUARY 9, 1944
Action Is Taken to Assist Conversion of Small Plants
FEB 9 1944- PS
Finance Corporation Under Federal Reserve
Journal of Commerce
(Bureau of Journal of Commerce)
WASHINGTON Feb. 8 Congressional champions of small business
contend that prewar competitive
relationships should he disregarded
In determining the fole that small
plants are to play during the early
stages of reconversion
The Congressional attitude was
reflected today in statements made
by Senator James E Murray (Dem.
Mont.) chairmen of the Senate
Small Business Committee, and by
Senator James E. Mead (Dem..
N. Y.J. an active member of the
committee
With some Industry opinion veer-
Ing to the belief that the surplus
disposal program for the benefit of
small plants has been held up by
inability of WPI to reach n definite decision on the question of
fished withcut the necessity for
Congressional appropriation or the
creation of a new agency.
The working capital of the cor-
poration would be secured by the
transfer of funds now held by the
Treasury Administrative and op.
erating personnel for the corporation would be obtained from among
the trained staff of the Federal
Reserve System. Similarly, office
space and other facilities of the
Federal Reserve System would be
used by the corporation Thu providing quarters in each Federal Reserve District as well AN in Wash-
ington."
2. The Small Business Committee
has under consideration A bill to
extend the life of the Smaller War
Plants Corporation and broaden I's
leading powers to include reconver
night termination loans.
MW hear considerable talk now.'
Senator Murray said, "about the in-
equity of permitting small plants
to resume civilian production while
the big plants are still tied up in
war work It is Argued that It
would be An unwise and unjust pol-
preserving prewar competitive con ley to permit the small civilian
aitions. the matter took on brond
goods manufacturers to reconvert
legislative possibilities today AS while their big competitors in the
Chairman Murray warned that
same field are still tied up in war
program must be laid down at once production,
to encourage resumed civilian man.
ufacture by small plants.
Also disclosed by the statements
of the two Senators were the following
1. A measure has been drafted by
Sonator Mead for the creation of
n small business finance corpora.
tion within the Federal Reserve
System to serve AS a permanent financial foundation under the small
business structure of the country
"Through this corporation." Senntor Mead said, "small business
could Fecure working capital funds
for periods up to ten years. Moreover. there ends would be accom
This argument is designed to jus-
tify A policy of preventing small
concerns from engaging in civilian
production until the big concerns
are also able to resume. It is quite
AS unsound RR the former argument
that war production program
exclusively for big plants.
"When I he Congressional small
business committees made A strug-
gle to indduce the War Praduction
Board and the Procurement Agencies to give small plahts A part In
the production program, we were
told that the country was in a des
perate war-that the War Produc.
Lion Board and the war agencies
had to get production where they
1111 pet It quickly.
"They said that small plants
should be regarded as casualties of
the war. They said that the War
Production Board and the war
agencies should not be expected to
serve as relief agencies for small
business and thereupon proceeded
L build $16,000,000,000 worth of
new plants over the country.
"No effort was made to utilize
the existing facilities in the small
plants, a program which would
have rendered unnecessary a large
part of The costly plant expansion
which took place. In other
no regard was given to the o
quential effect of our war pr
tion policies on small busines
V
Mead Bill Asks Special
CONGRESS ASKS
LAWS TO SPEED
RECONVERSIONS
Sur
Demands for Legislation
Are Heard as
Result
of Brewster Trouble.
NEW YORK SUN
JUNE 1. 1944
The difficulty, however, was
that if these workers were neat-
tered about the country in other
jobs: the local union at Brewster
would be broken up, and would
lose its revenue from dues. Likewise, the company had no other
work which would utilize fully
the facilities of its plants. Both
labor and manage there ore,
joined in appeal that the Gav-
ernment provide other work of a
BARUCH REPORT NOT ACTED ON
similar nature for the Brewster
plants, machines and men. In an
election year, this appeal fell
thing Yet Done to Carry Ou
Necessary Steps Outlined
for White House. B5
By PHELPS ADAMS.
Special to THE New YORK SUX.
The York
Hum June 1.
Washington
Demands for the speedy enact
ment of legislation to facilitat
Industrial reconversion wer
voiced widely here today as of
ficials of the War Production
Board sought to assure work
for the New York plants of the
Brewster Aeronautical Corpora
tion "Though several months have
elapsed since Bernard M. Baruch
sent to the White House his com
prehensive report outlining the
necessary legislative and almin
istrative steps leading toward
prompt Industrial demobiliation,
little real progress has beer made
here in setting up the machinery
through which reconversion may
be effected as war plants fall
idle
The lack of preparation has
been dramatized by the "sit-in"
strike of workers at the Brewster
plants, following the Navy's announcement that the company's
contracts for the manufacture of
Corsair planes would be can
celled on July 1.
Other Jobs Available.
The situation as announced by
the Navy at the time of the con
tract cancellation WRS that it had
Averestimated the need for re
placement of these planes and
that it no longer was necessary to
use the full output of the three
companies manufacturing them
Since Brewster's production costs
were higher than those of the
other two companies, it had been
with powerful effect upon admin-
istration agencies at Washington,
but Instead of finding a new con-
tract for some vitally necessary
war material, or for essential
civilian goods which would help
to combat the inflation menace
the WPB has hit upon a solution
which in the opinion of many
persons here, has the essential
characteristics of a "make-work
statement
For the present let me say
that this Navy statement is only
half truth," he said. "They do
not tell you that when product
tion at Brewster had reached the
600th plane, the Corsair was be-
Ing made at a cheaper figure
than at the same production fig.
are at the other plants. We have
no objection to the Navy trying
to save its face after their bung
ling and their miserable handling
of this situation, but the Amer-
can people are not fooled
The Navy said that for three
years it had carried almost the
Legislative Efforts Intensified
The incident has served, it ap
pears, to Intensify the efforts of
the sponsors of Industrial recon
version legislation Senator Wal
ter F. George, of Georgia, chair
man of the Senate's Post-war
Planning Committee, and Sena
tor James E. Murray of Montana
that it had guaranteed a V-loan
variety.
introduced yesterday an
entire load of financing Brewster:
of $55,000,000. on which $25
000 is now outstanding whereas
the company's total capital funds
amount to only $2,600,000. and
that the Government built 1.700.-
000 of the company's plant facili
ties, as compared with $1,800,000
spent by Brewster.
The Navy has no interest in
amended version of their Indus-
putting Brewster out of bust
ness." the statement said "Its
Senator George made an urgent
every interest is to the contrary.
But the Navy must have regard
trial demobiliation bill. while
appeal to-his colleagues to expedite action on the measure to
avoid repetition of the Brewster
"sit-in" strike.
At the same time, the State
Governors in the closing hours
of their thirty-sixth annual conference, at Hershey, Pa., adopted
resolution calling upon Con-
gress for immediate action on re-
conversion plans and policies,
with emphasis on the orderly deobilization of workers and the
speedy termination of contracts
and clearance of plants.
Brewster May Make Parts
An engineering survey of the
Brewster Aeronautical Corpora
tion's plant in Long Island City
will be studied today by War
Production Board experts sent
from Washington to determine
the practicability of a plan for
the firm to produce aircraft parts
for the Chance-Vought and Good
year companies, which are still
manufacturing Corsair fighter
planes for the Navy
In justifying its abrupt termi
nation of the Brewster contract,
the Navy issued a detailed his
tory of its relations with the company, and pointed out that cur
would have no difficulty in find
ing essential jobs for the 12,500
Brewster workers displaced by
plane, exclusive of engines and
the Navy's conce la
Brewster employees, said that
he was preparing a detailed
proposition of the old WPA
decided that the Brewster contracts should be canceled. It also
was pointed out that Brewster
and
had no other naval contracts
no prospect of getting any
Meanwhile other
agencies are understood to have
informed the Navy that they
26.
rent production costs per Corsair
after giving Brewster the most
favora ble treatment were as fol
lows: Brewster, $72,000 Good
$57,000. Chance Vought
$63,000. The comparative figures
year,
on man-hours required to pro-
duce each plane were announced
as follows: Brewster, 9,800
Goodyear, 6,700, and Chance
Vought, 4,700
Reached at the Hotel Edison
here Richard T. Frankensteen, in
ternational vice-president of th
United Automobile Workers, C.I
Q., the union representing th
to proper use of the taxpayers'
money. To buy 250 additional
Brewster fighters, as has beer,
ungested would mean spend$18,000,000 to $25,000,000 for
planes we do not need
Byrnes Urges
Quick Action
On Contract
Termination
Recess, Speed on
Other Measures
BYRNES
For Reconversion
JUN-18
6.
Army Will Demobilize
Fighting Fathers First
28.
WASHINGTON POST
JULY 10, 1944
Netson
Retort Expected
From Page 1.
WPB Speeding Reconversion;
Showdown
With Military Near
JUL 10 1944
By Felix Cotten
BS
International News Serolor Stag Writer
Four orders for gradual reconversion of industry to peacetime pr
of restoring the Nation's economy
to a civilian production basis, were
night as two factions of top-ranking
Government leaders braced themselves for a showdown on the question of putting them into effect,
Chairman Donald M. Nelson of
the War Production Board, it was
learned, probably will reply in the
tee of the War Production Board
Saturday, it was learned.
This is one of the last steps be.
fore putting orders into effect, and
unless a road block is thrown in
the way of the orders, they should
be issued in the next day or two.
duetion were in final stages last
sent to the order clearance commit-
next couple of days to the letter officials explained.
In view of the protest of the
from the joint chiefs of staff viewing the proposed reconversion or- joint chiefs of staff, uncertainty
ders with alarm.
Meanwhile, Sens. Harry S. Tru-
man (D., Mo.), chairman of the
Senate Committee Investigating
Progress of the War, and James E.
Murray (D., Mont.), chairman of a
Senate Military Affairs subcommittee at work on reconversion legisla.
tion, said they would back Nelson
P
to the limit.
The reconversion orders, In-
tended to start the enormous task
CIVILIAN
exists as to whether the orders will
be issued. immediately. There was
a possibility, officials said, that the
matter might be placed before
President Roosevelt for decision,
although War Mobilization Director James F. Byrnes has approved
the orders.
Those opposing the reconversion
move are Army and Navy leaders.
who are fearful of the effect on
See CIVILIA Page 14, Column 5.
war production, and Paul V McNutt. chairman of the War Manpower Commission, who feels that
new manpower controls might be
destroyed.
Nelson, in a fighting mood as he
props up in bed during his con-
valescence from pneumonia, does
not intend to let the battle drag.
it is said. He is expected to dictate a bedside reply to the letter
from the joint chiefs of staff.
Murray Would Seek Law
Senator Murray said that, If
necessary, he would introduce in
the Senate a bill to put the Nelson
reconversion program into operation.
Truman declared that, if the
orders were blocked, his committee would hold hearings "to see
that the facts get before the
public." He added: "We have
been making a full Investigation
of this whole matter, and we shall
act unless something is done."
Murray declared opposition to
the reconversion program came
from big industrial interests which
"do not want to see smaller concerns resume civilian production
while they are tied up with war
contracts."
Army and Navy officials, he
said, "unconsciously reflect this
viewpoint." This is natural, he
observed, since "they look to the
big manufacturers for most of the
war production and rely on people
who represent their viewpoint for
advice on economic matters."
Unemployment Feared
Murray quoted Dr. Melvin T.
Copeland of Harvard University as
saying millions of persons would
be thrown out of work if recon-
version should be delayed until all
manufacturers got an even start
in manufacturing civilian goods.
The pending WPR >econversion
orders would provide for the following:
1. Make surplus quantities of
aluminum and magnesium available
for civilian production.
2. Allow manufacturers under
certain conditions to make experimental models of civilian goods.
3.' Permit manufacturers to place
orders for machine tools for civilian
production on a deferred delivery
basis.
4. Grant manufacturers the right
to resume civilian production
where A "spot check" by WPB
regional directors showed that
neither manpower nor materials
needed for the war effort would
be used.
29.
WASHINGTON POST
MARCH 1, 1944
B
Tucker Urges
Reconversion
Plan Action
1-01414
Goodman
Immediate action on the BaruchHancork reconversion plan was advocated by Arthur R Tucker man-
aging director of the Controllers
Institute of America at a meeting
of the District of Columbia Control
last night in the Carlton Hotel
The technical details of carrying
out the procedures suggested in the
port will fall on the shoulders of
controllers, Mr Tucker said. adding
that regardless of whether the
Baruch-Hancock plan is effectuated
by directives or by legislation "the
important thing for business and
the country is to translate it into aclion now. Subject of Mr Tucker's
talk was "What the paruch Plan
Means to the Controller."
Quoting the phrase Unemployment by Audit which appeared in
the original report. Mr Tucker un-
derscored the authors warning
against detailed review of every set-
tlement by the Comptroller Gen-
eral before payment
"Messrs, Baruch an. Hancock,"
he said, "made it perfectly plain
that this bottleneck should not the
tolerated In their own words, if
such an audit before payment were
decreed. no war contractor would
know where he stood Prime contractors would be unable to pay sub-
contractors banks would be reluetant to make adequate loans. and
billions in working capital would
be frezen. The delays in settlement
could force many concerns into
bankruptcy It would mean unemployment by audit."
Although the urgency for making plans now for tackling the job
of conversion was conceded by all
three speakers, they disagreed
NEW YORK TIMES
,
MARCH 17. 1944
markedly on the nature of the
planning they proposed. Mr. Kaiser
held that the principal responsi-
bility for planning must rest
squarely on management, Mr
Johnston called for "clear definition of the rules of the economic
game" to enable business to make
its plans. Mr. Reuther contended
that Government coordination and
direction of the process would be
KEY TO FUTURE SEEN
PLANS MADE NOW
FOR RECONVERSION
MAR IV
Kaiser, Johnston and Reuther
Demand Action to Avert
Depression After War
DIVIDE ON RESPONSIBILITY
I.
But Call for CooperationAmong
Their Groups and Government
as Possible and Desirable
essential.
Despite their differences, however, the speakers agreed that
America need not fear the future
If it approached the problems that
lle ahead with courage. resolution
and foresight. They avowed a com-
mon belief in the possibility and
the desirability of cooperation
among labor. management and
Government.
Stresses Fighters' "Morale"
Mr. Kaiser, declaring that the
theme of the meeting, "Conversion
Without Depression." was "a second call to arms," said that one of
the most important elements con
tributing to the morale of ou
fighting men was their belief tha
the United States would again pro
vide them with "an abundant op
portunity to live the good life.
"Again and again it has bee
said that we can win the war an
lose the peace." Mr. Kalser said
"In a definite sense this would b
almost as great a tragedy as de
Agreement that we must begin
to plan now for the conversion of
America's huge war industries to
peacetime activities if we are to
have depression and unemploy
avert a post-war depression was ex-
ment. When I say this I am no
pressed last night by one of the
foremost Industrialists of the
United States, by a spokesman for
the organized business community
and by R prominent labor leader at
a meeting in The New York Times
Hall, 240 West Forty-fourth Street
The speakers at the meeting. one
of a series that has been arranged
by THE TIMES on the topic "AmerIca Plans and Dreams." were Henry
J. Kaiser, president of the Henry J.
Kaiser Company: Eric A. Johnston
president of the Chamber of Com-
merce of the United States, and
Walter P. Reuther, vice president
of the United Automobile Workers
of America, an affiliate of the Con-
gress of Industrial Organizations
Speakers Questioned From Floor
Arthur Krock, chief Washington
correspondent of THE TIMES, pre-
sided over the meeting and at the
close of the prepared addresses
conducted a panel discussion in
which the speakers answered ques-
tions from the floor. The first
part of the meeting. from 8:30 to
9:15 P. M., was broadcast over
Station WMCA.
feat. The truth is we dare no
thinking of the oft-repeated threa
of revolution. It is altogether to
easy to raise that bogy agains
everything which we do not hap
pen to like. I have in mind ou
solemn obligation to provide op
portunity for all who want to take
part in the rebuilding of the Amer
can economy.
Conceding that the timing of reconversion Was exceedingly diffi-
cult just now, when a gigantic
military offensive is impending
Mr. Kaiser nevertheless contended
that planning for it must not wait
Warning that the necessity for
reconversion might come upon us
with little advance notice. he said
it might catch us as unprepared
as we were at Pearl Harbor.
Mr. Kaiser declared that it was
generally admitted that the peak
of war production has passed
Stockpiles have begun to appear
he said, and war contracts are be-
ing terminated every day. The
manpower shortage has been sub-
stantially relieved by the increased
efficiency of war plants, he said,
and "the shadow of unemployment
darkens the rim of the sun."
"I wish I had the eloquence and
the power to persuade, every
authority and everyone who hears
my Vace to observe the danger
signals which are now apparent,"
Mr. Kniser said. "It in a grave
mistake to suppose that reconverContinued on Page Twelve
"Hetors Are Madeâ„¢ Newrat Ressian Film
Now Stanley Theatre, 7th
LANNING NOW SEEN
KEY TO THE FUTURE
Continued From Page One
sion can await the declaration of
peace. It could be a tragic blun-
difficult phase of the transition management. labor. farmers and
from war to peace would be in
consumers, with authority to plan.
psycholog (ce) conversion
Clear definition on the rules of
the economic game at the earlies
possible moment should go far to
ward
this converhe said Until they are esdogged by fear and uncertainty
There are those who have busi-
and therefore for mulpreserve
der
Mr Kaiser pointed out that even
while recruiting for the armed
There
are
those who plan to start new busi
and therefore to create new
organize and direct the conversion
of our war economy into peace
production "so as to achieve full
employment He
should have authority over
stribution
well.
as
Maintaining that political decannot survive without
democracy Mr. Reuther
that the Peace Production
Board should establish industry
councils in each major Industry.
forces is still going forward, more
jobs, They cannot act so long as
than 1,000,000 men have already
composed of represents lives
management, labor and the con-
they will have to contend with Government competition: or with puni-
dustries, and of representatives of
additional 750,000 would join them
monopols
been returned to eivilian life and
that there was evidence that an
by the end of 1941. He said that
the tempo of réconversion must be
quickened as the need for war production declines
Our planning cannot be solely
along material lines. Mr Kaiser
asserted "One of the prime essen-
tials will be the will and the cour-
are paralyzing fears that
economic organization. There must
be the forthright recognition that
n R machine age. the great mass
of humanity 'must work for wages
This is not to may that the chan-
nels of opportunity for individual
enterprise will be closed: but mass
production under power-driven ma
chinery clearly delimits the types
of business organization which can
prevail.
Therefo the principal re-
sponsibility for post-war planning
must fest squarely on management Experience will weigh heavi-
ly in that next great upswing of
economic and material progress.
Mr. Kailer said that a vast army
of men with managerial skill would
emerge from the war. after having
acquired superb resourcefulness in
pressures
from
important goal was the restora or
tion of workers to "steady, well- Industries. or in those strategic to
paying jobs at the earliest possible national welfare and defense. He
He said that must said the Government should lease
knowledge
our
supply
and
of
job
"Let's go back into the risk busi-
the hazards of enterprise and do
labor
opportunities
jobs must
be"Remember,
found too.
forthat
the
"vet-
he said and
retraining of the veteran must be
geared to the objective of fitting
the veteran into norma civilian
life-either as job-holder or as a
job-maker. Veterans do not want
handouts; they want opportunity
Mr. Johnston called for the es-
tablishment of procedures for
prompt settlement of war contracts for formulation of policy
or disposing of Government in-
dustrial plants and equipment that
he estimated have added e-third
to our industrial capacity. and for
agreement on a policy for dispos-
ing of "roughly $50,000
worth of Government mate-
rials and supplies He said that
local communities should not bring
pressures to bear to keep all these
He called also for revision of the
"risk-taking and between labor and
for
management. resting on mutual
Mr Johnston, maintaining that
America and capitalism are synonymous, said that the individual
American had found a competitive
capitalistic society to be "the most
stimulatim to his creative
stinets He held that the individ-
ual Kan the key to economic ac.
complishment
The problem is to remove arti-
ficial shackles on his creative ener-
RV: to rule out regulation that acts
straight jacket on ambition
invention,
on
economic
venture
and technological pioneering to re-
store normal human incentives of
for
for
with
of
sumer.
Stresses Need for Housing
Declaring that housing must be-
No. post -war
Industry. Mr. Reuth said that
every narrow vested interest that
has blocked technolog ical progress
in this field must be brushed aside.
He said that the full application
mass production techniques
advanced technology would make
available good housing -tow cost
to millions of Americans now de-
nied them He proposed the con-
version of government -owned aircraft plants to the bass product
of -costproposed
homes
the crea
Reuther
Mr.
tion
the
of
rategic job reserve"
form of a far-flung public
works
program to include housing
hospitals
schools. recreation centera, flood control and powel devel-
opments rural electrification wa.
terways,
ighways and airports,
recognition of common interests
Reuther Demands Action Now
Mr. Reuther warned that peace
heroic job of building This was would find the nation equipped
the spirit of America Can it be with the greatest productive CR
pacity in its history, but that eco
any less so today Every fighting nomie
chaos and mass unemplo
man is listening for the answer.
ment would follow unless plan
In ba{tle, yes, and in sacrifice
were made now for utilizing thi
they know that America will not capacity. He declared that our ex
perience In two world wars ha
fall short of the promise which she
is 80 abundantly able to fulfill."
Johnston Hails the Individual
facilities
Industry
production,
civilian
private
give flexibility and mobility to guarantees to protect the rights
Government, labor and the con-
entire tax structure to
ness, he concluded. Accept all
As for the disposal of Govern-
Calling for strengthening State ment plants and facilities. Mr
unemployment insurance laws Reuther urg that the Governwherever it is practical and neces ment should operate as yardsary. Mr. Johnston said that the stick Government-owned plants
called for entrusting to these young
and vision. the major task of post-
ernment in the case of Industries
processing such national resources
as coal, oil and lumber
Calls for Steady Jobs
plants operating after the war
war construction.
any
source
that most difficult of all fields. He
men with their vigor. enthusiasm
sumer in the case of consumer in-
tive taxation: or with threats of labor. and the Gov-
age to labor together within the
framework of our political and
of
proved that "without Governmen
initiative the effective mobiliza
tion of our national economic If
and productive effort cannot b
achieved
He proposed the creation of
Peace Production Board compose
representatives of Government
conservation projects and other
methopes. "Finally! wetechnic
must see to it that
our
tremendous
works for democ and dobs.
not
lovment.
for
reaction
and
Mr. Reuther said. "The Peace ProBoard should
duction
procedures for the universal appli-
cation of a thirty-hour week With
the full realization of our produc-
tive potential a thirty-hot
can easily be the productive equive
alent of our pre-war forty hour
week Post-war security to the individual worker must be based
upon & guaranteed annual living
wage
Mr. Reuther declared that too
often "free enterprise has mean
business ass-as-usual, unemployment
as-usual and human insecurity
usual.
He said that we should atsystem of cooperative en-
reward and pliahment, Mr
tempt
based upon the assign
terprise
Asserting that the conversion of
machines- and materials to peacetime uses would be relatively sim-
bilities to ownership ement
ple and could safely be entrusted
to American mechanical genius
Mr Johnston said that the more
a
Johnston con tinued
ment of certain pecific responsiabor and government.
FOR START NOW
NEW YORK TIMES
ON RECONVERSION
MARCH 23, 1944
MAR Z'S I
son Tells Post-War Inquiry
raction of Materials Can
Prepare Peace Basis
Y.
y KATHLEEN M'LAUGHLIN
Special to THE NEW YORK TIMES
ASHINGTON March 22
ries E Wilson. president of the
eral Motors Corporation. recmended today to the House's
cial Committee on Post-War
icy that the reconversion of intry begin immediately rather
in on the day of armistice.
Necessarily. he conceded it
uld have to be done on a small
le. but he insisted that the imtance of+that fraction of the ef
t indispensable to a return to
rmal production would be out of
proportion to its volume. He
timated that one-tenth of 1 per
nt of critical material, diverted
experimental purposes. would
enough and could be spared at
is time. "The first ten of any
oduct are the hardest to make,
said. "Ten multiplied by ten
sily makes a hundred, but ten
mes nothing is ill-nothing.
The committee. of which Reprentative M. E. Colmer of Missisppi is chairman was told that
an drawn up by executives of
eneral Motors Corporation for
stematic conversion of its plants
ill be submitted to it.
New Machine Tools a Problem
The immediate and most serious
ottleneck in the automotive inlustry, Mr. Wilson said, will be
nachine tools. There will be an
cute need for 3.500 to start, he
said, without which nothing can
be manufactured, and later at least
5,000 will be required. Of 60,000
belonging to the Government and
now in plants, he reported, a rough
check has shown that about 15,000
are probably adaptable. The oth-
ers are too large, too small, or of
the wrong design.
General Motors' plans, Mr. Wilson disclosed, include the develop-
ment of ten more plants immediately after the war. These may be
set up in buildings taken over from
the Government, or in new build
Should Germany be defeated and
the country was left at war with
Japan only. Mr. Wilson thought
that from 50 to 75 per cent of the
war contracts might be canceled,
with the implication that produc-
tion power might be transferred to
civilian needs.
The witness said he believes that
the present level of steel production could be maintained after the
war, and supply enough material
for a 50 per cent expansion of the
durable goods industry for the
country as a whole.
Uses Much More Steel in Peace
General Motors, he revealed, is
using considerably less steel in war
production than during peacetime
-having reduced its monthly con-
sumption from 250,000 tons to
75,000.
The whole matter of post-war
production," Mr Wilson said,
"comes back to whether the people
are willing to work for what they
want. I do not think they will
want to work as long as they have
been doing so, we were certain-
ly wrong in initiating the fortyhour week The thing industry
fears is that rules, regulations and
paper
the
job. work will get in the way of
Thirty-five thousand of the General
Motors said
employes are women,
Mr. Wilson
The women in our plants are
making a great effort to qualify.
he declared, and their attitude
makes up for a good deal, Whether
the romance will go out of the
work after the war I do not know.'
"Do you contemplate forcing
women out of Industry? asked
Representative Francis E. Walter
of Pennsylvania
"It is not our policy," was the
reply. "to force anybody to do any-
thing. We anticipate that a good
many of these women will voluntarily leave as peace comes, to go
back to their own homes or into
other things."
10,000 Veterans Now Employed
General Motors, he said, has
taken on about 10,000 demobilized
soldiers, of whom 3,500 had previously been employed
To date. the corporation has had
about $800,000.000 in war contracts
cancelled,
"some of which
delighted
us.
will call for an investment of $50.
For instance." he said, "there
was one for anti-aircraft guns to
protect Washington, New York
400,000 against a peak of 01,000
in 1939 was expected. he said, exclusive of 200,000 in the distribut-
raids that never happened I
ings erected for the purpose. They
000. an eventual payroll of
ing field.
The number of employes on war
work. he added, is 465,000 in this
country and about 400,000 abroad Wol-
Representative Charles A.
verton of New Jersey asked how
General Motors people will be em-
ployed in the transition. A major
factor. was the reply. was as great
reduction as possible in how Con- long
transition takes Members
gress could contribute to aving
time by supporting the efforts of
manufacturers to obtain the mate
rials and the machines they need
for quick conversion.
and other cities from the bombing
made
us pretty happy to get that
one off the books
In an interview later, Mr. Wil-
son said not to expect any radical
change of design in the first auto-
mobiles produced after the war
due to the difficulties involved in
redesigning
"We will give them some improvements, he prophesized, "be
cause practically for the first time,
our customers have had their cars
for three years running, and they
have had a chance to know more
about them than ever before. Consequently We have had some good
suggestions on changes.
WALL STREET JOURNAL
MARCH 7, 1944
MAR
1044
Quotas US. Production
Between the third annual report of
the Senate's Truman committee on the
national defense program (now become
a committee on conduct of the war on
the home industrial front) and certain
recommendations of the Baruch-Hancock report on reconversion procedures
there is at leas supparent conflict.
The committee wants industry to re-
turn to unrestricted production of
civilian goods as rapidly as materials
and manpower not needed for the war
permit. The Baruch report asserts
that "no manufacturer should be
allowed to jump the gun on his competitors" while the latter are still busy
with war contracts, but that this rule
should not be allowed to hold back production of needed civilian goods.
Here is a significant difference in
emphasis. The committee puts civilian
goods production first while Messrs.
Baruch and Hancock appear to regard
some sort of equalization of competitive opportunity among manufacturing
units as the more important thing. The
War Production Board's advisers are
attempting to work out a pian which
will deal equitably among competitors,
release full civilian production and in
wise interfere with the home war
effort.
#1]
We believe there
31
of thus equating competition without
in some it
more or less choking back civilian prois
duction. itself. The Perhaps equity in objective situations good
can be served without harmful effects
on production and employment. But in
general the quotas of permitted output
imposed to equalize competitive advantage would hold production below what
materials and manpower would otherwisc allow.
If some manufacturers must be held
in war production after competitors
have become free to go after the waiting market for their peacetime goods.
why cannot procurement agencies and
price adjustment boards take their re-
suiting disabilities into consideration
when they determine legitimate profits
on war work?, Such compensation
could only be roughly measured but
the results would doubtless com as
near to even-handed justice as any restrictive quota regulation. if not nearer.
We agree with the Truman committee that "There is too great danger that
such controls would be self-perpetuating, especially if the war should last a
long time." There is the further objec-
ion that they will not and cannot be
iministered with supernal wisdom.
MARCH 17, 1944
Journal of Commerce
Retailers and Reconversion
major interest in the rapid
of industry to the production without of cireconversion vilian goods, whenever this can be done The stand
with the war effort. Senate
interference the Truman Committee of the for
taken that industries by which are no longer needed
war work should be permitted to reconvert now,
contrary to the Policy being pursued by\ the
armed services and WPB, should strike A responnsive thord among retailers generally.
As inventories decline, retailers encounter
increasing
in the
While A seller's
their customers. difficulty satisfying market needs now of
prevails, and merchants can dispose readily of
many products they would not think of offering
in time of peace, they know that they run the
risk of losing good will if they offer more and
more substandard goods for sale. On
outputthe
of civilian
is other
hand, the
if goods
allowed
to expand AS materials, equipment and labor become available, retail stores would be sure of satisfying pressing needs of customers who are underreplacement.
more and more pressure to buy durable goods
for
version recon-
A reasonable program of industrial
now, furthermore, would hold down to
some extent the size of the backlog of accumulated deferred consumer buying. Any moderation of the postwar buying rush would obviously
help to abate the danger the inflation at that
time. This would help to make continuation of
price controls in the postwar period less necessary, for more orderly distribution conditions
J
would thereby be fostered.
These considerations should bring out sup-
port from retailers generally for the Truman
Committee's recommendation that reconversion to
peacetime production should not be postponed
merely because larger production of civilian
goods thight have some psychological effect upon
the intensity of the war effort.
BALTIMORE SUN
34.
JULY 10. 1944
Recon
Gen-Tangled
In
Controversy
If is a grave controversy which has
broken out in the War Production Board
over the timing of plans for reconvert.
ing industry to peace production. Chair
man Nelson and some of his top aides
feel that reconversion can be begun. in
what they consider guarded and modest
ways, as of now. What appear to be a
majority of his aides, however, with the
emphatic support of the chiefs of staff,
disagree. And the chiefs of staff even
suggest that the Nelson plan is "not
consistent with the all-out prosecution
of the non't more Sun
Senator Truman, in a statement some
what accusatory in tone which sides
If may be, then, as Senator Truman
says and as the chiefs of staff do not
are motivated in
on for
attack deny, that the they Nelson plans early their
reconversion by their hope that men
released from one form of war production would have to shift not to civilian
production but to other urgently needed
war production. But is this effort to
solve manpower problems by a some
what oblique route an altogether heinous
offense on the part of the service representatives? Is It not rather an inevitable
result of the Administration's long and
unemployed workers would result in
stubborn refusal to adopt any kind of
manpower policy which would directly
guarantee to war production the same
kind of adequacy in manpower as the
draft act gives to the military services?
Obviously no one would deny that an
some of them shifting to occupations or
areas in which there is still a [war pro-
early and clear policy for reconversion to
peace production is one of the neces-
with Chairman Nelson's, says that "the
army and navy representatives want to
create a surplus of manpower with the
hope that the consequent pressure on
duction) manpower shortage. In
other words, Senator Truman concedes
that manpower questions are at the
bottom of the row over reconversion.
Now, note that the Senator does not
deny that manpower shortages exist in
war production. He does seem to suggest that the army and navy propose
the wrong route to correct them. But a
decision on that point would be influenced to some extent by the gravity of
the shortages. If the shortages really are
grave and if other methods of meeting
them are lacking, perhaps the service
representatives can make a case for
their position.
As it happens we have recently had
clear testimony from the service depart-
ments on just this point. A week ago
the War Department spoke of damaging
deficits in production schedules involving such basic military items as trucks,
tires and steel. The War Department
assigned definite causes for the shortages in only one category-it said that
the steel deficits were attributable to,
"manpower shortages."
sities not merely for the peace but for
the later stages of the war. In preparing
such plans Mr. Nelson has surely served
the national interest. It is too bad, too,
that the reconversion issue has become
entangled with the manpower issue, that
the service departments should apparently feel compelled to seek a cure for
manpower shortages in resisting present
reconversion plans.
But surely the whole fault for the
situation does not rest with the service
departments. They have fought steadily
and hard for a national service act to
match in some degree on the civilian
front the draft act to which they look
for military personnel. If manpower and
conversion get tangled in damaging pub
lic controversy, some of the fault must
in and
Administration be shared by interests out of the
which so far have frus.
trated all efforts at a firm solution of
the home-front manpower problem.
MAY 3. 1944
Y. Herald ibune
Reconversion Legislation
Speakink before the Bond Club of New
York on Monday Emil Schram, president
of the New York Stock Exchange, urged
that the tax structure be revised without
delay in the interest of expediting the conversion of Industry from war to peace. It
will not be time enough to remove the tax
impediments to the free flow of short-term
credit and long-term capital after the
termination of hostilities, observed Mr.
Schram. "Business, large and small." said
he, "must know what the tax formula is to
be for the post-war period If It is to set up
Its budgets, allocate its funds and be prepared for the change-over to a peace-time
basis."
This is a point MAY S - 1944 stressed
too greatly. Much the same recommendation is made in the Baruch-Hancock report
on war and post-war adjustment policies.
Until It is definitely known, said that report, that post-war taxes are to be reduced
the launching of new enterprises and the
expansion of old ones will be deferred.
Not only Is there a complicated intercommittee situation in the House, but in
that body there is a tendency, apparently.
to make the Comptroller General the domi-
nating ,Authority In contract settlements.
The May bill. for example, would authorize
the Comptroller to make an audit of each
contract before final settlement, It would
be extremely unfortunate If the legislation
finally enacted should depart from the
Messrs. Baruch and Hancock suggested, as
sound proposals of the Baruch-Hancock re-
does Mr. Schram, that this problém be
tackled without delay. "A post-war tax
law." said they, "should be drafted now.
port on this Important point. The Senate
measure wisely restricts the functioning of
the General Accounting Office to the determination of fraud and of whether final
during the war, and put on the shelf, to go
into effect at the end of the war."
Mr. Schram's tax proposals come as a
reminder that, while there Is general agreement concerning most of the things that
should be done by way of preparing for
reconversion, Congress continues to be lam-
entably slow in putting these ideas into
legislative form. It was reported late last
week from Washington that the Senate
Military Affairs Committee had unanimously
approved a rewritten war contract termination bill and that it would recommend
"immediate action" on It this week by the
Senate. The measure represents a compro-,
mise with the Baruch proposals on certain
points, notably in providing an Independent
office of contract settlement, headed by a
Presidentially appointed director, Instead
of placing the work under the Office of War
Mobilization: but for the most part it fol-
lows the constructive recommencetions of
the report. In the House, unfortunately,
progress on termination legislation has been
less satisfactory. The House Military AN
fairs Committee and the Naval Affairs Committee have their own separate bills, while
the House special post-war planning committee, headed by Representative Colmer, is
considering still a third plan, differing In
many respects from those of the other two
committees.
payments have been made In accordance
with the settlement agreed upon by the
government and the contractor. Any compromise as among the several pending bills
in the House should follow the Senate
measure In this vital particular. The delays
in settlement that might result from Insistence on an audit of each settlement
before payment could, as the Baruch-Han-
cock report so well put it, "quibble the
nation Into a panic."
Reconversion
Shapes Up: WPB Gets Army Data on Plants
Jerm
To Be Freed for Civilian Output by Defeat of Germany
13
Byrnes Reveals a ToolingPlan: Senate Group Urges
No U. S. "Interference"
From THE ALL RIMERY JOE'S Bureas
WASHINGTON-Recenversion planning in
chifting from the talk to the action stage
now that Allied roops have won a tochold
on the continent of Europe.
Major developments yesterday:
The Army has advised the War Pro.
duction Board of the plant capacity which
will be available for the production of
civilian goods on "X Day -the day Germany falls
War contractors will be allowed to
place orders now for the machine tools
they will need when military requirements
permit them to resume production of their
peacetime products
Congress and Treasury experts will go
to work, probably within A month, on a
tax adjustment program designed to encourage private investment in the war-topeace transition period.
The House and Senate have abandoned
plans for A long summer recess and after
suspending business for the political con-
ventions, will go back to work on unfinished parts of the demobilization program.
Utges Statutes for ReconVersion
Appearing before A Senate Military Affairs
subcommittee yesterday, War Mobilization
Director James F. Byrnes predicted this
country's war mobilization job will be completed by the end of the summer and urged
early Congressional enactment of statutes to
guide reconversion policy,
At the same time the Special Senate
(George Committee on Post-War Planning
that the Government adopt policies issued
report demanding a minimum of "Government
interference" and advocating that the Govern.
ment adopt policies which will instill confldence in all segments of the economy as
prerequisite to successful demobilization,
Mr. Byrnes and the George Committee
agreed In general, that: (1) Congress should
create the Office of Demobilization now (2)
Congressional action on the Senate-approved
contract termination bill should be rushed
(2) A surplus property disposal statute should
be placed on the books without delay, and
few days and that the machine tool manufacturers will be allowed to fill orders when
ever plant capacity permits
As another step in tooling up for reennVersion, Mr. Byrnes announced contractors
will be enabled, through the Surplus Property
Administration. to purchase now, for future
delivery. the Government tools now in their
plants.
Plans for Sale of J. N. Owned Tools
He said the armed services have asked the
contractors to advise them Which Govern-
these contractors of this within the next
announced yesterday.
Known as the "staff" of the produca specific job of knowing about Army
are interested in buying and also the tools
fixed by the Surplus Property Administration
and under terms that will give the Government the right to repurchase at the sale price
if it needs the tools in the future
Both Mr. Byrnes and the George CrimmitLee called for advance planning on the tax
adjustments which will be necessary, when
Germany falla.
"It is important that as soon RR possible
after X-Day. there be a revision of the tax
laws that will encourage capital to invest in
Industry." Mr. Byrnes said. "The knowledge
that Congress is working on a revision would
encourage men to plan for investment of
capital and for the employment of people.
Wants Study Now of Post-War Taxes
The George Committee said "an immediate
study should be made of the problems of
post-war taxation with a view to revising
the tax structure so as to promote expanding
production and consumption.' The question
to be settled, the report said, include: "How
much can we tax away the purchasing power
of the low-income groups, who spend every
thing they make for consumer goods? What
revisions in corporate taxes and surtaxes and
in taxes on capital gains must be made to
make ownership and equity investment more
attractive? What impetus can be given
through the tax laws to a greater production and use of producer's goods?
The Committee observed: "Idle money
cannot be productive money and Idle savings
do not provide production or Joba.'
It was revealed in other quarters that the
staff of the Joint Committee on International
Revenue Taxation and the Treasury Department probably will be instructed within the
next 10 days or two weeks to explore tax
changes which would encourage investment
and stimulate employment in the transition
period. It was considered unlikely, however,
that Congress would take any action on taxes
this year.
be permitted to place orders now for the
Wilson, W.P.B. executive vice chairman.
they can store. Sales will be at prices
Would Weigh Securities Act
The George Committee noted that tax
revisions are not the only means of stimulating equity investment. It suggested that
study of the Securities and Exchange Act
machine tools they will need when they can
resume production of goods for civilians
Mr. Byrnes said the W.P.B. will advise
WASHINGTON The War Production
Board's reconversion group has Deen
completed and will start meeting regularly three times a week, Charles E
tion executive committee, the group has
(4) the Government should help move workers
WPB to Gauge Plant Capacity
It was Mr. Byrnes who disclosed that the
W.P.B bas been informed of the cutbacks
which will take place in the Army's supply
program when Germany collapses. He said
this will enable the Board to measure the
plant capacity which will be made available
for civilian production at that time.
The War Mobilization Director also made
the announcement that war contractors will
Tex
ment-owned machine fools in their planta they
from war centers, when they no longer are
needed there. back to their homes.
New WPB Unit to Sort Out
Army-Navy Cutback Data
be made to determine to what extent- it
deters the floating of small new equity offer
Ings because of the expense and trouble involved in complying with the law.
The Committee estimated jobs must be
found after the war for 54 million to 56
million persons. This is higher than any
peacetime employment level.
The severity of the transition period and
the ability of Industry following that period
to absorb 8 to 10 million more workers than
It has ever absorbed before will depend very
Navy cutbacks far enough in advance 80
action can be taken by the W.P.B. It
will "handle readjustments that grow
out of changes in military production
programs," Mr. Wilson stated.
Director of the staff will be Arthur
H. Bunker vice chairman of the W.P.B
and also vice chairman of the production
executive committee, The staff will be
composed of full-time members, Including
17 from the Maritime Commission, War
Manpower Commission, War Production
Board and Smaller War Plants Corp.
largely on governmental policy." the report
concluded.
The Government's Job, the Committee said,
is to create a proper "economic environment."
There must be "confidence in the friendly
attitude of Government" and a "certainty
Congress will delegate the absolute minimum
of its powers." it contended.
It predicted "a large percentage' of the
smaller war bonds, which represent "pent-up
savings," will be offered for redemption, Post.
war financing "will not be done in the Rt.
mosphere of patriotism in which war bonds
are sold today, the Committee observed
The 16-point program which, the George
Committee said. must be considered immediately "if an intolerable unemployment situation is to be avoided." follows:
Establishment of an over-all demobilizaLion office.
Speedy termination of war contracts and
clearing of war plants.
Wise marketing of surplus war property,
Unemployment compensation on which
the Committee promised A full report in the
near future.
Construction projects for which neces.
sary materials must be made available "immediately upon the ceasation" of the war.
Residence construction, on which the Com-
mittee will report later.
Migration and retraining of workers with
avoidance of "freezing excess-labor in war.
boom areas.
Price controls and rationing studies to de-
termine which restrictions should be continued and for how long after the war.
Post-war budget to eliminate all unnecessary" expenditures.
Refinancing of Treasury obligations which
will represent "immense" problems.
Revision of the tax structure to promote
expanding production and consumption.
Equity Investment stimulation.
Expansion of foreign trade.
Prevention of monopolies and trade
barriers.
A study of delegation of congressional
power with R view to holding them at an
absolute minimum
Elimination of overlapping governmental
agencies.
WALL STREET JOURNAL
37.
AUGUST 1, 1944
Senate Committeemen Summoned Back to
Washington to Speed Reconversion Bills C
Military Affairs Group Will
Meet Thursday-Republicans Demand Quick Action
8444
WASHINGTON AP Senate Majority
Leader Barkley. Kentucky. and Senator Reyn-
action on bills to chart the post-war business that. Congress should conclude the reconverand employment programs,
sion legislative program with the least possible delay, because the battle news is at least
"It is imperative that members of the
sufficiently encouraging to require that the
Senate Military Affairs Committee return to
home front should be ready for the economic
Washington at once in order that proper consideration may be given to vital and indis- impact of a German defeat."
Calling surplus property disposal machinpensable legislation dealing with reconverion, demobilization and surplus property ery and unemployment compensation prodisposition. bills concerning which are now
grams the "immediate problem." Senator
pending in the Military Affairs Committee,
olds, Dem. N. C.I. telegraphed absent
the telegram said,
members of the Senate Military Affairs Committee yesterday to return to Washington at
once to act on reconversion legislation.
The telegram was made public by Senator
Reynolds. chairman of the Committee, soon
after Senator Vandenberg (Rep., Mich. dis.
closed that Republicans would insist on early
It set a session for Thursday.
Senator Vandenberg (Rep., Mich.), chair
man of the Republican Senate Conference
conferred with Senator Taft (Rep., Ohio and
acting Minority Leader White (Rep., Mc.).
and then told reporters:
"Our opinion is that it is absolutely vital
Vandenberg said "it is our view that the
Senate Military Affairs Committee should be
requested to report A bill as soon as possible
and that the Senate should resume its ses.
sions whenever the report is available."
Both houses arerto reconvene today after
their summer recess, but reconversion legisla
tion still is on the committee drafting board
and for the time being only routine session
are likely.
38.
NEW YORK TIMES
AUGUST 12. 1944
NELSON STAYS FIRM
ON RECONVERSION
Mead Starts Inquiry
Senator James Mead. who replaced Senator Harry Truman as
chairman of the special committee
WPB Ready With Final Order
Giving Local Authority on
Civilian Goods
B,S
By WALTER H WAGGONER
Special to THE NEW YORK TIMES
WASHINGTON, Aug. 11-Donald M. Nelson, chairman of the
War Production Board, was reported today applying final touchea
to his order empowering local of
ficials to authorize civilian production on Aug 13. with the firm con-
viction that he will have to fight
for his reconversion program
against the recently granted veto
powers of the War Manpower Commission
Expected tomorrow or the next
day, the fourth of Mr. Nelson's diaputed reconversion orders will list
more than a hundred articles believed by the WPB to be essential
to the civilian economy, which may
be manufactured on and after Aug.
15 If labor, facilities and materials
are available.
This order, protested from the
start by the armed services and
the War Manpower Commission
in expected to collide with a labor
economy directive issued in Aug 4
by James F. Byrnes, Director of
War Mobilization This ruling provides that the WMC representa-
tive on each local production committee be the final arbiter in cases
of disagreement over the feasibility
of civilian production.
May Seek Appeal Rights
If Mr. Nelson feels the local dis-
pute is of critical importance to
the community, it was said, he may
ask that manufacturers and WPB
field officials be granted the right
to appeal to the national WPB
headquarters in Washington where
individual
cases may again be reviewed.
Officials who expect the WPB
chairman to press for full utilization of his reconversion program,
which has already been delayed be-
yond its original effecttive date of
July 1, cited his action
on
Wednesday when he disclosed that
he would submit to the joint chiefs
of staff data heretofore withheld
by the Army, of surplus war mate
rials
From Capitol Hill. meanwhile.
came Indications that Mr. Nelson
would continue to have A large and
influential section of Congress
fighting at his side for speedy reconversion
to investigate the war program.
assailed military opposition to the
resumption of civilian production
and said that he planned to have
the committee investigate the subject.
He said the committee would
conduct a closed hearing on Aug
16 to determine the facts about
the Army's suppression of a sec-
tion of the WPB report showing
heavy stocks of many Items of
equipment and supplies This meeting will examine also the question
of whether a shortage of war ma
terials really exists, and, If so, the
reasons for it
A copy of the suppressed WPB
data is now before the committee.
which will call as 'witnesses. Mr.
Nelson and Major Gen. Lucius D.
Clay, Army director of matériel.
The order being drawn up by the
WPB today. to go into effect on
Tuesday, will list the war time
restriction orders which may be
relaxed at that time Almost 100
"L" and "M" regulations are ex-
pected to be included in the listing
while the number of actual articles
may reach 200
Officials said the list had been
shortened because some of the
items were judged to be "unjustifiable and ridiculous Alphabetic-
ally. the list went from alarm
clocks to X-ray apparatus, but in
between were infants' cribe and
chifferobes, lunch boxes, model airplane motors, drapery and curtain
rods and sink strainers.
WASHINGTON
AUGUST
2A,
STAR
1944
Reconversion NOW
Washington starpic
Demanded by.
1940 athan
Attacking Production
Board's policy of reconversion, Rob-
ert R Nathan, former chairman of
the Planning Commission of the
WPB. today told members of the
Junior Board of Commerce If WPB
doesn't "loosen up on reconversion
orders' the country is faced with
postwar
unemployment
of more than
18,000,000
people.
"The time to start reconversion is
now. said Mr. Nathan. "If the war
were to end tomorrow the country
with
thetotally
situation."
will be
unprepared to cope
Mr. Nathan piaced the blame for
the uncertainty of reconversion on
"certain military officers and others
interested In big business but said
conversion
start now without
harming
thecould
war effort.
He said the Government should
begin learing or selling plants under
its control as soon as possible so
as not to compete with private industry. Towns which rely on war
production for their existence should
be the first to have their war con
tracts cancelled, he added, so Lizb
workers could migrate to larger
eities and And employment.
5
39.
40.
NEW YORK TIMES
SEPTEMBER 5, 1944
president of the Congress of Indus-
GREEN AND MURRAY
Cites Record in Production
Reviewing labor's part in the
DEMAND SPEED-UP
conflict, Mr. Green said:
"The President of the United
States, the Commander in Chief of
ON RECONVERSION
AFL President in Labor Day
Address at Jacksonville Predicts Post-War Boom
JOBS HELD 'PARAMOUNT'
the armed forces, paid high tribute
in his Labor Day message to the
astonishing achievements of labor
on the production front. The facts
merit such praise.
"Since July, 1940. American
workmen have produced more than
130 billion dollars' worth of fighting equipment.
"No wonder our enemies are
amazed. The vast quantities of
military equipment we are throwing into battle have dismayed them
RA much as the courage of our men
CIO Chief at Pittsburgh Urges
Guaranteed Wage and End
of 'Little Steel' Basis
By The Associated Press
JACKSONVILLE, Fla., Sept. 4
With labor. management and
the Government cooperating, the
end of the war will signal the start
of the greatest period of prosperity
in the nation's history, William
Green, president of the American
Federation of Labor, predicted today.
He cautioned. however, that la
bor's "enemies at home" must be
overcome and that the nation must
be prepared for temporary reverses
and unemployment during the
transition from wartime to peacetime economy
"The test period will come between the time war contracts are
canceled and Industry is able to
complete its reconversion to peace
production." the AFL chieftain
told a Labor Day lunch hour gathering of 20,000 workers at the St
John's River Shipbuilding Com
pany here.
"Obviously," he said, "the national interest demands that this
transitional process be completed
in the shortest time possible and
with least suffering to disemo
in uniform. One captured German
captain, seeing the huge supplies
of war material being unloaded on
the beachheads of France, was reported to have said he had counted
in that one afternoon more flying
material than his own Nazi troops
had received in six months,
"These superior products of the
toll and sweat and skill of free
American workers have inspired
our own boys, just as they have
discouraged the enemy.
"The entire world now realizes
that together America's fighting
army and her production army
constitute an unbeatable team.
Stalin and Churchill have publicly
attested to the fact that American equipment and supplies saved
Europe from being crushed by
"As this war draws near to its
final conclusion, American labor is
determined more than ever to see
to it that lasting peace will be our
reward-a peace that must be fully
protected by an international organization of the nations of goodwill who recognize that war is the
great enemy of mankind and must
be abolished for all time at any
cost."
Murray Urges Speed
Special to THE NEW YORK TIMES
PITTSBURGH, Sept. 4 A
"Therefore, the AFL is pressing
with all its power in Washington
agriculture collaborating was
urged today by Philip Murray,
for the approval of plans for start-
Continued on Page 14
waiting for the end of the war."
Mr. Murray. in A Labor Day ad.
dress via radio, outlined A four
point program combining those
features and calling for employ
ment for all returning service men
"as well RU for the fifty million
men and women who are now employed in industry."
He pointed to these requirements
for prosperity:
1. Revision of the "Little Steel
formula" to "increase purchasing
power."
2. Guaranteed annual wage.
3. Cooperation between industry
and labor
4. A Government reconversion
program.
Mr. Murray said that "if we are
have jobs for all after the war"
will be "necessary to increase
the purchasing power of the Amercap people. This step in*prevented
at present by the so-called "Little
Steel formula. which has frozen
wage rates as levels far below that
of war-time living costs
Under A "guaranteed annual
wage." working people would "have
some assurance of a livelihood
throughout the year.' he said "It
would also create a steadier demand for the goods and services
of
farmers, professional people
and business men.
Urging co-operation between
management and employes, he de-
clared that "only chaos and disruption of our industrial life will
result if employers look to the
war's end as an opportunity for A
inion-breaking wage-cutting open
shop drive. and if labor unions
have to resort to widespread
strikes to defend their very exist.
ence and living standards of their
members.
Mr. Murray called on the Federal
planned national economy, with
Government, industry. labor and
ing reconversion now, without
war era.
Wares Against Strafing Unions
Hitler.
ployed war workers and demobi-
lized service men.
trial Organizations, AS providing
"common security and prosperity
in the difficult days of the post-
Government to work out immediately a program for reconversion
in co-operation with labor agriculture and industry The nation, he
said can take no chances of "work-
ing people and ex-service men
starving as the result of any fail
utes on the part of industry Social
security legislation must be expanded and the Government must
be prepared to take up employment
through R program of
public lags'
works.
Turning to the International
scene, he said the war had shown
the United States that it can not
remain aloof and he recommended
that "intelligent international collaboration" be made an essential
part of our affairs to guarantee
"future peace and economic welfare."
Reconversion
Move Rushed
On Advice
WASHINGTON POST
41.
SEPTEMBER 14, 1944
Of Military
Plans Stepped Up,
With 'October 31'
As 'Outside' Date
For Nazi Collapse
Small torists
WHEN MORE GAS is available
it will go first to buses, trucks
and "B"_card holders. Page
12.
OPA SEEKS to keep prices of
autos and other heavy items
at 1942 prices in reconversion
Page 13.
WMC Helps Industry
By Ben W. Gilbert
The Administration aired its
reconversion plans and accelerated
the pace of its peace-planning
after the armed services warned
that the collapse of organized re
sistance in Germany may come
soon, responsible officials revealed
yesterday.
CONV 5
From Page 1
whether the workers involved
could be made available for direct
war production, McNutt said.
The armed services which have
consistently opposed reconversion
planning in public because of fears
that war production would be
harmed changed their position recently, informed officials stated, because of three main factors:
1. The realization that a German
collapse might be imminent, mak-
Ing immediate and rapid reconversion planning A major necessity
2. Recent discussions of prob
lema of contract termination, cut-
backs and reconversion with
The situation was highlighted
yesterday by an Associated Press
dispatch from London which re-
manufactures which resulted. not
In a desire to withdraw immedia
ately from war production, but in
ported that October 31 had been es-
Increased concentration on the war
tablished on the tentative "outside" date for the collapse of German resistance, and was being used
as the basis of reconversion plan'ning.
Limited Plans Also Drawn
Acting Chairman J. A. Krug of
the War Production Board refused
to comment on the London report.
but other WPB officials stated that
plans were being made with sufficlient flexibility so that they could
be put into effect on October 1
October 15, October 31 or any
other reasonably imminent date.
It was also understood that plans
were being drawn for limited reconversion even if German resist-
ance continues throughout the
winter.
Meanwhile, Manpower Chief
Paul V. McNutt took our reconversion plans one step further by giv-
ing a green light to the assignment of planning engineers and
technicians by private industry to
the blueprinting of their own reconversion plans, and by announcing that small plants will not need
WMC approval to go back into
civilian production before V-E
(Victory in Europe) Day as long
as they do not increase their total
force of workers
In determining whether larger
plants (above 50 workers on the
West Coast and above 100 workers
elsewhere) may go back into civil-
an production, WMC will judge
See CONVERT. Page 12, Column 3
when some release of wartime material could be made for peacetime
goods. The belief was expressed
3. The rise in the production of
so-called "must" Items which has that the time table was axed on
occurred during the last six weeks. the assumption that German resistThe about face by the services ance may come to an end through
process of disintegration, rather
was followed by the announcement
by Krug of WPB's plan to remove than by a sudden collapse.
It was said in London that the
virtually all controls after V-E Day
"outside" date was established to
McNutt's announcement that labor
market controls will be retained provide some basis for concrete reconversion planning, rather than
after V-E Day only on a limited
basis In a few acute shortage areas
and War Mobilization Director
James E. Byrnes release of a com-
prehensive report on industrial
demobilization plans coordinating
the work of various agencies.
A report of the Combined Production and Resources Board,
joint Anglo-American agency a
called for coordinated reconversion
planning by the Allied nations
The London report stated that
October 31 was fixed as the time
the creation of plans for use at
some time in the indefinite future
Krug has scheduled a press confrence for today to elaborate furher his reconversion plans.
Some discussion is expected of
work by special WPB "task"
groups which have been reviewing
roduction controls order by order, to list those which are to be
released and those which are to be
retained during the transition
period.
NEW YORK TIMES
42.
JULY 27, 1944
GOVERNMENT DELAY
ON TERMINATION HIT
JUL 27 1944
Lack of Reconversion Action
Also Deplored by Cherne
in Housewares Club Talk
Contract termination and reconVC on proble... looming more important than ever Core due to the
rapid developments in both the Eu-
ropean and Pacific war theatres,
are being given scant attention by
Government and none of the positive action highly essential LE eco-
nomic orderliness is to be achieved.
Leo M. Cherne, executive secretary of the Research Institute of
America declared yesterday.
Hostilities may end practically
any day. he said in an address yes-
terday before a meeting of the
Housewares Club of New York at
the Hotel Pennsylvania, and there
exists an immediate need for plan-
ning by Government and business,
designed to protect against industrial disorder.
At the recent political conventions in Chicago. Mr. Cherne point-
ed out, the subjects of contract
termination and surplus goods were
not mentioned by either party.
With reference to reconversion he
declared that such efforts have
been retarted through slow action
by the Office of Price Administration on price levels for such prod-
ucts
To be overcome are the drawbacks of a Presidential campaign,
during which "regulation and planning will be underplayed and con-
troversy avoided. while at the
same time the rapid deterioration
of Germany will demand reconversion programming, quicker, more
ruthless administrative agency decision," Mr. Cherne stated.
not
"German disintegration is
being overemphasized in this country. If anything it is underempha-
sized Early victory over Ger-
many and a shorter subsequent
stage of the Japanese war have
immediate basic effects on all industrial activity. Munitions stockpiles need not be great Depletion
of reserves available against European needs is far"smaller than ever
contemplated. Cutbacks after XDay will be greater than heretofore talked of. "It will be difficult
to stretch out continuing war production even if plans for reconver-
sion are so far behind as to
threaten enormous difficulty.
"A pivotal resistance to early
reconversion will continue to be big
business. Their break-even point
demands much higher civilian production than early and partial reconversion would permit. Their
Continued on Page 23
expected disinclination against
the competitive elements and new
ness first "go-ahead" to small-busi- against
and both militate against
the first aggressive action. They quick were.
likely will in be war the last production out. and
all "The will most be trying difficulty
pressure the acute inconsistent of
Certain of half-war. half-peace.
will
critical manpower
the present become more acute, such needs
over-all one in forgings, as
comes manpower market as the
Manpower more flexible The be-
tinue to Commission will War
sion." be a brake on reconver- con-
-
CONVERSION NEEDS
TO SPUR CONGRESS
BY Hear C3
End of Recess Tomorrow Will
43.
NEW YORK TIMES
Find Peace Blueprints Made
Urgent by War Gains
JULY 31, 1944
JUL 8-1 1944
COMMITTEE ACTION LAGS
Clashes in Committee
Difference of opinion over the
But Leaders of Both Parties
Move to Speed Framing of
Bills for the Floor
amount of authority Congress
adequate for
mobilization agency the amount
full production and employment
will prevent a _scramble by both
should should grant to an over-al dewhich
should be paid. and other points
alowed action by the commit
Its chairman Senator Rober
Reynolds of North Carolina
doubts whether a
Special THE New YORK TIMES
WASHINGTON, July 30 Congreas. which went home a few
weeks ago convinced that it had
the situation well in hand and
would not need to consider serious
matters until after Labor Day at
least and perhaps not until after
the election, has been outflanked
the committee will
Tuesday
to
mentous job of drafting a domestic
activities fix
policy for the disposition of Gov-
Senator would
create an Office of
surpluses.
and Adjustment direct the
all Federal
to with the
service
The good news from the fronts
sion within Germany have crys
tallized in the minds of leaders of
both parties the need for immedi
ate work on plans by which tran
sition from war to peace produc
tion can be accomplished without
Congress who may sacrifice some
leaders see importan signs of vic-
tory in Europe will return to find
that Army and Navy leaders con
tinue to oppose the War Production Board in its decision to permit
immediate extension of civilian
production.
Status of Reconversion
Three immediate reconversion
orders have been put in operation
by the WPB and & fourth, empow-
ering WPB regional offices tocivilian
au-
thoria resumption
good manufacture where mate
rials, facilities and are
available is scheduled for
with Aug. 12 as the effective date.
Confronting Congress the
problem of providing Jobs for the
10,000,000 who will be demobilized
from the armed services and for
the 20 000,000 in war industry
must be shifted to peace work
Also to be arranged is the disposal
of $75,000,000 000 worth of govern
ment plants. equipment and SUP
plies. Congress has already adopt
ed legislation governing the termi-
nation of war contracts.
The importance of immediate
consideration for needed
men
and
zation, who declared Wednesday
that the German internal crisis
makes early action on demobiliza
tion urgent
Before recess the Senate's Military Affairs Committee had begun
drafting a reconversion bill on the
basis of two bills which had been
Introduced-one by Senato Walter
F. George Democrat of Georgia
and Senator James E Murray
Democrat of Monta and the
derly planning both for full
the
Rights
measure, urged its passage
GI
Contract
dealing
joint statement tonight. They
the
"When the war ends
disappear for
engaged
added
who
will
The
United
return
to
States
hold
worth
plantaworth
and
and
of
tories will be checked with
finished products on which
work orders have been issued
New Solutions Called Need
"These condition will poes problems of unprecedented magnitude
and urged Chat It be passed before
the
not keep pace with the march
of events.
for which traditional solutions
Cite Fighting Developments
"To convert to full production
and employment in peace, we
find 15,000,000 more joba than
recent receas It was pointed
out that piecemeal approach
inadequate
lab
"The successful by Brit
and American forces from the
West and south and the shattering
were available in 1939 We must
blows by the Russian forces from
more than we produced in 1939
Europe in the summer of 1944
much nearer to its end Already
produce at least 60 to 70 per cent
we plan only for pre-war levels
production, we shall fail. If we
not plan for full employment, any
other plans we make will be swept
away in the tide of unemployment
and depression
These problema. to a limited
but increasing extent, are already
pressing for solution. The armed
services are now discharging 70.
000 men each month. Our war pro-
duction program is constantly
being
revised
Refusal to recognize the effects
of changing demands for war
not planned, exhortations and comwith me of Sittin USA Only
F. Byrnes, Director of War Mobili-
The only solution for avoiding
of New York.
Republican of Michigan
ing of the party's Senate Steering
Committee Tuesday, and by James
confict
tory and for for
The plans of Federal and State
terial may seriously affect war
summoned Republicans to
shift readily with military
strategy
civilian
sion legislation has been
by Speaker Rayburn, who
leave his Texas home today:
Senator Arthur H Vandenberg.
strategy must be flexible enough
Senator Kilgore and Representative Emanuel Celler. Democrat
Paradoxically, the members of
campaign activities because their
however,
for expanding civil-
and disposition military
civilion goods and the
blueprint for peace.
and the evidence of aerious dissen
Those who in 1941 and 1942
could not recognize our potential
for war must not now be allowed
to payy on our potential for peace
Our
plans,
Allied armies and returns to Wash-
ington Tuesday to tackle the mo-
management and labor to protect
themselves against unpredictable
cutzacks
must contine to be
to the needs of war Production
office
by the amazing progress of the
continous
production itself. If cutbacks are
the east, have brough the war
Permany is being torn with in
ernal dissention
"We are asking of our fighting
forces A full measure of sacrific
antil our troops march victoriously
through the streets of Berlin and
Tokyo. But the collapse of Ger
many today would find us totally
unprepared for the problems fac.
ing us. We cannot evade our leg
stative responsibility to find an
swers to the immediate problems
mobilization and
adjustment
The Congress must enact com-
prehenaive
44,
NEW YORK WORLD TELEGRAM
AUGUST 8, 1944
Motor Leaders
New York
Expect Lariy Ca
8
On
Reconversion
Believe Washington
Is Revising Ideas
Due to Recent Gains
Growing expectations that
Die Castings and
Tires. concerns
greatest
German collapse may come sooner
than anticipated as recently as
three weeks ago in high adminis-
tration circles have raised the
probability that leaders of the
automobile industry soon may be
recalled to Washington to work
out an agreeable reconversion
plan, it was indicated today by
informed trade spokesmen.
Spectacular developments point-
ing to an early Nazi defeat have
come thick and fast since the rejection. on July 15. by industry
leaders of a War Production Board
plan for reconversion At that
time, neither military progress In
western Europe nor the political
situation inside Germany and
diplomatic events in the Balkans
were thought to warrant too much
reliance on a Nazi defeat before
late fall.
Since then the war picture has
changed drastically bringing revied concern over a host of reconversion problems including the
pace at which the automebile in-
dustry may be able to turn out
passenger cars.
Rationing in Early Stages,
Lloyds of London insurance
rates are interpreted as indicating the underwriters expect the
fighting in Europe will end before
Oct. 31. In this event, automobile
executives say, the industry could
begin producing revamped 1942
models by the first quarter of
1945. After first guarter produc-
tion is completed. it is the industry's hope that quotas and
price controls may be abandoned
Disputes over the need for and
length of such controls are said to
have been one of several major
stumbling locks in the unfruitful July 15 conference.
But the industry does expect
that the needs of the country will
be heavy enough to require ration-
ing of new cars for a period of
as yet unforeseeable length.
man-
over
understood,
The
and
realization
ufracture The materials industry's of are civilian for zinc resumins latter vehicles, die castings concern it is
tires.
that
that
some
sat-
arises manufact from acturers are agreed tires cannot
heavy duty rubber for
isfactory be made time from in synthetic anything like suf-
best
some ficient quantity learned that
It was also on prices they of
industry cars estimates now are that way from
postwar have to be all higher the than pre-
will to 40 per cent absorb higher of
25 in order to costs. In view in-
these to discount low
war manufacturing calculations. most of the recent
dustry
rumorsis of said a car to retail as
as $500.
WASHINGTON DAILY NEWS
AUGUST
14,
1944
Cs
-THE WASHINGTON DAILY NEWS. MONDAY, AUGUST 14. 1944
Allied Victory Before Election
Can Create Reconversion Issue
By CHARLES T. LUCEY Scripps-Howard Staff Writer
Recent Allied gains have given rise to new fears that the Government's industrial reconvers
program will not be ready when the Nazi collapse comes, and this is one of the first matters
be pressed on President Roosevelt on his return from the Pacific.
The question has sharp political implications, some of Mr. Roosevelt's ad-
visers believe. They point out that if
the success of the Allied armies continues at anything like the present
pace, the end of the war in Europe
war production cutbacks followed
quickly. as is likely. delay in or inadequacy of the Government's pro-
SHOWDOWN IN FEW WEEKS
Whether there is an irreconcilable
conflict between WPB and WMC on
this probably will be tested in the next
few weeks. WPB officials are hopeful
that WMC field representatives will
gram for getting war plants smoothly
into peacetime production might mean
thousands of workers at least temporarily without Jobs.
IMPROVE GOP CHANCES
Sen. Truman, who was head oi the
Senate Defense Investigating Committee and who is to be Mr. Roosevelt's
running mate in November, is expected
conceivably could come before the November election.
If this should happen, and if sharp
Most Republicans believe their
chances would be greatly improved in
November If the European war is
ended. But If additionally the handling of reconversion should be
botched-so the thinking among some
officials goes-it would hardly help
Mr. Roosevelt
All this goes back to the disagreements between some War Production
Board officials and heads of the armed
forces, WPB favoring taking the first
steps toward peacetime production
where there will be no interference
with the war program, and military
chiefs being largely opposed.
The WPB tomorrow will issue an
order establishing procedure by which
manufacturers who have manpower
and facilities not needed for the war
effort, and where material is available
would ket permission thru WPB field
offices to make limited quantities of
articles not now allowed. But since
this order was announced, new controls have been placed on the labor
market which give the War Manpower
Commission a veto over such moves
toward civilian production.
not take a "crackdown" stance.
to be among those urging upon the
President the need for more decisive
steps toward peacetime production.
The George bill. passed by the Senate Friday, is now before the House
and consideration of reconversion
problems will begin before the Ways
and Means Committee. An attempt
probably will be made to enact some
kind of reconversion measure into law
as speedily ILS possible, but so complex
is the subject that prophecy today on
how long this may take wauld be difficult.
CLASH OVERSHADOWED BILL
Debate on the actual mechanics of
reconversion WILS overshadowed in the
Senate by the clash on the unemploy-
ment compensation features of the
measure with proponents of the much
more costly Murray-Kilgore bill taking
B licking The George bill leaves unemployment compensation administration with the states.
More than anything that has OC:
curred here so far, the debate opened
the question of whether the U. S. Gov-
ernment can continue to pile more
deficit financing on a national debt
that already will have reached some
300 billion dollars, Sen. Tydings (D.
Md.) warned that such a course held
the certain danger of printing press
inflation.
NEW YORK TIMES
AFL URGES SPEED
AUGUST 23, 1944
ON RECONVERSION
Council, at Chicago Meeting.
Stresses Building Program
to Employ 5,000,000
AUG 23 1944 C6
Special to THE New YORK TIMES
CHICAGO, Aug. 22-Immediate
acceleration of the reconversion
program wherever it can be ac-
complished without Interfering
with the even flow of vital war
production was asked today by the
executive council of the American
Federation of Labor. which is
holding its midsummer meeting
here.
America should take heed of
the statements of responsible war
leaders that the war against Germany may end sooner than expected." said the council. "If the
fighting in Europe ends suddenly
the impact upon our domestic
economy will be shattering unleas
preparations are made in advance
to cushion the shock
"The War Production Board
estimates war production may be
slashed 40 per cent overnight when
Germany surrenders This means
huge contracts will be cancelo
thousands of factories
forced to shut down and an many
as 10,000,000 workers will be
thrown out of jobs
"Such needless tragedies must
be averted if we are to win the
peace. The advent of peace should
be a great boon to the American
people, not the start of a fearful
depression," the council continued
It suggested a large-scale hous-
ing plan to be formulated to provide 5,000,000 jobs for construction workers "immediately as the
war ends.'
The council, however, discerned
"a serious obstacle" in the lack of
building materials such as lumber
wiring and plumbing supplies,
which are in heavy demand for
war purposes
"The executive council, there-
fore, feels that production of these
materials should immediately be
greatly intensified The surplus,
not needed for the war program,
should be stored up in stockpiles
by the Government in all sections
of the country so the housing program can commence the moment
the war against the Nazia ends
William Green, president of the
federation, announced that the
AFL will begin immediate drives
in Florida, California and Arkansas to prevent the adoption of legislation contemplated to outlaw the
closed shop in those States.
Joseph A Padway, counsel for
the federation, reported to the
council on the legal battles which
the AFL is waging against State
laws "objectionable to labor." He
expressed the opinion that "every
one of the anti-labor laws will be
defeated if it reaches the Supreme
Court."
GM RECONVERSION
PUT AT $500,000,000
MAR 26 1944
D.
Sloan Discusses Problems of
Turning Plants Back to
Peacetime Production
SPEED TERMED ESSENTIAL
Minimum of Unemployment to
Be Objective-Big Change
in Inventories Forecast
If, for example, the war In 20-
rope should end before the war in
the Pacific. it undoubtedly would
be necessary to proceed with reconversion on a basis of dual oper-
ations. Sharp curtailment of war
production following the cessation
of European hostilities would permit and require that manufactur-
ing facilities no longer needed
for war purposes be reconverted
promptly. Otherwise unemployment would increase rapidly
Difficult Problems Foreseen
"To operate on a part war and
part peace basis in automobile
plants would, of course, involve the
added expense and time of a dou-
ble reconversion. In peacetime
The General Motors Corporation
is prepared to make an aggregate
there is R high degree of plant spe-
cialization and integration of facilities. The technique of mass pro-
duction is employed most inten-
to
the
ernize, post-war expenditure and period retool of $500,000,000 for reconvert, resump- in mod- the
asmobiles only sively. plants To there make and are facilities completed necessary for auto- not
fred tion in a of statement P. automobile Sloan Jr.. issued production, chairman, yesterday said Al- in
advance of the forthcoming annual
report.
"This is, in part, a measure of
its faith and confidence in the future, based on the full acceptance
by both Government and business
management as a whole of their
respective responsibilities," he said,
"General Motors has on hand
about $500,000.000 of wartime inventories, mostly work in process
and raw materials, Practically
none of the work in process and
only A limited part of the raw materials will have any value in the
corporation's peacetime
of this manufacremoved from
new stocks of
must before ture. Almost be all material the Inventory plants for
peacetime production can be accumulated
Speed In Reconversion Vital
is extremely important that
reconversion
to
to a
tomotive production the hme of industry be held of minimum, peacetime the au-
because delays in converting plants
to civilian production will cause
unnecessary unemployment and
importantly retard the restoration
of A peacetime economy, he said, jour
While "the first and vital
continues to be the winning of the
war," he declared, "management
also has the responsibility of planning for reconversion and the postwar period to meet the urgent need
for providing jobs for returning
veterans and also for the hundreds
of thousands who will eventually
be released from war work.
sembling cars, but also facilities
for the production of engines,
bodies, axles. transmissions, electrical parts and other components,
each essential to a completed
whole."
Mr. Sloan said It would be most
constructive If the Government
could establish policies and outline
procedures for the disposal of Fed-
eral plants operated by General
Motors at the earliest possible
date. as it then would be possible
to determine to what extent, if any,
these plants can be integrated into
the corporation's post-war expansion plans. Government-owned machine tools numbering 61,000 present yet another problem, particularly where they are intermingled
with 69,000 owned by the company,
he said.
Some 3.100 peacetime tools that
were sold to other producers dur-
ing the war were key machines
that must be replaced or recovered
before production of peacetime
goods can be started, Mr. Sloan
said, and new types of tools will
be needed as well.
NEW YORK HERALD TRIBUNE
APRIL 28. 1944
35% Reconversion Seen
Wehen Nazis Are Beaten
Forecast Sh Civilian
Goods Most Optimistic Yet
WASHINGTON. April 27.-
Charles E. Wilson. executive vice-
chairman of the War Production
Board. predicted today that when
Germany is defeated 35 per cent
of the nation's productive capacity
now tied up with war work will be
available for peace-time production.
The statement, the most optimistic yet on civilian production
by a high government official, was
made to members of W. P. B.'s automobile labor advisory committee
after W. P. B. Chairman Donald
M. Nelson had told the same group
that he saw "no chance" of making
passenger automobiles this year.
Mr. Nelson emphasized that while
plans for eventual readjustment
to peace production must be made
now, "we're not going to do one
single thing that would interfere
with the war effort."
Mr. Wilson indicated there may
be an increase in civilian goods
output after the invasion by stating that the nation needed a plan
for "carrying out essential civilian
production coincidentally with war
work" by using man power and
facilities freed after a successful
invasion. After that, he said, there
would be need for a post-war plan
for full production and full employment. "But this is still a long
way off." he added.
R. J. Thomas, president of the
United Automobile. Aircraft and
Agricultural Workers of America.
of the Congress of Industrial Organizations. and Lester Washburn
president of the International
Union . of United Automobile
Workers of America. of the American Federation of Labor, agreed
that a thirty-hour work week
might be needed after the war to
prevent unemployment.
49.
NEW YORK TIMES
JULY 14, 1944
WILSON BACKS PLAN
FOR RECONVERSION
Says He Helped Write Disputed WPB Orders and Timing
Was Only Issue Involved
JUL 1944
New TIMES
D./
WASHINGTON July 13-Obfections of the War Manpower
Commission to the issuance of re-
conversion orders of Donald M
Nelson. War Production Board
chairman. on the same date that
the WMC was setting up its con-
trolled hiring program, was
sponsible for the failure of the production board to issue the orders
July 1. Charles E. Wilson executive vice chairman of the board
said today.
Breaking a silence which he has
maintained for more than a week
while a controversy went on over
whether or not nine of the war
agency's twelve vice chairmen had
split with their chief on the re-
conversion policies he outlined in
his orders, Mr. Wilson insisted they
had not. He added that whatever
difference of opinion had existed
revolved around the "timing" of
the orders rather than the objec-
tives sought
Mr. Wilson's statements were
made after returning from the
White House where he had asked
President Roosevelt to permit him
to return to his post as president
of the General Electric Company
Some months ago he submitted his
resignation but agreed to remain
until mid-July
"The President said that the job
of war production is still a press
ing one and that I had to stay on
the job, Mr. Wilson said.
Effect on WMC Program
Discussing the objections of
WMC to the reconversion planning. Mr. Wilson said that the
agencies spokesmen appeared before WPB executives in June and
said they feared the psychological
effect which would be created
among workers and industrialists
alike if orders dealing with peacetime production were issued on the
same date that WMC was putting
its country-wide job control proram into force
Mr Wilson added that he agreed
with. the WMC point of view but
took the attitude that Mr. Nelson
had made a decision, and it was
up to WPB to carry it out
The orders were not made effective att he proposed time, because
of instructions to hold them up until the WMC program took nold
The orders, four in all, set forth
concessions to producers in prepar:
ing for peacetime production. The
armed services assert that they
would interfere with current war
production. Mr. Nelson has maintained they would help rather than
hinder war output and his stand
has been backed by the Senate's
Truman committee.
"Those four orders are good
ones. Mr. Wilson said. "I should
know, because I helped to write
them. If the question of timing
had not arisen they would have
been issued on July 1. You may
be sure that they will issue on the
dates which have been set for them
now. That is a firm statement."
Minimizes Conflict in WPB
Mr Wilson came to the defense
of WPB members who were
charged with opposing the orders
on the ground that small business
would get a head start over big
business and asserted that differences were confined to the effective dates and did not involve any
conflict of basic business views.
The question of WPB's reconversion policy, he returned, was
settled March when Mr. Nelson
wrote to Senator Francis Maloney
of Connecticut, outlining a program
for reconversion, which the subsequent orders were intended to put
into effect. The entire WPB staff.
Mr. Wilson said, was in agreement
with the program outlined in the
letter.
Discussing the war production
program which he conceded had
lagged in spots, Mr. Nelson said
that there was cause for worry
over steel, which he said was in
short supply for pressing military
and civilian needs. Other trouble
spots are heavy tire production, ar-
tillery, shells and tanks. In the
last three, he added. the sharply
expanded demands of the armed
services have put terrific pressure
upon the war agency to meet re-
quirements
NEW YORK TIMES
JULY 28, 1944
Reconversion Plan Needed
Prompt Passage of Kilgore Bill Urged
to Avert Unemployment
TO THE EDITOR OF THE New YORK TIMES:
We are told that on X-day-when
Germany surrenders-it will
the
40 cent.
to more
sible equipment to reduce by per production Excellent! be of pos- war
than we need?
or Who submarines wants produce any Besides, guns
we all want autos and houses
So there no
our
trouble frigerators. about shifting ought magnificent to and be re-
production facilities back to consumer
JUL 28 1944
goods.
is that no
is
reconversion which will lead
a post-war period of full
orderly all The planning trouble being done adequate to insure over-
idea seems
ment. into The prevailing employ- to be
off all Government ILN
possible
and let individual
quickly as
to take
controls
enterprise take care of reconversion.
Careful Planning Needed
But it isn't that easy. Without some
and careful
idle labor in one
no
available to
on. there will be
there forethought but will be scheduling locality
rial work but
excess
for mate-it.it
nomaterials
facilitiesOrfor
processing
for a Government
theisreconversion
There to organize
need process agency
with a view to minimizing the delays
and shifts. Contract terminations and
cutbacks in war employment need to
be integrated with the resumption of
non-military production. And the disposal of surplus war property in the
hands of the Government should be
handled by the same machinery.
steps are taken
theUnless
per cent
in war pro40reduction
such quickly.
duction which will occur on X-day will
mean a 40 per cent reduction in war
employment. That would if Ger-
this some
would
four many million ispersons
defeated fall,
mean,be
thatout
of
work by the end of this year. Think
what that would mean to the servicemen who will be returning, we hope in
great numbers, when victory is won!
Failure to plan for reconversion is
having its effects on the workers at
home too. They are getting restive. This
is one reason for the outlaw
read about. A more
time lost due to
which tant effect-for We strikes strikes impor-
very
that many
as are
their
is workers still Individuals insignificant--is leaving
war jobs in order to take jobs which
they hope will offer a greater measure
of security.
My alarm, then, is twofold First,
that our continuing war production program will be jeopardized-the war will
not be over on X-day: and secendly,
that we shall have mounting unemployment with no measures to alleviate it.
Kllgore Bill Favored
To meet this situation we urge the
adoption of the Kilgore bill, now before
the Senate Subcommittee on War Contracts
The bill provides for a central agency
to handle cut-backs_and reconversion
It provides for Federal emergency unemployment compensation benefits for
war workers and returned servicemen;
sets for
and for the
training up machinery payment training of and trans- re- to
portation costs of workers moving
new jobs.
The coming election is as important
as any we have ever had, but it should
not be allowed to serve as an excuse by
our elected representatives for building
their own personal fences at a time
when the nation has a tremendously
important fence-building job to be done,
They should return to Washington at
once, and they should stay in session
until comprehensive reconversion legislation has been adopted.
RICHARD T. FRANKENSTEEN,
Vice President, UAW-CIO.
Washington, July 26, 1944.
y
NEW YORK TIMES
51.
AUGUST 16. 1944
Sees Little Effect at Once
Mr. Nelson, under questioning
MEAN
PEACE OUTPUT RISE
said he thought there would be
only R small increase in civilian
production under this "spot authorization" order. The purpose of the
order was to provide a mechanism
which would help industries swing
from war to civilian production
OF 30% SAYS NELSON
D+
Industry Will Be Able to Go
when materials and manpower became available.
Apparently eager to dispel any
notion that there was still a conflict between manpower officials
and his agency as to the policy on
to 1939 Level, Highest to
Industrial change-over, Mr. Nelson
issued a joint statement with Paul
That Time, He Predicts
V. McNutt, chairman of the War
Manpower Commission, which was
SMALL GAIN NOW IS SEEN
Joint Statement Agreeing
That War Comes First
By WALTER H. WAGGONER
Special to THE NEW YORK TIMES
duction."
The statement said that "we are
agreed" on the following points:
"1. That war production has the
claim on the nation's manand that there
of manpower
first power diversion must needed be civil- for no
war production and essential
there should be the
Already set for the shift to
their present volume, he added, this
country would be adequately armed
to carry on the war against Japan.
The occasion for the WPB chairman's meeting with the press, his
first since he recovered from pneumonia, was the taking effect today
of his fourth and final reconver-
sion order which permits local officials to authorize civilian produc-
tion of seventy-nine groups of
items when labor, materials and
facilities are no longer engaged in
war work.
duction." getting back to civilian speed pro-
He added that some industries
implements
to
tiles,example-would
agricultural swing for andbe
able tex-
into peacetime production
delays. The
reconversion would be
lag automobile without in any biggest in the
and construction
among the
goods,
been tries sumer and durable makers which of indus- con- had
Nelson, to normal, according to Mr.
fall of Germany will enable AmerIcan industry to increase non-war
production 30 per cent and bring
the output of civilian goods up to
the level reached in 1939, the high-
peacetime production as the demand for war equipment slackens,
plants will have their first major
cutback, probably about 40 per
cent, in war work when Germany
is defeated and the war in Europe
ends, Mr. Nelson said at a press
conference. Even with munitions
orders reduced to 60 per cent of
war industry itself does, and all the
of agencies, depends the
WPB and the WMC with respect to
ian production to less essential
son, chairman of the War Production Board, predicted today.
by WPB Congress and other
agencies. Upon the kind of job
return require some effort and time to
WASHINGTON, Aug. 15-The
est to that time, Donald M. Nel-
both the suddenness of
cutbacks and the preparation the
intended to make for "a clear understanding of the position of the
the reconversion of civilian pro-
WPB Chief and McNutt Issue
W he Asserted, "depends, of course,
civilian production.
of
maximum "2. That resumption with war civilian pro-
production consistent
duction needs.
3. That therefore, wherever
labor and materials are available
which are not needed in, or cannot be made available for war production, they should be employed
in civilian production.
"4. That planning for reconver-
sion of the soundest and most
thorough character should go for-
ward with the utmost diligence
and Intelligence so that, as emin war
ployment jobs in civilian production production can ends be
readily found.
"5. That there is and must be at
all levels, the closest cooperation
between the representatives of the
WPB and the WMC to accomplish
these common objectives."
The WPB chairman said that he
looked for a certain amount of unemployment in the "gap" between
war and civilian production, but
he stressed that this could be kept
to a minimum with adequate reconstruction machinery.
"The extent of unemployment,"
badly "scrambled" and would
When the Japjnese had been
be vanquished, he said, it would
necessary to maintain not
than a
None, in fact,
terials. needed over More very would few controls ma- be
except for tin crude
ber and "possibly" lumber, he said rub-
NEW YORK TIMES
52.
NOVEMBER 14, 1944
PLAN
READY FOR V-E DAY
NOV 14-1944
WPB to Announce Simplified
Program Soon, Batcheller
Tells AMA Delegates
Quick Readjustment Needed
Mr. Batcheller indicated that the
problems of the transitional period
will not be primarily those of material distribution, as reduction in
the present military procurement
program will more than suffice to
meet the civilian demands of any
pre-war year. The problems, he
stated, will center on quickly attaining full employment, facility
utilization and economic adjustment.
FAST RECONVERSION URGED
Boulware Says 'Familiar' Items
Must Lead to Reach Peak
Civilian Goods Output
Streamlined regulations which
can be put into effect with the defeat of Germany will be announced
"very shortly" by the War Produc-
tion Board so that "all industry
will have in advance the rules of
the game as well as they can be
predicted at this time H. G.
Batcheller. chief of operations of
the WPB, made known yesterday
at the opening of the production
conference on lower unit costs of
the American Management Association at the Hotel New Yorker.
"The fullest possible relaxation
of present limitation and conserva
tion orders is contemplated, Mr.
Batcheller said in his address, read
in his absence by Andrew Stevenson, his assistant. "It now is proposed to revoke a substantial number of all our present orders Generally. only in the fields of lumber
textiles and chemicals does it now
appear there will be any large need
for continuing controls.
While emphasizing that the con-
tinuing war production program
must be assured Mr. Batcheller
asserted that the prime responsi-
bility for speedy resumption of
civilian output must be that of private industry freed from the restrictive controls. The responsibil-
cutbacks has been and continues
to be of prime concern to the
plants in that State Mr Britton
WPB," Mr. Batceheller said. He
presented several charts dealing
with shortening the time factor in
estimated that of the $15,000,000.
000 worth of plants owned by the
Government some $8,000,000,000
are readily convertible, but the future of the remainder particular-
reconversion, as suggested for the
automobile industry.
Lemuel Boulware, former vice
chairman in charge of operations
of the WPB, who presided at the
meeting stressed the vital neccestties of attractive prices and speed
in starting reconversion. He asserted that new products which
have been developed during the
war period offer little hope of immediate production volume. They
have great possibilities, he said
"but they will not spring into full
production overnight and provide
the necessary high employment in
the immediate post-war period.
make a survey of the surplus
ly "cornfield plants." far from
cal consuming centers, in problemati-
Mr. Britton charged that the
Surplus Property Disposal Act, as
It now stands, "contains so many
hampering provisions that it
likely to slow up disposal of the is
vast have supplies the Government will
war." on hand at the end of the
last Speaking at the dinner meeting
night, Frank Rising, general
manager of the Automotive
Aviation Parts Manufacturers, and
"Plants must set their sights
and Inc., predicted that the "post-war
familiar items with some face-
ably will bring more disturbances
lifting, of course, although the cre-
strikes on the labor front in terms
we have and lost man-hours than of
higher for quick production of the
ation of new products should be
pushed at the same time.
Wants Three-Shift Operations
"Immediate production should
center on staples, instead of specialties, and particular emphasis
should be placed on items which
will yield three-shift operation.
Moreover there should be a house
cleaning of items representing hidden costs and high-selling expense.
A buyer's market will return with
the end of the war and industry
must prepare itself to walk humbly
with many customers instead
the single one it had during the
war period."
assistance may be required to per-
Continuo on Page 34, Column 2
economy."
conference. He noted that the Alabama Chamber of Commerce al-
period of adjustment following
Solution of the problem of disposal and operation of Govern-
mit individual initiative, ingenuity
and incentive to accomplish this
goal with the least shock to the
plus roperty Administration Office of War Mobilization told the
ready has employed one of the best
to industrial engineers in the South
"Planning for shortening of this
ity of government, he added, "must
be that of rendering whatever
ment-own.2 war plants will, In the
final analysis, have to be found on
the local level, by State and community business men getting together to study the possibilities of
plants in their areas, Mason Britton, assistant administrator. Sur-
even the post-VE period prob-
1919." seen in any period since
He asserted there are two
great "gulfs" between manage-
ment the and labor. The first is on
tivity." question of "individual produc-
with labor spokesmen
ing at standardization of production urg-
the average level which the
group can attain the second, Mr.
of Rising suggested. "lies in the area
the responsibility and discipline" on
part of ,labor leaders.
JOURNAL OF COMMERCE
53.
NOVEMBER 16, 1944
Demands
for Reconversion Are Definitely
NOV-1-6 1944
D6
Delaying End of War, Batcheller W arns
OF
PITTSBURGH Nov. 15 (AP).H. G. Batcheller. operations vice
chairman of the War Production
Board, declared in an address to
day that "demands for reconversionare definitely delaying the end
of the war."
Batcheller, who is also president
of the Allegheny Ludlum Steel
Corporation. spoke extemporaneously before a meeting of the In.
dustrial Hygiene Foundation at
Mellon Institute His theme was
"Victory First, then Reconveralon."
Puts War Needs First
The speaker said reconversion is
definitely A problem that must be
faced and planned for. but that
there are no really essential civil
ian Items in demand that should
be given priority over war production. He added:
"We have never lost a war by
having too much."
Batcheller listed several war production Items which he described
as behind,
Ha selected cotton duck for his
10,000,000
men
and
very
first example, claiming production
over
has dropped from 500,000,000 yards
large Navy."
per month in 1942 to 30,000,000 in
1944. The need is 100,000,000 yards
Batcheller said he would rather
have the returning veterans be
jobless for three months after the
war than "have them lay dead in
a alit trench on the other side for
lack of sufficient guns, ammuni-
per month and because of the
deficit, he said, "a specific number
-and it is large-of our soldiers
will be without shelter this year."
People. he said, are prone to
think of such an "uninteresting"
item as not vital to the war effort.
Deficits Cited
He cited deficits in the supply of
dry cell batteries. which affects
walkie-talkies, firing of the ba
zookas, and vital communications
Heavy heavy trucks, Batcheller
said, are being produced at 6,000
per month and the need is 8,000
per month. These trucks, he said
are worked twenty-four ho rs
day. seven days a week. to carry
supplies from the beachheads to
the fronts. And they average a
speed of 40 miles per hour, he went
on. over very bad roads.
A
tion, medical supplies, etc."
War Program Lagg ng
He declared that Industry. both
management and labor. must be
made to realize the war program
is lagging and that the demanda
are not "fanciful figures' but ac
tual figures received from the
battlefronts
In another address to the founda
tion meeting. Andrew Fletcher
vice president of St. Joseph Lead
Co., referred to the opportunity
for progress in the postwar world.
He said:
"With the united determination
of capital, labor. Government and
the people in general, there need
"Of course there will be an excess when the war is over. Batch
be no limit to the pr gress and
eller said, "but who can possibly
(Continued on Second Page)
estimate the needs of an Army of
Batcheller Warns
On War Shortages
(Continued from First Page)
rosperity that we can realize
ter the war."
Others who spoke included:
Dr. Harley L. Krieger, medical
rector of Ford Motor Co.: I.
ent Jenkins, personnel manager
the Harrison Radiator Division.
eneral Motors Corporation Dr.
enjamin F. Streets, medical dertment, Westinghouse Electric &
anufacturing Co. They discussed
roblems of rehabilitating and pre-
ring for work disabled war
eterans.
132
NOT TO BE RE-TRANSMITTED
COPY NO.
it
SECRET
OPTEL No. 415
1944.
Information received up to 10 a.m., 24th December,
1. NAVAL
Yesterday shipping in the mouth of the Scheldt attacked
by midget submarines. Two were sunk and third blew up. One
medium sized Panamanian ship torpedoed and total loss.
2. MILITARY
WESTERN FRONT. Third U.S. Army attacking northwards
has been halted within 6 miles Bastogne where a number of U.S.
troops are surrounded. German pressure has been held by First
U.S. Army on northern flank and northeastern shoulder of the
break through.
GREECE. Our forces have successfully continued
clearing operations on the roads from Athens to Phaleron and
Piraeus against slackening resistance. U.K. troops have reached
area N.W. of Acropolis. Our forces attacking round northern
shore of Piraeus are making progress against stiff opposition.
BURMA. Our troops have occupied 1 village in Arakan
on east bank of Mayu River, have advanced 10 miles in the Kaladan
Valley and entered Tigyaing in northern area on Irrawaddy, all
without opposition. They also ambushed large party Japanese
East Kalewa near Pyingaing, killing over 50.
3. AIR
WESTERN FRONT. 22nd/23rd. Koblanz railway centre 917 tons; Bingen - 315.
23rd. Escorted heavy bombers of Bomber Command
dropped 694 tons Treves and 107 Cologne Railway Centre; both
attacks very concentrated. 6 bombers, 1 Mosquito, 1 fighter
missing. 397 U.S. heavy bombers escorted by 616 fighters bombed
railway centres Ehrang - 349 tons and Kaiserlautern - 167; also
4 communication centres between Bonn and Saarbrucken - 494.
Results fair to good. German casualties 75, 5, 23. Ours - 3
bombers, 15 fighters missing, but 7 fighters believed safe.
R.A.F. medium bombers attacked troop and supply concentrations
near Malmedy with good results. 548 R.A.F. fighters and fighter
bombers operated over the northern and central sectors effectively
attacking transport and barracks. No reports yet from U.S. aircraft over battle area, but further 98 German aircraft claimed
destroyed. 290 Dakotas dropped supplies in Bastogne and Malmedy
areas. Two Spitfires of six despatched attacked a rocket site
in Holland.
23rd/24th. 157 aircraft despatched: Mosquitoes to
Limburg - 52, and Sieburg, 7 miles N.E. Bonn - 40; bomber
support - 58; other missions - 7 Mosquitoes.
72
MEDITERRANEAN. 1159 tactical bombers and fighters
attacked communications Po Valley and targets Italian battle
area,
4. HOME SECURITY
To 7 a.m. 24th. Between 7 and 8 a.m. yesterday 10
flying bombs plotted, Two rockets reported in the evening.
Early this morning about 40 flying bombs plotted.
133
NOT TO BE RE-TRANSMITTED
COPY NO.
4
SECRET
OPTEL No. 416
Information received up to 10 a.m., 25th December, 1944.
1. NAVAL
Initial sweeping Scheldt and approaches now complete.
280 mines were destroyed. Yesterday off River mouth two human torpedoes sunk by small craft and a third reported by aircraft as abandoned. Several groups of E-boats, possibly mine laying, engaged
last night by our coastal forces near convoy channel to Antwerp.
One of H.M. Canadian Fleet Minesweepers torpedoed and sunk yester-
day off Halifax. 64 survivors rescued, The U-boat was shortly
afterwards attacked. 11,500 ton merchant vessel torpedoed or mined
and sunk off Cherbourg yesterday while in tow.
2, MILITARY
WESTERN FRONT. Troops of Third U.S. Army reported
within 2 miles of Bastogne where U.S. garrison being attacked
from west. Further north Germans have by-passed Marche and are
being engaged between that town and Dinant. Enemy pressure heavy
elsewhere on 1st U.S. Army front.
ITALY. Snow limiting scope Allied operations and only
advances reported are two small gains by Canadians.
GREECE. Very little activity reported from Athens,
though at Piraeus fighting has been bitter but after repulse of
ELAS counter attack our forces improved their positions and captured
Kononos Station More gains also made along Athens-Piraeus Road.
BURMA In Arakan our forces have occupied Donbiak.
EASTERN FRONT. Russians have captured Levice, 60
miles N.W. Budapest They have broken through German defences of
Budapest and out main westward line of retreat at Bicske, 20 miles
west of city. They have also captured Szekesfehervar.
3. AIR
WESTERN FRONT. 23rd. Further reports: 508 escorted
medium bombers dropped 755 tons on communication centres between
Duren and Treves: results good to excellent. 781 fighters and
fighter bombers provided escort and operated over area of German
counter offensive near Malmedy. 37 bombers 22 fighters missing,
but some believed safe in Allied territory,
24th 288 escorted Bomber Commend aircraft (6 missing)
bombed airfields Essen . 404 tons, and Dusseldorf - 791 in clear
weather. 1884 U.S heavy bombers escorted by 818 fighters dropped
2648 tons in clear weather on 11 airfields mainly Frankfurt area;
2,059 on 14 communication centres between Duren and Treves and on
railway centres at Pforzheim, Kaiserslautern and Koblenz. Results
good. 36 bombers. 12 fighters missing or outstanding, German
casualties 91,6,11. 529 tactical bombers (2 missing) dropped 748
tons with good to excellent results on railway bridges and communica.tion centres Duren/Treves area, 2,282 fighters and fighter bombers
operated over the battle areas, Over 500 motor transport and 50
armoured vehicles destroyed. 50 aircraft missing. German casualties 38,4, 19c 245 aircraft dropped supplies to troops cut off.
45
Spitfires (1 missing) attacked rocket sites Hague area with good
results.
24th/25th. 299 aircraft despatched: Cologne railway
entre - 102 (6 missing), Bonn airfield - 104 (1 missing), Bomber
C
upport, etc., - 93.
3
MEDITERRANEAN. 23rd. 426 fighters and fighter bombers
missing) attacked airfield Milan and communications behind battle
as. 14 enemy aircraft destroyed on the ground and 3 in the air.
4. HOME SECURITY
To 7 a.m. 25th. 3 rocket incidents reported.
134
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
TO:
DATED:
NUMBER:
AMERICAN EMBASSY, London
Secretary of State, Washington
December 25. 1944
11434
CONFIDENTIAL
The following is for WRB and Department.
Recently a meeting was held informally to discuss the position of
Jews in Rumania between representatives of WRB and the Embassy, Nason head
of Refugee Section of Foreign Office and Emerson. Director of IGC. The latter
noted that strictly speaking, helping Rumanian Jews in Rumania (which is
liberated territory now) was not within IGC mandate but that enabling Rumanian
Jews to earn a living in Rumania, thus preventing their departure and becoming
interest
IGC. of IGC (and possibly the major one) was a matter of very real
a
grave to
problem
Around 450,000 Jews are in Rumania, according to data of Emerson,
and there is no means of earning a living now open to around 200,000 of them.
The majority of these destitute individuals are Jews were previously dealt in
commerce and who have no means of livelihood because they lost their property.
Most of the remaining 250,000 are artisans, professional men, et cetera who
can now earn their living through their services. It is calculated that there
are 30,000 ardent Zionists who, in any case, will desire to leave Rumania,
However, those of the 200,000 destitute Jews who are not Zionists will also try
to leave the country unless some way to rehabilitate them can be discovered.
Foreign Office is prepared to instruct the British member of Commission
to take the matter of rehabilitating Rumanian Jews up with the Commission,
provided Department deems it advisable to instruct American member of Allied
Commission to take similar action. It is the belief of the Foreign Office
that with a view to facilitating and expanding action in the rehabilitation of
Jews, an approach should be made by the Commission to the new Government of
Rumania. Since new government apparently has begun action to relieve Jews'
plight, this action should be taken as means of aiding such relief measures,
rather than by way of complaint. In addition, the restoration of Jews' property
(insofar as is practicable) and their rehabilitation can be connected with
armistice terms, the Foreign Office believes, Mention now of IGC interest in
this question to Commission is considered inadvisable by Foreign Office. It
is
the hope
of IGC
be able
send feasible.
a representative to Rumania to look into
Jews'
position,
at atolater
date,towhen
The request was made by Emerson that Foreign Office and State have
their members of Allied Control Commission and their political representatives
make a report on the Jews' Position in Rumania at regular intervals. Emerson
hoped that IGC would be given as much of this data as possible.
DCR:GPW
It is requested
12-26-44
that Department's instructions be cabled.
WINANT
135
Sent to the Treasury at the Farm
for signature 12/26/44
136
December 26, 1944
Dear Ed:
Your note of December 23 gave
me much pleasure. I reciprocate
your good wishes most heartily and
I know that I shall take great
satisfaction in the opportunities
we shall have to work together in
the coming year.
I am having some new photographs
made which will be ready early in
January and I shall be happy to send
you one of them.
Sincerely,
The Honorable
Edward Stettinius, Jr.,
Secretary of State.
Photo
mailed
-
1/4/45 pee fee
th
137
musting
THE SECRETARY OF STATE
OF THE UNITED STATES OF AMERICA
December 23, 1944
Dear Henry:
May I personally extend to you my heartfelt
wishes in this holiday season. I have enjoyed
immensely our close association during the year
that is now drawing to a close and I look forward
to working together with you in meeting the
great responsibilities of the year ahead.
will you please send me a copy of your most
recent photograph, autographed, so that I may
have it in the State Department.
With warm personal regards,
E
Sincerely yours,
The Honorable
Henry Morgenthau, Jr.,
Secretary of the Treasury.
138
THE SECRETARY OF STATE
WASHINGTON
December 21, 1944
Dear Henry,
May I personally extend to you my heartfelt
wishes in this holiday season. I have enjoyed
immensely our close association during the year
that is now drawing to a close and I look forward
to working together with you in meeting the great
responsibilities of the year ahead.
Will you please send me a copy of your most
recent photograph, autographed, so that I may
have it in the State Department.
With warm personal regards,
Sincerely yours,
The Honorable
Ea
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington 25, D. C.
EMBASSY OF THE
UNITED STATES OF AMERICA
Copies to 139 -
white
Paris, December 26,1944.
Dear Mr. Secretary:
I have received your telegram in regard to
my Embassy's cooperation with your representatives
here and I am most appreciative of your thoughtfulness.
I appreciate also your sending me your good wishes
for Christnas and the New Year. On my part, I send
you every good wish for 1945.
Very sincerely yours
Jefferson Caffery
The Honorable
Justine
Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D.C.
140
HEADQUARTERS
ARMY GROUND FORCES
OFFICE OF THE COMMANDING GENERAL
ARMY WAR COLLEGE
WASHINGTON D. c.
December 26. 1944
The Honorable Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
It was a pleasure to receive your letter of
December 22 concerning the activities of the Army Ground
Force demonstration units and to learn of the success
they achieved in stimulating interest in the Sixth War
Loan. I appreciate deeply your thoughtfulness in writing
to me.
Please consider our small contribution as an
expression of thanks from the Army Ground Forces to the
Treasury Department for the tremendous and vital part
played in furnishing us with the equipment and weapons
that we need in prosecuting the war.
With kindest regards.
Sincerely,
BEN LEAR
Lieutenant Gener al, U. S. Army
Commanding
FOR VICTORY
BUY
UNITED
WAR
BONDS
AND
STAMPS
Treasury Department
House
Division of Monetary Research
Date
To:
December 28 19 44
Secretary Morgenthau
You may be interested in this
brief report on British action in
Greece with respect to relief supplies.
H.D.W.
MR. WHITE
Branch 2058 - Room 214-1/2
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
M
142
DATE December 26,1944
TO
Mr. White
FROM
Mr. Glasser As
Subject: Meeting Held in General Hilldring's Office December 18, 1944,
to Discuss the Greek Situation.
General Hilldring asked the assembled representatives
of State, F.E.A. and Treasury for advice on a situation in
Creece which was brought about by a unilateral decision by
the British to divert to Greece relief supplies from the
Balkan stockpile. This action was undertaken by the British
Army as a military measure. The American officers in AFHQ
opposed the action. The result is the inadequacy of supplies
for Yugoslavia and Albania.
The American soldiers in Greece are not taking sides
in the dispute but are making a sincere effort to get food
and medicine to both sides. General Sadler, the American
commanding officer, passes through the lines and spends as
much time on one side as he does on the other.
It was generally agreed by everyone present that the
unilateral action taken by the British should be disapproved
except to the extent that the diversion was necessary from
a relief standpoint. It was generally agreed also that the
relief and rehabilitation functions should be turned over to
UNRRA as soon as possible and that the United States Army
should then be withdrawn from Greece entirely.
143
PLAIN
MF-1186
London
Dated December 26, 1944
Rec'd 11 a.m.
Secretary of State
Washington
11443, Twentysixth.
FOR DEPARTMENT AND WRB
Enbassy's telegram No. 8362, October 5, last
paragraph. In order to make plans for next year IGC
must know immediately whether United States Government
approves estimate of operational expenses for 1945 in
the sum of 2,000,000 pounds and whether United States
Government will underwrite operational expenses for
1945 up to 1,000,000 pounds. Please instruct by telegraph at earliest possible date.
WINANT
WSB
Caserts
HF-1339
Distribution of true
Dated December 26. 1944
reading only by special
arrangement. (SECRET w)
Ree'd 10:50 p.m., 27th
Secretary of State
Washington
1922, December 26. 10 p.m.
FOR WAR REFUGEN BOARD.
Only files in this office with material pertaining to Ackerman's
work have been carefully checked and we are forwarding everything ex-
cept telegrada which must remain in our files. However, copies of
all telegrams are presumed to be in your files. Buggage will go
forward by first available transportation. Reference Department's
475 of December 15. 9 a.m.
This office will of course do everything possible to assist in
any matters of interest To the Board.
KIRK
BB
145
EK-
Distribution of true
Lisbon
reading only by special
arrangements. (SECRET w)
Dated December 26, 1944
Rec'd 10:04 p.m.
Secretary of State,
Washington.
4286, December 26, 6 p.m.
THIS IS WRB 278 JDC 140 FROM PILPEL FOR LEAVITT.
Telegram received from Jewish appeal Johannesburg
stating they believe balance their Hungarian commitment
not needed and therefore they desire cancel it. Ex-
plained to them by cable their contribution still
needed in accordance detailed cable of August 29 from
Schwarts to them. Soimarts now Paris has been notified.
In accordance his instructions request sent Johannesburg
for monthly contribution toward winter budget France of
ten million france. After their meeting January expect
their decision.
NORNEB
RR
146
PLAIN
DSH-1308
Lisben
Dated December 26, 1944
Ree'd
10:05 p.m.
Secretary of State,
Washington.
4287, Twenty-sixth
WRB 279, JDC 141. FOR LEAVITT FROM PIEPEL.
Yugeslav Red Cross providing food parcels, other assistance
to approximately 1,200 Topuske and 140 Split and community kitchen
established Topuske. All foregoing basis funds we supplying
Resnik; hopeful arrange emigration for 600 of when 400 Yugoslavians
non-military age, 100 non-Tugeslavians and 100 children.
NORWEB
JT
147
NOT TO BE RE-TRANSMITTED
COPY NO.
4
SECRET
OPTEL No. 418
Information received up to 10 a.m., 26th December, 1944.
1. NAVAL
One of H.M. Frigates damaged yesterday by mine or tor-
pedo off Ostend.
Yesterday a Canadian Liberator made promising attack on
U-boat off Halifax.
2, MILITARY
WESTERN FRONT. On Southern flank of German breakthrough
further advances of 2 to 3 miles made to east and north of Ettelbruck. U.S. armour attacking towards Bastogne from the south not
yet succeeded in linking up with forces cut off in this area.
Wireless contact however established and surrounded troops can
direct artillery fire of relieving forces. Germans have maintained
heavy pressure on northern flank and our forces have withdrawn
from the Vielsalm salient. Line now runs from Malmedy westwards
through Stavelot - Grandmenil - Hotton - Marche - Boissonville Celles to Dinant.
ITALY. Some improvement in weather on 8th Army front,
but snow still lying and activity confined largely to patrols.
Operations north of Faenza to clear Germans from east of River
Senio are continuing.
EASTERN FRONT. Russians report progress in Czecho-
slovakia and have cut all main railway lines running westwards
from Budapest.
GREECE. In Atnens, Kallithea and adjoining district of
Kharokopos cleared against light opposition. Our forces have
also made further gains west of the Acropolis and almost half the
capital now under British control. Good progress in Piraeus
where our troops gained further ground north of harbour. EDES
have made further withdrawals in Epirus.
3. AIR
WESTERN FRONT. 24th/25th. Cologne railway centre -
549 tons. Bonn airfield - 491, 2 trains blown up, 6 others des-
troyed and 13 German aircraft shot down by bomber support and
tactical aircraft in battle areas.
25th. 389 U.S. heevy bombers (11 missing) escorted
by 450 Mustangs (40 outstanding of which 32 believed safe) dropped
992 tons on railway bridges, communication centres, etc., Western
Germany. Of about 400 enemy fighters seen, 49 claimed destroyed.
About 700 medium bombers (7 missing) dropped over 1100 tons on
railway bridges and communication centres in the central battle
front areas.
About 2200 fighters and fighter bombers (30 missing)
carried out offensive operations. 100 armoured vehicles, 875
motor vehicles, over 250 railway wagons and 18 locomotives destroyed and 34 German aircraft shot down.
148
TREASURY DEPARTMENT
Washington,
ASSISTANT SECRETARY
December 27, 1944.
Dear Henry:
I have just had a talk with Harry about the proposed
book and I am more strongly than ever of the opinion that
it will not be possible to publish it over your signature
as Secretary of the Treasury.
Choosing some other means of getting it before the
public may result in some loss in circulation but I think
it could be handled in such a way as to minimize this and
perhaps even to gain in effect upon public opinion. It
seems to me that the book might be published under the
title "The Morgenthau Plan", with some such sub-title as
"A Discussion of the Treatment to be Accorded Germany"
and I would think it might be possible for you to write a
brief foreword. In this foreword, if I were you, I would
not say that the book represents your ideas but simply
that to be lasting in effect any measures adopted for the
treatment of Germany must be understood and approved by
the people of the United Nations and in particular by the
people of the United States. Therefore you heartily
approve all candid and honest discussion of this problem
and from this point of view you commend this book to the
attention of the American people.
Somebody of substance and reputation should be selected
to write the book, using our memoranda of course as a basis.
The title could be justified by a statement to the effect
that published articles purporting to reveal your opinion
on the peace settlement indicate views consistent with
those expressed in the book. The author has therefore,
with your consent, adopted the title "The Morgenthau Plan"
for his book, which presents the general outline of a
settlement with which he is in complete agreement.
I think it possible that a plan of this kind might be
PORVICTORY
BUY
WAR
BONDS
practicable and the book could have a very wide circulation.
149
-2I am told that when Rex Stout and Clifton Fadiman
were here last week they expressed ideas somewhat along
this line, but that Cass Canfield thought the book should
have your signature. I suggest that the publisher is
thinking more of sales than of the total effect and that
the judgment of the two writers is much better from the
latter standpoint.
Faithfully,
thent
The Honorable Henry Morgenthau, Jr.
Hopewell Junction, New York
150
FEDERAL RESERVE BANK
OF NEW YORK
7
December 27, 1944.
Honorable Henry Morgenthau, Jr.,
Secretary of the Treasury,
Treasury Department,
Washington 25, D. C.
Dear Secretary Morgenthau:
In the absence of Mr. Eccles, Chairman of the Federal Open Market
Committee and its Executive Committee, I am writing to acknowledge your letter of December 22, 1944, concerning recent developments in the market for
Treasury certificates of indebtedness. I think that a mutual understanding
of both our problems and our responsibilities with respect to this market,
and a reconsideration of the best ways of meeting these problems and re-
sponsibilities, is much to be desired. I and my associates on the Executive
Committee of the Federal Open Market Committee are glad, therefore, that an
early meeting has been arranged at which Mr. Eccles and I can discuss the
whole matter with you and Mr. Bell. Meanwhile, your letter will be placed
before all members of the Federal Open Market Committee so that they may be
aware of your views.
Without attempting to anticipate our discussion of the specific
problem which called forth your letter, and without attempting to speak for
the whole Open Market Committee, I think it desirable to dispel at once certain implications which might be drawn from your letter. First, whatever
views Mr. Eccles and I may have held about the desirability of a rise in
short-term rates of interest, neither we nor the other members of the Committee have at any time contemplated seeking this end through a unilateral
departure from our understanding with you, and we do not now feel that there
has been a breach of this understanding. If we differ, it is on the terms
of the understanding, not our continued adherence to it. My own concept of
that understanding has been that we would try to maintain such conditions in
the money market, and in the Government security market, as would enable the
Treasury to finance the war at the general level of interest rates prevailing
in the spring of 1942. This commitment has been kept right up to the present
time.
Our satisfaction with this accomplishment suggests my second comment
on your letter. At the outbreak of the war in December 1941, we immediately
took the position which you have taken, namely, that the war should not be
financed, as was the last one, at rising rates of interest. We have never
deviated from that opinion and that purpose, either in public or in private.
Whatever suggestions we have made concerning short-term rates of interest
CTORY
BUY
WAR
BONDS
STAMPS
have anticipated that one result would be a reduction of the over-all cost
of the Treasury's war financing, through enhancement of the appeal of the
151
FEDERAL RESERVE BANK OF NEW YORK
2.
Hon. Henry Morgenthau, Jr.
12/27/44.
shorter low rate obligations as compared with the longer-term obligations
bearing higher coupons. This thread has run through all of our recommendanot tions and our discussion memoranda right up to the present time. We should
want anyone to believe, therefore, that there has been any division of
opinion between you and us on this important matter.
Our difficulties, it seems to me, have not been in finding agree-
ment tion and on the broad outlines of the war financing program, but in interpretaexecution of that program in areas where the Federal Open Market
Committee this has a special responsibility. It will be our purpose to discuss
with you at the meeting which has been arranged early in January.
Yours sincerely,
Manyone
Allan Sproul, Vice Chairman,
Federal Open Market Committee.
152
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE 1/8/45
TO
FROM
Mr. Do W. Bell
Secretary Morgenthau
I understand that Eccles will get back here
tomorrow. I wish you would see whether you can get
him to answer my letter of December 22nd.
allo in while catin Store. low
steamsaway.
were
been
pens
153
free w
Doc 22,1944
Dear Marrinor:
As Under Secretary Bell has indicated to you from time
to time during the course of the past month or so, the
Treasury Department is concerned over the rise in the pattern
of interest rates on certificates of indebtedness, pasticularly
those of short term. which has been permitted to take place
during this fall.
The extent of this rise is shown by the enclosed short,
which compares the pattern of rates on certificates of indebtedness as of September 1, 1942. September 1, 1943. September 1,
1944, and December 19. 1944. The point on the yield curve for
certificates of three months' maturity, which was about 0.46
percent on September 1. 1944, had rises to about 0.68 percent
by December 19. The September 1 yields, as shown is the chart,
were in line with the pattern of rates which had been maintained
for the previous two years; while the yield curve on December 19
was markedly out of line with that pattern. This rise in the
yields of short-term certificates of indebtedness places them
entirely out of line with the 3/8 of one percent rate on three-
month Treasury bills.
You will recall that, at the discussions leading w to
the establishment of the present pattern of rates. both you
and Mr. Sproul believed that short rates should be fixed at
a level higher than was finally desided upon. Both of you
agreed, however, at a meeting held in my of fice on March 20,
1942, that the Federal Reserve System could and would execute
any pattern of rates which I sight decide was required for
the efficient and economical financing of the var. This has
centioned to be our understanding ever since that time.
During this period, the Federal Open Market Committee
has proposed increases in short-term interest rates on several
occasions. I have felt myself compelled, as the Government
officer principally responsible for the financing of the war,
154
-2to reject these proposals in each case. As you know, I fool
very strongly that this war should not be financed, as was the
last one, at rising rates of interest. Up to the surrent rise
in certificate yields, the patters of rates set in 1942 has
been held extremely well; and I have, from time to time,
commended you and many of year colleagues upon year fine
performance of the promise which you had made to me, and have
told you what a major rele 18 has played in the efficient
financing of the war.
It seems to me that the present rice in the yields of
Treasury certificates of indebtedness constitutes a departure
from the patters of rates which yes had agreed to maintain:
and I should, therefore, like to request the Federal Open
Market Committee to take appropriate steps, ever a suitable
period of time, to bring the yields of Treasury certificates
of indebtedness back to approximately their September 1 levels.
Sincerely,
Henerable Marrinor s. Neeles
Chairman. Federal Open
Market Committee
Washington, D. 0.
Enclosure
155
RESTRICTED
FROM
LONDON
Secretary of State
Washington
DATED Dec. 27, 1944.
RECD. Jan. 4, 1945
A-1499, December 27, 1944.
9 a.m.
For the Department and War Refugee Board.
The following is the text of a letter dated December 22 and received today from the Refugee Department of
the Foreign Office:
"The following is the substance of a telegram from
Stockholm about the position of Jews in Hungary, which I
read
to you this afternoon. The date of the report is
December 8th.
About 40,000 Jews, comprising 15,000 men from the
labour service and 25,000 mon and women rounded up in
their homes or on the streets, have been forced to march
240 kilometres to Germany. Enroute they had to sleep
in the open, in cold and rain, and the majority were fed
only three or four times during the whole Journey. Many
died, and there was conclusive evidence of 14 deaths in
two days at Mosonmagyarovar; a secretary of the Portuguese Legation saw 42 dead; anyone unable to continue
the march was shot.
At the frontier the Jews were taken over by the
S.S. Special Kormande, brutally treated and drafted to
work on frontier fortifications. 20,000 defence labour
service Jews had also been sent by rail to the frontier
and the majority put to work on Hungarian territory.
Fortification work around Budapest has ceased.
Jews in Budapest are being collected in a central
ghetto, assigned to hold 60,000 persons and in a ghetto
for Jews holding foreign protective passports, designed
for 17,000 but already containing 35,000. Thousands
of Jews gradually removed from the latter ghetto to the
central ghetto.
Arrow dross men are behaving very cruelly towards
the Jows."
This is not being telegraphed in view of the fact
that the original report was dated December 8, 1944.
CJW:MJA
WINANT
156
MF-1544
Distribution of true
reading only by special
arrangement. (SECRET w)
London
Dated December 27, 1944
Rec'd 5:42 p.m.
Secretary of State
Washington
11461, December 27, 6 p.m.
FOR PEHLE FROM MANN
Intergovernmental Committee Refugees proposes to
send equivalents $300,000 to Rumania, $50,000 to North
Italy and by credit to raise equivalent $300,000 in
Hungary for refugee relief. Transfers will be accom-
plished in case Rumania and North Italy by buying
currencies of those countries in Switserland while taking
precautions to see that no assistance is given the enemy.
It is understood IOC intends to use Joint Distribution
Committee as agent in making proposed transfers but we
do not know whether JDC has yet been fully informed by
IGC or whether license application filed. Matter taken
up by IOC with British Treasury which approved. IGC now
asks approval of United States authorities before giving
instructions to JDC.
While it appears proposals regard Hungary and North
Italy within policies approved and followed by our Covernment there appears to be some question concerning proposed
method of transfer to Rumania which is liberated. We
asked IGC and British Treasury whether Russians had been
consulted and if they were likely to object to trans-
action as proposed. Both said Russians not consulted
and neither seemed concerned about their attitude to
proposed transfer. Refugee section British Foreign
Office has given tentative approval pending further
clearance with political sections. We have no objections
to any of proposed transactions (regard Rumania see
Embassy's No. 11434 of December 25) but it seems consideration should be given to making Rumanian transfers
through occupying forces unless that would entail too
great delay. Please consult with Treasury and cable
urgently reply to be made to IOC.
WINANT
JM
157
LC-1582
Distrubition of true
London
reading only by special
arrangement. (SECRET w)
Dated December 27, 1944
Rec'd 7:50 p.m.
Secretary of State,
Washington.
11471, December 27, 7 p.m.
FOR PEHLE FROM MANN
I have had several conversations and conducted
written correspondence with Oldenbrook concerning
funds mentioned in WRB 29. Oldenbrook states equivalent
of $90,000 was made available in Holland in August
or September by Dutch Minister for Home Affairs Mr.
J. A. W. Burger. Burgar has been in unoccupied Holland
for some time but is expected back shortly. Olden-
broek's statements do not appear to be based upon
actual knowledge but rather upon circumstances such
as fact that Minister gave instructions and reports
of a friend that the labor movement in Holland has
received a large sum of money. Oldenbroek's written
statements could not be called "assurances that
Dutch Government has turned over equivalent amount
for relief in occupied Holland". While he is said
by all to be honest and dependable it seems to be
that he does not have sufficient knowledge at this
time to give assurances. I shall attempt to reach
Burger upon his return here and obtain more satisfactory information. If as Oldenbrook states funds
have been made available relief in Holland is not
being held up by delay in reimbursing.
WINANT
WSB
Miss Chauncey (for the Sec'y) Ackermann, Aksin, Cohn, Drury,
DuBois, Gaston, Hodel, Marks, McCormack, Pehle, Files
158
CABLE TO AMERICAN LEGATION, TANGIERS, FROM WAR REFUGEE BOARD
Please deliver the following message to Renee Reichman, 23 Rue Moliere,
Tangiers, from Rabbis A. Kotler and A. Kalmanowitz, Vaad Hahatzala Emergency
Committee:
QUOTE YOURS DECEMBER 25 RECEIVED. CONTINUE YOUR FINE WORK.
WILL CABLE YOU ADDITIONAL 6,000 DOLLARS ON GRANT OF LICENSE.
INVESTIGATE ENDEAVOR SECURE INFORMATION ON LEA AUSTERN
THERESIENSTADT AND BUBI KLEIN UNQUOTE
11:45 a.m.
December 27, 1944
159
ALH-1726
PLAIN
Lisbon
Dated December 27, 1944
Rec'd 10:11 a.m., 28th
Secretary of State
Washington
4297, Twenty-seventh
JDC 142 WRB 280 FOR LEAVITT FROM PILPEL
Resnik received one million lira for Yugoslav
relief Saly Mayer received $400,000.
NORWEB
RR
160
CABLE TO AMERICAN LEGATION, STOCKHOLM, FROM WAR REFUGEE BOARD
Please deliver the following message to Fritz Hollander,
Congress Committee Postbox 7306, Stockholm, from Dr. Arieh
Tartakower, World Jewish Congress:
QUOTE Kindly have foodparcels forwarded following Bergen-
belsen inmates: Ellon, Alexander; Florsheim, Ilse & son;
Heidemann, Siegfried, Mr. & Mrs.; Hirschmann, Max, Senta,
Marianne, Eva, Bella, Julius; Isaac, Ruth Sara; Kaufmann,
Ernst, Recha, Bernard, Lea; Rosenthal, Mr. & Mrs. Gottfried;
Rosenthal, nee Goldschmidt, Maria, Erich, Elisabeth; Schwarzer,
Moritz; Stein, Hans; Wreschner, Arnold H., Alice, Stephen,
Robert, Gaby; Zimmer, Alexander, Minna, Thea, Lotte, Edith.
UNQUOTE
THIS IS WRB STOCKHOLM CABLE NO. 276
11:00 a.m.
December 27, 1944
BAkzin:ar
12/26/44
161
NOT TO BE RE-TRANSMITTED
COPY NO.
4
SECRET
OPTEL No. 419
Information received up to 10 a m., 27th December, 1944.
1. NAVAL
HOME WATERS. 26th. Two of H.M. Frigates torpedoed off
Cap de la Hague. One sunk but the other reached port under own
power. U-boat is being attacked. Off mouth of Scheldt, 2 midget
U-boats sunk by H.M. ships and 1 probably 2, by Typhoons. 2 Norwegian M.T.B.'s sank cargo ship of 1800 tons and damaged escort
vessel 80 miles north of Bergen.
2. MILITARY
WESTERN FRONT. During 25th slight progress made on
southern flank of German penetration west of Echternach. Bigger
gains, averaging 2 miles, made on whole front between Ettelbruck
and Franco- Luxembourg frontier.
26th. Supplies and ammunition successfully flown into
U.S. garrison at Bastogne During both days little change on
northern flank of German penetration, but several German attacks
repulsed, while a U.S. attack on Grandmenil reached northern out-
skirts of town. Slight gains south of Duren.
EASTERN FRONT. Germans report Russians have extended
attacks in Latvia with no important success. Russians report
advance from west of Budapest continued, Esztergom occupied and
encirclement Budapest completed.
BURMA. Our troops have advanced down Myitkyina-Mandalay
railway from Kawlin to within 20 miles of Ye-U.
3. AIR
WESTERN FRONT. 26th. 274 escorted Bomber Command air-
craft (2 missing) attacked concentrations of armour, troops and
supplies at St. Vith, dropping 1131 tons in clear weather.
Excellent concentrations achieved. 129 escorted U.S. heavies
dropped 317 tons on railway centres, bridges and other targets in
Coblenz area. Results varied. 11 enemy aircraft destroyed. Our
loss - 11 fighters, 8 believed safe. 282 medium bombers dropped
480 tons on railway targets in Western Germany. Results generally
good. 1916 fighters and fighter bombers operated over battle
area, mainly in central sector. 1496 vehicles destroyed or
damaged, including 134 tanks. Enemy casualties 63,6,29. 34
Allied fighters missing or outstanding. 14 Mosquitoes (1 missing)
attacked 2 ships of 2,500 and 1,500 tons off Norwegian coast,
1 damaged, other left on fire and sinking.
MEDITERRANEAN. 25th. 386 escorted Fortresses and
Liberators (11 bombers, 2 fighters missing) bombed oil refinery
at Brux - 314 tons, railway centres at Wels - 182 tons, Innsbruck 85 tons, Hall near Innsbruck .. 75 tons, and Grax - 39 tons. Results good. 632 medium bombers (3 missing) fighter bombers and
fighters attacked close support targets and communications North
Italy.
4.
HOME SECURITY
Up to 7 a.m. 27th. 4 rockets reported during night.
This document Contains Information affecting the national defense of the
United States within the meaning of the Espione Act, 50 U. S. C., 31 and
32,
as amended. Its transmission or the revelation of its contents in any manner
to an unauthorized person is prohibited by law.
162
THE WHITE HOUSE
WASHINGTON
December 28, 1944.
MEMORANDUM FOR
THE SECRETARY OF THE TREASURY
I am delighted that the hearings
are going to start on the Bretton
Woods Agreement when the House reconvenes.
Also, I will send up Harry
White's name, and I am dropping a
line to Bob Hannegan to that
effect.
F. D. R.
(pent to Pree at 163
Hybe Fort while
December 28, 1944.
MEMORANDUM FOR
THE PRESIDENT
My dear Mr. President:
I want to write to you about two subjects. The
first is the so-called Bretton Woods Agreement. The House is
prepared to start hearings at the beginning of the new session.
We are ready to present the arguments in favor of the Bill. I
am counting on your continued full backing of this measure. I
am afraid some of the banking interests are going to fight us.
We have a good case and believe the attitude of the Congress
will be non-partisan. May I receive a word of encouragement
from you on this matter?
In connection with Harry White, I sincerely
hope you will send his name up as Assistant Secretary of the
Treasury to the Senate on the first day. He will have to
carry the brunt of the fight of the Bretton Woods legislation
and the additional prestige of being Assistant Secretary will
be most useful. He has earned this reward many times over.
The Administration needs him in the field in which he has
distinguished himself so brilliantly. White has been more
than a match for people like Lord Keynes. I strongly recommend
his promotion.
H. M., JR.
9.15,HHM, abe 28,14476
my dear Mr. Pre
I want to
write to you about two
subjects
The first is the so called
Butter Woods agreement.
The House is prehard
to start hearings at
the beginning of the new
session. We an ready
to Awaret the arguments
in farm of the till continued I
am counting an your
full
backing of this
measure.
Iam afraid same of 165
the banking interest
an going the fight us.
We have a good case
and believe the atti tude
of the compress will be
non- hartisan.
may Inceive a and of
in chanagement from you
an this matter
Second In connection
with Harry White. I
sincerely hope you as will online to K
send his maine of
the Simplemen
in the first
willa have
to
day, was
He of
the
the bust
Brettin woods legislation
caing fight in the hill and
166
this additional pristige
will be mostureful.
He has earned This
reward many times
over. an The a aministration
nuds him in the field
which he has destinguished
himself so brialliantly.
White has fun more Rety
match fu people like
Lud Keynes. and Ifat
I stringly uncumend
hi promotion .
167
TREASURY DEPARTMENT
OFFICE OF THE SECRETARY
December 28, 1944
CONFIDENTIAL
Received this date from the Federal Reserve Bank
of New York, for the confidential information of the
Secretary of the Treasury, compilation for the week
ended December 20, 1944, showing dollar disbursements
out of the British Empire and French accounts at the
Federal Reserve Bank of New York and the means by
which these expenditures were financed.
EmB
168
FEDERAL RESERVE BANK
OF NEW YORK
December 27, 1944.
CONFIDENTIAL
Dear Mr. Secretary: Attention: Mr. H. D. White
I am enclosing our compilation for the week ended
December 20, 1944, showing dollar disbursements out of the
British Empire and French accounts at this bank and the means
by which these expenditures were financed.
Very truly yours,
/s/ H. L. Sanford
H. L. Sanford,
Assistant Vice President.
The Honorable Henry Morgenthau, Jr.
Secretary of the Treasury,
Washington 25, D.C.
Enclosure
COPY
Strictly
ANKLISS OF BRITISH AND FRENCH ...CCOUNTS
Wook Ended December 20g 1944 Confidential
(In Millions of Dollars)
PERIOD
War Youra &
First
Expondi-
total
Debite
12,793.2
taros
to
Official
Canadian
Account
CREDITS
Balon
Other
Dobita
20.9
1,166.7
904,8
3.4
7.2
407.4
764.0
32.7
170.4
1,197.2
300.4
61.4
223.1
280.9
835.9
151.0
19.9
50.4
80.7
327.9
21.0
7.4
99.5
56.5
54.7
74.2
45.4
2.9
25.9
92.1
Nonembar 29 1944
December 6. 1944
21.2
10.1
16.0
7.3
Dacambar 13. 1944
December 20. 1944
27.5
23.1
Second
Third
Fourth
Fifth
2,203.0
1,235.6
605.6
1,792.2
Torricial
Total
Credits
1,828.2
2,189.8
1.361,5
1,072.3
1,369.6
01
Gold
1,356.1
1,193.7
21.8
-
Trans cro
official
Australian
Account
Not Incr.
Other
Credits
October
November
December
Total
in 8 Funds
(d)
Debits
52.0
3.9
(c)
416.2
274.0
16.7
705.4
- 13.2
5.5
57.4
1,276.8
0.5
155.1
253.0
916.7
+ 125.9
+ 308.3
1,116.6
+171.9
- 94.5
(b)
-
1944
September
or Docr.()
-
-
1.0
55.5
-
-
1.0
53.7
91.1
1.0
-
+ 35.0
73.2
(a)
866.3 (f)
Total
Credits
(a)
1,095.3 (6)
38.9
8.8
18.5
10.3
4.4
Not Incr. (+)
or Deer. (-)
in J Funds
(d)
+ 299.0
- 30.1
- 14.1
9.3
1,0
-
=
DEBITS
Gov't
BANK OF FRICE
B.JNK OF ENGL.ND (BRITISH GOVERNEENT)
-
-
-
-
-
+ 17.9
1945
January
February
March
April
May
June
July
August
Wook Endod
-
8.7
21.5
4.4
6.2
2.5
44.9
Average Weekly Expand turns Since Onthroak of Mar
Franco (through Juno 19, 1940) $19.6 million
England (through Juno 19, 1940) $27.6 million
England (through Juno 20, 1940 to March 12, 1941) 354.9 million
England (sinco Harch 12, 1941) $21.8 million
-
1.0
-
-
-
7.3
-
5.6
-
10.5
-
8.1
-
-
-
- 13.9
-
7.3
20.5
+ 4.0
6.2
- 21.3
50.1
10
- 49.1
+ 36.8
0.5
0.4
- 0.1
44.9(b
5.2
0.3
4.9
Soc attached sheet for footnotes.
(a) Includes payments for account of British Ministry of Supply Mission, British Supply Board, Ministry of Supply Timber
Control, and Ministry of Shipping.
(b) Estinated 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 the
to the official selling, substantial liquidation of securities for private British account occurred, particularly during
early months of the war, although the receipt of the proceeds at this Bank cannot be identified with any accuracy. According
to data supplied by the British Treasury and released by Secretary Liorgenthau, total official and private British liquidation
of our securities through December, 1940 amounted to $334 million.
(c)
Includes about 385 million received during October, 1939 from the accounts of British authorized banks with New York banks,
presumably reflecting the requisitioning of private dollar balances. Other largo transfers from such accounts since October,
1939 apparently represont current acquisitions of procoeds of exports from tho storling area and other accruing dollar
receipts. Soe (k) below.
(d) Reflects not chango in all dollar holdings payablo on dowand or maturing in ono year.
(o) For broakdown by types of dobits and crodits 800 tabulations prior to Earch 10, 1943.
(f) Adjusted to eliminate the effect of $20 million paid out on Juno 26, 1940 and roturnod the following day.
(g) For monthly broakdown SOO tabulations prior to April 23, 1941; October 8, 1941; October 14, 1942; Soptonbor 29, 1943; September 6,
(h) Includes 3 18. .million apparently representing current and accumulated dollar procoods of storling area services and
merchandise exports, and $24.0 million representing payment to armed forces abroad.
(1) Transactions for account of Caisse Central de la France d'Outre-Mer included for first time in wook ended December 6, 1944.
⑉
Strictly
VISIS OF CANADIAN AND AUSTRALIAN ACCOUNTS
(In Millions of Dollars)
DEBITS
BANK
Procoods
to
Bar Years (a)
First
Second
Total
Debita
323.0
460.4
Third
$25.1
Fourth
723.6
Extra
of
Others
Total
A/C
pobita
Credite
16.6
306.41
460.4
e
PERIOD
Official
Brittah
0,3
Sales
For Own
A/C
A/C
20.9
462.0
246.2
3.4
38.7
123.9
525.5
566.3
198.6
7.7
723.6
958.8
47.1
38.1
170.4
-
848.3
958.5
74.5
0.1
74.4
91.8
1022
2465
For French
12.7
1,0
24
Gold
38.8
38.8
53.7
8.1
8.1
2.8
8.1
8.1
3.9
8.8
61.4
-
-
-
29
Total
Official
British
Net Incr.
(+) or
Proceeds
to
of
Other
Debits
Total
Gold
Other
Credits
Sales
Credits
Decr. (-)
in $ Funds
Lebits
32.4
+ 181.7
31.2
3.9
88.5
360.0
72.2
+ 40.5
107.2
16.7
57.4
55.5
49.8
741.3
235.2
197.0
155.1
41.9
+ 283.3
298.6
253.0
45.6
***
5.8
4.8
7.3
7.3
1.5
20.5
1.0
1.0
19.5
21.0
21.0
0.5
34
1.0
2.4
5.8
5.8
2.4
01
0.9
0.9
0.8
2.1
3.5.
3.5
On4
1.0
141
1.1
0.3
0.1
761
VM
-
Net Incr.
(+) or
Dear. (-)
SPunds
41.4
50.4
-
Other
Credits
859.0
-
CREDITS
DEBITS
Transfers
Transfers from official
British A/C
304.77
849.3
BANK OF (and Australian Government
and Government)
OF
Transfers
Wook Ended December 20. 1944 Confidential
+ 1.6
50.8
17.3(F)
+14.9
A/C
27.3
36.1
30.0
6.1
81.2
62.9
17.2
18.3
90
95.0
5.0
112.2
200.4
287.7
-
-
200.4
287.7
4.9
+
3.4
10.9
August
Weak Ended
Noxambar 29. 1944
December 6, 1944
December 13, 1944
December 20g 1944
3.9
[41
(a)
cm
Average Woekly exponditures for
First year of war
Second year of war
Third yoar of war
Fourth year of war
Fifth year of war
Sixth your of war through December 20, 1944)
20
11.5 (a)
5.3
0.1
8.8
+ 0.7
3.1
3.0
0.9
14.5(4)
-
6.2 million.
8.9 million
10.1 million.
13.9 million.
16.1 million.
7.4 million.
2.8
9.1
-
1.0
(x)
1.0
-
- (r)
(a) For monthly broakdowns soo tabulations prior to: April 23, 1941; October 8, 1941;
October 14, 1942; September 29, 1943; September 6, 1944.
Reflects changos in all dollar holdings payable on donand or naturing in one year.
(c) Does not refloct transactions in short term U. S. securities.
(b)
(d) Includes a 6.9
and S 7.3
(r) Revised.
million deposited by War Supplies, Ltd.
million received from Now York accounts of Canadian chartered banks,
172
POLYCEORY
BUY
EXECUTIVE OFFICE OF THE PRESIDENT
WAR
WAR REFUGEE BOARD
WASHINGTON 25, D.C.
OFFICE OF THE
EXECUTIVE DIRECTOR
DEC 28 1944
My dear Mr. Secretary:
I am pleased to send you herewith a copy
of the report of the War Refugee Board for the week
of December 11 to 16, 1944.
Very truly yours,
from
J/. W. Pehle
Executive Director
The Honorable,
The Secretary of the Treasury.
Enclosure.
173
Report of the War Refugee Board
for the Week of December 11 to 16, 1944
SITUATION IN HUNGARY
Information received from Representative Katzki confirmed
reports from Representative McClelland last week concerning
deportations of Jews from Budapest on foot. As a result
of their lack of food or clothing and the sadistic treatment
which they received, 20% of the deportees died before reaching Hegyeshalom, according to estimates of escorting personnel.
Local efforts were successfully made to have the upper age
limit for deportees reduced, and deportations were said to
have ceased on November 22.
Supplemental information which Representative McClelland
received from a trustworthy private source indicates the
disposition to be made of the 100,000 Jews remaining in
Budapest. Some 80,000 persons are being concentrated in a
ghetto located in the seventh "arrondissement" of the city,
a section comprising about 162 Jewish, 133 Christian, and
101 "mixed" houses. The number of rooms available for the
80,000 Jews there was estimated at 10,000 by the Hungarian
office in charge of this concentration. About 20,000 Jews
will be left in other parts of Budapest. It was also reported
that the former Jewish Senate "de facto" was dissolved toward
the end of November and that Jewish representation within
the narrow limits left them by the Szalasy regime and the
Gestapo has been taken over by a smaller group headed by a
Dr. Karl Wilhelm.
Representative McClelland advised us that, in accordance
with our request, the Swiss authorities and the International
Red Cross have been asked to obtain through their representations in Budapest whatever information they can from German
and Hungarian authorities regarding the present status of
Jews in Budapest who hold Spanish protective papers and entry
visas.
SITUATION IN SLOVAKIA
Representative McClelland was reliably informed by an
individual who left Bratislava about December 1 that as of
that date there were approximately 900 Jews in Bratislava
and some 2,500 to 3,000 in the German-occupied provinces
who have succeeded in hiding and thus far escaping deportation. In the camp at Sered there then remained only about
150 persons, the majority of whom are half-Jews ("Mischlingen")
174
-2and Jewish partners of mixed marriages. Virtually all other
Jews have been deported.
When approached by the Swiss regarding Jewish claimants to
American nationality interned in or removed from Slovakia,
the Chief of the Legal Section of the German Foreign Office
indicated that at the time of the actual dissolution of the
camp at Marianka by German authorities, eight American
nationals considered by German authorities as of Jewish
origin were left there. The German official stated that
he is awaiting the decision of the Slovak Government with
respect to the request made by the German Government for its
concurrence in the transfer to Germany of these e 1ght persons
in order that they might be included in a proposed German-
American exchange.
SITUATION IN POLAND
Ambassador Harriman cabled us information obtained from
Polish sources in Moscow concerning the fate of Jewish refugees
in Eastern Europe. According to his information, 20,000 Jews
have been found in Polish territory liberated by the Soviets;
of these, 2,000 are in the city of Lublin. There are said to
be about 150,000 Polish Jews in the Soviet Union. A Central
Jewish Committee has been organized in Lublin, and funds have
been allotted to it to be used for the rehabilitation of Jews
in the liberated area. The projects to which these funds will
be applied include the establishment of mess halls, schools,
children's homes, hospitals, communal kitchens, etc.
RELIEF FOR UNASSIMILATED INTERNEES IN GERMAN CONCENTRATION CAMPS
A further report on the distribution of 25,600 parcels made up
of foodstuffs from salvaged S/S "Christina" cargo was received
from Representative McClelland. The parcels were distributed
to unassimilated persons in the following concentration camps:
Hamburg-Neuengamme
Natzweiler
Weimar-Schliessfach
Mauthausen
Bergen-Belsen
Feldpost 07702*
3,799
2,688
1,277
1,100
685
520
378
206
II
Ravensbrueck (Women's camp)
7,273
II
Sachsenhausen-Oranienburg
Dachau
7,694 parcels
=
Buchenwald
*Designation for a camp in which a number of prominent
French political deportees are held and the location
of which the Germans refuse to reveal.
175
3
McClelland also described the manner in which a contribution
to the International Red Cross by a private organization
has been used for Jewish relief. Funds were sent to Rumania
through the Intercross delegate in Bucharest for the purchase
of food and clothing and for financial relief to Jewish
refugees, especially returning Transnistrian deportees.
Medical supplies were shipped by the Joint Relief Commission
of Intercross to Bergen-Belsen, the Jewish community at
Zagreb (including camps in Croatia), Theresienstadt, Birkenau,
and to the "Judische Unterstutzungsstelle" (Jewish Relief
Committee) in Cracow. Food shipments, both collective and
in parcels, were made to Cracow in May, June, and July, to
Theresienstadt in July (two), to Budapest in June (condensed
milk
for children), to Birkenau in September, and to BergenBelsen in November.
We recently cabled our Legation in Stockholm that shipment
of 224,328 parcels was being made to Gothenburg instead of
to Marseilles because of lack of shipping facilities to the
latter port. The Foreign Office has advised Minister Johnson
that the Swedish authorities have no objection to these
parcels being forwarded to Germany from Sweden by Intercross
ships, it being understood that the parcels are to be handled
under Intercross auspices. In connection with our recent
request that the approval of appropriate Swedish officials
be sought for the offloading at Gothenburg of a shipment of
10,000 pounds of clothing approved by the Ministry of Economic
Warfare for distribution by Intercross to unassimilated
persons at Bergen-Belsen and other camps, Minister Johnson
cabled us that Swedish authorities have shown their full
readiness to cooperate.
INTERNEES AT BERGEN-BELSEN
Representative McClelland advised us that he is endeavoring
to obtain from competent sources all information available
concerning persons still at Bergen-Belsen who claim American
or Latin American nationality. He is also attempting to
compile a more general nominative list of internees remaining
in the camp 80 that War Refugee Board parcels may be sent to
them. He indicated that he would contact the group of
Hungarian Jews, whose arrival in Switzerland from BergenBelsen was reported last week, but that he did not expect
these people would be able to give him much precise data along
this line, since it is his understanding that they were
fairly well segregated from the other internees in the camp.
176
-4UNITED STATES VISAS FOR PERSONS IN ENEMY TERRITORY
In confirming receipt and transmission to the Swedish Foreign
Office of lists of persons eligible for inclusion in the
special visa programs developed to benefit certain categories
of persons in enemy territory, Minister Johnson advised us
that a Foreign Office official stated that no action has been
taken to forward these lists to Swedish Legations in the
countries concerned. To explain the position of the Swedish
authorities in doubting that such action would benefit the
individuals involved, it was pointed out that they are loath
to do anything which could in any way jeopardize or retard the
program of special measures which have been taken during the
last few months by the Swedish Legation in Budapest to protect
about 15,000 Jewish proteges, about 5,000 of whom have Swedish
protective passports. The Swedish authorities are of the
opinion that presentation of the Board's lists to the Hungarian
Government would have an unfavorable result and might conceivably damage their other Jewish relief work, and that no
practical value is to be had by presenting such lists. With
respect to the Board's lists of persons in France, Germany,
Czechoslovakia, Poland, etc., the Swedish authorities, after
consultation with the Swedish Minister in Berlin, are reluctant
to submit the lists to the German Government in the fear
that presentation of these names would adversely affect the
outcome of the rather large number of special relief cases
already being handled. The Foreign Office accordingly
suggested that the Swiss Government could perhaps hand the
lists to the German Government with the recommendation that
advantage be taken of this opportunity to send Jews to the
United States. At the same time, Sweden could repeat the
assurances given to the Germans in August with respect to
its willingness to allow the entry into Sweden of any person
to whom an American immigration visa was issued on or after
July 1, 1944.
The Board immediately replied that, while we appreciate the
weight of the Swedish arguments and would be inclined to
accept them, we feel that the attention of the Foreign
Office should be drawn to the fact that, after having in-
formed the German Government in August that Sweden is will-
ing to allow the entry of persons with American immigration
visas, it would seem both necessary and logical for Sweden
to follow up this action by informing the Germans of the
names of the persons concerned. with respect to the
transmission of lists to Hungary, we advised him that we
agree that, in view of developments in Hungary, transmission
of the names of Jews still in Hungary would be of no likely
benefit, but that, since many Hungarian Jews have been
deported to Germany and Austria, we feel that the transmission
of their names may still be beneficial.
177
5LATIN AMERICAN PASSPORTS
Representative Mann advised us that the Chief Rabbis
Religious Emergency Council in London received a cable
from Stockholm stating that the validity of Ecuadoran
passports expires in January and requesting that the
President of Ecuador be asked to authorize the Ecuadoran
Consul in Stockholm to renew the validity of the passports
and to instruct the protecting power to protect interned
holders of such passports. Upon inquiry by the Intergovernmental Committee, the Ecuadoran Minister in London
stated that steps have been taken to prevent the use in
France of such passports as are legally invalid, but that
no steps have been taken to invalidate passports held by
people in enemy or enemy-occupied territory. He pointed
out, however, that all passports are valid only for one
year unless prolonged. The Intergovernmental Committee
requested the Ecuadoran Minister to ask his Government to
prolong all Ecuadoran passports held by Jews in Germany
or German-occupied territory. It was suggested that the
Board take the matter up with the Ecuador an Government,
requesting that all Ecuadoran passports, though irregularly
issued, be prolonged, and that no passports be invalidated,
even in liberated areas, since such action, if it becomes
known to the Germans, might prejudice any protection now
enjoyed by the holders of Ecuadoran passports who are in
German-controlled territory. We cabled this information
to our Embassy in Quito with the request that Ecuadoran
officials be approached with a view to having appropriate
instructions along the lines suggested sent to Ecuadoran
consuls in Stockholm and elsewhere.
Executive Director
Joseph W. Pehle
178
CABLE TO AMERICAN EMBASSY, PARIS, FROM WAR REFUGEE BOARD.
Please deliver following message to Dr. Marc Boegner, Chairman,
Sponsoring Committee, Comite Inter-Mouvements Aupres des Evacues, 47 Rue de
Clechy, Paris Nimes, from Dr. Leland Rex Robinson of the American Christian
Committee for Refugees:
QUOTE FOLLOWING CONFERENCE WITH LIVINGSTON WARNSHUIS CABLING
YOU $10,000 FOR CIMADE USE AS OUR REPRESENTATIVES FOR SERVICE REFUGEES
FROM OTHER COUNTRIES. THIS REPLACES SIMILAR AMOUNTS OTHERWISE
RECEIVABLE VIA GENEVA BUT WHICH NOW UNABLE REMIT THROUGH SWITZERLAND.
PLEASE KEEP US ALSO FREUDENBERG INFORMED. FREUDENBERG CONFIRMING
DIRECTLY. UNQUOTE
4:30 p.m.
December 28, 1944
179
CABLE TO AMERICAN CONSULATE, JERUSALEM, FROM WAR REFUGEE BOARD
Please deliver the following message to Judah Magnes from M. A. Leavitt,
American Jewish Joint Distribution Committee:
QUOTEE UNRRA DISCUSSED WITH US YOUR CABLE TO THEM REQUESTING
MEDICAL SUPPLIES FOR RUMANIA BULGARIA TO COMBAT TYPHUS MALARIA
OTHER EPIDEMICS STOP VIEW EMERGENCY SITUATION AND UNAVOIDABLE
DELAYS THAT MUST ENSUE BEFORE UNRRA CAN OPERATE THESE COUNTRIES
WE PREPARED PURCHASE FROM UNRRA SUCH SUPPLIES FOR SHIPMENT FOR
OUR ACCOUNT STOP IN ORDER DO so WE MUST HAVE ASSURANCES FROM
YOU THAT ARRANGEMENTS CAN BE MADE FOR SHIPPING SUPPLIES FROM
CATRO TO RUMANIA BULGARIA STOP PLEASE CABLE US SOONEST THAT
TRANSPORTATION FACILITIES AVAILABLE ALSO TO WHOM IN CATRO
SUPPLIES SHOULD BE CONSIGNED STOP NATURALLY SUPPLIES MUST BE
USED ON NON-SECTARIAN BASIS WHEREVER EPIDEMIC EXISTS UNQUOTE
11:45 a.m.
December 28, 1944
180
ORIGINAL TEXT OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
American Consul, Jerusalem
DATED:
December 28, 1944
NUMBER:
216
CONFIDENTIAL
Kurt R. Grossman, World Jewish Congress, transmits the
following:
"World Jewish Congress received through Isaac Weiseman
following cables from Rumanian and Bulgarian Legations
Lisbon. Bulgarian Cable reads quote Every facility will
be given Jewish emigrants to export household effects.
Regarding money at present in spite of entire willingness
of the Government it is not possible to give countervalue
in exchange since the National Bank does not possess
foreign exchange. With the development of Bulgarian
foreign commerce and acquisition of exchange everything
possible will be done to satisfy interested parties. B.
Athanassby unquote Rumanian cable reads quote Rumanian
Minister Foreign Affairs authorises me to send you
following message quote Rumanian Government ready to grant
all facilities to Jews wishing of their own accord to
emigrate to Palestine. Emigrants will be free to export
their furniture and personal belongings. Regarding
exportation of capitals and other valuables general
restrictions in force require further study with a view
of harmonizing legitimate interest of Rumanian National
economy and of national defense with the interest of the
emigrants. This study will be undertaken with greatest
understanding and goodwill unquote Regards Brutus Coste
unquote Have Executive continue negotiations with both
Governments
based
Concerning American
boats will advise
youthese
nextstatements.
week.'
STETTINIUS
181
CABLE TO AMERICAN LEGATION, BERN, FOR MCCLELLAND FROM WAR REFUGEE BOARD
Please deliver the following message to Isaac Sternbuch, St. Gallen,
from Rabbi A. Kalmanowitz of the Vaad Hahatzala Emergency Committee:
QUOTE CABLED YOU ADDITIONAL 428,861 SWISS FRANCS FOR RESCUE
WORK. ANXIOUSLY AWAIT DETAILED REPORTS EVERY PHASE RESCUE
PROGRAM DEVELOPING SITUATION NECESSITATES UTMOST SPEED AND
CONCERTED EFFORT RESCUE MAXIMUM NUMBER WITHOUT DELAY UNQUOTE
THIS IS WRB BERN CABLE NO. 339.
11:45 a.m.
December 28, 1944
182
CABLE TO AMERICAN LEGATION, BERN, FOR MC CLELLAND, FROM WAR REFUGEE BOARD.
Please deliver following message to Adolf Freudenberg, Geneva, from
Dr. Leland Rex Robinson of the American Christian Committee for Refugees, Inc.:
QUOTE REMITTING $10,000 FROM NON-CHURCH SOURCES DIRECTLY TO
CIMADE NIMES OWING EXCHANGE REGULATIONS PREVENTING TRANSFER VIA
SWITZERLAND. CABLING CIMADE AUTHORIZING USE REFUGEES FROM OTHER
COUNTRIES. CHURCH COLLECTIONS SLOW UNTIL JANUARY THEREFORE YOU MUST
CONSIDER THIS SUPPLANTS YOUR REMITTANCES FRANCE EQUIVALENT AMOUNT.
PLEASE COMMUNICATE IMMEDIATELY CIMADE CONFIRMING EXPLAINING THESE
INSTRUCTIONS. CABLES GRATEFULLY RECEIVED. RECEIVED FROM SHUSTER
TWO HUNDRED FOUR DOLLARS THIS YEAR. UNQUOTE
THIS IS WRB BERN CABLE NO. 341.
4:30 p.m.
December 28, 1944
MH-1801
Bern
reading only by special
Dated December 28, 1944
Distribution of true
arrangement. (SECRET #)
Rec'd 2:55 p.m.
Secretary of State,
Washington.
8373 December 28, 9 a.m.
Forward from McClelland.
Kindly deliver following message from Schwarts
to Leavitt of JDC.
Have sent you via pouch names Hungarian Jews
recently arrived Switzerland and also forwarding full
list all Jewish refugees who arrived Switzerland
since August 1942.
Passaan is already in London, therefore will
have to cut short my stay in France. will, however,
proceed Belgium if at all possible.
In connection with project to admit 14,000
Hungarian Jews to Switzerland, we have been officially
informed that 1,000 are now ready to leave Budapeat
and may arrive here shortly.
Please transmit to Saly Mayer $300,000 account
transportation from Balkans to Istanbul.
Glad hear success annual meeting.
HUDDLE
LMS
183
184
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMERICAN LEGATION, BERN
TO:
Secretary of State, Washington
DATED:
December 28, 1944
NUMBER:
8379
CONFIDENTIAL
The following message is from McClelland for WRB.
See Legation's 7997 of the seventh of December and
7269 of the first of November,
I have received communication from the Chief of Federal
Police dated the twenty second of December substance of which
is transmitted in my 8380 of the twenty eighth of December,
with regard to group of 1352 Jewish refugees originally from Hungary
and lately awaited in Switserland from Bergen-Belsen.
It is imperative that serious consideration be given
at once to the practical task of evacuating these refugees from
Swiss territory in view of this communication and with reference
to paragraph four of our 7269. Accordingly I should appreciate
data as to the plans of the Board in respect to this matter and
naturally stand ready to aid in any way possible on this side.
With regard to the Palestine angle of evacuation of
this group it might be wise to have Board's representative
m an in London consult with British officials to determine whether
the group can actually be admitted to Palestine.
HUDDLE
DCR:MLG
12/29/44
185
ASB-237
PLAIN
Bern
Dated December 28, 1944
Rec'd 8:33 p.m., 29th
Secretary of State,
Washington
8380, Twenty-eighth
"With reference to our conversation of December
14 I recently dispatched one of my assistants to Caux
where these refugees are temporarily housed in order to
determine composition of group. All ages and social
classes are represented although percentage of
intellectuals and professional men is relatively high.
The majority are Hungarians including persons from
Transylvania who acquired Rumanian nationality as a
result of Vienna arbitration but there are also a few
Poles, Slovake and Yugoslavs.
All these refugees intended to go to Palestine
some as young workers others as veteran Zionists or
prominent members of Jewish organizations, still others
to join relatives already there. Most of them had been
assured that they would be admitted although none of
them actually possess Palestine certificates or
equivalent document. On other hand they all hold
documents issued by Hungarian Red Cross or an inter-
national Jewish organisation stating that a Palestine
certificate in their name is available at Istanbul.
These documents were for most part issued shortly before
occupation of Hungary by Germans. For past few years
it appears that several thousands of Hungarian Jews
have gone to Haifa via Istanbul on basis of such documents.
All these Hungarians who recently arrived in Switzerland
originally intended to pick up their Palestine certifi-
cates in Istanbul and once in possession of them to
proceed to Haifa. Almost all of them have relatives
in Palestine. They do not know whether the certificates
supposedly available for them at Istanbul are still valid or
whether the Zionist organizations hage taken any steps
to assure their emigration. I believe that this infore
mation will permit you to form a rough idea of this
group of refugees as well as of the manner in which
their emigration might be organised. I should be extremely
186
grateful if you would use your influence to assure an
early departure of these refugees. It is particularly
important to know whether they can leave within the
next few weeks. If this is the case we will leave them
together. If on the other hand their departure must be
postponed for a certain time another solution must be
found. In any event, I should appreciate your letting
me know as soon as possible whether their departure can
take place in near future".
HUDDLE
MRM
187
MS-187
PLAIN
Bern
Dated December 28, 1944
Rec'd 6:46 P.M.
Secretary of State,
Washington.
8387, Twenty-eighth
FOR WRB FROM MCCLELLAND.
Kindly deliver to Leavitt JDC following message from
Schwarts:
"UNRRA Yugoslav Mission offered Resnik five members
British Jewish not on temporary basis. On Resnik's
recommendation have authorised him accept their services.
For your information OSE expects send medical mission
to Yugoalavia soon through Yugoslav Red Cross and we
trying arrange have one of our representatives possible
from France accompany unit.
Please advise status Isreal Jacobson and Arthur
Fistsohn.
Spoke to Laura Margolis and authorised her pay for
10,000 food parcels for December even though relations
with Congress group still complicated which hopeful will
be satisfactorily settled shortly. Please expedite validation her passport for France and Belgium.
Please make no further remittances to France until
you hear from us. lie have shipped to France from here
during December 150,000 cans condensed milk part sugared
part unsugared at cost 180,000 Swiss francs. We are now
purchasing through Intercross commodities for France for
$60,000 of which one-half for food balance for children's
clothing; and for Belgium $35,000. 2645.
HUDDLE
LMS
188
ALH-1850
Bern
true reading only by
Dated December 28, 1944
Distribution of
special arrangement.
(SECRET N)
Rec'd 5:21 p.m.
Secretary of State
Washington
8388, December 28, 5 p.m.
FOR HRB FROM MCCLELLAND
Please deliver following message from Union
OSE to Leo Wulmann American 124 West 40 NYC.
"Schmarta of JDC states he in contact with Lublin
and has forwarded parcels there through American
Bussian relief and their Tehran representative.
Please let us know whether you have done anything
for Dr. Herezenhorn or whether you have received
further new from him. Extremely important you
apply Russian Aubassador for information concerning
Jewish population liberated areas particularly in
Lithuania and Latvia inquiring whether OSE activities
might be resstablished these regions. We propose approach Soviet representative in Paris (continued in
my 8389) on this subject.
HUDDLE
RR
189
HSD-129
PLAIN
Bern
Dated December 28, 1944
Rec'd 3:48 p.m.
Secretary of State,
Washington.
8400, Twenty-eighth.
Joseph Schwartz left Geneva for Paris December
25 advisable therefore send future messages from
JDC for him to Amembassy Paris.
HUDDLE
MRM
NOT TO BE RECTRANSMITTED
COPY NO.
This document contains Information affecting the national defense of the
United States within the meaning of the Espionage Act, 50 U. S. C., 31 and 32,
SECRET
OPTEL No.
4
190
420 amended. Its transmission or the revelation of its contents in any manner
an unauthorized person is prohibited by law.
Information received up to 10 a.m., 28th December, 1944.
1, NAVAL
On 26th two French Destroyers seriously damaged in collision off Naples,
EAST INDIES. During recent patrols Strait of Malacca
one of H.M. Submarines sank 7 junks and two lighters and torpedoed
a coaster. Another of H.M. Submarines sank three junks, During
recent patrols one of H.M. Submarines sank a coaster Macassar Strait
and another of H.M. Submarines probably sank 3,000 ton ship Sunda
Strait, Yesterday a U-boat was destroyed by escorts of homeward
bound convoy N.W. of Azores, Five officers, 49 ratings taken
prisoner.
2. MILITARY
WESTERN FRONT. Unconfirmed but reliable report states
contact regained with U.S. garrison Bastogne. Our forces along
the whole of the southern flank of the penetration continue to advance, Strong German efforts to penetrate northern flank have met
with no success, and the Allied line at the western end has now been
stabilised between Marche and Givet.
ITALY. Fifth Army have lost some ground in Barga area
as result of enemy attacks,
EASTERN FRONT. Germans claim defeat of Russian attacks
in Latvia. Russians are closing in on Budapest and have occupied
more suburbs east and west sides of city. They have also made
further progress north of Szekesfehervar and in Southern Slovakia.
3. AIR
WESTERN FRONT. 27th. 191 heavy bombers of Bomber Command
(1 missing) dropped 977 tons Rheydt Railway centre in clear weather
obtaining excellent concentration
588 U.S. heavy bombers (5 outstanding) dropped 1442 tons
on six railway centres, four railway bridges and other objectives,
chiefly between Bonn and Saarbrucken with mainly good results.
377 escorting fighters scored 9,1,9 in action with
about 200 enemy aircraft for four missing (3 believed safe).
Weather hampered operations over northern battle sector but 294
fighters scored 16,1,3 for loss of 9.
319 Tactical Bombers dropped 540 tons on communications
central sector with good to excellent results, while 139 fighters
scored 33,4,4 for 15 missing.
349 aircraft operated over southern sector and scored
2,3,2 without loss.
In these operations 143 armoured vehicles, 655 motion
transport, 728 railway wagons and 68 locomotives destroyed or damaged.
158 Dakotas (50 towing gliders) dropped supplies in
Bastogne area.
27th/28th. Aircraft despatched: Opladen railway workshops near Cologne - 328, bomber support - 66, other tasks - 14
Mosquitoes, Two aircraft missing.
MEDITERRANEAN. 26th. 427 escorted heavy bombers (19
missing) bombed oil refineries Blechhammer - 245 tons, Odertal - 237,
and Oswiecim - 151, also five bridges Northern Italy - 176 with
mainly good results. Over 1400 other aircraft (2 missing) successfully attacked objectives Brenner and Udine areas cutting railways
in 42 places and scoring 16,1,10 on the ground. Balkan Air Force
effectively attacked large scale enemy movements southern Yugoslavia.
4. HOME SECURITY
Three further rocket incidents reported for period ending
7 a.m. 27th,
December 29, 1944
TO THE SECRETARY:
In accordance with your request there is set out below a list of refundings since July 1, 1944,
together with the results:
Date of
maturity
Total
Issue
Amount
amount
Amount
retired
Per cent
maturing
Exchanged
for
Exchanged
New Issue
cash
1944
Aug. 1
7/8% Cert. of Ind.
$2,545
$2,511
$34
99
7/8% Cert. of Ind.
Sept. 1
7/8% Cert. of Ind.
4,122
3,694
428
90
7/8% Cert. of Ind.
Sept. 15
3/4% Treasury Note
1% Treasury Note
635
602
33
95)
283
185
98
66j
Oct. 1
7/8% Cert. of Ind.
3,519
3,492
27
99
7/8% Cert. of Ind.
Dec. 1
7/8% Cert. of Ind.
3,540
3,413
137
96
.90% Treasury Note (1/1/46)
Dec. 15
4% Treasury Bond
1,037
137
737
130
87
1% Treasury Note (3/15/46)
1-1/4% Treasury Note (9/15/47)
33
swe
2% Treasury Bond (1952-54)
2-1/2% Treasury Bond (1966-71)
192
AIR
PHILIP T. HILL
POSTMASTER
MAIL
SANTA MONICA
December 29, 1944
Hon. Henry Morgenthau, Jr.
The Secretary of the Treasury
Washington, D. C.
My dear Mr. Secretary:
Your complimentary letter and citation of
December 22, 1944, in recognition of my having
originated the V-Mail Christmas Bond Certificate,
are keenly appreciated.
As an officer in the Navy during the last
war, I was highly hopeful that my services would be
acceptable in the armed forces this time. That not
being possible, it has given me intense satisfaction
to be associated with the War Loan work since its
inception, and any contribution I have made to its
success naturally gives unalloyed satisfaction.
Years ago, I had the pleasure of meeting you
out here with Federal Judge Pierson M. Hall. I
trust that such an opportunity will again present
itself. With all best wishes for the coming year,
I remain
Sincerely yours,
Philipistice
193
MEMORANDUM FOR THE SECRETARY.
December 29, 1944.
Mail Report
Nothing new developed in this week's mail,
which was light and without variety.
Again a great deal of the bond mail concerned
Adjusted Service Bonds, and there were, of course,
the usual numerous inquiries about ownership of
E Bonds. Both the management and the outcome of
the Sixth War Loan received quite a bit of favor-
able comment from those who helped with the campaign,
as well as from outsiders who had merely observed
its progress. Only 2 bonds were submitted for
redemption, and there were but 3 or 4 complaints
about delayed delivery of bonds.
Although several correspondents asked for copies
of the new tax law or for forms to be used in connection with withholding procedures, there continued
to be surprisingly little correspondence in regard to
the tax measures that will become effective in 1945.
Now and then a writer inquired about his present tax
obligations or made a suggestion for further revenue.
The eight who requested tax refunds this week usually
told at length of family hardships that could be
eased by return of the overpayments.
Christmas week was the occasion for 8 quite generous donations to the war effort and for many more
greetings and good wishes.
Gatorbush
194
Unfavorable Comments on Bonds
Horatio C. Ray, San Juan, P. R. The 7th of April
last, I wrote you concerning the transfer of a
$500 bond owned by my late wife, Margaret Masters
Ray, who died intestate, to me. # # * According to
instructions, I filled the Form P. D. 1646 with
certified signatures of all the heirs agreeing to
this transfer. This form was accompanied by a
death certificate, receipts for all debt, and other
necessary papers. In reply, I received a letter,
dated April 15th, from the Office of the Commissioner
of the Bureau of Public Debt signed by Mr. E. L.
Kilby, which reads in part as follows: "As this
case presents a somewhat difficult legal question
it has required extensive consideration, particularly
with reference to the applicability of Puerto Rican
law. A decision will be reached shortly and you will
be advised." The underscore is by me. September 15th,
I wrote another letter asking what action had been
taken. Although this letter was sent registered and
I have the signed return receipt, I have never had
any response to my letter to this date and no other
word of any decision. Making all due allowance for
the pressure of work that, no doubt, that office is
working under, an answer could have been prepared in
the seven months that have now passed since I wrote
you, not to mention the fact that the original documents were sent in November 1943, now more than a
year. Further, I have been assured by lawyers - the
one's report accompanied the Form P. D. 1646; the
other is Benitez Castano, President of the Puerto Rican
Bar Association - that according to the laws of Puerto
Rico, estates of this size do not have to be passed
through the Courts, and further that under the law the
above designated persons constitute the true and only
heirs of my wife, hence I cannot understand the nature
of the difficult legal problem. I have already spent
considerable of my money on this matter, and if it has
to be carried through the Courts here, I would be the
one who would have to advance the money. This I have
no intention of doing. # # I am therefore urging that
195
2-
your department kindly make an early decision on
this matter. Should it be decided that Court action
is necessary, please return the Form P. D. 1646
and the papers therewith that I sent. In case the
Form is necessary for your files, at least send me
the attached papers so that I may retain them for
future reference. I shall be glad to send the necessary postage for their return.
Edward I. Kemper, Vice President, Union County Trust
Company, Elizabeth, New Jersey. * * # Since October 2,
1944, this Bank, among many others, has had an ex-
tensive activity in cashing "E" bonds. Thus far we
have cashed 11,747 bonds totaling $304,890. Against
this we have issued 3,797 bonds totaling $290,681.25.
Before October 2, 1944, we did have requests
for redemptions but, when we explained the process
through which they would have to go, the impulse to
redeem the bonds generally vanished. My greatest personal disappointment, however, has resulted from the
Sixth War Loan Drive. I was one of a group of local
people who put forth every effort to make the drive a
success. We promoted a number of activities which
were by no means an easy task. We secured over a thousand
workers to ring doorbells. All in all we made ourselves
available twenty-four hours a day, seven days a week.
You can imagine my personal aggravation when, after a
night of exhaustion in an effort to sell "E" bonds, I
would come to my desk the next day and be confronted
with hundreds of people desiring to redeem bonds of almost a like amount.
Clyde H. Belknap, Lawyer, Spokane, Washington. I regret
to be obliged to trouble the head of the Department
with a matter concerning "E" bonds of only $150.00
maturity value. However, having forwarded the bonds
many months ago for payment, we now can neither get
the cash nor the return of the bonds. Fred W. Herstein,
in his life time, bought these bonds. Before his death,
a guardian had to be appointed to care for him and his
196
-3-
estate. His estate was small. Upon closing the
guardian's accounts, it was found that there remained
in the estate only the defense "E" bonds in question.
* It is self-evident to anyone with any knowledge
of court procedure that a probate upon bonds of the
present value of $112.50, with the necessary court
costs, administrator's fees, attorney's fees, and expenses for administrator's bond would eat up the
entire value of the bonds. Rather than go to the
technically correct expense, the court was asked by
the guardian and his attorney to order the guardian
to cash the bonds and use the proceeds to buy a marker
for the deceased. Although technically erroneous
as to procedure, the order was made by the court on
August 2, 1944. The bonds were immediately turned in
by the guardian for payment. Somewhat over a month
ago, we received a notice from A. E. Wilson, Assistant
Chief of the Treasury Department, Fiscal Branch,
Chicago, Illinois, stating that the Government would
not permit payment of the bonds for the designated
purpose stated in our Superior Court's Order. In other
words, the Assistant Chief has decided that the
Government will not permit its bonds to be cashed if
it does not approve of the use to which the proceeds
of the bonds will be put. Since one cannot fight the
Government of the United States, especially when only
$112.50 is involved, we are obliged to accede to you.
On November 24, 1944, we wrote to your Assistant Chief
requesting the return of the bonds, stating that we
would have an administrator appointed and follow the
usual practice, even though this would result in the
waste of the entire proceeds in a useless probate
proceeding, rather than in the use of the proceeds for
the purpose approved by heirs and all others locally
interested. # # The guardian cannot be released until
the bonds are returned or their proceeds. In the
meantime, he has to keep up the premium on his guardian's
bond. The delay since last August caused by your
assistant's action, adds considerable expense. Will
you not see that these bonds are returned forthwith
or that they are cashed as justice would require?
O
197
4-
Unfavorable Comments on Taxation
Eugene LaPorte, Washington, D. C. (Encloses copy of
Tax Form 1040). I have just received a letter dated
December 8th, signed by Chestina Barakay, Chief of
Section, Internal Revenue, Baltimore, Maryland. It
reads in part: - "Correction of your return discloses
an unpaid balance of tax due to the amount of $65.91,
etc." Also the last Paragraph reads: - "This amount
will be assessed with INTEREST, etc. * # With the
cost of living so high and the salaries so low, it
does not seem right that we should have to pay an additional amount to a lawyer to figure out the forms,
and, too, I know of lawyers who claim they, too, have
to have help with their own papers. We have been
told through the papers and otherwise that we can come
to the Internal Revenue office, and clerks will help
us with the forms - that clerks have been trained to
do just this. so, Mr. Morgenthau, WE, the LOW Salaried
PEOPLE, go down and stand in line for Hours and Hours,
awaiting our turn, only to find in many cases the
SO-CALLED TRAINED CLERKS do not know as much as we do
and are DISINTERESTED and CARELESS in many cases. This
form as you will see is made out and signed by Clerk
B. M. WYLIE. My Sister called up the Bureau and after
talking to some clerk was connected with this MR. WYLIE
himself. I will try to quote as nearly as possible
some of his remarks: - He said he was only assigned
there for a few days, did not know much about it all,
and if he made a mistake, "SO WHAT?" He said they did
not have to help us, only did it as a favor, and
supposed that he made many mistakes - that was our
hard luck. When my Sister told him we would have to
pay interest, he then said, "Go ahead and pay it.
What's 4 or 5 dollars? You are probably not the only
one." I then said, "If we come down, will you go
over the form and find your error?" And he then said,
"NO, of course not. I told you I was only there as a
favor and have nothing to do with them now." Mr. Morgenthau,
I am attaching this form for your attention, asking
198
-5-
you if you think I should have to pay this INTEREST.
Also I am attaching it for your attention, thinking
perhaps you will put a stop to this kind of work
from CLERKS who are getting big salaries from the
Government PAID by this and all other TAX payers.
FOREIGN ECONOMIC ADMINISTRATION
no
199
OFFICE OF THE ADMINISTRATOR
WASHINGTON 25, D. C.
DEC 29 1944
The Honorable
Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
In reply to your letter of December 16, I
agree with Mr. Acheson's recommendations concerning
the arrangements to be made for reciprocal aid from
Australia, New Zealand and India for our armed
forces. I also agree that if this is the recommenda-
tion of the American Committee, the War Department
should be so informed.
TOG
Sincerely yours,
Leo T. Crowley
Administrator
200
ME-439
This telegram must be
paraphrased before being
Sofia
communicated to anyone
other than a Government
Agency. (RESTRICTED)
Dated December 29, 1944
Rec'd 2:10 p.m., 30th
Secretary of State,
Washington.
51 December 29, 6 p.m.
Unfortunately, Jewish refugees not able to
proceed beyond Svilengrade (reference my December 23,
noon) because Turkish authorities unwilling to accept them without assurance from British of onward
passage and British unable under existing agreement
with Turks to give such assurance. No helpful
action possible here. Repeated to Caserta as
No. 38.
BARNES
WSB
201
CABLE TO WINANT, LONDON, FOR MANN FROM WAR REFUGE BOARD
Reference your letter December 2.
(1) Report submitted by trustees of Csechoslovak program is
satisfactory to Board, Treasury and labor groups sponsoring program.
(2) Your action with respect to $75,000 of funds for Polish program is approved by Board. Labor groups here have been advised of this
and approve. However, they suggest that you advise the trustees of the
Polish project of the fact that the remittance of $75,000 has been made
but will not be released to them until you receive report that the
$250,000 has been sent into Poland. Please advise Board when you have
further information concerning the $250,000.
THIS IS WRB LONDON CABLE NO. 30.
11:00 a.m.
December 29, 1944
202
CABLE TO WINANT, LONDON, FOR MANN FROM WAR REFUGKE BOARD
Reference your 11395 of December 22 concerning funds for
Belgian War Relief project.
Please advise Abranson that on December 13 McClelland paid
Swiss frane equivalent of $90,000 (total of all Belgian funds remitted to Switserland) to Decaritat, Bolgian Charge d'Affaires in
Bern. This payment was made by McClelland in accordance with instructions sent by the Board on behalf of Abranson's group and
A.F.L. and only after Ministry of Interior at Brussels had wired
Decaritat authorising him to accept these funds stating they were
in contact with Major in Belgium and would make available to him
in Belgium the local currency equivalent. Labor groups here request that you ask Abranson to get in touch with Jef Rene in
London immediately who has all background on this transaction.
THIS IS WRB LONDON CABLE NO. 31.
5:15 p.m.
December 29, 1944
MS-161
Distribution of true
reading only by special
arrangement. (SECRET-W)
203
London
Dated December 29, 1944
Rec'd 5:37 p.m.
Secretary of State,
Washington.
11534, December 29, 7 p.m.
FOR PEHLE FROM MANN.
I have sent following message to McClelland.
"Henri Dentz of Netherlands committee for repatriation was advised a short while ago that pursuant to
negotiations conducted in Switzerland by Jewish Dutch
coordination committee Germans or some group thereof
have offered to deliver in Switzerland at least 500 Jews
at price 1,000 Swiss francs each. (FOR MCCLELLAND FROM
MANN). Dentz and I have discussed and he is advised you
familiar this matter. German offer is under consideration
by Dutch Council Ministers. Dentz and I believe a statement from you on this matter giving such facts as available
and if you think it advisable urging that Dutch accept
offer and do all possible would increase chances favorable
action. Please advise me as soon as possible. Repeated
to Washington,"
WINANT
MRM
20.4
CONFIDENTIAL
THE FOREIGN SERVICE
OF THE
UNITED STATES OF AMERICA
AIR MAIL
AMERICAN EMBASSY
London, December 29, 1944
No. 43
SUBJECT: UNRRA and Displaced Persona' Activities
The Honorable,
The Secretary of State,
Washington, D.C.
Sir:
I have the honor to refer to the London Embassy's confidential report
No. 481 of November 18, 1944 considering the European Regional Office of
UNRRA. The last paragraph in the section devoted to Displaced Persons,
refer to a multi-Interal agreement, which various Governments have agreed
to sign. For the Department's information, a copy of this agreement, which
was prepared by UNRRA's Standard Technical Sub-Committee on Displaced
Persons, is enclosed.
Mr. Fred Hoehler advises the present status of the pact to be as
follows: Belgium and Lumenburg have signed without reservation; the
Netherlands, Csechoslovalcia and Poland have signed with reservations,
(these are stated in the report under reference); letters of intention to
sign have been received from the Yugoslav and Greek Ambassadors; and France
has intimated that it will sign, probably with reservations. Mr. Hoehler
states that failure of the agreement to receive whole hearted approval
should not be viewed as discouraging, since the terms of the multi-Interal
agreement are finding their ways into hi-lateral agreements, which will be
communicated to UNERA and which are providing for UNRRA observers.
Respectfully yours,
For Ambassador Robert Murphy
Donald R. Health, Counselor
Enclosure:
A Multi-Lateral Agreement Between the European United Nations Concerning
the Care and Maintenance and Repotriation of Displaced Persons in Their
Territories Who are Nationals of the United Nations.
RMsWBLspf
205
Enclosure to Despatch No. 43 dated December 29, 1944 from
Ambassador Murphy, London
MULTI-IATERAL AGREEMENT
BETTEEN EUROPEAN UNITED NATIONS
CONCERNING THE CARE AND MAINTENANCE AND REPATRIATION
OF DISPLACED PERSONS IN THEIR TERRITORIES WHO ARE
NATIONALS OF THE UNITED NATIONS
desirous of ensuring that the problem of
the return to their homes of Displaced Persons of United Nations nationality
may be effectively and expeditiously dealt with on a well co-ordinated plan,
The Undersigned
and in accordance with the intention of the UNRRA Agreement of November 9th
1943 and of Resolution No. 10 adopted by the Council of UNRRA at its First
Session held at Atlantic City, have agreed as follows:
1. For the purpose of this Agreement Displaced Persons shall be taken as
meaning all nationals of the United Nations signatury to the aforesaid UNRRA
Agreement who come within the definition of Displaced Persons contained in
paragraph 3 of the aforesaid Resolution No. 10.
2. The contracting parties recognise that, as soon as the military authorities
agree, UNRRA will operate as the central international organ for co-ordinating
the work of repatriating Displaced Persona in Europe and for regulating by
agreement between the Governments concerned the general conditions under
which it shall be carried out. While each contracting party will retain full
control over Displaced Persons in its own territory, it will nevertheless
give UNRRA all possible assistance to enable it to carry out its task, and
will consult with UNRRA on matters involving international aspects of the
problem.
3. Each contracting party undertakes, on assuming responsibility for the
administration of its territory or any part thereof, to take the following
measures with reference to displaced persons who are nationals of another of
the United Nations and who are found in the territory:-
(1) After consultation with the military authorities and in collaboration with the other Governments concerned, to urge the displaced persons,
by radio and all other suitable means, to refrain from attempting to
make their own way back to their countries but to stay where they are
and co-operate with the measures to be taken for organising their return
here;
(11) To announce at the same time that, as part of the agreed policy
of all the United Nations concerned, it will apply to the displaced
persons and principle of equality of treatment with its own nationals
and will provide for their orderly and speedy repatriation;
(111) To take without delay all practicable measures to have informtion collected concerning the location, nationalities, numbers, general
condition and movements of the displaced persons, and to make such
information available at the earliest possible moment to the other
Governments concerned and to UNRRA:
206
-2(1v) To treat the displaced persons on a basis of equality with its
own nationals in regard to the provision of food, the application of
its public medical, relief and welfare services, and the application
of restrictive health measures;
(v) So for as available supplies permit, to provide displaced persons
who are awaiting repatriation and are in need with clothing sufficient
to make up the minimum necessary for health and decency until they
leave the territory;
(vi) To provide adequate shelter for the displaced persons and, where
necessary, to organise assembly centres for collecting together those
whose return to their own countries is being arranged;
(vii) To land its good offices for organising the individual registra-
tion of the displaced persons and to see that use is made of the inter-
national forms which have been prepared in consultation with the Displaced
Persons Organisation of UNRRA:
(viii) To ensure as far as possible that before they leave the territory
for their own countries the displaced persons are furnished with any
personal identity papers or other individual documents (e.g., employment
books, wage books, social insurance books) which are in the custody of
local authorities, employers or other agencies,
(ix) In the case of displaced persons whose return to their own
countries is likely to take some substantial time to arrange, to permit
them to take up any temporary employment which may be available for
them, in order that they may no as self-supporting as possible, provided
that the authorities of their own country concur and that the terms and
conditions of the employment do not put them in an unfavorable position
on the whole as compared with nationals of the territory; and
(x) To admit to its territory, if requested to do so by the Government
other of the United Nations, an/approved Mission or approved Officials
for the purpose of of
(a) Identifying and establishing the national status of displaced
persons claiming to be nationals of the United Nation concerned;
Issuing visas for their repatriation; and
(c) Advising and assisting the authorities of the territory in
(b)
providing for their care and maintenance and arranging for
their repatriation;
Any such national mission shall be granted a status and privileges
similar to those granted to the UNRRA mission referred to in Article 7.
4.
Each contracting party undertakes: -
(1) In the case of displaced nationals of another of the United Nations
temporary refuge in its territory or who pass into the territory on their
way to, and making their own efforts to reach, their own countries; to
207
-3 deal with them as far as possible on the same footing as displaced
nationals of other United Nations who are found in the territory at
the time the Government assumes administrative responsibility for it,
and to give all practicable assistance for facilitating their return
to their own countries; and
(11) In the case of officially organised convoys of displaced nationals
of another of the United Nations passing through the territory on their
return to their own countries; to grant them freedom of transit, pro-
vided the authorities of the territory have been officially notified in
advance of the origin and destination of the convoy and the time and
route of its transit through the territory.
5. In the case of adjoining territories of two OF more of the United
Nations, the respective Governments undertake to confer on the steps to be
taken at the common frontier between the territories in order to canalise
and regulate unorganised movements of displaced persons seeking to return
to their own countries, with a view to providing for carrying out the
necessary measures in regard to them.
6. As regards displaced persons who are nationals of the United Nations,
but whose place of settled residence before their displacement was in the
territory of one of the United Nations other than that of which they are
nationals, the contracting parties, while they can give no absolute or
general guarantee to readmit all such persons into their territory, undertake
to meet any requests they may receive for their readmission in a spirit of
wide humanity as contemplated in paragraph (8) of the Report of Sub-Connittee 4
of Committee IV of the First Session of the Council of UNRRA held at Atlantic
City.
7. Each contracting party undertakes to admit to its territory an approved
UNRRA Mission, or approved UNRRA Delegate, for Displaced Persons, and -
(1) To keep the Mission or Delegate fully informed of the measures
being taken in its territory in respect to displaced persons who are
nationals of another of the United Nations;
(11) To give the Mission or Delegate facilities for visiting centres
where such displaced persons are located and for becoming acquainted
with the arrangements made on their behalf;
(111) To consult the Mission or Delegate on matters affecting COordination of the movement of the displaced persons back to their
respective countries; and
(iv) To afford the Mission or Delegate facilities for enabling UNRRA
to discharge its responsibility in respect of nationals of any United
Nation whose Government has asked UNRRA to assist in providing for their
care and maintenance and arranging for their repatriation.
208
-48.
It is understood that (1) In cases where UNRRA assumes responsibility for dealing with any
group of displaced persons, in pursuance of Article 7, paragraph (1v),
UNRRA will ensure that, so far as circumstances permit, the group will
Ba dealt with by persons of the same nationality as the displaced persons;
(11) UERRA will consult with the parties signatory to this agreement
as to any serious emergency which it is considered may arise through the
influx of every large numbers of displaced persons, other than their
own nationals, into their territories and as to any special assistance
which may be needed from UNRRA for dealing with such an emergency.
9.
It is understood that the contracting parties are free to make bi-lateral
arrangements among themselves for applying or supplementing the provisions of
this agreement, and that UNRRA will be informed of any arrangements which are
so made.
209
CABLE TO AMERICAN CONSULATE, JERUSALEMY FROM WAR REFUGEE BOARD
Please deliver the following message to Judah Magnes from M.A. Leavitt,
American Jewish Joint Distribution Committee:
QUOTE EMERGENCY COMMITTEE TO SAVE JEWISH PEOPLE ADVISES US
JABOTINSKY CHARTERED SS TARI FOR $200,000 AND FOR ADDITIONAL
$100,000 FOR PROVISIONS OTHER CHARGES 1500 to 1700 IMMIGRANTS
FROM RUMANIA CAN BE TRANSPORTED TO HAIFA DIRECTLY. THEY
REQUEST WE FINANCE THIS PROJECT. PLEASE DISCUSS WITH JEWISH
AGENCY AND ASK JEWISH AGENCY TO CABLE US DIRECTLY WHETHER
CERTIFICATES ARE AVAILABLE FOR THESE IMMIGRANTS. WE WOULD
APPRECIATE RECEIVING ANY OTHER INFORMATION YOU OR JEWISH
AGENCY MAY HAVE RECEIVED FROM ISTANBUL CONCERNING PROPOSAL UNQUOTE
2:30 p.m.
December 29, 1944
FH:hd 12/27/44
210
MF-228
Stockholm
reading only by special
Dated December 29, 1944
Distribution of true
arrangement. (SECRET #)
Rec'd 8:03 P.M.
Secretary of State
Washington
5293, December 29, 7 p.m.
Information given in Department's 2566, December 21,
8 p.m., was conveyed to Foreign Office which today informed Legation (this is our No. 118 for WRB in reply
to WRB 273) that for time being there is no means of
communicating with the Swedish Logation in Budapest.
JOHNSON
MJF
211
CABLE TO AMLEGATION, BEEN, FOR MOCLELLAND FROM WAR REFUCKE BOARD
Ameross shipped for Board on S.S. Caritas II second half of December
for off-loading at Toulon a total of 10,112 cases containing 60,672 three-kilo
WRB food parcels for consignment to ICRC for distribution to unassimilated
persons in camps. Outer shipping cases are marked as described in our 4001
of November 25, and each contain six three-kilo parcels. This shipment includes 9750 cases containing 58,500 "K" parcels which do not contain receipt
cards. Balance of 695 cases containing 4,172 parcels include receipt cards
as per wirephoto September 21. This shipment concludes the initial WRB 300,000
three-kilo food parcel program.
THIS IS WRB BERN CABLE NO. 345.
10:15 a.m.
December 29, 1944
212
CABLE TO ANLEGATION BERN, SWITZERLAND
Reference your 8177 of December 16, 1944.
Department and Board agree with suggestions made therein. Ac-
cordingly, you are requested to inform Swiss authorities that persons
whose names were or will be forwarded to you pursuant to Department's
2605 of July 28 and 2918 of August 24 are eligible for exchange against
German civilians under Department's 3082 of September 6 and A-540 of
November 9. All of these persons are to be considered as bearing
QUOTE documentation reflecting a right of admission into one of the
Republics of the Western Hemisphere UNQUOTE (namely the United States)
under Group F of Department's 3082 of September 6. In addition, those
among these persons who are spouses or minor children of American citizens fall within Group 0 of Department's 3082, and those who are spouses
or minor children
resident aliens
fall within Group G established by
Department's
A-540 of
of November
9.
It is hoped that under this procedure nothing will stand in the
way
of the
the German
speedy transmission
tion to
authorities. of the names included in the lists in ques-
10:15 a.m.
December 29, 1944
.
THIS IS WRB BERN GABLE NO. 346
213
CABLE TO AMERICAN LEGATION, BERN, FOR MCCLELLAND FROM WAR REFUGER BOARD
Please obtain from Sternbuch as soon as possible a detailed report on the
use of all funds remitted to him by the Vand Hahatsala Emergency Committee for
operations authorised under license No. W-2117. This report is urgently requested by the Vaad Hahatzala Emergency Committee and is required under the
terms of the license. Report should be forwarded through War Refugee Board,
THIS IS WRB BERN CABLE NO. 347.
1:00 a.m.
December 29, 1944
214
CABLE TO AMERICAN LEGATION, BERN, FOR MCCLELLAND FROM PEHLE, WAR REFUGEE BOARD
We are transferring one hundred seventy-five thousand dollars to you
for use at your discretion in furthering the programs of the War Refugee
Board. These funds are not subject to usual government disbursement
procedure and you will be responsible to me alone for their expenditure.
You should, however, keep careful record of expenditure and obtain receipts
where possible.
THIS IS WRB BERN CABLE NO. 348.
11:00 a.m.
December 29, 1944
215
December 29, 1944
American Legation
This telegram must be
paraphrased before being
communicated to anyone other
than a government agency.
BERN
4386
(RESTRICTED)
For Daymont from Allen
$175,000 being made available to us in Swiss franks through the
Swiss National Bank for Roswell D. McClelland WRB on basis voucher
submitted this office. DO not reflect in your accounts but take
receipt for McClelland for latter attachment to voucher. Advise
McClelland funds are confidential.
STETTINIUS
Dent, Cohn, Hodel, Akain, McCormack, Files
216
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMLEGATION, Bern
TO:
Secretary of State, Washington
DATED:
December 29, 1944
NUMBER: 8407
CONFIDENTIAL
Refer to Department's 4154, December 8; Legation's 7163,
dated October 29, 1944.
Latin American interests Slovakia
Informally the statement was made by Swiss that
according to a report from the representative of the Swiss at
Bratislava nothing is accomplished by the transmission of
Salvadoran identity papers to Jews in Slovakia as, according
to the Permanent Intercross delegate, Mr. Dunend, the Jews
underwent voluntary internment at Marianka camp some time ago
as they considered themselves Salvadorans but they have however
been removed from this camp and it is probable that by now they
have/been deported. It is said that individuals applying
anti-Jewish measures simply tore up the Salvadoran identity papers
such as those issued at Geneva which interested persons possessed.
In this connection the representative of the Swiss observes that
the Jews concerned, most of whom possessed Slovak nationality by
birth, met with difficulty in their assertations to the German
authorities that they were of Salvadoran nationality.
HUDDLE
DC/L: EMS
12-30-44
217
Bern
ALH-189
Dated December 29, 1944
Rec'd 6:43 p.m.
Secretary of State
Washington
8415, December 29, 4 p.m.
FOR WER FROM MCCLELLAND
I have just received discouraging news from
ICRC that the frieght cars containing our 15023 WRB
parcels which left Gothenburg some time ago have been
inexplicably held up by the German authorities at
Warnemuende near Luebeck for almost two months and
not forwarded to the concentration camps as we had
thought.
I have urged ICRC to immediately investigate
cause of this delay and committee has accordingly
wired their Berlin delegate to take energetic steps
to move these parcels.
I have communicated substance of your 4314,
December 22 to ICRC and committee will undertake to
forward test shipments of 250 parcels each to a number of accessible camps in Poland.
HUDDLE
EH
218
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
AMERICAN EMBASSY, CHUNGKING VIA NAVY
TO:
Secretary of State, Washington
DATED:
December 29, 1944
NO.:
2080
SECRET
Reference my despatch 3215, December 9.
Recommendations of United States Army fiscal director, this theater, that all
United States Government agencies in China effect procurement of local services
and supplies, through Army's central procurement and purchasing officer, wherever
possible, utilizing no-rate Chinese national currency which Chinese Government is advancing to United States Army, have been placed before the weekly meeting of local
representatives of agencies of United States Government here, after a study of the
subject which Ambassador requested. Two aims are sought: (1) avoiding mutual competion and (2) economy envisaged through possible finel settlement through reverse LendLease or like arrangement for such CN advances. No apparent restriction to prevent
transfer by United States Army of no-rate ON funds received from Chinese Government
to other United States Government agencies in China for such utilization is perceived by fiscal director. In this connection, General Wedemeyer concurs in recommendations of fiscal director.
Committee representing interested agencies, who favor attempt to centralize
procurement for stated purposes, has studied this subject. In addition, this committee
is in favor of utilization of no-rate Chinese funds, provided they can be secured,
but believes that ve question whether fiscal director possesses authority to release
to other agencies funds which Chinese Government has advanced to Army (particularly
as there may have been developments in Sino-American financial arrangements
recently of which we are not given detailed information, entire question should be
placed before concerned agencies in Washington, as first step) and also that we
question whether agencies could properly use these funds without Chinese Government's
specific approval. For instance, there might be the question of making arrangements with Budget Bureau for apportioning dollar credits to Chinese Government
among several United States agencies as offset for Chinese national currency advanced
and difficulty might be encountered in adapting utilization of no-rate Chinese funds
under requirements of American budget.
The suggestion is made that Department may desire to talk over the matter with
proper agencies, with inclusion of FEA, Navy, oss, OWI, War and Treasury, with idea
in mind of cabling proper instructions to the Embassy.
HURLEY
DC/L:MED:CR
12-30-44
ef:copy
1-2-45
219
NOT TO BE RETRANSMITTED
COPY NO.
SECRET
4
OPTEL NO. 421
Information received up to 10 a.m. 29th Dec. 44.
1. NAVAL
Greece 27th. Situation at Preveza quiet, but fall of
town to ELAS considered inevitable and civilians are being
evacuated to Corfu in H.M. Ships. Labour disturbances
threatening at Heraklion (Crete); at Salonika situation
difficult with ELAS in control. 7,000 ton British ship
carrying 1500 troops in convoy to Havre sunk by mine or torpedo
off Isle of Wight yesterday, only 6 of total complement lost.
2, MILITARY
Western Front. Third U.S. Army has linked up with
Bastogne garrison from South, and further advances made between
Bastogne and Echternach. On Northern Flank enemy pressure has
decreased and Allied forces have made local gains. In gap
between Marche and Bastogne situation remains fluid, Allied
patrols reached Recogne and St. Hubert.
Italy. Enemy continued attack on Serchio Valley.
Further withdrawals astride river made, but latest reports
indicate that situation appears more stabilized.
Eastern Front. Russians report capture of 12 suburbs
Budapest, on East bank of Danube.
Burma. In Arakan patrols reached Foul Point at tip of
Mayu Peninsula. Forward troops travelling by boat reached point
on Mayu River eight miles N.W. of Rathedaung.
3. AIR
Western Front. 27th/28th - 1155 tons dropped on Opladen
Railway workshops. Bombing concentrated and attack considered
successful.
28th - 164 escorted Lancasters, through
cloud, dropped 747 tons Cologne (Gromberg) Railway Centre.
Bombing concentrated. 1147 Escorted U.S. heavies, 3 missing
attacked between Cologne and Saarbrucken, 9 railway centres
including Koblenz (Moxel and Lurtzo) 1,237 tons, Kaiserslautern
302 tons, 4 railway bridges 599 tons and 3 other targets.
36 Spitfires attacked rocket sites in Hague area with good
results. Mosquitoes escorted by Mustangs set on fire 2,000
ton ship N.W. of Stavenger.
28th/29th - 622 aircraft despatched
Bombing by Pathfinder technique, no enemy aircraft encountered.
Munchen-Gladbach and Bonn Railway centres 364, one missing
Frankfurt, 87 Mosquitoes one missing cruiser KOLN and shipping
South of Oslo 68, seamining 27 one missing and bomber support 76.
4. HOME SECURITY
Early this morning one rocket caused slight damage.
219-A
December 30, 1944
10:15 a.m.
GROUP
Present:
Mr. D. W. Bell
Mr. Gaston
Mr. White
Mr. Haas
Mr. O'Connell
Mr. Blough
Mr. Pehle
Mr. Luxford
Mr. DuBois
Mr. McDonald
Mrs. Klotz
H.M.JR: I don't have much. We'll start with
you, Mr. Gaston.
MR. GASTON: I don't think I have anything. We
have a collector up in Duluth who's not attending
to his duty, and I may ask you to sign a letter to
him if you care to do that.
H.M.JR: I will. It was funny. Last night we had
occasion--I can't mention who--on the train where we
talked to him about White, whose name, incidentally,
now is going up on the first day. I wrote the President
quite a long letter and it came back the same day. It
was answered. It's all cleared, the mechanics over there.
Is the name over there?
MR. McDONALD: Yes, it went over there November 28.
H.M.JR: Anyway, somebody or other said, "Has that
man up there, the collector up in Boston, stolen any
money?"
MR. GASTON: Did you tell him he hasn't had time?
H.M.JR: I said, "I think not, Mr. President. Well,
he would never take more than ten dollars." So then
219-B
-2 he said, "Remember how you objected to this fellow
Magruder?" And he said, "He was good, too." He said,
"He was second or third on your list. You were worried
about his graveyard--his racetrack." " He had it all down
pat, and he said, "You know the man over at Nogales?"
He said, "All you objected to was he was the go-between
for the fixer in Mexico. The poor man who handled all
this money never kept any, and Henry made him pay an
income tax, and all the money went through his hands." "
He said, "Henry is a very mean person. "
I said, "Well, Mr. President, it is twelve years,
and now we didn't have any yet really go sour on us, and
in twelve years you insist on two appointments. I
said, "I think your record is very good." It really
was three, Magruder, the fellow in Nogales, and the fellow up in Boston. That is about all.
MR. GASTON: Yes.
H.M.JR: In eleven years it is really only three,
but he was very funny. He had all the details. He said
the fellow in Boston, the most he would steal is ten
dollars.
MR. GASTON: He's a petty--
MR. BELL: He's a petty thief.
H.M.JR: He knew all the details. He knew all about
this fellow. He was in Nogales, wasn't he?
MR. GASTON: Yes. He is a collector now, but he
didn't have the details quite right. The money that passed
through his hands, a couple hundred thousand of it, was
in the form of real estate.
H.M.JR: He said, "That is the way to do things in
Mexico." He said, "Henry just doesn't understand those
things."
MR. BELL: It's ethical down there.
219-C
-3H.M.JR: Incidentally, those people working on
the work with me formerly--I want to very much read a
letter that Herb Gaston wrote me which was a very
excellent letter.
it.
MR. GASTON: I was going to ask you if you got
H.M.JR: Excellent, and if you will make it available
to White, White can circulate it. I would like them to
read it. It is an excellent letter, excellent. Anything
else?
MR. GASTON: No, nothing else.
H.M.JR: Mr. O'Connell?
MR. O'CONNELL: Did you ever get an answer to the
letter you wrote to the Christian Science Monitor?
MR. GASTON: They printed about two-thirds of it,
I should say, after the campaign.
MR. O'CONNELL: It was a good letter.
The only thing I have I think I ought to mention-it doesn't call for any debate, although it does recall
the famous 1016 educational instructions. As we might
have expected, there was quite a flood of requests for
rulings during the past week. A number of organizations
wanted a ruling that would permit the contributors to
make a contribution before the end of this month, so they
could take the deduction in their 1944 return. We quite
consistently took the position that on anything but a
very clear case we were not going to make any more rulings
under 1016 regulations, educational instructions, until
after the 1st of February, after we had done what you told
us and come out with whatever results we would get.
The types of requests ranged all the way from a
quite clear charitable trust, which we did approve and
had no difficulty in approving, to a request to approve
the creation of an aviation organization of some sort
219-D
-4which was being set up for the purpose of educating the
people with respect to the importance of military aviation,
and Oscar Chapman sent Jo Davidson and Mrs. Dorner in to
see me, and they had an Arts and Sciences Committee which
they wanted to set up on a non-provit basis for educational
purposes. I told them on the basis of what they had given
me
they
have any chance, not only now, but
even
thejust
firstdidn't
of February.
It illustrates in a way the difficulties in the
problem. They were completely honest and very naive, and
probably not as well advised with respect to what to put
into their statement of purposes and that sort of thing
as some others. Right in the beginning was a statement
that they proposed to support good legislation, to
oppose bad legislation. On the basis of what
written
themselves
out
ofhad
but
done that
they
is
had
right
1016,
they
a rather superficial distinction, because all
they would have needed to do, in terms of what has been
done, was to have someone more familiar with 1016 who
could have written them a more high sounding statement.
The only reason I am mentioning it is I thought it
quite possible you might hear from some of the people
that we had turned down. One of them was the man who
quite
a good
friend
of him.
the President's a Major Hooker.
Iisthink
you
probably
know
H.M.JR: What did he want?
MR. O'CONNELL: His was the aviation one.
H.M.JR: Really?
MR. O'CONNELL: Although it was not sent in by him.
(Discussion off the record)
MR. O'CONNELL: He was not the attorney for the ap-
plicant,
it was sent
over
from
the White They
mebut
it because
they
were
a little
I thought
thereHouse.
was no
about called that about attitude.
reason
concerned for
changing our general position saying no rulings until
219-E
-5the first. When they called me from the Bureau and
wanted to know whether that was to be made an exception
of, I told them no.
MR. BELL: Around there there is no trouble. I
think it has an effect when you go down the line. When
a fellow mentions the President in every other breath
I think it does have an effect on his subordinates.
H.M.JR: On very good authority he will call up and
say the White House will say that this is the White House
Speaking- Major Hooker, we would like to have you--and
then he goes ahead. It gives quite an advantage to have
that-MR. O'CONNELL: I think Tommy Corcoran used to do
it years ago, but it is an advantage.
H.M.JR: The thing is we have had no real abuses
of it in eleven years. I am just saying this so it doesn't
seep down.
MR. O'CONNELL: Sure.
H.M.JR: Herbert, I forgot, I've been invited by the
Radio Correspondents Association for dinner on the thirteenth,
Saturday.
Now, I don't know if this means overseas people
or who.
MR. GASTON: I'll make an inquiry. I think it means
radio correspondents in Washington, and there are some
quite important people among them, but I'll find out just
who.
H.M.JR: Martin Agronsky--incidentally, getting up
late on the farm, eight ' clock, I could hear Martin
Agronsky. If anyone listens to military broadcasts, he
calls a spade a spade.
MR. GASTON: Yes, he does.
H.M.JR: I think in the morning he is very good.
He has been on this last week. He has been tough. Do
you listen to him?
219-F
-6MR. GASTON: Yes, I have listened to him.
H.M.JR: If it is that kind of group--but if it is
just the kind of people that come in here, announcers,
you know, that level.
MR. GASTON: This is not announcers. Those are just
voices. These are correspondents, writers, and commentators.
H.M.JR: If that is what it is, I think I would like
to go.
MR. GASTON: I'll definitely find out who is in this
Association.
H.M.JR: If you don't mind.
MR. GASTON: Some of the individual stations are
now getting their own people in Washington, quite a few
of them, as reporters.
H.M.JR: When they do an article for me in the Foreign
Affairs and sign my name, see that they don't use three dollar
words I don't understand myself. It is most embarrassing.
MR. GASTON: That is the thing I tried to cut out.
I think I got defeated.
MR. WHITE: No. No. One dollar ninety-eight is the
most, the biggest one. I read it last night again, and
I think it is very good, very dignified, and very effective.
H.M.JR: You thought White was good?
MR. WHITE: No, there were six fingers in that pie
including Fred Smith and Herbert. Herbert went over it
and Adler wrote most of it. Bernstein went over it, and
I went over it, and Mr. Gaston. I read it last night to
see how it looked to me in print. I think it is a very
good outline.
H.M.JR: Incidentally, I do not have it here, but I
wrote a letter to the President saying we were going to
219-6
-7the Hill with Bretton Woods, and I would like a word
of encouragement from him.
MR. BLOUGH: What did he say there?
MR. WHITE: He said, "I am delighted that the hearings
are going to start on the Bretton Woods agreement when
the House reconvenes." "
MR. LUXFORD: Mr. Secretary, Senator Wagner's sec-
retary told me last week that the Senator felt we needed
strong support from the President. In other words, he
felt it would go through very easily if we got a real
backing from the President.
H.M.JR: If White again would read that paragraph
that I wrote to the President, just the part where I asked
about Bretton Woods--it is in the first part.
MR. WHITE: (Reading Secretary's letter to the
President dated December 28.) "I want to write you
about two subjects. The first is the so-called Bretton
Woods agreement. The House is prepared to start hearings
at the beginning of the new session. We are ready to
present the arguments in favor of the bill. I am counting
on your continued full backing of this measure. I am
afraid some of the banking interests are going to fight
us. We have a good case and believe the attitude of the
Congress will be non-partisan. May I receive a word of
encouragement from you on this matter?"
And that was his reply.
H.M.JR: That was Morgenthau drafting that, too.
But I did that very deliberately.
MR. WHITE: I think we ought to let you do more of the
drafting.
(Discussion off the record)
H.M.JR: Anything else?
219 - H
-8MR. BELL: On that point called Judge Rosenman last
night about the state of the union message and told him
what we had done with respect to the budget message, and
he said, "Well, does anybody ever read the budget message?"
I said, "Well, I don't know whether they do or not, but
do you think it would be better off in the state of the
union?" He said, "Yes, I think it would," and I think
he is right, and he said if you would send him over something, a paragraph, why he would try to work it in, in
which case I think you might want to withdraw from the
budget message.
H.M.JR: That was the thought behind that. I would
much rather have it in the annual message than I would in
the budget message, but I wanted to play safe.
MR. WHITE: We can put it in both, except that we
can put a short line in the budget and put a paragraph
in the state of the nation speech.
MR. BELL: They might put it in the budget message
among a number of things that ought to be done in the
next Congress, but where you can really put pressure on
it is in the state of the union message.
H.M.JR: I feel, particularly in view of this cor-
respondence, I would put it in a good stiff message on
Bretton Woods, and I would leave the budget thing along,
and the President is going to know it's in two places.
In view of this exchange of views between himself and
myself, I am more sure than ever, but I would like to
make the effort to get it in the state of the union.
MR. BELL: I think he will notice it in the budget
message, and I think if I say it here, why do you need to
say it in the other place?
MR. O'CONNELL: Which one was first?
MR. GASTON: The state of the union.
H.M.JR: Will you-may I put the responsibility on
O
you? (Indicating Mr. Bell) I would like to have it in
the state of the union first. Everybody agree?
219- I
-9MR. GASTON: Yes.
H.M.JR: Because-this?
MR. BELL: Harry, will you prepare something on
MR. WHITE: I will.
H.M.JR: All right. How far did we get? How far
have we gotten?
MR. LUXFORD: Randolph Paul dropped in last week and
said the Swiss bankers who have been over here negotiating
with the Treasury on Swiss blocked assets are very discouraged about the progress they are making, and that
they were sending out feelers as to whether or not they
could get him to represent them. He said that he wanted
first to get the reaction of the Treasury Department to
it because, after all, he had been in Foreign Funds Control
work and that he would have to have the permission of the
Treasury in order to do it.
H.M.JR: I can answer that. He ought to know better
than to ask.
MR. GASTON: Right!
MR. LUXFORD: I couldn't feel that way myself, that
there is anything bad about it.
H.M.JR: Herbert is with me. It is perfectly ridicu-
lous. A man who hasn't been out three to six months and
made a fuss about leaving Foreign Funds, and it was his
personal baby.
MR. WHITE: How about mitigating, sir? Maybe, Mr.
Secretary, if we talked it over?
H.M.JR: You can't budge me. I am sorry.
MR. WHITE: By mitigating, from the point of view
of Luxford--i there hadn't been this--we know that any
presentation would not alter our decision--that he
219-J
- 10 wouldn't get anywhere with them.
H.M.JR: Gentlemen, Lux is wholly within his rights
to raise it. I am wholly within my rights to say as long
as I am asked about Paul to say no. But it is a free
country.
MR. WHITE: He would charge him probably a half-a-
million dollars, and we would get half the taxes. They
wouldn't get any change in the decision.
MR. BLOUGH: It is a revenue measure, then.
MR. GASTON: You can improve our position a little
more since it won't change our position.
MR. WHITE: We would so inform Randolph that the
decision would not be changed, but if he could charge
a big enough fee so we could get a big enough tax--
H.M.JR: You have your fun. I am being in dead
earnest, and the answer is no. And I am glad I have
Mr. Gaston's backing.
MR. LUXFORD: All right.
H.M.JR: He has asked me. He knows how I feel, and
the answer I think to be unfortunate-MR. WHITE: I do not know whether the Swiss are going
to bring any more pressure--not on this point. If so,
I presume that you are still behind us in refusing the
Swiss to unblock those assets?
H.M.JR: What the Swiss are doing--they have a very
good Minister here who once said he wanted to come and
have it out with me. His wife called me up about it,
and I told him any time he wanted to come up he could come,
and he never came, and that is fully six months ago. The
answer to these people is let the Swiss Minister come in,
not bring his wife, because she is too smart. (Laughter)
MR. GASTON: She is readheaded, too.
219-K
- 11 -
MRS. Klotz: She is Wallace's sister.
MR. LUXFORD: In all fairness to Randolph, certainly
he was not particularly interested in taking the case. He
was raising it.
H.M.JR: He raised it, and thumbs down.
MR. GASTON: They had a financial counselor over
there who was very smart.
MR. WHITE: The trouble is they are not looking
for smart people. They don't think they'll get anywhere.
They think they are picking someone with influence, and
so we thought we would let them pick them. (Laughter)
For one-half million dollars he thinks he is getting
people with influence.
MRS. KLOTZ: It takes one million dollars to find out
he has no influence.
MR. GASTON: They never find that out, but it doesn't
stop people from going on following the same trail.
H.M.JR: My answer is emphatically no.
What else, Luxford?
MR. LUXFORD: I think that is all. I want to talk
to you a little later this morning about another matter,
if possible.
H.M.JR: All right.
- DuBois?
MR. DuBOIS: Sometime soon, Mr. Secretary, I think
we ought to sit down, a group of us, and discuss a
memorandum McCloy sent to you, sent to the President
on war crime.
H.M.JR: Did you fellows get the stuff I sent by
registered mail from McCloy?
219- L
- 12 -
MR. WHITE: Yes, he is referring to that--
H.M.JR: I sent it to you, didn't I?
MR. WHITE: Yes, I just read it, and they have read
part of it.
H.M.JR: Will you see that by two o'clock I get
two letters in answer to McCloy, one thanking him for
war crime, and the other thing thanking him for sending
me stuff on AMG.
MR. WHITE: If they are just thank you letters, I
can have them ready, but if you want to comment, there
is something in both we want to take up.
H.M.JR: Just acknowledge them, and I would like to
have it by two o'clock. Tell them I should like to continue to receive those AMG reports.
MR. WHITE: We get the ones from which they are
excerpted from Taylor.
two?
both.
H.M.JR: I want the original. Will you get that by
MR. WHITE: These are excerpts, but we might get
MRS. KLOTZ: Do you want to bring up the Gillette
matter that the Secretary--
219-M
- 13 MR. LUXFORD: Bergson called me the other day and
wondered whether or not I might remind you about the
Gillette matter and the inter-governmental committee,
and I personally think it would be a good idea if we
could move things in that direction.
H.M.JR: Just in the room here, his name is going
up. The President tells me he is sending his name up
to the Senate for the Surplus Property Board.
MR. LUXFORD: We know that at least informally, but
I think that this is really another possibility.
H.M.JR: Well, I know how much trouble the President
is having in finding people, and it would be a mistake
for me to interject, and I don't think the President would
like it. I'm perfectly willing to carry on things that
I'd like the President to do which I think are important.
I don't think this is important. They have got to find
somebody else, and I think it would only annoy the President
and nothing would happen. I know he has sent Senator
Gillette's name up because he told me so. Gillette and
Harry are the only two names going up. I don't want to
upset anything, see?
MR. LUXFORD: All right. I think Gillette personally
is a muchissue.
better man on the refugee issue than on the
domestic
H.M.JR: I agree, but I often can't go into long
explanations, but you will have to take my word for it.
I am often wrong, but it is a very complicated piece of
business. I mean the things you have to go through to
get something done are just unbelievable.
MR. LUXFORD: That is all I have.
H.M.JR: And I can not always explain. Joe?
MR. DUBOIS: Nothing else. I hope to have a little
time to talk about this book before next Friday.
H.M.JR: You will. I do not know how busy you people
are. Well, Monday we work, don't we? I may bother you
219-N
- 14 tomorrow. How do you feel?
MR. PEHLE: Very well. I was already having breakfast down there when I got the call.
H.M.JR: Three biscuits?
MR. PEHLE: No biscuits--some coffee.
MR. WHITE: While everybody's here, I met Silvermaster--had lunch with him, and I asked him how things
were going there, and he said there has been a splendid
change. It is amazing what Pehle has accomplished.
H.M.JR: Do you feel you still need your personal
spy there now that Pehle is there?
MR. WHITE: No, I do not think you have to put him
in. You had in mind the man I was going to put in?
MRS. KLOTZ: That's right.
H.M.JR: I am talking about Silvermaster.
MR. PEHLE: Silvermaster is doing a very good job and
has been sworn in, Mr. Secretary.
H.M.JR: He has been found kosher?
MR. PEHLE: He has been sworn in, period.
MRS. KLOTZ: He has really been--Mr. Gaston has
really been marvelous.
H.M.JR: Take a bow, Mr. Gaston.
MR. GASTON: I told Mack if Civil Service was going
to insist on rehashing stuff our committee passed on, I
was going to write and say I wanted nothing more to do with
the committee. We were either going to pass on loyalty
questions, but we weren't going to mess over them after
we had handled them.
H.M.JR: Somebody ought to talk to Mack. He is
219-0
- 15 -
constantly getting himself in dutch in Washington at the
Cabinet level. Somebody ought to talk to him. How's
the boiler?
MR. PEHLE: Still cold.
H.M.JR: Let me ask you this: Do you think it is
a mistake for us to do this? It is bothering me.
MRS. KLOTZ: You had another idea, didn't you?
MR. PEHLE: The other idea didn't change very much.
I think it would be a mistake to sell them anything directly.
That is clear. To sell through a dealer or manufacturer at
a price makes sense; that doesn't particularly bother me.
H.M.JR: It doesn't?
MR. PEHLE: If the price is all right--there are no
priorities, and as long as the price is right, I am not
troubled by it.
H.M.JR: You are not? Well, if you are not troubled,
then I am not. Now, if you want any additional information,
my suggestion is--the superintendent's name is Plough. I
think it is spelled P-1-o-u-g-h. I suggest that you call
him on the phone.
MR. PEHLE: That would simplify matters.
H.M.JR: P-l-o-u-g-h. He is the superintendent.
MRS. KLOTZ: Does Plough know about the boiler?
H.M.JR: He knows all about it; the President called
him himself; and the President said the trouble is, people
want too much. He said, "I want to get things cheap. They
want to charge me five hundred dollars for a boiler.
MR. HAAS: So do we. (Laughter)
MR. PERLE: That is what I meant.
219-P
- 16 H.M.JR: Don't do anything unless you are completely
satisfied.
MRS. KLOTZ: He would be, but the President wouldn't.
H.M.JR: That is all right. You call up Plough. It
would be under Poughkeepsie, I think.
MR. PEHLE: There are a couple of other things I might
mention.
H.M.JR: Please.
MR. PEHLE: I got a letter from Abe Fortas on the
procurement of supplies in Puerto Rico. They have been
over to see Olrich and Mack several times to get some of
our cutting and trimming of garments work done in Puerto
Rico, and they felt they had been kicked around. I have
gone into it, and it looks now like we can give them work
covering four million yards of material unless something
goes wrong in Puerto Rico which is sufficient to keep the
unemployed garment workers down there busy for & couple of
months and change the employment situation down there. It
is just terrible, and is getting worse. And I thought
anything we could throw in that direction you would certainly
want to do.
H.M.JR: Oh, yes.
MR. PEHLE: So I am moving ahead on that.
H.M.JR: Just to digress a little, up at Quebec in the
discussion on India between the President and Churchill,
Churchill said, "After all, Mr. President"--or Mr. Roosevelt,
or whatever he calls him-- you had such a wonderful demonstration of what you can do with colonies in Puerto Rico that
you are fully qualified to tell me what to do in India.
(Laughter)
MR. BELL: At home?
H.M.JR: "You are fully qualified to tell me what to do."
What else?
219-Q
- 17 MR. PEHLE: I thought you might like to know that
the Army is withdrawing from Surplus an awful lot of stuff
that they have declared to us.
H.M.JR: You told me that. I saw it in this morning's
Times.
MR. PEHLE: The group had eight billion, six hundred
and twenty-three million batteries, and they are starting
to withdraw all sorts of other things from nuts and bolts-they could use mattresses. They are just reversing the
whole treatment. I suspect the Army and WPB will go in
other directions now, but we are having a lot of that
happen in the last--
H.M.JR: In one way it is good; it gives us a
breathing spell.
MR. PEHLE: So does the adverse war; it is going
to slack off on surplus, I should think, for a while. The
net effect in the end would be much larger surpluses,
because I have a feeling that from now on they are just
going to pile up multitudinous reserves of everything.
MR. WHITE: You don't think they are going to ship
it abroad--they will have to dispose of all of it abroad?
MR. PEHLE: Under the latest plan, nobody knows.
H.M.JR: What else, John?
MR. PEHLE: That is all I have.
H.M.JR: May I make this suggestion, that you go home
after lunch and lie down. I know what it is, you don't
think it does anything, and you don't feel it, but you
would be surprised. Just take a suggestion from the old
man and go home.
MR. PEHLE: I am glad to have the excuse. (Laughter)
MRS. KLOTZ: Mr. McDonald asked if Mr. Pehle donated
blood today.
T-6
219-R
- 18 MR. McDONALD: We want to show another good example,
Mr. Secretary.
H.M.JR: You have one there I was going to ask you
about.
MR. PEHLE: That is all I have.
H.M.JR: George?
MR. HAAS: I have a couple of things.
H.M.JR: Incidentally, George, contrary to Mr. Bell
I am going to ask you boys--and you had better be ready-about how this short term rate slipped up on us.
MR. HAAS: You mean those items that Sylvia Porter
wrote? (Hands Secretary "Reporting on Governments' of
December 26, 1944.)
H.M.JR: I will take that home (Hands "Reporting on
Governments" to Mrs. Klotz.)
Bell asked me to bring that up.
MR. HAAS: That is a good story. We are all right.
H.M.JR: I will give you a chance-MR. HAAS: We are all right.
H.M.JR: What else?
MR. HAAS:
H.M.JR:
Sylvia Porter discusses that.
She has a pipe-line.
MRS. KLOTZ: A pipe-line! (Laughter)
H.M.JR: What is it, a sewer?
MR. WHITE: That's the main line; it has branches.
t-7
219-S
- 19 MR. HAAS: I have never seen her myself. Whoever
gave her that did a good job.
MR. BELL: This is a good letter.
MR. BLOUGH: I suppose you saw the unfortunate tax
stories this week, one in the Herald Tribune, a hot weather
story written in September, but unfortunate just the same;
and the other was George's statement, which is bad, but we
talked around here and decided the best thing to do is
keep very quiet about it.
MR. GASTON: He is out with another one.
MR. BLOUGH: Again today?
MR. O'CONNELL: On foreign policy?
MR. GASTON: On taxes, saying that the reversal in
France now--
MR. BELL: That is Doughton.
MR. GASTON: George has given the lead on it. I guess
it is on the ticker, too. With the reverses in France, any
immediate reduction we could have had otherwise is out
of the question now.
MR. BLOUGH: That is probably Doughton answering George.
MR. O'CONNELL: On Wednesday George said, "Assuming
we can see a tentative end of the war in February or March,
we can look forward to a ten percent horizontal reduction
in corporation taxes this year." Doughton must have talked
to him, because--
H.M.JR: By the way, this Macy deal on their particular
pension plan--I wish you would give me a little note as to
whether it is good or bad. Give me an example of good types
or bad types--what the Treasury thinks is a good type.
MR. BLOUGH: That, I think--
t-8
219-T
- 20 -
MR. WHITE: I would like to talk with Herbert. I
would like to use a lot of copies of that article, and I
don't know whether it would be better to print them ourselves or get reprints, but I will talk that over. The
rest can wait until I-H.M.JR: Do you have something else?
MR. WHITE: No.
H.M.JR: I have Gamble and his staff coming in at
eleven.
This thing I spoke to you about last night-MR. WHITE: It is ready.
H.M.JR: Will it be in by two?
MR. WHITE: Yes. It is ready now; it is all set.
MRS. KLOTZ: Everybody is notified about the time?
H.M.JR: I set the time.
MRS. KLOTZ: Nobody knows it.
H.M.JR: They don't listen. I set it for nine-
thirty--Bretton Woods.
MR. LUXFORD: Is that on the bankers, Mr. Secretary?
H.M.JR: Yes.
MRS. KLOTZ: The day, but not the time.
H.M.JR: Then we will start at nine-thirty.
MR. WHITE: The only question remaining is whether
you want anyone to replace Eccles.
H.M.JR: Yes. Let them be represented.
219- U
- 21 MRS. KLOTZ: Goldenweiser and Szymczak.
H.M.JR: I don't know--who would you like?
MR. WHITE: Ransom is next in charge, but Ransom
doesn't--
H.M.JR: That is good.
MR. WHITE:
follow it very much. Szymczak is
more enthusiastic about it. They say he is supposed to
take up all--
H.M.JR: Let's put it up to the Acting Governor.
There is a difficulty there; you are only going to have
another fellow sitting here pacifically agreeing. I went
through all this. Ransom is very sensitive.
MRS. KLOTZ: I spoke to him yesterday, and he said
he didn't know anything about it. They connected me with
Elliott Thurston, and he didn't know anything about it
either.
H.M.JR: Mr. Daniel Bell might contact Federal
Reserve. I am having a meeting, of which you have been
advised, on the fourth on this question. The people
coming down are Burgess, Potter and Ransom.
Now, we would like Mr. Eccles to come; if he can't
come, who would they like to send? You can't send more
than two people.
MR. BELL: Eccles will not be in town January 9.
H.M.JR: Am I right about Ransom being very sensitive
about these things?
MR. BELL: Yes, he is acting in place of Eccles, and
should be consulted. He probably won't want to come.
219-V
- 22 sent.
MRS. KLOTZ: You ought to see the telegram Eccles
MR. WHITE: When you see Mr. Hoffman, I would like
to see him about five minutes so I will know about what
they are doing. Incidentally, Danny, has everybody
received notice about this meeting?
MRS. KLOTZ: Everybody knows now; the only person I
can't communicate with is Ned Brown. I don't know where
he is, but I will get word to him.
MR. BELL: Some of them said they hadn't received
definite
word.
H.M.JR: You come in at two-fifty-five on January 3.
Ionwill
put you down, and you can stay. Are you all right
this?
MRS. KLOTZ: I think so, I am sorry.
MR. BELL: The total E bonds last night, before
yesterday, were sixty-five million beyond. That puts
us up to two billion four hundred and fifty million.
We have forty-eight million yet to go before we go over
the top,
wethat.
will get that today, and probably a good
deal
morebut
than
The total is probably not as impressive to you,
twenty billion, eight hundred and fifty-five. Remember,
he gave you twenty billion eight hundred and six the
night before. The total should have been twenty-seven
fifty. We are going close to the twenty-one billion
mark, but not over.
You asked for the refundings in the last month or
so. I have given them to you since August 1, certificates
and notes.
H.M.JR: You made that.
MR. D.W.BELL: The income taxes are coming in very
T-
219-W
- 23 -
well, three billion four hundred and seventy-two million
up to date, against an estimate of three billion, two
hundred eight million for the month. We are going to
be about three hundred million dollars over.
H.M.JR: The President readsthat, Dan. I noticed
he comments on it once in a while in Cabinet.
Anything else?
MR. BELL: That is all.
MR. McDONALD: I have one item that might be of
general interest. An Act was approved December 21 which
would provide for payment of compensation for accrued
or accumulated annual leave to employees who are being
separated from the service, or employees' beneficiaries
or estates in case of death. The latter is very important
to people in low salary brackets and who leave their
families without any income whatsoever. Heretofore they
have never been paid for their accrued annual leave.
MR. WHITE: It has been very unfair. I was very glad
to see that done.
MR. D. W. BELL: That would have meant twenty-five
hundred dollars to Norman Thompson's family.
H.M.JR: What I would like to get from you is this.
I would like to have one sheet of letterhead size paper
that could be mimeographed on both sides and put in with
the checks of the Treasury employees which would be in
the form of a little news letter that we could send them
twice a month, you see, something like that explaining
it to them, so that they will know what it means, and
in it mentioning different things that happen.
Let us see, we were talking the other day about
meritorious promotions. Assign somebody to it, and confine
it to only one sheet mimeographed on both sides which would
go out, and I would like very much to see it. You might get
up a dummy and show it to me.
219 - X
- 24 MR. McDONALD: We have done some talking about such
a letter, but it hasn't been presented to you, yet, sir.
H.M.JR: Confine it to one sheet.
MR. WHITE: Why confine it to things like that? Why
might that not be expanded a little and take in things
the Treasury has done so people can take pride in their
organization, things which may or may not bear on them.
H.M.JR: If anybody has any suggestion, give it to
Mr. McDonald.
MR. BLOUGH: Several bureaus in the Treasury have
their house organs.
MR. D.W. BELL: You have one in the Chicago office,
and one in the Treasurer's Office. They are nice news
letters issued once a month.
H.M.JR: I would like to have one come out of the
Office of the Secretary of the Treasury. Mark it "Office
of the Secretary of the Treasury.' 11
MR. McDONALD: We will work with Charlie Shaeffer
and Mr. Gaston.
H.M.JR: That is right. I think I am seeing you all
for lunch.
MR. GASTON: Yes, sir.
H.M.JR: Good, downstairs in my own dining room.
MR. WHITE: Some of these things might be cleared
either today or Monday.
H.M.JR: I would like Mr. Bell and Mr. Gaston to stay.
220
December 30, 1944
11:05 a.m.
WAR FINANCE
Present:
Mr. D. W. Bell
Mr. Gaston
Mr. Gamble
Mr. Houghteling
Mr. Engelsman
Mr. Lane
Mr. Coyne
Mr. Adams
Mr. Predmore
Mr. Shugrue
Mr. Little
Miss Blake
Mrs. Klotz
H.M.JR: May I tell you people of War Bonds how
delighted I am at the success of the Sixth War Loan?
I only have praise, and no criticism. It has been an
amazing performance, and you all ought to feel inward
satisfaction for having been a part of that machine,
and I would like to take this opportunity to say thank
you to one and all of you. It has been a magnificent
performance, and I am simply delighted.
I have one idea which I would like you people to
think about. It is only an idea; I haven't mentioned
it to anybody outside because I didn't want to do anything about it until I threw it at you and saw what you
people thought about it.
There is so much talk about the trouble that they
are having with production, and we have this very fine
volunteer organization, and our next drive will be some
time around the beginning of June. I just wondered
whether this War Bond volunteer organization might not
help the War and Navy Departments in certain places.
They are always very generous in helping us, and I
221
-2wondered whether we might not turn in January and say
to Mr. Patterson, "Now, look, if you are having any
particular trouble in any area through January, February
and March we are available, and we would like to pitch
in and help you." I would like you people to think
about it, and possibly talk about it today yet with
Mr. Gamble before he goes, and next week with Mr. Coyne.
But we are always calling on them, and I was thinking
whether possibly we might not pitch in and help them on
some of their morale problems. I wanted to get at you
before--
MR. GAMBLE: We not only have the people, but the
facilities to do it. Among other things, we have motion
pictures, all of the devices that you would want.
H.M.JR: Now of all times would be the time when
we could help labor relations, the thousand and one
things we have developed through trial and error. So,
will you think about it, and then if you think we might
have it, you might appoint a little committee to meet
with me next week early.
MR. GAMBLE: I would like it. The reason I would
like it is, we have now we took over from the Air Force
the Gable film, and we have an exclusive on it for the
month of January, and we are now throughout the country
having bond premiers and plant showings in connection
with the new Clark Gable film.
MR. GASTON: You have it here?
MR. GAMBLE: Yes, we have it.
H.M.JR: If we want to do it, I think I would like
the Secretary of War and the, Secretary of Navy to write
me and specify the place where we can be helpful on a
concentration basis. I wouldn't like to ask them to
do it all over, you see.
Take Akron, one of the worst spots and say, "Look,
won't you go in and help us in Akron?"
222
-3MR. GAMBLE: We can subordinate ourselves to any
problem they have in respect to leadership, etc.
H.M.JR: And it will keep you people from getting
rusty.
MR. BELL: Does this involve your leaders, Ted?
MR. GAMBLE: Yes, it would, but they would be
delighted to do it.
MR. BELL: The trouble is, in every community you
have the top people as leaders in all drives, War Bonds,
Red Cross, Community Chest, and you have them working
now about twelve months a year.
MR. GAMBLE: On a specialized basis. If somebody
gave us twelve spots to handle, we could do it with ease.
MR. BELL: The Red Cross Drive is in March, and the
UNRRA campaign is in April. These fellows are going to
be in on that.
MR. ENGELSMAN: Akron, as the Secretary mentioned,
is one of the best spots on labor management cooperation,
and we have a good organization there. Mr. Houghteling
has a good organization there, and I think we could do
a lot to help in that spot.
H.M.JR: That is one of the places where there
have been real shortages.
MR. GAMBLE: We worked out of Akron two years ago,
had a rubber industry campaign, and that worked so well
we took the CIO man out of there, and we have had him
with us ever since. He did a magnificent piece of work.
H.M.JR: I thought about this a lot. There are a
lot of good angles about it, and we are always asking
them to help us. If we can go and say, "We would be
glad to help you," " it would give a certain amount of
credit to the War Bond organization. They could say
that in this very difficult time they pitched in and
helped on the production problem. Well, anyway, I am
throwing it at you. When does your train leave?
-4-
223
MR. GAMBLE: Not until tonight. (Laughter)
H.M.JR: You have a lot of time that you have nothing
to do with. But you can talk about it, and designate a
committee to call on them, will you?
MR. GAMBLE: Yes.
H.M.JR: That is all I have. The floor is yours.
MR. GAMBLE: I thought if you have the time we might
ask one or two of the people to tell you what is in the
hopper now. We have started work on programs to be
carried out between now and the Seventh War Loan.
H.M.JR: What I would rather do is, I would rather
get that next week, because I will have more time then.
Next week this same group can come over. I would be
very glad, but I am a little bit behind today, and if
it is just the same to you--
MR. GAMBLE: It is just as agreeable. Mr. Coyne
can show you the statement we had prepared to go out
on Monday and also to show you the final report on the
broadcast you haven't seen.
H.M.JR: Fine. Dan and I discussed the date, and
set it tentatively.
Now, do you want to do it with these people?
MR. GAMBLE: I would just as soon do it today. We
had this meeting with Mr. Bell, as you perhaps know, and
we have pinned it down to a date sometime between the 10th
of May and the 10th of June as a starting date for the
Seventh War Loan. Now, we don't need to have any more
information than that at the moment. That is enough to
make the June magazines, and that is good enough to tell
these publishers to go ahead.
The reason we would like not to pin it down is that
some chairmen were talking about starting the Drive late
in May so they could use the schools. We don't want to
select a date. We would like to let the chairmen within
that month pick their own dates.
224
-5-
We would like to start the Drive any time between
May 10 and June 10, and let them decide on the starting
date, bring them in on the 10th of February.
H.M.JR: We do what?
MR. GAMBLE: Bring them in around the tenth of the
month--10th of February.
H.M.JR: Is that all right with you?
MR. BELL: It is all right with me. The tentative
figures we have gotten up went to June with three billion
three hundred million dollars. That doesn't include any
bank financing or any Treasury bill programs. If you
have the Treasury bill program, that would be increased,
of course, but if you don't have the Treasury bill program
and go into June with three billion dollars, you pretty
well use that money up before the 20th of June, so we
would have to have some additional money if you want to
put the payment date late in June, if you start it as late
as the 10th of June. I don't think we could possibly get
by in spite of the Federal Reserve without some Treasury
bill program, because our balance certainly ought to be
higher than three billion three.
H.M.JR: All they want to know, these magazine pub-
lishers, is if we would like to have something on the
June cover.
MR. GAMBLE: That is all we need until February 10.
We will let the Chairmen decide between the May 10 or
June 10 starting date, and we will go into that more
thoroughly--
H.M.JR: I would like to be in on that a little bit
more. For today, is that enough? In the meantime, don't
talk about our balances. It gives other people an indication
of how much money they are going to spend on the war, and
gives the market a tipoff on buying and selling. Be careful when outsiders are here not to talk about our balances,
because people could use them for purposes which would
be unfriendly.
MR. GAMBLE: You have a lot of quarterbacks outside
of the Treasury, too.
225
-6-
H.M.JR: Of course, I am just cushioning it, too.
What else, Mr. Gamble?
MR. GAMBLE: The other matter we wanted to discuss
with you involves yourself and the President and the
newsreel we want to--
H.M.JR: Who do you want to stay behind?
MR. GAMBLE: Engelsman, Coyne, Little and Lane.
H.M.JR: All right, those who are leaving, Happy
New Year to you.
(Miss Blake, Mr. Houghteling, Mr. Adams, Mr. Predmore
and Mr. Shugrue leave the conference)
H.M.JR: All right.
MR. GAMBLE: The first matter, Mr. Secretary, is,
we are planning a big plant operation in the month of
February on our Payroll Savings. We had talked originally
about the possibility of having a Disney film and tying in
this operation on organized labor matters of the United
States. We can't get this film; time doesn't permit. It
takes about four months to get it. There is a technicolor
shortage. We have sold the newsreel companies the idea
of making some for us themselves, the thought being we
would start with the President and have a minute speech
from the President and a minute speech by you, and take
some leading manufacturers, and Murray and Green, and do
this job with newsreel technique, and support that film
in the plants by showing some actual war films we have
available. We would like you to deliver yourself and
the President to us. We are ready to start any time.
H.M.JR: The President is easy.
MR. GASTON: Add Mrs. Roosevelt. have a conversation
between the President and Mrs. Roosevelt.
H.M.JR: In their cottage on the Hill?
226
-7MR. GASTON : Yes.
MR. GAMBLE: This is more than just asking people to
buy war bonds. We want to write everybody's speech; we
want to know what each person is going to talk a bout so we
can do a selling job with eight or nine agenci es -news
people. We want to sell people the idea of holding their
bonds, what it means in the future.
H.M.JR: Mr. Gaston, I will give you that to handle
with Steve Early.
MR. GAMBLE: We would be delighted to do it.
MR. FNGELSMAN: This would be the opening, and would
take only one minute. We hope to keep the Payroll Plan
moving as it is and sell them the idea of keeping their
bonds, as well as buying more bonds.
H.M.JR: The great trouble in asking the President
is to get an answer promptly. That is what you want, isn't
it?
MR. GAMBLE: That is right. But this will be done
by the crew that normally handles it. In other words,
newsreel editors will come in.
H.M.JR: This goes to the factories?
MR. GAMBLE: To twenty-five million workers. It is
a pretty fine thing for the President to do.
MR. ENGELSMAN: It ties in with what you had in mind.
H.M.JR: I am for it; it is just the terrific chore
of getting around all the people to see him--they might say
no.
You won't be here?
MR. GAMBLE: No, if you would like me to start it,
I would start it today with Early.
227
-8-
MR. BELL: I should think he would like it. Twentyfive million laborersH.M.JR: We will make up the speeches. Herbert will
have to take on some of that. If you are going to start
it, you had better work with Herbert today so he will
know.
MR. GAMBLE: I will have a conversation with Early
and tell him I am leaving town and that you will check
with him and I will give you a report of the conversation.
MR. GASTON: That will be fine.
MR. GAMBLE: And you will be available any time within the next couple of weeks?
H.M.JR: Yes.
MR. GAMBLE: I suggest the talks. Then have the
commentators and the best scenes of the war, and really
do a job of it.
H.M.JR: Find out who did one of Henry Wallace.
MR. GAMBLE: Paramount.
H.M.JR: Wasn't that good? Who directed that?
Find out who did that. That is the best job I have
ever seen. if you could get that man to do it, you
will have success.
MR. GAMBLE: We can't; we have already tried. We
asked the newsreels to take full responsibility for it.
You see, there is a little rivalry, Mr. Secretary. Wallace
did this thing, in effect, in the studio, and they took
weeks to shoot it. It was not done with newsreels;
Wallace rehearsed it. They gave him his lines, and they
would make it over and over. You have seen Wallace work
with script and work without it. He had to give up
three months of his job up there in order to make that
reel. That is the truth. (Laughter) The reason I
knew about this, you asked me about it once before.
You and I saw it together. You asked me to check, and
228
-9-
this fellow went into production on it.
H.M.JR: The result was good.
MR. GAMBLE: Beautiful. They would give him ten
lines at a time and he would do these lines, and they
would have to shoot it over, and they worked and worked
and worked. (Laughter)
H.M.JR: Where is the one I did in the studio, Twentieth Century Fox? Find out, will you, somebody? Does
that come under you?
MR. LANE: No, but I will ask.
H.M.JR: I would like to see it sometime.
MR. GAMBLE: That is one thing--the statement you
made we would undoubtedly want to do over, but it is
just a suggestion. We will get the final figures the
first of the week.
MR. LITTLE: That is just a brief statement.
H.M.JR: (Reads suggested press release) I don't
like it already.
MR. LITTLE: I didn't think you would like that part.
H.M.JR: Give a copy to Mr. Gaston. When is this
going out?
MR. GAMBLE: Not until you get the final figures,
next Tuesday.
H.M.JR: When do you want a release on this?
MR. LITTLE: Probably about next Wednesday.
H.M.JR: When do you want me to O.K. this? Let
Gaston have it, and I will clear it for you Monday,
Herbert. I don't want to, frankly, waste my time until
Gaston has had a chance to go over it, and I won't
229
- 10 have to do very much.
MR. GASTON: You showed me an other one.
MR. GAMBLE: I think we released one. That went with
the other figures.
MR. GASTON: All right.
H.M.JR: If Mr. Gaston will see me next year, I'll
do it the first thing.
MR. GASTON: Very early next year.
H.M.JR: What else?
MR. GAMBLE: I think it would be fine for everybody
to see this, not because it is in connection with what
you do, but we have made a survey to find out how good
a coverage we got on this last release covering-MR. LITTLE: your speech on the sixteenth.
MR. GAMBLE: And we have a record of it here together
with front page clippings, and I think you ought to look
at it. We get so upset when we see a line in the New
York newspapers or Washington newspapers, and the rest
of the country doesn't know what they are doing. (Places
scrapbook on newspaper coverage of Secretary Morgenthau's
broadcast of December 16, 1944 closing Sixth War Loan
drive)
MR. LITTLE: (Reading) "An estimate of 113,312 agate
lines equivalent to 404 full newspaper columns ran in the
472 Sunday papers in the country December 17, 1944. 11
H.M.JR: This was on the broadcast.
MR. LITTLE: (Reading) "Front pages. This story
hit page 1 in 275 papers on December 17--approximately
60 percent of all Sunday newspapers. Wire service releases. AP, UP and INS. AP wires released 700 words.
230
- 11 Here are just a few of the front pages, The New
York Times, The Wall Street Journal, Times Herald, The
Sunday Star, Poughkeepsie New Yorker--
H.M.JR: According to Gamble, we have a good organization down in Poughkeepsie.
MR. LITTLE: We only get a few papers over there.
These are all front pages.
H.M.JR: Any West Coast paper?
MR. LITTLE: I don't know.
MR. GASTON: We had Oklahoma anyway.
MR. LITTLE: "The Secretary's message to the people
was commented upon editorially in the: New York Herald
Tribune, New York Times, Boston Post, Washington, D. C.
Star. There were quite a few editorials.
MR. GAMBLE: Did you ever see this Boston editorial?
There's the Boston Editorial (indicating).
H.M.JR: What did they do?
MR. LANE: The Herald Tribune-
MR. LITTLE: These are just some of the clippings
from the OWI project.
H.M.JR: Did that editorial setup in the Tribune
do much? You don't know how much they picked it up?
MR. LITTLE: Every newspaper in America got it.
H.M.JR: O.K., very good.
MR. GAMBLE: When you see how thoroughly one of those
jobs can be handled, it certainly discounts one of these
little slips we have once in a while. For example, we get
all upset about Sylvia Porter's comments, or Vanderpoel's,
231
- 12 -
bearing on what we do, all of us. Our program is taken
for a ride by what one or two columnists say. Actually,
we just don't know the amount of support the country gave
this whole operation. It dwarfs any one of these things.
Maybe you and I overestimated it (to Mr. Bell).
MR. GASTON: Maybe you upset something, Ted.
H.M.JR: I don't know.
MR. GAMBLE: Remember when you got Sylvia Porter's
column about a week ago? You said, "If this is supposed
to be helping our program-"
H.M.JR: Did I get upset?
MRS. KLOTZ: You ought to know better than that.
H.M.JR: The last time I was upset was up in New York
when I opened the Drive.
MR. GAMBLE: I meant that it is good once in a while
to check and see how the country is treating this program
as a whole. I think periodically we ought to check papers
throughout the country and check them even though it costs
a little money.
MR. LITTLE: We can't get them all, but we can get a
cross-section.
H.M.JR: I didn't think we got a very good distribution
on my appearance there before the Newspaper Guild. They
didn't print the story about my dancing with the President
of the Guild, did they? I was very much disappointed.
MR. LITTLE: They took the picture, though. We ought
to at least have a copy of the picture.
MRS. KLOTZ: Yes, we ought to have a copy of the
picture.
232
- 13 MR. LITTLE: But they haven't delivered it.
MR. LANE: Is the Secretary a good dancer?
MR. LITTLE: Very good.
MR. GAMBLE: I have never seen the Secretary dance.
H.M.JR: What do you expect George to say? Ask him
outside. (Laughter)
MR. GAMBLE: We thought we would make plans now for
bringing the chairmen in here about the tenth of February.
H.M.JR: I would like to be here. I would certainly
like to be here. Everything is fine, as I said earlier,
and I might see you at lunch.
MR. GAMBLE: Yes.
H.M.JR: Lunch is in my own dining room.
No, I have nothing, and by the way, Coyne, somebody
got it into the President's mind that Georgia isn't going
to make the quota. If they do, for God's sake, tell me.
MR. COYNE: They will make their quota in E Bonds and
their overall quota.
H.M.JR: He has Georgia on his mind, and I want to
clear that up, because he gets excited! But I told him
last night that we emphasized the E Bonds, that we made
more than in the Fifth.
I think if that story--if I know how it is written--
I think we ought to emphasize the fact that we went over the
Fifth. We asked for less. I tell you what I would like to
see mathematically, just as a matter of interest, the
percentage of how much we went over in each of the six
drives from what we asked, just percentagewise, how much
did we go over percentagewise. I have never seen those
figures.
233
- 14 MR. GAMBLE: Georgia is one hundred and fifteen percent
of her quota now.
H.M.JR: I am suggesting the possibility of putting
in each of the six drives, how much percentagewise we
got over what we asked for.
MR. GAMBLE: We put that in this story.
H.M.JR: That is what I was suggesting.
MR. GAMBLE: And we already have the answer to
solving the reporting problem in the Seventh War Loan.
It is a great task, mechanical task. We are going to
supply every paper in the country with a graph every
day showing where we ought to be and where we are.
H.M. JR: You know the story of what we have done
through advertising, so don't wait until the beginning-MR. GAMBLE: No, we are not going to wait until the
beginning. We have 8 plan for something in March now.
H.M. JR: Well, gentlemen, you have the satisfaction
of a job well done.
TREASURY DEPARTMENT
INTER OFFICE COMMUNICATION
DATE December 30,
1944
TO:
Secretary Morgenthau
FROM: Mr. Ted R. Gamble JRT
Broadcasting Magazine would like to reproduce a
signed statement from you concerning the radio broad-
casting industry's contribution to the War Finance
Program, and an indication for the need for future
support. It is also intended that this statement
should be photostated so that it may be distributed
to all members of the National Association of Broadcasters.
The attached statement is a suggestion to be
signed by you if, in your judgment, it appears to be
appropriate.
I am willing to make
a statement, but this
are is only
From
235
To the Broadcasting Industry of America:
Since the inception of the War Finance Program, radio
broadcasting has played a vital role in making this program
successful. The Sixth War Loan Drive just terminated is the
latest example of an accomplishment in mass sales that
reflects great credit on the members of your industry in that
it marks a fine patriotic contribution and a high professional
achievement.
The ability to influence thought and action carries with
it a great responsibility. The radio industry by its proven
accomplishments has an equity that can be guarded only by the
maintenance of the high standards that have been set.
Succeeding War Loan Drives will present new difficulties
and problems. Swiftly moving world events may sternly test
our ability to keep pace on the home front. It is indeed
comforting to know that your industry will be ready to meet
the new challenges with the confidence born of demonstrated
capacity and readiness to serve.
RWC:ebn
236
DEC 30 1944
Dear Elesnor:
I have your note of December 19, 1944,
with which was attached a communication
addressed to you from Mrs. Frances L. Richmond
of San Francisco commenting on rumors concern-
stating
some
were
not
obtaining time.
ing the possible freezing of War Bonds and also
rumor
of
ask you
War
to
mention
of
such The
Treasury a is available in all field offices of the War Finance
refute Bonds, Concerning rumors that has delivery it I gives do because issued not the workers added of feel sometimes their statement, currency that apparently of bonds the I the should which to freezing on them.
Division, for appropriate use. I am enclosing a
copy of this statement.
I have asked our San Francisco office to
investigate whether there are any unnecessary
delays in the delivery of War Bonds in that area.
Thank you for your interest. We are watching all rumors closely, and I will call upon you
when it seems to me desirable to have you include
a constructive statement in your daily column. I
am returning the letter in question herewith.
Sincerely yours,
(Signed) Henry
Mrs. Franklin D. Roosevelt,
The White House,
Washington, D. C.
Enclosures.
RWC deb
237
STATEMENT OF UNDER SECRETARY OF THE TREASURY REGARDING
RUMORS CIRCULATED CONCERNING ThE "FREEZING OF WAR BONDS."
"War Savings Bonds, by their express terms, are
payable on specified dates and are redeemable before such
dates, at the option of the owners, at fixed redemption
values, and there is no doubt that the promise of the
United States in such respect will be kept. I might add
that in all the one hundred and fifty-five years of the
Nation's existence, and despite the vicissitudes through
which the country has passed during that time, the United
States never has defaulted in the payment of its obligations when due. The Congress under the Constitution has
ample power to make provision for meeting obligations in
the future.
"The obligation of the United States to pay before
maturity, at the option of the owners, in accordance with
the terms of the bonds, is quite as binding as its obligation to pay at maturity. I do not understand how any
loyal person could question the promise of the United
States in such respect.
"Several correspondents have written the Department
in the same connection and the only possible basis, so far
as can be ascertained, is the reservation in the offering
circular that a reasonable notice in case of presentation
of bonds of Series E for redemption prior to maturity may
be required by regulation. No regulation in such respect
has been made, and if one is made in the future you may
be sure that it will only require reasonable notice. One
month's notice, in writing, is now required, of course,
for redemption of Series F and 0 bonds and this has been
the case from the time of their first issuance."
238
THE WHITE HOUSE
WASHINGTON
gameter
December 19, 1944
Dear Henry:
I am sending you this letter for investigation.
I can write facts if you think it wise.
Affectionately,
TRR
Box 3616
anne
Pinem
San Francisco, California
12 December 1941
Mrs Eleanor Roosevelt
The White House
Washington, D. C.
Dear Mrs. Roosevelt:
Would you please say a word in your column about ar Bonds?
Recently while at the same table in one of San Francisco's nice
restaurants I heard discussion among some men War Workers to the
effect that they are reluctant to invest in Mar Bonds, because Bonds
are likely to be frozen by the Government after the Mar.
what
On attempting to learn om/source it originated or why they should
believe this to be the case, I did not definitely learn. But, I did
learn that these men work hard all week, then lose their weekly earnings
on Horse Betting at Bookie Shops. It could be possible these people
engaged in the Bookie business spread such propaganda, or that it's
origination might be from newspapers who are not backers of the Government.
This, it seems to me is not good propaganda at such a critical time, and
as San Francisco is crowded with Nar Workers it might assert a telling
influence on others in their investment of War Bonds. Yet, I believe these
men themselves making such an assertion are innocent of any deliberate
intention of blocking the Mar Effort. They seem to be conscientious and hard
workers, but as I stated, what good did their working and earnings do them to
throw it away in gambling on Horses with the Bookies, where they could soundly
make an investment in War Bonds and have something to show for their work, or
to rely upon in time of need. Unfortunate to say, many of the Army service men
on the West Coast are also parting with their earnings on Horse Betting.
There has been some semblance of an effort to rid San Francisco of the
Bookies in the past. This has not been accomplished, and it seems they
continue to flourish. These War working men seem to be good men at heart
who have been wrongly guided regarding Mar Bonds. Then to, one or two of them
it seems had invested in Bonds, and still, after two years and the Bonds were
fully paid up they have not received them, I understand. So, they become discouraged, no doubt, and felt there as no need of investing in something they
would not receive anyway.
In the past I had received my Bonds promptly, usually two weeks or 30 days
from the date they were paid.
With all Good Wishes to the President and yourself.
Frances L Richmond
Mrs. Frances L. Richmond.
240
BOSTON SYMPHONY ORCHESTRA
SERGE KOUSSEVITZKY. CONDUCTOR
a E. JUDD. MANAGER
C.W. SPALDING ASSISTANT MANAGER
SYMPHONY HALL. BOSTON 15. MASSACHUSETTS
December 30, 1944
Dear Mr. Morgenthau:
This is just a line to thank you for your kind letter
(Book Boy, p.110)
of December 20,/and to say that it was a great pleasure for
the Boston Symphony Orchestra and for me to participate in
the Massachusetts Sixth War loan Drive.
Indeed, the result of the concert is most gratifying
to all of us and we are happy to have thus contributed to
the success of the Drive.
With kind regards and every good wish for 1945,
Single Sincerely yours
Mr. H. Morgenthau, Jr.
The Secretary of the Treasury
Washington, D.C.
241
REPUBLIC 8300
AMERICAN RED CROSS
DISTRICT OF COLUMBIA CHAPTER
1730 E STREET. N. W.
WASHINGTON 6. D. c.
December 30, 1944.
The Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Treasury Building,
Washington, D. C.
Dear Mr. Secretary:
Your inspiring leadership in the recent drive
for more blood donors has played no small part in the remarkable
increase in appointments at the Blood Donor Center.
help.
We want you to know that we deeply appreciate your
With sincerest thanks
TotathDavisson
Robert H. Davidson, Chairman
American Red Cross
Department of Public Relations
242
DEC 30 1944
Memorandum to the President:
Enclosed herewith is a letter from Nigel D.
Campbell, to whom you recently gave an interim
appointment as Collector of Internal Revenue at
Chicago, succeeding Carter Harrison.
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Enclosure
HEG/mah
243
DEC 30 1944
Dear Mr. Campbell:
I thank you for your letter of December 26.
In view of your excellent record as Assistant
Collector it was a pleasure to me to recommend to
the President your appointment as Collector.
I have the greatest confidence that you will
continue to give the same able and conscientious
service to the Government in your new office.
The letter to the President which you enclosed
has been sent to him.
Sincerely,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Mr. Nigel D. Campbell
Collector of Internal Revenue
Chicago 4, Illinois
HEG/mah
TREASURY DEPARTMENT
INTERNAL REVENUE SERVICE
OFFICE OF THE COLLECTOR
FIRST DISTRICT OF ILLINOIS
CHICAGO, ILL. 4
IN REPLYING REFER TO
December 26, 1944
Honorable Henry Morgenthau, Jr.
Secretary of the Treasury
Washington, D. C.
Dear Mr. Secretary:
I have just received word from your office of my appointment as
Collector of Internal Revenue to succeed the Honorable Carter H. Harrison.
I want to thank you for your concurrence in this appointment. I
also want to assure you that I will do everything within my power to
conduct the office on such a basis that it will be a credit to the Treasury
Department.
I am enclosing a letter addressed to the President which I would
appreciate your passing on to him.
VICTORY
Respectfully,
BUY
BONDS
AND
STAMPS
Enclosure
Noza Nigel D. Campbell. of an
OFFICE
245
OF
TREASURY DEPARTMENT
WASHINGTON
THE
SECRETARY
DEC 3 0 1944
To:
Secretary Morgenthau
From:
J. W. Pehle
The following is a summary of significant developments in the Surplus Property and Procurement offices for
the week ending December 23, 1944:
Surplus Property:
In the past, all out-dated photographic film declared
surplus by the armea iorces has been sold to Eastman Kodak
and Ansco for salvage, pursuant to contracts which terminate
on December 31. To date several carloads of film have been
disposed of on this basis. In considering whether to renew
these contracts, it was ascertained that, although this
film is deemed inadequate for military use, much of it is
considered suitable for civilian use. It was also ascertained that there is a great civilian demand for photographic
film. Consequently, we are now trying to develop a program
whereby surplus film will be tested and such of it as may be
found suitable for civilian use will be made available to the
public through regular trade channels, the remainder only to
be sold for salvage.
There had been declared surplus some 29,000,000
Carlisle surgical dressings for which we had only received
a bid of $52,000. There was some delay in the acceptance
of the bid, and the bidder raised his bid to $101,000. In
view of the discrepancy in the bids, it has been decided to
offer this merchandise through the Surplus Reporter. These
dressings are unsuited for surgical use, but can be used for
making paper, roofing or insulation material, or for furniture stuffing or wiping rags.
246
-2Up to the present, we have carried our surplus property
inventory on an "appraised value" basis. Because of the
difficulties inherent in any general appraisal system, this
procedure has not proved satisfactory. Consequently, beginning
December 29, we will carry our inventory on a "reported cost"
basis, which will result in property being inventoried on
our books at the same figures at which they were carried on
the books of the owning agency. This will conform Treasury
practice to the practice of other disposal agencies.
We are cooperating with other Treasury Agencies as
well as other Government Departments, in experiments to
determine whether it would be worthwhile to attempt to re-
cover the free silver contained in certain "fixing" fluids
used in governmental photographic laboratories.
With the issuance of the Surplus Reporter, the sale of
all items listed was postponed until the dates of sale
announced in the Reporter. Due to this, December sales will
lag since none of the items listed will be on sale until
January 4. TO date, the Surplus Reporter has received
favorable comment, and promises to be a satisfactory method
of making routine offerings.
Arrangements have been completed with the armed services
to permit Treasury inspectors to examine certain war materials
intended to be declared as surplus. If such property is
found to have no resale value, it will be scrapped by the
owning agency instead of being declared surplus. This will
avoid the dumping of unsalable items on the Treasury.
As a basis for formulating recommendations to the
Surplus Property Board in connection with the exercise of
its rule-making power under the Surplus Property Act, a
survey is being made of the problems met and the experience
gained by the Department in the disposal of surplus property.
247
-3The interdependent responsibilities of the Treasury
and the War Food Administration under the Surplus Property
Act were the subject of exploration and discussion by representatives of both agencies.
Procurement:
Lend Lease purchases for the week totalled $30,400,000
(schedule attached), and regular purchases amounted to
$656,430.10. Included among these purchases were 28,000
pilot baloons to be used in French West Africa by the armed
forces for meteorlogical purposes; 6,000,000 pounds of map
paper for use by the British in the Pacific and Far Eastern
military areas; and $357,267 worth of electronic vibrators
to be shipped to Great Britain.
cars.
Lend Lease carloadings for the week totalled 4,403
Arrangements are under way to release 45,000 tons of
chrome to the Metals Reserve Corporation.
Plans are being made for the purchase of 208,000
pounds of nylon flake for the British and 34,155 yards of
silk grit gauze for the French under Lend Lease.
A transportation rate survey has been completed for
the Sub-Committee on Surplus War Property Disposal of the
Senate Small Business Committee. The survey deals with
the cost of transporting magnesium ingots, pigs, rods, sheets,
shapes and castings between various sections of the country.
Six classifications of industrial items, formerly ac-
quired by the British through Foreign Economic Administration,
will now be handled on a cash basis. The contracts pertaining
to the items listed on these six classifications will be completed, with the British reimbursing us for all such material
loaded on boats after January 1.
248
-4Administration:
In order to evaluate the equity of present proration
of administrative expenses to the various appropriations,
study has been made of the operations of the Purchase Division,
Office of Procurement, to determine the actual percentage
of time given by its 418 employees to Lend Lease purchases,
warehouse stock purchases, purchases for direct delivery,
and all other purchases.
Classification surveys are in process and it is hoped
that these surveys will tend to alleviate the personnel
shortage, which is one of our major administrative problems.
Field recruiting might become necessary, particularly for
the lower grade positions.
ground
LEND-LEASE
TREASURY DEPARTMENT, PROCUREMENT DIVISION
STATEMENT OF ALLOCATIONS, OBLIGATIONS (PURCHASES) AND
DELIVERIES TO FOREIGN GOVERNMENTS AT U. S. PORTS
AS OF DECEMBER 23, 1944
(In Millions of Dollars)
Allocations
Requisitions
in Purchase
Requisitions not
Administrative
Miscellaneous &
Total
U. K.
Russia
China
Expenses
$5851.4
$2628.0
$2457.3
$133.9
$17.2
(5851.4)
(2628.0)
$615.0
(2457.3)
(133.9)
(17.2)
(615.0)
$ 170.1
$ 28.5
$ 39.0
$ 2.2
( 188.1)
$ 127.5
Cleared by W.P.B.
( 95.4)
Obligations
$4435.5
( 29.4)
$ 21.6
( 22.7)
( 51.8)
$ 56.3
( 51.4)
-
( 3.0)
-
$ 32.5
-
( .5)
-
Undistributed
$100.4
(103.9)
$ 17.1
( 20.8)
(Purchases)
(4405.1)
$2055.0
(2050.7)
Deliveries to Foreign
$2742.1
$1558.4
$1102.8
$ 25.7
-
(2722.7)
(1549.7)
(1092.9)
( 25.4)
$ 55.2
-
( 54.7)
Governments at U. S.
Ports#
$ 68.4
$1921.1
(1899.3)
( 68.4)
$15.6
$375.4
(15.6)
(371.1)
Deliveries to foreign governments at U. S. Ports do not include the tonnage that is
either in storage, "in-transit" storage, or in the port area for which actual receipts
have not been received from the foreign governments.
Note: Figures in parentheses are those shown on report of December 16, 1944.
o
STATEMENT ON THE BRETTON WOODS PROGRAM
The maintenance of peace and prosperity will be
much easier in a world in which countries can buy or
sell, through mutually profitable trade, the raw materials
and the finished goods the world produces and needs. We
in the United States can get considerable help toward our
goal of sixty million productive jobs 1f international
trade can be expanded above the low levels of the 1930's.
I am confident that this can be done 1f we avoid the exchange disorders and discriminatory practices that characterized the decade of the 1930's, and which will reappear in more acute form after the war unless positive
measures are taken to prevent it. The only way to avoid
a recurrence of this type of economic aggression is through
international cooperation in dealing with international
monetary problems.
We must also take positive steps to see that other
countries participate in and contribute to a larger volume
of international trade. Much of Europe and the Far East
have suffered great damage from enemy action. Other areas
of the world still have an economy that is undeveloped.
While each country can and will do much for its own reconstruction and development, the process can be facilitated
if foreign capital for productive investment is available
on reasonable terms. The United States, as the largest
exporting and importing country in the world, will derive
great benefit from the restoration and the development of
the producing and consuming power of other countries. Our
own trade has always been particularly large with those
countries that have high levels of production and consumption.
The Government has been conscious of the need to be
prepared to deal with international monetary and financial
problems after the war. For more than three years the
Treasury and other departments of this Government have
been considering means to assure stable and orderly ourrency arrangements and adequate international investment
251
2-
after the war. Tentative proposals prepared by the
technical staff of the Treasury, in consultation with
other Departments, were sent to the Finance Ministers
of the United Nations in 1943. After extended informal
discussion among the technical representatives of more
than thirty countries, it became clear that there was a
large measure of agreement on the best means of dealing
with international currency and investment problems.
For this reason, I invited the United Nations to assemble
at Bretton Woods, New Hampshire, for an International
Monetary and Financial Conference.
This Conference prepared articles of agreement for the
International Monetary Fund and the International Bank for
Reconstruction and Development. I think it is a hopeful
sign that the forty-four United Nations all agree that
international monetary and financial problems are an in-
ternational responsibility that can be dealt with only
through international cooperation. In every country there
18 a feeling of confidence that this time we are preparing
through the Fund and the Bank a sound economic foundation
for international peace and for prosperity in all countries. The articles of agreement for the Fund and Bank
will be submitted to the Congress for its consideration and
I urge your favorable action.
EMB:1r 12/30/44
252
DEC 30 1944
Dear Dr. Ha Shihs
I read with great interest your letter of
December 19, 1944, enclosing a copy of letter of
same date to Secretary Stimson.
I need not say that I have always favored
that as much aid as possible should be given to
the Chinese people in their fight for freedom and
independence. I also need not say that this is
the established policy of the V. S. Government.
I have shared with you fears and mingivings
about the current military at tuation in China.
Therefore, I am sure that you will agree with me
when I express the hope that the situation may
improve in such way as to make possible increased
military aid to China and that stops will be
taken within China to make possible the maximum
utilisation of the aid which is given.
with best wishes for the New Year.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Secretary of the Treasury.
Dr. Hu Shih,
Boylaten Hall,
Harvard University,
Cambridge, Massachusette.
ISF/efs 12/26/44
Whit Preferre
(
HARVARD UNIVERSITY
HARVARD-YENCHING INSTITUTE
BOYLSTON HALL
CAMBRIDGE. MASSACHUSETTS
OF FAR EASTERN LANGUAGES
December 19,1944
Honorable Henry Morgenthau,jr.
Secretary of the Treasury,
Washington, D.C.
My dear Mr.Secretary:
I am taking the liberty of sending to you a copy of a letter which I
wrote today to Secretary Henry L.Stimson.
As I was wrting this letter, my thoughts went back to one evening in
April,1941, when you and Mr.Stimson did me the great honor of coming to my
small dinner party in honor of Dr.Quo Tai-chi, then newly appointed Chinese
Minister of Foreign Affairs. On that evening after dinner, I heard Mr.
Stimson say to Dr.Quoi "The Ambassador was right. There are in this room
two real friends of China - Mr. Morgenthau and myself."
That, my dear Mr.Secretary, is my full justification in thus imposing
on the very busy time of .Stimson and your good self. China is still in
very grave danger. But I have great faith that you and Mr. Stimson can still
do much to save and help her and to prevent the Allied strategy from doing
what our enemy has always wished to see done namely, not to aid, equip and
prepare China for active and effective participation in the concerted offensives against Japan.
It was a great pleasure to me to have a glimpso of you at Breton Woods
and again at the Union Station in Washington. Kindly accept my warm greetings of the Season to Mrs.Morgenthau and yourself.
Very sincerely yours,
H Shin
Hu Shih
Enclosure:
Copy of a letter to Secretary Stimson.
Boylston Hall
Harvard University
Cambridge, Massachusetts
December 18, 1944
Honorable Henry L. Stimson
Secretary of War
Department of War
Washington, D.C.
Dear Mr. Secretary:
The gravity of the military situation in China in recent months
has compelled - to write this personal letter in which I beg to submit
to you an interpretation of the China Problem and a plea for urgent
American aid. I am taking the liberty to impose on your valuable time
because you have always been one of the truest friends of China and have
always come to her aid in her days of distress. I can assure you that
what I have to any is entirely from a non-partisan standpoint and out
of my own convictions.
The problem of China in the War has remained unsolved all those
BOVER years and a half. The problem has always been that of a country
ill-prepared and ill-equipped for war, but forced to take up the fight
against a first-class military and industrial power. China has fought
all these years, not with modern science, nor with modern mechanical
power, but with the elemental and primary factors of space, numbers,
a senso of historical unity, and an almost foolhardy faith in the final
-
triumph of her just cause. From the beginning, China has fought a
defensive wari after seven years and a half, much weakoned by long
suffering and under-nourishment, her armies are still fighting a defensive war.
Strategically, the solution of the China problem should have been
an early and speedy transformation of all these primary but F imitive
factors into effective forces to be used for the great land offensive
on the Asiatic mainland against Japan. Such a transformationPequired
a long-range plan of large-scale material aid to China and of extensive
training of Chinese troops in the use of the modern weapons.
Our enemy saw clearly from the beginning the grave potential
dangers of China being effectively aided and equipped. So, after Pearl
Harbor, the whole Japanese strategy on the Asiatic mainland was directed
Page 2
Honorable Henry L. Stimson
December 18, 1944
toward preventing China from receiving large-scale aid from her allies.
The early sweeping invasion into Burma and even into India was solely
motivated by this fundamental dosiro to cut all possible routes of outside
military and material aid to China, and thereby to enforce an iron-ring of
complete blockade against free China.
The successful execution of the enomy's strategy to guard the
Asiatic mainland against outside aid should have inspired our Allies to
greater efforts to "run the blockade", to equip and train the Chinese Army.
Unfortunately, there have been several factors which have tended to
lesson, instead of enhancing, the Allied effort to send in material and
military aid to China. First, the slogan "Finish Hitler First" has probably
furnished the chief stratogical ground for noglecting China's noeds. Second,
the actual difficulties of transportation, chiefly due to enemy occupation
of Burma, and partly due to non-willingnoss of Soviet Russia to permit
allied materials to reach China by way of Russia, naturally set a limit
to the amount of materials going into China. Thirdly, there was a rather
unjustified faith that China, which had stood alone in the fight for nearly
five years before Pearl Harbor, might be able to take care of herself as
best as she could while her Allies were fighting a hard war on other and
more urgent fronts. Fourthly, there was the purely Communist-inspired
bogy that "much of the equipment and munitions which did get into Chinese
control was not used to fight the Japanese, but was moved to the northwest
provinces for use in the blockade of the so-called Comunist regions".
(Quotation from Harper's Magazine, December 1944 - from an article by John
Fischer, one-time with the American F.E.A. in India). This last, though
untrue, has been openly talked about even by Americans of some official
standing and background (such as the F.E.A. man quoted above) and accepted
by many people as sufficient ground to justify no aid to China! And fifthly,
self-complacency and lack of proper understanding of the international
situation on the part of some Chinese government officials have undoubtedly
led to delay, friction, and possibly disappointment in the execution of lendlease and probably also in carrying out the training program which the
Magruder Mission was to have inaugurated noarly three years ago.
The not result of these and other factors has co mo to this the
problem of China in the War has remained unimproved, unaltered, and unsolved
three years after Pearl Harbor. China remains as unarmed as she was before
Pearl Harbor. She is openly accused of unwillingness to "undertake major
offensives" against Japan (see Harper's Magazine, December, 1944, p.94, and
many other similar writings in the current American press) when she is not
even adequately equipped for A successful defensive war. She is openly
accused of hoarding lend-lease war materials for future civil wars when she
has in reality next to nothing with which to fight for her own existence.
Page 3
Honorable Henry L. Stimson
December 18, 1944
In short, the situation of China is now exactly what the strategy of
our enemy has from the very beginning wished it to bes namely, n Chinose
army poorly armed and untrained for modern warfare and therefore incapable
of becoming an effective power for future land offensives against Japan!
So much for my own interpretation of the China problem in the war.
This situation, my dear Mr. Secretary, must not be permitted to con-
tinue any longer to the gravo peril of China herself and of the joint allied
cause.
There seems to be an urgent need for a new study of the China situa-
tion purely from the military and non-political standpoint. The central
problem should be how to defeat the enemy strategy of checkmating China and
the Chinese army by cutting off all possible military and material aid. No
personal, political, and non-military questions should be allowed to becloud
and overshadow a realistic consideration of this central problem.
When the China problem is viewed in this light, it will resolve itself
into two related phases: the immediate phase of rushing every possible aid
to help China fight the enemy successfully in the new offensive in the Southwest; and the broader and more basic phase of long-range equipping and
training of Chinese officers and troops for effective participation in the
joint Allied land, son, and air offensives of the not-too-distant future.
There is an ancient Chinese proverb which sayes "For the cure of a
seven-year disease, there is enough time to seek the needed mugwort which
requires three years to prepare". There is still time, my dear Mr. Secretary,
to transform the Chinese forces into an effective arm of our joint war effort.
My plea to you, and through you to the President is, therefore, that
the U.S. government and Army and Navy must not despair of the Chinose Government and the Chinese Army. The military successes of Chinese troops in the
Northern Burma campaign furnish the best proofs of what the Chinoso soldier
can do when he is properly fed, properly armed and properly led. But, in
order that a relatively long-range program of aid and training may be worked
out successfully, immediate and effective support should be given to the
National Government in its present difficulties in the Southwest. To
strengthon the National Government militarily is the most effective way to
help China solvo many of her political problems today.
D
Page 4
Honorable Henry L. Stimson
December 18, 1944
The recent developments in the liberated countries in Surope may
serve to drive home to our American friends the lesson that it is of utmost
importance to the Allied cause to have a stable and strong native government
which can play a leading role in the work of liberation of enemy-occupied
territory. I believe that as the European situation gradually unfolds
itself, sane political observers will begin to realise more and more the
important historic role which the National Government of China, in spite
of its many shortcomings, has played in all these troubled years. It
deserves the sympathetic understanding and support of American statesmanship.
I humbly crave your forgiveness for thus intruding on your time.
with kindest personal greetings,
Very sincerely yours,
Hu Shih
P.S. I am sending a copy of this letter to Secretary Henry Morgenthau,
Jr., of the Treasury.
258
December 30, 1944
My dear Mr. Stettinius:
I have received a cable containing New Year's greet-
ings from Dr. T. V. Soong, and I would appreciate it if you
would send the following cable to Dr. Soong for me:
"I appreciate very much your New Year's Greet-
ing. I am confident that during the coming
year you will use your increased influence
and responsibilities to help bring about the
democratic unity of the Chinese people in
their war for freedom and independence
and to help achieve even closer and warmer
relations between the peoples and govern-
ments of our two countries. By such measures
you will be making a great contribution to
the achievement of the victory and peace we
so eagerly desire.
"Mrs. Morgenthau joins me in sending you
our best wishes for the New Year."
With best wishes for the New Year.
Sincerely yours,
(Signed) H. Morgenthau, Jr.
Honorable Edward R. Stettinius, Jr.,
Secretary of State,
Washington, D.C.
2871 WOODLAND DRIVE
WASHINGTON.D.C.
Dec. 29, 1944
My dear Mr. Secretary:
We received a cable from Dr. Soong in
Chungking, asking us to convey the following
message to you:
WISHING YOU A MOST HAPPY NEW YEAR.
MAY IT BRING A GLORIOUS VICTORY AND
A LASTING PEACE. WARMEST REGARDS.
ke a
Yours sincerely,
H. C. Chun
Secretary to DR. T. V. SOONG
The Honorable
Hepry Morgenthau, Jr.
Secretary of the Treasury
260
DEC 30 1944
Dear Bernie,
I, too, would enjoy the opportunity
to sit down with you and discuss some of these
problems at length.
Let me know when you plan to be in
Washington again and I will set aside enough
time for a full discussion.
Sincerely,
(Signed) Henry
Mr. Bernard M. Baruch,
597 Madison Avenue,
New York, New York.
P.S. Happy new year !
HDV
as
AFLiee 12/28/44
TO:
(3) The Secretary
Mr. D. W. Bell
261
Mr. O'Connell
Mr. Gaston
Mr. Sullivan
Mr. Charles Bell
Miss Alger
Mr. Aarons
(1) Mr E. M. Bernatain
Miss Chatfield
Document Room
Mr. I. Friedman
Mr. A. U. Fox
Mr. Glasser
Mr. Heffelfinger
Mrs. Kern
Mr. Klaus
Law Library
Mr. Lynch
Mr. Alk
Mr. Arnold
Mr. Brenner
Mr. Bronz
Mrs. DeLacy
Mr. DuBois
Mr. J.B. Friedman
Mr. Lesser
Mr. Minskoff
Mr. Moskovitz
Mr. Oliphant
Mr. Pehle
Mrs. Ross
Mr. Schmidt
Mr. Shaeffer
Mr. Stewart
Mr. Taylor
Mr. Tietjens
Mr. Wenchel
(2) Mr. White
think we have
Banuch on udufensive
m u isolationists
Ash
12/28/44
FROM: MR. LUXFORD - Room 270
262
BERNARD M. BARUCH
597 MADISON AVENUE
NEW YORK 22. N.Y.
December 26, 1944.
Dear Henry:
I was glad to receive your letter of
December 23rd and to note the generous manner in
which you met my criticisms. In that way we will
surely get results.
You are quite right that these arguments
would play into the hands of the isolationists, but
be ready to meet them, and not let others think we
have overlooked certain things or been fools. I
sure you will agree with that.
we must discuss these arguments beforehand and thus
em
Perhaps some of the recent events in
Greece and Italy might have been avoided. Whether
so or not, we must meet that situation. Here it is
well to remember that the Germans when they retreated
from occupied territory not alone scorched the
country physically and economically, but spiritually
and politically, leaving the population like a
wounded animal beating and destroying itself.
After twenty-five years of waiting
for international cooperation, I shall do nothing
to stop it and we must avoid the pitfalls that the
isolationists and those who will destroy international
cooperation will use. This, as I said many times,
is my second round trip and the same problems are
being raised and the same arguments.
It would give me great pleasure if
I could sit down with you and spend enough time for
us to exhaust some of the avenues into which our
thoughts and actions must move in order that these
problems should be better solved.
As always,
Sincerely yours,
Hon. Henry Morgenthau,
Bruil
Secretary of the Treasury, what we are non discussing is only
-
hant ofa whole was and peace.
Washington, am
D.C.and
Jasune
it was
all said
and some
under
before
B.M.B
263
DEC 23 1944
Dear Bernie,
I cannot argue with you about the fact that the
modernisation of her industrial plant must be an
important part of any program for the solution of
Britain's postwar problems. Nor can I disagree with
you on the proposition that help from us to Britain
cannot succeed in solving her economic problems unless
she also proceeds with corrective measures of her own.
The most conscientious elements in British public life
are now as cognizant of these facts as we.
The recent agreement on phase two of the Lend-Lease
program has no other purpose than to bring all of Britain's
resources to bear on the earliest possible defeat of the
enemy. By mobilising the full strength of our Allies in
the struggle against the enemy, we can shorten the war and
in this way diminish the ultimate burden on our own economy.
Defeating the enemy has been the sole purpose of the LendLease program from the beginning and that is all that
phase two of the Lend-Lease program is intended to do
while the war with Japan continues. As the President has
said, the Lend-Lease program is designed for the war and
will end with the war.
Britain has not as yet asked for direct financial
aid in the postwar period. Her immediate postwar problem
will be to expand British exports sufficiently to enable
her to buy the food and other materials required for her
people and her industries. With the deterioration in
Britain's international economic position that has already
taken place, it is estimated that after the war Britain
will have to increase her pre-war exports by 50 percent
in order to pay for her pre-war level of imports. Britain
can do this only in a world in which international trade
264
2-
and investment are maintained at a high level and in which
countries cooperate to maintain stable and orderly exchange
arrangements. The Bretton Woods program would provide a
favorable environment in which Britain could balance its
international payments.
Whether Britain will in fact restore balance in her
international accounts, without a large measure of direct
government control of the balance of payments, depends upon
her success in raising the level of efficiency in her export
industries. Whether she will also need direct financial
assistance during the transition period remains to be seen.
We have a definite interest in the way Britain deals with
her problem since the measures she adopts are very likely to
affect the long-range interests of the United States.
What worries me most about your comments, however, is
not that you feel as you do, but that these arguments play
right into the hands of the isolationists who are only too
eager to capitalize on issues of this character to further
their own objectives. Recent events in Greece and Italy are
already being exploited and it is not difficult to anticipate
a recurrence of a wave of cynicism that will destroy the
hopes for international cooperation until we are in the
throes of another war.
It is going to tax our capacity for self-restraint if
we are going to give international cooperation a trial let alone make a success of it.
Sincerely,
(Signed) Henry
Mr. Bernard M. Baruch,
597 Madison Avenue,
New York, New York.
EMB:AFL:nrd - 12/22/44
265
TREASURY DEPARTMENT
BUY
WAR
WASHINGTON 25
Dear Bernie,
I cannot argue with you about the fact that Britain's postwar problems
cannot be solved unless Britain modernizes her industrial plant. Nor can I
disagree with you on the proposition that help from us to Britain cannot
succeed in solving her economic problems unless she also proceeds with corrective measures of her own. The most conscientious elements in British
public life are now as cognizant of these facts as we.
Defenty u enemy
The recent agreement on phase two of the Lend-Lease program has no other
purpose than to bring all of Britain's resources to bear to help bring about
on the earliest possible defeat of the enemy. By mobilizing the full strength
of our Allies in the struggle against the enemy, we can shorten the war and
in this way diminish the ultimate burden on our own economy. Than has been
the sole purpose of the Lend-Lease program from the beginning and that is all
that phase two of the Lend-Lease program is intended to do while the war with
Japan continues. As the President has said, the Lend-Lease program is designed for the war and will end with the war.
The continuation of lend-lease during the second phase of the war will
permit Britain to continue to bear her share of the war effort without too
seriously depleting her foreign assets. This effect on Britain's postwar
position is purely incidental and arises from the fact that with lend-lease
Britain will not find it necessary to exhaust her gold and dollar resources in
purchasing military supplies in this hemisphere.
mercan
Britain has not as yet asked for direct financial aid in the postwar period.
Her immediate post-war problem will be to expand British exports sufficiently
to enable her to buy the food and other materials required for her people and
her industries. With the deterioration in Britain's international economic
position that has already taken place, it is estimated that Britain will have
to find markete for 50 percent more experts after the was in order to pay for
her the
prewar level of NOT imports. Britain can do this only in a world in
which international trade and investment are maintained at a high level and
in which countries cooperate to maintain stable and orderly exchange arrangements.
The Bretton Woods program would provide a favorable environment in which
Britain could balance its international payments. Whether Britain will in
fact restore balance in her international accounts, without a large measure
of direct government control of the balance of payments, depends upon her
success in raising the level of efficiency in her export industries. Whether
paper will also need drink financial assistance during te transition
period remain t G seen.
pass
the
we
with
a
with have a digint interest in But deal higher problem
since The memories she adopt are my Rhen
interest of u.s.
266
-2What worries me most about your comments, however, is not that you
feel as you do, but that these arguments play right into the hands of the
isolationists who are only too eager to capitalize on issues of this character to further their own objectives. Recent events in Greece and Italy
are already being exploited and it is not difficult to anticipate a recurrence of a wave of cynicism that will destroy the hopes for international
cooperation until we are in the throes of another war.
It is going to tax our capacity for self-restraint if we are going to
give international cooperation a trial - let alone make a success of it.
Sincerely,
BERNARD M. BARUCH
597 MADISON AVENUE
NEW YORK 22.N.Y.
December 13, 1944.
My dear Henry:
Somehow or other we do not
seem to catch up with each other.
The enclosed editorial has
brought to my mind again the conversation
I had with Charwell and which I wanted to
complete with you.
The English people have
not commenced to touch their ability to
produce either in quantity or at a price.
They have been crying poor mouth so long
it reminds me of a number of my southern
friends who do the same thing but do not
try to help themselves.
Why should we help England
to help themselves?
or anybody else until they have learned
Sincerely yours,
Bernie
Hon. Henry Morgenthau,
Secretary of the Treasury,
Washington, D. C.
268
The Facts of Life
The British mission headed by Sir Frank
Platt, which visited this country earlier in
the-year to study the operations-of-th cotton textile industry, found that the industry of the United States was "very far ahead
of the Lancashire industry in production
per man-hour." Its report showed, for example, that in spinning British output per
man-hour was 18 to 49 per cent less than
American; in weaving, 56 to 67 per cent.
To us the really amazing thing about this
report is not the facts revealed, but the surprise with which they have been received
in Britain. For example, the London "Economist," which, one might assume, would be
familiar with the lag in British efficiency in
this industry as compared with its American counterpart, asks, in pained surprise:
"The report shows that the great advance
in efficiency of the American industry came
some twenty-five to thirty years ago. How is
it that we are only finding out about it nowand even now, not through the initiative of
industry, but as a by-product of war-time
pressure?"
The failure of British industry to keep
abreast of that of the United States in modernization and efficiency has long been a
matter of common knowledge here, if it has
not been in liberal British circles. It was
stressed by American economists at the
time of the British depression of the '20s,
in connection with the publication of
the report of the Economic Committee appointed by Parliament to investigate the
causes of Britain's budgetary difficulties at
the turn of the 30s, and again in the
debates overthe MacMillan report of 1931
and the report of the Gold Delegation of
the League of Nations, in 1932. Indeed, it
was one of the great sources of controversy
in the whole gold standard question during
the period between World War I and World
War II. Publications such as the "Economist"
were inclined to lean to the Keynsian view
that Britain's troubles were mainly mone-
tary and derived from the high post-war
rate set for the pound. To this the London
"Bankers Magazine" replied that it was not
a question of returning to the old parity for
sterling, but "failing to conduct a policy in
harmony with our resumption of gold responsibilities." And the London "Statist" expressed the opinion that, instead of the gold
standard, Britain's difficulties were to be
such
found in "the forces of inertia
rigidity
a. trade union regulations
of wages and rigidity of minds.'
The economists of the National City Bank
of New York, in the monthly "Letter" of that
institution, commenting on Britain's diffcuttes in this period, noted that the problem stemmed mainly from (1) the postawar
self-sufficiency of countries which formerly
constituted important outlets for British
products, and (2) the relatively high cost of
British goods, "due partly to failure to modernize industrial equipment and methods
and partly to comparatively high labor
costs." The City Bank "Letter" presented figures from the International Cotton Federation as far back as October, 1931, which told
precisely the same story now told in the
report of the Platt Mission, which seems
to have created such a stir in Britain.
the number of
at the time was
134,000 looms showed in for then Britain that 679,000 ordinary to It
the United States, while there
were also 565,000 automatic looms here.
against 14,000 in Britain. This same study
showed that in the best mills in this country
weavers with unskilled assistants frequently
or more looms, while
the in Lan- tend
cashire tended majority
sixty "the of
weavers
only four ordinary looms."
Perhaps what is needed in Britain are
economists who are less concerned with the
building of a new and better world and
more interested in getting at the real facts
of
what is wrong with the one they are
living in.
269
The New York Times.
DEC 12 1944
In The Nation
The Clouds Gather Over
Dumbarton Oaks
By ARTHUR KROCK
WASHINGTON, Dec. 11-Until the
Japanese brought the United States
into formal war by their attack on
Pearl Harbor there were non-interventionists in this country whose position
never was that which came to be conveyed by the term "isolationist." They
were neither as stubbornly blind nor
brutally indifferent to the menace of
German, Japanese and Italian aggres-
sion as others with whom they were
lumped under the same term. Gen.
Robert E. Wood, despite the unsavory
allies attracted to his America First,
was of this group, which favored earlier and much greater rearmament
programs than the Administration's
and official reproofs of other nations
geared strictly to our power to sustain
them forcibly.
These non-interventionists are sure to
come forward again, and regain as
nuch if not more of the public sup-
port they once had, if there is not
prompt improvement in the dealings
and policies of the United Nations, and
tangible proof that these are not in
the state which many judge them to be.
Those who believe this non-interventionist group to have been thoroughly
and dangerously wrong in its attitude
might come to the conclusion expressed
above if they could talk, as this corre-
spondent has done, with members of
Congress.
Before Cordell Hull resigned his
office as Secretary of State he, by
means of the Declaration of Mosoow
for which he was chiefly responsible,
and the Dumbarton Oaks plan of
which also he was chief architect, had
persuaded a large majority of Congress
that these were true charts of the international future. But recent events,
following Mr. Hull's retirement, have
renewed serious doubts that the world,
particularly Europe, is following the
charts or that the United States can
lead the other great nations back to
them after victory over Germany and
Japan. Among the events are the
State Department's démarche against
the British Government with reference
to its Italian policy and the execution
if a mutual defense treaty between
Soviet-Russfa and the regime General de Gaulle in France.
The State Department asserted our
position against outside interference in
the politics-of conquered or liberated
countries at a time and in such a way
as to have particular impact on Great
Britain, The text could cover Russia's
similar interference in Rumania, Bulgaria, Yugoslavia and Poland and its
undisguised intentions with respect to
the Baltic States, but the United States
did not coevally agitate these perfor-
mances, as it did Britain's in Italy.
Congress, however, has them on its
mind, and they are part of a spirit of
disillusionment there which can work
very great damage unless it is checked
by announcement of better understandings, and clearer statements as to what
the President has really been doing
with international relations and intends
to do.
Until the State Department rebuked
the British on Italy, and France signed
with Russia at Moscow an apparent
extension of the spheres of influence
policy which Dumbarton Oaks and the
Hull-Eden-Molotoff declaration were
designed to supervene, the anti-interventionists were not able to make much
headway on Capitol Hill with reminders
of their original warnings. But now
they are making some impression when
they recall the prophecies, despite the
fact that most of them had no alterna.
tive to offer except heavy rearmament
and Washington's "good offices."
The hour now seems to be past due,
to some observers of the mood of Congress, for the President, Prime Minister
Churchill and Marshal Stalin to meet
and seek to dispel the spirit of the
defeatist past which, at least in the
United States and Great Britain, appears to be slightly reviving. Though
this report of the apparent effect here
of recent events may be gloomy, and is
distasteful, that should only redouble
the efforts of those who supported Mr.
Hull until illness obliged him to give up
public office.
There are impressive answers to be
made, no doubt, to the rising whisper
power is
as
the
to
the social and economic ills,
being that world's European offered politics only answer again
and that balanced alliances -in which
the United States must necessarily be
an outsider-will follow this war as
they preceded it. But, now that Mr.
Hull is on the sidelines. only the Pres-
ident can make them with the force
and authority required to restore be.
lief where it is waning. And specifications rather than pious generalities
must be a part of them, in the opinion
of numerous observers.
An example of the generalities
which have harvested rumor-crops of
of
and of the
found in the bread
concept, economy secret deals, is to at be the Dumbarton expense Ohks our
statements with which the second
phase of Anglo-American lend-lease
was announced, This correspondent
was today informed that doubts of the
compact have been expressed to the
signatories of that announcement, and
to the President as well, by public men
in this country who have been the
foremost leaders for international cooperation and were strong supporters
of the League of Nations Among
these, it is understood, is B. M. Baruch,
not where
as
the that who he is represented could help wondering having asserted
United States will come out in the
compact, if the terms mean that we
are weakening ourselves while trying
to help the rest of the world. Courses
are being indicated, he is quoted
saying. which should be countered by
full explanations, or even the old Wilsonfies
will hear themselves "talking
like
isolationists."
as
270
December 5, 1944
My dear MP. Daruch:
This will acknowledge receipt
of your letter to Secretary Morgenthau,
dated December 2, which has arrived dur-
ing his absence from the city. ne will
return within a few days and you may be
sure I shall bring your letter to his
attention as soon as he is back.
Yours sincerely,
(Signed) H.S. Klotz
11. S. Klotz
Private Secretary
. bernard M. baruch,
597 Madison Avenue,
New York, New York.
271
Hengeton Car
December 2 2
Hon. Henry Morgenthau, Jr.,
Secretary of the Treasury,
Washington, D. C.
My dear Mr. Henry
I have been asked for an outline of my
attitude on certain developments having to do with
postwar commitments which, in my opinion, tend to
weaken the strength we shall be needing in the
construction of the peace terms.
I send you this for whatever value it may
possess as reflecting my sense of danger if certain
tendencies are not checked.
Sincerely yours
Bruil
272
MEMORANDUM
December 1, 1944.
Confidential
Today I see that certain agreements have been entered into
between us and England in which they get five billion and one-half
dollars of lend-lease a year with certain limitations. I also saw
certain statements purported to have been made by Dean Acheson before
the Congress. I, of course, do not know the details. Neither does
the ordinary public. All of this is going to make others, as it does
me, wonder how the United States is going to come out.
No one need think that by giving too much and weakening
ourselves that we can help the rest of the world. We can weaken
ourselves so much by giving away so many things before peace is here
that no one will pay any more attention to us when we talk of world
peace than they did at the Paris Conference. We must also measure the
cost, not only in dollars, but in the derangement of our economy which
the inflation is bringing.
You are aware how little attention was paid to the mistakes
that were made in the first World War in mobilisation and in price
fixing. You know how much that has cost us in lives and property by
neglect of the experience of the past. I see the mistakes made in the
last peace now being repeated. You will certainly drive "Wilsonites"
like myself into the position of looking like isolationists.
Winston Churchill said that he did not accept a portfolio to
liquidate the British Empire. I should like to see either a full
explanation of why all this is done and what exactly it is, or simple
Americans like myself will wonder if this action is of such a nature
as to tend to liquidate American standards of living.
Bernard M. Baruch
273
November 14, 1944.
Your statement that the English said they were
bankrupt and required $7,000,000,000 provoked the following
thoughts:
Germany in preparation for the first World War and
Germany and Japan together in preparation for the second World War
through sweated labor and subsidized exports, flooded the export
markets of the world everywhere, reducing prices and profits and
causing reduction in scales of wages and standards of living.
During that time they were enabled to keep up a
certain standard of living uncomplainingly, to obtain through
their enforced exports stockpiles of necessary materials and make
unhappy the populations of the rest of the world.
The removal of the sweated labor and subsidized
exports of these two countries will enable the rest of the world
to increase employment, profits and standards of living. The
cartelized system fathered by Germany will disappear.
274
DEC 30 1944
Dear Mr. MeClays
Receipt is acknowledged of your note of
December 22, forwarding a draft of a memorandum documents in
for the President and related memoranda, con-
earning the question of the trial and punishment of war criminals. Thank you very much for
Whites office
making these documents available to no.
We are studying these documents in the
Treasury and I am looking forward to discussing
this whole matter with you within the very near
future.
Sincerely,
Secretary of the Treasury
Mr. John J. MeCloy,
Assistant Secretary of War.
HDW:JED:jm
12/30/44
Envelope marked "confidential"
275
Mr. White
Mr. O'Connell
12/28/44
Mr. DuBois
Mr. Luxford
Secretary Morgenthau
Please read the attached material, and consult
with each other on this subject.
Note from McCloy of 12/22/44 attaching draft of memo for
the Pres. from Secys. of War and Navy on Trial and Punish-
ment of European War Criminals, and Col. Chanler Memos to
McCloy of Nov. 30 and Dec. 1., , 1944
276
DEC 30 1944
Dear Mr. McCley:
Thank you for your letter of December 21,
forwarding copies of certain reports on military
government operations in Germany. I found them
very interesting indeed and think they are an
excellent job of reporting.
I greatly appreciate the steps which you
have taken to see to it that future reports on
European civil affairs operations will be
forwarded to me regularly.
Sincerely,
(Signed) H. Morgenthau Jr.
Secretary of the Treasury.
Mr. John J. MeCley,
Assistant Secretary of War,
Washington, D. C.
HED:HDWels
12/30/44
Envelope marked "Confidential"
277
Dec. 28, 1944
Mr. White
Secretary Morgenthau
I think these reports on Germany are very good,
and if you agree with me, I want to tell McCloy so.
The only thing I want to question is in regard
to the "Carolus Magnus Mine" in the Ubach-Palenberg
area. I want full details on this mine - what kind
of mine is it and why are we rebuilding it? This
reference9th.
to mines is in the report for week ending
December
McCloy's letter of 12/21/44 attaching copies of reports
on Germany - from Oct. 14th thru Dec. 9th - received from
Supreme Hdgs., , Allied Expeditionary Forces .
all
the 27. 1444
278
Dear thes Keaty:
Please give
H. White Reports in Summary
with following memo from
me quote I think these White
whats very good and if your
a nees 9 want to tell mc cloy
so. The only thing I want
to question is in regard
the "Carolus magnus mine
d. the whach- Palenberg
area. I want full det ails
on this mine What kin d
of
a
mine
is
it
and
why
are we rebuilding it ? The
reference to unines is in
what of work ending Lbc 9th
unquote. Thank you. much
279EXECUTIVE OFFICE OF THE PRESIDENT
WAR REFUGEE BOARD
INTER-OFFICE COMMUNICATION
DATE
TO
FROM
DEC 3 0 1944
Secretary Morgenthau
J. W. Pehle
For your information.
In connection with our recent release to the public of the
two eye-witness accounts of the German extermination camps at
Auschwitz and Birkenau, you will be interested to know that no
one has seriously questioned their authenticity except a
Mr. Oswald F. Schuette of Washington, D. C., who wrote to Secretary Stimson on November 28th. Apparently skeptical of atrocity
stories as war propaganda, Mr. Schuette questioned the value of
the anonymous reports released by us and asked Secretary Stimson
as a lawyer to vouch for their truth. He specifically asked
Mr. Stimson if he had read the reports before they were accepted
as true by the Board, if he had examined them critically to see
that they bore evidence of truth and whether any investigation
was made of the narrators or circumstances which led to the
preparation of the accounts. This letter from Mr. Schuette to
Secretary Stimson was sent to us for preparation of an appropriate
reply which we immediately drafted and sent to McCloy. Our draft
contained the following paragraph:
"The decision that the report referred to in your
letter is authentic is based upon the opinion of trusted
and trained officials of the War Refugee Board, both
here and overseas, and upon the considered judgment of
experts in refugee and related matters in neutral countries. The report contains only material about which
there is no uncertainty either in the minds of the
narrators or among the many qualified people who examined them in person. The report was also checked
against other unpublished material on the same subject
and against the testimony of other eye-witnesses of
similar or related incidents.
McCloy later advised us that he thought our proposed reply was
"a very good job.' 11
I have now received a letter from McCloy transmitting a copy
of another letter which Mr. Schuette has written to Secretary
Stimson. Schuette still questions the veracity of the two reports
280
-2-
and calls upon Stimson to read them carefully and, as a lawyer and
a judge, decide whether he would "vouch for them to a jury in a
court." McCloy's letter to me ends as follows:
"Mr. Stimson also sent me a memorandum which reads as
follows:
'I should be very grateful if you could get hold
of Pehle and tell him that he must be extraordinarily
careful, I have read the report on the atrocities and
it is SO horrible that it will be sure to invite further inquiry by readers as to the care which we have
taken to authenticate it'.
Copies of all of the above-mentioned letters are attached.
Johnson
Attachments.
281
WAR DEPARTMENT
OFFICE OF THE ASSISTANT SECRETARY
Y
WASHINGTON
27 December 1944
Mr. John W. Pehle, Executive Director
War Refugee Board, Treasury Department
Washington 25, D. C.
Dear Mr. Pehle:
I am sending you a copy of the reply of Oswald
Schuette to Mr. Stimson.
You will recall that Mr. Schuette wrote to
Mr. Stimson after the publication of the last report
of the War Refugee Board. Mr. Stimson also sent me
a memorandum which reads as follows:
"I should be very grateful if you could
get hold of Pehle and tell him that he must
be extraordinarily careful. I have read the
report on the atrocities and it is so horrible
that it will be sure to invite further inquiry
by readers as to the care which we have taken
to authenticate it.' II
Sincerely,
/8/ John J. McCloy
282
C
OSWALD F. SCHUETTE
National Press Building
Washington, D.C.
Y
December 18, 1944
Hon. Henry L. Stimson
Secretary of War
Pentagon Building
Washington, D. C.
Dear Mr. Stimson:
I appreciate greatly the courtesy of your reply of December 13
to my letter of November 28, concerning the War Refugee Board's
report on German Atrocities, made public November 26, 1944. I know
how busy you are with more important matters.
But you are the one member of that Board whose judgment in
matters of this kind is entitled to the respect of the public.
And your name was used to induce the public to accept as authentic
the anonymous "eye-witness" reports of the happenings at the "Ger-
man Extermination Camps - Auschwitz and Birkenau. H
Your letter leaves unanswered my question as to whether you
critically examined these reports before they were given to
the public, with your endorsement and with the statement of your
Board that "it is making the reports public in the firm conviction
that they should be read and understood by all Americans.' You
say in your letter that the decision that the report is authentic
is "based upon the opinion of trusted and trained officials of the
board" and "upon the considered judgment of experts in neutral
had
countries.
I doubt whether, as a lawyer, you would have submitted to a
court, on far less weighty matters, any anonymous testimony merely
authenticated by "the opinion of trusted and trained officials"
or "the considered judgment of experts. Yet that is not the real
issue. The main point is that the public, your public, whom the
Board has urged to read this document, is entitled to know that
you too have read it -- and carefully.
I am sure that you have not done this. For if you had, I am
confident you would have hesitated to vouch for its truthfulness.
Please remember that this document is not offered by your Board. as
an indictment or as a compilation of general charges. It is
offered in proof of such charges, as the detailed account of the
personal experiences of three-eye-witnesses. Two of these were
themselves participants -- even though under coertion -- in the
revolting crimes they report. The principal one of these unnamed
eye-witnesses testifies that from May 1942 to January, 1943, he
283
-2-
was the "chief attendant and later administrator" of the "sick
building" (Krankenbau) which was the "much dreaded Block 7" of
the Birkenau prison.
"This building", he says (pg. 9), "was nothing else than
an
assembly center for death candidates. *** Twice weekly, Mondays
and Thursdays, the camp doctor indicated the number of prisoners
who were to be gassed and burned ***. The weekly 'draft' in dead
from Block 7, was about 2,000 of whom ,200 died of 'natural
death' and about 800 through 'selection. *** Until January 15,
1943, up to which time I was administrator of 'Block 7' and therefore in a position to directly observe happenings, some 50,000
prisoners died of 'natural death or by 'selection'.
Although his own report does not tell what he did after he
gave up his post as "administrator" in January 1943, the document
issued by your Board says (pg. 34) that when he and his companion
one of your other witnesses -- escaped from Birkenau, April 7,
1944, the two had held posts as "block recorders", and that as a
result of their escapes all Jews exercising such functions were
removed. The "block recorders", the statement explains (pg. 25)
were the "right hand" of the "block eldest" who was responsible
for order in each block and had power over life and death. "Until
February 1944," adds the statement, "nearly 50 percent were Jews".
So the main portion of the testimony which your Board asks
the public to read, on your guarantee of its truthfulness, is the
statement of a man who was himself a trusted prisoner charged with
grave responsibilities in the administration of this house of
murder.
Each day, according to his report, the march of death was
mobilized under his eyes. Each day he was a part of its heartrending, bestial brutality. After almost two years of this experience, he escapes. Not as a raving maniac. No. He writes or underwrites - thirty pages of single spaced typewriting, filled
with the horrible details. Names, dates, places, pages of complicated serial numbers, gruesome incidents and trivial facts,
fill these carefully phrased pages.
An official reporter, without a conscience or a heart, with
nerves of iron and a mind of steel, plus a ream of notebooks and
high authority to take them out prison with him, could not have
compiled 80 precise a record of everything that was done in those
two terrible years. Yet we are asked to believe this man did 80
under the vigilant eyes of the prison keepers who murdered, he
says, 1,765,000 prisoners while he was one of them.
It may be true - God in His Mercy forbid! But it is difficult to believe that this particular witness could have written, -
284
-3-
as we are supposed to believe that he did - with such detail, the
day by day story of two such horrible years.
Please read it yourself, Mr. Secretary, and calmly if you can,
as a lawyer and a judge, and then decide whether you would vouch
for it to a jury in a court.
Sincerely yours,
/s/ Oswald F. Schuette
285
THE ASSISTANT SECRETARY OF WAR
WASHINGTON
4 December 1944
Mr. J. B. Friedman
War Refugee Board
Washington, D. C.
Dear Mr. Friedman:
Thank you for the draft reply to
Mr. Schuette's letter to Secretary Stimson.
I thought it was a very good job.
Sincerely,
/s/ John J. McCloy
JOHN J. McCLOY
Assistant Secretary of War
286
C
o
P
December 2, 1944
Y
MEMORANDUM
TO:
Mr. McCloy
FROM:
Mr. Friedman
Pursuant to your request of yesterday, I send
you herewith a suggested draft of reply which you may
wish to use in answering the letter received by Secretary Stimson from Mr. Oswald F. Schuette under date of
November 28, 1944. Mr. Schuette' '8 letter is returned
herewith.
Attachments.
287
Dear Mr. Schuette:
Reference is made to your letter of November 28, 1944,
in which you inquire about a report recently issued by the War
Refugee Board and entitled "German Extermination Camps Auschwitz and Birkenau. #
I understand fully your skepticism concerning atrocity
stories which undoubtedly arises from the fact that during and
after the First World War some of the stories which were published
were later proved without foundation. It is precisely because
of this regrettable experience in the past that all of us have
been reluctant to believe the stories of incredible German bru-
tality which have come to light in the last few years. I regret
to state, however, that the evidence supporting these accounts
is all too abundant.
The decision that the report referred to in your letter
is authentic is based upon the opinion of trusted and trained
officials of the War Refugee Board, both here and overseas, and
upon the considered judgment of experts in refugee and related
matters in neutral countries. The report contains only material
about which there is no uncertainty either in the minds of the
narrators or among the many qualified people who examined them
in person. The report was also checked against other unpublished
material on the same subject and against the testimony of other
eye-witnesses of similar or related incidents.
I can assure you that every available device was used
to establish the accuracy of this testimony. As a result, and
as you will notice in the enclosed copy of the report, the
following statement is made in the foreword: "The Board has
every reason to believe that these reports present a true picture,
of the frightful happenings in these camps. #
Very truly yours,
Secretary of War.
Mr. Oswald F. Schuette,
National Press Building,
Washington, D. C.
288
THE ASSISTANT SECRETARY OF WAR
Y
WASHINGTON
1 December 1944
MEMORANDUM FOR MR. FRIEDMAN:
Herewith letter to the Secretary of War
from Oswald F. Schuette of November 28, 1944 regarding
the War Refugee Board's press release last Sunday on
the subject of German extermination camps.
In accordance with our telephone conver-
sation of this morning, will you please draft a suggested reply for the Secretary's signature. Kindly
also return Mr. Schuette's letter.
J. J. McC.
289
OSWALD F. SCHUETTE
National Press Building
Washington
Y
November 28, 1944
Hon. Henry L. Stimson
Secretary of War
Pentagon Building
Washington, D. C.
Dear Mr. Secretary:
The War Refugee Board--of which you are a member--has just
made public a voluminous and detailed account of the murder of
1,765,000 prisoners, by the Germans, in what it calls the "German
Extermination Camps, Auschwitz and Birkenau."
"The Board, says the official statement, "has every reason
to believe that these reports present a true picture of the
frightful happenings in these camps. It is making the reports
public in the firm conviction that they should be read and understood by all Americans."
Your membership on this board gives this publication its
chief claim to public acceptance. As Secretary Hull was ill for
many months, prior to his resignation, it is not to be assumed
that he had an opportunity to make a critical examination. A1though the only remaining member, Secretary Morgenthau, is a
lawyer, he has no background of experience that would warrant the
assumption that he was able to make the critical analysis necessary
to determine the credibility of the report.
You, however, have such an outstanding reputation as a lawyer,
and as a conscientious public official in two of the highest executive posts in the nation, that your name on the document gives it
an overwhelming authenticity.
That fact places upon you a serious responsibility. Atrocity
stories are nothing new in war propaganda. I was an American War
Correspondent for three and one half years in the last war, and
know something of what was done in that field.
So I am writing this letter to ask you three simple questions:
1. Did you read the reports of the three unnamed witnesses,
before they were accepted as true by your Board?
2. Did you examine them critically to see that they bore on
their face the evidence of truth?
3. Did you make any further investigation of the signers,
-2-
290
or of the circumstances which led to the preparation of the de-
tailed accounts?
As a lawyer, I am sure you realize, even more than a layman,
that the value of any anonymous testimony is only so good as the
care with which the lawyer, who vouches for its truth, has tested
its veracity and integrity.
I shall appreciate the courtesy of your reply.
Sincerely yours,
/s/ Oswald F. Schuette
OFS:K
291
Distribution of true
December 30, 1944
reading only by special
arrangement. (SECRET w)
3 p.m.
AMEMBASSY
LONDON
10825
The following for Mann is WRB 30.
Reference your letter December 2.
(1) Report submitted by trustees of Czechoslovek program is
satisfactory to Board, Treasury and labor groups sponsoring pro-
gran.
(2) Your action with respect to $75,000 of funds for Polish
program is approved by Board. Labor groups here have been ad-
vised of this and approve. However, they suggest that you advise
the trustees of the Polish project of the fact that the remittance
of $75,000 has been made but will not be released to then until you
receive report that the $250,000 has been sent into Poland. Please
advise Board when you have further information concerning the
$250,000
STETTINIUS
(GLK)
STESTINIUS
WHB:MMV:KG
12/29/44
BC
EE
CE
SWP
292
AMEMBASSY
LONDON
10833
The following for Mann is WRB 31.
Reference your 11395 of December 22 concerning funds
for Belgian War Relief project.
Please advise Abranson that on December 13 McClelland
paid Swiss frane equivalent of $90,000 (total of all Belgian
funds remitted to Switzerland) to Decaritat, Belgian Charge
d'Affaires in Bern. This payment was made by McClelland in
accordance with instructions sent by the Board on behalf of
Abranson's group and A.F.L. and only after Ministry of
Interior at Brussels had wired Decaritat authorizing him to
accept these funds stating they were in contact with Major
in Belgium and would make available to him in Belgium the
local currency equivalent. Labor groups here request that
you ask Abranson to get in touch with Jef Rens in London
immediately who has all background on this transaction.
STETTINIUS
(GLW)
WRB:MMV:KG
12/30/44
BC
KE
SMP
293
LFG-658
Distribution of
Paris
true reading only by
special agreement.
Dated December 30, 1944
(SECRET w)
Rec'd 1:20 a.m., 31st
Secretary of State,
Washington.
1132, December 30, Noon
FOR WRB FROM HOFFMAN FOLLOWING FOR LEAVITT FROM
SCHMARTZ. CHARGE JOINT DISTRIBUTION COMMITTEE NEW YORK
Arrived here and have been conferring Arthur
Greenleigh preliminary his taking over. Expect leave
for London next days confer Passman whose immediate
return to Middle East most important.
Hope you have succeeded obtaining permission on his
entry Bucharest. Most urgent additional American
personnel be sent France for work here where situation
most complicated and also for reassignment eventually
to other neighboring countries. In addition to Laura
Margulies (repeat Margulies), whose entry here we
undertaking facilitate, suggest you send at least
three other capable staff members including Max
Perlman. Also extremely important we send a competent
American to assist Saly (Saly) Mayer (repeat Mayer)
Switzerland who been overtaxed with many duties and
responsibilities which he can no longer be expected
carry along. Mayer will arrange Swiss visa and we
will try facilitate French transit. Expect remain
in London one week and then return here to complete
organisational abbup.
CAFFERY
WSB
294
PLAIN
GEK-563
Lisbon
Dated December 30, 1944
Rec'd 6:55 p.m.
Secretary of State,
Washington.
4323, Thirtieth
JDC 143 WRB 281 FOR LEAVITT FROM PILPEL
Further our 127 six hundred detainees from Stars
Zagore Bulgaria now Edirne Turkey awaiting January quota
immigration certificates proceed Palestine.
NORREB
MRM
295
PARAPHRASE OF TELEGRAM SENT
FROM:
Secretary of State, Washington
TO:
AMERICAN LEGATION, BERN
DATED:
NUMBER:
December 30, 1944
4398
SECRET
Board and Department agree with suggestions made in your
8177 of the sixteenth of December. In accordance with this,
you are asked to advise the Swiss officials that individuals whose
names were or will be forwarded to you pursuant to Department's
of 2605 of the twenty eighth of July and 2918 of the twenty fourth
August are eligible for exchange againstt German civilians under
Department's 3082 of the sixth of September and A-540 of the
ninth of November as amended by Department's message number 4289
of the twentieth of December. Although all of these individuals
might be considered as bearing "documentation reflecting a right
of admission into one of the Republica of the Western Hemisphere"
for the sake of uniformity, they should be included under
category G of Department's A-540 as amended by Department's
4289 of the twentieth of December. In the event the Legation or
the Swiss because of special circumstances prevailing in a given
case find that any persons ao named are entitled to classification
in
a higher category,
with reference to the Department such
reclassification
is authorised.
We hope that under this procedure nothing will stand in
thequestion
way of the
speedy
transmission
in
to the
Gernan
officials. of the names given in the lists
is for McClelland.
This 18 WRB Bern cable number 346. The foregoing
STETTINIUS
SWP
Paraphrase
DC/L:MLG
1-2-45
Gaston, Miss
Chauncey
the Sec'ty) Ackermann,
Hodel,
Marks,(for
McCormack,
Pehle, FilesAkain, Cohn, Drury, DuBois,
296
ASB
Distribution of
true reading only by
special arrangement
(SECRET W)
December 30, 1944
3 p.m.
AMLEGATION
BERN
4399
The following for McClelland is WRB 347.
Please obtain from Sternbuch as soon as possible a
detailed report on the use of all funds remitted to him by
the Vaad Habatsala Emergency Committee for operations authori-
zed under license No. W-2117. This report is urgently requested by the Vaad Hahatzala Emergency Committee and is
required under the terms of the license. Report should be
forwarded through War Refugee Board.
STETTINIUS
(OHN)
WRB:MIV:KG
12/29/44
w
SWP
297
GCH
Distribution of
December 30, 1944
true reading only by
special arrangement.
5 p.m.
SECRET W
AMLEGATION
BERN
4401
The following for McClelland is WRB 345.
Ancross shipped for Board on S.S. Caritas II second half
of December for off-loading at Toulon a total of 10,112 cases
containing 60,672 three-kilo WRB food parcels for consignment
to ICRC for distribution to unassimilated persons in camps.
Outer shipping cases are marked as described in our 4001 of
November 25, and each contain six three-kilo parcels. This
shipment includes 9750 cases containing 58,500 "K" parcels
which do not contain receipt cards. Balance of 695 cases
containing 4,172 parcels include receipt cards as per wirephoto September 21. This shipment concludes the initial WRB
300,000 three-kilo food parcel program.
STETTINIUS
(GIN)
WRB:18IV:KG
12/29/44
WE
SWP
298
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, MOSCOW via Army
TO:
Secretary of State, Washington
DATED:
December 30, 1944
NUMBER:
5059
CONFIDENTIAL
With regard to the fabe of Jewish refugees in eastern
Europe the information which follows is submitted which has
been secured from a reliable non-Soviet source who is in
touch with the Polish Jewish community in the Soviet Union,
and this information will supplement that which was given in
my message dated December 9 No. 4730. It may be the desire
of the Department to make some of this information available
to the War Refugee Board or all of it.
I have broken down this information by the countries
concerned for purposes of convenience, namely Csechoslovakia,
Poland and the Soviet Union.
CZECHOSLOVAKIA. Almost no Jews were found at the time of
liberation of Ruthenia. Subsequently a few Jews returned to
that area from Hungary and Rumania but they constitute only
5 to 8 percent of the Jewish population which was there
formerly. There are only 180 in Berehovo, and there are even
less in Sevljusi. The Jows of military age who had declared
themselves previously to be of Jewish or of authenian nationality
were mobilised into the Caech units in the USSR at first in
which the dominant element is now said to be the Ruthenians.
This practice was stopped later and the Soviet military
authorities began to draft such of these Jews as declared
themselves to be Ruthenians directly into the Red Army in
spite of the protest of the Csechoslovak Civil Affairs
Delegation. Request has been made of the American Joint
Distribution representatives in Tehran to send supplies for
the Jews in this area and they have agreed to do this. The
situation is still not exactly clear in Slovakia. It is
estimated that before the German occupation there were in that
area 120,000 Jews. Lists of about 75,000 who are known to
have been killed by the Germans are in possession of the
Caech Government. At the present time only about 20,000 are
believed to remain th that area, and many of these people have
become
299
-2- #5059 from Moscow via Army, dated December 30, 1944
become Partisans; they have formed their own bands of Partisans
since they were not accepted into the Slovak Partisan Army.
After liberation practically none of them desire to remain in
Slovakia.
POLAND. The number of Jows remaining in liberated Poland
is placed at only 8,000 by this source. Having lost confidence
in themselves and in all established authority and not being
willing to make any direct assertion of their rights even the
most elementary these people are reported to be in a pitiful
moral state. They are encountering a very considerable
amount of anti-Semitism although they are finding employment
without difficulty. Physical violence against them has been
seen in the streets of Lublin; not even the Moscow representatives of the Lublin Committee deny this. Their needs are
for clothing and medicine rather than for food as is the case
with the remainder of the population in that area. Particularly
distressing is the plight of the orphan children. There have
recently been established three orphanages and it is hoped that
these children can be removed to Palestine eventually.
SOVIET UNION. The number of Polish Jews in Russia is
placed at 250,000 by this source. Eighty percent of these
have Russian passports it is estimated, and of the remaining
50,000 many of them are listed by the Soviet authorities as
being without citizenship of any kind. About 70 percent of
the total number are young people between the ages of 18 and
35; in part this fact is explained by the greater willingness
of the younger elements to submit in 1939 and 1940 to
evacuation by the Soviet authorities, also by the fact that
mortality has been much higher among the very young and the very
old due to hardships to which all of them ha ve been subjected
since they arrived in the Soviet Union, where hardships have
been great. These people are permitted still to consider
themselves to be Polish Jews as distinguished from Russian Jews
and to haverelations with the Committee of Polish Jews in
Moscow in spite of the fact that four-fifths of them have
Soviet passports. The Committee of Polish Jews in Hoscow is
affiliated with the Central Jewish Committee in Lublin and
Commerstein who is also a member of the Polish Committee of
Liberation in Lublin heads this Committee of Polish Jows in
Moscow also. This Committee of Polish Jews in MOSCOW functions
under the close supervision of Polish Communist authorities
and of authorities of the Soviet. Entirely inadequate is its
office space in Moscow which consists of one or two rooms in
the headquarters of the Union of Polish Patriots. This
Committee
300
-3- #5059 from MOSCOW via Army, dated December 30, 1944
Commitéee is almost entirely lacking in materials or funds with
which to aid the people in whom it is interested and even its
lack of office
materials, stationery, et catera severely
handicaps
its work.
The above Cobmittee should not be confused with the
Polish section of the Committee of anti-Fascist Jews in Moscow,
which is not in any sense representative of the Polish Jews
in the Soviet Union but rather is a political propaganda
committee which is designed to further the Soviet information
program among Jewish circles abroad, in the United States
especially.
Jew named Epstein is understood to be
at
the headAnofAmerican
it.
The Polish Jews in the Soviet Union have found little
cultural contact and no organizational contact with regular
Soviet citizens of Jewish origin, in general. These Soviet
citizens of Jewish origin are not interested in general in the
preservation of Jewish traditions or culture as such whereas
the Polish Jews who have just arrived still long for the culti-
vation of Jewish tradition which they have known in the past
and for the Jewish community life. The fact that there are as
many as 50 Polish Jewish actors and actresses in Moscow who are
not able to practice their profession here and who are living in
great physical distress is an example of this situation. They
consider the local Jewish theater to be preoccupied with Soviet
nationalist propaganda and devoted to the disruption of Jewish
cultural values rather than to their preservation and so it is
not possible for them to work with the local Jewish theater.
Still obscure remain the prospects for the return of Polish
Jews to Poland. The Soviet authorities in general have not
shown themselves to be willing to let these people leave
although recently exceptions seen to have been made in the
Lvov area in favor of Jews who wish to move to the territory
over which the Lublin Committee exervises authority. There is
a widespread desire among the Polish Jews in the Soviet Union
in general to get to Polish territory which has been liberated
not because they look forward with hope to the establishment
of permanent residence there but due to the fact that they
think that when they are once there they might contrive later
to emigrate from that territory to Palestine and to the United
States whereas they have little hope of being able to emigrate
from
the Soviet Union directly.
DC/L:LCW:1001
1/4/45
HARRIMAN
301
NOT TO BE RETRANSMITTED
COPY NO.
SECRET
4
OPTEL NO. 422
Information received up to 10 a.m. 30th Dec. 44.
1. NAVAL
An MTB mined and sunk 28th/29th off Zeebruggo, another
damaged while picking up survivors but reached harbour. At
Piraeus situation yesterday reported quiet except for some shelling
of Naval establishments: a ship berthed and discharged cargo for
first time since hostilities began. Strike at Mitylene has ended.
An attack yesterday on U-Boat S.E. of Isle of Wight by two
H.M. Frigates and one H.M. Destroyer. Early 30th a Wellington
attacked a U-Boat in the channel and a U.S. Navy Liberator
attacked one South of Cork.
Two U.S. Liberty ships torpedoed in convoy off Portland Bill
yesterday.
2. MILITARY
Western
Front
Further progress Echternach area where our troops
reported in possession of the town and closing up to
the River Sure astride it. Third U.S. Army attack
has rained more ground S.F. and S.W. Bastogne where enemy seems to
be digging in. Patrols from Northern and Southern flanks of
salient have met in St. Hubert without encountering enemy.
Arakan. The troops which moved down Mayu River by
Burma
boat have occupied Htizwe. Further North another
force advancing down East bank Mayu has reached a point some eight
miles North of Htizwe,
North Burma Chinese have occupied two villages about seven miles
N.W. Namkhan.
Eastern
Front
Russians report local success Czechoslovakia. They
have broken into Western part Budapest and mopped up
enemy units in Danube elbow.
3. AIR
Western
Front
28th/29th. Railway centres Munchen-Gladbach 752Coastal
tons
and Bonn 905: shipping Oslo Fjord 330. Three
Command Halifaxes scored two hits each with 500 pound
bombs on two 5,000 ton tankers Skagerrak and set them on fire.
29th. Bomber Command dropped about 900 tons on two
railway centres Koblenz and 86 on E/R boat pens Rotterdam. 780
U.S. Heavy Bombers - six missing, escorted by 697 fighters - six
missing, but no enemy aircraft encountered, dropped 1,800 tons on
railway and communication centres, bridges etc. Western Germany
and in battle area.
1,200 fighters operated over battle areas and 189
aircraft flew reconnaissances: 23 Allied fighters missing, 32
German aircraft destroyed in action.
29th/30th. Bomber Command aircraft despatched,
Buer oil plant 327 - four missing: Troisdorf railway centre
between Cologne and Sieburg 187: other operations 77. Bombing at
both main targets well concentrated.
26th/27th. 42 Heavy Bombers obtained direct hits
Mediterranean
on
Casarsa railway bridge 35 miles N.E. Treviso, 27th.
541 es corted Heavy Bombers - five missing bombed Vosendorf oil
refine ry near Vienna 82 tons, four railway centres Northern Italy
object:ives battle area.
377. 244 Medium and 1145 light bombers and fighters attacked
302
27th/28th. 33 Heavy Bombers obtained three hits on
Susegana railway bridge 13 miles North Treviso,
28th. 504 escorted Heavy Bombers - three missing
bombed five oil refineries Southern Germany and Czechoslovakia
493 tons, 12 railway targets Southern Germany, Northern
Italy, Austria and Czechoslovakia 678. Fighter scored
7:0:27 on the ground for one missing. 282 medium and over
970 light bombers and fighters - five missing, attacked
targets Northern Italy and Yugoslavia.
4. HOME SECURITY
To 7 a.m. 30th.
Seven rockets reported.
-2-
Hamel 303
PARAPHRASE OF TELEGRAM RECEIVED
FROM:
American Embassy, Paris
TO:
Secretary of State, Washington
DATED:
December 31, 1944
NUMBER: 1160
Last night in a personal and confidential conversa-
tion Bidault told me that they are still studying but
have not yet reached definite conclusions on the
position France will take regarding the future economy
of Germany in general and German industry in particular.
The French do not wish to see Germany reduced to economic
misery as such action would undoubtedly cause trouble,
but they believe that all war and near-war industries
should be abolished in Germany. The Germans would be-
come aggressive in some way. They want to eliminate
the possibility of another German attack but want to
include them as a part of the over-all European economy.
CAFFERY
304
EK-712
Distribution of true
Paris
reading only by special
arrangement. (SECRET w)
Undated
Rec'd December 31, 1944
10:34 p.m.
Secretary of State,
Washington.
1150
FOR WRB FROM HOFFMAN. FOR LEAVITT FROM SCHWARTZ.
CHARGE JOINT DISTRIBUTION COMMITTEE NEW YORK.
Please forward to Arthur Greenleigh via airmail
all materials in connection with your central location
bureau. Including registration card and instructions
issued to participating agencies.
CAFFERY
JMS
Miss Chauncey (for the Sec'y) McComments Ackermann, Akain, Cohn, Drury,
DuBois,
Gaston, Hodel, Marks, McCormack, Pehle, Files
305
JMB-793
Distribution of true
Ankara
reading only by special
arrangement. (SECRET W)
Dated December 31, 1944
Rec'd 11:35 p.n.
Secretary of State
Washington
2438, December 31, noon.
FROM KATZKI TO PEHLE WRB ANKARA 207.
As a result of Ambassador Steinhardt's prompt and repeated energetic interventions with the British Ambassador
in Ankara, the latter requested and secured authorisation
from the British Foreign Office in London to issue
Palestine entry certificates in Istanbul to the 630 emi-
grants proceeding from Rumania to Palestine and detained
at Stalingrad Bulgaria (see Enbassy's 2402). We are informed that as a result the British Enbassy has now requested Turkish Foreign Office to admit these emigrants
into Turkey in transit.
The British Embassy originally had taken the position
that its decision to terminate the facilities heretofore
made available by the Turks under the general agreement
was final and must stand. It was as a result of Ambassador
Steinhardt's insistentence that exception be made in
behalf of these 630 refugees who were subjected to hard-
ship through no fault of their own that the British
Ambassador so recommended to the Foreign Office in London.
In explanation to Ambassador Steinhardt of his action
in terminating the general agreement without notice to him
and without knowledge that these Amigrants were en route
the British Anbassador stated that his notice of termination to the Turkish Foreign Office was given pursuant to
specific instructions received from London and in the
belief that British passport control officers who would
be authorised to issue Palestine entry certificates had
already arrived in Sofia and Bucharest. The complication,
he stated, arose out of the non-arrival of these officers,
a fact which was not known to him when notice of termination was given
306
-2- $2438, December 31, noon, from Ankara
tion was given (#) the to British Embassy attributed its
failure to notify Ambassador Steinhardt or other interested persons to a regrettable oversight.
Apparently the British Embassy is now making every
effort to correct the situation. The arrival of the re-
refugees in Istanbul is expected shortly as soon as the
complicated technical details have been arranged.
A full report will be dispatch8d to you by pouch.
STEINHARDT
WMB
(*) Apparent omission.
307
NCT TO BE TRANSMITTED
COPY NO.
SECRET
OPTEL No. 423
Information received up to 10.a.m. 31st December 1944.
is MILITARY
Western Front. East of Bastogne advance of up to 2 miles on
mile front and U.S. troops yesterday 2 miles from Wiltz. Further
contact established with U.S. Division in Bastogne. West of Bastogne
reconnaissance units are within 5 miles S.E. St. Hubert.
Fighting continuos Rochefort. Slight U.S. advance to River Roer
South of Elsenborn. Germans have launched small counter attack on
village North of Geilenkirchen. Considerable patrol activity by
7
both sides along Maas West of Hortogenbosch.
Italy An Indian Division, brought across to Serchio Valley as rein-
forcements, has established forward elements in Barga.
Greece Operations in 4thens have continued successfully. Our parachute troops have cleared most of the Iroon district North of the
Acropolis while in the South-Eastern suburbs British Infantry and
Greek mountain troups have launched strong co-ordinated drive which
has already not with success; 2 heights S.W. of the Stadium captured
and progress made towards Viron district, An E.L.A.S. attack on
Likavittos Mountain repulsed. In Epirus strong E.L.A.S. forces continue to press general Zervas and his E.D.E.S. guerillas.
2. AIR
Western Front 29/30th Buer 1615 tons and Troisdorf 605.
30th. 1251 escorted U.S. heavy bobubers dropped
3100
tons
on
railway
contres and bridges behind the area of German
counter offensive:
Pathfinder technique employed, results unobserved.
8 Bombers missing, 7 Fighters outstanding but 4
believed safe Allied territory.
95 Medium Bombers and 106 Fighter Bombers dropped
305 tons on railway centres, supply dumps etc.
Southern Sector. 528 Fighters attacked defended
towns and communications Central sector dropping 226 tons and a
further 462 Fighters flew offensive patrols and reconnaissances; 70
tanks, 1592 road and rail vehicles and 69 locomotives destroyed or
damaged. Enemy casualties 5:3:1, Ours 7 Fighters missing.
30th/31st. Bomber Command aircraft despatched:
Cologne (Kalk) Railway centre 470 - 2 missing; Houffalize, N.E. of
Bastogne 166 - Landing reports not yet available.
Henover 68; Bombor support 61; Other operations 28.
Moditorrencan
29th. 446 escorted heavy bombers dropped 952 tons
reilways Southern Germany, Austria and Northern Italy. Many targets
cambed visually with good results. 1076 medium Light and Fighter
308
-2--
Bombors and Fighters attacked supply contres. communications etc.
Northern Italy with good results. 38 Heavy Bombers and 2 Fighters
catstanding but some known landed Allied territory
:
HOME SECURITY .. to 7.a.m. 31st.
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